Your Directors have pleasure in presenting the Twenty Seventh Annual Report of theCompany together with the Audited Financial Statement for the year ended 31st March 2017.
1. FINANCIAL AND OPERATIONAL PERFORMANCE:
a. Financial Results
Financial and Operational Results of the Company for the year ended 31st March 2017 ascompared to the previous financial year is summarized below:
| || |
| ||For the Financial Year ended 31st March 2017 ||For the Financial Year ended 31st March 2016 |
|Revenue from Operations ||914191108 ||775910874 |
|Profit/(Loss) before Interest Depreciation and Tax ||(15984431) ||124486888 |
|Less: Interest ||50109040 ||48564631 |
|Profit/(Loss) before Depreciation and Tax ||(66093471) ||75922257 |
|Less: Depreciation and Amortization ||22102714 ||17163484 |
|Profit / (Loss) before Tax ||(88196185) ||58758773 |
|Exceptional Items ||- ||11875000 |
|Extra-ordinary items ||(8707500) ||196099 |
|Tax expenses ||(17017224) ||(8893094) |
|Minority interest ||- ||- |
|Profit / (Loss) after tax ||(62471458) ||79330768 |
The Company's total revenue grew to Rs. 914191108/- in F.Y. 2016-17 from Rs.775910874/- posted in the same period last year. The Company incurred loss of Rs.62471458/-in financial year 2016-17 as against profit of Rs. 79330768 posted infinancial year 2015-16.
c. Report on Performance of Subsidiaries:
A report on the performance and financial position of Purecare Pharma Limited Whollyowned subsidiary Company are provided as Annexure - I and forming part of this report.
Considering the losses in the current financial year your Directors have notrecommended any dividend for the financial year ended 31st March 2017 and no amount hasbeen transferred to reserves.
e. Transfer to reserves:
In view of loss incurred during the year under review the Board of Directors has notrecommended transfer of any amount to reserves.
F. Disclosures under section 134(3)(l) of the Companies act 2013:
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
G. Conversion of Warrants into Equity shares:
During the reporting period the Company allotted 2825000 equity shares of Rs. 5/-each on exercise of the rights attached with the Optionally Fully Convertible Warrantsissued by the Company:
However warrant holders of 645000 warrants did not exercise their right of conversionwithin 18 months from the date of allotment of warrants. Hence as per the SEBI (ICDR)2009 the said warrants have been extinguish.
H. Withdrawal of the scheme of amalgamation of Vetpharma Limited:
The Board of Directors at their meeting held on July 01 2016 has decided to withdrawthe scheme of amalgamation of Vetpharma Limited due to non viability.
I. Issuance of Bonus shares and Sub-division of Equity shares:
Pursuant to the special resolutions passed at the 26th Annual General Meeting forissue of Bonus equity shares and Sub-division of equity shares by one equity share Rs.10/- each to two equity shares of Rs. 5/- each the Company:
- allotted 1549595 Equity Shares of Rs. 10/- each as Bonus Shares in the ratio of1:10 i.e. 1 (one) bonus equity share of Rs. 10/- each for every 10 (ten) existing equityshares of Rs. 10/- each held to those Members of the Company entitled thereto as onJanuary 20 2017 being the Record Date fixed for the purpose.
- sub-dividedof its equity shares from the face value of Rs. 10/- per share to facevalue of Rs. 5/- per share. Consequently to the said sub-division the Equity shares of Rs.10/ - (Rupees Ten only) each shall stand sub divided into 2 (Two) Equity shares ofnominal value of Rs.5/- (Rupees Five only) each and shall rank pari-passu in all respectwith and carry the same rights as the exiting fully paid up Equity shares of Rs.10/-(Rupees Ten Only) each of the Company. After the said sub division the Paid up ShareCapital of the Company shall be Rs. 170455430 (Rupees Seventeen crores Four lakhs FiftyFive thousand Four hundred and Thirty) divided into 34091086 (Three crores Forty LakhsNinety One Thousand and Eighty Six) Equity Shares of Rs. 5 (Rupees Five only) each.
Accordingly the share capital of the Company was amended.
1. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.
2. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
Full Particulars of Loans & Guarantees Given Investments made and Securitiesprovided along with the purpose for which the loan or guarantee or security is proposed tobe utilized by the recipient are provided in the financial statement (Please refer toNotes [11 13 & 17] of the Financial Statement.)
