Dear Shareholders,
Your directors have pleasure in presenting the 37th Annual Report of the business and
operations along with the Audited Financial Statements of the Company for the financial
year ended on March 31, 2023.
FINANCIAL RESULTS
The Financial performance of the Company for the year ended March 31, 2023 is
summarized below :
(Rs. In Lacs)
|
Standalone |
Consolidated* |
Particulars |
Year ending 31-03-2023 |
Year ending 31-03-2022 |
Year ending 31-03-2023 |
Total Revenue |
42281.25 |
42125.91 |
42281.25 |
Profit/(Loss) after exceptional/ extraordinary item |
2603.67 |
(1960.22) |
2603.67 |
Interest |
5976.16 |
5715.88 |
5976.16 |
Depreciation |
2866.78 |
3207.31 |
2866.78 |
Provision for deferred tax |
0 |
0 |
0 |
Total Comprehensive Income |
1567.61 |
(2510.29) |
1567.61 |
Net Profit (Loss) (after exceptional/ extraordinary item & tax) |
2603.67 |
(2002.01) |
2603.67 |
Balance c/f to balance sheet |
2603.67 |
(2002.01) |
2603.67 |
*Notes-
1. The company's wholly owned subsidiary, Indswift India limited was set up in Kenya in
the month of May 2022 and is yet to commence business operations.
REVIEW OF BUSINESS OPERATIONS
During the Financial Year 2022-23, your company earned total revenue of Rs. 42281.25
lacs against Rs. 42125.91 lacs during financial year 2021-22. The export turnover of the
Company in the Financial Year 2022-23 was Rs. 28266.25 lacs as compared to Rs. 29319.05
lacs in the previous financial year. The Company incurred Net Profit of Rs. 2603.67 lacs
during FY 2022-23 against losses of Rs. 1960.22 lacs in FY 202122. During the year, your
Company earned an EBIDTA of Rs. 51.13 Crores as compared to Rs. 59.32 Crores in the
previous financial year.There has been no change in the nature of business of the Company
during the year under review.
The debt of Rs. 90.78 crores of Bank of India was assigned to the Edelweiss Asset
Reconstruction Company Limited at a settled amount of Rs. 30.20 crores on 29th
June, 2021. During the year, after receiving written confirmation from Edelweiss Asset
Reconstruction Company Limited, a waiver of Rs. 60.58 crores (Principal & Interest)
has been recognized as income in the accounts of the company as per the applicable
Accounting Standards to reflect the true debt position of the company.
CONSOLIDATED FINANCIAL PERFORMANCE
During Financial Year 2022-23, your company had set up a wholly owned subsidiary i.e.,
Ind swift India Limited in the Republic of Kenya to facilitate the promotion of the
Company's products in Kenya. However, the wholly owned subsidiary is yet to commence
commercial operations.
The company earned a consolidated total revenue of Rs. 42281.25 lacs during the
Financial Year ended March 31, 2023.The Company incurred a consolidated Net Profit of Rs.
2603.67 Lacs during FY 2022-23. During the year, the consolidated EBIDTA earned by the
company was of Rs. 51.13 crores. As required under the provisions of the Companies Act,
2013 and SEBI Listing Regulations, 2015 the Audited Consolidated Financial Statements form
part of the Annual Report and the same are annexed to this report.
INDIAN ACCOUNTING STANDARDS:
The financial statements for the year ended on March 31, 2023 has been prepared in
accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian
Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards)
Amendment Rules, 2016 notified under section 133 of Companies Act, 2013 and other relevant
provisions of the Act. The estimates and judgments relating to the Financial Statements
are made on a prudent basis, to reflect in a true and fair manner, the form and substance
of transactions and reasonably present the Company's state-of-affairs, profits and cash
flows for the year ended March 31, 2023.
The Notes to the Financial Statements adequately covers the Audited Statements and form
an integral part of this Report.
STATE OF AFFAIRS OF THE COMPANY
The state-of-affairs of the Company is presented as part of the Management Discussion
& Analysis Report in a separate section forming part of this report, as required under
the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.
OUTLOOK
The main business of your Company is manufacturing Pharmaceutical Products. Presently,
our presence is both in the domestic and export markets. In view of the scenario described
in the management discussion and analysis report,your Company is expected to grow with
wide range of products and manufacturing expertise barring unforeseen circumstances.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Appointment/Re-appointment:
During the Financial Year 2022-23 the Board appointed Ms. Ginny Uppal, a member of the
Institute of Company Secretaries of India (ICSI), as the Company Secretary &
Compliance Officer of the company w.e.f. 30th May, 2022.
