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Directors Report of Sun Pharma Advanced Research Company Ltd.

Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the Ninth Annual Report and Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULT

(Rs. in Thousands)

Particulars Year ended Year ended 31st March, 2014 31st March, 2013

Total Income 1,770,327 888,959

Profit/(Loss) before Depreciation & Tax 378,965 (190,992)

Depreciation 35,723 33,955

Profit/(Loss) before Tax 343,242 (224,947)

Tax Expense 40,000 -

Profit/(Loss) after Tax 303,24 (224,947)

Balance brought forward from Previous Year (1,437,915) (1,212,968)

Balance carried to Balance Sheet (1,134,673) (1437,915)

DIVIDEND

In view of carried forward losses, your Directors do not recommend any dividend for the year under review.

DIRECTORS

Dr. T. Rajamannar ceased to be the Whole-time Director of the Company effective April 24, 2014 and is now a Non-Executive Director of the Company, with effect from April 24, 2014. Dr. T. Rajamannar, retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment.

The Independent Directors of the Company viz. Mr. S. M. Dadha, Prof Dr. Goverdhan Mehta and Prof Dr. Andrea Vasella, are being proposed to be appointed as Independent Directors of the Company in terms of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 at the ensuing Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 ofthe Companies Act, 2013.

Appropriate resolutions for the appointment/re-appointment of Directors are being placed for your approval at the ensuing Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

SPARC, which is committed to do quality research work, has a dedicated team of about 318 employees, of which 261 are highly qualified and experienced scientists comparable to those existing internationally. We are augmenting consistently enhancing our capabilities by attracting talent and nurturing these talents for better results. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees'' career development is a part of human resources mission. We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the team''s valuable contribution and place on record their appreciation forTeam SPARC.

Information as per Section 217(2A) of the Companies Act/1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is available at the registered office of your Company. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(l)(e) of the Companies Act 1956 readwith the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure and forms part of this Report.

DIRECTORS''

RESPONSIBILITY

STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relatingto material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made

judgements and estimates that were 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 on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, and Companies Act, 2013 to the extent applicable, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a ''going concern''basis.

AUDITORS

Your Company''s auditors, M/s. Deloitte Haskins & Sells LLP (Firm''s Registration No. 117366W/W-100018), retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re- appointment.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners-your Company''s bankers, medical profession and business associatesfortheir continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip S. Shanghvi

Place: Mumbai Chairman & Managing

Date: May 3,2014 Director


Mar 31, 2013

The Directors take pleasure in presenting the Eighth Annual Report and Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULT (Rs. in Thousand)

Year ended Year ended Particulars 31st March, 2013 31st March, 2012

Total Income 888,959 301,222

Profit/(Loss) before Depreciation & Tax (190,992) (690,698)

Depreciation 33,955 31,623

Profit/(Loss) before Tax (224,947) (722,321)

Tax Expense - -

Profit/(Loss) after Tax (224,947) (722,321)

Balance brought forward from Previous Year (1,212,968) (490,647)

Balance carried to Balance Sheet (1,437,915) (1,212,968)

DIVIDEND

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year under review.

RIGHTS ISSUE

During the year under review, the Company had filed Letter of Offer ("LOF") dated 10th August, 2012, with SEBI for issue of 29,588,056 Equity shares of Rs. 1.00 each to existing shareholders on Rights Basis in the ratio of 1 Rights Share for every 7 equity shares held, at issue price of Rs. 67.00 each (including share premium). Pursuant to Rights Issue the Company had on 3rd October, 2012, allotted to the eligible shareholders, 29,588,056 Equity Shares partly paid up to the extent of Rs. 40 per share (comprising of Rs. 0.60 towards face value and Rs. 39.40 per share towards share premium) and the balance Rs. 27.00 per share (comprising of Rs. 0.40 towards face value and Rs. 26.60 per share towards share premium) was payable on Final Call.

