SANGAM HEALTH CARE PRODUCTS LIMITED
We have pleasure in presenting the 23rd Annual Report on the business and operations ofCompany and Financial Results for the year ended 31st March 2017.
As per the requirements Section 134 of the Companies Act 2013 and Rule 8(5) (i) ofCompanies (Accounts) Rules 2014 the summarized Financial Results of the Company aregiven hereunder:
| || ||(Rs. in lakhs) |
|Particulars ||2016-2017 ||2015-16 |
|Total Income ||2373.69 ||2343.85 |
|Total Expenditure before Finance cost & Depreciation ||2400.66 ||1676.95 |
|Finance cost ||504.86 ||379.99 |
|Depreciation ||152.16 ||152.56 |
|Profit/(Loss) before Taxation ||(683.99) ||(153.86) |
|Provision for tax ||1.66 ||- |
|Profit/(Loss) after Taxation ||(685.66) ||(153.86) |
OPERATIONS AND BUSINESS OUTLOOK:
During the year under review the Company recorded a total income of Rs. 2373.69 lakhsand a net Loss of Rs. 685.66 lakhs against income of Rs. 2343.85lakhs and a net loss ofRs. 153.86 lakhs in the previous year. Company is adopting a very cautious approachtowards its business in view of the risk involved in this business to increase the levelof profit.
REVOCATION OF SUSPENSION OF COMPANY'S SCRIP
Revocation of suspension of the Company's Shares in BSE Limited is in progress.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
As per the requirements Section 134 (3) (l) of the Companies Act 2013 we want todeclare that there are no significant material changes and commitments affectingfinancial position of the company between 31st March 2017 and the date of Board's Report.
CHANGE IN THE NATURE OF BUSINESS:
As per the requirements Rule 8 (5) (ii) of Companies (Accounts) Rules 2014 we want todeclare that there is no significant change in the nature of business of the companyduring the last financial year.
SHARE CAPITAL AND CLASSIFICATION OF COMPANY:
The authorized capital of the Company as on 31st March 2017 was Rs.150000000/- divided into 15000000 equity shares of Rs. 10/- each.
The Subscribed Issued and Paid-up capital of the Company as on 31st March2017 was Rs. 148607000/- divided into 14860700 equity shares of Rs. 10/- each.
Your directors express their inability to recommend any dividend for the financial year2016-2017.
Your Company has not accepted/invited any deposits from the public for the year underreview as per Section 73 of the Companies Act 2013 and the rules made there under.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the requirements Rule 5 (iii) of Companies (Accounts) Rules 2014 we want toinform you that the following are the Directors and Key Managerial Personnel of theCompany as on the date of the Report.
|Sl No. ||Name ||Designation ||DIN |
|1. ||Mr. Bala Gopal Addepalli ||Managing Director ||01712903 |
|2. ||Mr. Khushwant Singh ||Independent Director ||00500962 |
|3. ||Mr. Basawaraj Nagabusappa Sajjan ||Director ||05209651 |
|4. ||Mrs. Padma Ghanakota ||Director ||07078176 |
|5. ||Mr. Lingaraj Shantalingappa Patil* ||Director ||00731663 |
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act 2013 Mr. Bala Gopal Addepalli (DIN:01712903 Director will retire at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment. The Board recommends his re-appointment.
During the year under review no directors were appointed as the director of theCompany. However Board in its meeting dated September 05 2017 has recommded to appointthe following candidate as Independent diretor in the ensuring Annual General Meeting fora period of five (5) years coomencing from September 29 2017.
|Sl No. ||Name ||DIN |
|1. ||Rajesh Kakkera ||0007931218 |
|2. ||Ramu Chaganti ||0007931223 |
|3. ||Madhavarao Mandalapu ||0007931672 |
During the year under review Mrs. Ramana Ganakota (DIN: 07067685) & Mr. VenkataSubramanya Sharma Devarkonda (DIN: 07067129) resigned from the directorship of the Companyw.e.f. February 17 2017 and Mr. Pradyut Waghray (DIN: 00765063) tendered his resignationw.e.f. September 02 2017 and the same has been noted and taken on record by the Board inits meeting dated September 05 2017.
