Cian Healthcare Ltd Directors Report.

FOR THE FINANCIAL MARCH ENDED 31st MARCH. 2021

To

The Members / Shareholders,

The Board of Directors hereby present the 18th Annual Report of ClAN HEALTHCARE LIMITED (CIN: L24233PN2003PLC017563) together with the Audited Financial Statements for the financial year ended 31st March, 2021.

FINANCIAL HIGHLIGHTS

(Amount in Lakhs)

PARTICULARS 2020-21 (Standalone ) 2019-20 (Standalone) 2020-21 (Consolidated) 2019-20 (Consolidated)
Revenue from business operation Rs. 7,238.27 Rs. 5,704.60 Rs. 7,373.01 5708.83
Other Income Rs. 20.30 Rs. 78.90 Rs. 28.04 Rs. 86.27
Total Income Rs. 7258.57 Rs. 5783.50 Rs. 7401.05 Rs. 5795.10
Operating profit before depreciation. Finance Cost, Exceptional Item and Tax (EBITDA) Rs. 932.61 Rs. 833.83 Rs. 1186.24 Rs. 804.44
Less: Depreciation & Amortization expenses Rs. 245.15 Rs. 245.46 Rs. 345.27 Rs. 444.87
Less: Finance Cost Rs. 620.96 Rs. 580.92 Rs. 772.27 Rs. 712.01
Profit before tax Rs. 66.50 Rs. 7.46 Rs. 68.70 Rs. (352.44)
Less: Current Expenses Rs. 41.18 Rs. 14.19 Rs. 41.18 14.91
Less: Deferred Expenses Rs. (7.35) Rs. (0.21) Rs. 22.22 Rs. 11.41
Net Profit for the Year Rs. 32.67 Rs. (7.24) Rs. 5.31 Rs. (378.76)
Add: Other Comprehensive Rs. 0.00 Rs. 0.00 Rs.0.00 Rs. 0.00
Total Comprehensive Income Rs. 0.00 Rs. 0.00 Rs. 0.00 Rs. 0.00
Paid up equity share capital 2336.08 2336.08 2336.08 2336.08
EPS (Equity Shares of Rs. 10/- each) Basic & Diluted (in 0.14 (0.03) 0.02 -1.62
Rs.)
Surplus brought forward from previous year Rs. 148.74 Rs. 155.98 Rs. (281.45) Rs. 97.30
Balance available for appropriation Rs. 181.41 Rs. 148.74 Rs. (276.15) Rs. (281.45)

BUSINESS OVERVIEW:

The company is engaged in manufacturing of multiple lines- tablets, capsules, soft gels, liquid orals, ointments/ creams & sachets. Our portfolio comprises of gynecology, hacmatinic. cardio- diabetic. orthopedic, pediatric, derma-cosmetic, and antibiotic. CNS. vitamins & nutrient products.

Products are developed at our centralized R &D. staffed with world class professionals who are in constant pursuit to develop differentiated products.

The company is also exporting its product to various countries viz Afghanistan. Benin. Bhutan. Bolivia. Cambodia. Sri Lanka and also enhance its production capacity by installing additional machinery for manufacturing variety of products.

PERFORMANCE REVIEW

Standalone:

Your Company delivered a solid all-round performance during the year under reviewed steered by positive growth. In F.Y 2020-21. total revenue including other income stood at Rs. 7258.57 Lakhs against Rs. 5783.50 Lakhs in F.Y 2019-20.

Profit before tax is Rs. 66.50 Lakhs as compared to Rs. 7.46 Lakhs. The Profit after tax stood at Rs. 32.67 Lakhs as compared to Rs. -7.24 Lakhs for the F.Y 2019-20.

Consolidated:

During the F.Y 2020-21 the Company and its Subsidiary Company Dr. Smith Biotic Private Limited revenue including other income stood at Rs. 7401.05 Lakhs as compared to Rs. 5795.10 in F.Y 2019-20.

