To,
The Shareholders of
Sudarshan Pharma Industries Limited
Your Directors have pleasure in submitting their 16th Annual Report together with the Audited Financial Statements of the Company, for the financial year ended 31st March, 2024 ("Financial Year”).
FINANCIAL HIGHLIGHTS
The financial highlights of the Company on standalone and consolidated basis for the Financial Year are as under:
(Rupees in Lakhs)
Particulars
Appropriation:
Balance carried to Balance Sheet
COMPANY'S BUSINESS
The Standalone Gross Revenue from operations for Financial Year was Rs.46,831.37 Lakhs (previous year Rs.46,244.90 Lakhs). The Profit Before tax stood at Rs.1,509.81 Lakhs (previous year Rs.949.94 Lakhs). The Profit After tax for the Financial Year stood at Rs.1,135.53 Lakhs (previous year Rs.703.98 Lakhs).
The Consolidated Gross Revenue including intra-group transactions from operations for Financial Year was Rs.46,614.68 Lakhs (Previous Year: Rs.46,244.90 Lakhs). The Consolidated Operating Profit before Tax stood (for continued operations) at Rs.1,522.84 Lakhs (Previous Year: Rs.949.63 Lakhs). The Consolidated Profit after Tax stood at Rs.1,145.53 Lakhs (Previous Year: Rs.703.67 Lakhs).
The turnover of the Company was up by 0.48 % during the FY ending 31st March 2024 with reference to the previous FY. The Company's EBITDA is Rs.1,522.84 Lakhs with an increase of 61% from last FY. The EPS as of 31st March 2024 is Rs.4.76, down by 13% from last FY.
The Consolidated Financial performance have been prepared in accordance with the recognition and measurement principles laid down in Indian GAAP Interim Financial Reporting prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India.
DIVIDEND & RESERVES
The Board expressed its inability to recommend any dividend for the Financial Year The Board is of the opinion that the funds may be utilised for better opportunities and consequently for the growth of the shareholders' wealth in coming years.
No amount has been transferred to any reserve.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
The Company has 3 (three) wholly-owned subsidiaries as on 31st March, 2024, viz.,
a) Sudarshan Pharma Lifescience Private Limited;
b) Ratna Lifesciences Private Limited and
c) Life Science Chemical Private Limited.
The members are requested to refer to the "Management Discussion & Analysis” Report forming part of the Annual Report for detailed information about the subsidiaries of the Company. Pursuant to the provisions of Section 129(3) of the Act, a statement containing requisite details including performance and financial position of each of the subsidiary companies, the salient features of financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements.
There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act”). There has been no material change in the nature of the business of the subsidiaries.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company http://www.sudarshanpharma.com.
The list of subsidiaries, joint ventures and associate companies of the Company are given in Form MGT-7 (Annual Return), which is uploaded on the Company's website and can be accessed at the web-link https:// www.sudarshanpharma.com/annual-reports/
SHARE CAPITAL OF THE COMPANY
The Company has made Initial Public Offer ("IPO”) during the financial year 2022-23. The IPO was successfully subscribed and the shares of the company were listed on SME Board of BSE. The Company received listing and trading approval on 22nd March, 2023. The offer size under IPO was Rs.5,009.55 Lakhs, that is 68,62,400 number of shares of Rs.10 each at a premium of Rs.63 per Equity Share.
There has been no change in the share capital of the Company during the Financial Year. The paid-up share capital of the Company stood at Rs.2,406.59 Lakhs as at 31st March, 2024 comprising of 2,40,65,887 equity shares of Rs.10/- each fully paid up.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors
During the Financial Year, the Board of your Company comprised of 8 (eight) directors of which 6 (six) are nonexecutive directors and 2 (two) are executive directors. Out of the 6 (six) non-executive directors, 4 (four) are independent directors including one woman independent director.
As on 31st March, 2024, The Board of Directors of the Company comprised of 6 directors, including 2 promoter directors (executive), 1 non-executive director and 3 independent directors including one women director, details given in the following table
Sr.
no.
1
2
Appointed as Chief Financial Officer w.e.f. 12th December, 2023
3
4
5
6
Mr. Hemal Mehta and Mr Sachin Mehta have been re-appointed as Managing Director of the Company for a period of 5 years w.e.f 7th October 2023 and the shareholders approved their re-appointment at the Annual General Meeting held on 2nd September, 2023.
Mr Rushabh Patil was appointed as an additional director in the category of an Independent Director w.e.f. 21st July, 2023 and the shareholders at its Annual General Meeting held on 2nd September, 2023 confirmed his appointment.
Dr. Anil Ghogare was appointed as an additional director in the category of a Non-Executive Director w.e.f. 10th November 2023 and the shareholders at its Extraordinary General Meeting held on 5th February 2024 confirmed his appointment.
Mr Rajesh Hedaoo resigned as an Independent Director of the Company w.e.f. 19th June, 2023.
Mr Nilesh Thakkar was appointed as an additional director in the category of a Non-Executive Director w.e.f. 10th November 2023 and resigned w.e.f. 12th December 2023.
