ind swift laboratories ltd share price Directors report


Dear Shareowners,

Your Directors have great pleasure in presenting the 28th Annual Report together with audited statement of accounts for the year ended 31st March, 2023.

FINANCIAL RESULTS

The Audited Financial Statements of your Company as on 31st March, 2023 are prepared in accordance with the relevant applicable IND AS and Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the provisions of the Companies Act, 2013 ("Act").

The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31,2023. The Notes to the Financial Statements adequately cover the Audited Statements and form an integral part of this report. The summarized financial highlights for the financial year2022-23 are depicted below:

(Rs in Millions)

Standalone Consolidated
PARTICULARS Year Ending 31st March 2023 Year Ending 31st March 2022 Year Ending 31st March 2023 Year Ending 31st March 2022
Sales (net of excise) and other income 11,852.39 10,305.87 12,408.10 10,822.29
Less Expenses:
Cost of Materials Consumed 6,187.20 5,365.67 6,574.63 5,758.40
Purchase of Stock in Trade 104.63 10.56 104.63 10.56
Change in Inventories of FG/WIP/Stock in trade (123.42) (394.66) (123.42) (394.67)
Employee Benefit Expense 1,326.97 1,246.17 1,358.39 1,270.92
Other Expenses 1,803.27 1,716.12 1,866.89 178.59
Total Expenses 9,298.65 7,943.85 9,781.11 8,431.13
Profit before Interest, Depreciation, Tax & Amortisation 2,553.74 2,362.02 2,626.98 2,391.16
Less: - Interest 921.66 955.45 921.66 955.46
- Depreciation 573.62 1,309.70 573.62 1,310.39
- Extra Ordinary Item 266.48 16.92 266.48
Profit/(Loss) before Tax 791.98 79.96 865.21 125.32
Less: - Provision for Deferred Tax 233.62 (109.17) 233.62 (109.17)
- Income tax adjustment of previous year 2.16 7.83 2.16 7.83
- Current Tax /MAT credit utilisation 131.48 238.39 151.13 248.15
Profit/(Loss) After Tax (A) 424.72 (57.09) 478.30 (21.49)
Amount B/F from previous year (B) (801.59) (744.50) (780.51) (773.65)
Profit/ (Loss) after tax available for appropriations 424.72 (57.09) 478.30 (6.85)
Pursuant to sale of controlling interest 11.23 0.00
Share of profit (loss) in joint venture (2.34) 0.00
Balance of Retained Earnings (376.87) (801.59) (293.31) (780.51)

Notes:

1. There are no material changes or commitments affecting the financial position of your Company which have occurred between the end of the financial year and the date of this report.

2. Further, there has been no change in the nature of business of your Company.

OPERATIONS AND BUSINESS PERFORMANCE

During the financial year 2022-23, your Company has achieved a turnover of H11852.39 million against the turnover of H10305.87 million during the financial year 2021-22. The Company has achieved Net profit of H424.72 million in 2022-23 against Net loss of H57.09 million in 2021-22. The Companys exports have increased to H8859.28 million in 2022-23 as compared to H7454.00 million in 2021-22. There has been no change in the nature of business of the Company during the year under review. Kindly also refer to the Management Discussion & Analysis Report & Corporate Governance Report which forms part of this report and gives a detailed account of the activities carried out during the year under review.

CONSOLIDATED FINANCIAL PERFORMANCE

Your company recorded a consolidated turnover of H12408.10 million during 2022-23 against the turnover of H10822.29.42 million during 2021-22. In consolidated terms, the Company earned a Net profit of H478.30 million during 2022-23, against profit of H115.17 million in 2021-22. The Consolidated financial figures include the respective financial figures of the companys subsidiaries & joint ventures. As required under the provisions of the Companies Act 2013 and SEBI (LODR) Regulations, 2015, Audited Consolidated Financial Statements form part of the Annual Report and the same are annexed to this Report.

