Mar 31, 2018
The Directors have pleasure in presenting to you their Forty-fifth Annual Report together with Companyâs Audited Financial Statement for the accounting year ended 31s March, 2018.
FINANCIAL RESULT
(Rs. In Lacs)
Particulars |
2017-2018 |
2016-2017 |
Revenue from operations |
27937.96 |
30288.56 |
Other Income |
82.70 |
30.79 |
Profit before Finance Expenses, Depreciation & Amortizations |
4769.54 |
4622.42 |
Less: Depreciation & Amortizations |
656.82 |
500.71 |
Finance Expenses |
1178 |
1003.65 |
Profit / (Loss) before tax |
2934.72 |
3118.06 |
Profit / (Loss) after tax |
1988.96 |
2227.50 |
Total Comprehensive Income |
36.32 |
36.32 |
Earnings Per Share (in Rs.) (Basic ) |
12.57 |
14.07 |
DIVIDEND
The Board of Directors have declared and paid an interim dividend @ 5% (fifty paisa each share) on 1,58,28,248 equity shares aggregating to Rs. 79,14,124/- for the year ended 31st March, 2018.
STATE OF COMPANY AFFAIRS
The Financial Statements of your company for the financial year 2017-18 are prepared as per Indian Accounting Standard (âIND-ASâ) and in Compliances with applicable provisions of the Companies Act 2013 read with the rules issued thereunder and the provisions of SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015.
Since it is 1st time adoption under Ind-As your company has drawn up its accounts for the last three years under Ind-As. The figures for the previous years have been suitably adjusted as appropriate to confirm to IND-AS requirements.
During the financial year implementation of Goods and Service Tax (GST) and general slow down of economy due to the same has affected our turnover and profit marginally.
During the year under review, the production of Tenofovir Disoproxil Fumarate, an anti retroviral is 14.60 MTs., compared to 2.17 MTs in the previous year. On similar line the total production volume of all the products during the year is 770.37 tons as against 601 tons in previous year.
The turnover of the company has basically dropped on account of decrease in the cost of raw material which has resulted in subsequent reduction in our sale prices of finished products. One of the main reason for drop in our net profit was due to the marginal payment of Rs.217.11 Lacs as recompense to the banks to come out of the re-structuring process, this has resulted in higher interest cost. However, this will now enable the company to borrow funds at reduced interest cost, as and when required.
During this year your company earned total income of Rs. 28020.66 Lacs compared to Rs.30319.35 Lacs in the previous year, decrease of 8.21%. The company has made a profit after tax of Rs.1988.96 Lacs as against Rs.2227.50 Lacs, decrease of 12%. The company has achieved an export turnover of Rs.5881.92 Lacs as against Rs.8504.18 Lacs.
Even though the turnover in the current year has dropped to Rs.28020.66 Lacs as against Rs.30319.15 Lacs in the previous year, the drop in profit margin is very nominal to 7.10% as against 7.35% in the previous year.
There is a considerable upgradation in ratings received from India Ratings and Research Pvt. Ltd. to IND BBB from IND BBB.
During the year under review Unit 2 of your company has received WHO Approvals for manufacturing of the following Active Pharmaceutical ingredients:
Lumefantrine (APIMF100)
Tenofovir Disoproxil Fumarate (APIMF204)
Artemether (APIMF138)
Emtricitabine (WHO API314)
Efavirenz (WHO API 318)
Qualification of your Company is in various stages with different customers for its ARV APIs. This progress will be reflected in times to come.
FUTURE OUTLOOK
While the future has always looked bright to us, it was only because we had striven to benefit from own technological prowess and the strategic edge we enjoyed over nearest competition. Today as we do this simhavalokana the future looks even brighter than ever before in spite of several challenges. Your company now shares habitat in API space with world''s renowned companies like Gilead Sciences, ViiV Health Care and AbbVie with whom we have signed sub-licenses to introduce patented front line Antiviral actives. With both manufacturing units GMP approved by WHO-Geneva we are poised to further benefit from ongoing regulatory strategy and to contribute in the disease segments of poorly addressed therapeutic needs in the developing world. Over next three quarters, we shall introduce Nitrofurantion and Acyclovir. We shall also commercialize Pregabalin, Atorvastatin and Rosuvastatin in lifestyle disease segments of local markets. These 5 generics will strengthen our presence in local markets. Sarve Santu Niramyah has been our goal and we remain committed to it as a responsible corporate citizen.
Due to increase in the prices of intermediates we import from China, your company has started in house development of the same. This will not only improve availability but also enable to reduce costs.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Company has adopted Indian Accounting Standards (Ind AS) as per the notification dated February 16, 2015 issued by the Ministry of corporate Affairs (MCA). Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014. The Company has published financials using Ind AS for the year ended March 31, 2018 along with the comparable as on March 31, 2017 and Opening Statement of Assets and liabilities as on April 01, 2016.
Following are the major areas which had an impact on account of transition to Ind AS:
- Fair Valuation of certain financial instruments
- Employee costs pertaining to defined benefit obligations
- Discounting of certain long term liabilities
- Deferred taxes on above.
GOODS AND SERVICE TAX (GST)
GST, the biggest indirect tax reform of India, was rolled-out effective July 01, 2017. This transformational reform significantly impacted all areas of business across various sectors including the pharmaceutical industry. The Act has merged all significant indirect taxes currently applicable to the Companyâs business operations into a single tax. This is expected to bring in greater transparency across all the economic activities and reduce multiple tax levies and administration. There was a significant short-term impact on the operations of the Company during the year mainly due to reduction of channel inventory which is now slowly being back to the normal levels. The Company has augmented its IT systems to comply with the requirements of this Act.
DEPOSIT
Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount on account of principal or interest on public deposits was outstanding as on date of the balance sheet.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in notes to the Financial Statements.
RISK MANAGEMENT
The Company has formulated a policy on Risk Management and the same is detailed in the Corporate Governance Report. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. These risks are reviewed from time to time and controls are put in place with specific responsibility of the concerned officer of the Company.
INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUECY
The Companies Act, 2013 has mandated the Company to have a formal framework of Internal Financial Controls (IFC) and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC.
The Board reviews the effectiveness of controls documented as part of IFC framework, and take necessary corrective actions where weaknesses are identified as a result of such reviews. Based on this evaluation, no significant events had come to notice during the year that have materially affected, or are reasonably likely to materially affect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company.
The Statutory Auditors of the Company has audited the IFC over Financial Reporting and their Audit Report is annexed as Annexure B to the Independent Auditorsâ Report under Standalone Financial Statements.
PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement containing the necessary information on Conservation of Energy, Technology absorption and foreign exchange earnings and outgo stipulated under section 134(3)(m) of the Companies Act, 2013 read with rule 8 of Companies (Accounts ) Rules, 2014 is annexed to report as Annexure A.
PARTICULARS OF EMPLOYEE
There are Nil employees drawing remuneration of Rs 8,50,000 (Rupees Eight lacs fifty thousand) per month or Rs 1,02,00,000/- (Rupees One crore two lacs) and above per annum during the year under review. The details of the remuneration drawn by the Managing Director, Whole Time Director and Independent Directors are stated in the Corporate Governance Report. The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company and the percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year 2017-18:
Name of the Director/KMP |
Designation# |
Ratio to Median Remuneration |
% increase in remuneration in the financial year |
Shri Govardhan Murlidhar Dhoot |
Chairman & Managing Director |
7.46 |
Nil |
Shri Brijmohan Murlidhar Dhoot |
Non Executive Director |
0.09 |
-14.29% |
Shri Subhash Khattar |
Independent Director |
0.17 |
4.55% |
Ms Anuradha Sukhani |
Independent Director |
0.07 |
11.11% |
Shri Ajay R Dhoot 111 |
Additional Director |
0.01 |
- |
Shri Aaditya R Dhoot111 |
Additional Director |
0.01 |
- |
Shri Ajay Sawhney 121 |
Additional Director - Independent |
0.02 |
- |
Shri Rukmesh Dhandhania 121 |
Additional Director - Independent |
0.03 |
- |
Mr. Ajay Samant |
Chief Financial Officer |
NA |
27.59 |
Ms. Nikita Bavishi |
Company Secretary |
NA |
14.48 |
# The Non-executive & Independent Directors of the Company are paid only âSitting feesâ of Rs. 2000 for attending the Meetings of the Board, the Committees including meetings of Independent Directors. The Non-executive & Non-Independent Director of the Company does not receive any remuneration from the Company.
* Since the remuneration of these Directors/KMPs is only for the part of the year/previous year the ratio of their remuneration to median and increase in remuneration is not comparable .
Notes:
1. Appointed as Additional Director w.e.f 20th November, 2017.
2. Appointed as Additional and Independent Director w.e.f 20th November, 2017.
b. The percentage change in the median remuneration of employees in the financial year:
Median remuneration is increased by 18.99%.
c. The number of permanent employees on the rolls of Company: 345
d. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
Average annual increase in salaries of employees was around 26.05% in the last financial year.
This is based on Remuneration policy of the Company that rewards people differentially based on their contribution to the success of the Company and also ensures that external market competitiveness and internal relativities are taken care of.
