TO THE SHAREHOLDERS
Ladies & Gentlemen
Your Directors have pleasure in presenting their 78th Annual Report on the business andoperations of the Company and the accounts for the financial year ended 31st March 2017.
FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY :
| || ||(Rs. in Lacs) |
| ||2016-2017 ||2015-2016 |
|Revenue from operations/Net Sales ||30301.88 ||32046.40 |
|Earning before Interest Depreciation Tax & Amortization (EBIDTA) ||2502.38 ||3105.46 |
|Other Income ||400.05 ||196.61 |
|Finance Costs ||111.08 ||181.09 |
|Gross Profit (EBDTA) ||2791.35 ||3120.98 |
|Depreciation and Amortization ||766.65 ||899.87 |
|Profit before exceptional and extraordinary items and tax ||2024.70 ||2221.11 |
|Exceptional items ||- ||4080.75 |
|Profit Before extraordinary items and tax ||2024.70 ||6301.86 |
|Extraordinary items ||- ||- |
|Profit before Tax (PBT) ||2024.70 ||6301.86 |
|Tax expense including for earlier years ||821.16 ||1502.27 |
|Net Profit after Tax (PAT) ||1203.54 ||4799.59 |
|Balance of Profit brought forward from previous year ||972.20 ||571.58 |
|Less : Fixed Assets adjusted for over-aged assets (Net of deferred tax) ||- ||(21.16) |
|Surplus available for appropriation ||2175.74 ||5350.01 |
|Appropriations : || || |
|Interim Dividend ||- ||313.91 |
|Tax on Interim Dividend ||- ||63.90 |
|Transfer to General Reserve ||1100.00 ||4000.00 |
|Balance carried to Balance Sheet ||1075.74 ||972.20 |
BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/ STATE OF COMPANY'S AFFAIRS:
During the year under review your Company achieved Net Sales of Rs. 30301.88 Lacs andrecorded a Gross Profit of Rs. 2791.35 Lacs compared to previous year's Net Sales of Rs.32046.40 Lacs and Gross Profit of Rs.3120.98 Lacs.
During the year under review your Company has successfully launched Sioneuron M/PGcapsules Inbalanse-Z capsules and Breaze-Fx tablets.
During the current financial year your Company plans to further strengthen range ofproducts within Placentrex group of products.
Your Directors are hopeful of further growth in sales and better financial performanceduring the current year.
The Board of Directors of your Company is pleased to recommend payment of dividend ofRs.5.50/- per equity share of Rs.10/- each for the financial year ended 31st March 2017amounting to Rs.377.81 Lacs (inclusive of dividend distribution tax of Rs.63.90 Lacs).
TRANSFER TO RESERVES :
The Board proposes to transfer an amount of Rs.1100.00 Lacs to General Reserve.
CHANGE IN THE NATURE OF BUSINESS IF ANY :
During the year under review there has been no change in the nature of business of theCompany.
MATERIAL CHANGES AND COMMITMENTS AFTER THE BALANCE SHEET DATE :
There was no material changes and commitments in the business operations of the Companyaffecting the financial position of the Company which have occurred between the end of thefinancial year of the Company to which the financial statements relate and the date ofthis report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE :
There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS :
1. The Company has appointed Internal Auditors to observe the Internal Controlswhether the workflow of the organization is being done through the approved policies ofthe Company. In every quarter during the approval of Financial Results Internal Auditorspresent the Internal Audit Report and Management comments on the Internal Auditobservations;
2. The Board of Directors of the Company has adopted various policies like RelatedParty Transaction Policy Whistle Blower Policy and other procedures for ensuring theorderly and efficient conduct of its business. The Company's system of internal controlhas been designed to provide a reasonable assurance with regard to maintaining of properaccounting controls monitoring of operations safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information.
3. The Company is in the process of installing ERP suite for a reliable high endcomprehensive disciplined and integrated business solution.
The Company has neither accepted nor renewed any deposits during the year under review.The outstanding deposit of Rs.437.75 Lacs as on 31st March 2016 has been repaid in fullduring the year.
STATUTORY AUDITORS :
Under Section 139 of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. The permitted term of appointment of the existing statutoryauditors i.e. M/s. G. Basu & Co. Chartered Accountants ends at the conclusion ofthe ensuing 78th Annual General Meeting. The Audit Committee of the Company has proposedand the Board of Directors of the Company on May 30 2017 has recommended the appointmentof M/s. Basu Chanchani & Deb Kolkata Chartered Accountants (Firm Registration No.304049E) as the statutory auditors of the Company. M/s. Basu Chanchani & DebChartered Accountants will hold Office for a period of five consecutive years from theconclusion of the 78th Annual General Meeting of the Company scheduled to be held onSeptember 12 2017 till the conclusion of the 83rd Annual General Meeting to be held inthe year 2022 subject to the approval/ratification of the shareholders of the Company.
