Your Directors have great pleasure in presenting the 21st Annual Report together withaudited statement of accounts for the year ended 31st March 2016.
|FINANCIAL RESULTS || || |
| || ||(Rs. in Millions) |
|Particulars ||Year Ending 31st March 2016 ||Year Ending 31st March 2015 |
|Sales (net of excise) and other income ||6529.29 ||6679.90 |
|Profit before Interest Depreciation Tax & Amortisation ||1208.81 ||1111.61 |
|Less: - Interest ||1064.08 ||1172.86 |
|- Depreciation ||847.49 ||842.90 |
|- Impairment of Assets ||Nil ||Nil |
|- Extra Ordinary Item ||145.81 ||527.91 |
|Loss / (Income) on sale of fixed assets ||-17.20 ||0.78 |
|Profit / (Loss) before Tax ||(831.36) ||(1432.85) |
|Less: - Provision for tax ||Nil ||Nil |
|- Income tax adjustment of previous years ||Nil ||Nil |
|- Mat Credit Entitlement ||Nil ||Nil |
|- Provision for Fringe Benefit Tax ||Nil ||Nil |
|- Provision for Deffered Tax ||(242.75) ||(237.74) |
|Profit (Loss) after Tax (A) ||(588.61) ||(1191.63) |
|Amount B/F from Previous year(B) ||(313.46) ||878.18 |
|Profit (Loss) after Tax available for Appropriations (A+B) ||(902.07) ||(313.46) |
|Transfer to deferred tax liability ||Nil ||Nil |
|Provision for Dividend on Equity shares ||Nil ||Nil |
|Provision for Equity Dividend Tax ||Nil ||Nil |
|Transfer to General Reserve ||Nil ||Nil |
|Balance carried forward to Balance sheet ||(902.07) ||(313.46) |
OPERATIONS AND BUSINESS PERFORMANCE
During the current financial year the Company has achieved a turnover of Rs. 6529.29millions against the turnover of Rs. 6679.90 millions during financial year 2014-15. TheCompany has significantly recovered from losses as Net loss during 2015-16 is Rs. (588.61)millions against loss of Rs. (1191.633) millions in 2014-15. The Company's exportsremained stable at 4457.58 millions in 2015-16 against Rs. 4304.30 millions during2014-15. There has been no change in the nature of business of the company during the yearunder review. Kindly refer to Management Discussion & Analysis & CorporateGovernance Report which forms part of this report.
CONSOLIDATED FINANCIAL PERFORMANCE
Your company recorded a consolidated turnover of Rs. 6674.36 Millions during 2015-16against the turnover of Rs. 6827.06 Millions during 2014-15. In consolidated terms theCompany suffered a loss of Rs. 586.88 Millions in 2015-16 against loss of Rs. 1193.68Millions in 2014-15. The Consolidated financial figures include the respective financialfigures of the Company's three subsidiaries and one Associate Company. As required underthe provisions of the Companies Act 2013 and SEBI (LODR) Regulations 2015 AuditedConsolidated Financial Statements form part of the Annual Report and the same are annexedto this Report.
Sh. S R Mehta (DIN No. 00005668) and Sh. Rishav Mehta (DIN: 03028663) Directorsretire by rotation at the ensuing Annual General Meeting ("AGM") and beingeligible offer themselves for re-appointment. The Board recommends their re-appointment.
In terms of the Companies Act 2013 ('Act') Independent Directors are required to beexcluded while computing the number of Directors to retire by rotation. Accordingly onlythe promoter directors have been considered for calculating the number of those who are toretire by rotation.
In accordance with Section 149(11) of the Companies Act 2013 the current tenure ofIndependent Directors of the Company (except Sh. Prabhat Khurana) is for a term of 5consecutive years from the date of their respective date of appointment. Sh. PrabhatKhurana who was appointed as Independent Director for a period of one year w.e.f.25.03.2015 was re-appointed as Independent Director by the Board for a period of 5 yearsw.e.f. 25.03.2016. The Board has proposed re-appointment of Sh. Prabhat Khuarana forapproval of shareholders in the ensuing AGM. Ms. Preetika Chaubey Independent WomanDirector of the Company ceased to be a Director w.e.f. 11.08.2016.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the applicableprovisions of Section 149 of the Companies Act 2013.
