Mar 31, 2018
Board''s Report
Dear Members,
We hereby present the 33rd Annual Report of your Company along with the audited financial statements for the financial year ended 31 March 2018.
1. Financial Summary
The financial performance of the Company for the financial year ended 31 March 2018 is given below:
(Rs, in million)
Particulars |
Standalone |
Consolidated |
||
2017-18 1,072.36 242.69 58.83 3.92 36.67 |
2016-17 |
2017-18 8,494.48 165.81 995.61 330.69 413.43 |
2016-17 |
|
Revenue from operations |
945.33 |
6,890.06 |
||
Other income |
190.67 |
110.77 |
||
Profit/(loss) from continuing operations before interest, depreciation tax & exceptional items |
(114.91) |
540.22 |
||
Less: Interest |
4.23 |
283.40 |
||
Less: Depreciation and amortisation expenses |
32.52 |
400.73 |
||
Profit/(loss) from continuing operations before tax & exceptional items |
18.24 11.61 |
(151.66) |
251.49 15.04 |
(143.91) |
Exceptional items |
- |
- |
||
Profit/(loss) before tax from continuing operations |
6.63 28.67 |
(151.66) |
236.45 134.57 |
(143.91) |
Tax expense |
- |
(5.27) |
||
Profit/(loss) from continuing operations after tax |
(22.04) 170.74 3,915.37 |
(151.66) |
101.88 105.47 4,100.95 |
(138.64) |
Profit/(loss) from discontinued operations |
151.54 |
(24.09) |
||
Gain on demerger of Human API operations |
- |
- |
||
Tax expense of discontinued operations |
- |
1.14 |
||
Profit / (loss) from discontinued operations after tax |
4,086.11 |
151.54 |
4,206.42 |
(25.23) |
Profit / (loss) for the year |
4,064.07 |
(0.12) |
4,308.30 |
(163.87) |
Other comprehensive income |
(3.73) (1,419.54) |
8.25 (1,419.54) 24.47 (0.36) |
||
Re-measurements on defined benefits plans |
0.70 |
(1.44) |
||
Fair value gain / (loss) from investment in equity instruments |
33.91 |
33.91 |
||
Exchange differences on translation of foreign operations |
- |
(34.85) |
||
Exchange differences on net investment in foreign operations |
- |
(40.79) |
||
Total other comprehensive income for the year |
(1,423.27) |
34.61 |
(1,387.18) |
(43.17) |
Total comprehensive income for the year |
2,640.80 |
34.49 |
2,921.12 |
(207.04) |
2. Business Performance Review
During the year, the Company positioned itself as a pure-play animal health company. At a strategic level, we made considerable progress in FY18 by executing our long-term strategy of becoming a global Animal Health player with successful integration of the various acquisitions globally over last 18 months. Our next level of growth will be driven by the commercialisation of our R&D products, both APIs and formulations.
During the financial year 2017-18, on a standalone basis, your Company''s revenues stood at Rs, 1315.05 million as against Rs, 1,136.00 million in 2016-17. The Company posted an EBITDA of Rs, (184.14) million in the year 2017-18 as against Rs, (305.58) million in 2016-17. The Company made a net profit of Rs, 4,064.07 million.
On a consolidated basis, your Company''s revenue for the year 2017-18 stood at Rs, 8,494.48 million as against Rs, 6,890.06 million in the financial year 2016-17. The Company posted an EBITDA of Rs, 871.00 million as against Rs, 578.32 million in 2016-17. EBITDA margin during the year stood at 10.3%, up by 190 bps over previous year.
A detailed analysis on the Company''s operational and financial performance for the year is covered under ''Management''s Discussion and Analysis Report'' which forms part of the Annual Report.
Business Overview
- India''s only FDA approved API manufacturing facility in Vizag
- USFDA approved facility for foray into United States -the largest animal health market - Key growth driver
- Strong presence in Europe, LATAM, Turkey, India, Africa & South East Asia
- Global R&D approach with localised manufacturing capabilities in regulatory geographies
- Recent foray into France & Ukraine
- Established relationship with top 10 veterinary companies with a steady customer base across US, Europe, LATAM & India
- Wide range of products, predominantly in Anthelmintics & emerging NSAID portfolio
Corporate Actions
De-merger of Human API
- During the financial year 2016-17, the Board of Directors of the Company approved a Composite Scheme of Arrangement (Scheme) between Strides Shasun Limited, the Company and Solara Active Pharma Sciences Limited wherein the Company''s human API business was proposed to be de-merged to Solara Active Pharma Sciences Limited with an appointed date of 1 October 2017. The Scheme envisaged issue of 1 equity share of '' 10/- each of Solara Active Pharma Sciences Limited for every 25 equity shares of '' 2/- each held in the Company.
- The shareholders through postal ballot /evoting and also at the National Company Law Tribunal (NCLT) convened meeting held on 26 December 2017 approved the Scheme. The Scheme was also approved by the Mumbai Bench of NCLT on 9 March 2018 and orders were issued on 22 March 2018.
Solara Active Pharma Sciences Limited issued shares to the shareholders of the Company on 11 April 2018. The equity shares of Solara were listed on BSE Limited and National Stock Exchange of India and commenced trading on June 27, 2018.
3. Dividend
The Board of Directors of your Company had approved payment of an interim dividend @ 10% on equity share of '' 2 each (''0.20 per equity share) which was declared in the month of November 2017 and same was paid in first week of December 2017. The Board is not recommending any final dividend and the interim dividend of '' 0.20 per equity share be treated as the final dividend for the financial year 2017-18.
In accordance with Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), your Company has formulated a dividend distribution policy which ensures a fair balance between rewarding its Shareholders and retaining enough capital for the Company''s future growth. This Policy is available on the Company''s website: www.sequent.in.
4. Transfer to reserves
During the financial year, the Company has not made any transfer to the reserves.
5. Share Capital
As on date, the authorized share capital of the Company is Rs, 500,000,000/- divided into 250,000,000 equity shares of Rs, 2/- each.
The issued, subscribed and paid up equity capital of the Company as on date is Rs, 487,472,390 divided into 243,736,195 equity shares of Rs, 2/- each.
During the year ended 31 March 2018, the Company has not allotted any equity shares.
The Company has not allotted equity shares after the balance sheet date i.e. 31 March 2018.
6. Subsidiaries
As at 31 March 2018, the Company has 21 subsidiaries, out of which 7 Companies are wholly owned subsidiaries and the Company does not have any joint ventures/ associate companies.
Changes in subsidiaries during the financial year ended 31 March 2018:
Alivira France |
Alivira Animal Health Limited acquired majority stake in "Alivira Franceâ through its subsidiary Alivira Animal Health Limited (Ireland) |
SeQuent Global |
Ceased to be a subsidiary with effect |
Holdings Limited |
from 6 April 2017 |
SeQuent Scientific |
Ceased to be a subsidiary with effect |
Pte Limited |
from 8 January 2018 |
Note: Bremer Pharma GMBH was acquired on 17 April 2018 by Alivira Animal Health Limited, Ireland a subsidiary of Alivira Animal Health Limited.
Accounts of Subsidiaries
In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which forms part of the Annual Report. Statement containing salient features of the financial statements of Company''s subsidiaries, joint ventures and associate companies as required in Form AOC-1 is enclosed as annexure 1 to this report.
The audited consolidated accounts and cash flow statement, comprising of the Company and its subsidiaries form part of this report. The Auditors Report on the audited consolidated accounts is attached and the same is unqualified.
Further financial statements together with related reports and information of each of the subsidiary companies of the Company have been placed on the website of the Company www.sequent.in.
7. Annual Return
Extract of Annual Return in terms of section 92(3) of the Companies Act, 2013 in Form MGT- 9 is enclosed as annexure 2 to this Report.
8. Public Deposit
During the financial year 2017-18, the Company has not accepted or renewed any public deposits in terms of sections 73 and 74 of the Companies Act, 2013 and rules framed thereunder.
9. Board of Directors & Key Managerial Personnel
Board Composition
As on 31 March 2018, the Board comprises of 7 Directors consisting of 2 Executive Directors,
2 Non-executive Directors and 3 Independent Directors. Chairman of the Board is an Independent Director.
Mr. KEC Rajakumar (DIN: 00044539) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Brief profile of Mr. KEC Rajakumar is given in the corporate governance report which forms part of this report.
Your director recommended their appointment/ reappointment to the members of the Company.
There were no changes in Key Managerial Personnel of the Company during the year.
As on date the Company has the following Key Managerial Personnel:
- Mr. Manish Gupta - Managing Director (DIN: 06805265)
- Mr. Sharat Narasapur - Joint Managing Director (DIN: 02808651)
- Mr. Tushar Mistry - Chief Financial Officer
- Mr. Krupesh Mehta - Company Secretary
The Company has received necessary declarations from Independent Director(s) that they meet the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013.
10. Meetings of the Board
During the year ended 31 March 2018, 4 (Four) Board Meetings were held. These meetings were
held on May 23, 2017, August 3, 2017, November 9, 2017 and February 9, 2018.
11. Policy on Directors Appointment and Remuneration
The Directors of the Company are appointed by members at the General Meetings of the Company.
As regards the appointment and tenure of Independent Directors, the Company has adopted the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015.
The Nomination and Remuneration Committee has adopted a policy namely SeQuent Policy on Nomination and Remuneration ("the Policy") in adherence to Section 178(3) of the Companies Act, 2013 read with the rules and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy shall act as a guideline on matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel and other employees of the Company. The policy is given as annexure 3 to this report.
12. Evaluation of Board of Directors
Pursuant to provisions of schedule IV of the Companies Act, 2013 and rules thereto and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a policy called as SeQuent Board Performance Evaluation Policy ("the Policy"). Based on this the Company has prepared a questionnaire to carry out the evaluation of performance of every Director including the Independent Directors at regular intervals and at least on an annual basis.
The questionnaire is structured to embed various parameters based on which the performance of a Board can be evaluated. Customised questionnaires are formulated for evaluating Independent Directors, Non-Executive Directors, Whole-time Directors, Chairperson of the Board and the Board, as a whole.
Based on the policy the evaluation was conducted by the Company.
Detailed data on composition of Board of Directors, Committees of Board of Directors, meeting details, charter for each committee and attendance details forms part of the Corporate Governance Report.
13. Audit Committee
The composition of Audit Committee of the Company is given below:
- Dr. Gopakumar G Nair - Chairman
- Dr. Kausalya Santhanam - Member
- Mr. Narendra Mairpady- Member
All the recommendations given by the Audit Committee were accepted by the Board of Directors of the Company.
14. Auditors Statutory Auditors
At the Annual General Meeting held on 29 September 2014, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm''s Registration Number: 008072S) were appointed as Statutory Auditors of the Company for a period of 5 years from 29th Annual General Meeting till the conclusion of 34th Annual General Meeting.
There are no qualifications, observations or adverse remarks in the Audit Report issued by the Statutory Auditors of the Company for financial year ended 31 March 2018.
Reporting of Fraud
None of the Auditors have reported any frauds as specified as specified under Section 143 of the Companies Act, 2013 (including and statutory modification or re-enactment for the time being in force).
Cost Auditor
Pursuant to section 148(1), the Company needs to maintain cost records and accordingly your Company has made and maintained cost audit record.
Pursuant to section 148(3) and Companies (Cost records and audit) Rules, 2014, M/s. Kirit Mehta & Co, practicing Cost Accountants, were appointed as the cost auditor for the financial year 2017-18. The Cost Audit Report for the financial year ended would be filed within the due date prescribed by law.
The remuneration proposed to be paid to the Cost Auditor forms part of the Notice of the Annual General Meeting for the approval for the Shareholders. The Board recommends the same for approval of the Members at the ensuing Annual General Meeting.
Secretarial Audit Report
Pursuant to the provisions of section 204 (1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Nilesh Shah, Practicing Company Secretary (Certificate of Practice No: 2631) to carry out the Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report is annexed as annexure 4 to this Report. There are no qualifications, observations or adverse remarks in the Secretarial Audit Report.
15. Particulars of Employees
The statement containing particulars of employees as required under section 197(12) of the Companies
Act, 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as an annexure 5 forming part of this report except the report as per rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. In terms of section 136 of the Companies Act, 2013, the said report is open for inspection at the registered office of the Company during working hours and any member interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company.
16. Vigil Mechanism / Whistle Blower Policy
Pursuant to provisions of section 177(9) of the Companies Act, 2013 and Listing Regulations, the Company has established Whistle Blower Policy, for the directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Company''s code of conduct.
It also provides adequate safeguards against the victimisation of employees who avail this mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. The Board amended the existing Whistle Blower Policy to extend the applicability of the Policy to all the stakeholders of the Company and incorporate the applicable provisions of the listing regulations in the policy and confirm that no personnel have been denied access to the Audit Committee.
17. Particulars of loans, guarantees or investments by the Company
Details of loans, Guarantees and Investments, covered under the provisions of section 186 of the Act are given in the notes to the financial statements.
18. Particulars of Contracts or Arrangements with Related Parties
All the transactions entered with related parties are in the ordinary course of business and on arm''s length basis.
Further, there are no materially significant related party transactions with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.
The particulars of material contracts or arrangements with related parties referred to in Section 188(1), as prescribed in form AOC-2 of the rule 8(2) of Companies (Accounts) Rules, 2014 is given as an annexure 6.
All transactions with the related parties are disclosed in Note 45 to the financial statements in the Annual Report.
19. Corporate Social Responsibility
As per section 135(1), the Company has constituted a Corporate Social Responsibility Committee comprising of Mr. Manish Gupta, Dr. Gopakumar G Nair and Dr. Kausalya Santhanam as its members. The Company has adopted a policy on corporate social responsibility.
The disclosure as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure 7 of this report.
