Your Directors are pleased to present 26th Annual Report and the Company'saudited financial statements for the financial year ended March 31 2017.
Summary of your Company's financial performance both standalone and consolidated forthe year ended March 31 2017 is tabulated below:
(Rs. In Lakhs)
| ||Standalone ||Consolidated |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2016 ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Revenue from Operations ||137416.90 ||135349.02 ||143525.34 ||138293.02 |
|Other Income ||1452.02 ||628.70 ||992.53 ||523.89 |
|Total Income ||138868.92 ||135977.72 ||144517.87 ||138816.91 |
|EBITDA ||31031.89 ||27625.14 ||30876.33 ||28150.41 |
|Less: Finance Costs ||3216.41 ||3704.57 ||3225.63 ||3706.79 |
|Less: Depreciation ||7135.16 ||5824.71 ||7151.27 ||5840.15 |
|Profit Before Tax ||20680.32 ||18095.86 ||20499.43 ||18603.47 |
|Less: Tax Expenses ||6397.65 ||6017.51 ||6520.14 ||6114.97 |
|Net Profit After Tax ||14282.66 ||12078.35 ||13979.29 ||12488.50 |
|Add : Share of (profit)/loss in joint ventures ||- ||- ||2472.61 ||(188.45) |
|Net Profit after taxes and share of profit / || || || || |
|(loss) of associates ||14282.66 ||12078.35 ||16451.90 ||12300.05 |
|Add: Surplus Brought Forward from Previous ||17587.47 ||7859.40 ||17545.58 ||7595.81 |
|Year || || || || |
|Surplus Available ||31870.14 ||19937.75 ||33997.48 ||19895.86 |
|Appropriations made to Surplus: || || || || |
|Dividends including dividend tax ||2233.04 ||2350.28 ||2233.04 ||2350.28 |
|Transfer to General Reserve ||10000.00 ||- ||10000.00 ||- |
|Balance carried to Balance Sheet ||19637.09 ||17587.47 ||21764.44 ||17545.58 |
|Basic Earnings per share ||6.53 ||5.84 ||7.52 ||5.95 |
|Diluted Earnings per share ||6.49 ||5.73 ||7.48 ||5.83 |
Note: The above figures are extracted from the standalone and consolidated financialstatements
Your Company is covered under phase I of the Indian Accounting Standards (Ind AS)implementation program notified by Ministry of Corporate Affairs Government of India.Accordingly your Company has prepared financial statements for the FY 2016-17 as per IndAS because of which previous year figures have been restated as per Ind AS whereverrequired.
Overview of Financial and Business Operations:
The Company's Standalone revenues from operations was H 137416.90 lakhs for the FY2016-17 as compared to H 135349.02 lakhs for the previous year registering growth of1.53% in the current financial year. The Company has made Net Profit of H 14282.66 lakhson standalone basis for the year under review as compared to H 12078.35 lakhs for theprevious year registering a growth of 18.25% in the current financial year.
The primary growth driver in FY 2016-17 was led by change in product mix. On astandalone basis the Active Pharmaceutical Ingredients (API) business contributed thelargest share of revenue of the Company at 39% while Pharmaceutical Finished Intermediates(PFI) and Finished Dosages contributed 24% and 37% respectively while it was 38% 28% and34% for API PFI and Finished Dosages respectively for FY 2015-16. The profitabilityoutpaced revenue growth due to several reasons. Our continuous efforts on operationalexcellence process innovation yield improvement and lower raw material cost resulted inimproved earnings.
During the year under review we have received the Establishment Inspection Report fromthe USFDA for Jeedimetla plant. We had completed the US FDA audit for Gagillapur facilityand INFARMED audit for our Gagillapur and Bonthapally facilities during the year underreview. In the FY 2016-17 we have filed four ANDAs from Hyderabad India. We have alsofiled three DMFs from vizag facility which will be used for building future revenue fromAPI business. The management believes that the profitability margins from the operationsare sustainable and it will continue to strengthen its leadership position throughdedicated research and introduction of new products.
Vertical integration has always been our strength and focus area. We will continue ourfocus on our core business and strengthen it by enhancing our capacities improving ourefficiencies adding new products moving up in the value chain and most importantlyoffering better services to our customers. The Company will continue to solidify itsbusiness model and build systems that are sustainable as it continue to scale-up.
