| The Members,
The directors have pleasure in presenting their Twenty Seventh Annual
Report on the business and opera- tions of the company together with
the Audited Statement of Accounts for the year ended 31st March, 2015.
Financial Highlights :
During the year under review, performance of your company is as under:
( in Rupees)
PARTICULARS Year ended Year ended
31st March 2015 31st March 2014
Revenue from Operations 55,14,73,488 9,55,10,003
EBITDA 6,08,24,413 1,95,98,432
Less: Finance cost 66,76,239 20,85,493
Less: Depreciation 68,09,772 1,04,86,117
Profit before tax & exceptional items 4,73,38,402 70,26,822
Less: Exceptional items - -
Profit before tax 4,73,38,402 70,26,822
Less: Tax expenses 1,08,69,924 (84,89,345)
Profit After Tax 3,64,68,478 1,55,16,167
Transferred to general reserve - -
Proposed Dividend - -
Closing Balance in Statement of
Profit and Loss (5,81,86,269) (9,36,92,550)
Company Performance
Your Company has posted good financial results during the year under
review. Turnover of the Company has increased from 955.10 lakhs to
5514.73 lakhs and the Net profit increased from 155.16 lakhs to 364.68
lakhs.
Dividend
To Conserve the funds for operations of the Company, the Board do not
recommend any dividend for this financial year.
Amounts Transferred to Reserves: Nil Disclosures regarding :
Changes in Share Capital
There was no change in the structure of the share capital of the
Company during the financial year under review.
Issue of Equity Shares with Differential Rights
The Company has not made any issue of equity shares with Differential
Rights under the provision of Section 43, read with Rule 4(4) of the
Companies (Share Capital and Debentures) Rules, 2014 during the
Financial Year under review.
Issue of Employee Stock Options
The Company has not made any issue of equity shares via Employee stock
options during the Financial Year under review.
Issue of Sweat Equity Shares
The Company has not made any issue of equity shares under the provision
of Section 54, read with Rule 8(13) of the Companies (Share Capital and
Debentures) Rules, 2014, during the Financial Year under review.
Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Manage- ment and Administration) Rules,
2014, an extract of annual return in MGT 9 as a part of this Annual
Report as Annexure I.
Details of Board Meetings held
During the Financial Year 2014-15, five meetings of the Board of
Directors of the company were held, as against the minimum requirement
of four meetings.
Date Board Strength No. of Directors Present
28th May, 2014 06 06
14th August, 2014 06 06
12th November, 2014 06 06
11th February, 2015 06 06
27th March, 2015 06 06
Particulars of Loan, Guarantees and Investments under Section 186
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Compa- nies Act, 2013 forms part of
the Financial Statements.
Particulars of Contracts or Arrangements with Related Parties
The particulars of every contract or arrangements entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 shall be disclosed in Form No. AOC-2. As
Annexure II.
Explanation to Auditor's Remarks
The Auditors' Report does not contain any qualification. Notes to
Accounts and Auditors remarks in their report are self-explanatory and
do not call for any further comments.
Material Changes Affecting the Financial Position of the Company
There are no material changes / events, occurring after balance sheet
date till the date of the report to be stated.
Conservation of Energy, Technology absorption, Foreign Exchange
Earnings and Outgo
The information pertaining to conservation of energy, technology
absorption, Foreign exchange Earnings and outgo as required under
Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of
the Companies (Accounts) Rules, 2014 is annexed as "Annexure III"
Details of Subsidiary, Joint Venture or Associates Associated
Companies:
Godavari Capital Private Limited, Godavari Homes Private Limited and
A.K. Paper Products Private Limited. Vigil Mechanism Your Company is
committed to highest standards of ethical, moral and legal business
conduct. Accord- ingly, the Board of Directors have formulated Vigil
mechanism which is in compliance with the provisions of section 177(9)
& (10) of the Companies Act, 2013 and Clause 49 of the Listing
Agreement, in its meeting held on 28th May, 2014. The Vigil Mechanism
Policy has been uploaded on the website of the Company at
www.godavaridrugs.com
Nomination & Remuneration Committee Policy
The Board of Directors of your Company in the meeting held on 28th May,
2014, constituted the Nomina- tion and Remunertaion Committee with the
requisite terms of reference as required under Section 178 of the
Companies and other applicable provisions thereof in place of existing
Remuneration Committee. The said Committee framed, adopted and
recommended the "Nomination, Remuneration & Evaluation Policy".