Further the Company had announced Final Call on these shares vide Final Call Notice dated February 19, 2013, and the Final Call money was payable from March 1, 2013 up to March 21, 2013. Pursuant to receipt of Final Call Money, till the date of this report, 29,351,987 out of 29,588,056 partly paid Equity shares have been converted to fully paid shares. The remaining shares will be converted as and when the Final call money is received from the respective shareholders.

Consequent to allotment of the aforesaid shares, the Issued and Subscribed Equity Capital of the Company increased from Rs. 207,116,391 as on 31st March, 2012 to Rs. 236,704,447 as on 31st March, 2013 and the Paid-Up Equity Share Capital of the Company increased from Rs. 207,116,391 as on 31st March, 2012 to Rs. 236,599,845 as on 31st March, 2013.

Out of the proceeds of the Rights Issue, as on 31st March, 2013, the Company has utilised amount aggregating to Rs. 1027.5 million towards the Objects of the Issue, as stated in the Letter of Offer. The balance unutilised funds have been temporarily invested in liquid mutual funds / bank.

Due to inherent unpredictability in clinical trial enrolments and results, deployment of funds in clinical trials on R&D projects stated in the LOF may be staggered. The Board of Directors, therefore, at their meeting held on 24th January, 2013 decided to seek the approval of the members, by way of postal ballot, for altering the utilisation of unutilised funds out of the proceeds of the Rights Issue.

The members on 11th May, 2013, by way of resolution by postal ballot approved alteration of the Objects stated in the LOF to utilize the unutilized funds for Pharmaceutical research and development activities - Funding clinical trials in India or USA, on any existing and/ or future product/technology including S-597 nasal, Latanoprost plus Timolol combination eye drops, dry powder inhaler, Baclofen GRS Capsule and PICN.

Further, as you are aware, the Company undertakes various Research and Development activities in addition to clinical trials. Numerous allied and supporting activities need to be carried out prior to and after conducting such clinical trials. To reach the stage of clinical trials, the project has to go through various preliminary stages. The Board of Directors therefore now deem fit that the unutilzed funds of the Rights Issue would be better utilized for funding the other operational demands of this technology-intensive field, in addition to utilising the funds for Clinical Trials. Consequently, it is now intended to further alter the utilization of unutilized funds out of the proceeds of the Rights Issue to any research and development activities/expenses, including incidental, ancillary and/or support activities/ expenses incurred by the Company, directly or indirectly. The alteration of the objects of the Letter of Offer issued pursuant to the Rights Issue requires the approval of the members of the Company by way of Special Resolution, which is proposed at the ensuing Annual General Meeting for approval of members.

DIRECTORS

Prof. Dr. Goverdhan Mehta and Prof. Dr. Andrea Vasella, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

SPARC, which is committed to do quality research work, has a dedicated team of about 248 employees, of which 206 are highly qualified and experienced scientists comparable to those existing internationally. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees'' career development is a part of human resources mission. We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the team''s valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were 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 on the loss of the Company for the year under review;

(iii) that the Directors 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; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

AUDITORS

Your Company''s auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners- your Company''s bankers, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Place : Vadodara Dilip S. Shanghvi

Date : 14th May, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors take pleasure in presenting the Seventh Annual Report and Audited Accounts for the year ended 31st March, 2012.

(Rs IN THOUSAND)

Particulars Year ended 31st March, 2012 Year ended 31st March, 2011

Total Revenue 3,01,222 5,95,872

Loss before Depreciation and Tax 6,90,698 55,217

Depreciation 31,623 29,859

Loss before Tax 7,22,321 85,076

Prior Year Fringe Benefit Tax Provision written back - (69)

Loss after Tax 7,22,321 85,007

Balance brought forward from Previous Year 4,90,647 4,05,640

Balance carried to Next Year 12,12,968 4,90,647

DIVIDEND

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year.

