Your Directors have pleasure in presenting the 33rd Annual Report of the business andoperations along with the Audited Financial Statements of the Company for the financialyear ended on March 31 2019.
The Financial performance of the Company for the year ended March 31 2019 issummarized below:-
| || |
(Rs. In Lacs)
|Particulars ||Year ending 31-03-2019 ||Year ending 31-03-2018 |
|Total Revenue ||29621.87 ||28073.38 |
|Gross Profit ( Loss) ||577.14 ||(5337.71) |
|Interest ||262.04 ||705.33 |
|Depreciation ||3397.31 ||3463.13 |
|Provision for deferred tax ||- ||- |
|Net Profit ( Loss) ||312.12 ||(5411.67) |
|Balance c/f to balance sheet ||312.12 ||(5411.67) |
REVIEW OF BUSINESS OPERATIONS
During the financial year 2018-19 the Company earned profits after a gap of 8 years.During financial year 2018-19 your company earned total revenue of Rs. 29621.87 lacsagainst Rs. 28073.38 Lacs during financial year 2017-18. The Company earned a profit ofRs. 312.12 lacs during 2018-19 against loss of Rs. 5411.67 lacs in 2017-18. The Net Profitis attributable to one time settlement with Phoenix ARC during the year. The Company is inprocess of settlement with rest of the banks.
INDIAN ACCOUNTING STANDARDS:
The financial statements for the year ended on 31st March 2019 has been prepared inaccordance with the Indian Accounting Standards (Ind AS) as per the Companies (IndianAccounting Standards) Rules 2015 and the Companies (Indian Accounting Standards)Amendment Rules 2016 notified under section 133 of Companies Act 2013 and other relevantprovisions of the Act. The estimates and judgments relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonably present the Company's state of affairs profitsand cash flows for the year ended 31st March 2019.
The Notes to the Financial Statements adequately covers the Audited Statements andforms an integral part of this Report.
STATE OF AFFAIRS OF THE COMPANY
The state of affairs of the Company is presented as part of the Management Discussion& Analysis Report in a separate section forming part of this report as required underthe SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.
The main business of your Company is manufacturing Pharmaceutical Products. We arepresently in both domestic and export markets. In view of the scenario described in themanagement discussions your Company is expected to grow with wide range of products andmanufacturing expertise barring unforeseen circumstances.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the Financial Year 2018-19 there is no change in the Directorship of theCompany.
Pursuant to the provisions of Section 152 of the Act Dr. Gopal Munjal (DIN No.00005196) Managing Director & CEO and Dr. Vikrant Rai Mehta (DIN No. 00010756) JointManaging Director will retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for reappointment. The Board recommends their re-appointment.
During the Financial Year 2018-19 Mr. Amrender Kumar Yadav joined as CompanySecretary & Compliance officer of the Company w.e.f 2nd August 2018 in place of Ms.Simrat Kaur who resigned from the post w.e.f. 14th July 2018.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the applicableprovisions of Section 149 of the Companies Act 2013.
During the year six Board Meetings were held on 30th May 2018 2nd August 2018 14thAugust 2018 14th November 2018 11th February 2019 and 1st March 2019. The detailsregarding the meetings are given in the Corporate Governance Report.
In terms of the provisions of Section 2(51) and Section 203 of the Act the Board ofDirectors has nominated following as KMPs of the Company:
1. Dr. Gopal Munjal (Managing Director & CEO)
2. Sh. S R Mehta (Whole Time Director designated as Chairman)
3. Dr. V R Mehta (Whole Time Director designated as Joint Managing Director)
4. Sh. Arun Seth (Chief Financial Officer)
5. Mr. Amrender Kumar Yadav (Company Secretary)
In April 2019 the Registrar of Companies Chandigarh has disqualified Dr Gopal Munjal Sh. S.R.Mehta and Dr. V.R.Mehta Directors under Section 164 (2)(b) of the CompaniesAct2013 probably due to disposal of the Company's appeal of restructuring of fixeddeposits by Hon'ble NCLAT New Delhi. The Company has not received any intimation ornotice regarding such disqualification. As there is no default as to payment of fixeddeposit as on 31.03.2019 so the Company has submitted a representation in this regard withthe office of the ROC which is still pending.
