The directors are pleased to present the 15th Annual Report on the business and operations of Sapphire Foods India Limited ("Company") together with the audited financial statements for the financial year ended 31st March 2024.
Financial Results and Performance
The financial statements of the Company have been prepared in accordance with the applicable provisions of Indian Accounting Standards ("Ind AS"), Companies Act, 2013 and Rules made thereunder ("Companies Act"), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and such other applicable rules, regulations, guidelines, etc., as amended from time to time.
The Company's financial (standalone and consolidated) performance during the financial year ended 31st March 2024 as compared to the previous financial year, is summarized below:
|
(Rs. in Million)
|
|
Particular
|
Standalone
|
Consolidated
|
|
F.Y. 2023-24
|
F.Y. 2022-23A
|
F.Y. 2023-24
|
F.Y. 2022-23
|
|
Total Income
|
22,676.55
|
20,108.48
|
26,277.21
|
22,966.66
|
|
Less Total Expenses
|
22,022.95
|
19,097.33
|
25,578.12
|
21,882.42
|
|
Profit/ (Loss) before tax
|
653.60
|
1,011.15
|
699.09
|
1,084.24
|
|
Less: Total tax expense/(credit)
|
145.92
|
(1,252.66)
|
179.53
|
(1,247.67)
|
|
Profit/ (Loss) after Tax
|
507.68
|
2,263.81
|
519.56
|
2,331.91
|
|
Total Comprehensive Income/(Loss) for the year, net of tax
|
494.97
|
2,262.45
|
568.38
|
2,318.89
|
Arestated pursuant to merger
During the year under review, the total income of your Company was ' 22,676.55 million on a standalone basis and ' 26,277.21 million on a consolidated basis as compared to the previous financial year total income of ' 20,108.48 million on a standalone basis and ' 22,966.66 million on a consolidated basis. The net profit/ (loss) for the year under review after total tax expense/ (credit) stood at ' 507.68 million on a standalone basis and ' 519.56 million on a consolidated basis.
The Company has not transferred any amount to the general reserves. There was no change in the nature of the business of the Company during the year under review.
Business Operations and State of Company's Affairs
Sapphire Foods India Limited, directly and through its' subsidiaries, is one of the largest franchisees of Yum! Brands Inc. in Indian sub-continent with a track record of successfully operating 872 Restaurants of KFC, Pizza Hut and Taco Bell across India, Sri Lanka and Maldives.
For complete detail on Business Operations and State of Company's Affairs, please refer to the section of 'Management Discussion and Analysis Report' which forms an integral part of this Annual Report.
Dividend
During the financial year under review, your directors have not recommended any dividend to the shareholders of the Company.
The Board of Directors of your Company has adopted Dividend Distribution Policy based on the parameters as specified under Listing Regulations. The Policy can be accessed from the website of the Company at https:// www.sapphirefoods.in/investors-reiation/corporate-governance.
The Company has not transferred any amount to the Investor Education & Protection Fund (IEPF) and no amount is lying in Unpaid Dividend Account of the Company.
Subsidiaries, Joint Venture and Associate Companies:
As at the ciose of the financiai year 31st March 2024, your Company has two whoiiy-owned subsidiary companies viz., Gamma Pizzakraft Lanka (Private) Limited, Sri Lanka & French Restaurant Private Limited, Sri Lanka and one subsidiary / joint venture viz., Gamma Island Foods Private Limited, Maldives.
During the financial year under review, Gamma Pizzakraft (Overseas) Private Limited ("GPOPL"), whoiiy-owned subsidiary of Sapphire Foods India Limited ("Company") had subscribed for 81,914 Equity Shares of Gamma Isiand Foods Private Limited ("GIFPL"), subsidiary of GPOPL and then step-down subsidiary of the Company, for a totai consideration of up to MVR 18,840,220. Pursuant to this acquisition, the equity share holding of GPOPL in GIFPL increased from existing 51% up to 75%.
