The Board of Directors are pleased to present the Companys Thirty Seventh Annual Report and the Companys audited financial statements (standalone and consolidated) for the financial year ended March 31,2021.

Financial Performance

The Companys financial performance (standalone) for the year ended March 31,2021, is summarised below:

(Rs. in lakhs)

Particulars	2020-21	2019-20
Total Income	95,300.80	76,659.65
Profit before Finance Costs, Depreciation, Amortisation and Tax	16,253.81	10,534.35
Finance costs	1,789.75	2,157.14
Profit before Depreciation, Amortisation and Tax	14,464.06	8,377.21
Less: Depreciation & Amortisation	3,967.85	3,127.63
Profit before Tax	10,496.21	5,249.58
Less: Current tax	1,248.29	-
Deferred tax	1,218.43	3,661.57
Profit after Tax	8029.49	1,588.01
Add: Other comprehensive income	(139.25)	(78.74)
Total comprehensive income for the year	7890.24	1,509.27

For the financial year ended March 31, 2021, a Total Income of Rs. 95,300.80 lakhs as against Rs. 76,659.65 lakhs in the previous year.

For the year ended on March 31, 2021, the Company has reported Earnings Before Interest, Finance Cost, Depreciation & Amortization and Tax (EBIDTA) of Rs. 16,253.81 lakhs as against the EBIDTA of Rs. 10,534.35 lakhs during the previous year.

The Net Profit of the Company for the year 2020-21 was Rs. 7,890.24 lakhs compared to Rs. 1,509.27 lakhs during the previous year.

Business Review

During the year under review, your Company continued to grow its top line with both business verticals of GDS (Generic Drug Substances) and CMS (Custom Manufacturing Solutions) contributing to performance. Significant progress was made in some of the key CMS projects that were added to the pipeline in the past eighteen months. In the GDS business, the development of generic peptide APIs is advancing at a steady pace. In a year marked by unprecedented challenges due to the pandemic, your Companys strong focus has been on ensuring operational continuity and meeting customer commitments as per timelines. The changed circumstances have also accentuated the management efforts towards planning for sustainable growth.

Dividend

Your directors are pleased to recommend a final dividend of Rs. 3/-(30%) per equity share on face value of Rs. 10/- each of the Company, for the financial year 2020-21. The dividend, if approved at the 37th Annual General Meeting (AGM), will be paid to those members whose names appear on the register of members of the company as of end of the day on 7 July 2021.

The Board of Directors had earlier approved payment of an Interim Dividend of Rs. 2.00 per equity share (20% Interim Dividend) on the equity share capital of the Company for the financial year 2020-21, amounting to Rs. 2,56,59,778/- which was paid on November 27, 2020. The outflow on account of Dividend (including interim dividend paid) is estimated to be Rs. 6,41,49,445/-.

DIVIDEND DISTRIBUTION POLICY

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, your Company has adopted a Dividend Distribution Policy formulated by the Board specifying the financial parameters, factors and circumstances to be considered in determining the distribution of dividend to shareholders and/or retaining profits earned by the Company. The policy aims to protect the interest of investors by ensuring transparency.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended, is available on the Companys website on www.neulandlabs.com.

Share Capital

The equity shares of your Company continue to be listed and traded on the BSE Limited and National Stock Exchange of India Limited. The paid-up equity share capital of the Company as on March 31,2021 is Rs. 1,290.05 lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

Outlook

Both business verticals of Generic Drug Substance (GDS) and Custom Manufacturing Solutions (CMS) will continue to be pivotal to the growth of your Company. Highest focus will be maintained on quality, technological excellence and transparent partnerships for deepening existing customer relationships as well as attracting new customers. With several steps being taken to strengthen the organisation internally and enhance customer focus, Neuland is confident of being one of the leading API companies not only in the GDS space, where it is a matured player, but also in the CMS space, where it is a relatively newer player.

