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Jenburkt Pharmaceuticals Ltd.

BSE: 524731 Sector: Health care
NSE: N.A. ISIN Code: INE354A01013
BSE 00:00 | 16 Aug 557.05 4.25






NSE 05:30 | 01 Jan Jenburkt Pharmaceuticals Ltd
OPEN 551.00
52-Week high 699.70
52-Week low 452.00
P/E 10.83
Mkt Cap.(Rs cr) 256
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OPEN 551.00
CLOSE 552.80
52-Week high 699.70
52-Week low 452.00
P/E 10.83
Mkt Cap.(Rs cr) 256
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jenburkt Pharmaceuticals Ltd. (JENBURKTPHARMA) - Director Report

Company director report

Your Directors with pleasure present their report on the business and operations ofyour Company ("the Company" or "Jenburkt") along with the auditedfinancial statements of the Company and auditors' report thereon for the financial yearended on 31st March 2022.

1. Summary of Financial Performance:

Particulars Year ended 31st March 2022 Year ended 31st March 2021
Revenue from operations 12398.04 10929.42
Other income 494.87 430.85
Total expenditure 9905.82 9196.10
Profit before tax 2987.09 2164.17
Tax expenses 757.37 513.93
Profit after tax 2229.72 1650.24
Other comprehensive income 130.02 195.96
Total other comprehensive income net of tax 2359.74 1846.20
Earnings per share (EPS)
(Basic & Diluted in Rs.) 48.58 35.96
Reserves and Surplus 11279.31 9387.69

The above financial figures for the financial year ended 31st March 2021and 2022 are in accordance to Indian Accounting Standards (IND-AS).

The total revenue from the operations of the Company recorded at ' 12398.04 Lacs forthe financial year 2021-22 as against ' 10929.42 Lacs recorded for the financial year2020- 21 a rise of 13.44% year on year.

The profit before tax recorded a rise of 38.02% year on year which stood at ' 2987.09Lacs for the financial year 202122 as against ' 2164.17 Lacs recorded for the previousfinancial year 2020-21. The profit after tax stood at ' 2229.72 Lacs for the financialyear 2021-22 as against ' 1650.24 Lacs recorded for the financial year 2020-21 whichalso rose by 35.12% year on year. The EPS of the Company for the financial year 2021-22increased to ' 48.58 from ' 35.96 recorded for the financial year 2020-21.

2. Dividend and Reserves:

The Board of Directors of the Company is pleased to recommend a dividend of ' 12.00(120%) on ' 10/- paid-up 4589378 equity shares of the Company for the financial year2021-22 subject to applicable tax deducted at source (TDS). ' 550.72 lac (before TDS)will be absorbed by this dividend out of surplus profit of 2021- 22.

Kindly refer to a note on TDS on dividend appearing in the Notice convening the 37thAGM. With effect from financial year 2020-21 the dividend declared by the Company issubject to the TDS.

The reserves and surplus amount stood at ' 11279.31 Lacs as at 31st March2022 as compared to ' 9387.69 Lacs as on 31st March 2021 an increase by20.15% year on year. No amount is proposed by the Board to be transferred to generalreserve for the year under review.

The 37th AGM is scheduled on Friday 29th July 2022. Theregister of members and share transfer books will remain closed from Saturday 23rdJuly 2022 to Friday 29th July 2022 (both days inclusive) for the purpose ofpayment of dividend and 37th AGM. The cut-off date for recognition of memberseligible for e-voting is 22nd July 2022.

3. Management Discussion & Analysis Report:

A. Overview of Indian pharmaceutical industry structure development and importantchanges:

Industry experts believe that India's pharmaceutical sector has gained renewed globalattention due to the crisis brought about by COVID-19 with the FDI inflows firmlyestablishing India's credentials as a safe and key investment destination in the world.

Indian pharmaceutical industry ranks third in the world in production by volume. During2020-21 total pharma export stood at $24.4 billion while pharma imports were at $7.0billion thereby generating trade surplus of $17.5 billion.

Indian pharmaceutical sector witnessed a 200 per cent increase in foreign directinvestment (FDI) in 2020-21. In 2021-22 (April-September) the FDI inflows continued to bebuoyant at f 4413 crore growing at the rate of 53 per cent over the same period in2020-21.

The extraordinary growth of foreign investments in pharma sector was mainly on accountof investments to meet COVID-19 related demands for therapeutics and vaccines.

Anti-China sentiment has also provided a bigger opportunity to attract foreigninvestment. With many global players deciding to move operations out of China and Indiaemerging a strong alternative contender investment in the pharma sector will gain furthermomentum.

India is the largest supplier of generic medicines with a 20 per cent share in theglobal supply. Price competitiveness and good quality have enabled Indian medicinesproducers to be dominant players in the international market thereby making the countrythe "Pharmacy of the world".

