Solara Active Pharma Sciences Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the Fourth Annual Report of Solara Active Pharma Sciences Limited (the Company) together with the audited financial statements for the year ended March 31, 2021.


(C In Crores)

Financial Results



2020-21 2019-20 2020-21 2019-20
Gross Revenue 1,645.29 1,349.26 1,645.65 1,349.27
Profit before interest, depreciation and tax 399.35 276.20 400.42 279.34
Profit before tax 220.96 112.49 221.50 114.91
Profit after tax 220.96 112.49 221.35 114.52
EPS (basic) on the basis of C 10/- per share 68.86 43.47 69.00 44.29
EPS (diluted) on the basis of C 10/- per share 64.40 42.03 64.53 42.82

The above financial results pertains to continuing operations of the Company

A detailed analysis of the operations of the company is provided in the management discussion and analysis report, which forms a part of this annual report.


We are a global, R&D focused, pureplay API company engaged in the manufacturing and development of APIs and offering Contract Manufacturing and Development Services for global companies. We have a highly compliant manufacturing footprint spread over six large scale multi-product facilities supported by a team of 2500+ employees. Our business is spread across 75 countries with extensive operations in the key markets of North America, Europe, Japan, South Korea and the Middle East and North Africa. We are poised to create strategic value in the B2B space with a basket of high-value products, compliant manufacturing base, long term supply assurance and strong customer advocacy.

FY 2020-21 was a stellar year of performance for the Company, as it achieved significant milestones with its contrarian strategies and perspectives on the business.

3. COVID-19

The fiscal year 2020-2021 was a challenge in many ways, there was an exponential surge in the Covid-19 cases in many countries, forcing the Government to impose lockdown. The safety of employees was paramount in all the decisions taken by your company to continue or restart operations. The company is also using innovative methods to support its customers during this crisis. The spread of this virus has compelled your company to revisit its ways of working, including working from home.

Based on the available information and the business projections by management, which appear reasonably conservative, the Board is satisfied that no material adjustments are required to the Financial statements for 2020-21.


During the year, the directors have approved payment of interim dividend of C 4/- (40%) per equity share of face value C 10/- each for distribution of the profits of the company, which had resulted in a payout of C 14.36 Crores.

The Board of Directors of the company are pleased to recommend a final dividend of C 3/- per equity share of face value of C10/- each for the financial year ended March 31, 2021 subject to the approval of the shareholders of the company at the ensuing annual general meeting scheduled to be held on August 25, 2021.

The Register of Members and Share Transfer Books will remain closed from August 21, 2021 to August 25, 2021 (both days inclusive) for the purpose of payment of final dividend for the financial year ended March 31, 2021. Dividend, if approved by shareholders, will be paid within 30 days from the date of declaration of dividend.

I n terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Company has adopted a Dividend Distribution

Policy. The said Policy is available on the Company’s website and can be accessed at investor page of our company’s website


The Authorised Share Capital of the Company as on March 31, 2021, stood at C 120,00,00,000/- divided into 12,00,00,000 equity shares of C 10/- each.

The Issued, Subscribed and Paid-up Equity share capital of the Company as on March 31, 2021, stood at C 35,92,97,670/- divided into 3,59,29,767 equity shares of C 10/- each.

There has been increase in the Paid-up share capital of the Company during the financial year on account of allotment of 86,00,000 equity shares by conversion of warrants and 4,74,500 equity shares consequent to exercise of stock options by the employees.


As at March 31, 2021, the company has "Solara Employees Stock Option Plan 2018".

During the year under review, Nomination and Remuneration Committee of the Board (NRC Committee) has granted 2,40,000 options convertible into equal number of equity shares of face value of C 10/- each to the senior management personnel of the Company. Statement giving detailed information on stock options granted to Employees as required under the Companies Act and SEBI Regulations is enclosed as Annexure 8 to this Report.


There are no material changes and commitments occurred, affecting the financial position of the Company, between the end of the financial year and the date of this report.


The Board of Directors of the Company at its meeting held on April 9, 2021 have approved the Scheme of Amalgamation for merger of Aurore Life Science Private Limited, Empyrean Life sciences Private Limited and Hydra Active Pharma Sciences Private Limited (Transferor companies) into the Company (Transferee Company) in terms of Section 230 to 232 of the Companies Act, 2013. The Scheme is subject to necessary statutory and regulatory approvals including the approvals of National Company Law Tribunal, the shareholders and creditors of each of the companies.

The appointed date for the said scheme of amalgamation is April 1, 2021 or such other date as may be agreed between the Transferor Company and the Transferee Company and approved by the National Company Law Tribunal.