The Board took on record its appreciation for the valuable services rendered by Mr. Rajesh Hedaoo and Mr. Nilesh Thakkar during their tenure as a Directors of the Company.
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Anil Ghogare is liable to retire by rotation at the ensuing Annual General Meeting and has offered himself for reappointment.
Independent Directors of the Company have furnished necessary declarations to the Company under Section 149(7) of the Companies Act, 2013, confirming that they meet with the criteria of Independence as prescribed for Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the Securities And Exchange Board of India (Listing Obligations & Disclosures Requirements) Regulations, 2015, (hereinafter "SEBI Listing Regulations").
Key Managerial Personnel
Mr Hemal Mehta and Mr Sachin Mehta have been re-appointed as Managing Director of the Company for a period of 5 years w.e.f. 7th October 2023 and the shareholders approved their re-appointment at the Annual General Meeting held on 2nd September, 2023.
Mr Dharam Jilka resigned as the Chief Financial Officer of the Company w.e.f. 15th September 2023. Mr. Sachin Mehta was appointed as the Chief Financial Officer of the Company w.e.f. 12th December, 2023.
Ms. Ishita Samani resigned as the Company Secretary & Compliance Officer of the Company w.e.f. 1st April 2024. Mr Nirav Shah was appointed as the Company Secretary & Compliance Officer of the Company w.e.f. 1st June 2024.
In terms of the provisions of Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr Hemal Mehta, Chairman & Managing Director, Mr Sachin Mehta, Joint Managing Director & Chief Financial Officer and Mr Nirav Shah, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company
Remuneration Policy and Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178:
A policy known as "Appointment criteria for Directors & Senior Management and their Remuneration Policy" approved by the Nomination and Remuneration Committee and Board is followed by the Company on remuneration of Directors and Senior Management employees as required under Section 178(3) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Policy aims at attracting and retaining high calibre personnel from diverse educational fields and with varied experience to serve on the Board for guiding the Management team to enhanced organizational performance. The company has adopted remuneration policy that commensurate with the size and future plans of the company, considering different verticals as a part of expansion and diversification, the current policy is an appropriate mix of executive and independent directors to maintain the independence of the Board. The Nomination & Remuneration Committee framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.
Familiarisation Programmes for Independent Directors
The details of the programme for familiarisation of the Independent Directors with the Company in respect of their roles, rights, responsibilities in the Company, nature of the industry in which Company operates, business model of the Company and related matters are put up on the website of the Company i.e. www.sudarshanpharma.com
MEETINGS OF THE BOARD
During the Financial Year 2023-24, the Board of Directors met 7 (seven) times on 26th May, 2023, 21st July, 2023, 2nd August, 2023, 18th August, 2023, 10th November, 2023, 12th December, 2023 and 28th March, 2024. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations.
BOARD COMMITTEES
At present, the Board has the following committees to assist in its work:
(i) Audit Committee to, inter-alia, oversee and review the financial reporting system and disclosures made in its financial results;
(ii) Stakeholders' Relationship Committee to, inter-alia, redress investor complaints;
(iii) Nomination & Remuneration Committee to, inter-alia, approve appointments and remuneration of executive directors and lay down nomination and remunerationpolicies of the Company;
(vi) Corporate Social Responsibility Committee to formulate and implement a 'corporate social responsibility policy' for the Company and
The constitution of various committees, its powers, duties and meetings during the Financial Year have been elaborated in detail in the 'Corporate Governance Report'.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013 ('the Act'), in relation to the Annual Financial Statements for the Financial Year 2023-24, your Directors, to the best of their knowledge and ability, confirm that:
a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) the Directors have selected such accounting policies 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 as at March 31, 2024 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a "going concern” basis.
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, except that the credit given to the overseas buyers in the previous year(s).
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
DEPOSITS
During the Financial Year, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Act, read with Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
The details of loans, guarantees, investments or securities under Section 186 of the Companies Act, 2013 are given under Notes to Accounts of financial statements.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year, the Company has entered into transactions with related parties as defined under Section 2(76) of the Act and rules made thereunder and Regulation 23 of SEBI Listing Regulations. The Company has not entered into transactions with related parties which qualify as material transactions as per SEBI Listing Regulations. The transactions with related party were reviewed and approved by the Audit Committee and in compliance with applicable provisions of the Act and SEBI Listing Regulations.
The details of related party transactions as required under accounting standards as are set out in notes to accounts to Standalone Financial Statements forming part of this Annual Report. There are no transactions to be reported in Form AOC-2.
The policy on Materiality of Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed at the Web link https://www.sudarshanpharma.com/codes-and-policies/
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) Conservation of energy-
and health care specialists and as such its operations do not account for substantial energy consumption. The Company is taking all possible measures to conserve energy, in its endeavour towards conservation of energy your Company ensure optimal use of energy, avoid wastages and conserve energy as far as possible. Several environment friendly measures were adopted by the Company such as minimizing air-conditioning usage, Shutting off all the lights when not in use. lights when not in use.
