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Ladies & Gentlemen,
Your Directors have pleasure in presenting their 76th Annual Report on the business and operations of the Company and the accounts for the financial year ended 31st March, 2015
BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/ STATE OF COMPANY'S AFFAIRS :
During the year under review, your Company achieved Net Sales of Rs.32086.28 Lacs and recorded a Gross Profit of Rs.3568.35 Lacs compared to previous year's Net Sales of Rs.28984.81 Lacs and Gross Profit of Rs.2951.79 Lacs registering a growth of 10.70 % and 20.89 % respectively over the last year.
As reported in the last year, your Company has successfully launched Alamin Liquid and Alamin RLD (L–Arginine Sachet).
During the current financial year, your Company plans to further strengthen Evict range by launching EVICT–XF.
The success of Derek & Breaze range has opened up the possibilities to venture in pre–probiotic and respiratory markets. Also we shall further strengthen our Gynae portfolio.
Your Directors are hopeful of further growth in sales and better financial performance during the current year.
The Board of Directors of your Company is pleased to recommend payment of dividend of Rs.5.50 per equity share of Rs.10/– each for the financial year ended 31st March, 2015 amounting to Rs.377.79 Lacs (inclusive of dividend distribution tax of Rs.63.90 Lacs).
TRANSFER TO RESERVES :
The Board proposes to transfer an amount of Rs.950.00 Lacs to General Reserve.
CHANGE IN THE NATURE OF BUSINESS, IF ANY :
During the year under review, there has been no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFTER THE BALANCE SHEET DATE :
There was no material changes and commitments in the business operation of the Company, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE :
There was no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS :
1. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every quarter during the approval of Financial Statements, Internal Auditors present the Internal Audit Report and Management comments on the Internal Audit observations;
2. The Board of Directors of the Company have adopted various policies like Related Party Transaction Policy, Whistle Blower Policy and other procedures for ensuring the orderly and efficient conduct of its business. The Company's system of internal control has been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
3. The Company is in process of installing ERP suite for a reliable, high end, comprehensive, disciplined and integrated business solution.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES :
The Company does not have any subsidiary/joint ventures/associate companies.
During the year, the Company has not accepted any deposit in terms of Section 73 of the Companies Act, 2013. There was no overdue deposit as on 31st March, 2015 except Rs.21.80 Lacs (including accrued interest of Rs.1.80 Lacs) which remained unclaimed.
STATUTORY AUDITORS :
M/s. G. Basu & Co., Kolkata, Chartered Accountants (Registration No.301174E) had been appointed as Statutory Auditors of the Company by the members in their AGM held on 7th August, 2014 till the AGM of the Company to be held in 2017 (subject to ratification by members at every AGM). Accordingly, appointment of M/s. G. Basu & Co., Chartered Accountant, as Statutory Auditors of the Company for the financial year 2015–16 is placed for ratification by the shareholders.
M/s. G. Basu & Co., Kolkata, Chartered Accountants have signified their consent, in writing, for such appointment along with a certificate stating that their appointment, if made, shall be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
AUDITORS' REPORT :
The Auditors' Report to the shareholders on the accounts of the Company for the financial year ended 31st March, 2015 does not contain any qualification, reservation or adverse remark or disclaimer.
The provisions of Section 204 read with Section 134(3) of the Companies Act, 2013 mandates Secretarial Audit of the Company for the financial year 2014–2015 by a Company Secretary in Practice and accordingly the Board have appointed
M/s. Dipti Kumar Gupta, Practicing Company Secretary (C.P.No: 9506) as Secretarial Auditor to conduct Secretarial audit of the Company for the Financial year ended on 31st March, 2015.
Secretarial Audit Report issued by M/s. Dipti Kumar Gupta, Practicing Company Secretary in form MR–3 is enclosed as
"Annexure – 1" to this Annual Report.
There are no qualifications in Secretarial Audit Report COST AUDIT :
In accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, the Company is required to appoint a cost auditor to audit the cost records of the applicable products of the Company relating to the business of manufacturing Bulk Drugs and Formulations. Accordingly, M/s. S. Gupta & Co., Kolkata, Cost Accountants (Registration No.000020) were appointed as the Cost Auditors for auditing the Company's cost accounts for the year ended 31st March, 2015.
SHARE CAPITAL :
There is no change in the Share Capital of the Company during the year.
