Suven Pharmaceuticals Ltd
Directors Reports
To the Members of
Suven Pharmaceuticals Limited
Your Company's Board of Directors has pleasure in presenting this
5th Annual Report together with Ind AS compliant Audited Financial Statements
of the Company for the financial year ended 31st March, 2023.
Financial Performance
( Rs. in lakhs)
|
Standalone |
Consolidated |
| Particulars |
Financial Year |
Financial Year |
Financial Year |
Financial Year |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from operations |
1,33,008 |
1,32,022 |
1,34,033 |
1,32,022 |
| Other income |
4,455 |
18,779 |
4,636 |
9,238 |
| Total income |
1,37,463 |
1,50,801 |
1,38,669 |
1,41,260 |
| Expenses |
|
|
|
|
| Operating expenditure |
74,700 |
74,023 |
77,379 |
74,080 |
| Depreciation and amortization |
4,284 |
3,910 |
4,773 |
3,910 |
| Total Expenses |
78,984 |
77,933 |
82,152 |
77,990 |
| Profit before finance costs and tax |
58,479 |
72,868 |
56,517 |
63,271 |
| Finance costs |
539 |
623 |
544 |
623 |
| Share of Profit/(Loss) of Associates |
- |
- |
- |
4,111 |
| Profit before Tax |
57,939 |
72,245 |
55,973 |
66,759 |
| Tax expense |
14,679 |
16,435 |
14,844 |
21,378 |
| Profit for the year |
43,260 |
55,810 |
41,129 |
45,380 |
| Other Comprehensive Income |
|
|
|
|
| Items that will not be reclassified to profit or loss |
(35) |
(102) |
(27) |
(102) |
| Income tax relating to items that will not be |
9 |
26 |
9 |
26 |
| reclassified to profit or loss |
|
|
|
|
| Total Other Comprehensive Income |
(26) |
(76) |
(19) |
(76) |
| Total Comprehensive Income |
43,234 |
55,734 |
41,110 |
45,304 |
| Retained earnings - opening balance |
1,27,639 |
83,588 |
1,27,271 |
93,649 |
| Add: Profit for the year |
43,234 |
55,734 |
41,110 |
45,304 |
| Less: Dividend paid |
(20,365) |
(10,183) |
(20,365) |
(10,183) |
| Transfer to General Reserve |
(1,500) |
(1,500) |
(1,500) |
(1,500) |
| Retained earnings - closing balance |
1,49,007 |
1,27,639 |
1,46,516 |
1,27,271 |
Review of Operations
On a standalone basis, during the fiscal 2022-23 under review your
Company performed well and recorded revenue of Rs.,33,008 lakhs, higher by 0.75 percent
over the previous year's revenue of 1,32,022 lakhs. The Profit after Tax (PAT) of the
Company is recorded at Rs. 43,260 lakhs in fiscal 2022-23 registering a decay of (22)
percent over the
PAT of 55,810 lakhs in fiscal 2021-22. The Earnings Per Share (EPS)
of your Company is at Rs. 16.99 in fiscal 2022-23 per share.
On consolidation basis, the profit after tax (PAT) for Fiscal 2022-23
has gone down to the order of H41,129 lakhs. The Earnings per Share (EPS) of your Company
is recorded at H16.16 per share.
The consolidated financial statements of the Company prepared in
accordance with Indian Accounting Standards as specified in the Companies (Indian
Accounting Standards) Rules, 2015, form part of the Annual Report.
Exports
The exports of the Company remained the major chunk of revenue
accounting for Rs.,29,493 lakhs, representing 97% of the total revenue operations of
Rs.,33,008 lakhs during the year under review.
Dividend
Your Directors are pleased to inform you that the Board has declared
interim dividend of Rs..00 per share and one-time special dividend of Rs. 5.00 per share
totaling to Rs..00/- (600%) per equity share of the face value of Rs..00 each on September
02, 2022 and paid to the shareholders in September 2022. The total dividend for the
financial year worked out to Rs..00/- (600%) per equity share.
