tarsons products ltd share price Directors report


Dear Shareholders,

Your Directors take pleasure in presenting the 39th Annual Report of the Company, together with the audited financial statements (Standalone and Consolidated), prepared in compliance with Ind AS Accounting Standards, for the year ended 31st March, 2022.

STATE OF COMPANYS AFFAIR AND BUSINESS OVERVIEW

The Company (Tarsons) is an Indian labware Company engaged in designing, development, manufacturing and marketing of consumables, reusables and others including benchtop equipment, used in various laboratories across research organizations, academia institutes, pharmaceutical companies CROs, diagnostic companies and hospitals. The Company is also engaged in the manufacturing of wide range of quality labware products which helps scientific discovery and improve healthcare. Tarsons currently operate through five manufacturing facilities located in West Bengal. The Company cater to a diverse range of end customers across various sectors which include research organizations, academic institutions, pharmaceutical companies, CROs, diagnostic companies and hospitals and distribute the products to these end customers on a pan-India basis through authorized distributors. The Company supply products to life sciences industry under the brand label

"TARSONS WITH THE WORDS -TRUST DELIVERED™".

A key focus of the business is promoting and maintaining operational quality, a people-centric culture and an effective technology system thus, offering and contributing to the Companys growth. The Company possesses following competitive strengths:

• Strong customer proposition

• Brand positioning for millennials

• Vertically managed and scalable supply chain

• Huge distribution network

• Strong production capability and automation

• Operational quality, a people-centric operating culture, and effective technology systems

• Experienced and professional management team

More details on the state of Companys affair and business overview are discussed in the Management Discussion & Analysis Report forming part of this Annual Report.

FINANCIAL SUMMARY & PERFORMANCE HIGHLIGHTS

The standalone and consolidated Financial Statements for the Financial Year ended 31st March, 2022, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standard (hereinafter referred to as "Ind AS") prescribed under Section 133 of the Companies Act, 2013 and other recognized accounting practices and policies to the extent applicable. Necessary disclosures with regard to Ind-AS reporting have been made under the Notes to Financial Statements. The Companys performance during the financial year under review as compared to the previous financial year is summarized below:

(Rs in millions)

Particulars Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Revenue from Operations 3,007.94 2,289.11 3,007.94 2,289.11
Other Income 84.67 53.80 84.67 53.80
Total Income 3,092.61 2,342.91 3,092.61 2,342.91
Profit before Finance Cost, Depreciation, and Tax 1,611.66 1,088.18 1,611.66 1,088.18
Finance Cost 42.16 27.22 42.16 27.22
Depreciation 219.61 136.62 219.61 136.62
Share of Profit/(Loss) of Subsidiary - - - -
Profit Before Tax (PBT) 1,349.89 924.34 1,349.89 924.34
Current Tax 332.48 234.73 332.48 234.73
Deferred Tax 10.77 0.91 10.77 0.91
Net Profit After Tax (PAT) 1,006.64 688.70 1,006.64 688.70
Other Comprehensive Income (Items that will not be reclassified subsequently to Profit or Loss) 2.06 (1.02) 2.06 (1.02)
Total Comprehensive Income for the Year 1,008.70 687.68 1,008.70 687.68
Earnings per equity share
Basic earnings per share (in Rs) 19.46 13.43 19.46 13.43
Diluted earnings per share (in Rs) 19.46 13.43 19.46 13.43

Note: 1. Figures in brackets represent deductions.

2. Previous years figures have been regrouped/reclassified wherever necessary to correspond with the current years classification/disclosure.

During the year under review, the revenue from operations and other income was Rs 3092.61 million on standalone basis as compared to the last years revenue of Rs 2342.91 million on standalone basis. The Company has achieved Profit Before Tax of Rs 1349.89 million and Profit After Tax of Rs 1006.64 million on standalone basis as on 31st March 2022 as against previous years Profit Before Tax of Rs 924.34 million and Profit After Tax of Rs 688.70 million on standalone basis. The Company achieved a total Comprehensive Income of Rs 1008.70 million. The EPS on standalone financials for the year ended on 31st March, 2022, was Rs 19.46.