Further, during the Financial Year 2022-23the Board of Directors of the Company had
appointed Sh. Bhupinder Singh, as an Independent Director of the Company, subject to
approval of the shareholders in the ensuing Annual General Meeting, for a period of 5
consecutive years w.e.f. 23rd June, 2022. His appointment as an Independent
Director up to 22nd June, 2027 was approved by the members in their meeting held on 21st
September, 2022.
The Board of Directors on the recommendation of the Nomination and Remuneration
Committee, recommend the re-appointment of the following directors of the company for a
term of three years subject to the approval of the members in the ensuing Annual General
Meeting -
1. Dr. Gopal Munjal (DIN: 00005196) as the Managing Director & CEO (Executive
Director) w.e.f. 1st April, 2024.
2. Dr. V.R. Mehta (DIN: 00010756) as the Joint Managing Director (Executive
Director)w.e.f. 1st April, 2024
3. Sh. S.R. Mehta (DIN: 00005668) as a Whole time Director, designated as Chairman
w.e.f 1st April, 2024
The relevant resolutions form part of the notice of the 37th Annual General
meeting.
Retirement by Rotation:
Pursuant to the provisions of Section 152(6) of the Act, Sh. Navrattan Munjal (DIN
00015096) and Sh. Himanshu Jain (DIN 00014533) Directors will retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
The Board recommends their re-appointment.
Brief resume, nature of expertise in specific functional are as, disclosure of
relationships between director sinter-se, details of directorship held in other companies,
membership of committees of the Board, shareholding in the Company held by the directors
proposed to be appointed/re-appointed at the 37th AGM, is provided in the
Notice of the AGM.
The Board presently consists of Sh. S.R. Mehta- Chairman, Dr. Gopal Munjal- Managing
Director & CEO, Dr. V.R. Mehta- Joint Managing Director, Sh. Navrattan Munjal-
Non-Executive Director, Sh. Himanshu Jain- Non-Executive Director,Sh. Rishav Mehta -
Non-Executive Director, Sh. S. P Sharma - Independent Director, Dr. V.K. Arora -
Independent Director, Sh. Bhupinder Singh - Independent Director, Sh. Jagvir Singh
Ahluwalia - Independent Director, Sh. S.C. Galhotra - Independent Director and Ms. Anoop
Michra - Independent Women Director. The Chairman of the Company is an Executive Promoter
Director.
The Company has received necessary declaration from all the Independent Directors under
Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of
independence as laid down in Section 149(6) of the Companies Act, 2013 and the Listing
Regulations. Further, in the opinion of the Board, the independent Directors also possess
the attributes of integrity, expertise and experience as required to be disclosed under
Rule 8 (5) (iiia) of the Companies (Accounts) Rules, 2014. The Company has also received
from them,a declaration of compliance of Rule 6(1) & (2) that they have registered
themselves with databank of Independent Directors as maintained by Indian Institute of
Corporate Affairs.
In April 2019, the Registrar of Companies, Chandigarh had disqualified Dr. Gopal
Munjal, Sh. S. R. Mehta and Dr. V. R. Mehta, Directors under Section 164(2)(b) of the
Companies Act, 2013, likely due to the disposal of Company's appeal of restructuring of
fixed deposits, by the Hon'ble NCLAT, New Delhi. The Company has not received any
intimation or notice from the ROC regarding such disqualification. Since there was no
default as to the payment of fixed deposit as on 31st March, 2019 so, the
Company had submitted a representation in this regard with the office of the ROC, however
the same is still pending for a decision.
Details and brief resume of the Directors seeking reappointment/ appointments required
by Regulation 26(4) and 36(3) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and as
required under Secretarial Standards - 2 on General Meetings issued by "The Institute
of Company Secretaries of India" are furnished in the Notice convening the Annual
General Meeting forming part of the Annual Report.
a) Key Managerial Personnel
Sh. S.R. Mehta, Whole Time Director designated as Chairman, Dr. Gopal Munjal, Managing
Director and CEO, Dr. VR. Mehta, Joint Managing Director, Sh. Arun Seth, Chief Financial
Officer, Ms. Ginny Uppal Company Secretary are the Key Managerial Personnel of the
Company.
b) Continuation of Non-Executive Directors of more than 75 years of Age
Pursuant to Regulation 17 (1A) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended vide SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company took
the approval of the Members by way of Special Resolution in the Annual General Meeting
dated 29th September, 2021 for continuation of Directorship ofSh. Subhash
Chander Galhotra (DIN:07205416), (aged around 76 years) on the Board of the Company as a
Non- Executive Independent Director of the Company.
