jenburkt pharmaceuticals ltd Directors report

Your Directors with pleasure present their report on the business and operations of your Company ("the Company" or "Jenburkt") along with the audited financial statements of the Company and auditors report thereon for the financial year ended on 31st March, 2022.

1. Summary of Financial Performance:

Particulars Year ended 31st March, 2022 Year ended 31st March, 2021
Revenue from operations 12,398.04 10,929.42
Other income 494.87 430.85
Total expenditure 9,905.82 9,196.10
Profit before tax 2,987.09 2,164.17
Tax expenses 757.37 513.93
Profit after tax 2,229.72 1,650.24
Other comprehensive income 130.02 195.96
Total other comprehensive income, net of tax 2,359.74 1,846.20
Earnings per share (EPS)
(Basic & Diluted in Rs.) 48.58 35.96
Reserves and Surplus 11,279.31 9,387.69

The above financial figures for the financial year ended 31st March, 2021 and 2022 are in accordance to Indian Accounting Standards (IND-AS).

The total revenue from the operations of the Company recorded at 12,398.04 Lacs for the financial year 2021-22, as against 10,929.42 Lacs, recorded for the financial year 2020- 21, a rise of 13.44% year on year.

The profit before tax recorded a rise of 38.02% year on year, which stood at 2,987.09 Lacs for the financial year 202122, as against 2,164.17 Lacs recorded for the previous financial year 2020-21. The profit after tax stood at 2,229.72 Lacs for the financial year 2021-22, as against 1,650.24 Lacs recorded for the financial year 2020-21 which also rose by 35.12%, year on year. The EPS of the Company for the financial year 2021-22, increased to 48.58 from 35.96 recorded for the financial year 2020-21.

2. Dividend and Reserves:

The Board of Directors of the Company is pleased to recommend a dividend of 12.00 (120%) on 10/- paid-up 4589378 equity shares of the Company, for the financial year 2021-22, subject to applicable tax deducted at source (TDS). 550.72 lac (before TDS) will be absorbed by this dividend out of surplus profit of 2021- 22.

Kindly refer to a note on TDS on dividend, appearing in the Notice convening the 37th AGM. With effect from financial year 2020-21, the dividend declared by the Company is subject to the TDS.

The reserves and surplus amount stood at 11,279.31 Lacs as at 31st March, 2022 as compared to 9,387.69 Lacs as on 31st March, 2021, an increase by 20.15% year on year. No amount is proposed by the Board to be transferred to general reserve, for the year under review.

The 37th AGM is scheduled on Friday, 29th July, 2022. The register of members and share transfer books will remain closed from Saturday, 23rd July, 2022 to Friday, 29th July, 2022 (both days inclusive), for the purpose of payment of dividend and 37th AGM. The cut-off date for recognition of members eligible for e-voting is 22nd July, 2022.

3. Management Discussion & Analysis Report:

A. Overview of Indian pharmaceutical industry structure, development and important changes:

Industry experts believe that Indias pharmaceutical sector has gained renewed global attention due to the crisis brought about by COVID-19, with the FDI inflows firmly establishing Indias credentials as a safe and key investment destination in the world.

Indian pharmaceutical industry ranks third in the world in production by volume. During 2020-21, total pharma export stood at $24.4 billion, while pharma imports were at $7.0 billion, thereby generating trade surplus of $17.5 billion.

Indian pharmaceutical sector witnessed a 200 per cent increase in foreign direct investment (FDI) in 2020-21. In 2021-22 (April-September), the FDI inflows continued to be buoyant at f 4,413 crore, growing at the rate of 53 per cent over the same period in 2020-21.

The extraordinary growth of foreign investments in pharma sector was mainly on account of investments to meet COVID-19 related demands for therapeutics and vaccines.

Anti-China sentiment has also provided a bigger opportunity to attract foreign investment. With many global players deciding to move operations out of China, and India emerging a strong alternative contender, investment in the pharma sector will gain further momentum.

India is the largest supplier of generic medicines, with a 20 per cent share in the global supply. Price competitiveness and good quality have enabled Indian medicines producers to be dominant players in the international market, thereby making the country the "Pharmacy of the world".

Although a prominent player in formulations, the country is significantly dependent on the import of bulk drugs that are used in the formulation of medicine. In certain cases, import dependence varies between 80-100 per cent.

The Indian government has taken several initiatives to address the requirements of the pharmaceutical and medical devices industry. Various initiatives such as Scheme for Promotion of Bulk Drug Parks that envisages creation of world class infrastructure facilities in order to make Indian bulk drug industry a global leader was approved on 20th March, 2020. Besides, production linked incentive (PLI) scheme for bulk drugs has also been approved for promotion of domestic manufacturing of 53 critical APIs in the country with a budget of f 6,940 crore for the next eight years.

