Choksi Laboratories Ltd Directors Report.
Your Directors are pleased to present the Twenty Six Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2019.
|The summarized financial result for the year are as under:||(Rs. In lacs)|
|Total Revenue (Including other operating revenue)||3399.20||3,154.83|
|Profit before Tax (PBT)||229.47||193.29|
|Less: a) Current Tax||73.04||53.11|
|b) Deferred Tax||-3.59||5.47|
|Net Profit/ (Loss) for the period||160.02||134.71|
|Total Comprehensive Income||160.90||126.86|
|Add : Surplus brought forward||1387.93||1,261.07|
|Add : Ind - AS Adjustments||-||-|
|Surplus carried to Balance Sheet||1548.83||1,387.93|
|Bais & Diluted EPS per equity share of face value Rs. 10 each (in Rs.)||2.30||1.93|
|Equity shares of face value of Rs. 10 each (In Rs.)||696.52||696.52|
COMPANYS PERFORMANCE REVIEW
The Company continued to maintain its upward trend by registering Service of Rs. 3374.63 lacs as against Rs. 3119.63 lacs in the previous year. However, Profit before Finance Costs, Depreciation, and Tax has increased from Rs. 668.63 lacs to Rs. 751.07 lacs. After providing for finance costs and Depreciation amounting to Rs. 153.72 lacs and Rs.367.87 lacs respectively, the Profit before Tax for the year under review has amounted to Rs.229.47 lacs as compared to Rs.193.29 lacs in the previous year. Net profit after tax for the year is Rs.160.90 lacs as compared to Rs. 126.86 lacs in the previous year
An amount of Rs. 160.90 lakhs is proposed to be carried forward in the Profit & Loss Account. No amount has been transferred to General Reserve.
EXTRACT OF ANNUAL RETURN
In compliance with section 92(3), section 134 (3) (a) and rule 11 of the Companies (Management and Administration) Rules, 2014 the extract of the annual return is annexed as Form No. MGT-9 with this report.
The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the companys, has decided that it would be prudent, not to recommend any Dividend for the year under review.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORSBOARD EVALUATION
Pursuant to the provisions of the Act and the Listing Regulations, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.
The performance evaluation of the Directors was completed during the year under review. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors and Non-Executive Director. The Board of Directors expressed their satisfaction with the evaluation process
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure, developments, performance and state of affairs of the Companys various businesses viz., the decorative business international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year.
Material Changes and Commitments
There have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report."There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.
Change in the Nature of Business, If Any
There was no change in the nature of business of the Company during the Financial Year ended 31st March 2019.
Foreign Exchange Earnings and Outgo
Foreign Exchange outgo: Rs. 45,29,544/-
Foreign Exchange Earnings: Rs. 59,93,478/-
GOVERNANCE AND ETHICS
a. Corporate Governance
Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. The Companies Act, 2013 and amended SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 have strengthened the governance regime in the country. The Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI.
Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust to four stakeholders at all the times.
A separate report on Corporate Governance (Annexure II) is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated SEBI (Listing obligation and Disclosure Requirements) Regulation2015 (Annexure III) A Certificate of the MD and CFO of the Company, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed.(Annexure IV)
b. Directors & Key Managerial Personnel Appointments:
Re-appointments :In accordance with the Articles of Association of the Company and Section 152 of The Companies Act, 2013, Mr. Vyangesh Choksi(DIN:00154926), Whole Director is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.
This Year Meeting of the Board of Director held on 12th August 2019 under review Mr. Sunil Choksi (DIN 00155078) was re-appointed as Managing Director with effect from Oct, 2019 for a period of 5 years, and Mrs. Stela Choksi (DIN00155043) as a Whole time Director of the Company with effect from Oct , 2019 for a period of 5 years.
c. Number of meeting of Board of Directors
The Board of Directors met Five (5) times during the Financial Year under review viz. 30th May 2018, 13th August 2018, 14th Nov 2018, 13th Feb 2019, 09th March 2019. The maximum gap between any 2 meetings did not exceed 120 days.
d. Independent Directors and their Meeting
Your Company has received annual declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1) (b) & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.
