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Brooks Laboratories Ltd Directors Report

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Jul 19, 2024|09:42:55 AM

Brooks Laboratories Ltd Share Price directors Report

The Board of Directors of your Company has pleasure in presenting the 21 Annual Report on the affairs of the Company together with the Standalone and Consolidated Financials Audited Accounts of the Company for the year ended 31+ March, 2023.

1. Financial Results

The Financial Results for the year are as under: -

Rs. {in lakhs)

PARTICULARS

STANDALONE

CONSOLIDATED

2022-23 2021-22 2022-23 2021-22
Turnover 5553.80 7696.72 6320.46 9118.46
Other Income 10.72 94.76 20.34 80.17
Total Income 5564.52 7791.48 6340.80 9198.63
Expenditure 6135.23 7509.28 8962.29 10543.63
Profit before Depreciation, Interest & Tax (PBDIT) (570.71) 282.20 (2621.49) (1345.00)
Financial Expenses (Interest) 76.67 66.97 218.32 309.69
Profit before Depreciation and Tax (PBDT) (647.38) 215.23 (2839.81) (1654.69)
Depreciation and Amortization 171.74 148.63 702.68 735.07
Profit before Tax (PBT) (819.12) 66.60 (3542.49) (2389.76)
Extraordinary items Gain / (Loss) - - 35.67 -
Net OCI Impact Gain / (Loss) (3.29) 12.66 (3.29) -
Share of Profit / (Loss) of Associate - - (330.99) -
Income Tax net of MAT credit Income / (Expense) - - 732.40 458.51
Profit after Tax (822.41) 79.26 (3108.7 (1931.25)
Earnings per Share (in Rs.) (3.32) 0.27 (12.57) (7.82)

2. Performance of the Company

During the year, on standalone basis your Company has achieved a turnover of Rs.5553.80 lakhs and the Company has incurred a net loss after tax and depreciation of Rs. 822.41 lakhs as compared to loss of Rs. 79.26 lakhs in the previous year.

3. Operations during the year

It has been a challenging year marked by factors such as the Russia-Ukraine conflict, supply chain disruptions, and volatile API prices, all of which contributed to a period of contraction. In response, we are actively concentrating our efforts on expanding our presence in the domestic and international market. This entails leveraging our in-house marketing teams capabilities, introducing a new products, and securing additional international approvals. Furthermore, our joint venture company, Brooks Steriscience Limited, has achieved a notable milestone by securing approval from the U.S. Food and Drug Administration (FDA) for Meropenem for Injection. As a result, we have commenced product supply, marking a significant step forward in our international endeavours.

4. Dividends

In view of the financial constraints during the year, the Board of Directors has not recommended any dividend for this year.

5. Reserves

The Company has not transferred any amount to reserves and not withdrawn any amount from the reserves.

6. Deposits

During the financial year 2022-23, the Company has not accepted any deposits from the public within the provisions of ChapterV of the Companies Act, 2013 read with Companies {Acceptance of Deposits) Rules, 2014.

7. Share Capital

The paid up equity Share capital of the company as on 31% March, 2023 was Rs. 2470.28 lacs. During the year under review, the Authorised Share Capital of the Company was increased from Rs. 25,00,00,000/- (Rupees Twenty Five Crores Only) consisting of 2,50,00,000 (Two Crores Fifty Lakhs) Equity Shares of Rs. 10/- (Rupees Ten) each to Rs. 30,00,00,000/- {Rupees Thirty Crores Only) consisting of 3,00,00,000 (Three Crores) Equity Shares of Rs. 10/- (Rupees Ten) each. Change in the nature of business, if any During the year, there was no change in the nature of business of the Company. Material changes and commitments, if any, 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. They have been 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. 10. Details of revision of Financial Statement or the Report There was no revision in Financial Statement or the Report in respect of any of the three preceding financial years. 11. List of all Credit Ratings

Rating Agency Instrument Type Rating Remarks
CARE Rating Limited Long Term Bank Facilities Short Term Bank Facilities
CARE BB-; Stable {Double B Minus; Outlook: Stable) CARE A4 This rating is as on 31% March, 2023.

