To the Members
Your directors have pleasure in presenting the Eleventh Annual Report on the businessand operations of Company and the financial accounts for the year ended 31stMarch 2016.
The financial highlights of your Company for the year ended 31st March2016 are summarized below:
| || ||(Rs. In Lakhs) |
|Particulars ||2015-16 ||2014-15 |
|Net Sales ||3595.88 ||3166.83 |
|Less: Total Expenses ||3024.05 ||2660.86 |
|Operating Profit ||571.83 ||505.97 |
|Less: Interest Expenses ||343.73 ||359.54 |
|Profit Before Tax ||228.10 ||146.43 |
|Profit After Tax ||226.93 ||146.37 |
|Surplus carried forward to Balance Sheet ||226.93 ||146.37 |
|Basic Earnings per share (In Rs.) ||2.40 ||1.55 |
Kindly refer to Management Discussion & Analysis and Corporate Governance Reportannexed as ANNEXURE IV and forms part of this report
Your Directors have recommended retaining the profit and declaring no dividend for thefinancial year 2015-16. The dividend policy for the year under review has been formulatedtaking into consideration the growth of the company and reduce the debt servicing burden.
Full version of the Annual Report 2015-16 containing complete Balance Sheet Statementof Profit & Loss other statements and notes thereto prepared as per the requirementsof Schedule III to the Companies Act 2013 Directors' Report (including ManagementDiscussion and Analysis Corporate Governance Report) are being sent via email to allshareholders who have provided their email address(es).
Full version of Annual Report 2015-16 is also available for inspection at theregistered office of the Company during working hours upto the date of ensuing AnnualGeneral Meeting (AGM). It is also available at the Company's website at www.rjbiotech.com
During the period under review the rating committee of ICRA after due considerationassigned a long term credit rating of [ICRA] BB+ (pronounced as ICRA double B plus) to theline of credit facility enjoyed by the Company. The outlook on the long term rating isstable.
Company continues to adhere to better Corporate Governance true & fair practices.A detailed report is annexed as ANNEXURE I and forms part of this report. The Certificateissued by Nitin S. Sharma Practising Company Secretary confirming the compliance of theconditions of Corporate Governance as stipulated under Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed asANNEXURE II and forms part of this report.
Director retiring by rotation:
Mr. Raghavendra Joshi (holding DIN 00307124) retires by rotation under Section 152 ofthe Companies Act 2013 and being eligible offers himself for re-appointment.
The brief resume of Mr. Joshi the nature of his expertise in specific functionalareas names of the companies in which he has held directorships committee memberships /chairmanships his shareholding etc. are furnished in the explanatory statement to thenotice of the ensuing AGM.
Declaration by Independent Directors:
Your Company has received declarations from Mr. Chandra Prakash Tripathi Mr. BalajiSingh and Mr. Anil Dharmadhikari Independent Directors under provisions of Section149(7) of the Companies Act 2013 stating that they meet the criteria of independence asprovided under sub-section (6) of Section 149 of the Companies Act 2013
Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
|Mr. Mitesh Gadhiya ||Company Secretary |
|Mrs. Aarti Pawar ||Chief Financial Officer |
Mr. Omprakash Jaiswal has resigned as the Chief Executive Officer and Manager of theCompany on March 31 2016.
Mr. Ravikumar Venkata Singamsetty has been appointed as Manager with effect from 1stJune 2016 subject to the approval of Shareholders in the ensuing Annual General Meeting.
Number of Meetings of the Board of Directors and Committee Meetings
The details regarding the number of meetings of the Board of Directors and Committeemeetings during the period under review is given in the Corporate Governance Report.
Performance Evaluation of the Board its Committees and Individual Directors
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors.
In the Ninth Annual General Meeting of the Company M/s Ashok Patil & AssociatesChartered Accountants (ICAI Registration No. 122045W) were appointed as the StatutoryAuditors of the Company to hold office until the conclusion of the Fourteenth AnnualGeneral Meeting subject to ratification of the members in every Annual General Meeting.Board recommends their ratification as statutory auditors for Financial Year 2016-17.
Statutory Auditors Comments on their Report:
The Statutory Auditors have made certain. The disclaimer made by the Statutory Auditorsin Annexure A to the Auditors Report is as follows:
1. Point No. vii (a) says that: As observed by us during the course of our examinationof the books of accounts carried out in accordance with generally accepted auditingprinciples in India company has generally been regular in depositing undisputed statutorydues including Provident Fund Sales Tax Local Body Tax Service Tax Cess and any otherstatutory dues with the appropriate authorities except undisputed demand for TDS defaultsof Rs. 824491/- and Income Tax demand of Rs. 19019/- u/s 143(3) for whichrectification u/s 154 is pending and Income Tax demand pertaining to A.Y. 2014-15 of Rs.12296150/-as per assessement u/s 143(1) but it has not yet been confirmed asassessment u/s 143(3) is in progress.
2. Point No. viii says that: In our opinion & according to the information given tous the company has not defaulted in repayment of dues to the financial institutions andbank except: Details of default in repayment of loans.
Directors Comments on the Statutory Auditors Report:
1. The disclaimers made by the Statutory Auditors in Point No. vii (a) are selfexplanatory.
2. Financial year 2015-16 witnessed below normal monsoon and unseasonal rains. Thisunfavourable climatic condition adversely affected the farmer community who are theultimate consumers for the company's product. This in turn had an adverse effect on thecash flow of the Company due to which the repayment of the bank credit facilities couldnot be done within time. The Company has taken appropriate measures to curtail itsoperating cost in order to improvise its cash flow so that the timely repayments for thebank credit facilities could be done.
