Vaishali Pharma Ltd Directors Report.

To,

The Members Vaishali Pharma Limited,

The Board of Directors of your Company take great pleasure in presenting the 14th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2021.

FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31st March, 2021 is summarized below:

Particulars Current year Amount (in INR) Previous Year* Amount (in INR)
31.03.2021 31.03.2020
Income from Business Operations 53,77,38,876 60,08,56,905
Other Income 1,80,91,039 2,17,25,802
Total Income 55,58,29,915 62,25,82,707
Less: Expenses 54,17,84,676 62,17,91,654
Profit/(Loss) Before Tax 1,40,45,239 7,91,053
Less: Current Tax 37,88,305 5,66,000
Less: Adjustment of prior periods tax - -
Less: Deferred Tax (credit)/charge (2,05,634) (1,02,790)
Net Profit/(Loss) After Tax 1,04,62,568 3,27,843
Other Comprehensive Income/(Loss) (90,791) (1,22,916)
Total Comprehensive Income for the year 1,03,71,777 2,04,927

* Figures have been regrouped and reclassified, wherever required STATE OF COMPANYS FINANCIAL AFFAIRS:

During the year under review, total revenue earned by the Company was Rs.55,58,29,915/- as compared to Rs. 62,25,82,707/- in previous year. The expenditure incurred during the year was Rs. 54,17,84,676/- as against the amount of Rs. 62,17,91,654/- during the previous year. The Company recorded a Net Profit after tax of Rs. 1,04,62,568/- as compared to the previous year of Rs.3,27,843/-. Your Directors are optimistic of future growth. The Board has taken all necessary steps to expand its activities.

NATURE OF BUSINESS:

The Company is into pharmaceutical business, mainly dealing in Active Pharmaceutical Ingredient, pharmaceutical formulations, surgical products, veterinary supplements operating in domestic and export markets.

The success of the Company depends significantly on ability to commercialize new pharmaceutical products in India and across various markets around the world.

COVID 19

Due to wide spread of pandemic, COVID-19, the Company faced business challenges. However, due to relaxations brought by the Government, last quarter of the financial year was comparatively better than previous 3 quarters in terms of turnover. The Company adhered to all recommended precautions/guidelines in its operations, which included sanitization and hygiene, providing work from home facility to employees, maximizing audio & video-conferencing and minimizing contact, closing employee travel and following all government directions on the subject.

DIVIDEND

Your Company is committed towards enhancing shareholder value for its investors. However, after careful consideration and taking a holistic view of the unprecedented circumstances of the COVID-19 pandemic, the Company has considered it prudent not to recommend the dividend for FY 2020 - 2021 in order to maintain its liquidity position.

TRANSFER TO RESERVES

The Company has not transferred any amount to the reserves during the year ended 31st March, 2021.

DEPOSITS UNDER CHAPTER V OF COMPANIES ACT, 2013

Your Company has neither accepted nor renewed any deposits from public during the year and does not have any outstanding Deposits in terms of Section 76 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (hereinafter referred as the Act) forms part of notes to the Financial Statements.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business during the year under review.

SHARE CAPITAL STRUCTURE

There was no change in the capital structure during the financial year.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The Company is in the process to raise capital through Rights Issue mode. Apart from above, there are no material change and commitment affecting the financial position of the Company have that have occurred after closure of the financial year of the Company to which the financial statements relate and the date of the report.

SIGNIFICANT ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS

There are no significant orders passed by regulators/courts/tribunals impacting the going concern status and Companys operations in the future.

RELATED PARTY TRANSACTIONS

During the period under review, the transactions entered into with related parties during the financial year were on arms length pricing basis and in the ordinary course of business and do not attract the provisions of Section 188 of the Act. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. The particulars of contracts or arrangements with related parties referred to in Section 188(1) and applicable rules of the Companies Act, is disclosed in Form AOC-2 as shown in ANNEXURE - A.