3. PARTICULARS OF CONTRACTS/ ARRANGEMENTS/ TRANSACTIONS WITH RELATED PARTIES:
All contracts / arrangements / transactionsfalling within the purview of Section 188of the Companies Act 2013 entered into by the Company during the financial year withrelated parties were in the ordinary course of business and on an arm's length basis. Noneof the transactions entered into by the Company with related parties were material innature i.e. exceeding the limit 10% of annual turnover of the Company.
The particulars of contracts or arrangements with related parties are forming part ofnotes to Accounts in this Annual Report.
All Related party transactions have been placed before the Audit Committee andsubsequently before the Board for its approval. As per the policy on Materiality of andDealing with Related Party Transactionsomnibus approval was obtained on annual basis fortransactions which are of repetitive nature. The policy on related party transactions asapproved by the Board of Directors has been uploaded on the website of the Company.
4. MATTERS RELATED TO CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL AND DECLARATIONBY INDEPENDENT DIRECTORS:
During the financial year under review:
- Mr. Vinod Parab was appointment as an Independent Director with effect from 24thJune 2016;
- Mr. Kishor Ostwal was appointment as an Additional Director (Non-executive andnon-independent) of the Company with effect from 26th September 2016 and resigned fromthe post of directorship with effect from 29th May 2017;
- Mr. Swapnl Dafle Company Secretary and Compliance Officer resigned from the officewith effect from 18th October 2016;
- Mr. Narayan Pasari Independent Director resigned from the office of directorship ofthe Company with effect from 30thMarch 2017;
- Mr. Nirad Mehta was appointment as an additional director (Non-executive andIndependent) of the Company with effect from 30th March 2017 till the date of ensuingGeneral Meeting of the Company.
III. Directors Retiring by Rotation
Pursuant to the provisions of Section 152 of the Companies Act 2013 Ms. Nidhi NaikDirector will retire by rotation at the ensuing Annual General Meeting of the Company andbeing eligible have offered herself for re-appointment. In accordance with the provisionsof the Act none of the Independent Directors is liable to retire by rotation.
IV. Re-appointment of Managing Director and Whole time Director
Pursuant to provisions of Section 196197198 and 203 of the Companies Act 2013 readwith rules made thereunder and any amendment made thereof term of Mr. Mukesh NaikManaging Director and Mr. Dilip Pimple Whole-time Director is upto September 30 2017.The Board on recommendationof the Nomination and Remuneration Committee approved theirre-appointment for further period of three years commencing from October 1 2017 andaccordingly resolutions have been placed in the notice of ensuing Annual General Meetingfor seeking approval of the shareholders.
b. Declaration by Independent Directors:
The Company has received and taken on record the declarations received from all theIndependent Directors of the Company in accordance to Section 149(6) of the Companies Act2013 confirming their independence vis-a-vis the Company.
5. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES:
a. Board Meetings:
12 meetings of Board of Directors were held during the financial year under reviewdetails of which are furnished in the Corporate Governance report forming part of Annualreport.
b. Director's Responsibility Statement:
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedAnnual Financial Statements of the Company for the financial year ended March 31 2017the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31stMarch 2017 and ofthe Loss of the Company for that year;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
c. COMMITTEES OF BOARD:
As mandated under the provisions of the Companies Act 2013 and SEBI (listingObligation and Disclosure Requirements) Regulations 2015 five Committee(s) of the Boardhave been formed namely:
- Audit Committee
- Nomination and Remuneration Committee
- Stakeholders relationship Committee
- Corporate Social Responsibility Committee
- Allotment Committee
Details of Audit Committee Nomination & Remuneration Committee and Stakeholdersrelationship Committee along with their charter composition and attendance at theCommittee Meetings are provided in Corporate Governance Report which forms part of thisReport.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee is duly constituted comprising ofconsisting of three (3) Directors out of which two (2) Directors are Non - ExecutiveIndependent Directors and Independent
Director is a Chairman. The said Committee has been entrusted with the responsibilityof formulating and recommending to the Board Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company monitoring theimplementation of the framework of the CSR Policy and recommending the amount to be spenton CSR activities. The detailed report on CSR activities is attached as Annexure II tothis report.
