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Ami Organics Ltd.

BSE: 543349 Sector: Health care
NSE: AMIORG ISIN Code: INE00FF01017
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VOLUME 3071
52-Week high 1182.40
52-Week low 826.00
P/E 42.38
Mkt Cap.(Rs cr) 3,283
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 910.00
CLOSE 899.25
VOLUME 3071
52-Week high 1182.40
52-Week low 826.00
P/E 42.38
Mkt Cap.(Rs cr) 3,283
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ami Organics Ltd. (AMIORG) - Director Report

Company director report

To

The Members

Ami Organics Limited

Your Directors are pleased to present the Fifteenth (15th) Annual Report on thebusiness and operations of the Company along with the Standalone and Consolidated AuditedFinancial Statements of the Company for the Financial Year ended on 31st March 2022.

1. Corporate Overview and General Information:

Your Company is a R&D driven manufacturer of pharma intermediates & specialtychemicals with varied end usage focussed on the development and manufacturing of advancedpharmaceutical intermediates ("Pharma Intermediates") New Chemical Entities("NCE") and Other specialty chemicals for Pharmaceuticals AgrochemicalsCosmetics and other Industries. Company has developed and commercialised over 450 plusPharma Intermediates for APIs across 17 key therapeutic areas since inception and NCEacross select high-growth high margin chronic therapeutic areas. On the operational frontduring the FY 2021-22 Company has successfully commercialized a couple of products usingcontinuous flow reactors. It is amongst few companies in India that has successfullycommercialized products using continuous flow technology. Your company has also embarkedon a new CAPEX plan at the Ankleshwar manufacturing unit to support the future growth ofthe Advanced Intermediates business which is expected to get completed by end of thefinancial year 2023-24.

2. Financial Results: Standalone and consolidated

The Financial Statements of the Company have been prepared in accordance with theIndian Accounting Standards (Ind AS) notified under section 133 of the Companies Act 2013("the Act") read with Rule 7 of the (Companies Accounts) Rules 2014

The standalone and consolidated financial performance of the Company for the FinancialYear ended on March 31 2022 are summarized below:

(Rs. In Million except EPS Data)

Standalone Consolidated
Members F.Y.2021-22 F.Y.2020-21 F.Y.2021-22 F.Y.2020-21
Revenue from Operations 5201.35 3406.08 5201.35 3406.08
Other Income 27.62 13.30 27.62 13.80
Total Revenue 5228.97 3419.38 5228.97 3419.38
Expenditure 4314.47 2702.12 4314.47 2702.61
Profit/Loss before Tax 914.50 717.26 914.50 717.26
Provision for Tax:
Current tax 167.22 175.64 167.22 175.64
Deferred tax 27.83 1.63 27.83 1.63
Profit/ Loss after Tax 719.45 539.99 719.45 539.99
Other comprehensive Income /Loss 0 0 12.88 (8.52)
.Remeasurement of defined employee benefit plans 8.07 (0.37) 8.07 (0.37)
Tax impact of items that will not be reclassified to statement of profit and loss (2.03) 0.09 (2.03) 0.09
Total comprehensive income for the year 725.49 539.71 738.37 531.19
Earnings per equity shares
1. Basic 21.03 17.14 21.03 17.14
2. Diluted 21.03 17.14 21.03 17.14

The above figures are extracted from the Consolidated and Standalone FinancialStatements prepared in accordance with Indian Accounting Standards ("IND AS") asnotified under Sections 129 and 133 of the Companies Act 2013 ("the Act") readwith the Companies (Accounts) Rules 2014 and other relevant provisions of the Act andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") as amended. The financial statements of the Company areconsolidated with that of Ami Onco-Theranostics LLC Joint Venture.

3. State of Company's Affairs and Outlook :

COVID-19:

The outbreak of COVID-19 pandemic continued during FY 2021-22 with the second wave andthird wave during the financial year under review.

The Company continued its operations under its respective Business Continuity Plans(BCP) and implemented a business normalization plan thereby mitigating the businessimpact. While following COVID-19 protocol as mandated by the Government the Company gaveutmost importance to the health and well-being of its employees and continued theoperations serving customers at all locations.

Vaccination was identified as a key component in the fight against COVID-19 pandemic.To safeguard the health of the employees and their families the Company also embarked ona vaccination drive for them and extended complete care and assistance at all levelsduring this pandemic time.

The outbreak of Coronavirus (COVID -19) pandemic globally and in India causedsignificant disturbance and slowdown of economic activity. The Company has assessed theimpact of pandemic on its financial results/position based on the principle of prudence inapplying judgements estimates and assumptions including sensitivity analysis and hasconcluded that there is no major impact of COVID 19 on its operations and therecoverability of carrying values of assets. Considering that it is a dynamic and evolvingsituation the management will continue to closely monitor and evaluate the impact of anymaterial change in macroeconomic and other related factors which may have a bearing onthe Company's operations.

