Sotac Pharmaceuticals Ltd Directors Report

Dear Shareholders,

The Board of Directors hereby submits the 8^th report of the business and operations of your Company ("the Company"), along with the Standalone & Consolidated Audited Financial Statements, for the Financial Year ended on March 31, 2023.

Financial Highlights:

The Companys financial performance (standalone & consolidated) for the year ended on March 31, 2023 is summarized below:

(Rs. in lakh)

Particulars	Standalone-Year Ended		Consolidated-Year Ended
	31/03/2023	31/03/2022	31/03/2023	31/03/2022
Revenue From Operations	5798.28	7315.17	7,748.32	-
Other Income	24.31	20.76	34.96	-
Total Income	5822.59	7335.93	7783.28	-
Less: Total Expenses before Depreciation, Finani Cost and Tax	4977.48	6699.53	7023.3	-
Profit before Depreciation, Finance Cost and Tax	845.11	636.4	760	-
Less: Depreciation	162.53	112.64	227.78	-
Less: Finance Cost	86.13	55.00	197.55	-
Profit Before Tax	596.45	468.76	392.67	-
Less: Current Tax	168.39	142.50	168.39	-
Less: Deferred tax Liability (Asset)	(21.49)	3.29	(4.33)	-
Profit after Tax	449.55	329.55	228.61	-

Consolidated Previous year figures of March 31, 2022, are not applicable as company formed its subsidiary companies after the closure of FY 21-22.

BUSINESS OVERVIEW:

Financial Performance on Standalone Basis:

The total income of the Company for the year ended March 31, 2023 was Rs. 5822.59 Lakh as against the total income of Rs. 7335.93 Lakh for the previous year ended March 31, 2022. The Total Income of the company was decreased by 20.62% over previous year.

The major decrease in total income of the Company was due to decrease in the rate of one of our Product namely Paracetamol. The Revenue from Operation decreased about 20.73% as compared to previous Financial Year 2021-22. However Production has been increased in comparison to last year.

The Company has earned a Net Profit after Tax of Rs. 449.55 Lakh for the year under review as compared to Net Profit of Rs. 329.55 Lakh in the previous year. The profit of the Company increased about 36.41% as compared to previous financial year. The major increase in profit is due to decrease in total expenses of the company and profit margin from the product remain same Hence Profit after tax increased as during the year ended March 31, 2023 as compared to previous year.

Financial Performance on Consolidate Basis:

The Consolidated Financial Statements presented by the Company include the financial results of following Subsidiary Companies:

i. Sotac Healthcare Private limited,

ii. Sotac Research Private limited,

iii. Sotac lifesciences Private limited,

The total income of the Company was Rs. 7783.28 Lakh, The Revenue from Operation of the Company was Rs. 7,748.32 Lakh and The Company has earned a Net Profit after Tax of Rs. 960.15 Lakh for the year ended March 31, 2023.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated financial statements of the Company for the financial year 2022-23 are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards ("AS") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI (LODR) Regulations, 2015") which form part of this Annual Report.

Dividend:

With a view to conserve and save the resources for future prospects of the Company, the Directors have not declared any dividend for the financial year 2022-23.

Pursuant to the provisions of Sections 124 and 125 of the Act, there is no amount of Dividend remaining unclaimed / unpaid for a period of 7 (seven) years and/or unclaimed Equity Shares which are required to be transferred to the Investor Education and Protection Fund (IEPF).

Transfer to General Reserve:

During the year, the Company has not apportioned any amount to other reserve. Total amount of net profit is carried to the Reserves & Surplus as shown in the Balance Sheet of the Company.

Company Background:

Our Company was originally formed and registered as a Partnership Firm under the Partnership Act, 1932 ("Partnership Act") in the name and style of "M/s Sotac Pharmaceuticals", pursuant to a deed of partnership dated October 28, 2015. Thereafter "M/s. Sotac Pharmaceuticals" was converted from Partnership Firm to a Private Limited Company under Part I (Chapter XXI) of the Companies Act, 2013 in the name of "Sotac Pharmaceuticals Private Limited" and received a certificate of incorporation dated December 18, 2015 from the Registrar of Companies, Gujarat. Later on our Company was converted into a Public Limited Company pursuant to shareholders resolution passed at Extra-ordinary General Meeting of our Company held on November 12, 2022 and the name of our Company was changed to "Sotac Pharmaceuticals Limited". A fresh Certificate of Incorporation consequent upon Conversion from Private Limited Company to Public Limited Company dated November 22, 2022 was issued by the Registrar of Companies, Ahmedabad. The Corporate Identification Number of our Company is L24230GJ2015PLC085451.

Initial Public Offer and Listing of Equity Shares:

The Board of Directors had, in its meeting held on Saturday, December 31, 2022, proposed the Initial Public Offer not exceeding 3400000 equity shares at such price as may be decided by the Board of Directors in consultation with the Merchant Banker. The Members of the Company had also approved the proposal of the Board of Directors in their Extraordinary General Meeting held on Thursday, January 05, 2023.