Further, pursuant to Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") (hereinafter collectively to be referred as "Transferor Companies") with Sapphire Foods India Limited ("Company") sanctioned by Hon'bie National Company Law Tribunal (NCLT) vide order reference number C.P. (CAA)/312/MB-I/2023 dated 20th March 2024, both the Transferor Companies ceased to be the subsidiaries of the Company effective from the close of business hours of 31st March 2024.
Apart from the above, no other company has become or ceased to be a subsidiary, joint venture or associate of the Company during the financial year under review.
In pursuance of Section 136 of the Companies Act, the annual report of the Company containing its standalone and consolidated financial statements has been uploaded on the website of the company. Further, financials of the subsidiaries, are available on the website of the Company at https://www.sapphirefoods.in/investors-reiation/annuai-reports.
The highlights of performance and financial position of each of the subsidiary company for the financial year ended 31st March 2024, is provided in form AOC-1, in accordance with the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014. The form AOC-1 is enclosed with the Consolidated Financial Statements and forms an integral part of this Annuai Report.
Your Company, in accordance with the Listing Regulations, has formuiated and adopted the poiicy for determining material subsidiaries. The said policy is available on the website of the Company at https://www.sapphirefoods. in/investors-reiation/corporate-governance.
The Company has obtained a certificate from M/s. S R B C & Co. LLP, Statutory Auditor, for financial year ended 31st March 2024 certifying that the Company is in compliance with the Foreign Exchange Management (Non - Debt Instruments) Rules, 2019 read with Foreign Exchange Management (Mode of Payment and Reporting of NonDebt Instruments) Reguiations, 2019 with respect to Downstream Investment. The said certificate issued by the Statutory Auditor does not contain any observation and is free from qualifications.
Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited and Gamma Pizzakraft Private Limited, wholly-owned subsidiaries with Sapphire Foods India Limited and their respective shareholders
The Board of Directors of your Company at their meeting held on 11th February 2022, subject to requisite approvals/ consents, approved the Scheme of Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") with Sapphire Foods India Limited ("Company") and their respective sharehoiders ("Scheme") under the appiicabie provisions of
the Companies Act and Listing Reguiations. The appointed date of the Scheme was 1st Aprii 2022.
The merger application was jointly filed by the Company together with the Transferor Companies (i.e. GPPL and GPOPL) with Hon'bie NCLT, Mumbai on 5th May 2022 and the same was admitted by the Hon'bie NCLT vide Order dated 4th October 2023. Further, the merger petition jointiy fiied by the Company together with the Transferor Companies (i.e. GPPL and GPOPL) with Hon'bie NCLT, Mumbai was admitted vide Order dated 15th December 2023. The Hon'bie NCLT, Mumbai approved the Scheme vide order reference number C.P (CAA)/312/MB-I/2023 dated 20th March 2024 which was fiied with the Registrar of Companies at the ciose of business hours on 31st March, 2024.
Share Capital Authorised Share Capital
Consequent to the Merger by Absorption of Gamma Pizzakraft (Overseas) Private Limited ("GPOPL") and Gamma Pizzakraft Private Limited ("GPPL") with Sapphire Foods India Limited ("Company"), the authorised share capitai of the Company increased from ' 4,31,68,20,000 comprising 43,16,82,000 Equity Shares of face vaiue of ' 10 each to ' 467,01,20,000 divided into 46,70,12,000 equity shares of ' 10 each.
Accordingiy, the Capitai Ciause of the Memorandum of Association of the Company was aitered and substituted with the new Ciause V to reflect the corresponding changes in the Authorised Share Capitai.
Issued, Subscribed and Paid-up Share Capital
As on 31st March 2024, the issued, subscribed and paid-up capitai of the Company stands at ' 63,70,44,160 comprising of 6,37,04,416 equity shares of face vaiue of ' 10 each.
