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Mangalam Drugs and Organics Ltd.

BSE: 532637 Sector: Health care
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OPEN 74.20
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P/E 10.15
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OPEN 74.20
CLOSE 74.30
52-Week high 225.90
52-Week low 64.20
P/E 10.15
Mkt Cap.(Rs cr) 116
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalam Drugs and Organics Ltd. (MANGALAM) - Director Report

Company director report

To The Members of

Mangalam Drugs & Organics Ltd

The Directors have pleasure in presenting to you their Forty-fifth Annual Reporttogether with Company's Audited Financial Statement for the accounting year ended 31stMarch 2018.


(Rs. In Lacs)
Particulars 2017-2018 2016-2017
Revenue from operations 27937.96 30288.56
Other Income 82.70 30.79
Profit before Finance Expenses Depreciation & Amortizations 4769.54 4622.42
Less: Depreciation & Amortizations 656.82 500.71
Finance Expenses 1178 1003.65
Profit / (Loss) before tax 2934.72 3118.06
Profit / (Loss) after tax 1988.96 2227.50
Total Comprehensive Income 36.32 36.32
Earnings Per Share (in Rs.) (Basic ) 12.57 14.07


The Board of Directors have declared and paid an interim dividend @ 5% (fifty paisaeach share) on 15828248 equity shares aggregating to Rs. 7914124/- for the year ended31st March 2018.


The Financial Statements of your company for the financial year 2017-18 are prepared asper Indian Accounting Standard ("IND-AS") and in Compliances with applicableprovisions of the Companies Act 2013 read with the rules issued thereunder and theprovisions of SEBI (Listing obligations & Disclosure Requirements) Regulations 2015.

Since it is 1st time adoption under Ind-As your company has drawn up its accounts forthe last three years under Ind-As. The figures for the previous years have been suitablyadjusted as appropriate to confirm to IND-AS requirements.

During the financial year implementation of Goods and Service Tax (GST) and generalslow down of economy due to the same has affected our turnover and profit marginally.

During the year under review the production of Tenofovir Disoproxil Fumarate an antiretroviral is 14.60 MTs. compared to 2.17 MTs in the previous year. On similar line thetotal production volume of all the products during the year is 770.37 tons as against 601tons in previous year.

The turnover of the company has basically dropped on account of decrease in the cost ofraw material which has resulted in subsequent reduction in our sale prices of finishedproducts. One of the main reason for drop in our net profit was due to the marginalpayment of Rs.217.11 Lacs as recompense to the banks to come out of the re-structuringprocess this has resulted in higher interest cost. However this will now enable thecompany to borrow funds at reduced interest cost as and when required.

During this year your company earned total income of Rs. 28020.66 Lacs compared toRs.30319.35 Lacs in the previous year decrease of 8.21%.

The company has made a profit after tax of Rs.1988.96 Lacs as against Rs.2227.50 Lacsdecrease of 12%. The company has achieved an export turnover of Rs.5881.92 Lacs as againstRs.8504.18 Lacs.

Even though the turnover in the current year has dropped to Rs.28020.66 Lacs as againstRs.30319.15 Lacs in the previous year the drop in profit margin is very nominal to 7.10%as against 7.35% in the previous year.

There is a considerable upgradation in ratings received from India Ratings and ResearchPvt. Ltd. to IND BBB+ from IND BBB.

During the year under review Unit 2 of your company has received WHO Approvals formanufacturing of the following Active Pharmaceutical ingredients: Lumefantrine (APIMF100)Tenofovir Disoproxil Fumarate (APIMF204) Artemether (APIMF138) Emtricitabine (WHO API314)Efavirenz (WHO API 318)

Qualification of your Company is in various stages with different customers for its ARVAPIs. This progress will be reflected in times to


While the future has always looked bright to us it was only because we had striven tobenefit from own technological prowess and the strategic edge we enjoyed over nearestcompetition. Today as we do this simhavalokana the future looks even brighter than everbefore in spite of several challenges. Your company now shares habitat in API space withworld's renowned companies like Gilead Sciences ViiV Health Care and AbbVie with whom wehave signed sub-licenses to introduce patented front line Antiviral actives. With bothmanufacturing units GMP approved by WHO-Geneva we are poised to further benefit fromongoing regulatory strategy and to contribute in the disease segments of poorly addressedtherapeutic needs in the developing world. Over next three quarters we shall introduceNitrofurantion and Acyclovir. We shall also commercialize Pregabalin Atorvastatin andRosuvastatin in lifestyle disease segments of local markets. These 5 generics willstrengthen our presence in local markets. Sarve Santu Niramyah has been our goal and weremain committed to it as a responsible corporate citizen.

