Orchid Pharma Ltd Directors Report.

Dear Members

Your Board of Directors have pleasure in presenting the Twenty Ninth (29th) Boards Report together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2022.

Financial summary / Performance /State of Companys affairs

The Highlights of the standalone and consolidated financial results for the Financial Year 2021-2022 as per the IND AS are given below:-

(Rs. in Crores)

Particulars

Standalone

Consolidated

Year ended Year ended Year ended Year ended
31.03.2022 31.03.2021 31.03.2022 31.03.2021
Sales & Operating Income 556.97 450.70 559.56 450.06
Other Income 9.00 6.46 9.00 15.21
Total Expenditure 499.72 392.79 509.95 400.27
Gross Profit /(Loss) 66.26 64.36 58.61 65.00
Interest & Finance Charges 32.01 51.34 32.01 51.34
Gross Profit after Interest but before Depreciation and Taxation 34.25 13.03 26.60 13.67
Depreciation 87.02 108.90 87.02 108.92
Profit / (Loss) before Tax and extraordinary items (52.77) (95.87) (60.42) (95.25)
Exceptional items - [Income / (Expenditure)] - - - -
Profit / (Loss) Before Tax (52.77) (95.87) (60.42) (95.25)
Current & Deferred Tax - - - -
Profit /(Loss) after Tax - Continuing Operations (52.77) (95.87) (60.42) (95.25)
Profit / Loss from discontinued operations after tax 47.96 (21.28) 58.47 (21.28)
Loss for the year (4.81) (117.15) (1.95) (116.53)
Re-measurement of post-employment benefit obligations 1.46 0.60 1.46 0.60
Gain /(Loss) on fair valuation of the Investments (0.04) 0.07 (0.04) 0.07
Comprehensive Loss for the Year (3.38) (116.49) (0.53) (115.87)

Business segments

Your Company operates in one business segment viz., pharmaceuticals in which the Company drives its sales through Active Pharmaceutical Ingredients (APIs). The Company has a strong pipeline of products in Cephalosporins to cater to the need of various international markets. The Company has a strong global presence with a wide customer base. The Companys manufacturing facilities have the capabilities to manufacture various APIs by unique techniques / emerging Technologies, in which different kind chemical reactions are involved like alkylations, amidation, esterification, Halogenations, Mesylation reaction, Witting reactions, Ring expansion reactions, protection/deprotection reaction, Enzymatic reaction etc. Orchid Pharmas key focus area comprise of developing New Chemical Entities, New Drug applications, adding 5th generation Oral & Sterile cephalosporin human/veterinary drugs with our world class manufacturing facility , strong intellectual property team having expertise and experience in chemistry, analytical techniques, dosage forms and global patent law.

Standalone Financials

During the financial year 2021-2022, your Company achieved a turnover and operating income of Rs. 556. 97 crores against Rs. 450.70 crores in 2020-2021. The Gross Profit before interest, depreciation and taxes during the year stood at Rs.66.26 crores against a Gross Profit of Rs.64.36 crores in 2020- 2021. After providing for interest expense, depreciation, exceptional item, the Loss before tax of the Company for the year was Rs. 52.77 Crores against Rs. 95.87 crores in 2020- 2021. The Comprehensive Loss stood at Rs.3.38 crores during 2021-2022 against Rs. 116.49 crores in 2020-2021.

Consolidated Financials

During the financial year 2021-2022, your Company achieved a turnover and operating income of Rs. 559.56 crores as against Rs. 450.06 crores in 2020- 2021. The Gross Profit before interest, depreciation and taxes during the year stood at Rs. 58.61 crores against a Gross Profit of Rs. 65.00 crores in 2020- 2021. After providing for interest expense, depreciation, exceptional item, the Loss before tax of the Company for the year was Rs. 60.42 Crores against a loss of Rs. 95.25 crores in 2020-2021. The Comprehensive Loss stood at Rs. 0.53 crores during 2021-22 against a loss of Rs.115.87 crores in 2020-2021. You will appreciate that despite of lock down across the country due to Covid 19 pandemic, most of the plants of your Company were in operation and utilizing maximum capacity of the same and your Company managed to sustain standalone sales of Rs.556.97 crores but could not achieve gross margins due to the reduced turnover. NAME="bookmark4">Capex and liquidity

During the year, the Company has spent Rs. 38.00 lakhs on Plant & Equipment, etc., largely towards balancing facilities and essential sustenance capital items. As on March 31, 2022, the long-term secured financial facility availed by the Company is Rs. 147.78 crores.

