Natural Capsules Ltd

Your Directors are pleased to present their 32^nd Annual Report together with the Audited Accounts of the company for the year ended

31^st March 2025.

The Company's financial performance, for the year ended 31 ^st March 2025 is summarized here below:

( in Lacs)

There was no change in the nature of business for the period under review.

The company does not propose to transfer any amount to the General Reserves.

Based on the performance of the Company and the need for conservation of internal accruals for capacity expansion, your Directors have not recommended any dividend for the year 2024-25.

In terms of the Companies Act, any unclaimed or unpaid Dividend relating to the financial year 2017-18, will be transferred to the

Investor Education and Protection Fund established by the Central Government, after the conclusion of 32^nd Annual General Meeting.

During the year under review, Company has transferred Unpaid and Unclaimed Dividend of 2016-17 i.e. 1,84,150 to IEPF and

Pursuant to Section 124(6) of the Companies Act, 2013 all shares in respect of which Dividend has not been paid or claimed for seven consecutive years or more has to be transfer to IEPF.

During the year under review, company has transferred 8827 Shares to IEPF.

Further shares required to be transferred to IEPF for the financial year 2017-18 to 2024-25 will be transferred as per the provisions of the Act.

The details of the said shares transferred are provided on the website of the Company at http://www.naturalcapsules.com/pages/ bes-compliance.html.

During the year under review, there was change in the Share Capital.

The Paid up share capital increased to 10,34,11,540 after following:

1. Preferential issue of 9,12,917 equity shares of face value of 10/- each.

2. Issue of 62,500 Equity shares of face Value of 10/- each under Employee Stock Option Plan.

3. Issue of 30,000 Equity shares of face Value of 10/- each under Employee Stock Option Plan.

4. Forfeiture of 13, 313 partly paid up Equity shares issued under Rights issue.

As on 31^st March 2025 details of Share Capital is as follow:

* The Difference of 13,313 shares between Issued and paid up capital due to forfeiture of 13,313 partly paid up Shares.

Pursuant to the shareholders' approval received at Extra-ordinary General Meeting held on August 23, 2024, your Company has issued 9,12,917 fully paid-up equity shares of face value 10/- (Rupees Ten only each) at an Issue price of 320/- (Rupees Three hundred twenty only) each including premium of 310/- each (Rupees Three hundred ten only) aggregating to 29,21,33,440/-

(Rupees Twenty Nine Crores Twenty One Lakhs Thirty Three Thousand Four hundred Forty only) to Non-Promoters on Preferential basis.

The Board of Directors at their meeting held on June 19, 2024 took the decision to forfeit the 13,313 partly paid-up Equity Shares on which Call Money has not been received by the company, along with the amount.

In the Bangalore Unit, Company is yet to install two HPMC capsule units, which are expected to be completed in Financial Year 2026.

API Project of the subsidiary company got commissioned in the current year and commercial production was started towards the end of the FY 2024-25.

In terms of Section 92(3) and Section 134(3)(a) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return is uploaded on the website of the Company web link www.naturalcapsules.com.

Further details of the committee meetings have been enumerated in the Corporate Governance Report annexed in Annexure-5 to this report.

Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

The company has given corporate guarantees of 70 crores to

Bank for securing loans to its subsidiary M/s Natural Biogenex Private Limited covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements.

Internal financial controls means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information; The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the

Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditors' report, internal audit reports, secretarial audit reports, project reports, quarterly budgets, significant processes and accounting policies and other key issues from time to time.

The Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards.

(b) They have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit that period;

(c) They have taken proper and sufficientcare for maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Based on the framework of internal financial controls established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company's internal financial controls were adequate and effective as on March 31, 2024.

(f) They have duly complied with Secretarial Standards issued by Institute of Company Secretaries of India (ICSI) from time to time.

There were no instances of frauds identified or reported by the

Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.

The reports of the Statutory Auditors (annexed elsewhere in the Annual Report) and that of the Secretarial Auditors (annexed hereto as Annexure-2) and the explanations on the observations of Secretarial Audit Report is given below:

M/s P. Chandrasekar LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company for a term of five consecutive years at the 29^th Annual General Meeting held on 20^th September 2022. However with the advent of Companies (Amendment) Act, 2017 the requirement of annual

Auditors of the ratification

Company by the shareholders at the Annual General meeting has been done away with.