During the year all applications made by the Company for the waiver of remuneration andfor payment of further remuneration to the Central Govt. were abated with the directionsto seek the approval from the Shareholders. Accordingly as per the requirement of theamended Section 197 as amended by the Companies Amendment Act 2017 the Company isseeking the shareholders approval for the waiver of the excess remuneration and thepayment of the remuneration to the executive directors the details of the same areavailable in the notice to the annual general meeting dated 10th August2019 as attachedto this annual report .
a) Continuation of Non-Executive Directors of more than 75 years of Age
Pursuant to Regulation 17 (1A) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended vide SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 the Company tookthe approval of the Members by way of Special Resolution in the Annual General Meeting ofthe Company dated 28th September 2018 for continuation of Directorship of Dr. J K Kakkar(DIN:00015493) (aged around 83 years) on the Board of the Company as a Non ExecutiveIndependent Director of the Company.
b) Relationship/Transaction of Non-Executive Directors with the Company
The Non-Executive Directors of the Company had no pecuniary relationship ortransactions with the Company other than taking sitting fees and reimbursement ofexpenses incurred by them to attend meetings of the Company. Details and brief resume ofthe Directors seeking reappointment/appointments required by Regulation 26 (4) and 36 (3)of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ('Listing Regulations') and as required under SecretarialStandards - 2 on General Meetings issued by "The Institute of Company Secretaries ofIndia" are furnished in the Notice convening the Annual General Meeting forming partof the Annual Report.
Other details of the Directors have been given in the Corporate Governance Reportattached to this Report.
c) No. of Meetings of the Board
The Board meetings of your company are planned in advance in consultation with theBoard Members. The Board met six (6) times during the Financial Year 201819 the detailsof which are given in the Corporate Governance Report that forms part of this AnnualReport. The intervening gap between any two meetings was within the period prescribed bythe Companies Act 2013.
d) Performance evaluation of the Board its Committees and individual Directors
Pursuant to applicable provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors
The Independent Directors held separate meeting on 11th February 2019 without thepresence of Non-Independent Directors and the members of management and discussedinter-alia the performance of non- Independent Directors and Board as a whole and theperformance of the Chairman of the Company after taking into consideration the views ofexecutive and Non-Executive Directors.
The Nomination and Remuneration Committee has also carried out evaluation of everyDirector's performance. The performance evaluation of all the Independent Directors havebeen done by the entire Board excluding the Director being evaluated. On the basis ofperformance evaluation done by the Board it shall be determined whether to extend orcontinue their term of appointment whenever the respective term expires.
e) Details of Familiarization Programme:
The details of programmes for familiarization of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates the business model and related matters are posted on thewebsite of the Company at http://www.indswiftltd.com/ familiarisation-programme.php.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) That in the preparation of the annual financial statements for the year ended 31stMarch 2019; the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2019 and of the profit of the Company for the year ended on thatdate;
c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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 financialcontrols were adequate and were operating effectively.
f) That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act 2013 read withRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22of SEBI (LODR) Regulations 2015 the Company has in place a "Whistle BlowerPolicy" which provides an opportunity to the Directors and employees to raiseconcerns about unethical and improper practices or any other wrongful conduct in or inrelation to the company. The details of the Whistleblower Policy are stated in theCorporate Governance Report and the said Policy has been uploaded on the Company's websitewww.indswiftltd.com and the web link to the same is www.indswiftltd.com/whistle-blower-policy.php.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
As on March 31 2019 the Company does not have any Associate Subsidiary or Jointventure.
The Company had M/s Ind Swift Laboratories Limited as its' Associate Company as totalshare holding of the Company in Ind Swift Laboratories Limited was 20.98% as on 31stMarch 2018. But during the Financial Year 2018-19 the holding decreased to 19.97% due tofresh allotment made by M/s Ind-Swift Laboratories Limited which resulted into reductionof Company's holding from 20.98% to 19.97%.
