Your Directors have pleasure in presenting their 11th Annual Report togetherwith the Audited Statement of Accounts for the year ended 31st March 2021.
1. Operations and State of Affairs of the Company:
Rs In Crores
| || |
| ||2021 ||2020 ||2021 ||2020 |
|Revenue from operations ||5051.44 ||4132.55 ||5393.13 ||4605.75 |
|Other Income ||9.73 ||134.75 ||10.02 ||4.94 |
|Profit for the year before Interest Depreciation & Amortisation and Tax ||1581.97 ||1327.65 ||1567.58 ||1184.30 |
|Less || || || || |
|Interest (net) ||12.77 ||25.19 ||16.02 ||27.16 |
|Depreciation & Amortisation Expense ||152.60 ||135.67 ||183.47 ||157.32 |
|Provision for Taxation ||241.20 ||197.39 ||253.32 ||199.18 |
|Share of (Profit) / Loss of Associates and Joint Venture ||- ||- ||(31.74) ||(0.05) |
|Non-controlling Interest ||- ||- ||(31.61) ||(28.12) |
|Net Profit for the year ||1175.39 ||969.40 ||1178.11 ||828.82 |
|Retained Earnings - Balance brought forward ||1688.92 ||1296.49 ||1538.64 ||1286.87 |
|Less: || || || || |
|Other Comprehensive Income ||0.88 ||9.33 ||0.99 ||9.41 |
|Provision for Debenture Redemption ||41.67 ||41.67 ||41.67 ||41.67 |
|Dividend paid on Equity Shares during the year ||- ||292.20 ||- ||292.20 |
|Corporate Dividend tax paid during the year ||- ||33.77 ||- ||33.77 |
|Transfer to General Reserve ||250.00 ||200.00 ||250.00 ||200.00 |
|Balance carried forward ||2571.77 ||1688.92 ||2424.10 ||1538.64 |
The break-up of consolidated sales including export incentives is as under:
Rs In Crores
|Particulars || ||2021 ||2020 |
|Formulations ||India ||1496.65 ||1425.32 |
| ||International ||2941.78 ||2472.84 |
|API ||India ||182.18 ||164.84 |
| ||International ||772.51 ||542.75 |
|Total || ||5393.13 ||4605.75 |
The Company has prepared the Standalone and Consolidated Financial Statements inaccordance with the Companies (Indian Accounting Standards) Rules 2015 prescribed underSection 133 of the Companies Act 2013 (the "Act").
2. Transfer to Reserves:
The Company has transferred an amount of RS 250 Crores from the net profits of theCompany to General Reserve for the financial year ended 31st March 2021.
The Board of Directors at their meeting held on 4th May 2021 hasrecommended Dividend of RS 14/- (700%) per equity share having face value of RS 2/- eachfor the financial year 2020-21 as against the Dividend of RS 7/- (350%) per equity shareand an additional Special Dividend of RS 3/- (150%) per equity share aggregating to totalDividend of RS 10/- (500%) per equity share having face value of RS 2/- each for thefinancial year 2019-20.
4. Management Discussion and Analysis Report:
The Management Discussion and Analysis Report as required under Regulation 34 read withSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI Listing Regulations 2015")forms part of this Annual Report. Certain Statements in the said report may beforward-looking. Many factors may affect the actual results which could be different fromwhat the Directors envisage in terms of the future performance and outlook.
5. USFDA Audit:
During the year due to COVID-19 pandemic only our new Injectable Facility (F-3) atKarkhadi was inspected by USFDA with 5 procedural observations. As on date theEstablishment Inspection Report (EIR) is in place for all our USFDA facilities (includingthe facility of our Joint Venture Aleor Dermaceuticals Limited) except for the saidfacility at Karkhadi.
6. Change in capital structure:
During the year under review the Company through its maiden Qualified InstitutionalPlacement (QIP) allotted 8047210 equity shares to the eligible Qualified InstitutionalBuyers (QIBs) at an issue price of RS 932/- per equity share (including a premium of RS930/- per equity share) aggregating to approximately RS 750 Crores.
