Colinz Laboratories Ltd Directors Report.

Your Directors have pleasure in presenting their 31st Annual Report together with the Audited Accounts of the Company for the Year ended March 31, 2017.

(Rs. in Lacs )
Sr. No. Particulars 2016-17 2015-16
1 Turnover 804.70 839.89
2 Profit before Depreciation, Interest & Tax (EBITDA) 55.02 54.90
3 Less : Depreciation 26.50 28.18
4 Profit Before Interest & Tax 28.52 26.72
5 Less : Interest 11.79 11.58
6 Profit Before tax /(Loss) 16.73 15.14
7 Less Provision for
Current Tax 2.34 2.75
Deferred Tax (3.70) 2.93
8 Profit After Tax /(Loss) 18.09 9.46
9 Balance brought forward from previous year 84.17 74.71
10 Profit available for appropriation 102.26 84.17
11 Balance carried over to Balance Sheet 102.26 84.17
12 Earnings per Share (Rs.) 0.40 0.21

OPERATIONAL REVIEW

Gross revenues decreased nominally to Rs. 804.70 lacs, a decrease of around 4.19 % against Rs. 839.89 lacs in the previous year, the major reason for the fall in the gross revenues is on account of the liquidity problems in the market due to demonetization in Nov-2016 and the subsequent slow down in the economy. The customers did not have enough money in hand to purchase the medicines due to cash crunch up to the end of Jan-2017. However the other income generated by the company 4.92 Lacs by sales of investment in shares helped to maintain the net profit. The profit before tax after adjusting the depreciation amounting to Rs. 26.50 Lacs and financing charges of Rs. 11.79 Lacs stood at Rs. 16.73 Lacs. The Profit after tax stood at 18.09 Lacs after making adjustments for current taxes and deferred tax credit.

DIVIDEND

Your Directors are unable to recommend any dividend during the year under review, considering the small surplus available and with a view to conserve funds towards margin monies.

SHARE CAPITAL

The paid up equity capital as on March 31, 2017, was Rs 354.41 lacs. During the year under review your Company has not issued any shares including Sweat equity, ESOP and/or convertible debentures.

FINANCE & MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

Cash and cash equivalents as on March 31, 2017, was at Rs. 163.40 lacs. The company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. No material changes have occurred and commitments made, affecting the financial position of the Company.

PUBLIC DEPOSITS

Your 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.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The Audit Committee reviews the adequacy and effectiveness of the internal control system and suggests improvement to strengthen the system. It also reviews the quarterly internal Audit Reports.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Not applicable to the Company.

CONSERVATION OF ENERGY

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption during the year under review. Pharmaceutical formulation industry does not consume high power.

c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

TECHNOLOGY ABSORPTION

Company’s products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore technology absorption is a continuous process. The Company constantly strives for maintenance and improvement in quality of its products and entire development activities are directed to achieve the aforesaid goal.

FOREIGN EXCHANGE EARNINGS AND OUT-GO

During the period under review there was no foreign exchange earnings or out flow.

DIRECTORS

Director, DR. Mani L. S. (Din No. 00825886), Managing Director, who retires by rotation and being eligible, offers himself for re- appointment. The Directors recommend Dr. Mani L. S. for re-appointment.

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 clause 49 of the Listing Agreement.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination & Remuneration Policy

Pursuant to section 178 of the Companies Act 2013, and the rules made thereunder, from time to time and Regulation 19 of the SEBI Regulations 2015, the Board has reconstituted the Nomination & Remuneration Committee. The Nomination & Remuneration Committee framed a policy for selection and appointment, reappointment, removal, appraisal of Directors and Senior Management Personnel and their remuneration.

Meetings of Board of Directors

During the year five Board Meetings and four Audit Committee Meetings and two independent Directors meeting were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Directors’ Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 31-03-2017 and of the profit or loss of the Company for the year under review;

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The directors have prepared the annual accounts, on a going concern basis;

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

Prior omnibus approval of the Audit Committee has been obtained on an annual basis for transactions with related parties which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted and a statement giving details of all transactions with related parties are placed before the Audit Committee for their review on a periodic basis.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealing/behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "Code of business conduct".

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any. The FRM Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT,2013.

"The Company has in place an Anti Sexual Harassment Policy 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. The following is a summary of sexual harassment complaints received and disposed off during the year 2016-17.

No of complaints received: NIL

No of complaints disposed off : Not Applicable

AUDITORS

The Auditors, S. V. Bhat & Co., Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting and M/s Vora & Associates are proposed to be appointed.

SECRETARIAL AUDIT AND AUDIT REPORT

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Sanjay Dholakia & Associates, (CP No. 1798) a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure A".

With regard to the observation made in the said report, regarding the non-appointment of Company Secretary, the Board of Directors would like to inform the members that the Managing Director, Dr. Mani L. S., is himself a qualified Company Secretary (ACS No. 4622) and he is devoting adequate time to undertake all the secretarial work, currently. However, the Company is in the process of appointing a Company Secretary. Further company has appointed CFO as per the regulations specified in section 203 of the Act and CFO is regularly signing the CFO certificate from the FY 2014-15. With regard to resolutions contained in section 117, Company has not passed any resolution contained in section No. 117 of the Act except 117(g) which is of a routine nature.

COST AUDIT

The provision of Cost Audit Report is not applicable to the Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure B".

PARTICULARS OF EMPLOYEES:

None of the employees or Whole Time Director/Managing Director is in receipt of remuneration for the year under review in excess of Rs. 60 Lacs. (Sixty Lacs).

INDUSTRIAL RELATION AND HUMAN RESOURCES

Industrial relation during the period under review remained cordial at all levels. The Company has a structured appraisal system based on key result areas. The HR is effectively involved in nurturing, enhancing and retaining talent through job satisfaction, development and training programs etc.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

KEY MANAGERIAL PERSONS :

During the year under review, the Company has complied with the provisions of section 203 of the Companies Act, 2013, which provides for the appointment of Key Managerial Personnel details of which are available on the website of the Company.

LISTING FEES

The company has paid Listing fees to BSE for the year 2017-18.

ACKNOWLEDGEMENT

Company and its Directors wish to extend their sincerest thanks, to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and Workers at all levels for their continuous cooperation and assistance.

For and on behalf of the
Board of Directors
Mumbai Dr. Mani L. S.
31st July, 2017 (Managing Director)
(DIN: 00825886)