More details on the financial statements of the Company along with various financial ratios are available in the Management Discussion & Analysis Report forming part of this report.

IMPACT OF COVID-19 PANDEMIC

In order to support people, battle the challenges posed by the pandemic, the Company launched several initiatives on multiple fronts for prevention and treatment of COVID-19 by leveraging its capabilities in continuous manufacturing and supplying of labware products.

Stringent measures have been put in to safeguard employees. Thermal scanning is done to check body temperature at all entry points. Hand sanitizers are placed at vantage points all across the Office and Factories. Disposable masks have been made available. As a part of the protocols in most of the areas inside the plant and factories area and all across the offices, employees need to wear masks wherever required.

The Company has continued to operate and provide services to its customers, without any significant disruptions during COVID-19 crisis. The Company has evaluated its liquidity position and of recoverability and carrying values of its assets and accordingly, at present the management does not see any medium to long term risks in the Companys ability to continue as a going concern and meeting its liabilities as and when they fall due.

DIVIDEND & APPROPRIATIONS

The Board of Directors of your company, after considering holistically the relevant circumstances, has decided that it would be prudent, not to recommend any Dividend for the financial year ended 31st March, 2022.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Company has formulated Dividend Distribution Policy taking into account the parameters prescribed in the said Regulations. The Dividend Distribution Policy is available on Companys website at https://tarsons.com/wp-content/uploads/2022/06/Dividend- Distribution-Policy.pdf.

TRANSFER TO RESERVES

The Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire of profits for the financial year ended 31st March, 2022 in the profit and loss account.

CONVERSION FROM PRIVATE LIMITED TO PUBLIC LIMITED COMPANY

During the financial year ended 31st March, 2022, the Company has been converted from a Private Limited Company to Public Limited Company w.e.f. 14th June, 2021.

INITIAL PUBLIC OFFERING (IPO) AND LISTING

During the year, the Company made an Initial Public Offering ("IPO") of 15,465,861 equity shares of face value of Rs 2 each of the Company for cash at a price of Rs 662 per equity share (including a share premium of Rs 660 per equity share) aggregating to Rs 10,235.41 million, comprising of a fresh issue of 2,265,861 equity shares (including 49,081 equity shares issued to the employees at a price of Rs 601) aggregating to Rs 1,497.01 million and an offer for sale of 13,200,000 equity shares aggregating to Rs 8,738.40 million comprising of 390,000 equity shares by Mr. Sanjive Sehgal aggregating to Rs 258.18 million, 310,000 equity shares by Mr. Rohan Sehgal aggregating to Rs 205.22 million, the Promoters of the Company and 12,500,000 equity shares aggregating to Rs 8,275.00 million by Clear Vision Investment Holdings PTE. Limited, the Investor.

The issue opened on 15th November, 2021 and closed on 17th November, 2021. The issue was led by book running lead managers viz., ICICI Securities Limited, Edelweiss Financial Services Limited and SBI Capital Markets Limited.

The issue was subscribed 77.49 times, amid huge interest from institutional investors. The Companys paid-up share capital consisting of 53,206,281 equity shares were listed and admitted for dealing on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) with effect from 26th November, 2021, subject to fulfillment of lock-in conditions on certain shares.

SHARE CAPITAL

a) Authorized Share Capital

During the financial year under review, the Company at its Extra-Ordinary General Meeting held on 10th May, 2021 re-classified its Authorized Share Capital from Rs 1,15,00,000/- (Rupees One Crore Fifteen Lakhs only) divided into 11,50,000 (Eleven Lakhs Fifty Thousand) equity shares of Rs 10/- (Rupees Ten only) each to Rupees 20,00,00,000/- (Rupees Twenty Crores only) divided into 2,00,00,000 (Two Crores) Equity Shares of Rs 10/- (Rupees Ten only) each and accordingly capital clause of Memorandum of Association was altered.

