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Directors Report of Fredun Pharmaceuticals Ltd.

Mar 31, 2018

Dear Members,

The Directors are pleased to present the 31 st Annual Report of your Company with the Audited Accounts for the year ended March 31.2018.

1. Financial Results

(Rs. In Lakhs)

Particulars

For the financial year ended 31.03.2018

For the financial year ended 31.03.2017

Income from Business Operations

5,806.73

5,669.62

Other Income

164.35

191.38

Total Income

6,971.08

6.861.00

Profit / Loss before Interest, Depreciation and Taxes

586.42

526.05

Finance Cost

193.75

187.48

Depreciation / Amortization

128.50

113.58

Profit/Loss Before tax

264.17

224.99

Exceptional Income / Expenses

-

-

Prior Period adjustments

00

2.39

Profit / Loss before Tax

264.17

222.59

Income Tax

89.08

79.85

Profit/ Loss after Tax

175.09

142.74

2. Financial Performance:

Your Company earned a total income of Rs. 5,971.08 lakhs compared to the income of Rs. 5,861 lakhs for the previous year and the net profit of Rs. 175.09 lakhs compared to the net profit of Rs 142.74 lakhs for the previous year i.e.. there was 22.66 % hike in the income of the Company.

The turnover of the Company has increased as compared to the previous year on account of increase in business activities and addition of high speed tableting machines and blister packing machines.

The aggressive steps taken by your Directors to modernize the Infrastructure of the manufacturing unit at Palghar with the modern ona updated machinery has substantial increased the existing manufacturing capacity. The addition of two different departments to manufacture ointments, creams, gels and pellets of different APIs are nearing completion. This “Business Assessment’ will define the scale of success in the near future. The focus of the Mandgement is to maintain a balance between the changing customer needs / want of customers with the increase in the profits and wealth maximization of the Company.

3. State of Affairs of the Company:

Fredun Pharmaceuticals Limited is one of the Pharmaceuticals Finished Products Manufacturing Company in India, with an increasing global presence, catering to more than 20 countries globally, mainly to Sri Lanka, Malaysia, Uganda, Philippines. Kenya, Tanzania, Nigeria, Combodia, Myanmar, Mozambique. The Company is committed to increase its productivity and profits.

4. Dividend:

The Board of Directors have recommended a Dividend of 6 % on the ordinary Equity Shares of the Company payable to those shareholders of the Company whose names appear in the Register of Members as on the Book Closure date.

5. Share Capital:

The paid-up Share Capital of the Company as on March 31, 2017 was Rs. 4,85,24,000 consisting of 23,52,400 Equity Shares of Rs. 10 each and 2,50,000 Preference Shares of Rs. 100/- each. The Equity Shares of the Company are listed on the BSE Limited since March 21, 2016.

During the F.Y. ended on March 31, 2018; there was an increase in the Capital structure of the Company. The Company had issued 5.72,735 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange 8oard of indta (Issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 150/- each Including premium ol Rs. 140/-each to the Eligible Investors. The details of the Issue is available on the website of the Company via the EGM notice dated July 7, 2018 read with the Postal Ballot notice dated September 22,2018.

Further, your Company had issued 4.99,999 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 150/- each including premium of Rs. 140/-each to the Eligible Investors 8; Promoters. The details of the Issue is available on the website of the Company via the Postal Ballot notice dated September 22,2018.

Apart from this, considering the Business expansion and requirements of funds the Company had further proposed to issue 6,20,000 Equity Shares of Rs. 10/- each under the Preferential Guidelines of Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009 at Rs. 225/- each including premium of Rs. 215/- each to the Eligible investors. Promoters and Directors of the Company. The details of the Issue is available on the website of the Company via the Postal Ballot notice dated May 24,2018.

6. Transfer to Reserves:

The Company proposes to transfer an amount of Rs. 1,871.54 Lakhs to reserves for its future growth and diversification.

7. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings: Export of Goods-Rs. 2.311.22/-Lakhs Foreign Exchange Outgo: - Rs. 197,53/- Lakhs

In compliance with the Reserve Bank of India guidelines, the Company proactively mandges Foreign Exchange Risk to protect value of exposures. If any, with an objective to mandge financial statement volatility. Current, the Company has in place appropriate risk hedging strategy for its Imports and Exports. Foreign Exchange exposures are periodically reviewed and if necessary, hedged while avoiding trading and speculative positions. The Board periodically reviews Foreign Exchange Exposure, if any and hedges are undertaken by the Company.

8. Board Meetings and Committee Meetings:

- Twelve (12) Board meetings were held during the year. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- Four (4) Audit Committee Meetings were heid during the year. The details of the Audit Committee Meetings and the attendance of the Directors are provided In the Corporate Governance Report annexed herewith.

- One (1) Nomination & Remuneration Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- One (I) Independent Directors’ Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

- One (1) Stakeholders Relationship Committee Meeting was held during the year. The details of the Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report annexed herewith.

9. Directors and Key Mandgerial Personnel:

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees.

10. Director Retiring by Rotation:

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Dr. (Mrs.) Daulat Medhora (DIN: 01745277) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment. Her re-appointment is being placed for your approval at the ensuing Annual General Meeting. The Members of the Company may refer to the accompanying Notice of the Annual General Meeting of the Company, for the brief Resume of Dr. (Mrs.) Daulat Medhora.

11. Declaration by Independent Directors:

The Company had received declaration from all the independent Directors under Section 149(7) of the Companies Act 2013 in the first Board Meeting of the Financial Year 2018-19 held on May 24, 2018: stating that they meet the criteria of Independence as laid down in Section 149(6) of the Act.

12. Annual Evaluation of Board Performance and Performance of its Committees and of Individual Directors:

Pursuant to the provisions of the Act the Board of Directors hod carried out an Annual Evaluation of its own performance. Board Committees and Individual Directors.

The performance of the Board was evaluated after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and structure effectiveness of Board process, participation in the long-term strategic planning, information, functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the Composition of Committees, effectiveness of Committee meetings, etc.

The Board reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Boara and Committee Meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairperson was also evaluated on the key aspects of her role by other Board members.

A separate meeting of Independent Directors was convened In the month of June 2017, to discuss the following aspects:

i. Review the performance of Non- Independent Directors and the Board as a whole;

li. Review the performance of the Chairperson of the Company, taking into account the views of Executive and Non-Executive Directors.

ii. Assess the quality, quantity and timeliness of flow of information between the Company’s Mandgement and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All Independent Directors were present at the Meeting and discussed the above and expressed their satisfaction.

13. Directors’ Responsibility Statement:

Pursuant to Section 134(3)(c) of the Companies Act, 2013; your Directors hereby confirm that:

l. In the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

ii. Appropriate accounting policies have been selected and applied consistent 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 and of the Profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Annual Accounts had been prepared on o going concern basis,

v. the Infernal Financial Controls had been laid down, to be followed by the Company and the such internal financial controls ore adequate and were operating effectively; and

vi. In order to ensure compliance with the provisions of all applicable laws, proper systems has been devised and that such systems were adequate and operating effectively.

14. Particulars of Employees:

None of the employees of the Company fall under the limits laid down in Rule 5(2) of fhe Companies (Appointment and Remuneration of Mandgerial Personnel) Rules, 2014.

15. Extract of Annual Return:

Pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Mandgement and Administration) Rules, 2014; the extracts of Annual Return in Form MGT-9 is annexed as Annexure A to this Report.

16. Training and Human Resource Mandgement:

For ony organisation, the biggest challenge s maintaining consistency in performance of their star performers. Most of the Companies focus on retaining the star performers. Your Company continues to put concerted efforts in recruiting quality people, who align with the culture of the organization. Development and training programs are undertaken regularly, so that they can become potential successors of their seniors. Morale of our employees continued to be high. Focus is also being given to areas like employees’ growth and satisfaction along with employees’ relations during the year. The relationship between mandgement and employees continues to be one of mutual respect, appreciation and cordial.

