kimia biosciences ltd share price Directors report

Dear Shareholders,

Kimia Biosciences Limited

The Directors have the pleasure of presenting the Thirtieth (30th) Annual Report together with the Audited Financial Statement and Auditors Report of your Company for the year ended 31st March, 2023.

FINANCIAL OUTLOOK

FINANCIAL HIGHLIGHTS

(Rupees in Lakhs)

Particulars	Year ended March 31, 2023	Year ended March 31, 2022
Net Sales/ Income from operation	12851.60	12490.09
Total Income	12972.91	12583.31
Expenses	14106.92	13085.13
Loss before Tax	(1238.81)	(501.82)
Less: Tax Expenses	(303.59)	(131.52)
Loss After Tax	(935.22)	(370.30)
Other comprehensive income for the year	(7.33)	15.50
Total Comprehensive income for the year	(942.55)	(354.80)
Earnings per Share (Basic)	(1.98)	(0.78)
Earnings per Share (Diluted)	(1.98)	(0.78)

CHANGE IN ACCOUNTING TREATMENT

There has been no change in the accounting policies during the period under review.

SHARE CAPITAL

The Share Capital structure of the company is as follows:

i. Authorized share capital

Particulars	Amount (Rs.)
Equity Shares 7,73,31,680 of face value of Re. 1/- each	7,73,31,680
Compulsory Convertible Preference Share 65,18,320 of Re. 1/-each	65,18,320
0.1% Redeemable Non-Convertible Cumulative Preference Share 80,00,000 of Rs. 10/-each	80,000,000
Total Authorized Share Capital	163,850,000

 

Particulars	Amount (Rs.)
4,73,12,741 Equity Shares of Re. 1/- each	4,73,12,741
80,00,000 , 0.1% Redeemable Non-Convertible Cumulative Preference Share of Rs. 10/- each	80,000,000
Total Paid-up Share Capital	12,73,12,741

Issued, Subscribed and Paid-up Share capital

1. As at the end of the financial year, the issued, subscribed paid-up share capital remains as above.

2. Each preference share holder is eligible for equal amount of dividend, in case dividend is declared by the company on other class of shares. Preference shares shall rank senior to all present and future preference shares and/or equity shares issued by the Company. 40,00,000 Preference shares shall be redeemed at the option of the Company, at any time within a period not exceeding ten years from the date of allotment on 17.05.2016 and 40,00,000 Preference shares shall be redeemed at the option of the Company, at any time within a period not exceeding ten years from the date of allotment on 07.10.2019 under the provisions of the Companies Act, 2013 and Rules made thereunder.

HOLDING, SUBSIDIARY, ASSOCIATE COMPANIES

During the period under review company has no subsidiary, holding or Associate company.

DIVIDEND

The Company has incurred losses during the financial year of Rs. 935.22/-(in lakhs).

Hence, the Directors of the Company didnt recommend any dividend during the financial year under review.

Further, there were no amounts of unclaimed dividend to be transferred to Investor Education & Protection Fund (IEPF) as per the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

TRANSFER TO RESERVES

The Company has incurred losses during the financial year Rs. 935.22/-(in lakhs). Hence, no amount has been transferred or proposed to be transferred to any other reserves.

PUBLIC DEPOSITS

Your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

LOANS, GUARANTEES AND INVESTMENTS

In compliance with provisions of Section 134 (3) (g) of the Act, particulars of loans, guarantees, investments and securities given under Section 186 of the Act are given in the notes to the Financial Statements forming part of this Annual Report.

BUSINESS OUTLOOK

STATE OF COMPANYS AFFAIRS

The company has achieved turnover of Rs. 12851.60 Lakhs during the financial year.

The Company has been consistently practicing prudent finance and working capital management. The strong focus on working capital and liquidity management has helped timely generation of sufficient internal cash flow to invest in long term strategic objectives of the Company.

The Company has revamped its Plant in accordance with Good Manufacturing Practice (GMP) Standards for pharmaceutical productions in past & got certification from State FDA, Haryana and continuously upgrading it to meet the international regulatory requirements.

• Relevance of such license to the listed entity- The Company is manufacturing final product bulk drugs - Active Pharmaceutical Ingredients (APIs) and can market its products overseas markets covering WHO certifications.

• The Company has Research & Development (R&D) at its plant located at Village Bhondsi, Tehsil Sohna, Distt. Gurgaon, Haryana-122102.

