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Suven Pharmaceuticals Ltd.

BSE: 543064 Sector: Health care
NSE: SUVENPHAR ISIN Code: INE03QK01018
BSE 00:00 | 29 Nov 489.50 -10.40
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OPEN 502.00
PREVIOUS CLOSE 499.90
VOLUME 7829
52-Week high 589.80
52-Week low 376.65
P/E 34.74
Mkt Cap.(Rs cr) 12,463
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 502.00
CLOSE 499.90
VOLUME 7829
52-Week high 589.80
52-Week low 376.65
P/E 34.74
Mkt Cap.(Rs cr) 12,463
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suven Pharmaceuticals Ltd. (SUVENPHAR) - Director Report

Company director report

To the Members of

Suven Pharmaceuticals Limited

Your Company's Board of Directors has pleasure in presenting this 3rdAnnual Report together with Ind AS compliant Audited Financial Statements of the Companyfor the financial year ended 31st March 2021.

Financial Performance

(Amount in Rs. Lakh)

Particulars Standalone Consolidated
Financial Year 2020-21 Financial Year 2019-20 Financial Year 2020-21 Financial Year 2019-20
Revenue from operations 100972 83379 100972 83379
Other income 1424 1812 1424 1812
Total income 102396 85WW191 102396 85191
Operating expenditure 56920 45215 56924 45219
Depreciation and amortization 3164 2351 3164 2351
Operating profit 42312 37625 42308 37621
Finance cost 914 1866 914 1992
Share of Profit/(Loss) of Associates - - 5374 4821
Profit before Tax (PBT) 41398 35759 46767 40451
Tax expenses 10533 8751 10533 8751
Profit for the year 30865 27008 36234 31700
Other Comprehensive Income
Items that will not be reclassified to profit or loss (112) (109) (112) (109)
Income tax relating to items that will not be reclassified to profit or loss 28 28 28 28
Total Other Comprehensive Income (84) (82) (84) (82)
Total Comprehensive Income 30781 26926 36150 31618
Retained earnings - opening balance 56852 39098 61544 39098
Add: Profit for the year 30781 26926 36150 31618
Less: Dividend paid (2546) (7672) (2546) (7672)
Transfer to General Reserve (1500) (1500) (1500) (1500)
Retained earnings - closing balance 83587 56852 93649 61544

Review of Operations

During the year under review your Company performed well and recordedstandalone revenue of RS. 100972 Lakhs higher by 21 percent over the previous year'srevenue of RS. 83379 Lakhs. Profit after Tax (PAT) of the Company is recorded at RS.30865 Lakhs. The Earnings Per Share (EPS) of your Company is at RS. 12.12 in fiscal2020-21 per share.

On a bottom line consolidation basis the profit after tax (PAT) forFiscal 2020-21 has gone up to the order of RS. 36234 Lakhs due to inclusion of RS. 5374Lakhs of unrealized share of profit from Rising Pharma Holdings Inc. the associatecompany through the WOS - Suven Pharma Inc. in USA. The Earnings per Share (EPS) of yourCompany is recorded at RS. 14.23 per share.

The consolidated financial statements of the Company prepared inaccordance with Indian Accounting Standards as specified in the Companies (IndianAccounting Standards) Rules 2015 form part of the Annual Report.

Impact of the COVID-19 pandemic

The COVID-19 pandemic has affected the global economy from almost morethan a year and second wave of the COVID-19 continued the restrictions and disruption inthe business operations starting March 2021 in terms of employee absenteeism (around20%) adjustment of shifts due to lock down material movements and increase in rawmaterial cost. However the COVID-19 did not have major impact on the business operationswhich includes our subsidiary Suven Pharma Inc.

Exports

The exports of the Company are the major chunk of revenue accountingfor RS. 96664 Lakhs representing 96% of the total revenue of RS. 100972 Lakhs duringthe year under review.

Dividend

Your Directors are pleased to recommend a final dividend of 11.00 perequity share of face value of RS. 1/- for the year ended 31st March 2021. The interimDividend of RS. 1.00 per share was already paid on 1st March 2021. The total dividend forthe financial year worked out to RS. 2/- per equity share.

The final dividend subject to the approval of Members at the AnnualGeneral Meeting to be on Tuesday 31st August 2021 will be paid on and from Tuesday07th September 2021 to the Members whose names appear in the Register of Members as onthe Record date i.e. Tuesday 17th August 2021. In view of the changes made under theIncome-tax Act 1961 by the Finance Act 2020 dividends paid or distributed by theCompany shall be taxable in the hands of the Shareholders. Your Company shallaccordingly make the payment of the final Dividend after deduction of tax at source.