Material events during the year under review Scheme of Amalgamation and Arrangement of Dhanuka Laboratories Limited with Orchid Pharma Limited.

During the year under review, the Scheme of Amalgamation and Arrangement of Dhanuka Laboratories Limited (Transferor Company) with and into Orchid Pharma Limited ( Transferee Company) and their respective shareholders and creditors (Scheme) in compliance with Sections 230 to 232 and other relevant provisions of the Companies Act, 2013 ("the Act”) as reviewed and recommended by the Audit Committee and the Independent Directors was approved by the Board. The implementation of the aforesaid Scheme, which is subject to the approval of Shareholders and other Statutory authorities would inter-alia enable both the transferor and transferee Companies to realize benefit of greater synergies between their businesses, achieve wider product offerings and geographical footprints, consolidate operations thereby leveraging the capability of the Amalgamated company, yield beneficial results and pool financial resources as well as managerial, technical, distribution and marketing resources of each other in the interest of maximizing value to their Shareholders and the Stakeholders and aid in achieving economies of scale. The Company had submitted applications to the National Stock Exchange of India Limited ("NSE”) and BSE Limited ("BSE”) towards the aforesaid Scheme and has received the "No Objection certificates” from NSE on March 29, 2022 and BSE on March 30, 2022. Further, the First motion application towards the aforesaid Scheme has been submitted to the National Company Law Tribunal and the approval is awaited.

Future Outlook It is been more than two years now since the implementation of the approved Resolution plan and your Company is moving in the positive direction. Huge efforts are required still towards rebuilding the organization and taking it to greater heights. In financial terms, the objective of your Company is to lower earnings volatility, strive for higher predictable and calibrated growth and improve Sales, EBITDA margin and reduce debt. The target is to stay cash flow positive and expand earnings year-on-year. Your Company is striving hard to reverse the direction of the downward curve by ramping up businesses and achieve sizeable growth. The greatest challenge your Company is facing is to achieve growth and profit margins, inspite of the COVID 19 pandemic situation which has resulted in a significant reduction in Anti-Biotics demand across the world. The Board and the Management of your Company are committed and will put in their best efforts to turnaround your Company with optimum cost structure.

Management Discussion and Analysis report

A report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 (2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 "Listing Regulations” is provided as a separate annexure in the annual report.

Corporate Governance Report and Additional Shareholders information

A report on the Corporate Governance systems and practices of your Company along with a certificate of compliance from the Practising Company Secretary is given in Annexure IV which forms part of this report.

Board Committees

The details pertaining to the Audit Committee and other Committees of the Board are provided in the Corporate Governance section forming part of this report. All the recommendations made by the Committees of the Board including the Audit Committee were accepted and implemented by the Board. During the year under review, there was no change in the composition of any of the committees.

Adequacy of Internal Financial Control System

The Internal Financial Control over Financial Reporting System are existing and operative, however based on the observations of the auditors, the Company is further strengthening the Internal Financial Control systems over financial reporting.

Regulatory Filings and Approvals

In the generic formulations domain, the existing approval of 11 ANDAs in Cephalosporins segment have been transferred to Bion Pharma Inc ("Bion”) out of which 6 ANDAs are withdrawn and 5 ANDAs are retained with Bion. In the API (Active Pharmaceutical Ingredients) domain, Orchids cumulative filings of US DMF stand at 46. The break-up of the total filings is 28 in the Cephalosporin Segment and 18 in NPNC segment. In European market space the cumulative filings of COS (Certificate of Suitability) count remained at 17 (15 approved and 2 under review) which pertains to the cephalosporin segment. In the Japan market, the cumulative filings of JDMFs count remained at 8 all in Cephalosporin segment.

Intellectual Property Rights

The total number of active patent portfolio maintained by Orchid in various national and international patent offices so far is 29 including Process & New Chemical Entities (NCE). Out of 29 patents, 19 patents have been granted, 8 patent applications are published and 2 patent applications filed as of March 31, 2022.

Dividend & Reserves

In view of the net loss incurred during the financial year ended March 31, 2022, the Board does not recommend any dividend to the shareholders of the Company. Also, no amount has been transferred to the reserves.

