The Members Medi-Caps Limited
Your Directors have pleasure in presenting their 37" Annual Report of Medi-CapsLimited together with the Standalone and Consolidated Audited Financial Statements for theyear ended 31 March 2020. The Consolidated performance of the Company and itssubsidiaries has been referred to wherever required.
1 FINANCIAL RESULTS
The following table shows the operational results of the company for the financial year2019-20 as compared to that of previous year: (Amount in Lakhs)
|Particulars ||Standalone || || |
| ||31.03.2020 ||31.03.2019 ||31.03.2020 ||31.03.2019 |
|Total Revenue ||1202.59 ||2275.58 ||4592.23 ||5451.44 |
|Total Expenditure before Interest and Depreciation ||1998.02 ||2168.44 ||4991.88 ||4717.19 |
|Profit/Loss before Interest Depreciation & Tax (EBIDTA) ||-795.43 ||10714 ||-39965 ||73425 |
|Less: Interest ||0.86 ||1.36 ||1.68 ||1.80 |
|Less: Depreciation ||35.53 ||35.02 ||183.01 ||182.10 |
|Profit/Loss before Tax ||-831.83 ||70.76 ||-584.35 ||550.35 |
|Less:(a) Current Tax ||0.00 ||10.00 ||0.00 ||10.00 |
|(b) Deferred Tax ||0.84 ||1.65 ||0.84 ||1.65 |
|Net Profit/Net Loss for the Year ||-832.67 ||59.11 ||-585.19 ||538.70 |
|Other Comprehensive Income ||66.41 ||0.00 ||120.30 ||0.00 |
|Total Comprehensive Income/Loss ||-766.26 ||59.11 ||-464.89 ||538.70 |
|Add: Surplus brought forward from previous year ||5161.75 ||5102.63 ||4707.83 ||4169.13 |
|Total Surplus available for appropriation ||4395.50 ||161.75 ||4242.94 ||4707.83 |
|Surplus carried to the Balance Sheet ||4395.50 ||5161.75 ||4242.94 ||4707.83 |
|Paid up Equity Share Capital ||1246.99 ||1246.99 ||1246.99 ||1246.99 |
|EPS (Equity Shares of Rs. 10/- each) (in Rs.) ||-6.14 ||0.47 ||3.73 ||4.32 |
|Basic & Diluted || || || || |
STATE OF COMPANYS AFFAIRS & REVIEW OF OPERATIONS
e On a consolidated basis the revenue from operations and other income for the F.Y.2019-20 is Rs. 4592.23 Lakhs which is lower by 15.76% over the previous year (Rs. 5451.44Lakhs in the previous F.Y. 2018-19).
? On Standalone basis the revenue from operations and other income for the F.Y.2019-20 is Rs. 1202.59 Lakhs is declined by 47.15% over the previous F.Y. (Rs. 2275.58Lakhs in the previous F.Y. 2018-19).
e Consolidated Profit after Tax for the year is Rs. -585.19 Lakhs lower by 208.63%over the PAT of Rs.538.70 Lakhs in the previous F.Y. 2018-2019.
e Standalone Profit after Tax for the year is Rs. -832.67 representing a decrease of1508.68% as compared to the previous F.Y. (Rs.59.11 Lakhs in F.Y. 2018-19). Your Board ofdirectors inform the members that on 21 November 2019 the company has permanentlydiscontinued production/manufacturing activities in the plant situated at Mhow - NeemuchRoad Sector 1 Pithampur - 454775 Dist. Dhar due to various factors which includescontinuous decrease in demand/sale of product increase in operating expenses competitionetc. Further company had entered into Real Estate Business for which the company hasapplied for various licensees and approval from various government departments but due topandemic outbreak all the necessary approvals are pending from various Govt. departmentsdue to which the project will be delayed.