In addition, PLI scheme for pharmaceuticals was approved by the government on 24th March, 2021, with a total financial outlay of f 15,000 crore. Pharmaceutical goods will be incentivised under the scheme based on their incremental sales for 6 years. Similarly, PLI scheme for promoting domestic manufacturing of medical devices was also approved on 20th March, 2020.

The Indian pharmaceutical industry is of strategic importance for the country providing access to affordable quality medicines across the world. The pharmaceutical industry is science-based and knowledge-driven with scientific developments evolving at a rapid pace.

The primary thrust for the Indian pharmaceutical industry going forward should be to move up the value chain by scaling up R&D and innovation to meet the unmet needs of patients across the world.

Source: Business today - 31st January, 2022.

B. Business performance, opportunities and outlook:

The Indian pharma industry is estimated to grow at 9-11 per cent and in the next few quarters, it will be driven by domestic and emerging markets, according to ratings agency ICRA. In a sample of 21 Indian pharmaceutical companies, ICRA said revenue growth was moderate at 6.4 per cent in the second quarter of FY22, down from 16 per cent in the first quarter of 2021-22.

In the domestic market, ICRA said a combination of steady normalisation in hospital footfalls and field force operations, given the relatively lower restrictions on account of COVID-19, continued traction in acute therapies and better pricing supported healthy revenue growth across companies.

Source: Economic Times: 4th January, 2022.

However, during the year as a result of the second wave the functioning of the organization was greatly affected in various parts of the countries. Travel of our medical representatives and managers was restricted as a result the routine working was adversely affected. Private practitioners and hospitals stopped allowing company representatives to enter their premises, affecting the product promotion. As the country was battling the second wave of Covid-19, many employees and their family members were affected too in various parts of the country.

Many employees at our manufacturing facility and the head office were affected by Covid-19. However, the plant, supply chain, logistics team with complete support from HR, finance and IT ensured continuity of supplies of our products to our patients. Our investment in technology to facilitate remote functioning and processes set up prior to the beginning of the pandemic paid true dividends during these uncertain times. Despite above adversities, the Companys top and bottom line improved during the financial year 2021-22.

Similar challenges were faced during the third wave, however it was for a shorter duration with much lesser impact on health of the employees.

However, during this challenging period your Company prepared for the launch of its new OTC division named as Jenburkt Wellness. With our strong pharmaceutical background with strength in product development, ensuring high quality products, we aim to conceptualize, formulate, manufacture and vet the highest quality portfolio of consumer wellness brands. We wish to blend the best of science and nature. The idea was to launch a few products on a pilot scale initially by promoting them digitally and making them available online. This is a complete shift from the current pattern of sale and distribution of products conducted so far. A cross functional team has been trained and assigned the task of managing the Wellness business. The thought process and needs for such product promotion needs a complete shift in terms of marketing, supply chain, inventory management, logistics and finance. These are completely different and a great amount of learning has taken place in the origination to operate this form of a business. Your Company has started taking baby steps in this new area with existing team, who helped in opening up new opportunities of OTC and online business both in one go. Most initial products for the Wellness division were developed at our Sihor R&D facility. We are hopeful that in the time to come this division will be a good contributor to the origination. However, in this segment it takes time to build brands and need to be consistent, persistent and patient for results.

C. Risks, concerns and threats

Pharmaceutical industry have witnessed disruption due to prevailing beaten-up conditions in different countries caused by Covid-19, including China on whom the industry depends for its raw materials. Your Company has constantly strive to cop-up with these situations. Going forward any such pandemic situations (like Covid-19) or scarcity of raw materials or the war situations or any such unforeseen circumstances may hamper Companys productivity and/or profitability.

NPPA had served a show cause notice to your Company in 2013, alleging that a Companys product was violating a NPPAs standing order. However, after a personal hearing and detailed submission, NPPA passed a written order stating that your Companys product did not violate the standing order. Subsequently, NPPA reviewed its own order, without having any power to review and issued show cause notices and demand notice to your Company. Your Company subsequently filed a writ petition against the demand of NPPA, at the Honble High Court of Bombay. The matter was settled in favour of your Company, in 2013. DPCO, 1995, explicitly debars NPPA to review its own order, the very reason cited by Honble High Court of Bombay, while quashing the show cause notices and demand notice in their judgment dated 08th August, 2013 and 26th September, 2013. Later NPPA, after over a year, filed a Special Leave Petition (SLP) (demanding f 16.45 crore) at the Honble Supreme Court. Your Company has been legally advised, that based on the facts and merits of the case, the demand raised by NPPA is not likely to crystallize. The matter is pending at Supreme Court after being admitted for further hearing.

