TO THE MEMBERS
The Directors have pleasure in presenting before you the THIRTY FIRST AnnualReport of SANDU PHARMACEUTICALS LIMITED together with Audited Balance Sheet and Statementof Profit & Loss for the financial year ended 31st March 2016.
1. FINANCIAL RESULTS:-
The Companys financial performance for the year ended March 31 2016 issummarized below:
|Particulars ||2015-16 ||2014-15 |
|Revenue from Operation (Gross) ||467838570 ||447343026 |
|Less Excise Duty ||7303840 ||5127185 |
|Less Trade Discount ||50012086 ||48013846 |
|Add Insurance claim received ||261650 ||1814304 |
|Revenue from operations (net) ||410784293 ||396016299 |
|Other Income ||1452085 ||1368833 |
|Total revenue ||412236378 ||397385132 |
|Total Expenses ||405441969 ||391097712 |
|Profit Before Tax ||6794431 ||6287420 |
|Less: Current Tax ||2150000 ||1250000 |
|Deferred Tax ||(734540) ||900793 |
|Profit after Tax ||5378971 ||4136627 |
|Earnings per share (of Rs.10/- each) || || |
|(a) Basic || || |
|(i) Continuing operations ||0.76 ||0.58 |
|(ii) Total operations ||0.76 ||0.58 |
REVIEW OF OPERATIONS
In the financial year 2015-16 the company achieved an Income from operations ofRs.467838570 as compared to Rs.447343026 in the previous year.
Profit before tax was Rs.6794431 for the year ending 31st March 2016 as compared toProfit of Rs.6287420in the previous year.
Profit after tax was Rs.5378971 for the year ended 31st March 2016 as compared to aProfit of Rs.4136627 in the previous year.
There were no material changes and commitments affecting the financial position of theCompany from the end of the financial year till the date of the Directors Report.
Due to insufficient funds yours directors do not recommend any dividend.
3. RISK MANAGEMENT:
The Board has laid down a clear Risk Management Policy to identify potentialbusiness risks and install effective mitigation processes to protect Companys assetsand business Risks. Risk assessment and minimization plan are reviewed by the Board on aperiodic basis. Risk Management Policy and the details of this policy are available on thewebsite of the Company under the web link http://www.sandu.in/Risk_ Managment_Policy.pdf
4. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY :
The Company has adequate Internal Financial Control Systems commensurate with thesize scale and complexity of its operations. The Management evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company on an ongoing basis.
5. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors had approved the Policy on Whistle Blower. This Policy inter-alia providesa direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.Whistleblower Policy approved and adopted by the Board of Directors can be accessed in ourwebsite http://www.sandu.in/vigil_ mechanism_policy.pdf
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-
Shri. Shashank B Sandu holding DIN: 00678098 (Non Executive Director) retires byrotation and being eligible offer himself for re appointment.
All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation25 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
6.1. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance the directors individually as well as the evaluation of theworking of its Audit Nomination & Remuneration and Stakeholders RelationshipCommittee. The manner in which the evaluation has been carried out has been given in theCorporate Governance Report. The Weblink of familiarization Programme undertaken forIndependent Director will be available on http://www.sandu.in/Familiarisation_Programme_for_Independent_Director-new.pdf.
The Nomination and Remuneration Committee has defined the evaluation criteria andprocedure for the Performance Evaluation process for the Board its Committees andDirectors. The criteria for Board Evaluation include inter alia Board structure andcomposition establishment and delineation of responsibilities to various Committeeseffectiveness of Board processes information and functioning.
Criteria for evaluation of individual Directors include aspects such as attendance andcontribution at Board/ Committee Meetings and guidance/ support to the management outsideBoard/ Committee Meetings. In addition the Chairman was also evaluated on key aspects ofhis role including setting the strategic agenda of the Board encouraging activeengagement by all Board members and motivating and providing guidance to the ManagingDirector/Executive Director.
Criteria for evaluation of the Committees of the Board include degree of fulfillment ofkey responsibilities adequacy of Committee composition and effectiveness of meetings.
6.2 NOMINATION AND REMUNERATION POLICY
The policy of the Company on Directors Appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatter as required under sub section (3) of section 178 of the Companies Act 2013 isavailable on our website http://www.sandu.in/ Nomination_and_Remuneration_Policy_ new.pdf.There has been no change in the policy since the last fiscal year. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the company.