The Company has framed a policy for determining material subsidiaries which has beenuploaded on the Company's website and the web link to the same is http://www.indswiftltd.com/material-subsidiary.php.
In view of inadequacy of profits the Board does not recommend any dividend for theFinancial Year 2018-19.
There is no unpaid dividend outstanding as on 31.03.2019. During the Financial Year anamount of Rs. 3.04 Lakhs was transferred to central government account (Investor Educationand Protection fund) on account of unpaid dividend for financial year 2010-11.
The Board of Directors has decided to retain the entire amount of profit in the Profit& Loss Account and not to transfer any amount to the General Reserve.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to provisions of Section 124(6) of the Companies Act 2013 (Act) read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 (IEPF Rules) the Company is required to transfer all unpaid or unclaimeddividends after the completion of 7 (seven) consecutive years to Investor Education andProtection Fund (IEPF) established by the Central Government. Further according to therules the shares in respect of which dividend has not been paid or claimed by theshareholders for seven consecutive years or more shall also be transferred to the demataccount created by the IEPF Authority. The Company has transferred the unclaimed andunpaid Dividends and the corresponding shares to IEPF. Further the corresponding shareswill be transferred as per the requirements of IEPF rules details of which are providedon the Company website www.indswiftltd.com.
The Hon'ble Company Law Board vide its order No. CP No. 27/02/2013 dated 30thSeptember 2013 had granted extension of time in repayment of deposits. As the Company hasincurred further losses the Company had filed a fresh Petition with Hon'ble NCLTChandigarh Bench for grant of further extension in repayment of the outstanding deposits.The Hon'ble NCLT has vide its order dated 08.12.2017 disposed off the said appeal.
However the Company had further approached the Hon'ble National Company Law AppellateTribunal (NCLAT) New Delhi against the order of the Hon'ble NCLT Chandigarh. The Hon'bleNCLAT Delhi also disposed off the appeal vide its order dated 19th September 2018without granting any relief to the Company. Now the Company is making Fixed Depositsrepayments as per the Company Law Board Order dated 30th September 2013.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and/or Board under section 143(12) ofthe Companies Act 2013 and rules framed thereunder.
RELATED PARTY TRANSACTIONS DISCLOSURES UNDER COMPANIES ACT 2013
All related party transactions entered into during the financial year were on an arm'slength basis and in the ordinary course of business. No related party transaction was inconflict with the interest of the Company. No materially significant related partytransaction was made by the Company with the Key Managerial Personnel. As prescribed bySection 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 1" to the Directors' Report. The policy on Related Party Transactionsas approved by the Board has been uploaded on the Company's website www.indswiftltd.com
RELATED PARTY TRANSACTIONS DISCLOSURES UNDER LODR REGULATIONS 2015
As per the LODR Regulations 2015 every Listed Company needs to disclose the amounts ofLoans/advances/ investments outstanding at the end of the year along with the maximumamount outstanding during the year.
In compliance to the above regulations the Company hereby give disclosure in thespecified format:-
|In the accounts of ||Nature of Transaction ||Disclosure |
|Holding Company ||Loans & Advances ||Nil as Company has no Holding Company |
|Subsidiary ||Loans & Advances ||Nil as Company has no Subsidiary Company |
|Holding Company ||Investments ||Nil as Company has no Subsidiary Company |
DISCLOSURE OF TRANSACTIONS WITH PROMOTER/ PROMOTER GROUP
As per Schedule V of the LODR Regulations 2015 every listed Company shall disclose thetransactions with any person or entity belonging to the promoter/promoter group whichholds 10% or more shareholding in the listed entity.
As on 31st March 2019 M/s Essix Biosciences Limited being the Promoter Group entityis holding 31.45% of total equity of the Company. The details of all the transactions withEssix Biosciences Limited are already given in Form AOC-2 forming part of this AnnualReport.
