The Board of Directors ("Board") presents the 35th Annual report of your Company together with the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2024.
FINANCIAL HIGHLIGHTS:
The Company's Standalone and Consolidated Financial results for the year ended March 31, 2024, is summarised below:
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(All Amounts
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in INR Lakhs unless otherwise specified)
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Particulars
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Standalone
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Consolidated
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For the year ended
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For the year ended
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March 31
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March 31
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2024
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2023
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2024
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2023
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Total revenue
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82.27
|
-
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1,599.03
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-
|
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Total expenses
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690.95
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990.76
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3,161.16
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990.76
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Profit before exceptional items and tax
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(608.67)
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(990.76)
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(1,562.14)
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(990.76)
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Exceptional items
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-
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-
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-
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-
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Profit before tax and share of profits of associates
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(608.67)
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(990.76)
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|
|
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Prior period share of profit/interest form Associate
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|
|
|
|
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Profit before tax
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(608.67)
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(990.76)
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(1,562.14)
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(990.76)
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Tax expenses
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(113.69)
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(235.20)
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(377.82)
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(235.20)
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Net profit for the year
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(494.98)
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(755.57)
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(1,184.31)
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(755.57)
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Net profit attributable to the Shareholders of the Company
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|
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(796.80)
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(755.57)
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Net profit attributable to the noncontrolling interest
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-
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(387.51)
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“
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Other comprehensive income
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-
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-
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(32.00)
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3.48
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Total comprehensive income for the year
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(494.98)
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(755.57)
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(1,216.31)
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(752.09)
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Total comprehensive income attributable to the Shareholders of the Company
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(808.75)
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(752.09)
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Total comprehensive income attributable to the non-controlling interest
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-
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(407.55)
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Basic and diluted EPS (in Rs)
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(2.18)
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(5.86)
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(3.56)
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(5.83)
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Notes: The figures for the previous periods have been regrouped / reclassified wherever considered necessary.
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PERFORMANCE REVIEW
On a Standalone basis, your Company's revenue from operations stood at Rs. 82.27 Lakhs in the financial year 2023-24, as against nil in the corresponding previous period.
On a Consolidated basis, your Company's revenue from operations stood at Rs. 1,599.03 Lakhs in the financial year 2023-24, as against nil in the corresponding previous period.
Highlights of Company's performance is covered in detail in the Management Discussion and Analysis Report (MDA), included in this Annual Report as required under Schedule V of the SEBI (LODR) Regulations, 2015.
DIVIDEND
The Board of Directors of the company has not recommended any dividend on the equity shares of the company for the financial year ended 31st March 2024.
TRANSFER TO RESERVES
During the Financial Year 2023-24, no amount has been transferred to any reserves.
DEPOSITS
During the year under review, the 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) from the public orthe members and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
SHARE CAPITAL
Authorised share capital of the company as on March 31, 2024, is Rs.45,00,00,000/- (Rupees Forty-Five Crores only) divided into 4,50,00,000 Equity Shares of Rs.10/- each and the Paid-up Share Capital is Rs.35,26,78,120/- (Rupees Thirty-Five Crore Twenty-Six Lakh Seventy-Eight Thousand One Hundred and Twenty) divided into 3,52,67,812 Equity shares of Rs.10/- each.
During the year under review, the company had issued shares for consideration other than cash through preferential allotment and converted outstanding warrants into equity shares, as a result of which the capital of the company was increased as follows:
a. Increase in Authorized Share Capital of the Company
In order to facilitate the future requirements, if any, of the Company, pursuant to approval of the Shareholders at the Extraordinary General Meeting held on January 31, 2024, increased the Authorized Share Capital of the Company from Rs. 30,00,00,000/- (Rupees Thirty Crores Only) divided into 3,00,00,000 (Three Crores) Equity Shares of Rs. 10/- (Rupee Ten Only) each to Rs. 45,00,00,000/- (Rupees Forty-Five Crores Only) divided into 4,50,00,000 (Four Crores Fifty Lakh) Equity Shares of Rs. 10/- (Rupee Ten Only) each.
b. Allotment of Equity Shares
During the Financial Year 2023-24, the total issued and paid-up equity share capital of the Company has been increased from Rs.21,48,62,340/- to Rs.35,26,78,120/- pursuant to the allotment of 1,37,81,578 Equity Shares.
