Sakar Healthcare Ltd Directors Report.

The Members,

Sakar Healthcare Limited,

Your Directors have pleasure in presenting the 17TH ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2020-21 ended 31st March, 2021.

1. FINANCIAL RESULTS AND OPERATIONS:

(Rs. in lakh)

Particulars 2020-21 2019-20
Sales and other Income 9591.46 8499.71
Profit before Interest and Depreciation 2378.30 2155.93
Less: Interest 248.25 225.26
Profit before Depreciation 2130.05 1930.67
Less: Depreciation 805.83 707.98
Profit before Taxation 1324.22 1222.69
Less: Provision for Taxation - Current 317.75 251.00
Less/ (Add): Provision for Taxation - Deferred (62.73) (2.74)
Less: Provision for Taxation - Previous year - 12.15
Profit for the year 1069.20 962.28

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1st April, 2021 and date of this report.

During the year under review, the Company achieved turnover of Rs.9591.46lakh compared to Rs. 8499.71 lakh during 2019-20. The Company earned profit before interest, depreciation and tax of Rs. 2378.30 lakh during 2020-21 compared to Rs. 2155.93 lakh during 2019-20. After providing for interest, depreciation and taxes, the net profit for the year under review stood at Rs. 1069.20 lakh as compared to Rs. 962.28 lakh during 2019-20.

2. DIVIDEND:

With view to conserve the financial resources for the future requirement of the Company, the Board of Directors has not recommended any dividend for the year.

3. AWARDS AND RECOGNITIONS:

3.1 Winner of Best Pharmaceutical Products Manufacturer – 2020, India, by AI Global, Staffordshire, UK and awarded with Certificate and a Bespoke Crustal Trophy.

3.2 The Company has been honoured under BS 10 Leading Players in Healthcare Industry, 2019 by Business Sight Magazine.

4. COVID-19 PANDEMIC:

Global Pandemic, Covid – 19 has started to surface significantly by mid-March 2020 forcing government to take decisive rules including lockdown. Pharmaceutical Industry has got categorized under Essential Services and hence has been exempted from day – 1 of lockdown i.e. 25thMarch, 2020. Therefore the manufacturing plant functioning and business operations could be maintained all through this phase of back to back lockdowns, though there were few disturbances due to restricted manpower and material movement due to logistic irregularities and increased freight charges due to limited scope. The plant operations were smooth adhering to proper screening and social distancing once the directive has been delivered by the government health authorities. The Company has adopted well to this changing business environment and as there has been no restrictions in business due to categorization under Essential Services. The Company could continue exports to multiple countries following government guidelines.

5. ALLOTMENT OF EQUITY SHARES ON PREFERENTIAL BASIS TO PROMOTER & NON-PROMOTER:

The Company by obtaining necessary approval of members (through postal ballot process) has allotted 6,57,000 Equity Shares of Rs. 10/- each at premium of Rs. 110/- per Equity Shares on 27th February, 2021 to Promoter Mr. Sanjay S. Shah on Preferential Basis after complying provisions and guidelines under the Companies Act, 2013 and SEBI Regulations upon conversion of his Non Interest bearing unsecured Loan of Rs. Rs. 7,88,40,000/-. The Company also obtained approval of NSE for Listing & Trading of the said Equity Shares in due course of time. As required under Regulation 32(7A) of SEBI LODR Regulations, 2015, disclosure is herewith submitted that the object/purpose of the preferential issue is fully achieved by complying the conditions of the Banker by way of conversion of the non-interest bearing unsecured loans of Rs. 7,88,40,000/- of Promoter into Equity Shares of the Company.

Further, The Company by obtaining necessary approval of members (at the Extra Ordinary General Meeting) has allotted 15,00,000 Equity Shares of Rs. 10/- each at premium of Rs. 89/- per Equity Shares on 17thApril, 2021 to Cobra India (Mauritius) Limited, Non-Promoter on Preferential Basis after complying provisions and guidelines under the Companies Act, 2013 and SEBI Regulations. The Company also obtained approval of NSE for Listing & Trading of the said Equity Shares in due course of time. The disclosure as required under Regulation 32(7A) of SEBI LODR Regulations, 2015, relating to utilization of funds would form part of the Annual Report for the year 2021-22 as the said allotment is made in the year 2021-22.

Post allotment of Equity Shares as aforesaid, the paid up Capital of the Company stood at Rs. 17.12 Crores divided into 1,71,18,000 Equity Shares of Rs.10/- each as on date of this report.

