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Sudarshan Chemical Industries Ltd.

BSE: 506655 Sector: Industrials
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OPEN 624.95
CLOSE 606.20
52-Week high 791.95
52-Week low 431.05
P/E 33.32
Mkt Cap.(Rs cr) 4,236
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sudarshan Chemical Industries Ltd. (SUDARSCHEM) - Director Report

Company director report

to the Shareholders – 2020-21

Your Directors are pleased to present the 70th Annual Report together withthe Audited Financial Statements of the Company for the year ended 31st March2021.

The annexed Financial Statements comply in all material aspects with the IndianAccounting Standards (Ind AS) notified under Section 133 of the Companies Act 2013 (theAct) Companies (Indian Accounting Standards) Rules 2015 as amended from time to timeand other relevant provisions of the Act.


The Company's financial performance (from continuing operations) for the year ended 31stMarch 2021 is summarised below (Refer Notes to the Audited Standalone FinancialStatements).

Rs in Lakhs

Particulars 2020-21 2019-20
Revenue from Operations 170850.1 151826.8
Earning Before Interest Tax Depreciation and Amortisation 27206.1 24488.0
Less : Interest 1640.0 1168.5
Less : Depreciation 8514.5 7239.4
Add : Exceptional Income 1072.8 1716.6
Less : Provision for Tax 4501.0 2868.8
Profit After Tax 13623.4 14927.9
Profit / (Loss) from Discontinuing Operations - (54.5)
Total Profit After Tax 13623.4 14873.4
Other Comprehensive Income 47.7 (1279.7)
Total Comprehensive Income 13671.1 13593.7
Add : Surplus Brought Forward 39776.0 35308.6
Transfer from OCI to Hedge Reserve (124.9) 1071.5
Net Profit available for appropriation 53322.2 49973.9
General Reserve - -
Interim Dividend - (4361.0)
Final Dividend - (4154.0)
Tax on Dividend - (1682.9)
Total Appropriation - (10197.9)
Surplus to be carried forward 53322.2 39776.0


Revenue from continuing operations for the year ended 31st March 2021aggregated to Rs 170850.10 lakhs as against Rs 151826.8 lakhs achieved during theprevious year. Profit after tax from continuing operations for the year ended 31stMarch 2021 was Rs 13623.4 lakhs as against Rs 14927.9 lakhs earned during theprevious year.

For Subsidiary Companies' performance please refer to Annexure I.

On a Consolidated basis your Company's Total Income for the year ended 31stMarch 2021 stood at Rs 187112.7 lakhs as compared to Rs 171287.3 lakhs in FY 2019-20.

During the first quarter of the year domestic sales were impacted due to shut-down ofplant as a result of lock-down restrictions imposed by the Government of India forcontaining the disease and also due to the impact of the Nisarga Cyclone. In the secondquarter Roha plant had to be shutdown for 3-4 weeks due to covid outbreak at Roha Plant.Despite these adverse events your Company was successful in delivering the resilientperformance in the last two quarters resulting in moderate growth in revenues as comparedto the previous year.


Your Company continues to view focus on export markets. Initiatives are directedtowards engaging with overseas markets with a view to testing and demonstratinginternational competitiveness and seeking profitable opportunities for growth. TheCompany's overseas Wholly Owned Subsidiaries set up with the objective of marketing andselling Pigments continue to record improved performance. The Overseas Subsidiaries haveentered a consolidation phase and will play a crucial role in positioning the Company as adominant player in the Global Pigment Industry.


Information on the operations of the Company and details on the state of affairs of theCompany are covered in the Management Discussion and Analysis Report.


Despite impact of Covid-19 on operations in the first quarter the Company continuedits expansion plans and has put into use projects amounting to Rs 71 crores duringthe year under review. This capital expenditure is primarily aimed at augmentingproduction capacities at Roha and Mahad facilities.


Shareholders are requested to refer Annexure VI for highlights of performance ofabove mentioned companies and their contribution to the overall performance of the Companyduring the year under review. The Company has the Wholly Owned Subsidiaries viz. RIECOIndustries Limited Sudarshan CSR Foundation Sudarshan Europe B. V. Sudarshan (Shanghai)Trading Company Limited Sudarshan Japan Limited and Step-Down Subsidiaries viz.Sudarshan North America Inc. and Sudarshan Mexico S de R. L. De CV.


