To the Members,
The Directors present their 33rd Annual Report on the business and operations of the Company and the financial statements for the year ended March 31, 2024.
1. FINANCIAL HIGHLIGHTS
Rs. in Crores
2. OPERATIONS REVIEW /PERFORMANCE
The Company has, on standalone basis, registered total revenue from operations of Rs. 625.09 Crores (Total Income Rs. 730.93 Crores) during the year under review as against Rs. 528.61 Crores (Total Income Rs. 627.61 Crores) in the previous Financial Year. The Profit After Tax was Rs. 283.71 Crores during the year under review as against Rs. 234.26 Crores in the previous Financial Year. The Company has on consolidated basis, registered total revenue from operations of Rs. 1,694.10 Crores (Total Income Rs. 1,761.04 Crores) during the year under review as against Rs. 1466.73 Crores (Total Income Rs. 1,522.71 Crores) in the previous Financial Year.
3. MANAGEMENT DISCUSSION & ANALYSIS AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) separate section on Management Discussion & Analysis, as approved by the Board, which includes details on the state of affairs of the Company along with operational performance / review, forms part of this Report. The Business Responsibility and Sustainability Report of the Company for the year ended March 31, 2024, as approved by the Board, is provided in a separate section and forms part of this Report and is also made available on the website of the Company at https:// www.caplinpoint.net/index.php/annual-report/.
4. DIVIDEND
The Board of Directors at their Meeting held on May 16, 2024, declared an Interim Dividend of Rs. 2.50 (125%) per equity share of Rs. 2/- each, for the Financial Year 2023-24 and it was paid to those shareholders whose name appeared in the Register of Members and beneficial owners as on the record date i.e May 31, 2024.
Further, the Board of Directors, at their meeting held on August 7, 2024, have recommended a Final Dividend of Rs. 2.5 (125%) per equity share of Rs. 2 /- each, for the Financial Year 2023-24, subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM). If approved, the total dividend for the Financial Year 2023-24 would amount to Rs. 5/- per equity share (250%) of Rs. 2/- each.
In compliance with Regulation 43A of the Listing Regulations, the Dividend Distribution Policy is uploaded on the Company's website at https://www.caplinpoint.net/wp-content/uploads/2021/07/ Dividend Distribution Policv.pdf
5. TRANSFER TO RESERVES
The Board of Directors have decided to retain the entire amount of profits for the Financial Year 2023-24 in profit and loss account.
6. SUBSIDIARIES/ASSOCIATES
During the Financial Year, there were no material development in the status of subsidiary companies. Nuevos Eticos Neo Ethicals
S.A - Guatemala, Caplin Steriles Limited and Caplin Point Far East Limited, Hong Kong continue to be the material subsidiaries of the Company. Further during the year, Caplin Steriles Limited, a subsidiary of the company had incorporated a Wholly-Owned Subsidiary, Caplin Steriles USA Inc. in Delaware, on August 18, 2023. For the FY 2023-24, the financials of Caplin Steriles USA Inc has been consolidated with the Financial Statements of the company.
Pursuant to Section 129(3) of the Act, 2013, a statement containing the salient features of the financial statements of subsidiaries in the prescribed Form AOC-1 is annexed as Annexure - I to this Report.
7. CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Act, 2013 and Listing Regulations, the Consolidated Financial Statements prepared in accordance with the Indian Accounting Standards, are attached to this report. The Consolidated Financial Statements along with relevant documents and separate audited Financial Statements in respect of the subsidiaries are available on the website of the Company.
8. DEPOSITS
The Company did not accept any deposits from the public within the meaning of Chapter V of the Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2024.
9. SHARE CAPITAL
The paid up share capital as on March 31, 2024 stood at Rs. 15,18,83,492 /- consisting of 7,59,41,746 equity shares of Rs. 2/- each.
During the Financial Year the company had allotted 39,000 shares under various ESOP Schemes.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT, 2013
Particulars of loans, guarantees and investments as on March 31, 2024 are given in the Note No. 3A, 4 and 8 to the Standalone Financial Statements.
