DIRECTORS
To,
The Members,
The Directors of your Company have pleasure in presenting their Eighth Annual
Report together with the Audited Balance Sheet as on 31st March 2014, the
related Statement of Profit and Loss for the year ended on that date and the Auditors
Report thereon.
FINANCIAL RESULTS:-
This fiscal has been an exciting year in terms of growth and profitability. To build
further on the success achieved by the company we have embarked on increased investments
in all aspects. We are confident that these spends will enable us to maintain our growth
trajectory into the future.
The Financial Highlights are given below:-
Figures in (Rs.Lacs)
|
2013-2014 |
2012-2013 |
| Sales and Other Income |
42892.42 |
52546.43 |
| Earnings Before Interest, Taxes, Depreciation and Amortization |
6474.52 |
6563.78 |
| Less: Depreciation |
2044.21 |
2022.15 |
| Earnings Before Interest and Tax |
4430.31 |
4541.63 |
| Less: Finance Charges |
4301.44 |
4264.50 |
| Profit Before Tax |
146.67 |
4767.76 |
| Prior Period Expenses |
17.80 |
4.43 |
| Exceptional Item |
0 |
4486.20 |
| Less: Provision for Taxation |
|
|
| Current Tax |
25.78 |
55.64 |
| Deferred Tax |
61.52 |
222.17 |
| Add: MAT U/S 115JB |
25.78 |
55.64 |
| Net Profit after Tax as carried to Balance Sheet |
67.35 |
54.96 |
| Basic & Diluted Earnings Per Share |
0.46 |
0.40 |
|
0.19 |
0.37 |
YEAR IN RETROSPECT:-
• The Company’s Sales decreased from Rs. 52,546.43 Lacs in the previous year
to Rs. 42,892.42 Lacs in the current year.
• EBITDA decreased from Rs. 6563.78 Lacs in the previous year to Rs. 6474.52 Lacs
in the current year.
• Net Profit After Tax increaded from Rs. 54.96 Lacs in the previous year to Rs.
67.35 Lacs in the current year.
• Debt equity ratio is 0.92 in current year as compare to previous year 1.07.
• Current Ratio is 1.02 in current year as compare to previous year 1.86.
BUSINESS OUTLOOK:-
Dr. Datsons Labs Ltd, we believe that nothing toughens like the tough times. 2013-14
was a tough year as input cost continued to rise and key segments faced competitive
pressures.
The rupee devaluation on account of fiscal challenges in the country resulted in
further pushing up the costs. Delay in financial commitments led to deferred timelines and
low capacity build-up.
We have undertaken steps to raise equity through sale of Stake so that the company gets
in required funding for its Working Capital & Capex Program. We are looking for long
term investors who can take forward the legacy of the company
We chose not to stop, but to carry on; not be withered but to persist. Rough seas make
better sailors.
At Dr. Datsons we continued to wade through multiple challenges diligently, patiently
and persistently. Our investments made over the years into an integrated business model
also stemmed the decline.
In wake of growing competition and increased inflation, cost control emerged as the
biggest challenge during 2013-14. We focused on critically analyzing each process and
product to clearly identify avoidable elements in the cost structures. This enabled us to
improve efficiency, process time and capacity utilization without any compromise on the
end product/process quality. We continued to add new clients across all our divisions. We
utilized the blend of our competitive cost structures with our global standards in R&D
and synthetic chemistry skills to partner large pharma companies for long-term product
development. Presently, we have forged four long-term partnerships for our products and
derive 37 per cent of our total revenues from these partnerships.
RESEARCH & DEVELOPMENT:-
A large investment in R&D could dent the bottom line especially when it does not
create fresh revenues.
Risk mitigation
The Company created a strong R&D team dedicated to creating new products. The
Company filed for more than 20 patents across different countries. Through R&D, the
Company pioneered various oral lozenges in India. The Company’s R&D centre has
been recognised by DSIR. Government of India
ENVIRONMENT & SAFETY OUTLOOK:-
Dr. Datsons aggressively pursues safety, health and environment protection as an
integral part of its business. The Company strives to minimise the adverse impact of its
activities and products on the environment and maintain a safe work place for its team
members.