The World Health Organisation declared a global pandemic of the Novel Coronavirusdisease (COVID-19) on 11th February 2020. In the last month of FY 2019-20 theCOVID-19 pandemic developed rapidly into a global crisis forcing Governments to enforcelock-downs of all economic activity.

After the declaration of lock-down your Company had to temporarily suspend itsoperations at Roha Mahad (Plant Sites) Sutarwadi (R&D Lab) and Global Head Office(GHO) in compliance with Government directions. Employees at GHO continued theiractivities in Work From Home (WFH) mode.

Apart from other industries your Company also serves the essential industries of foodpackaging and personal care and received necessary permission to restart our Roha site andtransport material by first week of April 2020. Our production capacities and deliverieswere ramped up gradually based on availability of raw material manpower and transportinfrastructure within the conditions stipulated by the letter granting permission.

To ensure the health and safety of our employees your Company took the following fivetargeted actions:

1. Transportation: Operating buses at 50% capacity to ensure safe distance betweencommuters;

2. Security: Monitoring employee health before entering the production area as perGovernment mandated norms;

3. Canteen: Social distancing at canteen by proper demarcation of spaces;

4. Plant: Sanitisers masks and face shields had been made available across the plant;

5. Stay: Arrangements had been made for contract workmen within the campus maintainingall distancing norms.

In the third and fourth quarters of the year under review on account of easing offirst wave of Covid-19 the Company was able to deliver the resilient performance. Towardsthe end of the fourth quarter and till the date of this Report due to severe second waveof the Covid-19 across India partial lock-down restrictions have been imposed by variousState Governments. Your Company continues to monitor the situation and revisit itsstrategy to cope up with changing times. Overall impact of the lock-down on futureoperations would largely be dependent upon the speed of implementation of vaccinationProgramme in India and abroad and the efficacy of the vaccines in India and abroad. YourCompany has focused on both economic and humanitarian fronts to ensure business continuityas well as making a positive impact on our communities. In these uncertain times theCompany stays committed to its higher purpose of "Growing together by beingSpiritually fulfilled Socially just and Environmentally sustainable."


The Board of Directors at its meeting held on 28th May 2021 had recommendeda Final Dividend of Rs 6/- (Six Rupees only) per equity share of Rs 2/- each (i.e. 300%)for FY 2020-21. A proposal seeking shareholders' approval for the declaration and paymentof the said Final Dividend for FY 2020-21 is forming part of the Notice. If approved bythe Shareholders the Final Dividend shall be paid between 20th August 2021and 31st August 2021. In view of the changes made under the Income Tax Act1961 by the Finance Act 2020 dividend paid or distributed by the Company shall betaxable in the hands of the Shareholders. Your Company shall accordingly make thepayment of the Final Dividend after deduction of tax at source. The dividend payout is inaccordance with the Company's Dividend Distribution policy. The Board of Directors at itsmeeting held on 28th February 2020 had declared and paid an InterimDividend of Rs 6.30/- (Six Rupees and Thirty Paise only) per equity share of Rs 2/- each(i.e. 315%) for the FY 2019-20 which included a Special Dividend on account of Profit onExceptional Item during the FY 2019-20 amounting to Rs 0.50/- (Fifty Paise only) perequity share of Rs 2/- each to all shareholders who were holding shares on the RecordDate i.e. Friday 13th March 2020. The said dividend was confirmed as FinalDivided by the Shareholders at their 69th Annual General Meeting held on 4thSeptember 2020.

The Dividend Distribution Policy of the Company is provided as Annexure VIII tothis Report and is also available on the website of the Company


The paid up Equity Share Capital as on 31st March 2021 was `1384.5 lakhs.There was no public issue rights issue bonus issue or preferential issue etc. during theyear. The Company has not issued shares with differential voting rights or sweat equityshares.

During the year under review the Nomination and Remuneration Committee at its meetingheld on 6th April 2020 had approved the grant of 394220 Options tothe eligible employees pursuant to the Sudarshan Employee Stock Option Plan 2018. Thesaid options were not liable for vesting and exercise during the year under review.


