DIRECTORS' REPORT To, The Members, Your Directors have pleasure in placing before you the 55th Annual Report of the Company along with the Accounts for the year ended 31st March, 2015: DIVIDEND Since, the Company had been doing well and it was hopeful of getting better results this year, the Company had declared Interim Dividend on 25th August, 2014 and paid an Interim Dividend of Rs. 2 per Share i.e. 40% on the Equity shares of face value of Rs. 5/- each. Further, for the year under review, the Directors have recommended a final Dividend of R 5 per share i.e. 100% (R 6.50 per share i.e. 130% for the previous year) on Equity Shares of face value of Rs. 5/- each of the Company. The total dividend outgo shall be Rs. 584.64 lakhs as compared to Rs. 647.28 lakhs during the previous year. OPERATIONS The sales and operating income for the year ended 31st March 2015 amounted to Rs. 28141 lakhs as against Rs. 26493 lakhs for the previous year. Thus the turnover of the Company has increased by about 6.22 % as compared to last years turnover. During the year 2014-15 profit before tax as compared to last year has increased by 25% from R 2548 lakhs to Rs. 3186 lakhs and profit after tax has increased by 25% from Rs. 1759 lakhs to R 2199 lakhs EXPORTS Exports for the year ended 31st March, 2015 have increased by about 14.80% from R 10439 lakhs to Rs.11984 lakhs. CURRENT OUTLOOK The Company has planned to achieve a sales turnover of Rs. 325 crores during the current year. MATERIAL CHANGES & COMMITMENTS, IF ANY The Company has acquired leasehold rights, title, interests and possession in land and building admeasuring 7,800 square meters at Plot No. E-18 in the Tarapur Industrial Area of MIDC connecting to the existing Factory for a consideration of Rs.9,00,00,000/- (Rupees Nine Crores Only) from Authentic Petroproducts LLP for expansion purpose between the end of the financial year of the Company to which the financial statements relate and the date of the report. Further, huge reserves have been accumulated by the Company over a period of years and to pass on the benefit to its shareholders, the issuance of Bonus Shares is proposed by the Directors of the Company. BOARD OF DIRECTORS In accordance with the Articles of Association of the Company, Mr. Bharat N. Shah and Mr. Lalitkumar P. Shah Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. KEY MANAGERIAL PERSONNEL Mr. Darshan Rampariya, Chief Financial Officer and Ms. Ashwini Ambrale, Company Secretary and Compliance Officer of the Company were appointed as Key Managerial Personnel during the Financial Year 2014-15 in accordance with the Section 203 of the Companies Act, 2013. 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- i) 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. ii) That the directors had 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 at the end of the financial year viz. 31st March, 2015 and of the profit or loss of the Company for the year ended on that date. iii) That the Directors had taken proper and sufficient care 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. iv) That the Directors had prepared the annual accounts on a going concern basis. v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. vi) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT, IF ANY The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Independent Directors shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for re-appointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. LISTING ON THE STOCK EXCHANGE The Company's shares are listed with BSE Limited and the Company has paid the necessary listing fees for the Financial Year 2015-16. FIXED DEPOSITS The Company has not accepted or renewed any Fixed Deposits within the meaning of Section 73 of the Companies Act, 2013. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. PARTICULARS OF EMPLOYEES Particulars of employees as required u/s 134 of the Companies Act, 2013 are not annexed since there are no employees drawing remuneration of more than R 60,00,000/- per annum during the year under review, if employed for full year or more than R 5,00,000/- per month, if employed for part of the year. MEETINGS During the year 6 (Six) Board Meetings and 4 (four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. BOARD EVALUATION 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, the Chairperson's as well as the evaluation of the working of its Audit Committee, Corporate Social Responsibility Committee, Nomination & Remuneration Committee and Stakeholder Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. FAMILARISATION PROGRAM TO INDEPENDENT DIRECTORS Familiarisation Program has been carried out by the Company for the Independent Directors details of which has been posted on Company's website <http://anuhpharma.com>. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO {Section 134} The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed as "Annexure-1" to the Directors' Report. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Pursuant to Section 135 of the Companies Act, 2013 and the Rules made thereunder, the Board of Directors has constituted the Corporate Social Responsibility (CSR) Committee under the Chairmanship of Mr. Jasvantlal G. Shah, Non-Executive Independent Director. The other Members of the Committee are Mr. Bipin Shah, Managing Director and Mr. Arun L. Todarwal, Non-Executive Independent Director. The CSR policy of the Company has been uploaded on the Company's website. Other details of the CSR activities undertaken by the Company as required under Section 135 of the Companies Act, 2013 is annexed as "Annexure-2" to the Directors' Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed as "Annexure-3" to the Directors' Report. BUSINESS RISK MANAGEMENT The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business. The Company has adopted risk management policy. INTERNAL FINANCIAL CONTROL The Company has in place adequate internal financial controls with reference to financial statements. The Company has adopted policy on internal financial control system for proper observation of adequate internal financial controls. POLICIES Vigil Mechanism / Whistle Blower Policy The Company has a vigil mechanism named Whistle Blower Policy (WBP) in accordance with Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement to deal with instances of fraud and mismanagement, if any. The vigil mechanism/Whistle Blower Policy is uploaded on the Company's website. