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Sumitomo Chemical India Ltd. के निदेशक की रिपोर्ट

Mar 31, 2025

Your Directors have pleasure in presenting the Twenty-Fifth Annual Report and the Audited Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2025.

1. FINANCIAL RESULTS

The salient features of the Company''s working are:

('' in Million)
	2024-25	2023-24
Gross Profit for the year	7,372.50	5,648.39
Less: Depreciation and amortization expense	632.61	614.92
Profit before tax	6,739.89	5,033.47
Less: Tax expense (current and deferred tax)	1,720.41	1,336.73
Profit after tax	5,019.48	3,696.74
Add: Balance of Retained earnings brought forward from the previous year	2,292.62	1,689.22
Available retained earnings	7,312.10	5,385.96
Other Comprehensive Income	(6.59)	1.36
	7,305.51	5,387.32
Final Dividend relating to previous financial year paid during the year	449.23	598.97
Interim Dividend paid in 2023-24	-	2,495.73
Transfer to General Reserve	3,250.00	-
Retained earnings carried forward to the next year	3,606.28	2,292.62

2. DIVIDEND

Your Directors have recommended a dividend of '' 1.20 (12%) [previous year final dividend of '' 0.90 (9%)] per equity share on 499,145,736 shares of '' 10 each aggregating '' 598.97 million (previous year '' 449.23 million). The Directors consider this appropriate having regard to the requirements for funds for business and future growth of the Company and in opinion of the Board the proposed dividend is in line with the Company''s Dividend Distribution Policy.

3. OPERATIONS

During the year under review, the sales increased from '' 28,062.81 million in the previous year to '' 30,608.32 million. Domestic sales turnover increased from '' 22,509.79 million to '' 23,841.91 million and the export turnover from '' 5,553.02 million to '' 6,766.41 million. After making provision for depreciation, interest and tax, the Net profit during the year under report stands at '' 5,019.48 million as against '' 3,696.74 million in the previous year.

Overall normal monsoon in the year generally supported agricultural activities and output and demand for agrochemicals; however, excess rainfall in some regions impacted key crops. While normal cropping area for most crops indicated stable agrochemical demand, some crops, such as cotton, presented specific challenges. Low commodity prices for crops like cotton, chilies and soybean affected farmer earnings and their ability to invest in crop protection. Agrochemical prices, which were stable to a large extent through the year and in some cases lower than the previous year, positively impacted input costs and farmer affordability, thus affecting demand. The good Rabi season contributed to overall agricultural output and farmer income, boosting agrochemical use in the subsequent Kharif season. Importantly, the market was characterized by relatively low level of pipeline inventory, which influenced supply dynamics and pricing in the agrochemicals sector.

4. REGULATORY ORDER FOR GLYPHOSATE USE

In October 2022, the Central Government issued a Notification mandating that Glyphosate, a broad spectrum weedicide and an important product for the Company, will be used only through Pest Control Operators. Several industry players and associations have filed petitions before the Hon''ble Delhi High Court ("Hon''ble Court") challenging the Notification. The petitions are under hearing. The Central Government has undertaken before the Hon''ble Court not to implement the Notification till disposal of the said petitions.

5. NEW PRODUCTS/IMPROVEMENTS/EXPANSIONS

The Company continues to maintain ISO 9001, ISO 14001 and ISO 45001 certifications for the manufacturing sites. The Company has also initiated implementation of 5S Workplace Management System, Total Productive Maintenance (TPM) System and behavior-based safety norms with a view to achieve higher efficiency, productivity and enhance safety management system. The quality of products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of the quality management systems. The Company continues to enjoy the reputation of a consistent and reliable quality supplier.

During the year under review, the Company introduced one new technical-grade product and five new formulation products. The Company continues to focus on ramping up newly-launched products and introduction of new products in agrochemicals and bio-stimulant segments - this is core to sustainable future growth. The Company has plans to introduce three new patented products during the financial year 2025-26.

During the year under review, the Company initiated its highly successful "Every Day Farmers'' Day" ("EDFD") campaign. This initiative, which grew beyond its original 100-day scope, redefined the Company''s approach to demand generation, enabling in-person engagement with over one million farmers. This campaign was strategically designed to build lasting momentum by connecting with farmers and channel partners, underscoring the Company''s dedication to excellence in agriculture. The campaign''s success was supported by meticulous real-time digital tracking and engagement, providing leadership with continuous updates.

6. OUTLOOK

Agriculture remains vital to Indian economy, contributing approximately 15% to the country''s GDP and providing livelihoods to about 50% of the population. While the share of agriculture in India''s GDP has declined over the decades due to faster growth in the manufacturing and service sectors, its fundamental importance remains undiminished. The domestic agrochemicals market continues to be driven by a rising population and the consequent need for increased food production. Increasing emphasis on produce quality further boosts agrochemical consumption. Indian government''s ongoing initiatives to protect farmers'' interests and improve their profitability, including minimum support prices, Kisan Samman Nidhi, and substantial budgetary allocations, are expected to strengthen rural economy and support growth of the agrochemical industry.

Indian agrochemical companies have emerged as important supply sources in international market - exports have substantial share in Indian companies'' turnover.

The outlook for the Indian agrochemical industry in 2025-26 is cautiously positive. While a normal monsoon and cropping area, coupled with stable commodity prices, are expected to support demand, the industry faces challenges related to rising input costs, and increasing competition. The potential impact of US tariffs also adds an element of uncertainty. The industry will need to navigate these challenges by focusing on cost management, product innovation, and strategic market positioning.

7. SAFETY, HEALTH AND ENVIRONMENT

The Company continues to work on reducing environmental load, enhance safety, improve quality and reduce cost. The Company continues to play the role of a responsible corporate citizen in the fulfillment of its objectives of protecting and enriching the environment and human health and safety. The Company has also adopted Responsible Care Policy and its initiatives demonstrate its commitment towards comprehensive approach for safeguarding environment, health and safety of all stakeholders and aims at achieving and sustaining high standards of performance. The Company also reviews and monitors these Quality, Environment, Health and Safety policies and sustainability activities to ensure continual improvement.

The Company''s commitment to its safety management programs follows a top-down approach towards establishing, demonstrating, sustaining and improving the safety culture and incorporating the Company''s core value of safety in people''s daily responsibilities. Safety audit, training programs and other safety management processes are carried out at regular intervals.

The Company has adopted plastic waste management process to minimize the amount of âpost-use plastic waste'' in the environment through a plastic credit platform dedicated to collection, segregation and recycling of such waste. The green initiatives of the Company in the form of harvesting wind and solar energy, rain water harvesting and treatment of sewage water contribute to improving environment and conserving natural resources. The Company continues to work towards reduction of greenhouse gases for sustainable economic and social values. These initiatives are implemented through âScience Based Targets''.

8. EDUCATION, LEARNING AND HUMAN RESOURCESBuilding a strong workforce through learning, development, goal setting and performance management

The Company invests in attracting right talent and skill-sets to drive its sustainability-led business strategy. Its human resource framework is built around a model designed to create a skilled and productive structure. The focus is on addressing the existing skill-gaps and attracting new and industry-relevant skills which include functional/technical and on-the-job training programs. During the year under review, as a part of the leadership training initiative, the Company undertook strength-based intervention through Gallup International for seniors and a few second line managers from sales and marketing functions to enrich their competencies.

The Company has identified development of managerial capability as a key focus area for steering its growth plans. The Company has a robust goal- setting and performance-management process in place for aligning individual interests, goals, targets and achievements with the functional goals and finally with the corporate strategic goals, targets and achievements.

The employees receive real time feedback on their performance and improvement areas through a structured review process which is designed to evaluate and identify development opportunities. The Company focuses on empowering employees with skills in critical development areas identified pursuant to training-needs analysis, feedback and discussions. The Company aims at building a pool of leaders and ensuring succession planning across the organisation for critical and leadership positions.

9. INSURANCE

The Company continues to carry adequate insurance cover for all its assets against foreseeable perils like fire, flood, earthquake, etc. and continues to maintain the Liability Policy as per the provisions of the Public Liability Insurance Act.

10. SUBSIDIARY COMPANIES

Highlights of the financial performance of Barrix Agro Sciences Private Limited, subsidiary, are as follows:
	2024-25 ('' in Million)	2023-24 ('' in Million)
Revenue from operations	582.75	320.42
Profit / (Loss) before tax	62.58	(85.69)
Profit / (Loss) after tax	63.13	(80.95)

The Company has obtained a certificate from the Statutory Auditors to the effect that the Company is in compliance with the FEMA Regulations with respect to the downstream investment made by it in Barrix Agro Sciences Private Limited.

Excel Crop Care (Africa) Limited, the Company''s Tanzania based unlisted and non-material subsidiary, is under voluntary winding up process. The Company holds 99.9% of the equity share capital of Excel Crop Care (Africa) Limited. Its winding up is not likely to materially impact business, commercial activities or financial position of the Company.

Financial statements of the subsidiaries have been considered for preparation of consolidated financial statements. The Financial Statements and the Reports of the Board of Directors and the Auditors of Barrix Agro Sciences Private Limited are being posted on the Company''s website: www.sumichem.co.in.