The Independent Directors met on 29th May 2018 without the attendance of NonIndependent Directors and members of the Management. The Independent Directors reviewed the performance of NonIndependent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Directors and NonExecutive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
e. Secretarial Standards
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company
f. Audit Committee &Composition
The Audit Committee comprises Independent Directors namely Mr. Sudharshan Shastri (Chairman), Mr. Ratnesh Sadoriya(Member), Mr. N.K. Mani (Member) During the year all recommendations made by the Audit Committee were accepted by the Board.
g. Contracts and Arrangements with Related Parties
All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on a yearly basis for obtaining prior omnibus approval of the committee. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval on quarterly basis.
During the financial year 2018-19, there were no transactions with related parties which qualify as material transactions under SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 and the Companies Act.
In line with the requirements of the Companies Act, 2013 and Equity SEBI (Listing obligation and Disclosure Requirements)Regulation 2015, the Company has formulated a Policy on Related Party Transactions which is also available on Companys website at http://www.choksilab.com/Downloads The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. Details of related party transation in Form AOC-2.
h. Particulars of Employees
The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The statement containing particulars of employees as required under Section 197 of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled there to, excluding the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company. If any member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
Your Companys mission envisages a strong sense of commitment to work by being a caring pharmaceutical company, which will continuously strive to enhance health through quality Service. Your Company aims at consistently providing service that meet customer needs as well as national and international regulatory requirements, as may be applicable. Your Company has been steadily raising the bar, setting higher goals for incremental performance and enlarging the scope of its initiatives. The environmental policy of your Company emphasizes being a caring Company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.
According to Section 134(5) (e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the and efficient conduct of its business, including adherence to companys 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 system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and controls are in place to ensure that transactions are properly verified, adequately authorized, correctly recorded and properly reported. The Internal Auditors of the Company conducts Audit of various departments to ensure that internal controls are in place;
Compliance with Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.
Nomination and Remuneration Policy
The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are given hereunder. The policy is available on the Companys website at https://www.choksilab.com The Company considers human resources as its invaluable assets. The Nomination and Remuneration Policy aims to pay equitable remuneration to all Directors, Key Managerial Personnel and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company. The Remuneration Policy for all employees is designed to attract talented personnel and remunerate them fairly and responsibly, this being continuous, ongoing exercise at each level in the organization.
Whole Time/ Managing Director
The Company pays remuneration by way of salary, perquisites and allowances (fixed component) to its Managing Director. Salary is paid based on the recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors, The remuneration paid to the Whole Time Director is determined keeping in view the industry benchmark and the relative performance of the Company compared to the industry performance. The Company pays remuneration by way of salary, perquisites and allowances to its Whole Time Director.
Non-Executive Directors receive sitting fees for attending Meetings of the Board and its Committees as per the provisions of the Act and the Rules made there under. no other remuneration is paid to the Non-Executive Directors. The Nomination and Remuneration Committee may recommend to the Board, the payment of commission taking into account the evaluation of the performance of the Directors.
Key Managerial Personnel (KMP) and other Employees
The remuneration of KMP other than the Whole Time Director and other Senior Managerial Employees largely consists of basic salary, perquisites, allowances and performance incentives (wherever paid). Perquisites and retirement benefits are paid according to the Companys policy. The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification and experience, merits and performance of each employee. The Company while deciding the remuneration package takes into consideration the current employment scenario and remuneration package prevalent in the industry and peer group companies.
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Act:
a. in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b. the Directors had 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;
c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors had prepared the annual accounts on a going concern basis;
e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDITORS & THEIR REPORT
M/s. SubhashCand Jain Anurag & Associates, having ICAI Registration No. 004733C were appointed as Statutory Auditor of the Company, for a term of 5 (five) consecutive years, at the Annual General Meeting held on 25th September 2017 They have confirmed that they are not disqualified from continuing as Auditors of the Company. The Notes on financial statement referred to in the Auditors Report are self-explanatory. qualifaciton mention and Auditors report.
