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Tasty Bite Eatables Ltd.

BSE: 519091 Sector: Agri and agri inputs
NSE: TASTYBITE ISIN Code: INE488B01017
BSE 00:00 | 24 Apr Tasty Bite Eatables Ltd
NSE 05:30 | 01 Jan Tasty Bite Eatables Ltd
OPEN 10366.90
PREVIOUS CLOSE 10423.35
VOLUME 58
52-Week high 13297.00
52-Week low 7442.55
P/E 64.34
Mkt Cap.(Rs cr) 2,601
Buy Price 10120.00
Buy Qty 2.00
Sell Price 10999.00
Sell Qty 1.00
OPEN 10366.90
CLOSE 10423.35
VOLUME 58
52-Week high 13297.00
52-Week low 7442.55
P/E 64.34
Mkt Cap.(Rs cr) 2,601
Buy Price 10120.00
Buy Qty 2.00
Sell Price 10999.00
Sell Qty 1.00

Tasty Bite Eatables Ltd. (TASTYBITE) - Director Report


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Company director report

To

The Members

Your Directors are pleased to present the thirty-fourth Annual Report together withAudited Statement of Accounts for the year ended 31st March 2018.

1. KEY FINANCIAL HIGHTLIGHTS (as per IND AS)

(Rs. in Lakh)
Highlights

FY 2017-18

FY 2016-17
Revenue from operations 30310.98 25683.97
Profit before Depreciation Interest and Tax 5435.61 4580.05
Profit after tax 2645.65 2199.38
Earnings per share (Rs./share - Basic and diluted) 103.10 85.71
Net Fixed Assets 7853.92 7395.71
Long term borrowings (excluding current portion) 3057.04 3603.70
Profit/ (Loss) transferred to Balance Sheet 2645.65 2199.38

2. FINANCIAL PERFORMANCE & OPERATIONS :

Your Company grew at a healthy Y-O-Y rate of 18% to achieve revenues of Rs. 303.10crores during the year against Rs. 256.84 crores in the previous financial year. Theexports led Consumer Business with sales of Rs. 189.3 crores grew 18% from Rs. 160.1crores in the previous year while the Tasty Bite Food Service (TFS) business registered agrowth of 16% with sales of Rs. 89.3 crores against Rs. 76.8 crores in the previous year.

Tasty Bite continues to retain in position of market leadership in its key marketsincluding the United States Canada Australia and New Zealand.

Profit after Tax for the year ended FY 2018 at Rs. 26.4 crores against Rs. 21.9 croresin previous financial year 2017 a growth of 20%.

3. DIVIDEND:

The Board of Directors at their meeting held on May 16 2018 recommended a finaldividend of Rs.2 per equity share (20% on the face value of Rs. 10 each) subject to theapproval of shareholders at the ensuing Annual General Meeting.

In addition to the above the Company has provided for a preferential dividend of Rs.59530/- on its 59530 1% non-cumulative non-convertible Redeemable Preference Shares ofRs. 100/- each for the financial year 2017-18.

The total dividend payout on equity shares would involve a cash outgo of Rs. 51.32lakhs and dividend tax of Rs. 10.45 lakhs. Dividend payout on preference shares is of Rs.0.60 lakhs and dividend tax of Rs. 0.12 lakhs.

Upon declaration by the members at the ensuing Annual General Meeting dividend shallbe paid to those members whose names appear on the Register of Members of the Companyafter effecting all valid share transfers in physical form lodged with the Company or itsRegistrar & Transfer Agents on or before Friday July 20 2018. In respect of sharesheld in dematerialized form dividend will be paid on the basis of particulars ofbeneficial ownership furnished by Depositories as on the closing hours of business onFriday July 20 2018.