The Company in its Extra-Ordinary General Meeting held on 16th June, 2021 approved to subdivide the existing authorized share capital of the Company from Rs 20,00,00,000 (Rupees Twenty Crores) consisting of 2,00,00,000 (Two Crores) equity shares of face value of Rs 10/- (Rupees Ten only) each to Rs 20,00,00,000 (Rupees Twenty Crores) consisting of 10,00,00,000 (Ten Crores) equity shares of face value of Rs 2/- (Rupees Two only) each. Therefore, the cumulative number of issued, subscribed and paid-up Equity Shares, pursuant to sub-division was increased from 1,92,228 (One Lakh Ninety-Two Thousand Two Hundred Twenty-Eight) equity shares of 10 (Rupees Ten only) each to 9,61,140 (Nine Lakhs Sixty-One Thousand One Hundred Forty) equity Shares of 2 (Rupees Two only) each.

b) Issued, Subscribed and Paid-up Share Capital

During the financial year under review:

1) The Company in its Extra-Ordinary General Meeting held on 16th June, 2021 approved the bonus issue of 52 (Fifty- Two) equity shares of face value of Rs 2/- (Rupees Two only) each for every one existing fully paid-up equity share of face value Rs 2/- (Rupees Two only) each and accordingly 4,99,79,280 (Four Crores Ninety-Nine Lakhs Seventy-Nine Thousand Two Hundred and Eighty) bonus shares were issued and allotted. The Bonus shares were allotted in the Board meeting held on 26th June, 2021.

2) The Company issued and allotted 22,65,861 equity shares of face value of Rs 2/- (Rupees Two only) each by way of fresh issue through IPO of the Company.

With the said allotment, Paid-up Share Capital of the Company has increased to Rs 10,64,12,562/- (Rupees Ten Crores Sixty-Four Lakhs Twelve Thousand Five Hundred and Sixty-Two Only) divided into 53,206,281 (Five Crores Thirty-Two Lakhs Six Thousand Two Hundred and Eighty-One) equity shares of Rs 2/- (Rupees Two Only) each as on 31st March, 2022.

c) Utilization of Proceeds of IPO

Pursuant to the Regulation 32 of the Listing Regulations, a statement/explanation for the deviation(s) or variation(s) in the use of proceeds of IPO is herein given below:

Particulars of Issue Shares Issued Amount Raised Deviation(s) or Variation(s) in the use of proceeds of issue, if any
IPO 22,65,861 equity shares of face value of Rs 2/- (Rupees Two only) each by way of fresh issue through IPO of the Company. Rs 1,49,70,06,041/- (Rupees One Forty-Nine Crores Seventy Lakhs Six Thousand and Forty-One only) through fresh issue. There were no instances of deviation(s) or variation(s) in the utilization of proceeds as mentioned in the objects stated in the Prospectus in respect of the IPO issue of the Company.
The proceeds of IPO were utilized for the objects as disclosed in the Prospectus. Details as on 31st March, 2022 are as follows:
Sl. No. Name of the Object Brief description of the object Amount as proposed in Offer Document (Rs in millions) Amount utilized (Rs in millions) Total unutilized Amount (Rs in millions)
1. Funding capital expenditure for the Proposed Expansion To be utilized for the construction of New Plant at Panchla, West Bengal. 620.00 0.00 620.00
2. Repayment/prepayment of certain borrowings of the Company To be used for the repayment of Loan Liabilities of Company 785.40 779.87 5.53
3. General corporate purposes To be used for the General requirement of the Company. 16.21 0.18 16.03
4. Offer related expenses in relation to the Fresh Issue To be used to meet the expenses of the offer. 74.73 40.35 34.38
5. Amount received on account of lower subscription of Employee Reserved Shares To be added to General Corporate purposes. 0.67 0.00 0.67
Total 1497.01 820.40 676.61

DETAILS OF SUBSIDIARY, JOINT VENTURES AND ASSOCIATES/CONSOLIDATED FINANCIAL STATEMENTS

The Company has one subsidiary i.e., Inlabpro Pte. Limited, which was incorporated on 20th July, 2020 with paid-up capital of USD 1 divided into 1 equity shares, in Singapore. However, on account of COVID-19 pandemic and not being commercially viable, the Board of Directors passed a resolution on 14th June, 2021 to wind up the Subsidiary. Accordingly, an application for winding up has been filed and the same is under process.