12. Changes in Directors and Key Managerial Personnel

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Jitendra Pratap Singh (DIN: 09796568), Whole Time Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Jitendra Pratap Singh (DIN: 09796568) and Mrs. Kaushalya Singh (DIN: 09244596) were appointed as Additional Director and Whole Time Director on 23 November 2022 by Board of Directors and the appointment was subsequently approved by shareholders through Postal ballot on 28" December 2022. Mr. Atul Ranchal {Director and Chairman) and Mr. Rajesh Mahajan {Managing Director) of the Company resigned from the Board from 23 November 2022. Ms. Jai Vaidya member of The Institute of Company Secretary of India was appointed as Company Secretary cum Compliance Officer of the Company on 23 November 2022. Mr. Manpreet Singh Narco resigned as Whole Time Director on July 7, 2023 and Mrs Kaushlaya Singh resigned as Whole Time Director on August 23, 2023. Dr. D.S.Maity was appointed as Additional Director on July 7, 2023 also Mr. Bhushan Singh Rana was appointed as Additional Director on August 23, 2023 for term till Ensuing Annual General Meeting. 14. Statement on declaration given by the Independent Directors As required under Section 149 (7) of the Companies Act, 2013, all the Independent Directors have given their respective declarations that they meet the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013. The Independent Directors have complied with the Code of Conduct for Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. They have also given the affirmation for complying the Code of Conduct as formulated by the Company for Directors and Senior Management personnel. 15. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future There is no significant and material order passed by the regulators or courts or tribunals during the financial year 2022-23 that impacts the going concern status and companys operations in future.

16. Details of Subsidiary/Joint Ventures/Associate Companies During the year under review,

1) Your Companys holding in Brooks Steriscience Limited reduced from 73.33% to 49% as on 31% March, 2023. The Company is now holding 49% in Brooks Steriscience Limited and hence, Brooks Steriscience Limited becomes an Associate Company of Brooks Laboratories Limited.

2) Your Companyis holding 44.33% shares in SteriBrooks Penems Pvt. Ltd. on 31% March, 2023. Hence, SteriBrooks Penems Pvt. Ltd. becomes an Associate Company of Brooks Laboratories Limited. 17. Corporate Governance Report and Management Discussion & Analysis Your Company is committed to good corporate governance practices. The Report on Corporate Governance is given in Annexure 2 and Management Discussion & Analysis provided in Annexure 1, as stipulated in Regulation 34 of listing Regulations forms part of this Directors Report. 18. Corporate Social Responsibility The Company has constituted a Corporate Social Responsibility Committee in accordance with Section 135 of the Companies Act, 2013 and rules framed thereunder. A report on the CSR activities in the prescribed format as set out in Annexure to the Companies {Social Responsibility Policy) Rules, 2014, is given in Annexure 3 to this Directors Report. The Policy is disclosed on the Companys website: www.brookslabs.net. 19. Human Resources Harmonious employees relations prevailed throughout the year. Your Directors place on record their appreciation to all employees for their hard work and dedication. 20. Number of Meetings of the Board The details of the number of meetings of the Board and other Committees are given in the Corporate Governance Report in Annexure 2 which forms a part of this Annual Report. 21. Composition of Committees The details pertaining to composition of Committees are included in the Corporate Governance Report in Annexure 2, which forms part of this Annual Report. 22. Recommendations of Audit Committee All the recommendations of Audit Committee were accepted by the Board of Directors. 23. Vigil Mechanism Pursuant to the requirements of the CompaniesAct, 2013, the Company has established Vigil mechanism/Whistle Blower Policy for directors and employees to report genuine concerns about unethical behavior, actual or suspended fraud or violation of the Companys Code of Conduct or ethics policy. The vigil mechanism provides for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Policy is disclosed on the Companys website: www.brookslabs.net. 24. Directors Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that: a. in the preparation of the annual accounts for the year ended 31% March, 2023, 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 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 31% March, 2023 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 Companies 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; o 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; 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. 25. Internal Financial Controls related to financial statement The Company has in place adequate internal financial controls related to financial statement. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. 26. Fraud Reported by Auditor There is no fraud reported by the Auditor. 27. Extract of Annual Return Pursuant to the provisions of Section 134(3){a) of the Companies Act, 2013, the extract of Annual Return for the financial year ended March 31, 2023 is available on the website of the Company at www.brookslabs.net. 28. Statutory Auditors M/s. SGCO & Co. LLP, Chartered Accountants, Mumbai, were re-appointed as the Statutory Auditors of the Company for a second term of 5(five) consecutive years at the 17" Annual General meeting held on 25% September, 2019 to hold office from the conclusion of 17" Annual General Meeting of the Company till the conclusion of 22" Annual General Meeting of the Company. The Report given by the Statutory Auditors on the financial statement of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the auditors in their Report. 29. Cost Auditors Pursuant to the provisions of section 148(3) of the Companies Act, 2013, the Board has appointed M/s. Balwinder Singh

