DIRECTORS' REPORT To, The Members, The Board of Directors is pleased to present herewith the 22nd Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report. FURTURE PROSPECTS Over the medium-term revenue is expected to grow 15-20 % per year. This will be mainly due to increased sale of female condoms in new geographies. Also large orders are expected for Female Condoms from Ministry of Health of South Africa, India and UNFPA in financial year 2015-16 and 2016-17. Future growth is expected to carry on mainly from increased sales of its Female and Male Condoms from existing and new customers and development of new value added products. Further Company is exploring the possibility of adding more products, related to women's health and wellness during the coming period. DIVIDEND Your Board of Directors' had declared interim dividend for Re. 1 ( i. e. 10% ) per equity shares at their meeting held on 17th January, 2015. Further Board of Directors' have recommended final dividend of Re. 0.50 ( i. e. 5% ) per equity shares at their meeting held on 18th May 2015 for the financial year ended 31 March, 2015. The final dividend payout is subject to approval of members at the ensuing Annual General Meeting. The dividend will be paid to members whose name appears in register of members as on the record date on 28th September, 2015. RESERVES The whole of profit after tax has been transferred to Profit & Loss account. Interim Dividend is paid from the Profit & Loss account and Final dividend recommended by board of directors shall be paid from the Profit & Loss account. There is no other amount that has been proposed to be carried to any other reserves. SHARE CAPITAL The paid up Equity Share Capital as at 31st March, 2015 at Rs. 11,11,50,000 ( Eleven Crores Eleven Lacs and Fifty Thousand Only ). During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options as sweat equity. As on 31st March 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. FINANCE AND ACCOUNTS Your Company prepares its financial statements in compliances with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and Cash Flows for the year ended 31st March, 2015. There is no audit qualification in financial statements by the statutory auditors for the year under review. LOANS, GUARANTEES & INVESTMENTS Details of loan, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. DEPOSITS The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act. RELATED PARTY TRANSACTIONS The Company has not entered into any contracts or arrangements with related parties referred to in Section 188(3) of the Companies Act, 2013. There are no transactions with related parties except those indicated out in notes to accounts. The related party transactions policy as approved by the Board is uploaded on the Company's website at the following web link <http://www.cupidltd.in/wp-content/uploads/2015/06/05_001_CG_Related_Party.pdf> INTERNAL FINANCIAL CONTROLS The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. RISK MANAGEMENT POLICY There is a continuous process for identifying, evaluating and managing significant risks faced through a risk management process designed to identify the key risks facing business. During the year a risk analysis and assessment was conducted and no major risks were noticed. The policy is uploaded on the website of the company and weblink of same is : <http://cupidltd.in//wp-content/uploads/2015/06/01_002_CG_Risk_Management.pdf> PERFORMANCE EVALUATION OF BOARD Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The same is found to be satisfactory. Familiarisation Programme for Independent Directors' : - At the time of appointing a Director, a formal letter of appointment is given to him, which inter alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, Clause 49 of the Listing Agreement and other relevant regulations and affirmation taken with respect to the same. The Chairman and Managing Director also has one to one discussion with the newly appointed Director to familiarize him with the Companys' operations. Further the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and the on-going events relating to the Company. The Company's Policy of conducting the Familiarisation program has been disclosed on the website of the Company at <http://www.cupidltd.in/wp-content/uploads/2015/06/07_002_FAMILIARIZATION-PROGRAM.pdf> DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Omprakash Garg, Chairman and Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company, and being eligible offers himself for re-appointment. Board of Director's accepted the resignation tendered by Mr. Raju Subbha Sagi due to his business commitments and personal reasons w. e. f. 14th March 2015. Mrs. Veena Garg has been appointed as an additional Woman Director w. e. f. 28th October, 2014, proposed to be approved by members in the ensuing Annual General Meeting as an Woman Director. Also, Mr. Jandhyala Lakshminayana Sarma has been appointed as an Additional Director w. e. f. 28th October 2014. Company re-designated him as Additional Director (Independent) w. e. f. 17th January 2015 proposed to be approved by members in the ensuing Annual General Meeting as an Independent Director. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. 