REPORT OF THE BOARD OF DIRECTORS Dear Members, Your Directors are pleased to present the 26th Annual Report and the Company's Audited Financial Statement for the financial year ended March 31, 2015. DIVIDEND The Board of Directors to conserve the resources of the Company and to maintain the liquidity has decided not to declare dividend on Equity Shares for the year ended 31st March 2015. BUSINESS REVIEW Year under review proved to be turn around for the company in terms of Sales target of the Company. The revenue realization was Rs. 826.90 Lacs as compare to previous Year of Rs. 1142.11 Lacs. FIXED DEPOSIT During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014. MATERIAL CHANGES OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR UNDER REVIEW AND THE DATE OF THE REPORT There have been no material changes which affects the financial position of the Company had taken place during the time period between end of the financial year under review and the date of the report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis forms an integral part of this Report, as stipulated under Clause 49 of the Listing Agreement with Stock Exchange, is set out in the Report as Annexure - " A". CORPORATE GOVERNANCE Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. The new Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. The Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. Report on Corporate Governance is forming part of the Annual Report as Annexure - "B". A separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Equity Listing Agreement with the Stock Exchange(s). A Certificate of the MD and CFO of the Company in terms of subclause IX of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. EXTRACT OF THE ANNUAL RETURN Extract of Annual Return in Form No. MGT - 9 is attached pursuant to Section 134(3) to the Companies Act, 2013 as Annexure - "C". BOARD MEETINGS During the year under review, the Board of Directors met 5 (five) times on the meetings held on May 21, 2014, August 14, 2014, November 14, 2014, December 30, 2014 and February 14, 2015. Apart from the meetings of the Board different Committees met several times during the year under review. DIRECTORS RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and 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. DISCLOSURE BY INDEPENDENT DIRECTORS 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 Clause 49 of the Listing Agreement. DIRECTORS In accordance with Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shyam Kabra, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Mr. Shivaji Singh (DIN: 07198343), Mr. Ramesh Rai (DIN: 07198335) and Mr. Rajendra Kumar Bordia (DIN: 00760096) were appointed as Additional Director of the Company w.e.f 30th May, 2015 and are being proposed for appointment as an Independent Directors of the Company. Mrs. Kusum Kabra (DIN: 01739741) was appointed as an Additional Director of the company w.e.f 30th May, 2015 and in accordance with Section 196, 197 and 203 of the Companies Act, 2013, Mrs. Kusum Kabra was thereafter also designated as a Whole - time Director of the Company w.e.f. 01st September, 2015 for the term of three years subject to the approval of Members at the ensuing Annual General Meeting, Mr. Mahendra Singh Madloi was the director of the Company and in accordance with Section 196, 197 and 203 of the Companies Act, 2013, Mr. Mahendra Singh Madloi was thereafter also designated as a Whole - time Director of the Company w.e.f. 01st September, 2015 for the term of three years subject to the approval of Members at the ensuing Annual General Meeting, Brief resume of Directors seeking appointment and re-appointment as stipulated under clause 49 of Listing Agreement, has been provided as Annexure to the Notice of AGM of the Company. Resignation During the year under review, Mr. Rajendra Bordia has resigned from the directorship of the Company w.e.f 21.05.2014. The Board appreciates the services and the valuable support rendered by him during the tenure of his directorship. KEY MANAGERIAL PERSONNEL The Key Managerial Personnel (KMP) in the Company as per Section 203 of the Companies Act, 2013 are as follows: Mr. Shyam Kabra: Managing Director (DIN: 00760020) Mr. Arvind Poal: Chief Financial Officer (w.e.f 01.06.2015) Ms. Anchal Kabra: Company Secretary & Compliance Officer (w.e.f 14.08.2015) AUDITORS AND AUDITORS' REPORT M/s Agrawal Jhawar & Associates, Chartered Accountants, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and being eligible have consented and offered them-selves for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s Agrawal Jhawar & Associates, Chartered Accountants as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the twenty Eighth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETERIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Manish Maheshwari, Practicing Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith to this Report and marked as Annexure - "D". There is no qualification, reservation or adverse remark or disclaimer in Secretarial Audit Report except the following: 1. Company has not filed MGT 10 under Section 93 of Companies Act, 2013 during the financial year. 2. Company has not appointed Chief Financial Officer and Company Secretary as per Section 203 of the Companies Act, 2013. 