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Advik Laboratories Ltd.

BSE: 531686 Sector: Health care
NSE: N.A. ISIN Code: INE537C01019
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VOLUME 2140
52-Week high 9.02
52-Week low 4.50
P/E
Mkt Cap.(Rs cr) 11
Buy Price 5.68
Buy Qty 10.00
Sell Price 5.89
Sell Qty 1000.00
OPEN 5.68
CLOSE 5.68
VOLUME 2140
52-Week high 9.02
52-Week low 4.50
P/E
Mkt Cap.(Rs cr) 11
Buy Price 5.68
Buy Qty 10.00
Sell Price 5.89
Sell Qty 1000.00

Advik Laboratories Ltd. (ADVIKLABS) - Director Report

Company director report

Dear Members

Your Directors are delighted to present the 22ndAnnual Report of yourCompany together with the Audited Annual Accounts for the financial year ended 31stMarch 2016.

1. Financial Results:

The Financial Performance of your Company for the year ended March 31 2016 issummarized below

(Amount in Lacs)
Particulars For the year ended
31.03.2016 31.03.2015
Revenue from operations 135.47 1223.86
Profit/(Loss) before Depreciation & Income Tax (57.18) (26.53)
Less: Depreciation 62.49 64.90
Profit/(Loss) after depreciation (119.67) (91.43)
Less: Provision for Income Tax/Deferred Tax (0.67) (23.92)
Profit/(Loss) After Taxation (119.00 (67.51)
Add: Profit brought Forward 106.15 234.86
Less: Adjustment on account of Depreciation -- 61.20
Balance Carried over to Balance Sheet (12.85) 106.15

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 company could not get export orders from its overseasbuyers due to that total revenue of the Company was Rs. 135.47 lacs as against Rs.1223.86 lacs in the previous year. Net Loss (before tax) was Rs. (119.67) Lacs as comparedto Net Loss (before tax) of Rs. (91.43) Lacs in the previous year.However your Directorsare putting their best efforts to improve the profitability of the Company.

The dream of Indian Pharmaceutical manufacturing Companies for making their presenceglobally and competing with the pharmaceutical companies from the developed countries likethe United States Europe and Japan is now coming true with new growth opportunitiesemerging in the pharmaceutical world the overseas pharmaceutical industry has shown thegreat interest in India due to its sustained economic growth health care reforms andpatent related legislation.The Indian government’s decision to allow 74 percentforeign direct investment into the drugs & pharmaceutical industry is expected to aidthe growth of pharmaceutical industry 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 have 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 thereare no material changes and commitments which affect the financialposition of the company.

7 . Details of significant and material orders passed by the Regulators or Courts orTribunals 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 Tribunalswhich impact the going concern status and company’s operationsin future.

8 . Details in respect of adequacy of internal financial controls with reference to theFinancial Statements:

The Board has adopted policies and procedure for ensuring the orderly and efficientconduct of its business including adherence to the company’s policies thesafeguarding of its asset the prevention and detection of fraud and error the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial disclosure.

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 No
(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 Chartered Accountants New Delhi the Statutory Auditors ofthe Company (Registration No. 000978N) had been appointed for four consecutive financialyears i.e. from the conclusion of the 20th AGM till the conclusion of the 24th AGM of theshareholders of the Company as per the provisions of Section 139(1) of the Companies Act2013.

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. 2016-17.

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 year2015-16 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 thisregard board would like to clarify that this is a temporary phenomenon as due to somefinancial constraints company could not make the payment & the Company is putting allits efforts 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.
F Conversion of Warrants On 15/05/2015 the Board of Directors of your Company has converted 4082650 share warrants into equitable number of equity shares issued earlier to promoters and non-promoters on 21/11/2013. Hence the paid up capital of the Company stands increased from Rs. 150287500i.e 15028750 equity shares of Rs. 10/- each to Rs. 191114000 i.e 19111400 equity shares of Rs. 10/- each.

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 earnings andoutgo:

The Company lay focus on Conservation of energy with studies discussions and analysiswhich are undertaken regularly for further improvement. In terms of requirement of Section134 (3) (a) of the Companies Act 2013 read with rule 8 of the Companies (Accounts) Rules2014 the required information relating to conservation of energy technology absorptionsand 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 Ms. Madhu Sharma (DIN06947852) Director of the Company retires by rotation at the forthcoming AGM and beingeligible offers herself for re-appointment.

