Dear Shareholders,
On behalf of the Board of Directors of the Company, it gives me
pleasure in presenting the 32nd Board's Report, along with the Audited Financial
Statements (Consolidated & Standalone) for the financial year ended March 31,
2023.
1) Financial performance
Company has prepared the consolidated and standalone financial
statements for the financial year ended March 31, 2023 in accordance with the Indian
Accounting Standards (Ind AS) as prescribed under the Companies Act, 2013 (Act).
Key highlights of financial performance of the Company for the
financial year ended March 31, 2023 is provided below:
(Figures in Million)
|
|
Consolidated Basis |
|
|
Standalone Basis |
|
|
|
Particulars |
FY 2022-23 |
|
FY 2021-22 |
|
FY 2022-23 |
|
FY 2021-22 |
|
|
INR |
USD* |
INR |
USD** |
INR |
USD* |
INR |
USD** |
1.1 Financial |
|
|
|
|
|
|
|
|
Continuing Operations |
|
|
|
|
|
|
|
|
Income |
37,787.15 |
459.75 |
32,022.38 |
421.74 |
19,385.62 |
235.86 |
21,024.88 |
276.90 |
Operating Profit (EBITDA) |
5,205.09 |
63.33 |
1,118.82 |
14.73 |
1,825.43 |
22.21 |
2,001.15 |
26.36 |
Net Profit (PAT) |
(2,308.99) |
(28.09) |
(4,742.50) |
(62.46) |
46.82 |
0.57 |
1,801.88 |
23.73 |
Other Equity |
21,219.55 |
258.18 |
22,694.38 |
298.89 |
33,647.48 |
409.39 |
33,168.93 |
436.84 |
Non-Controlling Interest |
(393.75) |
(4.79) |
240.88 |
3.17 |
|
|
|
|
1.2 Profits |
|
|
|
|
|
|
|
|
Operating Profit (EBITDA) |
5,205.09 |
63.33 |
1,118.82 |
14.73 |
1,825.43 |
22.21 |
2,001.15 |
26.36 |
Less: |
|
|
|
|
|
|
|
|
Finance Cost |
2,611.42 |
31.77 |
1,767.44 |
23.28 |
1,386.82 |
16.87 |
742.41 |
9.78 |
Depreciation & Amortisation |
2,432.52 |
29.60 |
2,330.14 |
30.69 |
936.21 |
11.39 |
1,043.66 |
13.75 |
Exceptional Items (Gain)/ Loss |
(170.32) |
(2.07) |
2,438.25 |
32.11 |
150.00 |
1.83 |
- |
- |
Profit Before Tax |
(9.17) |
(0.11) |
(5,417.01) |
(71.34) |
(647.60) |
(7.88) |
215.08 |
2.83 |
Share of Profit/ (Loss) of Joint Ventures and Associates |
(2,852.83) |
(34.71) |
(1,108.12) |
(14.59) |
|
|
|
|
Profit Before Tax |
(2,862.00) |
(34.82) |
(6,525.13) |
(85.94) |
(647.60) |
(7.88) |
215.08 |
2.83 |
Less: Tax Expenses /(Benefit) |
(553.01) |
(6.73) |
(1,782.63) |
(23.48) |
(694.42) |
(8.45) |
(1,586.80) |
(20.90) |
Profit After Tax |
(2,308.99) |
(28.09) |
(4,742.50) |
(62.46) |
46.82 |
0.57 |
1,801.88 |
23.73 |
Profit/ (Loss) from Discontinued operations |
185.69 |
2.26 |
- |
- |
- |
- |
- |
- |
Total Profit |
(2,123.30) |
(25.83) |
(4,742.50) |
(62.46) |
46.82 |
0.57 |
1,801.88 |
23.73 |
Other Comprehensive Income |
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit/ (loss) (Net of
Tax) |
(568.05) |
(6.91) |
(67.68) |
(0.89) |
51.95 |
0.63 |
(1.63) |
(0.02) |
Items that may be reclassified to profit/ (loss) (Net of Tax) |
647.21 |
7.87 |
557.67 |
7.34 |
(15.80) |
(0.19) |
(38.58) |
(0.51) |
Total Other Comprehensive Income (Net of Tax) |
79.16 |
0.96 |
489.99 |
6.45 |
36.15 |
0.44 |
(40.21) |
(0.53) |
Total Comprehensive Income |
(2,044.14) |
(24.87) |
(4,252.51) |
(56.01) |
82.97 |
1.01 |
1,761.67 |
23.20 |
Notes:
* 1 USD = I82.19 (Exchange Rate as on March 31, 2023) ** 1 USD = I75.93
(Exchange Rate as on March 31, 2022)
2) Company's performance
During FY 2022-23, your Company delivered a strong performance with
sharper focus on growth, profitability and governance.
