To the Members
Your Directors have pleasure in presenting their 109th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2016.
1 Standalone Financial Summary and Highlights:
| || ||Rs |
|For the year ended 31st March ||2016 ||2015 |
|Profit for the year before Interest Depreciation and Tax ||3145 ||3033 |
|Adjusting therefrom: || || |
|Interest (net) ||3 ||83 |
|Depreciation ||614 ||604 |
|Excess Tax Provision written back ||- ||(290) |
|Provision for deferred tax liabilities or (assets) ||(9) ||121 |
|Provision for current tax ||70 ||100 |
|Net Profit (Loss) ||2467 ||2415 |
|Adding thereto: || || |
|Balance brought forward from last year ||4134 ||3201 |
|The amount available is ||6601 ||5616 |
|Appropriating there from: || || |
|Provision for Dividend on Equity Shares ||- ||401 |
|Provision for Corporate Dividend Tax ||- ||82 |
|Transfer to General Reserve ||1000 ||1000 |
|Balance carried forward to next years accounts ||5601 ||4134 |
2 Transfer to reserve:
An amount of Rs 1000 lacs from the net profits for the financial year under review isproposed to be carried to General reserves.
Your Directors recommend Dividend on Equity Shares at Rs 0.15 per share (i.e. 7.5 %) offace value Rs 2/- per share for the year ended on 31st March 2016 as against Rs 0.15 pershare (i.e. 7.5 %) for the year ended 31st March 2015.
4 Management Discussion and Analysis Report:
The Report on Management Discussion and Analysis Report as required under Schedule V ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is includedin this Report as Annexure A.
5 Operations and State of affairs of the Company:
The Companys Standalone revenues from operations including export incentives wereRs 126.03 crore for the year ended 31st March 2016 as compared to Rs 143.95 crore for theprevious year.
The Company has made Net Profit after Tax of Rs 24.67 crore on standalone basis for theyear under review as compared to Rs 24.15 crore for the previous year.
Tax after considering The Consolidated Profit Share of Associates Profit for theyear under review is Rs 234.28 crore.
6 Subsidiaries Associates and Joint Ventures:
The Company does not have any subsidiaries or joint ventures. Alembic PharmaceuticalsLimited and Alembic Exports Limited are Associate Companies. As required under Rule 8(1)of the Companies (Accounts) Rules 2014 the Boards Report has been prepared onstandalone financial statements and a report on performance and financial position of eachof the associates is included in the financial statements.
In accordance with third provison of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company www.alembiclimited.com.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Malika Amin Director of the Company will retire byrotation at the ensuing Annual General Meeting and is eligible for re-appointment.
The Board has appointed Mr. Udit Amin as Managing Director of the Company w.e.f. 28thMarch 2016 for the remaining tenure of his appointment i.e. upto 23rd April 2018.
8 Key Managerial Personnel:
Mr. Udit Amin Managing Director and CEO Mr. Rasesh Shah CFO and Mr. Drigesh MittalDy. Company Secretary are Key Managerial Personnel of the Company.
9 Meetings of the Board:
Five (5) Board Meetings were held during the financial year ended 31st March 2016. Thedetails of the Board Meetings with regard to their dates and attendance of each of theDirectors thereat have been provided in the Corporate Governance Report
10 Independent Directors:
The Independent Directors of the Company have given the declaration to the Company thatthey meet the criteria of independence as provided under Section 149(6) of the CompaniesAct 2013.
11 Performance Evaluation:
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of the Directors individually as well as evaluation of the workingof the Board and of the Committees of the Board by way of individual and collectivefeedback from Directors.
The Evaluation Criteria are as follows:
(a) Evaluation Criteria for Non-Executive and Independent Directors:
- Knowledge and Skills
- Professional conduct
- Duties Role and functions
(b) Evaluation Criteria for Executive Directors:
- Performance as Team Leader/Member
- Evaluating Business Opportunity and analysis of Risk Reward Scenarios
- Key set Goals/KRA and achievements
- Professional Conduct and Integrity
- Sharing of Information with the Board
The Directors expressed their satisfaction with the evaluation process.
12 Audit Committee:
The Audit Committee consists of all Independent Directors with Mr. Milin Mehta asChairman and Mr. C. P. Buch and Mr. R. C. Saxena as members. The Committee inter aliareviews the Internal Control System Reports of Internal Auditors and Compliance ofvarious regulations. The Committee also reviews at length the financial statements beforethey are placed before the Board of Directors.
13 Vigil Mechanism:
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013and the SEBI (Listing Obligations and Discloure Requirements) Regulations 2015 a vigilmechanism or Whistle Blower Policy for directors employees and otherstakeholders to report genuine concerns has been established. The same is also uploaded onthe website of the Company.
14 Internal Control Systems:
The Companys internal control procedures which includes internal financialcontrols ensure compliance with various policies practices and statutes and keeping inview the organizations pace of growth and increasing complexity of operations. Theinternal auditors teams carry out extensive audits throughout the year across alllocations and across all functional areas and submits its reports to the Audit Committeeof the Board of Directors.
15 Corporate Social Responsibility:
Corporate Social Responsibility (CSR) is not a new term for Alembic. Alembic Group hasbeen proactively carrying out CSR activities since more than Fifty Years. Alembic Grouphas established nurtured and promoted various Non Profit three major areas Education Healthcare and Rural Development.
