Your Directors have pleasure in presenting before you the Twenty Fifth Annual Report ofthe Company together with the Audited Financial Statements for the year ended March 312019
The highlights of the financial of your company are as under:
Rs. in Lakhs
|Particulars ||March 312019 ||March 312018 |
|I Revenue from Operations ||17004.61 ||15332.13 |
|II Other Income ||198.16 ||230.00 |
|III Total Income (I+II) ||17202.77 ||15562.13 |
|Expenses || || |
|Purchases of Stock-in-trade ||1823.10 ||1896.47 |
|Changes in inventory of stock- in-trade ||91.99 ||(81.82) |
|IV Employee benefit expense Finance costs ||3377.08 ||3198.03 |
| ||258.02 ||259.04 |
|Depreciation and amortisation expense ||1091.28 ||978.18 |
|Other expenses ||8818.74 ||7976.14 |
|Total expenses (IV) ||15460.21 ||14226.04 |
|V Profit before tax (III-IV) ||1742.56 ||1336.09 |
|Tax expense || || |
|(a) Current tax (including prior VI years) ||626.17 ||644.35 |
|(b) Deferred tax ||(75.12) ||14.22 |
| ||551 ||658.57 |
|VII Profit for the Year (V-VI) ||1191.56 ||677.52 |
|Other Comprehensive Income ||- ||- |
|Items that will not be reclassified to profit or loss || || |
|(a) Remeasurements of the defined benefit liabilities / VIII (asset) ||(99.92) ||(38.19) |
|(b) Income tax relating to items that will not be reclassified to profit or loss ||29.1 ||11.12 |
|Total other comprehensive (loss) / income for the year ||(70.82) ||(27.07) |
|IX Total comprehensive income for the year (VII+VIII) ||1120.74 ||650.45 |
COURSE OF BUSINESS AND OUTLOOK / BUSINESS PERFORMANCE
During the year under review the company had achieved a turnover of Rs.170.04 croresas compared to Rs.153.32 crores in the previous financial years. The Profit before tax isat Rs.17.42 crores as compared to last year's profit before tax of Rs.13.36 Crores.YourCompany has made significant improvements in key business parameters relating to MarginsCosts Working Capital management and Finance Charges. Over the past few years we havemade sustained efforts to improve competitiveness through a number of initiatives. Most ofthese have reached maturity. The steady improvement over the past few years and thepositive results during the year is a result of these initiatives.
During the year under review the following branches has been relocated to thefollowing address:
1. Chennai No.222 TTK Road Alwarpet Chennai 600018
(Landmark: Near Raj Park Hotel & Shankara Hall)
Old S/No.465/2 R.S. 465/8 Velachery Village 150 Feet Bypass Road Velachery Chennai- 600042.
(Landmark: Next to NAC Jewellers)
No.176 Mettur Road Erode - 638 011.
(Landmark: Next to Viveks Show Room)
The new centres normally take few months to turn around and your Company's managementis hopeful that the new centres would ramp up the revenue and would result in a positiveturnaround.
Your Directors recommend a dividend of 15% on the paid up equity share capital of yourCompany for the financial year ended 31st March 2019 exclusive of dividend distributiontax which will result in the out flow of Rs.70.50 lacs.
During the year 2018-19 Board Meetings and Audit Committee meetings were held. Thedetails of the meetings held and the composition of the Audit Committee are given in theCorporate Governance Report. The meetings of the Board were held periodically and 120 dayshas not lapsed between two meetings as prescribed under section 173 (1) of the CompaniesAct 2013.
TRANSFER TO RESERVES:
Your Company does not propose to transfer any amount to the General Reserve during theyear.
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 the saidfinancial year.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees and made any investments as coveredunder the provisions of section 186 of the Companies Act 2013 during the said financialyear.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The company has an adequate system of internal control in place which has beendesigned to provide a reasonable assurance with regard to maintaining of proper accountingcontrols monitoring of operations protecting assets from unauthorized use or lossescompliance with regulations and for ensuring reliability of financial reporting. TheInternal Audit function is carried out by independent firm of Chartered Accountants. Thescope and authority of the Internal Audit is defined by the Audit Committee. The InternalAudit Reports are placed before the Audit Committee for its review and the InternalAuditor attends the Audit Committee meetings.
DIRECTORS / KEY MANAGERIAL PERSONNEL:
In accordance with Section 152 of the Companies Act 2013 and as per the Articles ofAssociation of your Company Dr. Athiya Agarwal Whole-Time Director retires by rotationat the ensuing Annual General Meeting and being eligible offers herself for beingre-appointed. The Board recommends for her re-appointment.
