Ortin Laboratories Ltd.
|BSE: 539287||Sector: Health care|
|NSE: ORTINLABSS||ISIN Code: INE749B01012|
|BSE 00:00 | 19 Mar||14.01||
|NSE 00:00 | 19 Mar||14.25||
|Mkt Cap.(Rs cr)||24|
|Mkt Cap.(Rs cr)||23.73|
Ortin Laboratories Ltd. (ORTINLABSS) - Director Report
Company director report
To the Members
The Directors have pleasure in presenting before you the 31st Board's Report of theCompany together with the Audited Statements of Accounts for the year ended 31stMarch2018.
1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFAIRS:
The performance during the period ended 31st March 2018 has been as under:
(Rs. In Lakhs)
2. MATERIAL CHANGES AND COMMITMENTS:
There were no material changes and commitments affecting financial position of thecompany between 31stMarch and the date of Board's Report. (i.e. 14.08.2018)
3. CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the period under review and the date of Board's Report there was no change inthe nature of Business.
Keeping the Company's expansion and growth plans in mind your Directors have decidednot to recommend dividend for the year.
The Company has not carried any amount to the reserves.
6. BOARD MEETINGS:
The Board of Directors duly met 6 (Six) times on 30.05.2017
31.08.2017 14.09.2017 14.12.2017 22.12.2017 and 13.02.2018
7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received a declarations from Mr. J. R. K. Panduranga Rao Mr. M.Tippayya Mr. K. Pradyumna Teja Mr. T Seshagiri and Mr. B. Gopal Reddy and Mrs. T UmaSangeetha Independent directors of the company to the effect that they are meeting thecriteria of independence as provided in Sub-section (6) of Section 149 of the CompaniesAct 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015.
8. DIRECTORS OR KMP APPOINTED OR RESIGNED.
Mrs. Uma Sangeetha was appointed as additional director w.e.f.
27.04.2018. Mrs. Lakshmi Sravani Dasari Non-Executive Directorand Mr.M. TippayyaIndependent Director of the Company have resigned from the directorship of the Companywith effective from 17.11.2017 and 30.07.2018 respectively. The Board places on recordsincere its appreciation for the valuable services rendered by her during her tenure asDirector.
Mr. S. Mohan Krishna Murthy and Mr. S. Balaji Venkateswarlu retire by rotation andbeing eligible offers himself for re-appointment.
As required under regulation 36 (3) of the SEBI (LODR) Regulations 2015 briefparticulars of the Directors seeking appointment/re- appointment and Directors resigningare given as under:
9. FAMILIARISATION PROGRAMMES:
The Company familiarises its Independent Directors on their appointment as such on theBoard with the Company their roles rights responsibilities in the Company nature ofthe industry in which the Company operates etc. through familiarisation programme. TheCompany also conducts orientation programme upon induction of new Directors as well asother initiatives to update the Directors on a continuing basis. The familiarisationprogramme for Independent Directors is disclosed on the Company's website www.ortinlabsindia.com
10. COMMITTEES OF THE BOARD:
The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority.
The following statutory Committees constituted by the Board function according to theirrespective roles and defined scope:
Audit Committee of Directors
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Risk Management Committee
Details of composition terms of reference and number of meetings held for respectivecommittees are given in the Report on Corporate Governance which forms a part of thisReport.
11. VIGIL MECHANISM:
Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. The same has been placed on the website of the Company.
12. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to 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) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:
The Company does not have any subsidiaries/associates/Joint ventures
14. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.
During the year neither any company became its subsidiary associates/Joint ventures norceased to be its subsidiary associates/Joint ventures.
15. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 annexed as a part of this Annual Report
16. STATUTORY AUDITORS:
The members of the company in accordance with section 139 of the Companies Act 2013had passed a resolution for appointment of M/s. Sathuluri & Co. as Statutory Auditorsof the company for a period of 5 years in the AGM held on 29.09.2017 to hold office up tothe conclusion of 35th Annual General Meeting of the company to be held in the financialyear 2021-2022 which is subject to ratification as per the provisions of Companies Act2013.
However pursuant to notification from the MCA dated 07.05.2018 ratification ofappointment of statutory auditors at every Annual General Meeting has been omitted.
17. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:
There have been no frauds reported by the auditors u/s 143(12).
18. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 134(3) (f) & Section 204 of the CompaniesAct 2013 Secretarial audit report as provided by Mr. Vivek Surana Practicing CompanySecretary is annexed to this Report as an annexure.
19. QUALIFICATIONS IN AUDIT REPORTS:
Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2018 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the marketexpected in the coming years.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit Report for the year ended March 312018 on the Compliances according to the provisions of section 204 of the Companies Act2013 and the same does not have any reservation qualifications or adverse remarks exceptthat the company does not have internal auditors.
The Board has noted the same and is making efforts to appoint Internal auditors for theCompany and will appoint the same in due course of time.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The required information as per Sec.134 (3) (m) of the Companies Act 2013 is providedhereunder:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D) : NIL
2. Technology absorption adoption and innovation : NIL
C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings : NIL
Foreign Exchange Outgo : NIL
21. DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING:
Your Company has not accepted any deposits falling within the meaning of Sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the financial year under review.
22. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
During the period under review there were no significant and material orders passed bythe regulators or Courts or Tribunals impacting the going concern status and the company'soperations in future.
23. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received noticed for inefficiency or inadequacy of suchcontrols. The Company maintains appropriate system of internal control includingmonitoring procedures to ensure that all assets are safeguarded against loss fromunauthorized use or disposition. Company policies guidelines and procedures provide foradequate checks and balances and are meant to ensure that all transactions areauthorized recorded and reported correctly.
The properties and assets of your Company are adequately insured.
25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given loans Guarantees or made any investments during the yearunder review which attracts provisions of Section 186 of the Companies act 2013.
26. CREDIT & GUARANTEE FACILITIES:
The Company has been availing facilities of Credit and Guarantee as and when requiredfor the business of the Company from Karnataka Bank Limited.
27. COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR POLICY:
Since the Company does not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
28. RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis.
Your Directors draw attention of the members to Note 2.28 to the financial statementwhich sets out related party disclosures.
29. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is applicable to your Company. M/s. KJU & Associates are the CostAuditors of your Company.
30. RATIO OF REMUNERATION TO EACH DIRECTOR:
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies(Appointment & Remuneration) Rules 2014 read with Schedule V of theCompanies Act 2013 the ratio of remuneration of Managing Director (S. Murali KrishnaMurthy) Joint Managing Director (G. Venkata Ramana) Wholetime Directors (S. MohanKrishna Murthy S. Balaji Venkateswarulu S. Srinivas Kumar) and Whole-time Director cumCFO (B. Satyanarayana Raju) to the median remuneration of employees is 4.46:1 16.35:12.35:1 4.46:1 4.46:1 and 12.38:1 respectively.
31. CORPORATE GOVERNANCE:
A Separate section titled "Report on Corporate Governance" along with theAuditor's Certificate on Corporate Governance as stipulated under Regulation 34 read withSchedule V of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as a part of this Annual Report
32. SECRETARIAL STANDARDS
The Company is in compliance with the applicable secretarial standards.
The Board of Directors in its meeting held on 31.07.2017 approved the scheme ofarrangement between Ortin laboratories limited (Demerged Company) and Vineet LaboratoriesLimited (Resulting Company) for transfer by way of Demerger of the API IntermediatesDivision of the Demerged Company (defined as demerged undertaking) as a going concern tothe Resulting Company and consequential restructure of its share capital.
The Demerged Company has presently 2 (two) Divisions namely Formulations Division andAPI Intermediates Division. The formulations division is being operated through the Unit Ilocated at Plot No.275 & 278 I.D.A Pashamylaram Medak Dist. Telangana and the APIIntermediates division is being operated through the Unit II located at Sy. No. 300Malkapur Village Choutuppal Mandal Nalgonda District Telangana. With an objective ofachieving operational efficiencies and streamlining its current structure the DemergedCompany proposes to Demerge the API Intermediates Division currently operating through theUnit II (to the Resulting Company and the Demerged Company shall continue to carry on theFormulations Division Business.
