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Directors Report of Alembic Pharmaceuticals Ltd.

Mar 31, 2017

Dear Member’s

The Directors have pleasure in presenting their 7th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2017.

1. Operations and State of Affairs of the Company:

(Rs. In Crores)

Stand Alone basis

Particulars

Consolidated Basis

2017

2016

For the year ended 31st March

2017

2016

634.84

988.24

Profit for the year before Interest, Depreciation and Tax

616.26

1,012.20

Adjusting therefrom:

2.23

2.37

Interest (net)

4.20

3.68

82.90

71.86

Depreciation

82.97

72.21

119.08

215.28

Provision for taxation

122.19

216.12

(2.13)

(0.41)

Share of Loss of Associates, Joint Venture, Non-controlling Interest & Other Comprehensive Income

(5.87)

(0.56)

428.50

698.33

Total Comprehensive Income

401.03

719.63

-

-

Share of Reserves in Associates & Joint Venture

-

(8.26)

Adding thereto:

657.69

338.37

Balance brought forward from previous year

713.62

381.26

1,088.32

1,037.10

The amount available is

1,116.69

1,101.30

Appropriating there from:

75.41

65.98

Dividend paid on Equity Shares during the year

75.41

65.98

15.35

13.43

Corporate Dividend tax paid during the year

15.35

13.43

300.00

300.00

Transfer to General Reserve

300.00

300.00

697.56

657.69

Balance carried forward to Balance Sheet

726.02

713.62

The break-up of consolidated sales including export incentives is as under:

(Rs. In Crores)

Particulars

F.Y. 2016-17

F.Y. 2015-16

Formulations

India

1,254.47

1,175.96

International

1,236.29

1,461.50

API

India

57.66

50.52

International

582.51

474.42

Total

3,130.93

3,162.40

The Company has prepared the Standalone and Consolidated Financial Statements in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013. The Company has adopted the Indian Accounting Standards (Ind AS) from 1st April, 2016. The comparative financial information of the Company for the year ended 31st March, 2016 have also been restated to comply with Ind AS.

2. Transfer to Reserves:

An amount of Rs.300 Crores from the net profits 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 31st March, 2017 as against Rs.4.00 per share (i.e. 200%) for the financial year ended 31st March, 2016.

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. Subsidiaries, Associates and Joint Venture:

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.alembicpharmaceuticals.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.alembicpharmaceuticals. com. Shareholders interested in obtaining a physical copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company’s registered office.

6. Directors:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Pranav Amin, Managing Director of the Company, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

7. Key Managerial Personnel:

Mr. Chirayu Amin, Executive Chairman & 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.

8. Meetings of the Board:

Four (4) Board Meetings were held during the financial year ended 31st March, 2017. 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.

9. 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.

10.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/Member

- Evaluating Business Opportunity and analysis of Risk Reward Scenarios

- Key Set Goals and Achievements

- Professional Conduct and Integrity

- Sharing of Information with the Board

The Directors expressed their satisfaction with the evaluation process.

11.Audit Committee:

The Audit Committee consists of Independent Directors with Mr. Paresh Saraiya as Chairman, Mr. Pranav Parikh, Mr. Milin Mehta and Dr. Archana Hingorani as members. The Committee inter alia reviews the Internal Control System, Reports of Internal Auditors and Compliance of various regulations. The Committee also reviews the financial statements before they are placed before the Board.

12.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.

13.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 organization’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.

14.Corporate Social Responsibility:

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.

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, 2017 in the format prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure A.

15.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.

16.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 web-link as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under: http://www.alembicpharmaceuticals.com/wp-content/ uploads/2016/07/05APL-RPT-policy.pdf

17.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 & Kabra, 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.

18.Fixed Deposits:

As on 31st March, 2017, there were unclaimed deposits amounting to Rs.0.07 Crore from 18 deposit holders which have been transferred to current liabilities. There has been no default in repayment of deposits or interest thereon. In F.Y. 2016-17, the Company has not accepted/renewed any deposits.

19.Listing of shares:

The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 533573 and on 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 2017-18 have been paid.

20.Loans, Guarantees 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 is annexed herewith as Annexure B.

21.Auditors:

(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 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. 2017-18.

The Auditor’s Report for the financial year 2016-17 does not contain any qualification, reservation or adverse remark. The Auditor’s Report is enclosed with the financial statement in this Annual Report

(b) Secretarial Auditors:

The Board of Directors of the Company appointed M/s. Samdani Shah & Kabra, Practising Company Secretaries, Vadodara, to conduct Secretarial Audit for the F.Y. 2017-18.