Even though the provision of Regulation 21 of the SEBI (LODR) Regulations 2015regarding constitution of Risk Management Committee are not applicable on the Companystill the Board has constituted a Risk Management Committee. The details of the Committeeare given in the Corporate Governance Report.
The Company's Risk Management Policy is available on Company's Website i.e.www.indswiftltd.com and the weblink of the same ishttp://www.indswiftltd.com/risk-management.php
CHANGES IN CAPITAL STRUCTURE AND LISTING OF SHARES
The paid up Equity Share Capital as at 31st March 2019 stood at Rs. 10.83 croreconsisting of 54164653 equity shares of Rs. 2/- each. During the year under review theCompany has not issued shares or convertible securities or shares with differential votingrights nor has granted any stock options or sweat equity or warrants. As on 31.03.2019none of the Directors hold instruments convertable into equity shares of the Company.
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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34 (2) (e) of the Listing Regulations 2015 read with otherapplicable provisions the detailed review of the operations performance and futureoutlook of the Company and its business is given in the Management's Discussion andAnalysis Report which forms part of this Annual Report and is incorporated herein byreference and forms an integral part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 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 Actare given in the notes to the Financial Statements forming part of the Annual Report.
EXTRACT OF ANNUAL RETURN
The information required under Section 134 (3) (a) of the Companies Act 2013 (the Act)read together with Section 92 (3) of the Act regarding extract of the Annual Return inForm MGT-9 is appended hereto as Annexure 2 to the Directors' Report. A copy of the sameis available on the website of the company i.e. www.indswifttd.com
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has a Policy on Directors' Appointment & Remuneration. In compliancewith the provisions of Sections 134(3)(e) and 178 of the Companies Act 2013 andRegulation 19 read with Part D of Schedule II of the SEBI (LODR) Regulations 2015 theNomination & Remuneration Committee:
i) has formulated criteria for determining qualifications positive attributes andindependence of a director and recommends to the Board Policy relating to remunerationfor directors KMP and other employees;
ii) has formulated the evaluation criteria for performance evaluation of independentdirectors and the Board;
iii) has devised a policy on Board diversity;
iv) identifies persons who are qualified to become directors or may be appointed inSenior Management in accordance with criteria laid down and recommend to the Board theirappointment and removal;
v) recommends to the Board whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors.
The Company's policy on Directors' appointment & remuneration is available onCompany's Website i.e. www.indswiftltd.com
CORPORATE SOCIAL RESPONSIBILITY
The provisions of section 135 of the Companies Act 2013 regarding Corporate SocialResponsibility are not applicable on your Company.
ENVIRONMENT/POLLUTION CONTROL HEALTH AND SAFETY:
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
RESEARCH & DEVELOPMENT AND QUALITY CONTROL
The activities of R&D consists of improvement in the processes of existing productsand to develop new products. The Quality Control is the strength of the Company. All rawmaterials and finished products pass through stringent quality checks for better results.
The Company has taken adequate insurance policies for its assets against the possiblerisks like fire flood public liability marine etc. The Company has not taken Directorsand Officers Liability insurance policy as it is applicable on top 500 listed Companies ason 31st March 2019 and your Company does not fulfill that criteria.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under 134(3)(m) of the Companies Act 2013 read with Rule8 of The Companies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption and foreign exchange earnings and outgo are given as "Annexure 3" tothe Directors' Report.
COMMITTEES OF THE BOARD
The Company's Board has constituted the following Committees prescribed under theCompanies Act and the LODR Regulations 2015:-
a) Audit Committee
b) Stakeholders Relationship Committee
c) Risk Management Committee
d) Nomination and Remuneration Committee
e) Sub-Committee of the Board
The details of the Composition of the Committees their role and terms of reference aregiven in Corporate Governance report.
