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Directors Report of Shasun Pharmaceuticals Ltd. Company
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Directors Report of Shasun Pharmaceuticals Ltd.

Mar 31, 2013

Dear Shareowners,

The Directors take pleasure in presenting the Thirty Eighth Annual Report of your Company together with the audited statement of accounts for the year ended March 31, 2013.

FINANCIAL RESULTS

Rs. in Mn

Financial Results for the year ending Standalone Consolidated

31.03.2013 31.03.2012 31.03.2013 31.03.2012

Gross Revenue 7964.11 7768.73 11030.52 11073.23

Profit before interest, Depreciation and Tax 817.83 924.82 1352.31 1639.02

Profit before tax 236.34 372.73 503.96 796.33

Profit after tax 262.78 530.58 530.36 1005.67

Appropriated as follows

Dividend on Equity Shares 84.94 119.14 84.94 119.14

Tax on Dividend 14.43 19.33 14.43 19.33

Transfer to General Reserve 26.28 53.06 26.28 53.06

EPS (diluted) on the basis of Rs 2/- share 4.76 10.76 9.61 20.39

A detailed analysis of the operations of the Company has been provided in the management discussion and analysis report, which forms a part of this annual report

1. Dividend

The Board of Directors of the Company are pleased to recommend a dividend of Rs. 1.50 per equity share of Rs. 2.00 each for the financial year of 2012-13. This dividend, if approved at the ensuing AGM, will be paid to those shareholders whose names appear on the register of members of the Company as on August 2, 2013. The total outflow on account of dividend, including the tax on distributed profits, is Rs. 99.37 Mn (Rs. 138.47 Mn for the previous year)

2. Directors

In accordance with the Articles of Association of the Company, Mr. R. Kannan and Mr. N. Subramanian retire by rotation and are eligible for reappointment.

The Board appointed Prof. Indira J Parikh as Additional Director on the Board of Directors of the Company on August 2, 2012. She will hold this office till the next Annual General Meeting of the Company. Due notice has been received from a member proposing her appointment. It is proposed to appoint her as Director of the Company liable to retire by rotation. The resolution for the same has been included in the notice of the Annual General Meeting.

3. Allotment of Equity Shares upon conversion of Warrants

During the year under review, based on your approval, the Company allotted 15,00,000 equity shares at a price of Rs. 75 per share upon conversion of warrants on a preferential basis to promoter group and directors.

4. Auditors

The Statutory auditors of the Company, M/s B.S.R. & Co., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment.

5. Cost Audit

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company. Subject to approval from the Central Government, the Board has appointed M/s. Geeyes & Co., Cost Accountants as cost auditor of the Company for the financial year 2013-14. The Cost Audit is under process and the Company will submit the cost audit report to the Central Government within the prescribed time.

6. Listing arrangements

The company''s shares are listed in the BSE Ltd. and National Stock Exchange of India Ltd., and the annual listing fee has been paid to these stock exchanges.

7. Subsidiaries

The company has five subsidiary companies as on March 31, 2013. The members may refer to the statement under Section 212 of the Companies Act, 1956, and the information on the financials of the subsidiaries appended to the above statement under Section 212 of the Companies Act, 1956, in the Annual Report for further information on these subsidiaries.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account, and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies in prescribed formats.

8. Environment, Health & Safety

Shasun has a team of experienced and competent resources in the management of Environment, Health and Safety. EHS plays an integral part of the business. The EHS resource team is well structured catering to Process safety, General & Occupational Health and Safety, Fire Safety, Compliance management and ETP operations at the site level, managed by the Corporate EHS under the guidance of the Director - EHS.

The team invests proactively in process safety studies like Hazardous Area classification, Consequence Analysis / Quantitative Risk Analysis PHA, What-if analysis, HAZOP and Work place Chemical Risk Assessments.

Towards better EHS management and operational control, the Environmental Management System (EMS ISO 14001:2004) and the BS OHSAS 18001:2007 are well integrated as Integrated Management system, which is periodically audited for the adequacy and continual improvement. The recent award given by CII for the EHS excellence & NSC award given for best Safety Practices stand testimony.

From the Environmental protection front, Shasun has taken many water recycling and reuse initiatives through Advanced treatment technologies like Electrochemical oxidation and coagulation. Towards better treatment efficiency and Wastes reduction, increased focus is given by implementing comprehensive Source Segregation Scheme. The Hazardous waste disposed in time through TSDF. Solid waste management has been improved through environment friendly recycling/reuse of wastes in collaboration with reputed organizations for paper recycling, plastic waste recycling and E-waste recycling. As part of Corporate Social Responsibility, the company has undertaken various activities in the field of health care, education and social infrastructure development which is elaborated in the Corporate Social Responsibility section.

