Panchsheel Organics Ltd Directors Report.

To the Members of Panchsheel Organics Limited,

The Directors hereby present their 32ndAnnual Report on the business, operations and the state of affairs of the Company together with the audited financial statements for the year ended March 31, 2021:-

FINANCIAL PERFORMANCE (Amt in Rupees)

Particulars 2020-2021 2019-2020
Total Income 49,49,47,042 50,49,77,405
Total Expenditure 42,38,11,981 43,37,45,095
Profit Before Tax 7,29,34,443 7,31,13,628
Tax Expenses (2,28,77,722) (2,02,19,170)
Profit for the year 5,00,56,721 5,28,94,458
Other Comprehensive Income/ (Loss) 12,07,959 13,72,932.89
Total Comprehensive Income 5,12,66,681.04 5,42,67,390.87
Earnings Per Share (Rs.) (Face Value
of Re. 1/- each)
Basic 9.98 10.55
Diluted 9.98 10.55

EQUITY SHARE CAPITAL

During the year under review, there was no change in the Share Capital of the Company.

The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

The Company has not issued ESOP or sweat equity shares to Directors or employees.

DIVIDEND

During the year under review, the Company declared an interim dividend of Rs. 1.5 per Equity Share of the face value of Rs.10 each in its Board Meeting held on February 13, 2021 and paid the same to the Members of the Company during the month of March, 2021.

The Board at its meeting held on June 30, 2021, recommended a final dividend of Rs. 0.5 per Equity Share of the face value of Rs. 10 each, subject to the approval of the Members at the forthcoming Annual General Meeting ( AGM‘) of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have subsidiaries, joint ventures and associate Companies.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars ofloans given, Investments made, guarantees made and securities provided are reported in the financial statements.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis covering industry structure and developments, financial and operational performance of the Company, risks, concerns, opportunities, threats and outlook forms a part of this Report.

TRANSFER TO RESERVES

The Company has not proposed to transfer any amount to the General Reserve.

OUTLOOK

The pandemic will continue to affect healthcare provisions and pharmaceutical sales throughout 2021 due to emergence of new variants that can spread faster and vaccine availability challenges. While economic growth is forecasted to rebound in 2021, the after effect of the economic downturn during the pandemic will continue to impact the public spending on healthcare and drugs negatively throughout 2021. However, even in these challenging times, we strive for beating market growth. Panchsheel has established world-class formulation manufacturing facilities. These facilities leveraged state-of-the-art technologies, best practices and stringent regulatory compliances. These Centers of Excellence periodically reinforced their commitment to create products of the highest quality.

INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT

The Company has in place adequate internal financial controls with reference to the financial statements. The Company‘s internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with the applicable laws and regulations.

The Company has a robust Business Risk Management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company‘s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business. The Company has adopted a Risk Management Policy.

HUMAN RESOURCES

The key to the Company‘s agility and success is, of course, its highly dedicated people.

The focus of the Company is on attracting, engaging and developing talented people who share their vision and values. Therefore, the Company offers innovative programs, benefits and resources that address the diverse needs of employees, reward their efforts, help them build their best careers at Panchsheel.

CORPORATE GOVERNANCE

Corporate Governance Report and Certificate from the Statutory Auditors of the Company on compliance with the conditions of Corporate Governance pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, form a part of this Report.

PUBLIC DEPOSITS

The company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 ("the Act"). Accordingly, there is no disclosure or reporting required in respect of details relating to deposits.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134 of the Companies Act, 2013, the Board of Directors confirm that:-

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) such accounting policies have been selected 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 31st March, 2021 and the profits of the Company for the financial year ended on that date;

(iii) proper and sufficient care has been taken 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;

(iv) the annual accounts have been prepared on a going concern basis;

(v) internal financial controls have been laid down and the same are adequate and were operating effectively; and

(vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company, as on date of this Report, comprise of six Directors of which one is Managing Director, two are Executive Directors and three are Non-executive and Independent Directors. There are 2 Woman Directors on the Board.

i. Independent Directors

Mr. Shambhunath Chakravarti has attained the age of 75 years on November 13, 2020. Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires the Company to pass a special resolution seeking approval of the shareholders for continuation of directorship of Non-executive Director(s) in the Company on attaining the age of 75 years. The Company wishes to re-appoint him at the ensuing Annual General meeting, subject to receipt of approval from the shareholders.