Expansion Programs and Projects:
We have initiated expansion of API capacities in Bonthapally for Paracetamol Metforminand Guaifenesin. The project is in progress and we expect it to be complete by firstquarter of FY18. This should remove the API level bottleneck and translate into increasedrevenues from our core business activity from the second quarter of FY18 onwards. PFICapacity enhancement in Gagillapur up to 4000 TPA is in progress and expected to completeby second quarter of FY18.
The Board of Directors has recommended a final dividend of 25 paisa per equity share(Face value H 1/- per equity share) for the FY 2016-17 amounting to H 571.76 lakhs. Thisis in addition to the interim dividend of 65 paisa per equity share paid during the year.The total dividend for the
FY 2016-17 aggregates 90 paisa per equity share amounting to H 1993.11 lakhs ascompared to 65 paisa per equity share paid in the previous year.
Transfer of Amount to Reserves:
The Board has recommended transfer of H 10000 lakhs to general reserve from theprofits of the year under review.
Consequent to amalgamation of M/s. GIL Lifesciences Private Limited with the Companyduring the year the authorised share capital of GIL Lifesciences Private Limited of H160000000 was merged with the authorised share capital of the Company in terms of thescheme of amalgamation approved by Honorable High Court of Judicature at Hyderabad. Thusthe Authorised Share Capital of the Company stood increased from H 345000000/- to H505000000/- for the financial year ended 31st March 2017.
The Company has allotted 11401000 equity shares of H 1/- each to the promoters uponexercise of an equal number of warrants vested in them pursuant to the approval of themembers obtained during the financial year 2015-16. The Company has also allotted 590000equity shares of H 1/- each upon exercise of an equal number of stock options by theemployees pursuant to the extant Stock Option Scheme of the company.
In view of the above allotments the outstanding shares of the company increased from216711770 equity shares of H 1/- each to 228702770 equity shares of H 1/- each.
Transfer to the Investor Education & Protection Fund (IEPF):
In terms of Section 124(5) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 unclaimeddividend amounting to H 142701 (one lakh forty two thousand seven hundred and one only)for the financial year 2008-09 was transferred to the Investor Education and ProtectionFund established by the Central Government during the year under review.
Management's Discussion and Analysis Report:
Management's Discussion and Analysis Report for the year under review as stipulatedunder regulation 34(2) of the Listing Regulations is presented in a separate sectionforming part of the Annual Report.
Business Responsibility Report:
Business Responsibility Report for the year under review as stipulated underregulation 34(2) of the Listing Regulations is presented in a separate section formingpart of the Annual Report.
Subsidiaries Joint Ventures and Associate Companies:
Subsidiary Companies and their Performance and Developments M/s GIL LifesciencesPrivate Limited
During the year the Honb'le High Court of Judicature at Hyderabad for the state ofTelangana and for the state of Andhra Pradesh by an order dated 1st September 2016 made inCompany Petition no. 231 of 2016 filed by M/s. GIL Lifesciences Private Ltd. a whollyowned subsidiary of the Company sanctioned Scheme of amalgamation of M/s. GIL LifesciencesPrivate Ltd. with the Company with effect from 1st April 2016 being the appointed datefixed in the said scheme. Consequent to the said order M/s. GIL Lifesciences Private Ltd.was amalgamated with the Company on 26th October 2016 being the effective date. By virtueof the aforesaid amalgamation M/s GIL Lifesciences Private Ltd. ceased to be thesubsidiary of your company and stood dissolved pursuant to the scheme of amalgamationsanctioned by the Honb'le High Court.
Granules USA Inc.
Granules USA Inc. a wholly-owned foreign subsidiary of your Company caters to therequirements of customers in the U.S market. The Share Capital of the Company as on March31 2017 is H 116.31 lakhs. During the FY 2016-17 the Company achieved a turnover of H39558.16 lakhs against the turnover of H 29828.82 lakhs for FY 2015-16 and the profitafter tax is H 346.21 lakhs against H 168.67 lakhs for FY 2015-16.
Granules Pharmaceuticals Inc.
Granules Pharmaceuticals. Inc. (GP Inc.) a wholly-owned foreign subsidiary of yourCompany located in Virginia USA focuses in formulation R&D. The Share Capital of theCompany as on March 31 2017 is H 1225.00 lakhs. One ANDA was filed from this facility in
March 2017 and another ANDA was filed in April 2017. These are first set productfilling from this facility towards building a niche portfolio for the US market. It alsoreceived license from the Drug Enforcement Agency of the United States which will enableto store and develop narcotics products.
