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Fredun Pharmaceuticals Limited
Your Directors are pleased to present the 30th Annual Report of your Company with the Audited Accounts for the year ended March 31,2017
FINANCIAL PERFORMANCE AND FUTURE PROSPECTS
|(Rs. in lacks)|
|March 31st 2017||March 31s* 2016|
|Profit/Loss before Interest & Depreciation||526.05||476.62|
|Depreciation / Amortization||113.58||80.43|
|Profit/Loss before taxes||224.99||190.25|
|Exceptional Income /Expenses||-||(6.33)|
|Prior Period adjustments||2.39||(.42)|
|Profit/Loss before Taxes||222.59||183.50|
|Profit/Loss after tax.||142.74||106.95|
Your Company posted a total income of Rs. 5861.00 lacks compared to the income of Rs. 4318.32 lacks for the previous year and the net profit of Rs. 142.74 lacks compared to the net profit of Rs 106.95 lacks for the previous year.
The turnover of the Company has increased as compared to the previous year on account of increase in business activities and addition of high speed tableting machines and blister packing machines.
Your Directors are taking aggressive steps to increase the infrastructure of the manufacturing unit at Palghar. This will not only substantially increase the existing manufacturing capacity but will also add to two different departments to manufacture ointments creams, gels and pellets of different APIs. This "Business Assessment" will define the scale of success in the near future. The focus of the Management is on satisfying the changing needs and wants of the customers.
The Board of Directors have recommended a Dividend of 6 % on the ordinary equity shares of the Company payable to those shareholders of the Company whose names appear in the Register of Members as on the Book Closure date.
The growth impetus helps the business. The cash flow generated by your Company is deployed in creating infrastructure to enhance the production capacity and give confidence to the organization. The learning opportunities for individuals and educating the team to solve operational issues is considered a most important factor. In review meetings the information regarding the decisions the line managers have taken in a defined period are properly discussed.
With proper vision, mission and value statements, the alignment of business is validated and any disconnects are rectified and connected. It is of crucial importance that the change is implemented within a short time to have dynamic changes in the Business Activities. According to a German - American psychologist Mr. Kurt Lewin the change in the behaviour pattern of the employees is referred to as the" move stage" because it causes a ripple effect within an organization. It can be summarised as below:
Your Directors are confident that by following this Change Process, the management will succeed in convincing the staff of this need, openness, transparency and honesty leading to all round improvement in the business.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
The Company is continuously complying with the Pollution Control Regulations in the state of Maharashtra.
Unlike other industries where R & D investment is a small portion of the total sales, it approaches about 20% in the pharma industry and hence the industry has to pay an enormous sum for a new drug patent. To make such innovator products available to the poor, generic drugs are allowed to be manufactured and marketed where the innovators patent is not applicable. Your Company has set up a complete R & D Department to develop such new formulations with proper process and analytical method validations. A consistent attempt is made to improve the existing manufacturing processes and economise the cost of production. Your Company has been successful in exporting recently patented costly molecules as their generic versions. Since the opportunities are huge, Your Company is in the process of registering such more pharmaceutical products and increase the exports. Companies with vision, values and focus will only succeed and hence the management has decided to spend more on R&D with strong commitment and will to achieve this goal.
The Company also conducts In-House Energy Audit at regular intervals with proper monitoring and maintenance of all the machines.
FOREIGN EXCHANGE EARNINS AND OUTGO:
Foreign Exchange Earnings: Export of Goods-Rs. 3,283.73 Foreign Exchange Outgo: - Rs. 703.27
Details of the Depository System are given in the section Additional Information which forms a part of the Corporate Governance Report and is attached with the Annual Accounts.
BOARD MEETINGS AND COMMITTEE MEETINGS.
1. Ten (10) Board meetings were held during the year. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
2. Four (4) Audit Committee Meetings were held during the year. The details of the Audit Committee Meetings and the attendance of the Directors are provided in the Corporate Governance Report.