During the Financial Year 2023-24, after obtaining necessary approvals, the Company issued and allotted:
i) 9,25,000 Equity Shares (consequent to the conversion of 9,25,000 share warrants allotted on October 13, 2022) having face value of Rs.10/- each at a premium of Rs.5/- each on preferential basis. Afterthe said conversion, there are no othershare warrants outstanding for conversion. Consequently, the Equity Share Capital of the Company stood at Rs.22,41,12,340/-.
ii) Preferential Issue:
1,28,56,578 Equity Shares of the Company having a Face Value of Rs.10/- (Rupee Ten Only) each at a price of Rs.40.87/- (Rupees Forty and Eighty Seven Paise only) per Equity Share (including a premium of Rs.30.87/- (Rupees Thirty and Eighty Seven Paise Only) per share on March 02, 2024 to shareholders of Adita Bio Sys Private Limited ("Adita") for consideration other than cash [i.e. swap of shares of Adita Bio Sys Private limited towards full payment of the total consideration payable for the acquisition of 36,73,308 Shares representing 99.86% shareholding of the Adita] on a Preferential Issue basis pursuant to the approval of the Shareholders in Extra Ordinary General Meeting held on January 31, 2024. After the issue, the Equity Share Capital of the Company stood at Rs.35,26,78,120/-(Rupees Thirty-Five Crores Twenty-Six Lakh Seventy-Eight Thousand One Hundred and Twenty Only).
During the year under review, the Company has not issued shares with differential voting rights or granted any stock options or issued any sweat equity or issued any Bonus Shares. Further, the Company has not bought back any of its securities.
DETAILS OF MATERIAL EVENTS DURING THE YEAR
a) Additional investment in Anugraha chemicals ("The Firm"):
The company had acquired 25.50% partnership interest in Anugraha Chemicals during the financial year 2022-23. Further pursuant to the approval of the Board, the company has acquired additional 28.50% partnership interest in the said firm totalling to 54.00% partnership interest as on date of this annual report.
b) Acquisition of99.86% stake in Adita Bio Sys Private Limited. ("Adita")
As a part of in-organic growth your company and in line with strategy to grow and with the aim of expanding market share company has identified Adita as one of the potential strategic targets.
Adita is a Private Limited Company established in 2015, having a state of art Laboratory Animal House Facility spanning over approximately 32,000 sq. ft, at an industrial area in Tumkur, Bengaluru, Karnataka. Adita is an independent CRO providing integrated Nonclinical studies and other regulatory services as per GLP principles. Adita is in the process of undergoing GLP Audit from the relevant authorities.
The company after carrying out extensive due diligence and as per approval of the Board of Directors and shareholders has issued, offered and allotted 1,28,56,578 Equity shares having face value of Rs. 10/- each at a premium of Rs. 30.87/- (Rupees Thirty and Eighty-Seven Paise Only) to the shareholders of Adita being a full consideration discharged by the company for the acquisition 36,73,308 Equity shares representing 99.86% stake in Adita in accordance with the provisions of the Companies Act, 2013 and ICDR Regulations, as amended from time to time and other applicable laws.
c) Change in Object Clause of the Memorandum of Association of the company.
The Board and Members of the Company at their meetings held on 06th January 2024 and 31st January 2024 respectively approved for substitution of the Existing Object Clause of the Memorandum of Association (the "MOA") with the new clauses which are necessary for furtherance of the business of the Company.
d) Change in business line of the company.
The Board and Members of the Company at their meetings held on 06th January 2024 and 31st January 2024 respectively approved for substitution of the Existing Object Clause of the Memorandum of Association (the "MOA") with the new clauses which are necessary for furtherance of the business of the Company. The new line of business for the Company falls within the domain of Contract Research and Manufacturing Services (CRAMS). Additionally, the company will be involved in various activities such as product discovery, research, development, manufacturing, testing, and analytical services. These services encompass nonclinical and clinical research, innovation services, and other related activities within the biotechnology, pharmaceuticals, devices, nutritional products, and similar domains.
