Sandu Pharmaceuticals Ltd Directors Report.
TO THE MEMBERS,
The Directors have pleasure in presenting before you the THIRTY FORTH Annual Report of SANDU PHARMACEUTICALS LIMITED together with Audited Balance Sheet and Statement of Profit & Loss for the financial year ended 31st March, 2019.
1. FINANCIAL RESULTS:-
The Companys financial performance, for the year ended March 31, 2019 is summarized below:
|Revenue from Operations (Gross)||494246203||491599301|
|Profit before exceptional items and tax||10202864||7552269|
|Profit/Loss Before Tax||10176853||7552269|
|Less: Current Tax||3650000||1977645|
|Profit/(Loss) for the Period||6691153||5615479|
|Total Other Comprehensive Income (Net of Tax)||372880||1132360|
|Total Comprehensive Income for the period (Net of Tax)||7064033||6747839|
|Earnings per equity shares||0.94||0.79|
REVIEW OF OPERATIONS
In the financial year 2019-20, the company achieved an Income from operations of Rs 49,99,85,835 as compared to Rs. 49,28,17,103 in the previous year.
Profit before tax was Rs 1,01,76,853 for the year ending 31st March, 2019 as compared to Profit of Rs. 75,52,269 in the previous year.
Profit after tax was Rs 66,91,153 for the year ended 31st March, 2019 as compared to a Profit of Rs. 56,15,479 in the previous year.
There were no material changes and commitments affecting the financial position of the Company from the end of the financial year till the date of the Directors Report.
In order to utilize the funds for the Companys Long term prospects the Management has advised the Company to conserve the funds for long term projects, in the view of the same, they didnt recommend any dividend.
3. RISK MANAGEMENT:
The Board has laid down a clear Risk Management Policy to identify potential business risks and install effective mitigation processes to protect Companys assets and business Risks. Risk assessment and minimization plan are reviewed by the Board on a periodic basis. Risk Management Policy and the details of this policy are available on the website of the Company under the web link http://www.sandu.in/Risk_ Managment_Policy.pdf
4. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has adequate Internal Financial Control Systems, commensurate with the size, scale and complexity of its operations. The Management evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company on an ongoing basis.
5. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Whistle Blower. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Whistleblower Policy approved and adopted by the Board of Directors which can be accessed in our website http://www.sandu.in/vigil_ mechanism_policy.pdf
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-
Shri. Shashank B Sandu holding DIN:00678098 (Non Executive Director) retires by rotation and, being eligible, offer himself for re appointment.
Shri Bhaskar G Sandu holding (DIN:02816792) has resigned from the Board of Directorship and Chairmanship of the Company inorder to comply with the regulation 17 of SEBI (Listing obligation and Disclosure requirement) regulation 2018 w.e.f 25th March 2019.
Shri Bhaskar B Sandu is the promoter of the company having vast knowledge, experience and expertise, on recommendation of Nomination and Remuneration Committee Board has appointed Shri Bhaskar G Sandu as the Additional Director at the Board Meeting held on 13th August 2019 subjected to approval of shareholder in the annual general Meeting pursuant to SEBI(Listing Obligation and Disclosure Requirement) Regulation 2015.
All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
6.1 BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been given in the Corporate Governance Report. The Weblink of familiarization Programme undertaken for Independent Director is also available on http:// www.sandu.in/Familarisation_Programme_of_ the_Independent_Directors.pdf .
The Nomination and Remuneration Committee has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors. The criteria for Board Evaluation include inter alia, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.
Criteria for evaluation of individual Directors include aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director/Executive Director.
Criteria for evaluation of the Committees of the Board include degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
6.2 NOMINATION AND REMUNERATION POLICY
The policy of the Company on Directors Appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matter, as required under sub section (3) of section 178 of the Companies Act, 2013 is available on our website http://www.sandu.in/ Nomination_and_Remuneration_Policy_new.pdf.
There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the company.
During the year 7(Seven) Board Meetings and 6(Six) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act 2013.
