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Shasun Pharmaceuticals Directors Report, Shasun Pharma Reports by Directors
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Shasun Pharmaceuticals

BSE: 524552|NSE: SHASUNPHAR|ISIN: INE317A01028|SECTOR: Pharmaceuticals
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Directors Report Year End : Mar '15    Mar 14
Dear Members,
 
 The Directors have pleasure in presenting the Fortieth Annual Report
 of Shasun Pharmaceuticals Limited (the Company) together with the
 audited statement of accounts for the year ended March 31, 2015.
 
 FINANCIAL RESULTS
 
                                                          Rs. in Mn
 
 Financial                    Standalone              Consolidated
 Results for 
 the year ending     31.03.2015    31.03.2014    31.03.2015   31.03.2014
 
 Gross Revenue      10,923.09     9,469.91       13,288.58     12,356.22
 
 Profit before       1,282.80     1,017.19        1,296.58      1,238.35
 interest,
 Depreciation 
 and Tax
 
 Profit before         458.24       279.50         301.69         229.67
 tax
 
 Profit after          413.48       352.25         237.55         302.11
 tax
 Appropriated as 
 follows
 
 Dividend on Equity       -          56.62            -            56.62
 Shares
 
 Tax on Dividend          -           9.62            -             9.62
 
 Transfer to General      -          35.22            -            35.22
 Reserve
 
 EPS (diluted) on         6.77        6.22           3.89           5.34
 the basis of
 Rs 2/- share
 
 A detailed analysis of the operations of the company has been provided
 in the management discussion and analysis report, which forms a part of
 this annual report
 
 1. Dividend
 
 The Board of Directors of the company have not recommended any dividend
 for the financial year ended March 31, 2015.
 
 2. Business performance
 
 During the financial year 2014-15, your Company has achieved
 Stand-alone gross revenue of Rs. 10923.09 Mn as against Rs. 9469.91 Mn
 in the year 2013-14, registering a growth of 15% on standalone basis.
 The profit after tax Rs. 413.48 Mn. as against Rs. 352.25 Mn.
 
 The Company achieved Consolidated gross revenue of Rs. 13288.58 Mn. as
 against Rs. 12356.22 Mn. in the year 2013-14, registering a growth of
 7.5% on consolidated basis. The profit after tax Rs. 237.55 Mn. as
 against Rs. 302.11 Mn.
 
 3. Material changes affecting financial position of the Company
 
 There are no material changes and commitments occurred, affecting the
 financial position of the Company, between the end of the financial
 year and the date of this report.
 
 4. Subsidiaries / Joint Ventures
 
 The details of Subsidiaries, Joint Ventures and Associate Companies and
 their financial position as required under the first proviso to Section
 129(3) is given in Form AOC-1 in Annexure as part of this report.
 
 Based on the Shareholders approval, your Company has divested its
 entire stake of 24.78% in joint venture viz. M/s. Alivira Animal Health
 Ltd. to the other shareholder M/s. Sequent Scientific Ltd. for a
 consideration of Rs. 75 crores.
 
 5. Amalgamation
 
 The Board of Directors at its meeting held on September 29, 2014, have
 approved the Scheme of Amalgamation between the Company and M/s.
 Strides Arcolab Limited, subject to various approvals under Section 391
 to 394 of the Companies Act, 1956. The appointed date of the proposed
 scheme is April 1, 2015.
 
 As per terms of the Scheme, shareholders of the Company will receive 5
 equity shares of Rs. 10 each of Strides Arcolab Limited for 16 equity
 shares of Rs. 2 each of the Company. The swap ratio has been arrived at
 based on the joint valuation report issued by M/s. Price Waterhouse &
 Co. and M/s. S.R. Batliboi & Co. LLP.  The Scheme is subject to
 regulatory and other necessary approvals.
 
 Pursuant to an Order of the Honourable High Court of Judicature at
 Madras, shareholders of the Company at their meeting held on March 12,
 2015, duly approved the scheme. Company had filed the petition before
 the said court for sanction of the scheme.
 
 6. Corporate Governance
 
 Your Company has been complying with the provisions of Corporate
 Governance as stipulated in Clause 49 of the Listing Agreement. A
 separate report on Corporate Governance along with Auditors''
 certificate on compliance of the Corporate Governance norms as
 stipulated in Clause 49 of the Listing Agreement and Management
 Discussion & Analysis forming part of this report are provided in this
 Annual Report.
 
 7. Composition and Number of Meetings of the Board
 
 The Board of Directors of the Company comprises of well qualified and
 experienced persons having expertise in their respective areas. It has
 appropriate combination of Executive, Non-Executive Directors and
 Independent Directors.
 
 During the financial year 2014-15, the Directors met seven times i.e.,
 on 23.04.2014; 21.05.2014; 30.05.2014; 06.08.2014; 29.09.2014;
 06.11.2014 and 05.02.2015.
 