Initial Public Offer:

During the year under review your Company successfully completed its Initial PublicOffer ("IPO"). Company raised Rs. 3000 million in its initial public offeringincluding Pre-IPO preferential allotment of Rs. 1000 million. The IPO was over-subscribedby 64.54 times in aggregate. The Equity Shares of the Company were listed on the BSELimited ("BSE") and National Stock Exchange of India Limited ("NSE ")w.e.f. September 14 2021.

Business Highlights:

The financial year 2021-22 has been an year of achievements and milestones for yourCompany. Your Company's Initial Public Offer got a great response with an oversubscriptionof 64.54 times. On the financial side company crossed the milestone of Rs. 5000 Millionsales along with Rs. 1000 Million EBITDA mark. On the technology front Company continuesto evolve through extensive R&D initiatives and has become one of the first fewcompanies in India to commercialize two products using continuous flow technology. YourCompany is progressively working on expanding its business by new product developments andforaying into newer niche segments of pharma intermediates and speciality chemicals. Tocater to the incremental demand Company has embarked on setting brownfield project atAnkleshwar entailing a capex of Rs. 1900 Million. The existing Ankleshwar facility hasbeen demolished and work has started to set up a new plant with advance technology forpharma intermediates business slated to have installed capacity of 436.5 KL. The newfacility is expected to commercialise by end of financial year 2023-24.

The Key business highlights during the financial year 2021-22 may be summarised asunder:

• During FY22 company has commercialised 17 new products.

• Company has successfully developed an electrolyte additive for cells used inenergy storage devices. Samples are under approval with customers from pilot production.

• During the year company has commercialized two products using continuous flowreactors and has also successfully developed three more existing products which are underpilot scale now. The company has already ordered equipment and the products willcommercialize using continuous flow reactors in the FY23.

• Company has successfully developed capability in plug flow catalytic fixed-bedflow reactors as well as tubular flow kind of reactors. These are all different kinds ofcontinuous flow reactors.

• Company launched 2 new import substitute products during the year. Initialresponse to these products is encouraging and company plans to introduce more importsubstitute products in coming years.

• Company has successfully completed the integration of Gujarat Organics units andhas been able to improve the EBITDA of the acquired facilities to 11% by streamliningprocesses optimising use of utilities cost reduction measures which shows theoperational finesse of your company.

Financial Highlights of the Company:

During the financial year of review company's operational revenue grew by 52.7% on anYoY basis to Rs. 5201.3 Million. The growth was driven by 30% YoY growth in the PharmaIntermediate business coupled with the expansion of the Specialty chemicals business dueto the acquisition of facilities from Gujarat Organics Limited (GOL). Your companycompleted the integration of two facilities acquired from GOL and company's team has shownoperational finesse by improving the EBITDA margin from these facilities from 5% in FY 21to 11% in FY22. Key financial highlights on standalone results of operations as are under:

• Revenue from operations for FY22 grew by 52.7% YoY to Rs. 5201.3 Million ascompared to 3406 Million in FY 21.

• Operational EBITDA for the full year came at Rs. 1052 Million up 31.2% ascompared to Rs. 802 Million in FY21.

• Profit after tax registered a growth of 33.2% on Y-o-Y basis in FY22 to arriveat Rs. 719 Million as compared to 540 Million in FY21.

Financial Highlight of Joint Venture:

Ami Onco-Theranostics LLC was incorporated as a limited liability company on January29 2015 in the State of Delaware U.S.A. as an international corporate joint venturebetween Ami Onco-Theranostics LLC a limited liability company formed under the laws ofNew York state in the United States of America and Ami Organics Limited. AmiOnco-Theranostics LLC is primarily engaged in the business of commercialisingmanufacturing marketing and selling its pharmaceutical products as authorised under theobjects clause of its constitutional documents. During the year of review the jointventure contributed a net loss of Rs. 1.23 Million.

4. Transfer to General Reserves:

During the Financial Year under review your Company has not transferred any amount toGeneral Reserve.

5. Dividend:

In line with the Dividend Distribution Policy of the Company which is available on theCompany's website viz. www. amiorganics.com your Directors are pleased to recommend afinal dividend at the rate of 30% i.e. of Rs. 3.00 per equity share of face value of Rs.10/- for the financial year 2021-22. The proposed dividend subject to approval ofShareholders in the ensuing Annual General Meeting of the Company would result inappropriation of 109.3 Million (inclusive of TDS). The dividend would be payable to allshareholders whose names appear in the Register of Members and the list of beneficialfurnished by the National Securities Depository Limited and the Central DepositoryServices (India) Limited as on the Record date i.e August 1 2022. Final Dividend onceapproved by members shall be disbursed within 30 days of the approval and the date ofdisbursement shall be communicated in advance to the Stock Exchanges BSE Limited andNational Stock Exchange of India Limited.