Although a prominent player in formulations the country is significantly dependent onthe import of bulk drugs that are used in the formulation of medicine. In certain casesimport dependence varies between 80-100 per cent.

The Indian government has taken several initiatives to address the requirements of thepharmaceutical and medical devices industry. Various initiatives such as 'Scheme forPromotion of Bulk Drug Parks' that envisages creation of world class infrastructurefacilities in order to make Indian bulk drug industry a global leader was approved on 20thMarch 2020. Besides production linked incentive (PLI) scheme for bulk drugs has alsobeen approved for promotion of domestic manufacturing of 53 critical APIs in the countrywith a budget of f 6940 crore for the next eight years.

In addition PLI scheme for pharmaceuticals was approved by the government on 24thMarch 2021 with a total financial outlay of f 15000 crore. Pharmaceutical goods will beincentivised under the scheme based on their incremental sales for 6 years. Similarly PLIscheme for promoting domestic manufacturing of medical devices was also approved on 20thMarch 2020.

The Indian pharmaceutical industry is of strategic importance for the country providingaccess to affordable quality medicines across the world. The pharmaceutical industry isscience-based and knowledge-driven with scientific developments evolving at a rapid pace.

The primary thrust for the Indian pharmaceutical industry going forward should be tomove up the value chain by scaling up R&D and innovation to meet the unmet needs ofpatients across the world.

Source: Business today - 31st January 2022.

B. Business performance opportunities and outlook:

The Indian pharma industry is estimated to grow at 9-11 per cent and in the next fewquarters it will be driven by domestic and emerging markets according to ratings agencyICRA. In a sample of 21 Indian pharmaceutical companies ICRA said revenue growth wasmoderate at 6.4 per cent in the second quarter of FY22 down from 16 per cent in the firstquarter of 2021-22.

In the domestic market ICRA said a combination of steady normalisation in hospitalfootfalls and field force operations given the relatively lower restrictions on accountof COVID-19 continued traction in acute therapies and better pricing supported healthyrevenue growth across companies.

Source: Economic Times: 4th January 2022.

However during the year as a result of the second wave the functioning of theorganization was greatly affected in various parts of the countries. Travel of our medicalrepresentatives and managers was restricted as a result the routine working was adverselyaffected. Private practitioners and hospitals stopped allowing company representatives toenter their premises affecting the product promotion. As the country was battling thesecond wave of Covid-19 many employees and their family members were affected too invarious parts of the country.

Many employees at our manufacturing facility and the head office were affected byCovid-19. However the plant supply chain logistics team with complete support from HRfinance and IT ensured continuity of supplies of our products to our patients. Ourinvestment in technology to facilitate remote functioning and processes set up prior tothe beginning of the pandemic paid true dividends during these uncertain times. Despiteabove adversities the Company's top and bottom line improved during the financial year2021-22.

Similar challenges were faced during the third wave however it was for a shorterduration with much lesser impact on health of the employees.

However during this challenging period your Company prepared for the launch of its newOTC division named as Jenburkt Wellness. With our strong pharmaceutical background withstrength in product development ensuring high quality products we aim to conceptualizeformulate manufacture and vet the highest quality portfolio of consumer wellness brands.We wish to blend the best of science and nature. The idea was to launch a few products ona pilot scale initially by promoting them digitally and making them available online. Thisis a complete shift from the current pattern of sale and distribution of productsconducted so far. A cross functional team has been trained and assigned the task ofmanaging the Wellness business. The thought process and needs for such product promotionneeds a complete shift in terms of marketing supply chain inventory managementlogistics and finance. These are completely different and a great amount of learning hastaken place in the origination to operate this form of a business. Your Company hasstarted taking baby steps in this new area with existing team who helped in opening upnew opportunities of OTC and online business both in one go. Most initial products for theWellness division were developed at our Sihor R&D facility. We are hopeful that in thetime to come this division will be a good contributor to the origination. However in thissegment it takes time to build brands and need to be consistent persistent and patientfor results.

C. Risks concerns and threats

Pharmaceutical industry have witnessed disruption due to prevailing beaten-upconditions in different countries caused by Covid-19 including China on whom the industrydepends for its raw materials. Your Company has constantly strive to cop-up with thesesituations. Going forward any such pandemic situations (like Covid-19) or scarcity of rawmaterials or the war situations or any such unforeseen circumstances may hamper Company'sproductivity and/or profitability.

NPPA had served a show cause notice to your Company in 2013 alleging that a Company'sproduct was violating a NPPA's standing order. However after a personal hearing anddetailed submission NPPA passed a written order stating that your Company's product didnot violate the standing order. Subsequently NPPA reviewed its own order without havingany power to review and issued show cause notices and demand notice to your Company. YourCompany subsequently filed a writ petition against the demand of NPPA at the Hon'ble HighCourt of Bombay. The matter was settled in favour of your Company in 2013. DPCO 1995explicitly debars NPPA to review its own order the very reason cited by Hon'ble HighCourt of Bombay while quashing the show cause notices and demand notice in their judgmentdated 08th August 2013 and 26th September 2013. Later NPPA afterover a year filed a Special Leave Petition (SLP) (demanding f 16.45 crore) at the Hon'bleSupreme Court. Your Company has been legally advised that based on the facts and meritsof the case the demand raised by NPPA is not likely to crystallize. The matter is pendingat Supreme Court after being admitted for further hearing.

