Granules India Ltd Directors Report.

Dear Members,

The Board of Directors are pleased to present the Companys 30th Annual Report and the Companys audited financial statements (standalone and consolidated) for the financial year ended March 31, 2021.

• FINANCIAL RESULTS:

The Companys financial performance for the year ended March 31,2021 is summarized below:

(Rs. in lakhs)

Standalone

Consolidated

Particulars Year ended March 31, 2021 Year ended March 31, 2020 Year ended March 31, 2021 Year ended March 31, 2020
Revenue from Operations 3,13,498.24 2,30,992.83 3,23,754.28 2,59,864.65
Other Income 1,372.32 2,645.67 2,688.18 3,655.52
Total Income 3,14,870.56 2,33,638.50 3,26,442.46 2,63,520.17
EBITDA with Other Income 87,509.55 52,059.38 88,211.09 56,187.35
Less: Finance Costs 2,377.39 2,686.22 2,628.41 2,702.38
Less: Depreciation 11,845.14 10,182.44 15,146.25 13,695.35
Profit before exceptional item, tax, share of profit of joint venture and associate 73,287.02 39,190.73 70,436.43 39,789.62
Exceptional item - (16,111.87) - (2,773.90)
Profit before tax, share of profit of joint venture and associate 73,287.02 55,302.60 70,436.43 42,563.52
Share of profit in joint venture and associate, net of tax

-

2,549.09
Profit Before Tax 73,287.02 55,302.60 70,436.43 45,112.61
Less: Tax Expenses 18,008.71 10,895.70 15,490.53 11,572.78
Profit for the year 55,278.31 44,406.90 54,945.90 33,539.83
Add: Surplus Brought Forward from Previous Year
Surplus Available 85,110.24 43,768.43 83,190.09 52,715.35
Appropriations made to Surplus:
Dividends including dividend tax (2,474.77) (3,065.09) (2,474.77) (3,065.09)
Transfer to General Reserve - -
Balance carried to Balance Sheet 1,37,913.78 85,110.24 1,35,661.22 83,190.09
Basic Earnings per share 22.18 17.47 22.05 13.19
Diluted Earnings per share 22.09 17.41 21.95 13.15

Note: The above figures are extracted from the standalone and consolidated financial statements.

• OVERVIEW OF FINANCIAL AND BUSINESS OPERATIONS:

The Companys Standalone revenues from operations was Rs.3,13,498.24 lakhs for the FY 2020-21 as compared to Rs.2,30,992.83 lakhs for the previous year registering growth of 36%. The Company has made Net Profit of Rs.55,278.31 lakhs on standalone basis for the year under review as compared to Rs.44,406.90 lakhs for the previous year, an increase of 24%.

The primary growth driver in FY 2020-21 was led by change in product mix. On a standalone basis, the Finished Dosages (FD) business contributed the largest share of revenue of the Company at 50% while Pharmaceutical Finished Intermediates (PFI) and Active Pharmaceutical Ingredients (API) contributed 20% and 30% respectively while it was 35%, 17% and 48% for API, PFI and FD respectively for the FY 2019-20.

In the FY 2020-21, we have filed three ANDAs in USA, two Dossiers in Europe, three ANDS filings in Canada and one Dossier in South Africa. These filings reflect our strategy to expand our dossier filings to global markets apart from US. We have also filed five US DMFs, three CEP (Certificate of Suitability) with EDQM and one ASMF, which will be used for building future revenue from API business. The management believes that it will continue to strengthen its position through dedicated research and introduction of new products. During the year under review, we have also received six (6) ANDA approvals from USFDA, one approval in Europe and one approval in Canada for our Formulations business.

Vertical integration has always been the strength and focus area of the Company. It will continue its focus on its existing business and strengthen it by enhancing its capacities, improving operational efficiencies, adding new products, moving up in the value chain and most importantly offering better services to the customers. The Company will continue to solidify its business model and build systems that are sustainable as it continues to scale-up.

• EXPANSION PROGRAMS AND PROJECTS:

Establishment Inspection Report was received during the year under review from USFDA for the Gagillapur facility located in Hyderabad. As part of expansion program, capacity enhancement at our Gagillapur facility with Multiple Unit Pellet System (MUPS) facility is in the progress and it will be commercialized soon. Expansion of capacity for manufacturing multiple APIs at Unit -V, Visakhapatnam is also undertaken during the year under review.