The Reports given by M/s P. Chandrasekar LLP, Chartered Accountants on the standalone and consolidated Financial

Statements of your Company for the financial year ended 31 ^st March 2025 ("Financial Statements") is part of the Annual Report. The Notes on the Financial Statements referred to in the Auditor's Report are self-explanatory and do not call for any comments. The Auditor's Report does not contain any qualification, reservation, adverse remark or disclaimer.

Pursuant to the Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time) the Company has appointed Shri R. Parthasarathy, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure-2 and forms an integral part of this Report.

In terms of Regulation 24A of the Listing Regulations, with effect from 1^st April 2025, your Company is required to appoint a

Practicing Company Secretary for not more than one term of five consecutive years or a firm of Practicing Company for not more than two terms of five consecutive years, as a

Secretarial Auditor, with the approval of the members at its AGM and such Secretarial Auditor must be a peer reviewed company secretary and should not have incurred any of the disqualifications as specified under the Listing Regulations.

Further, as per the said Regulation, any association of the individual or the firm as the Secretarial Auditors of the Company before 31^st March 2025 shall not be considered for the purpose of calculating the tenure of the Secretarial Auditors.

Taking into account the above requirements, the Board, on the recommendation of the Audit Committee, has approved the appointment of Mr. R. Parthasarthy, Practicing Company Secretary (Firm Registration Number A 3667/CP No. 838) as the Secretarial Auditors of the Company for a term of five consecutive years, to hold officefrom the conclusion of 32 ^nd AGM till the conclusion of 37^th AGM to be held in the year 2030, covering the period from the financial year ending 31 ^st March 2026 till the financial year ending 31^st March 2030, subject to the approval of the members at the ensuing 32^th AGM of your Company.

Therecommendationfollowedadetailedevaluationofproposals received by the Company and consideration of factors such as technical capabilities, independence, industry experience, subject matter expertise, profile of audit partners and team, quality of audit practices. Your Company has received a written consent from the Secretarial Auditors that the appointment, if approved, will be in accordance with the applicable provisions of the Listing Regulations, Act and rules framed thereunder.

Further, the Secretarial Auditors have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of your Company.

M/s. Mallya & Mallya, Chartered Accountants, was appointed as Internal Auditors for the accounting year 2024-25.

The provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014(as amended from time to time) is currently not applicable to the company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS: materialThere are orders no significant passed by the

Regulators/Courts which would impact the going concern status of the Company and its future operations.

The Company has received declarations from all the

Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Shri. Satyanarayan Mundra (DIN: 00214349) and Shri. Sushil Secretaries Kumar Mundra (DIN: 00214332), Directors retire by rotation and being eligible, offer themselves for re-appointment.

Shri. Satyanarayan Mundra's tenure as Whole-Time Director is ending on September 19, 2025. Considering his immense contribution to the progress of the company as a promoter and executive director since inception, the Board recommends his reappointment for a further period of 3 years and also to revise his remuneration subject to the approval of members.

During the year under review, Shri Cattan Coletore Padmanabhan Rangachar, (DIN: 00310893) Chairman and Non-executive Independent Director) retired pursuant to completion of his tenure on August 24, 2024 from the Board of Directors. The Board wishes to place on record his immense contributions to the progress of the Company during his tenure as a Director.

During the under review, the Board had, based on the recommendation of the Nomination, Remuneration and Compensation Committee, at its meeting held on 19^th June 2024 appointed Shri. Tekkar Yashwanth Prabhu (DIN: 02113527) as an Additional Non-Executive Independent Director with effect from 19^th June 2024, to hold office for a term of five which was subsequently approved by the members at the 31^st AGM of your Company held on 26^th July 2024.