The Company has planned capital expenditure to the tune of approx. 10-12 Crores during Financial Year 2023-24 for providing and upgrading facilities such as new equipments, Clean rooms (Powder processing units), separate quality and upgrading of utilities to meet with enhanced manufacturing. The ongoing expenditure is to aim at achieving the vision of the company for enhancement of capacities and expand the export market globally.

CHANGE IN NATURE OF BUSINESS

There has been no change in nature of business activity of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

No significant and material orders were passed during the period under review.

GOVERNANCE OUTLOOK

CORPORATE GOVERNANCE

The Companys philosophy on Corporate Governance aims to ensure establishing and practicing a sound system of good corporate governance which will not only meet Companys objectives but will render assistance to the management in managing the companys business in an ethical, compliant, efficient and transparent manner for achieving the corporate objectives so as to provide services to the utmost satisfaction of the customer and to conduct business in a manner which adds value to the Companys brand and all its stakeholders like shareholders, employees, customers, suppliers, vendors etc. The Corporate Governance report as per Schedule V of SEBI (listing obligations and Disclosure Requirements) 2015 ia annexed as Annexure-VII.

INTERNAL FINANCIAL CONTROLS

The internal financial controls with reference to the Financial Statements commensurate with the size and nature of business of the Company. Your Company continuously invests in strengthening the internal control processes and systems. The internal control process and systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. Procedures to ensure conformance with the policies, processes and standards have been put in place covering all activities.

Implementations of recommendations from various audit reports are regularly monitored by the senior management. Internal and statutory audit reports and findings, including comments by the management, if any, are periodically placed before the Audit Committee of the Board of Directors.

DEPOSITORY SYSTEM

The Company has entered into an agreement with the National Securities Depository Limited (NSDL) as well as the Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in dematerialized form. The Company also offers simultaneous dematerialization of the physical shares lodged for transfer.

The ISIN of the Equity Shares is INE285U01025.

LISTING

The Equity Shares of your Company are listed on BSE Limited having Scrip Code 530313.

The Company has timely paid the Annual Listing Fees to BSE Limited for the financial year ended on 31st March 2023.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in the Directorship of the Company took place. After the closure of financial year 2022-23, Ms. Mita Namonath Jha has been appointed as an Additional Non-Exceutive, Non- Independent Director of the Company w.e.f. 28.08.2023.

The Composition of Board of Directors is as follows:-

S.NO.	NAME OF DIRECTOR	DESIGNATION	DIN
1	Vipul Goel	Non Independent Director (Non Executive)	00064274
2	Sameer Goel	Managing Director	00161786
3	Jagdeep Dhawan	Independent Director (Non Executive)	00778235
4	Richa Gupta	Independent Director (Non Executive)	07481646
5	Mita Namonath Jha	Non Independent Director (Non Executive)	07258314

There were some changes took place in the Key Managerial personnels of the Company during the year under review:-

S.NO.	NAME OF KMP	DESIGNATION	APPOINTMENT/RESIGNATION	DATE
1	Arti	Chief Financial Officer	Resignation	12.08.2022
2	Lakshay Prakash	Chief Financial Officer	Appointment	10.02.2023

The Board of Directors ("Board") comprises of optimum number of Executive, Non-Executive, and Independent Directors as required under applicable legislations. As on date of this Report, the Board consists of five (5) Directors comprising of one (1) Executive Managing Director and two (2) Non-Executive Director and two (2) Independent Directors including one (1) Independent Woman Director as required under Section 149 of the Companies Act, 2013 & rules made thereunder and Regulation 17 of the Listing Regulations.

BOARD MEETINGS

During the year, Fifteen (15) Board Meetings were held on 16.05.2022, 30.05.2022, 04.06.2022, 23.06.2022, 15.07.2022, 21.07.2022, 12.08.2022, 17.08.2022, 05.09.2022, 30.09.2022, 14.11.2022, 02.01.2022, 10.02.2023, 14.02.2023, and 28.03.2023.

Name of Director	Designation/ Category	Number of other directorship held	Number of other Board Committees of which member/ chairperson	Number of Board Meetings held during the tenure	Board Meetings attended	Attendance at the last AGM
Mr. Sameer Goel	Chairman & Managing Director & Chief Executive Officer	5	NIL	15	15	Yes
Mr.Jagdeep Dhawan	Independent Director	2	NIL	15	15	Yes
Mrs. Richa Gupta	Independent Director	NIL	NIL	15	8	Yes
Mr. Vipul Goel	Director	5	NIL	15	15	Yes

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI Listing Regulations 2015.

