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DIRECTOR'S REPORT

Amrutanjan Health Care Ltd.

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Market Cap. (₹) 1300.76 Cr. P/BV 8.93 Book Value (₹) 49.86
52 Week High/Low (₹) 523/236 FV/ML 1/1 P/E(X) 53.06
Bookclosure 18/11/2019 EPS (₹) 8.39 Div Yield (%) 0.48
Year End :2018-03 

The Directors have pleasure in presenting the Eighty First (81st) Annual Report of the Company along with the Audited financial statements for the year ended March 31, 2018.

1. FINANCIAL RESULTS

(Rs. In Lakhs)

Particulars

For the Current Year ended 31 March 2018

For the Previous Year ended 31 March 2017

Profit before Interest and Depreciation

3,412.15

3,728.00

Less: Interest

12.68

13.44

Depreciation & Amortisation

290.59

303.27

204.79

218.23

Profit Before exceptional items

3,108.88

3,509.77

Exceptional Items

186.68

-

Profit from continuing operations before tax

3,295.56

3,509.77

Provision for Taxation

- Income Tax

(1,320.00)

(1,167.18)

-Deferred Tax

29.36

(31.60)

-Short Provision for Income Tax of earlier years

-

-

Profit from continuing operations

2,004.92

2,310.99

Loss from discontinued operation after tax

(7.62)

(131.08)

Profit for the year

1,997.30

2,179.91

Net other comprehensive income not to be reclassifed subsequently to profit or loss

(25.46)

(41.69)

Total comprehensive income for the year

1,971.84

2,138.22

Add:

Transfer from Profit & Loss Account

-

-

- Surplus from previous year brought forward

6,141.88

4,390.65

Profit for Appropriation

8,113.72

6,528.87

Appropriations:

Final Dividend paid

241.15

-

Tax on Final Dividend

49.09

-

Interim Dividend paid

321.54

321.54

Tax on Interim Dividend

65.46

65.46

Balance Profit Carried to Balance Sheet

7,436.48

6,141.88

8,113.72

6,528.87

2. PERFORMANCE OF YOUR COMPANY

Your Company witnessed a 6.51% growth in turnover during the financial year 2017-18 with total Gross Sales of Rs. 249.27 Crores as against Rs. 234.01 Crores during the previous financial year.

OTC and Beverages Business - Performance at a Glance

Particulars

2017-18

2016-17

CHANGE %

Production - Tonnes

796.08

824.93

(3.50)

Kilo Ltrs

6898.54

6183.25

11.57

Sales Volume -Tonnes

740.74

733.21

1.03

Kilo Ltrs

5994.09

6294.04

(4.77)

Sale Value (in Crores)

224.71

217.19

3.46

Operating EBITDA (in Crores)

36.09

36.94

(2.32)

Operating EBITDA Margin (%)

16.06

17.01

(5.59)

3. DIVIDEND

The Board of Directors after considering the profits projected for the year 2017-18, had declared and paid two interim dividends during the year. Details of the Interim Dividend paid and the final dividend recommended are as below:

i. Interim Dividend:

S. No.

Date of Board Meeting approving the Dividend

Rate of Dividend (in Rs.) per share of Rs. 2 each

% of Interim Dividend to Face Value

Total Amount of Interim Dividend (in Rs.)

Date of Payment

1.

November 9, 2017

1.10

55%

1,60,76,847

November 22, 2017

2.

February 13, 2018

1.10

55%

1,60,76,847

February 28, 2018

TOTAL

2.20

110%

3,21,53,694

The Company has borne the entire dividend distribution tax of Rs.65.46 lakhs towards the two interim dividends paid to the equity shareholders.

ii. Final Dividend:

The Board has proposed a final dividend of Re. 0.85/- per equity share of face value of Re. 1/- each subject to the approval of the shareholders in the upcoming Eighty First (81st) Annual General Meeting. The members who are holding shares as on September 10, 2018 in dematerialised mode and the members holding shares as on September 17, 2018 in physical mode will be paid dividend within 30 days of declaration of the dividend. With respect to the shares held in dematerialised form, it would be paid to the members whose names are furnished by NSDL and CDSL as owners on the record date. The dividend is paid as per the Capital Return Policy of t h e C o m p a n y a v a i l a b l e a t t h e w e b - l i n k https://www.amrutanjan.com/pdf/CRP.pdf.

