nutraplus india ltd Directors report

b. Operations:

The Companys total revenue is reduced to Rs. 1,06,66,81,413/- in F.Y. 2019-20 from Rs. 1,39,55,59,895/- posted in the same period last year. The Company made a loss of Rs. (47,82,61,571)/- in financial year 2019-20 as compared to profit of Rs. 2,20,30,641/- posted in financial year 2018-19. During the month of October, 2020, the Company received a notice from Maharashtra Pollution Control Board (MPCB) and pursuant to the same the factory operations were halted. This led to decline in the profits of the company during that period.

The Company had huge loans and interest payments but due to financial constraints the Company couldnt repay the loans taken from Saraswat Bank. Hence Saraswat Bank vide their letter dated February 18, 2020 sent to the Company a notice declaring the company as Non-Performing Asset (NPA) and thereafter the Company handed over the assets of the Company to Saraswat Bank.

c. Report on Performance of Subsidiaries:

The Company does not have any subsidiary company. d. Dividend:

Your Directors have not recommended any dividend for the financial year ended 31^st March, 2020 and no amount has been transferred to reserves. e. Transfer to reserves:

During the year under review, the Board of Directors has not recommended transfer of any amount to reserves. f. There was no change in the nature of business of company during F.Y. 2019-20. g. Disclosures under section 134(3)(l) of the Companies act, 2013:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and date of this report. h. Share Capital:

There was no change in the Companys Capital during the year under review.

I. DISCLOSURE OF INTERNAL FINANCIAL CONTROL:

The Internal Financial Control with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation for inefficiency or inadequacy of such controls are reported.

II. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

Full Particulars of Loans & Guarantees Given, Investments made and Securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement. (Please refer to Notes [3 and 10 of the Financial Statement.)

III.PARTICULARS OF CONTRACTS/ ARRANGEMENTS/ TRANSACTIONS WITH RELATED

PARTIES:

All contracts / arrangements / transactions, falling within the purview of Section 188 of the Companies Act, 2013, entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. None of the transactions entered into by the Company with related parties were material in nature i.e. exceeding the limit 10% of annual turnover of the Company. The particulars of contracts or arrangements with related parties are forming part of notes to Accounts in this Annual Report. All Related party transactions have been placed before the Audit Committee and subsequently before the Board for its approval. As per the policy on Materiality of and Dealing with Related Party Transactions, omnibus approval was obtained on annual basis for transactions which are of repetitive nature. The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company.

IV.MATTERS RELATED TO CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL AND

DECLARATION BY INDEPENDENT DIRECTORS:

During the financial year under review:

Directors Retiring by Rotation

Pursuant to the provisions of Section 152 of the Companies Act, 2013, no director is liable to retire by rotation.

Declaration by Independent Directors:

The Company has received and taken on record the declarations received from all the Independent Directors of the Company in accordance to Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

V. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES: A. BOARD MEETINGS:

Seven (7) meetings of Board of Directors were held during the financial year under review details of which are furnished in the Corporate Governance report forming part of Annual report.

B. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited Annual Financial Statements of the Company for the financial year ended March 31, 2020, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts for the financial year ended 31^st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2020, and of the Profit of the Company for that year.

c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company 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 and that such internal financial controls are adequate and were operating effectively.

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

C. COMMITTEES OF BOARD:

The Company has the following three (3) board level Committees which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

Details with respect to the composition, terms of reference, number of meetings held, etc. of these Committees are provided in Corporate Governance Report which forms part of the Annual Report.

D. POLICIES:

(I) Vigil Mechanism Policy:

In compliance of the requirements of section 177 of the Companies Act, 2013, Regulation 22 of Listing Regulations and as measure of good Corporate Governance practice, the Board has formulated a Vigil Mechanism Policy. The policy comprehensively provides an opportunity for employees / directors of the Company to raise issue concerning breaches, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy is adequate safeguard against victimization. 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 its Powers) Rules, 2014, framed “Vigil Mechanism Policy” for Directors and Employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, 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 to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

(II) Risk Management Policy:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses and define a structured approach to manage uncertainty and to make use of these in their decision-making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.

E. Internal Control Systems:

Adequate internal control systems commensurate with the nature of the Companys business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

VI. AUDITORS AND AUDITORS REPORTS:

a. Statutory Auditor and their report:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s Raman S. Shah & Associates, Chartered Accountants, registered with the Institute of Chartered Accountants of India (ICAI) bearing registration number 119891W, was appointed as the Statutory Auditors of the Company, from the conclusion of the twenty-Seventh Annual General Meeting (AGM) held on 29^th September, 2017 till the conclusion of the thirty second AGM of the Company, subject to the ratification of their appointment at every AGM.

