Your Directors have pleasure in presenting their 6th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2016.
1. Financial Summary and Highlights
|Particulars || |
|For the year ended 31st March ||2016 ||2015 |
|Profit for the year before Interest Depreciation and Tax ||98754 ||40839 |
|Adjusting therefrom: || || |
|Interest (net) ||237 ||111 |
|Depreciation ||7186 ||4441 |
|Provision for taxation ||21517 ||7625 |
|Share of Profit/(Loss) of Associates ||- ||- |
|Net Profit ||69814 ||28661 |
|Share of Reserves in Joint Venture ||- ||- |
|Share of Loss in Associates ||- ||- |
|Adding thereto: || || |
|Balance brought forward from previous year ||25525 ||14805 |
|The amount available is ||95339 ||43466 |
|Appropriating there from: || || |
|Provision for Dividend - Equity Shares ||- ||6598 |
|Provision for Corporate Dividend tax ||- ||1343 |
|Transfer to General Reserve ||30000 ||10000 |
|Balance carried forward to Balance Sheet ||65339 ||25525 |
2. Transfer to Reserves:
An amount of H30000 lacs from the net profit for the financial year under review isproposed to be carried to General Reserves.
Your Directors recommend Dividend on Equity Shares at H4.00 per share (i.e. 200%) offace value H2/- per share for the financial year ended on 31st March 2016 as againstH3.50 per share (i.e. 175%) for the year ended 31st March 2015.
4. Management Discussion and Analysis Report:
The Management Discussion and Analysis Report as required under Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is included in thisAnnual Report. Certain statements in the said report may be forward looking. Many factorsmay affect the actual results which could be different from what the Directors envisagein terms of the future performance and outlook.
5. Operations and State of affairs of the Company:
The Company's Standalone revenues from operations were H2991.74 crore for the yearended 31st March 2016 as compared to H2019.00 crore for the previous year.
The Company has made Net Profit of H698.14 crore on standalone basis for the year underreview as compared to H286.61 crore for the previous year.
The Company has registered Consolidated revenues from operations of H3148.71 crore forthe year under review as compared to H2056.12 crore for the previous year.
The break-up of consolidated sales including export incentives is as under:
| ||Particulars ||F.Y. ||F.Y. |
| || ||2015-16 ||2014-15 |
| ||Branded Domestic ||110357 ||98084 |
|Formulations ||Generic & NSA Domestic ||9118 ||12274 |
| ||International Formulations ||146150 ||59348 |
|API ||Domestic ||5052 ||6412 |
| ||Exports ||47442 ||30655 |
| ||Total ||318119 ||206773 |
The Company has made a consolidated profit after tax of H719.44 crore for the yearunder review as compared to H282.92 crore for the previous year.
6. Subsidiaries Associates and Joint Ventures:
As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the Board's Reporthas been prepared on standalone financial statements and a report on performance andfinancial position of each of the subsidiaries and associates is included in the financialstatements.
In accordance with third proviso 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.alembic-india.com.Further as per fourth proviso of the said section audited annual accounts of each of thesubsidiary companies have also been placed on the website of the Companywww.alembic-india.com. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies may write to the Company Secretary at the Company'sregistered office.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Shaunak Amin Director of the Company will retire byrotation at the ensuing Annual General Meeting and is eligible for re-appointment.
The Board at its meeting held on 21st January 2016 re-appointed Mr. Chirayu Amin Mr.Pranav Amin and Mr. R. K. Baheti as Executive
Directors for a period of five years effective from 1st April 2016 subject toapprovals of the members at the Annual General Meeting. Subsequently on 27th April 2016the Board re-designated Mr. Chirayu Amin as Executive Chairman and Chief Executive Officerand both Mr. Pranav Amin and Mr. Shaunak Amin as Managing Directors of the Company.
8. Key Managerial Personnel:
Mr. Chirayu Amin Executive Chairman & Chief Executive Officer (CEO) Mr. PranavAmin Managing Director Mr. Shaunak Amin Managing Director Mr. R. K. Baheti Director -Finance & CFO and Mr. Ajay Kumar Desai Vice President - Finance & CompanySecretary are Key Managerial Personnel of the Company.
9. Meetings of the Board:
Four (4) 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 in of 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 following were the Evaluation Criteria:
(a) For Independent Directors:
Knowledge and Skills
Duties Role and functions
(b) For Executive Directors:
Performance as Team Leader/Members
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. Paresh Saraiya asChairman and Mr. Milin Mehta Mr. Pranav Parikh and Dr. Archana Hingorani (w.e.f. 31stJuly 2015) as members. The Committee interalia reviews the Internal Control SystemReports of Internal Auditors and Compliance of various regulations. The Committee alsoreviews at length the financial statements before they are placed before the Board.
