Your Directors have great pleasure in presenting the 22nd Annual Report together withaudited statement of accounts for the year ended 31st March 2017.
|FINANCIAL RESULTS || || |
| || ||(Rs. in Millions) |
|Particulars ||Year Ending 31st March 2017 ||Year Ending 31st March 2016 |
|Sales (net of excise) and other income ||6956.17 ||6529.29 |
|Less Expenses || || |
|Cost of Materials Consumed ||3404.74 ||3375.39 |
|Purchase of Stock in Trade ||30.56 ||58.26 |
|Change in Inventories of FG/WIP/Stock in trade ||334.73 ||9.11 |
|Employee Benefit Expense ||716.50 ||648.24 |
|Other Expenses ||1212.54 ||1212.27 |
|Total Expenses ||5699.07 ||5303.27 |
|Profit before Interest Depreciation Tax & Amortisation ||1257.10 ||1226.02 |
|Less: - Interest ||883.44 ||1064.08 |
|- Depreciation ||882.56 ||847.49 |
|- Impairment of Assets ||Nil ||Nil |
|- Extra Ordinary Item ||Nil ||140.53 |
|- Prior period expenses ||53.39 ||5.28 |
|Loss before Tax ||(562.28) ||(831.36) |
|Less: - Provision for Deffered Tax ||(164.76) ||(242.75) |
|Loss after Tax (A) ||(397.51) ||(588.61) |
|Amount B/F from Previous year(B) ||(902.07) ||(313.46) |
|Loss after Tax available for Appropriations (A+B) ||(1299.58) ||(902.07) |
|Balance carried forward to Balance sheet ||(1299.58) ||(902.07) |
OPERATIONS AND BUSINESS PERFORMANCE
During the financial year 2016-17 the Company has achieved a turnover of Rs. 6956.17Millions against the turnover of Rs. 6529.29 millions during financial year 2015-16. TheCompany continued to recover from losses as Net loss during financial year 2016-17decreased to Rs. 397.51 millions against loss of Rs. 588.61 millions in 2015-16. TheCompany's exports remained stable at Rs. 4509.30 Millions during 2016-17 as compared to4457.58 Millions in 2015-16. There has been no change in the nature of business of thecompany during the year under review. Kindly refer to Management Discussion & Analysis& Corporate Governance Report which forms part of this report.
CONSOLIDATED FINANCIAL PERFORMANCE
Your company recorded a consolidated turnover of Rs. 7181.32 Millions during 2016-17against the turnover of Rs. 6674.36 Millions during 2015-16. In consolidated terms theCompany suffered a loss of Rs. 391.61 Millions against loss of Rs. 586.88 Millions in2015-16. The Consolidated financial figures include the respective financial figures ofthe Company's three subsidiaries and One Associate Company. As required under theprovisions of the Companies Act 2013 and SEBI (LODR) Regulations 2015 AuditedConsolidated Financial Statements form part of the Annual Report and the same are annexedto this Report.
Pursuant to Section 149 152 and other applicable provisions of the Companies Act2013 one-third of such of the Directors as are liable to retire by rotation shall retireevery year and if eligible offer themselves for re-appointment at every AGM.Consequently Dr. Gopal Munjal (DIN 00005196) and Dr. Vikrant Rai Mehta (DIN: 00010756)Directors will retire by rotation at the ensuing AGM and being eligible offer themselvesfor re-appointment in accordance with provisions of the Companies Act 2013.
A brief resume of the Directors proposed to be re-appointed the nature of theirexpertise in specific functional areas names of companies in which they have heldDirectorships committee memberships/ chairmanships their shareholding etc. arefurnished in the explanatory statement to the notice of the ensuing AGM. The Directorsrecommend their re-appointment at the ensuing AGM.
During the year Ms. Preetika Chaubey ceased to be a Director due to resignation w.e.f.11th August 2016. However she was again appointed as an Independent Woman Director ofthe Company for a period of Three Years w.e.f. 20th September 2016. Mr. S.P. Sharma wasappointed as an Independent Director for a period of three years w.e.f. 5th July 2017.The Board has proposed appointment of Ms. Preetika Chaubey and Mr. S.P. Sharma forapproval of shareholders in the ensuing AGM. Mr. Pradeep Kumar Independent Directorceased to be a Director w.e.f. 6th April 2017.
The Company has received necessary declaration from all the Independent Directors underSection 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as laid down in Section 149(6) of the Companies Act 2013 and the ListingRegulations.