M/s. Basu Chanchani & Deb Chartered Accountants have signified their consent inwriting for such appointment along with a certificate confirming that their appointmentif made shall be in accordance with Section 139 read with Section 141 of the CompaniesAct 2013.
The above proposal is placed for approval by the Members.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES :
The Company does not have any subsidiary/joint ventures/associate companies.
AUDITORS' REPORT :
The Auditors' Report to the shareholders on the financial statements of the Company forthe financial year ended 31st March 2017 does not contain any qualification reservationor adverse remark or disclaimer.
SECRETARIAL AUDIT :
The provisions of Section 204 of the Companies Act 2013 mandates Secretarial Audit ofthe Company for the financial year 2016-2017 by a Company Secretary in Practice andaccordingly the Board had appointed M/s. MKB & Associates Practicing CompanySecretaries (FRN: P2010WB042700) as Secretarial Auditor to conduct secretarial audit ofthe Company for the financial year ended 31st March 2017 and their Report in Form MR-3 isattached as "Annexure - 1" to this Annual Report.
There are no qualifications in the Secretarial Audit Report.
COST AUDIT :
In accordance with the provisions of Section 148 of the Companies Act 2013 and theCompanies (Cost Records and Audit) Rules 2014 the Company is required to appoint a CostAuditor to audit the cost records relating to the business of manufacturing of Bulk Drugsand Formulations business of the Company. Accordingly the Board had appointed M/s. S.Gupta & Co. Kolkata Cost & Management Accountants (Firm Registration No. 000020)as Cost Auditors for auditing the cost records of the Company for the financial year ended31st March 2017.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read with the Rule14 of the Companies (Audit and Auditor) Rules 2014 the remuneration payable to M/s. S.Gupta & Co. Cost Auditor fot the year 2017-18 is required to be ratified by theMembers of the Company and accordingly a resolution for the same is being placed beforethe Members at the ensuing Annual General Meeting.
SHARE CAPITAL :
There is no change in the Share Capital of the Company during the year.
EXTRACT OF THE ANNUAL RETURN :
Extract of the Annual Return in Form MGT - 9 pursuant to the provisions of Section 92the Companies Act 2013 and Rule 12 of the Companies (Management and Administration)Rules 2014 is enclosed as "Annexure - 2" to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is attached as "Annexure -3" to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
The Corporate Social Responsibility Committee of the Company consists of Mr. A. K.Kothari designated as Chairman Mr. H. P. Kabra Executive Director and Dr. K. LahiriIndependent Director of the Company as Members of the Committee.
The Company has contributed Rs.65.41 Lacs (which includes Rs.24.80 Lacs carried forwardfrom previous year on unspent account) in discharging its corporate social responsibilityduring the year as per CSR Policy of the Company. The Policy may be referred at theCompany's official website at http://albertdavidindia.com/investor/sh_information/policy/csr.pdf
Report on Corporate Social Responsibility as per Rule 8 of the Companies (CorporateSocial Responsibility Policy) Rules 2014 is attached as "Annexure - 4"to this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
(a) Declaration by Independent Directors :
All the Independent Directors have submitted their declarations of independencepursuant to Section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as laid down in section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015.
(b) Familiarization Programme undertaken for Independent Directors
The Independent Directors are familiarized with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. pursuant to Regulation 25(7) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. On appointment theIndependent Director is issued a Letter of Appointment setting out in detail the terms ofappointment duties responsibilities and expected time commitments. Each newly appointedIndependent Director is taken through a formal induction program on the Company'soperations marketing finance and other important aspects. The Company Secretary briefsthe Director about their legal and regulatory responsibilities as a Director. TheDirectors are also explained in detail the various compliances required from him as aDirector under the various provisions of the Companies Act 2013 SEBI (LODR) Regulations2015 SEBI (Prohibition of Insider Trading) Regulations 2015 the Code of Conduct of theCompany and other relevant regulations. The details of familiarization program isavailable on the Company's website under the weblink: http://albertdavidindia.com/investor/sh_information/policy/d_familiarisation_prog.pdf
(c) Non-Independent Director
In accordance with the Articles of Association of the Company Mrs. Prabhawati DeviKothari Director of the Company is liable to retire by rotation and being eligibleoffers herself for re-appointment. The Board recommends her re-appointment with a view toavail her valuable advice and wise counsel.
Brief profile of the Director(s) seeking appointment/ re-appointment and otherinformation as required under Regulation 36(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Notice of AGM forming part ofthe Annual Report. None of the Directors of the Company is disqualified for beingappointed as Directors as specified in section 164(2) of the Companies Act 2013 and Rule14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014.
