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Coral Laboratories Ltd.

BSE: 524506 Sector: Health care
NSE: N.A. ISIN Code: INE683E01017
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VOLUME 586
52-Week high 1190.00
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P/E 21.62
Mkt Cap.(Rs cr) 336
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OPEN 944.30
CLOSE 945.60
VOLUME 586
52-Week high 1190.00
52-Week low 448.05
P/E 21.62
Mkt Cap.(Rs cr) 336
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Coral Laboratories Ltd. (CORALLABS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 34th Annual Report together with theAudited Financial Statements for the year ended 31st March 2016.

FINANCIAL RESULTS:

The performance during the period ended 31st March 2016 has been as under:

(Rs. in Lakhs)
Particulars 2015-16 2014-15
Income 7990.89 6201.45
Expenditure 6250.73 4980.46
Earning before Tax 1740.15 1220.99
Provision for Tax 492.00 257.55
Provision for Deferred Tax 7.79 6.42
Less: Income Tax Adjustments of earlier years 0.6688 Nil
Earnings after Tax 1239.70 957.02
Less: Proposed Dividend and Tax on Dividend 128.97 107.50
Balance Brought forward 5129.44 4279.91
Balance carried forward to Balance Sheet 6240.14 5129.44

DIVIDEND:

Your Directors are pleased to recommend dividend for the financial year 2015-2016 onthe Equity Shares of the Company of face value of Rs.10.00/- each at the rate of Rs.3/-(i.e. 30%) per equity share of the Company.

PERFORMANCE:

During the year under review the company posted Revenue of Rs. 7990.89 lakhs ascompared to previous year Rs.6201.45 lakhs. However the earnings after tax stood atRs.1239.70 lakhs as compared to Rs.957.02 lakhs during the previous year.

TRANSFER TO RESERVES:

Your Company does not proposes to transfer any amount to the general reserve. An amountof Rs.1110.70 lakhs is proposed to be retained in the Statement of Profit and Loss.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company is yet to transfer a sum of Rs. 66828/- in respect of unpaid/unclaimeddividend for the Financial Year 2007-08 to the Investor Education And Protection Fund(IEPF).

Dividend for the Financial Year ended 2008-09 and thereafter which remain unclaimedfor a period of seven years will be transferred to IEPF. Members who have not encasheddividend warrant(s)/instrument(s) for the said years are requested to obtain duplicatewarrant(s) for the said years are requested to obtain duplicate warrant(s)/demand draftsby writing to the Company's Registrar and Transfer Agent.

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 the Annual Listing Fees for the year 2016-17 to BSE where theCompany's Shares are listed.

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).

94.25%of the company's paid up Equity Share Capital is in dematerialized form as on31st March 2016 and balance 5.75% is in physical form. The Company's Registrars are LinkIntime India Private Limited C-13 Pannalal Silk Mills Compound L. B. S. Marg Bhandup(West) Mumbai - 400 078.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company is committed to good corporate citizenship. As a part of its corporatesocial responsibility the Company continues to undertake a range of activities includingpreventive healthcare. The CSR policy of the Company is placed on the website of thewww.corallab.com.

During the year under review the Company was suppose to spent Rs. 1983419/- on itsvarious CSR activities whereas the Company could only spend Rs. 256321/- during the yearunder review. Further the Company is still in the process of identifying the right avenuefor spending more on various CSR activities.

In accordance with the provisions of Section 135 of the Companies Act 2013 anabstract on Company's CSR activities is furnished as Annexure F to this report.

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 inClause 49 of the Listing Agreement entered into with the Stock Exchange of India for theperiod 1st April 2015 to 30th November 2015 and as per the relevant provisions ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (collectively referred to as "SEBI Listing Regulations 2015) asreferred in Regulation 15(2) of the listing regulations for the period 1st December 2015to 31st March 2016.

A report on Corporate Governance is included as a part of this Annual Report.

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 2016.

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 Key Managerial Personnel (KMP):

(a) In accordance with the provision of Section 152(6)(a) of the Companies Act 2013and the Articles of Association of the Company Mr. Navin. B. Doshi (DIN: 00232287) of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment. Your Board recommends his reappointment.