The Company has applied to NSE and BSE for the No Objection to the Scheme ofArrangement and the approval is awaited
EVENT BASED DISCLOSURES
During the year under review the Company has not taken up any of the followingactivities:
1. Issue of sweat equity share: NA
2. Issue of shares with differential rights: NA
3. Issue of shares under employee's stock option scheme: NA
4. Disclosure on purchase by company or giving of loans by it for purchase of itsshares: NA
5. Buy back shares: NA
6. Disclosure about revision: NA
7. Preferential Allotment of Shares: NA
34. NON-EXECUTIVE DIRECTORS' COMPENSATION AND DISCLOSURES
None of the Independent / Non-Executive Directors has any pecuniary
relationship or transactions with the Company which in the Judgment of the Board mayaffect the independence of the Directors.
35. CEO/ CFO Certification
The Managing Director and CFO certification of the financial statements for the year2017-18 is annexed in this Annual Report.
36. EMPLOYEE RELATIONS:
Your Directors are pleased to record their sincere appreciation of the contribution bythe staff at all levels in the improved performance of the Company.
None of the employees is drawing a remuneration of Rs. 10200000/- and above perannum or Rs.850000/- and above in aggregate per month the limits prescribed underSection 197 of the Companies Act 2013 read with rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
37. BOARD EVALUATION:
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees. The Board's functioningwas evaluated on various aspects including inter alia degree of fulfillment of keyresponsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.
Evaluation of the Committees performance was based on the criteria like compositionits terms of the reference and effectiveness of committee meetings etc. IndividualDirector's performance evaluation is based on their preparedness on the issues to bediscussed meaningful and constructive discussions and their contribution to the Board andCommittee meetings. The Chairperson was evaluated mainly on key aspects of his role. Theseperformance exercises were conducted seeking inputs from all the Directors / CommitteeMembers wherever applicable.
The evaluation procedure followed by the company is as mentioned below:
i) Feedback is sought from each Director about their views on the performance of theBoard covering various criteria such as degree of fulfillment of key responsibilitiesBoard structure and composition establishment and delineation of responsibilities tovarious Committees
effectiveness of Board processes information and functioning Board culture anddynamics quality of relationship between the Board and the Management and efficacy ofcommunication with external stakeholders. Feedback was also taken from every Director onhis assessment of the performance of each of the other Directors.
ii) The Nomination and Remuneration Committee (NRC) then discusses the above feedbackreceived from all the Directors.
iii) Based on the inputs received the Chairman of the NRC also makes a presentation tothe Independent Directors at their meeting summarizing the inputs received from theDirectors as regards Board performance as a whole and of the Chairman. The performance ofthe Non-Independent Non-Executive Directors and Board Chairman is also reviewed by them.
iv) Post the meeting of the Independent Directors their collective feedback on theperformance of the Board (as a whole) is discussed by the Chairman of the NRC with theChairman of the Board. It is also presented to the Board and a plan for improvement isagreed upon and is pursued.
v) Every statutorily mandated Committee of the Board conducts a selfassessment of itsperformance and these assessments are presented to the Board for consideration. Areas onwhich the Committees of the Board are assessed include degree of fulfilment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.
vi) Feedback is provided to the Directors as appropriate. Significant highlightslearning and action points arising out of the evaluation are presented to the Board andaction plans are drawn up. During the year under report the recommendations made in theprevious year were satisfactorily implemented.
The peer rating on certain parameters positive attributes and improvement areas foreach Board member are also provided to them in a confidential manner. The feedbackobtained from the interventions is discussed in detail and where required independentand collective action points for improvement are put in place.
38. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at workplace
(Prevention Prohibition and Redressal) Act 2013. Internal Complaint Committee (ICC)has been set up to redress complaints received regarding sexual harassment. All employeesare covered under this policy. The following is the summary of sexual harassmentcomplaints received and disposed during the calendar year.
No. of complaints at the beginning of the year: Nil
No. of complaints received : Nil
No. of complaints disposed off : Nil
Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of your Company.
Your Directors also wish to place on record their appreciation of businessconstituents banks and other financial institutions shareholders of the Company andother statutory authorities etc. for their continued support for the growth of theCompany.
For and on behalf of the Board of For Ortin Laboratories Limited