Your Directors have pleasure in presenting their 60 Annual Report together with theAudited Financial Statement for the year ended on 31 March 2019.
1. Financial Performance
( Rs. in Lacs)
|Particulars ||Standalone Basis* ||Consolidated ||Basis* |
|For the Period Ended ||FY 2018-19 ||FY 2017-18 ||FY 2018-19 ||FY 2017-18 |
|Total Revenue ||19974.21 ||16156.51 ||36095.99 ||32430.42 |
|Less Expenses ||18238.46 ||15460.42 ||32929.74 ||30141.89 |
|Profit before Tax ||1735.75 ||696.09 ||3166.25 ||2288.53 |
|Net Tax Expenses ||438.65 ||225.41 ||763.95 ||239.90 |
|Profit / (Loss) for the Financial Year(FY) ||1297.10 ||470.68 ||2402.30 ||2048.63 |
|Other Comprehensive Income/(Loss) for the FY ||(27.67) ||10.11 ||(25.55) ||6.03 |
|Total Comprehensive Income/(Loss) for the FY ||1269.43 ||480.79 ||2376.75 ||2054.66 |
*The Company has adopted Indian Accounting Standards (Ind-AS) from 1 April 2017 asprescribed under Section 133 of the Companies Act 2013 ("the Act") read withthe relevant rules issued thereunder and accordingly these financial statements for allthe periods presented have been prepared in accordance with the recognition andmeasurement principles as stated therein.
2. Performance review
A) Standalone: Standalone Total Revenue was Rs. 19974.21 lacs as against theprevious year's figures of Rs. 16156.51 lacs increased by 23.63%. Profit before tax wasRs. 1735.75 lacs increased by 149.36% over the previous year's figures of Rs. 696.09lacs. Total Comprehensive Income was Rs. 1269.43 lacs increased by 164.03% over theprevious year's figures of Rs. 480.79 lacs.
B) Consolidated: Consolidated Total Revenue was Rs. 36095.99 lacs as against theprevious year's figures of Rs. 32430.42 lacs increased by 11.30%. Profit before tax wasRs. 3166.25 lacs increased by 38.35% over the previous year's figures of Rs. 2288.53lacs. Total Comprehensive Income was Rs. 2376.75 lacs increased by 15.68% over theprevious year's figures of Rs. 2054.66 lacs.
3. Operations of the Company
Your Company's Exports during the financial year was Rs. 17723 lacs as against theprevious year's figures of Rs. 14057 lacs increased by 26.08% and Local sales was Rs.1941 lacs as against the previous year's figures of Rs. 1314 lacs increased by 47.72%.
Operations of the Kopran Research Laboratories Limited Subsidiary Company
Kopran Research Laboratories Ltd. achieved total revenue of Rs. 18420 Lacs in thecurrent year as against total revenue of Rs. 17810 Lacs in the previous year. Exportsduring the Financial year was Rs.11516 Lacs as against the previous year's figures of Rs.10868 lacs increased by 5.96% and Local sales was Rs. 6678 Lacs as against the previousyear's figures of Rs. 6652 lacs which was marginally up.
Kopran Research Laboratories Ltd. during the financial year acquired an ActivePharmaceutical Ingredients Manufacturing facility at Panoli Gujarat which is currentlyunder upgradation in line with the Company's expansion plans in the existing line ofBusiness.
The Active Pharmaceutical Ingredients Manufacturing facility at Mahad of KopranResearch Laboratories Ltd. was inspected by the US FDA starting from 21 January 2019till 25 January 2019. The Inspection was completed without issuance of any observationunder 483. This would facilitate commencement of supplies of APls to the US market onceDMF's are filed and approved. The company has filed the DMF of Atenolol which is alreadyreviewed and active.
In view of expansion plans the Board has not recommended any dividend on Equity sharesor Preference shares for the Financial Year 2018-19.
5. Management Discussion and Analysis
The Report on Management Discussion and Analysis as required under SEBI (LODR)Regulations 2015 as amended is provided as a separate section in Annexure A ofthis Report.
6. Subsidiaries Associates and JointVentures
Kopran Research Laboratories Ltd. Kopran (H.K.) Ltd. and Kopran Lifesciences Ltd. arethe existing wholly owned subsidiaries of the Company. Salient features and financialsummary is provided as a separate section in Annexure B of this Report.