The Audit Committee of the Company had proposed and on 26th August 2017 the Board ofDirectors of the Company had recommended the Appointment of M/s Jain & AssociatesChartered Accountants (ICAI Firm Reg. No. 001361N) as the Statutory Auditors of theCompany for a period of 5 Consecutive years from the conclusion of the 31st Annual GeneralMeeting till the conclusion of the 36th Annual General Meeting of the Company to be heldin the year 2022.
Further the shareholders of the Company had approved the appointment of M/s Jain &Associates Chartered Accountants as the Statutory Auditors of the Company by passing theOrdinary Resolution in the 31st Annual General Meeting held on 26th September 2017.
Under Section 139(1) of the Companies Act 2013 and the rules made there under earlierit was mandatory to place the matter related to ratification of appointment of StatutoryAuditors in every Annual General Meeting of the Company. But now after the changes inCompanies (Audit and Auditors) Amendment Rules 2018 such proviso has been omitted w.e.f7th May 2018.
Accordingly no item has been taken for the ratification of appointment of StatutoryAuditors of the Company. The Auditors have however confirmed that they are notdisqualified from continuing as Auditors of the Company.
A) EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE STATUTORY AUDITORS IN THEIR REPORT.
Regarding observations/ qualifications made by the Auditors the Directors have tostate as under:-
1. Debts of the Company have been assigned by the various Banks/ Financial Institutionto Edelweiss Assets Reconstruction Companies (EARC). The Company is in talks with the EARCfor restructuring the debts of the Company assigned to them. In the absence ofrestructuring agreement with EARC the interest liability on such assigned debts has notbeen provided in accounts being not ascertainable. The same will be accounted for at thetime of entering with the restructuring agreement with EARC as per the terms of theagreement.
2. Due to NPA status of accounts of the Company the banks are not charging interest inthe account of the Company and also not providing account statement to the Company. Due tothis interest liability on account of the same has not been provided in the books ofaccounts. The same will be provided at the time of settlement/charging of interest bybanks in Account. The other observations/emphasis of matter as point out by Auditors areself explanatory and have been sufficiently explained in the Directors Report and AuditedFinancial Statements it does not require any Further clarification by the Board.
COST-AUDITORS AND THEIR REPORT
M/s. V. Kumar & Associates Cost Accountants have been duly appointed as CostAuditors of the Company for audit of cost accounting records which are covered under theCost Audit Rules for current financial year ending 31st March 2020.
As required by Section 148 of the Companies Act 2013 necessary resolution has beenincluded in the Notice convening the Annual General Meeting seeking ratification by theMembers to the remuneration proposed to be paid to the Cost Auditors for the financialyear ending 31st March 2020.
The Cost Audit Reports are required to be filed within 180 days from the end of thefinancial year. The Cost Audit Reports for the financial year 2017-18 issued by M/s V.Kumar and Associates Cost Auditors was filed with Ministry of Corporate Affairs. TheCost Audit Reports for the financial year ended 31st March 2019 will be filed within theprescribed period.
It is further to declare that Company has maintained all the cost records as specifiedby the Central Government under sub section (1) of section 148 of the Companies Act 2013.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Vishal Arora Practicing Company Secretary was appointed as Secretarial Auditor ofthe Company for the financial year 2018-19 pursuant to Section 204 of the Companies Act2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 isattached as "Annexure 4 & 4A" to the Directors' Report.
The secretarial Auditors have observed four observations in their secretarial auditreport which are self explanatory in nature and reply to all the observations by the boardis as under :
1. As per the orders of the Hon'ble NCLAT Delhi the Company is now making re-paymentsto Fixed Deposit holders as per the Company Law Board order dated 30th September 2013.
2. As per the requirement of the amended section 197 of the Companies Act 2013 theCompany will take approval from the shareholders for the waiver of the excess remunerationand the payment of the remuneration to the Executive Directors of the Company in theupcoming Annual General Meeting of the Company scheduled to be held on 11th September2019.