STATE OF AFFAIRS OF THE COMPANY

The state of affairs of the Company is presented as part of the Management Discussion & Analysis Report in a separate section forming part of this report, as required under the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

OUTLOOK

The main business of your Company is manufacturing Pharmaceutical Products especially Active Pharmaceutical Ingredients (APIs) & Advanced Intermediates. We are presently in both the domestic and export market. In view of the scenario described in the management discussions & analysis report your Company is expected to grow with a wide range of products and manufacturing expertise barring unforeseen circumstances.

COMMITTEES OF THE BOARD

The Companys Board has constituted the following Committees prescribed under the Companies Act and the LODR Regulations, 2015: -

1. Audit Committee

2. Stakeholders Relationship Committee

3. Risk Management Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

6. Compensation Committee

7. Sub-Committee of the Board

The details of the Composition of the Committees, their role and terms of reference are given in the Corporate Governance report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

a) Board of Directors

As on 31st March, 2023, your Companys Board had 8 (eight) members comprising of 4 (Four) Executive Directors and 4 (Four) Non-Executive-Independent Directors including one Independent Woman Director. The details of the Board and committee composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.

b) Key Managerial Personnel

The Company has adequate Key Managerial Personnels as per requirements of section 203 of the Companies Act, 2013 as well as the SEBI (LODR) Regulations, 2015 viz are:

a) Mr. Navrattan Munjal: Chairman & Managing Director,

b) Mr. Himanshu Jain: Joint Managing Director,

c) Mr. Rishav Mehta: Executive Director,

d) Mr. Sahil Munjal: Executive Director,

e) Mr. Gagan Aggarwal: Chief Financial Officer,

f) Mr. Sunil Deshmukh: Chief Executive Officer and

g) Mr. Lovekesh Mahajan, Chief Accounts Officer

h) Mr. Pardeep Verma: VP-Corporate Affairs & Company Secretary.

There has been no change in the key managerial personnel during the year under review.

c) Declaration for Independency of Independent Directors:

Your Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as an Independent Director. Further, in the opinion of the Board, the Independent Directors also possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8 (5) (iiia) of the Companies (Accounts) Rules, 2014. The Company has also received from them declaration of compliance of Rule 6(1) & (2) that they have registered themselves with databank of Independent Directors as maintained by Indian Institute of Corporate Affairs.

d) Directors liable to retire by rotation and Directors seeking re-appointment:

In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and the Articles of Association of your Company, Sh. Himanshu Jain, Joint Managing Director (DIN: 00014533) is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for re-appointment. The Board recommends his re-appointment for your approval. Brief details of Directors proposed to be appointed/re-appointed, as required under Regulation 36 of the SEBI Listing Regulations, are provided in the Notice of the ensuing AGM.

Further, the first tenure of Mrs. Neerja Chathley (DIN: 08448077) Independent Director of 5 years will be completed on 9th May, 2024 therefore, the Board upon the recommendation of the Nomination and Remuneration Committee proposes her re-appointment for the second term of 5 (Five) years w.e.f. 10th May, 2024. Your Board recommends passing a special resolution as per the Companies Act, 2013 & SEBI (LODR) Regulation, 2015 as set out in notice of the AGM.

Details and brief resume of the Directors seeking reappointment/appointments required by Regulation 26 (4) and 36 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and as required under Secretarial Standards - 2 on General Meetings issued by "The Institute of Company Secretaries of India" are furnished in the Notice convening the Annual General Meeting forming part of the Annual Report.

e) Non-Executive Director (Independent Director) seeking ratification of appointment on attaining the age of 75 years during the term of his original appointment:

As per Regulation 17(1A) of SEBI (LODR) Regulation, 2015 in case of listed entities, the Company should not appoint or continue the appointment of any person as a Non-Executive Director (NED) who has attained the age of 75 years unless Special Resolution is passed, to that effect. Mr. Ashwani Kumar Vig (DIN: 07080817), Non-Executive Independent Director shall attain the age of 75 years on 5th October, 2023, during his term which is up to 12th February, 2025. In view thereof, the Board and Nomination and Remuneration Committee has considered and recommended ratifying his appointment for the remaining period of his term, to be eligible to continue as the Non-Executive Director upon attaining age of 75 years. Therefore, your Board of Directors recommends passing of necessary special resolution to that effect as set out in the notice of the AGM.

