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Sakar Healthcare Ltd.

BSE: 538377 Sector: Health care
NSE: SAKAR ISIN Code: INE732S01012
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Sakar Healthcare Ltd. (SAKAR) - Director Report

Company director report

The Members

Sakar Healthcare Limited

Your Directors have pleasure in presenting the 17TH ANNUAL REPORT togetherwith the Audited Financial Statements for the Financial Year 2020-21 ended 31st March2021.

1. FINANCIAL RESULTS AND OPERATIONS:

(Rs. in lakh)

Particulars 2020-21 2019-20
Sales and other Income 9591.46 8499.71
Profit before Interest and Depreciation 2378.30 2155.93
Less: Interest 248.25 225.26
Profit before Depreciation 2130.05 1930.67
Less: Depreciation 805.83 707.98
Profit before Taxation 1324.22 1222.69
Less: Provision for Taxation - Current 317.75 251.00
Less/ (Add): Provision for Taxation - Deferred (62.73) (2.74)
Less: Provision for Taxation - Previous year - 12.15
Profit for the year 1069.20 962.28

There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2021 and date of this report.

During the year under review the Company achieved turnover of Rs.9591.46lakh comparedto Rs. 8499.71 lakh during 2019-20. The Company earned profit before interestdepreciation and tax of Rs. 2378.30 lakh during 2020-21 compared to Rs. 2155.93 lakhduring 2019-20. After providing for interest depreciation and taxes the net profit forthe year under review stood at Rs. 1069.20 lakh as compared to Rs. 962.28 lakh during2019-20.

2. DIVIDEND:

With view to conserve the financial resources for the future requirement of theCompany the Board of Directors has not recommended any dividend for the year.

3. AWARDS AND RECOGNITIONS:

3.1 Winner of Best Pharmaceutical Products Manufacturer – 2020 India by AIGlobal Staffordshire UK and awarded with Certificate and a Bespoke Crustal Trophy.

3.2 The Company has been honoured under BS 10 Leading Players in Healthcare Industry2019 by Business Sight Magazine.

4. COVID-19 PANDEMIC:

Global Pandemic Covid – 19 has started to surface significantly by mid-March 2020forcing government to take decisive rules including lockdown. Pharmaceutical Industry hasgot categorized under Essential Services and hence has been exempted from day – 1 oflockdown i.e. 25thMarch 2020. Therefore the manufacturing plant functioningand business operations could be maintained all through this phase of back to backlockdowns though there were few disturbances due to restricted manpower and materialmovement due to logistic irregularities and increased freight charges due to limitedscope. The plant operations were smooth adhering to proper screening and social distancingonce the directive has been delivered by the government health authorities. The Companyhas adopted well to this changing business environment and as there has been norestrictions in business due to categorization under Essential Services. The Company couldcontinue exports to multiple countries following government guidelines.

5. ALLOTMENT OF EQUITY SHARES ON PREFERENTIAL BASIS TO PROMOTER &NON-PROMOTER:

The Company by obtaining necessary approval of members (through postal ballot process)has allotted 657000 Equity Shares of Rs. 10/- each at premium of Rs. 110/- per EquityShares on 27th February 2021 to Promoter Mr. Sanjay S. Shah on PreferentialBasis after complying provisions and guidelines under the Companies Act 2013 and SEBIRegulations upon conversion of his Non Interest bearing unsecured Loan of Rs. Rs.78840000/-. The Company also obtained approval of NSE for Listing & Trading of thesaid Equity Shares in due course of time. As required under Regulation 32(7A) of SEBI LODRRegulations 2015 disclosure is herewith submitted that the object/purpose of thepreferential issue is fully achieved by complying the conditions of the Banker by way ofconversion of the non-interest bearing unsecured loans of Rs. 78840000/- of Promoterinto Equity Shares of the Company.

Further The Company by obtaining necessary approval of members (at the Extra OrdinaryGeneral Meeting) has allotted 1500000 Equity Shares of Rs. 10/- each at premium of Rs.89/- per Equity Shares on 17thApril 2021 to Cobra India (Mauritius) LimitedNon-Promoter on Preferential Basis after complying provisions and guidelines under theCompanies Act 2013 and SEBI Regulations. The Company also obtained approval of NSE forListing & Trading of the said Equity Shares in due course of time. The disclosure asrequired under Regulation 32(7A) of SEBI LODR Regulations 2015 relating to utilizationof funds would form part of the Annual Report for the year 2021-22 as the said allotmentis made in the year 2021-22.

Post allotment of Equity Shares as aforesaid the paid up Capital of the Company stoodat Rs. 17.12 Crores divided into 17118000 Equity Shares of Rs.10/- each as on date ofthis report.