 8. Directors/Key Managerial Personnel
 
 In accordance with the provisions of the Act and the Articles of
 Association of the Company, Mr. S. Abhaya Kumar and Dr. S. Devendra
 retire by rotation and are eligible for reappointment.
 
 Dr. Arun Chandra Karmakar appointed as an Additional Director and
 Director - Operations & EHS of the Company with effect from August 6,
 2014.
 
 Mrs. Taru Rajesh Mardia was appointed as an Additional Director of the
 Company with effect from April 30, 2015.
 
 Mr. M. Mohan, Director - EHS resigned with effect from August 6, 2014.
 Prof. Indira J Parikh, Independent Director, resigned with effect from
 February 6, 2015. The Board places on record their appreciation for the
 valuable guidance and support rendered by Mr. M. Mohan and Prof. Indira
 J Parikh during their association with the Company.
 
 The Company has received declarations from all the Independent
 Directors of the Company confirming that they meet the criteria of
 independence as prescribed both under the Act and Clause 49 of the
 Listing Agreement with the Stock Exchanges.
 
 Pursuant to the provisions of Section 203 of the Act, the appointment
 of Mr. S. Abhaya Kumar, Managing Director; Mr. S. Hariharan, Chief
 Financial Officer and Mr. S. Murali Krishna, Company Secretary, were
 formalized as the Key Managerial Personnel of the Company.
 
 9. Particulars of Employees and related disclosures
 
 In terms of the provisions of Section 197(12) of the Companies Act,
 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014, a statement showing
 the names and other particulars of the employees drawing remuneration
 in excess of the limits set out in the said Rules are provided in the
 annexure forming part of the Annual Report.
 
 Having regard to the provisions of Section 136(1) read with its
 relevant proviso of the Companies Act, 2013, the Annual Report
 excluding the aforesaid information is being sent to the members of the
 Company. The said information is available for inspection at the
 registered office of the Company during working hours and any member
 interested in obtaining such information may write to the Company
 Secretary and the same will be furnished without any fee and free of
 cost.
 
 10. Board Evaluation
 
 A formal evaluation of the Board, its committees and of the individual
 director is one potential effective way to respond to the demand for
 greater Board''s accountability and effectiveness. A questionnaire is
 prepared and is being circulated amongst the Directors for their
 comments. The performance evaluation of Directors including Independent
 Directors is done by the entire Board of Directors excluding the
 directors being evaluated. The Board of Directors expressed their
 satisfaction with the evaluation process.
 
 11. Directors'' Responsibility Statement
 
 Pursuant to the provisions of Section 134(5) of the Companies Act, 2013
 the Directors of your Company confirm 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) they have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the company at the end of the financial year and of the profit or loss
 of the company for that period;
 
 c) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of this
 Act for safeguarding the assets 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 and that such internal financial controls are adequate and
 operating properly; and
 
 f) they have devised proper systems to ensure compliance with the
 provisions of all applicable laws and that such systems were adequate
 and operating effectively.
 
 12. Remuneration Policy
 
 The remuneration policy of the Company has been so structured in order
 to match the market trends of the industry. The Board in consultation
 with the Nomination and Remuneration Committee decides the remuneration
 policy for directors. The Company has made adequate disclosures to the
 members on the remuneration paid to directors from time to time.
 Remuneration / Commission payable to Directors is determined by the
 contributions made by the respective directors for the growth of the
 Company.
 
 13. Risk Management
 
 During the year, your Directors have constituted a Risk Management
 Committee which has been entrusted with the responsibility to assist
 the Board in overseeing and approving the company''s enterprise wide
 risk management framework and overseeing that all the risks that the
 organization faces such as strategic, financial, credit, market,
 liquidity, regulatory and other risks have been identified and assessed
 and there is an adequate risk management infrastructure in place
 capable of addressing those risks.
 
 14. Internal Financial Controls
 
 The Company has in place adequate internal financial controls with
 reference to financial statements. During the year, such controls were
 tested and no reportable material weakness in the design or operation
 were observed.
 
 15. Auditors
 
 Cost Auditor: The Board has appointed M/s. Geeyes & Co., Cost
 Accountants as Cost Auditor of the Company for the financial year
 2014-15. The cost audit is under progress and the Company will submit
 the cost audit report within the prescribed time.
 
 Secretarial Auditor: The Board has appointed Mrs. Lakshmmi Subramanian,
 Practicing Company Secretary, to conduct Secretarial Audit for the
 financial year 2014-15. The Secretarial Audit Report for the financial
 year ended March 31, 2015 is given in annexure to this report.
 
 16. Audit Committee Recommendation
 
 During the year all the recommendations of the Audit Committee were
 accepted by the Board. The Composition of the Audit Committee is as
 described in the Corporate Governance Report.
 