During the year six Board meetings were held on 16th May 2015 19th June 2015 8thAugust 2015 9th October 2015 24th October 2015 and 10th February 2016. The detailsregarding the meetings are given in the Corporate Governance Report.
A Report on Corporate Governance forms part of this Annual Report. The Auditors'certificate certifying compliance with the conditions of Corporate Governance underRegulation 34(3) read with Schedule V of the SEBI (LODR) Regulations 2015 is annexed as Annexure1 to this Report.
CORPORATE DEBT RESTRUCTURING
As on 31st March 2016 some of the CDR Lenders viz. Catholic Syrian Bank State Bank ofTravancore Allahabad Bank State Bank of Hyderabad & Central Bank of India haveassigned their Loans to Asset Reconstruction Companies (ARC). The Company is making allefforts to make settlement with other Banks and transfer their accounts to ARC. The entireamount of Promoters Contribution required to be infused by the Company as per CDRrequirement has been infused during the year. The Company is awaiting necessary approvalfor the allotment of equity shares to promoters against the promoters contribution infusedby them.
In view of financial losses the Board has not recommended any Dividend for theFinancial Year 2015-16.
Unpaid dividend outstanding as on 31.03.2016 is Rs. 9.76 lacs (Previous year Rs 13.51lacs). During the financial year an amount of Rs. 3.88 lacs was transferred to centralgovernment account (IEPF) on account of unpaid dividend for the financial year 2007-08.
EMPLOYEE STOCK OPTION SCHEME
The members of the Company have approved 'Employee Incentive Scheme 2014' in the Annualgeneral Meeting of the Company held on 30th September 2014.
The Scheme is being implemented by the Company and the in-principle approval of theStock Exchanges for Listing of Securities to be issued under the said scheme has beenobtained.
The Compensation Committee Constituted in accordance with the SEBI Guidelinesadministers and monitors the Scheme. The applicable disclosures as stipulated under theRegulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 with regard toCompany's "Employee Incentive Scheme 2014" are available on the website of theCompany at www.indswftlabs.com and the weblink for the same is:http://www.indswiftlabs.com/pages/Disclosure_regarding_Employee_Stock_Options.pdf
CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES
The Company's shares are listed on the National Stock Exchange of India Limited (NSE)and Bombay Stock Exchange Limited (BSE) and are actively traded.
During the year under review their is no change in Capital Structure of the Company asno new shares were issued.
As on 31.03.2016 your Company had 3 Subsidiaries. The US subsidiary of the Companyviz. Ind-Swift Laboratories Inc. achieved net sales of $ 3970118 and recorded a netProfit of $ 63815. The Singapore Subsidiary viz Meteoric Life Sciences PTE Ltd. has nosales and recorded a net loss of $ 3194.72. The Dubai Subsidiary viz. Ind-Swift MiddleEast FZE has not started operations yet.
Pursuant to the first proviso to Section 129(3) of the Companies Act 2013 and Rules 5and 8(1) of the Companies (Accounts) Rules 2014 the salient features of the financialstatements performance and financial position of each subsidiary and a joint venture isgiven in Form AOC - 1 as Annexure 2 to this report. The Company has framed a policyfor determining material subsidiaries which has been uploaded on the Company's website.
The Statutory Auditors of the Company M/s Jain & Associates Chartered Accountants(Regd. No.001361N) retire at the conclusion of ensuing Annual General Meeting. They haveconfirmed their eligibility and willingness to accept the Office of Auditors ifreappointed for the year 2016-17. The Audit Committee and the Board of Directors recommendthe appointment of M/s Jain & Associates as Statutory Auditors of the Company for thefinancial year 2016-17 for shareholders approval.
