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Cian Healthcare Ltd.

BSE: 542678 Sector: Health care
NSE: N.A. ISIN Code: INE05BN01019
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VOLUME 14000
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Cian Healthcare Ltd. (CIANHEALTHCARE) - Director Report

Company director report

FOR THE FINANCIAL MARCH ENDED 31st MARCH. 2021

To

The Members / Shareholders

The Board of Directors hereby present the 18th Annual Report of ClAN HEALTHCARE LIMITED(CIN: L24233PN2003PLC017563) together with the Audited Financial Statements for thefinancial year ended 31st March 2021.

FINANCIAL HIGHLIGHTS

(Amount in Lakhs)

PARTICULARS 2020-21 (Standalone ) 2019-20 (Standalone) 2020-21 (Consolidated) 2019-20 (Consolidated)
Revenue from business operation Rs. 7238.27 Rs. 5704.60 Rs. 7373.01 5708.83
Other Income Rs. 20.30 Rs. 78.90 Rs. 28.04 Rs. 86.27
Total Income Rs. 7258.57 Rs. 5783.50 Rs. 7401.05 Rs. 5795.10
Operating profit before depreciation. Finance Cost Exceptional Item and Tax (EBITDA) Rs. 932.61 Rs. 833.83 Rs. 1186.24 Rs. 804.44
Less: Depreciation & Amortization expenses Rs. 245.15 Rs. 245.46 Rs. 345.27 Rs. 444.87
Less: Finance Cost Rs. 620.96 Rs. 580.92 Rs. 772.27 Rs. 712.01
Profit before tax Rs. 66.50 Rs. 7.46 Rs. 68.70 Rs. (352.44)
Less: Current Expenses Rs. 41.18 Rs. 14.19 Rs. 41.18 14.91
Less: Deferred Expenses Rs. (7.35) Rs. (0.21) Rs. 22.22 Rs. 11.41
Net Profit for the Year Rs. 32.67 Rs. (7.24) Rs. 5.31 Rs. (378.76)
Add: Other Comprehensive Rs. 0.00 Rs. 0.00 Rs.0.00 Rs. 0.00
Total Comprehensive Income Rs. 0.00 Rs. 0.00 Rs. 0.00 Rs. 0.00
Paid up equity share capital 2336.08 2336.08 2336.08 2336.08
EPS (Equity Shares of Rs. 10/- each) Basic & Diluted (in 0.14 (0.03) 0.02 -1.62
Rs.)
Surplus brought forward from previous year Rs. 148.74 Rs. 155.98 Rs. (281.45) Rs. 97.30
Balance available for appropriation Rs. 181.41 Rs. 148.74 Rs. (276.15) Rs. (281.45)

BUSINESS OVERVIEW:

The company is engaged in manufacturing of multiple lines- tablets capsules softgels liquid orals ointments/ creams & sachets. Our portfolio comprises ofgynecology hacmatinic. cardio- diabetic. orthopedic pediatric derma-cosmetic andantibiotic. CNS. vitamins & nutrient products.

Products are developed at our centralized R &D. staffed with world classprofessionals who are in constant pursuit to develop differentiated products.

The company is also exporting its product to various countries viz Afghanistan. Benin.Bhutan. Bolivia. Cambodia. Sri Lanka and also enhance its production capacity byinstalling additional machinery for manufacturing variety of products.

PERFORMANCE REVIEW

Standalone:

Your Company delivered a solid all-round performance during the year under reviewedsteered by positive growth. In F.Y 2020-21. total revenue including other income stood atRs. 7258.57 Lakhs against Rs. 5783.50 Lakhs in F.Y 2019-20.

Profit before tax is Rs. 66.50 Lakhs as compared to Rs. 7.46 Lakhs. The Profit aftertax stood at Rs. 32.67 Lakhs as compared to Rs. -7.24 Lakhs for the F.Y 2019-20.

Consolidated:

During the F.Y 2020-21 the Company and its Subsidiary Company Dr. Smith Biotic PrivateLimited revenue including other income stood at Rs. 7401.05 Lakhs as compared to Rs.5795.10 in F.Y 2019-20.

I'he Profit before tax is Rs. 6870 l.akhs as compared to Rs. -354.44 Lakhs for the F.Y2019-20. The Profit after tax stood at Rs. 5.31 l.akhs as compared to Rs. -378.76 Lakhsfor the F.Y 2019- 20.

