| The Members,
The Directors of your Company have pleasure in presenting their Eighth
Annual Report together with the Audited Balance Sheet as on 31st March
2014, the related Statement of Profit and Loss for the year ended on
that date and the Auditors Report thereon.
- FINANCIAL RESULTS:-
This fiscal has been an exciting year in terms of growth and
profitability. To build further on the success achieved by the company
we have embarked on increased investments in all aspects. We are
confident that these spends will enable us to maintain our growth
trajectory into the future.
The Financial Highlights are given below:-
Figures in (Rs.Lacs)
2013-2014 2012-2013
Sales and Other Income 42892.42 52546.43
Earnings Before Interest, Taxes, Depreciation
and Amortization 6474.52 6563.78
Less: Depreciation 2044.21 2022.15
Earnings Before Interest and Tax 4430.31 4541.63
Less: Finance Charges 4301.44 4264.50
Profit Before Tax 146.67 4767.76
Prior Period Expenses 17.80 4.43
Exceptional Item 0 4486.20
Less: Provision for Taxation Current Tax 25.78 55.64
Deferred Tax 61.52 222.17
Add: MAT U/S 115JB 25.78 55.64
Net Profit after Tax as carried to Balance Sheet 67.35 54.96
Basic & Diluted Earnings Per Share 0.46 0.40
0.19 0.37
- YEAR IN RETROSPECT:-
- The Company's Sales decreased from Rs. 52,546.43 Lacs in the
previous year to Rs. 42,892.42 Lacs in the current year.
- EBITDA decreased from Rs. 6563.78 Lacs in the previous year to Rs.
6474.52 Lacs in the current year.
- Net Profit After Tax increaded from Rs. 54.96 Lacs in the previous
year to Rs. 67.35 Lacs in the current year.
- Debt equity ratio is 0.92 in current year as compare to previous
year 1.07.
- Current Ratio is 1.02 in current year as compare to previous year
1.86.
- BUSINESS OUTLOOK:-
Dr. Datsons Labs Ltd, we believe that nothing toughens like the tough
times. 2013-14 was a tough year as input cost continued to rise and key
segments faced competitive pressures.
The rupee devaluation on account of fiscal challenges in the country
resulted in further pushing up the costs. Delay in financial
commitments led to deferred timelines and low capacity build-up.
We have undertaken steps to raise equity through sale of Stake so that
the company gets in required funding for its Working Capital & Capex
Program. We are looking for long term investors who can take forward
the legacy of the company
We chose not to stop, but to carry on; not be withered but to persist.
Rough seas make better sailors.
At Dr. Datsons we continued to wade through multiple challenges
diligently, patiently and persistently. Our investments made over the
years into an integrated business model also stemmed the decline.
In wake of growing competition and increased inflation, cost control
emerged as the biggest challenge during 2013- 14. We focused on
critically analyzing each process and product to clearly identify
avoidable elements in the cost structures. This enabled us to improve
efficiency, process time and capacity utilization without any
compromise on the end product/process quality. We continued to add new
clients across all our divisions. We utilized the blend of our
competitive cost structures with our global standards in R&D and
synthetic chemistry skills to partner large pharma companies for
long-term product development. Presently, we have forged four long-term
partnerships for our products and derive 37 per cent of our total
revenues from these partnerships.
- RESEARCH & DEVELOPMENT:-
A large investment in R&D could dent the bottom line especially when it
does not create fresh revenues.
Risk mitigation
The Company created a strong R&D team dedicated to creating new
products. The Company filed for more than 20 patents across different
countries. Through R&D, the Company pioneered various oral lozenges in
India. The Company's R&D centre has been recognised by DSIR.
Government of India
- ENVIRONMENT & SAFETY OUTLOOK:-
Dr. Datsons aggressively pursues safety, health and environment
protection as an integral part of its business. The Company strives to
minimise the adverse impact of its activities and products on the
environment and maintain a safe work place for its team members.
The Company maintains a lawn and garden (shrubs and decorative plants)
at its manufacturing units. More than 800 trees were planted over the
five years leading to 2012-13.
- Safety and health: Dr.Datsons strives to maintain the highest
safety and health standards. The Company received the ISO 14001 (for
environment management) and OHSAS 18001:1999 (for safety and health)
certifications, vindicating its endeavour of maintaining operating
practices in line with international benchmarks; each team member is
adequately trained in maintaining these standards. The Company
completed all its expansion projects without a single accident. The
Company constituted a six-member SHE committee.
- Training on safety: The Company ensures that every team member is
capable of handling emergency situations. It organises regular
classroom and practical training from government approved agencies.