The Company maintains a lawn and garden (shrubs and decorative plants) at its
manufacturing units. More than 800 trees were planted over the five years leading to
2012-13.
• Safety and health: Dr.Datsons strives to maintain the highest safety and health
standards. The Company received the ISO 14001 (for environment management) and OHSAS
18001:1999 (for safety and health) certifications, vindicating its endeavour of
maintaining operating practices in line with international benchmarks; each team member is
adequately trained in maintaining these standards. The Company completed all its expansion
projects without a single accident. The Company constituted a six-member SHE committee.
• Training on safety: The Company ensures that every team member is capable of
handling emergency situations. It organises regular classroom and practical training from
government approved agencies.
• Evacuation plan: The Company’s safety programs are based on emergency
evacuation plans. The team is kept informed about the updated documents and displays and
the facilities are well indicated with assembly points.
• Fire equipment: The Company’s facilities are equipped with sophisticated
fire fighting infrastructure. It conducts three mock drills at its facilities annually.
Critical areas like general warehouses and finished goods warehouses have smoke sensors
with multiple alarms systems.
• Environment: The Company is committed to comply with all applicable legal
requirements through continual improvement in operational process for improving its
environment measures. The Company does not generate any harmful/chemical wastes; it has a
full-fledged effluent treatment plant for processing plant waste. The waste water is
recycled for gardening purposes within the complex. All operating practices are based on
the principle of efficient utilisation of material and energy .The Company practices a
policy of substituting hazardous materials and recycling of resources to the maximum
extent possible.
DIVIDEND:-
In order to conserve the resources of the Company for any future expansion, your Board
deems fit not to recommend any dividend for the financial year 2013-2014.
FIXED DEPOSIT:-
The company has not accepted any fixed deposits during the year under reveiw.
MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:-
Management’s Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is
presented in a separate section forming part of the Annual Report.
SUBSIDIARY COMPANIES:-
As per general exemption granted vide Government of India, Ministry of Corporate
Affairs’ general circular no. 2/2011 dated 8th February, 2011, the Company has not
attached the annual accounts of its subsidiaries to this Annual Report. As required by the
said circular, the relevant information for each subsidiary has been disclosed in the
consolidated financial statements attached to this Annual Report.
The Company will make available the annual accounts of subsidiaries and the related
information to any Member of the Company who may be interested in obtaining the same. The
annual accounts of subsidiaries will also be kept for inspection by any Member of the
Company at the registered office of the Company. The Consolidated Financial Statements
presented by the Company include the financial information of its subsidiaries.
Further Statement under Section 212 of the Companies Act, 1956 is enclosed herewith.
DIRECTORS:-
During the year under review, Mr. Shashikant Shinde retires by rotation and being
eligible offers himself for reappointment at the forthcoming Annual General Meeting.
Further Mr. Balkrishna Parab and Dr. Ullooppee Badade resigned as Directors of the
Company w.e.f. 24th February 2014.
Further, Mr. Chandulal Shah who was nominated as the Chairman-Emeritus of the Company
stepped down as such w.e.f. 05th April 2014.
The Companies Act, 2013 (the Act) provides for appointment of independent directors.
Sub-section (10) of Section 149 of the Companies Act, 2013 (effective from April 1, 2014)
provides that independent directors shall hold office for a term of up to five consecutive
years on the Board of a company; and shall be eligible for reappointment on passing of
ordinary resolution by the shareholders of the company.
Sub-section (1) states that no independent director shall be eligible for more than two
consecutive terms of five years. Sub-section (13) states that the provisions of retirement
by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act shall not
apply to such independent directors.
The non-executive independent directors were appointed as directors liable to retire by
rotation under the provisions of the erstwhile Companies Act, 1956. The Board of Directors
has been advised that non executive (independent) directors so appointed would continue to
serve the term that was ascertained at the time of appointment as per the resolution
pursuant to which they were appointed. Therefore, it stands to reason that only those
non-executive (independent) directors who will complete their present term at the ensuing
AGM of the Company in September 2014, being eligible and seeking re-appointment, be
considered by the shareholders for re-appointment for a term of upto five consecutive
years.
