to the Members
Alkem Laboratories Limited
Your Directors are pleased to present their 46th AnnualReport on the business and operations together with the Audited Financial Statements ofthe Company for the financial year ended 31st March 2020. Consolidatedperformance of the Company and its subsidiaries has been referred to wherever required.
| || |
|Particulars ||Year ended 31st March 2020 ||Year ended 31st March 2019 ||Year ended 31st March 2020 ||Year ended 31st March 2019 |
|Income from Operations ||66770.8 ||57140.9 ||83443.6 ||73571.9 |
|Other Income ||959.8 ||675.8 ||1042.2 ||877.0 |
|Total Revenue ||67730.6 ||57816.7 ||84485.8 ||74448.9 |
|Profit before Interest Depreciation and Tax ||15636.3 ||11132.9 ||15776.2 ||12024.7 |
|Less: Interest ||387.1 ||282.6 ||650.6 ||546.3 |
|Less: Depreciation ||1868.4 ||1410.7 ||2527.6 ||1931.8 |
|Profit before tax ||13380.8 ||9439.6 ||12597.9 ||9546.6 |
|Less: Provision for Taxation (net) ||736.6 ||1441.2 ||1104.8 ||1810.2 |
|Profit after tax and before Non-controlling Interest ||12644.2 ||7998.4 ||11493.1 ||7736.4 |
|Less: Non-controlling Interest ||- ||- ||222.4 ||131.3 |
|Profit for the year ||12644.2 ||7998.4 ||11270.7 ||7605.1 |
|Other comprehensive income ||(172.8) ||(41.8) ||268.6 ||310.0 |
|Other comprehensive income attributable to Non-Controlling Interest ||- ||- ||5.4 ||1.1 |
|Total comprehensive income attributable to owners of the Company ||12471.4 ||7956.6 ||11544.7 ||7916.2 |
|Balance of other equity as of 01.04.2019 ||54413.0 ||48614.5 ||54154.3 ||48398.6 |
|Dividend on Equity Shares ||(3587.0) ||(1793.5) ||(3587.0) ||(1793.5) |
|Dividend Distribution Tax ||(732.1) ||(364.6) ||(743.8) ||(372.8) |
|Employee Stock option exercised ||- ||- ||(2.1) ||- |
|Employee Compensation Expenses ||- ||- ||1.5 ||5.8 |
|Balance of other equity as of 31.03.2020 ||62565.3 ||54413.0 ||61367.6 ||54154.3 |
OVERVIEW OF FINANCIAL PERFORMANCE
During the financial year ended 31st March 2020 theCompany's total revenue including other income was ' 67730.6 Million on standalonebasis as against Rs 57816.7 Million achieved in the previous year registering agrowth of 17 %.
The export turnover of the Company during the financial year 2019-20was Rs 15917.1 Million as against Rs 12159.5 Million achieved in theprevious year registering a growth of 31%.
During the financial year ended 31st March 2020 theCompany and its subsidiaries achieved total revenue including other income of Rs 84485.8Million on consolidated basis as against a turnover of Rs 74448.9 Millionachieved in the previous year registering a growth of 13%.
During the financial year ended 31st March 2020 StandaloneProfit before interest depreciation and tax increased by 40% at Rs 15636.3Million as against Rs 11132.9 Million in the previous year whereas ConsolidatedProfit before interest depreciation and tax increased by 31% at Rs 15776.2Million as against Rs 12024.7 Million in the previous year. As a resultStandalone Profit before tax grew by 42% over the previous year to Rs 13380.8Million and Consolidated Profit before tax was Rs 12597.9 Million which grew by 32% overthe previous year.
The Standalone net profit after tax for the financial year ended 31stMarch 2020 increased by 58% to Rs 12644.2 Million over the previous year whilethe Consolidated net profit after tax increased by 48 % over the previous year to Rs 11270.7Million.