The Company has fully utilised the net proceeds of funds raised through the QIP for thepurposes mentioned in the placement document.
As on 31st March 2021 the outstanding amount of unsecured rated listedredeemable non-convertible debentures issued by the Company is RS 500 Crores.
During the year under review the Company had issued commercial papers (CPs) to meetworking capital requirements. As on 31st March 2021 there are no outstandingCPs.
The other financing requirement of the Company has been met through working capitalloans from multiple banks.
8. Subsidiaries Associates and Joint Venture:
A statement containing the salient features of the financial statements of subsidiary /associate / joint venture companies as per Section 129(3) of the Act is part of theconsolidated financial statements.
In accordance with third proviso of Section 136(1) of the Act the Annual Report of theCompany containing therein its standalone and the consolidated financial statements hasbeen placed on the website of the Company www.alembicpharmaceuticals.com. Further as perfourth proviso of the said section audited annual accounts of each of the subsidiarycompanies have also been placed on the website of the Company. Shareholders interested inobtaining a physical copy of the audited annual accounts of the subsidiary companies maywrite to the Company Secretary requesting for the same.
The Board of Directors at its meeting held on 19th January 2021 hasre-appointed Mr. Chirayu Amin (DIN: 00242549) as Executive Director (Chairman & ChiefExecutive Officer) Mr. Pranav Amin (DIN: 00245099) as Managing Director and Mr. R. K.Baheti (DIN: 00332079) as Director-Finance & Chief Financial Officer of the Companyfor a period of five years effective from 1st April 2021 subject to approvalof the members at the ensuing Annual General Meeting.
In accordance with the provisions of Section 152 and other applicable provisions ifany of the Act and the Articles of Association of the Company Mr. R. K. Baheti (DIN:00332079) Director - Finance & Chief Financial Officer of the Company will retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.
10. Key Managerial Personnel:
Mr. Chirayu Amin Chairman & Chief Executive Officer Mr. Pranav Amin ManagingDirector Mr. Shaunak Amin Managing Director Mr. R. K. Baheti Director - Finance &Chief Financial Officer and Mr. Charandeep Singh Saluja Company Secretary are KeyManagerial Personnel of the Company.
11. Meetings of the Board:
Six (6) Board Meetings were held during the financial year ended 31st March2021. The details of the Board Meetings with regard to their dates and attendance of eachof the Directors thereat have been provided in the Corporate Governance Report.
12. Independent Directors:
The Company has received declarations / confirmations from all the IndependentDirectors of the Company as required under Section 149(7) of the Act read with Rule 6 ofthe Companies (Appointment and Qualification of Directors) Rules 2014 and Regulation25(8) of the SEBI Listing Regulations 2015.
13. Performance Evaluation:
Pursuant to the provisions of the Act and the SEBI Listing Regulations 2015 the Boardhas carried out the annual performance evaluation of the Directors individually as well asevaluation of the working of the Board and of the Committees of the Board by way ofindividual and collective feedback from Directors.
The following were the Evaluation Criteria:
a) For Independent Directors:
Knowledge and Skills
Duties Role and Functions
Fulfillment of the Independence Criteria and their independence from themanagement
b) For Executive Directors:
Performance as Team Leader/Member
Evaluating Business Opportunity and analysis of Risk Reward Scenarios
Set Key Goals and Achievements
Professional Conduct and Integrity
Sharing of Information with the Board
The Directors expressed their satisfaction with the evaluation process.
14. Audit Committee:
The Audit Committee consists of Independent Directors with Mr. Paresh Saraiya asChairman Mr. K. G. Ramanathan Mr. Pranav Parikh and Dr. Archana Hingorani as members.The Committee inter alia reviews the Internal Control System Reports of InternalAuditors Key Audit Matters presented by the Statutory Auditors and compliance of variousregulations. The Committee also reviews the financial statements before they are placedbefore the Board.