Due to a surge in fuel prices predominantly because of the Russia ~ Ukraine war andstrengthening of US dollor there is a constant increase in prices of key start materialraw and packing material. The transportation cost also have increased as a result. Theoverall impact has also resulted an increase in labour cost expenses incurred by ourfield staff for travel. These factors have restricted the margins of the company and maycontinue to do so till the prices and cost reduced down to reach around their pre-warlevel.

4. Zixa Strong - New product launched through Digital Marketing:

Your Company on the auspicious day of "Gudi Padwa" on 2nd April2022 launched the first on-line product Zixa Strong a high-performing pain-reliefproduct that delivers fast-acting and long-lasting relief from muscle and joint pains.Zixa Strong has been developed at Jenburkt's R & D Centre. It is targeted at therapidly growing health and fitness conscious population of India. Zixa Strong is our veryfirst digital and very first over-the-counter (OTC) brand and we are greatly delighted tohave created a highly-effective product in three formats namely Roll-On Spray and Gel~the first company to do for a single formulation. We plan to add multiple products to theZixa range over the course of time. Zixa Strong is recommended for fast-acting long-lasting relief from back pain rheumatic pain muscular aches pains and swellings such asstrains sprains and sports injuries. It is also suitable for the relief from painassociated with non-serious arthritic conditions. It harnesses innovative Oil in WaterFlashMicelle? Technology with a powerful dual-action composition for fast relief fromintense pain- A uniquely powerful approach to modify the structure of oil-basedformulations to improve their therapeutic efficacy substantially.

Another feature of Zixa Strong is that traditionally there are two completelydifferent routes to treat pain. Apply something hot or apply something cold. Zixa Strongis a dualaction analgesic that provides both hot and cold therapy to the affected areas atthe same instant! Additionally Zixa Strong is composed of natural (plant-based)ingredients without the addition of any artificial preservative additive coloursilicones parabens or synthetic fragrances. The formulation is designed to provide skinsafety - without any risk of skin irritation. The safety of this natural product allowsfrequent & prolonged use making it a uniquely high- performing analgesic.

According to a study by the World Health Organization's Global Burden of Disease everyfifth person in the world is likely to be suffering from some kind of pain. With a longexperience and expertise in pain management at Jenburkt Wellness we were inspired topioneer a scientifically advanced natural and skin-friendly pain relief range.

Zixa Strong is currently available on Amazon and the product website:"". Your company has created a brand store on Amazon and has beenreceiving very encouraging reviews from consumers as a very effective product.

For the launch the company created a very high impact advertisement film involvingsenior professional in their respective fields. The film won great accolades forcreativity and also attained the 1st position in India as most trending for a period atthe time of launch.

5. Internal control system and their adequacy :

Your Company's policies guidelines and procedures endeavours to provide for adequatechecks and balances and are meant to ensure that all transactions are authorized recordedand reported correctly.

Appropriate systems of internal control including monitoring procedures are maintainedat the Company. This ensure that all assets are safeguarded against loss from unauthorizeduse or disposition.

The Company keeps investing in automation and latest technology to improve efficiencyin business operations. SAP based ERP system is in place in the Company. This ERP systemintegrate the Company's manufacturing and supply chain and key supporting functions likefinance and accounts marketing sales HR etc. The system has also been installed withyour Company's Super Stockists to get data of their sales stock collectionbreakage/expiry etc. The Company's investment in such technology ensured that your Companycould work remotely almost instantaneously during pandemic.

The audit committee of the Company carries out inter-alia the functions specifiedunder the Act and SEBI-LODR. The Company has a well-defined whistle blower policy underits vigil mechanism.

Based on internal financial control policy frame work established and followed by theCompany the audit work performed by the Company's internal auditors statutory auditorscost auditors and secretarial auditors and based on reviews of the management and theaudit Committee the board is of the opinion that the Company's internal financialcontrols are adequate and effective.

6 Research and Development (R&D)

To achieve its growth potential Jenburkt is committed to make a substantial effort instrengthening its Research and Development capabilities. This area remains a core pillarin Jenburkt's future business plans which will be built in a phased manner.

Equipped with a state of the art set up at its R&D centre at Sihor which hasrecently been renovated and upgraded in 2021 a new laboratory for Analytical Developmenthas also been setup with highly qualified and experienced Scientists. This centre enjoysAccreditation from Ministry of Science and Technology Government of India.