Due to a surge in fuel prices predominantly because of the Russia ~ Ukraine war and strengthening of US dollor, there is a constant increase in prices of key start material, raw and packing material. The transportation cost also have increased as a result. The overall impact has also resulted an increase in labour cost, expenses incurred by our field staff for travel. These factors have restricted the margins of the company and may continue to do so till the prices and cost reduced down to reach around their pre-war level.

4. Zixa Strong - New product launched through Digital Marketing:

Your Company on the auspicious day of "Gudi Padwa" on 2nd April, 2022, launched the first on-line product Zixa Strong, a high-performing pain-relief product that delivers fast-acting and long-lasting relief from muscle and joint pains. Zixa Strong has been developed at Jenburkts R & D Centre. It is targeted at the rapidly growing health and fitness conscious population of India. Zixa Strong is our very first digital and very first over-the-counter (OTC) brand, and we are greatly delighted to have created a highly-effective product in three formats, namely Roll-On, Spray and Gel ~the first company to do for a single formulation. We plan to add multiple products to the Zixa range over the course of time. Zixa Strong is recommended for fast-acting, long- lasting relief from back pain, rheumatic pain, muscular aches, pains and swellings such as strains, sprains and sports injuries. It is also suitable for the relief from pain associated with non-serious arthritic conditions. It harnesses innovative Oil in Water FlashMicelle? Technology, with a powerful dual-action composition for fast relief from intense pain- A uniquely powerful approach to modify the structure of oil-based formulations to improve their therapeutic efficacy substantially.

Another feature of Zixa Strong is that traditionally, there are two completely different routes to treat pain. Apply something hot or apply something cold. Zixa Strong is a dualaction analgesic that provides both hot and cold therapy to the affected areas at the same instant! Additionally, Zixa Strong is composed of natural (plant-based) ingredients without the addition of any artificial preservative, additive, colour, silicones, parabens or synthetic fragrances. The formulation is designed to provide skin safety - without any risk of skin irritation. The safety of this natural product allows frequent & prolonged use making it a uniquely high- performing analgesic.

According to a study by the World Health Organizations Global Burden of Disease, every fifth person, in the world, is likely to be suffering from some kind of pain. With a long experience and expertise in pain management, at Jenburkt Wellness, we were inspired to pioneer a scientifically advanced, natural and skin-friendly pain relief range.

Zixa Strong is currently available on Amazon and the product website: "". Your company has created a brand store on Amazon and has been receiving very encouraging reviews from consumers as a very effective product.

For the launch the company created a very high impact advertisement film involving senior professional in their respective fields. The film won great accolades for creativity and also attained the 1st position in India as most trending for a period at the time of launch.

5. Internal control system and their adequacy :

Your Companys policies, guidelines and procedures endeavours to provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

Appropriate systems of internal control, including monitoring procedures are maintained at the Company. This ensure that all assets are safeguarded against loss from unauthorized use or disposition.

The Company keeps investing in automation and latest technology to improve efficiency in business operations. SAP based ERP system is in place in the Company. This ERP system integrate the Companys manufacturing and supply chain and key supporting functions like finance and accounts, marketing, sales, HR, etc. The system has also been installed with your Companys Super Stockists to get data of their sales, stock, collection, breakage/expiry etc. The Companys investment in such technology ensured that your Company could work remotely almost instantaneously during pandemic.

The audit committee of the Company carries out inter-alia, the functions specified under the Act and SEBI-LODR. The Company has a well-defined whistle blower policy under its vigil mechanism.

Based on internal financial control policy frame work established and followed by the Company, the audit work performed by the Companys internal auditors, statutory auditors, cost auditors and secretarial auditors and based on reviews of the management and the audit Committee, the board is of the opinion that the Companys internal financial controls are adequate and effective.

6 Research and Development (R&D)

To achieve its growth potential, Jenburkt is committed to make a substantial effort in strengthening its Research and Development capabilities. This area remains a core pillar in Jenburkts future business plans which will be built in a phased manner.

Equipped with a state of the art set up at its R&D centre at Sihor, which has recently been renovated and upgraded in 2021, a new laboratory for Analytical Development has also been setup with highly qualified and experienced Scientists. This centre enjoys Accreditation from Ministry of Science and Technology, Government of India.

Following new products have been developed for Jenburkt Wellness division and some of these have already been introduced in the market:

(1) Zixa Strong Gel, (2) Zixa Strong Roll-on, (3) Zixa Strong Spray, (4) Zixa MPR Gel, (5) Zixa Feminine Cream and Roll-on, (6) Zixa Ultra Strong Gel and Roll on, (7) Zixa Muscle Recovery Gel.

Some products were also developed for the pharmaceutical division, too.

