TO THE MEMBERS
The Directors have pleasure in presenting before you the THIRTY FORTH Annual Report ofSANDU PHARMACEUTICALS LIMITED together with Audited Balance Sheet and Statement of Profit& Loss for the financial year ended 31st March 2019.
1. FINANCIAL RESULTS:-
The Company's financial performance for the year ended March 31 2019 is summarizedbelow:
| || ||(in Rs) |
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations (Gross) ||494246203 ||491599301 |
|Other Income ||5739633 ||1217803 |
|Total Income ||499985835 ||492817103 |
|Total Expenses ||489782971 ||485264834 |
|Profit before exceptional items and tax ||10202864 ||7552269 |
|Exceptional ||26011 ||- |
|Profit/Loss Before Tax ||10176853 ||7552269 |
|Tax Expenses || || |
|Less: Current Tax ||3650000 ||1977645 |
|Deferred Tax ||164300 ||(40855) |
|Profit/(Loss) for the Period ||6691153 ||5615479 |
|Total Other Comprehensive Income (Net of Tax) ||372880 ||1132360 |
|Total Comprehensive Income for the period (Net of Tax) ||7064033 ||6747839 |
|Earnings per equity shares ||0.94 ||0.79 |
REVIEW OF OPERATIONS
In the financial year 2019-20 the company achieved an Income from operations of Rs499985835 as compared to Rs. 492817103 in the previous year.
Profit before tax was Rs 10176853 for the year ending 31st March 2019 as comparedto Profit of Rs. 7552269 in the previous year.
Profit after tax was Rs 6691153 for the year ended 31st March 2019 as compared to aProfit of Rs. 5615479 in the previous year.
There were no material changes and commitments affecting the financial position of theCompany from the end of the financial year till the date of the Directors Report.
In order to utilize the funds for the Company's Long term prospects the Management hasadvised the Company to conserve the funds for long term projects in the view of the samethey didn't recommend any dividend.
3. RISK MANAGEMENT:
The Board has laid down a clear Risk Management Policy to identify potential businessrisks and install effective mitigation processes to protect Company's assets and businessRisks. Risk assessment and minimization plan are reviewed by the Board on a periodicbasis. Risk Management Policy and the details of this policy are available on the websiteof the Company under the web link http://www.sandu.in/Risk_ Managment_Policy.pdf
4. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has adequate Internal Financial Control Systems commensurate with thesize scale and complexity of its operations. The Management evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company on an ongoing basis.
5. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hadapproved the Policy on Whistle Blower. This Policy inter-alia provides a direct access tothe Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.Whistleblower Policy approved and adopted by the Board of Directors which can be accessedin our website http://www.sandu.in/vigil_ mechanism_policy.pdf
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-
Shri. Shashank B Sandu holding DIN:00678098 (Non Executive Director) retires byrotation and being eligible offer himself for re appointment.
Shri Bhaskar G Sandu holding (DIN:02816792) has resigned from the Board of Directorshipand Chairmanship of the Company inorder to comply with the regulation 17 of SEBI (Listingobligation and Disclosure requirement) regulation 2018 w.e.f 25th March 2019.
Shri Bhaskar B Sandu is the promoter of the company having vast knowledge experienceand expertise on recommendation of Nomination and Remuneration Committee Board hasappointed Shri Bhaskar G Sandu as the Additional Director at the Board Meeting held on13th August 2019 subjected to approval of shareholder in the annual general Meetingpursuant to SEBI(Listing Obligation and Disclosure Requirement) Regulation 2015.
All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation25 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
6.1 BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance the directors individually as well as the evaluation of theworking of its Audit Nomination & Remuneration and Stakeholders RelationshipCommittee. The manner in which the evaluation has been carried out has been given in theCorporate Governance Report. The Weblink of familiarization Programme undertaken forIndependent Director is also available on http://www.sandu.in/Familarisation_Programme_of_ the_Independent_Directors.pdf .
The Nomination and Remuneration Committee has defined the evaluation criteria andprocedure for the Performance Evaluation process for the Board its Committees andDirectors. The criteria for Board Evaluation include inter alia Board structure andcomposition establishment and delineation of responsibilities to various Committeeseffectiveness of Board processes information and functioning.
Criteria for evaluation of individual Directors include aspects such as attendance andcontribution at Board/ Committee Meetings and guidance/ support to the management outsideBoard/ Committee Meetings. In addition the Chairman was also evaluated on key aspects ofhis role including setting the strategic agenda of the Board encouraging activeengagement by all Board members and motivating and providing guidance to the ManagingDirector/Executive Director.
Criteria for evaluation of the Committees of the Board include degree of fulfillment ofkey responsibilities adequacy of Committee composition and effectiveness of meetings.
