To
The Members of
Laurus Labs Limited
Your Directors have pleasure in presenting the 18th Annual Report of the
Company together with the Audited Financial Statements for the Financial Year ended 31st
March 2023.
Standalone and Consolidated Financial Highlights:
(Rs in crores)
|
Consolidated |
Standalone |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Gross Income |
6,041 |
4,936 |
5,773 |
4,707 |
| Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
1,594 |
1,436 |
1,487 |
1,299 |
| Finance Charges |
165 |
102 |
146 |
96 |
| Depreciation/Amortization |
324 |
251 |
301 |
235 |
| Net Profit Before Tax |
1109 |
1084 |
1051 |
975 |
| Provision for Tax |
312 |
252 |
291 |
225 |
| Net Profit After Tax carried to Balance Sheet |
797 |
832 |
760 |
750 |
| Interim Dividend |
-- |
-- |
107 |
107 |
Companys Affairs:
(i) Operations:
During the year under review, the Turnover of your Company increased fromRs4,936 Crores
toRs6,041 Crores which is around 22% growth with strong mix improvement led by significant
progress in CDMO-Synthesis business. This CDMO segment has grown by 136% contributing 36%
of total revenues this year as against 19% contribution of total revenues of previous
year. Similarly, API business and Bio segments have grown by more than 25% over the
previous year. However, FDF division has declined its sales by 39% due to less procurement
from Global agencies and adverse pricing, During the year under review –
Your Company expanding its business in CDMO segment by attracting more innovator
companies including some of the Big Pharma customers. Your company expects to enhance
business further from existing and new customers.
During the year, your Company has investedRs990 crores towards capex and expanded its
capacities significantly and further expansion plans of approximately anotherRs1,000
crores are scheduled to be implemented in FY 2023-24.
Filed and got approval NDA for novel HIV paediatric product based on new DP platform in
ODF.
Developed & optimized Continuous Flow technology in Lab & commercial scale
implementation is underway
The Company has acquired 26% Stake in Ethan
Energy to boost captive Renewable Energy power. The entire capacity of 10 MW power
shall be solely consumed by your Company.
During the year, the Company has also invested
18.40 crores towards second tranche investment in ImmunoACT which has completed its
phase-1 clinical trials in CAR T Technology in the treatment of liquid cancers and
progressing very well in its phase-II clinical trials.
Laurus Bio has completed its expansion plan and started its commercial operations in
its Unit-2 thereby boosted its sales reached 125 Cr mark.
The Company has spentRs211 crore on its R&D which is 3.5% of revenues. The Company
has also filed 6 DMFs and 6 ANDAs during the year.
The disruptions in business operations due to Covid-19 have been subsided during the
year and the Company has reached its normal operations level.
There was an unfortunate fire accident that took place in Unit-3 which has costed 5
precious lives of associates of the Company and the Company supported the families of
these associates in all possible ways including offer to provide employment to family
members. Further, the Company took all necessary steps to improve the safety measures to
avoid such incidents in future to the best extent possible.
(ii) Outlook:
Business prospects may remain positive due to higher prospects in CDMO business. Your
Company will realise more revenue from the non-ARV FDF business based on approval to lunch
products in developed markets. Your Company also expects to improve in overall ARV
business due to raising demand. However, there are still certain logistic and other
challenges in the light of global political tensions including
Russia-Ukrain war, signs of global economic recession etc.
Management Discussion & Analysis:
Various business aspects including market conditions, business opportunities,
challenges etc. have been discussed at length in the Managements Discussion and Analysis
(MD&A), which forms part of this Annual Report.
Dividend:
Your directors are pleased to inform you that the Board has declared the interim
dividend @ 40% (i.e.Rs0.80 per share of the face value ofRs2/- each) and paid to the
Shareholders in November, 2022 and the 2nd Interim dividend @ 60% (i.e.
1.20 per share of the face value ofRs2/- each) and being paid to the shareholders in
May, 2023 aggregating to 100% dividend i.e.Rs2/- per share of the face value ofRs2/- each
relating to the FY 2022-23.
