Godavari Drugs Ltd Directors Report.

To,

The Members,

It gives us immense pleasure to present the Annual Report for the Financial Year 2021-2022 of your company together with the Audited Statement of Accounts.

Financial Highlights

During the year under review, the performance of your company is as under

(Rupees: In Lakhs)

PARTICULARS Year ended 31st March 2022 Year ended 31st March 2021
Total Turnover 1613825 12308.03
Revenue from Operations 16110.62 12267.02
EBITDA 1156.63 1025.00
Less: Finance cost 284.93 332.09
Less: Depreciation 169.64 122.27
Profit before tax & exceptional items 702.06 570.64
Less: Exceptional items
Profit before tax 702.06 570.64
Less: Tax expenses (177.53) (157.83)
Profit After Tax 524.53 412.81
Transferred to general reserve
Proposed Dividend

Company Performance

Quality and Customer satisfaction have been the two most important factors in driving the business of your company for the last three decades. The company is one of the leading manufacturer in the Quinolone segment and is striving towards adding more products to increase the product and customer base in various other therapeutic segments as well.

There have been a lot of challenges during the year owing to continued situation of COVID 19 pandemic as well as other Global disturbances; however, your company has improved its performance inspite of all the above challenges.

Dividend

To conserve the funds for operations of the Company, the Board does not recommend any dividend for this financial year.

Amounts Transferred to Reserves: Nil

Disclosures regarding:

Changes in Share Capital

There was no change in the structure of the share capital of the Company during the financial year under review.

Issue of Equity Shares with Differential Rights

The Company has not made any issue of equity shares with Differential Rights under the provision of Section 43, read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 during the Financial Year under review.

Issue of Employee Stock Options

The Company has not made any issue of equity shares via Employee stock options during the Financial Year under review. Issue of Sweat Equity Shares

The Company has not made any issue of equity shares under the provision of Section 54, read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014, during the Financial Year under review.

Extract of Annual Return

Extracts of the Annual Return are placed on the websites of the Company at www.godavaridrugs.com

Details of Board Meetings held

During the Financial Year 2021-22, five meetings of the Board of Directors of the company were held, as against the minimum requirement of four meetings.

Date Board Strength No. of Directors Present
10th May, 2021 08 08
16th June, 2021 08 08
14th August, 2021 08 08
12th November, 2021 08 08
14th February, 2022 08 08

Particulars of Loan, Guarantees and Investments under Section 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Financial Statements.

Particulars of Contracts or Arrangements with Related Parties

All Related Party Transactions that were entered during the financial year under review were on an arms length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders approval under Regulation 23 of the Listing Regulations.

The Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board may be viewed on the Companys website.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 shall be disclosed in Form No. AOC-2. As Annexure I.

Explanation to Auditors Remarks

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

Material Changes Affecting the Financial Position of the Company

There are no material changes / events, occurring after balance sheet date till the date of the report to be stated. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as "Annexure II"

Details of Subsidiary, Joint Venture or Associates Associated Companies:

Godavari Capital Private Limited, Godavari Homes Private Limited and A.K. Paper Products Private Limited.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors had formulated Vigil mechanism which is in compliance with the provisions of section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.godavaridrugs.com

Nomination & Remuneration Committee Policy

The Board of Directors of your Company had constituted the Nomination and Remuneration Committee with the requisite terms of reference as required under Section 178 of the Companies and other applicable provisions thereof in place of existing Remuneration Committee. The said Committee framed, adopted and recommended the "Nomination Remuneration & valuation Policy ".The Details of the Committee have been provided under Corporate Governance Report, which forms part of this Annual Report.

Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

In order to promote safe and indiscriminative environment, the Company has formed an Internal Complaints Committee where employees can register their complaints against sexual harassment.

During the year under review Company has not received any complaint of harassment.

Details of Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Ghanshyam Jaju, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-ap- pointment.

The Company has drafted a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors.

Familiarization Program For Independent Directors

All new independent directors inducted into the Board are familiarized with the operations and functioning of the Company

On the basis of the Policy framed for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation activity was followed by the Board for its own performance and that of its Committees and individual Directors. The Company has conducted programmes to familiarize Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company works and other allied matters.

Details of significant & material orders passed by the regulators or courts or tribunal

Appeal Pending with CESTAT, Mumbai amounting Rs. 16, 29,9997-

In Respect of Service Tax and Appeal Pending with CESTAT, Mumbai amounting Rs. 3,97,7667-

Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The Company has in place adequate internal financial controls with reference to financial statements.

During the year, such controls were tested and no reportable material weakness in the operation was observed.

Deposit from Public

During the year under review, your Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.However opening balance of unsecured loans from related parties is lying with the Company, which is subordinated to bank borrowings against cash credit limit availed from Bank.

Receipt of any commission by MD / WTD from a Company or for receipt of commission / remuneration from it Holding or subsidiary

As there is no holding company or subsidiary of the Company, this part isnt applicable to the Company.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed in Sub-Section (6) of Section 149 of Companies Act, 2013, read with the Regulations and Rules issued thereunder as well as Listing Obligations and Disclosure Requirement (LODR).

Code of Conduct for Directors and Senior Management

The Board has laid down a code of conduct for all Board members and senior Management of the Company. The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company.

Risk Management

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

Compliance of Secretarial Standards

During Financial Year 2021-22, your Company has complied with the relevant provisions of Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings

Secretarial Audit Report

In terms of Section 204 of the Act and Rules made there under, M/s. VSS & Associates, Practicing Company Secretary have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure III to this report. The report is self-explanatory and do not call for any further comments.