Transfer to Reserves
The Company transferred Rs.,500 lakhs to the general reserve during the
current financial year.
Share Capital
The paid up Equity Share Capital as on March 31, 2023 was Rs.,545.65
lakhs. During the year under review, the Company has not issued any shares with
differential voting rights nor granted stock options or sweat equity shares.
Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on March 31, 2023 is available on the Company's website and can be
accessed at web link at https://suvenpharm.com/financial-info/#financialInfosection
Number of Meetings of the Board and Audit Committee
During the year under review six Board Meetings were convened and held
and five Audit Committee Meetings were convened and held. The details of Board meetings
and Audit Committee meetings are presented in the Corporate Governance report, which forms
part of this Annual Report. The Audit Committee composed of independent and non-executive
directors. Shri Rs.. G. Prasad is the Chairperson of the Audit Committee and Shri V.
Sambasiva Rao and Shri J. V. Ramudu are members of the Audit Committee. The time gap
between the said meetings was within the period prescribed under the provisions of the
Companies Act, 2013 and the SEBI guidelines thereof.
Directors Responsibility Statement
Your Directors state that:
(a) The applicable accounting standards have been followed in the
preparation of the Annual Accounts and there were no material departures.
(b) Such accounting policies have been selected and applied
consistently and judgments and estimates made when required 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.
(c) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
(d) The Directors have prepared the Annual Accounts on a going concern
basis.
(e) Proper internal financial controls were in place to be followed by
the Company and that the financial controls were adequate and were operating effectively.
(f) Proper systems devised to ensure compliance with the provisions of all applicable laws
and that such systems are adequate and operating effectively.
Policy on Nomination & Remuneration
The Board has, on the recommendation of the Nomination &
Remuneration Committee framed a policy for selection and appointment of Directors, Senior
Management and their remuneration. The Remuneration Policy is stated in the Corporate
Governance Report and forms part of this report and is also available on
https://www.suvenpharm. com/images/pdf/policies/Remuneration_Policy.pdf
Dividend Distribution Policy
The Board has adopted a suitable Policy for Dividend Distribution as
per the requirements of SEBI Guidelines. The policy is stated in the Annual Report and has
been uploaded on the Company's website and can be accessed at
https://www.suvenpharm.com/images/pdf/policies/ dividend-distribution-policy.pdf
Particulars of Loans, Guarantees or Investments
Details of loans given, investments made, guarantees given and
securities provided are furnished in the Standalone Financial Statement which can be
referred at Note No. 6 and 31 to the Standalone Financial Statements.
Apart from this, the Company did not give any Loans, investments or
provided Guarantees or any security during the year under the provisions of Section 186 of
the Companies Act, 2013.
Subsidiary companies
Your Company has one international wholly owned subsidiary company and
one Indian wholly owned subsidiary Company as on 31st March, 2023. The
consolidated financial statements of the Company prepared in accordance with Indian
Accounting Standards as specified in the Companies (Indian Accounting Standards) Rules,
2015, form part of the annual report.
Pursuant to the provisions of Section 129(3) of the Companies Act,
2013, a statement containing salient features of financial statements of subsidiaries in
Form AOC-1 is attached to the financial statements of the Company. Further, pursuant to
the provisions of Section 136 of the Act, separate audited financial statements in respect
of the subsidiary companies shall be kept open for inspection at the Registered Office of
the Company during working hours for a period of 21 days before the date of the Annual
General Meeting. Your Company will also make available these documents upon request by any
Member of the Company interested in obtaining the same. The separate audited financial
statements in respect of the subsidiary companies is also available on the website of your
Company at https://suvenpharm.com/financial-info/ #financialInfosection
Related Party Transactions
The Particulars of contracts or arrangements with related parties
referred to in sub-section (1) of section 188 in the prescribed Form AOC-2 pursuant to
clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014, forms part of this report as "Annexure – A".
The Board has approved a policy for related party transactions and has
been uploaded on the Company's website.
