Cupid Ltd Directors Report.

To,

The Members,

The Board of Directors is pleased to present herewith the 27th Annual Report of your Company together with the Audited financial statements for the year ended 31 st March, 2020. The Management Discussion and Analysis has been annexed to the Directors Report.

FINANCIAL RESULTS

The highlights of financial results of the company are as follows: -

Particulars For the financial year 2020 (FY20) For the financial year 2019 (FY19)
Operating Revenues / Turnover 16,464.54 8,793.81
Profit before Depreciation & Amortization, Finance charges 5,573.22 2,303.52
Depreciation & Amortization 249.96 201.45
Finance Charges 52.85 10.73
Profit / (Loss) before tax 5,270.41 2,091.34
Provision for taxation (incl. deferred tax) 1,286.35 570.43
Profit / (Loss) after tax 3,984.06 1,520.91

During the year under review, the Company registered supreme improvement in an operating revenues from Rs. 8,793.81 lac in FY19 to Rs. 16,464.54 lac in FY20 amidst strong demand for Male and Female Condoms in the exports market. Commencement of export of Female Condoms to Brazil along with other new and repeat orders led to substantial growth in revenues. EBITDA margins improved to 34.6% in FY20 against 27.0% in FY19 on the back of cost reduction due to increased production capacity. In the total operating revenues, the Male Condoms contributed about 39% in value terms as against 59% for the Female Condoms and Water Based Lubricant Jelly and Hand Sanitiser collectively contributed around 2% as well.

From the margins standpoint, our EBITDA margins stood at 34.6% in FY20. On an absolute basis, EBITDA increased by 142% from Rs. 2,303.52 lac in FY19 to Rs. 5,573.22 lac in FY20. At the net profit level, we closed this financial year with a net profit of Rs. 3,984.06 lac as against Rs. 1,520.91 lac in the previous year which is an increase of

162%.

IMPACT OF COVID – 19 PANDEMIC:

In March 2020, the World Health Organisation (WHO) declared COVID-19 a global pandemic. Consequent to this, Government of India declared nation-wide lockdown on March 24, 2020, which has impacted normal business operations of the Company. The Company has assessed the impact of this pandemic on its business operations and has considered all relevant internal and external information to determine the impact on the Companys revenue from operations for foreseeable future. As the situation is unprecedented, while the lockdown is gradually lifting, the Company is closely monitoring the situation as it evolves in the future. The Company has resumed its business activities in line with guideline issued by the Government authorities, The Company does not anticipate any challenges in its ability to continue as going concern or meeting its financial obligations.

DIVIDEND

Your Board of Directors had declared 1st interim dividend of Re. 1 (i. e. 10%) per equity share at their meeting held on 11th November, 2019 and 2nd interim dividend of Rs. 3.50 (i. e. 35%) per equity share at their meeting held on 4th March, 2020. Hence, during the year, the Company declared and paid a total dividend of Rs. 4.50 (i.e. 45%) per equity share.

RESERVES

The whole of profit after tax has been transferred to Profit & Loss account. Interim Dividends are paid and there is no other amount that has been proposed to be carried to any other reserves.

CHANGE IN NATURE OF BUSINESS

The Company manufactures Male and Female Rubber Contraceptives and Lubricant Jelly. There is no any change in the business carried on by the company during the year under review.

SHARE CAPITAL

The paid up Equity Share Capital as at 31st March, 2020 is Rs. 1,333.80 Lac (Thirteen Crores Thirty Three Lacs and Eighty Thousand Only). During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options as sweat equity. As on 31st March 2020, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

FINANCE AND ACCOUNTS

Your Company prepares its financial statements in compliances with the requirements of the Companies Act, 2013 and the Indian Accounting Standard (IND AS). The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and Cash Flows for the year ended 31st March, 2020. There is no audit qualification in financial statements by the statutory auditors for the year under review.

LOANS, GUARANTEES & 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 Financial Statements.

DEPOSITS

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act.

RELATED PARTY TRANSACTIONS

The Company has not entered into any contracts or arrangements with related parties referred to in Section 188 of the Companies Act, 2013 and providing the information in the prescribed Form AOC-2 are not applicable to the Company. There are no transactions with related parties except those indicated in notes to accounts.

