Sandu Pharmaceuticals Ltd

s

TO THE MEMBERS,

The Directors have pleasure in presenting before you the THIRTY NINE Annual Report of SANDU PHARMACEUTICALS LIMITED together with Audited Balance Sheet and Statement of Profit & Loss for the financial year ended 31st March, 2024.

1. FINANCIAL RESULTS:-

The Company's financial performance, for the year ended March 31, 2024 is summarized below:

(in Lakhs)

Standalone

In the financial year 2023-24, the company achieved an Income from operations of Rs. 6,728.07 as compared to Rs. 6,534.90 in the previous year.

Profit before tax was Rs. 207.24 for the year ending 31st March, 2024 as compared to Profit of Rs. 222.01 in the previous year.

Profit after tax was Rs. 146.06 for the year ended 31st March, 2024 as compared to a Profit of Rs. 152.39 in the previous year.

Consolidated

In the financial year 2023-24, the company achieved an Income from operations of Rs. 6,728.07 as compared to Rs. 6,534.90 in the previous year.

Profit before tax was Rs. 207.29 for the year ending 31st March, 2024 as compared to Profit of Rs. 221.67 in the previous year.

Profit after tax was Rs. 146.12 for the year ended 31st March, 2024 as compared to a Profit of Rs. 152.01 in the previous year.

There were no material changes and commitments affecting the financial position of the Company from the end of the financial year till the date of the Directors Report.

3. SUBSIDIARY COMPANY

As on 31st March 2024, your Company had only 01 unlisted wholly owned subsidiary named Sandu Phytoceuticals Private Limited. In accordance with the provisions of Regulation 16(1)(C) of the Listing Regulations pertaining to the threshold for determining Material Subsidiary of the Company, there was no Material Subsidiary of the Company during the financial year.

In accordance with Section 136 of the Companies Act 2013,The audited financials statements, including consolidated financials statements will be available on our website www.sandu.in. The Company would provide the Annual Accounts of the Subsidiaries and the related detailed information to the Shareholders of the Company on specific request made to it in this regard .The same will also be available at the Registered Office of the Company for inspection during the office hours.

The financial statements of the Company are prepared in accordance with Section 129(3) of the Companies Act, 2013. Further, a statement containing salient features of the financial statements of our subsidiaries in prescribed format AOC-1 is appended as Annexure I.

The statement also provides the details of performance and financial position of each subsidiary.

The Board of Directors at its Meeting held on 30th May 2024 has approved sale of 100 % investment in its wholly owned Subsidiary in favour of Shri Umesh Sandu and Shri Shashank Sandu. The consideration amount payable has been arrived based on valuation report issued by CA Murli Chandak, IBBI Registered valuer of Securities and financial assets. The process of sale of investment has already been inititated ,Once completed Sandu Phytoceuticals Private Limited shall cease to be Subsidiary of Sandu Pharmaceuticals Limited.

Sandu Phytoceuticals Private Limited is unlisted / Not Material Subsidiary to Sandu Pharmaceuticals Limited but still Company has formulated Policy on Material Subsidiary and has been uploaded on Companys Website at https://sandu.in/wp-content/ uploads/2023/07/POLICY-FOR-DETERMINING- MATERIAL-SUBSIDIARIES.pdf

4. DECLARATION AND PAYMENT OF DIVIDEND

The Company has a track record of rewarding its shareholders. An Final dividend of Rs. 0.80 paisee per equity share (i.e 8% on the paid up capital) for the FY 2023-24 has been recommended by Board of Directors subject to approval of Shareholders. This recommendation is a reflection of the Company's improved financial performance and its commitment to enhancing shareholder value.

5. SHARE CAPITAL:

As on 31st March 2024, the authorised, issued, subscribed and paid-up Share Capital is as follows :

6. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year, no applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

7. RISK MANAGEMENT:

The Board has laid down a clear Risk Management Policy to identify potential business risks and install effective mitigation processes to protect Company's assets and business Risks. Risk Management Policy and the details of this policy are available on the website of the Company under the web link https:// sandu.in/image/catalog/info-pages/Announcement/ policies/Risk-Management-Policy.pdf

8. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate Internal Financial Control Systems, commensurate with the size, scale and complexity of its operations. The Management evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company on an ongoing basis.

9. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Whistle Blower. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Whistleblower Policy approved and adopted by the Board of Directors which can be accessed in our website https://sandu.in/image/ catalog/info-pages/Announcement/policies/Whistle- Blower-Policy.pdf

9.1 BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been given in the Corporate Governance Report. The Weblink of familiarization Programme undertaken for Independent Director is also available https://sandu. in/wp-content/uploads/2024/03/Familarisation- programme-for-Independent-Director.pdf

The Nomination and Remuneration Committee has defined the evaluation criteria and procedure for the Performance Evaluation process for the Board, its Committees and Directors. The criteria for Board Evaluation include inter alia, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Criteria for evaluation of individual Directors include aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the Management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board Members and motivating and providing guidance to the Managing Director/Executive Director.