Transfer to Reserves

The Company transferred RS. 1500 Lakhs to the general reserve duringthe current financial year.

Issue of Bonus Equity Shares

The Board of Directors at their meeting held on 17th August 2020recommended issue of bonus equity shares in the proportion of 1:1 i.e. 1 (One) bonusequity share of RS. 1/- each for every 1 (one) fully paid-up equity share held). The saidbonus issue was approved by the Members of the Company in Annual General Meeting held on14th September 2020. The Board allotted 127282478 bonus shares on 29th September 2020to the Members whose names appeared on the register of members as on 28th September 2020being the record date fixed for this purpose thus the total paid up capital of yourcompany has gone up to the order of RS. 254564956 consisting of 254564956 equityshares of face value of RS. 1/- each.

Share Capital

During the financial year 2020-21 your Company's authorized capitalwas increased from RS. 201000000/- (Rupees Twenty Crores Ten Lakhs) to RS. 400000000/- (Rupees Forty Crores) by creation of additional 199000000 (Nineteen Crores NinetyLakhs) equity shares of RS. 1/- (Rupees One each). The said increase in authorized sharecapital was pursuant to approval of shareholders of the Company in Annual General Meetingheld on 14th September 2020.

During the year under review the Company has not issued any shareswith differential voting rights nor granted stock options or sweat equity shares.

Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on 31st March 2021 is available on the Company's website and can beaccessed at web link athttps://www.suvenpharm.com/index.php/investors/financial-info/annual-reports

Number of Meetings of the Board and Audit Committee

During the year under review six Board Meetings were convened and heldand four Audit Committee Meetings were convened and held. The details of Board meetingsand Audit Committee meetings are presented in the Corporate Governance report which formspart of this Annual Report.

The Audit Committee composed of independent and nonexecutive directors.Shri D. G. Prasad is the Chairperson of the Audit Committee and Shri S. Chandrasekhar andShri J. V. Ramudu are members of the Audit Committee. The time gap between the saidmeetings was within the period prescribed under the provisions of the Companies Act 2013and the SEBI guidelines thereof.

Directors Responsibility Statement

Your Directors state that:

(a) The applicable accounting standards have been followed in thepreparation of the Annual Accounts and there were no material departures.

(b) Such accounting policies have been selected and appliedconsistently and judgments and estimates made when required that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit of the Company for that period.

(c) Proper and sufficient care has been taken 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.

(d) The Directors have prepared the Annual Accounts on a going concernbasis.

(e) Proper internal financial controls were in place to be followed bythe Company and that the financial controls were adequate and were operating effectively.

(f) Proper systems devised to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.

Policy on Nomination & Remuneration

The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy is stated in the CorporateGovernance Report. Which is a part of this report and is also available on

https://www.suvenpharm.com/imaaes/pdf/policies/Remuneration Policy.pdf

Dividend Distribution Policy

The Board has adopted a suitable Policy for Dividend Distribution asper the requirements of SEBI Guidelines. The policy is stated in the Annual Report and hasbeen uploaded on the Company's website and can be accessed at

https://www.suvenpharm.com/imaaes/pdf/policies/dividend-distribution-policv.pdf

Particulars of Loans Guarantees or Investments

Details of loans given investments made guarantees given andsecurities provided are furnished in the Standalone Financial Statement which can bereferred at Note No. 6 and 32 to the Standalone Financial Statements.

Apart from this the Company did not give any Loans investments orprovided Guarantees or any security during the year under the provisions of Section 186 ofthe Companies Act 2013.

Subsidiary companies

Your Company has one international wholly owned subsidiary company ason 31st March 2021. The consolidated financial statements of the Company prepared inaccordance with Indian Accounting Standards as specified in the Companies (IndianAccounting Standards) Rules 2015 form part of the annual report.

Pursuant to the provisions of Section 129(3) of the Companies Act2013 a statement containing salient features of financial statements of subsidiary inForm AOC-1 forms part of is attached to the financial statements of the Company. Furtherpursuant to the provisions of Section 136 of the Act separate audited financialstatements in respect of the subsidiary company shall be kept open for inspection at theRegistered Office of the Company during working hours for a period of 21 days before thedate of the Annual General Meeting. Your Company will also make available these documentsupon request by any Member of the Company interested in obtaining the same. The separateaudited financial statements in respect of the subsidiary company is also available on thewebsite of your Company athttps://www.suvenpharm.com/index.php/investors/financial-info/subsidiary-accounts

Related Party Transactions

The Particulars of contracts or arrangements with related partiesreferred to in sub-section (1) of section 188 in the prescribed Form AOC-2 pursuant toclause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules 2014 forms part of this report as "Annexure - A".

