Nectar Lifescience Ltd.
|BSE: 532649||Sector: Health care|
|NSE: NECLIFE||ISIN Code: INE023H01027|
|BSE 00:00 | 22 Oct||27.85||
|NSE 00:00 | 22 Oct||27.90||
|Mkt Cap.(Rs cr)||625|
|Mkt Cap.(Rs cr)||624.68|
Nectar Lifescience Ltd. (NECLIFE) - Director Report
Company director report
Your Directors have pleasure in presenting the 25th Annual Reporttogether with the audited Financial Statements of Nectar Lifesciences Limited(NLL' or Neclife' or Nectar' or the Company')for the financial year ended March 31 2020.
The company's revenue during Financial Year (FY')2019-20 stood at INR 2639/- Crores against 3115/- Crores in the previous year recording adecline of 15%. This decline is purely on account of Menthol division due to adverseMarket Conditions and impact of Covid19. Pharma business has had a growth of 3%approximately in spite of Covid19 challenges and impact in Q3 & Q4.
Finance cost decreased by 15% in this financial year to Rs 126 Crores.The Profit after Tax has decreased by 37% as compared to last year due to high input costsand adverse effect of Covid19 pandemic. The financial 30 2020 will be made available onthe website of the company (URL: www.neclife.com).
Indian Accounting Standards (IndAS) and Secretarial Standards
The company has adopted Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Companies Act 2013 read with the relevant rules issued thereunder and accordingly standalone and consolidated audited financial statements have beenprepared in accordance with the recognition and measurement principles laid down in Ind ASand the other accounting principles generally accepted in India.
The Company is in Compliance of Secretarial Standards as issued byInstitute of Company Secretaries of India.
Management Discussion and Analysis Report
The details of the Company's various operations and state ofaffairs and nature of business are discussed under Management Discussion and AnalysisReport. The Management Discussion and Analysis of financial condition and result ofoperations of the Company for the year under review as required under Securities &Exchange Board of India (SEBI') (Listing Obligations and DisclosureRequirements) Regulations 2015 ("LODR Regulations") is given as Annexure 1 andforms and part of this report. Any disclosure not given in this report and its annexuresbut disclosed in Annexure 1 shall be deemed to be reported in this report and vice versa.
The Company aimed to conduct its affairs in an ethical manner. Aseparate Report on Corporate Governance is given as Annexure 2 and forms and part of thisreport. A certificate from the Company's Auditors regarding the Compliance ofConditions of Corporate Governance as stipulated under LODR Regulations is given inAnnexure 3. Any disclosure not given in this report and its annexures but disclosed inAnnexure 2 shall be deemed to be reported in this report and vice versa.
Business Responsibility (BR') Statement
It is first time the BR report is applicable to company as SEBI theambit of BR to top 1000 listed entities based on market capitalization by notificationdated December 26 2019. The BR Report as required under LODR Regulations is given asAnnexure 10.
The paid up equity share capital as on March 31 2020 was INR 224.26Millions. There was no public issue rights issue bonus issue or preferential issue etc.during the financial year. The not issued shares with differential voting rights sweatequity shares nor has it granted any stock options.
Global Depository Receipts (GDRs)
The Company has 46000000 equity shares of INR 1/- each underlying46000000 Global Depository Receipts (GDRs). The GDRs are listed on:
Luxembourg Stock Exchange/ LuxSE
Socit de la Bourse de Luxembourg S.A. B.P. 165 L-2011 LuxembourgSige social 11 av de la Porte-Neuve
Telephone: (352) 47 79 36 1 Fax: (352) 47 32 98
Subsidiary companies resultsofthecompanyforthequarter endedonJuneThe company has wholly owned subsidiaries (WOS) namely Nectar Lifesciences UK Limitedincorporated in United Kingdom NECLIFE PT UNIPESSOAL LDA incorporated in Portugal andNectar Lifesciences US LLC incorporated in United States. There are negligibleinvestments in Nectar Lifesciences UK Limited and NECLIFE PT UNIPESSOAL LDA and nobusiness activity has been carried out in them in financial year 2019-20 and till date infinancial year 2020-21. Therefore nothing is to report on the performance and financialposition ofNectar Lifesciences UK Limited and NECLIFE PT UNIPESSOAL LDA. Due touncertainty of Brexit the company left with no choice but to shift its European Union(EU) incorporation & market authorization (MA) from United Kingdom (UK) to EU.Therefore the company has incorporated a WOS namely NECLIFE PT UNIPESSOAL LDA inPortugal on July 11 2019 to takeover MA from Nectar Lifesciences
UK Limited which will eventually be dissolved. However this shiftwill not have any impact on the business of the company.
