Your Directors are pleasured to present the 39th ANNUAL REPORT together withthe Audited Financial Statements for the Financial Year 2019 20 ended 31stMarch 2020.
1. FINANCIAL RESULTS :
(Rs. in Lakh)
|Particulars ||2019-20 ||2018-19 |
|Operating Profit (Before Interest & Depreciation) ||1528.28 ||1553.08 |
|Less : Interest/Finance Cost ||289.18 ||325.24 |
|Profit before Depreciation ||1239.10 ||1227.84 |
|Less: Depreciation and amortization expenses ||666.45 ||635.69 |
|Profit before Tax ||572.65 ||592.15 |
|Less: Current Tax ||122.42 ||128.91 |
|(Add): MAT Credit ||- ||(128.91) |
|Less / (Add): Deferred Tax Liability / (Asset) ||28.83 ||(42.80) |
|Profit after Tax ||421.40 ||634.95 |
There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2020 and date of this report.
With a view to conserve the resources for the working capital requirement of theCompany the Board of Directors has not recommend any dividend for the financial yearunder review ended on 31st March 2020.
The revenue from operations i.e. transfusion solution in Bottles and Plastic Bottlesstood at Rs. 136.15 Crore during the financial year 2019-20 under review compared to Rs.124.13 Crore of previous year 2018-19. The Company's manufacturing license is valid tillDecember 2022.
During the year under review the export market was explored in more detail and I.V.products in plastic bottles were exported to new destinations. Further efforts areunderway for increasing exports to various countries.
4. NEW PROJECTS:
Due to the recent COVID Pandemic certain growth plans of the company were kept on hold.However once normalcy is restored the company intends to pursue its growth plans and alsoincrease its focus on cost cutting measures.
5. COVID-19 PANDEMIC:
Due to outbreak of Covid-19 globally and in India the Company's management has madeinitial assessment of likely adverse impact on business and financial risks on account ofCovid-19. There is slow down in the business of the Company due to lockdown which hadimpact on operations. However the management does not see any medium to long term risksin the Company's ability to continue as a going concern and meeting its liabilities andcompliance with the debt covenants applicable if any.
The Equity Shares of the Company are listed on BSE Limited. The Company is regular inpayment of Annual Listing Fees. The Company has paid Listing fees up to the year 2020-21.
7. SHARE CAPITAL:
The paid up Share Capital of the Company as on 31st March 2020 was Rs.1387.67 Lakhs. As on 31st March 2020 the Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity and none of theDirectors of the Company hold any convertible instruments.
Your Company does not propose to transfer any amount to general reserve.
9.1 Dr. Gauri S. Trivedi Dr. Gaurang K. Dalal and Mr. Janak G. Nanavati in the 38thAGM held on 26th September 2019 have been re-appointed as IndependentDirectors of the Company for a second consecutive term of 5 years from the conclusion of38th AGM upto the conclusion of the 43rd AGM. Further Mr. NahooshJariwala was appointed as Independent Director for a term of 5 consecutive years w.e.f. 18thMarch 2019.
9.2 Ms. Anar H. Patel retires by rotation in terms of the Articles of Association ofthe Company. However being eligible offers herself for re-appointment.
9.3 The Board based on the recommendations of the Nomination and RemunerationCommittee had appointed Mr. Hemendra C. Shah as Additional Independent Director w.e.f. 24thFebruary 2020 to hold the office upto the date of forthcoming 39th AnnualGeneral Meeting (AGM). It is proposed to appoint Mr. Hemendra C. Shah as an IndependentDirectors not liable to retire by rotation for a term of five consecutive years w.e.f.24th February 2020 to 23rd February 2025.
9.4 The Board based on the recommendations of the Nomination and RemunerationCommittee and subject to approval of members had reappointed Mr. Himanshu C. Patel asManaging Director w.e.f. 1st August 2020 to hold the office up to the 31stJuly 2023.
9.5 Mr. Janak G. Nanavati has step down/resigned from the position of the IndependentDirector of the Company with effect from 14th December 2019 due to workload ofhis own business and other commitments.
9.6 Mr. Nahoosh J. Jariwala has stepped down/resigned from the position of theIndependent Director of the Company with effect from 24th February 2020 due topre occupation with Fairchem Speciality Limited a listed company under which he is apromoter and Managing Director and other personal reasons.