Criteria for evaluation of the Committees of the Board include degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

9.2 NOMINATION AND REMUNERATION POLICY

The policy of the Company on Directors Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matter, as required under sub section (3) of Section 178 of the Companies Act, 2013 is available on our website https://sandu.in/ image/catalog/info-pages/Announcement/policies/ Nomination-and-Remuneration-Policy.pdf. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

9.3 MEETINGS

During the year 05 (five) Board Meetings and 05 (Five) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act 2013.

9.4 AUDIT COMMITTEE

The details of the Composition of the Audit Committee are given in the Corporate Governance Report. During the year all the recommendations of the Audit Committee were accepted by the Board.

9.5 POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all Listed companies. All our Corporate Governance policies are available on our website www.sandu. in.The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

(a) Key Managerial Personnel.

Shi Umesh Sandu-Managing Director, Shri Rakesh Parekh-Chief Financial Officer upto 31st December 2023,Smt Pratika Mhambray- Company Secretary have been designated as Key Managerial Personnel in accordance with the provisions of Section 203 of the Companies Act 2013.

Shri Vijay Kajarekar has been appointed as Chief Financial Officer with effect from 30th March 2024 pursuant to resignation of Shri Rakesh Parekh.

(b) Appointment and Reappointment of Directors

In accordance with the provision of the Act and Articles of Association of the Company, Shri Shashank B Sandu Non Executive Director of the Company retires by rotation and being eligible offers himself for reappointment .A resolution seeking members approval for his reappointment forms part of the Notice Shashank B Sandu holding DIN:00678098 (Non Executive Director) retires by rotation and, being eligible offer himself for Re appointment.

The Board of Directors on recommendation of Nomination and Remuneration Committee and in accordance with Article of Association and Securities and Exchange Board of India (LODR) 2015 has appointed Shri Vijay Kottapalli (DIN: 10245156) as Additional Non Executive Director at its meeting held on12th August 2024 for the term of 05 years w.e.f 12th August 2024 and who have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013.Resolution seeking Shareholders approval is mentioned in the Notice of the Annual General Meeting.

On recommendation of the Nomination and Remuneration Committee ,the Board of Directors has proposed candidature of Smt Jayshree Sandu (DIN:07480177) as Non Executive Non Independent Director aged above 75 years in respect of which company has also received notice in writing under Section 160 proposing her candidature with effect from 30th September 2024 subjected to approval of Shareholders in the forthcoming AGM.

During the year under review, the Non Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

(c) Declaration by Independent Director

Pursuant to sub section (7) of Section 149 of the Companies Act 2013 read with rules made thereunder, all the Independent Directors of the Company have given the declaration that they meet criteria of Independence as laid down in subsection (6) of Section 149 of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015.

(d) Retirement of Independent Director

The 02nd term of 05 years Tenure of the below mentioned Independent Directors was over on the closure of Business hour i.e 31st March 2024. The Board of Directors placed on record its appreciation for the Exemplary and outstanding contribution made bt outgoing Directors.

A. Shri Vinay Kumar Kottapalli (DIN:02322747) Non Executive Independent Director and Chairman.

B. Shri Dilip Salgaocar (DIN:00044240) Non Executive Independent Director.

C. Shri Dr Madan Kapre (DIN:03113515) Non Executive Independent Director.

D. Shri Dr Krishna Deshpande (DIN:06557518) Non Executive Independent Director.

In addition to its Code of Conduct and Ethics, key policies that have been adopted by the Company are as follows:

11. DIRECTORS RESPONSIBILITY STATEMENT:-

In accordance with the provisions of section 134(3) (c) read with section 134(5) of the Companies Act 2013, your Directors confirm that:

a) In the preparation of annual accounts, for the year ended 31st March 2024, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2024 and of the profit of the Company for the year ended on that date.

c) Proper and sufficient care has been taken 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 annual accounts have been prepared on a 'Going Concern Basis'.

e) Internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and are operating effectively

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12. CORPORATE SOCIAL RESPONSIBILTY POLICY:

Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.

13. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVE

The Company has not transferred any amount to Reserve and hence it is NIL.

14 RELATED PARTY TRANSACTIONS:

The Related Party Contracts entered into between Related Parties, does not fall under the ambit of Section 188(1) of the Act.