Due to increase in the prices of intermediates we import from China your company hasstarted in house development of the same. This will not only improve availability but alsoenable to reduce costs.


The Company has adopted Indian Accounting Standards (Ind AS) as per the notificationdated February 16 2015 issued by the Ministry of corporate

Affairs (MCA). Ind AS has replaced the existing Indian GAAP prescribed under Section133 of the Companies Act 2013 read with rule 7 of the Companies (Accounts) Rules 2014.The Company has published financials using Ind AS for the year ended March 31 2018 alongwith the comparable as on March 31 2017 and Opening Statement of Assets and liabilitiesas on April 01 2016.

Following are the major areas which had an impact on account of transition to Ind AS:

• Fair Valuation of certain financial instruments

• Employee costs pertaining to defined benefit obligations

• Discounting of certain long term liabilities

• Deferred taxes on above.


GST the biggest indirect tax reform of India was rolled-out effective July 01 2017.This transformational reform significantly impacted all areas of business across varioussectors including the pharmaceutical industry. The Act has merged all significant indirecttaxes currently applicable to the Company's business operations into a single tax. This isexpected to bring in greater transparency across all the economic activities and reducemultiple tax levies and administration. There was -term impact on the operations of theCompany during the year mainly due to significant short reduction of channelinventory which is now slowly being back to the normal levels. The Company has augmentedits IT systems to comply with the requirements of this Act.


Your Company has not accepted any deposits from the public falling within the purviewof Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014 andas such no amount on account of principal or interest on public deposits was outstandingas on date of the balance sheet.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are provided in notes to the Financial Statements.


The Company has formulated a policy on Risk Management and the same is detailed in theCorporate Governance Report. Risks are classified in different categories such asFinancial Operational Legal and Strategic risks. These risks are reviewed from time totime and controls are put in place with specific responsibility of the concerned officerof the Company.


The Companies Act 2013 has mandated the Company to have a formal framework of InternalFinancial Controls (IFC) and has also laid down specific responsibilities on the BoardAudit Committee Independent Directors and Statutory Auditors with regard to IFC.

The Board reviews the effectiveness of controls documented as part of IFC frameworkand take necessary corrective actions where weaknesses are identified as a result of suchreviews. Based on this evaluation no significant events had come to notice during theyear that have materially affected or are reasonably likely to materially affect ourIFC. The management has also come to a conclusion that the IFC and other financialreporting was effective during the year and is adequate considering the businessoperations of the Company.

The Statutory Auditors of the Company has audited the IFC over Financial Reporting andtheir Audit Report is annexed as Annexure B to the Independent Auditors' Report underStandalone Financial Statements.


A statement containing the necessary information on Conservation of Energy Technologyabsorption and foreign exchange earnings and outgo stipulated under section 134(3)(m) ofthe Companies Act 2013 read with rule 8 of Companies (Accounts ) Rules 2014 is annexedto report as Annexure A.


There are Nil employees drawing remuneration of Rs 850000 (Rupees Eight lacs fiftythousand) per month or Rs 10200000/- (Rupees One crore two lacs) and above per annumduring the year under review. The details of the remuneration drawn by the ManagingDirector Whole Time Director and Independent Directors are stated in the CorporateGovernance Report. The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below: a. The ratio of the remuneration of each director to the medianremuneration of the employees of the Company and the percentage increase in remunerationof each director chief executive officer chief financial officer company secretary inthe financial year 2017-18:

Name of the Director/KMP Designation# Ratio to Median Remuneration % increase in remuneration in the financial year
Shri Govardhan Murlidhar Dhoot Chairman & Managing Director 7.46 Nil
Shri Brijmohan Murlidhar Dhoot Non Executive Director 0.09 -14.29%
Shri Subhash Khattar Independent Director 0.17 4.55%
Ms Anuradha Sukhani Independent Director 0.07 11.11%
Shri Ajay R Dhoot (1) Additional Director 0.01 *
Shri Aaditya R Dhoot(1) Additional Director 0.01 *
Shri Ajay Sawhney (2) Additional Director – Independent 0.02 *
Shri Rukmesh Dhandhania (2) Additional Director - Independent 0.03 *
Mr. Ajay Samant Chief Financial Officer NA 27.59
Ms. Nikita Bavishi Company Secretary NA 14.48

# The Non-executive & Independent Directors of the Company are paid only‘Sitting fees' of Rs. 2000 for attending the Meetings of the Board the Committeesincluding meetings of Independent Directors. The Non-executive & Non-IndependentDirector of the Company does not receive any remuneration from the Company.

