Tyche Industries Ltd Directors Report.

To

The Members,

Tyche Industries Limited

Your Directors presents the 22nd Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2020.

Financial Summary:

(Rupees in Crores)

Particulars Current Year ended on 31/03/2020 Previous Year ended on 31/03/2019
Total Income (Including Other Income) 77.38 56.47
Less: Expenditure (before Finance Cost & Depreciation) 52.31 44.78
Profit before Finance Cost & Depreciation 25.07 11.69
Less: Finance Cost 0.01 0.01
Profit before Depreciation and Tax 25.06 11.68
Less: Depreciation 1.73 1.84
Profit / Loss before tax 23.33 9.84
Less: Provision for Tax
- Current Tax 6.03 2.98
- Deferred Tax (0.26) (0.28)
Profit after Tax 17.56 7.14
Other Comprehensive Income - -
Total Comprehensive Income 17.56 7.14
Add: Balance brought forward from the Previous Year 43.94 37.10
Appropriations
Dividend Paid* 0.51 0.00
Dividend Tax Paid* 0.11 0.00
Transfer to General Reserve* 0.30 0.30
Adjustment to Reserves -0.03 0.01
(+/-)Excess/ Short Provision 0.00 0.00
Balance carried to Balance Sheet 60.55 43.94

* Recommended by board, subject to approval of shareholders in the annual general meeting.

Review of Operations :

During the year, your Company has achieved a total income of Rs. 77.38Crores as against Rs. 56.47Crores in the previous year and earned a net profit of Rs.17.56Crores (Previous Year Rs.7.14Crores) after providing Income Tax and Deferred Tax of Rs.5.77 Crores (Previous Year Rs. 2.77Crores).

Your Directors always work with a focus to build a sustainable business model which would add value to all stakeholders over the years to come. The Board of Directors opine that the present and future market scenario of Pharma Sector will be good as discussed in detail in Management Discussion and Analysis.

Dividend:

Your Directors have recommended a dividend of Re.1 per fully paid equity share for the year ended 31st March, 2020 being 10% of the fully Paid-up Equity Capital of the Company. The dividend, if approved at the ensuing Annual General Meeting will be paid to those members, whose names appear on the Companys Register of Members on 23rd September, 2020. The total amount of outgo on account of this will be Rs.1.02 Crores towards dividend. The dividend would be tax in the hands of the shareholders.

Directors:

a) Directors:

In accordance with the provisions of the Companies Act, 2013, Mr G Ganesh Kumar, Director of the Company will retire by rotation at the ensuing Annual General Meeting of the company.

Brief resume of Directors proposed to be appointed/re-appointed as stipulated under SEBI (LODR) Regulations, 2015 entered with the Stock Exchanges are given in the Notice convening 22nd Annual General Meeting.

b) Board Meetings:

During the year, Eight board meetings were held, with gap between meetings not exceeding the period prescribed under the 2013 Act. Details of Board and Board Committee Meetings held during the year are given in the Corporate Governance Report.

Board Meeting dates are finalised in consultation with all Directors and agenda papers backed up by comprehensive notes and background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions. A detailed presentation is also made to apprise the Board of important developments in industry, segments, business operations, marketing, products etc.

c) Key Managerial Personnel:

Mr. G. Ganesh Kumar, Managing Director of the Company. Mr K.Srinivas, Chief Financial officer (up to 30.06.2019) Mr. Y Srinivas, Chief Financial Officer(With effect from 07.08.2019) Mr. SatyaRanjan Jena,Company Secretary and Compliance Officer d) Independent Directors:

Mr Sai Sudhakar Panchakarla with effect from 25th March 2019 and Mr.Boosa Eshwar are Independent Directors of the Company. In terms of Section 149 and 152 of the Companies Act, 2013 these Independent Director of the Company will hold office till 29th September, 2024 who shall not retire by rotation. The Independent Directors of the Company have given declaration that they meet the criteria of the Independence as provided in Section 149(6) of the Companies Act, 2013.

e) Independent Directors familiarisation programme:

As per the requirements under the (Listing Obligations and Disclosure Requirements) Regulations 2015, the Company undertook Directors Familiarisation Programme for Independent Directors in order to familiarise them with business model, management structure, product portfolio, industry overview, manufacturing operations, internal control system and operations, FOREX management, risk management framework, functioning of various divisions, HR Management etc.

