DIRECTORS' REPORT To, The Members Samrat Pharmachem Limited The Directors are pleased to present the Twenty-Third Annual Report on the business and operation s of the company and the financial accounts for the year ended 31 March 2015 OPERATIONS Your company has performed reasonably well during the year. In a h ighly competitive business environment, your Company achieved a turnover of Rs. 4739.44 Lakhs as against Rs. 6484.06 Lakhs achieved last year - a decrease of around 26.91%. Production of 212.4565 tons of pharmaceutical chemicals was achieved during the year. DIVIDEND In order to conserve the resources, your Directors do not recommend pa yment of Dividend for the financial year ended 31st March, 2015. EXPORTS During the year 2014-2015 your company's ex port division registered sales of Rs. 855.38 Lacs, down from Rs. 1,753.71 Lacs last year. Your Company has initiated several export promotion measures to increase exports. The products of your Company have been well accepted in the international market and the Company expects better export turnover in the coming years. DEMATERIALISATION The equity shares of the Company have been dematerialized by joining the depositories viz. N ational Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). The ISIN (International Securities Identification Number) No. allotted to the Company is INE103E01016. LISTING OF SHARES The Company's shares are listed on the Bombay Stock Exchange Ltd, A hmedabad Stock Exchange Ltd and Vadodara Stock Exchange Ltd. It has paid the listing fees of all the exchanges for the period upto 31st March, 2016 from whom the payment notices were received. Your Company has not been delisted on any of these exchanges for non-payment of listing fees. INSURANCE The assets of the company have been adequately insured against all possible risks with ICICI Lombard General Insurance Co Ltd & United India Insurance Co. Ltd. WEBSITE Your company's we bsite address is www.samratpharmachem.com . The performance of the Com pany is regu larly updated and made available on this website. The website provides other vital information about the Company. SAFETY, HEALTH & ENVIRONMENT (SHE) POLICY As a responsible corporate citizen, the Company is fully aware of its responsibilities for protection of the environment and to provide its employees a safe and hazard free work place. The Company has adopted a Safety, Health & Environment Policy that applies to all employees and activities. The work culture encourages total involvement and commitment of the employees to the SHE Policy. Some of the activities carried out during the year are as follows. Safety: Providing necessary equipm ent's and apparatus required for th e safe operation of the manufacturin g activities Observing the rules and regulations with regard to safety & precaution Consulting emergency control management team to monitor the safety of the plant Conducting regular safety audit Encouraging the workforce to use protective equipments and maintain cleanliness Conducting seminars to impart knowledge to employees on safe operations Organising safety week to create safety awareness Health: Conducting medical health check up for all the employees of the Company periodically Conducting lecture meetings for providing guidance and counseling on matters of health, diet and exercise Conducting seminars to impart knowledge on meditation, yoga and anti-stress therapy Environment: Ensuring smooth functioning of the effluent treatment plant with respect to air, water and solid waste. Updating the ETP plant to make it more nature friendly Proper monitoring of the pollution levels in and around the plants Planting trees in and around the factory Complying with the prescribed norms of pollution control PERSONNEL As on 31st March 2015, the total number of employees on the payroll of the company were 29. Industrial rel ations with employees at various levels continue to be cordial. DIRECTORS & KEY MANAGERIAL PERSONNEL In pursuance to the provisions of the Companies Act, 2013, and Articles of Association of the company Mr. Rajesh Mehta, Director retires by rotation and being eligible has offered himself for re-appointment. During the year Ms. Renu Dharod was apointed as an Additional Director effective from 14th February, 2015 to hold office upto the date of next Annual General Meeting of the company. It is proposed to appoint her as an Independent Director from the date of AGM for a period of 5 years till September 2020. The company has received declaration from all the independent directors confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchange. The company has devised a policy for the performance evaluation of independent directors, Board committees and other individual directors which include criteria for performance evaluation of non-executive directors and executive directors. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES Your company has no subsidiaries, joint ventures or any associate companies during the year. MEETING OF THE BOARD During the year under review five (5) Board Meetings were held. The inetervening gap between the meetings was within the period prescribed under the Companies Act, 2013. For further details please refer to the Corporate Governance Report attached to this Annual Report. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee comprises of the 3 Directors namely, Mr. Samir Kothary (Chairman), and Mr. Mahendra Pipalia and Mr. Rajesh Mehta as other members of the committee. This committee recommends and reviews the appointment and remuneration of Directors. It has adopted a policy which deals with the appointment and remuneration of directors and key managerial personnel. The adopted policy decides about the manner of selection of executive directors, key managerial personnel, and independent directors. The policy also decides about the criteria to be followed for recommending the remuneration of directors and key managerial personnel. BOARD EVALUATION The Board of Directors have carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provision of Act and the Corporate Governance requirement as prescribed by Securities and Exchange Board of India (SEBI) under clause 49 of listing Agreement. The performance of Board was evaluated by the Board of Directors after seeking inputs from all directors on the basis of criteria such as Board Composition & Structure, Effectiveness of Board Process, Information and functioning, etc. In separate meeting of Independent directors' performance of Non -Independent Directors, performance of the Board as whole and performance of Chairman was evaluated, taking into account the views of executive directors and nonexecutive directors. VIGIL MECHANISM The vigil mechanism of the company, which al so incorporates a whistle b lower po licy in terms of the L isting Agreem ent, includes an Ethics and Compliance Task Force comprising of senior executives of the company. It deals with instance of fraud and mismanagement, if any in the company. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The whistle blower Policy ensures that strict confidentiality is maintained while dealing with concerns and also that no discrimination is meted out to any person for a genuinely raised concern. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Dire ctors rep ort that: - 1. That the preparation of account s for the Fin ancial Year ended 31st March 2015, the applicable accounting standards read with requirements set out under Schedule III of the Act, have been followed along-with proper explanation relating to material departures; 2. That the Directors have selected such accounting policies and applied them consistently and m ade judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and the Profit or Loss of the Company for the year on that date; 3. That the Directors have taken proper and suffic ient 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; 4. That the Directors' have prepare d the accounts for the financial year ended 31st March 2015 on a going concern basis. 5. That the Directors have laid dow n internal financial control to be foll owed by the company and that such internal financial controls are adequate and are operating effectively; and 6. That the Directors have devised proper systems to ensure compli ance with the provisions o f all applicable laws and that such system are adequate and operating effectively Based on the framework of internal financia l controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by the 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 2014-15. MANAGEMENT DIS CUSSION & ANALYSIS REPORT As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Mana gemen t Discussion and Analysis Report is enclosed as a part of this report. CORPORATE GOVERNANCE & SHAREHOLDERS INFORMATION The Company has taken adequate steps to adhere to all the stipulations laid down in C lause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors of the company M/s. Shah, Shah & Shah, Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is included as a part of this report. SEXUAL HARASSMENT OF WOMEN AT WORK PLACE During the year under review, there were no cases reported pursuant to the Sexua l Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. AUDIT COMMITTEE The Audit committee comprises 3 Directors namely Mr. Mahendra Pipalia (Chairman), Mr. Rajesh Mehta (Executive Director-Member) and Mr. Samir Kothary (Member). All the recommendations made by the Audit Committee was accepted by the Board. AUDITORS M/s. Shah, Shah & Shah, Chartered Accountants, who are the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. Shah, Shah & Shah as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the Twenty-Fifth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. AUDITORS REPORT The report of auditors is self explanatory and do not require any further elucidation. SECRETARIAL AUDITOR Pursuant to provisions of Section 204 of the Compani es Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. A. A. Mulla & Associates a firm of company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report submitted by the Secretarial Auditor is enclosed herewith as a part of this report and shown as Annexure I. RELATED PARTY TRANSACTION / DISCLOSURE There are no related party transactions made by the company during the year. AOC 2 report is attached to this report as Annexure II. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the extract of annual report is given in the Annexure III in the prescribed Form MGT-9, which forms part of this report. 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 Under the provision of Section 197(12) of the Companies Act, 2 013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), 1956 read with Companies (Particulars of Employees) Rules, 2014, the particulars of the employees as required to be mentioned in the Annual Report is not aplicable to the company. SHARES ISSUED UNDER EMPLOYEE STOCK OPTION SCHEME (ESOS) No shares have been issued to the employees under Employee Stock Option Scheme (ESOS) during the year. PUBLIC DEPOSITS The Company has not invited and accepted deposits from the public during the financial year ended 31st March 2015. DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING & OUTGO The particulars relat ing to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed pursuant to the provisions of Section 134 of the Act read with Rule 8 of the Companies (Accounts Rules), 2014, is given hereunder. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Your Company continues to explore & implement measures that wi ll help in conservation and saving of energy. Measures taken & benefits derived are as follows: • Hot water coming from steam traps is recycled & used as boiler feed water. • Using economiser effectively to pre-heat boiler feed water. • Timely & routine preventive maintenance of boiler. Improvement in unit operations leading to reduction in processing time in reactor, centrifuge, drier & other ^ equipments to minimize use of electricity. Hot water coming from steam traps is recycled & used as boiler feed water. TECHNOLOGY ABSORPTION The management has focused on productivity and quality improvement in order to optimize manufacturing costs. This has helped in achieving optimum manufacturing costs, improved quality of products and consequently enhanced customer satisfaction. The company uses indigenous technology. FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign exchange earned Rs. 85,538,479 F.O.B. Value of export of finished goods (Previous year Rs. 175,371,348) Foreign exchange used Rs. 315,936,028 Import of raw materials (Previous year Rs. 479,701,130) ACKNOWLEDGEMENTS The Directors wish to place on record their ap preciation towards all asso ciates including customers, supplier s, financial institutions, bankers, employees, consultants, shareholders and to all those who have extended their committed support to the progress of the Company. By order of the Board of Directors For Samrat Pharmachem Limited Lalit Mehta Chairman & Managing Director DIN : 00216681 Place : Date : Mumbai 30 May 2015 |