Bal Pharma Ltd Directors Report.

Your Directors are pleased to present the Thirty Fourth (34th) Annual Report and the Audited Financial Statements of the Company, for the financial year ended 31.03.2021.

FINANCIAL SUMMARY/ REVIEW OF OPERATIONS/STATE OF COMPANYS AFFAIRS

Following is the analysis of the standalone financial statements of the Company during the year under review:

(in Rs. Crores)

Particulars F.Y 2020-2021 F.Y 2019-2020
Total income from operations 252.00 174.30
Profit from operations before interest, other income and exceptional items 9.79 (9.07)
Tax Expense 0.69 (0.17)
Finance Cost 11.95 12.55
Profit after tax 9.09 (8.90)
Total Comprehensive Income 9.18 (9.20)
Earnings per share (In Rs) Basic and Diluted 6.41 (6.28)

The financial year 2020-21 was a year of robust performance by the Company. During the year, the revenue from operations recorded a growth of 44% in comparison to the revenue from the previous financial year 2019-2020. Consequently, the Profit after Tax (PAT) also recorded an increase of more than 200%.

Highlights of the Companys performance are covered in detail in the Management Discussion and Analysis Report (MDA), included in this Annual Report as required under Schedule V of SEBI (LODR) Regulations, 2015.

DIVIDEND

The Board of Directors is pleased to recommend a Dividend of Re.1 /- per Equity Share of Rs.10/- each, i.e 10% of the Equity Share Capital of the Company thereby appropriating an amount of Rs.1.48 Crores towards Dividend for the F.Y 2020-21

UNCLAIMED DIVIDEND

In terms of Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) provides that the dividend that has remained unclaimed or unpaid for a period of seven years to be transferred to Investor Education and Protection Fund (IEPF). Further, the Rules mandate that the shares on which dividend has not been paid or claimed for seven consecutive years or more shall also be transferred to the IEPF.

During the year under review, the Company has transferred 97,284 Equity Shares of the shareholders, whose dividend is outstanding for 7 consecutive years and an amount of Rs 1,94,573 to the IEPF suspense account as per the Investor Education and Protection Fund Authority (Accounting,Audit,Transfer and Refund) Rules, 2016.

Shareholders holding shares in physical form are advised to encash their Dividend on time to avoid transfer of their shares to IEPF account.

TRANSFERTO RESERVE

The Company does not propose to transfer any amount to general reserves.

SHARE CAPITAL

With the allotment of 6,50,000 Equity Shares upon conversion of warrants, during the year under review the paid up capital of the Company has risen to Rs.14,82,23,720/- comprising of 1,48,22,372 Equity Shares of Rs.10 each.

CONSOLIDATED FINANCIAL STATEMENTS

The Annual consolidated financial statements together with the Auditors Reports is annexed along with standalone financial statements for the financial year ended 31.03.2021.

NEW PROJECTS / EXPANSION

The Company plans in advance on any future infrastructure requirements, growth opportunities and continuously strives hard to invest on the same. During the financial year under review, the Company has spent Rs. 285.23 Lakhs towards capital expenditure.

AUDITORS AND AUDITORS REPORT

a) Statutory Auditors:

Messrs NSVM & Associates, Chartered Accountants (FRN # 010072S) were appointed as Statutory Auditors of the Company from the conclusion of 30th Annual General Meeting held on 22.09.2017 up to the conclusion of 35th Annual General Meeting i.e for a period of 5 years.

Pursuant to the amendment to Section 139 of the Act effective from 7th May 2018, ratification by Shareholders every year for the appointment of the Statutory Auditors is no longer required and accordingly, the notice of ensuing Annual General meeting does not include the proposal for seeking shareholders approval for ratification of Statutory Auditors appointment.