Ihe Profit before tax is Rs. 68,70 l.akhs as compared to Rs. -354.44 Lakhs for the F.Y 2019-20. The Profit after tax stood at Rs. 5.31 l.akhs as compared to Rs. -378.76 Lakhs for the F.Y 2019- 20.

PERFORMANCE OF THE SUBSIDIARIES OF THE COMPANY

DR. SMITHS BIOTECH PRIVATE LIMITED

During the financial year 2020-21. Dr. Smiths Biotech Private Limited has reported a total income of INR 406.34 Lakhs/- and incurred total expenditure of 403.19/- Lakhs thus the Company suffered a total profit before tax of INR 2.21 Lakhs/-. The Company still in its initial years of business development and setting its operations.

DIVIDEND

The Board of Directors of the company after holistically considering the financial position of the company and the future financial needs of the company have decided not to declare any dividend for the financial year ended March 31.2021.

TRANSFER TO RESERVE;

The directors do not propose to transfer any amount to the General Reserve. The amounts of net profit are carried to reserve & surplus account of the Company.

CHANGE IN THE NATURE OF BUSINESS;

During the Year, the Company has not changed its business or object and continue to be in the same line of business as per the main object of the Company.

SHARE CAPITAL:

The issued, subscribed and paid-up equity share capital of the Company as on 3151 March. 2021 was Rs. 2336.08 Lakhs comprising of 23360764 equity shares of Rs. 10/- each. The Company has not issued any equity shares during the Financial Year 2020-21. Hence, there was no change in the share capital of the Company during the period under review.

MATERIAL CHANGES & COMMITEMENTS:

There were no material changes in the Company during the period under review.

BOARD OK DIRECTORS:

The composition of Board complies with the requirements of the Companies Act. 2013 ("Act"). Further, in pursuance of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015("Listing Regulations").the Company is exempted from requirement of having composition of Board as per Regulation 17 of Listing Regulations.

None of the Directors of Board is a member of more than ten Committees or Chairman of more than five Committees across all the Public Companies in which they are Director. The necessary disclosures regarding Committee positions have been made by all the Directors.

None of the Director of the Company is serving as a Whole-Time Director in any Listed Company and is holding position of Independent Director in more than 3 Listed Company and none of the Director of the Company is holding position as Independent Director in more than 7 Listed Company.

None of the Directors of the Company is disqualified for appointed as Director as specified in Section 164 (2) of the Companies Act. 2013 .

During the financial year under review there were changes in the constitution of the Board of Directors of the Company The strength of the Board of Directors on 31 March. 2021 was Six Directors as follows:

S.NO DIN Name of Director Date of Designation Appointment
1 01304850 Suraj Shriniwas Zanwar 07/01/2003 Managing Director
2. 07578366 Riyaz Bashir Khan 29/07/2016 Whole Time Director
3. 08466723 Santosh Shivaji Pimparkar 08/07/2019 Director
4. 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
5. 08202841 Shikha Rai 28/07/2020 Independent Director
6. 08955278 • Manoj Kumar Chunilal 13/11/2020 Non-Executive Director

During the financial year under review, following changes have occurred in the constitution of the Board of Directors of the Company:

S.NO DIN Name of Director Date of Appointment Designation
1 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
2. 08202841 Shikha Rai 28/07/2020 Independent Director
3. 08955278 Manoj Kumar Chunilal 13/11/2020 Non-Executive Director
S.No DIN Name of Director Date of Resignation Designation
1. 08502901 Paresh Arun Shah 12/11/2020 Non- Executive Director
2. 01987724 Padmanabhan Balasubramaniam 20/05/2020 Independent Director
3. 06560184 Smita Gujral Khanna 01/06/2020 Independent Director

MEETING OF THE BOARD OF DIRECTORS:

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The notice of Board meeting is given well in advance to all the-Directors.

During the financial year under report the Board of Directors of the company have duly jnet for 7 times, in respect of which meetings, proper notices were given, and the proceedings were properly recorded and signed in the minutes book maintained for purpose.