*Mr. Lingaraj Shantalingappa Patil (DIN: 00731663) has tendered his resignation onFebruary 28 2015 and the same has not been accepted by the management.
D. EVALUATION OF THE BOARD'S PERFORMANCE
As per provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI (LODR)Regulations 2015 The Company has devised a policy for performance evaluation ofIndependent Directors Board Committees and other individual directors which includecriteria for performance evaluation of executive and nonexecutive director.
The Directors were overall satisfied with the evaluation results which reflected theoverall engagement of the Board and its Committees with the Company.
E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review in terms of theprovisions of Regulation 34 of the SEBI (LODR) Regulations 2015 presented in a separatesection forming part of the Annual Report. (Annexure I).
F. REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is attached to this report as Annexure II.
G. DECLARATION BY INDEPENDENT DIRECTORS
In accordance with Section 149(7) of the Companies Act 2013 each Independent Directorhas confirmed to the Company that they meet the criteria of independence as laid down inSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (LODR)Regulations 2015..
The Company's Independent Directors meet on May 05 2017 without the presence ofExecutive Directors or KMP. Matters pertaining to the Company's affairs was put forththeir views to the chairman of the Independent Director Committee Meeting. Pursuant to theprovisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015 to discuss:
? Evaluation of the performance of the Chairman of the Company taking into account theviews of the Executive and Non-Executive Directors.
? Evaluation of the performance of Non Independent Directors and the Board of Directorsas a Whole;
? Evaluation of the quality content and timelines of flow of information between themanagement and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
H. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) THAT in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
(b) 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 the end of thefinancial year and of the profit and loss of the company for that period;
(c) THAT the directors had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) THAT the directors had prepared the annual accounts on a going concernbasis;
(e) THAT the directors had laid down internal financial controls to be followedby the company and that such internal financial controls are adequate and were operatingeffectively; and
(f) THAT the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
I. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Board of Directors of the Company have adopted Whistle Blower Policy. This policyis formulated to provide an opportunity to employees to raise concerns and to access theAudit Committee in good faith in case they observe unethical and improper practices orany other wrongful conduct in the Company to provide necessary safeguards for protectionof employees from reprisals or victimization and to prohibit managerial personnel fromtaking any adverse personnel action against those employees.
There were no complaints received during the year 2016-17.
J. PREVENTION OF INSIDER TRADING:
In terms of the provisions of SEBI (Prohibition of Insider Trading) Regulation 2015effective from 15.05.2015 the Board of Directors of the Company has adopted the Code ofPractices and Procedure and Code of Conduct for fair disclosure of unpublished pricesensitive information. The object of this code is to protect the interest of theshareholders at large to prevent misuse of any price sensitive information and to preventant insider trading activity by dealing in shares of the company by the Directorsdesignated employees and other employees of the Company.
The Board is responsible for implementation of the Code.
Formulated the Code of Conduct to Regulate Monitor and Report Trading by Insiders interms of Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations 2015. Mr.G S R Murthy has been designated as Compliance Officer for the purpose of this Code. AllBoard Directors and the designated and other employees have confirmed compliance with theCode
K. FAMILIARIZATION PROGRAM:
The details of programme for familiarization of Independent Directors with the Companynature of the industry in which the Company operates and related matters are made aware tothe independent Director. Further at the time of appointment they were issued a formalletter of appointment outlining their duty responsibilities role and functions.
AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS:
As per second proviso to Section 139(2) of the Companies Act 2013 (the Act) atransition period of three years from the commencement of the Act is provided to appoint anew auditor if the existing auditor's firm has completed two terms of five consecutiveyears. accordingly M/s K. R. Shekher Chartered Accountants Secunderabad are proposed tobe appointed as auditors for a period of five years commencing from the conclusion of 23rdAGM till the conclusion of the 28th AGM. They have confirmed that theirappointment if made would be within the limits specified under Section 141(3)(g) of theAct.
They have further confirmed that they are not disqualified to be appointed as statutoryauditors in terms of the provisions of the proviso to Section 139(1) Section 141(2) andSection 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules2014. The Audit Committee and the Board of Directors recommend the appointment of M/s K.R. Shekher Chartered Accountants Secunderabad as statutory auditors of the Companyfrom the conclusion of the 23rd AGM till the conclusion of 28th AGM to theshareholders.
