Mercury Laboratories Limited
Your Directors have pleasure in presenting the 40th Annual Report of MercuryLaboratories Limited (the Company) on the business and operations of the Company togetherwith the audited financial statements for the financial year ended on March 31 2021.
1. FINANCIAL SUMMARY/PERFORMANCE OF THE COMPANY
The financial performance of the Company for the financial year ended March 31 2021along with figures of previous financial year is summarized below:
|PARTICULARS || ||(Rs. in Lacs) |
| ||2020-21 ||2019-20 |
|Revenue from Operations ||6860.15 ||5726.91 |
|Gross Profit before Depreciation Interest & Tax ||1047.10 ||701.54 |
|Less: Interest ||64.14 ||81.74 |
|Less: Depreciation ||192.05 ||186.88 |
|Profit/(Loss) before Exceptional Items & Tax ||790.89 ||432.90 |
|Exceptional Items ||- ||- |
|Profit/(Loss) before Tax ||790.89 ||432.90 |
|Less: Current Tax including Income Tax of Previous Year & Deferred Tax ||257.14 ||110.09 |
|Profit/(Loss) from Continuing Operations ||533.75 ||322.81 |
|Profit/(Loss) from discontinued operations ||- ||- |
|Tax expense of discontinued operations ||- ||- |
|Profit/(loss) from Discontinued operations (after tax) ||- ||- |
|Profit/(Loss) for the Period ||533.75 ||322.81 |
|Other Comprehensive Income || || |
|A (i) Items that will not be reclassified to profit or loss ||- ||- |
|A (ii) Income tax relating to items that will not be reclassified to profit or loss ||- ||- |
|Total other comprehensive income (A (i - ii)) ||- ||- |
|Total comprehensive income for the period ||533.75 ||322.81 |
|"Earning Per Share || || |
|Basic ||44.48 ||26.90 |
|Diluted ||44.48 ||26.90 |
"Equity Shares are at par value of INR 10 per share.
Your Directors are pleased to recommend payment of dividend INR 2.00 per equity shareof face value of INR 10 each for the year ended on March 312021 absorbing Rs. 24.00 Lacswhich will be if approved paid to the Shareholders holding shares as on September212021 after business hours. The final dividend is in addition to the interim dividend ofINR 1.5 per share declared on February 112021 and paid to shareholders on March 01 2021.Together with the Interim Dividend of INR 1.50 per share the total dividend for thefinancial year ended March 312021 amounts to INR 3.5 per share absorbing 42.00 Lacs intotal. The dividend if declared is subject to deduction of Tax at source in accordancewith applicable provisions. The Dividend Distribution Policy of the Company is set out asAnnexure A.
3. Transfer to Reserves:
Your Company has transferred an amount of INR 350.00 Lacs to the General Reserve duringfor the Financial Year ended on March 31 2021.
4. Financial Performance and Operations Review:
During the year under review the Company yielded Revenue from operations of INR6860.15 lacs and earned Gross Profit before depreciation interest and tax of INR 1047.10lacs with Net Profit of INR 533.75 Lacs as against Revenue from operations of INR 5726.91Gross Profit before depreciation and Interest and tax of Rs. INR 701.54 lacs with NetProfit of 432.90 INR 322.81 Lacs of previous year respectively.
5. Future Prospects:
During the FY 2020 - 2021 the COVID 19 pandemic took the world with surprise and sweptalmost all the countries under its effect. The Government's decision of an early lockdownassisted to slowdown spread of the Virus and gave time to healthcare community to preparefor outbreak. Your company being the Pharmaceutical Manufacturing Company dealing intomanufacturing of Medicines related to Mother and Child Care. Operations of the Company hadbeen continued during national lockdown and the Company was complying with therequirements related to Social Distancing and mandatory to wear face mask and have propersanitizations. Company had implemented strict measures of ensuring social distancinghygiene practices and deep cleansing of premises to ensure the safety for our workersstaff & community at workplace. Company was affected due to Covid-19 Pandemicsubstantially as the entire nation and world badly affected due to number of reasons.
Due to lockdown in India our number of associates who were supplying rawmaterials packing materials printing materials were closed and we were unable to procureit. Additionally transportation was not availablelo bring from one destination to anotherdestination.
Due to lockdown and social distancing our man power and supervisors was reducedto about 50% - 60%. Some of them were not coming due to red zone lockdown andnon-availability of transportation. In view of above and shortages of airinputs andworkers production activity came down to 40% to 50% of the normal productivity.
