Par Drugs & Chemicals Ltd

Dear Members,

Your Directors have immense pleasure in presenting the Twenty Fifth (25^th) Annual Report on the business and operations of the Company together with the Audited Financial Statements of your Company for the financial Year ended March 31^st, 2024.

The Director Report is prepared based on the standalone financial statements of the company and the Report on the performance and financial position of the Company.

1. FINANCIAL RESULTS:

(Amount in Lakhs except EPS)

2. Performance Review

1. The Company is engaged in the Manufacturing business of Active Pharma Ingredients ("APIs"), and Fine Chemicals. Our product portfolio presently comprises 15 APIs and 10 Fine Chemical which are marketed domestically and exported.

2. The highlights of the Company's performance are as under:-

? Revenue from operations is decreased to ? 9,564.04/- Lakhs during the current year compared to previous year of ? 9,574.88/- Lakhs i.e. the decrease in the current year is approx 10.84 Lakh

? Although revenue slightly reduce, the Net Profit after tax for the current year increased to ? 1,450.10/- Lakhs compared to the previous year of ? 1,133.41/- Lakhs i.e. variation in the current year is approx 27.94%

? The earning per share has been increased from ? 9.21 to 11.78 as compared to previous year i.e. various in the current year is approx. 27.90%.

? For Fiscal 2024, our domestic and international operations accounted for approx. 75.65% and 24.35 %, respectively, of our total sales.

? There are four Manufacturing Blocks at Bhavnagar which are for different products having a capacity of approx 9,700 MTPA. Block 1 - APIs, Block 2 - Magnesium Hydroxide, Block 3 - Fine Chemicals and Block 4 - APIs/ Fine Chemicals.

The Company is making all out efforts for presenting better & better results. The Company is also redefining its marketing strategies so as to capture increased market share. Looking to the volatile market conditions, the Company management needs to be much alert all the times to have better business prospects and profitability.

Our Company listed on NSE Main Board Platform having Symbol -"PAR", ISIN: INE04LG01015. The following table shows High, Low during the respective month and number of equity shares traded during each month in the FY 2023-24 on NSE*;

*Source: Historical data available on www.nseindia.com

**EQ - This series allows trading in Intra-day transactions for equity permissible, normal trading is done in this category. BE - This series does not allow trading in Intra-day transactions Shares falling in the Trade for Trade

Company is engaged in manufacturing business of Active Pharma Ingredients ("APIs") and Fine Chemicals and there is no change in the nature of business of the company occurred during the year.

Your directors don't recommend any Interim and final dividend for the year under review.

Pursuant to provisions of Section 134(1)(j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review.

Further, there are no changes in Capital Reserve. During the year an amount of ? 1,450.10/- Lakhs transferred to the Surplus in the Statement of Profit & Loss whereas an amount of ? -10.73 /- Lakhs utilized for income tax adjustment of earlier year.

There are no any material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate.

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

The management finds that the Verification of Financial Accounting & Documents, GST Compliances, Stores, Factory Gate, Statutory Payments, Statutory Returns, Pending Claims are satisfactory and nature and in Physical Verification of Inventories & Capital Assets need some improvement.

The records of the inventories has been started maintaining in the newly implemented 'Infinity Software'. As stated in the earlier report, the company is engaged in bulk drug production and the consumption of the raw materials are not 100% standardize in nature. So, we recommended replacing the manual system by implementing the computerized system so that the movement of the

inventories access at each level and its reports on day to day basis.

The company has started the process to move to the system called as 'infinity' but the comprised system is still under the going stage. Considering that, it is recommended herewith to complete the computerized system. Accordingly, physical Verification of Inventories and movement of each items needs to be improved to the stage of in-built system.

On recommendation, the company has started the process to move to the system called as 'infinity' but the comprised system is still under the going stage. Considering that, it is recommended herewith to complete the computerized system. Accordingly, physical Verification of Inventories and movement of each items needs to be improved to the stage of in-built system.

