Panacea Biotec Ltd.
|BSE: 531349||Sector: Health care|
|NSE: PANACEABIO||ISIN Code: INE922B01023|
|BSE 00:00 | 18 Apr||201.70||
|NSE 00:00 | 18 Apr||201.95||
|Mkt Cap.(Rs cr)||1,236|
|Mkt Cap.(Rs cr)||1236.42|
Panacea Biotec Ltd. (PANACEABIO) - Director Report
Company director report
1. Company's Philosophy on Corporate Governance
Corporate Governance is the key attribute in ensuring commitment to values ethicalbusiness conduct investor's protection excellent work environment leading to higheststandards of management and maximization of everlasting long-term values. It is about howan organization is managed. Panacea Biotec beholds Corporate Governance measures as anintegral part of business which adds to considerable internal and external values andcontributes to business growth.
Panacea Biotec believes in the philosophy of practicing code of Corporate Governancethat provides a framework by which the rights and responsibilities of differentconstituents such as the Board employees and shareholders are carved out.
The Company believes that timely and accurate disclosure of information transparencyin accounting policies and a strong and independent Board are critical for maintaininggood corporate governance preserving shareholders' trust and maximizing long-termcorporate value. For establishing good corporate governance the Company has put systemsprocedures policies practices standards in place to ensure effective strategicplanning optimum risk management integrity of internal controls and reporting. TheCompany's philosophy on Corporate Governance is thus concerned with the ethics valuesand morals of the Company and its directors who are expected to act in the best interestsof the Company and remain accountable to members and other beneficiaries for their actionsand properly comply with all the applicable legal and regulatory requirements.
2. Board of Directors
a) Composition Category & Size of Board
The Company's policy is to have an appropriate blend of executive directors andnon-executive independent directors representing a judicious mix of professionalismknowledge and experience in line with the management's commitment for the principle ofintegrity and transparency in business operations for good corporate governance.
As on March 31 2018 the Board of Directors of the Company comprised of 12 membersincluding 6 executive directors and 6 non-executive independent directors (including twowomen directors). The composition of the Board is in conformity with Regulation 17(1) ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 ("SEBILODR Regulations") enjoining specified combination of executive and non-executivedirectors with not less than 50 percent of the Board comprising of non-executivedirectors and at least one- half comprising of independent directors.
b) Board functioning & procedure
With a view to institutionalize all corporate affairs and setting up systems andprocedures for advance planning for matters requiring discussions and decisions by theBoard the Company has defined procedures for meetings of the Board of Directors andCommittees thereof.
The Board is committed to ensure good governance through a self-governing style offunctioning. The directors enjoy complete liberty to express their opinion and decisionsare mostly taken on the basis of consensus/majority arrived at after detailed discussions.They are also free to bring up any matter for discussion at the Board Meetings.
ii) Scheduling and Selection of Agenda items
The Board meets at least four times in a year with a maximum time gap of 120 daysbetween any two meetings to discuss and review the quarterly results and other items ofagenda including the minimum information required to be placed before the Board as perPart A of Schedule II of SEBI LODR Regulations. The Board also meets and conductsadditional meetings as and when required and thought fit. The dates for the Board Meetingsare decided in advance and timely communicated to the Directors.
The Chairman/Managing Director/Joint Managing Director of the Board and the CompanySecretary discuss the items to be included in the agenda. The agenda of the meeting alongwith relevant supporting documents and explanatory notes is generally circulated inadvance (at least one week before the meeting) to all the directors entitled to receivethe same to facilitate meaningful and quality discussions during the meeting. Where it isnot practicable to attach any document to the agenda it is tabled before the meeting withspecific reference to this effect in the agenda.
iii) Minimum Information placed before the Board Members
In addition to the regular business items the Company provides the followinginformation to the Board and/ or Board Committees as and when required either as part ofthe agenda papers or by way of presentations and discussion material during the meetings:
Annual operating plans & budgets and any updates;
Capital budgets and any updates;
Quarterly results of the Company and its operating divisions or businesssegments;
Minutes of meetings of Audit Committee and other committees of the Board;
Information on recruitment and remuneration of senior officers just below theBoard level including appointment or removal of the Chief Financial Officer and theCompany Secretary;
Show cause demand prosecution notices and penalty notices which are materiallyimportant;
Fatal or serious accidents dangerous occurrences any material effluent orpollution problems;
Any material default in financial obligations to and by the Company orsubstantial non-payment for goods sold by the Company;
Any issue which involves possible public or product liability claims ofsubstantial nature including any judgment or order which may have passed strictures on theconduct of the Company or taken an adverse view regarding another enterprise that can havenegative implications on the Company;
Details of any joint venture or collaboration agreement if any;
Transactions if any that involve substantial payment towards goodwill brandequity or intellectual property;
Any significant labour problems and their proposed solutions;
Any significant development in human resources/ industrial relations front;
Any sale of investments subsidiaries assets which are material in nature andnot in the normal course of business;
Quarterly details of foreign exchange exposures and the steps taken to limit therisks of adverse exchange rate movement if material; and
Non-compliance of any regulatory statutory or listing requirements andshareholders service such as non-payment of dividend delay in share transfer etc.