Due to national lockdown our domestic marketing activity came to almostfullstop as most of the cities did not allowed medical representative to make personalcalls and also intrastate and interstate travelling were not permitted. Most of medicalsprofessionals closed down their clinic due to Covid 19 that has affected our business.
Due to lack of transportation and logistics Company is experiencingdifficulties in supply chain. We have noticed the delivery period of our goods hasincreased 2 to3 fold in most of tne locations.
Due to the low volume of business from March end it has affected our collectionand liquidity revenue and profitability substantially.
At present this Covid-19 Pandemic has taken a stall in India and all over the world.Most of the countries economy goes de-growth and borrowed heavily from the market and fromworld bank.
There was chaos on non-availability of ICU beds oxygen cylinders medicinesventilators.
During Covid-19 Pandemic India was recognized reliable source of medicines vaccinesand health related issues. Most of the countries recognized Indian Pharma Companies byvideo and submitting documents and approved their productforthe importation.
Our worst experience of Covid-19 pandemic brought awareness and new thoughts asgovernment of India allotted more fund for health related and that includes creation ofcentre and Health care medical support creation of medical colleges and Nursing servicecentres so that more doctors and nurses can be made available. Government and the Pharmacompanies invested heavily on their expansion.
Looking to the above scenario the management strongly believe that pharma industriesof India will increase their productivity and meet their demands of national market aswell as international market medicines medical equipment surgical items etc. Managementsees very bright and prosperous future of the Company.
We are exercising prudence in managing costs to conserve cash we continue toprioritise investments in capacity for key projects quality systems compliance safetyand digitisation to shape the future of Mercury Laboratories. Capacity creation andallocations for key products are also taking place keeping the long term in perspective.We are systematically undertaking digitisation across functions and working towardsintegration at an organisational level which will be critical for sustainability as anorganisation. An important pillar of our future preparedness is the investments we aremaking in our people. We are building a strong leadership team and hiring the right talentto address the needs of our customers and realise our strategic priorities. The futurebelongs to organisations that are resilient and can quickly adjust to the reality of themarket. Accordingly Mercury Laboratories will continue to stay focused on building on itsagility to maximise value creation.
MANAGEMENT DISCUSSIONS AND AN ALYSIS
As stipulated by regulation 34(3) read with Schedule V(B) of the Listing RegulationsManagement Discussion and Analysis forms parts of this report.
a) Industry Structure and Development
The Government's concerted push towards the pharma sector through initiatives such asMake in India Ayushman Bharat Scheme National Digital Health Mission etc. has cementedIndia as a leading global capital market. Production linked incentive (PLI) scheme for thepharma industry worth 15000 crores ($2.04 billion) to promote domestic manufacturing ofcritical key starting materials (KSM) drug intermediates and active pharmaceuticalingredients (APIs) making India a leading supplier. The Government has approved a total of33 applications with a committed investment of Rs.5082.65 crores under a separate PLIscheme for APIs Increased thrust on rural health programmes lifesaving drugs andpreventive vaccines Plan for a mega bulk drug parks to reduce raw material dependence onimports The Union Budget 2021-22 saw an unprecedented increase in allocation for healthsector like Increased spending on healthcare from 1.2% of the GDP to 2.5% of the GDP
64180 crores allocation for the Atmanirbhar Swasth Bharat Yojana for development ofprimary secondary and tertiary healthcare over a period of six years 223846 croresbudget outlay for health and well-being for FY 2022 an increase of 137% over previousyear 35000 crores outlay for Covid-19 vaccines and national rollout of pneumococcalvaccines to help save over 50000 lives annually 6429 crores for health insurancescheme Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana
Key growth factors of the pharma sector The Indian pharma sector growth looks promisinggiven strong Government focus on improving accessibility increasing affordability andgrowing acceptability of pharma. The Government has taken several initiatives like massiveinoculation drive Atmanirbhar Swasth Bharat Yojana to develop capacities of primarysecondary and tertiary healthcare systems focus on Medical Value Travel launch ofPM-JAY to increase penetration of health insurance $200 billion investment on medicalinfrastructure over 10 years Ayushman Bharat Yojana Pradhan Mantri Bhartiya JanaushadhiPariyojana focus on medical education etc.
b) Outlook Risks and Concerns
While the outlook for the business environment gradually improved the second wave ofCOVID-19 emerged in India in April and May 2021 and its economic impact remains uncertain.Although our clients are better prepared to address the challenges we continue to remainvigilant across our portfolio to mitigate any potential risks by supporting our clients toensure construction progress across the projects in our portfolio. We believe that ourprovisions should be enough to take care of future contingencies that may arise due toCOVID-19.
