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Godavari Drugs Ltd.

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Godavari Drugs is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2006

Director’s Report

The Members, The directors have pleasure in presenting their Twenty Seventh Annual Report on the business and opera- tions of the company together with the Audited Statement of Accounts for the year ended 31st March, 2015. Financial Highlights : During the year under review, performance of your company is as under: ( in Rupees) PARTICULARS Year ended Year ended 31st March 2015 31st March 2014 Revenue from Operations 55,14,73,488 9,55,10,003 EBITDA 6,08,24,413 1,95,98,432 Less: Finance cost 66,76,239 20,85,493 Less: Depreciation 68,09,772 1,04,86,117 Profit before tax & exceptional items 4,73,38,402 70,26,822 Less: Exceptional items - - Profit before tax 4,73,38,402 70,26,822 Less: Tax expenses 1,08,69,924 (84,89,345) Profit After Tax 3,64,68,478 1,55,16,167 Transferred to general reserve - - Proposed Dividend - - Closing Balance in Statement of Profit and Loss (5,81,86,269) (9,36,92,550) Company Performance Your Company has posted good financial results during the year under review. Turnover of the Company has increased from 955.10 lakhs to 5514.73 lakhs and the Net profit increased from 155.16 lakhs to 364.68 lakhs. Dividend To Conserve the funds for operations of the Company, the Board do not recommend any dividend for this financial year. Amounts Transferred to Reserves: Nil Disclosures regarding : Changes in Share Capital There was no change in the structure of the share capital of the Company during the financial year under review. Issue of Equity Shares with Differential Rights The Company has not made any issue of equity shares with Differential Rights under the provision of Section 43, read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 during the Financial Year under review. Issue of Employee Stock Options The Company has not made any issue of equity shares via Employee stock options during the Financial Year under review. Issue of Sweat Equity Shares The Company has not made any issue of equity shares under the provision of Section 54, read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014, during the Financial Year under review. Extract of Annual Return As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Manage- ment and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as Annexure I. Details of Board Meetings held During the Financial Year 2014-15, five meetings of the Board of Directors of the company were held, as against the minimum requirement of four meetings. Date Board Strength No. of Directors Present 28th May, 2014 06 06 14th August, 2014 06 06 12th November, 2014 06 06 11th February, 2015 06 06 27th March, 2015 06 06 Particulars of Loan, Guarantees and Investments under Section 186 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Compa- nies Act, 2013 forms part of the Financial Statements. Particulars of Contracts or Arrangements with Related Parties The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 shall be disclosed in Form No. AOC-2. As Annexure II. Explanation to Auditor''s Remarks The Auditors'' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. Material Changes Affecting the Financial Position of the Company There are no material changes / events, occurring after balance sheet date till the date of the report to be stated. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure III Details of Subsidiary, Joint Venture or Associates Associated Companies: Godavari Capital Private Limited, Godavari Homes Private Limited and A.K. Paper Products Private Limited. Vigil Mechanism Your Company is committed to highest standards of ethical, moral and legal business conduct. Accord- ingly, the Board of Directors have formulated Vigil mechanism which is in compliance with the provisions of section 177(9) & (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, in its meeting held on 28th May, 2014. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.godavaridrugs.com Nomination & Remuneration Committee Policy The Board of Directors of your Company in the meeting held on 28th May, 2014, constituted the Nomina- tion and Remunertaion Committee with the requisite terms of reference as required under Section 178 of the Companies and other applicable provisions thereof in place of existing Remuneration Committee. The said Committee framed, adopted and recommended the Nomination, Remuneration & Evaluation Policy. The Details of the Committee have been provided under Corporate Governance Report, which forms part of this Annual Report. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 In order to promote safe and indiscriminative environment, the Company has formed an Internal Com- plaints Committee where employees can register their complaints against sexual harassment. During the year under review Company has not received any complaint of harassment. Details of Directors and Key Managerial Personnel In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Mohit Jaju, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. During the year under review, the members approved the appointments of Shri Syed Hussain, Shri Dilip Patel, Shri Ramesh Babu Telugu and Smt. Vimala Madon as an Independent Director who are not liable to retire by rotation. Persuant to Section 203 of the Companies Act 2013, Company has appointed Mr. Jeevan Innani, Company Secretary. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has drafted a Policy for performance evaluation of Independent Directors, Board, Commit- tees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. On the basis of the Policy framed for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation activity was followed by the Board for its own performance and that of its Committees and individual Directors. The Company has conducted programmes to familiarize Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company works and other allied matters. Details of significant & material orders passed by the regulators or courts or tribunal - Matter of Imports relating advance licensing scheme is under adjudication with the Customs Depart- ment, Mumbai amounting Rs. 696062/- - Matter of Central Excise & Customs, amounting Rs. 1629999 is under adjudication with Commissioner (Appeals) Customs, Central Excise & Service Tax, Nagpur. Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the operation was observed. Deposit from Public The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. However opening balance of unsecured loans from related party is lying with the Company, which is subordinated to bank borrowings against cash credit limit availed from Andhra Bank. Receipt of any commission by MD / WTD from a Company or for receipt of commission / remuneration from it Holding or subsidiary. As there is no holding company or subsidiary of the Company, this part isn''t applicable. Declaration of Independence The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed in Sub-Section (6) of Section 149 of of Companies Act, 2013, read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement. Code of Conduct for Directors and Senior Management The Board has laid down a code of conduct for all Board members and senior Management of the Com- pany. The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. Risk Management The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company''s process and policies for determining risk tolerance and review management''s measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. Secretarial Audit Report In terms of Section 204 of the Act and Rules made there under, M/s. VSS & Associates, Practicing Company Secretary have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Audi- tors is enclosed as Annexure IV to this report. The report is self-explanatory and do not call for any further comments. Corporate Social Responsibility (CSR) Policy The Company doesn''t fall under the ambit of Section 135 (1), hence, Corporate Social Responsibility policy is not applicable to the Company. Audit Committee During the year under review, 4 meetings of the Committee were held on, May 28, 2014, August, 14, 2014, November, 12, 2014, February, 11, 2015 The composition of the Committee as on 31st March, 2015 as well as the particulars of attendance at the Committee during the year are given in the table below: Name Category of No. of Meetings % of Total meetings Directorship Attended attended during the tenure as a Director Shri Dilip Patel Independent Director / Chairman 4 100 Shr Syed Hussain Independent Director 4 100 Shri K K Jain Executive Director 4 100 The Committee''s composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members of the Audit Committee possess financial / accounting expertise. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the companies (appointment and Remuneration of managerial personnel) rules, 2014. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under: Sr. Name of Director/KMP Remuneration % increase in No and Designation of Director/KMP Remuneration for financial in the year 2014-15 Financial Year Lakhs 2014-15 1 Ghanshyam Jaju, Chairman Nil Nil 2 Mukund Kakani, Managing Director 2.88 Nil 3 Kirti Kumar Jain, Executive Director 1.80 Nil 4 Mohit Jaju, Executive Director 1.80 Nil 5 Syed Hussain, Independent Director 0.50 25 6 Dilip Patel, Independent Director 0.50 25 7 Ramesh Babu Telugu, Independent Director Nil- Nil- 8 Vimala Madon, Independent Director Nil- Nil- 7 Jeevan Innani, Company Secretary 0.60-- -- & Compliance Officer Name of Director /KMP and Desgination Ratio of remuneration of each Director/ to median remuneration of employees Ghanshyam Jaju, Chairman Not Applicable Mukund Kakani, Managing Director 1.6: 1 Kirti Kumar Jain, Executive Director 1:1 Mohit Jaju, Executive Director 1:1 Syed Hussain, Independent Director 0.27:1 Dilip Patel, Independent Director 0.27:1 Ramesh Babu Telugu, Independent Director Not Applicable Vimala Madon, Independent Director Not Applicable Jeevan Innani, Company Secretary & Compliance Not Applicable Officer - Remuneration not paid as Mr. Ramesh Babu