Your Directors are pleased to present the Twenty First Annual Report of the Companycovering the operating and financial performance together with the Audited FinancialStatements and the Auditors Report thereon for the Financial Year ended on March 312016.
The financial highlights of the Company on Consolidated and Standalone basis are asbelow:
(Rupees in Lacs)
| ||Consolidated ||Standalone |
|Particulars ||For the Financial Year ended on March 31 2016 ||For the Fifteen months period ended on March 31 2015 ||For the Financial Year ended on March 31 2016 ||For the Fifteen months period ended on March 31 2015 |
|Total Revenue ||79467.82 ||88605.58 ||58818.22 ||79853.93 |
|Profit before Interest Depreciation Exceptional Items Extraordinary Items and Tax ||18602.52 ||24177.68 ||4926.69 ||16260.83 |
|Finance Costs ||4277.04 ||4826.04 ||386.94 ||3104.40 |
|Depreciation & Amortisation Expenses ||4291.87 ||4904.83 ||611.17 ||2957.56 |
|Exceptional Items ||- ||- ||- ||523.03 |
|Profit before Extraordinary Items ||10033.61 ||14446.81 ||3928.58 ||10721.90 |
|Extraordinary Items ||(3783.19) ||- ||(3783.18) ||- |
|Profit before tax ||6250.42 ||14446.81 ||145.39 ||10721.90 |
|Provision for tax ||2842.53 ||(1220.36) ||786.26 ||(3147.06) |
|Profit/ (Loss) after tax ||3407.89 ||15667.17 ||(640.87) ||13868.96 |
|Share in Loss of Associate ||(9212.10) ||(719.18) ||- ||- |
|Net Profit / (Loss) after taxes and share in loss of associates ||(5804.21) ||14947.99 ||(640.87) ||13868.96 |
|Balance brought forward from previous year ||80533.05 ||65585.06 ||61316.80 ||47447.84 |
|Adjustment for Depreciation ||(34.51) ||- ||(34.51) ||- |
|Balance available for Appropriation ||74694.33 ||80533.05 ||60641.42 ||61316.80 |
|Proposed dividend ||1091.36 ||- ||1091.36 ||- |
|Tax on Dividend on equity shares ||222.17 ||- ||222.17 ||- |
|Tax on Dividend on preference shares ||2.62 ||- ||- ||- |
|Tax on Dividend of earlier year ||- ||- ||- ||- |
|Transfer to General Reserve ||- ||- ||- ||- |
|Balance carried to Balance Sheet ||73378.18 ||80533.05 ||59327.89 ||61316.80 |
RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS
During the financial year under review the Companys consolidated total revenuestood at Rs. 79467.82 Lacs as against Rs. 88605.58 Lacs in the previous year.
EBITDA PBT and PAT on consolidated basis reached to Rs. 18602.52 Lacs Rs. 6250.42Lacs and Rs. (5804.21) Lacs respectively. While EBITDA PBT and PAT margins onconsolidated basis stood at 23.41% 7.87% and (7.30)% respectively as against 27.28%16.32% and 16.87% respectively in previous year. EPS has decreased from Rs. 25.89 in theprevious year to Rs. (10.64) in the current year.
Due to change in Financial year from January-December to April-March as per theCompanies Act 2013 the previous period was of fifteen months from January-2014 toMarch-2015 hence not comparable with current Financial Year ended on March 31 2016.
Detailed analysis of the financials has been provided in the ManagementDiscussion & Analysis forming part of this Annual Report.
TRANSFER TO RESERVES / DIVIDEND
During the year under review the Board of Directors has recommended Final Dividend of20% i.e. Rs. 2/- per Equity Share of Rs. 10/- each aggregating to Rs. 1091.36 Lacs(excluding Tax on Dividend) for the financial year ended on March 31 2016 subject toapproval of the Members at the Annual General Meeting of the Company. The Board does notrecommend or considered appropriate to transfer any amount of profits for the financialyear ended on March 31 2016 to the reserves.