Following new products have been developed for Jenburkt Wellness division and some ofthese have already been introduced in the market:

(1) Zixa Strong Gel (2) Zixa Strong Roll-on (3) Zixa Strong Spray (4) Zixa MPR Gel(5) Zixa Feminine Cream and Roll-on (6) Zixa Ultra Strong Gel and Roll on (7) ZixaMuscle Recovery Gel.

Some products were also developed for the pharmaceutical division too.

7 Material development in human resources

Jenburkt has drawn strength from its greatest asset i.e. its own people -"Jenburktians" - whose core competence over the decades has helped us to sustainour growth. Due to Covid-19 your company faced challenges in imparting training toemployees and hence was unable to carry the programmes as usual.

The Company has unwaveringly continued to make significant improvement in HumanRelations practices across the organization. High standard of safety parameters aremaintained. Periodical assessment of POSH (Prevention of Sexual Harassment) situationunder the chairperson of POSH Committee is being carried out. No case has been reportedunder POSH.

During the Covid period online and off-line awareness programs on anti-covid measuresand moral boosting exercises were conducted among the workforce.

Industrial harmony was maintained throughout.

8 International Business:

During financial year 2021-22 the international supply chain operations remained badlyaffected. Since inception of Covid-19 pandemic there has been tremendous shortage ofcontainers for ocean shipments and scarcity of booking space for air cargo as well.Freight rates had been sky rocketed due to non-availability of containers and space in aircrafts. Transit time between Indian ports to destination ports has been increasedhampering the supply chain network.

Due to the pandemic there has been tremendous impact on economies of countries wherewe are operating making it costlier for the importers to import our products. Moreoverrising costs of ingredients is a major worrying factor with regards to the cost of inputs.

Despite these adversities your company has registered growth in business as comparedto the previous financial year.

Your company has obtained fresh registrations for three (3) Products in Congo-Brazzaviz. Ornel Tablet Ornel Suspension and Powergesic Plus Gel. Further renewals andretention of existing products are done in existing countries.

9 Segment wise performance

Your Company operates exclusively in one segment i.e. pharmaceutical formulations.

10. Details of significant changes in key financial ratios

a. Inventory Turnover ratio increased from 3.26 times (202021) to 3.60 times (2021-22).

b. Interest coverage ratio improved from 46.96 times (2020-21) to 60.76 times(2021-22): Due to marginal reduction in finance cost coupled with higher net profit.

c. Change in Return on Net worth: f 9846.63 Lacs in 202021 as compared to f 11738.25Lacs recorded in 202122 a rise by 13.36%.

d. Total Debt Equity Ratio improved from 0.23 times (202021) to 0.22 times (2021-22).

e. Debtors' turnover ratio increased form 6.84 times (202021) to 8.47 times (2021-22).

f. Current Ratio decreased from 4.45 times (2020-21) to 3.57 times (2021-22).

g. Operating profit margin increased form 19.47% (202021) to 23.50% (2021-22).

Figures of the previous year are re-arranged whereever required due to re-grouping orre-arranging of figures for the financial year 2020-21.

11. Management:

A. Appointment of Director(s):

Shri Dilip H. Bhuta (DIN: 03157252) Director of the Company is liable to retire onrotation basis at the ensuing AGM of the Company. Being eligible for re-appointment he hadoffered himself to be re-appointed. He was appointed as the Whole Time Director designatedas the Whole Time Director and CFO of the Company for a period of five years from 1stApril 2022 to 31st March 2027 by a special resolution at the 36"’AGM of the Company held on 07"’ September 2021. This appointment was subject toretirement by rotation.

Brief profile of Shri Dilip H. Bhuta being re-appointed as the Director is appearingin the Report on Corporate Governance in this Annual Report.

Shri Ashish U. Bhuta (DIN 00226479) Director of the Company was appointed as theManaging Director and Chairman of the Company at the 35"’ AGM of the Companyheld on 1st September 2020 for a period of five years from 1st April2021 to 31st March 2026. This reappointment was subject to retirement byrotation.

B. Independent Directors:

Out of total six Directors on the Board the Company has four independent Directorsviz. Shri Bharat V. Bhate (DIN: 00112361) Shri Rameshchandra J. Vora (DIN: 00112446)Shri Arun R. Raskapurwala (DIN: 00143983) and Mrs. Hina Ravindra Mehta (DIN: 08719453).

These four independent Directors on the Board of the Company have confirmed compliancewith the Code for independent Directors prescribed in Schedule IV to the Act and the codeof business conduct of the Company for the financial year2021-22.

The Board have received necessary individual declaration confirming their independencefrom the management of the

Company and that there has been no circumstances affecting their status as anIndependent Director of the Company. There is no conflict of interest of the IndependentDirectors with the Company.

The composition of the Board of Directors is in accordance and in compliance with theprovisions of SEBI-LODR.

The Company has insured all the Directors on the Board and senior officers of theCompany under Directors and officers (D&O) insurance policy.