However the Nectar Lifesciences US LLC doing the business operationsof trading of pharmaceutical products. The company gained the profit of US$ 69470.98during the year under review as compared to profit of US$ 86187.60 during last year.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013(hereinafter referred as Act') a statement containing salient features offinancial statements of subsidiaries associates and joint venture companies in Form AOC-1is attached to the Financial
Statements. The separate financial statements in respect of each of thesubsidiary companies shall be kept open for inspection at the Registered Office of theCompany during working hours for a period of 21 days before the date of the Annual GeneralMeeting (AGM). Your
Company will also make available these documents upon request by anyMember of the Company interested in obtaining the same. The separate audited/ unauditedfinancial statements in respect of each of the subsidiary companies are also available onthe website of your Company at www.neclife.com.
None of the subsidiaries is material as per Policy for determiningMaterial Subsidiaries of the Company and LODR Regulations.
Consolidated financial Statements
As required under Section 129 of the Act and LODR Regulations aconsolidated financial statements for the year ended on March 31 2020 of the Company areattached.
Your Directors are pleased to recommend a Final Dividend @ 5% i.e. Re.0.05/- per equity shares of face value of Re. 1/- each aggregating to INR 11213048.50for the year ended March 31 2020.
The final dividend subject to the approval by the shareholders in theforthcoming Annual General Meeting and if declared will be paid on or after September 262020 to those members whose names appears in the register of members as on date of bookclosure. The register of members and the share transfer books of the Company will remainclosed from September 15 2020 to September 21 2020 (Both days inclusive) for AGM andpayment of dividend if declared on equity shares.
The members may please refer to notes of Notice of AGM for informationon shares/dividend transferred / proposed to be transferred to IEPF Authority.
The Board of Directors of your company has decided not to transfer anyamount to the Reserves for the year under review.
Directors and Key Managerial Persons
Mr. Sanjiv Goyal (DIN 00002841) Director will retire byrotation in the forthcoming AGM and being eligible offer himself for reappointment.
The Board recommends his reappointment as a Director.
The designation of Dr. Dinesh Dua has been changed from Chief ExecutiveOfficer & Director (CEO)' to Executive Director (ED') witheffect from June 1 2020.
This change from CEO to ED was for internal administrative purposesonly. Consequently there was not any change in his statutory designation of WholetimeDirector which is be continuing as it is. Dr. Dinesh Dua has been re-appointed asWholetime Director designated as Executive Director by the Board of Directors in theirmeeting held on July 29 2020 w.e.f. October 14 2020 for a period of One year. Based onrecommendation of Nomination and Remuneration Committee the Board recommends hisreappointment as a Wholetime Director.
The first term of Ms. Guljit Sethi (DIN 00669460) Independent Directorwill expire on December 28 2020. Based on recommendation of Nomination and RemunerationCommittee the Board of Directors has proposed to re-appoint her as an IndependentDirector for the 2nd term for a period of 5 years. Pursuant to the provisions of Sections149 152 and other applicable provisions of the Act and LODR Regulations approval of themembers by way of a special resolution is required for reappointment of IndependentDirectors for the second term. The Board recommends the special resolutions forre-appointing her for the second term for a period upto December 28 2025.
As on the date of this report the company has right proportionate ofIndependent Directors viz a viz Non-Independent Directors as per applicable provisions ofSection 149 of the Act and LODR Regulations. The Company has received declarations fromall the Independent
Directors of the Company confirming that
1. They meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Act and under LODR Regulations.
2. They have submitted a declaration of compliance of sub-rule (1) andsub-rule (2) of Rule 6 of Companies (Appointment and Qualifications of Directors) Rules2014. Your Directors do hereby confirm that in the opinion of the board the independentdirectors fulfill the conditions specified in the LODR Regulations and are independent ofthe management.