11. DISCLOSURE UNDER THE COMPANIES ACT, 2013

Information pursuant to various disclosure requirements prescribed under the Companies Act, 2013 and rules thereunder, to the extent applicable to the Company, is given below. Some of the disclosures have been included at appropriate places in the Corporate Governance Report which forms part of the Board''s Report.

a) Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure I.

b) Annual Return:

Annual return as on 31 March 2024 in form MGT-7 filed with the Ministry of Corporate Affairs is available on the Company''s website https://sumichem.co.in/content/uploads/MGT 7 23-24 signed-website-30-09-2024-06-56-12.pdf Annual return as on 31 March 2025 in form MGT-7 will also be posted on the Company''s website after the same is filed with the Ministry of Corporate Affairs.

c) Policy on Directors'' appointment, Remuneration Policy and information regarding remuneration:

Particulars of the Company''s Policy on Directors'' appointment, Remuneration Policy and information pursuant to Rule 5(1) of the Companies (Appointment & Remuneration) Rules, 2014 are given in Annexure II.

d) Particulars of Loans, Guarantees and Investments:

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.

e) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis.

Pursuant to the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"), all material related party transactions require approval of the members through a resolution. LODR define the term âmaterial'' to mean a transaction with a related party which individually or taken together with previous transactions during a financial year exceeds '' 10,000 million or ten percent of the annual consolidated turnover of the Company as per its last audited financial statement, whichever is lower.

During the year, the Company entered into transactions with Sumitomo Chemical Company, Limited, Japan, the holding company, which are considered âmaterial transactions'' in terms of LODR. The shareholders had accorded their approval to the transactions with Sumitomo Chemical Company, Limited through an ordinary resolution passed at the annual general meeting held on 30 July 2024.

The Company is seeking approval of the shareholders, through an ordinary resolution at the ensuing annual general meeting, for the transactions entered into / proposed to be entered into with the holding company during the financial year 2025-26 for an amount not exceeding '' 7,100 million.

Form for disclosure of particulars of material transactions entered into by the Company with Sumitomo Chemical Company Limited, Japan, a related party, as required under Section 188(1) of the Companies Act, 2013 on an arm''s length basis are summarised in Form AOC-2 in Annexure III.

The same are also given in note 38 to the Standalone Financial Statements.

The Company''s Policy on related party transactions as approved by the Board may be accessed on the Company''s website https://sumichem.co.in/pdf/25-26/modified related party transaction policy 2025 v6.pdf.

f) Business Risk Management:

The Board has constituted Risk Management Committee pursuant to the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to identify and monitor risks faced by the Company.

The Committee deliberates on the major enterprise and business risks identified by the management, analysis of their impact and mitigation measures for addressing the risks. The major risk areas identified relate to risks associated with material procurement and manufacturing operations, regulatory risks, cyber security / IT related risks, human resources related risks, currency risks, credit risks mainly associated with exports and insurance adequacy risks.

In opinion of the Board, there is no element of risk which may pose serious threat to the existence of the Company.

g) Evaluation of performance of the Board, Committees of Directors and Individual Directors:

The Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including performance of the Chairman of the Board. As a part of this mechanism, a structured questionnaire, approved by the Company''s Nomination and Remuneration Committee, is used to carry out evaluation of performance of the Board, Committees of Directors and individual Directors. The questionnaires take into consideration various criteria and factors.

h) Material orders passed by the regulatory authorities or courts/material changes or commitments:

There are no material orders passed by regulators or courts which can impact the going concern status of the Company and its future operations. There are no material changes or commitments occurring after 31 March 2025 which may affect the financial position of the Company.

i) Internal Financial Controls and their adequacy:

The Company has adequate system of internal controls to safeguard and protect from loss, unauthorised use or disposition of its assets. All the transactions are properly authorised, recorded and reported to the management. The Company is following all the applicable Accounting Standards for proper maintenance of books of accounts and for financial reporting.

j) Performance of subsidiaries:

Details of performance and financial position of the subsidiary companies are given in Form AOC-1 in Annexure IV. The Company has no associate company.

k) Corporate Social Responsibility (CSR) initiatives:

The Company has formulated its Corporate Social Responsibility Policy which is posted on its website https://sumichem.co.in/pdf/Corporate%20Social%20Responsibility%20Policy.pdf

A brief outline of the Policy and the Annual Report on CSR Activities is given in Annexure V.

l) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure VI.

m) Secretarial Audit Report and Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, M/s Saraf & Associates, Practicing Company Secretaries, (FCS:1596; CP NO.642), were appointed Secretarial Auditors to conduct secretarial audit for the year ended 31 March 2025. The Report of the Secretarial Auditors is attached as Annexure VII.

Regulation 24A(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was amended in December 2024. As per the amended Regulation 24A(1), effective 01 April 2025, every listed company is required to appoint Secretarial Auditor for a term of five consecutive years with the approval of its members in its annual general meeting. Accordingly, the Company is seeking approval of the members, through an ordinary resolution at the ensuing annual general meeting, for appointment of Messrs M K Saraf & Associates LLP Practising Company Secretaries, as the Company''s Secretarial Auditors for the five financial years commencing with the financial year 2025-26.

n) Secretarial Standards:

The Company has complied with the applicable âSecretarial Standards on Meetings of the Board of Directors - SS 1'' and âSecretarial Standards on General Meetings - SS 2''.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr Ninad D Gupte, Director, retires by rotation and being eligible, offers himself for reappointment.

The first five-year terms of Dr Mukul G Asher, Mr B V Bhargava and Mrs Preeti Mehta, Independent Directors, concluded in August 2024.

Mr B V Bhargava took retirement on completion of his tenure as Independent Director on 26 August 2024. The Board places on record its deep appreciation for Mr Bhargava''s immense contribution in Board and Committee deliberations and in formulating business strategies and policies and business planning and in the areas of risk management, business systems, procedures and processes, internal control and governance.

Dr Mukul G Asher has been reappointed as Independent Director for the second term for the period from 27 August 2024 up to 31 August 2026. Mrs Preeti Mehta has been reappointed as Independent Director for the second term for the period from 31 August 2024 up to 30 August 2029. Mr N Sivaraman has been appointed as Independent Director for a term of two years from 01 September 2024 up to 31 August 2026. The appointments of the Independent Directors were made through Special Resolutions passed by the members at the annual general meeting held on 30 July 2024.

In opinion of the Board, Dr Mukul G Asher, Mrs Preeti Mehta and Mr N Sivaraman, the Independent Directors appointed / reappointed during the financial year 2024-25, are persons of high integrity and possess relevant expertise and experience.

At the said annual general meeting, the members passed a Special Resolution approving promotion of Dr Suresh Ramachandran, Whole-time Director, to the position of Deputy Managing Director with effect from 01 September 2024 for his existing tenure up to 31 May 2028.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have 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) they have prepared the annual accounts on a going concern basis;

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

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees and the management''s assessment of adequacy and effectiveness of internal financial controls, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the year 2024-25.

Messrs BSR & Co. LLP the statutory auditors, who have audited the Company''s financial statements for the year 2024-25, have given their report on the Company''s internal control over financial reporting as defined by Section 143 of the Companies Act, 2013, which Report is annexed as Annexure B to the Independent Auditor''s Report.

14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report prepared in the prescribed form pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in relation to initiatives taken from environmental, social and governance perspective, forms part of the Annual Report.

15. CORPORATE GOVERNANCE

Your Company is committed to the principles of good corporate governance and the Board of Directors lays strong emphasis on transparency, accountability and integrity. Your Company has complied with all the requirements of the Code of Corporate Governance contained in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and, pursuant thereto, Management Discussion and Analysis and the Corporate Governance Report are annexed and form part of the Annual Report.

16. AUDITORS AND AUDITORS'' REPORTS

At the previous annual general meeting held on 30 July 2024, the members appointed Messrs BSR & Co. LLP, Chartered Accountants, as the Auditors of the Company for a term of five consecutive years, in place of Messrs SRBC & CO LLP, the retiring Auditors.

The Independent Auditor''s Reports on Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2025, issued by Messrs BSR & Co. LLP, the Auditors, are enclosed with the Financial Statements in this Annual Report. The Independent Auditors'' Reports are unmodified and do not contain any qualification, reservation or adverse remark.

17. COST RECORDS AND COST AUDIT REPORT

The Company prepares and maintains cost records as specified by the Central Government under Section 148(1) and rules made thereunder. The cost records for the year 2023-24 were subjected to cost audit by Messrs GMVP & Associates LLP, Cost Auditors. The Cost Audit Report for the financial year 2023-24 issued by the Cost Auditors was filed with the Ministry of Corporate Affairs on 22 August 2024 vide SRN: F97613772.

18. ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation of the wholehearted co-operation received from the Company''s Shareholders, Bankers, various authorities of the Governments and business associates.

Mar 31, 2024

The Directors have pleasure in presenting the Twenty-Fourth Annual Report and the Audited Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2024.

1. FINANCIAL RESULTS

The salient features of the Company''s working are:

(Rs. in Million)
	2023-24	2022-23
Gross Profit for the year	5,648.39	7,072.66
Less: Depreciation and amortization expense	614.92	518.62
Profit before tax	5,033.47	6,554.04
Less: Tax expense (current and deferred tax)	1,336.73	1,519.67
Profit after tax	3,696.74	5,034.37
Add: Balance of Retained earnings brought forward from the previous year	1,689.22	1,633.67
Available retained earnings	5,385.96	6,668.04
Other Comprehensive Income	1.36	20.33
	5,387.32	6,688.37
Final Dividend relating to previous financial year paid during the year	598.97	499.15
Interim Dividend (2023-24) paid during the year	2,495.73	-
Transfer to General Reserve	-	4,500.00
Retained earnings carried forward to the next year	2,292.62	1,689.22

2. DIVIDEND

I n February, 2024, the Board declared and paid a Special Interim Dividend of ''5 per equity share of ''10 each aggregating '' 2,495.73 million to commemorate the occasion of the Company entering its silver jubilee year.