During the year under review there is no change in the paid up share capital of theCompany. Further the paid up share capital of the Company as on March 31 2016 is Rs.5456.78 Lacs.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY ANDCHANGE IN NATURE OF THE BUSINESS
During the year under review the search operations under Section 132 of the Income-taxAct 1961 (the Act) were carried out by the income-tax authorities at thepremises of the Company in the month of August 2015. The search proceedings have beencompleted and the Company has extended full co-operation to the income-tax authorities.Assessment proceedings are under progress and provision for any tax liability ifrequired shall be made on completion of assessment.
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this DirectorsReport.
There is no change in the nature of business of the Company during the year underreview.
FUTURE OUTLOOK / GROWTH PLANS
The Company has been able to grow its Speciality Injectable Business ("SIB")revenues around 50% over the previous year this is on back to around 2.5x growth inrevenues from the USA the Company has increased its management bandwidth for its frontend subsidiary in the USA as well as has plans to increase the development team in India.New product development filing and launches will allow the Company to deliver the 30-35%CAGR growth over the period of Financial Year 2015 to Financial Year 2020. During the year2016-17 the Company also expects to launch its biggest and extremely complex product tomanufacture; Profopol; in the USA. The Company expects another 7-10 ANDA approvals in theUSA during the financial year 2016-17; these approvals would effectively triple theaddressable market size of the Companys products for sales in the USA.
The Company has also invested in new technologies during the year it can nowmanufacture Aseptically filled products and also Lyophilized (freeze dried) products inthe two new lines that are installed in the Plant 2 these lines can manufactures productsin less than 10 ml fill volume and have higher capacity these lines and automation inthe Plant 1 has increased the Companys manufacturing capacities for around 100 mnunits per year to 300 mn units per year. This will help the Company to deliver its growthover the next 2-3 years.
During the year under review the Company has neither invited nor accepted any depositsfrom the public under Section 76 and Chapter V of the Companies Act 2013 and rules madethereunder.
SUBSIDIARIES AND ASSOCIATES
The Company has five Indian Subsidiaries fifteen Foreign Subsidiaries and oneAssociate Company as on March 31 2016. During the year the Company has incorporated onewholly owned subsidiary company in the name of Claris Capital Limited on June4 2015.
The consolidated financial statements of the Company and all its subsidiary companieshave been prepared and duly audited by the Auditors and forming part of this AnnualReport. Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014 a statement containing salient features of the financialstatement of subsidiaries/associate companies/joint ventures is attached to theConsolidated Financial Statements in prescribed Form AOC-1.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements and related information of the subsidiaries where applicable will beavailable for inspection during working hours at the Companys registered office inAhmedabad India for a period of twenty-one days before the date of the Annual GeneralMeeting. These are also available on the Companys website www.clarislifesciences.com
The assets/ properties of the Company are adequately insured against the loss of fireriots earthquake terrorism etc and other risks that are considered necessary by themanagement. Apart from the above the Company has also Public and Product Liability andDirectors and Officers Liability Insurance Policies.
AWARDS AND RECOGNITIONS
Focus on excellence in management practices across functions and incisive leadershiphave helped your Company to garner several organisational and individual recognitions fromthe stalwarts across the industries globally.
Asia Pacific Entrepreneurship Award
Mr. Arjun Handa Vice - Chairman & Managing Director has been conferred AsiaPacific Entrepreneurship Award 2016 in the Most Promising category byEnterprise Asia in March 2016. The Entrepreneurship Award has been bestowed upon him forhis outstanding and exemplary achievements in entrepreneurship having displayed promisingaccomplishments to advance Claris to be one of the leading businesses. This prestigiousaward at global level aptly acknowledges his business acumen and visionary leadershipwhich has led Claris to grow worldwide.
India's Best Companies to Work for 2015 Award
Your Company has been bestowed with being one of India's Best Companies to Workfor and one of the best companies in Healthcare industry in 2015 forthe 6th year in a row by The Economic Times & Great Place to WorkR Institute Indiain July 2015. Being the largest and most comprehensive survey of workplace culture incorporate India which surveyed over 700 organisations spanning 20 industries the studymeasured the level of trust pride and camaraderie among people. This achievement is areaffirmation of the unswerving belief that people are everything.