Dividend Distribution Policy:

In terms of regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("the Listing Regulations") Company hasformulated a Dividend Distribution Policy which is approved by the Board of Directors attheir meeting held on March 22 2022 ["the Board"] and is uploaded on Company'swebsite and the link for the same is http://www.amiorganics.com/corporate-policies.html

Unpaid / Unclaimed Dividend:

IntermsoftheprovisionsofInvestorEducationandProtection Fund (Accounting AuditTransfer and Refund) Rules 2016

/ Investor Education and Protection Fund (Awareness and Protection of Investors) Rules2001 there was no unpaid / unclaimed dividends to be transferred during the FinancialYear under review to the Investor Education and Protection Fund.

6. Subsidiary Company:

Company has incorporated its Wholly owned subsidiary company with the name "AmiOrganics Electrolytes Private Limited" after the end of FY 2021-22 having certificateof incorporation dated June 30 2022. Details of wholly owned subsidiary company andforeign joint venture company have been attached under form AOC-1. (Annexure I)

7. Internal Financial Controls:

Company has adequate Internal Financial Controls System over financial reporting whichensures that all transactions are authorised recorded and reported correctly in a timelymanner. The Company's Internal Financial Controls over financial reporting providesreasonable assurance over the integrity of financial statements of the Company.

Company has laid down Standard Operating Procedures Policies and procedures to guidethe operations of the business. Functional heads are responsible to ensure compliance withall laws and regulations and also with the policies and procedures laid down by themanagement. During the year of review Company has installed Complinity a comprehensiveCloud-based Compliance Management System that tracks and monitors statutory regulatorycentral & state secretarial and legal compliances within the company. It will help tomanage and assess all applicable compliances documents related to the compliancesactivity schedule conduct of audits and tracking and resolving compliance issues of theCompany.

Company tracks all amendments to Accounting Standards the Companies Act and makeschanges to the underlying systems processes and financial controls to ensure adherence tothe same. During the current year the Company assessed impact of changes in Schedule IIIunder the Act and Accounting Standards on its financial reporting and accordingly madenecessary changes in its policies processes and disclosures. All resultant changes to thepolicy and impact on financials are disclosed after due validation with the statutoryauditors and the Audit Committee.

8. Change in nature of Business:

During the financial year under review there has been no change in the nature ofbusiness of the Company.

9. Deposits:

Company has neither accepted nor renewed any deposits during the year under review towhich the provisions of the Companies (Acceptance of Deposits) Rules 2014 applies.

10. Loans Guarantees or Investments made under

Section 186 of the Companies Act 2013:

There were no loans or guarantees given by the Company under Section 186 of theCompanies Act 2013 during the year under review. Investments made during the year werewithin the limits approved by Board of Directors and the limits prescribed under section186 of the Companies Act 2013.

11. Share Capital:

As on 31st March 2022 the authorized share capital of the Company is Rs. 500 Millioncomprising of 50 Million equity shares of I 10 each. The paid up Equity share capital ofCompany as on 31st March 2022 is Rs. 364370620/- divided into 36437062 equityshares of Rs. 10/- each.

a. Buy Back of Securities:

Company has not bought back any of its securities during the year under review.

b. Sweat Equity:

Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus Shares:

Company has not issued any bonus shares during the year under review.

d. Employees Stock Option Plan:

The Company has not provided any Stock Option Scheme to the employees.

e. Fresh Issue of Shares:

During the year under review i. Company issued and allotted 1658374 number of equityshares of face value of Rs. 10/- at a price of Rs. 603/- (including a premium of Rs.593/-) per equity shares aggregating to Rs. 1000 Million on Preferential basis on August10 2021.

ii. Further Company came up with its Initial Public Offer of 3278688 number of equityshares of face value of Rs. 10/- Fresh Issue and Offer for Sale of shares of 6059600equity shares of face value of Rs. 10/- from existing shareholders at a price of Rs. 610/-(including a premium of Rs. 600/-) per Equity share. Total amount aggregating to Rs. 2000Million was raised from the Initial public offer and Rs. 3696 Million from Offer forsale. The Board approved the allotment of total 9338288 equity shares of the Company onSeptember 8 2021.

Equity shares aggregating to 36437062 equity shares were listed on the BSE Limitedand National Stock Exchange Limited on September 14 2021.

12. Directors & Key Managerial Personnel: i) Appointment of Directors:

During the year the Board at their meeting held on February 7 2022 appointed twodirectors on the Board of the Company:

Dr. Anita Bandyopadhyay (DIN: 08672071) as the Additional Non-Executive &Independent Director of the Company for a period of Five (5) years starting from February8 2022 to February 7 2027.

Mr. Ram Mohan Locande (DIN: 08117035) as the Additional Director and Designated asWhole Time Director of the Company for a term of five (5) years starting from February 82022 to February 7 2027.

The above appointments have been approved with requisite majority by the membersthrough special resolutions by means of postal ballot held through remote e voting.

ii) Retirement by rotation:

In accordance with the provisions of section 152(6) of the Act and in terms of theArticles of Association of the Company Mr. Chetankumar Vaghasia (DIN: 01375540) WholeTime Director will retire by rotation at ensuing Annual General Meeting and beingeligible he has offered himself to be re-appointed as Director. The Board proposes hisreappointment to the members.

iii) Re-appointment of Mr. Girikrishna Maniar as an Independent Director of theCompany:

The first term of appointment of Mr. Girikrishna Maniar as an Independent Director ofCompany will expire on April 22 2023.