17. Subsidiary Company. Associate Company and Joint Venture Company:

Your Company does not have any Subsidiaries or Associates or Joint Venture Companies.

18. Deposits:

Your Company has not accepted any deposits from public.

19. Particulars of Loans, Guarantees and Investments:

During the year, your Company has not given any new loans or made any Investments and has not provided any Guarantees except those which are already mentioned in the audited accounts of the Company.

20. Statutory Auditors:

M/s. Savla & Associates. Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of the 31 st Annual General Meeting. Being eligible for re-appointment have offered themselves for re-appointment for another fresh term period.

The Board places on record its deep appreciation of the valuable contributions made by M/s. Savla & Associates, Statutory Auditors of the Company and been satisfied with the services have proposed to re-appoint them as the Statutory Auditors of the Company for another fresh term period.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Savla & Associates, in their Report dated June 18, 2018: on the Financial Statements of the Company for F.Y. 2017-18.

M/s. Savla & Associates has given a written consent to the Company for the re-appcxntment as the Statutory Auditors. M/s. Savla & Associates has also given a certificate that they satisfy the criteria prescribed in Section 141 of the Companies Act. 2013 and their re-appointment, if made, shall be in accordance with the conditions laid down under the Act and Rules.

In accordance with the provisions of Section 139 (2) of the Companies Act. 2013 which provides for rotation of Auditors and considering the certificate as provided by M/s. Savla & Associates under Section 141 of the Companies Act. 2013: the Audit Committee and the Board at their respective meetings, have unanimously recommended to the Shareholders appointment of M/s. Savla & Associates, Chartered Accountants (Firm Registration Number -109361W) as the Statutory Auditors of the Company to hold office for next 5 (five) consecutive years from the conclusion of the 31st Annual General Meeting scheduled to be heid on Thursday, September 27. 2018 till the conclusion of the 36th Annual General Meeting to be held In the year 2023.

21. Particulars of Contracts or Arrangements with Related Parties:

There were r>o material^ significant related party transactions made by the Company during the year that would fall under the scope of Section 188 of the Companies Act. 2013. Disclosure in form AOC-2 in terms of Section 134(3)(h) of the Companies Act, 2013 is annexed as Annexure B’.

The policy on materiality of information / documents and dealing with it is been approved by the Board and the same is also available on the website of the Company at www.fredungroup.com

22. Secretarial Audit Report:

Pursuant to the provisions of Section 204 ot the Act and the Companies (Appointment and Remuneration of Mandgerial Personnel) Rules, 2014; the Board of Directors had appointed M/s. Rajendra and Co.. Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the F.Y. ended March 31, 2018. The Secretarial Audit Report is annexed as ‘Annexure C’.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Rajenara and Co.. Practicing Company Secretaries, In their Secretarial Audit Report dated June 16.2018 on the Secretarial and other related records of the Company for F.Y. 2017-18.

23. Cost Audit Report:

The Cost Auditors are in the process of completing the Cost Audit for the Financial Year 2017-18 and it will be completed before the due date.

24. Details of Significant Material Orders:

No significant and material orders were passed by the Regulatory Authorities or the Courts or Tribunals that may have an impact on the going concern status and Company’s Operations in foreseeable future.

25. Internal financial control system and their adequacy:

Company has established Internal Financial Control over financial reporting in current financial year 2017-18.

26. Corporate Social Responsibility:

Your Company does not fall under the criteria of Corporate Social Responsibility as laid down under Section 135 of the Companies Act. 2013.

27. Vigil Mechanism /Whistle Blower Policy:

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Dilectors, employee’s and its stakeholders to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company s Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee.

28. Conservation of Energy. Technology, Absorption:

The Company is continuously complying with the Pollution Control Regulations as are applicable m the state of Maharashtra.

