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Coral Laboratories Ltd.

BSE: 524506 Sector: Health care
NSE: N.A. ISIN Code: INE683E01017
BSE LIVE 13:39 | 21 Nov 917.00 12.65
(1.40%)
OPEN

923.00

HIGH

923.00

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903.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 923.00
PREVIOUS CLOSE 904.35
VOLUME 197
52-Week high 1190.00
52-Week low 566.00
P/E 19.42
Mkt Cap.(Rs cr) 327
Buy Price 905.75
Buy Qty 1.00
Sell Price 917.00
Sell Qty 49.00
OPEN 923.00
CLOSE 904.35
VOLUME 197
52-Week high 1190.00
52-Week low 566.00
P/E 19.42
Mkt Cap.(Rs cr) 327
Buy Price 905.75
Buy Qty 1.00
Sell Price 917.00
Sell Qty 49.00

Coral Laboratories Ltd. (CORALLABS) - Director Report

Company director report

To

The Members of Coral Laboratories Limited

Your Directors have pleasure in presenting the 35th Annual Report together with theAudited Statement of Accounts for the year ended 31st March 2017.

FINANCIAL RESULTS:

The performance during the period ended 31st March 2017 has been as under:

PARTICULARS 2016-17 2015-16
Income 9386.12 7990.89
Expenditure 6897.53 6250.73
Earning before Tax 2488.59 1740.15
Provision for Tax 822.00 492.00
Provision for Deferred Tax 4.74 7.79
Less: Income Tax Adjustments of earlier years 32.34 0.67
Earnings after Tax 1629.51 1239.70
Less: Proposed Dividend and Tax on Dividend - 128.97
Balance Brought forward 6240.14 5129.44
Balance carried forward to Balance Sheet 7667.95 6240.14

DIVIDEND:

Your Directors are pleased to recommend dividend for the financial year 2016-2017 onthe Equity Shares of the Company of face value of Rs.10.00/- each at the rate of Rs.5/-(i.e. 50%) per equity share of the Company.

PERFORMANCE:

During the year under review the company posted Revenue of Rs.9386.12 lacs as comparedto previous year Rs. 7990.89. However the earnings after tax stood at Rs1629.33 lacs ascompared to Rs.1239.70 lacs during the previous year.

TRANSFER TO RESERVES:

Your Company does not propose to transfer any amount to the general reserve. An amountof Rs 199.13 lacs is proposed to be retained in the Statement of Profit and Loss.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulation 34 of the (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015 entered with Stock Exchanges the Management Discussionand Analysis Report is enclosed as a part of this report.

DISCLOSURE IN COMPLIANCE WITH THE ACCOUNTING STANDARD ON "RELATED PARTYDISCLOSURES:

As required under Regulation 34 of the (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015 with Stock Exchanges the disclosure in compliance withthe accounting standard on "related party disclosures are enclosed as a part of thisreport.

LISTING WITH STOCK EXCHANGES:

The Equity Shares of the Company continues to be listed at Bombay Stock Exchange. Thescrip code number of the Equity shares of the Company on BSE is 524506.The Companyconfirms that it has paid up to date listing fees to Bombay stock exchanges.

DEMATERIALIZATION:

The Equity shares of the Company can be held in dematerialized form. The Company hassigned the tripartite agreement with National Securities Depository Limited and CentralDepository Services (India) Limited and existing Registrar & Transfer Agent fordematerialization of existing holding of the shareholders.

The International Securities Identification Number allotted to the Company isINE683E01017. The equity shares of the Company are listed at Bombay Stock Exchange Limited(BSE).

94.78% of the company's paid up Equity Share Capital is in dematerialized form as on31st March 2017 and balance 5.22% is in physical form. The Company's Registrars are LinkIntime India Private Limited C-101 247 Park L.B. S Marg Vikhroli (West) Mumbai - 400083

CORPORATE SOCIAL RESPONSIBILITY (CSR) :

During the financial Year 2016-2017 the Company has not made any contribution toCorporate Social Responsibility as the Company was identifying the right avenue. TheCompany has as on the date of signing the report initiated the policy of contributingtowards Corporate Social Responsibility.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO:

Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given in the Annexure - A to this report.