|Sr. No.||Description of the property||Status of ownership||Carrying value||Remark|
|1.||Free Hold Land Situated at 4/3, Manoramaganj, Indore||Title of the land in the name of direcetor Shri Sunil Kumar Choksi S/o Dhansukhbhai Choksi||10,00,000/-||But recorded in the books|
|2.||Premises located at 4/3, Manoramaganj, Indore||Title of the premises informed as in the name of directeor and yet not registered in the name of the Company.||82,38,876/-||But recorded in the books|
|3.||Premises located at Plot No. 32 at Vibrant Industrial Park GIDC, Vapi, Gujarat||Title of premises is in the name of Directors, which is then leased in the name of company but the lease deed is not registered.||309,33,234/-||Recorded in the books as Deferred Lease Assets & accounted on fair market value as per Ind AS Rs. 309,33,234/- being lease period is 10 years.|
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Kaushal Ameta, M/s Kaushal Ameta &Company, Company Secretary (FCS:8144,CPNo.9103) to undertake the Secretarial Audit of the Company. The Secretarial Auditors in their report for the year 2018-19 has confirmed the compliances of by the Company as covered in their report.
The Report of the Secretarial Audit for the year 2018-19 in the Form MR-3 is annexed herewith as "Annexure VI". There is no qualification, reservation or adverse remark or in Secretarial Audit Report except the following;
In compliance with the provisions of Section 138 of Companies Act, 2013, read with Companies (Accounts) Rules, 2014, your Company has appointed as Internal auditor M/s. Tanmay V. Rajurkar &Co., Chartered Accountants for the Financial Year2018-19.
Reporting of Fraud by auditors
During the year under review the statutory auditor has not reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.
Related Party Transactions
In line with the requirements of the Companies Act, 2013 and SEBI Listing obligation and disclosure Regulation 2015(LODR), your Company has formulated a Policy on Related Party Transactions which is also available on http:// www.choksilab.com. All Related Party Transactions are placed before the Audit Committee for review and approval of the Committee on a quarterly basis. Also the Company has obtained prior omnibus approval for Related Party Transactions occurred during the year for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arms length.
All the related party transactions entered into during the financial year were on an arms length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section134 (3)(h) of the Companies Act, 2013 in Form AOC 2:
Your Company Comply Pursuant to Regulation 23(9) of the SEBl (Listing Obligations & Disclosure Requirements), 2015, as amended vide SEBl (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, Submit note on Related Party Transactions, on consolidated basis for the financial year ended 31st March, 2019 to the Stock Exchange.
Particulars of Loans, Guarantees or Investments:
The particulars of loans, guarantees and investments as on 31st March 2019 are covered under the provisions of Section 186 of the Companies Act, 2013 is given in the Notes to Financial statements of the Company.
Significant and Material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company:
There are no significant and material orders passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.
Details of Fixed Deposits
During the year under review, the Company has not accepted any Deposit under Section 73 of The Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. It is further stated that the Company does not have any deposits which are not in compliance with the requirements of Chapter V of The Companies Act,2013.
Prevention of Sexual Harassment at Workplace:
The company has a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, there were no complaints pertaining to sexual harassment."
Business Responsibility Report
Regulation 34 (2) of the Listing Regulations, ,provides that the Annual Report of the Top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report("BRR"). Since your Company, does not feature in the Top 500listed entities as per market capitalization as on March 31,2019, the Business Responsibility Report for the financial year2018-2019 does not form a part of this Annual Report.
Health and Safety
Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to its employees. Periodic health check-ups are carried out for all employees and regular training programs are organized on safety and precautionary measures. Fire fighting training programs and first aid training camps are organized regularly educate workers and employees at the plant locations and corporate office.
We would like to thank to all our Stakeholders, Investors Bankers, customers, Suppliers, Government agencies, stock exchanges and depositories, Auditors, legal advisors, consultants, business associates, service providers for their continued commitment, and invincible enthusiasm which made this year productive and pleasurable.
The Board also places on record, their deep sense of appreciation towards all its Employees at all levels for adopting the values of the Company and their hard work during the year.
|For and on behalf of the Board of Directors|
|Choksi Laboratories Limited|
|Place: Indore||Chairman &Managing Director|
|Date: 12th August, 2019||DIN00155078|