The directors submit annual report of Krebs Biochemicals & Industries Limited (theCompany) along with the audited financial statements for the financial year ended 31stMarch 2018.
1. Financial Summary
| || ||(Rs. in lakhs) |
|Particulars ||2017-18 ||2016-17 |
|Net Sales ||2538.24 ||197.02 |
|Other Income ||860.28 ||163.52 |
|Total Income ||3398.52 ||360.54 |
|Expenditure ||4128.09 ||1153.02 |
|P(L)BDIT ||(729.57) ||(792.48) |
|Loss on sale of Assets ||Nil ||Nil |
|PBDIT (After Extra Ordinary Items) ||(729.57) ||(792.47) |
|Finance Charges ||516.52 ||348.85 |
|Depreciation ||414.97 ||423.37 |
|Profit/(Loss) Before Tax ||(1661.06) ||(1564.70) |
|Exceptional Items ||(121.43) ||(40.24) |
|Deferred Tax Asset ||Nil ||Nil |
|Taxes of earlier years ||Nil ||Nil |
|Net profit/(Loss) after Tax ||(1782.49) ||(1604.94) |
|Other Comprehensive Income ||(143.12) ||451.26 |
|Total comprehensive income for the period (comprising Profit/(loss) and other comprehensive income for the year) ||(1925.61) ||(1153.68) |
|Add: balance brought Forward ||(7127.49) ||(5973.81) |
|Less: Depreciation ||Nil ||Nil |
|Add: Transferred from Profit & Loss Account ||(1925.61) ||(1153.68) |
|Balance Carried to Balance Sheet ||(9053.10) ||(7127.49) |
2. Financial Performance
During the year under review the Company has posted net sales of Rs. 2538.24 lakhs andRs. 860.28 lakhs as other income. For the FY 2017-18 the company has incurred a loss ofRs. 1925.61 lakhs as against loss of Rs. 1153.68 lakhs of the previous year ended 31stMarch 2017.
3. Change in nature of business
During the year under review there is no change in the nature of business of thecompany.
On account of losses during the year no dividend is proposed to be declared for thefinancial year 2017-18.
During the FY 2017-18 three products were commercialized and were released into themarket. Some of the products are in development stage and will start commercial productionwithin few months down the line.
Some modernization works were also undertaken to meet the latest pollution controlnorms and safety regulations. All relevant licenses were renewed. All the pendingstatutory requirements were addressed.
6. Material changes and commitments affecting the financial position of the company.
During the year under review there were no material changes occurred and commitmentsmade that affect the financial position of the company.
7. Rights Issue :
At the 145th Meeting held on 30th July 2018 the Board of Directors has approved theproposal of raising of funds by way of offer and issue of equity shares to the members ofthe Company on rights basis (Rights Issue) for an amount of upto Rs. 25 crores subject tonecessary approvals/consents under the provisions of SEBI (ICDR) Regulations 2009 SEBI(LODR) Regulations 2015 and the Companies Act 2013.
8. Issue of Equity Shares
During the year under review the company has not issued any shares.
9. Statutory Auditors
At the 21st Annual General Meeting held on 31st December 2014 the members of theCompany approved the appointment of M/s Pavuluri & Co. Chartered Accountants (FirmRegistration No. 012194S) Hyderabad as the Statutory Auditors of the Company to holdoffice till the conclusion of the 27th Annual General Meeting.
In terms of first proviso of Section 139 of the Companies Act 2013 the appointment ofthe Auditors shall be placed for ratification at every Annual General Meeting. Since thenprovision to sub-section (1) of Section 139 of the Companies Act 2013 which provided forratification every year has been deleted. However since the resolution passed on 31stDecember 2014 contains such requirement it has been decided as a measure of abundantcaution to have ratification of appointment Statutory Auditors done by the members forthe entire unexpired period.
The Statutory Auditors have confirmed their compliance with the provisions of theCompanies Act 2013.
10. Internal Auditors:
The Board of Directors based on the recommendation of Audit Committee has re-appointedM/s Suryanarayana& Suresh Chartered Accountants Hyderabad as Internal Auditors ofthe Company for the Financial Year 2018-19 at their meeting held on 30th July 2018. Theinternal auditors submit their reports at quarterly intervals to the Audit Committee andthe Board.
11. Directors and Key Managerial Personnel
During the year there is no change in the Board of Directors of the company.
During the year the non-executive directors of the company had no pecuniaryrelationship or transactions with the company other than sitting fees and reimbursementof expenses incurred by them for the purpose of attending meetings of the Company.
During the year under review Mr. Manish Jain has retired by rotation and beingeligible for re-appointment at the 25th Annual General Meeting held on 26th September2017 he had been re-appointed as Director.