20. Risk Management
The Company has a risk management framework for identifying and managing risks. Additional details are provided in the ''Management Discussion and Analysis'' report forming part of this report.
Internal Financial controls
The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.
Internal Financial controls have been designed to provide reasonable assurance with regard to the recording and providing reliable financial and operational information complying with applicable Accounting Standards.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015.
21. Significant and material orders passed by the Regulators or Courts or Tribunals
There are no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status of the Company and its future operations.
22. Directors'' Responsibility Statement
In accordance with section 134(5) of the Companies Act, 2013, the Directors of your Company to the best of their knowledge and ability confirm that:
(a) in the preparation of the 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 of the company for that period;
(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) the annual accounts of the Company have been prepared 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.
(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.
23. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings/ Outgo and Research & Development
The particulars as prescribed under section 134(3) (m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as an Annexure 8 to this Report.
24. Policy on prevention of Sexual Harassment at work place
Your 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 & Redressal)
Act, 2013. A committee has been set up to redress complaints received regarding sexual harassment. All permanent employees of the Company and that of its subsidiaries are covered under this policy.
25. Corporate Governance
The Company has complied with all the mandatory requirements of corporate governance specified by the Securities and Exchange Board of India ("SEBI") through and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Regulations"). As per regulation 34(3) and schedule V of the regulations, a separate report on corporate Governance forms part of the Annual Report of the Company. A certificate from the Statutory Auditors of the Company regarding compliance with Corporate Governance requirements as stipulated in the regulations and listing agreement entered with stock exchange also forms part of the Annual Report.
The confirmation from Mr. Manish Gupta, Managing Director, regarding compliance with the code of Business Conduct and Ethics forms part of the Report on Corporate Governance.
26. Management Discussion and Analysis
Pursuant to regulation 34 (3) and schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis on the Company''s operational and financial performance for the year is covered under a separate section Management Discussion and Analysis Report which forms part of this Annual Report.
27. Employee Stock Option Scheme
The Company has formulated an employee stock option plan titled "SSL ESOP Scheme 2010 " (the "ESOP 2010") in accordance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the "SEBI ESOP Guidelines") and the scheme is administered through a trust. During the year the Nomination and Remuneration Committee has granted 50,000 options to identified employees and 189,200 options lapsed due to resignation of employees. As at 31 March 2018, 24,41,000 Stock options are outstanding.
The ESOP scheme of the Company is in Compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
Further disclosure under section 62 of the Companies Act, 2013 read with rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Sha
Based Employee Benefits) Regulations, 2014 given as an annexure 9 to this report.
28. Transfer of Equity Shares of the Company to the Investor Education and Protection Fund (IEPF) Account
Section 124(6) of the Companies Act, 2013 ("Act") read with the Investor Education and Protection Fund Authority) Accounting, Audit, Transfer and Refund), Rules, 2016 for transfer of unclaimed dividend and transfer of Shares to IEPF in respect of which dividend remains unclaimed for seven consecutive years. The Company has also published Notices in newspapers and sent individual communication to the concerned shareholders at their registered address whose shares are liable to be transferred to IEPF. Kindly note that the Company has transferred unclaimed Shares to IEPF.
Shareholders/claimants whose shares, unclaimed dividend, have been transferred to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on www.iepf.gov.in).
29. Appreciation
Your Directors place on record their sincere gratitude and place on record their appreciation for all the employees at all levels for their staunch dedication and highly motivated performance across the globe which contributed greatly for persistent performance of the company.
Your Directors also sincerely thank all the stakeholders, medical professionals, business partners, government & other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, cooperation and support.
Note: The information given herein above is as on 31 March 2018, unless otherwise stated.
For and on behalf of the Board of Directors
Place: Mumbai Dr. Gopakumar G Nair
Date: 09 August 2018 Chairman
Mar 31, 2017
BOARDâS REPORT
Dear Members,
The Directors are pleased to present the Thirty second Annual Report along with the Audited Financial Statements of the Company for the financial year ended March 31, 2017.
1. FINANCIAL SUMMARY
The Financial Performance of the Company (Standalone) for the Financial Year ended March 31, 2017 is given below:
(Rs, in million)
Particulars |
2016-17 |
2015-16 |
Total revenue |
3,922.13 |
4,086.71 |
Other income |
200.94 |
155.53 |
Profit/ (loss) before interest and depreciation tax |
335.16 |
510.78 |
Less : Interest |
83.60 |
164.42 |
Less : Depreciation and amortisation expenses |
251.68 |
241.80 |
Profit/(loss) before tax |
(0.12) |
104.56 |
Tax Expenses - Current tax |
- |
- |
- Deferred tax |
- |
0.69 |
Profit/(loss) after tax |
(0.12) |
103.87 |
2. BUSINESS PERFORMANCE REVIEW
During the financial year 2016-17, on a standalone basis, your Company''s revenues stood at Rs, 3922.13 Million as against Rs, 4086.71 Million in 2015-16. The Company posted an EBITDA of Rs, 134.22 Million in the year as against Rs, 355.25 Million in 2015-16. The Company made a net loss of Rs, 0.12 Million.
On a consolidated basis, your Company''s revenue for the year 2016-17 stood at Rs, 9150.81 Million as against Rs, 6214.10 Million in 2015-16. The Company posted an EBITDA of Rs, 881.35 Million for the year 2016-17 as against Rs, 551.77 Million in 2015-16. On a consolidated level, the Company made a loss of Rs, 163.87 Million.
Business Overview
1. Human API
k. Successful EDQM inspection at our facility in Mahad
k. Filings - 7 CEPs, 3 USDMFs, 1 WHO
2. Animal Health
- Vizag facility becomes India''s 1st USFDA approved Animal Health API facility
k. Forayed into vaccines with IDT Biologika, Germany for marketing vaccines in India
k. Successfully integrated operations of acquired
businesses in Brazil (Evance), Spain & Mexico (Karizoo)
k. Transitioned business in Turkey to new GMP regime
k. Forayed into Ukraine and initiated product trials
k. Expanded to 5 new countries taking the total footprint to 95 countries
k. Launched 3 new formulations in Europe & 28 products across other key markets
2.1 R&D
k. Initiation of global formulations R & D program in animal health business,5 projects across Spain and India
k. Filed 2 CEPs and 6 US VMFs for key APIs
k. Received 20 product registrations in EU countries & 41 in emerging markets
k. Filed 52 products in emerging market
CORPORATE ACTIONS
The Board of Directors at their Meeting held on February
3, 2017 had approved in-principle demerger of Human API Business and divesting Women Healthcare business to focus on Alivira (Integrated Animal Healthcare business) for disproportionate value creation.
Having reviewed the strategic success in building Alivira as India''s largest veterinary company with annual run-rate revenues of US $ 120 million (~? 800 crores) along with future opportunities therein, the Board felt that the Management of Sequent should focus on animal healthcare and free up management time and capital from the other two businesses.
De-Merger of Human API business:
- Sequent''s Human API business primarily driven out of its Mangalore, Mahad and Mysore facilities contribute ~ 27% of the top-line on a consolidated basis.
k. While the differentiated business model of focusing on old, small volume molecules make the business highly profitable, with annualized revenue of 300 crores, the business is subscale. Also, being a B2B business, it needs a differentiated strategic direction to grow and deliver value.
- Further, the ever-evolving regulatory landscape exposes its business from concentration risk at one USFDA approved plant
k. The Board felt the need for Management to focus on scaling up Alivira business and to this direction, it was decided to divest the Human API business which though profitable, will require significant CapEx to build scale and exigencies.
k. As part of the Scheme of Arrangement, the commodity API business of Strides Shasun Limited, a promoter group Company, is also proposed to be carved out into Solara Active Pharma Sciences Limited, (SAPS) thereby providing critical size to this business.
k. This combination will catapult SAPS to be one of the largest standalone API companies in the country supplying commodity and niche APIs globally. The business will create value for its stakeholders with its differentiated strategy and highly compliant manufacturing facilities.
k. The Newly formed API Company will have five manufacturing sites having key global regulatory approvals.
On March 20, 2017, based on the recommendation of the Audit Committee, the Board of Directors approved
a Composite Scheme of Arrangement to be entered into between the Company, Strides Shasun Limited (''Strides'') and Solara Active Pharma Sciiences Limited (SAPS) and their respective shareholders and Creditors (the ''Scheme'') under Sections 230-232 of the Companies Act, 2013 for the purposes of effecting the said demerger. The Board of Directors also approved the share entitlement ratio of one equity shares of Rs, 10/- each of SSL for every 25 equity shares of Rs, 2/- each held by them in Sequent. S.R. Batliboi & Co. and Pricewaterhouse & Co. LLP provided a joint valuation report on the share entitlement ratio, while Key Note Corporate Services Limited provided the fairness opinion in relation to the aforesaid share entitlement ratio.
The salient features of the Scheme are:
a) The equity shares of SAPS will be listed in the BSE Limited and the National Stock Exchange of India Limited.
b) Every shareholder of Strides will get one equity shares of Rs, 10/- each of SAPS for every six equity shares of Rs, 10/- each held by them in Strides.
c) Every shareholder of the Company will get one equity shares of Rs, 10/- each of SAPS for every 25 equity shares of Rs, 2/- each held by them in the Company.
d) The appointed date for the Demerger will be October 1, 2017
e) Based on the recommended Share Entitlement Ratio, Strides shareholders and Sequent shareholders will hold 60% and 40% respectively of SAPS
f) The Scheme is subject to statutory approvals including from the shareholders and creditors of the Company, Strides and SAPS, Stock Exchanges where the shares of Strides and Sequent are listed, the Securities and Exchange Board of India, National Company Law Tribunal and the Competition Commission of India.
As on date, the Company has received approval from Competition Commission of India,
Securities and Exchange Board of India, National Stock Exchange of India Limited and BSE Limited.
The Company is in the process of making an application to National Company Law Tribunal.
Divestment of NAARI
NAARI was acquired by the Company in January 2016, which is a vertically integrated steroid and hormone manufacturer specialising in high actives and complex chemistry. During the tenure, the Company had completed the first phase of re-orienting the business towards regulated markets with the first filings made both for US and EU markets. However, NAARI business requires significant investments for next three years in ramping up the R&D program/capacities.
In view of the above and the further requirement of cost in the NAARI, the Board considered a proposal received from a Promoter Group Company for buying the entire stake held by the Company in NAARI for a consideration of Rs, 110,000,000 (Rupees Eleven crores)
The Company has already obtained shareholders approval through postal ballot on March 22, 2017. Definitive agreements have been entered into with the Buyer and the transaction is expected to achieve closure in Q2 of FY 2018.
3. DIVIDEND
The Board of Directors of the Company have not recommended any dividend for the financial year March 31, 2017 (Previous Year; Nil per equity share).
In accordance with Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), your Company has formulated a Dividend Distribution Policy which ensures a fair
balance between rewarding its Shareholders and retaining enough capital for the Company''s future growth. This Policy is available on the Company''s website: www.Sequent.in.
4. TRANSFER TO RESERVES
During the Financial Year , the Company has not made any transfer to the reserves.
5. SHARE CAPITAL
As on date, the authorized share capital of the Company is Rs, 500,000,000 divided into 250,000,000 equity shares of Rs, 2 each.
The issued, subscribed and paid up equity capital of the Company as on date is Rs, 487,472,390 divided into 243,736,195 equity shares of Rs, 2 each.
During the year ended March 31, 2017, the Company has allotted equity shares as under:
Date of allotment |
No. of Shares |
Allottee category |
Remarks |
Issue price |
September |
5,500,000 |
Promoter |
On |
Rs, 95 |
23, 2016 |
Group Entities |
conversion of convertible warrants |
The Company has not allotted equity shares after the balance sheet date i.e. March 31, 2017.
6. SUBSIDIARIES
As at March 31, 2017, the Company has 24 subsidiaries, out of which 11 Companies are wholly owned Subsidiaries and the Company does not have any Joint Ventures / Associate Companies.
Changes in subsidiaries during the financial year ended March 31, 2017:
Alivria Saude Animal Health, Brazil Participacoes LTDA, Brazil |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the Company acquired 100% stake in Alivira Saude Animal Health, Brazil Participacoes LTDA, Brazil through its subsidiary Alivira Animal health Limited , Ireland. |
Interchange Veterinaria Industrial E |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
Comercia S.A., Brazil (Interchange). |
Company acquired 70% stake in Interchage, Brazil through its subsidiary |
Vila Vina Participacions S.L., Spain |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
(Vila Vina) |
Company acquired 60% stake in Vila Vina, Brazil through its subsidiary |
Laboratorios, Karizoo S.A, Spain |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
(âKarizoo S.Aâ) |
Company acquired 60% stake in Karizoo S.A, Spain through its subsidiary Vila Vina (Spain). |
Comercial Vila Veterinaria DE Lledia |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
S.L. Spain (âCoomercial Vinaâ) |
Company acquired 60% stake in âCommercial Vinaâ, Spain through its subsidiary Vila Vina (Spain)â. |
Phytotherapic Solutions S.L. Spain |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
(âPhytotherapicâ) |
Company acquired 60% stake in âPhytotherapicâ through its subsidiary Vila Vina (Spain). |
Labaratorios Karizoo, S.A. D.E C.V. |
Alivira Animal Health Limited, India, a wholly owned subsidiary of the |
Mexico (âKarizoo Mexicoâ) |
Company acquired 60% stake in âKarizoo Mexicoâ through its subsidiary Vila Vina (Spain). |
Alivira UA Limited |
Alivira Animal Health Limited incorporated Alivira UA Limited on September 30, 2016 |
Accounts of Subsidiaries
In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. Statement containing salient features of the financial statements of Company''s subsidiaries, joint ventures and associate companies as required in Form AOC-1 is enclosed as Annexure 1 to this Report.