4. AMOUNT CARRIED FORWARD TO RESERVES

No amount was carried forward to reserves for the year ended March 31, 2018.

5. SHARE CAPITAL

The paid-up equity share capital as on March 31, 2018 was Rs.2,92,30,630 (1,46,15,315 shares of Rs. 2/- each). During the FY 2018-19 the Company has sub- divided each share of Rs. 2/-(Rupees Two only) to 2 (Two) shares of Re. 1/- (Rupee One only) each.

Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review.

(a) Issue of equity shares with differential rights as to dividend, voting or otherwise;

(b) Issue of shares (including Sweat Equity Shares and ESOS) to employees of the Company under any scheme;

6. FIXED DEPOSITS

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V (Acceptance of Deposits by Companies) of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and was not holding any amount under Fixed Deposit Account as on March 31, 2018.

7. FINANCE

The cash and cash equivalent as at March 31, 2018 was Rs. 29.24 Crores. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with with Companies (Meetings of Board and its Powers) Rules, 2014 and details as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) are given in Notes to the Financial Statements.

9. MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

In terms of Regulation 34 and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), the MDA report of the Company capturing the performance, industry trends and other material changes with respect to your Company are presented in “ANNEXURE A” of this Report.

10. CORPORATE GOVERNANCE

Your Company has complied with the requirements of Regulation 34 read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (SEBI LODR) and the following Reports/ Certificates form part of this report :

a) The Management Discussion& Analysis Report (“ANNEXURE A”)

b) The Report on Corporate Governance (“ANNEXURE B”)

c) The Certificate duly signed by the Chairman & Managing Director and Chief Financial Officer on the Financial Statements of the Company for the year ended March 31, 2018 as submitted to the Board of Directors at its meeting held on May 24, 2018 ;

d) The declaration by the Chairman and Managing Director regarding compliance by the Board members and senior management personnel with the Company’s Code of Conduct ;

e) The PCS Certificate on Corporate Governance

11. DIRECTORS, KEY MANAGERIAL PERSONNEL & SENIOR MANAGERIAL PERSONNEL

(a) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 (‘Act”) and the Articles of Association of the Company, Dr. Pasumarthi S N Murthi (DIN: 00051303), Non- Executive Director who retires by rotation at the upcoming Eighty First (81st) Annual General Meeting and being eligible, offers himself for reappointment.

The notice convening the AGM includes the proposal for his reappointment.

(b) Continuation of Directorship

At the 80th Annual General Meeting of the Company held on September 21, 2017, the Shareholders have re-appointed Dr. H B N Shetty (DIN : 00015465), Independent Director for a period of five (5) years from the conclusion of the Eightieth (80th) Annual General Meeting upto the conclusion of Eighty Fifth (85th) Annual General Meeting.

In compliance with Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, approval / sanction of the members be and is hereby sought for continuation of office by Dr. H B N Shetty (DIN: 00015465), Independent Director of the Company whose term expires at the conclusion of 85th Annual General Meeting notwithstanding that he has already attained the age of 75 years .

The notice convening the AGM includes the proposal for continuation of existing tenure of directorship.

(c) Independent Directors :

The Nomination and Remuneration Committee at its meeting held on August 9, 2018, has recommended the re-appointment of Mr. G Raghavan (DIN:00820000) & Mr. V Swaminathan (DIN:06953687), as Independent Directors, for a second term of five (5) consecutive years effective from the conclusion of the ensuing 81st AGM till the conclusion of 86th AGM (2023).

The resolutions seeking approval of the members for the re-appointment of the above Directors have been incorporated in the Notice convening the Eighty First (81st) Annual General Meeting of the Company along with brief details about them.

The Independent Directors of the Company have submitted a declaration under Section 149(7) of the Act that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as Independent Director during the year.