4. OPEN OFFER BY EFFEM HOLDINGS LTD:

Pursuant to the acquisition of Preferred Brands International Inc. by Effem HoldingsLtd. ("EHL") the ownership structure of the Company was modified. EHL qualifiedas an "Acquirer" under the SEBI (Substantial Acquisition of Shares and Takeover)Regulations 2011 and on August 14 2017 made an open offer to acquire shares of theCompany. The open offer was closed on November 30 2017. EHL acquired 300 shares fromKagome Co. Ltd on November 2 2017 for a consideration of INR 1133595 amounting to 0.01% of the Company's total share capital. Accordingly Kagome filed an application datedJanuary 17 2018 with the Company under Regulation 31A of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 for its de-classification as a part of the‘promoter/ promoter group' of the Company. Thereafter the Company filed necessaryapplications with BSE and NSE under Regulation 31A of LODR in relation to the KagomeDe-classification ("De-classification Application") on March 3 2018.

Declassification of Kagome requires shareholder approval and hence the same is proposedin notice of the Annual General Meeting.

5. RESEARCH AND DEVELOPMENT:

Tasty Bite Research Centre (TBRC) located within the factory campus continued to buildon its mission to be a centre of excellence in product process and ingredient innovation.During the course of the year several new innovative products were developed by TBRCkeeping in mind the evolving needs of our consumers.

The Department of Science & Industrial Research (DSIR) of the Union Ministry ofScience & Technology renewed its accredition to TBRC during the year till March 2019.New products developed at TBRC in the last 2 years contributed 21% of the company'srevenues.

6. FIXED DEPOSITS:

The Company has not accepted or invited any deposits from the public during the yearunder review.

7. DIRECTORS:

Ms. Dawn Allen Ms. Rama Kannan and Dr. Chengappa Ganapati were appointed as additionaldirectors on November 14 2017 December 22 2017 and January 17 2018 respectively.

Mrs. Sucharita Hegde Mr. Masahiro Sumitomo and Dr. V S Arunachalam resigned from thedirectorship of the Company on October 9 2017 November 2 2017 and March 9 2018respectively. The Board has placed its gratitude towards services rendered by all thedirectors during their tenure.

All independent directors have provided declaration stating their independence underthe provisions of section 149 of Companies Act 2013 ("Act") and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 ("LODR").

In accordance with the provisions of the Companies Act 2013 and Memorandum andArticles of Association of the Company Mr. Ashok Vasudevan retires by rotation at theensuing Annual General Meeting and being eligible has offered himself for reappointment.

Mr. Sohel Shikari was appointed as an Alternate Director to Mr. Ashok Vasudevan duringthe year due to absence of Mr. Ashok Vasudevan from India.

• Board evaluation:

Pursuant to provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulation 2015 the Board carried out evaluation of its ownperformance individual performance of the directors as well as the respective Committees.Evaluation of Chairman was also carried out. The manner of evaluation is mentioned inCorporate Governance Report.

Remuneration & Evaluation Policy:

The Board on recommendation of Nomination & Remuneration Committee adopted‘Remuneration and Evaluation Policy' for selection appointment and remuneration ofDirectors and Senior Management Personnel. Necessary diversity in the board was ensured.Detailed policy has been stated in Corporate Governance Report.

• Meetings:

There were five(5) Board meetings held during the financial year ended March 31 2018.These were held on May 16 2017 August 10 2017 November 13 2017 December 28 2017 andFebruary 6 2018. The maximum interval between any two meetings was not more than 120days. Details of these meetings are stated in Corporate Governance Report.

8. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return as provided under Section 92(3) in Form MGT - 9 is annexedherewith as "Annexure A".

9. DIRECTORS' RESPONSIBILITY STATEMENT:

Directors confirm that:

(a). in the preparation of the annual accounts for the year ended March 31 2018applicable accounting standards have been followed along with proper explanation relatingto material departures if any.

(b). they have selected and consistently applied such accounting policies judgmentsand estimates that are reasonable and prudent to ensure a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of thecompany for that period;

(c). they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d). they have prepared the financial statements/ annual accounts on a going concernbasis;

(e). they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

(f). they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

10. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12):

During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board of Directors under section 143(12) of Companies Act 2013.

