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We present you the Thirty–Eighth Annual Report on business and operations along with the audited financial statements and the auditor’s report of your Company for he financial year ended March 31, 2016.
Standalone and Consolidated Financial Statements
The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act 2013 (“the Act”) read together with paragraph 7 of the Companies (Accounts) Rules, 2014, to reflect the financial position and results of operations of Biocon together with its subsidiaries and associate. The financial statements of FY16 together with Auditor’s report forms part of this Annual Report.
Further, a statement containing the salient features of the financial statements of our subsidiaries pursuant to subsection 3 of Section 129 of the Companies Act, 2013 in the prescribed Form AOC–1 is appended as Annexure 1 to the Board’s report. The statement also provides the details of performance and financial positions of each of the subsidiaries.
The highlights of the Company’s standalone performance are as under:
Revenue from operations grew by 4% to Rs. 23,236 mn. Other Income for FY 16 grew to Rs. 1,841 mn (FY 15 Rs. 1,491 mn) due to foreign exchange gain on account of rupee depreciation. Interest on fixed deposits and dividend on mutual funds increased by Rs. 364 mn, which was offset by lower dividend from subsidiaries (FY16 Rs. 487mn vs FY15 Rs. 997mn). Core operating margins (EBIDTA excluding R&D, Forex, and dividend from subsidiaries) improved by 100 basis points from previous year due to favorable product mix.
o During the current year, the Company recorded gain from sale of equity shares of Syngene through an IPO, net of related expenses and cost of equity shares, amounting to Rs. 5,131 mn. The tax impact on this gain was Rs. 1,042 mn.
o During the year, Company recorded gain of Rs. 99 mn on sale of its equity investment in Biocon SDN. BHD. to its wholly owned subsidiary Biocon Biologics Limited.
Tax on such gain was Rs. 21 mn.
Profit after tax (PAT) for the year stood at Rs. 8,088 mn up 124% from FY 15. PAT excluding exceptional income, net of tax, was Rs. 3,921 mn, (FY 15 Rs. 3,830 mn).
Effective tax rate for the year was 20% due to minimum alternate tax (MAT) on exceptional income.
During the year, our consolidated revenues registered a growth of 14% to Rs. 35,699 mn from Rs. 31,429 mn in FY 15. From a segment perspective, the core biopharmaceutical segment recorded a growth of 7% while the research services business registered a year on year increase of 29%. While, business challenges in branded formulations saw modest growth in the biopharmaceutical segment, the performance in the research services segment was driven by strong orders and capacity expansion.
Consolidated PAT grew by 80% from Rs. 4,974 mn to Rs. 8,961 mn primarily on account of exceptional gain on sale of shares in Syngene through an offer for sale (IPO) and release of amounts from deferred balances which are explained in detail under the section Management Discussion and Analysis.
A detailed performance analysis is provided in the Management Discussion and Analysis segment which is annexed to this report.
On March 11, 2016, the Board of Directors announced an interim dividend of 5.0 (100%) per equity share for FY16, entailing a pay–out of Rs. 1,107 mn (including dividend distribution tax). The Interim dividend has been subsequently paid to all eligible shareholders and no further dividends are proposed/recommended by the Board.
Transfer of Unpaid and Unclaimed Amounts to IEPF
Pursuant to the provisions of Section 205C of the Companies Act, 1956 and Section 124(5) of the Companies Act, 2013, dividend which remains unpaid or unclaimed for a period of seven years from the date of its transfer to unpaid dividend account is required to be transferred by the Company to Investor Education and Protection Fund (IEPF), established by the Central Government under the provisions of Section 125 of the Companies Act, 2013. The details of any unpaid dividend amounts as per Section 125(2) of the Companies Act, 2013 have to be identified and uploaded on the website of the Company. Accordingly, unclaimed dividends up to the financial year 2007–08 have been transferred to IEPF by the Company.
Employee Stock Option Plan (ESOP)
The Company has an Employee Stock Option Plan (‘ESOP’) which is administered by the Nomination & Remuneration Committee for the benefit of employees of the Group, through Biocon India Limited Employees Welfare Trust (‘Trust’). The details of stock options granted and outstanding are provided in Annexure 2 to the Board’s Report.
