The Directors hereby present their 39th Annual Report together with the AuditedStatements of Accounts of the Company for the year ended March 312017.
| || ||(Rs.lakh) |
| ||2016-17 ||2015-2016 |
|(Consolidated accounts) || || |
|Turnover (Net) ||14246 ||13523 |
|Other Income ||606 ||9508 |
|Total Income ||14625 ||22705 |
|Financial Cost ||486 ||410 |
|Depreciation ||447 ||1654 |
|Profit/Loss before Extra Ordinary Income ||(1445) ||6174 |
|Net Profit/(Loss) before taxation ||i (1445) ||6174 |
|Net Profit (Loss) ||(1874) ||4814 |
Your directors regret their inability to recommend payment of any dividend in view ofcarried forward loss till the year.
The Company has 9 wholly Subsidiaries and a joint venture company. These companiesoperate in the pharmaceutical and Electronics sectors. The turnover (Net) from operationsfor the year 2016-17 was Rs. 14246 lakhs showing an increase of approximately 5.5%.
Sarabhai Chemicals (India) Pvt. Ltd.
Sarabhai Chemicals has made inroads in the domestic market with key strategic productsin Oncology Infertility and Uro-gynaec areas. These three subdivisions of the company aremarketing speciality pharmaceutical products under the Sarabhai house mark.
Asence a wholly-owned subsidiary of the Company specializes in the supply of qualitypharmaceuticals preparations (Finished Dosage Forms and Active Pharmaceutical Ingredients)to the international markets.
Asence Pharma Pvt. Ltd. a wholly owned subsidiary of Asence Inc. is concentrating onits exports business along with its domestic sales and setting up a NEW finished dosagemanufacturing plant.
Vovantis Laboratories Pvt. Ltd.
Vovantis is a USFDA inspected effervescent product
manufacturing company with increased focus in USA and European markets.
Suvik a wholly owned subsidiary of the Company is manufacturing pharmaceuticalproducts and marketing various generic products in the domestic market.
Synbiotics is a growing manufacturing company in the fermentation area. It manufacturesan antifungal active ingredient product which has an expanding global market.
It has two divisions Systronics & Telerad.
SYSTRONICS is a leading manufacturerof Analytical and Test & Measuringinstruments.
Telerad is one of the oldest representatives of Sony in India promoting Broadcast andProfessional Video/Audio products of various international companies.
Pursuant to provisions of SEBI (Listing Obligation and Disclosure Requirements)Regulations2015 Management Discussion and Analysis Report Corporate Governance Reportand Auditors' Certificate regarding Compliance of Conditions of Corporate Governance aremade part of the Annual Report.
The company has nine wholly owned subsidiaries and one joint venture company. Theirperformance is integrated in the consolidated accounts.
Consolidated Financial Statement:
In compliance of the Accounting Standard AS-21 on Consolidated Financial Statementsthe Consolidated Financial Statements which form part of the Annual Report and Accountsare attached herewith.
Directors and Key managerial Personnel:
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. A H Parekhwho retires by rotation and being eligible offers himself for reappointment.
Mr. B.V. Suryakumar Independent director resigned in the current financial year due tohis other preoccupations. There is no change in Key Managerial Personnel of the company.
Declaration by Independent Directors:
The independent Directors have submitted the declaration of independence as requiredpursuant to Section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section(6).
The Board of Directors has carried out an Annual Evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by Securities and Exchange Board of India(SEBI) under Listing Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee (NRC) reviewed the performanceof the individual Directors on the basis of the criteria such as the contribution of theindividual Director to the Board and Committee Meetings like preparedness on the issue tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
Particulars of Loans Guarantees or Investments:
Information regarding loans guarantees and Investments covered under the provisions ofsection 186 of the Companies Act 2013 are detailed in the financial statements.
Related Party Transactions:
Since all the related party transactions are carried out in the ordinary course ofbusiness on arm's length basis such transactions entered into by the Company during thefinancial year did not attract the provisions of Section 188 of the Companies Act 2013 .There is no material' related party transaction. The details to be disclosed inFormAOC-2 is attached.
During the year 2016-17 pursuant to section 177 of the Companies Act2013 andSEBI(LODR) Regulations 2015 all RPTs were placed before Audit Committee for itsprior/omnibus approval.
Material Changes and Commitments:
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
Number of Meetings of the Board:
There were 5 meetings of the Board held during the year. Detailed information is givenin the Corporate Governance Report.
Extract of Annual Return :
Extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed form MGT-9 is annexed to this Report.
Policy on Director's Appointment and Remuneration and other details :
The Company's policy on directors appointment and remuneration and other mattersprovided in Section178(3) of the Act has been followed by Nomination and RemunerationCommittee while recommending appointment of Directors or Key Managerial Personnel. Theyhave fixed criteria for appointment of directors and key Managerial Persons. Every yeartheir performance is evaluated by the committee and accordingly suitable recommendation ismade.
