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Alchemist Ltd.

BSE: 526707 Sector: Others
NSE: ALCHEM ISIN Code: INE964B01033
BSE 00:00 | 30 Aug Alchemist Ltd
NSE 05:30 | 01 Jan Alchemist Ltd
OPEN 3.02
PREVIOUS CLOSE 3.02
VOLUME 3185
52-Week high 11.69
52-Week low 3.02
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.02
CLOSE 3.02
VOLUME 3185
52-Week high 11.69
52-Week low 3.02
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Alchemist Ltd. (ALCHEM) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 31st Annual Reporton the business and operations of the Company along with the Audited Annual FinancialStatements and the Auditors' Report thereon for the Financial Year ended 31stMarch 2020. The financial highlights for the year under review are given below:

1. FINANCIAL HIGHLIGHTS

Financial Results are presented in the table below: (Rs. In Lakhs)

Particulars

Standalone Financials Highlights

Consolidate Financials Highights

2019-20 2018-19 2019-20 2018-19
Total Revenue 1470.47 2765.78 1470.47 2765.78
Total Expenditure 7268.70 8825.75 7268.88 8825.84
Profit & Loss Before Exceptional item (5798.23) (6059.97) (5798.41) (6060.55)
Exceptional Item 0.00 0.00 0.00 0.00
Profit & Loss Before Tax (5798.23) (6059.97) (5798.41) (6060.55)
Tax Expenses (1125.45) (1096.21) (1125.45) (1096.21)
Profit & Loss After Tax (4672.78) (4963.76) (4672.96) (4964.34)

The volatility and uncertainty in the economy continued during theyear. The net revenue of the Company decreases from Rs. 2765.78 Lakhs to Rs. 1470.47Lakhs during the year.

2. COMPANY'S OPERATING PERFORMANCE AND STATE AFFAIRS

The Company's state of affairs operations review and future outlookhave been discussed and analyzed more in depth in the Management Discussion & Analysisreport (Annexure VII) forming part of this Board's report. The company's main businesssegments are Agri Business comprising largely floriculture Steel and Chemicals pharmadivision comprising the manufacturing and trading. The company's subsidiary is in thebusiness of Pharma.

PHARMA DIVISION

Alchemist Pharma division is a strong vertical of Alchemist Group witharound 400 SKU's and promoted through a very strong committed field force. Pharma divisionenjoys tremendous respect with the medical fraternity and covering a universe of around2000 Doctors and 30000 retailers across the country. Alchemist's Molecules have beenacknowledged with tremendous response at the market place. A detailed write up on thepharma divisions is contained in the section on Management Discussion and Analysiselsewhere in this report.

AGRI DIVISION

The company continued to mark its presence in business of Global AgriTrade.

STEEL DIVISION

Steel business segment is consistently making achievement and theproduction efforts are now supplemented by trading activity as well.

3. SHARE CAPITAL

The paid up Equity Share Capital is Rs.1355.98 Lakhs and paid upPreference Share capital is 31.38 Lakhs as on March 31 2020. During the year there is nochange in the share capital of the Company.

4. DETAILS OF MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR TILLTHE DATE OF THIS REPORT

Significant material changes and commitments have occurred after theclosure of the Financial Year 2019-20 till the date of this Report which would affect thefinancial position of your Company.

The rampant spread of COVID-19 outbreak across borders andgeographies has severely impacted almost the whole world and triggered significantdownside risks to the overall global economic outlook and India is no exception. Due tothe lockdown announced by the Government of India from 25th March 2020 entire operationsof the Company came to a halt. The lockdowns and restrictions imposed on variousactivities due to the pandemic have posed challenges to the businesses of your Company.

The moratorium on debts and interest payments have been a source ofsupport in otherwise severely impacted liquidity and operating cash flows. The Boardbelieves that it is difficult to predict any industry wide scenario for the immediateshort term and the Company expects to resume normal operations soon after lifting oflockdown. Although there are uncertainties due to the pandemic the Company is takingseveral measures to mitigate the adverse impact by optimizing costs and continuouslyrealigning the cost and operating structures so as to sustain viable level.

5. DIVIDEND

Your Company has incurred loss during the year and hence Board ofDirectors has not recommended any dividend during the year.

6. DEPOSITS

The Company has not accepted any deposits from the public during theyear under review.

