To the Members of 3B BlackBio Dx Limited (Formerly, Kilpest India Limited),
The Directors hereby present their Fifty-Second (52nd) Annual Report on the business and operations of 3B BlackBio Dx Limited (Formerly, Kilpest India Limited) ('the Company' or '3B BlackBio') together with the Standalone and Consolidated Audited Financial Statements for the Year ended on 31st March 2024.
FINANCIAL RESULTS
The Company's financial performance for the year ended 31st March 2024 is summarized below (Consolidated):
(Rs. in Lakhs)
*Net of GST
As per Hon'ble National Company Law Tribunal Order dt. 09th August 2023, the scheme of Amalgamation of 3B BlackBio Biotech India Limited (Transferor Company) with Kilpest India Limited (Transferee Company) was approved.
Subsequently, the name of the Amalgamated Company was changed to 3B BlackBio Dx Limited, which was also mentioned in the scheme.
Now the company has one subsidiary, namely, TRUPCR? Europe Limited, based in Manchester.
Therefore, the financial figures shown above are re-classified /regrouped accordingly.
OVERVIEW OF COMPANY'S PERFORMANCE FOR THE YEAR 2023-24 Performance in Molecular Diagnostics
The Indian molecular diagnostics market is expected to growing at rapidly. This robust growth in the Indian molecular diagnostics market can be attributed to several key factors. Firstly, the rising prevalence of infectious diseases, cancer cases and genetic disorders is driving demand for advanced diagnostic solutions. Secondly, significant advancements in molecular technologies, such as polymerase chain reaction (PCR), next-generation sequencing (NGS), and digital PCR, are enhancing the accuracy, speed, and efficiency of diagnostic tests. Thirdly, there is increasing use of companion diagnostics to determine the suitability of specific therapies for patients based on their genetic makeup. Increased healthcare expenditure from both government and private sectors is also supporting the development and deployment of molecular diagnostic technologies. Programs such as the Pradhan Mantri Jan Arogya Yojana (PM-JAY) and other health schemes are enhancing access to diagnostic services, including molecular diagnostics.
The diagnostics division of your company is engaged in Design, Development Manufacturing and Commercialization of qPCR tests, Rapid tests, NGS based Molecular Diagnostic Kits and Extraction Kits for reliable testing on patient samples.
With the largest range of Indian IVD and CE-IVD products in the molecular diagnostics segment and our growing portfolio, we are considered as one of the leading molecular diagnostic kit manufacturers not only in India but also in the international markets.
In the molecular diagnostics division, our sales have been increasing at a rate of 25%-30% as evident in the numbers below. We have been consistently growing in our Non-COVID sales for the past four (4) years.
*Sales for FY 2020-21 have not been considered as it was COVID Year.
However, the total sales including COVID for the Molecular Diagnostics division was ^6,085.20 Lakh in FY 2023-24 against ^5,051.61 Lakh in FY 2022-23 (including sales from the UK subsidiary - TRUPCR? Europe Limited).
International Business / Exports
TRUPCR? assays have garnered widespread acceptance in more than 60 countries spanning the UK, Europe, the Middle East, APAC, LATAM, and North America (including the United States and Canada). Efforts are underway to continuously enhance our global presence by appointing new channel partners in various countries, thereby augmenting our international reach.
Product registrations have been successfully completed in several countries, with ongoing processes in many others to comply with respective medical devices regulations. These registrations facilitate streamlined market access and preference in the identified regions.
Participation in the international tenders, both independently and through our distributors, has resulted in securing annual rate contracts for our assays in select markets across the Middle East, Southeast Asia, and Europe. These contracts fortify our market position and contribute to the overall value of our business on a global scale. Moreover, ongoing discussions with prominent international distributors for various projects are underway, with anticipated materialization in the fiscal year 2024-25.
Concurrently, efforts to expand our footprint into previously unexplored markets through targeted marketing initiatives are expected to yield tangible results in the upcoming financial year. Thanks to our persistent efforts, we are experiencing significant traction in the Middle East market, evidenced by a consistent influx of orders from prominent countries. This positive reception underscores the effectiveness of our strategies in penetrating and establishing a strong presence in this region.
We are exploring partnerships in the untapped markets which demonstrates a forward-thinking approach to expanding our footprint and capturing new opportunities. Overall, our efforts are well-planned and strategic that will help in positioning our company for continued success in the global market.
Our export business, particularly in non-COVID sales, has increased by over 25% from the previous fiscal year. This growth aligns well with our expected growth rate, indicating the effectiveness of our strategies and market initiatives.
PRESENCE OF THE COMPANY IN EVENTS & CONFERENCES INTERNATIONAL
Our robust international presence is underscored by our active participation in numerous conferences, where we showcase our product range and unveil new product verticals. These conferences serve as invaluable platforms to engage with key stakeholders, forge partnerships, and drive awareness and adoption of our offerings on a global scale.
