Sandu Pharmaceuticals Ltd Directors Report.

TO THE MEMBERS,

The Directors have pleasure in presenting before you the THIRTY SIX Annual Report of SANDU PHARMACEUTICALS LIMITED together with Audited Balance Sheet and Statement of Profit & Loss for the financial year ended 31st March, 2021.

1. FINANCIAL RESULTS:-

The Companys financial performance, for the year ended March 31, 2021 is summarized below:

(in Rs.)

Particulars 2020-2021 2019-2020
Revenue from Operations (Gross) 58,75,54,379 48,36,74,955
Other Income 19,34,373 45,27,481
Total Income 58,94,88,752 48,82,02,436
Total Expenses 57,26,79,875 47,89,89,171
Profit before exceptional items and tax 1,68,08,877 92,13,264
Exceptional - 22,956
Profit/Loss Before Tax 1,68,08,877 91,90,308
Tax Expenses
Less: Current Tax (55,71,336) (12,68,409)
Deferred Tax (2,95,254) (7,18,593)
Short/(excess) tax provision (17,388) -
Profit/(Loss) for the Period 1,09,24,899 72,03,306
Total Other Comprehensive Income (Net of Tax) 52,41,502 (27,25,787)
Total Comprehensive Income for the period (Net of Tax) 1,61,66,402 44,77,519
Earnings per equity shares 1.54 1.02

• REVIEW OF OPERATIONS

In the financial year 2020-21, the company achieved an Income from operations of Rs. 58,75,54,379 as compared to Rs. 48,36,74,955 in the previous year.

Profit before tax was Rs. 1,68,08,877 for the year ending 31st March, 2021 as compared to Profit of Rs. 91,90,308 in the previous year.

Profit after tax was Rs. 10924899 for the year ended 31st March, 2021 as compared to a Profit of Rs. 7203306 in the Previous Year

Total Comprehensive Income was Rs. 1,61,66,402 for the year ended 31st March, 2021 as compared to Rs. 44,77,519 in the previous year..

There were no material changes and commitments affecting the financial position of the Company from the end of the financial year till the date of the Directors Report.

2. SHARE CAPITAL:

(A) Authorised Capital:

The Authorised Share Capital of the Company is unchanged as on 31st March 2021 i.e Rs. 10,00,00,000 ( Ten Crores Only).

(B) Further Issue of Share Capital

The Company has issued Equity Warrants to be converted into Equity Shares at any time during the period of18 months from the date of allotment of Warrants convertibles into Equity Shares , in one or more tranches vide shareholders approval dated 30th September 2020.

The Company has issued 25,79,990 Nos of Equity Warrants to the allottees vide approval of Warrants and Share Allotment Committee dated 30th March 2021.Further First Tranche of Equity Warrants conversion into Equity Shares was approved by Warrants and Share Allotment Committee dated 31st March 2021 and 8,39,997 nos of Equity Warrants into Equity Shares were allotted.

The paid up Capital of the Company has increased from Rs. 70,81,000 nos of Equity Shares having face value of Rs. 10 each to Rs. 79,20,997 nos of Equity Shares having face value of Rs. 10 each but the authorised Share Capital of the Company is unchanged.

The Company has approached Bombay Stock Exchange for Listing approval to the extent of 8,39,997 nos of Equity Shares and awaiting for the Listing approval as on 14.08.2021.

3. DIVIDEND:

The board has recommend a dividend of 0.50 paise per Equity Share (5% to the Equity Share Capital of the Company having a face value of Rs. 10/- each on the Equity Shares 79,20,997 for the year ended on 31st March 2021) As per Finance Act 2020 Dividend is taxable in the hands of the Share holders.Dividend on Equity Shares is subject to the approval of the Shareholders at the ensuing Annual General Meeting.

The Dividend will be paid to all the Members entitled to dividend as on record date 23rd September 2021.

4. RISK MANAGEMENT:

The Board has laid down a clear Risk Management Policy to identify potential business risks and install effective mitigation processes to protect Companys assets and business Risks. Risk Management Policy and the details of this policy are available on the website of the Company under the web link https://www.sandu. in/image/catalog/info-pages/Announcement/policies/ Risk-Management-Policy.pdf

5. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate Internal Financial Control Systems, commensurate with the size, scale and complexity of its operations. The Management evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company on an ongoing basis.

6. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Whistle Blower. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Whistleblower Policy approved and adopted by the Board of Directors which can be accessed in our website https://www.sandu.in/ image/catalog/info-pages/Announcement/policies/ Whistle-Blower-Policy.pdf

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:-

Dr Mrs Shubhada P Sandu holding DIN:07148834 (Non Executive Director) retires by rotation and being eligible offer herself for Re appointment.