The Secretarial Audit Report of M/s. Samdani Shah & Kabra, Practising Company Secretaries for the financial year ended 31st March, 2017, is annexed herewith as Annexure C.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

(c) Cost Auditors:

Mr. H. R. Kapadia, Cost Accountant, Vadodara, Cost Auditor of the Company has 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. 2017-18.

(d) Internal Auditors:

The Board of Directors appointed M/s. Ernst & Young LLP, Chartered Accountants as Internal Auditors of the Company for the F. Y. 2017-18.

22.Risk Management

The Company has voluntarily constituted Risk Management Committee and formulated Enterprise Risk Management Policy which functions as a guiding tool in fulfilling the management’s responsibility towards risk management. 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 Risk Management Committee, 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, 2017, 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 2 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, 2017 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, 2017. 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.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rules 5(2) and 5(3) of the aforesaid 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 the same will be furnished on request in writing to the members.

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.

On behalf of the Board of Directors,

Chirayu Amin

Chairman & CEO

3rd May, 2017

Alembic Pharmaceuticals Limited

Regd. Office: Alembic Road, Vadodara - 390 003

Tel: 0265-2280550 Fax: 0265-2282506

Web: www.alembicpharmaceuticals.com

Email Id: apl.investors@alembic.co.in

CIN: L24230GJ2010PLC061123


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 5th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2015.

l.Financial Summary and Highlights:

(Rs in lacs)

Stand Alone Basis Particulars Consolidated Basis 2015 2014 For the year ended 31st March 2015 2014

40,839 36,221 Profit for the year before Interest, Depreciation and Tax 40,526 36,091 Adjusting therefrom:

111 981 Interest (net) 178 981

4,441 4,049 Depreciation 4,441 4,049

7,625 7,363 Provision for taxation 7,635 7,510

- - Share of Profit of Associates 20 -

28,661 23,828 Net Profit 28,292 23,551

- - Share of Reserves in Joint Venture 1,496 -

- - Share of Loss in Associate (128) - Adding thereto:

14,805 7,594 Balance brought forward from previous year 17,986 11,241

43,466 31,422 The amount available is 47,646 34,792 Appropriating there from:

6,598 5,655 Provision for Dividend - Equity Shares 6,598 5,845

1,343 961 Provision for Corporate Dividend tax 1,343 961

10,000 10,000 Transfer to General Reserve 10,000 10,000

25,525 14,805 Balance carried forward to Balance Sheet 29,705 17,986

2. Transfer to Reserves:

An amount of H10,000 lacs from the net profits for the financial year under review is proposed to be carried to General Reserves.

3. Dividend:

Your Directors recommend Dividend on Equity Shares at H3.50 per share (i.e. 175%) of face 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 of the Listing Agreement is included in this 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 H2,019 crore for the year ended 31st March, 2015 as compared to H1,843.79 crore for the previous year.

The Company has made Net Profit of H286.61 crore on standalone basis for the year under review as compared to H238.28 crore for the previous year.

The Company has registered consolidated revenues from operations of H2,056.12 crore for the year under review as compared to H1,863.22 crore for the previous year.

The break-up of consolidated sales excluding export incentives and other miscellaneous revenues is as under:

(Rs in lacs)

Particulars F.Y. F.Y. 2014-15 2013-14

Branded Domestic 98,084 85,064

Generic & NSA Domestic 12,274 12,071

Formulations

Branded Export 6,349 7,360

International Generics 51,845 46,837

API Domestic 6,412 5,491

Exports 30,238 28,394

Others 1,571 1,624

Total 2,06,773 1,86,841

The Company has made a consolidated profit after tax of H 282.92 crore for the year under 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 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 included in the consolidated financial statements 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. R. K. Baheti, Director of the Company, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

During the year under review, the Board has appointed Dr. Archana Hingorani as Additional Director (Independent) w.e.f. 4th February, 2015. She holds office up to the ensuing Annual General Meeting of the Company. The Company has received a notice together with requisite deposit of H1 Lac under Section 160 of the Companies Act, 2013, from a member of the Company proposing her candidature for the office of an Independent Director, for a term of 5 consecutive years upto 3rd February, 2015.