Non-executive (independent) directors who do not complete their term at the ensuing
AGM, will continue to hold office till the expiry of their term (based on retirement
period calculation) and thereafter would be eligible for re-appointment for a fixed term
in accordance with the Companies Act, 2013.
Further, Mr. Giridhar Pulleti is appointed as an Independent Director of the Company
for a period of five years w.e.f. April 1, 2014 upto March 31, 2019.
COMPLIANCE OFFICER:-
Mr. Yogesh Patel, an Associate Member of the Institute of Company Secretaries of India
is the Company Secretary and Compliance Officer of the Company.
AUDITORS AND AUDITORS REPORT:-
M/s. Agarwal, Desai & Shah, Chartered Accountants, Auditors of the Company retires
at the conclusion of this Annual General Meeting and being eligible offers themselves for
reappointment.
Auditors Report:
Auditors Report as issued by M/s. Agarwal Desai & Shah, Chartered Accountants is
self explanatory and do not call for further clarification by the Board.
COST AUDITORS:-
Your Board has proposed the appointment of M/s. Aatish Dhatrak & Associates as Cost
Auditors of the Company for conducting Cost Audit for the financial year 2014-2015.
PERSONNEL:-
The Company considers human resources as its greatest asset and strength in the process
of development and progress. In terms of the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended by the Companies (Particulars of Employees) Rules, 2011, the names and other
particulars of the employees are set out in the Annexure-A to the Directors’ Report.
DISCLOSURE OF PARTICULARS:-
Information as per the Companies (Disclosure of Particulars on the report of the Board
of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption, Forex
Earnings & Outgo is provided in Annexure B forming part of this report.
DIRECTORS RESPONSIBILITY STATEMENT: -
Pursuant to the requirement under section 217(2AA) of the Companies Act with respect to
Directors Responsibility Statement, it is hereby confirmed.
a. That in preparation of the accounts for the finacial year ended 31st
March 2014 the applicable accounting standards have been followed along with proper
explanation relating to material departure.
b. That the Directors have selected such accounting policies and adopted them
consistently and made judgment and estimates that were reasonable and prudent so As to
give a true and fair view of the state of affairs of the Company for the year under the
review.
c. That the Directors have taken proper and sufficient care for maintenance of adequate
accounting records in accordance with the provision of the companies Act, 1956 for
safeguarding the assets and for preventing, detecting fraud and other irregularities.
d. That the Directors have prepared the accounts for the financial year ended 31st
March 2014 on a going concern basis.
CORPORATE GOVERNANCE:-
The Company is committed to maintain the highest standards of Corporate Governance and
adhere to the Corporate Governance requirements set out by SEBI. The Company has also
implemented several best Corporate Governance practices as generally prevalent.
The Report on Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
The requisite Certificate from the Statutory Auditor confirming compliance with the
conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached
to this Report.
LISTING:-
The shares of the Company are listed on the National Stock Exchange of India Limited
and Bombay Stock Exchange Limited. The Company has paid the annual listing fees to the NSE
and BSE for the year 2014-2015.
BOARD COMMITTEES:
In Compliance with both the mandatory and non-mandatory requirements under the Listing
Agreement and the applicable laws, the Board has maintained the following committees:
(i) Audit Committee
(ii) Shareholders/ Investor Grievance Committee
(iii) Remuneration & Nomination Committee
(iv) Investment Committee
(v) Corporate Governance Committee
(vi) Health, Safety, Environment & Corporate Social Responsibility Committee
FOREIGN CURRENCY CONVERTIBLE BONDS:
The Company came out with the issue of Foreign Currency Convertible Bonds [FCCBs]
aggregating to USD 40 million on 21st March 2013. However, the proceeds of the
issue were fully utilized for which issue was made as mentioned in the Offering Circular
dated March 21, 2013.