Transfer to Reserves:
Your Company did not transfer any portion of profits to Reserves.
Share Capital:
During the year under review -
- Company has allotted 12,91,590 (Twelve Lakh ninety one thousand fivee hundred and
ninety only) equity shares ofRs2/- to various eligible employees of the Company under
Employee Stock Option
Schemes-2016 & 2018 upon exercise of their vesting rights in December, 2022. As a
result, the paid up share capital as on 17th December, 2022 stood at
107,73,01,850/- divided into 53,86,50,925 shares of
2/- each
- Mr. Venkata Ravi Kumar Vantaram, Promoter of the
Company has transferred some his shareholding to his partnership firm M/s. Leven
Holdings and as a result M/s. Leven Holdings has been inducted as the Promoter of the
Company. All the required compliances have been duly complied in this regard.
Change in the nature of the business, if any:
There is no change in the nature of the business of the Company or any of its
subsidiaries or associates, during the year under review, the Company has incorporated a
wholly-owned subsidiary named M/s. Laurus Specialty Chemicals Private Limited for
Specialty Chemicals Business.
Material Changes and commitments, affecting the financial position of the Company:
There are no material changes and commitments affecting the financial position of the
Company that have occurred between the end of the financial year of the Company to which
the financial statements relate and the date of the Report i.e. between March 31, 2023 to
April 27, 2023. Fixed deposits:
The Company did not accept any fixed deposits. Subsidiaries, Associates and Joint
Ventures:
During the year, the following activities took place at subsidiaries and/or associates
level: a) The Company has incorporated a wholly-owned subsidiary named M/s. Laurus
Specialty Chemicals Private Limited for Specialty Chemicals Business on December 01, 2022.
Therefore, at the end of the year, the status of the subsidiaries/associates is as
follows:
Name of the Holding Company |
Name of the Subsidiary |
% shareholding |
Status |
| Laurus Labs Limited |
Sriam Labs Pvt Ltd |
100% |
WOS * |
|
Laurus Holdings Limited, United Kingdom |
100% |
WOS |
|
Laurus Synthesis Pvt Ltd. |
100% |
WOS |
|
Laurus Generics (SA) Pty Ltd. |
100% |
WOS |
|
Laurus Specialty Chemicals Pvt. Ltd. |
100% |
WOS |
|
Laurus Bio Pvt Ltd. |
76.60% |
Subsidiary |
|
Immunoadoptive Cell Therapy Private Limited |
26.62% |
Associate |
|
Ethan Energy India Private Limited |
26% |
Associate |
| Laurus Holdings Ltd., UK |
Laurus Generics GmbH, Germany @ |
100% |
WOS |
|
Laurus Generics Inc., USA @ |
50.76% # |
Subsidiary |
* WOS means Wholly Owned Subsidiary
@ Laurus Generics GmbH, Germany and Laurus Generics Inc., are step-down subsidiaries of
Laurus Labs Limited # Balance 49.24% is held by your Company.
As per Sec.129(3) of the Companies Act, 2013 the consolidated financial statement of
the Company and all its Subsidiaries and Associates prepared in accordance with the
applicable accounting standards forms part of this Annual Report. Further, a statement
containing salient features of the financial statements of our subsidiaries and associates
in the prescribed form in AOC-1 is attached as Annexure-1 to the Directors Report.
Consolidated financial Statements:
Consolidated Financial Statements have been prepared by the Company in accordance with
the requirements of applicable Accounting Standards and the provisions of Companies Act,
2013. As per the provisions of Section 136 of the Companies Act, 2013, the Company has
placed separately the audited financial statements of its subsidiaries on its website
www.lauruslabs.com and copies of audited financial statements of the subsidiaries will be
provided to the Members at their request.
Particulars of Loans, Guarantees and Investments:
The Company has also issued a Corporate Guarantee to the Bankers for the loans
sanctioned to Laurus Synthesis
Private Limited and for Laurus Bio Private Limited and the guarantees provided are well
within the limits prescribed under Sec.186 of the Companies Act, 2013.
