Mar 31, 2018
BOARD''S REPORT
To,
The Shareholders,
The Directors have pleasure in presenting the 37"â Annual Report of Mercury Laboratories Limited (the Company) on the business and operations of the Company together with the audited financial statements for the financial year ended on March 31,2018.
1. FINANCIAL SUMMARY/PERFORMANCE OF THE COMPANY
The financial performance of the Company for the financial year ended March 31,2018 along with figures of previous financial year is summarized below:
PARTICULARS |
(Rs. in Lacs) |
|
2017-18 |
2016-17 |
|
Revenue from Operations |
5240.46 |
5012.45 |
Gross Profit before Depreciation Interest & Tax |
483.73 |
707.49 |
Less: Interest |
90.69 |
89.21 |
Less: Depreciation |
147.45 |
128.85 |
Profit / (Loss) before Exceptional Items & Tax |
245.59 |
489.43 |
Exceptional Items |
- |
- |
Profit / (Loss) before Tax |
245.59 |
489.43 |
Less: Current Tax including Income Tax of Previous Year & Deferred Tax |
44.26 |
219.12 |
Profit/(Loss) from Continuing Operations |
201.33 |
270.31 |
Profit/(Loss) from discontinued operations |
- |
- |
Tax expense of discontinued operations |
- |
- |
Profit/(loss) from Discontinued operations (after tax) |
- |
- |
Profit / (Loss) for the Period |
201.33 |
270.31 |
Other Comprehensive Income |
||
A (i) Items that will not be reclassified to profit or loss |
- |
- |
A (ii) Income tax relating to items that will not be reclassified to profit or loss |
- |
- |
Total other comprehensive income (A (i - ii)) |
- |
- |
Total comprehensive income for the period |
201.33 |
270.31 |
*Easing Per Share |
||
Basic |
16.78 |
22.53 |
Diluted |
16.78 |
22.53 |
*Equity Shares are at par value of INR 10 per share.
2. First-time adoption of IND AS
The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01,2017 with transition date of April 01,2016. These financial statements for the year ended on March 31,2018 are the first financial statements the Company has prepared under Ind AS. For all periods up to and including the year ended March 31, 2017 the Company prepared its financial statements in accordance with the accounting standards notified under the Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).
The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended on March 31, 2018 together with the comparative information as at and for the year ended on March 31, 2017 and the opening Ind AS Balance Sheet as at April 01,2016 the date of transition to Ind AS.
3. Dividend:
Your Directors are pleased to recommend payment of dividend INR1.50 per equity share of face value of INR10 each for the year ended on March 31,2018 absorbing Rs. 21.70 Lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on September 14, 2018 after business hours. The dividend declared/recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Dividend Distribution Policy of the Company is set out as Annexure A
4. Transfer to Reserves:
The Company proposes to transfer Rs. 148 lacs to the General Reserve out of the amount available for appropriation and an amount of Rs.37.39 lacs is proposed to be retained in the Statement of Profit and Loss Account.
5. Financial Performance and Operations Review:
During the year under review, the Company yielded Revenue from operations of INR 5240.46 lacs and earned Gross Profit before depreciation, interest and tax of INR 483.73 lacs with Net Profit of INR 201.33 Lacs as against Revenue from operations of INR 5012.45, Gross Profit before depreciation and Interest and tax of Rs. 707.49 lacs with Net Profit of INR 270.31 Lacs of previous year, respectively.
6. Future Prospects:
Our world class GMP facility having manufacturing of tablet and liquid started giving returns. We got the accreditation of WHO-GMP from CDSCO. Our plant also visited by number of foreign Ministry like Ministry of Ghana, Ministry of Sri Lanka, Ministry of Cambodia and Sierra Leone. We also started preparation for getting accreditation of this plant for E.U GMP Malta as well as EU GMP Hungary. This will help us to enter in Regulatory Market in Europe, America, Latin America, Australia, New Zealand, South Africa.
Our company is continuously focusing to built up desired ethical market and to create world class brands Gravidol, K-Win, K-Stat, T-Stat, Cliarway, Zidust, Promolact, Ovaryl. We strongly believe that all these brands molecules will have effective therapeutic treatment for next 20 years. These molecules are mainly used for Mother & Child Healthcare segment.
Our company also focuses on creating institutional business with government institutions, semi-government institutions, hospitals and clinics by getting registered with Kerala, Rajasthan, Haryana & Karnataka Health Ministry and ESIC - Government of India to ensure that we achieve more business from these institutes.
Our company strongly believe high growth rate by entering into export business and achieve desirable growth for the year 2018-19. Our company has taken number of actions like addition of new area such as Cambodia, Peru, and Uruguay. However, some of the area we have restricted our exports such as Nigeria, Ghana, DRC Congo, due to instability and financial weakness in their economy. Management teams were generally optimistic on outlook for domestic Indian Markets with sales growth expected to be in the low double digits rebounding from GST led disruption. Our company continuously plan their strategy by implementing strategy to get more and more mileage in domestic as well as export market.
A better part of the past financial year was spent by the Indian Industries in coping with issues related to Goods and Service Tax (GST). Company had prepared for effectively implementing of GST as per the Act, Rule and their notification provided by Government of India from time to time and have recovered to a large extent. We expect number of hurdles will be further removed and business transaction will be made easy by introduction and implementation of GST.
MANAGEMENT DISCUSSIONS ANDANALYSIS
As stipulated by regulation 34(3) read with Schedule V(B) of the Listing Regulations, Management Discussion and Analysis forms parts of this report.
a) Industry Structure and Development
Our nation made number of changes in last 2 years and expect to change by creating message to common people that they get quality product with reasonable price. Government of India also ensures that all Indians must get medical treatments. They come out with number of supportive scheme in the healthcare segment which ultimate lead to health for all. Government''s participation to more generate business in the pharmaceutical to the large extent and we being part of this activity. This will continue to give future scope of expansion.
Since last 2-3 decades, science and technology has given tremendous inputs to health systems and improve the life of common people and extended life span of Indian upto 74 years as average life span. This may be possible because Indian Pharma Companies take challenges of Science and Technologies and new methods, re-engineering techniques. Indian companies introduced new molecules which are less harmful. The Pharma companies made products available in the remote places of our country.
b) Outlook, Risks and Concerns
Though in the world pharmaceutical market, India is ranked 3rd in volume, it has a negligible share by value and ranks 13th. Branded generics constitute 70% of Indian Pharmaceutical Market. Indian pharmaceutical market is considered to be highly fragmented and consolidation has become an important feature of this industry. Indian pharmaceuticals exports have increased from US$ 2 billion in 2006 to about US$ 17 billion in 2018. India has a huge pool of scientists and engineers who have potential to take this industry to a very high level growth.
Indian Pharmaceutical Industry is estimated to grow at 12% to 14% in 2018 - 2019.. The Government of India had unveiled âPharma Vision 2020â aiming at making India a global leader manufacturing. Many Indian companies are focusing on global generic and API emerging as preferred pharmaceuticals manufacturing location.
Several large selling drug going off patent over next few years and increasing use of generics over next few years. Increasing use of pharmaceutical generics in developed markets to reduce healthcare cost will provide attractive growth opportunities to generics manufacturers and thus Indian Pharmaceutical industry is poised for an accelerated growth in the coming years. However, poor public healthcare funding and infrastructure, low per capital consumption of medicines in developing and underdeveloped countries including India, currency fluctuations, regulatory issues, inflation and resultant all round increase in input costs are few causes of concern. Further the year witnessed huge volatility in global commodity market and foreign currencies. Disruption in domestics market continued in the form of GST implementation and price controls. Control measures undertaken by China, a key source raw material and intermediates for pharma industries have increased pressure on input cost. As an organization Company is continuously developing capabilities and competencies to cope with tough industry environment.
c) Financial Performance and Operation Review
During the year under review, the Company yielded Revenue from operations of INR 5240.46 lacs and earned Gross Profit before depreciation, interest and tax of INR 483.73 lacs with Net Profit of INR 201.33 Lacs as against Revenue from operations of INR 5012.45, Gross Profit before depreciation and Interest and tax of Rs. 707.49 lacs with Net Profit of INR 270.31 Lacs of previous year, respectively.
These regulatory issues continue to adversely impact the Company''s business. The Company''s business in the emerging markets also suffered due to significant currency fluctuations. The Company is implementing comprehensive remedial measures at all its manufacturing sites to ensure quality and regulatory compliances. These remedial measures included review of all processes and procedures revamping of training system, recruitment of senior quality personnel as well as automation of quality control laboratories. Your company is committed in resolving these issues at the earliest. The Company is also committed to its philosophy of highest quality in manufacturing, operations, system, integrity and GMP culture. Your management is confident that implementation of remedial measures will ensure that the company will regain all its regulatory approvals.
