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Bal Pharma Ltd.

BSE: 524824 Sector: Health care
NSE: BALPHARMA ISIN Code: INE083D01012
BSE 00:00 | 24 Jun 91.45 0.90
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89.05

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NSE 00:00 | 24 Jun 90.75 0.50
(0.55%)
OPEN

90.90

HIGH

91.75

LOW

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OPEN 89.05
PREVIOUS CLOSE 90.55
VOLUME 2079
52-Week high 148.50
52-Week low 87.50
P/E 16.60
Mkt Cap.(Rs cr) 142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 89.05
CLOSE 90.55
VOLUME 2079
52-Week high 148.50
52-Week low 87.50
P/E 16.60
Mkt Cap.(Rs cr) 142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bal Pharma Ltd. (BALPHARMA) - Director Report

Company director report

Your Directors are pleased to present the Thirty Fourth (34th) Annual Report and theAudited Financial Statements of the Company for the financial year ended 31.03.2021.

FINANCIAL SUMMARY/ REVIEW OF OPERATIONS/STATE OF COMPANY'S AFFAIRS

Following is the analysis of the standalone financial statements of the Company duringthe year under review:

(in Rs. Crores)

Particulars F.Y 2020-2021 F.Y 2019-2020
Total income from operations 252.00 174.30
Profit from operations before interest other income and exceptional items 9.79 (9.07)
Tax Expense 0.69 (0.17)
Finance Cost 11.95 12.55
Profit after tax 9.09 (8.90)
Total Comprehensive Income 9.18 (9.20)
Earnings per share (In Rs) Basic and Diluted 6.41 (6.28)

The financial year 2020-21 was a year of robust performance by the Company. During theyear the revenue from operations recorded a growth of 44% in comparison to the revenuefrom the previous financial year 2019-2020. Consequently the Profit after Tax (PAT) alsorecorded an increase of more than 200%.

Highlights of the Company's performance are covered in detail in the ManagementDiscussion and Analysis Report (MDA) included in this Annual Report as required underSchedule V of SEBI (LODR) Regulations 2015.

DIVIDEND

The Board of Directors is pleased to recommend a Dividend of Re.1 /- per Equity Shareof Rs.10/- each i.e 10% of the Equity Share Capital of the Company thereby appropriatingan amount of Rs.1.48 Crores towards Dividend for the F.Y 2020-21

UNCLAIMED DIVIDEND

In terms of Section 124 of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules)provides that the dividend that has remained unclaimed or unpaid for a period of sevenyears to be transferred to Investor Education and Protection Fund (IEPF). Further theRules mandate that the shares on which dividend has not been paid or claimed for sevenconsecutive years or more shall also be transferred to the IEPF.

During the year under review the Company has transferred 97284 Equity Shares of theshareholders whose dividend is outstanding for 7 consecutive years and an amount of Rs194573 to the IEPF suspense account as per the Investor Education and Protection FundAuthority (AccountingAuditTransfer and Refund) Rules 2016.

Shareholders holding shares in physical form are advised to encash their Dividend ontime to avoid transfer of their shares to IEPF account.

TRANSFERTO RESERVE

The Company does not propose to transfer any amount to general reserves.

SHARE CAPITAL

With the allotment of 650000 Equity Shares upon conversion of warrants during theyear under review the paid up capital of the Company has risen to Rs.148223720/-comprising of 14822372 Equity Shares of Rs.10 each.

CONSOLIDATED FINANCIAL STATEMENTS

The Annual consolidated financial statements together with the Auditors Reports isannexed along with standalone financial statements for the financial year ended31.03.2021.

NEW PROJECTS / EXPANSION

The Company plans in advance on any future infrastructure requirements growthopportunities and continuously strives hard to invest on the same. During the financialyear under review the Company has spent Rs. 285.23 Lakhs towards capital expenditure.

AUDITORS AND AUDITORS REPORT

a) Statutory Auditors:

Messrs NSVM & Associates Chartered Accountants (FRN # 010072S) were appointed asStatutory Auditors of the Company from the conclusion of 30th Annual General Meeting heldon 22.09.2017 up to the conclusion of 35th Annual General Meeting i.e for a period of 5years.

Pursuant to the amendment to Section 139 of the Act effective from 7th May 2018ratification by Shareholders every year for the appointment of the Statutory Auditors isno longer required and accordingly the notice of ensuing Annual General meeting does notinclude the proposal for seeking shareholders' approval for ratification of StatutoryAuditors appointment.