6. SHARE CAPITAL:

The Company by obtaining necessary approval of members (through postal ballot process) has increased its Authorised Share Capital from Rs.15,00,00,000/- to Rs. 20,00,00,000/- (Rupees Twenty Crores only) divided into 2,00,00,000 (Two Crore) Equity Shares of Rs. 10/- (Rupees Ten only) each by creation of additional 50,00,000 (Fifty Lakh) Equity Shares of Rs. 10/- each ranking pari-passu in all respect with the existing Equity Shares of the Companyand has complied with the necessary formalities in this regard.

The paid up Share Capital of the Company as on 31st March, 2021 was Rs. 15.62 Crore. As on 31st March, 2021, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity and none of the Directors of the Company hold any convertible instruments.

7. RESERVES:

The Company does not propose to transfer any amount to General Reserves.

8. DEMATERIALISATION OF EQUITY SHARES:

All the Equity Shares of the Company are in dematerialised form with either of the depository viz. NSDL and CDSL. The ISIN allotted to the Company is INE732S01012.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL:

9.1 Mr. Shailesh B. Patel and Mr. Prashant C. Srivastav, at the 16th AGM held on 24th September, 2020, have been re-appointed as Independent Directors of the Company for a second consecutive term of 5 years from the conclusion of 16th AGM up to the conclusion of the 21st AGM.

9.2 One of your Directors viz. Ms. Rita S. Shah retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers herself for reappointment.

9.3 Mr. Hardik P. Mehta has resigned as an Independent Director of the Companyw.e.f. 28thSeptember, 2020. 9.4 The Board, based on the recommendations of the Nomination and Remuneration Committee, had appointed Mr. Hemendra C. Shah as Independent Director w.e.f. 28th September, 2020 to hold the office upto the date of forthcoming 17th Annual General Meeting (AGM). It is proposed to appoint Mr. Hemendra C. Shah as an Independent Directors, not liable to retire by rotation, for a term of five consecutive years w.e.f. 28th September, 2020 to 27th September, 2025.

9.5 Based on the recommendations of the Nomination and Remuneration Committee, it is proposed to re-appoint Mr. Sanjay S. Shah as Managing Director, Mr. Aarsh S. Shahas Joint Managing Director and Ms. Rita S. Shah as Whole Time Director of the Company for a period of 3 years from 1st December, 2021 to 30th November, 2024.

9.6 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act. The Independent Director shall enroll his / her name in the Databank, being maintained by Indian Institute of Corporate Affairs to qualify as an Independent Director. The enrollment of Independent Directors has been completed and they have furnished the declaration affirming their compliance to the Board with the provisions contained under sub rule 1 & 2 of Rule 6 of Companies (Appointment & Qualification of Directors) Rules.

9.7 Brief profile of the Director who is being appointed or re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings is provided in the notice for the forthcoming AGM of the Company.

9.8 The Board of Directors duly met 14 times during the financial year under review.

9.9 Ms. Hema Advani resigned as Company Secretary & Compliance Officer of the Company w.e.f. 29th October, 2020. Mr. Bharat Soni has been appointed as Company Secretary & Compliance Officer of the Company w.e.f. 29th October, 2020. 9.10 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.11 DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had 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 31st March, 2021 being end of the financial year 2020-21and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for 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;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

(v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

11. MANAGERIAL REMUNERATION:

Sr. No. Name of the Director & Designation Remuneration for the year 2020-21 (Rs. In Lakh) % increase over last year Parameters Median of Employees Remuneration Ratio Commission received from Holding/ Subsidiary
1 Sanjay S. Shah Managing Director 22.75 - Higher responsibility and time involvement 360000 15.82 times -
2 Rita S. Shah Wholetime Director 6.50 - N.A. 360000 55.38 times -
3 Aarsh S. Shah Joint Managing Director 22.75 - Higher responsibility and time involvement 360000 15.82 times -

The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. The Relationship of remuneration to performance is clear and meets appropriate performance benchmarks. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policyis available on the Company’s website www.sakarhealthcare.com

12. KEY MANAGERIAL PERSONNEL:

12.1 % INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

Sr. No. Name of the Director & KMP Designation Percentage (%) Increase (If any)
1. Sanjay S. Shah Managing Director -
2. Rita S. Shah Wholetime Director -
3. Aarsh S. Shah Joint Managing Director -
4. Jhonny G. Kudilil CFO 3.09
5. Hema Advani* Company Secretary -
6. Bharat Soni# Company Secretary -

* Resigned w.e.f. 29th October, 2020 # Appointed w.e.f. 29th October, 2020

12.2 COMPARISON BETWEEN REMUNERATION OF KMP & PERFORMANCE OF THE COMPANY:

As per the Remuneration Policy and based on the Recommendation of Nomination & Remuneration Committee the Relationship of remuneration to KMP & performance of Company is clear and meets appropriate performance benchmarks.

