BOARD’S REPORT Your Directors have pleasure in presenting their 6th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2016. 2. Transfer to Reserves: An amount of Rs.30,000 lacs from the net profit for the financial year under review is proposed to be carried to General Reserves. 3. Dividend: Your Directors recommend Dividend on Equity Shares at Rs.4.00 per share (i.e. 200%) of face value Rs.2/- per share for the financial year ended on 31st March, 2016 as against Rs.3.50 per share (i.e. 175%) for the year ended 31st March, 2015. 4. Management Discussion and Analysis Report: The Management Discussion and Analysis Report as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in this Annual Report. Certain statements in the said report may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook. 5. Operations and State of affairs of the Company: The Company’s Standalone revenues from operations were Rs.2,991.74 crore for the year ended 31st March, 2016 as compared to Rs.2,019.00 crore for the previous year. The Company has made Net Profit of Rs.698.14 crore on standalone basis for the year under review as compared to Rs.286.61 crore for the previous year. The Company has registered Consolidated revenues from operations of Rs.3,148.71 crore for the year under review as compared to Rs.2,056.12 crore for the previous year 6. Subsidiaries, Associates and Joint Ventures: As required under Rule 8(1) of the Companies (Accounts) Rules, 2014, the Board’s Report has been prepared on standalone financial statements and a report on performance and financial position of each of the subsidiaries and associates is included in the financial statements. In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial 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 the subsidiary companies have also been placed on the website of the Company, www.alembic-india.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company’s registered office. 7. Directors: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shaunak Amin, Director of the Company, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. The Board at its meeting held on 21st January, 2016, re-appointed Mr. Chirayu Amin, Mr. Pranav Amin and Mr. R. K. Baheti as Executive Directors for a period of five years, effective from 1st April, 2016, subject to approvals of the members at the Annual General Meeting. Subsequently, on 27th April, 2016, the Board re-designated Mr. Chirayu Amin as Executive Chairman and Chief Executive Officer and both Mr. Pranav Amin and Mr. Shaunak Amin as Managing Directors of the Company. 8. Key Managerial Personnel: Mr. Chirayu Amin, Executive Chairman & Chief Executive Officer (CEO), Mr. Pranav Amin, Managing Director, Mr. Shaunak Amin, Managing Director, Mr. R. K. Baheti, Director - Finance & CFO and Mr. Ajay Kumar Desai, Vice President - Finance & Company Secretary are Key Managerial Personnel of the Company. 9. Meetings of the Board: Four (4) Board Meetings were held during the financial year ended 31st March, 2016. The details of the Board Meetings with regard to their dates and attendance of each of the Directors 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 that they meet the criteria of independence as provided in of Section 149(6) of the Companies Act, 2013 11. Performance Evaluation: Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board and of the Committees of the 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/Members Evaluating Business Opportunity and analysis of Risk Reward Scenarios Key set Goals/KRA and achievements Professional Conduct and 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 as Chairman and Mr. Milin Mehta, Mr. Pranav Parikh and Dr. Archana Hingorani (w.e.f. 31st July, 2015) as members. The Committee interalia reviews the Internal Control System, Reports of Internal Auditors and Compliance of various regulations. The Committee also reviews at length the financial statements before they are placed before the Board. 13. Vigil Mechanism: Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Vigil Mechanism or ‘Whistle Blower Policy’ for directors, employees and other stakeholders to report genuine concerns has been established. The same is also uploaded on the website of the Company. 14. Internal Control Systems: The Company’s internal control procedures which includes internal financial controls, ensure compliance with various policies, practices and statutes and keeping in view the organisation’s pace of growth and increasing complexity of operations. The internal auditors team carries out extensive audits throughout the year across all locations and across all functional areas and submits its reports to the Audit Committee of the Board of Directors. 15. Corporate Social Responsibility: Corporate Social Responsibility (CSR) is not a new term for Alembic. Alembic Group has been proactively carrying out CSR activities since more than fifty years. Alembic Group has established, nurtured and promoted various Non Profit Organisations focusing on three major areas – Education, Healthcare and Rural Development. During the year, the Company along with other entities in the group, settled a Trust in the name of Alembic CSR Foundation and obtained requisite statutory approvals for enabling it to carry out CSR activities for the entire group. In compliance with requirements of Section 135 of the Companies Act, 2013, the Company has laid down a CSR Policy. The composition of the Committee, contents of CSR Policy and report on CSR activities carried out during the financial year ended 31st March, 2016 in the format prescribed under Rule 9 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure A. 16. Policy on Nomination and Remuneration: The contents of Nomination and Remuneration Policy of the Company prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the Corporate Governance Report. 