TO THE MEMBERS:
The Directors have pleasure in presenting the 39th Annual Report on the business and operations along with audited standalone and consolidated financial statement of accounts of the Company for the financial year ended on 31st March 2024.
1. FINANCIAL RESULTS
The financial results of the company for the year under review are as under:
(INR in Lakhs)
The stand alone and consolidated financial statement of the Company have been prepared in accordance with the Indian Accounting Standards ('Ind AS') as notified under the Companies (Indian Accounting Standard) Rules, 2015 as amended.
2. DIVIDEND
Your Directors have recommended final dividend of INR 8.75/- per equity share i.e. 875 % on equity shares of INR 1 each for the financial year ended on 31st March 2024. The dividend, if approved at the ensuing Annual General Meeting ('AGM'), will be paid to those members whose names appear in the Register of Members as on close of 22nd of June 2024. The total dividend payout will be approximately INR 91.54 Crores.
Pursuant to Regulation 43 A (1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the Board has formulated and adopted Dividend Distribution Policy which has been hosted on the website of the Company https://www.concordbiotech.com/public/assets/pdf/Concord-Biotech-Limited-Dividend-Distribution- Policy.pdf
3. RESERVES
The Board does not propose to carry any amount to the reserves for the financial year ending 31st March 2024.
4. MANAGEMENT DISCUSSION AND ANALYSIS.
Pursuant to Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report for the year under review, is forming part of the Annual Report.
5. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
The Business Responsibility and Sustainability Reporting ('BRSR'), originating from the MCA report on Business Responsibility Reporting, had found its way into the regulatory provisions by way of an amendment to the Regulation 34(2)(f) of the SEBI Listing Regulations, notified on May 05, 2021. SEBI has made BRSR mandatory for the top 1000 (one thousand) listed entities by market capitalisation with effect from Financial Year 2022-23 and your Company forms part of the top thousand companies. Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the BRSR Report for the year under review, is forming part of the Annual Report
6. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated by Regulation 34(3) read with Schedule V(C) of the Listing Regulations, a report on Corporate Governance forms part of the Integrated Report. In terms of Schedule V(E) of the Listing Regulations, Auditors' certificate confirming compliance with the conditions of corporate governance is annexed to the Corporate Governance Report. The Company is committed to maintain the highest standards of corporate governance and set an benchmark itself. We believe in adherence to good corporate practices and implementing effective policies at all levels. Management Discussion & Analysis Report, in terms of Regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015 is made part of this report.
7. LISTING ON STOCK EXCHANGES
In order to achieve the benefits of listing the Equity Shares on the Stock Exchanges, give exit to the existing Investors coupled with enhancement and visibility of your Company as well as provide a public market for the Equity Shares in India the shares of the Company were listed on the stock exchange through an offer of sale by the Investors. On account of issue being an offer of sale, no fresh funds were received in the Company. The shares of the Company were traded on the stock exchange from 18th August, 2023.
8. MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments have occurred between the end of financial year and date of the report, which could affect financial position of the Company.
9. INTERNAL CONTROL SYSTEM
Your Company has strong Internal Controls and Risk Assessment/ Management systems. These systems enable the Company to comply with Internal Company policies, procedures, standard guidelines and local laws to help protect Company's Assets and Confidential information against financial losses and unauthorised use. Further, M/s Manubhai & Shah LLP, Chartered Accountants, have been appointed as Internal Auditor of the Company.
10. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
Concord Biotech Japan KK based out in Japan is an associate Company in which Company holds 50 % Stake.
Pursuant to provisions of Section 129(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Concord Biotech Japan KK an Associate Company, in Form AOC-1 is attached to the financial statements of the Company.
11. ANNUAL RETURN
As per provisions of Section 92(3) Annual Return of the Company for the financial year ended on 31st March 2024 is placed on the website of the Company and the same can be accessed through https://www.concordbiotech.com/investors
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of Loans, Guarantees and Investment covered under Section 186 of the Companies Act, 2013 appear in the notes to the financial statement.
13. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 152 (6) of the Companies Act, 2013 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force) Mr. Ravi Kapoor, Director of the Company is liable to retire by rotation, and being eligible, offer himself for re-appointment. The Board of Directors in it's meeting held on May 23, 2024 on the recommendations of the Nomination and Remuneration Committee (NRC) further recommends to the members of the Company for reappointment of Mr. Ravi Kapoor (DIN: 00003847) as Director. Necessary resolution for his appointment is therefore proposed in the ensuing Annual General Meeting.