During the financial year 2023-24, Sh. J.S. Ahluwalia, a Non-Executive Independent
Director of the Company will also attain the age of 75 years. So, to comply with
Regulation 17 (1A) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company is taking members' approval through a special resolution in
the ensuing Annual General Meeting to enable Sh. J.S. Ahluwalia to continue his
Directorship in the Company. The relevant resolution forms part of the notice of the
37thAnnual General meeting.
c) Relationship/Transaction of Non-Executive Directors with the Company
The Non-Executive Directors of the Company had no pecuniary relationship or
transactions with the Company, other than taking sitting fees and reimbursement of
expenses incurred by them to attend meetings of the Company.
d) No. of Meetings of the Board
The Board meetings of your company are planned in consultation with the Board Members.
Five (5) board meetings were held during the year on held on 30th May, 2022, 9th
August, 2022, 21st September, 2022, 14th November, 2022 and 13th
February, 2023, the details of which are given in the Corporate Governance Report that
forms part of this Annual Report. The intervening gap between any two meetings was within
the period prescribed by the Companies Act, 2013.
e) Performance evaluation of the Board, its Committees and individual Directors
Pursuant to applicable provisions of the Companies Act, 2013 and SEBI (LODR)
Regulations 2015, the Board, in consultation with its Nomination & Remuneration
Committee, has formulated a framework containing, inter-alia, the criteria for performance
evaluation of the entire Board of the Company, its Committees and Individual Directors,
including Independent Directors.
The Independent Directors held separate meeting on 4th March, 2023, without
the presence of Non-Independent Directors and the members of management and discussed,
inter-alia, the performance of non- Independent Directors and Board as a whole and the
performance of the Chairman of the Company after taking into consideration the views of
Executive and Non-Executive Directors.
The Annual Performance Evaluation was conducted for all BoardMembers, for the Board and
its Committees for the financial year 2022-23. This evaluation was led by the Nomination
and Remuneration/Compensation Committee of the Company. The Board evaluation frame work
has been designed in compliance with the requirements under the Companies Act, 2013 and
the Listing Regulations and in accordance with the Guidance Note on Board Evaluation
issued by SEBI in January 2017.
The Board of Directors expressed its satisfaction with the evaluation process.
f) Details of Familiarization Programme:
The company conducts the Familiarization program when new Director(s) is/are appointed
during the year. The Program aims to provide insights into the Company to enable the
Independent Directors to understand its business in depth, to familiarize them with the
process, business, and functionaries of the Company and to assist them in performing their
role as Independent Directors of the Company. The details of the Familiarisation Programme
imparted to the Independent NonExecutive Directors during the year are available on the
website of the Company at http://www.indswiftltd.com/ familiarisation-programme.php.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and
explanations obtained by them, your Directors make the following statements in terms of
Section 134(3)(c) of the Companies Act, 2013:
a) That in the preparation of the annual financial statements for the year ended March
31, 2023; the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements have
been selected and applied consistently and judgment and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company as at March 31, 2023 and of the profit of the Company for the year ended on that
date;
c) That proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for safe
guarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) That the annual financial statements have been prepared on a going concern basis;
e) That proper internal financial controls were in place and that the financial
controls were adequate and were operating effectively.
f) That systems to ensure compliance with the provisions of all applicable laws were in
place and were adequate and operating effectively.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act 2013 read with
Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22
of SEBI (LODR) Regulations, 2015, the Company has in place a "Whistle Blower
Policy" which provides an opportunity to the Directors and employees to raise
concerns about unethical and improper practices or any other wrongful conduct in or in
relation to the company. The details of the Whistleblower
Policy are stated in the Corporate Governance Report and the said Policy has been
uploaded on the Company's website www.indswiftltd.com and the web link to the same is www.
indswiftltd.com/whistle-blower-policy.php.
NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR
ASSOCIATES
The company set up its wholly owned subsidiary in the Republic of Kenya with the name
of 'Indswift India Limited' in the month of May, 2022 with a view to facilitate promotion
of the Company's products in Kenya. However, the subsidiary has not commenced business
operations yet.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The company had the following Subsidiaries as on 31st March, 2023-
a. Indswift India Limited,in the Republic of Kenya- Wholly Owned Subsidiary (WOS)
The subsidiary is yet to commence business operations.
Pursuant to the first proviso to Section 129(3) of the CompaniesAct, 2013 and Rules 5
and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial
statements, performanceand financial position of each subsidiary and a joint venture is
givenin Form AOC-1 as 'Annexure-I' to this report.