 17. Related Party Transactions
 
 All related party transactions that were entered into during the
 financial year were on an arm''s length basis and were in the ordinary
 course of business. The Audit Committee granted omnibus approval for
 the transactions (which are repetitive in nature) and the same was
 reviewed by the Audit Committee and the Board of Directors. There were
 no materially significant related party transactions made by the
 Company with Promoters, Directors, Key Managerial Personnel or other
 designated persons which may have a potential conflict with the
 interest of the company at large. The transactions with the related
 parties are disclosed in the Notes to the financial statements in the
 Annual Report.
 
 18. Listing arrangements
 
 The company''s shares are listed in the BSE Ltd. and National Stock
 Exchange of India Ltd. and the annual listing fee has been paid to
 these stock exchanges.
 
 19. Vigil Mechanism
 
 The Company has established a whistle blower policy and also
 established a mechanism for directors and employees to report their
 concerns. The details of the same is explained in the Corporate
 Governance Report.
 
 20. Corporate Social Responsibility (CSR)
 
 The CSR Policy of the Company and the details about the initiatives
 taken by the Company on CSR during the year as per the Companies
 (Corporate Social Responsibility Policy) Rules, 2014 have been
 disclosed in Annexure as part of this report. Further the details of
 composition of the CSR Committee and other details are provided in the
 Corporate Governance Report which forms part of this report.
 
 21 . Disclosure under the Sexual harassment of woman at workplace
 (Prevention, Prohibition and Redressal) Act, 2013
 
 The company has put in place an anti-sexual harassment mechanism in
 line with the requirements of the Sexual Harassment of Women at the
 Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal
 Complaints Committee have been set up to redress complaints received
 regarding sexual harassment. All employees (permanent, contractual,
 temporary, trainees) are covered under this policy. The Company has not
 received any complaint of sexual harassment during the year 2014-15.
 
 22. Particulars of loans, guarantees or investments under Section 186
 of the Companies Act, 2013
 
 Details of loans, guarantees and investments covered under the
 provisions of Section 186 of the Companies Act, 2013 are given in the
 Notes to the financial statements.
 
 23. Share Capital
 
 Consequent to the allotment of 35,00,000 equity shares to M/s. Sequent
 Scientific Ltd., on preferential basis on 30.05.2014, the paid up
 equity share capital has gone upto Rs. 12.02 crores from Rs. 11.32
 crores.
 
 24.  Employees Stock Option
 
 The Company has reserved 11,02,477 (Eleven Lakh Two Thousand Four
 Hundred Seventy Seven) stock options under the Shasun ESOP Scheme and
 granted 2,23,000 (Two Lakh Twenty Three Thousand) stock options to
 identified Employees at a price of Rs. 85.60/- (Rupees Eighty Five and
 Sixty Paise) on August 6, 2014, which options will be vested over a
 period of five years at the rate of one-fifth of the options (i.e.,
 44,600 each year) with the first vesting date being one year from the
 date of grant of the option (i.e., August 5, 2015).
 
 25. 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.
 
 26. Extract of Annual Return
 
 An extract of Annual Return in form MGT-9 as on March 31, 2015 is
 attached as Annexure forming part of this Report.
 
 27. Environment, Health & Safety
 
 Shasun enjoys the services of a team that is experienced and competent
 in the management of Environment, Health and Safety issues. The team
 invests proactively in impact mitigation initiatives coupled with
 simulations.  All modern tools and techniques like PHA, Hazop and PSM
 are covered to improve Environment, Health and Safety. Internal and
 external audits measure our Environment, Health and Safety performance
 and also inspire the Company to achieve an international standard with
 zero deviations. Testimony to this are ISO 14001 and ISO 2007
 certifications for both Pondy and Cuddalore APIs.
 
 At Shasun Pharmaceuticals Limited, a responsible Environment, Health &
 Safety (EHS) commitment is integral to our existence. Regular audits
 are conducted and improvements carried out to provide a safe and
 secured atmosphere.
 
 28. Conservation of Energy, Technology Absorption, Foreign Exchange
 Earnings and Outgo
 
 Particulars in respect of conservation of energy, technology absorption
 and foreign exchange earnings and outgo as required under Section 134
 of the Companies Act, 2013, read with Rule 8(3) of the Companies
 (Accounts) Rules, 2014 is attached as Annexure to this Report.
 
 29. Acknowledgement
 
 Your Directors would like to express their grateful appreciation for
 the assistance and co-operation received from the Banks during the year
 under review. Your Directors also place on record their deep sense of
 appreciation for the continued support of customers, suppliers,
 employees and investors of the company.
 
                                 For and on behalf of Board of Directors
 
 
     S. Vimal Kumar           S. Abhaya Kumar         Dr. S. Devendra
     Wholetime Director       Managing Director       Wholetime Director
                                  
 
 Place : Chennai  
 Date  : April 30, 2015 
Source : Dion Global Solutions Limited
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