9.7 The Company has received necessary declaration from each Independent Director ofthe Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet withthe criteria of their independence laid down in Section 149(6) of the Act.
9.8 Brief profile of the Directors being appointed and re-appointed as required underRegulations 36(3) of Listing Regulations 2015 and Secretarial Standard on GeneralMeetings and the justification for appointment/reappointment of Independent Directors areprovided in the notice for the forthcoming AGM of the Company.
9.9 The Board of Directors duly met 6 times during the financial year under review.
9.10 Formal Annual Evaluation:
The Nomination and Remuneration Committee adopted a formal mechanism for evaluating theperformance of the Board of Directors as well as that of its Committees and individualDirectors including Chairman of the Board Key Managerial Personnel/ Senior Managementetc. The exercise was carried out through an evaluation process covering aspects such ascomposition of the Board experience competencies governance issues etc.
9.11 DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134 of the Companies Act 2013 it is herebyconfirmed:
(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March2020 being end of the financial year 2019-20 and of the profit of the Company for theyear;
(iii) that the Directors had taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors had prepared the annual accounts on a going concern basis.
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
11. MANAGERIAL REMUNERATION:
|Sr. No. Name of the Director & Designation ||Remuneration for the year 2019-20 ||% |
increase over last year
|Parameters ||Median |
|Ratio ||Commission |
|1. Dr. Himanshu C. Patel - Managing Director ||Rs. 86.44 lakh || ||Higher |
responsibility and time involvement due to current expansion & modernisation
|Rs. 252450/- ||20.96 ||N.A. |
The Board of Directors has framed a Remuneration Policy that assures the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivateDirectors Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. All the Board Members and Senior Management personnelhave affirmed time to time implementation of the said Remuneration policy.
The Nomination and Remuneration Policy are available on the Company's websitewww.denischemlab.com
12. KEY MANAGERIAL PERSONNEL:
% INCREASE IN REMUNERATION OF DIRECTORS AND KMP:
|Sr. No. Name of the Director & KMP ||Designation ||Percentage Increase (If any) |
|1. Dr. Himanshu C. Patel ||Managing Director ||- |
|2. Mr. Nirmal Patel ||CEO ||20.37 |
|3. Mr. Vikram Joshi ||CFO ||13.32 |
|4. Ms. Anal R. Desai ||Company Secretary ||- |
13. PERSONNEL AND H. R. D.:
13.1 INDUSTRIAL RELATIONS
The industrial relations continued to remain cordial and peaceful and your Companycontinued to give ever increasing importance to training at all levels and other aspectsof H. R. D.
The number of Employees of the Company are 247.The relationship between averageincrease in remuneration and Company's performance is as per the appropriate performancebenchmarks and reflects short and long term performance objectives appropriate to theworking of the Company and its goals.
13.2 PARTICULARS OF EMPLOYEES:
There is no Employee drawing remuneration requiring disclosure under Rule 5(2) ofCompanies Appointment & Remuneration of Managerial personnel) Rules 2014.
14. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT &SECURITIES PROVIDED:
Details of Related Party Transactions and Details of Loans Guarantees and Investmentscovered under the provisions of Section 188 and 186 of the Companies Act 2013respectively are given in the notes to the Financial Statements attached to the Directors'Report.
All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm's length basis. During the year theCompany had not entered into any transactions with related parties which could beconsidered as material in accordance with the policy of the Company on materiality ofrelated party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website atwww.denischemlab.com
15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The information required under Section 134(3)(m) of the Companies Act 2013 and Rule8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy andTechnology Absorption forms part of this report and is given by way of Annexure- A.
16. CORPORATE GOVERNANCE AND MDA:
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Report on Corporate Governance ManagementDiscussion and Analysis (MDA) and a certificate regarding compliance with the conditionsof Corporate Governance are appended to the Annual Report as Annexure - B.
17. SECRETARIAL AUDIT REPORT:
Your Company has obtained Secretarial Audit Report as required under Section 204(1) ofthe Companies Act 2013 from M/s. Kashyap R. Mehta & Associates Company SecretariesAhmedabad. The said Report is attached with this Report as Annexure - D. The remarks ofAuditor are self explanatory.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company has constituted a Corporate Social Responsibility ("CSR")Committee in terms of the provisions of Section 135 of the Companies Act 2013 consistingof three Directors viz. Mr. Gaurang Dalal (as Chairman) Ms. Anar H. Patel and Dr.Himanshu C. Patel as members and has laid down a Corporate Social Responsibility Policy(CSR Policy). The CSR Policy is available on the Company's website atwww.denischemlab.com.
