DIRECTORS' REPORT With immense pleasure, your Directors present the 31st Annual Report along with the Audited Financial Statements of the Company, for the Financial Year ended 31st March, 2016 Dividend and Reserves: At its meeting dated 10th March, 2016, your Directors have declared an interim dividend at the rate of Rs.6.30 (63%). In addition, at its meeting held on 30th May, 2016, they have recommended a final dividend at the rate of Rs.0.90 (9%) per Rs.10/- paid up equity shares of the Company, subject to approval of the Shareholders at the ensuing Annual General Meeting. The total of interim dividend already paid (Rs.6.30) and the recommended final dividend (Rs.0.90) for the Financial Year 2015-16 is Rs.7.20 (72%) per equity share of Rs.10/- each, which amounts to Rs.334.75 lac. This is equivalent to 31.06% of the net profit of the Company for the Financial Year 2015-16. The total of the dividend and dividend distribution tax thereon amounts to Rs.402.90 lac. The amount of dividend appropriated stands at Rs.334.75 lac for the Financial Year 2015-16 as against Rs.292.90 lac for Financial Year 2014-15. The Reserves and Surplus amount stood at Rs.3553.94 lac as on 31st March, 2016 as compared to Rs. 2878.94 lac as on 31st March, 2015. The Register of Members and Transfer Books will remain closed from 21st July, 2016 to 27th July, 2016 for the purpose of dividend and for the Annual General Meeting. The Annual General Meeting is scheduled for 27th July, 2016. 3. 4. Directors and KMP: Shri Dilip H. Bhuta (DIN:03157252), existing Whole Time Director & Chief Financial Officer is liable to retire by rotation. Being eligible, he has offered his candidature for re-appointment. His appointment is subject to the Members approval at the ensuing Annual General Meeting. He was appointed as the Whole Time Director & Chief Financial Officer of the Company, liable to retire by rotation, for a period of three years from 1st April, 2016 to 31st March, 2019, by Members at their 30th Annual General Meeting held on 8th September, 2015. Pursuant to section 149, 152 and Schedule IV of the Companies Act, 2013, Shri Bharat V. Bhate (DIN:00112361), Shri Rameshchandra J. Vora (DIN:00112446) and Shri Arun R. Raskapurwala (DIN:00143983) were appointed as Independent Directors on 30th May, 2014 and Ms. Anjali S. Dalvi, (DIN:03293810) was appointed as an Independent Director on 24th July, 2015. They all have submitted a declaration stating that each of them meets the criteria of independence. The Board relies on their declaration of independence. 5. Statutory Auditors and Report: M/s. D. L. Arora and Co. Chartered Accountants, Mumbai, Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re- appointment. The Board of Directors has recommended their re-appointment for the period from the conclusion of the ensuing 31st Annual General Meeting till the conclusion of the next (32nd) Annual General Meeting of the Company. They have confirmed their eligibility and also that their re-appointment would be within the prescribed limit under the Companies Act, 2013 and that they are not disqualified for re-appointment. The Auditors' Report does not contain any qualification, reservation or adverse remarks. Hence, it is an unmodified opinion in terms of the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulaitons, 2015. 6. Secretarial Auditors: The Board of Directors has appointed M/s. Nilesh Shah & Associates, Practicing Company Secretary, Mumbai, to carry out the Secretarial Audit of the Company for the Financial Year 2016-17. Their Secretarial Audit Report for the Financial Year 2015-16 is attached to this Report as "Annexure A". The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks. 7. Cost Auditors: The Board of Directors has re-appointed M/s. Jagdish R. Bhavsar, Cost Accountants, Mumbai, as the Auditors of the cost records of the Company, for the Financial Year 2016-17. Their fees, as fixed by the Board of Directors of the Company, are to be ratified by the Members at the ensuing 31st Annual General Meeting of the Company. Members are requested to refer to the Notice convening the ensuing Annual General Meeting along with the explanatory statement for the ratification of their remuneration. 8. Directors Responsibility Statement: Pursuant to Section 134 (5) of the Companies Act, 2013, your Board of Directors state that: a. in preparation of the Annual Accounts for the Financial Year 2015-16, the applicable accounting standards have been followed; b. the estimates and judgments relating to Financial Statements have been made on a prudent and reasonable basis, in order to ensure that the Financial Statements reflect, in a true and fair manner, the form and substance of the transactions, and reasonably present the Company's state of affair and profit for the year; c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. they have prepared the Annual Accounts on a going concern basis; and e. they have laid down internal financial controls which are adequate and operating effectively. The internal auditors have conducted periodic audits of the Company's financials; f. the systems are in place in order to ensure compliance with the provisions of specifically applicable laws and such systems were adequate and operating effectively. 