Board of Directors and Key Management Personnel:
As per the provisions of the Companies Act, 2013, Dr.
Satyanarayana Chava and Dr. Chunduru Venkata Lakshmana
Rao will retire at the ensuing annual general meeting and, being eligible, seek
reappointment. The Board of Directors recommends their re-appointment.
Board Meetings:
The Board and Committee meetings are pre-scheduled and a tentative calendar of the
meetings shall be finalized in consultation with the Directors to facilitate them to plan
their schedule. However, in case of urgent business needs, approval is taken by passing
resolutions through circulation.
During the year under review, five board meetings were held. The details of the
meetings including the composition of various committees are provided in the Corporate
Governance Report.
Performance Evaluation:
The formal annual evaluation of the performance of the
Board as well as non-independent directors was undertaken by the Nomination and
Remuneration Committee. The performance of Board Committees and of individual independent
directors was undertaken by the Board members.
The manner of the evaluation of the Board and other Committees has been determined by
the Nomination and Remuneration Committee as per SEBI circular dated January 05, 2017.
Declaration from Independent Directors:
The independent directors have submitted the declaration of independence stating that
they meet the criteria of independence as prescribed in sub-section (6) of Section 149 of
the Companies Act, 2013 as well as under Regulation 16(1)
(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Policy on Directors Appointment and Remuneration:
The policy of the Company on directors appointment and remuneration, including
criteria for determining qualifications, positive attributes, independence of a director
and other matters are adopted as per the provisions of the Companies Act, 2013. The
remuneration paid to the Directors is as per the terms laid out in the nomination and
remuneration policy of the Company. The nomination and remuneration policy is adopted by
the Board and the salient features of the policy are as follows:
Non-Executive and Independent Directors ("NEDs") will be paid
remuneration by way of sitting fees and commission. The remuneration/ commission/
compensation to the NEDs will be determined by the Nomination and Remuneration Committee
("Compensation Committee") and recommended to the Board for its
approval.
As approved by the shareholders at the shareholders meeting held on July 20, 2016,
commission will be paid at a rate not exceeding 1% per annum of the profits of the Company
computed in accordance with section 198 of the Act.
The payment of the Commission to the NEDs will be placed before the Board every year
for its consideration and approval. The sitting fee payable to the NEDs for attending the
Board and Compensation Committee meetings will be fixed, subject to the statutory ceiling.
The fee will be reviewed periodically and aligned to comparable best in class companies.
NEDs will not be eligible to receive stock options under the existing employee stock
option scheme(s)
(" ESOP") of the Company.
The compensation paid to the executive directors
(including the Managing Director) will be within the scale approved by the
shareholders. The elements of the total compensation, approved by the Compensation
Committee will be within the overall limits specified under the Act.
The Companys total compensation for Directors and Key Managerial Personnel as defined
under the Act / other employees will consist of: o fixed compensation o variable
compensation in the form of annual incentive o benefits o work related facilities and,
perquisites
Changes made to the policy: Nil
The Nomination and Remuneration Policy is placed on the Companys website and the
following is web address of the said policy.
http://www.lauruslabs.com/sites/all/themes/lauruslab//
Investors/PDF/Policies/Remuneration_Policy.pdf
Dividend Distribution Policy:
The web link of the Dividend Distribution Policy has been provided below for the
perusal of the shareholders. https://lauruslabs.com/Investors/PDF/Policies/Dividend_
Policy.pdf.
Risk Management:
Your Company had formulated a risk management policy for dealing with different kinds
of risks that it faces in the day-to-day operations of the Company. Risk Management Policy
of the company outlines different kinds of risks and risk mitigating measures to be
adopted by the Board. The Company has adequate internal financial control systems and
procedures to mitigate the risk. The risk management procedure is reviewed by the Risk
Management Committee and Board of Directors on a regular basis at the time of review of
quarterly financial results of the Company. Further, your Company had constituted a Risk
Management Committee which lays down various risk mitigating practices that your Company
is required to implement in the Company.