During the financial year 2019-20 Board of Directors on 7th February2020 declared and paid an interim dividend at Rs 22/- (Rupees Twenty Two only) perequity share of Rs 2/- (Rupees Two only) each being 1100% of paid up sharecapital. In addition your Directors are pleased to recommend payment of Rs 3/-(Rupees Three only) per equity share of the face value of Rs 2/- (Rupees Two only)each as final dividend for the financial year 2019-20 for the approval of the Members atthe ensuing Annual General Meeting (AGM). If approved the total dividend (interim andfinal dividend) for the financial year 2019-20 will be Rs 25/- (Rupees Twenty five only)per equity share of the face value of Rs 2/- (Rupees Two only) each as against thetotal dividend of Rs 16/- (Rupees Sixteen only) per equity share of the face valueof Rs 2/- (Rupees Two only) each paid for the previous financial year.
In compliance with the requirement of Regulation 43A of the SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 (hereinafter referredto as "SEBI LODR Regulations") the Company has formulated its DividendDistribution Policy which is available on the Company's website at https://www.alkemlabs.com/pdf/policies/977928327Dividend_distribution_ policy.pdf
The said Policy is also annexed to this Report as Annexure A.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve forthe financial year 2019-20.
The paid up Equity Share Capital of the Company as on 31st March2020 was Rs 239.1 Million. The Company has neither issued shares with differential rightsas to dividend voting or otherwise nor issued shares to the Employees or Directors of theCompany under any Scheme (including sweat equity shares).
The Company has not accepted any deposits from the public/ membersunder Section 73 of the Companies Act 2013 (hereinafter referred to as "theAct") read with Companies (Acceptance of Deposits) Rules 2014 during the year underreview. There are no deposits which are outstanding as on 31st March 2020.
As on 31st March 2020 the Company had 21 subsidiaries. TheCompany does not have any joint venture / associate company(ies) within the meaning ofSection 2(6) of the Act.
During the year under review none of the companies ceased to be asubsidiary of the Company however a new company named Ascend Laboratories SAS wasincorporated on 04th June 2019 as a wholly owned subsidiary of the Company inColombia.
In addition to the above on 08th April 2020 a new companynamed S&B Pharma LLC had been incorporated as a Step down subsidiary of the Company inUSA.
Pursuant to the first proviso to Section 129(3) of the Act and Rule 5and Rule 8(1) of the Companies (Accounts) Rules 2014 the salient features of financialstatements performance and financial position of each subsidiary is given in Form AOC-1as Annexure B to this Report.
The Audited Financial Statements of the subsidiaries are available onthe Company's website at www.alkemlabs.com pursuant to Section 136 of the Act.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is providedas a separate section forming part of this Report.
A detailed report on the Corporate Governance systems and practices ofthe Company is provided as a separate section along with a certificate from the StatutoryAuditors conforming the Company's compliance with the conditions of Corporate Governanceforming part of this Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34 of SEBI LODR Regulations theBusiness Responsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective is provided as a separate sectionforming part of this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company's CSR initiatives are as per the Company's CSR Policy. OurCSR program aims to address the immediate and long term needs of the community and focuson where we can make the major impact on marginalized sections of the society. TheCompany's CSR strategy involves a multi-sectoral inclusive approach to focus on communityneeds. It strives to improve the well-being of our communities by focusing on educationvocational training healthcare and sanitation environmental concerns and ruraldevelopment. The Company implements these activities directly or through strategic trust-based partnerships with various NGOs. During the financial year 2019-20 the Company hasaddressed the requirements of local communities in the vicinity of its manufacturingfacilities and R&D centers through focused projects in the areas of education healthand hygiene environment and community development.
As a part of CSR initiatives during the Covid-19 pandemic the Companyarranged distribution of essential items to cater the needs of the society at large andhas also contributed towards the Prime Minister's Citizen Assistance and Relief inEmergency Situations (PM CARES) Fund.
Details about the Company's CSR Policy and initiatives undertaken bythe Company during financial year 2019-20 are outlined in the Report on CSR Activitiesannexed to this Report as Annexure C.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments
The Board of Directors of the Company on the recommendation of theNomination and Remuneration Committee approved the re-appointment of Mr. Basudeo N. Singh(DIN: 00760310) as an Executive Chairman of the Company for a period of 5 (five)consecutive years w.e.f 01st April 2020 upto 31st March 2025subject to the approval of the shareholders. The Shareholders of the Company throughPostal Ballot on 04th April 2020 approved the said appointment of Mr. BasudeoN. Singh as an Executive Chairman of the Company not liable to retire by rotation for aperiod of 5 (five) consecutive years w.e.f. 01st April 2020 upto 31stMarch 2025.