Inlabpro Pte. Limited has not been operational since its incorporation and hence, on account of it being wound-up, there will be no adverse impact on the Company.

The Company has prepared Consolidated Financial Statements in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS). The audited standalone and consolidated financial statements of the Company along with the financial statements of Subsidiary are also available on the website of the Company at www.tarsons.com. A statement containing salient features of the financial statements of the Subsidiary pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, is given in Form AOC-1 being marked as "Annexure-I" to this Report.

During the financial year under review, there were no Companies which has become/ceased to become a Joint Venture/Associate Company.

DIRECTORS & KEY MANAGERIAL PERSONNEL DIRECTORS

The Board of Directors holds fiduciary position and is entrusted with the responsibility to act in the best interests of the Company. The Board at its meetings deliberate and decide on strategic issues including review of policies, financial matters, discuss on business performance and other critical matters for the Company. Committees constituted by the Board focus on specific areas and take informed decisions within the framework of the delegated authority and responsibility and make specific recommendations to the Board on matters under its purview. Decisions and recommendations of the Committees are placed before the Board for consideration and approval as required.

Composition of Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Non-Independent Director and Non-Executive Independent Directors including Women Director in accordance with the provisions of Companies Act, 2013 and Regulation 17 of Listing Regulations. All the Directors have rich experience and specialized knowledge in sectors covering law, finance, accountancy and other relevant areas.

As on 31st March, 2022, the Board consisted of six directors comprising of three Non-Executive Independent Directors including a woman director, namely, Mr. Viresh Oberai (DIN: 00524892), Mr. Girish Paman Vanvari (DIN: 07376482) and Ms. Sucharita Basu De (DIN: 06921540), one Non-Executive Nominee Director, namely, Mr. Gaurav Pawan Kumar Podar (DIN: 08387951) and two Executive Directors, namely, Mr. Sanjive Sehgal (DIN: 00787232) and Mr. Rohan Sehgal (DIN: 06963013). The Chairman of the Company is an Executive Director. The profile of all the Directors can be accessed on the Companys website at https://tarsons.com/directors-officers/.

None of the Directors of the Company have incurred any disqualification under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. All the Directors have confirmed that they are not debarred from accessing the capital market as well as from holding the office of Director pursuant to any order of Securities and Exchange Board of India or Ministry of Corporate Affairs or any other such regulatory authority. In the view of the Board, all the directors possess the requisite skills, expertise, integrity, competence, as well as experience considered to be vital for business growth.

The composition of Board of Directors and detailed analysis of various skills, qualifications and attributes as required and available with the Board has been presented in the Corporate Governance Report.

Mr. Girish Paman Vanvari (DIN: 07376482) and Ms. Sucharita Basu De (DIN: 06921540), has been appointed as Non-Executive Independent Directors of the Company for a consecutive term of five years w.e.f. 10th May, 2021 and their appointment was regularized and approved in the Extra Ordinary General Meeting held on 10th May, 2021. In the opinion of the Board, both the Directors are a person of integrity and possesses relevant experience and expertise.

Mr. Suresh Eshwara Prabhala (DIN: 02130163) and Mr. Ashok Kumar Duggar (DIN: 08186964), Non-Executive Directors of the Company, tendered resignation from the Board of the Company w.e.f. 26th July, 2021, due to personal reasons. The Board of Directors placed on record their sincere appreciation for the contributions made by both Mr. Suresh Eshwara Prabhala and Mr. Ashok Kumar Duggar during their tenure as Directors of the Company.

Pursuant to the provisions of Section 152(6) (d) of the Act read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of Association of the Company, Mr. Sanjive Sehgal (DIN: 00787232) will retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Information regarding the directors seeking re-appointment as required by Regulation 36 of the Listing Regulations and Secretarial Standard-2 has been given in the notice convening the ensuing Annual General Meeting.