Export Excellence Awards

During the year under review, your Companys Active Pharmaceuticals Ingredients (API) manufacturing Unit, Alathur and Finished Dosage Formulations (FDF) manufacturing Unit, Irungattukottai (IKKT) were chosen for the Export Excellence Awards by the Ministry of Commerce & Industry, Government of India based on the criteria enumerated below and performance of your Company during the financial years 2016-2017 to 2019-2020.

Year of award Criteria & Position
2016-2017 API Unit, Alathur-Exports 2nd place Highest Exports in Pharmaceutical, Plastic & Rubber, Chemical & Allied Sector (Category: Above Rs.50 Crores)
2017-2018 API Unit, Alathur-Exports 1st place Highest Exports in Pharmaceutical, Plastic & Rubber, Chemical & Allied Sector (Category: Above Rs.50 Crores)
2018-2019 Orchid Healthcare Unit-II 1st place Highest Exports in Chemicals, Plastics & Rubber, Pharmaceuticals & Drugs (Category: Above Rs.10 Crores below Rs.50 Crores)
2018-2019 API Unit, Alathur 2nd place Highest Employment in Chemicals, Plastics & Rubber, Pharmaceuticals & Drugs
2018-2019 API Unit, Alathur-Exports 2nd place Highest Exports in Chemicals, Plastics & Rubber, Pharmaceuticals & Drugs (Category: Above Rs.50 Crores)
2019-2020 API Unit, Alathur-Exports 2nd place Highest Exports in Chemicals, Plastics & Rubber, Pharmaceuticals & Drugs (Category: Above Rs.50 Crores)

Dividend Distribution Policy

Regulation 43A of the Listing Regulation, as amended, requires the top 1000 listed entities, computed based on market capitalization as on March 31 of every Financial Year, to formulate a Dividend Distribution Policy and disclose the same on the website of the Company and a web link of the policy be disclosed in the Annual Report.

The Board of Directors of the Company has adopted a Dividend Distribution Policy which aims to ensure fairness, sustainability and consistency in distributing profits to the

Shareholders. The Policy is available on the website of the Company i.e., www.orchidpharma.com/downloads/Dividend% 20Distribution%20policy.pdf

Business Responsibility Reporting

As stipulated under the Listing Regulations, the Business Responsibility Report (BRR) describing the initiatives undertaken by the Company from an environment, social and governance perspective is given in Annexure X which forms part of this report.

Employees Stock Option Plan

The Employee stock options plans namely a) ORCHID ESOP 2010,ORCHID ESOP - DIRECTORS 2011 and c) Orchid ESOP - Senior Management 2011 have all lapsed quite a few years ago. Moreover, these schemes are no longer a desirable and viable employee benefit; all the above three ESOP Schemes have become infructuous and hence have been terminated.

Subsidiaries & Step down Subsidiaries

Bexel Pharmaceuticals Inc., USA (Bexel)

Bexel was incorporated basically to conduct Research & Development activities in new drug discovery segment. The current Bexel IP portfolio is being maintained by Global IP Unit of your Company.

Orchid Pharmaceuticals Inc., USA

Orchid Pharmaceuticals, Inc., is a wholly owned Delaware based subsidiary of your Company and also the holding company in the United States, under which all the operational business subsidiaries have been structured. The Company currently has two operating Subsidiaries, namely Orgenus Pharma Inc., and Orchid Pharma Inc., in the US. Orgenus Pharma Inc., is the entity that provides all business development and operational services for the parent Company including the initiation of marketing alliances with partner companies. It continues to represent your Company for all matters relating to the review and approval of such filings by the FDA and handling of logistics and product importation into the US as the Importer of Record for the US Customs. Orchid Pharma Inc., is the commercial entity that started direct marketing and selling your Companys products in the US generics market place. Orchid Pharma Inc., has established a strong corporate image for your Company in the US.

Diakron Pharmaceuticals Inc., USA

Orchids stake in Diakron has been a part of the original transaction which includes direct investment and Master Services Agreement (MSA). Though your Company has completed most of its MSA obligations to develop and supply clinical quantities of API and extended release formulation a sizeable outstanding liabilities is still in its Books. A proper evaluation of cost and benefit would be done for revival and funding.

Orchid Europe Limited, United Kingdom

Your Companys subsidiary in Europe namely Orchid Europe Limited (OEL) is a wholly owned subsidiary which provides liaising support to the parent Company and its customers in Regulatory, Pharma covigilance, Testing & Release, Retention of samples, Service Providers and Business Development in Europe.