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 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 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 Chairman 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 2016 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

(b) The Directors had 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 and ofthe 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 Directors 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 Chairman. They possess sound knowledge on accounts auditfinance taxation internal controls etc. Mr. Rajesh R. Parikh Director acts as Chairmanto the Audit 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

(ii) Nomination and Remuneration Committee:

The Composition of Nomination and Remuneration 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. Navin B. Doshi Member Non Executive

(iii) Stakeholders Relationship Committee:

The Composition of Stakeholders Relationship Committee comprises of the following:

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

AUDITORS AND AUDITORS’ REPORT:

STATUTORY AUDITORS:

M/s. Shah Sanghvi & Co. Chartered Accountants having (Firm Registration number109794W) Baroda the Statutory Auditors of the Company hold the office up to theconclusion of the ensuing Annual General Meeting and being eligible offers themselves forre-appointment for the financial year 2016-2017. Your Company has received written consentand a certificate stating that they satisfy the criteria provided under Section 141 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 and that theappointment if made shall be in accordance with the applicable provisions of theCompanies Act 2013 and rules issued there under.

As required under Regulation 18 read with Part C of Schedule II of the ListingObligations and Disclosure Requirements Regulations 2015 the Audit Committee and theBoard of Directors recommend the appointment of M/s. Shah Sanghvi & Co. CharteredAccountant.

M/s. Shah Sanghvi & Co. Chartered Accountant has also confirmed that they hold avalid certificate issued by the Peer Review Board of ICAI. The Audit Committee and theBoard of Directors recommend the appointment of M/s. Shah Sanghvi& Co. CharteredAccountants as the Auditors of your Company for the financial year 2016- 17 till theconclusion of the next AGM. The Auditors’ Report for the financial year 2015-16 doesnot contain any qualification reservation or adverse remark.

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 the SecretarialAudit of your Company. Certain reservations and observations made in the report withregard to Non-appointment of Company Secretary. The Company is still looking for the rightprofessional and that 100 percent of Promoters Shares are not in Demat form. The Companyhas already initiated the process of demating the balance physical holding ofPromoter’s Shares. However the Company would ensure in future that all theprovisions are complied with to the fullest extent.

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 appointed M/s. Ketki D. Visariya & Co.Cost Accountants to conduct audit of your Company’s cost records for the FinancialYear 2016-17 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 2016 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 5 (Five) times during the financial year i.e. on29th May 2015 29th July 2015 4th November 2015 12th February 2016 and 15th March 2016respectively in respect of which proper notices were given and the proceedings wereproperly recorded and signed in the Minutes Book maintained for the purpose. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

The Audit Committee has duly met 4 (Four) times during the financial year i.e. on 29thMay 2015 29th July 2015 4th November 2015 and 12th February 2016 respectively in respectof which proper notices were given and the proceedings were properly recorded and signedin the Minutes Book maintained for the purpose.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013and Regulation 22 of the Listing Obligations and Disclosure Requirements Regulations2015 a Vigil 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 the purpose of receiving and recording anycomplaints under 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 in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviour of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company’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 andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible 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 to dividendvoting 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 2015-16 the company has not received any complaints onsexual harassment and hence no complaints remain pending as of 31st March 2016.

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/-
Navin B. Doshi Kishor R. Mehta
Place: Mumbai Chairman/Director Whole-Time Director
Date: 10th August 2016 DIN: 00232287 DIN: 00235120

ANNEXURE –A

Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING / OUTGO

Particulars 2015-16 2014-15
A Power & Fuel Consumption
1 Electricity
Purchase Unit 1863230 1645340
Total Amount (Rs.) 9867563 8295142
Rate per Unit 5.30 5.04
2 Furnace Oil
Quantity (Ltrs) 35021 39800
Total Amount (Rs.) 1709314 2341788
Average Rate per Ltr.(Rs.) 48.81 58.84
3 Gas
Quantity (Kgs) 48510 34617
Total Amount(Rs.) 2712110 2570103
Average Rate per Kg.(Rs.) 55.91 74.24
B. Expenditure on R & D Nil Nil
C. 1) Foreign Exchange Earning (Rs.in Lakhs) 4169.83 3159
2) Foreign Exchange Used (Rs. In Lakhs) 174.87 76.87

ANNEXURE C

Form MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to Section 204 (1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

To

The Members of

Coral Laboratories Limited

We have conducted the secretarial audit of the compliance of applicable statutoryprovision and the adherence to good corporate practices by M/s. Coral Laboratories Limited(hereinafter called "the Company"). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.