As on 31st March, 2023 the Company did not have any Associate company or
Joint venture.
The Company has framed a policy for determining material subsidiaries, which has been
uploaded on the Company's website and the web link to the same is http://www.indswiftltd.
com/material-subsidiary.php.
DIVIDEND
The Board does not recommend any dividend for the Financial Year 2022-23. There is no
unpaid dividend outstanding as on 31st March, 2023.
RESERVES
As on 31st March, 2023 the Reserves of the Company were Rs. (71,553.17) lacs
as compared to Rs. (73,115.40) lacs in the previous financial year.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to provisions of Section 124(6) of the Companies Act, 2013 (Act) read with
Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016 (IEPF Rules), the Company is required to transfer all unpaid or unclaimed
dividends after the completion of 7 (seven) consecutive years to Investor Education and
Protection Fund (IEPF) established by the Central Government. Further, according to the
rules, the shares in respect of which dividend has not been paid or claimed by the
shareholders for seven consecutive years or more shall also be transferred to the demat
account created by the IEPF Authority. Accordingly, the Company has transferred all the
unclaimed and unpaid Dividends along with respective Equity Shares to the IEPF Account.
PUBLIC DEPOSITS
The Company has completedthe re-payment of its Fixed Deposits in compliance with the
re-payment scheme approved by the Hon'ble Company Law Board vide its order dated 30th
September, 2013. Few of the fixed deposits,however, remain unclaimed as at the end
of the Financial Year. The Company is committed to making those repayments as and when a
valid claim for the same is filed by the respective Deposit holder. During the year the
company has made repayment of fixed deposits amounting to Rs. 28.42 lacs.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE
TO THE CENTRAL GOVERNMENT
The Statutory Auditors, Cost Auditors and Secretarial Auditors of the Company have not
reported any frauds to the Audit Committee or to the Board of Directors under Section
143(12) ofthe Companies Act, 2013, including rules made there under.
RELATED PARTY TRANSACTIONS DISCLOSURES UNDER COMPANIES ACT, 2013
All related party transactions entered into during the financial year were on an arm's
length basis and in the ordinary course of business. No related party transaction
conflicted with the interest of the Company. No materially significant related party
transaction was entered into by the Company with the Key Managerial Personnel.All related
party transactions are first approved bythe Audit Committee and thereafter placed
beforethe Board for their consideration and approval. A statement of all related party
transactions ispresented before the Audit Committee meeting on a quarterly basis,
specifying the nature, value andterms and conditions of the transactions. As prescribed by
Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts)
Rules, 2014, particulars of related party transactions are given in Form AOC-2, as
"Annexure-II" to this Report. The policy on Related Party Transactions as
approved by the Board has been uploaded on the Company's website www.indswiftltd.com.
RELATED PARTY TRANSACTIONS DISCLOSURES UNDER LODR REGULATIONS, 2015
As per the LODR Regulations, 2015 every Listed Company needs to disclose the amounts of
Loans/advances/ investments outstanding at the end of the year along with the maximum
amount outstanding during the year.
In compliance to the above regulations, the Company hereby give disclosure in the
specified format:-
In the accounts of |
Nature of Transaction |
Disclosure |
Holding Company |
Loans & Advances |
Nil, as Company has no Holding Company |
Subsidiary |
Loans & Advances |
Nil |
Holding Company |
Investments |
Nil |
DISCLOSURE OF TRANSACTIONS WITH PROMOTER/ PROMOTER GROUP
As per Schedule V of the LODR Regulations, 2015 every listed Company shall disclose the
transactions with any person or entity belonging to the promoter/promoter group which
holds 10% or more shareholding in the listed entity.
As on 31st March, 2023, M/s Essix Biosciences Limited, the Promoter entity
held 31.45%, of the total equity of the Company.The details of related party transactions,
if any, with Essix Biosciences Limited are disclosed in Form AOC-2, forming part of this
Annual Report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
The Insider trading policy of the Company lays downguidelines and procedures to be
followed, and disclosuresto be made while dealing with the shares of the Company.The
policy has been formulated to regulate, monitor,and ensure reporting of deals by
designated person/employees and maintain the highest ethical standards ofdealing in
Company securities.
RISK MANAGEMENT
Even though the provisions of Regulation 21 of the SEBI (LODR) Regulations, 2015
regarding constitution of Risk Management Committee are not applicable to the Company,
still the Board has constituted a Risk Management Committee. The details of the Committee
are given in the Corporate Governance Report.