Orchid Pharmaceuticals (South Africa) Proprietary Limited, South Africa

Your Companys wholly owned subsidiary, Orchid Pharmaceuticals (South Africa) Proprietary Limited, was incorporated in the year 2006 mainly to register and market your Companys products in South Africa. As not much progress has happened so far, the Board of your company has decided to wind up this entity. Associate

During the year under review, your Company had subscribed to equity shares constituting 26% of paid up equity share capital of M/s OrBion Pharmaceuticals Private Limited ("OrBion”) by virtue of which the Company has become an Associate of your Company. The total shares subscribed by your Company in OrBion as on March 31,2022 is 4,55,00,000 equity shares of Rs.10/- each constituting 26% of paid up equity share capital of M/s OrBion Pharmaceuticals Private Limited.

Orchid Bio-Pharma Limited

Orchid Bio-Pharma limited was incorporated as Indian Wholly owned Subsidiary ("WoS”) of your Company on March 24, 2022. The main object of the aforesaid WoS is manufacturing of biotech chemicals, intermediates and biotechnology products. The WoS is yet to commence its business operations.

There are no Companies / Bodies Corporate which have ceased to be subsidiary / Joint Venture / Associate during the financial year 2021-2022. The Company did not have any material subsidiary as on March 31, 2022.

Highlights of the performance of Subsidiaries & Associate their contribution to the overall performance of the Company during the period under report

One of the Subsidiary Companies contributed 1.89 % of the consolidated sales of the Company. The Company accesses the US market through this subsidiary and expects reasonable growth in the US market in the years to come either through its wholly owned subsidiary or directly. The R&D subsidiaries of the Company were used for carrying out Research & Development of selected molecules, having good potential. Your Company has a subsidiary for holding Product registrations and approvals in Europe. The Board and Management is reviewing the operations of all the subsidiaries and representative offices of your Company and would take appropriate steps for either the revival of its businesses based on cost-benefit analysis or their closure to save costs.

For the Financial Year ended March 31, 2022, OrBion Pharmaceuticals Private Limited, Associate of your company had registered a net income of Rs. 2050.42 Lakhs with net loss of Rs. 1354.87 Lakhs.

Consolidated financial statements

Pursuant to Section 129(3) of the Companies Act, 2013, the Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries. Further, a statement containing the salient features of the financial statements of the Subsidiaries and Associate of the Company in the prescribed form AOC-1 is given in Annexure-VII & forms part of this report. This statement also provides the details of the performance and financial position of each subsidiary in accordance with Section 136 of the Companies Act, 2013.

Directors and Key Managerial Personnel

As at 31st March 2022, the Board of your Company comprised of eight Directors of which 4 (four) are independent. There was no change in the Directors and Key Managerial Personnel during the financial year 2021-2022.

Names of the Directors retiring by rotation at the ensuing Annual General Meeting and whether or not they offer themselves for re-appointment

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Ram Gopal Agarwal (DIN:00627386), Chairman and Non-Executive Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends the re-appointment of Shri Ram Gopal Agarwal.

Extract of Annual Return

In accordance with Section 92(3) of the Companies Act, 2013, every company shall place a copy of the annual return on the website of the Company, if any, and the web-link of such annual return shall be disclosed in the Boards report. A copy of the Annual return of the Company is available on the website of the Company and can be accessed at the following web-link: http://orchidpharma.com/downloads/annualreports

Board meetings held during the year

During the year under review, Seven (7) meetings of the Board of Directors were held. The Board Meetings were held in accordance with the provisions of the Companies Act, 2013 & the relevant rules made there under and the Listing Regulations. The details of the Board and committee meetings held are furnished in the Corporate Governance Report forming part of this report.

Directors Responsibility Statement

Pursuant to the provisions contained in Section 134 (3) (c) of the Companies Act, 2013, the Board to the best of its knowledge and belief and according to the information and explanations obtained by it confirms that:

a) In the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 at the end of the financial year ended March 31, 2022 and of the profit and loss of the company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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 for the financial year ended March 31, 2022 on a going concern basis;

e) The Directors have laid down Internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

Nomination & Remuneration policy

This Policy lays down standards with respect to the appointment, remuneration and evaluation of Senior Management Personnel, Directors and Key Managerial Personnel of the Company. The Policy is available on the website of the Company and the web-link for the same is www.orchidpharma.com/downloads/NOMINATION_AND_REMUN ERATION_POLICY.pdf

Appointment and Remuneration of Non- Executive Directors

Non-Executive Directors are entitled to receive sitting fees for attending the meetings of the Board or Committee thereof, as approved by the Board and within the overall limits prescribed under the Companies Act, 2013 and rules made thereunder.