All Related Party Transactions are periodically placed before the Audit Committee and also before the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The policy on Related Party Transactions as approved by the Board is available on website of the Company viz: https://www.vaishalipharma.com/investors/company-policy.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint Venture or Associate Company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby

confirmed that:

a) In the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 as on March 31, 2021 and of the profit and loss of the Company for that period ended on that date;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; and

e) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the Company comprises an optimum combination of executive and non-executive directors.

As 31s March, 2021, the Composition of the Board of Directors is as under:

NAME OF DIRECTOR CATEGORY AND DESIGNATION
MR. ATUL VASANI CHAIRMAN & MANAGING DIRECTOR
MS. JAGRUTI VASANI WHOLE TIME DIRECTOR
MR. PRATAPRAI GANDHI NON-EXECUTIVE & INDEPENDENT DIRECTOR
MR. MANISH BHAGWANDAS VED NON-EXECUTIVE & INDEPENDENT DIRECTOR
MR. ASHVIN JAMNADAS GANATRA NON-EXECUTIVE & INDEPENDENT DIRECTOR
MR. DEWANSH VASANI NON-EXECUTIVE & NON INDEPENDENT DIRECTOR

Pursuant to the provisions of Section 149 of the Act, the Independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review, Mr. Ashvin Jamnadas Ganatra (DIN - 08653815) and Mr. Manish Bhagwandas Ved (DIN - 08654674) were appointed as Independent Directors for a spam of 5 consecutive years. The non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2021 are: Mr. Hemanth Damodar Pathak, Chief Executive Officer; Mr. Ratnesh Raghunath Singh, Chief Financial Officer and Mr. Akshay Jharkhandi, Company Secretary and Compliance Officer.

INDEPENDENT DIRECTOR DECLARATION

All Independent Directors of the Company have submitted the requisite declarations confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulation 16 and 25(8) of SEBI Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct.

In the opinion of the Board, all the independent directors are persons of integrity, possesses relevant expertise and experience.

APPOINTMENT AND CHANGES OF KEY MANAGERIAL PERSONNEL

During the year under review, Chief Executive Officer and Company Secretary cum Compliance Officer were appointed.

As on the date of this report, the Key Managerial Personnel of the Company are as follows:-

NAME OF KEY MANAGERIAL PERSONNEL CATEGORY AND DESIGNATION
MR. RATNESH SINGH CHIEF FINANCIAL OFFICER
MR. HEMANT DAMODAR PATHAK CHIEF EXECUTIVE OFFICER
MR. AKSHAY JHARKHANDI COMPANY SECRETARY & COMPLIANCE OFFICER

RETIREMENT BY ROTATION

In accordance with the provisions of Section 152(6) and other applicable provisions of the Act, Mr. Atul Vasani (DIN: 02107085) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment and will continue as Managing - Director of the Company. The Board recommends his re-appointment.

MEETINGS OF THE BOARD:

Total Eleven (7) Board Meetings were held during the financial year 2020 - 2021. For details of the meeting of the Board please refer to the Corporate Governance Report which is a part of this report.

BOARD EVALUATION

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 (Listing Obligations and Disclosure Requirements), Regulations, 2015 ("SEBI Listing Regulations").

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 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 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 NonExecutive Directors. The same was discussed at 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. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated

FAMILIARIZATION PROGRAMME:

The Familiarization Programme for Independent Directors aims to provide them an opportunity to familiarize with the Company, its Management and its operations so as to gain a clear understanding of their roles, rights and responsibilities and contribute significantly towards the growth of the Company. They have full opportunity to interact with Senior Management Personnel and are provided all the documents required and sought by them for enabling them to have a good understanding of the Company, its business model and various operations and the industry of which it is a part.

The policy undertaken by the Company in this respect has been disclosed on the website of the Company AT https://www.vaishalipharma.com/investors/company-policy.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys current policy is to have an appropriate mix of Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on the remuneration of Directors, Key Managerial Personnel and other Employees as required under sub-section (3) of Section 178 of the Companies Act, 2013. The policy of the Company on directors appointment and remuneration is uploaded on to the Companys website and available at https:// www.vaishalipharma.com / investors / company-policy/.