KEY MANAGERIAL PERSONNEL

Mr. Ravi Prakash Mundhra was appointed as the Company Secretary and Compliance Officer w.e.f. 10th May, 2021 and ceased to be the Company Secretary and Compliance Officer w.e.f. 26th July, 2021.

Mr. Piyush Khater was appointed as the Company Secretary and Compliance Officer w.e.f. 28th July, 2021 and ceased to be the Company Secretary and Compliance Officer w.e.f. 10th January, 2022.

Mr. Santosh Kumar Agarwal, who is serving as the Chief Financial Officer of the Company since 1st October, 2019, was appointed as the Company Secretary and Compliance Officer, w.e.f. 7th February, 2022.

DECLARATION BY INDEPENDENT DIRECTORS

There are three Independent Directors on the Board of the Company. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Act as well as Regulation 16 of the Listing Regulations.

The Independent Directors have also submitted a declaration confirming that they have registered their names in the databank of Independent Directors as being maintained by the Indian Institute of Corporate Affairs (IICA) in terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

None of the independent directors are aware of any circumstance or situation, which exist 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 have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the same and in their opinion the Independent Directors fulfill the conditions specified in the Act and Listing Regulations and are independent of the management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act along with the Code of Conduct for Directors and Senior Management Personnel formulated by the Company as per Listing Regulations.

COMPANYS POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

On the recommendation of Nomination and Remuneration Committee, the Company has formulated and adopted a Nomination and Remuneration Policy which is in accordance with the Act and the Listing Regulations. The Policy aims to attract, retain and motivate qualified people at the board and senior management levels and ensure that the interests of Board members & senior executives are aligned with the Companys vision and mission statements and are in the long-term interests of the Company.

The Nomination and Remuneration Policy of the Company has been designed with the following basic objectives:

a. To set out a policy relating to remuneration of Directors, Key Managerial Personnels, Senior Management Personnels and other employees of the Company.

b. To formulate criteria for appointment of Directors, Key Managerial Personnels and Senior Management Personnels.

c. To formulate the criteria for determining qualification, competencies, positive attributes and independence for appointment of a director.

The Policy is available on the website of the Company at https://tarsons.com/wp-content/uploads/2022/04/Nomination-and- Remuneration-Policy.pdf.

NUMBER OF MEETINGS OF THE BOARD

Your Board meets at regular intervals to discuss and decide on business strategies/policies and review the Companys financial performance. During the Financial Year 2021-22, fourteen (14) Board Meetings were held. The meetings were held in hybrid mode i.e., both physically and virtually in accordance with the applicable provisions of the Act. The details relating to Board Meetings and attendance of Directors in each board meeting held during the FY-2021-22 has been separately provided in the Corporate Governance Report.

COMMITTEES OF THE BOARD

The constitution of the Board Committees is in acquiescence of provisions of the Act and the relevant rules made thereunder, Listing Regulations and the Articles of Association of the Company. The Board has constituted Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and IPO Committee to deal with specific areas/activities that need a closer review and to have an appropriate structure for discharging its responsibilities.

The composition, terms of reference, attendance of directors at the meetings of all the above Committees has been disclosed in the Corporate Governance Report.

There has been no instance where the Board has not accepted any of the recommendations of the Audit Committee. PERFORMANCE EVALUATION OF THE BOARD, THE COMMITTEES AND THE INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act, 2013, Regulation 17(10) and other applicable provisions of the Listing Regulations and in consonance with Guidance Note on Board Evaluation issued by the SEBI, the Board of Directors of the Company have formulated a Board Evaluation Policy which lays down the manner of evaluation of the Board as a whole, its committees and the individual Directors.

The Board on the recommendation of the Nomination and Remuneration Committee carried out an annual performance evaluation of the Board as a whole and directors individually. The Board also carried evaluation of the performance of its various Committees for the year under consideration. The performance evaluation of the Directors was carried out by the entire Board, other than the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Directors expressed their satisfaction over the evaluation process.

