gufic biosciences ltd share price Directors report

FINANCIAL PERFORMANCE AND THE STATE OF COMPANYS AFFAIRS

The Companys total revenue from operations stood at 69,062.08 lakhs in the financial year 2022-23, thereby showing a decline as compared to 77,915.56 lakhs in the previous financial year 2021-22. The Profit before Interest, Tax, Depreciation & Amortization (EBITDA) was 13,722.52 lakhs in the year under review as compared to 15,113.30 lakhs in the financial year 2021-22. However, the EBITDA margin for the financial year 2022-23 showed an improvement of 19.9% as compared to 19.4% in the previous financial year.

A detailed analysis of performance for the year including the major developments, if any, has been included in the Management Discussion and Analysis Report, which forms a part of the Annual Report.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business during the year under review and it continues to operate only in one segment i.e. Pharmaceutical.

TRANSFER TO RESERVES

DIVIDEND

Your Board of Directors have recommended a final dividend of 0.10 /- (10%) per equity share having face value of 1/- each fully paid-up of the Company for the financial year ended March 31, 2023. The payment of dividend is subject to the approval of members at the ensuing Annual General Meeting (“AGM”) and deduction of tax at source. Upon approval, the dividend will be paid to those members whose name will appear in the Register of Members as on the Book Closure date as mentioned in the Notice of AGM. The total dividend pay-out would amount to 96,94,450.60/-.

The recommended dividend is in accordance with the Companys Dividend Distribution Policy and the same is available on the website of the Company which can be accessed at http://gufic.com/wp-content/uploads/2021/08/Dividend%20Distribution%20Policy.pdf

SHARE CAPITAL

During the period under review, there was no change in the Authorised, Issued, Subscribed and Paid up share capital of the Company. The Issued, Subscribed and Paid up share capital of the Company is 9,69,44,506/- divided into 9,69,44,506 Equity Shares of face value of 1/- each. The Company have neither issued any shares with differential voting rights as to dividend, voting or otherwise nor granted any stock options nor sweat equity shares nor made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees nor bought back its shares, in the financial year ending March 31, 2023. The Board of Directors at their meeting held on August 11, 2023, has approved “Gufic Biosciences Limited Employee Stock Option Plan - 2023” authorizing stock options not exceeding 500,000 (Five Lakh) convertible into equivalent number of equity shares to the eligible employees, in one or more tranches, subject to approval of shareholders at the ensuing AGM.

REGISTERED OFFICE

There was no change in the Registered Office of the Company during the Financial Year under review. The present address of the Registered Office is as follows: 37, First Floor, Kamala Bhavan II, S. Nityanand Road, Andheri (East), Mumbai - 400069, Maharashtra.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Your Company has two foreign Wholly Owned Subsidiaries as on March 31, 2023. The details of which are mentioned hereinbelow : i) Gufic UK Limited (GUL) : GUL was incorporated on March 15, 2022 in the United Kingdom (UK) with the intent of expanding its business operations in UK. ii) Gufic Ireland Limited (GIL): GIL was incorporated on March 02, 2023 in Ireland with the intent of expanding its business operations all over Europe.

As on March 31, 2023, neither the Company have made any investment in GIL and GUL nor have GIL and GUL commenced any business operations. Hence, the Company has not prepared Consolidated Financial Statements of the Company and its foreign subsidiaries i.e. GIL and GUL for the financial year ending March 31, 2023.

Your Company does not have any Associate Company or Joint Venture. Further, no Company ceased to be Subsidiary or Associate or Joint Venture of the Company, during the financial year under review. Accordingly, the statement containing salient features of financials of subsidiaries pursuant to Section 129 of the Act read with Rule 5 and 8(1) of the Companies (Accounts) Rules, 2014 in Form AOC-1, is not applicable to the Company. Further, the Companys “Policy on Material Subsidiaries” can be accessed at http://gufic.com/wp-content/uploads/2022/07/Policy_on_Material_Subsidiary.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/ Re-appointment and Cessation:

During the year under review, following appointments/ re-appointments of Directors took place:

• At the 38 th AGM of the Company held on September 2, 2022, the shareholders approved the re-appointment of Dr. Rabi Sahoo (DIN: 01237464) as an Independent Director of the Company for the second term of two consecutive years with effect from June 29, 2022.

