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Granules India Ltd.

BSE: 532482 Sector: Health care
NSE: GRANULES ISIN Code: INE101D01020
BSE 13:49 | 27 Jan 292.65 -8.40
(-2.79%)
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290.05

NSE 13:39 | 27 Jan 294.00 -7.15
(-2.37%)
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300.00

HIGH

300.00

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290.00

OPEN 300.50
PREVIOUS CLOSE 301.05
VOLUME 60387
52-Week high 404.50
52-Week low 285.80
P/E 17.74
Mkt Cap.(Rs cr) 7,258
Buy Price 293.00
Buy Qty 75.00
Sell Price 293.20
Sell Qty 75.00
OPEN 300.50
CLOSE 301.05
VOLUME 60387
52-Week high 404.50
52-Week low 285.80
P/E 17.74
Mkt Cap.(Rs cr) 7,258
Buy Price 293.00
Buy Qty 75.00
Sell Price 293.20
Sell Qty 75.00

Granules India Ltd. (GRANULES) - Director Report

Company director report

Dear Members

The Board of Directors are pleased to present the Company's 30th AnnualReport and the Company's audited financial statements (standalone and consolidated) forthe financial year ended March 31 2021.

• FINANCIAL RESULTS:

The Company's financial performance for the year ended March 312021 is summarizedbelow:

(Rs. in lakhs)

Standalone

Consolidated

Particulars Year ended March 31 2021 Year ended March 31 2020 Year ended March 31 2021 Year ended March 31 2020
Revenue from Operations 313498.24 230992.83 323754.28 259864.65
Other Income 1372.32 2645.67 2688.18 3655.52
Total Income 314870.56 233638.50 326442.46 263520.17
EBITDA with Other Income 87509.55 52059.38 88211.09 56187.35
Less: Finance Costs 2377.39 2686.22 2628.41 2702.38
Less: Depreciation 11845.14 10182.44 15146.25 13695.35
Profit before exceptional item tax share of profit of joint venture and associate 73287.02 39190.73 70436.43 39789.62
Exceptional item - (16111.87) - (2773.90)
Profit before tax share of profit of joint venture and associate 73287.02 55302.60 70436.43 42563.52
Share of profit in joint venture and associate net of tax

-

2549.09
Profit Before Tax 73287.02 55302.60 70436.43 45112.61
Less: Tax Expenses 18008.71 10895.70 15490.53 11572.78
Profit for the year 55278.31 44406.90 54945.90 33539.83
Add: Surplus Brought Forward from Previous Year
Surplus Available 85110.24 43768.43 83190.09 52715.35
Appropriations made to Surplus:
Dividends including dividend tax (2474.77) (3065.09) (2474.77) (3065.09)
Transfer to General Reserve - -
Balance carried to Balance Sheet 137913.78 85110.24 135661.22 83190.09
Basic Earnings per share 22.18 17.47 22.05 13.19
Diluted Earnings per share 22.09 17.41 21.95 13.15

Note: The above figures are extracted from the standalone and consolidated financialstatements.

• OVERVIEW OF FINANCIAL AND BUSINESS OPERATIONS:

The Company's Standalone revenues from operations was Rs.313498.24 lakhs for the FY2020-21 as compared to Rs.230992.83 lakhs for the previous year registering growth of36%. The Company has made Net Profit of Rs.55278.31 lakhs on standalone basis for theyear under review as compared to Rs.44406.90 lakhs for the previous year an increase of24%.

The primary growth driver in FY 2020-21 was led by change in product mix. On astandalone basis the Finished Dosages (FD) business contributed the largest share ofrevenue of the Company at 50% while Pharmaceutical Finished Intermediates (PFI) and ActivePharmaceutical Ingredients (API) contributed 20% and 30% respectively while it was 35%17% and 48% for API PFI and FD respectively for the FY 2019-20.

In the FY 2020-21 we have filed three ANDAs in USA two Dossiers in Europe three ANDSfilings in Canada and one Dossier in South Africa. These filings reflect our strategy toexpand our dossier filings to global markets apart from US. We have also filed five USDMFs three CEP (Certificate of Suitability) with EDQM and one ASMF which will be usedfor building future revenue from API business. The management believes that it willcontinue to strengthen its position through dedicated research and introduction of newproducts. During the year under review we have also received six (6) ANDA approvals fromUSFDA one approval in Europe and one approval in Canada for our Formulations business.

