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Bharati Healthcare
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Directors Report Year End : Mar '08    « Mar 06
The Directors are pleased to present the 25th Directors Report on
 the business and operations of the Company together with the Audited
 Accounts for the financial year ended 31st March, 2008.
 
 1.  FINANCIAL RESULTS & OPERATIONS:
                                                    (Rs. in Thousands)
 PARTICULARS                                   YEAR ENDED   YEAR ENDED
                                               31.03.2008   31.03.2007
 
 Sales & Other Income                            1,33,940     2,27,506
 Profit (Loss) before financial                  2,33,199       66,893
 expenses and depreciation
 Financial charges                                 24,457       21,922
 Depreciation                                      24,667       29,671
 Profit (Loss) before tax &
 Extra Ordinary items                            (282,323)    (118,486)
 Extra Ordinary Items                                   -            -
 Profit (Loss) before tax                        (282,323)    (118,486)
 Provision for tax
 -  Current                                             -            -
 -  Deferred                                            -      (59,439)
 -  Fringe Benefit Tax                              1,475        1,525
 Profit (Loss) after tax                         (283,798)     (60,572)
 Prior period Adjustments (Net)                         -            -
 Transitional adjustment for
 retirement benefits                               (2,538)           -
 Balance of profit/(loss) brought
 forward                                         (106,808)     (46,236)
 Balance carried to Balance Sheet                (393,144)    (106,808)
 Basic and Diluted Earnings per
 Share (EPS) (in Rs.) (face value of
 Rs. 10/- each)
 -  Before extraordinary Items                      (7.72)       (6.52)
 -  After extraordinary Items                       (7.72)       (6.52)
 
 During the year under review, the Total Turnover/Sales and Other Income
 of the Company was Rs. 1,33,940 Thousands as against Rs. 2,27,506
 Thousands, during the previous financial year. The Company recorded a
 net loss of Rs. 2,82,323 thousands against a net loss of Rs. 1,18,486
 thousands during the previous financial year. The EPS thus has been
 recorded at (7.72).
 
 2.  DIVIDEND
 
 In view of the loss incurred by the Company, your Board of Directors do
 not recommend any dividend for the financial year 2007-08.
 
 3.  TRANSFER TO GENERAL RESERVES
 
 In view of the loss, your Board of Directors do not appropriate any
 amount to be transferred to General Reserves during the year under
 review.
 
 4.  MATERIAL CHANGES AND COMMITMENTS
 
 No material changes and commitments affecting the financial position of
 the Company have occurred between the end of the financial year of the
 Company and the date of signing of this Report.
 
 5.  FIXED DEPOSITS
 
 Your Company has not accepted any deposit(s) under Section 58A of the
 Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules,
 1975. Further, your Company is not required to furnish any information
 as required pursuant to the Non Banking Non Financial (Reserve Bank)
 Directions, 1996.
 
 6.  DIRECTORS
 
 In accordance with the provisions of Section 255 & 256 of the Companies
 Act, 1956 and the Articles of Association of the Company, Mr. Vanchai
 Santimanochai, Ms. Siriporn Sridech and Mr. Jean Francois Thedenat,
 directors of the Company retire by rotation and being eligible offer
 themselves for re-appointment at the ensuing Annual General Meeting
 (AGM).
 
 Mr. William Stevenson McCall and Mr. Milanes J Douglas resigned from
 the directorship of the Company w.e.f 24th October, 2007 and 5th
 September, 2008 respectively. The Board records its appreciation for
 the contribution made by the directors during their tenure.
 
 Mr. Kevin Black was appointed as Additional Director of the Company, by
 the Board in its meeting on 29th February, 2008. His appointment shall
 be regularized pursuant to his confirmation in the AGM, in line with
 the provisions of Section 260 of the Act.
 
 Mr. Madan Madhav Joshi was appointed as Additional Director of the
 Company by the Board in its meeting held on 29th February, 2008.
 Subsequently, he was appointed as Director of Operations & Executive
 Director of the Company by the Board of Directors by passing a
 Resolution by Circulation dated 1st March, 2008 for a period of three
 years. Mr. Joshi has subsequently been elevated to the position of
 Managing Director after being appointed by the Board of Directors in
 this behalf, vide Resolution by Circulation dated 29th September, 2008.
 The appointment of Mr. Joshi shall be confirmed in the ensuing AGM,
 pursuant to the provisions of Section 260 of the Act.
 