As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the DirectorsReport has been prepared on Standalone Financial Statements and a report on performanceand financial position of each of the subsidiaries and associates included in theConsolidated Financial Statements.
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its Standalone and Consolidated FinancialStatements has been placed on the website of the Company www.kopran.com Shareholdersinterested in obtaining a copy of the Financial Statements of the subsidiary companies maywrite to the Company Secretary at the Company's registered office.
7. Directors & Key Managerial Personnel (KMP)
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Adarsh Somani Non-Executive Director of the Company retires by rotation atthe ensuing AGM and being eligible has offered himself for re-appointment.
The Board at its meeting held on 8 May 2019 based on the recommendations receivedfrom the Nomination & Remuneration Committee subject to the approval of members atAnnual General Meeting appointed Mrs. Mamta Biyani (DIN: 01850136) and Mr. Narayan Atal(DIN: 00237626) as Additional Directors (Independent).
The Board at its meeting held on 8 May 2019 decided to re-appoint Mr. Surendra Somanias Executive Vice Chairman of the Company with effect from 1 January 2020 for anadditional period of three years on terms of Remuneration as recommended by the Nomination& Remuneration Committee.
In compliance of Regulation 17(1A) of the SEBI (LODR) Regulations 2015 as amended("Listing Regulations") Susheel G. Somani Arvind K. Mehta and Vijay K.Bhandari have retired w.e.f. 25 April 2019 as they have attained the age of 75 years andhence ineligible to continue in office. The Board wishes to place on record itsappreciation for the invaluable contribution rendered by Susheel G. Somani Arvind K.Mehta and Vijay K. Bhandari during their tenure as Director of the Company.
The Company has received a notice under section 160 of the Companies Act 2013 asamended thereof from a member of a Company proposing the candidature of Mr. Susheel Somani(DIN: 00601727) for the office of Director of the Company. As Mr. Susheel Somani hascrossed the age of 75 years his appointment can only be made by members approval atAGM/EGM by special resolution to fulfill the conditions of his appointment in complianceof Regulation 17(1A) of the SEBI (LODR) Regulations 2015 as amended.
The Board seeks approval of the shareholders at the 60 Annual General Meeting forconfirmation of the appointment/ re-appointment of Mr. Adarsh Somani Mr. Susheel SomaniMrs. Mamta Biyani Mr. Narayan Atal and Mr. Surendra Somani.
The brief profile of Mr. Adarsh Somani Mr. Susheel Somani Mrs. Mamta Biyani Mr.Narayan Atal and Mr. Surendra Somani has been detailed in the Explanatory Statement to theNotice of Annual General Meeting.
In terms of section 203 of the Companies Act 2013 following are the Key ManagerialPersonnel of the Company :
Mr. Surendra Somani- Executive Vice Chairman
Mr. Basant K. Soni Chief Financial Officer
Mr. Sunil Sodhani Company Secretary and Compliance Officer.
No KMP has been appointed or has retired or resigned during the financial year.
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulation 16(1) (b) of the SEBI (LODR) Regulations 2015 as amended. In the opinion of the Board theyfulfill the conditions of independence as specified in the Act and the Rules made thereunder and are independent of the management.
8. Board and Committee Meetings
The details of the composition of the Board and its Committees and the number ofmeetings held and the attendance of Directors in such meetings are provided in theCorporate Governance Report as a separate section in Annexure D which forms a partof the Annual Report. There have been no instances during the year where therecommendations of the Board Committees were not accepted by the Board.
9. Board and Committee Evaluation
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an Annual Evaluation of its own performance performance of the Directorsand the working of its Committees based on the evaluation criteria defined by Nominationand Remuneration Committee (NRC) for performance evaluation process of the Board itsCommittees and Directors.
The Board's functioning was evaluated on various aspects including inter-alia theStructure of the Board Meetings of the Board Functions of the Board ProfessionalDevelopment Effectiveness of Board Processes information and functioning.
The Committees of the Board were assessed on the degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings. TheDirectors were evaluated on aspects such as attendance contribution at Board/CommitteeMeetings and guidance/support to the Management outside Board/Committee Meetings.