Shri. Bhaskar B. Sandu holding (DIN:02816792) Promoter/Non Executive Director/Chairman of the Company has expired on 21st May 2021. The Company has immensely benefited from his vision and leadership during his tenure, Shri Bhaskar G Sandu Passing away will be irreparable lost to the Company and Directors and Employees.

All independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

7.1 BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been given in the Corporate Governance Report. https://www.sandu.in/image/catalog/info-pages/ Announcement /policies /Familiarisation-Programme- for-Independent-Director.pdf

The Nomination and Remuneration Committee has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors. The criteria for Board Evaluation include inter alia, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Criteria for evaluation of individual Directors include aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the Management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board Members and motivating and providing guidance to the Managing Director/Executive Director.

Criteria for evaluation of the Committees of the Board include degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

7.2 NOMINATION AND REMUNERATION POLICY

The policy of the Company on Directors Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matter, as required under sub section (3) of Section 178 of the Companies Act, 2013 is available on our website https://www.sandu.in/ image/catalog/info-pages/Announcement/policies/ Nomination-and-Remuneration-Policy.pdf.

There has been no change in the policy sin ce the last fiscal year. We affirm that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

7.3 MEETINGS

During the year 6(Six) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act 2013.

7.4 AUDIT COMMITTEE

The details of the Composition of the Audit Committee are given in the Corporate Governance Report. During the year all the recommendations of the Audit Committee were accepted by the Board.

7.5 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 Obligation 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.sandu. in. The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

In addition to its Code of Conduct and Ethics, key policies that have been adopted by the Company are as follows:

Name of the Policy Brief Description Web link
Whistleblower Policy The Company has adopted the whistleblower mechanism for Directors and Employees to report concerns about unethical behaviour, actual or suspected frauds, or violation of the Companys code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during the fiscal 2016 https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Whistle-Blower-Policy.pdf
Nomination and Remuneration Policy This policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of a Director (Executive/Non Executive) and also the criteria for determining the remuneration of the Directors, Key Managerial Personnel and other employees. https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Nomination-and-Remuneration- Policy.pdf
Related Party Transaction Policy The policy regulates all transactions between the Company and its related parties https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Related Party Transaction Policy.pdf
Insider Trading Policy The Policy provides framework in dealing with securities of the Company https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Insider-Trading-Policy.pdf
Policy for determining Materiality of event or Information This Policy for Determination of Materiality of Events or Information is aimed at providing guidelines to the Management of Sandu Pharmaceuticals Limited, to determine the materiality of events or information, which could affect investment decisions and ensure timely and adequate dissemination of information to the Stock Exchange(s) (as hereinafter defined). https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Policy on Determining Materiality of Events Information.pdf
Archival Policy The Policy deals archival of corporate records of Sandu Pharmaceuticals Limited https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Archival Policy.pdf
Board Diversity Policy This policy aims to set out the approach to achieve diversity on the Board of Directors ("Board") of Sandu Pharmaceuticals Limited https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Policy-on-Board-Diversity.pdf
Risk Management Policy The Risk management policy of Sandu Pharmaceuticals Limited will enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. https://www.sandu.in/image/catalog/ info-pages/Announcement/policies/ Risk-Management-Policy.pdf

8. DIRECTORS RESPONSIBILITY STATEMENT:-

In accordance with the provisions of section 134(3) (c) read with section 134(5) of the Companies Act 2013, your Directors confirm that:

a) In the preparation of annual accounts, for the year ended 31st March 2021, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2021 and of the profit of the Company for the year ended on that date.

c) 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.

d) The annual accounts have been prepared on a ‘going concern basis.

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

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

9. CORPORATE SOCIAL RESPONSIBILTY POLICY:

Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.

10. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVE

The Company has not transferred any amount to Reserve and hence it is NIL.

11. RELATED PARTY TRANSACTIONS:

The Related Party Contracts entered into between Related Parties, does not fall under the ambit of Section 188(1) of the Act.

All the Related Party Transactions entered during the financial year were at arms length and in the ordinary course of business. In compliance with the provisions of the Companies Act 2013 and Regulation 23(2) of the SEBI Regulation 2015, all Related Party Transactions had been placed before the Audit Committee for prior approval. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 information pertaining to Related Parties are given in Form AOC-2 as Annexure I of this Report.

12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant material orders passed by the Regulators/Courts which could impact the going concern status of the Company and its future operations.

