Colinz Laboratories Ltd Directors Report.

Your Directors have pleasure in presenting their 33rd Annual Report together with the Audited Accounts of the Company for the Year ended March 31, 2019.

1) Financial Result

(Rs. In Lacs)

Particulars Current year Previous year
2018-2019 2017 - 2018
Rs. Rs.
Total Revenue 778.66 805.56
Total Expense 763.09 790.43
Profit before tax 15.57 15.13
Tax expense (3.40) 7.93
Profit for the year 12.17 23.06
Add: Other Comprehensive income (3.01) (0.20)
Total Profit 9.16 22.86
Balance brought forward of the previous year 133.44 110.58
Balance carried to balance sheet 142.60 133.44
Earnings per share 0.20 0.50

2) OPERATIONAL REVIEW

During the year under review the net revenues stood at 778.66 Lacs compared to 805.56 in the corresponding previous year. The revenues from operation net of GST stood at Rs. 766.82 Lacs and the other income by way of interest received on deposits with banks and dividend were at Rs. 11.84 Lacs. The revenues from operations were marginally lower compared to previous year. The revenues of 2018-19 of Rs. 767 Lacs is not comparable with the previous years due to change in accounting of Indirect Tax (GST) during the current year and the Excise Duty accounting in the previous year. This is because in the previous years the top line used to be reported inclusive of Excise Duty and the Excise Duty used to be debited as an expense in the Profit and Loss Account. However currently, we need to report the top line exclusive of GST Payable/Paid. If we consider the GST paid and deducted from the topline the current year figure would be comparable to the previous years. Further, the reduction in the turnover is due to the slowdown which is affecting the economy resulting in reduced demand for all products across the sectors and severe drought conditions prevailing in the country, particularly in Maharashtra, where the Company has extensive presence.

Further, since the time of demonetization the chemists have learned to operate their business with lower inventory and therefore need based purchase, which is followed currently compared to the stocking of goods as per the formula of stocking which was followed in the past, however, due to various cost control measures adopted by the management the profit before tax remained encouraging at the same level of last year at Rs. 15.57 Lacs compared to 15.13 Lacs in 2017-18. The net profit carried over was at 9.16 Lacs after adjusting a loss in Other Comprehensive Income to the extent of Rs. 3.01 Lacs and deferred tax credit which was higher in the previous year, as per accounting standards required to be followed as per IND-AS.

3) DIVIDEND

The Board regrets its inability to recommend any dividend to plough back the surplus available and to strengthen the financial resources of the Company.

4) SHARE CAPITAL

The paid up equity capital as on March 31, 2019, 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.

5) FINANCE & MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

Cash and cash equivalents as on March 31, 2019, was at Rs. 199.29 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.

6) 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.

7) 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.

8) 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.

9) CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Not applicable to the Company, since the Company has not attained the threshold limit under the Companies Act, 2013 as amended from time to time.

10) 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.

11) TECHNOLOGY ABSORPTION

Companys 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.

12) FOREIGN EXCHANGE EARNINGS AND OUT-GO

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

13) DIRECTORS

Pursuant to Section 152 of the Companies Act, 2013 ("the Act"), Dr. Mani L.S., Director (Din No. 00825886) retires by rotation at the forthcoming Annual General Meeting of the Company and has offered himself for re-appointment for the office of the Director.

Mr. N. K. Menon was appointed as the Whole-Time Director of the Company for a period of five years effective 1st October, 2014 till 30th September, 2019, liable to retire by rotation. Based on the recommendation of the Nomination and Remuneration Committee, the Board on July 31, 2019, re-appointed Mr. N. K. Menon as the Whole-Time Director & Chief Executive Officer of the Company, liable to retire by rotation, for a further period of three years effective from 1st October, 2019 till 30th September, 2022, subject to approval of the Shareholders at the forthcoming Annual General Meeting of the Company.

