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SMS Pharmaceuticals Ltd.

BSE: 532815 Sector: Health care
NSE: SMSPHARMA ISIN Code: INE812G01025
BSE 00:00 | 22 Oct 137.90 -2.25
(-1.61%)
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NSE 00:00 | 22 Oct 137.55 -2.65
(-1.89%)
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OPEN 137.00
PREVIOUS CLOSE 140.15
VOLUME 6019
52-Week high 199.15
52-Week low 80.50
P/E 15.56
Mkt Cap.(Rs cr) 1,168
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 137.00
CLOSE 140.15
VOLUME 6019
52-Week high 199.15
52-Week low 80.50
P/E 15.56
Mkt Cap.(Rs cr) 1,168
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SMS Pharmaceuticals Ltd. (SMSPHARMA) - Director Report

Company director report

To

The Members of

SMS Pharmaceuticals Limited.

Your Directors are pleased to present the 32nd Annual Reportof SMS Pharmaceuticals Limited ("The Company") along with the audited financialstatements for the financial year ended 31st March 2020. The Consolidatedperformance of the Company has been referred to wherever required.

FINANCIAL SUMMARY

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Gross Sales 43307.54 44813.59 43307.54 44813.59
Net Sales 39409.09 41076.28 39409.09 41076.28
Other Operating Income 460.16 308.73 460.16 308.73
Net Revenue from Operations 41194.69 46491.08 41194.69 46491.08
Other Income 511.34 340.31 511.34 340.31
EBIDTA 8503.34 9350.05 8503.34 9350.05
Finance Charges 1221.14 1187.34 1221.14 1187.34
Depreciation 2206.64 1927.29 2206.64 1927.29
Profit Before Tax 5075.56 6235.43 5075.56 6235.43
Taxation 1806.71 2090.08 1806.71 2090.08
Profit After Tax 3268.85 4145.35 3268.85 4145.35
Earnings per share - Basic/Diluted 3.86 4.90 3.73 4.73

STATE OF COMPANY AFFAIRS In Financial & Production terms

During the year 2019-20 the Company had achieved production of 471 M.T.of APIs and their Intermediates in comparison with 501 M.T for the FY 2018-19.The netsales of the Company for the year 2019-20 have reached Rs.41076.03 lakhs as against40080 lakhs for the year 2018-19. The Company has achieved an EPS of Rs.3.86 in the FY2019-20 as against Rs.4.90 in the year 2018-19.

Subsidiaries and Associates

Your Company is having one associate company i.e. "VKT PharmaPrivate Limited". Your Company is holding 42.62% equity shares in the said associatecompany and the share of Profit / (loss) for your company for the financial year 2019-20was Rs.111.48 lakhs. The consolidated financial statements had been prepared as perAccounting Standard (AS) 23 "Accounting for Investment in Associates in ConsolidatedFinancial

Statements" specified under Section 133 of Companies Act 2013 forconsidering the financials of Associate Company. The required form as per the provisionsof the Sec. 129(3) read with rule 5 of Companies (Accounts) Rules 2014 i.e. AOC-I formspart of the Report as Annexure 1.

CHANGE IN NATURE OF BUSINESS

As per the requirements of Rule 8 (5) (ii) of Companies (Accounts)Rules 2014 your Board of Directors specify that there is no significant change in thenature of business of the Company during the last financial year.

COVID - 19

The world is facing an unprecedented challenge in this century withCorona Virus (COVID - 19). World Health Organization (WHO) Geneva has been guiding theworld in handling COVID - 19 and has finally declared on 11th March 2020 as aPandemic through an outbreak in China during December 2019. The world is on tender hook(or on its toes) to stop the spread through various measures including lock-down or workfrom home or isolation with the concept of social distancing. Health care professionalsare struggling to manage increased COVID - 19 cases across the globe. The human being istrying to adopt a new way of life and may soon see a significant change in the lifestyleof the people post-covid-19.