Your Directors have recommended a final dividend of '' 0.90 (previous year '' 1.20) per equity share on 499,145,736 shares of '' 10 each aggregating '' 449.23 million (previous year '' 598.97 million). The Directors consider this appropriate in view of having paid Special Interim Dividend of '' 5 per equity share in February, 2024 and further having regard to the requirements for funds for business and future growth of the Company.

3. OPERATIONS

During the year under review, the sales decreased from '' 34,732.57 million in the previous year to '' 28,062.81 million. Domestic sales turnover decreased from '' 26,068.92 million to '' 22,509.79 million and the export turnover also decreased from '' 8,663.65 million to '' 5,553.02 million. After making provision for depreciation, interest and Tax, the Net profit during the year under report stands at '' 3,696.74 million as against '' 5,034.37 million in the previous year.

In FY 2023-24, monsoon was deficient and erratic and its time-spread was not conducive for agricultural operations. High cost raw material opening inventory, wide fluctuations in raw material costs and its sharp decrease in the middle of the season impacted generic- products pricing and led to slow liquidation of high cost inventory. Unfavourable weather conditions resulted inventory pile-up with channel partners. Similar unfavourable market conditions prevailed in international agrochemicals markets as well impacting exports. Geopolitical situations like continued Russia-Ukraine conflict and Red sea situation leading to high logistics costs impacted the business. Uncertainties continued for major part of the financial year due to erratic monsoon and volatile pricing. Low demand, high costs and pressure of high working capital threw up unprecedented challenges to the agrochemicals industry.

4. REGULATORY ORDER FOR GLYPHOSATE USE

In October 2022, the Central Government issued a Notification mandating that Glyphosate, a broad spectrum weedicide and an important product for the Company, will be used only through Pest Control Operators. Several industry players and associations filed petitions before the Hon''ble Delhi High Court ("Hon''ble Court") challenging the Notification. The petitions are under hearing. The Central Government has undertaken before the Hon''ble Court not to implement the Notification till disposal of the said petitions.

5. NEW PRODUCTS/IMPROVEMENTS/EXPANSIONS

The Company continues to maintain ISO 9001, ISO 14001 and ISO 45001 certifications for the manufacturing sites. The Company has also initiated implementation of 5S Workplace Management System and Total Productive Maintenance (TPM) System with a view to achieve higher efficiency and productivity. The quality of products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of the quality management systems. The Company continues to enjoy the reputation of a consistent and reliable quality supplier.

During the year under review, the Company introduced breakthrough technology for oomycetes disease control -DerechoÂ® which is a proprietary active ingredient of the parent company and an innovative advance liquid formulation of Copper.

The Company has plans to introduce three new patented products during the financial year 2024-25. The Company would continue to focus on ramping up recently launched products and on introduction of new products which is core to sustainable future growth.

6. OUTLOOK

Agriculture sector is one of the important segments of Indian economy. It contributes about 15% to country''s GDP and provides source of livelihood to about 50% of the population. Share of agriculture in the country''s GDP has declined over the decades as manufacturing and service sectors have grown faster.

Government of India has taken a number of initiatives to protect interest of farmers and improve their profitability. Providing minimum support prices for several agriculture produce, Kisan Samman Nidhi, large budgetary allocation for farming sector are some such initiatives. The Government has also extended the period for free supply of ration for the poor. These initiatives are expected to improve rural economy which in turn will help in the growth of agro-chemical industry. The commodity prices are robust and farmers are expected to continue to invest in agrochemicals to safeguard the harvest.

The India Meteorological Department ("IMD") has predicted above-average monsoon rainfall in 2024 and hence, the industry outlook for FY 2024-25 appears reasonably good. Market prospects appear positive in the international markets as well in 2024-25. Product prices are stable and are expected to remain stable throughout the year which augurs well for the industry.

7. SAFETY, HEALTH AND ENVIRONMENT

The Company continues to work on reducing environmental load, enhance safety, improve quality and reduce cost. The Company continues to play the role of a responsible corporate citizen in the fulfillment of its objectives of protecting and enriching the environment and human health and safety. The Company has also adopted Responsible Care Policy and its initiatives demonstrate its commitment towards comprehensive approach for safeguarding environment, health and safety of all stakeholders and aims at achieving and sustaining high standards of performance. The Company also reviews and monitors these Quality, Environment, Health & Safety policies and sustainability activities to ensure continual improvement.

The Company''s commitment to its safety management programs follows a top-down approach towards establishing, demonstrating, sustaining and improving the safety culture and incorporating the Company''s core value of safety in their daily responsibilities. Safety audit, training programs and other safety management processes are carried out at regular intervals.

The green initiatives of the Company in the form of harvesting wind and solar energy and treatment of sewage water contribute to improving environment. The Company continues to work towards reduction of greenhouse gases for sustainable economic and social values. These initiatives are implemented through âScience Based Targets''.

8. EDUCATION, LEARNING AND HUMAN RESOURCESBuilding a strong workforce through learning, development, goal setting and performance management

9. INSURANCE

10. SUBSIDIARY COMPANIES

On 15 December 2023, the Company acquired 85% equity shares (on fully diluted basis) and controlling stake in Barrix Agro Sciences Private Limited, a Bangaluru based company engaged in R&D innovation, manufacturing and marketing of Integrated Pest Management ("IPM") and Integrated Plant Nutrition Management ("IPNM") products especially pheromone traps and chromatic sheets for agricultural pest management. This acquisition is in alignment of the Company''s strategy to build a more sustainable portfolio of green chemistries and offer IPM and IPNM products and solutions to farmers. Thus, Barrix Agro Sciences Private Limited has become the Company''s subsidiary with effect from 15 December 2023.

Highlights of the financial performance of Barrix Agro Sciences Private Limited are as follows:

	2023-24	2022-23
	('' in Million)	('' in Million)
Revenue from operations	320.42	363.15
Profit/(Loss)	(85.69)	36.68
Profit/(Loss) after Tax	(80.95)	38.85

In February 2024, the shareholders of Excel Crop Care (Africa) Limited, the Company''s Tanzania based subsidiary, have passed a resolution approving its voluntary winding up with effect from 31 March 2024. The winding up process for the subsidiary is underway and is subject to legal, regulatory and other processes and procedures under the laws in Tanzania. Your Company holds 99.9% of the equity shares of Excel Crop Care (Africa) Limited. This subsidiary is an unlisted ânon-material'' subsidiary which was not having any significant business or commercial activities and had been incurring losses for the past three years. It has no material financial liability on its balance sheet and has a positive net worth as on 31 March 2024. Its winding up is not likely to materially impact business, commercial activities or financial position of the Company.

Highlights of the financial performance of Excel Crop Care (Africa) Limited, Tanzania are as follows: (Tanzania Schillings		in Million)
	2023-24	2022-23
Revenue	275	198
Loss	144	310
Loss after Tax	96	230

The Financial Statements and the Reports of the Board of Directors and the Auditors of Barrix Agro Sciences Private Limited and Excel Crop Care (Africa) Limited are posted on the Company''s website: www.sumichem.co.in.

11. DISCLOSURE UNDER THE COMPANIES ACT, 2013

Information is given below pursuant to various disclosure requirements prescribed under the Companies Act, 2013 and rules thereunder, to the extent applicable to the Company. Some of the disclosures have been included in appropriate places in the Corporate Governance Report which is part of the Board''s Report.

a) Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

b) Annual Return:

Annual return as on 31 March 2023 in form MGT-7 filed with the Ministry of Corporate Affairs is available on the Company''s website https://sumichem.co.in/pdf/22-23/Annual%20Return.pdf.

Annual return as on 31 March 2024 in form MGT-7 will also be posted on the Company''s website after the same is filed with the Ministry of Corporate Affairs.

c) Policy on Directors'' appointment, Remuneration Policy and information regarding remuneration:

d) Particulars of Loans, Guarantees and Investments:

The 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.

e) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis.

Pursuant to the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the said Regulations"), all material related party transactions require approval of the members through a resolution. The said Regulations define the term âmaterial'' to mean a transaction with a related party which individually or taken together with previous transactions during a financial year exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statement of the Company.

During the year, the Company entered into transactions with Sumitomo Chemical Company, Limited, Japan, the holding company, which are considered âmaterial transactions'' in terms of the said Regulations. These transactions were approved by the shareholders by an ordinary resolution passed at the previous annual general meeting held on 28 July 2023.

The Company is seeking approval of the shareholders, through an ordinary resolution at the ensuing annual general meeting, for the transactions entered into / proposed to be entered into with the holding company during the Financial Year 2024-25 up to an amount not exceeding '' 9,500 million.

The Company had no transactions during F. Y. 2023-24 requiring disclosure in the Form AOC-2 under the Companies Act, 2013.