Based on my verification of the M/s. Coral Laboratories Limited books papers minutebooks forms and returns filed and other records maintained by the Company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit. We hereby report that in my opinion the Companyhas during the audit period covering the financial year ended 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:

We have examined the books papers minutes’ books forms and returns filed andother records maintained by M/s. Coral Laboratories Limited for the financial year ended31st March 2016 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (regulation) Act 1956 (SCRA) and the rules madethereunder;

(iii) The Depositories Act 1996 and the Regulations any Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’)

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme Guidelines 1999; Not applicable to the Company for theyear under review;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; Not applicable to the Company for the year under review;

(f) The Securities and Exchange Board of India (Registrars to issue and Share TransferAgents) Regulations 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; Not applicable to the Company for the year under review;

(h) The Securities and Exchange Board of India (buyback of Securities) Regulations1998; Not applicable to the Company for the year under review.

During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines etc. mentioned above to the extent applicable:

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by the Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the company with Bombay Stock ExchangeLimited.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above subject to the followingobservations:

Based on the compliance mechanism established by the Company and on the basis of therepresentation letter issued by the Company and taken on records by the Board of Directorsat their meeting(s) we are of the opinion that the management has:

Adequate systems and processes commensurate with its size and operations to monitorand ensure compliance with applicable laws rules regulations and guidelines; andComplied with the following laws applicable to the Company:

(a) Drugs Act 1940;

(b) Food Safety And Standards Act 2006

(c) The Trade Marks Act 1999

(d) Water (Prevention and Control of Pollution) Act 1974; (e) Air (Prevention andControl of Pollution) Act 1981; (f) Environment Protection Act 1986; (g) IndustrialDisputes Act 1947; (h) Payment of Wages Act 1936; (i) The Minimum Wages Act 1948; (j)Employees’ State Insurance Act 1948;

(k) The Employees Provident Fund and Miscellaneous Provisions Act 1952; (l) ThePayment of Bonus Act 1965; (m) The Payment of Gratuity Act 1972; (n) The Child Labour(Prohibition and Regulation) Act 1986; (o) The Contract Labour (Regulation and Abolition)Act 1970;

(p) The Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013.

(q) Acts as prescribed under Shop and Establishment Act of various local authorities.

Based on information received and records maintained we further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarification on the agenda items before themeeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above except to the extent asmentioned below:

The Company has failed to comply with the necessary provisions ofSection 203 of the Companies Act 2013. The Company has failed to appoint CompanySecretary for the Company during the year under review.

The Shareholding of promoters is not 100 percent in Demat form.

We further report that during the audit period there were no major events which hadbearing on the Company’s affairs in pursuance of the above referred laws rulesregulations guidelines etc.

For Uma Lodha & Company
Practicing Company Secretaries
Sd/-
Proprietor
Place: Mumbai ACS/FCS No. : 5363
Date: 10th August 2016 C.P. No. : 2593

Note: This report is to be read with our letter of even date which is annexed as'ANNEXURE C(i)' and forms an integral part of this report.

ANNEXURE C(i)’

To

The Members of

Coral Laboratories Limited

Our report of even date is to be read along with this letter.

• Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

• We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

• We have not verified the correctness and appropriateness of financial recordsand Books of Accounts of the company.

• Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

• The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

• The Secretarial Audit report is neither an assurance as to the future viabilityof the company nor of the efficacy or effectiveness with which the management hasconducted the affairs of the company.

For Uma Lodha & Company
Practicing Company Secretaries
Sd/-
Proprietor
Place: Mumbai ACS/FCS No. : 5363
Date: 10th August 2016 C.P. No. : 2593

Annexure [D] to Board’s Report

Information required under Section 197 of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 The ratio of theremuneration of each Director to the median remuneration of the employees of the Companyfor the financial year:

Executive Directors Total Remuneration (Rs.) Ratio to median remuneration
Mr. Kishor R. Mehta 629268 3.71

Notes :

1. The aforesaid details are calculated on the basis of remuneration for the financialyear 2015-16

2. Median remuneration of the Company for all its employee is Rs. 169631 for thefinancial year 2015-16

3. Median remuneration of the Company for all its employee is Rs.139386 for thefinancial year 2014-15

b. The percentage increase in remuneration of each Director chief executive officerchief financial officer company secretary in the financial year:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Mr. Kishor R. Mehta (Whole-Time Director) 20.66
Mrs. Meeta S. Sheth (CFO) 14.57

c. The percentage increase in the median remuneration of all employees in the financialyear 2015-15:

2015-16 (Rs.) 2014-15 (Rs.) Increase (%)
Median remuneration of all employees per annum 169631 139386 21.69

d. The number of permanent employees on the rolls of Company as on 31st March 2016:

Executive/Manager cadre 02
Staff 133
Operators/Workmen --
Total 135

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around Rs. 695050. However during the course of theyear during the course of the year the total increase is approximately 28.72% afteraccounting for promotions and other event based compensation revisions.