Board of Directors of the Company based on the recommendation of Nomination andRemuneration Committee and subject to approval of members at the 15th Annual GeneralMeeting by way of Special Resolution has proposed the re-appointment of Mr. GirikrishnaManiar as the Non-Executive Independent Director of the Company for second term of five(5) consecutive years on the Board of the company starting from April 23 2023 till April22 2028.

iv) Resignation and Appointment of Chief Financial Officer:

Chief Financial Officer of the Company Mr. Abhishek Patel resigned from his postafter completing tenure of 4 years at Company and the Board accepted his resignation w.e.fJune 1 2022. Board placed on record its appreciation for his invaluable contribution andcommendable services to company during his tenure as Chief Financial Officer and wishedhim all the success in his future endeavours.

Board at its meeting held on May 21 2022 appointed Mr. Bhavin N. Shah as the ChiefFinancial Officer and Key Managerial Personnel of the Company w.e.f June 1 2022. Mr.Bhavin N. Shah is a member of "The Institute of Chartered Accountants of India "and is having more than 18 years of rich experience in consulting corporate accounts andfinance. Prior to joining the company Bhavin Shah was the Deputy General Manager in SunPharma Advanced Research Co. Ltd. (SPARC) where he was responsible for leading AccountsFinance Taxation Banking Relations and Fundraising. He has also led the finance team atUnimark Remedies and worked as a consultant with Deloitte Haskins & Sells.

13. Board Evaluation:

The evaluation framework for assessing the performance of the Directors of the Companycomprises of contributions at the Meeting(s) and strategic perspective or inputs regardingthe growth and performance of the Company amongst others.

Pursuant to the provisions of the Companies Act 2013 and rules made thereunder and asprovided under Schedule IV of the Act and Listing Regulations the Board has carried anannual performance evaluation of its own performance all the committees of Board and thedirectors individually including Chairman & Managing Director and IndependentDirectors in accordance with the criteria of evaluation approved by Nomination &Remuneration Committee.

Outcome of Evaluation:

Board of the Company was satisfied with the functioning of the Board and itsCommittees. The Committees are functioning well and besides covering the Committees' termsof reference as mandated by law important issues are brought up and discussed in theCommittee meetings. The Board was also satisfied with the contribution of Directors intheir individual capacities

14. Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 and16(b) of the Listing Regulations so as to qualify themselves to be appointed asIndependent Directors under the provisions of the Companies Act 2013 and the rules madethereunder and Listing Regulations.

All the Independent Directors of the Company have registered themselves with the IndianInstitute of Corporate Affairs ("IICA"). Further as per the declarationsreceived all the Independent Directors of Company have either passed or were exempted toclear online proficiency test as per the first proviso to Rule 6(4) of the MCANotification dated October 22 2019 and December 18 2020.

Familiarisation Program for Independent Directors:

The familiarisation program seeks to update the Directors on the rolesresponsibilities rights and duties under the Act and other statutes and about the overallfunctioning and performance of the Company. The policy and details of familiarisationprogramme is available on the website of the Company at www.amiorganics.com

15. Related Parties Transactions:

All related party transactions/arrangements/contracts entered into by the Companyduring the financial year 2021-22 were either undertaken on the basis of omnibus approvalof the Audit Committee or approved by the Audit Committee and/or Board. All related partytransactions were at arm's length basis and in the ordinary course of business incompliance with the applicable provisions of the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

There are no materially significant related party transactions that may have potentialconflict with interest of the Company at large. Details of related party transactionsentered into by the Company in terms of Ind AS-24 have been disclosed in the notes to thestandalone / consolidated financial statements forming part of this Annual Report. FormAOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 is set out in Annexure II to this Report.

Company's Related Party Transactions Policy appears on its website linkhttp://www.amiorganics.com/corporate-policies.html

16. Corporate Governance:

Company has complied with the Corporate Governance requirements under the Act and asstipulated under the Listing Regulations. A separate section on detailed report on theCorporate Governance practices followed by the Company under the Listing Regulations alongwith a certificate from a Practicing Company Secretary confirming the compliance forms apart of the Annual Report.

17. Business Responsibility Report:

Company forms part of the top 1000 listed entities on BSE Limited and National StockExchange of India Limited as on 31st March 2022. Accordingly pursuant to Regulation 34(2)of SEBI Listing Regulations Business Responsibility Report forms part of this AnnualReport describing the initiatives taken by the Company from environmental social andgovernance perspective.

18. Management Discussion and Analysis (MDA):

MDA for the financial year under review as stipulated under the SEBI ListingRegulations is presented in a separate section which forms a part of the Annual Report.