15. Vigil Mechanism:
Pursuant to the provisions of Section 177(9) & (10) of the Act and the SEBI ListingRegulations 2015 a Vigil Mechanism or Whistle Blower Policy for directors employees andother stakeholders to report genuine concerns has been established. The same is uploadedon the website of the Company and the web-link as required under SEBI Listing Regulations2015 is as under:
16. Internal Control Systems:
The Company's internai controi procedures which inciude internai financiai controisensure compiiance with various poiicies practices and statutes and keeping in view theorganisation's pace of growth and increasing compiexity of operations. The internaiauditors' team carries out extensive audits throughout the year across aii iocations andacross aii functionai areas and submits its reports to the Audit Committee of the Board ofDirectors.
17. Corporate Social Responsibility:
Aiembic Group has been proactiveiy carrying out CSR activities since more than fiftyyears. Aiembic Group has estabiished nurtured and promoted various Non-ProfitOrganisations focusing on three major areas - Education Heaithcare and Rurai Deveiopment.
In compiiance with requirements of Section 135 of the Act the Company has iaid down aCSR Poiicy. The composition of the Committee contents of CSR Poiicy and report on CSRactivities carried out during the financiai year ended 31st March 2021 in theformat prescribed under the Companies (Corporate Sociai Responsibiiity Poiicy) Ruies 2014is annexed herewith as Annexure A.
18. Policy on Nomination and Remuneration:
In compiiance with the requirements of Section 178 of the Act and Reguiation 19 of theSEBI Listing Reguiations 2015 the Company has iaid down a Nomination and RemunerationPoiicy which has been upioaded on the Company's website. The web-iink as required underthe Act is as under:
The saiient features of the NRC Poiicy are as under:
1) Setting out the objectives of the Poiicy
2) Definitions for the purposes of the Poiicy
3) Poiicy for appointment and removai of Director KMP and Senior Management
4) Poiicy reiating to the Remuneration for the Manageriai Personnei KMP SeniorManagement Personnei & other empioyees
5) Remuneration to Non-Executive / Independent Director
19. Dividend Distribution Policy:
In compiiance with the requirements of Reguiation 43A of the SEBI Listing Reguiations2015 the Company has iaid down a Dividend Distribution Poiicy which is annexed herewithas Annexure B and has been upioaded on the Company's website. The web-iink as requiredunder SEBI Listing Reguiations 2015 is as under:
20. Related Party Transactions:
Reiated party transactions that were entered into during the financiai year were onarm's iength basis and were in ordinary course of business. There are no materiaiiysignificant 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 Act read with Rule 8(2) of theCompanies (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 SEBI Listing Regulations 2015 isas under:
21. Corporate Governance Report:
The Report on Corporate Governance as required under Regulation 34 read with Schedule Vof the SEBI Listing Reguiations 2015 forms part of this Annuai Report.
The requisite certificate from M/s. Samdani Shah & Kabra Practising CompanySecretaries confirming compliance with the conditions of Corporate Governance asstipulated under the aforesaid Schedule V is attached to the Report on CorporateGovernance.
22. Business Responsibility Report:
The Business Responsibility Report as required under Reguiation 34 of the SEBI ListingReguiations 2015 forms part of this Annuai Report.
23. Listing of securities:
The equity shares of the Company are iisted on BSE Limited (BSE) and National StockExchange of India Limited (NSE) with security ID/symboi of APLLTD.
The unsecured rated iisted redeemabie non-convertibie debentures of the Company areiisted on NSE under separate security ID for each tranche.
The Company confirms that the annuai iisting fees to both the stock exchanges for thefinanciai year 2021-22 have been paid.