The Audited Consolidated Accounts and Cash Flow Statement, comprising of the Company and its subsidiaries form part of this Report. The Auditors Report on the Audited Consolidated Accounts is attached and the same is unqualified.
Further financial statements together with related reports and information of each of the subsidiary companies of the Company have been placed on the website of the Company www.Sequent.in.
7. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in terms of Section 92(3) of the Companies Act, 2013 in Form MGT- 9 is enclosed as Annexure 2 to the Directors'' Report.
8. PUBLIC DEPOSIT
During the financial year 2016-17, the Company has not accepted or renewed any public deposits in terms of Sections 73 and 74 of the Companies Act, 2013 and rules framed there under.
9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Board Composition
As on March 31, 2017, the Board comprises of 7 Directors consisting of 2 Executive Directors, 5 Non-
Sr. No. |
Name of Director |
Designation |
Date of Appointment / Resignation /Retirement |
Resignation / Retirement |
|||
1. |
Dr. Gautam Kumar Das |
Joint Managing Director |
January 07, 2017 |
2. |
Mr. Kannan P R |
Chief Financial Officer |
February 10, 2017 |
3. |
Mr. Preetham Hebbar |
Company Secretary |
February 10, 2017 |
Appointment |
|||
1. |
Mr. Sharat Narasapur |
Joint Managing Director |
January 08, 2017 |
2. |
Mr. Tushar Mistry |
Chief Financial Officer |
February 11, 2017 |
3. |
Mr. Krupesh Mehta |
Company Secretary |
February 11, 2017 |
executive Directors out of whom 3 are Independent Directors. Chairman of the Board is an Independent Director.
Dr. Gautam Kumar Das retired from post of Joint Managing Director with effect from January 07, 2017 and Mr. Sharat Narasapur (DIN: 02808651) was appointed as Joint Managing Director w.e.f January 08, 2017 for a period of 3 years.
Dr. S Devendra, Director (DIN: 00050440) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Brief profiles of Dr. S Devendra and Mr. Sharat Narasapur are given in the corporate governance report which forms part of this report.
Your directors recommend their appointment/ reappointment to the members of the Company.
As on date the Company has the following Key Managerial Personnel:
- Mr. Manish Gupta - Managing Director (DIN: 06805265)
- Mr. Sharat Narasapur - Joint Managing Director (DIN: 02808651)
- Mr. Tushar Mistry - Chief Financial Officer
- Mr. Krupesh Mehta - Company Secretary
During the year, the following changes took place in Key Managerial Personnel of the Company.
Your Company has received necessary declarations from Independent Director(s) of the Company that they meet the criteria of independence laid down in Section 149 of the Companies Act, 2013.
10. MEETINGS OF THE BOARD
During the year ended March 31, 2017, 7 (Seven) Board Meetings were held. These meetings were held on April 4, 2016, May 14, 2016, August 12, 2016, November 10, 2016, February 3, 2017, February 10, 2017 and March 20, 2017.
11. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Directors of the Company are appointed by Members at the General Meetings of the Company.
The appointment and tenure of Independent Directors are governed by the provisions of the Companies Act, 2013 read with the rules thereto and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015.
The Nomination and Remuneration Committee at its meeting held on July 30, 2015 has adopted a policy namely Sequent Policy on Nomination and Remuneration (âthe Policyâ) in adherence to Section 178(3) of the Companies Act, 2013 read with the rule thereto and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy shall act as a guideline on matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel and other employees of the Company. The policy is given as Annexure 3 in this report.
12. EVALUATION OF BOARD OF DIRECTORS
Pursuant to provisions of Schedule IV of the Companies Act, 2013 and rules thereto and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a policy called as Sequent Board Performance Evaluation Policy (âthe Policyâ). Based on this the Company has prepared a questionnaire to carry out the evaluation of performance of every Director including the Independent Directors at regular intervals and at least on an annual basis.
The questionnaire is structured to embed various parameters based on which the performance of a Board can be evaluated. Customized questionnaires are formulated for evaluating Independent Directors
Non-Executive Directors, Whole-time Directors, Chairperson of the Board and the Board, as a whole.
Based on the policy the evaluation was conducted by the Company.
Detailed data on composition of Board of Directors, Committees of Board of Directors, Meeting details, charter for each committee and attendance details forms part of the Corporate Governance Report.
13. AUDIT COMMITTEE
The Composition of Audit Committee of the Company is given below:
- Dr. Gopakumar G Nair - Chairman
- Dr. Kausalya Santhanam - Member
- Mr. Narendra Mairpady- Member
Board of the Company has accepted all recommendations given by the Audit Committee.
14. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Nilesh shah, Practicing Company Secretary to carry out the Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report is annexed as Annexure 4 to the Board''s Report. There are no qualifications, observations or adverse remarks in the Secretarial Audit Report.
15. AUDITORS Statutory Auditors
At the Annual General Meeting held on September 29, 2014, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm''s Registration Number: 008072S) were appointed as Statutory Auditors of the Company for a period of 5 years from 29th Annual General Meeting till the conclusion of 34th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the members in the ensuing Annual General Meeting of the Company.
Cost Auditor
Pursuant to Section 148(3) and Companies (Cost records and audit) Rules, 2014, M/s. Kirit Mehta & Co practicing Cost Accountants, was appointed as the Cost Auditor for the financial year 2016-17. The due date for filing the Cost Audit Reports in XBRL mode for the financial year ended March 31, 2016 was September 30, 2016 and the Cost Audit reports were filed by the Cost Auditor on September 28, 2016.
The due date for filing the Cost Audit Reports for the financial year ended March 31, 2017 is September 30, 2017
16. AUDIT REPORT
There are no qualifications, observations or adverse remarks in the Audit Report issued by the Statutory Auditors of the Company for financial year ended March 31, 2017.
17. PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as an Annexure 5 forming part of this report except the report as per Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In terms of Section 136 of the Companies Act, 2013, the said report is open for inspection at the Registered Office of the Company during working hours and any member interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company.
18. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to provisions of Section 177(9) of the Companies Act, 2013 and Listing Regulations, the Company has established the Vigil Mechanism, as part of the Whistle Blower Policy, for the Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct.
It also provides adequate safeguards against the victimization of employees who avail this mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
The Board amended the existing Whistle Blower Policy to extend the applicability of the Policy to all the stakeholders of the Company and incorporate the applicable provisions of the Listing Regulations in the Policy and confirm that no personnel have been denied access to the Audit Committee.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of loans, Guarantees & Investments, covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions entered with related parties are in the ordinary course of business and on arm''s length basis.
Further, there are no materially significant related party transactions with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.
The particulars of material contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC-2 of the rule 8(2) of Companies (Accounts) Rules, 2014 is given as an Annexure 6.
All transactions with the related parties are disclosed in Note 28.2 to the financial statements in the Annual Report.
21. CORPORATE SOCIAL RESPONSIBILITY
As per section 135(1), the Company has constituted a Corporate Social Responsibility Committee comprising of Mr. Manish Gupta, Dr. Gopakumar G Nair and Dr. Kausalya Santhanam as its members.
The Company adopted a policy on Corporate Social Responsibility on May 14, 2016.
The disclosure as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure 7 of this report.
22. RISK MANAGEMENT
The Company has a risk management framework for identifying and managing risks. Additional details are provided in the ''Management Discussion and Analysis'' report forming part of this report.
23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status of the Company and its future operations.
24. DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act, 2013, the Directors of your Company to the best of their knowledge and ability confirm that:
(a) in the preparation of the 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 of the company for that period;
(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 of the Company have been prepared 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.
(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.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS/ OUTGO AND RESEARCH & DEVELOPMENT
The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as an Annexure 8 to the Directors'' Report.
Detailed write-up on Research and Development activity forms part of the annexure to the Directors'' Report.
26. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
Your 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 & Redressal)
Act, 2013. A committee has been set up to redress complaints received regarding sexual harassment. All Permanent employees of the Company and that of its subsidiaries are covered under this policy.
27. CORPORATE GOVERNANCE
Your Company has complied with all the mandatory requirements of Corporate Governance specified by the Securities and Exchange Board of India (âSEBIâ) through and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âRegulationsâ). As per Regulation 34(3) and Schedule V of the Regulations, a separate Report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the Statutory Auditors of the Company regarding compliance with Corporate Governance requirements as stipulated in the regulations and listing agreement entered with Stock Exchange also forms part of the Annual Report.
The confirmation from Mr. Manish Gupta, Managing Director , regarding compliance with the Code of Business Conduct and Ethics forms part of the Report on Corporate Governance.
28. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 (3) and Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis on the Company''s operational and financial performance for the year is covered under a separate section Management Discussion and Analysis Report which forms part of this Annual Report.
29. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated an employee stock option plan titled âSSL ESOP Scheme 2010 â (the âESOP 2010â) in accordance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the âSEBI ESOP Guidelinesâ) and the scheme is administered through a trust. As on date 1,790,000 shares have been issued to the trust. During the year the Nomination and Remuneration Committee has granted 345,000 options to identified employees and 60,000 options lapsed due to resignation of employees. As at March 31, 2017, 2,925,000 Stock options are outstanding.
The ESOP scheme of the Company is in Compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
Further disclosure under Section 62 of the Companies Act, 2013 read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee Benefits) Regulations, 2014 given as an Annexure 9 to this Report.
30. APPRECIATION
Your Directors place on record their sincere gratitude and place on record their appreciation for all the employees at all levels for their staunch dedication and highly motivated performance across the globe which contributed greatly for persistent performance of the company
Your Directors also sincerely thank all the stakeholders, medical professionals, business partners, government & other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, cooperation and support.
Note: The information given herein above is as on March 31, 2017, unless otherwise stated.
For and on behalf of the Board of Directors
Sd/-
Place: Thane Dr. Gopakumar G Nair
Date: August 3, 2017 Chairman
Mar 31, 2016
Dear Members,
We hereby present the 31st Annual Report of your Company along with the Audited Financial Statements of the Company for the financial year ended March 31, 2016.
1. FINANCIAL SUMMARY
The Financial Performance of the Company (Standalone) for the Financial Year ended March 31, 2016 is given below:
(Rs. in mn)
Particulars |
2015-16 - |
2014-15 |
Revenue from Operations |
3967.74 |
4,448.16 |
Other Income |
115.77 |
32.21 |
Total Income |
4,083.51 |
4,480.37 |
Profit/ (Loss) before Interest, Depreciation Tax & Exceptional Items |
484.22 |
638.37 |
Less: Interest |
164.42 |
474.56 |
: Depreciation and amortization expenses |
242.89 |
263.75 |
Profit/(Loss) Before Tax & Exceptional Items |
76.91 |
(99.94) |
Exceptional Items |
(5.40) |
529.99 |
Profit/(Loss) Before Tax |
71.51 |
430.05 |
Provision for - Current Tax |
- |
16.98 |
- Deferred Tax |
0.69 |
- |
Profit/(Loss) after Tax |
70.82 |
413.07 |
2. BUSINESS PERFORMANCE REVIEW
During the financial year 2015-16, on a standalone basis, your Company''s revenues stood at Rs. 4,083.51 mn as against Rs. 4,480.37 mn in 2014-15. The Company posted an EBITDA of Rs. 484.22 mn in the year as against Rs. 638.37 mn in 2014-15. The Company made a net profit of Rs. 70.82 mn.
On a consolidated basis, your Company''s revenue for the year 2015-16 stood at Rs. 6,451.22 mn as against Rs. 4,753.23 mn in 2014-15. The Company posted an EBITDA of Rs. 735.17 mn for the year 2015-16 as against Rs. 304.56 mn in 2014-15. On a consolidated level, the Company made a loss of Rs. 197.85 mn.
A detailed analysis on the Company''s operational and financial performance for the year is covered under ''Management''s Discussion and Analysis Report'' which forms part of the Annual Report.
Business Overview
Human API
-. Registered a growth of 69.8% during the year 2015-16 as against previous year 2014-15 k. Received an Establishment Inspection Report from US FDA for the API facility at Mangalore
Animal Health
-. Strategic progression from API driven model to formulation led business
-. Expansion to new geographies globally and strengthened presence in existing markets
Analytical Services
-. Inauguration of GLP (Good Laboratory Practices) compliant Analytical Services Centre at Bengaluru
-. Successful completion of USFDA Audit at Mangalore Centre
R&D
-. Filing of 7 USDMFs and 4 CEPs/ EDMFs
-. Initiation of formulation development program in animal health business
- Acquisition of IP in US and EU for 3 products -Felbamate, Mefenamic acid and Cetirizine
Corporate Actions
Human Health Business
-. Acquisition of controlling stake in Indo Phyto Chemicals Private Limited for foraying into niche female healthcare segment with specific focus on steroids and hormones
Animal Health Business
-. Acquisition of animal health business division of Lyka, an initiative to strengthen the Company''s cattle and dairy business in India.
- Fortification of Company''s positioning in Turkey''s animal health market by acquiring Topkim Ilag
Premiks San. ve Tic. A.S making Alivira Turkey''s largest animal health company in Turkey. k. Foray into European veterinary market through acquisition of N-Vet AB and Fendigo. These Companies have established a strong front-end presence for Alivira in the European markets.
There was no change in the nature of the business of the Company during the year ended March 31, 2016.
Material changes and commitments affecting the financial position of the Company, which have occurred between the end of financial year and the date of this report
The following transactions/ proposed transactions occurred between the end of financial year i.e., March 31, 2016 and the date of this report:
-. Acquisition of 60% stake in Karizoo Group, Spain, one of the leading animal health groups in Spain and European markets on July 1, 2016. k. Acquisition of 70% stake in Interchange
Veterinaria Industria E Comercio S.A., Brazil on August 1, 2016, which will provide a foothold in the hugely attractive and fast growing Brazilian market.