In terms of Regulation 17(1A) of SEBI Listing Regulations, consent of members by way of special resolution is required for appointment or continuation of directorship of Independent Non-Executive Director, beyond the age of 75 years. Further, Shri Tekkar Yashwanth Prabhu will attain the age of 75 years with effect from December 30, 2025 and approval of members is required for the continuation of his directorship from the day he attains the age of 75 years till the expiry of his current term. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Shri Tekkar Yashwanth Prabhu as an Independent Director. Accordingly, the Board recommends his continuation as an Independent Director upon attaining the age of 75 years.

During the year under review, All independent directors have given declarations that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. All Directors have given declaration relating to compliance with code of conduct.

Pursuant to the provisions of Section 203 of the Act, Mr. Sunil L Mundra, Managing Director, Mr. R K Prasad, Chief Financial

Officer, and Mrs. Shilpa Burman, Company Secretary

Key Managerial Personnel of your Company as on 31^st March 2025.

There was no change in Key Managerial Personnel during the year 2024-25.

During the current year, Mrs. Shilpa Burman resigned from the

Position of Company Secretary & Compliance Officer w.e.f May

07, 2025. On the recommendation of Nomination, Remuneration and Compensation Committee the Board of Directors appointed Ms. Pranjal Deshmukh as Company Secretary & Compliance

Officer w.e.f May 29,2025.

As per the requirements of the provisions of the Companies Act, 2013, a Nomination and Remuneration & Compensation Committee of Directors was constituted by the Board of Directors and the details of the Members of the Committee are disclosed elsewhere in this Annual Report. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on Director's appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178. The said Policy is available on the website of the Company, various web links of the company's policy is detailed under the head Policy.

During the financial year ended March 31, 2025, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on ‘arm's length' basis and were in compliance with the applicable provisions of the Companies Act, 2013, read with Regulation 23 of SEBI (LODR), 2015.

The Policy on Related Party Transactions (including the revised policy applicable for related party transactions effective April 01, 2019), is available on the Company's website and can be accessed at http://www.naturalcapsules.com/pdf/policy-on-related-party-transactions.pdf.

All related-party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are of a foreseen and repetitive nature. A statement giving details of all related-party transactions is placed before the Audit Committee for their noting/approval every quarter. As prescribed by Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of material contracts/ arrangements with related parties are given in Form AOC-2, annexed as Annexure-1 to this report.

All related party transactions are mentioned in the notes to the accounts. The Directors draw attention of the members to the

Notes to the financial statements which sets out the disclosure for related party transactions.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR are the TILL THE DATE OF THIS REPORT:

There are no any material changes and commitments occurred between the end of the financial year ended as on 31^st March, 2025 and the date of the report which can affect the financial position of the company.

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 (as amended from time to time) is attached herewith as Annexure-3 to this report.

The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making and are periodically reviewed and revised by the Board of Directors.

During the financial year ended 31^st March 2025, the CSR Committee constitute Shri Pramod Kasat (Chairperson), Shri Sunil L Mundra (Member) and Shri Sushil Kumar Mundra (Member). The terms of reference of the CSR Committee are provided in the Corporate Governance Report, which forms an integral part of this Report. Your Company has also formulated a CSR Policy, which is available on the website of your Company at http://naturalcapsules.com/pages/policies.html.

The Annual Report on Company's CSR activities of the Company is furnished in the prescribed format as Annexure-4 and attached to this report.

The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of inputs received from all the Directors/ Members of the Committees, as the case may be.

The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results of evaluation have been communicated to the Chairman of the Board of Directors.

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of directors on various parameters such as:

Board dynamics and relationships

Information flows

Decision-making

Relationship with stakeholders

Company performance and strategy

Tracking Board and committees effectiveness

Peer evaluation

The evaluation process has been explained in the corporate governance report. The Board approved the evaluation results as collated by the nomination and remuneration committee.

Pursuant to provisions of Regulation 25(7) of the SEBI Listing Regulations, a detailed familiarization program was held on 12^th November 2024 and 29^th March 2025. The detail of familiarization program is available at website of your Company at www.naturalcapsules.com.

Pursuant to Regulation 34 of the SEBI (LODR) Regulations,

2015, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided in Annexure-5 in this Report and the same forms part of the Directors' Report.

Management Discussion and Analysis Repot for the year under review as stipulated under Regulation 34(2) (e) of SEBI (LODR) Regulations, 2015,forms part of the Annual Report.