7 Material development in human resources

Jenburkt has drawn strength from its greatest asset i.e. its own people - "Jenburktians" - whose core competence over the decades has helped us to sustain our growth. Due to Covid-19 your company faced challenges in imparting training to employees and hence was unable to carry the programmes as usual.

The Company has unwaveringly continued to make significant improvement in Human Relations practices across the organization. High standard of safety parameters are maintained. Periodical assessment of POSH (Prevention of Sexual Harassment) situation, under the chairperson of POSH Committee is being carried out. No case has been reported under POSH.

During the Covid period, online and off-line awareness programs on anti-covid measures and moral boosting exercises were conducted among the workforce.

Industrial harmony was maintained throughout.

8 International Business:

During financial year 2021-22, the international supply chain operations remained badly affected. Since inception of Covid-19 pandemic there has been tremendous shortage of containers for ocean shipments and scarcity of booking space for air cargo as well. Freight rates had been sky rocketed due to non-availability of containers and space in air crafts. Transit time between Indian ports to destination ports has been increased, hampering the supply chain network.

Due to the pandemic, there has been tremendous impact on economies of countries where we are operating, making it costlier for the importers to import our products. Moreover rising costs of ingredients is a major worrying factor with regards to the cost of inputs.

Despite these adversities, your company has registered growth in business, as compared to the previous financial year.

Your company has obtained fresh registrations for three (3) Products in Congo-Brazza viz. Ornel Tablet, Ornel Suspension and Powergesic Plus Gel. Further, renewals and retention of existing products are done in existing countries.

9 Segment wise performance

Your Company operates exclusively in one segment i.e. pharmaceutical formulations.

10. Details of significant changes in key financial ratios

a. Inventory Turnover ratio increased from 3.26 times (202021) to 3.60 times (2021-22).

b. Interest coverage ratio improved from 46.96 times (2020-21) to 60.76 times (2021-22): Due to marginal reduction in finance cost coupled with higher net profit.

c. Change in Return on Net worth: f 9,846.63 Lacs in 202021 as compared to f 11,738.25 Lacs recorded in 202122, a rise by 13.36%.

d. Total Debt Equity Ratio improved from 0.23 times (202021) to 0.22 times (2021-22).

e. Debtors turnover ratio increased form 6.84 times (202021) to 8.47 times (2021-22).

f. Current Ratio decreased from 4.45 times (2020-21) to 3.57 times (2021-22).

g. Operating profit margin increased form 19.47% (202021) to 23.50% (2021-22).

Figures of the previous year are re-arranged whereever required due to re-grouping or re-arranging of figures for the financial year 2020-21.

11. Management:

A. Appointment of Director(s):

Shri Dilip H. Bhuta (DIN: 03157252) Director of the Company is liable to retire on rotation basis at the ensuing AGM of the Company. Being eligible for re-appointment he had offered himself to be re-appointed. He was appointed as the Whole Time Director designated as the Whole Time Director and CFO of the Company, for a period of five years from 1st April, 2022 to 31st March, 2027 by a special resolution at the 36"’ AGM of the Company held on 07"’ September, 2021. This appointment was subject to retirement by rotation.

Brief profile of Shri Dilip H. Bhuta being re-appointed as the Director, is appearing in the Report on Corporate Governance in this Annual Report.

Shri Ashish U. Bhuta (DIN 00226479) Director of the Company was appointed as the Managing Director and Chairman of the Company at the 35"’ AGM of the Company held on 1st September, 2020 for a period of five years from 1st April, 2021 to 31st March, 2026. This reappointment was subject to retirement by rotation.

B. Independent Directors:

Out of total six Directors on the Board, the Company has four independent Directors, viz. Shri Bharat V. Bhate (DIN: 00112361), Shri Rameshchandra J. Vora (DIN: 00112446), Shri Arun R. Raskapurwala (DIN: 00143983) and Mrs. Hina Ravindra Mehta (DIN: 08719453).

These four independent Directors on the Board of the Company have confirmed compliance with the Code for independent Directors prescribed in Schedule IV to the Act and the code of business conduct of the Company, for the financial year2021-22.

The Board have received necessary individual declaration confirming their independence from the management of the

Company and that there has been no circumstances affecting their status as an Independent Director of the Company. There is no conflict of interest of the Independent Directors with the Company.

The composition of the Board of Directors is in accordance and in compliance with the provisions of SEBI-LODR.

The Company has insured all the Directors on the Board and senior officers of the Company under Directors and officers (D&O) insurance policy.

For further details with regard to independent Directors of the Company, kindly refer to report on Corporate Governance in this Annual Report.

C. Details of the Meetings of Board of Directors:

The Board of Directors of the Company met four times during the year under review, on 02nd June, 12"1 August, 26th October, 2021 and 11"1 February, 2022.