Some of the core areas identified by the Committee are Education Health Environmentwomen empowerment Animal Welfare Hunger etc. The Company spent Rs. 7.00 lakh towards CSRfor the year 2019-20.
As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules 2014 theAnnual Report on CSR Activities has been attached herewith as Annexure - E.
19. EXTRACT OF ANNUAL RETURN:
The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure -F. The same is also available on the Company's website at www.denischemlab.com.
20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIPCOMMITTEE:
The details of various committees and their functions are part of Corporate GovernanceReport.
At the 36th Annual General Meeting held on 26th September 2017M/s. H. K. Shah & Co. Chartered Accountants Ahmedabad were appointed as StatutoryAuditors of the Company to hold office for the period of 5 years i.e. for the financialyears 2017-18 to 2021-22.
The remarks of Auditor are self explanatory and have been explained in Notes onAccounts.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time the Company has been carrying out audit of cost records everyyear.
The Board of Directors on the recommendation of Audit Committee has appointed M/s.Kiran J. Mehta & Co. Cost Accountants (Firm Registration Number 000025) as CostAuditor to audit the cost accounts of the Company for the financial year 2020-21.
As required under the Companies Act 2013 a resolution seeking Shareholders' approvalfor the remuneration payable to the Cost Auditor forms part of the Notice convening theAnnual General Meeting for their ratification.
The movable and immovable properties of the Company including plant and Machinery andstocks wherever necessary and to the extent required have been adequately insured againstthe risks of fire riot strike malicious damage etc. as per the consistent policy of theCompany.
The Company has not accepted during the year under review any Deposits and there wereno overdue deposits.
21.4 SUBSIDIARIES/ ASSOCIATES/ JVS:
The Company does not have any Subsidiaries/ Associates Companies / JVs.
21.5 RISK MANAGEMENT POLICY:
The Company has a risk management policy which from time to time is reviewed by theAudit Committee of Directors as well as by the Board of Directors. The Policy is reviewedquarterly by assessing the threats and opportunities that will impact the objectives setfor the Company as a whole. The Policy is designed to provide the categorization of riskinto threat and its cause impact treatment and control measures. As part of the RiskManagement policy the relevant parameters for protection of environment safety ofoperations and health of people at work and monitored regularly with reference tostatutory regulations and guidelines defined by the Company.
21.6 CODE OF CONDUCT:
The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management. All the Board Members and Senior Management personnelhave affirmed compliance with the code of conduct.
21.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
There has been no significant and material order passed by any regulators or courts ortribunals impacting the going concern status of the Company and its future operations.
21.8 ENVIRONMENT AND SAFETY:
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
21.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013:
The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review the Company did not receive anycomplaint.
The Company has entered in to an agreement with Life Insurance Corporation of India forcovering its Gratuity Liability and has thus provided for the same. A Gratuity Trust Fundhas been created with Life Insurance Corporation of India.
21.11 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.
21.12 SECRETARIAL STANDARDS:
The Company complies with the Secretarial Standards issued by the Institute of CompanySecretaries of India which are mandatorily applicable to the Company.
22. DISCLOSURE OF ACCOUNTING TREATMENT:
In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.
23. DEMATERIALISATION OF EQUITY SHARES:
Shareholders have an option to dematerialise their shares with either of thedepositories viz NSDL and CDSL. The ISIN No. allotted is INE051G01012.
24.1 The Company's Income-tax Assessment has been completed up to the Assessment Year2016-17 and Sales tax Assessment is completed up to the Financial Year 2014-2015
24.2 The Company is enjoying Working Capital facilities Corporate Loan and Term Loanfrom Axis Bank Limited and Bank of India. The Company is generally regular in payment ofinterest and principal.
Your Directors express their sincere thanks and appreciation to Promoters andShareholders for their constant support and co operation. Your Directors also place onrecord their grateful appreciation and co operation received from Bankers FinancialInstitutions Government Agencies and employees of the Company.