You are here » Home » Companies » Company Overview » Solara Active Pharma Sciences Ltd

Solara Active Pharma Sciences Ltd.

BSE: 541540 Sector: Health care
NSE: SOLARA ISIN Code: INE624Z01016
BSE 00:00 | 16 May 445.45 0.25
(0.06%)
OPEN

446.00

HIGH

451.75

LOW

440.00

NSE 00:00 | 16 May 444.25 0.65
(0.15%)
OPEN

446.70

HIGH

452.00

LOW

440.00

OPEN 446.00
PREVIOUS CLOSE 445.20
VOLUME 7114
52-Week high
52-Week low
P/E
Mkt Cap.(Rs cr) 1,604
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 446.00
CLOSE 445.20
VOLUME 7114
52-Week high
52-Week low
P/E
Mkt Cap.(Rs cr) 1,604
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Solara Active Pharma Sciences Ltd. (SOLARA) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Fourth Annual Report of Solara ActivePharma Sciences Limited (the Company) together with the audited financial statements forthe year ended March 31 2021.

1. FINANCIAL SUMMARY

(C In Crores)

Financial Results

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Gross Revenue 1645.29 1349.26 1645.65 1349.27
Profit before interest depreciation and tax 399.35 276.20 400.42 279.34
Profit before tax 220.96 112.49 221.50 114.91
Profit after tax 220.96 112.49 221.35 114.52
EPS (basic) on the basis of C 10/- per share 68.86 43.47 69.00 44.29
EPS (diluted) on the basis of C 10/- per share 64.40 42.03 64.53 42.82

The above financial results pertains to continuing operations of the Company

A detailed analysis of the operations of the company is provided in the managementdiscussion and analysis report which forms a part of this annual report.

2. BUSINESS OVERVIEW

We are a global R&D focused pureplay API company engaged in the manufacturing anddevelopment of APIs and offering Contract Manufacturing and Development Services forglobal companies. We have a highly compliant manufacturing footprint spread over six largescale multi-product facilities supported by a team of 2500+ employees. Our business isspread across 75 countries with extensive operations in the key markets of North AmericaEurope Japan South Korea and the Middle East and North Africa. We are poised to createstrategic value in the B2B space with a basket of high-value products compliantmanufacturing base long term supply assurance and strong customer advocacy.

FY 2020-21 was a stellar year of performance for the Company as it achievedsignificant milestones with its contrarian strategies and perspectives on the business.

3. COVID-19

The fiscal year 2020-2021 was a challenge in many ways there was an exponential surgein the Covid-19 cases in many countries forcing the Government to impose lockdown. Thesafety of employees was paramount in all the decisions taken by your company to continueor restart operations. The company is also using innovative methods to support itscustomers during this crisis. The spread of this virus has compelled your company torevisit its ways of working including working from home.

Based on the available information and the business projections by management whichappear reasonably conservative the Board is satisfied that no material adjustments arerequired to the Financial statements for 2020-21.

4. DIVIDEND

During the year the directors have approved payment of interim dividend of C 4/- (40%)per equity share of face value C 10/- each for distribution of the profits of the companywhich had resulted in a payout of C 14.36 Crores.

The Board of Directors of the company are pleased to recommend a final dividend of C3/- per equity share of face value of C10/- each for the financial year ended March 312021 subject to the approval of the shareholders of the company at the ensuing annualgeneral meeting scheduled to be held on August 25 2021.

The Register of Members and Share Transfer Books will remain closed from August 212021 to August 25 2021 (both days inclusive) for the purpose of payment of final dividendfor the financial year ended March 31 2021. Dividend if approved by shareholders willbe paid within 30 days from the date of declaration of dividend.

I n terms of Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations) the Company has adopted a DividendDistribution

Policy. The said Policy is available on the Company’s website and can be accessedat investor page of our company’s website www.solara.co.in.

5. SHARE CAPITAL

The Authorised Share Capital of the Company as on March 31 2021 stood at C1200000000/- divided into 120000000 equity shares of C 10/- each.

The Issued Subscribed and Paid-up Equity share capital of the Company as on March 312021 stood at C 359297670/- divided into 35929767 equity shares of C 10/- each.