9. Extract of Annual Return: As provided under Section 92 (3) of the Companies Act, 2013, the extract of Annual Return under MGT-9 is attached to this report as "Annexure B". 10. Number of Meetings of the Board: The Board of Directors met five times during the year. For further details in this regard, kindly refer to the report on Corporate Governance included in the Annual Report. 11. Company's Policy on Directors / Key Managerial Personnel's Appointment and Remuneration: a. Policy for selection of Directors and determining Directors' independence and b. Policy on remuneration of Directors, Key Managerial Personnel and Senior Managerial Personnel are annexed to this report as "Annexure C and D", respectively. 12. Particulars of Loans, Guarantees or Investments made by the Company: During the Financial Year 2015-16, no loan or guarantee was given to any person or body corporate directly or indirectly, by the Company and investments made by the Company are within the limits under Section 186 of the Companies Act, 2013. 13. Particulars of Related Party Transactions u/s 188 of the Companies Act, 2013: There was no materially significant related party transaction made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, during the year, which may have a potential conflict with the interest of the Company at large. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at <http://jenburkt.com/Other_Info/20152016/Policy%20o> n%20RPT .pdf None of the Directors have any material pecuniary relationships or transactions vis-a-vis the Company. There is no related party transaction, during the Financial Year 2015-16 as covered under Section 188 of the Companies Act, 2013 and rules made there under. Particulars of transactions with related parties entered into at the arm length basis and in ordinary course of business during the Financial Year 2014-15 under Section 188 (1) of Companies Act, 2013 is presented in the prescribed Form No. AOC-2 and is annexed to this Report as "Annexure-E". With reference to Listing Agreement and Schedule V of SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations 2015, regarding the disclosure about the Company's "Related Party Transactions" during Financial Year 2015-16 in compliance with the Accounting Standard on "Related Party Disclosures":- The Company does not have any holding or subsidiary Company, hence, this disclosure is not applicable to the Company. 14. Corporate Social Responsibility (CSR) initiative: A brief note on the CSR policy of the Company and the initiative taken in that regard is set out as "Annexure-F" to this report, in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014. The CSR Policy of the Company is uploaded on the website of the Company at www.jenburkt.com 15. Annual Evaluation: Pursuant to Schedule-IV and other applicable provisions of the Companies Act, 2013, the Independent Directors carried out evaluation of the Chairman and Managing Director and the Whole Time Director and Chief Financial Officer, in their second separate meeting. They also evaluated the Board as a whole based on criteria as laid down. Pursuant to Section 134(3)(p) of the Companies Act, 2013, the Board evaluated its own performance, performances of its Committees and also theperformances of all the Independent Directors based on set criteria. The Nomination and Remuneration Committee, in terms of Section 178 (2) carried out evaluation of performances of every Director, based on its own criteria. In pursuance of applicable provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Independent Directors were evaluated individually by the Directors on the Board, excluding the Independent Directors being evaluated. 16. Other Information’s: a. Conservation of Energy and Technology Absorption, Foreign Exchange Earnings and Outgoings: The information on conservation of energy and technology absorption, foreign exchange earnings and outgoings is annexed as "Annexure G" to this report. b. Development and Implementation of Risk Management Policy: The Company has formulated a Risk Management Plan and has constituted a Risk Management Committee. The risks are classified in different areas such as competition, compliance, operational risks, etc. These risks are reviewed regularly to mitigate the same. c. Employee's details, pursuant to Section 197(12) Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as "Annexure H". 