The Details of the Committee have been provided under Corporate
Governance Report, which forms part of this Annual Report.
Disclosures under Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013
In order to promote safe and indiscriminative environment, the Company
has formed an Internal Com- plaints Committee where employees can
register their complaints against sexual harassment.
During the year under review Company has not received any complaint of
harassment.
Details of Directors and Key Managerial Personnel
In accordance with the provisions of the Act and the Articles of
Association of the Company, Shri Mohit Jaju, Director of the Company,
retire by rotation at the ensuing Annual General Meeting and being
eligible have offered themselves for re-appointment.
During the year under review, the members approved the appointments of
Shri Syed Hussain, Shri Dilip Patel, Shri Ramesh Babu Telugu and Smt.
Vimala Madon as an Independent Director who are not liable to retire by
rotation. Persuant to Section 203 of the Companies Act 2013, Company
has appointed Mr. Jeevan Innani, Company Secretary.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Act and Clause 49 of the
Listing Agreement with the Stock Exchanges.
The Company has drafted a Policy for performance evaluation of
Independent Directors, Board, Commit- tees and other individual
Directors which includes criteria for performance evaluation of the
non-executive directors and executive directors.
On the basis of the Policy framed for performance evaluation of
Independent Directors, Board, Committees and other individual
Directors, a process of evaluation activity was followed by the Board
for its own performance and that of its Committees and individual
Directors. The Company has conducted programmes to familiarize
Independent Directors with the Company, their roles, rights,
responsibilities in the Company, nature of industry in which the
Company works and other allied matters.
Details of significant & material orders passed by the regulators or
courts or tribunal
- Matter of Imports relating advance licensing scheme is under
adjudication with the Customs Depart- ment, Mumbai amounting Rs.
696062/-
- Matter of Central Excise & Customs, amounting Rs. 1629999 is under
adjudication with Commissioner (Appeals) Customs, Central Excise &
Service Tax, Nagpur.
Statement in Respect of Adequacy of Internal Financial Control with
Reference to the Financial Statements
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weakness in the operation was
observed.
Deposit from Public
The Company has not accepted any deposits from public and as such, no
amount on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet. However opening
balance of unsecured loans from related party is lying with the
Company, which is subordinated to bank borrowings against cash credit
limit availed from Andhra Bank.
Receipt of any commission by MD / WTD from a Company or for receipt of
commission / remuneration from it Holding or subsidiary.
As there is no holding company or subsidiary of the Company, this part
isn't applicable.
Declaration of Independence
The Company has received declarations from all the Independent
Directors confirming that they meet the
criteria of independence as prescribed in Sub-Section (6) of Section
149 of of Companies Act, 2013, read with the Schedules and Rules issued
thereunder as well as Clause 49 of the Listing Agreement.
Code of Conduct for Directors and Senior Management
The Board has laid down a code of conduct for all Board members and
senior Management of the Com- pany. The Directors and members of Senior
Management have affirmed compliance with the Code of Conduct for
Directors and Senior Management of the Company.
Risk Management
The Risk Management is overseen by the Audit Committee of the Company
on a continuous basis. The Committee oversees Company's process and
policies for determining risk tolerance and review management's
measurement and comparison of overall risk tolerance to established
levels. Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuous
basis. Secretarial Audit Report In terms of Section 204 of the Act and
Rules made there under, M/s. VSS & Associates, Practicing Company
Secretary have been appointed as Secretarial Auditors of the Company.
The report of the Secretarial Audi- tors is enclosed as Annexure IV to
this report. The report is self-explanatory and do not call for any
further comments.
Corporate Social Responsibility (CSR) Policy
The Company doesn't fall under the ambit of Section 135 (1), hence,
Corporate Social Responsibility policy is not applicable to the
Company.