World economic overview
The year 2020 posed significant challenges for economies across the globe withlockdowns posing a threat of deep recession. However sizeable swift and unprecedentedfiscal monetary and regulatory responses by most Governments helped to maintaindisposable income for households protect cash flow for firms and support creditprovision. The global contraction for 2020 is estimated at 3.5% led by China's quickrecovery and better than expected GDP outturns in large advanced economies.
New large economies have raised hopes of a turnaround in 2021 with growth expectationsof 5.5% followed by 4.2% in 2022. Across countries recovery levels may vary significantlydepending on access to medical interventions effectiveness of policy support exposure tocross-country spill overs and structure
Global Pharma Market
The demand for healthcare and innovative solutions is growing globally with chronicdiseases on the rise. The global pharmaceuticals market is expected to grow from $1228.45billion in 2020 to $1250.24 billion in 2021 at 1.8% CAGR. The slowdown in growth ismainly due to the companies rearranging their operations and recovering from the Covid-19impact which had earlier led to restrictive containment measures involving socialdistancing remote working and the closure of commercial activities causing operationalchallenges. The market is expected to reach $1700.97 billion in 2025 at 8% CAGR.
North America was the largest region in the global pharmaceuticals market accountingfor 46% of the market in 2020 owing to increasing prevalence of chronic diseases andskyrocketing number of Covid-19 cases in the US. Asia-Pacific was the second largestregion accounting for 26% of the global pharmaceuticals market. Africa was recorded as thesmallest region in the global pharmaceuticals market. The global pharmaceuticals market isprojected to rise at a considerable pace driven by the increasing investments in productR&D. The efforts put in to develop efficient products will bode well for the growth ofthe overall market in the coming years.
c) Financial Performance and Operation Review
During the year under review the Company yielded Revenue from operations of INR6860.15 lacs and earned Gross Profit before depreciation interest and tax of INR 1047.10lacs with Net Profit of INR 533.75 Lacs as against Revenue from operations of INR 5726.91Gross Profit before depreciation and Interest and tax of INR 701.54 lacs with Net Profitof INR 322.81 Lacs of previous year respectively.
The Company's business in the emerging markets also suffered due to significantcurrency fluctuations and regulatory issues. The Company is implementing comprehensiveremedial measures at all its manufacturing sites to ensure quality and regulatorycompliances. These remedial measures included review of all processes and proceduresrevamping of training system recruitment of senior quality personnel as well asautomation of quality control laboratories. Your company is committed in resolving theseissues at the earliest. The Company is also committed to its philosophy of highest qualityin manufacturing operations system integrity and GMP culture. Your management isconfident that implementation of remedial measures will ensure that the company willregain all its regulatory approvals.
| || || || ||Rs. in Lacs |
|Break-up of Sales ||2020 - 21 ||2019-20 ||Growth/In terms of Value ||Degrowth) In terms of % |
|Domestic ||3492.10 ||3851.16 ||(359.06) ||-9.32 |
|Erga Sales ||0 ||67.17 ||(67.17) ||(100.00) |
|Grace Division ||254.62 ||0.00 ||254.62 ||100.00 |
|Deemed Exports ||1301.34 ||874.34 ||427.00 ||48.84 |
|Direct Exports ||1812.08 ||934.25 ||877.83 ||93.96 |
|Total ||6860.14 ||5726.92 ||1200.39 ||133.48 |
During the financial year under report the domestic sales of products of the Companyamounted to INR 5048 lacs as against INR4792.67 lacs in the previous year which reflectIncrease of 5.33% and in value INR 255.39 Lacs. Whereas the International Business(export) amounted to INR 1812.1 Lacs as against INR 934.25 lacs in the previous year whichwas Increase by 93.96% and in value INR 877.83 Lacs.
d) Internal Control System and its adequacy
The Company has adequate internal control system including suitable monitoringprocedures commensurate with its size and the nature of the business. The internal controlsystem provide for all documented policies guidelines authorization and approvalprocedures. The Company has an internal auditors which carries out audits throughout theyear. The statutory auditors while conducting the statutory audit review and evaluate theinternal controls and their observations are discussed with the Audit Committee of theBoard. Further the Company has in place adequate Internal Financial Controls withreference to financial statements. During the year such controls were tested and noreportable material weakness in the design or operations were observed.
e) Human Resources
The human resources plays a vital role in the growth and success of an organization.The Company has maintained cordial and harmonious relations with employees across variouslocations. At the core of our success are our people and have been working towards keepingthem engaged and inspired.