There is no change / increase in managerial remuneration in Financial year 2017-18.
e. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Directors
The Board of Directors of the Company is led by the Executive Chairman and comprises of seven other Directors as on 31st March, 2018, including four Independent Directors which includes one Woman Director as required under Section 149 (1) of the Companies Act, 2013 and three Non-Executive Director (other than Independent Directors). The composition of the Board is in conformity with the provisions of the Act and Regulation 17 of the Listing Regulations entered into with the Stock Exchanges.
All the Independent Directors of the Company have furnished declarations that they meet the criteria of independence as prescribed under the Companies Act, 2013 and under Listing Regulations.
At the Annual General Meeting of the Company held on 26th September, 2017, the members approved the reappointment of Shri Brijmohan M Dhoot (holding DIN 01046420) who had retired by rotation.
The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, appointed the following Directors on the Board of the Company upto the date of this report.
1) Shri Ajay R Dhoot (DIN: 00210424) has been appointed as Additional- Non Executive Director of the Company with effect from November 20, 2017 and his appointment shall be regularized at the ensuing Annual General Meeting.
2) Shri Aditya R Dhoot (DIN: 00057224) has been appointed as Additional- Non Executive Director of the Company with effect from November 20, 2017 and his appointment shall be regularized at the ensuing Annual General Meeting.
3) Shri Ajay Sawhney (DIN: 05132739) has been appointed as Additional and Independent Director of the Company with effect from November 20, 2017 and his appointment shall be regularized and appointed for a period of 5 years effective from November 20, 2017, subject to the approval of the Members at the ensuing Annual General Meeting.
4) Shri Rukmesh Dhandhania (DIN: 02493968) has been appointed as Additional and Independent Director of the Company with effect from November 20, 2017 and his appointment shall be regularized and appointed for a period of 5 years effective from November 20, 2017, subject to the approval of the Members at the ensuing Annual General Meeting.
5) Mrs. Nidhi Mundada (DIN: 08134952) has been appointed as Additional and Independent Director of the Company with effect from May 28, 2018 and her appointment shall be regularized and appointed for a period of 5 years effective from May 28, 2018, subject to the approval of the Members at the ensuing Annual General Meeting.
Mrs. Anuradha Sukhani, Independent Director of the Company, had resigned from the Board of Directors of the Company w.e.f. the closure of business hours on May 21, 2018 due to personal reasons. The Board placed on record its deep appreciation for the guidance & support provided by her for the overall growth of the Company during her association with the company.
In accordance with the provisions of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) (Amendment) Regulations 2018 (effective April 01, 2019), approval of Members is sought through Special Resolution for re-appointment of another term of 5 (five) years of Shri Subhash C Khattar (DIN 01122941), who has attained the age of Seventy -five years.
Shri Govardhan M Dhoot (DIN 01240086) Director, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment in accordance wih provisions of the Companies Act, 2013.
The brief resume and other relevant documents of the director are being given in the notes of Notice convening the Annual General Meeting for your perusal.
b) Meetings of Board of Directors
During the year, 8 meetings of the Board of Directors were convened and held on 15th April 2017, 08th May 2017, 11th August 2017, 25th September 2017, 31st October 2017, 20th November 2017, 12th December 2017 and 12th February 2018. The intervening gap between two consecutive meetings was not more than one hundred and twenty days. Detailed information on the meetings of the Board is included in the Corporate Governance Report which forms part of the Annual Report.
c) Committees of the Board
In Compliance with the requirements of applicable laws and as a part of best governance practices, the company has following 4 (Four) Committees of the Board as on 31st March, 2018:
(i) Audit Committee
(ii) Nomination and Remuneration Committee
(iii) Stakeholders'' Relationship Committee
(iv) Corporate Social Responsibility Committee
During the financial year ended 31st March 2018, the Board re-constituted the Audit Committee and Nomination and Remuneration Committee in accordance with the Act and the Listing Regulations.
The details with respect to the aforesaid Committees forms a part of the Corporate Governance Report.
(d) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 read with rules framed thereunder and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements)Regulations, 2015, the Board had carried out the performance evaluation of its own, Committees and of Independent Directors through self assessment and group discussions. Further Independent Directors at their separate meeting evaluated the performance of the Non Independent Directors, Board as a whole and of the Chairman of the Board. The result of the evaluation is satisfactory and meets the requirement of the Company.
(e) Familiarization Programme
The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Companyâs procedures and practices. The Independent Directors also met with senior management team of the Company in informal gatherings.
Details of familiarization programme imparted is placed on the Companyâs website.
(f) Key Managerial Personnel
There was no change in the Key Managerial Personnel during the year under review.
REMUNERATION POLICY
The remuneration policy, takes into account the circumstance of business so as to attract and retain quality talent and leverage performance significantly.
Remuneration of the Executive Directors is determined by the Board, on the recommendation of the Nomination & Remuneration Committee which is subject to the approval of the Shareholders.
Non-Executive Directors are also entitled to sitting fees for attending meetings of the Board and Committees thereof the quantum of which is determined by the Board. The sitting fees payable to Non-Executive Directors, as determined by the Board is Rs. 2000 for each meeting of the Board, Audit Committee, Independent Directors Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.
VIGIL MECHANISM
The Company has set up vigil mechanism viz. Whistle blower Policy to report genuine concerns and grievances. The Policy provides for adequate safeguarding to the person who avail the mechanism. The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee.
The details of the Whistleblower Policy are explained in the Report of Corporate Governance and are also available on the Companyâs corporate website http://www.mangalamdrugs.com/images/pdf/whistle-blower-policy.pdf
AUDIT COMMITTEE
The Audit Committee as on March 31, 2018 comprises of the following Directors:
Shri. Subhash C Khattar (Chairman), Shri. Govardhan M Dhoot and Shri Rukmesh Dhandhania. All the recommendations made by the Audit Committee were accepted by the Board. Detailed Information of the Audit Committee may be reviewed in Report on Corporate Governance forming a part of this Report.
PREVENTION OF SEXUAL HARASSMENT POLICY
At MANGALAM, all employees are of equal value. There is no discrimination between individuals at any point on the basis of race, color, gender, religion, political opinion, national extraction, social origin, sexual orientation or age. Every individual is expected to treat his/her colleagues with respect and dignity.
The Company has in place ''Prevention of Sexual Harassment Policy''. This Anti-Sexual Harassment Policy of the Company is in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy. An Internal Complaints Committee (ICC) also is in place to redress complaints received regarding sexual harassment.
During the year 2017-18, NIL complaints were received by the Company related to sexual harassment.
CORPORTE SOCIAL RESONSIBILITY
The Company believes in the well being of the society at large . The Company as a part of the Corporate Social Responsibility, made focused efforts in the fields of Healthcare, Promoting Education and Eradicating Hunger & Malnutrition. The Company has in place a CSR Committee and CSR policy in line with the provisions of the Companies Act, 2013.
The Composition of the CSR Committee is as under:
Name of the Director |
Category of Directorship |
Shri Subhash C Khattar, Chairperson |
Independent Director |
Shri Govardhan M Dhoot, Member |
Managing Director |
Shri Brijmohan M Dhoot, member |
Non Executive Director |
Our main objective under CSR policy is to actively contribute to the social and economic development of the communities in which we operate. As per the policy the CSR activities are focused not just around the plants and offices of the company, but also in other geographies based on the needs of the communities. The CSR policy of the Company is available on the website of the Company.
The annual report on CSR activities as required to be made in the Boardâs Report as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached herewith as Annexure-C.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Companyâs operations in future.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes/ events affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of this report.
EXPLANATIONS OR COMMENTS ON THE QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE AUDITOR IN HIS REPORT
There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors appointed under Section 139 of the Companies Act, 2013 in their report. Hence the need for explanations or comments by the Board does not arise. The report of the Statutory Auditors forms part of the financial statements.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, 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 and there are no material departures;
b) that 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 your 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 the Companies Act, 2013 for safeguarding the assets of your 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) That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that, such systems were adequate and operating effectively.
CHANGE IN THE CAPITAL STRUCTURE AND LISTING OF SHARES
The paid up share capital of the Company as on March 31, 2018 is Rs. 15,82,82,480 divided into 1,58,28,248 equity shares of Rs. 10/- each. The Companyâs equity shares are listed on the National Stock Exchange of India Ltd (NSE) and BSE Ltd (BSE). During the year under review no further shares were issued or allotted.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
Management Discussion and Analysis forms a part of this annual report, which is given as Annexure D to this Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format Form No. MGT-9 forms a part of this report as Annexure E.
AUDITORS AND AUDITORSâ REPORT
i. Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s Batliboi & Purohit, Chartered Accountants (Firm Registration No. 101048W ), were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion 44th Annual General Meeting held on 26th September, 2017 until the conclusion of 49th Annual General Meeting of the Company to be held in the calendar year 2022, subject to the annual ratification by members at every Annual General Meeting, on such remuneration as decided by Board of Directors .
However, in terms of Section 40 of the Companies (Amendment) Act, 2017, notified on May 07, 2018, the requirement of annual ratification of appointment of Statutory Auditors by Members at every Annual General Meeting has been omitted and accordingly, Members approval is not required for ratification of their appointment annually.