COMMITTEES OF BOARD

AUDIT COMMITTEE

The constitution of the Committee is in compliance with the provisions of Section 177 of the Companies Act, 2013. During the year under review, Four (4) meetings of the Audit Committee were held on 30.05.2022, 12.08.2022, 14.11.2022 and 13.02.2023.

The composition of the Committee is given in the table below:

Name & Designation	Designation	Category of Directorship
Mr. Jagdeep Dhawan	Chairman	Independent Director
Mrs. Richa Gupta	Member	Independent Director
Mr. Sameer Goel	Member	Managing Director & CEO

The Chairman of the Committee attended the last AGM of the Company. The Company Secretary acted as the Secretary to the Committee. The Statutory Auditors, Internal Auditors, Secretarial Auditors and other related functional executives of the Company also attended the meeting when required. Further, the Board has accepted all the recommendation of Audit Committee during the period.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee recommends the appointment of Directors and remuneration of such Directors other than Independent Directors. During the year under review, seven meetings of the Committee were held on 01.04.2022, 28.04.2022, 16.05.2022, 30.05.2022, 04.06.2022, 05.09.2022 and 10.02.2023.

The composition of the Committee is given below:

Name & Designation	Designation	Category of Directorship
Mr. Jagdeep Dhawan	Chairman	Independent Director
Mrs. Richa Gupta	Member	Independent Director
Mr. Vipul Goel	Member	Director

The Company Secretary is the Secretary of the Commitee.

NOMINATION AND REMUNERATION POLICY

In compliance with Section 178(3) of the Act, the Board framed a "Nomination, Remuneration and Evaluation Policy" on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director. Your Directors ensures that the Company follows a Policy on Remuneration of Directors and Senior Management Employees. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP and Senior Management employees.

The policy of the Company on Directors appointment and remuneration is uploaded on to the Companys website and the same is available at www.kimiabiosciences.com at the following path: https://www.kimiabiosciences.com/wp-content/ uploads/2020/10/1567424605 Nomination-and-Remuneration-Policy.pdf.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Securities Transfer & Stakeholders Relationship Committee considers and oversees resolution of grievances of security holders and investors of the Company.

During the year, the Committee met Eight (8) times on 15.06.2022, 23.06.2022, 02.07.2022, 21.07.2022, 28.07.2022, 14.02.2023, 15.02.2023 and 29.03.2023. Company effectuated all requests for transfer of shares, consolidation and issue of duplicate share certificate, within prescribed time limits.

The composition of the Committee is given in the table below:

Name & Designation	Designation	Category of Directorship
Mr. Jagdeep Dhawan	Chairman	Independent Director
Mrs. Richa Gupta	Member	Independent Director
Mr. Vipul Goel	Member	Non- Executive Director

The Company Secretary is a Secretary of the Commitee.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

In compliance with the provisions of Section 177(9) & (10) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of Listing Regulations, Company formulated a vigil Mechanism for Directors and employees to report concerns including any unethical behavior, actual or suspected frauds taking place in the Company for appropriate action thereon.

The Whistleblower policy has been hosted on Companys website viz. https://www.kimiabiosciences.com/wp-content/uploads/2023/03/ Whistleblower-Policy.pdf.

RISK MANAGEMENT POLICY

The Company has developed and implemented the Risk Management Policy and the Audit Committee of the Company reviewed the same periodically. The Company recognizes that risk is an integral and unavoidable component of business and hence is committed to managing the risk in a proactive and effective manner. The Companys Management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Risk Management System of the Company and are managed accordingly.

The common risks faced by the Company include Raw Material Procurement Risk, Environment & Safety Risk, Market Risk, Technology risk, Business Operational Risk, Reputation Risk, Regulatory & Compliance Risk, Human Resource Risk Working Capital and Business continuity Risk. Your Company has well defined processes and systems to identify, assess & mitigate the key risks. A platform for exception reporting of violations is in place which is reviewed regularly and remedial measures are being undertaken immediately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In compliance with Regulation 34(3) read with Schedule V(B) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis, forms part of this report as Annexure-I.