There is no material change in the Employee Stock Option Schemes during the financial year under review and Employee Stock Option Schemes are in compliance with
Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014.
The Company propose to roll out new grants under ESOP plan – Grant IX for the eligible new joiners and Grant X for the eligible existing employees and proposes to discontinue future grants under existing Grants.
The Company has not accepted any fixed deposits from public.
Loans, Guarantees or Investments
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements.
The Company has formulated a policy for determining ‘material’ subsidiaries pursuant to the provisions of the Listing Agreement. The said policy is available at the Company website http://www.biocon.com/docs/PolicyDocument_MaterialSubsidiary.pdf
The Company has 8 subsidiaries and 2 step down subsidiaries as on March 31, 2016. Biocon FZ–LLC, a wholly owned subsidiary was incorporated on June 16, 2015 in Dubai. Biocon Biologics Limited, a wholly owned subsidiary was incorporated on March 2, 2016 in the United Kingdom. Biocon Pharma Inc, was incorporated on July 27, 2015 in the United States of America as a wholly owned subsidiary of Biocon Pharma Limited.
A report on the performance and financial position of each of the subsidiaries is presented below. The financial statements of the subsidiaries will be made available on the website of the Company, post approval by the members.
Syngene International Limited
Syngene International Limited (“Syngene”) is one of India’s leading contract research organisations offering a suite of integrated, end–to–end discovery and development services for novel molecular entities (NMEs) across industrial sectors including pharmaceutical, biopharmaceutical, and biotechnology amongst others. Syngene helps its clients in conducting discovery (from hit to candidate selection), development (including pre–clinical and clinical studies, analytical and bio–analytical evaluation, formulation development and stability studies) and pilot manufacturing (scale–up, pre–clinical and clinical supplies) each with distinctive economic advantage. Unlike the traditional business models, these services are offered through flexible business models ranging from a full–time equivalent (“FTE”) to a fee–for–service (“FFS”) model or a combination customized on the client’s specific requirement.
During the year ended March 31, 2016, Syngene registered a revenue growth of 28% to Rs. 11,131 mn in FY 16 (FY 15 Rs. 8,716 mn). EBIDTA margin for the year was 33%, with the operational margin at Rs. 3,639 mn (FY 15 Rs. 2,928 mn), a growth of 24%.
On August 11, 2015 Syngene’s shares were listed on the NSE and the BSE after a successful Initial Public Offering (IPO) through an offer for sale by the Company.
Biocon Research Limited
Biocon Research Limited (BRL), a 100% subsidiary of the Company, undertakes discovery and development research work in biologics and provides scientific support for various development programmes of the group.
BRL’s current business is largely directed towards the R&D services for Monoclonal antibody molecules and Proteins (mAbs), insulin Tregopil (formally referred to as IN– 105) and other insulin products on behalf of other group companies. The research programs undertaken by BRL have made significant inroads to the next level of global clinical trials. During the year, BRL licensed the ex–India development and commercialisation rights of its existing mAbs portfolio to Biocon Biologics Limited (‘BUK’). BRL continues to hold 0.93% shareholding in Syngene.
During FY16, BRL registered a turnover of Rs. 4,097 mn, which includes licensing of development and commercialisation rights of mAbs to BUK for a consideration of Rs. 2,820 mn and reported a net profit of Rs. 669 mn.
Biocon Pharma Limited
Biocon Pharma Limited (“BPL”) is a wholly owned subsidiary of the Company. BPL would be engaged in the development and manufacture of generic formulations for sale in global markets, especially opportunities in US/EU. BPL is in the process of setting up its formulations manufacturing facility for oral solid dosages at Biocon SEZ, Bengaluru. As at March 31, 2016, BPL had not commenced commercial operations.