During the year ended March 31, 2016, the Company has allotted equity shares as under:
Date of allotment |
No. of Shares |
Allottee category |
Remarks |
Issue price |
April 15, 2015 |
1,200,000 |
Promoter Group Entities |
On conversion of convertible warrants |
Rs. 222.15 |
May 26, 2015 |
7,476,635 |
Qualified Institutional Buyers |
Qualified Institutions Placement |
Rs. 535.00 |
June 10, 2015 |
800,000 |
Promoter Group Entity |
On conversion of convertible warrants |
Rs. 222.15 |
June 10, 2015 |
200,000 |
Promoter Group Entity |
On conversion of convertible warrants |
Rs. 236.00 |
June 10, 2015 |
1,100,000 |
Public |
On conversion of convertible warrants |
Rs. 475.00 |
August 13, 2015 |
757,734 |
Promoter Group Entity |
Preferential issue for consideration other than cash (Issue of equity shares against acquisition of equity shares of Alivira Animal Health Limited, India) |
Rs. 669.10 |
November 16, 2015 |
2,800,000 |
Promoter Group Entities |
On conversion of convertible warrants |
Rs. 236.00 |
December 1, 2015 |
2,827,679 |
Public |
Preferential issue for consideration other than cash (Issue of equity shares against acquisition of equity shares of Alivira Animal Health Limited, India) |
Rs. 669.10 |
3. DIVIDEND
The Board of Directors of the Company has not recommended any dividend for the financial year ended March 31, 2016.
The Company is not proposing to carry any amount to reserves.
During the year 2015-16, the Company has transferred unclaimed dividend of Rs. 8,827/- to Investor Education and Protection Fund, as per Investor Education and Protection Fund (Awareness and Protection of Investor) Rules, 2001.
4. SHARE CAPITAL
As on date, the authorized share capital of the Company is Rs. 500,000,000/- divided into 250,000,000 equity shares of Rs. 2/- each.
The issued, subscribed and paid up equity capital of the Company as on date is Rs. 476,472,390 divided into 238,236,195 equity shares of Rs. 2/- each.
The Company has not allotted equity shares after the balance sheet date i.e. March 31, 2016.
Sub-division of equity shares of the Company
The Company sub-divided its equity shares from 1 (One) Equity share of Rs. 10 each into 5 (Five) Equity shares of Rs. 2/- each on February 26, 2016 with an intent to improve the liquidity of the Company''s shares in the stock market and also to encourage the participation of small investors in the equity shares of the Company.
Issue of Warrants on preferential basis
As on date, 5,500,000 warrants which were issued on preferential basis to promoter group entity are outstanding.
The Company had originally issued 1,100,000 convertible warrants on April 11, 2015 which can be converted into equivalent number of equity shares of the Company having face value of Rs. 10 each for a consideration of Rs. 475 each. Pursuant to sub-division of 1 (One) equity share of Rs. 10 each into 5 (Five) equity shares of Rs. 2 each, the outstanding warrants have been adjusted proportionately.
The Company raised Rs. 1,674.8 mn through preferential issue to promoters/Non-promoters during the year.
Qualified Institutional Placement
The Company raised Rs. 4,000 mn through Qualified Institutional Placement, which was subscribed by quality, long-term investors who endorsed the vision of the Company of being a Power House in the Global Animal Health Space.
5. LISTING OF EQUITY SHARES OF THE COMPANY ON NATIONAL STOCK EXCHANGE OF INDIA LIMITED
The equity shares of the Company were listed with National Stock Exchange of India Limited on March 8, 2016 under the trading symbol âSEQUENTâ and admitted for trading on March 10, 2016.
6. SUBSIDIARIES
As at March 31, 2016, the Company has 17 subsidiaries, out of which 9 Companies are wholly owned Subsidiaries and the Company does not have any Joint Ventures/ Associate Companies.
Changes in subsidiaries during the financial year ended March 31, 2016: Buyout of entire minority interest in Alivira Animal Health Limited, India ("Alivira")
Pursuant to the approval of Board of Directors of the Company on June 30, 2015, the Company acquired the entire shareholding by buying out the minority shareholding (i.e., 9,997,941 equity shares) in Alivira held by Unit Trust of India Investment Advisory Services Limited A/c Ascent India Fund III (âAscentâ) and Devicam Capital LLP (''''Devicamâ) together. The consideration towards such acquisition was paid by way of issue of 2,827,679 equity shares of Rs. 10/each to Ascent and 757,734 equity shares of Rs. 10/- each to Devicam at a price of Rs. 669.10 per equity share through preferential issue in compliance with relevant provisions of the Companies Act,
2013 and Chapter VII of the Securities & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (âSEBI (ICDR) Regulationsâ). Post the acquisition of equity shares held by Devicam (on August 12, 2015) and Ascent (on December 1, 2015), Alivira has become a wholly owned subsidiary of the Company with effect from December 1, 2015.
Acquisition of 60% stake in Topkim Ila? Premiks San. ve Tic. A.S, Turkey ("Topkim")
Alivira Animal Health Limited, India, a wholly owned subsidiary of the Company acquired 60% stake in Topkim on December 11, 2015 through its subsidiary Provet Veteriner Urunleri San. ve Tic. A. S., Turkey (âProvetâ). Topkim is one of the oldest and reputable manufacturer of Turkey, has close to 50 years of business presence with over 67 registered products mainly comprising of Ectoparasiticides, Endectocides, and Injectable Antibiotics. It has wide distribution capabilities with presence in almost every sales point at Turkey.
Acquisition of 85% stake in N-Vet AB, Fendigo SA and Fendigo BV
Alivira Animal Health Limited, India, Wholly owned subsidiary of the Company has forayed into the European Veterinary Pharmaceutical markets through acquisition of 85% stake in three companies
- N-Vet AB, Sweden, Fendigo SA, Belgium and Fendigo BV, Netherland on December 3, 2015.
Acquisition of 51% stake in Indo Phyto Chemicals Private Limited, India (âIPCâ)
The Company acquired 51% stake in IPC on January 27, 2016. IPC is a fully integrated company with a portfolio of steroids and hormonal APIs and having its manufacturing base in Uttarakhand.
The Company has capabilities in both fermentation and chemical synthesis, giving it a unique ability to produce APIs from the basic starting materials that are extracted from plants.
Incorporation of other subsidiaries
Alivira Animal Health Australia Pty Limited, Australia was incorporated as a wholly owned subsidiary of Alivira Animal Health Limited, Ireland, a wholly owned subsidiary of the Company.
Sequent Scientific Pte. Limited, Singapore was incorporated as a wholly owned subsidiary of the Company.
Change in shareholding of below mentioned subsidiaries during the financial year ended March 31, 2016:
1. Alivira Animal Health Limited, Ireland became a wholly owned subsidiary of the Company pursuant to acquisition of entire shareholding in Alivira Animal Health Limited, India
2. Shareholding in Provet has increased from 55.15% to 60% of total equity capital pursuant to acquisition of entire shareholding in Alivira Animal Health Limited, India
Accounts of Subsidiaries
In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. Statement containing salient features of the financial statements of Company''s subsidiaries, joint ventures and associate companies as required in Form AOC-1 is enclosed as Annexure 1 to this Report.
Further financial statements together with related reports and information of each of the subsidiary companies of the Company have been placed on the website of the Company www.sequent.in.
7. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in terms of Section 92(3) of the Companies Act, 2013 in Form MGT- 9 is enclosed as Annexure 2 to the Directors'' Report.
8. PUBLIC DEPOSIT
During the financial year 2015-16, the Company has not accepted or renewed any public deposits in terms of Sections 73 and 74 of the Companies Act, 2013 and rules framed there under.
9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Board Composition
As on August 12, 2016, the Board comprises of 7 Directors consisting of 2 Executive Directors, 2 Nonexecutive Directors and 3 Independent Directors. Chairman of the Board is an Independent Director.
Mr. Narendra Mairpady (DIN: 00536905) was appointed as an Additional and Independent Director on the Board of Directors of the Company w.e.f August 1, 2015 and members have approved his appointment as a Director and Independent Director at their Annual General Meeting held on September 24, 2015.
Mr. Kannan Ramanujam (DIN: 00190637) resigned from the directorship of the Company with effect from the closing of business hours of February 11, 2016. The Directors place on record their sincere appreciation and recognition of the valuable contribution and services rendered by Mr. Kannan Ramanujam during his tenure as a Director of the Company.
Dr. S Devendra Kumar (DIN: 00050440) and Mr. K E C Rajakumar (DIN: 00044539) were appointed as Additional Directors with effect from October 29, 2015 and February 11, 2016 respectively.
As per Section 161 of the Companies Act, 2013 (âthe Actâ), an Additional Director shall hold office up to the date of next Annual General Meeting or the last date on which the Annual General Meeting should have been held, whichever is earlier and his/ her appointment as a Director of the Company has to be approved by the members of the Company. In this regard a proposal will be placed before the members at the ensuing Annual General Meeting for the appointment of Dr. S Devendra Kumar and Mr. K E C Rajakumar, as Directors of the Company.
Mr. Manish Gupta, Managing Director (DIN: 06805265) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Brief profiles of Mr. Manish Gupta, Dr. S Devendra Kumar and Mr. K E C Rajakumar are given in the corporate governance report which forms part of this report.
Your directors recommend their appointment/ reappointment to the members of the Company.
As on date the Company has the following Key Managerial Personnel:
- Mr. Manish Gupta - Managing Director (DIN: 06805265)
- Dr. Gautam Kumar Das - Joint Managing Director (DIN: 02920990)
- Mr. Kannan P R - Chief Financial Officer
- Mr. Preetham Hebbar - Company Secretary
There is no change in Key Managerial Personnel of the Company during the year 2015-16.
The Company has received necessary declarations from each Independent Director that they meet the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013.
10. MEETINGS OF THE BOARD
During the year ended March 31, 2016, 11 (Eleven) Board Meetings were held. These meetings were held on April 15, 2015, April 24, 2015, June 10, 2015, June 30, 2015, July 8, 2015, July 30, 2015, August 13, 2015, October 29, 2015, December 7, 2015, January 11, 2016 and February 11, 2016.
11. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Directors of the Company are appointed by members at the General Meetings of the Company.
As regards the appointment and tenure of Independent Directors, the Company has adopted the provisions of the Companies Act, 2013 read with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015.
The Nomination and Remuneration Committee at its meeting held on July 30, 2015 has adopted a policy namely Sequent Policy on Nomination and Remuneration (âthe Policyâ) in adherence to Section 178(3) of the Companies Act, 2013 and Clause 49 (IV) (B) (4) of the Listing Agreement as entered with stock exchange (till November 30, 2015)/ provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (w.e.f. December 1, 2015). The policy shall act as a guideline on matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel and other employees of the Company. The policy is given as Annexure 3 in this report.
12. EVALUATION OF BOARD OF DIRECTORS
Pursuant to provisions of Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement as entered with stock exchange (till November 30, 2015)/ provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (w.e.f. December 1, 2015), the Company has formulated a policy called as Sequent Board Performance Evaluation Policy (âthe Policyâ). Based on this the Company has prepared a questionnaire to carry out the evaluation of performance of every Director including the Independent Directors at regular intervals and at least on an annual basis.
The questionnaire is structured to embed various parameters based on which the performance of a Board can be evaluated. Customized questionnaires are formulated for evaluating Independent Directors, Non-Executive Directors, Whole-time Directors, Chairperson of the Board and the Board, as a whole.
Based on the policy the evaluation was conducted by the Company.
Detailed data on composition of Board of Directors, Committees of Board of Directors, Meeting details, charter for each committee and attendance details forms part of the Corporate Governance Report.
13. AUDIT COMMITTEE
The Composition of Audit Committee of the Company as on August 12, 2016 is given below:
- Dr. Gopakumar G Nair - Chairman
- Dr. Kausalya Santhanam - Member
- Mr. Narendra Mairpady- Member
Board of the Company has accepted all recommendations given by the Audit Committee.
14. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. BG & Associates, Practicing Company Secretaries
(Certificate of Practice No: 4221) to carry out the Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report is annexed as Annexure 4 to the Directors'' Report. There are no qualifications, observations or adverse remarks in the Secretarial Audit Report.
15. AUDITORS
Statutory Auditors
At the Annual General Meeting held on September 29, 2014, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm''s Registration Number:
008072S) were appointed as Statutory Auditors of the Company for a period of 5 years from 29th Annual General Meeting till the conclusion of 34th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act,
2013, the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the members in the ensuing Annual General Meeting of the Company.
Cost Auditor
Pursuant to Section 148(3) and Companies (Cost records and audit) Rules, 2014, Mr. Girish Kambadaraya, Cost Accountant, was appointed as the Cost Auditor for the financial year 2015-16. The due date for filing the Cost Audit Reports in XBRL mode for the financial year ended March 31, 2015 was September 30, 2015 and the Cost Audit reports were filed by the Cost Auditor on September 29, 2015.
The due date for filing the Cost Audit Reports for the financial year ended March 31, 2016 is September 30, 2016.
The Board at its meeting held on August 12, 2016 on recommendation of Audit Committee has appointed M/s. Kirit Mehta & Associates, Cost Accountants, as the Cost Auditor for the financial year 2016-17 in terms of Section 148(3) and Companies (Cost records and audit) Rules, 2014 as amended. As per the requirement of Companies Act, 2013 the remuneration payable to Cost Auditors shall be placed for ratification of at the ensuing Annual General Meeting of the Company.
A proposal will be placed before the members for the ratification of remuneration payable to M/s. Kirit Mehta & Associates, Cost Accountants as a Cost Auditor of the Company for the financial year 2016-17.
16. AUDIT REPORT
There are no qualifications, observations or adverse remarks in the Audit Report issued by the Statutory Auditors of the Company for financial year ended March 31, 2016.
17. PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as an Annexure
5 forming part of this report except the report as per Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In terms of Section 136 of the Companies Act, 2013, the said report is open for inspection at the Registered Office of the Company during working hours and any member interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company.
18. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board of Directors of the Company at its meeting held on May 28, 2014 has approved the implementation of Whistle Blower Policy namely âSequent Whistle Blower Policyâ throughout the Company in order to curb the unethical or improper behavior/ practices or alleged wrongful conduct or violation of Code of Conduct of the Company or applicable laws, frauds, bribery, corruption, employee misconduct, illegality, health, safety & environmental issues or misappropriation of Company funds or assets within the Company or by the Company. This policy helps in providing a mechanism for personnel to report to the Authority concerns about unethical behavior, actual or suspected fraud or violation of the company''s code of conduct or ethics policy.
The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Particulars of investments made, loans given and guarantees provided is as per details given below:
Name of the entity |
Relationship |
Investment (Amount in Rs.) |
Loan (Amount in Rs.) |
Guarantee (Amount in Rs.) |
Alivira Animal Health Limited, India |
Wholly Owned Subsidiary |
3,348,999,758 |
589,589,872 |
- |
Indo Phyto Chemicals Private Limited, India |
Subsidiary |
68,500,000 |
- |
- |
Strides Shasun Limited, India (Investment made in Shasun Pharmaceuticals Limited prior to merger with Strides Shasun Limited, formerly known as Strides Arcolab Limited) |
781,000,000 |
All the transactions entered with related parties are in the ordinary course of business and on arm''s length basis.
Further, there are no materially significant related party transactions with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.
The particulars of material contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC-2 of the rule 8(2) of Companies (Accounts) Rules, 2014 is given as an Annexure 6.
All transactions with the related parties are disclosed in Note 28.2 to the financial statements in the Annual Report.
21. CORPORATE SOCIAL RESPONSIBILITY
As per section 135(1), the Company has constituted a Corporate Social Responsibility Committee comprising of Mr. Manish Gupta, Dr. Gopakumar G Nair and Dr. Kausalya Santhanam as its members. The Company adopted a policy on Corporate Social Responsibility on May 14, 2016.
The disclosure as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure 7 of this report.
22. RISK MANAGEMENT
The Company has a risk management framework for identifying and managing risks. Additional details are provided in the ''Management Discussion and Analysis'' report forming part of this Report.
23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status of the Company and its future operations.
24. DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act, 2013, the Directors of your Company to the best of their knowledge and ability confirm that:
(a) in the preparation of the 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 of the company for that period;
(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 of the Company have been prepared 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.
(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.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS/ OUTGO AND RESEARCH & DEVELOPMENT
The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as an Annexure 8 to the Directors'' Report.
Detailed write-up on Research and Development activity forms part of the annexure to the Directors'' Report.
26. CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of Corporate Governance specified by the Securities and Exchange Board of India (âSEBIâ) through and Clause 49 of the Listing Agreement as entered with stock exchange (till November 30, 2015)/ provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (w.e.f. December 1, 2015) (âRegulationsâ). As per Regulation 34(3) and Schedule V of the Regulations, a separate Report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the Statutory Auditors of the Company regarding compliance with Corporate Governance requirements as stipulated in the regulations and listing agreement entered with Stock Exchange also forms part of the Annual Report.
27. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 (3) and Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report forms part of this Report.
28. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated an employee stock option plan titled âSSL ESOP Scheme 2010â (the âESOP 2010â) in accordance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the âSEBI ESOP Guidelinesâ) and the scheme is administered through a trust. As on date 3,500,000 shares have been issued to the trust. During the year the Nomination and Remuneration Committee has granted 500,000 options to identified employees and 225,000 options lapsed due to resignation of employees. As at March 31, 2016, 3,545,000 Stock options are outstanding.
The ESOP scheme of the Company is in Compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
Further disclosure under Section 62 of the Companies Act, 2013 read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee Benefits) Regulations, 2014 given as an Annexure 9 to this Report.
29. APPRECIATION
Your Directors would like to express their grateful appreciation for the excellent support and cooperation received from the Members, Customers, Financial Institutions, Banks, Government Authorities, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges, Manufacturers and Suppliers to the Company.
We would like to place on record our sincere appreciation for the total commitment, dedication, untiring efforts and hard work put in by the employee members at all levels of the Company in realization of the corporate goals in the years ahead.
For and on behalf of the Board of Directors
Place: Bengaluru Dr. Gopakumar G Nair
Date: August 12, 2016 Chairman
Mar 31, 2014
Dear Members,
We hereby present the 29th Annual Report of your Company along with the
Audited Financial Statements for the financial year ended 31 March
2014.
1. FINANCIAL RESULTS
The Financial performance of the Company (Standalone) for the Financial
Year ended 31 March 2014 is given below:
(Rs. In Million)
Particulars 2013-14 2012-13
Total operations
Total revenue 4,450.84 3,140.50
Other Income 52.52 24.90
Profit/ (Loss) before Interest, Depreciation, Tax
& Exceptional Items 125.26 (40.23)
Less : Interest 387.39 320.45
: Depreciation and amortisation expenses 271.26 267.43
Profit/ (Loss) Before Tax & Exceptional Items (533.39) (628.11)
Exceptional Items (610.77) -
Profit/(Loss) Before Tax (1,144.16) (628.11)
Provision for - Current Tax - -
- Deferred [Net] Charge (Credit) - (83.10)
Profit after Tax (1,144.16) (545.01)
Add: Balance brought forward from previous Year (159.77) 385.24
Surplus/ (Deficit) carried to Balance Sheet (1,303.93) (159.77)
2. BUSINESS PERFORMANCE REVIEW
During the financial year 2013-14, on a standalone basis, your
Company''s revenues stood at Rs. 4,503.36 Million as against Rs.
3,165.40 Million in 2012- 13. The Company posted an EBITDA of Rs.
125.26 Million in the year as against Rs. (40.23) Million in 2012-13.
The Company made a loss of Rs. 1,144.16 Million.
On a consolidated basis, your Company''s revenue for the financial year
2013-14 stood at Rs. 4,593.06 Million as against Rs. 3,294.26 Million
in 2012-13. The Company posted an EBITDA of Rs. 206.30 Million as
against Rs. (106.97) Million in 2012-13. On a consolidated level, the
Company made a loss of Rs. 1,104.93 Million.
While the consolidated Revenue and EBITDA grew substantially, profit
after Tax was impacted by exceptional/ non-recurring items to the tune
of Rs. 589.11 Million resulting in a loss of Rs. 1,104.93 Million for
the year (against Rs. 646.94 Million in the previous year). The
Exceptional items are predominately on account of strategic decisions
to discontinue penems project and exiting Africa/ Vietnam operations.
The Company had decided to discontinue the penems project due to delays
in environmental approval from Government of India and the additional
investment requirements to complete the project. pursuant to this, the
Company has written off the related investments and cost of Rs. 482.01
Million which is included in exceptional items for the year ended 31
March 2014 of standalone results and Rs. 539.11 Million in consolidated
results.
The Company exited Africa / Vietnam operations which were started for
backward integration of a key product of the Company, which is no
longer viable.
A detailed analysis on the Company''s operational and financial
performance for the year is covered under ''Management''s Discussion and
Analysis Report'' which forms part of the Annual Report.
Business Outlook
During the year, the Company initiated a set of corporate actions with
a long- term vision of becoming a power-house in global animal health
business with a portfolio of niche human APIs.
ANIMAL HEALTH BUSINESS - Create a valuable, independent, integrated,
global Animal Health Business
* Set up a Joint Venture with Shasun Pharmaceuticals Limited named
''Alivira Animal Health Limited'' with a vision to create a Best-In-
Class, Integrated Platform from APIs to Formulations in the Hugely
Attractive Global Animal Health Market.
* To create a global brand under the name ''Alivira'', the name derived
out of Elvira, Latin word for ''white, pure, clean'' and Alleviare, Latin
word for ''relief''.
* Launched 18 new products in formulations business and 4 new APIs.
HUMAN API BUSINESS - Accelerate growth in Human API with focus on
profitability
* Investments made to enhance capacities and achieve critical mass in
business with increased focus on regulated markets.
* 6 new filings and 6 new approvals in the regulated markets.
* Entered into an agreement to acquire the manufacturing assets and
business of Arvee Syntthesis Private Limited, Arvee would serve as a
site for key intermediates for the Company''s Human API business. The
site has all necessary approvals and infrastructure with space for
future expansion of Company''s rapidly expanding business.
* The Company also acquired a land admeasuring approx. 3 acres,
adjacent to its existing FDA approved facility in Mangalore.
* The facility at Mysore and land at Mangalore to be used for meeting
the growing demand for the Company''s key products in the USFDA and WHO
regulated markets.
3. DIVIDEND
The Board of Directors of the Company has not recommended any Dividend
for the financial year ended 31 March 2014.
4. SHARE CAPITAL
As on date, the authorised capital of the Company is Rs. 500,000,000/-
divided into 50,000,000 equity shares of Rs. 10/- each.
The issued, subscribed and paid up equity capital of the Company as on
date is Rs. 273,351,910/- divided into 27,335,191 equity shares of Rs.
10/- each.
During the period, the Company allotted 2,750,000 equity shares of Rs.
10/- each at a premium of Rs. 162/- per equity share and 550,000 equity
shares of Rs. 10/- each at a premium of Rs. 125.25 per equity share
upon conversion of equal number of warrants which were allotted to
Promoter Group Companies on preferential basis.
Pursuant to this, the issued, subscribed and paid up equity capital of
the Company increased from Rs. 240,351,910/- to Rs. 273,351,910/-
during the year.
Issue of Warrants on preferential basis
On 28 January 2014, the Company allotted 3,700,000 warrants convertible
into equivalent number of equity shares at a price of Rs. 135.25 per
warrant (including a premium of Rs. 125.25 per warrant) to promoter
group entities. Out of which 550,000 warrants were converted into equal
number of equity shares of Rs. 10 each at a premium of Rs. 125.25 per
equity share. Company also issued 2,000,000 warrants at a price of Rs.
222.15 per warrant (including a premium of Rs. 212.15 per warrant) and
3,000,000 warrants at a price of Rs. 236/- per warrant (including a
premium of Rs. 226/- per warrant) on 28 May 2014 and 11 July 2014
respectively to promoter group entities.
As on date, 8,150,000 warrants are outstanding.
5. SUBSIDIARIES
As at 31 March 2014, the Company had 10 subsidiaries, out of which 8
companies are wholly owned Subsidiaries.
On 30 September 2013, M/s. Alivira Animal Health Limited ("Alivira")
was incorporated as a wholly owned Subsidiary of the Company to
develop, manufacture and sell veterinary products inclusive of both
Active Pharmaceutical Ingredients (APIs) and formulations in the global
market.
The Company has entered into a Joint Venture Agreement with Shasun
Pharmaceuticals Limited ("Shasun") on 07 March 2014. Subsequently, on
11 April 2014 Alivira became a Joint venture of the Company and Shasun.
6. CONSOLIDATED ACCOUNTS
In accordance with Accounting Standard 21 on Consolidated financial
statements, the audited consolidated financial statements are provided
in this Annual report.
In terms of the General Circular 2 of 2011 dated 8 February 2011 issued
by the Ministry of Corporate affairs, the audited Financial Statements
of the Company''s subsidiaries have not been attached to this Report.
The Financial Statements of the said subsidiaries will be kept for
inspection by any investor at the registered office of the Company
during business hours.
7. STRATEGIC/ OPERATIONAL INITIATIVES
a. Joint Venture with shasun Pharmaceuticals Limited
The Company has set up a Joint Venture with Shasun Pharmaceuticals
Limited named ''Alivira Animal Health Limited'' with a vision to create a
Best-In- Class, Integrated Platform from APIs to Formulations in the
Hugely Attractive Global Animal Health Market.
b. Hiving off of Specialty Chemicals Division
In order to focus the Company''s efforts and resources towards expansion
of the Active Pharmaceuticals Ingredients and Veterinary Formulations
Business, the Company decided to hive off the specialty chemicals
division of the Company and the Company has obtained members'' approval
through postal ballot. On 15 April 2014, the Company entered into an
agreement with Songwon Industrial Group,
Korea to sell the Company''s specialty chemicals division. On 01 August
2014 the Company completed the sale of this division for a total cash
consideration of Rs. 1,200 Million.
c. Acquisition of Business of Arvee Syntthesis Private Limited
The Company has entered into a definitive agreement to acquire the
manufacturing assets and business of Arvee Syntthesis private Limited,
Mysore (''''Arvee'''') on 22 May 2014 and completed the acquisition on 9
June 2014. The Company will be using the facility of Arvee for key
intermediates for the Company''s Human API business. This will help for
future expansion of Company''s rapidly expanding business.
d. hiving off of veterinary Formulations Division
The Company has obtained the approval of members of the Company to hive
off the Veterinary Formulations Division including the manufacturing
facility located at Additional Ambernath to Alivira Animal Health
Limited ("Alivira"), a Joint Venture Company between the Company and
Shasun pharmaceuticals Limited. This will help the Company to focus
independently on high growth potential animal health market and to
become a significant player in the market.
8. PUBLIC DEPOSIT
The Company has not accepted or renewed any public deposits under
section 58A of the Companies Act, 1956.
9. DIRECTORS
Dr. Gautam Kumar Das, Joint Managing Director retires by rotation at
the ensuing Annual General Meeting and being eligible, offers himself
for re-appointment. A brief profile of Dr. Gautam Kumar Das is given in
the corporate governance report which forms part of this report.
Mr. K R Ravishankar, Chairman of the Company who is liable to retire by
rotation at the ensuing Annual General Meeting and is not seeking
re-appointment.
The Company had, pursuant to the provisions of clause 49 of the Listing
Agreement as entered with the Stock Exchange, appointed Dr. Gopakumar G
Nair as an Independent Director on the Board of the Company.