The Criteria for determining independence of a director are based on the academic accomplishments, qualifications, expertise and experience in their respective fields, diversity of the Board, global exposure, professional network, technical expertise, functional domain expertise, independence and innovation.

The Company has received the necessary declarations from each Independent Director in accordance with Section 149 (7) of the Act confirming that he/she meets the criteria of independence as laid out in Section 149 (6) of the Act and in accordance with Regulations 16 (1) (b) and 25 (8) of the Listing Regulations, 2015.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are independent of the Management. All the Independent Directors have been registered and are members of Independent Directors Databank maintained by the Indian Institute of Corporate Affairs and whoever be required to qualify the online proficiency self-assessment test will be complied in due course of time, if any.

Opinion of the Board

The Board opines that all the Independent Directors of the Company strictly adhere to corporate integrity, possesses requisite expertise, experience and qualifications to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and Listing Regulations diligently.

Related Party Transaction Policy

Your Company has framed a Related Party Transaction Policy in compliance with Section 177 of the Companies Act 2013 and Regulation 23 of the Listing Regulations in order to ensure proper reporting and approval of transactions with related parties. The Policy is available on the website of the Company and the web-link for the same is www.orchidpharma.com/ downloads/Policv%20on%20materialitv%20and%20dealing %20with%20Related%20Party%20Transactions.pdf. All the transactions entered with the related parties were in ordinary course of business and on arms length basis except for the purchase of land and buildings from M/s. Dhanuka Laboratories Limited and M/s. Synmedic Laboratories Limited which were not in the ordinary course of business.

Justification for entering into contracts / arrangements with related parties which are not in the ordinary course of business

The purchase of land and buildings from M/s. Dhanuka Laboratories Limited and M/s. Synmedic Laboratories Limited which was at arms length and not in the ordinary course of business of the Company was aimed at enhancing the operational efficiency of your Company and maximizing the Shareholders value. The aforesaid transactions is in the best interest of the Company. The Audit committee of the Board had reviewed the aforesaid transactions including the valuation reports and the transaction was effected with the approval of the Board of Directors and Prior approval of the Shareholders of the Company. The details of material contracts or arrangements or transactions in form AOC-2 is given in Annexure VIII to this report.

Corporate Social Responsibility (CSR)

Your Company does not meet the thresholds as prescribed under Section 135 (1) of the Companies Act, 2013 and hence the constitution of the CSR Committee is not applicable. However,

the erstwhile Board of the Company has approved the CSR policy and the same is available on the website of the Company and the web- link for the same is www.orchidpharma.com/ downloads/CSR-POLICY.pdf

Since the Company did not have any profits for the last three financial years, your company is not mandatorily required to contribute towards CSR activities.

Material changes and commitment, if any, affecting financial position of the Company from the end of Financial Year and till the date of this Report

Except otherwise stated herein in this Report, there are no material changes and commitment affecting financial position of the Company from the end of Financial Year March 31, 2022 and till the date of this Report.

Conservation of Energy

Your Company has always been striving in the field of energy conservation. With the available limited resources, certain measures to conserve energy and to reduce associated costs were taken in a small way during the fiscal under review. The particulars in respect to conservation of energy as required under Section 134 (3) (m) of the Companies Act, 2013, are given in Annexure I to this report.

Technology Absorption

The particulars in respect of R&D/Technology absorption as required under Section 134 (3) (m) of the Companies Act, 2013, are given in Annexure II to this report.

Foreign Exchange Earnings and Outgo

The particulars in respect of Foreign Exchange Earnings and Outgo as required under Section 134 (3) (m) of the Companies Act, 2013 are given in Annexure III to this report.

A statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company

The details and the process of Risk Management as were existing and implemented in the Company are provided as part of Management Discussion and Analysis, which forms part of this report.

The Company has constituted a Risk Management Committee aligned with the requirements of the Companies Act, 2013 and the Listing Regulations. The details of the aforesaid Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report

The Company has a risk management mechanism in place to manage uncertainties through identification, analysis, assessment, implementing and monitoring measures to reduce the impact of risks to the business which is discussed in detail in the Management Discussion and Analysis section of this Annual

Report.

