Samrat Pharmachem Limited

The Directors are pleased to present the 29th Annual Report on the business andoperations of the company and the financial accounts for the year ended 31 March 2021.

FINANCIAL PERFORMANCE

Other Financial Disclosures

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which this financialstatement relates on the date of this Report.

During the financial year there was no amount proposed to be transferred to theReserves. Capital Expenditure during the year was at Rs. 272 Lakhs (Rs. 76 Lakhs in theprevious year).

During the year your Company did not accept any public deposits under Chapter V of theCompanies Act 2013.

Your Company manages cash and cash flow processes assiduously involving all parts ofthe business. There was a net cash surplus of 2.12 lakhs (financialyear 2019-20: - 124.54Lakhs) as on 31st March 2021. The Company's low debt equity ratio provides ample scopefor gearing the Balance Sheet should the need arise. Foreign Exchange transactions arefully covered with strict limits placed on the amount of uncovered exposure if any atany point in time. There are no materially significant uncovered exchange rate risks inthe context of Company's imports and exports. The Company accounts for mark-to-marketgains or losses every quarter end are in line with the requirements of Ind AS 21. Thedetails of foreign exchange earnings and outgo as required under Section 134 of theCompanies Act 2013 and Rule 8(3) of Companies (Accounts) Rules 2014 are mentioned below:

Covid-19 Pandemic

The COVID-19 Pandemic has affected the industrial environment throughout the financialyear 2020-21. The volume of business affected by the pandemic vary in differentindustries. The tourism airlines transport real estate & retail have been badlyaffected by COVID 19 pandemic other industries too have reciprocal effect. In case ofpharmaceutical industry the effect was minimum. The company had taken all measures ofsafety for its workers & employees. The working/operation has remained smooth duringthe new normal. Since the company manufactures pharmaceutical intermediateries it wasexempted for restrictions and was not much affected by lockdown & travel restrictions.

The Company further initiated safety measures by vaccinating its workers &employees to achieve safety level. So far maximum workers and employees have beenvaccinated with 1st dose and some have completed both doses. The COVID 19 pandemic had nomajor impact on the sales of the company. The measures initiated by the company will helpovercome the pandemic stituation and company expects normal operation growth &profitability in FY 2021-22.

OPERATIONS

Your company has performed extremely well during the year. In a highly competitiveuncertain and volatile business environment your Company achieved a turnover of Rs. 17902Lakhs as against Rs. 13745 Lakhs achieved last year - an increase of more than 30%.

DIVIDEND

In order to conserve the resources your Directors do not recommend payment of Dividendfor the financial year ended 31st March 2021.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND

Your Company did not have any funds Iying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation & Protection Fund.

EXPORTS

During the year 2020-21 your company's export division registered FOB sales of Rs. 1366Lacs from Rs. 693 Lacs achieved last year. Your Company has initiated several exportpromotion measures to increase exports. The products of your Company have been wellaccepted in the international market and the Company expects better export turnover in thecoming years.

DEMATERIALISATION

The equity shares of the Company have been dematerialized by joining the depositoriesviz. National Securities Depository Limited (NSDL) & Central Depository Services(India) Limited (CDSL). The ISIN (International Securities Identification Number) No.allotted to the Company is INE103E01016.

LISTING OF SHARES

The Company's shares are listed on the BSE Ltd. It has paid the listing fees of thesaid exchange for the period upto 31st March 2022. Your Company has not been delisted onthis exchange for non-payment of listing fees.

INSURANCE

The assets of the company have been adequately insured against all possible risks withICICI Lombard General Insurance Co Ltd

WEBSITE

Your company's website address is www.samratpharmachem.com. The performance of theCompany is regularly updated and made available on this website. The website providesother vital information about the Company.

SAFETY HEALTH & ENVIRONMENT (SHE) POLICY

As a responsible corporate citizen the Company is fully aware of its responsibilitiesfor protection of the environment and to provide its employees a safe and hazard free workplace. The Company has adopted a Safety Health & Environment Policy that applies toall employees and activities. The work culture encourages total involvement and commitmentof the employees to the SHE Policy.