Mr. R Sabesan Chief Financial Officer of the Company had resigned from the services on31st March 2018 and
Mr S. Lakshmi Narasimhan the Company Secretary and
Compliance Officer of the Company had resigned from the services on 31st December 2018.
Ms. Saradha Govindarajan has been appointed as Chief Financial Officer of the Companyon 28th May 2018.
Dr. Adil Agarwal has been appointed as Additional Director on 30th August 2018 andresigned from his directorship with effect from 30th April 2019.
Mr. T.R.Ramasubramanian has been appointed as Independent Director on 30th August 2018.
Mr. M.R.G. Appa Rao has been resigned from his Directorship on 31st January 2019 as hehas been requested by WORLD BANK to serve the Bank. The Board hereby places on record itsappreciation of the invaluable contributions made by him during his tenure of office.
Ms. Jully Jivani has been appointed as Company Secretary and Compliance Officer on 03rdJune 2019.
Mrs. Lakshmmi Subramanian has been appointed as
Additional Director under the category of Independent & Women Director on 03rdJune 2019.
Dr. Adil Agarwal has been appointed as Additional Non- Executive director on 3rd June2019.
Dr. Amar Agarwal and Dr. Athiya Agarwal were appointed as Chairman cum ManagingDirector and Whole-Time Director of the Company respectively w.e.f. 1st October 2016 fora period of three years by the members of the Company in the Annual General Meeting heldon 23rd August 2016.
Since their appointments ceases on 30th September 2019 the Board of Directors at themeeting held on 5th August 2019 on the recommendations of Nomination and RemunerationCommittee has accorded its approval proposing the re-appointment of Dr. Amar Agarwal andDr. Athiya Agarwal respectively as Chairman cum Managing Director and Whole-Time Directorof the Company to the shareholdres for a period of 3 years with effect from the 1stOctober 2019.
"Mr. Sanjay Anand (DIN 02501139) was appointed for a term of five years commencingfrom September 9 2014. Pursuant to Section 149 (10) of the Companies Act 2013 read withSection 152 of Companies Act 2013 and Companies (Appointment and Qualification ofDirectors) Rule 2014 an Independent Director of the Company shall hold office for a termup to five consecutive years on the Board of the Company and shall be eligible forre-appointment on passing of a Special Resolution by the Company.
Based on the performance evaluation the Board recommends the Special Resolution as setout in Item No. 4 of the Notice convening the Annual General Meeting relating to there-appointment of Mr.Sanjay Anand as an Independent Director for the second term of fiveconsecutive years from 09th September 2019 for the approval by the Members of the Company."
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.
The composition of the Board of Directors of the Company and other details related tothe board is furnished in the Corporate Governance Report annexed to this report.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 and Regulation 16 of the SEBI(LODR) Regulations 2015 that the Independent
Directors of the Company meet the criteria of their Independence laid down in Section149(6). During the year under review the Independent Directors met once without thepresence of Non-Independent Directors and members of the Management
The Nomination & Remuneration committee as well as the board have evaluated theperformance of the board as a whole various committees and also of the individualdirectors. The manner in which the evaluation was carried out has been disclosed in theCorporate Governance Report attached to this report. A structured analysis is done aftertaking into consideration the inputs received from Directors covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees Board culture Execution and Performance of specific duties obligations andgovernance. A separate exercise is carried out to evaluate the performance of individualDirectors including the Chairman of the Board who are evaluated on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestsof the Company and of its minority shareholders etc.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key
Managerial Personnel and Senior Management and their remuneration. The salient featuresof the Remuneration Policy details are stated in the Corporate Governance Report. TheRemuneration Policy approved by the Board of Directors is uploaded on the website of theCompany www.dragarwal.com.
Pursuant to Section 148 of the Companies Act 2013 read with relevant rules and basedon the recommendation of the Audit Committee your Board of Directors appointed Mr. S.Jagadeesan of M/s Jagadeesan & Co. (Membership No 32750) as the Cost Auditor of theCompany for the Financial Year 2018-19 and the remuneration payable to the Cost Auditor isrequired to be placed before the Members in a General Meeting for their ratification.Accordingly a Resolution seeking Member's ratification for the remuneration payable toMr. S. Jagadeesan of M/s Jagadeesan & Co Cost Accountant is included at Item No. 8of the Notice convening this Annual General Meeting.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure-I to this report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 in respect of employees of theCompany are being annexed as part of the Annual Report as Annexure-II to this report.
SECRETARIAL AUDIT REPORT:
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. N.K Bhansali Practicing Company Secretary (Membership No: FCS 3942) toundertake the Secretarial Audit of the Company for the financial year 2018-19. TheSecretarial Audit report is annexed as Annexure-III to this report. There has been noqualification reservation or adverse remark or disclaimer in their Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT:
As required under SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 the Management Discussion and Analysis Report isannexed as Annexure - IV to this report.