19. Vigil Mechanism:

Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 andCompanies Meeting of Board and its powers Rules 2014 and Regulation 22 of SEBI (ListingObligations and Disclosure Requirements) 2015 Company has constituted a Vigil Mechanismfor directors and employees to report genuine concerns has been established. The format ofreporting and the vigil mechanism and whistle blower policy is regularly updated to theemployees and Directors. The Vigil Mechanism & Whistle Blower Policy has been uploadedon the website of the Company at http:// www.amiorganics.com/corporate-policies.html

20. Board Meetings:

During the F.Y. 2021-22 Twelve (12) meetings of Board were held the details of whichhave been disclosed in the corporate governance report which forms part of the Board'sreport. The maximum interval between any two meetings did not exceed 120 days asprescribed by the Companies Act 2013.

21. Committees of Board:

As required under the provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as on March 31 2022 theBoard has following committees:

• Audit Committee
• Nomination & Remuneration Committee
• Stakeholders Relationship Committee
• IPO Committee
• Corporate Social Responsibility Committee
• Risk Management Committee

During the year all recommendations made by the committees were approved by the Board.A detailed note on the composition of the Board and its Committees including its terms ofreference is provided in the Corporate Governance Report. The composition and terms ofreference of all the Committees of the Board of Directors of the Company is in line withthe provisions of the Act and the Listing Regulations.

22. Risk Management

Risk Management is at the core of the business which provides framework towards riskidentification analysis & prioritization of risks development of risk mitigationplans and reporting on the risk environment of the Company. The Board has constituted aRisk Management Committee as required under Regulation 21 of the SEBI Listing Regulationsto frame implement and monitor the risk management plan of the Company.

Risk Governance Framework is created within the Company in the following lines :

(i) Risk Management Committee : The Committee oversees implementation of mechanism ofOperational Risk Management and guide the organization towards that.

The Committee reports to the Board. The Committee has atleast one independent director.

(ii) Chief Risk Officer (CRO) : CRO is appointed by the Board of Directors and his roleis to facilitate risk management mechanism through decentralized approach providingsupport and guidance to the whole organization.

(iii) Three Lines of Defence : For proper Governance and control the organization hasthree lines of defence.

First line of defence include actual functional owners throughout the organizationmainly consists of MD EDs KMPs other Senior Management and Functional Heads. Thecompany is run by these officials and they are supposed to take care of risks within theirown functional areas.

Second line of defence include Chief Compliance Officer Chief Risk Officer who do notparticipate in day to day operations of the company but facilitate compliance riskmanagement process through support and guidance for other functions

Third line of defence is internal auditors who reports their observations to AuditCommittee.

(iv) Risk Champions / Risk Co-ordinators (RC Group) : The Company has appointed oneofficial from each function who is responsible for carrying out risk managementinitiative within their own functional area. This is under guidance of CRO and their ownfunctional Head. This group is called RC- Group and is instrumental for decentralizedeffective implementation of risk management mechanism.

23. Business Continuity Plan :

Company has also Business Continuity Plan in place which has been designed to ensurecontinuity of critical processes during any disruption. The continual disruptions causedby the COVID 19 pandemic tested the BCP of the Company nevertheless it continued tooperate in line with the procedures outlined in its Business Continuity Plan. As a resultCompany was able to continue to protect and serve customers while taking care of thehealth of their employees.

24. Risk Management Policy :

Company has adopted a Risk Management Policy aimed to ensure resilience for sustainablegrowth and sound corporate governance by having a process of risk identification andmanagement in compliance with the provisions of the Companies Act 2013 and the ListingRegulations.

Company recognises that all emerging and identified risks need to be managed andmitigated to

• Protect its shareholder's and other stakeholder's interests;

• Achieve its business objectives; and

• Enable sustainable growth.

The risk management includes identifying types of risks and its assessment riskhandling monitoring and reporting. The Company has framed a sound Risk Management Policyto identify and evaluate potential business risks and its mitigation and the same hasbecome integral part of Company's day to day operations. The key business risks identifiedby the Company are as follows viz. Industry Risk Management and Operations Risk BusinessRisks Finance Risks Market Risk Regulatory risk Liquidity risk and Technology risk.The Company has worked out mitigation plans for the aforesaid risks. The risk managementpolicy is available at the website of Company at http://www.amiorganics.com/corporate-policies.html

25. Nomination and Remuneration Policy:

The Nomination and Remuneration Policy of the Company inter alia provides that theNomination and Remuneration Committee shall: (i) formulate the criteria for boardmembership including the appropriate mix of Executive

& Non-Executive Directors; (ii) approve and recommend compensation packages andpolicies for Directors and Senior Management; and (iii) lay down the effective manner ofperformance evaluation of the Board its Committees and the Directors.

The salient features of the Nomination and Remuneration Policy of the Company alongwith highlights are outlined in the Corporate Governance Report which forms part of thisReport. The Policy is also available on the website of the Company athttp://www.amiorganics.com/corporate-policies.html

26. Remuneration of Directors Key Managerial Personnel and Senior Management:

The remuneration paid to the Directors Key Managerial Personnel and Senior Managementis in accordance with the Nomination and Remuneration Policy formulated in accordance withSection 178 of the Act and Regulation 19 read with Schedule II of the Listing Regulations.Further details on the same are given in the Corporate Governance Report which forms partof this Annual Report. The information required under Section 197 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofdirectors and employees of the Company is set out in Annexure III & IV to this Report.