Auditorâs Report for the year under review does not contain any qualifications, reservations or adverse remarks.
i. Cost Auditors
As per Section 148 of the Companies Act, 2013 read with Rules framed thereunder, M/s Ankit Kishor Chande, Cost Accountants, (Membership No. 34051) have been re-appointed as Cost Auditors for the financial year 2018-19 to conduct cost audit of the accounts maintained by the Company in respect of the Bulk Drugs as prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing Annual General Meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year 2016-17, issued by M/s Ankit Kishor Chande, Cost Auditors, in respect of the various products prescribed under the Cost Audit Rules was filed with the Ministry of Corporate Affairs on 14th September, 2017.
iii. Secretarial Auditors
The Board, pursuant to section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any statutory modification(s) or re-enactment thereof, had during the year, appointed Mr. Ankit Sethi, Practising Company Secretary, to conduct secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is attached herewith marked as Annexure F to this report.
There are no qualifications, reservation or adverse remark in the report.
CORPORATE GOVERNANCE
Corporate Governance refers to a set of systems, procedures and practices which ensure that the company is managed in the best interest of all corporate stakeholders i.e. shareholders, employees, suppliers, customers and society in general. Fundamentals of Corporate Governance include transparency, accountability and independence.
As required by Regulation 34 read with schedule V of the Listing Regulations, a separate Report on Corporate Governance forms part of the Annual Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of the Listing Regulations forms a part of this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations. There are no materially significant Related Party Transactions entered into by the Company with the Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly, there are no transactions that are required to be reported in form AOC-2.
However you may refer to Related Party Transactions in Notes to the Standalone Financial Statements.
The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link: http://www.mangalamdrugs.com/images/pdf/rpt-policy.pdf
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the steadfast commitment and highly motivated performance by the employees at all levels which was instrumental in sustained performance of the Company. The Directors are also greatful and pleased to place on record their appreciation for the assistance and cooperation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors are also grateful to the customers, suppliers and business associates of your Company for their continued cooperation and support.
For and on behalf of the Board of Directors
Govardhan M. Dhoot
Chairman & Managing Director
DIN NO: 01240086
Place: Mumbai
Dated: 14th August, 2018
Mar 31, 2016
The Members of
Mangalam Drugs & Organics Ltd
The Directors have pleasure in presenting to you their Forty -Third Annual Report together with Companyâs Audited Financial Statement for the accounting year ended 31st March 2016.
1. FINANCIAL RESULT
(Rs. In Lacs)
Particulars |
2015-2016 |
2014-2015 |
Revenue from operations |
29502.18 |
22058.39 |
Other Income |
15.91 |
8.80 |
Profit before Finance Expenses, Depreciation & Amortizations |
3772.08 |
2044.65 |
Less: Depreciation & Amortizations |
441.30 |
415.40 |
Finance Expenses |
929.18 |
1028.37 |
Profit / (Loss) before tax |
2401.60 |
600.88 |
Provision for Deferred Tax |
798.29 |
(13.24) |
Profit / (Loss) after tax |
1603.31 |
614.12 |
Balance b/f. from previous year |
(240.49) |
(854.61) |
Additional Depreciation on Fixed Assets |
(15.54) |
- |
Balance carried to Balance Sheet |
1347.28 |
(240.49) |
2. ISSUE OF EQUITY SHARES/SHARE WARRANTS
In terms of Shareholdersâ Approval at the 42nd Annual General Meeting held on 03rd September, 2015 the company on 28th September 2015 issued and allotted 26,50,000 preferential share warrants to the promoter group at the price of Rs. 65/- per warrant, entitling the holder of such warrant to apply for and obtain one Equity share of face value of Rs. 10/- each fully paid up against each such warrant on or before the expiry of 18 months from the date of allotment. 25% of the said price of warrant was paid on subscription and balance 75% is to be paid anytime upon exercise of entitlement to convert into equity shares as stated above. On 16th November, 2015 the promoter group partially exercised their entitlement to convert 1200000 warrants into equivalent number of equity shares as per the terms of issue and paid the balance price thereon. As a result of this, the issued, subscribed and paid up capital of the company has increased from Rs. 1317.82 lakhs in FY 2014-15 to Rs. 1437.82 lakhs in FY 2015-16. The balance 14,50,000 warrants were converted into equity shares on 10th June, 2016 as per the terms of issue and paid the balance price thereon.
3. DIVIDEND
The company does not propose to declare any dividend this year, since it is under restructuring and as per the restructuring terms with the banks, no dividend can be declared by the Company. During the year, we have made significant investments in the new project at Unit-2, Vapi. All these investments have been funded out of internal accruals.
4. STATE OF COMPANY AFFAIRS
During the year under review, the Company earned a total income of Rs. 29518.09 Lacs compared to Rs. 22067.19 Lacs in the previous year an increase of 33.76%. The company has made a profit after tax of Rs. 1603.31 Lacs as against Rs.614.12 Lacs an increase of 161.07%. The Company has achieved export turnover of Rs. 4916.54 Lacs as against Rs. 5787.85 Lacs in the previous year. Constant efforts are being made to increase the export. The Company is continuously exploring avenues to increase exports to various countries.
5. FUTURE OUTLOOK
There is very little change in global recessionary pressures over past years. The next fiscal year too anticipates a diligent approach in order to maintain the progressive tempo we have maintained in past. Besides HIV segment your company has undertaken projects to introduce HCV (anti hepatitis C) APIs. The Company has upgraded its facilities at Unit-2 and will be applying for WHO Geneva GMP approval for the same. The Company also plans to go for USFDA approval for this facilities in the near future. We remain committed to continue with robust regulatory strategy, the prudent partnering and continuous resource restructuring activities in the future.
6. DEPOSIT
The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on date of the balance sheet.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in Notes 11, 15 and 24 to the Financial Statements.
8. RISK MANAGEMENT
The Company has formulated a policy on Risk Management and the same is detailed in the Corporate Governance Report. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. These risks are reviewed from time to time and controls are put in place with specific responsibility of the concerned officer of the Company.
9. PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars as required under Section 134 of the Companies Act, 2013 relating to Conservation of Energy and Technology Absorption are also provided in the Annexure I to this Report.
10. PARTICULARS OF EMPLOYEE
The total number of permanent employees as on 31st March, 2016 stood at 311. There were Nil employees, who were employed throughout the year and were in receipt of remuneration aggregating Rs. 60 lakhs or more or were employed for part of the year and were in receipt of remuneration aggregating Rs. 5 lakhs per month or more during the financial year ended 31st March, 2016.
The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:
Name of the Director/KMP |
Ratio to Median Remuneration |
Mr. Govardhan Murlidhar Dhoot |
5.44 |
Mr. Subhash Khattar |
0.17 |
Ms. Meenal Sukhani |
0.14 |
Mr. Brijmohan Murlidhar Dhoot |
0.06 |
b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:
Name of the Director/KMP |
Designation |
% increase in remuneration in the financial year |
Mr. Govardhan Murlidhar Dhoot |
Chairman & Managing Director |
88.89% |
Mr. Subhash Khattar* |
Independent Director |
14.28% |
Ms. Meenal Sukhani*@ |
Independent Director |
Nil |
Mr. Brijmohan M Dhoot# |
Non- Executive Director |
Nil |
Mr. Ajay Samant |
Chief Financial Officer |
3.53% |
Ms. Nikita Bavishi# |
Company Secretary |
Nil |
* Entitled for Sitting fees of Rs. 2000 for attending each Board, Audit Committee, Nomination & Remuneration Committee and Independent Directors Meeting
@ Not comparable as she was a director only for the part of the year during 2014-15
# Has been appointed in 2015-16, hence % increase cannot be calculated
c. The percentage increase in the median remuneration of employees in the financial year:
Median remuneration change is increased by 13.64%
d. The number of permanent employees on the rolls of Company: 311
e. The explanation on the relationship between average increase in remuneration and Company performance:
The Average increase is based on the objectives of Remuneration Policy of the Company that is designed to attract, motivate and retain the employees who are the drivers of organization success and helps the Company to retain its industry competitiveness.
The rise in case of Shri Govardhan M Dhoot should be viewed considering the fact that the remuneration paid to him as a Managing Director was comparatively very low in the previous years and also the rise in the profit before tax of the Company which is increased by 299.68% in the F.Y 2015-16.
f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:
Aggregate remuneration of KMP in the financial year 2016 (Rs. In lakh) |
28.80 |
Revenue (Rs. In lakh) |
29502.18 |
Remuneration of KMP (as % of Revenue) |
0.10 |
PBT (Rs. In lakh) |
2401.60 |
Remuneration of KMP (as % of Revenue) |
1.20 |
g. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:
Particulars |
2015-16 |
2014-15 |
% Change |
Price Earning Ratio |
22.75 |
5.69 |
299.82% |
Market Capitalization |
3647761517.60 |
349173354 |
944.68% |
h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
Particulars |
March 31, 2016 |
IPO (April 19, 2005) |
% Change |
Market Price (BSE) |
253.70 |
22 |
1053.18 |
Market Price (NSE) |
253.30 |
22 |
1051.36 |
i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
Average annual increase was around 18.18%.
This is based on Remuneration policy of the Company that rewards people differentially based on their contribution to the success of the Company and also ensures that external market competitiveness and internal relativities are taken care of.
