Directors' Report Dear Shareowners, Your Directors have great pleasure in presenting the 20th Annual Report together with audited statement of accounts for the year ended 31st March, 2015. OPERATIONS AND BUSINESS PERFORMANCE During the Financial year 2014-15, Ind-Swift Labs achieved a turnover of Rs. 6679.90 millions against the turnover of Rs. 9541.19 millions during financial year 2013-14. The Company suffered a loss of Rs.(1191.633) millions during 2014-15 against loss of Rs.( 1227.435) millions in 2013-14. The Company's exports decreased from Rs. 6104.08 millions in 2013-14 to Rs. 4304.30 millions during 2014-15. There has been no change in the nature of business of the company during the year under review. Kindly refer to Management Discussion & Analysis & Corporate Governance Report which form part of this report. CONSOLIDATED FINANCIAL PERFORMANCE Your company recorded a consolidated turnover of Rs. 6827.06 Millions during 2014-15 against the turnover of Rs. 9792.25 Millions during 201314. In consolidated terms, the Company suffered a loss of Rs. 1193.62 Millions in 2014-15, against loss of Rs. 1220.12 Millions in 2013-14. The Consolidated financial figures include the respective financial figures of the Company's three subsidiaries. As required under Clause 32 of the Listing Agreement with the Stock Exchanges, audited consolidated financial statements form part of the Annual Report and the same are annexed to this Report. DIRECTORS During the year Dr. Ashwani Vig, Ms. Preetika S. Chaubey and Mr. Prabhat Khurana joined the Board of the Directors as the Independent Directors and Dr. Vinay Kumar Arora and Mr. T.S. Bhattacharya resigned from the directorship of the Company. Dr. V.R. Mehta, Director (DIN No. 00010756) and Dr. Gopal Munjal, Director (DIN: 00005196) retire by rotation at the ensuing Annual General Meeting ("AGM") and being eligible offer themselves for re-appointment. The Board recommends their re-appointment. In terms of the Companies Act, 2013 ('Act') Independent Directors are required to be excluded while computing the number of Directors to retire by rotation. Accordingly only the promoter directors have been considered for calculating the number of those who are to retire by rotation. In accordance with Section 149(11) of the Companies Act, 2013, the current tenure of Independent Directors of the Company (except Dr. Ashwani Vig, Sh. Prabhat Khurana and Ms. Preetika S. Chaubey) is for a term of 5 consecutive years from the date of last AGM held on 30.09.2014 upto the March 31, 2019 The tenure of Dr. Ashwani Vig, Sh. Prabhat Khurana and Ms. Preetika S. Chaubey, whose appointment is being proposed for approval of shareholders in the ensuing AGM, if appointed, shall be retrospectively from the commencement of their appointment as an Additional Director of the Company i.e. 31.12.2014, 25.03.2015 and 25.03.2015 respectively. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the applicable provisions of Section 149 of the Act and under Clause 49 of the Listing Agreement with the Stock Exchanges. During the year, four Board meetings were held on May 28, 2014, August 12, 2014, November 7, 2014 and February 7, 2015, the details ofwhich are given in the Corporate Governance Report. CORPORATE GOVERNANCE A Report on Corporate Governance forms part of this Annual Report. The Auditors' certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is annexed as "Annexure 1" to this Report. CORPORATE DEBT RESTRUCTURING As on 31st March, 2015 the account of the Company has become NPA with six banks viz. SBI, ICICI bank, Canara Bank, Allahabad Bank, Exim Bank, State Bank of Hyderabad and one requirement of infusion of Promoters Contribution was pending by the Company. On the request of the Company the CDR cell has granted the extension of time upto September, 2015 for infusion of balance promoters contribution. DIVIDEND In view of inadequacy of profits, the Board does not recommend any Dividend for the Financial Year 2014-15. Unpaid dividend as on 31.03.2015 is Rs 13.51 lacs ( Previous year Rs 17.28 Lacs). During the financial year, an amount of Rs. 3.60 lacs was transferred to central government account (IEPF) on account of unpaid dividend for financial year 2006-07. EMPLOYEE STOCK OPTION SCHEME The members of the Company have approved 'Employee Incentive Scheme 2014' in the Annual general Meeting of held on 30th September, 2014. The Scheme is being implemented by the Company and the in-principle approval of the Stock Exchanges for Listing of Securities to be issued under the said scheme has been obtained. The Compensation Committee, Constituted in accordance with the SEBI Guidelines, administers and monitors the Scheme. The