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Your Directors submit their report for the six months ended 31st March, 2015.
On account of losses during the period, no dividend is proposed to be declared for the financial period 1st October, 2014 to 31st March, 2015.
5. Changes in the Share Capital.
During the period under review, the Authorized share Capital of the Company has been increased from Rs. 10 Crores to Rs. 20 Crores.
6. Events subsequent to the financial results
Your company has allotted 23 lakh equity shares to M/s Ipca Laboratories Limited and 6 lakh equity shares to M/s Pinky Ventures Private Limited on preferential basis subsequent to the date of the financial results. As a result the paid up share capital of the Company is Rs. 12,41,42,860/– comprising of 1,24,14,286 equity shares.
7. Ipca Laboratories Limited
During the period under review, Ipca Laboratories Limited has acquired joint management stake in the Company and also made a public announcement of open offer to the public shareholders of the Company under SEBI(Substantial Acquisition of Shares and Takeover) Regulations, 2011.
8. Statutory Auditors
The shareholders in their meeting held on 31st December, 2014 approved the appointment of M/s Pavuluri & Co., Chartered Accountants, Hyderabad as the Statutory Auditors of the Company to hold office till the conclusion of the 27th Annual General Meeting subject to ratification of shareholders in every Annual General Meeting. Accordingly, a resolution seeking members' ratification on appointment of M/s Pavuluri & Co., Chartered Accountants, Hyderabad as the Statutory Auditors of the Company for the financial year 2015–16 is included at Item No.3 of the notice convening the Annual General Meeting.
9. Internal Auditors
The Board of Directors based on the recommendation of Audit Committee has appointed M/s Palesetti & Co, Chartered Accountants, Hyderabad, as Internal Auditors of the Company for the Financial Year 2015–16.
10. Appointment of Key Managerial Personnel
The Board of Directors at their meeting held on 13th August, 2015 has appointed Mr. Avinash Ravi as Managing Director of the Company w.e.f. 13th August, 2015 for a period of three (3) years up to 12th August, 2018. A resolution seeking the consent of the members for the appointment and remuneration of Mr. Avinash Ravi as Managing Director is included in Item No.5 to the notice convening the Annual General Meeting.
The Board of Directors at their meeting held on 13th August, 2015 also appointed Ms. Haritha Varanasi (ICSI Membership No. A34293) as the Company Secretary of the Company and Mr. CVRSN Kumar as the Chief Financial Officer of the Company w.e.f 13th August, 2015.
11. 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 has appointed M/s DSMR and Associates, Practicing Company Secretaries, as Secretarial Auditors to undertake the secretarial audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure–I to the Board's Report. There are qualifications during the period ended 31st March, 2015.
Since the Company was non operational during the period, the Company was not in a position to appoint the CS, CFO and Internal Auditors and the non–executive directors in the Board.
However, subsequently the Company has appointed them at the Board Meeting held on 13th August, 2015 and is in compliance with the constitution of Board with required Executive, Non–Executive and Independent Directors.
12. Corporate Social Responsibility:
Your Company doesn't fall under the category of companies to which the Corporate Social Responsibility is applicable.
13. Risk Management :
During the period under review, your Company doesn't fall under the category of companies to which the Risk Management Committee is mandatory as per clause 49 of the Listing Agreement.
The Board of Directors has appointed Mr. Satish Khivsara, as an Additional Director of the Company at their meeting held on 13th August, 2015, who holds office till the ensuing Annual General Meeting. The Board, based on the recommendation of the Nomination & Remuneration Committee considered the appointment of Mr. Satish Khivsara as an Independent Director subject to approval of the shareholders. Accordingly, a resolution seeking approval of the members for his appointment as an Independent Director for a period of 5 years is included in Item No. 4 of the Notice convening the Annual General Meeting.
During the period under review, the Board of Directors has appointed Mrs. Tangirala Malati as an Independent Director on 13th February, 2015. The members have approved the appointment of Mrs. Tangirala Malati at the Extra–Ordinary General Meeting held on 11th March, 2015.
