NUTRICIRCLE LIMITED HYDERABAD.
Your Directors are pleased to present the 27th Annual Report of theCompany together with the Audited Financial Statements for the year ended 31stMarch 2020.
1. SUMMARY OF FINANCIAL RESULTS OF THE COMPANY
| || ||(Rs.in Lakhs) |
|Particulars ||Year ended 31st March 2020 ||Year ended 31st March 2019 |
|Total Income ||- ||2401000 |
|Total Expenditure ||(4608642) ||(12827052) |
|Profit Before Interest and depreciation ||(1565096) ||(10419506) |
|Less: Depreciation ||6546 ||6546 |
|Interest ||- ||- |
|Tax ||(1228) ||(10128) |
|Net Profit/(Loss) After Tax ||(2421314) ||(10424924) |
The company successfully completed 27 years of operations this year. NutricircleLimited (Formerly Shreeyash Industries Limited) has been operating in very difficultmarkets where every retail brand has suffered hugely due to rising inflation and perchedpurchasing power in the hands of buyers.
IMPACT OF COVID-19
The country witnessed lockdown being implemented in India in the second fortnight ofMarch 2020. There were also restrictions of varying extent across larger part of theworld due to the COVID-19 pandemic. This impacted the business operations of the Companysignificantly. Since May 2020 the Company started resuming operations after takingrequisite permissions from Government authorities. By staying true to its purpose and itsvalues the top-most priority for the Company was to ensure the safety of its employees.The Company has taken several measures to ensure their well-being including leveraging thepower of technology to enable them to work from home. Standing by its core commitment theCompany is navigating through these unprecedented times by building stronger and deeperrelationships with consumers and its partners.
During the year the Company did not declare any Dividend.
TRANSFER TO RESERVES:
Your Directors do not propose to transfer any amount to Reserve.
During the financial year under review your Company has neither invited nor acceptedany deposits from the public within the meaning of Section 73 of the Act read with theCompanies (Acceptance of Deposits) Rules 2014.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 (3) read with Schedule Part V of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 with Stock Exchange in India is presented ina separate Annexure -I forming part of the Annual Report.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the year under review there was no change in the nature of business of theCompany .
The Company does not have any subsidiary or holding Company.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
During the year under review there were no material changes and commitments affectingthe financial position of the Company.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
Mr. Minto P. Gupta(DIN :00843784) has resigned from the Company that due to herpersonal reasons and other commitments will not be able to continue on the Board. HenceMr. Minto P. Gupta(DIN :00843784)has ceased to be a Executive Director on the Board of theCompany with effect from September 3 2019. The Board places on record its appreciationfor the valuable contribution and services rendered by Mr. Minto P. Gupta(DIN :00843784)during her tenure as an Executive Director. The Board places on record its appreciationfor the valuable contribution and services rendered by Mr. Minto P. Gupta(DIN :00843784)during her tenure as an Executive Director.
NUMBER OF MEETINGS OF THE BOARD:
During the year the Board met 6times during the financial year the details of whichare given in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013.
|Sr. No ||Date of Board Meetings ||No. of Directors Entitled to Attend ||No. of Directors Present |
|1 ||11-04-2019 ||5 ||5 |
|2 ||15-05-2019 ||5 ||5 |
|3 ||27-05-2019 ||5 ||5 |
|4 ||02-08-2019 ||5 ||5 |
|5 ||12-11-2019 ||4 ||4 |
|6 ||12-02-2020 ||4 ||4 |
As on the date of this Report Mr. Hitesh M. Patel Managing Director Mr. GAURAVPANKAJ SHAHNon-executive Independent Director Mr. YEZDI JAL BATLIWALA-Non-executiveIndependent Director Mr. MOHITA GUPTA-Non-executive Independent Women Director and SUNILKUMAR AGARWAL as Chief Financial Officer and Ms. DALJEET KAUR- Company Secretary are theKey Managerial Personnel of your Company in accordance with the provisions of Section2(51) read with Section 203 of the Act.
INDEPENDENT DIRECTORS DECLARATION:
The Company has received necessary declaration from each independent director underSection 149(7) of the CompaniesAct2013 that he/she meets the criteria of independencelaid down in Section149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosures Requirements) Regulations 2015.