During the year under review, your Company had issued and aiiotted 1,61,875 equity shares to its eiigibie empioyees pursuant to the exercise of stock options under Empioyee Stock Option Schemes.
The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Ruie 4(4) of the Companies (Share Capitai and Debenture) Ruies, 2014 is furnished.
Employee Stock Option Plan / Schemes
With a view to attract, reward and retain taiented and key empioyees in the competitive environment and encourage them to aiign their individuai performance with Company objectives, your Company has impiemented Sapphire Foods Empioyees Stock Option Pian 2017 ("ESOP Pian") which was originaiiy approved by the Board of Directors and the Sharehoiders of the Company on 24th May 2018 and 30th May 2018 respectiveiy and subsequentiy ratified by the sharehoiders of the Company post IPO. Sapphire Foods Empioyees Stock Option Scheme 2019 - Scheme
III - Management other than CEO ("Scheme III"), Sapphire Foods Empioyees Stock Option Scheme 2019 - Scheme
IV - CEO ("Scheme IV"), Sapphire Foods Empioyee Stock Option Scheme 2022 - Scheme IIIA - Management other than CEO ("Scheme IIIA") and Sapphire Foods Empioyee Stock Option Scheme 2022 - Scheme IVA - CEO ("Scheme IVA") (hereinafter coiiectiveiy referred to as "ESOP Schemes") forms an integrai part of the ESOP Pian. With a view to reward ioyaity for past services with the Company, retention of criticai empioyees and aiign empioyees' interest with company's performance and sharehoider's interest, the Company has granted, from time to time, stock options to the eiigibie empioyees under the said ESOP Pian / Schemes. During the year under review, there were no materiai changes in the Empioyee Stock Option Pian / Schemes (ESOPs) of the Company.
The Nomination and Remuneration Committee is entrusted with the responsibiiity of impiementation and administration of the ESOP Pian / Schemes.
The detaiis of ESOP are provided in the notes to accounts in the financiai statements forming part of this Annuai Report and the disciosures as mandated under Securities and Exchange Board of India (Share Based Empioyee Benefits and Sweat Equity) Reguiations, 2021 ("SEBI SBEB & SE Reguiations") are made avaiiabie on the website of the Company at https://www.sapphirefoods.in/investors-reiation/updates. Certificate from M/s. Aiwyn Jay & Co., Secretariai Auditors of the Company, with respect to the impiementation of ESOP Pian / Schemes in accordance with SEBI SBEB & SE Reguiations shaii be piaced before the members at the ensuing Annuai Generai Meeting of the Company.
The Company has not issued any sweat equity shares during the year under review and hence no information as per the provisions of the Companies Act and SEBI SBEB & SE Reguiations is furnished thereto.
Credit Rating
As at the end of the financiai year 31st March 2024, iong-term rating on the bank iines of your company is [ICRA]A (Stabie) and the iong term/short term unaiiocated iimits is [ICRA]A (Stabie) / [ICRA]A2 .
Deposits
The Company has not accepted or renewed any amount faiiing within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Ruies, 2014 during the year under review. Hence, the requirement for furnishing of detaiis reiating to deposits covered under Chapter V of the Companies Act or the detaiis of deposits which are not in compiiance with Chapter V of the Companies Act is not appiicabie.
Management Discussion and Analysis Report
The Management Discussion and Anaiysis Report for the financiai year under review, as prescribed under Listing
Reguiations, is presented as a separate section which forms an integrai part of this Annuai Report.
Report on Corporate Governance:
Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. A separate report on Corporate Governance for the financiai year ended 31st March 2024 is appended to this report and forms an integrai part of this annuai report.
A certificate from Practicing Company Secretary confirming the compiiance with the conditions of Corporate Governance under Listing Reguiations is aiso annexed to the report on Corporate Governance.
