Sharda Cropchem Ltd Directors Report.

To,

The Members of

M/s. SHARDA CROPCHEM LIMITED

Your Directors have pleasure in presenting their report and audited financial statements (Standalone & Consolidated) for the year ended March 31, 2021.

FINANCIAL PERFORMANCE:

(Rs in Lakhs)

Particulars Standalone Consolidated
FY 2021 FY 2020 FY 2021 FY 2020
Revenue from operations (net) 203,261.95 161,606.55 239,560.77 200,301.82
Other income 8,092.02 13,032.14 4,593.56 4,311.27
Total Income 211,353.97 174,638.69 244,154.33 204,613.09
Expenses excluding interest, depreciation and amortisation expenses 165,647.41 139,873.67 195,887.67 172,222.16
Earnings before interest, tax, depreciation and amortization (EBITDA) 45,706.56 34,765.02 48,266.66 32,390.93
Depreciation and amortization expenses 17,039.34 13,707.89 17,044.00 13,712.28
Finance Cost 199.00 176.69 277.21 191.72
Profit before tax (PBT) 28,468.22 20,880.44 30,945.45 18,486.93
Tax Expense 7,488.88 1,691.91 8,023.68 2,017.76
Net Profit for the year 20,979.34 19,188.53 22,921.77 16,469.17
Other Comprehensive Income 6.10 (2.76) 37.64 835.36
Total Comprehensive Income 20,985.44 19,185.77 22,959.41 17,304.53

OPERATIONAL PERFORMANCE & FUTURE OUTLOOK:

Your Company achieved an all-time high in terms of performance of operating revenues and profitability despite of many challenges in pandemic situation. The Companys consolidated revenue from operations increased by 19.60% to Rs 239,560.77 Lakhs in FY 2021. This was possible on account of strong growth in Europe, NAFTA & LATAM regions due to growth in existing business and new business driven by new registrations. Your Company has 2,543 product registrations as at March 31, 2021.

In FY 2021, Gross margins were higher by 23.64 % and EBITDA margins were higher by 49.01 %. Depreciation and amortisation expense were higher due to high capital expenditure on intangible assets. PAT increased by 39.18% from last year. The Company declared a Consolidated PAT of Rs 22,921.77 Lakhs.

Your Company shall continue to focus on investment in product registrations in developed countries and high growth agricultural driven economies. Your Company strongly believes that the future of agrochemicals business lies in obtaining early product registrations due to the high entry barrier for new entrants.

CHANGE IN NATURE OF BUSINESS:

There is no change in the business activity of the Company. The Company continue to focus on agrochemicals & non-agrichemical business.

MATERIAL CHANGES OR COMMITMENTS:

There are no material changes or commitments that took place after the closure of FY 2020-21 till date which will have any material or significant impact on the financials of the Company.

TRANSFER TO RESERVE:

We do not propose to transfer any amount to general reserve on declaration of final dividend. The closing balance of the retained earnings of the company for FY-2021, after all appropriation was Rs 141,245.86 lakhs.

DIVIDEND:

During the year, the Board of Directors declared an Interim Dividend of Rs 2.00 per share in their meeting dated 28th October, 2020 on the paid-up equity shares of the Company. The Directors have recommended a final dividend of Rs 3.00 per share on the paid-up equity shares of the Company for the

Financial Year ended March 31, 2021 which, if approved at the ensuing Annual General Meeting of the Company, will be paid to all those equity shareholders of the Company whose names appear in the register of members as on the record date.

The aggregate gross amount of Interim Dividend Distributed is Rs 1,804.41 Lakhs subject to TDS as applicable.

The final dividend on equity shares, if approved by the members, would involve a cash outflow of Rs 2,706.61 Lakhs, subject to TDS as applicable. The total dividend on equity shares for FY 20-21 amounts to Rs 5.00 per share and would involve a total cash outflow of Rs 4,511.02 Lakhs, subject to TDS as applicable.

DIVIDEND DISTRIBUTIION POLICY:

The Dividend Distribution Policy, in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR") is available on the website of the Company viz.: http://www.shardacropchem.com/policy.html

SHARE CAPITAL:

The paid up equity share capital of the Company as on March 31, 2021 was Rs 9,022.05 Lakhs. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor buy-back nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

Further, during the year under review, Mrs. Sharda R. Bubna acquired 29,615 shares of the Company. None of the other promoters acquired / sold any shares of the Company.

