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Anuh Pharma Ltd.

BSE: 506260 Sector: Health care
NSE: N.A. ISIN Code: INE489G01022
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VOLUME 3015
52-Week high 245.00
52-Week low 161.00
P/E 22.19
Mkt Cap.(Rs cr) 430
Buy Price 171.50
Buy Qty 3.00
Sell Price 172.70
Sell Qty 1.00
OPEN 172.95
CLOSE 172.20
VOLUME 3015
52-Week high 245.00
52-Week low 161.00
P/E 22.19
Mkt Cap.(Rs cr) 430
Buy Price 171.50
Buy Qty 3.00
Sell Price 172.70
Sell Qty 1.00

Anuh Pharma Ltd. (ANUHPHARMA) - Director Report

Company director report

To

The Members

Your Directors have pleasure in placing before you the 57th Annual Report ofthe Company along with the Accounts for the year ended March 31 2017:

FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)
Accounting Year 2016-17 2015-16
Sales 21695 32111
Other Income 460 844
Profit before interest depreciation and taxation 2712 4022
Interest 3 3
Depreciation 197 226
Provision for taxation (net) 754 1213
tax Profit after 1758 2580
Profit and Loss Account balance B/f 2924 2587
Income Tax adjustment of earlier years (11) 13
Profit available for Appropriation 4671 5180
Transfer to General Reserve 750 1500
Interim Dividend - 501
Tax on Interim Dividend - 102
Proposed final Dividend - 125
Tax on proposed final Dividend - 28
Balance carried to the Balance Sheet 3921 2924

DIVIDEND

For the year under review the Directors have recommended a final Dividend of Rs. 2.50per share i.e. @ 50% (Rs. 2.5/- per share i.e. @ 50% for the previous year) on EquityShares of face value of Rs. 5/- each of the Company. The total dividend outgo shall be Rs.626.40 lakhs as compared to Rs. 626.40 lakhs during the previous year.

OPERATIONS

The revenue from operations for the year ended March 31 2017 amounted to Rs. 20615lakhs as against Rs. 32622 lakhs for the previous year. Thus the turnover of the Companyhas declined by about 36.80 % as compared to last year's revenue from operations.

During the year2016-17profitbefore tax as compared to last year has declined by 33.81 %from Rs. 3794 lakhs to Rs. 2511 lakhs and profit after tax has declined by 31.86 %fromRs. 2580 lakhs to Rs. 1758 lakhs.

EXPORTS

Exports for the year ended March 31 2017 have declined by about 41.60 % from Rs. 14988lakhs to Rs. 8753 lakhs.

CURRENT OUTLOOK

We are pleased to inform you that European Directorate of Quality Medicine has restoredall our regulatory approvals i.e. Erythromycin Base Erythromycin Ethyl Succinate &Pyrazinamide. Similarly WHO PQ Geneva authorities have restored our regulatory status forPyrazinamide and Sulfadoxine.

In view of the above facts we hope to bounce back in terms of profitability and restoreall our regulatory clients.

MATERIAL CHANGES & COMMITMENTS IF ANY

After acquiring Plot No. E-18 in the Tarapur Industrial Area of MIDC we have alreadyreceived Environmental Clerance from Government of Maharshtra and consent to establishfrom Maharashtra Pollution Control Board and approval of building plans from MIDCauthorities.

We propose to start the construction of our new project in October 2017.

BOARD OF DIRECTORS

In accordance with the Articles of Association of the Company and pursuant to theprovisions of Section 152 of the Companies Act 2013 and the applicable rules madethereof Mr. Lalitkumar P. Shah and Mr. Bharat N. Shah Directors of the Company retire byrotation at the ensuing 57th Annual General Meeting and being eligible haveoffered themselves for re-appointment.