Mr. E J Babu retires by rotation as Director and he offers himself for re-appointmentat the ensuing 26th Annual General Meeting to be held on 10th September 2018.
Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial
Personnel of the Company are-
Mr. Avinash Ravi Managing Director
*Mr. C V R S N Kumar - Chief Financial Officer and Ms. Haritha Varanasi - CompanySecretary
*Mr. C V R S N Kumar has ceased as the CFO of the Company due to attaining of age ofsuperannuation as per the company rules and the Board at their meeting held on 25th May2018 has approved the same.
The Board is in the process of selecting a suitable person as CFO for the Company.
12. Declaration of Independence
The Company has received the declarations under Section 149 (6) of the Companies Act2013 from the independent directors that each of them meets the criteria of independenceand there has been no change in the circumstances which may affect their status asindependent directors during the year.
13. Board Meetings
During the financial year 2017-18 Four (4) meetings of the Board were held. Details ofthe meetings of the board are provided in the corporate governance report which forms partof this report.
14. Corporate Social Responsibility
The Company regards the wider community in which it operates to be an importantstakeholder and actively contributes towards its welfare. According to the provisions ofSection 135 of the Companies Act 2013 the company doesn't fall under the categories ofthe companies to which the Corporate Social Responsibility is applicable. However thecompany feels that making a positive contribution to the local community is the rightthing to do and to this end during the year has contributed towards welfare of the poorold aged and differently abled persons.
15. Quality Initiatives
The Company is committed to meet the highest levels of quality to meet the customersatisfaction and robust practices are being implemented and continuous training is beingprovided to all the employees to achieve the targets set by the company.
The Company is committed to meet the standards set by USFDA WHO-GMP & EDQM. OurUnit-II site was approved by EDQM in May 2017. Also several customer audits were completedand were approved at Unit-I Nellore and at Unit-II Vizag..
The Company is totally focused on improving and implementing best-in classmethodologies to meet the customer satisfaction levels with zero complaints.
16. Policy on directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) has been disclosed in the Corporate Governance Report whichforms part of this report.
17. Board Evaluation
The Nomination and Remuneration Committee lays down the criteria for performanceevaluation of independent directors Board of Directors and Committees of the Board. Thecriteria for performance evaluation is based on the parameters like attendance andparticipation at the meetings of the Board and Committees thereof contribution tostrategic decision making review of financial statements business performance.
The evaluation of Board of Directors is performed by the Board after seeking all theinputs from the Directors and the Board Committees by seeking inputs from the Committeemembers.
The performance evaluation of the individual directors is done by the Nomination andRemuneration Committee.
The performance evaluation of non-independent directors the Board as a whole and theChairman is done by a separate meeting of Independent directors after taking inputs fromthe Executive directors.
18. Familiarisation program for independent Directors
The Company has conducted familiarisation programs for the independent directors asrequired under the provisions of Companies Act 2013.
19. Internal Financial Control Systems and their adequacy
The details in respect of internal financial controls and their adequacy are includedin the Management Discussion and Analysis Report which forms part of this report.
20. Secretarial Standards
The company is in due compliance with the applicable secretarial standards.
21. Audit Committee
The Company has a duly constituted Audit Committee and the Board has accepted all therecommendations of Audit Committee during the year under review. The members of the AuditCommittee are:
|a) Mr. G V L Prasad ||- Chairman |
|b) Mr. Satish Khivsara ||- Member |
|c) Dr. Malati Tangirala ||- Member |
The details pertaining to meeting role and responsibilities of Audit Committee areprovided in the Corporate Governance Report which forms part of this report.
22. Nomination and Remuneration Committee
The Company has in place a duly constituted Nomination and Remuneration Committee whichhas
a) Mr. Satish Khivsara as Chairman
b) Mr. G V L Prasad
c) Dr. Malati Tangirala
d) Dr R T Ravi as Members
Details pertaining to meetings role and responsibilities of Nomination andRemuneration Committee are provided in the corporate Governance Report which forms part ofthis report.
23. Stakeholders Relationship Committee
The Company has constituted a Stakeholders Relationship Committee as required under theprovisions of SEBI Listing Regulations and the Companies Act 2013. Members of thecommittee are
|a) Mr. G V L Prasad ||- Chairman |
|b) Mr. Satish Khivsara ||- Member |
|c) Mr. Avinash Ravi ||- Member |
|d) Dr R T Ravi ||- Member |
Details pertaining to meetings role and responsibilities of Stakeholders RelationshipCommittee are provided in the corporate Governance Report which forms part of this report.
24. Loans and Investments
During the year under review the company has not given any loans and not made anyinvestments under the provisions of Section 186 of the Companies Act 2013.
