AFFLUENCE

DIRECTORS REPORT

To

The Members,

Medibios Laboratories Limited

1. Your Directors have pleasure in presenting in informing you that the Constitution of your Company has been changed from Private Limited Company to Public Limited Company w.ef. 07th March, 2018 as per Certificate issued by Ministry of Corporate Affairs [Registrar of Companies].Also, having pleasure in presenting their Twenty Third Annual Report along with the Balance Sheet, Profit and Loss Account and Auditors’ Report for the year ended on 31st March, 2018.

2. FINANCIAL HIGHLIGHTS:

The highlights of your Company’s financial results for the period ended March 31, 2018 are as follows:                                         

                                                                                                                                              (Amount in Rupees)

3. STATE OF COMPANIES AFFAIRS:

For the financial year ended 31st March, 2018, Revenue from operations (net) and other income is Rs.59,95,29,269/-compared to previous year ofRs.49,45,25,886/-.

Further, Company has for the year ended 31st March, 2018, made a net profit of Rs.556,90,807/- (Previous year profit of Rs.551,79,631/- after providing for taxation).

The turnover of the Company has increased by 26%, while profit after tax has increased by 1% only Company’s profit has not increased proportionately mainly due to fall in Job Work Revenue.

The Company has reduced the negative impact of Excise / Sales Tax Heaven Zones to a great extent by concentrating on Own Exports and Production for Merchant Exports. This is now greatly added by introduction of GST from 1st July 2017 which has introduced Level playing Field across the Industry. Marginal benefit remains to Tax heaven zones, which also will be over for most of the units & within next 2 – 3 years [By 2022]. The domestic business of the Company is expected to be revived over next 2 years.

The Company has launched its own products in Ghana. Around 10 products namely: AMLONIP 5, AMLONIP 10, AVSTAR 10, AVSTAR 20, AZIKAN 250, AZIKAN 500, EMSEC 20, RDA 24, RDA PREG & VITAMINO SYRUP, are already launched and further 6 – 8 products are under registration, which is expected very soon. The product launch has been successful and initial sales figures are encouraging. Company is in the process of setting up and gradually building up our own field team for distribution and promotion of our products / brands. The Company is focusing on this activity with long term objectives.

The Board is happy to inform you that Company’s painstaking efforts in Exports markets are bearing fruit. Several products are registered in Philippines, Sri Lanka and Ghana. Some products are expected to be registered in the current year in Latin America. Company is also registering products in Myanmar & Mozambique.

The Company has also tied up with a leading retail chain Company from Chile for manufacture and export of 4 products. Company is proposing to expand its exports to Latin America and Central America., in a big way.

The Company is thus looking forward to better operations in the coming years through own exports. Company’s unit was approved by BFAD, Philippines and Ivory Coast during the year.

4. CURRENT OUTLOOK:

The Company is now geared up for enjoying the fruits of its enhanced capacities, WHO-GMP status and product registration efforts.  Company’s relationship with its core clients continues to be strong, and this has ensured healthy capacity utilization.

In a quest to expand the range of products, new formulations are being developed. The Company has developed competence in New products development, scale up and validations as per international protocols. A full fledged R&D laboratory is being set up in the plant.

The company is planning to come up with its IPO (Initial Public offering) for the expansion of the company with the NSE i.e The National Stock Exchange as an SME Listed Company.

The Company has appointed M/s Asit Mehta & co., as the Merchant Banker for proposed public issue and has also appointed  M/s Bigshare Services Pvt. Ltd  as the Registrar and Share Transfer Agent who are duly registered with the SEBI under SEBI (Registrars to an issue and Share Transfer Agent) Regulations, 1993 for the proposed Public Issue of the Company.

5. EXPANSION / RENOVATION:

The Company has successfully installed ERP system with the help of TCS for accounting & inventory management. This will help improve efficiency of Company’s operations.

6. DIVIDEND:

Your Directors have recommended a dividend of Rs. 7,10,460/- @ 1% of share capital for this year (Previous Year Rs. 7,10,460/-). The dividend, if approved, will be paid to those members whose names are appearing in the Register of Members as on September 29, 2018.

7. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013:

The company has transferred an amount of Rs. 500,00,000 to the Reserves compared to previous year which was Rs. 5,00,00,000.

8. SHARE CAPITAL

Authorised Capital: The authorized capital of the Company has increased from Rs.7,50,00,000 (Seven Crores Fifty Lakhs) divided into 75,00,000 Equity Shares of Rs. 10 each to Rs. 100,000,000 (Rupees Ten Crores) divided into One Crore Equity Shares of Rs. 10 each at its Extra Ordinary General Meeting held on 9th February, 2018.

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Paid up Capital: The paid up capital of the Company remains same i.e Rs. 7,10,46,000/-[( Seven Crores Ten Lakhs and Forty Six Thousand) divided into 7104600(Seventy one Lakhs and Forty Six Hundredd) shares of Rs,10/- each fully paid-up.

9. DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—

(a) in the preparation of the annual accounts, 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 at the end of the financial year and of the profit and loss 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 this Act 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; and

(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.

10. MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met Seventeen times during the Financial Year 2017-18 mentioned the dates of the board meeting following.

11. LOANS, GUARANTEES AND INVESTMENTS:

The Company has made Investments in the earlier year’s in M/s. Medvin Pharma Ltd in the form of Joint Venture, under section 186 of the Companies Act, 2013 and the same stands as on 31st March, 2018 is Rs. 1,23,98,000.

12. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in form No.MGT­9 as required under Section 92 of the Companies Act, 2013 for the financial year ending March 31, 2018 is annexed hereto as Annexure I.

13. RELATED PARTY TRANSACTIONS: (REQUIRED FROM THEM)

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of the business as per details given in AOC-2 annexed as Annexure “II”.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have been furnished in FORM-A considering the nature of activities undertaken by the company during the year under review. Company has carried out specific research and development activities. The information related to technology absorption and innovation is reported to be mention in FORM-B following.

FORM-A Disclosure Of Particulars With Respect To Conservation Of Energy

Power and fuel compensation:

B. Consumption per unit of production.

It is not feasible to give product-wise energy consumption since there is a large variety of products and product groups with significantly different energy intensities.

C. Conservation measures.

The measures initiated during the preceding year are continuing and being followed up in the areas of cleaner environment,energy saving methods and compliances required with international standards.

FORM-B- Disclosures of particulars with respect to technology absorption.

Product Development:

Efforts are directed towards development of new formulations, processes and attractive packaging targeted especially at generics and exports markets.

In the current year , Company has developed / is developing a number of formulations including Voriconazole Tablets, Glucosamine Chondroitin powder in sachets, Anti Cold powder in sachet packs, Gabapentin Tablets, Trimetazidine Tablets, Metrocarbomol Tablets, Levodopa + Carbidopa Tablets, etc.

15. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Foreign Exchange earned in terms of actual inflows during the year is and Foreign Exchange outgo during the year in terms of actual outflow is following.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(a)     Total Foreign Exchange used                                                             :   US $ 8,000.00

(b)     Total Foreign Exchange earned                                        

          F.O.B Value                                                                                            :   US $ 1,21,997.28

          C.I.F. Value                                                                                             :   US $ 4,41,982.84

16. RISK MANAGEMENT POLICY:

Risks are events, situations or circumstances which may lead to negative consequences on the Company's businesses. Risk management is a structured approach to manage uncertainty. A formal enterprise wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

There has been a change in the constitution of the Board during the year.

Two Director Shailja Tushar Korday and Joyti F Gole resigned from the Directorship of the company due to pre -occupation w.e.f 20th March, 2018.

Mr.Rajendra Fattesinh Gole was appointed as a new Director in the Company at their Board Meeting held on 20th March, 2018.

Three Independent Director has been also appointed so as the meet the criteria of Section 149 read with Rules of the Companies Act, 2013 namely Mr. Radheshyam Sobhraj Rohra, Ms. Meena Sanjiv Kapadi and Mr. Sharad Kantilal Sheth.

The Company has appointed Two Key Managerial Personnel (KMP) i.e. Sangeeta Amitkumar Dhanuka as Company Secretary and Compliance Officer and Sharvari Ashok Sawant as Chief Financial officer (CFO) of the Company at the Board Meeting held on 20th March, 2018.

18. DEPOSITS:

The company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013.

19. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future.

20. EMPLOYEES RELATIONS:

There were no employees drawing remuneration as specified under rule 5(2) of Companies (Appointment and Remuneration) Rules, 2014.

21. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company is committed to provide a safe and conducive work environment to its employees.

22. CORPORATE SOCIAL RESPONSIBILITY:

The section 135 of the Companies Act 2013 is applicable to the company for the year ended 31st March 2018.

The Company has already spent Rs.12, 50,000/- towards CSR against the provision of Rs.14, 26,519/-.           

23. Auditors: 

M/s. Anil Thakrar & Co, Chartered Accountants have been appointed as the Statutory Auditors of the Company for a period of five years in the Annual General Meeting held on 22nd of September, 2017.

24. Auditors Report:

The Auditors’ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

25. Acknowledgements:

Your Directors take this opportunity to place on record their appreciation of the dedication and commitment of employees of the Company. Your Directors thank and express their gratitude received from vendors, customers, banks and other stakeholders including business associates, as well as regulatory and Government authorities.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from the shareholders.

26. Bankers:

The Company is banking with KOTAK Mahindra Bank Ltd which has considerably reduced the interest cost on its Credit facilities, such as Cash Credit & Foreign Currency Term Loan. The same trend is expecting to be continued in future at a low financing cost.

For &On behalf of the Board

                                                                         For Medibios Laboratories Pvt Limited