Your Directors are pleased to present the Thirty second Annual Report along with theAudited Financial Statements of the Company for the financial year ended March 31 2017.
1. FINANCIAL SUMMARY
The Financial Performance of the Company (Standalone) for the Financial Year endedMarch 31 2017 is given below:
| || ||(` in million) |
|Particulars ||2016-17 ||2015-16 |
|Total revenue ||3922.13 ||4086.71 |
|Other income ||200.94 ||155.53 |
|Profit/ (loss) before interest and depreciation tax ||335.16 ||510.78 |
|Less : Interest ||83.60 ||164.42 |
|Less : Depreciation and amortisation expenses ||251.68 ||241.80 |
|Profit/(loss) before tax ||(0.12) ||104.56 |
|Tax Expenses - Current tax ||- ||- |
|- Deferred tax ||- ||0.69 |
|Profit/(loss) after tax ||(0.12) ||103.87 |
2. BUSINESS PERFORMANCE REVIEW
During the financial year 2016-17 on a standalone basis your Company's revenues stoodat Rs. 3922.13 Million as against Rs. 4086.71 Million in 2015-16. The Company posted anEBITDA of Rs. 134.22 Million in the year as against Rs. 355.25 Million in 2015-16. TheCompany made a net loss of Rs. 0.12 Million.
On a consolidated basis your Company's revenue for the year 2016-17 stood at ` 9150.81Million as against Rs. 6214.10 Million in 2015-16. The Company posted an EBITDA of `881.35 Million for the year 2016-17 as against Rs. 551.77 Million in 2015-16. On aconsolidated level the Company made a loss of Rs. 163.87 Million.
1. Human API
Successful EDQM inspection at our facility in Mahad
Filings - 7 CEPs 3 USDMFs 1 WHO
2. Animal Health
Vizag facility becomes India's 1st USFDA approved Animal Health API facility
Forayed into vaccines with IDT Biologika Germany for marketing vaccines in India
Successfully integrated operations of acquired businesses in Brazil (Evance) Spain& Mexico (Karizoo)
Transitioned business in Turkey to new GMP regime
Forayed into Ukraine and initiated product trials
Expanded to 5 new countries taking the total footprint to 95+ countries
Launched 3 new formulations in Europe & 28 products across other key markets
Initiation of global formulations R & D program in animal health business5projects across Spain and India
Filed 2 CEPs and 6 US VMFs for key APIs
Received 20 product registrations in EU countries & 41 in emerging markets
Filed 52 products in emerging market
The Board of Directors at their Meeting held on February 3 2017 had approvedin-principle demerger of Human API Business and divesting Women Healthcare business tofocus on Alivira (Integrated Animal Healthcare business) for disproportionate valuecreation.
Having reviewed the strategic success in building Alivira as India's largest veterinarycompany with annual run-rate revenues of US $ 120 million (~` 800 crores) along withfuture opportunities therein the Board felt that the Management of SeQuent should focuson animal healthcare and free up management time and capital from the other twobusinesses.
De-Merger of Human API business:
SeQuent's Human API business primarily driven out of its Mangalore Mahad and Mysorefacilities contribute ~ 27% of the top-line on a consolidated basis.
While the differentiated business model of focusing on old small volume molecules makethe business highly profitable with annualised revenue of ~` 300 crores the business issub-scale. Also being a B2B business it needs a differentiated strategic direction togrow and deliver value.
Further the ever-evolving regulatory landscape exposes its business from concentrationrisk at one USFDA approved plant
The Board felt the need for Management to focus on scaling up Alivira business and tothis direction it was decided to divest the Human API business which though profitablewill require significant CapEx to build scale and exigencies.
As part of the Scheme of Arrangement the commodity API business of Strides ShasunLimited a promoter group Company is also proposed to be carved out into Solara ActivePharma Sciences Limited (SAPS) thereby providing critical size to this business.
This combination will catapult SAPS to be one of the largest standalone API companiesin the country supplying commodity and niche APIs globally. The business will create valuefor its stakeholders with its differentiated strategy and highly compliant manufacturingfacilities.
The Newly formed API Company will have five manufacturing sites having key globalregulatory approvals.
On March 20 2017 based on the recommendation of the Audit Committee the Board ofDirectors approved a Composite Scheme of Arrangement to be entered into between theCompany Strides Shasun Limited (Strides') and Solara Active Pharma SciiencesLimited (SAPS) and their respective shareholders and Creditors (the Scheme') underSections 230-232 of the Companies Act 2013 for the purposes of effecting the saiddemerger. The Board of Directors also approved the share entitlement ratio of one equityshares of Rs. 10/- each of SSL for every 25 equity shares of Rs. 2/- each held by them inSeQuent. S.R. Batliboi & Co. and Pricewaterhouse & Co. LLP provided a jointvaluation report on the share entitlement ratio while Key Note Corporate Services Limitedprovided the fairness opinion in relation to the aforesaid share entitlement ratio.
The salient features of the Scheme are:
a) The equity shares of SAPS will be listed in the BSE Limited and the National StockExchange of India Limited.
b) Every shareholder of Strides will get one equity shares of Rs. 10/- each of SAPS forevery six equity shares of Rs. 10/- each held by them in Strides.
c) Every shareholder of the Company will get one equity shares of Rs. 10/- each of SAPSfor every 25 equity shares of Rs. 2/- each held by them in the Company.
d) The appointed date for the Demerger will be October 1 2017
e) Based on the recommended Share Entitlement Ratio Strides shareholders and SeQuentshareholders will hold 60% and 40% respectively of SAPS
f) The Scheme is subject to statutory approvals including from the shareholders andcreditors of the Company Strides and SAPS Stock Exchanges where the shares of Stridesand SeQuent are listed the Securities and Exchange Board of India National Company LawTribunal and the Competition Commission of India.
As on date the Company has received approval from Competition Commission of IndiaSecurities and Exchange Board of India National Stock Exchange of India Limited and BSELimited.
The Company is in the process of making an application to National Company LawTribunal.
Divestment of NAARI
NAARI was acquired by the Company in January 2016 which is a vertically integratedsteroid and hormone manufacturer specialising in high actives and complex chemistry.During the tenure the Company had completed the first phase of re-orienting the businesstowards regulated markets with the first filings made both for US and EU markets. HoweverNAARI business requires significant investments for next three years in ramping up theR&D program/capacities.
In view of the above and the further requirement of cost in the NAARI the Boardconsidered a proposal received from a Promoter Group Company for buying the entire stakeheld by the Company in NAARI for a consideration of Rs. 110000000 (Rupees Eleven crores)
The Company has already obtained shareholders approval through postal ballot on March22 2017. Definitive agreements have been entered into with the Buyer and the transactionis expected to achieve closure in Q2 of FY 2018.