Annual evaluation of Board, its Committees and individual Directors

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board carried out an annual performance evaluation of its own performance, the Directors individually, the Chairman of the Board and its Committees as per the evaluation framework adopted by the Board on the recommendation of the Nomination and Remuneration Committee. The performance evaluation has been done by the entire Board of Directors, excluding the Director being evaluated. Various evaluation techniques are used to assess the performance of the Directors. The Directors have participated in this evaluation process. The Independent Directors in their separate meeting have also evaluated the performance of the Chairman of the Company, Non-Independent Directors and the Board as a whole. Separate questionnaires were used to evaluate the performance of individual Directors on parameters such as their participation and contribution, objective judgment etc. The Chairman was also evaluated based on the key aspects of his role.

Change in the Nature of Business

There is no change in the nature of business carried on by your company during the financial year ended March 31, 2022. During the year under review, the Company had sold its Formulations unit (IKKT) on a slump sale basis to M/s. OrBion Pharmaceuticals Private Limited. The IKKT unit was generating negative EBITDA, hence the sale of above unit would improve the EBITDA of your Company.

Details regarding deposits covered under Chapter V of the Act

During the Financial Year 2021-22, your company did not accept any deposits within the meaning of the provisions of Chapter V - Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits), Rules 2014 and as such no amount of principal or interest was outstanding as of the balance sheet date.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company

There have been no significant nor material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations.

Disclosure under the sexual harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013

The details pertaining to captioned header are disclosed in the Corporate Governance report which is annexed to the Boards report.

Prevention of insider trading

The Company has adopted a Code of Prevention of Insider Trading with a view to regulate trading in securities by the Directors and the Designated Persons of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the Designated Persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

Environment

Environment management is the prime concern in Orchid Pharma Limited. Orchid has employed a state-of-the-art technology, zero liquid trade effluent treatment plant and world class treatment facilities for its liquid and gaseous pollutants generated from the production processes. The zero discharge of liquid trade effluent treatment plant comprising Membrane Bio Reactor, Reverse Osmosis, Solvent Stripping Column, Thermal Evaporation & Crystallization plant to treat the entire trade effluent and recycle back into the utility process.

Waste Water Treatment

Low TDS effluent is collected, equalized and neutralized into neutral pH and treated aerobically by Membrane Bio Reactor process comprising of aeropac equipped with jet aeration system made up of Glass Fibre Reinforced Plastic & Ultrafiltration System loaded with ceramic membrane (aluminum zirconium). The permeate from ultrafiltration passes through reverse osmosis to separate inorganic salts. The permeate of reverse osmosis is utilized in the cooling towers as make up water. The reject from the reverse osmosis plant is mixed with high total dissolved solids effluent for further treatment. The excess bio mass from the aerobic system is centrifuged and sent to bio composting process to convert into useful manure. High TDS effluent is collected and neutralized into neutral pH. This effluent is sent to Mechanical Evaporators (Single stage, Three stage and Five stage) to concentrate the salts to the level of 35%. Heat energy is recovered during the process of evaporating the effluent and the recovered heat energy is utilized to reduce the energy consumption. The concentrate from the evaporators are sent to Agitated Thin Film Dryers (ATFD) where it gets dried and the dried salt is collected at the bottom of ATFD. The collected salt is bagged, stored in protected storage sheds and disposed at Government approved Treatment Storage & Disposal Facility (TSDF).

Waste Air Treatment

The major emissions from the unit is from the boiler, power plant, production process and powder processing area.

Process Scrubbers: Orchid installed process scrubbers in all production blocks to treat the waste air generated from process reactors.

Vent Gas Condensation: Orchid installed vent gas condensation system for fugitive emissions from the storage tanks of solvents and secondary condensers of solvent recovery area to control the fugitive emissions.

Reverse Jet Ventury Filter: Orchid installed reverse jet ventury filter to control the dust emission during the powder processing of bulk drugs.

Adequate Stack Height: Adequate stack heights are provided for Steam Boiler and Power Plant for better dispersion.

Electro Static Precipitator (ESP): ESP is provided at the boiler emission to control the particulate matter.

Ambient Air Quality and Stack Emission Monitoring: Ambient air quality and stack emission monitoring is being carried out round the clock to check the emission level in the atmosphere.

Hazardous waste Management

Hazardous wastes are collected and stored in protected storage shed and disposed into the approved landfill sites / authorized recyclers.