6.2 NOMINATION AND REMUNERATION POLICY
The policy of the Company on Directors Appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatter as required under sub section (3) of section 178 of the Companies Act 2013 isavailable on our website http://www.sandu.in/ Nomination_and_Remuneration_Policy_new.pdf.
There has been no change in the policy since the last fiscal year. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the company.
During the year 7(Seven) Board Meetings and 6(Six) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
6.4 AUDIT COMMITTEE
The details of the composition of the Audit Committee are given in the corporateGovernance Report. During the year all the recommendations of the Audit Committee wereaccepted by the Board.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our corporate governance policies are available on ourwebsite www.sandu. in.The policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe Company are as follows:
|Name of the Policy ||Brief Description ||Web link |
|Whistleblower Policy ||The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behaviour actual or suspected frauds or violation of the Company's code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during the fiscal 2016 ||http://www.sandu.in/ Whistle_Blower__Policy_ new.pdf |
|Nomination and Remuneration Policy ||This policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a director (executive/ non executive) and also the criteria for determining the remuneration of the directors key managerial personnel and other employees. ||http://www.sandu. in/Nomination_and_ Remuneration_Policy_new. pdf |
|Related Party Transaction Policy ||The policy regulates all transactions between the company and its related parties ||http://www.sandu.in/ Related_Party_Transaction_ Policy-new.pdf |
|Insider Trading Policy ||The Policy provides framework in dealing with securities of the Company ||http://www.sandu.in/ Insider_Trading_Policy_ new.pdf |
|Policy for determining Materiality of event or Information ||This Policy for Determination of Materiality of Events or Information is aimed at providing guidelines to the management of Sandu Pharmaceuticals Limited to determine the materiality of events or information which could affect investment decisions and ensure timely and adequate dissemination of information to the Stock Exchange(s) (as hereinafter defined). ||http://www.sandu.in/ Insider_Trading_Policy_ new.pdf |
|Archival Policy ||The Policy deals archival of corporate records of Sandu Pharmaceuticals Limited ||http://www.sandu.in/ Archival__Policy.pdf |
|Board Diversity Policy ||This policy aims to set out the approach to achieve diversity on the Board of Directors ("Board") of Sandu Pharmaceuticals Limited ||http://www.sandu.in/ Policy_on_Board_Diversity_ new.pdf |
|Risk Management Policy ||The Risk management policy of Sandu Pharmaceuticals Limited will enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. ||http://www.sandu.in/ Risk_Managment_Policy_ new.pdf |
7. DIRECTORS RESPONSIBILITY STATEMENT:-
In accordance with the provisions of section 134(3) (c) read with section 134(5) of theCompanies Act 2013 your Directors confirm that:
a) In the preparation of annual accounts for the year ended 31st March 2019 theapplicable accounting standards read with the requirements set out under Schedule III tothe Act have been followed and there are no material departures from the same.
b) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on 31st March 2019 and of the profit ofthe Company for the year ended on that date.
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities.
d) The annual accounts have been prepared on a 'going concern basis'.
e) Internal financial controls to be followed by the Company have been laid down andthat such internal financial controls are adequate and are operating effectively and
f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
8. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Section 135 of the Companies Act 2013 relating to Corporate Social Responsibility isnot applicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
9. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVE
The Company has not transferred any amount to reserve and hence it is NIL.
10. RELATED PARTY TRANSACTIONS:
The related party contracts entered into your Company does not fall under the ambit ofSection 188(1) of the Act.
All the related party transactions entered during the financial year were at arm'slength and in the ordinary course of business. In compliance with the provisions of theCompanies Act 2013 and Regulation 23(2) of the SEBI Regulation 2015 all related partytransactions had been placed before the Audit Committee for prior approval. Pursuant toSection 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014information pertaining to related parties are given in Form AOC-2 as Annexure I of thisReport.
11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant material orders passed by the Regulators/Courts which couldimpact the going concern status of the Company and its future operations.
12.1 STATUTORY AUDITORS
M/s Dileep and Prithvi Statutory Auditor of the Company retires at the conclusion ofthe ensuing Annual General Meeting and has offered themselves to be reappointed asStatutory Auditor of the Company for the Financial Year 2019-20 and 2020-21 as recommendedby Members of Audit Committee and Board of Directors. They have confirmed theireligibility to the effect that their appointment if made would be within the prescribedlimits under the Act and that they are not disqualified for appointment
12.2 SECRETARIAL AUDITOR:
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 Shri. Swapnil Dixit Company Secretary in practice to undertake the SecretarialAudit of the Company for the Financial Year 2018-19. The Secretarial Audit report for thefinancial year 2018-19 is annexed herewith as "ANNEXURE B".
13. INTERNAL COMPLAINTS COMMITTEE
As per provisions of Section 4 of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 your Company has constituted anInternal Complaints Committee for Redressal of complaints against sexual harassment andthere were no complaints received during the financial year.