There has been increase in the Paid-up share capital of the Company during thefinancial year on account of allotment of 8600000 equity shares by conversion ofwarrants and 474500 equity shares consequent to exercise of stock options by theemployees.

6. EMPLOYEES STOCK OPTION PLAN

As at March 31 2021 the company has "Solara Employees Stock Option Plan2018".

During the year under review Nomination and Remuneration Committee of the Board (NRCCommittee) has granted 240000 options convertible into equal number of equity shares offace value of C 10/- each to the senior management personnel of the Company. Statementgiving detailed information on stock options granted to Employees as required under theCompanies Act and SEBI Regulations is enclosed as Annexure 8 to this Report.

7. MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments occurred affecting the financialposition of the Company between the end of the financial year and the date of thisreport.

8. SCHEME OF AMALGAMATION

The Board of Directors of the Company at its meeting held on April 9 2021 haveapproved the Scheme of Amalgamation for merger of Aurore Life Science Private LimitedEmpyrean Life sciences Private Limited and Hydra Active Pharma Sciences Private Limited(Transferor companies) into the Company (Transferee Company) in terms of Section 230 to232 of the Companies Act 2013. The Scheme is subject to necessary statutory andregulatory approvals including the approvals of National Company Law Tribunal theshareholders and creditors of each of the companies.

The appointed date for the said scheme of amalgamation is April 1 2021 or such otherdate as may be agreed between the Transferor Company and the Transferee Company andapproved by the National Company Law Tribunal.

9. SUBSIDIARIES

The details of Subsidiary Companies and their financial position as required under thefirst proviso to Section 129(3) is given in Form AOC-1 as Annexure 1 as part of thisreport.

10. CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standard of Corporate Governance andadhere to Corporate Governance guidelines as laid out in the Listing Regulations.

M/s. Mohan Kumar and Associates Practicing Company Secretaries have examined therequirements of Corporate Governance with reference to Listing Regulations and havecertified the compliance as required under Listing Regulations. The Certificate in thisregard is attached to this report.

As required by Listing Regulations a certificate from a Practicing Company Secretarythat none of the directors on the Board of the Company have been debarred or disqualifiedfrom being appointed or continuing as directors of the companies is attached to thisReport as Annexure 7 Further Annual Secretarial Compliance Report issued by PracticingCompany Secretary pursuant to Circular dated February 8 2019 issued by SEBI is alsoattached to this Report as Annexure 10.

11. MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Schedule V of Listing Regulations "Management Discussion andAnalysis" is given separately and forms part of this Report.

12. NUMBER OF MEETINGS OF THE BOARD

During the financial year 2020-21 the Directors met seven times i.e. on May 7 2020;August 3 2020; October 12 2020 October 30 2020 November 11 2020 February 3 2021and March 31 2021.

13. DIRECTORS & KEY MANAGERIAL PERSONNEL

As on date of this report the Board comprised of 8 directors comprising of 2 ExecutiveDirectors 2 Non-Executive Directors and 4 Independent Directors. Chairman of the Board isa Non-Executive Director. The details of each member of the Board as on the date of thisreport forms part of Corporate Governance Report.

Retire by Rotation:

a) Mr. Deepak Calian Vaidya Non-Executive Director - Chairman retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment.Your directors recommend his reappointment.

b) Mr. Ankur Nand Thadani Non-Executive Director - retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for reappointment. Yourdirectors recommend his reappointment.

Detailed profile of the Directors is attached as Annexure 5 to this report

During the year

1. Mr. Bharath R Sesha appointed as Managing Director & Chief Executive Officer ofthe Company and he has been designated as Key Managerial Personnel.

2. Mr. Subhash Anand appointed as Executive Director & Chief financial Officer ofthe company and has been designated as Key Managerial Personnel.

3. Mr. Rajesh Salwan appointed as Chief Operating Officer of the company and has beendesignated as Key Managerial Personnel.

4. Mr. Jitesh Devendra resigned from the post of Managing Director of the Company.

5. Mr. Hariharan retired from the post of Executive Director Finance and Chieffinancial officer of the Company.

6. Mr. B. Sreenivasa Reddy resigned from the post of Chief Operating Officer of theCompany.

The following are the Key Managerial Personnel (KMPs) of the Company:

• Mr. Bharath R Sesha Managing Director & Chief Executive Officer.