The details of Subsidiary Companies and their financial position as required under the first proviso to Section 129(3) is given in Form AOC-1 as Annexure 1 as part of this report.


Your Company is committed to maintain the highest standard of Corporate Governance and adhere to Corporate Governance guidelines as laid out in the Listing Regulations.

M/s. Mohan Kumar and Associates, Practicing Company Secretaries, have examined the requirements of Corporate Governance with reference to Listing Regulations and have certified the compliance, as required under Listing Regulations. The Certificate in this regard is attached to this report.

As required by Listing Regulations, a certificate from a Practicing Company Secretary that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of the companies is attached to this Report as Annexure 7 Further, Annual Secretarial Compliance Report issued by Practicing Company Secretary, pursuant to Circular dated February 8, 2019 issued by SEBI is also attached to this Report as Annexure 10.


Pursuant to Schedule V of Listing Regulations "Management Discussion and Analysis" is given separately and forms part of this Report.


During the financial year 2020-21, the Directors met seven times i.e., on May 7, 2020; August 3, 2020; October 12, 2020, October 30, 2020, November 11, 2020, February 3, 2021 and March 31, 2021.


As on date of this report, the Board comprised of 8 directors comprising of 2 Executive Directors, 2 Non-Executive Directors and 4 Independent Directors. Chairman of the Board is a Non-Executive Director. The details of each member of the Board as on the date of this report forms part of Corporate Governance Report.

Retire by Rotation:

a) Mr. Deepak Calian Vaidya, Non-Executive Director - Chairman, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your directors recommend his reappointment.

b) Mr. Ankur Nand Thadani, Non-Executive Director - retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your directors recommend his reappointment.

Detailed profile of the Directors is attached as Annexure 5 to this report

During the year,

1. Mr. Bharath R Sesha appointed as Managing Director & Chief Executive Officer of the Company and he has been designated as Key Managerial Personnel.

2. Mr. Subhash Anand appointed as Executive Director & Chief financial Officer of the company and has been designated as Key Managerial Personnel.

3. Mr. Rajesh Salwan appointed as Chief Operating Officer of the company and has been designated as Key Managerial Personnel.

4. Mr. Jitesh Devendra, resigned from the post of Managing Director of the Company.

5. Mr. Hariharan, retired from the post of Executive Director Finance and Chief financial officer of the Company.

6. Mr. B. Sreenivasa Reddy, resigned from the post of Chief Operating Officer of the Company.

The following are the Key Managerial Personnel (KMPs) of the Company:

• Mr. Bharath R Sesha, Managing Director & Chief Executive Officer.

• Mr. Subhash Anand, Executive Director & Chief Financial Officer.

• Mr. Rajesh Salwan, Chief Operating Officer, and

• Mr. S. Murali Krishna, Company Secretary & Compliance officer.


In accordance with Section 149(7) of the Companies Act, 2013 each Independent Director has confirmed to the Company that he / she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.


The Companies Act and Listing Regulations relating to Corporate Governance contain provisions on evaluation of the performance of the Board and its Committees as a whole and Directors including Independent Directors, Non-Independent Directors and Chairperson individually. In pursuant thereof, annual evaluation of performance of the Board, working of its Committees, contribution and impact of individual directors has been carried out through a questionnaire for peer evaluation on various parameters.


The statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report and is appended herewith as Annexure 6 to the Boards’ report

The statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company and others entitled thereto. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.


The Company has undertaken "Corporate Social Responsibility (CSR)", initiatives in areas of Health, Education and Employability which are projects in accordance with Schedule VII of the Companies Act, 2013.

A detailed report on CSR activities undertaken during the financial year 2020-21 is enclosed as Annexure 2 to this Report.


The Company has a risk management framework for the identification and management of risks.

In line with the requirement under the SEBI Listing Regulations, the Company has constituted a Risk Management Committee (RMC) effective April 1, 2020, comprising members of the Board and Senior Management personnel. Composition of RMC is provided in the Corporate Governance Report, which forms part of this Report.

RMC is entrusted with the responsibility of overseeing strategic, operational and financial risks that the organisation faces, along with the adequacy of mitigation plans to address such risks.

Additional details relating to Risk Management are provided in the Management Discussion and Analysis report forming part of this Report.


Particulars of investments made, loans given and guarantees covered under the provisions of Section 186 of the Companies Act, 2013 are provided in Note No. 46 to the Standalone Financial Statements in the Annual Report.


All the transactions with related parties are in the ordinary course of business and at arm’s length basis. The transactions with related parties are disclosed in Note No. 40 to the Standalone Financial Statements in the Annual Report. The disclosure of contracts or arrangements with related parties for material transactions is furnished in Form AOC-2 as Annexure 9 as part of this report.

