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Godavari Drugs Ltd.

BSE: 530317 Sector: Health care
NSE: N.A. ISIN Code: INE362C01012
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OPEN 42.00
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VOLUME 50392
52-Week high 54.90
52-Week low 32.00
P/E 22.35
Mkt Cap.(Rs cr) 33
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Godavari Drugs Ltd. (GODAVARIDRUGS) - Director Report

Company director report

To

The Members

Your directors have pleasure in presenting their Twenty Eighth Annual Report on thebusiness and operations of the company together with the Audited Statement of Accounts forthe year ended 31st March 2016.

Financial Highlights

During the year under review performance of your company is as under:

(in Rupees)
PARTICULARS Year ended 31st March 2016 Year ended 31st March 2015
Revenue from Operations 713097980 551473488
EBITDA 46840819 60824413
Less: Finance cost 18799085 6676239
Less: Depreciation 6261590 6809772
Profit before tax & exceptional items 21780144 47338402
Less: Exceptional items - -
Profit before tax 21780144 47338402
Less: Tax expenses 8269398 10869924
Profit After Tax 13510746 36468478
Transferred to general reserve - -
Proposed Dividend - -
Closing Balance in Statement of Profit and Loss (44675523) (58186269)

Company Performance

Your Company has posted good financial results during the year under review. Turnoverof the Company has increased from 5514.73 lakhs to 7112.10 lakhs and the Net profitreduced from 364.68 lakhs to 135.10 lakhs.

Dividend

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 2015-16 five 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
30th May 2015 08 08
13th August 2015 08 08
26th September2015 08 08
6th November 2015 08 07
9th February 2016 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 andAuditors remarks in their report are self-explanatory and do not call for any furthercomments.

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

Associated Companies:

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 of harassment.

Details of Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Ghanshyam Jaju 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 non-executive 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 withthe CESTAT Mumbai amounting Rs. 696062/-

• Matter of Central Excise & Customs amounting Rs. 1629999/- is underadjudication with Commissioner (Appeals) Customs Central Excise & Service TaxNagpur.

• 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.

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’tapplicable to 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.

Risk Management

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 risktolerance to established levels. Major risks identified by the businesses and functionsare systematically 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 CorporateSocial Responsibility policy is not applicable to the Company.

Audit Committee

During the year under review 4 meetings of the Committee were held on May 30 2015;August 13 2015; November 06 2015; February 09 2016.

The composition of the Committee as on 31st March 2016 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 3 75

The Committee’s composition meets with requirements of Section 177 of theCompanies Act 2013 and Clause 18 of SEBI Regulations 2015 members of the Audit Committeepossess financial / accounting expertise / exposure.

Board Evaluation

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 2015-16 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2015-16 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 2015-16 (in Lakhs) % increase in Remuneration in the Financial Year 2015-16 Ratio of remuneration of each Director/ to median remuneration of employees
1 Ghanshyam Jaju
Chairman Nil Nil Not Applicable
2 Mukund Kakani
Managing Director 4.10 42 2.20:1
3 Kirti Kumar Jain
Director Finance 1.80 Nil 0.96:1
4 Mohit Jaju
Executive Director 1.80 Nil 0.96:1
5# Syed Hussain
Independent Director 0.50 Nil 0.27:1
6# Dilip Patel
Independent Director 0.50 Nil 0.27:1
7# Ramesh Babu Telugu
Independent Director 0.50 Nil 0.27:1
8# Vimala Madon
Independent Director 0.50 Nil 0.27:1
9 Jeevan Innani
Company Secretary & Compliance Officer 3.60 Nil 1.93:1

# Sitting fees is also considered for calculation of remuneration for the above purpose

Percentage increase in the median remuneration of employees in the financial year:

The median remuneration is Rs. 15544 and the percentage increase in the medianremuneration of employees in the financial year is 3.62%.

Number of permanent employees on the rolls of company:

Number of employees on the roll of the Company as on 31st March 2016 was 95 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 in2015-16 was 5%. Percentage increase in the managerial remuneration for the year was 11%.

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 Whole-time Director and holds by himself or along with hisspouse and dependent children not less than 2% of the equity shares of the Company : NIL

Fraud Reporting

No cases of fraud have been reported to the Audit Committee / Board during thefinancial year under review.