As virus is novel health regulators started screening of existingmedications for the treatment. The pharmaceutical industry was categorized under essentialcommodities and was allowed to operate during the lockdown. At SMS Pharmaceuticals Ltd.steps have been initiated to monitor and control the operations including the travel banthermal screening sanitation of cafeteria and restrooms and awareness campaigns have beenconducted through video mailers posters etc. During the initial period (about a week)of lockdown operations were at a slow pace due to streamlining of processes by theGovernment authorities for movement of materials and personnel. Post the process ofrelaxations operations have started improving on a weekly basis. Sales of goods werealmost normal even in the initial period of lockdown. The Company has created COVID-19task force with internal committee members functional heads and senior team including CFOand organized to have twice a day calls to take decisions on priority. Team SMSPharmaceuticals Ltd. has exhibited very good team work to maintain and accelerateoperations during these toughest days. There is no significant impact on operations of SMSand the Company is poised to generate growth in the operations.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed report on ‘Management Discussion and Analysis'forms part of this report as Annexure – 2.

SHARE CAPITAL

During the year under review the Company had neither issued freshequity/sweat equity shares nor any debentures Employees Stock Option Scheme or any sharebased employee benefits. A report on the same viz. ‘Equity Buildup Report' formspart of this report as Annexure – 3. Listing of shares: Equity shares of theCompany are listed in National Stock Exchange of India (NSE) and BSE Limited (BSE) witheffect from 28th February 2007. [Listing fees has been paid for the year2020-21 to both the Exchanges].

TRANSFER TO RESERVES

Your Company has transferred an amount of Rs.1000 Lakhs

(previous year Rs.1000 Lakhs) to General Reserve out of the amountavailable for appropriations.

DIVIDEND

The Board has declared and paid an interim dividend for Rs.0.25 paiseper share of face value of Rs.1/-each i.e. 25% for the Financial Year 2019-20. No finaldividend is recommended.

The total dividend pay-out for the year under review amounts toRs.21163007/- (Rupees Two crore eleven lakhs sixty three thousand seven only).

USFDA – APPROVAL

On 7th March 2020 your Company has received United StatesFood and Drug Administration (USFDA) Approval for its exclusive testing facility ofCentral Laboratory Analytical Services situated at Gagillapur Village Medchal-MalkajgiriDistrict Hyderabad Telangana – 500 043 the regulatory audit resulted in ZeroObservations.

ESTABLISHMENT INSPECTION REPORT (EIR)

On 11th March 2020 the Company had received EstablishmentInspection Report from United States Food and Drug Administration (USFDA) for theinspection conducted at API facility situated at Kandivalasa Andhra Pradesh during theperiod 13th January 2020 to 17th January 2020.

STRUCTURE OF THE BOARD

Board of Directors and Key Managerial Personnel

Your Company is maintaining an optimum combination of Independent andExecutive directors in the Board who have vast experience in Pharma and other relevantfields. As per the Articles of Association of the Company the Directors other than thenominee and independent directors are liable to retire by rotation. Accordingly Mr. TVVSNMurthy is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible seeks reappointment. A brief profile of directors seeking reappointment is givenalong with the AGM Notice for the reference of the shareholders.

Mr. Vamsi Krishna Potluri (DIN: 06956498) was appointed by the Board ofDirectors in its Meeting held on 5th June 2020 as an Additional Director ofthe Company to hold the office up to the ensuing Annual General Meeting. His appointmentwas based on the recommendations of the

Nomination and Remuneration Committee and upon approval of the AuditCommittee. He is designated as Executive Director of the Company with effect from 1stJuly 2020. His appointment is recommended before the Members of the Company for theirapproval.

Independent Directors

In accordance with the provisions of the Section 149 (7) of theCompanies Act 2013 each independent director had confirmed to the Company that he/shemeets the criteria of Independence laid down in the Section 149 (6) of the Companies Act2013 and Regulation 25(1) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. All the Independent Directors of the Company have enrolled in theIndependent Director databank maintained by Indian Institute of Corporate Affairs (IICA)as per Companies (Creation and Maintenance of databank of Independent Directors) Rules2019.

All the independent Directors of the Company have given declarationsunder sub-section (6) of Section 149 of the Act and the same had been considered andtaken on record by the Board.

Annual Evaluation of Performance of Board of Directors

Your company had conducted a separate Meeting of Independent Directorsduring the year on 26th May 2019 in which they had evaluated the performanceof Executive directors and Non- Executive/Nominee Directors. Further in the Board Meetingheld on 12th August 2019 the Board had evaluated the performance ofIndependent Directors and their contribution in the Board. The evaluation had been made onspecified standards.