As on 31st March, 2021, the Board of Directors comprised of a Managing Director, a Whole time Director, a Non-Executive Directors, and Three Independent Directors. The Board periodically evaluates the need for change in its composition and size.

INTERNAL FINANCIAL CONTROLS:

The Company has well placed, proper and adequate internal financial control system that commensurate with the size, scale and complexity of its operations. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the business and functions are systematically addressed through mitigation action on continuing basis. These are routinely tested by Internal Auditors. The Audit observations on internal financial controls are periodically reported to the Audit Committee.

COMMITTEES OF THE BOARD:

In compliance of SEBI Listing Regulation and provisions of Companies Act, 2013, the Board of Directors constituted three Committees i.e. the Audit Committee, Nomination & Remuneration Committee and Stakeholder Relationship Committee.

AUDIT COMMITTEE

Total Eight (8) Audit Committee Meetings were and held during the financial year 2020 - 2021. For details of the meeting and the composition of the Committee, kindly refer the Corporate Governance Report, which is a part of this report.

STATUTORY AUDITORS

In accordance with the provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, the members of the Company at their 10th Annual General Meeting held on 19th August, 2017 had appointed M/s Raman S. Shah & Associates, Chartered Accountants, (Firm Registration No. : 119891W) as the Statutory Auditors of the Company for a period of 5 (five) years to hold office from conclusion of aforesaid Annual General Meeting till the conclusion of 15 th Annual General Meeting to be held in 2022, subject to ratification by shareholders at every Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Notes on financial statements referred to in the Auditors report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

DETAILS OF FRAUD REPORTED BY AUDITORS

There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Companies Act, 2013 and rules made thereunder.

INTERNAL AUDITORS

M/s. R.U. Kamath & Co., Chartered Accountants were appointed as Internal Auditor of the Company. The internal auditors of the Company directly report to the Audit Committee.

SECRETARIAL AUDITORS

In compliance with the provisions of Section 204 of the Companies Act, 2013, your Board of Directors have appointed M/s. Disha & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for conducting Secretarial Audit for financial year 2020 - 2021. The audit report does not have any Qualification / Observation or Adverse remark. The report is self explanatory and is enclosed in ANNEXURE - B.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of corporate governance. We believe in adherence to good corporate practices, implement policies and guidelines and develop a culture of the best management practices and compliance with the law coupled with the highest standards of integrity, transparency, accountability and ethics in all business matters to enhance and retain investor trust, long-term shareholder value and respect minority rights in all our business decisions.

The Corporate Governance Report of the Company confirming compliance with the conditions of corporate governance as stipulated under SEBI Listing Regulations forms part of the Annual Report.

The Certificate on Corporate Governance Compliance issued by Secretarial Auditor is enclosed in ANNEXURE - C. NOMINATION AND REMUNERATION COMMITTEE

Total Six (6) Nomination and Remuneration Committee Meetings were and held during the financial year 2020 - 2021. For details of the meeting and the composition of the Committee, kindly refer the Corporate Governance Report, which is a part of this report.

NOMINATION AND REMUNERATION POLICY

In accordance with the provisions of the Section 178 of the Companies Act, 2013 read along with the applicable Rules, the Company has formulated "Nomination and Remuneration Policy" containing criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178 of Companies Act, 2013 for selection of any Director, Key Managerial Personnel and Senior Management Employees.

The said policy is attached as ANNEXURE - D to this report and is available on the Companys website and the web link thereto is https://www.vaishalipharma.com/investors/company-policy.

STAKEHOLDER RELATION COMMITTEE

Total Four (6) Stakeholder Relationship Committee Meetings were and held during the financial year 2020 - 2021. For details of the meeting and the composition of the Committee kindly refer the Corporate Governance Report, which is a part of this report.

SECRETARIAL STANDARDS

The Directors declared that applicable Secretarial Standards relating to Meetings of the Board of Directors and General Meetings respectively, has been duly followed.