CA Vasant Bhat and Mr. A. Krishna Kumar were appointed as independent Directors of the Company in the Annual General Meeting held on 30th September, 2014 for the tenure of five years upto 30th September, 2019. Hence, pursuant to Section 149 of the Companies Act, 2013 and rules made there under, they are eligible for reappointment for another term of five consecutive years subject to the approval of members by special resolution. They have consented to their reappointment and confirmed that they do not suffer from any disqualification which stands in the way of their reappointment as independent Directors. Further, the Company has received notices in writing from members under section 160 of the Act proposing the candidature of both CA Vasant Bhat and Mr. A. Krishna Kumar for the office of Directors of the Company. The Company has also received declarations from CA Vasant Bhat and Mr. A. Krishna Kumar that they meet with the criteria of independence as prescribed under sub section (6) of section 149 of the Act.

14) EVALUATION OF BOARDS PERFORMANCE

During the year, the Board has adopted a formal mechanism for evaluating the performance and as well as that of its Committees and Individual Directors including the Managing Director if any and the Whole Time Director of the Board. The exercise was carried out by the Independent Directors of the Company through a Structured evaluation process covering several aspects of functioning of the Board i.e. attendance, contribution at the meeting and otherwise, independent judgement, safeguarding interest of the minority stakeholders, composition of Board/Committees, performance of specific duties and obligations by members of the Board, etc.

15) 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.

16) MEETINGS OF BOARD OF DIRECTORS AND AUDIT COMMITTEE

During the year five Board Meetings and five 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.

17) 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 31-03-2019 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.

18) 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.

19) SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

20) 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. The Code of Conduct in detail is given in our Website.

21) 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.

22) 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 Companys 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.

23) 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 2018-19.

No of complaints received: NIL

No of complaints disposed off : Not Applicable-

24) AUDITORS

M/s. Vora & Associates, Chartered Accountants, FRNo. 111612W, the auditors of the Company, have been appointed for a period of 5 years in the 31st AGM to hold office until the conclusion of 36th AGM (Subject to ratification of their appointment by the members at every intervening AGM).

Pursuant to the amendments made to section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective from May 07, 2018 the requirement of seeking ratification of the members for the appointment of statutory auditors has been withdrawn from the statute. In view of the above, ratification of members for continuance of their appointment at this Annual General Meeting is not being sought. The statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors will be determined by the Board of Directors based on the recommendation of the Audit Committee.

25) 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 said observation is self explanatory.

However, the Company has appointed a qualified Company Secretary & a Compliance Officer from 20 th May- 2019 as per the regulation of SEBI (LODR).

26) COST AUDIT

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

27) EXTRACT OF ANNUAL RETURN

The Annual Return in Form MGT-7 and its extract in Form MGT-9 for the financial year ended 31st March, 2019, are available on the website of the Company at www.findoc-cll.in .

28) PARTICULARS OF EMPLOYEES:

There are no employees in receipt of remuneration exceeding the limit as prescribed under the provisions of Section 197 of the Companies Act, 2013).

29) 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.

30) 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 relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

31) KEY MANAGERIAL PERSONNEL:

In terms of Section 203 of the Act, the following were the KMPs of the Company as on 31st March, 2019.

1. Dr. Mani L.S., Managing Director & CEO

2. Mr. N. K. Menon, Whole-Time Director & CFO

3. Mr. Vasant K Bhat, Independent Director

4. Mr. A Krishna Kumar, Independent Director

32) LISTING FEES

The Company has paid Listing fees to BSE for the year 2019-20.

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.

Mumbai, 31st July, 2019 On behalf of the Board of Directors
COLINZ LABORATORIES LIMITED
(CIN: L24200MH1986PLC041128)
Registered Office: Dr. Mani L.S.
A-101, Pratik Ind. Estate, Director- Legal, Corporate Affairs & Company Secretary
Mulund-Goregaon Link Road, Bhandup (W), Mumbai - 400 078 N. K. Menon
Whole-Time Director& CEO