The Independent Directors under section 149(6) of the Companies Act 2013 declaredthat:
1. They are not promoters of the Company or its holding subsidiary or associatecompany;
2. They are not related to promoters or directors in the company its holdingsubsidiary or associate company.
3. The independent Directors have /had no pecuniary relationship with company itsholding subsidiary or associate company or their promoters or directors during the twoimmediately preceding financial years or during the current financial year;
4. None of the relatives of the Independent Director has or had pecuniary relationshipor transaction with the company its holding subsidiary or associate company or theirpromoters or directors amounting to two per cent or more of its gross turnover or totalincome or fifty lakh rupees or such higher amount as may be prescribed whichever islower during the two immediately preceding financial years or during the currentfinancial year;
5. Independent Director neither himself nor any of his relatives
(i) holds or has held the position of a key managerial personnel or is or has beenemployee of the (i) holds or has held the position of a key managerial personnel or is orhas been employee of the company or its holding subsidiary or associate company in any ofthe three financial years immediately preceding the financial year in which he is proposedto be appointed;
(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of
(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten percent or more of the grossturnover of such firm;
(iii) Holds together with his relatives two percent. or more of the total voting powerof the company; or
(iv) is a Chief Executive or Director by whatever name called of any nonprofitorganization that receives twenty-five percent. or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two percent or more of the total voting power of the company;
6. Independent Director possesses such qualifications as may be directed by the Board.
7. The Company & the Independent Directors shall abide by the provisions specifiedin Schedule IV of the Companies Act 2013. Annual Evaluation of Board its Committees andIndividual Directors: The Board of Directors has carried out an annual evaluation of itsown performance Board committees and individual Directors pursuant to the provisions ofthe Sections 134 178 and Schedule IV of the Act and Regulation 17 of the SEBI LODRRegulations. The performances of the Independent Directors were evaluated by the Boardafter seeking inputs from all the directors on the effectiveness and contribution of theIndependent Directors.
The performance of the Committees were evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual Directors on the basis of the criteria such as thecontribution of the individual Director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and nonexecutivedirectors.
Familiarization Program for Independent Directors
Familiarization Programme for Independent Directors is designed with an aim to make theIndependent Directors aware about their roles responsibilities and liabilities as per theAct the SEBI LODR Regulations and other applicable laws and to get better understandingabout the Company nature of industry in which it operates and environment in which itfunctions business model long term/short term/strategic plans important changes inregulatory framework etc. As a part of familiarization programme the Company makespresentations to the Board Members inter alia business strategies management structureHR Policy and policies applicable as per the SEBI LODR Regulations.
At the time of appointing an Independent Director a formal letter of appointment isgiven to him which inter-alia explains the roles rights and responsibilities expected ofhim as an Independent Director of the Company. The relevant policies of the Companyincluding the Code of Conduct for Board Members and Senior Management Personnel and theCode of Conduct to regulate monitor and report trading by Insiders etc. are circulated tothe Directors.
PERFORMANCE OF THE BOARD AND COMMITTEES:
During the year under review the performance of the Board & Committees andIndividual Director(s) based on the below parameters was satisfactory:
(i) All Directors had attended the Board meetings;
(ii) The remunerations paid to Executive Directors are strictly as per the Company andindustry policy.
(iii) The Independent Directors only received sitting fees.
(iv) The Independent Directors contributed significantly in the Board and committeedeliberation and business and operations of the Company and subsidiaries base don theirexperience and knowledge and Independent views.
(v) The Credit Policy Loan Policy and compliances were reviewed periodically;
(vi) Risk Management Policy was implemented at all critical levels and monitored by theInternal Audit team who places report with the Board and Audit committee.
MEETING OF INDEPENDENT DIRECTORS:
Pursuant of the provision of Section 149 (8) of the Companies Act 2013 read withSchedule IV and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 the Independent Directors of the Company held their meeting on 12thFebuary 2020 reviewed the performance of non- independent directors and the Boardas a whole including the Chairperson of the Company views expressed by the executivedirectors and non-executive directors at various level and quantified the qualityquantity and timeliness of flow of information between the Company management and theBoard and expressed satisfaction.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31st March 2020 the Board consists of 4 members. The policyof the Company on directors appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under Sub section (3) of Section 178 of the Companies Act 2013 adoptedby the Board and are stated in this Board report. We affirm that the remuneration paid tothe directors is as per the terms laid out in the nomination and remuneration policy ofthe Company.
