SMS Pharmaceuticals Ltd Directors Report.

To

The Members of

SMS Pharmaceuticals Limited.

Your Directors are pleased to present the 33rd Annual Report of SMS Pharmaceuticals Limited ("The Company”) along with the audited financial statements for the financial year ended 31st March, 2021. The Consolidated performance of the Company has been referred to wherever required.

FINANCIAL SUMMARY

(INR in Lakhs)

Particulars

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Gross Sales 58,190.01 43,307.54 58,190.01 43,307.54
Net Sales 53,764.44 39,409.09 53,764.44 39,409.09
Income from Services 2,317.29 1,325.44 2,317.29 1,325.44
Other Operating Income 236.02 460.16 236.02 460.16
Net Revenue from Operations 56,317.75 41,194.69 56,317.75 41,194.69
Other Income 345.29 511.34 345.29 511.34
EBIDTA 12,456.39 8,503.34 12,456.39 8,503.34
Finance Charges 1,116.25 1,221.14 1,116.25 1,221.14
Depreciation 2,228.16 2,206.64 2,228.16 2,206.64
Profit Before Tax 9,111.98 5,075.56 9,111.98 5,075.56
Taxation 3,015.52 1,806.71 3,015.52 1,806.71
Profit After Tax 6,096.46 3,268.85 6,252.69 3,157.37
Earnings per share - Basic/Diluted(Rs) 7.20 3.86 7.39 3.73

STATE OF COMPANY AFFAIRS

In Financial & Production terms

During the year 2020-21 the Company had achieved production of 611.39 M.T. of APIs and their Intermediates in comparison with 471.00 M.T. for the FY 2019-20 The net sales of the Company for the year 2020-21 have reached 53,764.44 lakhs as against 39,409.09 lakhs for the year 2019-20. The Company has achieved an EPS of Rs. 7.20 in the FY 2020-21 as against Rs. 3.86 in the year 2019-20.

Subsidiaries and Associates

Your Company is having one associate company i.e., “VKT Pharma Private Limited”. Your Company is holding 42.62% equity shares in the said associate company and the share of Profit for your company for the financial year 2020-21 was Rs. 156.23 lakhs.

During the reporting period your Company has incorporated

Joint Venture (JV) in Spain with nomenclature of “CHEMO SMS ENTERPRISES SL” in the ratio of 55:45 with a share of 45% to be contributed by your Company. The main objective of the JV has been to develop the products and manufacturing them at our Companys manufacturing facility. The technical ownership of the JV products will be the property of the JV Company which includes Drug Mater Filings (DMFs) of the Products under JV. There were no transactions during the reporting period, however, all the JV product sales were routed directly from your company to the end customers during the reporting period as per JV manufacturing arrangement

The consolidated financial statements had been prepared as per Accounting Standard (AS) 23 “Accounting for Investment in Associates in Consolidated Financial Statements” specified under Section 133 of Companies Act, 2013 for considering the financials of Associate Company. The required form, as per the provisions of the Sec. 129(3) read with rule 5 of Companies (Accounts) Rules, 2014 i.e., Form AOC-I forms part of the Report as Annexure 1.

CHANGE IN NATURE OF BUSINESS

As per the requirements of Rule 8 (5) (ii) of Companies (Accounts) Rules, 2014, your Board of Directors specify that, there is no significant change in the nature of business of the Company during the last financial year.

COVID - 19

Your company supported employees and their families, society and Government bodies during these tough times. A thorough thermal scanning and sanitization protocol was introduced at all the plants and offices. The system of monitoring employees for signs & symptoms through voluntary disclosure is put in place. Work from home was provided wherever possible to maintain lean staff in the work area. Also provided PPEs to frontline workers in the police department and medical colleges who are treating COVID-19 patients and containment centers. Your Company is committed to support the Government and other authorities to extend its helping hand in the fight against COVID-19 pandemic.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations), the Management Discussion and Analysis is presented in a separate section forming part of this Annual Report. As required under the provisions of the Listing Regulations, the Audit Committee of the Company has reviewed the Management Discussion and Analysis report of the Company for the year ended 31st March, 2021. A detailed report on ‘Management Discussion and Analysis forms part of this report as Annexure - 2.