KEY MANAGERIAL PERSONNEL

Mr. Darshan Rampariya Chief Financial Officer and Ms. Ashwini Ambrale CompanySecretary & Compliance Officer are Key Managerial Personnel of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) read with Section 134(5)of the Companies Act 2013-i) That in thepreparation of the annual financial statements for the year ended March 31 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any. ii) That the Directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year viz. March 31 2017 and of the profit or loss ofthe Company for the year ended on that date. iii) That the Directors had taken proper andsufficientcare for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities. iv) That the Directors hadprepared the annual accounts on a going concern basis. v) That proper internal financialcontrols were in place and that the financial controls were adequate and were operatingeffectively. vi) That the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws were in place and were adequate and operatingeffectively.

DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT IF ANY

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 16(b) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

In accordance with the provisions of the Companies Act 2013 none of the IndependentDirectors are liable to retire by rotation.

LISTING ON THE STOCK EXCHANGE

The Company's shares are listed with BSE Limited and the Company has paid the necessarylisting fees for the financial year 2017-18.

FIXED DEPOSITS

The Company has not accepted or renewed any Fixed Deposits within the meaning ofSection 73 of the Companies Act 2013.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements providedin this Annual Report.

PARTICULARS OF EMPLOYEES

The Statement of particulars of employees under Section 197(12) read with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notprovided with as during the financial year under review no employee of the Companyincluding Managing Director and Whole Time Directors were in receipt of remuneration inexcess of the limits set out in the said rules.

MEETINGS

During the year 5 (Five) Board Meetings and 4 (Four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of theListing Regulations 2015 the Board has carried out an annual performance evaluation ofits Own performance the Directors individually the Chairperson's as well as theevaluation of the working of its Audit Committee Corporate Social ResponsibilityCommittee Nomination & Remuneration Committee and Stakeholder Relationship Committee.The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.

FAMILARISATION PROGRAM TO INDEPENDENT DIRECTORS

Familiarisation Programme has been carried out by the Company for the IndependentDirectors details of which has been uploaded on the Company's website i.e.www.anuhpharma.com.

BUSINESS RISK MANAGEMENT

The Company has a robust Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting. The framework has different riskmodels which help in identifying risks trend exposure and potential impact analysis at aCompany level as also separately for business. The Company has adopted Financial RiskManagement Policy.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to thefinancial statements. The Company has adopted policy on internal financial control systemfor proper observation of adequate internal financial controls.

POLICIES

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy (WBP) in accordance withsection 177(9) of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to deal with instance of fraud and mismanagement if any.The vigil mechanism/Whistle Blower Policy is uploaded on the Company's website i.e.www.anuhpharma.com.

Nomination and Remuneration Policy

The Board has framed a Nomination and Remuneration Policy for selection and appointmentof Directors Senior Management and their remuneration on the recommendation of theNomination & Remuneration Committee. The Nomination and Remuneration Policy isuploaded on the Company's website and annexed as Annexure A to theCorporate GovernanceReport.

Policy against sexual harassment of Woman at workplace

In order to prevent sexual harassment of women at work place a new act the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified. Under the said Act every company is required to set up an InternalComplaints Committee to look into complaints relating to sexual harassment at work placeof any women employee.

A policy for prevention of Sexual Harassment of Women at workplace has been adopted andInternal Complaints Committee was also constituted by the Board of Directors of theCompany. The policy and the composition of Internal Complaints Committee are uploaded onthe Company's website.

Policy for Preservation of Documents

In terms of Regulation 9 of the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("Listing Regulations 2015") theBoard has adopted this Policy for Preservation of Documents. To determine preservationperiod for records/documents based on their reference value and legal requirements. ThePolicy is uploaded on the Company's website.

Policy for Determination of Materiality of any Event or Information

In pursuance of Regulation 30 of the Listing Regulations 2015 the Company has adoptedthe policy for determination of materiality of any event or information based on thecriteria mentioned in the said regulation ("Material Information") and that theinformation has been and is being promptly forwarded to the Stock Exchange. The Policy isuploaded on the Company's website.

Archival Policy

This Policy is framed in compliance with the Regulation 30 of the Listing Regulations2015. The policy is uploaded on the Company's website.