iv) Recording Minutes of the Proceedings
The minutes of the proceedings of each Board/ Committee/Shareholders' Meetings arerecorded. Draft minutes of the Board/Committee meetings are circulated amongst all themembers of the Board/ Committee for their feedback/comments. The minutes of all themeetings are entered in respective Minutes Books within prescribed time limits.
v) Post Meeting Follow-Up Mechanism
In adherence to good corporate governance the important and significant decisionstaken at the Board/Committee levels are promptly communicated to the concerneddepartments. Moreover the action taken in respect of such decisions is also reported inthe form of status report and is placed at the next meeting of the Board/Committee.
vi) Statutory Compliance of Laws
The Board periodically reviews the compliance report of the laws applicable to theCompany as well as steps taken by the Company to rectify the instances of noncompliancesif any.
c) Board Meetings and attendance
During the financial year 2017-18 five (5) Board Meetings were held on May 30 2017September 13 2017 November 14 2017 February 13 2018 and March 12 2018.
The attendance of directors at Board Meetings and last Annual General Meeting("AGM") and number of directorships & committee memberships as on March312018 is as under:
Note: WTD = Whole-time Director MD = Managing Director JMD = Joint Managing DirectorNID = Non-Executive & Independent Director.
$ Excludes directorship in foreign companies membership of managing committees ofvarious chambers/bodies/Section 8 companies and Panacea Biotec Limited.
$$ In accordance with Regulation 26(1) of SEBI LODR Regulationsmemberships/chairmanships of only Audit Committee and Stakeholders' Relationship Committeein all public limited companies (excluding Panacea Biotec Limited) have been taken intoaccount.
* Ceased to be MD w.e.f. 22.02.2018 due to his sad demise on 21.02.2018.
** Acted as JMD during 01.04.2017 to 11.03.2018 and elevated as MD w.e.f. 12.03.2018.
*** Appointed as WTD w.e.f. 12.03.2018
None of the directors on the Board is a member in more than 10 committees across allthe public limited entities in which he/she is a director and/or acts as Chairman of morethan 5 committees across all the
listed entities in which he/she is a director.
None of the independent directors is serving as an independent director in more than 7listed companies including Panacea Biotec Ltd.
d) Disclosure of relationships between directors inter-se
Mr. Soshil Kumar Jain Chairman of the Company is the father of Dr. Rajesh Jain &Mr. Sandeep Jain Father-inlaw of Mrs. Sunanda Jain (wife of Late Mr. Ravinder Jain &mother of Mr. Sumit Jain) grandfather of Mr. Sumit Jain (son of Late Mr. Ravinder Jain& Mrs. Sunanda Jain) and Mr. Ankesh Jain (son of Dr. Rajesh Jain).
None of the other directors are related to each other.
e) Number of Shares held by Non-Executive Directors: Nil
f) Familiarization programme for the Independent Directors The Board members areprovided with necessary documents/brochures reports and internal policies to enable themto familiarise with the Company's procedures and practices.
In terms of the provisions of the SEBI LODR Regulations the Company has organizedvarious familiarization programmes like plant visit presentation on various changes inregulatory framework and its impact on the Company etc. for the independent directors. Thefamiliarization programme aims at helping the independent directors to understand thefunctions and operations of the Company its management their roles &responsibilities towards the Company etc.
The details of familiarization programmes for independent directors may be accessed onthe Company's website at the link: https://www.panacea-biotec.com/statutory- policies .
g) Separate Meeting of Independent Directors
During the year one meeting of independent directors was held on September 13 2017without the attendance of non-independent directors and members of management to reviewthe performance of the senior management independent and non-independent directorsincluding Chairman and the Board as a whole. All independent directors were present duringthe above said meeting. They also assess the quality quantity and timeliness of flow ofinformation between the Company's management and the Board.