The Statutory Auditors' Report obtained from M/s Jayant and Sadashiv does not containany reservation qualification or adverse remark. Auditors have not reported any offenseinvolving fraud committed against the Company by the officers or employees of the Companyunder sub section (12) of section 143 to Board.
The Statutory Audit Report for the financial year 2016-17 is annexed herewith as AnnexureIII to this Report.
B. SECRETARIAL AUDITOR
During the year The Company has appointed R & A Associates Company SecretariesHyderabad as Secretarial Auditor. The Secretarial Audit Report (SAR) for the financialyear 2016-17 is annexed herewith as Annexure IV to this Report. TheSecretarial Audit Report contains following qualification and reply by management.
|Secretaries auditor observation ||Reply by management |
|Non appointment of Independent director and Company Secretary. ||Management is in the process of identifying appropriate candidates to be appointed as Independent Director and Company Secretary |
|Connectivity with Central Depository Services Limited (CDSL) only ||As on March 31 2017 Companies shareholders are 650 and trading of share were suspended on 10th September 2001 due to this company not obtained connectivity with NSDL |
|Delay in submission of information/disclosures to BSE Limited. ||Management commits that hence forth information will furnished to stock exchange promptly |
|Demat of shares held by promoters ||Promoters are in the process of demat of shares |
|Non payment of Listing fees ||Company being a sick company has financial crunch; however company will make the payment. |
C. COST AUDITOR
During the year under review the Company was not required to maintain cost records andget them audited by Cost Auditor.
TRANSFER TO RESERVE
The Company has not transferred any amount to reserve in the financial year. INDUSTRIALRELATION
The Management and Labour relations were very cordial and harmonious and continued toremain cordial at all the level during the year under review.
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with CorporateGovernance is annexed to the Report on Corporate Governance.
The Company has complied with the requirements about code of conduct for Board membersand Senior Management Personnel. The said policy is available on the website of theCompany.
Pursuant to Schedule V of SEBI (LODR) Regulations 2015 the declaration signed by theManaging Director affirming compliance of the Code of Conduct by the Directors and SeniorManagement personnel of the Company for the financial year 2016-2017 is annexed and formspart of the Corporate Governance Report Annexure V.
CORPORATE SOCIAL RESPONSIBILITY
The Company was not required to constitute a CSR Committee as the Company has not metany of the thresholds mentioned in Section 135 of the Companies Act 2013 during thefinancial year under review. Hence reporting about policy on Corporate SocialResponsibility and the initiatives taken are not applicable to the Company.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the employees of the Company will be provided upon request. In termsof Section 136 of the Act the Report and Accounts are being sent to the members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting. If any member is interested in obtaining a copy thereof such member may write toCompany in this regard.
No employee was in receipt of remuneration in excess of limits prescribed under Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and hence the disclosure as required under Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not required.
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 business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Annexure VI
The Policy on materiality of related party transactions as approved by the Board.
Your Directors draw attention of the members to Notes No. 24 to the financialstatement 2016-17 which sets out related party disclosures.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not made any loan given guarantee provided security or madeinvestments pursuant to the provisions of Section 186 of Companies Act 2013.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith in the form of MGT-9 asAnnexure VII to this Report.
B. COMPOSITION OF SUB COMMITTEE:
NAME OF THE COMMITTEE AND MEMBERS OF COMMITTEE a) AUDIT COMMITTEE
|1 ||Mr. Khushwant Singh - Chairman ||Independent Director |
|2 ||Mr. Pradyut Waghray - Member ||Independent Director |
|3 ||Mr. Bala Gopal Addepalli - Member ||Executive Director |
|b) NOMINATION AND REMUNERATION COMMITTEE |
|1 ||Mr. Khushwant Singh - Chairman ||Independent Director |
|2 ||Mr. Pradyut Waghray - Member ||Independent Director |
|3 ||Mrs. Padma Ghanakota Member ||Non Executive Director |
Note: Mrs. Padma Ghanakota was appointed as a member of Nomination & RemunerationCommittee in the Board Meeting dated February 13 2017; in place of Mr. BasawarajNagabusappa Sajjan who showed his inability to continue as the member of the Committee
c) STAKEHOLDERS RELATIONSHIP COMMITTEE
|1 ||Mr. Khushwant Singh Chairman ||Independent Director |
|2 ||Mr. Pradyut Waghray Member ||Independent Director |
|3 ||Mr. Bala Gopal Addepalli - Member ||Executive Director |
Note: Mr. Khushwant Singh and Mr. Pradyut Waghray were appointed as a members inStakeholders relationship committee in the Board Meeting dated February 13 2017; in placeof Mr. Basawaraj Nagabusappa Sajjan who showed his inability to continue as the member ofthe Committee
C. NUMBER OF BOARD MEETINGS:
As per the requirements Section 134 (3) (b) of the Companies Act 2013 we want toinform you that the Board of Directors met 6 times during this financial year. Forfurther details please refer report on Corporate Governance. The Maximum interval between2 meetings did not exceed 120 days as prescribed under Companies Act 2013.