• At the 38th AGM of the Company held on September 2, 2022, the shareholders approved through Special Resolution, the continuation of directorship of Mr. Dilip Ghosh (DIN: 00412406) as a Whole Time Director of the Company upon attaining the age of 70 years on December 29, 2022, on the existing terms and conditions duly approved by the shareholders at its 37th AGM held on September 20, 2021.

Based on the recommendation of Nomination and Remuneration Committee and subject to the approval of members in the ensuing AGM, the Board of Directors have approved the following appointment/re-appointment/continuation of directorship :

• Continuation of Directorship of Mr. Jayesh P. Choksi (DIN: 00001729) as Chairman & Managing Director upon attaining the age of 70 years i.e. on March 29, 2024 which require passing of special resolution, on the existing terms and conditions duly approved by the shareholders in the 35th AGM held on September 30, 2019.

• Continuation of Directorship of Mr. Gopal Daptari (DIN: 07660662) as an Independent Director upon attaining the age of 75 years i.e. on October 29, 2024, which require passing of special resolution, on the existing terms and conditions duly approved by the shareholders in the 35th AGM held on September 30, 2019. The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations read with Secretarial Standard 2 on General Meetings relating to the appointment/re-appointment of directors are given in the Notice of AGM.

During the period under review, there were no cessation of Directors. Apart from above, there were no changes in Directors or Key Managerial Personnel of the Company.

Retirement by Rotation

In accordance with the provisions of Section 152(6) of the Act read with the rules made there under and in terms of Articles of Association of the Company, Mr. Pranav J. Choksi, Chief Executive Officer (CEO) and Whole Time Director and Dr. Balram Singh, Non-Executive Non-Independent Director of the Company will retire by rotation at the ensuing 39th AGM and being eligible, have offered themselves for re-appointment. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee (“NRC”) has recommended their appointment.

Key Managerial Personnel (“KMP”)

Pursuant to Section 203 of the Act, the Key Managerial Personnel (“KMPs”) of the Company as on March 31, 2023 and date of this report are Mr. Jayesh P. Choksi, Chairman & Managing Director; Mr. Pranav J. Choksi, Chief Executive Officer and Whole Time Director; Mr. Pankaj J. Gandhi, Whole Time Director; Mr. Dilip B. Ghosh, Whole Time Director, Mr. Devkinandan B. Roonghta, Chief Financial Officer and Ms. Ami N. Shah, Company Secretary & Compliance Officer.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have confirmed that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and provisions of SEBI Listing Regulations and also none of the Directors of the Company are disqualified under Section 164 of the Act. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

All the Independent Directors of the Company had registered themselves with the Indian Institute of Corporate Affairs (“IICA”) and have passed the proficiency test, if applicable. They have also confirmed compliance of Schedule IV of the Act and the Companys Code of Conduct. In the opinion of the Board, all the Independent Directors of the Company possess the highest standard of integrity, relevant expertise and experience including the proficiency required to best serve the interests of the Company.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

The Company has in place a Policy on criteria for Appointment of Directors, KMPs and Senior Management Personnel and Evaluation of their performance. The Policy is available on the Companys website and can be accessed at http://gufic.com/wp-content/uploads/2016/08/AppointmentofDirectorsKMP201718.pdf The said Policy lays down guiding principles for selection and appointment of Directors, KMPs and Senior Management Personnel and for determining qualifications, positive attributes and formulating Remuneration Policy for Executive and Non-Executive Directors of the Company. The details of the said policy are included in the Corporate Governance Report forming part of this Report. There has been no change in the aforesaid policy during the year under review.

Further, neither the Managing Director nor the Whole Time Director draws any remuneration or commission from the subsidiary company.

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of SEBI Listing Regulations, the Company has put in place a Familiarization Programme for the Independent Directors to familiarise them with the Company, nature of industry in which the Company operates, risks and challenges associated with the business and such other relevant information, which would enable them to take well informed decisions, discharge the responsibilities and functions conferred on them. Details of Familiarisation Programme imparted during the financial year under review has been uploaded on the Companys website and can be accessed at http://gufic.com/wp-content/uploads/2023/03/Familarisation%20Programme.pdf Every newly appointed Independent Director undergoes a familiarization programme including visits to the manufacturing plant of the Company, interactive sessions with functional heads through which they can understand the objective of the Company, its business, current progress, future prospects etc. Further, during the meeting of the Board, the Directors are provided with performance updates of the Company, industry scenario, business strategy, relevant statutory amendments, Companys policies and procedures, etc. The format of the terms and conditions outlined in the letter of appointment, which defines their role, function, duties and responsibilities, provided at the time of appointment can be accessed at http://gufic.com/wp content/uploads/2022/05/Terms%20and%20Conditions%20of%20Appointment%20of%20Independent%20Directors.pdf