* Since the remuneration of these Directors/KMPs is only for the part of theyear/previous year the ratio of their remuneration to median and increase in remunerationis not comparable .


1. Appointed as Additional Director w.e.f 20th November 2017.

2. Appointed as Additional and Independent Director w.e.f 20th November2017.

b. The percentage change in the median remuneration of employees in the financial year:

Median remuneration is increased by 18.99%.

c. The number of permanent employees on the rolls of Company: 345

d. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Average annual increase in salaries of employees was around 26.05% in the lastfinancial year.

This is based on Remuneration policy of the Company that rewards people differentiallybased on their contribution to the success of the Company and also ensures that externalmarket competitiveness and internal relativities are taken care of.

There is no change / increase in managerial remuneration in Financial year 2017-18.

e. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.


a) Directors

The Board of Directors of the Company is led by the Executive Chairman and comprises ofseven other Directors as on 31st March 2018 including four Independent Directors whichincludes one Woman Director as required under Section 149 (1) of the Companies Act 2013and three Non-Executive Director (other than Independent Directors). The composition ofthe Board is in conformity with the provisions of the Act and Regulation 17 of the ListingRegulations entered into with the Stock Exchanges.

All the Independent Directors of the Company have furnished declarations that they meetthe criteria of independence as prescribed under the Companies Act 2013 and under ListingRegulations.

At the Annual General Meeting of the Company held on 26th September 2017the members approved the reappointment of Shri Brijmohan M Dhoot (holding DIN 01046420)who had retired by rotation.

The Board of Directors based on the recommendation of the Nomination and RemunerationCommittee appointed the following Directors on the Board of the Company upto the date ofthis report.

1) Shri Ajay R Dhoot (DIN: 00210424) has been appointed as Additional- NonExecutive Director of the Company with effect from November 20 2017 and hisappointment shall be regularized at the ensuing Annual General Meeting.

2) Shri Aditya R Dhoot (DIN: 00057224) has been appointed as Additional- NonExecutive Director of the Company with effect from November 20 2017 and hisappointment shall be regularized at the ensuing Annual General Meeting.

3) Shri Ajay Sawhney (DIN: 05132739) has been appointed as Additional andIndependent Director of the Company with effect from November 20 2017 and his appointmentshall be regularized and appointed for a period of 5 years effective from November 202017 subject to the approval of the Members at the ensuing Annual General Meeting.

4) Shri Rukmesh Dhandhania (DIN: 02493968) has been appointed as Additional andIndependent Director of the Company with effect from November 20 2017 and his appointmentshall be regularized and appointed for a period of 5 years effective from November 202017 subject to the approval of the Members at the ensuing Annual General Meeting.

5) Mrs. Nidhi Mundada (DIN: 08134952) has been appointed as Additional andIndependent Director of the Company with effect from May 28 2018 and herappointment shall be regularized and appointed for a period of 5 years effective from May28 2018 subject to the approval of the Members at the ensuing Annual General Meeting.

Mrs. Anuradha Sukhani Independent Director of the Company had resigned from the Boardof Directors of the Company w.e.f. the closure of business hours on May 21 2018 due topersonal reasons. The Board placed on record its deep appreciation for the guidance &support provided by her for the overall growth of the Company during her association withthe company.

In accordance with the provisions of the Securities and Exchange Board of India(Listing Obligations & Disclosure Requirements) (Amendment)

Regulations 2018 (effective April 01 2019) approval of Members is sought throughSpecial Resolution for re-appointment of another term of 5 (five) years of Shri Subhash CKhattar (DIN 01122941) who has attained the age of Seventy five years.

Shri Govardhan M Dhoot (DIN 01240086) Director retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment inaccordance wih provisions of the Companies Act 2013.

