Your Directors are pleased to present the Twenty Seven Annual Report on the businessand operations of the Company together with the Audited Financial Statements for the yearended March 312020.
The summarized financial result for the year areas under:
(Rs. In lacs)
|Particulars ||2019-20 ||2018-19 |
|Total Revenue (Including other operating revenue) ||2848.79 ||3399.20 |
|Loss before Tax (PBT) ||(571.44) ||229.47 |
|Less: a) Current Tax ||0 ||73.04 |
|b) Deferred Tax ||182.95 ||-3.59 |
|Net Profit/ (Loss) for the period ||(388.49) ||160.02 |
|Total Comprehensive Income ||(372.59) ||160.90 |
|Bais & Diluted EPS per equity share of face value Rs. 10 each (in Rs.) ||(5.58) ||2.30 |
|Equity shares of face value of Rs. 10 each (In Rs.) ||696.52 ||696.52 |
COMPANY'S PERFORMANCE REVIEW
Financial Year 2019-20 has been a challenging year with weakening macro-economicconditions the drop in revenue is attributed due to multiple licenses / approvals thattwo of the units undergoing shift to new location are pending technical audit / approval /certification from competent authorities as well as self-revocation of US FDA FEI numberas informed on 30th September 2019 to the Bombay Stock exchange Limited thereafter USFDAhas given us EIR on 25/11/2019 under VAI Category for same place to the company towardsthe end of the year. Against this challenging backdrop our financial year 2019-20performance was decline by 1.19% with registered Service of Rs. 2848.79 Lacs as compare toPrevious Year of Rs. 3399.20 Lacs the Net loss before Tax for the year under review hasamounted to Rs. 571.44. Net loss after tax for the year is Rs. 372.59 lacs for the Year2019-20.
EXTRACT OF ANNUAL RETURN
In compliance with section 92(3) section 134 (3) (a) and rule 11 of the Companies(Management and Administration) Rules 2014 the extract of the annual return is annexed asForm No. MGT-9 with this report
The board of directors has not recommended any Dividend after considering the relevantcircumstances and keeping in view the financial position of the company for the year underreview.
PERFORMANCE EVALUATION OF BOARD COMMITTEE AND DIRECTORS BOARD EVALUATION
Pursuant to the provisions of the Act and the Listing Regulations a structuredquestionnaire was prepared after taking into consideration the various aspects of theBoard's functioning composition of the Board and its Committees culture execution andperformance of specific duties obligations and governance.
The performance evaluation of the Directors was completed during the year under review.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors and Non-Executive Director. The Board of Directorsexpressed their satisfaction with the evaluation process.
Management Discussion and Analysis Report
The Management Discussion and Analysis forms an integral part of this Report and givesdetail of the overall industry structure developments performance and state of affairsof the Company's various businesses viz. the decorative business internationaloperations industrial and home improvement business internal controls and theiradequacy risk management systems and other material developments during the financialyear.
The increasing widespread of Covid-19 has put the world into varying degrees ofuncertainty and disturbed the economic order completely.
Global recession in 2020-21 is evident and risk of prolonging to the next fiscal yearsis extremely high as Nations across the globe shut down economic and social activities tolimit the spread of Covid-19 and the fatalities associated with it. Your Company hasproper and adequate systems of internal controls system in place and there has been noadverse impact of Covid-19. The management is constantly striving in ensuring an effectivecontrol internal financial reporting and control measure.
Material Changes and Commitments
There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report. There have been nomaterial changes and commitments affecting the financial position of the Company betweenthe end of the financial year and date of this report.
Change in the Nature of Business If Any
There was no change in the nature of business of the Company during the Financial Yearended 31st March 2020.
Change of Registered Office
The Board of Directors glad to inform you all that company has recently been shiftedregistered office to new location within the local Municipal limits of City at Survey No9/1 Near Tulsiyana Industrial Park Gram Kumerdi Indore- 452010 Madhya Pradesh India.It will serve as the New Central Laboratories along with the registered office of theCompany.