AUTHORIZE KEY MANAGERIAL PERSONNEL FOR THE PURPOSE OF DETERMINING MATERIALITY OF ANEVENT OR INFORMATION

The Company has authorized Mr. Ritesh Shah Whole Time Director and Chief ExecutiveOfficer and Ms. Ashwini Ambrale Company Secretary and Compliance Officer of the Companyfor the purpose of determining the materiality of an event or information and for makingdisclosures to Stock exchange(s) under Regulation 30 of the Listing Regulations 2015.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO{Section 134}

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo is annexed as "Annexure - 1" to theDirectors' Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to Section 135 of the Companies Act 2013 and the Rules made thereunder theBoard of Directors has constituted the Corporate Social Responsibility (CSR) Committeeunder the Chairmanship of Mr. Jasvantlal G. Shah Non-Executive Independent Director. Theother Members of the Committee are Mr. Bipin N. Shah Managing Director and Mr. Arun L.Todarwal Non-Executive Independent Director. The CSR policy of the Company is uploaded onthe Company's website. Other details of the CSR activities undertaken by the Company asrequired under Section 135 of the Companies Act 2013 i.e. CSR Report is annexed as "Annexure- 2" to the Directors' Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexedas "Annexure - 3" to the Directors' Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. All Related PartyTransactions are placed before the Audit Committee and the Board for approval. Policy onTransactions with Related Parties as approved by the Board is uploaded on the Company'swebsite.

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is annexed as "Annexure- 4" to the Directors' Report.

RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHERDISCLOSURES

The table containing the names and other particulars of ratio of Directors'Remuneration to Median Employees' Remuneration in accordance with the provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as"Annexure - 5" to the Directors' Report.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is attached separately to this report.

CORPORATE GOVERNANCE

Your Company continue to imbibe and emulate the best corporate governance practicesaimed at building trust among all stakeholders - shareholders employees customerssuppliers and others. Your Company believes that fairness transparency responsibilityand accountability are the four key elements of corporate governance. The CorporateGovernance Report presented in a separate section forms an integral part of this AnnualReport.

AUDITORS' OBSERVATIONS AND MANAGEMENT'S REPLY Emphasis of Matter

We draw attention to the following matters in Note 36 to the financial statements:

As per section 135 of the Act the Company was required to incur/spend Rs. 6101702/-on Corporate Social Responsibility ("CSR") during the financial year 2016-2017.However during the financial year 2016-2017 the Company has spent Rs. 5820541/. Hencethe unspent amount of CSR expenditure is Rs. 281161/-.

Management's Reply: CSR Commitments for the financial year 2016-17 was not approvedprojects the Company would spend the same in the next financial year and that CSRcontribution would not be counted as next year's CSR commitments.

AUDITORS

Under section 139 of the Companies Act 2013 and the rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. On 26th May 2017 the Board of Directors hasrecommended the appointment of M/s. Jayantilal Thakkar & Co. Chartered Accountants(Firm Registration Number 104133W) as the Statutory Auditors of the Company. M/s.Jayantilal Thakkar & Co. w.e.f. 01st April 2017 to hold office for aperiod of five consecutive years from the conclusion of the 57th Annual GeneralMeeting of the Company scheduled to be held on 22nd September 2017 till theconclusion of the 62nd Annual

General Meeting to be held in the year 2022 subject to the approval of the Members ofthe Company. The first year of audit will be of the financial statements for the yearending March 31 2018 which will include the audit of the quarterly financial statementsfor the year.

A certificate has been received from M/s Jayantilal Thakkar & Co. to the effectthat be within the prescribed limits under section 139 of the Companies Act 2013.

COST AUDITORS

Pursuant to the provisions of section 148 of the Companies Act 2013 and as per Rule 14of Companies (Audit and Auditors) Rules 2014 with the prior approval of the CentralGovernment Mr. Ankit Kishor Chande Cost Accountant had been appointed to conduct auditof cost records of bulk drugs for the financial year Report would be submitted to theCentral Government within prescribed time.

The Cost Audit Report for bulk drugs for the year ended 31st March 2016 wasfiled with the Central Government on 19th October 2016.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Ragini Chokshi & Co. (Firm Registration Number 92897) CompanySecretaries to undertake the Secretarial Audit of the Company for the financial year2017-18.