The increase in managerial remuneration is 88.89%. The rise in case of Managerial Remuneration should be viewed considering the fact that the remuneration paid to him as a Managing Director was comparatively very low in the previous years and also the rise in the profit before tax of the Company which is increased by 299.68% in the F.Y 2015-16. Also the company continues to grow both in size and statute as is evident from the enhanced performance levels under the leadership of Shri Govardhan M Dhoot.
j. Comparison of each remuneration of the key managerial personnel against the performance of the Company
Mr. Govardhan M Dhoot |
Mr. Ajay Samant, CFO |
Ms. Nikita Bavishi, CS |
|
Aggregate remuneration of KMP in the financial year 2016 (Rs. In Lakhs) |
13.60 |
12.60 |
2.60 |
Revenue (Rs. In lakh) |
29502.18 |
29502.18 |
29502.18 |
Remuneration of KMP (as % ofRevenue) |
0.05 |
0.04 |
0.01 |
PBT (Rs. In lakh) |
2401.60 |
2401.60 |
2401.60 |
Remuneration of KMP (as % of PBT) |
0.57 |
0.52 |
0.11 |
k. The key parameters for any variable component of remuneration availed by the directors:
Nil.
l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:
Ratio to average remuneration of such employees is 0.82%.
m. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
(a) Directors
The Board of Directors of the Company is led by the Executive Chairman and comprises of three other Directors as on 31st March, 2016, including two Independent Directors which includes one Woman Director as required under Section 149 (1) of the Companies Act, 2013 and one Non-Executive Director(other than Independent Directors). The composition of the Board is in conformity with the provisions of the Act and Regulation 17 of the Listing Regulations entered into with the Stock Exchanges.
All the Independent Directors of the Company have furnished declarations that they meet the criteria of independence as prescribed under the Companies Act, 2013 and under Listing Regulations.
At the Annual General Meeting of the Company held on 03rd September, 2015, the members approved the appointment/reappointment of -
- Re-appointment of Mr. Govardhan M Dhoot (holding DIN 01240086) as a Chairman & Managing Director of the Company for a term of five years starting from 01st November, 2014.
- Appointment of Ms. Meenal Sukhani (holding DIN 06840007) as an Independent Director of the Company for a term of five years from 02nd May, 2015.
- Appointment of Mr. Brijmohan M Dhoot (holding DIN 01046420) as a Director- Non Executive of the Company, liable to retire by rotation.
Ms. Meenal Sukhani, Non-Executive & Independent Director of the Company, resigned from the Board of the Company w.e.f. the closure of business hours on May 16, 2016 due to personal reasons. The Board placed on record its appreciation for the contribution made by her during her tenure as Director of the Company.
The Board of Directors, on recommendation of the Nomination and Remuneration Committee, appointed Ms. Anuradha Sukhani as an Additional Director in the category of Independent Director w.e.f. May 16, 2016 who shall hold the office till the forthcoming Annual General Meeting (âAGMâ) and is eligible for appointment at the AGM. The appointment of Ms. Anuradha Sukhani as an Independent Director for the period of 5 years w.e.f. May 16, 2016 is subject to approval of the Members of the Company at the ensuing AGM.
Mr. Govardhan M Dhoot (holding DIN 01240086) Director, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
(b) Meetings Of Board Of Directors
During the year, 12 (twelve) meetings of the Board of Directors were convened and held on 08th April 2015, 02nd May 2015, 15th May 2015, 22nd June 2015, 04th August 2015, 06th August 2015, 04th September 2015, 28th September 2015, 21st October 2015, 16th November 2015, 14th January 2016 and 05th March, 2016. The intervening gap between two consecutive meetings was not more than one hundred and twenty days. Detailed information on the meetings of the Board is included in the Corporate Governance Report which forms part of the Annual Report.
(c) Committees of the Board
There are currently 4 (Four) Committees of the Board, as follows:
(i) Audit Committee
(ii) Nomination and Remuneration Committee
(iii) Stakeholdersâ Relationship Committee
(iv) Corporate Social Responsibility Committee
During the financial year ended March 31, 2016, the Board re-constituted Nomination and Remuneration Committee in accordance with the Act and the Listing Regulations.
Details of all the Committees along with their terms of reference, composition and meetings of each Committee held during the year, are provided in the Corporate Governance Report, annexed to this Report.
(d) Key Managerial Personnel
Pursuant to sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Act, the key managerial personnel of the Company are Mr. Govardhan M Dhoot - Managing Director, Mr. Ajay Samant- Chief Financial Officer and Ms. Nikita Bavsihi* - Company Secretary.
*At the Board Meeting held on 04th September, 2015, Ms. Nikita Bavishi was designated as the Company Secretary â Key Managerial Personnelâ of the Company w.e.f 05th September, 2015.
12. REMUNERATION POLICY
The remuneration policy, takes into account the circumstance of business so as to attract and retain quality talent and leverage performance significantly.
Remuneration of the Executive Directors is determined by the Board, on the recommendation of the Nomination & Remuneration Committee which is subject to the approval of the Shareholders.
Non-Executive Directors are also entitled to sitting fees for attending meetings of the Board and Committees thereof the quantum of which is determined by the Board. The sitting fees payable to Non-Executive Directors, as determined by the Board is Rs. 2000 for each meeting of the Board, Audit Committee, Independent Directors Committee, Nomination and Remuneration Committee and the Stakeholders Relationship Committee.
13. ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS
The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and meets the requirement of the Company.
14. DISCLOSURES:
i. Whistleblower Policy
The Company has a Whistleblower Policy to report genuine concerns and grievances. The same is explained in the Corporate Governance Report. The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Whistleblower Policy is also available on the Companyâs corporate websitehttp://www.mangalamdrugs. com/images/pdf/whistle-blower-policy.pdf
ii. Audit Committee
The Audit Committee as on March 31, 2016 comprises of the following Directors:
Mr. Subhash C Khattar - Chairman, Ms. Meenal Sukani- Independent Director and Mr. Govardhan M Dhoot- Managing Director. All the recommendations made by the Audit Committee were accepted by the Board. Detailed Information of the Audit Committee may be reviewed in Annexure II of the Report.
iii. Prevention of Sexual Harassment Policy
During the year 2015-2016, NIL complaints were received by the Company related to sexual harassment.
15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE
NIL
16. MATERIAL EVENTS AFTER BALANCE-SHEET DATE
On 10th June, 2016 the promoter group exercised their entitlement to convert the balance 1450000 warrants into equivalent number of equity shares as per the terms of issue and paid the balance price thereon. As a result of this, the issued, subscribed and paid up capital of the company has increased from Rs. 1437.82 lakhs to Rs. 1582.82 lakhs.
17. DIRECTORSâ RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, 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 and there are no material departures;
b) that 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 your 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 the Companies Act, 2013 for safeguarding the assets of your 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) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that, such systems were adequate and operating effectively.
18. AUDITORS AND AUDITORSâ REPORT
i. Secretarial Auditors
The Board, pursuant to section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any statutory modification(s) or re-enactment thereof, had during the year, appointed Mr. Ankit Sethi., Practising Company Secretary, to conduct secretarial audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is attached herewith marked as Annexure V to this report.
ii. Statutory Auditors
M/s. Milwani Associates, Chartered Accountants (Firm Registration Number:106405W), were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 41st AGM held on 29 September 2014 until the conclusion of 44th AGM to be held in the year 2017.Members are request to ratify their appointment for the financial 2016-17.
There are no qualifications in the audit report for financial year 2015-16.
iii. Cost Auditors
Pursuant to Section 148 of the Companies Act 2013 read with Cost Audit Rules thereunder the Company has maintained its cost records for auditing. M/s Ankit Kishore Chande have been appointed as Cost Auditors to audit the cost accounts maintained by the Company in respect of Bulk Drugs for the year ending March 31, 2016.
19. CORPORATE GOVERNANCE
As required by Regulation 34 read with schedule V of the Listing Regulations, a separate Report on Corporate Governance forms part of the Annual Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of the Listing Regulations forms a part of this Report as Annexure II.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing Regulations with the Stock Exchanges is annexed as Annexure III forming part of this Report.
21. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013,an extract of the annual return in the prescribed format is appended as Annexure IV to the Boards Report.
22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms-length basis. Note 34 to the Financial Statements covers the disclosure.
The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link:http://www.mangalamdrugs.com/images/pdf/rpt-policy.pdf
23. ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors are also grateful to the customers, suppliers and business associates of your Company for their continued cooperation and support. Your Directors wish to place on record their deep sense of appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year.
For and on behalf of the Board of Directors
sd
Shri. Govardhan M. Dhoot
Place: Mumbai Chairman & Managing Director
Dated: 01st August, 2016 DIN NO:01240086
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting to you their Forty - Second
Annual Report and the Company's audited financial statement for the
accounting year ended 31st March 2015.