During 16th August 2023-18th August 2023, we exhibited at MEDLAB ASIA 2023 which was held at Impact Convention Centre, Bangkok, Thailand. During 5th February 2024-8th February 2024, we exhibited in the prestigious MEDLAB MIDDLE EAST 2024 conference, held from, at the World Trade Centre in Dubai, United Arab Emirates.
Both these events have proven to be highly successful where we engaged in fruitful discussions with prospective channel partners from new markets, laying the groundwork for potential collaborations. Furthermore, our presence at the events bolstered the confidence of our existing distributors and channel partners.
We anticipate realizing tangible financial benefits from our participation in this event within the current financial year.
INDIA
Our participation in the esteemed APCON 2023 conference, held from December 6th - 10th (2023, at the JLN Stadium, All India Institute of Medical Sciences (AIIMS), New Delhi, was highly impact ful. Additionally, in November 2023, our team participated in MICROCON 2023 - LUCKNOW Chapter. At both events, we received exceptional feedback from our valued customers, affirming the quality and relevance of our offerings in the field of pathology and microbiology.
Our sales, marketing, and application teams have been collaborating to organize a series of workshops for both existing users of our kits and prospective clients. These workshops aim to provide valuable insights into the usage and benefits of our products, facilitating enhanced understanding and utilization among participants.
PERFORMANCE IN THE AGROCHEMICALS DIVISION
The sales in agrochemicals division increased by over 14% with Rs.1,368.51 Lakh in FY 2023-24 compared to Rs.1,199.76 Lakh in FY 2022-23 due to increase in export sales.
The company's agrochemicals division maintains a steadfast commitment to government procurement, primarily facilitated through electronic tenders on platforms such as GeM. Additionally, the division diligently endeavors to expand its customer base into previously untapped regions. Presently, the Agro business operates with minimal debt, consistent with prior projections. Sales within the agrochemical sector remain stable. Furthermore, the company is intensifying efforts to enhance brand recognition for its offerings in micro fertilizers, bio fertilizers, and public health products.
PERFORMANCE OF THE UK SUBSIDIARY
Our UK Subsidiary, TRUPCR? Europe Limited growth to over 50% of revenue is a significant milestone, especially when it's driven by successful expansion efforts in new markets. Our UK team has been proactive and strategic in their approach to European expansion.
With the comprehensive setup in Manchester, encompassing sales & marketing, technical support, and research & development, the Manchester Site is going to have a growth rate of 40% to 50% in the next fiscal year as well.
Having all these functions under one roof can indeed streamline operations and enhance efficiency, especially when it comes to reducing turnaround times and providing timely technical support to customers. With the assays manufactured in the UK, it not only supports efficiency but also adds value by labeling products as "Made in UK," which is a significant selling point for EU customers, given factors like proximity and potential ease of regulatory compliance.
The revenue growth over the past year is a tangible validation of these efforts. It's evident that the strategic investments and focus on enhancing operations are yielding positive results. With this momentum, there's certainly potential for even greater success in the coming calendar year.
Presence of the UK subsidiary in International Conferences
The UK subsidiary has been participating in international molecular diagnostic conferences and organizing training sessions and seminars for customers to showcase expertise, build relationships within the industry, and educate customers about its products and services.
Participating in prominent industry events like the IBMS Congress and the Association for Clinical Genomic Science (ACGS) has not only increased visibility but has also positioned TRUPCR? Europe as a key player in the molecular diagnostics field. The interest generated from these conferences, including distributorship inquiries and requests for OEM solutions, reflects positively on the reputation and perceived value of the TRUPCR? brand.
The Trust of TRUPCR? brand has indeed multiplied, thanks to the efforts of the UK subsidiary, which has been instrumental in expanding into overseas markets and establishing credibility. Ongoing validation processes in new labs further validate the quality and reliability of TRUPCR? products, paving the way for future sales opportunities.
With an established marketing team and enhanced visibility from exhibitions, the Manchester Site is poised to reap significant benefits in the current financial year. The traction from EU customers and the conversion of leads generated from exhibitions indicate promising growth prospects. Exploring partnerships with EU distributors further underscores the commitment to expanding market reach across Europe.
RAPID KIT VERTICAL (LATERAL FLOW TECHNOLOGY)
The Rapid Kit manufacturing plant is ready & we are optimizing the products in R&D which have market the potential, other than the COVID Testing Kits. We have received the CDSCO approval for Rapid Tests for detection of Anti-Microbial Resistance, Dengue NS1 and Dengue IgG/IgM. We will keep on adding products as and when they are ready from the R&D.