(d) Change in Directorship during the year
During the year under review the Board of Directors in their meeting held on 30th June2016 had appointed Mr. H. P. Kabra as an Additional Director as well as Wholetime Directordesignated as "Executive Director" with effect from 1st July 2016 in place ofMr. K. P. Mundhra who had resigned with effect from 1st July 2016. Mr. H. P. Kabra'sappointment was approved by the members in the AGM held on 14th September 2016.
(e) Key Managerial Personnel
Mr. Arun Kumar Kothari Chairman & Managing Director Mr. Tarminder Singh ParmarChief Executive Officer (CEO) Mr. Hari Prasad Kabra Executive Director Mr. SubhashChandra Shah Vice President (Finance) & CFO and Dr. Indrajit Dhar Associate VicePresident (Accounts & Taxation)-cum-Company Secretary are the Whole-time KeyManagerial Personnel of the Company as per Section 203 of the Companies Act 2013.
The Board of Directors in their meeting held on 23rd January 2017 had appointed Mr. T.S. Parmar as CEO of the Company with effect from 24th January 2017.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE :
Pursuant to the requirements of the Companies Act 2013 and the SEBI ListingRegulations evaluation of each member of the Board is done on an annual basis. Theevaluation is done by the Board (excluding presence of the member under evaluation) theNomination and Remuneration Committee and the Independent Directors with specific focus onthe performance and effective functioning of the Board/ Committees and individualDirectors. A structured questionnaire was prepared after taking into consideration inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
a) Criteria for evaluation of the Board of Directors as a whole
i. Frequency of meetings;
ii. Length of meetings;
iii. Administration of meeting;
iv. Number of Committees and their roles;
v. Flow of information to Board members and between Board members;
vi. The quality and quantity of information; and
vii. Disclosure of Information to the stakeholders.
b) Criteria for evaluation of the Individual Directors
i. Commitment to the fulfillment of director obligations and fiduciaryresponsibilities;
ii. Attendance and contribution at Board/Committee meetings;
iii. Ability to contribute by introducing best practices to address top managementissues;
iv. Monitoring management performance and development;
v. Participation in long term strategic planning;
vi. Ability to contribute and monitor corporate governance practices;
vii. Statutory compliance & Corporate governance;
viii. Time spent by each of the members;
ix. Core competencies; and
x. Guiding strategy;
The Directors expressed their satisfaction over the evaluation process and resultsthereof.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS :
During the financial year ended 31st March 2017 eight Board Meetings were held on 30thMay 2016 30th June 2016 13th August 2016 26th October 2016 14th November 201623rd January 2017 13th February 2017 and 28th March 2017. The maximum time gap betweenany two meetings was less than four months as stipulated under SEBI (LODR) Regulations2015. Details of the Board meetings held during the financial year have been furnished inthe Corporate Governance Report forming part of this Annual Report.
MEETING OF INDEPENDENT DIRECTORS
During the year under review a meeting of Independent Directors was held on 28thMarch 2017 wherein the performance of the Non-Independent Directors and the Board as awhole was reviewed. The Independent Directors at their meeting also assessed the qualityquantity and timeliness of flow of information between the Company management and theBoard of Directors of the Company.
COMMITTEES OF THE BOARD :
The Company has constituted/re-constituted various Board level committees in accordancewith the requirements of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Details of all the above Committees along withcomposition and meetings held during the year under review are provided in the Report onCorporate Governance forming part of this report.
AUDIT COMMITTEE :
The composition and terms of reference of the Audit Committee has been furnished in theCorporate Governance Report forming a part of this Annual Report. There has been noinstance where the Board has not accepted the recommendation of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE :
The composition and terms of reference of the Nomination and Remuneration Committee hasbeen furnished in the Corporate Governance Report forming part of this Annual Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION :
The Company has a Nomination and Remuneration Policy pursuant to Section 178 of theCompanies Act 2013 stating therein the Company' policy on Directors' appointment andremuneration. The said Policy is attached as "Annexure - 5" to thisReport. It may also be accessed at the Company's website at http://albertdavidindia.com/investor/sh_information/policy/nr_policy.pdf
WHISTLE BLOWER MECHANISM/VIGIL MECHANISM :
The Company has established an effective Whistle Blower Policy pursuant to theCompanies Act 2013. The said policy may be referred to at the Company's official websiteat the following web link http://albertdavidindia.com/investor/sh_information/policy/whistle_blower.pdf
The Whistle Blower Policy aims for conducting the affairs of the Company in a fair andtransparent manner by adopting the highest standards of professionalism honestyintegrity and ethical behavior. All permanent employees of the Company are covered underthe Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairman of the Audit Committee in exceptionalcases.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013 :
The Company as an organization is committed to provide a healthy environment to allemployees and thus does not tolerate any discrimination and/or harassment in any form. TheCompany has in place a Prevention of Sexual Harassment Policy in line with the requirementof the Sexual Harassment of Women at work place (Prevention Prohibition and Redressal)Act 2013. The Company has set up Internal Complaint Committee which is chaired by Femaleemployee of the Company. No complaints were received during the financial year 2016-2017.