1. FINANCIAL RESULTS
(Rs. In Lacs)
Particulars 2014-2015 2013-2014
Revenue from operations 22058.39 12251.61
Other Income 12.64 24.37
Profit before Finance Expenses, 2044.65 984.63
Depreciation & Amortizations
Less: Depreciation & Amortizations 415.40 401.05
Finance Expenses 1028.37 974.21
Profit / (Loss) before tax 600.88 (390.63)
Provision for Deferred Tax 13.24 (86.71)
Profit / (Loss) after tax 614.12 (303.92)
Balance b/f. from previous year (854.61) (550.69)
Balance carried to Balance Sheet (240.49) (854.61)
2. DIVIDEND
The company does not propose to declare any dividend this year in order
to conserve the profits of the Company.
3. STATE OF COMPANY AFFAIRS
The year under review saw a significant improvement in the performance
of your company which earned a total income of Rs.22071.03 Lacs as
compared to Rs.12275.98 Lacs in the previous year an increase of 80%.
The company has made a profit after tax of Rs. 614.12 Lacs as against
the loss of Rs.303.92 Lacs in the previous year. During the year under
review the company has achieved export sales of Rs.5787.85 Lacs as
against Rs.3718.65 Lacs in the previous year, an increase of 55.64%.
Constant efforts are being made to boost the exports..
4. FUTURE OUTLOOK
Although the global recessionary pressures continue to affect chosen
therapeutic segments, your company has been successful in further
augmenting its international market presence. It remains committed to
continuously deliver two molecules per quarter. Antihistamines and
antiretroviral APIs have been selected for development. It further
remains determined to file and obtain approvals for 4 additional DMFs
during next year. It is the robust regulatory strategy (11 DMFs
approved), the prudent partnering (critical process input sourcing) &
continuous resource restructuring are the factors which are going to
continue carving a brighter future for us. From a narrow product range
company in early 80's, MANGALAM has marched against aggressively to
create a niche for itself in Antimalarial and Antiretroviral drugs
helping to address relevant unmet therapeutic needs worldwide.
5. DEPOSIT
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on date of the balance sheet.
6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are provided in
Notes 10, 14 and 23 to the Financial Statements.
7. RISK MANAGEMENT
The Company has formulated a policy on Risk Management and the same is
detailed in the Corporate Governance Report. Risks are classified in
different categories such as Financial, Operational, Legal and
Strategic risks. These risks are reviewed from time to time and
controls are put in place with specific responsibility of the concerned
officer of the Company.
8. PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars as required under Section 134 of the Companies Act, 2013
relating to Conservation of Energy and Technology Absorption are also
provided in the Annexure Ito this Report.
9. PARTICULARS OF EMPLOYEE
The total number of employees as on 31st March, 2015 stood at 263.
There were Nil employees, who were employed throughout the year and
were in receipt of remuneration aggregating Rs. 60 lakhs or more or
were employed for part of the year and were in receipt of remuneration
aggregating Rs. 5 lakhs per month or more during the financial year
ended 31st March, 2015.
The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each director to the median
remuneration of the employees of the Company for the financial year:
Name of the Director/KMP Ratio to Median Remuneration
Mr. Goverdhan Murlidhar Dhoot 1.24
Mr. Subhash Khattar 0.06
Mr. Rajendra Mimani* 0.04
Ms. Meenal Sukhani* 0.02
Mr. Ajay Samant, CFO 2.10
*Since this information is for part of the year, the same is not
comparable.
b. The percentage increase in remuneration of each director, chief
executive officer, chief financial officer, company secretary in the
financial year:
Name of the Director/KMP % increase in remuneration in the
financial year
Mr. Goverdhan Murlidhar Dhoot NIL
Mr. Subhash Khattar 38.46
Mr. Rajendra Mimani 140* (Resigned on 02.02.2014)
Ms. Meenal Sukhani --
Mr. Ajay Samant, CFO 2.83
c. The percentage increase in the median remuneration of employees in
the financial year:
Median remuneration change is insignificant.
d. The number of permanent employees on the rolls of Company: 263
e. The explanation on the relationship between average increase in
remuneration and Company performance:
The remunerations have largely remained unchanged.
f. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
Aggregate remuneration of KMP in the 19.37
financial year 2015 (Rs. In lakh)
Revenue (Rs. In lakh) 22058.39
Remuneration of KMP (as % of Revenue) 0.09
PBT (Rs. In lakh) 600.88
Remuneration of KMP (as % of Revenue) 3.22
g. Variations in the market capitalisation of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year:
Particulars 2014-15 2013-14 % Change
Price Earning Ratio 5.69 (2.04) 378.92%
Market Capitalisation 349173354 62192386 461.44%
h. Percentage increase over decrease in the market quotations of the
shares of the Company in comparison to the rate at which the Company
came out with the last public offer:
Particulars March 31,2015 IPO (April 19, 2005) % Change
Market Price (BSE) 26.5 22 20.4546
Market Price (NSE) 26.5 22 20.4546
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
Average annual increase was around 2%
There is no exceptional increase in managerial remuneration.
j. Comparison of each remuneration of the key managerial personnel
against the performance of the Company:
Mr. Goverdhan Mr. Ajay Samant,
Murlidhar Dhoot CFO
Aggregate remuneration of KMP in 7.20 12.17
the financial year 2015
(Rs. In Lakhs)
Revenue (Rs. In lakh) 22058.39
Remuneration of KMP (as % of Revenue) 0.03 0.06
PBT (Rs. In lakh) 600.88
Remuneration of KMP (as % of PBT) 1.20 2.02
k. The key parameters for any variable component of remuneration
availed by the directors:
Nil.
l. The ratio of the remuneration of the highest paid director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year:
Ratio to average remuneration of such employees is 0.65.
m. Affirmation that the remuneration is as per the remuneration policy
of the Company:
The Company affirms remuneration is as per the remuneration policy of
the Company.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Mr. Rajendra Prasad Mimani an Independent
director stepped down from the Board. Your Board wishes to place on
record its deep sense of appreciation for the valuable contributions
made by him to the Board and the Company during his tenure as Director.
a) Mr. Govardhan M. Dhoot retires by rotation and being eligible,
offers himself for re-appointment. Further Mr. Dhoot's appointment as
wholetime director was valid till 31st October, 2015. Your Board after
necessary recommendation from the Nomination and Remuneration Committee
has re-appointed him as a Managing director and necessary proposal for
his reappointment is included in the Notice convening the AGM.
b) Ms. Meenal Sukhani was appointed as an additional director
non-executive with effect from 21st October, 2014.She was thereafter
appointed as an Independent Director pursuant to her furnishing
necessary declaration of independence as required under the Listing
Agreement. The Board of Directors approved her appointment as an
independent directoron 2nd May, 2015. In terms of Sections 149, 150,
152, other applicable and related provisions of the Companies Act, 2013
read with Rules made thereunder, retirement by rotation shall not apply
to Independent Directors.
c) Mr. Brijmohan Dhoot, was appointed as an additional director
Non-Executive on 02 May 2015. Your directors seek member's approval for
his appointment to the office of Non-Executive director liable to
retire by rotation.
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.
At the Board Meeting held on 31 October, 2014, Mr. Ajay Samant, VP
Finance was designated as Chief Financial Officer "Key Managerial
Personnel" of the Company pursuant to Sections 2(51) and 203 of the
Companies Act, 2013 read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
The Company was not able to appoint as a Company Secretary as is
required under section 203 and is in the process of finding a suitable
person to fill the position.
11. REMUNERATION POLICY
The remuneration policy, takes into account the circumstance of
business so as to attract and retain quality talent and leverage
performance significantly.
Remuneration of the Executive Directors is determined by the Board, on
the recommendation of the Nomination & Compensation Committee which is
subject to the approval of the Shareholders.
Non-Executive Directors are also entitled to sitting fees for attending
meetings of the Board and Committees thereof the quantum of which is
determined by the Board. The sitting fees payable toNon-Executive
Directors, as determined by the Board is Rs. 2000 for each meeting of
the Board, Audit Committee, Independent Directors Committee, Nomination
and Remuneration Committee and the Stakeholders Relationship Committee.
12. DISCLOSURES:
i. Whistleblower Policy
The Company has a Whistleblower Policy to report genuine concerns and
grievances. The same is explained in the Corporate Governance Report.
The practice of the Whistleblower Policy is overseen by the Audit
Committee of the Board and no employee has been denied access to the
Committee. The Whistleblower Policy is also available on the Company's
corporate websitehttp://www.mangalamdrugs.
com/images/pdf/whistle-blower-policy.pdf
ii. Audit Committee
The Audit committee was reconstituted on 16th April,2014 with Mr.
Rajendra Prasad Mimani(Independent Director), Mr. Subhash
Khattar(Independent Director)and Mr. Govardhan M. Dhoot(Executive
Director).
Mr. Rajendra Prasad Mimani resigned from his office on 2nd February,
2015 and the Audit committee was thereafter reconstituted with Ms.
Meenal Sukhani*(Non-Executive Director), Mr. Subhash
Khattar(Independent Director)and Mr. Govardhan M. Dhoot(Executive
Director). All the recommendations made by the Audit Committee were
accepted by the Board. Detailed Information of the Audit Committee may
be reviewed in Annexure II of the Report.
*Ms.Meenal Sukhani filed a declaration of her independence as required
under the Listing Agreement and the Board approved her appointment as
an Independent Director on 02 May, 2015.
iii. Prevention of Sexual Harassment Policy
During the year 2014-2015, NIL complaints were received by the Company
related to sexual harassment.
