As on: Mar 27, 2023 03:23 PM
Director?s Report to the Members:
Your Directors have pleasure in presenting their 29th Twenty Ninth Annual Report together with the Audited Accounts of the company for the year ended 31st March 2022.
FINANCIAL RESULTS:
The Company?s financial performance, for the year ended 31st March 2022 is summarized here below:
(Rs in Lacs)
THE CHANGE IN THE NATURE OF BUSINESS, IF ANY:
There was no change in nature of business for the period under review.
TRANSFER TO RESERVES:
The company does not propose to transfer any amount to the General Reserves.
DIVIDEND:
Based on the performance of the Company and the need for conservation of internal accruals, while maintaining the dividend for the shareholders, your Directors are pleased to recommend a final dividend of ' 1.00 per equity share at the rate of 10% subject to the approval of members. The dividend, if approved by the Members, will result in the out flow of ' 70.12 Lakh from the company in addition to ' Nil lakhs by way of dividend distribution tax. Dividend if declared will be paid to the Members whose names appear in the Register of Members as on the record date as on 12th September, 2022
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND & TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the Companies Act, any unclaimed or unpaid Dividend relating to the financial year 2014-15, will be transferred to the Investor Education and Protection Fund established by the Central Government, after the conclusion of 29th Annual General Meeting.
Pursuant to Section 124(6) of the Companies Act, 2013 all shares in respect of which Dividend has not been paid or claimed for seven consecutive years or more has been transferred to IEPF. Further shares required to be transferred to IEPF for the financial year 2014-15 to 2021-22 will be transferred as per the provisions of the Act.
The details of the said shares transferred are provided on the website of the Company at http://www.naturalcapsules.com/pages/bes-compliance.html
SHARE CAPITAL:
During the year under consideration, there was change in the paid up capital. The Company has issued rights shares of 31,16,350 partly paid equity shares face value of ' 10/- each (' 2.50 paid up) for cash at a price of ' 100/- each (' 25 paid up) right equity share including premium of ' 90/- per rights equity share, resulting into change in equity share capital from ' 6,23,27,000 Comprising of 62,32,700 Equity Shares of ' 10/- each to ' 7,01,17,875 comprising of 62,32,700 Equity Shares of ' 10/-each fully paid and 31,16,350 shares partly paid of ' 2.50 per share.
STATUS OF EXPANSION & API PROJECTS:
During the year company has installed 3 high speed capsule making machine at Bengaluru unit, resulting in increase of installed capacity of the company from 10.8 billion to 16.02 billion capsules per annum.
Construction is on full swing in the API project of the company which is being implemented by its fully owned subsidiary M/s Natural Biogenex Pvt Ltd. We are expecting to start the trial productions by 4th quarter of the financial year 2022-23.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) and Section 134(3)(a) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is uploaded on the website of the Company web link www. naturalcapsules.com
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW:
Further details of the same have been enumerated in the Corporate Governance Report annexed in Annexure - 5 to this report.
DEPOSITS:
Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has given corporate guarantees of ' 48 crores to its wholly owned subsidiary M/s Natural Biogenex Private Limited covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Internal financial controls means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information; The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditors? report, internal audit reports, secretarial audit reports, project repots, quarterly budgets, significant processes and accounting policies and other key issues from time to time.
DIRECTORS? RESPONSIBILITY STATEMENT
The Directors confirm that -
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards.
(b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets 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) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Based on the framework of internal financial controls established and maintained by the Company, work performed by the
Internal, Statutory and Secretarial Auditors, reviews performed by the management and the relevant Board
Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company?s internal financial controls were adequate and effective as on 31st March, 2022.
(f) They have duly complied with Secretarial Standards issued by Institute of Company Secretaries of India (ICSI) from time to time.
INFORMATION PERTAINING TO AUDITORS AND OTHER ALLIED MATTERS:-
Details In Respect of Frauds Reported By Auditors under Section 143(12) Other Than Those Which Are Reportable To the Central Government
There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.
Explanation and Comments on Auditor Reports:
The reports of the Statutory Auditors (annexed elsewhere in the Annual Report) and that of the Secretarial Auditors (annexed hereto as Annexure - 2) and the explanations on the observations of Secretarial Audit Report is given below:
STATUTORY AUDITORS:
M/s P. Chandrasekar LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company for a term of five consecutive years at the 24th Annual General Meeting held on 29th August 2017 subject to annual ratification by shareholders. However with the advent of Companies (Amendment) Act, 2017 the requirement of annual ratification of the appointment of the Statutory Auditors of the Company by the shareholders at the Annual General meeting has been done away with. M/s P. Chandrasekar LLP, Chartered Accountants shall be reappointed in the ensuing AGM for the FY 2022 subject to approval of the shareholders.
SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time) the Company has appointed Shri R. Parthasarathy, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure - 2.
COST AUDITORS
The provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014(as amended from time to time) is currently not applicable to the company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
DECLARATION OF INDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
DIRECTORS:
Shri. Laxminarayan Mundra and Smt. Jyoti Mundra, Directors retire by rotation and being eligible, offer themselves for re appointment.
