BDH Industries Limited
Your Directors have pleasure in presenting 29th Annual Report and Audited Financial Statements for the year ended 31st March 2019.
FINANCIAL RESULTS :
The financial performance of the Company is summarized below :-
|(Rs. in Lakhs)|
|Profit before Interest and Depreciation||788.89||618.37|
|Profit before tax||654.33||517.76|
|Less: Provision for Taxation||158.64||127.43|
|Net Profit After Tax||482.99||376.48|
The standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under section 133 of the Companies Act 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and the Companies (Indian Accounting Standards) Amendment Rules 2016.
REVIEW OF OPERATIONS :
During the year 2018-19 Company achieved Sales (Net) of Rs. 5169.12 Lakhs as compared to Rs. 4107.47 Lakhs in the previous year registering growth of 26% over previous year. The Operating Profit of the Company i.e. Profit before Interest and Depreciation has increased from Rs. 618.37 lakhs in previous year to Rs. 788.89 lakhs in 2018-19. The Company earned Net Profit after Tax of Rs. 482.99 lakhs during the year as against Rs. 376.48 lakhs as in previous year a growth of 28% over previous year. An amount of Rs. 72.45 Lakhs is transferred to the General Reserve from the net profit of the financial year 2018-19.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:
No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relate and the date of the report.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
The Company continues to operate in one segment i.e. pharmaceuticals and there is no change in the nature of business of the Company.
Your Directors are pleased to recommend dividend of Rs. 2.75/- per equity share of face value Rs. 10/- each (previous year Rs. 2.25/- per share) for the financial year ended on 31st March 2019. The dividend on Equity Shares is subject to the approval of the shareholders at the Annual General Meeting. The total cash outflow on account of dividend payment including distribution tax will be Rs. 191 lakhs.
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
During the year Mr. A. V. Menon Independent Director aged 86 years completed his term of five years on 31st March 2019 and conveyed his desire of not seeking re-appointment for another term. Accordingly the tenure of Mr. A. V. Menon as a Director of the Company came to an end on 31st March 2019. The Board of Directors appreciated the valuable contribution and acknowledged the significant advises made by Mr. A. V. Menon in the management of the affairs of the Company during his term as a Director of the Company and as Chairman of Audit Committee and Nomination & Remuneration Committee. The Board of Directors wished him happiness and best of health in life. The Board of Directors appointed Mr. Kairav Trivedi as an Independent Director of the Company not liable to retire by rotation with effect from 1st April 2019 upto 31st March 2024 subject to approval of shareholders by ordinary resolution in this Annual General Meeting. Mr. Kairav Trivedi (DIN- 07893708) age 50 years holds the qualifications of M.Com FCA FCS LLB
MBA (JBIMS) F.IOD MCN and Insolvency Professional with 23 years of experience in senior management in the sectors - Pharma Automobile Power Plants Cement Dredging Ports SEZ Hospital Infrastructure etc. The Board of Directors re-appointed Mr. Bhagirath Singh and Dr. Dinesh Variar as Independent Directors of the Company not liable to retire by rotation for another (second) term of five consecutive years with effect from 1st April 2019 to 31st March 2024 subject to approval of shareholders by special resolutions in this Annual General Meeting. The Board of Directors at present has six members Ms. Jayashree Nair is the Chairperson and Managing Director of the Company. Mr. S. C. Kachhara is the Joint Managing Director and Chief Financial Officer of the Company. There are three independent directors on the Board of the Company Mr. Kairav Trivedi Dr. Dinesh Variar and Mr. Bhagirath Singh. There is one Non-Executive Director on the Board of the Company - Ms. Karthika Nair who retires by rotation at the forthcoming Annual General Meeting being eligible and offers herself for re-appointment. Accordingly the Board recommends her re-appointment. Ms. Jayashree Nair Managing Director Mr. S. C. Kachhara Joint Managing Director and Chief Financial Officer and Ms. Nikita Phatak Company Secretary of the Company are the Key Managerial Personnel of the Company. During the year six Board meetings were held details of which are given in the Corporate Governance Report.
DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors of the Company - Dr. Dinesh Variar Mr. Bhagirath Singh and Mr. Kairav Trivedi have submitted declaration complying with the criteria of independence as provided in Section 149(6) of the Companies Act 2013.
CONFIRMATION ON INDEPENDENCE OF INDEPENDENT DIRECTORS
The Board of Directors confirm that the independent directors of the Company fulfill the conditions specified in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and are independent of the management of the company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Directors state that :-
(a) In the preparation of the annual accounts the applicable accounting standards have been followed alongwith proper explanation relating to material departures;.
(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2019 and of the Profit of the Company for the year ended 31st March 2019.
(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors have prepared the annual accounts on a going concern basis and
(e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company has complied with the requirements of Corporate Governance. A report on Corporate Governance together with a certificate from Statutory Auditor forms part of this Annual Report. A declaration from Managing Director under regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is also attached to this report.
LISTING WITH STOCK EXCHANGE:
The equity shares of the Company are listed on BSE (Bombay Stock Exchange). The listing fee for year 2019-2020 has been paid by the Company.