The expected benefits of venturing into the new line of business encompass Diversification of Revenue Streams, Enhanced Market Presence, Innovation and Research Opportunity, Strategic Collaboration, Increased Client Base and Long-Term Growth Potential. These anticipated benefits reflect the strategic decision to explore and participate in a multifaceted range of activities within the CRAMS and Research domains.
e) Acquisition of Land Parcels
Your Company to achieve its vision and mission have been exploring the growth opportunities in both ways i.e., Organic and Inorganic. As a part of Organic Growth, the Company has planned to setup Pharmaceuticals Manufacturing, Research & Development Unit and Contract Research and Manufacturing Services Facilities ("Facilities").
• Further, Your Company has acquired additional 28.50% of partnership interest in Anugraha Chemicals totalling to 54.00% partnership interest during year under review. By virtue of the same, Anugraha Chemicals has become subsidiary of the company as per Ind AS and hence being considered for consolidation of financials only.
Pursuant to Section 129 (3) of the Act read with rules framed thereunder, pursuant to Regulation 33 of the Listing Regulations and Ind - AS 110 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries.
A separate statement containing the salient features of the financial performance of the subsidiaries and associates for the Financial Year 2023-24 in the prescribed form AOC-1 is annexed to the Board's Report as Annexure - A and forms a part of this report. The financial statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary companies are available on our website at www.pharmaids.com and also forms an integral part of the Annual Report.
The Company has following subsidiaries as on 31st March 2024:
Material Subsidiaries1
Adita Bio Sys Private Limited
Anugraha Chemicals ("Registered Partnership Firm")
Step Down Subsidiaries2
Siri Labvivo Diet Private Limited
Spring Labs ("Registered Partnership Firm")
• Further, Your Company has acquired additional 28.50% of partnership interest in Anugraha Chemicals totalling to 54.00% partnership interest during year under review. By virtue of the same, Anugraha Chemicals has become subsidiary of the company as per Ind AS and hence being considered for consolidation of financials only.
Pursuant to Section 129 (3) of the Act read with rules framed thereunder, pursuant to Regulation 33 of the Listing Regulations and Ind - AS 110 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries.
A separate statement containing the salient features of the financial performance of the subsidiaries and associates for the Financial Year 2023-24 in the prescribed form AOC-1 is annexed to the Board's Report as Annexure - A and forms a part of this report. The financial statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary companies are available on our website at www.pharmaids.com and also forms an integral part of the Annual Report.
The Company has following subsidiaries as on 31st March 2024:
Material Subsidiaries3
Adita Bio Sys Private Limited
Anugraha Chemicals ("Registered Partnership Firm")
Step Down Subsidiaries4
Siri Labvivo Diet Private Limited Spring Labs ("Partnership Firm")
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, 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 Section 134 (3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given as Annexure - B forming part of Board's Report.
EMPLOYEE STOCK OPTION PLAN AND EMPLOYEE STOCK PURCHASE SCHEME
During the year under review, the Company has introduced "Pharmaids Pharmaceuticals Limited - Employee Stock Option Scheme 2024" & "Pharmaids Pharmaceuticals Limited -Employee Stock Purchase Scheme 2024" ("the Schemes"). Both the schemes were approved on January 06, 2024 by Borad of Directors and on January 31, 2024 by shareholders by passing Special Resolution. Board of directors has reserved 25,00,000 options and 30,00,000 equity shares under these schemes respectively for employees which will be granted at the price and terms as per the proposal by NRC committee and subject to the approval from the Board of Directors from time to time.
The grants under the Schemes are further subject to necessary statutory approvals and would be made in conformity with the applicable laws. No shares were awarded to employees under the Scheme during the FY 2023-24.
Disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, are uploaded on the website of the Company at www.pharmaids.com
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Your Company places on record their deep appreciation for the contribution made by the employees of the Company at all levels. A Note on Human Resources is provided in the Management Discussion and Analysis ("MDA") Report, which forms part of this Report.
a. Particulars of Employees
Disclosure 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 is annexed to the Report as Annexure-C.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Rules, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of this Report. Further, the Report and the Annual Accounts are being sent to the Members excluding the aforesaid statement. In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the Members. Any Member interested in obtaining such particulars may write to the Company Secretary at compliance@pharmaids.com
b. Prevention of Sexual Harassment at workplace
The Company is committed to provide a safe and conducive work environment to all its employees and associates. In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and Rules
made thereunder, the Company has in place a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. The Company has constituted "Internal Complaints Committee" to redress and resolve any complaints arising at respectable workplace.
The details of complaints received / disposed/ pending during the year ended March 31, 2024.
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Particulars
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No of Complaints of sexual harassment received in the year
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Nil
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No of Complaints disposed off during the year
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Nil
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No of cases pending as on March 31, 2024
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Nil
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The Policy on Non-discrimination and Prevention of Sexual Harassment (POSH) is available on the Company's website at http://www.pharmaids.com/policies.html
DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL:
During the year under review, the following appointments, re-appointments and resignations were made in the Board of Directors, Key Managerial Personnel and Senior Management of the Company:
a. Appointments/ Inductions to the Board
The Shareholders in their 34th Annual General Meeting held on September 22, 2023, approved the appointment of Mr. Shreedhara Shetty (DIN: 02776638), as a Non-Executive, Non -Independent Director (liable to retire by rotation) of the Company with effect from August 29, 2023.
The Shareholders in their 01st Extraordinary General Meeting for the financial year 2023-24 held on January 31, 2024, approved the appointment of Dr. Shankarappa Nagaraja Vinaya Babu (DIN: 01373832), as a Director (Under the category of Non-Executive Non-Independent) (Not liable to retire by rotation) and Chairman of the Company with effect from January 31, 2024.
b. Re-appointment to the Board
The Board in its meeting held on August 28, 2024, based on the recommendation of the Nomination and Remuneration Committee, recommended to the Shareholders to consider reappointment of Mr. Shreedhara Shetty (DIN: 02776638) as Non-Executive & Non-Independent Director liable to retire by rotation in terms of provisions of the Act at the ensuing Annual General Meeting of the Company. The necessary resolution seeking the approval of the Shareholders to re-appoint Mr. Shreedhara Shetty forms part of the Notice of the Annual General Meeting.
The brief particulars and expertise of Mr. Shreedhara Shetty seeking re-appointment have been given in the annexure to the Notice of the AGM in accordance with the requirements of the Listing Regulations and Secretarial Standards.
c. Resignation from the Board
Mr. Venkata Rao Sadhanala (DIN:02906370) resigned as Non-Executive and Non-Independent Director of the Board with effect from August 29, 2023. The Company has received confirmation from Mr. Venkata Rao Sadhanala stating that he is resigning from the Board due to professional reasons and that there are no other material reasons for his resignation. Consequently, he ceased to be the member of the Nomination and Remuneration Committee of the Board. The Board and the Management places on record their sincere appreciation for the valuable contributions to the Company's success and the assistance and guidance provided by Mr. Venkata Rao Sadhanala during his tenure as a Member of the Board/ Committees of the Company.
d. Key Managerial Personnel
In terms of Section 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details of change in Key Managerial Personnel of the Company are:
• Dr. S Prasad, Chief Executive Officer, (effective from January 06, 2024)
• Mr. Kaushik Kumar, Company Secretary & Compliance Officer (up to August 14, 2024)
• Mr. Prasanna Subramanya Bhat, Company Secretary & Compliance Officer, (effective from August 14, 2024)
Mr. Kaushik Kumar, Company Secretary & Compliance Officer of the Company resigned and is relieved from the services of the Company with effect from closing of business hours of August 14, 2024. Mr. Kaushik Kumar has stated in his Letter of Resignation dated August 05, 2024, that he is resigning from the position of Company Secretary & Compliance Officer due to personnel reasons and that there are no other material reasons for his resignation.
The Board based on the on the recommendations of the Nomination and Remuneration Committee, appointed Dr. S Prasad as a Chief Executive Officer and Mr. Prasanna Subramanya Bhat as Company Secretary & Compliance Officer of the Company.
e. Senior Management Personnel
In terms of the Listing Regulations, the Company has identified the "Senior Management Personnel" which comprise all the Key Managerial Personnel of the Company excluding the Board of Directors and includes the Chief Executive Officer, the Chief Financial Officer and the Company Secretary.