Global HR Excellence Awards
Your Company has been presented with Best Workplace Practices Award andHR Leadership Award at the 24th Global HR Excellence Awards constituted bythe World HRD Congress in February 2016. The Best Workplace Practices Awardwas conferred to your Company is a recognition of the organisational values work cultureand best of the people practices. The HR Leadership Award has been given toMr. Shyam Sharma President - HRM & Corp. Communication for his contribution innurturing organisational culture and developing best workplace practices.
Your Company has received the Gold Supplier Award for the year 2014 from MedAssets apremium Group Purchasing Organisation (GPO) in the United States. The award was presentedin April 2015 for market leading value compliance with MedAssets reporting & paymentevent participation and clinical & healthcare improvement resources to MedAssets. Theprestigious MedAssets Supplier Recognition Programme provides recognition for suppliersthat proactively and consistently bring market leading pricing cost-reduction strategiesand value extending beyond price to the industry.
Merit Certificate in In-house Communication Excellence Awards
Your Companys newsletter Claris Quarterly has been conferredCertificate of Merit for the 2nd year in a row in In-house CommunicationExcellence (ICE) Awards 2015 instituted by Shailaja Nair Foundation. This awardpresented in June 2015 promotes internal communication and recognizes and honours thebest creativity in content & design of in-house magazines.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELS
Mr. Arjun Handa Vice - Chairman and Managing Director of the Company retire byrotation at the conclusion of this Annual General Meeting and being eligible offer himselffor re-appointment. A brief resume of Mr. Arjun Handa being the Director retiring byrotation and seeking appointment/re-appointment at the ensuing Annual General Meeting isgiven in the section on Report on Corporate Governance forming part of thisAnnual Report. Mr. Arjun Handa is a Key Managerial Personnel of the Company in terms ofSection 203(1) of the Companies Act 2013.
Mr. Chandrasingh S. Purohit Whole Time Director & CFO of the Company retireby rotation at the conclusion of this Annual General Meeting and being eligible offerhimself for re-appointment. A brief resume of Mr. Chandrasingh S. Purohit being theDirector retiring by rotation and seeking appointment/re-appointment at the ensuing AnnualGeneral Meeting is given in the section on Report on Corporate Governanceforming part of this Annual Report. Mr. Chandrasingh S. Purohit is a Key ManagerialPersonnel of the Company in terms of Section 203(1) of the Companies Act 2013.
The Board of Directors appointed Mr. Amish Vyas as an Additional Non-Executiveand Non-Independent Director of the Company w.e.f. May 6 2016. Mr. Amish Vyas holdsoffice as an Additional Non-Executive and Non-Independent Director until this AnnualGeneral Meeting of the Company and is eligible for appointment as a Director who isliable for retirement by rotation. The Company has received a notice under Section 160 ofthe Companies Act 2013 from a member with requisite deposit signifying his intention topropose the candidature of Mr. Amish Vyas for the office of a Non-Executive andNon-Independent Director. A brief resume of Mr. Amish Vyas being an Additional Directorseeking appointment/reappointment at the ensuing Annual General Meeting is given in thesection on Report on Corporate Governance forming part of this Annual Report.
Mr. Chetan S. Majmudar Whole Time Director and Mr. Kirit H. Kanjaria CompanySecretary & Compliance Officer are other Key Managerial Personnel in terms of Section203(1) of the Companies Act 2013.
As on date of this Report the Board of Directors of the Company comprised of nineDirectors one of whom is the Vice - Chairman & Managing Director. The remaining eightDirectors comprises of one Chairman who is a Non-Executive and Independent Director twoWhole Time Directors three Non-Executive and Non-Independent Directors (including oneAdditional Director) and two Non-Executive and Independent Directors.
