Nectar Lifescience Ltd.
|BSE: 532649||Sector: Health care|
|NSE: NECLIFE||ISIN Code: INE023H01027|
|BSE LIVE 19:45 | 19 Oct||27.25||
|NSE 19:31 | 19 Oct||27.20||
|Mkt Cap.(Rs cr)||611|
|Mkt Cap.(Rs cr)||611.22|
Nectar Lifescience Ltd. (NECLIFE) - Director Report
Company director report
Your Directors have pleasure in presenting the 21st Annual Report together with theaudited accounts of Nectar Lifesciences Limited ('NLL' or 'Neclife' or 'Nectar' or 'theCompany') for the financial year ended March 312016.
The overall performance of the company was at par of last year.OverallActivePharmaceutical Ingredients (APIs) witnessed an increase in business.HoweverPhytochemicals(Menthol) performance during FY 2015-16 witnessed a roller coaster ride which wasconsciously attributed to a strategic shift in business option.This de-growth in mentholwas primarily owing to the following reasons:
Company's decision to caterto high value Pharmaceutical products
High Market fluctuations led to lower natural menthol demands.
Despite theabovethe Gross revenues increased to Rs.17932.25 Milliona growth ofaround 2.68% against Rs.17463.86 Million in the previous year.Profit before depreciationand taxation was Rs.2803.76 Million against Rs.2869.06 Million in the previous year.TheProfit before Tax was Rs.725.80 Million against Rs.847.54 Million in the previous year.TheProfit after Tax was Rs.592.84 Million against Rs.662.64 Million in the previous year.
The marginal decrease in profits of the company was due to other income of FinancialYear 2014-15 included Rs.1484.47 lacs received as enhanced compensation including intereston the land acquired by the Punjab Government during the Financial Year 2009-10 as awardedby the Hon'ble Court and increased depreciation cost.
The financial results of the company for the quarter ended on June 302016 areavailable on the website of the company (URL: www.neclife.com).
Management Discussion and Analysis Report
The details of the Company's various operations and state of affairs and nature ofbusiness are discussed under Management Discussion and Analysis Report.The ManagementDiscussion and Analysis of financial condition and result of operations of the Company forthe financial year 2015-16 as required under the SEBI (Listing Obligation and Disclosure
Requirements) Regulations2015 (hereinafter referred as 'LODR Regulations') is givenasAnnexure 1 and forms and part of this report.
The Company aimed to conduct its affairs in an ethical manner.A separate Report onCorporate Governance is given asAnnexure 2 and forms and part of this report.A certificatefrom the Company's Auditors regarding the Compliance of Conditions of Corporate Governanceas stipulated under LODR Regulations is given inAnnexure3.
Global Depository Receipts (GDRs)
The Company has issued and allotted 46000000 equity shares of Rs.1/- each underlying46000000 Global Depository Receipts (GDRs).The GDRs are listed on: Luxembourg StockExchange/ LuxSE Societe de la Bourse de Luxembourg S.A.
B.P 165L-2011 Luxembourg Siege social11avde la Porte-Neuve Telephone: (352) 47 7936 -1Fax: (352) 47 32 98
The company has a wholly owned subsidiaries namely Nectar Lifesciences UKLimitedincorporated in United Kingdom and Nectar Lifesciences USLLC in UnitedStates.There are negligible investments in Nectar Lifesciences UK Limited and no businessactivity has been carried out in it in financial year 2015-16 and till date in financialyear 2016-17.Thereforenothing is to report on the performance and financial position ofNectar Lifesciences UK Limited.
Howeverthe Nectar Lifesciences USLLC commenced the business operations of trading ofpharmaceutical products.Being the first year of operationthe company incurred the loss ofUS$ 38455.11 during financial year 2015-16.Your directors hope for profitable operation inyears to come.
