Gujarat Themis Biosyn Limited
Your Directors have pleasure in presenting herewith the 36th Annual Reporttogether with the Audited Accounts of the Company for the Financial Year ended 31stMarch 2017.
1. FINANCIAL STATEMENTS & RESULTS:
a. FINANCIAL RESULTS:
The Company's performance during the year ended 31st March 2017 as compared to theprevious financial year is summarized below: (Rs in Lakhs)
|PARTICULARS ||Year ended ||Year ended |
| ||31.03.2017 ||31.03.2016 |
|Revenue from Operation ||3585.00 ||3262.47 |
|Operating Profit / (Loss) ||601.02 ||605.45 |
|Other Income ||16.86 ||17.00 |
|Finance Cost ||(35.32) ||(37.75) |
|Profit / (Loss) before depreciation prior period adjustments &tax ||582.56 ||584.71 |
|Depreciation and amortization expenses ||(111.96) ||(119.87) |
|Prior period adjustment ||(0.64) ||(1.90) |
|Profit after depreciation exceptional item and prior period adjustments ||469.97 ||462.93 |
|Net Profit after tax ||424.53 ||462.93 |
|Surplus/(Deficit) brought forward ||(574.12) ||(1037.05) |
|Surplus / (Deficit) carried forward to Balance Sheet ||(149.60) ||(574.12) |
Your Company's performance during the year was better than the previous year as theCompany is doing Job Work for other Pharma Company with fixed contracted price. Theproduction capacity was utilized to the maximum level during both the years. Your Companyhas generated profit during the year under review as well as in the previous year. YourCompany's major operations were from Job Work. During the period conversion chargesrecorded at Rs 3585.00 Lacs (previous year Rs 3262.47 Lacs). The operating Profit for theyear is` 601.02 Lacs as compared to operating Profit of Rs 605.45 Lacs for the previousyear. The Net Profit recorded by the Company for the year is Rs 424.53 Lacs as compared tonet profit of` 462.93 Lacs in the previous year. The Company proposes to carry the profitafter tax of` 424.53 Lacs for adjustment against brought forward loses.
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year and as on the date of the report whichaffect the Balance Sheet.
The Company has filed Miscellaneous Application before Hon'ble BIFR on 5 thFebruary 2016 for deregistration of the Company from BIFR under SICA as the Company's networth turned positive. As per the recent notification by MCA on 1st June 2016MCA has constituted NCLT and NCLAT and BIFR/SICA had been repealed by the Government witheffect from 1st December 2016.
Your Company's performance for the year was far exceeding the Scheme approved by theBIFR order dated 12th January 2012.
The Company does not have any subsidiary.
The Company has no associate Company.
In view of carried forward losses your Directors do not recommend any dividend for theyear under consideration.
g. TRANSFER TO RESERVES:
Due to Carry forward losses your Board has not recommended transfer of any amount ofprofit to reserves during the year under review.
h. REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the under review. year
i. FIXED DEPOSITS:
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 (the Act) and the Companies (Acceptance of Deposits) Rules 2014.
2. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
3. STATEMENT ON DECLARATION UNDER SECTION 149(6) OF THE COMPANIES ACT 2013:
The Board has received declaration from the Independent Directors under section 149(6)of the Companies Act 2013 that they are not otherwise disqualified to be IndependentDirectors. The Board further States that all the Independent Directors are persons ofintegrity and possesses relevant expertise and experience to discharge their duties androles as Independent Directors of the Company.
4. STATEMENT UNDER SECTION 178
Your Company has Constituted Nomination and Remuneration Committee as well asStakeholder Relation Committee as contemplated under section 178(1) of the Companies Act2013. The Nomination and Remuneration Committee consider that the QualificationsExperience and positive attributes of the Directors on the Board of the Company aresufficient enough to discharge their duties as such.
During the financial year 2016-17 the Company has paid sitting fees to the IndependentDirectors only for attending Board and Audit Committee meetings.
5. BOARD'S EXPLANATION ON AUDITORS' REPORTS: I. Explanation on StatutoryAuditors' Report
Observations of Statutory Auditors on Accounts for the year ended 31stMarch 2017: There are following qualifications made by the Statutory Auditors in respectof financial statement as on and for the year ended 31st March 2017.