f) Relationship/Transaction of Non-Executive Directors with the Company

The Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than taking sitting fees and reimbursement of expenses incurred by them to attend meetings of the Company.

g) Number of Meetings of the Board

During the year, Six Board meetings were held on 28/05/2022, 10/08/2022, 27/09/2022, 08/11/2022, 14/02/2023 & 30/03/2023. The details regarding the meetings are given in the Corporate Governance Report.

h) Performance evaluation of the Board, its Committees and Individual Directors

Pursuant to applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations 2015, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors.

The Independent Directors had met separately without the presence of Non-Independent Directors & the members of management and discussed, inter-alia, the performance of non- Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried out an evaluation of every Directors performance. The performance evaluation of all the Independent Directors has been done by the entire Board, excluding the Director being evaluated. Based on the performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.

i) Familiarization Program

The details of program for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model and related matters are posted on the website of the Company at https://www.indswiftlabs. com/wp-content/uploads/2022/08/Familiarisation_Programme_for_Independent_Directors.pdf

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended March 31, 2023; the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2023 and of the profit of the Company for the year ended on that date;

c) that 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) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

INTERNAL FINANCIAL CONTROL

Your Company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with new/ revised standard operating procedures. The Companys internal control system commensurate with the size, scale and complexity of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides bench marking controls with best practices in the industry.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee, Board of Directors, Statutory Auditors, and the Business heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In compliance with the provisions of Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (LODR) Regulations, 2015, your Company has in place a Vigil Mechanism (Whistle blower Policy) which provides an opportunity to the directors and employees to raise concerns about unethical and improper practices or any other wrongful conduct in or in relation to the Company. The details of the Vigil Mechanism (Whistle blower Policy) are stated in the Corporate Governance Report and the said Policy has been uploaded on the Companys website https:// www.indswiftlabs.com/wp-content/uploads/2018/07/Whistle_ Blower_Policy.pdf

SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES

As on 31.03.2023, your Company had 3 Subsidiaries and a Joint Venture i.e., Ind-Swift Laboratories Inc. (US Subsidiary), Fortune (India) Constructions Limited (Indian Subsidiary), MJM Remedies Private Limited (Indian Subsidiary-Joint Venture) and Indis Healthcare LLP (Indian JV).

There has been no change in the nature of business of these subsidiaries and joint ventures. Your Company does not have any material subsidiaries pursuant to the provisions of Regulation 16(1) (c) of the SEBI Listing Regulations.

The Annual Financial Statements and related detailed information about the subsidiary companies shall be made available to the shareholders seeking such information on all working days during business hours. The financial statements of the subsidiary companies shall also be kept for inspection by any shareholders during the working hours at your Companys registered office and those of the respective subsidiary companies concerned. In accordance with the provisions of Section 136 of the Act, the audited financial statements, including consolidated financial statements and related information of your Company and audited accounts of each of its subsidiaries, are available on website of your Company https://www.indswiftlabs.com/investor/ financial-statements-of-subsidiaries/

A summary of the financial performance of each of the subsidiaries is presented as below:

- The US subsidiary of the Company viz. Ind-Swift Laboratories Inc. achieved net sales of H1,80,87,09,539 equivalent to USD 2,28,04,034 and recorded a net Profit of H5,96,81,847 equivalent to USD 7,41,597 as on 31.03.2023.

- Fortune (India) Constructions Limited achieved total revenue of H3,92,19,748 and recorded a net loss of H78,25,904 as on 31.03.2023.

- The Companys Subsidiary-Joint Venture MJM Remedies Private Limited did not start any operation till 31st March, 2023.