As on 31^st March 2025 the Committee constitutes of Mr. T Y Prabhu (Chairperson), Mr. Pramod Kasat (Member), Mr. S G Belapure (Member) & Mr. Sunil L Mundra (Member), details of which are enumerated in the Corporate Governance Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in corporate governance report. During the year under review, there were no complaints received under this mechanism.

The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2024- 25.

OTHER DISCLOSURE: a) details of establishment of vigil mechanism, whistle blowerpolicy,andaffirmationthat no personnel has been denied access to the audit committee;

b) details of compliance with mandatory requirements and adoption of the non-mandatory requirements;

c) web link where policy for determining ‘material' subsidiaries is disclosed;

d) web link where policy on dealing with related party transactions;

e) a certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure-6 to this Report.

Pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 read with Regulation 14 of the SEBI

(Share Based Employee Benefits) Regulations, 2014 The

Company has implemented ESOP Scheme 2018, to reward and retain the qualified and skilled employees and to give them an opportunity to participate in the growth of the Company. These Schemes are administered by the Nomination, Remuneration and Compensation Committee of the Company has been appended as Annexure-7 to this Report.

The details of the Plan form part of the notes to accounts of the Financial Statements in this Annual Report.

Your Company does not have shares in the demat suspense account or unclaimed suspense account.

The Company has 2 subsidiaries M/S Natural Biogenex Private Limited & M/S Natural Phyto Pharma Private Limited.

Pursuant to Section 125 of the Companies Act, 2013, dividends that are unpaid/ unclaimed for a period of 7 (Seven) years from the date they became due for payment are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF/ Fund). Given below are the dates of declaration of dividend and corresponding cut-off dates when unpaid/unclaimed dividends are due for transfer to IEPF:

Members who have till date not encashed their dividend warrants are requested to write to the Company/Cameo, RTA to claim the same, on or before cut-off dates given above,to avoid transfer of dividend to IEPF.

The Company has an adequate Internal Control System commensurate with its size and operations. Management has overall responsibility for the Company's Internal Control System to safeguard the assets and to ensure reliability of financial records. Audit Committee reviews all financial statements and ensures adequacy of internal control systems. The Company has engaged the services of an Independent Chartered Accountant to carry out the internal audit and ensure that recording and reporting are adequate and proper, the internal controls exist in the system and that sufficient measures are taken to update the internal control system.

The system also ensures that all transaction are appropriately authorized, recorded and reported. Exercises for safeguarding assets and protection against unauthorized use are undertaken from time to time. The company has also installed an extensive CCTV Surveillance system to cover the entire factory premises. All these measures are continuously reviewed by the management and as and when necessary improvements are affected.

The Net Sales during the year was 16,793.82 Lakh and your Company could make Net Profit of 632.62 Lakh after tax.

As per the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"), your Company has adopted a "Code of Conduct for Prevention of Insider Trading in Securities" (the "Code") and "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("UPSI")". All the Directors, employees and third parties such as auditors, consultants etc., who could have access to UPSI related to the Company, are governed by the Code. The trading window is closed as per the PIT Regulations during the time of declaration of financial results and occurrence of any material events as per the Code.

The details of credit rating are disclosed in the Corporate Governance Report, which forms part of the Integrated Annual Report.

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.

1. During the financial year ended 31^st March 2025, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively. faith,

2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefits of

Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review: a) Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

b) Issue of Shares (Including Sweat Equity Shares) to employees of your Company under any scheme.

c) No significant or material orders were passed by the

Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

d) The Company has not made any application nor any proceedings is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

e) One time settlement of loan obtained from the Banks or Financial Institutions.

f) Revision of financial statements and Directors' Report of your Company.

Your Directors express gratitude to all stakeholders, including customers, bankers, suppliers, distributors, dealers, and contractors, for their ongoing assistance, cooperation, and support. They also extend sincere appreciation to all employees for their dedication and ongoing contributions to the Company. and The Directors are thankful for the confidence, trust shown by shareholders in the Company. Additionally, appreciation is extended to the Central Government and the Government of Karnataka for their continual support and cooperation.