Pursuant to the authority granted by the Members of the Company, the Board of Directors appointed Beeline Capital Advisors Private Limited as Lead Manager and KFin Technologies Limited as Registrar to the Issue and Share Transfer Agent for the proposed Public Issue.

The Company applied to National Stock Exchange of India Limited ("NSE") for in-principle approval for listing its equity shares on the Emerge Platform of the NSE. National Stock Exchange of India Limited has, vide its letter dated, March 02, 2023, granted its In- Principle Approval to the Company.

The Company had filed Prospectus to the Registrar of the Company, Ahmedabad on April 08, 2023. The Public Issue was opened on Wednesday, March 29, 2023 and closed on Monday, April 03, 2023. The Basis of Allotment was finalized by Company, Registrar to the issue and merchant banker in consultation with the NSE on April 10, 2023. The Company has applied for listing of its total equity shares to NSE and it has granted its approval vide its letter dated April 12, 2023. The trading of equity shares of the Company commenced on April 13, 2023 at Emerge Platform of NSE.

The Equity Shares of the Company are listed on the Emerge Platform of NSE. The Company confirms that the annual listing fees to the stock exchange for FY 2023-24 have been paid.

Utilisation of IPO Proceeds:

The Company raised funds of Rs. 3,330.00 Lakhs through Initial Public Offering (IPO). The gross proceeds of IPO has been utilized in the manner as proposed in the Offer Document, the details of which are hereunder:

(Rs.in Lakhs)

Sr. No. Original Object	Original Allocation	Funds Utilized upto June 30, 2023
1. To meet Working Capital Requirements	1,080.00	1,080.00
2. Investment in Subsidiary	700.00	700.00
3. Upgradation / Construction of Existing /New Building i the Existing Premises	590.01	590.01
4. General Corporate Purpose	739.99	739.99
5. Public Issue Related Expenses	220.00	220.00
Total	3,330.00	3,330.00

Further, there is no deviation/variation in the utilization of the gross proceeds raised through IPO.

Change in Nature of Business:

During the year, the Company has not changed its business or object and continues to be in the same line of business as

per the main object of the Company.

Share Capital:

During the year under review, the Following changes were made in the Authorized and Paid-up share capital of the

Company.

Authorised Capital of the Company increased from Rs. 2,30,00,000/- (Rupees Two Crores Thirty Lakhs Only) divided into 23,00,000 (Twenty Three Lakhs Only) equity shares of Rs. 10/- (Rupees Ten Only) each to Rs. 11,50,00,000/- (Rupees Eleven Crores Fifty Lakhs Only) divided into 1,15,00,000 ( One Crore Fifteen Lakhs Only) equity shares of Rs. 10/- (Rupees Ten Only) each via Ordinary Resolution passed in Extra Ordinary General Meeting by the shareholders of the Company on Tuesday, November 01, 2022.

Pursuant to Bonus issue of Equity Shares by the Company, the Board of Directors, in their meeting held on December 30, 2022, has allotted 5750000 Equity Shares out of the securities premium account/or free reserve of the company in the ratio of 5: 2 i.e. 5 (Five) Bonus Equity Shares for every 2 (Two) Equity Share held on December 23, 2022.

After Closure of the financial year;

Pursuant to the Initial Public Offer of Equity Shares by the Company, the Board of Directors, in their meeting held on April 10, 2023, has allotted total 3000000 Equity Shares Rs. 10/- each at price of Rs. 111/- per Equity Share (Including a share premium of ^101/- Per Equity Share) to the successful allottees, whose list have been finalized by the Company, the Registrar to the issue and merchant banker in consultation with National Stock Exchange of India Limited.

The Share Capital of the Company after these changes stood as follows as on the date of Report:

Authorized Capital

The Authorized Capital of the Company is Rs. 11,50,00,000/- (Rupees Eleven Crores Fifty Lakhs Only) divided into 1,15,00,000 (One Crore Fifteen Lakhs Only) Equity Shares of Rs. 10/-(Rupees Ten Only) each.

Issued, Subscribed & Paid-Up Capital

The present Paid-up Capital of the Company is Rs. 11,05,00,000/- (Rupees Eleven Crore Five Lakh Only) divided into 1,10,50, 000 (One Crore Ten Lakh Fifty Thousand Only) Equity Shares of Rs. 10/-(Rupees Ten Only) each.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Constitution of Board:

As on the date of this report, the Board comprises of the following Directors;

		Date of	Total Director Ships in other co.2	No. of Committee1		No. of Shares held as on March 31, 2023
Name of Director	Category Cum Designation	Appointment at current Term & designation		in which Director is Members	in which Director is Chairman
Mr. Sharadkumar	Chairman &	December 12, 2022
Dashrathbhai Patel	Managing Director		3	1	-	1431500
Mr. Dineshkumar Babulal Gelot	Whole time Director	December 12, 2022	2	-	-	1431500
Mr. Vishalkumar Patel	Executive Director	December 18, 2015	2	-	-	1431500
Mr. Chetankumar Bachubhai Patel	Executive Director	December 18, 2015	2	-	-	1069250
Ms. Nidhiben	Non-Executive	December 12, 2022
Patel	Director Independent Director		-	2	-	-
Ms. Hetal	Non-Executive	December 12, 2022
Umangbhai Shah	Director Independent Director		-	3	3	-
Ms. Heena Viral	Non-Executive	December 12, 2022
Patel	Director Independent Director		-	3	-	-

1 Committee includes Audit Committee, and Shareholders Grievances & Relationship Committee across all Public Companies including our Company.