The physical verification of the work in progress of the office building as on the end of the year and the plant & machinery installed during the year are not possible to do as the work in the unit is still going on. There are numbers of items replaced and added during the last two years. Therefore, it is recommended to do the physical verification of all the assets on completing all installations at the Bhavnagar Unit.

The management also finds that the long term pending outstanding & receivables of exports and local dues needs to be followed up urgently and it is recommended to settle the same.

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

All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Management of the Company and internal auditor checks and verifies the internal control and monitors them in accordance with.

As there are no any significant and material orders were passed by any regulators and/or courts and tribunals during the year under review which may have the impact on the going concern status and company's operations in future.

The Company does not have any Subsidiary, Joint Venture or Associate Company.

The Company has neither accepted nor renewed any deposits falling within the purview of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time, during the year under review.

It is recommended to appoint M/s. Sarupria Somani & Associates, Chartered Accountants (Firm Registration No.: 010674C), having valid Peer Review certificate, as the Statutory Auditors of the company from the conclusion of the 25^th Annual General Meeting till the conclusion of the 26^th Annual General Meeting of the Company to be held for the F.Y. 2024-25 at an annual remuneration / fees of ? 2,25,000/- (Rupees Two Lakh Twenty Five Thousand only) plus out of pocket expenses and taxes as applicable from time to time with the power to the Board/Audit Committee to alter and vary the terms and conditions of appointment, revision including upward revision in the remuneration during the remaining tenure. As required under the provisions of Section 139 of the Companies Act, 2013, company has obtained confirmation from M/s. Sarupria Somani & Associates, Chartered Accountants (Firm Registration No.: 010674C), that their appointment, if made, would be in conformity with the limits specified in the said Section.

Audit report to the Shareholders does not contain any qualification, reservation or adverse remarks. The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self-explanatory and does not call for any further comment.

Pursuant to provisions of Section 204 of the Companies Act, 2013, Board of Directors had appointed M/s. DG Patel & Associates, Practicing Company Secretaries (C.P. No.: 13774) as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2023-24.

1. There was a delay of 2 days in submission of

1. Company had not complied with the Regulation 33 of SEBI LODR Regulations, 2015 w.r.t. submission of Unaudited Standalone Financial Results due to personal reason and preoccupation of work of Statutory Auditor, Statutory Auditor was not able to review Unaudited Standalone Financial Results of the Company for quarter and nine months ended on 31^st December, 2023 within due date and hence company rescheduled its Board Meeting on 16^th February, 2024 and therefore delay of 2 days occurred in submission of results.

For the same, company had paid ? 10,000/- plus GST fine amount to NSE on 16^th March, 2024.

The Secretarial Audit Report for the financial year ended 31^st March, 2024 is annexed herewith as Annexure - I to this report.

As per Section 138 of Companies Act 2013, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors.

During the year under review, M/s Siddhpura & Co., Chartered Accountants was appointed as Internal Auditors to conduct internal audit as per agreed scope of works pursuant to the provision of section 138 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud.

Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 is required by the Company and accordingly such accounts and records are made and maintained. Requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 is not applicable to the Company.

The Board of Directors of Company is a balanced one with an optimum mix of Executive and Non Executive Directors. The Board of the Company is headed by an Executive Chairman.

As on 31^st March, 2024, the Board of Company consists of following Directors:

(i) Chairmanship/Membership of Committee only includes Audit Committee and Stakeholders' Relationships Committee in Indian Public Limited companies other than Par Drugs And Chemicals Limited. Members of the Board of the Company do not have membership of more than ten Board-level Committees or Chairperson of more than five such Committees.

(ii) None of the directors are related to each other except Mr. Falgun Vallabhbhai Savani, Mr. Jignesh Vallabhbhai Savani, Mrs. Nayna Jignesh Savani, Mr. Ghanshayambhai Bhagvanbhai Savani, are related to each other.

(iii) Details of Director(s) retiring or being reappointed are given in notice to Annual General Meeting.

(iv) Brief profiles of each of the above Directors are given in the beginning of the report.

