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Ind-Swift Ltd.

BSE: 524652 Sector: Health care
NSE: INDSWFTLTD ISIN Code: INE788B01028
BSE 00:00 | 26 Nov 13.41 0.44
(3.39%)
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13.61

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12.33

NSE 00:00 | 26 Nov 13.25 0.30
(2.32%)
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OPEN 13.58
PREVIOUS CLOSE 12.97
VOLUME 126625
52-Week high 16.76
52-Week low 3.40
P/E
Mkt Cap.(Rs cr) 73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 13.58
CLOSE 12.97
VOLUME 126625
52-Week high 16.76
52-Week low 3.40
P/E
Mkt Cap.(Rs cr) 73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ind-Swift Ltd. (INDSWFTLTD) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 35th Annual Report ofthe business and operations along with the Audited Financial Statements of the Company forthe financial year ended on March 31 2021.

FINANCIAL RESULTS

The Financial performance of the Company for the year ended March 312021 is summarized below:-

(Rs. In Lacs)
Particulars Year ending 31-03-2021 Year ending 31-03-2020
Total Revenue 36533.12 34540.01
Gross Profit ( Loss) (2981.60) (1912.10)
Interest 4622.93 2868.31
Depreciation 3270.32 3359.36
Provision for deferred tax 0 0
Total Comprehensive Income 1800.68 (3632.53)
Net Profit (Loss) (2949.32) (1666.07)
Balance c/f to balance sheet (2981.60) (1912.10)

REVIEW OF BUSINESS OPERATIONS

The financial year 2020-21 was again a challenging year for theCompany. During financial year 2020-21 your company earned total revenue of Rs. 36533.12lacs against Rs. 34540.01 Lacs during financial year 2019-20. The Company incurred netloss of Rs. 2949.32 lacs during 2020-21 against losses of Rs. 1666.07 lacs in 2019-20.During the year your Company earned an EBIDTA of Rs. 55.53 Crores as compared to Rs.36.98 Crores in the previous financial year. The export turnover of the Company inFinancial Year 2020-21 was Rs. 26427.36 lacs as compared to Rs. 22895.90 lacs in theprevious financial year.

INDIAN ACCOUNTING STANDARDS:

The financial statements for the year ended on March 31 2021 has beenprepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies(Indian Accounting Standards) Rules 2015 and the Companies (Indian Accounting Standards)Amendment Rules 2016 notified under section 133 of Companies Act 2013 and other relevantprovisions of the Act. The estimates and judgments relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonably present the Company's state of affairs profitsand cash flows for the year ended March 31 2021.

The Notes to the Financial Statements adequately covers the AuditedStatements and form an integral part of this Report.

STATE OF AFFAIRS OF THE COMPANY

The state of affairs of the Company is presented as part of theManagement Discussion & Analysis Report in a separate section forming part of thisreport as required under the SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015.

IMPACT OF COVID-19

The Government of India had declared the lockdown w.e.f 24th March2020 due to the outbreak of Covid-19 pandemic which affected all of the India and theworld. The manufacturing facilities of the Company also remained close for some of thetime during the financial year 2020-21.

However being the manufacturers of pharmaceuticals and hence providerof essential services and exempted from lockdown the manufacturing facilities of yourCompany continued with the operations at all of its manufacturing sites albeit withinitial challenges such as shortage of manpower availability of raw materials packingmaterials and disruptions in the logistics and supply chain.

OUTLOOK

The main business of your Company is manufacturing PharmaceuticalProducts. We are presently in both domestic and export markets. In view of the scenariodescribed in the management discussions your Company is expected to grow with wide rangeof products and manufacturing expertise barring unforeseen circumstances.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the Financial Year 2020-21 there is no change in theDirectorship of the Company.

Pursuant to the provisions of Section 152 of the Act Sh. NavrattanMunjal (DIN No. 00015096) and Sh. Himanshu Jain (DIN No. 00014533) Directors will retireby rotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment. The Board recommends their re-appointment.

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under the applicable provisions of Section 149 of the Companies Act 2013.Further all the Independent Directors of the Company have also declared that they haveregistered themselves with databank of Independent Directors as maintained by IndianInstitute of Corporate Affairs in compliance with Rule 6(1) of Companies (Appointment andQualification of Directors) Rules 2014.