Audit Committee

During the year under review, 5 meetings of the Committee were held on, May 10, 2021; June 16, 2021; August 14, 2021; November 12, 2021 and February 14, 2022.

The composition of the Committee as on 31st March, 2022 as well as the particulars of attendance at the Committee during the year are given in the table below:

Name Name Category of Directorship No. of Meetings Attended % of Total meetings attended during the tenure as a Director
Shri Dilip Patel Independent Director/ Chairman 5 100
Shri Syed Hussain Independent Director 5 100
Shri K K Jain Director Finance 5 100

The Committees composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 18 of SEBI Regulations 2015, members of the Audit Committee possess financial / accounting expertise / exposure.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations"), the Board has carried out an 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 has been carried out has been explained in the Corporate Governance Report.

Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the companies (appointment and Remuneration of managerial personnel) rules, 2014.

The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2021-22, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2021-22 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Sr. Name of Director/ KMP No. and Designation Remuneration of Director/KMP for financial year 2021-22 (in Lakhs) % increase in Remuneration in the Financial Year 2021-22 Ratio of remuneration of each Director/to median remuneration of employees
1. Ghanshyam Jaju - Chairman Nil Nil Not Applicable
2. Mukund Kakani - Managing Director 10.20 Nil 4.41:1
3 Kirti Kumar Jain - Executive Director 6.00 Nil 2.59:1
4. Mohit Jaju - Executive Director 6.00 Nil 2.59:1
5. Syed Hussain - Independent Director 0.90 34 0.56:1
6. Dilip Patel - Independent Director 0.90 34 0.56:1
7 Ramesh Babu Telugu - Independent Director 0.90 34 0.56:1
8 Vimala Madon - Independent Director 0.90 34 0.56:1
9. Rashmi Agarwal - Company Secretary & Compliance Officer 4.20 Nil 1.67:1

# Sitting fees is also considered for calculation of remuneration for the above purpose

Percentage increase in the median remuneration of employees in the financial year:

The median remuneration is Rs. 28365/- and the percentage increase in the median remuneration of employees in the financial year is 9.11%.

Number of permanent employees on the rolls of company:

Number of employees on the role of the Company as on 31st March, 2022 was 102 Nos.

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in salaries of employees other than managerial personnel in 2021-22 was 9.05%. Percentage increase in the managerial remuneration for the year was 23.86%.

Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) and 5(3) of the companies (appointment and Remuneration of managerial personnel) rules, 2014.

a. Employed throughout the financial year and was in receipt of remuneration for the year in aggregate of not less than Rs. 1,02,00,000:- NIL

b. Employed for a part of the financial year and was in receipt of remuneration at a rate in aggregate not less than Rs. 8,50,000/- per month:- NIL

c. Employed throughout the financial year or part thereof, was in receipt of remuneration in the year which, in the aggregate or at a rate which in the aggregate was in excess of that drawn by the Whole-time Director and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company:- NIL

Fraud Reporting

No cases of fraud have been reported to the Audit Committee / Board during the financial year under review.

Statutory Auditors

Pursuant to the provisions of Section - 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules framed there under, read with Schedule VI of the Act, as amended from time to time, M/s Ayyadevara & Co (FRN: 000278S)., Chartered Accountants, be and are hereby proposed to be appointed as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the 6th Consecutive Annual General Meeting of the Company to be held in the year 2026-27, at such remuneration as may be mutually agreed upon between the Board of Directors and Statutory Auditors.

They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

Management Discussion and Analysis Report

The above report is annexed herewith to the Boards report

Corporate Social Responsibility:

The Board in compliance with the provisions of Section 135(9) of the Companies Act, 2013, and rules made thereunder has not constituted CSR Committee as the amount required to be spent on CSR activities does not exceed 50 Lakh rupees and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of the company. The CSR policy will be placed on the Website of the Company and can be accessed through the link: www.godavaridrugs.com and a brief outline of CSR activities proposed to undertaken by the Company during the year are mentioned in Annual Report on Corporate Social Responsibility (CSR) activities in the Annexure IV, which forms part of this report.

Directors Responsibility Statement

In accordance with the provisions of Section 134(3) (c) of the Companies Act 2013, your directors confirm that:

a. In the preparation of the annual accounts for the financial year ended 31st March, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. The Company has 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 31st March, 2022 and of the profit /loss of the Company for that period.

c. The Company has 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 annual accounts have been prepared on going concern basis.

e. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

f. The Company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

Human Resources

The company considers its human resources as the key to achieve its objectives. Keeping in view, your company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the companys vision. The company appreciates the spirit of its dedicated employees.

Green initiative in corporate governance

The ministry of corporate affairs ( MCA) has taken a green initiative in corporate governance by allowing paperless compliance by the companies and permitted the service of annual reports and documents to the shareholders through electronic mode subject to certain conditions and the company continues to send annual report and other communications in electronic mode to the members having email addresses and for the members who have not registered their email addresses , physical copies are sent through the permitted mode

Acknowledgment

The Directors express their sincere appreciation to the employees, valued shareholders, customers, bankers suppliers and government authorities for their continued support.

Secunderabad
19.04.2022
For and on behalf of the Board of Directors
For Godavari Drugs Limited
Ghanshyam Jaju Mukund Kakani
(Chairman) (Managing Director)
DIN:00104601 DIN:00104646