All the Related Party Transactions entered during the financial year were at arm's length and in the ordinary course of business. In compliance with the provisions of the Companies Act 2013 and Regulation 23(2) of the SEBI Regulation 2015, all Related Party Transactions had been placed before the Audit Committee for prior approval. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 information pertaining to Related Parties are given in Form AOC-2 as Annexure I of this Report.

15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant material orders passed by the Regulators/Courts which could impact the going concern status of the Company and its future operations.

16.1 STATUTORY AUDITORS

M/s Dileep and Prithvi, are the Statutory Auditor of the Company appointed for the term of 5 years i.e for the Financial Year 2021-2026 as recommended by Members of Audit Committee /Board of Directors and subsequently approved by the Members at the 36th Annual General Meeting.

Based on the recommendation of Audit Committee, Board of Directors at its Meeting held on 12th August 2024 has proposed to increased remuneration payable to Statutory Auditor for the Financial Year 2024-25 and 2025-26 subjected to approval of Shareholders in the forthcoming Annual General Meeting.

16.2 SECRETARIAL AUDITOR:

Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Shri. Swapnil Dixit, Company Secretary in practice to undertake the Secretarial Audit of the Company for the Financial Year 2023-24. The Secretarial Audit report for the financial year 2023-24 is annexed herewith as "ANNEXURE B".

16.3 INTERNAL COMPLAINTS COMMITTEE

As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has constituted an Internal Complaints Committee for Redressal of complaints against sexual harassment and there were no complaints received during the financial year.

16.4 DISCLOSURE REQUIREMENTS

Your Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

• Management Discussion and Analysis is annexed as "ANNEXURE A" to the report

• Secretarial Audit Report as "ANNEXURE B".

• As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges, a separate section on the corporate governance is annexed as "Annexure C"

• Auditors Certificate on Corporate Governance "Annexure D"

• Certificate from Chief Financial Officer under Regulation 17(8) of SEBI (LODR) Regulation "Annexure E",

• Declaration from Managing Director "Annexure F"

• Certificate of Non Disqualification of Director "Annexure G"

17. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

A) CONSERVATION OF ENERGY:

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

d) The required data with regard to conservation of energy as applicable to our company is furnished below:

B) TECHNOLOGY ABSORPTION:

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the period under review there was no foreign exchange earnings or out flow.

18. EXTRACT OF ANNUAL RETURN

As provided under section 92 (3) ofthe Act, the extract of the Annual Return in form MGT- 9 is annexed herewith as "Annexure H" which forms part of this report.

As per the requirement of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management & Administrative) Rule, 2014 .The Annual Return in the prescribed form is available on the Companies Site www.sandu.in

19. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The information required under section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors is annexed as "Annexure - H" to this report.

20. FIXED DEPOSITS:-

Your Company has not accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits from Public) Rules 2014 during the financial year 2023-24.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:-

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.The details of the Investments made by the Company are given in the notes to the financial statements.

22. PARTICULARS OF CONTRACT OR ARRANGMENTS WITH RELATED PARTY

The Company has Related Party Transaction with Sandu Brother Private Limited which is in ordinary course of Business and on Arm Length Basis duly approved by the Members.

23. CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code of Conduct for Directors https://sandu.in/image/ catalog/info-pages/Announcement/policies/Code-of- Conduct-for-Senior-Management.pdf has been posted on companies Website.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the designated employees and personnel have confirmed compliance with the Code. The Declaration signed by the Managing Director pursuant to Regulation 26(3) read with Schedule V (Part D) of the SEBI (LODR) Regulation 2015 is published in this report.

24. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prohibition of Insider Trading with a view to regulate trading in securities by the Directors and Designated employees of the Company. The Code requires preclearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

Code of Conduct for Prohibition of Insider Trading is available on website of the Company under the web link https://sandu.in/image/catalog/info-pages/ Announcement/policies/Insider-Trading-Policy.pdf

The Company has in place a Structured Digital Database wherein details of persons with whom UPSI is shared on need to know basis and for legitimate business purposes is maintained with time stamping and audit trails to ensure non-tampering of the database.

The Structured Digital Database is maintained internally by the Company and is not outsourced in accordance with the provisions of the SEBI Insider Trading Regulations.

25. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.

26. AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

The Statutory Audit Report and Secretarial Audit Report doesn't contain any qualification, reservation or adverse remarks.

27 . ONE TIME SETTLEMENT

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 NOT APPLICABLE

28. REPORTING OF FRAUDS

There Have Been No Instances Of Fraud Reported By The Auditors Under Section 143(12) Of The Act And Rules Framed Thereunder Either To The Company Or To The Central Government.

29. ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.