Your Directors have pleasure in presenting the 35th Annual Report of your
Company for the financial year ended 31st March, 2023.
FINANCIAL RESULTS
The financial performance of your Company for the year ended 31st March,
2023 is summarized below:
( H in million)
|
Standalone |
Consolidated |
|
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
| Gross Income |
1770.65 |
2196.26 |
1880.68 |
2385.57 |
| Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
(1879.36) |
(79.59) |
(1863.40) |
(67.91) |
| Finance Charges |
352.80 |
395.27 |
359.03 |
397.60 |
| Depreciation/Amortization |
1069.10 |
174.49 |
1084.07 |
182.82 |
| Net Profit Before Tax |
(3301.26) |
(649.35) |
(3306.51) |
(648.33) |
| Provision for Tax |
(21.17) |
(28.17) |
(21.17) |
(28.17) |
| Net Profit After Tax carried to Balance Sheet |
(3280.09) |
(677.52) |
(3285.33) |
(676.50) |
OVERVIEW OF COMPANYS FINANCIAL PERFOMANCE
On a consolidated basis, your Company reported for the current year total revenue of D
1880.68 million as against D2385.57 million. In the previous year EBITDA for FY2023 was
D(1863.40) million compared to D(67.91) million in the previous year. Net profit after tax
for the group for the current year is D(3285.33) million as against D(676.50) million in
the previous year.
Total revenue from operations on standalone basis decreased to D1770.65 million in the
current year as against D2196.26 million in the previous year. FY2023 EBITDA was
D(1879.36) million compared to D(79.59) million in the previous year. The Profit after Tax
for the current year is D(3280.09) million as against D(677.52) million in the previous
year.
COVID-19:
Pharmaceutical industry being part of the essential commodities was given special
permission by Indian government to operate with minimal manpower and maintaining social
distancing. The Company has followed the guidelines issued by the Government to run the
operations with complete cautious approach about the health and safety of the employees.
There is no material impact on the business of the Company during the year under review
due to Covid-19 pandemic.
OUTLOOK:
Business prospects may remain positive because of the growing global demand for
generics and opportunities provided by the expiry of patents in developed markets. Post
Covid-19, there may be new business opportunities for the pharmaceutical industry, in
particular, our company.
MANAGEMENT DISCUSSION & ANALYSIS:
Various business aspects including market conditions, business opportunities,
challenges etc. have been discussed at length in the Management Discussion and Analysis
(MD&A), which forms part of this Annual Report.
DIVIDEND
Due to loses, the board of directors of the company have not recommend any dividend for
the year FY2023.
TRANSFER TO RESERVES:
Due to loses your Company propose to transfer loses to Reserves.
MATERIAL CHANGES AFFECTING THE COMPANY:
There have been no material changes and commitments affecting the financial position of
the Company between the end of the financial year and date of this report. There has been
no change in the nature of business of the Company. The lead banker of the Company (SBI)
has filed petition against the Company for recovery of their dues in DRT & NCLT.
SHARE CAPITAL
The Authorised Share Capital of the Company is D111,00,00,000/- (Rupees One Hundred
Eleven Crores only) comprising 20,00,00,000 (Twenty crores) Equity Shares of D2/- (Rupees
Two Only) each, and 71,00,00 (Seven Lakh Ten Thousand only) Preference Shares of the
Company with a par value of D1,000/- (Rupees One Thousand only) each. The paid-up share
capital of the Company is D16,58,27,830/- (Rupees Sixteen Crores Fifty Eight lakhs Twenty
seven thousand Eight hundred and thirty only) comprising 8,29,13,915 (Eight crores Twenty
nine lakhs thirteen thousand nine hundred and fifteen only) Equity Shares of D2/- (Rupees
Two Only) each..
TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF):
During the year there are no transfer required to the IEPF.
SUBSIDIARIES / ASSOCIATE COMPANIES
The statement containing the salient features of the Financial Statements of the
Companys subsidiaries/ associate companies is given in Form AOC-1, provided in Notes to
the Consolidated Financial Statements, forming part of the Annual Report.