NO. OF MEETINGS OF THE BOARD
During the year four Board meetings were held on 25th May 2016 11th August 2016 11thNovember 2016 and 14th February 2017. The details regarding the meetings are given inthe Corporate Governance Report.
A Report on Corporate Governance forms part of this Annual Report. The Auditors'certificate certifying compliance with the conditions of Corporate Governance underRegulation 34(3) read with Schedule V of the SEBI (LODR) Regulations 2015 is annexed as Annexure1 to this Report.
CORPORATE DEBT RESTRUCTURING
The Company stands exited from CDR system on account of failure of approvedrestructuring scheme. The Company is however approaching Banks individually for settlementof debts.
In view of inadequacy of profits the Board does not recommend any Dividend for theFinancial Year 2015-16.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('The Rules') all unpaidor unclaimed dividends are transferred to Investor Education and Protection Fund (IEPF)established by the Central Government after the completion of seven years. Furtheraccording to the rules the shares in respect of which dividend has not been paid orclaimed by the shareholders for seven consecutive years or more shall also be transferredto the demat account created by the IEPF Authority. Accordingly the Company hastransferred the unclaimed and unpaid Dividends for the financial year 2008-09 to IEPF.Further the corresponding shares will be transferred as per the requirements of IEPFrules details of which are provided on the Company website www.indswiftlabs.com.
The dividends for following years which remain unclaimed for seven years from the dateit is lying in the unpaid dividend account will be transferred to IEPF in accordance withthe schedule given below. Shareholders who have not encashed their dividend warrantsrelating to the dividends specified below are requested to immediately send their requestfor issue of duplicate warrants. The details of unclaimed dividends up to the financialyear ended 31.03.2011 are also available on the website of the Companywww.indswiftlabs.com. Once unclaimed dividend is transferred to IEPF no claim shall liein respect thereof with the Company.
Dividend declared in the past
|Financial Year ||Type of Dividend ||Dividend Rate % ||Date of declaration ||Due date for transfer to IEPF |
|2009-10 ||Final ||10 ||22/09/2010 ||28/11/2017 |
|2010-11 ||Final ||10 ||26/09/2011 ||02/12/2018 |
EMPLOYEE STOCK OPTION SCHEME
During the year 519260 options were exercised by the employees after vesting.Accordingly the Company has made the allotment of 519260 equity shares on 11th August2016 against the options exercised by the employees.
During the financial year 2016-17 there has been no change in the Employees StockOption Plan (Employee Incentive Scheme 2014) of the Company. Further it is confirmedthat the ESOP Scheme of the Company is in compliance with SEBI (Share Based EmployeeBenefits) Regulations 2014.
The applicable disclosures as stipulated under Regulation 14 of SEBI (Share BasedEmployee Benefits) Regulations 2014 with regard to Employees Stock Option Plan of theCompany are available on the website of the Company at www.indswiftlabs.com and weblinkfor the same is:http://www.indswiftlabs.com/pages/Disclosure_regarding_Employee_Stock_Options.pdf
CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES
The Company's shares are listed on the National Stock Exchange of India Limited (NSE)and Bombay Stock Exchange Limited (BSE) and are actively traded.
During the year under review the Company has allotted 3257166 equity shares onPreferential basis to the Promoters Group in terms of the CDR package of the Company. TheCompany is in process of crediting the said shares to the demat accounts of the respectiveallottees.
The Company has also allotted 519260 equity shares to the employees of the Companypursuant to conversion of options under the 'Employee Incentive Scheme 2014' of theCompany.
As on 31.03.2017 your Company had 3 Subsidiaries. The US subsidiary of the Companyviz. Ind-Swift Laboratories Inc. achieved net sales of $ 7406533 and recorded a netprofit of $ 95395. The Singapore Subsidiary Viz Meteoric Life Sciences PTE Ltd. has nosales and recorded a net loss of $ 7553. The Dubai Subsidiary viz. Ind-Swift Middle EastFZE has not started operations yet.
Pursuant to the first proviso to Section 129(3) of the Companies Act 2013 and Rules 5and 8(1) of the Companies (Accounts) Rules 2014 the salient features of the financialstatements performance and financial position of each subsidiary and a joint venture isgiven in Form AOC - 1 as Annexure 2 to this report. The Company has framed a policyfor determining material subsidiaries which has been uploaded on the Company's website.