13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
AND COMPANY'S OPERATIONS IN FUTURE
NIL
14. MATERIAL EVENTS AFTER BALANCE-SHEET DATE
There are no material changes and commitments to report affecting the
financial position of the company which have occurred between the end
of the financial year of the company to which the financial statements
relate and the date of the report.
15. DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134 of the Companies Act, 2013, your
Directors confirm having:
a) Followed in the preparation of the Annual Accounts, the applicable
accounting standards with proper explanation relating to material
departures if any;
b) Selected such accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of your Company for
that period;
c) 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 your Company and for
preventing and detecting fraud and other irregularities;
d) Prepared the Annual Accounts on a going concern basis;
e) Laid down internal financial controls to be followed by your Company
and that such internal financial controls are adequate and were
operating effectively; and
f) Devised proper systems to ensure compliance with the provisions of
all applicable laws and that, such systems were adequate and operating
effectively.
16. AUDITORS AND AUDITORS' REPORT
i. Secretarial Auditors
Your Board, during the year, appointed Ms. Shalini Shrivastav,
Practising Company Secretary, to conduct secretarial audit of the
Company for the financial year 2014-15. The Secretarial Audit Report
for the financial year ended March31,2015 is attached herewith marked
as Annexure Vto this report.
The Company is yet to comply with Section 203 of the Companies Act 2013
regarding non appointment of Key managerial personnel- Company
Secretary and the process to fill this appointment is on.
ii. Statutory Auditors
M/s. Milwani Associates, Chartered Accountants (Firm Registration
Number:106405W), were appointed as the Statutory Auditors of the
Company to hold office from the conclusion of last AGM held on 29
September 2014 until the conclusion of 44th AGM to be held in the year
2017.Members are request to ratify their appointment for the financial
2015-16.
There are no qualifications in the audit report for financial year
2014-15.
Pursuant to Section 148 of the Companies Act 2013 read with Cost Audit
Rules thereunder the Company has maintained its cost records for
auditing. M/S Ankit Kishore Chande have been appointed as Cost Auditors
to audit the cost accounts maintained by the Company in respect of Bulk
Drugs for the year ending March 31, 2015.
iii. Cost Auditors
Pursuant to Section 148 of the Companies Act 2013 read with Cost Audit
Rules thereunder the Company has maintained its cost records for
auditing. M/S Ankit Kishore Chande have been appointed as Cost Auditors
to audit the cost accounts maintained by the Company in respect of Bulk
Drugs for the year ending March 31, 2015.
17. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance together with a certificate
from the Company's Auditors confirming compliance is set out in
Annexure II forming part of this Report.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the Listing
Agreement with the Stock Exchanges is annexed as Annexure III forming
part of this Report.
19. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013,an
extract of the annual return in the prescribed format is appended as
Annexure IV to the Boards Report.
20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were in the ordinary course of
business and on arms-length basis.Note 33 to the Financial Statements
covers the disclosure.
The policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the
link:http://www.mangalamdrugs.com/images/pdf/rpt-policy.pdf
21. ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and cooperation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your Directors are also grateful to the customers,
suppliers and business associates of your Company for their continued
cooperation and support. Your Directors wish to place on record their
deep sense of appreciation to all the employees for their commendable
teamwork and enthusiastic contribution during the year.
For and on behalf of the Board of Directors
Govardhan M. Dhoot
Place: Mumbai Chairman
Dated: 06th August, 2015 DIN NO:01240086
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting Forty - First Annual Report
and Audited Accounts for the accounting year ended 31st March 2014.
1 FINANCIAL RESULTS: (Rs. in Lacs)
2013-2014 2012-2013
Revenue from operations 12231.97 12525.87
Other Income 44.01 157.27
Profit before Finance Expenses,
Depreciation & Amortizations 984.63 (283.71)
Less: Depreciation & Amortizations 401.05 393.97
Finance Expenses 974.21 1002.24
Profit / (Loss) before tax (390.63) (1679.92)
Provision for Deferred Tax (86.71) (499.98)
Profit / (Loss) after tax (303.92) (1179.94)
Balance b/f. from previous year (550.69) 629.25
Balance carried to Balance Sheet (854.61) (550.69)
2. DIVIDEND:
In view of the loss incurred during the financial year ended March 31,
2014, no amount is transferred to the General Reserve and the directors
do not recommend any dividend on equity shares for the year ended March
31, 2014. (Previous Year: Rs. Nil)
3. REVIEW OF PERFORMANCE:
During the year under review, the Company earned a total income of Rs.
12,275.98 lacs as compared to Rs. 12,683.14 lacs made in the previous
year, a decrease of 3.21% than the previous year. The Company''s losses
have considerably reduced to Rs 303.92 lacs as against Rs 1179.94 lacs
in the previous year basically on account of new and innovative
improvements in process development of new dosage forms and drugs
delivery system, cost reduction etc. have resulted in improvement in
yield which in turn reduced losses considerably.
4. EXPORTS:
The Company has recorded exports sales of Rs. 3,718.65 lacs as against
export sales of Rs. 6,402.25 lacs made in the previous year. Constant
efforts are being made to boost exports.
5. FUTURE OUTLOOK:
In keeping with the glorious track record of yester years, your company
has been successful in augmenting its international market presence in
spite of global recessionary pressures. It remains committed to
continuously innovate and populate it''s development pipeline with two
molecules per quarter. It further remains determined to file and obtain
approvals for 5 additional DMFs during next two years. It is the robust
regulatory strategy, the prudent partnering & continuous resource
restructuring which are going to carve a brighter future for us.
6. RESEARCH & DEVELOPMENT :
As the global economy is on the path of recovery, our thrust continues
to be a research driven company. The R and D team comprising of 25
skilled scientists has developed several synthesis options for existing
as well as newer molecules. During the year under review, the company
has expanded its anti retroviral (AIDS) API portfolio which has an
established market demand. The company has filed Drug Master Files for
getting approval of WHO. The CSIR recognition to the R&D & presentation
of unique/specialty chemicals on its website have already placed
company''s research activity on the national and international map
resulting in the collaboration requests from reputed multinational
companies.
From a narrow product range company in early 80''s, MANGALAM has come a
long way and has created a niche for itself in Antimalarial and
Antiretroviral drugs helping to address relevant unmet therapeutic
needs worldwide. There is a constant effort to optimize, and recycle
all resources to minimize the effluent load on environment.
Finally, the R&D activity continues to support company''s standing as a
"one-stop" source of Antimalarials which have been prioritized by World
Health Organisation.
7. FIXED DEPOSIT:
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on date of the balance sheet.
8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
The information relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is given in Annexure ''I'' forming part of this Report.
9. PARTICULARS OF EMPLOYEES:
Section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, is not applicable
to the Company as no employee drawing remuneration exceeding the
prescribed limits.
10. DIRECTORS:
a) In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Govardhan M. Dhoot retires
by rotation and being eligible, offer himself for re-appointment.
b) In terms of Sections 149, 152, other applicable and related
provisions of the Companies Act, 2013 read with Rules made thereunder,
retirement by rotation shall not apply to Independent Directors. In
order to comply with the statutory requirements, your Independent
Directors, Mr. Subhash C. Khattar and Mr. Rajendra Prasad Mimani are
being recommended for appointment for a term upto five consecutive
years i.e. upto 31st March 2019, on a non-rotational basis.
11. DIRECTORS'' RESPONSIBILITY STATEMENT:
The Directors'' Responsibility statement as required under Section 217
(2AA) of the Companies Act, 1956 is given hereunder:
i) That in the preparation of the annual accounts for the year ended
31st March 2014 the applicable accounting standards has been followed.
There are no material departures from the applicable accounting
standards;
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 and of the
loss of the Company for that year;
iii) That the Directors had taken proper and sufficient care 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) That the Directors have prepared the annual accounts on a going
concern basis.
12. AUDITORS:
M/s. Milwani Associates, Chartered Accountants (Firm Registration
Number:106405W), who are Statutory Auditors of the Company will hold
office till the conclusion of the ensuing Annual General Meeting and
are recommended for re-appointment to audit the accounts of the Company
for the Financial Year 2014-15. As required under the provisions of
Section 139 of the Companies Act, 2013 the Company has obtained written
confirmation from M/s. Milwani Associates that their appointment, if
made, would be in conformity with the limits specified in the said
section.
13. COST AUDITORS :
Pursuant to the directives of the Central Government under the
provisions of section 233B of the Companies Act, 1956, necessary
application has been submitted to the Ministry of Corporate Affairs,
for the appointment of Mr. Ankit Kishore Chande as Cost Auditors to
audit the cost accounts maintained by the Company in respect of Bulk
Drugs for the year ending March 31, 2015.
14. CORPORATE GOVERNANCE:
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance together with a certificate
from the Company''s Auditors confirming compliance is set out in
Annexure ''II'' forming part of this Report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report as required under the Listing
Agreement with the Stock Exchanges is annexed as Annexure ''III'' forming
part of this Report.
16. INDUSTRIAL RELATIONS:
Cordial Industrial relations continued to prevail throughout the
financial year under review.