DEPOSITS:

Your Company has not accepted/invited deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

SUBSIDIARY COMPANIES:

SUBSIDIARY COMPANIES - DIRECT

Axis Crop Science Private Limited

Axis Crop Science Private Limited is engaged in marketing and distribution of agrochemicals in India. For the year ended March 31, 2021, the Companys total income is Rs 989.86 Lakhs (Previous year: Rs 948.91 Lakhs) and Profit for the year is Rs 81.52 (Previous year: Rs 33.97 Lakhs).

Nihon Agro Service Kabushiki Kaisha

Nihon Agro Service Kabushiki Kaisha is engaged in the business of dealing in agrochemical products in Japan. For the year ended March 31, 2021, the Companys total income is Rs 6.01 lakhs (Previous year: NIL) and Profit for the year is Rs 3.11 Lakhs (Previous Year: Loss Rs 0.45 Lakhs).

Sharda Agrochem Dooel Skopje, Macedonia

Sharda Agrochem Dooel Skopje is engaged in the business of dealing in agrochemical products in Mecedonia. For the year ended December 31, 2020, the Companys total income is Nil (Previous Year: NIL) and Loss for the year is Rs 0.10 Lakhs (Previous Year: Rs 0.09 Lakhs).

Sharda Balkan Agrochemicals Limited, Greece

Sharda Balkan Agrochemicals Limited is engaged in the business of dealing in agrochemical products in Greece. For the year ended December 31, 2020, the Companys total income is Rs 12.73 Lakhs (Previous Year: Rs 9.86 Lakhs) and Profit for the year is Rs 0.23 (Previous Year: Loss Rs 0.43 Lakhs).

Sharda Costa Rica SA, Costa Rica

Sharda Costa Rica SA is engaged in the business of dealing in agrochemical products in Costa Rica. During the year, there were no operations in the Company.

Sharda Cropchem Espana, S.L., Spain

Sharda Cropchem Espana, S.L. is engaged in the business of distribution of agrochemical products in Spain and abroad. For the year ended March 31, 2021, the Companys total income is Rs 16,607.46 Lakhs (Previous year: Rs 10,756.96 Lakhs) and Profit for the year is Rs 297.30 Lakhs (Previous year: Rs 41.92 Lakhs).

Sharda Cropchem Israel Limited, Israel

Sharda Cropchem Israel Limited is engaged in the business of dealing in agrochemical products in Israel. During the year, there were no operations in the Company.

Sharda Cropchem Tunisia SARL, Tunisia

Sharda Cropchem Tunisia SARL is engaged in the business of dealing in agrochemical products in Tunisia. For the year ended December 31, 2020, the Companys total income is Rs 0.47 lakhs (Previous Year: Nil) and Profit for the year is Rs 0.28 Lakhs (Previous Year: Loss Rs 0.28 Lakhs).

Sharda De Guatemala, S.A., Guatemala

Sharda De Guatemala, S.A. is engaged in the business of dealing in agrochemical products in Guatemala. During the year, there were no operations in the Company.

Sharda Del Ecuador CIA. Ltda., Ecuador

Sharda Del Ecuador CIA. Ltda. is engaged in the business of dealing in agrochemical products in Ecuador. For the year ended December 31, 2020, Companys total income is Rs 32.46 Lakhs (Previous Year: Rs 27.15 Lakhs) and Profit for the year is NIL (Previous year: Rs NIL).

Sharda Do Brasil Comercio De Produtos Quimicos E Agroquimicos Ltda, Brazil

Sharda Do Brasil Comercio De Produtos Quimicos E Agroquimicos Ltda is engaged in the business of dealing in agrochemical products in Brazil. During the year ended December 31, 2020, the Companys total income is Rs 35.78 Lakhs (Previous Year: Rs 16.06 Lakhs) and Loss for the year is Rs 4.78 Lakhs (Previous year: Profit Rs 2.80 Lakhs).

Sharda Dominicana S.R.L., Dominican Republic

Sharda Dominicana S.R.L is engaged in the business of dealing in agrochemical products in Dominican Republic. During the year, there were no operations in the Company.