Adequacy of Internal Financial Controls:
The internal financial controls with reference to the Financial Statements, apart from
statutory audit, internal audit and cost compliance, are adequate to the size and
operations of the Company.
Directors Responsibility Statement:
In terms of Section 134(3)(c) of the Companies Act, 2013, the Board of Directors of the
Company states that: (a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures; (b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of Companies Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; (d)
the directors had prepared the annual accounts on a going concern basis; (e) the directors
had laid down internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operative effectively; and (f) the
directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operative effectively.
Related Party Transactions:
In accordance with Sec 134(h) of the Companies Act, 2013 and Rule 8(2) of Companies
(Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the
Company with the Related Parties referred to in Sec.188(1) of the Act, have been provided
in Form AOC-2 and attached the same as Annexure-2 The details of related party
disclosures as stated in the notes to the financial statements forms part of this annual
report. Vigil Mechanism:
The Company established a whistleblower policy in order to assure that the business is
conducted with integrity and that the Companys financial information is accurate. Auditors:
(i) Statutory Auditors:
M/s. Deloitte Haskins & Sells LLP, Firm Registration
No.117366W/W-100018 have been appointed as Statutory Auditors of the Company for the
second term of Five years from the conclusion of 17th AGM till the conclusion of 22nd AGM
of the Company at a remuneration to be decided by the Board.
(ii) Cost records and Auditors:
The Company is required under Section 148(1) of the
Companies Act, 2013 read with Companies (Audit
& Auditors) Rules, 2014 and the Companies (Cost
Records and Audit) Amendments Rules, 2014, the 85
Company is required to maintain the cost records in respect of its business and
accordingly such accounts and records are made and maintained.
Your Board has re-appointed M/s. Sagar & Associates,
Cost Accountants, as the Cost Auditors of the
Company for the Financial Year 2023-24. As required by the Act, the remuneration of the
Cost Auditors has to be ratified by the Members and accordingly the resolution relating to
the Cost Auditors is being placed before the Members for their ratification.
(iii) Secretarial Auditors & Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company
has re-appointed Y. Ravi Prasada Reddy, Practising Company Secretary
(CP No. 5360) proprietor of RPR & Associates, to undertake the Secretarial Audit of
the Company for the financial year 2022-23. The Secretarial Audit Report issued in Form
MR-3 is in Annexure-3 to this
Report. There are no qualifications, reservations or adverse remarks in the Secretarial
Audit Report.
Auditors Qualifications/reservations/adverse remarks/ Frauds reported:
There are no Auditors Qualifications or reservations or adverse remarks on the
financial statements of the
Company. The Auditors have not reported any frauds to the
Audit Committee as prescribed under Sec. 143(12) of the Companies Act, 2013.
Significant and material orders passed by the Courts/ Regulators:
There are no significant and material orders passed by the Courts or Regulators against
the Company.
Rating:
CARE has revised and improved its rating of "AA- with outlook Positive" to
"AA with Stable outlook" on the long term bank facilities of the Company and
Reaffirmed A1+ on the short term bank facilities of the Company.
Insurance:
All properties and insurable interests of the Company including buildings, plant and
machinery and stocks have been fully insured.
Corporate Social Responsibility initiatives:
Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013,
CSR Committee of the Board of Directors had framed the policy on Corporate Social
Responsibility and the relevant details have been provided in Annexure-4 and forms
part of this Report. Annual Return:
As required pursuant to section 92(3) of the Companies
Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014
(as amended), a copy of the Annual Return of the Company shall be placed on the Website of
the Company at www.lauruslabs.com.
Statement of Particulars of Appointment and Remuneration of Managerial Personnel/
employees:
In accordance with the provisions of Section 134 and Rule 5 of Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the statement of particulars of
appointment and remuneration of managerial personnel and employees is attached in Annexure-5
to this Report.
