KOPRAN Directors Report

Dear Members,


The Directors have pleasure in presenting their 57th Annual Report together with the Audited Statement of Accounts for the year ended on 31 st March, 2016.


1. FINANCIAL PERFORMANCE


A) Standalone


The company achieved total revenue of Rs. 18,814 Lacs in the current year as against total revenue of Rs.33,207 Lacs in the previous year. During the year, the company earned net profit of Rs.1,143 Lacs (Previous Year: Rs. 1,548 Lacs).


Financial Summary and Highlights


(Rs.in Lacs)








































Particulars



Standalone Basis



For the period ended



F. Y. 2015-16



F. Y 2014-15



Total Revenue



18,814



33,207



Less Expenses



17,551



31,652



Profit Before exceptional items & Tax



1,263



1,555



Less Exceptional items



119



7



Net Profit / ( Loss ) for the Period



1,144



1,548



B) Consolidated


Consolidated revenue for the year was Rs. 29,869 Lacs as against consolidated revenue of Rs. 33,227 Lacs in the previous year. Consolidated net profit for the year was Rs. 1,072 Lacs as against a loss of Rs. 3,912 Lacs in Previous Year.


(Rs. in Lacs)








































Particulars



Consolidated Basis



For the period ended



F. Y. 2015-16



F. Y 2014-15



Total Revenue



29,869



33,227



Less Expenses



28,677



31,690



Profit Before exceptional items & Tax



1,191



1,536



Less Exceptional items



119



5,449



Net Profit / ( Loss ) for the Period



1,072



(3,912)



The Figures however are not comparable due to transfer of Active Pharmaceuticals Ingredients (API) business to Kopran Research Laboratories Limited, a Subsidiary Company on 31st March 2015 and the Consumer Care Division was sold w.e.f 1st April 2015.


2. Operations of the Company


(Rs. in Lacs)
























































Divisions



F.Y. 2015-16



F.Y. 2014-15



Formulations ((Finished Dosage form)







Export



16,558



18,415



Local Sales



2,173



51



Active Pharmaceuticals Ingredients ( API )







Local



-



7,296



Export



-



6,542



Consumer Care Division







Local



-



243



Export



-



11



The Active Pharmaceuticals Ingredients business was transferred to Kopran Research Laboratories Limited on 31st March 2015.The Consumer Care Division was sold w.e.f 1st April 2015, hence, the previous year figures are not comparable.


3. Dividend


In view of the carried forward losses, the Board does not recommend any dividend on Equity shares or Preference shares.


4. Management Discussion and Analysis Report


The Report on Management Discussion and Analysis as required under SEBI (LODR) Regulations, 2015 is provided as a separate section in Annexure A of Annual Report.


5. Subsidiaries, Associates and Joint Ventures


Kopran Research Laboratories Ltd., Kopran (H.K.) Ltd., and Kopran Lifesciences Ltd. are the existing wholly owned subsidiaries of the Company. Salient features and financial summary is provided as a separate section in Annexure B of Annual Report.


During the year, your company has subscribed the Right Issue of Kopran Research Laboratories Ltd. amounting to Rs.110 Crores.


As required under Rule 8(1) of the Companies (Accounts) Rules, 2014, the Directors Report has been prepared on standalone financial statements and a report on performance and financial position of each of the subsidiaries and associates are included in the consolidated financial statements.


In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and consolidated financial statements has been placed on the website of the Company www.kopran.com. Shareholders interested in obtaining a copy of the subsidiary companies may write to the Company Secretary at the Company’s registered office


6. Risk Management


The company has thought out and communicated the procedures to all concerned in the organization as to identification, measurement and evaluation of risks, their classification and mitigation.


7. Share Capital


During the Financial year, the Company has allotted 2150000 Equity shares F.V Rs10/- at a premium of Rs.56/- upon Conversion of Warrants issued on Preferential basis to a Promoter Group Company under SEBI (ICDR) Regulations, 2009. Accordingly the paid up Equity capital of the Company has increased from Rs.39.05 Cr. to Rs.41.10 Cr.


8. Directors & Key Managerial Persons(KMP)


During the Financial Year, Mr. Ajit Jain’s term as Executive Director(KMP)ended on 31st January, 2016,but he continues to work as Chief Operating Officer. Mr. Amit Rajan, Director of the Company resigned from the Board w.e.f. 28th April, 2016. The Directors wish to place on record, appreciation of contribution made by Mr. Ajit Jain and Mr. Amit Rajan during their tenure as Director of the Company.


9. Declaration by Independent Directors


All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the SEBI (LOdR) Regulations, 2015. In the opinion of the Board they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.


10. Meetings of the Board


Five Board Meetings were held during the Financial Year ended 31st March, 2016. The Details of the Board Meetings with regard to their dates and attendance of each of the Directors has been provided in the Corporate Governance Report as a separate section in Annexure C of Annual Report.


11. Performance Evaluation


Pursuant to the provision of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out the annual Performance Evaluation of the Directors individually as well as evaluation of the working of the Board and of the Committees of the Board, by way of individual and collective feedback from Directors.