AUTHORISED CAPITAL:
During the year under review, the authorized share capital of the Company was increased
from Rs 50,00,00,000 (Rupees Fifty crores) to Rs. 110,00,00,000 (Rupees One Hundred Ten
crores) divided into 11,00,00,000 Equity Shares of Rs. 10/- each.
ALLOTMENT OF SHARES:-
During the year under review, the Company has allotted 3,94,84,717 equity shares
consequent to the conversion notice(s) received from the Bondholder for conversion of the
Foreign Currency Convertible Bonds ("FCCB") for total value of US$ 40.00
million at a conversion price of Rs. 55 per share, in accordance with the terms of the
Offering Circular dated March 21, 2013 for issue of US$ 40 million unsecured foreign
currency convertible bonds and the Supplemental Trust Deed dated February 21, 2014.
Consequently the paid up share capital of the Company has increased from Rs.
13,88,71,510 aggregating 1,38,87,151 equity shares of Rs. 10 each to Rs. 53,37,18,680
aggregating 5,33,71,868 equity shares of Rs. 10 each.
The Company has received approval from BSE Limited and the National Stock Exchange of
India Limited for listing and dealing of all the above Equity Shares of the Company.
ACKNOWLEDGMENT:-
Your Directors would like to express their appreciation for the assistance and
co-operation received from Bankers, Govt authorities, customers, and vendors during the
year.Your Directors also wish to place on record their deep sense of appreciation for the
committed services of Executives, Staff and workers of the company.
We are on the verge of storming both the domestic and international markets with our
innovative and specialty products and make a mark globally for the Company. We seek your
active cooperation for all our future endeavors to make your Company a leading
pharmaceutical Company.
For and on behalf of the Board
| Dr. KANNAN VISHWANATH |
PRABHAT GOYAL |
| MANAGING DIRECTOR |
DIRECTOR |
| Place: Taloja |
|
| Date: 14/08/2014 |
|
ANNEXURE – A to the Directors’ Report:
Statement of particulars of employees pursuant to the provisions of Section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975
forming part of the Directors Report for the year ended March 31, 2014.
| Sl. No. |
Name of the Employee |
Designation |
Remuneration |
Qualification and Experience |
Date of Commencement of Employment |
Age |
Last Employment held |
|
|
|
(in Rs ) |
|
|
|
|
| 1. |
Dr. Kannan Vishwanath |
Vice Chairman & Managing Director |
1,00,00,000/- |
Bachelors degree in chemical engineering, Masters in Business Administration and
having 15 yrs experience in pharmaceutical industry |
04/05/2010 |
38 |
- |
Annexure –B to the Directors Report:
Information as per the The Companies (Disclosure of Particulars on the report of the
Board of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption,
Forex Earnings & Outgo
A. Conservation of Energy:
i) Energy conservation measures taken-
- Monitoring closely high energy consuming equipments
- Optimum use of compressor thru shut down during low demand period
- Use of energy saving lighting arrangements.
ii) Additional investment/ proposals being implemented for reduction of consumption of
Energy – Exploring use of Solar AC.
iii) Impact of measures at (i) &(ii) for reduction of energy consumption and on
cost of production of goods. – Energy conserved and cost of production reduced..
iv) Total Energy consumption and Energy consumption per unit of production as per Form
A.
| a). Total Fuel & oil |
|
|
| consumed |
: |
18,163.51 Ltrs. |
| Expense |
: |
Rs .11,74,069/- |
| Average rate per Ltr. |
: |
Rs .64.64 |
| Coal used |
: |
3,028.10 MT |
| Expense |
: |
Rs .2,94,37,979/- |
| Average Rate per Kg. |
: |
Rs .9.72/Kg |
| b) Total power consumed |
: |
321972.60 units in kwh |
| Expense |
: |
Rs .3579780 |
| Average rate per unit |
: |
Rs .11.11/kwh |
B . Technology Absorption:-
Efforts made in technology absorption as per Form B
Research and Development:
1. Specific areas in which R & D carried out are in Anti-Cancer;Anti-Malarial and
Niche APIs. Other Areas include process monitoring and development work to improve
operating efficiencies.