For further details with regard to independent Directors of the Company kindly referto report on Corporate Governance in this Annual Report.

C. Details of the Meetings of Board of Directors:

The Board of Directors of the Company met four times during the year under review on02nd June 12"1 August 26th October 2021 and11"1 February 2022.

For further details about Board its composition and meetings kindly refer to reporton Corporate Governance in this annual report.

D. Composition and details of meeting of the Committees of the Board:

There has been no changes in the composition of any of the Committees of the Board ofthe Company during the financial year. Details of the meetings of each of the Committeesis as under:

a. Audit Committee: This Committee met four times during the year under review on 02ndJune 12th August 26th October 2021 and 11th February2022.

b. Stakeholders Relationship Committee: This Committee met four times during the yearunder review on 02nd June 12th August 26th October2021 and 11th February 2022.

c. Corporate Social Responsibility Committee: This Committee met four times during theyear under review on 02nd June 12th August 26thOctober 2021 and 11th February 2022.

d. Nomination and Remuneration Committee: This Committee met four times during the yearunder review on 02nd June 12th August 26th October2021 and 11th February 2022.

For further details about above Committees and its meetings kindly refer to report onCorporate Governance in this annual report.

All the recommendations forwarded by the above Committees to the Board vide theirmeetings are always considered by the Board to arrive at appropriate decisions. None ofsuch recommendations were rejected during the year under review by the Board i.e. all therecommendations of all the Committees have been accepted by the Board for itsconsideration.

E. Annual performances evaluation procedure:

Annual evaluations/reviews of performances of the Board its Committees and individualDirectors were carried out at the meetings of Board and Committees based on set criteriafor evaluations/reviews pursuant to the applicable provisions of Section 134(3)(p) readwith rule 8(4) of Companies (Accounts) Rules 2014 section 178(2) Schedule IV and otherapplicable provisions of the Act and regulations 17(10) and 25(4) and other applicableregulation(s) of SEBI-LODR. Criteria such as qualifications knowledge attendance at themeetings participation in long-term strategic planning leadership qualitiesresponsibility shouldered inter-personal relationship and analytical decision making andother abilities were taken in to consideration in evaluating the performance ofindividual Directors. In accordance to the required procedures the Board carried outperformance evaluation of independent Director without the participation of the Directorbeing evaluated. The evaluation by the Board was carried out after seeking inputs fromall Directors at the Board and Committee meetings including observance of governancequality of deliberation and effectiveness of the procedures adopted by the Board. Theperformances of the Committees were evaluated by the Board by seeking feedback/inputs onset criteria from the members of the respective Committees. Evaluation of the Chairpersonwas also carried out by the Directors. All the Directors were satisfied with theevaluation process.

The independent Directors at their separate meeting inter alia also assessed thequality quantity and timeliness of flow of information between the management of theCompany and the Board of Directors necessary for the Board of Directors to effectivelyand reasonably perform their duties.

F. Salient features of Company's policies on Directors' appointment and remuneration:

a. For selection of Directors and determining Directors' independence:

The Company's policy viz. "Selection of Directors Senior Managerial Personnel anddetermining Directors' independence" contain the guiding principles for theNomination and Remuneration Committee for identifying Directors and Senior ManagerialPersons. They broadly provides guidance towards appointee's qualification experienceetc. as required and also determine their independence of the management of the Company.

For the appointment of a Director on the Board of the Company the Nomination andRemuneration Committee

take in to account criteria such as education professional background knowledgeexperience understanding about Company's business and industry in general personal andprofessional ethics integrity values and willingness to shoulder his/her dutiesattendance at the Board and Committee meetings perform his/her role with responsibilityanalytical decision making ability interpersonal relationship qualities and participationin long-term strategic planning. Adherence to the company's policies and codes provisionof all acts rules and regulations as applicable are also considered to be selected asthe Director on the Board of the Company. In case of independent Directors his/herindependence of the management of the Company no conflict of interest in any transactionentered in to or to be entered in to by the Company with any person(s) firms Companiesbody corporates whether directly or indirectly are interalia taken into account.

This policy has been hosted on the website of the Company viz.

b. For remuneration of Directors key managerial personnel and other employees:

The Company has in place a policy viz. "Remuneration of Directors Key ManagerialPersonnel and other Employees" with the help of which the Nomination andRemuneration Committee recommend to the Board about the remuneration of all the Directorskey managerial personnel and senior employees of the Company including the sitting fees ofthe independent Directors. The remuneration packages are designed in such a manner thatthey are not only competitive but also are attractive enough to retain the talent in theCompany. For employees of the Company this package basically include the salaryperquisites allowances bonus and other benefits etc. as applicable. Your company hasalso insured all its Directors and senior officers under D&O liability insurance forindemnifying them from any liability that may occur while performing their role dutiesresponsibilities etc. The premium towards the said policy is borne by the Company.