The meetings of the Board of Directors of the Company were held on:

S.No Date of Meeting Place of Meeting Board Strength Name of Director present at meeting
1 02.06.2020 Corporate Office 4 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
• Santosh Shivaji Pimparkar
2 12.06.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
3 31.08.2020 Corporate Office 4 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
• Santosh Shivaji Pimparkar
4 05.09.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Mohammad Raees Sheikh
• Riyaz Bashir Khan
5 15.10.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shall
• Riyaz Bashir Khan
6 13.11.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shall
• Riyaz Bashir Khan
7 22.03.2021 Corporate Office 4 • Suraj Shriniwas Zanwar
• Riyaz Bashir Khan
• Mohammad Races Sheikh
f • Shikha Rai

INDEPENDENT DIRECTORS:

In terms of Section 149 of the Companies Act. 2013 and rules made there under, the Company two Non-Promoter Non-Executive Independent Directors in line With the act. A separate meeting Of Independent Directors was held on 30.05.2020 to review the of Non-independent Directors and Board as whole and performance of the Company including assessment of quality, quantity and timeliness of flow of information between Company management and Board.

The Company has received necessary declaration from each director under Section 149(7) of the Act that they meet the criteria of independence laid down in Section 149 (6) of the act.

DIRECTOR AND KEY MANAGERIAL PERSONNEL

Following is the composition of the Board of Directors and Key Managerial Personnel of the Company as on 31st March 2021:

S.NO DIN Name of Director Date of Appointment Designation
1 01304850 Suraj Shriniwas Zanwar 07/01/2003 Managing Director
2. 07578366 Riyaz Bashir Khan 29/07/2016 Whole Time Director
3. 08466723 Santosh Shivaji Pimparkar 08/07/2019 Director
4. 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
5. 08202841 Shikha Rai 28/07/2020 Independent Director
6. Manoj Kumar Chunital 13/11/2020 Non-Executivc Director
7. BOSPG7481N Yashi Gupta 06/09/2019 Company Secretary
8. BCWPK1529B Riyaz Bashir Khan 12/06/2020 CFO

Based on the disclosures as provided by the directors or the Company in pursuance to the provisions of Section 164 of the Companies Act 2013. none of the Directors of the Company is found to be disqualified.

During the Financial Year Mr. Paresh Arun Shall had tendered resignation w.e.f 12th November, 2020 and Mr. Manoj Kumar Chunilal appointed as the Non-Executive Additional Directors of the Company w.e.f. 13th November, 2020.

During the Financial year under review. Mr. Deepak Khandelwal, Chief Financial Officer of the Company had tendered his resignation from the post w.e.f 11th June, 2020. The Company in his place, appointed Mr. Riyas Bashir Khan as Chief Financial Offcer of the Company w.e.f. 12th June, 2020.

During the Financial year under review, Mr. Padmanabhan Balasubramaniam and Ms. Smita Gujral Khannu. Independent Directors of the Company had tendered his resignation from the post w.e.f 20th May. 2020 and 1st June 2020 respectively. The Company in their place, appointed Mr. Mohammad Races Sheikh and Ms. Shikha Rai as Independent Director of the Company w.e.f ,2nd June. 2020 and 28th July. 2020 respectively.

PERFORMANCE EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act.

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

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

• The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspect of his role.

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

DIRECTOR RESPONSIBILITY STATEMENT

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

(a) In the preparation of the annual accounts for the year ended March 31, 2021. the Company has followed the applicable accounting standards and there are no material departures from the same;

(b) The Directors 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 as at March 31. 2021 and of the profit and loss of the Company for that period;

(c) The Directors 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)The Directors have prepared the annual accounts on a ‘going concern basis;

(e) The Company being unlisted, sub clause (e) of section 134(3) of the Companies Act. 2013 pertaining to laying down internal financial controls is not applicable to the Company;

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

COMMITTEE OF BOARD

As per the provision of the Companies Act. 2013 the Company has constituted following

committees of the Board:

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholder Relationship Committee

iv. Corporate Social Responsibility Committee

AUDIT COMMITTEE:

The Board of Director has constituted Audit Committee as per the provision of Section 177 of the Companies Act. 2013. I

The Composition of Audit Committee are as follows:

AUDIT COMMITTEE

NAME POSITION DESIGNATION
Mohammad Races Sheikh Chairman Independent Director
Suraj Shriniwas Zanwar Member Managing Director
Shikha Rat Member Independent Director

The meeting of Audit Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai
2 15.10.2020 • Mohammad Races Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai
3 13.11.2020 • Mohammad Raees Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai

NOMINATION & REMUNERATION COMMITTEE

The Board of Director has constituted Nomination & Remuneration Committee as per the provision of Section 178 of the Companies Act, 2013.

The Composition Nomination & Remuneration Committee of are as follows:

NOMINATION & REMUNERATION COMMITTEE

NAME POSITION DESIGNATION
Mohammad Raees Sheikh Chairman Independent Director
Manoj Kumar Chunilal Member Non-Executive Director
Shikha Rai Member Independent Director

The meeting of Nomination & Remuneration Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Paresh Shah
2 05.09.2020 • Mohammad Raees Sheikh
• Paresh Shah
3 22.03.2021 • Mohammad Raees Sheikh
• Shikha Rai

NOMINATION A REMUNERATION POLICY:

Nomination and Remuneration Policy in the Company is designed to create a high-performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the Company. The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Managing Director and the Executive Directors.

The Nomination and Remuneration Policy, as adopted by the Board of Directors, is placed on the website of the Company at www.cian.co and is annexed to this as Annexure A

REMUNERATION TO DIRECTOR:

The details of remuneration/sitting fees paid during the financial year 2020-2021 to Executive Directors/ Directors of the Company is provided in Form MGT 9 which is the part of this report.

STAKEHOLDER RELATIONSHIP COMMITTEE:

The Board of Director has constituted Stakeholder Relationship Committee as per the provision of Section 178 of the Companies Act. 2013.

The Composition of Stakeholder Relationship Committee are as follows:

STAKEHOLDER RELATIONSHIP COMMITEEE

NAME POSITION • DESIGNATION
Mohammad Raees Sheikh Chairman Independent Director
Manoj Kumar Chunilal Member Non- Executive Director
Shikha Rai Member Independent Director

The meeting of Stakeholder Relationship Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Paresh Shah
2 15.10.2020 • Mohammad Raees Sheikh
• Paresh Shah
3 13.11.2020 • Mohammad Races Sheikh
• Paresh Shah
4 22.03.2021 • Mohammad Raees Sheikh
• Shikha Rai

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Board of Director has constituted Corporate Social Responsibility Committee as per the provision of Section 135 of the Companies Act. 2013.

The Composition Corporate Social Responsibility Committee of arc as follows:

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

NAME POSITION DESIGNATION
Suraj Shriniwas Zanwar Chairman Managing Director
Manoj Kumar Chunilal Member Non-Executive Director
Shikha Rai Member Independent Director

The meeting of Corporate Social Responsibility Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 02.06. 2020 • Suraj Shriniwas Zanwar
• Paresh Shah
31.08.2020 • Suraj Shriniwas Zanwar
• Paresh Shah
3 15.10.2020 • Suraj Shriniwas Zanwar
• Paresh Shall
4 22.03.2021 • Suraj Shriniwas Zanwar
• Manoj Kumar Chunilal

WHISTLE BLOWER POLICY:

In accordance with Section 177 of the Companies Act. 2013. the Company has adopted a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The Company had established a mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of our Code of Conduct and Ethics. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases.

We affirm that during the financial year 2020-21. no employee or director was denied access to the Audit Committee.

DEPOSITS

In terms of the provisions of Sections 73 of the Act read with the Companie (Acceptance of Deposits) Rules. 2014. the Company has not accepted any deposits during the year under review and as such, no amount of principal or interest was outstanding as on 31s March. 2021.

PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS UNDER SECTION 186

The Company has invested in 22.00.000 equity shares of Rs. 10 each aggregating to Rs. 7.08.84,000 ( Rupees Seven Crores Eight Lakhs Eighty-Four Thousand only) of DR. SMITHS BIOTECH PRIVATE LIMITED. No Loans mid Guarantees covered under the provisions of Section 186 of the Companies Act, 2013 have been given by the Company

EXTRACT OF ANNUAL RETURN

Annual Return extract is in the accordance with Section 02 sub-section (3) of the Companies Act. 2013 read With Rule No. 12(1) of the Companies (Management and Administration (Rules 2014) the copy of Annual Return attached as Annexure B to this report and has been placed on the website of Company. The Member may follow web link for the same w~ww.cian.co

RELATED PARTY TRANSACTIONS

During the financial year under review the Company has entered into the contract or arrangements Pursuance of the provisions of section 188(1) of the Companies Act 2013, the particulars of such transactions in prescribed Form No. AOC-2. has been annexed herewith as "Annexure C".

DIRECTORS REMl NERATION

The details of retmineration/sitting fees paid during the financial year 2020-21 to Executive Directors/Directors of the Company is provided in Form MGT-9 which is the part of this report.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EARNING AM) OUTGO:

As required under section l34(3Km) of the Companies Act, 2013. read with the Companies (Accounts) Rules. 2014. information relating to Conservation of Energy. Technology Absorption and Foreign Exchange Earning and Outgo is as follows:

Consenation of Energy Technologv Absorption:

The Company is taking adequate steps to conserve the energy at all the levels and the Company is also implementing various measures for reduction in consumption of energy. The Disclosure of particulars with respect to Conservation of Energy has been attached herewith as in FORM A as "Anncxure D". There is no technology absorption during the year under review.

Foreign Exchange Earning & Outgo:

(Amount in Lakhs)

PARTICULAR FY 2020-21 FY 2019-20
Foreign Exchange Earning 775.82 515.89
Foreign Exchange Outgo 0.00 0.00

4 • In todays economic environment. Risk Management is a very important part of business. The Company is Exposed to inherent uncertainties owing to the sectors in-which it operates. A key factor in determining a companys capacity to create sustainable value is the risks that the company is willing to take <ut strategic and operational levels) and its ability to manage them effectively. Many risks exist in a companys operating environment and they emerge on a regular basis, flic Companys Risk Management processes focuses on ensuring that these risks are identified on a timely basis and addressed.

Your Company also has a Risk Management Frarmework in place covering all critical areas of operation. This framework is reviewed periodically keeping in mind the business dynamics and external environment and provides the guidelines for managing the various risks across the business.

The Process of Risk Management include following steps:

1) Risk Identification and Impact Assessment

2) Risk Evaluation

3) Risk Reporting and Disclosures

4) Risk Mitigating and Monitoring

INTERNAL FINANCIAL CONTROL

The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls,

The Internal Auditor of the Company carries out review of the internal control systems and procedures. The internal audit reports are reviewed by Audit Committee and Board.

Your Company has also put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of the Company. During Lhe year, such controls were tested and no material discrepancy or weakness in the Companys internal controls over financial reporting was observed,

DISCLOSl RE OF REMUNERATION

Pursuant to Section 197 of the Companies Act. 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. detail of ratio of the remuneration of each director to the median employees remuneration are appended to this report as "Annexure E"

There is no employee drawing remuneration of Rs. 8.50,000/- per month or Rs. 1.02.00.000/- per year, therefore the particulars of employees as required u/s 197(12) of the Companies Act. 2013 read with Rule 5(2) and Rule (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. are not applicable to the company.

i

Name of the* top 10 employees in term of remuneration drawn in the financials year 2020- 21:

A statement of Top-10 employees in terras of remuneration drawn as per rule 5(2) read with rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014 as amended, is annexed with the report "Annexhit F\

corporate governance

Your Company strives to incorporate the appropriate standards for corporate governance. However, pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is not required to mandatorily comply with the Provisions of certain regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and therefore the Company has not provided a separate report on Corporate Governance, although lew of the information are provided in this under relevant heading.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In. terms of Regulation 34. and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a review of the performance of the Company, for the year under review, Management Discussion and Analysis Report, is presented in a separate section forming part of this Annual Report as "Annexure G11

AUDITORS

STATUTORY AUDITOR

M s. Agarwal Mahesh K & Co.. Chartered Accountants (FRN:008007C), were appointed as the Statutory Auditors of the Company in the Extra-Ordinary General Meeting (AGM) of the Company held for the year 2018-19, to hold office from the conclusion of the this Annual General Meeting of the Company till the conclusion of the Annual General Meeting to he held in the financial year 2023-24.

As required under Regulation 33(d) of the SEBI (EODR) Regulation. 2015 the Auditor has confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of . Chartered Accountant of India. .

Board Considered the major observations given by the auditor and reply of management on the same as follows:

(i) According to the information and explanations given to ns and in our opinion the cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under subsection (I) of Section 140 of the Companies Act, 2013 needs to be maintained by the company as per the recommendation given by the Cost Auditor. -

Renlv form Management: Company has process and systems to maintain the cost records. During the previous year due to CQVID-19 situation there were unforeseen changes in the business world. Hence, as a business owner our priority was to run business and maintain the plant, which is being done and we have sustained in this difficult period.

Our maximum office staff was working from home and due to limitations of the availability of material transport and changed demand in products it was practically difficult to follow hundred percent process cost record.

This is already being taken care by the management at the beginning of this financial year, and the Management reassures the stakeholders of the company that complete process will be followed before closure of half yearly financial statements.

(ii) According to the information and explanations given to us, the Company lias delayed (defaulted) in repayment of loans and borrowings to banks and financial institution as on the balance sheet date of Rs.279.73 lakhs. Out of which Rs.97.46 lakhs have been repaid as on the date of report.

Reply form Management: Due to changed business condition, ballooning effect of EMls. delayed payments by government and other customers company have faced working capital shortage during the previous year. But situation is improved and as of today the all outstanding dues for the financial year 2020-2021 was paid by the Company.

The Board of the Company take pleasure in slating that no other observation has been made by the Auditors in their report w hich needs any further explanation by the Board.

INTERNAL AlDITOR

• The board of directors of Company Propose to reappoint M/s Cliirag Sancheti & Associates. Chartered Accountants (FRN: 1 -40822W). for conducting the audit for financial year 2021-22 as per the internal audit standards and regulations. The internal auditor reports their findings to the audit committee of the board. The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequac} and effectiveness of internal control mechanism with interaction of KMP and functional staff.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel ) Rules. 2019 your Company has appointed KPRC and Associates, practicing Company Secretaries firm. Pune to conduct the Secretarial Audit of the Company for the financial year 2020-21. The Secretarial Audit Report is annexed herewith as "Anncxure H" to this Report. Further the board of directors propose to appoint M/s. Riteek Baheti & Associates, Practicing Company Secretary having Certificate of Practice No. 17766 as Secretarial Auditor for Financial Year 2021-2022.

Secretarial Auditor has given some observations in his Secretarial Audit Report, the company has already taken the corrective action and ratify the mistakes.

COST AUDITOR

The company is trying to maintaining the Cost Records as specified by the Central Government under section 148 of the Companies Act. 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014. and accordingly such accounts and records are made and maintained by the Company in full Hedge form in near future as assured by the board. Further, the cost records are also audited by M/s Abhijeet Deshmukh & Co. Cost Auditors. The Company is in process to file the Cost Audit Report for the year 2020-21.