During the year the Company along with other entities in the group settled a Trust inthe name of Alembic CSR Foundation and obtained requisite statutory approvals for enablingit to carry out CSR activities for the entire group.
In compliance with requirements of Section 135 of the Companies Act 2013 the Companyhas laid down a CSR Policy. The composition of the Committee contents of CSR Policy andreport on CSR activities carried out during the Financial Year ended 31st March 2016 inthe format prescribed under Rule 9 of the Companies (Accounts) Rules 2014 is annexedherewith as Annexure B.
16 Policy on Nomination and Remuneration:
The contents of Nomination and Remuneration Policy of the Company prepared inaccordance with the provisions of Section 178 of the Companies Act 2013 and Regulation 19of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areprovided in the Corporate Governance Report.
17 Related Party Transactions:
Related party transactions that were entered into during the financial year were onarms length basis and were in ordinary course of business. There are materiallysignificant related party transactions made by the Company with Alembic PharmaceuticalsLimited related party. However no related party transactions have any potential conflictwith the interest of the Company.
The Company had taken approval of shareholders for Material Related Party Transactionswith Alembic Pharmaceuticals Limited in the last Annual General Meeting of the Companyheld on 12th August 2015.
There are no material related party transactions which are not in ordinary course ofbusiness or which are not on arms length basis and hence there is no information tobe provided as required under Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014.
The Board has approved a policy for related party transactions which has been uploadedon the Companys website. The web-link as required under SEBI (Listing Obligationsand Discloure Requirements) Regulations 2015 is as under:http://www.alembiclimited.com/AL-RPT%20Policy.pdf Organisation focusing on
18 Corporate Governance:
The Report on Corporate Governance as stipulated under Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
The requisite certificate
Associates Practicing Company Secretaries confirming compliance with the conditions ofcorporate governance as stipulated under the aforesaid Schedule V is attached to theReport on Corporate Governance.
19 Fixed Deposits:
During the year under review the Company has not accepted/renewed any deposits.
20 Listing of shares:
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 506235 and on National Stock Exchange of India Limited (NSE) with scrip code ofALEMBICLTD. The Company confirms that the annual listing fees to both the stockexchangesfor the financial year 2016-17 have been paid.
21 Loans or Guarantees
Details of Loans granted Guarantees given and Investments made during the year underreview covered under the provisions of Section 186 of the Companies Act 2013 are givenas Annexure C.
(a) Statutory Auditors:
In compliance with the Companies (Audit and Auditors) Rules 2014 M/s. K. S. Aiyar& Co. Chartered Accountants have been appointed as Statutory Auditors of the Companytill the conclusion of Annual General Meeting for the F. Y. 2016-17 as approved by themembers at their 107th Annual General Meeting held on 13th August 2014.
Further pursuant to the requirement of Section 139 of the Companies Act 2013 theappointment of Statutory Auditors is to be ratified by the members at every Annual GeneralMeeting. Members are requested to ratify their appointment for the F. Y. 2016-17.
The Auditors Report for financial year 2015-16 does not contain anyqualification reservation or adverse remark. The Auditors Report is enclosed withthe financial statements in this Annual Report.
(b) Secretarial Auditors:
The Board of Directors of the Company appointed M/s. Samdani Shah & AssociatesPractising Company Secretaries Vadodara to conduct Secretarial Audit for the F.Y.2016-17. The Secretarial Audit Report of M/s. Samdani Shah & Associates PractisingCompany Secretaries for the financial year ended 31st March 2016 is annexed as AnnexureD.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
(c) Cost Auditors:
The Board of Directors of the Company appointed M/s Santosh Jejurkar & AssociatesCost Accountant Vadodara as Cost Auditor for the F.Y. 2016-17 for conducting audit of thecost accounts maintained by the Company relating to Bulk Drugs and Real Estate Division.
(d) Internal Auditors:
The Board of Directors has appointed CNK & Associates LLP Chartered Accountantsand M/s. Sharp & Tannan Associates Chartered Accountants as Internal Auditors of theCompany for the F.Y. 2016-17.
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.
23 Directors Responsibility Statement:
In terms of the provisions of Companies Act 2013 the Directors state that:
(a) in preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) the directors had selected such accounting policies as listed in Note Z to thefinancial statements and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give true and fair view of the state of affairs of theCompany at the end of the financial year as on 31st March 2016 and of the profit of theCompany for that period;
(c) the directors had taken proper and sufficient care for 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.
24 Material Changes:
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2016. Further it ishereby confirmed that there has been no change in the nature of business of the Company.
25 Extracts of Annual Return:
The extract of Annual Return required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014forms part of this report as Annexure E.
26 Conservation of Energy Technology Absorption Foreign Exchange earnings andoutgo:
The information required under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure F.
27 Particulars of employees and related disclosures:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure G.
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules areprovided in the Annual Report.
The Annual Report is being sent to the members of the Company excluding the aforesaidinformation. The said information is available for inspection at the registered office ofthe Company during working hours and any member interested in obtaining such informationmay write to the Company Secretary and the same will be furnished on request.
28 Details of Unclaimed Suspense Account:
Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexedherewith as Annexure H. The voting rights on the equity shares which are transferred toUnclaimed Suspense Account shall remain frozen till the rightful owner of such equityshares claims the shares.
For and on behalf of the Board of Directors
Chirayu R. Amin
27th April 2016
Regd. Office: Alembic Road Vadodara - 390 003.
Tel: (0265) 2280550
Fax: (0265) 2282506