17. Report on Corporate Governance: A brief report on the Corporate Governance and the Auditor's certificate thereof is included separately in this Annual Report. 18. Green Initiative: Your Directors support the green initiative measures taken by the Ministry of Corporate Affairs and Securities and by the Exchange Board of India in order to be a part of the green initiative and to help in conserving trees for a greener India. With the active cooperation of all the shareholders, your Company shall be able to disseminate to you all the requisite documents and information electronically, i.e. through e-mails and to make payments of dividend directly into your bank accounts. Members are requested in this regard to: a. Register their e-mail address by filling in and signing the form attached at the end of this Report and submit with RTA/Company (for shares held in physical form) or with your Depository Participant (for shares held in demat form), as the case may be and b. To provide / update your bank details, for crediting dividend amount directly into your bank account through National Automated Clearing House (NACH). A separate form is attached in this regard, to be filled in and duly signed and sent to the RTA / Company. Kindly note that it is mandatory for the Company to mention your bank details on the dividend warrant / cheque, where NACH details are not registered with the Company / RTA. 19. Vigil Mechanism: The Vigil Mechanism of the Company as required u/s 177 of the Companies Act, 2013 and a Whistle Blower Policy of the Company, as required under Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for sheltered disclosure by the Directors / Employees of the Company, is in place. No event had occurred, during the year, invoking the Policy. No personnel were denied access to the Audit Committee. A Policy of the Company in this regard is uploaded on the website of the Company at www.jenburkt.com 20. Audit Committee: The Audit Committee of the Company comprises mainly of Independent Directors. All the recommendations made by the Audit Committee were accepted by the Board. A detailed note on Audit Committee is included in the Corporate Governance Report, which forms a part of this Annual Report. 21. Internal Financial Control: The Company has in place, adequate internal financial controls with reference to financial statements. During the year, no reportable material weaknesses in the operations were observed. For further details, kindly refer to internal financial control and their adequacy inthe Management Discussion and Analysis, in the Directors' Report. 22. Award and Recognition: Your Company was awarded "India's Most Promising & Valuable Company 2015" by pharma leaders at their 8th Annual Pharmaceuticals Leadership Summit & Pharma Leader Business Leadership Awards 2015. This function was held at Mumbai in December 2015. As selected by the jury of pharma leaders, a Certificate of excellence was also presented to the Company in recognition of outstanding and remarkable achievements in business leadership. 23. General: Your 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: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which may impact the going concern status and the Company's operations in future. However, a legal matter with National Pharmaceutical Pricing Authority at Hon'ble Supreme Court and five writ petitions against Government of India at Hon'ble Delhi High Court are pending, details of which are mentioned herein above. 5. No case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 6. As informed by the RTA, no shares are lying with them which are under demat suspense account or unclaimed suspense account, in terms of Schedule-V- Clause-F of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 24. Cautionary Statement: Certain statements in this Report that pertain particularly to Management Discussion and Analysis may contain contents that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statement, as important factors could influence the Company's operations such as Government Policies, local, political and economic development, risks inherent to the Company's growth and such other factors. 25. Appreciation: Your Directors express their gratitude and place on record the whole hearted efforts of the employees of the Company, for the sustained satisfactory business performance during the year under review and also place on record the sincere support of the stakeholders, in particular the shareholders, customers and suppliers. The Board also appreciates the contribution of the Independent Directors. For and on behalf of the Board For Jenburkt Pharmaceuticals Ltd. Ashish U. Bhuta (DIN:00226479) Chairman and Managing Director PLACE ; Mumbai, DATE : 30th May, 2016 |