24. Loans Guarantees or Investments:
During the year under review the Company has not given any Guarantees faiiing withinthe purview of the provisions of Section 186 of the Act read with the Companies (Meetingsof Board and its Powers) Ruies 2014. The detaiis of Loans granted and Investments madeunder the said provisions are provided in Note No. 22 5 & 7 respectiveiy of Notes toStandaione Financiai Statements of the Company.
a) Statutory Auditors:
In compiiance with the provisions of the Companies (Audit and Auditors) Ruies 2014M/s. K C Mehta & Co. Chartered Accountants having Firm Registration No. 106237W hasbeen appointed as Statutory Auditors of the Company by the members at their 10thAnnuai Generai Meeting heid on 22nd Juiy 2020 to hoid office for a term of 5(five) years i.e. tiii the conciusion of Annuai Generai Meeting (AGM) for the financiaiyear 2024-25.
The Auditor's Report for the financiai year 2020-21 does not contain any quaiificationreservation or adverse remark. The Auditor's Report is enciosed with the financiaistatements in this Annuai Report.
b) Secretarial Auditors:
The Board of Directors appointed M/s. Samdani Shah & Kabra Practising CompanySecretaries to conduct Secretariai Audit for the financiai year 2021-22.
The Secretariai Audit Report of M/s. Samdani Shah & Kabra Practicing CompanySecretaries for the financiai year 2020-21 is annexed herewith as Annexure C.
The Secretariai Audit Report does not contain any quaiification reservation or adverseremark.
During the year under review the Company has compiied with the appiicabie provisionsof the Secretariai Standards.
c) Cost Auditors:
The Board of Directors appointed M/s. Diwanji & Co. Cost & ManagementAccountants as Cost Auditors for conducting audit of the cost records maintained by theCompany reiating to Buik Drugs and Formuiations for the financiai year 2021-22. TheCompany has prepared and maintained the cost records as specified by the CentraiGovernment under Section 148(1) of the Act.
d) Internal Auditors:
The Board of Directors appointed M/s. Sharp & Tannan Associates CharteredAccountants as Internai Auditors of the Company for the financiai year 2021-22.
26. Risk Management:
The Company has constituted a Risk Management Committee and formulated Enterprise RiskManagement Policy which functions as a guiding tool in fulfilling the management'sresponsibility towards risk management. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.These are discussed at the meetings of the Risk Management Committee Audit Committee andthe Board of Directors of the Company.
27. 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 2021.Further it is hereby confirmed that there has been no change in the nature of business ofthe Company.
28. Annual Return:
A copy of the Annual Return as required under Section 92(3) and Section 134(3)(a) ofthe Act has been placed on the Company's website. The web-link as required under the Actis as under:
29. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:
The information required under Section 134(3)(m) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 is annexed herewith as Annexure D.
30. 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 E.
A statement showing the names and particulars of the employees failing within thepurview of Rule 5(2) of the aforesaid rules are provided in the Annual Report. The AnnualReport is being sent to the members of the Company excluding the aforesaid information.The said information is available for inspection at the Registered Office of the Companyduring working hours and the same wiii be furnished on request in writing to the members.
31. Other Disclosures:
a) The Company has not accepted/renewed any deposits. Further there has been nodefault in repayment of deposits or interest thereon.
b) The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
c) Neither the Managing Director nor the Whoie- time Directors of the Company havereceived any remuneration or commission from any of its subsidiaries.
d) No significant or materiai orders were passed by the Reguiators or Courts orTribunais which impact the going concern status and Company's operations in future.
e) No fraud has been reported by the Auditors to the Audit Committee or the Board.
f) The Company has compiied with the provisions reiating to the constitution ofInternai Compiaints Committee under the Sexuai Harassment of Women at Workpiace(Prevention Prohibition and Redressai) Act 2013 to redress compiaints received regardingsexuai harassment.
32. Directors' Responsibility Statement:
Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowiedge and abiiity confirm that:
a) in preparation of the annuai accounts the appiicabie accounting standards have beenfoiiowed aiong with proper expianation reiating to materiai departures if any;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
c) they have taken proper and sufficient care for maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
On behalf of the Board of Directors
Chairman & Chief Executive Officer
Date: 4th May 2021
Alembic Pharmaceuticals Limited
Regd. Office: Alembic Road
Vadodara - 390 003
Tel: +91 265 2280550
Email Id: apLinvestors@aiembic.co.in