The company has added some novel products in Rapid Kit vertical for detection of Antimicrobial Resistance (AMR) genes. As per WHO, AMR remains one of the top 10 global public health threats facing humanity, associated with the deaths of 4.95 million people in 2019.
AMR is also a threat to the global economy, with impact on international trade, heath care costs and productivity predicted. If no action is taken, AMR would cost the world's economy USD 100 trillion by 2050.
We are pleased to inform that we have successfully completed the collaborative R&D of the Rapid Tests for Anti-Microbial Resistance (AMR). The below assays have been launched to cater to the AMR segment:
• TRURAPID? RESIST-5 OKNVI Rapid Test (For Resistance in Carbapenems)
• TRURAPID? RESIST ACINETO Rapid Test (For Resistance in Carbapenems in Acinetobacter spp.)
• TRURAPID? RESIST CTX-M Rapid Test (For Resistance in Cephalosporins)
NEXT-GEN SEQUENCING (NGS) VERTICAL
We started working on NGS Kit development in 2019, had developed few parameters, but then COVID came and all activities were suspended. Now we are again reviving the NGS kits revalidations and also development of few more parameters, keeping in mind the global markets.
We launched our NGS based "TRUNGS? Solid Tumor Panel" for detection of SNVs, Indels, CNVs and RNA fusions in 35 marker genes and hotspots in 6 pharmocogenomics genes associated with solid tumors such as lung, gastro-intestinal/colorectal, breast, liver and ovarian tumors.
Now, after extensive R&D efforts further in the Next-Gen Sequencing Vertical, we have added a few more products in this portfolio which includes:
a) PAN-MYELOID NGS Panel - A comprehensive NGS solution for detection of variants in 65 genes in myeloid malignancies.
b) BRCA Plus Kit - For detection of germline / somatic mutations associated with breast, ovarian and prostate cancers.
c) Endometrial Cancer Panel Kit - For detection of mutations in certain genes associated with diagnosis and treatment of endometrial cancer as per WHO guidelines.
DIGITAL PCR (NEW R&D)
Our Research and Development (R&D) team is committed to the ongoing development of innovative products leveraging cutting-edge technologies. Through our dedication to scientific advancement and technological innovation, we strive to address emerging challenges and meet the evolving needs of our customers and stakeholders.
Through our relentless pursuit of excellence, we endeavor to bring to market new products that not only meet but exceed industry standards for quality, performance, and reliability.
Continuing our journey for R&D, our team has been working on the development of assays based on Digital PCR (dPCR) technology which enables absolute quantification of target nucleic acids.
By leveraging the capabilities of dPCR technology, our R&D team has the opportunity to develop innovative assays that address key challenges in healthcare & biotechnology. This could lead to the development of valuable diagnostic tools with significant impact on disease detection, treatment monitoring, and research advancements.
We are hopeful to launch the TRUdPCR (digital PCR) assays in Q3 of FY 2024-25.
SUMMARY
The company has made great achievements in terms of sales & profits, the molecular diagnostic business shall continue to grow well for few years from now; with new product addition (with continuous R & D efforts), new customer addition, and venturing into new international markets. Your Company's products command a very good brand image in the market, and the company is regarded by prominent labs as a reliable solution provider at par to the foreign multinationals.
The company has become a market leader in India in the molecular diagnostic segment. The consolidated revenue of the company stands at ^7,412.47 Lakh in the FY 2023-24 against ^6,183.60 Lakh in the FY 202223.
PUBLIC DEPOSITS
The Company has not accepted any deposits from the public during the year under review. No amount on account of principal or interest on deposits from the public was outstanding as on 31st March 2024.
MERGERS & ACQUISITIONS
The company has been looking for options to acquire a company in similar business area to get inorganic growth since FY22.
M&A valuations globally have gone high due to demand from molecular diagnostic companies which are flushed with cash from COVID. We will only go for the acquisition if it makes financial sense and meets our internal IRR criteria. We would be looking at share buyback at a later date, if we are unable to secure a desired acquisition candidate. Our aim is to create maximum value for our shareholders. We will also be deploying some funds in the joint venture created in Manchester, UK depending on the need.
DIVIDEND
Based on the Company's performance, the Board of Directors of the Company is pleased to recommend a final dividend of 30%, ^3/- i.e., per equity share of face value of ^10/- each for the FY 2023-24. The dividend pay-out is subject to approval of members at the ensuing Annual General Meeting.
The dividend, once approved by the Shareholders, will be paid, subject to deduction of tax at source, on or after Monday, 30th September 2024. The Company has fixed Tuesday, 17th September 2024 as the 'Record Date' for determining entitlement of members to final dividend for the financial year ended 31st March 2024, if approved at the AGM.
TRANSFER TO RESERVES
The balance of Profit and Loss Account after adjusting income tax, proposed dividend and tax on proposed dividend is proposed to be transferred to Reserves and Surplus in Balance Sheet.