The Auditors Report for the Financial Year 2016-17 does not contain any qualificationreservation or adverse remarks . With regard to the emphasis of matter contained in theAuditors Report the Board's view on the same is as under : Clause a) Self explanatory; b)the impact of the assignment of debts has not been booked in the books of accounts of thecompany as the Company has not entered into final agreement with the ARC companies ; c)Self Explanatory; d) Company will be completing the loss assessment soon and lodge thefinancial claim before the year end ; e) Self Explanatory.
Under Section 139 of the Companies Act 2013 and the rules made thereunder it ismandatory to rotate the Statutory Auditors on completion of the maximum term permittedunder the said section. The Audit Committee of the Company has proposed and on May 232017 the Board of Directors of the Company has recommended the Appointment of M/sAvishkar Singhal & Associates Chartered Accountants (Firm Reg. No. 017362N) as theStatutory Auditors of the Company. M/s Avishkar Singhal & Associates will hold Officefor a period of Five Consecutive years from the conclusion of the 22nd Annual generalMeeting till the conclusion of the 27th Annual General Meeting of the Company to be heldin the year 2022 subject to the approval of the shareholders of the Company. The firstyear of Audit will be the Financial Statements for the Financial Year 2017-18 which willinclude the audit of the quarterly financial statements for the year.
Ms. Anju Sharma & Associates were appointed as Internal Auditors of the Companyupto 31st March 2017. Now M/s Jain & Associates Chartered Accountants have beenappointed as Internal Auditors of the Company w.e.f. 01.04.2017. They will conduct theInternal Audit of the Company as required under Section 138 of the Companies Act and theirreports shall be reviewed by the Audit committee and the Board from time to time.
COST-AUDITORS AND THEIR REPORT
M/s. V. Kumar & Associates Cost Accountants have been duly appointed as CostAuditors of the Company for audit of cost accounting records which are covered under theCost Audit Rules for current financial year ending March 31 2018.
As required by Section 148 of the Companies Act 2013 necessary resolution has beenincluded in the Notice convening the Annual General Meeting seeking ratification by theMembers to the remuneration proposed to be paid to the Cost Auditors for the financialyear ending March 31 2018.
The Cost Audit Reports are required to be led within 180 days from the end of thefinancial year. The Cost Audit Reports for the financial year 2015-16 issued by M/s V.Kumar and Associates Cost Auditors was led with Ministry of Corporate Affairs within thestipulated time. The Cost Audit Reports for the financial year ended March 31 2017 willbe led within the prescribed period.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Vishal Arora Practising Company Secretaries were appointed as SecretarialAuditors of the Company for the financial year 2016-17 pursuant to Section 204 of theCompanies Act 2013. The Secretarial Audit Report submitted by them in the prescribed formMR- 3 is attached as Annexure 3 and forms part of this report. There are noqualifications or observations or other remarks of the Secretarial Auditors in the Reportissued by them for the financial year 2016-17 which call for any explanation from theBoard of Directors.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditors Cost Auditors or Secretarial Auditors of the Company have notreported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made there under.
The aggregate amount of fixed deposit outstanding as on 31st March 2017 was Rs. 49.25crores approx. (previous year Rs. 67.03 crores).
The Hon'ble Company Law Board vide its order No.CP27/01/2013 dated 30th September 2013has granted extension of time in repayment of deposits. Now the Company is makingrepayment to the fixed deposit holders in terms of the aforesaid order of Hon'ble CLB.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 (2) (e) of the SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of the Annual Report
The Annual Listing fee for the year under review has been paid to The BSE Limited andThe National Stock Exchange of India Ltd.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The particulars as prescribed under 134(3)(m) of the Companies Act 2013 read with Rule8 of The Companies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption and foreign exchange earnings and outgo are given in Annexure 4.
NOMINATION AND REMUNERATION POLICY
The Company has a Nomination and Remuneration Policy. In compliance with the provisionsof Sections 134(3)(e) and 178 of the Companies Act 2013 and Regulation 19 read with PartD of Schedule II of the SEBI (LODR) Regulations 2015 the Nomination & RemunerationCommittee:
i) has formulated criteria for determining qualifications positive attributes andindependence of a director and recommends to the Board Policy relating to remunerationfor directors KMP and other employees;
ii) has formulated the evaluation criteria for performance evaluation of independentdirectors and the Board;
iii) has devised a policy on Board diversity.
iv) identifies persons who are qualified to become directors or may be appointed inSenior Management in accordance with criteria laid down and recommend to the Board theirappointment and removal;
v) recommends to the Board whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors.
