[ DIRECTORS' REPORT ] Dear Members, Your Directors have pleasure in presenting their 33rd Annual Report on the business and operations of the Company and the accounts for the financial year ended 31 March 2016. State of Company's affairs During the period under review, your company has earned revenue from operations and other income of Rs. 26980.82 lacs with a net profit of Rs. 641.77 lacs. The figures of current financial year are not comparable to the figures of last FY 2014-15, as your Company had considered closing its previous accounting period for 6 months i.e from 1 October 2014 to 31 March 2015 to align in accordance with the New Companies Act, 2013. Research & Development Bambino's focus is on innovation of functional foods, i.e. food items with definitive health benefits by fortification with natural products containing quantified amounts of active substances, thus striving for "tasteful health". Our endeavor is to focus on the market demand and manufacture products based on it. New category extensions made in Vermicelli, Macaroni, Spaghetti and Pasta variants with inclusion of natural ingredients and dietary fiber components. The objective of our R & D is to obtain new knowledge, design innovative methods to develop new products, improve quality, composition and nutritive values of new and existing products. The aim is overall value addition to existing or new products by incorporation of health-promoting and disease-preventing ingredients derived from our traditional herbal medicinal repository, without compromising on the taste and flavor of these products. Dividend Your Directors are pleased to recommend a dividend of 16% for the period of 31st March 2016 and the said dividend, if approved, would absorb a sum of Rs. 128,14,154 plus dividend tax of Rs. 26,08,660. The Dividend, if approved, at the ensuing Annual General Meeting will be paid to all eligible equity shareholders of the Company whose names appear in the register of members as on the record date. Reserves Your Company proposes to transfer Rs. 32,08,864 to General Reserve for the financial year ended 31st March 2016. Share Capital The Paid-up Share Capital of the Company as on 31st March 2016 is Rs. 8,00,88,460. Number of Meetings of the Board of Directors During the year ended 31 March 2016, five Board Meetings were held. The dates on which the Board meetings were held are 28 May 2015, 12 August 2015, 6 November 2015, 11 February 2016 & 14 February 2016. The maximum time gap between any two consecutive meeting was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013 Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms: i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2016 and of Profit and Loss Account of the Company for that period; iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the Annual Accounts for the Financial Year ended 31 March 2016 on a going concern basis; v) that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149 The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6). Nomination and Remuneration Committee The Nomination and Remuneration Committee consists of the following Directors namely Mr. S. Nageswara Rao, Chairman, Dr. S. Venkataraman and Dr. Lalitha Ramakrishna Gowda as members. Brief description of terms of reference: - identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal; - carry on the evaluation of every director's performance; formulation of the criteria for determining qualifications, positive attributes and independence of a director; - recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees; - formulation of criteria for evaluation of Independent Directors and the Board; - devising a policy on Board diversity; and - any other matter as the Board may decide from time to time. Nomination and Remuneration policy The objectives of the Policy 1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration. 2. To determine remuneration based on the Company's size and financial position and trends and practices on remuneration prevailing in peer companies. 3. To carry out evaluation of the performance of Directors. 4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company's operations. 5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. Particulars of Contracts or Arrangements with Related Parties Referred to in Sub-Section (1) of Section 188 The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 is prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed as Annexure - 1 to this Report. Extracts of Annual Return The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure -2 to this Report. The conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 (Act) read with the Companies (Accounts) Rules, 2014 Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report. Risk Management Policy The Company has laid down the procedure for risk assessment and its mitigation through an internal Risk Committee. Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Risk Management Policy details the Company's objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities. CORPORATE SOCIAL RESPONSIBILITY Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder and pursuant to the recommendation of the Committee, the Board has in place Corporate Social Responsibility ('CSR') policy and the same is available on the website of the Company "www.bambinofood.com ". As the Average Net Profits of the Company for the immediately preceding 3 financial years calculated as per Section 198 of the Companies Act, 2013 works out to Rs. 14.37 lacs. The Company has spent Rs. 36.19 lacs on CSR activities and CSR projects in the areas of Eradicating hunger, Poverty and malnutrition and promoting healthcare. The details on CSR activities are provided in Annexure - 4 and forms part of this report. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out has been detailed in the Corporate Governance Report. DIRECTORS Mr. P. Easwara Das (DIN No: 02340662), a Non Executive Director of the Company retires by rotation and being eligible, offers himself for re-appointment. Details of Directors or Key Managerial Personnel Who Were Appointed or have resigned during the Year Mr. V. Nagarajan was appointed as CFO of the Company w.e.f. 14 February 2016. Mr. M. Kishan Rao Chairman and Director resigned as Managing Director w.e.f 15th April 2016 and Mr. M. Raghuveer, Wholetime Director was redesignated as Managing Director of the Company w.e.f 16th April 2016. For Directors seeking appointment/re-appointment in the forth coming Annual General Meeting of the Company, the particulars as required to be disclosed in accordance with Reg. 25 of SEBI (LODR) Regulations, 2015 is provided in notice of Annual General Meeting. Deposits The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013. AUDITORS STATUTORY AUDITORS M/s. PRV Associates, (Firm Registration No.006447S),Chartered Accountants have been appointed as statutory auditors of the company at the 31st Annual General Meeting held on 26.12.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the AGM. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr Chandrakanth Gorak, Practicing Company Secretary (CP No. 11346) to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as 'Annexure 5'. The Auditors Report and Secretarial Auditor Report do not contain any qualifications, reservations or adverse remarks. Audit Committee Audit Committee consists of the following Directors namely Mr. M. Kishan Rao, Chairman and Director, Mr. S. Nageswara Rao, Dr. S. Venkataraman and Dr. Lalitha Ramakrishna Gowda. Except Mr. M. Kishan Rao, all the other members of Audit Committee are Independent Directors. There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review. Corporate Governance A separate report on Corporate Governance and Management Discussion and Analysis is annexed as part of the Annual Report along with the Auditor's Certificate on its compliance. Policies The SEBI (LODR) Regulations, 2015 mandated the formulations of certain policies for all listed companies. All the corporate policies are available on the company's website:www.bambinofood.com . The policies are reviewed periodically by the Board and updated based on need and new compliance requirement. Vigil Mechanism The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases. Statement of particulars of appointment and remuneration of managerial personnel The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 6 to this Annual Report. There are no employees who are either employed for the whole/Part of the financial year are in receipt of remuneration exceeding Rs. 5 lacs per month or Rs. 60 lacs per annum as stipulated under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Internal Control Systems and their adequacy The Company has an adequate internal control system commensurate with the size and complexity of the organization. The Company has undertaken a comprehensive review of all internal control systems to take care of the needs of the expanding size of the Company and also upgraded the IT support systems. A system of internal audit to meet the statutory requirement as well as to ensure proper implementation of management and accounting controls is in place. The Audit Committee periodically reviews the adequacy of the internal audit functions. Change in the nature of business There is no change in the nature of business of the Company. The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. Material changes and commitments There are no Material changes and commitments in the business operations of the Company from the Financial year ended 31 March 2016 to the date of signing of the Director's Report. Policy on Sexual Harassment The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31 March 2016, the Company has not received any Complaints pertaining to Sexual Harassment. CEO'S DECLARATION Pursuant to the provisions of SEBI (LODR) Regulations, 2015 a declaration by the Managing Director of the Company declaring that all the members of the Board and the Senior Personnel of the Company have affirmed compliance with the Code of Conduct of the Company is enclosed. Acknowledgement Your Directors wish to place their sincere appreciation for the support and co-operation that the Company has received from its Shareholders, Bankers, Customers, Suppliers, Stockists, Selling Agents, Central and State Governments, various Statutory Authorities and others associated with the Company. Your Directors also wish to place on record their appreciation to employees at all levels for their commitment, hard work and dedicated support. For and on behalf of the Board of Directors of Bambino Agro Industries Limited M. Kishan Rao Chairman and Director DIN No. 02425967 Place: Secunderabad Date: 4 June 2016 |