STATE OF AFFAIRS:

During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 (3) read with Schedule V of the (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015. A report on Corporate Governance is included as a part ofthis Annual Report. Certificate from the M/s. Uma Lodha & Co. Practicing CompanySecretaries confirming the compliance with the conditions of Corporate Governance asstipulated under (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015 isincluded as a part of this report.

Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES)enabling the investors to register their complaints if any for speedy redressal.

PUBLIC DEPOSIT:

Your Company has neither accepted nor renewed any deposit within the meaning of Section73 and other applicable provisions if any of the Companies Act 2013 and the necessaryrules made there under during the year ended 31stMarch 2017.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The particulars of loans guarantees and investment have been disclosed in the notes tothe financial statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) (i) Changes in Directors and KeyManagerial Personnel (KMP) :

There was no change in Directors or Key Managerial Personnel (KMP) in the financialyear 2016-2017.

Events occurred between the end of the financial year of the Company and date of thisreport:

At the Board Meeting dated 26th May 2017 Mr. Navin Doshi (Director) Mr. Kishor Mehta(Whole-Time Director) and

Mrs. Meeta Sheth (Chief Financial Officer) tendered their resignation.

Mr. Girish Dhameja (DIN: 07798455) was appointed as an Additional and Whole-TimeDirector of the Company. Accordingly the Board appointed him as Whole-Time Directorw.e.f. 26th May 2017 subject to approval by the Members of the Company.

Mr. Chetan Doshi (DIN: 00319134) was appointed as an Additional Director of theCompany. w.e.f. 26th May 2017

subject to approval by the Members of the Company.

Mr. Sanket Mehta (DIN: 05309112) was appointed as an Additional Director andIndependent Director of the Company. w.e.f. 26th May 2017 subject to approval by theMembers of the Company.

Mrs. Sushma Chinchane (DIN: 07791735) was appointed as an Additional Director andChief Financial Officer of the Company. w.e.f. 26th May 2017.

DECLARATION OF INDEPENDENCE:

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013.

BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual Directors pursuant to the provisions of the Act and as perRegulation 17(1) of the Listing Obligations and Disclosure Requirements Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of board 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.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual Directors based on the criteria such as the contribution ofthe individual Director to the Board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the board as a whole and performance of the Chairperson wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual Directors was also discussed.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your company has an effective internal control and risk – mitigation system whichare constantly assessed and strengthened with new/revised standard operating procedures.The Company's internal control system is commensurate with its size scale andcomplexities of its operations. The internal and operational audit is entrusted to M/s. RJ Mehta & Associates a Chartered Accountants firm. The main thrust of internal auditis to test and review controls appraisal of risks and business processes besidesbenchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.

The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observation and corrective actions taken by the management are presentedto the Audit Committee of the Board. To maintain its objectivity and independence theinternal Audit function reports to the Chairperson of the Audit Committee.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Companies Act 2013 read withCompanies Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is set out in "Annexure [D]" to thisReport.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Companies Act 2013 Directors of your Companyhereby state and confirm that

(a) In the preparation of the Annual Accounts for the year ended 31st March 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures; (b) The Directors had selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the company at theend of the financial year and of the profit and 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 this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The Direcors had prepared the Annual Accounts on a going concern basis; and

(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

COMMITTEES:

(i) Audit Committee:

The Board has constituted a well-qualified Audit Committee with majority of them areIndependent Directors including Chairperson. They possess sound knowledge on accountsaudit finance taxation internal controls etc. Mr. Rajesh R. Parikh Director acts asChairman to the Audit committee.

At the Board meeting dated 26th May 2017 the said Committee was reconstituted with theresignation of Mr. Kishor Mehta and Mrs. Sushma Chinchane was appointed in his place asMember of Committee.