PERFORMANCE OF THE SUBSIDIARIES OF THE COMPANY

DR. SMITHS BIOTECH PRIVATE LIMITED

During the financial year 2020-21. Dr. Smiths Biotech Private Limited has reported atotal income of INR 406.34 Lakhs/- and incurred total expenditure of 403.19/- Lakhs thusthe Company suffered a total profit before tax of INR 2.21 Lakhs/-. The Company still inits initial years of business development and setting its operations.

DIVIDEND

The Board of Directors of the company after holistically considering the financialposition of the company and the future financial needs of the company have decided not todeclare any dividend for the financial year ended March 31.2021.

TRANSFER TO RESERVE;

The directors do not propose to transfer any amount to the General Reserve. The amountsof net profit are carried to reserve & surplus account of the Company.

CHANGE IN THE NATURE OF BUSINESS;

During the Year the Company has not changed its business or object and continue to bein the same line of business as per the main object of the Company.

SHARE CAPITAL:

The issued subscribed and paid-up equity share capital of the Company as on 3151March. 2021 was Rs. 2336.08 Lakhs comprising of 23360764 equity shares of Rs. 10/- each.The Company has not issued any equity shares during the Financial Year 2020-21. Hencethere was no change in the share capital of the Company during the period under review.

MATERIAL CHANGES & COMMITEMENTS:

There were no material changes in the Company during the period under review.

BOARD OK DIRECTORS:

The composition of Board complies with the requirements of the Companies Act. 2013("Act"). Further in pursuance of Regulation 15(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations. 2015("Listing Regulations").theCompany is exempted from requirement of having composition of Board as per Regulation 17of Listing Regulations.

None of the Directors of Board is a member of more than ten Committees or Chairman ofmore than five Committees across all the Public Companies in which they are Director. Thenecessary disclosures regarding Committee positions have been made by all the Directors.

None of the Director of the Company is serving as a Whole-Time Director in any ListedCompany and is holding position of Independent Director in more than 3 Listed Company andnone of the Director of the Company is holding position as Independent Director in morethan 7 Listed Company.

None of the Directors of the Company is disqualified for appointed as Director asspecified in Section 164 (2) of the Companies Act. 2013 .

During the financial year under review there were changes in the constitution of theBoard of Directors of the Company The strength of the Board of Directors on 31 March. 2021was Six Directors as follows:

S.NO DIN Name of Director Date of Designation Appointment
1 01304850 Suraj Shriniwas Zanwar 07/01/2003 Managing Director
2. 07578366 Riyaz Bashir Khan 29/07/2016 Whole Time Director
3. 08466723 Santosh Shivaji Pimparkar 08/07/2019 Director
4. 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
5. 08202841 Shikha Rai 28/07/2020 Independent Director
6. 08955278 • Manoj Kumar Chunilal 13/11/2020 Non-Executive Director

During the financial year under review following changes have occurred in theconstitution of the Board of Directors of the Company:

S.NO DIN Name of Director Date of Appointment Designation
1 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
2. 08202841 Shikha Rai 28/07/2020 Independent Director
3. 08955278 Manoj Kumar C'hunilal 13/11/2020 Non-Executive Director
S.No DIN Name of Director Date of Resignation Designation
1. 08502901 Paresh Arun Shah 12/11/2020 Non- Executive Director
2. 01987724 Padmanabhan Balasubramaniam 20/05/2020 Independent Director
3. 06560184 Smita Gujral Khanna 01/06/2020 Independent Director

MEETING OF THE BOARD OF DIRECTORS:

The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the-Directors.

During the financial year under report the Board of Director's of the company have dulyjnet for 7 times in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the minutes book maintained for purpose.

The meetings of the Board of Directors of the Company were held on:

S.No Date of Meeting Place of Meeting Board Strength Name of Director present at meeting
1 02.06.2020 Corporate Office 4 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
• Santosh Shivaji Pimparkar
2 12.06.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
3 31.08.2020 Corporate Office 4 • Suraj Shriniwas Zanwar
• Paresh Arun Shah
• Riyaz Bashir Khan
• Santosh Shivaji Pimparkar
4 05.09.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Mohammad Raees Sheikh
• Riyaz Bashir Khan
5 15.10.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shall
• Riyaz Bashir Khan
6 13.11.2020 Corporate Office 3 • Suraj Shriniwas Zanwar
• Paresh Arun Shall
• Riyaz Bashir Khan
7 22.03.2021 Corporate Office 4 • Suraj Shriniwas Zanwar
• Riyaz Bashir Khan
• Mohammad Races Sheikh
f • Shikha Rai

INDEPENDENT DIRECTORS:

In terms of Section 149 of the Companies Act. 2013 and rules made there under theCompany two Non-Promoter Non-Executive Independent Directors in line With the act. Aseparate meeting Of Independent Directors was held on 30.05.2020 to review the ofNon-independent Directors and Board as whole and performance of the Company includingassessment of quality quantity and timeliness of flow of information between Companymanagement and Board.