SHARE CAPITAL

During the year under review, the Company had neither issued fresh equity/sweat equity shares nor any debentures, Employees Stock Option Scheme or any share based employee benefits. A report on the same viz. ‘Equity Buildup Report forms part of this report as Annexure - 3.

Listing of shares

Equity shares of the Company are listed in National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) with effect from 28th February, 2007. [Listing fees has been paid for the year 2021-22 to both the Exchanges].

Material Changes and Commitments, affecting the financial position of the Company:

There are no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

TRANSFER TO RESERVES

Your Company has transferred an amount of Rs. 1,000 Lakhs (previous year Rs.1,000 Lakhs) to General Reserve out of the amount available for appropriations.

DIVIDEND

Your Directors have pleasure in recommending the dividend of Re. 0.30 (i.e. 30%) per equity share of Re. 1/ face value, aggregating to Rs. 2,53,95,609/- (Rs. Two Corers fifty three lakhs ninety five thousand six hundred and nine only) which shall be paid within 30 days after the conclusion of the Annual General Meeting, subject to the approval of the shareholders of the Company.

STRUCTURE OF THE BOARD

Board of Directors and Key Managerial Personnel

Your Company is maintaining an optimum combination of Independent and Executive directors in the Board, who have vast experience in Pharma and other relevant fields.

As per the Articles of Association of the Company, the Directors other than the nominee and independent directors are liable to retire by rotation. Accordingly, Sri. Ramesh Babu Potluri, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks reappointment. A brief profile of directors seeking re-appointment is given along with the AGM Notice for the reference of the shareholders.

Independent Directors

In accordance with the provisions of the Section 149 (7) of the Companies Act, 2013, each independent director had confirmed to the Company that he/she meets the criteria of Independence laid down in the Section 149 (6) of the Companies Act, 2013 and Regulation 25(1) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. All the Independent Directors of the Company have enrolled in the Independent Director databank maintained by Indian Institute of Corporate Affairs (IICA) as per Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019.

Declaration from Independent Directors:

The independent directors have submitted the declaration of independence stating that they meet the criteria of independence as prescribed in sub-section (7) of Section 149 of the Companies Act, 2013 as well as under regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Annual Evaluation of Performance of Board of Directors

Your Company had conducted a separate Meeting of Independent Directors during the year on 4th June, 2020 in which they had evaluated the performance of Executive directors and Non- Executive/Nominee Directors. Further, in the Board Meeting held on 12th August, 2020 the Board had evaluated the performance of Independent Directors and their contribution in the Board. The evaluation had been made on specified standards.

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual Directors pursuant to applicable provisions of the Act and the corporate governance requirements as prescribed by applicable regulations of Listing Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors present in the meeting on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The Nomination and Remuneration Committee has laid down the criteria for the performance of individual Directors such as the contribution of the individual Director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Familiarization Programmes for Independent Directors

The Company has put in place a system to familiarize its Independent Directors with the Company, their roles, rights & responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. The details of such familiarization programmes are put up on the website of the Company. https://smspharma.com/ investor-relations/download/

RISK MANAGEMENT POLICY

SEBI Board Meeting held on 25th March, 2021, considered and approved amendments to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in relation to applicability, constitution and role of the Risk Management Committee (RMC) of listed entities. The amendments inter-alia include the following:

• The requirement to constitute the RMC has been extended to the top 1000 listed entities by market capitalization from the existing top 500 listed entities and "SMS Pharmaceuticals Limited” comes under the top 1000 companies and the Risk Management Policy is applicable to your Company also and the "SMS Risk Management Committee” has been Constituted in the Board of Directors Meeting held on 28th May, 2021 and the Committee had been formed with the following Directors.

Sri. Ramesh Babu Potluri, Chairman and Managing Director - Chairman, Sri. Vamsi Krishna Potluri - Executive Director - Member, and Sri. Shravan K, Independent Director - Member.