Your Company continues to have an effective Risk Management process in place. Themanagement and the Board continuously oversees the risk management process includingidentification impact assessment and drawing mitigation plans. The details of risksperceived by the Management are annexed as part of the Management Discussion and AnalysisReport.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDEXPENDITURE:
The Company is exploring new technologies and improving the existing technologiesapplicable to the Healthcare Business. In all its new locations the company has beenusing LED technology lamps to conserve energy as well as costs.
FOREIGN EXCHANGE EARNINGS / OUTGO:
Foreign Exchange Earnings: Rs. 32.88 lakhs (Previous
Year NIL) on account of services rendered
Foreign Exchange Outgo : Rs. 310.72 lakhs (Previous Year Rs. 264.24 lakhs) towardsPurchase of Consumables and software.
CHANGE IN NATURE OF BUSINESS
There was no change in the nature of business during the financial year.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
During the year under review there were no frauds reported by the auditors underSection 143(12) of the Companies Act2013.
AUDIT REPORT AND AUDITORS
The Auditors' Report for Fiscal 2019 does not contain any qualificationreservation or adverse remark. The Auditors' Report is enclosed with the financialstatements in the Annual Report the same is self explanatory.
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134 clause (C) of sub-section (3) of the Companies Act 2013 theDirectors would like to state that: (i) In the preparation of the annual accounts theapplicable accounting standards have been followed.
(ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 profit or loss of the Company for the year under review.
(iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) The directors have 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 system to ensure compliance with the provisionsof all applicable laws and that such system were adequate and operating effectively.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism to deal with instances of fraud and mismanagement ifany. The details of the Policy is posted on the website of the Company www.dragarwal.com.
Corporate Social Responsibility (CSR) Committee
The Company has constituted CSR Committee and following are the members:-a. Dr. AthiyaAgarwal - Chairperson b. Dr. Amar Agarwal - Member c. Mr. T R Ramasubramanian - Member
The CSR policy pursuant to the provisions of Section 135 of the Companies Act 2013 isavailable in your company's website www.dragarwal.com. Your Company has incurred anexpenditure amounting to Rs.16.34 lakhs by way of contribution towards CSRresponsibilities (please refer details as per annexure).
The Company's total spending on CSR is 2% of the average net profit for the immediatelypreceding three financial years. The report on CSR activities is given in Annexure Vforming part of this Report.
Report on Corporate Governance
A report on Corporate Governance as well as a certificate from a Practicing CompanySecretary confirming the compliance with the conditions of the Corporate Governance areannexed as Annexure - VI to this Report.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been setup by yourCompany to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. The followingis a summary of sexual harassment complaints received and disposed off during the year2018-19 a. No. of complaints received during the financial year : Nil b. No. of complaintsdisposed off during the financial year: NA c. No. of complaints pending as on end of thefinancial year: Nil
Employee relations throughout the company were harmonious. The board wishes to place onrecord its sincere appreciation of the devoted efforts of all the employees in advancingthe company's vision and strategy to deliver another record performance.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business thus disclosure inform AOC-2 is not required. There are no materially significant related party transactionsmade by the company with Promoters Directors Key Managerial
Personnel or other designated persons which may have potential conflict with interestof the company at large. The Board of Directors of the Company has on the recommendationof the Audit Committee adopted a policy to regulate transactions between the Company andits Related Parties in compliance with the applicable provisions of the Companies Act2013 and the Rules there under. This policy was considered and approved by the Board hasbeen uploaded on the website at www.dragarwal.com
PREVENTION OF INSIDER TRADING
The Company has adopted a Code for Prevention of Insider Trading with a view toregulate trading in securities by the Directors and designated persons of the Company. TheCode requires pre-clearance for dealing in the Company's shares and prohibits the purchaseor sale of Company shares by the Directors and the designated persons while in possessionof unpublished price sensitive information in relation to the Company and during theperiod when the Trading Window is closed.
ANNEXURES FORMING PART OF THIS REPORT OF THE DIRECTORS:
The following annexures referred in this report and other information which arerequired to be disclosed are attached and forms an Integral part of this report
I Extract of Annual Return (MGT 9)
II Information required under section 197 of the Companies Act 2013 III SecretarialAudit Report IV Management Discussions and Analysis Report V Report on Corporate SocialResponsibility Activities VI Corporate Governance Report
Your directors wish to place on record their appreciation for the continuous supportreceived from the members customers suppliers various statutory bodies of theGovernment of India and the company's employees at all levels.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: Chennai ||Dr Amar Agarwal |
|Date : 5th August 2019 ||Chairman cum Managing Director |