The said decision was taken by Board at its meeting held on 30th July 2020 keeping thefinancial as well as corporate position of the Company that is it will aid the Company inraising the business sales as well as building a good brand image among stakeholders.
Foreign Exchange Earnings and Outgo
Foreign Exchange outgo: Rs. 23616301/- Foreign Exchange Earnings: Rs. 8765719/-
GOVERNANCE AND ETHICS
a. Corporate Governance
Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing an organizations brand and reputation. The Companies Act 2013and amended SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 havestrengthened the governance regime in the country. The Company is in compliance with thegovernance requirements provided under the new law and had proactively adopted manyprovisions of the new law ahead of time. The Company is committed to maintain the higheststandards of corporate governance and adhere to the corporate governance requirements setout by SEBI. Integrity and transparency are key to our corporate governance practices toensure that we gain and retain the trust to four stakeholders at all the times.
A separate report on Corporate Governance (Annexure II) is provided together with aCertificate from the Statutory Auditors of the Company regarding compliance of conditionsof Corporate Governance as stipulated SEBI (Listing obligation and DisclosureRequirements) Regulation 2015 (Annexure III) A Certificate of the MD and CFO of theCompany inter alia confirming the correctness of the financial statements and cash flowstatements adequacy of the internal control measures and reporting of matters to theAudit Committee is also annexed.(Annexure IV)
b. Directors & Key Managerial Personnel Appointments:
Re-appointments : In accordance with the Articles of Association of the Company andSection 152 of The Companies Act 2013 Ms. Himika Choksi (DIN:00154926) Whole-timeDirector is due to retire by rotation at the ensuing Annual General Meeting and beingeligible offer herself for re-appointment.
The Board of Directors at its meeting held on 29th August 2020 has approved theRe-appointment of Mr. Vyangesh Choksi as Whole time Director of the Company with effectfrom 1st September 2020 for a period of 5 years subject to approval of shareholder Membersat Forthcoming Annual General Meeting.
The Company has received disclosures from all the directors and none of the directorshas been disqualified as stipulated under Section 164 of the Companies Act 2013 and rulesmade thereunder
c. Number of meeting of Board of Directors
The Board of Directors met Four (4) times during the Financial Year under review viz.30th May 2019 12th August 2019 14th Nov 2019 and 14th Feb 2020. The maximum gap betweenany 2 meetings did not exceed 120days.
d. Independent Directors and their Meeting
Your Company has received annual declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of Independence provided in Section149(6) of the Companies Act 2013 and Regulations 16(1) (b) & 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as Independent Director during the year.
The Independent Directors met on 29th May 2019 without the attendance ofNon-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of Non-Independent Directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.
e. Secretarial Standards
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company
f. Audit Committee & Composition
The Audit Committee comprises Independent Directors namely Mr. Sudharshan Shastri(Chairman) Mr. Ratnesh Sadoriya (Member) Mr. N.K. Mani (Member) During the year allrecommendations made by the Audit Committee were accepted by the Board.
g. Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises Independent Directors namely Mr.Sudarshan Shastri (Chairman) Mr. Mayank Pandey (Member) Mr. N.K. Mani (Member) duringthe year all recommendations made by the Nomination and Remuneration Committee wereaccepted by the Board.
h. Stakeholder Relationship Committee
The Stakeholder Relationship Committee comprises Independent Directors namely MrSudarshan Shastri (Chiarman) Mr Ratnesh Sadoriya (Member) Mr N. K. Mani (Member) Duringthe Year all recommendation made by the Stakeholder Relationship Committee were acceptedby the Board.
i. Contracts and Arrangements with Related Parties
All Related Party Transactions which are foreseen and repetitive in nature are placedbefore the Audit Committee on a yearly basis for obtaining prior omnibus approval of thecommittee. The transactions entered into pursuant to the omnibus approval are placedbefore the Audit Committee for review and approval on quarterly basis.
During the financial year 2019-20 there were no transactions with related partieswhich qualify as material transactions under SEBI (Listing obligation and DisclosureRequirements) Regulation 2015 and the Companies Act.