13. Vigil Mechanism:
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a VigilMechanism or 'Whistle Blower Policy' for directors employees and other stakeholders toreport genuine concerns has been established. The same is also uploaded on the website ofthe Company.
14. Internal Control Systems:
The Company's internal control procedures which includes internal financial controlsensure compliance with various policies practices and statutes and keeping in view theorganisation's pace of growth and increasing complexity of operations. The internalauditors team carries out extensive audits throughout the year across all locations andacross all functional areas and submits its reports to the Audit Committee of the Board ofDirectors.
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 Organisations focusing on threemajor 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 A.
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 onarm's length basis and were in ordinary course of business. There are no materiallysignificant related party transactions made by the Company which may have potentialconflict with the interest of the Company.
There are no material related party transactions which are not in ordinary course ofbusiness or which are not on arm's length basis and hence there is no information to beprovided 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 Company's website. The web- link as required under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is as under:http://www.alembic-india.com/upload/05APL-RPT%20policy.pdf
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 from M/s. Samdani Shah & Associates Practising CompanySecretaries confirming compliance with the conditions of corporate governance asstipulated under the aforesaid Schedule V is attached to the Report on CorporateGovernance.
19. Fixed Deposits:
As on 31st March 2016 there were unclaimed deposits amounting to H7.13 lacs from 19deposit holders which have been transferred to current liabilities. There has been nodefault in repayment of deposits or interest thereon. In F.Y. 2015-16 the Company has notaccepted/renewed any deposits.
20. Listing of shares:
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 533573 and on the National Stock Exchange of India Limited (NSE) with scrip code ofAPLLTD. The Company confirms that the annual listing fees to both the stock exchanges forthe financial year 2016-17 have been paid.
21. Loans Guarantee or Investments:
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 B.
(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. 2018-19 as approved by themembers at their 4th Annual General Meeting held on 28th July 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.
(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 Practising CompanySecretaries for the financial year ended 31st March 2016 is annexed as Annexure C.
(c) Cost Auditors:
Mr. H. R. Kapadia Cost Accountant Vadodara Cost Auditor of the Company for F.Y.2015-16 have been appointed as Cost Auditor for conducting audit of the cost accountsmaintained by the Company relating to Bulk Drugs and Formulations for the F.Y. 2016-17.
(d) Internal Auditors:
The Board of Directors has appointed M/s. Sharp & Tannan Associates CharteredAccountants as Internal Auditors of the Company for the F.Y. 2016-17.
There is no qualification reservation adverse remark or disclaimer by the StatutoryAuditors in their report or by the Secretarial Auditor in their Secretarial Audit Reportand hence no explanation or comments of the Board is required in this matter.
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 have selected such accounting policies as listed in Note Y 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 have 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 have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have 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 2014 isannexed herewith as Annexure D.
26. Conservation of Energy Technology Absorption Foreign Exchange earnings and outgo:
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 E.
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 F.
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 G. 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.
On behalf of the Board of Directors
Chairman & CEO
27th April 2016
Alembic Pharmaceuticals Limited
Regd. Office: Alembic Road Vadodara - 390 003
Tel: 0265 2280550
Fax: 0265 2282506
Report on CSR Activities to be included in the Board's Report
1. A brief outline of the Company's CSR Policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR Policy andprojects or programs:
The Company's CSR Policy provides for carrying out CSR activities in the area ofEducation Healthcare and Rural Development through various 'Not for ProfitOrganisations' including Alembic CSR Foundation Bhailal Amin General Hospital RuralDevelopment Society Uday Education Society etc.
The CSR spend may be carried out by way of donation to the corpus of the above 'Not forprofit organisations'or contribution towards some specific project being undertaken by anyof the organisations.