Mr. Diwakar Mani Tripathi and Mrs. Darshana Shah continue to be the Independent Directors of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have given a declaration that they meet the criteria of independence as provided in the said Section and also in terms of the Listing Regulations. In the opinion of the Board, the Independent Directors are persons of integrity and possess relevant expertise, experience and proficiency as per the Act.

ii. Managing Director

Mr. Mahendra Turakhia (DIN:00006222) was re-appointed as the Managing Director of the Company at the AGM held on September 30, 2020, for a further period of 5 years effective from August 31, 2020.

iii. Retirement by rotation

In terms of Section 152 of the Companies Act, 2013, Mr. Kishor Turakhia(DIN: 00006236), retires by rotation at the forthcoming AGM and, being eligible, has offered himself for re-appointment. Brief resume of Mr. Kishor Turakhia, as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is covered in the notes of the Notice of 32ndAGM of the Company.

iv. Key Managerial Personnel

Mr. Amit Jain tendered his resignation as the Company Secretary and Compliance Officer with effect from April 24, 2021 and Ms. Nidhi Agarwal was appointed as the Company Secretary and Compliance Officer with effect from May 18, 2021.

BOARD MEETINGS HELD DURING THE YEAR

During the year under review, 5 Board Meetings were held on the following dates:-June 22, 2020; July 31, 2020; August 31, 2020; November 10, 2020 and February 13, 2021.

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

The Board of Directors have adopted a Familiarization Program for Independent Directors of the Company. The same is available on the website of the Company at https://panchsheelorganics.com.

Besides that, expositions are made to the Directors on various topics covering the pharmaceutical industry. Updates on relevant statutory changes and judicial pronouncements around industry related laws are regularly circulated to the directors.

Each director has complete access to any of the company‘s information and full freedom to interact with senior management.

AUDITORS

The Members at the 27th Annual General Meeting of the Company held on September 30, 2016, had appointed M/s. Jayesh R. Shah & Associates, Chartered Accountants (Firm Regn. No. 104182W), as the Statutory Auditors of the Company from the conclusion of the 27th Annual General Meeting till the conclusion of the 32nd Annual General Meeting of the Company to be held in the year 2021.

The Audit Committee and the Board at their meeting held on August 12, 2021 approved the re-appointment of M/s. Jayesh R. Shah & Associates, Chartered Accountants for a second term of five years i.e. from conclusion of the 32nd Annual General Meeting till the conclusion of 37thAnnual General Meeting.

The necessary resolution(s) seeking your approval for their appointment as the Statutory Auditors are included in the notice of the ensuing Annual General Meeting along with brief credentials and other necessary disclosures required under the Act and the Regulations.

SECRETARIAL AUDIT REPORT

M/s. GMS & Co., Practicing Company Secretaries, were appointed as the Secretarial Auditors of the Company to conduct Secretarial Audit for the financial year ended March 31, 2021. The Secretarial Audit Report is provided as ?Annexure I to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remarks or disclaimer.

COMMITTEES OF THE COMPANY

- NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of Mrs. Darshana Shah, Independent Director, Mr. Diwakar Tripathi, Independent Director and Mr. Shambhunath Chakravarti, Independent Director. The Company has formulated a Remuneration Policy pursuant to Section 178 of the Act and the Listing Regulations. The Policy is provided as ?Annexure II to this Report.

- AUDIT COMMITTEE

The Audit Committee comprises of Mr. Mahendra Turakhia, Managing Director, Mr. Diwakar Tripathi, Independent Director and Mrs. Darshana Shah, Independent Director.