The Composition of Audit Committee comprises the following:

Sr. No. Name of the Director Designation in Committee Nature of Directorship
1. Mr. Rajesh R. Parikh Chairman Non-Executive (Independent)
2. Mrs. Sheela R. Kamdar Member Non-Executive (Independent)
3. Mr. Kishor R. Mehta Member Executive – Non-Independent
(upto 26th May 2017)
4. Mrs. Sushma Chinchane Member Non-Executive – Non-Independent
(w.e.f. 26th May 2017)

(ii) Nomination and Remuneration Committee:

At the Board meeting dated 26th May 2017 the said Committee was reconstituted with theresignation of Mr. Navin B. Doshi and Mrs. Sushma Chinchane was appointed in his place asMember of Committee The Composition of Nomination and Remuneration Committee comprises thefollowing:

Sr. No. Name of the Director Designation in Committee Nature of Directorship
1. Mr. Rajesh R. Parikh Chairman Non-Executive (Independent)
2. Mrs. Sheela R. Kamdar Member Non-Executive (Independent)
3. Mr. Navin B. Doshi Member Non-Executive – Non-Independent
(upto 26th May 2017)
4. Mrs. Sushma Chinchane Member Non-Executive – Non-Independent
(w.e.f. 26th May 2017)

(iii) Stakeholders Relationship Committee:

At the Board meeting dated 26th May 2017 the said Committee was reconstituted with theresignation of Mr. Navin B. Doshi and Mrs. Sushma Chinchane was appointed in his place asMember of Committee The Composition of Stakeholders Relationship Committee comprises thefollowing:

Sr. No. Name of the Director Designation in Committee Nature of Directorship
1. Mr. Rajesh R. Parikh Chairman Non-Executive (Independent)
2. Mr. Navin B. Doshi Member Non-Executive – Non-Independent
(upto 26th May 2017)
3. Mrs. Sushma Chinchane Member Non-Executive – Non-Independent
(w.e.f. 26th May 2017)

AUDITORS AND AUDITORS' REPORT:

STATUTORY AUDITORS:

The Companies Act 2013 was notified effective April 1st 2014; Section 139 of the Actlays down the criteria for appointment and mandatory rotation of Statutory Auditors.Pursuant to Section 139 of the Act and the Rules made thereunder it is mandatory torotate the statutory auditors on completion of two terms of five consecutive years. TheRules also lay down the transitional period that can be served by the existing auditorsdepending on the number of consecutive years for which an audit firm has been functioningas auditor in the same company.

The incumbent auditors M/s. Shah Sanghvi & Co. Chartered Accountants (FRN:109794W) have served the company for over 10 years before the Act was notified and willbe completing the maximum number of transitional period (three years) at the ensuingAnnual General Meeting (AGM). The Audit Committee of the company has proposed and theBoard has recommended the appointment of M/s. SPVM & CO. Chartered Accountants (FRN:136751W) as the Statutory Auditors of the Company. M/s. SPVM & CO. CharteredAccountants (FRN: 136751W) will hold office for a period of five consecutive years fromthe ensuing Annual General Meeting.

The Company has received consent from M/s. SPVM & CO. Chartered Accountants (FRN:136751W) who is willing to act as a Statutory Auditor of the Company The Company has alsoreceived a confirmation from the said Auditors that they are not disqualified to act asthe Statutory Auditors and are eligible to hold the office as Auditors of the Company.

AUDITORS' REPORT/ SECRETARIAL AUDIT REPORT:

The Auditors have referred to certain routine matters in their report and therespective notes to the accounts are self-explanatory.

As required under Section 204 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed M/S. Uma Lodha & Co. Practicing Company Secretary to conduct theSecretarial Audit of your Company. Certain reservations and observations made in thereport with regard to Non-appointment of Company Secretary. The Company is still lookingfor the right professional and that 100 percent of Promoters Shares are not in Dematform.The Company has already initiated the process of demating the balance physicalholding of Promoter's Shares. However the Company would ensure in future that all theprovisions are complied with to the fullest extent and the website of the Company isupdated regularly.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed M/S Uma Lodha & Co. Practicing Company Secretary to conduct theSecretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as"Annexure - [C]" to this Report.

