The Directors present their 29th Annual Report on the business andoperations of the Company and the accounts for the financial year ended March 31 2020
Rs. In Lakhs
|Financial Results || |
|Particulars ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||52782.53 ||53690.57 ||86320.17 ||64869.09 |
|Other Income ||6597.13 ||3540.13 ||4133.37 ||1902.89 |
|Total Income ||59379.66 ||57230.70 ||90453.54 ||66771.98 |
|Profit Before Interest Depreciation and Tax ||27296.37 ||22355.68 ||30140.14 ||25036.12 |
|Less: Finance cost ||18.50 ||5.98 ||31.97 ||6.00 |
|Less : Depreciation and amortisation expenses ||1965.38 ||2084.32 ||3161.92 ||2342.50 |
|Profit Before Tax ||25312.49 ||20265.38 ||26946.25 ||22687.62 |
|Less: Tax Expenses ||5548.64 ||5448.73 ||5437.88 ||5032.08 |
|Net Profit ||19763.85 ||14816.65 ||21508.37 ||17655.54 |
|Less: Non-controlling Interest ||- ||- ||7.57 ||(1.16) |
|Net profit attributable to the shareholders of the Company ||19763.85 ||14816.65 ||21500.80 ||17656.70 |
OPERATIONS REVIEW / PERFORMANCE
The Company has on standalone basis registered total revenue of Rs.52782.53 Lakhs (Total Income Rs. 59379.66 Lakhs) from operations during the year underreview as against Rs. 53690.57 Lakhs ( Total Income Rs.57230.70 Lakhs) in the previousfinancial year The Profit after tax was Rs. 19763.85 Lakhs during the year under reviewas against Rs. 14816.65 Lakhs in the previous financial year
The Company has on consolidated basis registered total revenue of Rs.86320.17 Lakhs
(Total Income Rs. 90453.54) from operations during the currentfinancial year as against Rs. 64869.09 Lakhs (Total Income Rs. 66771.98 Lakhs )in theprevious financial year .
MANAGEMENT DISCUSSION AND ANALYSIS
As required under Section 134(3)(i) of the Companies Act 2013 theState of Affairs of the Company along with operational performance/review has beendiscussed in Management Discussions and Analysis Report which is appended in this annualreport pursuant to Regulation 34(2) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015.
The Board of Directors at their Board Meeting held on March 042020declared an Interim Dividend of Rs. 2.10 paise (105%) per equity share of Rs.2/- eachwhich was already paid during the year to those members whose name appeared in theRegister of Members and beneficial owners as on the record date March 132020 and furtherthe Board of Directors at their meeting held on June
182020 have recommended a final dividend
of Rs. 0.40 paise per equity share (20%) of Rs. 2 /- each subject tothe approval of the members at the ensuing Annual General Meeting.
TRANSFER TO RESERVES
The Board of Directors have decided to retain the entire amount ofprofits for the year 201920 in profit and loss account.
As on March 31 2020 the Company has five subsidiaries :
1. Caplin Steriles Limited
2. Argus Salud Pharma LLP
3. Caplin Point Far East Limited Hongkong. (which has five operatingsubsidiaries in Latin America)
4. Caplin Point Laboratories Colombia SAS- Colombia.
5. Caplin Point (S) Pte. Ltd. Singapore
Caplin Steriles Limited and Caplin Point Far East Limited Hongkong arematerial subsidiaries of Caplin Point Laboratories Limited.
The consolidated financial results/ performance incorporating thefinancial statements of the above subsidiaries are attached to the annual report asrequired under the Accounting Standards and SEBI Regulations.
Further a statement containing the salient features of the financialstatements of our
subsidiaries pursuant to Section 129(3) of the Companies Act 2013 inthe prescribed Form AOC-1 is appended as Annexure I to the Board's report.
Pursuant to Section 136(1) of the Companies Act2013 read withrelevant rules the Audited Annual Accounts of the above subsidiaries of the Company havebeen hosted on the website of the Company.