The Board of Directors has carried out an annual evaluation of its ownperformance board committees and individual Directors pursuant to applicable provisionsof the Act and the corporate governance requirements as prescribed by applicableregulations of Listing Regulations 2015.

The performance of the board was evaluated by the board after seekinginputs from all the Directors present in the meeting on the basis of criteria such as theboard composition and structure effectiveness of board processes information andfunctioning etc. The Nomination and Remuneration Committee has laid down the criteria forthe performance of individual Directors such as the contribution of the individualDirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.

Familiarization Programs for Independent Directors

The Company has put in place a system to familiarize its IndependentDirectors with the Company their roles rights & responsibilities in the Companynature of the industry in which the Company operates business model of the Company etc.The details of such familiarization programs are put up on the website of the Company.(https://smspharma.com/investor-relations/download/)

RISK MANAGEMENT POLICY

In accordance with the provisions of the Regulation 21 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 your Company is not requiredto form the separate Risk Management Committee and accordingly Risk Management Policy isalso not applicable to the Company. The Company has adequate internal control systems andprocedures to mitigate the financial risk (if any) arise in near future. The RiskManagement procedure will be reviewed by the Audit Committee and the Board of Directors ona Quarterly basis.

THE CRITERIA FOR APPOINTMENT OF DIRECTORS KMPS AND SENIOR MANAGEMENT

A person for appointment as Director KMP or in senior managementshould possess adequate qualifications expertise and experience for the positionconsidered for appointment. The Nomination and Remuneration Committee decides whetherqualification expertise and experience possessed by a person are sufficient for theconcerned position. The Committee ascertains the credentials and integrity of the personfor appointment as Director KMP or senior management level and recommends to the Boardhis/ her appointment.

The Committee while identifying suitable persons for appointment tothe Board will consider candidates on merit against objective criteria and with dueregard for the benefits of diversity on the Board. The Nomination and RemunerationCommittee shall assess the independence of directors at the time of appointment;re-appointment and the Board shall assess the same annually. The Board shall re-assessdetermination of independence when any new interests or relationships are disclosed by aDirector.

The criteria of independence are as prescribed in the Act and thelisting regulations and the Independent Directors shall abide by the Code specified forthem in Schedule IV of the Act. The Nomination and Remuneration Committee has the criteriafor appointing any Key Managerial Personnel (KMP) and nominating directors on the Board.During the year under review the Committee had recommended the appointment of Mr. VamsiKrishna Potluri as Additional Director of the Company subject to the approval of themembers in the coming Annual General Meeting of the Company. The appointment of any KMP ismade by the Nomination and Remuneration Committee based on the requirement of the positionand experience and skill sets of the candidate.

COMPOSITION & NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year under review Five (5) meetings of the Board ofDirectors were held on 27th May 2019 12th August 2019 12th November2019 12th February 2020 and 18th March 2020. The Four (4) Meetingsof the Audit Committee were held on 27th May 2019 12th August2019 12th November 2019 and 12th February 2020. A detailedinformation required under Sec. 177(8) and 177(10) of the Companies Act 2013 andcomposition of various committees is provided in ‘Corporate Governance Report'forms part of this report.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of the Companies Act 2013 and Rule12 of Companies (Management and Administration) Rules 2014 the extract of Annual Returnis prepared in prescribed form i.e. ‘Form MGT-9' as

Annexure – 7.

CERTIFICATION FROM MANAGING DIRECTOR AND CFO

A certificate of the Managing Director and Chief Financial Officer ofthe Company on Financial Statements and applicable internal controls as stipulated underRegulation 17(8) of the SEBI (LODR) Regulations 2015 is enclosed to this Report asAnnexure 14.

CORPORATE GOVERNANCE

A Report on Corporate Governance as stipulated under Schedule V of theSEBI (LODR) Regulations 2015 is enclosed as Annexure - 5 forming part of thisreport. The requisite certificate from M/s. Suryanarayana & Suresh CharteredAccountants confirming the compliance with the conditions of Corporate Governance isannexed to the Report on Corporate Governance.

DEPOSITS

Your Company had not accepted/ invited any deposits from the publicduring the year under review. As such no amount of principal or interest was outstandingas on the date of the Balance Sheet.