- Evacuation plan: The Company's safety programs are based on
emergency evacuation plans. The team is kept informed about the updated
documents and displays and the facilities are well indicated with
assembly points.
- Fire equipment: The Company's facilities are equipped with
sophisticated fire fighting infrastructure. It conducts three mock
drills at its facilities annually. Critical areas like general
warehouses and finished goods warehouses have smoke sensors with
multiple alarms systems.
- Environment: The Company is committed to comply with all applicable
legal requirements through continual improvement in operational process
for improving its environment measures. The Company does not generate
any harmful/chemical wastes; it has a full-fledged effluent treatment
plant for processing plant waste. The waste water is recycled for
gardening purposes within the complex. All operating practices are
based on the principle of efficient utilisation of material and energy
The Company practices a policy of substituting hazardous materials and
recycling of resources to the maximum extent possible.
- DIVIDEND:-
In order to conserve the resources of the Company for any future
expansion, your Board deems fit not to recommend any dividend for the
financial year 2013- 2014.
- FIXED DEPOSIT:-
The company has not accepted any fixed deposits during the year under
reveiw.
- MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:-
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
- SUBSIDIARY COMPANIES:-
As per general exemption granted vide Government of India, Ministry of
Corporate Affairs' general circular no. 2/2011 dated 8th February,
2011, the Company has not attached the annual accounts of its
subsidiaries to this Annual Report. As required by the said circular,
the relevant information for each subsidiary has been disclosed in the
consolidated financial statements attached to this Annual Report.
The Company will make available the annual accounts of subsidiaries and
the related information to any Member of the Company who may be
interested in obtaining the same. The annual accounts of subsidiaries
will also be kept for inspection by any Member of the Company at the
registered office of the Company. The Consolidated Financial Statements
presented by the Company include the financial information of its
subsidiaries.
Further Statement under Section 212 of the Companies Act, 1956 is
enclosed herewith.
- DIRECTORS:-
During the year under review, Mr. Shashikant Shinde retires by rotation
and being eligible offers himself for reappointment at the forthcoming
Annual General Meeting.
Further Mr. Balkrishna Parab and Dr. Ullooppee Badade resigned as
Directors of the Company w.e.f. 24th February 2014.
Further, Mr. Chandulal Shah who was nominated as the
Chairman-Emeritus of the Company stepped down as such w.e.f. 05th April
2014.
The Companies Act, 2013 (the Act) provides for appointment of
independent directors. Sub-section (10) of Section 149 of the Companies
Act, 2013 (effective from April 1, 2014) provides that independent
directors shall hold office for a term of up to five consecutive years
on the Board of a company; and shall be eligible for re- appointment on
passing of ordinary resolution by the shareholders of the company.
Sub-section (1) states that no independent director shall be eligible
for more than two consecutive terms of five years. Sub-section (13)
states that the provisions of retirement by rotation as defined in
sub-sections (6) and (7) of Section 152 of the Act shall not apply to
such independent directors.
The non-executive independent directors were appointed as directors
liable to retire by rotation under the provisions of the erstwhile
Companies Act, 1956. The Board of Directors has been advised that non
executive (independent) directors so appointed would continue to serve
the term that was ascertained at the time of appointment as per the
resolution pursuant to which they were appointed. Therefore, it stands
to reason that only those non-executive (independent) directors who
will complete their present term at the ensuing AGM of the Company in
September 2014, being eligible and seeking re-appointment, be
considered by the shareholders for re-appointment for a term of upto
five consecutive years.
Non-executive (independent) directors who do not complete their term at
the ensuing AGM, will continue to hold office till the expiry of their
term (based on retirement period calculation) and thereafter would be
eligible for re-appointment for a fixed term in accordance with the
Companies Act, 2013.
Further, Mr. Giridhar Pulleti is appointed as an Independent Director
of the Company for a period of five years w.e.f. April 1, 2014 upto
March 31, 2019.
- COMPLIANCE OFFICER:-
Mr. Yogesh Patel, an Associate Member of the Institute of Company
Secretaries of India is the Company Secretary and Compliance Officer of
the Company.
- AUDITORS AND AUDITORS REPORT -
M/s. Agarwal, Desai & Shah, Chartered Accountants, Auditors of the
Company retires at the conclusion of this Annual General Meeting and
being eligible offers themselves for reappointment.
Auditors Report:
Auditors Report as issued by M/s. Agarwal Desai & Shah, Chartered
Accountants is self explanatory and do not call for further
clarification by the Board.