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website https:// sumichem.co.in/pdf/20220603121214.pdf?v=1.0.

f) Business Risk Management:

The Board has formed Risk Management Committee pursuant to the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to identify and monitor risks faced by the Company. The Committee deliberates on the major enterprise and business risks identified by the management, analysis of their impact and mitigation measures for addressing the risks. The major risk areas relate to risks associated with material procurement and manufacturing operations, regulatory risks, cyber security / IT related risks, human resources related risks, currency risks, credit risks mainly relating to exports and insurance adequacy risks.

g) Evaluation of the performance of the Board, Committees of Directors and Individual Directors:

h) Material orders passed by the regulatory authorities or courts/material changes or commitments:

There are no significant material orders passed by regulators or courts which can impact the going concern status of the Company and its future operations. There are no material changes or commitments occurring after 31 March 2024 which may affect the financial position of the Company.

i) Internal Financial Controls and their adequacy:

j) Performance of subsidiary companies:

Details of performance and financial position of the subsidiary companies, are given in Form AOC-1 in Annexure III. The Company has no associate company.

k) Corporate Social Responsibility (CSR) initiatives:

The Company has formulated its Corporate Social Responsibility Policy which has been posted on its website https://sumichem.co.in/pdf/Corporate%20Social%20Responsibility%20Policy.pdf

A brief outline of the Policy and the Annual Report on CSR Activities is given in Annexure IV.

l) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure V.

m) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, M/s Saraf & Associates, Practicing Company Secretaries, Mumbai (FCS:1596; CP NO.642), were appointed Secretarial Auditors to conduct secretarial audit for the year ended 31 March 2024. The Report of the Secretarial Auditors is attached as Annexure VI.

n) Secretarial Standards:

The Company has complied with the applicable âSecretarial Standards on Meetings of the Board of Directors - SS 1'' and âSecretarial Standards on General Meetings - SS 2''.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr Tadashi Katayama, Director, retires by rotation and being eligible, offers himself for reappointment.

The first five-year term of Dr Mukul G Asher, Mr B V Bhargava and Mrs Preeti Mehta, Independent Directors, expires in August 2024. Special resolutions proposing reappointment of Dr Mukul G Asher and Mrs Preeti Mehta for the second term as Independent Directors are included in the notice of the ensuing annual general meeting.

It is proposed to promote Dr Suresh Ramachandran, Whole-time Director, to the position of Deputy Managing Director with effect from 01 September 2024.

A special resolution proposing appointment of Mr N Sivaraman as Independent Director with effect from 01 September 2024 is part of the notice of the ensuing annual general meeting.

Mrs Deepika Trivedi was appointed Company Secretary and Compliance Officer with effect from 01 April 2023 in place of Mr Pravin D Desai who retired.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(d) they have prepared the annual accounts on a going concern basis;

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

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

14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

15. CORPORATE GOVERNANCE

16. AUDITORS AND AUDITORS'' REPORTS

The Independent Auditors'' Reports on Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2024, issued by M/s SRBC & CO LLP, the Auditors, are enclosed with the Financial Statements in this Annual Report.

The Independent Auditors'' Reports are unmodified and do not contain any qualification, reservation or adverse remark. With respect to the observations in the Independent Auditors Report relating to audit trail feature of the Company''s accounting software, the same has been explained in Note 51 to the Standalone Financial Statements.

The term of appointment of Messrs SRBC & CO LLP as Auditors ends on the conclusion of the ensuing annual general meeting. It is proposed to appoint Messrs BSR & Co. LLP, Chartered Accountants, as the Auditors of the Company for a period from the conclusion of this meeting till the conclusion of the 29^th annual general meeting. A resolution proposing their appointment is included in the notice of the ensuing annual general meeting.

17. COST RECORDS AND COST AUDIT REPORT

The Company prepares and maintains cost records as specified by the Central Government under Section 148(1) and rules made thereunder. The cost records for the year 2022-23 were subjected to cost audit by M/s GMVP & Associates LLP Cost Auditors. The Cost Audit Report for the financial year 2022-23 issued by the Cost Auditors was filed with the Ministry of Corporate Affairs on 28 September 2023 vide SRN: F63581011.

18. ACKNOWLEDGEMENTS

Mar 31, 2023

Your Directors have pleasure in presenting the Twenty-Third Annual Report and the Audited Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2023.

1. FINANCIAL RESULTS

The salient features of the Company''s working are:

('' in Million)
	2022-23	2021-22
Gross Profit for the year	7,072.66	6,306.12
Less: Depreciation and amortisation expense	518.62	447.92
Profit before tax	6,554.04	5,858.20
Less: Tax expense (current and deferred tax)	1,519.67	1,520.87
Profit after tax	5,034.37	4,337.33
Add: Balance of Retained earnings brought forward from the previous year	1,633.67	1,418.42
Available retained earnings	6,668.04	5,755.75
Other Comprehensive Income	20.33	27.24
	6,688.37	5,782.99
Dividend Paid during the year	499.15	399.32
Transfer to General Reserve	4,500.00	3,750.00
Retained earnings carried forward to the next year	1,689.22	1,633.67

2. DIVIDEND

Your Directors have recommended a dividend of '' 1.20 (previous year '' 1.00) per equity share on 499,145,736 shares of '' 10 each aggregating '' 598.97 Million (previous year '' 499.15 Million). The Directors consider this appropriate having regard to the requirements for funds for business and future growth of the Company.

3. OPERATIONS

During the year under review, the sales increased from '' 30,314.02 Million in the previous year to '' 34,732.57 Million. Domestic sales turnover increased from '' 23,654.30 Million to '' 26,068.92 Million while the export turnover increased from '' 6,659.72 Million to '' 8,663.65 Million. After making provision for depreciation, interest and Tax, the Net profit during the year under report increased to '' 5,034.37 Million as against '' 4,337.33 Million in the previous year.

The year saw erratic monsoon in several regions of the country negatively impacting pesticides consumption. The year also saw large price increases and volatility for several raw materials, intermediates and other inputs. The Company was able to pass on most of the cost increases to the market.

4. ORDERS BY REGULATORY AUTHORITIES

In October 2022, the Central Government issued a Notification mandating that Glyphosate, a broad spectrum weedicide and an important product

for the Company, will be used only through Pest Control Operators. Industry players and associations filed petitions before the Hon''ble Delhi High Court ("Hon''ble Court") challenging the Notification. At the hearings of the petitions before the Hon''ble Court, the Government counsels stated that the Government will look into the difficulties being faced by the farmers and will revisit the matter and take a conscious decision which will be communicated to the Hon''ble Court. The counsels also stated that the Notification shall not be implemented until then. The next date of hearing is fixed for 19 July 2023.

The Central Government has issued an order in February 2023 banning three insecticides and prohibiting use of eight insecticides on some notified crops. The Company deals in some of these insecticides. The overall impact of the regulatory order, however, is not significant for the Company.

On 24 February 2023, an industrial accident took place in one of the manufacturing structures in the Company''s Bhavnagar site. In view of the same, on 03 March 2023, Gujarat Pollution Control Board ("GPCB") ordered closure of operations of the Bhavnagar site. On 18 March 2023, GPCB has passed an interim order revoking its Closure Order for three months, subject to fulfillment of certain conditions and requirements. The Bhavnagar site has since resumed manufacturing and other operations.

5. NEW PRODUCTS/IMPROVEMENTS/EXPANSIONS

In the year under review, your Company continued to pursue initiatives to optimise utilisation of its manufacturing facilities, launch new products and install manufacturing capacities to supply new products in domestic and international markets. During the year, the Company obtained from the regulatory authority registrations for several new products and launched them successfully to the channel partners and farmers. The Company continues to take initiatives for introducing new technical grade products and for expanding production capacities. Your Company continues its efforts in the area of product and process improvement for optimising process and manufacturing costs for staying innovative and competitive. Your Company also continues to focus on adopting energy conservation and innovative waste management process.

The Company continues to maintain ISO 9001, ISO 14001 and ISO 45001 certifications for the manufacturing sites. The quality of products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of the quality management systems. The Company continues to enjoy the reputation of a consistent and reliable quality supplier.

6. OUTLOOK

Agriculture sector is one of the important segments of Indian economy. It contributes about 18% to country''s GDP and provides source of livelihood to about 50% of the population. Share of agriculture in the country''s GDP has declined over the decades as manufacturing and service sectors have grown faster.

F.Y. 2022-23 was the first normal year of operations after two consecutive years of Covid-19 pandemic. All our activities were back to normal with employees working in full strength. However, due to geopolitical situations viz., Russia-Ukraine war, China Covid situation, depreciating local currency etc., the situation remained unpredictable for most part of the year. Further, uncertainties continued for major part of the financial year due to erratic monsoon. Logistics costs eased out during the course of the year. Southwest monsoon season rainfall for the country during June-September 2022 was normal (96-104% of Long Period Average). Though the monsoon of 2022 has been categorised as normal due to the quantum of rainfall received during the monsoon

period, the spread of rainfall was not conducive for the agricultural operations. Initial phase of monsoon was good, but was followed by a long dry spell and thereafter plenty of rains extending into October. Some parts of the country received very poor rainfall during the year. Agrochemical demand in export markets was robust and the industry capitalised on the same.

Due to restricted supply of material from China, the industry faced challenge of increasing raw material costs for several generics products. Further, increase in energy and fuel costs led to increase in overall costs exerting pressure on profitability. Despite all these odds, the Indian agrochemicals sector grew at a satisfactory rate. The raw material costs and prices of products started to ease from the second quarter of financial year.

The domestic agrochemicals market is driven by rising population, which spells the need for increasing food production. Increasing focus on quality produce continues to boost consumption of agrochemicals. Government of India has taken a number of initiatives to protect interest of farmers and improve their profitability. Providing minimum support prices for several agriculture produce, Kisan Samman Nidhi, large budgetary allocation for farming sector are some such initiatives. The Government has also extended the period for free supply of ration for the poor. These initiatives are expected to improve rural economy which in turn will help in the growth of agro-chemical industry. The commodity prices are robust and farmers are expected to continue to invest in agrochemicals to safeguard the harvest. Though there are conflicting reports and claims by different meteorology agencies regarding occurrence of El Nino phenomena and its impact on 2023 monsoon, the Indian Government is preparing district-level contingency plans to mitigate eventuality of abnormal monsoon effects. From a long term perspective, the agrochemical industry is expected to grow in a robust manner due to domestic demand and export opportunities.