The lead independent directors with/or without other independent directors alsoprovided the feedback to the Board about the key elements that emerge out of the meeting.
h) Code of Conduct
The Board has laid down a Code of Conduct for all the Board members and seniormanagement personnel of the Company. The said Code has been communicated to the directorsand senior management personnel and is also available on the website of the Company andcan be accessed through the link: https://www.panacea-biotec. com/code-of-conduct.
Declaration from the Managing Director confirming that the Company has receivedaffirmations from the Board members and the senior management personnel regardingcompliance of Code of Conduct during the year under review is attached as Annexure - I.
i) Brief profile of Directors seeking appointment / reappointment
The brief resume experience and other details pertaining
to the Directors seeking appointment/re-appointment in
the ensuing AGM to be provided in terms of Regulation
36(3) of SEBI LODR Regulations is furnished below:
a) Mr. Soshil Kumar Jain Age : 85 Years
Qualification : Qualified Pharmacist Professional Expertise: He has more than 61 years'experience in the pharmaceutical industry. He is the founder promoter & director ofthe company and has been its Chairman since October 1984. He started his career in theIndian pharmaceutical industry by joining his family business in the form of a chemistshop set up by his father. Prior to promoting Panacea Biotec he was associated withRadicura & Co. a partnership firm engaged in the retail and wholesale trading ofpharmaceutical products. He is involved in the strategic planning vision and formulationof strategies for the Company.
Inter-se relationship between directors: He is related to Dr. Rajesh Jain Mr. SandeepJain Mrs. Sunanda Jain Mr. Sumit Jain and Mr. Ankesh Jain.
Directorships: He is a director of PanEra Biotec Private Limited Neophar AliproLimited and Adveta Power Private Limited.
Committee Membership/Chairmanship: He is the Chairman of Executive Committee of theCompany. Further he does not hold Committee Membership/ Chairmanship in any othercompany.
Shareholding in the Company: He holds 5000000 Equity Shares of Re.1 each comprising8.16% of total Equity Share Capital of the Company. He also holds 6570000 0.5%Cumulative Non-Convertible & Non-Participating Redeemable Preference Shares of Rs.10/-each comprising 40.31% of total Preference Share Capital of the Company.
b) Dr. Rajesh Jain Age: 54 Years
Qualification: Ph.D. holder a Post Graduate in Business Management an AdvanceResearch Diploma holder in Market Research and a science graduate from University ofDelhi.
Professional Expertise: He has around 34 years' experience in the pharmaceuticalindustry and is involved in the overall supervision of day-to-day affairs of the Companywith emphasis on strategic planning marketing innovation and business development. Underhis motivated leadership participation strategic thinking & planning Panacea Biotechas set new milestones with clear focus on driving productivity and performance across allbusiness segments of the Company and over the years it has created state-of-the-artinfrastructure in terms of state-of-the-art manufacturing facilities R&D centres andsales & distribution network in addition to several collaborations & tie ups. Hiszeal enthusiasm and vision has enabled the Company to achieve new standards ofperformance in terms of financial parameters i.e. increased revenues & shareholders'wealth etc.
He is Vice President of Indian Pharmaceutical Alliance (IPA) for 2017-19. He wasCo-Chair-Confederation of Indian Industry (CII) National Committee on Biotechnology for2017-18 and past Chairman for 2011-12 & 2012-13. He was Hon'ble Member of IndianPharmacopeia (IP) Expert Working on Vaccines and Immunosera for Human Use in the year2017. He was Member of Research Council of CSIR - Central Drug Research Institute(CSIR-CDRI) Lucknow for the year 2017-18. He was also a Board Member for Innovation andIncubation Foundation - Delhi Pharmaceuticals Sciences and Research University for theyear 2017. He has been awarded India Innovation Award twice in 2016 and 2015 (Top 50) byClarivate Analytics (Formerly Thomson Reuters).
He has been amongst the Top 40 Global most influential persons as per the list puttogether by an internationally reputed organization World Pharmaceutical Frontierspublished in SPG Media London. He released following two position papers:
CII recommendations for Guideline Changes in Vaccine Approval Procedures.
The Make in India Imperative - Position Paper on Regulatory and Policy Changesrequired for Sustained competitiveness of the Indian Vaccine Industry.
Inter-se relationship between directors: He is related to Mr. Soshil Kumar Jain Mr.Sandeep Jain Mrs. Sunanda Jain Mr. Sumit Jain and Mr. Ankesh Jain. Directorships: He isthe Managing Director of PanEra Biotec Private Limited and director of Adveta PowerPrivate Limited.
Committee Membership/Chairmanship: He is a Member of Executive Committee of theCompany. Further he does not hold Committee Membership/ Chairmanship in any othercompany.