The Board of Directors of the Company on recommendation of theNomination and Remuneration Committee appointed Mr. Sarvesh Singh (DIN: 01278229) as anAdditional Director designated as an Executive Director of the Company for a period of 5(five) consecutive years w.e.f. 11th November 2019 upto 10thNovember 2024. The Shareholders of the Company through Postal Ballot on 04thApril 2020 approved the appointment of Mr. Sarvesh Singh as a Whole Time Directordesignated as an Executive Director of the Company for a period of 5 (five) consecutiveyears w.e.f. 11th November 2019 upto 10th November 2024.
As per the provisions of Section 161 read with Section 149 of the Actthe Articles of Association of the Company and considering the expertise and experience ofMr. Narendra Kumar Aneja in the field of GRC (Governance Risk and Compliance) assignmentmanagement consultancy and high standards of integrity possessed by him the Board ofDirectors of the Company approved the appointment of Mr. Narendra Kumar Aneja (DIN:00124302) as an Additional Director designated as an Independent Director of the Companyfor a period of 5 (five) consecutive years w.e.f. 16th March 2020 upto 15thMarch 2025 subject to the approval of the shareholders. The Shareholders of theCompany through Postal Ballot on 04th April 2020 approved the saidappointment of Mr. Narendra Kumar Aneja as an Independent Director of the Company for aperiod of 5 (five) consecutive years w.e.f. 16th March 2020 upto 15thMarch 2025.
Resignations/ Retirements/ Demise/ Completion of Tenure
Late Mr. Samprada Singh Chairman Emeritus and Founder Promoter of theCompany expired on 27th July 2019. He had served on the Board of the Companysince its incorporation. He had rich and varied experience of over 45 years in the Indianpharmaceutical industry and had received various prestigious awards for his contribution.He had spearheaded the Company since its incorporation and under his guidance the Companyhas grown to its current stature. The Directors placed on record their sincereappreciation for the valuable strategic guidance and leadership provided by him to theCompany since its inception.
Mr. Akhouri Maheshwar Prasad (DIN: 07066439) completed his tenure as anIndependent Director on the Board of Directors of the Company on 15th March2020. The Board placed on record its appreciation for his valuable contribution during histenure as a Director of the Company.
Directors liable to Retirement by Rotation
Mr. Dhananjay Kumar Singh (DIN: 00739153) and Mr. Balmiki Prasad Singh(DIN: 00739856) are liable to retire by rotation at the ensuing AGM pursuant to theprovisions of Section 152 of the Act read with the Companies (Appointment andQualification of Directors) Rules 2014 and the Articles of Association of the Company andbeing eligible they have offered themselves for reappointment. Appropriate resolutions fortheir re-appointment are included in the Notice of AGM for seeking approval of Members.The Directors recommend their re-appointment for your approval.
Particulars in pursuance of Regulation 36 of the SEBI LODR Regulationsread with Secretarial Standard - 2 on General Meetings relating to Mr. Dhananjay KumarSingh and Mr. Balmiki Prasad Singh are given in the Notice of AGM.
Key Managerial Personnel
Mr. Sandeep Singh Managing Director Mr. Rajesh Dubey PresidentFinance and Chief Financial Officer and Mr. Manish Narang President - Legal CompanySecretary and Compliance Officer are the Key Managerial Personnel of the Company as on 31stMarch 2020 in accordance with the provisions of Section 203 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Independent Directors hold office for a fixed term of 5 (five)years and are not liable to retire by rotation.
Declaration of independence from Independent Directors
The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed under theprovisions of the Act read with the Schedules and Rules issued thereunder as well asclause (b) of sub-regulation (1) of Regulation 16 of the SEBI LODR Regulations (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force). Interms of Regulation 25(8) of the SEBI LODR Regulations the Independent Directors haveconfirmed that they are not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgement and without any external influence.
The terms and conditions of appointment of the Independent Directorsare posted on Company's website https://www.alkemlabs.com/pdf/policies/996508366Terms_of_appointment- Independent_directors.pdf.