As per the provisions of Section 149 (4) of the Companies Act, 2013
(the Act), which came in to effect from 1 April 2014, every listed
public company is required to have at least one-third of the total
number of directors as independent directors, who are not liable to
retire by rotation.
As per Section 149 (4) of the Act read with amended Clause 49 of the
Listing Agreement, the Company proposes to appoint Dr. Gopakumar G Nair
as an Independent Director to hold the office for a term upto 5
consecutive years from the date of his appointment i.e.,ensuing Annual
General Meeting.
Board is of the opinion that Dr. Nair fulfills the criteria of
independence as provided under section 149(6) of the Act and the Rules
framed thereunder and is independent of the management. The Company has
received a declaration from him that he meets the criteria of
independence as prescribed under sub-section (6) of Section 149 of the
Act.
A proposal will be placed before the members at the ensuing Annual
General Meeting for their appointment/re-appointment.
10. DIRECTOR''S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 as amended by
the Companies (Amendment) Act, 2000, the director confirms that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
the material departures.
2. Appropriate Accounting Policies have been selected and applied
consistently and have made adjustments 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 on 31 March 2014 and of the loss of the
Company for the year ended 31 March 2014.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on a going concern basis.
11. AUDITORS
The Statutory Auditors viz., M/s. Deloitte Haskins & Sells, Chartered
Accountants, Bangalore (Registration No. 008072S) ("DHS") retire at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. Pursuant to provisions of section 139 of the Companies
Act, 2013 and the rules framed thereunder, the company proposes to
re-appoint DHS from the conclusion of ensuing Annual General Meeting of
the Company for a term of 5 years which is subject to ratification by
members at every Annual General Meeting of the Company. Your directors
recommend their re-appointment.
Pursuant to Companies (cost records and audit) Rules, 2014, Mr. Girish
Kambadaraya, Cost Accountant, has been appointed as the Cost Auditor
for the financial year 2014-15. The due date for filing the Cost Audit
Reports in XBRL mode for the financial year ended 31 March 2013 was 30
September 2013 and the Cost Audit reports were filed by the Cost
Auditor on 25 September 2013. The due date for filing the Cost Audit
Reports for the financial year ended 31 March 2014 is 30 September
2014.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS / OUTGO
The particulars as prescribed under Section 217 (1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
to the Directors'' Report.
13. CORPORATE GOVERNANCE
The Company has complied with all mandatory requirements of Corporate
Governance specified by the Securities and Exchange Board of India
through Clause 49 of the Listing Agreement. As required by the said
clause, a separate Report on Corporate Governance forms part of the
Annual Report of the Company. A certificate from the Statutory Auditors
of the Company regarding compliance with Corporate Governance
requirements as stipulated in Clause 49 of the Listing Agreement
entered with Stock Exchange also forms part of the Annual Report.
Board also confirms that the Company has devised proper systems to
ensure compliance of all laws applicable to the Company.
14. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement entered into with the
Stock Exchanges, Management Discussion and Analysis Report forms part
of this Report.
15. RESEARCH AND DEVELOPMENT
Detailed write-up on Research and Development activity forms part of
the annexure to the Directors'' Report.
16. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated an Employee Stock Option plan titled ''SSL
ESOP Scheme 2010'' and the scheme is administered through a trust. As on
date 700,000 shares have been issued to the trust. During the year the
Compensation Committee has granted 640,000 options to identified
employees, out of which 70,000 options were lapsed due to resignation
of employees. As at 31 March 2014, 570,000 Stock options are
outstanding.
Further, Statement giving additional information in terms of Regulation
12 of Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock purchase Scheme) Guidelines, 1999 is annexed
to this report.
17. PARTICULARS OF EMPLOYEES U/S 217 OF THE COMPANIES ACT, 1956
Any shareholder interested in obtaining a copy of the statement of
particulars of employees referred to in section 217 (2A) of the
Companies Act, 1956, may write to the Company Secretary at the
Registered Office of the Company.
18. APPRECIATION
Your Directors would like to express their grateful appreciation for
the excellent support and co-operation received from the Shareholders,
Customers, Financial Institutions, Banks, Government Authorities,
Reserve Bank of India, Securities and Exchange Board of India, Stock
Exchanges, Manufacturers and Suppliers to the Company.
At this point, we would like to place on record our sincere
appreciation for the total commitment, dedication, untiring efforts and
hard work put in by the employee members at all levels of the Company
in realisation of the corporate goals in the years ahead.
ANNEXURE TO DIRECTORS'' REPORT
RESEARCH AND DEVELOPMENT:
Core areas of R&D:
Process chemistry aspects of Active Pharmaceuticals Ingredients (APIs)
and intermediates which includes:
a. Development of new products for different regulatory filings.
b. Development of non-infringing processes through innovative synthetic
routes.
c. Development of green technology to minimise hazardous operations and
reagents.
d. Improvement of product life cycle management through alternate
approaches.
e. Identification and implementation of cost reduction measures in the
commercial scales.
Benefits derived as a result of R&D:
a. Cutting edge technology for niche products.
b. Speedy commercialisation of new products.
c. Tapping potential market through new filing of Drug Master Files
(DMFs) using non-infringing processes.
d. Creation of Intellectual Property wealth.
Future plan of Action:
a. In the animal health segment, the company will continue to focus on
therapeutic segments of anthelmintic and anti parasiticide.
b. Continued focus on improving quality, cost and operation through
process modification as per regulatory norms.
For and on behalf of the Board of Directors
Dr. Gautam Kumar Das Dr. Gopakumar G Nair
Joint Managing Director Director
Place : Bangalore
Date : 13 August 2014
Mar 31, 2013
Dear Members,
The take pleasure in presenting the 28th Annual Report of your Company
along with the Audited Financial Statements for the financial year
ended March 31, 2013.
1. FINANCIAL RESULTS
The Financial Performance of the Company (Standalone) for the Financial
Year ended March 31, 2013 is given below:
(Rs.In Million)
Particulars 2012-13 2011-12
Total revenues 3,140.50 3,324.30
Other Income 24.90 113.27
Earnings before
Interest, Depreciation & Tax (40.23) 467.97
Less : Interest (320.45) 282.65
Depreciation and
amortisation expenses (267.43) 210.28
Profit/(Loss) Before Tax
& Exceptional Items (628.11) (24.96)
Profit/(Loss) Before Tax (628.11) (24.96)
Provision for - Current Tax 0.86
- Deferred Tax [Net] (83.10) (40.50)
Profit after Tax (545.01) 14.68
Add: - Balance brought forward
from Previous Year 385.24 370.56
Profit/(Loss) available
for appropriation (159.77) 385.24
Surplus/(Deficit) carried to
Balance Sheet (159.77) 385.24
2. BUSINESS PERFORMANCE REVIEW
During the financial year 2012-13, on a standalone basis, your
Company''s revenues stood at Rs. 3,165.40 Million as against Rs.
3,437.57 in 2011-12. The Company posted an EBITDA of Rs. (40.23)
Million in the year as against Rs. 467.97 Million in 2011-2012. The
Company registered a net loss of Rs. 545.01 Million.
On a consolidated basis, your Company''s revenues for the year 2012-13
stood at Rs. 3,294.26 Million as against Rs. 3,562.93 Million in
2011-12. The Company posted an EBITDA of Rs. (106.97) Million as
against Rs. 475.58 Million in 2011-2012. The Company made a loss of
Rs.646.94 Million.
A detailed analysis on the Company''s operational and financial
performance for the year is covered under ÂManagement''s Discussion and
Analysis Report'' which forms part of the Annual Report.
3. DIVIDEND
The Board of Directors of the Company has not recommended any Dividend
for the financial year ended March 31, 2013.
4. SHARE CAPITAL
As at March 31, 2013, the authorized capital of the Company stood at
Rs.320,000,000.00 divided in to 32,000,000 equity shares of Rs. 10/-
each.
The issued, subscribed and paid up equity capital of the Company as at
March 31, 2013 is Rs. 240,351,910.00 divided into 24,035,191 equity
shares of Rs. 10/- each.
During the year, the Company has allotted 2,100,000 equity shares of
Rs. 10 each at a premium of Rs. 110.75 per equity share upon
conversion of equal number of warrants which were allotted to Promoter
Group entilies on preferential basis.
Pursuant to this, the issued, subscribed and paid up equity capital of
the Company increased from Rs. 219. 35 Million to Rs. 240.35 Mio
Issue of Warrants on preferential basis
On September 28, 2012, the Company issued 2,100,000 warrants
convertible into equivalent number of equity shares at a price of Rs.
120.75 per warrant (including a premium of Rs. 110.75 per warrant) to
promoter group entities. These warrants have already been converted
into equity shares in 3 tranches during the year.
On March 30, 2013, the Company issued 2,750,000 warrants convertible
into equivalent number of equity shares at a price of Rs. 172.00 per
warrant (including a premium of Rs. 162.00 per warrant) to promoter
group entities. As at March 31, 2013 these warrants are outstanding.
5. SUBSIDIARIES
During the year ended March 31, 2013 Elysian Life Sciences Private
Limited became wholly owned subsidiary of the Company and Elysian
Healthcare Private Limited, a step-down subsidiary of the Company,
ceased to be a subsidiary of the Company.
6. CONSOLIDATED ACCOUNTS
In accordance with Accounting Standard 21 on consolidated financial
statements read with Accounting Standard 27 on Accounting for Joint
Ventures, the audited consolidated financial statements are provided in
this Annual report.
In terms of the General Circular 2 of 2011 dated February 8, 2011
issued by the Ministry of Corporate affairs, the audited Financial
Statements of the Company''s subsidiaries have not been attached to this
Report. The Financial Statements of the said subsidiaries will be kept
for inspection by any investor at the registered office of the Company
during business hours.
7. PUBLIC DEPOSIT
The Company has not accepted or renewed any public deposits under
section 58A of the Companies Act, 1956.
8. DIRECTORS
Dr. Gopakumar G Nair retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment.
A brief profile of Dr. Gopakumar G Nair is given in the corporate
governance report which forms part of this report.
Dr. Gautam Kumar Das was re-appointed as an Executive Director w.e.f.
January 7, 2013 for a further period of 3 years. Further on May 30,
2013, Dr. Das was re-designated as Joint Managing Director.
9. DIRECTOR''S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the act, as amended by the companies
(amendment) Act, 2000, the director confirms that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation related to
the material departures.
2. Appropriate Accounting Policies have been selected and applied
consistently and have made adjustments 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 on March 31, 2013 and of the loss of the
Company for the year ended March 31, 2013.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on a going concern basis.
10. AUDITORS
The Statutory Auditors viz., M/s. Deloitte Haskins & Sells, Chartered
Accountants, Bangalore (Registration No. 008072S) retire at the ensuing
Annual General Meeting and being eligible, offer themselves for
re-appointment. Your directors recommend their re- appointment.
Pursuant to the directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, in respect of
the audit of Cost Records of the Company, Girish Kambadaraya, Cost
Accountant, has been appointed as the Cost Auditor for the financial
year 2013-14. The due date for filing the Cost Audit Reports in XBRL
mode for the financial year ended March 31, 2012 was February 28, 2013
and the Cost Audit Reports were filed by the Cost Auditor on January,
31, 2013. The due date for filing the Cost Audit Reports for the
financial year ended March 31, 2013 is September 30, 2013.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING / OUTGO
The particulars as prescribed under Section 217 (1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given as Annexure to the
Directors'' Report.
12. CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of
Corporate Governance specified by the Securities and Exchange Board of
India through clause 49 of the Listing Agreement. As required by the
said clause, a separate Report on Corporate Governance forms part of
this report. A certificate from the Statutory Auditors of the Company
regarding compliance with Corporate Governance requirements as
stipulated in Clause 49 of the Listing Agreement entered with Stock
Exchange also forms part of the Annual Report.
Board also confirms that the Company has devised proper systems to
ensure compliance of all laws applicable to the Company.
13. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to clause 49 of the Listing Agreement entered into with the
Stock Exchanges, Management Discussion and Analysis Report forms part
of this Report.
14. RESEARCH AND DEVELOPMENT
Detailed write-up on Research and Development activity is given as an
annexure to the Directors'' Report.
15. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated an Employee Stock Option Plan titled ÂSSL
ESOP Scheme 2010'' and the scheme is administered through a trust. As on
date 700,000 shares have been issued to the trust. However no ESOPs
are outstanding as on March 31, 2013.
Further, Statement giving additional information in terms of Regulation
12 of Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this report.
16. PARTICULARS OF EMPLOYEES U/S 217 OF THE COMPANIES ACT, 1956
Any shareholder interested in obtaining a copy of the statement of
particulars of employees referred to in section 217 (2A) of the
Companies Act, 1956, may write to the Company Secretary at the
Registered Office of the Company.
17. APPRECIATION
Your Directors would like to express their grateful appreciation for
the excellent support and cooperation received from the Shareholders,
Customers, Financial Institutions, Banks, Government Authorities,
Reserve Bank of India, Securities and Exchange Board of India, Stock
Exchanges, Manufacturers and Suppliers to the Company.
At this point, we would like to place on record our sincere
appreciation for the total commitment, dedication, untiring efforts and
hard work put in by the employee members at all levels of the Company
in realisation of the corporate goals in the years ahead.
For and on behalf of the Board of Directors
Dr. Gautam Kumar Das Dr. Gopakumar Nair
Joint Managing Director Director
Place: Bangalore
Date: August 14, 2013
Mar 31, 2012
The take pleasure in presenting the 27th Annual Report together with the
Audited Statement of Accounts of the Company for the financial year
ended March 31, 2012.
