The Board of Directors of your Company has pleasure in presenting the 15thAnnual Report on the affairs of the Company together with the Audited Accounts of theCompany for the year ended 31st March 2017.
1. Financial Results
The Financial Results for the year are as under: -
(Rs in lacs)
|PARTICULARS ||2016-17 ||2015-16 |
|Turnover ||5753.98 ||8000.93 |
|Other Income ||12.27 ||156.10 |
|Total Income ||5766.25 ||8157.03 |
|Expenditure ||5191.98 ||6892.59 |
|Profit before Depreciation Interest & Tax (PBDIT) ||574.27 ||1264.45 |
|Financial Expenses (Interest) ||100.94 ||79.43 |
|Profit before Depreciation and Tax (PBDT) ||473.33 ||1185.02 |
|Depreciation and Amortization ||167.20 ||116.00 |
|Extraordinary items (Gain) ||0 ||12.88 |
|Profit before Tax (PBT) ||306.13 ||1081.90 |
|Income Tax (net of MAT Credit) ||110.48 ||18.55 |
|Profit after Tax ||195.65 ||1063.35 |
|Earnings per Share (in Rs.) ||1.21 ||6.57 |
2. Performance of the Company
During the year under review your Company has achieved a turnover of Rs.58 crores ascompared to Rs. 80.09 crores in the previous year showing a decline in turnover as compareto previous year. The Company has earned a net profit after tax and depreciation of Rs.1.96 Crores as compared to Rs. 10.63 Crores in the previous year. The decrease in profitsis attributed to end of excise duty exemption on our unit after 10 years of exemption. Thecompany had to compete with other manufacturing units who still enjoy excise tax holiday.Now with GST replacing excise the Brooks is at par with all units & expect to improvesales & profits significantly.
We are glad to inform you that on 7th March 2017 our world class dedicatedcarbapenem facility in Vadodara Plant started manufacturing activity.
Brooks Management decided to upgrade the facility in line with cGMP in Baddi plantsince it is a running unit we decided to upgrade facility in steps. As a first step weupgraded one injectable manufacturing line which started commercial production inNovember 2016. Expansion and upgradation of other injectable manufacturing line wasinitiated in June 2017 and expected to resume production by September 2017. Theseactivities also were also reason for drop in sales.
We are confident that in coming years new Baroda facility & revamped Baddifacility our performance will be much better on account of sales and profit.
3. Utilization of Funds through IPO
The Company had raised money by way of Initial Public offer in the financial year2011-12 and has fully utilized the money for the purpose as raised by way of InitialPublic offer.
In view of the ongoing expansion projects and future growth plans the Directors havedecided to plough back the profits of the Company for financial year 2016-17. Accordinglythe Board does not recommend any dividend payment for the year under reference.
The Company has not transferred any amount to reserves and not withdrawn any amountfrom the reserves.
During the financial year 2016-17 the Company has not accepted any deposits from thepublic within the provisions of Chapter V of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014.
7. Share Capital
The paid up Equity Share Capital of the Company as on 31st March 2017 wasRs. 1618.64 lacs. During the year under review there is no change in the Share Capital ofthe Company.
8. Change in the nature of business if any
During the period under review there was no change in the nature of business of thecompany.
9. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report.
They have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
10. Changes in Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. AtulRanchal Whole Time Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.
During the year there is no change in the Key Managerial Personnel of the Company.
11. Statement on declaration given by the Independent Directors
As required under Section 149 (7) of the Companies Act 2013 all the IndependentDirectors have given their respective declarations that they meet the criteria ofindependence as specified in Section 149 (6) of the Companies Act 2013.
12. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
There is no significant and material order passed by the regulators or courts ortribunals during the financial year 2016-17 that impacts the going concern status andcompany's operations in future.
13. Details of Subsidiary/Joint Ventures/Associate Companies
The Company does not have any Subsidiary or Joint Ventures or Associate Companies
14. Corporate Governance Report and Management Discussion & Analysis
Your Company is committed to good corporate governance practices. The Report onCorporate Governance is given in Annexure 1 and Management Discussion & Analysisprovided above as stipulated in Regulation 34 of listing Regulations forms part of thisDirector's Report.
15. Corporate Social Responsibility
The Company has constituted a Corporate Social Responsibility Committee in accordancewith Section 135 of the Companies Act 2013 and rules framed thereunder.
A report on the CSR activities in the prescribed format as set out in Annexure to theCompanies (Social Responsibility Policy) Rules 2014 is given in Annexure 2 to thisDirectors' Report. The Policy is disclosed on the Company's website: www.brookslabs.net .
16. Human Resources
Harmonious employees' relations prevailed throughout the year. Your Directors place onrecord their appreciation to all employees for their hard work and dedication.
17. Number of Meetings of the Board
The details of the number of meetings of the Board and other Committees are given inthe Corporate Governance Report in Annexure 1 which forms a part of this Annual Report.
18. Audit Committee
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report in Annexure 1 which forms part of this Annual Report. All therecommendations of Audit Committee were accepted by the Board of Directors.
19. Vigil Mechanism
Pursuant to the requirements of the Companies Act 2013 the Company has establishedVigil mechanism/Whistle Blower Policy for directors and employees to report genuineconcerns about unethical behavior actual or suspended fraud or violation of the Company'sCode of Conduct or ethics policy. The vigil mechanism provides for adequate safeguardsagainst victimization of persons who use such mechanism and make provision for directaccess to the Chairman of the Audit Committee in appropriate or exceptional cases. ThePolicy is disclosed on the Company's website: www.brookslabs.net .
20. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:
a. in the preparation of the annual accounts for the year ended 31st March2017 the applicable
accounting standards had been followed along with proper explanation relating tomaterial 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 and fair view of thestate of affairs of the Company as at 31st March 2017 and of the profit of theCompany for that period;
c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d. the Directors had prepared the annual accounts on a going concern basis;
e. the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
21. Internal Financial Controls related to financial statement
The Company has in place adequate internal financial controls related to financialstatement. During the year such controls were tested and no reportable materialweaknesses in the design or operation were observed.
22. Extract of Annual Return
Pursuant to Section 134(3)(a) of the Companies Act 2013 an extract of Annual Returnin the prescribed Form MGT 9 is given as Annexure 7 to this Directors' Report.
23. Statutory Auditors
M/s. SGCO & Co. Chartered Accountants Mumbai were appointed as StatutoryAuditors of the Company at the 13th Annual General meeting held on 29thSeptember 2015 till the conclusion of 17th Annual General Meeting of theCompany. As per the provisions of Section 139 of the Companies act 2013 the appointmentof auditors is required to be ratified by Members at every Annual General Meeting.
The Report given by the Statutory Auditors on the financial statement of the Company ispart of the Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the auditors in their Report.
24. Cost Auditors
Pursuant to the provisions of section 148(3) of the Companies Act 2013 the Board hasappointed M/s. Balwinder Singh & Associates (Firm Reg No. 000201) Cost AccountantsF-125 Phase VIII B Industrial Area Mohali- 160071 as the Cost Auditors of the Companyto conduct an audit of the cost records of bulk drugs and formulations maintained by theCompany for the financial year ending 31st march 2018. The Board has approvedthe remuneration payable to the Cost Auditors subject to ratification of the Members atthe forthcoming Annual General Meeting.
The Cost Audit Reports would be submitted to the Central Government within theprescribed time.
25. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company engagedthe services of M/s. Sharma Sarin and Associates Company Secretaries in practiceChandigarh to conduct the Secretarial Audit of the Company for the financial year ended31st March 2017.
The Secretarial Audit Report (Form MR-3) is given as Annexure 3 to this Directors'Report. The said Report does not contain any qualification reservation or adverse remarkor disclaimer.
26. Particulars of Loans Guarantees or Investments
Details of Investments covered under the provisions of Section 186 of the CompaniesAct 2013 is given in the Note No. 12 of the Notes to the Financial Statement.
27. Contracts and arrangements with Related Parties
All transactions of the Company with Related Parties are in the ordinary course ofbusiness and at arm's length. Information about the transactions with Related Parties ispresented in Note No. 33 in Notes to the Accounts.
Form AOC - 2 pursuant to the provisions of Section 134 (3) (h) of the Companies Act2013 read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is given as Annexure 5to this Directors' Report.
28. Risk Management Policy
The Company does not have any Risk Management Committee due to the non-applicability ofthe provisions of Regulation 21 of the Listing Regulations whereas the Company has RiskManagement Plan. Business Continuity Plans are periodically reviewed and tested to enhancetheir relevance. The Risk Management Framework covering business operational andfinancial risk is being continuously reviewed by the Audit Committee. At present in theopinion of the Board of Directors there are no risks which may threaten the existence ofthe Company.
29. Disclosure pursuant to Section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is given in Annexure 6 to this Directors' Report.
The Statement pursuant to Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to the Company for thefinancial year 2016-17.
30. Conservation of Energy Technology Absorption And Foreign Exchange Earnings AndOutgo
The Statement of conservation of energy technology absorption foreign exchangeearnings and outgo as required prescribed in Rule 8(3) of the Companies (Accounts) Rules2014 is given in Annexure 4 to this Directors' Report.
31. Policy on appointment and remuneration of Directors
The Nomination and Remuneration Committee of the Company has recommended to the Board aPolicy relating to the remuneration for Directors Key Managerial Personnel and otheremployees including the criteria for determining the qualification positive attributesand independence of a Director as required under Section 178(1) of the Companies Act2013 which was adopted by the Board. A brief detail of the policy is given in theCorporate Governance Report in Annexure 1 which forms a part of this Annual Report. ThePolicy is disclosed on the Company's website: www.brookslabs.net .
32. Evaluation of Performance of Board its Committees and Individual directors
During the year a meeting of the Independent Directors was held to review theperformance of the nonindependent Directors and the Board as a whole and the Chairman onthe parameters of effectiveness and to assess the quality quantity and timeliness of theflow of information between the Management and the Board. Mr. Deepak Mahajan was appointedas the Lead Director to oversee the evaluation process at the meeting of the IndependentDirectors.
Your Directors are pleased to place on record their sincere gratitude to the CentralGovernment State Government(s) Financial Institutions Bankers and Business Constituentsfor their continuous and valuable cooperation and support to the Company. They also takethis opportunity to express their deep appreciation for the devoted and sincere servicesrendered by the employees at all levels of the operations of the Company during the year.
| ||For and on Behalf of the Board |
|Place: Mumbai ||For Brooks Laboratories Limited |
|Date: 02.09.2017 || |
(Chairman) (DIN: 01998361)