The Company has appointed Dr. S Prasad as Chief Executive Officer (effective from January 06, 2024) and Mr. Prasanna Subramanya Bhat as Company Secretary & Compliance Officer (effective from August 14, 2024), a Key Managerial Personnel and is part of the Senior Management Personnel.
Other than the above, there were no appointment, re-appointments or resignations in the Board, Key Managerial Personnel and Senior Management of the Company for the year ended March 31, 2024.
GOVERNANCE Board Governance
Board Governance is the framework that structures the Board and its operation. The Company Board's governance guidelines cover aspects relating to composition and role of the Board, Chairman and its Directors, Board diversity, definition of independence, term of Directors, retirement age and committees of the Board. The Board governance guidelines also cover key aspects relating to nomination, appointment, induction and development of Directors, remuneration, oversight on subsidiary performances, code of conduct and Board effectiveness.
Code of Conduct
The Annual declaration affirming compliance with the Code of Conduct by the Directors and Senior Management Personnel of the Company for the year ended March 31, 2024, forms part of the Corporate Governance Report.
Board and Committee Constitution
The current policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the Independence of the Board and separate its functions of governance and management. As on March 31, 2024, the Board consists of Seven members with two Non-Executive and Non-Independent Director, two Executive and Whole-time Directors, and three Independent Directors.
The details of the constitution of the Board and of the Committees, the terms of reference etc. are given in the Corporate Governance Report which forms part of this Annual Report.
Meeting of the Board/ Committees
Seven (07) Meetings of the Board of Directors were held during the year 2023-24. The particulars of the meetings held, and attendance of each Director are detailed in the Corporate Governance Report. Only in case of special and urgent business, if the need arises, the Board's / Committee's approval is taken by passing resolutions through circulation or by calling Board / Committee meetings at short notice, as permitted by law.
All the Board Meeting and Committee Meeting were held in accordance with the guidelines issued by the MCA and by the SEBI. The intervening gap between any two meetings is within the period prescribed by the Act read with Listing Regulations.
The Company has duly constituted the Committees required under the Act read with the applicable Rules made thereunder and the Listing Regulations. As on March 31, 2024. The details of the Board & Committee meetings and the attendance of the Directors in these meetings are given in the Corporate Governance Report which forms part of the Annual Report.
Board Diversity
The Company recognizes that a Board composed of appropriately qualified members with a broad range of experience relevant to the business is important for effective corporate governance. The Board of Directors values the significance of diversity and firmly believes that
diversity of background, gender, geography, expertise, knowledge and perspectives, leads to sharper and balanced decision-making and sustainable development. The Company believes that it has a truly diverse Board which leverages on the skills and knowledge, industry or related professional experience, age and gender, which helps the Company to retain its competitive advantage. The Board has adopted the Board Diversity.
The policy on Board diversity is available on the Company's website at http://www.pharmaids.com/policies.html
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure; degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); effectiveness of board processes, information and functioning, etc.; extent of co-ordination and cohesiveness between the Board and its Committees; and quality of relationship between board Members and the management.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) on January 5, 2017.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution within and outside the meetings, etc. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
Policy on Board's appointment & Remuneration
The current policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors. This maintains the independence of the Board and separate its functions of governance and management. The details of Board and Committee composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report which forms part of this Annual Report.
The Nomination and Remuneration Committee ('NRC') engages with the Board to evaluate the appropriate characteristics, skills and experience for the Board as a whole as well as for its individual members with the objective of having a Board with diverse backgrounds and experience in business, finance, governance, and public service. The NRC, basis such evaluation, determines the role and capabilities required for appointment of Director. Thereafter, the NRC recommends to the Board the selection of new Directors. The policy of the Company on Directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a Director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on http://www.pharmaids.com/policies.html
Based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors and as part of the Policy.
The salient features of the Policy are:
• To enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations.
• To ensure that the interests of Board members & senior executives are aligned with the business strategy and risk tolerance, objectives, values, and long-term interests of the company and will be consistent with the "pay-for performance" principle.