For further details about Board, its composition and meetings, kindly refer to report on Corporate Governance in this annual report.

D. Composition and details of meeting of the Committees of the Board:

There has been no changes in the composition of any of the Committees of the Board of the Company, during the financial year. Details of the meetings of each of the Committees is as under:

a. Audit Committee: This Committee met four times during the year under review, on 02nd June, 12th August, 26th October, 2021 and 11th February, 2022.

b. Stakeholders Relationship Committee: This Committee met four times during the year under review, on 02nd June, 12th August, 26th October, 2021 and 11th February, 2022.

c. Corporate Social Responsibility Committee: This Committee met four times during the year under review, on 02nd June, 12th August, 26th October, 2021 and 11th February, 2022.

d. Nomination and Remuneration Committee: This Committee met four times during the year under review, on 02nd June, 12th August, 26th October, 2021 and 11th February, 2022.

For further details about above Committees and its meetings, kindly refer to report on Corporate Governance in this annual report.

All the recommendations forwarded by the above Committees to the Board, vide their meetings are always considered by the Board, to arrive at appropriate decisions. None of such recommendations were rejected during the year under review by the Board, i.e. all the recommendations of all the Committees have been accepted by the Board for its consideration.

E. Annual performances evaluation procedure:

Annual evaluations/reviews of performances of the Board, its Committees and individual Directors were carried out, at the meetings of Board and Committees, based on set criteria for evaluations/reviews, pursuant to the applicable provisions of Section 134(3)(p) read with rule 8(4) of Companies (Accounts) Rules, 2014, section 178(2), Schedule IV and other applicable provisions of the Act and regulations 17(10) and 25(4) and other applicable regulation(s) of SEBI-LODR. Criteria such as qualifications, knowledge, attendance at the meetings, participation in long-term strategic planning, leadership qualities, responsibility shouldered, inter-personal relationship and analytical decision making and other abilities were taken in to consideration, in evaluating the performance of individual Directors. In accordance to the required procedures, the Board carried out performance evaluation of independent Director without the participation of the Director being evaluated. The evaluation by the Board was carried out, after seeking inputs from all Directors at the Board and Committee meetings, including observance of governance, quality of deliberation and effectiveness of the procedures adopted by the Board. The performances of the Committees were evaluated by the Board, by seeking feedback/inputs on set criteria, from the members of the respective Committees. Evaluation of the Chairperson was also carried out by the Directors. All the Directors were satisfied with the evaluation process.

The independent Directors at their separate meeting, inter alia, also assessed the quality, quantity and timeliness of flow of information between the management of the Company and the Board of Directors, necessary for the Board of Directors to effectively and reasonably perform their duties.

F. Salient features of Companys policies on Directors appointment and remuneration:

a. For selection of Directors and determining Directors independence:

The Companys policy viz. "Selection of Directors, Senior Managerial Personnel and determining Directors independence" contain the guiding principles for the Nomination and Remuneration Committee for identifying Directors and Senior Managerial Persons. They broadly provides guidance towards appointees qualification, experience, etc. as required and also determine their independence of the management of the Company.

For the appointment of a Director on the Board of the Company the Nomination and Remuneration Committee

take in to account criteria such as education, professional background, knowledge, experience, understanding about Companys business and industry, in general, personal and professional ethics, integrity values and willingness to shoulder his/her duties, attendance at the Board and Committee meetings, perform his/her role with responsibility, analytical decision making ability, interpersonal relationship qualities and participation in long-term strategic planning. Adherence to the companys policies and codes, provision of all acts, rules and regulations, as applicable, are also considered to be selected as the Director on the Board of the Company. In case of independent Directors, his/her independence of the management of the Company, no conflict of interest in any transaction entered in to or to be entered in to by the Company with any person(s), firms, Companies, body corporates, whether directly or indirectly are interalia taken into account.

This policy has been hosted on the website of the Company viz.

b. For remuneration of Directors, key managerial personnel and other employees:

The Company has in place a policy viz. "Remuneration of Directors, Key Managerial Personnel and other Employees" with the help of which, the Nomination and Remuneration Committee recommend to the Board about the remuneration of all the Directors, key managerial personnel and senior employees of the Company including the sitting fees of the independent Directors. The remuneration packages are designed in such a manner that they are not only competitive but also are attractive enough to retain the talent in the Company. For employees of the Company this package basically include, the salary, perquisites, allowances, bonus and other benefits, etc., as applicable. Your company has also insured all its Directors and senior officers, under D&O liability insurance, for indemnifying them from any liability that may occur while performing their role, duties, responsibilities etc. The premium towards the said policy is borne by the Company.

