DIRECTORS' REPORT TO THE MEMBERS, The Directors present their 24th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended June 30, 2015. REVIEW OF OPERATIONS The Company has on standalone basis registered total revenue from operations of Rs.24,022.80 Lakhs during the year under review as against Rs.16,639.80 Lakhs in the previous financial year. The Profit after tax was Rs.4,093.56 Lakhs during the year under review as against Rs.2,563.54 Lakhs in the previous financial year. The Company has made a consolidated revenue from operations of Rs.25,176.98 Lakhs during the current financial year as against Rs.17,308.89 Lakhs in the previous financial year. A detailed review of the Company's state of affairs & outlook has been discussed in Management Discussion Analysis which forms a part of this Annual Report. DIVIDEND Considering the Company's financial performance, the Directors have recommended a Dividend of Rs.5/- per equity share (50%) on the Capital of 1,51,10,000 equity share of Rs.10/- each for the FY 2014-15. The said dividend, if approved by the members, would involve cash outflow of Rs.909.30 Lakhs (Previous year- Rs.725.24 Lakhs) including Dividend Distribution tax. TRANSFER TO RESERVE The Company transfered an amount of Rs.409.39 Lakhs to the General reserves of the Company. SUBSIDIARIES During the year, no company became or ceased to be a subsidiary of the Company. The Company has one subsidiary LLP (i.e) Argus Salud Pharma LLP. The consolidated financial results/ performance incorporating the financial statements of the above subsidiary LLP is attached to the annual report as required under the Accounting Standards and the Listing Agreement. Further, a statement containing the salient features of the financial statements of our subsidiary pursuant to Section 129(3) of the Companies Act, 2013, in the prescribed Form AOC-1 is appended as Annexure I to the Board's report. During the year under review, the Company has invested a sum of Rs.89.10 Lakhs in Argus Salud Pharma LLP. Consequently the Company's share in LLP has increased to 99.90% in Argus Salud Pharma LLP. DEPOSITS The Company has not accepted any fixed deposits from the public. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Particulars of loans, guarantees and investments as on June 30,2015 are given in the Note No.12 to the standalone financial statements. NUMBER OF MEETINGS OF THE BOARD The Board met five times during the year ended June 30, 2015 which were held on 25.08.2014, 12.11.2014, 04.02.2015, 13.02.2015 and 12.05.2015. DIRECTORS AND KEY MANAGERIAL PERSONNEL Based upon the recommendation of the Nomination and Remuneration Committee, the Board appointed Dr K Nirmala Prasad (DIN:07088120) as an Additional Director(Independent) effective February 04, 2015 and Mr R Viswanathan (DIN:07173713) as an Additional Director (Independent) effective May 12,2015 subject to the approval of the Members. They will hold the office for three years from their effective date of appointment. The Company has received separate notices from the members signifying their candidature for the position of Independent Director. Resolutions are being moved at the ensuing Annual general meeting for their appointment as Independent Directors. In terms of Section 152 of the Companies Act, 2013, Mr M Jayapal (DIN:0186977) and Mr D P Mishra (DIN:02032818) retires by rotation and being eligible offers themselves for re-appointment. In terms of Section 203 of the Companies Act, 2013 , Dr Sridhar Ganesan (DIN: 06819029) was appointed as the Whole-time Director at the previous Annual general Meeting . Subsequently he was appointed as the Managing Director from March 28, 2015 for a period of three years from August 25, 2014. Mr. M Jayapal (DIN:0186977) was appointed as the Whole- time Director of the Company w.e. f. March 28,2015 for a period of one year and Mr D P Mishra (DIN:02032818) was re-appointed as the Whole-time Director w. e. f. May 01,2015 for a period of one year. During the year under review, Mr Venkat Radhakrishnan(DIN:03451231) resigned from the Board with effect from May 12,2015. The Board places on record the appreciation and gratitude for the guidance and contribution during his association with the Company Further to the resignation of Mr S Mohan Raj as the Chief Financial Officer and Company Secretary w. e. f. February 13, 2015, Mr Harihara Ponnambalam P was appointed as Chief Financial Officer w. e. f. May 06, 2015 and Mr Vinod Kumar S was appointed as Company Secretary w. e. f. April 13, 2015. The Compensation of the Board of Directors are in conformity with the applicable provisions of the Companies Act, 2013 and Listing agreement. DECLARATION BY INDEPENDENT DIRECTORS The Independent Directors of the Company have submitted their declaration as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013. EXTRACT OF ANNUAL RETURN As required pursuant to Section 134 (3) (a) of the Companies Act, 2013, an extract of Annual Return in the prescribed Form MGT 9 is given as Annexure II to this Directors' Report. DIRECTORS RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, the Directors Confirms that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30 , 2015 and of the Profit of the Company for that period; c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The Directors had prepared the annual accounts on a going concern basis; e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts, arrangements and transactions with related parties are on arm's length basis and in normal course of business. Pursuant to Section 134 of the Companies Act,2013 and the rules made there under, Particulars of transactions with the related parties, in prescribed form AOC 2 is enclosed as an Annexure III of this Directors Report. The related party transaction policy has been uploaded on the website of the Company (www.caplinpoint.net) NOMINATION AND REMUNERATION COMMITTEE (NRC) AND ITS POLICY The Nomination and Remuneration Committee is empowered to authorize and exercise the power as specified in section 178 of the Companies Act, 2013. The Company has a policy on Directors appointment and remuneration including the criteria for determining the qualification, positive attributes and independence of a Director and other matters as provided under section 178(3) of the Companies Act,2013. The Nomination and Remuneration Committee policy is annexed in Annexure IV of the Directors report. MATERIAL CHANGES AND COMMITMENTS There were no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed in Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given as Annexure V to this Directors' Report. BOARD EVALUATION Pursuant