The Company has formulated a policy for transacting with Related Parties, which is uploaded on the website of the Company. Further, there are no materially significant related party transactions with its promoters, the directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large.


There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.


Secretarial Audit Report

M/s. Mohan Kumar & Associates, Practicing Company Secretaries, Chennai, is the Secretarial Auditor for the Company.

The Secretarial Audit for the financial year 202021, inter-alia, included audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Regulations and applicable Regulations prescribed by SEBI amongst others. Financials for the year ended March 31, 2020, signed by the Managing Director, Executive Director & CFO and Company Secretary on behalf of the company.

The Secretarial Audit Report is enclosed as Annexure 4 to the Board’s Report.


M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.117366W/W-100018) was appointed as Statutory Auditors of the Company at the first Annual general meeting of the company for a period of 5 years and will hold the office till the conclusion of the 6th AGM of the Company to be held in the financial year 2022-23. The Auditor’s report to the shareholders on the standalone and consolidated financials for the year ended March 31, 2021 does not contain any qualification, observation or adverse comment.

Internal Auditors

M/s. Price Waterhouse Coopers, Chartered Accountants are the Internal Auditors of the Company. The Internal Auditors carry out audit as per the audit plan defined by the Audit Committee and regularly updates the committee on their internal audit findings at the Committee’s meetings.

The Internal Auditors were satisfied with the management response on the observation and recommendations made by them during the course of their audit and have expressed satisfaction with the internal systems, controls and process followed by the Company.

Cost Auditors and Cost Records

Mr. K. Suryanarayanan, Cost Accountant (Membership No.24946) has carried out the Cost Audit for the applicable business for the year under review.

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, the Board of Directors had appointed Mr. K. Suryanarayanan, Cost Accountant (Membership No.24946) as Cost Auditor of the Company for the financial year 2020-21. Proposal for ratification of remuneration of the Cost Auditor is placed before the shareholders.

The company is maintaining cost records as specified under sub-section (1) of section 148 of the Companies Act, 2013.

Reporting of Frauds by Auditor

During the year under review, neither the Statutory Auditors nor the Internal Auditors has reported to the Audit committee under Section 143(12) of the Companies Act 2013, any instances or fraud committed against the company by its officers or employees, the details of which need to be mentioned in the Board’s report.


The Company has in place well defined and adequate framework for Internal Financial Controls ("IFC") as required under Section 134 (5) (e) of the Companies Act, 2013.

During the year under review, such controls were tested and no material weaknesses in their design or operations were observed.


Nature of Business of the Company

There has been no change in the nature of business of the Company during the year under review.

Public Deposits

The Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Vigil Mechanism / Whistle Blower Policy

The Company in compliance with Section 177 of the Companies Act, 2013 and Regulation 22 of Listing Regulations has established a Whistle Blower Policy in place as part of its vigil mechanism. The policy provides appropriate avenues to the directors, employees and stakeholders of the Company to make protected disclosures in relation to the matters concerning the Company. Protected disclosures are appropriately dealt with by the Whistle Officer or the Chairman of the Audit Committee. The policy is also available on the Company’s website at

Policy on Directors Appointment and Remuneration

The policy of the Company on Directors’ appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Section 178 of the Companies Act, 2013 is available on the Company’s website at


The assets/ properties of the Company are adequately insured against loss due to fire, riots, earthquake, terrorism, etc., and against other perils that are considered necessary by the management.

Annual Return

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at

Secretarial standards issued by the Institute of Company Secretaries of India (ICSI)

The Directors state that the applicable Secretarial Standards have been followed during the financial year 2020-21.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 134 of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure - 3 to this Report.

Disclosure under the Sexual harassment of woman at workplace (Prevention, Prohibition and Redressal) Act, 2013

The company has put in place an anti-sexual harassment mechanism in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee have been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaint of sexual harassment during the year 2020-21.


Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Directors of your Company confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 or loss 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 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 operating properly; and

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


The Listing Regulations mandate the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on market capitalisation. In accordance with the Listing Regulations, we have integrated BRR disclosures in our Annual Report.


Statements in the Annual Report, particularly those that relate to Management Discussion and Analysis, describing the Company’s objectives, projections, estimates and expectations, may constitute ‘forward-looking statements’ within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.


Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks during the year under review. Your Directors also place on record their deep sense of appreciation for the continued support of customers, suppliers, employees and investors of the company.

For and on behalf of Board of Directors
Bharath R Sesha Subhash Anand
Place: Bengaluru Managing Director Executive Director
Date: May 6, 2021 & CEO and CFO