The Board of Directors of the Company have not recommended any dividend for thefinancial year March 31 2017 (Previous Year; Nil per equity share).
In accordance with Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')your Company has formulated a Dividend Distribution Policy which ensures a fair balancebetween rewarding its Shareholders and retaining enough capital for the Company's futuregrowth. This Policy is available on the Company's website: www.sequent.in.
4. TRANSFER TO RESERVES
During the Financial Year the Company has not made any transfer to the reserves.
5. SHARE CAPITAL
As on date the authorized share capital of the Company is Rs. 500000000 divided into250000000 equity shares of Rs. 2 each.
The issued subscribed and paid up equity capital of the Company as on date is Rs.487472390 divided into 243736195 equity shares of Rs. 2 each.
During the year ended March 31 2017 the Company has allotted equity shares as under:
|Date of allotment ||No. of Shares ||Allottee category ||Remarks ||Issue price |
|September 23 2016 ||5500000 ||Promoter Group Entities ||On conversion of convertible warrants ||` 95 |
The Company has not allotted equity shares after the balance sheet date i.e. March 312017.
As at March 31 2017 the Company has 24 subsidiaries out of which 11 Companies arewholly owned Subsidiaries and the Company does not have any Joint Ventures / AssociateCompanies.
Changes in subsidiaries during the financial year ended March 31 2017:
|Alivria Saude Animal Health Brazil Participacoes LTDA Brazil ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 100% stake in Alivira Saude Animal Health Brazil Participacoes LTDA Brazil through its subsidiary Alivira Animal health Limited Ireland. |
|Interchange Veterinaria Industrial E Comercia S.A. Brazil (Interchange). ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 70% stake in Interchage Brazil through its subsidiary |
|Vila Vina Participacions S.L. Spain (Vila Vina) ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 60% stake in Vila Vina Brazil through its subsidiary |
|Laboratorios Karizoo S.A Spain ("Karizoo S.A") ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 60% stake in Karizoo S.A Spain through its subsidiary Vila Vina (Spain). |
|Comercial Vila Veterinaria DE Lledia S.L. Spain ("Coomercial Vina") ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 60% stake in "Commercial Vina" Spain through its subsidiary Vila Vina (Spain)". |
|Phytotherapic Solutions S.L. Spain ("Phytotherapic") ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 60% stake in "Phytotherapic" through its subsidiary Vila Vina (Spain). |
|Labaratorios Karizoo S.A. D.E C.V. Mexico ("Karizoo Mexico") ||Alivira Animal Health Limited India a wholly owned subsidiary of the Company acquired 60% stake in "Karizoo Mexico" through its subsidiary Vila Vina (Spain). |
|Alivira UA Limited ||Alivira Animal Health Limited incorporated Alivira UA Limited on September 30 2016 |
Accounts of Subsidiaries
In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company and all its subsidiary companies whichis forming part of the Annual Report. Statement containing salient features of thefinancial statements of Company's subsidiaries joint ventures and associate companies asrequired in Form AOC-1 is enclosed as Annexure 1 to this Report.
The Audited Consolidated Accounts and Cash Flow Statement comprising of the Companyand its subsidiaries form part of this Report. The Auditors Report on the AuditedConsolidated Accounts is attached and the same is unqualified.
Further financial statements together with related reports and information of each ofthe subsidiary companies of the Company have been placed on the website of the Companywww.sequent.in.
7. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in terms of Section 92(3) of the Companies Act 2013 in FormMGT- 9 is enclosed as Annexure 2 to the Directors' Report.
8. PUBLIC DEPOSIT
During the financial year 2016-17 the Company has not accepted or renewed any publicdeposits in terms of Sections 73 and 74 of the Companies Act 2013 and rules framedthereunder.
9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
As on March 31 2017 the Board comprises of 7 Directors consisting of 2 ExecutiveDirectors 5 Non-executive Directors out of whom 3 are Independent Directors. Chairman ofthe Board is an Independent Director.
Dr. Gautam Kumar Das retired from post of Joint Managing Director with effect fromJanuary 07 2017 and Mr. Sharat Narasapur (DIN: 02808651) was appointed as Joint ManagingDirector w.e.f January 08 2017 for a period of 3 years.
Dr. S Devendra Director (DIN: 00050440) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.
Brief profiles of Dr. S Devendra and Mr. Sharat Narasapur are given in the corporategovernance report which forms part of this report.
Your directors recommend their appointment/ reappointment to the members of theCompany.
As on date the Company has the following Key Managerial Personnel:
Mr. Manish Gupta Managing Director (DIN: 06805265)
Mr. Sharat Narasapur Joint Managing Director (DIN: 02808651)
Mr. Tushar Mistry Chief Financial Officer
Mr. Krupesh Mehta Company Secretary
During the year the following changes took place in Key Managerial Personnel of theCompany.
|Sr. No. ||Name of Director ||Designation ||Date of Appointment / Resignation /Retirement |
|Resignation / Retirement || || || |
|1. ||Dr. Gautam Kumar Das ||Joint Managing Director ||January 07 2017 |
|2. ||Mr. Kannan P R ||Chief Financial Officer ||February 10 2017 |
|3. ||Mr. Preetham Hebbar ||Company Secretary ||February 10 2017 |
|Appointment || || || |
|1. ||Mr. Sharat Narasapur ||Joint Managing Director ||January 08 2017 |
|2. ||Mr. Tushar Mistry ||Chief Financial Officer ||February 11 2017 |
|3. ||Mr. Krupesh Mehta ||Company Secretary ||February 11 2017 |
Your Company has received necessary declarations from Independent Director(s) of theCompany that they meet the criteria of independence laid down in Section 149 of theCompanies Act 2013.
10. MEETINGS OF THE BOARD
During the year ended March 31 2017 7 (Seven) Board Meetings were held. Thesemeetings were held on April 4 2016 May 14 2016 August 12 2016 November 10 2016February 3 2017 February 10 2017 and March 20 2017.
11. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Directors of the Company are appointed by Members at the General Meetings of theCompany.
The appointment and tenure of Independent Directors are governed by the provisions ofthe Companies Act 2013 read with the rules thereto and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) 2015.
The Nomination and Remuneration Committee at its meeting held on July 30 2015 hasadopted a policy namely SeQuent Policy on Nomination and Remuneration ("thePolicy") in adherence to Section 178(3) of the Companies Act 2013 read with therules thereto and provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. The policy shall act as aguideline on matters relating to the remuneration appointment removal and evaluation ofperformance of the Directors Key Managerial Personnel and other employees of the Company.The policy is given as Annexure 3 in this report.