PARTICULARS OF EMPLOYEES
Particulars of remuneration of employees required to be furnished pursuant to theprovisions of Section 197 (12) of the Companies Act 2013 (Act) read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenas Annexure 5 to this Report. Particulars of remuneration of employees required tobe furnished in terms of Rules 5(2) and 5(3) of the said Rules forms part of this Reportwhich shall be provided to Members upon written request pursuant to the second proviso ofRule 5. Particulars of remuneration of employees are available for inspection by Membersat the Registered Office of the Company during business hours on all working days up tothe date of the forthcoming AGM.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 (3) of the Companies Act 2013 extract of theAnnual Return in Form MGT-9 is given in 'Annexure 6' to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Pursuant to the provisions of Section 134(3)(g) of the Companies Act 2013 (Act)particulars of loans/guarantees/ investments/securities given under Section 186 of the Actare given in the related notes to the Financial Statements forming part of the AnnualReport.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year were on an arm'slength basis and in the ordinary course of business. No related party transaction was inconflict with the interest of the Company. Material related party transactions wereentered into by the Company only with its subsidiaries. No materially significant relatedparty transaction was made by the Company with the Key Managerial Personnel. As prescribedby Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts)Rules 2014 particulars of related party transactions are given in Form AOC-2 as "Annexure7" to this Report. The policy on Related Party Transactions as approved by theBoard has been uploaded on the Company's website www.indswiftlabs.com
Even though the provision of Regulation 21 of the SEBI (LODR) Regulations 2015regarding constitution of Risk Management Committee are not applicable on the Company theBoard has constituted a Risk Management Committee. The details of the Committee and itsterms of reference are set out in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors.
The Independent Directors had met separately without the presence of Non-IndependentDirectors and the members of management and discussed inter-alia the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of theCompany after taking into consideration the views of executive and Non-ExecutiveDirectors.
The Nomination and Remuneration Committee has also carried out evaluation of everyDirector's performance. The performance evaluation of all the Independent Directors havebeen done by the entire Board excluding the Director being evaluated. On the basis ofperformance evaluation done by the Board it shall be determined whether to extend orcontinue their term of appointment whenever the respective term expires.
The Directors expressed their satisfaction with the evaluation process.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Mr. K.M.S. Nambiar (Chairman) Dr. J.K. Kakkar Mr.Prabhat Khurana- Independent directors and Mr. S.V. Singh Nominee Director Mr. N.R.Munjal Vice Chairman cum Managing Director of the Company. Mr. Pradeep Kumar IndependentDirector has ceased to be a member of the Committee due to resignation w.e.f. 6th April2017. The functions performed by the Audit Committee and the particulars of meetings heldand attendance thereat are given in the Corporate Governance Report.
VIGIL MECHANISM/WHISTLEBLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act 2013 read withRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and SEBI (LODR)Regulations 2015 your Company has in place a 'Whistleblower Policy' which provides anopportunity to the directors and employees to raise concerns about unethical and improperpractices or any other wrongful conduct in or in relation to the Company.
The details of the Whistleblower Policy are stated in the Corporate Governance Reportand the said Policy has been uploaded on the Company's website www.indswiftlabs.com.
Your Company is of the firm opinion that efficiency of its employees plays a key rolein achieving set goals and building a competitive work environment. The Company regularlyconducts various programs at different levels so as to ensure that a vibrant and motivatedwork-force leads to achievement of the defined goals. Employee relations continued to theharmonious and cordial at all levels and in all the units of the Company.
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has constituted "InternalComplaints Committee" for prevention of sexual harassment of its women employees.During the year the Committee has not received any complaint related to Sexualharassment.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2017 and of the profit of the Company for the year ended on thatdate;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively..
Your Directors thank all the employees for their sincere efforts active involvementand devoted services rendered.
Your Directors thank the shareholders of the Company for the confidence reposed in theManagement of the Company.
Your Directors place on record their gratitude to the Customers Suppliers company'sBankers and Financial Institutions for their support and cooperation during the year underreview.
| ||On behalf of the Board of Directors |
| ||S.R. Mehta |
| ||Chairman |
|Place: Chandigarh || |
|Dated: 21st August 2017 || |