COMMITTEES OF THE BOARD:
Currently the Board has three Committees: 1) Audit Committee 2) Nomination andRemuneration Committee 3) Stakeholders Relationship Committee 4. Shares TransferCommittee
A detailed note on the Board and its Committees is provided under the CorporateGovernance Report that forms part of this Annual Report
NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP COMMITTEE:
Pursuant to the Section 178 of the Companies Act 2013 the Company has set up aNomination and Remuneration and Stakeholders Relationship Committee. A detailed note onthe composition of the Committees is provided in the corporate governance report sectionof this Annual Report.
The Key Features of the Policy of the said committee are as follows:
For Appointment of Independent Director (ID):
a. Any person who is between the age of 25 years and below 75 years eligible to becomeIndependent Director(ID);
b. He has to fulfill the requirements as per section 149 of the Companies Act 2013read with Clause 49 of the Listing Agreement;
c. Adhere to the code of conduct as per Schedule IV to the Companies Act 2013;
d. Strictly adhere to the Insider Trading Regulation of the SEBI and Insider Tradingpolicy of the Company;
e. Independent Director should have adequate knowledge and reasonably able tocontribute to the growth of the Company and stakeholders;
f. Independent Director should be able to devote time for the Board and other meetingsof the company;
g. Entitled for sitting fees and reasonable conveyance to attend the meetings; and
h. Able to review the policy participate in the meeting with all the stakeholders ofthe company at the Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the Section 134(3)(c) and Section 134 (5) of the Companies Act 2013 theBoard of Directors of the Company hereby confirm:
(i) That in the preparation of the accounts for the financial year ended 31stMarch2020 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were 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 profit and loss of the Company for the year under review;
(iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv)That the Directors have prepared the accounts for the financial year ended 31stMarch2020 on a going concern' basis.
(v) The internal financial controls are laid and have been followed by the company andthat such controls are adequate and are operating effectively. Such controls meanscontrols and policies and procedures adopted and adhered by the company for orderly andefficient conduct of the business for safeguarding assets prevention and detection offrauds and errors and maintenance of accounting records and timely preparation offinancial statements and review its efficiency.
(vi)The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
RISK MANAGEMENT POLICY:
The company has developed Risk Management Policy mainly covering the following areas ofconcerns
1. On the international currencies front volatility of exchange rate is a matter ofconcern for a Company because major sales are in the form of exports world wide besidescorresponding import sin foreign currency for key raw materials. However the riskassociated with currency fluctuation has been mitigated by effective forex managementpolicy.
2. Lack of clarity on future Government policies continues to be an area of majorconcern for the industry. The exact impact of this cannot be assessed until the proposedchanges are actually introduced and implemented.
3. In line with the overall growth objective and strengthening of infrastructure basethe Company had invested in Information Technology (IT) viz.SAP Enterprising ResourcePlanning system for leve raging its business values.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
In terms of the provisions of Section 177(9) of the Companies Act 2013 the Companyhas implemented a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any in staying true to our values of Strength Performanceand Passion and in line with our vision of being one of the most respected companies inIndia the Company is committed to the high standards of Corporate Governance andstakeholder responsibility.
A high level Committee has been constituted which looks into the complaints raised. TheCommittee reports to the Audit Committee and the Board. The Whistle Blower Policy ensuresthat strict confidentiality is maintained whilst dealing with concerns and also that nodiscrimination will be meted out to any person for a genuinely raised concern.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.
Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented toBoard.
M/s. K.V.AN.R & Associates Chartered Accountants is the Internal Auditorof the Company for the financial year 2020-21.
Pursuant 139 142 of the Companies Act 2013 and the Companies (Audit and Auditors)Rules 2014 and pursuant to the recommendation made by the Audit Committee to the Board ofDirectors M/s. O P BANG & CO Chartered Accountants having registration no. 000383Sbe and are hereby appointed as a Auditors of the Company in place of the retiring AuditorsM/s. S.K. Bang & Co. (Registration No. 000386S) Chartered Accountants who shall holdoffice from the conclusion of this 27th Annual General Meeting for a term of 5 consecutiveyears till conclusion of the 32nd Annual General Meeting to be held in the calendar year2025 and that the Board of Directors be and is hereby authorized to fix such remunerationas may be determined by the Audit Committee in consultation with the Auditors and thatsuch remuneration may be paid on a progressive billing basis in addition to reimbursementof all out-of-pocket expenses as may be incurred in connection with the audit of theaccounts of the Company.
As per Companies (Amendment) Act 2017 effective from May 07 2018 the provisionsrelating to ratification of the appointment of Statutory Auditors at every AGM is notrequired.
The Auditors have not made any qualification to the financial statement. Their reportson relevant notes on accounts are self-explanatory and do not call for any comments undersection 134 of the companies Act 2013.