Your Directors do not propose to transfer any amount to the General Reserve.


The Company's erstwhile Public Deposit Scheme was closed in the year 2015. There was nofailure in making repayment of Fixed Deposits on maturity and the interest due thereon interms of the conditions of the said scheme. During the year under review the Company hasnot accepted any deposit from the public / members pursuant to Section 73 and Section 76of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014as amended from time to time.

The particulars of loans / advances / investments etc. required to be disclosedpursuant to Para A of Schedule V of the SEBI Listing Regulations 2015 are furnished as apart of the Financial Statements.


As required under Section 134(3)(c) of the Companies Act 2013 Directors of theCompany to the best of their knowledge and belief with respect to FY 2020-21 state that: i. in the preparation of the annual accounts the applicable accounting standards havebeen followed with proper explanation relating to material departures; ii. the Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of financial year and of the profit and loss ofthe Company for that period; iii. the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv. the Directors have prepared the annualaccounts on a going concern basis; v. the Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating effectively; and vi. the Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems areadequate and are operating effectively.


Pursuant to SEBI Listing Regulations 2015 a separate chapter titled ‘Report onCorporate Governance' has been included in this Annual Report along with the reports onthe Management Discussion and Analysis and Shareholders' Information.

A certificate from Auditors of the Company regarding compliance of conditions ofcorporate governance is given separately in this Annual Report.


A Management Discussion and Analysis Report covering a wide range of issues relating toindustry trends Company Performance Business and Operations is given separately in theAnnual Report.


Regulation 34(2) of the SEBI Listing Regulations 2015 as amended inter aliaprovides that the annual report of the top 1000 listed entities based on marketcapitalisation (calculated as on 31st March of every financial year) shallinclude a Business Responsibility Report (BR Report).

Since Sudarshan Chemical Industries Limited is one of the top 1000 listed entities ason 31st March 2021 the Company as in the previous years has presented its BRReport for FY 2020-21 which is part of this Annual Report.


All transactions entered into with related parties during the financial year were inordinary course of business and at arm's length basis which were approved by the AuditCommittee. The Board has approved a policy for related party transactions which isavailable on the Company's website at The particulars of contracts orarrangements made with related parties pursuant to Section 188 is covered in Notes to theFinancial Statements and material contracts / arrangements made with related parties isgiven in Form AOC-2 which is attached as Annexure V to this report.

None of the transactions with any of the related parties were in conflict with theinterest of the Company. Attention of the members is drawn to the disclosure set out inNotes to Financial Statements forming part of the Annual Report.

The particulars of loans / advances / investments etc. required to be disclosedpursuant to Para A of Schedule V of the SEBI Listing Regulations 2015 are furnished as apart of the Financial Statements.

The transaction(s) of the Company with any person or entity belonging to the promoter /promoter group which hold(s) more than 10% shareholding in the Company as requiredpursuant to Para A of Schedule V of the SEBI Listing Regulations 2015 is disclosedseparately in the Financial Statements of the Company.


Pursuant to the provisions of Section 177 of the Companies Act 2013 and rules madethereunder and Regulation 18 of the SEBI Listing Regulations 2015 the Company has inplace an Audit Committee.

As on 31st March 2021 the composition of the Audit Committee is as under–a) Mrs. S. A. Panse – Chairperson b) Mr. D. N. Damania c) Mr. S. K. AsherDuring the year under review Mr. S. N. Inamdar Independent Director and member of theAudit Committee resigned as a Director and hence ceased to be a member of the AuditCommittee effective close of business hours on 20th November 2020.

All the recommendations made by the Audit Committee were deliberated and accepted bythe Board during FY 2020-21.


The Company has in place a CSR Committee constituted as per the provisions of Section135 of the Companies Act 2013 and Rules made thereunder details of which are mentionedin the Corporate Governance Report forming part of this Annual Report.