Casper Pharma acquisition
During the year, your company has acquired 100% state in Caper Pharma
Private Limited, a Hyderabad based SEZ unit in formulations business for a purchase
consideration of H15680.45 Lakhs from the seller shareholders and the Company has further
invested an amount of H4172.92 Lakhs by way of subscription to the 52,16,156 Rights equity
shares of the Casper Pharma in June 2022. The Casper Pharma is now Wholly Owned Subsidiary
and the annual accounts of the said subsidiary are consolidated with the Company for the
financial year ended 31st March, 2023. The USFDA inspection of SEZ unit of
Casper Pharma Private Limited is completed during the year.
Material Changes and Commitments Affecting Financial Position of the
Company
There are no material changes and commitments, affecting the financial
position of the Company, which has occurred between the end of the financial year of the
Company i.e. March 31, 2023 and the date of the Directors' report i.e. May 25, 2023.
Change in Management
During the year the founder promoters of the company have signed
definitive agreement to sell a part of their stake to the extent of 12,75,37,043 equity
shares of face value of Rs./- each representing 50.10% of paid up capital of your
company to the Acquirer – Berhyanda Limited for a purchase consideration of Rs. 495/-
per equity share of face value of Rs./- each. The Acquirer had obtained all statutory
approvals such as CCI, Department of Pharmaceuticals under Ministry of Chemicals &
Fertilizers of Govt. of India.
The said transaction was consummated on September 29, 2023. Your
company's operations will be under new management – Advent International
Corporation a USA based private equity fund which has invested in your company through its
investment arm Berhyanda Limited a Cyprus based foreign company.
Change in Board of Directors
As there was a change in management pursuant to take over as per SEBI
Regulations, the following new Directors were appointed on the Board as Additional
Directors in compliance with the applicable provisions of Companies Act, 2013 and SEBI
Regulations.
| 1. |
Mr. Vaidheesh Annaswamy |
Executive Chairman |
| 2. |
Dr. Vetukuri Venkata Naga Kali Vara Prasada
Raju |
Managing Director |
| 3. |
Mr. Pankaj Patwari |
Non-Executive Director |
| 4. |
Ms. Matangi Gowrishankar |
Independent Director |
| 5. |
Mr. Vinod Rao |
Independent Director |
| 6. |
Mr. Kumarapuram Gopalakrishnan
Ananthakrishnan |
Independent Director |
The brief profile(s) of above director(s) seeking appointment at the
ensuing Annual General Meeting are presented in the Annual Report.
All the previous Directors have resigned from the Board effective from
September 29, 2023 as such there will be no retiring director seeking re-appointment in
this 5th Annual General Meeting of your Company.
Directors and Key Managerial Personnel
The Company did not appoint any Director during the year under review.
None of the Directors has resigned during the year under review.
In the opinion of the Board, all the new Independent Directors possess
the integrity, expertise and experience including the proficiency required to be
Independent Directors of the Company, fulfill the conditions of independence as specified
in the Act and the Listing Regulations and are independent of the management and have also
complied with the Code for Independent Directors as prescribed in Schedule IV of the
Companies Act, 2013.
The Company did not appoint any Key Managerial Personnel during the
year under review. None of the Key Managerial Personnel has resigned during the year under
review.
Declaration by Independent Directors
All independent directors of the Company have given declarations under
Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of
independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25 of
SEBI Listing Regulations and also afirmed compliance with Code of conduct as required
under Regulation 26(3) of the Listing Regulations.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information on conservation of energy, technology absorption,
foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies
Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, forms part of this
report as "Annexure – B".
Risk Management Policy
Your Company has formulated a suitable risk management policy to take
care of all aspects of Contract Development and Manufacturing Operations (CDMO) business
model of your Company: viz., competitive position, capabilities, various risk covers and
risk mitigation preparedness etc. Your Company operates with rich talent pool of
scientists having 2 decades of experience in the form of expertise, capability and timely
deliverables to global innovators to ensure smooth flow of CDMO projects to sustain steady
revenues. In addition, your company regularly conducts safety and preventive audits in all
plants and ensures that necessary safeguards are in place to protect the work force and
assets against all perils with appropriate insurance policies.