to Clause 49 of the Listing agreement, Section 134(3)(p) of the Companies Act, 2013 and Schedule V of the Companies Act, 2013, the Board had carried out performance evaluation of its own and that of its Committees and of the individual Directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board. The outcome of the evaluation process were satisfactory, which resulted in the active engagement of the Board and committees in the Company. CORPORATE SOCIAL RESPONSIBILITY (CSR) Pursuant to the provisions of section 135 of the Companies Act, 2013 read with CSR Rules, the Company has constituted Corporate Social Responsibility Committee. Based upon the recommendation of the CSR committee the Board of Directors have approved CSR Policy. During the year under review, the Company has spent a sum of H5.31 Lakhs towards CSR in accordance with Schedule VII of the Companies Act, 2013. This being the first year of CSR implementation, the CSR activities of the Company are being planned and the company is in the process of identifying suitable/ focus areas in which CSR activities could be done. Moreover, Company aims to identify CSR activities which would ensure optimum utilization and maximum social relevance in its endeavor to fulfill the criteria under CSR. The Company plans to increase CSR spending in the years to come. Disclosure under Companies (Corporate Social Responsibility policy) Rules, 2014 is annexed as an Annexure VI to this report. AUDIT COMMITTEE The composition of the Audit Committee, meetings of the Audit Committee and their terms of reference of the Audit committee have been disclosed separately in the Corporate Governance Report which is annexed and forms a part of this annual report. POLICY ON BOARD DIVERSITY In terms of Clause 49(IV) of the Listing agreement, the Nomination and Remuneration Committee has formulated a Policy on Board diversity to align with the business requirements of the Company, which inter-alia specifies optimum combination of Executive and Non-Executive Directors and Independent Directors. The recommendatory requirement for each of the Directors to possess functional diversity and role of NRC to ensure that the Policy on Board diversity is taken into account while recommending the appointment of new Directors on the Board of the Company. INTERNAL FINANCIAL CONTROLS The Company has designed and implemented adequate internal financial control systems with respect to the financial statements. During the year under review, no serious / strict observation have been received from the internal auditors of the Company with respect to ineffectiveness or inadequacy of such controls. AUDITORS STATUTORY AUDITORS Pursuant to Section 139 of the Companies Act, 2013, M/s. CNGSN & Associates LLP, Chartered Accountants, Chennai, were appointed as Statutory Auditors of the Company at the Twenty Third Annual General Meeting of the Company for a consecutive period of three years till the conclusion of Twenty Sixth Annual General Meeting. The Company has received a certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, would be in compliance with the requirements of the Companies Act, 2013 and the rules made there under. Accordingly, the Audit Committee and the Board of Directors have recommended to ratify their appointment as Auditors of the Company for the financial year 2015-16. The necessary resolution is being placed before the shareholders for approval. SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of Directors of the Company appointed M/s. G Ramachandran & Associates, Company Secretaries, Chennai to conduct the Secretarial Audit of the Company for the financial year ended June 30, 2015. The Secretarial Audit Report (Form MR - 3) is given as Annexure VII to this Directors' Report. The reports of Statutory Auditors (which forms a part of this report) and the report of the Secretarial Auditor (which is annexed to this Directors Report) are self-explanatory having no adverse remarks/ comments or disclaimer. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement, Corporate Governance and Management Discussion and Analysis report is given separately which form a part of this Annual report. The Company has paid the listing fees for the year 2015-16 to the Stock exchanges where the shares of the Company are listed. RISK MANAGEMENT The Board has designed and framed risk management approach through which it identifies and manages the risk parameters. The senior level management periodically reviews the risk parameters through which key business risk are identified and addressed . A brief report on the Risk Management are referred in the Management Discussion and Analysis Report which forms a part of the Annual Report. VIGIL MECHANISM The Company has established a vigil mechanism, through a Whistle Blower Policy, where Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle-blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct .It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairman of the Audit Committee, when necessary. The Company ensures that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment or victimization. The vigil Mechanism policy is disclosed on the website of the Company (www.caplinpoint.net). DISCLOSURES 1. There has been no change in the nature of business of the Company during the year under review. 2. During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. 3. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Particulars pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1) & (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed in the Annexure VIII to this Directors report. 4. During the Financial year 2014-15, none of the employees were in receipt of the remuneration pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 5. There were no Complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 6. Neither the Managing Director nor the Whole-time Directors of the Company receives any remuneration or commission from any of its subsidiaries ACKNOWLEDGEMENT The Board of Directors wishes to place on record their sincere appreciation to the customers, suppliers, business partners and group companies and shareholders for their support. The Directors would like to thank the Bankers and financial Institutions, Central and State Governments of Tamil Nadu, Puducherry, Himachal Pradesh and Regulatory Authorities and Stock Exchanges as well. The Directors would take this opportunity to express their appreciation for the dedicated efforts of the employees and their contribution which is deeply acknowledged FOR AND ON BEHALF OF THE BOARD C C PAARTHIPAN CHAIRMAN Date : August 20, 2015 Place : Chennai |