12. EVALUATION OF BOARD OF DIRECTORS
Pursuant to provisions of Schedule IV of the Companies Act 2013 and rules thereto andprovisions of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a policy called as SeQuentBoard Performance Evaluation Policy ("the Policy"). Based on this the Companyhas prepared a questionnaire to carry out the evaluation of performance of every Directorincluding the Independent Directors at regular intervals and at least on an annual basis.The questionnaire is structured to embed various parameters based on which the performanceof a Board can be evaluated. Customised questionnaires are formulated for evaluatingIndependent Directors
Non-Executive Directors Whole-time Directors Chairperson of the Board and the Boardas a whole.
Based on the policy the evaluation was conducted by the Company.
Detailed data on composition of Board of Directors Committees of Board of DirectorsMeeting details charter for each committee and attendance details forms part of theCorporate Governance Report.
13. AUDIT COMMITTEE
The Composition of Audit Committee of the Company is given below:
Dr. Gopakumar G Nair Chairman
Dr. Kausalya Santhanam Member
Mr. Narendra Mairpady Member
Board of the Company has accepted all recommendations given by the Audit Committee.
14. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 (1) of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Nilesh shah Practicing Company Secretary to carry out the SecretarialAudit for the financial year 2016-17. The Secretarial Audit Report is annexed as Annexure4 to the Board's Report. There are no qualifications observations or adverse remarks inthe Secretarial Audit Report.
At the Annual General Meeting held on September 29 2014 M/s. Deloitte Haskins &Sells Chartered Accountants (Firm's Registration Number: 008072S) were appointed asStatutory Auditors of the Company for a period of 5 years from 29th Annual General Meetingtill the conclusion of 34th Annual General Meeting. In terms of the first proviso toSection 139 of the Companies Act 2013 the appointment of auditors shall be placed forratification at every Annual General Meeting. Accordingly the appointment of M/s.Deloitte Haskins & Sells Chartered Accountants as Statutory Auditors of the Companyis placed for ratification by the members in the ensuing Annual General Meeting of theCompany.
Pursuant to Section 148(3) and Companies (Cost records and audit) Rules 2014 M/s.Kirit Mehta & Co practicing Cost Accountants was appointed as the Cost Auditor forthe financial year 2016-17. The due date for filing the Cost Audit Reports in XBRL modefor the financial year ended March 31 2016 was September 30 2016 and the Cost Auditreports were filed by the Cost Auditor on September 28 2016.
The due date for filing the Cost Audit Reports for the financial year ended March 312017 is September 30 2017.
16. AUDIT REPORT
There are no qualifications observations or adverse remarks in the Audit Report issuedby the Statutory Auditors of the Company for financial year ended March 31 2017.
17. PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as an Annexure 5 formingpart of this report except the report as per Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. In terms of Section 136 of theCompanies Act 2013 the said report is open for inspection at the Registered Office ofthe Company during working hours and any member interested in obtaining a copy of the samemay write to the Company Secretary at the registered office of the Company.
18 . VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to provisions of Section 177(9) of the Companies Act 2013 and ListingRegulations the Company has established the Vigil Mechanism as part of the WhistleBlower Policy for the Directors and Employees to report concerns about unethicalbehaviour actual or suspected fraud or violation of Company's Code of Conduct.
It also provides adequate safeguards against the victimisation of employees who availthis mechanism and allows direct access to the Chairperson of the Audit Committee inexceptional cases.
The Board amended the existing Whistle Blower Policy to extend the applicability of thePolicy to all the stakeholders of the Company and incorporate the applicable provisions ofthe Listing Regulations in the Policy and confirm that no personnel have been deniedaccess to the Audit Committee.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of loans Guarantees & Investments covered under the provisions of Section186 of the Act are given in the notes to the financial statements.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions entered with related parties are in the ordinary course ofbusiness and on arm's length basis.
Further there are no materially significant related party transactions with itspromoters the directors or the management their subsidiaries or relatives etc. that mayhave potential conflict with the interests of the Company at large.
The particulars of material contracts or arrangements with related parties referred toin Section 188(1) as prescribed in Form AOC-2 of the rule 8(2) of Companies (Accounts)Rules 2014 is given as an Annexure 6.
All transactions with the related parties are disclosed in Note 28.2 to the financialstatements in the Annual Report.
21. CORPORATE SOCIAL RESPONSIBILITY
As per section 135(1) the Company has constituted a Corporate Social ResponsibilityCommittee comprising of Mr. Manish Gupta Dr. Gopakumar G Nair and Dr. Kausalya Santhanamas its members. The Company adopted a policy on Corporate Social Responsibility on May 142016.
The disclosure as required under Companies (Corporate Social Responsibility Policy)Rules 2014 is set out in Annexure 7 of this report.
22. RISK MANAGEMENT
The Company has a risk management framework for identifying and managing risks.Additional details are provided in the Management Discussion and Analysis' reportforming part of this report.
23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators Courts orTribunals that would impact the going concern status of the Company and its futureoperations.
24. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act 2013 the Directors of yourCompany to the best of their knowledge and ability confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating 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 and of the profitand 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 this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts of the Company have been prepared on a goingconcern 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.
(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/ OUTGO ANDRESEARCH & DEVELOPMENT
The particulars as prescribed under Section 134(3)(m) of the Companies Act 2013 readwith rule 8(3) of the Companies (Accounts) Rules 2014 is enclosed as an Annexure 8 to theDirectors' Report.
Detailed write-up on Research and Development activity forms part of the annexure tothe Directors' Report.
26. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at the workplace (Prevention Prohibition& Redressal) Act 2013. A committee has been set up to redress complaints receivedregarding sexual harassment. All Permanent employees of the Company and that of itssubsidiaries are covered under this policy.
27. CORPORATE GOVERNANCE
Your Company has complied with all the mandatory requirements of Corporate Governancespecified by the Securities and Exchange Board of India ("SEBI") through andprovisions of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Regulations"). As per Regulation 34(3) andSchedule V of the Regulations a separate Report on Corporate Governance forms part of theAnnual Report of the Company. A certificate from the Statutory Auditors of the Companyregarding compliance with Corporate Governance requirements as stipulated in theregulations and listing agreement entered with Stock Exchange also forms part of theAnnual Report.
The confirmation from Mr. Manish Gupta Managing Director regarding compliance withthe Code of Business Conduct and Ethics forms part of the Report on Corporate Governance.
28. MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 (3) and Schedule V of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a detailed analysison the Company's operational and financial performance for the year is covered under aseparate section Management Discussion and Analysis Report which forms part of this AnnualReport.
29. EMPLOYEE STOCK OPTION SCHEME
The Company has formulated an employee stock option plan titled "SSL ESOP Scheme2010 " (the "ESOP 2010") in accordance with the provisions of Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 (the"SEBI ESOP Guidelines") and the scheme is administered through a trust. As ondate 1790000 shares have been issued to the trust. During the year the Nomination andRemuneration Committee has granted 345000 options to identified employees and 60000options lapsed due to resignation of employees. As at March 31 2017 2925000 Stockoptions are outstanding.
