Sakar Healthcare Ltd

The Members,

Sakar Healthcare Limited,

Your Directors have pleasure in presenting the 20^th ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2023-24 ended 31^st March, 2024.

1. FINANCIAL RESULTS AND OPERATIONS:

(Rs. in lakh)

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1^st April, 2024 and date of this report.

During the year under review, the Company achieved turnover of Rs.15335.17 lakh as compared to Rs. 13335.90 lakh during 2022-23. The Company earned profit before interest, depreciation and tax of Rs. 4154.06 lakh during as compared to Rs. 3781.19 lakh during 2022-23. After providing for interest, depreciation and taxes, the net profit for the year under review stood at Rs. 1167.09 lakh as compared to Rs. 1275.86 lakh during 2022-23.

2. DIVIDEND:

With view to conserve the financial resources for the future requirement of the Company, the Board of Directors has not recommended any dividend for the year.

3. AWARDS AND RECOGNITIONS:

Global Business Review, GBR:INDIA LIFESCIENCES 2023 edition had interviewed key stake holders and mentioned Sakar Healthcare Ltd.'s expansion with API-integrated oncology formulation manufacturing unit and it's potential under Contract manufacturing (CDMO). This WHO GMP approved plant was then after audited and received EU GMP approval for Oral Solid (tablet, capsule) and Injection (liquid, lyophilised) manufacturing units.

4. ALLOTMENT OF EQUITY SHARES ON PREFERENTIAL BASIS :

The Company has allotted 23,09,910 Equity Shares of Rs. 10/- each at premium of Rs. 249.75 per Equity Shares on 1^st September, 2023 to Non-Promoter on Preferential Basis after complying with the provisions and guidelines under the Companies Act, 2013 and SEBI Regulations. The Company also obtained approval of National Stock Exchange of India Limited (NSE) for Listing & Trading of the said Equity Shares in due course of time.

The disclosure as required under Regulation 32(7A) of SEBI LODR Regulations, 2015 is as under:

Objects for which funds have been raised:

- On 28^th December, 2023, the Company allotted 4,00,000 Equity Shares of Rs. 10/- each at premium of Rs. 374/ - per Equity Shares to Non-Promoters and 5,00,000 Warrants (Convertible equal number of Equity Shares) of Rs. 10/- each ('Convertible Warrants') at a premium of Rs. 374/- per security to Promoters & Non Promoters on Preferential basis after complying with the provisions and guidelines under the Companies Act, 2013 and SEBI Regulations. The Company also obtained necessary approvals of National Stock Exchange of India Limited (NSE) for the same.

The disclosure as required under Regulation 32(7A) of SEBI LODR Regulations, 2015 is as under:

Objects for which funds have been raised:

Post allotments of Equity Shares as aforesaid, the paid up Capital of the Company stood at Rs. 21,74,99,100/- divided into 2,17,49,910 Equity Shares Equity Shares of Rs.10/- each as on date of this report.

6. SHARE CAPITAL:

The Company has increased its Authorised Share Capital from Rs. 20 Crores to Rs. 25 Crores in the Extra Ordinary General Meeting held on 29^th August, 2023.

The paid up Share Capital of the Company as on 31^st March, 2024 was Rs. 21.74 Crore. As on 31^st March, 2024.The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

During the fiscal 2024, the Company allotted 5,00,000 convertible warrants of Rs. 10/- each to Promoters and NonPromoter. As on date of this report, the Promoter Directors holds 2,00,000 convertible warrants.

7. RESERVES:

The Company does not propose to transfer any amount to General Reserves.

8. DEMATERIALISATION OF EQUITY SHARES:

All the Equity Shares and Convertible Warrants of the Company are in dematerialised form with either of the depository viz. NSDL and CDSL.

The ISIN allotted to the Company for Equity shares is INE732S01012.

The ISIN allotted to the Company for Convertible Warrants is INE732S13025.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL:

9.1 One of your Directors viz. Mr. Aarsh S. Shah (DIN: 05294294) retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment.

9.2 The Company has appointed Ms. Vishalakshi Chandramouli (DIN: 03594109) as Non-Executive Non Independent Director of the Company w.e.f 1^st September, 2023.

9.3 The Company has appointed Ms. Khyati Shah (DIN: 09430457) and Mr. Jignesh Parikh (DIN: 01303311) as Non-Executive Independent Directors of the Company w.e.f 6^th November, 2023

9.4 The Company has appointed Mr. Sunil Marathe (DIN: 08777180) as Whole time Director - Technical w.e.f. 6^th November, 2023.

9.5 Ms. Rita S. Shah (DIN: 01515340) has step down from the position as Whole-time Director to Director (NonExecutive) w.e.f. 6^th November, 2023. She will continue to act as Director (Non-Executive) of the Company.

9.6 The Board in their meeting held on 22^nd July, 2024, based on the recommendation of the Nomination and Remuneration Committee and subject to approval of members/shareholders, have:

- Re-appointed Mr. Sanjay S. Shah (DIN: 01515296), as Managing Director of the Company w.e.f. 1^st December, 2024 for a period of 3 years

- Re-appointed Mr. Aarsh S. Shah (DIN: 05294294), as Joint Managing Director of the Company w.e.f. 1^st December, 2024 for a period of 3 years.

