Samrat Pharmachem Ltd Directors Report.

To,

The Members

Samrat Pharmachem Limited

The Directors are pleased to present the 29th Annual Report on the business and operations of the company and the financial accounts for the year ended 31 March, 2021.

FINANCIAL PERFORMANCE

Particulars 31 March 2021 31 March 2020
Rs. Rs.
Revenue from Operations 1,790,177,828 1,374,524,757
Other Income 4,628,134 5,721,509
Total Revenue 1,794,805,962 1,380,246,267
Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA) 91,311,135 72,015,965
Interest and Finance Charges 12,766,728 9,783,321
Profit/(Loss) before Depreciation, Exceptional Items and Tax 78,544,407 62,232,644
Depreciation 4,928,617 4,262,541
Exceptional Items 176,807 120,212
Profit/ (Loss) before Tax (PBT) 73,615,791 57,970,102
Provision for Tax/Tax expense 20,107,195 15,482,386
Profit/(Loss) after Tax (PAT) 53,508,596 42,487,716
Earnings Per Share (Basic EPS) 17.26 13.71

Other Financial Disclosures

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statement relates on the date of this Report.

During the financial year, there was no amount proposed to be transferred to the Reserves. Capital Expenditure during the year was at Rs. 272 Lakhs (Rs. 76 Lakhs in the previous year).

During the year, your Company did not accept any public deposits under Chapter V of the Companies Act, 2013.

Your Company manages cash and cash flow processes assiduously, involving all parts of the business. There was a net cash surplus of 2.12 lakhs (financialyear 2019-20: - 124.54 Lakhs), as on 31st March, 2021. The Companys low debt equity ratio provides ample scope for gearing the Balance Sheet, should the need arise. Foreign Exchange transactions are fully covered with strict limits placed on the amount of uncovered exposure, if any, at any point in time. There are no materially significant uncovered exchange rate risks in the context of Companys imports and exports. The Company accounts for mark-to-market gains or losses every quarter end, are in line with the requirements of Ind AS 21. The details of foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 are mentioned below:

Particulars FY 2020-21 FY 2019-20
Foreign exchange earning 136,618,822.73 69,278,295.00
Foreign exchange outgo 1,334,152,735.89 1,115,437,893.00

Covid-19 Pandemic

The COVID-19 Pandemic has affected the industrial environment throughout the financial year 2020-21. The volume of business affected by the pandemic vary in different industries. The tourism, airlines, transport, real estate & retail have been badly affected by COVID 19 pandemic other industries too have reciprocal effect. In case of pharmaceutical industry the effect was minimum. The company had taken all measures of safety for its workers & employees. The working/operation has remained smooth during the new normal. Since the company manufactures pharmaceutical intermediateries it was exempted for restrictions and was not much affected by lockdown & travel restrictions.

The Company further initiated safety measures by vaccinating its workers & employees to achieve safety level. So far maximum workers and employees have been vaccinated with 1st dose and some have completed both doses. The COVID 19 pandemic had no major impact on the sales of the company. The measures initiated by the company will help overcome the pandemic stituation and company expects normal operation growth & profitability in FY 2021-22.

OPERATIONS

Your company has performed extremely well during the year. In a highly competitive, uncertain and volatile business environment, your Company achieved a turnover of Rs. 17902 Lakhs as against Rs. 13745 Lakhs achieved last year - an increase of more than 30%.

DIVIDEND

In order to conserve the resources, your Directors do not recommend payment of Dividend for the financial year ended 31st March, 2021.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND

Your Company did not have any funds Iying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education & Protection Fund.

EXPORTS

During the year 2020-21 your companys export division registered FOB sales of Rs. 1366 Lacs from Rs. 693 Lacs achieved last year. Your Company has initiated several export promotion measures to increase exports. The products of your Company have been well accepted in the international market and the Company expects better export turnover in the coming years.

DEMATERIALISATION

The equity shares of the Company have been dematerialized by joining the depositories viz. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). The ISIN (International Securities Identification Number) No. allotted to the Company is INE103E01016.

LISTING OF SHARES

The Companys shares are listed on the BSE Ltd. It has paid the listing fees of the said exchange for the period upto 31st March, 2022. Your Company has not been delisted on this exchange for non-payment of listing fees.

INSURANCE

The assets of the company have been adequately insured against all possible risks with ICICI Lombard General Insurance Co Ltd

WEBSITE

Your companys website address is www.samratpharmachem.com. The performance of the Company is regularly updated and made available on this website. The website provides other vital information about the Company.

