BDH Industries Director Discussions


To,

The Members,

BDH Industries Limited

Your Directors have pleasure in presenting 33rdAnnual Report and Audited Financial Statements for the year ended 31st March, 2023.

FINANCIAL RESULTS:

The financial performance of the Company is summarized below:-

(Rs. in Lakhs )

Particulars

2022-23 2021-22

Sales (Net)

7445.71 6939.40

Other Income

84.10 88.19

Total Income

7529.81 7027.59

Profit before Interest and Depreciation & Exceptional item

1179.41 996.21

Less : Interest

15.79 22.53

Depreciation

56.85 63.27

Profit before tax and Exceptional item

1106.77 910.41

Add: Exceptional item - Profit on sale of Shed

- 44.97

Profit before Tax

1106.77 955.38

Less : Provision for Taxation

286.98 233.12

Deferred Taxation

(0.69) (0.05)

Net Profit After Tax

820.48 722.31

The standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016.

REVIEW OF OPERATIONS :

During the year 2022-23 Company achieved Sales (Net) of Rs. 7445.71 Lakhs as compared to Rs. 6939.40 Lakhs in the previous year registering growth of 7%. The Operating Profit of the Company i.e. Profit before Interest and Depreciation has increased from Rs. 996.21 Lakhs in previous year to Rs.1179.41 Lakhs in 2022-23. The Company earned Net Profit after Tax of Rs. 820.48 Lakhs during the year as against Rs. 722.31 Lakhs(includes profit on sale of Shed Rs. 44.97 lakhs) as in previous year. An amount of Rs. 123.07 Lakhs is transferred to the General Reserve from the net profit of the financial year 2022-23.

DIVIDEND:

Your Directors are pleased to recommend dividend of Rs. 4.00/- per equity share of face value Rs. 10/- each (previous year Rs. 3.60/- per share) for the financial year ended on 31st March, 2023. The dividend on Equity Shares is subject to the approval of the shareholders at the 33rdAnnual General Meeting. The total cash outflow on account of dividend payment will be Rs.230.29 lakhs.

MATERIAL CHANGES & COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:

No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relate and the date of the report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

The Company continues to operate in one segment i.e. pharmaceuticals and there is no change in the nature of business of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors has six members. Ms. Jayashree Nair is the Chairperson and Managing Director of the Company. Mr. S.C. Kachhara is the Joint Managing Director and Chief Financial Officer of the Company. There are three independent directors on the Board of the Company, Dr. Dinesh Variar, Mr. Bhagirath Singh and Mr. Kairav Trivedi. There is one Non-Executive Director on the Board of the Company-Ms. Karthika Nair, who retires by rotation at the forthcoming Annual General Meeting, being eligible and offers herself for re-appointment. Accordingly, the Board recommends her re-appointment.Ms. Jayashree Nair, Managing Director, Mr. S.C. Kachhara, Joint Managing Director and Chief Financial Officer and Ms. Nikita Phatak, Company Secretary of the Company are the Key Managerial Personnel of the Company. During the year five Board meetings were held, details of which are given in the Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS:

The Independent Directors of the Company-Dr. Dinesh Variar, Mr. Bhagirath Singh and Mr. Kairav Trivedi have submitted declaration complying with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013. They have registered their names in the Independent Directors data base. Based on the disclosures provided by them, none of them are disqualified from being appointed as Director under section 164 of the Act and are independent from the Management.

CONFIRMATION ON INDEPENDENCE OF INDEPENDENT DIRECTORS:

The Board of Directors confirms that the independent directors of the Company fulfill the conditions specified in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and are independent of the management of the company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors state that :-

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(b) The Directors have selected such accounting policies and applied them consistently and made judgments 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 2023 and of the Profit of the Company for the year ended 31st March 2023.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis and

(e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE:

The Company has complied with the requirements of Corporate Governance. A report on Corporate Governance together with a certificate from Statutory Auditor forms part of this Annual Report. A declaration from Managing Director under regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is also attached to this report.

LISTING WITH STOCK EXCHANGE:

The equity shares of the Company are listed on BSE (Bombay Stock Exchange). The listing fee for year 2023-2024 has been paid by the Company.

NOMINATION AND REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of the Nomination and Remuneration Policy are covered in the Corporate Governance Report. The said policy is hosted on the Companys website at www.bdhind.com.

RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Policy to identify and categorize various risks, implement measures to minimize impact of these risks and a process to monitor them on regular basis.

RELATED PARTY TRANSACTIONS:

There were no materially significant related party transactions during the year that have potential conflict with the interests of the Company. The transactions with related parties are disclosed in the notes to the financial statements. Form AOC-2 prescribed under the Companies Act 2013 and Companies (Accounts) Rules, 2014 is furnished as Annexure V to this report. The Policy on Related Party Transactions is also hosted on the website of the Company www.bdhind.com.