DECLARATIONS OF INDEPENDENT DIRECTORS
The Company has received declaration pursuant to Section 149(7) of the Companies Act2013 from each of its Non-Executive and Independent Directors to the effect that they meetthe criteria of independence as provided in Section 149(6) of the Companies Act 2013Regulation 16(1)(b) and Regulation 25 of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred as Listing Regulations).These declarations have been placed before and noted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors state that:
(a) In the preparation of the annual accounts for the financial year ended on March 312016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year March 31 2016 andof the profit and loss of the Company for that period;
(c ) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) They have prepared the annual accounts on a going concern basis;
(e) They have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NUMBER OF MEETINGS OF THE BOARD
During the year under review four meetings of the Board of Directors were held and onemeeting of the Board of Directors were held through circulation and the noting of the samewas done in the immediate next Board Meeting. The details of the meetings of the Board ofDirectors are given in the section on Report on Corporate Governance formingpart of this Annual Report.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company has formed Nomination and Remuneration Committee which has framedNomination and Remuneration Policy. The Nomination and Remuneration Policy inter aliadeals with the selection appointment and remuneration of the Directors Key ManagerialPersonnel and other employees of the Company including criteria for determiningqualifications positive attributes independence and other matters as provided in Section178(3) of the Companies Act 2013.
The Nomination and Remuneration Policy is given as under pursuant to Section 178(4) ofthe Companies Act 2013:
NOMINATION AND REMUNERATION POLICY
This Nomination and Remuneration Policy (hereinafter referred as the Policy)of Claris Lifesciences Limited (the Company) is designed and formulatedby the Nomination and Remuneration Committee (the Committee) of theCompany pursuant to Section 178 of the Companies Act 2013 (the Act)and rules made thereunder and Regulation 19 read with Part D of Schedule II to the ListingRegulations.
The Nomination and Remuneration Committee of the Company is required to identifypersons who are qualified to become Directors and who may be appointed in seniormanagement in accordance with the criteria laid down by the Company recommend to theBoard for their appointment and removal. Further the Committee is required to formulatecriteria and carry out evaluation of every Directors performance.
Further the Nomination and Remuneration Committee of the Company is required toformulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Directors Key managerial Personnel and other employees.
Accordingly the Policy lays down the criteria with regard to identification andnomination of persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down and also the remuneration ofDirectors Key Managerial Personnel and other employees. The Policy is designed toattract retain and motivate employees to run the Company successfully and professionally.The Policy is also designed to evaluate the performance of the Board as a whole and itsDirectors.
Part-A: Policy on Selection Criteria for Appointment as Directors and Senior Management
(1) Selection Criteria for Directors
The following broad parameters/ aspects/ criteria shall be considered while assessingthe suitability of an individual appointing a person as a Director whether ExecutiveNon-Executive or Independent on the Board of the Company:
Skills and Experience: The candidate to have appropriate skills and experience inone or more fields of finance law management sales marketing human resourcemanagement administration research corporate governance technical operations or anyother discipline related to the Companys business.
Understanding of Business: The candidate to have an understanding of theCompanys/ Groups business and related industry. Ability to handle conflictconstructively and possess the willingness to address critical issues proactively.
Age Limit: The candidate who is going to be appointed as an Executive Directorshould have completed the age of twenty-one (21) years and should not have attained theage of seventy (70) years.
Conflict of Interest: The candidate should not hold any conflicts of interest withthe Company in any manner whatsoever.
Regulatory Requirements: The number of companies in which the candidate holdsdirectorship should not exceed the number prescribed under the Act or under the ListingAgreement requirements.
Independence: The candidate proposed to be appointed as an independent directorshould not have any direct or indirect material pecuniary relationship with the Companyand must satisfy the requirements/ criteria of independence integrity relevantexpertise/ experience etc. imposed under the Act and the Listing Agreementparticularly Section 149(6) and Schedule IV of the Act.
Educational and Professional Background: The candidate should have appropriate andadequate professional qualifications and/ or experience of having run a business at seniormanagement and decision making level. The candidate should have burning desire forpersonal accomplishments and ability to influence decisions.
The Committee has the discretion to apply additional or different criteria as it maydeem fit while considering/assessing the suitability of an individual as a Director on theBoard of the Company.