Pursuant to the provisions of Section 203 of the Act the keymanagerial personnel of the Company as on March 31 2020 were as under: Mr. Sanjiv GoyalChairman & Managing Director Dr. Dinesh Dua Wholetime Director designated as ChiefExecutive Officer & Director Mr. Sandeep Goel Chief Financial Ms. Sukriti SainiCompany Secretary
Number of meetings of the board
Five (5) meetings of the board were held during the year. The detailsof Directors and meeting held during the financial year 2019-20 are provided in CorporateGovernance Report which forms and part of this report.
Directors' responsibility statement
The Directors confirm that:
they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profits of the Company for that period; they havetaken proper and adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
they have prepared the annual accounts on a going concern basis;
they have laid down internal financial controls for theCompany and such internal financial controls are adequate and operating effectively; and
they have devised proper systems to ensure compliance withthe provisions of all applicable laws and such systems are adequate and operatingeffectively.
Pursuant to the provisions of the Act and the corporate governancerequirements as prescribed by LODR Regulations the performance of the Board andcommittees was evaluated by the Board after seeking inputs from all the directors/committee members on the basis of the criteria such as the Board/ committee compositionand structure effectiveness of board processes information and functioning etc.
The Board and the Nomination and Remuneration Committee("NRC") reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the
Board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role. The performanceevaluation forms of each of director get filled from all directors.
In a separate meeting of independent Directors performance ofnon-independent directors performance of the board as a whole and performance of theChairman was evaluated.
Policy on directors' appointment and remuneration and otherdetails
The Company's policy on directors' appointment andremuneration and other matters namely Nomination Remuneration and Evaluation Policy asprovided in Section 178(3) of the Act has been uploaded on the website of the company athttps://neclife.com/uploads/1549887491137395438.pdf
Committees of the Board
The Company constituted the Committees as per the provisions ofSections 177 and 178 of the Act and LODR Regulations. The composition powers and dutiesof the Committees during financial year 2019-20 are detailed out in the CorporateGovernance Report which forms and part of this report. The Board of Directors accepted allrecommendations of the Audit Committee.
Internal financial control systems and their adequacy
The company has adequate financial controls. The details in respect ofinternal financial control and their adequacy are included in the Management Discussion& Analysis which forms part of this report.
Auditors and Auditors' Report
M/s Ashwani K. Gupta & Associates Chartered Accountants (ICAIRegistration No. 003803N) were appointed as Statutory Auditors of your Company at theAnnual General Meeting held on September 28 2017 for a term of five consecutive years. Inaccordance with the Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting. The Report given by the Auditors on thefinancial statements of the Company is part of the Annual Report. There has been noqualification reservation adverse remark or disclaimer given by the Auditors in theirReport.
Secretarial Auditor and Secretarial Audit Report
During the year Secretarial Audit was carried out by Mr. Prince Chadhaof P. Chadha & Associates Practicing Company Secretary the Secretarial Auditor ofthe company for the Financial Year 2019-20.
There were no qualifications reservation or adverse remarks given bySecretarial Auditors of the Company. The Secretarial Audit Report is appended as anAnnexure 4 to this report.
The Company has undertaken an audit for the financial year 2019-20 forall applicable compliances as per Securities and Exchange Board of India Regulations andCirculars/Guidelines issued thereunder. The Annual Secretarial Compliance Report has beensubmitted to the stock exchanges within 60 days of the end of the financial year.
Cost Records and Audit
The Company is required to maintain cost records as specified by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 andaccordingly such accounts and records are made and maintained.
The company has appointed Dr. Vimal Kumar (Membership No. 9982) prop.of M/s V. Kumar and Associates SCF 13 GF VIP Galleria
Market VIP Road Zirakpur SAS Nagar (Mohali) Punjab-140603 Cost andWorks Accountants as the Cost Auditors of the Company for the financial year 2020-21.