Consolidated revenue1 of the Company grew by ~20% from I30,946 Million
in FY 2021-22 to I 37,042 Million in FY 2022-23, aided by significantly improved
performance in the Regulated Markets.
Gross margins2 grew by 463 basis points, from 51.50% in FY 2021-22 to
56.10% in FY 2022-23, an absolute increase of I4,850 Million i.e., from I15,923 Million in
FY 2021-22 to I20,773 Million in FY 2022-23. Gross margins in Q4 FY 2022-23 stood at
59.50%, inched very close to the Company's historical peaks.
Steps taken to improve product-level costs, alternative vendor
development for APIs and packaging material, improved efficiency in the production
processes and yield loss minimisation has contributed to increased gross margins.
Further, reduction in operating expenses at manufacturing sites, cost
of shipping, and overheads also contributed to the rise in EBITDA for FY 2022-23.
EBITDA3 for FY 2022-23 stood at I4,460 Million, an increase of I4,418
Million over FY 2021-22 EBITDA. Overall EBITDA margin has improved in FY 2022-23 by
1,190 basis points to 12%.
On the debt position, Company reduced its total gross debt by I2,528
Million from I24,617 Million in FY 2021-22 to I 22,089 Million in FY 2022-23, by
utilisation of Arrotex proceeds and cash from operations. This reduction was despite
increased sales and gross margins of I6,096 Million and I4,850 Million, respectively,
significantly improving the net debt to EBITDA ratio. From 8.3x in Q1 FY 2022-23, Net Debt
to Q4 FY 2022-23 Annual EBITDA was at 3.4x, nearing the targeted net debt to EBITDA of
under 3x.
On compliance front, USFDA reclassified the Puducherry facility after
lifting the warning letter issued to the site in June 2019.
Company received Establishment Inspection Reports (EIR) from USFDA
confirming successful conclusion of inspections at four of our five USFDA approved
manufacturing sites, i.e., Bengaluru, Puducherry, Singapore and Chestnut Ridge (US).
1 Consolidated revenue referred in this section excludes interest
income and income from current investments.
2 Gross margin referred in this section excludes cost of materials
consumed, purchases of stock-in-trade & changes in inventories of finished goods,
work-in-progress and stock-in-trade.
3 EBITDA referred in this section excludes employee benefits expense
& other expenses.
Market Wise Performance
Regulated Markets
The Regulated Markets vertical comprising businesses in the US and
Other Regulated Markets (ORM), including the UK, the EU, Canada, Australia, and
South Africa witnessed a growth of ~36% during the year. The Regulated Markets business
contributed I30,950 Million (~84%) to the consolidated revenues of FY 2022-23.
The US market led by new product introductions and solid base
performance, generated its highest-ever revenue of I18,447 Million (USD 232
Million) in FY 2022-23, ~58% growth y-o-y as against I11,650 Million (USD 157 Million)
reported in FY 2021-22.
Base business witnessed continued growth, as leading
products-maintained market share without experiencing significant pricing pressure.
Further, the portfolio acquired from Endo Inc. and manufactured at Chestnut Ridge facility
also contributed to the annual sales for FY 2022-23.
Company's reset strategy of concentrating on narrow niche products
with limited Indian competition has been reinforced during the year. Consequently, of the
~60 commercialised products, Strides was ranked first in 19 products and second or third
in 15 products. These products contributed to more than 75% of the total US
revenues.
With the base business tracking to plan and product launches on course,
Group has achieved pre-covid levels of revenue and profitability and remains optimistic
about its growth in the US.