Granules Pharmaceuticals. Inc. has entered into an agreement during the year underreview with USpharma Limited to acquire 12.5% of its equity. This investment will alsoenable us to participate in the product selection and have the first right of refusal tomarket the select products which are under development by them. USpharma Limited incollaboration with its manufacturing partners have submitted 5 ANDAs with Para IV and ParaIII certifications out of which 4 ANDAs have already been out-licensed to GP Inc.exclusively for the marketing and distribution of the products in the United States afterfinal approval from US FDA pursuant to the agreement entered with it forproduct-in-licensing.
Granules Europe Limited
Granules Europe Limited is a wholly owned foreign subsidiary set up in UK for focusingon marketing to European customers.
The Policy for determining material subsidiaries as approved by the Board may beaccessed on the Company's website at the link: www. granulesindia.com
Joint Venture Companies:
The developments in business operations / performance of Joint Venture Companiesconsolidated with the Company are as below:
Granules-Biocause Pharmaceutical Co. Limited
The Share Capital of the Company as on March 31 2017 is H 3638.06 lakhs. The Companyachieved a turnover of H 21999.83 lakhs during the year under review as against turnoverof H 1700832 lakhs in the previous year. Profit after tax for the year under review is H2458.56 as against H 645.55 lakhs during the previous year of which Granules
India Limited reports 50% share in profit from Joint Ventures. However previous yearfigures are not comparable as previous year figures are for nine months period from Aprilto December 2015 whereas current year figures are from January to December 2016.
Granules OmniChem Private Limited
The Share Capital of the Company as on 31st March 2017 is H 8576.19 lakhs. TheCompany achieved a turnover of H 20031.91 lakhs during the FY 2016-17 as against H1425.66 lakhs during the
FY 2015-16. Profit after tax for the year under review is H 2486.65 as against loss ofH 1020.82 lakhs in the previous year of which Granules India Limited reports 50% share inprofit from Joint Ventures. US FDA had inspected the facility and issued sevenobservations which were responded within the stipulated period. The Company is awaitingclearance from US FDA.
As per the provisions of section 129 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a separate statement containing the salient features of thefinancial statements of the subsidiary Companies and Joint Ventures is prepared in FormAOC-1 and it forms part of the consolidated financial statements.
Consolidated Financial Statements:
The consolidated financial statements in terms of Section 129 of the Companies Act2013 and regulation 34 of the Listing Regulations and prepared in accordance with IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 as amended thereof forms a part of this annual report. The consolidatedfinancial statements have been prepared on the basis of audited financial statements ofyour Company its subsidiaries and associate companies as approved by the respectiveBoard of Directors. As per the provisions of Section 136 of the Companies Act 2013 theCompany has placed separate audited accounts of its Subsidiaries on its websitewww.granulesindia.com and copy of separate audited accounts of its Subsidiaries will beprovided to the members at their request.
Director's Responsibility Statement:
Pursuant to the requirement of Section 134(5) of the Companies Act 2013 and based onthe representations received from the operating management the Directors hereby confirmthat: a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same; b) theDirectors 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 as at March 31 2017 and of the profit of theCompany for the year ended on that date; c) the Directors have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d) the Directors have prepared the annual accounts on agoing concern' basis for the financial year ended March 31 2017; e) the Directorshave laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and are operating effectively; and f) theDirectors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
Corporate Governance Report:
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under the Listing Regulations forms an integral part of thisReport. The requisite certificate from the Auditors of the Company confirming compliancewith the conditions of corporate governance is attached to the report on CorporateGovernance.
Corporate Social Responsibility (CSR):
The Composition of the Committee is provided below.
|Name ||Category |
|Mrs. Uma Devi Chigurupati Chairperson ||Non-Independent Executive |
|Mr. Krishna Prasad Chigurupati ||Non-Independent Executive |
|Mr. A. Arun Rao ||Independent Non-Executive |
The CSR Policy may be accessed on the Company's website at the link:www.granulesindia.com
The Company is undertaking CSR initiatives in compliance with Schedule VII to the Act.During the year under review the Company has spent H 276.16 lakhs on CSRactivities. The annual report on CSR activities is annexed herewith marked as Annexure Ito the Board's Report.
Nomination and Remuneration Committee:
The Company's Nomination and Remuneration committee consists of majority of IndependentDirectors which ensures transparency in determining the remuneration of Directors KMPsand other employees of the Company. The Chairman of the committee is an IndependentDirector thereby resulting in independent and unbiased decisions.