As on 31^st March, 2024, Mr. Falgun Vallabhbhai

Savani, Chairman & Managing Director; Mr.

Ghanshayambhai Bhagvanbhai Savani, Whole-time

Director; Mr. Jignesh Vallabhbhai Savani, Chief

Executive Officer; Mr. Chintan Pratapbhai Chauhan, Chief Financial Officer and Mr. Sanket Bhupendrabhai Trivedi, Company Secretary and Compliance Officer of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013. There is no change in Key Managerial Personnel during the year under review.

In terms of section 152 of the Companies Act, 2013, Mr. Ghanshayambhai Bhagvanbhai Savani, Whole-time Director (DIN: 03055941), who retires by rotation and being eligible offers himself for reappointment. Based on the performance evaluation and recommendation of the nomination and remuneration committee, the Board recommends his reappointment.

Mr. Jignesh Vallabhbhai Savani, Director & CEO (DIN: 00198203) who retired by rotation reappointed in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Mr. Falgun V. Savani Chairman & Managing Director (DIN:00198236) who retired by rotation re-appointed in the 23^rd Annual General Meeting of the company held on 10^th September, 2022.

Term of Mr. Falgun Vallabhbhai Savani (DIN: 00198236) as Chairman & Managing Director ended on 25^th Day of November, 2023. He was re-appointed as Chairman & Managing Director for further period of 5 years from 26^th Day of November, 2023 to 25^th Day of November, 2028 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Term of Mr. Ghanshayambhai Bhagvanbhai Savani (DIN: 03055941) as Whole-time Director ended on 25^th Day of November, 2023. He was re-appointed as Whole-time Director for further period of 5 years from 26^th Day of November, 2023 to 25^th Day of November, 2028 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Term of Mr. Jignesh Vallabhbhai Savani (DIN: 00198203) as CEO ended on 25^th Day of November, 2023. He was re-appointed as CEO for further period of 5 years from 26^th Day of November, 2023 to 25^th Day of November, 2028 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Term of Mr. Pravin Manjibhai Bhayani (DIN: 08332851) as an Independent Director of the Company ended on 16^th Day of January, 2024. He was re-appointed as an Independent Director for

a second term of Five consecutive years w.e.f. 17^th January, 2024 to 16^th January, 2029 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Term of Mrs. Krishna Mitulbhai Shah (DIN: 08317678) as an Independent Director of the Company ended on 16^th Day of January, 2024. She was re-appointed as an Independent Director for a second term of Five consecutive years w.e.f. 17^th January, 2024 to 16^th January, 2029 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Term of Mrs. Kajal Chintanbhai Vaghani (DIN: 08317641) as an Independent Director of the Company ended on 16^th Day of January, 2024. She was re-appointed as an Independent Director for a second term of Five consecutive years w.e.f. 17^th January, 2024 to 16^th January, 2029 in the 24^th Annual General Meeting of the company held on 16^th September, 2023.

Details of the Board Meetings held during the Financial Year ended 31^st March, 2024 are as under. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

The names of members of the Board and their attendance at the Board Meetings are as under:

The Audit Committee comprises of four members with three Independent Directors and one Executive Director as on 31^st March, 2024.

The Chairman of the Committee has attended the last Annual General Meeting of the Company held on September 16, 2023.

The Nomination and Remuneration Committee comprises of three members with two Independent Directors and one Non-executive Director as on 31^st March, 2024.

The Committee met two times during the year on August 16, 2023 and February 16, 2024. The Composition of the Committee as on March 31, 2024 and its attendance for meetings held during the year is set out below:

The Composition of the Committee as on March 31, 2024 and its attendance for meetings held during the year is set out below:

The Chairman of the Committee has attended the last Annual General Meeting of the Company held on September 16, 2023.

Company has constituted a Stakeholders Relationship Committee to redress complaints of the shareholders. The Stakeholder's Relationship Committee comprises of three members with two Independent Directors and one Executive Director as on 31^st March, 2024.

