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Laurel Organics Ltd.

BSE: 530313 Sector: Health care
NSE: N.A. ISIN Code: INE285U01017
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OPEN 28.00
CLOSE 26.70
VOLUME 100
52-Week high 31.10
52-Week low 14.97
P/E
Mkt Cap.(Rs cr) 21
Buy Price 28.00
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00

Laurel Organics Ltd. (LAURELORGANICS) - Director Report

Company director report

DIRECTORS' REPORT

To

The Shareholders

The Directors have the pleasure of presenting Twenty Fourth (24th) Annual Report ofyour Company together with the Audited Financial Statement for the year ended 31st March2017.

FINANCIAL SUMMARY
(Rs. In lacs)
Year Ended March 31 2017 Year Ended March 31 2016
Net Sales/ Income from operation 146.0 19.21
Other Income 59.18 18.67
Total Income 205.18 37.88
Cost of Raw Material Consumed 0.00 7.75
Employee Benefit Expense 75.08 213.43
Other expenses 135.57 135.60
Depreciation 34.75 29.35
Finance Charges 26.90 55.71
Change in Inventory/ Stock in trade 0.00 0.43
Purchases of Stock in Trade 35.39 0.00
Total Expenditure 307.68 442.27
Profit / (Loss) for the year (102.51) (404.39)
Less: Deferred Tax (7.61) (0.91)
Profit/ (Loss) carried to Balance Sheet (94.90) (404.30)
Earnings per Share (1.29) (5.49)

STATE OF COMPANY'S AFFAIRS

The Company has been consistently practising prudent finance and working capitalmanagement. The strong focus on working capital and liquidity management has helped timelygeneration of sufficient internal cash flow to invest in long term strategic objectives ofthe Company.

Company has upgraded its Plant in accordance with Good Manufacturing Practice (GMP)Standards for pharmaceutical productions and has received GMP certificate dated 25-07-2017valid upto 06-04-2022 from the office of State Drugs Controller Haryana Food and DrugsAdministration Haryana Panchkula.

The Company has obtained Manufacturing License from State DrugsController-cum-Licensing Authority Food and Drugs Administration Haryana on 07-04-2017in order to manufacture final product Bulk Drugs -Active Pharmaceutical Ingredients(APIs).

• Brief details of the license obtained- Grant of Manufacturing License on Form 25and 28 for manufacturing of Biological and Non- Biological Drugs.

• Relevance of such license to the listed entity- The Company shall initiate theprocess of manufacturing final product bulk drugs - Active Pharmaceutical Ingredients(APIs);

• Period for which such license is valid- 5 years i.e. upto 06-04-2022.

Company has recently started Research & Development (R&D) at its plant locatedat Village Bhondsi Tehsil Sohna Distt. Gurgaon Haryana-122102

CAPITAL

There has been a change in the Share Capital of the Company during the year underreview.

4000000 0.1% Redeemable Non-Convertible Preference Shares (RNCPS) of Rs 10/- eachissued/ allotted by the Company on 17th May 2016 to a non- promoter on private placementbasis consequent to which the overall Paid-up Share Capital of the Company standincreased to 113850000/- comprising of 7385000 Equity Shares of Rs 10/- each and4000000 Preference Shares of Rs 10/- each. The said RNCPS are not listed on any StockExchange.

SCHEME OF ARRANGEMENT WITH KIMIA BIOSCIENCES LIMITED

During the year under review Board of Directors of the Company in their meeting heldon August 02 2016 has approved the Scheme of Arrangement for Amalgamation of the Companywith M/s Kimia Biosciences Limited ("Kimia"). Kimia is engaged in the businessof manufacturing of pharmaceutical products specifically bulk drugs having facilities atDerabassi Punjab Bhiwadi and has recently shifted its R&D unit at the plant locatedin Gurgaon.

Company has received 'No Adverse Observation' dated January 23 2017 from Bombay StockExchange regarding the draft Scheme of Arrangement between Laurel Organics Limited andKimia Biosciences Limited and has filed first motion petition to National Company LawTribunal (NCLT) Chandigarh for further proceedings.

