Mercury Laboratories Ltd Directors Report.


The Members,

Mercury Laboratories Limited

Your Directors have pleasure in presenting the 40th Annual Report of Mercury Laboratories Limited (the Company) on the business and operations of the Company together with the audited financial statements for the financial year ended on March 31, 2021.


The financial performance of the Company for the financial year ended March 31, 2021 along with figures of previous financial year is summarized below:

2020-21 2019-20
Revenue from Operations 6860.15 5726.91
Gross Profit before Depreciation Interest & Tax 1047.10 701.54
Less: Interest 64.14 81.74
Less: Depreciation 192.05 186.88
Profit/(Loss) before Exceptional Items & Tax 790.89 432.90
Exceptional Items - -
Profit/(Loss) before Tax 790.89 432.90
Less: Current Tax including Income Tax of Previous Year & Deferred Tax 257.14 110.09
Profit/(Loss) from Continuing Operations 533.75 322.81
Profit/(Loss) from discontinued operations - -
Tax expense of discontinued operations - -
Profit/(loss) from Discontinued operations (after tax) - -
Profit/(Loss) for the Period 533.75 322.81
Other Comprehensive Income
A (i) Items that will not be reclassified to profit or loss - -
A (ii) Income tax relating to items that will not be reclassified to profit or loss - -
Total other comprehensive income (A (i - ii)) - -
Total comprehensive income for the period 533.75 322.81
"Earning Per Share
Basic 44.48 26.90
Diluted 44.48 26.90

"Equity Shares are at par value of INR 10 per share.

2. Dividend:

Your Directors are pleased to recommend payment of dividend INR 2.00 per equity share of face value of INR 10 each for the year ended on March 31,2021 absorbing Rs. 24.00 Lacs, which will be, if approved, paid to the Shareholders holding shares as on September 21,2021 after business hours. The final dividend is in addition to the interim dividend of INR 1.5 per share declared on February 11,2021 and paid to shareholders on March 01, 2021. Together with the Interim Dividend of INR 1.50 per share, the total dividend for the financial year ended March 31,2021 amounts to INR 3.5 per share absorbing 42.00 Lacs in total. The dividend, if declared, is subject to deduction of Tax at source in accordance with applicable provisions. The Dividend Distribution Policy of the Company is set out as Annexure A.

3. Transfer to Reserves:

Your Company has transferred an amount of INR 350.00 Lacs to the General Reserve during for the Financial Year ended on March 31, 2021.

4. Financial Performance and Operations Review:

During the year under review, the Company yielded Revenue from operations of INR 6860.15 lacs and earned Gross Profit before depreciation, interest and tax of INR 1047.10 lacs with Net Profit of INR 533.75 Lacs as against Revenue from operations of INR 5726.91, Gross Profit before depreciation and Interest and tax of Rs. INR 701.54 lacs with Net Profit of 432.90 INR 322.81 Lacs of previous year, respectively.

5. Future Prospects:

During the FY 2020 - 2021, the COVID 19 pandemic took the world with surprise and swept almost all the countries under its effect. The Governments decision of an early lockdown assisted to slowdown spread of the Virus and gave time to healthcare community to prepare for outbreak. Your company being the Pharmaceutical Manufacturing Company dealing into manufacturing of Medicines related to Mother and Child Care. Operations of the Company had been continued during national lockdown and the Company was complying with the requirements related to Social Distancing and mandatory to wear face mask and have proper sanitizations. Company had implemented strict measures of ensuring social distancing, hygiene practices and deep cleansing of premises to ensure the safety for our workers staff & community at workplace. Company was affected due to Covid-19 Pandemic substantially as the entire nation and world badly affected due to number of reasons.

• Due to lockdown in India, our number of associates who were supplying raw materials, packing materials, printing materials were closed and we were unable to procure it. Additionally transportation was not availablelo bring from one destination to another destination.