2. CHANGE IN THE NATURE OF BUSINESS
The Company was engaged in the business activities of manufacturing of Empty HardGelatine Capsules Halal gelatine Capsules; liquid fills capsules and various ranges ofempty capsules. There is a change in the business activities of your company during thefinancial year. The Board of Directors of Company at its meeting held on 14 November 2019considered that the Company is having surplus land bank that can be utilize in theconstruction and real estate business activities for the maximization of the return to theCompany. Further suitable alteration in the Main Object of the Memorandum of Associationof the Company was made after seeking members approval in the annual general meeting heldon 25 September 2019. However due to pandemic outbreak all the necessary approvalsare pending from various Govt. departments due to which the real estate project will bedelayed.
In view of the losses incurred the Board of Directors have not recommended anydividend for the year 2019-20
TRANSFER OF THE AMOUNT OF UNPAID DIVIDEND AND SHARES TO INVESTOR EDUCATION &PROTECTION FUNDS (IEPF) Pursuant to the provisions of the Companies Act 2013 read withthe IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules)eligible unpaid or unclaimed dividend are required to be transferred by the company to theIEPF established by the Government of India after the completion of 7 (seven) years.Further according to the rules the resulting shares on which dividend has not been paidor claimed by the shareholders for 7 (seven) consecutive years or more also required to betransferred to the demat account of the IEPF Authority. Accordingly the company hastransferred the unclaimed and unpaid dividends of Rs. 194288/- for the year 2011-12 and19607 equity shares for the F.Y. 2011-12 on which the dividend was remainedunpaid/unclaimed for a continuous period of 7 years to the IEPF Authority as per therequirement of the IEPF Rules. The detail related to dividend remains unpaid-unclaimed inthe Company has been given in the Corporate Governance Report attached with the AnnualReport of the Company and also hosted at the website of the Company. Further there are noremaining unclaimed dividend or shares due for transfer in IEPF.
4. SHARE CAPITAL
The paid-up Share Capital as on 31* March 2020 was Rs. 1246.99 lakhs divided into124.69 lakhs equity shares of Rs. 10/- each. During the year under review the Company hasnot issued any shares with differential voting rights nor has granted any stock options orsweat equity. As on March 31 2020 none of the Directors of the Company holds instrumentsconvertible into equity shares of the Company.
5. TRANSFER TO RESERVES
During the year under review your company has not transferred any amount to any type ofreserves.
Your Company has not accepted deposit from the public falling within the ambit ofsection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31 March 2020. Furtherthe Company has not accepted any deposit or loans in contravention of the provisions ofthe Chapter V of the Companies Act 2013 and the Rules made there under. DISCLOSURE OFUNSECURED LOAN RECEIVED FROM DIRECTORS
Pursuant to Section 2(31) Read with Rule 2(1)(viii) of Companies (Acceptance ofDeposits) Rules 2014 (including any statutory modification or re-enactment thereof forthe time being in force) the Company had not received any unsecured loan from directorsduring the financial year.
7 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Your company has not given any loan or advances to any other Body Corporate. Howeveryour company has made investment and given guarantees pursuant to Section 186 of theCompanies Act 2013: (Amount in Lakhs)
|Name of the company ||Nature of Transactions ||Investment made/ Guarantee/Loans Provided ||Opening Balance on 31/03/19 the ||Transactions as made during year ||Closing Balance as on 31/03/20 |
|Medgel Pvt. Ltd. ||Wholly ||Owned Investment Made ||4282.35 ||- ||4282.35 |
| ||Subsidiary ||Guarantee Security provided ||200.00 ||- ||200.00 |
|Natural Capsules Ltd. ||Non- Current ||Investment Made* ||0.01 ||- ||0.03 |
|Mutual Funds& SIP ||Current ||and Non- Investment Made* ||595.14 ||200.45 ||795.59 |
*The investments this year are reported as per relevant Ind-As 113.
The above stated investment and guarantees are within the limits as specified undersection 186 of the Companies Act 2013 and the company is not required to take any furtherapproval of its members. In addition to the above the Company has not given advanceagainst salary or otherwise to its employees as per the Companys policy on which nointerest was charged.
8. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
In view of the net worth profits and turnover the Company does not fall under theprovisions of the section 135 of the Companies Act 2013 and the rules made their under.Hence the obligations under section 135 of the Companies Act 2013 are not applicable tothe Company.
9. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act) and Rules made there under your company hasconstituted Internal Complaints Committees (ICC). Statement showing the number ofcomplaints filed during the financial year and the number of complaints pending as on theend of the financial year is shown as under: -
|Category ||No. of complaints pending at the beginning of F.Y. 2019-20 ||No. of complaints filed during the F.Y. 2019-20 ||No. of complaints pending as at the end of F.-Y. 2019-20 |
|Sexual Harassment ||Nil ||Nil ||Nil |
Since there is no complaint received during the year which is appreciable as themanagement of the company endeavor efforts to provide safe environment for the femaleemployees of the company. Further Internal Complaints Committee is located atadministrative unit.
10. STATEMENT FOR RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
The Company was engaged in the business of manufacturing of Hard Gelatin Capsule Shelland was associated with the normal business risk as well as the imbalance of demand-supplyof products in the Domestic and in International Market. Pharmaceutical industry hasalways been under intense scrutiny by various regulatory authorities both Indian andinternational. This trend continues resulting in regulatory standards being upgraded allthe time. Further as the members have been informed that the Board of Directors at theirmeeting held on 14" Nov. 2019 has decided to commence the business activity relatedto Real Estate and the Company is now engaged in the real estate business in India and isassociated with the normal business risk. The Companys management systems organizationalstructures processes standards and behaviors together form the system that governs howthe company conducts the business of the Company and manages associated risks. Theapproach is based on identification evaluation and mitigation of operational strategicand environmental risks disciplined risk monitoring and measurement and continuous riskassessment and mitigation measures. Other than this the Government policy local areaauthority Taxation policy fluctuations in foreign currency rates may adversely affectthe profitability of the Company subject to various process and clearance payment ofcompensations etc as may be decided by the concerning state government.
11. ADEQUACY OF INTERNAL FINANCIAL CONTROL & ITS EFFECTIVENESS.
The Board of Directors has devised systems policies and procedures/frameworks whichare currently operational within the Company for ensuring the orderly and efficientconduct of its business which includes adherence to Companys policies safeguardingassets of the Company prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation. In line with best practices the Audit Committee and the Board reviews theseinternal control systems to ensure they remain effective and are achieving their intendedpurpose. Where weaknesses if any are identified as a result of the reviews newprocedures are put in place to strengthen controls. These controls are in turn reviewed atregular intervals. Nothing has come to the attention of the Directors to indicate that anymaterial breakdown in the function of these controls procedures or systems occurredduring the year under review. There have been no significant changes in the Companysinternal financial controls during the year that have materially affected or arereasonably likely to materially affect its internal financial controls. There are inherentlimitations to the effectiveness of any system of disclosure controls and proceduresincluding the possibility of human error and the circumvention or overriding of thecontrols and procedures.
12 VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your company has a Vigil Mechanism in place which also includes a whistle blower policyin terms of the listing regulation for Directors and employees of the Company to provide amechanism which ensures adequate safeguards to employees and Directors from anyvictimization on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reports etc.The Vigil Mechanism/Whistle Blower Policy of the Company can be accessed on the Companyswebsite at the www.medicaps.com and the same is being attached with this Report asAnnexure-A. All the employees have the right/option to report their concern/grievance tothe Chairman of the Audit Committee. During the year under review no protected disclosurefrom any Whistle Blower was received by the designated officer under the Vigil Mechanism.
13 SUBSIDIARIES ASSOCIATE AND JOINT VENTURES OF THE COMPANY
The Company is continuing having Wholly Owned Subsidiary ic. Medgel Pvt. Ltd. Furtherthe Company does not have any associate or joint venture company at the beginning orclosing or any time during the year 2019-2020. There are no companies which become/ceasedto be subsidiaries during the year of your Company. Further Medgel Pvt. Ltd. is materialsubsidiary of the Company as per the thresholds laid down under the Listing Regulations.