Biocon Academy spearheads Biocon’s CSR initiatives in the technical/professional education segment. The academy was established as a Centre of Excellence for Advanced Learning in Biosciences in 2014. Biocon Academy leverages rich industry experience of Biocon and subject matter expertise of international Education Partners such as Keck Graduate Institute of Claremont, California (USA). The academy is dedicated exclusively to industry oriented biosciences education. The programs offered by the academy aim to empower the Biotechnology and Engineering graduates with advanced learning and industrial proficiency through job–skills development essential to build a promising career in the Biotech industry.
Biocon SA, a wholly owned subsidiary of the Company, is primarily engaged in the business of development and commercialization of generic recombinant human insulin and its analogues for global markets under various internal as well as partnered programs. Biocon SA also holds the marketing rights for the group’s insulin portfolio.
Biocon SA is also in the business of identifying and developing other novel molecules into commercial products or licensable assets through strategic partnerships. For the current year, Biocon SA registered net profit of Rs. 1,229 mn after exceptional items. Net profit excluding exceptional items grew to Rs. 43 mn (FY 15 Net loss of Rs. 124 mn), due to higher licensing revenues.
Exceptional item comprises of
(a) an amount of Rs. 2,561 mn released from deferred balance pursuant to contract with Laboratories PiSA S.A. de C.V (PiSA) of Mexico for the co–development and commercialization of generic recombinant human insulin (rh–insulin) for the US market.
(b) impairment charge of Rs. 1,078 mn of the marketing rights of T1H product for US and Canada region (‘Territory’) due to uncertainties over commercialisation of the products in the Territory owing to OFAC sanctions. The exceptional items are more fully explained in Note 40 of the consolidated financial statements. During the year, Biocon SA sold equity shares held in Biocon SDN. BHD., Malaysia to BUK.
Biocon SDN. BHD
Biocon SDN. BHD., Malaysia is a step down subsidiary of the Company, wholly owned by BUK. Biocon SDN. BHD. was established with an objective to set up the group’s first overseas manufacturing facility at Malaysia. It is located within BioXcell, a biotechnology park in Nusajaya, Johor, which is being promoted by the Malaysian Government. The first phase of the facility, designed to manufacture recombinant human insulin and insulin analogs has been commissioned and a series of operational processes – scale up, validation, and stability activities were performed in FY 2015–16. The manufacturing facility received local cGMP certification from the National
Pharmaceutical Control Bureau, Malaysia and the plant is currently undergoing a series of validation activities to certify its operational efficiency. Biocon SDN BHD will seek approvals from leading regulatory agencies across the globe for marketing its products in various RoW during FY’17. Approval from the developed markets are expected in the later years. As at March 31, 2016, Biocon SDN. BHD. has not commenced commercial operations. The Malaysian facility is expected to start commercial operations in the second half of FY17. Cost incurred in the profit and loss statement for the year was Rs. 94 mn after capitalisation of expenses amounting to Rs. 1,027 mn (including foreign exchange loss) to fixed assets. Total debt on balance sheet date is Rs. 10,810 mn. Neo Biocon FZ LLC
Neo Biocon FZ LLC (“NeoBiocon”), a 51% owned subsidiary of the Company is a research and marketing pharmaceutical company, which was incorporated in January 2008. Operating out of Dubai and Abu Dhabi, NeoBiocon helps us reach out to the Middle East and GCC with our veritable portfolio of quality small molecule drugs. For FY16, Neo Biocon earned Rs. 1,196 mn in revenues and reported a net profit of Rs. 425 mn, a growth of 30% and 22% respectively over FY15.
Biocon FZ –LLC
Biocon FZ LLC is a wholly owned subsidiary of the Company based in Dubai. Incorporated in June 2015, Biocon FZ LLC has been established as a marketing entity for pharmaceutical products to target markets in the Middle East and GCC. As of March 31, 2016 Biocon FZ LLC earned Rs. 11 mn as revenue and reported a net profit of Rs. 3 mn.
Biocon Biologics Limited
Biocon Biologics Limited (“BUK”) is a wholly owned subsidiary of the Company. Incorporated in the United Kingdom in March 2016, BUK will house Biocon’s biosimilar biologics business. During the year, BUK acquired the shareholding of Biocon SDN. BHD. from Biocon SA and the Company, making Biocon SDN. BHD. a wholly owned subsidiary of BUK. As of March 31, 2016, BUK earned Rs. 196 mn as revenue and reported a net profit of Rs. 71 mn.