The Committee met on August 16, 2023. The Composition of the Committee as on March 31, 2024 and its attendance for meetings held during the year is set out below:

The Chairman of the Committee has attended the last Annual General Meeting of the Company held on September 16, 2023.

The board of directors have formulated the CSR Committee on January 23, 2020 in order to take corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare.

The CSR Committee comprises of three members with two Independent Directors and one Non-executive Director as on March 31, 2024.

The Committee met two times during the year i.e. on August 16, 2023 and February 16, 2024. The Composition of the Committee as on March 31, 2024 and its attendance for meetings held during the year is set out below:

The Chairman of the Committee has attended the last Annual General Meeting of the Company held on September 16, 2023.

One Meeting of Independent Directors held on 29/03/2024 during the year under review and attendance for meetings held during the year is set out below:

17 Details of Remuneration paid to Directors/KMPs:

*Sitting Fees

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is available on the website of the company at http://pardrugs.com/pdf/ policies/Nomination%20and%20Remuneration%20 Policy%20-%20PAR.pdf

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company which is posted on the website of the Company at http://pardrugs.com/pdf/policies/ Code%20of%20Director%20&%20Senior%20 Management%20Personnel%20-%20PAR.pdf .

As per SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has devised the Code of Conduct to regulate, monitor and report trading in Company's securities by persons having access to unpublished price sensitive information of the Company. The Company Secretary is the Compliance Officer for the purpose of this code.

The Independent Directors are very enthusiastic to get involved in the activity of the Company and

on continuous basis they are in constant touch with the executive directors of the Company and also they have taken part in the activity like to visit Company's plants, where plant heads appraise them of the operational and sustainability aspects of the plants to enable them to have full understanding on the activities of the Company and initiatives taken on safety, quality, CSR, Sustainability etc. Further detailed programme is available on the website of the company at http://pardrugs.com/familiraisation- programme.php

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its all committees.

The Company has received declarations from all the Independent Directors confirming that they meet criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. Pursuant to Ministry of Corporate Affairs Notification, dated October 22, 2019 all the Independent Directors of the Company have already registered themselves on IICA and also they have successfully qualified online proficiency for Independent Director's Data bank from Indian Institute of Corporate Affairs as on date this report.

During the reporting period, your Company has not granted any loans, guarantees or made investments or provided securities in violation of Section 186 of the Companies Act, 2013 and rules thereof. Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements forming part of this annual report.

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as of March 31, 2023, on its website at www.pardrugs.com/annual-reports. php The Company will also place annual return in Form No MGT-7 for FY 2023-24 on completion of ensuing annual general meeting of shareholders of the Company.

The authorized share capital of the Company is ? 12,50,00,000/- divided into 1,25,00,000 Equity Shares

At present, paid-up equity share capital is ? 12,30,46,360/- consisting of 12304636 equity shares of ? 10/- each.

The Company has not bought back any of its securities during the year under review.

The Company has not issued any Sweat Equity Shares during the year under review.

The Company has not issued any Bonus Shares during the year under review.

The Company has not provided any Stock Option Scheme to the employees during the year under review.

100% of the company's paid up Equity Share Capital is in dematerialized form as on 31^st March, 2024.

Particulars of contracts or arrangements with related parties under Section 188 of the Companies Act, 2013 during the year under review are given in Form AOC-2 attached with this report as Annexure - II. Further, the disclosure of transactions with related party for the year, as per Accounting Standard-18 Related Party Disclosures is given in Note no. 30 to the Balance Sheet as on 31^st March, 2024.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Companies Act 2013, the rules made thereunder and the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. This policy was considered and approved by the Board and has been uploaded on the website of the Company at https://www.pardrugs.com/pdf/ policies/Policv%20on%20Related%20Party%20 Tranactions%20-%20PAR.pdf .

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have been furnished considering the nature of activities undertaken by the company during the year under review is annexed hereto as Annexure-III and forms part of this report.