In terms of the Listing Regulations, the auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

There are no observations, qualifications or adverse remarks by the Statutory Auditors in their report, issued for the financial year 20202021.

b. Cost Auditors:

As required by the provisions of Section 148 of the Companies Act,2013, Mr. M.R Krishna Murthy, Cost Accountant,(FCMA # 7568) was reappointed as the Cost Auditor of the Company for the financial year 2021-22, to conduct cost audit of the cost records maintained by the Company.

CostAudit Report for the FY 2019- 2020 has been filed with the Ministry of Corporate Affairs on 06/01/2021.

c. Secretarial Auditor:

Pursuant to Section 204 of the Companies Act,2013 and rules made thereunder and in compliance with Regulation 24A of SEBI (LODR) Regulations, Mr. Parameshwar G Bhat, Practising Company Secretary (CP # 11004) was appointed by the Board of Directors as the Secretarial Auditor of the Company for the financial year 20202021.

Secretarial Audit Report for the F.Y 2020-21 in Form MR-3 is annexed to this report as Annexure -1. No comments or remarks were made by the Auditor in his report for the F.Y 2020-21.

d. Internal Auditors:

Messrs Murugesh & Co, Chartered Accountant (M # 002233S) were appointed as the Internal Auditors of the Company for the F.Y 2020-21 and the internal audit reports issued by them were periodically reviewed by the Audit Committee and the management of the Company is appraised about the observations of the internal auditor and on corrective actions, if any, that needs to be taken.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the functional heads of the Company will submit its periodical report to the Board of Directors on the measures to be taken for mitigation of potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is designed to enable risks to be identified, assessed and mitigated appropriately, is available on the website of the Company https:// www.balpharma.com/pdf/finance/i rl/Risk%20Management%20Policypdf

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Companys assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management principles. These policies are periodically reviewed to meet business requirements. The Company has in place adequate internal financial controls with respect to financial statements.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors wish to confirm:

- That in preparing the annual accounts, all the applicable accounting standards had been followed along with proper explanation relating to material departures.

- That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial year and of the profit and loss of the Company for that period.

- That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the Company and for preventing / detecting fraud and other irregularities.

- That the Directors had prepared the annual accounts on a going concern basis.

- That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

- That the Company had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTYTRANSACTIONS (RPTs)

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and at arms length basis and the same were undertaken after prior omnibus approval of the Audit Committee.

During the year, the Company has not entered into any contract/arrangement/transaction with the related parties that could be considered as material, as per the policy of the Company on materiality of related party transactions.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large.

The Companys policy on the related party transactions as approved by the Board can be assessed from the website i.e http://www.balpharma.com/pdf/finance/irl/Policy%20on%20Dealing%2 0with%20Related%20Party%20Transaction.pdf.

Details of disclosure relating to the related party transactions under Section 188 of the Companies Act, 2013, form part of the notes to the financial statements provided in this annual report.

Since all the transactions with related parties were in the ordinary course of business and at arms length, and there were no material related party transactions, the statement in Form AOC-2, is not annexed to this report.

All the RPTs undertaken during the financial year are disclosed in the notes to the financial statements. For Further Details, your attention is drawn to the Related Party disclosures set out in Note No. 60 of the Standalone Financial Statements.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, the following Companies continued to be the subsidiaries of Bal Pharma Ltd.A report on the financial performance of each of the subsidiaries as per section 129(3) of the Companies Act, 2013 in the prescribed format AOC-1 is provided in Annexure- 2 to the Boards Report and hence not repeated here, for the sake of brevity:-

Sl Name of the No Company/LLP Nature of Business % of stake with Bal Pharma, as on 31.03.2021
1 Lifezen Healthcare Private Limited. Marketing of OTC products. 99.40%
2 Bal Research Foundation Research and Development. 80%
3 Balance Clinics LLP. Diabetic care clinics. 80%
4 Golden Drugs Private Limited. Manufacturing of APIs 100%

SECRETARIAL STANDARDS

Secretarial Standards i.e SS1 & SS2 issued by the Institute of Company Secretaries of India(ICSI) relating to the Meetings of Board of directors and General Meetings, respectively have been duly followed by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPS)

Dr. Subbarao Prasanna, who was with the Company for a very long period of time as promoter and Executive Director of the Company passed away on 04th May,2021 due to ill health. The Board of Directors of the Company places on record its sincere appreciation and gratitude for the services rendered by Dr. Subbarao Prasanna during his tenure.