'Appointment Letters' of Independent Directors and 'Familiarization Program' process to provide insights of the Company to Independent Directors are hosted on website of the Company. BOARD MEETINGS During the year under review, the Company has conducted 7 Board Meetings on the following dates : 29th May 2014; 06th August 2014; 19th August 2014; 28th October 2014; 22nd December 2014; 17th January 2015 and 14th March 2015. The intervening gap Meetings was within the period prescribed under the Companies Act, 2013. STATUTORY AUDITORS M/s. Bhatter & Co., Chartered Accountants, Chartered Accountants, being eligible, offer themselves for re-appointment. If re-appointed, it will be within the prescribed limits specified in Section 139 of the Companies Act, 2013. Members are requested to appoint the auditors and to fix their remuneration. SECRETARIAL AUDIT As required under Section 204 of the Companies Act, 2013, Secretarial Audit Report as obtained from Mr. Shailesh Kachalia, Practising Company Secretary is annexed and forms part of the Board Report. OBSERVATIONS - STATUTORY AUDITOR & SECRETARIAL AUDITOR There are no qualifications contained in the Auditors Report. As mentioned in the Secretarial Audit Report regarding non compliance of Section 203 of the Companies Act 2013 in respect of appointment of Company Secretary and Chief Financial Officer we would like to state that we have made efforts to appoint them but we could not get the proper candidates and we assure that we will comply the same at the earliest. Due to oversight the Company has not filled cost audit report for the year ended 31st March 2014. The Company will file by paying additional fees. EXTRACT OFANNUAL RETURN The extract of Annual Return in Form No. MGT-9, as provided under sub-section (3) of Section 92 of the Companies Act, 2013, is annexed and forms part of the Board Report. MATERIAL CHANGES AND COMMITMENTS There are no material changes having taken place affecting the financial position of the Company from the date of closure of financial year till the signing of Accounts. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS. There are no significant and material orders passed by the Regulations / courts that would impact the going concern status of the Company and its future operations. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION A ) Conservation of Energy :- i. The Company has taken all effective steps to conserve the energy by installing latest equipments for conservation of energy. As a stand-by arrangement in case of no supply of electricity of the Company has installed generator set. ii. The cumulative effect of the Energy conversations steps taken by the Company has considerably reduced the consumption of Energy and saved the cost of the Company. iii. The Company is not required to mention per unit consumption of Energy in " form A ". B & C ) Technology Absorption and Expenditure on Research & Development :- The Company has deployed indigenous technology to manufacture it products. The Company is also taking steps to upgrade its technology to improve the quality of its product so as to make same cost effective and compete in international market. FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has earned foreign exchange of Rs. 3560.87 Lacs (Previous year Rs. 931.72 Lacs) through exports, whereas the Company paid / payable foreign exchange of Rs. 67.65 Lacs (Previous Year Rs. 21.62 Lacs) towards machinery / equipments. Further payments made in foreign exchange of Rs. 59.74 Lacs (Previous Year Rs. NIL Lacs) towards other expenses. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted a Corporate Social Responsibility ( CSR ) Committee in compliance with the provisions of Section 135 of the Companies Act, 2013. The CSR committee was constituted by the Board of Directors of the Company at its meeting held on 18th May, 2015. On the recommendation of the CSR committee, the Board has approved the CSR policy of the Company. which is published on the Company's website. As the company was not covered by section 135 of the Companies Act, 2013 during the year under review, the Company has not spent any amount on CSR activates. The policy is uploaded on the website of the company and weblink of same is : <http://cupidltd.in//wp-content/uploads/2015/08/05_001_CG_01CSR-Policy.pdf> INDUSTRY STRUCTURE & DEVELOPMENTS, OPPORTUNITIES & THREATS, SEGMENTWISE PERFORMANCE, OUTLOOK, RISKS & CONCERNS The Company is engaged in activities of manufacturing and suppliers of Male and Female contraceptives (condoms). The Company's products are well accepted in the local and international market and been pre-qualified by WHO/UNFPA. The Company is marketing its products through local distribution network and has successfully executing tender awarded by United Nations Population Fund (UNFPA) and Ministry of Health, Government of India. There are Opportunities towards concentration in Rural Market and exploring the Export Market. Whereas there are threats of Competition from unorganized / small-scale sectors and new entrants in the open market. The Indian contraceptive market is highly fragmented - there are over 200 contraceptive brands, most of them are regional. Assuming