The Evaluation process covers a structured questionnaire for evaluation by Board members and the evaluation mechanism with definite parameters has been explicitly described in the Corporate Governance Report. The process of evaluation has been detailed below:

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Directors of the Company confirm that:

(i) in the preparation of the Annual Accounts for the year ended 31st March, 2022, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they have selected such accounti ng 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 state of affairs of the Company as at 31st March, 2022 and of the profit of the Company for the year ended on that day;

(iii) 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 frauds and other irregularities;

(iv) the Annual Accounts for the year ended 31st March, 2022 have been prepared on a "going concern" basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

RISK MANAGEMENT

The Company has built a comprehensive risk management framework that seeks to identify all kinds of anticipated risks associated with the business and to take remedial actions to minimize any kind of adverse impact on the Company. The Company understands that risk evaluation and risk mitigation is an ongoing process within the organization and is fully committed to identify and mitigate the risks in the business. The Company has established the three levels of risk management responsibilities in its risk management structure. These are- (a) Risk Governance and Surveillance, (b) Risk Review and Management and (c) Risk Ownership and Control.

The Company has also set up a Risk Management Committee to monitor the existing risks as well as to formulate strategies towards identifying new and emergent risks. The Risk Management Committee identifies the key risks for the Company, develops and implements the risk mitigation plan, reviews and monitors the risks and corresponding mitigation plans on a regular basis and prioritizes the risks, if required, depending upon the effect on the business/reputation. The Company has also formulated and implemented a Risk Management Policy in accordance with Listing Regulations, to identify and monitor business risk and assist in measures to control and mitigate such risks. The Policy is available on the Website of the Company at https://tarsons.com/wp-content/uploads/2022/04/Risk-Manangement-Policy.pdf. The other details in this regard are provided in the Corporate Governance Report, which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

According to Section 134(5) (e) of the Act, the term Internal Financial Control (IFC) means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and early detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls and the Board is responsible for ensuring that IFC are laid down in the Company and that such controls are adequate and operating effectively.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors.

Necessary certification by the Statutory Auditors in relation to Internal Financial Control u/s 143(3)(i) of the Act forms part of the Audit Report.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility (CSR) Committee. It is committed to ensure the social wellbeing of the communities through its CSR initiatives, in alignment with the Companys key priorities. The details of the Committee along with its terms of reference has been disclosed in detail in the Corporate Governance section of Annual Report.

The Company has adopted a Corporate Social Responsibility Policy in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014 which can be accessed at https://tarsons.com/wp-content/uploads/2022/05/Corporate- Social-Responsibility-Policy pdf. The Policy inter alia briefs the areas in which CSR outlays can be made, objectives, the various CSR Programs/Projects which can be undertaken, implementation of the said programs and projects, criteria for identification of the implementing agencies, monitoring and evaluation mechanisms and annual action plan.

The Company has made an advance CSR expenditure amounting to Rs 33.12 million in 2020-21 by donating KN-95 mask with and without valve to Tata Medical Centre, Kolkata, Rabindranath Tagore International Institute of Cardiac Science (Narayana Hrudayalaya Limited) and in the Local area and Community directly. During 2021-22, the Company has utilized Rs 13.32 million from the advance CSR obligation.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company during the financial year ended 31st March, 2022, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in "Annexure-M" to this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all the transactions entered into by the Company with related parties were in compliance with the applicable provisions of the Act and the Listing Regulations, details of which are set out in the Notes to Financial Statements forming part of this Annual Report. All related party transactions are entered into only after receiving prior approval of the Audit Committee. Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, all contracts/arrangements/ transactions entered into by the Company with its related parties, during the financial year under review, were in ordinary course of business and on arms length and not material.

In line with the requirements of the Act and the Listing Regulations, the Company has also formulated a Policy on dealing with Related Party Transactions (RPTs) and the same is available on the website of the Company at https://tarsons.com/wp-content/ uploads/2022/04/Related-Party-Transactions-Policy.pdf.

Further, the Company has not entered into any contracts/arrangements/transactions with related parties which are material in nature in accordance with the Related Party Transactions Policy of the Company nor any transaction has any potential conflict with the interest of the Company at large.