Increase in the managerial remuneration for the year was around 35.23%

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate annexure forming part of this report.Further the report and the accounts are being sent to the members excluding the aforesaidannexure. In terms of Section 136 of the Act the said annexure is open for inspection atthe Registered Office of the Company.

Annexure [E] to Board’s Report

FORM AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm’s length transaction under third proviso isgiven below:

1. Details of contracts or arrangements or transactions not at Arm’s lengthbasis:

Sr. No. Particulars Details
a) Name (s) of the related party & nature of relationship
b) Nature of contracts/arrangements/transaction
c) Duration of the contracts/arrangements /transaction
d) Salient terms of the contracts or arrangements or transaction including the value if any
e) Justification for entering into such contracts or arrangements or transactions NIL
f) Date of approval by the Board
g) Amount paid as advances if any
h) Date on which the special resolution was passed in General meeting as required under first proviso to section n 188

2. Details of material contracts or arrangements or transactions at Arm’slength basis:

Sr. No. Particulars Details
a) Name (s) of the related party
b) Nature of Relationship
c) Nature of contracts /arrangements /transaction
d) Duration of the contracts/arrangements / transaction NIL
e) Salient terms of the contracts or arrangements or transaction
f) Justification for entering into such contracts or arrangements or transactions
g) Date of approval by the Board
h) Amount incurred during the year (Rs. In lakhs)

ANNEXURE F

Reporting of Corporate Social Responsibility (CSR)

1. Period for which CSR is being reported from 1st April 2015 to 31st March 2016

2. Whether information includes information about subsidiary company(s) No

3. Whether information includes information about any other entity(s) No

4. Does the company have a written CSR policy Yes

5. Brief contents of the CSR policy

CSR CONTRIBUTION

The contribution by the Company in any financial year towards CSR Activities shall be aminimum of 2% of its average Net Profits for three immediately preceding financial years.

FUNCTIONING OF THE COMMITTEE

The Committee towards effectuation and implementation of the CSR Activities shallidentify and recommend the specific CSR activity(ies) to the Board of Directors of theCompany (Board) for its consideration and approval. Based on the approval of the Boardrequired funds shall be infused into the Board approved CSR activities. The same shallconstitute the CSR Contribution of the Company for the relevant financial year.

The Committee shall institute a transparent monitoring mechanism for implementation ofthe CSR activities towards which end progress updates on CSR activities undertakenshall be submitted to the Board from time to time.

TREATMENT OF SURPLUS ARISING OUT OF CSR ACTIVITIES

It is hereby explicitly stated that any surplus arising out of the CSR Activities shallnot form a part of the business profits of the Company.

OVERALL IMPROVEMENT IN FUNCTIONING AND IN DISCHARGE OF CSR

The Committee shall from time to time explore the ways and means whereby improvementsthat need to be brought about towards the discharge of CSR by the Company are identifiedand steps taken to ensure that measures necessary to effectuate the areas of improvementso identified are taken in the right earnest.

GENERAL

Any term or aspect not specifically defined or set out in this Policy shall beconstrued to mean what is laid down in respect thereof under the Act or the CSR Rules

6. The Composition of the CSR Committee: Mr. Rajesh R. Parikh - Chairman Mrs. Sheela R.Kamdar - Member Mr. Navin B. Doshi- Member

7. Average net profit of the company for last three financial years: Rs.99170958/-

8. Prescribed CSR Expenditure: Rs. 1983419/-

9. Details of CSR spent during the financial year. Rs. 256321/-(a) Total amount to bespent for the financial year. Rs. 1983419/-(b) Amount unspent if any: Rs. 1727098/-

(c) Manner in which the amount spent during the financial year is detailed below.

Sr. No. CSR project or activity identified Sector in which the project is covered Projects or programs -Specify the State/Union Territory where the Project/ Program was Undertaken Projects or programs - Specify the district where projects or programs was undertaken Amount outlay (budget) project or programs wise (Rs) Amount spent on the projects or programs (Rs) Expenditure on Administra- tive Overheads Amount spent: Direct or through impleme nting agency *
1 Preventive Healthcare Health and Sanitation Gujarat Panchmahal Rs.1983419/- Rs.256321/- Nil Direct

* Give details (name address and email address) of implementing agency (ies):

Not Applicable