The Company has been carrying out various CSR activities in the areas specified interms of Section 135 read with Schedule VII of the Companies Act 2013 and Rules madethereunder. The details of CSR activities undertaken by the Company are annexed herewithas Annexure III. The existing CSR Policy of the Company was recently amended interms of amendments to the Companies (Corporate Social Responsibility) Rules 2014. TheCSR Policy of the Company is available on the Company's website at perch/resources/csr- policy.pdf

CSR Policy in brief:

The focus of the CSR activities is on women empowerment environment health etc. andthe projects would be planned and implemented accordingly.

The Company shall spend at least 2% (two percent) of the average net profitscalculated in accordance with the provisions of the Companies Act 2013 and Rules madethereunder made by it in three immediately preceding financial years. The Annual Reporton CSR activities is annexed herewith as Annexure III.


The Company has put in place appropriate risk assessment and minimisation procedureswhich are reviewed by the Risk Management Committee Audit Committee and the Board. As perthe requirements of SEBI Listing Regulations 2015 a Risk Management Committee has beenconstituted with responsibility of preparation of Risk Management Plan reviewing andmonitoring the same on regular basis to identify and review critical risks on regularbasis to report key changes in critical risks to the Board on an ongoing basis to reportcritical risks to Audit Committee in detail on yearly basis and such other functions asmay be prescribed by the Board. The Committee is supported by an Enterprise RiskManagement (ERM) team which provides advice on various risks and the appropriateGovernance framework and ensures that risks are identified measured and managed inaccordance with the Companies Policies and risk objectives. The Committee holds meetingson a need basis to review the critical risks identified. The risks faced by the Companyand their minimisation procedures are assessed periodically. Your Company has an elaborateRisk Management procedure which is based on three pillars: Business Risk AssessmentOperational Controls Assessment and Policy Compliance processes.

According to Section 134(5)(e) of the Companies Act 2013 and rules made thereunderthe term Internal Financial Control (IFC) means the policies and procedures adopted by theCompany for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information. The Company has a wellplaced proper and adequate internal financial control system which ensures that allassets are safeguarded and protected and that the transactions are authorised recordedand reported correctly. The Company's internal financial control system also comprises duecompliances with Company's policies and Standard Operating Procedures (SOPs) and audit andcompliance checks by the Statutory Auditors and the Internal Auditors. The InternalAuditors independently evaluate the adequacy of internal controls and concurrently auditthe majority of the transactions in value terms. Independence of the audit and complianceis ensured by direct reporting of Internal Auditors to the Audit Committee of the Board.To further strengthen the compliance processes the Company has an internal compliance toolfor assisting statutory compliances. This process is automated and generate alerts forproper and timely compliance. Risk Management Policy is available on the Company's websiteat resources/ risk-management-policy-2.pdf Details of theRisk Management Committee are given in the Corporate Governance Report.


The Company's policy on Appointment of Directors including criteria for determiningqualifications positive attributes independence of a Director is available on thewebsite of the Company at https://www. sudarshan. com/perch/resources/remuneration-policy.pdf.

The policy on Remuneration and other matters provided in Section 178(3) of the Act isavailable on https://www. perch/resources/remuneration-policy. pdf.


Mr. S. N. Inamdar (DIN: 00025180) Non – Executive and Independent Director of theCompany resigned effective close of business hours on 20th November 2020. As aresult Mr. Inamdar also ceased to be a member of the Audit Committee and Nomination andRemuneration Committee of the Company. The Board places on record its appreciation for thevaluable contribution made by Mr. Inamdar during his tenure as a Director of the Company.

Mr. A. Vij (DIN:08140194) Wholetime Director was liable to retire by rotation andbeing eligible had offered himself for the reappointment at the 69th AnnualGeneral Meeting held on 4th September 2020. The members' approval was sought atthe 69th Annual General Meeting based on the recommendation of the Nominationand Remuneration Committee and Board which was approved by the members.

At the 69th Annual General Meeting of the Company which was held on 4thSeptember 2020 the members approved a change in status of directorship of Mr. P. R. Rathi(DIN: 00018577) as "Director liable to retire by rotation" in lieu of"Director not liable to retire by rotation" based on the recommendation of theNomination and Remuneration Committee and the Board of Directors. The Board of Directorsat its meeting held on 7th August 2019 had co-opted Mr. A. N. Rathi (DIN:00018683) as an Additional Director with effect from 8th August 2019 until theconclusion of the 69th Annual General Meeting. Based on the recommendation ofthe Nomination and Remuneration Committee and the Board of Directors the members hadapproved appointment of Mr. A. N. Rathi as a Non – Executive and Non –Independent Director liable to retire by rotation effective from 4thSeptember 2020.