7. SAFETY, HEALTH AND ENVIRONMENT

and its initiatives demonstrate its commitment towards comprehensive approach for safeguarding environment, health and safety of all stake holders and aims at achieving and sustaining high standards of performance. The Company also reviews and monitors these Quality, Environment, Health & Safety policies and sustainability activities to ensure continual improvement.

The Company''s commitment to its safety management programmes follows a top-down approach towards establishing, demonstrating, sustaining and improving the safety culture and incorporating the Company''s core value of safety in their daily responsibilities. Safety audit, training programmes and other safety management processes are carried out at regular intervals.

The Company has adopted plastic waste management process to minimise the amount of ''post-use plastic waste'' in the environment through a plastic credit platform dedicated to collection, segregation and recycling of such waste.

8. EDUCATION, LEARNING AND HUMAN RESOURCES

The endeavour is to develop and enhance competency of employees by facilitating holistic development that enables personal and organisational growth. Employees are encouraged to work in collaboration with different teams and functions to enhance their overall experience and exposure. The overall objective of these learning journeys for individuals and teams is to improve their capability and help them achieve their fullest potential. The Company conducts several functional capability-building training programmes

to upgrade employee-knowledge and ensure their holistic growth. In F.Y. 2022-23, around 90% of the employees have undergone these learning initiatives. The Company has built a robust framework focused around developing employees with right mind-set and skillset to enable them to excel in their work and keep on learning continuously. The employees get opportunity to board on any of the learning journeys based on their interest.

Some of the key training programmes the employees have undergone are:

â¢ Value-based capability building programmes where the focus is on enabling the employees to build the right mind-set and skillset to effectively demonstrate the right values at the workplace

â¢ Transition programmes for lower and middle level management cadre to build leadership capabilities for excelling in current and new roles

â¢ Leadership development programmes for emerging leaders

â¢ Training programmes in areas of EHS, SOP, IMS, Responsible Care, OJT etc.

â¢ Implementation of 5S at manufacturing sites Through these learning journeys, the employees develop a sound understanding of the overall business complexities as well as build competencies to lead high level organisational positions.

9. INSURANCE

10. SUBSIDIARY

Highlights of the financial performance of Excel Crop Care (Africa) Limited, Tanzania, the subsidiary company, are as follows:

Excel Crop Care (Africa) Limited, Tanzania

(Tanzania Schillings in Million)
	2022-23	2021-22
Revenue	198	757
Loss	310	81
Loss after Tax	230	71

Excel Crop Care (Africa) Limited, Tanzania has declared a dividend of Tanzania Schillings 20,000 per share i.e. 20% for the year F.Y. 2022-23.

The Financial Statements and the Reports of the Board of Directors and the Auditors of Excel Crop Care (Africa) Limited are posted on the Company''s website: www.sumichem.co.in.

11. DISCLOSURE UNDER THE COMPANIES ACT, 2013

a) Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

b) Annual Return:

Annual return as on 31 March 2022 in form MGT-7 filed with the Ministry of Corporate Affairs is available on the Company''s website https://sumichem.co.in/pdf/22-23/Annual%20 Return.pdf.

Annual return as on 31 March 2023 in form MGT-7 will also be posted on the Company''s website after the same is filed with the Ministry of Corporate Affairs.

c) Policy on Directors'' appointment, Remuneration Policy and information regarding remuneration:

d) Particulars of Loans, Guarantees and Investments:

The 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.

e) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis.

All related party transactions are placed before the Audit Committee for their approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a repetitive nature. The transactions entered into pursuant to the omnibus and specific approvals are reviewed periodically by the Audit Committee. Pursuant to the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the said Regulations"), all material related party transactions require approval of the members through a resolution. The said Regulations define the term ''material'' to mean a transaction with a related party which individually or taken together with previous transactions during a financial year exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statement of the Company.

During the year, the Company entered into transactions with Sumitomo Chemical Company, Limited, Japan, the holding company, which are considered ''material transactions'' in terms of the said Regulations. These transactions were approved by the shareholders by an ordinary resolution passed at the previous annual general meeting held on 29 July 2022. The Company is seeking approval of the shareholders, through an ordinary resolution at the ensuing annual general meeting, for the transactions entered into / proposed to be entered into with the holding company during the Financial Year 2023-24 up to an amount not exceeding '' 9,500 Million.

The Company had no transactions during F.Y. 2022-23 requiring disclosure in the Form AOC-2 under the Companies Act, 2013.

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website https://sumichem.co.in/ pdf/20220603121214.pdf?v=1.0.

f) Business Risk Management:

The Board has formed Risk Management Committee pursuant to the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to identify and monitor risks faced by the Company. The Committee deliberates on the major enterprise and business risks identified by the management, analysis of their impact and mitigation measures for addressing the risks. The major risk areas relate to risks associated with material procurement, and manufacturing operations, regulatory risks, cyber security / IT related risks, human resources related risks, currency risks, credit risks mainly relating to exports and insurance adequacy risks.

g) Evaluation of the performance of the Board, Committees of Directors and Individual Directors:

h) Material orders passed by the regulatory authorities or courts/material changes or commitments:

There are no significant material orders passed by regulators or courts which can impact the going concern status of the Company and its future operations. There are no material changes or commitments occurring after 31 March 2023 which may affect the financial position of the Company.

i) Internal Financial Controls and their adequacy:

j) Performance of the subsidiary company:

Details of performance and financial position of Excel Crop Care (Africa) Limited, the subsidiary company, are given in Form AOC-1 in Annexure III. The Company has no associate company.

k) Corporate Social Responsibility (CSR) initiatives:

The Company has formulated its Corporate Social Responsibility Policy which has been posted on its website https://sumichem.co.in/ pdf/Corporate%20Social%20Responsibility%20 Policy.pdf

A brief outline of the Policy and the Annual Report on CSR Activities is given in Annexure IV.

l) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure V.

m) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, M/s Saraf & Associates, Practicing Company Secretaries, Mumbai (FCS:1596; CP NO.642), were appointed Secretarial Auditors to conduct secretarial audit for the year ended 31 March 2023. The Report of the Secretarial Auditors is attached as Annexure VI.

n) Secretarial Standards:

The Company has complied with the applicable ''Secretarial Standards on Meetings of the Board of Directors - SS 1'' and ''Secretarial Standards on General Meetings - SS 2''.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr Hiroyoshi Mukai, Director, resigned on 31 March 2023. The Board places on record its appreciation of Mr Mukai''s contribution to the Company''s business and the Board deliberations.

Mr Masanori Uzawa, Director, retires by rotation and being eligible, offers himself for re-appointment.

Mr Pravin D Desai, Vice President & Company Secretary, retired on 31 March 2023. Ms Deepika Trivedi is appointed Company Secretary and Compliance Officer with effect from 01 April 2023. The Board has appointed Dr Suresh Ramachandran as Whole-time Director with effect from 01 June 2023

and designated him ''Whole-time Director & Chief Commercial Officer''. The appointment of Dr Suresh Ramachandran as Whole-time Director is subject to approval by the members in the annual general meeting through a special resolution.

The Board has reappointed Mr Chetan Shah as Managing Director and Mr Sushil Marfatia as Executive Director with effect from 01 September 2023 subject to approval by the members in the annual general meeting through special resolutions.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(d) they have prepared the annual accounts on a going concern basis;

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

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

14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report prepared in the prescribed form pursuant to

Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in relation to initiatives taken from environmental, social and governance perspective, forms part of the Annual Report.

15. CORPORATE GOVERNANCE

16. AUDITORS'' REPORTS

The Independent Auditors'' Reports on Financial Statements, including Consolidated Financial Statements, of the Company for the year ended 31 March 2023, issued by M/s SRBC & CO LLP, the Auditors, are enclosed with the Financial Statements in this Annual Report. The Independent Auditors'' Reports are unmodified and do not contain any qualification, reservation or adverse remark.

17. COST RECORDS AND COST AUDIT REPORT

The Company prepares and maintains cost records as specified by the Central Government under Section 148(1) and rules made thereunder. The cost records for the year 2021-22 were subjected to cost audit by M/s GMVP & Associates LLP Cost Auditors. The Cost Audit Report for the financial year 2021-22 issued on 09 August 2022 by the Cost Auditors was filed with the Ministry of Corporate Affairs on 05 September 2022 vide SRN: F23723729.

18. ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere

appreciation of the wholehearted co-operation

received from the Company''s Shareholders, Bankers, various authorities of the Governments and business associates.

For and on behalf of the Board of Directors

CHETAN SHAH SUSHIL MARFATIA

Managing Director Executive Director

DIN: 00488127 DIN: 07618601

Mar 31, 2022

Your Directors have pleasure in presenting the Twenty-Second Annual Report and the Audited Financial Statements of the Company for the year ended 31st March, 2022 .