During the financial year 2016-17 the composition of Nomination and RemunerationCommittee is provided below
|Name ||Category |
|Mr. C. Parthasarathy Chairman ||Independent Non-Executive |
|Mr. L. S. Sarma ||Independent Non-Executive |
|Mr. A. Arun Rao ||Independent Non-Executive |
|Mr. K.B. Sankar Rao ||Non-Independent Non-Executive |
|Mr. Krishna Prasad Chigurupati ||Non-Independent Executive |
The Performance Evaluation and Remuneration Policy framed by the Committee and approvedby the Board is directed towards rewarding performance of Executive and Non-ExecutiveDirectors Key Managerial Personnel and Senior Management Personnel of the Company basedon review of achievements periodically.
Risk Management Committee:
Risk Management Committee has been entrusted with the responsibility to assist theBoard in (a) overseeing and approving the Company's enterprise wide risk managementframework; and (b) overseeing that all the risks that the organization faces such asstrategic financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks. YourCompany has proper process for Risk Management.
Internal Audit & Controls:
Your Company continues to engage M/s Dhanunjaya & Haranath Chartered Accountantsas its Internal Auditors. During the year your Company continued to implement theirsuggestions and recommendations to improve the internal controls. Their scope of workincludes review of operational efficiency effectiveness of systems & processescompliances and assessing the internal control strengths in all areas. Internal Auditorsfindings are discussed and suitable corrective actions are taken as per the directions ofAudit Committee on an on-going basis to improve efficiency in operations.
The Company's internal control systems are well established and commensurate with thenature of its business and the size and complexity of its operations. The Audit Committeereviews adequacy and effectiveness of the Company's internal control environment andmonitors the implementation of audit recommendations. The recommendations/suggestions ofthe internal auditors are discussed in the Audit Committee meetings.
Directors and Key Managerial Personnel:
Dr. V.V.N.K.V. Prasada Raju was appointed as an Additional Director and consequently aWhole Time Director in the Board meeting held on January 4 2017 subject to approval ofthe members at the 26th Annual General Meeting. He was also designated as Key ManagerialPersonnel (KMP) in the Company.
Mrs. Uma Devi Chigurupati was appointed as Whole-Time Director by the members in the21st Annual General Meeting held on 2nd July 2012 for a period of five years w.e.f.31stMay 2012. The current term of office of Mrs. Uma Devi Chigurupati as Whole-Time Directorexpires on 30th May 2017. Considering the commitment consistently shown and resultsexhibited the Board of Directors on the recommendation of the Nomination and RemunerationCommittee has decided to re-appoint Mrs. Uma Devi Chigurupati as Whole-Time Director ofthe Company for a further period of 5 (five) years effective from 31st May 2017.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Kolli Basava Sankar Rao Non- ExecutiveDirector of the Company retires by rotation at the 26th Annual General Meeting and beingeligible offers himself for re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both under theCompanies Act and the Listing Regulations.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. Pursuant to theprovisions of the Companies Act 2013 read with the Rules issued there under and theListing Regulations (including any statutory modification(s) or reenactment(s) forthe time being in force) the process for evaluation of the annual performance of theDirectors/ Board/ Committees was carried out in accordance with the policies in force.
The Board of Directors has complete access to the information within the Company.Independent Directors have the freedom to interact with the Company's management.Interactions happen during Board / Committee meetings when CxOs are asked to makepresentations about performance of the Company. Apart from this they also haveindependent interactions with the Statutory Auditors the Internal Auditors and externaladvisors appointed from time to time. Further they meet without the presence of anymanagement personnel and their meetings are conducted informally to enable the IndependentDirectors to discuss matters pertaining to the Company's affairs and put forth theircombined views to the Board of Directors of the Company.
Mr. Krishna Prasad Chigurupati Chairman and Managing Director Mrs. Uma DeviChigurupati Executive Director Dr. V.V.N.K.V. Prasada Raju Executive Director Mr. VVSMurthy Chief Financial Officer and Mrs. Chaitanya Tummala Company Secretary are KeyManagerial Personnel of the Company during the year under review. The Board in its meetingheld on 11th May 2017 appointed Mr. K. Ganesh as Chief Financial Officer and KeyManagerial Personnel of the Company w.e.f 12th May 2017 in place of Mr. V V S Murthy.
Employee Stock Option Scheme:
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employee Stock Option Scheme of the Company inaccordance with the applicable SEBI Regulations.
The applicable disclosures as stipulated under the SEBI Guidelines as on March 31 2017(cumulative position) with regard to the Employee's Stock Option Scheme are herein underprovided. The issue of equity shares pursuant to exercise of options does not affect theStatement of Profit and Loss of the Company as the exercise is made at the market priceprevailing as on the date of the grant plus taxes as applicable.