3. The Registrar of Companies Chandigarh has disqualified Dr. Gopal Munjal Sh. S RMehta and Dr. V R Mehta Directors of the Company under section 164(2)(b) of the CompaniesAct 2013 probably due to disposal of the Company's appeal of restructuring of FixedDeposits by Hon'ble NCLAT New Delhi. The Company has not received any intimation ornotice regarding such disqualification. The Company has submitted representation in thisregard with the office of the ROC which is still pending.
4. Regarding the qualifications by the Statutory Auditors of the Company the Directorshave already given their explanations in Directors' Report and Note No. 35 of the Notes onFinancial Statements both forming part of this Annual Report.
INTERNAL COMPLAINTS COMMITTEE
The Company has complied with all the provisions relating to the constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
During the year the Committee has not received any complaint related to Sexualharassment.
INTERNAL FINANCIAL CONTROL
Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides bench marking controls with bestpractices in the industry.
The Audit Committee actively reviews the adequacy and effectiveness of the internalcontrol systems and suggests improvements to strengthen the same. The Company has a robustManagement Information System which is an integral part of the control mechanism.
The Audit Committee Board of Directors Statutory Auditors and the Business heads areperiodically apprised of the internal audit findings and corrective actions taken. Auditplays a key role in providing assurance to the Board of Directors. Significant auditobservations and corrective actions taken by the management are presented to the AuditCommittee of the Board. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman of the Audit Committee.
The Company strives to maintain the required standards of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI. The Company has compliedwith the Corporate Governance Code as stipulated under the Listing Regulations. The Reporton Corporate Governance in accordance with Rules 34(3) read with Para C of Schedule V ofSEBI (LODR) Regulations 2015 forms part of this Report. The Auditors' certificatecertifying compliance with the conditions of Corporate Governance under Regulation 34(3)read with Schedule V of the SEBI (LODR) Regulations 2015 is annexed as "Annexure1" to the Corporate Governance Report.
Your Company is of the firm opinion that efficiency of its employees plays a key rolein achieving set goals and building a competitive work environment.
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has constituted "InternalComplaints Committee" for prevention of sexual harassment of its women employees.During the year the Committee has not received any complaint related to Sexualharassment.
PARTICULARS OF EMPLOYEES
The Company takes pride in the commitment competence and dedication of its employeesin all areas of the business. The relation between the management and employees arehealthy and cordial. There is a transparency in the dealings and on matters relating tothe activities of the Company and its employees.
Particulars of remuneration of employees required to be furnished pursuant to theprovisions of Section 197 (12) of the Companies Act 2013 (Act) read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenas "Annexure 6" to this Report. Particulars of remuneration of employeesrequired to be furnished in terms of Rules 5(2) and 5(3) of the said Rules forms part ofthis Report which shall be provided to Members upon written request pursuant to thesecond proviso of Rule 5. Particulars of remuneration of employees are available forinspection by Members at the registered office of the Company during business hours on allworking days up to the date of the forthcoming AGM.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year in an ongoing appeal before the VAT Tribunal Chandigarh the companyfiled a copy of the assessment order for the year 2011-12 and prayed for the proceedingsto be declared infructuous in light of the fact the assessment having already been done.Somehow the Excise & Taxation Department U.T. Chandigarh alleged that the order soproduced was fake and hence they ordered for fresh assessment and also an FIR wasregistered against unnamed private companies/private persons and officials of Excise &Taxation Department U.T. Chandigarh.
For investigation purposes one of the Non-executive Director of the Company viz. Sh.N.R. Munjal was detained by the investigating agencies for some days and later released onbail and the matter is subjudice.
In the assessment proceedings while denying Input Tax Credit (ITC) to the company inrespect of its purchases a demand of Rs. 66.34 crore on account of VAT and CST (VAT Rs.14.33 Cr. penalty Rs. 31.61 Cr. and Interest Rs. 20.23 Cr. PLUS CST Rs. 0.24 Cr.) wasraised by the Department. However the Company has filed appeal against the said orderwhich is now pending before the VAT Tribunal. A predeposit of Rs. 16.65 cr. as requiredunder Section 62(5) of the Punjab VAT Act has been deposited by the company.