Audit Committee
During the year under review, 4 meetings of the Committee were held on,
May 28, 2014, August, 14, 2014, November, 12, 2014, February, 11, 2015
The composition of the Committee as on 31st March, 2015 as well as the
particulars of attendance at the Committee during the year are given in
the table below:
Name Category of No. of Meetings % of Total meetings
Directorship Attended attended during
the tenure as a
Director
Shri Dilip Patel Independent Director
/ Chairman 4 100
Shr Syed Hussain Independent Director 4 100
Shri K K Jain Executive Director 4 100
The Committee's composition meets with requirements of Section 177 of
the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members
of the Audit Committee possess financial / accounting expertise.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Committees. The manner in which
the evaluation has been carried out has been explained in the Corporate
Governance Report.
Details pertaining to remuneration as required under section 197(12) of
the Companies Act, 2013 read with rule 5(1) of the companies
(appointment and Remuneration of managerial personnel) rules, 2014.
The percentage increase in remuneration of each Director, Chief
Financial Officer and Company Secretary during the financial year
2014-15, ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year
2014-15 and the comparison of remuneration of each Key Managerial
Personnel (KMP) against the performance of the Company are as under:
Sr. Name of Director/KMP Remuneration % increase in
No and Designation of Director/KMP Remuneration
for financial in the
year 2014-15 Financial Year
Lakhs 2014-15
1 Ghanshyam Jaju, Chairman Nil Nil
2 Mukund Kakani, Managing Director 2.88 Nil
3 Kirti Kumar Jain, Executive Director 1.80 Nil
4 Mohit Jaju, Executive Director 1.80 Nil
5 Syed Hussain, Independent Director 0.50 25
6 Dilip Patel, Independent Director 0.50 25
7 Ramesh Babu Telugu, Independent
Director Nil- Nil-
8 Vimala Madon, Independent Director Nil- Nil-
7 Jeevan Innani, Company Secretary 0.60-- --
& Compliance Officer
Name of Director /KMP and Desgination Ratio of remuneration of
each Director/ to median
remuneration of employees
Ghanshyam Jaju, Chairman Not Applicable
Mukund Kakani, Managing Director 1.6: 1
Kirti Kumar Jain, Executive Director 1:1
Mohit Jaju, Executive Director 1:1
Syed Hussain, Independent Director 0.27:1
Dilip Patel, Independent Director 0.27:1
Ramesh Babu Telugu, Independent Director Not Applicable
Vimala Madon, Independent Director Not Applicable
Jeevan Innani, Company Secretary & Compliance Not Applicable
Officer
- Remuneration not paid as Mr. Ramesh Babu Telugu, Mrs. Vimala Madon
joined the Board w.e.f. 27th March, 2015.
-- Mr. Jeevan Innani has joined Since February, 2015.
- Sitting fees is also considered for calculation of remuneration for
the above purpose Percentage increase in the median remuneration of
employees in the financial year:
The median remuneration is Rs. 15000 and the percentage increase in the
median remuneration of employ- ees in the financial year is 28%.
Number of permanent employees on the rolls of company:
Number of employees on the rolls of the Company as on 31st March, 2015
was 101 Nos.
Explanation on the relationship between average increase in
remuneration and Company Perfor- mance:
The increase in average remuneration of all employees in the financial
year 2014-15 as compared to the financial year 2013-14 was 31%. The
average increase in median remuneration was in line with the perfor-
mance of the Company.
Comparison of the remuneration of the Key Managerial Personnel against
the performance of your Company:
Particulars Amount in Rupees
Remuneration of Key Managerial Personnel (KMP)
during financial year 2014-15 (aggregated) 7,08,000
Revenue from operations 548,462,587
Remuneration (as % of revenue) 0.12
Profit before tax (PBT) 47,338,402
Remuneration (as % of PBT) 1.49
The Key Parameters for any variable component of remuneration availed
by the Directors:
There is no variable component of remuneration to the Directors.