Vertical integration has always been the strength and focus area of the Company. Itwill continue its focus on its existing business and strengthen it by enhancing itscapacities improving operational efficiencies adding new products moving up in thevalue chain and most importantly offering better services to the customers. The Companywill continue to solidify its business model and build systems that are sustainable as itcontinues to scale-up.

• EXPANSION PROGRAMS AND PROJECTS:

Establishment Inspection Report was received during the year under review from USFDAfor the Gagillapur facility located in Hyderabad. As part of expansion program capacityenhancement at our Gagillapur facility with Multiple Unit Pellet System (MUPS) facility isin the progress and it will be commercialized soon. Expansion of capacity formanufacturing multiple APIs at Unit -V Visakhapatnam is also undertaken during the yearunder review.

• COVID-19:

Pharmaceutical industry was categorized under essential commodities and allowed tooperate during the lockdown. The Company has taken the adequate steps about the health andsafety of the employees and formed a separate COVID 19 task force team. The Company hasalso initiated measures like thermal screening sanitation of buses and awarenesscampaigns have been conducted through videos. There is no significant impact on theoperations of the Company during the year under review.

• DIVIDEND:

The Board of Directors has recommended a final dividend of 75 paisa per equity share(Face value Rs.1/- per equity share) for the FY 2020-21. This is in addition to theinterim dividend of 75 paisa per equity share paid during the year. The total dividend forthe FY 2020-21 aggregates to Rs.1.50/- per equity share as compared to Rs.1/- per equityshare paid in the previous year.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.The Dividend Distribution Policy of the Company may be accessed on the Company's websiteat: www.granulesindia.com

• MATERIAL CHANGES AFFECTING THE COMPANY:

There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.

• SHARE CAPITAL:

The Authorised Share Capital of the Company is 505000000 equity shares of Rs.1/-each. The Company had bought back 7101374 equity shares of Rs.1/- each during thefinancial year 2020-21. The Company also had allotted 528608 equity shares of Rs.1/- eachin trenches upon exercise of an equal number of stock options by the employees pursuant tothe Employee Stock Option Scheme of the company.

In view of the above buyback and allotments the outstanding shares of the companydecreased from 254247562 equity shares of Rs.1/- each to 247674796 equity shares ofRs.1/- each during the financial year 2020-21.

• BUYBACK OF EQUITY SHARES OF THE COMPANY:

The Board of Directors of the Company at their meeting held on January 212020 and theShareholders of the Company vide the postal ballot results of which were published onMarch 10 2020 approved the buyback of up to 12500000 (One Crore Twenty-Five Lakh Only)fully paid up Equity Shares of the Company having face value of Rs.1 each (representing4.92% of the total number of Fully paid up Equity Shares of the Company) at a price ofRs.200 (Rupees Two Hundred only) per Equity Share payable in cash for a totalconsideration not exceeding Rs.2500000000 (Rupees Two Hundred and Fifty Crore only)through the "Tender Offer" route as prescribed under the SEBI BuybackRegulations on a proportionate basis from the equity shareholders/beneficial owners ofthe Equity Shares of the Company as on the Record Date.

The total number of Equity Shares bought back under the Buyback were 7101374 (SeventyOne Lakhs One Thousand Three Hundred and Seventy Four) Equity Shares at a price of Rs.200(Rupees Two Hundred Only) per Equity Share. The total amount utilized in the Buyback wasRs.1420274800/- (Rupees One Hundred and Forty Two Crores Two Lakhs Seventy FourThousand and Eight Hundred Only) excluding Transaction Cost.

• TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF):

In terms of Section 124(5) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 unclaimeddividend amounting to Rs.325830/-(three lakh twenty-five thousand eight hundred andthirty only) for the financial year 2012-13 was transferred during the year under reviewto the Investor Education and Protection Fund established by the Central Government.

• MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review as stipulatedunder regulation 34(2) of the Listing Regulations is presented in a separate sectionforming part of the Annual Report.

• SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

SUBSIDIARY COMPANIES THEIR PERFORMANCE AND DEVELOPMENTS

• Granules USA Inc.

Granules USA Inc. a wholly owned foreign subsidiary of your Company caters to therequirements of customers in the U.S market. The Share Capital of the Company as on March31 2021 is Rs.116.31 lakhs. During the FY 2020-21 the Company achieved a turnover ofRs.51588.69 lakhs against the turnover of Rs.34008.04 lakhs for FY 2019-20 and theprofit after tax is Rs.1138.00 lakhs against Rs.565.04 lakhs for FY 2019-20.

• Granules Pharmaceuticals Inc.

Granules Pharmaceuticals Inc. (GPI) a wholly owned foreign subsidiary of your Companylocated in Virginia USA focuses in formulation R&D. The Share Capital of the Companyas on March 31 2021 is Rs.56453.66 lakhs. During the FY 2020-21 the Company achieved aturnover of Rs.50508.57 lakhs against the turnover of Rs.29608.33 lakhs for FY 2019-20and the profit after tax is Rs.6077.84 lakhs against Rs.(808.39) lakhs for FY 2019-20.

During the year FY 2020-21 GPI received seven (7) approvals from US FDA for the ANDAsthat were filed from this facility. Additionally two (2) new ANDAs were filed requestingapproval during the year. During the year under review GPI launched ten (10) new productsunder its own label.

• Granules Europe Limited

Granules Europe Limited is a wholly owned foreign subsidiary set up in UK for focusingon marketing to European customers.

• Granules Life Sciences Private Limited

With increasing Business Requirements during the period under review the Companyincorporated a new wholly owned subsidiary in India "Granules Life Sciences PrivateLimited" with paid-up Capital amounted to Rs.25 Crores.

The Policy for determining material subsidiaries as approved by the Board may beaccessed on the Company's website at: www.granulesindia.com

JOINT VENTURE /ASSOCIATE COMPANIES

During the year under review Granules OmniChem Private Limited an Indian JointVenture Company ceased to be Joint Venture of Granules India Limited.

No other Company has become or ceased to be Company's subsidiaries joint ventures orassociate companies.

As per the provisions of section 129 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a separate statement containing the salient features of thefinancial statements of the subsidiary Companies is prepared in Form AOC-1 and it formspart of the consolidated financial statements.

• CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements in terms of Section 129(3) of the Companies Act2013 and regulation 34 of the Listing Regulations and prepared in accordance with IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 as amended thereof forms a part of this annual report. The consolidatedfinancial statements have been prepared on the basis of audited financial statements ofthe Company its subsidiaries joint venture and associate companies as approved by theirrespective Boards. As per the provisions of Section 136 of the Companies Act 2013 theCompany has placed separate audited accounts of its Subsidiaries on its websitewww.granulesindia.com and copy of separate audited accounts of its Subsidiaries will beprovided to the members at their request.

• COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India.

• DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act 2013 with respectto the Director's Responsibility Statement the Board of Directors of the Company herebyconfirm that:

a) in the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312021 and of the profit ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis for thefinancial year ended March 312021;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

• CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India (SEBI). The report on Corporate Governance as stipulated under the ListingRegulations forms an integral part of this Report. The requisite certificate from theAuditors of the Company confirming compliance with the conditions of corporate governanceis attached to the report on Corporate Governance.

• BUSINESS RESPONSIBILITY REPORT:

Business Responsibility Report for the year under review as stipulated underregulation 34(2) of the Listing Regulations is presented in a separate section formingpart of the Annual Report.

• CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and are on an arm'slength basis. During the year except with the wholly owned subsidiary the Company hadnot entered into any contract / arrangement / transaction with related parties which couldbe considered material in accordance with the policy of the Company on materiality ofrelated party transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at:www.granulesindia.com.

The particulars of contracts or arrangements with related parties referred to insection 188(1) are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) ofsection 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 and the sameis enclosed as Annexure IV to the Board's report.

• CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Composition of the CSR Committee is provided below.