Focus shall remain on fast-tracking launches from the approved basket
of ANDAs (280+ ANDAs with 260+ approvals), which comprises of acute and chronic products,
including domains of controlled substances, hormones and nasal sprays.
Other Regulated Markets (ORM) performed well throughout the year
and reported highest revenues of I12,503 Million (USD 157 Million) in FY 2022-23, a ~12%
growth y-o-y as against I11,180 Million (USD 150 Million) reported in FY 2021-22.
Front-End Markets in the United Kingdom and Nordics performed as
anticipated, and the B2B markets grew further due to renewed focus on partnered business
from the beginning of the year. Growth in this market was primarily driven by presence in
key markets and IP led B2B partnerships in Europe, Australia and other regions where
actions for expansion were already initiated.
Revenues from synergICE (Company's B2B platform for partnership
led growth) and the geographic expansion in Latin America, Middle East, North Africa and
Asia Pacific initiated at the beginning of FY 2022-23 contributed substantially to
revenue growth of the Company.
This business continues to have strong order book visibility with
growth trajectory continuing for ORM; and focus on R&D shall bolster the product
portfolio for additional growth impetus.
Emerging Markets
Emerging Markets business includes African operations (except South
Africa) and Institutional Business (i.e., Access Markets). This business contributed I
6,092 Million (~16%) to the consolidated revenues of FY 2022-23.
Branded Africa business maintained its growth trajectory and the
performance was bolstered by new product launches and enhanced efficiencies. Business
scale up shall continue to be driven by increased market share and broader portfolio in
key countries. Focus on efficiency and effectiveness of the field force shall also help to
improve operational leverage for this market.
As the new tender off-take for antiretrovirals began, Access Markets
returned to its growth in Q4 FY 2022-23. Given the nature of donor-funded purchases,
lumpiness in this business is expected to continue. However, long-term growth in
Institutional Business will continue to be driven by improved wallet share in the products
through cost leadership.
Outlook for FY 2023-24
With further resetting of the existing businesses and accomplishing all
the works that commenced at the beginning of the year, Company is building momentum for
its businesses in FY 2023-24.
Company is confident of increasing its EBITDA from current levels and
intends to achieve net debt to EBITDA ratio of less than 3x.
Key focus shall remain on manufacturing network optimisation, new
product launches and market expansion. Company shall also continue to work on various cost
improvement programs.
3) Dividend for FY 2022-23
Board of Directors of the Company are pleased to recommend for approval
of the Members, a Dividend of I1.50/- per equity share (i.e., 15%) of face value of I10/-
each for the financial year ended March 31, 2023.
In terms of Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Dividend
Distribution Policy is available on the Company's website.
Web link to access the same is provided in Corporate Governance Report
(Page 108), which forms part of this Annual Report.
4) Transfer to Reserves
Movement in Reserves and Surplus during the financial year ended March
31, 2023, is provided in the Statement of Changes in Equity included in the Consolidated
and Standalone Financial Statements (Refer Note no. 20 and 19, respectively).
5) Corporate Updates
During the year under review, your Company has initiated/ undertaken
the following key corporate updates:
(i) Issuance of Equity Warrants to a Promoter Group entity
Pursuant to approval accorded by Shareholders of the Company at the
Extraordinary General Meeting held on April 7, 2022, Company allotted 2 Million Equity
Warrants on April 26, 2022, on a preferential basis to M/s. Karuna Business Solutions LLP
(Karuna), a Promoter Group Company, at a price of I442/- per Equity Warrant.
The said allotment is in compliance with the provisions of the Act,
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and other applicable
regulations.
Karuna has a right to apply for and get allotted, within a period of 18
months from the date of allotment of Warrants, in one or more tranches, One Equity Share
of face value of I 10/- each for each Warrant held.
Subscription
Karuna has paid I110.50/- per warrant as initial subscription amount
i.e., 25% of the issue price aggregating to I 221 Million during April 2022. Balance 75%
of the Warrant price shall be payable by Karuna at the time of conversion into Equity
Shares.
Conversion
In September 2022, 452,490 Warrants of Karuna were converted into
Equity Shares. As at the date of this report, 1,547,510 Warrants are outstanding.