RIGHTS ISSUE

The Members of the Company at the Sixth Annual General Meeting had passed the special resolution to offer, issue and allot equity shares not exceeding Rs 200 crores by way of the Rights Issue or by way of a qualified institutions placement or offer or otherwise. The Fund Mobilising Committee of the Company had approved offering equity shares of the Company on Rights basis for amount not exceeding Rs 200 crores. The Company had fled the Draft Letter of Offer with Securities and Exchange Board of India (SEBI) on January 31, 2012, and with the Stock Exchanges where it is listed.

Subsequently, the Company received the in-principle approval approval from The National Stock Exchange of India Ltd., and BSE Limited in respect of the Rights Issue of the Company.

The Company has further received the observation letter from SEBI. The Company has made necessary applications to the Foreign Investment Promotion Board (FIPB) and to the Reserve Bank of India (RBI) for issue of partly paid shares to the non resident shareholders and to allow renunciation of partly paid shares. The Company is awaiting the approval from FIPB and RBI, upon receipt of which the Company shall finalise and file the Letter of Offer with SEBI. Thereafter the Funds Mobilising Committee of the Company would finalise the Rights Issue price, ratio of the Rights Issue shares and the record date and file the final Letter of Offer with Stock Exchanges and open the Rights Issue.

DIRECTORS

Mr. Dilip S. Shanghvi and Mr. Sudhir V. Valia, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

The terms of appointment of Dr. T. Rajamannar as Whole-time Director will expire on 3rd June, 2013, Your Directors recommend the re-appointment of Dr. T. Rajamannar as Whole-time Director for a further period of 3 years.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

Sun Pharma Advanced Research Company Ltd., (SPARC), which is committed to do quality research work, has a dedicated team of around 250 employees. This team consists of 214 scientists who are highly knowledgeable and veterans in their field of work. We understand and value the contribution of our employees and take great pride in the commitment, competence and vigor shown by them which has helped SPARC to outshine its competitors. We strive to give our employees an environment which is conducive for their professional and personal growth and empowers them to inculcate discretionary behavior in the day-to-day functioning which leads to collective organizational success.

Your Directors truly appreciate the efforts and contribution by Team SPARC for maintaining and further accelerating the growth pace.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The additional information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were 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 on the loss of the Company for the year under review;

(iii) that the Directors 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; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

AUDITORS

Your Company's auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners- your Company's bankers, the medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.



For and on behalf of the Board of Directors

Place : Mumbai Dilip S. Shanghvi

Date : 2nd May, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors take pleasure in presenting the Fifth Annual Report and Audited Accounts for the year ended 31st March, 2010.

Financial Result (Rs. in Thousands)

Year ended Year ended 31st March, 2010 31st March, 2009

Total Income 347,404 352,705

Profit/(Loss) before Depreciation & Tax (189,447) (106,549)

Depreciation 25,991 18,364

Profit/(Loss) before Tax (215,438) (124,913)

Provision for Tax (includes Deferred Tax, Wealth Tax & Fringe Benefit Tax) 96 (33,508)

Profit/(Loss) after Tax (215,534) (91,405)

Balance brought forward from Previous Year (190,106) (98,701)

Balance carried to Balance Sheet (405,640) (190,106)

Dividend

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year under review.

Directors

Prof. Dr. Goverdhan Mehta and Prof. Dr. Andrea Vasella, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for reappointment.

Management discussion and analysis

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

Corporate governance report

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

Human resources

SPARC, which is committed to do quality research work, has a dedicated team of about 220 employees, of which 208 are highly qualified and experienced scientists comparable to those existing internationally. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees career development is a part of human resources mission.

We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the teams valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company.

However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information.

Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

Public deposits

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

Information on conservation of energy, technology absorption, foreign exchange earning and outgo

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Directors responsibility statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were 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 on the loss of the Company for the year under review;

iii that the Directors 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; and,

iv that the Directors have prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

Auditors

Your Companys auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners-your Companys bankers, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Mumbai Dilip S. Shanghvi

22nd May, 2010 Chairman & Managing Director



 
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