Point No. 1: Determination and identification of significant components of fixed assets
The Company does not foresee any major impact on the accounts of the Company due to nonreceipt of balance confirmation from the parties as stated in the auditor's report
Point No. 2: Regarding confirmation of balances
The Company is in the process of determining and identifying significant components offixed under the provisions of para 4(a) under the heading Notes after Part C in ScheduleII of the Companies Act 2013.
The management expects that this would not have a material impact on depreciation forthe quarter and year ended March 31 2017.
II. Explanation on Secretarial Auditors' Report
Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesCompany to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. H. V.Gor & Co. Company Secretaries had been appointed to conduct Secretarial Audit andissue Report for the financial year 2016-17.
Secretarial Audit Report issued by M/s. H. V. Gor & Co. Company Secretaries inForm MR-3 for the financial year 2016-17 forms part to this report. The report of thesecretarial Auditor is annexed to this report as Annexure I. The report does notcontain any qualification.
6. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not granted any loans or given guarantees covered under the provisionsof section 186 of the Companies Act 2013.
The details of the investments made by company are given in the notes to the financialstatements.
7. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
Contracts/arrangements/transactions entered by the Company during the financial yearwith related parties were on an arm's length basis and in the ordinary course of business.All related party transactions are placed for the approval before the Audit and RiskManagement Committee and also before the Board wherever necessary in compliance with theprovisions of the Act and Listing Regulations. During the year the Company has notentered into any contracts/arrangements/ transactions with related parties which could beconsidered material in accordance with policy of the Company on material related partytransactions or under section 188(1) of the Act. According there are no particulars toreport in Form AOC-2. The policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board has been adopted by the Companyand uploaded on the Company's website at the link: http://www.gtbl.in/wp-content/uploads/2015/08/Related-Party-Policy.pdf
8. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.
9. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
During the financial year 2016-17 no orders have been passed by any Regulator or Courtor Tribunal which can have impact on the going concern status and the Company's operationsin future.
10. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence no informationis provided as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014.
11. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
12. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information is provided as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014.
13. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014 is furnished.
14. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL BOARD OF DIRECTORS
During the year under review following changes took place in the Board Composition:
Ms. Dharmishtaben Rawal ceased to be associated with the Company on account of herresignation from the position of Independent Director of the Company with effect from 22ndDecember 2016. The Board places on records its appreciation for the services rendered byMs. Dharmishtaben Rawal during her tenure as Independent Director of the Company. Mrs.Peeti K. Trivedi was appointed as an Additional Director by the Board of Directors w.e.f14th February 2017. She holds office upto the date of ensuing Annual General Meeting. TheCompany has received notice from a member along with requisite deposits proposing thecandidature of Mrs. Peeti K. Trivedi for appointment as Independent Director at theensuing Annual General Meeting.
The Board recommends to the members to appoint Mrs. Peeti K. Trivedi as Director at theensuing Annual General Meeting. In accordance with the provisions of the Companies Act2013 and the Articles of Association of the Company Dr. Dinesh S. Patel (DIN: 00033273)and Mr. S. S. Lee (DIN: 01933988) Directors of the Company retire by rotation at theensuing Annual General Meeting (AGM) and being eligible offers themselves forre-appointment. The Board recommends to the members the appointment of aforesaid Directorsin the ensuing AGM of the Company. Necessary resolutions for the appointment/reappointmentof the aforesaid Directors is included in the Notice convening the ensuing AGM.
The Board of Directors met Five times during the financial st March 2017 inaccordance with the provisionsyearended31 of the Companies Act 2013 and rules made thereunder.
The Meetings of the Board of Directors are held at regular intervals of not more thanfour months in Mumbai or at other places in India as per the convenience of the Directors.These are generally scheduled well in advance. The Board meets at least once a Quarter toreview the Performance and Financial Results of the Company. All the major decisions aretaken at the Board meeting wherein directors are provided with all material information.The Senior Executives of the Company are invited to attend the Board meeting and provideclarifications as and when required.
DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2017 theBoard of Directors hereby confirms that:
i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there is no material departures according to the accounting standards;
ii) such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March
2017 and of the profit of the Company for that year;
iii) proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
iv) the annual accounts of the Company have been prepared on a going concern basis;
v) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
vi) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee of Directors is constituted by the Board ofDirectors of the Company in accordance with the requirements of Section 178 of the Act.
The Nomination and Remuneration Committee consists of Mr. Vijay Agarwal Chairman Mrs.Preeti K. Trivedi and Dr. Sachin D. Patel as the Members of the Committee.
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees.