VIGIL MECHANISM:

The Company has established a Vigil Mechanism i.e. Whistle Blower Policy to enable the Directors and employees to report to the Audit Committee genuine concerns, unethical behavior and irregularities, if noticed by them, in the Company which could adversely affect Companys operations. The Whistle Blower Policy is also hosted on the website of the Company www.bdhind.com. During the year no concerns or irregularities have been reported by the employees or directors.

FORMAL ANNUAL EVALUATION:

As required under the Schedule IV of the Companies Act 2013 and Regulation 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on 9th February 2023 evaluated the performance of the non-independent directors and the Board as a whole. They also reviewed the performance of the Chairperson of the Company, taking into account the views of the Joint Managing Director and also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonable perform their duties.

The Board assessed the performance of the independent directors as per the criteria laid down and have recommended their continuation on the Board. The Board of Directors assessed the performance of individual directors on the Board based on parameters such as relevant experience and skills, focus on shareholder value creation, governance standards, knowledge of business, processes and procedures followed, integrity, relationship with Management, impact on key management decisions etc.

INTERNAL FINANCIAL CONTROLS :

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 design or operations were observed.

FIXED DEPOSIT :

The Company has not invited/accepted any deposits during the year under review as envisaged under sections 73, 74 and 76 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not made any loans to any third party as envisaged under section 186 of the Companies Act 2013. The Company has not given any guarantee other than bank guarantee in the normal course of business to meet the contractual obligations. The Board of Directors has authorized the Company to invest the surplus in deposits with Banks.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

During the year under review, there have been no significant and material orders passed by any regulators/courts/tribunals that could impact the going concern status and the Companys operations in future.

CONSERVATION OF ENERGY AND TECHNOLOGY UPGRADATION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 particulars of energy conservation, technology absorption and foreign exchange earnings and outgo are appended hereto as Annexure IV and forms part of the Annual Report.

INSURANCE :

The properties and assets of your Company are adequately insured.

INDUSTRIAL RELATIONS :

The Company has maintained cordial and harmonious relations with all its employees.

RESEARCH & DEVELOPMENT CENTRE:

R&D Centre of the Company is recognized and registered with Department of Science and Industrial Research (DSIR), Ministry of Science & Technology, Government of India. Research & Development being useful for the sustained growth of the Company, investments in R&D are carried out to keep pace with changing domestic and global scenario. With qualified and experienced research team, the Company has focused its thrust on development of new dosage forms and drug delivery systems, improvement in processes and yield and cost reduction.

ENVIRONMENT, HEALTH & SAFETY:

The Company is committed to environment protection and industrial safety. Our manufacturing facility has been accredited with WHO-GMP and complies with applicable environment regulations of Maharashtra Pollution Control Board. Our manufacturing facility is accredited with ISO 9001:2015 certification from SGS United Kingdom Limited. The Company conducts periodically medical check-up programs, first aid and fire safety sessions for employees.

PROJECTS:

a. The Company has entered into power generation business and installation of two units of wind turbines 0.8 MW each has been completed at Jaisalmer district, Rajasthan. Since Power Purchase Agreement (PPA) is not yet signed by State Government of Rajasthan alternate commercial proposals are being evaluated.

b. The Company has also entered into agro products business. The plantation of cashew, mango and coconut grafts has been completed.The Company has leased the warehouse at MIDC Kudal.

CORPORATE SOCIAL RESPONSIBILITY :

The Company is committed to good corporate citizenship. As a part of Corporate Social Responsibility, the Company has undertaken activities in the field of education. The CSR Policy of the Company is placed on the website of the Company www.bdhind.com. During the year the Company has supported educational projects undertaken by charitable trusts and sponsored a Research Project for translating lab-ideas into market ready products. Pursuant to the provisions of the Section 135(2) of the Companies Act 2013, the Report on CSR activities is enclosed as Annexure I of this report.

ANNUAL RETURN :

The Annual Return of the Company as on 31st March 2023 is placed on its website at https://bdhind.com/Form_MGT_7- 2022-23%20V.1.pdf

TRANSFER OF UNPAID/UNCLAIMED DIVIDEND AMOUNT AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to sections 124 and 125 of the Companies Act 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) dividends if not claimed for a consecutive period of 7 years from the date of transfer to unpaid dividend account of the Company are liable to be transferred to the Investor Education and Protection Fund. Further shares in respect of such dividend which have not been claimed for a period of 7 consecutive years are also liable to be transferred to the demat account of the IEPF Authority. As a proactive measure to safeguard the interest of the shareholders, the Company sends reminder to the shareholders to claim their dividends before transferring the same to IEPF Authority. Notices in this regard are also published in the newspapers, uploaded on BSE website and the details of unclaimed dividend of shareholders whose shares are liable to be transferred to the IEPF Authority are uploaded on the Companys website www.bdhind.com.