The Secretarial Audit Report issued by M/s. Gupta Baul & Associates SecretarialAuditor of the Company for the year ended March 31 2017 is annexed as "Annexure -6" to the Directors' Report.

SECRETARIAL AUDITORS' OBSERVATIONS AND MANAGEMENT'S REPLY

Emphasis of Matter

As per section 135 of the Act the Company was required to incur/spend Rs. 6101702/-on Corporate Social Responsibility ("CSR") during the financial year 2016-2017.However during the financial year 2016-2017 the Company has spent Rs. 5820541/. Hencethe unspent amount of CSR expenditure is Rs. 281161/-.

Management's Reply:

CSR Commitments for the financial year 2016-17 was not fulfilled because of delay inapproved projects the Company would spend the same in the next financial year and thatCSR contribution would not be counted as next year's CSR commitments.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance andcooperation received from our bankers employees auditors and consultants during theperiod under review. The Directors sincerely appreciate the high degree ofprofessionalism commitment and dedication displayed by employees at all levels. TheDirectors also place on record their gratitude to the Members for their continued supportand confidence.

By Order of the Board
Sd/-
Jasvantlal G. Shah

Chairman

(DIN: 00372600)

Registered Office:
3-A Shiv Sagar Estate North Wing
Dr. Annie Besant Road
Worli Mumbai - 400 018
Place: Mumbai.
Date : August 09 2017

ANNEXURE ‘1' TO THE DIRECTORS REPORT

(Under Section 134 of the Companies Act 2013)

1. CONSERVATION OF ENERGY:

Form for Disclosure of Particulars with respect to Conservation of Energy.

A. Power and fuel consumption:
1. Electricity Current Year Previous Year
2016-17 2015-16
(a) Purchased
Units 2997834 3295696
Total amount (Rs. in Lakhs) 238.77 249.71
Rate/unit (Rs. in Lakhs) 7.96 7.58
(b) Own generation
Rate/Unit (Rs. in Lakhs) Nil Nil
2. Coal Nil Nil
3. Light Diesel Oil
Quantity (KL) 164.21 233.84
Total cost (Rs. in Lakhs) 50.81 85.05
Average rate per ltr. (Rs. in Lakhs) 30.94 36.37
4. Other/Internal generation N.A. N. A.
B. Consumption per unit of production
Electricity KWH 5.10 3.64
Light Diesel Oil Ltrs. 0.28 0.26
Coal N.A. N.A.
Other N.A. N.A.
2. TECHNOLOGY ABSORPTION
A. Research & Development (R&D) Nil Nil
B. Technology absorption adoption and innovation Nil Nil

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Earnings : The FOB value of export of the Company during the year aggregatedto Rs. 8456 lakhs as against Rs. 14471 lakhs in the previous year.

B. Outgo : The CIF value of outgo in foreign exchange of the company by way ofimports payment of commission exhibition and traveling expenses aggregated to Rs. 13513lakhs during the year as against Rs. 20711 lakhs in the previous year.

ANNEXURE ‘4' TO THE DIRECTORS REPORT

PARTICULARS OF CONTRACTS / ARRANGEMENTS MADE WITH RELATED PARTIES – FORM AOC-2

[Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014]

This Form pertains to the disclosure of particulars of contracts / arrangements enteredinto by the Company with related parties referred to in Sub-section (1) of Section 188 ofthe Companies Act 2013 including certain arm's length transactions under third provisothereto.

Details of contracts or arrangements or transactions not at arm's length basis:

There were no contracts or arrangements or transactions entered in to during the yearended March 31 2017 which were not at arm's length basis.