Statutory Auditors

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 M/s S. Daga & Co. Chartered Accountants (FirmRegistration No. 000669 S) be and is hereby re-appointed (their appointment beingratified) as Statutory Auditors of the Company to hold office from the conclusion of thisAnnual General Meeting till the conclusion of the (29th) Annual General Meeting of theCompany to be held in the year 2017 (subject to ratication of their re-appointment atevery next Annual General Meeting) at such remuneration as may be mutually agreed uponbetween the Board of Directors and Statutory Auditors.

They have confirmed their eligibility to the effect that their re-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 March2016 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 2016 and of the profit /lossof the Company for that period. The Company has adopted weighted average policy in lieu ofFIFO policy for all inventories.

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.

Acknowledgment

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 : 28.05.2016 (Chairman) (Managing Director)
DIN: 00104601 DIN: 00104646

ANNEXURE I

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on Financial Year ended on 31st March 2016

Pursuant to Section 92 (3) of the Companies Act 2013 and rule 12(1) of the Company(Management & Administration) Rules 2014.

I. REGISTRATION & OTHER DETAILS:

1. CIN L24230TG1987PLC008016
2. Registration Date 2 December 1987
3. Name of the Company GODAVARI DRUGS LIMITED
4. Category/Sub-category of the Company Company Limited by Shares / Pharmaceutical Company
5. Address of the Registered office & contact details 1-8-303/34 Mayfair S.P. Road Secunderabad - 500 003.
Tel: 040 -27849700 27844557 Fax: 040-27849859
6. Whether listed company Yes
7. Name Address & contact details of the Registrar & Transfer Agent if any. CIL Securities Limited
214 Raghavaratna Towers Chiragali lane Abids Hyderabad - 500001.
Tel : 040 -23203155 Fax: 040 -23203028
Email: rta@cilsecurities.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of thecompany shall be stated)

S. No. Name and Description of main products / services NIC Code of the Product/service % to total turnover of the company
1 Ciprofloxacin HCL 21001 96.32%

III. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i: Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year[As on 01.04.2015] No. of Shares held at the end of the year[As on 31.03.2016]
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
A. Promoters
(1) Indian
a) Individual/ HUF 3721204 - 3721204 49.42 3721204 - 3721204 49.42 -
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - - - - - - - - -
e) Banks / FI - - - - - - - - -
f) Any other - - - - - - - - -
Total share- holding of Promoter(A) 3721204 - 3721204 49.42 3721204 - 3721204 49.42 -
B. Public Shareholding
1. Institutions
a) Mutual Funds - - - - - - - - -
b) Banks / FI 25227 37500 62727 0.83 25227 37500 62727 0.83 -
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture
Capital Funds - - - - - - - - -
f) Insurance Companies - - - - - - - - -
g) FIIs - - - - - - - - -
h) Foreign Venture Capital Funds - - - - - - - - -
i) Others (specify) - - - - - - - - -
Sub-total (B)(1) 25227 37500 62727 0.83 25227 37500 62727 0.83 -
2. Non-Institutions
a) Bodies Corp. 412789 70500 483289 6.42 549882 70500 620382 8.24 1.82
b) Individuals
i) Individual share- holders holding nominal share capital up to Rs. 1 lakh 1014707 290753 1305460 17.34 1164928 270253 1435181 19.06 1.72
ii) Individual share- holders holding nominal share capital in excess of Rs 1 lakh 1115871 480000 1595871 21.19 896608 480000 1376608 18.28 (2.91)
c) Others (specify) - - - - - - - - -
Non-Resident Indians 122756 227700 350456 4.65 83889 217200 301089 4.00 (0.65)
Overseas Corporate Bodies - - - - - - - - -
Foreign Nationals - - - - - - - - -
Clearing Members 11493 - 11493 0.15 13309 - 13309 0.18 0.03
Trusts - - - - - - - - -
Foreign Bodies - D R - - - - - - - - -
Sub-total (B)(2) 2677616 1068953 3746569 49.75 2708616 1037953 3746569 49.75 -
Total Public Shareholding (B)=(B)(1)+ (B)(2) 2702843 1106453 3809296 50.58 2733843 1075453 3809296 50.58 -
C. Shares held by Custodian for GDRs & ADRs - - - - - - - - -
Grand Total (A+B+C) 6424047 1106453 7530500 100.0 6455047 1075453 7530500 100.0 -