In line with the requirements of the Companies Act 2013 and Equity SEBI (Listingobligation and Disclosure Requirements)Regulation 2015 the Company has formulated aPolicy on Related Party Transactions which is also available on Company's website athttp://www.choksilab.com/Downloads The Policy intends to ensure that proper reporting;approval and disclosure processes are in place for all transactions between the Companyand Related Parties.
Particulars of Employees
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013read with rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled there to excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company. If any member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.
Your Company's mission envisages a strong sense of commitment to work by being a caringpharmaceutical company which will continuously strive to enhance health through qualityService. Your Company aims at consistently providing service that meet customer needs aswell as national and international regulatory requirements as may be applicable. YourCompany has been steadily raising the bar setting higher goals for incrementalperformance and enlarging the scope of its initiatives. The environmental policy of yourCompany emphasizes being a caring Company which shall protect and promote the environmentby complying with applicable environmental regulations and preventing pollution in all itsoperations.
INTERNAL FINANCIAL CONTROL
According to Section 134(5) (e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theand efficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has adequate system of internal controls to ensure that all the assets aresafeguarded and are productive. Necessary checks and controls are in place to ensure thattransactions are properly verified adequately authorized correctly recorded and properlyreported. The Internal Auditors of the Company conducts Audit of various departments toensure that internal controls are in place;
Nomination and Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee hasadopted a policy for selection appointment and remuneration of Directors Key ManagerialPersonnel and Senior Management. The details of this Policy are given hereunder. Thepolicy is available on the Company's website at https://www.choksilab.com
The Company considers human resources as its invaluable assets. The Nomination andRemuneration Policy aims to pay equitable remuneration to all Directors Key ManagerialPersonnel and employees of the Company to harmonize the aspirations of human resourcesconsistent with the goals of the Company. The Remuneration Policy for all employees isdesigned to attract talented personnel and remunerate them fairly and responsibly thisbeing continuous ongoing exercise at each level in the organization.
Whole Time/ Managing Director
The Company pays remuneration by way of salary perquisites and allowances (fixedcomponent) to its Managing Director. A proper balance between fixed and variable componentis aimed at. Salary is paid based on the recommendation of the Nomination and RemunerationCommittee and as approved by the Board of Directors The remuneration paid to the WholeTime Director is determined keeping in view the industry benchmark and the relativeperformance of the Company compared to the industry performance. The Company paysremuneration by way of salary perquisites and allowances to its Whole Time Director.
Non-Executive Directors receive sitting fees for attending Meetings of the Board andits Committees as per the provisions of the Act and the Rules made there under. No otherremuneration is paid to the Non-Executive Directors. The Nomination and RemunerationCommittee may recommend to the Board the payment of commission taking into account theevaluation of the performance of the Directors.
Key Managerial Personnel (KMP) and other Employees
The remuneration of KMP other than the Whole Time Director and other Senior ManagerialEmployees largely consists of basic salary perquisites allowances and performanceincentives (wherever paid). Perquisites and retirement benefits are paid according to theCompany's policy. The components of the total remuneration vary for different grades andare governed by the industry pattern qualification and experience merits and performanceof each employee. The Company while deciding the remuneration package takes intoconsideration the current employment scenario and remuneration package prevalent in theindustry and peer group companies.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Act:
a. in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
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;
c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors 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 are operatingeffectively; and
f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
AUDITORS & THEIR REPORT Statutory Auditors:
M/s. Subhash C and Jain Anurag & Associates having ICAI Registration No. 004733Cwere appointed as Statutory Auditor of the Company for a term of 5 (five) consecutiveyears at the Annual General Meeting held on 25thSeptember 2017 They have confirmed thatthey are not disqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory. Qualification mention and Auditors report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the CompaniesAppointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Shivani Mittal proprietor of M/s Shivani Mittal & Company CompanySecretary (ACS:58414C.P. No.22012) to undertake the Secretarial Audit of the Company. TheSecretarial Auditors in their report for the year 201920 has confirmed the compliances ofby the Company as covered in their report.