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Extract of Remuneration Policy is annexed as "Annexure-A" to the Corporate Governance Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and the Board for approval. Policy on Transactions with Related Parties as approved by the Board is uploaded on the Company's website. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is annexed as "Annexure-4" to the Directors' Report. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHER DISCLOSURES The table containing the names and other particulars of ratio of Directors' Remuneration to Median Employees' Remuneration in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure-5" to the Directors' Report. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. A policy for prevention of Sexual Harassment of Women at workplace and setting up of the Committee for implementation of said policy is under review and consideration. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report is attached separately to this report. CORPORATE GOVERNANCE Your Company continues to imbibe and emulate the best corporate governance practices aimed at building trust among all stakeholders - shareholders, employees, customers, suppliers and others. Your Company believes that fairness, transparency, responsibility and accountability are the four key elements of corporate governance. The Corporate Governance Report presented in a separate section forms an integral part of this Annual Report. AUDITORS' QUALIFICATIONS AND MANAGEMENT'S REPLY Emphasis of Matter We draw attention to the following matters in Note 36 to the financial statements: As per section 135 of the Act, the Company was required to incur/spend Rs. 39,34,176 on Corporate Social Responsibility ("CSR") during the financial year 2014-2015. However, during the financial year 2014-2015 the Company has spent Rs. 34,45,196. Hence, the unspent amount of CSR expenditure is Rs.4,88,980. Our opinion is not modified in respect of this matter. Management's Reply: Near the end of the year the Company has identified CSR projects/activities which are under scrutiny and if satisfied will be spending the balance and the required proposed CSR amount during the course of the next year. AUDITORS M/s. S. I. Mogul & Co., Chartered Accountants (Firm Registration No. 106512W), the Statutory Auditors of the Company retire at 57th Annual General Meeting and are eligible for the re-appointment as Auditors of the Company to hold the office from the date of 54th Annual General Meeting until the conclusion of the 57th Annual General Meeting. The Directors recommend reappointing M/s. S. I. Mogul & Co., as Auditors of the Company. A certificate has been received from the Auditors to the effect that their reappointment, if made, would be within the prescribed limits u/s. 139 of the Companies Act, 2013. COST AUDITORS Pursuant to the provisions of section 139 of the Companies Act, 2013 and as per Rule 14 of Companies (Audit and Auditors) Rules 2014, with the prior approval of Central Government, Mr. Girikrishna S Maniar (Fellow Membership No. 8202), practicing Cost Accountant, had been appointed to conduct audit of cost records of bulk drugs for the financial year ended 31st March, 2015. The Cost Audit Reports would be submitted to the Central Government within prescribed time. The Cost Audit Reports for bulk drugs for the year ended 31st March, 2014 was filed with the Central Government on 18th September, 2014. SECRETARIAL AUDITOR 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 M/s Gupta Baul & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as "Annexure-6" to the Directors' Report. SECRETARIAL AUDITORS' QUALIFICATIONS AND MANAGEMENT'S REPLY Emphasis of Matter a) Pursuant to Clause 35 of Listing Agreement with the Stock Exchange, the shareholding pattern of the Company only mentions the names of persons classified as promoters and not of the persons who fall under the definition of promoter group. b) Pursuant to Clause 30 of Listing Agreement with the Stock Exchange, the Company has not promptly notified pursuant to Clause 30 of Listing Agreement the appointment of Ms. Rajeshree Gor as an Additional Director. c) Pursuant to Regulation 13(2) of SEBI (Prohibition of Insider Trading) Regulations, 1992 Ms. Rajeshree Gor had not disclosed her shareholding in the Company in Form B within 2 working days of becoming the Director of the Company. d) As per section 135 of the Act, the Company was required to incur/spend Rs. 39,34,176 on Corporate Social Responsibility ("CSR") during the financial year 2014-2015. However, during the financial year 2014-2015 the Company has spent Rs. 34,45,196. Hence, the unspent amount of CSR expenditure is Rs. 4,88,980. Management's Reply: a) The Company will henceforth disclose the names of persons classifying as promoter group in the shareholding pattern of the Company. b) The management is taking necessary action to make the required intimation to the Stock Exchange which was inadvertently missed out. c) The management is taking necessary action to make the required disclosure to the Stock Exchange which was inadvertently missed out. d) Near the end of the year the Company has identified CSR projects/activities which are under scrutiny and if satisfied will be spending the balance and the required proposed CSR amount during the course of the next year. ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation for the assistance and cooperation received from our bankers, employees, auditors and consultants during the period under review. The Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels. The Directors also place on record their gratitude to the Members for their continued support and confidence. By Order of the Board Sd/- Jasvantlal G. Shah Chairman (DIN: 00372600) Registered Office: 3-A, Shiv Sagar Estate, Noth Wing, Dr.Annie Besant Road, Worli, Mumbai - 400 018 Place : Mumbai Date : June 12, 2015 |