Details of material contracts or arrangement or transactions at arm's length basis:

The details of material contracts or arrangement or transactions at arm's length basisfor the year ended March 31 2017 are as follows:

Nature of Transaction Name of Related party (Amount in Rs. Lakhs)#
SKHL SKAE SKPPL EIPL ESC SKCPL IPPL
Sale of Goods 1216.00 - - - - - -
Processing Charges Received 5.65 - - - - - -
Service income Received 0.51 - - - - - -
Commission paid - - - - - 33.88 -
Purchase of Goods / duty free scrip 22.00 - - - - - 20.70
Reimbursement (receipt) of expenses 3.03 - - 6.46 - - -

# Name of related party entities under direct or indirect control or substantialinfluence:

SKHL : S Kant Healthcare Ltd.
SKAE : S. K. Age Exports
SKPPL : S Kant Pharma Pvt. Ltd.
EIPL : Eskay Iodine Pvt. Ltd.
ESC : Eskay Specialty Chemicals
SKCPL : S. Kant Chemicals Pvt. Ltd.
IPPL : Ital Pharchem Pvt. Ltd.

Above mentioned transactions are based on transfer pricing guidelines of the Company.

Appropriate approvals have been taken for related party transactions.

ANNEXURE - ‘5' TO THE DIRECTORS' REPORT

RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHERDISCLOSURES

[Pursuant to Section 19(12) of the Companies Act 2013 and Rule 5(1) of Chapter XIIICompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

1. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17:

Name of the Directors Ratio to median Remuneration
Non-Executive Director
Mr. Jasvantlal Shah - Chairman 1.24
Mr. Dilip Shah 0.69
Mr. Arun Todarwal 1.24
Mr. Sandeep Joshi 0.35
Mr. Lalitkumar Shah 0.35
Mr. Bharat Shah 0.52
Mr. Gulabchand Sharda 0.09
Ms. Rajeshree Gor 0.35
Mr. Samir J. Shah 0.26
Mr. Ketan L. Shah 0.09
Executive Director
Mr. Bipin Shah - Managing Director 32.43
Mr. Ritesh Shah - Whole Time Director (CEO) (w.e.f. 09.08.2016) 15.58
Mr. Vivek Shah - Whole Time Director (CEO - R&D) (w.e.f. 09.08.2016) 16.24

2. The percentage increase in Remuneration of each Director and Chief FinancialOfficer Chief Executive Officer Company Secretary in the financial year 2016-17:

Sr. Nos. Names Designations % increase in Remuneration in the Financial year
1. Mr. Jasvantlal Shah Chairman - Independent Director NIL
2. Mr. Dilip Shah Independent Director (20.00)
3. Mr. Arun Todarwal Independent Director (12.24)
4. Mr. Sandeep Joshi Independent Director (42.86)
5. Mr. Lalitkumar Shah Promoter Director (42.86)
6. Mr. Bharat Shah Promoter Director (45.45)
7. Mr. Gulabchand Sharda Director (83.33)
8. Ms. Rajeshree Gor Director (20.00)
9. Mr. Bipin Shah Managing Director 0.89
10. Mr. Ritesh Shah Whole Time Director (CEO) 50.11
11. Mr. Vivek Shah Whole Time Director (CEO - R&D) 68.73
12. Mr. Darshan Rampariya Chief Financial Officer 3.22
13. Ms. Ashwini Ambrale Company Secretary & Compliance Officer 18.42

3. The percentage declined in the median Remuneration of employees in the financialyear 2016-17: 22.58%

4. The number of permanent employees on the rolls of Company: 212

5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: The averageannual increase was around 10%. However during the course of the year the total increaseis approximately 9.12% after accounting for promotions and increase in hiring salariesfor trainees. Increase in the managerial remuneration for the year was 20.97%.

6. The key parameters for any variable component of remuneration availed by theDirectors: The Members have at the AGM of the Company on September 12 2014 approvedpayment of incentives to the Managing Director minimum 1% of the net profits before tax ofthe Company as computed under the applicable provisions of the Act.

7. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: None.

8. Affirmation that the remuneration is as per the Nomination and Remuneration Policyof the Company: The Company affirms all the above Remuneration is as per the Nominationand Remuneration Policy of the Company.

9. The statement containing particulars of employees as required under section 197(12)of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014: Not Applicable to the Company as there are no suchemployees in receipt of the prescribed remuneration.