The ESOP scheme of the Company is in Compliance with the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014.
Further disclosure under Section 62 of the Companies Act 2013 read with Rule 12 ofCompanies (Share Capital and Debentures) Rules 2014 and SEBI (Share Based EmployeeBenefits) Regulations 2014 given as an Annexure 9 to this Report.
Your Directors place on record their sincere gratitude and place on record theirappreciation for all the employees at all levels for their staunch dedication and highlymotivated performance across the globe which contributed greatly for persistentperformance of the company
Your Directors also sincerely thank all the stakeholders medical professionalsbusiness partners government & other statutory bodies banks financial institutionsanalysts and shareholders for their continued assistance cooperation and support.
Note: The information given herein above is as on March 31 2017 unless otherwisestated.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Thane ||Dr. Gopakumar G Nair |
|Date: August 3 2017 ||Chairman |
FORM AOC - 1
(Pursuant to first proviso to sub section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014) Statement containing sailent features of the financialstatement of subsidiaries/ associate companies/ joint ventures)
Part A - Subsidiaries
Information relating to Subsidiaries of the Company as at March 31 2017
(` in Million)
|Sr. No. ||Name of the Subsidiary ||The date since when subsidiary was acquired/ incorporated ||Country of incorporation ||Reporting period for the subsidiary concerned if different from the holding company's reporting period ||Reporting Currency ||Exchange Rate as on last date of the relevant financial year in the case of foreign subsidiaries ||(a) Share Capital (Includes Monies pending allotment) ||(b) Reserves & Surplus ||( c ) Total Assets ||(d) Total liabilities ||( e) Investments ||(f) Turnover ||(g) Profit before taxation ||(h) Provision for taxation ||(i) Profit after taxation ||(j) Proposed dividend ||(k) % Sharehold ing |
|1 ||SeQuent Penems Private Limited ||May 10 2010 ||India ||NA ||INR ||- ||45.26 ||(15.52) ||181.77 ||152.03 ||- ||1.80 ||(1.24) ||1.14 ||(2.38) ||- ||89.23% |
|2 ||Elysian Life Sciences Private Limited ||March 2 2010 ||India ||NA ||INR ||- ||0.10 ||(111.91) ||0.52 ||112.33 ||- ||- ||(0.26) ||- ||(0.26) ||- ||100.00% |
|3 ||Alivira Animal Health Limited India ||September 30 2013 ||India ||NA ||INR ||- ||414.06 ||2327.60 ||5584.43 ||2842.77 ||680.82 ||2988.61 ||(148.14) ||- ||(148.14) ||- ||100.00% |
|4 ||Alivira Animal Health Limited Ireland ||September 1 2014 ||Ireland ||NA ||USD ||64.8599 ||702.11 ||(248.42) ||3271.94 ||2818.26 ||2612.76 ||55.87 ||(121.38) ||- ||(121.38) ||- ||100.00% |
|5 ||Provet Veteriner rnleri San. Ve Tic. A. S. ||September 9 2014 ||Turkey ||NA ||TRY ||17.8672 ||35.73 ||395.10 ||1073.59 ||642.75 ||258.70 ||581.64 ||14.86 ||(47.63) ||62.49 ||- ||60.00% |
|6 ||SeQuent Research Limited ||April 13 2007 ||India ||NA ||INR ||- ||44.10 ||18.29 ||215.37 ||152.98 ||- ||242.81 ||8.51 ||4.42 ||4.09 ||- ||100.00% |
|7 ||SeQuent Anit Biotics Private Limited ||May 4 2010 ||India ||NA ||INR ||- ||0.10 ||(0.63) ||- ||0.53 ||- ||- ||(0.02) ||- ||(0.02) ||- ||100.00% |
|8 ||SeQuent Pharmaceuticals Private Limited ||May 11 2010 ||India ||NA ||INR ||- ||0.10 ||(0.23) ||0.11 ||0.24 ||- ||- ||(0.02) ||- ||(0.02) ||- ||99.99% |
|9 ||SeQuent Global Holdings Limited ||June 12 2008 ||Mauritius ||NA ||Euro ||69.3741 ||9.76 ||(9.76) ||- ||- ||- ||0.90 ||0.11 ||- ||0.11 ||- ||100.00% |
|10 ||SeQuent European Holdings Limited* ||May 19 2008 ||Cyprus ||NA ||Euro ||69.3741 ||0.28 ||(0.28) ||- ||- ||- ||- ||- ||- ||- ||- ||100.00% |
|11 ||Fendigo SA ||December 3 2015 ||Belgium ||NA ||Euro ||69.3741 ||10.75 ||67.04 ||194.27 ||116.48 ||- ||539.78 ||41.93 ||14.69 ||27.24 ||- ||85.00% |
|12 ||Fendigo BV ||December 3 2015 ||Netherland ||NA ||Euro ||69.3741 ||2.08 ||21.58 ||43.77 ||20.11 ||- ||107.17 ||13.14 ||2.68 ||10.47 ||- ||85.00% |
|13 ||N-Vet AB ||December 3 2015 ||Sweden ||NA ||SEK ||7.2600 ||4.36 ||113.08 ||151.13 ||33.69 ||- ||222.63 ||32.41 ||7.34 ||25.06 ||- ||85.00% |
|14 ||Naari Pharma Private Limited ||January 27 2016 ||India ||NA ||INR ||- ||5.10 ||(140.33) ||1333.31 ||1468.54 ||- ||687.25 ||(200.63) || ||(200.63) ||- ||51.02% |
|15 ||Topkim Topkapi Ila premiks Sanayi Ve Ticaret A.S. ||December 11 2015 ||Turkey ||NA ||TRY ||17.8672 ||17.87 ||132.35 ||468.81 ||318.59 ||- ||425.79 ||41.62 ||8.26 ||33.36 ||- ||60.00% |
|16 ||Alivira Animal Health Australia Pty Limited ||July 24 2015 ||Australia ||NA ||AUD ||- ||- ||- ||- ||- ||- ||- ||- ||- ||- ||- ||100.00% |
|17 ||SeQuent Scientific Pte Limited ||February 4 2016 ||Singapore ||NA ||USD ||64.8599 ||- ||- ||- ||- ||- ||- ||- ||- ||- ||- ||100.00% |
|18 ||Interchange Veterinria Indstria E Comrcio Ltda. ||August 1 2016 ||Brazil ||NA ||BRL ||20.5483 ||267.54 ||(462.32) ||302.27 ||497.05 ||- ||302.07 ||(37.82) ||(11.81) ||(26.01) ||- ||70.00% |
|19 ||Aliviria Saude brasil participacoes Ltda ||June 10 2016 ||Brazil ||NA ||BRL ||20.5483 ||20.20 ||(17.95) ||247.66 ||245.41 ||236.85 ||0.41 ||(18.15) ||- ||(18.15) ||- ||100.00% |
|20 ||Vila Via Participacions S.L. ||July 1 2016 ||Spain ||NA ||EURO ||69.3741 ||147.87 ||76.88 ||233.60 ||8.85 ||210.52 ||11.26 ||1.31 ||0.27 ||1.04 ||- ||60.00% |
|21 ||Laboratorios Karizoo S.A. ||July 1 2016 ||Spain ||NA ||EURO ||69.3741 ||24.75 ||257.44 ||1026.46 ||744.27 ||17.20 ||1462.39 ||129.45 ||27.73 ||101.72 ||- ||60.00% |
|22 ||Laboratorios Karizoo S.A. DE C.V. (Mexico) ||July 1 2016 ||Mexico ||NA ||PESO ||69.3741 ||21.11 ||1.07 ||76.99 ||54.81 ||- ||151.31 ||12.09 ||1.05 ||11.04 ||- ||60.00% |
|23 ||Comercial Vila Veterinaria De Lleida S.L. ||July 1 2016 ||Spain ||NA ||EURO ||69.3741 ||0.62 ||32.78 ||74.39 ||40.99 ||0.05 ||212.68 ||13.07 ||3.15 ||9.92 ||- ||60.00% |
|24 ||Phytotherapic Solutions S.L ||July 1 2016 ||Spain ||NA ||EURO ||69.3741 ||2.08 ||52.94 ||77.26 ||22.24 ||- ||100.41 ||18.02 ||3.89 ||14.12 ||- ||60.00% |
|25 ||Alivira UA Limited ||September 30 2016 ||Ireland ||NA ||USD ||64.8399 ||- ||- ||- ||- ||- ||- ||- ||- ||- ||- ||100.00% |
1 Names of subsidiaries which are yet to commence operations:
a) Alivira Animal Health Australia Pty Limited Australia
b) SeQuent Scientific Pte Limited Singapore
c) Alivira UA Limited Ireland
