DIRECTORS' REPORT TO, THE MEMBERS OF MANGALAM DRUGS & ORGANICS LIMITED The Directors have pleasure in presenting to you their Forty - Second Annual Report and the Company's audited financial statement for the accounting year ended 31st March 2015. DIVIDEND The company does not propose to declare any dividend this year in order to conserve the profits of the Company. 3. STATE OF COMPANY AFFAIRS The year under review saw a significant improvement in the performance of your company which earned a total income of Rs.22071.03 Lacs as compared to Rs.12275.98 Lacs in the previous year an increase of 80%. The company has made a profit after tax of Rs. 614.12 Lacs as against the loss of Rs.303.92 Lacs in the previous year.During the year under review the company has achieved export sales of Rs.5787.85 Lacs as against Rs.3718.65 Lacs in the previous year, an increase of 55.64%. Constant efforts are being made to boost the exports.. 4. FUTURE OUTLOOK Although the global recessionary pressures continue to affect chosen therapeutic segments, your company has been successful in further augmenting its international market presence. It remains committed to continuously deliver two molecules per quarter. Antihistamines and antiretroviral APIs have been selected for development. It further remains determined to file and obtain approvals for 4 additional DMFs during next year. It is the robust regulatory strategy (11 DMFs approved), the prudent partnering (critical process input sourcing) & continuous resource restructuring are the factors which are going to continue carving a brighter future for us. From a narrow product range company in early 80's, MANGALAM has marched against aggressively to create a niche for itself in Antimalarial and Antiretroviral drugs helping to address relevant unmet therapeutic needs worldwide. 5. DEPOSIT The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on date of the balance sheet. 6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in Notes 10, 14 and 23 to the Financial Statements. 7. RISK MANAGEMENT The Company has formulated a policy on Risk Management and the same is detailed in the Corporate Governance Report. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. These risks are reviewed from time to time and controls are put in place with specific responsibility of the concerned officer of the Company. 8. PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars as required under Section 134 of the Companies Act, 2013 relating to Conservation of Energy and Technology Absorption are also provided in the Annexure Ito this Report. 9. PARTICULARS OF EMPLOYEE The total number of employees as on 31st March, 2015 stood at 263. There were Nil employees, who were employed throughout the year and were in receipt of remuneration aggregating Rs. 60 lakhs or more or were employed for part of the year and were in receipt of remuneration aggregating Rs. 5 lakhs per month or more during the financial year ended 31st March, 2015. The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below: m. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remuneration is as per the remuneration policy of the Company. 10. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review Mr. Rajendra Prasad Mimani an Independent director stepped down from the Board. Your Board wishes to place on record its deep sense of appreciation for the valuable contributions made by him to the Board and the Company during his tenure as Director. a) Mr. Govardhan M. Dhoot retires by rotation and being eligible, offers himself for re-appointment. Further Mr. Dhoot's appointment as wholetime director was valid till 31st October, 2015. Your Board after necessary recommendation from the Nomination and Remuneration Committee has re-appointed him as a Managing director and necessary proposal for his reappointment is included in the Notice convening the AGM. b) Ms. Meenal Sukhani was appointed as an additional director non-executive with effect from 21st October, 2014.She was thereafter appointed as an Independent Director pursuant to her furnishing necessary declaration of independence as required under the Listing Agreement. The Board of Directors approved her appointment as an independent directoron 2nd May, 2015. In terms of Sections 149, 150, 152, other applicable and related provisions of the Companies Act, 2013 read with Rules made thereunder, retirement by rotation shall not apply to Independent Directors. c) Mr. Brijmohan Dhoot, was appointed as an additional director Non-Executive on 02 May 2015. Your directors seek member's approval for his appointment to the office of Non-Executive director liable to retire by rotation. The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. At the Board Meeting held on 31 October, 2014, Mr. Ajay Samant, VP Finance was designated as Chief Financial Officer "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company was not able to appoint as a Company Secretary as is required under section 203 and is in the process of finding a suitable person to fill the position. 11. REMUNERATION POLICY The remuneration policy, takes into account the circumstance of business so as to attract and retain quality talent and leverage performance significantly. Remuneration of the Executive Directors is determined by the Board, on the recommendation of the Nomination & Compensation Committee which is subject to the approval of the Shareholders. Non-Executive Directors are also entitled to sitting fees for attending meetings of the Board and Committees thereof the quantum of which is determined by the Board. The sitting fees payable toNon-Executive Directors, as determined by the Board is Rs. 2000 for each meeting of the Board, Audit Committee, Independent Directors Committee, Nomination and Remuneration Committee and the Stakeholders Relationship Committee. 