SMS Risk Management Policy has been recommended by the Committee in its meeting held on 7th August, 2021 to the Board of Directors of the Company and the Board of Directors approved and adopted the Policy in the meeting held on 7th August, 2021 and the same is available in the website of the Company. https://smspharma.com/investor-relations/ download/

The Company has adequate internal control systems and procedures to mitigate the financial risk (if any), arise in near future. The Risk Management procedure will be reviewed by the Audit Committee and the Board of Directors on a Quarterly basis.

THE CRITERIA FOR APPOINTMENT OF DIRECTORS, KMPS AND SENIOR MANAGEMENT

A person for appointment as Director, KMP or in senior management should possess adequate qualifications, expertise and experience for the position considered for appointment. The Nomination and Remuneration Committee decides whether qualification, expertise and experience possessed by a person are sufficient for the concerned position. The Committee ascertains the credentials and integrity of the person for appointment as Director, KMP or senior management level and recommends to the Board his/ her appointment.

The Committee, while identifying suitable persons for appointment to the Board, will consider candidates on merit against objective criteria and with due regard for the benefits of diversity on the Board.

The Nomination and Remuneration Committee shall assess the independence of directors at the time of appointment; reappointment and the Board shall assess the same annually. The Board shall re-assess determination of independence when any new interests or relationships are disclosed by a Director.

The criteria of independence are as prescribed in the Act and the listing regulations and the Independent Directors shall abide by the Code specified for them in Schedule IV of the Act.

The Nomination and Remuneration Committee has the criteria for appointing any Key Managerial Personnel (KMP) and nominating directors on the Board. The appointment of any KMP is made by the Nomination and Remuneration Committee based on the requirement of the position and experience and skill sets of the candidate.

COMPOSITION & NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year under review four (4) meetings of the Board of Directors were held on 5th June, 2020, 12th August 2020, 3rd November, 2020, and 10th February, 2021. The Four (4) Meetings of the Audit Committee were held on 5th June, 2020, 12th August, 2020, 3rd November, 2020 and 10th February, 2021. A detailed information required under Sec. 177(8) and 177(10) of the Companies Act, 2013 and composition of various committees is provided in ‘Corporate Governance Report forms part of this report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 and Section 134 of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at 31st March, 2021, on its website at https://smspharma. com/investor-relations/annual-reports/. The extract of Annual Return is prepared in prescribed form i.e., ‘Form MGT- 9 attached to this Report as Annexure - 4.

CERTIFICATION FROM MANAGING DIRECTOR AND CFO

A certificate of the Managing Director and Chief Financial Officer of the Company on Financial Statements and applicable internal controls as stipulated under Regulation 17(8) of the SEBI (LODR), Regulations, 2015, is enclosed to this Report as Annexure-5.

CORPORATE GOVERNANCE

A Report on Corporate Governance as stipulated under Schedule V of the SEBI (LODR) Regulations, 2015, is enclosed as Annexure - 6 forming part of this report. The requisite certificate from M/s. Suryanarayana & Suresh, Chartered Accountants, confirming the compliance with the conditions of Corporate Governance is annexed to the Report on Corporate Governance.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 1000 listed entities based on market capitalization. The Business Responsibility Report is annexed and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

The Company established a whistle blower policy in order to assure that the business is conducted with integrity and that the Companys financial information is accurate.

DEPOSITS

Your Company had not accepted/ invited any deposits from the public during the year under review. As such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

LOANS, GUARANTEES AND INVESTMENTS

Your Company had made investment in its associate company viz. M/s. VKT Pharma Private Limited for its business purpose. The Company holds 38,50,165 Equity shares of Rs. 10/- each in VKT Pharma Private Limited as on 31st March, 2021 as investments which amounts to 42.62%.

The Particulars of loans/advances given are provided in the Standalone Financial Statements.