Biocon Pharma Inc.
Biocon Pharma, Inc. (“BPI”) is a wholly owned subsidiary of Biocon Pharma Limited was incorporated in July 2015 in the United States of America. BPI would be engaged in commercialization of generic formulations in the United States. As of March 31, 2016, BPI had not commenced commercial operations.
Management’s discussion and analysis
Management’s discussion and analysis forms a part of this annual report and is annexed to the Board’s report.
We strive to maintain high standards of Corporate Governance in all our interactions with our stakeholders. The Company has conformed to the Corporate Governance code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance along with a certificate from the auditors confirming the level of compliance is attached and forms a part of the Board’s Report.
Policy on Directors’ appointment and remuneration
As on March 31, 2016, the Board consists of 9 (nine) members, of which 5 (five) are independent and non–executive. An appropriate mix of executive and independent directors ensures greater independence of the Board.
The policy of the Company on director’s appointment and remuneration, including criteria for determining qualifications, independence and other matters as provided under sub–section (3) of Section 178 of the Companies Act, 2013 is appended in Annexure 3 to the Boards’ Report.
A diverse Board enables efficient functioning through differences in perspective and skill, and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. The Board recognises the importance of a diverse composition and has adopted a Board Diversity Policy which sets out the approach to diversity. The policy is available at http://www.biocon.com/docs/PolicyDocument_BoardDiversity.pdf
Declaration by Independent Directors
A declaration of Independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the independent directors of the Company.
We at Biocon believe in striving and excelling against contenders not only through products and initiatives but also through effective and efficient Board monitoring. As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, an evaluation of all the directors, the Board as a whole and its committees was conducted based on the criteria and framework adopted by the Board.
The details of the said evaluation has been enumerated in the Corporate Governance Report, which is annexed to the Boards’ Report.
On the recommendation of the Nomination and Remuneration Committee, Mr. M. Damodaran was inducted to the Board as independent members of the Board effective April 26, 2016.
A brief profile of Mr. M. Damodaran proposed for appointment is available in the Notice convening the Annual General Meeting. The Board recommends his appointment as a Director at the ensuing Annual General Meeting.
Retirement and Re–appointments
Dr. Arun S. Chandavarkar, shall retire by rotation at the ensuing Annual General Meeting and is eligible for re–appointment.
Committees of the Board
The details of Boards Committees – the Audit & Risk Committee, the Nomination and Remuneration Committee, Corporate Social Responsibility Committee and the Stakeholders Relationship Committee have been disclosed separately in the Corporate Governance Report which is annexed to and forms a part of this annual report.
Audit & Risk Committee
The Audit & Risk Committee comprises Mr. Russell Walls, Chairman, Mr. Daniel M Bradbury, Dr. Jeremy M Levin and Mr. M. Damodaran, independent directors. The functions performed by the Audit Committee and the particulars of meetings held and attendance thereat are given in the Corporate Governance Report.
Meetings of the Board
The meetings of the Board are scheduled at regular intervals to decide and discuss on business performance, policies, strategies and other matters of significance. The schedule of the meetings are circulated in advance, to ensure proper planning and effective participation in meetings. In certain exigencies, decisions of the Board are also accorded through circulation.
The Board during the financial year 2015–16 met six times. Detailed information regarding the meetings of the Board are included in the report on Corporate Governance, which forms part of the Board’s Report.
Related party contracts or arrangements
All transactions entered into with Related Parties as defined under Companies Act, 2013 during the year were in the ordinary course of business and on an arm’s length basis, and did not attract provisions of Section 188 of Companies Act, 2013 relating to approval of shareholders, except the transactions as mentioned in the Annexure
4 – Form No. AOC–2, which not being in ordinary course of business has been duly approved by the Board as required.