Persons to be considered for appointment as directors shall be recommended to the Boardby the Committee based on the policies and principles stated above and under the Act andthe Listing Agreement
(2) Selection Criteria for Senior Management
For the purposes of this Policy Senior Management shall mean employees hired at thelevel of Corporate Functional Heads or equivalent positions employees at the seniormanagerial level and above and key managerial personnel.
The eligibility criteria for appointments to Senior Management shall have appropriateskills positive attributes qualifications and experience relevant to the position forwhich purpose the candidate is being or has been appointed.
Part-B: Policy on Remuneration of Directors Key Managerial Personnels(KMPs) and Other Employees
The remuneration of Directors KMPs and other employees shall be based on the followingkey principle:
a. The remuneration shall be based on the financial position of the Company trend inthe industry appointees qualification experience past performance pastremuneration etc;
b. The level and composition of the remuneration is reasonable and sufficient to bringabout objectivity while striking a balance between interest of the Company and theshareholders attract retain and motivate the Directors and employees of the Company andencourage behavior that is aligned to sustainable value creation;
c. Current Industry benchmarks;
d. Cost of Living.
(1) Remuneration to Executive Directors KMPs and Senior Management
Executive Directors shall be paid remuneration in compliance with the Act and otherapplicable regulatory requirements including such requisite approvals as required fromtime to time. The annual increments may be recommended by the Committee to the Board whichshall be within applicable regulatory limits. The Board may at the recommendation of theCommittee and its discretion consider the payment of such additional remuneration withinthe framework of applicable laws and regulatory requirements. The Executive Directorsshall not be paid any sitting fees for attending the Board Meeting and various CommitteeMeetings of the Company.
KMPs and Senior Management shall be paid remuneration as per the HRM Policy of theCompany in force from time to time and in compliance with applicable regulatoryrequirements. In addition to the remuneration the Company may at its discretion givePerformance Linked Incentive (on an annual basis) based on the achievement of pre-set KeyResult Areas.
(2) Remuneration to Non-Executive Directors and Independent Directors
Non-Executive Directors and Independent Directors shall be paid remuneration by way ofsitting fees if any for attending the meetings of Board and/ or Committee thereof of theCompany as decided by the Board from time to time subject to the limits specified underthe Act including any amendments thereto. In addition the Company may at its discretiongive commission within the monetary limit approved by shareholders subject to compliancewith applicable regulatory requirements.
Non-Executive Directors and Independent Directors shall also be reimbursedout-of-pocket expenses incurred by them for attending the meetings of the Board and/ orCommittee thereof of the Company.
(3) Remuneration to other Employees
The remuneration packages of other employees are also formulated in accordance with HRMPolicy of the Company in force from time to time. In addition to basic salary and othercomponents forming part of overall salary package employees are also provided withallowances perquisites and retirement benefits as per the HRM Policy of the Company andstatutory requirements where applicable.
Part-C: Policy on Performance Evaluation of Board as a Whole and its Directors
The performance of the Directors of the Company shall be subject to evaluation eachyear. The performance evaluation shall be conducted at the end of the each year based onhis attendance performance participation etc in the various meetings held during theyear. The Chairman of the Company shall initiate the process of performance evaluation ofthe Directors. The performance evaluation shall be conducted based on approved criteria inthe evaluation form.
(i) To assist in the process of assessing the participation and contribution at theBoard level of the Company; (ii) To monitor and evaluate the attainment of the Boardobjectives; (iii) To provide the Directors an opportunity to reflect on and assess theirareas of strength and development.
(3) Key Evaluation Criteria
The following broad key evaluation criteria shall be applied for evaluating theperformance of the Board and of every Director of the Company:
(i) Providing effective leadership and strategic guidance to the management;
(ii) Understanding the nuances of the business of the Company including the risks andregulatory aspects; (iii)Attendance at and active participation at the Board meetings;
(iv)Ability to drive the discussion at the Board meetings on various matters such asbusiness performance strategies risks assessment and management regulatory andcompliances and various other aspects; (v) Management of conflict of interest
The Company has devised performance evaluation framework which sets a mechanism forthe evaluation of the Board as a whole Committee and Directors. The performanceevaluation of the Board as a whole Committee and Directors was carried out through selfassessment and group discussion in and aforesaid framework.