The Company's Risk Management Policy is available on Company's Website i.e.
www.indswiftltd.com and the Weblink of the same is
http://www.indswiftltd.com/risk-management.php
CHANGES IN CAPITAL STRUCTURE AND LISTING OF SHARES
The paid-up Equity Share Capital as on 31stMarch, 2023 stood at Rs. 10.83 crore
consisting of 5,41,64,653 equity shares of Rs. 2 each. During the year under review, the
Company has not issued shares or convertible securities or shares with differential voting
rights nor has granted any stock options or sweat equity or warrants. The Company's shares
are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) and
are actively traded.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34 (2) (e) of the Listing Regulations, 2015 read with other
applicable provisions, the detailed review of the operations, performance and outlook of
the Company and its business is given in the Management's Discussion and Analysis Report
which forms part of this Annual Report and is incorporated herein by reference and forms
an integral part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES
ACT, 2013
Pursuant to the provisions of Section 134(3)(g) of the Companies Act, 2013 (Act),
particulars of loans/guarantees/ investments/securities given under Section 186 of the Act
are given in the notes to the Financial Statements forming part of the Annual Report.
ANNUAL RETURN
The annual return of the Company in compliance with the provision of Section 92(3) read
with Section 134(3)(a)of the Companies Act, 2013 is available on website of the Company at
http://www.indswiftltd.com/annual_return.php.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has a Nomination and Remuneration Policy. In compliance with the provisions
of Sections 134(3)(e) and 178 of the Companies Act, 2013 and Regulation 19 read with Part
D of Schedule II of the SEBI (LODR) Regulations, 2015, the Nomination & Remuneration
Committee:
i) has formulated criteria for determining qualifications, positive attributes and
independence of a director and recommends to the Board, Policy relating to remuneration
for directors, KMP and other employees;
ii) has formulated the evaluation criteria for performance evaluation of independent
directors and the Board;
iii) has devised a policy on Board diversity;
iv) identifies persons who are qualified to become directors or may be appointed in
Senior Management in accordance with criteria laid down and recommend to the Board their
appointment and removal;
v) recommends to the Board whether to extend or continue the term of appointment of the
independent director, based on the report of performance evaluation of independent
directors.
The Company's Nomination and Remuneration Policy is available on Company's Website i.e.
www.indswiftltd.com
CORPORATE SOCIAL RESPONSIBILITY
The provisions of section 135 of the Companies Act, 2013 regarding Corporate Social
Responsibility were not applicable to your Company during the Financial Year 2022-23.
ENVIRONMENT/POLLUTION CONTROL, HEALTH AND SAFETY:
The Company is conscious of the importance of environmentally clean and safe
operations. The Company's policy requires the conduct of operations in such a manner so as
to ensure the safety of all concerned, compliances of environmental regulations and
preservation of natural resources. The company continually works towards identification
and reduction of risks and prevention of pollution at its plant and its surroundings.
RESEARCH & DEVELOPMENT AND QUALITY CONTROL
The activities of R&D consist of improvement in the processes of existing products
and developing new products. Quality Control is the strength of the Company. All raw
materials and finished products pass through stringent quality checks for better results.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under 134(3)(m) of the Companies Act, 2013 read with Rule
8 of The Companies (Accounts) Rules, 2014 relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo are given in "Annexure-III".
COMMITTEES OF THE BOARD
The Company's Board has constituted the following Committees prescribed under the
Companies Act and the LODR Regulations, 2015:-
a) Audit Committee
b) Stakeholders Relationship Committee
c) Nomination and Remuneration Committee
d) Risk Management Committee
e) Sub-Committee of the Board
The details of the Composition of the Committees, their role and terms of reference are
given in Corporate Governance report.
STATUTORY AUDITORS
The Company has appointed M/s Jain & Associates, Chartered Accountants, (FRN
001361N) as the Statutory Auditors of the Company in the 36th Annual General
Meeting of the company held on 21st September, 2022 to hold the office till the
conclusion of the 41st Annual General Meeting of the Company to be held in the
year 2027.
During the Financial Year 2022-23, the Auditors have not reported any matter under
section 143(12) of the Companies Act, 2013, therefore no detail is required to be
disclosed under section 134(3)(ca) of the Companies Act, 2013.
A) EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR
DISCLAIMERS MADE BY THE STATUTORY AUDITORS IN THEIR REPORT
The Auditor's Report for the Financial Year 2022-23 does not contain any qualification,
reservation, or adverse remark. Regarding the 'Emphasis of Matter' the management comments
are as under-
EMPHASIS OF MATTER |
MANAGEMENT COMMENTS |
We draw attention to Note No. 35(ii) of the accompanying standalone
and consolidated financial statements, during the year, the company has recorded the
income of Rs. 6057.87 Lakh in respect to waiver of debt (principal and interest) assigned
by Bank of India to Edelweiss Asset Reconstruction Company (EARC) in FY 2021-22. |
After receiving confirmation from the EARC and on the
recommendation of the Audit Committee, it was resolved to write back the debt of Bank of
India Loan as assigned to the EARC for an amount of Rs. 6057.87 Lakhs as an excep-
tional/extraordinary item in the accounts of the company for financial year ended 31st
March, 2023 to reflect the true debt position of the company. |
We draw attention to Note No. 38 of the accompanying standalone and
consolidated financial statements, which describes that despite assignment of Central Bank
of India debt to ARC, the bank has not withdrawn its notice declaring company and its
directors as Wilful defaulters. Legal suits have been filed for the withdrawal of the same
and the matter is sub-judice |
The company has also filed legal suits against the bank for setting
aside the orders, whereby the directors have been declared as wilful defaulters. The
matter is sub-judice. Further, Central Bank of India vide its letter no RO/OPR/2022-23
dated 4th February, 2023, has forwarded recommendation to its central head office for
deletion of the names of directors for RBI's wilful defaulters list. |
We draw attention to Note No. 42 of the accompanying standalone and
consolidated financial statements, which states that sundry balances/excess provision
amounting to Rs. 262.58 Lakhs have been written back during the year being not pay-
able/provision not required |
Self-explanatory and does not require any additional clarification
from the Board. |
We draw attention to Note No. 11 and Note No. 35(i), the company
has repaid principal amounting to Rs. 2008.41 Lakh to EARC during the year as per its term
sheet |
Self-explanatory and does not require any additional clarification
from the Board. |
COST-AUDITORS AND THEIR REPORT
M/s. V. Kumar & Associates, Cost Accountants was appointed as the Cost Auditor to
conduct theaudit of the Company's cost records for the financial year ended 31st
March, 2023. M/s. V Kumar & Associates confirmed their eligibility for the said
appointment. The Cost Auditor will submit the report for FY 2022-23 by the due date and
the same will be submitted with the authorities as per prescribed timeline.
The Cost Audit Report, for FY 2021-22, was filed with the Central Government within the
statutory timelines. The Company maintains the cost records as per the provisions of
Section148(1) of the Act.
In accordance with the provisions of Section 148 of the Act readwith the Companies
(Audit and Auditors) Rules, 2014, since theremuneration to be paid to the Cost Auditor for
FY
2023-24 isrequired to be ratified by the members, the Board of Directorsrecommends the
same for ratification at the ensuing Annual General Meeting. Theproposal forms a part of
the notice of the 37th Annual General Meeting.
It is further to declare that the Company has maintained all the cost records as
specified by the Central Government under sub section (1) of section 148 of the Companies
Act, 2013.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Vishal Arora, Practicing Company Secretary was appointed as Secretarial Auditor of
the Company for the financial year 2022-23 pursuant to Section 204 of the Companies Act,
2013. The Secretarial Audit Report submitted by them in the prescribed Form MR-3 is
attached as "Annexure IV & IVA" to the Directors' Report.
In compliance with Regulation 24A of the Listing Regulations, the Annual Secretarial
Compliance Report issued by the Secretarial Auditor was submitted to the stock exchanges
within the statutory timelines.
The Secretarial Auditors have observed five observations in their secretarial audit
report which are self-explanatory and reply to all the observations, not amounting to
qualification, by the board is as under-
1. Observation is a matter of record only.
2. The Central bank of India (Lender Bank) had declared the Company and its Directors
naming Sh. S R Mehta, Dr Gopal Munjai, Dr. V R Mehta, Sh. Navrattan Munjai, Sh. S P
Sharma, Dr. V K Arora, Sh. S C Gaihotra, Mr. R S Bedi as wiitfui defaulters. Although, the
Company has already repaid its debt to Central Bank in March, 2020 however the willful
defaulter notice has not been withdrawn by the Bank till date. The company has also filed
legal suits against the bank for setting aside the orders, whereby the directors have been
declared as willful defaulters. The matter is sub-judice. Further, Central Bank of India
vide its letter no RO/OPR/2022-23 dated 4th February, 2023, has forwarded recommendation
to its central head office for deletion of the names of directors for RBI's willful
defaulters list.
3. The immovable properties of the company situated at Plot No 781, Industrial Area,
Phase II Chandigarh and Plot No 42, Industrial Area, Phase II Chandigarh are presently on
lease and not in the name of the company. The company is in process to get the same
registered in its own name;however, the same is pending due to legal issues.