1. FINANCIAL RESULTS
The Highlights of the Performance of the Company during the Financial
Year ended March 31, 2012 are appended below:-
(Rs. In Mn)
Particulars 2011-2012 2010-11
Revenue from operations 3,324.30 2,779.80
Other Income 113.27 114.10
Earnings before Interest, Depreciation
& Tax 467.97 583.78
Less : Finance Costs (282.65) (200.35)
: Depreciation (210.28) (171.81)
Profit/(Loss) Before Tax &
Exceptional Items (24.96) 211.62
Exceptional Items - (10.53)
Profit/(Loss) Before Tax (24.96) 222.15
Tax Expenses - Current Tax 0.86 36.50
- Deferred Tax (40.50) 42.59
- MAT Credit - (16.26)
Profit after Tax 14.68 159.32
Add: Balance brought forward
from Previous Year 370.56 296.42
Included on Amalgamation - (38.85)
Profit available for appropriation 385.24 416.89
Which we recommend to
appropriate as follows:
Transfer to General Reserve - 7.97
Proposed Dividend - 32.90
Tax on Dividend - 5.46
Surplus carried to Balance Sheet 385.24 370.56
Note:
Previous year figures have been regrouped/restated wherever necessary
to make them comparable with those of the current year.
2. BUSINESS PERFORMANCE REVIEW
On standalone basis, the company posted 18.8 per cent growth in the
total revenues, from Rs.2,893.90 mn in 2010-11 to Rs.3,437.57 mn in
2011-12. The company posted an EBIDTA of Rs.467.97 mn as against Rs.583.78
mn in 2010-11. On a standalone level, the Company registered a net
profit of Rs.14.68 mn.
On consolidated basis, the company posted 11.8 per cent growth in the
total revenues, from Rs.3,185.81 mn in 2010-11 to Rs.3,562.93 mn in
2011-12. The company posted an EBIDTA of Rs.475.58 mn as against Rs.521.86
mn in 2010-11. On a consolidated level, the Company made a loss of
Rs.14.59 mn.
Detailed analysis of the operational and financial performance for the
year is covered under the 'Management Discussion & Analysis' as well as
other sections in this Annual Report.
3. DIVIDEND
The Board of Directors of the Company has not recommended any Dividend
for the financial year.
4. SHARE CAPITAL
As at March 31, 2012, the authorized capital of the Company stood at
Rs.320 mn divided into 32,000,000 equity shares of Rs. 10/- each.
There was no change in the Issued, subscribed and paid up equity
capital which stood at Rs. 219.35 mn.
5. MERGER OF FRAXIS LIFE SCIENCES LIMITED WITH THE COMPANY
Fraxis Life Sciences Limited, a promoter group Company merged with the
Company conSequent to the scheme of amalgamation ('Scheme') approved by
the Hon'ble High Court of Bombay vide its order dated August 20, 2011.
Pursuant to the Scheme, the Company on November 21, 2011 allotted
14,865,000 fully paid up New Equity Shares of Rs. 10/- to the
shareholders of Fraxis Life Sciences Limited. There would be no change
in the paid up capital of the Company as in terms of the scheme, the
said shares were issued against the cancellation of equivalent number
of shares held by Fraxis Life Sciences Limited in the Company.
6. CONSOLIDATED ACCOUNTS
In accordance with Accounting Standard 21 on
Consolidated Financial Statements, the audited Consolidated financial
statements are provided in this Annual report.
In terms of the General Circular 2 of 2011 dated February 8, 2011
issued by the Ministry of Corporate Affairs, the audited Financial
Statements of the Company's subsidiaries have not been attached to this
Report. The Financial Statements of the subsidiaries shall be made
available to the shareholders of the Company / its subsidiaries seeking
such information at any point of time and such Financial Statements
will also be kept for inspection by any shareholder during business
hours at the registered office and the corporate office of your
Company.
7. PUBLIC DEPOSIT
The Company has not accepted or renewed any public deposits under
section 58A of the Companies Act, 1956.
8. DIRECTOR
Mr. Kannan Ramanujam retires by rotation at the ensuing Annual General
Meeting and is proposed for re-appointment. The Board recommends his
re-appointment at the ensuing Annual General Meeting.
Further during the financial year Mr. K R N Moorthy, Dy. Managing
Director and Mr. Joe Thomas Director of the Company, has resigned from
the directorship of the company.
9. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the act, as amended by the Companies
(Amendment) Act, 2000, the director confirms that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation related to
the material departures.
2. Appropriate Accounting Policies have been selected and applied
consistently and have made adjustments 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 on March 31, 2012 and profit of the
Company for the year ended March 31, 2012.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on a going concern basis.
10. AUDITORS
M/s Deloitte Haskins & Sells retire as Statutory Auditors of the
Company at the ensuing Annual General Meeting and are eligible for re-
appointment.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING / OUTGO
The particulars as prescribed under Section 217 (1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
to the Directors' Report.
12. CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of
Corporate Governance specified by the Securities and Exchange Board of
India through clause 49 of the Listing Agreement. As required by the
said clause, a separate Report on Corporate Governance forms part of
the Annual Report of the Company. A certificate from the Statutory
Auditors of the Company regarding compliance with the conditions of
Corporate Governance also forms part of this Report.
13. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to clause 49 of the Listing Agreement entered into with the
Stock Exchange, Management Discussion and Analysis Report forms part of
this Report.
14. RESEARCH AND DEVELOPMENT
Detailed write-up on Research and Development activity forms part of
the annexure to the Directors' Report.
15. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated a Employee Stock Option Plan titled 'SSL
ESOP Scheme 2010 'and the scheme is administered through a trust. As on
date, 700,000 shares have been issued to the trust. Details of the
ESOPs issued are provided in the corporate governance report.
Further, Statement giving additional information in terms of Regulation
12 of Securities and Exchange Board of India (Employee Stock
Guidelines, 1999 is annexed to this Directors' Report.
16. PARTICULARS FOR EMPLOYEES U/S 217 OF THE COMPANIES ACT, 1956
Any shareholder interested in obtaining a copy of the statement of
particulars of employees referred to in section 217 (2A) of the
Companies Act, 1956, may write to the Company Secretary at the
Registered Office of the Company.
17. APPRECIATION
Your Directors would like to express their grateful appreciation for
the excellent support and co- operation received from the Financial
Institutions, Banks, Government Authorities, Reserve Bank of India,
Securities and Exchange Board of India, Stock Exchanges, Customers,
Manufacturers, Suppliers, Directors and Shareholders during the year
under review.
At this point, we would like to place on record our sincere
appreciation for the total commitment, dedication, untiring efforts and
hard work put in by the employee members at all levels of the Company
in realisation of the corporate goals in the years ahead.
For and on behalf of the Board of Directors
KR Ravishankar
Chairman & Managing Director
Place: Bengaluru
Date : August 14, 2012
Mar 31, 2011
Dear Members,
We take pleasure in presenting the 26th Annual Report together with the
Audited Statement of Accounts of the Company for the financial year
ended March 31, 2011.
1. FINANCIAL RESULTS
The Highlights of the Performance of the Company during the Financial
Year ended March 31, 2011 are appended below:-
(Rs. In Million)
Particulars 2010-11 2009-10
Total revenues 2,778 2,463
Other Income 116 73
Earnings before Interest,
Depreciation & Tax 596 673
Less : Interest (213) (187)
: Depreciation (172) (125)
Profit Before Tax & Exceptional Items 211 361
Exceptional Items 11 (58)
Profit Before Tax 222 303
Provision for - Current Tax (37) (65)
- Deferred Tax (42) (87)
- MAT Credit Entitlement 16 57
Profit after Tax 159 208
Add: - Balance brought forward
from Previous Year 296 129
Included on Amalgamation (38) 25
Profit available for appropriation 417 362
Which we recommend to
appropriate as follows:
Transfer to General Reserve 8 16
Proposed Dividend 33 43
Tax on Dividend 5 -
Surplus carried to Balance Sheet 371 296
2. BUSINESS PERFORMANCE REVIEW
On standalone basis, the company posted a 12.8% growth in the total
revenues, from Rs.2,463.35 Million in 2009-10 to Rs.2,777.56 Million in
2010-11. The company posted an EBIDTA of Rs.596 Million as against Rs.673
Million in 2009-10. On a standalone level, the Company made a PAT of
Rs.159.33 Million.
On consolidated basis, the company posted a 9.6% growth in the total
revenues, from Rs.2,844.48 Million in 2009-10 to Rs.3,116.65 Million in
2010-11. The company posted an EBIDTA of Rs.522 Million as against Rs.849
Million in 2009-10. On a consolidated level, the Company made a loss of
40.24 Million.
The company caters to two major segments - Pharmaceuticals Division
(consisting of API, CRAMS and Veterinary Formulations businesses)
accounted for 85.6 per cent of the company's revenues while the
Specialty chemicals divisions accounted for 14.4 per cent.
During the year, the Company forayed in to four new therapeutic
segments - Penems, Penicillin, Oncology and Phy
to-Pharmaceutical/Herbal Extracts. The company signed a Memorandum of
Understanding with Government of Karnataka to set up three new
Greenfield facilities in Bangalore, for which it will invest Rs.1500
Million.
Detailed analysis of the operational and financial performance for the
year is covered under the Management Discussion & Analysis' section.
3. DIVIDEND
The Board of Directors of the Company has recommended a final dividend
of Rs.1.50 (15 per cent) per equity share for the year 2010-11. This, if
approved by the shareholders, would result in a cash outflow of Rs.32.90
Million.
4. SHARE CAPITAL
Pursuant to the approval of the Scheme of Amalgamation for merger of
Vedic Elements Private Limited, which was a wholly owned subsidiary of
the Company with the Company, the Authorised Share Capital of the
Company enhanced by Rs.70 Million during the year. As at March 31, 2011,
the authorized capital of the Company stood at Rs.320 Million as against
Rs.250 Million as at March 31, 2010.
There was no change in the Issued, subscribed and paid up equity
capital which stood at Rs.219.35 Million.
5. SUBSIDIARIES
The Company has a total of 11 subsidiaries as at March 31, 2011. They
are:
1. SeQuent Global Holdings Limited, Mauritius
2. SeQuent European Holdings Limited, Cyprus
3. SeQuent Research Limited
4. Sanved Research Labs Private Limited
5. Vedic Fanxipang Pharma Chemic Company Limited, Vietnam
6. Galenica B.V., Netherlands
7. Codifar N.V., Belgium
8. SeQuent Anti Biotics Private Limited
9. SeQuent Oncolytics Private Limited
10. Elysian Life Sciences Private Limited
11. Elysian Health Care Private Limited
6. MERGER OF FRAXIS LIFE SCIENCES LIMITED WITH THE COMPANY
The Company is in the process of merging Fraxis Life Sciences Limited,
a promoter group Company with that of the Company. The merger was
approved by the shareholders at their meeting held on March 15, 2011
and final order from the Hon'ble High Court of Judicature at Bombay is
awaited.
On approval, Company will allot 14,865,000 equity shares to the
shareholders of Fraxis Life Sciences Limited and the shares held by
Fraxis Life Sciences Limited in the Company will stand cancelled.
7. CONSOLIDATED ACCOUNTS
In accordance with Accounting Standard 21 on consolidated financial
statements, the audited consolidated financial statements are provided
in this Annual report.
In terms of the Central Government approval under Section 212(8) of the
Companies Act, 1956, the audited Financial Statements of the Company's
subsidiaries have not been attached to this Report. The Financial
Statements of the said subsidiaries will be kept for inspection during
business hours by any investor at the registered office and at the
corporate office of your Company. The Company will also make available
the audited annual accounts and related information of the subsidiary
companies, upon request by any investor of the Company.
8. PUBLIC DEPOSIT
The Company has not accepted or renewed any public deposits under
section 58A of the Companies Act, 1956.
9. DIRECTOR
Dr. Gopakumar Gopalan Nair & Dr. Gautam Kumar Das retire by rotation at
the ensuing Annual General Meeting and are proposed for re-appointment.
The Board recommends their re-appointment at the ensuing Annual General
Meeting.
Mr. Moorthy was appointed as a Deputy Managing Director w.e.f 8th day
of September, 2010.
10. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the act, as amended by the companies
(amendment) Act, 2000, the Directors confirms that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation related to
the material departures.
However, the deviation on the accounting standard has been with
reference to the scheme of amalgamation sanctioned by the Hon'ble High
Court of Karnataka for amalgamation of the company's wholly owned
subsidiary, Vedic Elements Private Limited (the Transferor Company)
with SeQuent Scientific Limited (the Transferee Company). Refer notes
to account for details on the same.
2. Appropriate Accounting Policies have been applied consistently and
have made adjustments 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 on 31st March 2011 and profit of the Company for the year ended 31st
March 2011.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on a going concern basis.
11. AUDITORS
M/s Deloitte Haskins & Sells retire as Statutory Auditors of the
Company at the ensuing Annual General Meeting and are eligible for
re-appointment.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING / OUTGO
The particulars as prescribed under Section 217 (1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
to the Directors' Report.
13. CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of
Corporate Governance specified by the Securities and Exchange Board of
India through clause 49 of the Listing Agreement. As required by the
said clause, a separate Report on Corporate Governance forms part of
the Annual Report of the Company. A certificate from the Statutory
Auditors of the Company regarding compliance with the conditions of
Corporate Governance also forms part of this Report.
14. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to clause 49 of the Listing Agreement entered into with the
Stock Exchanges, Management Discussion and Analysis Report forms part
of this Report.
15. RESEARCH AND DEVELOPMENT
A write-up on Research and Development activity forms part of the
annexure to the Directors' Report.
16. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated a Employee Stock Option Plan titled 'SSL
ESOP Scheme 2010' and the scheme is administered through a trust. As on
date, 700,000 shares have been issued to the trust and 1,00,000 options
has been granted to the Deputy Managing Director. The Company is in the
process of expanding the coverage to other employees. Details of the
ESOPs issued are provided in the corporate governance report.