an industrial growth of 8 to 10 % will absorb Company's entire production capacity. The Company is also penetrating new market in the International and Domestic front. Competition from the unorganized small-scale sector via cut throat competition from the new entrants in the market, thereby squeezing the Company's profit margins. Company is exposed to specific risks that are particular to its business, including Climatic conditions, Economic and Political cycle, Currency rate volatility, Interest rate volatility and Credit risks in India and Internationally. The management continuously assesses the risks and monitors the business and risk management policies to minimize the risk. CORPORATE GOVERNANCE A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Company's auditors confirming the compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed thereto. AUDIT COMMITTEE The Audit Committee has been reconstituted on 14th March 2015. The Audit Committee now headed by Shri Pradeep Kumar Jain as Chairman of the committee. Shri Omprakash Garg, and Shri Jandhyala L. Sarma as Members. The details of all related party transactions, if any, are placed periodically before the Audit Committee. During the year there were no instances where the Board had not accepted the recommendations of the Audit Committee. NOMINATION AND REMUNERATION COMMITTEE The Company has Nomination and Remuneration Committee pursuant to Section 178(1) of the Companies Act, 2013 and has defined the policy on Directors' and Senior Managements' appointment and payment of remuneration including criteria for determining their qualifications, positive attributes and independence of a Director. The Committee was has been reconstituted on 14th March 2015. The Nomination and Remuneration Committee now headed by Shri Pradeep Kumar Jain as Chairman of the committee. Shri Omprakash Garg, and Shri Jandhyala L. Sarma as Members. The policy is uploaded on the website of the company and weblink of the same is <http://cupidltd.in//wp-content/uploads/2015/06/05_003_CG_Nomination_Remuneration.pdf> VIGIL MECHANISM The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. It ensures that strict confidentiality is maintained whilst dealing with concerns and also no discrimination will be meted out to any person for a genuinely raised concern. Any suspected or confirmed incident of fraud / misconduct can be reported thereof. The Whistle Blower policy is placed on website of the company and weblink of the same is <http://cupidltd.in//wp-content/uploads/2015/06/05_002_CG_Whistlerblower.pdf> PARTICULARS OF EMPLOYEES No employee of the Companies is receiving remuneration as per the limits prescribed in Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. COST AUDITORS As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying on audit of cost records every year. The Board of Directors of the Company on recommendation of the Audit Committee has approved the appointment of CMA Raghunath Vijay Gadre having ICMA Membership No. M - 16096 for conducting the audit of the cost records of the Company for the financial year 2015 - 2016 on such remuneration as may be agreed upon by the Board of Directors and the Cost Auditors. A resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL ) ACT, 2013 The Company take all necessary measures to ensure a harassment free workplace and has instituted an Internal Complaints Committee for redressal of complaints and to prevent sexual harassment. No complaints relating to sexual harassment were received during the year. SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES 'Cupid Medical Research Centre Private Limited' a subsidiary of the Company had been ceased to be Company's subsidiary during the financial year 2014-15. Thereby Company doesn't have any Subsidiaries or Joint Ventures or Associate companies as on the report date as defined under the Companies Act, 2013. FORWARD LOOKING STATEMENT Statements in this report describing the Company's objectives, projections, estimates, expectations or predictions may be forward looking statements considering the applicable laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include global and domestic demand - supply conditions. finished goods prices, raw materials cost and availability fluctuations in exchange rates, change in Government regulations and tax structure within India and the countries with which the Company has business contacts and other factors such as litigation and industrial relations. Investors will bear the above in mind. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation for the assistance and co-operation received from all organizations connected with its business during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives and Staff of the Company. Your Directors are also deeply grateful for the confidence and faith shown by the Shareholders of the Company in them. For and on behalf of the Board of the Directors OMPRAKASH GARG Chairman & Managing Director DIN No. : 00140756 CIN No. : L25193MH1993PLC070846 Website : www.cupidltd.in Email : corporateaccounts@cupidlimited.com REGISTERED OFFICE A - 68, M. I. D. C. (Malegaon), Sinnar, Nasik, Maharashtra- 422 113. Place : Mumbai Date : 12th August, 2015 |