Your Directors have pleasure in presenting their 2T Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31s'2017.
Company's financial performance for the year under review along with previous year'sfigures are given hereunder:
|Particulars ||As on 31.03.2017 ||As on 31.03.2016 |
| ||(Rs. Lakhs) ||(Rs. Lakhs) |
|Profit before Depreciation Exceptional items & Tax ||118.41 ||126.66 |
|Less: Depreciation ||25.24 ||24.20 |
|Profit before Exceptional items & Tax Less: ||93.17 ||102.46 |
|a)Exceptional items ||48.17 ||- |
|b)Provision for Tax ||8.60 ||- |
|Net Profit for the year ||36.40 ||102.46 |
As you are aware that the last two decades Kerala alcoholic industry went through asharp down hill due to prohibitionary liquor policies from mid 1990s and culmination ofthese polices ended up three years back with closure of all the bars except in five starsector and closure of increasing number of retail outlets year by year. But to a greatshock to the industry was Supreme Court direction to close all liquor outlets around theState and National highways within a distance of 500 meters. Kerala being a lateral statemany business establishments in alcoholic beverages got effected by this ruling.Inevitably your company had to suffer potential progress and it is reflected in ourperformance of our net profit as only Rs.36.40 lakhs against Rs. 102.46 lakhs of lastyear. Also the currency ban and steep increase in raw material costs affected theindustry generally. However with strict cost control and hard work our managers staffsand workers did splendid job not only in avoiding losses but to make a small profitinspite of bad circumstances. The Board must thank each one of them on your behalf. We dohope in the years to come with more condusive polices we will be able to achieve betterresults though the fortunes of our company relies much to the changing policies of thegovernment as liquor is heavily regulated product. RESERVES
The Company has not transferred any amount to its reserves during the year underreview. However the current year profit of Rs. 3639708/- has been adjusted against theaccumulated losses and the balance carried forward losses of Rs. 92131929/- has beenshown underthe Reserves and Surplus in the Balance Sheet. DIVIDEND
Due to accumulated losses the company is not able to declare any divident.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
There is no amount required to be transferred to Investor Education and Protection Fundin accordance with the relevant provisions of the Companies Act 2013 and rules madethereunder.
The paid up Equity Share Capital as on 31 st March 2017 was Rs. 116873000. Duringthe year under review the Company has not issued any shares.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureNo.1 and is attached to this Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review 4 Meetings of the Board of Directors 4 Meetings of theAudit Committee 1 Meeting of the Nomination and Remuneration Committee and 8 Meetings ofthe Stakeholders Relationship Committee were held. Further details of the same have beenenumerated in the Corporate Governance Report annexed herewith.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis;
(e) The internal financial controls to be followed by the company were laid down andsuch internal financial controls were adequate and were operating effectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
There have been no frauds reported by the Auditors pursuant to Section 143(12) of theCompanies Act 2013. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
In adherence of section 178(1) of the Companies Act 2013 the Board of Directors ofthe Company approved a policy on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under section 178(3) of the Actbased on the recommendations ofthe Nomination and Remuneration Committee.
The Company's Policy relating to appointment of Directors Directors' qualificationspositive attributes independence of Directors and other related matters as provided underSection 178(3) of the Companies Act 2013 is furnished in Annexure No.2- and forms part ofthis Report.
M/s.Varma & Varma (Firm Registration No.004532S) Chartered Accountants theexisting Statutory Auditors of the Company will be completing their term as StatutoryAuditors on conclusion of 27th Annual General Meeting convened on 27thSeptember 2017. TheBoard places on record their appreciation for services rendered by M/s.Varma & VarmaChartered Accountants as Statutory Auditors of the Company. The Company is required torotate the Statutory Auditors on completion of theirterm as per provisions of theCompanies Act 2013. Accordingly in terms of provisions of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 the Audit Committee has recommended and theBoard of Directors have proposed the appointment of M/s. GGA Associates CharteredAccountants having Firm Registration No. 009663S as Statutory Auditors of the Company fora period of five consecutive years from the conclusion of 27thAnnual General Meeting tillthe conclusion of 32nd AnnualGeneral Meeting subject to ratification of the appointmentby the Members at every Annual General Meeting held after this Annual General Meeting forapproval of the Members. The observations of the Auditors in their report are selfexplanatory.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed Mr. V.S. Subhash M.Com LLB FCS M/s. JMACS Associates to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure 3.