Name Category
Mrs. Uma Devi Chigurupati Chairperson Non-Independent Executive
Mr. Krishna Prasad Chigurupat Non-Independent Executive
Mr. A. Arun Rao Independent Non-Executive

The CSR Policy may be accessed on the Company's website at: www.granulesindia.com

The Company is undertaking CSR initiatives in compliance with Schedule VII to the Act.During the year under review the Company has spent Rs.561.79 lakhs on CSR activities.

During the year under review the Company had spent Rs.37093780 /- in the form ofex-gratia to the temporary/ casual/daily wage workers of the Company to support themduring the unprecedented global pandemic of Covid-19. Explicit declaration in this regardwas given by the Board of Directors of the Company and it was duly certified by thestatutory auditors of the Company. Hence the amount of Rs.37093780 /-was consideredunder CSR spent for the financial year 2020-21 in terms of the General Circular No.15/2020dated April 10 2020 issued by Ministry of Corporate Affairs.

The annual report on CSR activities is annexed herewith marked as Annexure I tothe Board's report.

• NOMINATION AND REMUNERATION COMMITTEE:

The Company's Nomination and Remuneration Committee consists of majority ofNon-Executive Directors two of them are Independent which ensures transparency indetermining the remuneration of Directors KMPs and other employees of the Company. TheChairman of the Committee is an Independent Director thereby resulting in independent andunbiased decisions.

During the financial year 2020-21 the composition of Nomination and RemunerationCommittee is provided below.

Name Category
Mr. Arun Sawhney Chairman Independent Non-Executive
Mrs. Jyothi Prasad Independent Non-Executive
Mr. K.B. Sankar Rao Non-Independent Non-Executive
Mr. Krishna Prasad Chigurupati Non-Independent Executive

The Performance Evaluation and Remuneration Policy framed by the Committee and approvedby the Board is directed towards rewarding performance of Executive and Non-ExecutiveDirectors Key Managerial Personnel and Senior Management Personnel of the Company basedon review of achievements periodically.

• RISK MANAGEMENT:

Risk Management Committee has been entrusted with the responsibility to assist theBoard in (a) overseeing and approving the Company's enterprise wide risk managementframework; and (b) overseeing that all the risks that the organization faces such asstrategic financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks. YourCompany has proper process for risk management.

• INTERNAL FINANCIAL CONTROLS:

Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented digitized and embedded in the business processes. Assurance on theeffectiveness of internal financial controls is obtained through management reviewscontrol self-assessment continuous monitoring by functional experts as well as testing ofthe internal financial control systems by the internal auditors during the course of theiraudits. We believe that these systems provide reasonable assurance that our internalfinancial controls are designed effectively and are operating as intended.

• INTERNAL AUDIT & CONTROLS:

Your Company continues to engage M/s Dhanunjaya & Haranath Chartered Accountantsas its Internal Auditors.

During the year your Company continued to implement their suggestions andrecommendations to improve the internal controls. Their scope of work includes review ofoperational efficiency effectiveness of systems & processes compliances andassessing the internal control strengths in all areas. Internal Auditors findings arediscussed and suitable corrective actions are taken as per the directions of the AuditCommittee on an on-going basis to improve efficiency in operations.

The Company's internal control systems are well established and commensurate with thenature of its business and the size and complexity of its operations. The Audit Committeereviews adequacy and effectiveness of the Company's internal control environment andmonitors the implementation of audit recommendations. The recommendations / suggestions ofthe internal auditors are discussed in the Audit Committee meetings.

• DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Harsha Chigurupati Executive Director of theCompany retires by rotation at the 30th Annual General Meeting and beingeligible offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both under theCompanies Act and the Listing Regulations.

The Board of Directors has complete access to the information within the Company.Independent Directors have the freedom to interact with the Company's management.Interactions happen during Board / Committee meetings when executives of the Company areasked to make presentations about performance of the Company. Apart from this they alsohave independent interactions with the Statutory Auditors the Internal Auditors andexternal advisors appointed from time to time. Further they meet without the presence ofany management personnel and their meetings are conducted informally to enable theIndependent Directors to discuss matters pertaining to the Company's affairs and put forththeir combined views to the Board of Directors of the Company.