At the 64th Annual General Meeting of the Company the members had approvedthe appointment of Mrs. S. A. Panse (DIN: 02599310) as an Independent Director for thefirst term of consecutive period of 5 (five) years from 14th August 2015 upto13th August 2020. Since the first term of Mrs. Panse was expiring on 13thAugust 2020 based on the recommendation of the Nomination and Remuneration Committeeconsidering her skills experience and knowledge she possessed and the report ofperformance evaluation for FY 2019-20 the Board at its meeting held on 22ndJune 2020 had reappointed Mrs. Panse as an Additional Director (Independent) with effectfrom 14th August 2020 up to the conclusion of the 69th AnnualGeneral Meeting which was held on 4th September 2020 and further recommendedfor the approval of the members for reappointment of Mrs. S. A. Panse for a second termof five consecutive years with effect from 14th August 2020 up to 13thAugust 2025 in terms of section 149 read with Schedule IV to the Act and ListingRegulations or any amendment thereto or modification thereof which was approved by themembers at the 69th Annual General Meeting held on 4th September2020.

As per the provisions of Section 152 of the Companies Act 2013 and Rules madethereunder and as per the Articles of Association of the Company Mr. P. R. Rathi (DIN:00018577) Chairman and Non – Executive and Non-Independent Director of the Companyretires by rotation and being eligible offers himself for reappointment. A resolutionseeking members' approval for his reappointment forms part of the Notice.

During the year under review the non-executive directors of the Company had nomaterial pecuniary relationship or transactions with the Company other than sitting feescommission if any and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board / Committee of the Company.

The Board has made the recommendation for above appointment / re-appointment ofDirectors based on the recommendation of the Nomination and Remuneration Committee (NRC).NRC has made its recommendation after ensuring that none of the Directors seekingappointment / re-appointment is debarred from holding the position of a Director by virtueof any Order from Securities and Exchange Board of India (SEBI) The Ministry of CorporateAffairs (MCA) or any other Regulatory Authority.

The Board is of the opinion that the Independent Directors appointed / re-appointed areof integrity and possess the requisite expertise and experience (including theproficiency).

Details of the Directors seeking appointment / re- appointment including profile ofthese Directors are given in the Notice convening the 70th Annual GeneralMeeting of the Company.


In accordance with the provisions of Section 203 of the Companies Act 2013 and rulesmade thereunder following are the Key Managerial Personnel of the Company for the yearended 31st March 2021: a. Mr. R. B. Rathi Managing Director b. Mr. A. VijWholetime Director c. Mr. Nilkanth Natu Chief Financial Officer (effective 28thJuly 2020) d. Mr. V. V. Thakur Acting Chief Financial Officer (upto 27th July2020) e. Mr. Mandar M. Velankar Deputy General Manager – Legal and CompanySecretary.

During the year under review Mr. Nilkanth Natu was appointed as Chief FinancialOfficer (CFO) effective 28th July 2020 in place of Mr. V. V. Thakur ActingCFO who stepped down effective 28th July 2020 in terms of applicableprovisions of the Companies Act 2013 and SEBI LODR Regulations 2015. Mr. Vivek Thakurcontinues to be associated with the Company as "General Manager – Finance andAccounts".


Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe SEBI Listing Regulations 2015. There has been no change in the circumstancesaffecting their status of Independent Directors of the Company.

The Independent Directors have also given declaration of compliance with Rules 6(1) and6(2) of the Companies (Appointment and Qualification of Directors) Rules 2014 withrespect to their name appearing in the data bank of Independent Directors maintained byThe Indian Institute of Corporate Affairs Manesar ("IICA").