B) Shareholding of Promoters -

Sl. Shareholder’s Name Shareholding at the beginning of the year (As on 01.04.2015) Shareholding at the end of the year(As on 31.03.2016)
No. of Shares % of Total Shares of the Company % of Shares Pledge / encumbered to total Shares No. of Shares % of Total Shares of the Company % of Shares Pledge / encumbered to total Shares % change in share- holding during the year
1 Kamala Jaju 902676 11.99 0.00 902676 11.99 0.00 -
2 Sushma Kakani 952700 12.65 0.00 952700 12.65 0.00 -
3 Ghanshyam Jaju 343800 4.57 0.00 343800 4.57 0.00 -
4 Mukund Kakani 323100 4.29 0.00 323100 4.29 0.00 -
5 Mohit Jaju 223400 2.97 0.00 223400 2.97 0.00 -
6 Kirti Kumar Jain 159700 2.12 1.19 159700 2.12 1.19 -
7 Mangala Srimal 197000 2.62 2.62 197000 2.62 2.62 -
8 Prakash Chandra Shrimal 80000 1.06 1.06 80000 1.06 1.06 -
9 Jayashree Jain 27000 0.36 0.36 27000 0.36 0.36 -
10 Neeraj Jain 37900 0.50 0.00 37900 0.50 0.00 -
11 Manish Jain 33000 0.44 0.00 33000 0.44 0.00 -
12 Mohit Jain 36000 0.48 0.00 36000 0.48 0.00 -
13 Priyanka Jaju 125779 1.67 0.00 125779 1.67 0.00 -
14 Naina Jain 22149 0.29 0.00 22149 0.29 0.00 -
15 Tanushree Kakani 50000 0.66 0.00 50000 0.66 0.00 -
16 Akshiet Kakani 207000 2.75 0.00 207000 2.75 0.00 -

C) Change in Promoters’ Shareholding

There is no change Change in Promoters’ Shareholding during the year under review.

D) Shareholding Pattern of top ten Shareholders:

(Other than Directors Promoters and Holders of GDRs and ADRs):

Sl. No. Name of the shareholders Shareholding at the beginning of the year as on 01.04.2015 Shareholding at the end of the year as on 31.3.2016
No. of shares % of total shares of the company No. of shares % of total shares of the company
1 Highcrestt Global Company Ltd. 200000 2.66 200000 2.66
2 Shri Parasram Holdings Pvt.ltd 600 0.01 175768 2.33
3 Autofin Limited 139800 1.86 138800 1.84
4 Anuradha Karanjgaokar 100000 1.33 100000 1.33
5 Vrunda Karanjgaokar 100000 1.33 100000 1.33
6 Varun Jain 100000 1.33 100000 1.33
7 Swet Realtors Pvt. Ltd. 100000 1.33 100000 1.33
8 Ashwini Karanjgaokar 100000 1.33 100000 1.33
9 Karanjgaokar 80000 1.06 80000 1.06
10 Sanjay Jaju 75175 0.99 70575 0.94

E) Shareholding of Directors and Key Managerial Personnel:

Sr No Shareholder’s Name Shareholding Date* Increase/ (Decrease) in share holding Reason Cumulative Shareholding during the year (01.04.2015 to 31.03.2016)
No. of shares at the beginning (01.04.2015)/ end of the year (31.03.2016) % of total shares of the company No. of shares % of total shares of the company
01 Kirti Kumar Jain (Director & CFO) 159700 2.12 01.04.2015 Nil movement during the year
159700 2.12 31.03.2016 0 159700 2.12
02 Ghanshyam Jaju (Director & Chairman) 343800 4.57 01.04.2015 0 Nil movement during the Year 343800 4.57
343800 4.57 31.03.2016
03 Mukund Kakani (MD & KMP) 323100 4.29 01.04.2015 0 Nil movement during the year 323100 4.29
323100 4.29 31.03.2016
04 Mohit Jaju 223400 2.97 01.04.2015 0 Nil movemen t during the year 223400 2.97
(Director) 223400 2.97 31.03.2016
05 Dilip Patel (Director) 0 0 01.04.2015 0 Nil movement during the year 0 0
0 0 31.03.2016 0
06 Syed Hussain (Director) 0 0 01.04.2015 0 Nil movement during the year 0 0
0 0 31.03.2016 0
07 Ramesh Babu Telugu (Director) 2500 0 01.04.2015 0 Nil movement during the year 0 0.033
2500 0.03 31.03.2016 0
08 Vimala Madon 0 0 01.04.2015 0 Nil movement during the year 0 0
(Director) 0 0 31.03.2016 0
09 Jeevan Innani (KMP) 0 0 01.04.2015 0 Nil movement during the year 0 0
0 0 31.03.2016 0

F) INDEBTEDNESS: Indebtedness of the Company including interest outstanding/accrued butnot due for payment.