 On 22nd September, 2008, Mr. Rana Bhattacharjee resigned from the
 position of Managing Director of the Company and Mr. Madan Madhav Joshi
 also resigned as Director of Operations & Executive Director.
 
 Mr. Rana Bhattacharjee has been subsequently appointed as Whole time
 Director of the Company vide Resolution by Circulation dated 29th
 September, 2008 for a period of three years.
 
 The Board welcomes all the new members to accept the new challenges and
 expresses its gratitute to those how have ceased office.
 
 6.  APPOINTMENT OF COMPANY SECRETARY
 
 Since the last Annual General Meeting of the Company, Ms. Pinkey
 Kataria, Company Secretary of the Company, tendered her resignation to
 the Board of Directors w.e.f. 4th March, 2008, which was accepted by
 the Board of Directors. Further, Mr. Narendra Nath Batabyal, Fellow,
 Member of the Institute of Company Secretaries of India (FCS) was
 appointed as Company Secretary of the Company, w.e.f.  August 11, 2008.
 
 7.  AUDITORS
 
 M/s. BSR & Associates, Chartered Accountants, Statutory Auditors of the
 Company retire at the conclusion of the ensuing Annual General Meeting,
 and being eligible, offer themselves for re-appointment. The Company
 has received a certificate from the retiring auditors to the effect
 that their re-appointment, if made, would be in accordance with Section
 224(1B) of the Companies Act, 1956. The Board recommends their
 appointment.
 
 8.  AUDITORS REPORT
 
 The point wise comments of the Board of Directors on the observations
 of Auditors in their report, is as under:
 
 a) Clause 4(f) of the Auditors Report regarding Excess Managerial
 Remuneration - It has been provided in Clause 4(f) of the Auditors
 Report that the Company has paid managerial remuneration amounting to
 Rs. 655 thousands to its directors in excess of the limits prescribed
 under the provisions of Section 198, Section 269 and Section 310 read
 with Schedule XIII to the Companies Act, 1956 without obtaining the
 approval of the Central Government. It is hereby explained/clarified
 that the remuneration paid to Mr. Rana Bhattacharjee, the erstwhile
 Managing Director during the financial year 2007-08 and to Mr. Madan
 Joshi (salary paid for the month of March 2008) are in excess of the
 limits as prescribed under Schedule XIII. Subsequent to the approval of
 accounts in the ensuing Annual General Meeting for the financial year
 2007-08, the Company shall file the prescribed application with the
 Ministry of Corporate Affairs (MCA), Govt. of India & seek for waiver
 of the excess remuneration paid by the Company to the aforesaid
 directors.
 
 b) Clause (x) of the Annexure To The Auditors Report regarding Cash
 Losses - The Company has been in losses and as on year ended 31st
 March, 2007, the accumulated losses of the Company had exceeded 50% of
 its net worth, making it a potentially Sick Company.  However, owing to
 the induction of fresh equity of Rs.  16.8 crores and conversion of
 loan inducted by PPIPL of Rs.  62.6 crores into equity, the accumulated
 losses of the Company are now less than 50% of its net worth at the end
 of the said financial year. The Auditor further have pointed out that
 the Company has incurred cash losses in the financial year and in the
 immediately preceeding financial year, thus meaning that the recovery
 of the Company since it had become a Potentialy Sick Company has been
 on account of induction of fresh funds by its majority shareholder,
 PPIPL, and not on account of profits earned during the last two years,
 since the Company has been in cash losses during the last two years.
 
 c) Clause (xvii) Of The Annexure To The Auditors Report redarding
 utilization of funds - The Auditors have reported in the Annexure to
 the Auditors Report that the short term funds amounting to Rs. 5,118
 thousand have been applied for long term purposes. It is hereby
 explained/clarified that the said short term funds have been provided
 by the majority shareholder PPIPL, without any specific mandate to the
 Company as to whether the funds ought to be used for short-term or long
 term purposes. In the absence of a specific prohibition in this regard,
 the funds raised through the majority shareholder have been utilized
 for long term purposes.
 