Further, Statement giving additional information in terms of Regulation
12 of Securities and Exchange Board of India (Employee Stock
Guidelines, 1999) is annexed to this Directors' Report.
17. PARTICULARS OF EMPLOYEES U/S 217 OF THE COMPANIES ACT OF, 1956
Any shareholder interested in obtaining a copy of the statement of
particulars of employees referred to in section 217 (2A) of the
Companies Act, 1956, may write to the Company Secretary at the
Registered Office of the Company.
18. APPRECIATION
Your Directors would like to express their grateful appreciation for
the excellent support and co- operation received from the Financial
Institutions, Banks, Government Authorities, Reserve Bank of India,
Securities and Exchange Board of India, Stock Exchanges, Customers,
Manufacturers, Suppliers, Directors and Shareholders during the year
under review.
At this point, we would like to place on record our sincere
appreciation for the total commitment, dedication, untiring efforts and
hard work put in by the employees at all levels of the Company in
realisation of the corporate goals in the years ahead.
For and on behalf of the Board of Directors
K R Ravishankar
Chairman & Managing Director
Place: Bangalore
Date: August 12, 2011
Mar 31, 2010
We take pleasure in presenting the 25th Annual Report together with the
Audited Statement of Accounts of the Company for the financial year
ended 31st March 2010.
1. FINANCIAL RESULTS
The Highlights of the Performance of the Company during the Financial
Year ended 31st March 2010 are appended below:-
(Rs. mn)
Particulars 2009-10 2008-09
Total revenues 2463 1061
Other Income 73 18
Earnings before Interest , Depreciation & Tax 673 138
Less : Interest (187) (42)
: Depreciation (125) (41)
Profit Before Tax & Exceptional Items 361 55
Exceptional Items (58) -
Profit Before Tax 303 55
Provision for - Current Tax (65) (18)
- Deferred Tax (87) (1)
- Fringe Benefit Tax (1)
- MAT Credit Entitlement 57 -
Profit after Tax 208 35
Add: - Balance brought forward from Previous Year 129 108
Included on Amalgamation 25 -
Profit available for appropriation 362 143
Which we recommend to
appropriate as follows:
Transfer to General Reserve 16 1
Proposed Dividend 43 11
Tax on Dividend 7 2
Surplus carried to Balance Sheet 296 129
2. BUSINESS PERFORMANCE REVIEW
The Company crossed Rs. 2 billion mark, posting total revenue of Rs.
2463.35 mn during 2009-10, up by 132.26 per cent, against Rs. 1060.62
mn in 2008-09. The CompanyÃs EBIDTA increased nearly five-folds from
Rs. 138.71 mn in 2008-09 to Rs. 673.72 mn during 2009-10. The EBIDTA
margin also doubled from 13 per cent in 2008-09 to 27 per cent in 2009-
10 on account of higher realisation, bigger scale and stronger cost
control measures. The CompanyÃs PAT (after minority interest) improved
nearly five times from Rs. 35.17 mn in 2008-09 to Rs. 207.93 mn in
2009-10. On an equity of Rs. 212.35 mn, the CompanyÃs EPS for the year
stood at Rs. 9.79.
On consolidated basis, the Company posted a 97.5 per cent increase in
the total revenues, from Rs. 1440.21 mn in 2008-09 to Rs. 2844.48 mn in
2009- 10. The Company posted an EBIDTA of Rs. 848.85 mn against an
operating loss of Rs. 9.68 mn in 2008-09. The PAT for 2009-10 stood at
Rs. 374.17 mn against a net loss of Rs. 146.60 mn in 2008-09.
The Company caters to two major segment- Pharmaceuticals division
(consisting API, CRAMS and Veterinary Formulations businesses)
accounted for 76.3 per cent of the CompanyÃs revenues while the
Specialty chemicals divisions accounted for 23.7 per cent.
2009-10 was a year of key developments. The merger of erstwhile SeQuent
Scientific Limited with PI Drugs resulted in a bigger entity à both in
terms of scale of operations as well as product segment wise. The
Company dedicated its efforts towards achieving operational synergies
and harnessing the inherent growth potential of each product vertical,
under a new name ÃSeQuent Scientific LimitedÃ.
With the outbreak of swine-flu epidemic globally, the demand for
antiviral drugs catering to the segment shot up substantially. The
Company produced active pharmaceutical ingredient Oseltamivir
Phosphate, thereby resulting in improved top line. At the same time,
the Company also commercialised seven new products, being Praziquantel,
Lumefantrin,
Warfarin, Ketosulfone, Nifuroxazide, Nitroscanate and s-methoprene.
The Company also invested Rs. 210 mn in modernisation of Mangalore
plant (compliant with USFDA standards) and capacity expansion of its
Mahad unit during the year. During the year, the Company filed 14 DMFs
(Drug Master Files), taking the total DMF filing to 20.
POST BALANCE SHEET DEVELOPMENTS
In order to capitalise on the global demand for APIs and formulations,
the Company decided to foray into four new therapeutic segments Ã
Penems, Penicillin, Oncology and Phyto-Pharmaceutical/Herbal Extracts.
The Company has signed a Memorandum of Understanding with Karnataka
Government to set up three new Greenfield facilities in Bangalore, for
which it will invest Rs. 1500 mn within the next two years.
OUTLOOK
The Company expects further improvement in its performance during
2010-11 owing to culminating effect of the following internal and
external factors. It is estimated that drugs worth more than USD 200
bn are expected to go off-patent in the coming 5 years. This provides
an attractive opportunity to the API and CRAMS business verticals of
the Company. The CompanyÃs pipeline of 20 DMFs is also expected to
result in attractive growth opportunity for the Company going forward.
Besides, the CompanyÃs consistent investments in capacity and research
are also expected to bear rewarding results in the coming years.
DIVIDEND
The Board of Directors of the Company has recommended a final dividend
of Rs. 2 (20 per cent) per equity share for the year 2009-10. This, if
approved by the shareholders, would result in a dividend pay-out ratio
of 20 per cent and a cash outflow of Rs. 43 mn.
ESOP
With intent to reward its employees for their continuous hard work,
dedication and support Company proposed to grant and issue shares to
them under ESOP. The main objective of the ESOP Scheme
is to recognise employees, who are performing well, with a certain
minimum opportunity to gain from the CompanyÃs performance thereby
acting as a retention tool and also to attract best talent available in
the market. With this intention, the Company drafted a scheme of ESOP
and obtained the approval of shareholders in March 2008. Soon after
receiving the approval of shareholders, a plan for merger of erstwhile
SeQuent Scientific Limited was considered by the management and in view
of proposed changes due to merger, the ESOP was kept on hold. On
approval of merger, as the number of employees increased to a large
extent and Company also acquired various subsidiaries, the management
felt the need to modify the ESOP as approved by the shareholders in
March 2008. Shareholders have granted their approval to the revised
ESOP on 24.05.2010 by Postal Ballot. The ESOP shall be implemented
through SeQuent Scientific Employee Stock Option Scheme Trust. The
Compensation committee is in the process of finalisation of list of
employees whom shares may be granted under ESOP.
SHARE CAPITAL
The Paid-up Share Capital of the Company increased by Rs. 108.50 mn
during the financial year under review to Rs. 219.35 mn as on 31st
March, 2010. The increase was on account of the following.
1) Vide Court Order dated the 16th day of June 2009, SeQuent Scientific
Limited (ÃTransferor CompanyÃ) was amalgamated into our Company in
consideration thereof, the Company allotted seven equity shares for
each three equity shares held in the Transferor Company. This resulted
in an increase of 10.15 mn equity shares of Rs. 10 each.
2) The Company allotted 0.7 mn equity shares of Rs. 10 each to SeQuent
Scientific Employee Stock Option Scheme Trust pursuant to a Scheme of
ESOP duly approved by the shareholdersà through postal ballot on the
25th day of March 2008.
SUBSIDIARIES
After the close of financial year 2009-10, the Company has incorporated
three new companies namely M/s SeQuent Anti Biotics Private Limited,
M/s SeQuent Oncolytics Private Limited and M/s SeQuent Penems Private
Limited to venture into the Penems / Penicillins /Oncology products
Company is in the process of obtaining approval of Karnataka Udyog
Mitra to carry on new projects by the said companies. As on March
31, 2010 the Company has the following subsidiaries.
1. SeQuent Global Holdings Limited
2. SeQuent European Holdings Limited
3. SeQuent IPCO GmbH
4. Vedic Elements Private Limited
5. SeQuent Research Limited
6. Sanved Research Labs Private Limited
7. Vedic Fanxipang Pharma Chemic Company Limited, Vietnam
8. Galenica B.V., Netherland
9. Codifar N.V., Belgium
CONSOLIDATED ACCOUNTS
To save paper and the environment, Company has obtained the approval of
Central Government under section 212 for not attaching the Balance
Sheet and other documents of the subsidiaries with the Balance Sheet of
the Company. However with the requirement of Accounting standard AS 21
prescribed by the Institute of Chartered Accountants of India, the
consolidated accounts of the Company and its subsidiaries (including
joint ventures) is annexed to this report.
INTERNAL CONTROL SYSTEMS
The Company has always believed that transparency, systems and controls
are important factors in the success and growth of any organisation.
The Company has an adequate system of internal control supported by an
extensive programme of internal control and systems are established to
ensure that financial and other records reliable for preparing
financial statements. This department assumes great significance given
the size, scope and rapid rate of growth of the Company. The team is
headed by a Chartered Accountant along with senior officers to ensure
that transactions are authorised, recorded and reported appropriately.
HUMAN RESOURCES
The biggest strength of the Company has always been its people. Only
with their participation have we managed to achieve a healthy work
culture, transparency in working, fair business practices and passion
for efficiency. Thus development of human resources at all levels is
taken on priority to upgrade knowledge and skill of employees and
sensitise them towards productivity, quality, cost reduction, safety
and environment protection. The CompanyÃs ultimate objective is to
create a strong and cohesive team of employees wherein each link in the
resource chain is as strong as the other.
PUBLIC DEPOSIT
The Company has not accepted or renewed any public deposits under
section 58A of the Companies Act, 1956.
FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rule, 1988 are set out in the Annexure Ã
3 to the Directorsà Report.
DIRECTOR
Mr. Joe Thomas & Mr. R. Kannan retire by rotation at the ensuing Annual
General Meeting and are proposed for re-appointment. The Board
recommends their re- appointment at the ensuing Annual General Meeting.
Dr. Gautam Kumar Das was appointed as additional Director on the Board
in the category of Executive Director with effect from the 7th day of
January 2010. The shareholders have confirmed the appointment of Mr.
Das as director of the Company by postal ballot on May 24, 2010.
The Company has received an approval from the Central Government on the
25th day of September 2009 to pay a total remuneration of Rs. 12.00 mn
to the Managing Director à Mr. K R Ravishankar for a period of three
years with effect from the 1st day of November 2008 until the 31st day
of October 2011. During 2009-10, as the Company had sufficient
profits, the Board approved a total remuneration of Rs. 18 mn
to Mr. K R Ravishankar that is within the limit of 5 per cent of profit
as prescribed in the Act.
DIRECTORÃS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the act, as amended by the companies
(amendment) Act, 2000, the director confirms that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation related to
the material departures.
2. Appropriate Accounting Policies have been selected and applied
consistently and have made adjustments 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 on 31st March 2010 and profit of the
Company for the year ended 31st March 2010.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The Annual Accounts have been prepared on a going concern basis.
AUDITORS
M/s Deloitte Haskins & Sells retire as Auditors of the Company at the
ensuing Annual General Meeting and are eligible for re-appointment.
AUDITORS REPORT
The Notes on Account referred in the AuditorÃs Report are self
explanatory and therefore, do not call for any further clarification.
STATUS OF LISTING IN STOCK EXCHANGES
Your CompanyÃs shares are listed in Bombay Stock Exchange Limited
(BSE), P. J. Towers, Dalal Street, 25th Floor, and Mumbai à 400 001 for
which listing fees for 2009-10 has been paid.
CORPORATE GOVERNANCE
The Board of Directors of the Company has taken all necessary steps and
initiative to ensure compliance
with all the revised requirements of Clauses 49 of the Listing
agreement with the Stock Exchanges. A code of conduct as applicable to
all the directors and members of the senior management has also been
put in place.
A separate section on corporate governance and a certificate from the
Auditors of your Company regarding compliance with requirements of
corporate governance as stipulated under Clause 49 of the Listing
Agreement with Stock Exchanges, form part of Annual Report.
PARTICULARS FOR EMPLOYEES U/S 217 OF THE COMPANIES ACT, 1956
Any shareholder interested in obtaining a copy of the statement of
particulars of employees referred to in section 217 (2A) of the
Companies Act, 1956, may write to the Company Secretary at the
Registered Office of the Company.
DISCLOSURE OF INTEREST BY PROMOTERS
The promoters informed the Board of Directors of their interests in the
following new ventures which were incorporated for their other
activities.
1. Agnus Capital LLP
2. Chayadeep Ventures LLP
3. Atma Enterprises LLP
4. Triumph Ventures LLP
5. Qualichem Capital LLP
6. Triumph Fincap Holdings Private Limited
APPRECIATION
Your Directors would like to express their grateful appreciation for
the excellent support and co- operation received from the Financial
Institutions, Banks, Government Authorities, Reserve Bank of India,
Securities and Exchange Board of India, Stock Exchanges, Customers,
Manufacturers, Suppliers, Directors and Shareholders during the year
under review.
At this point, we would like to place on record our sincere
appreciation for the total commitment, dedication, untiring efforts and
hard work put in by the employee members at all levels of the Company
in realisation of the corporate goals in the years ahead.
For and on behalf of the Board of Directors
KR Ravishankar
Chairman & Managing Director
Place: Bangalore
Date: August 13, 2010