During the year under review various trailing and development workshops were continuedto be conducted to improve the competency level of employees with an objective to improvethe operational performance of individuals. The company has built a competent team tohandle challenging assignments.
The Company strives to enhance the technical work related and general skills ofemployees through dedicated training programs on a continuous basis. The Company has 660employees as on March 312021.
f) Formulation and Developments
Company always considering Formulation and Development as crucial for sustain growth ofthe Company. Company always try to introduce newer and newer drugs delivery system forensuring products available as regard to time and enhancing therapeutic value.
To achieve this objective we have experienced and qualified pharmacists whose activityis to maintain and find out newer and newer delivery system as well as re-engineeringinnovative process. This will held the Company to maintain material consumption ration.
g) Cautionary Statement
Certain statement in the management discussion and analysis may be forward lookingwithin the meaning of applicable securities law and regulations and actual results maydiffer materially from those expressed or implied. Factors that would make differences tocompany's operations include competition price realization Drugs Price Controlscurrency fluctuations regulatory issues changes in government policies and regulationstax regimes economic development within India and the Countries in which the companyconducts business and other incidental factors.
6. Directors' Responsibility Statement
Your Directors state that:
a. In the preparation of annual accounts for the year ended March 31 2021 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures 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 at March 312021 and of the Profit of theCompany for the year ended on that date;
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. The Directors have prepared the annual accounts on a "going concern"basis;
e. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
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.
7. Directors and Key Managerial Personnel
During the year under review following changes occurred in the position ofDirectors/KMPs of the Company:
a. Mr. Paresh J Mistry Director of the Company who retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for reappointment. Theretirement of director by rotation at the ensuing Annual General Meeting is determined inaccordance with the provisions of the Companies Act 2013.
b. Ms. Enu Khandelwal was appointed as Chief Finance Officer of the Company with effectfrom August 07 2020.
c. Mrs. Poornima Karvat whose term of appointment as an Independent Director was validupto March 30 2020. At the meeting of Board of Directors held on February 052020 on therecommendation of Nomination and Remuneration Committee of the Company she wasre-appointed as an Independent Directorfor further period of 5 years subject to approvalof the shareholder at the ensuing Annual General Meeting. However in view of health issueand preoccupation she had resigned from Directorship with effect from May 302020.
d. At the meeting of Board of Directors of the Company held on February Board approvedappointment of Mr. Rajendra RShah as Managing Director of the Company forfurther period of3 years with effect from April 01 2020. Subsequently His appointment was also approved bythe shareholders at the Annual General Meeting held on September292020.
e. At the meeting of shareholders held on September 292020 appointment of Mrs. JankiR Shah as Director of the Company was also approved by shareholders of the Company.
Necessary resolutions for appointment/reappointment of the aforesaid directors andtheir detailed profiles have been included in the notice convening the ensuing AGM anddetails of proposal for appointment/reappointment are mentioned in the explanatorystatement of the notice. Your directors commend their appointment/re-appointment.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company except Mr. Paresh J Mistry who is being paidof holding position of Purchase Manager in the Company and Mr. Divakant Zaveri being paidprofessional fees.
Key Managerial Personnel as at March 312021 are as under:
1. Mr. Rajendra R Shah Managing Director
2. Miss. Kinjal Khandelwal (w.e.f27.07.2019)
3. Miss. Enu Khandelwal (07.08.2020)
8. Number of Meetings of the Board
Five Meetings of the Board were held during the year on May 30 2020 July 04 2020August 07 2020 November 06 2020 and February 112021. For details of the meetings ofthe Board please refer to the Corporate Governance Report which forms part of thisreport.
9. Policy on Directors'Appointment and Remuneration and other details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act may be accessed on the Company's website at thelink: http://www.mercurylabs.com.
10. Board Evaluation
Pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015mandates that the Board shall monitor and review the Board evaluation framework. TheCompanies Act 2013 states that a formal annual evaluation needs to be made by the Boardof its own performance and that of its committees and individual directors. Schedule IV ofthe Companies Act 2013 states that performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the Director being evaluated.