11. CORPORATE GOVERNANCE:

Your Company places great significance to good Corporate Governance as an importantstep towards building investors' confidence improve investors' protection and maximizelong-term shareholders' value. Accordingly it has taken adequate steps to ensure that theprovisions of Corporate Governance as prescribed under the SEBI (Listing Obligation andDisclosure Requirement) Regulation 2015.

A certificate from statutory auditor of the Company regarding compliance of conditionsof Corporate Governance is in "Annexure B" to this Report. A detailed report onCorporate Governance forms a part of this Annual Report.

12. AUDITORS:

Statutory Auditors:

M/s BSR & Associates LLP existing statutory auditors were appointed by theshareholders in previous year for a period of 5 years. As per recent amendments in theCompanies Act 2013 ratification of statutory auditor is not required.

Internal Auditors:

Pursuant to section 138 of Companies Act 2013 the Company appointed M/s Suresh Surana& Associates LLP Chartered Accountants as internal auditor for financial year2018-19. The scope and fee of internal audit is fixed by the Board on recommendation ofAudit Committee.

Secretarial Auditor:

Pursuant to section 204 of the Companies Act 2013 the Company appointed Mr. AbhishekJagdale Company Secretary in Practice Pune as Secretarial Auditor. Based on the AuditCommittee recommendations Board has approved the appointment of Secretarial Auditor forfinancial year 2018-19. The Secretarial Audit Report is in "Annexure C" of thisreport.

13. WHISTLE BLOWER & VIGIL MECHANISM POLICY:

In compliance with the provisions of Section 177(9) of the Companies Act 2013 theCompany has established Whistle Blower and Vigil Mechanism Policy for its directors andemployees to report their genuine concerns and also to deal with the instances of fraudand mismanagements if any. The details of the Policy are explained in the CorporateGovernance Report and the policy is available on the website of the Companywww.tastybite.co.in

14. AUDIT COMMITTEE:

In compliance with the provisions of Section 177 of the Companies Act 2013 and ListingObligation Regulations the Company has a duly constituted Audit Committee. Thecomposition and other relevant details of the Audit Committee are given in the CorporateGovernance Report annexed herewith. All suggestions of Audit Committee during the yearwere accepted by the Board.

15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

During the year under review there is nothing to be reported under the heads loansguarantees or investments covered under the provisions of Section 186 of the CompaniesAct 2013.

16. SHARE CAPITAL:

During the year under review the Company has neither issued any shares withdifferential voting rights nor issued sweat equity shares. Further the Company did notgrant any stock options during the year under review. As on March 31 2018 details of theshares held by Directors in the Company are as under.

Name of Director

No. of Equity Shares held

No. of Covertibles held

Mr. Ashok Vasudevan NIL NIL
Ms. Dawn Allen NIL NIL
Mr. Ravi Nigam 200* NIL
Mr. Kavas Patel NIL NIL
Mrs. Rama Kannan NIL NIL
Dr. Chengappa Ganapati NIL NIL
Mr. Sohel Shikari NIL NIL

*out of which 100 as joint holder

There are no convertible instruments issued by the Company.

A. SEGMENT WISE OR PRODUCT WISE PERFORMANCE/ NATURE OF BUSINESS

The Company operates in one segment: Prepared food consisting ready to serve productsand intermediate food products such as prepared meals frozen formed foods and sauces.There is no change in nature of business of the Company.

17. THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The Company has been making significant efforts to ensure conservation of energy. Thedetails of energy conservation technology absorption research and development andforeign exchange earnings and outgo are as per "Annexure D".

18. RISK MANAGEMENT POLICY:

In compliance with the provisions of Section 134 of the Companies Act 2013 theCompany has identified the elements of the risks industry specific and in general aswell which in the opinion of the Board may threaten the existence of the Company. TheCompany has developed and implemented a ‘Business Contingency Plan for RiskMitigation' for the Company.

The details of the Business Contingency Plan for Risk Mitigation of the Company aregiven in the Management Discussion and Analysis.