The Board has approved a policy for related party transactions whichhas been uploaded on the Company's website.

Material Changes and Commitments Affecting Financial Position of theCompany

There are no material changes and commitments affecting the financialposition of the Company which has occurred between the end of the financial year of theCompany i.e. 31st March 2021 and the date of the Directors' report i.e. June 08 2021.

Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

The information on conservation of energy technology absorptionforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 forms part of thisreport as "Annexure - B".

Risk Management Policy

The Board formulated a suitable risk management policy to take care ofall aspects of Contract Development and Manufacturing Operations (CDMO) business model ofyour Company: viz. competitive position capabilities various risk covers and riskmitigation preparedness etc. Post demerger the CRAMS business undertaking wastransitioned to the company along with rich talent pool of scientists having 2 decades ofexperience in the form of expertise capability and timely deliverables to globalinnovators to ensure smooth flow of CDMO projects to sustain steady revenues. In additionyour company regularly conducts safety and preventive audits in all plants and ensuresthat necessary safeguards are in place to protect the work force and assets against allperils with appropriate insurance policies.

Corporate Social Responsibility

In compliance with Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility (CSR) Committee composed of Shri J. V. Ramudu asChairperson Smt. Deepanwita Chattopadhyay and Shri Venkateswarlu Jasti as members. TheCSR programs of the Company are being implemented by Suven Trust. As of 31st March 2021there were no amounts due payable to Suven Trust by your Company. In accordance with theamended rules your company does not require to undertake the impact assessment of CSRprojects.

Annual Report on CSR Activities forms part of this Report as "Annexure- C". The CSR Policy Committee Composition and CSR programs details areavailable on the Company's website on https://www.suvenpharm.com/imaaes/pdf/CSR Policy2021.pdf

Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act 2013 and as per theSEBI (LODR) Regulations 2015 the Board has carried out an annual performance evaluationof its own performance the directors individually as well as the evaluation of theworking of its Committees. The Independent Directors separately carried out evaluation ofChairperson Non Independent Directors and Board as a whole. The performance of eachCommittee was evaluated by the Board based on views received from respective CommitteeMembers. The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.

Directors and Key Managerial Personnel

The Company did not appoint any directors or Key Managerial Personnelduring the year under review. None of the Directors or Key Managerial Personnel hasresigned during the year under review.

Declaration by Independent Directors

All independent directors of the Company have given declarations underSection 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI Listing Regulations.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act 2013 ShriVenkateswarlu Jasti Chairman and Managing Director (DIN:00278028) retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment.

The brief profile(s) of the director(s) seeking appointment/re-appointment at the ensuing Annual General Meeting are presented in the Annual Report.

Deposits

During FY 2020-21 the Company has not accepted any fixed depositsand as such no amount on account of principal or interest on deposits was outstanding ason the date of the balance sheet.

Internal Financial Control Systems and their Adequacy

Your Company has laid down set of standards which enables to implementinternal financial control across the organization and ensure that the same are adequateand operating effectively (1) to provide reasonable assurances that: transactions areexecuted 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 or specificauthorization and the maintenance of records that are in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; and (3)Provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the assets that could have a material effect on thefinancial statements. The Audit Committee of the Board reviews the reports submitted bythe independent internal auditors and monitors the functioning of the system.

Vigil Mechanism

The Company has put in place Whistle Blower Policy a vigil mechanism todeal with instance of fraud and mismanagement if any. The details of the Whistle BlowerPolicy is explained in the Corporate Governance Report and also posted on the website ofthe Company. https://www.suvenpharm.com/imaaes/pdf/policies/whistle-blower-policy.pdf

Particulars of Employees and Remuneration

The information required under Section 197(12) of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this report as "Annexure - D".

Corporate Governance

A detailed Report on Corporate Governance prepared in substantialcompliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with the Stock Exchanges together with the Auditors' Certificateregarding the compliance of conditions of corporate governance is presented in a separatesection forming part of the Annual Report.

Management's Discussion and Analysis

Management's Discussion and Analysis Report for the year under reviewas stipulated under Regulation 34 of the SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of the Annual Report.