Major criteria defined in the policy framed for appointment and payment of remunerationto the Directors of the Company are of Minimum Qualification Positive Attributes andIndependence & Experience.
The Audit Committee of Directors is constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The Audit Committee comprises of four directorsand majority of the committee members are Independent directors.
|Mr. Vijay Agarwal ||Chairman |
|Mrs. Preeti K. Trivedi ||Member |
|Mr. Siddharth Y. Kusumgar ||Member |
|Dr. Sachin D. Patel ||Member |
The scope and terms of reference of the Audit Committee is in accordance with the Actand the Listing Regulations. During the year under review the Board of Directors of theCompany had accepted all the recommendations of the Committee.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee is constituted under the provisions of Section178 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The Stakeholders Relationship Committee comprisesDr. Sachin D. Patel Dr. Dinesh S. Patel and Mr. Vijay Agarwal.
Dr. Sachin D Patel is the Chairman of the Stakeholders' Relationship Committee. TheCompany Secretary acts as the Secretary of the Stakeholders' Relationship Committee.
VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of the Company has pursuant to the provisions of Section 177(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee.
The said Policy is available on the website of the Company athttp://www.gtbl.in/wp-content/uploads/2015/08/Vigil-Mechanism.pdf The Company is committedto adhere to the highest standards of ethical moral and legal conduct of businessoperations
RISK MANAGEMENT POLICY:
We have an integrated approach to managing risks inherent in various aspect of ourbusiness.
CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors has not constituted theCorporate Social Responsibility (CSR) Committee as the Company is not crossing thresh holdlimit for CSR spending.
ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD:
Provision of the Regulation 17 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates that the Board shall monitor and review theBoard evaluation framework. The Schedule IV of the Companies Act 2013 states that theperformance evaluation of the Independent Directors shall be done by the entire Board ofDirectors excluding the director being evaluated. The Board at its meeting held on 14thFebruary 2017 has carried out an annual evaluation of its own performance Committees andIndividual Directors pursuant to the provisions of the Act and the corporate governancerequirements as prescribed by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations").
The performance of the Board and Committees was evaluated by the Board with the help ofinputs received from all the Directors and the Committee members on the basis of thecriteria such as the Board composition and structure effectiveness of Board processesinformation and functioning etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as the contribution of theindividual director to the Board and Committee meetings like ability to contribute andmonitor our corporate governance practices meaningful and constructive contribution inthe issues discussed in meetings etc. In addition the Chairman was also evaluated on thekey aspects of his role.
In a separate meeting of Independent Directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views other non-executive directors. The same wasdiscussed in the Board meeting that followed the meeting of the Independent Directors atwhich the performance of the Board its committees and individual directors was alsodiscussed. Performance evaluation of independent directors was done by the entire boardexcluding the independent director being evaluated. The Board was overall of the opinionthat the Independent Directors have contributed through the process of Board and
Committee meeting of which they are members in effective manner as per as theirexpertise in their field and needs of the organization. The suggestions and contributionsof the independent directors in the working of the Board\Committee were satisfactory andthe value addition made by such independent directors individually and as a team iscommendable
DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The Company has not paid any remuneration to the Directors during the financial year2016-17 and hence disclosure under this section is not applicable.
However in respect of Key Managerial Personnel the disclosure is attached as AnnexureII.
15. APPOINTMENT OF AUDITORS: STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 the term of appointment of M/s. Khandelwal Jain &Co. Chartered Accountants (Firm Registration No. 105049W) as the Statutory Auditors ofthe Company expires at the conclusion of the ensuing Annual General Meeting of theCompany. The Board of Directors places on record its appreciation for services rendered byM/s. Khandelwal Jain & Co. Chartered Accountants (Firm Registration No. 105049W) asthe Statutory Auditors of the Company.
It is proposed to appoint M/s. GMJ & Co. Chartered Accountants (Firm RegistrationNo.103429W) as new Statutory Auditors of the Company. M/s. GMJ & Co. CharteredAccountants are proposed to be appointed for a period of 5 continuous years i.e. from theconclusion of 36th Annual General Meeting till the conclusion of 41st Annual GeneralMeeting of the Company. M/s. GMJ & Co. Chartered Accountants have informed theCompany that their appointment if made would be within the limits prescribed underSection 141 of the Companies Act 2013. M/s. GMJ & Co. Chartered Accountants haveconfirmed that they have subjected themselves to the peer review process of the Instituteof Chartered Accountants of India (ICAI) and hold valid certificates issued by the PeerReview Board of the ICAI. M/s. GMJ & Co. Chartered Accountants have also furnished adeclaration in terms of Section 141 that they are eligible to be appointed as auditors andthat they have not incurred any disqualification under the Companies Act 2013.