2 Names of subsidiaries which have been liquidated or sold during the year:
a) SeQuent European Holdings Limited
* SeQuent European Holdings Limited ceased to be the subsidiary of the Company witheffect from November 30 2016
SEQUENT'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Company has adopted a policy namely "SeQuent's Policy on Director'sAppointment and Remuneration" on Director's Appointment and Remuneration in terms ofSection 178(3) of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosures Requirements) as entered with stock exchange. The Nomination and RemunerationCommittee ("the Committee") at its meeting held on July 30 2015 had approvedthis policy.
Scope of the Policy:
This policy is applicable to SeQuent Scientific Limited its subsidiaries and jointventures (together referred to as "SeQuent") and the Directors Key ManagerialPersonnel of the Company
This policy will be a guide for human resource management thereby aligning plan forstrategic growth of the company
This policy is applicable to all Directors Key Managerial Personnel (KMP) and SeniorManagement team and Employees of SeQuent.
the Act' means the Companies Act 2013 and Rules framed thereunder as amendedfrom time to time.
Board' means the Board of Directors of the Company.
Committee' means the Nomination and Remuneration Committee
Directors' mean Directors of the Company.
Key Managerial Personnel' means Chief Executive Officer and Managing DirectorWhole-time director Chief Financial Officer Company Secretary; and such other officer asmay be prescribed under the Act.
Senior Management' mean personnel of the company who are members of its coremanagement team excluding the Board of Directors including Functional Heads.
The board has constituted the Committee in line with requirements of the Companies Act2013 to oversee the functions related to appointment and remuneration of the DirectorsKey Managerial Personnel and Senior Management.
Composition and meetings
The term of composition and requirements as to the meeting of the committee isfollowing:
The committee shall consist of minimum three non-executive directors out of which onehalf shall be independent directors. .
The Chairman of the Committee shall not be independent Director and who shall not beChairman of the Company
Minimum two members shall constitute a quorum of committee meeting.
Constitution of the committee shall be disclosed in the Annual Report
Terms of the committee shall be continued unless terminated by Board of Directors.
The Committee shall meet as and when the requirement arises
Key Objectives of Committee:
Key objectives of the committee is:
To identify persons who are qualified to become Directors and Senior Management of theCompany
To guide board in relation to appointment retention and removal of Directors KeyManagerial Personnel and Senior management of the Company.
To evaluate the performance of the members of the board including independent directorsto provide necessary information/ report to the board for further evaluation.
To recommend to the board on remuneration payable to the Directors and Key managerialpersonnel
To retain motivate and promote talent and to ensure long term sustainability oftalented managerial person and create competitive advantage
To devise a policy on Board diversity
To develop a succession plan for the Board and to regularly review the plan
This section covers the duties of the Committee in relation to various matters andrecommendations to be made by the Committee to the Board.
Duties and roles of the committee:
Formulating the criteria of determining the qualification positive attributes andindependence of the Director.
Identifying person who are qualified to become a director and person who may / can beappointed in the Senior Management in accordance to the idea laid down in the policy
Recommending to the board appointment and removal of the Director Key ManagerialPersonnel and Senior Management Personnel.
Determining the appropriate size diversity and composition of the board.
Setting a formal and transparent procedure for handling new director for appointment tothe board.
Ensuring that there is an appropriate induction in place for new directors andreviewing its effectiveness
Identifying and recommending directors who are to be put forward for retirement byrotation
Developing a succession plan for the board and senior management and regularly reviewthe plan
Evaluating the performance of the board members and the senior management in thecontext of the company's performance industry benchmarks and compliance.
Making recommendation to the board concerning any matter relating to the continuationin office of any director at any time including the suspension or termination of serviceof an Executive Director as an employee of the company subject to the law and the servicecontract.
Recommend necessary change to the board in line with board diversity policy.
Considering and determining the Remuneration policy based on performance with areasonable and sufficient need to attract retain and motivate members of the Board.
Approve the remuneration of Key Managerial Personnel of the Company by maintaining abalance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its growth strategy.
Consider any other matters as may be requested by the Board.
This section covers the criteria and qualifications of appointment term and tenure ofDirectors and Key Managerial Personnel
Appointment criteria and qualifications:
The Committee shall identify and ascertain the integrity qualification expertise andexperience of the person for appointment as Director Key Managerial Personnel andrecommend to the Board his/ her appointment.
A person should possess adequate qualification expertise and experience for theposition he/she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient/satisfactory for the concerned position.
The company shall not appoint any person as Whole-time Director who as attained the ageof seventy years. Provided that the term of the person holding this position may beextended beyond the age of seventy years with the approval of shareholders by passing aspecial resolution based on the explanatory statement annexed to the notice for suchmotion indicating the justification for extension of appointment beyond seventy years.