PERFORMANCE EVALUATION

In compliance with the provisions of the Act and the SEBI Listing Regulations, the Board has carried out the Annual Performance evaluation of Individual Directors, Committees of the Board and the Board as a whole in accordance with the framework and criteria laid down by the Nomination and Remuneration Committee (“NRC”). A structured questionnaire was prepared separately for the Board, Committees and Individual Directors, inter-alia covering various parameters viz. composition and structure of the Board, responsibilities, attendance including participation of the Directors at the Board and Committee meetings, governance and compliance as a whole, quality of deliberations and effectiveness of the procedures and all other factors. The above criteria are broadly based on the SEBI Guidance Note on Board Evaluation.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. Further, Independent Directors at their separate meeting had evaluated performance of Non-Independent Directors, Board as a whole, Chairman of the Board and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board. Manner in which the evaluation has been carried out and matters incidental thereto, have been detailed in the Corporate Governance Report, which forms part of this report.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met Seven (7) times during the year under review. Details of the meetings of the Board of Directors along with other details are provided in the Corporate Governance Report, which forms part of this Report. The intervening gap between the two consecutive Board meetings did not exceed 120 days as prescribed under Section 173 of the Act, Regulation 17 of SEBI Listing Regulations and Secretarial Standard on Board Meetings (SS-1) issued by the Institute of Company Secretaries of India (“ICSI”).

COMMITTEES OF THE BOARD

To effectively discharge the obligations and to comply with the statutory requirements, the Company has in place 5 (five) committees of the Board as on March 31, 2023 viz.:

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report that forms part of this Annual Report. Further the Board of Directors, at their meeting held on May 29, 2023, has constituted Executive Committee for dealing with various urgent operational matters.

AUDIT COMMITTEE

The Audit Committee comprises of 6 (six) members which is in compliance with the provisions of the Act and SEBI Listing Regulations. The details pertaining to composition of the Audit Committee along with other details are included in the Corporate Governance Report, which forms part of this Annual Report.

MEETING OF INDEPENDENT DIRECTORS

In terms of requirements under Schedule IV of the Act and Regulation 25(3) of SEBI Listing Regulations, a separate meeting of the Independent Directors was held on February 10, 2023. The details of the meeting held is included in the Corporate Governance Report, which forms part of this report.

CODE OF CONDUCT

The Company has laid down a Code of Conduct (“Code”) for the Board of Directors & Senior Management which places a strong emphasis on maintaining integrity in both workplace & business practices, promoting honest & ethical conduct, & fostering diversity & fairness, among other important principles. The Code of Conduct can be accessed at:

http://gufic.com/wp content/uploads/2020/10/Code%20of%20conduct%20for%20directors%20and%20Senior%20Management%20Personnel.pdf

The members of the Board and Senior Management of your Company have submitted their affirmation on compliance with the Code of Conduct of the Company during the Financial Year 2022-23, as required under the provisions of SEBI Listing Regulations. A declaration to that effect duly signed by Mr. Pranav J. Choksi, Chief Executive Officer & Whole Time Director, pursuant to Regulation 17(5) read with Schedule V of the SEBI Listing Regulations forms part of this report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statement relates and date of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations provided to them and pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, your Directors hereby state and confirm that:- a. in the preparation of the annual accounts/financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any; b. they have 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 your Company at the end of the financial year March 31, 2023 and of the profit of your Company for that period; c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the annual accounts/ financial statements have been prepared on a going concern basis; e. proper internal financial controls were in place and that the said financial controls were adequate and were operating effectively; and f. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control system and mechanism which is commensurate with nature of its business, size, scale and complexity of its operations. The Company has implemented a comprehensive framework which includes formulation of Standard Operating Procedures (SOPs), Procedures and Controls, which are regularly audited to safeguard its assets, ensure the accuracy and reliability of financial reporting, enhance operational efficiency and ensure compliance with applicable laws and regulations. Clear roles and responsibilities have been defined for each process establishing accountability and promoting efficiency throughout the organization. The Company has also set up Management Information System (MIS) to facilitate informed decision making. The Company continues to have periodical internal audits conducted of all its functions and activities to ensure that systems and processes are followed across all areas.