In compliance with the requirements of SEBI LODR Regulations theCompany has put in place a framework for Directors'
Familiarization Programme to familiarize them with their roles rightsand responsibilities as Directors the working of the Company nature of the industry inwhich the Company operates business model etc. The details of the FamiliarizationProgramme conducted during the financial year under review are explained in the CorporateGovernance Report. The same is also available on the Company's website athttps://www.alkemlabs.com/ corporate-governance.
Annual Evaluation of Board's Performance
The details of the Evaluation of the individual Directors Board as awhole and all the Committees of the Board etc. have been provided in the CorporateGovernance Report which forms part this Report.
As per the provisions of Schedule IV of the Act and Regulation 25(3) ofthe SEBI Listing Regulations atleast one separate meeting of the Independent Directors ofthe Company shall be held in a year. However in order to address the COVID-19 pandemicMinistry of Corporate Affairs vide General Circular No. 11/ 2020 dated 24thMarch 2020 stated that if the Independent Directors of a company have not been able tohold the said meeting for the financial year 2019-20 the same shall not be viewed as aviolation. The said circular further mentions that the Independent Directors however mayshare their views amongst themselves through telephone or e-mail or any other mode ofcommunication if they deem it to be necessary. The Company was unable to hold a separateIndependent Directors meeting for FY 2019-20 but the Independent Directors in line withthe said circular shared their views amongst themselves telephonically.
The Company follows a policy for selection and appointment ofDirectors Senior Management and their remuneration which is available on the Company'swebsite at https://www.alkemlabs. com/pdf/policies/1378936118Nomination-and-Remuneration-Policy_modified%2027052016.pdf. The said policy is annexed to this Report as Annexure D.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed to this Report as Annexure E.
Further a statement showing the names and other particulars of top tenemployees in terms of remuneration drawn and of employees drawing remuneration in excessof the limits required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formspart of this Report. However in terms of first proviso to Section 136(1) of the Act theAnnual Report and Annual Financial Statements are being sent by email to the Members andothers entitled thereto excluding the aforesaid information. The said information isavailable for inspection by the Members at the Registered Office of the Company during thebusiness hours on all working days up to the date of AGM and also shall be providedelectronically to any Member on a written request to obtain a copy of the same to theCompany Secretary.
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 7 (Seven) times during the financial year2019-20. The details of the Board Meetings and the attendance of Directors thereat areprovided in the Corporate Governance Report which forms part of this Report.
COMMITTEES OF THE BOARD Audit Committee
The Audit Committee comprises of Mr. Ranjal Laxmana Shenoy Chairmanand Mr. Sandeep Singh Mr. Mritunjay Kumar Singh Ms. Sudha Ravi Ms. Sangeeta Singh andMr. Narendra Kumar Aneja (inducted as Member w.e.f. 16th March 2020) asMembers. Mr. Akhouri Maheshwar Prasad was a Member of this Committee upto 15thMarch 2020. The brief terms of reference of the Audit Committee and the particulars ofmeetings held and attendance thereat are mentioned in the Corporate Governance Reportwhich forms part of this Report.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises of Mr. Arun KumarPurwar Chairman and Mr. Basudeo N. Singh Ms. Sangeeta Singh and Mr. Ranjal LaxmanaShenoy (inducted as Member w.e.f. 16th March 2020) as Members. Mr. AkhouriMaheshwar Prasad was a Member of this Committee upto 15th March 2020. Thebrief terms of reference of the Nomination and Remuneration Committee and the particularsof meetings held and attendance thereat are mentioned in the Corporate Governance Reportwhich forms part of this Report.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee comprises of Mr. RanjalLaxmana Shenoy Chairman and Mr. Dhananjay Kumar Singh Mr. Balmiki Prasad Singh Mr.Mritunjay Kumar Singh and Mr. Arun Kumar Purwar as Members. The brief terms of referenceof the Corporate Social Responsibility Committee and the particulars of meetings held andattendance thereat are mentioned in the Corporate Governance Report which forms part ofthis Report.
Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee comprises of Mr. RanjalLaxmana Shenoy Chairman and Mr. Dhananjay Kumar Singh and Mr. Mritunjay Kumar Singh asMembers. Mr. Akhouri Maheshwar Prasad was a Member of this Committee upto 15th March2020. The brief terms of reference of the Stakeholders' Relationship Committee and theparticulars of meetings held and attendance thereat are mentioned in the CorporateGovernance Report which forms part of this Report.
Risk Management Committee
The Risk Management Committee comprises of Mr. Dhananjay Kumar SinghChairman and Mr. Mritunjay Kumar Singh Mr. Sandeep Singh Ms. Sudha Ravi Dr. DheerajSharma and Mr. Narendra Kumar Aneja (inducted as Member w.e.f. 16th March2020) as Members. The brief terms of reference of the Risk Management Committee and theparticulars of meeting held and attendance thereat are mentioned in the CorporateGovernance Report which forms part of this Report.
The Company's Board of Directors has overall responsibility for theestablishment and oversight of the Company's risk management framework. The Company has aBoard approved Risk Management Policy. The Board of Directors has constituted a RiskManagement Committee which is delegated with the responsibility of overseeing variousstrategic operational and financial risks that the organization faces along withassessment of risks their management and mitigation procedures. A detailed analysis ofthe business risks and opportunities is given under Management Discussion and Analysis.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief your Directors confirm that:
(a) in the preparation of the annual accounts for the financial yearended 31st March 2020 the applicable accounting standards have been followedalong with proper explanation relating to material departures if any;
(b) they have selected such accounting policies and appliedconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and of the profit of the Company for the year ended on that date;
(c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual financial statements on a goingconcern basis;
(e) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively; and
(f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Directors state that applicable Secretarial Standards i.e. SS-1relating to 'Meetings of the Board of Directors' and SS-2 relating to 'General Meetings'have been duly followed by the Company.
AUDITORS AND AUDITORS' REPORT Statutory Auditor
Pursuant to the provisions of Section 139 of the Act and the Companies(Audit and Auditors) Rules 2014 (including any statutory modification(s) orre-enactment(s) thereof for the time being in force) M/s. B S R & Co. LLP (FirmRegistration No: 101248W/W-100022) Chartered Accountants the Statutory
Auditors of the Company were re-appointed by the Shareholders at theForty-Fifth AGM of the Company held on 27th August 2019 for another term of 5(five) years from the conclusion of Forty-Fifth AGM of the Company until the conclusion ofthe Fiftieth AGM on such remuneration inclusive of applicable taxes and reimbursement oftravelling and out of pocket expenses incurred in connection with the audit asrecommended by the Audit Committee and as may be mutually agreed between the Board ofDirectors of the Company and the Statutory Auditors from time to time. The Company hasreceived a certificate from the said Auditors that they are eligible to hold office as theAuditors of the Company for the current year and are not disqualified from being soappointed.
The Auditors' Report for financial year ended 31st March2020 does not contain any qualification reservation or adverse remark.
The Company is required to maintain cost records for certain productsas specified by the Central Government under subsection (1) of Section 148 of the Act andaccordingly such accounts and records are made and maintained in the prescribed manner.
Pursuant to the provisions of Section 148 of the Act and the Rules madethereunder read with notifications/ circulars issued by the Ministry of Corporate Affairsfrom time-to-time and as per the recommendation of the Audit Committee the Board ofDirectors at its meeting held on 30th May 2019 had appointed Mr. Suresh D.Shenoy Cost Accountant (Membership No. 8318) as the Cost Auditor of the Company for thefinancial year 2019- 20 to conduct the audit of the cost records of the Company. Aresolution for ratification of the remuneration payable to the Cost Auditor is included inthe Notice of AGM for seeking approval of Members. The Cost Audit Report will be filedwithin the period stipulated under the Act.
Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors had appointed M/s. Manish Ghia & Associates Practicing Company Secretaries(Membership No. F6252 COP No. 3531) to conduct the Secretarial Audit of the Company forthe financial year 2019-20. The Secretarial Audit Report is annexed to this Report asAnnexure F. The said Report does not contain any qualification reservation or adverseremark.