The performance assessment of Non-Independent Directors Board as a whole and theChairman were evaluated in a separate meeting of Independent Directors. The same was alsodiscussed in the meetings of NRC and the Board. Performance evaluation of IndependentDirectors was done by the entire Board excluding the Independent Director beingevaluated.
10. Internal Control Systems and their adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business & risk management including adherence to the Company'sPolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and the completeness of the accounting records and timely preparationof reliable financial disclosure and other regulatory and statutory compliances and therewere no instance of fraud during the year under review.
11. Directors Appointment and Remuneration
The Nomination and Remuneration Committee (NRC) has been mandated to fulfill thecompetency requirements of the Board. The NRC reviews and evaluates the resumes ofpotential candidates for appointment of Directors and recommends their nomination to theBoard. On the recommendation of the NRC the Board has adopted and framed a Nomination andRemuneration Policy for the Directors Key Managerial Personnel and other employeespursuant to the provisions of the Act and the Listing Regulations. The remunerationdetermined for Executive Directors is subject to the recommendation of the Nomination andRemuneration Committee and approval of the Board of Directors. The Executive Directors arenot paid sitting fees; the Non-Executive Directors are entitled to sitting fees forattending the Board/Committee Meetings. It is affirmed that the remuneration paid toDirectors Key Managerial Personnel and all other employees is in accordance with theNomination and Remuneration Policy of the Company. The Company's Policy on Directors'Appointment and Remuneration and other matters provided in Section 178(3) of the Act andRegulation 19 of the Listing Regulations have been disclosed in the Corporate GovernanceReport which forms part of the Annual Report.
12. Corporate Social Responsibility (CSR)
The company had to spend Rs. 8.77 lacs towards it's CSR activities for FY 2018-19 ofwhich Rs. 8.40 lacs was spent on the CSR activities as per the CSR Policy. There is aminor shortfall of Rs. 37000 in the CSR spent as certain CSR activities planned could notbe completed. The CSR Projects of the Company mainly focused contributing towardspromoting education including girl child education and health care and sanitation. Theannual report on CSR activities is provided in Annexure C of this Report.
13. Related PartyTransactions
All Related Party Transactions that were entered into during the financial year were inordinary course of business done on arm's length basis and of repetitive nature andtransactions proposed to be entered during the Financial year are placed before the AuditCommittee duly empowered by the Board for prior omnibus approval at the commencement ofFinancial year. A statement giving details of all Related Party Transactions are placedbefore the Audit Committee on quarterly basis for their approval. There are no materiallysignificant related party transactions made by the Company during the financial year whichmay have potential conflict with the interest of the Company that required shareholder'sapproval under regulation 23 of the Listing Regulations. Enclosing of Form AOC-2 is notrequired as suitable disclosure as required by the Indian Accounting Standard has beenmade in the notes to the Financial Statements. The policy for related party transactionsas approved by the Board can be accessed on the Company's web-linkhttp://www.kopran.com/investors/policy/pdf/Policy%20on%20related%20party%20transaction.pdf
14. Corporate Governance
A detailed report on Corporate Governance as required under the Listing Regulations isprovided in Annexure D and forms part of Annual Report. Certificate from M/s. GMJ& Associates Practicing Company Secretaries (Firm Regn. No. 1432) regardingcompliance stipulated in the Listing Regulations forms part of the Corporate GovernanceReport.
15. Loans Guarantee or Investments
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Notes to the Financial Statements formingpart of the Annual Report.
CRISIL has re-affirmed the rating for long term is CRISIL BBB /stable and short termrating is CRISIL A3+.
a) Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules 2014 M/s. Khandelwal Jain& Co. Chartered Accountants (Firm Registration No. 105049W) were appointed asStatutory Auditors of the Company for a period of five consecutive years from theconclusion of 58 AGM to the conclusion of 63 AGM. Vide notification dated May 7 2018issued by Ministry of Corporate Affairs the requirement of seeking ratification ofappointment of statutory auditors by members at each AGM has been done away with.
Accordingly no such item has been considered in Notice of the 60 AGM. The paymentsmade to Auditors are given in the notes to financial statement.