Consolidated Financial Statements

The Audited Consolidated Financial Statements of your Company as on March 31, 2021, which forms part of the Annual Report, have been prepared pursuant to the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, and also as per the applicable Indian Accounting Standard (IndAS) on Consolidated Financial Statements (IndAS-110) as notified by the Ministry of Corporate Affairs.

The annual accounts of the subsidiary companies are kept for inspection by any member at the Registered Office of the Company as well as at the Registered Office of the respective subsidiary companies and also available on the website of the Company, www.neulandlabs.com. Any member interested in a copy of the accounts of the subsidiaries may write to the Company Secretary at the Registered Office of the Company.

Subsidiaries

Your Company has two subsidiaries, Neuland Laboratories K.K., Japan and Neuland Laboratories Inc. USA, working on market development. Your Company does not have any joint venture or associate companies. Further there has been no material change in the nature of business of the subsidiaries.

A report on the performance and financial position of the subsidiaries, set out in the prescribed form AOC-1 in terms of proviso to sub section (3) of Section 129 of the Companies Act, 2013, as amended from time to time, is provided as Annexure to the consolidated financial statements and hence not repeated here.

Documents uploaded on the Website

The following documents are available on the website of the Company (www.neulandlabs.com) in compliance with Companies Act, 2013, as amended from time to time:

• Annual Return as per section 92

• Unpaid dividend including interim dividend details as per Section 124(2)

• Corporate Social Responsibility Policy as per Section 135(4)(a)

• Nomination and Remuneration policy as per Section 178 (3) and (4)

• Financial Statements of the Company and Consolidated Financial Statements along with relevant documents as per third proviso to section 136(1).

• Separate audited accounts in respect of subsidiaries as per fourth proviso to section 136(1)

• Details of vigil mechanism for directors and employees to report genuine concerns as per proviso to section 177(10)

• Policy on Material Subsidiaries

• The terms and conditions of appointment of independent directors as per Schedule VI to the Act.

Corporate Governance Report, Management Discussion & Analysis and Other Information Required under the Companies Act, 2013 and Listing Agreement

As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time Corporate Governance Report with Certificate from a Practicing Company Secretary thereon and Management Discussion and Analysis report are attached and form part of this report.

Directors and Key Managerial Personnel

The changes taken place in the key managerial personnel during the financial year 2020-21 and as on the date of this report are as under:

S.No. Name	Appointment / Cessation	Designation	Date of appointment / cessation
1 Mr. Davuluri Saharsh Rao1	Appointment	Chief Financial Officer	August 4, 2020
2 Mr. Davuluri Saharsh Rao	Cessation	Chief Financial Officer	September 24, 2020
3 Mr. Deepak Gupta	Appointment	Chief Financial Officer	September 24, 2020

1 Mr.Davuluri Saharsh Rao was appointed as the interim Chief Financial Officer in addition to his role of Vice Chairman & Managing Director, with no change in the terms and conditions of his appointment.

Dr. Christopher M. Cimarusti retires by rotation at the forthcoming 37th Annual General Meeting and being eligible, seeks re-appointment. The profile of Dr.Cimarusti is included in the Report on Corporate Governance and the Notice of the AGM.

Dr. Davuluri Rama Mohan Rao, Executive Chairman, Mr.Davuluri Sucheth Rao, Vice Chairman & Chief Executive Officer, Mr.Davuluri Saharsh Rao, Vice Chairman & Managing Director, Mr.Deepak Gupta, Chief Financial Officer, and Ms.Sarada Bhamidipati,

Company Secretary & Compliance Officer, are the Key Managerial Personnel of the Company as on the date of this Report.

Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee for the year 2021-22 has been paid to both the stock exchanges.

Directors Responsibility Statement-

Pursuant to Section 134(3)(c) of the Companies Act, 2013, as amended from time to time, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them:

a. i n the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. 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 March 31,2021 and of the profit of the Company for the year ended on that date;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, as amended from time to time, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual financial statements have been prepared on a going concern basis;

e. proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

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

Board Meetings

During the year under review, four Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report, which forms part of this report. 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, as amended from time to time.