Mr. Jatish Sheth (DIN # 00581963) was appointed as an Additional Director on the Board of the Company w.e.f 28.12.2020 by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee of the Company.

Your Board seeks the approval of the Members for Mr. Sheths appointment, as Independent Director of the Company at the ensuing Annual General Meeting.

Resolutions for aforementioned appointments along with brief profile of the Directors proposed to be appointed, form part of the Notice of the AGM and the resolutions are recommended for Shareholders approval. Mr. Shailesh Siroya (DIN #00048109) Managing Director,

Mr. Virupakshaya Himesh (DIN # 08554422) Whole Time Director, Mr. Rengarajan Gopalakrishnan, Chief Financial Officer and Mrs. Preeti Singh, Company Secretary are the Key Managerial Personnel of the Company as on the date of this report.

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013.

The Independent Directors have also confirmed under Regulation 16(b) of SEBI (LODR) Regulations, 2015 that they are not Non-Independent Director of another Company on the Board of which any nonindependent Director of the listed entity is an independent Director.

The Company has devised a policy for familiarization of Independent Directors on their roles, rights, responsibilities with the Company and the said policy is available on our website.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the Board, Committees and Individual Directors. The evaluation process among others considers attendance of Directors at the Board and Committee Meetings, acquaintance with business, communication within the Board members, effective participation, domain knowledge, compliance with the internal code of conduct, vision and strategy.

The Company has also in place a Policy for Nomination and Remuneration of KMPs, Senior Management personnel and Directors of the Company, which is in compliance with Section 178 of the Companies Act, 2013. Policy guiding the nomination and remuneration of the —Directors and KMPs can be accessed from our website www.balpharma.com

The Board carried out annual performance evaluation of itself, Committees, Individual Directors and Chairman at their Meeting held on 17/03/2021.

Report on performance evaluation of the individual Directors, and Committees was reviewed by the Chairman and feedback was given to the Directors. The Board has expressed satisfaction over the overall functioning of the Board Members and their Committees, which are in line with the objectives and goals of the Company.

MEETINGS OF THE BOARD

During the year under review, Eight (8) Meetings of the Board of Directors were held on 23rd May 2020, 29th July 2020, 08th September 2020, 28th October 2020, 11th November,2020, 11th February 2021, 26th February 2021 and 17th March 2021.

The intervening gap between two Board Meetings was within the maximum period prescribed under the Act. The detailed information regarding Board and Committee meeting is furnished in the Corporate Governance Report, forming part of the Annual Report were held during the year under review.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle Blower Policy as prescribed by SEBI(LODR) Regulations, 2015 includes compliance task force comprising of senior executives of the Company.

The policy of whistle blower is available on our website. The policy is reviewed by the Audit Committee from time to time and no concerns and/or irregularities were reported by the employees till date. Please access our website https://www.balpharma.com/pdf/finance/irl /Whistle%20Blower%20Policy.pdf to refer to the whistle blower policy of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTFLOW

As per the provisions of Section 134 of the Companies Act, 2013, details relating to the conservation of energy, technology absorption, foreign exchanges earnings and outflow are given as Annexure -3 to this report.

CORPORATE GOVERNANCE

Your Company is committed to maintaining highest standards of Corporate Governance requirements set out by the Securities and Exchange Board of India.A detailed report on the corporate governance system and practices of the Company along with a certificate from the practising Company secretary confirming the compliance with the corporate governance requirements, are given in a separate section of this report as Annexure-4.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY

The Company has made investments and given trade advances to its subsidiaries for their business purpose. Details of loans, investments and advances covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements provided in this annual report.