Your Directors had, on the recommendation of the Audit Committee, appointed M/s Abhijeet Deshmukh & Co.. Cost Auditors to audit the cost accounts of the Company for the financial year 2021-22 on a remuneration of Rs. 1.10.000- (plus GST). As required under the Companies Act. 2013. the remuneration payable to the Cost Auditor is required to be placed before the Members in General Meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s Abhijeet Deshmukh & Co.. Cost Auditors is included at Item No. 5 of the Notice of the Annual General Meeting

Board Considered the major observations giv en by the auditor and reply of management on the same as follows:

Observation: The existing cost accounting system of the Company is at preliminary level which meets the limited objectives of the Management of the Company. The Management should identify and initiate steps to strengthen further the cost accounting system as per industry best practices to derive more benefits out of it.

Reply form Management: Company has process and systems to maintain the cost records. During the previous year due to COVID-19 situation there were unforeseen changes in the business world. Hence, as a business owner our priority was to run business and maintain the plant, which is being done and we have sustained in this .difficult period.

Our maximum office staff was working from home and due to limitations of the availability of material transport and changed demand in products it was practically difficult to follow hundred percent process cost record.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 1430 2) OTHER THAN THOSE REPORTABLE TO THE CENTRAL GOVERNMENT

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

During the Financial Year, company has not received any cases regarding Fraud reporting required under Companies Amendment Act. 2015.

CREDIT RATING

Ihe Credit Rating Agency Brickwork has awarded Credit rating of BWR D for long term Facilities and short term Facilities to the companys borrowings. Further that there is a change in the rating of the company during the period under review the company rating is downgraded from BWR BBB- for Long term facilities and BWR A3 for short term facilities of the company.

DISCLOSURES UNDER SEXI AL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION & REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressal) Act. 2013 and the Rules there under. The Policy aims to provide protection to employees at the work place and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

I he Company has always provided a congenial atmosphere for work to all the employees that is free from discrimination and harassment including sexual harassment. It has provided equal opportunities of employment to all without regard to their caste, religion, color, marital status and sex.

The company is in process of constitution of Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressal) Act, 2013.

The Company has not received any complaint of sexual harassment during the financial year 2020-21.

GOING C ONCERN STMTS

There is no significant or material order passed during the year by any regulator, court or tribunal impacting the going concern status of the Company or its future operation.

C ORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company and the initiatives Undertaken by your Company on CSR activities during the year under review are set out in "Annexure I" of this report in the format prescribed under the Companies (CSR Policy) Rules,20l4.The CSR policy is available on the website of your Company.

SUBSIDIARIES. JOINT VENTURE OR ASSOCIATES

Companies which become to be Companys Subsidiary. Joint Venture or Associate Companies as per the provision of Companies Act. 2013 during the financial year 2020-21 as ‘Annexure J

S.No Name of Company Nature Percentage of Holding Section
I. Dr. Smith Biotech Private Limited Wholly Owned Subsidiary 99.99% 2(87)

MAINTENANCE OF COST RECORDS:

The Provision of section 148 of the Companies *Act. 2013 with respect to the maintenance of cost records are applicable to the Company and company has maintained adequate record during the year under review.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

The Board of Director confirms that the secretarial standard, as applicable to the Company have been complied with.

MATERIAL ORDER BY TRIBUNAL OR OTHER REGULATORY BODY

There is no significant or material order passed during the year by any regulator, court or tribunal impacting the going concern status of the Company or its future operation.

ACKNOW LEPG EM ENT

Tlte Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks. Government authorities and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives.

CAUTIONARY NOTE

The statements forming pan of the Directors may contain certain forward looking remarks w ithin the meaning of applicable provisions of the Companies Act. 2013 and rules made there under. Many factors could cause the actual results, performances or achievements of the company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements. T his Report should be read in conjuction with the financial statements included herein and the notes thereto.

BY THE ORDER OF BOARD OF DIRECTORS

FOR CIAN HEAL THCARE LIMITED

(Earlier known Tv CIAN HEALTHCARE PRIVA TE LIMITED)

Date: 04/09/2021

• Place: Pune