Telugu, Mrs. Vimala Madon joined the Board w.e.f. 27th March, 2015. -- Mr. Jeevan Innani has joined Since February, 2015. - Sitting fees is also considered for calculation of remuneration for the above purpose Percentage increase in the median remuneration of employees in the financial year: The median remuneration is Rs. 15000 and the percentage increase in the median remuneration of employ- ees in the financial year is 28%. Number of permanent employees on the rolls of company: Number of employees on the rolls of the Company as on 31st March, 2015 was 101 Nos. Explanation on the relationship between average increase in remuneration and Company Perfor- mance: The increase in average remuneration of all employees in the financial year 2014-15 as compared to the financial year 2013-14 was 31%. The average increase in median remuneration was in line with the perfor- mance of the Company. Comparison of the remuneration of the Key Managerial Personnel against the performance of your Company: Particulars Amount in Rupees Remuneration of Key Managerial Personnel (KMP) during financial year 2014-15 (aggregated) 7,08,000 Revenue from operations 548,462,587 Remuneration (as % of revenue) 0.12 Profit before tax (PBT) 47,338,402 Remuneration (as % of PBT) 1.49 The Key Parameters for any variable component of remuneration availed by the Directors: There is no variable component of remuneration to the Directors. Variations in market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer: Particulars Unit As at 31st March, As at 31st March, Variation 15 14 Closing rate of share at BSE Rs. 53.40 10.38 414% EPS Rs. 4.84 2.06 134% Market Capita lization Rs./lac 40,21,28,700 7,81,66,590 414% Price Earnings ratio Ratio 11 5 120% Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average increase in salaries of employees other than managerial personnel in 2014-15 was 31%. Per- centage increase in the managerial remuneration for the year was 36%. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Highest Paid Director: Mr. Mukund Kakani: Rs. 24000/- p.m. Name of Employee Salary (Per Month) Ratio E V S S Prakasam 60000 2.50 J.VJogaikar 40000 1.67 S.A.Tejankar 36000 1.49 A.D.Hake 36000 1.49 G.R.Deshpande 33500 1.38 Y. Sadashiva Rao 30000 1.25 D.A.Patil 29000 1.20 U.N.Torane 26000 1.07 Affirmation that the remuneration is as per the remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) and 5(3) of the companies (appointment and Remuneration of managerial person- nel) rules, 2014. (a) Employed throughout the financial year and was in receipt of remuneration for the year in aggregate of not less than Rs. 60,00,000:- NIL (b) Employed for a part of the financial year and was in receipt of remuneration at a rate in aggregate not less than Rs. 5,00,000/- per month:- NIL (c) Employed throughout the financial year or part thereof, was in receipt of remuneration in the year which, in the aggregate or at a rate which in the aggregate was in excess of that drawn by the Whole- time Director and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company:- NIL Fraud Reporting No cases of fraud have been reported to the Audit Committee / Board during the financial year under review. Statutory Auditors Pursuant to the provisions of Section - 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules framed there under, read with Schedule VI of the Act, as amended from time to time, M/ s S. Daga & Co., Chartered Accountants, (Firm Registration No. 000669 S), be and is hereby re-appointed ( their appointment being ratified ) as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the (29th) Annual General Meeting of the Company to be held in the year 2017 (subject to ratification of their re-appointment at every next Annual General Meeting), at such remuneration as may be mutually agreed upon between the Board of Directors and Statutory Auditors. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. Management Discussion and Analysis Report The above report is annexed herewith as Annexure V Directors Responsibility Statement In accordance with the provisions of Section 134(3) (c) of the Companies Act 2013, your directors confirm that: a) In the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material depar- tures. b) The Company has selected such accounting policies and applied them consistently and made judg- ments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit /loss of the Company for that period. c) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. d) The annual accounts have been prepared on going concern basis. e) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. f) The Company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively. Acknowledgment The Directors express their sincere appreciation to the employees, valued shareholders, customers, bankers suppliers and government authorities for their continued support. For and on behalf of the Board of Directors For Godavari Drugs Limited Place : Secunderabad Ghanshyam Jaju Mukund Kakani Date : 30.05.2015 (Chairman) (Managing Director) DIN: 00104601 DIN: 00104646

Director’s Report