9. Corporate Governance and Management Discussion and Analysis

The Corporate Governance and Management Discussion and Analysis reports as set out in annexure hereto form an integral part of this report. A certificate from the auditors of the Company certifying compliance of the conditions of corporate governance as stipulated in Clause 49 of the listing agreement with stock exchanges is also annexed to the report on Corporate Governance.

10. Personnel

The Directors wish to place on record their appreciation to the employees for their notable contributions to the Company and for the co-operation extended to the management in maintaining harmonious industrial relations at all the units.

11. Particulars of Employees

The Statement of Particulars of Employees, providing information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, form a part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding this statement is being sent to all the members. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the Registered Office.

12. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended up to date is annexed hereto and the same forms part of the report.

13. Directors'' Responsibility Statement

In terms of the provisions of section 217(2AA) of the Companies Act, 1956, your Directors confirm as under:

a) That in preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure has been made from the same.

b) That they have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the profit or loss of the company for that period.

c) That they have taken proper and sufficient care 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.

d) That they have prepared the annual accounts on a going concern basis.

14. Public Deposits

The company has not accepted any public deposits.

15. Acknowledgement

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks during the year under review. Your Directors also place on record their deep sense of appreciation for the continued support of customers, suppliers and investors of the Company.

For and on behalf of Board of Directors

Place : Chennai S. Abhaya Kumar Dr. S. Devendra S. Vimal Kumar

Date : May 29, 2013 Managing Director Wholetime Director

Wholetime Director


Mar 31, 2011

The Directors take pleasure in presenting the Thirty Sixth Annual Report of your company together with the audited statement of accounts for the year ended March 31, 2011.

FINANCIAL RESULTS

(Rs. in Mn) Standalone Consolidated

Financial Results for the year ending 31.03.2011 31.03.2010 31.03.2011 31.03.2010

Gross Revenue 5,822.96 5,567.24 8,555.87 8,233.94

Profit before interest, depreciation and Tax 540.75 665.74 925.98 699.66

Profit before tax 83.59 202.98 235.95 20.13

Profit after tax 48.77 220.64 266.24 37.67

Appropriated as follows

Dividend on Equity Shares 14.56 48.31 14.56 48.31

Tax on Dividend 2.36 8.21 2.36 8.21

Transfer to General Reserve 5.00 22.04 5.00 22.04

EPS (diluted) on the basis of Rs.2/share 1.00 4.54 5.48 0.41

A detailed analysis of the operations of the company has been provided in the management discussion and analysis report, which forms a part ofthis annual report.

1. Dividend

The Board of Directors of the company are pleased to recommend a dividend of Rs. 0.30 per equity share of Rs. 2 each for financial year 2010-11. This dividend, if approved at the ensuing AGM will be paid to those shareholders whose name appear on the register of members of the company as on July 29, 2011. The total outflow on account

of dividend including tax on distributed profits is Rs. 16.92 Mn ( Rs. 56.52 Mn for previous year )

2. Directors

In accordance with the Articles of Association of the Company, Dr. S. Devendra and Mr. S. Abhaya Kumar retires by rotation and are eligible for reappointment.

The Board appointed Mr. R. Kannan as additional director on the Board of Directors of the Company on July 30, 2010. He will hold this office till the next Annual General Meeting ofthe Company. Due notice has been received from a member proposing his appointment. It is proposed to appoint him as Director of the Company liable to retire by rotation. The resolution for the same has been included in the notice ofthe Annual General Meeting.

Mr. N. Govindarajan resigned from the position of Managing Director with effect from July 30, 2010 and from the position of Director with effect from August 31, 2010.

Mr. S. Vimal Kumar, Wholetime Director was re- designated as Managing Director in July 2010 and held office of Managing Director till March 31, 2011. Mr. S. Abhaya Kumar, Wholetime Director was re-designated as Managing Director with effect from April 1, 2011. The same has been approved by the members at the Extra-Ordinary General Meeting ofthe Company held on 24th March, 2011.

Mr A. Mahendran stepped down as director from May 30, 2011. Board recorded their appreciation of the leadership provided by him during his tenure as the Chairman of the Company.

The Board appointed Mr. R. Sundara Rajan as director on the Board of Directors ofthe Company on May 30, 2011. He will hold this office till the next Annual General Meeting of the Company. Due notice has been received from a member proposing his appointment. It is proposed to appoint him as director ofthe Company liable to retire by rotation. The resolution for the same has been included in the notice of the Annual General Meeting.

3. Change of Name

The Company name has been changed from Shasun Chemicals and Drugs Limited to SHASUN PHARMACEUTICALS LIMITED during the year after complying with the necessary formalities.