Foreign Earnings: ? 23,28,94,069/- Foreign Outgo: ? 4,66,29,796/-

During the year under review, none of the employees of the Company were in receipt of remuneration exceeding ? 1,02,00,000/- p.a., if employed throughout the year or ? 8,50,000/- p.m. if employed for part of the year. Further, statement containing particulars of employees under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as under:

1. Ratio of the remuneration of each director to the median remuneration of the employees and percentage increase in remuneration of each Director, CEO, CFO and CS of the Company for the financial year 2023-24:

Note: *Remuneration of the Directors consists only of sitting fees drawn by them.

** Remuneration of the Independent Director compare with previous year sitting fees because the remuneration is approved in the previous AGM by members

***The percentage increase in remuneration is calculated basis the remuneration as per Section 17 of the Income Tax Act, 1961.

2. Median remuneration of employee during the year of the company is ? 1.88 Lakh

3. Percentage increase in the median remuneration of employees in the financial year (Median 2023- 24/Median 2022-23): 13.99 %

4. The number of permanent employees on the rolls of company: 122

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:-

a. Average percentage increase in salary of employees other than managerial personnel is 14.52%

b. Average percentage increase in salary of managerial personnel is 0.64%

6. The Company hereby affirm that the remuneration is as per remuneration policy of the Company

Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company

At Par Drugs and Chemicals Limited, risks are measured, estimated and controlled with the objective to mitigate adverse impact. Your company's fundamental approach to risk management includes to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The Company has adopted an approach

towards risk assessment, risk management and risk monitoring, which is periodically reviewed by the Board.

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the said Report, which is a part of this report. CSR Policy is available on the Company's website at http://pardrugs.com/pdf/policies/Final_ CSR_POLICY.pdf

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at https://www.pardrugs.com/pdf/policies/Vigil%20 Mechanism%20Policy%20-%20PAR.pdf

During the period under review, the personal and industrial relations with the employees remained cordial in all respects. The management has always carried out systematic appraisal of performance and imparted training at periodic intervals.

Your company is committed to good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance SEBI (LODR) Regulations, 2015 are complied with. The Corporate Governance Report with the Auditors' Certificate thereon, and Management Discussion and Analysis Report are attached, and Corporate Governance Report is attached as an Annexure-V. Further Company regularly filed Corporate Governance Report as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which are available on the website of the Company at http://pardrugs.com/corporate- governance-report.php

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report.

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a

policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. Internal Complaint Committee is set up to redress complaints received regularly. There were no complaints received and reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Pursuant to Section 134 (5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) 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 the end of the financial year and of the profit and loss of the Company for that period;

c) The Directors had 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 had prepared the annual accounts on a 'going concern' basis;

e) 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 and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

The company has complied with the applicable Secretarial Standards issued time to time by the Institute of Company Secretaries of India.

Not applicable as no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

Not applicable.

Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers.

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Par Drugs And Chemicals Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company, the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, the explanations and clarifications given to us and the representations made by the Management, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2024 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained by the Company for the financial year ended on March 31, 2024 according to the provisions of:

(i) The Companies Act, 2013 ('the Act') and the Rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and amendments from time to time;

d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2021 - Not applicable to the company during Audit period;

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable to the company during Audit period;

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 and amendments from time to time regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable to the company during Audit period;

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 - Not applicable to the company during Audit period;

(vi) Other laws applicable to the Company as per the representations made by the Company, its officers and authorized representatives during the conduct of audit namely:

a. Environment (Protection) Act, 1986 and Rules made thereunder;

b. Hazardous Waste (Management and Handling) Rules, 1989;

c. Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016;

d. Air (Prevention and Control of Pollution) Act, 1981;

e. Water (Prevention and Control of Pollution) Act, 1974;

f. The Drugs and Cosmetics Act, 1940 as amended from time to time;

g. The Drugs and Cosmetic Rules, 1945 as amended from time to time;

h. Labour, Employee, Industrial and other Laws to the extent applicable to the Company.