Pursuant to regulation 13 of Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014. certificate from M/s. Kumar & Giri StatutoryAuditors is given as Annexure II to the Board's Report. Voting rights on the shares issuedto employees under the Employee Stock Option Scheme are either exercised by them directlyor through their appointed proxy.
The details of the stock options granted / vested / exercised under the Granules IndiaLimited Employee Stock Option Scheme 2009 approved by the members in 18thAnnual General Meeting are given below:
|Sl. no. ||Description ||Details |
|(a) ||Options granted till date under the scheme ||8200000 options |
|(b) ||Pricing formula ||Closing market price as on the date prior to the grant date on National Stock Exchange (where there was highest trading volume). |
|(c) ||Options vested during the year ||690000 |
|(d) ||Options exercised during the year ||590000 |
|(e) ||Total number of shares arising as a result of exercise of options ||590000 |
|(f) ||Options lapsed during the year ||390000 |
|(g) ||Options lapsed till date under the scheme ||2640000 |
|(h) ||Variation in terms of options ||Nil |
|(i) ||Money realized by exercise of options during the year ||H 14168000/- |
|(j) ||Total number of options in force ||1570000 |
(k) Employee wise details of options granted during the year to :
(i) Senior managerial personnel Nil
(ii) Any other employee who receives a grant in any one year of options amounting to 5%or more of options granted during the year.
Employee wise details of options amounting to 5% or more of options granted during theyear to be exercised at H133/-:
|Name ||Designation ||Details |
|Mr. Jaiashokan Velusamy ||Sr. Director R&D- GPI ||20000 |
|Mr. Desireddy Mallikarjuna Reddy ||Sr. Vice President - GPI ||20000 |
|Mr. Gangasani Harinath Reddy ||Vice President - GPI ||20000 |
|Mr. Kapur Nivaran ||President GUSA ||20000 |
|Mr. Rajesh Kumar Rapolu ||AGM- API R&D ||13300 |
|Mr. Rama Seshaiah Kanuparthy ||AGM- AR&D ||13300 |
|Mr. Thrilok Kumar Peela ||AGM- Process Engineering ||13300 |
|Mr. Goverdhan Gilla ||DGM-API R&D ||13300 |
|Ms. Chaitanya Tummala ||Company Secretary ||13300 |
|Mr. Sumanta Bajpayee ||AGM-Investor Relations ||13300 |
|Mr. Kishan Chand Gutta ||AGM-Procurement ||13300 |
|Mr. Nanduri Venkata Chalam ||G M Quality ||13300 |
|Mr. Manchiganti Muralidhar ||G M SLT ||13300 |
(iii) Identified employees who were granted option during any one year equal to orNot Applicable exceeding 1% of the issued capital (excluding outstanding warrants andconversions) of the company at the time of grant.
|(l) ||Diluted Earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 Earning per share. ||H 6.49 per share |
|(m) ||Where the company has calculated the employee compensation cost using the intrin- sic value of the stock options the difference between the employee compensation cost that shall have been recognized if it had used the fair value of the options. ||Not Applicable |
|(n) ||Weighted-average exercise price whose exercise price either equals or exceeds or is less than the market price of the stock ||H 24.01/- per share |
|(o) ||Description of the method and significant assumptions used during the year to esti- mate the fair values of options. ||The assumptions and model used for estimating fair value are disclosed in Note 29 of Standalone financial statements. |
As stock options for further grant under ESOS 2009 are not available Employee StockOption Scheme 2017 was formulated and approved by your Board in the meeting held on 11thMay 2017 subject to approval of the members in the 26th Annual General meeting of theCompany.
Auditors & Their Report:
Pursuant to the provisions of Sections 139 141 & 142 and other applicableprovisions if any of the Companies Act 2013 and rules made thereon M/s. Kumar &Giri Chartered Accountants Hyderabad was re-appointed for three years in the 23rd AnnualGeneral meeting subject to ratification at every Annual General meeting. M/s. Kumar &Giri Chartered Accountants have completed their tenure including the transitional periodallowed by the Act. Thus the Company needs to appoint new Statutory Auditor. The Companyhas received a certificate from M/s. B.S.R. & Associates LLP Firm of CharteredAccountants registered vide Firm Registration No. 116231W/W-100024 to the effect thattheir appointment if made would be in accordance with the conditions as specified underSection 141 of the Companies Act 2013 read with Companies (Audit and Auditors) Rules2014. The Directors recommend for appointment of M/s. B.S.R.