19. CORPORATE SOCIAL RESPONSIBILITY:

The Company has a Policy and a Committee for Corporate Social Responsibility incompliance with the provisions of Companies Act 2013. The details about the Policy andthe Committee are given in Corporate Governance Report annexed to this report. AnnualReport on CSR activities is annexed as "Annexure E"

As per the provisions of Section 135 of the Companies Act 2013 every Company fallingunder the applicability of Corporate Social Responsibility is required to spend 2% of itsnet profits on the activities given under Schedule VII of the Companies Act 2013 and CSRpolicy adopted by the Board of Directors. The Company has spent required amount of Rs.48.93 Lakh during the financial year 2017-18 on construction of school building inBhandgaon area. ‘Education' forms a part of CSR Policy of the Company.Company was required to spend Rs. 50.98 Lakh during the year.

20. STANDALONE FINANCIAL STATEMENTS AND POSITION OF SUBSIDIARIES ASSOCIATES AND JOINTVENTURES:

During the year under review the Company neither had a subsidiary company associatecompany nor a joint venture company. Hence comments and details on preparation offinancials on standalone basis or report on the performance of subsidiary company orassociate company nor a joint venture company are not required to be offered.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements with related parties in Form AOC - 2 areannexed herewith as "Annexure F". The Board hereby informs that all the relatedparty transactions are carried out in the ordinary course of business and on arm's lengthbasis. Further the Company has duly complied with Indian Accounting Standard 24 relatedto transactions with related parties of the Company. The Company has adopted policy onRelated Party Transactions and same is posted on website of the Company(www.tastybite.co.in)

22. SIGNIFICANT/ MATERIAL ORDERS PASSED BY COURTS/ REGULATORS IMPACTING GOING CONCERNSTATUS OF THE COMPANY:

There are no significant or material orders or awards passed by the Courts or any otherRegulators or Tribunals relating to Companies Act 2013 or Listing Agreement which wouldaffect the going concern status and Company's future operations.

23. Buyback of 59530 1% Non-cumulative Non-convertible Redeemable Preference shares:

The Board of Directors of the Company at its meeting held on July 6 2018 approvedproposal for buyback of 59530 1% Non-cumulative Non-convertible Redeemable Preferenceshares of Rs. 100/- each at a price of Rs. 2050 per preference share. The offer size is12.49% of total paid up capital and free reserves of the Company as per latest auditedbalance sheet as at March 31 2018. Buyback shall be sourced from Securities Premiumaccount / free reserves / surplus available with the Company. The aggreate offer sizeexceeds 10% of total paid up capital and free reserves and thus as per section 68 of theCompanies Act 2013 requires shareholders approval by way of Special Resolution. The Boardseeks approval of shareholders on the proposal.

As per provision of section 102 of the Act detailed explanatory note is attached tothe notice calling the meeting.

24. APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL:

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2017-18:

(Rs. in Lakhs)
Name of Director Remuneration of Director (1) Median remuneration of employees (2) Ratio (3) =1/2
Mr. Ashok Vasudevan NIL NIL NIL
Ms. Dawn Allen NIL NIL NIL
Mr. Ravi Nigam *148.65 4.58 32.45
Mr. Kavas Patel NIL NIL NIL
Ms. Rama Kannan NIL NIL NIL
Dr. Chengappa Ganapati NIL NIL NIL
Mr. Sohel Shikari** NIL NIL NIL

*remuneration including provident fund gratuity leave encashment etc and all otherstatutory dues.

**Mr. Sohel Shikari receives remuneration as Chief Financial Officer and not as analternate director.

2. The percentage increase in remuneration of each director Chief Financial OfficerCompany Secretary or Manager if any in the financial year;

(Rs. in Lakh)
Name Designation Remuneration in FY 2016-17

Remuneration in FY 2017-18

Increase (in %)
Mr. Ravi Nigam Managing Director 114.04 148.65 30%
Mr. Sohel Shikari Chief Financial Officer 112.06 147.11 31%
Ms. Minal Talwar Company Secretary 8.41** 10.24 20%

Increase based on cost to company basis inclusive of perquisites allowances andstatutory dues such as provident fund gratuity leave encashment etc.