The examination and reporting on abovementioned laws and rules are limited to whether there are adequate systems and process in place to monitor and ensure compliance with those laws.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings;

(ii) SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the Listing Agreements entered into by the Company with Stock exchange except that there was a delay of 2 days in submission of Financial Results for the Quarter and nine months ended on 31^st December, 2023 to the National Stock Exchange as required under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Financial results for said Quarter and Nine months were submitted to stock exchange (NSE) on 16^th February, 2024 i.e. by delay of 2 (Two) days. However, company had paid fine for the same imposed by the National Stock Exchange.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that during the audit period, The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance other than those held at shorter notice, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

We further report that the systems and processes in the company are commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

[Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014]

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

The Company is engaged in the Manufacturing business of Active Pharma Ingredients ("APIs"), Antacid Molecules and other chemical and pharmaceuticals products. Our product portfolio presently comprises 15 APIs and 10 Fine Chemical which are marketed domestically and exported. The use of energy is substantial in the manufacturing process of the company. The company has taken various measures to minimize consumption of energy, to optimize productivity and also to conserve energy and making best use of the resources. A considerable amount of time and effort was earmarked for conserving power across all the plants. Details of the energy consumption for the F.Y. 2023-24 are as under:

During the financial year 2023-24, solar panel generated the electrical energy 115122 Kwah which equals to reduction of CO2 emission of 921 KG approx.

(iii) the capital investment on energy conservation equipments - Nil

(i) The efforts made towards technology absorption -

The efforts made towards technology absorption and the benefits the benefits derived there from are as under:

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution - None except as mentioned above.

(iii) imported technology (imported during the last three years reckoned from the beginning of the financial year)- NIL

(iv) the expenditure incurred on research & development: Rs. 10,81,019/-

1. To promote education -

a. By way of promoting digital literacy in the rural villages around Bhavnagar, Gujarat or within the state of Gujarat especially in the primary schools, government Institutes etc. by Contributing towards innovative learning, technical assistance with latest equipments like computers, projectors, Interactive flat panel, building or development of digital class etc. and help students to learn in facilitative environment;

b. Offering scholarships to the students of collages/universities for supplying study materials, instruments for practical experiments, arranging Industry visit at our Company etc. as we endeavor to support education initiatives and give wings to students' dreams especially to the students of Masters.

c. Offering scholarship to the PHD students for helping them viz their research and producing a thesis of their specialization.

d. Any other educational activities for the promotion & development of education sector as deemed fit which will fall within the CSR activities as per Companies Act, 2013.

2. To promote health care including preventive health care and sanitation in the local areas nearer to the factory site of the company and such other areas as may be determined by the CSR committee.

3. To promote health care by way of contributions to PM CARES Fund, State Disaster Management Authority to combat COVID-19 or any other fund set up by the government and spending CSR funds for COVID-19 related activities etc.

4. To undertake any of the CSR activities as prescribed under Schedule VII of the Companies Act, 2013.

Implementation: To implement the Company's CSR Programmes through Company personnel or through external implementing agencies or through Trusts, Society and Section 8 companies that may be established by the Company from time to time. In such cases, the Company will specify the CSR Programmes which may be undertaken by those Trusts in accordance with

Company vision is to empower communities by connecting people by recognizing economic organs of society and draw on societal resources, it is Company's belief that its performance must be measured by its Triple Bottom Line contribution to building economic, social and environmental capital towards enhancing societal sustainability. Company believes that in the strategic context of business, enterprises possess beyond mere financial resources, the transformational capacity to create game-changing development models by unleashing their power of entrepreneurial vitality, innovation and creativity. In line with this belief, company will continue crafting unique models to generate livelihoods and environmental capital. Such Corporate Social Responsibility ("CSR") projects are far more replicable, scalable and sustainable, with a significant multiplier impact on sustainable livelihood creation and environmental replenishment. These initiatives are independent of the normal conduct of Company's business. Programmes, projects and activities (collectively "CSR Programmes") carried out in this regard are the subject matter of this Policy.

The key purpose of this Policy is to:

• Define governance structure for CSR

management within the Company.

• Serve as a guiding document aiding in identification, execution and monitoring the CSR projects.