The brief resume and other relevant documents of the director are being given in thenotes of Notice convening the Annual General Meeting for your perusal.

b) Meetings of Board of Directors

During the year 8 meetings of the Board of Directors were convened and held on15th April 2017 08th May 2017 11th August 2017 25thSeptember 2017 31st October 2017 20th November 2017 12thDecember 2017 and 12th February 2018. The intervening gap between twoconsecutive meetings was not more than one hundred and twenty days. Detailed informationon the meetings of the Board is included in the Corporate Governance Report which formspart of the Annual Report.

c) Committees of the Board

In Compliance with the requirements of applicable laws and as a part of best governancepractices the company has following 4 (Four)

Committees of the Board as on 31st March 2018:

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Stakeholders' Relationship Committee

(iv) Corporate Social Responsibility Committee

During the financial year ended 31 st March 2018 the Board re-constitutedthe Audit Committee and Nomination and Remuneration Committee in accordance with the Actand the Listing Regulations.

The details with respect to the aforesaid Committees forms a part of the CorporateGovernance Report.

(d) Board Evaluation

Pursuant to the provisions of the Companies Act 2013 read with rules framed thereunderand the Securities and Exchange Board of India (Listing

Obligations & Disclosure Requirements)Regulations 2015 the Board had carried outthe performance evaluation of its own Committees and of

Independent Directors through self assessment and group discussions. FurtherIndependent Directors at their separate meeting evaluated the performance of the NonIndependent Directors Board as a whole and of the Chairman of the Board. The result ofthe evaluation is satisfactory and meets the requirement of the Company.

(e) Familiarization Programme

The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter along withnecessary documents reports and internal policies to enable them to familiarize with theCompany's procedures and practices. The Independent Directors also met with seniormanagement team of the Company in informal gatherings.

Details of familiarization programme imparted is placed on the Company's website.

(f) Key Managerial Personnel

There was no change in the Key Managerial Personnel during the year under review.


The remuneration policy takes into account the circumstance of business so as toattract and retain quality talent and leverage performance significantly.

Remuneration of the Executive Directors is determined by the Board on therecommendation of the Nomination & Remuneration Committee which is subject to theapproval of the Shareholders.

Non-Executive Directors are also entitled to sitting fees for attending meetings of theBoard and Committees thereof the quantum of which is determined by the Board. The sittingfees payable to Non-Executive Directors as determined by the Board is Rs. 2000 for eachmeeting of the Board Audit Committee Independent Directors Committee Nomination andRemuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee.


The Company has set up vigil mechanism viz. Whistle blower Policy to report genuineconcerns and grievances. The Policy provides for adequate safeguarding to the person whoavail the mechanism. The practice of the Whistleblower Policy is overseen by the AuditCommittee of the Board and no employee has been denied access to the Committee.

The details of the Whistleblower Policy are explained in the Report of CorporateGovernance and are also available on the Company's corporate website


The Audit Committee as on March 31 2018 comprises of the following Directors:

Shri. Subhash C Khattar (Chairman) Shri. Govardhan M Dhoot and Shri RukmeshDhandhania. All the recommendations made by the Audit Committee were accepted by theBoard. Detailed Information of the Audit Committee may be reviewed in Report on CorporateGovernance forming a part of this Report.


At MANGALAM all employees are of equal value. There is no discrimination betweenindividuals at any point on the basis of race color gender religion political opinionnational extraction social origin sexual orientation or age. Every individual isexpected to treat his/her colleagues with respect and dignity.

The Company has in place `Prevention of Sexual Harassment Policy`. This Anti-SexualHarassment Policy of the Company is in line with the requirements of The Sexual Harassmentof Women at the Workplace (Prevention Prohibition & Redressal) Act 2013. Allemployees (permanent contractual temporary and trainees) are covered under this policy.An Internal Complaints Committee (ICC) also is in place to redress complaints receivedregarding sexual harassment.

During the year 2017-18 NIL complaints were received by the Company related to sexualharassment.


The Company believes in the well being of the society at large . The Company as a partof the Corporate Social Responsibility made focused efforts in the fields of HealthcarePromoting Education and Eradicating Hunger & Malnutrition. The Company has in place aCSR Committee and CSR policy in line with the provisions of the Companies Act 2013.

The Composition of the CSR Committee is as under:

Name of the Director Category of Directorship
Shri Subhash C Khattar Chairperson Independent Director
Shri Govardhan M Dhoot Member Managing Director
Shri Brijmohan M Dhoot member Non Executive Director

Our main objective under CSR policy is to actively contribute to the social andeconomic development of the communities in which we operate. As per the policy the CSRactivities are focused not just around the plants and offices of the company but also inother geographies based on the needs of the communities. The CSR policy of the Company isavailable on the website of the Company.