• Due to lockdown and social distancing our man power and supervisors was reduced to about 50% - 60%. Some of them were not coming due to red zone, lockdown and non-availability of transportation. In view of above and shortages of airinputs and workers production activity came down to 40% to 50% of the normal productivity.

• Due to national lockdown, our domestic marketing activity came to almost fullstop as most of the cities did not allowed medical representative to make personal calls and also intrastate and interstate travelling were not permitted. Most of medicals professionals closed down their clinic due to Covid 19 that has affected our business.

• Due to lack of transportation and logistics, Company is experiencing difficulties in supply chain. We have noticed the delivery period of our goods has increased 2 to3 fold in most of tne locations.

• Due to the low volume of business from March end it has affected our collection and liquidity, revenue and profitability substantially.

At present this Covid-19 Pandemic has taken a stall in India and all over the world. Most of the countries economy goes de-growth and borrowed heavily from the market and from world bank.

There was chaos on non-availability of ICU beds, oxygen cylinders, medicines, ventilators.

During Covid-19 Pandemic, India was recognized reliable source of medicines, vaccines and health related issues. Most of the countries recognized Indian Pharma Companies by video and submitting documents and approved their productforthe importation.

Our worst experience of Covid-19 pandemic brought awareness and new thoughts as government of India allotted more fund for health related and that includes creation of centre and Health care medical support, creation of medical colleges and Nursing service centres so that more doctors and nurses can be made available. Government and the Pharma companies invested heavily on their expansion.

Looking to the above scenario, the management strongly believe that, pharma industries of India will increase their productivity and meet their demands of national market as well as international market medicines, medical equipment, surgical items etc. Management sees very bright and prosperous future of the Company.

We are exercising prudence in managing costs to conserve cash, we continue to prioritise investments in capacity for key projects, quality systems, compliance, safety, and digitisation to shape the future of Mercury Laboratories. Capacity creation and allocations for key products are also taking place keeping the long term in perspective. We are systematically undertaking digitisation across functions and working towards integration at an organisational level, which will be critical for sustainability as an organisation. An important pillar of our future preparedness is the investments we are making in our people. We are building a strong leadership team and hiring the right talent to address the needs of our customers and realise our strategic priorities. The future belongs to organisations that are resilient and can quickly adjust to the reality of the market. Accordingly, Mercury Laboratories will continue to stay focused on building on its agility to maximise value creation.


As stipulated by regulation 34(3) read with Schedule V(B) of the Listing Regulations, Management Discussion and Analysis forms parts of this report.

a) Industry Structure and Development

The Governments concerted push towards the pharma sector through initiatives such as Make in India, Ayushman Bharat Scheme, National Digital Health Mission etc., has cemented India as a leading global capital market. Production linked incentive (PLI) scheme for the pharma industry worth 15,000 crores ($2.04 billion) to promote domestic manufacturing of critical key starting materials (KSM), drug intermediates, and active pharmaceutical ingredients (APIs) making India a leading supplier. The Government has approved a total of 33 applications with a committed investment of Rs.5,082.65 crores under a separate PLI scheme for APIs Increased thrust on rural health programmes, lifesaving drugs and preventive vaccines Plan for a mega bulk drug parks to reduce raw material dependence on imports The Union Budget 2021-22 saw an unprecedented increase in allocation for health sector like Increased spending on healthcare from 1.2% of the GDP to 2.5% of the GDP

64,180 crores allocation for the Atmanirbhar Swasth Bharat Yojana for development of primary, secondary, and tertiary healthcare over a period of six years, 2,23,846 crores budget outlay for health and well-being for FY 2022, an increase of 137% over previous year, 35,000 crores outlay for Covid-19 vaccines and national rollout of pneumococcal vaccines to help save over 50,000 lives annually ,6,429 crores for health insurance scheme, Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana

Key growth factors of the pharma sector The Indian pharma sector growth looks promising given strong Government focus on improving accessibility, increasing affordability and growing acceptability of pharma. The Government has taken several initiatives like massive inoculation drive, Atmanirbhar Swasth Bharat Yojana to develop capacities of primary, secondary, and tertiary healthcare systems, focus on Medical Value Travel, launch of PM-JAY to increase penetration of health insurance, $200 billion investment on medical infrastructure over 10 years, Ayushman Bharat Yojana, Pradhan Mantri Bhartiya Janaushadhi Pariyojana, focus on medical education etc.

b) Outlook, Risks and Concerns

While the outlook for the business environment gradually improved, the second wave of COVID-19 emerged in India in April and May 2021 and its economic impact remains uncertain. Although our clients are better prepared to address the challenges, we continue to remain vigilant across our portfolio to mitigate any potential risks by supporting our clients to ensure construction progress across the projects in our portfolio. We believe that our provisions should be enough to take care of future contingencies that may arise due to COVID-19.

World economic overview

The year 2020 posed significant challenges for economies across the globe with lockdowns posing a threat of deep recession. However, sizeable, swift and unprecedented fiscal, monetary and regulatory responses by most Governments helped to maintain disposable income for households, protect cash flow for firms, and support credit provision. The global contraction for 2020 is estimated at 3.5%, led by Chinas quick recovery and better than expected GDP outturns in large advanced economies.

New large economies have raised hopes of a turnaround in 2021 with growth expectations of 5.5% followed by 4.2% in 2022. Across countries, recovery levels may vary significantly depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spill overs, and structure

Global Pharma Market

The demand for healthcare and innovative solutions is growing globally with chronic diseases on the rise. The global pharmaceuticals market is expected to grow from $1,228.45 billion in 2020 to $1,250.24 billion in 2021 at 1.8% CAGR. The slowdown in growth is mainly due to the companies rearranging their operations and recovering from the Covid-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities causing operational challenges. The market is expected to reach $1,700.97 billion in 2025 at 8% CAGR.

North America was the largest region in the global pharmaceuticals market, accounting for 46% of the market in 2020, owing to increasing prevalence of chronic diseases and skyrocketing number of Covid-19 cases in the US. Asia-Pacific was the second largest region accounting for 26% of the global pharmaceuticals market. Africa was recorded as the smallest region in the global pharmaceuticals market. The global pharmaceuticals market is projected to rise at a considerable pace driven by the increasing investments in product R&D. The efforts put in to develop efficient products will bode well for the growth of the overall market in the coming years.

c) Financial Performance and Operation Review

During the year under review, the Company yielded Revenue from operations of INR 6860.15 lacs and earned Gross Profit before depreciation, interest and tax of INR 1047.10 lacs with Net Profit of INR 533.75 Lacs as against Revenue from operations of INR 5726.91, Gross Profit before depreciation and Interest and tax of INR 701.54 lacs with Net Profit of INR 322.81 Lacs of previous year, respectively.

The Companys business in the emerging markets also suffered due to significant currency fluctuations and regulatory issues. The Company is implementing comprehensive remedial measures at all its manufacturing sites to ensure quality and regulatory compliances. These remedial measures included review of all processes and procedures revamping of training system, recruitment of senior quality personnel as well as automation of quality control laboratories. Your company is committed in resolving these issues at the earliest. The Company is also committed to its philosophy of highest quality in manufacturing, operations, system, integrity and GMP culture. Your management is confident that implementation of remedial measures will ensure that the company will regain all its regulatory approvals.