Auditors Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act 2013and the Rules framed thereunder the Company in its 1st Annual General Meeting (AGM) heldon 30th November 2019 has appointed M/s. Karvy & Co. Chartered Accountants (FirmRegistration No. 001757S) as statutory auditors for a period of 5 years from theconclusion of 1st AGM till the conclusion of the sixth AGM to be held in the year 2024.The Companies (Amendment) Act 2017 dispensed the ratification of auditor's appointment atevery Annual General Meeting. The Auditors' Report does not contain any qualifications noradverse remarks.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s. DVM & Associates LLP Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report forms part ofthis report as "Annexure - E". The Secretarial Audit Report does notcontain any qualifications nor adverse remarks.

Cost Records and Audit

In terms of Cost (Records and Audit) Amendment Rules 2014 dated 31stDecember 2014 issued by the Central Government the requirement for Cost Audit is notapplicable to the Company based on the export turnover criteria prescribed under CostAudit Rules. However the Company is maintaining such accounts and record as specified bythe Central Government and as applicable to the Company under sub-section (1) of section148 of the Companies Act 2013.

Business Responsibility Report

Pursuant to the SEBI Listing Regulations a detailed BusinessResponsibility Report (BRR) is prepared. As a green initiative the BRR is placed onwebsite of your company and can be accessed at web link athttps://www.suvenpharm.com/index.php/investors/financial-info/annual-reports

Employees Stock Option Scheme

The Company grants share-based benefits to eligible employees with aview to attracting and retaining the best talent encouraging employees to alignindividual performances with Company objectives and promoting increased participation bythem in the growth of the Company.

Suven Pharma Employee Stock Option Scheme 2020 ("SPL ESOP2020")

On September 14 2020 pursuant to approval by the shareholders in theAGM the Board has been authorized to introduce offer issue and provide share-basedincentives to eligible employees of the Company and its subsidiaries under the SPL ESOP2020 scheme. In terms of the scheme the total number of options to be granted are1000000 of face value of RS. 1/- each.

The nomination and remuneration committee (NRC) has not granted anyoptions under the SPL ESOP 2020 scheme during the year ended 31st March 2021. Upon thegranting of the options it shall vest in one or more tranches based on the achievement ofdefined annual performance parameters as determined by the administrator (the NRC).

The total number of equity shares to be allotted to the employees ofthe Company and its subsidiaries under the SPL ESOP 2020 does not cumulatively exceed 1%of the issued capital.

The SPL ESOP 2020 is drawn up in compliance with SEBI (Share BasedEmployee Benefits) Regulations 2014 as amended from time to time and there has been nomaterial change to the plans during the fiscal.

The SPL ESOP 2020 details including terms of reference and therequirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 are available on the Company's website at www.suvenpharm.com.

Transfer of Unpaid and Unclaimed amounts to Investor Education andProtection Fund (lEPF)

Your company will ensure compliance of the applicable provisions ofIEPF Rules at appropriate time since your company is incorporated in the year 2018.

Disclosure in relation to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

The Company has complied with the provisions relating to theconstitution of Internal Complaints Committee as specified under Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

Your Directors further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

General

During the FY2021 there is no change in the nature of business of thecompany or of its wholly owned subsidiaries. there are no other companies have become orceased to be your Company's subsidiaries joint ventures or associate companies during theyear.

The Company has complied with the provisions of all applicableSecretarial Standards issued by the Institute of Company Secretaries of India during theyear under review. Your Directors state that no disclosure or reporting is required inrespect of the following matters during the year under review:

(i) . The details of frauds reported by auditors under sub section (12)of section 143 other than those which are reportable to the Central Government

(ii) . A statement regarding opinion of the Board with regard tointegrity expertise and experience (including the proficiency) of the independentdirectors appointed during the year.

(iii) . The details of application made or any proceeding pending underthe Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year along with theirstatus as at the end of the financial year.

(iv) . The details of difference between amount of the valuation doneat the time of one-time settlement and the valuation done while taking loan from the Banksor Financial Institutions along with the reasons thereof.

(v) . The details of significant material orders passed by theregulators or courts or tribunals impacting the going concern status of the company andits future operations.

Acknowledgements

Your Directors wish to place on record their gratitude to Shareholdersfor the confidence reposed by them and thank all the shareholders customers dealerssuppliers and other business associates for their contribution to your Company's growth.The Directors also wish to place on record their appreciation of the valuable servicesrendered by the executives staff and workers of the Company.

Your Directors also thank the Central Government and State Governmentthe Financial Institutions and Banks for their support during the year and we look forwardto its continuance.

For and on behalf of the Board of Directors
Venkateswarlu Jasti
Place: Hyderabad Chairman & MD
Date: 8th June 2021 DIN:00278028

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