Sharda EL Salvador S. A. DE CV, EL Salvador

Sharda EL Salvador S.A. DE CV is engaged in the business of dealing in agrochemical products in EL Salvador. During the year, there were no operations in the Company.

Sharda Hellas Agrochemicals Limited, Greece

Sharda Hellas Agrochemicals Limited is engaged in the business of dealing in agrochemical products in Greece. For the year ended December 31, 2020, the Companys total income is Rs 4.40 Lakhs (Previous Year: Rs 4.43 Lakhs) and Profit for the year is Rs 1.01 Lakh (Previous year: NIL).

Sharda Hungary Kft, Hungary

Sharda Hungary Kft is engaged in the business of dealing in agrochemical products in Hungary and abroad. For the year ended March 31, 2021, the Companys total income is Rs 13,365.53 (Previous year: Rs 6,896.16 Lakhs) and Profit for the year is Rs 146.83 Lakhs (Previous year: Rs 149.32 Lakhs).

Sharda International DMCC, U.A.E.

Sharda International DMCC is engaged in trading in agrochemicals, conveyor belts and chemicals. For the year ended March 31, 2021, the Companys total income is Rs 34,070.71 Lakhs (Previous year: Rs 32,856.29 Lakhs) and Profit for the year is Rs 5,728.63 Lakhs (Previous year: Rs 5,378.30 Lakhs).

Sharda Italia SRL, Italy

Sharda Italia SRL is engaged in the business of dealing in agrochemical products in Italy. For the year ended March 31, 2021, the Companys total income is Rs 6,879.64 Lakhs (Previous Year: Rs 5,098.95 Lakhs) and Profit for the year is Rs 345.46 Lakhs (Previous year: Rs 322.84 Lakhs).

Sharda Peru SAC, Peru

Sharda Peru SAC is engaged in the business of dealing in agrochemical products in Peru. For the year ended December 31, 2020, the Companys total income is Rs 38.33 Lakhs (Previous Year: Rs 21.94 Lakhs) and Profit for the year is Rs 9.13 Lakhs (Previous year: Loss Rs 6.93 Lakhs).

Sharda Poland SP. ZO.O, Poland

Sharda Poland SP. ZO.O. is engaged in the business of distribution of agrochemical products in Poland and abroad. For the year ended March 31, 2021, the Companys total income is Rs 5,876.79 Lakhs (Previous year: Rs 8,228.98 Lakhs) and Profit for the year is Rs 187.32 Lakhs (Previous year: Rs 29.05 Lakhs).

Sharda Polska SP. ZO.O., Poland

Sharda Polska SP. ZO.O. is engaged in the business of dealing in agrochemical products in Poland. For the year ended December 31, 2020, the Companys total income is Rs 29.37 Lakhs (Previous Year: Nil) and Profit for the year is Rs 19.11 Lakhs (Previous year: Loss Rs 10.56 Lakhs).

Sharda Spain, S.L., Spain

Sharda Spain, S.L. is engaged in the business of dealing in agrochemical products in Spain. For the year ended December 31, 2020, the Companys total income is Nil (Previous Year: NIL) and Loss for the year is Rs 0.16 Lakhs (Previous year: Rs 0.24 Lakhs).

Sharda Swiss SARL, Switzerland

Sharda Swiss SARL is engaged in the business of dealing in agrochemical products in Switzerland. For the year ended December 31, 2020, the Companys total income is Rs 12.44 Lakhs (Previous Year: Rs 3.55 Lakhs) and Loss for the year is Rs 0.08 Lakhs (Previous year: was Rs 0.16 Lakhs).

Sharda Taiwan Limited, Taiwan

Sharda Taiwan Limited is engaged in the business of dealing in agrochemical products in Taiwan. For the year ended December 31, 2020, the Companys total income is NIL (Previous Year: NIL) and Loss for the year is Rs 0.75 Lakhs (Previous year: NIL)

Sharda Ukraine LLC, Ukraine

Sharda Ukraine LLC is engaged in the business of dealing in agrochemical products in Ukraine. For the year ended December 31, 2020, the Companys total income is Rs 10.8 Lakhs (Previous Year: Rs 8.44 Lakhs) and Profit for the year is Rs 0.01 Lakhs (Previous year: Rs 0.18 Lakhs).