DEPOSITS

Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND UP TOTHE DATE OFTHIS REPORT

There have been no material changes or commitments affecting the financial position of the Company between the end of the financial year and as on the date of this report. There has been no change in the nature of business or constitution of the Company.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, Copy of the Annual Return as on March 31st, 2021 is available on the website of the Company www.balpharma.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. As on the date of report following is the composition:

1. Mr. H SVenkatesh - Chairman

2. Dr. C.V Srinivas - Member

3. Mr. Shailesh Siroya- Member

The Committee has formulated a Corporate Social Responsibility policy which recommends the social activities to be undertaken by the Company, as specified in ScheduleVII of theCompanies Act, 2013. A copy of the said policy is available on the website i.ehttp:// www.balpharma.com/pdf/finance/irl/CSR%20Policy.pdf.

The Committee has not recommended any CSR budget for the financial year 2020-21 due to inadequate profits during the last 3 financial years on consolidated basis.

HUMAN RESOURCES

Human resources of the Company have major share in the growth and development of the Company. The Company continues to hire new talent in order to keep pace with the new projects and initiatives undertaken. The Management of the Company aims to strengthen its employee relations through progressive people management.

LISTINGWITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE Limited, and National Stock Exchange of India Limited, and the Company has paid the annual listing fees for F.Y 2021-22 to the Exchanges.

PARTICULARS OF EMPLOYEES

There are no employees who are in receipt of remuneration in excess of the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as "Annexure -5" to this report.

CEO & CFO CERTIFICATION:

The CEO and CFO of the Company in their submission to the Board have confirmed that the annual financial statements presents a true and fair view of the Companys affairs and do not omit any material facts, which may make the statements or figures contained therein either misleading or false.

INSURANCE COVERAGE

The Management of the Company wishes to confirm that all the movable, immovable and current assets of the Company are covered with comprehensive and adequate insurance cover.

CREDIT RATING

The discipline with which the Company conducts its financial transactions is reflected in the BB rating given by the credit rating agency ICRA for the financial year 2020-2021.The Management of the Company aims at further improving its credit rating during the current financial year.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti-sexual harassment policy on lines with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. All the employees of the Company either they are permanent, contractual, temporary or trainees, are covered by the policy.

The following is the summery of the Complaints regarding sexual harassment, received and redressed during the financial year 2020-21.

Number of Complaints received during the year : Nil
Number of Complaints resolved : NA
Number of Complaints pending at the end of the year : NA

GENERAL INFORMATION:

Your Directors Report that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to the deposits covered under ChapterV of the Companies Act, 2013.

2. Issue of equity shares with differential voting rights with respect to dividend, voting etc.

3. Issue of shares (including sweat equity shares) to the employees of the Company under any scheme.

4. Neither the Managing Director nor the whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the regulators or courts or tribunals which impacts the going concern status of the Company and its operations in future.

6. No fraud has been reported by theAuditors to Audit Committee or the Board during the year.

REVISION OF FINANCIAL STATEMENT ORTHE REPORT:

As per the Secretarial Standards-4 in case the company has revised its financial statement or the Report in respect of any of the three preceding financial years either voluntarily or pursuant to the order of a judicial authority, the detailed reasons for such revision shall be disclosed in the Report of the year as well as in the Report of the relevant financial year in which such revision is made.

In your Company there is no revision of Financial Statement took place in any of the three preceding financial years under consideration.

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

There is no such process initiated during the year, therefore said clause is not applicable to the Company.

FAILURE TO IMPLEMENTANY CORPORATE ACTION:

There were no such events took place during the year under consideration.

Appreciation:

Your Directors express their gratitude to the Companys customers, Shareholders, employees, business partners viz. distributors, suppliers, medical professionals, Companys bankers, financial institutions including investors for their valuable, sustainable support and co-operation.

For and on behalf of Board of Directors
Bal Pharma Limited
Place: Bengaluru Himesh Virupakshya Shailesh D Siroya
Date: 29.06.2021 Whole-Time Director Managing Director