2 excluding Section 8 Company, Struck off Company, Amalgamated Company and LLPs

The composition of Board complies with the requirements of the Companies Act, 2013 ("Act"). Further, in pursuance of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company is exempted from the requirement of having composition of Board as per Regulation 17 of Listing Regulations. None of the Director of the Company is serving as a Whole-Time Director in any other Listed Company and the number of their directorship is within the limits laid down under section 165 of the Companies Act, 2013.

Board Meeting:

The Board of the Company regularly meets to discuss various Business opportunities. Additional Board meetings are convened, as and when required to discuss and decide on various business policies, strategies and other businesses.

During the year under review, Board of Directors of the Company met 16 (Sixteen) times as on June 28, 2022; September 02, 2022; October 10, 2022; November 08, 2022; November 23, 2022; November 29, 2022; December 12, 2022; December 20, 2022; December 30, 2022; December 31, 2022; January 05, 2023; January 16, 2023; February 01, 2023; February 07, 2023; February 10, 2023 and March 20, 2023.

The details of attendance of each Director at the Board Meetings are given below:

	Date of Original Appointment	Date of Cessation	Number of Board Meetings Eligible to attend	Number of Board Meetings attended
Mr. Sharadkumar Dashrathbhai Patel	December 18, 2015	-	16	16
Mr. Vishalkumar Patel	December 18, 2015	-	16	16
Mr. Dineshkumar Babulal Gelot	December 18, 2015	-	16	16
Mr. Chetankumar Bachubhai Patel	December 18, 2015	-	16	16
Ms. Nidhiben Patel	December 12, 2022	-	9	9
Ms. Hetal Umangbhai Shah	December 12, 2022	-	9	9
Ms. Heena Viral Patel	December 12, 2022	-	9	9

The gap between two consecutive meetings was not more than one hundred and twenty days as provided in section 173 of the Act.

General Meetings:

During the year under review, the following General Meetings were held, the details of which are given as under:

Sr. No. Type of General Meeting	Date of General Meeting
1 Annual General Meeting	September 30, 2022
2 Extra Ordinary General Meeting	November 01, 2022
3 Extra Ordinary General Meeting	November 12, 2022
4 Extra Ordinary General Meeting	December 19, 2022
5 Extra Ordinary General Meeting	December 26, 2022
6 Extra Ordinary General Meeting	January 05, 2023
7 Extra Ordinary General Meeting	February 03, 2023

Disclosure by Directors:

The Directors on the Board have submitted notice of interest under Section 184(1) of the Companies Act, 2013 i.e. in Form MBP-1, intimation under Section 164(2) of the Companies Act, 2013 i.e. in Form DIR 8 and declaration as to compliance with the Code of Conduct of the Company.

Independent Directors:

In terms of Section 149 of the Companies Act, 2013 and rules made there under, the Company has three Non-Promoter Non-Executive Independent Directors in line with the act. The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 that they meet the criteria of independence laid down in Section 149 (6) of the Act. Further, all the Independent Directors of the Company have registered themselves in the Independent Director Data Bank.

A separate meeting of Independent Directors was held on March 20, 2023 to review the performance of Non-Independent Directors and Board as whole and performance of Chairperson of the Company including assessment of quality, quantity and timeliness of flow of information between Company management and Board.

Information on Directorate:

During the year under review, there was following change in constitution of the Board of Directors of the Company.

Change in Board Composition

Changes in Board Composition during the financial year 2022-23 and up to the date of this report is furnished below:

a) Appointment of Directors during the financial year 2022-23:-

i. In the Board Meeting held November 29, 2022:

• Mr. Bhavesh Pravinbhai Patel (DIN: 09807221) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. November 29, 2022 to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuing General Meeting, for appointment as an Independent Director to hold office for a term upto 5 consecutive years from the date of ensuing General Meeting.

• Mr. Sureshbhai Sitarambhai Sadhu (DIN: 09807222) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. November 29, 2022 to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuing General Meeting, for appointment as an Independent Director to hold office for a term upto 5 consecutive years from the date of ensuing General Meeting.

• Ms. Ahir Rasila Vinubhai (DIN: 09807716) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. November 29, 2022 to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuing General Meeting, for appointment as an Independent Director to hold office for a term upto 5 consecutive years from the date of ensuing General Meeting.

ii. In the Board Meeting held on December 12, 2022:-

• Ms. Ami Nikkikumar Patel (DIN: 09820896) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. December 12, 2022 to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuing General Meeting, for appointment as an Independent Director to hold office for a term upto 5 consecutive years from the date of ensuing General Meeting.