Unlike other Industries where R & D investment is a small portion of the total sales, it approaches about 10-20% in the Pharma Industry and hence the Industry has to pay an enormous sum for a new drug patent. To make such innovator products available to the poor, generic drugs are allowed to be manufactured and marketed where the innovators patent is not applicable. Your Company has set up a complete R & D Department to develop such new formulations with proper process and andlytical method validations. A consistent attempt is made to improve the existing manufacturing processes and economise the cost of production.

As regulatory standards in APIs Increase, techniques to achieve solubilisation of sparmgty soluble drugs is a top priority for the drug manufacturer. Technologies that offer functional solutions to improve bioavailability, productivity and controlled release formulations will be in demand. Your Company is now working on solutions to improve the bioavailability, maintain solid stable dispersions and inhibit APIs crystallizations of insoluble APIs. Emphasis is also put on delivery options to facilitate controlled release tablets to optimize performance of the medicines.

Your Company has been successful in exporting recentty out of patent costly molecules as their generic versions. Since the opportunities are huge, your Company is in the process of registering such more pharmaceutical formulations and increase the exports. Companies with vision, values and focus will only succeed and hence the mandgement has decided to spend more on R&D with strong commitment and Mil to achieve this goal.

The Company also conducts In- House Energy Audit at regular intervals with proper monitoring and maintenance of all the machines.

29. Compliance with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company is committed to uphold and maintain the dignity of Women Employees and an Internal Complaints Committee has been formed for each location of the Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act. 2013.

No case of Sexual harassment was reported to the Internal Complaints Committee during the year under review.

30. Particulars of Directors / Key Mandgerial Personnel / Employees:

Details pertaining to remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Mandgerial Personnel) Rules. 2014; the details of remuneration of Directors. Key Mandgerial Personnel and the employees and the percentile change in the remuneration; as required under the Rules are furnished hereunder.

The Company’s policy on Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this report.

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year 2017-18:

Name

Designation

Total Remuneration (in Rs.)

Ratio of Remuneration of Director to the Median Re -muneration of Employees

Dr. (Mrs.) Daulat Med hora

Chairperson & Jt. Mandging Director

12,00,000

5.27:1

Mr. Fredun Medhora

Mandging Director

24.00,000

10.54:1

Mr Nariman Medhora

Executive Director

13.20,000

5 80:1

The Independent - Non-Executive Directors of the Company are only getting sitting fees.

(ii) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the Financial Year 2017-18:

Name

Designation

Total Remuneration (in Rs.)

% increase! (decrease) in remuneration in the Financial Year

Dr. (Mrs.) Daulat Medhora

Chairperson & Jt Mandging Director

12,00.000

NIL

Mr. Fredun Medhora

Mandging Director

24.00.000

NIL

Mr. Nariman Medhora

Executive Director

13.20.000

NIL

The Independent - Non-Executive Directors of the Company are only getting sitting fees.

(iii) The percentage increase in the median remuneration of employees in the Financial Year:

The percentage increase in the median remuneration ot employees in the Financial Year 2017-18is24%

Explandtion: For calculation ot median remuneration, the employee count taken for the Financial Year 201 7-18 and 2016-17. comprise employees (excluding workmen) who have served for the whole of the respective Financial Years.

(iv)The number of Permanent Employees on the rolls of the Company:

There were 174 permanent employees as on March 31.2018. (inclusive of workmen)

(v) Average percentile increase already made in the salaries of the employees other than the Mandgerial Personnel in the last financial year and its comparison with the percentile increase in the mandgerial remuneration and justification thereof and point out if there any exceptional circumstances for increase in the mandgerial remuneration:

Average Percentile Increase for other than mandgerial personnel: 20.39 Average Percentile Increase for Mandgerial Personnel: NIL

The average increase in the salaries of employees excluding Mandgerial Personnel during Financial Year 201 7-18 was 20.39%. The increase in the remuneration of employees was based on Company’s Performance and their Individual Performance.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company:

It is affirmed that the remuneration paid during the period under review is as per the remuneration policy of the Company.