27. Corporate Social Responsibility (CSR):

During the financial year 2021-22 the Company has spent Rs. 9.3 Million towards CSRexpenditure. The CSR initiatives of the Company were under the thrust area of health &hygiene education enhancing vocational skills health and sanitation and ruraldevelopment. Company implemented its CSR activities directly and indirectly throughvarious NGOs as implementing agencies. The CSR Policy of the Company is available on thewebsite of the Company at http://www. amiorganics.com/corporate-policies.html

The Company's CSR Policy statement and annual report on the CSR activities undertakenduring the financial year ended 31st March 2022 in accordance with Section 135 of theAct and the Companies (Corporate Social Responsibility Policy) Rules 2014 ("CSRRules") is set out in Annexure V to this Report.

28. Director's Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement;

i. That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for the year under review;

iii. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

iv. That the Directors have prepared the annual accounts on a going concern basis andthe directors had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.

v. That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

29. AUDITORS:

Statutory Auditors:

M/s. Maheshwari & Co. Chartered Accountants bearing ICAI Registration Number:105834W has been appointed as Statutory Auditor of the company for a period of five yearsstarting from the Annual General Meeting held for FY 2018-19 till Annual General Meetingto be held for FY 2022-23. The report of the Statutory Auditors of the Company forms partof the annual report.

The Statutory Auditor has issued Audit Reports with unmodified opinion on theStandalone and Consolidated Financial Statements of the Company for the year ended 31stMarch 2022. The Notes on the Financials Statement referred to in the Audit Report areself-explanatory and therefore do not call for any further explanation or comments fromthe Board under Section 134(3) (f) of the Companies Act 2013.

During the year under review the statutory auditors have not reported to the AuditCommittee under sec?tion 143(12) of the Companies Act 2013 any instance of fraudcommitted against the Company by its offi?cers of employees the details of which wouldneed to be mentioned in the Board Report

Cost Auditors:

Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 are applicable to the Company andaccordingly such records are being maintained. M/s Chirag Vallabhbhai Vekariya & Co.Cost Accountant has been appointed as Cost Auditors of the Company for the conduct of CostAudit for the FY 2022-23. In terms of the provisions of Section 148(3) of the Act readwith Rule 14(a) (ii) of the Companies (Audit and Auditors) Rules 2014 the remunerationpayable to the Cost Auditor is required to be ratified by the Members accordingly aresolution seeking ratification by the Members for the remuneration is listed in the AGMNotice as Special Business. The Cost Audit report for the FY 2020-21 was obtained from theCost Auditors and e Form CRA 4 was filed to the Ministry of Corporate Affairs on time. TheCost Audit Report for the Financial Year ended 31st March 2022 will be filed in duecourse.

Internal Auditors:

Company has in place an adequate internal audit framework to monitor the efficacy ofinternal controls with the objective of providing to the Audit Committee and the Board ofDirectors an independent and reasonable assurance on the adequacy and effectiveness ofthe organization's risk management internal control and governance processes. Theframework is commensurate with the nature of the business size scale and complexity ofits operations with a risk based internal audit approach.

For the FY 2021-22 Company appointed K. C. Mehta & Co. LLP as the InternalAuditors for conducting Internal audit of systems and processes providing ofobservations impact and recommendation to strengthen the internal control framework andadvise on internal control process gaps of the company. The Internal Auditors report tothe Audit Committee on quarterly basis. Several recommendations were received from theInternal Auditors and most of them were complied by the management during the FY 2021-22.Company has reappointed K. C. Mehta & Co. LLP as the Internal Auditors for conductingInternal audit of the company for FY 2022-23.

Secretarial Auditors:

The Board appointed M/s Kashyap Shah & Co. Practicing Company Secretary toconduct secretarial audit for the financial year 2021-22. The secretarial audit report forthe financial year ended March 31 2022 is annexed herewith marked as Annexure VI to thisreport.

Additionally in line with SEBI Circular dated February 8 2019 an Annual SecretarialCompliance Report confirming compliance with all applicable SEBI Regulations Circularsand Guidelines by the Company was issued by the Secretarial Auditors and filed with theStock Exchanges. It is annexed to this report as Annexure VII. The remarks provided in thereport are self-explanatory. The Secretarial Audit Report and/or Secretarial ComplianceReport does not contain any qualification reservation or adverse remark.

30. Compliance of applicable Secretarial Standards:

During the year of review Company has complied with the applicable provisions ofSecretarial Standards (I & II) issued by the Institute of Company Secretaries of Indiaand approved by the Central Government under section 118(10) of the Companies Act 2013.