During the year four Board Meetings were held on 27th June 2020 10thAugust 2020 11th November 2020 and 13th February 2021. The details regarding themeetings are given in the Corporate Governance Report.

In terms of the provisions of Section 2(51) and Section 203 of the Actthe Board of Directors has nominated following as KMPs of the Company:

1. Sh. S R Mehta (Whole Time Director designated as Chairman)

2. Dr. Gopal Munjal (Managing Director & CEO)

3. Dr. V R Mehta (Whole Time Director designated as Joint ManagingDirector)

4. Sh. Arun Seth (Chief Financial Officer)

5. Mr. Amrender Kumar Yadav (Company Secretary)

In April 2019 the Registrar of Companies Chandigarh had disqualifiedDr. Gopal Munjal Sh. S. R. Mehta and Dr. V. R. Mehta Directors under Section 164 (2)(b)of the Companies Act 2013 probably due to disposal of the Company's appeal ofrestructuring of fixed deposits by Hon'ble NCLAT New Delhi. The Company has not receivedany intimation or notice regarding such disqualification. As there was no default as topayment of fixed deposit as on 31.03.2019 so the Company had submitted a representation inthis regard with the office of the ROC which is still pending.

The following four Independent Directors of the Company will completetheir first term of appointment before the Annual general Meeting for the financial year2021-22:

1. Dr. J K Kakkar (DIN 00015493)

2. Sh. S C Galhotra (DIN 07205416)

3. Ms. Anoop Michra (DIN 07813108)

4. Sh. J S Ahluwalia (DIN 06930649)

Keeping in view the experience and un-tiring services of all the 4Independent Directors the Board of Directors of the Company in its meeting held on 14thAugust 2021 approved the re-appointment of these Independent Directors in considerationof recommendation of Nomination & Remuneration Committee. The Company has received adeclaration from Independent Directors being re-appointed that they meets the criteria ofIndependence as provided in section 149(6) of the Companies Act 2013 along with theirconsent for their second term of appointment.

All the Independent Directors being re-appointed are registered withdatabank of Independent Directors as maintained by Indian Institute of Corporate Affairsin compliance with Rule 6(1) of Companies (Appointment and Qualification of Directors)Rules 2014.

a) Continuation of Non-Executive Directors of more than 75 years of Age

Pursuant to Regulation 17 (1A) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended videSEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 theCompany took the approval of the Members by way of Special Resolution in the AnnualGeneral Meeting of the Company dated 28th September 2018 for continuation of Directorshipof Dr. J K Kakkar (DIN:00015493) (aged around 85 years) on the Board of the Company as aNon Executive Independent Director of the Company. As Dr. J K Kakkar is being re-appointedfor his second term of Independent Director the Company is taking members' approvalpursuant to Regulation 17 (1A) of the SEBI (LODR) Regulations 2015 through a specialresolution in the ensuing Annual General Meeting to enable Dr. J K Kakkar to continue withhis second term of appointment in the Company.

During the financial year 2021-22 Sh. S C Galhotra a Non ExecutiveIndependent Director of the Company will also attain the age of 75 years. So to complywith Regulation 17 (1A) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company is taking members' approval through a special resolution inthe ensuing Annual General Meeting to enable Sh. S C Galhotra to continue his Directorshipin the Company.

b) Relationship/Transaction of Non-Executive Directors with the Company

The Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than taking sitting fees andreimbursement of expenses incurred by them to attend meetings of the Company. Details andbrief resume of the Directors seeking reappointment/appointments required by Regulation 26(4) and 36 (3) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ('Listing Regulations') and as required underSecretarial Standards - 2 on General Meetings issued by "The Institute of CompanySecretaries of India" are furnished in the Notice convening the Annual GeneralMeeting forming part of the Annual Report.

Other details of the Directors have been given in the CorporateGovernance Report attached to this Report.

c) No. of Meetings of the Board

The Board meetings of your company are planned in advance inconsultation with the Board Members. The Board met four (4) times during the FinancialYear 2020- 21 the details of which are given in the Corporate Governance Report thatforms part of this Annual Report. The intervening gap between any two meetings was withinthe period prescribed/allowed by the Companies Act 2013.

d) Performance evaluation of the Board its Committees and individualDirectors

Pursuant to applicable provisions of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors.