31. Acknowledgement:

The 8oard of Directors place on record their sincere thanks to its bankers, business associates, consultant, and various Government Authorities for their continued support extended to your Company during the year under review. The Directors gratefully acknowledge the support and confidence reposed by the shareholders of the Company.

By Order of the Board

For Fredun Pharmaceuticals Limited

Sd-

Dr. (Mrs.) Daulat Medhora

Place: Mumbai DIN: 01745277

Date: June 18, 2018 (Chairperson cum Jt. Mandging Director)


Mar 31, 2015

The Directors are pleased to present the Twenty Eighth Annual Report of your Company with the Audited Accounts for the year ended March 31, 2015.

FINANCIAL RESULTS

FINANCIAL PERFORMANCE AND FUTURE PROSPECTS:

Amount in Rs,

March 51st 2015 March 51st 2014

Sales Income 253,575,494 212,847,624

Other Income 4,864,147 3,602,337

Total Income 258,439,641 216,449,961

Profit/Loss before Interest & Depreciation 214,23,056 179,02,682

Finance Cost 10,477,908 8,106,593

Depreciation / Amortization 5,463,802 5,256,233

Profit/Loss before taxes 5,481,546 4,539,856

Exceptional Income/Expenses (2,89,724) -

Prior Period items (500) -

Profit/Loss before Taxes 5,191,122 4,539,856

Income Tax 2,634,137 2,117,720

Profit/Loss after Taxes 2,556,985 2,422,136

Your Company posted a total income of Rs. 258,439,642/- compared to the income of Rs. 216, 449,961/- for the previous year and the net profit of Rs.2,556,985/-compared to the net profit of Rs. 2,422,136/- for the previous year. The Turnover of the Company has increased as compared to the previous year on account of increase in the business activities; however the net profit for the year increased only marginally compared to that of the previous year on account of additional expenses incurred for the expansion of the current manufacturing facilities at Palghar. Your Directors are taking aggressive steps to increase the business activities of the Company and they are sure, that the Company will be able to show better results in the current year.

BUSINESS ACTIVITIES:

Your Directors are now focusing on increasing the production as the expansion of the current manufacturing facilities of the Palghar unit is nearing completion. Three new granulation departments have been added to the existing two departments. This will substantially increase the production and profits of your Company. A new Q.C laboratory has been set up as per the WHO CGMP norms. This will help the process of strengthening the compliance and regulatory systems.

Since a lot of drugs are going to go off-patent in the coming years; Indian pharmaceutical companies are well positioned to get the benefits of the same. Your Company has also the capability and technological expertise to manufacture products of quality and reliability.

DIVIDEND

To conserve the funds your directors do not recommend any dividend for the year ended March 31 2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars required to be stated as per the provisions of Section 134(3) (m) of The Companies Act, 2013 relating to conservation of energy and technology absorption is provided as under:

ENVIRONMENT PROTECTION

The Company has been complying with the requirements of the Pollution Control Regulations- in the State of Maharashtra.

CONSERVATION OF ENERGY

The Company conducts In-House energy audit at regular intervals with proper monitoring and maintenance of all the machineries. Low energy lighting and high efficiency meters have been installed to yield significant investment benefits and additional savings.

TECHNOLOGY ABSORPTION & RESEARCH AND DEVELOPMENT

A patented drug is the result of research and innovation and a generic drug is only a continuance of the same at a low price. World Health Organization (WHO) defines a generic drug as "pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a license from the innovator Company and marketed after the expiry date of the patent or other exclusive rights". Our Company has set up a complete R & D Department to develop new formulations with proper process and analytical method validations. Improvements in existing manufacturing processes are continuously carried out to economize the cost of production and improve the quality of the formulation.

FOREIGN EXCHANGE EARNINS AND OUTGO:

Foreign Exchange Earnings:

Export of Goods - Rs. 1618.01 lakhs

Foreign Exchange Outgo: - Rs. 123.35 Sakhs

DEPOSITORY SYSTEM:

Details of the Depository System are given in the section ''Additional Information'' which forms a part of the Corporate Governance Report and is attached with the Annual Accounts.