Internal Financial Controls are an integral part of the risk management framework and process that address financial and financial reporting risks. The Company has in place adequate internal financial controls with reference to the Financial Statement.

The Company is also in the process of implementing Systems, Applications and Products (“SAP”) which will enhance and fortify its internal control mechanism. Serving as a powerful tool, SAP is set to bolster the Companys internal control systems, effectively mitigating risks associated with errors and fraud. Additionally, SAP ensures the Companys strict adherence to regulatory requirements, promoting a more secure and compliant operational environment.

The Companys Internal Control System process is reviewed by the Audit Committee periodically. The management duly considers and takes appropriate actions on the recommendations made by the Internal Auditors, Statutory Auditors and the Audit Committee.

The Company believes that these systems provide reasonable assurance that the Companys internal financial controls are adequate and are operating effectively as intended.

REPORTING OF FRAUDS

During the year under review, none of the Auditors has reported to the Audit Committee any instances of fraud committed in the Company by its officers or employees, as required under Section 143 (12) of the Act.

DEPOSITS

During the financial year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, no amount on account of principal or interest on public deposits was outstanding as on March 31, 2023.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on March 31, 2023, are set out in Notes to the Financial Statements of the Company provided in this Annual Report.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to provisions of Section 124 and other applicable provisions, if any, of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after completion of seven years. Accordingly, during the year under review, unpaid or unclaimed dividend amounting to 47,707/- (Rupees Forty Seven Thousand Seven Hundred and Seven Only) was transferred by the Company to the IEPF. In accordance with the IEPF Rules, shares on which the dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly, 30,173 unclaimed shares were transferred to IEPF during the year under review. The Company has issued individual notices to the members whose equity shares are liable to be transferred to IEPF within the stipulated time frame in the current financial year i.e. 2023-24 to claim their dividend on or before September 30, 2023. Details of unclaimed dividends and shareholders whose shares are liable to be transferred to IEPF, are uploaded on the website of the Company i.e. www.gufic.com.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company during the financial year under review with related parties were in its ordinary course of business and on an arms length basis and in accordance with the Companys policy on Related Party Transactions. The approval of the Audit Committee was sought for all Related Party Transactions and prior omnibus approval is obtained for transactions which are repetitive in nature and /or entered in the ordinary course of business and are at arms length. A statement of related party transactions is placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. There are no materially significant related party transactions made by the Company, which may have potential conflict with the interest of the Company. All the related party transactions entered during the year under review, were in compliance with the provisions of the Act and SEBI Listing Regulations. During the period under review, the Company has not entered into any contracts/ arrangements/ transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions and hence there is no information to be provided in Form AOC-2 as required under Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

Policy on Related Party Transactions as formulated/ amended from time to time, by the Board is available on the Companys website at http://gufic.com/wp-content/uploads/2016/08/Related%20Party%20Transactions%20Policy.pdf Attention of Members is also drawn to Note 39 of the Financial Statements for the year ended March 31, 2023 which sets out the related party disclosures as per the Ind AS-24.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. The role of the committee is to review the CSR Policy, indicate activities to be undertaken by the Company towards CSR and formulate a transparent monitoring mechanism to ensure implementation of projects and activities undertaken by the Company towards CSR. The key philosophy of the CSR initiative of the Company is to promote development through social and economic transformation. During the period under review, the Company spent CSR amount in the areas of promoting healthcare, education and animal welfare. The CSR Policy of the Company are available on the website of the Company and can be accessed at http://gufic.com/wp-content/uploads/2021/08/Corporate%20Social%20Responsibility%20Policy.pdf The Annual Report on Corporate Social Responsibility (CSR) containing, details of CSR Policy, composition of CSR Committee, CSR expenditure and web-link thereto on the website of the Company, as required under Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out in “Annexure A” of this Report.