The Company did not accept any deposits from the public within themeaning of Chapter V of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
The paid up share capital as on March 312020 stood atRs.151285500/- consisting of 75642750 equity shares at the face value of Rs.2/-each. During the year Company has allotted 12500 equity shares of Rs.2/- each underEmployee Stock Option Plan -2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT 2013
Particulars of loans guarantees and investments as on March 31 2020are given in the Note No. 3 3A46 & 10 to the standalone financial statements.
NUMBER OF MEETINGS OF THE
The Board met five times during the year ended March 31 2020 whichwere held on 22.05.2019 12.08.2019 30.10.2019 05.02.2020 and 04.03.2020.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 312020 the Board consist of a Non- executive Chairman anexecutive Director six Independent Directors and a Non-executive - Non- IndependentDirector
Dr Sridhar Ganesan's (DIN : 06819029) present term of office as theManaging Director ends on August 242020 the Board of Directors at their meeting held onJune 182020 have approved his re-appointment for another term of two years commencingfrom August
Dr C K Gariyali (DIN : 08711546) has been appointed as an AdditionalDirector Non- executive -Independent of the Company for a period of three consecutiveyears with effect from March 042020. In the opinion of the Board of Directors she iseligible to be appointed as an Independent Director The Company has received a notice froma member signifying her candidature for the position of Independent Director
During the year under review Dr K Nirmala Prasad Independent Directorexpired on December 052019. The Board of Directors express their deep condolences on heruntimely death. Further the Board wish to place on record the valuable guidance
and directions given during her tenure as a Director.
RETIREMENT BY ROTATION
In terms of Section 152 (6) of the Companies Act 2013 Mr D P Mishra(DIN :02032818) retires by rotation and being eligible offers himself for re-appointment.
KEY MANAGERIAL PERSONNEL
Pursuant to section 2 (51) and Section 203 of the Companies Act2013DrSridhar Ganesan Managing Director Mr D Muralidharan Chief Financial Officer and MrVinod Kumar S Company Secretary are the Key Managerial personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted theirdeclarations as required pursuant to Section 149(7) of the Companies Act 2013 statingthat they meet the criteria of independence as stipulated in Section 149(6) of theCompanies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 the Directorsconfirm that:
a. In the preparation of the annual accounts the applicable accountingstandards(IND AS) had been followed along with proper explanation relating to materialdepartures;
b. The Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312020 andof the profit of the Company for that period;
c. The Directors had taken proper and
sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concernbasis;
e. The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
f. The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
Pursuant to Section 134 (3)(m) of the Companies Act2013 read with inRule 8 (3) of the Companies (Accounts) Rules 2014particulars of conservation of energytechnology absorption foreign exchange earnings and outgo are given as Annexure II tothis Directors' Report.
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND
Pursuant to the provisions of Section 134(3) (p) of the Companies Act2013the Board had carried out performance evaluation of its own of the Board Committeesand of the Independent Directors. Independent Directors at their separate meeting held onMarch
042020evaluated performance of the NonIndependent Directors Board asa whole and of the Chairman of the Board. The outcomes of the evaluation process weresatisfactory which resulted in the active engagement of the Board and committees in theCompany.
Further the Directors are regularly informed and familiarized duringthe Board Meetings about the activities of the Company and its operations products andits development and latest trends in the pharmaceutical industry and issues faced by theindustry.
The Board has carried out an evaluation of its own performance and thatof its Directors individually and the sub committees of the Board. The manner in which theevaluation has been carried out is explained in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of section 135 of the Act read with CSRRules the Company has constituted Corporate Social Responsibility Committee and basedupon the recommendations of the CSR committee the Board of Directors have approved CSRPolicy.
Disclosure under Companies (Corporate social responsibility policy)rules 2014 is annexed as an Annexure III to this report.
The Composition of the Audit Committee the meetings of Audit Committeeand their terms of reference of the Audit Committee have been disclosed separately in theCorporate
Governance Report which is annexed and forms part of this annualreport.
