DIRECTORS’ REPORT THE MEMBERS, THEMIS MEDICARE LIMITED Your Directors have pleasure in presenting the 45th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015. b. OPERATIONS: The Company continues to be engaged in the activities pertaining to manufacturing of pharmaceutical products, especially in formulation and API activity. There was no change in nature of the business of the Company, during the year under review. c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES: BUSINESS ACTIVITIES: The performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended 31st March 2015 is attached and marked as Annexure I and forms part of this Report. d. DIVIDEND: With a view to conserve resources, your Directors have thought it prudent not to recommend dividend for the financial year under review. e. TRANSFER TO RESERVES: Your Board has not recommended transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year has been carried forward to the Statement of Profit and Loss. f. REVISION OF FINANCIAL STATEMENT: There was no revision of the financial statements for the year under review. g. DEPOSITS: Your Company has not accepted or renewed any deposits falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable. The deposits were accepted by the Company in earlier years from public under the provisions of The Companies Act, 1956 read together with Companies (Acceptance of Deposits) Rules 1975 which were due for repayment till May, 2015. As contemplated under Section 74 the outstanding deposits accepted under the erstwhile Companies Act, 1956 were due for repayment on or before 31st March, 2015. The Company has repaid deposits as and when falling due till 31st March, 2015. Some of the deposits accepted from public were maturing during the month of April & May 2015 together with deposits accepted from promoter shareholders. As per Section 74 of the Companies Act, 2013, your Company made an application to the Company Law board, Western Region, Mumbai seeking extension of time to repay the deposits as and when falling due in case of public and three years extension to repay deposits accepted from promoter shareholders. The Board is pleased to inform you that the Company Law Board vide order no. CA. No. 17/74(2)/CLB/MB/2015/2703 dated 19th May, 2015 has granted extension as sought by the Company. The Company has already repaid all the public deposits claimed till date. The unclaimed deposits payable as on 27th May, 2015 amounts to Rs. 10,00,000/- (Rupees Ten Lakhs only). The Company has made sufficient arrangements to repay the unclaimed deposits as and when claimed by the public depositors. Apart from this, deposits received from Directors & Promoter Members is outstanding for which the Honble Company Law Board, Regional Bench, Mumbai, allowed to repay the same on or before 31.03.2018 on the original terms & conditions of deposits. h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013: Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report. i. STATEMENT ON DECLARATION UNDER SECTION 149(6) OF THE COMPANIES ACT , 2013: The Board has received declaration from the Independent Directors under Section 149(6) of the Companies Act, 2013 that they are not otherwise disqualified to be Independent Directors. The Board further States that all the Independent Directors are persons of integrity and possesses relevant expertise and experience to discharge their duties and roles as Independent Directors of the Company. j. STATEMENT UNDER SECTION 178: Your Company has Constituted Nomination and Remuneration Committee as well as Stakeholder Relation Committee as contemplated under Section 178(1) of the Companies Act, 2013. The Nomination and Remuneration Committee consider that the Qualifications, Experience and positive attributes of the Directors on the Board of the Company are sufficient enough to discharge their duties as such. In view of paucity of profits remuneration is being kept to full time directors in line with schedule V of the Companies Act, 2013 as also only sitting fees are paid to other Directors for attending Board and Audit Committee meetings at present. k. COMMENTS OF THE BOARD ON AUDITORS' REPORT: i) Observations of Statutory Auditors on Accounts for the year ended 31st March 2015: There are no qualifications, reservations or adverse remark or disclaimer made by the Statutory Auditors in respect of financial statement as on and for the year ended 31st March, 2015. ii) Secretarial Audit Report for the year ended 31st March 2015: Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Shirish Shetye and Associates (FCS 1926 : CP No. 825), Company Secretaries had been appointed to conduct Secretarial Audit and issue Report for the financial year 2014-15. Secretarial Audit Report issued by M/s. Shirish Shetye and Associates (FCS 1926 : CP No. 825), Company Secretaries in Form MR-3 for the financial year 2014-15 forms part to this report. In respect of the observations made by in the Secretarial Audit report. Following are the explanations and comments offered by the Board. - As required pursuant to circular issued by SEBI bearing No. SEBI/Cir/ISD/3/2011 dated 17th June, 2011, 472000 promoters' equity shares (5.57% of total listed capital) are not in demat form. —The Company is following up for Dematerialisation of physical shares held by two promoters and expects to get the dematerialization of shares effected on or before the end of the current financial year. - As required under the Factories Act and the rules made there under, at Vapi Unit and Hyderabad Unit, the Company has not carried out Safety Audit regularly and the safety measures are not taken care of. - The aspect is discussed in the audit committee meetings and follow-up action being reviewed by the audit committee members. The safety Audit in respect of Vapi and Hydrabad units were carried out in earlier years and the recommendations, by and large, were implemented. The fresh audit report will be obtained during the current financial year and implemented accordingly. - At Hyderabad Unit, the Company engages contract labour, however as informed to me necessary compliances will be done during the current year. — The above observation is self explanatory. The Secretarial Audit Report is annexed herewith as Annexure II. l. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES: The details as required under Section 186 has been furnished in Annexure III which forms part of this report. m. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES: The details of transactions/contracts/arrangements entered by the Company with related parties as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review, are furnished in Annexure IV and forms part of this Report. All Related Party Transactions that were entered into during the financial year were at arm's length and were in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee and the Board of Directors for their approval. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the Listing Agreement. The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The Company in the ordinary course of its business, enters into transactions for purchase and sale of goods, materials & services, other obligations from 'Related Parties' within the meaning Section 2(76) of the Act and Clause 49(VII) of the Listing Agreement. The current and the future transactions are/will not be deemed to be 'material' in nature as defined in the Act & Clause 49(VII) of the Listing Agreement as they do not exceed 10 per cent of the annual turnover of the Company based on future business projections. Thus, in terms of Clause 49(VII)(E) of the Listing Agreement, these transactions do not require approval of the members by way of a Special Resolution. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board has been adopted by the Company and uploaded on the Company's website at the link: <http://www.themismedicare.com/wp-content/> uploads/2015/08/Related-Party-Policy.pdf. The details of the transactions with related parties are provided in the accompanying financial statements. n. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS: The Internal Financial Controls with reference to financial statements as designed and implemented by your Company are adequate. During the year under review, no material or serious observations were received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. 0. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL: The Company has, as stated elsewhere in the Report, filed an application with Hon'ble Company Law Board, Regional Bench, Mumbai, seeking extension for repayment of deposits of members & promoters of the Company. The Board is pleased to inform you that the Hon'ble Company Law Board, Regional Bench, Mumbai has approved extension as sought by the Company under order no. CA. No. 17/74(2)/CLB/ MB/2015/2703 dated 19th May, 2015. p. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013: The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. q. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013: The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. r. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013: As per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and other applicable Regulations, details of equity shares issued under Employees Stock Option Scheme during the financial year under review is furnished in Annexure V attached herewith which forms part of this Report. s. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013: During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished. 2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL: The members at its Meeting held on September 29th, 2014, had appointed Mr. H. N. Sinor, Mr. Humayun Dhanrajgir, Mr. Vijay Agarwal, Mr. H. Subramaniam & Ms. Dharmishtaben Raval as Independent Directors of the Company for a term of five years effective from 29-09-2014. Mr. Prakash D. Naringrekar, was appointed as Key Managerial Person designated as Chief Financial Officer & Company Secretary of the Company with effect from 3rd April, 2014 for a period of three years. None of the Directors of the Company has resigned as Director during the year under consideration. The members had approved appointment of Dr. Dinesh S. Patel as Managing Director & Chief Executive Officer and Dr. Sachin D. Patel, Whole Time Director (Deputy Managing Director) of the Company with effect from 29th June, 2010 for a period for 5 years at the 40th Annual General Meeting held on 25th June, 2010. The term of appointment for Dr. Dinesh S. Patel and Dr. Sachin D. Patel ended on 28th June, 2015. Subject to the approval of the members, the Board of Directors has re-appointed Dr. Dinesh S. Patel as Managing Director & Chief Executive Officer and Dr. Sachin D. Patel, Whole Time Director (Deputy Managing Director) of the Company for a further period of 5 years with effect from 29th June, 2015. Necessary resolutions for the re-appointment of the aforesaid Directors have been included in the Notice convening the ensuing AGM and details of the proposal for re-appointment are mentioned in the Explanatory Statement to the Notice. 3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES a. BOARD MEETINGS: The Board of Directors met 7 times during the financial year ended 31st March, 2015 in accordance with the provisions of the Companies Act, 2013 and rules made there under. b. DIRECTOR'S RESPONSIBILITY STATEMENT: In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2015, the Board of Directors hereby confirms that: i. in the preparation of the annual accounts, the applicable accounting standards had been followed and there is no material departures according to the accounting standards; ii. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for that year; iii. proper and sufficient care was taken 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; iv. the annual accounts of the Company have been prepared on a going concern basis; v. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively ; vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. c. NOMINATION AND REMUNERATION COMMITTEE: The Nomination and Remuneration Committee of Directors is constituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Act. The composition of the committee is as under: i. Mr. Vijay Agarwal, Chairman, ii. Mr. Humayun Dhanrajgir, Member and iii. Mr. H. Subramaniam, Member. The Board has in accordance with the provisions of Sub-Section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, are as under: • Minimum Qualification • Positive Attributes • Independence • Experience d. AUDIT COMMITTEE: The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said Section. The Audit Committee comprises of: i. Mr. Humayun Dhanrajgir, Chairman, ii. Mr. H. N. Sinor, Independent Director iii. Mr. Vijay Agarwal, Independent Director and iv. Dr. Dinesh S. Patel, MD & CEO The scope and terms of reference of the Audit Committee is in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee. e. STAKEHOLDERS RELATIONSHIP COMMITTEE: During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company has constituted the Stakeholder's Relationship Committee, comprising of Mr. H. Subramaniam, Dr. Sachin D. Patel and Mr. Rajneesh Anand. Mr. H. Subramaniam has been appointed as the Chairman of the Stakeholders' Relationship Committee w.e.f. 6th August, 2014. The Company Secretary acts as the Secretary of the Stakeholders' Relationship Committee. f. VIGIL MECHANISM POLICY/ WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES: The Board of Directors of the Company has, pursuant to 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, framed "Vigil Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. The employees of the Company have the right/ option to report their concern/grievance to the Chairman of the Audit Committee. The said Policy is available on the website of the Company at <http://www.themismedicare.com/> wp-content/uploads/whistle-blower-policy.pdf The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. g. RISK MANAGEMENT: We have an integrated approach to managing risks inherent in various aspect of our business. h. CORPORATE SOCIAL RESPONSIBILITY POLICY: As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee as under: i. Ms. Dharmishtaben Raval, Chairperson, ii. Mr. H. Subramaniam, Member and iii. Dr. Sachin D. Patel, Member As the Company is not crossing thresh hold limit for CSR spending, the Board of Directors of the Company has not framed CSR Policy as recommended by the CSR Committee. i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD: Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. Schedule IV of the Companies Act, 2013 states that the performance evaluation of the Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated. A statement indicating the manner for evaluation of performance of the Board and its committee, individual Directors is attached with the Board Report as Annexure VI and forms part of this Report. j. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014: The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review has been marked as Annexure VII. k. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES: None of the managerial personnel i.e. Managing Director and Whole time Directors of the Company are in receipt of remuneration/commission from the Holding or Subsidiary Company of the Company. 4. AUDITORS' REPORTS: a. APPOINTMENT OF AUDITORS: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M. T. Ankleshwaria & Co., Chartered Accountants (Reg. No. 100501W), the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting. The consent of the Auditors along with certificate under Section 139 of the Act have been obtained from the Auditors to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company. The Board recommends the appointment of M. T. Ankleshwaria & Co., Chartered Accountants as the Statutory Auditors of the Company. Necessary resolution for reappointment of the said Auditors is included in the Notice of AGM for seeking approval of members. b. COST AUDITORS: Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/ Circulars issued by the Ministry of Corporate Affairs from time to time, as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 27th May, 2015, appointed B. J. D. Nanabhoy & Co., Cost Accountants (Reg. No. 0011) as the Cost Auditors of the Company for the financial year 2015-16 for the applicable Product Groups covered under the Notification dated 31st December, 2014 The Company received the approval of the Central Government for the said appointment. The Cost Audit Report will be filed within the stipulated period of 180 days from the closure of the financial year. 5. OTHER DISCLOSURES Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: a. EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure VIII which forms part of this Report. b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure IX which forms part of this Report. c. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section II of Schedule V): Report on Corporate Governance and Certificate of Auditors of your Company regarding compliance of the Conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed as a separate section and a part of this report. d. Prevention of Sexual Harassment: We have zero tolerance for sexual harassment at workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of Complaints of Sexual Harassment at workplace. During the year financial year ended 31st March, 2015 your Company has not received any complaint related to sexual harassment. 6. MANAGEMENT DISCUSSION & ANALYSIS: a. Operational Overview: Themis constantly reviews its product market portfolio with the view to sustain its growth. The Company has driven fiscal growth by focusing on the following areas. • Development of innovative - first-of-a-kind products to establish itself in India and Globally. • Establish sound long-term partnerships with Indian and International companies to expand business • Development of a stronger manufacturing infrastructure. • Creation of a superior Management Information System. • Up-gradation, Expansion, Modernization of existing manufacturing facilities. • Obtaining of international approvals for its plants. • Establishment of Marketing Divisions as per therapeutic segments. • During the year under review, relations with labour remained as it were last year. 7. ACKNOWLEDGEMENTS AND APPRECIATION: Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. For and on behalf of the Board of Directors H. N. Sinor Chairman Place: MUMBAI. Dated: 27th May, 2015 |