• COVID-19:

Pharmaceutical industry was categorized under essential commodities and allowed to operate during the lockdown. The Company has taken the adequate steps about the health and safety of the employees and formed a separate COVID 19 task force team. The Company has also initiated measures like thermal screening, sanitation of buses and awareness campaigns have been conducted through videos. There is no significant impact on the operations of the Company during the year under review.

• DIVIDEND:

The Board of Directors has recommended a final dividend of 75 paisa per equity share (Face value Rs.1/- per equity share) for the FY 2020-21. This is in addition to the interim dividend of 75 paisa per equity share paid during the year. The total dividend for the FY 2020-21 aggregates to Rs.1.50/- per equity share as compared to Rs.1/- per equity share paid in the previous year.

The dividend pay-out is in accordance with the Companys Dividend Distribution Policy. The Dividend Distribution Policy of the Company may be accessed on the Companys website at: www.granulesindia.com

• MATERIAL CHANGES AFFECTING THE COMPANY:

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

• SHARE CAPITAL:

The Authorised Share Capital of the Company is 505,000,000 equity shares of Rs.1/- each. The Company had bought back 7,101,374 equity shares of Rs.1/- each during the financial year 2020-21. The Company also had allotted 528,608 equity shares of Rs.1/- each in trenches upon exercise of an equal number of stock options by the employees pursuant to the Employee Stock Option Scheme of the company.

In view of the above buyback and allotments, the outstanding shares of the company decreased from 254,247,562 equity shares of Rs.1/- each to 247,674,796 equity shares of Rs.1/- each during the financial year 2020-21.

• BUYBACK OF EQUITY SHARES OF THE COMPANY:

The Board of Directors of the Company, at their meeting held on January 21,2020 and the Shareholders of the Company vide the postal ballot, results of which were published on March 10, 2020, approved the buyback of up to 12,500,000 (One Crore Twenty-Five Lakh Only) fully paid up Equity Shares of the Company having face value of Rs.1 each (representing 4.92% of the total number of Fully paid up Equity Shares of the Company), at a price of Rs.200 (Rupees Two Hundred only) per Equity Share payable in cash for a total consideration not exceeding Rs.2,500,000,000 (Rupees Two Hundred and Fifty Crore only) through the "Tender Offer" route as prescribed under the SEBI Buyback Regulations, on a proportionate basis, from the equity shareholders/beneficial owners of the Equity Shares of the Company as on the Record Date.

The total number of Equity Shares bought back under the Buyback were 71,01,374 (Seventy One Lakhs One Thousand Three Hundred and Seventy Four) Equity Shares, at a price of Rs.200 (Rupees Two Hundred Only) per Equity Share. The total amount utilized in the Buyback was Rs.142,02,74,800/- (Rupees One Hundred and Forty Two Crores Two Lakhs Seventy Four Thousand and Eight Hundred Only) excluding Transaction Cost.

• TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF):

In terms of Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, unclaimed dividend amounting to Rs.3,25,830/-(three lakh twenty-five thousand eight hundred and thirty only) for the financial year 2012-13, was transferred during the year under review to the Investor Education and Protection Fund established by the Central Government.

• MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:

Managements Discussion and Analysis Report for the year under review, as stipulated under regulation 34(2) of the Listing Regulations, is presented in a separate section, forming part of the Annual Report.

• SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

SUBSIDIARY COMPANIES, THEIR PERFORMANCE AND DEVELOPMENTS

• Granules USA, Inc.

Granules USA, Inc., a wholly owned foreign subsidiary of your Company, caters to the requirements of customers in the U.S market. The Share Capital of the Company as on March 31, 2021 is Rs.116.31 lakhs. During the FY 2020-21, the Company achieved a turnover of Rs.51,588.69 lakhs against the turnover of Rs.34,008.04 lakhs for FY 2019-20 and the profit after tax is Rs.1,138.00 lakhs against Rs.565.04 lakhs for FY 2019-20.

• Granules Pharmaceuticals, Inc.

Granules Pharmaceuticals, Inc. (GPI), a wholly owned foreign subsidiary of your Company located in Virginia, USA focuses in formulation R&D. The Share Capital of the Company as on March 31, 2021 is Rs.56,453.66 lakhs. During the FY 2020-21, the Company achieved a turnover of Rs.50,508.57 lakhs against the turnover of Rs.29,608.33 lakhs for FY 2019-20 and the profit after tax is Rs.6,077.84 lakhs against Rs.(808.39) lakhs for FY 2019-20.