NOMINATION AND REMUNERATION COMMITTEE (NRC) AND ITS POLICY
The Nomination and Remuneration Committee is empowered to authorize andexercise the power as specified in section 178 of the Companies Act 2013. The Company hasa policy on Directors appointment and remuneration including the criteria for determiningthe qualification positive attributes and independence of a Director and other matters asprovided under section 178(3) of the Companies Act2013. The Nomination and RemunerationCommittee policy is annexed in Annexure IV of the Director's report
INTERNAL FINANCIAL CONTROLS
The Company has designed and implemented adequate financial controlsystems with respect to the financial statements. During the year under review no serious/ adverse observation have been received from the Internal Auditors of the Company withrespect to ineffectiveness or inadequacy of such controls.
The Company has established a vigil mechanism through a Whistle BlowerPolicy where Directors and employees can voice their genuine concerns or grievances aboutany unethical or unacceptable business practice. A whistle-blowing mechanism not onlyhelps the Company in detection of fraud but is also used as a corporate governance toolleading to prevention and deterrence of misconduct .It provides direct access to theemployees of the Company to approach the Compliance Officer or the Chairman of the AuditCommittee where necessary. The Company ensures that genuine Whistle Blowers are accordedcomplete protection from any kind of unfair treatment or
victimization. The Vigil mechanism policy is disclosed on the websiteof the Company i.e(www.caplinpoint.net)
The Members of the Company at their AGM held on September 212017 havereappointed M/s. CNGSN & Associates LLP Chartered Accountants Chennai as StatutoryAuditors of the Company for a second term of five years from the conclusion of 26th AnnualGeneral Meeting held on September 212017 till the conclusion of 31th Annual GeneralMeeting to be held in the financial year 2022.
The Audit Report on financial statements of the Company forms a part ofthis Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Board of Directors of the Company appointed M/s. G Ramachandran &Associates Company SecretariesChennai to conduct the secretarial audit of the Company.The Secretarial Audit Report (Form MR - 3) is given as Annexure V to this Directors'Report.
Pursuant to Regulation 24A of SEBI (Listing Obligations and DisclosureRequirements) Regulations2015 a listed entity shall annex with its Annual Report theSecretarial Audit Report of its material unlisted subsidiary incorporated in India. CaplinSteriles Limited being a material unlisted subsidiary of the Company the SecretarialAudit Report(Form MR-3) is annexed as Annexure V-A to this Directors Report
Pursuant to Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements)
Regulations2015 a report on Corporate Governance is given separatelywhich forms a part of this Annual report.
The Company has in place a Risk Management framework to identifyevaluate and monitor business risks and challenges across the Company that seek tominimise the adverse impact on business objectives and capitalise on opportunities. TheCompany's success as an organisation largely depends on its ability to identify suchopportunities and leverage them while mitigating the risks that arise while conducting itsbusiness.
A Risk Management Committee of the Board of Directors is chaired by DrR Ravichandran an Independent Director and has been constituted to identify elements ofrisk in different areas of operations and to develop a policy for actions associated tomitigate the risks as well as identify new and emergent risks.
A brief report on the Risk Management are referred in the ManagementDiscussion and Analysis Report which forms a part of the Annual Report.
EMPLOYEE STOCK OPTION PLAN
The Company has two stock options in force (i.e) Caplin Point EmployeeStock Option Plan -2015 and Caplin Point Employee Stock Option Plan - 2017.The Company hasgranted 374250 options under Caplin Point Employee Stock Option Plan -2015 out of which92750 options has been exercised and allotted as on March 312020.The Company has granted288000 options under Caplin Point Employee Stock Option Plan-2017 as on March 312020.The details required under Rule 12 (9) of Companies (Share Capital and Debentures) Rules2014 and as required to be provided under the SEBI Guidelines as on March 31 2020 are setout in Annexure VI to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Particulars pursuant to Section 197(12) of Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is enclosed in the Annexure VII to this Directors report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions which were entered into during the yearunder review were at arm's length basis and in the ordinary course of business. There wereno materially significant related party transactions made by the Company with thePromoters Directors and Key Managerial Personnel which may have a potential conflict withthe interests of the Company at large.
