Your Directors are pleasured to present the 38th ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2018-19 ended 31st March 2019.
1. FINANCIAL RESULTS :
(Amount in Lakh)
|Operating Profit (Before Interest & Depreciation)||1553.08||1258.13|
|Less : Interest/Finance Cost||325.24||461.33|
|Profit before Depreciation||1227.84||796.80|
|Less: Depreciation and amortization expenses||635.69||592.81|
|Profit before Tax||592.15||203.99|
|Less: Current Tax||128.91||46.81|
|(Add): MAT Credit||(128.91)||(46.81)|
|Less / (Add): Deferred Tax Liability / (Asset)||(42.80)||(10.39)|
|Profit after Tax||634.95||214.38|
There are no material changes and commitment affecting the financial position of the Company which have occurred between 1st April 2019 and date of this report.
Your Directors are pleased to recommend a dividend of Re. 1/- per Equity Share on 13876668 Equity Shares of Rs. 10/- each for the financial year 2018-19 subject to statutory approvals as may be required. The total dividend outgo for the financial year 2018-19 will be Rs. 167.02 Lakh including corporate dividend taxes. The dividend will be tax free in the hands of Shareholders.
The revenue from operations i.e. transfusion solution in Bottles and Plastic Bottles stood at Rs. 124.12 Crore during the financial year 2018-19 under review compared to Rs. 108.23 Crore of previous year 2017-18. The facility was inspected by Food and Drug Control Administration (FDCA) Gandhinagar along with CDSO for the renewal of its World Health Organization-Good Manufacturing Practices (WHO-GMP) and certification validity of WHO GMP has been extended. The Company's manufacturing license is valid till December 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 are underway for increasing exports to various countries.
4. NEW PROJECTS:
The Management has envisaged an increased demand for various I. V. fluids in India in the future considering the development of health related instruments and steady population increase.
Addition of 100 ML products to our `Aquapulse' Brand
We have successfully implemented a project that will add 100 ml Eurohead products to our portfolio. Based on feedback from our Marketing Team and due to the fact that our Eurohead 500 ML was received well we are confident of expanding our reach in the Eurohead Category with this project. The project was operational on Nov 1st 2018.
The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2019-20.
6. SHARE CAPITAL:
The paid up Share Capital of the Company as on 31st March 2019 was Rs. 1387.67 Lakhs. As on 31st March 2019 the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity and none of the Directors of the Company hold any convertible instruments.
The Company proposes to transfer Rs. 652.32 Lakhs to General Reserves.
8.1 Mr. Dinesh B. Patel retires by rotation in terms of the Articles of Association of the Company.
However being eligible offers himself for re-appointment. Further subject to approval of the Members at the ensuing Annual General Meeting (AGM) the Board has resolved pursuant to Regulation 17(1A) of SEBI (LODR) Regulations 2015 to continue the appointment of Mr. Dinesh B. Patel aged above 75 years as Non-Executive Director.
The above appointment/continuation of appointment form a part of the Notice of the forthcoming 38th AGM and the resolutions are recommended for your approval.
8.2 The Board based on the recommendations of the Nomination and Remuneration Committee had appointed Mr. Nahoosh Jariwala as Additional Director w.e.f. 18th March 2019 to hold the office upto the date of forthcoming 38th Annual General Meeting (AGM). It is proposed to appoint Mr. Nahoosh Jariwala as an Independent Directors not liable to retire by rotation for a term of five consecutive years w.e.f. 18th March 2019 to 17th March 2024.
8.3 Based on the recommendations of the Nomination and Remuneration Committee it is proposed to re-appoint Ms. Gauri S. Trivedi Mr. Gaurang Dalal and Mr. Janak Nanavati as Independent Directors of the Company for a second consecutive term of 5 years from the conclusion of this 38th AGM up to the conclusion of the 43rd AGM respectively and they will not be liable to retire by rotation.
8.4 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act.
8.5 Brief profile of the Directors being appointed and re-appointed as required under Regulations 36(3) of Listing Regulations 2015 and Secretarial Standard on General Meetings and the justification for appointment/reappointment of Independent Directors are provided in the notice for the forthcoming AGM of the Company.
8.6 The Board of Directors duly met 7 times during the financial year under review.
8.7 Formal Annual Evaluation:
The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors including Chairman of the Board Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board experience competencies governance issues etc.
8.8 DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134 of the Companies Act 2013 it is hereby confirmed:
(i) that in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures;
(ii) that the Directors had 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 at 31st March 2019 being end of the financial year 2018-19 and of the profit of the Company for the year;
(iii) that the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the Company and that such internal financial controls are adequate and were operating effectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
9. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company's policies safeguarding of assets prevention and detection of frauds and errors accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.
10. MANAGERIAL REMUNERATION:
|Sr. No.||Name of the Director & Designation||Remuneration for the year 2018-19||% increase over last year||Parameters||Median of Employees Remuneration||Ratio||Commission received from Holding/ Subsidiary|
|1.||Dr. Himanshu C. Patel - Managing Director||Rs. 94.38||48.61%||Higher responsibility and time involvement due to current expansion & modernisation||Rs. 221010/-||42.71||N.A.|
The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract retain and motivate Directors Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.