Rs. in Lacs
Break-up of Sales 2020 - 21 2019-20 Growth/In terms of Value Degrowth) In terms of %
Domestic 3492.10 3851.16 (359.06) -9.32
Erga Sales 0 67.17 (67.17) (100.00)
Grace Division 254.62 0.00 254.62 100.00
Deemed Exports 1301.34 874.34 427.00 48.84
Direct Exports 1812.08 934.25 877.83 93.96
Total 6860.14 5726.92 1200.39 133.48

During the financial year under report, the domestic sales of products of the Company amounted to INR 5048 lacs as against INR4792.67 lacs in the previous year which reflect Increase of 5.33% and in value INR 255.39 Lacs. Whereas the International Business (export) amounted to INR 1812.1 Lacs as against INR 934.25 lacs in the previous year which was Increase by 93.96% and in value INR 877.83 Lacs.

d) Internal Control System and its adequacy

The Company has adequate internal control system including suitable monitoring procedures commensurate with its size and the nature of the business. The internal control system provide for all documented policies, guidelines, authorization and approval procedures. The Company has an internal auditors which carries out audits throughout the year. The statutory auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit Committee of the Board. Further the Company has in place adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.

e) Human Resources

The human resources plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees across various locations. At the core of our success are our people and have been working towards keeping them engaged and inspired.

During the year under review, various trailing and development workshops were continued to be conducted to improve the competency level of employees with an objective to improve the operational performance of individuals. The company has built a competent team to handle challenging assignments.

The Company strives to enhance the technical work, related and general skills of employees through dedicated training programs on a continuous basis. The Company has 660 employees as on March 31,2021.

f) Formulation and Developments

Company always considering Formulation and Development as crucial for sustain growth of the Company. Company always try to introduce newer and newer drugs delivery system for ensuring products available as regard to time and enhancing therapeutic value.

To achieve this objective we have experienced and qualified pharmacists whose activity is to maintain and find out newer and newer delivery system as well as re-engineering innovative process. This will held the Company to maintain material consumption ration.

g) Cautionary Statement

Certain statement in the management discussion and analysis may be forward looking within the meaning of applicable securities law and regulations and actual results may differ materially from those expressed or implied. Factors that would make differences to companys operations include competition, price realization, Drugs Price Controls, currency fluctuations, regulatory issues, changes in government policies and regulations tax regimes, economic development within India and the Countries in which the company conducts business and other incidental factors.

6. Directors Responsibility Statement

Your Directors state that:

a. In the preparation of annual accounts for the year ended March 31, 2021, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed 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 at March 31,2021 and of the Profit of the Company for the year ended on that date;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the this Act 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 Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. 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.

7. Directors and Key Managerial Personnel

During the year under review, following changes occurred in the position of Directors/KMPs of the Company:

a. Mr. Paresh J Mistry Director of the Company who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The retirement of director by rotation at the ensuing Annual General Meeting is determined in accordance with the provisions of the Companies Act, 2013.

b. Ms. Enu Khandelwal was appointed as Chief Finance Officer of the Company with effect from August 07, 2020.

c. Mrs. Poornima Karvat whose term of appointment as an Independent Director was valid upto March 30, 2020. At the meeting of Board of Directors held on February 05,2020 on the recommendation of Nomination and Remuneration Committee of the Company, she was re-appointed as an Independent Directorfor further period of 5 years subject to approval of the shareholder at the ensuing Annual General Meeting. However in view of health issue and preoccupation, she had resigned from Directorship with effect from May 30,2020.

d. At the meeting of Board of Directors of the Company held on February, Board approved appointment of Mr. Rajendra RShah as Managing Director of the Company forfurther period of 3 years with effect from April 01, 2020. Subsequently His appointment was also approved by the shareholders at the Annual General Meeting held on September29,2020.

e. At the meeting of shareholders held on September 29,2020, appointment of Mrs. Janki R Shah as Director of the Company was also approved by shareholders of the Company.

Necessary resolutions for appointment/reappointment of the aforesaid directors and their detailed profiles have been included in the notice convening the ensuing AGM and details of proposal for appointment/reappointment are mentioned in the explanatory statement of the notice. Your directors commend their appointment/re-appointment.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company except Mr. Paresh J Mistry who is being paid of holding position of Purchase Manager in the Company and Mr. Divakant Zaveri being paid professional fees.