The Report of the Secretarial Audit for the year 2019-20 in the Form MR-3 is annexedherewith as Annexure VI. There is no qualification reservation or adverseremark or in Secretarial Audit Report except the following;
In compliance with the provisions of Section 138 of Companies Act 2013 read withCompanies (Accounts) Rules2014 your Company has appointed as Internal auditor M/s.Tanmay V. Rajurkar & Co. Chartered Accountants for the Financial Year 2019-20.
Reporting of Fraud by auditors
During the year under review neither the statutory auditor nor the secretarial auditorhas reported to the audit committee under Section 143 (12) of the Companies Act 2013any instances of fraud committed against the Company by its officers or employees thedetails of which would need to be mentioned in the Board's report.
Related Party Transactions
In line with the requirements of the Companies Act 2013 and SEBI Listing obligationand disclosure Regulation 2015(LODR) your Company has formulated a Policy on RelatedParty Transactions which is also available on http:// www.choksilab.com. All Related PartyTransactions are placed before the Audit Committee for review and approval of theCommittee on a quarterly basis. Also the Company has obtained prior omnibus approval forRelated Party Transactions occurred during the year for transactions which are ofrepetitive nature and / or entered in the ordinary course of business and are at arm'slength.
All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. Your Company had notentered into any transactions with related parties which could be considered material interms of Section 188 of the Companies Act 2013. Accordingly the disclosure of relatedparty transactions as required under Section134 (3)(h) of the Companies Act 2013 in FormAOC 2:
Your Company Comply Pursuant to Regulation 23(9) of the SEBl (Listing Obligations &Disclosure Requirements) 2015 as amended vide SEBl (Listing Obligations and DisclosureRequirements) (Amendment) Regulations 2018 Submit note on Related Party Transactions onconsolidated basis for the financial year ended 31st March 2020 to the Stock Exchange.
Particulars of Loans Guarantees or Investments:
The particulars of loans guarantees and investments as on 31st March 2020 are coveredunder the provisions of Section186of the Companies Act 2013 is given in the Notes toFinancial statements of the Company.
Significant and Material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company:
There are no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status of the Company and its futureoperations.
Details of Fixed Deposits
During the year under review the Company has not accepted any Deposit under Section 73of The Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.It is further stated that the Company does not have any deposits which are not incompliance with the requirements of Chapter V of the Companies Act 2013.
Prevention of Sexual Harassment at Workplace:
The company has a Policy for prevention of Sexual Harassment at the Workplace in linewith the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013 Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. During the year underreview there were no complaints pertaining to sexual harassment.
Business Responsibility Report
Regulation 34 (2) of the Listing Regulations provides that the Annual Report of theTop 500 listed entities based on market capitalization (calculated as on March 31 of everyfinancial year) shall include a Business Responsibility Report("BRR"). Sinceyour Company does not feature in the Top 500listed entities as per market capitalizationas on March 312020 the Business Responsibility Report for the financial year2019-2020does not form a part of this Annual Report.
Health and Safety
Health and Safety issues are addressed systematically effectively and proactively.Your Company takes pride in providing various forms of medical assistance to itsemployees. Periodic health check-ups are carried out for all employees and regulartraining programs are organized on safety and precautionary measures. Fire fightingtraining programs and first aid training camps are organized regularly educate workers andemployees at the plant locations and corporate office.
We would like to thank to all our Stakeholders Investors Bankers customersSuppliers Government agencies stock exchanges and depositories Auditors legaladvisors consultants business associates service providers for their continuedcommitment and invincible enthusiasm which made this year productive and pleasurable.
The Board also places on record their deep sense of appreciation towards all itsEmployees at all levels for adopting the values of the Company and their hard work duringthe year.
| ||For and on behalf of the Board of Directors |
| ||Choksi Laboratories Limited |
|Place: Indore ||Sd/- Sunil Choksi |
|Date: 29th August 2020 ||Chairman &Managing Director |
| ||DIN-00155078 |