Your directors have pleasure in presenting their Twenty Ninth Annual Report on thebusiness and operations of the company together with the Audited Statement of Accounts forthe year ended 31st March 2017.
During the year under review performance of your company is as under:
| || ||( in Rupees) |
|PARTICULARS ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Revenue from Operations ||764008502 ||713097980 |
|EBITDA ||60241662 ||46840819 |
|Less: Finance cost ||25094359 ||18799085 |
|Less: Depreciation ||8068507 ||6261590 |
|Profit before tax & exceptional items ||27078796 ||21780144 |
|Less: Exceptional items ||- ||- |
|Profit before tax ||27078796 ||21780144 |
|Less: Tax expenses ||8986658 ||8269398 |
|Profit After Tax ||18092138 ||13510746 |
|Transferred to general reserve ||- ||- |
|Proposed Dividend ||- ||- |
|Closing Balance in Statement of Profit and Loss ||(26583385) ||(44675523) |
Your Company has posted good financial results during the year under review. Turnoverof the Company has increased from 7130.98 lakhs to 7640.08 lakhs and the Net profitincreased from 135.10 lakhs to 180.92 lakhs.
To conserve the funds for operations of the Company the Board do not recommend anydividend for this financial year.
Amounts Transferred to Reserves: Nil Disclosures regarding:
Changes in Share Capital
There was no change in the structure of the share capital of the Company during thefinancial year under review.
Issue of Equity Shares with Differential Rights
The Company has not made any issue of equity shares with Differential Rights under theprovision of Section 43 read with Rule 4(4) of the Companies (Share Capital andDebentures) Rules 2014 during the Financial Year under review.
Issue of Employee Stock Options
The Company has not made any issue of equity shares via Employee stock options duringthe Financial Year under review.
Issue of Sweat Equity Shares
The Company has not made any issue of equity shares under the provision of Section 54read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules 2014 duringthe Financial Year under review.
Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as Annexure I.
Details of Board Meetings held
During the Financial Year 2016-17 Four meetings of the Board of Directors of thecompany were held as against the minimum requirement of four meetings.
|Date ||Board Strength ||No. of Directors Present |
|28th May 2016 ||08 ||08 |
|13th August 2016 ||08 ||07 |
|14th November 2016 ||08 ||08 |
|9th February 2017 ||08 ||08 |
Particulars of Loan Guarantees and Investments under Section 186
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 forms part of the Financial Statements.
Particulars of Contracts or Arrangements with Related Parties
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013shall be disclosed in Form No. AOC-2. As Annexure II.
Explanation to Auditor's Remarks
The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self-explanatory and do not call for any further comments.
Material Changes Affecting the Financial Position of the Company
There are no material changes / events occurring after balance sheet date till thedate of the report to be stated.
Conservation of Energy Technology absorption Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as"Annexure III"
Details of Subsidiary Joint Venture or Associates
Godavari Capital Private Limited Godavari Homes Private Limited and A.K. PaperProducts Private Limited. Vigil Mechanism
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors had formulated Vigil mechanism which is incompliance with the provisions of section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of SEBI Listing Regulations. The Vigil Mechanism Policy has been uploaded onthe website of the Company at www.godavaridrugs.com
Nomination & Remuneration Committee Policy
The Board of Directors of your Company had constituted the Nomination and RemunerationCommittee with the requisite terms of reference as required under Section 178 of theCompanies and other applicable provisions thereof in place of existing RemunerationCommittee. The said Committee framed adopted and recommended the "NominationRemuneration & Evaluation Policy ".The Details of the Committee have beenprovided under Corporate Governance Report which forms part of this Annual Report.
Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
In order to promote safe and indiscriminative environment the Company has formed anInternal Complaints Committee where employees can register their complaints against sexualharassment. During the year under review Company has not received any complaint ofharassment.