CEO/CFO CERTIFICATION

In accordance with the Regulation 17 (8) read with Part B of Schedule II to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to corporate governance norms. The said Certificate has been signed by the CEO of the Company along with CFO. The said certificate forms an integral part of this Annual Report as Annexure III. The certificate has been reviewed by the Audit Committee and taken on record by the Board of Directors.

BOARD EVALUATION

In compliance with the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rules, 2014, the Board carried out annual evaluation of its own performance, that of its Committees and individual directors.

The performance of the Board and its committees and individual directors were evaluated by the Board after seeking inputs from all the Directors on the basis of criteria, such as composition and structure of the Board, quality of deliberations, effectiveness of the procedures adopted by the Board, participation of the Board and committee meetings and governance reviews etc.

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Independent Directors of the Company have been updated with their roles, rights and responsibilities in the company to enable them to familiarize with Companys procedures and practices.

The Company endeavors to familiarize the Independent Directors with the strategy, operations and functioning of the Company and also with changes in the regulatory environment having significant impact on the operations of company and the Pharmaceutical Industry as a whole.

DECLARATION ON COMPLIANCE WITH CODE OF CONDUCT

The Board of Directors has laid down Code of Conduct for all Board Members and Senior Management of the Company. The copy of Code of Conduct as applicable to the Directors (including Senior Management of the Company) is uploaded on the website of the Company https://www.kimiabiosciences.com/wp-content/uploads/2023/03/Code-of-Conduct-for-Board-Members-and-Senior- Personnel.pdf.

The Managing Director of the Company has issued a Declaration that the Members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct of Board of Directors and Senior Management. The Declaration is appended to this Report at the end of Management Discussion and Analysis Report as Annexure IV.

PARTICULARS OF EMPLOYEES

The information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) & (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company forms part of this report as Annexure-V.

RELATED PARTY TRANSACTIONS

All the related party transactions entered into by the Company during the year were on arms length basis and in the ordinary course of business. Summarized particulars of contracts or arrangements entered into by the company with related parties are disclosed in Notes to Financial Statements for the year.

All related party transactions were placed before the Audit committee and that been reviewed and approved by the board of Directors. The policy on Related Party Transactions, as approved by the Board of Directors has been uploaded on the website of the Company https://www.kimiabiosciences.com/wp-content/uploads/2023/03/Policy_RTP.pdf.

The particulars of contracts or arrangements with Related Parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 is prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and is in Annexure-IX to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

a) That in preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) That the directors had selected such accounting policies and applied consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2023 and the loss incurred by Company for the year under review;

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the annual accounts for the year ended March 31,2023, have been prepared on a going concern basis.

e) That proper internal financial control was in place and that such internal financial controls are adequate and were operating effectively.

f) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review.

The Policies on Code of Conduct and Prevention of Workplace Harassment is displayed on companys website viz. www. kimiabiosciences.com. Your Directors state that during the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The disclosures to be made under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 by your Company are explained as under:

(A) CONSERVATION OF ENERGY-
(i) the steps taken or impact on conservation of energy	Kimia Biosciences limited recognises energy as the most precious resource and has been the precursor of the Indian Pharmaceutical Industry in energy conservation efforts. Following are the major energy conservation efforts implemented by the company in FY 2022-23:
(ii) the steps taken by the company for utilizing alternate sources of energy
(iii) the capital investment on energy conservation equipment	1. Replaced conventional bulb with LED lights for energy saving 2. Timer installation on street light for energy saving 3. Power factor improved by installation of capacitor and maintained the factor around 0.99.
(B) TECHNOLOGY ABSORPTION-
(i) the efforts made towards technology absorption	The Company is engaged in the process of updating latest Technology (ies).
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution	Processes develoDed for APIs: Key raw materials made In-House: Processes developed for APIs:
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-	Brivaracetam	Anticonvulsant anti-diabetic
	Dapagliflozin propane diol
	Delafloxacin meglumin	Antibiotic
(a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
	Rivaroxaban	Anticoagulant antihistamine
	Bilastine
	ADixaban Anti- coaqulant
	Benfotiamine Vitamin- B1
	Citocoline Sodium Central stimulant
	TeneligliDtin HBr Anti- diabetic
	SitagliDtin phosphate Anti- daibetic
	Monohydrate
	Obeticholic Acid Gastrointestinal Agent
	Fimasartan Trihvdrate Anti-Hvpertensive
	Potassium
	Cost Improvements:
	Benidipine HCL	calcium channel blocker
	Vildagliptin	anti-diabetic
	Luliconazole	Antifungal
	Bempedoic Acid Hvpercholesterolemia
	Bilastine antihistamine
	Citicoline Sodium Central stimulant
	Gliclazide Anti- Diabetic
	Kev raw materials made In-House:
	INB-Acetoacetate (Azelnidipine)
	OBI-6-Ene acid (Obeticholic acid)
	Prucalopride KSM-2 (Prucalopride)
	Bilastine KSM [Bil oxo] Bilastine
	Fima KSM [PYRIMIDINE AMIDE] Fimasartan
	Glycidyl phthalimide (Rivaroxaban)
	TPI-BOC (Tenligliptin) , 3-Hydroxy acetophenone [Lab] (Phenylephrine),
	Ethyl 2-Aminothiazole-4-carboxylate (Acotiamide)