17. Related Party Transactions: Related party transactions that were entered into during the financial year were on arm’s length basis and were in ordinary course of business. There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company. There are no material related party transactions which are not in ordinary course of business or which are not on arm’s length basis and hence there is no information to be provided as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014. The Board has approved a policy for related party transactions which has been uploaded on the Company’s website. The weblink as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under: http://www.alembic-india.com/upload/05APL-RPT%20policy.pdf 18. Corporate Governance: The Report on Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. The requisite certificate from M/s. Samdani Shah & Associates, Practising Company Secretaries confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Schedule V is attached to the Report on Corporate Governance. 19. Fixed Deposits: As on 31st March, 2016, there were unclaimed deposits amounting to Rs.7.13 lacs from 19 deposit holders which have been transferred to current liabilities. There has been no default in repayment of deposits or interest thereon. In F.Y. 2015-16, the Company has not accepted/renewed any deposits. 20. Listing of shares: The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 533573 and on the National Stock Exchange of India Limited (NSE) with scrip code of APLLTD. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2016-17 have been paid. 21. Loans, Guarantee or Investments: Details of Loans granted, Guarantees given and Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given as Annexure B. 22. Auditors: (a) Statutory Auditors: In compliance with the Companies (Audit and Auditors) Rules, 2014, M/s. K. S. Aiyar & Co., Chartered Accountants, have been appointed as Statutory Auditors of the Company till the conclusion of Annual General Meeting for the F. Y. 2018-19, as approved by the members at their 4th Annual General Meeting held on 28th July, 2014. Further, pursuant to the requirement of Section 139 of the Companies Act, 2013, the appointment of Statutory Auditors is to be ratified by the members at every Annual General Meeting. Members are requested to ratify their appointment for the F. Y. 2016-17. (b) Secretarial Auditors: The Board of Directors of the Company appointed M/s. Samdani Shah & Associates, Practising Company Secretaries, Vadodara, to conduct Secretarial Audit for the F.Y. 2016-17. The Secretarial Audit Report of M/s. Samdani Shah & Associates, Practising Company Secretaries for the financial year ended 31st March, 2016, is annexed as Annexure C. (c) Cost Auditors: Mr. H. R. Kapadia, Cost Accountant, Vadodara, Cost Auditor of the Company for F.Y. 2015-16 have been appointed as Cost Auditor for conducting audit of the cost accounts maintained by the Company relating to Bulk Drugs and Formulations for the F.Y. 2016-17. (d) Internal Auditors: The Board of Directors has appointed M/s. Sharp & Tannan Associates, Chartered Accountants as Internal Auditors of the Company for the F.Y. 2016-17. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their report or by the Secretarial Auditor in their Secretarial Audit Report and hence no explanation or comments of the Board is required in this matter. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. 23. Directors’ Responsibility Statement: In terms of the provisions of Companies Act, 2013, the Directors state that: (a) in preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) the directors have selected such accounting policies as listed in Note Y to the financial statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year as on 31st March, 2016 and of the profit of the Company for that period; (c) the directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively. (f) the directors have devised proper systems to ensure compliance with the provisions of 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 of the Company since the close of financial year i.e. since 31st March, 2016. Further, it is hereby 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 Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, is annexed herewith 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 with Rule 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 Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure F. In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits 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 aforesaid information. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. 28. Details of Unclaimed Suspense Account: Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith as Annexure G. The voting rights on the equity shares which are transferred to Unclaimed Suspense Account shall remain frozen till the rightful owner of such equity shares claims the shares. Alembic Pharmaceuticals Limited On behalf of the Board of Directors, Chirayu Amin Chairman & CEO Date : 27th April, 2016 Regd. Office: Alembic Road, Vadodara - 390 003 Tel: 0265 2280550 Fax: 0265 2282506 Web: www.alembic-india.com Email: apl.investors@alembic.co.in CIN: L24230GJ2010PLC061123 |