The Board has appointed Mr. Pranav Amin, Director & President - International Business and Mr. Shaunak Amin, Director & President - Branded Formulations Business as Joint 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 Amin, Director & President - Branded Formulations Business, Mr. R. K. Baheti, Director - Finance & CFO and Mr. Ajay Kumar Desai, Vice President - Finance & Company Secretary 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 of Company Secretary. He has been designated as Director-Finance & CFO of the Company w.e.f. 28th July, 2014.

Mr. Ajay Kumar Desai has been designated as Vice-President Finance & Company Secretary 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. 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 sub-section (6) of Section 149 of the Companies Act, 2013.

11. Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreements, 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/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 as Chairman and Mr. Milin Mehta and Mr. Pranav Parikh as members. The Committee interalia reviews the Internal Control System and 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 Listing Agreements, 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 in keeping with the organization''s pace of growth and increasing complexity of operations. The internal auditor 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.

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, 2015 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 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 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 web- link as required 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 Listing Agreement 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 Clause 49, is attached to the Report on corporate governance.

19. Fixed Deposits:

Pursuant to provisions of Section 74 of the Companies Act, 2013, during the year 2014-15, the Company has repaid the deposits accepted prior to 1st April, 2014. As on 31st March, 2015, there were unclaimed deposits amounting to H9.43 lacs from 25 deposit holders which have been transferred to current liabilities. There has been no default in repayment of deposits or interest thereon. In F.Y. 2014-15, 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 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 2015-16 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, has 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. 2015-16.

(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. 2015-16.

The Secretarial Audit Report of M/s. Samdani Shah & Associates, Practising Company Secretaries 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 cost accounts 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, Chartered Accountants as Internal Auditors of the Company for the F. Y. 2015-16.

There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their report or by the Secretarial Auditors 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, 2015, 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, 2015 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, 2015. 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, forms 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 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 Act 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 Act 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.

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

Tel: 0265-2280550

Fax: 0265-2282506

Web: www.alembic-india.com

Email: apl.investors@alembic.co.in

CIN: L24230GJ2010PLC061123


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting their 3rd Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2013.

1. Financial Results:

Rs. in lacs

Stand Alone Basis Particulars Consolidated Basis

2013 2012 For the year ended 31st March 2013 2012

24,769 21,001 Profit for the year before Interest, depreciation and Tax 25,590 22,085

Adjusting therefrom:

1,457 2,621 Interest (net) 1,457 2,621

3,496 3,365 Depreciation 3,497 3,365

96 (38) Provision for deferred tax liabilities or (assets) 96 (38)

3,975 3,000 Provision for current tax and wealth tax 4,014 3,123

15,745 12,054 Net Profit 16,525 13,013

Adding thereto:

5,363 2,168 Balance brought forward from previous year 8,230 4,076

21,108 14,222 The amount available is 24,755 17,089 Appropriating there from:

- 792 Debenture Redemption Reserve - 792

4,713 2,639 Provision for Dividend - Equity Shares 4,713 2,639

801 428 Provision for Corporate Dividend tax 801 428

8,000 5,000 Transfer to General Reserve 8,000 5,000

7,594 5,363 Balance carried forward to Balance Sheet 11,241 8,230

2. Dividend:

Your Directors have recommended Dividend on Equity Shares at H 2.50 per share (i.e. 125 %) of face value of H 2/- per share for the year ended on 31st March, 2013 as against H 1.40 per share (i.e. 70 %) for the year ended 31st March, 2012.

3. Management''s Discussion and Analysis:

The Report on Management Discussion and Analysis as required under the Listing Agreements with the Stock Exchanges given elsewhere in the report. Certain statements in this section 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.

4. Operations:

The Company''s Standalone revenues from operations were H 1,492.62 Crores for the year ended 31st March, 2013 as compared to H 1,374.30 Crores for the previous year

The standalone profit before Interest, Depreciation, Non- recurring Income and expenses and Taxes was H 243.76 Crores for the year under review as compared to H 208.59 Crores for the previous year.

During the year the interest and financing cost was H 14.57 Crores as compared to H 26.21 Crores in previous year

The Company has registered consolidated revenues from operations of H 1,520.34 Crores for the year under review as compared to H 1,465.41 Crores for the previous year

The break-up of consolidated sales excluding export incentives and other misc. revenues is as under:

Rs.in lacs

Particulars F.Y F.Y. 2012-13 2011-12

Domestic Formulation 886.27 782.61

Export Formulation 279.89 298.50

Domestic API 113.82 94.24

Export API 236.74 279.22

Total 1,516.72 1,454.57

The consolidated Profit, before providing for Interest, Depreciation, Non-recurring Income, expenses and Taxes, was H 251.96 Crores for the year under review as compared to H 219.43 Crores for the previous year. The Company has made a consolidated profit after tax of H 165.25 Crores for the year under review as compared to H 130.13 Crores for the previous year.

