Your Directors have pleasure in presenting their 5th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2015.
1.Financial Summary and Highlights:
(Rs in lacs)
|Particulars ||Consolidated Basis ||Stand Alone Basis |
|For the year ended 31st March ||2015 ||2014 ||2015 ||2014 |
|Profit for the year before Interest Depreciation and Tax ||40526 ||36091 ||40839 ||36221 |
|Adjusting therefrom: || || || || |
|Interest (net) ||178 ||981 ||111 ||981 |
|Depreciation ||4441 ||4049 ||4441 ||4049 |
|Provision for taxation ||7635 ||7510 ||7625 ||7363 |
|Share of Profit of Associates ||20 ||- ||- ||- |
|Net Profit ||28292 ||23551 ||28661 ||23828 |
|Share of Reserves in Joint Venture ||1496 ||- ||- ||- |
|Share of Loss in Associate ||(128) ||- ||- ||- |
|Adding thereto: || || || || |
|Balance brought forward from previous year ||17986 ||11241 ||14805 ||7594 |
|The amount available is ||47646 ||34792 ||43466 ||31422 |
|Appropriating there from: || || || || |
|Provision for Dividend - Equity Shares ||6598 ||5845 ||6598 ||5655 |
|Provision for Corporate Dividend tax ||1343 ||961 ||1343 ||961 |
|Transfer to General Reserve ||10000 ||10000 ||10000 ||10000 |
|Balance carried forward to Balance Sheet ||29705 ||17986 ||25525 ||14805 |
2. Transfer to Reserves:
An amount of H10000 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 H3.50 per share (i.e. 175%) offace value H2/- per share for the financial year ended on 31st March 2015 as against H3/-per share (i.e. 150%) for the year ended 31st March 2014.
4. Management Discussion and Analysis Report:
The Report on Management Discussion and Analysis Report as required under clause 49 ofthe Listing Agreement is included in this Report. Certain statements in the said reportmay be forward looking. Many factors may affect the actual results which could bedifferent from what the Directors envisage in terms of the future performance and outlook.
5. Operations and State of affairs of the Company:
The Companys Standalone revenues from operations were H2019 crore for the yearended 31st March 2015 as compared to H1843.79 crore for the previous year.
The Company has made Net Profit of H286.61 crore on standalone basis for the year underreview as compared to H238.28 crore for the previous year.
The Company has registered consolidated revenues from operations of H2056.12 crore forthe year under review as compared to H1863.22 crore for the previous year.
The break-up of consolidated sales excluding export incentives and other miscellaneousrevenues is as under:
(Rs in lacs)
| ||Particulars ||F.Y. ||F.Y. |
| || ||2014-15 ||2013-14 |
| ||Branded Domestic ||98084 ||85064 |
| ||Generic & NSA Domestic ||12274 ||12071 |
|Formulations || || || |
| ||Branded Export ||6349 ||7360 |
| ||International Generics ||51845 ||46837 |
|API ||Domestic ||6412 ||5491 |
| ||Exports ||30238 ||28394 |
| ||Others ||1571 ||1624 |
| ||Total ||206773 ||186841 |
The Company has made a consolidated profit after tax of H282.92 crore for the yearunder review as compared to H235.51 crore for the previous year.
6. Subsidiaries Associates and Joint Ventures:
As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the BoardsReport has been prepared on standalone financial statements and a report on performanceand financial position of each of the subsidiaries and associates included in theconsolidated financial statements is included in the financial statements.
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 theCompanys registered office.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. R. K. Baheti Director of the Company will retire byrotation at the ensuing Annual General Meeting and is eligible for re-appointment. Duringthe year under review the Board has appointed Dr. Archana Hingorani as AdditionalDirector (Independent) w.e.f. 4th February 2015. She holds office up to theensuing Annual General Meeting of the Company. The Company has received a notice togetherwith requisite deposit of H1 Lac under Section 160 of the Companies Act 2013 from amember of the Company proposing her candidature for the office of an Independent Directorfor a term of 5 consecutive years upto 3rd February 2015.
The Board has appointed Mr. Pranav Amin Director & President - InternationalBusiness and Mr. Shaunak Amin Director & President - Branded Formulations Business asJoint Managing Directors of the Company w.e.f. 27th April 2015.
8. Key Managerial Personnel:
Mr. Chirayu Amin Chairman & Managing Director and CEO
Mr. Pranav Amin Director & President - International Business Mr. Shaunak AminDirector & President - Branded Formulations Business Mr. R. K. Baheti Director -Finance & CFO and Mr. Ajay Kumar Desai Vice President - Finance & CompanySecretary are Key Managerial Personnel of the Company.
During the year under review pursuant to provisions of the Companies Act 2013 Mr. R.K. Baheti who was CFO & Company Secretary of the Company relinquished the office ofCompany Secretary. He has been designated as Director-Finance & CFO of the Companyw.e.f. 28th July 2014.
Mr. Ajay Kumar Desai has been designated as Vice-President Finance & CompanySecretary of the Company w.e.f. 28th July 2014.