The terms and conditions of appointment of the Independent Directors are placed on the website of the Company www.amrutanjan.com. The details of familiarisation programmes conducted to the Independent Directors are available at the weblink https://www.amrutanjan.com/pdf/FR.pdf

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

(d) Key Managerial Personnel :

Pursuant to the provisions of Section 2(51) of the Act, the Key Managerial Personnel of the Company are - Mr. S Sambhu Prasad, Chairman & Managing Director, Mr. N Swaminathan, Chief Financial Officer (appointed w.e.f November 9, 2017) and Mr. M Srinivasan, Company Secretary.

Mr. K Kannan, Chief Financial Officer, resigned from the services of the Company w.e.f August 31, 2017.

12. BOARD MEETINGS

During the year, Four (4) meetings of the Board of Directors were held. The complete details of the meetings are furnished in the Corporate Governance Report. The intervening gap between any two Meetings was less than 120 days in compliance with the provisions of Section 173(1) of the Companies Act, 2013.

13. MEETING OF INDEPENDENT DIRECTORS

During the year, one (1) separate meeting of Independent Directors was held. In the said meeting, the Independent Directors assessed the quality, quantity and timeliness of flow of information between the management and the Board and have expressed that the

current flow of information and contents were adequate for the Board to effectively perform its duties. They also reviewed the performance of the Non-independent Directors and the Board as a whole and the performance of the Chairperson of the Company taking into account the views of Executive Director and NonExecutive Directors.

14. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 read with Rule 8(4) of the Companies (Accounts) Rules, 2014 and SEBI LODR, the Board of Directors during the year carried out an annual performance evaluation of its own performance, the directors individually (without participation of the relevant director) , and the Chairman.

The evaluation was carried through a structured methodology approved by the Nomination and Remuneration Committee. The criteria for performance evaluation have been detailed in the Corporate Governance Report.

The outcome of the evaluation also forms the basis for the Nomination and Remuneration Committee while considering the appointment / re-appointment of Directors.

15. REMUNERATION POLICY

The Remuneration policy of the Company with respect to appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided in the website of the Company - https://www.amrutanjan.com/policjihtml The Nomination and Remuneration Committee has framed a Policy on Board diversity appropriate to the business requirements of the Company, which inter-alia specifies optimum combination of Executive Directors, Non-Executive Directors and Independent Directors, the recommendatory requirement for each of the directors to possess functional diversity and role of Nomination and Remuneration Committee to ensure that the Policy on Board diversity is considered while recommending the appointment of new directors on the Board of the company.

The details of remuneration paid / payable to the directors during the financial year 2017-18, is furnished in the Corporate Governance report annexed to this report of the board of directors

16. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was hosted on the website of the Company https://www.amrutanjan.com/pdf/Whistle%20Blower%20Policy.pdf

The Policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

17. UNCLAIMED SHARES

The details of the shares held in demat suspense account pursuant to SEBI LODR is provided in the Corporate Governance Report.

18. STATUTORY AUDITORS & THEIR REPORT

M/s. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 101248W/W-100022), were appointed as Statutory Auditors at the conclusion of Eightieth (80th) AGM held on September 21, 2017 for a period of five (5) years till the conclusion of the Eighty Fifth (85th) Annual General Meeting of the Company. Pursuant to the notification dated May 7, 2018 of the relevant provisions of the Companies (Amendment) Act, 2017 and Rule 3 of the Companies (Audit and Auditors) Rules, 2018, the ratification of statutory auditor appointed in the AGM for five (5) years is dispensed with.

M/s. B S R & Co. LLP, Chartered Accountants have also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India (ICAI). The Statutory Auditors’ report to the shareholders on the financials for the year ended March 31, 2018 does not contain any qualification, observation or adverse comment.

19. SECRETARIAL AUDITOR & THEIR REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P Sriram & Associates, Practicing Company Secretaries, as its secretarial auditor to undertake the secretarial audit for FY 2017-18. The secretarial audit report certified by the secretarial auditors, in the specified form MR-3 is annexed herewith and forms part of this report “Annexure E”.