This policy has been hosted on the website of the Company viz.

G. Directors Responsibility Statement:

Pursuant to Section 134 (5) of the Act, in relation to the financial statements for the financial year 2021-22, your Board of Directors state that:

a. in the preparation of the annual accounts, the Company has adopted and followed the Indian Accounting Standards (IND-AS), as applicable;

b. the estimates and judgments relating to financial statements have been made, based on application of sound and consistent accounting policies, on a prudent and reasonable basis in order to ensure that financial statements reflect, in a true and fair manner, the form and substance of the transactions and reasonably present the Companys state of affairs and profit for the year;

c. they have 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 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, which are adequate and operating effectively. The internal auditors have conducted periodic audits of the Companys financials and

f. the systems are in place to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

H. Key Managerial Personnel

In accordance to the provisions of the Section 203(1) of the Act, Shri Ashish U. Bhuta, (Chairman and Managing Director, Shri Dilip H. Bhuta, Whole Time Director and CFO and Shri Ashish R. Shah, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company, as on 31st March, 2022.

12. Statutory Auditors and Report:

M/s. D. R. Mehta & Associates (Reg. No.:106207W), chartered accountants, were appointed as the statutory auditors of the Company, for a consecutive period of five years, from the conclusion of the 32nd AGM held on 31st July, 2017 to the conclusion of the 37th AGM to be held in the year 2022.

Pursuant to Section 139(2) of the Companies Act, 2013 (the Act), the Company can appoint an audit firm for a second term of five consecutive years. Accordingly, M/s. D. R. Mehta & Associates, Chartered Accountants, are proposed to be reappointed as the Statutory Auditors of the Company for a second term of five consecutive years commencing from the conclusion of this 37th AGM till the conclusion of 42nd AGM. Their re-appointment is proposed vide a resolution in the notice convening the 37th AGM.

The auditors have consented and confirmed their eligibility to act as the auditors of the Company for the period from conclusion of the ensuing 37th AGM till conclusion of 42nd AGM of the Company.

The auditors report for the financial year 2021-22 as submitted by them is with unmodified opinion.

Pursuant to Section 143 (12) of the Act, the auditors of the Company, in the course of their duties, had no reason to believe that any of the officer or employee of the Company, had or has committed any offence or fraud.

13. Secretarial Auditors and Report:

The Secretarial Auditors viz. M/s. Nilesh Shah & Associates (C.P. No.: 2631), practicing Company Secretaries existing appointment to carry out the secretarial audit of the Company is for seven consecutive financial years from 201819 till 2025-26. They have confirmed that they are eligible to act as the secretarial auditors of the Company for the financial year 2022-23.

The secretarial audit report for the financial year 2021-22, presented by M/s. Nilesh Shah & Associates is attached as "Annexure-"A" and "A-1" to this report which is in prescribed format i.e. Form MR-3. Their annual secretarial compliance report under regulation 24A of SEBI-LODR pertaining to FY

2021- 22 was also received by the Company and submitted to the stock exchange, as required.

14. Cost Auditors:

Pursuant to section 148(1) of the Act, Companies (Cost Record and Audit) Amendment Rules, 2014 as amended, and the order of the Central Government, your Company is preparing and maintaining cost records, as required. The same are periodically audited by a practicing Cost Accountants, viz. M/s. Jagdish R. Bhavsar (membership No.: 8000).

M/s. Jagdish R. Bhavsar, is a proprietary firm of Cost Accountants, Mumbai and holds a valid certificate of practice. They are appointed as the cost auditors, by the Board of Directors of the Company, on the recommendation of the Audit Committee, for auditing the cost records of the Company, for the financial year 2022-23. Mr. Bhavsar, the proprietor, have confirmed by submitting necessary letter that he is free from disqualification and eligible for appointment as the Cost Auditor for the financial year 2022

23. He has also confirmed that he is independent of the management of the Company and that no order or proceedings were pending against him relating to professional misconduct at the Institute of Cost Accountant of India or any competent authority/court.

Pursuant to section 148(6) of the Act, read with rules thereunder, the Companys cost audit report for the FY 2020-21 under Form No.: CRA-4 was submitted to the Central Government during the year.

Their remuneration for the financial year 2021-22 was paid in pursuance of the members resolution passed at 36th AGM held on 7th September, 2021. Their remuneration for the FY 2022- 23 as fixed by the Board of Directors of the Company is to be ratified by the members at the ensuing 37th AGM of the Company. An ordinary resolution has been proposed in the notice convening the ensuing 37th AGM of the Company.

15. Annual Return:

In compliance with section 92(3) and 134(3)(a) of the Act, Companys annual return, in the prescribed form no. MGT-7, containing particulars, as they stood on the close of the financial year 2020-21, as duly submitted to the Ministry of Corporate Affairs is placed on the website of the Company, viz. For the web link of the same, kindly refer to report on Corporate Governance in this Annual Report.