Approval of the Scheme pursuant to section 391 - 394 of the Companies Act 1956 or anycorresponding provisions of the Companies Act 2013 (to the extend notified) shall also bedeemed to be the approval under section 100 to 105 of the Companies Act 1956 or anycorresponding provisions of the Companies Act 2013 (to the extend notified) for reductionand cancellation of shares of the Company.

HOLDING SUBSIDIARY ASSOCIATE COMPANIES

The Company does not have any Subsidiary. During the year under review KimiaBiosciences Limited became the Holding Company by acquiring 3728100 Equity Shares(50.48%) of Rs. 10/- each during the quarter ended on September 2016 and is covered underthe category of 'Promoter and Promoter Group' of the Company.

DIVIDEND

In view of accumulated losses of the Company your company does not recommend dividendfor the financial year 2016-17.

Further there were no amounts of unclaimed dividend to be transferred to InvestorEducation & Protection Fund (IEPF) as per the provisions of Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 as amendedfrom time to time.

TRANSFER TO GENERAL RESERVES

During the Financial Year ended on March 31 2017 the Company has not transferred anyamount to the General Reserves.

PUBLIC DEPOSITS

Your Company has not accepted any deposits from public and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.

LOANS GUARANTEES AND INVESTMENTS

There were no loans guarantee given or investments made during the year under review.Details of Loans taken and securities provided in related thereto are provided in Note No.25 of Notes to the Financial Statements enclosed with this Annual Report.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred as Listing Regulations) the Equity Capital of theCompany Rs. 73850000 (Rupees Seven Crores Thirty Eight Lacs and Fifty Thousand only)and the Net worth of the Company is negative and does not exceed Rs. 25 crores as on March31 2017. Thus Company is not re quired to submit the Corporate Governance Report.

Management Discussion and Analysis- In compliance with Regulation 34(3) read withSchedule V(B) of SEBI(Listing Obligations & Disclosure Requirements) Regulations2015 a Management Discussion and Analysis forms part of this report as Annexure-I.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and 134(3)(a) of the Companies Act 2013 ('the Act') and Rule12(1) of the Companies (Management and Administration) Rules 2014 extract of AnnualReturn in Form MGT-9 is annexed as Annexure-II.

STATUTORY AUDITORS THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

In the 21st Annual General Meeting held on 29th September 2014 M/s. A.K Jalan &Associates Chartered Accountants New Delhi (FRN 500107N) had been appointed as StatutoryAuditors of the Company for a period of three(3) years subject to ratification at everyAnnual General Meeting. Their term of office as per the provisions of Section 139 of theCompanies Act 2013 and rules made there under will expire at the conclusion offorthcoming Annual General Meeting.

Therefore in line with the recommendation of Audit Committee and subject to theapproval of shareholders at ensuing Annual General Meeting (AGM) of the Company the boardof directors in its meeting held on August 23 2017 has proposed the appointment of M/s.Singhi & Co Chartered Accountants (Firm Registration Number: 302049E) as StatutoryAuditors of the Company in place of retiring auditors M/s A. K. Jalan & AssociatesChartered Accountants (Registration No. 500107N) to hold the office from the conclusionof this 24th Annual General Meeting (AGM) until the conclusion of 29th Annual GeneralMeeting subject to ratification by members at every AGM.

The report of the Statutory Auditors along with Notes on Standalone FinancialStatements for the year ended March 31 2017 is enclosed with this report which is selfexplanatory and do not call for any further comments. There is qualified opinion in AuditReport the basis of which is as follows:

The Company has accumulated losses and its net worth has been fully eroded. TheCompany's current liabilities exceeded its current assets as at the balance sheet date andbusiness of the Company has remained suspended for major part of the financial year andalso the Company incurred net loss during the current and previous year(s) affecting thegoing concern assumptions. Appropriateness of the assumption of 'going concern' isdependent upon Company's ability to raise sufficient resources/ generate cash flows infuture to meet its obligations.