In terms of the Listing Regulations the auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the ICAI.

There are no observations qualifications or adverse remarks by the Statutory Auditorsin their report issued for the financial year 20202021.

b. Cost Auditors:

As required by the provisions of Section 148 of the Companies Act2013 Mr. M.R KrishnaMurthy Cost Accountant(FCMA # 7568) was reappointed as the Cost Auditor of the Companyfor the financial year 2021-22 to conduct cost audit of the cost records maintained bythe Company.

CostAudit Report for the FY 2019- 2020 has been filed with the Ministry of CorporateAffairs on 06/01/2021.

c. Secretarial Auditor:

Pursuant to Section 204 of the Companies Act2013 and rules made thereunder and incompliance with Regulation 24A of SEBI (LODR) Regulations Mr. Parameshwar G BhatPractising Company Secretary (CP # 11004) was appointed by the Board of Directors as theSecretarial Auditor of the Company for the financial year 20202021.

Secretarial Audit Report for the F.Y 2020-21 in Form MR-3 is annexed to this report asAnnexure -1. No comments or remarks were made by the Auditor in his report for the F.Y2020-21.

d. Internal Auditors:

Messrs Murugesh & Co Chartered Accountant (M # 002233S) were appointed as theInternal Auditors of the Company for the F.Y 2020-21 and the internal audit reports issuedby them were periodically reviewed by the Audit Committee and the management of theCompany is appraised about the observations of the internal auditor and on correctiveactions if any that needs to be taken.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the functional heads of theCompany will submit its periodical report to the Board of Directors on the measures to betaken for mitigation of potential risk factors that may affect the business of theCompany.

The Risk Management Policy implemented by the Company which is designed to enable risksto be identified assessed and mitigated appropriately is available on the website of theCompany https:// www.balpharma.com/pdf/finance/i rl/Risk%20Management%20Policypdf

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authoritylimits. Internal controls ensure that the Company's assets are protected against loss fromunauthorised use or disposition and all transactions are authorised recorded and reportedin conformity with generally accepted accounting principles. These systems are designed toensure accuracy and reliability of accounting data promotion of operational efficiencyand adherence to the prescribed management principles. These policies are periodicallyreviewed to meet business requirements. The Company has in place adequate internalfinancial controls with respect to financial statements.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies Act 2013 yourDirectors wish to confirm:

- That in preparing the annual accounts all the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.

- That the Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial year and of the profit and loss of the Company for that period.

- That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the act for safeguardingthe assets of the Company and for preventing / detecting fraud and other irregularities.

- That the Directors had prepared the annual accounts on a going concern basis.

- That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.

- That the Company had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTYTRANSACTIONS (RPT's)

All contracts /arrangements / transactions entered by the Company during the financialyear with related parties were in ordinary course of business and at arms' length basisand the same were undertaken after prior omnibus approval of the Audit Committee.

During the year the Company has not entered into any contract/arrangement/transactionwith the related parties that could be considered as material as per the policy of theCompany on materiality of related party transactions.

There were no materially significant related party transactions which could havepotential conflict with the interests of the Company at large.

The Company's policy on the related party transactions as approved by the Board can beassessed from the website i.ehttp://www.balpharma.com/pdf/finance/irl/Policy%20on%20Dealing%20with%20Related%20Party%20Transaction.pdf.

Details of disclosure relating to the related party transactions under Section 188 ofthe Companies Act 2013 form part of the notes to the financial statements provided inthis annual report.

Since all the transactions with related parties were in the ordinary course of businessand at arms' length and there were no material related party transactions the statementin Form AOC-2 is not annexed to this report.

All the RPTs undertaken during the financial year are disclosed in the notes to thefinancial statements. For Further Details your attention is drawn to the Related Partydisclosures set out in Note No. 60 of the Standalone Financial Statements.

SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review the following Companies continued to be the subsidiariesof Bal Pharma Ltd.A report on the financial performance of each of the subsidiaries as persection 129(3) of the Companies Act 2013 in the prescribed format AOC-1 is provided inAnnexure- 2 to the Board's Report and hence not repeated here for the sake of brevity:-

Sl Name of the No Company/LLP Nature of Business % of stake with Bal Pharma as on 31.03.2021
1 Lifezen Healthcare Private Limited. Marketing of OTC products. 99.40%
2 Bal Research Foundation Research and Development. 80%
3 Balance Clinics LLP. Diabetic care clinics. 80%
4 Golden Drugs Private Limited. Manufacturing of API's 100%

SECRETARIAL STANDARDS

Secretarial Standards i.e SS1 & SS2 issued by the Institute of Company Secretariesof India(ICSI) relating to the Meetings of Board of directors and General Meetingsrespectively have been duly followed by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP'S)

Dr. Subbarao Prasanna who was with the Company for a very long period of time aspromoter and Executive Director of the Company passed away on 04th May2021 due to illhealth. The Board of Directors of the Company places on record its sincere appreciationand gratitude for the services rendered by Dr. Subbarao Prasanna during his tenure.