- The Companys Joint Venture M/s. Indis Healthcare LLP achieved total revenue of H10,16,85,690 and recorded a net loss of H46,45,164 as on 31.03.2023.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of each subsidiary and a joint venture is given in Form AOC - 1 as Annexure-I to this report. The Company has framed a policy for determining material subsidiaries, which has been uploaded on the Companys website www.indswiftlabs.com.

NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES, OR ASSOCIATES.

During the Year, Halcyon Life Sciences Private Limited ceased to be the wholly owned subsidiary of the Company with effect from 30th March, 2023, consequent to its sale to M/s. RN Chemicals & Pharmaceutical Private Limited.

DIVIDEND

To conserve resources, your directors do not recommend any dividend for the Financial Year 2022-23 (Previous Year 2021-22: Nil) and propose to retain the profits for the future requirements of the Company.

There is no unpaid dividend outstanding as on 31.03.2023.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, your Board has approved and adopted a Dividend Distribution Policy of the Company. The policy is available on the Companys website under weblink:

https://www.indswiftlabs.com/wp-content/uploads/2021/08/DividendDIstributionPolicy.pdf

RESERVES

During the year, the Company has not transferred any amount to Reserves.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (The Rules), all unpaid or unclaimed dividends are transferred to Investor Education and Protection Fund (IEPF) established by the Central Government, after the completion of seven years. Further, according to the rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority.

During the year under review, your Company was not required to transfer any funds/shares to Investor Education and Protection Funds (IEPF).

PUBLIC DEPOSITS

The Company has completed the re-payment of its Fixed Deposits in compliance with the re-payment scheme approved by the Honble Company Law Board vide its order dated 30th March, 2013. A few of the fixed deposits, however, remained unclaimed as at the end of the Financial Year. The Company shall repay those claims as and when the respective Deposit Holder approaches the Company. During the year the company has made repayment of fixed deposits amounting to H14,88,250/-.

During the year under review, your Company has not accepted any fresh deposits from the public under Section 73 and 76 of the Act read with rules made thereunder.

RELATED PARTY TRANSACTIONS DISCLOSURE UNDER THE COMPANIES ACT, 2013

All the transactions with related parties are placed before the Audit Committee for its approval. An omnibus approval from the Audit Committee is obtained for the related party transactions which are repetitive in nature.

All related party transactions entered into during the financial year were on an arms length basis and in the ordinary course of business. No related party transaction conflicted with the interest of the Company. No materially significant related party transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC-2, as "Annexure-II" to this Report. The policy on Related Party Transactions as approved by the Board has been uploaded on the Companys website www.indswiftlabs.com.

RELATED PARTY TRANSACTIONS DISCLOSURE UNDER SEBI (LODR) REGULATIONS, 2015

The necessary Related Party Disclosures as required under Schedule V, Part - A of SEBI (LODR) Regulations, 2015 are given in Note XXX of the Standalone and Consolidated Financial Statements.

Further, Your Company has obtained prior approval of shareholders for material transactions with its related parties as per Regulation 23 in the 27th Annual General Meeting held on 30th September, 2022.

DISCLOSURE OF TRANSACTIONS WITH PROMOTER/ PROMOTER GROUP

As per Schedule V of the SEBI LODR Regulations, 2015 every listed Company shall disclose the transactions with any person or entity belonging to the promoter/promoter group which holds 10% or more shareholding in the listed entity.

As on 31st March 2023, M/s Essix Biosciences Limited and M/s Ind Swift Limited, being the Promoter entities, are holding 21.71% and 16.08 % respectively, of total equity of the Company. The details of all the transactions with Essix Biosciences Limited and Ind Swift Limited are already given in Form AOC-2, forming part of this Annual Report.

DISCLOSURE IN RESPECT OF VOTING RIGHTS NOT EXERCISED DIRECTLY BY EMPLOYEES

No disclosure is required under Section 67(3) (C) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.