Management of the company has though expressed positive hope in this regard asnecessary funds required for up-gradation/renovation of plant have been infused during theFY by them and phase I of the process has completed and part of the plant facility hasstarted yielding revenue during last quarter and therefore the financial statements ofthe Company have been prepared on a going concern basis.

Further during the year the Auditors' has not reported any fraud u/s 143(12) of theCompanies Act 2013 and rules made there under.

SECRETARIAL AUDITOR

In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s.Chandrasekaran Associates Practicing Company Secretaries New Delhi has been appointed asSecretarial Auditors of the Company for the financial year 2016-17.

The report of the Secretarial Auditors for the year ended March 31 2017 is enclosed asAnnexure-III to this report. The report is self-explanatory and do not call for anyfurther comments.

INTERNAL FINANCIAL CONTROLS

The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company. Your Companycontinuously invests in strengthening the internal control processes and systems. Theinternal control process and systems provide a reasonable assurance in respect ofproviding financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies.Procedures to ensure conformance with the policies processes and standards have been putin place covering all activities.

The processes and financial activities are subjected to independent audits by internalas well as statutory auditors. Implementations of recommendations from various auditreports are regularly monitored by the senior management. The Board of directors of theCompany have also appointed an Internal Auditor Sh. Biswajit Das Chatterjee CharteredAccountant (ACA51729) Financial Advisor of the Company to ascertain inter-alia theirviews on the adequacy of internal control systems and keep the board of directors informedof its major observations periodically. Internal and statutory audit reports and findingsincluding comments by the management if any are periodically placed before the AuditCommittee of the Board of Directors.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134 (3)(C) read with Section 134 (5) ofthe Companies Act 2013 your Directors confirm:

(a) that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profits/ losses of the company for that period;

(c) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that the directors had laid down proper internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and

(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

RELATED PARTY TRANSACTIONS

All the related party transactions entered into by the Company during the year were onarm's length basis and in the ordinary course of business. During the year no transactionwas entered into by the company with its Key Managerial Personnel. The Company did notenter into any related party transaction which was in conflict with its interest.Statements of transactions with related parties in summary form are periodically placedbefore the Audit Committee and are approved by the Committee. Details of provided in NoteNo. 25 (xxx) of the Notes to Financial Statements of the Company enclosed with thisreport.

The prescribed Form AOC-2 is enclosed and forms part of this Report as Annexure-IV.

The policy on materiality of Related Party Transactions and also on dealing withRelated Party Transactions as approved by the Board has been hosted on Company's websiteviz. www.laurel.co.in.

CODE OF CONDUCT

The Company has laid down a Code of Conduct ("Code") for all Board membersand Senior Management of the Company. The code is available on the website of the Companyi.e. www.laurel.co.in The Code has been circulated to all the members of the Board andSenior Management and they have affirmed compliance with the Code for the financial yearended 31st March 2017. A declaration signed by Mr. Sameer Goel Managing Director of theCompany affirming the compliance of the Code of Conduct by Board Members and SeniorManagement Executives is attached to this Annual Report as Annexure-V.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Act Mr. Sameer Goel ManagingDirector of the Company retires by rotation at the forthcoming Annual General Meeting(AGM) and is eligible for re-appointment.

During the year under review the designation of Mr. Sachin Goel was changed from WholeTime Director ("WTD") (appointed as Additional Director on 29th March 2016 tobe regularized as WTD subject to the approval of Shareholders in AGM) and presentlycontinues to act as a non-executive director w.e.f 17th May 2016.

Mr. Jagdeep Dhawan and Mrs. Richa Gupta duly appointed as an Independent Directors inAGM dated 30th September 2016 for a period of five (5) consecutive years w.e.f 29thMarch 2016 and 15th April 2016 respectively. In compliance with the provisions ofSection 149(7) of the Act Independent Directors have given declarations that they meetthe criteria of independence prescribed by Section 149(6) of the Act.