The Company is maintaining the details of investments made during the year in Statutory Form MBP - 2. The details of loans / advances given and investments made during the financial year ended on 31st March, 2021 are provided as Annexure-7.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company during the financial year 2020-21 with related parties were in the ordinary course of business and on an arms length basis and are in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligation & Disclosure Requirement) Regulation, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors and Key Managerial Personnel, etc., which may have potential conflict with the interest of the Company. All related party transactions are presented to the Audit Committee on quarterly basis and were also placed before the Board.

A statement of all Related Party Transactions is being presented before the Audit Committee on Quarterly basis specifying the nature, value and terms and conditions of the transactions. A Policy on Related Party Transactions approved by the Board is uploaded on the Companys website at the web link http://www.smspharma.com/investors/downloads/ policy-on-related-party-transactions.pdf.

The particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) are kept by the Company in Statutory Form AOC-2. Further details required to disclose as per Accounting Standard-18 (as issued and modified by ICAI) form part of the notes to the financial statements provided in the annual report. The Form AOC-2 is attached to the Report as Annexure-8.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has constituted the CSR Committee consisting of the Directors as specified in Annexure - 9, with the roles and responsibilities duly defined in accordance with the CSR Policy Rules. The Committee met once on 12th August, 2020 during the Financial Year 2020-21.

The average net profits of the Company during the preceding three years stands as Rs. 5,786.53 lakhs hence the Company is required to spend a sum of Rs. 115.73 lakhs towards CSR Expenditure in FY 2020-21.

Dividend Distribution Policy:

The Dividend Distribution policy containing the requirements mentioned in Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms s part of this Annual Report (Annexure - 10) and the same is available on the Companys website and may be accessed at https://smspharma.com/investor-relations/download/

PARTICULARS OF EMPLOYEES

Particulars of employees required to be furnished under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is mentioned under ‘Employees Remuneration Report which forms part of this report as Annexure - 11.

None of the employees of the Company is receiving a salary of more than Rs. 8.50 lakhs per month.

Prevention of Insider Trading

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended, the Company has adopted the Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons and their Immediate Relatives along with Code of Fair Disclosures and a copy of the same may be accessed on Companys website at https://smspharma.com/investor-relations/download/

Environment, Health and Safety Environment:

The Company is conscious of the importance of environmentally clean and safe operations. The Companys 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.

Health:

During the financial year the company has undertaken following activities:

• Organized frequent medical checkups for all employees and contract workers at all locations of the Company.

• Availability of first aid boxes in every department/section and maintenance site.

• Availability of equipped ambulance at all the times to assist the patient to the nearest hospital.

• Imparted health education through programs and initiatives and created awareness among employees on the precautions to be taken against Covid.

• Arrangement of hospitalization for severe Covid infected employees.

Safety:

• Safety awareness has been enhanced by way of training on hazard identification, risk assessment and continuous training to the newly inducted employees and regular training to the employees on SOPs, mock drills on emergency preparedness and mitigation exercises.

• Installed fire extinguishers at appropriate places and provided training to members on its functioning.

• Ensured use of personnel protection equipment (PPE) at sites with safety protocols.

• Undertook examination and audit of equipment at regular intervals by internal as well as external agencies.

• Ensured strict adherence of Covid protocols across the sites and offices.

• Maintaining hygiene at work place and promoting selfhygiene among personnel.

• Coverage of all employees under Covid Insurance Policy.

Capital Expenditure

During the financial year 2020-21, the Company has capitalised assets of Rs.19, 808.66 lakhs, and an amount of Rs.674.37 lakhs is carried forward as capital work-in-progress at the end of the year

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The information required under Section 134(3)(m) of the Companies Act, 2013 read with the applicable Rules forms part of this report as Annexure- 12.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(INR in Lakhs)

Particulars 2020-21 2019-20
Earnings
FOB Value of Exports 13,593.49 9,809.70
Outgo
Sales Commission 210.28 73.40
Travelling Expenses - 1.54
CIF Value of Imports
Raw Materials 5,091.04 1,386.05
Capital Goods 2,265.80 350.81

AUDITORS

Statutory Auditors

M/s. Suranarayana & Suresh, Chartered Accountants, (Firm Registration No. 006631s) were appointed as the Statutory Auditors of the Company to hold office for a period of five (5) consecutive years till the Conclusion of the 34th Annual General Meeting of the Company to be held in the year 2022 (subject to ratification by the members at each AGM).