EXPANSION
During the year, no major expansion undertaken by the Company. Normal capital expenditure is being done continuously for technical and operational up gradations of production facilities of the Company.
CREDIT RATINGS
The Company requested "Care Ratings Ltd" to withdraw its external rating assigned to the bank facilities of the company, which saves cost to the company. A letter to this effect has been received by the company on 14th March 2019, issued by CARE Ratings Ltd. Company continues to utilize the bank credit facilities as a valued customer and the withdrawal was suo-moto initiated due to non-requirement by bank, as stated above and cost saving reasons.
CHANGES IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the financial year ended 31st March 2024. Further there have been no material changes and commitments, if any affecting financial position of the Company from financial year end and till the date of this report.
CURRENT LISTING
Presently, the Equity Shares of the company are listed on the Bombay Stock Exchange Ltd, Mumbai.
SHARE CAPITAL
Scheme of Amalgamation between 3B BlackBio Biotech India Limited (Transferor Company) with Kilpest India Limited (Transferee Company) had become effective upon filing of the certified copy of the Order passed by the Hon'ble National Company Law Tribunal, Indore Bench ('NCLT') sanctioning the Scheme, with the Registrar of Companies, Gwalior (MCA website) on 2nd September 2023. Therefore, this amalgamation resulted in the increase of Authorized Equity Share Capital of the Amalgamated company.
The Authorized Equity Share Capital of the Company as on 31st March 2024 stood at Rs.16,20,00,000/- (Rupees Sixteen Crore Twenty Lakh Only), comprising of 1,62,00,000 (One Crore Sixty-Two Lakh) Equity Shares of Face Value of Rs.10/- (Rupees Ten Only) each.
The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on 31st March 2023 was Rs.7,50,81,000/- (Rupees Seven Crore Fifty Lakh Eighty-One Thousand Only) comprising of 75,08,100 (Seventy- Five Lakh Eighty-One Hundred) Equity Shares of Face Value of Rs.10/- (Rupees Ten Only) each.
The Company has allotted 10,74,570 (Ten Lakh Seventy-Four Thousand Five Hundred and Seventy) Equity Shares of Face Value of Rs.10/- (Rupees Ten Only) each, ranking pari passu with the existing Equity Shares.
As a result of which the Issued, Subscribed and Paid-up Equity Share Capital of the Company increased from Rs.7,50,81,000/- to Rs.8,58,26,700/- by allotment of new 10,74,570 equity shares.
Therefore, Issued, Subscribed and Paid-up Equity Share Capital of the Company as on 31st March 2024 stood at Rs.8,58,26,700/- (Rupees Eight Crore Fifty-Eight Lakh Twenty-Six Thousand Seven Hundred only), comprising of 85,82,670 (Eighty-Five Lakh Eighty-Two Thousand Six Hundred and Seventy) Equity Shares of Face Value of Rs.10/- (Rupees Ten Only) each.
The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.
The shares are actively traded on BSE and have not been suspended from trading.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
In accordance with the provisions of the Companies Act, 2013, Mrs. Mithla Dubey, (DIN: 03597415) NonExecutive Director retiring by rotation and being eligible, offered herself for re-appointment at the ensuing Annual General Meeting. The Board recommends her re-appointment.
Re-appointment
The term of office of Mrs. Mithla Dubey will expire on 26th March 2025. The Board of Directors upon the recommendation of Nomination and Remuneration committee, in its meeting held on 12th August 2024 and subject to the approval of members of the Company have approved the re-appointment of Mrs. Mithla Dubey as Non-Executive Director of the Company for a period of five (5) years with effect from 27th March 2025 to 26th March 2030.
Mrs. Mithla Dubey (DIN: 03597415) is seventy-seven (77) years of age and is healthy and fit to continue on the Board of the company. She is generally associated with the company as a Director Promoter and is actively involved in the social areas of the society. Therefore, the board considers that her continued association would be of immense benefit to the company.
Mr. Abdul Moin Khan (DIN: 07918067) will attain the age of seventy-five (75) years on 1st January 2025 during his second term as an Independent Director of the company i.e., from 26th September 2022 up to 25th September 2027.
The members had approved the re-appointment of Mr. Abdul Moin Khan (DIN: 07918067) in the AGM held on 22nd September 2022. He will attain the age of seventy-five (75) years on 1st January 2025 during his second term as an Independent Director of the company i.e., from 26th September 2022 up to 25th September 2027, not liable to retire by rotation
Mr. Khan is in good health and of sound and alert mind. The Board is also confident about his being able to function and discharge his duties in an able and competent manner.