Some of the activities carried out during the year are as follows.

Safety:

• Providing necessary equipment's and apparatus required for the safe operation ofthe manufacturing activities

• Observing the rules and regulations with regard to safety & precaution

• Consulting emergency control management team to monitor the safety of the plant

• Conducting regular safety audit

• Encouraging the workforce to use protective equipment's and maintain cleanliness

• Conducting seminars to impart knowledge to employees on safe operations

• Organising safety week to create safety awareness

Health:

• Conducting medical health check up for all the employees of the Companyperiodically

• Conducting lecture meetings for providing guidance and counselling on matters ofhealth diet and exercise

• Conducting seminars to impart knowledge on meditation yoga and anti-stresstherapy

Environment:

• Ensuring smooth functioning of the effluent treatment plant with respect to airwater and solid waste.

• Updating the ETP plant to make it more nature friendly

• Proper monitoring of the pollution levels in and around the plants

• Planting trees in and around the factory

• Complying with the prescribed norms of pollution control

PERSONNEL

As on 31^st March 2021 the total number of employees on the payroll of thecompany were 27. Industrial relations with employees at various levels continue to becordial.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In pursuance to the provisions of the Companies Act 2013 and Articles of Associationof the company Mr. Rajesh Mehta Director retires by rotation and being eligible hasoffered himself for re-appointment.

As per the provisions of the Act the Independent Directors are not liable to retire byrotation. The Independent Directors of your Company have given the certificate ofindependence to your Company stating that they meet the criteria of independence asmentioned under Section 149(6) of the Companies Act 2013 and the Listing Regulations. Thedetails of training and familiarization program and Annual Board Evaluation process forDirectors have been provided in the Corporate Governance Report. The policy on Director'sappointment and remuneration including criteria for determining qualifications positiveattributes independence of Director and also remuneration for key managerial personneland other employees forms part of the Corporate Governance Report of this Annual Report.

The company has received declaration from all the independent directors confirming thatthey meet the criteria of independence as prescribed under section 149(6) of the CompaniesAct 2013.

The company has devised a policy for the performance evaluation of independentdirectors Board committees and other individual directors which include criteria forperformance evaluation of nonexecutive directors and executive directors. The manner inwhich the evaluation is carried out has been explained in the Corporate Governance Report.

SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES

Your company has no subsidiaries joint ventures or any associate companies during theyear.

MEETING OF THE BOARD

During the year under review 6 Board Meetings were held. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013. For furtherdetails please refer to the Corporate Governance Report attached to this Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of the 3 Directors namely Mr. Mahendra Pipalia(Chairman) and Mr. Samir Kothary and Ms. Renu Dharod as other members of the committee.

This committee recommends and reviews the unaudited & audit financial results. italso recommends the appointment/re-appointment of Statutory Auditor Tax Auditor & GSTAuditor. It also oversees whistle blower policy and makes recommendation to the Board fromtime to time. The committee also guides the Board for improving MIS systems digitalisingbusiness operations and making all operations online & law compliant. The Board hasaccepted all recommendations made by the audit committee during the year.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of the 3 Directors namely Mr.Samir Kothary (Chairman) and Mr. Mahendra Pipalia and Ms. Renu Dharod as other members ofthe committee.

This committee recommends and reviews the appointment and remuneration of Directors. Ithas adopted a policy which deals with the appointment and remuneration of directors andkey managerial personnel. The adopted policy decides about the manner of selection ofexecutive directors key managerial personnel and independent directors. The policy alsodecides about the criteria to be followed for recommending the remuneration of directorsand key managerial personnel.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee comprises of the 3 Directors namely Ms. RenuDharod (Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as other members ofthe committee.

The committee reviews investor services reviews work done by the share transfer agentincluding adherence to the service standards & resolve investor grievance.Thecommittee also advises the company on various shareholders' related matters.

RISK MANAGEMENT COMMITTEE

The Risk Management Committee comprises of the 3 Directors namely Ms. Renu Dharod(Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as other members of thecommittee.