Key Managerial Personnel as at March 31,2021 are as under:

1. Mr. Rajendra R Shah, Managing Director

2. Miss. Kinjal Khandelwal (w.e.f27.07.2019)

3. Miss. Enu Khandelwal (07.08.2020)

8. Number of Meetings of the Board

Five Meetings of the Board were held during the year on May 30, 2020, July 04, 2020, August 07, 2020, November 06, 2020 and February 11,2021. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this report.

9. Policy on DirectorsAppointment and Remuneration and other details

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act may be accessed on the Companys website at the link:

10. Board Evaluation

Pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

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 and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

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 members 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 (NRC) 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 aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

11. Internal Financial Control Systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

12. Audit Committee

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

13. Share Capital

The paid-up Equity Share Capital of the Company as at March 31,2021 is INR120 Lacs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS.

14. Risk Management

Risks are events, situations or circumstances which may lead to negative consequences on the Companys businesses. Risk management is a structured approach to manage uncertainty. Aformal enterprise wide approach to Risk Management is being adopted by the Company and key risks is getting managed within a unitary framework. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

15. Safety, Environment and Health

The Company considers safety, environment and health as the management responsibility. Regular employee training programs are carried out in the manufacturing facilities on safety, environment and health.

16. Particulars of Loans, Guarantees or Investments

The Company has not provided any loans and guarantees and no investments made pursuant to Section 186 of the Companies Act, 2013 during the year ended on March 31,2021.

17. Particulars of contracts or arrangements with related parties:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis and in compliance of the provisions of Section 188 of the Companies Act, 2013 & rules made there underand Listing Agreement & SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

The Company had not entered into any contract /arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company. The Policy dealing with related party transactions as approved by the Board may be accessed on the Companys website at the link: All the related party transactions are placed before the Audit Committee as also Board for approval/Ratification.

Prescribed form AOC - 2, pursuant to Section 134 (3) (h) of the Companies Act, 2013 & Rule 8(2) of the Companies (Accounts) Rules, 2014, is furnished as Annexure - B to this report.

18. Corporate Social Responsibility (CSR)

As Per Amendment and section 135 Though not mandatory in terms of Section 135 of Companies Act, 2013, the Company has formulated Corporate Social Responsibility (CSR) Policy in accordance with Section 135 of the Companies Act, 2013 and reconstituted CSR Committee with on May 14, 2015 with Mr. D. R. Zaveri and Mr. Bharat Mehta, Two Independent directors and Mr. Rajendra R Shah, Managing Director and Dilip Shah, Director of the Company.

Subsequent to resignation of Ms. Poornima Karvatwith effect from May 30,2020, CSR Committee was reconstituted on May 30,2020 as under:

Sr. No. Name of Director Category
01 Mr. Rajendra R Shah Chairman & Member
02 Mr. Divyakant Zaveri Member
03 Mr. Bharat Mehta Member
04 Mr. Dilip Shah Member

However the Company has been pursuing CSR activities in the area of promotion of education in medical field by providing scholarship and other amenities to the medical students. The CSR policy of the Company is placed on the website of the

19. Policy on prevention, prohibition and redressal of sexual harassment at workplace

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 workplace 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.

The Company has not received any complaint of sexual harassment during the financial year 2020-21. The policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at work place is placed on website of the

20. Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy is posted on the website of the

21. Significant and material orders passed by the regulators or courts.

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

22. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed asAnnexure-C.

23. Particulars of Employees and Remuneration

Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, no employee ofthe Company was paid remuneration exceeding the prescribed limits, during the financial year2020-21

The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-D forming part of the Report. None of the employees listed in the said Annexure is related to any Director of the Company.

24. Auditors & Their Reports

(1) Statutory Auditors:

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, at the Annual General Meeting held on September 14,2018, M/s. R J Shah & Associates, Chartered Accountants, has been appointed as Statutory Auditor of the Company to hold office till conclusion of 41 st annual general meeting to be held in the year 2022. The Companies (Amendment) Act, 2017 has waived the requirement for ratification of the appointment of Statutory Auditors by the Shareholders at every Annual General Meeting. Hence, the ratification of appointment of Statutory Auditors by your company is not required. Accordingly Statutory Auditor will continue to hold office till the conclusion of the 41 st Annual General Meeting of the Company.

