Tyche Industries Director Discussions


To

The Members,

Tyche Industries Limited

Your Directors have pleasure in presenting the 25th Annual Report of the Company together with the Audited Accounts of the Company for the financial year ended 31st March, 2023.

Financial Results:

(Rupees in Lakhs)

Particulars

Current Year ended on 31/03/2023 Previous Year ended on 31/03/2022
Total Income (Including Other Income) 8021.32 6642.34

Less: Expenditure (before Finance Cost & Depreciation)

5923.50 5130.47
Profit before Finance Cost & Depreciation 2097.82 1511.87
Less: Finance Cost 0.11 0.00
Profit before Depreciation and Tax 2097.71 1511.87
Less: Depreciation 177.34 178.91
Profit before tax after Depriciation 1920.37 1332.97
Less: Execeptional Item 11.95 69.32
Profit/Loss before Tax 1908.42 1263.64
Less: Provision for Tax
- Current Tax 503.31 339.09
- Deferred Tax -12.04 -8.59
Profit after Tax 1417.15 933.14
Other Comprehensive Income -9.85 6.87
Total Comprehensive Income 1407.30 940.01
Add: Balance brought forward from the Previous Year 9397.37 7919.40
Appropriations
Dividend Paid* 153.61 102.41
Dividend Tax Paid* 0.00 0.00
Transfer to General Reserve* 30.00 30.00
Adjustment to Reserves 0.00 0.00
(+/-)Excess/ Short Provision 0.18 12.01
Balance carried to Balance Sheet 10650.88 9397.37

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

Review of the Business:

During the year, your Company has achieved a total income of Rs. 8021.32 Lakhs as against Rs.6642.35 Lakhs in the previous year and earned a net profit of Rs.1417.15 Lakhs (Previous Year Rs 932.83 Lakhs) after providing Income Tax and Deferred Tax of Rs.491.27 Lakhs (Previous Year Rs.330.39 Lakhs).

Your directorsalways 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.

Management Discussion & Analysis:

Various business aspects including market conditions, business opportunities, challenges etc. have been discussed at length in the Management Discussion and Analysis (MD&A), which forms part of this Annual Report.

Dividend:

Your Directors have recommended a dividend of Re.2.00 per fully paid equity share for the year ended 31st March, 2023 being 20% 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 22nd August, 2023. The total amount of outgo on account of this will be Rs.2.04 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. Sandeep, 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 25th Annual General Meeting.

b) Board Meetings:

During the year, seven 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. Y Srinivas Rao, Chief Financial Officer Mr. SatyaRanjan Jena, Company Secretary and Compliance Officer

d) Declaration from Independent Directors

Mr.Boosa Eshwar, Mr Sai Sudhakar Panchakarla and Mrs P Vijaya Lakshmi are Independent Directors of the Company. In terms of Section 149 and 152 of the Companies Act, 2013 these Independent Director of the Company shall not retire by rotation. The independent directors have submitted the declaration of independence stating that they meet the criteria of independence as prescribed in sub-section (6) 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.

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 judgment, 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. P. S. N Ravishanker, Chartered Accountants (Firm Registration No. 003228S) were appointed as the Statutory Auditors of the Company for a period of 5 years at the 24th Annual general Meeting of the Company, up to the conclusion of this 29th Annual General Meeting of the Company.

i) Secretarial Auditors& Secretarial Report:

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 this report. 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. Sativada Venkat Rao., Practicing Cost Accountant, Hyderabad as Cost Auditors of the Company to conduct the cost audit for the financial year 2023-24, at a remuneration of Rs. 45,000/-p.a (Rupees Forty Five 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 25th 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 appointment of M/s. K SRINIVAS & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 2023-24.

l) Auditors Qualifications/reservations/adverse remarks/ Frauds reported:

There are no Auditors Qualifications or reservations or adverse remarks on the financial statements of the Company. The auditors recommendations for improvement in the control systems are noted and the necessary steps towards the implementation of the same will be initiated. The Auditors have not reported any frauds to the Audit Committee as prescribed under Sec. 143(12) of the Companies Act, 2013

m) 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.

n) Transfer to Reserves:

Your Company proposes to transfer Rs.30 Lakhs to the General Reserve out of the amount available for appropriations.

o) Material Changes:

There is no Material Changes in the current year

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 31stMarch, 2023, 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, 2023 and profit of the company for thatperiod;

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 hadprepared 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 76of 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 2023-2024.

Share Capital:

The Company has only one class of shares viz., Equity shares 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 practicing 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 31stMarch, 2023, the Audit Committee comprised of, Mr.Boosa Eshwar, Mr.Sai Sudhakara Panchakarla Independent Directors and Mr. G Ganesh Kumar, Managing Director of the Company as member.

Mr.Boosa Eshwar is the Chairman of Audit Committee of the Company. The Compliance Officer of the Company acts 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. Nominations and Remuneration Committee

5. Corporate Social Responsibility Committee

6. Share Transfer 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.90.90 Lakhs 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 are explained in the Corporate Governance Report and also posted on the website of the Company. We affirm that during the financial year 2022-23, 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 CSR 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 formulated and implemented a policy for Prevention of Sexual Harassment of Women at workplace. During the year under review, the Company has not received any complaints under the policy

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.

Detail of application made or proceeding pending under Insolvency and Bankruptcy code 2016:

During the year under review, there are no application made or proceeding pending under Insolvency and Bankruptcy code, 2016.

Detail of difference between Valuation amount on one time settlement and valuation while availing loan from Banks and Financial Institutions.

During the year under review, Company doesnt avail any loan and there has been no one time settlement of Loans.

Annual Return:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), a copy of the Annual Return of the Company shall be placed on the Website of the Company at www. tycheindustries.net.

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 IV". 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 25th 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 –V" 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.

Awards

Your Company has been awarded as "Asias 200 Best under A Billion 2020" by Forbes in the year 2020-21.

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.

For and on behalf of the Board of Directors
Sd/-
Place: Hyderabad G. Ganesh Kumar
Date: 01st August, 2023 Chairman &Managing Director