7. DEPOSITORY SYSTEM

There are 630538 (4.65%) shares still in physical form and 12929262(95.35%) are \in dematerialized form of the Company's total paid- up equity capitalrepresenting 13559800 shares as on March 31 2020.

In view of the numerous advantages offered by the Depository systemmembers holding shares in physical mode are advised to avail of the facility ofdematerialization from either of the depositories.

With effect from 01st April 2019 the request for transferof Equity shares of the company shall not be processed unless the securities are held indematerialised form with a Depository as per the amended regulation 40 of SEBI (LODR)Regulations 2015.

8. LISTING FEES AND ANNUAL CUSTODIAN CHARGES

The Shares of your Company are listed on Bombay Stock Exchange Limited(BSE) and National Stock Exchange India Limited (NSE).The Listing fee for the financialyear 2019-20 has been paid to the Stock Exchanges.

9. _ SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

Your Company has one subsidiary company namely Alchemist HealthcareLimited and one Associate i.e. Alchemist Medisphere Limited. Financial statements of theabove mentioned subsidiary and associate company are consolidated as per the requirementsof the Companies Act 2013 accounting standards and accounting policies applicable to thecompany.

Pursuant to Section 129(3) of the Act a statement containing thesalient features of the financial statements of the subsidiary companies is attached tothe Directors Report in Form AOC-1 (attached as Annexure-I). The Company will makeavailable the said financial statements and related detailed information of the subsidiarycompany upon the request by any member of the Company or its subsidiary company. Thesefinancial statements will also be kept open for inspection by any Member at the RegisteredOffice of the Company. The Consolidated Financial Statements presented by the Companyinclude the financial statements of its subsidiary and associate companies.

The financial statements of one Associate i.e. ROC Foods Limited(formerly known as Alchemist Foods Limited) is still under compilation process till thedate of balance sheet and one subsidiary viz. Alchemist Hospitality Group Limited is understrike off. Accordingly the same are not forming part of the consolidated financialStatements.

10. DETAILS OF DIRECTORS AND KMP DIRECTORS

• Mr. Charandeep Singh Jolly (DIN: 05151343) who retires byrotation at this meeting and being eligible has offered himself for reappointment be andis hereby re- appointed as a Non- Executive Director of the Company.

• In first term of office of Ms. Maria Fernandes as IndependentDirector of the Company in terms of the Companies Act 2013 expired on March 23 2020.Pursuant to the recommendation of the Nomination and Remuneration Committee and the Boardof Directors of the Company in their meeting which was held on June 11 2020 Re- appointMs. Maria Fernandes as Independent Director of the Company w.e.f March 23 2020 and theBoard of Directors recommended to the shareholders for re-appointment of Ms. MariaFernandes as Independent Director of the Company for a period of 5 years at the AnnualGeneral Meeting held on September 30 2020.

KEY MANAGERIAL PERSONNEL

• Mr. Dinesh Kumar Chief Financial Officer of the company hadresigned on July 02 2019.

• The Board has appointed Mr. Anop Singh Negi as Chief Financialofficer of the Company with effect from July 11 2019 in place of

Mr. Dinesh Kumar.

• The Board has appointed Mr. Sunil Jain as Company Secretary& Compliance Officer he had resigned on November 15 2019.

• The Board has appointed Ms. Divya Bajaj as company Secretary andCompliance officer of the Company with effect from February 01 2020 in place of Mr. SunilJain.

11. DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Also yourCompany has received annual declarations from all the Independent Directors of the Companyconfirming that they have already registered their names with the data bank maintained bythe Indian Institute of Corporate Affairs ["IICA"] as prescribed by the Ministryof Corporate Affairs under the relevant rules. The Board is of the opinion that allindependent directors of the Company hold highest standards of integrity and possessrequisite expertise and experience required to fulfill their duties as IndependentDirectors.

12. SEPARATE MEETING OF INDEPENDENT DIRECTORS

In terms of requirements under Schedule IV of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a separatemeeting of the Independent Directors was held on February 12 2020.

The Independent Directors at the meeting inter alia reviewed thefollowing:-

• Performance of Non-Independent Directors and Board as a whole.

• Performance of the Chairperson of the Company taking intoaccount the views of Executive Directors and Non- Executive Directors.