Utilisation
During FY 2022-23, Company raised ~I371 Million from issuance and
conversion of Warrants. The Company has fully utilised the amount towards capital
resources and operations.
In terms of Regulation 32 of SEBI Listing Regulations, there was no
deviation or variation in the use of proceeds raised through issue of Equity Warrants on a
preferential basis, from the object as stated in the explanatory statement to the Notice
of Extraordinary General Meeting held on April 7, 2022.
(ii) Raising of funds by way of issuance of Unlisted Non-Convertible
Debentures
During July 2022, in order to support working capital needs, Board of
Directors of the Company approved issuance and allotment of senior, secured, unrated,
unlisted, redeemable, non-convertible debentures (NCDs) of face value of I10,00,000 each
aggregating up to I150 Crores.
Out of the above, as at date of this report, Company has raised I125
Crores by way of issuance of NCDs.
(iii) Amalgamation of Vivimed Life Sciences Private Limited into the
Company
Board of Directors of the Company at their meeting held on February 10,
2022 had approved an updated Scheme of Amalgamation for merger of its wholly owned
subsidiary, Vivimed Life Sciences Private Limited (Vivimed) into the Company pursuant to
the provisions of Section 230 to 232 of the Act (Scheme).
Appointed Date for the said Scheme is April 1, 2022, or such
other date as the NCLT or such other competent authority may direct in relation to the
amalgamation of Vivimed with Strides.
The Scheme is subject to approval of the shareholders and creditors of
respective companies and approval of the Hon'ble National Company Law Tribunal,
Mumbai Bench and other statutory/ regulatory approvals, as may be required.
Company expects to initiate merger activities post completion of
certain outstanding matters at Vivimed during Q3 FY 2023-24.
(iv) Deconsolidation of Consumer Healthcare Business
During August 2022, in accordance with revised arrangement with the
other investor, the Group reduced its voting rights in Consumer Healthcare (CHC) Business
from 53.64% to 19%, and also ceded its Board representation at CHC.
Consequently, the Group no longer has any significant influence over
the CHC business and is retaining this as a treasury investment.
(v) Deconsolidation of Universal Corporation Limited, Kenya
As part of the In Africa for Africa' strategy, the Group had
acquired majority stake (i.e., 51%) in Universal Corporation Limited, Kenya (UCL) during
May 2016.
Based on the historical performance of UCL, UCL would have a favourable
opportunity to participate and win certain local tenders if it is a Kenyan Company i.e.,
Kenyan shareholders owning at-least 51% ownership in UCL.
In order to maximise opportunities for UCL, effective September 30,
2022, Group decided to reduce its equity shareholding below majority and also ceded
control over the Board of UCL in favour of other existing shareholders.
Pursuant to the above arrangement, UCL has become an Associate Company
of Strides effective September 30, 2022. As at date of this report, the Group holds
~48.98% stake in UCL.
(vi) Update on Stelis Biopharma Limited (Stelis)
Stelis is a biopharmaceutical company headquartered in Bengaluru and an
Associate Company of Strides.
As at date, Strides group has invested I6,329.69 Million into Stelis
and hold ~ 31.12% stake in the entity.
During FY 2022-23, Strides sought and received Shareholders'
approval for continuing its support in the form of Corporate Guarantee and/ or Security
for the proposed debt restructuring plan of Stelis for an amount not exceeding I7,000
Million.
Stelis is discussing with multiple potential lenders for its debt
restructuring.
Board of Directors of Stelis have also appointed international advisors
to evaluate several strategic options for Stelis. The exercise is nearing completion and
an update on the same will be provided in due course.
(vii) Reclassification of certain Promoters/ Promoter Group to Public
Shareholding category
During the year, few members of the Promoter/ Promoter Group (group)
were reclassified as Public Shareholders pursuant to approval accorded by the Stock
Exchanges (NSE & BSE) on February 22, 2023 and March 13, 2023. Shareholders'
approval for this matter was obtained by way of Postal Ballot on January 14, 2022.
Consequent to the above, Promoter/ Promoter Group stake in the Company
as at March 31, 2023 is at 28.27%.
6) Board of Directors and Key Managerial Personnel (KMP) of the
Company
Company is in compliance with the provisions of the Act and the SEBI
Listing Regulations with regard to the composition of the Board.