RISK MANAGEMENT

Evaluation of business risks and managing those risks has always been an ongoing process in the Company. The terms of reference of the Risk Management Committee are in line with the Listing Regulations. The Committee assists the Board in fulfilling its corporate governance duties by overseeing the responsibilities regarding the implementation of Risk Management Systems and Framework, review the Companys financial and risk management policies, assess risk and procedures to minimise the same.

The details of the Committee and its terms of reference are set out in the Corporate Governance Report.

During the Financial Year 2022-23, two Risk Management Committee Meeting were held on 15.09.2022 and 04.03.2023.

The Companys Risk Management Policy is available on Companys Website i.e. www.indswiftlabs.com and the weblink of the same is https://www.indswiftlabs.com/wp-content/uploads/2018/07/Risk ManagementPolicy.pdf

Business Responsibility and Sustainability Report (BRSR)

In terms of Regulation 34 of the Listing Regulations, the company does not fall in the category of top 1000 companies based on market capitalization as on 31st march, 2023. Hence the requirement to provide the Business Responsibility and Sustainability Report is not applicable on the company.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

The paid-up Equity Share Capital of the Company as on March 31, 2023 was H59,08,68,600. The Companys shares are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited and are actively traded. The Company has not issued any shares with differential voting rights or sweat Equity during the year. During the year, the company has not made any allotment.

a) Employee Stock Option Scheme

During the financial year 2022-23, there has been no change in the Employees Stock Option Plan (Employee Incentive Scheme, 2014) of the Company. Further, it is confirmed that the ESOP Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.

During the financial there has been no material changes in the scheme and options movement during 2022-23 and during last three financial years is NIL. In addition, The Company has not granted any Employee Stock Option to its Non-Executive Directors under the said plan. Hence disclosure of the same is not applicable.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Pursuant to the provisions of Section 134(3)(g) of the Companies Act, 2013 (Act), particulars of loans/ guarantees/ investments/ securities given under Section 186 of the Act are given in the related notes to the Financial Statements forming part of the Annual Report.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3) (a) of the Act, the draft annual return as on 31st March, 2023 prepared in accordance with the provisions of Section 92(3) of the Act is made available on the website of your Company and can be assessed using the link https://www.indswiftlabs.com/investor/annual-returns/

The weblink to access Annual Return for previous financial year 2021-22 of the Company is https://www.indswiftlabs.com/ wp-content/uploads/2023/03/Form MGT-7 31032022.pdf.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has a policy on Directors Appointment & Remuneration. In compliance with the provisions of Sections 134(3)(e) and 178 of the Companies Act, 2013 and Regulation 19 read with Part D of Schedule II of the SEBI (LODR) Regulations, 2015, the Nomination & Remuneration Committee:

i) has formulated criteria for determining qualifications, positive attributes and independence of a director and recommends to the Board, Policy relating to remuneration for directors, KMP and other employees;

ii) has formulated the evaluation criteria for performance evaluation of independent directors and the Board;

iii) has devised a policy on Board diversity;

iv) identifies persons who are qualified to become directors or may be appointed in Senior Management in accordance with criteria laid down and recommend to the Board their appointment and removal;

v) recommends to the Board whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

The said policy is available on the website of the company at https://www.indswiftlabs.com/wp-content/uploads/2023/04/Nomination_Remuneration_Policy.pdf

CREDIT RATING

During the Financial Year, 2022-23, the credit rating of the Company was revised from CARE B to CARE BB- (Double B Minus) by CARE which denotes-Stable Ranking.

CORPORATE SOCIAL RESPONSIBILITY

The company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Companys vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

During the year under review, the company incurred expenditure on CSR activities of H31.80 Lakhs in areas specified in Schedule VII of Companies Act, 2013.

The disclosure related to the CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as "Annexure-III".

ENVIRONMENT/POLLUTION CONTROL, HEALTH AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires the conduct of operations in such a manner so as to ensure the safety of all concerned, compliance with environmental regulations and preservation of natural resources.