As per existing applicable regulatory requirements the Nomination and RemunerationPolicy shall be disclosed in the Board of Directors Report.
CODE OF CONDUCT
For Board of Directors and Senior Management Group
The Board of Directors of the Company has laid down a code of conduct for all the BoardMembers and Senior Management Group of the Company. The main object of the Code is to seta benchmark for the Companys commitment to values and ethical business conduct andpractices. Its purpose is to conduct the business of the Company in accordance with itsvalue systems fair and ethical practices applicable laws rules and regulations.Further the Code provides for the highest standard of professional integrity whiledischarging the duties and to promote and demonstrate professionalism in the Company.
All the Board Members and Senior Management Group of the Company have affirmedcompliance with the code of conduct for the financial year ended on March 31 2016 asrequired by Regulation 26(3) of the Listing Regulations. A declaration signed by the Vice- Chairman & Managing Director to this effect is attached as a part of this AnnualReport. The code of conduct is also available on the website of the Company www.clarislifesciences.com
For Prevention of Insider Trading
The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015 came into effect from May 15 2015 to put in place a framework forprohibition of insider trading in securities and to strengthen the legal frameworkthereof. Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 the Company has formulated and adopted the Code ofPractices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information(Code of Fair Disclosure) of the Company. The Code of Fair Disclosure isavailable on the website of the Company www.clarislifesciences.com
Further pursuant to Regulation 9 of Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015 the Company has formulated and adoptedthe Code of Conduct for Prevention of Insider Trading. The Code lays down guidelines andprocedures to be followed and disclosures to be made while dealing with the shares of theCompany and cautioning them on the consequence of non-compliances. The Company Secretaryhas been appointed as a Compliance Officer and is responsible for monitoring adherence tothe Code. The code of conduct to regulate monitor and report trading by insiders is alsoavailable on the website of the Company www.clarislifesciences.com
Pursuant to the provisions of Sections 178(2) of the Companies Act 2013 and Regulation17(10) of the Listing Regulations the Nomination and Remuneration Committee / Board hascarried out evaluation of the performance of the Board its Committees and individualDirectors. A structured evaluation feedback form was prepared after taking intoconsideration the inputs received from the Directors covering various aspects such asboard composition flow of board process information and functioning establishment anddetermination of responsibilities of Committees and quality of relationship between theBoard and the management. The performance of Individual Directors and the Board Chairmanwas also carried out in terms of attendance contribution at the meetings circulation ofsufficient documents to the Directors timely availability of the agenda etc. Furtherpursuant to Schedule IV of the Companies Act 2013 the performance evaluation of theIndependent Directors was carried out by the entire Board of Directors of the Companyexcept the one being evaluated. The Board of Directors expressed their satisfaction withthe evaluation process.
The Company has six Committees of Board viz (a) Audit Committee (b) Nomination andRemuneration Committee (c) Stakeholders Relationship Committee (d) Corporate SocialResponsibility Committee (e) Executive Committee (f) Share Transfer Committe (uptoNovember 30 2015)
Details of the Committees of the Board vis-a-vis their terms of reference compositionnumber of meetings held during the year etc. are given in the section on Report onCorporate Governance forming part of this Annual Report.
Pursuant to Section 139 and other applicable provisions of the Companies Act 2013 andrules made thereunder M/s. Shah & Shah Associates (Firm Registration Number:113742W) Statutory Auditors Chartered Accountants Ahmedabad were appointed as aStatutory Auditors of the Company at the Twentieth Annual General Meeting held onSeptember 23 2015 for five years i.e. Financial Year 2015-16 to Financial Year 2019-2020from conclusion of Twentieth Annual General Meeting till the conclusion of Twenty fifthAnnual General Meeting subject to ratification at every Annual General Meeting.Accordingly the members are requested to ratify the appointment of M/s. Shah & ShahAssociates Chartered Accountants Ahmedabad (Firm Registration Number: 113742W) asStatutory Auditors for the financial year March 31 2017.
