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Advik Laboratories Ltd.

BSE: 531686 Sector: Health care
NSE: N.A. ISIN Code: INE537C01019
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OPEN 5.99
CLOSE 5.99
VOLUME 2
52-Week high 9.02
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.99
Sell Qty 3464.00

Advik Laboratories Ltd. (ADVIKLABS) - Director Report

Company director report

Dear Members

Your Directors are delighted to present the 23rdAnnual Report of yourCompany together with the Audited Annual Accounts for the financial year ended 31stMarch 2017.

1. Financial Results:

The Financial Performance of your Company for the year ended March 31 2017 issummarized below

Particulars

For the year ended

31.03.2017 31.03.2016
Revenue from operations 286.76 135.47
Profit/(Loss) before Depreciation & Income Tax (683.97) (57.18)
Less: Depreciation 59.03 62.49
Profit/(Loss) after depreciation (742.99) (119.67)
Less: Provision for Income Tax/Deferred Tax (5.65) (0.67)
Profit/(Loss) After Taxation (737.34) (119.00
Add: Profit brought Forward (12.85) 106.15
Less: Adjustment on account of Depreciation -- --
Balance Carried over to Balance Sheet (750.19) (12.85)

2. Dividend:

In view of insufficiency of profits your Directors regret their inability torecommended dividend on equity shares for the year under review.

3. Reserves:

In view of insufficiency of profits no amount is proposed to be transferred toReserves for the year under review.

4. Brief description of the Company's working during the year:

During the year under review although company could not get export orders from itsoverseas buyers but with the sincere efforts of the management to get the business forthe company the total revenue of the Company was increased by Rs. 148.85 Lacs. Furtherduring the year under review your company has incurred huge expiry of raw material &finished goods worth of Rs. 648.79 lacs which has adversely effected the profitability ofthe company. However your Directors are putting their best efforts to improve theprofitability of the Company in the current financial year.

The Pharmaceutical industry in India is the world's third-largest in terms of volumeand stands 14th in terms of value. In terms of the global market India currently holds amodest 1-2% share but it has been growing at approximately 14% per year during the lastfour year. India gained its foothold on the global scene with its innovatively engineeredgeneric drugs and active pharmaceutical ingredients (API) and it is now seeking to becomea major player in outsourced clinical research as well as contract manufacturing andresearch. India also has a vast pool of trained pharmaceutical scientists doctors andresearchers which opens up avenues for joint collaborative research for new drugdiscoveries along with joint intellectual property rights.

The Indian government's decision to allow 74 percent foreign direct investment into thedrugs & pharmaceutical industry is expected to aid the growth of pharmaceuticalindustry in the country.

Your company is putting all its eyes to tap the overseas market and putting all itsefforts to get export order from existing and prospective foreign buyers. Your companyexpects to get overseas order soon.

5. Change in the nature of business if any:

During the year there is no change in the nature of business activity of the company.

6. Material changes and commitments if any affecting the financial position of thecompany which has occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report:

During the period between the end of the financial year of the company and the date ofthe report there are no material changes and commitments which affect the financialposition of the company.

7. Details of significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and company's operations in future:

During the year there is no significant and material orders passed by the Regulatorsor Courts or Tribunals which impact the going concern status and company's operations infuture.

8. Details in respect of adequacy of internal financial controls with referenceto the Financial Statements:

The Board has adopted policies and procedure for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguardingof its asset the prevention and detection of fraud and error the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosure.

9. Details of Subsidiary/Joint Ventures/Associate Companies:

The Company has no Subsidiary. During the year no company has become or ceased assubsidiary/Joint-venture/Associate of the company.

10. Performance and financial position of each of the subsidiaries associates andjoint venture companies included in the consolidated financial statement:

During the year no consolidated financial statements have been prepared by the companyas the Company has no subsidiary company.

11. Pubic Deposits:

Your Company has not accepted any deposits from public within the meaning of Section 73of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014during the year under review. The details relating to deposits covered under Chapter V ofthe Act is as under-

(a) accepted during the year Rs Nil
(b) remained unpaid or unclaimed as at the end of the year Rs Nil
(c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved N.A.
(i) at the beginning of the year Rs Nil
(ii) maximum during the year Rs Nil
(iii) at the end of the year Rs Nil

12. Auditors:

M/s. RMA & Associates LLP Chartered Accountants New Delhi the Statutory Auditorsof the Company (Registration No. 000978N/500062) had been appointed for four consecutivefinancial years i.e. from the conclusion of the 20th AGM till the conclusion of the 24thAGM of the shareholders of the Company as per the provisions of Section 139(1) of theCompanies Act 2013.