Pursuant to the provisions of Section 129(3) of the Companies Act2013 (hereinafterreferred as 'Act')a statement containing salient features of financial statements ofsubsidiariesassociates and joint venture companies in Form AOC-1 is attached to theFinancial Statements.The separate financial statements in respect of each of thesubsidiary companies shall be kept open for inspection at the Registered Office of theCompany during working hours for a period of 21 days before the date of the Annual GeneralMeeting.Your Company will also make available these documents upon request by any Memberof the Company interested in obtaining the same.The separate audited financial statementsin respect of each of the subsidiary companies are also available on the website of yourCompany at www.neclife.com.
Consolidated financial results
As required under Section 129 of the Act and Listing Agreement with the stockexchangesa consolidated financial statements for the year ended on March 312016 of theCompany are attached.
Your Directors are pleased to recommend a Final Dividend @ 10% i.e.Re.0.10/- per equityshares of face value of Re.1/-each aggregating to Rs.22426097/- for the year ended 31stMarch2016.The final dividendsubject to the approval by the shareholders in theforthcoming Annual General Meeting and if declaredwill be paid on or after October42016to those members whose names appears in the register of members as on date of bookclosure.The register of members and the share transfer books of the Company will remainclosed from September 242016 to September 302016 (Both days inclusive) for
Annual General Meeting and payment of dividendif declaredon equity shares.
Your Directors are not proposing to carry any amount to any reserve.Directors and KeyManagerial Persons
During the year under reviewMs.Neena Singhhad vacated the office of IndependentDirector of the company as on the date of AGM i.e.September 302015 and Mr.RamanKapurIndependent Director has resigned from Board with effect from October212015.
Mr.Dinesh Dua (DIN - 02436706)Director will retire by rotation in the forthcomingAnnual General Meeting and being eligibleoffer himself for reappointment.The Boardrecommends his reappointment.
Furtheron December 292015 Ms.Guljit Chaudhri has been appointed as AdditionalIndependent Director and vacates her office at the ensuing Annual GeneralMeeting.Howeverthe company has received a notice under section 160 of the CompaniesAct2013from a member signifying his intention to propose her candidature as a regulardirector of the company.The Board recommends the appointment of Ms.Guljit Chaudhri asregular independent director for a period upto December 282020.
As on the date of this reportthe company has right proportionate of IndependentDirectors viz a viz Non-Independent Directors as per applicable provisions of Section 149of the Actand LODR Regulations.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Actand under LODR Regulations.
Pursuant to the provisions of Section 203 of the Actthe key managerial personnel oftheCompany are as under:
Mr.Sanjiv GoyalChairman & Managing Director Mr.Dinesh DuaWholetime Directordesignated as Chief Executive Officer & Director
Mr.Harparkash Singh GillWholetime Director designated as President (Operations) &Director Mr.Sandeep GoelChief Financial Officer Mr.SunderLalCompany Secretary
Number of meetings ofthe board
Six meetings of the board were held during the year.The details of Directors andmeeting held during the financial year 2015-2016 are provided in Corporate GovernanceReport which forms and part of this report.
Directors' responsibility statement The Directors confirm that:
in the preparation ofthe annual accountsthe applicable accounting standardshave been followed and that no material departures have been made from the same;
they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudentso as to give a true and fairview of the state of affairs ofthe Company at the end ofthe financial year and of theprofits ofthe Companyforthat period;
they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act2013forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
they have prepared the annual accounts on a going concern basis;
they have laid down internal financial controls for the Company and suchinternal financial controls are adequate and operating effectively; and
they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
Pursuant to the provisions of the Actand the corporate governance requirements asprescribed by LODR Regulationsthe performance of the Board and committees was evaluatedby the Board after seeking inputs from all the directors/ committee members on the basisof the criteria such as the Board/ committee composition and structureeffectiveness ofboard processesinformation and functioningetc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance ofthe individual directors on the basis ofthe criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussedmeaningful and constructive contribution andinputs in meetingsetc.In additionthe Chairman was also evaluated on the key aspects ofhis role.