Annual Evaluation of Board of Directors its Committees and Individual Directors:

The Board of Directors upon recommendation of Nomination and Remuneration Committee haslaid down the criteria for performance evaluation of Board of the Company its Committeesand the individual Board members including Independent Directors and accordingly anannual evaluation of the performance of the Board Committees and individual directors hasbeen carried out pursuant to the provisions of the Act and SEBI Listing Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued bythe Securities and Exchange Board of India on 5th January 2017.

In a separate meeting of independent directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria 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.

At a separate board meeting the performance of the Board its Committees andindividual directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the independent director being evaluated. TheDirectors were satisfied with the evaluation results which reflected the overallcommitment and sense of duty. The Board has also adopted a Board Diversity Policy. Thepolicies of Board diversity and performance evaluation of Directors of the Company can beaccessed from the Company's website at https:// policy.pdf


The Board of Directors of the Company had discussed and approved the Employee StockOptions Plan i.e. Sudarshan Employee Stock Option Plan 2018 in terms of applicableregulations.

At the meeting held on 28th February 2020 the Board of Directors approvedthe Scheme for grant of Stock Appreciation Rights Plan (SAR's) for which approval ofshareholders was sought by way of Postal Ballot. During the year under review theNomination and Remuneration Committee approved the grant of 394220 Options to theeligible employees pursuant to the Sudarshan Employee Stock Option Plan 2018. Disclosuresin terms of Circular No. CIR/CFD/POLICY CELL/2/2015 dated 16th June 2015 areavailable on the website of the Company at https://www.sudarshan. com/notices.php


Industrial relations continue to remain cordial at Roha and Mahad plants and at R &D Laboratory situated at Ambadvet (Sutarwadi) Dist. Pune. The Board of Directors recordits appreciation of the commitment and support of employees at all levels.


The Company believes that a Board which is well informed / familiarised with theCompany and its affairs can contribute significantly and effectively discharge its roleof trusteeship in a manner that fulfils stakeholders' aspirations and societalexpectations. In pursuit of this the Directors of the Company are updated on changes /developments in the domestic / global corporate and industry scenario including thosepertaining to statutes / legislations and economic environment and on matters affectingthe Company. The details of the programmes are placed on familiarisation-of-independent-directors.pdf.


Pursuant to the provisions of ‘The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013' the Company has complied with theprovisions relating to the constitution of the Internal Complaints Committee under thesaid act. During the year under review one complaint was received by the InternalComplaints Committee of the Company which was duly investigated and disposed of by theInternal Complaints Committee of the Company. To build awareness amongst its employeesthe Company has been conducting induction/training programmes in the organization on acontinuous basis.

The Company has the Policy on Prevention of Sexual Harassment at Workplace which isavailable on the website of the Company at harassment-at-workplace.pdf


Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules madethereunder B S R & Associates LLP Chartered Accountants (Firm Regn. No.:116231W/W-100024) were appointed as Statutory Auditors of the Company for a period of 5(five) years i.e. from the conclusion of 66th Annual General Meeting till theconclusion of the 71st Annual General Meeting of the Company to be held in2022.

The Companies (Amendment) Act 2017 has amended Section 139(1) of the Companies Act2013 effective from 7th May 2018 whereby first proviso to Section 139(1) hasbeen omitted which provided for ratification of appointment of Auditors by members atevery Annual General Meeting. Accordingly no resolution is being proposed forratification of appointment of Statutory Auditors at the ensuing Annual General Meeting.Pursuant to Section 139 of the Companies Act 2013 and Rules made thereunder theStatutory Auditors have confirmed they are eligible to continue as Auditors. The notes onthe Audited Financial Statements referred to in the Auditor's Report are self explanatoryand hence do not call for any further comments.

The Auditor's Report does not contain any qualifications reservations adverse remarksor disclaimer.


Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended the cost audit record maintained by theCompany is required to be audited. The Board of Directors had on the recommendation of theAudit Committee appointed M/s Parkhi Limaye & Co. Cost Accountants Pune forconducting the cost audit of the Company for FY 2021-22.

M/s. Parkhi Limaye & Co. have confirmed that their appointment is within the limitsof Section 141(3)(g) of the Companies Act 2013 and Rules made thereunder and have alsocertified that they are free from any disqualifications specified under Section 141(3) andproviso to Section 148(3) read with Section 141(4) of the Act.