11. NUMBER OF MEETINGS OF THE BOARD
The Board of Directors of the Company met 4 (four) times during the year under review. The dates of the Board meeting and the attendance of the Directors at the said meetings are provided in the Corporate Governance Report, which forms part of this Report.
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. Directors
As on March 31, 2024, Board comprised of six Directors out of which four are Independent Directors (including an Independent Woman Director) a Managing Director and one Promoter Director.
Mr. C C Paarthipan is a Promoter Director who is also the NonExecutive Chairman of the company. Dr. Sridhar Ganesan is the Managing Director of the Company. Dr R Nagendran (DIN: 08943531), Mr. S Deenadayalan (DIN: 01951620) Dr. C K Gariyali (DIN: 08711546) and Mr. D. Sathyanarayanan (DIN: 07650566) are the other Independent Directors on the Board.
Mr. R Viswanathan (DIN: 07173713 ) ceased to be an Independent Director on the Board with effect from the close of business hours of May 11, 2023 as he had served the maximum tenure permitted for an Independent Director.
Mr. D Sathyanarayanan (DIN: 07650566) will cease to be an Independent Director with effect from November 8, 2024 as he had served the maximum tenure permitted for an Independent Director. To meet the requirement of Board Composition under the Listing Regulations, the Board, on the recommendation of the Nomination and Remuneration Committee, had proposed, for the approval of shareholders at the forthcoming AGM, the induction of Mr R Vijayaraghavan (holding DIN: 00026763), as an Independent Director of the Company. In the opinion of the Board and the Nomination and Remuneration Committee, Mr R Vijayaraghavan is eligible and qualified to be appointed as an Independent Director. He is proposed to be appointed for a period of five years from the date of AGM. During this tenure Mr R Vijayaraghavan will cross seventy-five years of age. Suitable justification for inducting him in the Board is given as part of the AGM Notice. Mr R Vijayaraghavan has submitted all the relevant declarations which were taken on record by the Nomination and Remuneration Committee and the Board.
During the year, the shareholders had approved the re-appointment of Dr. C K Gariyali as an Independent Director for a second term of three years w.e.f from March 04, 2023.
b. Company Secretary and Compliance Officer
Mr. Venkatram G is the Company Secretary & Compliance Officer of the Company.
c. Retirement by rotation
Pursuant to Section 152 (6) of the Act, 2013, Dr. Sridhar Ganesan (DIN: 06819026), Managing Director, retires by rotation and being eligible offers himself for re-appointment.
d. Key Managerial Personnel (KMP)
Dr. Sridhar Ganesan, Managing Director, Mr. D Muralidharan, Chief Financial Officer and Mr. Venkatram G, Company Secretary & Compliance Officer are the KMP's of the Company. The tenure of Dr. Sridhar Ganesan as Managing Director ends on August 24, 2024. The Board of Directors at their meeting held on August 07, 2024 had re-appointed him for further term of two years subject to the shareholders' approval which is being sought in the forthcoming AGM.
13. DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Act, 2013, all Independent Directors have declared that they meet the criteria of independence as provided under the Act, 2013 and Listing Regulations and the
Board confirms that they fulfil the conditions specified under the Act and the Listing Regulations and are independent of the management.
14. CRITERIA FOR APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
The Company's selection process of the Directors involves the Nomination and Remuneration Committee identifying the persons of integrity who bring in a mix of expertise in varied fields, experience and leadership qualities as per the Board Diversity policy and also ensures positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. Details of Remuneration and the policy on Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel is provided as part of the Corporate Governance report and the policy is available at https://www.caplinpoint.net/wp-content/ uploads/2021/07/Nomination-and-Remuneration-Policv.pdf
15. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act, 2013 and Listing Regulations, the Board of Directors has carried out annual performance evaluation of its own performance, the Directors Individually, as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report which forms part of this report.
16. BOARD COMMITTEES
The Company has formed all the statutory Committees namely, the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Stakeholders' Relationship Committee and the Risk Management Committee.