Environmental, Social and Governance & Corporate Social Responsibility Practices
Environmentai, Sociai and Governance (ESG) has iong been an integrai to our journey and your company recognize it as a continuous path that requires a ciear strategy and roadmap. As part of the ESG journey, your company is committed for integrating environmentai, sociai, and governance (ESG) considerations into our business operations, guided by our four strategic piiiars -Food, Peopie, Pianet and Governance. These piiiars serve as the foundation for our ESG approach, emphasizing on sustainabiiity, responsibie practices, and iong-term vaiue creation for our stakehoiders.
During the financiai year under review, S&P Giobai Ratings had assigned ESG Score of 42 (Methodoiogy Year: 2023) to the Company. Your Company is ranked No.1 QSR in India and at 95th percentiie amongst QSR giobaiiy on Dow Jones Sustainabiiity Index (DJSI).
The ESG Report for FY2024 is pubiished aiongside this Annuai Report and can be accessed at https://www. sapphirefoods.in/investors-reiation/annuai-reports.
In accordance with the provisions of Section 135 of the Companies Act, 2013 and Ruies made thereunder, your Company has formed CSR & ESG Committee to monitor CSR & ESG activities of the Company. The detaiis of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.
The Board of Directors has approved a CSR Poiicy for the Company which provides a broad framework with regard to impiementation of CSR activities carried out by the Company in accordance with Scheduie VII of the Act. The CSR Poiicy is avaiiabie on the Company's website at https://www.sapphirefoods.in/investors-reiation/ corporate-governance.
The Business Responsibiiity and Sustainabiiity Report ("BRSR") as mandated under Listing Reguiations, detaiiing the various initiatives taken by your Company from the Environmentai, Sociai and Governance perspective, forms part of this annuai report and is appended hereinbeiow.
The Annual Report on CSR activities as prescribed under the Companies Act and Rules made thereunder is also annexed to this report.
Directors and Key Managerial Personnel
The Board of Directors is constituted in accordance with the provisions of the Companies Act and Listing Regulations and Articles of Association of the Company. The Company has received relevant disclosures and declarations from the Directors and none of them are disqualified from being appointed as Director in terms of Section 164(2) of the Companies Act and Listing Regulations.
Your Board consists of eminent personalities with considerable professional expertise and credentials in finance, law, accountancy, retail and other related skills and fields. Their wide experience and professional credentials help the Company with strategy formulation and its implementation, thereby enabling its growth objectives. This is detailed in the Corporate Governance Report which is annexed hereto.
As of 31st March 2024, the composition of Board of Directors of your Company was as under:
|
Sr.
No.
|
Name of Director
|
Designation
|
DIN
|
|
1.
|
Mr. Sunil Chandiramani
|
Chairman & Independent Director
|
00524035
|
|
2.
|
Mr. Sanjay Purohit
|
Whole Time Director & Group CEO
|
00117676
|
|
3.
|
Mr. Sumeet Narang
|
Non-Executive Nominee Director
|
01874599
|
|
4.
|
Mr. Vikram Agarwal
|
Non-Executive Nominee Director
|
03038370
|
|
5.
|
Mr. Kabir Thakur
|
Non-Executive Nominee Director
|
08422362
|
|
6.
|
Mr. Vinod Nambiar
|
Non-Executive Nominee Director
|
07290613
|
|
7.
|
Ms. Anu Aggarwal
|
Independent Director
|
07301689
|
|
8.
|
Ms. Deepa Wadhwa
|
Independent Director
|
07862942
|
|
9.
|
Mr. Norbert
|
Non-Executive
|
06716549
|
During the period under review, Mr. Paul Robine (DIN: 07828525), Non-Executive Non-Independent Nominee Director resigned from the Board of Directors of the Company and consequently Mr. Norbert Fernandes ceased to be the Alternate Director to Mr. Paul Robine effective from 12th May 2023.