Internal Financial control systems and their adequacy:
The company has an Internal control System commensurate with size scale and complexityof its operations. During the year the company got its Internal Audit done through its ownInternal Audit Department. This department works according to policies and rules framed tomonitor and control Financial transactions within the company. The Company has alreadyappointed an Internal Auditorduring the current year.
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.
Auditors' Report and Secretarial Auditors' Report:
Auditors' report does not contain any qualifications reservations or adverse remarks.Report of the Secretarial Auditor is given as an annexure which forms part ofthis report.Regarding appointment of CFO the Company is in the process of selecting a suitable personfor the post of CFO. It is expected that CFO will be appointed soon by the company. TheCompany has already appointed Internal Auditors in current financial year.
The Audit committee of the Company is assigned the task to frame implement and monitorthe risk management plan for the Company. The Committee is responsible for reviewing therisk management plan and ensuring its effectiveness. The Audit Committee has additionaloversight in the area of financial risks and controls. Major risks identified by thebusiness and functions are systematically addressed through mitigating actions on acontinuing basis.
Corporate Social Responsibility:
The company was incurring losses for last many years however due to income from saleof land the company had shown profit ofabout Rs45.00 crores for the last financial yearof 2015-16. Since the profit is achieved due to sale of assets and not from businessactivities the same shall not be calculated under provisions of section 198 of thecompanies Act 2013 as income for the purpose of this section. Hence company is notrequired to spend on CSR activities. Although the Company has adopted a Corporate SocialResponsibility Policy and set up a committee of following directors to frame anappropriate policy to decide the programmes /activities to be undertaken by the companytowards its Corporate Social Responsibility
Mr. Kartikeya Sarabhai - Chairman Mr Anil H. Parekh - Member Mr Ashwin Hathi - Member
Particulars of Employees:
The information required under Section 197 of the Act read with the rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will beprovided upon request in terms of section 136 of the Act the reports and accounts arebeing sent to the members and others excluding the information on employees' particularswhich is available for inspection by members at the registered office of the companyduring 11.00 to 4.00 p.m. on working days of the Company upto the date of AGM. If anymember is interested in obtaining a copy thereof he/she may write to SecretarialDepartment of the Company.
There is no employee drawing salary in excess of limit prescribed in Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
The Company has not accepted any fixed deposit during the year neither there was anyunpaid/unclaimed amount of deposit at the beginning of the year or attheend of the year.
Details of Significant Orders passed by Regulators or Courts:
There is no significant or material orders passed by any regulators or courts duringthe financial year.
Disclosure Pursuant to section 197(14) of the Companies Act 2013:
No Wholetime director of the company was in receipt of any remuneration or commissionfrom the company's holding or subsidiary companies during the financial year.
Details of Establishment of Vigil Mechanism:
The company has formulated a whistle Blower Policy to establsih a vigil mechanism fordirectors and employees of the company to report concerns about unethical behaviouractual or suspended fraud or violation of company's code of conduct policy.
Disclosure under Sexual Harrassment of Women at Wokplace (Prevention Prohibition andRedressal) Act 2013:
The company has established Internal Complaints committee to redress the complaintsreceived from any woman employee of the company as required under the proviisons of Act.
There was no fraud reporting by the Auditors of the company under section 143 (12) ofthe Companies Act 2013 to the Audit Committee or the Board of Directors during the yearunder review.
Energy Conservation Technology Absorption and Foreign Exchange earnings and outgo:
Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand outgo required to be given are given in the Annexure to this Report in the prescribedformat.
Directors' Responsibility Statement:
As required under Section 134(5) of the Companies Act 2013 we hereby state:
(i) That in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures if any.
(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive true and fair view of the state of affairs of the Company as at 31st March 2017.
(iii) That the Directors have taken proper and sufficient care of the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
(iv) That the Directors have prepared the annual accounts on a going concern basis.
(v) That the directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively.
(vi) That the Directors have devised proper systems to ensure compliances with theprovisions of all applicable laws and the systems are adequate and operating effectively.
Building Plant and machinery and stocks have been adequately insured. The companycarries a risk for certain assets like goods in transit in respect of which any lossresulting from non-insurance is small because of fairly large drop in production andsales.
Pursuant to Section 139 of the Companies Act 2013 and the Rules made thereunder theexisting Auditors M/s. Sorab S. Engineer & Co. Chartered Accountants Mumbai(Reg.No. 110417W) shall vacate their office from the conclusion of this Annual GeneralMeeting. M/s. Khandhar & Associates Chartered Accountants Ahmedabad are appointedas Auditors by the Board and recommended for approval of shareholders at the forthcomingAnnual General Meeting to hold office until the conclusion of the 44th Annual GeneralMeeting.
Your Directors would like to take this opportunity to express their deep sense ofgratitude to the banks
Government Authorities Customers and Shareholders for their continuous guidance andsupport. Further they would also like to place on record their sincere appreciation forthe dedication and hard work put in by one and all members of Sarabhai Pariwar includingworkers.
| ||For and on behalf of the Board |
|Date: 10.8.2017 ||Kartikeya V. Sarabhai |
|Place: Ahmedabad ||Chairman |