2. The benefits derived are
• Opening up avenues for more business in future including export potential.
• Broadening of product range and opening new product lines for future growth of
business
• Technology upgradation
• Generation of know-why as well as know –howi
• Winning International awards
• Saving of Forex and development of ability to com pete Globally.
3. Future Plan of Action
Development of New products and Process
Creation of Intellectual Property and leveraging to increase the value of business
Upgradation and new variants of existing products
Technology Absorption, Adaptation and Innovation:
1. Efforts in brief made towards technology, absorption, adoption and innovation
• Using state of the art equipment,instrumentation and software.
• Deputation of Personnel for Training.
• Participation in symposium and exhibitions.
• Review of technical literature and patents in relevant technology areas
• Analysing feed back from users to improve process and services
• Use of alternate materials
2. Benefits derived are-
• Product quality performance in view of new business opportunities.
• Expansion of product range and export opportunity
• Product improvement
Cost reduction and reduced delivery time
Exposure to internatiuonal developments and opportunity to show case products
developed
Improvement in job knowledge and capability development for global acceptance
3. Information regarding Technology imported-Nil.
C. Forex:-
Activities relating to exports
The company endeavours to have a diversified range of products and there is a dedicated
cell for giving impetus to exports.The company regularly participates in prestigious
international exhibitions and conducts market surveys. Company has agents in over 60
countries to boost exports. Company is intensifying efforts in selected countries and
exploring new markets.
Foreign exchange Earnings & Outgo:
| Earning |
Rs. 9640.41 Lacs |
| Expenditure |
Rs. 52.82 Lacs |
Section 212
Statement pursuant to of the Companies Act, 1956
| Sr. No. |
Name of the Subsidiary |
EROS PHARMACHEM PTE. LIMITED |
AANJ PHARMALABS LIMITED FZE. |
DR. DATSONS LABS LIMITED (U.K.) |
FAIT SUCCESS (H.K.) LIMITED |
| 1 |
Financial Year Ended |
31/03/2014 |
31/03/2014 |
31/03/2014 |
31/03/2014 |
| 2 |
Date from which it became subsidiary company |
28/02/2012 |
21/01/2013 |
23/07/2013 |
11/4/2013 |
| 3 |
Shares of Subsidiary held as on 31st March, 2014 |
200000 |
1 |
100 |
1 |
|
Total Number of Share and Face Value |
200000 |
1 |
100 |
1 |
|
|
(Face Value- 1 SGD) |
(Face Value- 1 AED) |
(Face Value – 1 GBP) |
(Face Value– 0.12 USD) |
| b. |
Extent of holding |
100% |
100% |
100% |
100% |
| 4 |
Net aggregate amount of profit/(loss) of the subsidiary so far as it concerns the
members of Aanjaneya Lifecare Limited for current financial year |
|
|
|
|
| A |
Dealt with in the accounts of Aanjaneya Lifecare Ltd. |
NIL |
NIL |
NIL |
NI |
| B |
Not dealt with in the accounts of Dr. Datsons Labs Limited. |
NIL |
NIL |
NIL |
NIL |
| 5 |
Net aggregate amount of profit/(loss) of the subsidiary so far as it concerns the
members of Aanjaneya Lifecare Ltd. for the previous financial year |
|
|
|
|
| a |
Dealt with in the accounts of Aanjaneya Lifecare Ltd. |
NOT APPLICABLE |
NOT APPLICABLE |
NOT APPLICABLE |
NOT APPLICABLE |
| b |
Not dealt with in the accounts of Aanjaneya Lifecare Ltd. |
NOT APPLICABLE |
NOT APPLICABLE |
NOT APPLICABLE |
NOT APPLICABLE |
|
For and on behalf of the |
Board of Directors |
| Place: Taloja |
KANNAN VISHWANATH |
PRABHAT GOYAL |
| Date: 14/08/2014 |
MANAGING DIRECTOR |
DIRECTOR |
+91-9892691696