Detailed information about these Committees and relevant information for the year under review are given in the Corporate Governance Report. There have been no instances where the Board did not accept the recommendations of its Committees including the Audit Committee.
17. DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards (IND AS) 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 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 March 31, 2024 and of the profit 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 the Act, 2013 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
18. STATUTORY COMPLIANCE
During the year under review, the Company has commenced the automation of the process of compliance management by implementing a tool to review and monitor all compliances with laws applicable to the respective functions across all the units. To take care of the continuously evolving compliance scenario, the Company is constantly striving to strengthen the compliance reporting framework.
19. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments, affecting the financial position of the Company, which have occurred between
the end of the Financial Year of the Company to which the financial statements relate and the date of the report.
20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to Section 134 (3)(m) of the Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as are given as Annexure - II to this Directors' Report.
21. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted CSR Committee and based on its recommendations, the Board had formulated the CSR Policy. During the year under review, the Company, through Caplin Point Meenakshi CSR Trust (‘CSR Trust'), had commenced the construction of a Hospital- cum-Diagnostic centre including in-house pharmacy subsuming the CSR budgets for ongoing projects from the previous Financial Years. Since Healthcare is one of the fundamental area of attention under the Company's CSR Policy and also because the CSR budget for the earlier Financial Years included the setting up of Healthcare Facility, the CSR Committee and the Board felt it appropriate to focus the CSR efforts of the Company on the construction of the Hospital, which will serve the people at the bottom of the pyramid. The land and building of the Company situated at No. 19, Chinnapuliyur Village, Sirupuzhalpettai (Post), Gummidipoondi Taluk, Tamil Nadu - 601 201, which has been leased to the CSR Trust at a nominal cost by the company, shall be utilised by the CSR Trust for setting up the Hospital-cum-Diagnostic centre.
Disclosure under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - III to this report.
22. INTERNAL FINANCIAL CONTROLS
The Company has established adequate internal controls framework comprising of policies, procedures, and mechanisms surrounding operational efficiency, minimising risks, and supporting decisionmaking and accountability. Details in respect of adequacy of internal financial controls concerning the financial statements are stated in the Management Discussion and Analysis section which forms part of this Report.
23. VIGIL MECHANISM
The Company is committed to ethical conduct of business and towards this had empowered the employees and other stakeholders to report any unethical practices without fear of any repercussion. The details of the Whistle Blower Policy and the mechanism are given in the Corporate Governance Report which forms part of this report.
24. AUDITORS
a. Statutory auditors
The Audit Committee and the Board at their meeting held on August 07, 2023 had recommended and the Shareholders at their 32nd AGM held on 21st September 2023 had approved the appointment of M/s Brahmayya & Co, Chartered Accountants, (Firm Registration No. 000511S) Chennai, as Statutory Auditors of the Company to hold office from the conclusion of 32nd AGM till the conclusion of 37th AGM.
The Auditor's Report for the Financial Year 2023-24 has been issued with an unmodified opinion.
b. Secretarial auditors
M/s. Alagar and Associates was appointed as the Secretarial Auditors of the Company for the Financial Year March 31, 2024. The Secretarial Audit Report for the Financial Year 2023-24, given by M/s. Alagar and Associates, Company Secretaries, Chennai is attached as Annexure - IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.
Pursuant to Regulation 24A of Listing Regulations, the company shall annex with its Annual Report the Secretarial Audit Report of its material unlisted subsidiary incorporated in India. Caplin Steriles Limited being a material unlisted subsidiary of the Company, the Secretarial Audit Report is annexed as Annexure - IV-A to this Directors Report.
c. Internal auditors
The Board had re-appointed M/s. TBL & Associates as Internal Auditors for carrying out internal audit of the Company, for the Financial Year 2023-24. The internal audit for the Financial Year
2023-24 was completed as per the scope defined by the Audit Committee.
25. REPORTING OF FRAUDS BY AUDITORS
The Statutory Auditors, Internal Auditors and the Secretarial Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
26. CORPORATE GOVERNANCE
Pursuant to Regulation 34 of Listing Regulations, a Report on Corporate Governance is given separately which forms part of this Report.