Rs. in Lacs
Break-up of Sales |
2017-18 |
2016-17 |
Growth / |
DE growth) |
In terms of Value |
In terms of % |
|||
Domestic |
3883.03 |
3597.07 |
285.96 |
7.95 |
Erga Sales |
123.32 |
115.84 |
7.48 |
6.46 |
Deemed Exports |
292.49 |
232.05 |
60.44 |
26.05 |
Direct Exports |
941.62 |
1067.48 |
(125.86) |
(11.79) |
Total |
5240.46 |
5012.44 |
228.02 |
4.55 |
During the financial year under report, the domestic sales of products of the Company amounted to INR 4298.84 lacs as against INR 3944.97 lacs in the previous year which reflect increase 8.97 % and in value INR 353.87 Lacs. Whereas the International Business (export) amounted to INR 941.62 Lacs as against INR 1067.48 lacs in the previous year which was decreased by 11.79% and in value INR 125.86 Lacs.
d) Internal Control System and its adequacy
The Company has adequate internal control system including suitable monitoring procedures commensurate with its size and the nature of the business. The internal control system provide for all documented policies, guidelines, authorization and approval procedures. The Company has an internal audit department which carries out audits throughout the year. The statutory auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit Committee of the Board. Further the Company has in place adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.
e) Human Resources
The human resources plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees across various locations. At the core of our success is our people and have been working towards keeping them engaged and inspired.
During the year under review, various trailing and development workshops were continued to be conducted to improve the competency level of employees with an objective to improve the operational performance of individuals. The company has built a competent team to handle challenging assignments. The Company strives to enhance the technical work, related and general skills of employees through dedicated training programs on a continuous basis.
The Company has 662 employees as on March 31,2018.
f) Formulation and Developments
Company always considering Formulation and Development as crucial for sustain growth of the company. Company always try to introduce newer and newer drugs delivery system for ensuring products available as regard to time and enhancing therapeutic value.
To achieve this objective we have experienced and qualified pharmacists whose activity is to maintain and find out newer and newer delivery system as well as re-engineering innovative process. This will help the company to maintain material consumption ratio.
g) Cautionary Statement
Certain statement in the management discussion and analysis may be forward looking within the meaning of applicable securities law and regulations and actual results may differ materially from those expressed or implied. Factors that would make differences to company''s operations include competition, price realization, Drugs Price Controls, FDC combinations, currency fluctuations, regulatory issues, changes in government policies and regulations tax regimes, economic development within India and the Countries in which the company conducts business and other incidental factors.
6. Directors" Responsibility Statement
Your Directors state that:
a. in the preparation of annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31,2018 and of the Profit of the Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a ââgoing concernâ basis;
e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
7. Directors and Key Managerial Personnel
During the year under review, following changes occurred in the position of Directors / KMPs of the Company:
a. Mr. Dilip Shah, Director of the Company who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The retirement of director by rotation at the ensuing Annual General Meeting is determined in accordance with the provisions of the Companies Act, 2013. The Company made application to central government for appointment of Mr. Dilip Shah as Whole Time Dirctor of the Company for a period of five year with effect from September 26,2016. Pending approval, Company considered retires by rotation at ensuing annual general meeting. The Central Government approval as and when received shall prevail.
Further all the independent directors of the Company have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the act and there has been no change in the circumstances which may affects their status as independent directors during the year.
b. The term of appointment of Mr. Rajendra R Shah as Managing Director is valid upto March 31, 2017. Board at its meeting held on January 31, 2017 approved appointment of Mr. Rajendra R Shah as Managing Director of the Company with effect from April 1,2017 for further period of 3 years.
c. During the year under review, the board of directors, on the recommendations of the Nomination and Remuneration Committee had appointed Mr. Paresh J Mistry as an additional director of the Company with effect from OctoberOI, 2017 subject to approval of the members in the ensuing Annual General Meeting.
Necessary resolutions for appointment /reappointment of the aforesaid directors and their detailed profiles have been included in the notice convening the ensuing AGM and details of proposal for appointment / reappointment are mentioned in the explanatory statement of the notice. Your directors commend their appointment/ re-appointment.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.
Key Managerial Personnel
1. Mr. Rajendra R Shah, Managing Director
2. Mr. Dilip R Shah, Whole Time Director (Approval is yet to receive from Central Government)
3. Ms. Payal Doshi, CFO (we.f. August 05,2016)
4. Mr. Mukesh Khanna, Company Secretary
8. Number of Meetings of the Board
Five Meetings of the Board were held during the year on May 19,2017, August 05,2017, August 18,2017, November 25, 2017 and January 27, 2018. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this report.
9. Policy on Directors âAppointment and Remuneration and other details
The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act, may be accessed on the Company''s website at the link: http://www.mercurylabs.com.
10. Board Evaluation
Pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the Director being evaluated.
The Board of Directors has carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, Information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.
11. Internal Financial Control Systems and their adequacy
The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
12. Audit Committee
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
13. Share Capital
The paid-up Equity Share Capital of the Company as at March 31,2018 is INR 120 Lacs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS.
14. Risk Management
The Board of the Company has formed a Risk Management Policy to frame, implement and monitor the risk management plan for the Company. The Audit Committee is reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
15. Safety, Environment and Health
The Company considers safety, environment and health as the management responsibility. Regular employee training programs are earned out in the manufacturing facilities on safety, environment and health.
16. Particulars of Loens, Guarantees or Investments
The Company has not provided any loans and guarantees and no investments made pursuant to Section 186 of the Companies Act, 2013 during the year under review.
17. Particulars of contracts or 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 an armâs length basis and in compliance of the provisions of Section 188 of the Companies Act, 2013 & rules made there under and Listing Agreement & SEBI (Listing Obligations and Disclosures Requirement) Regulation, 2015. The Company had not entered into any contract /arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company. The Policy dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http:AWw.rne rcuryiabs.com. All the related party transactions are placed before the Audit Committee as also Board for approval / ratification.
Prescribed form AOC - 2, pursuant to Section 134 (3) (h) of the Companies Act, 2013 & Rule 8(2) of the Companies (Accounts) Rules, 2014, is furnished as Annexure - B to this report.
18. Corporate Social Responsibility (CSR)
Though not mandatory in terms of Section 135 of Companies Act, 2013, the Company has formulated Corporate Social Responsibility (CSR) Policy in accordance with Section 135 of the Companies Act, 2013 and reconstituted CSR Committee with on Mey 14, 2015 with Mr. D. R. Zeveri and Ms. Poomima Karvat and Mr. Bharat Mehte, three independent directors and Mr. Rajendra R Shah, Managing Director and Dilip Shah, Director of the Company. However the Company has been pursuing CSR activities in the area of promotion of education in medical field by providing scholarship and other amenities to the medical students. The CSR policy of the Company is placed on the website of the Com pan v www.mercurvlabB.com.
19. Policy on prevention, prohibition and redressel of sexual harassment at work piece
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2017-18. The policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at work place is placed on website of the Company www.mencufYlabs.con).
20. Vigil Mechanisms/Whistle Blower Policy
The Company has adopted a Whistle B lower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy is posted on the website of the Companywww.mercurylabs.com.
21. Slgnlflcantand material orders passed by the regulators or courts.
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. However during the year under review, inspection of books of accounts and other records was carried out by Office of Regional Director, Western Region, Ministry of Corporate Affairs.
22. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule8of the Companies (Accounts) Rules, 2014, is annexed as Annexure C.
23. Particulars of Employees and Remuneration
Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, no employee of the Company was paid remuneration exceeding the prescribed limits, during the financial year 2017 -2018.
The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-C forming part of the Report. None of the employees listed in the said Annexure is related to any Director of the Company.
24. Auditors & Their Reports
(1) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s. R J Shah & Associates, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 36th Annual General Meeting (AGM) of the Company held on September 29,2017 till the conclusion of the 37th AGM to be held in the year 2018. M/s. R J Shah & Associates, Chartered Accountants is retiring at ensuing annual general meeting. The Board recommended for appointment of M/s. R J Shah & Associates as Chartered Accountant of the Company to hold office from conclusion of this ZT'' annual general meeting till conclusion of 40th annual general meeting to be held in the year 2022. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.
There are no qualifications or adverse remarks in the Auditors'' Report, which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation.
The Notes on accounts, referred to in the Auditor''s Report, are self-explanatory and therefore do not call for any further comments.
(2) Secretarial Auditors:
Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Board of Directors of the Company had appointed M/s. Mitesh Rana & Co. a firm of Company Secretaries to carry out Secretarial Audit for the year ended on March 31,2018. The Secretarial Audit Report is annexed as Annexure-E.
The Auditorsâ Report and the Secretarial Audit Report for the financial year ended March 31,2018 do not contain any qualification, reservation, adverse remark or disclaimer.
The Company has complied with the provisions of Secretarial Standards on Board Meetings and General Meetings issued by the Institute of Company Secretaries of India and approved by the Central Government.
(3) Cost Auditors:
Pursuant to the provisions of Section 148 read with Companies (Cost Records and Audit) Amendment Rules, 2014 and as recommended by the Audit Committee, the Board had appointed M/s. Jeegar Patel & Co., (FRN 103686), Cost Accountants to conduct the audit of cost records of the Company for the Financial Year 2018-19. Mr. Jeegar Patel had confirmed that his appointment met the requirements of Section 141 (3)(g) of the Act and that he was free from disqualification as specified under section 141 read with Section 148oftheAct.