During the year, following changes have been occurred in Directorship of the Company:
• Mr. Amit Varma has resigned from the Directorship of the Company w.e.f. 19th August 2023
• Mr. Anil Katiyal has resigned from the Directorship of the Company w.e.f. 25th August 2023
• Mr. Utpal Sheth has resigned from the Directorship of the Company w.e.f. 30th September 2023
Mr. Sudhir Vaid was reappointed as Chairman and Managing Director of the Company w.e.f. 1st April 2024 for a period of 5 years and Mr. Ankur Vaid was reappointed as Joint Managing Director and CEO of the Company w.e.f. 1st June 2024 for a period of 5 years. There were no other changes in Key Managerial Personnel of the Company during the year under review.
14. DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section read with Schedule IV of the Companies Act, 2013.
15. NO. OF MEETINGS OF THE BOARD OF DIRECTORS
There were total Eight (8) meetings of the Board of Directors of the Company held during the financial year from April 01, 2023 to 31st March 2024 on following dates:
16. DEPOSITS
The Company has not accepted any deposits during the period under review and there are no outstanding deposits as on 31st March 2024. There have been no matured deposits remaining unpaid at the year-end.
17. PARTICULARS OF CONTRACTS OR ARRAGEMENTS WITH RELATED PARTIES
The particulars of every contract or arrangements entered into by the Company with related parties referredto in sub section (1) of section 188 of the CompaniesAct, 2013 including arms length transactions underthird proviso thereto is annexed in Annexure I.
18. INFORMATION PURSUANT TO SECTION 134 OF THE
COMPANIES ACT, 2013
a. Conservation of energy and technology absorption.
I nformation pursuant to clause (m) sub-section (3) of section 134 of The Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and forming part of this report are given in the Annexure II.
b. The details of foreign exchange earnings and outgo are annexed in Annexure II.
19. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act, 2013 the Directors confirm the following:
i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.
ii. Your Directors had selected such accounting policies and applied them consistently and made judgements 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 of the Company for that period.
iii. Your Directors had 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.
iv. Your Directors had prepared the attached Annual Accounts for the year ended on 31st March 2024 on a going concern basis.
v. Your Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.
vi Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
20. DETAILS OF COMMITTEE OF DIRECTORS:
Detailed note on Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors, CSR Committee, Finance & Investment Committee and Stake Holders Relationship Committee of Directors, number of meetings held of each Committee during the financial year 2022-23 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report.
21. PARTICULARS OF EMPLOYEES:
Company does not have any employees who is drawing remuneration in excess of limit prescribed under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The information required under section 197(12) of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, attached as "Annexure- III"
The statement containing the names of top ten employees will be made available on request sent to the Company on complianceofficer@concordbiotech.com.
22. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished as attached to this report. "Annexure - IV". The weblink for the same is https://www. concordbiotech.com/public/assets/pdf/Concord- Biotech-limited-Nomination-and-Remuneration- Policy.pdf
23. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating interse board members, effective participation, domain knowledge, compliance with code of conduct, visionand strategy, benchmarks established by global peers, etc., which is in compliance with applicable laws, regulations and guidelines.
The Board carried out annual performance evaluation of the Board, Board Committees and Individual Directors and Chairman. The Chairman of the respective Board Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Board Committees.
The reports on performance evaluation of the Individual Directors were reviewed by the Chairman of the Board.
I n compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the performance evaluation was carried out as under Board:
Board:
In accordance with the criteria suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria specified by Companies Act, 2013. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.
Committees of the Board:
The performance of the Audit Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act, the Rules framed there under and the SEBI (l isting Obligations and Disclosures Requirements) Regulations, 2015.
Individual Directors:
Independent Directors: -
In accordance with the criteria suggested by the Nomination and Remuneration Committee, the performance of each Independent Director was evaluated by the entire Board of Directors (excludingthe Director being evaluated) on various parameters like engagement, leadership, analysis, decision making, communication, governance and interest of stakeholders. The Board was of the unanimous view that each Independent Director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also appreciated the contribution made by all the Independent Directors in guiding the management in achieving higher growth and concluded that continuance of each Independent Director on the Board will be in the interest of the Company.