This policy has been hosted on the website of the Company viz.

G. Directors Responsibility Statement:

Pursuant to Section 134 (5) of the Act in relation to the financial statements for thefinancial year 2021-22 your Board of Directors state that:

a. in the preparation of the annual accounts the Company has adopted and followed theIndian Accounting Standards (IND-AS) as applicable;

b. the estimates and judgments relating to financial statements have been made basedon application of sound and consistent accounting policies on a prudent and reasonablebasis in order to ensure that financial statements reflect in a true and fair manner theform and substance of the transactions and reasonably present the Company's state ofaffairs and profit for the year;

c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls which are adequate and operatingeffectively. The internal auditors have conducted periodic audits of the Company'sfinancials and

f. the systems are in place to ensure compliance with the provisions of all applicablelaws and such systems were adequate and operating effectively.

H. Key Managerial Personnel

In accordance to the provisions of the Section 203(1) of the Act Shri Ashish U. Bhuta(Chairman and Managing Director Shri Dilip H. Bhuta Whole Time Director and CFO and ShriAshish R. Shah Company Secretary and Compliance Officer are the Key Managerial Personnelof the Company as on 31st March 2022.

12. Statutory Auditors and Report:

M/s. D. R. Mehta & Associates (Reg. No.:106207W) chartered accountants wereappointed as the statutory auditors of the Company for a consecutive period of fiveyears from the conclusion of the 32nd AGM held on 31st July 2017to the conclusion of the 37th AGM to be held in the year 2022.

Pursuant to Section 139(2) of the Companies Act 2013 (the Act) the Company canappoint an audit firm for a second term of five consecutive years. Accordingly M/s. D. R.Mehta & Associates Chartered Accountants are proposed to be reappointed as theStatutory Auditors of the Company for a second term of five consecutive years commencingfrom the conclusion of this 37th AGM till the conclusion of 42ndAGM. Their re-appointment is proposed vide a resolution in the notice convening the 37thAGM.

The auditors have consented and confirmed their eligibility to act as the auditors ofthe Company for the period from conclusion of the ensuing 37th AGM tillconclusion of 42nd AGM of the Company.

The auditors' report for the financial year 2021-22 as submitted by them is withunmodified opinion.

Pursuant to Section 143 (12) of the Act the auditors of the Company in the course oftheir duties had no reason to believe that any of the officer or employee of the Companyhad or has committed any offence or fraud.

13. Secretarial Auditors and Report:

The Secretarial Auditors viz. M/s. Nilesh Shah & Associates (C.P. No.: 2631)practicing Company Secretaries' existing appointment to carry out the secretarial audit ofthe Company is for seven consecutive financial years from 201819 till 2025-26. They haveconfirmed that they are eligible to act as the secretarial auditors of the Company for thefinancial year 2022-23.

The secretarial audit report for the financial year 2021-22 presented by M/s. NileshShah & Associates is attached as "Annexure-"A" and "A-1" tothis report which is in prescribed format i.e. Form MR-3. Their annual secretarialcompliance report under regulation 24A of SEBI-LODR pertaining to FY

2021- 22 was also received by the Company and submitted to the stock exchange asrequired.

14. Cost Auditors:

Pursuant to section 148(1) of the Act Companies (Cost Record and Audit) AmendmentRules 2014 as amended and the order of the Central Government your Company is preparingand maintaining cost records as required. The same are periodically audited by apracticing Cost Accountants viz. M/s. Jagdish R. Bhavsar (membership No.: 8000).

M/s. Jagdish R. Bhavsar is a proprietary firm of Cost Accountants Mumbai and holds avalid certificate of practice. They are appointed as the cost auditors by the Board ofDirectors of the Company on the recommendation of the Audit Committee for auditing thecost records of the Company for the financial year 2022-23. Mr. Bhavsar the proprietorhave confirmed by submitting necessary letter that he is free from disqualification andeligible for appointment as the Cost Auditor for the financial year 2022

23. He has also confirmed that he is independent of the management of the Company andthat no order or proceedings were pending against him relating to professional misconductat the Institute of Cost Accountant of India or any competent authority/court.

Pursuant to section 148(6) of the Act read with rules thereunder the Company's costaudit report for the FY 2020-21 under Form No.: CRA-4 was submitted to the CentralGovernment during the year.

Their remuneration for the financial year 2021-22 was paid in pursuance of the members'resolution passed at 36th AGM held on 7th September 2021. Theirremuneration for the FY 2022- 23 as fixed by the Board of Directors of the Company is tobe ratified by the members at the ensuing 37th AGM of the Company. An ordinaryresolution has been proposed in the notice convening the ensuing 37th AGM ofthe Company.

15. Annual Return:

In compliance with section 92(3) and 134(3)(a) of the Act Company's annual return inthe prescribed form no. MGT-7 containing particulars as they stood on the close of thefinancial year 2020-21 as duly submitted to the Ministry of Corporate Affairs is placedon the website of the Company viz. For the web link of the same kindlyrefer to report on Corporate Governance in this Annual Report.