13. AUDITORS

13.1 STATUTORY AUDITORS

M/s Dileep & Prithvi, Statutory Auditor of the Company retires at the conclusion of this Annual General Meeting and has offered themselves to be reappointed as Statutory Auditor of the Company for the term of 5 years i.e from the conclusion of this Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2026 as recommended by Members of Audit Committee and Board of Directors.They have confirmed their eligibility to the effect that their appointment if made, would be within the prescribed limits under the Act and that they are not disqualified for Appointment.

13.2 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 Shri. Swapnil Dixit, Company Secretary in practice to undertake the Secretarial Audit of the Company for the Financial Year 2020-21. The Secretarial Audit report for the financial year 2020-21 is annexed herewith as "ANNEXURE B"

14. INTERNAL COMPLAINTS COMMITTEE

As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has constituted an Internal Complaints Committee for Redressal of complaints against sexual harassment and there were no complaints received during the financial year.

15. DISCLOSURE REQUIREMENTS

Your Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

• Management Discussion and Analysis is annexed as "ANNEXURE A" to the report

• Secretarial Audit Report as "ANNEXURE B".

• As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges, a separate section on the corporate governance is annexed as "Annexure - C"

• Auditors Certificate on Corporate Governance "Annexure -D"

• Certificate from Chief Financial Officer under Regulation 17(8) of SEBI (LODR) Regulation "Annexure -E",

• Declaration from Managing Director "Annexure F"

• Certificate of Non Disqualification of Director "Annexure G"

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

A) CONSERVATION OF ENERGY:

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

d) The required data with regard to conservation of energy as applicable to our company is furnished below:

Particulars For the year ended 31.03.2021 For the year ended 31.03.2020
1. ELECTRICITY
Purchased (units) 3,47,199 2,91,144
Total Amount 22,43,514 20,01,176
Rate/Units in 6 6.87
2. FUEL CONSUMED
Quantity- Furnace Oil 77230 57970
Diesel 3600 5600
Total amount- Furnace 23,30,228 7 3,78,100
Oil Diesel 2,71,356 18,39,97
Rate per Ltr- Furnace Rs. 30.17 Rs. 31.74
Oil Diesel Rs. 75.38 Rs. 67.42

B) TECHNOLOGY ABSORPTION:

Companys products are manufactured by using in-house know how as supplied by Sandu Brothers Private Limited and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

C) FOREIGN EXCHANGE EARNINGS AND OUT-GO:

During the period under review there was no foreign exchange earnings or out flow.

17. EXTRACT OF ANNUAL RETURN

As per the requirement of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management & Administrative) Rule, 2014 .The Annual Return in the prescribed form is available on the Companies Site www.sandu.in.

18. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The information required under section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors is annexed as "Annexure - H" to this report.

19. FIXED DEPOSITS:-

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014 during the financial year 2020-21.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:-

The Company has not given any loans or guarantees covered under the provisions of section 186 of the

Companies Act, 2013.The details of the Investments made by the Company are given in the notes to the financial statements.

21. PARTICULARS OF CONTRACT OR ARRANGMENTS WITH RELATED PARTY

The Company has Related Party Transaction with Sandu Brother Private Limited which is in ordinary course of Business and on arm Length Basis.

22. CODE OF CONDUCT:

The Board of Directors have approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code of Conduct for Directors has been posted on https://www. sandu. in/image/catalog/info-pages/Announcement/ policies/Code-of-Conduct-for-Directors. pdfand Code of Conduct for Senior Management https://www. sandu .in/image/catalog/info-pages/Announcement/ policies/Code-of-Conduct-for-Senior-Management. pdf

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the designated employees and personnel have confirmed compliance with the Code. The Declaration signed by the Managing Director pursuant to Regulation 26(3) read with Schedule V (Part D) of the SEBI (LODR) Regulation 2015 is published in this report.

23. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prohibition of Insider Trading with a view to regulate trading in securities by the Directors and Designated employees 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 employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board of Directors and the designated employees have confirmed compliance with the Code. Code of Conduct for Prohibition of Insider Trading is available on website of the Company under the web link https://www.sandu.in/image/catalog/info-pages/ Announcement/policies/Insider-Trading-Policy.pdf

24. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.

25. AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

Independent Audit Report and Secretarial Audit Report doesnt contain any qualification for the Financial Year 2020-21.

26. ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.

For Sandu Pharmaceuticals Limited By order of Board of Directors
Sd/- Sd/-
Shri Umesh B Sandu Shri Shashank B Sandu
DIN:01132141 DIN:00678098
Managing Director Director
Dated: 14.08.2021
Place: Mumbai