The eligibility certificate pursuant to Section 141 of the Companies Act 2013 and therules made thereunder is also received from the Statutory Auditors of the Company.
The Standalone and Consolidated Auditors Report for the financial year ended onMarch 31 2016 have been provided in Financial Statements forming part of thisAnnual Report.
Pursuant to Section 204 of the Companies Act 2013 and rules made thereunder theCompany has appointed M/s. SPANJ & Associates Company Secretaries as SecretarialAuditor of the Company for the financial year ended on March 31 2016. The SecretarialAudit Report for the financial year ended on March 31 2016 is attached as Annexure 1to the Directors Report and forming part of this Annual Report.
DIRECTORS RESPONSE ON AUDITORS QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMER MADE
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors in their Auditors Report or by the Company Secretary in practice in theirSecretarial Audit Report. Further pursuant to Section 143(12) of Companies (Amendment)Act 2015 the Auditors in the course of performance of their duties have not reported anyincident of fraud to the Audit Committee of the Company or the Central Government duringthe year under review.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Companies Act 2013 and rules made thereunder theextract of the Annual Return in the prescribed Form MGT 9 is attached as Annexure 2to the Directors Report and forming part of this Annual report.
Pursuant to the Regulation 34(3) read with Schedule V Part C of the ListingRegulations a Report on Corporate Governance is given separately formingpart of this Annual Report. Pursuant to Regulation 34(3) read with Schedule V Part E ofthe Listing Regulations the Certificate from M/s. SPANJ & Associates CompanySecretaries Mr. Ashish C. Doshi Partner confirming compliance with the conditions ofCorporate Governance is annexed to the Corporate Governance Report forming part of thisAnnual Report.
MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to the Regulation 34(2)(e) read with Schedule V Part B of the ListingRegulations Management Discussion & Analysis is given separately formingpart of this Annual Report.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENT
Pursuant to Section 186 of the Companies Ac 2013 and the rules made thereunderparticulars of loans given investments made or guarantee given or security provided havebeen provided in Financial Statements forming part of this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provision of Section 188 of the Companies Act 2013 and Rule 8(2) ofthe Companies (Accounts) Rules 2014 particulars of contracts or arrangements withrelated parties falling within the scope of Section 188(1) of the Companies Act 2013given in prescribed Form AOC-2 is attached as Annexure 3 to the DirectorsReport and forming part of this Annual Report.
RISK MANAGEMENT AND INTERNAL CONTROLS
A strong risk management and internal control system forms the backbone for our robustrisk management practices. In line with our commitment to provide sustainable returns toall our stakeholders Claris has clearly defined systems and policies for timelyaddressing key business challenges and opportunities.
Enterprise Risk Management
At Claris Risk Management is a key strategic focus for the Members of Board and theSenior Management. Company has formulated a ERM framework developed based on the COSO(Committee of Sponsoring Organisations of the Treadway Commission USA). The ERM frameworkincludes the process for identification evaluation monitoring and mitigation of risksrelevant to achieve the business objectives besides prioritisation of risks in terms oftheir relevance and frequency. This assists the management to prioritise the risks andfocus on high priority items which may have significant adverse impact. All key functionsof the Company are independently responsible to monitor risks associated with in theirrespective areas of operations such as production supply chain marketing financeaccounting treasury legal and others areas like health safety and environment. The mainpurpose of Risk Management is to minimise adverse impacts and to leverage marketopportunities effectively. This also helps to sustain and enhance short-term and long-termcompetitive advantages to the Company. To sustain the risk management Senior ManagementGroup will be responsible for ensuring periodic reviews in their internal functions andthen the risks prioritised based on the ERM framework of the Company will be discussed inthe Management Committee and the Audit Committee on Annual basis.