Human resources:
The management believes that competent and committed human resources are vitally
important to attain success in the organization. In line with this philosophy, utmost care
is being exercised to attract quality resources and suitable training is imparted on
various skill-sets and behavior. Various initiatives were undertaken to enhance the
competitive spirit and encourage bonding teamwork among the employees and could achieve
the targeted growth in the performance of the Company. Employee Stock Options:
During the year, the Company has allotted 12,91,590
(Twelve Lakh ninety one thousand five hundred and ninety only) equity shares ofRs2/- to
various eligible employees of the Company under Employee Stock Option Schemes-2016 &
2018 upon exercise of their vesting rights in December, 2022.
The details of stock options are as mentioned in Annexure-6 and forms part of this
Report. Further, the details of the stock options stated in the notes to accounts of the
financial statements also forms part of this Annual Report.
Conservation of energy, technology absorption and foreign exchange earnings/outgo:
The information required under Section 134 (3) (m) of the
Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014, is
appended hereto as Annexure-7 and forms part of this Report.
Policy on Prevention of Sexual Harassment:
The Company has formulated and implemented a policy for
Prevention of Sexual Harassment of Women at workplace.
During the year under review, the Company has not received any complaints under the
policy.
The Company has many systems, processes and policies to ensure professional ethics and
harmonious working environment. We follow Zero Tolerance towards Corruption and unethical
conduct. These are ensured through Whistle Blower Policy, Anti-Corruption Policy, Gift
Policy, Sexual Harassment Policy and Redressal Guidelines. The 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. BSE 200:
The Equity Shares of your Company have been inducted in S&P BSE 200 indices with
effect from December 20, 2021
Corporate Governance:
A separate section on Corporate Governance practices followed by your Company, as
stipulated under Schedule
V(C) of the SEBI (LODR) Regulations, 2015 is enclosed and forming part of this report.
The certificate of the Practising Company Secretary Mr.Y.Ravi Prasada Reddy with regard
to compliance of conditions of corporate governance as stipulated under Schedule V (E) of
the SEBI (LODR) Regulations, 2015 is annexed to the Report on Corporate Governance.
Business Responsibility and Sustainability Report (BRSR)
The Listing Regulations mandate the inclusion of the BRSR as part of the Annual Report
for top 1000 listed entities based on market capitalization. In accordance with the
Listing
Regulations, we have integrated BRSR disclosures into our Annual Report. Awards:
During the period under review your Company and the top level management has achieved
the following accolades to suit up their efforts for all these years:
Dr.Satyanarayana Chava, Founder & CEO has been recognized by Fortune Magazine
as one of the Indias Top CEOs in the 2022.
Dr.Satyanarayana Chava, Founder & CEO has been recognized by Business Today as
one of the Best CEOs in India for the year 2022.
Your Company was recognized as one of the "Top 15", Indias Best Work
Places in Pharmaceuticals, Healthcare and Biotech
2022
Your Company was certified as "Great Place to Work" for the 5th
consecutive year
Your Companys, Unit-6 has won the CII Industrial Safety Excellence Award 2022 in
recognition of Best EHS Innovative practices
Your Companys, Unit-5 received, two CII awards for Industrial Safety &
Environment Your Company won Tevas "Best Supplier of the Year 2022" Award,
across all the categories.
Acknowledgements:
Your Directors would like to place on record their sincere appreciation to customers,
business associates, bankers, vendors, government agencies and shareholders for their
continued support. Your Directors are also happy to place on record their sincere
appreciation to the co-operation, commitment and contribution extended by all the
employees of the Laurus family and look forward to enjoying their continued support and
cooperation.
| For and on behalf of the Board of Directors |
|
|
LAURUS LABS LIMITED |
|
|
Dr. Satyanarayana Chava |
V.V. Ravi Kumar |
|
| Executive Director & Chief Executive Officer |
Executive Director & Chief Financial Officer |
|
| DIN: 00211921 |
DIN: 01424180 |
|
|
G.Venkateswar Reddy |
|
|
Company Secretary |
|
| Place: Hyderabad |
|
|
| Date: April 27, 2023 |
|
|
+91-9892691696