CONSERVATION OF ENERGY

1. Steps taken by the Company or impact on conservation of energy l Installation and Investment in energy-efficient equipments/machines and approaching towards utilization of Variable Frequency Drive (VFD) to enable power consumption control;

Installation of motion sensors for lighting load optimisation;

Have Energy Management System in place; l Installation of Steam Strap on main stream line to improve quality of steam;

Treated high salt content in waste water system;

Transition from CFL lights to LED lights which enables energy efficiency;

Implementing energy-efficient practices by ensuring power factor between 0.99 to 1.0;

Incre asing the set point temperature of the Air Handling Units (AHUs) with an aim to save energy by reducing the frequency of compressor operation;

Setting-up water level controller systems which ensures conserving water and avoiding potential damage;

Setting up timers on the streetlights located within the factory premises to enable automated control of lighting;

Implemented a limit switch on the Air Curtain to cease constant energy consumption during its operation;

Utilizing an Online Energy Monitoring System to track daily consumption, enabling analysis and reduction of excess power use by comparing it with production levels;

Energy audit undertaken by an external agency at the factory premises situated at Navsari, Gujarat and actionable steps have been taken in accordance with the audit results.

2. Steps taken for utilizing alternate source of energy

Replacing conventional fuels is a positive step towards adopting a more sustainable and eco-friendly approach to energy consumption which includes Transitioning to biomass briquettes for steam generation.

Express feeders in main RAW power source has been treated beneficial in terms of efficiency, reliability and overall power distribution system.

Utilizing DG sets as an alternative power sources which helps during power interruptions.

3. Capital investment on energy conservation equipment

During the year under review, the Company has not made any specific capital investment on energy conservation.

TECHNOLOGY ABSORPTION

(I) Efforts made towards technology absorption

a. Updating and improving the processes and systems used for existing products;

b. Developing and introducing new technologies for enhancing efficacy, bio-availability and the potency of the existing as well as new products;

c. Developing and launching new drug delivery systems with a special focus on Lyophilized products;

d. Development and launch of dermatological formulations for moisturisation, anti-pigmentation, anti-aging, sun protection products etc.;

e. Strategic collaborations with other independent teams for introducing new products and technologies;

f. E nsuring the quality of Research work by In-house Quality Assurance Team;

g. Filed multiple Process Patents for many life - saving drug injections, Stability testing of the current as well as new products with a focus on quality and bio-availability;

h. Development and scale-up of new formulations for existing and newer active drug substances using innovative and advanced processing equipment.

(II) Benefits derived as a Result of R & D

a) Successfully launched 20 Generic products in the market in the financial year 2022-23;

b) About 10 products are poised for commercialisation;

c) About 22 New products are in projection and development of many products is already initiated;

d) Development of new drug delivery systems and devices to improve patient benefit;

e) Development of products for import substitution.

(III) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

(IV) The expenditure incurred on Research and Development

Rs in Lakhs

FOREIGN EXCHANGE EARNINGS AND OUT-GO

Rs in Lakhs

RISK MANAGEMENT

The Company has in place a Risk Management Policy and framework to identify and assess risks associated with the business and ensure that there exist proper management process to mitigate or minimize the same. The Board has constituted Risk Management Committee which oversees the implementation of Risk Management policy as well as risk management and mitigation framework. The Committee also diligently monitors and reviews the effectiveness of the risk management plan on an ongoing basis. Additionally, the Audit Committee also have an oversight on financial risks. Together, these committees ensure a robust risk management framework is in place.

The Company takes a proactive approach to risk mitigation, systematically addressing major risks through appropriate actions and measures. This continuous effort fosters a resilient and secure environment.

The risk management policy adopted by the Company can be accessed on the Companys website at http://gufic.com/wp-content/uploads/2016/08/Risk-Management-Policy-2017-18.pdf The details of the membership of Risk Management Committee and its meeting held during the Financial Year 2022-23 is mentioned in the Corporate Governance Report, which forms part of this report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in “Annexure - B” to this Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In accordance with Section 177 of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has in place a vigil mechanism i.e. Whistle Blower Policy for directors and employees to report genuine concerns about unethical behavior, actual or suspected violation, malpractices, corruption, fraud or unethical conduct, leak of unpublished price sensitive information, violation of Code of Conduct, etc. to the Chairperson of Audit Committee without any fear of reprimand, retaliation, victimization or unfair treatment. The Vigil Mechanism provides for direct access to the Chairperson of the Audit Committee. The details of the policy are made available on the website of the Company at the link: http://gufic.com/wp-content/uploads/2016/08/WHISTLE_BLOWER_POLICY.pdf The policy is reviewed by the Audit Committee from time to time.

It is affirmed that during the financial year 2022-23, no employee or director was denied access to the Audit Committee. Further, no concerns or irregularities have been reported by employees/directors till date.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review, no significant or material orders were passed by the regulators or courts or tribunals which could impact the going concern status and the future operations of the Company.