In terms of Rule 14 of the Companies (Audit and Auditors) Rule, 2014, remuneration payable to the cost auditors is required to be ratified by members. Accordingly an ordinary resolution will be passed by members at the 37* Annual General Meeting approving the remuneration payable to Mr. Jeegar Patel & Co.
25. Deposits
The Company has no unpaid and/or unclaimed deposit. The Company has accepted deposit from Directors and their relatives, the Shareholders and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.
Particulars |
Amt. in Rs. |
Accepted during the year from the Directors and members* |
139.65 |
Remained unpaid or unclaimed as at the end of the year |
None |
Whether there has been any default in repayment of deposits or payment of interest there on during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year |
None |
-Deposit accepted during the year are from directors of the company.
26. Extract of Annual Return
As provided under Section 92(3) of Ihe Act, the extract of annual return is given in Annexure-F in the prescribed Form MGT-9, which forms part of this report.
27. Material Change & Commitments, if any
There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of director''s report.
28. Corporate Governance Report
As stipulated by Regulation 34(3) read with Schedule V(C) of the Listing Regulations, Corporate Governance Report forms part of this Annual Report Annexed to the said report is the Auditor''s Certificate as prescribed under Schedule V(E)of the Listing Regulations certifying compliance with conditions of corporate governance.
29. Acknowledgment
The Board of Directors wish to place on record their appreciation for the continued support extended by the Bankers, Business Associates, clients, vendors and suppliers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company.
Place: Vadodara On behalf of the Board of Directors,
Date: May28,2018 Rajendra R. Shah
Chairman & Managing Director
DIN:00257253
Mar 31, 2016
6. Directors" Responsibility Statement
The Directors state that:
a. in the preparation of annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31,2016 and of the Profit of the Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a "going concern" basis;
e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
7. Directors and Key Managerial Personnel
During the year under review, following changes occurred in the position of Directors / KMPs of the Company:
a. Dr Dinesh S Shah and Dr. Tushar P Shah resigned as Directors of the Company on May 14,2015 due to their pre-occupations.
b. Mr Bharat Dhirajlal Mehta was appointed as an Independent Director in casual vacancy caused on resignation of Dr. Dinesh Shah with effect from May 14,2015.
c. Ms. PoornimaDhirendraKarvatwas confirmed as an Independent Woman Director of the Company at the Annual General Meeting of the Company held on September 25, 2015, The terms and conditions of her appointment as an Independent Woman Director is as per schedule IV of the Companies Act, 2013.
d. Mr. Dilip Shah, Director of the Company who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The retirement of director by rotation at the ensuing Annual General Meeting is determined in accordance with the provisions of the Companies Act, 2013.
Further all the independent directors of the Company have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the act and there has been no change in the circumstances which may affects their status as independent directors during the year.
e. Ms, Priyanka Doshi, CFO of the Company, has resigned from the Company with effect from June 23,2016.
f. Ms. Payal Doshi is appointed as Chief Finance Officer of the Company with effect from August 05,2016.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.
8. Number of Meetings of the Board
Four Meetings of the Board were held during the year on May 14, 2015, July 31, 2015, November 02, 2015 and February 09,2016. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this report.
9. Policy on Directors âAppointment and Remuneration and other details
The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act, may be accessed on the Company''s website at the link: http://www.mercurylabs.cam.
10. Board Evaluation
Pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the Director being evaluated.
The Board of Directors has carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition & structure, effectiveness of board processes, Information and fu motioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the Issues to be discussed, meaningful and constructive contribution and inputs In meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.
11. Internal Financial Control Systems and their adequacy
The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.
12. Audit Committee
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
13. Share Capital
The paid-up Equity Share Capital of the Company as at March 31, 2016 is Rs. 120 Lacs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS
14. Risk Management
The Board of the Company has formed a Risk Management Policy to frame, implement and monitor the risk management plan for the Company. The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
15. Safety, Environment and Health
The Company considers safety, environment and health as the management responsibility. Regular employee training programs, are carried out in the manufacture facilities on safety, environment and health.
16. Particulars of Loans, Guarantees or investments
The Company has not provided any loans and guarantees and no investments made pursuant to Section 186 of the Companies Act, 2013.
17. Particulars of contracts or 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 an arm''s length basis and in compliance of the provisions of Section 186 of the Companies Act, 2013 & rules made there under and Listing Agreement & SEBI (Listing Obligations and Disclosures Requirement) Regulation, 2015. The Company had not entered into any contract /arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company. The Policy dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.mercurylabs.com. All the related party transactions are placed before the Audit Committee as also Board for approval.
Prescribed form AOC - 2, pursuant to Section 134 (3) (h) of the Companies Act, 2013 & Rule 8(2) of the Companies (Accounts) Rules, 2014, is famished as Annexure-A to this report
18. Corporate Social Responsibility (CSR)
Though not mandatory in terms of Section 135 of Companies Act, 2013, the Company has formulated Corporate Social Responsibility (CSR) Policy in accordance with Section 135 of the Companies Act, 2013 and reconstituted CSR Committee with on May 14, 2015 with Mr. D. R. Zaveri and Ms. Poomima Karvat and Mr. Bharat Mehta, three independent directors and Mr. Rajendra R Shah, Managing Director and Dilip Shah, Director of the Company. However the Company has been pursuing CSR activities in the area of promotion of education in medical field by providing scholarship and other amenities to the medical students. The CSR policy of the Company is placed on the website of the Companywww.mercurylabs.com.
19. Policy on prevention, prohibition and redressal of sexual harassment at workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2015-16. The policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at work place is placed on website of the Companywww.mercuryiabs.com.
20. Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy is posted on the website of the Companywww.mercurylabs.com.
21. Significant and material orders passed by the regulators or courts.
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
22. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as Annexure B.
23. Particulars of Employees and Remuneration
Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, no employee of the Company was paid remuneration exceeding the prescribed limits, during the financial year 2015 -2016.
The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-C forming part of the Report. None of the employees listed in the said Annexure is related to any Director of the Company.
24. Auditors & Their Reports
(1) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s. Naresh & Co, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 33⢠Annual General Meeting (AGM) of the Company held on September 30, 2014 till the conclusion of the Sfi AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.
There are no qualifications or adverse remarks in the Auditors'' Report, which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation.
The Notes on accounts, referred to in the Auditorâs Report, are self explanatory and therefore do not call for any further comments.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Mitesh Rana & Co, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended March 31,2016. The Secretarial Audit Report is annexed as Annexure-D.
Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Board of Directors of the Company had appointed M/s. Mitesh Rana & Co. a firm of Company Secretaries to carryout Secretarial Audit for the year to be ended on March 31,2017.
The Auditors" Report and the Secretarial Audit Report for the financial year ended March 31,2016 do not contain any qualification, reservation, adverse remark or disclaimer.
25. Deposits:
The Company has no unpaid and I or unclaimed deposit. The Company has accepted deposit from Directors and their relatives, the Shareholders and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.
The details relating to deposits, covered under Chapter V of the Act are as under:
Particulars |
Amt. in Rs. |
Accepted during the year from the Directors and members |
174.32 |
Remained unpaid or unclaimed as at the end of the year |
None |
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year; |
None |
26- Extract of Annual Return
As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure-E in the prescribed Form MGT-9, which forms part of this report.
27. Material Change & Commitments, If any
There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of director''s report.
28. Acknowledgment
The Board of Directors wish to place on record their appreciation for the continued support extended by the Bankers, Business Associates, clients, vendors and suppliers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company.
Place: Vadodara, On behalf of the Board of Directors,
Date: August 05,2016 Rajendra R. Shah
Chalrman&Managing Director
Mar 31, 2015
Dear Members,
The Directors are pleased to present the 34th Annual Report and the
Company's audited financial statement for the financial year ended
March 31,2015.
(Rs. in Lacs)
1. Financial Results: 2014-15 2013-14
Gross Income 4231.20 4208.56
Gross Profit before Depreciation Interest & 690.15 715.40
Tax
Less: Interest 111.60 146.82
Less: Depreciation 118.06 89.27
Add/(Less) :
Prior period Adjustment - Net - 15.00
Less: Current Tax & Deferred Tax 129.15 157.15
Net Profit 331.34 322.16
Balance as per last P&L A/c. 1.53 1.29
Profit available for appropriation 332.87 323.45
This profit has been appropriated as under
(i) Proposed Dividend 18.00 18.00
(ii) Income Tax on proposed dividend 3.05 2.92
(iii) Transfer to General Reserve 309.00 301.00
(iv) Balance carried to next year 2.82 1.53
Total 332.87 323.45
2. Dividend:
Your Directors are pleased to recommend payment of dividend @ 15% (Rs.
1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the
year 2014-2015 absorbing Rs. 21.05 Lacs including Tax on Dividend,
which will be, if approved, paid to the Shareholders holding shares as
on 25th September, 2015, after business hours.
3. Transfer to Reserves:
The Company proposes to transfer Rs. 309 lacs to the General Reserve
out of the amount available for appropriation and an amount of Rs.2.82
lacs is proposed to be retained in the statement of Profit and Loss
account.