As required under the Companies Act 2013 the remuneration payable to the CostAuditors is required to be ratified by the members of the Company. Accordingly resolutionseeking members' ratification for remuneration to be paid to Cost Auditors is included inthe Notice convening the Annual General Meeting. Further the Board hereby confirms thatthe maintenance of cost records specified by the Central Government as per Section 148(1)of the Companies Act 2013 and rules made thereunder is required and accordingly suchaccounts / records have been made and maintained.


Dr. K. R. Chandratre a Practicing Company Secretary (FCS No. 1370 C. P. No. 5144)Pune was appointed as the Secretarial Auditor of the Company for FY 2020-21 as perSection 204 of the Companies Act 2013 and rules made thereunder. The Secretarial AuditReport submitted in the prescribed form MR - 3 is attached as Annexure VII andforms part of this report.

The Secretarial Audit Report does not contain any qualifications reservations adverseremarks or disclaimer.

The Company is compliant with the Secretarial Standard on Meetings of the Board ofDirectors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by theInstitute of Company Secretaries of India.


During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under Section 143(12) of the Companies Act 2013 and rulesmade thereunder.


Your Company has clearly laid down policies guidelines and procedures that form partof internal control systems which provide for checks and balances. The Company hasmaintained a proper and adequate system of internal controls. The system is designed toprovide a reasonable degree of assurance regarding the effectiveness and efficiency ofoperations the reliability of financial controls and compliance with applicable laws andregulations. The organisation is well structured and the policy guidelines are welldocumented with pre- defined authority where monetary decision is involved. Structuredmanagement information and reporting systems together with an exhaustive budgetary controlprocess for all major operational activities form part of the overall control mechanism toensure that requisite information related to all operations are reported and are availablefor control and review. The Company has established a well laid out policy to maintain thehighest standards of environment safety and health while maintaining operationalintegrity. This policy is strictly adhered to at all locations of the Company. TheCompany's internal control systems commensurate with the nature and size of its businessoperations. The Audit Committee of the Board of Directors regularly reviews the adequacyof internal control system. The Company with a view to encourage independent approachhas appointed a team of qualified professionals in the form of Internal Auditors dulysupported by the Finance Department who conduct operational and system audits inaccordance with an audit plan approved by the Audit Committee. Internal Auditors as partof their assignment evaluate and assess the adequacy and effectiveness of internalcontrol measures and the compliance with policies plans and statutory requirements. Theinternal audit reports are reviewed at Audit Committee Meetings and appropriate action onthe recommendations is initiated by the Management.


The Company recognises the need to have well equipped Research & Development(R&D) facilities to meet customer requirements and developing cutting edge products.As a natural corollary your Company continues to invest in a comprehensive R&DProgramme leveraging its world-class infrastructure benchmarked processesstate-of-the-art technology and a business- focused R&D strategy.

The Company has spent Rs 2899 lakhs during the year under review on R&D. Company'sin-house R&D facilities are recognised by the Ministry of Science and Technology NewDelhi on behalf of Government of India.

Details related to Research and Development are mentioned in the Annexure I tothis Report.


Board and its Committees:

The details of the Board and its Committees are given in the Report on CorporateGovernance.


During FY 2020-21 6 (six) Board Meetings were held details of which are given in theCorporate Governance Report which is a part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days as prescribed inthe Companies Act 2013.

Material changes and commitments if any affecting the financial position of theCompany:

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and the date ofthis report.

Annual Accounts of Subsidiary Companies:

A copy of the Audited Financial Statements for each of the Subsidiary Companies for theyear ended 31st March 2021 wherever applicable will be made available to themembers of the Company seeking such information at any point of time and will also beavailable for inspection at the Registered Office of the Company during working hours tillthe date of the Annual General Meeting. The same shall also be placed on the website The salient features of Financial Statements of Subsidiary Companies isgiven in Annexure VI of this report.

Sudarshan Europe B. V. is the Material Subsidiary of the Company for the year ended 31stMarch 2021. The Company has complied with all the legal requirements in respect of theMaterial Subsidiary. In conformity with the provisions of the SEBI Listing Regulations2015 the Board has formulated a policy for determining "material subsidiaries".The Policy can be accessed from the Company's website at policy.pdf There has been no materialchange in the nature of the business of Subsidiaries.