Mr. Jatish Sheth (DIN # 00581963) was appointed as an Additional Director on the Boardof the Company w.e.f 28.12.2020 by the Board of Directors based on the recommendations ofthe Nomination and Remuneration Committee of the Company.

Your Board seeks the approval of the Members for Mr. Sheth's appointment asIndependent Director of the Company at the ensuing Annual General Meeting.

Resolutions for aforementioned appointments along with brief profile of the Directorsproposed to be appointed form part of the Notice of the AGM and the resolutions arerecommended for Shareholders approval. Mr. Shailesh Siroya (DIN #00048109) ManagingDirector

Mr. Virupakshaya Himesh (DIN # 08554422) Whole Time Director Mr. RengarajanGopalakrishnan Chief Financial Officer and Mrs. Preeti Singh Company Secretary are theKey Managerial Personnel of the Company as on the date of this report.

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under Section 149(6) of theCompanies Act 2013.

The Independent Directors have also confirmed under Regulation 16(b) of SEBI (LODR)Regulations 2015 that they are not Non-Independent Director of another Company on theBoard of which any nonindependent Director of the listed entity is an independentDirector.

The Company has devised a policy for familiarization of Independent Directors on theirroles rights responsibilities with the Company and the said policy is available on ourwebsite.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the Board Committeesand Individual Directors. The evaluation process among others considers attendance ofDirectors at the Board and Committee Meetings acquaintance with business communicationwithin the Board members effective participation domain knowledge compliance with theinternal code of conduct vision and strategy.

The Company has also in place a Policy for Nomination and Remuneration of KMPs SeniorManagement personnel and Directors of the Company which is in compliance with Section 178of the Companies Act 2013. Policy guiding the nomination and remuneration of the—Directors and KMP's can be accessed from our website www.balpharma.com

The Board carried out annual performance evaluation of itself Committees IndividualDirectors and Chairman at their Meeting held on 17/03/2021.

Report on performance evaluation of the individual Directors and Committees wasreviewed by the Chairman and feedback was given to the Directors. The Board has expressedsatisfaction over the overall functioning of the Board Members and their Committees whichare in line with the objectives and goals of the Company.

MEETINGS OF THE BOARD

During the year under review Eight (8) Meetings of the Board of Directors were held on23rd May 2020 29th July 2020 08th September 2020 28th October 2020 11th November202011th February 2021 26th February 2021 and 17th March 2021.

The intervening gap between two Board Meetings was within the maximum period prescribedunder the Act. The detailed information regarding Board and Committee meeting is furnishedin the Corporate Governance Report forming part of the Annual Report were held during theyear under review.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle Blower Policy asprescribed by SEBI(LODR) Regulations 2015 includes compliance task force comprising ofsenior executives of the Company.

The policy of whistle blower is available on our website. The policy is reviewed by theAudit Committee from time to time and no concerns and/or irregularities were reported bythe employees till date. Please access our websitehttps://www.balpharma.com/pdf/finance/irl /Whistle%20Blower%20Policy.pdf to refer to thewhistle blower policy of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTFLOW

As per the provisions of Section 134 of the Companies Act 2013 details relating tothe conservation of energy technology absorption foreign exchanges earnings and outfloware given as Annexure -3 to this report.

CORPORATE GOVERNANCE

Your Company is committed to maintaining highest standards of Corporate Governancerequirements set out by the Securities and Exchange Board of India.A detailed report onthe corporate governance system and practices of the Company along with a certificate fromthe practising Company secretary confirming the compliance with the corporate governancerequirements are given in a separate section of this report as Annexure-4.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEE'S GIVEN OR SECURITY PROVIDED BYTHE COMPANY

The Company has made investments and given trade advances to its subsidiaries for theirbusiness purpose. Details of loans investments and advances covered under Section 186 ofthe Companies Act 2013 form part of the notes to the financial statements provided inthis annual report.