Medgel Pvt. Ltd. is material subsidiary of the Company as per the thresholds laid downunder the Listing Regulations. The Board of Directors of the Company has approved a Policyfor determining material subsidiaries which is in line with the Listing Regulations asamended from time to time. The Policy has been uploaded on the Companys website atwww.medicaps.com.
SECRETARIAL AUDIT OF MATERIAL UNLISTED SUBSIDIARY COMPANY
Medgel Private Limited (MPL) a material subsidiary of the Company undertakesSecretarial Audit every year under Section 204 of the Companies Act 2013. The SecretarialAudit of MPL for the Financial Year 2019-20 was carried out pursuant to Section 204 of theCompanies Act 2013 and Regulation 24A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Secretarial Audit Report of MPL submitted by L.N.Joshi & Company Practicing Company Secretaries and the report does not contain anyqualification reservation or adverse remark or disclaimer.
14. CONSOLIDATED FINANCIAL STATEMENTS
Since your company is having 1 (One) wholly owned subsidiary and as per the requirementof Ind (AS) and the Companies Act 2013 the Consolidated Financial Statements is alsoprepared and annexed with the financial statements. The disclosures as required in theForm AOC-1 are attached with the Boards Report as Annexure B . In accordance with thirdproviso of section 136(1) of the Companies Act 2013 the Annual Report of the Companycontaining therein its standalone and the consolidated financial statements has beenplaced on the website of the Company www-.medicaps.com. Further as per fourth proviso ofthe said section audited annual accounts of the subsidiary company have also been placedon the website of the Company www.medicaps.com. The Consolidated Financial Statement ofthe Company is annexed as containing part of the Annual report.
15. BOARD OF DIRECTORS KMPs &THEIR BOARD MEETINGS.
a) Constitution of the Board The Board of directors are comprising of total 6 (Six)Directors which includes 3 (Three) Independent and 1 (One) Woman Director. The Chairman ofthe Board is Non-Executive Promoter Director. The Board members are highly qualified withthe varied experience in the relevant field of the business activities of the Companywhich plays significant roles for the business policy and decision making process andprovide guidance to the executive management to discharge their functions effectively.
b) Board Independence Our definition of Independence of Directors or Regulation isderived from Regulation 16(1)(b) of SEBI (LODR) Regulations 2015 and section 149(6) ofthe Companies Act 2013. The Company is having following 3 (Three) Independent Directors;
1.Dr. Shamsher Singh.
2.Mr. Pramod Fatehpuria.
3.Mr. Ashok Omprakash Agrawal.
As per provisions of the Companies Act 2013 Independent Directors were appointed fora term of 5 (five) consecutive years not liable to retire by rotation. During the yearthere is a change in the Constitution of the Board of your Company. Mr. Mahesh Kumar Patniresigned from the company w.e.f. 19" February 2020 due to his personal andunavoidable circumstances.
c) Declaration by Independent Directors All Independent Directors have given theirdeclarations that they meet the criteria of Independence as laid down under section 149(6)of the Companies Act 2013 and SEBI (LODR) Regulations 2015 (SEBI Listing Regulations) .In the opinion of the Board all the Independent Directors fulfill the criteria ofIndependency as prescribed under the Companies Act and SEBI (LODR) Regulations 2015 (SEBIListing Regulations)
d) Independent Directors seeking re-appointment at the ensuing Annual General Meeting:No independent Director is seeking reappointment at ensuing Annual General Meeting.
e) Directors liable to retire by rotation seeking re-appointment: Mr. Ramesh ChandraMittal (DIN:00035272) Non Executive Promoter Director is liable to retire by rotation atthe ensuing annual general meeting and being eligible offers himself for re-appointment.
f) Change in Director During the year there are changes in the directors of thecompany. Mrs. Manisha Garg and Mr. Mahesh Kumar Patni resigned from the Directorship ofthe Company w.e.f. 16 October 2019 and 19" February 2020 respectively due to theirpersonal reasons. Further Mrs. Kusum Mittal resigned from the office of the Whole timeDirector and continuing as the Promoter Woman Non-Executive Director in the company w.e.f.16" October 2019.