During the year FY 2020-21, GPI received seven (7) approvals from US FDA for the ANDAs that were filed from this facility. Additionally, two (2) new ANDAs were filed requesting approval during the year. During the year under review, GPI launched ten (10) new products under its own label.

• Granules Europe Limited

Granules Europe Limited is a wholly owned foreign subsidiary set up in UK for focusing on marketing to European customers.

• Granules Life Sciences Private Limited

With increasing Business Requirements, during the period under review, the Company incorporated a new wholly owned subsidiary in India "Granules Life Sciences Private Limited" with paid-up Capital amounted to Rs.25 Crores.

The Policy for determining material subsidiaries as approved by the Board may be accessed on the Companys website at: www.granulesindia.com

JOINT VENTURE /ASSOCIATE COMPANIES

During the year under review, Granules OmniChem Private Limited, an Indian Joint Venture Company ceased to be Joint Venture of Granules India Limited.

No other Company has become or ceased to be Companys subsidiaries, joint ventures or associate companies.

As per the provisions of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and it forms part of the consolidated financial statements.

• CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements, in terms of Section 129(3) of the Companies Act, 2013 and regulation 34 of the Listing Regulations and prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended thereof forms a part of this annual report. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries, joint venture and associate companies, as approved by their respective Boards. As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its Subsidiaries on its website www.granulesindia.com and copy of separate audited accounts of its Subsidiaries will be provided to the members at their request.

• COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.

• DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) 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 a true and fair view of the state of affairs of the Company as at March 31,2021 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the 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) the Directors have prepared the annual accounts on a going concern basis for the financial year ended March 31,2021;

e) the 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; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

• CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

• BUSINESS RESPONSIBILITY REPORT:

Business Responsibility Report for the year under review, as stipulated under regulation 34(2) of the Listing Regulations, is presented in a separate section, forming part of the Annual Report.

• CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and are on an arms length basis. During the year, except with the wholly owned subsidiary, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at: www.granulesindia.com.

The particulars of contracts or arrangements with related parties referred to in section 188(1) are prepared in Form No. 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 and the same is enclosed as Annexure IV to the Boards report.

• CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Composition of the CSR Committee is provided below.

Name Category
Mrs. Uma Devi Chigurupati, Chairperson Non-Independent, Executive
Mr. Krishna Prasad Chigurupat Non-Independent, Executive
Mr. A. Arun Rao Independent, Non-Executive

The CSR Policy may be accessed on the Companys website at: www.granulesindia.com

The Company is undertaking CSR initiatives in compliance with Schedule VII to the Act. During the year under review, the Company has spent Rs.561.79 lakhs on CSR activities.

During the year under review, the Company had spent Rs.3,70,93,780 /- in the form of ex-gratia to the temporary/ casual/daily wage workers of the Company to support them during the unprecedented global pandemic of Covid-19. Explicit declaration in this regard was given by the Board of Directors of the Company and it was duly certified by the statutory auditors of the Company. Hence, the amount of Rs.3,70,93,780 /-was considered under CSR spent for the financial year 2020-21 in terms of the General Circular No.15/2020 dated April 10, 2020 issued by Ministry of Corporate Affairs.

The annual report on CSR activities is annexed herewith marked as Annexure I to the Boards report.

• NOMINATION AND REMUNERATION COMMITTEE:

The Companys Nomination and Remuneration Committee consists of majority of Non-Executive Directors, two of them are Independent, which ensures transparency in determining the remuneration of Directors, KMPs and other employees of the Company. The Chairman of the Committee is an Independent Director, thereby resulting in independent and unbiased decisions.

During the financial year 2020-21, the composition of Nomination and Remuneration Committee is provided below.

Name Category
Mr. Arun Sawhney, Chairman Independent, Non-Executive
Mrs. Jyothi Prasad Independent, Non-Executive
Mr. K.B. Sankar Rao Non-Independent, Non-Executive
Mr. Krishna Prasad Chigurupati Non-Independent, Executive

The Performance Evaluation and Remuneration Policy framed by the Committee and approved by the Board is directed towards rewarding performance of Executive and Non-Executive Directors, Key Managerial Personnel and Senior Management Personnel of the Company based on review of achievements periodically.