NOMINATION AND REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors Senior Management and their remuneration. The details of the Nomination and Remuneration Policy are covered in the Corporate Governance Report. The said policy has also been uploaded on the Company's website at www.bdhind.com.
RISK MANAGEMENT POLICY:
The Company has adopted a Risk Management Policy to identify and categorize various risks implement measures to minimize impact of these risks and a process to monitor them on regular basis.
RELATED PARTY TRANSACTIONS:
There were no materially significant related party transactions during the year that have potential conflict with the interests of the Company. The transactions with related parties are disclosed in the notes to the financial statements. Form AOC-2 prescribed under the Companies Act 2013 and Companies (Accounts) Rules 2014 is furnished as Annexure V to this report. The Policy on Related Party Transactions is also hosted on the website of the Company www.bdhind.com.
The Company has established a Vigil Mechanism i.e. Whistle Blower Policy to enable the the Directors and employees to report to the Audit Committee genuine concerns unethical behavior and irregularities if noticed by them in the Company which could adversely affect Company's operations. The Whistle Blower Policy is also hosted on the website of the Company www.bdhind.com. During the year no concerns or irregularities have been reported by the employees or directors.
FORMAL ANNUAL EVALUATION:
As required under the Schedule IV of the Companies Act 2013 and Clause 49(II) (B)(6) of the Listing Agreement the Independent Directors at their separate meeting held on 26th March 2019 evaluated the performance of the non-independent directors and the Board as a whole. They also reviewed the performance of the Chairperson of the Company taking into account the views of the Joint Managing Director and also assessed the quality quantity and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonable perform their duties.
The Board assessed the performance of the independent directors as per the criteria laid down and have recommended their continuation on the Board. The Board of Directors assessed the performance of individual directors on the Board based on parameters such as relevant experience and skills focus on shareholder value creation governance standards knowledge of business processes and procedures followed integrity relationship with Management impact on key management decisions etc.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to financial statements. During the year such controls were tested and no reportable material weakness in the design or operation were observed.
The Company has not invited / accepted any deposits during the year under review as envisaged under sections 73 74 and 76 of the Companies Act 2013.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not made any loans to any third party as envisaged under section 186 of the Companies Act 2013. The Company has not given any guarantee other than bank guarantee in the normal course of business to meet the contractual obligations. The Board of Directors have authorized the Company to invest the surplus in deposits with Banks.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
During the year under review there have been no significant and material orders passed by any regulators / courts / tribunals that could impact the going concern status and the Company's operations in future.
CONSERVATION OF ENERGY AND TECHNOLOGY UPGRADATION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :
Pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 particulars of energy conservation technology absorption and foreign exchange earnings and outgo are appended hereto as Annexure IV and forms part of the Annual Report.
The properties and assets of your Company are adequately insured.
The Company has maintained cordial and harmonious relations with all its employees.
RESEARCH & DEVELOPMENT:
R&D Centre of the Company is recognized and registered with Department of Science and Industrial Research (DSIR) Ministry of Science & Technology Government of India. The R&D centre is also approved under section 35 (2AB) of the Income Tax Act 1961 for the purpose of weighted tax deduction. Research & Development being useful for the sustained growth of the Company investments in R&D are carried out to keep pace with changing domestic and global scenario.With qualified and experienced research team the Company has focused its thrust on development of new dosage forms and drug delivery systems improvement in processes and yield and cost reduction.
ENVIRONMENT HEALTH & SAFETY:
The Company is committed to environment protection and industrial safety. Our manufacturing facility has been accredited with WHO-GMP and complies with applicable environment regulations of Maharashtra Pollution Control Board. Our manufacturing facility is accredited with ISO 9001:2015 certification from SGS United Kingdom Limited. The Company conducts medical check-up programs first aid sessions and fire safety sessions for employees.
a. The Company has entered into power generation business and installation of two units of wind turbines 0.8 MW each has been completed at Jaisalmer district Rajasthan. Since Power Purchase Agreement (PPA) is not yet signed by State Government of Rajasthan alternate commercial proposals are being evaluated.
b. The Company has also entered into agro products business. The plantation of cashew mango and coconut grafts has been completed. The Company has renewed lease agreement of warehouse at MIDC Kudal.
CORPORATE SOCIAL RESPONSIBILITY:
The Company is committed to good corporate citizenship. As a part of Corporate Social Responsibility the Company has undertaken activities in the field of education. The CSR Policy of the Company is placed on the webite of the Company www.bdhind.com During the year the Company has supported the educational projects undertaken by charitable trusts and municipal schools. Pursuant to the provisions of the Section 135(2) of the Companies Act 2013 the Report on CSR Activities is enclosed as Annexure I of this report. ANNUAL RETURN:
The Annual Return of the Company as on 31st March 2019 is placed on its website - www.bdhind.com in the Investors Section.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND AMOUNT AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) :
Pursuant to sections 124 and 125 of the Companies Act 2013 read with Investor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules) dividends if not claimed for a consecutive period of 7 years from the date of transfer to unpaid dividend account of the Company are liable to be transferred to the Investor Education and Protection Fund. Further shares in respect of such dividend which have not been claimed for a period of 7 consecutive years are also liable to be transferred to the demat account of the IEPF Auhority. As a proactive measure to safeguard the interest of the shareholders the Company sends reminders to the shareholders to claim their dividends before transfering the same to IEPF Authority. Notices in this regard are also published in the newspapers uploaded on BSE website and the details of unclaimed dividends and shareholders whose shares are liable to be transferred to the IEPF Authority are uploaded on the Company's website.
