To THE MEMBERS
Your Directors present their Seventy First Annual Report on the business and operationsof the Company together with the audited accounts for the year ended 31st March 2017.
1. FINANCIAL RESULTS:
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Profit before finance cost depreciation and tax ||1644.41 ||2176.93 |
|Finance cost ||52.24 ||77.56 |
|Depreciation ||342.88 ||352.67 |
|Profit before exceptional items and tax ||1249.29 ||1746.70 |
|Exceptional items - Income/(Expense) ||223.06 ||(682.03) |
|Profit before tax ||1472.35 ||1064.67 |
|Tax expense ||507.10 ||520.04 |
|Profit after tax ||965.25 ||544.63 |
|Other Comprehensive Income/(Expense) - Net of tax ||14.18 ||(6.61) |
|Total Comprehensive Income - Net of tax ||979.43 ||538.02 |
|Balance from last year ||3480.17 ||3229.27 |
|Total ||4459.60 ||3767.29 |
|Appropriations (In F.Y. 2017-18 - As per Ind AS) Proposed Dividend ||197.01 ||197.01 |
|Tax on Dividend ||40.11 ||40.11 |
|Transfer to General Reserve ||50.00 ||50.00 |
|Carried forward to Balance sheet ||4172.48 ||3480.17 |
|Total ||4459.60 ||3767.29 |
INDIAN ACCOUNTING STANDARD - Ind AS
Figures for F.Y. 2015-16 have been restated as per Ind AS and therefore may not becomparable with financials for F.Y. 2015-16 approved by the Board of Directors anddisclosed in the financial statement of previous year.
The Ministry of Corporate Affairs (MCA) in February 16 2015 notified that Ind AS areapplicable to certain class of Companies from April 1 2016 with a transition date ofApril 1 2015. Ind AS has replaced the previous Indian GAAP prescribed under section 133of Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014. Ind AS isapplicable to the Company from April 1 2016.
The reconciliation and description of the effect of the transition from previous GAAPto Ind AS have been set out in Note 44 in the notes to accounts.
The Directors are pleased to recommend payment of dividend @ 15% on the Equity ShareCapital (Rs. 1.50 per share of the value of Rs. 10/- each) for the year ended 31st March2017.
(a) The Companys gross turnover for the year amounted to Rs. 256 crores ascompared to Rs. 262 crores in the previous year. The Company earned a profit before tax ofRs. 14.7 crores as compared to Rs. 10.6 crores in the previous year.
(b) There has been enhanced competition in the market place with new capacities beingset up. This has resulted in pressure on margins with the new entrants following thestrategy of entry-level pricing. In addition the pharmaceutical sector had pressure ontheir demand due to restrictions on some of their exports imposed by several foreignregulatory bodies which in turn affected our sales to this segment.
(c) Exceptional items of Rs. 2.2 crores represent profit from sale of one residentialproperty.
(d) Profit after tax improved to Rs. 9.6 crores compared to Rs. 5.4 crores during theprevious financial year.
4. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
(b) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on 31st March 2017 and of the Profit ofthe Company for the year ended 31st March 2017.
(c) Proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
(d) The annual accounts have been prepared on a going concern basis.
(e) The Company has laid down internal financial controls to be followed and that suchfinancial controls are adequate and operating effectively and
(f) The Company has devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
5. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Re-appointment of Director liable to retire by rotation:
In terms of Section 152 of the Companies Act 2013 Mr. Mohan H. Bhandari Director isliable to retire by rotation at the ensuing Annual General Meeting and offer himself forre-appointment.
Other information pertaining to Mr. Mohan H. Bhandari is provided in CorporateGovernance Report annexed as Annexure II to this Report.
Resignation of Director:
Mr. Suresh A. Gandhi resigned from the Board of Directors w.e.f. 30th September 2016.The Board expressed and took on record its deep appreciation of the services rendered byMr. Suresh A. Gandhi over a span of more than 33 years in various capacities as ManagingDirector/Joint Managing Director/Non Executive Director of the Company and asmember/Chairman of various Committees of the Board.
Independent Director(s) Declaration:
The Independent Directors have submitted the declaration of Independence as requiredpursuant to section 149(7) of the Companies Act 2013 and Listing Regulations statingthat they meet the criteria of independence as provided therein.
6. EVALUATION OF THE BOARDS PERFORMANCE:
In compliance with the provisions of Companies Act 2013 and Regulation 17 of theListing Regulations. it is necessary to evaluate the performance of the Board and itsmembers by the Independent Directors of the Company. Pursuant to Schedule IV of theCompanies Act 2013 and the Rules made thereunder a separate meeting of the IndependentDirectors was held on 10th February 2017 without the attendance of non-independentDirectors and Company executives. The Independent Directors discussed matters pertainingto the Companys affairs and functioning of the Board and presented their views.
7. CONSERVATION OF ENERGY:
Details relating to the Conservation of Energy and Technology absorption and foreignexchange earnings and outgoings as required under Section 134 of the Companies Act 2013read with the Companies (Accounts) Rules 2014 are given in Annexure I forming part of theDirectors Report.