Details of Directors and Key Managerial Personnel
In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Mukund Kakani Director of the Company retire by rotation at the ensuingAnnual General Meeting and being eligible have offered themselves for re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Listing Obligations and Disclosure Requirement (LODR).
The Company has drafted a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the nonexecutive directors and executive directors.
On the basis of the Policy framed for performance evaluation of Independent DirectorsBoard Committees and other individual Directors a process of evaluation activity wasfollowed by the Board for its own performance and that of its Committees and individualDirectors. The Company has conducted programmes to familiarize Independent Directors withthe Company their roles rights responsibilities in the Company nature of industry inwhich the Company works and other allied matters.
Details of significant & material orders passed by the regulators or courts ortribunal
> Matter of Imports relating advance licensing scheme is under adjudication with theCESTAT Mumbai amounting Rs. 696062/> Matter of Central Excise & Customsamounting Rs. 16 29999/- is under adjudication with Commissioner (Appeals) CustomsCentral Excise & Service Tax Nagpur.
> Matter of Central Excise & Customs amounting Rs. 398766/- is underadjudication with Commissioner (Appeals) Customs Central Excise & Service TaxNagpur.
Statement in Respect of Adequacy of Internal Financial Control with Reference to theFinancial Statements
The Company has in place adequate internal financial controls with reference tofinancial statements.
During the year such controls were tested and no reportable material weakness in theoperation was observed.
Deposit from Public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet. However opening balance of unsecured loans from related parties is lyingwith the Company which is subordinated to bank borrowings against cash credit limitavailed from Andhra Bank. The Company raised funds from the related parties which amountsto deposit under section 73 of the Companies Act 2013.
Receipt of any commission by MD / WTD from a Company or for receipt of commission /remuneration from it Holding or subsidiary
As there is no holding company or subsidiary of the Company this part isn't applicableto the Company. Declaration of Independence
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed in Sub-Section (6) of Section149 of Companies Act 2013 read with the Regulations and Rules issued thereunder as wellas Listing Obligations and Disclosure Requirement (LODR).
Code of Conduct for Directors and Senior Management
The Board has laid down a code of conduct for all Board members and senior Managementof the Company. The Directors and members of Senior Management have affirmed compliancewith the Code of Conduct for Directors and Senior Management of the Company.
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis.
Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under M/s. VSS &Associates Practicing Company Secretary have been appointed as Secretarial Auditors ofthe Company. The report of the Secretarial Auditors is enclosed as Annexure IV to thisreport. The report is self-explanatory and do not call for any further comments.
Corporate Social Responsibility (CSR) Policy
The Company doesn't fall under the ambit of Section 135 (1) hence Corporate SocialResponsibility policy is not applicable to the Company.
During the year under review 4 meetings of the Committee were held on May 28 2016;August 13 2016; November 14 2016; February 09 2017.
The composition of the Committee as on 31st March 2017 as well as theparticulars of attendance at the Committee during the year are given in the table below:
|Name ||Category of Directorship ||No. of Meetings Attended ||% of Total meetings attended during the tenure as a Director |
|Shri Dilip Patel ||Independent Director / Chairman ||4 ||100 |
|Shri Syed Hussain ||Independent Director ||4 ||100 |
|Shri K K Jain ||Director Finance ||4 ||100 |
The Committee's composition meets with requirements of Section 177 of the CompaniesAct 2013 and Clause 18 of SEBI Regulations 2015 members of the Audit Committee possessfinancial / accounting expertise / exposure.
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") the Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
Details pertaining to remuneration as required under section 197(12) of the CompaniesAct 2013 read with rule 5(1) of the companies (appointment and Remuneration of managerialpersonnel) rules 2014.