Bio composting

Bio sludge generated from the biological process of effluent treatment are converted into useful compost.

World Environment Day Celebration

World Environment Day was celebrated on 4th June 2021 by planting trees with in our factory premises to create awareness on environment among employees.

Safety

Orchid is highly committed to Safety, Health and Environment aspects. In spite of challenging circumstances brought about by COVID-19, there has been no compromise on critical needs of safety. This has been possible because of committed Line Management, dedicated Safety Professionals and relentless Leadership direction. Central Safety Committee (CSC), the apex committee of the organization have ensured that risks have been contained to keep us free from any major incident. Orchid strongly believes that human behaviour plays key role in safety management. Reinforcing the Safety observation & Audit (SOA) - a Lead indicator, becomes a key focus area always in our Central Safety Committee meetings. CSC continues to meet every month, review critical concerns on Safety and provides directions to minimize the risks at all levels.

In light of the evolving Coronavirus situation, organization is taking critical measures to contain the spread of COVID-19. Essential preventive measures have been taken to ensure that we keep ourselves, our families and our communities safe. Orchid established a comprehensive crisis management plan to handle the pandemic. This plan addresses the adequate preparedness and response measures for the following risks that arises out of the pandemic situation.

Spread of infection across employees operating within plants

Contract employee health issues

Contamination from employees returning from hot spots

• Inadequate availability of work force due to absenteeism spikes

Inadequate focus on Safe work practices, maintenance under restricted work force # Shutdown and start-up of process

Contamination of work place / warehouse # Contamination risk from Visitors / Contractors

• Inadequate social distancing

Risk of movement of Contaminated vehicles

Gap in Sanitation and hygiene requirements

At Orchid, we have initiated protocols for hygiene and sanitation, social distancing, Virtual meetings, medical assistance and vaccination initiatives in alignment with National /Global guidelines on disease prevention and control to prevent contamination and to cope with adverse situations. These measures have been rolled out across all Orchid business processes, Manufacturing Sites, offices, and Technology Development facilities.

Process Safety is of paramount importance for any Chemical and Pharmaceutical organization, therefore, we have built a strong Process safety culture at Orchid over the years. The company also realized the need of effective safety communication in culture building activity / exercise. This is backed up by periodical safety talks, Safety Posters and Interactive discussions. Several safety-related initiatives, awareness campaigns were conducted to promote a "zero incidents” mindset among employees. These efforts resulted in behavioural change, making a zero-reportable-incidents year. By applying Risk Assessment technologies at work on chemicals and process, we ensured that highest workplace safety standards were implemented across the manufacturing value chain.

Particulars of Employees and Remuneration

The Information as required pursuant to Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure V to this report. The information as per Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, as per First proviso to Section 136(1) of the Companies Act, 2013 and Second proviso to Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the Statement of Particulars of Employees under Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the address of the Corporate Office of the Company.

Remuneration received by Managing/Whole time Director from holding or subsidiary company

No remuneration was received by Shri Manish Dhanuka, Managing Director and Shri Mridul Dhanuka, Whole time Director of your Company from the holding and the Subsidiary companies of your company for the financial year ended March 31, 2022.

Particulars of Loans, Guarantees or investments under Section 186 of the Companies Act, 2013

Particulars of Loans, Guarantees or investments as required under Section 186 of the Companies Act, 2013 are provided in the Note no. 6 & 14 to the Standalone financial statements for the financial year 2021-2022.

Suspension of Trading

The Securities of the Company were not suspended from trading during the year under review. With effect from November 15, 2021, 14,803 outstanding Global Depository Receipts (GDRs) were delisted from the Luxembourg Stock Exchange and London Stock Exchange.

Transfer of Shares to the Investor Education and Protection Fund (IEPF)

The details pertaining to the transfer of shares to the Investor Education and Protection Fund during the reporting period are disclosed in the Corporate Governance report annexed to this report.

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year

Not Applicable to the company.

The details of difference between amount of the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof Not Applicable to the company.