The Company has received necessary declaration from each director under Section 149(7)of the Act that they meet the criteria of independence laid down in Section 149 (6) of theact.

DIRECTOR AND KEY MANAGERIAL PERSONNEL

Following is the composition of the Board of Directors and Key Managerial Personnel ofthe Company as on 31st March 2021:

S.NO DIN Name of Director Date of Appointment Designation
1 01304850 Suraj Shriniwas Zanwar 07/01/2003 Managing Director
2. 07578366 Riyaz Bashir Khan 29/07/2016 Whole Time Director
3. 08466723 Santosh Shivaji Pimparkar 08/07/2019 Director
4. 06857879 Mohammad Raees Sheikh 02/06/2020 Independent Director
5. 08202841 Shikha Rai 28/07/2020 Independent Director
6. Manoj Kumar Chunital 13/11/2020 Non-Executivc Director
7. BOSPG7481N Yashi Gupta 06/09/2019 Company Secretary
8. BCWPK1529B Riyaz Bashir Khan 12/06/2020 CFO

Based on the disclosures as provided by the directors or the Company in pursuance tothe provisions of Section 164 of the Companies Act 2013. none of the Directors of theCompany is found to be disqualified.

During the Financial Year Mr. Paresh Arun Shall had tendered resignation w.e.f 12thNovember 2020 and Mr. Manoj Kumar Chunilal appointed as the Non-Executive AdditionalDirectors of the Company w.e.f. 13th November 2020.

During the Financial year under review. Mr. Deepak Khandelwal Chief Financial Officerof the Company had tendered his resignation from the post w.e.f 11th June 2020. TheCompany in his place appointed Mr. Riyas Bashir Khan as Chief Financial Offcer of theCompany w.e.f. 12th June 2020.

During the Financial year under review Mr. Padmanabhan Balasubramaniam and Ms. SmitaGujral Khannu. Independent Directors of the Company had tendered his resignation from thepost w.e.f 20th May. 2020 and 1st June 2020 respectively. The Company in their placeappointed Mr. Mohammad Races Sheikh and Ms. Shikha Rai as Independent Director of theCompany w.e.f 2nd June. 2020 and 28th July. 2020 respectively.

PERFORMANCE EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act.

• The performance of the board was evaluated by the board after seeking inputsfrom all the directors on the basis of the criteria such as the board composition andstructure effectiveness of board processes information and functioning etc.

• The performance of the committees was evaluated by the board after seekinginputs from the committee member on the basis of the criteria such as the composition ofcommittees effectiveness of committee meetings etc.

• The board and the nomination and remuneration committee reviewed the performanceof the individual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspect of his role.

Separate meeting of Independent Directors was held to evaluate the performance of non-independent directors performance of the board as a whole and performance of thechairman taking into account the views of executive directors and non-executivedirectors. Performance evaluation of independent directors was done by the entire boardexcluding the independent director being evaluated.

DIRECTOR RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

(a) In the preparation of the annual accounts for the year ended March 31 2021. theCompany has followed the applicable accounting standards and there are no materialdepartures from the same;

(b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31. 2021 and of the profitand loss of the Company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act. 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d)The Directors have prepared the annual accounts on a ‘going concern' basis;

(e) The Company being unlisted sub clause (e) of section 134(3) of the Companies Act.2013 pertaining to laying down internal financial controls is not applicable to theCompany;

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

COMMITTEE OF BOARD

As per the provision of the Companies Act. 2013 the Company has constituted following

committees of the Board:

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholder Relationship Committee

iv. Corporate Social Responsibility Committee

AUDIT COMMITTEE:

The Board of Director has constituted Audit Committee as per the provision of Section177 of the Companies Act. 2013. I

The Composition of Audit Committee are as follows:

AUDIT COMMITTEE

NAME POSITION DESIGNATION
Mohammad Races Sheikh Chairman Independent Director
Suraj Shriniwas Zanwar Member Managing Director
Shikha Rat Member Independent Director

The meeting of Audit Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai
2 15.10.2020 • Mohammad Races Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai
3 13.11.2020 • Mohammad Raees Sheikh
• Suraj Shriniwas Zanwar
• Shikha Rai

NOMINATION & REMUNERATION COMMITTEE

The Board of Director has constituted Nomination & Remuneration Committee as perthe provision of Section 178 of the Companies Act 2013.