In terms of first proviso to Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors shall be placed for ratification at every Annual General Meeting. However, pursuant to the Companies (Amendment) Act 2017, the requirement for ratification of Statutory Auditors appointment by members at every AGM has been omitted with effect from 7th May, 2018. The Board of Directors is empowered to fix the remuneration of the Statutory Auditor on yearly basis.

Accordingly, M/s. Suranarayana & Suresh, Chartered Accountants, will continue as the Statutory Auditors of the Company till the conclusion of 34th AGM of the Company.

Internal Auditor

The Board has appointed M/s. Adusumilli and Associates, Chartered Accountants, as an Internal Auditors of the Company for a period of two years from the Financial Year 2020-21 to 2021 - 22 under Section 138 of the Companies Act, 2013, in accordance with the scope as defined by the Audit Committee.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. SVVS & Associates Company Secretaries LLP were appointed to conduct Secretarial Audit of the Company for the Financial Year ended on 31st March, 2021. Secretarial Audit Report in Form MR-3 for the financial year

2020- 21 forms part of this report as Annexure -13.

Annual Secretarial Compliance Report

Pursuant to provisions of SEBI circular no. CIR/CFD/ CMD1/27/2019 dated 8th February, 2019, the Company has obtained Annual Secretarial Compliance Report forms part of this Report as Annexure-14 from Sri. C. Sudhir Babu, Practicing Company Secretary (Proprietor, CSB Associates) and the same was also submitted to the Stock Exchanges where the shares of the Company are listed.

COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, and the Companies (Cost Records & Audit) Amendment Rules, 2014, the Company maintains Cost Records. Your Board has, upon the recommendations of the Audit Committee, appointed Sri. K.S.N. Sarma (Registration No.102145 and Membership No.6875) as Cost Auditor of the Company for the financial year

2021- 22. These provisions also require that the remuneration of the Cost Auditor is to be approved by the shareholders. As a matter of record, the Cost Audit Report for the year 2020-21 was filed with the Central Government within the prescribed time limit.

FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has laid down the set of standards which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively (1) to provide reasonable assurance that transactions are executed in conformity with generally accepted accounting principles/standards or any other criteria applicable to such statements, (2) to maintain accountability for assets; access to assets is permitted only in accordance with managements general or specific authorization and the maintenance of the records are in reasonable detail, accurate and fairly reflect the transactions and dispositions of the assets of the company, (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets that could have a material effect on the Financial Statements.

POLICIES

Company has following policies in place pursuant to applicable provisions of the Act and SEBI Listing Regulations and the same are published on the official website of the Company (www.smspharma.com):

1. Code of Business Conduct & Ethics for Other Stake Holders

2. Code of Regulation & Prohibition of Insider Trading

3. Code of Conduct for Board & Senior Management

4. Criteria for making payment for non-executive Directors

5. Corporate Social Responsibility Policy

6. Document preservation policy

7. Familiarization program of Independent Director

8. Policy for evaluation performance of the Board

9. Policy for related party transaction

10. Policy for disclosure of material information

11. Policy for sexual harassment

12. Staff advances policy

13. Vigil Mechanism (Whistle blower policy )

14. Policy for determination of legitimate purpose

15. Dividend Distribution Policy

16. Risk Management Policy

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Human Resources Department continued to maintain cordial working relations across the spectrum of employees in the Company.

As part of its strategic initiatives, HR department has carried forward the Leadership program for the senior Management team and continued to engage them across varied programs such Blue Ocean Strategy and Creative Block-busting aimed at honing their leadership skills. The Management is also introducing Managerial effectiveness programs for the middle management group to develop the next level of Managers and Leaders in the Company.