Considering the background and experience of Ms.Madhu Sharma the Board is of theopinion that her reappointment will immensely benefit your Company. The Board recommendsher reappointment.

Brief resume of the Ms.Madhu Sharma Director of the Company who is proposed to bere-appointed is mentioned hereinbelow:

Ms. Madhu Sharma aged 55 years is a Bachelor of Arts from prestigious University. Shehas extensive experience of almost 20 Years in various aspects of management viz. thefield of marketing and general administration. She has always demonstrated a certaindynamism and foresight seen in the most pragmatic of professional.

Ms. Madhu Sharma does not hold any shares in the Company. Details of her Directorshipin other companies is as follows:-

Sl. No. Directorships in other Public Companies Committee Membership/Chairmanship
1 M/s B.P.Capital Limited - -
2. M/s Polar Marmo Agglomerates Audit Committee Chairman
Limited Nomination and Remuneration Committee Chairman
Stakeholder's Relationship Committee Chairman
Risk Management Committee Member
3. M/s MPS Infotechnics Limited - -
4. M/s Interworld Digital Limited Nomination and Remuneration Committee Member
Stakeholder's Relationship Committee Member
Risk Management Committee Member
5 M/s RCC Cements Limited Nomination and Remuneration Committee Member

Appointment of KMP

During the year under review Ms. PoojaChuni was appointed as a Company Secretary andthe Compliance officer of the Companyw.e.f. 01/10/2015 in the Board Meeting held on29/09/2015.

Cessation of KMP

During the year under review Ms. VaishaliAnand Company Secretary of the Company hastendered her resignation w.e.f. 10th April 2015. The Board puts its sincereappreciation towards the valuable contribution shown by her in meeting out the StatutoryCompliances of the Company.

B. 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 2015confirming that theymeet with the criteria of independence as prescribed under the aforesaid Section andRegulation.

C. Formal Annual Evaluation:

In compliance with the Companies Act 2013 and theSEBI (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:

Ten meetings of the Board of Directors were held during the year on 15thMay 2015 30th May 2015 04th June 2015 13th August2015 03rd September 2015 29th September 2015 14thNovember 2015 20th November 2015 13th February 2016& 31stMarch 2016 .

A separate meeting of the Independent Directors was held on 31.03.2016. .

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 Nomination andRemuneration Committee and approved by the Board to evaluate the performance of the Boardand 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 31.03.2016 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 2015-16 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 2016 the Board consisted of 6 members and outof which 1 (One) is an Executive Director 3 are Independent Directors and 2 arenon-Independent Directors including 1 woman Non-ExecutiveDirector and 1 Non ExecutivePromoter 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 – 4to the Board Report. Further the remuneration paid to the Directors is as per the termslaid out 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/index.php?option=com_content&view=article&id=56&Itemid=57.

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:

During the year under review the Company had not entered into any transactions withrelated parties which could be considered as material in accordance with the policy of theCompany on materiality of related party transactions.

The policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website at thehttp://www.advikindia.com/images/pdf/related%20party%20transaction.pdf

However as a matter of Company’s policy all contracts/arrangements/transactionsif any which have been entered/will be entered by the company with related parties wouldbe in the ordinary course of business and on an arm’s length basis and details andprescribed particulars of all such transactions (if any) will be contained in the Notesto the Financial Statements.

27. Secretarial Audit Report :

In terms of Section 204(1) of the Companies Act 2013 and the rules made thereunderM/sA.K. Friends & Company was appointed as the Secretarial Auditor to undertake theSecretarial Audit of the Company for the F.Y. 2015-16. The report of the Secretarial Auditin Form MR -3 is annexed to and forms part of this Report as per Annexure –5

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 SEBIunder 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 31 March2016 the applicable accounting standards had been followed and no material departureshave 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 2016 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 – 6.

During the year under review none of the Directors of the Company hasreceivedremuneration from the Company.

The Nomination and Remuneration Committee of the Company has affirmed in its meetingheld on March 31 2016 that the remuneration paid to the Senior Management Employee/KMPsis as per 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 2015-16.

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 thesafeguarding of its asset the prevention and detection of fraud and error the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial disclosure.

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 the Companyhas 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 2016 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 trustand support.

For and on Behalf of the Boardof Directors
of Advik Laboratories Ltd.
Sd/-
(Peeyush Kumar Aggarwal)
Date 03rd September 2016 Chairman
Place: New Delhi DIN : 00090423