6.4 AUDIT COMMITTEE
The details of the composition of the Audit Committee are given in the corporate Governance Report. During the year all the recommendations of the Audit Committee were accepted by the Board.
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website www.sandu. in.The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
In addition to its Code of Conduct and Ethics, key policies that have been adopted by the Company are as follows:
|Name of the Policy||Brief Description||Web link|
|Whistleblower Policy||The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected frauds, or violation of the Companys code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during the fiscal 2016||http://www.sandu.in/ Whistle_Blower__Policy_ new.pdf|
|Nomination and Remuneration Policy||This policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of a director (executive/ non executive) and also the criteria for determining the remuneration of the directors, key managerial personnel and other employees.||http://www.sandu. in/Nomination_and_ Remuneration_Policy_new. pdf|
|Related Party Transaction Policy||The policy regulates all transactions between the company and its related parties||http://www.sandu.in/ Related_Party_Transaction_ Policy-new.pdf|
|Insider Trading Policy||The Policy provides framework in dealing with securities of the Company||http://www.sandu.in/ Insider_Trading_Policy_ new.pdf|
|Policy for determining Materiality of event or Information||This Policy for Determination of Materiality of Events or Information is aimed at providing guidelines to the management of Sandu Pharmaceuticals Limited, to determine the materiality of events or information, which could affect investment decisions and ensure timely and adequate dissemination of information to the Stock Exchange(s) (as hereinafter defined).||http://www.sandu.in/ Insider_Trading_Policy_ new.pdf|
|Archival Policy||The Policy deals archival of corporate records of Sandu Pharmaceuticals Limited||http://www.sandu.in/ Archival__Policy.pdf|
|Board Diversity Policy||This policy aims to set out the approach to achieve diversity on the Board of Directors ("Board") of Sandu Pharmaceuticals Limited||http://www.sandu.in/ Policy_on_Board_Diversity_ new.pdf|
|Risk Management Policy||The Risk management policy of Sandu Pharmaceuticals Limited will enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities.||http://www.sandu.in/ Risk_Managment_Policy_ new.pdf|
7. DIRECTORS RESPONSIBILITY STATEMENT:-
In accordance with the provisions of section 134(3) (c) read with section 134(5) of the Companies Act 2013, your Directors confirm that:
a) In the preparation of annual accounts, for the year ended 31st March, 2019, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.
b) Appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2019 and of the profit of the Company for the year ended on that date.
c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d) The annual accounts have been prepared on a going concern basis.
e) Internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and are operating effectively and
f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
8. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.
9. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVE
The Company has not transferred any amount to reserve and hence it is NIL.
10. RELATED PARTY TRANSACTIONS:
The related party contracts entered into your Company does not fall under the ambit of Section 188(1) of the Act.
All the related party transactions entered during the financial year were at arms length and in the ordinary course of business. In compliance with the provisions of the Companies Act 2013 and Regulation 23(2) of the SEBI Regulation 2015, all related party transactions had been placed before the Audit Committee for prior approval. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 information pertaining to related parties are given in Form AOC-2 as Annexure I of this Report.
11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant material orders passed by the Regulators/Courts which could impact the going concern status of the Company and its future operations.
12.1 STATUTORY AUDITORS
M/s Dileep and Prithvi, Statutory Auditor of the Company retires at the conclusion of the ensuing Annual General Meeting and has offered themselves to be reappointed as Statutory Auditor of the Company for the Financial Year 2019-20 and 2020-21 as recommended by Members of Audit Committee and Board of Directors. They have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for appointment
12.2 SECRETARIAL AUDITOR:
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Shri. Swapnil Dixit, Company Secretary in practice to undertake the Secretarial Audit of the Company for the Financial Year 2018-19. The Secretarial Audit report for the financial year 2018-19 is annexed herewith as "ANNEXURE B".
13. INTERNAL COMPLAINTS COMMITTEE
As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has constituted an Internal Complaints Committee for Redressal of complaints against sexual harassment and there were no complaints received during the financial year.