3. One (1) Remuneration Committee was held during the year. The details of the Remuneration Committee Meeting and the attendance of the Directors are provided in the Corporate Governance Report.
As per the provisions of section 152 of The Companies Act 2013 Mr. Fredun Medhora retires by rotation and being eligible for appointment offers himself for re-appointment.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act, the Board of Directors has carried out an annual evaluation of its own performance. Board Committees and Individual Directors.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and structure effectiveness of Board process, participation in the long-term strategic planning, information, functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of Committee meetings, etc
The Board reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and Committee Meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairperson was also evaluated on the key aspects of her role.
TRAINING AND HUMAN RESOURCE MANAGEMENT:
Morale of our professionals continued to be high. The Company continues to put concerted efforts in recruiting quality people. Development and training programs are undertaken regularly. The key focus is being given to areas like employees growth and satisfaction along with employees relations during the year. The relationship between management and employees continues to be one of mutual respect, appreciation and cordial.
The Auditors M/s. Savla & Associates Mumbai Chartered Accountants (ICAI Registration No: 109361W) were appointed as the Statutory Auditors at the Annual General Meeting held on 27th September 2016 for a period of 2 years i.e. upto the conclusion of the 31 st Annual General Meeting that will be held in the year 2018 subject to the ratification by the members at every Annual General Meeting.
The Company has received a confirmation from M/S. Savla & Associates to the effect that their appointment, if made, will comply with the eligibility criteria in terms of Section 141 (3) of The Companies Act, 2013.
In terms of Section 204 of the Act and Rules made thereunder, Mr. Rajendra Vaze of M/s. Rajendra And Co. Practising Company Secretaries, have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is annexed as Annexure I to this Report. The report is self-explanatory and does not call for any further comments.
DETAILS OF SIGNIFICANT MATERIAL ORDERS
No significant and material orders were passed by the Regulatory Authorities or the Courts or Tribunals that may have an impact on the going concern status and Companys Operations in foreseeable future.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in Form MGT 9 is annexed as Annexure II to this Report
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, and Secretarial Auditors and External consultant(s) and the reviews performed by Management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the Financial Year 2016-17
Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) they 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 at the end of the Financial Year and of the profit of the Company for that period;
(c) they 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) they have prepared the annual accounts on a "going concern basis";
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
During the year, the Company has not given any new loans or made any investments and has not provided any Guarantees except those which are already mentioned in the audited accounts of the Company.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. The details of the transactions with related parties are provided in the accompanying financial statements.
There were no materially significant related party transactions made by the Company during the year that would have required members approval under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements), 2015. The policy on materiality of related party transactions and dealing with related party transactions is approved by the Board.
VIGIL MECHANISM/ WHISTLEBLOWER POLICY
The Company has adopted a Whistleblower Policy, to provide a formal mechanism to the Directors, employees and its stakeholders to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee
MANAGEMENT DISCUSSION AND ANALYSIS AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE
Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements), 2015 the Management Discussion and Analysis and the Corporate Governance Report, as required under Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements), 2015 is presented in a separate section forming part of the Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each of the Independent Directors, under Section 149 (7) of The Companies Act, 2013 and that he/she meets the criteria of Independence laid down in Section 149(6) of The Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirement) Regulation 2015.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION , PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of women at Workplace (Prevention, prohibition and Redressal) Act, 2013.
All employees (permanent, contractual, temporary, trainees are covered under this policy. No complaints pertaining to sexual harassment were received during F.Y 2016-17.
The Company would like to acknowledge all its stakeholders, Induslnd Bank and Shamrao Vithal Co-operative Bank, customers, key partners for their support and all its employees for their dedication and hard work.
The Directors appreciate the continued guidance received from various Regulatory Authorities including RBI, SEBI, Ministry of Corporate Affairs, The Registrar of Companies, The Bombay Stock Exchange, Income Tax and Sales Tax and Service Tax Authorities etc.
On Behalf of the Board of Directors
Dr. (Mrs) D. N. Medhora Chairperson
Place: Mumbai Date : 30th May2017.