AUDITORS & AUDIT REPORT

a) Statutory Auditor

M/s. Mittal Agarwal & Co., Chartered Accountant (FRN: 131025W) were appointed as the Statutory Auditors Company by the Shareholders at the 36th AGM of the Company to hold office for a period of 5 (five) consecutive years commencing from the conclusion of the 36th AGM until the conclusion of 41st AGM. The Statutory Auditors have confirmed their independent status and eligibility to act as a Statutory Auditor of the Company, pursuant to applicable provisions of the Act. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI, pursuant to SEBI Listing Regulations.

Auditors Report for the year under review forms part of this annual report. There is no qualification, reservation or adverse remark in their report on Financial Statement for FY 2022-23. The Notes on financial statements referred to in Auditors Report are self-explanatory and do not call for any further comments.

b) Cost Auditor T he Company is required to maintain Cost Records as specified by the Central Government under Section 148(1) of Act and accordingly, such accounts and records are made and maintained by the Company.

The Board has, on recommendation of Audit Committee, appointed M/s. Kale & Associates, Cost Accountants, Mumbai (Firm Registration No. 001819) to audit the cost records of the Company for the financial year 2023-24 pursuant to Section 148 and other applicable provisions, if any, of the Act read with Companies (Audit and Auditors) Rules, 2014 and Companies (Cost Record and Audit) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force). The Cost Auditors have confirmed that their appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and that they are not disqualified to be appointed as the Cost Auditors of the Company for the year ending March 31, 2024. As per the said provisions, the remuneration payable to the Cost Auditors is required to be ratified by the shareholders at the ensuing AGM. Accordingly, a resolution seeking ratification by members for their remuneration, forms part of the Notice convening 39th AGM. The Board recommends the same for approval of Members.

In compliance with Section 148 of the Act and Rule 6 of the Companies (Cost Records and Audit) Rules, 2014, Cost Audit Report in the Form CRA - 4 (XBRL mode) for the financial year ended March 31, 2022, was filed by the Company with the Central Government on September 30, 2022. The Cost Auditors Report for the financial year 2021-22 does not contain any qualification, reservation or adverse remark. The Cost Audit Report for the year ended March 31, 2023 shall be filed within the prescribed timeline in due course.

c) Secretarial Auditor Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI Listing Regulations, the Board of Directors of the Company appointed M/s. Manish Ghia & Associates, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report are self-explanatory and do not require any further explanation. The Secretarial Audit Report in the prescribed Form No. MR 3 is annexed to this Report as Annexure C. The Annual Secretarial Compliance Report for the financial year ended March 31, 2023, in relation to compliance of all applicable SEBI Regulations/circulars/ guidelines issued thereunder, pursuant to requirement of Regulation 24A of SEBI Listing Regulations, was submitted to the concerned Stock Exchange(s) within prescribed timeline. The said Report does not contain any qualification, reservation or adverse remark.

d) Internal Auditor

The Company has its in-house Internal Audit team within the organization and Mrs. Saroj R. Kirdolia, Chartered Accountant has been appointed as the Chief Internal Auditor for the financial year 2023-24.

Significant audit observations and corrective actions by the Internal Auditor thereon are presented to the Audit Committee of the Board and reviewed on quarterly basis. Based on report of Internal Audit function, corrective actions in the respective area are undertaken & controls are strengthened.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with all the applicable mandatory Secretarial Standards, as amended from time to time, issued by the Institute of Company Secretaries of India (“ICSI”).

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website at : http://gufic.com/Notice/Form%20MGT%207.pdf

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report as prescribed under Part B of Schedule V read with Regulation 34 of the SEBI Listing Regulations is provided in a separate section and forms part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Regulation 34 of the SEBI Listing Regulations mandates the inclusion of the Business Responsibility and Sustainability Report (BRSR) as part of the Annual Report for the top 1,000 listed entities based on market capitalization. Accordingly, BRSR forms part of this Annual Report and the same is also available on the website of the Company at https://gufic.com/media/investors/annual-reports/

REPORT ON CORPORATE GOVERNANCE AND CERTIFICATE

The Company demonstrates unwavering dedication to upholding the utmost standards of Corporate Governance and diligently follows the regulations prescribed by the Securities and Exchange Board of India (“SEBI”). Furthermore, the Company have integrated numerous exemplary governance practices and aims to continually augment long-term shareholder value while ensuring utmost regard for minority rights in every aspect of our business choices.