f) Performance Evaluation of Board, Committees and Directors:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing obligation and Disclosure Requirements), Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and of the Independent Directors on parameters such as level of engagement, contribution, independent judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process as well as the evaluation of the working of its committee, information needs of the Board, execution and performance of specific duties, obligation and governance.

g) Policy on appointment and remuneration of Directors:

The Board has on the recommendation of Nomination & Remuneration Committee formulated criteria for determining Qualifications, Positive Attributes and Independency of a Director as also a policy for remuneration of Directors, Key Managerial Personnel and Senior Management. The details of criteria laid down and the Remuneration policy are given in the Corporate Governance Report.

h) Statutory Auditors:

The Companys Statutory Auditors, M/s. SURYAM & CO, Chartered Accountants (Firm Registration No. 012181S)were appointed as the Statutory Auditors of the Company for a period of 5 years at the 19th Annual general Meeting of the Company, i.e. up to the conclusion of 24th Annual General Meeting of the Company.

Accordingly, M/s. SURYAM & CO, Chartered Accountants, Statutory Auditors of the Company will continue till the conclusion of Annual General Meeting to be held 2022.In this regard, the Company has received a certificate from the Auditors to the effect that their continuation as Statutory Auditors, would be in accordance with the provisions of Section 141 of the Companies Act 2013.

i) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has re-appointed Mrs.D. Renuka, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure 1" and forms part of the Notice. There is no qualification, reservation or adverse remark in the report.

j) Cost Auditors:

As per the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the cost audit records maintained by the company in respect of its bulk drugs and APIs activity are required to be audited by cost auditors. The Board has on the recommendation of the Audit Committee recommended Mr.SativadaVenkat Rao., Practicing Cost Accountant, Hyderabad as Cost Auditors of the Company to conduct the cost audit for the financial year 2020-21, at a remuneration of Rs. 30,000/-p.a (Rupees Thirty Thousand only) excluding taxes as may be applicable, in addition to reimbursement of all out-of-pocket expenses subject to ratification by members. Accordingly, a resolution seeking Members ratification for the remuneration payable Mr.SativadaVenkat Rao, Cost Auditor is included at Item No.4 of the Notice convening the 22nd Annual General Meeting.

k) Internal Auditor:

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Board has recommended the re-appointment of M/s. P.S.N Ravishanker & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 2020-21.

l) Internal Control System, Compliance Framework:

The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The Company has also put in place the policies and procedures relating to "Internal Financial Controls" for ensuring the orderly and efficient conduct of its business, including adherence to the companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial statements, as per the explanation to Section 134(5) (e) of the Act.

The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Audit Committee in consultation with the Internal Auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit Committee, process owners undertake necessary actions in their respective areas. The Internal Auditors have expressed that the internal control system in the Company is robust and effective.

The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.

m) Transfer to Reserves:

Your Company proposes to transfer Rs.0.30 Crores to the General Reserve out of the amount available for appropriations.

n) Material Changes:

There have been no major material changes and commitments affecting the financial position of the Company to since the close of financial year i.e. since 31st March, 2020. Further, it is hereby confirmed that there has been no major change in the nature of business of the Company. The Company continues to operate only in one segment i.e. Bulk drugs.

Directors Responsibility Statement:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, the Board of Directors of the Company hereby state that:

i. In the preparation of the annual accounts for the year ended 31st March, 2020, the applicable accounting standards read with requirements set out under Schedule III to the Act, had been followed and there are no material departures from the same;

ii. The Directors had selected such accounting policies 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 as at 31st March, 2020 and profit of the company for that period;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual accounts on a "Going Concern" basis.

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

Related Party Transactions:

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large and the Form AOC-2 is attached (Annexure-II).

Subsidiary and associate Companies:

The Company does not have any subsidiary and/or associate companies.

Public Deposits:

During the year under review, the Company has neither accepted nor renewed any deposit within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

Insurance:

Your Company has taken wherever possible to mitigate risks, appropriate insurances and the Board is kept apprised of the risk assessment and minimization procedures. The assets of the Company have been adequately covered under insurance. The policy values have been enhanced taking into consideration the expanded and upgraded facilities of the Company.

Listing of Securities:

The Equity Shares of the Company are listed with BSE Limited. The Company has paid the Annual listing fees to the BSE Limited for the financial year 2020-2021.