(I) Vigil Mechanism Policy:
In compliance of the requirements of section 177 of the companies Act 2013 Regulation22 of Listing Regulationsand as measure of good Corporate Governance practice the Boardhas formulated a Vigil Mechanism Policy. The policy comprehensively provides anopportunity for employees / Directors of the Company to raise issue concerning breachesaccounting policies or any act resulting in financial or reputation loss and misuse ofoffice or suspected or actual fraud. The policy is adequate safeguard againstvictimization.
The Board of Directors of the Company has pursuant to the provisions of Section 178(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and Employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. and the same is also hosted on the website of the Company.
The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee.
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations.
(II) Risk Management Policy:
The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual/strategic business plans and in periodic management reviews.
(III) Corporate Social Responsibility Policy:
As per the provisions of Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors has constituted a CorporateSocial Responsibility (CSR) Committee as under:
- Mr. Mukesh Desai
- Mr. Prameshkumar Mehta
- Mr. Uday Desai
The Company's Corporate Social Responsibility Policy is available on the web-site ofthe Company i.e. www. nutraplusindia.com.
The Company during financial year spent Rs.5 Lakhs towards Corporate SocialResponsibility activities during the year under review which is provided in Annexure IIto this report.
g. Internal Control Systems:
Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.
6. AUDITORS AND REPORTS:
a. Statutory Auditors:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules madethereunder the term of office of M/s. AMPAC & Associates Chartered AccountantsMumbai (Firm Registration Number: 112236W)of the Company will conclude from the close ofensuing Annual General Meeting of the Company. The Board of Directors places on record itsappreciation for the services rendered by M/s. AMPAC & Associates CharteredAccountants as the Statutory Auditors of the Company.
Further subject to the approval of the Membersof the Company andpursuant to Section139 of the Companies Act 2013 the Board of Directors of the Company has recommended theappointment of M/s. Raman S. Shah & Associates Chartered Accountants (ICAI FirmRegistration Number: 119891W) as the Statutory Auditors of the Company. Accordingly theBoard recommends the resolution in relation to appointment of Statutory Auditors for theapproval by the shareholders of the Company.
The Report of the Auditors on the financial statement for the year ended 31st March2017 does not contain any qualification.
b. Secretarial Audit Report for the year ended 31stMarch 2017
The Board had appointed M/s. Rathi& Associates Company Secretaries as Secretarialauditors for the financial year 2016-17. Secretarial Audit Report issued by M/s. Rathi& Associates in form MR-3 for the FY 2016-17 forms part of this report and marked asAnnexure III.
Management Representations to the qualifications in the Secretarial Audit Report:
- Vacancy of KMP: The Company Secretary resigned w.e.f. 18th October 2016. The Companyhas taken steps to fill the said vacancy and expects to appoint a suitable person in nearfuture.
- Delay in filing intimations under SEBI (LODR) Regulations 2015: it were purelyinadvertent and necessary steps have been taken to adhere to the time stipulated under thesaid Regulations with respect to filing with the Stock Exchange from time to time.
- Cost Records: Due to breakout of major fire at the factory in October 2015 theentire cost records maintained at the said location have been lost. Hence necessary stepshave been taken to revive the data.
- Implementation of Bonus Issue: Due to Pendency of approval for listing of equityshares allotted on conversion of warrants the company could not undertake the actions forissue and allotment of bonus shares.
- Minutes of Audit Committee: Company is under process for the same.
- Consolidation of Accounts: As per Accounting Standard - 21 consolidation ofFinancial Statements in not required if the subsidiary is not material.
c. Cost Auditors:
Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/Circulars issued by the Ministry of Corporate Affairs from time to time asper the recommendation of the Audit Committee the Board of Directors at their meetingheld on 14th August 2017 appointed M/s. Darshan Vora& Co. Cost Accountants as theCost Auditors of the Company for the financial year 2017-18 at Annual Audit Fee ofRs.75000/ subject to approval of the shareholder in ensuing Annual General Meeting.
d. Internal Audit and Control:
Mr. Chirag Mehta Internal Auditors of the Company has carried out internal audit andthe findings of the Internal Auditors in their reports are discussed regularly in themeetings of the Audit Committee and corrective actions are taken as per the directions ofthe Audit Committee members.
7. ANNUAL EVALUATION:
The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance.