4. Financial Performance and Operations Review:
During the year under review, the Company yielded Gross Income of Rs.
4231.20 lacs and earned Gross Profit before depreciation, interest and
tax of Rs. 690.15 lacs with Net Profit of Rs. 331.34 Lacs as against
Gross Income of Rs. 4208.56 lacs, Gross Profit before depreciation and
Interest and tax of Rs. 715.40 lacs with Net Profit of Rs. 322.16 Lacs
of previous year, respectively, registering modest growth in Gross
income and in Net Profit, as compared to previous year.
5. Future Prospects:
Your company has created new world class GMP facility for all its
liquids and tablets confirming requirement of WHO. The Company has
increased its manufacturing capacity for tablets and liquids by four
folds keeping in view the projected growth plans.
The Company has been now focusing more on strategy implementation and
follow up action to achieve the desired growth plan in ethical
Marketing. The Company is ensuring its products availability in all
comer of country by increasing C&F agents. With a view to create more
ethical market, the Company has introduced various new drugs such as
Teclobet, Tanolite, Clinzit, Clinzita- A, Levotryl Tablet, Levotryl-M
Tablet, Levotryl Syrup, THA-4, THA-8, Pyloryl, Pangs At, Feveryl Drops,
Feveryl Suspension in its Mother Child Care specialized Segment. On
other side, your Company has established Institutional Business with
Government institutions, Semi Government and Hospitals & Clinics. This
division of the Company, is also focusing more on strategy
implementation and achieving higher growth.
The Company has been putting its major thrust on Export and has set
higher objective of achieving 20% growth during the financial year
2015-16 with addition of new, more clients and cover new countries such
as Latin America, Philippines, South Sudan, Tanzania, Zimbabwe, Zambia
to name a few in addition to existing client countries such as Nigeria,
Congo, Ghana, Burma, Sri Lanka, Gautmala, Costa-de rica, etc.
The Company has been following its well planned strategy of deriving
maximum mileage on domestic market, more particularly on ethical
business, effectively and aggressively penetrating the domestic and
export market, exercising regular and strong follow up over Marketing
distribution net work and channels, strengthening its new institutional
business of supplying products to government / semi- government
institutions in the Country, with an objective to continue to excel
well. With these, the Board is confident that this would result into
substantial growth in the business revenue, barring unforseen
circumstances.
6. Directors' Responsibility Statement
Your Directors state that:
a. in the preparation of annual accounts for the year ended March 31,
2015, the applicable accounting standards read with requirements set
out under Schedule III to the Act, have been followed and there are no
material departures from the same;
b. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at March 31, 2015 and of the Profit of the Company for
the year ended on that date;
c. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the this Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a 'going
concern' basis;
e. the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
7. Directors and Key Managerial Personnel
During the year under review, following changes occurred in the
position of Directors / KMPs of the Company:
a. Pursuant to the provisions of Section 149 of the Act, Dr. Dinesh S.
Shah, Dr. Tushar P. Shah, Mr. Divyakant R. Zaveri were appointed as
Independent Directors at the Annual General Meeting of the Company held
on 30th September, 2014. The terms and conditions of appointment of
independent directors are as per Schedule IV of the Act. They have
submitted a declaration that each of them meets the criteria of
independence as provided in Section 149(6) of the Act and there has
been no change in the circumstances which may affect their status as
independent directors during the year.
b. Mr. Mukesh M. Khanna has been appointed as the Company Secretory &
Compliance Office of the Company effective from 26th July, 2014.
c. Mrs. Poornima Dhirendra Karvat was appointed as a Woman Independent
Director with effect from 30th March, 2015 in the nature of additional
Director and pursuant to the provisions of Section 161 of the Companies
Act, 2013, she holds office upto the ensuing Annual General Meeting.
Being eligible, she has offered herself for appointment as an
Independent Director of the Company.
d. Ms. Priyanka Doshi, has been appointed as Chief Financial Officer
(CFO) of the Company in place of Mr. Haresh G. Shah who resigned as the
CFO of the Company, effective from 31st March, 2015.
During the year, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company.
Events occurring after balance sheet date - change in directorate / KMP
e. Dr. Dinesh S. Shah and Dr. Tushar P. Shah resigned as Directors of
the Company on 14th May, 2015 due to their other pre-occupations.
f. Mr. Bharat Dhirajlal Mehta, was appointed as an Independent
Director in casual vacancy caused on resignation of Dr. Dinesh S. Shah,
with effect from 14th May, 2015.
8. Number of Meetings of the Board
Eight Meetings of the Board were held during the year on 3rd April,
2014, 26th April, 2014,15th May, 2014,26th July, 2014, October, 2014,
27th January, 2015, 11th February, 2015 and 30th March, 2015. For
details of the meetings of the Board, please refer to the Corporate
Governance Report, which forms part of this report.
9. Policy on Directors'Appointment and Remuneration and other details
The Company's policy on directors' appointment and remuneration and
other matters provided in Section 178(3) of the Act, may be accessed on
the Company's website at the link: http://www.mercurylabs.com.
10. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance, Board committees and Individual Directors pursuant to the
provisions of the Act and the Corporate Governance requirements as
prescribed by Securities and Exchange Board of India ("SEBI") under
Clause 49 of the Listing Agreements ("Clause 49").
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning etc.
The performance of the Committees was evaluated by the Board after
seeking inputs from the Committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC")
reviewed the performance of the Individual Directors on the basis of
the criteria such as the contribution of the individual director to the
Board and committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings, etc. In addition, the Chairman was also evaluated on the key
aspects of his role.
In a separate meeting of independent Directors, performance of
non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the
views of executive directors and non-executive directors. The same was
discussed in the board meeting that followed the meeting of the
independent Directors, at which the performance of the Board, its
committees and individual directors was also discussed.
11. Internal Financial Control Systems and their adequacy
The details in respect of internal financial control and their adequacy
are included in the Management Discussion & Analysis, which forms part
of this report.
12. Audit Committee
The details pertaining to composition of audit committee are included
in the Corporate Governance Report, which forms part of this report.
13. Share Capital
The paid-up Equity Share Capital of the Company as at 31st March, 2015
is Rs. 120 Lacs. The Company currently has no outstanding shares issued
with differential rights, sweat equity or ESOS.
14. Risk Management
The Board of the Company has formed a Risk Management Policy to frame,
implement and monitor the risk management plan for the Company. The
Audit Committee is responsible for reviewing the risk management plan
and ensuring its effectiveness. The Audit Committee has additional
oversight in the area of financial risks and controls. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis.
15. Safety, Environment and Health
The Company considers safety, environment and health as the management
responsibility. Regular employee training programs, are carried out in
the manufacturing facilities on safety, environment and health.
16. Particulars of Loans, Guarantees or Investments
The Company has not provided any loans and guarantees and no
investments made pursuant to Section 186 of the Companies Act, 2013.
17. Particulars of contracts or 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 an arm's length basis. During the year, the
Company had entered into contract with Mercury Antibiotics Pvt. Ltd.,
for availing the building and plant and machinery on lease for a period
of 3 years on lease rent of Rs.54 Lacs per annum. The Company has also
entered in to contract with Mercury Marketing & Consultancy Services
(MMCS) for availing services of the professionals retained by MMCS, for
a period of 3 years on fees of Rs.24 Lacs per annum. The Company had
not entered into any contract /arrangement / transaction with related
parties which could be considered material in accordance with the
policy of the Company. The Policy dealing with related party
transactions as approved by the Board may be accessed on the Company's
website at the link: http://www.mercurylabs.com.
Prescribed form AOC - 2, pursuant to Section 134 (3) (h) of the
Companies Act, 2013 & Rule 8(2) of the Companies (Accounts) Rules,
2014, is furnished as Annexure - A to this report.
18. Corporate Social Responsibility (CSR)
Though not mandatory in terms of Section 135 of Companies Act, 2013,
the Company has formulated Corporate Social Responsibility (CSR) Policy
in accordance with Section 135 of the Companies Act, 2013 and
constituted CSR Committee with Dr. Tushar Shah, Dr. Dinesh Shah and Mr.
D.R. Zaveri, three Independent Directors with Mr. Rajendra R. Shah,
Managing Director of the Company. Dr. Tushar Shah was the Chairman of
the CSR Committee.
The CSR Committee was re-constituted by the Board of Directors of the
Company on 14th May, 2015 with Ms. Poornima Karvat and Mr. Bharat Mehta
as members in place of Dr. Tushar Shah, Dr. Dinesh Shah.
However the Company has been pursuing CSR activities in the area of
promotion of education in medical field by providing scholarship and
other amenities to the medical students.
The CSR policy of the Company is placed on the website of the Company
www.mercurvlabs.com.
19. Policy on prevention, prohibition and redressal of sexual
harassment at workplace.
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
Harassment at the Workplace, in line with the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the Rules there under. The Policy aims to
provide protection to employees at the workplace and prevent and
redress complaints of sexual harassment and for matters connected or
incidental thereto, with the objective of providing a safe working
environment, where employees feel secure. The Company has also
constituted an Internal Complaints Committee, known as the Prevention
of Sexual Harassment (POSH) Committee, to inquire into complaints of
sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during
the financial year 2014- 15. The policy on Prevention, Prohibition and
Redressal of Sexual Harassment of Women at work place, is placed on
website of the Company www.mercurylabs.com.
20. Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Whistle Blower Policy, to provide a formal
mechanism to the Directors and employees to report their concerns about
unethical behavior, actual or suspected fraud or violation of the
Company's Code of Conduct or ethics policy. The Policy provides for
adequate safeguards against victimization of employees who avail of the
mechanism and also provides for direct access to the Chairman of the
Audit Committee. It is affirmed that no personnel of the Company has
been denied access to the Audit Committee. The Whistle Blower Policy is
posted on the website of the Companywww.mercurylabs.com.
21. Significant and material orders passed by the regulators or
courts.
No significant material orders have been passed by the Regulators or
Courts or Tribunals which would impact the going concern status of the
Company and its future operations.
22. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)
(m) of the Act read with Rule 8 of The Companies (Accounts) Rules,
2014, is annexed as Annexure B.
23. Particulars of Employees and Remuneration
Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, no employee of the Company
was paid remuneration exceeding the prescribed limits, during the
financial year 2014 - 2015.
The information required under Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is provided in
the Annexure-C forming part of the Report. None of the employees listed
in the said Annexure is related to any Director of the Company.
24. Reply to Remark made by the Auditors:
With reference to remark made by of the Auditors in their Report under
"Other Matter", as briefed in Note-19, Rs. 53,17,983/-, the amount of
Debtors outstanding for more than One year, is not considered doubtful
by the Management, in view of part of them is already received and as
per the assurance given, balance is likely to be received by the
Company, in phased manner.
25. Auditors
(1) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules
framed thereunder, M/s. Naresh & Co, Chartered Accountants, were
appointed as statutory auditors of the Company from the conclusion of
the 33rd Annual General Meeting (AGM) of the Company held on September
30,2014 till the conclusion of the 36th AGM to be held in the year
2017, subject to ratification of their appointment at every AGM. The
Company has received letter from them to the effect that their
appointment, if made, would be within the prescribed limits under
Section 141 (3)(g) of the Companies Act, 2013 and that they are not
disqualified from appointment.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board of Directors of the Company had appointed M/s. Jayesh Vyas &
Associates, a firm of Company Secretaries in Practice to undertake the
Secretarial Audit of the Company for the year ended March 31,2015. The
Secretarial Audit Report is annexed as Annexure-D.
The Auditors' Report and the Secretarial Audit Report for the financial
year ended March 31,2015 do not contain any qualification, reservation,
adverse remark or disclaimer.
26. Deposits:
The Company has no unpaid and / or unclaimed deposit. The Company has
accepted deposit from Directors and their relatives, the Shareholders
and has complied with all applicable provisions of the Companies Act
relating to acceptance and renewal of deposits.
The details relating to deposits, covered under Chapter V of the Act
are as under:
Particulars Amt. in Rs.
Accepted during the year from the Directors and members 192.64
Remained unpaid or unclaimed as at the end of the year None
Whether there has been any default in repayment of
deposits or payment of interest thereon during the year
and if so, number of such cases and the total amount
involved (i) at the beginning of the year;(ii) maximum
during the year; and (iii) at the end of the year; None
27. Extract of Annual Return
As provided under Section 92(3) of the Act, the extract of annual
return is given in Annexure-E in the prescribed Form MGT-9, which forms
part of this report.
28. Material Change & Commitments, if any
There is no material changes and commitments, that would affect
financial position of the company from the end of the financial year of
the company to which the financial statements relate and the date of
the directors report.
29. Acknowledgment
The Board of Directors wish to place on record their appreciation for
the continued support extended by the Bankers, Business Associates,
clients, vendors and suppliers, Government Authorities, Employees at
all levels and Stakeholders, in furthering the interest of the Company.
Place: Vadodara, On behalf of the Board of Directors,
Date: 31st July, 2015
Rajendra R. Shah
Chairman& Managing Director
Mar 31, 2014
Dear Members,
Outlook of Pharmaceutical Industry:
The year 2013-14 has been a dynamic year for Pharmaceutical Industry
due to lot of changes that took place in Drugs & Cosmetics Act, DPCO,
Companies Act.
The Indian Pharmaceutical Industry, being sunrise industry since
liberalization of 1992, witnessed CAGR Growth of 9% from theyear2000 to
2005 and subsequently 13% growth from the year 2005 to 2013. Itis
projected that this growth will prolong continuously with same speed
with CAGR 13% to 14% from the year 2015 to 2020.
Today, the Pharma Industry is doing business of 12,000 billion USD in
domestic market, which is expected to be increased to 35 billion to 55
billion USD in coming period of five years from the year 2020.
The urban market share is 80%-85% while rural market share is 15%-20%.
There is a upward trend and is potential to increase in rural market
due to :
(a) Government has allocated 29000 crores for the healthcare plan
during this financial year
(b) Gross income increase of middle and lower class
(c) Due to introduction of DPCO 2013, some of the products-life saving
drugs reduced and assessable for poor people.
(d) The government policy to encourage domestic as well as export of
the pharmaceutical products, this support will definitely help
pharmaceutical industries to grow faster and newer heights.
The developed country provide healthcare at optimum and the market for
further growth are limited while developing countries such as China,
India, Brazil, Russia, South Africa have potentials growth path due to
driven by rapid urbanization, greater economical development. Rural
markets will grow the fastest driven by step-up from current poor level
of penetration and healthcare infrastructure will also increase. This
will lead Indian Pharmaceutical Industry to No. 2 Position in volume in
production by 2020.
In the backdrop of such congenial environment, Your company has been
growing fast, too with its strategic planning and proper penetration in
both domestic and export markets as evidenced from the financial
performance achieved during the financial year 2013-14.
The following figures summaries the financial performance of the
Company during the year under review.
1. Financial Results: (Rs. in Lacs) (Rs. in Lacs)
2013-14 2012-13
Gross Income 4208.56 3418.03
Gross Profit before Dep. Int.&Tax 700.40 446.30
Less: Interest 146.82 41.15
Less: Depreciation 89.27 32.16
Add/(Less) : Â Â
Prior period Adjustment- Net 15.00 (9.30)
Less: Current Tax & Deferred Tax 157.15 128.31
Net Profit 322.16 253.98
Balance as per last P&LA/c. 1.29 1.23
Profit available for appropriation 323.45 255.21
This profit has been appropriated  Â
as under
(I) Proposed Dividend 18.00 18.00
(ii) Income Tax on proposed dividend 2.92 2.92
(iii) Transfer to General Reserve 301.00 233.00
(iv) Balance carried to next year 1.53 1.29
Total 323.45 255.21
2. Dividend:
Your Directors are pleased to recommend payment of dividend @ 15% (Rs.
1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the
year 2013-2014 absorbing Rs.20.92 lacs including Tax on Dividend, which
will be, if approved, paid to the Shareholders holding shares as on
30th September, 2014, after business hours.
3. Operations In Retrospect:
During the year under review, the Company yielded Gross Income of Rs.
4208.56 lacs and earned Gross Profit before depreciation, interest and
tax of Rs. 700.40 lacs with Net Profit of s. 322.16 Lacs as against
Gross Income of Rs. 3418.03 lacs, Gross Profit before depreciation and
Interest and tax of Rs. 446.30 lacs with Net Profit of Rs. 253.98 Lacs
of previous year, respectively, registering phenomenal growth of 23.12
% in Gross income and a modest growth of 26.84% in Net Profit, as
compared to previous year.
4. Future Prospects:
Your company has created new world class manufacturing facility for
liquids and tablets and confirming requirement of USFDA which are in
operation since September 2013 onwards. The Company has increased its
manufacturing capacity for tablets and liquids by four folds keeping in
view the projected growth plans.
The Company has been now focusing more on strategy implementation and
follow up action to achieve the desired growth plan in ethical
Marketing. The Company is ensuring its products availability in all
corner of country by increasing C&F agents, as recently it has
appointed one more C&F agent at Vijayawada. With a view to create more
ethical market, The Company has introduced various new drugs such as
Ovaryl Tablet, K-Win 10 Injection, K-Win injection with syringe to
cover more Gynaec and Paed Doctors in line of Central Government policy
of "Health for all " by allocation of Rs. 29,000 crores. On other side,
your Company has established Institutional Business with Government
institutions, Semi-Government and Brand ''A'' Hospitals & Clinics. The
Erga division of the Company, is also focusing more on strategy
implementation and achieving higher growth. Two new products have been
introduced in their portfolio.
The Company has been putting its major thrust on Export and has set
higher objective of achieving 100% growth during the financial year
2014-15 with addition of new, more clients and cover new countries in
Central America such as Costa Rica, Guatemala, El- Salvador , to name a
few.
The Company has been following its well planned strategy of deriving
maximum mileage on domestic market, more particularly on ethical
business, effectively and aggressively penetrating the domestic and
export market, exercising regular and strong follow up over Marketing
distribution net work and channels, strengthening its new institutional
business of supplying products to government / semi- government
institutions in the Country, with an objective to continue to excel
well. With these, the Board is confident that this would result into
substantial growth in the business revenue.