Mr. Gaurav Kumar and Mr. Raman Thakur were appointed as the Company Secretary andChief Financial Officer (CFO) w.e.f. 12th March 2016 and 17 May 2016 respectively.During the year Mr. Gaurav Kumar resigned from the position of Company Secretary &Compliance Officer of the Company effective from September 09 2016 and Ms. Pratibha Anandwas appointed as Company Secretary & Compliance Officer of the Company w.e.f November10 2016. Further Mr. Raman Kumar Thakur has resigned from the office of CFO w.e.f April04 2017.

During the year seven Board Meetings were held on May 12 2016 May 17 2016 May 302016 August 02 2016 August 13 2016 November 10 2016 and February 13 2017.

The Board of Directors ("Board") comprises of optimum number of ExecutiveNon-Executive and Independent Directors as required under applicable legislations. As ondate of this Report the Board consists of four (4) Directors comprising one (1) ManagingDirector and one (1) Non-Executive Director. There are two (2) Independent Directors inthe Company including one (1) Independent Woman Director as required under Section 149 ofthe Companies Act 2013 & rules made thereunder and Regulation 17 of the ListingRegulations.

NIL number of Shares and convertible instruments held by non-executive directors.

Details of the composition of the Board the Board meetings held during the yearattendance of Directors at Board meetings and other related matters are as under:

Name of Director Designation/ Category Number of other directorship held Number of other Board Committees of which member/ chairperson Number of Board Meetings held during the tenure Board Meetings attended last AGM Attendance Attendance at the
Mr. Sameer Goel Chairman Managing Director/ED 6 1 7 7 Yes
Mr. Sachin Goel Director/ NED 6 1 7 7 Yes
Mr.Jagdeep Dhawan Independent Director NIL NIL 7 7 Yes
Mrs. Richa Gupta Independent Director NIL NIL 7 7 Yes

Notes:

Except Mr. Sameer Goel and Mr. Sachin Goel who are related to each other as brothersnone of the other Directors are related to any other Director on the Board in term ofdefinition of 'relative' as per the Companies Act 2013.

Mr. Sameer Goel is liable to retire by rotation at the forthcoming Annual GeneralMeeting (AGM) and being eligible has offered himself for re-appointment. Relevant detailspertaining to Mr. Sameer Goel are provided in the notice of the AGM.

All IDs of the Company have furnished declarations that they qualify the conditions ofbeing independent as per Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b)of the Listing Regulations. These were placed before the Board.

The IDs of the Company met on March 31 2017 under the chairmanship of Mr. JagdeepDhawan without the presence of Non-Independent Directors or management personnel to reviewthe performance of Non-Independent Directors the Board Committees and the Chairperson.The meeting also reviewed the quality quantity and timeliness of flow of informationbetween the Company and the Board. The terms and conditions of appointment of IndependentDirectors have been placed on the website of the Company www.laurel.co.in. The details offamiliarization programmes for Independent Directors have been provided in the Directors'Report and posted on the website of the Company and can be accessed at the web link:http://www.laurel.co.in/policies.html.

COMMITTEES OF BOARD

During the year under review and as on date the composition of Committees i.e. AuditCommittee Nomination & Remuneration Committee and Stakeholders RelationshipCommittee remained unchanged.

AUDIT COMMITTEE

The constitution of the Committee is in compliance with the provisions of Section 177of the Companies Act 2013 and Regulation 18 of the Listing Regulations. During the yearunder review seven meetings of the Committee were held on May 12 2016 May 17 2016 May30 2016 August 02 2016 August 13 2016 November 10 2016 and February 13 2017.

The composition of the Committee as well as the particulars of attendance at theCommittee meetings during the year and other related details are given in the table below:

Name & Designation Category of Directorship Qualification No. of meetings held during the tenure No. of meetings attended
Mr. Jagdeep Dhawan ID Graduate 7 7
Mrs. Richa Gupta ID Graduate 7 7
Mr. Sameer Goel MD Graduate 7 7

The Chairman of the Committee attended the last AGM of the Company. The CompanySecretary acts as the Secretary to the Committee. The Statutory Auditors InternalAuditors Secretarial Auditors and other related functional executives of the Company alsoattended the meeting when required. Further the Board has accepted all the recommendationof Audit Committee during the period.