16. Particulars of loans, guarantees or investments made by the Company:

Pursuant to Section 186 of the Act, during the financial year 2021-22, no loan or guarantee was given to any person or body corporate directly or indirectly by the Company. The investments in securities made by the Company are within the limits set under the applicable provisions of the Act.

17. Particulars of related party transactions:

A. In terms of Section 188 of the Act and rules made thereunder, no materially significant related party transaction was made by the Company during the financial year 2021-22, with its promoters, Directors, KMPs or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors have any material pecuniary relationships or transactions vis-a-vis the Company.

The policy on "Materiality of related party transactions and dealing with related party transactions" of the Company is available on the Companys website, viz. For the web link of the same, kindly refer details provided in the report on Corporate Governance in this Annual Report.

Two Contract in the form of Leave and License agreements, which are "not material" were entered into at arms length and in ordinary course of business of the Company with effect from 01st April, 2019 with M/s. Bhuta Holdings Private Ltd., the Promoter of the Company (a related party, holding shares of the Company in excess of 10%). These agreements are for the usage of seven premises by the Company for its business office/place, belonging to a promoter, on leave and license basis and are for five years each, i.e. having validity up to 31st March 2024. Pursuant to section 188 (1) of the Act, these transactions have been disclosed voluntarily and presented in the prescribed form No. AOC-2, by the Company and annexed to this report as "Annexure-B".

In terms of the recently amended Regulation 23 of SEBI- LODR related party transaction which are "Material" in nature, as defined therein are required to be authorised by the members through resolution. As stated above, the Company has no "Material" related party transactions.

Apart from receiving their respective remuneration and dividend on their shareholdings, none of the Directors on the Board has any pecuniary transaction with the Company, or interse, which has potential conflict of interest with the Company.

Weblink of the policy of the Company in this regard is provided in the report on Corporate Governance of the Company, in this Annual Report.

B. Disclosure in terms of Regulation 34(3) read with sub clause (1) of clause A (Related Party Disclosure) of Schedule V of SEBI -LODR:

-According to the requirements of IND-AS, the transactions with the related parties are disclosed in the financial statements in the annual report and they are not in conflict with the interest of the Company at large.

Disclosure in terms of Regulation 34(3) read with sub clause (2) of clause A (Related Party Disclosure) of Schedule V of SEBI-LODR:

-This requirement is not applicable to the Company as it doesnt have any Holding or Subsidiary Company.

Disclosure in terms of Regulation 34(3) read with sub clause (2A) of clause A (Related Party Disclosure) of Schedule V of SEBI-LODR:

-Kindly refer to "Annexure-B" annexed to this report.

18. Corporate Social Responsibility (CSR):

In compliance with the provisions of Section 135 and Schedule VII of the Act, CSR activities are being carried out by the Company, directly, on the basis of recommendation by the CSR Committee and on approval of the Board, in accordance to requirements laid under the Companies (Corporate Social Responsibility Policy) Rules 2014, as amended. A brief note on CSR activities of the Company, CSR expenditures made during the year under review and other required details are set out in a report on CSR and annexed to this report as "Annexure-C" in prescribed format. The CSR policy of the Company is available on the website of the Company, viz.

19. Investors Education and Protection Fund (IEPF):

In pursuance to section 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, from time to time, your Company had taken appropriate steps towards creating unpaid dividend account, uploading status of unpaid dividends with required details on the websites of IEPF and the Company. Further steps were taken for intimating those shareholders, who had not encashed their dividend for the period of past seven consecutive years, by way of writing individual letters and publishing newspaper notices, regarding their unclaimed dividend and corresponding shares that were liable to be transferred to IEPF account. Thereafter, as required under the said Act and Rules, the unclaimed dividend amount lying in the Companys unclaimed dividend bank account pertaining to financial year 2013-14, were transferred to IEPF authority during the financial year 2021-22 along with the corresponding equity shares.

The shareholder are hereby informed that the dividend amount and equity shares transferred to IEPF can be claimed back by the shareholders from the IEPF authority by following procedure mentioned in the above said rules of IEPF. The Company Secretary is the nodal officer of the Company. The shareholders are requested to claim their dividend, from the Company, if not encashed yet, for the period from financial year 2014-15 onwards, to avoid hardship of claiming later from IEPF, along with corresponding shares, if any.

