Director s Report
Your Directors have pleasure in presenting the Twentieth Annual Report of your Companytogether with Audited Accounts for the Financial Year ended 31st March 2015.
The summarized Audited Financial Results for the year ended 31st March 2015along with comparative figures for the previous year is as under:
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(Rs. In 000)
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|Particulars ||31st March 2015 ||31st March 2014 ||31st March 2015 ||31st March 2014 |
|Total Income ||1436553.02 ||1789445.90 ||1436815.13 ||1871940.30 |
|Total Expenditure ||1296506.57 ||1683959.02 ||1287946.12 ||1757089.94 |
|Profit before Depreciation & || || || || |
| ||140046.45 ||105486.88 ||148869.01 ||114850.36 |
|Taxation || || || || |
|Less: Depreciation ||52375.87 ||83235.79 ||59854.65 ||89938.37 |
|Less: Exceptional Items ||- ||- ||28342.57 ||- |
|Profit before Tax ||60789.57 ||22.251.09 ||60671.79 ||24911.99 |
|Less: Provision for Taxation ||(22587.38) ||(4200.00) ||(22587.38) ||(4700.00) |
|Less: Provision for Deferred Tax ||22871.05 ||(4689.69) ||24113.06 ||(5767.72) |
|Minority Interest (Loss) || ||- ||(423.68) ||(408.14) |
|Profit after Tax for the year ||61073.34 ||13361.40 ||61773.79 ||14036.14 |
Consolidated Operating Results
The consolidated sales and operating income decreased to Rs. 143.68 Cr from Rs. 187.19Cr in the previous year yielding a decline in growth of 23.24% due to sale of Brandhappened during the year. The consolidated operating profit for the year was Rs. 14.89 Cras against Rs. 11.49 Cr in the previous year. The consolidated net profit for the year2015 was Rs. 6.18 Cr as against FY 2014 of Rs. 1.40 Cr.
Standalone Operating Results
The sales and operating income decreased to Rs. 143.66 Cr from Rs. 178.94 Cr in theprevious year decline rate of 19.72%. The operating profit for the year under review isRs. 14.00 Cr as against Rs. 10.55 Cr in the previous year. The profit after tax for theyear under review is Rs. 6.11 Cr as against Rs. 1.34 Cr in the previous year. The companyis in growth/expansion mode requiring further investment; your company is thereforeevaluating various options to raise additional funds for which shareholders approval maybe sought as and when things are finalized.
Subsidiary Company & Consolidated Financial Results
The consolidated financial results comprise of M/s. Bafna Pharmaceuticals Limited andits subsidiary M/s. Bafna Lifestyles Remedies Limited. Consolidated Financial Statementsfor the year ended 31st March 2015 forms part of the Annual Report. Asrequired under the Listing Agreements entered into with the Stock Exchanges consolidatedfinancial statements of the Company and its subsidiary are attached. The consolidatedfinancial statements have been prepared in accordance with the relevant accountingstandards as prescribed under section 133 of the Companies Act 2013. The consolidatedfinancial statements disclose the assets liabilities income expenses and other detailsof the Company and its subsidiaries. Material/significant changes in subsidiary duringthe year the subsidiary company has discontinued the marketing activities. A statementpursuant to Section 129 of the Companies Act 2013 relating to subsidiary companies isattached and forms part of the report.
Change in Capital Structure
| || ||(Rs. In 000) |
|Particulars ||31st March 2015 ||31st March 2014 |
|Authorized Capital ||400000.00 ||400000.00 |
|Issued Subscribed & Paid up Capital ||186563.35 ||186563.35 |
The company has not accepted / invited any deposits from the public in terms of Section73 of the Companies Act 2013
The Company wishes to conserve the resources hence your directors do not recommend anydividend for the Financial Year.
During the year Ms. K.Sabitha was appointed as an Additional director / women directorin the Board meeting held on 27th March 2015. Your Board recommends forappointment of Ms. K. Sabitha as a Director. The Composition of Board and number ofmeetings attended by them are given in the corporate governance report. Pursuant toSection 149 152 and other applicable provisions of the Companies Act 2013 read withRules thereon Shri V. Rajamani Shri R. Dwarakanathan Shri B. Kamlesh Kumar & ShriSunil Bafna were appointed as Independent Directors for five consecutive years in theNineteenth AGM held on 10.09.2014 upto 09.09.2019. Accordingly all the IndependentDirectors were appointed in the last AGM to align with the requirement of the CompaniesAct 2013. The necessary declarations were also obtained from the Independent Directors onyearly
Directors liable to retire by rotation
Shri. Bafna Mahaveer Chand Chairman & Managing Director & Shri. Paras BafnaWhole Time Director are not liable to retire by rotation as per their terms of appointment/ Articles Of Association of the company. However they are subject to retire by rotationas per the provisions of Section 149 & 152 of the Companies Act 2013. All Directorsin the Board are Independent except Shri. Bafna Mahaveer Chand & Shri. Paras Bafna andas Independent Directors are not liable to retire by rotation Shri. Bafna Mahaveer Chand& Shri. Paras Bafna will retire by rotation in terms of Section 152 of the CompaniesAct 2013 and being eligible they have offered themselves for re-appointment. Uponre-appointment as Director Shri. Bafna Mahaveer Chand shall continue to hold office as theChairman and Managing Director of the Company.