As at date of this Report, Strides' Board comprises of Six
Directors viz., Two Executive Directors and Four Independent Directors, details of which
are provided below:
# Name |
Designation |
Executive Directors |
|
1 Arun Kumar |
Executive Chairperson & Managing Director (KMP) |
2 Badree Komandur |
Executive Director Finance & Group CFO (KMP) |
Independent Directors |
|
3 S Sridhar |
Independent Director & Chairperson of Audit Committee |
4 Bharat Dhirajlal Shah |
Independent Director & Chairperson of Nomination &
Remuneration Committee and Stakeholders' Relationship Committee |
5 Homi Rustam Khusrokhan |
Independent Director & Chairperson of Risk Management
Committee |
6 Dr. Kausalya Santhanam |
Independent Director & Chairperson of CSR Committee |
Company Secretary |
|
7 Manjula Ramamurthy |
Company Secretary (KMP) |
Changes in Board of Directors & KMP of the Company during the year
and to the date of this report is as under:
(i) Change in Designation: Mr. Arun Kumar (DIN: 00084845),
Founder and Non-Executive Chairperson of the Board, was appointed as Executive Chairperson
& Managing Director of the Company effective April 7, 2022 for a period of three
years. Approval of Shareholders of the Company was received through Postal Ballot on July
6, 2022.
Mr. Arun Kumar is also one of the KMP of the Company effective April 7,
2022.
(ii) Re-appointment of Independent Director: Mr. Homi Rustam
Khusrokhan (DIN: 00005085) was re-appointed as an Independent Director of the Company
effective May 18, 2022 for a second term of five years. Approval of Shareholders of the
Company was received at the Extraordinary General Meeting held on April 7, 2022.
(iii) Resignation of Director: Mr. Deepak Calian Vaidya (DIN:
00337276) who was a Non-executive Director of the Company, resigned with effect from the
closing business hours of November 14, 2022 owing to his pre-occupation.
Board of Directors of the Company placed on record their appreciation
for Deepak for his significant contributions during his 25+ years association with Strides
and acknowledged that Strides had benefited immensely from his experience and guidance at
many junctures.
(iv) Retirement by rotation and re-appointment: In terms Section
152 of the Act, Mr. Badree Komandur (DIN: 07803242) Executive Director - Finance &
Group CFO, retired by rotation and being eligible was reappointed as Director of the
Company at the Annual General Meeting held on September 9, 2022.
(v) Re-appointment of Executive Director: Mr. Badree Komandur
(DIN: 07803242) was re-appointed as Whole-time Director designated as Executive
Director Finance & Group Chief Financial Officer of the Company effective May
18, 2023 for a third term of three years. Approval of Shareholders of the Company was
received through Postal Ballot on March 22, 2023.
Retirement by Rotation & Re-appointment at the ensuring AGM
In terms of Section 152 of the Act, proposal for re-appointment
of Mr. Arun Kumar, retiring director, as Director of the Company shall be placed before
Members of the Company at the ensuing AGM. Your directors recommend his re-appointment
on the Board of the Company.
A detailed profile of Mr. Arun Kumar as required under the Act, SEBI
Listing Regulations and Secretarial Standard on General Meetings issued by the Institute
of Company Secretaries of India is provided in the explanatory statement to the Notice
convening the 32nd AGM of the Company.
Board Committees
Board has constituted sub-committees to focus on specific areas and
make informed decisions within the authority delegated to each of the Committees. Each
Committee of the Board is guided by its Charter, which defines the scope, powers and
composition of the Committee.
Board has constituted the following Statutory Committees:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Stakeholders' Relationship Committee
4) Corporate Social Responsibility Committee &
5) Risk Management Committee
Details of meetings of Board and Board Committees held during FY
2022-23 along with information relating to attendance of each director/ committee member
is provided in the Corporate Governance Report, which forms part of this Annual Report.
7) Authorised Share Capital
Authorised Share Capital of the Company as at March 31, 2023 is
I1,883,700,000/- divided into 188,370,000 equity shares of I10 each.