Pursuant to Companies (Amendment) Act, 2017 the proviso regarding ratification of appointment of auditors in every general meeting by the members removed vide notification dated 7^th May 2018. Therefore M/s Raman S. Shah & Associates continues to hold office upto thirty second AGM. M/s Raman S. Shah & Associates has provided their respective consent, certificates and declaration as required under Section 139 and 141 of the Act and the Companies (Audit and Auditors) Rules, 2014. The Report of the Auditors on the financial statement for the year ended 31^st March 2020 contains one qualification as under: Qualification:- I. Notice is issued by Saraswat Bank dated 18th February, 2020 under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 for non-payment of principal and interest of Rs. 76.24 Crores up to 18th February, 2020, after the due date by the company and therefore all loan accounts became Non-Performing Assets effective from respective dates mentioned in such notice.

II. We draw attention regarding impact of permanent decline in respect of non-current investments (Long term investments) in Tekno Point Mercantile Private Limited (“the Party Company”) for Rs. 4.15 Crores which is shown as Current Investment (Short Term Investment). Out of the above 4.15 Crores, the management has provided for a diminution of Rs. 4 Crores, thus reducing the Investments in the Party company to Rs. 15 Lakhs. In the absence of financial statement for the year ended 31st March, 2020 of the party company, it has been observed from the perusal of the financial statements of F.Y. 2018-19, that the Party Company has accumulated losses of Rs 289.55 Lakhs for the year ended 31st March, 2019. The Party Company is under losses since a past few years. The Party Companys Independent Auditors Report, audited by the other auditor, shows qualified opinion on non-provision of losses to the extent of Rs.7.54 Crores on account of valuation of stock at cost instead of lower of Cost or market value for the year ended 31st March, 2019. As a result of this, the net worth of the Party Company has eroded significantly. These conditions, along with absence of clear indications or plans for revival, in our opinion, indicate that there is significant uncertainty and doubt about the correct Fair market value of the said investment. In our opinion, management has not adequately or sufficiently accounted for the imminent diminution, if management accounted for such diminution, the profit for the year ended 31st March 19 would have been further reduced and accordingly carrying value of investment would have also been reduced. We were unable to determine the impact on the Audited standalone financial result, of potential adjustment for provision of diminution in the value of investment made in the said party company.

III. During the year, the Company has carried out the impairment/obsolete testing exercise on the inventory and found it necessary to provide for impairment of Work in progress and intermediate products inventory. Based on the managements estimate of the fair realizable value of inventory as per Ind AS 2 an impairment provision of Rs. 25.21 Crores has been provided based on the managements best judgment and subject to technical review by a technical team of consultants. In view of uncertainty, we were unable to determine the impact on the Audited standalone financial result, of potential adjustment for impairment provision of inventory that might have been necessary in order to present the inventory at its estimated realizable value. The Saraswat bank have took over the balance stock of Rs.3.55 Crores as the bank declared the Company as Non-performing Asset and has initiated Notice u/s.13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act 2002.

IV. As per section 17(5)(h) of CGST Act, 2017, the liability to forego the Input Tax Credit (ITC) arises when the value of inventory is fully written off from the books of accounts on impairment of inventory. Taking into consideration the above point, the Company has failed to reverse the ITC to the extent of inventory written off on account of impairment. In view of uncertainty, we were unable to determine the impact on the Audited standalone financial result, of potential adjustment for reversal of ITC. The losses, in our opinion, would have substantially increased if the Company had provided for the liability of reversal of Input Tax Credit.

V. According to Ind AS-19, related to employees benefits, the company has not given any effect of gratuity liabilities as per actuarial valuation; hence the effect of gratuity expenses as per Ind AS-19 is not reported in other comprehensive income. As per information provided by the company, its operational activities are standstill since February 2020 and due to non-availability of key personnel there is no detail available for actuarial valuation.

VI. The Company has not considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of Audited standalone financial statements. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has not used internal and external sources of information including credit reports and related information and economic forecasts. Basis such uncertainties, we were unable to determine the adverse impact on its future cash flows and its ability to meet its obligations as and when they fall due. Reply to the qualification: -

Emphasis of matter

We draw attention to Note 3 of the accompanying standalone financial results, during the year under review, the Company incurred huge losses, which resulted into eradication of entire net worth, negative working capital, loss of key personnel and negative cash flow. Hence the Companys future performance is doubtful and has not been able to pay liabilities of banks, creditors. As informed to us and relied as per management view, during the financial year 2019-20, Company has written off huge stock on account of closure of plant by Pollution control Board in periodic interval for different manufacturing units, power/water disconnection due to closure notice, batch failure and COVID 19 situation has lost key personnel responsible for production and Loss of skilled workers. The Company has been facing many problems related to pollution issues and received closure notice from Maharashtra Pollution control Board since past three years in different occasions. Lastly under COVID 19 it could not produce material. Further to above, we draw attention to Note No. 3 of accompanying financial result regarding notice issued by the Saraswat Co-Operative Bank Limited under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 for non-payment of principal and interest thereon after the due date by the company and therefore all loans accounts became Non-Performing Assets effective from respective dates mentioned in such notice. These factors along-with other matters as set forth in said notice raise substantial doubt about the companys ability to continue as a going concern in the foreseeable future.