6. SHARE CAPITAL:

The Company by obtaining necessary approval of members (through postal ballot process)has increased its Authorised Share Capital from Rs.150000000/- to Rs. 200000000/-(Rupees Twenty Crores only) divided into 20000000 (Two Crore) Equity Shares of Rs. 10/-(Rupees Ten only) each by creation of additional 5000000 (Fifty Lakh) Equity Shares ofRs. 10/- each ranking pari-passu in all respect with the existing Equity Shares of theCompanyand has complied with the necessary formalities in this regard.

The paid up Share Capital of the Company as on 31st March 2021 was Rs.15.62 Crore. As on 31st March 2021 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.

7. RESERVES:

The Company does not propose to transfer any amount to General Reserves.

8. DEMATERIALISATION OF EQUITY SHARES:

All the Equity Shares of the Company are in dematerialised form with either of thedepository viz. NSDL and CDSL. The ISIN allotted to the Company is INE732S01012.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL:

9.1 Mr. Shailesh B. Patel and Mr. Prashant C. Srivastav at the 16th AGMheld on 24th September 2020 have been re-appointed as Independent Directorsof the Company for a second consecutive term of 5 years from the conclusion of 16thAGM up to the conclusion of the 21st AGM.

9.2 One of your Directors viz. Ms. Rita S. Shah retires by rotation in terms of theArticles of Association of the Company. However being eligible offers herself forreappointment.

9.3 Mr. Hardik P. Mehta has resigned as an Independent Director of the Companyw.e.f. 28thSeptember2020. 9.4 The Board based on the recommendations of the Nomination and RemunerationCommittee had appointed Mr. Hemendra C. Shah as Independent Director w.e.f. 28thSeptember 2020 to hold the office upto the date of forthcoming 17th 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.28th September 2020 to 27th September 2025.

9.5 Based on the recommendations of the Nomination and Remuneration Committee it isproposed to re-appoint Mr. Sanjay S. Shah as Managing Director Mr. Aarsh S. Shahas JointManaging Director and Ms. Rita S. Shah as Whole Time Director of the Company for a periodof 3 years from 1st December 2021 to 30th November 2024.

9.6 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. The IndependentDirector shall enroll his / her name in the Databank being maintained by Indian Instituteof Corporate Affairs to qualify as an Independent Director. The enrollment of IndependentDirectors has been completed and they have furnished the declaration affirming theircompliance to the Board with the provisions contained under sub rule 1 & 2 of Rule 6of Companies (Appointment & Qualification of Directors) Rules.

9.7 Brief profile of the Director who is being appointed or re-appointed as requiredunder Regulations 36(3) of Listing Regulations 2015 and Secretarial Standard on GeneralMeetings is provided in the notice for the forthcoming AGM of the Company.

9.8 The Board of Directors duly met 14 times during the financial year under review.

9.9 Ms. Hema Advani resigned as Company Secretary & Compliance Officer of theCompany w.e.f. 29th October 2020. Mr. Bharat Soni has been appointed asCompany Secretary & Compliance Officer of the Company w.e.f. 29th October2020. 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 March2021 being end of the financial year 2020-21and of the profit of the Company for the year;

(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 safeguardingof assets 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 2020-21 (Rs. In Lakh) % increase over last year Parameters Median of Employees Remuneration Ratio Commission received from Holding/ Subsidiary
1 Sanjay S. Shah Managing Director 22.75 - Higher responsibility and time involvement 360000 15.82 times -
2 Rita S. Shah Wholetime Director 6.50 - N.A. 360000 55.38 times -
3 Aarsh S. Shah Joint Managing Director 22.75 - Higher responsibility and time involvement 360000 15.82 times -

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. The Relationship of remuneration to performance is clearand meets appropriate performance benchmarks. All the Board Members and Senior Managementpersonnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policyis available on the Company’s websitewww.sakarhealthcare.com

12. KEY MANAGERIAL PERSONNEL:

12.1 % INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

Sr. No. Name of the Director & KMP Designation Percentage (%) Increase (If any)
1. Sanjay S. Shah Managing Director -
2. Rita S. Shah Wholetime Director -
3. Aarsh S. Shah Joint Managing Director -
4. Jhonny G. Kudilil CFO 3.09
5. Hema Advani* Company Secretary -
6. Bharat Soni# Company Secretary -

* Resigned w.e.f. 29th October 2020 # Appointed w.e.f. 29thOctober 2020

12.2 COMPARISON BETWEEN REMUNERATION OF KMP & PERFORMANCE OF THE COMPANY:

As per the Remuneration Policy and based on the Recommendation of Nomination &Remuneration Committee the Relationship of remuneration to KMP & performance ofCompany is clear and meets appropriate performance benchmarks.