17. ACKNOWLEDGEMENT:
The Directors would like to express their grateful appreciation for the
assistance and cooperation received from the Financial Institutions,
Banks, Government Authorities and Shareholders during the year under
review. The Directors are also grateful to the customers, suppliers and
business associates of the Company for their continued cooperation and
support. The Directors wish to place on record their deep sense of
appreciation to all the employees for their commendable teamwork and
enthusiastic contribution during the year.
FOR AND ON BEHALF OF THE BOARD
Place: Mumbai GOVARDHAN M. DHOOT
Dated: 25th August 2014 CHAIRMAN
DIN: 01240086
Mar 31, 2013
To, The Members of MANGALAM DRUGS & ORGANICS LIMITED
The Directors have pleasure in presenting the Fortieth Annual Report
and Audited Accounts for the accounting year ended 31st March 2013.
1. FINANCIAL RESULTS: (Rs. in Lacs)
2012-2013 2011-2012
Revenue from operations 12525.87 15318.19
Other Income 157.27 95.40
Proft before Finance Expenses,
Depreciation & Amortizations (283.71) 1503.85
Less: Depreciation & Amortizations 393.97 373.64
Finance Expenses 1002.24 1016.43
Proft / (Loss) before tax (1679.92) 113.78
Provision for Current Tax 22.00
Provision for Deferred Tax (499.98) 28.42
Proft / (Loss) after tax (1179.94) 63.36
Balance b/f. from previous year 629.25 565.89
Balance carried to Balance Sheet (550.69) 629.25
2. DIVIDEND:
In view of the loss incurred during the fnancial year ended March 31,
2013, no amount is transferred to the General Reserve and the directors
do not recommend any dividend on equity shares for the year ended March
31, 2013. (Previous Year: Rs. Nil)
3. REVIEW OF PERFORMANCE:
During the year under review, the Company earned a total income of Rs.
12683.14 lacs as compared to Rs. 15413.59 lacs made in the previous
year, a decrease of 17.71%. The reason for decrease was mainly due to
Company being a pharma industry had witnessed slowdown in Global Fund
Financing and this lead to slowdown in orders to companies customers
which resulted them in putting on hold orders they had placed with the
company. On the other hand due to weak global scenario. Chinese
companies started dumping their products at cheap prices to reduce
their inventory levels and due to this our company was also forced to
reduce its prices and this had an impact on the proftability of the
company; vice versa during the year the company had also been affected
due to severe forex fuctuation whereby Rupee had depreciated by more
than 20% vis-a-vis US Dollar. All the above factors have put tremendous
pressure on the proftability of the Company due to which the company
made a loss of Rs. 1179.94 lacs after tax as compared to proft after
tax of Rs. 63.36 lacs made in the previous year. During the year under
review the company has been sanctioned restructuring of debt by
consortium of banks resulting in moratorium of repayments of term loan;
the liability of repayment commences from June 2014. Hence there is no
repayment of term loan for the fnancial year 2012-13 and 2013-14
respectively.
4. EXPORTS:
The Company has achieved exports sales of Rs. 6,402.25 lacs as against
export sales of Rs. 1,037.44 lacs made in the previous year. Constant
efforts are being made to boost exports.
5. FUTURE OUTLOOK:
In keeping with the innovative tradition of previous years, your
company remains committed to continuously populate it''s development
pipeline with a new molecule every quarter. During the year under
review, the company has developed anti- AIDS API''s which have a bright
future and a huge potential demand. The company is in the process of
preparing the drug master fle for getting approval of WHO for the same;
similarly three more bulk drugs namely Lamivudine, Efavirenz and
Nevirapine are under development at R&D. The CSIR recognition to the
R&D had already placed our research activity on the national map. Our
business partners have appreciated our efforts by sourcing their
requirements of speciality molecules like impurity and metabolites from
our R&D team. In devising most economical & ingenious routes toward
manufacture of our volume products has been strength of our bench
scientists,the regulatory department has been held in respect as a
''serial DMF fler''. It is the robust regulatory strategy & continuous
cost minimization which has helped your company to grow steadily
inspite of the trying market conditions of last two years.
6. RESEARCH & DEVELOPMENT:
As the global economy is on a path of recovery, our thrust continues to
be a research driven company. The backbone of progress and
diversifcation of every industry lies in its technological strength.
Low product costs and intellectual property are going to be the most
defnitive drivers in the international generics market.
From a one product company in 1977, today MANGALAM has build up a
diversifed range of products involving varied chemistry applications
which is achieved by our in-house technical strength. The work at the
research centres ensures that the company has a robust pipeline to feed
all the markets that the company operate in. The R&D team is engaged in
striving for world class quality standards for its various products.
Consistently the R&D division is mainly responsible for developing the
entire range of products in-house of the Company and has created
diffcult to-replicate molecules/ products involving innovative and
economically viable technologies at competitive costs. The company
driving a bold R&D strategy with the goal of delivering the next
generation of APIs that will provide better medicines for treatments
for many conditions and new hope for people with severe, unmet medical
needs. The R&D center has manpower strength of 25 persons.
There is constant effort to reduce, recycle and re-use all resources
for conservation and waste reduction,wherever feasible, new processes
and improvement,developed are scaled up in the companys pilot plant
facility.
Through development of new APIs, the R&D activity continues to support
your Company''s standing as a "one-stop"source of Antimalarials which
have been prioritized by World Health Organisation.The new-product
development pipeline has 3 new Molecules.
New Chemicals entity (NCE) generation activity has resulted in a panel
of novel compounds which shall be tested against Falciperum malarial
parasite.
7. FIXED DEPOSIT:
The Company has not accepted any public deposit and as such, no amount
on account of principal or interest on public deposit was outstanding
as on date of the balance sheet.
8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
The information relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is given in Annexure ''I'' forming part of this Report.
9. PARTICULARS OF EMPLOYEES:
Section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, is not applicable
to the Company as no employee drawing remuneration exceeding the
prescribed limits.
10. DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Rajendra Prasad Mimani
retires by rotation and being eligible, offer himself for
re-appointment
11. DIRECTORS'' RESPONSIBILITY STATEMENT:
The Directors'' Responsibility statement as required under Section 217
(2AA) of the Companies Act, 1956 is given hereunder:
(i) That in the preparation of the annual accounts for the year ended
31st March 2013 the applicable accounting standards has been followed.
There are no material departures from the applicable accounting
standards;
(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 fnancial year and of the
losses of the Company for that year;
(iii) That the Directors had taken proper and suffcient care 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) That the Directors have prepared the annual accounts on a going
concern basis.
12. AUDITORS:
M/s. Milwani Associates, Auditors of the Company hold offce until the
conclusion of the forthcoming Annual General Meeting and are eligible
for reappointment. Members are requested to appoint Auditors and to fx
their remuneration.
13. COST AUDITORS :
Pursuant to the direction of the Central Government that the cost
accounts maintained by the Company be audited by a Cost Auditor, the
Company has appointed Mr. Girish Krishna S. Maniar, Cost Accountants,
for conducting the cost audit for the Bulk Drugs business of the
Company for the fnancial year ending March 31, 2013. For the year
2010-2011 and 2011-2012, the Cost Auditor has duly fled the Cost Audit
Report. Pursuant to the provisions of section 233B of the Companies
Act, 1956, necessary application has been submitted to the Ministry of
Corporate Affairs, for the appointment of Mr. Ankit Kishore Chande as
Cost Auditors to audit the cost accounts maintained by the Company in
respect of Bulk Drugs for the year ending March 31, 2014.
14. CORPORATE GOVERNANCE:
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance together with a certifcate
from the Company''s Auditors confrming compliance is set out in Annexure
''II'' forming part of this Report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report as required under the Listing
Agreement with the Stock Exchanges is annexed as Annexure ''III'' forming
part of this Report.
16. INDUSTRIAL RELATIONS:
Cordial Industrial relations continued to prevail throughout the
fnancial year under review.
17. ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your Directors are also grateful to the customers,
suppliers and business associates of your Company for their continued
cooperation and support. Your Directors wish to place on record their
deep sense of appreciation to all the employees for their commendable
teamwork and enthusiastic contribution during the year.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai GOVARDHAN M. DHOOT
Dated : 23rd May, 2013 CHAIRMAN
Mar 31, 2012
To, The Members of MANGALAM DRUGS & ORGANICS LIMITED
The Directors have pleasure in presenting to you their Thirty nineth
Annual Report and Audited Accounts for the accounting year ended
31st March 2012
1. FINANCIAL RESULTS: (Rs. in Lacs)
2011-2012 2010-2011
Revenue from operations 15318.19 12738.49
Other Income 95.40 59.47
Profit before Finance Expenses,
Depreciation &
Amortizations 1503.86 1313.62
Less: Depreciation & Amortizations 373.64 327.30
Finance Expenses 1016.43 685.93
Profit before tax 113.79 300.39
Provision for taxation 22.00 58.00
Profit after tax 91.79 242.39
Provision for Deferred Taxation
for Current Year 28.42 33.55
Profit after Deferred tax 63.37 208.84
Balance b/f from previous year 565.90 357.06
Surplus available for Appropriation 629.27 565.90
Appropriations:
Balance carried to Balance Sheet 629.27 565.90
2. DIVIDEND:
Keeping in view the current economic scenario & future fund requirement
towards capital expenditure & expansion, your Directors do not
recommend any dividend for the financial year 2011-2012 (Previous Year:
Rs Nil)
3. REVIEW OF PERFORMANCE:
During the year under review the operating income of the Company has
increased by 19.70% from Rs. 13135.55 Lacs for 2010-11 to Rs. 15723.25
Lacs in 2011 -12. However, during the last 4-6 months Indian Rupee had
depreciated over 20% vis-a-vis US Doller.