1. FINANCIAL RESULTS

The salient features of the Company''s working are:		('' in Million)
	2021-22	2020-21
Gross Profit for the year	6,306.12	4,996 80
Less: Depreciation and amortization expense	447.92	465.56
Profit before tax	5,858.20	4,531. 24
Less: Tax expense (current and deferred tax)	1,520.87	1,078.27
Profit after tax	4,337.33	3,452.97
Add: Balance of Retained earnings brought forward from the previous year	1,418.42	977.09
Available retained earnings	5,755.75	4,430.06
Other Comprehensive Income	27.25	12.89
	5,783.00	4,442.95
Dividend Paid during the year	399.32	274 53
Transfer to General Reserve	3,750.00	2,750.00
Retained earnings carried forward to the next year	1,633.67	1,418.42

2. DIVIDEND

Your Directors have recommended a dividend of '' 1. 00 (previous year '' 0.80) per equity share on 499,145,736 shares of '' 10 each aggregating '' 499.15 million (previous year '' 399.32 million) . The Directors consider this appropriate having regard to the requirements for funds for business and future growth of the Company.

3. OPERATIONS

During the year under review, the sales increased from '' 26,210.17 million in the previous year to '' 30,347.85 million . Domestic sales turnover increased from '' 21,814.53 million to '' 23,654.30 million while the export turnover increased from '' 4,395.64 million to '' 6,693.55 million . After making provision for depreciation, interest and Tax, the Net profit during the year under report increased to '' 4,337.33 million as against '' 3,452.97 million in the previous year.

The year witnessed two waves of Covid-19 pandemic and restrictions imposed and safety precautions observed in its wake . Several Company employees across categories and locations, their family members and the Company''s business partners / their employees were infected by the virus in the second wave and some fatalities reported .

The year saw large price increases and volatility for several raw materials, intermediates and other inputs . The industry was able to pass cost increases to the market. The year also witnessed disruption of logistics for international cargo movements leading to delayed shipment of imports and exports .

Covid-19 induced restrictions gave impetus to the Company''s digital marketing initiatives . The Company sees this as parallel to the traditional marketing practices followed by the industry. The Company engages digitally with over 17 million farmers .

4. NEW PRODUCTS/IMPROVEMENTS/EXPANSIONS

In the year under review, your Company continued to pursue initiatives to optimize utilization of its manufacturing facilities and also expand manufacturing capacities to meet increasing demand . During the year, your Company expanded manufacturing capacity for one of its technical grade products . The Company has completed feasibility study for introducing three new technical grade products . The Company continues to take initiatives for introducing new technical grade products and expanding production capacities

Your Company continues its efforts in the area of product and process improvement for optimizing process and manufacturing costs for staying innovative and competitive . Your Company also continues to focus on adopting energy conservation and innovative waste management process .

The Company continues to maintain ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certifications for the manufacturing sites . The quality of products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of the quality management systems . The Company continues to enjoy the reputation of a consistent and reliable quality supplier.

5. OUTLOOK

Agriculture sector is one of the important segments of Indian economy. It contributes about 18% to country''s GDP and provides source of livelihood to a large section of the population . Share of agriculture in the country''s GDP has declined over the decades as manufacturing and service sectors have grown faster.

Due to outbreak of the second and the third wave of Covid-19 in the financial year 2021-22, the agrochemicals industry witnessed situation somewhat similar to the first-half of 2020-21 like lockdowns, restrictions on people movements, logistics and transportation challenges, increase in cost of raw materials, etc .

Southwest monsoon season rainfall for the country during June-September 2021 was normal (96-104% of Long Period Average), though the states of Madhya Pradesh, Gujarat and Rajasthan faced long dry spell during sowing season and suffered flood situation post-sowing along with the states of Uttar Pradesh, Bihar and West Bengal. West Bengal, Odisha, Tamil Nadu, Andhra Pradesh, Telangana and Karnataka received cyclonic rains which damaged standing crops .

Due to restricted material supplies from China, the industry faced challenge of increasing raw material costs for several generic products . Further, increase in energy and fuel costs led to increase in overall costs exerting pressure on profitability. Despite all the odds, the Indian agrochemicals sector grew at a satisfactory rate as the agricultural activities remained largely unaffected by Covid-19 .

The domestic agrochemicals market is driven by rising population, which spells the need for increasing food production which continues to boost consumption of agrochemical products .

The agrochemicals industry has been fairly buoyant led by normal monsoons and remunerative prices, all of which has resulted in an acceleration in agricultural activities . The industry is expected to grow at a higher rate in the coming years . The Indian Meteorological Department and other similar agencies have predicted normal monsoon in 2022 . Considering this and the initiatives taken by the Government of India for farmers and farming, positive changes in domestic and export policies coupled with global market situation, the overall outlook for the Indian agrochemical industry remains positive .

6. SAFETY, HEALTH AND ENVIRONMENT

The Company continues to play the role of a responsible corporate citizen in the fulfillment of its objectives of protecting and enriching the environment and human health and safety. In the Covid-19 situation which prevailed during the year under review, the Company continued to follow the recommended measures and protocols to safeguard health of its personnel (including contract and contractors'' employees) and other people and stakeholders connected with its operations .

Company continues to hold and maintain ISO 9001:2015, ISO14001:2015 and ISO 45001:2018 certifications which help in continuous improvement in the field of safety, health and environment. Safety audit, training programs and other safety management processes and programs are carried out at regular intervals .

The green initiatives of the Company in the form of harvesting wind and solar energy and treatment of sewage water contribute to improving environment

The Company makes positive contribution to the society by working for reduction of greenhouse gases and creates sustainable economic and social values . This initiative is being implemented through âScience Based Targets'' .

7. EDUCATION, LEARNING AND HUMAN RESOURCES

Your Company continues to invest in development and growth of human resource through learning and development which helps in growth of the organization and also increases job satisfaction and employee morale . There is a focused approach to address capability, skill and competency gaps and groom high-performing and high-potential employees through specially devised Career Planning Process .

Your Company endeavours to address needs for skill and competency improvement, skill-flexibility and multi skill through training programs focussing on EHS, compliances, Responsible Care, ISO/SOP supervisory development, engineering for non-engineers, maintenance management programs, sales excellence programs, leadership excellence, product knowledge training, positive attitude and change management etc . Employees are encouraged to participate in management development programs and conferences High-potential employees are given project-specific assignments to enhance their leadership and other skills . Your Company also continues to educate farmers with the latest technology and new products .

8. INSURANCE

The Company continues to carry adequate insurance cover for all its assets against foreseeable perils like fire, flood, earthquake, etc . and continues to maintain the Liability Policy as per the provisions of the Public Liability Insurance Act.

Highlights of the financial performance of Excel Crop Care (Africa) Limited, Tanzania, the subsidiary company, are as follows:

9. SUBSIDIARIES

Excel Crop Care (Africa) Limited, Tanzania	(Tanzania Schillings in million)
	2021-22	2020-21
Revenue	773	2,433
(Loss) / Profit before Tax	(81)	314
(Loss) / Profit after Tax	(71)	202

Excel Crop Care (Africa) Limited, Tanzania has declared a dividend of Tanzania Schillings 25,000 per share i. e . 25% for the year 2021-22 .

The Financial Statements and the Reports of the Board of Directors and the Auditors of Excel Crop Care (Africa) Limited are posted on the Company''s website: www. sumichem . co. in .

Excel Crop Care (Europe) NV, the Company''s subsidiary in Belgium, was voluntarily wound up during the year under review . This subsidiary did not have significant business, commercial activities, sales turnover and profits for several years . Its winding up is not likely to impact the business, commercial activities, financial position and financial statements of the Company and the group in any material manner . During the year 2021-22, Excel Crop Care (Europe) NV, Belgium, distributed intermediary dividend of 1600% aggregating Euro 1,008,000 out of its past retained profits .

10. DISCLOSURE UNDER THE COMPANIES ACT, 2013

a) Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

b) Annual Return:

Annual return as on 31st March, 2021 in form MGT-7 filed with the Ministry of Corporate Affairs is available on the Company''s website www.sumichem . co . in

Annual return as on 31st March, 2022 in form MGT-7 will also be posted on the Company''s website after the same is filed with the Ministry of Corporate Affairs .

c) Policy on Directorsâ appointment, Remuneration Policy and information regarding remuneration:

d) Particulars of Loans, Guarantees and Investments:

The 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 .

e) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis .

Pursuant to the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the said Regulationsâ), all material related party transactions require approval of the members through a resolution . The said Regulations define the term âmaterial'' to mean a transaction with a related party which individually or taken together with previous transactions during a financial year exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statement of the Company.

During the year, the Company entered into transactions with Sumitomo Chemical Company, Limited, Japan, the holding company, which are considered âmaterial transactions'' in terms of the said Regulations These transactions were approved by the shareholders by an ordinary resolution passed at the previous annual general meeting held on 30th July, 2021

The Company is seeking approval of the shareholders, through an ordinary resolution at the ensuing annual general meeting, for the transactions entered into / proposed to be entered into with the holding company during the Financial Year 2022-23 up to an amount not exceeding '' 9,000 million .

The Company had no transactions during F .Y. 2021-22 requiring disclosure in the Form AOC-2 under the Companies Act, 2013 .