Sharda USA LLC, USA

Sharda USA LLC is engaged in the business of dealing in agrochemical products in USA. For the year ended December 31, 2020, the Companys total income is Rs 2.01 Lakhs (Previous Year: NIL ) and Profit for the year is Rs 2.01 Lakhs (Previous year: NIL).

Shardacan Limited, Canada

Shardacan Limited is engaged in the business of dealing in agrochemical products in Canada. During the year, there were no operations in the Company.

Shardaserb DO.O., Serbia

Shardaserb DO.O. is engaged in the business of dealing in agrochemical products in Serbia. For the year ended December 31, 2020, the Companys total income is Rs 5.10 Lakhs (Previous Year: Rs 3.86 Lakhs) and Profit for the year is Rs 0.38 Lakhs (Previous year: Loss Rs 0.06 Lakhs).

Sharzam Limited, Zambia

Sharzam Limited is engaged in the business of dealing in agrochemical products in Zambia. During the year, there were no operations in the Company.

Sharda Private (Thailand) Limited, Thailand

Sharda Private (Thailand) Limited is engaged in the business of dealing in agrochemical products in Thailand. For the year ended March 31, 2021, the Companys total income is Rs 562.19 Lakhs (Previous Year: Rs 368.76 Lakhs) and Profit for the year is Rs 15.02 Lakhs (Previous year: Rs 4.43 Lakhs).

Sharda Maroc SARL, Morocco

Sharda Maroc SARL is engaged in the business of dealing in agrochemical products in Morocco. During the year, there were no operations in the Company.

SUBSIDIARY COMPANIES – INDIRECT

Euroazijski Pesticide d.o.o., Croatia

Euroazjiski Pesticidi d.o.o. is engaged in the business of dealing in agrochemical products in Croatia. For the year ended March 31, 2021, the Companys total income is Rs 122.14 Lakhs (Previous Year: Rs 51.93 Lakhs) and Profit for the year is Rs 8.52 Lakhs (Previous year: Rs 2.56 Lakhs).

Sharda Benelux BVBA, Belgium

Sharda Benelux BVBA is engaged in the business of dealing in agrochemical products in Belgium. For the year ended December 31, 2020, the Companys total income is Rs 3.42 Lakhs (Previous Year: NIL) and Profit for the year is Rs 3.03 Lakhs (Previous year: Loss Rs 0.51 Lakhs).

Sharda Bolivia SRL, Bolivia

Sharda Bolivia SRL is engaged in the business of dealing in agrochemical products in Bolivia. For the year ended 31st December, 2020, the Companys total income is Rs 85.96 Lakhs (Previous Year: 1.16 Lakhs) and Profit for the year is Rs 65.55 Lakhs (Previous year Loss: Rs 0.05 Lakhs).

Sharda Colombia S.A.S., Colombia

Sharda Colombia S.A.S. is engaged in the business of distribution of agrochemical products in Colombia and abroad. For the year ended March 31, 2021, the Companys total income is Rs 952.26 Lakhs (Previous year: Rs 362.06 Lakhs) and Profit for the year is Rs 35.04 Lakhs (Previous year: Rs 21.35 Lakhs).

Sharda De Mexico S. De Rl De CV, Mexico

Sharda De Mexico S. De Rl De CV is engaged in the business of distribution of agrochemical products in Mexico and abroad. For the year ended March 31, 2021, the Companys total income is Rs 8,640.36 Lakhs (Previous year: Rs 7,350.00 Lakhs) and Profit for the year of Rs 387.61 Lakhs (Previous year: Loss Rs 232.56 Lakhs).

Sharda Europe BVBA, Belgium

Sharda Europe BVBA is engaged in the business of dealing in agrochemical products in Belgium. For the year ended March 31, 2021, the Companys total income is Rs 5.21 Lakhs (Previous Year: Rs 2.24 Lakhs) and Profit for the year is Rs 2.71 Lakhs (Previous year: Rs 0.15 Lakhs).

Sharda International Africa (Pty) Limited, South Africa

Sharda International Africa (Pty) Limited is engaged in the business of dealing in agrochemical products in South Africa. For the year ended March 31, 2021, the Companys total income is Rs 1,709 Lakhs (Previous year: Rs 1,385.47 Lakhs) and Profit for the year is Rs 19.23 Lakhs (Previous year: Rs 60.57 Lakhs).