Composition of various Committees

Details of various committees constituted by the Board as per the provisions of Companies Act, 2013, as amended from time to time, and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, and their meetings are given in the Corporate Governance Report which forms part of this report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the annual evaluation of the performance of the Board, its Committees and of individual directors has been carried out by the Board. The process was carried out by circulating questionnaires on the Board and Committees functioning on certain parameters. The performance evaluation of the independent directors was carried out by the entire Board, except the director being evaluated. The performance evaluation of the non-Independent Directors including Executive Directors was carried out by the Independent Directors.

Independent Directors

The Independent Directors met on February 1, 2021, without the presence of non-Independent Directors and members of the management. The Independent Directors discussed matters pertaining to the Companys affairs and reviewed the performance of non-Independent Directors, the Chairman and the Board as a whole, and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

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

Disclosures by Directors

None of the Directors of your Company is disqualified as per provisions of Section 164(2) of the Companies Act, 2013, as amended from time to time. Your Directors have made necessary disclosures to this effect as required under Companies Act, 2013, as amended from time to time.

Audit Committee

The composition of the Audit Committee and its terms of reference are included in the Report on Corporate Governance annexed. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Nomination and Remuneration Committee

The details of the Nomination and Remuneration Committee are set out in the Report of Corporate Governance, forming part of this Report.

Your Company has a Nomination and Remuneration Policy as required under section 178 of the Companies Act, 2013, as amended from time to time, for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.

Remuneration Policy

The Company has formulated a Nomination & Remuneration Policy which is available on the website of the Company at www.neulandlabs.com. Your Companys Policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered in the policy.

Corporate Social Responsibility

The Company has in place a Corporate Social Responsibility Policy which is available on the website of the Company at www.neulandlabs.com. Further, your Company has incurred an expenditure of 2.48% (88.02 lakhs) of the average net profit of the preceding three years on CSR projects/activities during FY 2020-21.

Annual report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 read with section 134(3) and 135(2) of the Companies Act, 2013, as amended from time to time, has been appended as Annexure-1 and forms an integral part of this Report.

Business Responsibility Report

In accordance with regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Business Responsibility Report (BRR), is forming part of this report as Annexure-2 describing the detailed report on business responsibilities vis-a-vis the nine principles of the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business framed by the Ministry of Corporate Affairs.

Code of Conduct for Board of Directors and Senior Management Personnel

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Board of Directors and Senior Management Personnel of the Company. A declaration to this effect has been signed by the Executive Chairman and forms part of the Annual Report.

Vigil Mechanism/ Whistle Blower Policy

Your Company has a Vigil Mechanism / Whistle Blower Policy which serves as a mechanism for its Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal. The policy also provides access to the Chairperson of the Audit Committee under certain circumstances. The Whistle Blower Policy is available on the website of the Company, www.neulandlabs.com. A brief note on the Whistle Blower Policy is also provided in the Report on Corporate Governance, which forms part of this Annual Report.

Prevention of Insider Trading

Pursuant to Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has adopted the Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons and their Immediate Relatives along with Code of Fair Disclosures.

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to ensure that there is no scope for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has not received any complaints on sexual harassment during the calendar year 2020 and as on the date of this report.

Employee Stock Option Scheme

As on March 31, 2021, no employee stock options available in the Company and hence no disclosures are required to be made under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Statutory Auditors

The financial statements have been audited by M/s. MSKA & Associates (Firm Registration No:105047W), Chartered Accountants, Statutory Auditors of the Company.

The Statutory Auditors were appointed in the AGM held on July 5, 2019 to hold office from the conclusion of the thirty fifth Annual General Meeting until the conclusion of the fortieth Annual General Meeting.