4. The Registrar of Companies had disqualified three Directors of the Company, pursuant
to the provisions of section 164(2) of the Companies Act, 2013 due to the disposal of the
company's appeal of restructuring of the Fixed Deposits by the Hon'ble NCLAT, New
Delhi. These three Directors are Dr. Gopal Munjal (DIN 00005196), Mr. Sanjeev Rai Mehta
(DIN 00005668) and Dr. Vikrant Rai Mehta (DIN 00010756). The company had submitted a
representation in this regard to the office of the ROC;however it is still pending.
5. Observation is a matter of record only.
6. The management comments have been disclosed at the relevant places in the Annual
report.
7. Observation is a matter of record only.
8. Regarding the emphasis of matter in the Statutory Audit Report given by the
Statutory Auditor, the Directors have already given their explanation in the Director's
report.
INTERNAL AUDITORS
M/s Avishkar Singh & Associates, Chartered Accountants were appointed as Internal
Auditors of the Company for the Financial Year 2022-23. They conducted the Internal Audit
of the Company as required under the provisions of Section 138 of the Companies Act, 2013
and their reports were reviewed by the Audit Committee and Board of Directors during the
Financial Year 2022-23.
On the recommendation of the Audit Committee, the Board approved the appointment of M/s
Avishkar Singh & Associates, Chartered Accountants as Internal Auditor of the Company
for the Financial Year 2023-24 also. The Board will review the Internal Audit reports for
the Financial Year 2023-24.
INTERNAL COMPLAINTS COMMITTEE
The Company has complied with all the provisions relating to the constitution of
Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition, and Redressel) Act, 2013.
During the year, the Committee has not received any complaint related to Sexual
harassment.
INTERNAL FINANCIAL CONTROL
Your Company has an effective internal control and risk mitigation systems, which are
constantly assessed and strengthened with new/revised standard operating procedures. The
Company's internal control system is commensurate with its size, scale and complexities of
its operations. The main thrust of internal audit is to test and review controls,
appraisal of risks and business processes, besides bench marking controls with best
practices in the industry.
The Audit Committee actively reviews the adequacy and effectiveness of the internal
control systems and suggests improvements to strengthen them. The Company has a robust
Management Information System, which is an integral part of the control mechanism.
The Audit Committee, Board of Directors, Statutory Auditors and the Business heads are
periodically apprised of the internal audit findings and corrective actions taken. Audit
committee plays a key role in providing assurance to the Board of Directors. Significant
audit observations and corrective actions taken by the management are presented to the
Audit Committee of the Board. To maintain its objectivity and independence, the Internal
Audit function reports to the Chairman of the Audit Committee.
DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE,
2016
No proceedings were admitted against the company under the Insolvency and Bankruptcy
Code, 2016 by the National Company Law Tribunal. Further, there are no proceedings
initiated by the Company which are pending under the Insolvency and Bankruptcy Code, 2016
before the National Company Law Tribunal (NCLT) or other Courts during the year under
review.
ONE-TIME SETTLEMENT WITH THE BANKS OR FINANCIAL INSTITUTIONS
During the year, after receiving written confirmation from Edelweiss Asset
Reconstruction Company Ltd., a waiver of Rs. 60.58 crores (Principal and interest) has
been recognized as income in the accounts of the company as per the applicable accounting
standards to reflect the true debt position of the company.
CORPORATE GOVERNANCE
The Company strives to maintain the requisite standards of Corporate Governance and
adhere to the Corporate Governance requirements set out by SEBI Listing Regulations, 2015.
The Company has complied with the Corporate Governance Code as stipulated under the
Listing Regulations, 2015. The Report on Corporate Governance in accordance with Rules
34(3) read with Para C of Schedule V of SEBI (LODR) Regulations, 2015 forms part of this
Report. The Auditors' certificate certifying compliance with the conditions of Corporate
Governance under Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations,
2015 is annexed as "Annexure I" to the Corporate Governance Report
HUMAN RESOURCE
Your Company is of the firm opinion that efficiency of its employees plays a key role
in achieving set goals and building a competitive work environment.
The Company is committed to provide a protective environment at workplace for all its
women employees. To ensure that every woman employee is treated with dignity and respect
and as mandated under "The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013" the Company has constituted an "Internal
Complaints Committee" for prevention of sexual harassment of its women employees.
During the year, the Committee has not received any complaint related to Sexual
harassment.