During the period under review, Mr. R. Ch. Satyanarayana has resigned from the office of the Director w.e.f. 13th December, 2014.
Mr. Avinash Ravi is being appointed as the Managing Director of the Company. The Board of Directors at their meeting held on 13th August, 2015 has approved the appointment of Mr. Avinash Ravi as approved and recommended by the Nomination and Remuneration Committee. The approval of the members is sought for the said appointment of Mr. Avinash Ravi as Managing Director of the Company as Resolution Item No. 5 in the Notice to the 23rd Annual General Meeting.
Every Independent Director, at the first meeting of the Board of Directors in which he participates as a Director and thereafter at the First Meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013.
A brief profile of the Directors of the Company is annexed herewith as Annexure– II to this report.
15. Board Meetings and Committees thereof:
The Board of Directors duly met Four (4) times on 28.11.2014, 13.12.2014, 13.02.2015 and 31.03.2015 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.
The details of the Committees and their constitution and meetings held is provided in the Corporate Governance Report.
16. Fixed Deposits
Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance Sheet.
17. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, to the best of their Knowledge and belief and according to the information and explanation obtained, your Directors confirm:
i. That in the preparation of the financial statements for the period under review, the applicable accounting standards have been followed along with proper explanation relating to material departures.
ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the Company at the end of the period ended 31st March, 2015 and of the profit and/or loss of the Company for the period.
iii. That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The accounts are prepared on a going concern basis. The properties and assets of the Company are adequately covered by insurance policies.
v. that your 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
vi. that your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
18. Vigil Mechanism/Whistle Blower Policy:
The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement if any in the Company. The details of the policy are explained in the Corporate Governance Report and also posted on the website of the Company www.krebsbiochem.com
19. Code of Conduct
The Board has laid down a code of conduct for board members and senior management personnel of the Company. The Code sets the duties of Independent Directors as prescribed under the Companies Act, 2013. The Board of Directors and senior management personnel of the company adhere to the code of conduct . A declaration pertaining to the compliance of code of conduct signed by the Managing Director forms part of the Corporate Governance Report.
20. Prevention of Insider Trading.
The Company has adopted code of conduct for prevention of Insider Trading and code of fair disclosure of unpublished price sensitive information as per the SEBI(Prohibition of Insider Trading) Regulations, 2015. All the Directors, Senior Management employees and other employees who are having access to the unpublished price sensitive information are governed by the code of conduct.
Related Party Transactions:
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
As a part of the Related Party Transactions Policy, all related party transactions will be placed before the Audit Committee and also the Board for approval. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions.
The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company www.krebsbiochem.com
The particulars of contracts or arrangements with related parties referred to in sub–section (1) of Section 188 of the Companies Act, 2013 in Form AOC–2 is herewith annexed as Annexure–III to this report.
Extract of Annual Return:
The details forming part of the extract of the Annual Return in Form MGT–9 is annexed herewith as Annexure–IV to this report.
Management Discussion & Analysis:
Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis is herewith annexed as "Annexure V" to this report.
Particulars of Employees:
As required under the provisions of Section 197 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee of the Company is drawing salary of more than 60 lakhs per financial year or 5 lakhs per month, as the case may be for the period ended 31st March, 2015.
The Company has been making every endeavor to bring more transparency in the conduct of the business. As per the requirements of Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance for the period 2014–15 and a Certificate from the Auditors of the Company are furnished and forms part of this report.
Your Company takes utmost care to attract and retain efficient employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees and the management is the driving force behind the Company's vision. The employees have resumed their duties after the lay off and strike. The company has paid bonuses for the employees who have joined back their duties. Your Company appreciates the spirit of its dedicated employees.
27. Energy Conversation, technology absorption and foreign exchange earnings outgo.
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure–VI" to this report.
Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co–operation extended by them.
Your Directors gratefully acknowledge the on–going co–operation and support provided by the Central and State Governments, Stock Exchanges and SEBI and other Regulatory Bodies.
For and on behalf of the Board
Krebs Biochemicals & Industries Limited
Sd/– Avinash Ravi
Place : Hyderabad
Date : 13.08.2015