Web-link to the CSR Policy of the Company:
2. The Composition of CSR Committee:
|Mr. Chirayu Amin ||- Chairman |
|Mr. K. G. Ramanathan ||- Member |
|Mr. Paresh Saraiya ||- Member |
3. Average Net Profit of the Company for the last three financial years: H31289lacs
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): H625.78lacs
5. Details of CSR Spent during the financial year
(a) Total amount to be spent for the financial year: H625.78 lacs
(b) Amount unspent if any: Nil
(c) Manner in which the amount spent during the financial year is detailed below:
|CSR project or activity identified ||Sector in which the project is covered ||Projects or programs (1) Local area or other (2) Specify the State and District where projects or programs was undertaken ||Amount outlay (budget) project or programs wise ||Amount spent on the projects or programs Sub-heads 1. Direct Expenditure on projects or programs 2. Overheads: ||Cumulative expenditure upto the reporting period ||Amount Spent: Direct or through Implementing Agency (IA) |
|1. Contribution towards various community outreach programs school education development construction and repairs of hostel building for students of school run by Rural Development Society ||Education ||Panchmahal Gujarat ||Single Program ||Direct - H95.12 lacs ||H95.12 lacs ||Through IA - Rural Development Society |
|2. Contribution towards building of toilets for community use and cleanliness ||Sanitation ||Gujarat ||Single Program ||Direct - H3.25 lacs ||H3.25 lacs ||Direct |
|3. Contribution towards conducting health awareness programmes and providing free medicines ||Preventive Healthcare ||Thane Maharashtra ||Single Program ||Direct - H15.00 lacs ||H15.00 lacs ||Through IA - Alembic CSR Foundation |
|4. Contribution towards promoting education eradicating hunger and preventive healthcare ||Education Eradicating Hunger and Preventive Healthcare ||Jorhat & Guwahati Assam ||Single Program ||Direct - H30 lacs ||H30 lacs ||Through IA - Alembic CSR Foundation |
|5. Contribution towards promoting education eradicating hunger and preventive healthcare ||Education Eradicating Hunger and Preventive Healthcare ||Dehradun Uttarakhand ||Single Program ||Direct - H50.00 lacs ||H50 lacs ||Direct |
|6. Contribution towards promotion and development of traditional arts and handicrafts ||Promotion and Development of Traditional Arts and Handicrafts ||Panchmahal Gujarat & Sikkim ||Single Program ||Direct - H57.00 lacs ||H57 lacs ||Through IA - Alembic CSR Foundation |
|7. Contribution towards sports promotion ||Sports Promotion ||Local ||Single Program ||Direct - H10.00 lacs ||H10.00 lacs ||Direct |
|8. Contribution towards CSR activities ||Various activities covered under Schedule VII of the Companies Act 2013 ||India ||Single Program ||Direct - H341.50 lacs ||H341.50 lacs ||Direct |
|9. Contribution towards developing vocational skills ||Development of Vocational Skills ||Local ||Single Program ||Direct - H28.00 lacs ||H28.00 lacs ||Direct |
6. In case the Company has failed to spend the two percent of the average netprofit of the last three financial years or any part thereof the Company shall providethe reasons for not spending the amount in its Board's Report: N.A.
7. The CSR Committee of the Company hereby confirms that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.
Signing both on behalf of the Company and the Committee
Chairman & Chief Executive Officer
and Chairman of CSR Committee
SECRETARIAL AUDIT REPORT
For the financial year ended 31 March 2016
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Alembic Pharmaceuticals Limited
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Alembic PharmaceuticalsLimited (hereinafter referred to as 'the Company'). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.
Based on our verification of the Company's Books Papers Minute Books Forms andReturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorised representatives during theconduct of Secretarial Audit we hereby report that in our opinion the Company hasduring the audit period covering the Financial Year ended on March 31 2016 complied withthe statutory provisions listed hereunder and also that the Company has proper Board-Processes and Compliance-Mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:
We have examined the Books Papers Minute Books Forms and Returns filed and otherrecords maintained by the Company for the Financial Year ended on March 312016 accordingto the provisions of:
i. The Companies Act 2013 (the Act) and the rules made there under;
ii. The Securities Contracts (Regulation) Act 1956 (SCRA) and the rules madethereunder;
iii. The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
iv. Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992/2015;
(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client.
We further report that there were no actions/events in pursuance of the followingregulations requiring compliance thereof by the Company during the period of this report:-
(a) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(c) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009;
(d) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
(e) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
vi. Other sector specific laws as follows:
(a) The Prevention of Food Adulteration Act 1954;
(b) Drugs and Cosmetics Act 1940;
(c) National Pharmaceuticals Pricing Policy 2012;
(d) The Pharmacy Act 1948;
(e) The Narcotic Drugs and Psychotropic Substances Act 1985;
(f) The Drugs and Magic Remedies (Objectionable Advertisement) Act 1954;
(g) The Drug (Prices Control) Order 2013;
(h) Food Safety and Standards Act 2006.
We have also examined compliance with the applicable clauses/ regulations of thefollowing:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Listing Agreement entered into by the Company with BSE Limited and NationalStock Exchange of India Limited and/or Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.
We further report that the Board of directors of the Company is duly constituted withproper balance of executive directors nonexecutive directors and independent directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all the Directors to schedule the Board Meetings Agendaand detailed notes on Agenda were sent at least seven days in advance and a system existsfor seeking and obtaining further information and clarification on the Agenda items beforethe meeting and for meaningful participation at the meeting.
As per the minutes of the meetings duly recorded and signed by the Chairman thedecisions of the Board were unanimous and no dissenting views have been recorded.
We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the
Company to monitor and ensure compliance with all the applicable laws rulesregulations and guidelines.
We further report that during the audit period there were no specific instances/actionsin pursuance of the above referred laws rules regulations guidelines etc. having amajor bearing on the Company's affairs.
Samdani Shah & Asso.
FCS No. 3677
CP No. 2863
Vadodara 11th April 2016