• Mr. Subhash Anand Executive Director & Chief Financial Officer.

• Mr. Rajesh Salwan Chief Operating Officer and

• Mr. S. Murali Krishna Company Secretary & Compliance officer.

14. DECLARATION BY INDEPENDENT DIRECTORS

In accordance with Section 149(7) of the Companies Act 2013 each Independent Directorhas confirmed to the Company that he / she meets the criteria of independence as laid downin Section 149(6) of the Companies Act 2013 and Regulation 25 of the Listing Regulations.

15. BOARD EVALUATION

The Companies Act and Listing Regulations relating to Corporate Governance containprovisions on evaluation of the performance of the Board and its Committees as a whole andDirectors including Independent Directors Non-Independent Directors and Chairpersonindividually. In pursuant thereof annual evaluation of performance of the Board workingof its Committees contribution and impact of individual directors has been carried outthrough a questionnaire for peer evaluation on various parameters.

16. PARTICULARS OF EMPLOYEES

The statement containing particulars in terms of Section 197(12) of the Companies Act2013 read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms part of this report and is appended herewith as Annexure 6 tothe Boards’ report

The statement containing particulars in terms of Section 197(12) of the Companies Act2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report. Considering the first provisoto Section 136(1) of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company and others entitled thereto. Anyshareholder interested in obtaining a copy thereof may write to the Company Secretary inthis regard.

17. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has undertaken "Corporate Social Responsibility (CSR)"initiatives in areas of Health Education and Employability which are projects inaccordance with Schedule VII of the Companies Act 2013.

A detailed report on CSR activities undertaken during the financial year 2020-21 isenclosed as Annexure 2 to this Report.

18. RISK MANAGEMENT

The Company has a risk management framework for the identification and management ofrisks.

In line with the requirement under the SEBI Listing Regulations the Company hasconstituted a Risk Management Committee (RMC) effective April 1 2020 comprising membersof the Board and Senior Management personnel. Composition of RMC is provided in theCorporate Governance Report which forms part of this Report.

RMC is entrusted with the responsibility of overseeing strategic operational andfinancial risks that the organisation faces along with the adequacy of mitigation plansto address such risks.

Additional details relating to Risk Management are provided in the ManagementDiscussion and Analysis report forming part of this Report.

19. LOANS GUARANTEES OR INVESTMENTS

Particulars of investments made loans given and guarantees covered under theprovisions of Section 186 of the Companies Act 2013 are provided in Note No. 46 to theStandalone Financial Statements in the Annual Report.

20. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and atarm’s length basis. The transactions with related parties are disclosed in Note No.40 to the Standalone Financial Statements in the Annual Report. The disclosure ofcontracts or arrangements with related parties for material transactions is furnished inForm AOC-2 as Annexure 9 as part of this report.

The Company has formulated a policy for transacting with Related Parties which isuploaded on the website of the Company. Further there are no materially significantrelated party transactions with its promoters the directors or the management theirsubsidiaries or relatives etc. that may have potential conflict with the interests of theCompany at large.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts thatwould impact the going concern status of the Company and its future operations.

22. AUDITORS AND AUDIT REPORTS

Secretarial Audit Report

M/s. Mohan Kumar & Associates Practicing Company Secretaries Chennai is theSecretarial Auditor for the Company.

The Secretarial Audit for the financial year 202021 inter-alia included audit ofcompliance with the Companies Act 2013 and the Rules made under the Act ListingRegulations and applicable Regulations prescribed by SEBI amongst others. Financials forthe year ended March 31 2020 signed by the Managing Director Executive Director &CFO and Company Secretary on behalf of the company.

The Secretarial Audit Report is enclosed as Annexure 4 to the Board’s Report.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells LLP Chartered Accountants (Firm RegistrationNo.117366W/W-100018) was appointed as Statutory Auditors of the Company at the firstAnnual general meeting of the company for a period of 5 years and will hold the officetill the conclusion of the 6th AGM of the Company to be held in the financial year2022-23. The Auditor’s report to the shareholders on the standalone and consolidatedfinancials for the year ended March 31 2021 does not contain any qualificationobservation or adverse comment.

Internal Auditors

M/s. Price Waterhouse Coopers Chartered Accountants are the Internal Auditors of theCompany. The Internal Auditors carry out audit as per the audit plan defined by the AuditCommittee and regularly updates the committee on their internal audit findings at theCommittee’s meetings.