• Describe the treatment of surpluses from CSR activities

• Outline the development areas in which the Company shall get involved in

Scope of the Policy : This Policy applies to all CSR projects that will be undertaken by the Company and shall fulfill all the requirements of Section 135 of the Companies Act, 2013. The Company shall ensure all these activities are over and above the normal course of business and are in line with Schedule VII of the Companies Act, 2013. This Policy will be periodically reviewed and updated in line with the relevant codes of legislation and best practices that can be adopted by the Company.

Policy: It is Company's policy to direct Company's CSR Programmes, inter alia, towards achieving one or more of the following:

may direct. The CSR Committee shall review the implementation of the CSR Programmes once in every six months and issue necessary directions from time to time to ensure orderly and efficient execution of the CSR Programmes in accordance with this Policy. At the end of every financial year, the CSR Committee will submit its report to the Board.

CSR Expenditure: CSR expenditure will include all expenditure, direct and indirect, incurred by the Company on CSR Programmes undertaken in accordance with the approved CSR Plan. Moreover, any surplus arising from any CSR Programmes shall be used for CSR. Accordingly, any income arising from CSR Programmes will be netted off from the CSR expenditure and such net amount will be reported as CSR expenditure.

The above CSR Policy is available at our website link at click here

their Objects and administrative and accounting processes laid down in the respective Trust Deeds/ Memorandum and Articles of Association.

Governance: Every year, the CSR Committee will place for the Board's approval, a CSR Plan delineating the CSR Programmes to be carried out during the financial year and the specified budgets thereof. The Board will consider and approve the CSR Plan with any modification that may be deemed necessary. The CSR Committee will assign the task of implementation of the CSR Plan within specified budgets and timeframes to such persons or bodies as it may deem fit. The persons/bodies to which the implementation is assigned will carry out such CSR Programmes as determined by the CSR Committee within the specified budgets and timeframes and report back to the CSR Committee on the progress thereon at such frequency as the CSR Committee

Composition of the CSR committee shared above and is available on the Company's website on click here CSR policy - Click Here CSR projects - Click Here

As per Rule (3) (a) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, Every company having average CSR obligation of ten crore rupees or more in pursuance of subsection (5) of section 135 of the Act, in the three immediately preceding financial years, shall undertake impact assessment, through an independent agency, of their CSR projects having outlays of one crore rupees or more, and which have been completed not less than one year before undertaking the impact study. Hence, Company is out of purview of this rule due to the less CSR obligation i.e. less than ten crore rupees for the F.Y. 2023-24

6. Average net profit of the Company as per Section 135(5): f 13,50,75,022/-

7. (a) Two percent of average net profit of the Company as per section 135(5) : f 27,01,500/-

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years : NIL

(c) Amount required to be set off for the financial year, if any : NIL

(d) Total CSR obligation for the financial year (7a+7b-7c) : f 27,01,500 /-

8. (a) CSR amount spent or unspent for the financial year:

(b) Details of CSR amount spent against ongoing projects for the financial year: Not Applicable

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

* Rotary Amrutalaya - Mother Milk Bank Project, establishing a human milk bank has a positive impact on the health of vulnerable infants, providing them with essential nutrients, antibodies, and other bioactive factors crucial for their development and well-being. The fund has been utilized to purchase T30 Pasteuriser and accessories, Refrigerator, PC, software and other accessories for the project.

(d) Amount spent in Administrative Overheads: NIL

(e) Amount spent on Impact Assessment, if applicable: Not Applicable

(f) Total amount spent for the Financial Year (8b+8c+8d+8e) : f 27,34,320/-

(g) Excess amount for set off, if any.: Nil (f 18,642 was excess amount spent for the previous financial year but, not taken for set off for the Current financial Year)

9. (a) Details of Unspent CSR amount for the preceding three financial years: Not Applicable

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): Not Applicable

(a) Date of creation or acquisition of the capital asset(s) : None

(b) Amount of CSR spent for creation or acquisition of capital asset : Nil

(c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc. : Not Applicable

(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset) : Not Applicable