Shareholding in the Company: He holds 6213500 Equity Shares of Re.1 each comprising10.14% of total Equity Share Capital of the Company. He also holds 6570000 0.5%Cumulative Non-Convertible & Non-Participating Redeemable Preference Shares of Rs.10/-each comprising 40.31% of total Preference Share Capital of the Company.
c) Mr. Sandeep Jain Age: 52 Years
Qualification: Senior Secondary Professional Expertise: He has experience of around 33years in the pharmaceutical industry. He is involved in the overall supervision ofday-to-day operations of the Company with emphasis on finance international marketingregulatory affairs and taxation. Under his exceptional understanding of the businessprinciples the Company is continuously expanding its global aspirations by improving itsinternational marketing efforts into various markets across the globe and is currentlyexporting its branded formulations in CIS countries Asia Eastern Europe and Africanregion. His duty includes increasing the Company's International brand image and isactively exploring opportunities
for launching as well as licensing out some of its patented products formanufacture/marketing in developed countries in Europe North America and Latin America.
Inter-se relationship between directors: He is related to Mr. Soshil Kumar Jain Dr.Rajesh Jain Mrs. Sunanda Jain Mr. Sumit Jain and Mr. Ankesh Jain.
Directorships: He is a director of PanEra Biotec Private Limited and Neophar AliproLimited.
Committee Membership/Chairmanship: He is a Member of Executive Committee andStakeholders' Relationship Committee of the Company. Further he does not hold CommitteeMembership/Chairmanship in any other company.
Shareholding in the Company: He holds 4792100 Equity Shares of Re.1 each comprising7.82% of total Equity Share Capital of the Company and 3160000 0.5% CumulativeNon-Convertible & Non-Participating Redeemable Preference Shares of Rs.10/- eachcomprising 19.38% of total Preference Share Capital of the Company.
d) Mrs. Sunanda Jain Age: 56 Years
Qualification: Graduate in Arts Professional Expertise: She has knowledge andexperience in the Company's matters including activities relating to Company'ssubsidiaries in real estate business and is currently responsible for supervision ofvarious activities relating to the Company's subsidiaries engaged into real estateactivities viz. Radhika Heights Limited and its subsidiaries. She is the wife of Late Mr.Ravinder Jain who ceased to be the Managing Director of the Company due to his sad demiseon 21.02.2018 and has always been the strength behind him. She is also a promoter/directorof Lakshmi & Manager Holdings Limited since August 2011 and is involved in thestrategic planning vision and formulation of strategies for that company.
Inter-se relationship between directors: She is related to Mr. Soshil Kumar Jain Dr.Rajesh Jain Mr. Sandeep Jain Mr. Sumit Jain and Mr. Ankesh Jain.
Directorships: She is a director of Lakshmi & Manager Holdings Limited.
Committee Membership/Chairmanship: She does not hold Committee Membership/Chairmanshipin any Company.
Shareholding in the Company: She holds 6647300 Equity Shares of Re.1 each comprising10.85% of total Equity Share Capital of the Company.
e) Mr. Sumit Jain Age: 37 Years
Qualification: Post Graduate Diploma in Business Management
Professional Expertise: He has experience of around 18 years in the pharmaceuticalindustry. He joined Panacea Biotec Limited in May 2003 as Manager
(Vaccines) and was appointed as Whole-time Director in July 2005. He is currentlyacting as Whole-time Director designated as Director (Operations & Projects) and isresponsible for the administrative matters of Panacea Biotec's Lalru and Baddi facilities.He also oversees the Supply Chain Management of the Company. Prior to joining PanaceaBiotec he was associated with the Company's Subsidiary Radicura Infra Limited as anExecutive Director.
Inter-se relationship between directors: He is related to Mr. Soshil Kumar Jain Dr.Rajesh Jain Mr. Sandeep Jain Mrs. Sunanda Jain and Mr. Ankesh Jain. Directorships: He isthe Managing Director of Radhika Heights Limited and a director of Radicura Infra LimitedSunanda Infra Limited Cabana Structures Limited Nirmala Buildwell Private LimitedPanEra Biotec Private Limited Panacea Life Sciences Limited Lakshmi & ManagerHoldings Limited Nirmala Organic Farms & Resorts Private Limited Best GeneralInsurance Company Limited OKI Estates Private Limited Trinidhi Finance Private LimitedCabana Construction Private Limited and White Pigeon Estate Private Limited.
Committee Membership/Chairmanship: He is a Member of Executive Committee of theCompany. Further he does not hold Committee Membership/ Chairmanship in any othercompany.