The Composition Nomination & Remuneration Committee of are as follows:

NOMINATION & REMUNERATION COMMITTEE

NAME POSITION DESIGNATION
Mohammad Raees Sheikh Chairman Independent Director
Manoj Kumar Chunilal Member Non-Executive Director
Shikha Rai Member Independent Director

The meeting of Nomination & Remuneration Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Paresh Shah
2 05.09.2020 • Mohammad Raees Sheikh
• Paresh Shah
3 22.03.2021 • Mohammad Raees Sheikh
• Shikha Rai

NOMINATION A REMUNERATION POLICY:

Nomination and Remuneration Policy in the Company is designed to create ahigh-performance culture. It enables the Company to attract motivated and retainedmanpower in competitive market and to harmonize the aspirations of human resourcesconsistent with the goals of the Company. The Company pays remuneration by way of salarybenefits perquisites and allowances to its Managing Director and the Executive Directors.

The Nomination and Remuneration Policy as adopted by the Board of Directors is placedon the website of the Company at www.cian.co and is annexed to this as Annexure A

REMUNERATION TO DIRECTOR:

The details of remuneration/sitting fees paid during the financial year 2020-2021 toExecutive Directors/ Directors of the Company is provided in Form MGT 9 which is the partof this report.

STAKEHOLDER RELATIONSHIP COMMITTEE:

The Board of Director has constituted Stakeholder Relationship Committee as per theprovision of Section 178 of the Companies Act. 2013.

The Composition of Stakeholder Relationship Committee are as follows:

STAKEHOLDER RELATIONSHIP COMMITEEE

NAME POSITION • DESIGNATION
Mohammad Raees Sheikh Chairman Independent Director
Manoj Kumar Chunilal Member Non- Executive Director
Shikha Rai Member Independent Director

The meeting of Stakeholder Relationship Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 31.08.2020 • Mohammad Raees Sheikh
• Paresh Shah
2 15.10.2020 • Mohammad Raees Sheikh
• Paresh Shah
3 13.11.2020 • Mohammad Races Sheikh
• Paresh Shah
4 22.03.2021 • Mohammad Raees Sheikh
• Shikha Rai

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Board of Director has constituted Corporate Social Responsibility Committee as perthe provision of Section 135 of the Companies Act. 2013.

The Composition Corporate Social Responsibility Committee of arc as follows:

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

NAME POSITION DESIGNATION
Suraj Shriniwas Zanwar Chairman Managing Director
Manoj Kumar Chunilal Member Non-Executive Director
Shikha Rai Member Independent Director

The meeting of Corporate Social Responsibility Committee was held on:

S.No Date of Meeting Name of Member present in the meeting
1 02.06. 2020 • Suraj Shriniwas Zanwar
• Paresh Shah
31.08.2020 • Suraj Shriniwas Zanwar
• Paresh Shah
3 15.10.2020 • Suraj Shriniwas Zanwar
• Paresh Shall
4 22.03.2021 • Suraj Shriniwas Zanwar
• Manoj Kumar Chunilal

WHISTLE BLOWER POLICY:

In accordance with Section 177 of the Companies Act. 2013. the Company has adopted aWhistle Blower Policy to deal with instance of fraud and mismanagement if any. TheCompany had established a mechanism for directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of our Code of Conduct andEthics. The mechanism also provides for adequate safeguards against victimization ofdirectors and employees who avail of the mechanism and also provide for direct access tothe Chairman of the Audit Committee in the exceptional cases.

We affirm that during the financial year 2020-21. no employee or director was deniedaccess to the Audit Committee.

DEPOSITS

In terms of the provisions of Sections 73 of the Act read with the Companie (Acceptanceof Deposits) Rules. 2014. the Company has not accepted any deposits during the year underreview and as such no amount of principal or interest was outstanding as on 31s'March. 2021.

PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS UNDER SECTION 186

The Company has invested in 22.00.000 equity shares of Rs. 10 each aggregating to Rs.7.08.84000 ( Rupees Seven Crores Eight Lakhs Eighty-Four Thousand only) of DR. SMITHSBIOTECH PRIVATE LIMITED. No Loans mid Guarantees covered under the provisions of Section186 of the Companies Act 2013 have been given by the Company

EXTRACT OF ANNUAL RETURN

Annual Return extract is in the accordance with Section 02 sub-section (3) of theCompanies Act. 2013 read With Rule No. 12(1) of the Companies (Management andAdministration (Rules 2014) the copy of Annual Return attached as Annexure B to thisreport and has been placed on the website of Company. The Member may follow web link forthe same w~ww.cian.co

RELATED PARTY TRANSACTIONS

During the financial year under review the Company has entered into the contract orarrangements Pursuance of the provisions of section 188(1) of the Companies Act 2013 theparticulars of such transactions in prescribed Form No. AOC-2. has been annexed herewithas "Annexure C".

DIRECTORS REMl NERATION

The details of retmineration/sitting fees paid during the financial year 2020-21 toExecutive Directors/Directors of the Company is provided in Form MGT-9 which is the partof this report.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EARNING AM) OUTGO:

As required under section l34(3Km) of the Companies Act 2013. read with the Companies(Accounts) Rules. 2014. information relating to Conservation of Energy. TechnologyAbsorption and Foreign Exchange Earning and Outgo is as follows:

Consenation of Energy Technologv Absorption:

The Company is taking adequate steps to conserve the energy at all the levels and theCompany is also implementing various measures for reduction in consumption of energy. TheDisclosure of particulars with respect to Conservation of Energy has been attachedherewith as in FORM A as "Anncxure D". There is no technology absorption duringthe year under review.

Foreign Exchange Earning & Outgo:

(Amount in Lakhs)

PARTICULAR FY 2020-21 FY 2019-20
Foreign Exchange Earning 775.82 515.89
Foreign Exchange Outgo 0.00 0.00

4 • In today's economic environment. Risk Management is a very important part ofbusiness. The Company is Exposed to inherent uncertainties owing to the sectors in-whichit operates. A key factor in determining a company's capacity to create sustainable valueis the risks that the company is willing to take <ut strategic and operational levels)and its ability to manage them effectively. Many risks exist in a company's operatingenvironment and they emerge on a regular basis flic Company's Risk Management processesfocuses on ensuring that these risks are identified on a timely basis and addressed.

Your Company also has a Risk Management Frarmework in place covering all critical areasof operation. This framework is reviewed periodically keeping in mind the businessdynamics and external environment and provides the guidelines for managing the variousrisks across the business.

The Process of Risk Management include following steps:

1) Risk Identification and Impact Assessment

2) Risk Evaluation

3) Risk Reporting and Disclosures

4) Risk Mitigating and Monitoring

INTERNAL FINANCIAL CONTROL

The Company has a proper and adequate system of internal controls. This ensures thatall transactions are authorized recorded and reported correctly and assets aresafeguarded and protected against loss from unauthorized use or disposition. In additionthere are operational controls and fraud risk controls covering the entire spectrum ofinternal financial controls

The Internal Auditor of the Company carries out review of the internal control systemsand procedures. The internal audit reports are reviewed by Audit Committee and Board.

Your Company has also put in place adequate internal financial controls with referenceto the financial statements commensurate with the size and nature of the Company. DuringLhe year such controls were tested and no material discrepancy or weakness in theCompany's internal controls over financial reporting was observed

DISCLOSl RE OF REMUNERATION

Pursuant to Section 197 of the Companies Act. 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. detail of ratio of theremuneration of each director to the median employee's remuneration are appended to thisreport as "Annexure E"

There is no employee drawing remuneration of Rs. 8.50000/- per month or Rs.1.02.00.000/- per year therefore the particulars of employees as required u/s 197(12) ofthe Companies Act. 2013 read with Rule 5(2) and Rule (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. are not applicable to the company.

i

Name of the* top 10 employees in term of remuneration drawn in the financials year2020- 21:

A statement of Top-10 employees in terras of remuneration drawn as per rule 5(2) readwith rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules.2014 as amended is annexed with the report "Annexhit F'\

corporate governance

Your Company strives to incorporate the appropriate standards for corporate governance.However pursuant to Regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company is not required to mandatorily comply with theProvisions of certain regulations of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and therefore the Company has not provided a separatereport on Corporate Governance although lew of the information are provided in this underrelevant heading.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In. terms of Regulation 34. and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a review of the performance of the Company for the yearunder review Management Discussion and Analysis Report is presented in a separatesection forming part of this Annual Report as "Annexure G11

AUDITORS

STATUTORY AUDITOR

M s. Agarwal Mahesh K & Co.. Chartered Accountants (FRN:008007C) were appointed asthe Statutory Auditors of the Company in the Extra-Ordinary General Meeting (AGM) of theCompany held for the year 2018-19 to hold office from the conclusion of the this AnnualGeneral Meeting of the Company till the conclusion of the Annual General Meeting to heheld in the financial year 2023-24.

As required under Regulation 33(d) of the SEBI (EODR) Regulation. 2015 the Auditor hasconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of . Chartered Accountant of India. .

Board Considered the major observations given by the auditor and reply of management onthe same as follows:

(i) According to the information and explanations given to ns and in our opinion thecost records pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedand prescribed by the Central Government under subsection (I) of Section 140 of theCompanies Act 2013 needs to be maintained by the company as per the recommendation givenby the Cost Auditor. -

Renlv form Management: Company has process and systems to maintain the cost records.During the previous year due to CQVID-19 situation there were unforeseen changes in thebusiness world. Hence as a business owner our priority was to run business and maintainthe plant which is being done and we have sustained in this difficult period.

Our maximum office staff was working from home and due to limitations of theavailability of material transport and changed demand in products it was practicallydifficult to follow hundred percent process cost record.

This is already being taken care by the management at the beginning of this financialyear and the Management reassures the stakeholders of the company that complete processwill be followed before closure of half yearly financial statements.

(ii) According to the information and explanations given to us the Company liasdelayed (defaulted) in repayment of loans and borrowings to banks and financialinstitution as on the balance sheet date of Rs.279.73 lakhs. Out of which Rs.97.46 lakhshave been repaid as on the date of report.

Reply form Management: Due to changed business condition ballooning effect of EMls.delayed payments by government and other customers company have faced working capitalshortage during the previous year. But situation is improved and as of today the alloutstanding dues for the financial year 2020-2021 was paid by the Company.

The Board of the Company take pleasure in slating that no other observation has beenmade by the Auditors in their report w hich needs any further explanation by the Board.

INTERNAL Al'DITOR

• The board of directors of Company Propose to reappoint M/s Cliirag Sancheti& Associates. Chartered Accountants (FRN: 1 -40822W). for conducting the audit forfinancial year 2021-22 as per the internal audit standards and regulations. The internalauditor reports their findings to the audit committee of the board. The audit functionmaintains its independence and objectivity while carrying out assignments. It evaluates ona continuous basis the adequac} and effectiveness of internal control mechanism withinteraction of KMP and functional staff.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act read with The Companies(Appointment and Remuneration of Managerial Personnel ) Rules. 2019 your Company hasappointed KPRC and Associates practicing Company Secretaries firm. Pune to conduct theSecretarial Audit of the Company for the financial year 2020-21. The Secretarial AuditReport is annexed herewith as "Anncxure H" to this Report. Further the board ofdirectors propose to appoint M/s. Riteek Baheti & Associates Practicing CompanySecretary having Certificate of Practice No. 17766 as Secretarial Auditor for FinancialYear 2021-2022.

Secretarial Auditor has given some observations in his Secretarial Audit Report thecompany has already taken the corrective action and ratify the mistakes.

COST AUDITOR

The company is trying to maintaining the Cost Records as specified by the CentralGovernment under section 148 of the Companies Act. 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014. and accordingly such accounts and records aremade and maintained by the Company in full Hedge form in near future as assured by theboard. Further the cost records are also audited by M/s Abhijeet Deshmukh & Co. CostAuditors. The Company is in process to file the Cost Audit Report for the year 2020-21.