SAFETY, HEALTH & ENVIRONMENT (SHE) POLICY

As a responsible corporate citizen, the Company is fully aware of its responsibilities for protection of the environment and to provide its employees a safe and hazard free work place. The Company has adopted a Safety, Health & Environment Policy that applies to all employees and activities. The work culture encourages total involvement and commitment of the employees to the SHE Policy.

Some of the activities carried out during the year are as follows.

Safety:

• Providing necessary equipments and apparatus required for the safe operation of the manufacturing activities

• Observing the rules and regulations with regard to safety & precaution

• Consulting emergency control management team to monitor the safety of the plant

• Conducting regular safety audit

• Encouraging the workforce to use protective equipments and maintain cleanliness

• Conducting seminars to impart knowledge to employees on safe operations

• Organising safety week to create safety awareness

Health:

• Conducting medical health check up for all the employees of the Company periodically

• Conducting lecture meetings for providing guidance and counselling on matters of health, diet and exercise

• Conducting seminars to impart knowledge on meditation, yoga and anti-stress therapy

Environment:

• Ensuring smooth functioning of the effluent treatment plant with respect to air, water and solid waste.

• Updating the ETP plant to make it more nature friendly

• Proper monitoring of the pollution levels in and around the plants

• Planting trees in and around the factory

• Complying with the prescribed norms of pollution control

PERSONNEL

As on 31st March 2021, the total number of employees on the payroll of the company were 27. Industrial relations with employees at various levels continue to be cordial.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In pursuance to the provisions of the Companies Act, 2013, and Articles of Association of the company Mr. Rajesh Mehta, Director retires by rotation and being eligible has offered himself for re-appointment.

As per the provisions of the Act, the Independent Directors are not liable to retire by rotation. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and the Listing Regulations. The details of training and familiarization program and Annual Board Evaluation process for Directors have been provided in the Corporate Governance Report. The policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for key managerial personnel and other employees, forms part of the Corporate Governance Report of this Annual Report.

The company has received declaration from all the independent directors confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013.

The company has devised a policy for the performance evaluation of independent directors, Board committees and other individual directors which include criteria for performance evaluation of nonexecutive directors and executive directors. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

Your company has no subsidiaries, joint ventures or any associate companies during the year.

MEETING OF THE BOARD

During the year under review 6 Board Meetings were held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. For further details please refer to the Corporate Governance Report attached to this Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of the 3 Directors namely, Mr. Mahendra Pipalia (Chairman) and Mr. Samir Kothary and Ms. Renu Dharod as other members of the committee.

This committee recommends and reviews the unaudited & audit financial results. it also recommends the appointment/re-appointment of Statutory Auditor, Tax Auditor & GST Auditor. It also oversees whistle blower policy and makes recommendation to the Board from time to time. The committee also guides the Board for improving MIS systems, digitalising business operations and making all operations online & law compliant. The Board has accepted all recommendations made by the audit committee during the year.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of the 3 Directors namely, Mr. Samir Kothary (Chairman), and Mr. Mahendra Pipalia and Ms. Renu Dharod as other members of the committee.

This committee recommends and reviews the appointment and remuneration of Directors. It has adopted a policy which deals with the appointment and remuneration of directors and key managerial personnel. The adopted policy decides about the manner of selection of executive directors, key managerial personnel, and independent directors. The policy also decides about the criteria to be followed for recommending the remuneration of directors and key managerial personnel.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee comprises of the 3 Directors namely, Ms. Renu Dharod (Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as other members of the committee.

The committee reviews investor services, reviews work done by the share transfer agent including adherence to the service standards & resolve investor grievance.The committee also advises the company on various shareholders related matters.

RISK MANAGEMENT COMMITTEE

The Risk Management Committee comprises of the 3 Directors namely, Ms. Renu Dharod (Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as other members of the committee.

The risk management committee of the board oversees and reviews the risk management framework as well as the assessment of risks, their management and mitigation procedures. They also discuss with senior management regarding enterprise risk management (ERM) and management of cyber security risks. They also assess business risk, credit risk, disaster management and proper coverage of insurance of the fixed assets of the Company including their safety and security.

HEALTH, SAFETY AND SUSTAINABILITY COMMITTEE

The Health, Safety and Sustainability Committee comprises of the 3 Directors namely, Ms. Renu Dharod (Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as other members of the committee.