5. Listing of shares:

The Equity shares of the Company are listed on The Bombay Stock Exchange Limited (BSE) with scrip code No. 533573 and on National Stock Exchange of India Limited (NSE) with scrip code of APLLTD.

6. Fixed Deposits:

The Fixed Deposits including those from shareholders as on 31st March, 2013 was H3,571 Lacs. There were unclaimed deposits amounting to H48.03 Lacs from 128 deposits holders which have been transferred to current liabilities. Out of this, no deposits have since been repaid or renewed at the option of depositors and no instructions have been received so far and if not claimed in future, it shall be deposited in the Investor Education and Protection Fund in due course, as per the provisions of the Companies Act, 1956.

7. Directors:

The Board of Directors at its meeting held on 2nd May 2013 has appointed Mr. Shaunak Amin as Additional Director and Director & President - Branded Formulations Business. Mr. Shaunak Amin holds Directorship upto the date of ensuing Annual General Meeting. The Company has received a Notice under Section 257 of the Companies Act, 1956, together with deposit of H 500 /- from a member; proposing his candidature as director; liable to retire by rotation.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company Mr Paresh Saraiya and Mr Milin Mehta, Directors of the Company will retire by rotation at the ensuing Annual General Meeting who are eligible for re-appointment.

Brief resumes of Mr Shaunak Amin, Mr Paresh Saraiya and Mr Milin Mehta are given in the Corporate Governance Report.

8. Energy, Technology and Foreign Exchange:

In accordance with the provisions of Section 2l7(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, l988, the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure - A to this report.

9. Particulars of Employees:

The information required under section 217(2A) of the Companies Act, 1956, read with Companies (Particular of Employees) Rules, l975, forms part of this report as Annexure-B. However, as permitted by section 219(1 )(b)(iv) of the Companies Act, l956, this Annual Report is being sent to all shareholders excluding this Annexure. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company

10. Corporate Governance:

Your Company has complied with all the provisions of Corporate Governance as prescribed under the amended Listing Agreements of the Stock Exchanges, with which the Company''s shares are listed.

A separate report on Corporate Governance is produced as a part of the Annual Report, along with the Auditor''s Certificate on the compliance.

As required vide clause 49 of the listing agreement on Corporate Governance, the board has laid down a code of conduct for all members and senior management team of the Company. The said code of conduct has been posted on the website of the Company - www.alembic-india.com. All Board members and senior management personnel of the company have affirmed the requirements of the said code of conduct.

11. Audit Committee:

The Audit Committee consists of Mr. Paresh Saraiya, Mr. Milin Mehta and Mr. Pranav Parikh. Mr. Paresh Saraiya is Chairman of the Audit Committee. All the Directors in Audit Committee are Non-Executive Independent Directors. The Committee reviewed the Internal Control System, Scope of Internal Audit and compliance of various regulations. The Committee reviewed at length the Annual Financial Statements and approved the same before they were placed before the Board of Directors.

12. Auditors:

M/s. K. S. Aiyar & Co., Chartered Accountants, Statutory Auditors, will retire at the conclusion of the ensuing Annual General meeting and are eligible for re-appointment as Auditors. Members are requested to re-appoint them and authorise the Board of Directors to fix their remuneration.

The Company has appointed M/s. Sharp & Tannan, Chartered Accountants as its Internal Auditors to carry out the Internal Audit of various operational areas of the Company

13. Cost Auditors:

As per the order No. 52/26/CAB/2010 dated 2nd May 2011 of the Ministry of Corporate Affairs, the Company is required to get Audited, the Cost Accounts maintained by the Company relating to Bulk Drugs and Formulations for the year ended on 31st March, 2013 by Auditors with qualification prescribed in Section 233B(1) of the Companies Act, 1956. Accordingly the Board had appointed Mr H. R. Kapadia as Cost Auditor for the year ended on 31st March, 2013.

14. Human Resource Management:

Human capital has always been the most important and valuable asset to your Company. Your Company has enhanced its performance management process that motivates people to take ownership of their own performance and encourages innovation and meritocracy. Your Company has created people practices which enables it to attract and retain potential talents. Employee relations in your Company continues to be cordial and harmonious.