With reference to the observations made by the Secretarial Auditor in his report theDirectors wish to state that the company being a sick company has not appointed a wholetime Company Secretary and due to tight financial position the company has not paid thelisting fees due to the Stock Exchange. Once the position improves necessary steps wouldbe taken for appointment of whole time Company Secretary and listing fees due to the StockExchange will be paid.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
There were no loans guarantees or investments made by the Company under section 186 ofthe Companies Act 2013 during the period under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into during the financial year 31st March 2017 with RelatedParties as defined under the Companies Act 2013 and Regulation 23 of SEBI (ListingObligations and Disclosure Requirements) Regulations. 2015 were in the ordinary course ofbusiness and on an arm's length basis. During the year the Company had not entered intoany transaction referred to in Section 188 of the Companies Act with related partieswhich could be considered material. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3) of the Companies Act in Form AOC-2 is notapplicable. Attention of Members is drawn to the disclosures of transactions with relatedparties set out in Notes to Accounts * Note 26 forming part of the financial statements.However it is to be noted that this venture is advantageous to your company as itcontributes profitability.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under section 134 (3) (m) of the Companies Act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is furnished in Annexure- 4 and is attached to this report.
RISK MANAGEMENT POLICY
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate equate and mitigate risks in order to minimize itsimpact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. It is dealt with in greater details in the management discussion and analysissection.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
ANNUAL PERFORMANCE EVALUATION
In accordance with the criteria suggested by The Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of non-independentdirectors and the Board as a whole based on various criteria. The performance of eachindependent Director was evaluated by the entire board of directors on various parameterslike engagement leadership analysis decision making communication governance etc. TheBoard and the Independent Directors were of the unanimous view that performance of theBoard of Directors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsetc. The Board was of the unanimous view that all the committees were performing theirfunctions satisfactorily.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2017.
Pursuant to the provisions of section 152 of the Companies Act 2013 Mr. KavasseryVeetil Viswamohan (holding DIN:00666339) is due to retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. During theyear under review the shareholders in their meeting held on 22nd September 2016 haveapproved the reappointment of Sri.Kavassery Veetil Viswamohan as Chairman & Whole TimeDirector of the Company with effect from 30th April 2017.
SUBSIDIARIES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.There was no deposit remaining unpaid or unclaimed as at the end of the year.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The Directors andManagement confirm that the Internal Financial Controls (IFC) are adequate with respect tothe operations of the Company. A report of Auditors pursuant to Section 143(3)(l) of theCompanies Act 2013 certifying the adequacy of Internal Financial Controls is annexed withthe Auditors report
PARTICULARS OF EMPLOYEES AND REMUNERATION
The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed as Annexure- 5 to this Report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate at the rate of not less than RupeesOne crore Two lakh if employed throughout the year or Rupees Eight Lakh and Fifty Thousandper month if employed for part of the year.
The Audit Committee of the Board of Directors of the Company comprises four Membersnamely Mr. M.P. Gopalakrishnan Mr. K. Rajkumar Mr. N. Muralidhar Nair & Ms. R.Smitha out of which three of them are Independent Directors. Mr. M.P. Gopalakrishnan anIndependent Director is the Chairperson of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013.
The Company has in place an Anti -harassment policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaint Committee has been setup to redress complaints receivedregularly. There was no complaint received during the financial year 2016- 17 and hence nocomplaint is outstanding as on 31.03.2017 for redressal.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under Regulation 34(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report.
The Board of Directors express their appreciation for the contribution made by theemployees customers and bankers for the support extended by them during the year underreview. We also would like to thank our bottling partners for their faith in us withcontinued patronage.
| ||For and on behalf of the Board |
|Palakkad ||K. V. Viswamohan Menon |
|08.08.2017 ||Chairman & Whole time Director |
| ||(DIN : 00666339) |