 

(iv) the expenditure incurred on Research and Development	Revenue Expenditure	570.92 (in lakhs)
	Capital Expenditure	NIL

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO-

The total foreign exchange used and the total foreign exchange earned during the year as compared to the previous financial year has been provided hereunder:

Foreign Exchange Earnings & Outgo	Current Year (2022-23)	Previous Year (2021-22)
Inflow	30,07,789 USD	19,66,593 USD
Outflow	29,47,868 USD	8,075,765 USD

HUMAN RESOURCES

Your Company firmly believes that human resources are invaluable assets of the Company. Over the time, the Company has changed to adapt and evolve with the changing economic landscape, while keeping its core value firmly entrenched. The Human Resource Department of the organization has strategic and functional responsibilities for all of the Human Resource disciplines in the changing scenario.

On the Industrial front, the Company continued to foster cordial Industrial Relations with its workforce during the year. COMPLIANCE WITH SECRETARIAL STANDARDS

The Institute of Company Secretaries of India, a Statutory Body, has issued Secretarial Standards on Board and General Meetings. The Company has complied with all the applicable provisions of the Secretarial Standards (SS-1 and SS-2).

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the provisions of Section 135 of the Companies Act, 2013 are applicable to the Company. The Annual Report on Corporate Social Responsibility as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-X to this Report. Details pertaining to CSR Policy and composition of CSR Committee can be accessed from the Companys website https://www.kimiabiosciences.com/wp-content/uploads/2022/09/CSR-Policy-Kimia-V2.pdf.

The composition of the Committee is given in the table below:

Name & Designation	Designation	Category of Directorship
Mr. Jagdeep Dhawan	Chairman	Independent Director
Mr. Sameer Goel	Member	Managing Director & CEO
Mr. Vipul Goel	Member	Non Executive Director

MEMBERSHIP IN ASSOCIATIONS

The Company is a member of various forums and associations for actively participating in addressing global environmental concerns in continuation with our journey like previous years.

The list of associations in which Company has membership is mentioned below:

S.no.	Name of Association
1	Pharmaceutical Export Promotion Council of India (PHARMCIL)
2	Haryana Enviromental Management Society (HEMS)
3	Confederation of Indian Industry (CII)
4	Delhi Chamber of Commerce (DCC)
5	Federation of Pharma Entrepreneurs (FOPE)

CODE FOR PREVENTION OF INSIDER TRADING

The Company has instituted a comprehensive Code of Conduct for Prevention of Insider Trading, in compliance with Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. Further a Code of Fair Disclosure and Prevention of Insider Trading Code under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015 have been adopted and displayed on the website of the Company www.kimiabioscences.com.

These Codes lay down guidelines vide which it advises the designated employees and connected people on procedures to be followed and disclosures to be made, while dealing with the shares of the Company and caution them of the consequences of violations.

AUDIT AND AUDITORS OUTLOOK

STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

In terms of Section 139 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules, 2014 M/s Singhi & Co., Chartered Accountant firm (FRN 302049E) were re-appointed in 29th Annual General Meeting by the company for a period of 5 years.

The report of the Statutory Auditors along with Notes on Financial Statements for the year ended March 31,2023 is enclosed with this report, which is self-explanatory and do not call for any further comments. There is no qualified opinion in Audit Report.

Further, during the year, the Auditors has not reported any fraud u/s 143(12) of the Companies Act, 2013 and rules made there under.