The whole case revolves around the disallowance of ITC alleging only reason that thedepartment has verified the returns of the supplier dealers of the company and have foundthat none of them had paid tax. Interestingly the supplier dealers' returns have beenassessed by the Department wherein the department accepted the transactions of sale andpurchase of the selling dealers as genuine and did not find any illegality/wrong in theirclaim of ITC or payment of tax which was fully allowed (having been all dulypaid/discharged) for the year 201112. So much so the assessment of the buyer dealer ofthe company i.e. to whom the company had sold the goods has also been done by the samedepartment and there also their ITC has been duly allowed. Only the company has beenchosen to be denied the benefit of ITC.
Though this stand of the department is also contrary to the well laid down provisionsof Punjab VAT Act / Rules and also umpteen judgments of the Hon'ble Apex Court and Hon'bleHigh Courts wherein it has been clearly laid down that liability on sales is to bedischarged by seller and even for any fault on the part of seller; the purchaser cannot bedenied ITC. Moreover in present case the department framed assessment of both the Sellerto the Company & Purchaser from Ind Swift Limited without any demand/wrong allegedtherein. Under these facts & circumstances inter alia the company claims on being onthe right side of law.
In respect of the same dispute but on different law points the matter is also pendingbefore the Hon'ble Supreme Court and Hon'ble High Court of Punjab & Haryana atChandigarh.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFTER CLOSURE OF FINANCIAL YEAR
No material changes and commitments have occurred between the end of the financial yearand the date of the Report which has effect on the Financial Statements.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Alankit Assignments Ltd. Alankit Heights 2E/121 Jhandewalan Extension NewDelhi are the Registrar and
Share Transfer Agent of the Company for the Physical as well as Demat shares. Themembers are requested to contact the Registrar directly for any of their requirements.
In terms of the Listing Regulations the Certificate duly signed by Dr. Gopal MunjalManaging Director & CEO and Sh. Arun Seth Chief Financial Officer (CFO) of theCompany was placed before the Board of Directors along with the annual financialstatements for the year ended on 31st March 2019 at its meeting held on 30th May 2019.
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the Bankers and Government Authorities and also thanks theShareholders for the confidence reposed by them in the Company and Look forward to theirvaluable support for the future plans of the Company. Directors also thank itsDistributors agents stockiest retail traders medical professionals employees andcustomers for their continued patronage of the company products.
| ||On behalf of the Board of Directors |
|Place: Chandigarh ||S R Mehta |
|Date: 10.08.2019 ||Chairman |
ANNEXURE-1 TO THE DIRECTORS' REPORT
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm's length transaction under third proviso isgiven below:
1. No contracts or arrangements or transactions were entered into by the Company withrelated parties during the year ended March 31 2019 which were not at arm's lengthbasis.
2. Details of contracts or arrangements or transactions at Arm's length basis:
| || |
|a) ||Name(s) of Related Party ||Essix Biosciences Ltd ||Ind swift Laboratories Ltd ||Mansa Print & Publishers Ltd ||swift Fundamental Ed.& Res. society ||Halcyon Lifesciences P Ltd ||3M Adv. & Pub. Ltd |
|b) ||Nature of Relationship ||Group Company ||Group Company ||Group Company ||Group Entity ||Group Company ||Group Company |
|c) ||Nature of contracts/ arrangements/ transactions ||Purchase of goods/ services ||Purchase of goods/services ||Purchase of goods/services & Loans and Advances ||Loans & Advances ||Sale of goods/ services ||Purchase of goods & Services |
|d) ||Duration of the contracts/ arrangements / transaction ||ongoing ||ongoing ||ongoing ||ongoing ||ongoing ||ongoing |
|e) ||Salient terms of the contracts or arrangements or transaction including the value (Rs.in lacs) ||As per Transfer pricing guidelines Rs 12.10 ||As per Transfer pricing guidelines Rs 6345.42 ||As per Transfer pricing guidelines Rs 244.46 ||As per Transfer pricing guidelines ||As per Transfer pricing guidelines Rs 142.08 ||As per Transfer pricing guidelines 3.40 |
|f) ||Date of approval by the Board ||30-05-2018 ||30-05-2018 ||30-05-2018 ||30-05-2018 ||30-05-2018 ||30-05-2018 |
|g) ||Amount paid as advances if any ( Rs. in lacs) || || ||Rs 110.53 ||Rs 6128.29 || || |
ANNEXURE-3 TO THE DIRECTORS' REPORT
1. CONSERVATION OF ENERGY
a. Steps taken for conservation of Energy and their impact.