• Ms. Heena Viral Patel (DIN: 09829226) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. December 12, 2022, to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuring General Meeting, for appointment as an Independent Director. Further Members of the Company vide their EGM held on December 19, 2022 have approved approval of Ms. Heena Viral Patel as an Independent Director for a period of five (5) years up to December 18, 2027, liable to retire by rotation.

• Ms. Nidhiben Patel (DIN: 09820927) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. December 12, 2022, to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuring General Meeting, for appointment as an Independent Director. Further in the EGM held on December 19, 2022, Members have approved your appointment for a period of 5 years up to December 11, 2027 not liable to retire by rotation.

• Ms. Hetal Umangbhai Shah (DIN: 09829110) was appointed as an Additional Director (Independent) on the Board of the company w.e.f. December 12, 2022 to hold office till the conclusion of the ensuring General Meeting and subject to the approval of the members in the ensuring General Meeting, for appointment as an Independent Director. Further in the EGM held on December 19, 2022, Members have approved your

appointment for a period of five years up to December 18, 2027 not liable to retire by rotation.

b) Change in designation of directors during the financial year 2022-23:-

i. In the Board Meeting held on December 12, 2022:-

• Board of directors approved Changed in Designation of Mr. Sharadkumar Dashrathbhai Patel (DIN: 07252252) From Executive Director to Chairman and Managing Director of the company and approval of the payment of remuneration. Also Approval of members was taken in the Extraordinary General Meeting of the Members held on December 19, 2022 for Change in designation of Mr. Sharadkumar Dashrathbhai Patel from Executive Director to Chairman and managing director of the company for a period of five (5) years up to December 11, 2027, liable to retire by rotation.

• Board of directors approved Changed in Designation of Mr. Dineshkumar Babulal Gelot (DIN: 07252132) From Executive Director to Whole Time Director of the company and approval of the payment of remuneration. Also Approval of members was taken in the Extraordinary General Meeting of the Members held on December 19, 2022 for Change in designation of Mr. Dineshkumar Babulal Gelot from Executive Director to Whole Time Director of the company for a period of five (5) years up to December 11, 2027, liable to retire by rotation.

c) Resignation of directors during the financial year 2022-23:-

i. Mr. Bhavesh Pravinbhai Patel (DIN: 09807221) has tender his resignation from the post of Additional Director (Independent) of the Company with effect from December 08, 2022. The resignation is purely on account of personal reason and other professional commitments and there are no other material reasons other than the one mentioned herewith.

ii. Mr. Sureshbhai Sitarambhai Sadhu (DIN: 09807222) has tender his resignation from the post of Additional Director (Independent) of the Company with effect from December 08, 2022. The resignation is purely on account of personal reason and other professional commitments and there are no other material reasons other than the one mentioned herewith.

iii. Ms. Ahir Rasila Vinubhai (DIN: 09807716) has tender his resignation from the post of Additional Director (Independent) of the Company with effect from December 08, 2022. The resignation is purely on account of personal reason and other professional commitments and there are no other material reasons other than the one mentioned herewith.

iv. Ms. Ami Nikkikumar Patel (DIN: 09820896) has tender his resignation from the post of Additional Director (Independent) of the Company with effect from December 15, 2022.The resignation is purely on account of personal reason and other professional commitments and there are no other material reasons other than the one mentioned herewith.

d) Retirement by rotation and subsequent re-appointment:

i. Mr. Chetankumar Bachubhai Patel (DIN: 07252116), Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting, pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and being eligible have offered himself for re-appointment.

Appropriate business for his re-appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the Notice convening the ensuing AGM of the Company.

e) Regularization of directors:

i. In the Extraordinary General Meeting of the Members held on December 19, 2022, Ms. Nidhiben Patel (DIN: 09820927) Additional Independent Director of the company has been regularized and appointed as an Independent Director of the company for a period of five years up to December 11, 2027 not liable to retire by rotation.

ii. In the Extraordinary General Meeting of the Members held on December 19, 2022, Ms. Hetal Umangbhai Shah (DIN: 09829110) Additional Independent Director of the company has been regularized and appointed as an Independent Director of the company for a period of five years up to December 18, 2027 not liable to retire by rotation.

iii. In the Extraordinary General Meeting of the Members held on December 19, 2022, Ms. Heena Viral Patel (DIN: 09829226) Additional Independent Director of the company has been regularized and appointed as an Independent Director of the company for a period of five years up to December 18, 2027 not liable to retire by rotation.