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 relationship between average increase in remuneration and Company’sperformance is as The number of Employees of the Company is 247 per the appropriateperformance benchmarks and reflects short and long term performance objectives appropriateto the working 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. PARTICULARS OF LOANS GUARANTEES INVESTMENT& SECURITIES PROVIDED:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 respectively are given in the notes to the FinancialStatements attached to the Auditors’ Report.

15. RELATED PARTY TRANSACTIONAND 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 theAuditors’ 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 theyear the Company had not entered into any transactions with related parties which couldbe considered as material in accordance with the policy of the Company on materiality ofrelated party transactions.

16. 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.

17. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015Report 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.

18. 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 – C.

There are no remarks / qualification in the Secretarial Audit Report hence noexplanation has been offered.

19. WEB ADDRESS OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the draft AnnualReturn as on 31st March 2021 is available on the Company’s websitewww.sakarhealthcare.com.

20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate GovernanceReport.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per provisions of 135 of the Companies Act 2013 and Rules made thereunder theCompany has constituted a CSR Committee of Directors consisting of Mr. Sanjay S. ShahChairman Mr. Aarsh S. Shah and Mr. Prashant C. Srivastav as members and has laid down aCSR policy.

Some of the core areas identified by the Committee are Education Health Environmentwomen empowerment Animal Welfare Hungeretc. The Company spent Rs. 28.85 lakh towards CSRfor the year 2020-21.

21.1 ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY:

As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules 2014 theAnnual Report on Corporate Social Activities has been attached herewith as Annexure–D.

22. GENERAL:

22.1 AUDITORS:

STATUTORY AUDITORS:

At the 16th Annual General Meeting held on 24th September 2020M/s. A. L. Thakkar & Co. Chartered Accountants Ahmedabad were appointed as StatutoryAuditors of the Company to hold office till the conclusion of 18th AnnualGeneral Meeting to be held in the year 2022.

The remarks of Auditors are self explanatory and have been explained in Notes onAccounts.

COST AUDITORS:

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.Dalwadi& Associates Cost Accountants (Firm Registration Number 000338) as CostAuditor to audit the cost accounts of the Company for the financial year 2021-22.

As required under the Companies Act 2013 a resolution seeking Shareholders’approval for the remuneration payable to the Cost Auditor forms part of the Noticeconvening the Annual General Meeting for their ratification.

22.2 INSURANCE:

The Company’s properties including building plant and machinery stocks storesetc. continue to be adequately insured against risks such as fire riot strike civilcommotion malicious damages machinery breakdown etc.

22.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there wereno overdue deposits.

22.4 RISKS 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 are monitored regularly with reference tostatutory regulations and guidelines defined by the Company.

22.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Associate / JVs.

The Company has a Subsidiary namely Sakar Oncology Private Limited. Further astatement containing the salient feature of the financial statement of Subsidiary companyunder the first proviso to sub-section (3) of section 129 is appended as Annexure - E.Apart from this the Company does not have any Subsidiary.

22.6 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.

22.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courtsor tribunals impacting the going concern status of the Company and its future operations.

22.8 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 soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

22.9 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.

22.10 GRATUITY:

The Company has made necessary provisions for the payment of Gratuity.

22.11 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.

22.12 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards issued by the Institute of CompanySecretaries of India which are mandatorily applicable to the Company.

23. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI your Directors haveframed and approved Insider Trading Policy for the Company i.e. ‘Code of Practicesand Procedures for Fair Disclosure of Unpublished Price Sensitive Information’ and‘Code of Conduct for Regulating Monitoring and Reporting of Trading by DesignatedPersons/Insiders’. The Policy is available on the company’s website.

24. 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.

25. DISCLOSURES:

The Company has not entered into any transaction of material nature with the Promotersthe Directors or the Management that may have any potential conflict with the interest ofthe Company.

26. FINANCE:

26.1 The Company has availed financial assistance in form of Term Loans and WorkingCapital from State Bank of India.

26.2 The Company’s Income tax Assessment has been completed upto the AssessmentYear 2019-20.

27. ACKNOWLEDGEMENT:

Your Directors express their sincere gratitude for the assistance and co operationextended by Banks Government Authorities Shareholders Suppliers and Customers.

Your Directors also wish to place on record their appreciation of the contribution madeby the employees at their levels towards achievements of the Company’s goals.

Registered Office For and on behalf of the Board
Block No. 10/13 Village: Changodar Sanjay S. Shah Aarsh S. Shah
Sarkhej- Bavla Highway Chairman & Managing Director Jt. Managing Director
Tal: Sanand Dist: Ahmedabad -382 213 DIN:01515296 DIN: 05294294
Date : 26th July 2021

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