Statutory Auditors

The Statutory Auditors, M/s CNGSN & Associates LLP, Chartered Accountants were appointed at the 24th Annual General Meeting of the Company held on September 13, 2017 for a period of five (5) years from the conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting. The term of the current Statutory Auditors M/s. CNGSN & Associates LLP, Chartered Accountants, will expire at the conclusion of the 29th Annual General Meeting of the Company and consequently a new audit firm have to be appointed. The Board of Directors at their meeting held on June 14, 2022, based on the recommendation of the Audit Committee have recommended the appointment of M/s.Singhi & Co., Chartered Accountants (Firm Registration No. 302049E) as the Statutory Auditors, subject to the approval of the members of the Company. The resolution seeking appointment of M/s.Singhi & Co., Chartered Accountants, (Firm Registration No. 302049E) as the Statutory Auditors of the Company for a period of five years from the conclusion of the 29th AGM of the Company is being sought for at the ensuing AGM.

The Board places on record its appreciation for the services of M/s. CNGSN & Associates LLP, Chartered Accountants, during their tenure as the Statutory Auditors of your company.

Auditors Report

The Auditors have audited the standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022 and no fraud have been reported by the Auditors under Section 143 (12) of the Companies Act, 2013 requiring disclosure in the Boards Report.

Explanation to the Audit qualifications

The explanation to the Audit qualifications for the financial year ended March 31, 2022 are given in Annexure IX to this report.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, M/s S Dhanapal & Associates (a firm of Practising Company Secretaries) were appointed to conduct the Secretarial audit of your Company for the Financial Year 20212022. The Secretarial Audit Report is forming part of this Annual Report (Annexure VI).

Upon recommendation of the Audit Committee, the Board has re-appointed M/s S Dhanapal & Associates (a firm of Practising Company Secretaries), as Secretarial Auditors of the Company for the Financial Year 2022-23.

In terms of Regulation 24A of the Listing Regulations, there is no material unlisted subsidiary incorporated in India. Material unlisted subsidiary for the purpose of this Regulation is a subsidiary whose income/net worth exceeds 10 per cent of the consolidated income/net worth respectively of the Company and its Subsidiaries in the immediately preceding accounting year. Hence, there is no requirement for a Secretarial audit to be conducted for any of the Companys Subsidiaries in India.

Secretarial Audit report

In respect of delay in filing returns with relevant authorities on certain occasions, the Company is taking necessary steps for filing the returns on time in the ensuing years. With reference to the mentioning of the web link of the Business Responsibility Report in the Annual report, the web-link was inadvertently missed to be printed in the Annual report

Compliance with the provisions of Secretarial Standards

The Company has deployed proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by the Institute of Company Secretaries of India.

Cost Audit

The Central Government has prescribed that an audit of the cost accounts maintained by the Company in respect of Bulk Drugs and Formulations be conducted under Section 148 of the Companies Act, 2013. Consequently, your Company had appointed Shri J Karthikeyan as Cost Auditor for the FY 2021- 22, for the audit of the cost accounts maintained by the Company in respect of both Bulk Drugs and Formulations. The cost audit report for the Financial Year 2021-2022 is under progress and will be filed with the Central Government within the stipulated timeline and the relevant Cost Audit reports for FY 2020-2021 were filed with the Central Government on January 05, 2022. Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Rules, 2014, the Company maintains the Cost Audit records in respect of its pharmaceutical business. The Board, at its meeting held on May 12, 2022, on the recommendation of the Audit Committee, has appointed Shri J Karthikeyan, Cost Accountant, Chennai (Membership No.29934 & Firm Reg. No.102695) to conduct the audit of the cost accounting records of the Company for financial year 2022-2023 at a remuneration of Rs.2,00,000/- (Rupees Two Lakhs Only) plus applicable taxes and reimbursement of out- of-pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification.

Other disclosures

No disclosure or reporting is made with respect to the following items, as there were no transactions during the year under review:

The issue of equity shares with differential rights as to dividend, voting or otherwise

The issue of shares to the employees of the Company under any scheme (sweat equity or stock options)

There is no change in the Share Capital structure during the year under review.

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

There was no revision in the financial statements

Acknowledgements

The Board is grateful and thankful to all the Banks, Financial Institutions both in public sector and in private sector who have fully supported your Companys initiatives. The Board is grateful to the Central and State Government and the Central Drugs Standard Control Organization and State Food Safety and Drugs Administration (State FDAs) for their support to the Companys business plans. The Board places on record their appreciation of the support provided by the Employees, customers, suppliers, service providers, medical fraternity and business partners.

For and on behalf of the Board of Directors of Orchid Pharma Limited

Place: Gurugram Manish Dhanuka Arun Kumar Dhanuka
Date : June 14,2022 Managing Director Non-Executive Director
DIN: 00238798 DIN: 00627425