Issued, Subscribed and Paid-up Share Capital
Date |
Number of Shares |
Amount |
Remarks |
April 1, 2022 |
89,790,214 equity shares of face value I10 each |
I897,902,140/- |
|
March 31, 2023 |
90,302,704 equity shares of face value of I10 each |
I903,027,040/- |
Includes 60,000 equity shares issued pursuant to exercise of
ESOPs during the year; and 452,490 equity shares issued pursuant to conversion of Warrants |
8) Subsidiary, Joint Ventures and Associate Companies
Details of Subsidiaries, Joint Venture and Associate entities as at
March 31, 2023 are provided herein below:
Nature of Relationship |
India |
Overseas |
Total |
Subsidiaries |
3 |
29 |
32 |
Joint Ventures |
- |
1 |
1 |
Associates |
3 |
5 |
8 |
Total |
6 |
35 |
41 |
List of Subsidiaries, Joint Venture and Associate entities which have
become or ceased to be part of the Group during the year is enclosed as Annexure-1
to this Report.
9) Accounts of Subsidiaries
In accordance with Section 129 (3) of the Act, the Company has prepared
a consolidated financial statement.
A statement containing salient features of the financial statements of
the Company's subsidiaries, joint ventures and associate companies as required in
Form AOC 1 is enclosed as Annexure-2 to this Report.
10) Corporate Governance Report
As per SEBI Listing Regulations, Corporate Governance Report along with
the Auditor's Certificate thereon for FY 2022-23 forms part of this Annual Report.
11) Management Discussion and Analysis Report
As per SEBI Listing Regulations, Management Discussion and Analysis
Report for FY 2022-23 forms part of this Annual Report.
12) Business Responsibility and Sustainability Report
As per SEBI Listing Regulations, Business Responsibility and
Sustainability Report of the Company for FY 2022-23 forms a part of this Annual Report.
13) Employee Stock Option Scheme
Company has one Stock Option Plan viz., Strides Employee Stock Option
Plan 2016 (ESOP Plan).
A statement giving detailed information on stock options granted to
Employees under the ESOP Plan as required under Section 62 of the Act, read with Rule 12
of Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 is enclosed as Annexure-3
to this Report and is also available at https://www.strides.com/investor-financial.html
14) Particulars of Employees
Statement containing particulars in terms of Section 197(12) of the
Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of this report and is appended herewith as Annexure-4
to this report.
As per the provisions of Section 197(12) of the Act read with Rule 5(2)
and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, a statement containing names of top ten employees in terms of remuneration drawn and
the particulars of employees is to be provided.
However, in terms of the first proviso to Section 136(1) of the
Act, Annual Report, excluding the aforesaid information, is being sent to Shareholders of
the Company and others entitled thereto.
The said information is available for inspection up to the date of
ensuing AGM. Any Shareholder interested in obtaining a copy thereof, may write to the
Company Secretary in this regard.
15) Corporate Social Responsibility (CSR)
Strides' CSR initiatives help address socio-economic
challenges in the realms of Health and Hygiene, Education, Employability and Disaster
Management.
Weblink to access the Strides' CSR Policy is provided in Corporate
Governance Report (Page 108), which forms part of this Annual Report.
A detailed report on the CSR activities undertaken during FY 2022-23 is
enclosed as Annexure-5 to this Report.
16) Loans, Guarantees or Investments
Details of Loans granted, Guarantees given and Investments made during
the year under review, covered under the provisions of Section 186 of the Act, are given
in Note no. 37 to the standalone financial statements in the Annual Report.
17) Contracts or Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company
during FY 2022-23 with related parties were in ordinary course of business and at
arm's length basis. Further, there are no materially significant related party
transactions made by the Company which may have potential conflict with the interests of
the Company.
Information on transactions with related parties pursuant to section
134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is
enclosed as Annexure-6 to this Report.
All transactions with related parties are disclosed in Note no. 42 to
the Standalone Financial Statements in the Annual Report.
Web link to access Strides' Policy for Governance of Related Party
Transactions is provided in Corporate Governance Report (Page 108), which forms part of
this Annual Report.
18) Auditors and Audit Reports
Secretarial Audit Report
M/s. Gopalakrishnaraj H H & Associates, Company Secretaries in
Practice (Certificate of Practice No: 4152) is the Secretarial Auditor for the Company.