The Internal Auditors were satisfied with the management response on the observationand recommendations made by them during the course of their audit and have expressedsatisfaction with the internal systems controls and process followed by the Company.

Cost Auditors and Cost Records

Mr. K. Suryanarayanan Cost Accountant (Membership No.24946) has carried out the CostAudit for the applicable business for the year under review.

Pursuant to the provisions of Section 148(3) of the Companies Act 2013 the Board ofDirectors had appointed Mr. K. Suryanarayanan Cost Accountant (Membership No.24946) asCost Auditor of the Company for the financial year 2020-21. Proposal for ratification ofremuneration of the Cost Auditor is placed before the shareholders.

The company is maintaining cost records as specified under sub-section (1) of section148 of the Companies Act 2013.

Reporting of Frauds by Auditor

During the year under review neither the Statutory Auditors nor the Internal Auditorshas reported to the Audit committee under Section 143(12) of the Companies Act 2013 anyinstances or fraud committed against the company by its officers or employees the detailsof which need to be mentioned in the Board’s report.

23. INTERNAL FINANCIAL CONTROLS

The Company has in place well defined and adequate framework for Internal FinancialControls ("IFC") as required under Section 134 (5) (e) of the Companies Act2013.

During the year under review such controls were tested and no material weaknesses intheir design or operations were observed.

24. OTHER DISCLOSURES

Nature of Business of the Company

There has been no change in the nature of business of the Company during the year underreview.

Public Deposits

The Company did not accept any deposits within the meaning of provisions of Chapter V -Acceptance of Deposits by Companies of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014.

Vigil Mechanism / Whistle Blower Policy

The Company in compliance with Section 177 of the Companies Act 2013 and Regulation 22of Listing Regulations has established a Whistle Blower Policy in place as part of itsvigil mechanism. The policy provides appropriate avenues to the directors employees andstakeholders of the Company to make protected disclosures in relation to the mattersconcerning the Company. Protected disclosures are appropriately dealt with by the WhistleOfficer or the Chairman of the Audit Committee. The policy is also available on theCompany’s website at www.solara.co.in

Policy on Directors Appointment and Remuneration

The policy of the Company on Directors’ appointment and remuneration includingthe criteria for determining qualifications positive attributes independence of adirector and other matters as required under Section 178 of the Companies Act 2013 isavailable on the Company’s website at www.solara.co.in

Insurance

The assets/ properties of the Company are adequately insured against loss due to fireriots earthquake terrorism etc. and against other perils that are considered necessaryby the management.

Annual Return

In accordance with the Companies Act 2013 the annual return in the prescribed formatis available at https://solara.co.in/investor-relations/annual-return/

Secretarial standards issued by the Institute of Company Secretaries of India (ICSI)

The Directors state that the applicable Secretarial Standards have been followed duringthe financial year 2020-21.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under section 134 of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is attached as Annexure - 3 to thisReport.

Disclosure under the Sexual harassment of woman at workplace (Prevention Prohibitionand Redressal) Act 2013

The company has put in place an anti-sexual harassment mechanism in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee have been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The Company has not received anycomplaint of sexual harassment during the year 2020-21.

25. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directorsof your Company confirm that:

a) in the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.

b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit or loss of the company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

d) they have prepared the annual accounts on a going concern basis

e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating properly; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

26. BUSINESS RESPONSIBILITY REPORT

The Listing Regulations mandate the inclusion of the Business Responsibility Report(BRR) as part of the Annual Report for top 500 listed entities based on marketcapitalisation. In accordance with the Listing Regulations we have integrated BRRdisclosures in our Annual Report.

27. CAUTIONARY STATEMENT

Statements in the Annual Report particularly those that relate to ManagementDiscussion and Analysis describing the Company’s objectives projections estimatesand expectations may constitute ‘forward-looking statements’ within the meaningof applicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ.

28. ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the Banks during the year under review. Your Directors alsoplace on record their deep sense of appreciation for the continued support of customerssuppliers employees and investors of the company.

For and on behalf of Board of Directors
Bharath R Sesha Subhash Anand
Place: Bengaluru Managing Director Executive Director
Date: May 6 2021 & CEO and CFO

.