Key Managerial Personnel:

During financial year 2022- 23, In accordance with Section 203 of the Companies Act, 2013, the Company has appointed:-

1. Mr. Sharadkumar Dashrathbhai Patel as a Chairman and Managing Director of the Company w.e.f, December 12, 2022.

2. Mr. Dineshkumar Babulal Gelot as a Whole time Director of the Company w.e.f December 12, 2022.

3. Mr. Brijeshkumar Ranchhodbhai Patel as a Chief Financial officer of the Company w.e.f December 30, 2022.

4. Ms. Pooja Bagrecha as a Company Secretary of the Company w.e.f January 16, 2023. However, after closure of financial year 2022-23, she resigned from her post w.e.f August 5, 2023 and Ms. Niyati Parikh appointed w.e.f August 11, 2023 as Company Secretary and Compliance officer of the company.

Change in Registered office:

During the year, there was no change in Registered Office of the Company.

Performance Evaluation:

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in the following manners;

The performance of the board was evaluated by the board, after seeking inputs from all the directors, on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In addition, the chairman was also evaluated on the key aspects of his role.

Separate meeting of independent directors was held to evaluate the performance of non-independent directors, performance of the board as a whole and performance of the chairman, taking into account the views of executive directors and non-executive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Directors Responsibility Statement:

Pursuant to section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

a) In preparation of annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and that no material departures have been made from the same;

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 or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the 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;

d) The Directors had prepared the annual accounts for the year ended March 31, 2023 on going concern basis.

e) The Directors had laid down the 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 systems were adequate and operating effectively.

COMMITTEES OF BOARD

The Board of Directors, in line with the requirement of the act, has formed various committees, details of which are given hereunder.

A. Audit Committee:

The Company has formed Audit Committee in line with the provisions Section 177 of the Companies Act, 2013.

During the Financial year 2022-23, company got converted from Private Limited Company to Public Limited company w.e.f November 22, 2022. After conversion of company, in the Board meeting held on Saturday, December 31, 2022, Board constituted Audit Committee of the company which comprised three directors; Ms. Hetal Umangbhai Shah (Non-Executive Independent Director) as Chairperson, Ms. Heena Viral Patel (Non-Executive Independent Director) and Mr. Sharadkumar Dashrathbhai Patel (Chairman and Managing Director) as Members.

Audit Committee meeting is generally held for the purpose of recommending the half yearly and yearly financial result. Additional meetings are held for the purpose of reviewing the specific item included in terms of reference of the Committee. During the year under review, Audit Committee met 2 (Two) times on February 01, 2023 and March 20, 2023.

The composition of the Audit Committee is as given below:

Number of meetings during the financial year 2022-23

Name DIN Category Designation

Eligible to Attended

Mrs. Hetal Umangbhai Shah	09829110	Non-Executive Independent Director	Chairperson	2	2
Mrs. Heena Viral Patel	09829226	Non-Executive Independent Director	Member	2	2
Mr. Sharadkumar Dashrathbhai Patel	07252252	Chairman and Managing Director	Member	2	2

The Statutory Auditors of the Company are invited in the meeting of the Committee wherever requires. Company Secretary and Chief Financial Officer of the Company are the regular invitee at the Meeting.

Recommendations of Audit Committee, wherever/whenever given, will be accepted by the Board of Directors.

Vigil Mechanism:

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report to the management instances of unethical behavior actual or suspected fraud or violation of Companys Code of Conduct.

Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safe guards against victimization of the Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company https://sotacpharma.com/wp-content/uploads/2023/08/Vigil-Mechanisam-Whistle-Blower-Policy.pdf .

B. Stakeholders Relationship Committee:

The Company has formed Stakeholders Relationship Committee in line with the provisions Section 178 of the Companies Act, 2013.

During the Financial year 2022-23, company got converted from Private Company to Public company w.e.f November 22, 2022. After conversion of company, in the Board meeting held on Saturday, December 31, 2022, Board constituted Stakeholders Relationship Committee which comprised three directors; Ms. Hetal Umangbhai Shah (Non-Executive Independent Director) as Chairperson, Ms. Heena Viral Patel (Non-Executive Independent Director) and Ms. Nidhiben Patel (Non-Executive Independent Director) as Members.

The Company has constituted Stakeholders Relationship Committee mainly to focus on the redressal of Shareholders/ Investors Grievances, if any, like Transfer/Transmission/Demat of Shares; Loss of Share Certificates; Non-receipt of Annual Report; Dividend Warrants; etc. There were no Stakeholders Relationship Committee meetings held during the year under review.

The composition of the Stakeholders Relationship Committee is as given below:

Name	DIN	Category	Designation
Mrs. Hetal Umangbhai Shah	09829110	Non-Executive Independent Director	Chairperson
Mrs. Heena Viral Patel	09829226	Non-Executive Independent Director	Member
Ms. Nidhiben Patel	09820927	Non-Executive Independent Director	Member

Also, during the year, the Company had not received any complaints from the Shareholders. There was no complaint pending as on March 31, 2023.

C. Nomination and Remuneration Committee:

The Company has formed Nomination and Remuneration Committee in line with the provisions Section 178 of the Companies Act, 2013.