The Independent Directors held separate meeting on 12th February 2021without the presence of Non-Independent Directors and the members of management anddiscussed inter-alia the performance of non- Independent Directors and Board as a wholeand the performance of the Chairman of the Company after taking into consideration theviews of Executive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried outevaluation of every Director's performance. The performance evaluation of all theIndependent Directors have been done by the entire Board excluding the Director beingevaluated. On the basis of performance evaluation done by the Board it shall bedetermined whether to extend or continue their term of appointment whenever therespective term expires.

The Directors expressed their satisfaction with the evaluation process.

e) Details of Familiarization Programme:

The details of programmes for familiarization of Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates the business model and related matters are postedon the website of the Company at http://www.indswiftltd.com/familiarisation-programme.php.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:

a) That in the preparation of the annual financial statements for theyear ended March 31 2021; the applicable accounting standards have been followed alongwith proper explanation relating to material departures if any;

b) That such accounting policies as mentioned in Notes to the FinancialStatements have been selected and applied consistently and judgment and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2021 and of the profit of the Company for theyear ended on that date;

c) That proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) That the annual financial statements have been prepared on a goingconcern basis;

e) That proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively.

f) That systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

In compliance with the provisions of Section 177(9) of the CompaniesAct 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014and Regulation 22 of SEBI (LODR) Regulations 2015 the Company has in place a"Whistle Blower Policy" which provides an opportunity to the Directors andemployees to raise concerns about unethical and improper practices or any other wrongfulconduct in or in relation to the company. The details of the Whistleblower Policy arestated in the Corporate Governance Report and the said Policy has been uploaded on theCompany's website www.indswiftltd.com and the web link to the same is www.indswiftltd.com/whistle-blower-policy.php.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31 2021 the Company does not have any AssociateSubsidiary or Joint venture.

The Company has framed a policy for determining material subsidiarieswhich has been uploaded on the Company's website and the web link to the same ishttp://www.indswiftltd. com/material-subsidiary.php.

DIVIDEND

In view of losses during Financial Year 2020-21 the Board does notrecommend any dividend for the Financial Year 2020-21.

There is no unpaid dividend outstanding as on 31.03.2021. RESERVES

As on 31st March 2021 the Reserves of the Company were Rs. (70599.73)as compared to Rs. (72395.03) in previous financial year.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to provisions of Section 124(6) of the Companies Act 2013(Act) read with Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 (IEPF Rules) the Company is required to transfer allunpaid or unclaimed dividends after the completion of 7 (seven) consecutive years toInvestor Education and Protection Fund (IEPF) established by the Central Government.Further according to the rules the shares in respect of which dividend has not been paidor claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account created by the IEPF Authority. Accordingly the Companyhas transferred all the unclaimed and unpaid Dividends along with respective Equity Sharesto the IEPF Account.

PUBLIC DEPOSITS

The Company is repaying the Fixed deposits as per re-payment scheme asapproved by the Company Law Board vide its order dated 30th September 2013. During theyear the Company has made re-payment of Fixed Deposits amounting to Rs. 5.33 Crores.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review whichrequired the Statutory Auditors to report to the Audit Committee and/or Board undersection 143(12) of the Companies Act 2013 and rules framed thereunder.

RELATED PARTY TRANSACTIONS DISCLOSURES UNDER COMPANIES ACT 2013

All related party transactions entered into during the financial yearwere on an arm's length basis and in the ordinary course of business. No related partytransaction was in conflict with the interest of the Company. No materially significantrelated party transaction was made by the Company with the Key Managerial Personnel. Asprescribed by Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies(Accounts) Rules 2014 particulars of related party transactions are given in Form AOC-2 as "Annexure-I" to this Report. The policy on Related Party Transactions asapproved by the Board has been uploaded on the Company's website www.indswiftltd.com.

RELATED PARTY TRANSACTIONS DISCLOSURES UNDER LODR REGULATIONS 2015

As per the LODR Regulations 2015 every Listed Company needs todisclose the amounts of Loans/advances/investments outstanding at the end of the yearalong with the maximum amount outstanding during the year.