The Company has formulated a policy on “materiality of related party transactions” and the process of dealing with such transaction, which are in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is also available on the website of the Company http://www.biocon.com/docs/PolicyDocument_RelatedPartyTransaction_2015.pdf
Prior omnibus approval from the Audit Committee are obtained for transactions which are repetitive and also normal in nature. Further, disclosures are made to the Committee and the Board on a quarterly basis.
There have been no material related party transactions undertaken by the Company, under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and detail of the transaction approved by the Board under Section 188 of the Companies Act, 2013 have been enclosed pursuant to Clause (h) of subsection (3) of Section 134 of Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 – as Annexure 4 – ‘Form No. AOC–2’.
Material changes and commitments
No material changes and commitments have occurred after the close of the year till the date of this report, which affect the financial position of the Company.
Change in nature of business
There has been no change in the nature of business of the Company. Your Company continues to be a pioneer biopharmaceutical company engaged in manufacturing active pharmaceutical ingredients and formulations, including biosimilar drugs for diabetics, oncology and autoimmune diseases with sales in markets across the globe.
Significant events during the year
With effect from October 01, 2015, the Company acquired the business assets of the pharmaceutical manufacturing unit of M/s Acacia Lifesciences Private Limited based in Vishakhapatnam. The facility presently manufactures advanced intermediates of potent APIs to supply to both our ANDA business and third party customers.
The Company offered for sale 11% of its equity of Syngene International Limited through initial public offer and raised Rs. 5,500 mn. Syngene’ s equity shares got listed on both NSE & BSE.
CRISIL and ICRA continued to reaffirm their rating of “AA+/ Stable” and “A1+”, for various banking facilities throughout the year enabling your Company to avail facilities from banks at attractive rates indicating a very strong degree of safety for timely payment of financial obligations.
Conservation to energy, technology absorption, foreign exchange earnings & outgo
The particulars as prescribed under sub–section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as
Annexure 5 to the Board’s report.
The Shareholders at their 37th Annual General Meeting (AGM) held on July 24, 2015 approved the re–appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants as Statutory Auditors of the Company to hold office from the conclusion of the 37th AGM upto the conclusion of the 39th AGM to be held in the financial year 2017. Considering having served for more than a decade and the requirement of rotation of auditor as per the provisions of the new Companies Act 2013, the statutory auditors have expressed their inability to continue post the ensuing AGM to be held in the year 2016. Consequent to the above, the Audit Committee and the Board of Directors recommend the appointment of M/s. B S R & Co. LLP as Statutory Auditors of the Company from the conclusion of this 38th Annual General Meeting for a term of five years till conclusion of the 43rd Annual General Meeting to be held in financial year 2021 (subject to ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting).
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, cost audit records are maintained by the Company in respect of its manufacturing activity which are required to be audited. Your directors had, on the recommendation of the Audit Committee, appointed
M/s. Rao & Murthy to audit the cost accounts of the Company for FY16. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be determined by the members, and an approval thereof is being sought at the General Meeting.
M/s. Sreedharan & Co. was appointed to conduct the secretarial audit of the Company for FY 2015–16, as required under section 204 of the Companies Act, 2013 and rules thereunder. The secretarial audit report for FY 2015–16 forms the part of the annual report as Annexure 6 of the Board’s report.
The Board has appointed M/s. Sreedharan & Co., as secretarial auditor of the Company for FY 2016–17.
Significant and material orders
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in the future.
Extract of Annual Return
An extract of the Annual return has been annexed as Annexure 9 to the Board’s Report in compliance with Section 92 of the Companies Act 2013 read with applicable
Rules made there under.
Internal Financial Control
The Company has laid down certain guidelines, processes and structure, which enables implementation of appropriate internal financial controls across the organisation.
Such internal financial controls encompass policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. These include control processes both on manual and IT applications including the ERP application wherein the transactions are approved and recorded. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.
Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls are subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.
The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control, stated in the Guidance Note on Audit of Internal Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Whistle Blower Policy/ Vigil mechanism
The Company has implemented a Whistle Blower Policy, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.