During the Financial year 2022-23, company got converted from Private Company to Public company w.e.f November 22, 2022. After conversion of company, in the Board meeting held on Saturday, December 31, 2022, Board constituted the Nomination and Remuneration Committee which comprised three directors; Ms. Hetal Umangbhai Shah (Non-Executive Independent Director) as Chairperson, Ms. Heena Viral Patel (Non-Executive Independent Director) and Ms. Nidhiben Patel (Non-Executive Independent Director) as Members.

Nomination and Remuneration Committee meetings are generally held for identifying the persons who are qualified to become Directors and may be appointed in senior management and recommending their appointments and removal. During the year under review, Nomination and Remuneration Committee meetings met 2 (Two) times on January 16, 2023 and March 20, 2023.

The composition of the Nomination and Remuneration Committee is as given below:

Name	DIN	Category	Designation	Number of meetings during the financial year 2022-23
				Eligible to attend	Attended
Mrs. Hetal Umangbhai Shah	09829110	Non-Executive Independent Director	Chairperson	2	2
Mrs. Heena Viral Patel	09829226	Non-Executive Independent Director	Member	2	2
Ms. Nidhiben Patel	09820927	Non-Executive Independent Director	Member	2	2

Nomination and Remuneration Policy:

Nomination and Remuneration Policy in the Company is designed to create a high performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the Company. The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Executive Directors and Key Managerial Personnel. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the members and are effective from April 1, of each year.

The Nomination and Remuneration Policy, as adopted by the Board of Directors, is placed on the website of the Company at https://sotacpharma.com/wp-content/uploads/2023/08/Nomination-and-Remuneration-Policy.pdf .

Remuneration of Director:

The details of remuneration paid during the financial year 2022-23 to directors of the Company is provided in Form MGT-7 available at website of the Company, i.e. https://sotacpharma.com/annual-reports/ .

PUBLIC DEPOSIT:

The company has not accepted any deposits from the public. Hence, the directives issued by the Reserve Bank of India & the Provision of Section 73 to 76 of the Company Act, 2013 or any other relevant provisions of the Act and the Rules there under are not applicable.

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS & SECURITY:

Details of Loans, Guarantees, Investments and Security covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement.

ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website on https://sotacpharma.com/annual-reports/ .

TRANSACTIONS WITH RELATED PARTIES:

All the Related Party Transactions entered into during the financial year were on an Arms Length basis and in the Ordinary Course of Business. No material significant Related Party Transactions (i.e. exceeding 10% of the annual consolidated turnover as per the last audited financial statement) with Promoters, Directors, Key Managerial Personnel (KMP) and other related parties which may have a potential conflict with the interest of the Company at large, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013, in Form AOC-2 is not applicable.

Further, prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were placed before the Audit Committee and the Board of Directors for their approval on quarterly basis.

The details of the related party transactions for the financial year 2022-23 is given in notes of the financial statements which is part of Annual Report. The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company at https://sotacpharma.com/wp-content/uploads/2023/08/Related-Party-Transaction- Policy.pdf .

MATERIAL CHANGES AND COMMITMENT:

There are no material changes and commitments, affecting the financial position of the Company, have occurred between the ends of financial year of the Company i.e. March 31, 2023 to the date of this Report.

PARTICULAR OF EMPLOYEES:

The ratio of the remuneration of each director to the median of employees remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure-A.

The statement containing top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to members excluding this annexure. In terms of Section 136 of the Act, the said annexure is open for inspection in electronic mode for Members. Any shareholder interested in obtaining a copy of the same may write to Company Secretary.

INFORMATION ON SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES:

Our company having following mentioned Subsidiary companies as on the closure of Financial year 2022-23.

Name of company	Address of Registered Office	Nature of Business
1 Sotac Healthcare Priv	Pl ot No PF-20, Sanand GIDC-2	BETA LACTAM UNIT
Limited	Acme Pharma, Sana	Manufacturing plant is planned and
	Ahmedabad	designed aesthetically, operates with
		highest safety and environment standards
		ensuring the required isolation and
		differentiation of processes and sections to
		minimize chances of cross contamination.
2 Sotac Lifesciences Priv	Pl ot No. PF-21, Nr. ACME Phar	The company proposes to set up state of
Limited	Opp. Teva Pharma, Sanand GIDC	art manufacturing facility for various
	Sanand NA Ahmedabad	pharmaceutical formulations- allopathic,
		healthcare, neutraceuticals, ayurvedic
		products. The said manufacturing facility
		will be designated to cater the requirement
		of various regulated and emerging market.
		It has been established to undertake
		complex generic products like
		modifiedreleased solid oral dosage forms,
		suspensions and complex and immediate
		release dosage form. The said
		manufacturing facility will be equipped
		with all modern sophistaced equipments
		for product formulations.
		This project proposes the establishment of
		pharmaceutical formulation plant with
		annual capacity of 1200 Lacs
		Tablet/Month.,300 Lacs Capsules/Month;
		1200 Lacs syrup/Month and 600 kg
		Sachet/Month at full capacity utilization.
3 Sotac Research Private Limite	Plot No. PF-21, Nr. Acme Pharr	- State of the art R &D centre for
	Opp. Teva Pharma Sanand GIDC	formulations development
	Sanand Ahmedabad 382110	- Team of 10 + scientists
		- State of the art instruments for Oral
		solids, oral liquid, external preparations
		development
		- Collaboration for Availability of high end
		equipments like Differential Scanning,
		Calorimeter, Zeta Sizer, XRD, Atomic Force
		Microscope, LC/MS/MS, Particle size
		analyser

In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed to this Report as Annexure -C.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of Companies Act, 2013, Consolidated Financial Statements of the Company and all its subsidiaries in accordance with the relevant accounting standards have been prepared which forms part of the Annual Report.