9. Meetings of the Board:
Four (4) Board Meetings were held during the financial year ended 31st March 2015. 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 sub-section (6) of Section 149 ofthe Companies Act 2013.
11. Performance Evaluation:
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreements the Board has carried out the annual performance evaluation of the Directorsindividually as well as evaluation of the working of the Board and of the Committees ofthe Board by way of individual and collective feedback from Directors.
The following were the Evaluation Criteria:
(a) For Independent Directors:
- Knowledge and Skills
- Professional conduct
- Duties Role and functions
(b) 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 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 and Mr. Pranav Parikh as members. The Committee interaliareviews the Internal Control System and reports of Internal Auditors and compliance ofvarious regulations. The Committee also reviews at length the Financial Statements beforethey are placed before the Board.
13. Vigil Mechanism:
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 andListing Agreements a Vigil Mechanism or Whistle Blower Policy for directorsemployees and other stakeholders to report genuine concerns has been established. The sameis also uploaded on the 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 in keeping withthe organizations pace of growth and increasing complexity of operations. Theinternal auditor team carries 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 Organisations focusing on threemajor areas Education Healthcare and Rural Development.
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 2015 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 Clause 49(IV) of the Listing Agreements are provided 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 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 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 relatedparty transactions which has been uploaded on the Companys website. The web-link asrequired under Listing Agreement is as under:http://www.alembic-india.com/upload/05APL-RPT%20policy. pdf
18. Corporate Governance:
The Report on corporate governance as stipulated under Clause 49 of the ListingAgreement forms part of the Annual Report. The requisite certificate from M/s. SamdaniShah & Associates Practising Company Secretaries confirming compliance with theconditions of corporate governance as stipulated under the aforesaid Clause 49 isattached to the Report on corporate governance.
19. Fixed Deposits:
Pursuant to provisions of Section 74 of the Companies Act 2013 during the year2014-15 the Company has repaid the deposits accepted prior to 1st April 2014. As on 31stMarch 2015 there were unclaimed deposits amounting to H9.43 lacs from 25 deposit holderswhich have been transferred to current liabilities. There has been no default in repaymentof deposits or interest thereon. In F.Y. 2014-15 the Company has not accepted/renewed anydeposits.
20. Listing of shares:
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 533573 and on 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 2015-16 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 has 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. 2015-16.
(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.2015-16.
The Secretarial Audit Report of M/s. Samdani Shah & Associates Practising CompanySecretaries for the financial year ended 31st March 2015 is annexed as Annexure C.
(c) Cost Auditors:
Mr. H. R. Kapadia Cost Accountant Vadodara Cost Auditor of the Company for F.Y.2014-15 have been again appointed as Cost Auditor for conducting audit of the costaccounts maintained by the Company relating to Bulk Drugs and Formulations for the F.Y.2015-16.
(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. 2015-16. There is noqualification reservation adverse remark or disclaimer by the Statutory Auditors intheir report or by the Secretarial Auditors in their Secretarial Audit Report and hence noexplanation 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) inpreparation of the annual accounts for the financial year ended 31st March 2015 theapplicable accounting standards have been followed along with proper explanation relatingto 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 2015 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 2015. 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 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 Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as Annexure F. In terms of theprovisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names and other particulars of the employees drawing remuneration in excess of thelimits set out in the said rules are provided 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.
On behalf of the Board of Directors
Chirayu R. Amin
Chairman & Managing Director
27th April 2015
Alembic Pharmaceuticals Limited
Regd. Office: Alembic Road Vadodara-390 003
Format for the Annual Report on CSR Activities to be included in the Board Report
1. A brief outline of the Companys 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 Companys CSR Policy provides for carrying out CSRactivities in the area of Education Healthcare and Rural Development through variousNot for Profit Organisations including Bhailal Amin General Hospital RuralDevelopment Society Uday Education Society etc. The CSR spend may be carried out by wayof donation to the corpus of the above Not for profit organisations orcontribution towards some specific project being undertaken by any of the organisations.
Weblink to the CSR Policy of the Company:http://www.alembic-india.com/upload/05APL-CSR%20 Policy.pdf
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: H236 crore
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): H4.72crore.
5. Details of CSR Spent during the financial year
(a) Total amount to be spent for the financial year: H4.72 crore (b) Amount unspent ifany: H1.62 crore (c) Manner in which the amount spent during the financial year isdetailed below:
|(1) ||(2) ||(3) ||(4) ||(5) ||(6) ||(7) ||(8) |
|S. No. ||CSR project or activity identified ||Sector in which the project is covered ||Projects or programs ||Amount outlay (budget) project or programs wise ||Amount spent on the projects or programs ||Cumulative expenditure upto the reporting period ||Amount Spent: Direct or through implementing agency |
| || || ||(1) Local area or other || ||Sub-heads || || |
| || || ||(2) Specify the State and District where projects or programs was undertaken || ||1. Direct || || |
| || || || || ||Expenditure on projects or programs || || |
| || || || || ||2. Overheads: || || |
|1 ||Contribution towards construction of Hostel Building for Students of School run by Rural Development Society ||Education ||Panelav Dist. ||Single Program ||Direct Expenditure on the Project H3.10 Crore ||H 3.10 Crore ||Through Implementing Agency - Rural Development Society. (Panelav Tal. Halol Panchmahal) |
6. In case the Company has failed to spend the two percent of the average net profit ofthe last three financial years or any part thereof the Company shall provide the reasonsfor not spending the amount in its Board Report: The Company has filed an application toset up a trust Alembic CSR Foundation jointly with other Companies of theAlembic Group for the purpose of carrying out CSR activities. The approval of CharityCommissioners office is still awaited.