g) Key Managerial Personnel Mr. Alok K. Garg Managing Director; Mr. Hemant SethiChief Financial Officer and Ms. Ayushi Silot Company Secretary and Compliance Officer;have been categorized as the Key Managerial Personnel within the meaning of section 203 ofthe Companies Act 2013.
h) Change in the Key Managerial Personal During the year Mrs. Manisha Garg Whole-TimeDirector who was re-appointed in last AGM has resigned from the directorship of thecompany w.e.f. 16 October 2019 and Mrs. Kusum Mittal who was re-appointed in last AGMresigned from the office of the Whole Time Director w.e.f. 16 October 2019 and continuesas Promoter Woman Non Executive Director in the Company. Further Mr. Manish Kumar JainChief Financial Officer and KMP resigned from the company w.e.f. 04" Feb. 2020 andin his place Mr. Hemant Sethi was appointed as the Chief Financial Officer and KMP of thecompany w.e.f. 05" Feb. 2020.
i) Disqualifications of Directors During the year declarations were received from theDirectors of the Company pursuant to Section 164 of the Companies Act 2013. Boardappraised the same and found that none of the director is disqualified for holding officeas director.
j) Number of meetings of the Board The Board meets at regular intervals to discuss anddecide on Company/business policy and strategy apart from other Board business. Howeverin case of a special and urgent business need the Boards approval is taken by passingresolutions through circulation as permitted by law which are confirmed in thesubsequent Board Meeting. The notice of Board Meeting is given well in advance to all theDirectors. The Agenda of the Board/Committee meetings are circulated at least a week priorto the date of the meeting. The Agenda for the Board and Committee meetings includedetailed notes on the items to be discussed at the meeting to enable the Directors to takean informed decision.
During the year 2019-20 (7) Seven Board Meetings were held on 28" May 2019 30July2019 09" August 2019 16" October 2019 14 November 2019 04 February2020 and 09 March 2020.
The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013/SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The detail of Board Meetings Committee Meetings held and number of meeting attendedby each Director and members according to Secretarial Standards are given in CorporateGovernance Report annexed with this Annual Report.
16. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the nomination and remuneration committeeframed a nomination remuneration and evaluation policy which lays down the criteria foridentifying the persons who are qualified to be appointed as directors and or seniormanagement personnel of the company along with the criteria for determination ofremuneration of directors KMPs and other employees and their evaluation and includesother matters as prescribed under the provisions of section 178 of Companies Act 2013and Regulation 19 of SEBI (LODR) Regulations 2015. Policy of the Company has been given atthe website of the Company at www.medicaps.com. The details of the same are also coveredin Corporate Governance Report forming part of this annual report.)
a) Formal Annual Board Evaluation and Familiarization Programme. The Company hasdevised a Policy for performance evaluation of the Board Committees and other individualDirectors (including Independent Directors) which include criteria for performanceevaluation of Non-executive Directors and Executive Directors. The evaluation processinter alia considers attendance of Directors at Board and committee meetings acquaintancewith business communicating inter se board members effective participation domainknowledge compliance with code of conduct vision and strategy.
The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees. The report on performance evaluation of the Individual Directorswas reviewed by the Chairman of the Board and feedback was given to Directors. The detailsof program for familiarization of Independent Directors of the Company is available onyour Companys website (www.medicaps.com)
17. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofsection 134(5) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31%March 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2020 and of the loss ofthe company for that year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws andthat systems were in place and were adequate and operating effectively.
18. COMMITTEES OF THE BOARD
In accordance with the Companies Act 2013 and the SEBI (LODR) Regulations 2015 andother purposes the Board has the following Five (5) committees:
. Audit Committee
. Nomination and Remuneration Committee
. Stakeholders Relationship Commit tee aarp. Corporate Compliance Committee(Voluntarily constituted); e. Internal Complaints Committee (ICC) under the SexualHarassment of Women at the Workplace A detailed note on the Board and its committees isprovided under the Corporate Governance Report section in this report.
19. MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met once during the year as on 14" November 2019. TheMeeting was conducted in an informal manner without the presence of the Chairman theManaging Director the Non- Executive Non-Independent Directors and Key ManagerialPersonnel of the Company.
20. RELATED PARTY TRANSACTIONS
All Related Party Transactions (RPT) that entered into during the Financial Year2019-2020 were on Arms Length Basis and were in the Ordinary Course of business. Nomaterially significant RPT made by the Company with Promoters Directors Key ManagerialPersonnel or their relatives or subsidiary or any other Group concerns which may have apotential conflict with the interest of the Company at large. All RPT were approved by theAudit Committee and the Board. The RPT entered into by the company are audited. TheCompany has developed RPT policy Standard Operating Procedures for purpose ofidentification and monitoring of such transactions. The policy of RPT as approved by theBoard is available on the Companys website (www.medicaps.com). The company has done RPT inthe ordinary course of business and which are on Arms Length Basis and which are notmaterials in nature and hence the requirement of attachment of the Form AOC-2 is notapplicable on the company.
21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators which would impactthe going concern status of the Company and its future operations. However Workers/Laborsof the company has filed an application in front of the Labour Court Pithampur on dated8" J anuary 2020 against the compensation received by them from the company due toclosure of the business activities. Hon'ble Court has provided an opportunity to presentthe case before the Court but the same has not been received by the company due to whichthe Hon'ble Labor Court has issued an ex - parte decision vide their Order Dated 05"February 2020. As per the Order of the court they has given an Interim stay order to theemployees of the company due to which the company could not dispose off its Plant andMachinery to any person till further order is issued by the Court. Company filed an appealin the court and presented the case in order to provide suitable relief to the company.Further vide order dated 07" March 2020 the Court revoked the stay granted to theEx-Employees of the company.
22. AUDITORS THEIR REPORT AND COMMENTS BY THE MANAGEMENT:
A. Statutory Auditors The Board of the company takes pleasure in stating that no suchobservation has been made by the Auditors in their report which needs any furtherexplanation by the Board. The Auditors M/s. Rawka & Associates CharteredAccountants (F.R.No. 021606C) who were appointed for a term of five years at the AnnualGeneral Meeting of the Company held on 28" September 2017 shall hold the office tillthe conclusion of 39"Annual General Meeting of the Company to be held in the year2022. The Auditors Report and the Notes on financial statement for the year 2019-20referred to in the Auditors Report are self-explanatory and do not call for any furthercomments. The Auditors report is also self explanatory and does not contain anyqualification reservation or adverse remark.
B. Secretarial Audit Pursuant to the provisions of section 204 of the Companies Act2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Company has appointed M/s L.N. Joshi & Co. Company Secretaries to undertake theSecretarial Audit of the Company on 25" July 2020 due to resignation of the previoussecretarial auditors of the company (M/s Ishan Jain & Co.). The Secretarial Auditorsin their report for the year 2019-20 has confirmed the compliances by the Company ascovered in their report. The Report of the Secretarial Auditor for the year 2019-20 isannexed herewith as Anmexure C. There is no qualification reservation oradverse remark or disclaimer in Secretarial Audit report except the following:-
|Secretarial Auditor Observations ||Management comments |
|There are 3 (Three) Charges which were satisfied long back but no evidence for the satisfaction were produced before me and these charges are showing in the Index of Charges at the portal of MCA. ||The matter is very old and the company is in continuous follow up with the ROC for deletion of the charge ID however in absence of the adequate evidence for filing of the Form 17 (under the Companies Act 1956) these charges could not be removed from MCA Portal. |
|Constitution of Stakeholder Relationship Committee was not in accordance with the provisions of Regulations 20 (2A) of SEBI (Listing Obligations and disclosure Requirements) Regulations 2015 from I April 2019 to 16% October 2019. Minimum three directors required to constitute Stakeholder Relationship Committee. ||Earlier there was no provisions that minimum three directors required to constitute stake holder relationship committee however due to amendment in SEBI (LODR) Regulation 2015 with effect from 1" April 19 its became mandatory to appoint minimum three directors in committee. To comply aforesaid provisions Board has appointed Mr. Ashok Kumar Agrawal Independent Director as the member of the committee on 16 October 2019. |