Further, the Company does not have any Associate Companies and Joint Ventures as on March 31, 2023.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

To foster a positive workplace environment, free from harassment of any nature, we have institutionalized the Anti-Sexual Harassment Initiative (ASHI) framework, through which we address complaints of sexual harassment at the all workplaces of the Company. Our policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land where we operate. The Company has setup an Internal Complaints Committee (ICC) for redressal of Complaints.

During the financial year 2022-23, the Company has received nil complaints on sexual harassment, out of which nil complaints have been disposed off and nil complaints remained pending as of March 31, 2023. The Policy on Anti Sexual Harassment as approved by the Board of Directors is available on the website of the Company at https://sotacpharma.com/wp-content/uploads/2023/08/Anti-Sexual-Harassment-Policy.pdf .

RISK MANAGEMENT:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and nonbusiness risks.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of energy -

i. The steps taken or impact on conservation of energy:

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

ii. The steps taken by the Company for utilizing alternate sources of energy:

No alternate source has been adopted.

iii. The capital investment on energy conservation equipment: No specific investment has been made in reduction in energy consumption.

B. Technology absorption -

i. The effort made towards technology absorption: Not Applicable.

ii. The benefit derived like product improvement, cost reduction, product development or import substitution:

Not Applicable

iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - NotApplicable

a) The details of technology imported: Nil.

b) The year of import: Not Applicable.

c) Whether the technology has been fully absorbed: Not Applicable.

d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable.

e) The expenditure incurred on Research and Development: Nil

f) Foreign Exchange Earnings & Expenditure:

i. Details of Foreign Exchange Earnings:

(in Rs.)

Sr. No.	Particulars 1	F.Y. 2022-23	F.Y. 2021-22
1	Foreign Exchange Earnings	230666	1226346

ii. Details of Foreign Exchange Expenditure: NIL

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2:

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, New Delhi.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well- defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditor of the Company and the audit committee. The conduct of internal audit is oriented towards the review of internal controls and risks in its operations.

M/s. Keyur Shah & Co., Chartered Accountants (FRN: 141173W), the statutory auditors of the Company has audited the financial statements included in this annual report and has issued an report annexed as an Annexure B to the Audit Report of the Company on our internal control over financial reporting as defined in section 143 of Companies Act, 2013.

The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditor. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets the statutory auditors of the Company to ascertain, inter alia, their views on the adequacy of Internal control systems and keeps the board of directors informed of its major- observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 203, our internal financial controls were adequate and operating effectively.

CORPORATE GOVERNANCE:

Integrity and transparency are key factors to our corporate governance practices to ensure that we achieve and will retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably. Our Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

As our company has been listed on Emerge Platform of National Stock Exchange Limited, by virtue of Regulation 15 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 the compliance with the corporate Governance provisions as specified in regulation 17 to 27 and Clause (b) to (i) of sub regulation (2) of Regulation 46 and Para C D and E of Schedule V are not applicable to the company. Hence Corporate Governance Report does not form a part of this Board Report, though we are committed for the best corporate governance practices.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per the audited financial statements as on March 31, 2023, the net profit of the Company (profit as per Section 198 of Companies Act, 2013) is exceeding Rs. 5.00 Crore. As per Section 135(9) of the Companies Act, 2013, where the amount to be spent by a company under sub-section (5) does not exceed fifty lakh rupees, the requirement under sub-section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company. Therefore,

company doesnt require constituting Corporate Social Responsibility Committee. Further, the Board of Directors has approved the Corporate Social Responsibility Policy on August 11, 2023. The CSR Policy is available on the website of the company at https://sotacpharma.com/policies/.

CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. During the FY 2022-23, we could not spend CSR obligation of Rs. 6, 15,776/- (Rupees Six Lakh Fifteen Thousand Seven Hundred Seventy Six Only) which is 2% of the average net profit of the past three financial years. However, Company has transferred such unspent amount to a Fund specified in Schedule VII on August 18, 2023.

Main focus of the Company with respect to CSR endeavours in the thematic areas of School Education, Nutrition and Healthcare have contributed to the availability/up-gradation of basic school and college infrastructure / medical care. Therefore, The Company contributes CSR expenditure to "Shree Shraddha Education and Charitable Trust" for providing help to educationally less-privileged students and to provide a platform to the beneficiaries to build their future through exposure to education.