Variations in market capitalisation of the Company, price earnings
ratio as at the closing date of the current financial year and previous
financial year and percentage increase over decrease in the market
quotations of the shares of the Company in comparison to the rate at
which the Company came out with the last public offer:
Particulars Unit As at 31st March, As at 31st March, Variation
15 14
Closing rate of
share at BSE Rs. 53.40 10.38 414%
EPS Rs. 4.84 2.06 134%
Market Capita
lization Rs./lac 40,21,28,700 7,81,66,590 414%
Price Earnings
ratio Ratio 11 5 120%
Average percentile increase already made in the salaries of employees
other than the managerial personnel in the last financial year and its
comparison with the percentile increase in the managerial remuneration
and justification thereof and point out if there are any exceptional
circumstances for increase in the managerial remuneration:
The average increase in salaries of employees other than managerial
personnel in 2014-15 was 31%. Per- centage increase in the managerial
remuneration for the year was 36%.
The ratio of the remuneration of the highest paid director to that of
the employees who are not directors but receive remuneration in excess
of the highest paid director during the year:
Highest Paid Director: Mr. Mukund Kakani: Rs. 24000/- p.m.
Name of Employee Salary (Per Month) Ratio
E V S S Prakasam 60000 2.50
J.VJogaikar 40000 1.67
S.A.Tejankar 36000 1.49
A.D.Hake 36000 1.49
G.R.Deshpande 33500 1.38
Y. Sadashiva Rao 30000 1.25
D.A.Patil 29000 1.20
U.N.Torane 26000 1.07
Affirmation that the remuneration is as per the remuneration policy of
the Company:
It is hereby affirmed that the remuneration paid is as per the
Remuneration Policy for Directors, Key Managerial Personnel and other
Employees.
Details pertaining to remuneration as required under section 197(12) of
the Companies Act, 2013 read with rule 5(2) and 5(3) of the companies
(appointment and Remuneration of managerial person- nel) rules, 2014.
(a) Employed throughout the financial year and was in receipt of
remuneration for the year in aggregate of not less than Rs. 60,00,000:-
NIL
(b) Employed for a part of the financial year and was in receipt of
remuneration at a rate in aggregate not less than Rs. 5,00,000/- per
month:- NIL
(c) Employed throughout the financial year or part thereof, was in
receipt of remuneration in the year which, in the aggregate or at a
rate which in the aggregate was in excess of that drawn by the Whole-
time Director and holds by himself or along with his spouse and
dependent children, not less than 2% of the equity shares of the
Company:- NIL
Fraud Reporting
No cases of fraud have been reported to the Audit Committee / Board
during the financial year under review.
Statutory Auditors
Pursuant to the provisions of Section - 139 and other applicable
provisions, if any, of the Companies Act, 2013 and the Rules framed
there under, read with Schedule VI of the Act, as amended from time to
time, M/ s S. Daga & Co., Chartered Accountants, (Firm Registration No.
000669 S), be and is hereby re-appointed ( their appointment being
ratified ) as Statutory Auditors of the Company to hold office from the
conclusion of this Annual General Meeting till the conclusion of the
(29th) Annual General Meeting of the Company to be held in the year
2017 (subject to ratification of their re-appointment at every next
Annual General Meeting), at such remuneration as may be mutually agreed
upon between the Board of Directors and Statutory Auditors.
They have confirmed their eligibility to the effect that their
re-appointment, if made, would be within the prescribed limits under
the Act and that they are not disqualified for re-appointment.
Management Discussion and Analysis Report
The above report is annexed herewith as Annexure V Directors
Responsibility Statement
In accordance with the provisions of Section 134(3) (c) of the
Companies Act 2013, your directors confirm that:
a) In the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material depar-
tures.
b) The Company has selected such accounting policies and applied them
consistently and made judg- ments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2015 and of the profit /loss of the
Company for that period.
c) The Company has taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act 2013 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
d) The annual accounts have been prepared on going concern basis.
e) The directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
f) The Company has laid down internal financial controls to be followed
by the company and that such internal financial controls are adequate
and are operating effectively.
Acknowledgment
The Directors express their sincere appreciation to the employees,
valued shareholders, customers, bankers suppliers and government
authorities for their continued support.
For and on behalf of the Board of Directors
For Godavari Drugs Limited
Place : Secunderabad Ghanshyam Jaju Mukund Kakani
Date : 30.05.2015 (Chairman) (Managing Director)
DIN: 00104601 DIN: 00104646
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