DIRECTORS' REPORT TO THE MEMBERS OF VENMAX DRUGS AND PHARMACEUTICALS LIMITED, Your Directors are pleased to present the 26th Annual Report along with the audited accounts of your Company for the financial year ended March 31, 2015 Discussion on Financial Performance: The company recorded a Revenue of Rs.24259700/- and net loss of Rs.(799,237)/- as against turnover of Rs. 5868619/- in a net loss of Rs.(22,975,816)/- the previous year 2013-14 . The company is trying to achieve more turnovers in spite of lack of working capital facilities. Material changes and commitments if any affecting the financial position of the Company occurred between the end of the financial year to which this Financial Statements relate and the date of the report There have been no material changes and commitments, affecting the financial position of the Company which occurred during between the end of the financial year to which the financial statements relate and the date of this report. Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Company's operations in future There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. Share Capital The paid up Equity Share Capital as on March 31, 2015 was Rs.5,23,89,300.00. During the year under review, the Company has not issued shares with differential voting rights, neither granted stock options nor sweat equity. Dividend In view of accumulated losses, your Directors have not recommended any dividend on Equity Shares for the year under review. Transfers to Reserves Your Board of Directors does not appropriate any amount to be transferred to General Reserves during the year under review. Fixed Deposits During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under. Subsidiaries, Joint Ventures and Associate Companies The Company does not have any Subsidiary, Joint venture or Associate Company Particulars of Contracts & Arrangements with Related Parties There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. Particulars of Loans, Guarantees or Investments During the financial year 2014-15 the Company neither has, directly or indirectly, given any loan to its Directors nor extended any guarantee or provided any security in connection with any loan taken by them. Further, the Company has neither given any inter-corporate loan / advance nor made any investments in other companies. Number of Board Meetings held The Board of Directors duly met 6 times during the financial year from April 01, 2014 to March 31, 2015. The dates on which the meetings were held are as follows: (I) 12.05.2014, (ii) 28.07.2014, (iii) 03.09.2014, (iv) 25.10.2014 (v) 09.02.2015 and (vi) 31.03.2015. Directors and Key Managerial Personnel As the Independent Directors and Managing Director are not liable to retire by rotation, and additional director appointed by the Board is being regularized at this AGM, none of the Director of the Company is retiring by rotation in the ensuring AGM. Ms. G.S.V.Divya Jyothi (DIN 07240964) has been appointed as an Additional Director in the category of Non-Executive Independent Director in the Board Meeting held on March 31, 2015. In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, who shall hold office till the ensuing Annual General Meeting of the Company. The Board recommends the appointment of Dr. A.Ramakrishnaiah (DIN: 01641977) and Ms. G.S.V.Divya Jyothi (DIN: 07240964) as Independent Directors under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, not liable to retire by rotation and to hold office for the period as stated in their respective resolutions and the explanatory statement forming part of the Notice of the AGM. Mr. N.Krishnaiah (DIN: 07279009) has been appointed as an Additional Director in the category of Non-Executive Director in the Board Meeting held on 03.09, 2015. Mr.I.Seshagiri Rao (DIN: 02834417) resigned as Director of the Company with effect from August 31, 2015. Your Directors place on record their sincere appreciation of the valuable contribution made by of Mr. I.Seshagiri Rao to the Company. In the same Board Meeting held on August 31, 2015 Mr. N.V.Narender was appointed as Managing Director of the Company for a period of three years with effect from August 31, 2015, subject to the approvals of members of the Company. Brief details of Directors proposed to be appointed/re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of Annual General Meeting forming part of this Annual Report. Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013. The following persons were formally appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013: Mr. N.V.Narender, Managing Director Mr. N.Krishnaiah1, Chief Financial Officer 1 Mr..N.Krishnaiah was designated as CFO on 09.02.2015 and resigned on 25.08.2015 Declaration by Independent Directors The Independent Directors of the Company have submitted their declarations as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as per sub-section (6) of Section 149 of the Act. Familiarization programme for Independent Directors The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Independent Directors' Meeting The Independent Directors met on March 31, 2015, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Director and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Board Evaluation: The Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc. Directors Responsibility Statement as required under Section 134(5) of the Companies Act, 2013: Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Board of Directors states that: (a) In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) They 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 at the end of the financial year and of the profit and loss for that period; (c) They 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) They have prepared the annual accounts on a going concern basis; (e) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and (f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Nomination and Remuneration policy In compliance to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with the Stock Exchange, the Nomination and Remuneration Committee has recommended to the Board a Nomination and Remuneration Policy with respect to appointment / nomination and remuneration payable for the Directors, Key Managerial Personnel and senior level employees of the Company. The said policy has been adopted by the Board, and Composition of Nomination & Remuneration Committee and and further details are placed in the Corporate Governance Report. Audit Committee