16. Particulars of loans guarantees or investments made by the Company:

Pursuant to Section 186 of the Act during the financial year 2021-22 no loan orguarantee was given to any person or body corporate directly or indirectly by the Company.The investments in securities made by the Company are within the limits set under theapplicable provisions of the Act.

17. Particulars of related party transactions:

A. In terms of Section 188 of the Act and rules made thereunder no materiallysignificant related party transaction was made by the Company during the financial year2021-22 with its promoters Directors KMPs or other designated persons which may have apotential conflict with the interest of the Company at large. None of the Directors haveany material pecuniary relationships or transactions vis-a-vis the Company.

The policy on "Materiality of related party transactions and dealing with relatedparty transactions" of the Company is available on the Company's website For the web link of the same kindly refer details provided in thereport on Corporate Governance in this Annual Report.

Two Contract in the form of Leave and License agreements which are "notmaterial" were entered into at arm's length and in ordinary course of business of theCompany with effect from 01st April 2019 with M/s. Bhuta Holdings PrivateLtd. the Promoter of the Company (a related party holding shares of the Company inexcess of 10%). These agreements are for the usage of seven premises by the Company forits business office/place belonging to a promoter on leave and license basis and are forfive years each i.e. having validity up to 31st March 2024. Pursuant tosection 188 (1) of the Act these transactions have been disclosed voluntarily andpresented in the prescribed form No. AOC-2 by the Company and annexed to this report as"Annexure-B".

In terms of the recently amended Regulation 23 of SEBI- LODR related party transactionwhich are "Material" in nature as defined therein are required to be authorisedby the members through resolution. As stated above the Company has no"Material" related party transactions.

Apart from receiving their respective remuneration and dividend on their shareholdingsnone of the Directors on the Board has any pecuniary transaction with the Company orinterse which has potential conflict of interest with the Company.

Weblink of the policy of the Company in this regard is provided in the report onCorporate Governance of the Company in this Annual Report.

B. Disclosure in terms of Regulation 34(3) read with sub clause (1) of clause A(Related Party Disclosure) of Schedule V of SEBI -LODR:

-According to the requirements of IND-AS the transactions with the related parties aredisclosed in the financial statements in the annual report and they are not in conflictwith the interest of the Company at large.

Disclosure in terms of Regulation 34(3) read with sub clause (2) of clause A (RelatedParty Disclosure) of Schedule V of SEBI-LODR:

-This requirement is not applicable to the Company as it doesn't have any Holding orSubsidiary Company.

Disclosure in terms of Regulation 34(3) read with sub clause (2A) of clause A (RelatedParty Disclosure) of Schedule V of SEBI-LODR:

-Kindly refer to "Annexure-B" annexed to this report.

18. Corporate Social Responsibility (CSR):

In compliance with the provisions of Section 135 and Schedule VII of the Act CSRactivities are being carried out by the Company directly on the basis of recommendationby the CSR Committee and on approval of the Board in accordance to requirements laidunder the Companies (Corporate Social Responsibility Policy) Rules 2014 as amended. Abrief note on CSR activities of the Company CSR expenditures made during the year underreview and other required details are set out in a report on CSR and annexed to thisreport as "Annexure-C" in prescribed format. The CSR policy of the Company isavailable on the website of the Company viz.

19. Investors' Education and Protection Fund (IEPF):

In pursuance to section 124 and 125 of the Act read with the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 asamended from time to time your Company had taken appropriate steps towards creatingunpaid dividend account uploading status of unpaid dividends with required details on thewebsites of IEPF and the Company. Further steps were taken for intimating thoseshareholders who had not encashed their dividend for the period of past seven consecutiveyears by way of writing individual letters and publishing newspaper notices regardingtheir unclaimed dividend and corresponding shares that were liable to be transferred toIEPF account. Thereafter as required under the said Act and Rules the unclaimed dividendamount lying in the Company's unclaimed dividend bank account pertaining to financial year2013-14 were transferred to IEPF authority during the financial year 2021-22 along withthe corresponding equity shares.

The shareholder are hereby informed that the dividend amount and equity sharestransferred to IEPF can be claimed back by the shareholders from the IEPF authority byfollowing procedure mentioned in the above said rules of IEPF. The Company Secretary isthe nodal officer of the Company. The shareholders are requested to claim their dividendfrom the Company if not encashed yet for the period from financial year 2014-15 onwardsto avoid hardship of claiming later from IEPF along with corresponding shares if any.

The shareholders are advised to take note that the details of the shareholders whosedividend and shares are transferred to IEPF are available on the website of the Companyviz. Further transfer of unclaimed dividend amount pertaining tofinancial year 2014-15 will take effect during financial year 2022-23. For the totalamount lying in dividend account for last seven years details are available at

20. Secretarial Standards:

Your Company has during the financial year 2021-22 complied with the applicableprovisions of the secretarial standard-1 on the meetings of Board of Director and itsCommittees and the secretarial standard-2 on general meetings as formulated and issued bythe Institute of Company Secretaries of India (ICSI).