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 and theCorporate Governance requirements as prescribed by Securities and Exchange Board of India(SEBI) under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes Information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee (NRC) 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 aspects of his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
11. Internal Financial Control Systems and their adequacy
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
12. Audit Committee
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
13. Share Capital
The paid-up Equity Share Capital of the Company as at March 312021 is INR120 Lacs. TheCompany currently has no outstanding shares issued with differential rights sweat equityor ESOS.
14. Risk Management
Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. Aformal enterprise wide approach to Risk Management is being adopted by theCompany and key risks is getting managed within a unitary framework. Key business risksand their mitigation are considered in the annual/strategic business plans and in periodicmanagement reviews. The Audit Committee is responsible for reviewing the risk managementplan and ensuring its effectiveness. The Audit Committee has additional oversight in thearea of financial risks and controls. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.
15. Safety Environment and Health
The Company considers safety environment and health as the management responsibility.Regular employee training programs are carried out in the manufacturing facilities onsafety environment and health.
16. Particulars of Loans Guarantees or Investments
The Company has not provided any loans and guarantees and no investments made pursuantto Section 186 of the Companies Act 2013 during the year ended on March 312021.
17. Particulars of contracts or arrangements with related parties:
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis and in compliance of the provisions of Section 188 of the Companies Act 2013 &rules made there underand Listing Agreement & SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015.
The Company had not entered into any contract /arrangement/transaction with relatedparties which could be considered material in accordance with the policy of the Company.The Policy dealing with related party transactions as approved by the Board may beaccessed on the Company's website at the link: http://www.mercurylabs.com. All the relatedparty transactions are placed before the Audit Committee as also Board forapproval/Ratification.
Prescribed form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act 2013& Rule 8(2) of the Companies (Accounts) Rules 2014 is furnished as Annexure - B tothis report.
18. Corporate Social Responsibility (CSR)
As Per Amendment and section 135 Though not mandatory in terms of Section 135 ofCompanies Act 2013 the Company has formulated Corporate Social Responsibility (CSR)Policy in accordance with Section 135 of the Companies Act 2013 and reconstituted CSRCommittee with on May 14 2015 with Mr. D. R. Zaveri and Mr. Bharat Mehta Two Independentdirectors and Mr. Rajendra R Shah Managing Director and Dilip Shah Director of theCompany.
Subsequent to resignation of Ms. Poornima Karvatwith effect from May 302020 CSRCommittee was reconstituted on May 302020 as under:
|Sr. No. ||Name of Director ||Category |
|01 ||Mr. Rajendra R Shah ||Chairman & Member |
|02 ||Mr. Divyakant Zaveri ||Member |
|03 ||Mr. Bharat Mehta ||Member |
|04 ||Mr. Dilip Shah ||Member |
However the Company has been pursuing CSR activities in the area of promotion ofeducation in medical field by providing scholarship and other amenities to the medicalstudents. The CSR policy of the Company is placed on the website of theCompanywww.mercurylabs.com.
19. Policy on prevention prohibition and redressal of sexual harassment at workplace
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 (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace 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.
The Company has not received any complaint of sexual harassment during the financialyear 2020-21. The policy on Prevention Prohibition and Redressal of Sexual Harassment ofWomen at work place is placed on website of the Companywww.mercurylabs.com.'
20. Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee. The Whistle Blower Policy is posted on the website of theCompanywww.mercurylabs.com.
21. Significant and material orders passed by the regulators or courts.
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
22. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8 of TheCompanies (Accounts) Rules 2014 is annexed asAnnexure-C.
23. Particulars of Employees and Remuneration
Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules no employee ofthe Company was paid remuneration exceeding theprescribed limits during the financial year2020-21
The information required under Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is provided in the Annexure-D forming part of theReport. None of the employees listed in the said Annexure is related to any Director ofthe Company.
24. Auditors & Their Reports
(1) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules framed there underat the Annual General Meeting held on September 142018 M/s. R J Shah & AssociatesChartered Accountants has been appointed as Statutory Auditor of the Company to holdoffice till conclusion of 41 st annual general meeting to be held in the year 2022. TheCompanies (Amendment) Act 2017 has waived the requirement for ratification of theappointment of Statutory Auditors by the Shareholders at every Annual General Meeting.Hence the ratification of appointment of Statutory Auditors by your company is notrequired. Accordingly Statutory Auditor will continue to hold office till the conclusionof the 41 st Annual General Meeting of the Company.