5. Amalgamation with Mercury Antibiotics Private Limited (MAPL):
As the members are aware, in order to have synergy of operations
between MAPL, the associate Company and the Company, with the approval
of the Members, a scheme of Amalgamation of the Company with MAPL was
proposed and pursued at High Court of Mumbai. On account of various
regulatory and technical issues, the Amalgamation Application filed by
the Company had to be withdrawn by the Board and it again resolved to
proceed with the said amalgamation afresh, with the same Scheme as was
earlier sanctioned. However, since the time when the Board resolved to
proceed with the merger, the Company went into significant expansion
and acquired and installed modern plant for liquid oral with latest
technology and high in speed which could produce finest and latest
medicines to compete in the national and international markets due to
which various advantages which were hitherto accruing upon merger with
MAPL, lost its importance and significance to the Company and as it has
not brought any synergic gains, the Board therefore decided to rescind
the proposal of merger of MAPL with the Company.
6. Management Discussion & Analysis:
a. Industry Structure and Developments:
As explained in the inception, the Indian pharmaceutical industry as a
whole, on positive, progressive sea change and is expected to
tremendous with the encouraging support of the Government .
b. Opportunities and Threats:
Your Company operates in such a area where a large market exists and
offers ample opportunities for growth. Your Company''s products are
well-received in the market. However, the Company faces tremendous
competitions from the organized and also unorganized sectors.
c. Outlook:
Your Directors are well aware of the competition by organized and
unorganized manufacturers and prevailing scenario such as Companies
Act, DPCO and create a strategy to overcome this difficulties.
In view of inflationary trend and keen competitions prevailing in the
market, your Directors feel the performance of the Company has been
reasonably good. Your Directors are also aware of the fact that Indian
Pharmaceutical industry is highly potential to growth but competitive
and fragmented.
The management is conscious about the changing scenario in
pharmaceutical industry and review take place regularly.
d. Risks and concerns:
The external factors such as Competition, DPCO norms, Natural
Calamities etc. are sincerely and strategically addressed. Your
company''s management focus in taking care of internal issues.
The external factors such as inflationary trend prevailing in the
market, natural calamities, and competition are common to all the
industrial sectors. It is therefore necessary to address sincerely and
systematically, to the effect of those risks on the business of the
Company. Risks which are internal on which the directors and management
would have control, are being taken care of. Diversified portfolio of
products, focus on financial disbursement, introduction of new
products, achieving optimum usage of available infrastructure and
deriving maximum possible returns, cost reduction in its operations
etc. are some of the inbuilt strategies which are implemented by the
Company to manage business risk.
e. Internal Control System and their Adequacy:
The internal control systems are continuously being fine tuned in line
with the changing requirements in the industry. The management
regularly reviews the internal control systems in the areas of finance
procurement, sales and distribution and marketing and new product
launches. Thus emphasis on internal control system is spread over
across all major functions and processes.
f. Financial Performance:
Financial performance of the Company has been indicated here in above.
g. Human Resources/lndustrial Relations:
Yours Directors believe that employees are the most valued assets of
the organization. Thus, all the human resources practices are directed
towards enhancing the value of these assets. The focus of the
management is on the organizational development and to imbibe new
organization values entrepreneurship, team work achievement and
commitment.
7. Directors'' Responsibility Statement:
In terms of Section 217(2AA) of the Companies Act,1956, the Directors
would like to state that :-
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for the year under review.
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) the Directors have prepared the Annual Accounts on a going concern
basis.
8. Directorate:
Pursuant to Section 149 of the Companies Act, 2013, the Board at its
meeting held on 26th July, 2014 recommended appointment of Dr. Dinesh
Shantilal Shah, Dr. Tushar Pravinchandra Shah and Mr. Divyakant R.
Zaveri as Independent Directors of the Company, not liable to retire by
rotation during their tenure of five years till the date of its 38th
Annual General Meeting, subject to approval of the Members of the
Company. These Directors have given consent and provided declarations
to the Board that they meet the criteria of independence as provided
under Section 149(6) of the said Act and also confirmed that they will
abide by the provisions as mentioned in Schedule IV of the Companies
Act, 2013.
In view of their vast and varied experience and useful contributions
given by each of them , the Board recommends their appointment as the
Independent Directors of the Company.
Mr. Janak J. Katakia ceased to be the Independent Director effective
form 26th July, 2014 on resignation. The Board places on record his
sincere appreciation for the contribution received from him during the
tenureship as a Director of the Company.
9. Statutory Disclosures:
I. Information pursuanttoSection217(1)(e)oftheCompanies Act, 1956 read
with Companies (Disclosures of particulars in the Report of Board of
Directors) Rules, 1988 are given as Annexure ''A'' to this report.
II. As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975 information is not furnished as no employee is covered
there under.
III. In compliance of Section 383A(1) of the Companies Act, 1956
Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas
and Associates, the Practicing Company Secretary, is annexed as
Annexure "B" to this report.
10. Corporate Governance:
Pursuant to Clause 49 of the Listing Agreements with the Over the
Counter Exchange of India (OTCEI), Corporate Governance Report and
Auditors'' Certificate regarding compliance of conditions of Corporate
Governance are made a part of the Annual Report as Annexure "C",
whereas the Management Discussion and Analysis is given hereinabove.
11. Secretarial Audit Report:
In compliance of directives of the Central Government and to complu
listing requirement, a Secretarial Audit Report issued by Mr. Jayesh
Vyas, the Practicing Company Secretary, is attached as Annexcure- D to
this report.
12. Dematerialisation of Shares:
Shares of the Company bear ISIN No. INE947GO1011 as allotted by the
National Securities Depository Ltd. (NSDL) & Central Depository
Services Ltd. (CDSL), for dematerialization and as of the date,
9,57,600 Equity shares (79.80%) have been dematerialized. Shareholders
are recommended to demat their Shares for their better custody and
convenience.
13. Auditors:
M/s. Naresh & Co., Chartered Accountants, Vadodara, (Firm Registration
No. 106928W), the Auditors of the Company retire at the ensuing Annual
General Meeting, being eligible, offer themselves for reappointment at
the Annual General Meeting.
The Members are requested to consider their re-appoint as the Statutory
Auditors for a period of three years commencing from the conclusion of
this Annual General Meeting upto the conclusion of the 36th Annual
General Meeting, subject to ratification of the Members at every
meeting and authorise the Board of Directors to fix their remuneration.
Members are requested to consider their re-appointment and fix their
remuneration.
14. Cost Auditors:
Pursuant to the provisions of Section 233B of the Companies Act, 1956,
Ms. Shilpa Parikh, Cost Accountants, (ICWA Registration No. 31441) was
appointed as the Cost Auditors to conduct audit of cost records for
Formulations drugs of the Company for the Financial Year2014-15.
15. Deposits:
The Company has no unpaid and / or unclaimed deposit. The Company has
not accepted any deposit from Public except from Directors and their
relatives and has complied with all applicable provisions of the
Companies Act relating to acceptance and renewal of deposits.
16. Insurance:
All the properties and insurable interests of the Company including
buildings, plants & machineries and stocks, have been adequately
insured.
17. Appreciation:
Your Directors have pleasure to place on record their appreciation of
the service rendered by the Workmen and Staff of the Company and thank
State Bank of India, Government of Gujarat and Central Government for
their valuable cooperation in furthering interest of the Company.
Date : 26-07-2014 For and on behalf of the Board,
Place : Vadodara.
Dinesh S.Shah
Chairman
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the 32nd Annual Report
together with Audited Statements of Accounts for the Year ended 31st
March, 2013.
The following figures summaries the financial performance of the
Company during the year under review.
1. Financial Results : (Rs. in Lacs)
2012-13 2011-12
Gross Income 3418.03 2736.03
Gross Profit before Depreciation, Interest & Tax 446.30 365.28
Less: Depreciation 32.16 29.62
Less: Interest 41.15 24.36
Less: Current Tax & Deferred Tax 128.31 102.41
Add /(Less) : Prior period Adjustment - Net (9.30) 11.52
Provision for Tax  10.30
Net Profit 253.98 230.71
Balance as per last P&L A/c. 1.23 0.44
Profit available for appropriation 255.21 231.15
This profit has been appropriated as under
(i) Proposed Dividend 18.00 18.00
(ii) Income Tax on proposed dividend. 2.92 2.92
(iii) Transfer to General Reserve 233.00 209.00
(iv) Balance carried to next year 1.29 1.23
Total 255.21 231.15
2. Dividend :
Your Directors are pleased to recommend payment of dividend @ 15% (Rs.
1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the
year 2012-2013 absorbing Rs.20.92 lacs including Tax on Dividend, which
will be, if approved, paid to the Shareholders holding shares as on
13th December, 2013, after business hours.
3. Operations In Retrospect:
During the year under review, the Company earned Gross Income of Rs.