EXTRACT OF ANNUAL RETURN
As required under Section 92(3) of the Act and the Rules madethereunder extract of the Annual Return in Form MGT- 9 is annexed to this Report asAnnexure G. Further the Annual Return of the Company in prescribed Form MGT-7 isavailable on the website of the Company at https://www.alkemlabs.com/ annual-returns.php
RELATED PARTY TRANSACTIONS
All the Related Party Transactions entered into during financial year2019-20 by the Company were at arm's length basis in the ordinary course of business andin compliance with the
applicable provisions of the Act and the SEBI LODR Regulations and arein conformity with the Company's Policy on Related Party Transactions.
During the financial year 2019-20 the Company did not enter into anymaterial related party transactions i.e. transactions exceeding ten percent of theconsolidated turnover as per the last audited financial statements. Accordingly thedisclosure of related party transactions as required under Section 134(3) (h) of the Actin Form AOC-2 is not applicable. The Related Party Transactions Policy as approved by theBoard is uploaded on the Company's website at https://www.alkemlabs.com/pdf/policies/84051713915915Policy_on_Related_Party_ Transactions.pdf
PARTICULARS OF LOANS/GUARANTEES GIVEN AND INVESTMENTS MADE ANDSECURITIES PROVIDED
The particulars of loans guarantees investments and securitiesprovided covered under the provisions of Section 186 of the Act have been disclosed in thenotes to the financial statements forming part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) of the Act the Board ofDirectors of the Company has framed the Vigil Mechanism / Whistle Blower Policy forDirectors and Employees of the Company. Under the said policy provisions have been madeto safeguard persons who use this mechanism from victimization. The policy also providesaccess to the Chairperson of the Audit Committee under certain circumstances. The WhistleBlower Policy is uploaded on the website of the Company at https://www.alkemlabs.com/pdf/policies/961507913Whistle_Blower_ Policy.pdf
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted a policy in line with the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules made thereunder.
Internal Complaints Committees have been set up at the head office ofthe Company as well as at all the Company's plants and R&D Centers to redresscomplaints received on sexual harassment. During the financial year 2019-20 the Companyhad not received any complaints of sexual harassment.
DISCLOSURES UNDER THE ACT Change in Nature of Business if any:
During the financial year 2019-20 there was no change in the nature ofbusiness of the Company.
Material Changes and Commitments affecting the financial position ofthe Company:
There are no material changes and commitments which have occurredbetween the end of the financial year and the date of the Report which have affected thefinancial position of the Company.
Significant and Material Orders:
There are no significant and material orders passed by the regulatorsor courts or tribunals during the year impacting the going concern status and theCompany's operations in future.
Reporting of Frauds by Auditors:
During the year under review an employee of the Company was found tohave perpetrated misappropriation of the Company's funds aggregating to an amount of Rs116.5 Million. As at 31st March 2020 Company was able to recover an amount ofRs 83.8 Million and has also secured recovery of balance amount so misappropriated. Thedetails of the same have been explained in the notes to financial statements forming partof the Annual Report.
DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
The Company has designed and implemented a process driven framework forInternal Financial Controls (IFC) as mandated under the Act. The Company's policiesguidelines and procedures provide for adequate checks and balances and are meant to ensurethat all transactions are authorized recorded and reported correctly.
During the financial year under review Internal Auditors of theCompany with the external audit consultants have reviewed the effectiveness and efficiencyof these systems and procedures. As per the said assessment Board is of the view that IFCwere adequate and effective during the financial year.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act andthe Rules framed thereunder is annexed herewith as Annexure H to this Report.
Your Directors would like to express sincere gratitude to all valuablestakeholders of the Company viz. the Central and State Government DepartmentsOrganizations Agencies our customers shareholders dealers vendors banks medicalfraternity patients and other business associates for their excellent support andco-operation extended by them during the financial year under review.
The Board of Directors also places on record its appreciation for thesignificant contribution made by the employees of the Company through their dedicationhard work and unstinted commitment.
| ||For and on behalf of the Board |
| ||Alkem Laboratories Limited |
| ||Basudeo N. Singh |
|Place: Mumbai ||Executive Chairman |
|Date: 05th June 2020 ||DIN:00760310 |