Mr. Krishna Prasad Chigurupati Chairman and Managing Director Mrs. Uma DeviChigurupati Executive Director Mr. Harsha Chigurupati Executive Director Mr. SandipNeogi Chief Financial Officer and Ms. Chaitanya Tummala Company Secretary are KeyManagerial Personnel of the Company during the year under review.

• BOARD EVALUATION:

The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. Pursuant to theprovisions of the Companies Act 2013 read with the Rules issued there under and theListing Regulations (including any statutory modification(s) or re-enactment(s) for thetime being in force) the process for annual evaluation of the performance of the Boardits Committees and individual Directors was carried out in accordance with the policies inforce.

• EMPLOYEE STOCK OPTION SCHEME:

The Company's Employees Stock Option Scheme viz. ESOS-2009 has been in place since year2009-10 and the Company has made grants under ESOS-2009 to the eligible employees of theCompany and its subsidiaries. Further grant cannot be made from ESOS-2009 since the tenureof the Scheme was completed during the year under review. However the employees who werealready granted stock options under ESOS-2009 i.e. outstanding stock options as on datecan exercise their option to convert into equal number of equity shares.

The Company during the financial year 2017-18 obtained approval of the members forEmployee Stock Option Scheme 2017 (ESOS-2017) and has made grant under ESOS-2017 to theeligible employees of the Company during the year under review.

The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Scheme. There has notbeen any material change in the Employee Stock Option Schemes during the current financialyear. The Schemes and its implementation are in line with the SEBI (Share Based EmployeeBenefits) Regulations 2014 ("SBEB Regulations") as amended thereof.

The applicable disclosures as stipulated under the SEBI Guidelines as on March 312021(cumulative position) with regard to the Employee's Stock Option Scheme are herein underprovided. The issue of equity shares pursuant to exercise of options does not affect theStatement of Profit and Loss of the Company as the exercise is made at the market priceprevailing as on the date of the grant plus taxes as applicable.

Pursuant to regulation 13 of Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 certificate from M/s. B S R & Associates LLP. Statutory Auditors is given as Annexure II to the Board's report. Voting rights onthe shares issued to employees under the Employee Stock Option Scheme are either exercisedby them directly or through their appointed proxy.

The details of the stock options granted / vested / exercised under the Granules IndiaLimited - Employee Stock Option Scheme 2009 approved by the members in 18thAnnual General Meeting and Granules India Limited - Employee Stock Option Scheme 2017approved by the members in 26th Annual General Meeting are given below:

Sl.

Details of Scheme

No. ESOS-2009 ESOS-2017
(a) Options granted till date un der the scheme 15602800 250000
(b) Pricing formula

Closing market price as on the date prior to the grant date on National Stock Exchange (where there was highest trading volume).

(c) Options vested during the year 438640 NIL
(d) Options exercised during the year 528608 NA
(e) Total number of shares arising as a result of exercise of options 528608 NA
(f) Options lapsed/surrendered during the year 280032 NIL
(g) Options lapsed/surrendered till date under the scheme 8709632 NA
(h) Variation in terms of options NIL NIL
(i) Money realized by exercise of options during the year 41449976 NA
(j) Total number of options in force 6893168 250000
(k) Employee wise details of options granted during the year to be exercised at H 97/- H 353/-
(k)(i) Senior managerial personnel NIL 100000
Name of Employee Designation No. of options
Mr. Sandip Neogi CFO 100000
(k)(ii) Any other employee who receives a grant in any one year of options amounting to 5% or more of options granted during the year. NIL 150000
Name of Employee Designation No. of options
Mr. G N Prashanth Sr. Vice President 100000
Mr. Abhinay Kesanapalli AGM 50000
(k)(iii) Identified employees who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. Not Applicable
(l) Diluted Earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standards - Earning per share. Rs. 22.09 per share
(m) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options the difference between the employee compensation cost that shall have been recognized if it had used the fair value of the options. Not Applicable
(n) Weighted-average exercise price whose exercise price either equals or exceeds or is less than the market price of the stock Rs.78.41/- per share NA
(o) Description of the method and significant assumptions used during the year to estimate the fair values of options. The assumptions and model used for estimating fair value are disclosed in Note 27 of Standalone financial statements.