The Board recommends to the members the appointment of M/s. GMJ & Co. CharteredAccountants as Statutory Auditors of the Company from the conclusion of 36th AnnualGeneral Meeting up to the conclusion of 41st Annual General Meeting of the Companysubject to ratification at every Annual GeneralMeeting.
Necessary resolution for appointment of M/s. GMJ & Co. Chartered Accountants isincluded in the Notice of AGM for seeking approval of members.
As the Company is carrying on Job Work activity as per the opinion taken on theprovisions of Section 148 of the Companies Act 2013 Cost Audit does not apply to theCompany.
16. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2017 made under theprovisions of Section 92(3) of the Act is attached as Annexure III which forms partof this Report.
b. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure IV which forms part of this Report.
c. CORPORATE GOVERNANCE
Report on Corporate Governance and Certificate of Auditors of your Company regardingcompliance of Corporate Governance as stipulated in regulation 17 to 27 and clauses (b) to(i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the Stock Exchanges are enclosed as a separatesection and a part of this report in Annexure V.
d. PREVENTION OF SEXUAL HARASSMENT:
During the financial year ended 31st March 2017 your Company has notreceived any complaint related to sexual harassment.
17. MANAGEMENT DISCUSSION & ANALYSIS:
Your Company constantly reviews its product market portfolio with the view to sustainits growth. The Company has driven fiscal growth by focusing on the following areas.
(a) Industry structure and developments:
The pharmaceutical sector of India accounts for about 2.4% of the global pharmaceuticalindustry and is expected to expand at a rate of approx 15% by 2020. During the year Indiaemerged as the third-biggest global generic Active Pharmaceutical Ingredient (API) market.
(b) Opportunities and Threats:
The pharma business related with basic human needs and introduction of innovative andcost effective medicines enjoys maximum opportunities in a densely populated country likeIndia.
Availability of sub-standards and substitute products in the market fierce competitionare major threats to the business stability for a small size Company like ours. Howeverthe management is taking all necessary steps and continuously adopting the strategy notonly to stand in the market but to perform impressively under the current scenario.
(c) Segmentwise or product-wise performance:
The Company operate in single segment i.e. pharmaceuticals. The results of the Companyunder review depict business growth during the period.
Your Company is fully aware of its capabilities and strengths and is going ahead withhand holding strategy with
Pharmaceutical majors. This strategy has paid well in the recent past. The Company isalso finding new avenues by expanding its existing production capacity.
(e) Risks and concerns:
Risks liabilities and losses are part and parcel of any industry and need to betackled through well forecasted strategies and actions.The government policies arecreating new risks for domestic market by including new molecules to the price controlumbrella and also the issuing ban on various Fixed Dose Combinations.
(f) Internal control systems and their adequacy:
The Company ensures the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies
Act 2013. The statutory auditors while conducting the statutory audit review andevaluate the internal controls and their observations are discussed with the Auditcommittee of the Board. Other statutory requirements especially in respect ofpharmaceutical business are also vigorously followed in order to have better internalcontrols over the affairs of the Company.
(g) Discussion on financial performance with respect to operational performance:
The operational performance during the year under review was one of the best in recentpast. The financial performance is getting improved due to better production output aswell as reduction of interest. However much needs to be done in this area as past lossesburden is still impacting the financial performance of the Company.
(h) Material developments in Human Resources / Industrial Relations front includingnumber of people employed:
The core of the Human Resource philosophy at Gujarat Themis is empowering humanresources towards achievement of company aspirations. Your Company has a diverse mix ofyouth and experience which nurtures the business. As on March 31 2017 the total employeestrength was 101.
Your Directors have pleasure to place on record their sincere appreciation for thecontinued co-operation and support extended to the Company by Union Bank of India all theEmployees Yuhan Corporation Indian promoters Dept. of Chemical & Petrochemical andvarious other Government authorities.
| ||For and on behalf of the Board of Directors |
| ||SD/- |
|Place : Mumbai ||Dr. Dinesh S Patel |
|Date : 10/05/2017 ||Chairman |
| ||DIN: 00033273 |