The risk management committee of the board oversees and reviews the risk managementframework as well as the assessment of risks their management and mitigation procedures.They also discuss with senior management regarding enterprise risk management (ERM) andmanagement of cyber security risks. They also assess business risk credit risk disastermanagement and proper coverage of insurance of the fixed assets of the Company includingtheir safety and security.

HEALTH SAFETY AND SUSTAINABILITY COMMITTEE

The Health Safety and Sustainability Committee comprises of the 3 Directors namelyMs. Renu Dharod (Chairperson) and Mr. Mahendra Pipalia and Mr. Samir Kothary as othermembers of the committee.

The Committee establishes with management long term environmental and socialsustainability health and safety goals and evaluate the Company's progress against thosegoals and report to the Board. It also considers and advises management of emergingenvironmental and social sustainability issues that may affect the business performanceor reputation of the Company and make recommendations as appropriate on how managementcan address such issues;

The committee monitors the company's risk management processes related to environmentaland social sustainability health and safety with particular attention to managing andminimising environmental risks and impacts. The Committee also advises the management onimplementing maintaining and improving environmental and social sustainability healthand safety strategies implementation of which creates value consistent with long termpreservation and enhancement of shareholder value.

It also reviews handling of incident reports pollution control measures results ofinvestigations into material events findings from environmental and socialsustainability health and safety audits and the action plans proposed pursuant to thefindings.

CONSTITUTION OF CSR COMMITTEE

The Company has constituted CSR Committee which comprises of 6 Directors namely Mr.Lalit Mehta Mr. Rajesh Mehta Mr. Megh Mehta Mr. Mahendra Pipalia Mr. Samir Kothary& Ms. Renu Dharod. The Chairperson of the Committee is Ms. Renu Dharod.

The Committee formulates reviews and recommends to the Board a CSR policy indicatingthe activities to be undertaken by the Company as specified in schedule VII of theCompanies Act 2013;

The brief outline of the corporate social responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure I of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which is a part of thisreport. This Policy is available on the Company's website www.samratpharmachem.com

BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performanceBoard Committees and individual directors pursuant to the provision of Act and theCorporate Governance requirement as prescribed by Securities and Exchange Board of India(SEBI) (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations"). The performance of Board was evaluated by the Board ofDirectors after seeking inputs from all directors on the basis of criteria such as BoardComposition & Structure Effectiveness of Board Process Information and functioningetc.

In separate meeting of Independent directors' performance of Non-Independent Directorsperformance of the Board as whole and performance of Chairman was evaluated taking intoaccount the views of executive directors and non-executive directors.

POLICIES

We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our corporate governance policies are available on ourwebsite (www.samratpharmachem.com). These policies are reviewed periodically by the Boardand updated based on need and new compliance requirement.

Policies adopted by the Company:

REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

For more information on the remuneration of Executive Directors & KMP please referto the Annexure II to the Directors Report

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors reportthat: -

1. That the preparation of accounts for the Financial Year ended 31st March 2021 theapplicable accounting standards read with requirements set out under Schedule III of theAct have been followed along-with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive true and fair view of the state of affairs of the Company at the end of the FinancialYear and the Profit or Loss of the Company for the year on that date;

3. 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;

4. That the Directors' have prepared the accounts for the financial year ended 31stMarch 2021 on a going concern basis.

5. That the Directors have laid down internal financial control to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively; and

6. That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such system are adequate and operatingeffectively

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by the managementand the relevant board committees including the audit committee the board is of theopinion that the company's internal financial controls were adequate and effective duringthe financial year 2020-21.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required under regulation 34 of SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 the Management Discussion and Analysis Report is enclosedas a part of this annual report.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is provided together with a Certificate fromthe Corporate Governance Auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under Listing Regulations. A Certificate of the CEO andCFO of the Company in terms of Listing Regulations inter-alia confirming the correctnessof the financial statements and cash flow statements adequacy of the internal controlmeasures and reporting of matters to the Audit Committee is also annexed to the annualreport.

SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

During the year under review there were no cases reported pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

The Company has complied with the applicable provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules madethereunder including constitution of the Sexual Harassment Committee i.e. InternalComplaints Committee.:

AUDITORS

M/s. Shah & Savla LLP Chartered Accountants (FRN : 109364W/W100143) are to bere-appointed as Statutory Auditors of your Company for the second term of fiveconsecutive years. The Auditors have confirmed that they are not disqualified from beingre-appointed as Auditors of the Company. The Report given by the Auditors on the financialstatement of the Company is part of this Report. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report. Duringthe year under review the Auditors had not reported any matter under Section 143 (12) ofthe Companies Act 2013.

AUDITORS REPORT

The report of Statutory Auditors alongwith notes to schedules is a part of the AnnualReport. There has been no qualification reservation adverse remark or disclaimer givenby the Auditors in their report. Further there is no incident of fraud requiring reportingby Auditors under section 143(12) of the Companies Act 2013.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal financial control procedures commensuratewith its size and the nature of business.

The Company has appointed an Internal Auditor who periodically conducts audit of theadequacy and effectiveness of the internal controls laid down by the management andsuggest improvements. During the year under review no material or serious observation hasbeen received from the Statutory Auditors of the Company for inefficiency or inadequacy ofsuch controls.

The Audit Committee of the Board of Directors approves the annual internal audit planand periodically reviews the progress of audits as per approved audit plans.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the financial year 2020-21 for all applicablecompliances as per SEBI Regulations and Circulars/Guidelines issued thereunder.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s. A. A. Mulla & Associates a firm of company Secretaries in practice toundertake the Secretarial Audit of the Company for the financial year 2021-22. TheSecretarial Audit Report submitted by the Secretarial Auditor is enclosed herewith as apart of this report and shown as Annexure III.

The Secretarial Audit Report contains qualification reservation or adverse remarkpertaining to non-compliance under SEBI (LODR) Regulations 2015 which has been compliedwith & penalty imposed by BSE has been paid.

SECRETARIAL STANDARDS

The Company has complied with all the applicable provisions of Secretarial Standard-1and Secretarial Standard- 2 as issued by the Institute of Company Secretaries of India.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operations in future.

RELATED PARTY TRANSACTION/DISCLOSURE

There are no related party transactions made by the company during the year. None ofthe transactions with related parties fall under the scope of Section 188(1) of the Act.Accordingly the disclosure of related party transactions as required under Section134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2020-21 andhence does not form part of this report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31st March 2021 is available on the Company's website onhttps://www.samratpharmachem.com/wp-content /uploads/2021/08/Mar- 2021-MGT7.pdf

LOANS GUARANTEES AND INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

PARTICULARS OF EMPLOYEES

Under the provision 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) 1956read with Companies (Particulars of Employees) Rules 2014 the particulars of theemployees as required to be mentioned in the Annual Report is not applicable to thecompany.

SHARES ISSUED UNDER EMPLOYEE STOCK OPTION SCHEME (ESOS)

No shares have been issued to the employees under Employee Stock Option Scheme (ESOS)during the year. PUBLIC DEPOSITS

The Company has not invited and accepted deposits from the public during the financialyear ended 31^st March 2021.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY & TECHNOLOGYABSORPTION

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed pursuant to the provisions ofSection 134 of the Act read with Rule 8 of the Companies (Accounts Rules) 2014 is givenhereunder.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Company continues to explore & implement measures that will help inconservation and saving of energy.

Measures taken & benefits derived are as follows:

• Hot water coming from steam traps is recycled & used as boiler feed water.

• Using economiser effectively to pre-heat boiler feed water.

• Timely & routine preventive maintenance of boiler.

• Improvement in unit operations leading to reduction in processing time inreactor centrifuge drier & other equipment's to minimize use of electricity.

• Hot water coming from steam traps is recycled & used as boiler feed water.

TECHNOLOGY ABSORPTION

The management has focused on productivity and quality improvement in order to optimizemanufacturing costs. This has helped in achieving optimum manufacturing costs improvedquality of products and consequently enhanced customer satisfaction. The company usesindigenous technology.

DISCLOSURE REQUIREMENTS

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation towards all associatesincluding customers suppliers financial institutions bankers employees consultantsshareholders and to all those who have extended their committed support to the progress ofthe Company.