Shareholding in the Company: He holds 358500 Equity Shares of Re.1 each comprising0.59% of total Equity Share Capital of the Company.
f) Mr. Ankesh Jain Age: 30 Years
Qualification: B.Sc. in Pharmaceutical Management from University of Bradford U.K.
Professional Expertise: He has experience of around 8 years' in the pharmaceuticalindustry. He was appointed as Whole-time Director designated as Director Sales &Marketing of the Company w.e.f. April 01 2016 and is involved in the overseas marketingR&D and business development of the products of the Company. He was initiallyappointed as Executive Business Development of the Company w.e.f. July 01 2010. FromJuly 2010 to October 2013 he was actively involved in each aspect of business processfor research & development manufacturing sales & marketing and distribution andalso handled an independent territory as Business Development Executive (BDE) for close to12 months which accustomed him with customer expectations from a pharma company. SinceOctober 2013 he actively supported the leadership team of domestic pharmaceuticalbusiness. Later he was promoted as Head - Domestic Pharmaceutical Business w.e.f.September 01 2014. As part of the career growth & keeping in view future challengeshe has attended several training programs including a training programme at IIM Ahmedabadon "Young Entrepreneurs".
Inter-se relationship between directors: He is related to Mr. Soshil Kumar Jain Dr.Rajesh Jain Mr. Sandeep
Jain Mrs. Sunanda Jain and Mr. Sumit Jain. Directorships: He is a director of AdvetaPower Private Limited.
Committee Membership/Chairmanship: He does not hold Committee Membership/Chairmanshipin any Company.
Shareholding in the Company: He holds 307000 Equity Shares of Re.1 each comprising0.50% of total Equity Share Capital of the Company.
g) Mr. Raghava Lakshmi Narasimhan Age: 77 Years
Qualification: Post Graduate degree in Science from Madras University
Professional Expertise: He retired as the Deputy Director General Central StatisticalOrganization to the Government's Ministry of Statistics & Programme Implementation inNew Delhi and has held various senior and middle level positions in various Governmentministries. Prior to his positions with the Government he has also worked with HoechstPharmaceuticals Ltd. Chennai a multinational pharmaceutical company. His expertise liesin the field of budgeting data management programme evaluation & research andmarketing.
Inter-se relationship between directors: He is not related to any other Director of theCompany. Directorships: He is a director of Radhika Heights Ltd. Blue Surmount EducationLakshmi & Manager Holdings Limited and Trinidhi Finance Private Limited. CommitteeMembership/Chairmanship: He is the Chairman of Audit Committee and Nomination &Remuneration Committee and Member of Stakeholders' Relationship Committee of the Company.Further he is Chairman of Audit Committee and Nomination & Remuneration Committee ofTrinidhi Finance Private Limited. He is member of Audit Committee and Nomination &Remuneration Committee of Lakshmi & Manager Holdings Limited. Shareholding in theCompany: Nil.
h) Mr. Namdeo Narayan Khamitkar Age: 77 Years
Qualification: B.E. - Electrical & Mechanical (Pune University) MBA (University ofDistrict of Columbia Washington DC USA) and Post Graduate Diploma in PublicAdministration (Indian Institute of Public Administration).
Professional Expertise: He is a retired Govt. Official belonging to Indian EngineeringService and retired as Dy. Director General Ministry of Home Affairs Govt. of India NewDelhi. He has also held various senior and middle level positions in various Govt.Ministries and Offices before his retirement. His expertise lies in the field ofadministration planning and procurement. Inter-se relationship between directors: He isnot related to any other Director of the Company. Directorships: He is a director ofRadhika Heights Limited Blue Surmount Education Lakshmi &
Manager Holdings Limited and Trinidhi Finance Private Limited.
Committee Membership/Chairmanship: He is a member of the Audit Committee and Nomination& Remuneration Committee of the Company. Further he is member of Audit Committee andNomination & Remuneration Committee of Trinidhi Finance Private Limited. He isChairman of Audit Committee and Nomination & Remuneration Committee of Lakshmi &Manager Holdings Limited.
Shareholding in the Company: Nil
i) Mr. Krishna Murari Lal Age: 78 Years
Qualification: M.Sc. (Chemistry)
Professional Expertise: He is a retired Government official belonging to IndianAdministrative Services and retired as Chairman Staff Selection Commission Government ofIndia. He has vast experience in the field of finance accounts audit taxation legalproject and general management. He had held various senior level positions in GovernmentMinistries and offices. Inter-se relationship between directors: He is not related to anyother Director of the Company. Directorships: He is director of Polylink Polymers (India)Limited Gem Sugars Limited Hindustan Wires Limited & Lexicon Public Relations andCorporate Consultants Private Limited.