• Assessed the quality quantity and timeliness of flow ofinformation between the Company management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.

13. BOARD MEETINGS AND COMMITTEESS MEETINGS

During the year 07 Board meetings were convened and held.

During the Year 05 Audit Committee meetings 01 StakeholdersRelationship Committee (SRC) meetings and 03 Nomination and Remuneration Committeemeetings were convened and held.

The details of these meetings are given in the Corporate GovernanceReport. The intervening gap between any two meetings was within the period prescribedunder the Companies Act 2013.

14. ANNUAL EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and having due regard to theSEBI's Guidance Note on Board Evaluation dated January 05 2017 the Board has carried outan annual evaluation of its own performance individual separately as well as theevaluation of the working of its Audit Committee Committee of Directors StakeholdersRelationship Committee and Nomination and Remuneration Committee. A comprehensiveevaluation process formulated by the Nomination and Remuneration Committee coveringvarious aspects of the functioning of the Board was circulated to all the Directors toevaluate the performance of the Board.

The performance evaluation of the Non-Independent Directors and theBoard as a whole was carried out by the Independent Directors. The performance evaluationof the Chairperson of the Company was also carried out by the independent directorstaking into account the views of the executive and non-executive directors. The Directorsexpressed their satisfaction with the evaluation process.

15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans/ guarantee given and investments made are given inthe financial statements.

16. RELATED PARTY TRANSACTION

All the related party transactions are entered on arm's length basisand are in compliance with applicable provisions of the Act and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015.

All related party transactions are presented to the Audit Committee andthe Board. Approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions is presented before the AuditCommittee periodically specifying the nature value and terms and conditions of thetransactions.

Related Party Transaction Policy as approved by the Board is uploadedon Company's Website at the web link i.e.http://www.alchemist. co.in/investors.html.

The details of the transactions with the Related Parties are providedin the accompanying Financial Statements. None of the Directors has any pecuniaryrelationships or transactions vis-a-vis the Company.

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

All possible measures have been undertaken successfully by your Companyto achieve the desired objective of energy conservation and technology absorption.Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Companies (Accounts) Rules 2014 is annexed as Annexure-II.

18. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review your Company does not fall under thecriteria prescribed under Section 135 (1) of the Companies Act 2013 and other relevantrules framed thereunder hence the company is not required to constitute Corporate SocialResponsibility Committee (CSR Committee).

19. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

Details of Managerial remuneration required pursuant to Section 134 (3)(q) and section 197(12) and Rule 5(1) & (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure-III.

20. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The Code requires pre-clearance for dealing in the Company'sshares and prohibits the purchase or sale of Company shares by the Directors and thedesignated employees while in possession of Unpublished Price Sensitive Information(UPPSI) in relation to the Company and during the period when the Trading Window isclosed. The Board is responsible for implementation of the Code.

21. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employeesare conducted in a fair and transparent manner by adoption of highest standards ofprofessionalism honesty integrity and ethical behaviour the company has adopted a VigilMechanism Policy/ Whistle Blower policy.

22. BUSINESS RISK MANAGEMENT

Business risk evaluation and management is an ongoing process withinthe Company. During the year under review a detailed exercise on 'Risk Assessment andManagement' was carried out covering the entire gamut of business operations and the Boardwas informed of the same. The company has followed the principal of assessing the risk andaccordingly managing the business.

In today's challenging and competitive environment strategies formitigating inherent risks in accomplishing the growth plans of the Company are imperative.The common risks inter alia are: Regulations competition Business riskInvestmentsretention of talent and expansion of facilities. Business risk inter-alia furtherincludes financial risk political risk fidelity risk legal risk. These risks areassessed and steps as appropriate are taken to mitigate the same.

23. INTERNAL CONTROL SYSTEM

Details of internal control system and its adequacy are included in theManagement Discussion and Analysis Report which forms part of this Report.

24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

Your Company has in place a Prevention of Sexual Harassment policy inline with the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. During the year2019-2020 no complaints were received by the Company related to sexual harassment.

25. STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013and relevant rules framed thereunder M/s. Anu & Associates Chartered Accountants(firm Registration No.019624N) were appointed as Statutory Auditors of the Company for aterm of five consecutive years at 28th Annual General Meeting held in the year2017 on such remuneration as may be recommended by the Audit Committee of the Board anddecided by the Board of Directors of the Company.