The following were the Evaluation Criteria


a. For Independent Directors


Knowledge and Skills, Professional conduct, Duties, Role and Functions.


b. For Executive Directors


Performance as Team Leader / Member, New initiative / expansion, Achievements in the Key responsibility areas, Professional Conduct, Integrity, Sharing of information with the Board, Customer satisfaction and investor relations.


c. For Board and its Committees


Attendance and participation of the members, Advising in implementation of good Corporate practices, Reviewing and guiding corporate strategy, risk policy, annual budgets, oversees major capital expenditure etc., Succession planning, Financial integrity, appropriate systems of control in relation of financial operation and compliances of various laws.


The Directors have expressed their satisfaction with the evaluation process.


12. Audit Committee


The members of Audit Committee comprises of two Independent Directors, Dr. Arvind K. Mehta and Mr. Vishnu N. Khanna and Executive Vice Chairman Mr. Surendra Somani. The Committee inter alia reviews the Internal Control System and reports of Internal Auditors and compliance of various regulations including related party transactions. The Committee also reviews in detail the Financial Statements before they are placed before the Board. During the year, there are no instances where the Board had not accepted the recommendations of the Audit Committee.


13. Vigil Mechanism


Pursuant to the provisions of Section 177(9) and (10) of the Companies Act,2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has adopted a Vigil Mechanism or ‘Whistle Blower Policy’ for directors, employees and all stakeholders to report any concerns within the framework of the policy. The same is also disclosed on the website of the Company www.kopran.com


14. Internal Control Systems and their adequacy


The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances.


15. Fixed Deposits


During the financial year, the Company has not accepted any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.


16. Corporate Social Responsibility (CSR)


In view of past carried forward losses, the Company has not done CSR spending.


17. Policy on Nomination and Remuneration


The contents of Nomination and Remuneration Policy of the Company are prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The summary of the same is provided in the Corporate Governance Report.


18. Related Party Transactions


All Related Party Transactions that were entered into during the financial year were in ordinary course of business and on arm’s length basis. There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company and hence, enclosing of Form AOC-2 is not required. Suitable disclosure as required by the accounting standard (AS-18) has been made in the notes to the Financial Statements.


The policy for related party transactions as approved by the Board has been uploaded on the Company’s website.


19. Corporate Governance


The Report on Corporate Governance as stipulated under SEBI (LODR) Regulations, 2015 forms part of the Annual Report which is given in Annexure C. The requisite certificate from GMJ & Associates, Practicing Company Secretaries of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid SEBI (LODR) Regulations is attached to the Report on Corporate Governance.


20. Loans, Guarantee or Investments


Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statements Note 42 & 43.


21. Rating


The Rating issued by CRISIL for long term is CRISIL BBB-/stable and short term rating is CRISIL A3


22. Auditors


a) Statutory Auditors


In compliance with the Companies (Audit and Auditors) Rules 2014, M/s. Batliboi & Purohit, Chartered Accountants (Firm Regn. No.101048W) has been appointed as Statutory Auditors of the Company till the conclusion of next Annual General Meeting. Further, pursuant to the requirement of section 139 of the Companies Act, 2013, the appointment of Statutory Auditors is to be ratified by the members at every Annual General Meeting. Members are requested to ratify their appointment for the F.Y. 2016-17. M/s. Batliboi & Purohit have submitted a Certificate confirming that their appointment, if ratified, will be in accordance with Section 139 read with Section 141 of the Act.


There is no qualification, reservation, adverse remark or disclaimer by Statutory Auditors in their report for the financial year ended 31st March, 2016 except for emphasis of matter in Note 43 of Financial Statement for which management is of the opinion that no provision is required in respect of investment made in subsidiary company, Kopran Research Laboratories Limited as it is strategic and long term.


b) Secretarial Auditors


Pursuant to the provisions of Section 204 of the Act, the Board of Directors of the Company had appointed M/s. GMJ & Associates, Practicing Company Secretaries (Firm Regn. No.1432) to conduct the Secretarial Audit of the Company for the F.Y. 2016- 2017. M/s. GMJ & Associates has issued the Secretarial Audit Report for F.Y. 2015-16, given in Annexure D.


Secretarial Audit Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer.


c) Internal Auditors


The Board of Directors has appointed M/s. NGS & Co. LLP, Chartered Accountants (Firm Regn. No.119850W) as Internal Auditor of the Company for the F.Y. 2016-17.


23. Directors’ Responsibility Statement


Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:


i. In preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;


ii. They have selected such accounting policies listed in the financial statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year as on 31st March, 2016 and of the profit of the Company for that period;


iii. They have taken proper and sufficient care for maintenance of adequate accounting records in accordance of the Company and for preventing and detecting fraud and other irregularities;


iv. They have prepared the annual accounts on a going concern basis;


v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.


vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


24. Material changes


There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. 31st March, 2016. Further, it is hereby confirmed that there has been no change in the nature of the business of the Company.


25. Extracts of Annual Return


Pursuant to Section 92 (3) of the Companies Act,2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014,the extract of Annual Return in Form MGT-9 is attached as Annexure E.


26. Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and outgo


The information on Conservation of energy, Technology absorption and Foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act,2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure F.


27. Details of Unclaimed Suspense Account


Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of the SEBI (LODR) Regulations, 2015 is annexed herewith as Annexure G.


28. Particulars of employees and related disclosures


Disclosures pertaining to remuneration and other details required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed herewith as Annexure H.


On behalf of the Board of Directors


Surendra Somani


Executive Vice Chairman


30th May, 2016

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