• To ensure that remuneration to directors, KMP and senior management employees of the Company involves a balance between fixed and incentive pay reflecting short- and longterm performance objectives appropriate to the working of the Company and its goals.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, in relation to financial statements of the company, the Board of Directors, to the best of its knowledge confirms that:
• In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;
• The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2024 and of the profit and loss of the company for that period;
• The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
• The directors have prepared the annual accounts on a going concern basis;
• The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
• The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE
The Company adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). The Report on Corporate Governance for the financial year ended March 31, 2024, along with the Secretarial Auditor's Certificate confirming compliance with the conditions of Corporate Governance forms part of this Annual Report which states that the Company has complied with the conditions of Corporate Governance as
stipulated in Regulations 17 to Regulation 27 and clauses (b) to (i) of Regulation 46(2) and paras C and D of Schedule V of the Listing Regulations during the year ended March 31, 2024.
Internal Control Systems
Internal financial controls are essential to ensure the accuracy and integrity of its financial information.
The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down by the Company and that such controls are adequate and operating effectively. Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Company's assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded, and reported in conformity with generally accepted accounting principles. These policies are periodically reviewed to meet business requirements.
The CEO and CFO Certificate, forming part of the Corporate Governance Report, confirms the existence and effectiveness of internal controls and reiterate their responsibilities to report deficiencies to the Audit Committee and rectify the same.
Risk Management
Risk management is embedded in the company believes that risk resilience is the key to achieve long term sustainable growth. Business Risk Evaluation and Management is an ongoing process within the Organization. In Compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations, your Company has a robust Risk Management Framework to identify, monitor and minimize risks as also identify business opportunities. At present, the Company has not identified any element of risk which may threaten the existence of the Company.
Further as per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to forming of Risk Management Committee, is not applicable to the Company during the Financial Year under review.
Vigil Mechanism/ Whistle Blower Policy
The Board of Directors have established robust Vigil Mechanism and a Whistle-blower policy for Directors and Employee to report genuine concerns in compliance of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Our Company Believes in promoting fair, transparent, ethical, and professional work environment. The company has adopted the code of conduct which provides an environment that promotes responsible and protected whistle blowing. All the employees including Directors and External Parties such as consultants, vendors, suppliers, dealers, customers and contractors working for and/ or on behalf of any of the Group entities are covered under the Whistle-blower policy.
The details of complaints received / disposed/ pending during the year ended March 31, 2024.
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Particulars
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No of Complaints of received in the year
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Nil
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No of Complaints disposed off during the year
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Nil
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No of cases pending as on March 31, 2024
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Nil
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The Vigil Mechanism and Whistle-blower policy is available on the Company's website and can be accessed at http://www.pharmaids.com/policies.html
Code of Prevention of Insider Trading
In accordance with Securities and Exchange Board of India, the Prohibition of Insider Trading Regulations, 2015, prescribing various new requirements and in line with the amendments, your Company has adopted the Code of Conduct to regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information and has been made available on the Company's website at www.pharmaids.com
SECRETARIAL GOVERNANCE
Related Party Transactions
The Company has a well-defined and structured governance process for related party transactions undertaken by the Company. In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy on Related Party Transactions. During the year under review, the Policy has been amended to incorporate the regulatory amendments in the Listing Regulations. The Policy can be accessed on the Company's website at http://www.pharmaids.com/policies.html
During the year under review, all related party transactions entered into by the Company and its subsidiaries, were approved by the Audit Committee and were at arm's length and in the ordinary course of business.
The SEBI Listing Regulations states that if any Related Party Transactions exceeds Rs.1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and would require Shareholder's approval. In this regard, for the year ended March 31, 2024, the Company has taken necessary Shareholder's approval.
Further, none of the transactions with related parties fall under the scope of Section 188(1) of the Act. The disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is annexed to the Board's Report as Annexure - D and forms a part of this report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone/consolidated financial statements forming part of this Annual Report.
The Company has not entered into any materially significant related party transactions with its Directors, or Management, or relatives, etc. that may have potential conflict with the interests of the Company at large.