SHARE TRANSFER SYSTEM

Pursuant to Regulation 40 of SEBI (LODR) Regulations, 2015, as amended vide Notification No. SEBI/LAD-NR0/GN/2018/24 dated 8th June, 2018 and Press Release No: 49/2018 dated 3rd December, 2018, shareholders may please note that, with effect from 1st April, 2019, transfer of shares (except transmission and transposition of shares) will be in dematerialized form only. Therefore, the shareholders are requested to dematerialize their shares in order to have a hassle-free transfer. Members can contact the Company or Companys Registrars and Transfer Agents, Aarthi Consultants Private Limited for assistance in this regard.

GENERAL DISCLOSURE

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) No material changes and commitments affecting the financial position of the Company between the financial year ended 31st March, 2021 and the date of this report.

b) No fraud has been reported by the Auditors to the Audit Committee or to the Board.

c) No material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future

d) Company has complied with the requirements of the Secretarial Standards issued by Institute of Company Secretaries of India.

e) There are no instances where the Board has not accepted the recommendation of Audit Committee.

f) Cost records are maintained as per the requirements of Section 148 of the Act.

g) The extract of the Annual Return [Form MGT-9] forms part to the Board Report as Annexure-4

VIGIL MECHANISM (WHISTEL BLOWER POLICY)

The Company has established a Vigil mechanism and formulated a Whistle Blower Policy through which all the stakeholders of the Company can report their concerns about unethical behavior, actual or suspected fraud, or violation of code of conduct and ethics policy. It also provides for adequate safeguards against victimization of director(s)/ employee(s) who avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee. The Whistle Blower Policy which has been approved by the Board of Directors of the Company has been uploaded on the Companys website (http://www.smspharma. com/investors/downloads/whistle-blower-protection-policy. pdf). During the year under review the Company has not received any complaint(s) under this policy.

BOARDS RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

There are no qualifications, reservations or adverse remarks made by the Statutory Auditor, Secretarial Auditor and Cost Auditor in their reports.

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

In order to comply with the provisions of the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the work place. All women employees permanent, temporary or contractual are covered under the above policy. Your Company has zero tolerance towards sexual harassment at the workplace and the details of sexual harassment complaints as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder are as follows:

No. of Complaints received : Nil
No. of Complaints disposed-off : Not Applicable

The Company has constituted an Internal Complaints Committee for redressal of complaints and is committed to provide equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Companys office/ premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

During the year under review, the Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.

CODE FOR PREVENTION OF INSIDER TRADING

As per the SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted a Code of Conduct of Insider Trading. The Company has appointed Sri. V. S. Venkatish, Company Secretary of the Company as Compliance Officer for setting forth the procedures and implementation of the Code for trading in Companys Equity Shares. During the year under review, there has been a due compliance of the said Code.

Insurance:

All properties and insurable interests of the Company including buildings, plant and Machinery and stocks have been fully insured.

Rating

Rating: CARE Rating Limited has assigned its rating of "A- with a stable outlook” on the long term bank facilities of the Company and A2 on the short term bank facilities of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 as amended, the Board of Directors confirm that:

1. In the preparation of the Financial Statements for the year ended 31st March, 2021 the applicable accounting standards had been followed along with proper explanation relating to material departures, if any.

2. They had selected such accounting policies as notified & modified by ICAI 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 the end of the financial year and of the profit and loss of the Company for that period;

3. They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 as amended from time to time for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts had been prepared on going concern basis.

5. The Company has developed an effective mechanism for internal financial controls, it has been followed by the Company consistently; such internal financial controls are adequate and operating effectively.

6. They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the year under review, there were no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Acknowledgements:

Your Directors take this opportunity to express their sincere appreciation and to thank the Customers, Shareholders, vendors, bankers, business associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. The Board of Directors also wish to place on record its deep sense of appreciation for the dedicated and committed services by the Companys executives, staff and workers.

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilization of the Companys resources for sustainable and profitable growth.

By the order of the Board
Place: Hyderabad Date: 07-08-2021 Ramesh Babu Potluri Chairman and Managing Director (DIN:00166381)