The brief resume of the Directors seeking appointment / reappointment and otherinformation have been detailed in the Notice. Your Board recommends the above appointments/reappointment of Directors in the best interest of the Company.
M/s. Abhay Jain & Co. Chartered Accountants Chennai who are the statutoryauditors of the Company were reappointed for a period of 3 years (from 2014 to 2017)subject to ratification by the members at every AGM. Hence ratification has been soughtfor from the members as per the terms of appointment made during 2014. M/s. Abhay Jain& Co. Chartered Accountants Chennai have given their consent for re-appointment andalso confirmed that their appointment would be within the prescribed limits under Section141 of the Companies Act 2013.
Accordingly the ratification of re-appointment of M/s. Abhay Jain & Co. CharteredAccountants Chennai as the Statutory Auditors is being proposed as an OrdinaryResolution.
The Board recommends ratification of re-appointment as Statutory Auditors of theCompany. The report of Auditors and notes forming part of the Accounts are attached alongwith the Annual Report. There is no observation made in the Auditors' Report for theperiod and hence no further comments required under Section 134 of the Companies Act2013.
The Board of Directors of the Company appointed M/s Thanigaimani & Associates CostAccountants (FRN No.101899) as the Cost Auditor of the Company for audit of cost accountsrelating to formulations for the year ended 31st March 2015. The Cost Auditreport for the year ended 31st March 2014 was filed on 26.11.2014 and the CostAudit Compliance Report was filed on 26.11.2014. The Cost Audit Report & Cost AuditCompliance Report for the year ended 31st March 2015 shall be submitted to theCentral Government in due course. As per Section 148 read with Companies (Audit and Audit)Rules 2014 and other applicable provisions if any of the Companies Act 2013 the Boardof Directors of the Company has appointed M/s Thanigaimani & Associates CostAccountants as Cost Auditor of the Company for the financial year 2015 16. Theremuneration proposed to be paid to the Cost Auditors subject to the ratification by themembers at the ensuing Annual General Meeting would be Rs. 45000/- (Rupees Forty FiveThousand Only) plus applicable taxes and out of pocket expenses.
The Company s shares are listed at (i) Bombay Stock Exchange Limited (BSE) with ScripCode No. 532989 and at (ii) National Stock Exchange of India Limited with Scripsymbol BAFNAPHARM; the necessary Listing Fees have been paid to the stockexchanges.
Particulars of employees a) Details of employees employed throughout the financialyear was in receipt of remuneration for that financial year in the aggregate was notless than ` 60 lakhs. Nil- b) Details of employees employed for a part of the financialyear was in receipt of remuneration for any part of that year at a rate which in theaggregate was not less than five lakh rupees per month -Nil - c) Details of employees ifemployed throughout the financial year or part thereof was in receipt of remuneration inthat year which in the aggregate or as the case may be at a rate which in theaggregate is in excess of that drawn by the managing director or whole-time director ormanager and holds by himself or along with his spouse and dependent children not lessthan two percent of the equity shares of the company. Nil -
Foreign Exchange earnings and outgo
The particulars in respect of Foreign Exchange Earnings and Outgo as required underSection 134) of the Companies Act 2013 and Rule 8(3) of the Companies (Accounts) Rules2014 are given as in Annexure to this report.
Human Resource Industrial Relations Environment Occupational Health and Safety
The Company is continuously focusing on managing talent and increasingly systematizingthe HR processes. We have excellent industrial relations across all facilities includingcorporate office and strongly believe that the workers will continue to work towardsprofitable and productive company. The number of employees as on 31st March2015 was 251 as against 677 during FY2013-14 a net decrease of 426 employees. This is waslargely due transfer of Domestic Branded division during the year.
Conservation of energy Technology Absorption & Research and Development (R &D)
The company is conscious of its responsibility to conserve the energy and has takenmeasures in relation to conservation of energy and technology absorption. The particularsin respect to conservation of energy Technology Absorption & Research and Developmentwere given in the annexure to the Board s Report.
Insider Trading Regulations
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations2005 as amended from time to time the code of conduct for prevention of insider tradingand the code for corporate disclosures are in force. The Company has adopted a Code ofConduct for Prevention of Insider Trading with a view to regulate trading in securities bythe Directors and designated persons of the Company as per SEBI (Prohibition of InsiderTrading) Regulations 2015.
Report on Corporate Governance and Certificate of the Auditors of your Companyregarding compliance of the conditions of Corporate Governance as stipulated in Clause 49of the Listing Agreement with the Stock Exchanges are enclosed elsewhere in the AnnualReport and forms part of this report.
Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013
The Board of Directors has approved policy as per the said Act. And an InternalComplaints Committee was constituted with following members:
|(i) Ms. Hemalatha Commercial Manager ||- Chairperson |
|(ii) Mr. Meenakshi Sundaram HR ||- Member |
|(iii) Ms. Sundari HR Executive ||- Member |
The committee placed certificate before the Board of Directors on the status ofcompliance of the Act. As per the certificate provided by the said committee no complaintswere received during the year & that there are no complaints pending as on 31stMarch 2015.
Corporate Social Responsibility
The applicability of Corporate Social Responsibility under Sec 135 of the CompaniesAct 2013 is not applicable to the Company. But however Company is committed to improvethe quality of life of the workforce and their families and also the community and societyat large. The Company believes in undertaking business in such a way that it leads tooverall development of all stake holders and society.
Secretarial Audit for the FY 2015-16
In terms of Section 204 of the Companies Act 2013 the rules made thereunder &other applicable provisions if any the company is required to appoint SecretarialAuditor to carry out Secretarial Audit of the Company. Your Board of Directors hasappointed M/s. A.K. Jain & Associates Practicing Company Secretaries Chennai forpurpose of Secretarial Audit for the FY 2015-16 at the Board Meeting held on 29.05.2015.
As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report and contains one qualification for non-appointment of CFO for theCompany. The copy of the Secretarial Audit report in MGT 3 is attached as an annexure tothe Director s Report.
Reply to the qualification: The Company is taking necessary steps to appoint theChief Financial Officer.
Re-appointment of Mr. Gaurav Jain Chartered Accountant Chennai as Internal Auditors& approved their Scope Functions Periodicity & Methodology
In terms of Section 138 of the Companies Act 2013 & other applicable provisionsif any Board of Directors at the Board Meeting held on 29.05.2015 has appointed Mr.Gaurav Jain Chartered Accountant and Chennai as Internal Auditors and further approvedtheir Scope Functions and Periodicity & Methodology.
In terms of Section 177 of the Companies Act 2013 and other applicable provisions ifany and as per the clause 49 of the Listing agreement the Audit committee comprises of 4Directors out of which 3 are Non-Executive Independent Directors. The terms of referenceof Audit Committee includes matters specified in section 177 of the Companies Act 2013 andClause 49 of the Listing Agreement (as revised with effect from 1.10.2014). The Board hasaccepted all the recommendations of the audit committee made during the year
"Nomination & Remuneration Committee"
In terms of Section 178 of the Companies Act 2013 & other applicable provisionsif any Board of Directors at the
Board Meeting held on 30.05.2014 has renamed the existing "RemunerationCommittee" of the Board of Directors as "Nomination & RemunerationCommittee". There was no change in the members of the Committee. The Policy ofNomination & remuneration committee were given in the corporate governance report.
"Stakeholders Relationship Committee"
In terms of Section 178 of the Companies Act 2013 & other applicable provisionsif any Board of Directors at their meeting held on 30.05.2014 renamed the existing"Investor Grievance & Share Transfer Committee" as "StakeholdersRelationship Committee".
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing Agreement withthe Stock Exchange is enclosed elsewhere in the Annual Report and forms part of thisReport. Certain Statements in the report may be forward-looking. Many factors may affectthe actual results which could be different from what the Directors envisage in terms offuture performance & outlook.
Extract of Annual Return:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedalong with the Director s Report.
Particulars of Employees:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled theretoexcludingthe information on employees particulars which is available for inspection by themembers at the Registered officeof the company during business hours on working days ofthe company up to the date of ensuing Annual General Meeting. If any member is interestedin inspecting the same such member may write to the company secretary inadvance.
Directors Responsibility Statement
Your Directors wish to inform that the Audited Accounts contains Financial Statementsfor the financial year ended 31st March 2015 are in full conformity with the requirementsof the Companies Act 2013. They believe that the Financial Statements reflect fairly theform and substance of transaction carried out during the year and reasonably present yourCompany s financial conditions and result of operations.
Your Directors further confirm that in preparation of the Annual Accounts:
The applicable accounting standards had been followed and wherever required properexplanations relating to material departures have been given; The Directors have selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit of the Company for thatperiod; Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
The Accounts have been prepared on a "going concern" basis.
The directors had laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively. Thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively
Acknowledgement and Appreciation
Your Directors would like to thank Company s Bankers SBI EXIM DBS DCB BOC &IDBI for their continued support and they would also like to express their gratitude forthe co-operation and assistance extended to the Company by its Customers SuppliersTechnical Consultants Contractors Government and Local Authorities etc. The Directorsalso wish to thank all its Shareholders for their unstinted support. The Directors wouldlike to sincerely thank and place on record their appreciation of the consistent anddedicated services of the employees at all levels who have immensely contributed to theperformance of the Company during the period under review.
| || ||On behalf of the Board of Directors |
| || ||For Bafna Pharmaceuticals Limited |
| || ||(CIN L24294TN1995PLC030698) |
|Place : Chennai ||Paras Bafna ||Bafna Mahaveer Chand |
|Date: 29.05.2015 ||(DIN: 01933663) ||(DIN: 01458211) |
| ||Whole Time Director ||Chairman & Managing Director |