27. ANNUAL RETURN
The Annual Return in Form MGT-7 for FY 2022-23 is uploaded on the website of the Company and can be accessed at https://www. caplinpoint.net/wp-content/uploads/2022/06/CPL MGT 7 2023.pdf.
28. RISK MANAGEMENT
The Company has constituted a Risk Management Committee in compliance with the requirements of Regulation 21 of the Listing Regulations. The details of this Committee and its terms of reference are set out in Corporate Governance Report, which forms part of this Report.
29. EMPLOYEE STOCK OPTION PLAN
The Company has three stock option schemes in force (i.e) Caplin Point Employee Stock Option Plan - 2015, Caplin Point Employee Stock Option Plan - 2017 and Caplin Point Laboratories Limited Employees Stock Option Plan - 2021. Out of the total options granted, 3,73,821 options are outstanding as on March 31, 2024 across all the Schemes. 3,91,746 equity shares had been allotted so far pursuant to exercise of Options. The details as required under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as on March 31, 2024 is available at https://www.caplinpoint. net/index.php/shareholder-information/
The Company believes that equity based compensation schemes are an effective tool to reward the employees who contribute to the growth of the Company, to attract new talents, to retain the key resources in the organisation and for the benefit of the present and future employees of the Company and its subsidiaries.
30. EMPLOYEES RELATED DISCLOSURES
The statements required under Section 197, of the Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of Annexure - V to this Report.
31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the related party transactions are at arm's length basis and were approved by the Audit Committee. Those transactions that are not in the normal course of business are approved by the Board in addition to Audit Committee and, if material, are taken to shareholders for approval.
All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are planned/ repetitive in nature. Related Party Transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. All the Related Party Transactions have been disclosed in Note No. 44 to the Standalone Financial Statements forming part of this Annual Report.
Particulars of transactions with related parties, in prescribed form AOC-2 is enclosed as Annexure - VI to this Report.
The related party transaction policy and material related party transactions have been uploaded on the website of the Company at https://www.caplinpoint.net/wp-content/uploads/2021/07/Related- Partv-Transaction-Policv.pdf
32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.
33. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to the provisions of Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on Prevention of Sexual Harassment at Workplace and Internal Complaints Committees (ICC) has been set up to redress complaints. There were no complaints relating to sexual harassment, pending at the beginning of Financial Year, received during the year and pending as at the end of the Financial Year 2023-24.
34. INVESTOR EDUCATION AND PROTECTION FUND
During the year under review, the Company has credited 1,13,725 unclaimed equity shares of Rs. 2/- each to IEPF pertaining to those shareholders who have not encashed/claimed their dividends for a period of seven consecutive years. The voting rights on the shares outstanding in the IEPF Authority as on March 31, 2024 shall remain frozen till the rightful owner of such shares claims the shares.
Pursuant to Sections 124 and 125 of the Act, 2013, the unpaid or unclaimed dividend for the Financial Year 2016-17(final) has to be transferred to IEPF. Members, who have not yet en-cashed or claimed the dividends that are yet to be transferred to the IEPF, are requested to refer the Corporate Governance Report.
35. OTHER DISCLOSURES
a. There has been no change in the nature of business of the Company during the year under review.
b. Pursuant to Section 197 (14) of the Act, 2013, the Managing Director of the Company did not receive any remuneration or commission from any of its subsidiaries.
c. The Company maintains cost records as per Companies (Cost Records and Audit) Rules, 2014.
d. The Board confirms the compliance with the provisions of the Secretarial Standards notified by the Institute of Company Secretaries of India, New Delhi.
e. There were no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016.
f. There was no instance of any one-time settlement or any requirement of a valuation for any loan from the banks or financial institutions during the year
36. ACKNOWLEDGEMENT
The Board of Directors wishes to place on record its sincere appreciation to the customers, suppliers, business partners and shareholders for their support. The Directors would like to thank the Bankers and financial Institutions as well. The Directors would take this opportunity to appreciate and sincerely acknowledge the dedication and hard work of the employees for the growth of the Company.