The Nomination and Remuneration Policy are available on the Company's website www.denischemlab.com
11. KEY MANAGERIAL PERSONNEL:
% INCREASE IN REMUNERATION OF DIRECTORS AND KMP:
|Sr. No.||Name of the Director & KMP||Designation||Percentage Increase|
|1.||Dr. Himanshu C. Patel||Managing Director||48.61|
|2.||Mr. Nirmal Patel||CEO||12.89|
|3.||Mr. Vikram Joshi||CFO||12.65|
|4.||Ms. Khushbu Shah$||Company Secretary||N.A.|
|5.||Ms. Anal R. Desai#||Company Secretary||N.A.|
$Ms. Khushbu H. Shah resigned from the post of Company Secretary w.e.f. 19th July 2018. #Ms. Anal R. Desai appointed as Company Secretary and Compliance Officer of the Company w.e.f. 20th July 2018.
12. PERSONNEL AND H. R. D.:
12.1 INDUSTRIAL RELATIONS
The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D.
The number of Employees of the Company are 247. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.
12.2 PARTICULARS OF EMPLOYEES:
There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies (Appointment & Remuneration of Managerial personnel) Rules 2014.
13. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT & SECURITIES PROVIDED:
Details of Related Party Transactions and Details of Loans Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act 2013 respectively 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 parties were in the ordinary course of business and on an arm's length basis. During the year the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.denischemlab.com
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information required under Section 134(3)(m) of the Companies Act 2013 and Rule 8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure- A.
15. CORPORATE GOVERNANCE AND MDA:
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Report on Corporate Governance Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.
16. SECRETARIAL AUDIT REPORT:
Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act 2013 from M/s. Kashyap R. Mehta & Associates Company Secretaries Ahmedabad. The said Report is attached with this Report as Annexure - D. The remarks of Auditor are self explanatory.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee in terms of the provisions of Section 135 of the Companies Act 2013 consisting of three Directors viz. Mr. Gaurang Dalal (as Chairman) Ms. Anar H. Patel and Dr. Himanshu C. Patel as members.
Corporate Social Responsibility Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy) in accordance with the provisions of Section 135 of Companies Act 2013 and Schedule VII thereto indicating the activities which can be undertaken by the Company.
This Policy has been approved by the Board. The CSR Policy is available on the Company's website at www.denischemlab.com.
18. EXTRACT OF ANNUAL RETURN:
The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure - E. The same is also available on the Company's website at www.denischemlab.com.
19. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIP COMMITTEE:
The details of various committees and their functions are part of Corporate Governance Report.
At the 36th Annual General Meeting held on 26th September 2017 M/s. H. K. Shah & Co. Chartered Accountants Ahmedabad were appointed as Statutory Auditors of the Company to hold office for the period of 5 years i.e. for the financial years 2017-18 to 2021-22.
The remarks of Auditor are self explanatory and have been explained in Notes on Accounts.
As per the requirement of Central Government and pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to time the Company has been carrying out audit of cost records every year.
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 Cost Auditor to audit the cost accounts of the Company for the financial year 2019-20.
As required under the Companies Act 2013 a resolution seeking Shareholders' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.
The movable and immovable properties of the Company including plant and Machinery and stocks wherever necessary and to the extent required have been adequately insured against the risks of fire riot strike malicious damage etc. as per the consistent policy of the Company.
The Company has not accepted during the year under review any Deposits and there were no overdue deposits.
20.4 SUBSIDIARIES/ ASSOCIATES/ JVS:
The Company does not have any Subsidiaries/ Associates Companies / JVs.
20.5 RISK MANAGEMENT POLICY:
The Company has a risk management policy which from time to time is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause impact treatment and control measures. As part of the Risk Management policy the relevant parameters for protection of environment safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.
20.6 CODE OF CONDUCT:
The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.
20.7 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 or tribunals impacting the going concern status of the Company and its future operations.
20.8 ENVIRONMENT AND SAFETY:
The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner so as to ensure safety of all concerned compliances of environmental regulations and preservation of natural resources.
20.9 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 the requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year under review the Company did not receive any complaint.
The Company has entered in to an agreement with Life Insurance Corporation of India for covering its Gratuity Liability and has thus provided for the same. A Gratuity Trust Fund has been created with Life Insurance Corporation of India.
20.11 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act 2013.
20.12 SECRETARIAL STANDARDS:
The Company complies with the Secretarial Standards issued by the Institute of Company Secretaries of India which are mandatorily applicable to the Company.
21. DISCLOSURE OF ACCOUNTING TREATMENT:
In the preparation of the financial statements the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.
22. DEMATERIALISATION OF EQUITY SHARES:
Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN No. allotted is INE051G01012.
23.1 The Company's Income-tax Assessment has been completed up to the Assessment Year 2015-16 and Sales tax Assessment is completed up to the Financial Year 2014-2015.
23.2 The Company is enjoying Working Capital facilities Corporate Loan and Term Loan from Axis Bank Limited and Bank of India. The Company is generally regular in payment of interest and principal.
Your Directors express their sincere thanks and appreciation to Promoters and Shareholders for their constant support and co-operation. Your Directors also place on record their grateful appreciation and co-operation received from Bankers Financial Institutions Government Agencies and employees of the Company.
|For and on behalf of the Board|
|Place : Ahmedabad||Dinesh B. Patel|
|Date : 18th July 2019||Chairman|