However the requirement of ratification of appointment of Auditors hasbeen relinquished by the Ministry of Corporate Affairs.

26. EXPLANATION TO AUDITOR'S REMARKS

The Board has taken note of the Observations made by the Auditors intheir Report.

Reply to Auditors qualifications/observations-

(i) Regarding outstanding export receivable- the Company extends creditfrom time to time as per market practices. In respect of export receivables amounting to ^46442.79 Lakhs credit were extended for export sales in the normal course of thebusiness however it apparently got stuck. Though the Company is regularly following up onthe same has initiated legal recourse and is hopeful of recovering such amount stillconsidering the principal of conservatism the Company had made a provision for expectedcredit loss @ 10% of the outstanding export receivables amounting to ^ 4644.28 Lakhs andhas not recognized unrealised foreign exchange gain/loss on such export receivable andrelated trade payable during the financial year 2019-20. Hence forth the

Company shall not be accounting for the unrealised foreign exchangeloss on such export receivable and related trade payables and the same will only beaccounted for on actual realisation/payment". Cumulatively the provision forexpected credit loss on such export receivables stands at ^ 9288.56 Lakhs.

Such export receivables are outstanding for more than three years as atthe year-end date provision @ 20% is made against such doubtful trade receivables. Sincethe actual realisation of such doubtful export receivable cannot be ascertained we areunable to comment on the adequacy of the provision of excepted credit loss made by theCompany.

The loss to that extent is under stated the effect however could notbe quantified.

Though the Company admits that the export receivable is doubtful ofrecovery and has made partial provision on such export receivable still such exportreceivable and related trade payable stand in the books hence require recognition ofunrealised foreign exchange gain/loss as per the provisions of Ind AS 21 The Effects ofChanges in Foreign Exchange Rates. Accordingly the loss is overstated by ^ 3178.87 Lakhsfor the year ended 31st March 2020 and accordingly the trade receivables and tradepayable are understated by ^ 4329.75 Lakhs and ^ 1150.88 Lakhs respectively as at theyear ended 31st March 2020.

(ii) Regarding Working Capital Limits- The working capital limits of ^350.00 Lakhs availed from Bank of India for the working capital requirements of thepharmaceutical division has been classified as non-performing asset (herein referred to as'NPA') on 30th November 2018. The outstanding as on the date of classification by thebank as NPA was ^ 363.88 Lakhs. The Company has not recognised interest liability on suchloan from the day it has become NPA in line with the practice followed by the respectivebank".

The Company has not made provision of interest due on the borrowingsfrom Bank of India post the date the account was classified as non-performing assets bythe bank.

In the absence of the information on record the consequential impactif any on the standalone financial statements is not ascertainable.

(iii) Regarding Capital Advances- Capital advances of Rs. 769.70 lakhsis considered as good and recoverable and also states that out of the same the Parent ispursuing legal action in Honorable Kolkata High Court against Medisphere Marketing Limitedfor recovery of the amount of Rs.459.80 Lakhs outstanding in its books. Further thecompany is hopeful of recovering the above amounts and hence no provision is considerednecessary.

(iv) Balances in FDRs current account and cash credit limit- FDR'scurrent accounts and cash credit limit with a cumulative debit balance of ^ 106.39 Lakhsand cumulative credit balance of ^ 375.07 Lakhs could not be verified from statement oreven balance confirmation.

In the absence of the information on record the consequential impactif any on the standalone financial statements is not ascertainable.

(v) Consolidation of Financial Statements of Associate Company (ROCFoods Limited) one subsidiary viz. Alchemist Hospitality Group Limited

It has been explained to us that the financial statements of oneassociate ROC Foods Limited is still under compilation and one subsidiary viz. AlchemistHospitality Group Limited is under strike off. Accordingly the same are not forming partof the consolidated financial results.

(vi) Impact of COVID-19-The financial impact arising out of the COVID-19 outbreak are not accounted or reported or disclosed as per the prescribed IndianAccounting Standards in the financial statements.

In the absence of the information on record the consequential impactif any on the standalone financial statements is not ascertainable.