--- NA ---
b. steps taken by the Company for utilizing alternate sources of energy.
--- NA --
c. Capital Investment on energy conservation equipments
No major capital investments have been made by the Company. However various benefitshave been derived by making changes in the processes related to power generation.
2. technology absorption
a. Efforts in brief made towards technology absorption adaptation and innovation.
To continue developing innovative and commercially viable process know-how forformulation.
Research & Development (R&D).
b. Benefits derived as a result of above efforts e.g. product improvements costreduction product development etc.
Cost reduction quality improvement for formulation.
No. of products commercialized have been increased.
R&D Centre is recognized by DSIR New Delhi.
c. Information in case of imported technology (imports during last five years).
During the year the Company did not import any specific technology. The Companydeveloped technology through efforts of its in-house Research & Development.
3. RESEARCH & DEVELOPMENT
Specific area in which R&D carried out by the company:
The focus of research efforts are:
Development of formulation going off patent in regulatory Markets withopportunity to be first among others players by developing non infringing processes.
Cost effective development of formulation for semi regulated markets.
Up gradation of existing technologies/ products ongoing basis.
Benefits derived as a result of above R&D:
Improved productivity / process efficiencies
Internationally competitive prices and product quality.
Safe and environment friendly processes.
Enhanced Global presence/ visibility.
Future plan of action
Continue developing innovative commercially viable process know-how forFormulation
Continue strengthening the Research Infrastructure and capabilities complyinginternational GLP/GCP norms.
Enhance national and international research networking and strategic alliances.
Development of Non-infringing processes
Contract Research and manufacturing Services (CRAMS)
Expenditure on R & D during the year 2018-2019
| ||(in Rs.) |
| ||2018-19 |
|a. Capital ||58400 |
|b. Recurring ||15419046 |
|c. Revenue ||29580572 |
|Total ||45058018 |
|Total R&D expenditure as percentage of total turnover ||1.57% |
During the year foreign exchange outgo was Rs. 1370.95 Lacs and the earnings in ForeignExchange were Rs. 20344.24 Lacs. The details have been given in Note 25 of Notes toAccounts.
ANNEXURE-5 TO THE DIRECTORS' REPORT
Details under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
|Rule ||Particulars || || |
|(i) ||The Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year. ||a Mr. Sanjeev Rai Mehta Chairman ||67:1 |
| || ||b Dr Gopal Munjal Managing Director & CEO ||67:1 |
| || ||c Dr. Vikrant Rai Mehta Jt Managing Director ||67:1 |
|(ii) ||The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary in the financial year. ||a Mr. Sanjeev Rai Mehta Chairman ||NIL |
| || ||b Dr Gopal Munjal Managing Director & CEO ||NIL |
| || ||c Dr. Vikrant Rai Mehta Jt Managing Director ||NIL |
| || ||d Mr. Arun Seth Chief Financial Officer ||NIL |
| || ||e Mr. Amrender Kumar Yadav Company Secretary ||NA |
|(iii) ||The percentage increase in the median remuneration of employees in the financial year. ||2.00% |
|(iv) ||The number of permanent employees on the rolls of the company as on 31st March 2019. ||1336 |
|(v) ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||10.35% |
|For comparison purpose the percentage increase in remuneration of KMP is given in Rule no. (ii) above. |
(vi) It is hereby affirmed that the remuneration is as per the Remuneration Policy ofthe Company.