Further, the Board of Directors at their meeting held on 12th May 2023 based on the recommendation of Nomination and Remuneration Committee had appointed Mr. Norbert Fernandes (DIN: 06716549) as an Additional Director in the capacity of Non-Executive Non-Independent Nominee Director which was regularized by the members at their
14th Annual General Meeting of the Company held on 11th August 2023.
During the financial year under review, except as stated above, there were no other changes in the Directorship of the Company.
Retirement by Rotation
In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vinod Nambiar and Mr. Norbert Fernandes, Non-Executive Nominee Directors of the Company, retires by rotation and being eligible, offers themselves for re-appointment at the ensuing 15th Annual General Meeting of the Company.
The brief profile in terms of Regulation 36 of Listing Regulations and the Secretarial Standards on General Meetings (SS-2), in respect of the directors seeking appointment/re-appointment has been annexed to the notice of the 15th Annual General Meeting.
Independent Directors
Mr. Sunil Chandiramani, Ms. Anu Aggarwal and Ms. Deepa Wadhwa were appointed as Independent Directors of the Company, effective 5th August 2021, for a fixed term of five years from the date of their respective appointment/ regularization by the shareholders. Mr. Sunil Chandiramani has been designated as the Chairperson of the Board of Directors.
The Company has received declarations from the Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under applicable provisions of the Companies Act and Listing Regulations. The Independent Directors have also confirmed that they have complied with the Code of Conduct of the Company and that they have registered themselves as an Independent Director in the data bank maintained with the Indian Institute of Corporate Affairs. The Independent Directors of the Company are not liable to retire by rotation.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, planning and execution, management and leadership, functional and managerial experience, legal and risk management, corporate governance systems and practices, finance, banking and accounts, retail, etc. and they hold highest standards of integrity and are independent of the management.
Key Managerial Personnel
Pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons are the Key Managerial Personnel ("KMP") of your Company:
|
Name of the KMP
|
Designation
|
|
Mr. Sanjay Purohit
|
Whole Time Director & Group
|
| |
CEO
|
|
Mr. Vijay Jain
|
Chief Financial Officer
|
|
Mr. Sachin Dudam
|
Company Secretary &
|
| |
Compliance Officer
|
During the year under review, there has been no change in the Key Managerial Personnel of the Company.
Board Meetings
During the financial year 2023-24, four (4) meetings of the Board of Directors were convened and held. The meetings were held as per the business requirements and the maximum gap between any two Board Meetings is within the permissible limits as prescribed under the Companies Act and Listing Regulations.
The details of the composition of the board, meetings held during the year and the attendance of the directors at the Board Meetings, inter-alia, are provided at Report on Corporate Governance, forming part of this Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on meetings of Board of Directors and General Meetings.
Board Committees
The Board of Directors of the Company has constituted the following Committees in order to effectively carry out some of the diverse functions of the Board:
• Audit Committee
• Nomination and Remuneration Committee
• Stakeholders Relationship Committee
• Risk Management Committee
• CSR & ESG Committee
• Operations Committee
• IPO Committee (dissolved w.e.f. 2nd November, 2023)
The details of the composition of these committees of the Board, meetings held during the financial year, etc. are set out in the Report on Corporate Governance, forming part of this Report.
Board Evaluation
In accordance with the provisions of the Companies Act and Listing Regulations, the Board of Directors conduct formal evaluation, on annual basis, of its own performance and that of its committees and individual directors including chairperson. The Nomination and Remuneration Committee is mandated for formulating criteria for evaluation of performance of the Board of Directors and its Committees and Directors.
Pursuant to determination of criteria by the Nomination and Remuneration Committee, the Company has carried out performance evaluation surveys for the Board of
Directors and its Committees, Individual Directors including Whole-time Director & Group CEO, Chairperson, etc. The evaluation surveys were circulated to the concerned board members through BoardPAC application. ALL the Directors actively participated in the evaluation surveys carried out by the Company.