14. DISCLOSURE REQUIREMENTS
Your Company has complied with all the mandatory requirements of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Management Discussion and Analysis is annexed as "ANNEXURE A" to thereport
Secretarial Audit Report as "ANNEXURE B".
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015with the Stock Exchanges a separate section on the corporate governance is annexed as"Annexure - C"
Auditors Certificate on Corporate Governance "Annexure -D"
Certificate from Chief Financial Officer under Reg 17(8) of SEBI (LODR)Regulation "Annexure -E"
Declaration from Managing Director "Annexure F"
Certificate of non qualification of Director "Annexure G"
15. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION- FOREIGNEXCHANGE EARNINGS AND OUTGO.
A) CONSERVATION OF ENERGY:
a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.
d) The required data with regard to conservation of energy as applicable to our companyis furnished below:
|Particulars ||For the year ended 31.03.2019 ||For the year ended 31.03.2018 |
|1. ELECTRICITY || || |
| Purchased (units) ||356422 ||235996 Units |
| Total Amount Rs ||1792622 ||Rs. 1769117 |
| Rate/Units in Rs ||5.03 ||Rs. 7.50 unit |
|2. Fuel Consumed || || |
| Quantity- || || |
|Furnace Oil ||67420 ||56760 Kgs |
|Diesel ||6800 ||10650.460 Ltrs |
| Total amount- || || |
|Furnace Oil ||2438216.80 ||Rs. 1632799 |
|Diesel ||470808 ||Rs. 636452 |
| Rate per Ltr- || || |
|Furnace Oil ||36.16 ||Rs. 28.77 |
|Diesel ||69.24 ||Rs. 59.76 |
B) TECHNOLOGY ABSORPTION:
Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company constantly strives for maintenance and improvement in quality ofits products and entire Research & Development activities are directed to achieve theaforesaid goal.
C) FOREIGN EXCHANGE EARNINGS AND OUT-GO:
During the period under review there was no foreign exchange earnings or out flow.
16. EXTRACT OF ANNUAL RETURN
As provided under section 92 (3) of the Act the extract of the Annual Return in formMGT- 9 is annexed herewith as "Annexure H" which forms part of this report.
17. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
The information required under section 197 of the Act read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company and Directors is annexed as "Annexure - H" to this report.
18. FIXED DEPOSITS:-
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 thefinancial year 2018-19.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:-
The Company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of the Investments made by the Companyare given in the notes to the financial statements.
20. PARTICULARS OF CONTRACT OR ARRANGMENTS WITH RELATED PARTY
During the year under review the Company had not entered into any contract /arrangement / transaction with the related parties which could be considered as materialas per SEBI (LODR) Regulations 2015.
21. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Code of Conduct for Directors has been posted on http://www.sandu.in/Code_of_Conduct_for_Directors- new.pdf and for Senior Management Personnelhttp://www.sandu.in/Code_of_Conduct_for_ Senior_Managment-new.pdf.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the designated employees and personnel have confirmed compliance with the Code. TheDeclaration signed by the Managing Director pursuant to Regulation 26(3) read withSchedule V (Part D) of the SEBI (LODR) Regulation 2015 is published in this report.
22. P REVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prohibition of Insider Trading with aview to regulate trading in securities by the Directors and Designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board of Directors and the designated employees have confirmed compliance with theCode. Code of Conduct for Prohibition of Insider Trading is available on website of theCompany under the web link www.sandu.in
23. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office ofthe company during business hours on working days of thecompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the company secretary in advance.
24. AUDITORS REPORT AND SECRETARIAL AUDIT REPORT
The Secretarial Audit Report does'not contain any qualification reservation or adverseremarkswhereas the Auditors Report was subjected to qualification below mentioned.
The Company is regular in depositing with appropriate authorities undisputed statutorydues including Provident Fund Employees' State Insurance Income-tax Service tax SalesTax Custom Duty Excide Duty Goods and Service Tax and other material statutory dues asapplicable. Based on our audit procedures and according to the information andexplanations given to us there are no arrears of undisputed statutory dues which remainedoutstanding as at 31st March 2019 for a period of more than six months from the date theybecame payable except dues of Tax Deducted at source aggregating to Rs.452612 (P.Y.Rs. 450746/-) on account of defaults pertains to prior years
25. EXPLANATION TO AUDITORS REMARK AS PER ANNEXURE OF INDEPENDENT AUDIT REOPRT.
According to the Management out of the reported tax liability a major portion will notbe due and payable as per rectification of the same is in process.
Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous cooperation and assistance.
|For and on behalf of Board of Directors || |
|of Sandu Pharmaceuticals Limited || |
|Sd/- ||Sd/- |
|Umesh Sandu ||Shashank Sandu |
|DIN:01132141 ||DIN:00678098 |
|Managing Director ||Director |
|Dated:13/08/2019 || |
|Place: Goa || |