Based on the recommendation of the Nomination and Remuneration Committee and taking in account Mr. Abdul Moin Khan's seniority, expertise and vast experience, which has immensely benefited the Company, the Board of Directors considered and approved his continuation as an Independent Director of the Company, from 26th September 2022 up to 25th September 2027, not liable to retire by rotation, subject to approval of members at the ensuring Annual General Meeting.
Mr. Harihar Prasad Thapak (DIN: 09627567) was appointed as an Independent Director of the Company to hold office for a term of five (5) years from 23rd September 2022 up to 22nd September 2027 in the AGM dt. 22nd September 2022.
In terms of the Regulation 25(2A) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the appointment, re-appointment or removal of an independent director of a listed entity, shall be subject to the approval of shareholders by way of a special resolution.
Based on the recommendation of the Nomination and Remuneration Committee and taking in account Mr. Harihar Prasad Thapak expertise and vast experience, which has immensely benefited the Company, the Board of Directors have considered and approved his continuation as an Independent Director of the Company for a term of five (5) years up to 22nd September 2027 subject to approval of Shareholders of the Company at the ensuing Annual General Meeting.
Cessation
As per the provisions of companies Act, 2013 Mr. Shabbar Hussain (DIN: 02423696) will complete his second term as an Independent Director on 29th September 2024 and accordingly will cease to be an Independent Director and Member of the Board of Directors of the Company.
The Board places on record its appreciation for Mr. Shabbar Hussain contribution during his association with the Company.
Appointment
In compliance with Section 149 of the Companies Act, 2013 read with schedule IV of the Act, the appointment of Mr. Rajesh Dubey (DIN: 10738590) as Independent Director for a term of five (5) years, w.e.f., 25th September 2024 up to 24th September 2029, is being placed before the Members in General Meeting for their approval. As per the provisions of Section 149 of the Act, he will not be liable to Retire by rotation.
A brief resume of the directors being appointed/re-appointed, the nature of expertise in specific functional areas, names of companies in which they hold directorships, committee memberships/ chairmanships, their shareholding in the Company, etc., have been furnished in the explanatory statement to the notice of the ensuing AGM.
None of the Company's directors are disqualified from being appointed as a director under the provisions of the Act. For details about the directors, please refer to the Corporate Governance Report.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, as approved by the Audit Committee or the Board which are disclosed under the Notes to Accounts.
Independent Directors have given declaration that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with schedules and rules issued as well as SEBI Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made thereunder and are independent of the management. They have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Board of Directors of the Company has taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same. In the opinion of the Board, they fulfil the conditions of independence as specified in the Act and the rules made thereunder and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
Independent Directors
The Board is of the opinion that all Directors including the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of science and technology, digitalization, human resources, strategy, auditing, tax and risk advisory services, financial services, corporate governance, etc. and that they hold highest standards of integrity.
The Independent Directors of the Company have confirmed that they have enrolled themselves in the Independent Directors' Databank maintained with the Indian Institute of Corporate Affairs ('IICA') in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended.
Details of Familiarisation Programme for the Independent Directors are provided separately in the Corporate Governance Report.
During the year there was no change in the Key Managerial Personnel of the Company.
In terms of the Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel of the Company as on the date of this report.
1. Mr. Dhirendra Dubey - Chairman & Managing Director
2. Mr. Nikhil Kuber Dubey - Chief Financial Officer & Whole-Time Director
3. Mrs. Navneet Kaur - Company Secretary
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your company, risk management systems and other material developments during the Financial Year 2023-24.
Management Discussion and Analysis Report for the year 2023-2024, is presented in a separate section forming part of Annual Report.
CORPORATE GOVERNANCE REPORT
Your Company continues to be committed to good Corporate Governance aligned with good practices. A separate report on Corporate Governance along with Auditors' Certificate forms an integral part of this Annual Report.
INTERNAL FINANCIAL CONTROLS
The Directors have laid down internal financial controls to be followed by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and the completeness of the accounting records and the timely preparation of reliable financial information. These controls also help in the timely preparation of transparent, complete and accurate financial information and statements as per the stipulated accounting standards and principles. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
RISK MANAGEMENT
The Company has a well-defined risk management framework in place to identify, evaluate, and monitor business risks and challenges across the Company as well as to identify new and emergent risks. The
Company's success as an organization largely depends on its ability to identify opportunities and leverage them while mitigating the risks that arise while conducting its business. Your Directors continually evaluate the risks faced by the Company which could affect its business operations or threaten its existence. The Company takes appropriate risk containment measures and manages the same on an ongoing basis. The Company has adopted a Risk Management Policy pursuant to Section 134 of the Act. The said policy provides for creation of a risk register, identification of risks and formulating mitigation plans
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has a Vigil Mechanism/Whistle Blower Policy under which the employees are free to report violations of applicable laws and regulations and the code of conduct. The Policy on vigil mechanism/whistle blower policy may be accessed on Company's website www.kilpest.com. The details pertaining to Whistle Blower Policy are included in the Corporate Governance Report, which forms part of this report.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The Consolidated Financial Statements of the Company and its subsidiary is prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 ('Ind AS'). The Audited Consolidated Financial Statements together with the Auditor's Report thereon forms part of this Annual Report.