13. PERSONNEL AND H. R. D.:

13.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H.R.D.

The relationship between average increase in remuneration and Company’s performance is as The number of Employees of the Company is 247 per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. PARTICULARS OF LOANS, GUARANTEES, INVESTMENT& SECURITIES PROVIDED:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Auditors’ Report.

15. RELATED PARTY TRANSACTIONAND DETAILS OF LOANS, GUARANTEES, INVESTMENT& SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Auditors’ Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure- A.

17. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,Report on Corporate Governance, Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.

18. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure – C.

There are no remarks / qualification in the Secretarial Audit Report, hence no explanation has been offered.

19. WEB ADDRESS OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the draft Annual Return as on 31st March, 2021 is available on the Company’s website www.sakarhealthcare.com.

20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’ RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate Governance Report.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per provisions of 135 of the Companies Act, 2013 and Rules made thereunder, the Company has constituted a CSR Committee of Directors consisting of Mr. Sanjay S. Shah, Chairman, Mr. Aarsh S. Shah and Mr. Prashant C. Srivastav, as members and has laid down a CSR policy.

Some of the core areas identified by the Committee are Education, Health, Environment, women empowerment, Animal Welfare, Hungeretc. The Company spent Rs. 28.85 lakh towards CSR for the year 2020-21.

21.1 ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY:

As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014 the Annual Report on Corporate Social Activities has been attached herewith as Annexure –D.

22. GENERAL:

22.1 AUDITORS:

STATUTORY AUDITORS:

At the 16th Annual General Meeting held on 24th September, 2020 M/s. A. L. Thakkar & Co., Chartered Accountants, Ahmedabad were appointed as Statutory Auditors of the Company to hold office till the conclusion of 18th Annual General Meeting to be held in the year 2022.

The remarks of Auditors are self explanatory and have been explained in Notes on Accounts.

COST AUDITORS:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company has been carrying out audit of cost records every year.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dalwadi& Associates, Cost Accountants, (Firm Registration Number 000338) as Cost Auditor to audit the cost accounts of the Company for the financial year 2021-22.

As required under the Companies Act, 2013, a resolution seeking Shareholders’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

22.2 INSURANCE:

The Company’s properties including building, plant and machinery, stocks, stores etc. continue to be adequately insured against risks such as fire, riot, strike, civil commotion, malicious damages, machinery breakdown etc.

22.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there were no overdue deposits.

22.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.

22.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Associate / JVs.

The Company has a Subsidiary namely Sakar Oncology Private Limited. Further, a statement containing the salient feature of the financial statement of Subsidiary company under the first proviso to sub-section (3) of section 129 is appended as Annexure - E. Apart from this, the Company does not have any Subsidiary.

22.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

22.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

22.8 ENVIRONMENT AND SAFETY:

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

22.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

22.10 GRATUITY:

The Company has made necessary provisions for the payment of Gratuity.

22.11 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

22.12 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

23. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI, your Directors have framed and approved Insider Trading Policy for the Company i.e. ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information’ and ‘Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons/Insiders’. The Policy is available on the company’s website.

24. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

25. DISCLOSURES:

The Company has not entered into any transaction of material nature with the Promoters, the Directors or the Management that may have any potential conflict with the interest of the Company.

26. FINANCE:

26.1 The Company has availed financial assistance in form of Term Loans and Working Capital from State Bank of India.

26.2 The Company’s Income tax Assessment has been completed upto the Assessment Year 2019-20.

27. ACKNOWLEDGEMENT:

Your Directors express their sincere gratitude for the assistance and co operation extended by Banks, Government Authorities, Shareholders, Suppliers and Customers.

Your Directors also wish to place on record their appreciation of the contribution made by the employees at their levels towards achievements of the Company’s goals.

Registered Office For and on behalf of the Board,
Block No. 10/13, Village: Changodar, Sanjay S. Shah Aarsh S. Shah
Sarkhej- Bavla Highway, Chairman & Managing Director Jt. Managing Director
Tal: Sanand, Dist: Ahmedabad -382 213 DIN:01515296 DIN: 05294294
Date : 26th July, 2021