3. Company has not appointed Internal Auditor as per section 138 of the Companies Act. 2013. 4. Company has not published Notice of Board Meeting and Financial Results as per Clause 41 of the Listing Agreement with Stock Exchanges. 5. Company has not maintained its own official website Properly 6. Company has not filed Form MGT-14 under Section 179 of the Companies Act, 2013 7. Company has not sent Notice to the Exchanges as per Clause 19 of the Listing Agreement with Stock Exchanges 8. Company has delayed to submit Financial Un-audited quarterly results for the quarter ended June 30, 2014 9. Company has not appointed women director during the year 2014-15. On above stated Para of Secretarial Audit Report, our explanation or comment as follows:- 1. Due to the uncertainty of calculation of 2% of the top 10 shareholders, we are not able to file the Form MGT 10. The Company was in process of filing MGT 10. 2. The Company has appointed CFO on June 1, 2015. As regards, appointment of Company Secretary, The Board submits that the Company has appointed Company Secretary in the meeting held on 14.08.2015. 3. As regards, appointment of Internal Auditor, The Board submits that the Company has appointed Internal Auditor in the meeting held on 14.08.2015. 4. With regards to non- publishing of Notice as per Clause 41, the Board submits that the Company has started complying the requirements. 5. The website of the Company is under process for updating. 6. With regards to all other qualification, the Board hereby submits that most of the requirements have been complied by the company and other compliance as needed to be done by the company is under process by the company. 7. The Board submits that the Company has appointed Women Director w.e.f 30.05.2015. RELATED PARTY TRANSACTIONS During the financial year 2014-15, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement and the Companies Act. In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, the Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.kabradrugsltd.com . The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. Therefore the Company is not required to furnish any particulars in the Form AOC-2. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2014-15 are attached as Note no. 12 of the Financial Statements which forms part of this report. 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 is as follows: The company has one Managing Director and his remuneration Rs.75000/- per month. Further, sitting fees have been paid to 2(two) independent director during the year. The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are: a) Employed throughout the year Nil b) Employed for part of the year Nil The remuneration paid to all Key Management Personnel was in accordance with remuneration policy adopted by the company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Details of conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is forming part of this report as Annexure - "E". During the year there were no foreign earnings as well as outgo. RISK MANAGEMENT In line with the regulatory requirements of Section 134(3) of Companies Act, 2013, the Company has framed a Risk Management Policy to identify and access the key business risk areas and to resolve the same risk for smooth operations. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. INTERNAL FINANCIAL CONTROL According to Section 134(5) (e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the 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. The Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and controls are in place to ensure that transactions are properly verified, adequately authorized, correctly recorded and properly reported. SUSBSIDIARIES, JOINT VENTURES AND ASSOCIATES COMPANIES During the year under review, pursuant to the provisions of section 2(6), 2(87) it has been observed that the Company has no Subsidiaries, joint venture and any associate Company. INDUSTRIAL RELATIONS Relation between the Management and its employees has been cordial. Your Directors place on record their appreciation of the efficient and loyal services rendered by the employees of the Company at all levels. ACKNOWLEDGEMENT The Directors wish to convey their appreciation for the co-operation extended by bankers and various Government agencies. The Directors also wish to thank the Shareholders, Employees, Customers and Suppliers for their support and co-operation. By order of Board FOR KABRA DRUGS LIMITED SHRI SHYAM KABRA CHAIRMAN CUM MANAGING DIRECTOR DIN: 00760020 Place: Indore Date: August 14, 2015 Registered Office: 26, Sector "A", Sanwer Road, Industrial Area, Indore - 452 003 (M.P) CIN: L02423MP1989PLC005438 E-mail: kabradrugs@rediffmail.com |