The consolidated financial results reflect the operations of its subsidiary: M/s TRUPCR? Europe Limited, prepared forms part of the Annual Report.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16(1)(c ) of the SEBI Listing Regulations. The Policy, as approved by the Board, is uploaded on the Company's website i.e., www.kilpest.com.
The Company does not have any associate or joint venture companies. The statement pursuant to the provisions to Section 129(3) of the Companies Act 2013, containing salient features of the financial statement of the Company's Subsidiary in Form AOC1 is given in Annexure - III.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS
In terms of applicable provisions of the Companies Act, 2013 read with Rules framed there under and provisions of Listing Regulations and on the recommendation of Nomination and Remuneration Committee, the Board of Directors has put in place a process to formally evaluate the effectiveness of the Board, its Committees along with performance evaluation of each Director carried out on an annual basis. Accordingly, the annual performance of the Board, its committees and each Director was carried out for the Financial Year 2023-2024.
The Independent Directors at their separate meeting held on 9th February 2024 have reviewed the performance of non-independent directors, Chairman and Board as a whole along with review of quality, quantity and timeliness of flow of information between Board and management and expressed their satisfaction over the same. Further the Board, in its meeting held on 9th February 2024 also reviewed the performance of the Board, its committees and all Individual Directors of the Company and expressed its satisfaction over the performance of the Board, its Committees and individual Directors. Furthermore, Board is of the opinion that Independent directors of the Company are persons of high repute, integrity & possess the relevant expertise & experience in their respective fields.
Criteria for evaluation of individual Directors include aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/support to management outside Board/ Committee Meetings. In addition, the Chairman is also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholders' interests in mind and effectiveness as Chairman.
Criteria for evaluation of the Committees of the Board include mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
EMPLOYEE STOCK OPTION SCHEME
At present, the Company is not having any Employee Stock Option Scheme.
STATUTORY AUDITORS
At the 50th AGM of the Company held on 22nd September 2022, pursuant to the provisions of the Act and the Rules made thereunder, M/S Baheti & Co., Chartered Accountants (Firm Registration No.: 006287C), were re-appointed as Statutory Auditors of the Company for a second term of five (5) consecutive years i.e., from the conclusion of the 50th AGM till the conclusion of the 55th AGM to be held in the year 2027.
Pursuant to the provisions of Companies Amendment Act, 2017, notified on 7th May 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors.
The Audit Report of M/S Baheti & Co on the Financial Statements of the Company for FY 2023-24 forms part of this Annual Report. The Report does not contain any qualification, reservation, adverse remark or disclaimer.
AUDITORS' REPORT
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. The Auditor's Report for the financial year ended 31st March 2024 does not contain any qualification, reservation or adverse remark.
COST AUDITORS
The Company is required to maintain cost records as specified by the Central Government as per Section 148(1) of the Act and the rules framed thereunder and accordingly, the Company has made and maintained such cost accounts and records.
In terms of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, based on the recommendations of the Audit Committee, the Board of Directors have appointed Sanjay Kasliwal & Associates, Cost Accountants & Social Auditor (Firm Registration No.: 100888), being eligible, to conduct Cost Audit relating to the business of the Company for the year ending 31st March 2025.
Sanjay Kasliwal & Associates, have confirmed that they are free from disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that their appointment meets the requirements of Section 141(3)(g) of the Act. They have further confirmed their independent status and an arm's length relationship with the Company.
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 for seeking Members' ratification for the remuneration payable to Sanjay Kasliwal & Associates is included in the Notice of the 52nd AGM forming part of this Annual Report.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s P.K. Rai & Associates, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the year ended 31st March 2024.The Secretarial Audit Report for the Financial Year ended 31st March 2024 is annexed as Annexure - IV and does not contain any qualification, reservation, adverse remark or disclaimer.
As per amended SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in addition to the above mentioned Secretarial Audit Report, listed company is also required to obtain an Annual Secretarial Compliance Report from a Practicing Company Secretary w.r.t., the compliances of all applicable SEBI Regulations, amendments, circulars or guidelines etc. by the Company. Accordingly, the same has been obtained and filed with the concerned Stock Exchanges.
INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Board of Directors of the Company had appointed M/s Ali Jain and Sharma, Chartered Accountants, to conduct internal audit for the Company for FY 2023-24
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Financial Statements have been prepared in accordance with Indian Accounting Standards ('Ind AS') as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 and other relevant provisions of the Act.