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website www . sumichem . co . in

f) Business Risk Management:

The Committee deliberates on the major enterprise and business risks identified by the management, analysis of their impact and mitigation measures for addressing the risks . The major risk areas relate to risks associated with material procurement, and manufacturing operations, regulatory risks, cyber security / IT related risks, human resources related risks, currency risks, credit risks mainly relating to exports and insurance adequacy risks .

g) Evaluation of the performance of the Board, Committees of Directors and Individual Directors:

The Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including performance of the Chairman of the Board . As a part of this mechanism, a structured questionnaire, approved by the Company''s Nomination and Remuneration Committee, is used to carry out evaluation of performance of the Board, Committees of Directors and individual Directors . The questionnaires take into consideration various criteria and factors .

h) Material orders passed by the regulatory authorities or courts/material changes or commitments:

There are no significant material orders passed by regulators or courts which can impact the going concern status of the Company and its future operations . There are no material changes or commitments occurring after 31st March, 2022 which may affect the financial position of the Company.

i) Internal Financial Controls and their adequacy:

The Company has adequate system of internal controls to safeguard and protect from loss, unauthorised use or disposition of its assets All the transactions are properly authorised, recorded and reported to the management The Company is following all the applicable Accounting Standards for proper maintenance of books of accounts and for financial reporting

j) Performance of Subsidiaries:

Details of performance and financial position of the subsidiaries are given in Form AOC-1 in Annexure III . The Company has no associate company

k) Corporate Social Responsibility (CSR) initiatives:

The Company has formulated its Corporate Social Responsibility Policy which has been posted on its website www . sumichem . co . in

A brief outline of the Policy and the Annual Report on CSR Activities is given in Annexure IV.

l) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure V .

m) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, M/s . Saraf & Associates, Practicing Company Secretaries, Mumbai (FCS:1596; CP NO. 642), were appointed Secretarial Auditors to conduct secretarial audit for the year ended 31st March, 2022 . The Report of the Secretarial Auditors is attached as Annexure VI

n) Secretarial Standards:

The Company has complied with the applicable âSecretarial Standards on Meetings of the Board of Directors - SS 1'' and âSecretarial Standards on General Meetings - SS 2''.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Hiroyoshi Mukai and Mr. Ninad D . Gupte, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

12. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(d) they have prepared the annual accounts on a going concern basis;

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

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively

13. BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report prepared in the prescribed form pursuant to Regulation 24 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in relation to initiatives taken from environmental, social and governance perspective, forms part of the Annual Report and is given in Annexure VII .

14. CORPORATE GOVERNANCE

15. COST AUDIT REPORT

The Cost Audit Report of M/s . Kishore Bhatia & Associates, Cost Auditors, for the financial year 2020-21, which was required to be filed with the Ministry of Corporate Affairs on or before 30th November, 2021 was filed on 22nd September, 2021 vide SRN: T45726684.

16. ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors

CHETAN SHAH SUSHIL MARFATIA

Managing Director Executive Director

DIN: 00488127 DIN: 07618601

Mumbai, 27th May, 2022

Mar 31, 2021

Your Directors have pleasure in presenting the Twenty-First Annual Report and the Audited Financial Statements of the Company for the year ended 31st March, 2021.

1. FINANCIAL RESULTS

The salient features of the Company''s working are:		('' in Million)
	2020-21	2019-20
Gross Profit for the year	4,996.80	3,082 04
Less: Depreciation and amortization expense	465.56	409.23
Profit before tax	4,531.24	2,672.81
Less: Tax expense (current and deferred tax)	1,078.27	616.55
Profit after tax	3,452.97	2,056.26
Add: Balance of Retained earnings brought forward from the previous year	977.09	2,493 24
Available retained earnings	4,430.06	4,549.50
Other Comprehensive Income	12.89	(60. 19)
	4,442.95	4,489.31
Dividend Paid during the year	274.53	215.28
Tax on Dividend	-	46 94
Transfer to General Reserve	2,750.00	3,250.00
Retained earnings carried forward to the next year	1,418.42	977.09

2. DIVIDEND

Your Directors have recommended a dividend of '' 0.80 (previous year '' 0.55) per equity share on 499,145,736 shares of ''10 each aggregating '' 399.32 million (previous year '' 274.53 million) . The Directors consider this appropriate having regard to the requirements for funds for business and future growth of the Company.

3. OPERATIONS

During the year under review, the sales increased from '' 23,898.24 million in the previous year to '' 26,210.17 million . Domestic sales turnover increased to '' 21,814.53 million from '' 19,231. 05 million in the previous year. Export turnover decreased from '' 4,667.19 million in the previous year to '' 4,395.64 million in the year under review. The reduction in export sales was mainly due to improved demand and attractive price realization in the domestic market as also the challenges in production and logistics posed by the pandemic and restrictions imposed in its wake in the first few months in 2020-21. After making provision for depreciation, interest and Tax, the Net profit during the year under report amounts to '' 3,452.97 million as against '' 2,056.26 million in the previous year.

4. COVID - 19

In the first half of the financial year 2020-21, Covid-19 pandemic caused severe impact globally and in India . India announced country-wide strict lock-down in the last week of March, 2020. The unlocking process was undertaken in a gradual manner in the next few months . Though the Company''s operations were classified as âessential'', the Company had to operate under the lock-down guidelines . Due to the Company''s emphasis on safety and due to several difficulties faced at operational level, the Company''s manufacturing operations were impacted initially. The Company put in the best possible efforts to minimize

the negative impact on the operations . Overall production in the financial year 2020-21 is marginally lower due to safety precautions taken in line with restrictions imposed on account of Covid-19 . The level of operations improved gradually over the period during the financial year. The demand side factors remained largely positive during the year. By the second half of the year, all the functions, including sales and distribution, procurement, supply chain, logistics and corporate functions, became near-normal duly following safety guidelines and without any material adverse impact.

Unfortunately, the financial year 2021-22 has begun with outbreak of second wave of Covid-19 which engulfed almost the entire country in the first two months of the year. Covid-19 and its several variants, including B . 1. 617 (double mutant variant first identified in India), are turning out more contagious, spreading faster and leading to medical emergencies and casualties . Unfortunately, unlike the first wave of Covid-19 last year, the second wave has spread to rural and semi-rural areas in addition to large cities and towns . Several Company employees across categories and locations, their family members and the Company''s business partners / their employees were infected by the virus and some fatalities reported . Various state governments have imposed lockdown-like restrictions to restrict spread of the virus . These restrictions have adversely impacted economic and commercial activities in the country. The Company''s manufacturing operations, though categorized as âessential'', have also been impacted, but not materially. In view of virus spread in rural and semi-rural areas close to the upcoming monsoon season from June, which is one of the key factors for the industry, one has to watch out for its overall impact on the industry and the Company in the next few days, though at present the impact for Company is not material . The Company continues to make efforts to minimise adverse impact on its operations and performance .

5. DIGITAL TRANSFORMATION - INTEGRATED SAP S4 HANA

During the financial year 2020-21, as a part of the initiatives for digital transformation, the Company started and completed integration of different legacy SAP versions in use . Accordingly, effective 2021-22, all the operations of the Company across all locations in the country have migrated to the newly configured latest version of SAP SH4 HANA, including its various advanced modules . The integrated system is expected to facilitate seamless operations, smooth realigned processes and integrated reporting and information management system . In view of changing technological landscape across the globe and the industry and to be future-ready technologically, the Company plans to continue the digital transformation journey during the financial year 2021-22 by implementing additional modules including SAP Integrated Business Planning, SAP Advanced Analytics Cloud, Integrated PMS modules, Spend Management modules and dealer portal .

6. NEW PRODUCTS/IMPROVEMENTS/EXPANSIONS

In the year under review, your Company continued to pursue initiatives to optimize utilization of its manufacturing facilities and also expand manufacturing capacities to meet demand . During the year, your Company expanded manufacturing capacities for its one technical grade product, introduced a new formulation product and commercialized one new formulated product.

Your Company continues its efforts in the area of product and process improvement for enhancing yields and reducing manufacturing costs for staying innovative and competitive . Your Company also continues to focus on reducing effluent load and adopting innovative effluent treatment processes as well as on energy conservation and energy cost reduction .

The Company continues to maintain IS0:9001:2015, ISO14001:2015 and OHSAS18001:2007 certifications for the manufacturing sites at Bhavnagar, Gajod and Silvassa for continual improvement in quality, health, safety and environment . The Company''s Tarapur and Vapi plants hold IS0:9001:2015, IS014001:2015 and ISO 45001:2018 certifications . The quality of products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of the quality management systems . The Company continues to enjoy the reputation of a consistent and reliable quality supplier.

7. OUTLOOK

Though the International Monetary Fund raised growth forecast for India to 12.5%, resurgent Covid-19 spread threatens to undermine the country''s economic recovery. Various measures of the Government under Make in India and other initiatives have begun to show positive results . Use of agrochemicals, including pest-control products, continues to grow . India is the second biggest consumer of agrochemical products in the world after China .

Due to outbreak of the second wave of Covid-19, in the financial year 2021-22, the Industry is likely to witness situation similar to the first-half of preceding financial year like lockdown, restrictions on people movements and economic activities, logistics issues, increase in cost of raw materials, transportation and inputs, at least for a few months . In 2020-21, despite all the odds, the agrochemicals sector grew and agricultural activities remained largely unaffected . The Company''s business and products fall under âessential commodities'' hence it expects to produce and deliver products and services to the market and the farmers without material interruption . Last year, the Industry was able to pass on the cost increases to the market.

In spite of the pandemic, which is likely to affect the normal life for at least few months, domestic demand for agrochemicals is expected to remain elevated with favourable agronomical conditions in Agriculture sector like normal monsoon forecast by Indian Meteorological Department, good farm-production in the previous year, and good output prices which will translate in to increase in area under-cultivation for crops like cotton, soybean, paddy and groundnut, which are major agrochemicals consuming crops

Your Company''s efforts in devising and implementing business growth strategies and improving productivity across the resources and assets, and presence of strong product brands should serve it well in the times to come . With new product launches planned for the year and for the future years, regular revenue growth is expected to continue in the coming years

During the year, the Central Government has issued a notification expressing its intention that Glyphosate, a weedicide and an important product for the Company, will be allowed to be used only through âpest control operators'' . The Company, other industry players and the industry associations have filed appeals before the appellate authority against the proposal as the proposal is not feasible and not implementable owing to ground realities . Hearing in the matter is pending . The proposal, if implemented, will have impact only on domestic use of Glyphosate . It will not impact exports .