With regard to emphasis of matter contained in the Auditors' Report the Board is ofthe view that the same are self explanatory.
M/s Anju Sharma & Associates Chartered Accountants performs the duties of internalauditors of the company and their report is reviewed by the audit committee from time totime.
COST-AUDITORS AND THEIR REPORT
M/s. V. Kumar & Associates Cost Accountants have been duly appointed as CostAuditors of the Company for audit of cost accounting records which are covered under theCost Audit Rules for current financial year ending March 31 2017.
As required by Section 148 of the Companies Act 2013 necessary resolution has beenincluded in the Notice convening the Annual General Meeting seeking ratification by theMembers to the remuneration proposed to be paid to the Cost Auditors for the financialyear ending March 31 2017.
The Cost Audit Reports are required to be led within 180 days from the end of thefinancial year. The Cost Audit Reports for the financial year 2014-15 issued by M/s V.Kumar and Associates Cost Auditors was led with Ministry of Corporate Affairs within thestipulated time. The Cost Audit Reports for the financial year ended March 31 2016 willbe led within the prescribed period.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr.Vishal Arora Practising Company Secretary was appointed as Secretarial Auditors ofthe Company for the financial year 2015-16 pursuant to Section 204 of the Companies Act2013. The Secretarial Audit Report submitted by him in the prescribed form MR- 3 isattached as Annexure 3 and forms part of this report. There are no qualificationsor observations or other remarks of the Secretarial Auditors in the Report issued by themfor the financial year 2015-16 which call for any explanation from the Board of Directors.
The aggregate amount of fixed deposit outstanding as on 31st March 2016 was Rs. 67.03crores approx. (previous year Rs. 82.33 crores).
The Hon'ble Company Law Board vide its order No.CP27/01/2013 dated 30th September 2013has granted extension of time in repayment of deposits. Now the Company is makingrepayment to the fixed deposit holders in terms of the aforesaid order of Hon'ble CLB.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 (2) (e) of the SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of the Annual Report.
The Annual Listing fee for the year under review has been paid to The BSE Limited andThe National Stock Exchange of India Ltd.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The particulars as prescribed under 134(3)(m) of the Companies Act 2013 read with Rule8 of The Companies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption and foreign exchange earnings and outgo are given in Annexure 4.
NOMINATION AND REMUNERATION POLICY
The Company has a Nomination and Remuneration Policy. In compliance with the provisionsof Sections 134(3)(e) and 178 of the Companies Act 2013 and Regulation 19 read with PartD of Schedule II of the SEBI (LODR) Regulations 2015 the Nomination & RemunerationCommittee:
i) has formulated criteria for determining qualifications positive attributes andindependence of a director and recommends to the Board Policy relating to remunerationfor directors KMP and other employees;
ii) has formulated the evaluation criteria for performance evaluation of independentdirectors and the Board;
iii) has devised a policy on Board diversity.
iv) identifies persons who are qualified to become directors or may be appointed inSenior Management in accordance with criteria laid down and recommend to the Board theirappointment and removal;
v) recommends to the Board whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors.
PARTICULARS OF EMPLOYEES
Particulars of employees required to be furnished pursuant to the provisions of Section197 of the Companies Act 2013 (Act) read with Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are given as an Annexure to thisReport. However pursuant to the provisions of Section 136 of the Act the Report andAccounts are being sent to all the Members excluding the aforesaid Annexure. Members whoare interested in the information may write to the Company Secretary at the registeredOffice of the Company.
