Sapphire Foods India Limited , a prominent player in the food service industry, has received a demand order from the Central GST and Central Excise authorities in Raipur, Chhattisgarh. The order, issued on September 10th, amounts to INR 1.01 million and pertains to alleged discrepancies in the company's GST filings for the period from April 2018 to March 2019.

Details of the Demand Order

The demand order, issued under Section 74(1) of the CGST Act 2017, raises several allegations against Sapphire Foods India:

1. Availing excess Input Tax Credit (ITC)
2. Incorrect utilization of ITC against GST liability on outward supply
3. Delayed payment of reverse charge payments

Company's Response

In a disclosure to the stock exchanges on September 11th, Sapphire Foods India stated that it is currently evaluating the order. The company plans to take necessary steps to respond to the demand, including challenging it at relevant forums.

Financial Impact

Despite the INR 1.01 million demand, Sapphire Foods India has assured stakeholders that there is no material impact on its financial, operational, or other activities due to this order. The company's statement suggests confidence in its position regarding the allegations.

Regulatory Compliance

It's worth noting that while the amount involved in this particular litigation falls below the threshold limit prescribed for disclosure under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, Sapphire Foods India has chosen to disclose this information. This decision appears to be based on the potential cumulative impact of related matters with similar legal questions or factual circumstances.

Conclusion

As Sapphire Foods India navigates this regulatory challenge, stakeholders will be watching closely to see how the company addresses the allegations and manages any potential impact on its operations. The company's proactive disclosure and stated intention to challenge the order if necessary demonstrate its commitment to transparency and regulatory compliance.

Sapphire Foods India Limited , a prominent player in the food service industry, has issued a clarification regarding the appointment of Vijay Jain as Executive Director and Chief Financial Officer (ED & CFO). The company provided additional details on Jain's remuneration and stock option allocation in response to the proposed resolution in their 16th Annual General Meeting (AGM) notice.

Appointment and Remuneration

Vijay Jain, who has been serving as the company's Chief Financial Officer since September 5, 2018, is set to take on the expanded role of ED & CFO. Sapphire Foods emphasized that Jain's proposed remuneration package remains largely unchanged from his previous position as CFO, with only standard annual increments applied.

Stock Option Allocation

The company addressed concerns about stock option grants, stating that no additional stock options have been or will be granted specifically due to Jain's elevation to the ED & CFO position. Sapphire Foods disclosed that approximately 11 lakh stock options, representing 5% of the total Employee Stock Ownership Plan (ESOP) pool (equivalent to 0.3% of the issued share capital), remain unallocated.

Key points regarding the stock option allocation include:

• No exclusive allocation of stock options will be made to any board member, including the ED & CFO.
• Future stock option grants from the residual pool will be considered holistically for the overall management team and other key employees.
• Any potential future grant of stock options to the ED & CFO will not exceed 20% of the remaining unallocated pool.
• The minimum grant price for any future allocation of ESOPs will be Rs. 272.00 per share.

Performance-Linked Incentive

The company clarified that the performance-linked incentive (PLI) for Jain is part of his overall Cost to Company (CTC) package. The PLI is tied to the company's operating profits and will be evaluated by the Nomination and Remuneration Committee at the end of each financial year, taking into account both individual and company performance.

Board's Perspective

The Board of Directors expressed their view that Vijay Jain has played a significant role in driving the company's strategic initiatives. They believe that the proposed remuneration is commensurate with the remuneration paid to similar positions in other companies, considering the size of Sapphire Foods, Jain's profile, knowledge, skills, and the responsibilities he shoulders.

Shareholder Approval and Transparency

Sapphire Foods emphasized that any additional grant of stock options beyond the residual ESOP pool would require fresh shareholder approval. The company also noted that their existing ESOP plans include provisions for malus and clawback, which can be triggered under certain specified circumstances.

This clarification by Sapphire Foods India Limited demonstrates the company's commitment to transparency and proper corporate governance practices, providing shareholders with detailed information about executive compensation and stock option policies.