Managing Director/ Whole-time Director: The Company shall appoint or re-appoint anyperson as its Executive Chairman Managing Director or Executive Director for a term notexceeding such term as may be specified under the Act. No re-appointment shall be madeearlier than one year before the expiry of term and which shall be done with the approvalof the shareholders of the Company
Independent Director: An Independent Director shall hold office for a term up to fiveconsecutive years on the Board of the Company and will be eligible for re-appointment onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report. No Independent Director shall hold office for more than two consecutiveterms but such Independent Director shall be eligible for appointment after expiry ofthree years of ceasing to become an Independent Director. Provided that an IndependentDirector shall not during the said three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly.
The committee shall carry out evaluation of performance of every Director at regularintervals and at least on an annual basis.
Due to reason for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations there under the committee may recommend to theBoard with reasons recorded on writing removal of a Director or Key Managerial Personnelsubject to the provisions and compliance of the said Act rules and regulations.
The Director and Key Managerial Personnel shall retire as per the applicable provisionsof the Act and prevailing policy of the Company. The Board will have the discretion toretain the Director or Key Managerial Personnel in the same position/remuneration orotherwise even after attaining the retirement age for the benefit of the Company.
This section of the policy covers provisions relating to the Remuneration for theWhole-time Director Key Managerial Personnel and Senior Management Personnel.
The remuneration of the Whole-time Director and Key Managerial Personnel will bedetermined by the Committee and recommended to the Board for approval. Wherever requiredthe remuneration/ compensation/ commission etc. shall be subject to approval of theshareholders of the Company and Central Government.
The remuneration and commission including increments recommended to be paid to theWhole-time Director shall be in accordance with the percentage/ slabs/ conditions laiddown as per the provisions of the Act. These would be subject to approval of theshareholders of the company.
Remuneration to Whole-time Director / Executive Director / Managing Director and KeyManagerial Personnel
i. Fixed pay: the Whole-time Director/ Managing Director shall be eligible for amonthly remuneration as may be approved by the Board on the recommendation of theCommittee. The breakup of the pay scale and quantum of perquisites including employer'scontribution to provident fund pension scheme medical expenses club fees etc. shall bedecided and approved by the Board and approved by the shareholders and Central Governmentwherever required. The Committee shall approve the remuneration for the Key ManagerialPersonnel.
ii. Minimum Remuneration: If in any financial year the Company has no profits or itsprofits are inadequate the Company shall pay remuneration to its Whole-time Director inaccordance with the provisions of Schedule V of the Act and if it is not able to complywith such provisions with the previous approval of the Central Government.
iii. Long-term rewards: These long-term rewards are linked to contribution to theperformance of the Company based on relative position of the personnel in theorganization. These rewards could be in the form/ nature of stock options and are bases onlevel of employees and their criticality.
iv. Provisions for excess remuneration: If any Whole-time Director draws or receivesdirectly or indirectly by way of remuneration any such sums in excess of the limitsprescribed under the act or without the prior sanction of the Central Government whererequired he/ she shall refund such funds to the company and until such sum is refundedhold it in trust for the Company. The Company shall not waive recovery of such sumrefundable to it unless permitted by the Central Government.
Remuneration to Non-Executive Director / Independent Director:
i. Remuneration / Commission: The remuneration / commission shall be fixed as per thelimits mentioned in the Act subject to approval from the shareholders as applicable.
ii. Sitting Fees: The Non-Executive / Independent Director shall receive remunerationby way of fees for attending meetings of Board or Committee thereof. Provided that theamount of such fees shall not exceed such amount as may be prescribed by the CentralGovernment from time to time.
iii. Stock Options: An Independent Director shall not be entitled to any stock optionof the Company.
The remuneration structure for Non-Executive and Independent Directors of the Companyis as follows:
|Sr. No. ||Particulars ||Amount (in `) |
|1. ||Board sitting Fees (per Director per meeting) ||50000 |
|2. ||Audit Committee Sitting Fees (per Member per meeting) ||20000 |
|3. ||Board remuneration ||- |
|4. ||Travel allowance for directors ||- |
|5. ||Sitting Fees of other Committees (per Member per meeting) ||- |
AMENDMENTS AND UPDATIONS
The Nomination and Remuneration Committee periodically shall review this Policy and mayrecommend amendments to this Policy from time to time as it deems appropriate which shallbe in accordance with the provisions of the Companies Act 2013 and SEBI (ListingObligations Disclosures Requirements). In case of any modifications amendments orinconsistencies with the Act the provisions of the Act and the rules framed thereunderwould prevail over the Policy.
The Policy is updated on August 03 2017.
Details pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
|a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year ending March 31 2017: ||As on date of this Report the Board comprises of 7 Directors consisting of 2 Executive Directors 3 Independent Directors and 2 Non-Executive Director. |
| ||The Non-Executive/ Independent Directors receive sitting fees of Rs. 50000 for attending each meeting of the Board and Rs. 20000 for attending each meeting of the Audit Committee and do not receive any other form of remuneration. |
| ||The ratio of remuneration of Executive Directors to the median remuneration of the employees of the Company for the financial year March 31 2017: |
| ||Mr. Manish Gupta - 42.74 |
| ||Dr Gautam Kumar Das - 30.83 |
| ||Mr. Sharat Narasapur - Nil |
| ||The median remuneration for the period under review is approximately Rs. 182635.50 |
b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year ended March 31 2017:
|# Particulars ||% Increase |
|1 Mr. Manish Gupta ||6% |
|Managing Director and Chief Executive Officer || |
|2 Dr Gautam Kumar Das ||0% |
|Joint Managing Director || |
|3 Mr. Sharat Narasapur ||5% |
|Joint Managing Director || |
|4 P R Kannan ||5% |
|Chief Financial Officer || |
|5 Mr. Preetham Hebbar ||6% |
|Company Secretary || |
|c. The percentage increase in the median remuneration of employees in the financial year ending March 31 2017 ||28.62% |
|d. The number of permanent employees on the rolls of Company as at March 31 2017 ||797 |
|e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile inc rease in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||On an average employees received an annual increase of 8%. |
The Company affirms remuneration to the Directors and Key Managerial Personnel is asper the remuneration policy of the Company.
1. Dr Gautam Kumar Das retired-on January 7 2017 and Mr. Sharat Narasapur wasappointed on January 8 2017 as Joint Managing Director. He receives nil remuneration fromthe Company. He receives remuneration from Alivira Animal Health Limited Wholly-OwnedSubsidiary of the Company.