Share Capital:

The Company has only one class of shares viz., Equity share of face value of Rs.10/- each. The total issued and subscribed capital of the Company is Rs.10.25 Crores. The paid up capital of the Company is Rs.10.24Crores. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

Forfeiture of shares:

The company has issued notices to the shareholders for payment of calls in arrears on various dates, after the issue of said notices the company is left with unpaid capital of Rs 46,600/- unpaid on 9,320 equity shares @ Rs 5/- share. The company after taking approvals from the stock exchange, the said share capital will be written off accordingly in books.

Report on Corporate Governance:

A detailed report on Corporate Governance prepared in substantial compliance with the provisions of SEBI (LODR) Regulations, 2015 with the Stock Exchange together with Certificate given by the practising company secretary regarding the compliance of conditions of corporate governance, form a part of Annual Report.

Audit Committee and its Composition:

The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Companys internal control and financial reporting process.

As on 31st March, 2020, the Audit Committee comprised of, Mr.BoosaEshwar, Mr.Sai Sudhakara Panchakarla Independent Directors and Mr. G Ganesh Kumar, Managing Director of the Company as member.

Mr.BoosaEshwar was the Chairman of Audit Committee of the Company. The Compliance Officer of the Companyacts as the Secretary of the Audit Committee.

Committees of the Board:

There are currently five Committees of the Board, which are as follows:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Share Transfer Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", as part of this Annual Report.

Research & Development:

The Company has incurred an expenditure of Rs.0.61Crores on research and development during the year.

Risk Management:

Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges.

Major risks identified for the Company by the management are Manufacturing & Supply, Regulatory, Information Technology, Currency fluctuation, Compliance, Litigation, etc. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialise.

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

Whistle Blower Mechanism:

The Company has set up Whistle Blower / Vigil Mechanism viz. Whistle Blower Policy to enable the employees and Directors to report genuine concerns and irregularities, if any in the Company, noticed by them. The same is reviewed by the Audit Committee from time to time. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company. We affirm that during the financial year 2019-20, no employee or director was denied access to the Audit Committee.

Loans, Guarantees or Investments:

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

Corporate Social Responsibility (CSR):

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with CSR Rules, the Company has constituted CSR Committee and formulated CSR Policy. During the year, the Company undertook several initiatives under the CSR program. The details of CSR

policy and CSE activities undertaken during the year are annexed herewith as "Annexure III".

Details of Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the Going Concern status and Companys operations in future:

There was no order passed by any regulator or court or tribunal, which impacts, the going concern status of the Company or will have bearing on Companys operations in future.

Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has constituted an Internal Compliant Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint was made before the Committee.

Legal Compliance Reporting

The Board of Directors reviews in detail, on a quarterly basis, the reports of compliance to all applicable laws and regulations. Any non-compliance is seriously taken up by the Board, with fixation of accountability and reporting of steps taken for rectification of non-compliance. In the opinion of the Board, there has been no identification of elements of risk that may threaten the existence of the company. The Company complied with all the applicable Secretarial Standards issued by the Institute of the Companies Secretaries of India.

Extract of the Annual Return:

The extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure IV" and the extract of annual return is also available at website of company i.e. www.tycheindustries.com.

Managerial Remuneration and Particulars of Employees:

Disclosure pertaining to remuneration and other details as required 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 are attached as "Annexure V".

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, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of the annual 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 shareholders of the company and other entitled thereto. The said information is available for inspection at the registered office of the Company during business hours on working days up to the date of the forthcoming 22nd Annual General Meeting. Any shareholders interested in obtaining a copy thereof may write to the Company Secretary in this regard.

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

Information regarding Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed under Section 134 of the Companies Act,

2013 read with Companies (Accounts) Rules, 2014 is enclosed as an "Annexure –VI" and forms part of the Report.

Human Resource:

Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building programs are conducted to enhance employee skills, motivation as also to foster team spirit. Company also conducts in-house training programs to develop leadership as well as technical/functional capabilities in order to meet future talent requirements.

Industrial Relations:

Industrial relation has been cordial and your directors appreciate the sincere and efficient services rendered by the employees at all levels towards the successful working of the Company.

Acknowledgement:

Your Directors wish to take this opportunity to thank the employees for their dedicated service and contribution to the Company. We also thank Bank of India, Government Agencies, Business Associates, Shareholders and Investors at large for their continued support towards conduct of efficient operations of the Company.

By Order of the Board of Directors
Sd/-
Place: Hyderabad G. Ganesh Kumar
Date: 05th September 2020 Chairman &Managing Director