The highlights of performance of subsidiaries and associate companies and their
contribution to the overall performance of the Company during the financial year is given
under ‘Annexure 1 to the Consolidated Financial Statements forming part of the
Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr.Manohar
Rao Varalwar (Whole Time Director) of the Company, retires by rotation at the ensuing
Annual General Meeting and being eligible offers himself for re-appointment, the Board of
Directors on the recommendation of the Nomination and Remuneration Committee, has decided
to re-appoint Mr.Manohar Rao Varalwar, Director of the Company.
Mr.Subhash Varalwar (Non-executive non independent Director) of the Company.
Re-appointed as per Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure
Requirements), (Amendment) Regulations, 2018.
Ms.Aparna Bidarkar and Dr. Jamalapuram Harigopal, are the Independent Directors of your
Company in accordance with the provisions of the Companies Act, 2013 and SEBI (LODR) 2015
(including any statutory modification(s) or reenactment(s) for the time being in force).
Mr.Santosh Varalwar, Managing Director, Dr.Manohar rao Varalwar, Whole Time Director,
Mr.Sandeep Varalwar, Whole Time Director, Mr.Ramakanta Tripathy (Chief Financial Officer)
and Mr.K.Yugandhar, Company Secretary, are the Key Managerial Personnel of your Company in
accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including
any statutory modification(s) or reenactment(s) for the time being in force).
Your Company has received declarations from all the Independent Directors confirming
that they meet the criteria of independence as prescribed under the provisions of the
Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as
Regulation 16(1) (b) of Listing Regulations (including any statutory modification(s) or
re-enactment(s) for the time being in force).In the opinion of the Board, the Independent
Directors of the Company fulfil the conditions specified in the Act and Listing
Regulations and are independent of the management.
The Company has devised a Policy for performance evaluation of Independent Directors,
Board, Committees and other individual Directors which include criteria for performance
evaluation of the non-executive directors and executive directors.
The Board of Directors has complete access to the information within the Company.
Independent Directors have the freedom to interact with the Companys management.
Interactions happen during Board / Committee meetings, when CXOs are asked to make
presentations about performance of the Company to the Board. Apart from this, they also
have independent interactions with the Statutory Auditors, the Internal Auditors and
external advisors appointed from time to time. Further, they meet without the presence of
any management personnel and their meetings are conducted informally to enable the
Independent Directors to discuss matters pertaining to the Companys affairs and put forth
their combined views to the Board of Directors of the Company.
BOARD EVALUATION:
The Company has devised a Policy for performance evaluation of Independent Directors,
Board, Committees and other individual Directors which include criteria for performance
evaluation of the Non-Executive Directors and Executive Directors. Pursuant to the
provisions of the Companies Act, 2013 read with the Rules issued there under and the
Listing Regulations (including any statutory modification(s) or re–enactment(s) for
the time being in force), the process for annual evaluation of the performance of the
Board, its Committees and individual Directors was carried out in accordance with the
policies in force.
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.
DIVIDEND DISTRIBUTION POLICY:
The web link of the Dividend Distribution Policy has been provided below for the
perusal of the shareholders www.vivimedlabs.com/office_ data/
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.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of your Company for the financial year FY2023 are
prepared in compliance with applicable provisions of the Companies Act, 2013 read with the
Rules issued thereunder, applicable Accounting Standards and the provisions of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred
to as the "Listing Regulations").The consolidated financial statements have been
prepared on the basis of audited/ unaudited financial statements of your Company, its
subsidiaries and associate companies, as approved by the respective Board of Directors.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of Company
Secretaries of India.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, with respect
to the Directors Responsibility Statement, the Board of Directors of the Company hereby
confirm that:
a) in the preparation of the annual accounts for the year ended March 31, 2023, the
applicable accounting standards read with requirements set out under Schedule III to the
Act, have been followed and there are no material departures from the same;
b) the Directors 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 the Company as at March 31, 2023 and of the profit /
loss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a ‘going concern basis for
the financial year ended March 31, 2023;
e) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and are operating
effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems are adequate and operating effectively.
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.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND
PARTICULARS OF EMPLOYEES:
The remuneration paid to the Directors is in accordance with the Nomination and
Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013
and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including
any statutory modification(s) or re-enactment(s) for the time being in force). The salient
aspects covered in the Nomination and Remuneration Policy have been outlined in the
Corporate Governance Report which forms part of this report.
The Managing Director/ other whole time Directors of your Company does not receive
remuneration from any of the subsidiaries of your Company.