The shareholders are advised to take note that the details of the shareholders whose dividend and shares are transferred to IEPF are available on the website of the Company, viz. Further, transfer of unclaimed dividend amount pertaining to financial year 2014-15 will take effect during financial year 2022-23. For the total amount lying in dividend account for last seven years, details are available at

20. Secretarial Standards:

Your Company has during the financial year 2021-22 complied with the applicable provisions of the secretarial standard-1 on the meetings of Board of Director and its Committees, and the secretarial standard-2 on general meetings as formulated and issued by the Institute of Company Secretaries of India (ICSI).

Majority of the provisions of the secretarial standard-3 on dividend and secretarial standard-4 on Boards report, as formulated by ICSI and which are recommendatory in nature, were voluntarily complied with by the Company.

21. Report on Corporate Governance:

Pursuant to the relevant provisions of the Act and SEBI- LODR, a detailed report on the Corporate Governance of the Company and the auditors certificate regarding Companys compliances with Corporate Governance norms are attached to this Annual Report. As a continued commitment, your Directors re-affirm adherence to the highest standard of Corporate Governance.

22. Vigil Mechanism:

Over the years, through its strong vigil mechanism, your Company is known for carrying on business with integrity and values. It has a policy of zero tolerance towards unethical conduct or behavior within.

In pursuance of Section 177(9) of the Act and rules made thereunder and Regulation 22(1) of SEBI-LODR, a vigil mechanism of the Company has been established by forming a whistle blower policy of the Company, inter alia providing adequate safeguard against any victimization of any employee and / or Director of the Company. This is to enable them to disclose or report any genuine concern, regarding wrongful misconduct (as defined in said policy), including reporting instances of leak of unpublished price sensitive information of the Company, as required under regulation 9A(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015. No employee or Director of the Company was denied access to the audit Committee. There was no reporting of any such event during the year. The Audit Committee review the functioning of vigil mechanism / whistle blower policy. The said whistle blower policy of the Company is uploaded on the website of the Company, viz. Policies on code of conduct and prevention of Sexual Harassment at work place are also uploaded on the said website

23. Audit Committee:

A detailed note on audit Committee including its composition, role and number of meetings held etc. is presented in the report on Corporate Governance, which is forming part of this annual report. All the recommendations made by the audit Committee during the financial year, were accepted by the Board.

24. Internal Financial Control:

Adequate internal financial controls are in place in the Company, with reference to financial statements. No reportable material weaknesses in the operations were observed, during the financial year. For further details, kindly refer to a section titled "internal control and their adequacy" in the report of management discussion and analysis in this Directors report.

25. Other Information:

A. A detailed information on conservation of energy and technology absorption, foreign exchange earnings and outgo is annexed as "Annexure-D", to this report.

B. Risk management policy: Your Company has formulated a risk management plan and have constituted a risk management Committee. The risks are classified in different areas such as market, finance, operational, etc. These risks are reviewed regularly to mitigate the risk, if any.

C. In pursuance of Section 197(12) of the Act read with Rule

5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, details of employees, are annexed herewith as "Annexure-E" to this report.

26. General:

Disclosure or reporting is not required by the Company with respect to the following items as there were no transactions nor any reporting required on these items for the year under review:

A. The disclosure under Schedule V (A) (2) of SEBI-LODR relating to the accounts of holding Company and subsidiary Company is not applicable to the Company, since your Company does not have any holding or subsidiary or associate Company, nor it is a subsidiary or associate of any other Company.

B. Details relating to deposits covered under Chapter V of the Act.

C. Issue of equity shares with differential rights as to dividend, voting or otherwise.

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

E. No significant or material orders were passed by the regulators or courts or tribunals which may impact the going concern status and Companys operations in future. However, a legal matter is pending at the Supreme Court, details of which is mentioned herein above.

F. Your Company has in place a Policy, in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 and has complied with POSH Committee. No complaint, in this regard, was received by the Committee, during the year.

G. As certified by the RTA, no shares are lying with them which are under demat suspense account or unclaimed suspense account, in terms of Schedule-V- (F) of the SEBI- LODR.

27. Cautionary Statement:

Statements in this report particularly that pertains to management discussion and analysis may contain certain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statement as unforeseen factors could influence the Companys operations such as domestic or international governments policies, adversities that may be caused by situations like natural calamities, war, Covid-19 like pandemic, political and economic developments, risks inherent to the Companys growth and such other factors.

28. Appreciation:

Your Directors place on record their gratitude towards the employees of the Company and convey their sincere appreciations for the hard work and excellent commitment by each of them, during the year under review. They also acknowledge the whole hearted support of the vendors, superstockists, stockiest, investors and all the stakeholders. Your Director also thank all the various Government Departments and Agencies for their co-operation and support throughout. The Directors also appreciate the valuable support of the independent Directors.

For and on behalf of the Board of Directors

Ashish U. Bhuta

Chairman and Managing Director

Mumbai, 27th May, 2022.