• AUDITORS & THEIR REPORT:

Statutory Auditors

M/s. B.S.R. & Associates LLP Firm of Chartered Accountants Hyderabad wasappointed as Auditors of the Company for a term of 5 (five) consecutive years at the 26thAnnual General Meeting held on September 28 2017. They have confirmed that they are notdisqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.

Secretarial Auditor

The Board has appointed M/s. Saurabh Poddar & Associates Company Secretaries toconduct Secretarial Audit for the financial year 2020-2021 The Secretarial Audit Reportfor the financial year ended March 312021 is annexed herewith marked as Annexure III tothe Board's Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

• DISCLOSURES:

Meetings of the Board

Six meetings of the Board of Directors were held during the year. The particulars ofmeetings held and attended by each Director are detailed in the Corporate GovernanceReport which forms part of this Report.

Audit Committee

The Audit Committee comprises majority of Independent Directors namely Mrs. JyothiPrasad (Chairperson) Mr. A. Arun Rao Mr. Arun Sawhney and Mr. Krishna Prasad Chigurupatias other members. During the year all the recommendations made by the Audit Committee wereaccepted by the Board.

Vigil Mechanism

The Company has a Vigil mechanism and a Whistle - blower policy in accordance withprovisions of the Act and Listing Regulations under which the employees are free toreport violations of applicable laws and regulations and the Code of Conduct. Protecteddisclosures can be made by a whistle blower through a dedicated e-mail or a letter to theChairperson of the Audit Committee.

The Policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website at: www.granulesindia.com

Code of Conduct

A declaration regarding compliance with the code of conduct signed by the Company'sChairman and Managing Director is published in the Corporate Governance Report which formspart of the annual report.

Particulars of Loans given Investments made Guarantees given and Securities provided

Particulars of loans given investments made guarantees given and securities providedare provided in the standalone financial statement (Please refer to Note No.4A 4B and26(b) to the standalone financial statement).

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureV to the Board's Report.

Extract of Annual Return

The Extract of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9 isannexed as Annexure VI to this report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended thereof a statement showing the names and other particulars of the employeesdrawing remuneration in excess of the limits set out in the said rules forms part of thisReport.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 also forms part of this Report.

However having regard to the provisions of the first proviso to Section 136(1) of theAct the Annual Report excluding the aforesaid information is being sent to the members

of the Company. The said information is available for inspection on all working daysduring business hours at the registered office of the Company. Any member interested inobtaining such information may write to the Company Secretary and the same will befurnished on request. This information may be accessed on the Company's website at:www.granulesindia.com

Your Directors further state that the remuneration paid to the Key managerialPersonnel and others is as per the Remuneration Policy of the Company.

Remuneration from Subsidiaries

During the year under review none of the Managing or Whole-time Director of theCompany had received remuneration from wholly owned subsidiaries of the Company.

Maintenance of Cost Records specified by the Central Government under Section 148 ofthe Companies Act 2013

The Company has complied with the provisions relating to maintenance of Cost Records asspecified by the Central Government under Section 148 of the Companies Act 2013 duringthe year under review.

Policy on Sexual Harassment and Constitution of Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013

The Company has a Policy on "Prevention of Sexual Harassment of Women atWorkplace" for the matters connected therewith or incidental thereto covering all theaspects as contained under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013" and constituted an InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

During the year under review the Company has not received any complaints pertaining toSexual Harassment.

The Company regularly conducts awareness programs for its employees.

GENERAL

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

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend voting orotherwise.

• Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except Employee Stock Option Scheme referred to in this Report.

• The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.

• Cost Audit is not applicable for the financial year 2020-21.

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

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

• ACKNOWLEDGEMENTS:

We express our sincere appreciation and thank our valued Shareholders CustomersBankers Business Partners/ Associates Financial Institutions Insurance Companies andCentral and State Government Departments for their continued support and encouragement tothe Company.

We are pleased to record our appreciation to the sincere and dedicated services of theemployees and workmen at all levels.

On behalf of the Board of Directors
Krishna Prasad Chigurupati
Chairman and Managing Director
Hyderabad May 11 2021 DIN: 00020180

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