In compliance to the above regulations the Company hereby givedisclosure in the specified format:-

In the accounts of Nature of Transaction Disclosure
Holding Company Loans & Advances Nil as Company has no Holding Company
Subsidiary Loans & Advances Nil as Company has no Subsidiary Company
Holding Company Investments No as Company has no Subsidiary Company

DISCLOSURE OF TRANSACTIONS WITH PROMOTER/ PROMOTER GROUP

As per Schedule V of the LODR Regulations 2015 every listed Companyshall disclose the transactions with any person or entity belonging to thepromoter/promoter group which holds 10% or more shareholding in the listed entity.

The Company has not entered into any transaction with any person orentity belonging to the promoter/promoter group which holds 10% or more shareholding inthe listed entity.

RISK MANAGEMENT

Even though the provision of Regulation 21 of the SEBI (LODR)Regulations 2015 regarding constitution of Risk Management Committee is not applicable onthe Company still the Board has constituted a Risk Management Committee. The details ofthe Committee are given in the Corporate Governance Report.

The Company's Risk Management Policy is available on Company's Websitei.e. www.indswiftltd.com and the Weblink of the same ishttp://www.indswiftltd.com/risk-management. php

CHANGES IN CAPITAL STRUCTURE AND LISTING OF SHARES

The paid up Equity Share Capital as at March 31 2021 stood at Rs.10.83 crore consisting of 54164653 equity shares of Rs. 2 each. During the year underreview the Company has not issued shares or convertible securities or shares withdifferential voting rights nor has granted any stock options or sweat equity or warrants.

The Company's shares are listed on the National Stock Exchange of IndiaLimited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 (2) (e) of the Listing Regulations 2015 readwith other applicable provisions the detailed review of the operations performance andfuture outlook of the Company and its business is given in the Management's Discussion andAnalysis Report which forms part of this Annual Report and is incorporated herein byreference and forms an integral part of this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186OF THE COMPANIES ACT 2013

Pursuant to the provisions of Section 134(3)(g) of the Companies Act2013 (Act) particulars of loans/guarantees/ investments/securities given under Section186 of the Act are given in the notes to the Financial Statements forming part of theAnnual Report.

ANNUAL RETURN

The annual return of the Company as per the provision of Section134(3)(a) and 92(3) of the Companies Act 2013 is available on website of the Company atwww.indswiftltd.com.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company has a Nomination and Remuneration Policy. In compliancewith the provisions of Sections 134(3)(e) and 178 of the Companies Act 2013 andRegulation 19 read with Part D of Schedule II of the SEBI (LODR) Regulations 2015 theNomination & Remuneration Committee:

i) has formulated criteria for determining qualifications positiveattributes and independence of a director and recommends to the Board Policy relating toremuneration for directors KMP and other employees;

ii) has formulated the evaluation criteria for performance evaluationof independent directors and the Board;

iii) has devised a policy on Board diversity;

iv) identifies persons who are qualified to become directors or may beappointed in Senior Management in accordance with criteria laid down and recommend to theBoard their appointment and removal;

v) recommends to the Board whether to extend or continue the term ofappointment of the independent director on the basis of the report of performanceevaluation of independent directors.

The Company's Nomination and Remuneration Policy is available onCompany's Website i.e. www.indswiftltd.com

CORPORATE SOCIAL RESPONSIBILITY

The provisions of section 135 of the Companies Act 2013 regardingCorporate Social Responsibility are not applicable on your Company.

ENVIRONMENT/POLLUTION CONTROL HEALTH AND SAFETY:

The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

RESEARCH & DEVELOPMENT AND QUALITY CONTROL

The activities of R&D consists of improvement in the processes ofexisting products and to develop new products. The Quality Control is the strength of theCompany. All raw materials and finished products pass through stringent quality checks forbetter results.

INSURANCE

The Company has taken adequate insurance policies for its assetsagainst the possible risks like fire flood public liability marine etc. The Companyhas not taken Directors and Officers Liability insurance policy as it is applicable on top500 listed Companies as on 31st March 2021 and your Company does not fulfill thatcriteria.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The particulars as prescribed under 134(3)(m) of the Companies Act2013 read with Rule 8 of The Companies (Accounts) Rules 2014 relating to conservation ofenergy technology absorption and foreign exchange earnings and outgo are given in"Annexure-II".