(Amount in Rupees)
Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 48394494 36428002 - 84822496
ii) Interest due but not paid - 2310183 - 2310183
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 48394494 38738185 - 87132679
Change in Indebtedness during the financial year
* Addition 68478761 4955493 - 73434254
* Reduction - - -
Net Change 68478761 4955493 - 73434254
Indebtedness at the end of the financial year
i) Principal Amount 116873255 37888090 - 154761345
ii) Interest due but not paid - 5805588 - 5805588
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 116873255 43693678 - 160566933

G) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

Sl. No. Particulars of Remuneration Name of MD / WTD/ Manager
Mukund Kakani K. K.Jain Mohit Jaju
1 Gross salary (excluding Commission)
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 410000 180000 180000
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 - - -
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 - - -
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission - - -
- as % of profit - - -
5 Others Allowances - - -
Total 410000 180000 180000
Ceiling as per the Act - - -

B. Remuneration to other Directors

Name of Director Sitting Fees (In Lacs.) Commission (In lacs) Total (In Lacs)
Shri Syed Hussain 0.50 Nil 0.50
Shri Dilip Patel 0.50 Nil 0.50
Shri Ghanshyam Jaju Nil Nil Nil
Shri Ramesh Telugu 0.50 Nil 0.50
Smt. Vimala Madon 0.50 Nil 0.50

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(Amount in Lakhs)

Sl. Particulars of Remuneration Key Managerial Personnel
CFO CS Total
1 Gross salary 1.8 3.6 5.4
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961 - - -
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 - - -
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 - - -
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission - - -
- as % of profit - - -
others specify.
5 Others please specify - - -
Total 5.4

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

No penalties/punishment/compounding of offences were levied under the Companies Act2013.

ANNEXURE - II

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto

1. Details of contracts or arrangements or transactions not at Arm’s length basis.

SL. No. Particulars Details
a) Name (s) of the related party & nature of relationship
b) Nature of contracts/arrangements/transaction
c) Duration of the contracts/arrangements/transaction
d) Salient terms of the contracts or arrangements or transaction including the value if any
e) Justification for entering into such contracts or arrangements or transactions’ NA
f) Date of approval by the Board
g) Amount paid as advances if any
h) Date on which the special resolution was passed in General meeting as required under first proviso to section 188

2. Details of contracts or arrangements or transactions at Arm’s length basis.

Name of Related Party Nature of Relationship Duration of Contract Salient Terms Amount (In Rupees)
Rent Paid:
Sushma Kakani Relative of KMP - NA 180000
Mohit Jaju KMP - 300000
Interest Paid:
Kamala Jaju Relative of Director NA 1168514
Ghanshyam Jaju HUF HUF NA 298572
Ghanshyam Jaju Director NA 1346815
Mukund Kakani Managing Director NA 1242665
Kirti Kumar Jain Director NA 360073
Mohit Jaju Director NA 1322901
Purchase of Stores:
A.K.Paper Products Pvt. Ltd. Associated Company Ongoing Based on Transfer Pricing Guidelines 252991
Sundry Creditors:
Sushma Kakani Relatives of KMP NA NA 205008
Loans:
Mohit Jaju Director Repayable after 31.03.2017 Carries interest rate of 15% p.a. 9268158
Mukund Kakani Managing Director Repayable after 31.03.2017 Carries interest rate of 15% p.a. 8266000
Kirti Kumar Jain Director Repayable after 31.03.2017 Carries interest rate of 15% p.a. 2356152
Ghanshyam Jaju Director Repayable after 31.03.2017 Carries interest rate of 15% p.a. 8645000
Ghanshyam Jaju (HUF) HUF Repayable after 31.03.2017 Carries interest rate of 15% p.a. 1903414
Kamala Jaju Relative of Director Repayable after 31.03.2017 Carries interest rate of 15% p.a. 7449366

ANNEXURE - III

a) Conservation of Energy

It is an ongoing process in the Company’s activities to conserve the energy. Thedetails are set out below:

Steps taken for conservation

Keeping in view the environment carbon mapping issue and rising fuel costs anddwindling non-replenishable resources the use of rice husk as agro waste fuel iscontinued for generation of steam required for the various applications.