The annual report on CSR activities as required to be made in the Board's Report as perRule 9 of Companies (Corporate Social Responsibility Policy)

Rules 2014 is attached herewith as Annexure-C.


The Company has not received any significant or material orders passed by anyRegulatory concern status and Company's operations in future.


There have been no material changes/ events affecting the financial position of theCompany which have occurred between the end of financial year of the Company to which thefinancial statements relate and the date of this report.



There is no qualification reservation or adverse remark or disclaimer made by theStatutory Auditors appointed under Section 139 of the Companies Act 2013 in their report.Hence the need for explanations or comments by the Board does not arise. The report of theStatutory Auditors forms part of the financial statements.


As required under Section 134(3)(c) of the Companies Act 2013 the Board of Directorsto the best of their knowledge and ability confirm that :

a) in the preparation of the Annual Accounts the applicable accounting standardshave been followed and there are no material departures;

b) that they have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company at the end of the financial year and ofthe profit of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;

d) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; andf) That they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


The paid up share capital of the Company as on March 31 2018 is Rs. 158282480divided into 15828248 equity shares of Rs. 10/- each. The Company's equity shares arelisted on the National Stock Exchange of India Ltd (NSE) and BSE Ltd (BSE). During theyear under review no further shares were issued or allotted.


Management Discussion and Analysis forms a part of this annual report which is givenas Annexure D to this Report.


In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format Form No. MGT-9 forms a part of this report asAnnexure E.


i. Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act 2013 M/s Batliboi& Purohit Chartered Accountants (Firm Registration No. 101048W ) were appointed asStatutory Auditors of the Company for a term of five consecutive years to hold officefrom the conclusion 44th

Annual General Meeting held on 26th September 2017 until the conclusion of 49th AnnualGeneral Meeting of the Company to be held in the calendar year 2022 subject to the annualratification by members at every Annual General Meeting on such remuneration as decidedby Board of Directors .

However in terms of Section 40 of the Companies (Amendment) Act 2017 notified on May07 2018 the requirement of annual ratification of appointment of Statutory Auditors byMembers at every Annual General Meeting has been omitted and accordingly Members approvalis not required for ratification of their appointment annually. Auditor's Report for theyear under review does not contain any qualifications reservations or adverse remarks.

i. Cost Auditors

As per Section 148 of the Companies Act 2013 read with Rules framed thereunder M/sAnkit Kishor Chande Cost Accountants (Membership No. 34051) have been re-appointed asCost Auditors for the financial year 2018-19 to conduct cost audit of the accountsmaintained by the Company in respect of the Bulk Drugs as prescribed under the applicableCost Audit Rules. The remuneration of Cost Auditors has been approved by the Board ofDirectors on the recommendation of Audit Committee. The requisite resolution forratification of remuneration of Cost Auditors by members of the Company has been set outin the Notice of ensuing Annual General Meeting. The Cost Auditors have certified thattheir appointment is within the limits of Section 141(3)(g) of the Companies Act 2013 andthat they are not disqualified from appointment within the meaning of the said Act.

The Cost Audit Report for the financial year 2016-17 issued by M/s Ankit KishorChande Cost Auditors in respect of the various products prescribed under the Cost AuditRules was filed with the Ministry of Corporate Affairs on 14th September 2017.

iii. Secretarial Auditors

The Board pursuant to section 204 of the Companies Act 2013 read with rule 9 of theCompanies (Appointment and Remuneration of

Managerial Personnel) Rules 2014 including any statutory modification(s) orre-enactment thereof had during the year appointed Mr. Ankit Sethi Practising CompanySecretary to conduct secretarial audit of the Company for the financial year 2017-18. TheSecretarial Audit Report for the financial year ended March 31 2018 is attached herewithmarked as Annexure F to this report.

There are no qualifications reservation or adverse remark in the report.


Corporate Governance refers to a set of systems procedures and practices which ensurethat the company is managed in the best interest of all corporate stakeholders i.e.shareholders employees suppliers customers and society in general. Fundamentals ofCorporate Governance include transparency accountability and independence.

As required by Regulation 34 read with schedule V of the Listing Regulations aseparate Report on Corporate Governance forms part of the Annual Report. The report onCorporate Governance also contains certain disclosures required under the Companies Act2013. A certificate from the Statutory Auditors of the Company regarding compliance ofconditions of Corporate Governance as stipulated in Schedule V of the Listing Regulationsforms a part of this Report.