Auditors Report

There are no qualifications, reservations or adverse remarks made by M/s. MSKA & Associates, Statutory Auditors, in their report for the financial year ended March 31,2021.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, as amended from time to time, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, as amended from time to time, the Company has appointed M/s. P.S.Rao & Associates, a firm of Company Secretaries in Practice, to conduct the Secretarial Audit of the Company. The report of the Secretarial Audit for the financial year ended March 31,2021 is annexed to the Corporate Governance Report and forms part of this report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in their report.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, as amended from time to time, subject to the approval of the Central Government, if any required, the Audit Committee has recommended and the Board of Directors had appointed M/s. Nageswara Rao & Co. (Registration No. 000332), Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2021-22.

Insurance

Your Company has taken necessary steps to mitigate risks and obtained appropriate insurances and the Board is kept appraised of the risk assessment and minimization procedures. The assets of the Company have been adequately covered under insurance. The policy values have been determined taking into consideration the value of the assets of the Company.

Material Changes

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of the report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

Energy Conservation, Technology Absorption and 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 Companies Act 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, as amended from time to time, is annexed herewith as Annexure-3.

Extract of Annual Return

Pursuant to Section 92 and Section 134 of the Companies Act, 2013, as amended from time to time, the Annual Return as on March 31, 2021 in form MGT-7 is available on the website of the Company at www.neulandlabs.com.

Particulars of Employees and related disclosures

The information relating to remuneration and other details as required pursuant to Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is provided as an Annexure-4 to this report.

In terms of the provisions of Section 197 of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Pursuant to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report is being sent to the members and other persons entitled thereto, excluding the information in respect of employees of the Company containing the particulars as specified in Rule 5 (2) of the said Rules. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such information, may write to the Company Secretary and the same will be furnished on request.

Related Party Transactions

All contracts / arrangements / transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and at an arms length basis.

During the year, the Company has not entered into any material contract or arrangements with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Further, there were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board may be accessed on the Companys website, www.neulandlabs.com.

The particulars of transactions with related parties in the prescribed format is annexed to this report, as Annexure-5. Members may refer to Note 37 to the standalone financial statement which sets out related party disclosures pursuant to Ind AS.

Particulars of Loans, Guarantees and Investments

The Company has not given any loans and guarantees or made any investments under Section 186 of the Act during the year under review.

Deposits from Public

The Company has not accepted any deposits from the public and as such no amount of principal or interest on deposits from the public was outstanding as on the date of the Balance Sheet.

Significant and Material Orders passed by the Regulators or Courts

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

Risk Management

The Board oversees Companys processes for determining risk tolerance and review managements action and comparison of overall risk tolerance to established levels. The framework is designed to enable risks to be identified, assessed and mitigated appropriately. Major risks identified by the businesses and functions are systematically addressed through appropriate actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which forms part of this Report.

Internal Financial Controls

Internal Financial Controls are an integral part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been embedded and documented in the business processes. The controls in place include essential components of internal financial controls required under the Companies Act, 2013, as amended from time to time, and also the internal financial controls over financial reporting as per the Guidance Note on Audit of Internal Controls over Financial Reporting as issued by Institute of Chartered Accountants of India.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, continuous monitoring by functional owners as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

The Company has in place adequate internal financial controls with reference to financial statements. During the year under review such controls were tested and no reportable material weakness in the design or operation were observed.

Human Resources & Industrial Relations

Your Companys relations with its employees continue to be cordial. Dedicated work by the workmen, supervisors and executives of your Company made it possible to achieve success under trying and difficult circumstances.

Acknowledgement

The Board of Directors would like to place on record its sincere appreciation for the continued support and guidance received from the banks, financial institutions, statutory and regulatory authorities, Ministry of Corporate Affairs, Stock Exchanges and Depositories for their continued support and guidance. The Board places on record its appreciation to the Shareholders of the Company for their continued support and to its valued customers and vendors for their continued patronage. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys employees at all levels.

	For and on behalf of the Board
	Dr. Davuluri Rama Mohan Rao
Place: Hyderabad	Executive Chairman
Date: May 11,2021	(DIN: 00107737)