Non-Independent Directors: -
The performance of each of the Non-Independent Directors (including the chairman) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance and interest of stakeholders. The Independent Directors and the Board were of the unanimous view that each of the nonindependent directors was providing good business and people leadership.
24. CORPORATE SOCIAL RESPONSIBILITY:
The details of policy developed and implemented by the Company on Corporate Social Responsibility is available on website of Company at www. concordbiotech.com. Further Annual Report on CSR activities pursuant to Rule 8 of Companies (Corporate Social Responsibility policy) Rules, 2014 as amended is attached as "Annexure-V" to this report.
25. SECRETARIAL AUDIT REPORT
Pursuant to Section 204 of the Act, the Secretarial Audit Report for the Financial Year ended on 31st March 2024 provided by Mr. Ashish Shah of M/s. Ashish Shah & Associates, Practicing Company Secretary is annexed herewith as "Annexure-VI" to this Report.
26. AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, (Firm Registration No. 117365W) were reappointed in the Annual General Meeting of Financial Year 201819 for a second term of 5 consecutive years from the Annual General Meeting of Financial Year 2018-19 till the conclusion of the Annual General Meeting for the FY 2023-24. M/s. Deloitte Haskins & Sells, Chartered Accountants, (Firm Registration No. 117365W) are not eligible to be re-appointed as Statutory Auditor ofthe Company as they have completed their term of appointment in the Company.
M/s. BSR & Co. LLP Chartered Accountants, being eligible has offered themselves for appointment as Statutory Auditor of the Company and has provided consent cum eligibility letter to the Company. The Board of Directors of the Company at its meeting held on 23.05.2024 has approved the appointment of M/s. BSR & Co. LLP, Chartered Accountants for a period of five years from the conclusion of this Annual General Meeting till the conclusion of 44th Annual General Meeting to be held in the year 2029. The Company now requests you to pass the resolution for appointment of M/s. BSR & Co. LLP Chartered Accountants as Statutory Auditors of the Company.
27. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND SECRETARIAL AUDITOR
There are no qualifications or comments by the Statutory Auditors and Secretarial Auditors which require any explanation from the Directors.
28. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE.
There are no material orders passed by the Regulators, Courts, and tribunals impacting going concern status and the Company's operations in future.
29. VIGIL MECHANISM:
I n Compliance with the provisions of Companies Act, 2013, the Company has established a vigil mechanism and overseas through the Committee, the genuine concerns about unethical behavior expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimisation of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The board has approved a policy for vigil mechanism which has been hosted on the website of the Company.
30. RISK MANAGEMENT POLICY OF THE COMPANY:
The Company has structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimise its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section
31. INCREASE AND SUB DIVISION IN AUTHORISED SHARE CAPITAL:
There were no changes in Authorised Share Capital of the Company during the year.
32. INCREASE IN ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL:
There were no changes in the Paid-Up Share Capital of the Company during the year.
33. MAINTENANCE OF COST RECORDS AS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SUB SECTION(1) OF SECTION 148 OF THE COMPANIES ACT, 2013 AND STATUS OF THE SAME:
M/s. Dalwadi & Associates, Cost Accountants have been duly reappointed as Cost Auditors of the Company for the FY 2023-24. The cost records as specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013 are made and maintained by the Company.
34. CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has established an Internal Complaint Committee under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, there were no incidences of sexual harassment reported.
35. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHAR THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:
No frauds have been noticed or reported during the year under audit report which are reportable to the Central Government.
36. HUMAN RESOURCES
The employees have played a major role in the performance of the Company over the years. They will continue to be the Company's pillars of strength in the years to come as proper training and exposure to the new products will be forthcoming. Industrial relations in the Company were amicable throughout the year under review.
37. COMPLIANCE WITH SECRETARIAL STANDARDS:
Your Directors confirm that, Company complies with applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
38. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE FINANCIAL YEAR:
During the year under review, the Company has not made any application before the National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against customer and there is no pending proceeding against the Company under Insolvency and Bankruptcy Code, 2016.
39. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF DURING THE FINANCIAL YEAR:
It is not applicable to the Company, during the financial year.
40. ACKNOWLEDGEMENT
The Directors wish to express their gratitude towards the Bankers of the Company for the cooperation provided by them throughout the year. The Directors also place on record the trust put in by the members in the management of the Company. Your Directors are also grateful to all the agencies, customers, suppliers and all other concerned persons, who have cooperated in the business of the Company.
Sudhir Vaid