8. SAFETY, HEALTH AND ENVIRONMENT

The Company continues to play the role of a responsible corporate citizen in the fulfillment of its aims of protecting and enriching the environment and human health and safety. In the Covid-19 situation the Company followed and adopted recommended measures and protocols to safeguard health of its personnel (including contract and contractors'' employees) and other people and stakeholders connected with its operations .

The Company has adopted Responsible Care Policy and its initiatives demonstrate its commitment towards comprehensive environment, health and safety of all stake holders and aims at achieving and sustaining high standards of performance . The Company continues to hold and maintain ISO-14001:2015 and OHSAS18001:2007 certifications which help in continuous improvement in the field of safety, health and environment . Safety audit, training programmes and other safety management processes and programmes are carried out at regular intervals .

The Company has also decided to make positive contribution to the society by working for reduction of greenhouse gases and create sustainable economic and social values . This initiative is being implemented through âScience Based Targets'' under the guidance of the parent company

9. EDUCATION, LEARNING AND HUMAN RESOURCES

Learning and development is one of the top priorities for the Company. The Company focuses on enhancing knowledge, skills and capabilities at all levels, strengthening the leadership talent, effective succession planning and fostering employee engagement

Your Company has taken systematic and detailed development initiatives to build right skills and competencies as well as reskilling of its existing and new employees to meet the present and future needs of its business . Your Company endeavors to ensure that it has requisite competencies to meet the new challenges in the ever changing business environment.

The employee relations in the Company continued to remain healthy, cordial and progressive in the year under review . Your Directors wish to record their appreciation of the continued support, efforts and cooperation of the employees at all levels especially their contribution in the face of Covid-19 pandemic and restrictions imposed on movement of people and materials

Your Company is making continuous and intensive efforts to educate farmers with various aspects of farming, latest technology and also ensuring to educate the efficient use of crop protection chemicals for improving/ increasing crop productivity.

10. INSURANCE

The Company continues to carry adequate insurance cover for all its assets against foreseeable perils like fire, flood, earthquake, etc . and continues to maintain the Liability Policy as per the provisions of the Public Liability Insurance Act.

11. SUBSIDIARIES

Highlights of the financial performance of Excel Crop Care (Africa) Limited, Tanzania and Excel Crop Care (Europe) NV, Belgium, the subsidiary companies, are as follows:

Excel Crop Care (Africa) Limited, Tanzania

	(Tanzania Schillings in million)
	2020-21	2019-20
Revenue	2,433	2,571
Profit before Tax	314	138
Profit after Tax	202	78
Excel Crop Care (Europe) NV, Belgium		(Euros in thousand)
	2020-21	2019-20
Operating Loss	98	99
Loss	111	101

Excel Crop Care (Africa) Limited, Tanzania has declared a dividend of Tanzania Schillings 100,000 per share i . e . 100% for the year 2020-21.

Excel Crop Care (Europe) NV, Belgium, did not have sales turnover during FY 2020-21. During the year 2020-21, Excel Crop Care (Europe) NV, Belgium, distributed intermediary dividend aggregating Euro 31,500 at the rate of Euro 315 per share i. e 50% . The intermediary dividend was paid out of past retained profits .

The Financial Statements and the Reports of the Board of Directors and the Auditors of the Company''s subsidiaries are posted on the Company''s website: www. sumichem . co . in .

12. DISCLOSURE UNDER THE COMPANIES ACT, 2013

a) Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

b) Annual Return:

Annual return as on 31st March, 2020 in form MGT-7 filed with the Ministry of Corporate Affairs is available on the Company''s website www.sumichem . co . in

Annual return as on 31st March, 2021 in form MGT-7 will also be posted on the Company''s website after the same is filed with the Ministry of Corporate Affairs .

c) Policy on Directorsâ appointment, Remuneration Policy and information regarding remuneration:

d) Particulars of Loans, Guarantees and Investments:

The 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 .

e) Related Party Transactions:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm''s length basis .

At the annual general meeting held on 27th December, 2019, the shareholders have given approval, by an Ordinary Resolution passed pursuant to the provisions of Regulation 23 of the Regulations, for the Company''s transactions with its holding company entered into during the Financial Year 2020-21.

The Company is seeking approval of the shareholders through an Ordinary Resolution at the ensuing annual general meeting for the transactions entered into / proposed to be entered into with the holding company during the Financial Year 2021-22 up to an amount not exceeding '' 7,000 million .

The Company had no transactions during F .Y. 2020-21 requiring disclosure in the Form AOC-2 under the Companies Act, 2013 .

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website www . sumichem . co . in

f) Business Risk Management:

During the financial year, the Board has formed Risk Management Committee pursuant to the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to identify and monitor risks faced by the Company

The Committee deliberated on the major enterprise and business risks identified by the management, analysis of their impact and mitigation measures for addressing the risks . The major risk areas relate to risks associated with material procurement, and manufacturing operations, regulatory risks, cyber security / IT related risks, human resources related risks, currency risks, credit risks mainly relating to exports and insurance adequacy risks .

g) Evaluation of the performance of the Board, Committees of Directors and Individual Directors:

The Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including performance of the Chairman of the Board As a part of this mechanism, a structured questionnaire, which has been approved by the Company''s Nomination and Remuneration Committee, is used to carry out evaluation of performance of the Board, Committees of Directors and individual Directors . The questionnaires take into consideration various criteria and factors .

h) Material orders passed by the regulatory authorities or courts/material changes or commitments:

On 21st June, 2019, Gujarat Pollution Control Board (âGPCBâ) issued a notice to Excel Crop Care Limited (ECCL), which amalgamated with the Company in FY 2019-20, instructing it to close manufacturing operations of its Bhavnagar Plant . The notice was caused as GPCB had found waste which was associated to a product which had been discontinued over 20 years back. ECCL submitted an action plan to GPCB for scientific disposal of waste and agreed to undertake other remedial measures . Based on the action taken by ECCL and the Company, in January, 2021, GPCB has withdrawn its Closure Order.

i) Internal Financial Controls and their adequacy:

The Company has adequate system of internal controls to safeguard and protect from loss, unauthorised use or disposition of its assets . All the transactions are properly authorised, recorded and reported to the management . The Company is following all the applicable Accounting Standards for proper maintenance of books of accounts and for financial reporting .

j) Performance of Subsidiaries:

Details of performance and financial position of the Subsidiaries are given in Form AOC-1 in Annexure III . The Company has no associate company

k) Corporate Social Responsibility (CSR) initiatives:

The Company has formulated its Corporate Social Responsibility Policy which has been posted on its website www . sumichem . co . in

A brief outline of the Policy and the Annual Report on CSR Activities is given in Annexure IV.

l) Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure V .

m) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, Mr . Prashant Diwan, Practicing Company Secretary (FCS:1403; CP NO. 1979), Mumbai, was appointed Secretarial Auditor to conduct secretarial audit for the year ended 31st March, 2021. The Report of the Secretarial Auditor is attached as Annexure VI.

As regards the compliance matter pointed out in the Secretarial Audit Report, it may be noted that the affirmation to the effect that âthe director appointed is not debarred or disqualified from holding directorship by SEBI, MCA or any such other authority'' was missed out inadvertently in the intimation letter sent to the stock exchanges .

n) Secretarial Standards:

The Company has complied with the applicable âSecretarial Standards on Meetings of the Board of Directors - SS 1'' and âSecretarial Standards on General Meetings - SS 2''.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board appointed Mr . Masanori Uzawa as Additional Non-Executive Non Independent Director at its meeting held on 10th July, 2020 . At the annual general meeting held on 10th September, 2020, the members have appointed Mr. Masanori Uzawa as a Director whose office is liable to retire by rotation .

Mr. Sushil Marfatia and Mr. Tadashi Katayama, Directors, retire by rotation and being eligible, offer themselves for re-appointment

14. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(d) they have prepared the annual accounts on a going concern basis;

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

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively

15. BUSINESS RESPONSIBILITY REPORT

16. CORPORATE GOVERNANCE

17. SHAREHOLDING OF PROMOTERS AND PROMOTER GROUP

Sumitomo Chemical Company, Limited, the holding company and its Japan based subsidiary, were holding about 80.3% of the share capital of the Company. During the year, the holding company sold about 5.3% of the share capital pursuant to the requirements of Securities Contracts (Regulation) Rules, 1957, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and circulars issued thereunder . The sale of shares was undertaken through âoffer for sale'' process through the stock exchanges . The shareholding of the promoters and the promoter group now stands at 75% of the Company''s share capital ensuring 25% shareholding by public .

18. COST AUDIT REPORT

The Cost Audit Report of M/s . Kishore Bhatia & Associates, Cost Auditors, for the financial year 2019-20, which was required to be filed with the Ministry of Corporate Affairs on or before 31st December, 2020 was filed on 29th June, 2020 vide SRN: R43725811.

19. ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors

CHETAN SHAH SUSHIL MARFATIA

Managing Director Executive Director

DIN: 00488127 DIN: 07618601

Mumbai, 28th May, 2021

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