The statement of particulars of appointment and remuneration of managerial personnelpursuant 197 (12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in Annexure5 to this Report.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 (3) of the Companies Act 2013 extract of theAnnual Return in Form MGT-9 is given in 'Annexure 6' to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Pursuant to the provisions of Section 134(3)(g) of the Companies Act 2013 (Act)particulars of loans/guarantees/ investments/securities given under Section 186 of the Actare given in the notes to the Financial Statements forming part of the Annual Report.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year were on an arm'slength basis and in the ordinary course of business. No related party transaction was inconflict with the interest of the Company. No materially significant related partytransaction was made by the Company with the Key Managerial Personnel. As prescribed bySection 134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts)Rules 2014 particulars of related party transactions are given in Form AOC-2 as "Annexure7" to this Report. The policy on Related Party Transactions as approved by theBoard has been uploaded on the Company's website www.indswiftlabs.com
Even though the provision of Regulation 21 of the SEBI (LODR) Regulations 2015regarding constitution of Risk Management Committee are not applicable on the Company theBoard has constituted a Risk Management Committee. The details of the Committee and itsterms of reference are set out in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors.
The Independent Directors had met separately without the presence of Non-IndependentDirectors and the members of management and discussed inter-alia the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of theCompany after taking into consideration the views of executive and Non-ExecutiveDirectors.
The performance evaluation of all the Directors have been done by the entire Boardexcluding the Director being evaluated. The Directors expressed their satisfaction withthe evaluation process.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Mr. K.M.S. Nambiar (Chairman) Dr. J.K. Kakkar Mr.Pradeep Kumar Mr. Prabhat Khurana - Independent Directors Mr. S.V. Singh NomineeDirector and Mr. N.R. Munjal Vice Chairman cum Managing Director of the Company. Thefunctions performed by the Audit Committee and the particulars of meetings held andattendance thereat are given in the Corporate Governance Report.
VIGIL MECHANISM/WHISTLEBLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act 2013 read withRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and SEBI (LODR)Regulations 2015 your Company has in place a 'Whistleblower Policy' which provides anopportunity to the directors and employees to raise concerns about unethical and improperpractices or any other wrongful conduct in or in relation to the Company. The details ofthe Whistleblower Policy are stated in the Corporate Governance Report and the said Policyhas been uploaded on the Company's website www.indswiftlabs.com.
Your Company is of the firm opinion that efficiency of its employees plays a key rolein achieving set goals and building a competitive work environment. The Company regularlyconducts various programs at different levels so as to ensure that a vibrant and motivatedwork-force leads to achievement of the defined goals. Employee relations continued to theharmonious and cordial at all levels and in all the units of the Company.
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has constituted "InternalComplaints Committee" for prevention of sexual harassment of its women employees. Thedetails regarding the committee are given in the Corporate Governance Report. During theyear the Committee has not received any complaint related to Sexual harassment.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2016 and of the Profit/ loss of the Company for the year ended onthat date;
c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively..
Your Directors thank all the employees for their sincere efforts active involvementand devoted services rendered.
Your Directors thank the shareholders of the Company for the confidence reposed in theManagement of the Company.
Your Directors place on record their gratitude to the Customers Suppliers company'sBankers and Financial Institutions for their support and cooperation during the year underreview.
| ||On behalf of the Board of Directors |
| ||S.R. Mehta |
| ||Non-Executive Chairman |
|Place : Chandigarh || |
|Date : 11th August 2016 || |
Annexure to Directors Report
AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE
To the Members of
Ind-Swift Laboratories Limited
We have examined the compliance of conditions of Corporate Governance by M/s Ind-SwiftLaboratories Limited for the year ended 31st March 2016 as stipulated in the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The compliance of conditions of Corporate Governance is the responsibility of theManagement. Our examination has been limited to review of procedures and implementationthereof adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance as stipulated in the said clause. It is neither an audit nor an expression ofopinion on the financial statements of the Company.
In our opinion and to the best of our information and explanation given to us wecertify that the Company has complied with the conditions of Corporate Governance asstipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the management hasconducted the affairs of the Company.
| ||For JAIN & ASSOCIATES |
| ||Chartered Accountants |
| ||(Regd. No. 001361N) |
| ||Sd/- |
|Place: Chandigarh ||(S.C. PATHAK) |
|Date: 11.08.2016 ||Partner |
| ||Membership No. 10194 |