14. DISCLOSURE REQUIREMENTS
Your Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Management Discussion and Analysis is annexed as "ANNEXURE A" to the report
Secretarial Audit Report as "ANNEXURE B".
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges, a separate section on the corporate governance is annexed as "Annexure - C"
Auditors Certificate on Corporate Governance "Annexure -D"
Certificate from Chief Financial Officer under Reg 17(8) of SEBI (LODR) Regulation "Annexure -E",
Declaration from Managing Director "Annexure F"
Certificate of non qualification of Director "Annexure G"
15. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION- FOREIGN EXCHANGE EARNINGS AND OUTGO.
A) CONSERVATION OF ENERGY:
a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.
d) The required data with regard to conservation of energy as applicable to our company is furnished below:
|Particulars||For the year ended 31.03.2019||For the year ended 31.03.2018|
| Purchased (units)||356422||235,996 Units|
| Total Amount Rs||1792622||Rs. 1,769,117|
| Rate/Units in Rs||5.03||Rs. 7.50 unit|
|2. Fuel Consumed|
|Furnace Oil||67420||56,760 Kgs|
| Total amount-|
|Furnace Oil||2438216.80||Rs. 1,632,799|
| Rate per Ltr-|
|Furnace Oil||36.16||Rs. 28.77|
B) TECHNOLOGY ABSORPTION:
Companys products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.
C) FOREIGN EXCHANGE EARNINGS AND OUT-GO:
During the period under review there was no foreign exchange earnings or out flow.
16. EXTRACT OF ANNUAL RETURN
As provided under section 92 (3) of the Act, the extract of the Annual Return in form MGT- 9 is annexed herewith as "Annexure H" which forms part of this report.
17. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
The information required under section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors is annexed as "Annexure - H" to this report.
18. FIXED DEPOSITS:-
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014 during the financial year 2018-19.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:-
The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the Investments made by the Company are given in the notes to the financial statements.
20. PARTICULARS OF CONTRACT OR ARRANGMENTS WITH RELATED PARTY
During the year under review, the Company had not entered into any contract / arrangement / transaction with the related parties which could be considered as material as per SEBI (LODR) Regulations 2015.
21. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code of Conduct for Directors has been posted on http:// www.sandu.in/Code_of_Conduct_for_Directors- new.pdf and for Senior Management Personnel http://www.sandu.in/Code_of_Conduct_for_ Senior_Managment-new.pdf.
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.
All the designated employees and personnel have confirmed compliance with the Code. The Declaration signed by the Managing Director pursuant to Regulation 26(3) read with Schedule V (Part D) of the SEBI (LODR) Regulation 2015 is published in this report.
22. P REVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prohibition of Insider Trading with a view to regulate trading in securities by the Directors and Designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All Board of Directors and the designated employees have confirmed compliance with the Code. Code of Conduct for Prohibition of Insider Trading is available on website of the Company under the web link www.sandu.in
23. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office ofthe company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.
24. AUDITORS REPORT AND SECRETARIAL AUDIT REPORT
The Secretarial Audit Report doesnot contain any qualification, reservation or adverse remarks,whereas the Auditors Report was subjected to qualification below mentioned.
The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Service tax, Sales Tax, Custom Duty, Excide Duty, Goods and Service Tax and other material statutory dues, as applicable. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of undisputed statutory dues which remained outstanding as at 31st March 2019, for a period of more than six months from the date they became payable, except dues of Tax Deducted at source aggregating to Rs.4,52,6,12 (P.Y. Rs. 4,50,746/-) on account of defaults pertains to prior years
25. EXPLANATION TO AUDITORS REMARK AS PER ANNEXURE OF INDEPENDENT AUDIT REOPRT.
According to the Management, out of the reported tax liability a major portion will not be due and payable as per rectification of the same is in process.
Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.
|For and on behalf of Board of Directors|
|of Sandu Pharmaceuticals Limited|
|Umesh Sandu||Shashank Sandu|