The secretarial audit report does not contain any qualifications, reservations or adverse remarks or disclaimer

20. COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors at its meeting held on August 9, 2018 has appointed Mr.G Thangaraj (Registration No. 100464), Cost Accountant as the Cost Auditor to conduct the cost audit of the company for current financial year ending March 31, 2019. The remuneration has been fixed by the board based on the recommendation of the audit committee and is required to be approved by the members at the AGM. The notice convening the AGM contains the resolution with regard to this. He was also the cost auditor for the previous year ended March 31, 2018.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The CSR activities carried out by your Company during the financial year 2017-18 were mainly focused on (a) Protection of National Heritage (b) Animal Welfare (c) Health and Sanitation (d) Promoting Education (e) Environmental Protection and (f) Empowerment of Women. The activities undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013, the CSR Policy of the Company and as per recommendations of the CSR Committee.

The CSR Committee met twice (2) during the year to oversee the activities, programs and execution of initiatives as per the predetermined guidelines of the Board and approve the amount to be spent towards CSR. The Board takes pleasure to note that the Company has spent the entire amount that was mandatorily to be incurred towards the CSR spends for the year 2017-18. The CSR policy is available on the website of the Company at the web-link https://www.amrutanjan.com/pdf/ahcl-csr-policy.pdf. The detailed report on CSR activities carried out during the year is given in “ANNEXURE C”.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in “ANNEXURE D”.

23. EXTRACT OF ANNUAL RETURN

An extract of Annual Return in Form MGT-9 as on March 31, 2018 as per provisions of Section 92(3) of the Companies Act, 2013 is attached as “ANNEXURE F” to this Report.

24. RELATED PARTY TRANSACTIONS

Pursuant to the merger of the erstwhile Wholly Owned Subsidiary, Amrutanjan Pharmaessence Private Limited vide order passed by the National Company Law Tribunal (NCLT), Chennai dated July 13, 2017, no material significant related party transaction was made by the Company during the year with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and accordingly, applicability of Form AOC-2 does not exist.

25. CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION AND FOREIGN EARNINGS/OUTGO

Information as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are furnished in “ANNEXURE G” to this Report.

26. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) & 134(5) of the Companies Act, 2013:

I. that in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards had been followed and there were no material departures;

II. that the directors had selected such accounting policies and applied them consistently and had made judgment 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, 2018 and of the profit of the Company for the year ended on that date;

III. that proper and sufficient care has been taken 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;

IV. that the annual financial statements have been prepared on a going concern basis;

V. that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

VI. that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorised and recorded. Information provided to management is reliable and timely and statutory obligations are adhered to. Details of the same are provided in the Management Discussion and Analysis Report.

28. ENVIRONMENTAL, SAFETY AND HEALTH

Your Company is committed to ensure sound Safety, Health and Environmental (SHE) performance related to its activities, products and services. Your Company is taking continuous steps to develop Safer Process Technologies and Unit Operations and has been investing heavily in areas such as Process Automation for increased safety and reduction of human error element. Enhanced level of training on Process and Behavior based safety, adoption of safe & environmental friendly production process, Management

System is done on a continuous basis. The Company is committed to continuously take further steps to provide a safe and healthy environment.

29. RISK MANAGEMENT POLICY :

Your Company has a Risk Management Policy adopted by the Board. Periodical in-house risk audits were conducted to detect and mitigate the risks in a timely and effective manner. Management Discussion and Analysis Report contain more details on the risk management practiced by the Company.

30. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company between the closure of the financial year 2017-18 and the date of this report.

31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

32. ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

33. PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2017-2018, no complaints were received by the Company related to Sexual Harassment.

34. ACKNOWLEDGEMENT

The Directors wish to express their sincere appreciation to all the Government Departments, Bankers, Customers, Distributors, Suppliers and the shareholders for their co-operation and support extended during the year.

The Directors also wish to thank all the employees for their contribution, support and continued commitment throughout the year.

For and on behalf of the Board

Place: Chennai S Sambhu Prasad

Date: August 9, 2018 Chairman and Managing Director

Registered Office:

Amrutanjan Health Care Limited

CIN: L24231TN1936PLC000017

No.103,(42-45), Luz Church Road, Mylapore, Chennai 600 004

Tel : 044-2499 4465; Fax : 044-2499 4585

Email : shares @amrutanjan.com

Website : www.amrutanjan.com

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