Statement of deviation(s) or variation(s)
In accordance with the Regulation 32 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, where a listed entity has raised funds through preferential allotment or qualified institutions placement, the listed entity shall disclose every year, the utilization of such funds during that year in its Annual Report until such funds are fully utilized. In this connection, the Company has fully utilized the amount raised through Preferential Issue of Equity Shares and Share Warrants and the purpose for which these proceeds were raised has been achieved and there is no deviation in the use of the amount raised through Preferential Issue of Equity Shares and Share Warrants.
Demat Suspense Account/Unclaimed shares account
The Company opened a Demat account as Pharmaids Pharmaceuticals Limited - Unclaimed Suspense Account with the Choice Broking India Private Limited and transferred all unclaimed shares into one physical folio and further dematerialized the said equity shares under a demat account. When any Shareholder claim, the Company will transfer the same to the Shareholders demat account by following the procedure as prescribed under the regulations. In terms of Regulation 39 of the Listing Regulations, the Company reports the details in respect of equity shares lying in the Demat Suspense Account/Unclaimed shares account as on March 31, 2024, is given in Corporate Governance Report.
Investor Education and Protection Fund (IEPF)
The Companies Act, 2013 read with the IEPF Rules states that all the shares in respect of which dividend has remained unclaimed or unpaid for seven consecutive years or more are required to be transferred to the demat Account of the IEPF Authority. Our Company does not have any funds lying unpaid and unclaimed for a period of seven years. Therefore, there were no Funds which were required to be transferred to Investor Education and Protection Fund (IEPF).
Annual return
In accordance with the Companies Act 2013, a copy of the Annual Return as on March 31, 2024, in the prescribed format is available on the Company's website at http://www.pharmaids.com/annual-general-meeting.html
AUDITORS AND AUDITOR'S REPORT
a. Statutory Auditor - M/s. PPKG & Co., Chartered Accountants
M/s PPKG & Co, Chartered Accountants (Firm Registration No. 009655S) who have been reappointed at the 34th Annual General Meeting of the Company held on 22nd September 2023 to hold office for a term of 5 years i.e., till the conclusion of the 39th Annual General Meeting of the Company.
M/s PPKG & Co, Chartered Accountants has furnished a certificate confirming their eligibility and consent for their continuance as the Statutory Auditor of the Company and also in terms of the Listing Regulations, the Statutory Auditor have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Auditor's Report does not contain any qualification, reservation, adverse remark, or disclaimer. The Notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments.
b. Internal Auditor - T N Raghavendra, Practicing Chartered Accountant.
Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of The Companies (Accounts) Rules, 2014, the Board of Directors, based on the recommendation of the Audit Committee, have re-appointed Mr. T N Raghavendra, Practicing Chartered Accountant as an Internal Auditor of the Company on such terms and conditions as mutually agreed upon between Mr. T N Raghavendra, Chartered Accountant and the Company, to carry out the internal audit function for financial year 2024-25.
c. Secretarial Auditor - M/s Kashinath Sahu & Co., Practicing Company Secretaries
The Board of Directors at their meeting held on May 28, 2024, based on the consent received from M/s Kashinath Sahu & Co., Practising Company Secretaries, re-appointed M/s Kashinath & Co., Practising Company Secretaries (Certificate of Practice No. 4807), as Secretarial Auditor for the period of 3 years starting from 01st April 2024 of the Company to conduct Secretarial Audit.
In terms of Section 204 of the Act and the Report given by the Secretarial Auditors in the prescribed Form MR-3 forms an integral part of this Report.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.
d. Cost Auditor
The provisions relating to appointment of cost auditor and maintenance of Cost records under Section 148 of Companies Act, 2013 are not applicable to the Company.
DISCLOSURES
The following disclosures are made to the extent applicable to the Company for the year ended March 31, 2024:
The Board
• None of the Directors on the Board are members of more than 10 Committees or Chairman of more than 5 Committees across all the Companies in which he/she is a Director as required under the Listing Regulations.
• None of the Independent Directors on the Board is an Independent Director in more than seven listed Companies as required under the Listing Regulations.
• All the Directors have disclosed their interest in other companies, Directorship and membership of Committees and other positions held by them.