The principal terms of reference of the Committee as approved by the Board and asrevised / updated from time to time by the Board are:

Financial Information Review

i. Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.

ii. To examine the financial statement and the auditors' report thereon;

iii. Reviewing with the management the annual financial statements and auditor'sreport thereon before submission to the Board for approval.

iv. Reviewing with the management the quarterly financial statements before submissionto the Board for approval.

vi. To review and recommend the appointment removal and terms of remuneration ofAuditors of Company.

Internal Controls and Policies for Maintaining Vigil

i. Scrutiny of inter-corporate loans and investments.

ii. Valuation of undertaking's or assets of the company wherever it is necessary.

iii. Evaluation of Internal Financial Controls and Risk Management systems.

iv. Reviewing the findings of any internal investigations by the Internal Auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board.

v. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.

vi. To review the functioning of the Whistle Blower (Vigil) mechanism.

vii. To approve the appointment of Chief Financial Officer (i.e. the Whole-timeFinance Director or any other person heading the finance function or discharging thatfunction) after assessing the qualifications experience and background etc. of thecandidate and recommend to the Board.

viii. Investigate any activity within its terms of reference and any matters referredto it by the Board.

xi. Reviewing with the Auditors and Management if required about internal controlsystems the scope of audit including the observations of the Auditors and review offinancial statement before their submission to the Board and any related issues therewith.

Relationship with Statutory Internal and Secretarial Auditors

i. Recommend to the Board for appointment remuneration and terms of appointment ofAuditors of the Company.

ii. Approval of payments to Statutory Auditors for any other services rendered by them.

iii. Review and monitor the Auditor's independence and performance and effectiveness ofaudit process.

iv. Discussion with Statutory Auditors before the audit commences about the nature andscope of audit as well as post audit discussion to ascertain any area of concern.

vi. Discussion with Internal Auditors of any significant findings and follow up thereon.

Risk Management

i. Review procedures for risk assessment and minimization for informing the same to theBoard.

ii. Framing recommending to the Board and reviewing the Risk Management Policy andPlan from time to time.

Related Party Transactions

i. Approval or any subsequent modification of transactions of the Company with relatedparties.

ii. To lay down the criteria for granting the omnibus approval in line with the policyon related party transactions.

iii. To review at least on a quarterly basis the details of related partytransactions entered into by the Company pursuant to each of the omnibus approvals given.

STAKE HOLDERS RELATIONSHIP COMMITTEE

The Securities Transfer & Stakeholders Relationship Committee considers andoversees resolution of grievances of security holders and investors of the Company.

During the year the Committee met Nineteen times on 28-05-2016 10-08-201608-09-2016 21-09-2016 10-10-2016 22-10-2016 03-11-2016 21-11-2016 25-11-201606-12-2016 08-12-2016 14-12-2016 30-12-2016 13-01-2017 25-01-2017 17-02-201703-03-2017 17-03-2017 31-03-2017. Company effectuated all requests for transfer ofshares consolidation and issue of duplicate share certificate within prescribed timelimits.

The composition of the Committee as well as the particulars of attendance at theCommittee meetings during the year and other related details are given in the table below:

Name & Designation Category of Directorship Qualification No. of meetings held during the tenure No. of meetings attended
Mr. Jagdeep Dhawan ID Graduate 19 19
Mrs. Richa Gupta ID Graduate 19 19
Mr. Sameer Goel MD Graduate 19 19

Company Secretary provided secretarial support to the Committee.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee recommends the appointment of Directors andremuneration of such Directors other than Independent Directors. During the year underreview seven meetings of the Committee were held on May 12 2016 May 17 2016 May 302016 August 02 2016 August 13 2016 November 10 2016 and February 13 2017.