EXTRACT OF THE ANNUAL RETURN :
The extract of the Annual Return is prepared in Form MGT–9 as per the provisions of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 and the same is enclosed as "Annexure–2" to this Report.
OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014 :
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as "Annexure – 3" to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
The Board of Directors of the Company have constituted Corporate Social Responsibility Committee consisting of following persons namely Mr. A. K. Kothari, designated as Chairman, Mr. K. P. Mundhra, Executive Director and Dr. K. Lahiri, Independent Director of the Company as members of the Committee.
The Board of Directors of the Company on the recommendation of CSR Committee has adopted a CSR Policy at its meeting held on 13th November, 2014 which inter–alia states the CSR activities to be taken by the Company. The Policy may be referred at the Company's official website at <http://www.albertdavidindia.com/investor–relation/si/csr>
The Company has contributed Rs.29.00 Lacs in discharging its corporate responsibility obligation during the year in due adherence of stipulation contained under section 135 of the Companies Act, 2013.
Report on Corporate Social Responsibility as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 is prepared and the same is enclosed as "Annexure–4" to this Report.
Changes in Directors and Key Managerial Personnel
(a) Appointment of Independent Directors
Mr. Arindam Sarkar has been inducted on the Board of the Company with effect from 7th August, 2014 as an Additional cum Independent Director, subject to regularisation/approval of the members in the ensuing Annual General Meeting
for a term of 5 consecutive years with effect from his date of appointment.
The Company has received notice from a shareholder pursuant to Section 160 of the Companies Act, 2013 proposing appointment of Mr. Arindam Sarkar as Director of the Company. Appropriate resolution seeking his appointment is appearing in the Notice convening the Annual General Meeting of the Company.
(b) Declaration by Independent Directors :
All the Independent Directors have submitted their declarations of independence pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as laid down in section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
(c) Familiarization Program undertaken for Independent Directors
The Independent Directors are familiarised with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. On appointment, the Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program on the Company's operations, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The familiarization program is available on the
Company's website under the weblink : <http:Wwww.albertdavidindia.com/investor–relation/si/familiarisation>:W –relation/si/familiarisation>www.albertdavidindia.com/investor–relation/si/familiarisation relation/si/familiarisation>
(d) Non–Independent Director
In accordance with the provisions of Articles of Association of the Company, Mrs. Prabhawati Devi Kothari, Director of the Company, is liable to retire by rotation and being eligible, offer herself for re–appointment. The Board recommends her appointment with a view to avail her valuable advices and wise counsel.
A brief profile of the above Directors seeking appointment/re–appointment required under Clause 49 of the Listing Agreement, is given in the Notice of AGM.
(e) Change in Directorship during the year
Mr. D. D. Binani resigned from the Board and his resignation was accepted with effect from 13th November, 2014 by the Board in their meeting held on 13th November, 2014. The Board places on record their deep sense of appreciation for his valuable advice and guidance during his association with the Company.
(f) Key Managerial Personnel
Mr. A. K. Kothari, Chairman & Managing Director, Mr. K. P. Mundhra, Executive Director, Mr. S. C. Shah, Vice President(Finance) & CFO and Dr. Indrajit Dhar, Associate Vice President (Accounts & Taxation)–cum–Company Secretary were re–designated as Whole–time Key Managerial Personnel of the Company as per section 203(2) of the Companies Act, 2013.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE :
Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
a) Criteria for evaluation of Board of Directors as a whole
i. The frequency of meetings;
ii. The length of meetings;
iii. The administration of meeting;
iv. The number of committees and their roles;
v. The flow of information to board members and between board members;
vi. The quality and quantity of information; and
vii. The Disclosure of Information to the stakeholders.
b) Criteria for evaluation of the Individual Directors
i. Ability to contribute and monitor corporate governance practices;
ii. Ability to contribute by introducing best practices to address top management issues;
iii. Participation in long term strategic planning;
iv. Commitment to the fulfillment of director obligations and fiduciary responsibilities;
v. Guiding strategy;
vi. Monitoring management performance and development;
vii. Statutory compliance & Corporate governance;
viii. Attendance and contribution at Board/Committee meetings;
ix. Time spent by each of the member; and
x. Core competencies.
The Directors expressed their satisfaction over the evaluation process and results thereof.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS :
During the financial year ended 31st March, 2015 four Board Meetings were held. Details of board meetings held during the financial year have been furnished in the Corporate Governance Report forming part of this Annual Report.