The Companys CSR Policy Statement in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure "E" to this report. CSR Policy is available on the Companys Website at https://sotacpharma.com/policies/.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In terms of Regulation 34 and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a review of the performance of the Company for the year under review Management Discussion and Analysis Report is presented in a separate section which is annexed to this Report as Annexure-D.

STATUTORY AUDITOR AND THEIR REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made thereunder, M/s. Keyur Shah & Co., Chartered Accountants (FRN: 141173W), were appointed as Statutory Auditors of the Company in the Extraordinary General Meeting of the members of company held on December 13, 2022 to hold office till conclusion of the next Annual General Meeting of the Company to conduct audit of accounts of the Company for the financial year ending 31 March 2023.

M/s. Keyur Shah & Co., Chartered Accountants, Ahmedabad (FRN: 141173W), proposed to be re-appointed as Statutory Auditors of your Company at forthcoming Annual General Meeting, for the term of remaining four consecutive years for a term till the conclusion of Twelfth Annual General Meeting to be held in the calendar year 2027.

The Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditors Report is enclosed with the financial statements in this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

INTERNAL AUDITOR:

Pursuant to Section 138 of Companies Act 2013, the Company had appointed M/s. Amit G Patel & Associates Chartered Accountant (FRN: 152837W), Ahmedabad, as an Internal Auditor of the Company.

REPORTING OF FRAUD:

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

MAINTENANCE OF COST RECORD:

Pursuant to the provisions of the Companies Act, 2013 and rules thereof, the Board of Directors of the Company, in their meeting held on August 11, 2023, on the recommendation of the Audit Committee, have appointed M/s. Suthar Haresh & Associates, Cost Accountants, Ahmedabad (Firm Registration No.: 002124) as the Cost Auditor of the Company to audit the cost records of the Company for the financial year 2023-24. Further, as per Section 148 of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified at the ensuing Annual General Meeting.

Pursuant to the provisions of the Companies Act, 2013 and rules thereof, the Board of Directors of the Company, in their meeting held on August 11, 2023, on the recommendation of the Audit Committee, have appointed M/s. Suthar Haresh & Associates, Cost Accountants, Ahmedabad (Firm Registration No.: 002124) as the Cost Auditor of the Company to audit the cost records of the Company for the financial year 2023-24. M/s. Suthar Haresh & Associates, have confirmed that they are free from disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that their appointment meets the requirements of Section 141(3)(g) of the Act. They have further confirmed their independent status and an arms length relationship with the Company. Further, as per Section 148 of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified at the ensuing Annual General Meeting.

The Company has maintained cost accounts and records in accordance with provisions of Section 148 of the Companies Act, 2013 and rules thereof.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS INTERNAL AUDITOR:

There are no other significant/material orders passed by the Regulators, Courts, Tribunals, Statutory and quasi-judicial body impacting the going concern status of the Company and its operations in future.

The details of litigation on tax and other relevant matters are disclosed in the Auditors Report and Financial Statements which forms part of this Annual Report.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016(IBC):

During the period under review no corporate insolvency resolution process is initiated against the company under the Insolvency and Bankruptcy Code, 2016 (IBC).

SECRETARIAL AUDITOR AND THEIR REPORT:

Pursuant to the provisions of Section 204 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company was not under the limits of the Secretarial Audit for the financial year 2022-23. Therefore, The Secretarial Audit is not applicable to the company for the financial year 2022-23.

WEBSITE:

Your Company has its fully functional website www.sotacpharma.com which has been designed to exhibit all the relevant details about the Company. The site carries a comprehensive database of information of the Company including the Financial Results of your Company, Shareholding Pattern, details of Board Committees, Corporate Policies/ Codes, business activities and current affairs of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013, Companies Rules, 2014 and as per Regulation 46 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and also the non-mandatory information of Investors interest / knowledge has been duly presented on the website of the Company.

GENERAL DISCLOSURE:

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of The Companies (Accounts) Rules, 2014 and other applicable provisions of the act and listing regulations,

to the extent the transactions took place on those items during the year. Your Directors further state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review;

(i) Issue of Equity Shares with differential rights as to dividend, voting or otherwise;

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS;

(iii) Annual Report and other compliances on Corporate Social Responsibility;

(iv) There is no revision in the Board Report or Financial Statement;

(v) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future;

APPRECIATIONS AND ACKNOWLEDGEMENT:

Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees at all levels through their dedication, hard work and commitment during the year under review.

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be your Companys endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.

Your Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

Registered office:	For and	on behalf of Board of Directors
Plot No. PF-21, Nr. Acme Pharma,		Sotac Pharmaceuticals Limited
Opp. Teva Pharma Sanand GIDC-II,		CIN:L24230GJ2015PLC085451
Sanand, Ahmedabad-382110
	Sharadkumar Dashrathbhai Patel	Dineshkumar Babulal Gelot
Place: Ahmedabad	Chairman & Managing Director	Whole time Director
Date: August 11, 2023	DIN:07252252	DIN: 07252132