All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were on an arm's length basis in the ordinary course ofbusiness and were in compliance with the applicable provisions of the Companies Act 2013and SEBI Listing

Related Party Transactions entered into by the Company with the Directors KeyManagerial Regulations. There are no materially significant Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.Accordingly there are no transactions that are required to be reported in form AOC-2.

However you may refer to Related Party Transactions in Notes to the StandaloneFinancial Statements.

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 at thelink:


Your Directors place on record their sincere appreciation for the steadfast commitmentand highly motivated performance by the employees at all levels which was instrumental insustained performance of the Company. The Directors are also greatful and pleased to placeon record their appreciation for the assistance and cooperation received from theFinancial Institutions Banks Government Authorities and Shareholders during the yearunder review. Your Directors are also grateful to the customers suppliers and businessassociates of your Company for their continued cooperation and support.

For and on behalf of the Board of Directors

Govardhan M. Dhoot

Chairman & Managing Director

DIN NO: 01240086

Place: Mumbai

Dated: 14th August 2018


Information pursuant to Section 134(3)(m) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 for the year ended 31st March 2018:


a) Steps taken for conservation of energy and the impact of such steps:

The manufacturing processes of the Company are not energy intensive; therefore impactof energy saving devices is insignificant. Energy conservation is an ongoing processwithin the company. The Company has been making continuous efforts for enhancement incapacity utilization cost competitiveness and quality through systematic processmonitoring and adherence to technological norms.

b) Steps taken by the Company for utilizing alternate sources of energy

No alternative source of energy was used during the period under review.

c) Capital investment on energy conservation equipment



a) Major efforts made towards technology absorption

i. Optimization of processing parameters in the manufacture of antimalerial andantiviral APIs.

ii. Quality upgradation of anti malarial APIs which are on priority list of WorldHealth Organization.

iii. Analytical method innovations to meet international quality demands.

b) Benefitsderived as a result of the above Research and Development

i. Optimal utilization of resources for the global market.

ii. We are the firstcompany to feature on WHO's API prequalification programme.

iii. We shall be a preferred source of future drug candidates and hence shall enjoy acompetitive advantage.

c) Details of imported Technology

No technology has been imported.

d) Future plan of action

i. Development of frontline antiretroviral API and their intermediates for the exports.

ii. Introduction of 4 fresh generic API candidates to our product portfolio to boostsales in Indian market.

iii. Augment the investment in sophisticated analytical instrumentation and plantmachinery to boost the quality and cost efficiencies.

e) Expenditure on R&D

The global village en route recovery curve last year faced yet another challenge whenthe Chinese Chemical Industry embarked on environmentally compliant practices enforced byits government. Your company wasn't the only one who had to adopt to the fluctuatingsupply and the soared price scenario on Chinese raw material front. Backward integrationto make own imported raw materials hence occupied top position in the priority list for Rand D to address at bench. The Research and Development comprises of 30 skilled scientistswho wear a synergistic blend of scholarship with the bench-skills. It has developeddisparate synthesis options to reduce product processing time cycles and an effluent loadfor existing as well as newer molecules. During the year under review the company hasexpanded its anti-retroviral (AIDS) API portfolio. The continued CSIR recognition to theR&D and presentation of unique/ specialty chemicals on its website have already placedour research activity on the international map. We continue to deliver impurity standardsto several companies the compounds which had not been synthesized elsewhere globally. TheStringent Regulatory Agency like WHO-

Geneva considers us as a reliable contributor to their interventions in public healthupgradation.We plan to publish significant scientific findings in journals of high impactfactor which we believe shall help boost our image amongst research driven organizations.

(Rs.In Lacs)
Current Year Previous Year
Capital 1.69 190.84
Recurring 320.42 135.88
Total 322.11 326.72


a) Activities relating to exports initiative taken to increase exportsdevelopment of new export markets for products and services and export plans: The Companyis continuously exploring avenues to increase exports to various countries.

b) Total foreign exchange used and earned

(Rs. In Lacs)
Particulars Current year Previous year
Foreign Exchange Earned
Export of goods on CIF basis (including deemed exports) 5881.92 8504.18
Foreign Exchange Outgo
(i) Raw material 16995.84 15623.99
(ii) Commission 12.73 6.93
(iii) Travelling Expenses 52.83 39.31
Total Foreign exchange outflow 17061.40 15670.23

For and on behalf of the Board of Directors

Place: Mumbai

Dated: 14th August 2018

Govardhan M. Dhoot

Chairman & Managing Director

DIN NO: 01240086