• The Board of Directors of the Company have not been debarred or disqualified from being appointed or continuing as Directors of the Company by the Board / Ministry of Corporate Affairs or any such Statutory Authority as per the Company's Act and Listing Regulations.
• The Certificate of Non - disqualification of Directors for the year ended March 31, 2024 issued by Kashinath Sahu, Company Secretary in Practice which states that as on April 1, 2024, the Directors on the Board of the Company have not been debarred or disqualified from being appointed or continuing as Directors of the Company by the Board/Ministry of Corporate Affairs or any such statutory authority as per of Part C of Schedule V of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 forms part of this Annual Report.
• The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration policy of the Company, Statutory Regulations and as approved by the Board and the Shareholders.
• The Company has received necessary declaration from each Independent Director of the Company stating that they meet the criteria of Independence as laid down in the Companies Act, 2013 and in the Listing Regulations and that as on April 1, 2024, the Independent Directors have not been debarred or disqualified from being appointed or continuing as Directors of the Company by the Ministry of Corporate Affairs or any such statutory authority as mentioned in the Listing Regulations.
• None of the Director (s) on the Board of the Company had resigned/retired before the expiry of their respective tenure(s).
• As required under Regulation 17(8) read with Schedule II Part B of the SEBI Listing Regulations, the Chief Executive Officer & Chief Financial Officer have given appropriate certifications to the Board of Directors.
Financial Statements
• The recommendations made by all the Committees of the Board including Audit Committee and which requires the Board approval and adoption were duly adopted and approved by the Board.
• The financial results for the year ended March 31, 2024 do not contain any false or misleading statement or figures and do not omit any material statements which may make the statements or figures contained therein misleading.
• 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 of the Companies Act, 2013 and other relevant provisions.
Secretarial Standards
The Company has complied with the applicable Secretarial Standards on Meetings of the Board
of Directors ("SS-1") and Secretarial Standards on General Meetings ("SS-2"), mandated by the
Institute of Company Secretaries of India on Board Meetings and General Meetings.
Significant or Material Orders passed by Regulators or Courts or Tribunal
• There are no significant orders that have been passed by any Regulator or Court or Tribunal which can have implications on the going concern status and the Company's operations in future and there are no material litigation outstanding.
• There are no cases pending or filed against the Company or any liabilities attached to the Company in respect of any of the matters pertaining to securities.
Other disclosures
• No Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 by or against the Company.
• During the review period, Statutory and Secretarial auditors of the company did not report any instances of fraud.
• The Company has complied with the requirements of the Stock Exchanges or SEBI on matters related to Capital Markets, as applicable, during the last three years. No penalties or strictures have been imposed on the Company.
• The Company has formulated a policy on maintaining and preserving timely and accurate records uploaded on the website of the Company. The same is available on the website of the Company at www.pharmaids.com
ACKNOWLEDGEMENT
The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government and regulatory authorities, stock exchanges, customers, vendors, members, debenture holders and debenture trustee during the year under review and look forward to their continued support in the future.
1
Adita Bio Sys Private Limited and Anugraha Chemicals are material unlisted subsidiaries of the Company as per SEBI Listing Regulations 2015.
2
Siri Labvivo Diet Private Limited and Spring Labs are the subsidiaries of Adita Bio Sys Private Limited
The Company does not have any Joint-Venture or Associate Companies nor ceased to be joint venture or associate Company of any other Company within the meaning of Section 2(6) of the Companies Act, 2013. During the year under review, the Board of Directors reviewed the affairs of material subsidiaries. There has been no material change in the nature of the business of the subsidiaries.
3
Adita Bio Sys Private Limited and Anugraha Chemicals are material unlisted subsidiaries of the Company as per SEBI Listing Regulations 2015.
4
Siri Labvivo Diet Private Limited and Spring Labs are the subsidiaries of Adita Bio Sys Private Limited
The Company does not have any Joint-Venture or Associate Companies nor ceased to be joint venture or associate Company of any other Company within the meaning of Section 2(6) of the Companies Act, 2013. During the year under review, the Board of Directors reviewed the affairs of material subsidiaries. There has been no material change in the nature of the business of the subsidiaries.
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