In a separate meeting of independent Directorsperformance of nonindependentdirectorsperformance of the board as a whole and performance ofthe Chairman wasevaluated.The same was discussed in the board meeting that followed the meeting of theindependent Directorsat which the performance ofthe Boardits committees and individualdirectors was also discussed.
Policy on directors' appointment and remuneration and other details
The Company's policy on directors'appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereportwhich forms part of the directors' report.
Committees ofthe Board
The Company constituted the Committees as per the provisions of Sections 177 and 178 ofthe Act and LODR Regulations.The compositionpowers and duties ofthe Committeesduringfinancial year 2015-16are detailed out in the Corporate Governance Report.The Board ofDirectors accepted all recommendations of the Audit Committee.
Internal financial control systems and their adequacy
The company has adequate financial controls.The details in respect of internalfinancial control and their adequacy are included in the Management Discussion&Analysiswhich forms part of this report.
Auditors and Auditors' Report
M/s Datta Singla & Co.Chartered AccountantsStatutory Auditors of the Companyholdoffice till the conclusion of the ensuing Annual General Meeting (AGM) and are eligiblefor re-appointment.The Company has received a confirmation from them to the effect thattheir reappointmentif madewould be within the prescribed limits under Section 141(3)(g)of the Act and the provisions ofthe Companies (Audit and Auditors) Rules2014 and thatthey are not disqualified for reappointment.
Since M/s Datta Singla & Co.Chartered Accountantshave been functioning astheauditorsof the Company for more than 10 yearsin accordance with the aforesaidrulesthe Audit Committee and the Board of Directors have recommended the re-appointmentof auditors foraperiodofone year.
Observations made in the Auditors' Report are self-explanatory and therefore do notcall for any further explanation.
Secretarial Auditorand Secretarial Audit Report
During the yearSecretarial Audit was carried out by Mr.Aseem Chhabra of Aseem Chhabra& Associates.Practicing Company Secretarythe Secretarial Auditor of the company forthe Financial Year 2015-16.There were no qualificationsreservation or adverse remarksgiven by Secretarial Auditors of the Company.The Secretarial Audit Report is appended asan Annexure 4 to this report.
The company has appointed Dr.Vimal Kumar (Membership No.9982) propof M/s V.Kumar andAssociatesSCO124-125Sector 34AChandigarhCost and Works Accountants as the CostAuditors ofthe Company forthe financial year 2016-17.
The CostAudit Reports forthe financial year 2014-15 have been filed on October122015being within 30 days of date of report i.e.September212015.
The Cost Auditor shall forward the Cost Audit Report for the financial year 2015-16 bySeptember 302016.The report will be filed with Ministry of Corporate Affairs within 30days of date of CostAudit Report.
The development and implementation of risk management policy has been covered in themanagement discussion and analysiswhich forms part of this report.
The audit committee has additional oversight in the area of financial risks andcontrols.Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis.
Particulars of loansguarantees and investments
The company has not given any loan or provide guarantee as per Section 186 of theAct.The investments under section 186 of the Act are given in the notes to the FinancialStatements forming part of the Annual Report.
Transactions with related parties
Information on transactions with related parties pursuant to Section 134(3)(h) oftheAct read with rule 8(2) ofthe Companies (Accounts) Rules2014 are given in Annexure 5in Form AOC-2 and the same forms part of this report.
Corporate social responsibility
The brief outline ofthe Corporate Social Responsibility (CSR) Policy of the Company andthe initiatives undertaken by the Company on CSR activities during the year are set out inAnnexure 6 ofthis report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules2014.The policy is available on the website of the Company.
Extract of annual return
As provided under Section 92(3) of the Actthe extract of annual return is given inAnnexure 7 in the prescribed Form MGT-9which forms part ofthis report.
The information required under Section 197 of the Act read with rule 5(1) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached asAnnexure 8.In terms of first proviso to Section 136 of the Actthe Report and Accounts arebeing sent to the Members and others entitled theretoexcluding the information onemployees' particulars as required pursuant to provisions of Rule 5(2) and 5(3) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules2014.The saidinformation is available for inspection by the Members at the Registered Office oftheCompany during business hours on working days ofthe Company up to the date of the ensuingAGM.If any Member is interested in obtaining a copy thereofsuch Member may write to theCompany Secretary in this regard.