INTERNAL CONTROL SYSTEMS

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. It ensures that strict confidentiality is maintained whilst dealing with concerns and also no discrimination will be meted out to any person for a genuinely raised concern. Any suspected or confirmed incident of fraud / misconduct can be reported thereof.

The Whistle Blower Policy has been posted on website of the Company at below link:-https://www.cupidlimited.com/wp-content/uploads/2020/07/05_002_CG_Whistlerblower.pdf RISK MANAGEMENT

There is a continuous process for identifying, evaluating and managing significant risks faced through a risk management process designed to identify the key risks facing business. During the year a risk analysis and assessment was conducted and no major risks were noticed.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The same is found to be satisfactory.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given to him, which inter alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 and other relevant regulations and affirmation taken with respect to the same.

Further the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and the on-going events relating to the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Omprakash Garg, Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company, and being eligible offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The following are the Key Managerial Personnel of the company: Mr. Omprakash Garg: - Chairman and Managing Director

Mr. Saurabh V. Karmase: - Company Secretary and Compliance Officer Mr. Narendra M. Joshi: - Chief Financial Officer

Appointment:

1. Mr. Suresh Chand Chhangamal Garg was appointed as an Additional Director (Non-executive & Non-Independent) w.e.f. 26th August, 2020.

2. Ms. Nalini Madhusudan Mishra was appointed as an Additional Director (Non-executive & Independent) w.e.f. 26th August, 2020.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

BOARD MEETINGS

During the year under review, the Company has conducted 6 Board Meetings on the following dates: 29th May, 2019; 22nd July, 2019; 27th August, 2019; 11th November, 2019; 18th January, 2020 and 4th March, 2020. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

STATUTORY AUDITORS

M/s. Chaturvedi Sohan & Co., Chartered Accountants, Mumbai were appointed as Statutory Auditors of the company at 24th Annual General Meeting which was held on 7th September, 2017 to hold the office as Statutory Auditor from the conclusion of 24th Annual General Meeting till conclusion of 29th Annual General Meeting of the company subject to ratification by the members of the company at every Annual General Meeting.

Further, as per the Companies (Amendment) Act, 2017, the provision of ratification by the members at every Annual

General Meeting has been deleted w.e.f. 7th May, 2018. Accordingly there is no need to ratify their appointment in the ensuing Annual General Meeting of the company.

SECRETARIAL AUDIT

As required under Section 204 of the Companies Act, 2013, Secretarial Audit Report as obtained from Mr. Shailesh Kachalia, Practising Company Secretary is annexed as "annexure 1" and forms part of the Board Report.

OBSERVATIONS AUDITOR & SECRETARIAL AUDITOR

There are no qualifications contained in the Auditors Report and Secretarial Audit Report

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form No. MGT-9, as provided under Section 92 of the Companies Act, 2013, is annexed as "annexure 2" and forms part of the Board Report.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report other than the impact of COVID-19 on the business operations of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / courts / Tribunals that would impact the going concern status of the Company and its future operations.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances, environmental regulations and preservation of natural resources.

DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company took all necessary measures to ensure a harassment free workplace and has instituted an Internal Complaints Committee for redressal of complaints and to prevent sexual harassment. No complaints relating to sexual harassment were received during the year.

CORPORATE GOVERNANCE

As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on ‘Report on Corporate Governance practices followed by the Company, together with a certificate from the Auditors of the Company confirming compliances forms integral part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken 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. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION

A) Conservation of Energy:-i. The Company has taken all effective steps to conserve the energy by installing latest equipments for conservation of energy. As a stand-by arrangement in case of no supply of electricity, the Company has installed generator set. ii. The cumulative effect of the Energy conversations steps taken by the Company has considerably reduced the consumption of Energy and saved the cost. iii. The Company has installed Solar in its manufacturing facility for Energy conversation. iv. The Company is not required to mention per unit consumption of Energy in "form A".