31. Disclosure under the Sexual Harassment of Women at workplace (Prevention ofProhibition and Redressal) Act 2013.

Company has in place an Anti-Sexual Policy in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013("POSH Act"). All employees (permanent contractual temporary trainees) arecovered under this policy. Company has constituted the Internal Complaints committeeconsisting of male and female employees of Company and a reputed female lawyer as anexternal member of the internal complaints committee. Three internal committees have beenconstituted at all place of business locations of the Company.

Company has also submitted the Annual report under POSH Act to the District Officer ofconcerned locations.

Regular awareness sessions and interaction programmes with female employees are held.As per the Annual Report of Internal Complaints Committee there was a single case ofsexual harassment complaint received from a female employee of Company during theFinancial Year 2021-22. The case was heard at the meeting of Internal Complaints CommitteeMeeting and was resolved upon voluntary withdrawal of complaint by the complainant.

32. Conservation of Energy Technology Absorption and Foreign Earnings andOutgo:

Pursuant to 134(3)(M) Of the Companies Act 2013 Read with Rule 8(3) of the Companies(Accounts) Rules 2014.

Conservation of Energy:

All business units continued their efforts to improve energy usage efficiencies andincrease the share of renewable energy. Various key performance indicators like specificenergy consumption (energy consumed per unit of product) energy costs and renewableenergy contributions were continuously tracked to monitor alignment with the Company'soverall sustainability approach.

i) Steps taken for conservation of energy: a) Installed VFD in Brine Plant. b)Installed ATFD machines to reduce power consumption c) Installed ACs with effective energyconservation d) Improvement in recovery of steam condensate water to reuse in boiler. e)Automatic buttons on reactors for lighting and energy saving. f) Company has upgraded itseffluent treatment new air blower with membrane diffuser system in aeration tank andreplaced surface aerator in ETP. This will help to improve the DO level in aeration tankand also reduce energy consumption. g) Replacement of old pumps and motor with highefficiency pumps & motors. h) Reduction in generation and distribution losses afterconverting into centralized operation of chilled water and sub-zero brine to save power.ii) The steps taken by the Company for utilising alternate sources of energy. NIL

iii) The capital investment on energy conservation equipment's: Rs. 17.53 Million

Technology absorbtion :

i) Efforts in brief made towards technology absorption. Benefits derived as a resultof the above efforts e.g. product improvement cost reduction product developmentimport substitution etc

Company strives through its indigenous in-house R&D to develop technologies thatcreate significant value. R&D enables the innovation based growth agenda of companythrough its technology development strategies. Technological innovation is alsosimultaneously focused on safety health & environmental issues. During the yearCompany focused its R&D efforts on development of new products process improvement ofits existing products recovery of products from pollutants.

During the financial year of review Company has successfully developed andcommercialized 2 products under continuous flow reactors. Continuous flow reactors aremore efficient and sustainable when compared to manufacturing products using traditionalreactors. Company has successfully developed capabilities in plug flow catalyticfixed-bed flow Tubular flow kind of reactors. This technology reduces the cycle time tomanufacture a product which leads to lower utilization of utilities. The space required tofit a flow reactor is considerably lower than the traditional reactors. ii) Thebenefits derived like product improvement cost reduction product development or importsubstitution etc.

With the adoption of new technology using continuous flow reactors the benefits derivedare increase in yield reduction in timelines of the reaction process proportionatereduction in cost of manufacturing and reduction in power consumption. Company increasedyield of its four products decreased consumption of raw materials in eight productsdecreased consumption charge of solvent in product recovered few product from pollutantsand introduced 17 new products. iii) In case of imported technology (imported duringthe last 3 years reckoned from the beginning of the financial year) following informationmay be furnished:

Company has not imported any technology and hence not applicable.

Expenditure incurred on Research and Development :

(Amount in Rs. Million)
Particulars 2021-2022 2020-2021
Revenue Expenditure 47.47 34.20
Capital Expenditure 22.95 55.91

Foreign Exchange Earnings and Outgo :

(Amount in Rs. Million)
Particulars 2021-2022 2020-2021
Foreign Exchange Outflows (outgo) 1210.70 1728.65
Foreign Exchange Inflows (earnings) 3010.38 526.68

33. Disclosure in respect of scheme formulated under section 67(3) of the Companiesact 2013:

Company has not formulated any scheme in terms of Section 67(3) of the Companies Act2013 for the benefit of employees.

34. Disclosures pursuant to section 197 (14) of the Companies act 2013:

None of the Directors of the Company are in receipt of any commission from any holdingor subsidiary Company.

35. Annual Return

Pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Managementand administration) Rules 2014 Annual Return of the Company for the FY 2020-21 has beenplaced at website of the Company at https://www. amiorganics.com/annual-reports.html

36. Awards and Recognitions:

The year gone by has been a remarkable year for the company. Company was conferred withthe following prestigious awards :

i. Company has been awarded with the prestigious FIST Award 2021 in the category "Safe and Secure Manufacturing Facility " FIST awards are annual awards initiated byFire & Security Association of India (www.fsai.in). The awards recognize extraordinarycontribution of organization and individuals in the field of security safetyfirefighting and emergency response.

ii. FGI Award for Outstanding Business Leader :

Managing Director Mr. Nareshkumar Patel has been awarded with the prestigious"Outstanding Business Leader" award hosted by the Federation of GujaratIndustries. The award felicitates the excellence of business leader in the field ofInnovation ambition and clarity of vision of an Entrepreneur/ Business Leader overallmanagement inputs to increase productivity and reducing cost strong leadership with theability to drive the business forward and solve day to day business problems.