MEETINGS OF INDEPENDENT DIRECTORS
During the year under review, a meeting of Independent Directors was held on 9th February, 2015 wherein the performance of the non–independent directors and the Board as a whole was reviewed. The Independent Directors at their meeting also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.
AUDIT COMMITTEE :
The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. There has been no instances where the Board has not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE :
The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming part of this Annual Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION :
A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto stating therein the Company' policy on Directors' appointment and remuneration by the Nomination and Remuneration Committee which was approved by the Board of Directors at its meeting held on 27th May, 2014. The said Policy is appended as "Annexure–5" to this Report.
The said policy may also be referred to, at the Company's official website at the weblink, <http://www.albertdavidindia.com/> investor–relation/si/nr–policy
WHISTLE BLOWER MECHANISM/VIGIL MECHANISM :
The Company has a Whistle Blower Policy in place pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement. The said policy may be referred to, at the Company's official website at the weblink, <http://www.albertdavidindia.com/> investor–relation/si/whistle–blower–policy
The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the audit committee in exceptional cases.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 :
The Company as an organization is committed to provide a healthy environment to all employees and thus does not tolerate any discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013. The Company has set up Internal Complaint Committee which is chaired by Female employee of the Company. No complaints were received during the financial year 2014–2015.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
During the year, the Company has given loans of Rs.100.00 lacs and Rs.300.00 lacs to M/s. EMC Limited and M/s. Gillanders Arbuthnot & Co. Ltd. for short term period at an interest rate of 16% and 13.5% per annum respectively. Grant of the said loans are within the power of the Board of Directors. The loans have been repaid during the year.
No investment was made or guarantee was given by the Company during the year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
A Related Party Policy has been devised by the Board of Directors at its meeting held on 9th February, 2015 for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to, at the Company's official website at the weblink, <http://www.albertdavidindia.com/investor–relation/si/rp–transaction>. The Audit Committee reviews all related party transactions quarterly.
There are no contracts or arrangements entered into by the Company during the year with Related Parties referred to in Section 188(1) of the Companies Act, 2013.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL :
Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as "Annexure–6" to this Annual Report.
Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as "Annexure–7" to this Annual Report.
CORPORATE GOVERNANCE :
A separate report on Corporate Governance and Management's Discussion and Analysis is annexed as part of the Annual Report along with the Auditor's Certificate on compliance with the condition of Corporate Governance under Clause 49 of the Listing Agreement.
RISK & MITIGATING STEPS :
The Company has identified various risks faced by the Company from different areas. Appropriate structures are present so that risks are inherently monitored and controlled inter alia through strict quality assurance measures.
The Company has adequate internal control system and procedures to combat risks. The risk management procedure is reviewed by the Audit Committee and Board of Directors on a quarterly basis at the time of review of quarterly financial results of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to clause (c) of sub–section (3) of Section 134 and Section 134(5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that :
i) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any ;
ii) the Directors had 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 ended on 31st March, 2015 and of the profit of the Company for that period ;
iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records for the year ended 31st March, 2015 in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;
iv) the Directors had prepared the annual accounts on a 'going concern basis';
v) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls with reference to the financial statements are adequate and were operating effectively ; and
vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND :
The Company has transferred unclaimed dividend amounts till the year ended 31st March, 2007 to the Investor Education & Protection Fund established by the Central Government in compliance to the provisions of the Companies Act.
Pursuant to the provisions of IEPF (Uploading of Information regarding Unpaid and Unclaimed Amounts lying with companies) Rules, 2012, the Company has uploaded the details of Unclaimed Dividend lying with the Company on the its website <http:Wwww.albertdavidindia.com>:W www.albertdavidindia.com , investor–relation/si/iep–fund as also on the website of Ministry of Corporate Affairs.
LISTING WITH STOCK EXCHANGES :
Your Company is listed with BSE Limited and the Company has paid the listing fees.
The Board gratefully acknowledges the support given by medical profession, trade, shareholders, Company's bankers and stockists, Central and State Government Authorities, Stock Exchange, CDSL, NSDL and all other Business Associates for the growth of the organization. The Board further expresses its appreciation for the services rendered by the executives, officers, staffs and workers of the Company at all levels.
For and on behalf of the Board of Directors
A. K. Kothari
Chairman & Managing Director
DIN : 00051900
Dated : 28th May, 2015
Place : Kolkata