COST AUDIT:

The Board of Director of Your Company has re-appointed M/s.Ketki D. Visariya & Co.Cost Accountants to conduct audit of your Company's cost records for the Financial Year2017-2018 at a remuneration of Rs. 60000/- (Rupees Sixty Thousand only). As requiredunder the provisions of Companies Act 2013 the remuneration of Cost Auditor as approvedby the Board of Directors is subject to ratification by the shareholders at the ensuingAnnual General Meeting.

The Cost Audit Report will be filed within the prescribed period of 180 days from theclose of the Financial Year.

EXTRACT OF THE ANNUAL RETURN:

Pursuant to Section 92 (3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rule 2014 the Extract of Annual Return (Form No. MGT-9)as on the financial year ended on 31st March 2017 is enclosed as "Annexure –[B]" to the Directors' Report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES:

Your Board of Directors has duly met 9 (Nine) times during the financial year i.e. on20th April 2016 6th May 2016 30th May 2016 28th June 2016 30th June 2016 18th July2016 10th August 2016 25th October 2016 and 30th January 2017 respectively in respect ofwhich proper notices were given and the proceedings were properly recorded and signed inthe Minute Book maintained for the purpose. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.

The Audit Committee has duly met 4 (Four) times during the financial year i.e. on 30thMay 2016 10th August 2016 25th October 2016 and 30th January 2017 respectively inrespect of which proper notices were given and the proceedings were properly recorded andsigned in the Minute Book maintained for the purpose.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of section 177(9)&(10) of the Companies Act 2013 andRegulation 22 of the Listing Obligations and Disclosure Requirements Regulations 2015 aVigil Mechanism for Directors and employees to report genuine concerns has beenestablished.

The purpose of the "Whistle Blower Policy" is to allow employees to raiseconcerns about unacceptable improper or unethical practices being followed in theorganization. They will be protected against any adverse action and/or discrimination as aresult of such a reporting provided it is justified and made in good faith. The Chairmanof the Audit Committee has been designated for receiving and recording any complaintsunder this policy.

The Vigil Mechanism Policy has been uploaded on the website of the Company athttp://www.corallab.com/pdf/Whistle-Blower-Policy.pdf

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were inthe ordinary course of the business. There are no materially significant related partytransactions made by the company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the company atlarge.

Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus approval andthe particulars of contracts entered during the year as per Form AOC-2 is enclosed asAnnexure-E. The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthere under and the Listing Agreement. This Policy was considered and approved by theBoard has been uploaded on the website of the Company athttp://www.corallab.com/pdf/Related-Party-Transaction-Policy.pdf

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees during day to day business operations of thecompany. The Company believes in "Zero Tolerance" against bribery corruptionand unethical dealings / behaviour of any form and the Board has laid down the directivesto counter such acts. The code laid down by the Board is known as "code of businessconduct" which forms an Appendix to the Code. The Code has been posted on theCompany's website http://www.corallab.com/pdf/Code-of-Conduct-Coral-Lab.pdf

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

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

RISK MANAGEMENT:

Pursuant to section 134 (3) (n) of the Companies Act 2013 & Regulation 21 of theListing Obligations and Disclosure Requirements Regulations 2015 the Company is notrequired to constitute a business risk management committee. Hence it is not applicable tothe Company for the year under review.

At present the company has not identified any element of risk which may threaten theexistence of the company.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading

Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

General a) Your Company has not issued Equity Shares with differential rights as todividend voting or otherwise; and b) Your Company does not have any ESOP scheme for itsemployees/Directors.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.

During the financial year 2016-17 the company has not received any complaints onsexual harassment and hence no complaints remain pending as of 31 March 2017.

ACKNOWLEDGMENT:

We take this opportunity to express our deep sense of gratitude to Securities andExchange Board of India Bombay Stock Exchange Limited Registrar of Companies NationalSecurities Depository Limited Central Depository Services (India) Limited M/s. LinkIntime India Private Limited Bankers Shareholders and other Government Agencies fortheir continued support.

By Order of the Board

For Coral Laboratories Limited

sd/- sd/-
Place: Mumbai Chetan N. Doshi Girish M. Dhameja
Date: 10th August 2017 DIN: 00319134 DIN: 07798455