COMMITTEES OF THE BOARD

The Company's Board has constituted the following Committees prescribedunder the Companies Act and the LODR Regulations 2015:-

a) Audit Committee

b) Stakeholders Relationship Committee

c) Risk Management Committee

d) Nomination and Remuneration Committee

e) Sub-Committee of the Board

The details of the Composition of the Committees their role and termsof reference are given in Corporate Governance report.

STATUTORY AUDITORS

The Audit Committee of the Company had proposed and on 26th August2017 the Board of Directors of the Company had recommended the Appointment of M/s Jain& Associates Chartered Accountants (ICAI Firm Reg. No. 001361N) as the StatutoryAuditors of the Company for a period of 5 Consecutive years from the conclusion of the31st Annual general Meeting till the conclusion of the 36th Annual General Meeting of theCompany to be held in the year 2022.

Further the shareholders of the Company had approved the appointmentof M/s Jain & Associates Chartered Accountants as the Statutory Auditors of theCompany by passing the Ordinary Resolution in the 31st Annual General Meeting held on 26thSeptember 2017.

A) EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS IN THEIR REPORT.

Regarding observations/ qualifications made by the Auditors theDirectors have to state as under:-

1. Due to NPA status of accounts of the Company with Bank of India thebank is not charging interest in the account of the Company and also not providing accountstatement to the Company. Due to this approximate interest liability on account of thesame amounting to Rs. 11.63 crores (Previous year Rs.10.17 Crore) has not been provided inbooks of accounts. The same will be provided at the time of settlement/charging ofinterest by banks in account.

COST-AUDITORS AND THEIR REPORT

M/s. V Kumar & Associates Cost Accountants have been dulyappointed as Cost Auditors of the Company for audit of cost accounting records which arecovered under the Cost Audit Rules for current financial year ending 31st March 2022.

As required by Section 148 of the Companies Act 2013 necessaryresolution has been included in the Notice convening the Annual General Meeting seekingratification by the Members to the remuneration proposed to be paid to the Cost Auditorsfor the financial year ending 31st March 2022.

The Cost Audit Reports are required to be filed within 180 days fromthe end of the financial year. The Cost Audit Reports for the financial year 2019-20issued by M/s V. Kumar and Associates Cost Auditors was filed with Ministry of CorporateAffairs. The Cost Audit Reports for the financial year ended March 31 2021 will be filedwithin the prescribed period.

It is further to declare that Company has maintained all the costrecords as specified by the Central Government under sub section (1) of section 148 of theCompanies Act 2013.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Vishal Arora Practicing Company Secretary was appointed asSecretarial Auditor of the Company for the financial year 2020-21 pursuant to Section 204of the Companies Act 2013. The Secretarial Audit Report submitted by them in theprescribed form MR- 3 is attached as "Annexure 3 & 3A" to the Directors'Report.

The secretarial Auditors have observed five observations in theirsecretarial audit report which are self explanatory in nature and reply to all theobservations not amounting to qualifications by the board is as under:

1. The Company is repaying the fixed deposits as per the repaymentscheme approved by Company Law Board vide its order dated 30.09.2013. During the year theCompany has made repayment of fixed deposits amounting Rs. 5.33 Crores.

2. The Central bank of India (Lender Bank) had declared the Companyand its Directors naming Sh. S R Mehta Dr. Gopal Munjal Dr. V R Mehta Sh. NavrattanMunjal Sh. S P Sharma Dr. V K Arora Sh. S C Galhotra Mr. R S Bedi as willfuldefaulters. Although the Company has already repaid its debt to Central Bank in March2020 still the willful defaulter notice has not been withdrawn by the Bank till date. TheCompany has also filed the legal suits against the Bank for setting aside the orderswhereby the Directors have been declared as willful defaulters.

3. The immovable properties of the Company located at Plot No. 781Industrial Area Phase-II Chandigarh and Plot No. 42 Phase-II Chandigarh are presentlyon lease basis and not in the name of the Company. The same is pending due to legal issuesand Company is under process of getting them registered in its own name.