& Associates LLP Firm of Chartered Accountants as Statutory Auditors for a term offive years commencing from the conclusion of 26th Annual General Meeting till theconclusion of the 31st Annual General Meeting of the Company subject to ratification ofsuch appointment at every Annual General Meeting. A resolution proposing appointment ofM/s. B.S.R. & Associates LLP Firm of Chartered Accountants as the Statutory Auditorsof the Company for a term of five years pursuant to section 139 of the Companies Act 2013forms part of the Notice.
Comments of the Auditors in their report and the notes forming part of the accounts areself-explanatory and need no comments. However the Auditors have not made any adversequalifications or comments in their report on the accounts of the Company for the yearunder review which requires explanation by the Board of Directors.
The Board has appointed M/s. Saurabh Poddar & Associates Company Secretaries toconduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report forthe financial year ended March 31 2017 is annexed herewith marked as Annexure III to theBoard's Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark which requires explanation by the Board of Directors.
Contracts and Arrangements with Related Parties:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year except with the wholly owned subsidiary the Company had notentered into any contract / arrangement / transaction with related parties which could beconsidered material in accordance with the policy of the Company on materiality of relatedparty transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: www.granulesindia.com.
The particulars of contracts or arrangements with related parties referred to insection 188(1) are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) ofsection 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 and the sameis enclosed as Annexure IV to the Board's Report.
The Audit Committee comprises majority Independent Directors namely Mr. C.Parthasarathy (Chairman) Mr. L.S. Sarma Mr. A.P. Kurian Mr. A. Arun Rao and Mr. KrishnaPrasad Chigurupati as other members. All the recommendations made by the Audit Committeewere accepted by the Board.
The Company has a Vigil mechanism and Whistle blower policy in terms of the ListingRegulations under which the employees are free to report violations of applicable lawsand regulations and the Code of Conduct. Protected disclosures can be made by a whistleblower through a dedicated e-mail or a letter to the Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website at the link:www.granulesindia.com
Meetings of the Board
Six (6) meetings of the Board of Directors were held during the year under review. Thedetails of the Board Meetings with regard to their dates and attendance of each of theDirectors thereat have been provided in the Corporate Governance Report.
Code of Conduct
A declaration regarding compliance with the code of conduct signed by the Company'sChairman and Managing Director is published in the Corporate Governance Report which formspart of the annual report.
Particulars of Loans given Investments made Guarantees given and Securities provided
Particulars of loans given investments made guarantees given and securities providedare provided in the standalone financial statement (Please refer to Note No.4A 4B and 28Cto the standalone financial statement).
Conservation of energy technology absorption and foreign exchange earnings and outgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure V to the Board's Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure VI tothe Board's Report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended thereof a statement showing the names and other particulars of the employeesdrawing remuneration in excess of the limits set out in the said rules forms part of thisReport.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 also forms part of this Report.
However having regard to the provisions of the first proviso to Section 136(1) of theAct the Annual Report excluding the aforesaid information is being sent to the members ofthe Company. The said information is available for inspection at the registered office ofthe Company during working hours for a period of 21 days before the date of ensuing AnnualGeneral Meeting and any member interested in obtaining such information may write to theCompany Secretary and the same will be furnished on request. This information is availableon the Company's website link: www.granulesindia.com
Your Directors further state that the remuneration paid to the Key managerialPersonnel and others is as per the Remuneration Policy of the Company.
Remuneration from Subsidiaries
During the year under review Mr. Krishna Prasad Chigurupati Chairman and ManagingDirector of the Company has received remuneration of $184615.44 from GranulesPharmaceuticals Inc. wholly owned subsidiary of the Company.
Policy on Sexual Harassment
The Company has a Policy on "Prevention of Sexual Harassment of Women atWorkplace" for the matters connected therewith or incidental thereto covering all theaspects as contained under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013".
During the year under review the Company has not received any complaints pertaining toSexual Harassment.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Cost Audit is not applicable for the financial year 2016-17.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Appreciations and Acknowledgements:
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors wish hereby toplace on record their appreciation of the services rendered by the employees withoutwhose whole-hearted efforts the overall satisfactory performance would not have beenpossible.
Your Directors look forward to the long term future with confidence
| ||On behalf of the Board of Directors |
| ||Krishna Prasad Chigurupati |
| ||Chairman and Managing Director |
| ||DIN: 00020180 |
|Hyderabad || |
|July 5 2017 || |