The Auditor's Report for the financial year 2020-21 does not contain any qualificationreservation or adverse remark which requires any clarification/ explanation. The Auditor'sReport is enclosed with the financial statement in this Annual Report. There was noinstance of fraud during the year under review which required the statutory auditors toreport to the Audit Committee and/or Board under Section 143(12) of the Act and the rulesmade thereunder. The Notes on accounts referred to in the Auditor's Report are selfexplanatory and therefore do not call for any further comments.
(2) Secretarial Auditors:
Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rule 2014 the Board of Directors of theCompany had appointed M/s. Mitesh Rana & Co. a firm of Company Secretaries to carryoutSecretarial Audit for the year ended on March 312021. The Secretarial Audit Report isannexed as Annexure-E.
The Auditors" Report and the Secretarial Audit Report for the financial year endedMarch 312021 do not contain any qualification reservation adverse remark.
The Company has complied with the provisions of Secretarial Standards on Board Meetingsand General Meetings issued by the Institute of Company Secretaries of India and approvedby the Central Government
The Board of Directors of your Company has appointed M/s. Mitesh Rana & Co.Company Secretaries Vadodara to carry out Secretarial Audit of your Company for FY 2021-22.
Pursuant to the provisions of Section 148 read with Companies (Cost Records and Audit)Amendment Rules 2014 and as recommended by the Audit Committee the Board had appointedM/s. V.M. Patel & Associates Practicing Cost Accountants who have given theirconsent to act as Cost Auditors and laid on the table the consent letter received fromthem & confirmed that his appointment met the requirements of Section 141 (3)(g) ofthe Act for the year 2021-22 and that he was free from disqualification as specified undersection 141 read with Section 148 of the Act.
In terms of Rule 14 of the Companies (Audit and Auditors) Rule 2014 remunerationpayable to the cost auditors is required to be ratified by members. Accordingly anordinary resolution will be passed by members at the 40th Annual General Meeting approvingthe remuneration payable to M/s. V.M. Patel & Associates.
(4) Internal Auditors
The Board of Directors appointed M/s. K R & Associates as Internal Auditors of theCompany for financial year 2021-22.
The Company has no unpaid and/or unclaimed deposit. The Company has accepted depositfrom Directors and their relatives the Shareholders and has complied with all applicableprovisions of the Companies Act relating to acceptance and renewal of deposits.
The details relating to deposits covered under Chapter V of the Act are as under:
|Particulars ||Amt. in INR (Lacs) |
|Accepted during the year from the Members ||None |
|Remained unpaid or unclaimed as at the end of the year ||None |
|Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year; ||None |
26. Extract of Annual Return
The extract of annual return is given in Annexure-F which forms part of this report. Asrequired under Section 92(3) and 134(3) and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 (as amended) an extract of Annual Return is made available onthe website of the Company at the web-link www.mercurylabs.com
27. Material Change & Commitments if any
There is no material changes and commitments that would affect financial position ofthe company from the end of the financial year of the company to which the financialstatements relate and the date of director's report.
28. Corporate Governance Report
As stipulated by Regulation 34(3) read with Schedule V(C) of the Listing RegulationsCorporate Governance Report forms part of this Annual Report Annexed to the said report isthe Auditor's Certificate as prescribed under Schedule V(E) of the Listing Regulationscertifying compliance with conditions of corporate governance.
29. Independent Directors
The Independent Directors of the Company have given the declaration and confirmation tothe Company as required under Section 149(7) of the Companies Act 2013 and Regulation25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015confirming that they meet the criteria of independence and that they are not aware of anycircumstances or situation which exists or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence
The Board of Directors of the your company confirms that the Independent Directorsfulfill the conditions specified in Section 149 (6) of the Act and Regulation 16(1)(b) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and areindependent of the management.
In terms of requirements under Schedule IV of the Companies Act 2013 and Regulation25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate meeting of the Independent Directors was held on February 112021.
30. CHANGE NATURE OF BUSINESS
During the year under review there had been no change in the Company's nature ofbusiness.
The Board of Directors wish to place on record their appreciation for the continuedsupport extended by the Bankers Business Associates clients vendors and suppliersGovernment Authorities Employees at all levels and Stakeholders in furthering theinterest of the Company
| ||On behalf of the Board of Directors |
|Date: May 27 2021 || || |
| ||Rajendra R. Shah ||Dilip R Shah |
| ||Managing Director ||Director |
| ||DIN: 00257253 ||DIN: 00257242 |
| ||Place: Vadodara ||Place: USA |