The equity share of the Company is listed with Bombay Stock Exchange (BSE). TheSecurity ID of the company is SANHP and the Security Code is 531625.
* Listing fees is payable to BSE Ltd. including financial year 2016-17.
* Share Trading is suspended.
The Board of your company has formulated a risk management policy in connection withthe risk that the organization faces in its day to day business such as strategicfinancial credit market liquidity security property IT legal regulatory etc. Theboard reviews the policy in regular interval.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars regarding Research & Development Conservation of energy technologyabsorption in terms of Section 217(1)(e) of the Companies Act 1956 read with Companies(Disclosure of Particulars in the Report of Board of Directors) Rules1988 are given inthe "Annexure VIII" forming part of this Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. The Company has no subsidiaries joint ventures or associate companies.
b. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
c The Company has in place adequate internal financial controls with reference tofinancial statements. These controls ensure the accuracy and completeness of theaccounting records and preparation of reliable financial statements.
POLICY ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces and other associated and incidental factors may however lead to variation in actualresults.
Your company has complied with the requirements of the Secretarial Standards issued byInstitute of Company Secretaries of India and which is approved by the Central Government
The Directors thank the Company's Bankers and officials of concerned GovernmentDepartments for their co-operation and continued support to the Company.
The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management.
Your Directors wish to place on record their appreciation to employees at all levelsfor their hard work dedication and commitment. The Board also desires to place on recordits sincere.
| ||By Order of the Board |
| ||For Sangam Health Care Products Limited |
|Place : Secunderabad ||(BALAGOPAL ADDEPALLI) |
|Date : September 05 2017 ||Managing Director |
| ||DIN: 01712903 |
ANNEXURE - VII
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
Information on Conservation of Energy technology absorption foreign exchange earningsand outgo required to be given pursuant to Section 134 (3) (m) of the Companies Act 2013read with the Rule 8 of Companies (Accounts) Rules 2014 is not applicable since there isno such activity at present being pursued by the Company.
A. CONSERVATION OF ENERGY
|i) The steps taken or impact on conservation of energy ||Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using effective equipment. |
|ii) The steps taken by the Company for utilizing alternate sources of energy ||Nil |
|iii) The capital investment on energy conservation equipments ||Nil |
B. TECHNOLOGY ABSORPTION
|i) The efforts made towards technology absorption ||The Company has adapted indigenous technology and innovated upon the same. |
|ii) The benefits derived like product improvement cost reduction product development or import substitution ||Product improvement increase in yield production of high value added products. |
|iii In case of imported technology (imported during the last three y ears reckoned from the beginning of the financial year) ||N o technology has been imported during the last three years. |
|The details of technology imported ||N A |
|The year of import ||N A |
|Whether the technology been fully absorbed ||N A |
|If not fully absorbed areas w here absorption has not taken place and the reasons thereof and ||N A |
|iv) The expenditure incurred on Research and Development ||Expenditure on in-house Research & Development w as not incurred during the year under review. |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
|i) Foreign Exchange Earned: ||2016-17 ||2015-16 |
|FOB value of exports ||Nil ||Nil |
|CIF value of exports ||Nil ||Nil |
|ii) Foreign Exchange used: || || |
|Commission on Exports ||Nil ||Nil |
|Foreign Travel Expenses ||Nil ||Nil |
|Spare parts ||Nil ||Nil |