Sharda Malaysia SDN BHD, Malaysia

Sharda Malaysia SDN BHD is engaged in the business of dealing in agrochemical products in Malaysia. For the year ended 28 February, 2021, the Companys total income is Rs 3.24 Lakhs (Previous Year: Rs 1.40) and Profit for the year is Rs 0.96 Lakhs (Previous year: Rs 0.012 Lakhs). Company (Sharda Malaysia SDN BHD) has been dissolved/closed during the year.

Sharpar S.A., Paraguay

Sharpar S.A. is engaged in the business of dealing in agrochemical products in Paraguay. For the year ended December 31, 2020, the Companys total income is Rs 10.73 Lakhs (Previous Year: Rs 9.92 Lakhs) and Loss for the year is Rs 0.17 Lakhs (Previous year: Profit Rs 0.22 Lakhs).

Siddhivinayak International Limited, U.A.E.

Siddhivinayak International Limited is engaged in the business of trading and investments in U.A.E. and abroad. For the year ended March 31, 2021, the Companys total income is Rs 6.17 Lakhs (Previous Year: NIL) and Profit for the year is Rs 3.20 Lakhs (Previous year: Loss Rs 0.70 Lakhs).

Sharda Agrochem Limited, United Kingdom

Sharda Agrochem Limited is engaged in the business of dealing in agrochemical products in United Kingdom. This Company was formed on 11th February, 2021. The Company is yet to start its operations.

Sharda Impex Trading LLC, U.A.E

Sharda Impex Tradinc LLC is engaged in the business of dealing in agrochemical products in UAE and abroad. This Company was formed on 17th March, 2021. The Company is yet to start its operations.

MATERIAL SUBSIDIARY

The Company does not have any Material Indian Subsidiary as per the parameters laid down by the Companies Act, 2013. The Policy on Material Subsidiary is uploaded on the Companys website viz. http://www.shardacropchem.com/policy.html. The Policy was last updated on January 22, 2020.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into during the Financial Year were on an arms length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website viz. http://www.shardacropchem.com/policy.html. The Policy was last updated on January 22, 2020.

Since all the Related Party Transactions entered into by the Company are in the ordinary course of business and on arms length basis, Form AOC-2 is not applicable to the Company. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

DIRECTORS

As on March 31, 2021, the Company has Eight (8) Directors consisting of Four (4) Independent Directors, Three (3) Executive Directors and One (1) Chairman & Managing Director.

Appointment/Resignations from the Board of Directors

During the year, the Company re-appointed Mr. Ashish Bubna (DIN: 00945147) at Annual General Meeting dated 30th September, 2020, as he was retiring by rotation and being eligible, offered himself for re-appointment.

The Company has received declarations from the Independent Directors confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under Regulation 16(b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Regulations").

Woman Director

Your Companys Board is represented by two Woman Directors, Mrs. Sharda R. Bubna and Ms. Sonal Desai.

Directors Retiring by Rotation

In accordance with the provision of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Sharda R. Bubna (DIN: 00136760), Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-appointment.

The information of Directors seeking appointment/reappointment as required pursuant to Regulation 36(3) of the SEBI Regulations is provided in the notice covering the Annual General Meeting of the Company.

None of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such statutory authority.

Appointment/Resignation of the Key Managerial Personnel

During the year, Mr. Abhinav Agarwal resigned as Chief Financial Officer (CFO) of the Company w.e.f 9th January, 2021. The Board, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. Ashok Vashisht as Chief Financial Officer (CFO) of the Company w.e.f 27th January, 2021.

In terms of Section 2(51) and Section 203 of the Companies Act, the following are the KMPs of the Company as on 31st March, 2021:

Mr. Ramprakash V. Bubna, Chairman & Managing Director Mrs. Sharda R. Bubna, Whole-time Director

Mr. Ashish R. Bubna, Whole-time Director Mr. Manish R. Bubna, Whole-time Director Mr. Ashok Vashisht, Chief Financial Officer

Mr. Jetkin Gudhka, Company Secretary & Compliance Officer

Number of Meetings of the Board

Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. Due to business exigencies, certain business decisions are taken by the Board through circulation from time to time.

The Board met Four times during the FY 2020-21 viz, 24th June, 2020, 13th August, 2020, 28th October, 2020 and 25th January, 2021.