The information required under Section 197 of the Companies Act, 2013 read with
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of
Directors/ employees of your Company is set out in Annexure-2 to this report and is also
available on the website of your Company (www.vivimedlabs.com).
FAMILIARISATIONPROGRAMMEFORTHEINDEPENDENT DIRECTORS
In compliance with the requirements of Regulation 25(7) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a
Familiarisation Programme for the Independent Directors to familiarise them with the
Company, their roles, rights, responsibilities in the Company, nature of the industry in
which the Company operates, business model etc. The details of the Familiarisation
Programme conducted are available on the website of the Company www.vivimedlabs.com.
HUMAN RESOURCES:
The management believes that the 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. Annual sports and games were conducted across the
organization to enhance the competitive spirit and encourage bonding teamwork among the
employees.
LOANS, GUARANTEES & INVESTMENTS
Details of loans, guarantees and investments under the provisions of Section 186 of the
Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules,
2014, as on 31st March, 2023, are set out in the Standalone Financial
Statements forming part of this report.
INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference to
the financial statements, some of which are outlined below.
Your Company has adopted accounting policies which are in line with the Accounting
Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to
apply under Section 133 and other applicable provisions, if any, of the Companies Act,
2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance
with generally accepted accounting principles in India. Changes in policies, if any, are
approved by the Audit Committee in consultation with the Statutory Auditors.
The policies to ensure uniform accounting treatment are prescribed to the subsidiaries
of your Company. The accounts of the subsidiary companies are audited and certified by
their respective Statutory Auditors for consolidation.
Your Company operates in SAP, an ERP system, and has many of its accounting records
stored in an electronic form and backed up periodically. The ERP system is configured to
ensure that all transactions are integrated seamlessly with the underlying books of
account. Your Company has automated processes to ensure accurate and timely updation of
various master data in the underlying ERP system.
Your Company has a robust financial closure self-certification mechanism wherein the
line managers certify adherence to various accounting policies, accounting hygiene and
accuracy of provisions and other estimates.
Your Company operates a shared service center which handles all payments made by your
Company. This center ensures adherence to all policies laid down by the management.
Your Company in preparing its financial statements makes judgments and estimates based
on sound policies and uses external agencies to verify/ validate them as and when
appropriate. The basis of such judgments and estimates are also approved by the Statutory
Auditors and Audit Committee.
The Management periodically reviews the financial performance of your Company against
the approved plans across various parameters and takes necessary action, wherever
necessary.
Your Company has a code of conduct applicable to all its employees along with a Whistle
Blower Policy which requires employees to update accounting information accurately and in
a timely manner. Any non-compliance noticed is to be reported and actioned upon in line
with the Whistle Blower Policy.
Your Company gets its Standalone accounts limited review every quarter by its Statutory
Auditors.
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any deposit within the
meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or
re-enactment(s) for the time being in force).
CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of corporate governance and
adhere to the corporate governance requirements set out by Securities and Exchange Board
of India (SEBI). The report on Corporate Governance as stipulated under the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this
Report. The requisite certificate from the Secretarial Auditors of the Company confirming
compliance with the conditions of corporate governance is attached to the report on
Corporate Governance.
EMPLOYEES STOCK OPTION SCHEMES
The Company has granted 25,00,000 options to eligible employees under the Vivimed Labs
ESOP 2017 at D35/- per option (exercise price) in FY2019. The shares covered by such
options are 25,00,000 equity shares of D2/- each (face value).
Pursuant to regulation 13 of Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014, certificate from M/s. PCN & Associates,
Statutory Auditors is given as Annexure-3 to the Boards report.
Disclosure with respect to the Employees Stock Option Scheme in compliance with
Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
is available on the Companys website.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the regulators or courts or
tribunals which impact the going concern status and Companys operations in future.
INSURANCE:
All properties and insurable interests of the Company including buildings, plant and
machinery and stocks have been fully insured.
AUDITORS AND AUDITORS REPORT
(i) Statutory Auditors:
M/s. PCN & Associates, Chartered Accountants, (Firm Registration No.016016S), is
required to be appointed as the Statutory Auditors of the Company for a term of 4 (four)
consecutive years from the conclusion of this Annual General Meeting till the conclusion
of the 39th Annual General Meeting.
The Auditors Report for the financial year ended March 31, 2023, has been issued with
an unmodified opinion, by the Statutory Auditors.