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 Sd/-
Chirayu R. Amin
Chairman & Managing Director and Chairman of CSR Committee
Particulars of Loans Guarantee or Investments made by the Company:
(Rs in lacs)
|Nature of Transaction (whether loan/guarantee/ investments Investments in liquid scheme of Mutual Funds ||Date of making loans giving guarantee or making investments 03.04.2014 ||Name and address of the person or body corporate to whom it is made or given or whose securities have been acquired ||Amount ||Purpose of loan/ guarantee/ investments Temporary parking of surplus funds |
| || ||Reliance Mutual Fund (Reliance Liquid Fund ||500.00 || |
| || ||-Treasury Plan - Daily Dividend Option) & H Block || || |
| || ||1st Floor Dhirubhai Ambani Knowledge City || || |
| || ||Koparkhairne Navi Mumbai - 400 710 || || |
|--do-- ||23.04.2014 ||--do-- ||350.00 ||--do-- |
|--do-- ||25.04.2014 ||--do-- ||200.00 ||--do-- |
|--do-- ||22.05.2014 ||--do-- ||500.00 ||--do-- |
|--do-- ||23.05.2014 ||--do-- ||400.00 ||--do-- |
|--do-- ||28.05.2014 ||--do-- ||150.00 ||--do-- |
|--do-- ||28.05.2014 ||--do-- ||50.00 ||--do-- |
|--do-- ||09.06.2014 ||--do-- ||150.00 ||--do-- |
|--do-- ||11.06.2014 ||--do-- ||500.00 ||--do-- |
|--do-- ||13.06.2014 ||--do-- ||750.00 ||--do-- |
|--do-- ||16.06.2014 ||--do-- ||625.00 ||--do-- |
|--do-- ||17.06.2014 ||--do-- ||300.00 ||--do-- |
|--do-- ||17.06.2014 ||Birla Sun Life Cash Plus - Treasury Plan - Daily ||300.00 ||--do-- |
| || ||Dividend option & 17th Floor Tower 1 One India || || |
| || ||Bulls Centre Mumbai - 400013 || || |
|--do-- ||23.06.2014 ||Reliance Mutual Fund (Reliance Liquid Fund ||200.00 ||--do-- |
| || ||-Treasury Plan - Daily Dividend Option) & H Block || || |
| || ||1st Floor Dhirubhai Ambani Knowledge City || || |
| || ||Koparkhairne Navi Mumbai - 400 710 || || |
|--do-- ||24.06.2014 ||--do-- ||50.00 ||--do-- |
|--do-- ||25.06.2014 ||--do-- ||450.00 ||--do-- |
|--do-- ||27.06.2014 ||--do-- ||100.00 ||--do-- |
|--do-- ||30.06.2014 ||--do-- ||1200.01 ||--do-- |
|--do-- ||11.07.2014 ||--do-- ||50.00 ||--do-- |
|--do-- ||23.11.2014 ||--do-- ||650.01 ||--do-- |
|--do-- ||24.11.2014 ||--do-- ||200.00 ||--do-- |
|--do-- ||25.11.2014 ||--do-- ||750.00 ||--do-- |
|--do-- ||30.12.2014 ||--do-- ||200.00 ||--do-- |
|--do-- ||27.01.2015 ||--do-- ||1500.00 ||--do-- |
|--do-- ||10.02.2015 ||--do-- ||200.00 ||--do-- |
|--do-- ||24.02.2015 ||--do-- ||900.00 ||--do-- |
|--do-- ||25.03.2015 ||--do-- ||700.00 ||--do-- |
Note: The above stated investments are gross investments and are not net of redemptionsmade by the Company.
|Nature of Transaction (whether loan/ guarantee/ investments Corporate Bank Guarantee ||Date of making loans giving guarantee or making investments ||Name and address of the person or body corporate to whom it is made or given or whose securities have been acquired ||Amount ||Purpose of loan/ guarantee/ investment |
| ||11.07.2014 ||Alembic Global Holding SA Rue Fritz-Courvoisier 40 2300 La Chaux-de-Fonds Switzerland ||USD 5.00 Millions ||To support 100% subsidiary of the Company |
|-do- ||09.10.2014 ||-do- ||Euro 3.50 Millions ||-do- |