Detailed information on the meetings of the Board are included in the report on Corporate Governance, which forms part of this Annual Report.

COMMITTEES OF THE BOARD:

Your Company has several committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of laws and statutes applicable to the Company.

The Company has following Committees namely:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee.

5. Risk Management Committee.

The details with respect to the composition, powers, roles, terms of reference, etc. of the aforesaid committees are given in details in the "Report on Corporate Governance" of the Company which forms part of the Annual Report.

PERFORMANCE EVALUATION OF THE BOARD:

In compliance with the provisions of the Companies Act, 2013 and Regulation 25(4)(a) of the SEBI Regulation, annual performance evaluation of the Board and its Directors individually was carried out. Various parameters such as the Boards functioning, composition of its Board and Committees, execution and performance of specific duties, obligations and governance were considered for evaluation.

The performance evaluation of the Board as a whole was carried out by the Independent Directors. The performance evaluation of each Independent Director was also carried out by the Board.

There are no observations which are carried by any of the director on evaluation of Board. Further, in the view of previous years observation company has taken various steps as suggested by the directors.

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:

Pursuant to the SEBI regulations, the Company has worked out a Familiarization programme for the Independent Directors, with a view to familiarize them with their role, rights and responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc.

Through the Familiarization programme, the Company apprises the Independent Directors about the business model, corporate strategy, business plans and operations of the Company. Directors are also informed about the financial performance, annual budgets, internal control system, statutory compliances etc. They are also familiarized with Companys vision, core values, ethics and corporate governance practices.

Details of Familiarization programme of Independent Directors with the Company are available on the website of the Company http://www.shardacropchem.com/announcement.html

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As required by Section 135 of the Companies Act, 2013, the Company is required to spend Rs 5,80,14,736/- towards CSR activities out of which during the year, the Company has spent Rs 6,44,67,684/- towards CSR activities. The Company had spent more than the amount which is required to pay.

The CSR initiatives taken up by the Company are in the areas of promoting education, medical relief, eradicating hunger, empowerment of women, animal welfare, promotion of Olympic sports and rural development projects. These projects are in accordance with the activities included in Schedule VII of the Companies Act, 2013 and the Companys CSR Policy. The Annual Report on CSR activities forms a part of this Report as Annexure - 2

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an internal control system. All these controls were operating effectively during the year.

The Company has adequate internal financial controls. During the year, such controls were tested to find out any weaknesses in them. Services of professional consultants were obtained to remove such weaknesses and ensure robust internal financial controls and to ensure that these controls are operating effectively.

The Company is complying with all the applicable Indian Accounting Standards (Ind AS). The accounting records are maintained in accordance with generally accepted accounting principles in India. This ensures that the financial statements reflect true and fair financial position of the Company.

RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Policy wherein all material risks faced by the Company are identified and assessed. The Risk Management framework defines the risk management approach of the Company and includes collective identification of risks impacting the Companys business and documents their process of identification, mitigation and optimization of such risks. The Policy is uploaded on the website of the Company viz.: http://www.shardacropchem. com/policy.html.

NOMINATION & REMUNERATION POLICY:

The Companys Remuneration Policy has been disclosed in the Report on Corporate Governance which forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS AND BUSINESS RESPONSIBILITY:

The Management Discussion and Analysis Report & the Business Responsibility Report for the year under review as stipulated under SEBI Regulations, forms part of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy to report genuine concerns or grievances and to deal with instances of fraud and mismanagement. The Whistle blower Policy has been posted on the Companys website at http://www. shardacropchem.com/policy.html. The Policy was last updated on January 22, 2020.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITOON AND REDRESSAL) ACT, 2013:

The Company has in place a policy for Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Preservation, Prohibition & Redressal) Act, 2013. Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. This Policy has been uploaded on the website of the Company at http://www.shardacropchem.com/policy.html. The Policy was last updated on January 22, 2020. The Company has not received any complaint of sexual harassment during the Financial Year 2020-2021.

AUDITORS:

a) Statutory Auditors:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Associates, (Firm No. 116231W/W-100024) Chartered Accountants, were appointed as the Statutory Auditor of the Company to hold office from the Conclusion of the 15th Annual General Meeting until the conclusion of the 20th Annual General Meeting of the Company.

The Statutory Auditor have submitted a certificate stating that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act.