3418.03 lacs and generated Gross Profit before Depreciation, Interest
and Tax of Rs. 446.30 lacs with Net Profit of Rs. 253.98 lacs as
against Gross Income of Rs. 2736.03 lacs, Gross Profit before
Depreciation, Interest and Tax of Rs. 365.28 lacs with Net Profit of
Rs. 230.71 lacs of previous year, registering phenomenal growth of
24.92% in Gross income and a modest growth of 10% in Net Profit, as
compared to previous year. The Company has been continuing putting its
thrust on its well devised action plan of focusing on deriving maximum
mileage on domestic market, more particularly on ethical business,
effectively and aggressively penetrating the market, exercising regular
and strong follow up over Marketing distribution net work and channels,
focusing on new Institutional Business of supplying products to
Government / Semi-Government Institutions in the Country, so as to
continue to achieve targeted growth.
In a drive to expand business, two new products have been introduced in
Ergacap division and systematic efforts are being made to promote them.
On Export front, the Company has been putting its thrust on development
of newer market in different countries such as Sri lanka and Benin to
increase clientele in existing exporting countries. During the year,
the Company added Eight new customers in exporting countries. The
Company is vigilant on cost control and hence putting its best possible
efforts continuously, to avoid wasteful expenses and minimise
operational expenses to the extent possible. With these, the Board is
confident that this would result into substantial growth in the
business revenue.
Expansion plan of the Company has been on advance stage of completion
and with establishing new manufacturing facilities at Jarod, the
Company could enter in to regulated market and bring better result in
coming years. Barring unforeseen circumstances, the Company hopes to
pose better and improved results, in coming period,
4. Management Discussion & Analysis :
a. Industry Structure and Developments:
The Company was like other Indian pharmaceutical Companies, had
reasonably good year, in terms of the profit and growth for the year
ended 31st March, 2013. Sincere efforts are continued to introduce
necessary changes in the various areas of operations, on continual
basis, so as to optimize the operating results.
b. Opportunities and Threats :
Your Company operates in an area where a large market exists and offers
ample opportunities for growth. Your Company''s products are well
received in the market. However, the Company faces tremendous
competitions from the organized and also unorganized sectors.
c. Outlook :
In view of inflationary trend and keen competitions prevailing in the
market, your Directors feel the performance of the Company has been
reasonably good. Your Directors are also aware of the fact that Indian
Pharmaceutical industry is highly potential to growth but competitive
and fragmented.
The management is conscious about the changing scenario in
pharmaceutical industry and review take place regularly.
d. Risks and concerns:
The external factors such as inflationary trend prevailing in the
market, natural calamities, and competition, are common to all the
Industrial Sectors. It is therefore necessary to address sincerely and
systematically, to the effect of those risks on the business of the
Company. Risks which are internal on which the directors and management
would have control, are being taken care of Diversified portfolio of
products, focus on financial disbursement, introduction of new
products, achieving optimum usage of available infrastructure and
deriving maximum possible returns, cost reduction in its operations
etc. are some of the inbuilt strategies which are implemented by the
Company to manage business risk.
e. Internal Control System and their Adequacy:
The internal control systems are continuously being fine tuned in line
with the changing requirements in the industry. The management
regularly reviews the internal control systems in the areas of finance
procurement, sales and distribution and marketing and new product
launches. Thus emphasis on internal control system is spread over
across all major functions and processes.
f. Financial Performance:
Financial performance of the Company has been indicated hereinabove.
g. Human Resources/Industrial Relations:
Yours Directors believe that employees are the most valued assets of
the organization. Thus, all the human resources practices are directed
towards enhancing the value of these assets. The focus of the
management is on the organizational development and to imbibe new
organization values- entrepreneurship, team work achievement and
commitment.
5. Directors'' Responsibility Statement:
In terms of Section 217(2AA) of the Companies Act,1956, the Directors
would like to state that:-
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for the year under review.
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) the Directors have prepared the Annual Accounts on a going concern
basis.
6. Director:
Dr. Dinesh Shah who retires by rotation and being eligible, offers
himself for reappointment. Members are requested to consider his
re-appointment.
7. Extension of time for holding Annual General Meeting :
In order to facilitate the Company to place before the Shareholder its
post Merger Statement of Accounts with Mercury Antibiotics Private
Limited, the Company has availed extension of time of three months for
holding Annual General Meeting for the financial year 2012-13, from the
Registrar of Companies, Maharashtra vide their letter dated 30-08-2013.
However, the Company still awaits to receive approval of Honourable
High Court of Mumbai.
8. Statutory Disclosures:
I. Information pursuant to Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosures of particulars in the Report of
Board of Directors) Rules, 1988 are given as Annexure ''A'' to this
report.
II. As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules,1975 information is not furnished as no employee is covered there
under.
III. In compliance of Section 383A(1) of the Companies Act, 1956
Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas
and Associates, the Practicing Company Secretary, is annexed as
Annexure "B" to this report.
9. Corporate Governance :
Pursuant to Clause 49 of the Listing Agreements with the Over the
Counter Exchange of India (OTCEI), Corporate Governance Report and
Auditors'' Certificate regarding compliance of conditions of Corporate
Governance are made a part of the Annual Report as Annexure "C",
whereas the Management Discussion and Analysis is given hereinabove.
10. Dematerialisation of Shares:
Shares of the Company bear ISIN No. INE947GO1011 as allotted by the
National Securities Depository Ltd. (NSDL) & Central Depository
Services Ltd. (CDSL), for dematerialization and as of the date,
9,55,600 Equity shares (79.63%) have been dematerialized. Shareholders
are recommended to demat their Shares for their better custody and
convenience.
11. Auditors:
M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the
Company retire at the ensuing Annual General Meeting, being eligible,
offer themselves for reappointment.
Members are requested to consider their re-appointment for the current
year and fix their remuneration.
12. Cost Auditors :
The Company has appointed Messrs. Y. S. Thakar & Co., Cost Accountants,
Vadodara as Cost Auditors of our Company for conducting Cost Audit in
respect of Formulations drugs of your Company for the year ended March
31,2013.
13. Deposits :
The Company has no unpaid and / or unclaimed deposit. The Company has
complied with all requisite applicable provisions of the Companies Act
relating to acceptance of deposit from public.
14. Insurance :
All the properties and insurable interests of the Company including
buildings, plants & machineries and stocks, have been adequately
insured.
15. Appreciation :
Your Directors have pleasure to place on record their appreciation of
the service rendered by the Workmen and Staff of the Company and thank
State Bank of India, Government of Gujarat and Central Government for
their valuable cooperation in furthering interest of the Company.
For and on behalf of the Board,
Date: 13/11/2013 Rajendra R. Shah
Place: Vadodara Chairman & Managing Director
Mar 31, 2012
Dear Members,
The Directors have pleasure in presenting the 31st Annual Report
together with Audited Statements of Accounts for the Year ended 31st
March, 2012.
The following figures summaries the financial performance of the
Company during the year under review.
1. Financial Results : (Rs. in Lacs)
2011-12 2010-11
Gross Income 2736.03 2827.73
Gross Profit before Dep. Int. & Tax 365.28 361.25
Less: Interest 24.36 26.45
Less: Depreciation 29.62 27.92
Add : Prior period Adjustment (Net) 11.52 3.29
Less: Provision for Tax 10.30 Â
Less: Prior years'' tax adjustment  1.60
Less: Provision for Tax 102.41 103.18
Net Profit 230.71 205.39
Balance as per last P&L A/c. 0.44 0.97
Profit available for appropriation 231.15 206.36
This profit has been appropriated as under
(i) Proposed Dividend 18.00 18.00
(ii) Income Tax on proposed dividend 2.92 2.92
(iii) Transfer to General Reserve 209.00 185.00
(iv) Balance carried to next Year 1.23 0.44
Total 231.15 206.36
2. Dividend :
Your Directors are pleased to recommend payment of dividend @ 15% (Rs.
1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the
year 2011-2012 absorbing Rs.20.92 lacs including Tax on Dividend, which
will be, if approved, paid to the Shareholders holding shares as on
29th September, 2012, after business hours.
3. Operations In Retrospect :
During the year under review, the Company yielded Gross Income of Rs.
2736.03 Lacs and earned Gross Profit before depreciation, interest and
tax of Rs. 365.28 Lacs with Net Profit of Rs. 230.71 Lacs as against
Gross Income of Rs. 2827.73 lacs, Gross Profit before depreciation and
Interest and tax of Rs. 361.25 lacs with Net Profit of Rs. 205.39 Lacs
of previous year, registering decline of 3.24 % in Gross income and
registering a modest growth of 12.33% in Net Profit as compared to
previous year.
The Company has been pursuing its thrust on its well devised action
plan of focusing on deriving maximum mileage on domestic market, more
particularly on ethical business, effectively and aggressively
penetrating the market, exercising regular and strong follow up over
Marketing distribution net work and channels, focusing on new
institutional business of supplying products to government /
semi-government institutions in the Country, so as to achieving of
targeted growth. In a drive to expand business, more than six new
products have been introduced in Ergacap division and systematic
efforts are being made to promote them. On export front, the Company
has been putting its thrust on development of newer market in different
countries and increase clientele in existing exporting countries.