The results along with feedback were shared with the Independent Directors at a duly convened meeting of the Independent Directors for their consideration. The Independent Directors, at their meeting held on 15th March 2024, deliberated in detail on the performance evaluation of the Board of Directors (as a whole), its Committees and Non-Independent Directors including Whole-time Director and Chairperson, inter-alia. Thereafter, the feedback from the meeting of the Independent Directors and board evaLuation were presented to the Management and Board of Directors for their perusaL and impLementation thereof.
Nomination and Remuneration Policy
In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations, the Board of Directors have formulated and adopted Nomination and Remuneration PoLicy for the Company, covering foLLowing objectives:
• To Lay down criteria and terms and conditions for identifying persons who are quaLified to become Directors & KMPs and who may be appointed / reappointed in Senior Management of the Company.
• To provide framework for remuneration of Directors and Employees and align with the Company's business strategies, vaLues, key priorities and goaLs.
• To provide for rewards Linked directLy to the effort, performance and achievement of Company's targets by the empLoyees.
• FormuLating the criteria for performance evaLuation of aLL Directors
• Succession PLanning for Board and Senior Management
• Board Diversity
The saLient features of this poLicy have been discLosed in the Report of Corporate Governance, forming part of this Report. The Nomination and Remuneration Policy of the Company can be accessed on the website of the Company at https://www.sapphirefoods.in/investors-reLation/corporate-governance.
Particulars of Employees
The discLosures pertaining to remuneration and other required information pursuant to Section 197(12) of the Companies Act read with RuLe 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, Key Managerial PersonneL's and EmpLoyees of the Company, is appended to this report and forms part of this AnnuaL Report.
The disclosure pertaining to remuneration as required under provisions of Section 197(12) of the Companies Act read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Financial Statements are being sent to the shareholders excluding the said information. Any shareholder interested in obtaining copy of the aforesaid information, may send an email to the Company Secretary and Compliance Officer at investor@sapphirefoods.in.
Auditors Statutory Auditors
M/s. S R B C & Co. LLP, Chartered Accountants (Registration No. 324982E/E300003) were re-appointed as Statutory Auditors of the Company at Annual General Meeting held on 15th October 2020, for a term of five consecutive years to hold office from the conclusion of 11th Annual General Meeting (AGM) till the conclusion of 16th Annual General Meeting of the Company. The auditors have confirmed that they are not disqualified from being re-appointed as Statutory Auditors of the Company and that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The report given by the Statutory Auditors on the Financial Statements (Standalone and Consolidated) of the Company for the financial year ended 31st March 2024 is annexed to the Financial Statements, forming an integral part of this Annual Report. The Auditors' Report read together with Annexures referred to in the Auditors' Report for the financial year ended 31st March 2024 does not contain any qualification, reservation, adverse remark or disclaimers. During the year under review, the Statutory Auditors have not reported any matter of fraud under Section 143(12) of the Companies Act.
Internal Auditors
The Company had appointed M/s. Protiviti India Member Private Limited, Chartered Accountants, as Internal Auditor Partner for carrying out the activities of Management Testing of Internal Financial Controls and Internal Audit of various business/ functions process for the financial year 31st March 2024.
The Company had designated Mr. Balkrishna Chaturvedi as Internal Auditor of the Company, in compliance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed thereunder.
Internal Audit Reports are reviewed by the Audit Committee of the Company at their meetings held during quarterly intervals. Both internal auditors carry out their functions as per the scope of work assigned and place their reports at the meetings of the Audit Committee, during quarterly intervals.
Secretarial Auditors
Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors, has appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries (Firm Registration No. P2010MH021500) as Secretarial Auditor for carrying out secretarial audit and requisite certifications as mandated under Companies Act and Listing Regulations.
The Secretarial Audit Report for the financial year ended 31st March 2024 received from M/s. Alwyn Jay & Co., Secretarial Auditor of the Company is annexed to this report and forms an integral part of this Annual Report. The Report does not contain any qualifications, reservations, adverse remarks, disclaimers or reporting of fraud.