The unclaimed dividend and shares transferred to IEPF during the year 2018-19 are as follows :-
|Financial Year||Amount of unclaimed dividend transferred||Number of shares transferred|
The Company has also uploaded the details of abovementioned shares on the website of IEPF Authority www.iepf.gov.in The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares.
Members may note that the shares and unclaimed dividend transferred to IEPF Authority can be claimed by filing online application in prescribed form no. IEPF 5 available on www.iepf.gov.in and sending physical copy of same duly signed to the Company alongwith requisite documents.
The unpaid/unclaimed dividend for the year 2011-12 onwards will be transferred to IEPF as given below :-
|Financial Year||Date of Declaration||Due date for transfer to IEPF|
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is included in this Annual Report.
AUDITORS AND AUDITORS' REPORT: STATUTORY AUDIT:
M/s. CLB & Associates Chartered Accountants (Firm Registration No. 124305W) are the Statutory Auditors of the Company for a period of 5 years till the conclusion of the Company's 32nd Annual General Meeting. The Auditors Report read with the notes to accounts are self-explanatory. There are no qualifications reservations or adverse remarks made by the Auditors. The Statutory Auditors have submitted No Disqualification Certificate for the financial year 2019-20 to the Board of Directors of the Company.
Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Mangerial Personnel) Rules 2014 M/s JHR & Associates Practising Company Secretaries were appointed as the Secretarial Auditors for auditing secretarial records maintained by the Company for the financial year ended on 31st March 2019. The Secretarial Audit Report is annexed herewith to the Directors Report in Annexure II. There are no qualifications reservations or adverse remarks made by the Secretarial Auditors.
RATIO OF REMUNERATION:
As required under Section 197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnal) Rules 2014 the required details are given below:
|Directors||Ratio to Median Remuneration|
|Ms. Jayashree Nair||31:1|
|Mr. S. C. Kachhara||31:1|
|Mr. A. V. Menon||0.45:1|
|Dr. Dinesh Variar||0.37:1|
|Mr. Bhagirath Singh||0.45:1|
|Ms. Karthika Nair||0.33:1|
b. The percentage increase in remuneration of Ms. Jayashree Nair Managing Director is 22% Mr. S. C. Kachhara Joint Managing Director and Chief Financial Officer is 22% (as approved by members in 26th Annual General Meeting) and Ms. Nikita Phatak Company Secretary is 26%
c. The median remuneration of employees increased by 26% in the financial year.
d. There are 124 permanent employees on the rolls of the Company.
e. The Company's PAT increased from Rs. 376.48 lakhs to Rs. 482.99 lakhs an increase of 28% against which the average increase in remuneration is 26% and this increase is aligned with the Company's Remuneration Policy.
f. The aggregate remuneration of key managerial personnel (KMP) is Rs. 176.48 lakhs revenue of the Company during the year is Rs. 5257.66 lakhs and the remuneration of KMP is 3.36% of revenue.
g. The market capitalization of the Company as on 31st March 2019 was Rs. 42.75 crores and as on 31st March 2018 it was Rs. 40.27 crores. The PE ratio of the Company as on 31st March 2019 was 8.84 and as on 31st March 2018 was 10.70. The Company made public offer of equity shares (of face value Rs. 10/- each share) at premium (of Rs. 30/- each share) in the year 1995.
h. The average percentile increase in salaries of employees other than managerial personnel is 26% and increase in managerial remuneration is 22% as approved by members at the 26th Annual General Meeting.
i. There is no variable component linked to various parameters financial and non-financial in the remuneration availed by the directors.
j. During the year there was no employee who is not a director of the Company and received remuneration in excess of the highest paid directors.
k. We affirm that the remuneration paid is as per Remuneration Policy of the Company.
The Company has an internal complaints committee under the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 for prevention and redressal of complaints of sexual harassment at workplace. The Company has not received any complaint during the year ended 31st March 2019 pursuant to the said Act.
Your Directors thank statutory authorities and bankers for co-operation extended by them to the Company. Your Directors place on record their sincere appreciation of the continued support by the employees and finally thank the shareholders for the trust placed by them with the Company.
|FOR AND ON BEHALF OF THE BOARD|
|Mumbai 29th May 2019||Chairperson & Managing Director|
|Registered Office :|
|Nair Baug Akurli Road|
|Kandivli (East) Mumbai 400101|
|Tel. No. :022-61551234|
|Fax No. :022-28868349|
|Email : firstname.lastname@example.org|
|Website : www.bdhind.com|
|CIN : L24100MH1990PLC059299|