SECRETARIAL STANDARDS OF ICSI
The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
a) Transfer of unclaimed dividend
i) Pursuant to the provisions of Section 124 of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules') including any statutory modification(s) or re-enactment(s) thereof for the time being in force, dividend for the financial year ended 31st March 2017 and onwards, which remains unpaid or unclaimed for a period of seven (7) years from the date of its transfer to the unpaid dividend account of the Company would be transferred to IEPF within a period of 30 days after expiry of the 7 year period.
ii) Members whose Dividend remains unclaimed/unpaid for the above years are advised to submit their claim to the Company's RTA at their address, quoting their folio number/DP ID and Client ID.
Members are informed that the unclaimed dividend for the financial year 31st March 2017 shall be transferred to the IEPF within a period of 30 days from the due date of transfer. The reminder letters have already been sent separately to all such Members at their registered address in this regard.
Further, Members who have not encashed/claimed their dividends in the last seven (7) consecutive years from 2016-17 are being notified to claim the same before the cut-off date as mentioned in the reminder letter. In case valid claim is not received by that date, the Company will proceed to transfer the respective shares to the IEPF Authority in terms of the IEPF Rules.
b) Transfer of shares to IEPF
In terms of Section 124 of the Companies Act, 2013, shares on which dividend remains unpaid or unclaimed for a period of seven (7) consecutive years or more shall be credited to the Demat Account of Investor Education and Protection Fund Authority (IEPFA). Upon transfer of such shares, all benefits, if any, accruing on such shares shall also be credited to such Demat Account and the voting rights on such shares shall remain frozen till the rightful owner claims the shares.
The details of unpaid dividend(s) along with its due dates for transfer to IEPF Is provided under the Corporate Governance report annexed with the Annual Report.
c) Claim from IEPF Authority
Members/Claimants whose dividend remained unclaimed/unpaid has been transferred to the IEPF Fund, he may apply for refund by making an application to the IEPF Authority in e-Form IEPF - 5 (available on www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time. No claim shall lie against the Company in respect of the dividend so transferred.
d) Details of unclaimed dividend on the website
Pursuant to provisions of Investor Education and Protection Fund (Uploading of Information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded details of unpaid and unclaimed amounts up to 31st March 2023 lying as on 22nd September 2023 (date of last Annual General Meeting) on website of the Company, as also with Ministry of Corporate Affairs.
HUMAN RESOURCE MANAGEMENT
Our Employees are most valuable assets of the Company. We encourage innovation, meritocracy and the pursuit of excellence. We have setup a scalable recruitment and human resources management process, which enables us to attract and retain employees. Cordial employee relations were maintained throughout the year in the Company. The directors express their appreciation for the contribution made by employees to operations of the Company during the year.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULAR OF EMPLOYEES
Number of Employees as on 31st March 2024 was 76.
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.
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, in respect of the Directors/employees of the Company is set out in Annexure - VI to this report.
Pursuant to the provisions of Section 136(1) of the Act and as advised, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection at the Registered Office of the Company during working hours and Members interested in obtaining a copy of the same may write to the Company
Secretary and the same will be furnished on request. Hence, the Annual Report is being sent to the Members excluding the aforesaid information.
AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of directors namely Mr. Shabbar Husain, Mrs. Mithla Dubey and Mr. Abdul Moin Khan.
The NRC is also responsible for reviewing the profile of potential candidate's vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board.
The NRC is also responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The NRC reviews and evaluates the profiles of potential candidates for appointment of Directors and meets them prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position including expert knowledge expected are communicated to the appointee.
The Board has also reviewed the list of core skills, expertise and competencies of the Board of Directors as are required in the context of the businesses and sectors applicable to the Company which were mapped with each of the Directors on the Board. The same is disclosed in the Corporate Governance Report forming part of this Annual Report.
On the recommendation of the NRC, the Board has adopted and framed a Remuneration Policy.
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 Annexure - II and forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company's CSR philosophy is based on the belief that a successful business can develop only by creating a prosperous society around. Reaching out to deprived communities is part of the Company's vision and its CSR initiatives aim at supplementing governments' endeavors to help the citizens in the vicinity to achieve better living standards and good quality of life. The Company has been engaging with civil society, public at large through dissemination of its CSR initiatives.
The Company has constituted a CSR Committee of the Board in accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The details pertaining to composition of audit committee are included in the Corporate Governance port, which forms part of this report
There have been no instances during the year when recommendations of the CSR Committee were not accepted by the Board.
The Company would also undertake other need based initiatives in compliance with Schedule VII of the Act. Corporate Social Responsibility Policy:
The Company has adopted a Corporate Social Responsibility Policy as required under section 135 of the Companies Act, 2013 for the activities covered under Schedule VII of the Act. The CSR Policy may be accessed on the Company's website at the link: http://www.kilpest.com. The brief outline of the CSR policy, overview of the activities undertaken with amounts spent/unspent thereon during the year, reason for unspent CSR thereof and composition of the Committee has been disclosed in Annexure - I.