Secretarial Audit for FY 2022-23, inter alia, included audit of
compliance with the Act and the Rules made thereunder, SEBI Listing Regulations and
applicable Regulations prescribed by SEBI, amongst others.
Secretarial Audit Report does not contain any qualifications,
observations or adverse remarks.
The said Report is enclosed as Annexure-7 to this report.
Statutory Auditors
M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration no.
101248W/ W-100022) were re-appointed as Statutory Auditors of the Company at the
AGM held on September 9, 2022 for the second term of five (5) years i.e., from the
conclusion of the 31st AGM till the conclusion of the 36th AGM of the Company to be held
in the year 2027.
Auditors' Report given by M/s. B S R & Co. LLP, Chartered
Accountants for the financial year ended March 31, 2023, is enclosed along with the
financial statements in the Annual Report.
Auditors' Report does not contain any qualifications, observations
or adverse remarks.
Internal Auditors
M/s. Grant Thornton Bharat LLP (formerly known as Grant Thornton India
LLP) (LLPIN: AAA-7677) are the Internal Auditors of the Company.
During the year under review, Internal Auditors were satisfied with the
management response on the observations and recommendations made by them during the course
of their audit.
Cost Auditors
Pursuant to Section 148(1) of the Act, Company is required to maintain
cost records and accordingly such accounts and records are made and maintained.
Pursuant to Section 148(3) of the Act and the Companies (Cost Records
and Audit) Rules, 2014, M/s. Rao, Murthy & Associates, Cost Accountants (Firm
Registration No.: 000065), were appointed as the Cost Auditors of the Company for FY
2022-23.
19) Internal Financial Controls
Company has in place adequate framework for Internal Financial Controls
as required under Section 134(5)(e) of the Act. During the year under review, such
controls were tested and no material weaknesses in their design or operations were
observed.
20) Risk Management
Company has a risk management framework for identification and
management of risks.
In line with the SEBI Listing Regulations, Company has constituted Risk
Management Committee (RMC) comprising of members of Board and Senior Management Personnel.
Terms of reference of the Committee and composition thereof including
details of meetings held during FY 2022-23 forms part of the Corporate Governance Report,
which forms part of this Annual Report.
Additional details relating to Risk Management is provided in the
Management Discussion and Analysis Report forming part of this Report.
21) Other Disclosures
a) Nature of Business of the Company
There has been no change in the nature of business of the Company
during the year under review.
b) Deposits Company has not accepted any deposits covered under
Chapter V of the Act. Accordingly, no disclosure or reporting is required in respect of
details relating to deposits.
c) Vigil Mechanism/ Whistle Blower policy
The Company has a robust vigil mechanism through its Whistle Blower
Policy approved and adopted by the Board of Directors of the Company, which is in
conformity with the provisions of the Act and SEBI Listing Regulations.
The said Policy provides appropriate avenues to the directors,
employees and stakeholders of the Company to make protected disclosures in relation to
matters concerning the Company.
The Policy aims to:
allow and encourage stakeholders to bring to the
management's notice concerns about unethical behaviour;
ensure timely and consistent organisational response;
build and strengthen a culture of transparency and trust; and
provide protection against victimisation. The said Policy also
establishes adequate mechanism to enable employees to report instances of leak or
suspected leak of unpublished price sensitive information.
Every director/ employee of the Company has been provided access to the
Audit Committee Chairperson/ Whistle Officer through email or correspondence address or by
calling designated toll-free number, should they desire to avail the vigil mechanism.
During the review period, none of the personnel of the Company has been denied access to
the Audit Committee.
Audit Committee of the Company oversees implementation of the Whistle
Blower Policy. During the year, Company has not received any protected disclosure.
Web link to access Strides' Whistle Blower Policy is provided in
Corporate Governance Report (Page 108), which forms part of this Annual Report.
d) Policy on Directors Appointment and Remuneration (Strides'
Nomination and Remuneration Policy)
Policy of the Company on Directors' appointment and remuneration,
including criteria for determining qualifications, positive attributes, independence of a
director and other matters, as required under Section 178 of the Act is available on the
Company's website.