37. Other Disclosures : i. Statement of Deviation(s) or Variation(s)-

In terms of Regulation 32 of the Listing Regulations there was no deviation orvariation in connection with the terms of the objects of the issue mentioned in theProspectus dated September 6 2021 in respect of the Initial Public Offering of theCompany. –

The net proceeds of the Initial Public Offer of Rs. 3000 million inclusive ofpreferential allotment of Rs. 1000 Million to qualified investors were utilised inaccordance with the objects mentioned in the Prospectus dated September 6 2021. Thestatement of utilisation of IPO proceeds as on March 31 2022 is provided as below:

(Rs. In Millions)
Original Object Modified Object if any Original Allocation as per Prospectus dated Sept 6 2021 Modified allocation if any Funds Utilised till March 31 2022
Repayment/prepayment of certain financial facilities availed by our Company Not Applicable 1400.00 Not Applicable 1400.00
Funding working capital requirements of our Company Not Applicable 900.00 Not Applicable 500.00
General Corporate Purpose Not Applicable 459.31 Not Applicable 181.17
Total 2759.31 2081.17

*Offer related expenses amounted to Rs. 240.69 million

ii. Significant and Material Order passed by the Regulators/ Courts:

During the year no significant and material order was passed by any of the Regulatorsor courts in respect of any litigation involving the Company.

iii. Disclosure under the Insolvency and Bankruptcy Code

2016:

During the year under review No application has been made or any proceeding is pendingunder the Insolvency and Bankruptcy Code 2016.

iv. Disclosure on one-time settlement with Banks or Financial Institutions:

During the year under review no one-time settlement is done with Banks and FinancialInstitutions and as such there is no difference between amount of the valuation done atthe time of one time settlement and the valuation done while taking loan from the Banks orFinancial Institutions.

v. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report.

There are are no material changes and commitments affecting the financial position ofthe Company which occurred between the end of the financial year 2021-22 to which thefinancial statements relate and the date of the report.

38. Human Resources:

Board acknowledges the impeccable contribution of all employees at all levels ofhierarchy whether at lower junior mid or senior levels. Each and every employee of thecompany is an important factor and contributor to the growth and success story oforganization. During the period under review the personal and industrial relations withthe employees remained cordial in all respects. The management has carried out systematicappraisal of performance and imparted training at periodic intervals. The Companyrecognizes talent and has judiciously followed the principle of rewarding performance. Inthe last year owing to the challenges posed by the second wave of Covid pandemicCompany's HR department had strategically undertaken various measures to combat theoutbreak of CoVID 19 among its employees. Proper care was taken to provide safe andhealthy work environment to employees by providing safe work place by ensuring covidrelated guidelines regular health checkups thermal screening and regular sanitization ofwork place. Company also undertook a drive to vaccinate without any charges free to allthe employees and workers of Company.

During the start of financial year Company had acquired two business units of GujaratOrganics Limited -one in Ankleshwar and another in Jhagadia. As a part of businesstransfer agreement Company had absorbed all the employees of Ankleshwar and Jhagadia unitinto its payroll Although a massive task but the HR department of Company took up thechallenge and had effectively integrated 170 employees of the units into the Company'spayroll and work culture. Appointment letters trainings familiarization programmes andinduction were provided to the employees so absorbed. During the year Company alsoundertook its progressive plan to digitize the entire payroll attendance taxcalculation leave management etc. operations of the HR department with the installationof TCS Chroma HR module. Forward looking management is in process of redesigning anddigitizing the recruitment and performance appraisal activities to achieve efficiency andsaving of manpower costs and time. During the year several cultural activities andtraining programs for the employees were successfully organized to keep up the employeesskills motivation and zeal.

39. Cautionary Statement

Statements in this Directors' Report and Management Discussion and Analysis Reportdescribing the Company's objectives projections estimates expectations or predictionsmay be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed orimplied. Important factors that could make difference to the Company's operations includeraw material availability and its prices cyclical demand and pricing in the Company'sprincipal markets changes in Government regulations Tax regimes economic developmentswithin India and the countries in which the Company conducts business and other ancillaryfactors.

40. Acknowledgment:

The Board takes this opportunity in expressing their gratitude and appreciation to thevarious Government Authorities Company's stakeholders' bankers business associatesconsultants for their continued support extended to the Company. The Board alsoacknowledges the continuous support received from its shareholders stakeholders valuedcustomers suppliers and employees of the Company.

On behalf of the Board
For Ami Organics Limited
Sd/-
Nareshkumar R. Patel
Place: Surat Chairman & Managing Director
Date: July 15 2022 DIN: 00906232

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