• RISK MANAGEMENT:

Risk Management Committee has been entrusted with the responsibility to assist the Board in (a) overseeing and approving the Companys enterprise wide risk management framework; and (b) overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. Your Company has proper process for risk management.

• INTERNAL FINANCIAL CONTROLS:

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes. Assurance on the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

• INTERNAL AUDIT & CONTROLS:

Your Company continues to engage M/s Dhanunjaya & Haranath, Chartered Accountants as its Internal Auditors.

During the year, your Company continued to implement their suggestions and recommendations to improve the internal controls. Their scope of work includes review of operational efficiency, effectiveness of systems & processes, compliances and assessing the internal control strengths in all areas. Internal Auditors findings are discussed and suitable corrective actions are taken as per the directions of the Audit Committee on an on-going basis to improve efficiency in operations.

The Companys internal control systems are well established and commensurate with the nature of its business and the size and complexity of its operations. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations. The recommendations / suggestions of the internal auditors are discussed in the Audit Committee meetings.

• DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Harsha Chigurupati, Executive Director of the Company, retires by rotation at the 30th Annual General Meeting and being eligible offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under the Companies Act and the Listing Regulations.

The Board of Directors has complete access to the information within the Company. Independent Directors have the freedom to interact with the Companys management. Interactions happen during Board / Committee meetings, when executives of the Company are asked to make presentations about performance of the Company. Apart from this, they also have independent interactions with the Statutory Auditors, the Internal Auditors and external advisors appointed from time to time. Further, they meet without the presence of any management personnel and their meetings are conducted informally to enable the Independent Directors to discuss matters pertaining to the Companys affairs and put forth their combined views to the Board of Directors of the Company.

Mr. Krishna Prasad Chigurupati, Chairman and Managing Director, Mrs. Uma Devi Chigurupati, Executive Director, Mr. Harsha Chigurupati, Executive Director, Mr. Sandip Neogi, Chief Financial Officer and Ms. Chaitanya Tummala, Company Secretary are Key Managerial Personnel of the Company during the year under review.

• BOARD EVALUATION:

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the Non-Executive Directors and Executive Directors. Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for annual evaluation of the performance of the Board, its Committees and individual Directors was carried out in accordance with the policies in force.

• EMPLOYEE STOCK OPTION SCHEME:

The Companys Employees Stock Option Scheme viz. ESOS-2009 has been in place since year 2009-10 and the Company has made grants under ESOS-2009 to the eligible employees of the Company and its subsidiaries. Further grant cannot be made from ESOS-2009 since the tenure of the Scheme was completed during the year under review. However, the employees who were already granted stock options under ESOS-2009 i.e., outstanding stock options as on date can exercise their option to convert into equal number of equity shares.

The Company, during the financial year 2017-18 obtained approval of the members for Employee Stock Option Scheme 2017 (ESOS-2017) and has made grant under ESOS-2017 to the eligible employees of the Company during the year under review.

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees Stock Option Scheme. There has not been any material change in the Employee Stock Option Schemes during the current financial year. The Schemes and its implementation are in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations") as amended thereof.

The applicable disclosures as stipulated under the SEBI Guidelines as on March 31,2021 (cumulative position) with regard to the Employees Stock Option Scheme are herein under provided. The issue of equity shares pursuant to exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

Pursuant to regulation 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, certificate from M/s. B S R & Associates, LLP. , Statutory Auditors is given as Annexure II to the Boards report. Voting rights on the shares issued to employees under the Employee Stock Option Scheme are either exercised by them directly or through their appointed proxy.

The details of the stock options granted / vested / exercised under the Granules India Limited - Employee Stock Option Scheme 2009 approved by the members in 18th Annual General Meeting and Granules India Limited - Employee Stock Option Scheme 2017 approved by the members in 26th Annual General Meeting, are given below:

Sl.

Details of Scheme

No. ESOS-2009 ESOS-2017
(a) Options granted till date un der the scheme 15,602,800 2,50,000
(b) Pricing formula

Closing market price as on the date prior to the grant date on National Stock Exchange (where there was highest trading volume).