 9.  Reference to Board for Industrial and Financial Reconstruction
 (BIFR)
 
 The Company has been in losses and as on year ended 31st March, 2007,
 the accumulated losses of the Company had exceeded 50% of its net
 worth, making it a potentially Sick Company. However, owing to the
 induction of fresh equity of Rs. 16.8 crores and conversion of loan
 inducted by PPIPL of Rs. 62.6 crores into equity, the accumulated
 losses of the Company are now less than 50% of its net worth at the end
 of the said financial year. In the last financial year, statutory
 intimation regarding the fact that the Company has become a
 Potentially Sick Company was given to the Board of Financial and
 Industrial Reconstruction (BIFR). Pursuant to the fact that the Company
 is no more a Potentially Sick Company, a like-wise intimation shall be
 sent to the BIFR in this regard.
 
 10.  INDUSTRIAL RELATIONS
 
 During the period under review, the Company maintained healthy, cordial
 and harmonious industrial relations at: all level. Your Directors wish
 to place on record their appreciation of the co-operation, valuable
 contributions, enthusiasm and unstinting efforts made by the employees
 and workers of the Company at all levels in the organization.
 
 11.  RISK MANAGEMENT
 
 Your Company follows a comprehensive system of Risk Management.  Your
 Company has adopted a procedure for assessment and minimization in
 accordance with the well structured risk management process. Your
 Company has engaged the services of a specialized firm, which is
 offering its services in all areas / fields requiring Risk Management
 namely Travel & Entertainment, Procurement, Payroll, Inventory
 Management, Order to Cash, HR, Manufacturing, FCPA, Finance, Fixed
 Assets, IT/IT Infrastructure.
 
 12.  CORPORATE GOVERNANCE REPORT
 
 The Corporate Governance Report, placed before the Board of Directors,
 be read as part & parcel of this Directors Report, and forms a
 integral part of the 25th Annual Report of the Company.
 
 13.  DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
 1956, the Board of Directors of the Company confirm;
 
 1.  that in the preparation of the annual accounts for the year ended
 March 31, 2008, the applicable accounting standards have been followed,
 and that there have been no material departures from such standards;
 
 2.  that the directors have selected appropriate accounting policies
 and applied consistently and made such 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 for the financial year ended March 31, 2008
 and the loss for the said financial year;
 
 3.  that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 4.  The annual accounts for the year ended March 31, 2008 have been
 prepared on a going concern basis.
 
 14.  DISCLOSURE AS MANDATED UNDER SCHEDULE XIII OF THE COMPANIES ACT,
 1956
 
 A Statement of Disclosure regarding elements of remuneration package
 (such as salary, benefits, bonuses, stock options, pensions etc. of all
 directors) has been provided in the Corporate Governance Report
 attached with this Directors Report, and forms an integral part of
 this Annual Report.
 
 15.  STATUTORY STATEMENTS
 
 Statements pursuant to Section 217 (l)(e) of the Companies Act, 1956
 read with Companies (Disclosure of Particulars in the Report of Board
 of Directors) Rules, 1988 with respect to Conservation of Energy,
 Technology Absorption, Foreign Exchange Earnings and Outgo and
 Statement showing Particulars of Employees as required under section
 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of
 Employees) Rules, 1975 are annexed hereto and forms an integral part of
 this Report.
 
 ACKNOWLEDGEMENT
 
 The Board of Directors acknowledge with gratitude the co-operation and
 assistance extended by all its stakeholders, including its
 shareholders, employees/workers, bankers, customers, business
 associates and employees as well as its holding company, M/s Pfizer
 Pharmaceutical India Pvt. Ltd. The Board also takes this opportunity to
 express its deep gratitude for the continued co-operation and support
 received from its valued shareholders.
 
                                              By Order of the Board
                                    For Capsugel Healthcare Limited
 
                                                               Sd/-
                                                 Madan Madhav Joshi
                                                  Managing Director
 
                                                               Sd/-
 Place : Dharuhera                               Rana Bhattacharjee
 Date  : 30th September, 2008                    Wholetime Director
Source : Dion Global Solutions Limited
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