The unclaimed dividend & shares transferred to IEPF during the year 2022-23 are as follows:

Financial Year

Amount of unclaimed dividend transferred Number of shares transferred

2014-15

Rs. 8,75,787/- 7,625

The Company has also uploaded the details of abovementioned shares on the website of IEPF Authority www.iepf.gov.in. The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares. Members may note that the shares and unclaimed dividend transferred to IEPF Authority can be claimed by filing online application in prescribed form no. IEPF 5 available on www.iepf.gov.in and sending physical copy of same duly signed to the Company alongwith requisite documents. The Company Secretary is the nodal officer under the provisions of IEPF.

The unpaid/unclaimed dividend for the financial year 2015-16 onwards will be transferred to IEPF as given below :-

Financial Year

Date of Declaration

Due date for transfer to IEPF

2015-16

22/09/2016

28/10/2023

2016-17

27/09/2017

02/11/2024

2017-18

25/09/2018

31/10/2025

2018-19

18/09/2019

24/10/2026

2019-20

27/08/2020

30/09/2027

2020-21

25/08/2021

30/09/2028

2021-22

24/08/2022

20/09/2029

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in this Annual Report.

AUDITORS AND AUDITORS REPORT:

STATUTORY AUDIT:

M/s. CLB & Associates, Chartered Accountants (Firm Registration No. 124305W) are the Statutory Auditors of the Company for a period of 5 years till the conclusion of the Companys 37th Annual General Meeting. The Auditors Report read with the notes to accounts are self-explanatory. There are no qualifications, reservations or adverse remarks made by the Auditors.The Statutory Auditors have submitted No Disqualification Certificate for the financial year 2023-24 to the Board of Directors of the Company.

SECRETARIAL AUDIT:

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s JHR & Associates, Practicing Company Secretaries were appointed as the Secretarial Auditors for auditing secretarial records maintained by the Company for the financial year ended on 31st March 2023. The Secretarial Audit Report is annexed herewith to the Directors Report in Annexure II. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors.

COST AUDIT:

Pursuant to the provisions of section 148 of the Companies Act 2013 and Companies (Audit and Auditors) Rules 2014, M/s. Krishna & Associates, Cost Accountants (Firm Registration No. 100939) were appointed as cost auditors to conduct the audit of the cost records of the Company for the financial year 2022-23.The Cost Audit Report for financial year 2021-22 was filed with Ministry of Corporate Affairs on 21st October 2022 within the prescribed time. The Cost Audit Report for the financial year 2022-23 shall be filed with Ministry of Corporate Affairs within the prescribed time.

RATIO OF REMUNERATION:

As required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the required details for FY 2022-23 are given below:-

Name of Director / Key Managerial Personnel and Designation

Ratio to Median Remuneration % increase in remuneration/(decrease) in remuneration

Ms. Jayashree Nair, Chairperson & Managing Director

38:1 11%

Mr. S.C. Kachhara, Joint Managing Director & CFO

38:1 11%

Ms. Karthika Nair, Non-Executive Director

0.28:1 -

Dr. Dinesh Variar, Independent Director

0.45:1 -

Mr. Bhagirath Singh, Independent Director

0.48:1 -

Mr. Kairav Trivedi, Independent Director

0.48:1 -

Ms. Nikita Phatak, Company Secretary

4.76:1 16%

a. The percentage increase in median remuneration of employees of the Company is 7.51%.

b. There are 116 permanent employees on the rolls of the Company.

c. The average percentile increase in salaries of employees other than managerial personnel is 10.45% whereas percentile increase in managerial remuneration is 10.61%.

d. We affirm that the remuneration paid is as per Remuneration Policy of the Company.

GENERAL:

The Company has an internal complaints committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 for prevention and redressal of complaints of sexual harassment at workplace. The Company has not received any complaint during the year ended 31st March 2023 pursuant to the said Act.

APPRECIATION :

Your Directors thank statutory authorities and bankers for co-operation extended by them to the Company. Your Directors place on record their sincere appreciation of the continued support by the employees and finally thank the shareholders for the trust placed by them with the Company.

FOR AND ON BEHALF OF THE BOARD

Jayashree Nair

Mumbai, 17th May 2023

Chairperson & Managing Director

Registered Office :

Nair Baug, Akurli Road,

Kandivli (East), Mumbai 400101

Tel. No. :022-61551234

• Email - investors@bdhind.com

Website :www.bdhind.com

• CIN L24100MH1990PLC059299.