Committee Membership/Chairmanship: He is
a member of Audit Committee Nomination & Remuneration Committee and Chairman ofStakeholders'Relationship Committee of the Company. Further he is Chairman of AuditCommittee and Nomination & Remuneration Committee of Hindustan Wires Limited. He isChairman of Audit Committee and member of Nomination & Remuneration Committee &Stakeholders' Relationship Committee of Polylink Polymers (India) Limited.
Shareholding in the Company: Nil
3. Audit Committee
The composition of the Audit Committee of the Board of Directors of the Company meetsthe requirements of Section 177 of the Companies Act 2013 ("Act") andRegulation 18 of SEBI LODR Regulations. The composition of the Committee during the yearunder review was as under:
The Committee comprises of independent directors who are financially literate personshaving vast experience in the area of finance accounts strategy & management.
The management is responsible for the Company's internal controls and the financialreporting process while the statutory auditors are responsible for performing independentaudits of the Company's financial statements
in accordance with generally accepted auditing practices and for issuing reports basedon such audits. The Board of Directors has entrusted the Audit Committee to supervisethese processes and thus ensure accurate and timely disclosures that maintain thetransparency integrity and quality of financial control and reporting.
b) Terms of Reference of Committee
The terms of reference and scope of the Audit Committee includes the following:
To oversight the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible;
To recommend to the Board the appointment remuneration and terms ofappointment of auditors;
Approval of payment to statutory auditors for any other services rendered by thestatutory auditors;
Reviewing with the management the annual financial statements and auditors'report thereon before submission to the Board for approval with particular reference to:
- Matters required to be included in the Directors' Responsibility Statement to beincluded in the Board's Report in terms of Section 134(3)(c) of the Act;
- Any changes in accounting policies and practices and reasons for the same;
- Major accounting entries involving estimates based on the exercise of judgment bymanagement;
- Significant adjustments made in the financial statements arising out of auditfindings;
- Compliance with listing and other legal requirements relating to financialstatements;
- Disclosures of any related party transactions; and
- Qualifications/Modified opinion(s) in the draft audit reports.
Reviewing with the management the quarterly financial statements beforesubmission to the Board for approval;
Reviewing with the management the statement of uses/application of fundsraised through an issue (public issue rights issue preferential issue etc.) if anythe statement of funds utilized for purposes other than those stated in the offerdocument/ prospectus /notice and the report submitted by the monitoring agency monitoringthe utilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter;
Reviewing and monitoring the auditors'independence and performance andeffectiveness of audit process;
Approval of or any subsequent modification of transactions of the Company withrelated parties;
Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the Company wherever it is necessary;
Evaluation of internal financial controls and risk management systems;
Reviewing with the management performance of statutory and internal auditorsand the adequacy of internal control systems;
Reviewing the adequacy of internal audit function if any including thestructure of internal audit department reporting structure coverage and frequency ofinternal audit;
Discussions with internal auditors of any significant findings and follow upthereon;
Reviewing the findings of any internal investigations by the internal auditorsinto matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board;
Discussions with statutory auditors before the audit commences about the natureand scope of audit as well as have post-audit discussion to ascertain any area of concern;
To look into the reasons for substantial defaults in the payment to thedepositors debenture holders shareholders (in case of non-payment of declared dividends)and creditors;
To review the functioning of the Whistle blower Mechanism;
Approval of appointment of chief financial officer after assessing thequalifications experience and background etc. of the candidate;
To carry out any other function as is mentioned in the terms of reference of theAudit Committee; and
Any other duties/terms of reference which are incidental/necessary for thefulfillment of the above mentioned terms of reference.
c) Review of information by Audit Committee:
Apart from other matters as per Regulation 18(3) of SEBI LODR Regulations the AuditCommittee reviews to the extent applicable the following information:
Management discussion and analysis of financial condition and results ofoperations;
Statement of significant related party transactions (as defined by the AuditCommittee) submitted by the Management;
Management letters/letters of internal control weaknesses if any issued bystatutory auditors;
Internal Audit Reports relating to internal control weaknesses;
Appointment removal and terms of remuneration of the internal auditors; and
Statement of Deviations if applicable:
a) Quarterly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1) of SEBI LODRRegulations.
b) Annual statements of funds utilized for purposes other than those stated in theoffer documents/ prospectus/notice if applicable in terms of Regulation 32(7) of SEBILODR Regulations.