27. COST AUDITORS

Pursuant to the Section 148 of the Companies Act 2013 and the rulesmade thereunder states that cost records are mandatory in the case following conditionsare satisfied -

(a) The company is engaged in manufacturing goods or provision ofservices which are listed in Table A or Table B; and

(b) Total aggregate turnover of the company from all its production orservice is more than INR 35 Crore in the preceding financial year.

Your Company's turnover is less than 35 crores in the precedingfinancial year. Hence Section 148 of the Companies Act 2013 is not applicable to yourCompany.

28. SECRETARIAL STANDARDS SECREATRIAL AUDITORS

The Board of Directors confirms that your Company has complied with theapplicable Secretarial Standards during the year 2019-20.

The Board has appointed M/s Vishal Gambhir & Associates PracticingCompany Secretaries to conduct Secretarial Audit for the Financial Year 2019-20. TheSecretarial Audit Report for the Financial Year ended 31stMarch 2020 isannexed herewith marked as Annexure- IV to this Report.

29. INTERNAL AUDITORS

The Company has appointed Mr. Amardeep Singh as internal auditorundertake the audit exercise. During the year the Company continued to implement theirsuggestions and recommendations to improve the control environment. This includes reviewof processes for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths inall areas. Internal Auditors findings are discussed with the process owners and suitablecorrective actions taken as per the directions of Audit Committee on an ongoing basis toimprove efficiency in operations.

30. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THEREGULATORS OR COURTS OR TRIBUNAL

During the Financial Year no order has been passed by the authoritieswhich impacts the going concern status and company's operations in future.

31. HUMAN RESOURCES

Your Company treats its "Human Resources" as one of its mostimportant assets. The Company has taken pragmatic steps for strengthening organizationalcompetency through involvement and development of employees as well as installingeffective systems for improving the productivity quality and accountability at functionallevels.

32. INDUSTRIAL RELATIONS

During the year under review your Company enjoyed cordial relationshipwith workers and employees at all levels.

33. INSURANCE

Your Company has taken reasonable steps to prevent risks and the Boardis kept apprised of the risk assessment and minimization procedure. The assets of theCompany have been adequately covered under insurance. The policy values have been enhancedtaking into consideration the expanded and upgraded facilities of the Company.

34. INFORMATION TECHNOLOGY

The Company continues to derive its business and service functionsthrough deployment of a strong Information Technology network across its officesverticals outlets etc. to inculcate efficiency and discipline at all levels. Theemployee's information like personal data (personal information qualification andremuneration details etc.) employee data (current & past employment and trainingdetails) self-task (attendance leave and training request IT declarations etc.) and MIScontinue to be coordinated through this System. The Management of the Company interactswith the employees with regular thoughts and mails.

35. RESEARCH AND DEVELOPMENT

The Company continues to give significant attention to Research &Development which has been providing significant support to the manufacturing capabilitiesof the Company and has helped the company in expanding its product basket significantly.This has also enabled the Company to become the most preferred source for its customers.

36. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) oftheCompaniesAct2013 and rule12(1) of the Companies (Management and Administration) Rules 2014 an extract of annualreturn in MGT 9 as a part of this Annual Report as ANNEXURE-V.

37. MANAGEMENT DISCUSSION & ANALYSIS

A detailed analysis of the Company's performance is discussed in theManagement Discussion and Analysis Report which forms part of this Annual Report andmarked as Annexure-VI.

38. CORPORATE GOVERNANCE REPORT

As required by regulation 27(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a detailed report of Corporate Governance aswell as Corporate Governance Compliance Certificate is included in the Annual Report andmarked as Annexure-VII.

39. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 the Directors confirm that:- in the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures.

- accounting policies have been selected and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period.

- proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities

- the annual accounts have been prepared on a going concern basis; and;

- Internal financial controls followed by the company and thoseinternal financial controls are adequate and were operating effectively.

- proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

40. ACKNOWLEDGEMENT

Your Directors hereby express their appreciation for the cooperationand assistance received from stakeholders banks valued clients and business associates.Your Directors also wish to place on record their deep sense of appreciation for thediligent support and efforts of the employees at all levels towards the operations andgrowth of the Company.

For and on behalf of the Board of Directors ALCHEMIST LIMITED

Sd/-
Date: 04.09.2020 Bikram Bhattacharya
Place: New Delhi (Chairperson & WTD)
DIN-03595530

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