All Related Party Transactions are placed before the Audit Committeefor review and approval. Prior omnibus approval of the Audit Committee is obtained on anannual basis for the transactions which are planned/repetitive in nature. Related PartyTransactions entered pursuant to the omnibus approval so granted are placed before theAudit Committee for its review on a quarterly basis specifying the nature value andterms and conditions of the transactions. All the Related Party Transactions under IndAS-24 have been disclosed at note no. 48 to the standalone financial statements formingpart of this Annual Report.
Particulars of transactions with related parties in prescribed formAOC 2 is enclosed as Annexure VIII
The related party transaction policy and material related partytransactions has been uploaded on the website of the Company.www.caplinpoint.net/investor/ companypolicies&codeofconduct/relatedpartytransactionpolicy.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 124 and 125 of the Companies Act2013 the amountof dividends remaining unpaid or unclaimed for a period of seven years from the date oftransfer to the unpaid account is required to be transferred to the Investor Educationand Protection Fund (IEPF) of the Central Government. Accordingly unpaid or unclaimeddividends in respect of the financial year 2011-12 have been transferred to the IEPF.
During the year under review the Company has credited 131000unclaimed equity shares of Rs.2/- each to Investor Education and Protection Fund to thoseshareholders who have not encashed/claimed their dividends for the dividends for a periodof seven consecutive years from the year 2011-12.
Pursuant to Section 124 and 125 of the Companies Act 2013 the unpaidor unclaimed dividend for the financial year 2012-13 has to be transferred to IEPF.Members who have not yet en-cashed or claimed the dividends that are yet to betransferred to the IEPF are requested to contact the Company's Registrar and ShareTransfer Agent at the earliest.
Members are requested to take note of the same and claim theirunclaimed dividends immediately to avoid transfer of the underlying shares to the IEPFAccount. The shares transferred to the IEPF Account can be claimed back by the concernedMembers from IEPF Authority after complying with the procedure prescribed under the Rules.
SHIFTING OF REGISTERED OFFICE:
The Company has shifted its registered office from "Narbavi"No.3 Lakshmanan Street T Nagar Chennai-600 017 to "Ashvich Towers" 3rd FloorNo.3 Developed Plots Industrial Estates Perungudi Chennai -600 096 effective July092020 for administrative convenience.
1. There has been no change in the nature of business of the Companyduring the year under review.
2. During the year under review no significant and material orderswere passed by the regulators or courts or tribunals impacting the going concern statusand Company's operations in future.
3. There were no Complaints filed pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013
4. Pursuant to Section 197 (14) of the Companies Act2013the ManagingDirector of the Company did not receive any remuneration or commission from any of itssubsidiaries
5. The Report of the Statutory Auditors (which forms a part of thisAnnual Report) and the Report of the Secretarial Auditor (which is Annexed to thisDirectors Report) are self explanatory having no adverse remarks/comments or disclaimer
6. The Company maintains cost records as per Companies (Cost Recordsand Audit) Rules2014.
7. The Board of the Company has adopted
a Dividend Distribution Policy which is attached as Annexure IX .ThePolicy is also available on the website of the Company under the "Investor"section.
8. The Business Responsibility Report as
required pursuant to Regulation 34(2) (f) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is attached as Annexure X of this AnnualReport.
9. During the year under review none of the employees were in receiptof remuneration pursuant Section 197(12) of
the Companies Act2013 read with rule 5(2) of the Companies(Appointment and Remuneration of Management Personnel)Rules2014.
10. As required under Section 134(3)(a) of the Companies Act2013. AnExtract of Annual Return on the prescribed form MGT 9 is given as Annexure XI to theDirectors Report.
The Board of Directors wishes to place on record their sincereappreciation to the customers suppliers business partners and subsidiaries andshareholders for their support. The Directors would like to thank the Bankers andfinancial Institutions as well. The Directors would take this opportunity to express theirappreciation for the dedicated efforts of the employees and their contribution which isdeeply acknowledged
| ||For and on behalf of the Board of Directors |
|Place : Chennai ||C C Paarthipan |
|Date : August 102020 ||Chairman |