As per the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed M/s Nitin S. Sharma & Associates Practising CompanySecretaries Aurangabad to undertake the Secretarial Audit of the Company for the FY2015-16. The Secretarial Audit Report in Form No MR-3 for the FY 2015-16 is annexedherewith as ANNEXURE III and forms a part of this report.
There are no qualifications or observations or other remarks mentioned by theSecretarial Auditors in their Report for the financial year 2015-16 which call for anyexplanation from the Board of Directors.
Internal Financial Control System
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has a well placed proper and adequate IFC system which ensures that allassets are safeguarded and protected and that the transactions are authorised recordedand reported correctly. The Internal Auditors are an integral part of the internal controlsystem of the Company. To maintain its objective and independence the Internal Auditorsreport to the Audit Committee of the Board. The Internal Auditors monitor and evaluate theefficacy and adequacy of internal control systems in the Company.
Adequacy of Internal Financial Controls with reference to the financialstatements
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl system in the company which should be adequate and shall operate effectively. Rule8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regarding adequacyof Internal Financial Controls with reference to the financial statements to be disclosedin the Board's report.
Management Discussion and analysis:
A detailed report on the Management Discussion and analysis is annexed as ANNEXURE IVand forms part of this report.
Vigil Mechanism for Directors and Employees
Pursuant to the provisions of Section 177(9) and (10) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 the Company has in place a vigil mechanism forDirectors and employees of the Company.
Nomination and Remuneration Policy:
Pursuant to the requirement under Section 134(3) (e) and Section 178(3) of theCompanies Act 2013 the Nomination and Remuneration Committee of the Board of Directorshas in place a policy which deals with the manner of selection of Board of Directors andManaging Director and their remuneration. The Nomination and Remuneration policy of theCompany is available on Company's website www.rjbiotech.com.
Particulars of remuneration of Directors / KMP / Employees
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rules 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached to this Report as ANNEXUREV.
Related Party Transactions:
Pursuant to Sub-Section 1 of Section 188 of the Companies Act 2013 there were norelated party transactions entered into by the Company during the financial year 2015-16.The related party disclosures as per Accounting Standard 18 issued by the Institute ofChartered Accountants of India are as mentioned in Note No. 33 of Notes to Accounts inthe Annual Report.
The conservation of Energy and Technology Absorption Foreign Earnings andOutgo:
Information in accordance with the provisions of Section 134 (3) (m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is given in ANNEXURE VI whichforms part of this Report.
Particulars of Loans Guarantees or Investments under Section 186 of theCompanies Act. 2013
There is no loan given or guarantee provided or investment made by the Company duringthe financial year 2015-16 as per Section 186 of the Companies Act 2013.
Extract of the Annual Return
In accordance with requirements under Section 134(3)(a) of the Companies Act 2013 thedetails forming part of the extract of the Annual Return in form MGT 9 is given inANNEXURE VII.
Disclosure on Audit Committee
The Audit Committee as on March 31 2016 comprises of the following IndependentDirectors:
i. Mr. Balaji Prithviraj Singh (Chairman)
ii. Mr. Chandra Prakash tripathi
iii. Mr. Anil Vasant Dharmadhikari
All the recommendations of the Audit Committee were accepted by the Board of Directors.
Risk Assessment and Management:
Your Company has been on a continuous basis reviewing and streamlining its variousoperational and business risks involved in its business. Your Company also takes allefforts to train its manpower from time to time to handle and minimise these risks.
Directors Responsibility Statement:
Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that no material departures have been made from the same;
(b) the Directors have 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 and ofthe profits of the Company for that period;
(c) the Directors have 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 Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls for the Company and suchinternal financial controls are adequate and operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.
Your Company has not accepted any deposits under Section 73 of the Companies Act 2013during the period under review.
Nature of Business:
There has been no change in the nature of business of the Company.
The Company enjoyed cordial relations with its employees at all levels. Your Directorsappreciate the support and co-operation provided by all the employees.
Your Company's shares continue to be listed on the SME platform of BSE Limited and areactively traded. The listing fee to BSE Limited for the year 2016-17 has been paid by yourCompany.
Policy against Sexual Harassment at Workplace:
Pursuant to the provisions of Section 4(1) of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 the Company has in place anInternal Complaints' Committee. The following is a summary of sexual harassment complaintsreceived and disposed off during the year
No. of complaints received: Nil
No. of complaints disposed off: NA
Code of conduct for prevention of insider trading and code of practices andprocedures for fair disclosure of unpublished price sensitive information:
In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 as amended from time to time the Board of Directors of theCompany have approved and adopted the Code of Conduct for prevention of Insider Trading inthe securities of the Company and procedures for fair disclosure of unpublished pricesensitive information with effect from June 8 2015.
Policy for preservation of documents and archival policy:
In compliance with Regulation 9 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended from time to timethe Board at its meeting held on February 2 2016 has approved and adopted the policy forpreservation of document.
Your Directors are pleased to express their gratitude for all the co-operation andassistance received from bankers members customers vendors various Governmentauthorities and employees for their support and faith in the Company.
|Date: 31st August 2015 ||For and on Behalf of Board |
|Place: Aurangabad ||Sd/- |
| ||RAGHAVENDRA JOSHI |
| ||(Chairman) |