|Non disclosure of Meeting of Stakeholder Relation Committee in the Corporate Governance Report submitted to stock exchange for June 19 quarter as per the provisions of Regulation 27(2) of SEBI (LODR) Regulations 2015. ||Due to clerical mistake date of stakeholder relationship committee was left however same has been mentioned in detailed corporate governance report attached with Annual Report. |
|Mrs. Kusum Mittal a Director and promoter of the company has acquired 200 Equity shares of the Company on 12" July 2019 when the trading window of the company was closed during year without any trading plan which was in non-compliance of Para 4 of Schedule B of SEBI (PIT) regulations 2015 and as per Regulation 5 of SEBI (PIT) Regulations ||Mrs. Kusum Mittal a Director and promoter of the Company has acquired 200 Equity Shares on 12th July 2019 when the trading window of the company was closed. The Audit Committee of the company examined the records and analyzed the same and Satisfied itself that there was no malafide intention of Mrs. Kusum Mittal and looking into the small amount of share quantity and no profit was earned by her she is not convicted for any further actions and no penal actions were initiated. Further an undertaking to such affect from Mrs. Kusum Mittal was obtained and she assured to the Audit Committee and the Compliance officer that no such act will be committed by her at any point of time. |
|Pursuant to Regulation 24A of SEBI (LODR) Regulations 2015 secretarial audit report of material subsidiary company was not submitted to exchange along with Annual report of the company for financial year 2018-19. ||financial year 2018-19 from Ishan Jain & Co. Practicing Company Secretary Indore and attached in Annual Report of Subsidiary Company. Further company has also uploaded the Medgel same on Private the website Limited of the has Company. already taken audit report for the |
C. Internal Auditor
The Company has appointed M/s. Praveen Shrivastava & Co. Chartered Accountant asInternal Auditor of the Company and takes their suggestions and recommendations to improveand strengthen the internal control systems. Their scope of work includes review ofoperational efficiency effectiveness of systems & processes compliances andassessing the internal control strengths in all areas. The Audit Committee reviewsadequacy and effectiveness of the Companys internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompanys risk management policies and systems.
D. Cost Auditor and Records Pursuant to section 148 of the Companies Act 2013 readwith the Companies (Cost Records and Audit) Rules 2014 amended time to time theprovision regarding Cost Audit and Records under this act was not applicable to Companyduring the year 2019-20.
23. DISCLOSURE FOR FRAUDS AGAINST THE COMPANY
There were no instances for other than reportable fraud to the Central Governmentcovered under section 134(3)(ca) of the Companies Act 2013. Further the auditors havenot found any fraud as required to be reported by them under section 143(12) to theCentral Government during the year 2019-20.
24. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Part E of Schedule V of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a separate section on Corporate GovernancePractices followed by the Company together with a certificate from the Statutory Auditorsof the Company confirming compliance with the conditions of the Corporate Governanceforms part of the Annual Report.
25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and analysis report for the year under review as stipulatedunder SEBI (LODR) Regulation 2015 is present in a separate section forming part of theAnnual Report.
26. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND 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 Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure-D.
27. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRING AFTER BALANCE SHEET DATE
There have been no material changes and commitments if any affecting the financialposition of the Company which has occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
a) COVID-19 IMPACT AFTER BALANCE SHEET DATE
In the last month of F.Y. 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing Government to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of employeesand on minimizing disruption to services ongoing. Since the Company discontinued businessoperations on 21 Nov. 2019 the Company has not faced any major impact on standalonebasis. The corporate office started operations with complete compliance of all directivesrelated to maintaining of Social Distancing and mandatory to wear face mask and haveproper sanitizations. However on consolidated basis companys growth have been impactedadversely. Thus impacting Companies profitability to a high extent.
28. EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in form MGT-9 for the year ended 31" March 2020is annexed herewith as Annexure E. Copy of the Form MGT-9 is also available on the websiteof the company www.medicaps.com.
29. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES REMUNERATION ANDPARTICULARS OF EMPLOYEES
Pursuant to provision of section 197(12) of Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and thedetails of Top 10 employees given inthe Annexure F. During the year none of the employeesreceived remuneration in excess of Rs. 102.00 Lakhs or more per annum or Rs.8.50 Lakhs permonth for the part of the year. In accordance with the provisions of Section 197 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Therefore there is no information to disclose in terms of theprovisions of the Companies Act 2013. Pursuant to Section 197(14) of the Companies Act2013 Mr. Alok K Garg Managing Director of the Company has drawn remuneration of Rs. 14.17Lacs and Mrs Manisha Garg has drawn Rs. 5.13 Lacs from wholly owned subsidiary company incapacity of Managing Director and whole time Director of Medgel Private Limitedrespectively. Apart from this no Director of the Company received any remuneration orcommission from the wholly owned subsidiary company.
30. CODE OF CONDUCT
Regulation 17(5) of the SEBI Listing Regulations 2015 requires listed companies to laydown a Code of Conduct for its Directors and senior management incorporating duties ofDirectors as laid down in the Companies Act 2013. The Company has adopted Code of Conductfor all Directors and Senior Management of the Company and the same has been hosted on thewebsite of the company (www.medicaps.com). The Code of the Conduct of the Company has beenrevised on 25" August 2020. All Directors and Senior Management personnel haveaffirmed compliance with the Code for 2019-20 except that Mrs. Kusum Mittal a Directorand promoter of the Company has acquired 200 Equity Shares on 12 July 2019 when thetrading window of the company was closed. The Audit Committee of the company examined therecords and analyzed the same and satisfied itself that there was no malafide intention ofMrs. Kusum Mittal and looking into the small amount of share quantity and no profit wasearned by her she is not convicted for any further actions and no penal actions wereinitiated. Further an undertaking to such affect from Mrs. Kusum Mittal was obtained andshe assured to the Audit Committee and the Compliance officer that no such act will becommitted by her at any point of time. A declaration to this effect signed by the Chairmanis given in this Annual Report. A certificate to that effect for the proper compliancesgiven by the Chairman is annexed as the Annexure G with this Report.
31. PREVENTION OF INSIDER TRADING
In view of the SEBI (Prohibition of Insider Trading) Regulation 2015 the Company hasadopted a Code of Conduct for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company.
The Code requires Trading Plan pre-clearance for dealing in the Companys shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed.
32. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Companys policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
The Companys assets are adequately insured against the loss of fire and other risk asconsider necessary by the Management from time to time.
34. BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 is not applicableto your Company for the financial year ending 31* March 2020.
35. DEPOSITORY SYSTEM
Your Companys shares are tradable compulsorily in electronic form and your Company hasconnectivity with both the Depositories i.e. National Securities Depository Limited (NSDL)and Central Depository Services (India) Limited (CDSL). In view of the numerous advantageoffered by the Depository System members are requested to avail of the facility ofDematerialization of the Companys shares on either of the Depositories mentioned asaforesaid.
36. INDUSTRIAL RELATIONS
Companys Industrial relations continued to be healthy cordial and harmonious duringthe period under review. Your Directors record their appreciation for all the effortssupport and co-operation of all employees extended from time to time.
37. COMPLIANCE OF SECRETARIAL STANDARD
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors and General Meetings respectively have been dulyfollowed by the Company.
Your Directors wishes to place on records its sincere appreciation and acknowledge thededication & contribution made by the employees of the Company at all levels. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers banks and other business partners for the excellent support receivedfrom them during the year. The Directors place on record their sincere appreciation to allemployees of the Company for their unstinted commitment and continued contribution to theCompany.