The electrical power consumption is optimized by maintaining a power factor exceeding0.97.

Capital investment on energy conservation equipments: Nil

b) Technology Absorption

Efforts made for technology absorption:

Focus is always on new ideas & innovations to support existing businesses. Backwardintegration has been taken up through innovative technology and in-house R & D hasbeen successfully implemented. New equipments are installed and are running to achievecommercial implementations.

Benefits derived:

Focus on efficiency optimization has contributed on obtaining the targeted operations.Achieved better consistency of operation thereby reaching improved production process& improved cost of production.

Expenditure on Research & Development if any:

a. Capital Rs. Nil
b. Recurring Rs. 2514285/-
c. Total Rs. 2514285/-

d. Total R &D expenditure as a % of total turnovers: 0.35%

Details of technology imported if any NA
Year of import NA
Whether imported technology fully absorbed NA
Areas where absorption of imported technology has not taken place if any NA

Form for Disclosure of particulars with respect to Conservation of Energy

Particulars Unit

2015-16

2014-15

A. Power & Fuel Consumption
1. Electricity
a) Purchased
Units 000KWH

1962

1929

Total Amount Rs. In Lacs

147.98

138.79

Average cost Rs. / KWH

7.54

7.19

2. Coal
Quantity Tons

Nil

Nil

Total Cost / Average Cost Rs.In Lacs

Nil

Nil

3. Furnace OilQuantity

K.L.

Nil

Nil
Total Cost / Average Cost

Rs. In Lacs

Nil

Nil
Agro / Ind. Waste Quantity

Tons

3917.19

4641
Total Cost

Rs. In Lacs

123.30

150.57
Average Cost

Rs./ Ton

3.15

3244
4. Others /Internal Generation

Nil

Nil

Nil

Foreign Exchange Earnings/ Outgo:

Earnings The foreign exchange earnings on account of sale of goods were USD 1.66 Lakhs (Rs.108.25 lakhs)
Outgo The foreign exchange outgo on account of purchase of raw material is USD 59.60 Lakhs (Rs.3940.89 lakhs)

ANNEXURE IV

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st March 2016.

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

Godavari Drugs Limited

Secunderabad - 500003.

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Godavari Drugs Limited(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me/us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.

Based on our verification of the Godavari Drugs Limited’s books papers minutebooks forms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit We hereby report that in our opinion the companyhas during the audit period covering the financial year ended on 31st March 2016("Audit Period") complied with the statutory provisions listed hereunder andalso that the Company has proper Board-processes and compliance-mechanism in place to theextent in the manner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March2016 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India. (Notnotified during the Audit Period and hence not applicable).

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

We further report that having regard to the compliance system prevailing in theCompany and on examination of the relevant documents and records in pursuance thereof ontest-check basis the Company has complied with the following laws applicable specificallyto the Company and have obtained proper licences and their timely renewals:

(i) The Factories Act 1948

(ii) Food and Drugs Administration

(iii) The Environment (Protection) Act 1986

(iv) Air (Prevention and Control of Pollution) Act 1981 Water (Prevention andControl of Pollution) Act 1974 and Rules issued by the Maharashtra Pollution ControlBoard

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

All the decisions at Board Meetings and Committee Meetings are carried out unanimouslyas recorded in the minutes of meetings of the Board of Directors or Committee of the Boardas the case may be.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

For VSS & Associates
Company Secretaries
Sd/-
Vidya Harkut
Place: Hyderabad FCS No. : F 7086;
Date: 28.05.2016 C P No.:7534

‘ANNEXURE A’

To

The Members

Godavari Drugs Limited

Secunderabad - 500 003

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

For VSS & Associates
Company Secretaries
Sd/-
Vidya Harkut
Place: Hyderabad FCS No. : F 7086;
Date: 28.05.2016 C P No.:7534