The aspects covered in the evaluation included Board Composition Strategicorientation Board Functioning and Team Dynamics leadership style contribution to andmonitoring of corporate governance practices fulfilment of Directors' obligations andfiduciary responsibilities including but not limited to active participation at theBoard and Committee meetings.
The Nomination and Remuneration Committee considered and discussed the inputs receivedfrom the Directors and outcome of such evaluation process was satisfactory whichreflected the overall engagement of the Board and its Committees with the Company.
Further the Independent Directors at their meeting reviewed the performance of BoardChairman of the Board and of Non- Executive Directors.
8. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL ANDEMPLOYEES:
Information required pursuant to Section 197 (12) of the Companies Act 2013 read withRule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided as Annexure IV to this report.
9. FRAUD REPORTING:
During the year under review there were no material or serious instances of fraudfalling within the purview of Section 143 (12) of the Companies Act 2013 and rules madethereunder by officers or employees reported by the Statutory Auditors of the Companyduring the course of the audit conducted.
10. OTHER DISCLOSURES:
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. Extract of Annual Return:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2017 made under the provisionsof Section 92(3) of the Act is attached as Annexure V whichforms part of this Report.
b. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure VI whichforms part of this Report.
c. Corporate Governance and Management Discussion & Analysis Reports:
The Company is committed to maintain the high standards of Corporate Governance andadheres to its requisites set out by the respective authorities. The report on CorporateGovernance as stipulated under the Listing Regulationsis annexed vide Annexure VII andforms an integral part of this Annual Report.
Requisite certificate from the Auditors of the Company AMPAC & AssociatesChartered Accountants(Firm Registration Number: 112236W) confirming compliance with theconditions of Corporate Governance as stipulated in Chapter IV of Listing Regulationsbythe Company is attached as Annexure VII(A) and forms an integral part of this AnnualReport.
Certificate issued by Managing Director and Executive Director of Company with regardto certification on Audited Financial Statement of the Company for financial year 2016-17is also annexed herewith vide Annexure VII(B) and forms an integral part of this AnnualReport.
The Company has laid down the Code of Conduct for all Board Members and SeniorManagement personnel of the Company. The declaration by CEO i.e. Managing Director of theCompany related to the compliance of aforesaid Code of Conduct is also attached herewithvide Annexure VII(C) and forms an integral part of this Annual Report.
Management Discussion and Analysis Report for the year under review as requiredpursuant to the provisions of Regulation 34 read with Schedule V (B) of ListingRegulationsis annexed herewith vide Annexure VIII and forms part of this Annual Report.
d. General Disclosures:
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions pertaining to these matters during F.Y.2016-17:
a. Details relating to acceptance of deposits covered under Chapter V of the CompaniesAct 2013.
b. Issue of equity shares with differential rights as to dividend voting or otherwise.
c. Issue of shares (including sweat equity shares and ESOS) to employees of the Companyunder any scheme.
d. Instances with respect to voting rights not exercised directly by employees of theCompany.
e. Revision of the financial statements of the previous financial years.
Your Directors further state that:
a. Neither the Managing Director nor the Whole-time Directors of the Company havereceived any remuneration or commission from its wholly owned subsidiary Company.
b. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
d. There was no change in the nature of business of company during F.Y. 2016-17.
e. Pursuant to the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 no case pertaining to sexual harassment at workplacehas been reported to company during F.Y. 2016-17.
11. CAUTIONARY STATEMENT:
Statements in the directors' and management discussion and analysis describing thecompany's objectives projections estimates expectations or predication may be"forward-looking statements' within the meaning of applicable securities laws andregulations actual results could differ materially for those expressed or impliedimportant factors that could make difference to the company's operations include rawmaterial availability and its prices cyclical demand and pricing in the company'sprinciple markets changes in government regulations tax regimes economic developmentswithin India and the countries in which the company conducts business and other ancillaryfactors.
12. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.
Your Directors records with sincere appreciation the valuable contribution made byemployees at all levels and looks forward to their continued commitment to achieve furthergrowth and take up more challenges that the Company has set for the future.
| || |
For and on behalf of the Board of Directors
|Place : Mumbai Date : August 14 2017 ||Uday Desai |
|Mukesh Naik |
Chairman& ManagingDirector DIN:00412896