INTERNAL AUDITOR

Apart from in-house Internal Audit function, to strengthen and maintain transparency, the Company had also re-appointed M/s. JKVS & Co., Chartered Accountants, (FRN No. 318086E), as Internal Auditors of the Company in the Board meeting held on 14.08.2023 in accordance with Section 138 of the Companies Act, 2013, to examine the effectiveness of internal control system.

Internal auditor is appointed to ensure, monitor and evaluate the efficacy and adequacy of the internal control system of the Company, its compliance with applicable laws/regulations, accounting procedures and policies. Based on the reports of the Internal Auditors, corrective actions will be undertaken, thereby strengthening the controls. Significant audit observations and action plans were presented to the Audit Committee of the Board on a quarterly basis.

SECRETARIAL AUDITORS REPORT

In terms of Section 204 of the Companies Act, 2013 and Rules made there under and upon receiving recommendation from Nomination & Remuneration committee, M/s. Rahul Chaudhary & Associates, Practicing Company Secretaries, New Delhi has been re- appointed as Secretarial Auditors of the Company for the financial year 2022-23 in the Board meeting held on 14.08.2023.

The report of the Secretarial Auditors for the year ended March 31, 2023 is enclosed as Annexure-II to this report.

As to other, the report is self-explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors on the recommendation of the Audit Committee, re- appointed M/s. Mahesh Singh & Co,

Cost Accountants (FRN: 100441), as the Cost Auditors of the Company for the Financial Year 2023-24 in the Board meeting held on 14.08.2023 under Section 148 of the Companies Act, 2013.

M/s Mahesh Singh & Co, Cost Accountants (FRN:100441), have confirmed that their appointment is within the limits of Section 141(3) (g) of the Companies Act, 2013 and have also certified that they are free from any

Disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.

The Company has also maintained relevant cost accounts and records as specified under Section 148(1) of the Companies Act, 2013.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members in a General Meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s.Mahesh Singh & Co, Cost Accountants, is included in the notice convening the 30th Annual General Meeting.

MATERIAL CHANGES AND COMMITMENT

1. The Company has been granted permission to manufacture and marketing of bulk new drug Bemopedoic acid Bulk Drug under New Drug and Clincial Trials Rules, 2019, under Drug & Cosmetics Acts, 1940 for manufacture and market of Bempedoic acid Bulk Drug. The permission has been granted by Directorate General of Health Services Central Drugs Standard Control Organisation (New Drug Division) vide letter dated 17.05.2022.

2. The Company has received DMF approval of Fimasartan Potassium Trihydrate, Active Pharmaceutical Ingredients (API) from Korea.

3. The Company is in process to install new reactors at the plant of the Company to increase life and safety of employees. The Company had allocated a projected budget for this project around 200 lakhs.

4. The Company had designed a framework for treating the industrial waste water for its reuse and safe disposal to the environment. In this reference, the management of the Company decided to take action in this regard for starting a new ETP project. The ETP project will increase our treating capacity of trade effluents. These project will increase the compliance standards of the Company. The management of the Company had allocated a budget for this project around 23 lakhs.

5. The management of the Company has taken a decision for installation of new Boilers at the site of the plant. The Technical Team explained the usage of the 3 TPH capacity Bioler and also explained the total project cost of the Boiler.

Except as mentioned above, there are no material changes and commitments affecting the financial position of the Company between the end of financial year of the Company and the date of this report.

ANNUAL RETURN

Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 (‘the Act) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Annual Return of the Company is available on the website under Investor Relations section of the company website i.e. www.kimiabiosciences.com.

PENALTIES IMPOSED DURING THE YEAR

During the Financial year 2022-23, a penalty of Rs. 104.80/- lakhs was imposed by the Haryana State Pollution control Board for non-compliance with certain regulations.

ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys executives, staff and workers.

Your Company has been able to operate efficiently during the year financial year because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilisation of the Companys resources for sustainable and profitable growth. To them goes the credit for all of the Companys achievements.

And to you, our Shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

		For and on behalf of the Board
		KIMIA BIOSCIENCES LIMITED
	Sd/-	Sd/-
Place : New Delhi	SAMEER GOEL	VIPUL GOEL
Date : 05.09.2023	Chairman & Managing Director & CEO	Director
	(DIN: 00161786)	(DIN: 00064274)