VIGIL MECHANISM:

Pursuant to the provisions of Section 177 (9) & (10) of the Act read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014, Vigil Mechanism for Directors and employees to report genuine concern and grievances has been established. The said mechanism is governed by the Audit Committee. The details of the policy have been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the website of the company at https://www.vaishalipharma.com/investors/company-policy.

CORPORATE SOCIAL RESPONSIBILITY

As the provisions of section 135 of Companies Act, 2013 dealing with Corporate Social Responsibility are not applicable to the Company during the financial year, the Company has not laid down any policy on Corporate Social Responsibility.

MAINTENANCE OF COST RECORDS

The maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of the Section 148 of the Act in respect of the activities carried on by the Company.

PARTICULARS OF EMPLOYEES

No employee was employed by the Company receiving remuneration prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) and the rules framed thereunder.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5 (1) of the Rules have been appended as ANNEXURE - E to this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the financial year 2020 - 2021, as stipulated under Regulation 34(2)(e) of the SEBI(Listing obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "the SEBI LODR"), is presented in a separate section forming part of the Annual Report as ANNEXURE - F.

DEMATERIALISATION OF EQUITY SHARES

All the Equity Shares of the Company are in dematerialized form with Depositories viz. NSDL and CDSL.

The ISIN No. allotted is INE972X01014.

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

The Company is committed and dedicated in providing a healthy and harassment free work environment to every individual of the Company, a work environment that does not tolerate sexual harassment. We highly respect dignity of everyone involved at our work place, whether they are employees, suppliers or our customers. We require all employees to strictly maintain mutual respect and positive attitude towards each other.

The Company has adopted a policy for prevention of Sexual Harassment of Women at Workplace. No complaints or grievances were noticed under the aforesaid policy during the period under review.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

As on the date of this report, the constitution of the Internal Complaints Committee is as under:

Sr. No. Name of the Member Post of the Committee members Designation
1 Presiding Officer Mrs. Jagruti Vasani Whole - Time Director
2. Member Mr. Atul Vasani Chairman & Managing Director
3. Member Ms. Priyanka Vasani Chief Operating Officer
4 Member Mrs. Medha Desai Management representative

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

a) Conservation of Energy & Technology Absorption

Considering the nature of activities undertaken by the company, above clauses of Section 134 of the Companies Act, 2013 pertaining to the Conservation of Energy, Technology absorption are not applicable to the Company.

b) Foreign exchange earnings and outgo-

During the year there were foreign exchange inflow of Rs. 8,98,28,992/- (PY - Rs. 13,04,53,507/-) on account of export of goods on FOB basis and foreign outflow as follows:-

Expenditure in Foreign Currency Current Year Previous Year
Import of Goods (on CIF basis) 0/- 0/-
Foreign Travelling 62,928/- 14,59,409/-
Registration Charges 17,000/- 8,33,166/-
Inspection Charges 0/- 0/-
Gross Total 79,928/- 22,92,575/-

INSURANCE & RISK MANAGEMENT:

Business risks exist for any enterprise having national and international exposure. Your Company also faces some such risks, the key ones being - a longer than anticipated delay in economic revival, unfavorable exchange rate fluctuations, emergence of inflationary conditions, rise in counterfeits and look-alikes and any unexpected changes in regulatory framework.

The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions.

ACKNOWLEDGEMENTS:

The Directors thank the Companys employees, customers, vendors, investors and academic partners for their continuous support.

The Directors also thank the Government of India, Governments ofvarious states in India, Governments ofvarious countries and concerned Government departments and agencies for their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

Your Directors are thankful to the Vendors, Customers, Bankers, Government together with their departments and the local authorities, Employees, Stakeholders for their valuable support and co-operation.

Date: 02.09.2021 For and on behalf of the Board of Directors
Place: Mumbai Vaishali Pharma Limited
sd/-
Atul Vasani
Chairman & Managing Director
DIN:- 02107085
Registered Office:- 706 to 709, 7th Fl, Aravali Busines Center, R. C. Patel Road,
Off Sodawala Lane,Borivali West Mumbai Mumbai City MH 400092