Your Directors had on the recommendation of the Audit Committee appointed M/sAbhijeet Deshmukh & Co.. Cost Auditors to audit the cost accounts of the Company forthe financial year 2021-22 on a remuneration of Rs. 1.10.000'- (plus GST). As requiredunder the Companies Act. 2013. the remuneration payable to the Cost Auditor is required tobe placed before the Members in General Meeting for their ratification. Accordingly aresolution seeking Member's ratification for the remuneration payable to M/s AbhijeetDeshmukh & C'o.. Cost Auditors is included at Item No. 5 of the Notice of the AnnualGeneral Meeting

Board Considered the major observations giv en by the auditor and reply of managementon the same as follows:

Observation: The existing cost accounting system of the Company is at preliminary levelwhich meets the limited objectives of the Management of the Company. The Management shouldidentify and initiate steps to strengthen further the cost accounting system as perindustry best practices to derive more benefits out of it.

Reply form Management: Company has process and systems to maintain the cost records.During the previous year due to COVID-19 situation there were unforeseen changes in thebusiness world. Hence as a business owner our priority was to run business and maintainthe plant which is being done and we have sustained in this .difficult period.

Our maximum office staff was working from home and due to limitations of theavailability of material transport and changed demand in products it was practicallydifficult to follow hundred percent process cost record.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 1430 2) OTHER THANTHOSE REPORTABLE TO THE CENTRAL GOVERNMENT

The Auditors of the Company have not reported any fraud as specified under Section143(12) of the Companies Act. 2013.

During the Financial Year company has not received any cases regarding Fraud reportingrequired under Companies Amendment Act. 2015.

CREDIT RATING

I'he Credit Rating Agency Brickwork has awarded Credit rating of BWR D for long termFacilities and short term Facilities to the company's borrowings. Further that there is achange in the rating of the company during the period under review the company rating isdowngraded from BWR BBB- for Long term facilities and BWR A3 for short term facilities ofthe company.

DISCLOSURES UNDER SEXI AL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION& REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (Prevention.Prohibition and Redressal) Act. 2013 and the Rules there under. The Policy aims to provideprotection to employees at the work place and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.

I he Company has always provided a congenial atmosphere for work to all the employeesthat is free from discrimination and harassment including sexual harassment. It hasprovided equal opportunities of employment to all without regard to their caste religioncolor marital status and sex.

The company is in process of constitution of Internal Complaints Committee as requiredunder the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressal)Act 2013.

The Company has not received any complaint of sexual harassment during the financialyear 2020-21.

GOING C ONCERN STMT'S

There is no significant or material order passed during the year by any regulatorcourt or tribunal impacting the going concern status of the Company or its futureoperation.

C ORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policy of your Companyand the initiatives Undertaken by your Company on CSR activities during the year underreview are set out in "Annexure I" of this report in the format prescribed underthe Companies (CSR Policy) Rules20l4.The CSR policy is available on the website of yourCompany.

SUBSIDIARIES. JOINT VENTURE OR ASSOCIATES

Companies which become to be Company's Subsidiary. Joint Venture or Associate Companiesas per the provision of Companies Act. 2013 during the financial year 2020-21 as‘Annexure J'

S.No Name of Company Nature Percentage of Holding Section
I. Dr. Smith Biotech Private Limited Wholly Owned Subsidiary 99.99% 2(87)

MAINTENANCE OF COST RECORDS:

The Provision of section 148 of the Companies *Act. 2013 with respect to themaintenance of cost records are applicable to the Company and company has maintainedadequate record during the year under review.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

The Board of Director confirms that the secretarial standard as applicable to theCompany have been complied with.

MATERIAL ORDER BY TRIBUNAL OR OTHER REGULATORY BODY

There is no significant or material order passed during the year by any regulatorcourt or tribunal impacting the going concern status of the Company or its futureoperation.

AC'KNOW LEPG EM ENT

Tlte Directors would like to express their sincere appreciation for the assistance andco-operation received from the banks. Government authorities and members during the yearunder review. The Directors also wish to place on record their deep sense of appreciationfor the committed services by the Company's executives.

CAUTIONARY NOTE

The statements forming pan of the Directors' may contain certain forward lookingremarks w ithin the meaning of applicable provisions of the Companies Act. 2013 and rulesmade there under. Many factors could cause the actual results performances orachievements of the company to be materially different from any future resultsperformances or achievements that may be expressed or implied by such forward lookingstatements. T his Report should be read in conjuction with the financial statementsincluded herein and the notes thereto.

BY THE ORDER OF BOARD OF DIRECTORS

FOR CIAN HEAL THCARE LIMITED

(Earlier known Tv CIAN HEALTHCARE PRIVA TE LIMITED)

Date: 04/09/2021

• Place: Pune

.