The composition of the Committee as well as the particulars of attendance at theCommittee meetings during the year and other related details are given in the table below:

Name & Designation Category of Directorship Qualification No. of meetings held during the tenure No. of meetings attended
Mr. Jagdeep Dhawan ID Graduate 7 7
Mrs. Richa Gupta ID Graduate 7 7
Mr. Sameer Goel MD Graduate 7 7

Company Secretary provided secretarial support to the Committee.

Pursuant to Section 178 of the Companies Act 2013 and Regulation 19 of the ListingRegulations Nomination and Remuneration Committee has the following principal terms ofreference:

1. To evaluate and recommend the composition of the Board of Directors and committeesthereof.

2. To identify persons who are qualified to become Directors and who may be appointedin senior management positions in accordance with the criteria laid down recommend to theBoard their appointment and removal.

3. To determine whether to extend or continue the term of appointment of theIndependent Director on the basis of the report of performance evaluation of IndependentDirectors.

4. To formulate a criteria for performance evaluation of Directors and the Board and tocarry out evaluation of every Director's performance.

5. Devising a Policy on Board Diversity.

6. Formulate the criteria for determining qualifications positive attributes andindependence of a Director.

7. To recommend a Policy to the Board relating to the remuneration for the DirectorsKMPs and other employees for its approval.

8. To note information on recruitment and remuneration of Senior Officers just belowthe level of Board of Directors including appointment or removal of Chief FinancialOfficer and the Company Secretary.

12. To undertake related activities functions and duties as the Board of Directors mayfrom time to time after deliberations prescribe or as may be required to be undertakenin terms of any statutory or regulatory provisions.

NOMINATION AND REMUNERATION POLICY

In compliance with Section 178(3) of the Act and Regulation 19(3) of ListingRegulations and on the recommendation of Nomination and Remuneration Committee the boardframed a "Nomination Remuneration and Evaluation Policy" on director'sappointment and remuneration including criteria for determining qualifications positiveattributes independence of a director.

The said policy may be accessed at Company's website and forms part of this report asAnnexure-VI.

PARTICULARS OF EMPLOYEES

The information as required under Section 197(12) of the Companies Act 2013 read withRule 5(1) & (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company forms part of this report asAnnexure-VII.

BOARD EVALUATION

In compliance with the provisions of Section 134(3)(p) of the Act read with Rule 8(4)of the Companies (Accounts)Rules 2014 the Board carried out annual evaluation of its ownperformance that of its Committees and individual directors.

The performance of the Board and its committees and individual directors were evaluatedby the Board after seeking inputs from all the Directors on the basis of criteria such ascomposition and structure of the Board quality of deliberations effectiveness of theprocedures adopted by the Board participation of the Board and committee meetings andgovernance reviews etc. Pursuant to Regulation 17(10) of Listing Regulations the Boardcarried out performance evaluation of Independent Directors without the participation ofthe director being evaluated.

As per Schedule IV to the Companies Act 2013 and Regulation 25 of the ListingRegulations a separate meeting of Independent Directors was held on March 31 2017 whereIndependent Directors reviewed the performance of Non-Independent Directors the Board asa whole and the Chairman of the Company.

Familiarization Programme of Independent Directors- The Independent Directors of theCompany have been updated with their roles rights and responsibilities in the company toenable them to familiarize with Company's procedures and practices.

The Company endeavors to familiarize the Independent Directors with the strategyoperations and functioning of the Company and also with changes in the regulatoryenvironment having significant impact on the operations of company and the PharmaceuticalIndustry as a whole.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At present the provisions of Section 135 of the Companies Act 2013 are not applicableto the Company.

MATERIAL CHANGES AND COMMITMENT

There is no material changes and commitments affecting the financial position of theCompany between the end of financial year of the Company and the date of this report.

Note: Revocation of Suspension in Trading of Equity Shares of the Company was receivedthough Notice from BSE Limited dated April 29 2016 effective from May 09 2016.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and the Company's operations in future.