(B) Technology absorption-
The chemical and pharma sector is highly technology oriented and nature of the business of the company is categorically business-to-business category wherein research and development expense are more in the nature of quality check and related areas rather than development of new technology.
(C) Foreign Exchange Earnings and Outgo
The information regarding foreign exchange earnings and outgo is given in the following table:
Foreign Exchange Earnings
Foreign Exchange Outgo
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors of the Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act and rules framed thereunder The Company has in place a CSR policy which provides guidelines to conduct CSR activities of the Company. The CSR policy is available on the website of the Company www.sudarshanpharma.com
The provisions related to CSR as mentioned in the Companies Act, 2013 are applicable to the Company and report on Corporate Social Responsibilities (Annual report on CSR) is annexed to this report as Annexure I.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company does not have any amount / shares due to be transferred to Investor Education and Protection Fund. VIGIL MECHANISM / WHISTLE BLOWER
In terms of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established by the Board along with whistle blower policy. The whistle blower policy has been uploaded on the website of the Company and the same can be accessed at the web-link https:// www.sudarshanpharma.com/codes-and-policies/
REPORT ON CORPORATE GOVERNANCE
In terms of Regulation 34 of the SEBI Listing Regulations, a Report on Corporate Governance along with Compliance Certificate issued by Mr. Vishal Manseta, Practicing Company Secretary is attached and forms integral part of this Report (herein referred to "Corporate Governance Report”).
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Attention of the members is invited to a separate section titled 'Management Discussion & Analysis Report' which is covered in this Annual Report.
SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards.
STATUTORY AUDITORS
M/s. NGST & Associates (Firm Registration No. 135159W), Chartered Accountants, Mumbai Statutory Auditors of the Company, hold office till the conclusion of the Annual General Meeting for the Financial Year ended 31st March, 2028.
AUDITORS' REPORT
The Auditors of the Company have not made any observations and / or qualifications in their audit report issued on standalone and consolidated financial statements of the Company of the financial year ended 31st March, 2024. The report of the Statutory Auditors on Standalone & Consolidated Financial Statements forms a part of the Annual Report. There are no specifications, reservations, adverse remarks on disclosure by the Statutory Auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the Financial Year.
REPORTING OF FRAUDS BY AUDITORS
During the Financial Year, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's report.
SECRETARIAL AUDITOR
Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex with its Board's report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form. The Board appointed Mr Vishal Manseta, Practicing Company Secretary, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2023-2024 and their report MR-3 is annexed to this report as Annexure II.
The Secretarial Auditor has not made any remarks / observations / qualifications in the Secretarial Audit Report for the year ended 31st March, 2024. The Board has also appointed Mr Vishal Manseta as the Secretarial Auditor to conduct secretarial audit of the Company for Financial Year 2024-25.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the Financial Year, no complaint was filed before the Internal Complaints Committee under The Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure III.
During the Financial Year, none of the employees are in receipt of remuneration which is in excess of the limits as specified in Rules 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There were no material changes and commitments after the closure of the year till the date of this report, which affect the financial position of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THEREGULATORS / COURTS / TRIBUNALS
The Company won an award in its favour announced by the Dubai Court in Lawsuit no. 1679/2024 - Commercial against (i) Regans International DMCC and (ii) Nand Biharilal Chhabaria Biharilal Chunilal in Dubai, United Arab Emirates. According to the award (i) Regans International DMCC and (ii) Nand Biharilal Chhabaria Biharilal Chunilal have been ordered to pay to the Company an amount of UAE Dirham 40,30,934.00 (equivalent to approx. Rs.9,18,82,890/-) along with interest at 5% annually on the adjudged amount until the full payment is made.
No significant or material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Company's operations in future.
INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations, and such internal financial controls with reference to the financial statements are adequate.
OTHER EVENTS TILL THE DATE OF THIS REPORT
The Board of Directors of the Company at its Board meeting held on 4th July, 2024 has approved the proposal to raising of funds through issue and allotment of up to 9,00,000 (Nine Lakhs) Warrants, each Warrant convertible into 1 (one) Equity Share of the Face Value of Rs.10/- (Rupees Ten Only) in terms of Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 on a preferential basis to Mr Hemal Mehta and Mr Sachin Mehta, Promoters of the Company.
Based on analysis conducted by BSE Limited, the Company was in receipt of email dated 6th February 2024 from BSE Limited seeking clarification from the Company about various financial parameters of the Company. The Company accorded complete co-operation to the BSE and provided all the necessary clarifications (including information and documents) for the queries raised by the BSE.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
There are no instances of one-time settlement during the financial year.
ACKNOWLEDGEMENTS
The Board wishes to place on record their appreciation for the support received by the Company from its shareholders and employees. The Directors also wish to acknowledge the co-operation and assistance received by the Company from its business partners, bankers, financial institutions and various Governments, Semi Government and Local Authorities.
For and on behalf of the Board of, Sudarshan Pharma Industries Limited
Place: Mumbai
Date: 26th August 2024