The Audit Report forms a part of the Annual Report and the report does not contain any qualification, reservation, adverse remark or disclaimer.

b) Internal Auditor:

Pursuant to the provisions of Section 138 of the Companies Act and the Companies (Accounts) Rules, 2014, on the recommendation of the Audit Committee, M/s. Bathiya & Associates LLP, were appointed by the Board of Directors to conduct internal audit reviews of the Company.

c) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. KJB & CO LLP, a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for the Financial Year 2020-21. The Secretarial Audit Report is annexed to this report as Annexure – 3.

Reply to the qualification in Secretarial Report:

While informing the Stock Exchange on October 19, 2020 that Board Meeting will be held on October 28, 2020, we Inadvertently, missed to communicate that the Board will also consider distribution of Interim Dividend, if any.

Later on, we informed the Stock Exchange about the same on October 27, 2020.

This was considered as non – compliance by SE under Regulation 29(2) / 29(3) of SEBI (LODR) Regulations, 2015 and they have imposed a fine of Rs 10,000/- each and the same was paid to BSE Limited & NSE Limited respectively.

CORPORATE GOVERNANCE:

Your Company is committed to achieve the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set by the Regulators. A separate section on Corporate Governance practices followed by the Company as stipulated under Regulation 43(3) and Schedule V of the SEBI Regulations, together with a certificate from M/s. KJB & CO LLP, a firm of Company Secretaries in Practice, confirming Compliance to the conditions as stated in Regulation 34(3) of the SEBI Regulations forms part of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

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

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company prepared in accordance with the Indian Accounting Standards ("Ind AS"), applicable Accounting Standards notified under Section 133 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, as amended from time to time, forms part of this Annual Report.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92 and 134(3) of the Companies Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is attached as Annexure - 4.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

No significant and material orders have been passed by the Regulators or Courts or Tribunals which will impact the going concern status of the Company and its future operations.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company are given in Annexure - 5 and Annexure - 6 hereunder and forms part of this report.

DIRECTORS RESPONSIBILITY STATEMENT:

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, including audit of the internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board if of the opinion that the Companys internal financial controls were adequate and effective during FY 2020-2021.

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Companies Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that there are no material departures;

b. They have selected such accounting policies and applied them consistently and made judgements 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 and of the profit of the Company for that period;

c. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. They have prepared the annual accounts on a going concern basis;

e. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATUTORY DISCLOSURES:

1) Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is as follows:

A. Conservation of Energy, Technology Absorption

The provisions of Section 134(1)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company.

B. Foreign Exchange Earnings and Outgo

The foreign exchange earnings and outgo during the year together with comparable figures of the previous year are as stated below:

(Rs in Lakhs)
Particulars Year ended Year ended
31-Mar-21 31-Mar-20
Foreign Exchange 209,043.37 1,71,895.09
Earnings
Foreign Exchange 145,310.40 1,18,537.88
Outgo

2) Maintenance of Cost Record:

Pursuant to Section 148 of the Companies Act, the Company has maintained the Cost Accounting Records for FY 2020-21. The Company has received Cost Compliance Certificate from M/s. N. Ritesh & Associates, Cost Accountants.

3) Secretarial Standards:

The Company has complied with the applicable Secretarial Standards as amended from time to time.

4) Fraud Reporting:

During the year under review, no fraud has been reported by Auditors under sub-section 12 of Section 143 of the Companies Act, 2013.

5) MO A & AOA:

During the year under review, there is no change in the Memorandum of Association and Articles of Association of the Company.

6) Credit Rating:

During the year under review, CRISIL has given the credit rating of "CRISIL A1+" on the short-term banking facilities of the Company.

LISTING OF THE COMPANYS EQUITY SHARES:

The equity shares of your Company are listed on The BSE Ltd. and The National Stock Exchange of India Ltd. There is no default in paying annual listing fees.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to express deep and sincere gratitude to all the stakeholders of the Company for their confidence and patronage.

Your Directors wish to place on record their appreciation for the support and contribution made by the employees at all levels and also wish to thank all its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in your Company.

For and on behalf of Board of Directors

RAMPRAKASH V. BUBNA
PLACE : MUMBAI CHAIRMAN & MANAGING DIRECTOR
DATE : MAY 26, 2021 (DIN: 00136568)