During the year under Reportyour Company did not accept any deposits from the publicin terms the provisions of Companies Act2013.
As per LODR Regulationscorporate governance report with auditors' certificatethereon and management discussion and analysis are attachedwhich form part ofthis report.
Details of the familiarization programme of the independent directors areavailable on the website of the Company (URL: www.neclife.com)
Policy for determining material subsidiaries of the Company is available on thewebsite ofthe Company (URL: www.neclife.coirO
Policy on dealing with related party transactions is available on the websiteofthe Company (URL: www.neclife.com).
The Whistle Blower Policy to provide Vigil Mechanism for employees includingdirectors of the Company (URL: www.neclife.com).
Energytechnology and foreign exchange
The particulars relating to conservation of energytechnology absorptionforeignexchange earnings and outgoas required to be disclosed undertheActare providedinAnnexure9tothis Report.
Your Directors would like to express their sincere and grateful appreciation fortheassistance and cooperation received from bankers and government authorities and also thankthe shareholders for the confidence reposed by them in the Company and looks forward totheir valuable support in the future plans ofthe Company.
Your Directors also thank its agentsthe medical professionals and its customers fortheir continued patronage to the Company's products.
Annexure 4 of Board of Directors Report
NECTAR LIFESCIENCES LIMITED
Our report ofeven date is to be read along with this letter:
1. Maintenance of Secretarial record is the responsibility of the management oftheCompany.Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness ofthe contents ofthe Secretarial records.Theverification was done on test basis to ensure the correct facts are reflected insecretarial records.We believe that the processes and practiceswe followed provide areasonable basis for ouropinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Wherever requiredwe have obtained the Management representation about thecompliance of lawrulesregulations and happening of event etc.
5. The compliance of provision of corporate and other applicablelawsrulesregulationsstandards is the responsibility of Management.Our examination waslimited to the verifications of procedures on test basis.
6. The Secretarial Audit reports is neither an assurances as to the future viability ofCompany nor of the efficacy or effectiveness with which the Management has conducted theaffairs of the Company.
SECRETARIAL AUDIT REPORT for the Financial Year ended March 312016
[Pursuant to Section 204(1) ofthe Companies Act2013 and Rule No.9 ofthe Companies(Appointment and
Remuneration of Managerial Personnel) Rule2014]
Nectar Lifesciences Limited
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and adherence to good corporate practices by M/s NECTAR LIFESCIENCES LIMITED(hereinafter called 'the company').Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on our verification ofthe Companies bookspapersminutes bookforms and returnsfiled and other records maintained by the company and also the information provided by thecompanyits officersagents and authorized representatives during the conduct ofsecretarial auditWe hereby report that in our opinionthe company hasduring the auditperiod covering the financial year ended on March 312016 complied with statutoryprovisions listed hereunder and also that company has proper Board- processes andcompliance- mechanism in place to the extentin the manner and subject to the reportingmade hereinafter:
(A) We have examined the bookspapersminute booksforms and returns filed and otherrecords maintained by Nectar Lifesciences Limited (' the company') for the financial yearended March 312016 according to the provisions of:
1. The Companies Act2013 (The Act) and the rules made there under and the CompaniesAct1956 to the extent applicable;
2. The Securities Contract (Regulation) Act1956 ('SCRA') and the rules made thereunder;
3. The Depositories Act1996 and Regulations and Bye-laws framed there under;
4. Foreign Exchange Management Act1999 and the rules and regulations made there underto the extent of Foreign Direct InvestmentOverseas Direct investment and ExternalCommercials Borrowings;
5. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act1992('SEBI Act'):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers)Regulations2011;
(b) The Securities and Exchange Board of India (Prohibition of InsiderTrading)Regulations1992; and
(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations1993 regarding the Companies Act and dealing with clients;
(B) We have also examined compliance with the applicable clauses ofthe following:
(i) Secretarial standards issued by the institute of company Secretaries of Indiaapproved by the Central Government with effective from July 12015.