Further details of the Audit Committee are provided in the Corporate Governance Report forming a part of this Report.

- CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In accordance with the provisions of Section 135 of the Companies Act, 2013 (the Act) and the Rules made thereunder, the Board of Directors of the Company have constituted the Corporate Social Responsibility (CSR) Committee. The CSR Committee comprises of Mr. Mahendra Turakhia, Managing Director; Mr. Kishor Turakhia, Executive Director and Mrs. Darshana Shah, Non-executive Director.

The report on CSR activities undertaken during the year is provided as ?Annexure III tothis Report. During the year ended March 31, 2021, the Committee met once.

PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES OF THE BOARD AND DIRECTORS

In compliance with the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation was carried out as under:

Based on recommendation of the Nomination and Remuneration Committee, a mechanism and criteria is set for evaluation of the Board, Committees of the Board and Directors, including Independent Directors. The Board and Board Committees evaluation is done by the Board through self-assessment and group discussions. Parameters for evaluation of the Board include structure and composition of the Board, frequency and number of meetings, devotion of time for important business matters-financials, monitoring Internal Controls/ Code of Conduct/Insider Trading Policy/Risk Management Framework and Emerging Risks/Governance and compliance issues, adequate access to information for effective decision making, strategic guidance to management through regular interactions and cohesiveness in the overall working that facilitates open discussion.

Parameters for evaluation of the Committee include structure and composition of the committees, adequacy of charter and working procedure, frequency of meetings, if the Committee is functioning as per the charter and if the Committee recommendations contribute effectively to the Board decision making.

Evaluation of the Directors is done by the Board (excluding the Director whose evaluation is being done). Parameters for evaluation of the Directors include skill set, knowledge, attendance, effective participation at Board/Committee Meetings, their contribution at the Meetings, leveraging on his/ her experience to provide the necessary insights/guidance on Board discussions and display of candor in expressing views even when they are in divergence with the rest of the Board, etc.

EMPLOYEES

The particulars of ratio of remuneration of each director to median remuneration of the employees of the Company for the financial year under report, percentage increase in remuneration of each Director and KMP, etc, more particularly described under Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in ?Annexure IV to this Report.

The statement showing particulars of employees as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in this report in the above stated annexure.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered by the Company during the financial year are on arm‘s length and in the ordinary course of business.

In accordance with the provisions of the Listing Regulations, the Company has formulated the Related Party Transactions Policy, which is available on the Company‘s website at www.panchsheelorganics.com.

The details of the Related Party Transactions are discussed in notes to the financial statements.

The Audit Committee has granted omnibus (ad hoc) approval for the Related Party Transactions as per the provisions and restrictions contained in the policy framed as per Regulation 23 of the SEBI (LODR) Regulations, 2015.

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

The required information under the provisions of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc, are provided as ?Annexure V and forms a part of this Report.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Entire staff is working in the most congenial manner and there were no occurrences of incidences of sexual harassment during the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy to report genuine concerns/ grievances. The Policy is available on the website of the Company at www.panchsheelorganics.com.

The Policy provides for adequate safeguards against victimization of persons who use such mechanism. The mechanism is overseen by the Audit Committee.

ANNUAL RETURN

Pursuant to Sections 92 and 134 of the Companies Act, 2013, the Annual Return as on March 31, 2021 in Form MGT-7 is available on the website of the Company at www.panchsheelorganics.com .

ACKNOWLEDGEMENTS

The Board of Directors acknowledge the valuable guidance and continued support and co-operation extended by the Securities and Exchange Board of India, Stock Exchanges, Ministry of Corporate Affairs, other Government Authorities, Banks, and other Stakeholders. Your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company.

For and on behalf of the Board of Directors
Panchsheel Organics Limited
Sd/-
Mahendra A. Turakhia
Managing Director
DIN: 00006222
Mumbai, August 12, 2021