- COST AUDITORS:-
Your Board has proposed the appointment of M/s. Aatish Dhatrak &
Associates as Cost Auditors of the Company for conducting Cost Audit
for the financial year 2014- 2015.
- PERSONNEL:-
The Company considers human resources as its greatest asset and
strength in the process of development and progress. In terms of the
provisions of Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 as amended by the
Companies (Particulars of Employees) Rules, 2011, the names and other
particulars of the employees are set out in the Annexure-A to the
Directors' Report.
- DISCLOSURE OF PARTICULARS:-
Information as per the Companies (Disclosure of Particulars on the
report of the Board of Directors) Rules, 1988 relating to Conservation
of Energy, Technology Absorption, Forex Earnings & Outgo is provided in
Annexure B forming part of this report.
- DIRECTORS RESPONSIBILITY STATEMENT: -
Pursuant to the requirement under section 217(2AA) of the Companies Act
with respect to Directors Responsibility Statement, it is hereby
confirmed.
a. That in preparation of the accounts for the finacial year ended 31st
March 2014 the applicable accounting standards have been followed along
with proper explanation relating to material departure.
b. That the Directors have selected such accounting policies and
adopted them consistently and made judgment and estimates that were
reasonable and prudent so As to give a true and fair view of the state
of affairs of the Company for the year under the review.
c. That the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provision of the companies Act, 1956 for safeguarding the assets and
for preventing, detecting fraud and other irregularities.
d. That the Directors have prepared the accounts for the financial year
ended 31st March 2014 on a going concern basis.
- CORPORATE GOVERNANCE:-
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best Corporate
Governance practices as generally prevalent.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
The requisite Certificate from the Statutory Auditor confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
- LISTING:-
The shares of the Company are listed on the National Stock Exchange of
India Limited and Bombay Stock Exchange Limited. The Company has paid
the annual listing fees to the NSE and BSE for the year 2014-2015.
- BOARD COMMITTEES:
In Compliance with both the mandatory and non- mandatory requirements
under the Listing Agreement and the applicable laws, the Board has
maintained the following committees:
(i) Audit Committee
(ii) Shareholders/ Investor Grievance Committee
(iii) Remuneration & Nomination Committee
(iv) Investment Committee
(v) Corporate Governance Committee
(vi) Health, Safety, Environment & Corporate Social Responsibility
Committee
- FOREIGN CURRENCY CONVERTIBLE BONDS:
The Company came out with the issue of Foreign Currency Convertible
Bonds [FCCBs] aggregating to USD 40 million on 21st March 2013.
However, the proceeds of the issue were fully utilized for which issue
was made as mentioned in the Offering Circular dated March 21, 2013.
- AUTHORISED CAPITAL:
During the year under review, the authorized share capital of the
Company was increased from Rs 50,00,00,000 (Rupees Fifty crores) to Rs.
110,00,00,000 (Rupees One Hundred Ten crores) divided into 11,00,00,000
Equity Shares of Rs. 10/- each.
- ALLOTMENT OF SHARES:-
During the year under review, the Company has allotted 3,94,84,717
equity shares consequent to the conversion notice(s) received from the
Bondholder for conversion of the Foreign Currency Convertible Bonds
("FCCB") for total value of US$ 40.00 million at a conversion price of
Rs. 55 per share, in accordance with the terms of the Offering Circular
dated March 21, 2013 for issue of US$ 40 million unsecured foreign
currency convertible bonds and the Supplemental Trust Deed dated
February 21, 2014.
Consequently the paid up share capital of the Company has increased
from Rs. 13,88,71,510 aggregating 1,38,87,151 equity shares of Rs. 10
each to Rs. 53,37,18,680 aggregating 5,33,71,868 equity shares of Rs.
10 each.
The Company has received approval from BSE Limited and the National
Stock Exchange of India Limited for listing and dealing of all the
above Equity Shares of the Company.
- ACKNOWLEDGMENT:-
Your Directors would like to express their appreciation for the
assistance and co-operation received from Bankers, Govt authorities,
customers, and vendors during the year.Your Directors also wish to
place on record their deep sense of appreciation for the committed
services of Executives, Staff and workers of the company.
We are on the verge of storming both the domestic and international
markets with our innovative and specialty products and make a mark
globally for the Company. We seek your active cooperation for all our
future endeavors to make your Company a leading pharmaceutical Company.
For and on behalf of the Board
Dr. KANNAN VISHWANATH PRABHAT GOYAL
MANAGING DIRECTOR DIRECTOR
Place: Taloja
Date: 14/08/2014
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