LOANS GUARANTEES AND INVESTMENTS

Your Company had made investment in its associate company viz. M/s. VKTPharma Private Limited for its business purpose. The Company holds 3850165 Equity sharesof Rs10/- each in VKT Pharma Private Limited as on 31st March 2020 asinvestments. The Particulars of loans/advances given are provided in the StandaloneFinancial Statements. The Company is maintaining the details of investments made duringthe year in Statutory Form MBP – 2. The details of loans / advances given andinvestments made during the financial year ended on 31st March 2020 areprovided as

Annexure-4.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company duringthe financial year 2019-20 with related parties were in the ordinary course of businessand on an arm's length basis and are in compliance with the provisions of theCompanies Act 2013 and the SEBI (Listing Obligation & Disclosure Requirement)Regulation 2015. There are no materially significant related party transactions made bythe Company with Promoters Directors and Key Managerial Personnel etc. which may havepotential conflict with the interest of the Company. All related party transactions arepresented to the Audit Committee on quarterly basis and were also placed before the Board.A statement of all Related Party Transactions is being presented before the AuditCommittee on Quarterly basis specifying the nature value and terms and conditions of thetransactions. A Policy on Related Party Transactions approved by the Board is uploaded onthe Company's website at the web link http://www.smspharma.com/investors/downloads/policy-on-related-party-transactions. pdf .

The particulars of contracts or arrangements entered into by theCompany with related parties referred to in Section 188(1) are kept by the Company inStatutory Form AOC-

2. Further details required to disclose as per AccountingStandard–18 (as issued and modified by ICAI) form part of the notes to the financialstatements provided in the annual report. The Form AOC-2 is attached to the Report as

Annexure-5.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company hasconstituted the CSR Committee consisting of the Directors as specified in Annexure - 5with the roles and responsibilities duly defined in accordance with the CSR Policy Rules.The Committee met once on 12th August 2019 during the Financial Year 2019-20.The average net profits of the Company during the preceding three years stands asRs.5476.50 lakhs hence the Company is required to spend a sum of Rs.109.52 lakhs towardsCSR Expenditure in FY 2019-20. The detailed Report on Corporate Social Responsibility asper Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is enclosedas Annexure - 8 to this Report. The Company has spent an amount of Rs.53.18 lakhsduring the year 2019-20.

PARTICULARS OF EMPLOYEES

Particulars of employees required to be furnished under Section 197(12) of the Companies Act 2013 read with Rule

5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is mentioned under ‘Employees Remuneration Report' whichforms part of this report as Annexure – 9.

None of the employees of the Company is receiving a salary of more thanRs.8.50 lakhs per month.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION

The information required under Section 134(3)(m) of the Companies Act2013 read with the applicable Rules forms part of this report as Annexure- 10

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs.in Lakhs)
Particulars 2019-20 2018-19
Earnings
FOB Value of Exports 9809.70 6028.82
Outgo
Sales Commission 73.40 17.34
Travelling Expenses 1.54 0.18
CIF Value of Imports
Raw Materials 1386.05 651.82
Capital Goods 350.81 713.06

AUDITORS Statutory Auditors

M/s. Suranarayana & Suresh Chartered Accountants (FirmRegistration No. 006631S) were appointed as the Statutory Auditors of the Company to holdoffice for a period of five (5) consecutive years till the Conclusion of the 34thAnnual General Meeting of the Company to be held in the year 2022 (subject to ratificationby the members at each AGM). In terms of first proviso to Section 139 of the CompaniesAct 2013 the appointment of the Statutory Auditors shall be placed for ratification atevery Annual General Meeting. However pursuant to the Companies (Amendment) Act 2017 therequirement for ratification of Statutory Auditors appointment by members at every AGM hasbeen omitted with effect from 7th May 2018. The Board of Directors isempowered to fix the remuneration of the Statutory Auditor on yearly basis.

Accordingly M/s. Suranarayana & Suresh Chartered Accountantswill continue as the Statutory Auditors of the Company till the conclusion of 34thAGM of the Company.

Internal Auditor

The Board has appointed M/s. Adusumilli and Associates CharteredAccountants as an Internal Auditors of the Company for a period of three years from theFinancial Year 2020-21 under Section 138 of the Companies Act 2013 in accordance withthe scope as defined by the Audit Committee.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of

Managerial Personnel) Rules 2014 M/s. SVVS & Associates CompanySecretaries LLP were appointed to conduct Secretarial Audit of the Company for theFinancial Year ended on 31st March 2020. Secretarial Audit Report in Form MR-3for the financial year 2019-20 forms part of this report as Annexure – 11.