Section 139(1) further provides that the appointment of statutory auditors shall beplaced before the members at every AGM for ratification.

The Company has received a certificate from the auditors confirming that they areeligible for appointment as auditors of the Company under Section 139 of the CompaniesAct 2013 and meet the criteria for appointment specified in Section 141 of the CompaniesAct 2013 and SEBI Listing Regulations 2015.

Based on the recommendations of the Audit Committee and as per the provisions ofSection 139(1) of the Companies Act 2013 the Board of Directors of your Company proposesto ratify the appointment of M/s RMA & Associates Chartered Accountants as theStatutory Auditors of the Company for F.Y. 2017-18.

COST AUDIT

Pursuant to the various circulars issued by the Ministry of Corporate Affairs theCompany is required to maintain cost records for all the products being manufactured by itand get the same audited by a cost auditor. But due to turnover based criteria asprescribed by Central Government cost audit is not required on our company for the year2017-18 as per notification no. F.No.1/40/2013-CL-V dated 31.12.2014.

13. Auditors' Report:

The company always strives to present a unqualified Financial Statement. However thereare some observations on Auditor's Report at point no. 8 for bank dues. In this regardboard would like to clarify that this is a temporary phenomenon as due to some financialconstraints company could not make the payment & the Company is putting all itsefforts to repay the same soon.

14. Share Capital:

A Issue of equity shares with differential rights: During the year company has not issued any equity shares with differential rights.
B Issue of sweat equity shares During the year company has not issued any Sweat equity shares.
C Issue of employee stock options During the year company has not issued employee stock options.
D Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees Rs Nil
E Bonus Shares No bonus shares were issued during the year under review.

15. Extract of the annual return (MGT-9):

The extract of the annual return in Form No. MGT-9 is annexed herewith (Annexure-1).

16. Conservation of energy technology absorption and foreign exchange earningsand outgo:

The Company lay focus on Conservation of energy with studies discussions and analysiswhich are undertaken regularly for further improvement. In terms of requirement ofSection134 (3) (a) of the Companies Act 2013 read with rule 8 of the Companies (Accounts)Rules 2014 the required information relating to conservation of energy technologyabsorptions and foreign exchange earnings and outgo are Annexed hereto as Annexure-2.

17. Corporate Social Responsibility (CSR):

In terms of section 135(1) of the Companies Act 2013 the provisions of CorporateSocial Responsibility are not applicable to the Company.

18. Directors and Key Managerial Personnel:

A) Changes in Directors and Key Managerial Personnel Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 Mr. Peeyush KumarAggarwal (DIN 00090423) Director of the Company retires by rotation at the forthcomingAGM and being eligible offers himself for re-appointment.

Considering the background and experience of Mr. Peeyush Kumar Aggarwal the Board isof the opinion that his reappointment will immensely benefit your Company. The Boardrecommends his reappointment.

Brief profile of the Mr. Peeyush Kumar Aggarwal Director of the Company who isproposed to be re-appointed is mentioned herein below:

Mr. Peeyush Kumar Aggarwal is a fellow Member of the Institute of CharteredAccountants of India. He has rich experience of over 31 years. A first generationEntrepreneur having a clear business vision and practicing a hands- off approach. He hasmastered the art of Mergers & Acquisitions. His business interests today are in theareas of Information Technology; Telecom VAS; Digital Cinema ; Retail ; Broking (SharesCommodities Insurance) ; Real Estate ; Construction & Hospitality. In addition hehas had an extensive experience in strategic and feasibility consulting preparingbusiness plans conducting due diligence reviews and business valuation. He has hadsignificant expertise in assisting Indian Companies in financial and management audits. Healso has rich and vast experience in the field of Corporate Laws Finance and TaxationProject Management etc. He is an emerging Venture Capitalist who has helped several youngentrepreneurs in establishing and growing their dream businesses

Details of his Directorship in other companies are as follows:-

Sl. No. Directorships in other Public Companies

Committee Membership/Chairmanship

1 M/s MPS INFOTECNICS LIMITED Audit Committee Stakeholder's Relationship Committee Member C h a i r m a n
2. M/s INTERWORLD DIGITAL LIMITED Audit Committee Stakeholder's Relationship Committee Member
3. M/s ONUS PLANTATIONS AND AGRO LIMITED
4. M/s OMKAM DEVELOPERS LIMITED - -

Mr. Peeyush Kumar Aggarwal is a Non-Executive Promoter Director of the Company and hastherefore an interest directly or indirectly in the capital of the Company to theextent of his shareholding in the Company.