Internal Controls & Internal Financial Controls
The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthorized useor losses executing transactions with proper authorization and ensuring compliance ofcorporate policies. The Company through its own Internal Audit Department & theCo-sourced firm of Internal Auditors (M/s. KPMG Ahmedabad) carries out periodic auditsto cover all the functions & business segments based on the plan approved by the AuditCommittee and bring out any deviation to internal control procedures. The observationsarising out of audit are periodically reviewed and compliance ensured. The summary of theInternal Audit observations and status of the implementation is submitted to the AuditCommittee. The status of implementation of the recommendations is reviewed by theCommittee on a regular basis and concerns if any are reported to the Board.
The details of the risk faced by the Company and the mitigation thereof have beencovered in Management Discussion & Analysis forming part of this AnnualReport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 and rules made thereunder theCompany has established a Vigil Mechanism Policy to provide a mechanism for the Directorsand employees to report their grievances genuine concerns about unethical behaviouractual or suspected fraud and violation of the Companys Code of Conduct or EthicsPolicy. The mechanism provides for adequate safeguards against victimisation ofDirectors/employees and also provides for direct access to the Chairman of the AuditCommittee in appropriate or exceptional cases.
CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted the Corporate Social Responsibility (CSR) Committee in termsof Section 135 of the Companies Act 2013 and rules made thereunder and the composition ofCSR Committee is given under Annexure 4 to the Directors Report. The Board ofDirectors has adopted a CSR policy which inter alia contains activities that can beundertaken by the Company for CSR composition and meetings of the CSR Committee annualallocation for CSR activities areas of CSR projects criteria for selection of CSRprojects modalities of execution/ implementation of CSR projects and monitoring mechanismof CSR activities/ projects. An annual report on the CSR activities of the Company in theprescribed format is attached as Annexure 4 to the Directors Report andforming part of this Annual Report. The CSR Policy is available on the website of theCompany and link thereto ishttp://www.clarislifesciences.com/global/Financial/Corporate-Social-Responsibility-Policy.pdf
POLICY FOR PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
Your Directors state that during the year under review there were no complaintsreported under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
PARTICULARS OF EMPLOYEES
Details required pertaining to the ratio of the remuneration of each Director to themedian employees remuneration and such other details in accordance with theprovisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedas Annexure 5(A) to the Directors Report and forming part of this Annualreport.
A statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached as Annexure 5(B) tothe Directors Report and forming part of this Annual Report. However in terms ofSection 136 of the Companies Act 2013 the Annual Report are being sent to the Membersand other entitled thereto excluding the said annexure which is available for inspectionby the Members at the Registered Office of the Company during business hours on workingdays of the Company if any Member is interested in obtaining a copy thereof such Membermay write to the Company Secretary in this regard.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
In view of the nature of activities which are being carried on by the Company theparticulars as prescribed under Section 134(3) (m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 the Conservation of Energy Technology Absorptionand Research and Development are not applicable to the Company.
The Company used foreign exchange amounting to Rs. 1498.33 Lacs and earned foreignexchange amounting to Rs. 46168.72 Lacs during the year ended March 31 2016.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS
During the year under review there were no significant and/or material orders passedby any Court or Regulator or Tribunal which may impact the going concern status or theCompanys operations in future.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations read with notificationSEBI/LAD-NRO/GN/2015-16/27 dated December 22 2015 the Business Responsibility Report isto be given only by top 500 listed companies based on market capitalization therefore thesame is not applicable to the Company as on March 31 2016.
The Board of Directors greatly appreciates the commitment and dedication of employeesat all levels who have contributed to the growth and success of the Company. We also thankall our clients vendors investors bankers and other business associates for theircontinued support and encouragement during the year.
We also thank the Government of India Government of Gujarat Ministry of Commerce andIndustry Ministry of Finance Customs and Excise Departments Income Tax Department andall other Government Agencies for their support during the year and look forward to theircontinued support in future.
|For and on Behalf of the Board of Directors || |
|Arjun Handa ||Chandrasingh S. Purohit |
|Vice - Chairman & Managing Director ||Whole Time Director & CFO |
|(DIN: 00159413) ||(DIN: 00199651) |
|Place : Ahmedabad || |
|Date : May 6 2016 || |