2. Mr. P R Kannan & Mr. Preetham Hebbar resigned on February 10 2017.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Thane ||Dr. Gopakumar G Nair |
|Date: August 3 2017 ||Chairman |
Form No. AOC - 2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
1. DETAILS OF CONTRACTS OR ARRANGEMENTS OR TRANSACTIONS NOT AT ARM'S LENGTH BASIS There were no contracts or arrangements or transactions entered into by theCompany with related parties during the year ended March 31 2017 which were not at arm'slength basis.
2. DETAILS OF MATERIAL CONTRACTS OR ARRANGEMENT OR TRANSACTIONS AT ARM'S LENGTH BASISFOR THE YEAR ENDED MARCH 31 2017 ARE AS BELOW:
|Sr. No. ||Name(s) of the related party and nature of relationship ||Nature of contracts/ arrangements/ transactions ||Duration of the contracts / arrangements/ transactions ||Salient terms of the contracts or arrangements or transactions ||Monetary Value upto (` in Million) ||Date(s) of approval by the Board ||Amount paid as advances if any |
|1 ||Strides Shasun Limited ("Strides") (Formerly known as Strides Arcolab Limited) ||Sale of Materials / Services as per prevailing market prices ||Upto March 31 2017 ||The Company will supply Active Pharmaceutical Ingredients (Raw Materials) to Strides at prevailing market price ||557.80 ||May 14 2016 ||Nil |
| || || || || || || || |
|2 ||Alivira Animal Health Limited India ||Sale of Material / Services at cost plus 5% mark-up ||Upto March 31 2017 ||The Company will supply Active Pharmaceutical Ingredients and Intermediates to Alivira ||935.07 ||May 14 2016 ||Nil |
| || ||Loans and Advances given ||Upto March 31 2017 ||To fulfil the funding requirements as and when need arises ||583.96 ||May 14 2016 ||Nil |
| || ||Loans and Advances repaid ||Upto March 31 2017 ||For loan repayments ||685.11 ||May 14 2016 ||Nil |
| || || || || || || || |
| || |
For and on behalf of the Board of Directors
|Place: Thane || |
Dr. Gopakumar G Nair
|Date : August 3 2017 || |
The particulars on Conservation of Energy Technology Absorption Foreign ExchangeEarnings/ Outgo and Research & Development as prescribed under Section 134(3)(m) ofthe Companies Act 2013 read with rule 8(3) of the Companies (Accounts) Rules 2014
A. CONSERVATION OF ENERGY Form A
Disclosure of Particulars with respect to Conservation of Energy.
| ||2016-17 ||2015-15 |
|A. PO WER AND FUEL CONSUMPTION : || || |
|1 Electricity : || || |
|(a) Purchased ||18619787 ||17057359 |
|Total amount (` in Million) ||125.42 ||119.88 |
|Rate / Unit (`) ||6.74 ||7.03 |
|(b) Own Generation - through Diesel || || |
|Generator Set : || || |
|Unit ||494664 ||658226 |
|Units per-litre of diesel oil ||3.21 ||3.39 |
|Cost / Unit (`) ||11.46 ||14.05 |
|2 Coal : || || |
|Quantity (tonnes) ||Nil ||Nil |
|Total Cost (` in Million) ||Nil ||Nil |
|Ave rage rate (`) ||Nil ||Nil |
|3 Furnace Oil / Light Diesel Oil: || || |
|(a) Light Diesel Oil: || || |
|Quantity (litres) ||4230 ||1750 |
|Total amount (` in Million) ||0.23 ||0.11 |
|Rate / Litre (`) ||55.16 ||63.29 |
|(b) Furnace Oil : || || |
|Quantity (litres) ||463519 ||839282 |
|Total amount (` in Million) ||10.32 ||18.16 |
|Rate / Litre (`) ||22.26 ||21.64 |
|(c ) Diesel : || || |
|Quantity (litres) ||15600 ||19000 |
|Total amount (` in Million) ||0.89 ||1.04 |
|Rate / Litre (`) ||56.93 ||54.68 |
|4 Others / Internal Generation : || || |
|(a) Natural Gas || || |
|Quantity (scm ) ||Nil ||NIL |
|Total Cost (` in Million) ||Nil ||NIL |
|Rate / Unit (`) ||Nil ||NIL |
|(b) Briquettes || || |
|Quantity (Kg ) ||7116880 ||4564268 |
|Total Cost (` in Million) ||41.00 ||27.15 |
|Rate / Unit (`) ||5.76 ||5.95 |
Form B a. Measures taken for the year 2016 17
1. Briquette fired Boiler of 4T/hr installed and commissioned. This reduces operatingcost and eliminates usage of fossil fuel (FO).
2. Plant canteen office & street lights are replaced with LEDs reduces thepower compared to conventional lighting system.
3. Water ring & Oil ring vacuum pumps replaced with water & steam jet ejectors.This will eliminate the usage of oil in the vacuum pump and reduces operating cost.
4. Electrical power supply done through power banking system from private powergenerating units resulting efficient and economical power supply.
5. Expansion of Effluent Treatment Plant (ETP) including Multiple Effect Evaporator(MEE) is done to make Mangalore a Zero Discharge Unit.
6. Reverse Osmosis (RO) plant installed in Effluent Treatment Plant (ETP) as tertiarytreatment facility. The permeate water from the RO plant is used for the general purposethere by reducing the fresh water in-take.
7. Expansion of Effluent Treatment Plant (ETP) carried out by installing Agitated ThinFilm Dryer (ATFD) to separate the salts present in high TDS effluents. This will reducethe load on the Multiple Effect Evaporator (MEE) and improves the effluent treatment plantperformance.
8. Temperature controllers installed for the cooling tower fans to switch off the fanwhen the cooling tower water comes to the pre-set temperature.
9. Installed energy SAVER for plant lighting. Power saving Approx. 230 Units/Day.
10. Recycling of Steam condensate water from Fluid bed drier 's and Air tray drier toboiler instead of sending to ETP as LTDS . Savings of 60 KL / Month
11. Production block lights are installed with CFL bulb / tubes
b. Steps taken or impact on conservation of energy 2016-17
1. Continue replacing CFL bulbs with LEDs in balance departments. in progress
2. Production block final product processing area converted the Air-conditioningsystem from Direct Expansion (DX) air cooled type to Chilled water coil. This reduced theelectrical consumption.
3. Installation of temperature controller on the hot water system done which cut offthe steam supply after the hot water reaches the pre-set temperature. This reduced thesteam consumption.