RELATED PARTY TRANSACTIONS
Your Company has historically adopted the practice of undertaking related party transactions only in the ordinary and normal course of business and at arm's length as part of its philosophy of adhering to highest ethical standards, transparency, and accountability.
All related party transactions that were entered with your Company, during the financial year were on arm's length basis and were in the ordinary course of the business. In terms of the Act, there were no materially significant related party transactions entered into by your Company with its Promoters, Directors and Key Managerial Personnel, or other designated persons, which may have a potential conflict with the interest of your Company at large, except as stated in the Financial Statements. Hence, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.
MEETINGS OF THE BOARD
Regular meetings of the Board are conducted to discuss and approve various strategies, policies, financial matters and such other businesses.
Fourteen meetings of the Board of Directors were held during the year. For further details, please refer to report on Corporate Governance of this Annual Report.
Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.
Further a separate meeting of the Independent Directors of the Company was also held on 9th February 2024.
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement giving details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as Annexure - V to this Report.
ANNUAL RETURN
As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the extract of the Annual Return for FY 2023-24, is uploaded on the website of the Company and the same is available at www.kilpest.com.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the year under review, the Company has not made any investment. Further, the Company has not given any loans or corporate guarantee or provided any security during the year.
Details of loans, guarantees and investments covered by the provisions of Section 186 of the Companies Act, 2013 (if any) are given in the notes to the financial statements.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at https://www.kilpest.com/investor.html.
INSURANCE
The assets of Company are adequately insured against loss of fire, riot, earthquake, flood etc. and other risks which are considered necessary by the Management.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRING AFTER BALANCE SHEET
No material changes and commitments affecting the financial position of the company occurred between the ends of this financial year to which these financial statements relate on the date of this report.
GREEN INITIATIVES
In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of the Notice of 52nd Annual General Meeting of the Company including the Annual Report for FY 2023-24 are being sent to all Members whose e-mail addresses are registered with the Company / Depository Participant(s).
UPDATION OF EMAIL IDS FOR RECEIVING NOTICES / DOCUMENTS IN ELECTRONIC MODE:
Shareholders who have not registered their email addresses with the Company are requested to register their email addresses with the Company to enable the Company to deliver notices /documents through e- mode. Shareholders holding their shares in Demat mode also have an option to register their email addresses with their depository, through their depository participant.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to issue of Equity Shares with Differential Rights, Sweat Equity, ESOS etc.
2. Details relating to disclosure in respect of voting rights not exercised directly by the employees in respect of shares to which the scheme relates.
3. No applications were made or any proceedings were pending against the Company under the Insolvency and Bankruptcy Code, 2016
NO DEFAULT
The company has not defaulted in payment of interest and/or repayment of loans to any of the financial institutions and/or banks during the year under review.
Your Directors further state that during the year under review, there was no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under the review the company had filed Scheme of Amalgamation under Sections 230 to 232 and other applicable provisions of Companies Act, 2013 read with the Companies (Compromise arrangements and Amalgamation) Rules, 2016 with Hon'ble National Company Law Tribunal, Indore Bench and obtained order sanctioning the said Scheme from Hon'ble National Company Law Tribunal, Indore Bench dated 9th August 2023.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audit conducted by the Internal, Statutory and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and operating effectively during FY 2023-24.
Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, confirm that for the year ended 31st March 2024:
1. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
2. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
3. they 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;
4. they have prepared the annual accounts on a going concern basis;
5. they 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
6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PROVISION OF VOTING BY ELECTRONIC MEANS THROUGH REMOTE E-VOTING AND E-VOTING AT THE AGM
Your Company is providing E-Voting facility as required under section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015. The ensuing AGM will be conducted through Video Conferencing/ OVAM and no physical meeting will be held and your company has make necessary arrangements with CDSL to provide facility for remote e-Voting and e-Voting at AGM. The details regarding e-Voting facility is being given with the notice of the Meeting.
THE FUTURE
Availability of best in the facilities with right blend of technology, vast distribution network, adequate financial resources, stable tax regime and motivated manpower will facilitate your Company to continue to drive growth across its various businesses and product categories both in domestic and international markets.
Your Directors are confident that the Company will continue to create value for its shareholders and other stakeholders.
ACKNOWLEDGEMENT
The Directors appreciate and value the contribution, dedication, support, hard work and commitment made by all the employees towards continuous improvement in all functions and areas as well as efficient utilization of the Company's resources for sustainable and profitable growth.
The Directors would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, government authorities, farming community, business partners, shareholders, customers and other stakeholders. The Directors look forward to continuance of the supportive relations and assistance in the future.