The Auditors Report for the financial year 2020-21 does not contain any qualification, reservation or adverse remark which requires any clarification/ explanation. The Auditors Report is enclosed with the financial statement in this Annual Report. There was no instance of fraud during the year under review, which required the statutory auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act, and the rules made thereunder. The Notes on accounts, referred to in the Auditors Report, are self explanatory and therefore do not call for any further comments.

(2) Secretarial Auditors:

Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Board of Directors of the Company had appointed M/s. Mitesh Rana & Co. a firm of Company Secretaries to carryout Secretarial Audit for the year ended on March 31,2021. The Secretarial Audit Report is annexed as Annexure-E.

The Auditors" Report and the Secretarial Audit Report for the financial year ended March 31,2021 do not contain any qualification, reservation, adverse remark.

The Company has complied with the provisions of Secretarial Standards on Board Meetings and General Meetings issued by the Institute of Company Secretaries of India and approved by the Central Government

The Board of Directors of your Company has appointed M/s. Mitesh Rana & Co., Company Secretaries, Vadodara to carry out Secretarial Audit of your Company for FY 2021 -22.

(3) CostAuditors:

Pursuant to the provisions of Section 148 read with Companies (Cost Records and Audit) Amendment Rules, 2014 and as recommended by the Audit Committee, the Board had appointed M/s. V.M. Patel & Associates, Practicing Cost Accountants, who have given their consent to act as Cost Auditors and laid on the table the consent letter received from them & confirmed that his appointment met the requirements of Section 141 (3)(g) of the Act for the year 2021-22 and that he was free from disqualification as specified under section 141 read with Section 148 of the Act.

In terms of Rule 14 of the Companies (Audit and Auditors) Rule, 2014, remuneration payable to the cost auditors is required to be ratified by members. Accordingly an ordinary resolution will be passed by members at the 40th Annual General Meeting approving the remuneration payable to M/s. V.M. Patel & Associates.

(4) Internal Auditors

The Board of Directors appointed M/s. K R & Associates as Internal Auditors of the Company for financial year 2021-22.

25. Deposits:

The Company has no unpaid and/or unclaimed deposit. The Company has accepted deposit from Directors and their relatives, the Shareholders and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.

The details relating to deposits, covered under Chapter V of the Act are as under:

Particulars Amt. in INR (Lacs)
Accepted during the year from the Members None
Remained unpaid or unclaimed as at the end of the year None
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year; None

26. Extract of Annual Return

The extract of annual return is given in Annexure-F which forms part of this report. As required under Section 92(3) and 134(3) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), an extract of Annual Return is made available on the website of the Company at the web-link

27. Material Change & Commitments, if any

There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of directors report.

28. Corporate Governance Report

As stipulated by Regulation 34(3) read with Schedule V(C) of the Listing Regulations, Corporate Governance Report forms part of this Annual Report Annexed to the said report is the Auditors Certificate as prescribed under Schedule V(E) of the Listing Regulations certifying compliance with conditions of corporate governance.

29. Independent Directors

The Independent Directors of the Company have given the declaration and confirmation to the Company as required under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet the criteria of independence and that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence

The Board of Directors of the your company confirms that the Independent Directors fulfill the conditions specified in Section 149 (6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management.

In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the Independent Directors was held on February 11,2021.


During the year under review, there had been no change in the Companys nature of business.

31. Acknowledgment

The Board of Directors wish to place on record their appreciation for the continued support extended by the Bankers, Business Associates, clients, vendors and suppliers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company

On behalf of the Board of Directors,
Date: May 27, 2021
Rajendra R. Shah Dilip R Shah
Managing Director Director
DIN: 00257253 DIN: 00257242
Place: Vadodara Place: USA