9.7 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act. The Independent Director shall enroll his / her name in the Databank, being maintained by Indian Institute of Corporate Affairs to qualify as an Independent Director. The enrollment of Independent Directors has been completed and they have furnished the declaration affirming their compliance to the Board with the provisions contained under sub rule 1 & 2 of Rule 6 of Companies (Appointment & Qualification of Directors) Rules.

9.8 Brief profile of the Directors who are being appointed or re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings is provided in the notice for the forthcoming AGM of the Company.

9.9 The Board of Directors duly met 9 times during the financial year under review.

9.10 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.11 DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had 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 at 31^st March, 2024 being end of the financial year 2023-24 and of the profit of the Company for the year;

(iii) That the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

(v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

11. MANAGERIAL REMUNERATION:

*Ceased as a Whole time Director w.e.f. 6^th November, 2023 @Appointed w.e.f. 6^th November, 2023

The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. The Relationship of remuneration to performance is clear and meets appropriate performance benchmarks. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policyis available on the Company's website www.sakarhealthcare.com

12. KEY MANAGERIAL PERSONNEL:

12.1 % INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

12.2 COMPARISON BETWEEN REMUNERATION OF KMP & PERFORMANCE OF THE COMPANY:

As per the Remuneration Policy and based on the Recommendation of Nomination & Remuneration Committee the Relationship of remuneration to KMP & performance of Company is clear and meets appropriate performance benchmarks.

13. PERSONNEL AND H. R. D.:

13.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D.

The number of Employees of the Company is 325. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. PARTICULARS OF LOANS, GUARANTEES, INVESTMENT& SECURITIES PROVIDED:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Auditors' Report.

15. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT& SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Auditors' Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure- A.

17. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,Report on Corporate Governance, Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.

18. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - C.

There are no remarks / qualification in the Secretarial Audit Report, hence no explanation has been offered.

19. WEB ADDRESS OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the draft Annual Return as on 31^st March, 2024 is available on the Company's websitewww.sakarhealthcare.com.

20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate Governance Report.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per provisions of 135 of the Companies Act, 2013 and Rules made thereunder, the Company has constituted a CSR Committee of Directors consisting of Mr. Sanjay S. Shah, Chairman, Mr. Aarsh S. Shah and Mr. Prashant C. Srivastav, as members and has laid down a CSR policy.

Some of the core areas identified by the Committee are Education, Health, Environment, women empowerment, Animal Welfare, Hungeretc.

21.1 ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY:

As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014 the Annual Report on Corporate Social Activities has been attached herewith as Annexure -D.

22. GENERAL:

22.1 AUDITORS:

STATUTORY AUDITORS:

The present Auditors of the Company M/s. J S Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 132059W), were appointed as Statutory Auditors of the Company at the 18^th Annual General Meeting for a period of 5 years i.e. for financial years 2022-23 to 2026-27. They continue to hold office as Statutory Auditors till the conclusion of 23^rd AGM to be held in the year 2027.

The remarks of Auditor are self explanatory and have been explained in Notes on Accounts.

COST AUDITORS:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company has been carrying out audit of cost records every year.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Dalwadi& Associates, Cost Accountants, (Firm Registration Number 000338) as Cost Auditor to audit the cost accounts of the Company for the financial year 2024-25.

As required under the Companies Act, 2013, a resolution seeking Shareholders' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

22.2 INSURANCE:

The Company's properties including building, plant and machinery, stocks, stores etc. continue to be adequately insured against risks such as fire, riot, strike, civil commotion, malicious damages, machinery breakdown etc.

22.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there were no overdue deposits.

22.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.

22.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Associate / JVs.

The Company has a Subsidiary namely Sakar Oncology Private Limited. Further, a statement containing the salient feature of the financial statement of Subsidiary company under the first proviso to sub-section (3) of section 129 is appended as Annexure - E. Apart from this, the Company does not have any Subsidiary.

22.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

22.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

22.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

22.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

22.10 GRATUITY:

The Company has made necessary provisions for the payment of Gratuity.

22.11 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

22.12 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

22.13 There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

22.14 There was no instance of one time settlement with any Bank or Financial Institution.

22.15. With respect to the loans advanced by the Directors to the Company, the Company has received necessary declarations from Directors that the said loan is not given out of funds acquired by them by borrowing or accepting loans or deposits from others.

22.16 No agreements have been entered / executed by the parties as mentioned under clause 5A of paragraph A of Part A of Schedule III of SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 which, either directly or indirectly effect / impact the Management or Control of the Company or impose any restriction or create any liability upon the Company.

23. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI, your Directors have framed and approved Insider Trading Policy for the Company i.e. 'Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' and 'Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons/Insiders'. The Policy is available on the company's website.

24. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

25. DISCLOSURES:

The Company has not entered into any transaction of material nature with the Promoters, the Directors or the Management that may have any potential conflict with the interest of the Company.

26. FINANCE:

26.1 The Company has availed financial assistance in form of Term Loans and Working Capital from State Bank of India.

26.2 The Company's Income tax Assessment has been completed upto the Assessment Year 2020-21.

27. ACKNOWLEDGEMENT:

Your Directors express their sincere gratitude for the assistance and co operation extended by Banks, Government Authorities, Shareholders, Suppliers and Customers.

Your Directors also wish to place on record their appreciation of the contribution made by the employees at their levels towards achievements of the Company's goals.