Consolidated Financial Statements:

Your Company's Board of Directors is responsible for the preparation of theConsolidated Financial Statements of your Company and its Subsidiaries (‘the Group')in terms of the requirements of the Companies Act 2013 and in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act. The respective Board of Directors of thecompanies included in the Group are responsible for maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets and forpreventing and detecting frauds and other irregularities the selection and application ofappropriate accounting policies making judgments and estimates that are reasonable andprudent and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error which have been used for the purpose of preparation of theConsolidated Financial Statements by the Directors of your Company as aforesaid. TheConsolidated Financial Statements of the Company and its subsidiaries is providedseparately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Your Company's Whistle blower Policy encourages Directors and employees and businessassociates to bring to the Company's attention instances of unethical behaviour actualor suspected incidents of fraud or violation of the Code of Conduct that could adverselyimpact your Company's operations business performance and / or reputation. The Policyprovides that the Company investigates such incidents when reported in an impartialmanner and takes appropriate action to ensure that requisite standards of professional andethical conduct are always upheld. It is your Company's Policy to ensure that no employeeis victimised or harassed for bringing such incidents to the attention of the Company. Thepractice of the Whistle Blower Policy is overseen by the Audit Committee and no employeehas been denied access to the Committee. During the year under review one complaint wasreceived from a whistleblower which was investigated by the management and was disposedoff as per the legal provisions.

The vigil mechanism / whistle blower policy is available on the Company's website athttp://www.sudarshan. com/perch/resources/whistle-blower-vigil-mechanism- policy.pdf

Annual Return:

The extract of the Annual Return is annexed to this report as Annexure IV and acomplete Annual Return is also available on the website of the Company at

Particulars of loans guarantees or investments under Section 186

Information regarding loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 have been disclosed in the Audited FinancialStatements.

Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo

Information regarding conservation of energy technology absorption and foreignexchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013and Rule 8 of the Companies (Accounts) Rules 2014 is attached to this Report vide

Annexure I.

Particulars of Employees and Related Parties

The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended has been provided as Annexure I and II.

Disclosure pursuant to Section 197(14) of the Companies Act 2013 and Rules made thereunder

Managing Director and Whole Time Director of the Company are not in receipt of anyremuneration and / or commission from any Holding / Subsidiary Company as the case maybe.

Significant and Material Orders passed by the Regulators and Courts

There are no significant material orders passed by the regulators or courts which wouldimpact the going concern status of the Company and its future operations.

Restriction on purchase by Company or giving of Loans by it for purchase of its shares

Pursuant to the provisions of Section 67(3)(c) of the Companies Act 2013 and rulesmade thereunder the Company has not given any loan exceeding the limit mentioned thereinto persons in the employment of the Company other than its Directors or Key ManagerialPersonnel for purchase or subscribe shares of the Company.

Statement of Deviation(s) or Variation(s)

During the year under review there was no instance to report containing Statement ofDeviation(s) or Variation(s) as per Regulation 32 of SEBI Listing Regulations 2015.

Details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 during the year along with their status as at the end of theFinancial Year - Nil hence not applicable.

Details of difference between amount of the valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof - Not Applicable.


Details of the awards received during the year under review are disclosed separately inthis Annual Report.


The Directors thank the Company's employees customers vendors investors and academicpartners for their continuous support.

The Directors also thank the Government of India Governments of various states inIndia Governments of various countries and concerned Government departments and agenciesfor their co-operation. Your Directors place on record their gratitude to Bank ofMaharashtra State Bank of India ICICI Bank Limited HDFC Bank Limited The Hongkong andShanghai Banking Corporation Limited Standard Chartered Bank Citi Bank N.A. IDFC FirstBank Kotak Mahindra Bank Limited and Yes Bank Limited for their co-operation andassistance. Your Directors also place on record their appreciation of the servicesrendered by BMGI.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.

The Directors appreciate and value the contribution made by every member of theSudarshan family.

For and on behalf of the Board of Directors
Date: 28th May 2021 P. R. RATHI
Place: Pune CHAIRMAN