The Committee establishes with management long term environmental and social sustainability, health and safety goals and evaluate the Companys progress against those goals and report to the Board. It also considers and advises management of emerging environmental and social sustainability issues that may affect the business, performance or reputation of the Company and make recommendations, as appropriate, on how management can address such issues;

The committee monitors the companys risk management processes related to environmental and social sustainability, health and safety with particular attention to managing and minimising environmental risks and impacts. The Committee also advises the management on implementing, maintaining and improving environmental and social sustainability, health and safety strategies, implementation of which creates value consistent with long term preservation and enhancement of shareholder value.

It also reviews handling of incident reports, pollution control measures, results of investigations into material events, findings from environmental and social sustainability, health and safety audits and the action plans proposed pursuant to the findings.

CONSTITUTION OF CSR COMMITTEE

The Company has constituted CSR Committee which comprises of 6 Directors namely, Mr. Lalit Mehta, Mr. Rajesh Mehta, Mr. Megh Mehta, Mr. Mahendra Pipalia, Mr. Samir Kothary & Ms. Renu Dharod. The Chairperson of the Committee is Ms. Renu Dharod.

The Committee formulates, reviews and recommends to the Board, a CSR policy indicating the activities to be undertaken by the Company as specified in schedule VII of the Companies Act, 2013;

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. This Policy is available on the Companys website www.samratpharmachem.com

BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provision of Act and the Corporate Governance requirement as prescribed by Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations"). The performance of Board was evaluated by the Board of Directors after seeking inputs from all directors on the basis of criteria such as Board Composition & Structure, Effectiveness of Board Process, Information and functioning, etc.

In separate meeting of Independent directors performance of Non-Independent Directors, performance of the Board as whole and performance of Chairman was evaluated, taking into account the views of executive directors and non-executive directors.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (www.samratpharmachem.com). These policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

Policies adopted by the Company:

Name of the policy Web link
Archival Policy http://www.samratpharmachem.com/archival-policy/
Appointment of Independent Directors Policy https://www.samratpharmachem.com/independent-director- terms-and-conditions-of-appointment/
Related Party Transactions & its Materiality Policy https://www.samratpharmachem.com/policy-on-related- party-transactions-and-its-materiality/
Whistle-blower Policy https://www.samratpharmachem.com/whistleblower-policy/
Materiality of Events Policy https://www.samratpharmachem.com/materiality-of-events- policy/
Preservation of Documents Policy https://www.samratpharmachem.com/policy-on- preservation-of-documents/
Insider Trading Policy https://www.samratpharmachem.com/insider-trading-policy/
Privacy Policy https://www.samratpharmachem.com/privacy-policy/
Quality Policy https://www.samratpharmachem.com/quality-policy-2/
Safety, Health & Environment (SHE) Policy http://www.samratpharmachem.com/policies/she-policy/
Corporate Social Responsibility Policy http://www.samratpharmachem.com/policies/corporate- social-policy/
Fair Code For Insider Trading Policy https://www.samratpharmachem.com/fair-code-for-insider- trading/
Inquiry Leak of UPSI https://www.samratpharmachem.com/inquiry-leak-of-upsi/
Remuneration Policy https://www.samratpharmachem.com/remuneration-policy/
Code of Conduct for Prohibition of Insider Trading https://www.samratpharmachem.com/9740-2/
Legitimate Purposes Policy for sharing UPSI https://www.samratpharmachem.com/legitimate-purposes/

REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(( Rs.) lakh)
Sr. No. Name & Designation Remuneration Paid FY 2020-21 Remuneration Paid FY 2019-20 Increase in remuneration from previous year Ratio/Times per Median of employee remuneration
1 Mr. Lalit Mehta Chairman & Managing Director 1,800,000 1,800,000 0 8.82
2 Mr. Rajesh Mehta Executive Director 1,740,000 1,740,000 0 8.53
3 Mr. Megh Mehta Executive Director 900,000 900,000 0 4.41
4 Mr. Nishant Kankaria Company Secretary 198,800 0 0 0.82

For more information on the remuneration of Executive Directors & KMP, please refer to the Annexure II to the Directors Report

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that: -

1. That the preparation of accounts for the Financial Year ended 31st March 2021, the applicable accounting standards read with requirements set out under Schedule III of the Act, have been followed along-with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and the Profit or Loss of the Company for the year on that date;

3. That the Directors have taken proper and sufficient care 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;

4. That the Directors have prepared the accounts for the financial year ended 31st March 2021 on a going concern basis.

5. That the Directors have laid down internal financial control to be followed by the company and that such internal financial controls are adequate and are operating effectively; and

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by the management and the relevant board committees, including the audit committee the board is of the opinion that the companys internal financial controls were adequate and effective during the financial year 2020-21.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required under regulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this annual report.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is provided together with a Certificate from the Corporate Governance Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations. A Certificate of the CEO and CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed to the annual report.

SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

During the year under review, there were no cases reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has complied with the applicable provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder, including constitution of the Sexual Harassment Committee i.e. Internal Complaints Committee.:

No. of complaints filed during Financial Year 2020-21: Nil
No. of complaints disposed off during Financial Year 2020-21: NA
No. of complaints pending as on 31st March, 2021: NA

AUDITORS

M/s. Shah & Savla LLP, Chartered Accountants (FRN : 109364W/W100143) are to be re-appointed as Statutory Auditors of your Company, for the second term of five consecutive years. The Auditors have confirmed that they are not disqualified from being re-appointed as Auditors of the Company. The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Companies Act, 2013.

AUDITORS REPORT

The report of Statutory Auditors alongwith notes to schedules is a part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their report. Further there is no incident of fraud requiring reporting by Auditors under section 143(12) of the Companies Act, 2013.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal financial control procedures commensurate with its size and the nature of business.

The Company has appointed an Internal Auditor who periodically conducts audit of the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements. During the year under review, no material or serious observation has been received from the Statutory Auditors of the Company for inefficiency or inadequacy of such controls.

The Audit Committee of the Board of Directors approves the annual internal audit plan and periodically reviews the progress of audits as per approved audit plans.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the financial year 2020-21 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. A. A. Mulla & Associates a firm of company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. The Secretarial Audit Report submitted by the Secretarial Auditor is enclosed herewith as a part of this report and shown as Annexure III.

The Secretarial Audit Report contains qualification, reservation or adverse remark pertaining to non-compliance under SEBI (LODR) Regulations, 2015 which has been complied with & penalty imposed by BSE has been paid.

SECRETARIAL STANDARDS

The Company has complied with all the applicable provisions of Secretarial Standard-1 and Secretarial Standard- 2 as issued by the Institute of Company Secretaries of India.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

RELATED PARTY TRANSACTION/DISCLOSURE

There are no related party transactions made by the company during the year. None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2020-21 and hence does not form part of this report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2021 is available on the Companys website on https://www.samratpharmachem.com/wp-content /uploads/2021/08/Mar- 2021-MGT7.pdf

LOANS, GUARANTEES AND INVESTMENTS

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

PARTICULARS OF EMPLOYEES

Under the provision of 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), 1956 read with Companies (Particulars of Employees) Rules, 2014, the particulars of the employees as required to be mentioned in the Annual Report is not applicable to the company.

SHARES ISSUED UNDER EMPLOYEE STOCK OPTION SCHEME (ESOS)

No shares have been issued to the employees under Employee Stock Option Scheme (ESOS) during the year. PUBLIC DEPOSITS

The Company has not invited and accepted deposits from the public during the financial year ended 31st March 2021.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed pursuant to the provisions of Section 134 of the Act read with Rule 8 of the Companies (Accounts Rules), 2014, is given hereunder.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Company continues to explore & implement measures that will help in conservation and saving of energy.

Measures taken & benefits derived are as follows:

• Hot water coming from steam traps is recycled & used as boiler feed water.

• Using economiser effectively to pre-heat boiler feed water.

• Timely & routine preventive maintenance of boiler.

• Improvement in unit operations leading to reduction in processing time in reactor, centrifuge, drier & other equipments to minimize use of electricity.

• Hot water coming from steam traps is recycled & used as boiler feed water.

TECHNOLOGY ABSORPTION

The management has focused on productivity and quality improvement in order to optimize manufacturing costs. This has helped in achieving optimum manufacturing costs, improved quality of products and consequently enhanced customer satisfaction. The company uses indigenous technology.

DISCLOSURE REQUIREMENTS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation towards all associates including customers, suppliers, financial institutions, bankers, employees, consultants, shareholders and to all those who have extended their committed support to the progress of the Company.

By order of the Board of Directors
For Samrat Pharmachem Limited
Place : Mumbai
Date : 30 June 2021 Lalit Mehta
Chairman & Managing Director
DIN : 00216681