Majority of the provisions of the secretarial standard-3 on dividend and secretarialstandard-4 on Board's report as formulated by ICSI and which are recommendatory innature were voluntarily complied with by the Company.

21. Report on Corporate Governance:

Pursuant to the relevant provisions of the Act and SEBI- LODR a detailed report on theCorporate Governance of the Company and the auditor's certificate regarding Company'scompliances with Corporate Governance norms are attached to this Annual Report. As acontinued commitment your Directors re-affirm adherence to the highest standard ofCorporate Governance.

22. Vigil Mechanism:

Over the years through its strong vigil mechanism your Company is known for carryingon business with integrity and values. It has a policy of zero tolerance towards unethicalconduct or behavior within.

In pursuance of Section 177(9) of the Act and rules made thereunder and Regulation22(1) of SEBI-LODR a vigil mechanism of the Company has been established by forming awhistle blower policy of the Company inter alia providing adequate safeguard against anyvictimization of any employee and / or Director of the Company. This is to enable them todisclose or report any genuine concern regarding wrongful misconduct (as defined in saidpolicy) including reporting instances of leak of unpublished price sensitive informationof the Company as required under regulation 9A(6) of SEBI (Prohibition of InsiderTrading) Regulations 2015. No employee or Director of the Company was denied access tothe audit Committee. There was no reporting of any such event during the year. The AuditCommittee review the functioning of vigil mechanism / whistle blower policy. The saidwhistle blower policy of the Company is uploaded on the website of the Company Policies on code of conduct and prevention of Sexual Harassment at workplace are also uploaded on the said website

23. Audit Committee:

A detailed note on audit Committee including its composition role and number ofmeetings held etc. is presented in the report on Corporate Governance which is formingpart of this annual report. All the recommendations made by the audit Committee during thefinancial year were accepted by the Board.

24. Internal Financial Control:

Adequate internal financial controls are in place in the Company with reference tofinancial statements. No reportable material weaknesses in the operations were observedduring the financial year. For further details kindly refer to a section titled"internal control and their adequacy" in the report of management discussion andanalysis in this Directors' report.

25. Other Information:

A. A detailed information on conservation of energy and technology absorption foreignexchange earnings and outgo is annexed as "Annexure-D" to this report.

B. Risk management policy: Your Company has formulated a risk management plan and haveconstituted a risk management Committee. The risks are classified in different areas suchas market finance operational etc. These risks are reviewed regularly to mitigate therisk if any.

C. In pursuance of Section 197(12) of the Act read with Rule

5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 details of employees are annexed herewith as "Annexure-E" to this report.

26. General:

Disclosure or reporting is not required by the Company with respect to the followingitems as there were no transactions nor any reporting required on these items for the yearunder review:

A. The disclosure under Schedule V (A) (2) of SEBI-LODR relating to the accounts ofholding Company and subsidiary Company is not applicable to the Company since yourCompany does not have any holding or subsidiary or associate Company nor it is asubsidiary or associate of any other Company.

B. Details relating to deposits covered under Chapter V of the Act.

C. Issue of equity shares with differential rights as to dividend voting or otherwise.

D. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

E. No significant or material orders were passed by the regulators or courts ortribunals which may impact the going concern status and Company's operations in future.However a legal matter is pending at the Supreme Court details of which is mentionedherein above.

F. Your Company has in place a Policy in line with the requirement of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and hascomplied with POSH Committee. No complaint in this regard was received by the Committeeduring the year.

G. As certified by the RTA no shares are lying with them which are under dematsuspense account or unclaimed suspense account in terms of Schedule-V- (F) of the SEBI-LODR.

27. Cautionary Statement:

Statements in this report particularly that pertains to management discussion andanalysis may contain certain statements that might be considered forward looking. Thesestatements are subject to certain risks and uncertainties. Actual results may differmaterially from those expressed in the statement as unforeseen factors could influence theCompany's operations such as domestic or international government's policies adversitiesthat may be caused by situations like natural calamities war Covid-19 like pandemicpolitical and economic developments risks inherent to the Company's growth and such otherfactors.

28. Appreciation:

Your Directors place on record their gratitude towards the employees of the Company andconvey their sincere appreciations for the hard work and excellent commitment by each ofthem during the year under review. They also acknowledge the whole hearted support of thevendors superstockists stockiest investors and all the stakeholders. Your Director alsothank all the various Government Departments and Agencies for their co-operation andsupport throughout. The Directors also appreciate the valuable support of the independentDirectors.

For and on behalf of the Board of Directors

Ashish U. Bhuta

Chairman and Managing Director

Mumbai 27th May 2022.