The Audit Committee is also vested with the following powers:
To investigate into any matter in relation to the items specified in Section 177of the Act or referred to it by the Board and for this purpose the Audit Committee hasfull access to the information contained in the records of the Company and externalprofessional advice if necessary;
To seek information from any employee;
To obtain outside legal or other professional advice; and
To secure attendance of outsiders with relevant expertise if it considersnecessary.
d) Meetings of Audit Committee and attendance of members During the financial year2017-18 five (5) meetings of the Audit Committee were held on May 29 2017 September 122017 November 13 2017 February 12 2018 and March 12 2018. The attendance of membersof the Audit Committee at these meetings was as follows:
The Statutory Auditors Internal Auditors Associate Director Finance Chief FinancialOfficer Sr. G.M. Accounts Taxation & IT and D.G.M. Audit & Compliance &Coordinator of Audit Committee are the permanent invitees to the meetings of AuditCommittee. Apart from them Cost Auditors Joint Managing Director and other officials ofthe Company attended one or more of the Audit Committee Meetings.
The Company Secretary of the Company is acting as the Secretary to the Audit Committee.
The Chairman of the Audit Committee Mr. R. L. Narasimhan was present at the last AGMof the Company held on September 27 2017.
4. Nomination and Remuneration Committee
The composition of Nomination and Remuneration Committee of the Board of Directors ofthe Company meets the requirements of Section 178 of the Act and Regulation 19 of SEBILODR Regulations. The composition of the Committee during the year under review was asunder:
b) Role & Terms of Reference of Committee
The role of the Nomination and Remuneration Committee inter-alia includes thefollowing:
Formulation of the criteria for determining qualifications positive attributesand independence of a director and recommend to the Board a policy relating to theremuneration of the directors key managerial personnel and other employees;
Formulation of criteria for evaluation of performance of independent directorsand the Board of Directors;
Devising a policy on diversity of the Board of Directors;
Identifying persons who are qualified to become directors and who may beappointed in senior management in accordance with the criteria laid down and recommend tothe Board of Directors their appointment and removal; and
Recommending to the Board whether to extend or continue the term of appointmentof the independent director on the basis of report of performance evaluation ofindependent directors.
c) Meetings of Nomination and Remuneration Committee and attendance of members
During the financial year 2017-18 three (3) meetings of the Nomination andRemuneration Committee were held on May 29 2017 September 13 2017 and March 12 2018.The attendance of members of the Nomination and Remuneration Committee at these meetingswas as follows:
The Company Secretary of the Company is acting as the Secretary to the Nomination andRemuneration Committee.
The Chairman of the Committee Mr. R. L. Narasimhan was present at the last AGM of theCompany held on September 27 2017.
d) Performance Evaluation Criteria for Independent Directors Pursuant to the applicableprovisions of the Act and the SEBI LODR Regulations the Board in consultation with itsNomination and Remuneration Committee has formulated a framework containing inter-aliathe criteria for performance evaluation of the entire Board of the Company its Committeesand individual directors including independent directors.
A structured questionnaire has been prepared covering various aspects of thefunctioning of the Board and its Committees such as adequacy of the constitution &composition of the Board and its Committees matters addressed in the Board and Committeemeetings processes followed at the meetings Board's focus regulatory compliances andcorporate governance etc. Similarly for evaluation of individual director's performancethe questionnaire covers various aspects like his/her profile contribution in Board andCommittee meetings execution and performance of specific duties obligations regulatorycompliances and governance etc. Board members had submitted their response on a scale of1 (outstanding) to 5 (poor) for evaluating the entire Board respective Committees ofwhich they are members and of their peer Board members including Chairman of the Board.
The independent directors had met separately without the presence of non-independentdirectors and the members of management and discussed inter-alia the performance ofnon-independent directors and Board as a whole and the performance of the Chairman of theCompany after taking into consideration the views of executive and nonexecutive directors.
The Nomination and Remuneration Committee has also carried out evaluation of eachdirector's performance.
The performance evaluation of the independent directors has been done by the entireBoard excluding the director being evaluated. On the basis of performance evaluation doneby the Board it shall be determined whether to extend or continue their term ofappointment whenever the respective term expires.
e) Remuneration Policy
The Company's remuneration strategy is market-driven and aims at attracting andretaining high caliber talent. The strategy is in consonance with the existing industrypractice and is directed towards rewarding performance based on review of achievementson a periodical basis. The key components of the Company's remuneration policy are:
Compensation will be based on credentials and the major driver of performance;
Compensation will be competitive and benchmarked with a select group ofcompanies from the pharmaceutical sector; and
Compensation will be fully transparent and tax compliant.
The details of this policy are available on the Company's website viz.