During the year Five Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
The details of the composition of the Audit Committee are given in the corporateGovernance Report. During the year all the recommendations of the Audit Committee wereaccepted by the Board.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our corporate governance policies are available on ourwebsite www.sandu.in. The policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe Company are as follows:
|Name of the Policy ||Brief Description ||Web link |
|Whistleblower Policy ||The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behaviour actual or suspected frauds or violation of the Companys code of conduct and ethics. ||http://www.sandu.in/Whistle_ Blower__Policy_new.pdf |
| ||There has been no change to the Whistleblower Policy adopted by the Company during the fiscal 2016 || |
|Nomination and Remuneration Policy ||This policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a director (executive/non executive) and also the criteria for determining the remuneration of the directors key managerial personnel and other employees. ||http://www.sandu. in/Nomination_and_ Remuneration_Policy_new.pdf |
|Related Party Transaction Policy ||The policy regulates all transactions between the company and its related parties ||http://www.sandu.in/Related_ Party_Transaction_Policy-new. pdf |
|Insider Trading Policy ||The Policy provides framework in dealing with securities of the Company ||http://www.sandu.in/Insider_ Trading_Policy_new.pdf |
|Policy for determining Materiality of event or Information ||This Policy for Determination of Materiality of Events or Information is aimed at providing guidelines to the management of Sandu Pharmaceuticals Limited to determine the materiality of events or information which could affect investment decisions and ensure timely and adequate dissemination of information to the Stock Exchange(s) (as hereinafter defined). ||http://www.sandu.in/Policy_ on_Determining_Materiality_ of_Events.pdf |
|Archival Policy ||The Policy deals archival of corporate records of Sandu Pharmaceuticals Limited ||http://www.sandu.in/ Archival__Policy.pdf |
|Board Diversity Policy ||This policy aims to set out the approach to achieve diversity on the Board of Directors ("Board") of Sandu Pharmaceuticals Limited ||http://www.sandu.in/Policy_ on_Board_Diversity_new.pdf |
7. DIRECTORS RESPONSIBILITY STATEMENT:-
In accordance with the provisions of section 134(3) (c) read with section 134(5) of theCompanies Act 2013 your Directors confirm that:
(a) In the preparation of annual accounts for the year ended 31st March 2016 theapplicable accounting standards read with the requirements set out under Schedule III tothe Act have been followed and there are no material departures from the same;
(b) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on 31st March 2016 and of the profit ofthe Company for the year ended on that date;
(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
(d) The annual accounts have been prepared on a going concern basis.
(e) Internal financial controls to be followed by the Company have been laid down andthat such internal financial controls are adequate and are operating effectively; and
(f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
8. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Section 135 of the Companies Act 2013 relating to Corporate Social Responsibility isnot applicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
9. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVES
The Company has not transferred amount to any reserves and hence it is NIL
10. RELATED PARTY TRANSACTIONS:
The related party contracts entered into by the Company with Sandu Brothers PrivateLimited do not fall under the ambit of Section 188(1) of the Act and all related partytransactions during the financial year were at arms length and in the ordinarycourse of business. In compliance with the provisions of the Act and Regulation 23(2) ofthe SEBI Regulation 2015 all related party transactions had been placed before the AuditCommittee for prior approval. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2)of the Companies (Accounts) Rules 2014 information pertaining to related parties aregiven in Form AOC-2 as Annexure I of this Report.
Further pursuant to regulation 23 read with sub regulation 8 of SEBI (ListingObligation and Disclosure Requirement) Regulations 2015 All existing material relatedparty contracts or arrangements entered into prior to the date of notification of theseregulations shall be placed for approval of the shareholders in the first General Meetingsubsequent to notification of theseregulations.Henceinordertocomplywith Regulation 23(8)of SEBI Regulation 2015 the Board of Directors recommends shareholders approval for theabove prospective material transaction in the ensuing Annual General Meeting of theCompany.
11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant material orders passed by the Regulators/Courts which couldimpact the going concern status of the Company and its future operations.
12.1. STATUTORY AUDITORS
M/s Joshi Joshi & Co Statutory Auditor of the Company retires at the conclusion ofthe ensuing Annual General Meeting.
M/s Dileep and Prithvi Chartered Accountants has been proposed to be appointed asStatutory Auditor of the Company as recommended by Members of Audit Committee and Board ofDirectors. They have confirmed their eligibility to the effect that their appointment ifmade would be within the prescribed limits under the Act and that they are notdisqualified for appointment
12.2 SECRETARIAL AUDITOR:
Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Mr Bharatkumar Pomai Company Secretary in practice to undertake the SecretarialAudit of the Company for the Financial Year 2015-16. The Secretarial Audit report isannexed herewith as "ANNEXURE B".