The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sr. No Name of Director/KMP and Designation ||Remuneration of Director/KMP for financial year 2016-17 ( in Lakhs) ||% increase in Remuneration in the Financial Year 2016-17 ||Ratio of remuneration of each Director/ to median remuneration of employees |
|1 Ghanshyam Jaju Chairman ||Nil ||Nil ||Not Applicable |
|2 Mukund Kakani Managing Director ||10.20 ||148 ||5.30:1 |
|3 Kirti Kumar Jain Executive Director ||5.30 ||194 ||2.75:1 |
|4 Mohit Jaju Executive Director ||5.30 ||194 ||2.75:1 |
|5# Syed Hussain Independent Director ||0.40 ||Nil ||0.26:1 |
|6# Dilip Patel Independent Director ||0.40 ||Nil ||0.26:1 |
|7# Ramesh Babu Telugu Independent Director ||0.30 ||Nil ||0.26:1 |
|8# Vimala Madon Independent Director ||0.40 ||Nil ||0.26:1 |
|9 Jeevan Innani Company Secretary & Compliance Officer ||3.60 ||Nil ||1.88:1 |
# Sitting fees is also considered for calculation of remuneration for the above purposePercentage increase in the median remuneration of employees in the financial year:
The median remuneration is Rs. 16040/- and the percentage increase in the medianremuneration of employees in the financial year is 4.68%.
Number of permanent employees on the rolls of company:
Number of employees on the roll of the Company as on 31st March 2017 was 97 Nos.
Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average increase in salaries of employees other than managerial personnel in2016-17 was 5.63%. Percentage increase in the managerial remuneration for the year was12.63%.
Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
Details pertaining to remuneration as required under section 197(12) of the CompaniesAct 2013 read with rule 5(2) and 5(3) of the companies (appointment and Remuneration ofmanagerial personnel) rules 2014.
(a) Employed throughout the financial year and was in receipt of remuneration for theyear in aggregate of not less than Rs. 10200000:- NIL
(b) Employed for a part of the financial year and was in receipt of remuneration at arate in aggregate not less than Rs. 850000/- per month:- NIL
(c) Employed throughout the financial year or part thereof was in receipt ofremuneration in the year which in the aggregate or at a rate which in the aggregate wasin excess of that drawn by the Wholetime Director and holds by himself or along with hisspouse and dependent children not less than 2% of the equity shares of the Company:- NIL
No cases of fraud have been reported to the Audit Committee / Board during thefinancial year under review.
Pursuant to the provisions of Section - 139 and other applicable provisions if any ofthe Companies Act 2013 and the Rules framed there under read with Schedule VI of theAct as amended from time to time the appointment of M/s Bhattacherjee & PaulChartered Accountants (FRN 303026E) be and is hereby recommended as Statutory Auditors ofthe Company to hold office from the conclusion of this Annual General Meeting till theconclusion of the 34th Annual General Meeting of the Company to be held in theyear 2022 (subject to ratification of their re-appointment at every next Annual GeneralMeeting) at such remuneration as may be mutually agreed upon between the Board ofDirectors and Statutory Auditors.
They have confirmed their eligibility to the effect that their appointment if madewould be within the prescribed limits under the Act and that they are not disqualified forre-appointment.
Management Discussion and Analysis Report
The above report is annexed herewith as Annexure V Directors Responsibility Statement
In accordance with the provisions of Section 134(3) (c) of the Companies Act 2013 yourdirectors confirm that:
a) In the preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures.
b) The Company has selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2017 and of the profit /lossof the Company for that period.
c) The Company has taken proper and sufficient care 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.
d) The annual accounts have been prepared on going concern basis.
e) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
f) The Company has laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and are operating effectively.
The Directors express their sincere appreciation to the employees valued shareholderscustomers bankers suppliers and government authorities for their continued support.
| ||For and on behalf of the Board of Directors |
| ||For Godavari Drugs Limited |
| || |
|Place : Secunderabad ||Ghanshyam Jaju ||Mukund Kakani |
|Date : 30.05.2017 ||(Chairman) ||(Managing Director) |
| ||DIN: 00104601 ||DIN:00104646 |