The details of the Whistle Blower Policy are available on the website of the Company at http://www.biocon.com/docs/Biocon_Group_Integrity_Whistle_Blower_Policy.pdf
Particulars of Employees
The Statement containing ratio of remuneration paid to each director and the median employee remuneration and other details in terms of sub–section 12 of section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed in Annexure 7.
The Statement containing particulars in terms of subsection 12 of section 197 of the Companies Act 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form a part of this report.
Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.
Corporate Social Responsibility
At Biocon, CSR has been an integral part of our business since its inception. With the incorporation of Biocon Foundation in 2004, we formally structured our CSR activity.
Today we span our efforts through Biocon Foundation, Biocon Academy and some partnership programs with like–minded private organizations and Government. We promote social and economic inclusion for the marginalized communities with our integrated system focussing largely in following areas:
Health Care services: We firmly believe that the use of technology can make healthcare delivery in rural areas more efficient and therefore we have developed an integrated and holistic healthcare delivery service, which seeks to address critical gaps in the delivery of healthcare in rural India. Our efforts are targeted at enabling last mile reach of preventive and primary health services in rural areas.
Education: While our projects address experiential learning in basic maths, computer skills and language skills of the underserved young people in rural areas, we also impart advanced training necessary and skills required for gainful employment in the biopharma sector to young graduates through Biocon Academy.
Promote Art & Culture: India has a rich heritage of art and culture across the land which needs to be preserved and promoted. Our various forms of music and dance, style of paintings and sculptures have intrigued many across the globe, yet a large pool of our artistes have not gained enough recognition. Biocon Foundation believes in creating a platform to promote art & culture, encourage artists, and share this knowledge with the marginalized communities through various initiatives to help them develop a keen sense of appreciating fine arts.
Civic Infrastructure: The civic infrastructure is in deficit in the country, especially the rural India. At Biocon, we are working to build townships, schools, sanitation and water supply that can fulfil the basic needs of rural communities. We have adopted a township in North Karnataka and are also providing support infrastructure including school, safe drinking water, health centre, and community hall in nearby villages. This coupled with rain water harvesting system and solar lights, we have also built household and community toilets to enable clean sanitation facilities for the rural communities.
In compliance with the provisions of Section 135 of the Companies Act, 2013 the Board of Directors of the Company have formed a Corporate Social Responsibility Committee, which monitors and oversees various CSR initiatives and activities of the Company.
A detailed report regarding Corporate Social Responsibility is enclosed in Annexure 8 to the Board’s Report. Information under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013
The Company’s policy on prevention of sexual harassment of women provides for the protection of women employees at the workplace and for prevention and redressal of such complaints
Director’s Responsibility Statement
In compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirm the following:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The directors had 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 and loss of the Company for that period;
(c) The directors had 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) The directors had prepared the annual accounts on a going concern basis;
(e) The directors have laid down internal financial controls based on internal controls framework established by the Company, which in all material respects were adequate and operating effectively.
(f ) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. The Company has substantially complied with material provisions of such acts and regulations as are relevant for its operations.
None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Risk Management Policy
The Company has put in place an enterprise wide Risk Management Framework with an object of timely identification of risks, assessment and evaluation of the same in line with overall business objectives and define adequate mitigation strategy. On a quarterly basis, the Audit and Risk Committee reviews critical risks on a rotation basis in line with the mitigation progress/effectiveness and its impact on overall risk exposure of the Company. Annually, all critical risk areas identified are re–evaluated.
The Board greatly appreciates the commitment and dedication of its employees across all levels who have contributed to the growth and sustained success of the Company. We would like to thank all our clients, partners, vendors, investors, bankers and other business associates for their continued support and encouragement during the year.
We also thank the Government of India, Governments of Karnataka and Telangana, Ministry of Information Technology and Biotechnology, Ministry of Commerce and
Industry, Ministry of Finance, Department of Scientific and Industrial Research, Customs and Excise Departments, Income Tax Department, CSEZ, LTU Bengaluru and all other Government agencies for their support during the year and look forward to the same in the future.
For and on Behalf of the Board
Chairperson and Managing Director
Date : April 26, 2016
Place : Bengaluru,