4. Auditors

The Statutory auditors ofthe company, M/s. Jagadisan & Co. Chartered Accountants submitted their resignation in January 2011 and the Board accepted the same. At the Extra Ordinary General Meeting held on 24th March, 2011, M/s. B S R & Co. Chartered Accountants were appointed as Statutory Auditors and they will hold office upto conclusion of the Annual General Meeting.

The Statutory auditors of the company, M/s B S R & Co. Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment.

5. Cost Audit

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company.

Subject to the approval from the Central Government, Board has appointed M/s. Geeyes & Co. Cost Accountants, as cost auditor ofthe Company for the financial year 2011-12.

6. Listing arrangements

The companys shares are listed in Bombay Stock Exchange and National Stock Exchange and the annual listing fee has been paid to these exchanges.

7. Subsidiaries

The company has five subsidiary companies as on March 31, 2011. The members may refer to the Statement under Section 212 ofthe Companies Act, 1956 and the information on the financials ofthe subsidiaries appended to the above statement under Section 212 ofthe Companies Act, 1956 in the Annual Report for further information on these subsidiaries.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors of the Company at their meeting held on May 30, 2011 has, by resolution passed there at, given their consent for not attaching the Annual reports of the subsidiaries to the Balance Sheet of the Company. The Company will make available the Annual Accounts ofthe subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered office ofthe Company. The consolidated financial statements presented by the company include the financial results of its subsidiary companies.

8. Joint Venture

The company has forneda new50:50joint venture compan Shasun NBI LLC" in USA with Nanoparticle Biochem Inc along with the support of University of Missouri USA. This company is involved in the development of proprietary process for generating gold nanoparticles for use in therapy & medical diagnostics. The new ioint venture company will continue research and pre-chmcal testing work that is required for the treatment to receive approval for human use.

9. Cuddalore Incident

The operations at Cuddalore was interrupted for 45 days from March 7, 2011 to April 22, 2011 due to an unfortunate fire accident and bromine leakage in storage area. Operations were resumed after strengthening the safety measure in the bromine storage area.

The company has preferred insurance claim and it is under consideration.

10. Strike at Puducherry API Plant

Puducherry API Plant was shut for 15 days in May, 2011 due to strike by the workers. The Plant resumed the operations after an amicable long term settlement reached with the union.

11. Safety and Environment

Shasun enjoys the services of a team experienced and competent in the management of Environment, Health and Safety issues. The team invests proactively in impact mitigation initiatives coupled with simulation. All modern

tools and techniques like PHA, Hazop and PSM are encompassed to improve Environment, Health and Safety. Internal and external audits measure our Environment, Health and Safety performance and also inspire the company to achieve an international standard with zero deviations. ISO 14001 and ISO 2007 certificates for both Pondy and Cuddalore APIs are the testimony of this.

At Shasun Pharmaceuticals Limited, a responsible Environment, Health & Safety (EHS) commitment is integral to our existence. Regular audits are conducted and improvements carried out to provide a safe and secured atmosphere.

The companys focus extended beyond employees to community and customers. As apart of social accountability, the company organizes various health related medical programs both in Cuddalore and Puducherry.

12. Corporate Governance and Management Discussion and Analysis

The Corporate Governance and Management Discussion and Analysis reports as set out in annexure hereto form an integral part of this report. A certificate from the auditors of the company certifying compliance of the conditions of corporate governance as stipulated in Clause 49 of the listing agreement with stock exchanges is also annexed to the report on corporate governance.

13. Personnel

The Directors wish to place on record their appreciation to the employees for the co-operation extended to the management in harmonious industrial relations at the various units as well as their notable contributions at the workplace.

14. Particulars of Employees

The statement of particulars of employees, providin , information as per Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules, 1975, form a part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding this statement is being sent to all the members. Any member interested in obtaining a copy of this statement may write to the Company Secretary at its registered office.

15. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo as required 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 forms part of the report.

16. Directors Responsibility Statement

In terms of the provisions of Section 217(2AA) of the Companies Act 1956 your Directors confirm as under:

a) That in preparation of the annual accounts the applicable accounting standards have been followed and that no material departure have been made from the same.

b) That they have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the profit or loss of the company for that period.

c) That they have taken proper and sufficient care 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.

d) That they have prepared the annual accounts on a going concern basis.

17. Public Deposits

The company has not accepted any public deposits.

18. Acknowledgement

Your Directors would like to express their grateful appreciation for the assistance and co-operation received fromtheBanksduringtheyearunder review.Your Directors also places on record their deep sense of appreciation for the continued support of customers, suppliers and investors of the company.

For and on behalf of Board of Directors

Place: Chennai S. Abhaya Kumar Dr. S. Devendra S. Vimal Kumar Date: May 30, 2011 Managing Director Wholetime Director Wholetime Director

 
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