Corporate Social Responsibility
In compliance with Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established
Corporate Social Responsibility (CSR) Committee composed of Shri J.V.RamuduasChairperson,Smt.DeepanwitaChattopadhyay,
Dr. V. Sambasiva Rao and Shri Venkateswarlu Jasti as members. The CSR programs of the
Company are being implemented by Suven Trust. As of 31st March, 2023 there were
no amounts due payable to Suven Trust by your Company. In accordance with the amended
rules your company does not require to undertake the impact assessment of CSR projects.
Annual Report on CSR Activities forms part of this Report as
"Annexure – C". The CSR Policy, Committee Composition and CSR programs
details are available on the Company's website on
https://suvenpharm.com/csr/csr-policy/
Performance Evaluation of the Board
Pursuant to the provisions of the Companies Act, 2013 and as per the
SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation
of its own performance, the directors individually as well as the evaluation of the
working of its Committees. The Independent Directors separately carried out evaluation of
Chairperson, Non Independent Directors and Board as a whole. The performance of each
committee was evaluated by the Board, based on views received from respective committee
members. The manner in which the evaluation has been carried out has been explained in the
Corporate Governance Report.
Deposits
During the FY 2022-23, the Company has not accepted any fixed deposits,
and, as such, no amount on account of principal or interest on deposits was outstanding as
on the date of the balance sheet.
Internal Financial Control Systems and their Adequacy
Your Company has laid down set of standards which enables to implement
internal financial control across the organization and ensure that the same are adequate
and operating effectively (1) to provide reasonable assurances that: transactions are
executed in conformity with generally accepted accounting principles/standards or any
other criteria applicable to such statements, (2) to maintain accountability for assets;
access to assets is permitted only in accordance with management's general or
specific authorization and the maintenance of records that are in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of the
company; and (3) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the assets that could have a material
effect on the financial statements. The Audit Committee of the Board reviews the reports
submitted by the independent internal auditors and monitors the functioning of the system.
Vigil Mechanism
The Company promotes ethical behavior in all its business activities.
Towards this, the Company has adopted a policy on Vigil Mechanism and Whistle Blower to
deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower
Policy is explained in the Corporate Governance Report and also posted on the website of
the Company. https://www. suvenpharm.com/images/pdf/ policies/whistle-blower-policy.pdf
Particulars of Employees and Remuneration
The information required under Section 197(12) of the Act read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, forms part of this report as "Annexure – Rs.".
Corporate Governance
A detailed Report on Corporate Governance prepared in substantial
compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements)
Regulations,
2015 with the Stock Exchanges together with the Practicing Company
Secretary Certificate regarding the compliance of conditions of corporate governance, is
presented in a separate section forming part of the Annual Report.
Management's Discussion and Analysis
Management's Discussion and Analysis Report for the year under
review, as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015, is
presented in a separate section forming part of the Annual Report.
AUDITORS
Statutory Auditors
Pursuant to the provisions of section 139 of the Companies Act, 2013
and the Rules framed thereunder the Company in its 1st Annual General Meeting
(AGM) held on 30th November, 2019 has appointed M/s. Karvy & Co., Chartered
Accountants (Firm Registration No. 001757S) as statutory auditors for a period of 5 years
from the conclusion of 1st AGM till the conclusion of the sixth AGM to be held
in the year 2024. The Companies (Amendment) Act, 2017 dispensed the ratification of
auditor's appointment at every Annual General Meeting. The Auditors' Report does
not contain any qualifications nor adverse remarks.
Secretarial Auditors
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. DVM & Associates LLP, Company Secretaries to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report forms part of this report
as "Annexure – E". The Secretarial Audit Report does not contain any
qualifications nor adverse remarks.