(ii) The Listing Agreements entered into by the Company with BSE Limited and NationalStock Exchange of India Limited
(iii) SEBI(Listing Obligation Disclosure Requirements) Regulations 2015
During the period under reviewthe Company has generally complied with the provision ofthe ActsRulesRegulationsGuidelinesStandards and there was no prosecution initiatedagainst or show cause notice received by the Company under the Acts as mentioned above.
During the period under reviewthe provision of the following Regulations (asenumerated in the prescribed format of Form MR-3) were not applicable to the Company:
(i) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations2009;
(ii) The Securities and Exchange Board of India (Buyback of Securities)Regulations1998;
(iii) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations2009;
(iv) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines1999 and The Securities and Exchange Board ofIndia (Share Based Employee Benefit) Regulations2014; and
(v) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations2008.
During the period under reviewthe Company has complied with the provision ofthefollowing acts and as reported to us there is no material proceedingslitigation pendingin any Court or Department in respect of these Acts and no penalty has been imposed onCompany under thefollowingAct.
(i) Drugs and Cosmetics Act1940
(ii) Narcotic Drugs & Psychotropic Substances Act 1985
(iv) The Water (Prevention and Controll of Pollution )Act1974
(v) Solvent and Petroleum Products storage under Petroleum Act1934
(vi) Electricity Act2003 and Rules and Regulations thereof.
(vii) Factories Act1948
(viii) The Environment (Protection) Act 1986
(ix) Indian Boilers Act1923
(x) Information TechnologyAct2000.
(xi) Standards of Weights & Measure Act1976
We further report that the board of directors ofthe company is duly constituted withproper balance of Executive DirectorsNonExecutive Directors and Independent Directors.Thechanges in the composition ofthe board of directors thattook place during the period underreview were carried out in compliance with the provisions ofthe relevant act.
We further report that adequate notice is given to all directors to schedule the BoardMeetingsagenda and detailed notes on agenda were sent at least seven days in advanceanda system exists for seeking and obtaining further information and clarification on theagenda items before the meeting and for meaningful participation at the meeting.One Boardmeeting was called on 21.01.2016 on shorter notice after due compliance and obtainingrequisite consents to transact some urgent matter and the said meeting was attended byindependent director of the Company.
We further report that majority decisions are carried through while the dissentingmembers' views are captured and recorded as part ofthe minutes.
We further report that there are adequate systems and process in the companycommensurate with the size and operations the company to monitor and ensure compliancewith applicable lawsrulesregulations and guidelines referred to above.
We further report that during the audit period no specific events/actions has takenplace which has major bearing on the Company's affairs in pursuance ofthe above referredlawsrulesregulationsguidelinesstandardsetc.
Annexure 5 of Board of Directors' Report Form No.AOC-2
(Pursuantto clause (h) ofsub-section (3)ofsection 134 ofthe Act and Rule 8(2) oftheCompanies (Accounts) Rules2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in subsection (1) of section 188 ofthe CompaniesAct2013 including certain arms length transactions underthird proviso thereto 1.Detailsof contracts or arrangements or transactions not at arm's length basis:
2.Details of material contracts or arrangement or transactions at arm's length basis:
The company has not entered into any material contract or arrangement or transactionwith its related parties which is at arm's length during financial year2015-16.Howeverthe details of non - material contract or arrangement or transaction withits related parties which are at arm's length during financial year 2015-16has been givenin the notes to the Financial Statements forming part of the Annual Report.
Annexure 6 of Board of Directors' Report
REPORT ON CSR ACTIVITIES
1. A brief outline of the company's CSR Policyincluding overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programs:
Nectar Lifesciences Limited (hereinafter referred as NLL or 'the Company') believesthat the actions of the organization and its community are highly inter-dependent.Throughconstant and collaborative interactions with our external stakeholdersNLL strives tobecome an asset in the communities.As our CSR we actively implement Projectsandinitiatives forthe betterment of societycommunitiesand the environment.