Due to this foreign exchange volatility your company has incurred
foreign exchange transaction loss to the tune of Rs. 145 Lacs .Further
during the year your company had incurred additional cost towards
office rent to the tune of Rs. 52/- Lacs as your office building was
declared by BMC as unfit for occupation and your company was forced to
shift in Fort area. All the above factors have put tremendous pressure
on the profitability of the company due to which the operating profit
before tax has gone down from Rs. 300.39/-Lacs in 2010-2011 to Rs.
113.29/-Lacs in 2011 -2012.
4. EXPORTS:
The Company has achieved exports sales of Rs. 1037.44 lacs as against
export sales of Rs. 1120.61 lacs made in the previous year. Constant
efforts are being made to boost exports.
5. FUTURE OUTLOOK:
In line with any healthcare entity engaged in addressing the unmet
therapeutic needs in conjunction with protection of Stakeholder
interests; your company has revised its focus for the anticipated times
to emerge due to global economic slowdown. The global antimalarial
market has developed some unprecedented disturbances throughout the
supply chain and hence your company has chosen to develop certain
products in other segments like antiinfective and antihypertensive.
Having 6 approved DMFs with WHO and 6 more in various stages of
scrutiny throughout the global regulatory agencies, we have plans to
submit 3 DMF in Antiviral and anti-infective area.
6. RESEARCH & DEVELOPMENT: .
Your company has the Research and Development department (R & D) with
prestigious recognition from CSIR; the approval which was obtained in
last quarter 2011 subsequent to scrutiny by CSIR officials. Regulatory
affairs and Intellectual property rights cells continue to help the
synthesis efforts of R and D engaged in upgrading the existing
processes. There is constant effort to reduce, recycle and re-use all
resources for conservation and waste reduction, wherever feasible, new
processes and improvement, developed are scaled up in the company's
pilot plant facility. New product pipeline has 3 promising API
scheduled for piloting in every 3rd month. These APIs have very
impressive volumes in local market. The selection and timely
development of these APIs has been an outcome of close interaction with
marketing department. Your company has one of the most effective R and
D team comprised of 15 scientists responsive to extremely competitive
market.
7. FIXED DEPOSIT:
The Company has not accepted any fixed deposits from the public during
the year under review.
8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
The information relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is given in Annexure 'I' forming part of this Report.
9. PARTICULARS OF EMPLOYEES:
Section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, is not applicable
to the Company as no employee drawing remuneration exceeding the
prescribed limits.
10. DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Subhash C. Khattar retires
by rotation and being eligible, offer himself for re-appointment.
11. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors' Responsibility statement as required under Section 217
(2AA) of the Companies Act, 1956 is given hereunder:
(i) That in the preparation of the annual accounts for the year ended
31st March 2012 the applicable accounting standards has been followed.
There are no material departures from the applicable accounting
standards;
(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 and of the
profit of the Company for that year;
(iii) That the Directors had taken proper and sufficient care 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) That the Directors had prepared the annual accounts on a going
concern basis.
12. AUDITORS:
M/s.Milwani Associates, Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment. Members are requested to appoint Auditors and to fix
their remuneration.
13. COST AUDITORS:
The Central Government has approved the appointment of M/s. Giri
Krishna. S. Maniar cost accountants for conducting cost audit of the
Company for the financial year 2011 -12. For the year 2010-11 the cost
auditor has duly filed the cost audit report.
14. CORPORATE GOVERNANCE:
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance together with a certificate
from the Company's Auditors confirming compliance is set out in
Annexure 'II' forming part of this Report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report as required under the Listing
Agreement with the Stock Exchanges is annexed as Annexure 'III'
forming part of this Report.
16. INDUSTRIAL RELATIONS:
Cordial Industrial relations continued to prevail throughout the
financial year under review.
17. ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation for
the assistance and cooperation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your Directors are also grateful to the customers,
suppliers and business associates of your Company for their continued
cooperation and support. Your Directors wish to place on record their
deep sense of appreciation to all the employees for their commendable
teamwork and enthusiastic contribution during the year.
FOR AND ON BEHALF OF THE BOARD
Place . Mumbai GOVARDHAN M. DHOOT
Dated : 23rd July, 2012 CHAIRMAN
Mar 31, 2010
The Directors have pleasure in presenting to you their Thirty-Seventh
Annual Report and Audited Accounts for the accounting year ended 31st
March 2010
1. FINANCIAL RESULTS:
(Rs. in Lacs)
2009-20101 2008-2009
Sales 11229.22 10240.29
Other Income 46.60 37.19
Profit before Finance Expenses,
Depreciation & Amortizations 1113.78 945.62
Less : Depreciation & Amortizations 321.29 282.57
Finance Expenses 572.19 513.21
Profit before tax 220.30 149.84
Fringe Benefit Tax - 6.00
Provision for taxation 38.00 17.00
Profit after tax 182.30 126.84
Provision for Deferred Taxation
for Current Year 53.18 (41.51)
Profit after Deferred tax 129.12 85.33
Balance b/f from previous year 227.94 142.61
Surplus available for Appropriation 357.06 227.94
Appropriations:
Balance carried to Balance Sheet 357.06 227.94
2. DIVIDEND:
Keeping in view the current economic scenario & future fund requirement
towards capital expenditure & expansion, your Directors do not
recommend any dividend for the financial year 2009-10 (Previous Year:
Rs Nil)
3. REVIEW OF PERFORMANCE:
During the year under review, the Company made Sales of Rs. 11229.22
lacs as compared to Rs.10240.29 lacs made in the previous year, a
increase of 9.66% than the previous year. The Company made a profit
before tax of Rs. 220.30 lacs as compared to Rs. 149.84 lacs made in
the previous year, an increase of 47.02% than in the previous year.
4. EXPORTS:
The Company has achieved export sales of Rs.2047.52.Lacs an increase of
95.50% over the previous years exports of Rs. 1047.35 lacs. Constant
efforts are being made to boost exports.
5. FUTURE OUTLOOK:
In order to augment the regulatory focus, your company in addition to
Regulatory Affairs Cell has now established Intellectual Property
Rights (IPR) cell. The IPR cell shall ensure that all the products and
processes would be compliant to the Indians as well as the world IPR
norms.
The regulatory affairs cell has submitted 6 DMFs to WHO-Geneva out of
which 2 DMFs corresponding to Artemether and Lumefantrine have been
approved. Next year 8 more DMFs are planned for filing with EDQM and
WHO-Geneva.
6. RESEARCH & DEVELOPMENT:
Through development of new APIs, the R&D activity continues to support
your companys standing as a one-stop source of Antimalarials which
have been prioritized by World Health Organisation. The
new-product-development pipeline has 5 new molecules. New Chemical
Entity (NCE) generation activity has resulted in a panel of novel
compounds which shall be tested against Falciperum malarial parasite.
7. FIXED DEPOSIT:
The Company has not accepted any fixed deposits from the public during
the year under review.
8. ENERGY CONSERVATION,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO:
The information relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 is given in Annexure I forming part of this Report.
9. PARTICULARS OF EMPLOYEES:
Section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, is not applicable
to the Company as no employee drawing remuneration exceeding the
prescribed limits.
10. DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Rajendra Prasad Mimani
retires by rotation and being eligible, offer himself for
re-appointment. Mr. Mukul Sukhani resigned from the Directorship of the
Company effective May 29th 2010. The Directors place on record their
appreciation for valuable contributions made by him during tenure as
Director of the Company.
11. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors Responsibility statement as required under Section 217
(2AA) of the Companies Act, 1956 is given hereunder:
(i) That in the preparation of the annual accounts for the Year ended
31st March 2010 the applicable accounting standards have been followed.
There are no material departures from the applicable accounting
standards;
(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 and of the
profit of the Company for that year;
(iii) That the Directors had taken proper and sufficient care 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) That the Directors had prepared the annual accounts on a going
concern basis.
12. AUDITORS:
M/s. Milwani Associates, Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment. Members are requested to appoint Auditors and to fix
their remuneration.
13. CORPORATE GOVERNANCE:
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance togetherwith a certificate
from the Companys Auditors confirming compliance is set out in
Annexure II forming part of this Report.
14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report as required under the Listing
Agreement with the Stock Exchanges is annexed as Annexure III forming
part of this Report.
15. INDUSTRIAL RELATIONS:
Cordial Industrial relations continued to prevail throughout the
financial year under review.
16. ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation for
the assistance and cooperation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your Directors are also grateful to the customers,
suppliers and business associates of your Company for their continued
cooperation and support. Your Directors wish to place on record their
deep sense of appreciation to all the employees for their commendable
teamwork and enthusiastic contribution during the year.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai (GOVARDHAN M. DHOOT)
Dated : 29th May, 2010 Chairman
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