PARTICULARS OF LOANS GURANTEES AND INVESTMENTS
Details of loans guarantees and investments covered under Section 186 of the CompaniesAct 2013 form part of the Note No. 27.12 to the Financial Statements provided in thisAnnual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
A Related Party Policy has been formulated by the Board of Directors for determiningthe materiality of transactions with related parties and dealing with them. The saidpolicy may be referred to at the Company's official website in the web link http://albertdavidindia.com/investor/sh_information/policy/related_party_transaction.pdf
The Audit Committee reviews all related party transactions quarterly.
All contracts or arrangements with related parties entered into or modified during thefinancial year were on an arm's length basis and in compliance with the applicableprovisions of the Companies Act 2013 and the Listing Regulations. There are no materialcontracts or arrangements entered into by the Company during the year with Related Partiesreferred to in Section 188(1) of the Companies Act 2013. There are no materiallysignificant related party transactions made by the Company with promoters directors keymanagerial personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 in Form AOC-2 is not applicable.
Directors draw attention of the members to Note No. 27.2 to the financial statementwhich set out related party disclosures.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL :
Details of the ratio of the remuneration of each director to the median remuneration ofemployees of the Company and other details pursuant to Section 197(12) of the CompaniesAct 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (as amended) is attached as "Annexure - 6" to thisReport. Disclosures pertaining to Remuneration and a Statement showing the names of topten employees in term of remuneration drawn as required under Section 197(12) of the Actand Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 is attached as "Annexure-7" to thisAnnual Report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS:
A separate report on Corporate Governance and Management's Discussion and Analysis isannexed as part of the Annual Report along with the Auditor's Certificate in compliancewith SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
RISKS & MITIGATING STEPS :
The Company has adopted and implemented a Risk Management Policy after identifyingvarious risks which the Company encounters in the course of its business. Appropriatestructures are present so that risks are inherently monitored and controlled inter aliathrough strict quality assurance measures. In the opinion of the Board none of the risksfaced by the Company threaten the existence of the Company.
The Company has adequate internal control system and procedures to combat risks. Therisk management procedure is reviewed by the Audit Committee and Board of Directors on aquarterly basis at the time of review of quarterly financial results of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section (3) of Section 134 and Section 134(5) of theCompanies Act 2013 the Board of Directors of the Company hereby state and confirm that :
i) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures if any ;
ii) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year ended on31st March 2017 and of the Profit of the Company for that period ;
iii) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records for the year ended 31st March 2017 in accordance with the provisionsof this Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities ;
iv) the Directors had prepared the annual accounts on a going concern basis';
v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively ; and
vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND (IEPF):
Pursuant to the applicable provisions of the Companies Act 2013 read with theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Central Government after the completion of sevenyears. Accordingly the Company has transferred the unclaimed and unpaid dividends tillthe financial year ended 31st March 2009 to the Investor Education & Protection Fundestablished by the Central Government. The details of Unclaimed Dividends lying with theCompany is uploaded on its website https://www.albertdavidindia.com/undividend.phpas also on the website of Ministry of Corporate Affairs.
Further according to the said Rules the corresponding shares in respect of whichdividend has not been paid or claimed by the shareholders for seven consecutive years ormore shall also be transferred to the IEPF Authority. Such shares will be transferred asper the requirements of the IEPF Rules details of which are provided on our website at https://www.albertdavidindia.com/notice_other.php.
The unclaimed deposits of Rs.21.80 Lacs (including Rs.1.80 Lacs accrued interestthereon) have also been transferred to the Investor Education & Protection Fund oncompletion of 7 years from the date of maturity thereof.
LISTING WITH STOCK EXCHANGES :
Your Company is listed with BSE Limited and National Stock Exchange of India Limitedand the Company has paid the listing fees to the said Stock Exchanges.
The Board sincerely places on record the support given by Medical profession TradeShareholders Company's Bankers and Stockists Central and State Government AuthoritiesStock Exchanges CDSL NSDL and all other Business Associates for the growth of theorganization. The Board further expresses its appreciation for the services rendered bythe executives Officers staffs and workers of the Company at all levels.
|Registered Office: ||For and on behalf of the |
|D - Block 3rd Floor ||Board of Directors |
|Gillander House || |
|Netaji Subhas Road || |
|Kolkata - 700 001. ||A.K. Kothari |
|CIN: L51109WB1938PLC009490 ||Chairman & Managing Director |
|Dated: 30th May 2017 ||Din: 00051900 |