Company's Corporate Social Responsibility (CSR) Committee has formulated andrecommended to the Boarda Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Companywhich has been approved by the Board.TheCSR Policy may be accessed on the Company's website at the link: http://www.neclife.com/projects/necLife/common/uploaded_files/userfiles/Nectar%20CSR%20Policy.pdf
The objective ofthis policy is to do continuously and consistently:
Initiate projects that benefit communities;
Encourage an increased commitment from employees towards CSRactivities andvolunteering.
Generate goodwill in communities where NLLoperates or are likely to operate;
A brief overview of company's CSR projects and programs is as under
(i) Environment sustainability: The Company has identified the renewable energy projectas one of its major project of CSR activities.This helps in improving energy efficiencyand to reduce environmental emissions thereby establishing a strong foundation for acorporate green house gas management programme.In order to achieve this mission ofreducing environmental emissionsthe company started its power plant also called asNecLife Biomass Cogeneration Project.This agro-based power generation plant runs on huskand can be switched overto 10 otherfeed stocks if the need.
(ii) Nectar Lifesciences Charitable Foundation which is engaged in promoting educationand employment enhancing vocational skills among women to help them in earning theirlivelihood.It runs an institute under the name of Nectar Polytechnicfor Women inDerabassiPunjab providing opportunity to the underprivileged girls.
The mission of the institute is to elevate its status to a centre of excellence inwomen's technical education by a conscious & consistent enhancement of itsperformance.The company's indirect aim is also to bring about an improvement in boys andgirls sex ratio in Punjab.The program focuses on enrolling girls belonging tounderprivileged section of societyother backward classesmigrant laborers and the onesbelow poverty line.
(iii) Safe Drinking Water: The lack ofsafe drinking water is a major public healthissueparticularly in developing countries where majority of diseases are waterborne.Underthis projectthe company is identifying areas and provides necessary equipments for safedrinking water.
(iv) Relief/ Donations: Your Company has always been at the forefront in responding toits call for national duty and has contributed generous amounts for preventive healthcareand for areas hit by natural disasters such as Chennai floods.Last yearyour Company alsomade a donation to'Prime Minister National Relief Fund'.
The Company would also undertake other need based initiatives in compliance withSchedule VII to the Act.
2. The composition ofthe CSR Committee.
Please refer to Corporate Governance Report for composition of CSR committee.
a) Manner in which the amount spent during the financial year is detailed below:
I Expenditure incurred through Bharat Prakarsh Foundation.
II Expenditure of Rs.3.10 Millions to Shri Saibaba Sansthan TrustShirdiRs.3.10Millions to Sri Venkateswara Institute of Medical SciencesRs.0.24 Millions to SahaytaCharitable Welfare SocietyRs.0.05 Millions to Karuna Charitable Society and Rs.0.12Millions to Govt.Institute of Mentally Retarded children.
III Expenditure incurred through Panchkula Gaushala Trust.
6. RESPONSIBILITY STATEMENT
The Responsibility Statement ofthe CSR Committee ofthe Board of Directors oftheCompanyis reproduced below:
The implementation and monitoring of Corporate Social Responsibility (CSR)Policyis in compliance with CSR objectives and policy of the Company.
ANNEXURE 8 OF BOARD OF DIRECTORS' REPORT
Statement of Disclosure of Remuneration under Section 197 of Companies Act2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014
1. Ratio of the remuneration of each Wholetime Director to the median remuneration ofthe Employees of the Company for the Financial Year 2015-16the percentage increase inremuneration of Managing DirectorWholetime Directors (WTD)Chief Financial Officer andCompany Secretary during the Financial Year 2015-16
a) The Non- Executive Directors of the Company are entitled for sitting fee only as perthe statutory provisions.The details of remuneration of Non- Executive Directors areprovided in the Corporate Governance Report.The ratio of remuneration and percentageincrease for Non- Executive Directors Remuneration is therefore not considered forthepurpose above.
b) Percentage increase in remuneration indicates annual target total compensationincreasesas approved by the Nomination and Remuneration Committee of the Company duringthe financial year 2015-2016.