Web link to access Strides' Whistle Blower Policy is provided in
Corporate Governance Report (Page 108), which forms part of this Annual Report.
e) Disclosure on compliance with Secretarial Standards
Company complies with all applicable mandatory secretarial standards
issued by the Institute of Company Secretaries of India.
f) Reporting of Fraud
No frauds were reported by Auditors of the Company as specified under
Section 143 of the Act for the Financial Year ended March 31, 2023.
g) Significant and material orders passed by Regulators or Courts
There were no significant and material orders passed by Regulators/
Courts that would impact the going concern status of the Company and its future
operations.
h) Annual Return of the Company
Pursuant to Section 92 of the Act and Rules made thereunder, Annual
Returns filed by the Company has been uploaded on the website of the Company and can be
accessed at https://www.strides.com/cg-annual-return. html
i) Conservation of Energy, R&D, Technology Absorption and Foreign
Exchange Earnings/ Outgo
Details of Energy Conversation, R&D, Technology Absorption and
Foreign Exchange Earnings/ Outgo is enclosed as Annexure-8 to this Report.
j) Policy on Prevention of Sexual Harassment at workplace
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on Prevention of Sexual Harassment in line with the requirements of
The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal)
Act, 2013 (PoSH Act) and Rules framed thereunder. Strides has adopted a gender-neutral
policy.
In terms of PoSH Act, Company has constituted Internal Complaints
Committee (ICC) to redress complaints received on sexual harassment. Adequate trainings
and awareness programmes against sexual harassment are conducted across the organisation.
Disclosure relating to PoSH complaint during the year is provided in
the Corporate Governance Report, which forms part of this Annual Report.
k) General a) During the year, the Company has not made any
application under the Insolvency and Bankruptcy Code, 2016. Further, there is no Corporate
Insolvency Resolution Process initiated under the IBC Code.
b) During the year, there was no onetime settlement done with the Banks
or Financial Institutions. Therefore, the requirement to disclose details of difference
between amount of valuation done at the time of one-time settlement and the valuation
done, while taking loan from Banks or Financial Institutions along with reasons thereof,
is not applicable.
22) Declaration by Independent Directors
In accordance with Section 149(7) of the Act and Regulation 25(8) of
the SEBI Listing Regulations, each Independent Director has confirmed to the Company that
they continue to meet the criteria of independence as laid down in Section 149(6) of the
Act and Regulation 16(1)(b) of SEBI Listing Regulations.
In opinion of the Board, Independent Directors of the Company possess
necessary expertise, integrity and experience in their respective fields.
Further, all Independent Directors have confirmed that they have
registered with the data bank of Independent Directors maintained by Indian Institute of
Corporate Affairs in accordance with the provisions of Section 150 of the Act.
23) Board Evaluation
Evaluation of all Directors, Committees, Chairperson of the Board, and
the Board as a whole was conducted for the year. Evaluation process has been explained in
the Corporate Governance Report, which is part of this Annual Report.
24) Material changes and commitments, if any
There were no material changes and commitments affecting the financial
position of the Company which occurred between the end of the Financial Year to which this
financial statement relates and the date of this report.
25) Directors' Responsibility Statement
Pursuant to the requirement under Section 134 (3)(c) of the Act
with respect to the Directors' Responsibility Statement, Board of Directors of your
Company state that:
(a) in preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures, if any;
(b) directors have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit and loss of the Company for that period;
(c) directors have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) directors have prepared annual accounts of the Company on a going
concern basis;
(e) directors have laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and are operating
effectively;
(f) directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
26) Acknowledgement
Your directors would like to take this opportunity to express their
sincere gratitude to all employees, customers and suppliers who have contributed to
Strides' success over the past years. Their hard work, dedication and support have
been instrumental in achieving our goals and driving our business forward.
We would also like to thank our shareholders for their continued trust
and investment in the Company.
We are committed to build strong relationships with all our
stakeholders, and we value their feedback and inputs as we strive to improve and grow our
business.
We look forward to your continued support in the years ahead.
|
For and on behalf of the Board of Directors |
|
Arun Kumar |
|
Executive Chairperson & |
Date: May 25, 2023 |
Managing Director |
Place: Bengaluru |
DIN: 00084845 |
|