Further the report of the Statutory Auditors along with notes to Schedules is a partof the Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
b) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act the Board of Directors of theCompany has appointed Ms. Nirali Mehta Practicing Company Secretary (Membership No.A37734 COP No. 20754) to conduct the Secretarial Audit of the Company for the FY 2019-20.M/s GMJ & Associates Practicing Company Secretaries (Firm Regn. No. 1432) has issuedthe Secretarial Audit
Report for FY 2018-19 given in Annexure E. Secretarial Audit Report for thefinancial year ended 31 March 2019 do not contain any qualification reservation oradverse remark.
c) Internal Auditors
The Board of Directors has appointed M/s STDJ & Co Chartered Accountants (FirmRegn. No. 136551W) as Internal Auditors of the Company for the FY 2019-20.
18. Directors' Responsibility Statement
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company the work performed by the Internal Statutoryand Secretarial Auditors including Audit of Internal Financial Controls over financialreporting by the Statutory Auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company's Internal Financial Controls were adequate and effective during the financialyear 2018-19.
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
i. In preparation of the annual accounts for the financial year ended 31 March 2019the applicable accounting standards have been followed along with proper explanationrelating to material departures;
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give true and fair viewof the state of affairs of the Company at the end of the financial year as on 31 March2019 and of the profit of the Company for that period;
iii. They have taken proper and sufficient care for maintenance of adequate accountingrecords in accordance of the Company and for preventing and detecting fraud and otherirregularities;
iv. They have prepared the Annual Accounts on a going concern basis;
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
19. Extracts of Annual Return
The extract of Annual Return required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 isplaced on the Company's website. The web-link as required under Companies Act 2013 ishttp://www.kopran.com/investors/communication/pdf/Form%20MGT-9%20Extract%20of%20Annual%20Return%2031st%20March%202019.pdf
20. Conservation of EnergyTechnology Absorption & Foreign Exchange Earnings andOutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is attached as
21. Particulars of employees and related disclosures
Disclosures pertaining to remuneration and other details required under Section 197(12)of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2016 is annexed herewith as Annexure G. AnyShareholder interested in obtaining the information required under Rule 5(2) and (3) ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 may writeto the Company Secretary at the Registered Office of the Company.
22. Vigil Mechanism
Pursuant to the provisions of Section 177(9) and (10) of the Companies Act 2013 andRegulation 22 of SEBI (LODR) Regulations 2015 the Company has adopted a Vigil Mechanismor Whistle Blower Policy' for directors employees and all stakeholders to reportany concerns about unethical behavior actual or suspected fraud or violation ourCompany's Code of Conduct. The same is also disclosed on the Company's web-linkhttp://www.kopran.com/investors/policy/pdf/Whistle%20Blower%20Policy.pdf . It is affirmedthat no personnel or stakeholder of the Company have been denied access to AuditCommittee.
23. Disclosure under the Sexual Harassment ofWomen atWorkplace (Prevention Prohibitionand Redressal) Act2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. A Complaint Redressal Committee has been set up by your Company to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the FinancialYear 2018-19 noComplaints were received.
24. Other Disclosures/Reporting:
Your Directors further state that during the year under review: a) There are nopecuniary relationship or transactions of the Non-Executive Directors vis-a-vis theCompany. b) No amount is transferred to General Reserve; st
c) The paid up Equity Share Capital as on 31 March 2019 was Rs. 43.25 crores. Duringthe year under review the Company has not issued any shares. The Company has not issuedshares with differential voting rights. It has neither issued employee stock options norsweat equity shares and does not have any scheme to fund its employees to purchase theshares of the Company;
d) The Company has not accepted any deposits from the public and as such there are nooutstanding deposits in terms of the Companies (Acceptance of Deposits) Rules 2014;
e) There were no significant/material orders passed by the Regulators or Courts orTribunals impacting going concern status of your Company and its operations in future;
f) There was no change in nature of Business. There have been no material changes andcommitments affecting the financial position of the Company which have occurred betweenthe end of the financial year of the Company to which this Financial Statement relate andthe date of this Report.
g) In commitment to keep in line with the Green Initiative and going beyond it tocreate new green initiatives electronic copy of the
Notice of 60 Annual General Meeting of the Company are sent to all Members whose emailaddresses are registered with the Company/Depository Participant(s). For members who havenot registered their e-mail addresses physical copies are sent through the permittedmode.
The Directors wish to place on record their appreciation for the continued support andco-operation by Vendors Customers Investors and Employees of the Company.
On behalf of the Board of Directors
Executive Vice Chairman
8 May 2019