applicable disclosures as stipulated under the SEBI Guidelines in relation to the options granted under the earlier Employee Stock Option Scheme which stands scrapped as at March 31, 2015 are given in 'Annexure 2'. CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES The Company's shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded. During the year under review, no new shares were issued. SUBSIDIARY COMPANIES As on 31.03.2015, your Company had 3 Subsidiaries. The US subsidiary of the Company viz. Ind-Swift Laboratories Inc. achieved net sales of $ 37,12,864 and recorded a net Profit of $ 47,301. The Singapore Subsidiary Viz Meteoric Life Sciences PTE Ltd. has no sales and recorded a net loss of $ 83179.93. The Dubai Subsidiary viz. Ind-Swift Middle East FZE has not started operations yet. Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of each subsidiary and a joint venture is given in Form AOC - 1 as Annexure '3' to this Report. The Company has framed a policy for determining material subsidiaries, which has been uploaded on the Company's website. STATUTORY AUDITORS The Statutory Auditors of the Company M/s Jain & Associates, Chartered Accountants (Regd. No.001361N) retire at the conclusion of ensuing Annual General Meeting. They have confirmed their eligibility and willingness to accept the office of Auditors, if reappointed for the year 2015-16. The Audit Committee and the Board ofDirectors recommend the appointment of M/s Jain & Associates as Statutory Auditors of the Company for the financial year 2015-16 for shareholders approval. With regard to emphasis of matter contained in the point No. 7, 8 & 9 of Auditors' Report, the Board is of the view that the same are self explanatory. INTERNAL AUDITORS M/s Anju Sharma & Associates, Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time. COST-AUDITORS AND THEIR REPORT M/s. V. Kumar & Associates, Cost Accountants have been duly appointed as Cost Auditors of the Company for audit of cost accounting records which are covered under the Cost Audit Rules for current financial year ending March 31, 2016. As required by Section 148 of the Companies Act, 2013, necessary resolution has been included in the Notice convening the Annual General Meeting, seeking ratification by the Members to the remuneration proposed to be paid to the Cost Auditors for the financial year ending March 31, 2015. The Cost Audit Reports are required to be filed within 180 days from the end of the financial year. The Cost Audit Reports for the financial year 201314 issued by M/s V. Kumar and Associates, Cost Auditors, was filed with Ministry of Corporate Affairs within the stipulated time. The Cost Audit Reports for the financial year ended March 31, 2015 will be filed within the prescribed period. SECRETARIALAUDITORS AND THEIR REPORT Mr. Vishal Arora, Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2014-15 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as 'Annexure 4' and forms part of this report. There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2014-15 which call for any explanation from the Board of Directors. DEPOSITS The aggregate amount of fixed deposit outstanding as on 31st March 2015 was Rs.82.33 crores approx. (previous year Rs.93.22 crores ). The Hon'ble Company Law Board vide its order No.CP27/01/2013 dated 30th September, 2013 has granted extension of time in repayment of deposits. Now, the Company is making repayment of interest and Principal amount as due to the fixed deposit holders in terms of the aforesaid order of Hon'ble CLB. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report LISTING FEES The Annual Listing fee for the year under review has been paid to The BSE Limited and The National Stock Exchange of India Ltd. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO The particulars as prescribed under 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in 'Annexure 5'. NOMINATION AND REMUNERATION POLICY The Company has a Nomination and Remuneration Policy. In compliance with the provisions of Sections 134(3)(e) and 178 of the Companies Act, 2013 and Clauses 49(II)(B)(5) and 49(IV)(B) of the Listing Agreement, the Nomination & Remuneration Committee: i) has formulated criteria for determining qualifications, positive attributes and independence of a director; ii) identifies persons who are qualified to become directors or may be appointed in Senior Management in accordance with criteria laid down and recommend to the Board their appointment and removal; iii) recommends to the Board, Policy relating to remuneration for directors, KMP and other employees; iv) has formulated the evaluation criteria for performance evaluation of independent directors and the Board; v) carries out evaluation of every director's performance and the Board; and vi) devises a policy on Board diversity. RELATED PARTY TRANSACTIONS All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of business. No related party transaction was in conflict with the interest of the Company. Material related party transactions were entered into by the Company only with its subsidiaries. No materially significant related party transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC-2, as Annexure '6' to this Report. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company's website www.indswiftlabs.com PARTICULARS OF EMPLOYEES Particulars of employees required to be furnished pursuant to the provisions of Section 197 of the Companies Act, 2013 (Act), read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as an Annexure to this Report. However, pursuant to the provisions of Section 136 of the Act, the Report and Accounts are being sent to all the Members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company. The statement of particulars of appointment and remuneration of managerial personnel pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in 'Annexure 7' to this Report. EXTRACT OF ANNUAL RETURN Pursuant to the provisions of Section 92 (3) of the Companies Act, 2013, extract of the Annual Return in Form MGT-9 is given in 'Annexure 8' to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Pursuant to the provisions of Section 134(3)(g) of the Companies Act, 2013 (Act), particulars of loans/guarantees/ investments/securities given under Section 186 of the Act are given in the notes to the Financial Statements forming part of the Annual Report.. RISK MANAGEMENT In terms of Clause 49(VI) of the Listing Agreement, the Board constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report. CORPORATE SOCIAL RESPONSIBILITY Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS Pursuant to applicable provisions of the Companies Act, 2013 and Clause 49 of Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors. The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non- Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors. The Nomination and Remuneration Committee has also carried out evaluation of every Director's performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The Directors expressed their satisfaction with the evaluation process. AUDIT COMMITTEE The Audit Committee comprises Mr. K.M.S. Nambiar, Chairman and Dr. J.K. Kakkar, Independent Director, Mr. S.V. Singh, Nominee Director, Mr.Pradeep Kumar, Independent directors and Mr. N.R. Munjal, Vice Chairman of the Company. The functions performed by the Audit Committee and the particulars of meetings held and attendance thereat are given in the Corporate Governance Report. VIGIL MECHANISM/WHISTLEBLOWER POLICY In compliance with the provisions of Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49(II)(F) of the Listing Agreement, your Company has in place a 'Whistleblower Policy,' which provides an opportunity to the directors and employees to raise concerns about unethical and improper practices or any other wrongful conduct in or in relation to the Company. The details of the Whistle blower Policy are stated in the Corporate Governance Report and the said Policy has been uploaded on the Company's website www.indswiftlabs.com . HUMAN RESOURCES Your Company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building a competitive work environment. The Company regularly conducts various programmes at different levels so as to ensure that a vibrant and motivated work-force leads to achievement of the defined goals. Employee relations continued to the harmonious and cordial at all levels and in all the units of the Company. The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" the Company has constituted "Internal Complaints Committee" for prevention of sexual harassment of its women employees. The details regarding the committee are given in the Corporate Governance Report. During the year, the Committee has not received any complaint related to Sexual harassment. DIRECTORS RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. ACKNOWLEDGEMENT Your Directors thank all the employees for their sincere efforts, active involvement and devoted services rendered. Your Directors thank the shareholders of the Company for the confidence reposed in the Management of the Company. Your Directors place on record their gratitude to the Customers, Suppliers, company's Bankers and Financial Institutions for their support and cooperation during the year under review. On behalf of the Board of Directors S.R. Mehta Chairman Place : Chandigarh Date : 8th August, 2015 |