In view of the same and events stated in points I, II, III, IV, V and VI in the para above “Basis for Qualified Opinion”, indicate that a material uncertainty exists that may cast a significant doubt on the Companys ability to continue as a going concern.

Managements Responsibilities for the Standalone Financial Results

The Statement has been prepared on the basis of the standalone annual financial statements. The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net loss and other comprehensive income of the Company and other financial information in accordance with the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Statement, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process. b. Secretarial Auditor and their Report

The Board had appointed M/s. Ratish Tagde & Associates, Practicing Company Secretaries as Secretarial auditors for the financial year 2019-20. Secretarial Audit Report issued by M/s. Ratish Tagde & Associates in form MR-3 for the FY 2019-20 forms part of this report and marked as Annexure II.

VII. ANNUAL EVALUATION:

The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance. The aspects covered in the evaluation included Board Composition, Strategic orientation, Board Functioning and Team Dynamics, leadership style, contribution to and monitoring of corporate governance practices, fulfilment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The Nomination and Remuneration Committee considered and discussed the inputs received from the Directors and outcome of such evaluation process was satisfactory, which reflected the overall engagement of the Board and its Committees with the Company. Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non- Executive Directors.

VIII. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL

PERSONNEL AND EMPLOYEES:

Information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure III to this report.

IX. FRAUD REPORTING:

During the year under review, there was no material or serious instances of fraud falling within the purview of Section 143 (12) of the Companies Act, 2013 and rules made thereunder, by officers or employees, reported by the Statutory Auditors of the Company during the course of the audit conducted.

X. 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 of the Annual Return for the financial year ended 31^st March, 2020 made under the provisions of Section 92(3) of the Act is attached as Annexure IV which forms part of this Report. b. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure V which forms part of this Report. c. Corporate Governance and Management Discussion & Analysis Reports:

The Company is committed to maintain high standards of Corporate Governance and adheres to its requisites set out by the respective authorities. The report on Corporate Governance as stipulated under the Listing Regulations is annexed vide Annexure VI and forms an integral part of this Annual Report. Requisite certificate from the Auditors of the Company M/s. Raman S. Shah & Associates, Chartered Accountants, (Firm Registration Number:119891W), confirming compliance with the conditions of Corporate Governance as stipulated in Chapter IV of Listing Regulations by the Company is attached as Annexure VI(A) and forms an integral part of this Annual Report. Certificate issued by Managing Director and Chief Executive Officer of Company with regard to certification on Audited Financial Statement of the Company for financial year 2019-20 is also annexed herewith vide Annexure VI(B) and forms an integral part of this Annual Report. The Company has laid down the Code of Conduct for all Board Members and Senior Management personnel of the Company. The declaration by CEO of the Company related to the compliance of aforesaid Code of Conduct is also attached herewith vide Annexure VI(C) and forms an integral part of this Annual Report. Management Discussion and Analysis Report for the year under review, as required pursuant to the provisions of Regulation 34 read with Schedule V (B) of Listing Regulations is annexed herewith vide Annexure VII and forms part of this Annual Report. d. General Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions pertaining to these matters during F.Y. 2019-20:

a. Details relating to acceptance of deposits covered under Chapter V of the Companies Act, 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 Company under any scheme.

d. Instances with respect to voting rights not exercised directly by employees of the Company.

e. The Managing Director nor the Whole-time Directors of the Company have received any remuneration or commission from its wholly owned subsidiary Company/ subsidiary.

f. Your Directors further state that:

g. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

h. There was no change in the nature of business of company during F.Y. 2019-20.

i. Pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, no case pertaining to sexual harassment at workplace has been reported to company during F.Y. 2019-20. j. Reinstatement of the financial statements of the previous financial years.

XI. CAUTIONARY STATEMENT:

Statements in the directors and management discussion and analysis describing the companys objectives, projections, estimates, expectations or predication may be “forward-looking statements within the meaning of applicable securities laws and regulations, actual results could differ materially for those expressed or implied, important factors that could make difference to the companys operations include raw material availability and its prices, cyclical demand and pricing in the companys principle markets, changes in government regulations, tax regimes, economic developments within India and the countries in which the company conducts business and other ancillary factors.

XII. ACKNOWLEDGEMENTS AND APPRECIATION:

Place: Mumbai

Date: November 16, 2020