B. Appointment and Cessation:

Ms. Madhu Sharma Director of the company resigned w.e.f. 24/01/2017 due to somepersonal reasons. However after receiving the request from the Board of Directors of thecompany and after due deliberations with the Board she was again appointed as a Directorof the Company w.e.f. 31/01/2017.

Further Mr. BrahmDutt Sharma and Mr. Kamal Kishore Sharma resigned from the Boardw.e.f. 03/11/2016 and 04/02/2017 respectively.

The Board places on records its appreciation towards sincere efforts made by themtowards the growth of the company.

C. Declaration by Independent Directors:

Your Company has received necessary declaration from each Independent Director of theCompany under Section 149(6) of the Companies Act 2013 read with Regulation 16 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 confirming that theymeet with the criteria of independence as prescribed under the aforesaid Section andRegulation.

D. Formal Annual Evaluation:

In compliance with the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 during the year the Board adopted a formalmechanism for evaluating its performance as well as that of its Committees and IndividualDirectors including the Chairman of the Board. Structured questionnaires were used in theoverall Board evaluation comprising various aspects of Board function.

The evaluation of Independent Directors was carried out by the entire Board and that ofthe Chairman and Non - Independent Directors were carried out by the IndependentDirectors.

The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.

19. Number of meetings of the Board of Directors:

Nine meetings of the Board of Directors were held during the year on 30thMay 2016 12th August 2016 03rd September 2016 03rdNovember 201614th November 201624th January 2017 31stJanuary 2017 04th February 2017&14th February 2017.

A separate meeting of the Independent Directors was held on 14.02.2017.

20. Committees of the Board:

During the year under in accordance with the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board reconstituted someof its Committees. The Committees are as follows:

* Audit Committee

* Stakeholders' Relationship Committee

* Nomination and Remuneration Committee

* Risk Management Committee

Details of the said Committees alongwith their charters compositions and meetings heldduring the year are provided in the Report of Corporate Governance as a part of thisAnnual Report.

21. Board Evaluation:

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015mandates thatthe Board shall monitor and review the Board Evaluation framework. The Companies Act 2013provides that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its Committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of Independent Directors shallbe done by the entire Board of Directors excluding the director being evaluated.

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India ("SEBI") under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Structured questionnaires were used in the overall Boardevaluation comprising various aspects of Board function.

The performance of the Board was evaluated by the Board on the basis of PerformanceEvaluation Policy formulated by the Board and after seeking inputs from all the directorson the basis of the criteria such as the Board composition and structure effectiveness ofboard processes information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of committeeseffectiveness of Committee meetings etc. and on such further criteria as is set out inthe Performance Evaluation Policy (as per Annexure -3) formulated by the Nominationand Remuneration Committee and approved by the Board to evaluate the performance of theBoard and its Committees.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.

In a separate meeting of Independent Directors held on 14.02.2017 performance ofnon-Independent Directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the Independent Directors at which the performance of the Board itscommittees and individual directors was also discussed.

Based on the outcome of performance evaluation for the financial year 2016-17 furthermeasures/actions have been suggested to improve and strengthen the effectiveness of theBoard and its Committees.

22. Policy on Directors' Appointment and Remuneration:

Your Company has a policy to have an appropriate mix of executive and independentdirectors to maintain the independence of the Board and separate its functions ofgovernance and management. As on March 31 2017 the Board consisted of 4 members and outof which 1 (One) is an Executive Director 2areNon Executive Independent Directorsincluding 1 Woman Director and 1is a Non-Executive Promoter Director.

The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub-section (3) of Section 178 of the Companies Act2013 of the Companies Act 2013 adopted by the Board is attached as Annexure - 4 tothe Board Report. Further the remuneration paid to the Directors is as per the terms laidout in the nomination and remuneration policy of the Company.

23. Risk management policy and Internal Control:

The Company has adopted a Risk Management Policy duly approved by the Board and alsohas in place a mechanism to identify access monitor and mitigate various risks to keybusiness objectives. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.

24. Whistle Blower Policy and Vigil Mechanism:

Your Company has established a "Whistle Blower Policy" and Vigil Mechanismfor directors and employees to report to the appropriate authorities concerns about theunethical behavior actual or suspected fraud or violation of the Company's code ofconduct policy and provides safeguards against victimization of employees who avail themechanism and also provide for direct access to the Chairman of the Audit Committee. Thesaid policy has been uploaded on the website of the company. The same can be accessed atthe website of the Company under the Investment Information head at the linkhttp://www.advikindia.com/reports/policy/whistle blower.pdf.