25. Particulars of Employees.
Pursuant to the provisions of Section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee of the Company is drawing salary of more than Rs. 1.04 crores (Rupees One CroreFour Lakhs) per financial year or Rs. 8.5 lakhs (Eight Lakh Fifty Thousand) per month asthe case may be for the year ended 31st March 2018.
Details of the remuneration drawn by the Key Managerial Personnel is provided inAnnexure I to the Board's Report.
26. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s DSMR and Associates Practicing Company Secretaries as Secretarial Auditorsto undertake the secretarial audit of the Company . The Secretarial Audit Report isannexed herewith as Annexure- II to the Board's Report.
Qualifications in Secretarial Audit Report:
|S. No ||Observations in Secretarial Audit Report ||Board's explanation/comments |
|1 ||Delay in payment of annual listing fees to the Stock Exchanges ||There was an inadvertent delay in payment of annual listing fees. However the annual listing fees are paid along with the applicable penal interest. |
|2 ||Non maintenance of 100% promoter shareholding in dematerialized form ||1000 shares of Mrs. Hemalata Ravi and 19400 shares of Dr R T Ravi are under legal dispute in the court of law and hence the same could not be dematerialized. |
|3 ||Delay in obtaining listing and trading approvals for 680000 shares allotted to Mrs. Hemalata Ravi pursuant to conversion of warrants ||Since the company was under suspension in NSE during the period of allotment the required listing and trading approvals and corporate actions could not be done. However as on date all the required approvals have been obtained by the company and all the shares issued by the Company as on date are listed and trading at BSE & NSE. |
|4 ||Penalty by BSE Limited for delay in filing of quarterly reports as required under the erstwhile Listing Agreement. ||BSE Limited has imposed a penalty of Rs. 330143/- for delay in filing of quarterly reports as required under the erstwhile Listing Agreement for the years 2013-14 and 2014-15. Due to absence of Company Secretary during the period there was an inadvertent delay in filing the same. The company has paid the penalty amount imposed by BSE. As on date the Company is compliant with all the listing regulations compliances. |
27. Transactions with related parties
None of the transactions with related parties are material in nature as per the RelatedParty Transactions policy adopted by the Company. Information on transactions with relatedparties are given in Annexure-III in Form AOC-2 and the same forms the part of thisreport.
28. Fixed Deposits
The Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance Sheet.
29. Extract of Annual Return:
As provided under Section 92(3) of the Act the extract of annual return is given inAnnexure - IV in the prescribed Form MGT-9 which forms part of the report.
30. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a fair and true viewof the state of affairs of the Company at the end of the financial year;
iii) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
iv) They have prepared the annual accounts on a going concern basis.
v) They have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively.
vi) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
31. Disclosure Requirements
As per SEBI Listing Regulations Corporate Governance Report with Auditors' Certificatethereon and Management Discussion and Analysis are attached which form part of thisreport.
32. Prevention of Insider Trading
The Company has also adopted a code of conduct for prevention of insider trading. Alldirectors senior management employees and other employees who have access to theunpublished price sensitive information of the company are governed by the Code. Duringthe year under report there has been due compliance with the code of conduct forprevention of insider trading.
The said code is available in the company's website www.krebsbiochem.com.
33. Vigil Mechanism/Whistle Blower Policy
The Company has in place whistle blower policy and no personnel have been deniedaccess to the Chairman of the Audit Committee. The policy also provides for thesafeguarding of whistle blowers. The whistle blower policy is available on website of thecompany www.krebsbiochem.com.
34. Energy conservation technology absorption and foreign exchange earnings outgo.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-V to this report.
35. Safety Environment and Health
The Company considers safety environment and health as the management responsibility.The employees are provided training programs at regular intervals on manufacturingfacilities on safety and environment.
36. Significant or material orders passed against the company.
Several creditors have filed winding up petitions with the High Court of Andhra Pradeshand Telangana. However they don't have a significant impact on the on-going activitiesand operations of the company.
During the year under review there were no significant or material orders passedagainst the company by regulators/ Courts/Tribunals impacting the going concern status andoperations of the company in future.
Your Directors take this opportunity to express their sincere appreciation to theshareholders customers bankers employees suppliers and other business associates forthe excellent support and co-operation extended by them.
Your Directors gratefully acknowledge the on-going co-operation and support provided bythe Central and State Governments Stock Exchanges and SEBI and other Regulatory Bodies.
|For and on behalf of the Board of || |
|Krebs Biochemicals & Industries Limited || |
|Sd/- ||Sd/- |
|Avinash Ravi ||Dr. R T Ravi |
|Managing Director ||Chairman & Director |
|(DIN-01616152) ||(DIN- 00272977) |
|Place: Hyderabad || |
|Date: 30.07.2018 || |