Cost Auditors
The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Companies Act, 2013 and Rules made thereunder.
Particulars of Investments, Loans, Guarantees and Securities:
The full particulars of the loan, investments, guarantees and securities, in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulations made by your Company during the financial year 2023-24, has been furnished at Note 5 to the Notes to Accounts of the Financial Statements forming an integral part of this Annual Report.
Particular of Contracts or Arrangements with Related Parties
The Related Party Transactions are placed at the meetings of the Audit Committee / Board of Directors for their respective approval. Prior omnibus approval of the Audit Committee is obtained by the Company on an annual basis for Related Party Transactions that are foreseeable and repetitive in nature. A detailed statement of such Related Party Transactions entered into pursuant to the omnibus approval so granted are placed at the meetings of the Audit Committee for their review on a quarterly basis. The half yearly statement on the Related Party Transactions are also filed with the respective stock exchanges on which the equity shares of the Company are listed.
The Related Party Transactions entered during the financial year under review were in the ordinary course of business and on arm's length basis. There were no significant material related party transactions entered into by the Company with any related party during the financial year under review. Thus, the disclosure under Section 134 of the Companies Act, 2013 as per specified form AOC-2 is not applicable to the Company.
Details of Related Party Transactions as per Indian Accounting Standard - 24 (Ind AS 24) are given under Note 36 forming part of the Notes to Account of the Standalone Financial Statements to this Report.
Pursuant to the provisions of the Companies Act and Listing Regulations, your company has formulated a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions, which is available on the website of the Company at https://www. sapphirefoods.in/investors-relation/corporate-governance.
Annual Return
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the copy of the Annual Return of the Company for the financial year ended 31st March 2024 is placed at the Company's Website and can be accessed at https://www.sapphirefoods.in/investors-relation/updates.
Risk Management Policy
Adequate Risk Management Framework is a necessity for the purpose of Risk Assessment and minimization/ mitigation of risks involved in business activity. The Company has laid down a robust risk management framework for identification and management of risks that could adversely affect the Company. The Company has formulated Risk Management Policy in order to achieve the following objectives, inter-alia:
• To ensure that all the current and future material risk exposures of the Company are identified, assessed, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management.
• To establish a framework for the company's risk management process and to ensure its implementation.
• To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.
• To assure business growth with financial stability.
In terms of the provision of Regulation 21 of Listing Regulations, the Board of Directors has constituted a Risk Management Committee. The details with respect to its terms of reference, composition and meetings held during the part of the financial year under review are set out at the Report on Corporate Governance, annexed to this Report. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The Risk Management Policy is also available on the website of the Company at https://www.sapphirefoods.in/ investors-relation/corporate-governance. For more details on risk management framework, please refer to the section of 'Management Discussion and Analysis Report' which forms an integral part of this Annual Report.
Vigil Mechanism
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting
the highest standards of professionalism, honesty, integrity and ethical behavior.
Your Company has adopted a Whistle Blower Policy to provide a mechanism for the employees, vendors and suppliers to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Company's Code of Conduct.
The concerned constituents, including employees of the Company, are encouraged to voice their concerns internally and at a high level and to disclose information which the individual believes shows malpractice or impropriety. A designated email id whistleblower@sapphirefoods.in has been created and disseminated through this policy/code to the concerned stakeholders to voice their grievances. The access of this designated email id is mapped and made available to the members of the Audit Committee including its Chairperson.
The provisions of this policy are in line with the provisions of Section 177 (9) of the Companies Act, 2013 and Regulation 22 of Listing Regulations. All cases registered under the whistle blower policy of the Company are subject to review by the Audit Committee. The Whistle Blower policy of the Company is available on the Company's website at https:// www.sapphirefoods.in/investors-relation/corporate-governance.
Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), your Company has in place a policy on prevention, prohibition and redressal of sexual harassment at workplace. All employees (permanent, contractual, temporary, trainees) including at store level, are covered under this policy.
As per the rules made under the POSH Act, the Company has constituted an Internal Complaints Committee (ICC) to redress the complaints received pertaining to sexual harassment at workplace. The Committee meets, as and when required, to discuss various cases received and to address the same uniformly across the organization.
The details of the complaints received during the financial year 2023-24 are as follows:
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Particulars
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No. of Complaints
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Complaints pending as on start of the financial year i.e. 1st April 2023
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0
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Complaints received during the financial under review
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year
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7
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Complaints disposed off during the financial under review
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year
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5
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Complaints pending as on end of the financial year i.e. 31st March 2024
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2
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f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Material Changes and Commitments, if any, affecting Financial Position of the Company
Except as disclosed in this report, no material changes and commitments which could affect the Company's financial position, have occurred between the end of the financial year of the Company and date of this report.
An update on the aforesaid complaints received and disposed off are placed at the meetings of the Audit Committee during quarterly intervals.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The activities of the Company are not energy intensive as the Company is not engaged in any manufacturing activity. Further, no technology has been developed and / or imported by way of foreign collaboration.
For complete details, please refer to the section of 'Business Responsibility and Sustainability Report' which forms an integral part of this Report. The particulars with regard to Foreign Exchange Earnings and Outgo are given in Standalone and Consolidated Financial Statements, forming part of this Annual Report.
Disclosure of Orders Passed by Regulators or Courts or Tribunal
During the financial year under review, there were no significant/ material orders passed by the Regulator, Courts, Tribunals, etc. which could have an impact on the going concern status and the Company's operations in future.
The Company has not filed any application under Insolvency and Bankruptcy Code, 2016 as at the end of the financial year 31st March 2024. However, during the financial year ended on 31st March 2023, the Company had received copies of duly notarized petitions from two operational creditors ("lessors"), related to each other, for initiating the corporate insolvency resolution process against the Company at National Company Law Tribunal ("NCLT"), Mumbai. Prima facie, the said petitions appeared to have been filed before the NCLT, however, after verifying the records with NCLT, it was observed that no such petitions were filed with the NCLT.
Your company would like to clarify and state that the monetary demands raised by the operational creditors in the said petitions are unreasonable and inappropriate. The Company continues to monitor the status of the said petitions through its legal representatives and have not come across any filings of such petitions with NCLT as on the date of this report.
Internal Financial Controls
Your Company has aligned its current systems of internal financial control with the requirement of the Companies Act 2013. The Internal Control Framework is intended to increase transparency and accountability in an organization's process of designing and implementing a system of internal control. Your Company has successfully laid down the framework and ensured its effectiveness. The internal controls are commensurate with the size of the Company and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial
and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies.
M/s. S R B C & Co LLP, Statutory Auditors of the Company have audited the financial statements included in this annual report and have issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act 2013).
The internal audit department along with the external partners/ consultants carry out internal audit of the Company's business/ functional activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with and approved by the audit committee. The audit committee reviews reports submitted by the internal auditor, internal audit partner and statutory auditor. Basis inputs received from the audit committee, suggestions for improvement are considered and the audit committee follows up on corrective action.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal auditor, statutory auditors and external partner/consultant, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year ended 31st March 2024.
Director's Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
b. they 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 on 31st March 2024 and of the profit/loss of the Company for that year;
c. they 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;
d. they have prepared the annual accounts of the Company on a going concern basis;
e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
Acknowledgements and Appreciation
The Board places on record its appreciation for the support and co-operation, your company has been receiving from its various stakeholders including Customers, Suppliers, Business Partners and Associates, Financial Institutions, Regulatory Bodies and Central & State Governments.
Your Directors appreciate and value the contribution made by every member of the Sapphire Family
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