DIRECTORS' REPORT The Board of Directors of your Company has pleasure in presenting the 13th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2015. 2. Performance of the Company During the year under review, your Company has achieved a turnover of Rs. 85.21 crores as compared to Rs. 85.26 crores in the previous year showing a steady turnover as compare to previous year. The Company has earned a net profit after tax and depreciation of Rs. 9.47 Crores as compared to Rs. 7.23 Crores in the previous year indicating a rise of 31% as compared to the previous year. The increase in profits is attributed to interest income from fixed deposits earned during the year. 3. Utilization of Funds through IPO The Company had raised Rs. 63.00 crores from the public through IPO in the year 2011-12. The funds are being utilized towards construction and development of another plant of the Company in the State of Gujarat. Your Directors are hopeful of better results in the times ahead as soon as the plant starts operating. Statement of Utilization of funds raised through public issue till 31st March 2015 is shown in the table below: 4. Dividends In view of the ongoing expansion projects and future growth plans, the Directors have decided to plough back the profits of the Company for financial year 2014-15. Accordingly, the Board does not recommend any dividend payment for the year under reference. 5. Reserves The Company has not transferred any amount to reserves and not withdrawn any amount from the reserves 6. Deposits During the financial year 2014-15, the Company has not accepted any deposits from the public 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, 2015 was Rs. 1618.64 lacs. During the year under review, there is no change in the Share Capital of the 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 the company. 9. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. They have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. 10. Directors Ms. Sonia Gupta (DIN: 06998420) was appointed as Additional Independent women Director on the Board of the Company on 29th September, 2014. The Company has received Notice under Section 160 of the Companies Act, 2013 from her signifying her candidature for the office of Women Independent Director at the ensuing Annual General Meeting. The Company has also received the requisite disclosures/ declarations from Ms. Sonia Gupta as required under Section 149 and other applicable provisions of the Companies Act, 2013. Requisite approval for their appointment is being sought at the ensuing Annual General Meeting. As per the provisions of Section 152 of the Companies Act, 2013, Mr. Rajesh Mahajan, Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Profile of all these Directors has been given in the Notice in Annexure 2. During the year, Mr. Rajnish Kumar Bedi and Mr. Deepak Mahajan were appointed as Independent Directors of the Company by the Shareholders at the 12th Annual General Meeting held on 8th August, 2014 in compliance with the provisions of Section 149, 152, Schedule IV of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014. Mr. Bhaskar Sharma, Independent Director of the Company had resigned with effect from 29th September, 2014 During the year, the following Key Managerial Personnels have resigned and newly appointed in compliance with the provisions of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 Corporate Governance is given in Annexure 4, as stipulated in Clause 49 of the Listing Agreement which forms part of this Director's Report. 15. Corporate Social Responsibility The Company has constituted a Corporate Social Responsibility Committee in accordance with 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 the Companies (Social Responsibility Policy) Rules, 2014, is given in Annexure 5 to this Directors' Report. 16. Human Resources Harmonious employees' relations prevailed throughout the year. Your Directors place on record 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 in the Corporate Governance Report on page no 18 which forms a part of this Directors' Report. 18. Audit Committee The details pertaining to composition of Audit Committee is included in the Corporate Governance Report on Page No. 19, which forms part of this Directors' Report. 19. Vigil Mechanism Pursuant to the requirements of the Companies Act, 2013, the Company has established Vigil mechanism/ Whistle Blower Policy for directors and employees to report genuine concerns about unethical behaviour, actual or suspended fraud or violation of the Company's Code of Conduct or ethics policy. The vigil mechanism provides for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Policy 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 March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for that period; c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively; f. the Directors had devised proper systems to ensure compliance with the provisions of all 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 financial statement. During the year, such controls were tested and no reportable material weaknesses 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 Return in the prescribed Form MGT 9 is given as Annexure 6 to this Directors' Report. 23. Statutory Auditors M/s. SGCO & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment. The Company has received a Certificate from the Auditors to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the Rules made thereunder, as may be applicable. The Report issued by the Statutory Auditors on the financial statement for the financial year ended 31st March, 2015 do not contain any qualification, reservation or adverse remark or disclaimer. 24. Cost Auditors Pursuant to the provisions of section 148(3) of the Companies Act, 2013, the Board has appointed M/s. Balwinder & Associates (Firm Reg No. 000201), Cost Accountants, F-125, Phase VIII B, Industrial Area, Mohali- 160071, as the Cost Auditors of the Company to conduct an audit of the cost records of bulk drugs and formulations, maintained by the Company for the financial year ending 31st March, 2015 and 31st March, 2016. The Board has approved the remuneration payable to the Cost Auditors subject to approval of the Members at the forthcoming Annual General Meeting. The Cost Audit Reports would be submitted to the Central Government within the prescribed 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 engaged the services of M/s Sharma Sarin and Associates, Company Secretaries in practice, Chandigarh, to conduct the Secretarial Audit of the Company for the financial year ended 31st March, 2015. The Secretarial Audit Report (Form MR-3) is given as Annexure 7 to this Directors' Report. The said Report does not contain any qualification, reservation or adverse remark or disclaimer. 26. Particulars of Loans, Guarantees or Investments Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 is given in Note No. 11 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 of business and at arm's length. Information about the transactions with Related Parties are presented in Note No. 33 of the Notes to the Financial Statement. Form AOC - 2 pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is given as Annexure 8 to this Directors' Report. 28. Risk Management Policy The Company does not have any Risk Management Committee due to the non-applicability of the provisions of Clause 49(VI)(C) of the Listing Agreement. As such the Company has not developed and implemented a Risk Management Policy. However, there are no risks which in the opinion of Board threaten the existence of the Company. Some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Directors' Report. 29. Disclosure pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure 9 to this Directors' Report 30. Conservation Of Energy, Technology Absorption And Foreign Exchange Earnings And Outgo The Statement of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required prescribed in Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 10 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 a Policy relating to the remuneration for Directors, Key Managerial Personnel and other employees including the criteria for determining the qualification, positive attributes and independence of a Director, as required under Section 178(1) of the Companies Act, 2013. A brief detail of the policy is given in the Corporate Governance Report on page no. 20 which forms a part of this Annual Report. 32. Evaluation of Performance of Board, its Committees and Individual directors During the year, a meeting of the Independent Directors was held to review the performance of the non-independent Directors and the Board as a whole and the Chairman on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. Mr. Deepak Mahajan was appointed as the Lead Director to oversee the evaluation process at the meeting of the Independent Directors. 33. Acknowledgement Your Directors are pleased to place on record their sincere gratitude to the Central Government, State Government(s), Financial Institutions, Bankers and Business Constituents for their continuous and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year. For and on Behalf of the Board For Brooks Laboratories Limited Sd/- Atul Ranchal Chairman (DIN: 01993861) Place: Mumbai Date: 03.09.2015 |