**In addition to the above the Company Secretary receives consideration w.r.t. ValuePool Agreement with the holding company.

3. Number of permanent employees are 225 on the roll of company as on March 31 2018.

4. The remuneration paid to the employees is in affirmation with Remuneration &Evaluation Policy of the Company. Remuneration policy is available on website of theCompany (www.tastybite.co.in). Salient features of the policy are mentioned in CorporateGovernance Report attached.

5. During the year increase in remuneration of Managing Director was approved by theBoard on recommendation of Nomination & Remuneration Committee in February 6 2018meeting. The approved increase in salary is within the limit approved by the shareholdersin General Meeting on September 19 2016. Increase in salary is based on performance ofthe Company general industry standard contribution by MD in enhancement of performanceof the Company and various other factors considered appropriate by the Board andRemuneration Committee.

6. During the year increase in remuneration of Chief Financial Officer was alsoapproved by the Board in its meeting held on February 6 2018 on the recommendation ofNomination & Remuneration Committee and Audit Committee and as per the Remunerationpolicy. None among the employee received remuneration higher than that of ManagingDirector (Managerial Personnel).

7. During the year increment was also made in salary of Company Secretary and SeniorManagement on basis of annual appraisal by the management on proportionate basis and asper the remuneration policy recommended by the Nomination & Remuneration Committee.

8. Average percentile increase in salaries of employees other than the managerialpersonnel in the last financial year 2018 was 31.01%. Percentile increase in themanagerial remuneration in FY 2018 was 30%. Increase in remuneration of MD and CFO wasw.e.f. January 1 2018. Increase in salary of employees is based on performance of theCompany general industry standard contribution by employee in enhancement of performanceof the Company and various other factors considered appropriate by the Management.

9. The Company does not have a variable pay compensation structure.

10. Statement of employees receiving remuneration under Section 197(12) of CompaniesAct 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is attached as "Annexure G".

11. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over/decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies:

Particulars Issued capital Closing Market price per share Earnings per share Price Earnings Ratio Market capitalization (in Rs.)
As on 31.03.2017 2566000 4658.50 88.68 52.53 11953711000
As on 31.03.2018 2566000 7463.20 103.10 72.39 19150571200
Increase/ decrease NIL 2804.70 17.39 18.04 71 96860200
% Increase/ Decrease NIL 160.21 120.29 133.18 160.21

The Company made Public Offering in February 1987 of 750000 equity shares at Rs.10 each. The market quotation of the Equity shares of the Company as on March 31 2018 wasRs. 7463.20 for shares of face value of Rs. 10/- each representing an increase of74632% over the period.

25. INVESTMENTS IN ITS OWN SHARES BY COMPANY ITS SUBSIDIARIES ASSOCIATES ETC:

The Company during the period under review has not made investments in its own shares.The Company neither has any subsidiary company nor associate company in terms of theprovisions of Companies Act 2013 hence the comments are not required to be offered.

26. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS:

During the period under review there was no pecuniary relationship or pecuniarytransactions between the Company and its Non-Executive Directors.

27. INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013:

Your Company is an equal opportunity employer and safety of all employees and all otherpersons while within the premises is of utmost importance to your Company. The Company hasbeen practicing safety of women at workplace as part of its formally adopted Code ofConduct. In order to strengthen it and also in compliance to newly enacted Act forprotection of women your Company has formed Internal Complaints Committee and adopted"Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace". The Committee's mandate is to bring awareness about ensuring safeworkplace for women; receive and take appropriate decision on complaints if any.

The Committee as appointed by the Management consists:

• Ms. Anila Thomas - Presiding Officer

• Ms. Minal Talwar- Member

• Mr. Rajendra Jadhav - Member

• Ms. Suman Bhagwat - Member

• Mr. Kuldeep Joshi - Independent Member No complaints have been received duringthe year.