RESEARCH & DEVELOPMENT AND QUALITY CONTROL

The activities of R&D consist of improvement in the processes of existing products and developing new products. Quality Control is the strength of the Company. All raw materials and finished products pass through stringent quality checks for better results.

INSURANCE

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine etc. Further pursuant to Regulation 25 (10) of SEBI (LODR) Regulations, 2015 the Company has taken the Directors and Officers Insurance (D and O insurance).

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under 134(3)(m) of the Companies Act, 2013 read with Rule 8 ofThe Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in "Annexure IV".

STATUTORY AUDITORS

M/s Avishkar Singhal & Associates, Chartered Accountants (Firm Reg. No. 017362N) the Statutory Auditors were appointed for a second term of consecutive 5 (Five) years at 27th Annual General Meeting of the Company held on 30th September, 2022, till the conclusion of the 32nd Annual General Meeting of the Company to be held in the calendar year 2027. The Statutory Auditors have however confirmed that they are not disqualified to continue as Statutory Auditors and are eligible to hold office as Statutory Auditors of your Company.

As per the provisions of Section 139 of the Companies Act, 2013, read with Regulation 33(d) of the SEBI (LODR) Regulation, 2015, the auditor has confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

AUDIT REPORT

The Notes to the financial statements referred in the Auditors Report are self-explanatory. The Auditors Report for the Financial Year 2022-23 does not contain any qualification, reservation, or adverse remark. Regarding emphasis of matter as contained in the Auditors Report, the managements comments (in italics) are as follows: -

a) We draw attention to Note no. II of the accompanying standalone financial statements, which states that, during the year, company has sold investment in M/s Halcyon Lifesciences Private Limited (HLSPL) at an exceptional loss which is charged to P&L as exceptional item. The HLSPL ceased to be the subsidiary of the company as on 31-03-2023.

• The said Subsidiary was in-operational for some time and the only Land parcel which it owned, was sold to meet the SDCO Jammus directions to either operate or vacate the land, thus, making the subsidiary unviable to operate.

b) We draw attention to Note no. X of the accompanying standalone financial statements, which states that, during the year, the company extended a further loan to Ind Swift Limited (Related Party) at a 10% rate of interest.

• The loan has been advanced to group company as per the provisions of Companies Act, 2013 after seeking due consents of the Audit Committee, Board of Directors and Shareholders in compliance to the LODR Regulations also.

COST-AUDITORS AND THEIR REPORT

M/s. V. Kumar & Associates, Cost Accountants have been duly appointed as Cost Auditors of the Company for audit of cost accounting records which are covered under the Cost Audit Rules for the current financial year ending March 31, 2024.

As required by Section 148 of the Companies Act, 2013, necessary resolution has been included in the Notice convening the AGM, seeking ratification by the Members to the remuneration proposed to be paid to the Cost Auditors for the financial year ending March 31, 2024.

The Cost Audit Reports for the financial year 2012-22 issued by M/s V. Kumar and Associates, Cost Auditors, was filed with the Ministry of Corporate Affairs. The Cost Audit Reports for the financial year ended 2022-23 will be filed within the prescribed period.

The Company has maintained all the cost records as specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Vishal Arora, Practicing Company Secretary was appointed as Secretarial Auditors of the Company for the financial year 2022-23 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as "Annexure-V" and forms part of this report.

There are no qualifications or other remarks of the secretarial auditors in the secretarial audit report as issued by them for the financial year 2022-23. There are a few observations by the Secretarial Auditors which the Board considers to be informatory in nature.

SECRETARIAL STANDARDS:

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

INTERNAL AUDITORS

M/s Jain and Associates, Chartered Accountants were the Internal Auditors of the Company during FY 2022-23. The Board has approved the re-appointment of M/s Jain & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 2023-24 as well. They will conduct the Internal Audit of the Company as required under Section 138 of the Companies Act and their reports shall be reviewed by the Audit committee and the Board of Directors.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

INTERNAL COMPLAINTS COMMITTEE

The Company has complied with all the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

During the year, the Committee has not received any complaint related to Sexual harassment.