Cost Records and Audit
During the year under review, in terms of Cost (Records and Audit)
Amendment Rules, 2014 dated 31st December 2014 issued by the Central
Government, the requirement for Cost Audit is not applicable to the Company based on the
export turnover criteria prescribed under Cost Audit Rules. However, the Company is
maintaining such accounts and record as specified by the Central Government and as
applicable to the Company under sub-section (1) of section 148 of the Companies Act, 2013.
Business Responsibility and Sustainability Report
The Business Responsibility and Sustainability Report as required under
the SEBI Listing Regulations, describing the initiatives taken by the Company from
environment, social and governance perspective, forms part of this report as "Annexure-F".
Employees Stock Option Scheme
The Company grants share-based benefits to eligible employees with a
view to attracting and retaining the best talent, encouraging employees to align
individual performances with Company objectives, and promoting increased participation by
them in the growth of the Company.
Suven Pharma Employee Stock Option Scheme 2020 ("SPL ESOP
2020")
As per the approval given by the shareholders in the AGM held on 14th
September 2020, the Board has been authorized to introduce, offer, issue and provide
share-based incentives to eligible employees of the Company and its subsidiaries under the
SPL ESOP 2020 scheme. In terms of the scheme the total number of options to be granted are
10,00,000 of face value of Rs./- each.
The nomination and remuneration committee (NRC) has not granted any
options under the SPL ESOP 2020 scheme during the year ended 31st March, 2023.
Upon the granting of the options it shall vest in one or more tranches based on the
achievement of defined annual performance parameters as determined by the administrator
(the NRC). The total number of equity shares to be allotted to the employees of the
Company and its subsidiaries under the SPL ESOP 2020 does not cumulatively exceed 1% of
the issued capital.
The SPL ESOP 2020 is drawn up in compliance with SEBI (Share Based
Employee Benefits) Regulations, 2014, as amended from time to time, and there has been no
material change to the plans during the fiscal.
The SPL ESOP 2020 details, including terms of reference, and the
requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits)
Regulations, 2014, are available on the Company's website, at www.suvenpharm.com. As
the Company has not yet granted any options during the year ended 31st March,
2023, the details of the options granted, vested and exercised as per SPL ESOP 2020 is not
available in the Notes to accounts of the financial statements in this Annual Report.
Transfer of Unpaid and Unclaimed amounts to Investor Education and
Protection Fund (IEPF)
Your company will ensure compliance of the applicable provisions of
IEPF Rules at appropriate time, since your company is incorporated in the year 2018.
DisclosureinrelationtotheSexualHarassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee as specified under Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
General
During the FY2023, there is no change in the nature of business of the
company or of its wholly owned subsidiaries. There are no other companies that have become
or ceased to be your Company's subsidiaries, joint ventures or associate companies
during the year.
The Company has complied with the provisions of all applicable
Secretarial Standards issued by the Institute of Company Secretaries of India during the
year under review. Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no transactions on these matters
during the year under review:
(i) The details of frauds reported by auditors under sub-section (12)
of section 143 other than those which are reportable to the Central Government
(ii) The details of application made or any proceeding pending under
the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their
status as at the end of the financial year.
(iii) The details of difference between amount of the valuation done at
the time of one-time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof.
(iv) There are no significant material orders passed by the regulators/
courts /tribunals, which would be impact the going concern status of the company and its
future operations.
The Board's Report was originally approved on May 25, 2023 and
subsequently, revised due to change in the Board of Directors of the Company pursuant to
takeover of the controlling interest in the Company.
Acknowledgements
Your Directors wish to place on record their gratitude to Shareholders
for the confidence reposed by them and thank all the shareholders, customers, dealers,
suppliers and other business associates for their contribution to your Company's
growth. The Directors also wish to place on record their appreciation of the valuable
services rendered by the executives, staff and workers of the Company.
Your Directors also thank the Central Government and State Government,
the Financial Institutions and Banks for their support during the year and we look forward
to its continuance.
For and on behalf of the Board of Directors
|
Venkateswarlu Jasti |
Rs.. G. Prasad |
| Place: Hyderabad |
Managing Director |
Director |
| Date: September 29, 2023 |
DIN: 00278028 |
DIN: 00160408 |
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