DIRECTORS:

Mr. Fredun Medhora was originally appointed as the Whole Time Director of the Company up to 31 March 2015 and he was subsequently appointed as the Managing Director of the Company for the period of three years.

Mr. Nariman Medhora the Managing Director of the Company had resigned from the Board with effect from 15th October 2014

Dr. Rohinton Kaga and Mr. Nariman Medhora were appointed as the Independent Director and Executive Director respectively on 05th May 2015 and their appointments will be subject to the approval of the members at the Ensuing Annual General Meeting

All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of Independence as specified in the Act and the Rules framed there under and are independent of the management.

ANNUAL EVALUATION OF BOARD PERFORM ANCE AND PERFORMANCE OF COMMITTEES AND OF INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreements, the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure effectiveness of Board process, participation in the long-term strategic planning, information, functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of Committee meetings, etc

The Board reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and committee meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

TRAINSNG AND HUMAN RESOURCE MANAGEMENT:

Morale of our professionals continued to be high. The Company continued to put concerted efforts in recruiting quality people .Development programs and ''Train the Trainer'' programs were other key focus areas during the year. The relationship between management and employees is without any dispute and cordial.

AUDITORS

The Auditors M/s. Savla & Associates Mumbai Chartered Accountants (ICAI Registration No.: 109361W) hold the office until the conclusion of the ensuing Annual General Meeting and they are eligible for reappointment as the Auditors. Members are requested to consider their re-appointment and to fix their remuneration for the year ending on 31 March 2016. Their appointment will be as per the provisions of Section 139 of The Companies Act, 2013

The Company has received a confirmation from M/S. Savla & Associates to the effect that their appointment, if made, will comply with the eligibility criteria in terms of Section 141 (3) of The Companies Act, 2013.

SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, Mr. Rajendra Vaze of M/s. Rajendra And Co Practicing Company Secretaries, have been appointed as Secretarial Auditors of the Company. The report of the Secretariat Auditors is annexed as Annexure I to this Report. The report is self-explanatory and does not call for any further comments.

DETAILS OF SIGNIFICANT MATERIAL ORDERS

No significant and material orders were passed by the regulators or the courts or tribunals impacting the going concern status and Company''s operations in future

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in Form MGT 9 is annexed as Annexure II to this Report

DIRECTOR''S RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, and Secretarial Auditors and External consultant(s) 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 2014-15

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to 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 at the end of the financial year and of the profit of the Company for that period;

(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 on a "going concern basis ";

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

(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.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not given any loans or any guarantee and has not done any Investments during the year.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. The details of the transactions with related parties are provided in the accompanying financial statements.

There were no materially significant related party transactions made by the Company during the year that would have required members approval under Clause 49 of the Listing Agreement. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board has been adopted by the Company and uploaded

The details of the transactions with related parties are provided in the accompanying financial statements.

VIGIL MECHANISM/ WHISTLEBLOWER POLICY

The Company has adopted a Whistleblower Policy, to provide a formal mechanism to the Directors, employees and its stakeholders to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee

MANAGEMENT DISCUSSION AND ANALYSIS AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion and Analysis and the Corporate Governance Report, as required under Clause 49 of the Listing Agreement, is presented in a separate section forming part of the Annual Report.

ACKNOWLEDGMENTS :

The Company would like to acknowledge all its stakeholders, Shainrao Vithal Co-operative Bank Ltd and its customers, key partners for their support and all its employees for their dedication and hard work.

The Directors appreciate the continued guidance received from various Regulatory Authorities including RBI, SEBI, Ministry of Corporate Affairs, The Registrar of Companies, The Stock Exchange, Mumbai, Excise Authorities, Income Tax and Sales Tax Authorities,

On Behalf of the Board of Directors

Dr. (Mrs.) D. M. Medhora

Chairperson

Place: Mumbai

Date : 30th May 2015

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