The Cost Audit Report for the financial year 2018-19 has been filed onJanuary 04 2020 within extended time as the last date for filing of Cost Audit Report wasextended to February 29 2020 by ministry of
Corporate Affairs vide circular dated December 30 2019 The CostAuditor shall forward the Cost Audit Report for the financial year 2019-20 by September30 2020. The report will be filed with Ministry of Corporate Affairs within 30 days ofdate of Cost Audit Report.
The development and implementation of risk management policy has beencovered in the management discussion and analysis which forms part of this report.
Though not mandatory the Company has constituted a Risk ManagementCommittee with Dr. Dinesh Dua as the Chairman and Mr. Harparkash Singh as a member tointer-alia:
to formulate and recommend to the Board a Risk ManagementPolicy which shall indicate the activities such as identification of risks and mitigationstrategy thereof; to recommend the Board about risk assessment andminimization procedures ; and
monitoring and reviewing of the risk management plan to theBoard.
The audit committee has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.
Particulars of loans guarantees and investments
The company has not given any loan or provide guarantee as per Section186 of the Act however the amount receivable from subsidiaries and the investments undersection 186 of the Act are given in the Financial Statements forming part of the AnnualReport.
Transactions with related parties
Information on transactions with related parties pursuant to Section134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Annexure 5 in Form AOC-2 and the same forms part of this report. Further details aboutthese transactions are provided in Report on Corporate Governance.
Corporate social responsibility
The brief outline of the Corporate Social Responsibility (CSR) Policyof the Company and the initiatives undertaken by the Company on CSR activities during theyear are set out in Annexure 6 of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The policy is available on thewebsite of the Company.
Annual Return and Extract of annual return
As provided under Section 92(3) of the Act the extract of annualreturn is given in Annexure 7 in the prescribed Form MGT-9 which forms part of thisreport. The MGT-9 (Extract of Annual Return) and MGT-7 (Annual Return) are also availableon the website of the company at https://neclife.com/uploads/15963690011780498275.pdf andhttps://neclife.com/uploads/15971316161453075935.pdf respectively.
The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is attached as Annexure 8. and In terms of first Accounts are being sent to the Membersand others entitled thereto excluding the information on employees' particulars asrequired pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The said information is available forinspection by the Members at the Registered Office of the Company during business hoursworking days of the Company up to the date of the ensuing AGM. If any Member is interestedin obtaining a copy thereof such Member may write to the Company Secretary in thisregard.
During the year under Report your Company did not accept any depositsfrom the public in terms the provisions of Companies Act 2013.
As per LODR Regulations corporate governance report withauditors' certificate thereon and management discussion analysis are attached whichform part of this report.
Details of the familiarization programme of the independentdirectors are available on the website of the Company (URL: www.neclife.com).
Policy for determining material subsidiaries of the Companyis available on the website of the Company (URL: www.neclife.com).
Policy on dealing with related party transactions isavailable on the website of the Company (URL: www.neclife.com).
The Whistle Blower Policy to provide Vigil Mechanism foremployees including directors is available on the website of the Company (URL:www.neclife.com).
Committee and Policy against Sexual Harassment at Workplace
The company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
The company has made the Anti Sexual Harassment Policy under abovereferred Act for all individuals working for Nectar at all levels and grades includingsenior executives officers employees (whether permanent fixed-term or temporary)consultants contractors trainees staff casual workers interns. As per policy anyaggrieved woman employee who feels and is being sexually harassed directly or indirectlymay make a complaint of the alleged incident to any member of the Committee constitutedfor this purpose.
Disclosures in relation to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013:
a. number of complaints pending as on April 01 2019 - NIL
b. number of complaints filed during the financial year 2019-20 - NIL
c. number of complaints disposed of during the financial year
d. number of complaints pending as on March 31 2020 - NIL
Energy technology and foreign exchange
The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under theAct are provided in Annexure 9 to this Report.
Your Directors would like to express their sincere and gratefulappreciation for the assistance and cooperation received from bankers and governmentauthorities and also thank the shareholders for the confidence reposed by them in theCompany and looking forward to their valuable support in the future plans of the Company.
Your Directors also thank its agents the medical professionals and itscustomers for their continued patronage to the Company's products.