Corporate Governance Report along with certificate received from M/s. Manish Ghia & Associates, Practicing Company Secretaries and Secretarial Auditors of the Company confirming compliance of conditions of Corporate Governance for the year ended March 31, 2023 forms part of this Annual Report.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE

The Company has zero tolerance towards sexual harassment at the workplace. Your Company is committed to fostering a secure, supportive and healthy working environment that empowers employees to work without any concerns about prejudice or gender bias.

Your Company has adopted policy on prevention, prohibition and redressal of sexual harassment of women at workplaces in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH“) and Rules framed there under. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the Internal Complaints Committee (“ICC”), whilst dealing with issues related to sexual harassment at the work place. All employees (permanent, temporary, contractual and trainees) are covered under this policy. Training / Awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace. During the year under review, no complaints pertaining to sexual harassment was received by the Company. The Company has submitted the Annual Returns to the local authorities, as required under the above mentioned Act.

GREEN INITIATIVE

As a responsible Corporate Citizen, the Company welcomes and supports the Green Initiative undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report and Notices to the Shareholders at their e-mail address registered with the Depository Participant (DPs) and Registrar and Share Transfer Agent.

Shareholders who have not registered their e-mail addresses so far are requested to do the same and become a part of the initiative and contribute towards a Greener environment.

HUMAN RESOURCES

The Company believes that human resources are the valuable assets and we are committed to provide work environment which is safe, diverse, inclusive and full of growth opportunities. The Company take utmost care while recruiting quality resources.

The Company provides opportunities for employees to enhance their skills and knowledge through various training programs, workshops which fosters career growth and satisfaction. Your Company maintains the highest standards of health and safety in all its plants and facilities. Industrial relations remained cordial throughout the year. The Company has strengthened its focus on overall well-being of the employees.

PREVENTION OF INSIDER TRADING

Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”), as amended from time to time, the Company has formulated a Code of Conduct for Insiders (“Code of Conduct”) and the “Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information” (“Code of Fair Disclosure”) in line with the provisions of PIT Regulations.

The aforementioned Codes can be accessed at the following web link:

Code of Conduct: http://gufic.com/wp-content/uploads/2020/06/Conduct-for%20Insider%20Trading.pdf Code of Fair Disclosure: http://gufic.com/wp-content/uploads/2016/08/Code%20of%20Fair%20Disclosure%20and%20determination%20of%20Legitimate%20Purpose.pdf

These Codes lays down the obligations and responsibilities of Designated Persons, maintenance of the structured digital database, procedure for pre clearance, mechanism for preventing insider trading and handling of Unpublished Price Sensitive Information (UPSI), disclosure of UPSI for legitimate purposes, consequences of violation etc. The Company periodically educates the Designated Person about the Code of Conduct. The Company has also maintained Structured Digital Database (SDD) to ensure compliance with the statutory requirements. In line with the PIT regulations, Directors and Designated Persons are not permitted to deal in shares of the Company while in possession of UPSI in relation to the Company and during the period when the Trading Window is closed. The Company has also formulated a policy on inquiry in case of leak of UPSI.

Further, the Compliance Officer has received requisite disclosure from the Directors and Designated Persons in compliance with the Code from all the designated persons.

CREDIT RATING

The details of the Credit Rating received by the Company have been provided in the Corporate Governance Report, forming part of this Annual Report.

OTHER DISCLOSURES

During the year under review:

a. no application has been made and no such proceeding is pending under the Insolvency and Bankruptcy Code, 2016. Hence, the requirement of disclosing the details of application and proceedings along with their status as at the end of the financial year is not applicable.

b. the requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done, while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable as there was no such valuation done.

c. there was no revision of financial statements and Boards Report of the Company.

d. the Company has not failed to implement any corporate action.

e. the securities of the Company were not suspended.

ACKNOWLEDGEMENTS

Your Directors fully acknowledge the exemplary contribution made by every employee of Gufic at all levels for achieving business goals. Their dedicated efforts and enthusiasm have been pivotal to enable the Company to navigate this period with confidence. The Board of Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company. Your Directors take this opportunity to express their sincere appreciation for the support and co-operation extended by the stakeholders, medical professionals, customers, bankers, financial institutions, government authorities and other business associates. We look forward to continued support of all these partners in our journey of progress.