During the year under consideration, Mr. Sathyanarayana Mundra was reappointed as WTD in view of attaining the age of 70 years for his remaining tenure ending on 22nd August, 2022.
Mr. Sathyanarayana Mundra?s tenure as Whole time director is ending on 22nd August, 2022 Considering his immense contribution to the progress of the company as a promoter and executive director since inception, the Board recommends his reappointment for a further period of 3 years and also to revise his remuneration subject to the approval of members.
During the year under consideration All independent directors have given declarations that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. All Directors have given declaration relating to compliance with code of conduct.
NOMINATION AND REMUNERATION & COMPENSATION COMMITTEE AND POLICY:
As per the requirements of the provisions of the Companies Act, 2013, a Nomination and Remuneration & Compensation Committee of Directors was constituted by the Board of Directors and the details of the Members of the Committee are disclosed elsewhere in this Annual Report. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on Director?s appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178. The said Policy is available on the website of the Company, various web links of the company?s policy is detailed under the head Policy.
RELATED PARTY TRANSACTIONS:
All transactions of the Company with the related parties were in the ordinary course of business and on an arm?s length pricing basis. There were no material significant related party transactions having potential conflict with the interest of company.
The Policy on Related Party Transactions (including the revised policy applicable for related party transactions effective April 01, 2019), is available on the Company?s website and can be accessed at http://www.naturalcapsules.com/pdf/policy-on-related-party-transactions.pdf
As prescribed by Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts/arrangements with related parties are given in Form AOC-2, annexed as Annexure - 1 to this report.
(A). Name of the related party and nature of relationship where control exists:
(B) (i) Related Party Transactions:
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There is no any material changes and commitments occurred between the end of the financial year ended as on 31st March, 2022 and the date of the report which can affect the financial position of the company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules,
2014 (as amended from time to time) is attached herewith as Annexure - 3 to this report.
RISK MANAGEMENT:
The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making and are periodically reviewed and revised by the Board of Directors.
CORPORATE SOCIAL RESPONSIBILITY:-
The CSR Committee members are Shri Anjan Kumar Roy, Shri Sunil L Mundra and Shri Sushil Kumar Mundra. The Annual Report on Company?s CSR activities of the Company is furnished in the prescribed format as Annexure - 4 and attached to this report.
BOARD EVALUATION:
The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of inputs received from all the Directors / Members of the Committees, as the case may be.
The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results of evaluation have been communicated to the Chairman of the Board of Directors.
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of directors on various parameters such as:
• Board dynamics and relationships
• Information flows
• Decision-making
• Relationship with stakeholders
• Company performance and strategy
• Tracking Board and committees effectiveness
• Peer evaluation
The evaluation process has been explained in the corporate governance report. The Board approved the evaluation results as collated by the nomination and remuneration committee.
CORPORATE GOVERNANCE:
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided in Annexure - 5 in this Report and the same forms part of the Directors? Report. Read the Management Discussion & Analysis report on page no. 20
COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The present Committee members are Mr. CP Rangachar, Mr. Pramod Kasat, Mr. S.G. Belapure (w.e.f. 10.08.2022) & Mr. Sunil L Mundra, details of which are enumerated in the Corporate Governance Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in corporate governance report. During the year under review, there were no complaints received under this mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2021- 22.
OTHER DISCLOSURE:
a) details of establishment of vigil mechanism, whistle blower policy, and affirmation that no personnel has been denied access to the audit committee;
b) details of compliance with mandatory requirements and adoption of the non-mandatory requirements;
c) web link where policy for determining ‘material? subsidiaries is disclosed;
d) web link where policy on dealing with related party transactions;
e) a certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority.
PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure - 6 to this Report.
EMPLOYEE STOCK OPTION SCHEMES
Pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 read with Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 The Company has implemented ESOP Scheme 2018, to reward and retain the qualified and skilled employees and to give them an opportunity to participate in the growth of the Company. These Schemes are administered by the Nomination, Remuneration and Compensation Committee of the Company has been appended as Annexure - 7 to this Report
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company has two subsidiaries-M/S Natural Biogenex Private Limited and M/S Natural Phyto Pharma Private.
The Company has an adequate Internal Control System commensurate with its size and operations. Management has overall responsibility for the Company?s Internal Control System to safeguard the assets and to ensure reliability of financial records. Audit Committee reviews all financial statements and ensures adequacy of internal control systems. The Company has engaged the services of an Independent Chartered Accountant to carry out the internal audit and ensure that recording and reporting are adequate and proper, the internal controls exist in the system and that sufficient measures are taken to update the internal control system. The system also ensures that all transaction are appropriately authorized, recorded and reported. Exercises for safeguarding assets and protection against unauthorized use are undertaken from time to time. The company has also installed an extensive CCTV Surveillance system to cover the entire factory premises. All these measures are continuously reviewed by the management and as and when necessary improvements are affected.
DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The Net Sales during the year was ' 13506.50 lakh and your Company could make Net Profit of ' 1375.62 after tax.
NO. OF EMPLOYEES:
*Unit 3 is established for the proposed API Project