CORPORATE GOVERNANCE

Your Company is committed to maintaining the highest standards of corporate governance practices. The Corporate Governance Report forms part of this Annual Report. The Auditors certificate certifying compliance with the conditions of Corporate Governance under Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015 is annexed as "Annexure-VI" to this Report.

HUMAN RESOURCE

Your Company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building a competitive work environment. The Company regularly conducts various programs at different levels to ensure that a vibrant and motivated workforce leads to achievement of the defined goals. Employee relations continued to the harmonious and cordial at all levels and in all the units of the Company.

The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" and in its full compliance, the Company has constituted "Internal Complaints Committee" for prevention of sexual harassment of its women employees. During the year, the Committee has not received any complaint related to Sexual harassment.

PARTICULARS OF EMPLOYEES

The Company takes pride in the commitment, competence, and dedication of its employees in all areas of the business. The relation between the management and employees is healthy and cordial. There is transparency in the dealings and in matters relating to the activities of the Company and its employees.

Particulars of remuneration of employees required to be furnished pursuant to the provisions of Section 197 (12) of the Companies Act, 2013 (Act), read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as "Annexure VII" to this Report. Particulars of remuneration of top 10 (Ten) employees required to be furnished in terms of Rules 5(2) and 5(3) of the said Rules which shall be provided to Members upon written request pursuant to the second proviso of Rule 5. Particulars of remuneration of employees are available for inspection by Members at the registered office of the Company during business hours on all working days up to the date of the forthcoming AGM.

Details of employees who received remuneration in excess of H102 lakh p.a. or H8.5 Lakhs p.m.:

a) During the year, none of the employees received remuneration in excess of H102.00 Lakh or more per annum or H8.50 per month for part of the year. In accordance with the provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, therefore there is no information available to disclose.

b) During the year, none of the employees received remuneration in excess of that drawn by the Managing Director or Whole-time director and none of the employees held two percent of the equity shares of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the Financial Year 2022-23, no significant/material orders were passed by any of the Regulators/Courts or Tribunal that would impact the going concern status of the Company and its future operations.

KEY FINANCIAL RATIOS

The Key financial ratios for the financial year ended 31st March, 2023 forms part of the Management Discussion and Analysis Report.

REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Ltd. are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares and Non-Convertible Debentures of the Company. The members are requested to contact the Registrar directly for any of their requirements.

LISTING ON STOCK EXCHANGES

The Companys shares are listed on BSE Limited ("BSE") and the National Stock Exchange of India Limited ("NSE").

LISTING FEES

The Annual Listing fee for the year under review has been paid to the BSE Limited and The National Stock Exchange of India Ltd.

CEO/CFO CERTIFICATION

In terms of the Listing Regulations, the Certificate duly signed by Sh. Navrattan Munjal, Chairman and Sh. Gagan Aggarwal, Chief

Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2023, at its meeting held on 29th May, 2023.

GENERAL DISCLOSURES

Your directors state that no disclosure or reporting is required in respect of the following items, as there were no transactions/ events of similar nature during the year under review:

1. Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

2. One time settlement of loan obtained from the Banks or Financial Institutions.

3. Revision of financial statements and Directors Report of your Company.

4. Any remuneration or commission received by the Managing Director or Whole-time Directors from its subsidiary.

ACKNOWLEDGEMENT

Your directors thank all the employees for their sincere efforts, active involvement and devoted services rendered. Your directors thank the shareholders of the Company for the confidence reposed in the Management of the Company. Your directors place on records their gratitude to the Customers, Suppliers, Companys Bankers and Financial Institutions for their support and cooperation during the year under review.

Sd/-
Navrattan Munjal
Place: Chandigarh Chairman & Managing Director
Date: 31.08.2023 DIN: 00015096