RISK MANAGEMENT POLICY

a. DEVELOPMENT OF RISK MANAGEMENT POLICY: In terms of the requirement of the CompaniesAct 2013 and the Listing Regulations the Company has developed and implemented the RiskManagement Policy and the Audit Committee of the Company reviews the same periodically.

b. IMPLEMENTATION OF RISK MANAGEMENT POLICY: The Company recognizes that risk is anintegral and unavoidable component of business and hence is committed to managing the riskin a proactive and effective manner. The Risk Management Policy approved by the Board hasbeen effectively implemented. The Company's Management systems organizational structuresprocesses standards code of conduct and behaviors together form the Risk ManagementSystem of the Company and are managed accordingly.

c. IDENTIFICATION OF KEY RISKS WHICH MAY THREATEN THE EXISTENCE OF THE COMPANY

AND RISK MITIGATION: The common risks faced by the Company include Raw MaterialProcurement Risk Environment & Safety Risk Market Risk Technology risk BusinessOperational Risk Reputation Risk Regulatory & Compliance Risk Human Resource RiskWorking Capital and Business continuity Risk. Your Company has well defined processes andsystems to identify assess & mitigate the key risks. A platform for exceptionreporting of violations is in place which is reviewed regularly and remedial measures arebeing undertaken immediately.

VIGIL MECHANISM/ WHISTLEBLOWER POLICY

In compliance with the provisions of Section 177(9) & (10) of the Act read withRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 ofListing Regulations Company formulated a vigil Mechanism for Directors and employees toreport concerns including any unethical behavior actual or suspected frauds taking placein the Company for appropriate action thereon.

The Whistleblower policy has been hosted on Company's website viz. www.laurel.co.in.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Policies on Code of Conduct and Prevention of Workplace Harassment is displayed oncompany's website viz. www.laurel.co.in.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.

The company always endeavors to create and provide an environment that is free fromdiscrimination intimidation abuse & harassment especially to protect the integrityand dignity of woman employees. Nil complaints were received during the year under review.

DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The disclosures to be made under sub-section (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 by your Company areexplained as under:

(A) Conservation of energy-

(i) the steps taken or impact on conservation of energy The Company has pharmaceutical manufacturing unit for Bulk Drug Intermediates APIs formulations requires normal consumption of electricity. The Company takes all necessary steps to reduce the consumption of energy.
(ii) the steps taken by the company for utilising alternate sources of energy
(iii) the capital investment on energy conservation equipments
(B) Technology absorption-
(i) the efforts made towards technology absorption The Company is engaged in the process of updating latest Technology(ies).
(ii) the benefits derived like product improvement cost reduction product development or import substitution
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and
(iv) the expenditure incurred on Research and Development No expenditure was incurred on Research and Development during the year under review.

(C) Foreign exchange earnings and Outgo-

The total foreign exchange used and the total foreign exchange earned during the yearas compared to the previous financial year has been provided hereunder:

Foreign Exchange Current Year Previous Year
Earnings & Outgo (2016-17) (2015-16)
Inflow NIL NIL
Outflow Rs. 32.71 lacs
(USD 48000) NIL

HUMAN RESOURCES

Adapting to change is quintessential to a growing organization's longevity. Over thetime Laurel has changed to adapt and evolve with the changing economic landscape whilekeeping its core value firmly entrenched. The Human Resource Department of theorganization has strategic and functional responsibilities for all of the Human Resourcedisciplines in the changing scenario.

On the Industrial front the Company continued to foster cordial Industrial Relationswith its workforce during the year.

APPRECIATION AND ACKNOWLEDGEMENT

Your Directors appreciate the trust reposed by the medical fraternity and look forwardto their continued patronage. The Directors are also grateful & pleased to place onrecord their appreciation for the excellent support guidance and cooperation extended byfinancial institutions banks authorities creditors and customers.

The Board also expresses its appreciation of the understanding and support extended bythe shareholders and the commitment shown by the employees of the Company.

For and on behalf of the Board
For Laurel Organics Limited
Sameer Goel Sachin Goel
(Managing Director) (Director)
(DIN: 00161786) (DIN: 00161762)
Date : 23 August 2017
Place: New Delhi