13. INTERNAL COMPLAINTS COMMITTEE
As per provisions of Section 4 of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 your Company has constituted anInternal Complaints Committee for Redressal of complaints against sexual harassment andthere were no complaints received during the financial year.
14. DISCLOSURE REQUIREMENTS
Your Company has complied with all the mandatory requirements of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Management Discussion and Analysis is annexed as "ANNEXURE A"to the report
Secretarial Audit Report as "ANNEXURE B".
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 with the Stock Exchanges a separate section on the corporate governance is annexedas "Annexure - C"
Auditors Certificate on Corporate Governance "Annexure D"
Certificate from Chief Financial Officer under Reg 17(8) of SEBI (LODR)Regulation
15. CONSERVATION OF ENERGY RESEARCH
AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) CONSERVATION OF ENERGY:
a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.
d) The required data with regard to conservation of energy as applicable to our companyis furnished below:
|Particulars ||For the year ended 31.03.2016 ||For the year ended 31.03.2015 |
|1. ELECTRICITY || || |
| Purchased (units) ||234722 Units ||257556 Units |
| Total Amount Rs ||Rs.1533339/- ||Rs.1377274/- |
| Rate/Units in Rs ||Rs.6.53 / Unit ||Rs.5.34/ Unit |
|2. FUEL CONSUMED || || |
| Quantity ||5449.66 Ltrs ||9410.63 Ltrs |
| Total Amount ||Rs.310800/- ||Rs.544150/- |
| Rate per litre ||Rs.57.03 / Ltr ||Rs.57.825/ Ltr |
B) TECHNOLOGY ABSORPTION:
Companys products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company constantly strives for maintenance and improvement in quality ofits products and entire Research & Development activities are directed to achieve theaforesaid goal.
C) FOREIGN EXCHANGE EARNINGS AND OUT-GO :
During the period under review there was no foreign exchange earnings or out flow.
16. EXTRACT OF ANNUAL RETURN
As provided under section 92 (3) of the Act the extract of the Annual Return in formMGT- 9 is annexed herewith as "Annexure G" which forms part of this report.
17. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL
The information required under section 197 of the Act read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company and Directors is annexed as "Annexure H" to this report.
18. FIXED DEPOSITS:-
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 during thefinancial year 2015-16.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:-
The Company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.The details of the Investments made by the Companyis given in the notes to the financial statements.
20. PARTICULARS OF CONTRACT OR ARRANGMENTS WITH RELATED PARTY
During the year under review the Company had not entered into any contract /arrangement / transaction with the related parties which could be considered material asper SEBI (LODR) Regulations 2015.
21. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. www.sandu.in. The Code of Conduct for Directors has been posted onhttp://www. sandu.in/Code_of_Conduct_for_Directors-new. pdf and for Senior ManagementPersonnel http://www.sandu.in/Code_of_Conduct_for_ Senior_Managment-new.pdf
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the designated employees and personnel have confirmed compliance with the Code. TheDeclaration signed by the Managing Director pursuant to Regulation 26(3) read withSchedule V (Part D) of the SEBI (LODR) Regulation 2015 is published in this report.
22. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prohibition of Insider Trading with aview to regulate trading in securities by the Directors and Designated employees of theCompany. The Code requires pre-clearance for dealing in the Companys shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code.
All Board of Directors and the designated employees have confirmed compliance with theCode. Code of Conduct for Prohibition of Insider Trading is available on website of theCompany under the web link www.sandu.in
23. 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 thereto excludingthe information on employees particulars which is available for inspection by themembers at the Registered office of 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 in advance.
24. AUDITORS REPORT AND SECRETARIAL AUDIT REPORT
The Auditors Report and Secretarial Auditors Report does not contain anyqualification reservation or adverse remarks.
25. CLOSURE OF SANDU AYURVEDIC PANCHAKARMA CENTER UNIT OF SANDU PHARMACEUTICALSLIMITED.
The Company by passing circular resolution dated 30th January 2016 haveclosed its unit named Sandu Ayurvedic Panchakarma Center due to inadequate profits fromrunning the unit as compared to the investments made in the unit and also non renewal ofLeave and License agreement by the lessor.
Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous cooperation and assistance.
For Sandu Pharmaceuticals Limited
By order of Board of Directors
Bhaskar G Sandu