& Associates (Firm Reg. No. 000201), Cost Accountants, F-125, Phase VIII B, Industrial Area, Mohali- 160071, as the Cost Auditors of the Company to conduct an audit of the cost records of bulk drugs and formulations, maintained by the Company for the financial year ending 31% March, 2024. The Board has approved the remuneration payable to the Cost Auditors subject to ratification of the Members at the forthcoming Annual General Meeting. The Cost Audit Reports would be submitted to the Central Government within the prescribed time. 30. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of M/s. Sharma Sarin and Associates, Company Secretaries in practice, Chandigarh, to conduct the Secretarial Audit of the Company for the financial year ended 31 March, 2023. The Secretarial Audit Report (Form MR-3) is given as Annexure 4 to this Directors Report. The said Report contains remarks/ observations as mentioned below:

1. Fines imposed by stock exchanges under Regulation 17(1) of of SEBI {Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations) for Non-compliance with the requirements pertaining to composition of Board of Directors received by email dated 21.02.2022. Management reply-

. Company has made the payment of the penalty imposed by the exchanges for non- compliance on 18th July 2022.

= The board members decided that now the Company will be extra cautious regarding the compliances applicable on the Company and will not repeat the same in future. 31. Particulars of Loans, Guarantees or Investments Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 is given in the Note No. 4 of the Notes to the Standalone Financial Statement. The Company has given Corporate Guarantee of Rs. 12.39 crores in favour of Brooks Steriscience Limited under the provisions of Section 186 of the Companies Act, 2013.

32. Contracts and arrangements with Related Parties

All transactions of the Company with Related Parties are in the ordinary course of business and at arms length. Information about the transactions with Related Parties is presented in Note No. 36 in Notes to the Accounts. Form AOC - 2 pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is given as Annexure 7 to this Directors Report.

33. Risk Management Policy The Company does not have any Risk Management Committee due to the non-applicability of the provisions of Regulation 21 of the Listing Regulations, whereas the Company has Risk Management Plan. Business Continuity Plans are periodically reviewed and tested to enhance their relevance. The Risk Management Framework covering business, operational and financial risk is being continuously reviewed by the Audit Committee. At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

34. Disclosure pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure 8 to this Directors Report. The Statement pursuant to Rule 5(2) and 5(3) of the Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company for the financial year 2022-23.

36. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The Statement of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required prescribed in Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 5 to this Directors Report.

37. Policy on appointment and remuneration of Directors The Nomination and Remuneration Committee of the Company has recommended to the Board a Policy relating to the remuneration for Directors, Key Managerial Personnel and other employees including the criteria for determining the qualification, positive attributes and independence of a Director, as required under Section 178(1) of the Companies Act, 2013 which was adopted by the Board. A brief detail of the policy is given in the Corporate Governance Report in Annexure 2 which forms a part of this Annual Report. The Policy is disclosed on the Companys website: www.brookslabs.net.

38. Evaluation of Performance of Board, its Committees and Individual directors During the year, a meeting of the Independent Directors was held to review the performance of the non-independent Directors and the Board as a whole on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. Mr. Deepak Mahajan was appointed as the Lead Director to oversee the evaluation process at the meeting of the Independent Directors.

39. Compliance with Secretarial Standards The Company has complied the applicable Secretarial Standards as listed below- a. SS-1 on Meetings of the Board of Directors b. S$S-2 on General Meeting c. S5-3 on Dividend (Company has not declared any Dividend since 2012) d. SS-4 on Report of the Board of Directors

40. Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 (IBC) There is no such application filed for corporate insolvency resolution process, by a financial or operational creditor or by the company itself under the IBC before the NCLT.

41. Failure to implement any Corporate Action The Company has not failed to complete or implement any corporate action within the specified time limit.

42. Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Internal Complaint Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been formed. There is nil case filed and disposed as required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

43. Listing with Stock Exchanges

Your Company is presently listed with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The details of trading, listing fees etc. are given in the Corporate Governance Report.

44. Acknowledgement

Your Directors are pleased to place on record their sincere gratitude to the Central Government, State Government(s), Financial Institutions, Bankers and Business Constituents for their continuous and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

For Brooks Laboratories Limited

sd/- sd/-
Place: Baddi Kaushalya Singh Jitendra P. Singh
Date: 23.08.2023 Whole Time Director Whole Time Director
DIN: 09244596 DIN: 09796568

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