During the year the Company added 12 new customers in exporting
countries. The Company is vigilant on cost control and hence putting
its best possible efforts continuously, to avoid wasteful expenses and
minimise operational expenses to the extent possible. With these, the
Board is confident that this would result into substantial growth in
the business revenue.
The Company has expansion plan on anvil and in process of establishing
new manufacturing facilities at Jarod which will help the Company to
enter in to regulated market and bring better result. The Company hopes
to pose better and improved results, in coming period, barring
unforeseen circumstances.
5. Directors'' Responsibility Statement :
In terms of Section 217(2AA) of the Companies Act,1956, the Directors
would like to state that:-
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for the year under review.
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) the Directors have prepared the Annual Accounts on a going concern
basis.
6. Directors :
Dr. Tushar Shah who retires by rotation and being eligible, offers
himself for reappointment. Members are requested to consider his
re-appointment.
Mr. Suryakant B. Parikh, ceased to be the director due to sudden death.
The Board places on record its sincere appreciation in respect of
valuable contributions received by the Company from him, during his
tenure as the Director of the Company.
Mr. Janak Katakia, who was appointed as an Additional Director with
effect from 5th January, 2012 holds office of the Director till the
conclusion of the ensuing Annual General Meeting. Being eligible, he
has consented to act as Directors of the Company. The Company has
received notices under Section 257 of the Companies Act, 1956 proposing
his candidature for directorship. The Board hopes that the Company
would be immensely benefited by the contributions of the newly inducted
Director. A brief note on Directors, being appointed/reappointed is
furnished in the accompanying notice calling the Annual General
Meeting.
Subject to the approval of the Shareholders, the Board of Directors, at
their meeting held on 5th January, 2012, on the recommendation of the
Remuneration Committee, have re-appointed Mr. Rajendra Ramanlal Shah as
the Managing Director for a period of 5 years from 1st April, 2012 on
the main terms and conditions mentioned in the explanatory statement
attached to the notice.
The Shareholders are requested to consider their appointments.
7. Statutory Disclosures :
I. Information pursuant to Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosures of particulars in the Report of
Board of Directors) Rules, 1988 are given as Annexure ''A'' to this
report.
II. As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules,1975 information is not furnished as no employee is covered there
under.
III. In compliance of Section 383A(1) of the Companies Act, 1956
Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas
and Associates, the Practicing Company Secretary, is annexed as
Annexure "B" to this report.
8. Corporate Governance :
Pursuant to Clause 49 of the Listing Agreements with the Over the
Counter Exchange of India (OTCEI), Corporate Governance Report and
Auditors'' Certificate regarding compliance of conditions of Corporate
Governance are made a part of the Annual Report as Annexure "C",
whereas the Management Discussion and Analysis is given hereinabove.
9. Dematerialisation of Shares:
Shares of the Company bear ISIN No. INE947GO1011 as allotted by the
National Securities Depository Ltd. (NSDL) & Central Depository
Services Ltd. (CDSL), for dematerialization and as of the date,
9,53,000 Equity shares (79.42%) have been dematerialized. Shareholders
are recommended to demat their Shares for their better custody and
convenience.
10. Auditors:
M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the
Company retire at the ensuing Annual General Meeting, being eligible,
offer themselves for reappointment.
Members are requested to consider their re-appointment for the current
year and fix their remuneration.
11. Deposits :
The Company has no unpaid and / or unclaimed deposit. The Company has
complied with all requisite applicable provisions of the Companies Act
relating to acceptance of deposit from public.
12. Insurance :
All the properties and insurable interests of the Company including
buildings, plants & machineries and stocks, have been adequately
insured.
13 Appreciation :
Your Directors have pleasure to place on record their appreciation of
the service rendered by the Workmen and Staff of the Company and thank
State Bank of India, Government of Gujarat and Central Government for
their valuable cooperation in furthering interest of the Company.
For and on behalf of the Board,
Date: 11/08/2012 Rajendra R. Shah
Place: Vadodara Chairman & Managing Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the 30th Annual Report
together with Audited Statements of Accounts for the Year ended 31st
March, 2011.
The following figures summarise the financial performance of the
Company during the year under review.
1. FINANCIAL RESULTS : (Rs. in Lacs)
2010-11 2009-10
Gross Income 2827.73 2659.18
Gross Profit before Dep. Int. & Tax 361.25 337.26
Less: Interest 26.45 22.88
Less: Depreciation 27.92 26.07
Add : Prior period Adjustment (Net) 1.70 (26.81)
Less: Provision for Tax 103.19 93.86
Net Profit 205.39 167.64
Balance as per last P&L A/c. 0.97 0.38
Profit available for appropriation 206.36 168.02
This profit has been appropriated as under
(i) Proposed Dividend 18.00 18.00
(ii) Income Tax on proposed dividend. 2.92 3.06
(iii) Transfer to General Reserve 185.00 146.00
(iv) Balance carried to next Year 0.44 0.96
TOTAL 206.36 168.02
2. Dividend :
Your Directors are pleased to recommend payment of dividend @ 15% (Rs.
1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the
year 2010-2011 absorbing Rs.20.92 lacs including Tax on Dividend, which
will be, if approved, paid to the Shareholders holding shares as on
22nd September, 2011, after business hours.
3. Operations In Retrospect:
During the year under review, the Company yielded Gross Income of Rs.
2827.73 Lacs and earned Gross Profit before depreciation, interest and
tax of Rs. 361.25 Lacs with Net Profit of Rs. 205.39 Lacs as against
Gross Income of Rs. 2659.18 lacs, Gross Profit before depreciation and
Interest and tax of Rs. 337.26 lacs with Net Profit of Rs. 167.64 Lacs
of previous year, registering modest growth of 6.33 % Gross income and
22.51% in Net Profit as well, compared to previous year.
The Company has been pursuing its thrust on its well devised action
plan of focusing on deriving maximum mileage on domestic market, more
particularly on ethical business, effectively and aggressively
penotrating the market, exercising regular and strong follow up over
Marketing distribution net work and channels, focusing on new
institutional business of supplying products to government /
semi-government institutions in the Country, so as to achieving of
targeted growth. In a drive to expand business, more than six new
products have been introduced in Ergacap division and systematic
efforts are being made to promote them.
On export front, the Company has been putting its thrust on development
of newer market in different countries and increase clientele in
existing exporting countries. During the year the Company added 12 new
customers in exporting countries. The Company is vigilant on cost
control and hence putting its best possible efforts continuously, to
avoid wasteful expenses and minimise operational expenses to the extent
possible. With these, the Board is confident that this would result
into substantial growth in the business revenue.
The Company has expansion plan on anvil and in process of establishing
new manufacturing facilities at Jarod which will help the Company to
enter in to regulated market and bring better result. The Company hopes
to pose better and improved results, in coming period, barring
unforeseen circumstances.
5. Directors'' Responsibility Statement.:
In terms of Section 217(2AA) of the Companies Act,1956, the Directors
would like to state that:-
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit of
the Company for the year under review.
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) the Directors have prepared the Annual Accounts on a going concern
basis.
6. Directorate :
Dr. Dinesh Shah who retires by rotation and being eligible, offers
himself for reappointment. Members are requested to consider his
re-appointment.
7. Statutory Disclosures :
I. Information pursuant to Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosures of particulars in the Report of
Board of Directors) Rules, 1988 are given as Annexure ''A'' to this
report.
II. As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules,1975 information is not furnished as no employee is covered there
under.
III. In compliance of Section 383A(1) of the Companies Act, 1956
Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas
and Associates, the Practicing Company Secretary, is annexed as
Annexure "B" to this report.
8. Corporate Governance :
Pursuant to Clause 49 of the Listing Agreement with the Over the
Counter Exchange of India (OTCEI), Corporate Governance Report and
Auditors'' Certificate regarding compliance of conditions of Corporate
Governance are made a part of the Annual Report as Annexure "C",
whereas the Management Discussion and Analysis is given hereinabove.
9. Dematerialisation of Shares :
Shares of the Company bears ISIN No. INE947GO1011 as allotted by the
National Securities Depository Ltd. (NSDL) & Central Depository
Services Ltd. (CDSL), for dematerialization and as of the date,
9,65,800 Equity shares ( 80.48%) have been dematerialized. Shareholders
are recommended to demat their Shares for their better custody and
convenience.
10. Auditors :
M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the
Company retire at the ensuing Annual General Meeting, being eligible,
offer themselves for reappointment.
Members are requested to consider their re-appointment for the current
year and fix their remuneration.
11. Deposits :
The Company has no unpaid and / or unclaimed deposit. The Company has
complied with all requisite applicable provisions of the Companies Act
relating to acceptance of deposit from public.
12. Insurance :
All the properties and insurable interests of the Company including
buildings, plants & machineries and stocks, have been adequately
insured.
13. Appreciation :
Your Directors have pleasure to place on record their appreciation of
the service rendered by the Workmen and Staff of the Company and thank
State Bank of India, Government of Gujarat and Central Government for
their valuable cooperation in furthering interest of the Company.
For and on behalf of the Board,
Date : 2.08.2011 Rajendra R. Shah
Place: Vadodara Chairman & Managing Director