SECRETARIAL AUDITORS AND THEIR REPORT:
Mr. Ramesh Chandra Mishra Company Secretary in Practice was appointed to conduct thesecretarial audit of the Company for the financial year 2019-20 as required under Section204 of the Companies Act 2013 and Rules thereunder.
The Secretarial Audit Report for F.Y. 2019-20 is Annexure-II to thisBoard's Report.
The Board has re-appointed Mr. Ramesh Chandra Mishra Company Secretary in Practice assecretarial auditor of the Company for the financial year 2020-21.
SECRETARIAL COMPLIANCE REPORT
Your Company's paid-up paid-up Equity Share Capital and Networth on last day of theprevious year i.e. on March 31 2019 are below the threshold limits mentioned in theRegulation 15(2) of the SEBI LODR Regulations. Hence the compliance w.r.t. to Regulation24A i.e. Secretarial Compliance Report is not applicable to the Company for thefinancial year under review. Cost Auditors During the financial year under reviewprovisions of Section 148 of the Act readwith Companies (Audit & Auditors)Rules 2014and other applicable provisions if any relating to the Cost Audit are not applicable tothe Company.
Details of Fraud reported by Auditors
During the financial year under review neither the Statutory Auditors nor thesecretarial auditors have reported to the Board or Audit Committee under Section 143(12)of the Act any instances of fraud committed against the Company by its officers oremployees.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOUNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013:
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows: A) CONSERVATION OFENERGY:
The Company continues its policy of encouraging energy conservation measures. Theregular review of energy consumption and the systems installed to control utilization ofenergy is undertaken.
B) RESEARCH & DEVELOPMENT ACTIVITIES & TECHNOLOGY ABSORPTION: The Company isdeveloping in-house software.
C) Foreign exchange earnings and Outgo
Details of Foreign exchange earnings and outgo for the financial year is NIL
RELATED PARTY TRANSACTIONS/CONTRACTS:
The Company has implemented a Related Party Transactions policy for the purposes ofidentification and monitoring of such transactions. The policy on related partytransactions is uploaded on the Company's website.
All related party transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained on an annual basis which isreviewed and updated on quarterly basis.
Pursuant to the Section 134(3) (h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014 there were no contract where in the related parties areinterested.
In accordance with the provisions of the Companies Act 2013 the details of relatedparty transactions are available in the Notes to the Stand alone financia statementssection of the Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Loans Guarantees and Investments covered under section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
HUMAN RESOURCES MANAGEMENT:
We take this opportunity to thank employees at all levels for their dedicated serviceand contribution made towards the growth of the company. The relationship with the workersof the Company's manufacturing units and other staff has continued to be cordial. Toensure good human resources management at the company we focus on all aspects of theemployee lifecycle. During their tenure at the Company employees are motivated throughvarious skill-development engagement and volunteering programs. In terms of Section197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 no employee(s) drawingremuneration in excess of limits set out in said rules forms part of the annual report.
EXTRACT OF ANNUAL RETURNS:
Pursuant to the Section 134(3) (a) of the Companies Act 2013 the details forming partof the extract of the Annual Return is Form MGT-9 is Annexure-III.
A Report on Corporate Governance along with a Certificate from M/s. Ramesh ChandraMishra & Associates regarding compliance with the conditions of Corporate Governanceas stipulated under Clause 49 of the Listing Agreement with Stock Exchange read with therelevant provisions of SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 forms part of this Report and Annexure-IV to this Board'sReport.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL)ACT 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act2013. The Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The Company has not received any complaint underthis policy duringthe2019-2020.
BANKAND FINANCIAL INSTITUTIONS:
Directors are thankful to their bankers for their continued support to the company.
CORPORATE SOCIAL RESPONSIBILITY:
As per the Companies Act 2013 all companies having networth of 500 crore or more orturnover of Rs.1000 crore or more or a netprofit of Rs. 5 crore or more during anyfinancial year are required to constitute aappropriate corporate social responsibility(CSR) Committee of the Board of Directors comprising there or more directors at least oneof whoman independent director and such company shall spend at least 2% of the average netprofits of the Company's three immediately preceding financial year. The Company presentlydoes not with any of the criteria stated herein above.
Directors of the company convey their sincere thanks to the Government BanksShareholders and customers for their continued support extended to the company at alltimes.
The Directors further express their deep appreciation to all employees for commendableteamwork high degree of professionalism and enthusiastic effort displayed by them duringthe year.