5. Remuneration of Directors
Remuneration of the executive directors consists of basic salary perquisites andvariable portion in the form of commission on profits in the case of Chairman ManagingDirector & Joint Managing Directors as approved by the Board of Directors andshareholders of the Company within the limits prescribed in Schedule V to the Act. TheNomination and Remuneration Committee recommends to the Board the compensation package ofthe executive directors.
a) Remuneration to Executive Directors
The details of remuneration paid to Chairman/Managing/Joint Managing/Whole-timeDirectors during the financial year 2017-18 are as under: (Rs. in million)
* Ceased to be Managing Director w.e.f. 22.02.2018 due to his sad demise on 21.02.2018.Accordingly the remuneration paid to him (excluding the amount of gratuity & leaveencashment of Rs.25.62 million) is for the relevant period during the financial year2017-18 (i.e. from 01.04.2017 to 21.02.2018).
** Acted as Joint Managing Director during the period from 01.04.2017 to 11.03.2018 andelevated as Managing Director w.e.f. 12.03. 2018.
*** Appointed as Whole-time Director w.e.f. 12.03.2018. Accordingly the remunerationpaid to her is for the relevant period during the financial year 2017-18 (i.e. from12.03.2018 to 31.03.2018).
1. Notice period for termination of appointment of Chairman/Managing/JointManaging/Whole-time Directors is three months by either party or a shorter period asdecided mutually. No severance fee is payable on termination of contract.
2. The Company does not have any Stock Option Scheme.
3. All elements of remuneration of the Chairman/Managing/Joint Managing/Whole-timeDirectors i.e. salary perquisites and other benefits etc. are given in Note 41 (C) tothe Financial Statements of the Company.
4. The above excludes the provision for gratuity and leave encashment as the same iscalculated on overall company basis.
b) Remuneration to Non-Executive Directors
The non-executive directors are being paid only the sitting fees for attending themeetings of the Board or Committees of the Board of Directors of such sum as may beapproved by the Board of Directors within the overall limits as prescribed under the Actread with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
The details of sitting fees paid to the non-executive directors during financial year2017-18 are as under:
(Rs. in million)
The non-executive director is also reimbursed the expenses incurred by him/her forattending the meeting of the Board and/or Committee thereof.
There are no materially significant related party transactions pecuniary transactionsor relationships between the Company and its directors except those disclosed in theFinancial Statements for the year ended on March 312018.
None of the non-executive directors holds any shares of the Company.
6. Stakeholders' Relationship Committee
The composition of Stakeholders' Relationship Committee of the Board of Directors ofthe Company meets the requirements of Section 178 of the Act and Regulation 20 of SEBILODR Regulations.
During the year under review the Stakeholders' Relationship Committee wasreconstituted due to sad and untimely demise of Mr. Ravinder Jain Member of the committeeon February 21 2018. The composition of the Committee during the year under review was asunder:
# Ceased to be the Member of the Committee w.e.f. 22.02.2018 on account of his saddemise on 21.02.2018.
b) Role & Terms of Reference of the Committee
The Stakeholders' Relationship Committee plays an
important role in acting as a link between the management and ultimate owners of theCompany i.e. the shareholders. The Committee considers and resolves the grievances of thesecurity holders including complaints related to transfer of shares non-receipt of annualreport and nonreceipt of declared dividends.
The Committee looks after the redressal of investors' grievances and performance of theRegistrar and Transfer Agent and recommends measures for overall improvement in thequality of investor services.
The role of the Stakeholders' Relationship Committee inter-alia includes toreview/approve/authorise the following:
Transfer/ Transmission/ Transposition of securities;
Splitting up sub-division and consolidation of shares;
Dematerialization or rematerialization of the issued shares;
Affixation of common seal of the Company;
Any other matter relating to securities of the Company;
Review and redressal of the grievances of all security holders including depositholders if any; and
Any other areas of investors' service.
The Company may delegate all or any of the power to any other employee(s)officer(s) representative(s) consultant(s) professional(s) or agent(s).
The Committee may invite other directors/officers of the Company to attend themeetings of the Committee as 'Invitees' from time to time as and when required.
The Chairman or in his absence any other member of Committee authorised by himattends the general meeting of the shareholders of the Company.
c) Meetings of Stakeholders' Relationship Committee and attendance of members
During the financial year 2017-18 four (4) meetings of Stakeholders' RelationshipCommittee were held on May 30 2017 September 12 2017 November 14 2017 and February13 2018. The attendance of members of the Stakeholders' Relationship Committee at thesemeetings was as follows:
# Ceased to be the Member of the Committee w.e.f. 22.02.2018 on account of his saddemise on 21.02.2018.