12. DISCLOSURES: i. Whistleblower Policy The Company has a Whistleblower Policy to report genuine concerns and grievances. The same is explained in the Corporate Governance Report. The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Whistleblower Policy is also available on the Company's corporate website<http://www.mangalamdrugs>. com/images/pdf/whistle-blower-policy.pdf ii. Audit Committee The Audit committee was reconstituted on 16th April,2014 with Mr. Rajendra Prasad Mimani(Independent Director), Mr. Subhash Khattar(Independent Director)and Mr. Govardhan M. Dhoot(Executive Director). Mr. Rajendra Prasad Mimani resigned from his office on 2nd February, 2015 and the Audit committee was thereafter reconstituted with Ms. Meenal Sukhani*(Non-Executive Director), Mr. Subhash Khattar(Independent Director)and Mr. Govardhan M. Dhoot(Executive Director). All the recommendations made by the Audit Committee were accepted by the Board. Detailed Information of the Audit Committee may be reviewed in Annexure II of the Report. *Ms.Meenal Sukhani filed a declaration of her independence as required under the Listing Agreement and the Board approved her appointment as an Independent Director on 02 May, 2015. iii. Prevention of Sexual Harassment Policy During the year 2014-2015, NIL complaints were received by the Company related to sexual harassment. 13. 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 : NIL 14. MATERIAL EVENTS AFTER BALANCE-SHEET DATE There are no material changes and commitments to report 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. 15. DIRECTORS' RESPONSIBILITY STATEMENT As required under Section 134 of the Companies Act, 2013, your Directors confirm having: a) Followed in the preparation of the Annual Accounts, the applicable accounting standards with proper explanation relating to material departures if any; b) Selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period; c) 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 your Company and for preventing and detecting fraud and other irregularities; d) Prepared the Annual Accounts on a going concern basis; e) Laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively; and f) Devised proper systems to ensure compliance with the provisions of all applicable laws and that, such systems were adequate and operating effectively. 16. AUDITORS AND AUDITORS' REPORT i. Secretarial Auditors Your Board, during the year, appointed Ms. Shalini Shrivastav, Practising Company Secretary, to conduct secretarial audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March31,2015 is attached herewith marked as Annexure Vto this report. The Company is yet to comply with Section 203 of the Companies Act 2013 regarding non appointment of Key managerial personnel-Company Secretary and the process to fill this appointment is on. ii. Statutory Auditors M/s. Milwani Associates, Chartered Accountants (Firm Registration Number:106405W), were appointed as the Statutory Auditors of the Company to hold office from the conclusion of last AGM held on 29 September 2014 until the conclusion of 44th AGM to be held in the year 2017.Members are request to ratify their appointment for the financial 2015-16. There are no qualifications in the audit report for financial year 2014-15. Pursuant to Section 148 of the Companies Act 2013 read with Cost Audit Rules thereunder the Company has maintained its cost records for auditing. M/S Ankit Kishore Chande have been appointed as Cost Auditors to audit the cost accounts maintained by the Company in respect of Bulk Drugs for the year ending March 31, 2015. iii. Cost Auditors Pursuant to Section 148 of the Companies Act 2013 read with Cost Audit Rules thereunder the Company has maintained its cost records for auditing. M/S Ankit Kishore Chande have been appointed as Cost Auditors to audit the cost accounts maintained by the Company in respect of Bulk Drugs for the year ending March 31, 2015. 17. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Company's Auditors confirming compliance is set out in Annexure II forming part of this Report. 18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report as required under the Listing Agreement with the Stock Exchanges is annexed as Annexure III forming part of this Report. 19. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013,an extract of the annual return in the prescribed format is appended as Annexure IV to the Boards Report. 20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms-length basis.Note 33 to the Financial Statements covers the disclosure. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link:<http://www.mangalamdrugs.com/images/pdf/rpt-policy.pdf> 21. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors are also grateful to the customers, suppliers and business associates of your Company for their continued cooperation and support. Your Directors wish to place on record their deep sense of appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year. For and on behalf of the Board of Directors Govardhan M. Dhoot Chairman DIN NO:01240086 Place: Mumbai Dated: 06th August, 2015 |