PARTICULARS OF EMPLOYEES
The Company takes pride in the commitment, competence and dedication of its employees
in all areas of the business. The relation between the management and employees is healthy
and cordial. There is transparency in the dealings and in matters relating to the
activities of the Company and its employees.
Particulars of remuneration of employees required to be furnished pursuant to the
provisions of Section 197 (12) of the Companies Act, 2013 (Act), read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given
as "Annexure V" to this Report. Particulars of remuneration of employees
required to be furnished in terms of Rules 5(2) and 5(3) of the said Rules, forms part of
this Report, which shall be provided to Members upon written request pursuant to the
second proviso of Rule 5. Particulars of remuneration of employees are available for
inspection by Members at the registered office of the Company during business hours on all
working days up to the date of the forthcoming AGM.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
VAT Matter
In the year 2018-19 the sales tax deptt. Chandigarh had completed the sales tax
assessment of the Company for the year 2011-12 and had raised a demand of Rs. 66.34 crore
on account of VAT and CST (VAT Rs. 14.33 cr, CST Rs. 0.17cr, penalty Rs. 31.61 cr and
interest Rs. 20.23 cr). The Company had filed an appeal against the said order with DETC
(Appeals) as per Punjab VAT Act and had deposited asum of Rs 16.65 cr being 25.10% of the
above stated demandto the sales tax deptt, on 08.05.2019. In respect of the samedispute
but on different law points, the matter is also pending before the Hon'ble Supreme Court
and Hon'ble High Court.
Central Bank of India Matter
During the year 2019-20, the Central bank of India (Lender Bank), had declared the
Company and its Directors naming Sh. S R Mehta, Dr. Gopal Munjal, Dr. V R Mehta, Sh.
Navrattan Munjal, Sh. S P Sharma, Dr. V K Arora, Sh. S C Galhotra, Mr. R S Bedi as willful
defaulters.
However, on 3rd March, 2020 the Central Bank of India had assigned its' debt
to M/s Edelweiss Assets Reconstruction Company (India) Limited and after the assignment of
debt the same was paid in full by the Company. The Company has also satisfied the ROC
Charge in respect of this loan after getting a NOC from Edelweiss on 10th July,
2020. Meantime, Central Bank of India has withdrawn their original appeal from the Debt
Recovery Tribunal, as filed by them against the company. However, the willful defaulter
notice has not been withdrawn by the Central Bank of India till date. The Company has
filed legal suits against the Bank for setting aside the orders, whereby the Directors
have been declared as willful defaulters. The matter is pending adjudication before the
Hon'ble High Court. Further, Central Bank of India vide its letter no RO/OPR/2022-23 dated
4th February, 2023, has forwarded recommendation to its central head officefor
deletion of the names of directors for RBI's willful defaulters list.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFTER CLOSURE OF FINANCIAL YEAR
No material changes and commitments have occurred between the end of the financial year
and the date of the Report, which influences the Financial Statements.
TRANSFER/SALE OF MANUFACTURING FACILITIES
As informed in last year's Annual report, to reduce the company's debt the Board took
the shareholders' approval at its Extra Ordinary General Meeting held on 30th
Day of March, 2020 to sell/lease the unit no III and IV of the company. Consequent to the
approval of the shareholders, the Board of Directors of the Company entered into an
agreement with M/s ANG Lifesciences (India) Limited for the sale of
Units III and IV for an agreed price of Rs. 60 Crores. The said transaction is expected
to be completed by 30th June, 2024. The proceeds from the sale are being used to pay off
the lenders of the company.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Alankit Assignments Ltd., Alankit Heights, 2E/121, Jhandewalan Extension, New
Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well
as Demat shares. The members are requested to contact the Registrar directly for any of
their requirements.
CEO/CFO CERTIFICATION
In terms of the Listing Regulations, the Certificate duly signed by Dr. Gopal Munjal,
Managing Director & CEO and Sh. Arun Seth, Chief Financial Officer (CFO) of the
Company was placed before the Board of Directors along with the annual Financial
Statements for the year ended on 31stMarch, 2023, at its meeting held on 30th
May, 2023.
SECRETARIAL STANDARDS:
The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
ACKNOWLEDGEMENT
Your directors would like to express their gratitude appreciation for the assistance
and co-operation received from the Bankers and Government Authorities and thank the
Shareholders for the confidence reposed by them in the Company and look forward to their
valuable support for the future plans of the Company. Directors also thank their
Distributors, agents, stockiest, retail traders, medical professionals, employees, and
customers for their continued patronage of the company products.
|
On behalf of the Board of Directors |
Place: Chandigarh |
Sd/- |
Date:31.08.2023 |
S R Mehta Chairman |