Annual Secretarial Compliance Report

Pursuant to provisions of SEBI circular no. CIR/CFD/ CMD1/27/2019 dated8th February 2019 the Company has obtained Annual Secretarial ComplianceReport forms part of this Report as Annexure-12 from Mr. C. Sudhir Babu PracticingCompany Secretary (Proprietor CSB Associates) and the same was also submitted to theStock Exchanges where the shares of the Company are listed.

CERTIFICATE OF NON DISQUALIFICATION OF DIRECTOR' UNDER REGULATION34(3) OF SEBI (LODR) 2015

The Company has obtained a certificate from Mr. C. Sudhir BabuPracticing Company Secretary (Proprietor CSB Associates) which forms part of this Reportas Annexure-13 confirming that none of the Directors of the Board of the Companyhave been debarred or disqualified from being appointed or continuing as directors ofcompanies by the Board/Ministry of Corporate Affairs or any such other statutoryauthority.

COST AUDITOR

Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 and the Companies (Cost Records & Audit)Amendment Rules 2014 the Company maintains Cost Records. Your Board has upon therecommendations of the Audit Committee appointed Mr. K.S.N. Sarma (Registration No.102145and Membership No.6875) as Cost Auditor of the Company for the financial year 2020-21.These provisions also require that the remuneration of the Cost Auditor is to be approvedby the shareholders. As a matter of record the Cost Audit Report for the year 2019-20 wasfiled with the Central Government within the prescribed time limit.

LEGAL ENTITY IDENTIFICATION NUMBER

Reserve Bank of India has issued a mandate to obtain Legal EntityIdentification Number [LEI] for entities which are having total fund based and non-fundbased exposure of Rs.5 crore and above and are dealing in Over the Counter [OTC]derivatives market for Rupee Interest Rate Derivatives foreign currency derivatives andcredit derivatives in India. Accordingly Company made an application with Legal EntityIdentifier India Limited and received - LEI 335800XXEADQCB7GJ514 as LEI Number fromRBI.

FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has laid down the set of standards which enables toimplement internal financial control across the organization and ensure that the same areadequate and operating effectively (1) to provide reasonable assurance that: transactionsare executed in conformity with generally accepted accounting principles/standards or anyother criteria applicable to such statements (2) to maintain accountability for assets;access to assets is permitted only in accordance with management's general orspecific authorization and the maintenance of the records are in reasonable detailaccurate and fairly reflect the transactions and dispositions of the assets of thecompany (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the assets that could have a materialeffect on the Financial Statements.

POLICIES

Company has following policies in place pursuant to applicableprovisions of the Act and SEBI Listing Regulations and the same are published on theofficial website of the Company (www.smspharma.com):

1. Code of Business Conduct & Ethics for Other Stake Holders
2. Code of Regulation & Prohibition of Insider Trading
3. Code of Conduct for Board & Senior Management
4. Criteria for making payment for non-executive Directors
5. Corporate Social Responsibility Policy
6. Document preservation policy
7. Familiarization program of Independent Director
8. Policy for evaluation performance of the Board
9. Policy for related party transaction
10. Policy for disclosure of material information
11. Policy for sexual harassment
12. Staff advances policy
13. Whistle blower policy
14. Policy for determination of legitimate purpose

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Human Resources Department continued to maintain cordial workingrelations across the spectrum of employees in the Company.

As part of its strategic initiatives HR department has carried forwardthe Leadership program for the senior Management team and continued to engage them acrossvaried programs such Blue Ocean Strategy and Creative Block-busting aimed at honing theirleadership skills. The Management is also introducing Managerial effectiveness programsfor the middle management group to develop the next level of Managers and Leaders in theCompany.

SHARE TRANSFER SYSTEM

Pursuant to Regulation 40 of SEBI (LODR) Regulations 2015 as amendedvide Notification No. SEBI/LAD-NRO/ GN/2018/24 dated 8th June 2018 and PressRelease No: 49/2018 dated 3rd December 2018 shareholders may please notethat with effect from 1st April 2019 transfer of shares (except transmissionand transposition of shares) will be in dematerialized form only. Therefore theshareholders are requested to dematerialize their shares in order to have a hassle-freetransfer. Members can contact the Company or Company's Registrars and TransferAgents Aarthi Consultants Private Limited for assistance in this regard.