The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board. Risk Management The Risk Management Committee duly constituted by the Board had formulated a Risk Management Policy for dealing with different kinds of risks attributable to the operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedure will be reviewed periodically by the Audit Committee and the Board. Corporate Social Responsibility (CSR) Initiatives: Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company ie. (a) network of the Company to be Rs.500 crore or more; or (b) turnover of the company to be Rs.1,000 crore or more; or (c) net profit of the company to be Rs.5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of section 135 are not applicable to the Company. Extract of Annual Return In accordance with the provisions of Section 134(3(a) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is appended as Annexure-I to the Board's Report. Details relating to Remuneration of Directors, Key Managerial Personnel and employees The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure-II. Particulars of Employees There were no employees in the Company in the financial year 2014-2015 whose position is covered under Rule 5(2) The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Auditors Statutory Auditors M/s. Durga Prasad Associates (Firm reg. No. 0553615), Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the Annual General Meeting and being eligible, offers themselves for reappointment. At the ensuring Annual General Meeting M/s. Durga Prasad Associates, Chartered Accountants will be appointed for a period of five years i.e. till the conclusion of the 31st Annual General Meeting to be held in the calendar year 2020. In this regard, the Company has received a certificate from the auditors to the effect that if they were appointed, it would be in accordance with the provisions of Section 141 of the Act. The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Secretarial Auditors Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. B S S & Associates, Practicing Company Secretaries for conducting Secretarial Audit of the Company for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith as Annexure-III. Qualification by Secretarial Auditor The Secretarial Auditor's Report contains the qualifications, reservation or adverse remarks pertaining to non compliance of Section 203 of the Companies Act, 2013 in respect of appointment of Company Secretary as Key Managerial Person and pending of forms to be filed with RoC and Stock Exchange . The Board has made utmost effort for appointment of the Company Secretary as KMP but has not been able to appoint a Company secretary due to lack of suitability of the candidate to the profile of the Company in terms of Job profile and remuneration. Company is in the process of filing various e-forms with RoC and stock exchange Internal Auditors In pursuance of Section 138 of the Companies Act, 2013 read with rules made there under, the Board has appointed Mr. N. Krishnaiah, Chief Financial Officer of the Company as Internal Auditors of the Company to carry out internal auditing of books of accounts periodically. Internal Control Systems Your Company maintains adequate internal control systems in all areas of operation. Services of internal and external auditors are utilized from time to time, as also in-house expertise and resources. The Company continuously upgrades these systems in line with the best available practices. These reports and deviations are regularly discussed with Management Committee Members and actions taken whenever necessary. An independent Audit Committee of the Board reviews the adequacy of internal control. 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 Clause 49 of the Listing Agreement, the Board has adopted Whistle Blower Policy. This policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. The policy also provided adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases. Your Company hereby affirms that during the year no Director / employee have been denied access to the Chairman of the Audit Committee and that no complaints were received. Code of conduct The Company has adopted Code of Conduct for the Board and for the Senior level employees of the Company and they are complying with the said code. Information on Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and outgo Pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 3 of Companies (Accounts) Rules, 2014, the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo is appended hereto as Annexure-IV and forms part of the Board's Report. Corporate Governance The Company is committed to good corporate governance in line with the Listing Agreement and Provisions, Rules and Regulations of the Companies Act, 2013. The Company is in compliance with the provisions on corporate governance specified in the Listing Agreement with BSE. A certificate of compliance from Mr. JSR Durgaprasad, a Practicing Chartered Accountant and the report on Corporate Governance form part of this Directors' Report. Company's Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace The Company prohibits any form of sexual harassment and any such incidence is immediately investigated and appropriate action taken in the matter against the offending employee(s) based on the nature and the seriousness of the offence. The Company has a policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace (the Policy) and matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" notified by the Government of India vide Gazette Notification dated 23rd April, 2013. There was no case of sexual harassment reported during the year under review. Acknowledgments The Directors wish to place on record their gratitude to shareholders and thank the customers, vendors, franchisees, bankers, Department of Explosives and their Officials, Central Excise, Pollution Contro Boards and Commercial Tax Departments of respective States, hos of other State and Central Government Departments, Security Exchange Board of India and Stock Exchanges at Mumbai, Ahmedabad, Chennai, Delhi and Kolkata and others for their continued support to the Company's growth. The Directors also wish to place on record, their appreciation for the contribution made by the employees at all levels, for their sincerity, hard work, solidarity and dedicated support to the Company. By Order of the Board of Directors for Venmax Drugs and Pharmaceuticals Limited N.V.Narender Chairman Place: Hyderabad Date: 05.09.2015 |