2. The percentage increase in the median remuneration of Employees for the financialyear was 8.55%.
3. The Company has 2167 permanent Employees on the rolls of Company as on 31st March2016.
4. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Average percentage increase made in the salaries of Employees other than the managerialpersonnel in the financial year was 8.33% whereas the increase in the managerialremuneration was approximately 5.70%.The average increases every year is an outcome ofCompany's market competitiveness as well as prevailing market scenario.In keeping with ourreward philosophy and benchmarking resultsthe increases this year reflect the marketpractice.
5. It is hereby affirmed that the remuneration paid during the year is as per theRemuneration Policy of the Company.
Annexure 9 of Board of Directors' Report
(Statement ofparticulars as prescribed under Rule 8 (3) ofthe Companies (Account)Rules2014)
A) Conservation of energy
(i) Steps taken or impact on Conservation of energy
The company has two 6MW eachagro based captive power plants.Both the plants are ecofriendly as they reduce the environmental emission thereby establishing a strongfoundation for a corporate green house gas management program.These units also reduce themanufacturing cost.
Companys R&D team is fully dedicated towards the delivery of improvedprocesses so as to device mechanism which minimize energy consumption and wastage.Energyaudits are conducted by Process Engineering Team periodically.
NLL Unit II at DerabassiPunjab has been awarded the second prize at the NationalEnergy Conservation Awards 2015in the Drugs and Pharmaceuticals sectorby the Bureau ofEnergy Efficiency (BEE).Mr.Sanjiv Goyal Chairman and Managing Director of the companyreceived this prestigious award from Hon'ble Union Minister of State (IC) for PowerCoaland New and Renewable EnergyShri Piyush Goyal on December 142015.
The Unit II has achieved 8% reduction in electrical and 6% reduction in thermal energyconsumption in the year 2015-16 over 2014-15 figures by adopting various initiatives asuse of mechanical compression system in place of liquid nitrogenoptimization ofcentrifugal pumpsuse of VAM (Vapor absorption chillers) and AVAM (ammonia absorptionchiller) in place of vapor compression chillersVariable frequency drivesuse of dryvacuum pumps in place of steam jet ejectors etc.
(ii) Steps taken by the Company for utilising alternate sources of energy
The company is in process of putting up another Agro Based Captive Power generationPlant with a capacity to generate 6MW electrical power at VillageBasouliLalruDist.S.A.S.Nagar (Punjab)to cater to the power requirement besides reducingthe energy bill.
(iii) The capital investment on energy conservation equipments
Capital expenditure incurred on energy conservation equipments: Rs.6.46 Millions
B) Technology absorption
(i) Efforts made towards technology absorption
The developed technologies and processes were used to manufacture APIs and FDFs fordomesticROWand High end markets of EUUS and Japan.
(ii) The benefits derived like product improvementcost reductionproduct developmentand import reduction
New products were launched and developed for regular commercial production whichexpands the company's product portfolioleading the organization to the platform of aresearch-based organization.
(iii) Information in case of imported technology (imports during last three years)
(iv) Expenditure on R&D
Total expenditure incurred on Research and Development: Rs.360.22 Millions
C) Foreign exchange earnings and outgo
1. During the year 2015-16the Company had exported its pharmaceutical andphytochemicals products to 65 countries.Furtherthe Company is making all efforts toexport its products to new countries & new markets and to expand its export portfolio.
2. a) Foreign exchange earned in Rs.7155.14 Millions terms of actual inflow during thefinancial year ended on:
b) Foreign exchange outgo in Rs.6527.98 Millions terms of actual outflow during thefinancial year ended on March 312016:
For and on behalf of the Board of Directors of Nectar Lifesciences Limited
Chairman and Managing Director