4. The Registrar of Companies has disqualified Dr. Gopal Munjal (DIN00005196) Sh. Sanjeev Rai Mehta (DIN 00005668) and Dr. Vikrant Rai Mehta (DIN 00010756)Directors of the Company under section 164(2)(b) of the Companies Act 2013 probably dueto disposal of the Company's appeal of restructuring of Fixed Deposits by Hon'ble NCLATNew Delhi. The Company has not received any intimation or notice regarding suchdisqualification. The Company has submitted representation in this regard with the officeof ROC which is still pending.

5. Regarding the qualifications by the Statutory Auditors of theCompany the Directors have already given their explanations in Directors' Report and NoteNo. 34(ii) of the Notes on Financial Statements forming part of this Annual Report.

INTERNAL AUDITORS

The Audit Committee in its meeting held on 27th June 2020 hadrecommended and Board of Directors in their respective meeting held on even date hadapproved the appointment of M/s Avishkar Singh & Associates Chartered Accountants asInternal Auditor of the Company for the Financial Year 2020-21. They conducted theInternal Audit of the Company as required under the provisions of Section 138 of theCompanies Act 2013 and their reports were reviewed by the Audit Committee and Board ofDirectors during the Financial Year 2020-21.

For first & second quarter of the Financial Year 2021-22 i.e.April-Sept 2021 the Audit Committee had recommended and Board of Directors had approvedthe appointment of M/s Avishkar Singh & Associates Chartered Accountants as InternalAuditor of the Company. The Company will review the Internal Audit report and appointInternal Auditors on time to time basis for rest of the period of financial year 2021-22.

INTERNAL COMPLAINTS COMMITTEE

The Company has complied with all the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressel) Act 2013.

During the year the Committee has not received any complaint relatedto Sexual harassment.

INTERNAL FINANCIAL CONTROL

Your Company has an effective internal control and risk mitigationsystem which are constantly assessed and strengthened with new/revised standard operatingprocedures. The Company's internal control system is commensurate with its size scale andcomplexities of its operations. The main thrust of internal audit is to test and reviewcontrols appraisal of risks and business processes besides bench marking controls withbest practices in the industry.

The Audit Committee actively reviews the adequacy and effectiveness ofthe internal control systems and suggests improvements to strengthen the same. The Companyhas a robust Management Information System which is an integral part of the controlmechanism.

The Audit Committee Board of Directors Statutory Auditors and theBusiness heads are periodically apprised of the internal audit findings and correctiveactions taken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.

CORPORATE GOVERNANCE

The Company strives to maintain the required standards of CorporateGovernance and adhere to the Corporate Governance requirements set out by SEBI LODRRegulations 2015. The Company has complied with the Corporate Governance Code asstipulated under the LODR Regulations. The Report on Corporate Governance in accordancewith Rules 34(3) read with Para C of Schedule V of SEBI (LODR) Regulations 2015 formspart of this Report. The Auditors' certificate certifying compliance with the conditionsof Corporate Governance under Regulation 34(3) read with Schedule V of the SEBI (LODR)Regulations 2015 is annexed as "Annexure I" to the Corporate Governance Report.

HUMAN RESOURCE

Your Company is of the firm opinion that efficiency of its employeesplays a key role in achieving set goals and building a competitive work environment.

The Company is committed to provide a protective environment atworkplace for all its women employees. To ensure that every woman employee is treated withdignity and respect and as mandated under "The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013" the Company hasconstituted "Internal Complaints Committee" for prevention of sexual harassmentof its women employees. During the year the Committee has not received any complaintrelated to Sexual harassment.

PARTICULARS OF EMPLOYEES

The Company takes pride in the commitment competence and dedication ofits employees in all areas of the business. The relation between the management andemployees are healthy and cordial. There is a transparency in the dealings and on mattersrelating to the activities of the Company and its employees.