DEPOSITS

Your Company has not accepted any deposits from the public falling within the purviewof Section 73 of the Companies Act 2013 read with Companies (Acceptance of Deposit)Rules 2014.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND UP TOTHE DATE OFTHIS REPORT

There have been no material changes or commitments affecting the financial position ofthe Company between the end of the financial year and as on the date of this report. Therehas been no change in the nature of business or constitution of the Company.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act Copy of the AnnualReturn as on March 31st 2021 is available on the website of the Companywww.balpharma.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Companies Act 2013 the Company hasconstituted a CSR Committee. As on the date of report following is the composition:

1. Mr. H SVenkatesh - Chairman

2. Dr. C.V Srinivas - Member

3. Mr. Shailesh Siroya- Member

The Committee has formulated a Corporate Social Responsibility policy which recommendsthe social activities to be undertaken by the Company as specified in ScheduleVII oftheCompanies Act 2013. A copy of the said policy is available on the website i.ehttp://www.balpharma.com/pdf/finance/irl/CSR%20Policy.pdf.

The Committee has not recommended any CSR budget for the financial year 2020-21 due toinadequate profits during the last 3 financial years on consolidated basis.

HUMAN RESOURCES

Human resources of the Company have major share in the growth and development of theCompany. The Company continues to hire new talent in order to keep pace with the newprojects and initiatives undertaken. The Management of the Company aims to strengthen itsemployee relations through progressive people management.

LISTINGWITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE Limited and NationalStock Exchange of India Limited and the Company has paid the annual listing fees for F.Y2021-22 to the Exchanges.

PARTICULARS OF EMPLOYEES

There are no employees who are in receipt of remuneration in excess of the limitsprescribed under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rules 5(1) 5(2) & 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are attached as"Annexure -5" to this report.

CEO & CFO CERTIFICATION:

The CEO and CFO of the Company in their submission to the Board have confirmed that theannual financial statements presents a true and fair view of the Company's affairs and donot omit any material facts which may make the statements or figures contained thereineither misleading or false.

INSURANCE COVERAGE

The Management of the Company wishes to confirm that all the movable immovable andcurrent assets of the Company are covered with comprehensive and adequate insurance cover.

CREDIT RATING

The discipline with which the Company conducts its financial transactions is reflectedin the BB rating given by the credit rating agency ICRA for the financial year2020-2021.The Management of the Company aims at further improving its credit rating duringthe current financial year.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has in place an anti-sexual harassment policy on lines with therequirements of the sexual harassment of women at the workplace (Prevention Prohibitionand Redressal) Act 2013. All the employees of the Company either they are permanentcontractual temporary or trainees are covered by the policy.

The following is the summery of the Complaints regarding sexual harassment receivedand redressed during the financial year 2020-21.

Number of Complaints received during the year : Nil
Number of Complaints resolved : NA
Number of Complaints pending at the end of the year : NA

GENERAL INFORMATION:

Your Directors Report that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Details relating to the deposits covered under ChapterV of the Companies Act 2013.

2. Issue of equity shares with differential voting rights with respect to dividendvoting etc.

3. Issue of shares (including sweat equity shares) to the employees of the Companyunder any scheme.

4. Neither the Managing Director nor the whole time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the regulators or courts ortribunals which impacts the going concern status of the Company and its operations infuture.

6. No fraud has been reported by theAuditors to Audit Committee or the Board during theyear.

REVISION OF FINANCIAL STATEMENT ORTHE REPORT:

As per the Secretarial Standards-4 in case the company has revised its financialstatement or the Report in respect of any of the three preceding financial years eithervoluntarily or pursuant to the order of a judicial authority the detailed reasons forsuch revision shall be disclosed in the Report of the year as well as in the Report of therelevant financial year in which such revision is made.

In your Company there is no revision of Financial Statement took place in any of thethree preceding financial years under consideration.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCYCODE 2016 (IBC):

There is no such process initiated during the year therefore said clause is notapplicable to the Company.

FAILURE TO IMPLEMENTANY CORPORATE ACTION:

There were no such events took place during the year under consideration.

Appreciation:

Your Directors express their gratitude to the Company's customers Shareholdersemployees business partners' viz. distributors suppliers medical professionalsCompany's bankers financial institutions including investors for their valuablesustainable support and co-operation.

For and on behalf of Board of Directors
Bal Pharma Limited
Place: Bengaluru Himesh Virupakshya Shailesh D Siroya
Date: 29.06.2021 Whole-Time Director Managing Director

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