8. CORPORATE GOVERNANCE:
In terms of Listing Regulations and Companies Act 2013 a report on the CorporateGovernance along with a certificate from the Secretarial Auditors of the Company regardingcompliance of the conditions of Corporate Governance and Management Discussion andAnalysis Report are given in Annexure II and III respectively to this report.
9. CORPORATE SOCIAL RESPONSIBILITY (CSR):
In line with companys CSR policy the Company is helping in educating theunder-privileged and economically challenged children. Keeping this in mind the Companyis attempting to upgrade facilities and enhance the quality of education/training ofidentified educational institutions. Accordingly the Company is involved with 3educational institutions through direct participation in their upliftment as under:
(i) Municipal School in Nasik (co-education municipal school for economically backwardchildren);
(ii) Dharmveer Anand Dighe Jidd Special School at Thane (special school for physicallyhandicapped and mentally challenged children) and
(iii) Daang Seva Mandal Ashram School at Nasik (boarding and day school for adivasisand the under privileged children)
The Annual Report on CSR activities is given in Annexure IV to this report.
10. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year no reportable material weakness in the design oroperation were observed.
11. VIGIL MECHANISM:
Under the vigil mechanism of the Company by way of a whistle blower Policy protecteddisclosure can be made by a whistle blower to the Managing Director. The Whistle BlowerPolicy may be accessed on the Companys website at the link:http://www.caprihansindia.com/corporatepolicy
12. SEXUAL Harassment Mechanism:
The Company has adopted a policy on Prevention of Sexual Harassment at Workplace andformed a committee to address the complaints in this regard in a time bound manner.
During the financial year 2016-17 no complaints were received in this regard.
13. AUDITORS AND AUDITORS REPORT:
At the Sixty-ninth Annual General Meeting (AGM) held on 28th September 2015 M/S. S RB C & Co. LLP Chartered Accountants (Firm Reg. No. 324982E) were appointed as theStatutory Auditors of the Company to hold office for five years from the conclusion ofthe Sixty-ninth AGM until the conclusion of Seventy-fourth AGM of the Company to be heldin the year 2020 subject to ratification of the appointment by the Members at every AGMheld after 69th AGM. At the 70th AGM held on 30th September 2016 the Statutory Auditorsappointment was ratified. The amounts mentioned in the observations of the StatutoryAuditors in Annexure 1 to their report dated 19th May 2017 (Refer Serial Nos (iii)and (xiii)) regarding related party transactions are adequately provided in the books ofaccounts.
At the Seventieth Annual General Meeting (AGM) held on 30th September 2016 M/S.Dhananjay V Joshi & Associates Cost Accountants (Firm Reg. No. 000030) wereappointed as Cost Auditors of the Company for conducting the audit of cost records of theCompany for the financial year 2016-17.
The Board had appointed M/s. Vyas Deshpande & Associates Practising CompanySecretaries to carry out Secretarial Audit under the provisions of Section 204 of theCompanies Act 2013 for the financial year 2016-17.
The Report of the Secretarial Auditor pursuant to Section 204(1) of the Companies Act2013 and the rules made thereunder is given in Annexure V to this report.
(a) AUDIT COMMITTEE:
The Audit Committee comprises of Mr. Siddharth S. Shetye (Chairman) Mr. K. V. Mani andMr. Bhoumick S. Vaidya as members. All the recommendations made by the Audit Committeewere accepted by the Board.
(b) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
In terms of the provisions of Section 197(12) of the Companies Act 2013 (hereinreferred as Act) read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 statement showing the names and otherparticulars of the employees drawing remuneration is excess of the limits set out in thesaid rules forms part of the Annual Report.
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Act read with Rules 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 also forms part of the Annual Report.
However as per the provisions of Section 136(1) Act the Report and Accounts are beingsent to the members excluding the aforesaid information. Any member interested inobtaining such particulars may inspect the same at the Registered Office of the Company.
(c) EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the annual return is given in Annexure VI tothis report.
(d) NUMBER OF BOARD MEETINGS:
The Board of Directors met 5 (five) times in the year 2016-17. The details of the boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport.
(e) RELATED PARTY TRANSACTIONS:
All the related party transactions entered by the Company during the financial yearwith related parties were in the ordinary course of business and on arms lengthbasis and are in compliance with the applicable provisions of the Act and the ListingRegulations. All the related party transactions are presented to the Audit Committee fortheir recommendations to the Board.
The Related Party Transaction Policy is available on the Companys website at thelink: http://www. caprihansindia.com/corporatepolicy
The disclosure relating to the transaction with related parties are mentioned in NoteNo. 34 to the notes on financial statement.
(f) PARTICULARS OF LOAN GIVEN INVESTMENT MADE GUARANTEES GIVEN AND SECURITIESPROVIDED:
Particulars of loan given are provided in the Note No. 6 to the notes on financialstatements.
15. INDUSTRIAL RELATIONS:
The industrial relations remained cordial during the year.
The Board wishes to place on record its appreciation of the services rendered by theemployees of the Company. The Board also wishes to thank the Bankers for the co-operationand assistance extended by them.
| ||On behalf of the Board of Directors |
| ||ROBIN BANERJEE |
| ||Managing Director |
|Place : Pune ||NITIN K. JOSHI |
|Dated : 19th May 2017 ||Director |