During the year under review, there were audit qualifications on your Companys
financial statements. Annexture-A
(ii) Cost Auditors:
In accordance with Section 148 of the Companies Act, 2013 read with Companies (Audit
& Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendments Rules,
2014, the Company maintains the cost records in respect of its business.
Your Board has appointed M/s. A.S. Rao & Co, Cost Accountants, (Firm Registration
No.000326), 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 appointed Mr. N. V. S.S. Suryanarayana Rao, Practicing Company Secretary (Certificate
of Practice No.2886), 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 -4 to
this Report. There are no qualifications, reservations or adverse remarks in the
Secretarial Audit Report, except as mentions in Secretarial Audit Report.
DISCLOSURES:
Meetings of the Board
Six meetings of the Board of Directors were held during the year. The particulars of
meetings held and attended by each Director are detailed in the Corporate Governance
Report, which forms part of this Report.
Audit Committee
The Audit Committee comprises majority of Independent Directors namely Ms.Aparna
Bidarkar, Mr.Sandeep varalwar and Dr. Harigopal Jamalapuram as members. During the year
all the recommendations made by the Audit Committee were accepted by the Board.
Vigil Mechanism
The Company has a Vigil mechanism and a Whistle - blower policy in accordance with
provisions of the Act and Listing Regulations, under which the employees are free to
report violations of applicable laws and regulations and the Code of Conduct. Protected
disclosures can be made by a whistle blower through a dedicated e-mail, or a letter to the
Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed on the
Companys website at: www.vivimedlabs.com
Code of Conduct
A declaration regarding compliance with the code of conduct signed by the Companys
Managing Director is published in the Corporate Governance Report which forms part of the
annual report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure
-5 to the Boards Report.
Extract of Annual Return
The Extract of Annual Return as per the provisions of Section 92 of the Companies Act,
2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 is
annexed as Annexure -6 to this report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as
amended thereof, a statement showing the names and other particulars of the employees
drawing remuneration in excess of the limits set out in the said rules forms part of this
Report.
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 also forms part of this Report.
Maintenance of Cost Records specified by the Central Government under Section 148 of
the Companies Act, 2013
The Company has complied with the provisions relating to maintenance of Cost Records as
specified by the Central Government under Section 148 of the Companies Act, 2013 during
the year under review.
Policy on Sexual Harassment and Constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has a Policy on "Prevention of Sexual Harassment of Women at
Workplace" for the matters connected therewith or incidental thereto covering all the
aspects as contained under the "The Sexual Harassment of Women at Workplace
(Prohibition, Prevention and Redressal) Act, 2013" and constituted an Internal
Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
During the year under review, the Company has not received any complaints pertaining to
Sexual Harassment.
The Company regularly conducts awareness programs for its employees.
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.
General
Your Directors state that no disclosure or reporting is required in respect of the
following matters as there were no transactions on these items during the year under
review:
Details relating to deposits covered under Chapter V of the Act. Issue of equity shares
with differential rights as to dividend, voting or otherwise.
Issue of shares (including sweat equity shares) to employees of the Company under any
scheme save and except Employee Stock Option Scheme referred to in this Report.
The Company does not have any scheme of provision of money for the purchase of its own
shares by employees or by trustees for the benefit of employees.
No significant or material orders were passed by the Regulators or Courts or Tribunals
which impact the going concern status and Companys operations in future.
No fraud has been reported by the Auditors to the Audit Committee or the Board.
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-7. The details of related
party disclosures as stated in the notes to the financial statements forms part of this
annual report.
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 Projects and Programs undertaken by the Company during the year
under review have been provided in Annexure - 8 and forms part of this Report.
ACKNOWLEDGEMENTS
Your Directors wish to thank all stakeholders, employees and business partners,
Companys bankers, medical professionals and business associates for their continued
support and valuable cooperation.
The Directors also wish to express their gratitude to investors for the faith that they
continue to repose in the Company.
On behalf of the Board of Directors
For Vivimed Labs Limited
|
Sd/- |
Sd/ |
| Place: Hyderabad |
Manohar Rao Varalwar |
Santosh Varalwar |
| Date: 18th October, 2023 |
Whole time Director |
Managing Director |
|
DIN : 00059815 |
DIN : 00054763 |
+91-9892691696