25. Particulars of loans guarantees or investments under Section 186:

Particulars and details of loans given investments made or guarantees given andsecurities provided if any are given in the Notes to the Financial Statements.

26. Contracts and arrangements with related parties:

All Related Party Transactions that were entered into during the financial year were onan arm's length basis. There were no materially significant related party transactionsmade by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website http://www.advikindia.com/reports/policy/related party.pdf. None of theDirectors have any material pecuniary relationships or transactions with the Company.Pursuant to Section 134 (3)(h) of the Companies Act 2013 and Rules made there underparticulars of transactions with related parties as required under section 188(1) of theCompanies Act 2013 in the prescribed Form AOC-2 is annexed herewith as "Annexure-5"

27. Secretarial Audit Report:

In terms of Section 204(1) of the Companies Act 2013 and the rules made thereunderM/s Kundan Agrawal & Associates was appointed as the Secretarial Auditor to undertakethe Secretarial Audit of the Company for the F.Y. 2016-17. The report of the SecretarialAudit in Form MR -3 is annexed to and forms part of this Report as per Annexure -6

There are no qualifications reservations adverse remarks or disclaimers given by theSecretarial Auditor in the Report.

28. Corporate Governance:

Your Company has been benchmarking itself with well-established Corporate Governancepractices besides strictly complying with the requirements of Regulation 17 to 27 and anyother applicable Regulation of the SEBI under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time.

A separate "Report on Corporate Governance" together with requisitecertificate obtained from Statutory Auditors of the Company confirming compliance withthe provisions of Corporate Governance as per the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed to this Report.

29. Directors' Responsibility Statement:

Pursuant to Section 134(3)(c) read with 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and belief confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards had been followed and no materialdepartures have been made from the same;

(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year i.e. on31st March 2017 and of the profit or loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

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

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and operating efficiently;and

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

30. Particulars of Employees:

There are no employees employed throughout the financial year who were in receipt ofremuneration of Rs. 60 Lacs or more or employed for part of the year who were in receiptof remuneration of Rs. 5 lacs or more a month under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Remuneration) Rules 2014.

Disclosure u/s 197(12) and Rule 5(1) of the Companies Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed herewith as Annexure - 7.

During the year under review none of the Directors of the Company has receivedremuneration from the Company.

The Nomination and Remuneration Committee of the Company has affirmed in its meetingheld on 14/02/2017 that the remuneration paid to the Senior Management Employee/KMPs is asper the remuneration policy of the Company

31. Internal Auditors & Their Report:

Pursuant to the provisions of Section 138 of the Companies Act 2013 and Rules madethereunder the Company had appointed M/s Sanghi & Co. as Internal Auditor for thefinancial year 2016-17.

Internal Financial Control and Their Adequacy

The Board has adopted policies and procedure for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguardingof its asset the prevention and detection of fraud and error the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosure.

The Company has an adequate internal controls system commensurate with its size and thenature of its business. All the transactions entered into by the Company are dulyauthorized and recorded correctly. All operating parameters are monitored and controlled.The top management and the Audit Committee of the Board of Directors review the adequacyand effectiveness of internal control systems from time to time.

32. Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition&Redressal) Act 2013 read with Rules thereunder:

Pursuant to the provisions of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder theCompany has not received any complaint of sexual harassment during the year under review.

33. Human Resources:

Your Company treats its "human resources" as one of its most importantassets. We focus on all aspects of the employee lifecycle. This provides holisticexperience for the employees as well. During their tenure at the Company employees aremotivated through various skill development programs. We create effective dialogue throughour communication channels to ensure effective dialogue through our communication channelsto ensure that feedback reach the relevant team including leadership.

Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.

34. Segment-wise performance:

The Company is into single reportable segment only.

35. Management Discussion and Analysis:

The Management Discussion and Analysis Report on the business of the Company andperformance review for the year ended March 31 2017 as stipulated in Regulation 34 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presentedin a separate report which forms part of the Report.

36. Acknowledgements:

Your Directors are grateful to the Government of India the Reserve Bank of India theSecurities and Exchange Board of India the Stock Exchanges and other regulatoryauthorities for their valuable guidance and support and wish to express their sincereappreciation for their continues co-operation and assistance. We look forward for theircontinued support in future.

Your directors would like to express their sincere appreciation for the assistance andcooperation received from banks customers vendors Government members and employeesduring the year under review.

Finally the Directors thank you for your continued trust and support.

For and on Behalf of the Board of Directors of
Advik Laboratories Ltd.
Sd/-
(Peeyush Kumar Aggarwal)
Date 02ndSeptember 2017 Chairman
Place: New Delhi DIN : 00090423