No transactions were carried out during the year which requires reporting in Form AOC - 2 pursuant to Section 134 (3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Act form part of the Notes to the financial statements of the Company.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time in respect of Directors/employees of the Company is attached as "Annexure- IN" to this report.

The information required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time-to-time forms part of this Board Report. However, in terms of Section 136 of the Act, the annual report is being sent to the shareholders excluding the said statement. The said information is readily available for inspection by the shareholders at the Companys registered office during the business hours on all working days up to the date of ensuing Annual General Meeting and shall also be provided to any shareholder of the Company, who sends a written request to the Company Secretary and Compliance Officer at investor@tarsons.com.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for year ended 31st March, 2022 is provided below:

A. Conservation of Energy
i. Steps taken or impact on conservation of energy
ii. Steps taken for utilizing alternate sources of energy Nil
iii. Capital investment on energy conservation equipments
B. Technology absorption
i. Efforts made towards technology absorption
ii. Benefits derived like product improvement, cost reduction, product development or import substitution
iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
• the details of technology imported Nil
• the year of import
• whether the technology been fully absorbed
• If not fully absorbed, areas where absorption has not taken place, and the reasons thereof
iv. The expenditure incurred on Research and Development
C. Foreign Exchange Earnings and Outgo (Rs in million)
1. Foreign Exchange Earnings by the Company 992.92
2. Foreign Exchange Expenditure by the Company 1316.31

AUDITORS & AUDIT REPORTS Statutory Auditors and Auditors Report

M/s. Price Waterhouse Chartered Accountants LLP (FRN012754N/N500016), Chartered Accountants, have been appointed as the Statutory Auditors of the Company for a term of five years from 2018-19 to 2022-23 at the 35th Annual General Meeting of the Company held on 28th September, 2018. The Auditors fulfill the eligibility and qualification norms as prescribed under the Act, the Chartered Accountants Act, 1949 and rules and regulations issued thereunder. In addition, the auditors hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI), a prerequisite for issuing quarterly Limited Review reports.

The Auditors Report on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2022 forms part of this Annual Report and there are no qualifications, reservation, adverse remark or disclaimer made by the statutory auditors in their report.

Internal Auditors

M/s. Grant Thornton Bharat LLP (LLP Registration No. AAA-7677), were appointed as the Internal Auditors of the Company for the FY-2021-22 in the Board Meeting held on 26th June, 2021 in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board at its meeting held on 26th June, 2021, had appointed M/s. Manisha Saraf & Associates, Practicing Company Secretaries (FRN No. S2019WB666200) as Secretarial Auditor of the Company for the FY-2021-22. The Secretarial Audit Report for the FY-2021-22 in form MR 3 is annexed to this report as "Annexure- IV".

There are no qualifications, reservations or adverse remark or disclaimer in the Secretarial Audit Report.

Pursuant to provisions of Regulation 24A of Listing Regulations, the Company has undertaken an audit for the FY- 2021-22 for all applicable compliances as per SEBI Rules, Regulations, Circulars, Notifications, Guidelines etc. issued thereunder. The Annual Secretarial Compliance Audit Report duly issued by Practicing Company Secretaries, M/s Manisha Saraf & Associates (FRN No. S2019WB666200) has been submitted to the Stock Exchanges within the prescribed time.

Cost Auditors and Cost Audit Report

The Company is not required to maintain cost records in terms of the requirements of Section 148 of the Act and rules framed thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, none of the auditors have reported any instances of fraud committed against the Company as required to be reported under Section 143 (12) of the Act.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and established the necessary Vigil Mechanism, which is in line with the Regulation 22 of the Listing Regulations and Section 177 of the Companies Act, 2013 for its Directors and employees. Pursuant to the Policy, the Whistle Blower can raise concerns relating to Reportable Matters (as defined in the Policy) such as unethical behavior, breach of Code of Conduct, actual or suspected fraud, any other malpractice, impropriety or wrongdoings, illegality, non-compliance of legal and regulatory requirements, retaliation against the Directors & Employees and instances of leakage of/ suspected leakage of Unpublished Price Sensitive Information of the Company etc.

Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances to the Audit Committee, and provides for adequate safeguards against victimization of Whistle Blower, who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases. The Audit Committee oversees the functioning of the same. Further, no personnel have been denied access to the Audit Committee during the Financial Year under review.

The details of this Policy are explained in the Corporate Governance Report which forms a part of this Annual Report and also hosted on the website of the Company at https://tarsons.com/wp-content/uploads/2022/04/Whistle-Blower-Policy.pdf.

There was no instance of such reporting during the financial year ended 31st March, 2022.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the Financial Year ended 31st March, 2022 is available on the website of the Company at https://tarsons.com/wp-content/uploads/2022/06/Annual-Return-for-FY-2021-22.pdf

DEPOSITS

During the year under review, the Company has not accepted any deposits from the public within the meaning of Sections 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. As the Company has not accepted any deposit during the financial year under review there is no non-compliance with the requirements of Chapter V of the Act.

CREDIT RATING

The credit rating of your Company for long term bank facilities is "CARE A+; Stable" and for short term bank facilities is "CARE A1". Details of the same are provided in the Corporate Governance Report.

CORPORATE GOVERNANCE

The Companys Corporate Governance Practices are a reflection of value system encompassing culture, policies, and relationships with the stakeholders. Integrity and transparency are key to Corporate Governance Practices to ensure that Company gain and retain the trust of stakeholders at all times. It is about maximizing shareholder value legally, ethically and sustainably. The Board exercises its fiduciary responsibilities in the widest sense of the term.

As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the Companys Statutory Auditors confirming compliance with the same has been disclosed under the Corporate Governance Report section of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report in compliance with Regulation 34(2)(e) of Listing Regulations is provided in a separate section and forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2) of Listing Regulations, the top 1000 listed companies are required to prepare a Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and the governance perspective. The Company has accordingly prepared a Business Responsibility Report as set out in "Annexure-V" to this Report and the same is also available on the website of the Company at https://tarsons.com/wp-content/uploads/2022/06/Business-Responsibility- Report-for-FY-2021-22.pdf.

HUMAN RESOURCES

Employees are the most valuable and indispensable asset for a Company. The Company has always been proactive in providing growth, learning platforms, safe workplace and personal development opportunities to its workforce. The Company had 556 permanent employees on its rolls as on 31st March, 2022.

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

The Company has zero tolerance towards sexual harassment at workplace and is committed to provide a safe and secure working environment for all employees.

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder and the same is hosted on the Companys website at https://tarsons.com/wp-content/uploads/2022/06/Policy- on-Prevention-of-Sexual-Harassment.pdf. An Internal Complaints Committee (ICC) has also been set up to redress complaints received regarding sexual harassment.

During the year under review, no cases were filed under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

During the Financial Year 2021-22, the Company has complied with all the relevant provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

GENERAL DISCLOSURES

Your Directors state that:

1. No material changes and commitments affecting the financial position of the Company have occurred from the close of the financial year ended 31st March, 2022 till the date of this report.

2. There was no change in the nature of business of the Company during the financial year ended 31st March, 2022.

3. During the year, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operation in future.

4. During the financial year under review no disclosure or reporting is required with respect to issue of equity shares with differential rights as to dividend, voting or otherwise, issue of Sweat equity shares and Buyback of shares.

5. No proceedings are filed by the Company or pending against the Company under the Insolvency and Bankruptcy Code, 2016.

6. The Company serviced all the debts & financial commitments as and when they became due and no settlements were entered into with the bankers.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by various Banks, local authorities, customers, suppliers and business associates. Your Directors also thank the Medical Profession, the Trade and Consumers for their patronage to the Companys products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels, amidst the challenging time. The directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company and its management and also thank the Companys vendors, investors, business associates, Central/State Government and various departments and agencies for their support and co-operation.

For and on behalf of the Board of Directors

For Tarsons Products Limited

(Formerly known as Tarsons Products Private Limited)

Mr. Sanjive Sehgal Mr. Rohan Sehgal
Place : Kolkata Chairman & Managing Director Director
Date: 27th May, 2022 (DIN: 00787232) (DIN: 06963013)