4. Continuation of Plant lights replacement with LEDs will reduce the powerconsumption compared to the conventional.
5. Recycling of Thermopack pump gland cooling water reduced water consumption &reduced ETP load.
6. Recycling of Steam condensate water from Fluid bed drier 's and Air tray drier toboiler instead of sending to ETP as LTDS . Savings of 60 KL / Month
7. Production Change room R&D labs QA office and QC lab modified with LED`s
B. TECHNOLOGY ABSORPTION Research & Development (R&D):
a. Core areas of R&D:
1. Development and scale-up of Veterinary therapeutic and nutritional formulations forglobal markets.
2. Development and scale-up of Human and Veterinary generic APIs for regulated markets.
3. Development of non-infringing cost effective commercially viable technologies forFormulations APIs and intermediates through innovative synthetic routes.
4. Product life cycle management by process improvements of existing commercial APIsand Formulations.
5. Identification of impurities developing analytical methods impurity profiling& ensuring quality of products.
b. Benefits derived as a result of R&D:
1. In-house speedy development of niche products their commercialization &introduction into market.
2. Tapping potential markets through new Drug Master Filings and formulation dossiers.
3. Enhancing profits by continuous process improvements.
4. Effluent reduction by developing green technologies.
c. Future plan of action:
1. Develop niche Human and Veterinary APIs and build strong pipe line.
2. To focus on the development of niche Veterinary Formulations and build sustainablebusiness.
3. Continued focus on improving quality cost and operation through processmodification as per regulatory norms.
4. Integration of API development with in-house formulation development.
Expenditure on R&D:
| || ||(` in Million) |
| ||2016-17 ||2015-16 |
|Capital ||- ||- |
|Recurring ||124.50 ||86.05 |
|TOTAL ||124.50 ||86.05 |
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Thane ||Dr. Gopakumar G Nair |
|Date: August 3 2017 ||Chairman |
Disclosure under Section 62 of the Companies Act 2013 read with Rule 12 of Companies(Share Capital and Debentures) Rules 2014 and SEBI (Share Based Employee Benefits)Regulations 2014 forming part of the Directors' Report for the year ended March 31 2017
A. DETAILS RELATED TO EMPLOYEE STOCK OPTION SCHEME
In the Extraordinary General Meeting held on March 8 2008 the shareholders approvedthe issue of options under the ESOP scheme. Options to be granted under the Scheme in anyfinancial year shall not result in issue of equity shares of more than 7% of the issuedand subscribed capital of the Company as at the date of grant of options. In accordancewith the above the Company established an ESOP trust to administer the Scheme on February25 2010.
In the Board meeting dated March 29 2010 the Company has allotted 700000 equityshares to the ESOP trust with a Face value of Rs. 10 per share at a premium of Rs. 103 pershare. As at March 31 2017 1790000 equity shares (March 31 2016 2320000equity shares) of Rs. 2 each are reserved towards outstanding Employee Stock Optionsgranted / available for grant .
As per the Scheme the Compensation Committee grants the options to the eligibleemployees. The exercise price and vesting period of each option shall be as decided by theCompensation Committee from time to time. The options granted would normally vest over amaximum period of 4 years from the date of the grant in proportions specified in theScheme. Options may be exercised with in a period of 4 years from the date of firstvesting of the options.
During the current year the Compensation Committee in its meeting held on May 14 2016has granted 345000 options under SSL ESOP Scheme 2010 ("SeQuent ESOP 2010") tocertain eligible employees of the Company. The options allotted under this plan isconvertible into equal number of equity shares.
|Option movement during the year 2016-17 || |
|Particulars ||SeQuent ESOP |
| ||2010 |
|Number of options outstanding as at April 1 2016 ||3545000 |
|Number of options granted during year ||345000 |
|Number of options forfeited / lapsed during the year ||435000 |
|Number of options vested during the year ||1125000 |
|Number of options exercised during the year ||530000 |
|Number of shares arising as a result of exercise of options ||530000 |
|Loan repaid by the Trust during the year from exercise price received (Money realised by exercise of options during the year) ||Rs. 11472500 |
|Options outstanding as at March 31 2017 ||2925000 |
|Options exercisable as at March 31 2017 ||1052500 |
|Variation of terms of options ||Nil |
|Weighted average exercise price of options ||` 29.87 |
|Weighted average fair values of options ||` 75.74 |
|Range of exercise price for options outstanding at the end of the year ||Rs. 10 to ` 87 per Option |
B. EMPLOYEE-WISE DETAILS OF OPTIONS GRANTED DURING THE YEAR
|Sr. No. ||Name of employee ||Designation ||No. of options granted during the year ||Exercise price |
|a. ||Key managerial personnel/ Senior managerial personnel ||Not Applicable || || |
|b. ||Any other employees who received a grant in any one year of option amounting to 5% or more of options granted during the year || |
|1. ||James D. Terish ||AGM - BSD ||25000 ||` 87 per option |
|2. ||Naraveera B.P. ||AGM - Q.A. ||25000 ||` 87 per option |
|3. ||B.G.Krishna ||AGM - PDL ||25000 ||` 87 per option |
|4 ||Dr. P.K.Vasudeva ||DGM - R & D ||25000 ||` 87 per option |
|5 ||Hitesh A Galani ||DGM-Procurement ||25000 ||` 87 per option |
|6 ||Vaidyanathanan Prakash ||DGM-Planning ||25000 ||` 87 per option |
|7 ||Chander Kant Dhawan ||Sales Manager -North ||25000 ||` 87 per option |
|8 ||Sumit Saxena ||AVP- International Marketing ||50000 ||` 87 per option |
|9 ||Ramkrishna Kamath ||AGM - Costing ||25000 ||` 87 per option |
|10 ||Ravi Kiran S ||GM-Works ||25000 ||` 87 per option |
|11 ||Sravan Kumar T ||AGM - Production ||25000 ||` 87 per option |
|12 ||Murali Krishna H ||GM - Works ||25000 ||` 87 per option |
c. Identified employees who were granted option during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversion) of theCompany at the time of grant Nil
|Details related to Trust || |
|Particulars ||Details |
|1 Name of the Trust ||SeQuent Scientific Employee Stock Option Plan Trust |
|2 Details of the Trustees ||Mr. Tushar Mistry and Mr. Prasad Lad |
|3 Amount of loan disbursed by company / any company in the group during the year ||Nil |
|4 Amount of loan outstanding (repayable to company / any company in the group) as at the end of the year ||` 41679000 |
|5 Amount of loan if any taken from any other source for which company / any company in the group has provided any security or guarantee ||Nil |
|6 Any other contribution made to the Trust during the year ||Nil |
|Brief details of transactions in shares by the Trust || |
|(a) Number of shares held as at April 1 2016 ||2320000 |
|(b) Number of shares acquired during the year through ||Nil |
|(i) primary issuance acquisition also as a percentage of paid up equity capital as at the end of the previous financial year along with information on weighted average cost of acquisition per share ||Nil |
|(c) Number of shares transferred to the employees on exercise of options under SeQuent ESOP Scheme 2010 ||530000 |
|(d) Number of shares held as at March 31 2017 ||1790000 |