GENERAL DISCLOSURE

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

a) No material changes and commitments affecting the financial position of the Company between the financial year ended March 31 2020 and the date of this report.
b) No fraud has been reported by the Auditors to the Audit Committee or to the Board.
c) No material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future
d) Company has complied with the requirements of the Secretarial Standards issued by Institute of Company Secretaries of India.
e) There are no instances where the Board has not accepted the recommendation of Audit Committee.
f) Cost records are maintained as per the requirements of Section 148 of the Act.
g) The extract of the Annual Return [form no. MGT -9] forms part to the Board Report as Annexure.

WHISTEL BLOWER POLICY/VIGIL MECHANISM

The Company has established a Vigil mechanism and formulated a WhistleBlower Policy through which all the stakeholders of the Company can report their concernsabout unethical behavior actual or suspected fraud or violation of code of conduct andethics policy. It also provides for adequate safeguards against victimization ofdirector(s)/ employee(s) who avail of the mechanism and also provide for direct access tothe Chairperson of the Audit Committee. The Whistle Blower Policy which has been approvedby the Board of Directors of the Company has been uploaded on the Company's website(http://www. smspharma.com/investors/downloads/whistle-blower-protection-policy.pdf).During the year under review the Company has not received any complaint(s) under thispolicy.

BOARD'S RESPONSE ON AUDITORS QUALIFICATION RESERVATION OR ADVERSEREMARK OR DISCLAIMER MADE:

There are no qualifications reservations or adverse remarks made bythe Statutory Auditor Secretarial Auditor and Cost Auditor in their reports.

DISCLOSUREUNDERTHESEXUALHARASSEMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

Your Company has zero tolerance towards sexual harassment at theworkplace and the details of sexual harassment complaints as per the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules there under are as follows:

No. of Complaints received : Nil
No. of Complaints disposed-off : Not Applicable

The Company has constituted an Internal Complaints Committee forredressal of complaints and is committed to provide equal opportunities without regard totheir race caste sex religion colour nationality disability etc. All womenassociates (permanent temporary contractual and trainees) as well as any women visitingthe Company's office/ premises or women service providers are covered under thispolicy. All employees are treated with dignity with a view to maintain a work environmentfree of sexual harassment whether physical verbal or psychological.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERALMEETINGS

During the year under review the Company has complied with SecretarialStandards issued by the Institute of Company Secretaries of India on Board Meetings andAnnual General Meetings.

CODE FOR PREVENTION OF INSIDER TRADING

As per the SEBI (Prohibition of Insider Trading) Regulation 2015 theCompany has adopted a Code of Conduct of Insider Trading. The Company has appointed Mr. V.S. Venkatish Company Secretary of the Company as Compliance Officer for setting forth theprocedures and implementation of the Code for trading in Company's Equity Shares.During the year under review there has been a due compliance of the said Code.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(3)(c) of the Companies Act2013 as amended the Board of Directors confirm that:

1. In the preparation of the Financial Statements for the year ended 31st March 2020 the applicable accounting standards had been followed along with proper explanation relating to material departures if any.
2. They had selected such accounting policies as notified & modified by ICAI and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the company for that period;
3. They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 as amended form time to time for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
4. The Annual Accounts had been prepared on going concern basis.
5. The Company has developed an effective mechanism for internal financial controls it has been followed by the Company consistently; such internal financial controls are adequate and operating effectively.
6. They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE:

No significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations in future.

Acknowledgements:

Your Directors take this opportunity to express their sincereappreciation and to thank the Customers Shareholders vendors bankers businessassociates financial institutions and Central and State Governments for their consistentsupport and encouragement to the Company. The Board of Directors also wish to place onrecord its deep sense of appreciation for the dedicated and committed services by theCompany's executives staff and workers. Your Company has been able to operateefficiently because of the culture of professionalism creativity integrity andcontinuous improvement in all functions and areas as well as the efficient utilization ofthe Company's resources for sustainable and profitable growth.

By the order of the Board
Ramesh Babu Potluri
Place: Hyderabad Chairman and Managing Director
Date: 05-06-2020 (DIN:00166381

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