B & C) Technology Absorption and Expenditure on Research & Development:-

The Company has deployed indigenous technology to manufacture its products. The Company is also taking steps to upgrade its technology to improve the quality of its product so as to make same cost effective and compete in international market.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned foreign exchange of Rs. 13,952.99 Lacs (Previous year Rs. 8065.46 Lacs) through exports, whereas the Company paid / payable foreign exchange of Rs. 95.73 Lacs (Previous Year Rs. 80.68 Lacs) towards machinery / equipments. Further payments made in foreign exchange of Rs. 3,639.30 Lacs (Previous Year Rs. 414.44 Lacs) towards other expenses.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is chaired by Mr. Pradeep Kumar Jain, Independent Director of the Company, the other members of the committee are Mr. Omprakash Garg, Chairman and Managing Director and Mr. Jandhyala L. Sharma, Independent Director. Your Company also has in place a CSR policy and the same is available on the website of the Company at https://www.cupidlimited.com/wp-content/uploads/2020/07/05_001_ CG_01CSR-Policy.pdf. A detailed report as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as "Annexure 3" forming part of this report.

AUDIT COMMITTEE

The Audit Committee now headed by Shri. Pradeep Kumar Jain as Chairman of the committee. Shri. Omprakash Garg and Shri. Jandhyala L. Sharma are Members. The details of all related party transactions, if any, are placed periodically before the Audit Committee. During the year there were no instances where the Board had not accepted the recommendations of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee is headed by Shri. Pradeep Kumar Jain as Chairman of the committee. Shri. Jandhyala L. Sharma and Mrs. Veena Garg are the members of committee. During the year there were no instances where the Board had not accepted the recommendations of the Nomination and Remuneration Committee.

STAKEHOLDER RELATIONSHIP COMMITTEE

The Stakeholder Relationship Committee is headed by Shri. Pradeep Kumar Jain as Chairman of the committee. Mr. Omprakash Garg and Mrs. Veena Garg are the members of committee. During the year there were no instances where the Board had not accepted the recommendations of the Stakeholder Relationship Committee.

PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Independent Directors is carried out by other non-independent directors on the basis of their contribution towards important aspects of the company and active participation on the board. The Directors express their satisfaction with the evaluation process.

Further, the company have constituted Performance Evaluation Policy to evaluate the performance of Independent Directors and the said policy is available on the website of the company at https://www.cupidlimited.com/wp-content/ uploads/2020/07/Performance_Evaluation.pdf

REMUNERATION OF DIRECTORS

Pecuniary Relationship or Transactions with the Non-Executive Directors:

There was no any pecuniary relationship or transaction took place between the company and its non-executive directors.

Criteria of making payments to non-executive directors:

Company is paying the sitting fees to all the non-executive directors as decided by the board for attending the board meetings and various committee meetings. Further, Company reimburses out of pocket expenses incurred by all the non-executive directors of the Company in connection with various affairs of the company.

PARTICULARS OF EMPLOYEE

The disclosure required under section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as "Annexure 4".

The statement of particulars of employees pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report and attached as "Annexure 5".

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company takes pride in the competence, dedication and commitment of its employees in all sectors of the business. The Company has a structured training and management development programs to upgrade skills of employees of the company. Objective appraisal systems are in place for senior management staff.

The Company is committed to enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Human Resource function and is an essential pillar to support the organizations growth and its sustainability in the long run.

The company is strongly giving emphasis on maintaining its current industrial relations and developing the new ones.

COST AUDITORS

As per the Companies (cost records and audit) Rules, 2014 and the amendments made thereof notified by

Ministry of Corporate Affairs, cost audit is not applicable to the company. Therefore the board did not proceed with the appointment of cost auditor and cost audit for the year 2020-21. The company is properly maintaining its cost record internally.

SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES

Company doesnt have any Subsidiaries or Joint Ventures or Associate companies as on the report date as defined under the Companies Act, 2013 and hence providing the information in the prescribed Form AOC-1 is not applicable to the Company.

CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Companys operations include raw material availability and its prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, Tax regimes, economic developments within India and other ancillary factors.

APPRECIATION

Your Directors would like to express their grateful appreciation for the contribution made by the employees at all levels. Your Directors are also deeply grateful for the confidence and faith shown by the Shareholders of the

Company in them. Your Directors also wish to thank its customers, dealers, agents, suppliers and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board of Directors

Omprakash Garg

Chairman & Managing Director

Din No: 00140756

CIN No. : L25193MH1993PLC070846

REGISTERED OFFICE

A - 68, M. I. D. C. (Malegaon), Sinnar, Nashik,

Maharashtra- 422113

Place: Ohio, USA

Date: 5th November, 2020