(c) Options vested during the year 4,38,640 NIL
(d) Options exercised during the year 5,28,608 NA
(e) Total number of shares arising as a result of exercise of options 5,28,608 NA
(f) Options lapsed/surrendered during the year 2,80,032 NIL
(g) Options lapsed/surrendered till date under the scheme 87,09,632 NA
(h) Variation in terms of options NIL NIL
(i) Money realized by exercise of options during the year 4,14,49,976 NA
(j) Total number of options in force 68,93,168 2,50,000
(k) Employee wise details of options granted during the year to be exercised at H 97/- H 353/-
(k)(i) Senior managerial personnel NIL 1,00,000
Name of Employee Designation No. of options
Mr. Sandip Neogi CFO 1,00,000
(k)(ii) Any other employee who receives a grant in any one year of options amounting to 5% or more of options granted during the year. NIL 1,50,000
Name of Employee Designation No. of options
Mr. G N Prashanth Sr. Vice President 1,00,000
Mr. Abhinay Kesanapalli AGM 50,000
(k)(iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. Not Applicable
(l) Diluted Earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standards - Earning per share. Rs. 22.09 per share
(m) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost that shall have been recognized if it had used the fair value of the options. Not Applicable
(n) Weighted-average exercise price, whose exercise price either equals or exceeds or is less than the market price of the stock Rs.78.41/- per share NA
(o) Description of the method and significant assumptions used during the year to estimate the fair values of options. The assumptions and model used for estimating fair value are disclosed in Note 27 of Standalone financial statements.

• AUDITORS & THEIR REPORT:

Statutory Auditors

M/s. B.S.R. & Associates LLP, Firm of Chartered Accountants, Hyderabad was appointed as Auditors of the Company, for a term of 5 (five) consecutive years, at the 26th Annual General Meeting held on September 28, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

The Board has appointed M/s. Saurabh Poddar & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2020-2021 The Secretarial Audit Report for the financial year ended March 31,2021 is annexed herewith marked as Annexure III to the Boards Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

• DISCLOSURES:

Meetings of the Board

Six meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

Audit Committee

The Audit Committee comprises majority of Independent Directors namely Mrs. Jyothi Prasad (Chairperson), Mr. A. Arun Rao, Mr. Arun Sawhney and Mr. Krishna Prasad Chigurupati as other members. During the year all the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has a Vigil mechanism and a Whistle - blower policy in accordance with provisions of the Act and Listing Regulations, under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Protected disclosures can be made by a whistle blower through a dedicated e-mail, or a letter to the Chairperson of the Audit Committee.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at: www.granulesindia.com

Code of Conduct

A declaration regarding compliance with the code of conduct signed by the Companys Chairman and Managing Director is published in the Corporate Governance Report which forms part of the annual report.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities provided are provided in the standalone financial statement (Please refer to Note No.4A, 4B and 26(b) to the standalone financial statement).

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to the Boards Report.

Extract of Annual Return

The Extract of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 is annexed as Annexure VI to this report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended thereof, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this Report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members

of the Company. The said information is available for inspection on all working days, during business hours, at the registered office of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. This information may be accessed on the Companys website at: www.granulesindia.com

Your Directors further state that, the remuneration paid to the Key managerial Personnel and others is as per the Remuneration Policy of the Company.

Remuneration from Subsidiaries

During the year under review, none of the Managing or Whole-time Director of the Company had received remuneration from wholly owned subsidiaries of the Company.

Maintenance of Cost Records specified by the Central Government under Section 148 of the Companies Act, 2013

The Company has complied with the provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 during the year under review.

Policy on Sexual Harassment and Constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has a Policy on "Prevention of Sexual Harassment of Women at Workplace" for the matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" and constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not received any complaints pertaining to Sexual Harassment.

The Company regularly conducts awareness programs for its employees.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employee Stock Option Scheme referred to in this Report.

• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• Cost Audit is not applicable for the financial year 2020-21.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• ACKNOWLEDGEMENTS:

We express our sincere appreciation and thank our valued Shareholders, Customers, Bankers, Business Partners/ Associates, Financial Institutions, Insurance Companies and Central and State Government Departments for their continued support and encouragement to the Company.

We are pleased to record our appreciation to the sincere and dedicated services of the employees and workmen at all levels.

On behalf of the Board of Directors
Krishna Prasad Chigurupati
Chairman and Managing Director
Hyderabad, May 11, 2021 DIN: 00020180