Particulars of remuneration of employees required to be furnishedpursuant to the provisions of Section 197 (12) of the Companies Act 2013 (Act) read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given as "Annexure 4" to this Report. Particulars of remuneration ofemployees required to be furnished in terms of Rules 5(2) and 5(3) of the said Rulesforms part of this Report which shall be provided to Members upon written requestpursuant to the second proviso of Rule 5. Particulars of remuneration of employees areavailable for inspection by Members at the registered office of the Company duringbusiness hours on all working days up to the date of the forthcoming AGM.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

VAT Matter

As briefed in the previous year's Board Report also in the year2018-19 the sales tax deptt. Chandigarh had completed the sales tax assessment of theCompany for the year 201112 and had raised a demand of Rs. 66.34 crore on account of VATand CST (VAT Rs. 14.33 cr CST Rs. 0.17 cr penalty Rs. 31.61 cr and interest Rs. 20.23cr). The Company had filed appeal against said order with DETC (Appeals) as per Punjab VATACT and had deposited a sum of Rs 16.65 cr being 25.10% of the above said demand to thesales tax deptt on 08.05.2019. In respect of the same dispute but on different lawpoints the matter was also pending before the Hon'ble Supreme Court and Hon'ble HighCourt of Punjab & Haryana at Chandigarh.

Presently in the above matter the enquiry of Department is still onand Company is fully co-operating with the Department by providing all the relevantrecords/ documents.

Central Bank of India Matter

During the previous year the Central bank of India (Lender Bank) haddeclared the Company and its Directors naming Sh. S R Mehta Dr. Gopal Munjal Dr. V RMehta Sh. Navrattan Munjal Sh. S P Sharma Dr. V K Arora Sh. S C Galhotra Mr. R S Bedias willful defaulters.

However on 03.03.2020 the Central Bank of India had assigned its' debtto M/s Edelweiss Assets Reconstruction Company (India) Limited and after that the same wasfully paid by the Company. The Company has also satisfied the ROC Charge in respect ofthis loan after getting NOC from Edelweiss on 10th July 2020. However the willfuldefaulter notice has not been withdrawn by the Central Bank of India till date. TheCompany has also filed the legal suits against the Bank for setting aside the orderswhereby the Directors have been declared as willful defaulters.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFTER CLOSURE OF FINANCIAL YEAR

SALE OF MANUFACTURING UNIT NO. III & IV OF THE COMPANY

With the intent to reduce the Company debts and to deleverage itsBalance Sheet and further to maximize overall stakeholder value the Company was exploringthe options to sell or lease Company assets from a long time. The Company also tookshareholders approval at its Extra-Ordinary General Meeting held on 30th March 2020 undersection 180(1)(a) of the Companies Act 2013 to sell/lease the Unit No. III & IV ofthe Company both located at Village Malku Majra Tehsil Nalagarh Baddi Himachal Pradeshat a price of not less than Rs. 58 Crores being the total book value of both the units.

In the same process the Board of Directors of the Company haveapproved to sell Unit No. III & IV of the Company to M/s ANG Lifesciences (India)Limited at an agreed price of Rs. 60 crores. The said transaction is expected to becompleted by 30th June 2024.

The proceeds from the sale will be utilized to make the Company debtfree.

BANK OF INDIA LOAN ASSIGNMENT

The Bank of India has assigned its loan to M/s Edelweiss AssetsReconstruction Company (India) Limited through an assignment agreement dated 29th June2021. Consequent to such assignment the total debt of the Company stands restructured.

Apart from this no material changes and commitments have occurredbetween the end of the financial year and the date of the Report which has effect on theFinancial Statements.

REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Ltd. Alankit Heights 2E/121 JhandewalanExtension New Delhi are the Registrar and Share Transfer Agent of the Company for thePhysical as well as Demat shares. The members are requested to contact the Registrardirectly for any of their requirements.

CEO/CFO CERTIFICATION

In terms of the Listing Regulations the Certificate duly signed by Dr.Gopal Munjal Managing Director & CEO and Sh. Arun Seth Chief Financial Officer (CFO)of the Company was placed before the Board of Directors along with the annual financialstatements for the year ended on March 31 2021 at its meeting held on 28th June 2021.

SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standardsissued by the Institute of Company Secretaries of India.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation forthe assistance and co-operation received from the Bankers and Government Authorities andalso thanks the Shareholders for the confidence reposed by them in the Company and Lookforward to their valuable support for the future plans of the Company. Directors alsothank its Distributors agents stockiest retail traders medical professionalsemployees and customers for their continued patronage of the company products.

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