15. Directors'' Responsibility Statement:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

On behalf of the Board of Directors,

Chirayu R.Amin

Chairman & Managing Director

2nd May 2013


Mar 31, 2012

The Directors have pleasure in presenting their 2nd Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2012.

Financial Results : (Rs in Lacs)

Stand Alone Particulars Consolidated Basis Basis 2012 2011 2012 2011

21,001 15,581 Profit for the year before Interest, Depreciation and Tax 22,085 16,033

Adjusting therefrom:

2,621 2,389 Interest (net) 2,621 2,389

3,365 2,959 Depreciation 3,365 2,959

(38) 282 Provision for deferred tax liabilities or (assets) (38) 282

3.000 1,801 Provision for current tax and wealth tax 3,123 1,864

12,054 8,150 Net Profit 13,013 8,539

Adding thereto:

- - Balance brought forward as per Scheme of Arrangement - 1,519

2,168 - Balance brought forward from previous year 4,076 -

14,222 8,150 Amount available 17,089 10,058

Appropriating there from:

792 792 Debenture Redemption Reserve 792 792

2,639 1,885 Provision for Dividend - Equity Shares 2,639 1,885

428 305 Provision for Corporate Dividend tax 428 305

5.000 3,000 Transfer to General Reserve 5,000 3,000

5,363 2,168 Balance carried forward to Balance Sheet 8,230 4,076

(2) Dividend :

Your Directors recommend Dividend on Equity Shares at Rs 1.40/- per share (i.e. 70 per cent) of face value of Rs 2/- per share for the year ended on 31st March, 2012 as against Rs 1 per share (i.e. 50 per cent) for the year ended 31st March, 2011.

(3) Management's Discussion and Analysis :

The Report on Management Discussion and Analysis as required under the Listing Agreements with the Stock Exchanges is enclosed as Annexure - A to this report. Certain statements in this section 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.

(4) Operations :

The Company's Standalone revenue from operations were Rs 1,375.28 Crores for the year ended 31st March, 2012 as compared to Rs 1,164.93 Crores for the previous year.

The standalone Profit before Interest, Depreciation and Taxes was Rs 210.01 Crores for the year under review as compared to Rs 155.81 Crores for the previous year.

During the year, the interest and financing cost was Rs 26.21 Crores as compared to Rs 23.89 Crores in previous year.

The Company has registered a consolidated revenue from operations of Rs 1,466.39 Crores for the year under review as compared to Rs 1,202.05 Crores for the previous year.

The break-up of consolidated sales is as under:

(Rs in Crores) FY FY Particulars 2011-12 2010-11

Domestic Formulation 782.61 693.44

Export Formulation 298.50 223.92

Domestic API 94.24 94.51

Export API 279.22 179.9

Total 1,454.57 1,191.77

The Consolidated Profit, before providing for Interest, Depreciation and Taxes, was Rs 220.85 Crores for the year under review as compared to Rs 160.32 Crores for the previous year. The Company has made a consolidated profit for the year of Rs 130.13 Crores for the year under review as compared to Rs 85.39 Crores for the previous year.

(5) Listing of shares :

The Equity shares of the Company got listed on The Bombay Stock Exchange Limited (BSE) with scrip code No. 533573 and on National Stock Exchange of India Limited (NSE) with scrip code APLLTD and trading commenced w.e.f. 20th September, 2011. The Company is regular in paying listing fees to both the Stock Exchanges.

(6) Fixed Deposits :

The Fixed Deposits including those from shareholders as on 31st March, 2012 was Rs 47.03 Crores. Unclaimed Deposits of Rs 36.05 lacs from 123 deposits holders have been transferred to current liabilities. Out of this, no deposits have since been repaid or renewed at the option of depositors and no instruction have been received so far and if not claimed in future, it shall be deposited in the Investor' Education and Protection Fund in due course, as per the provisions of the Companies Act, 1956.

(7) Directors :

In accordance with the provisions of the Companies Act, 1956 and Company's Articles of Association, Mr. R. K. Baheti and Mr. K. G. Ramanathan, Directors of the Company will retire by rotation at the ensuing Annual General Meeting who are eligible for re-appointment.

The brief resumes of Mr. R. K. Baheti and Mr. K. G. Ramanathan are given in the Corporate Governance Report.

(8) Energy, Technology and Foreign Exchange :

In accordance with the provisions of Section 217(I)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure - B to this report.

(9) Particulars of Employees :

The information required under section 217(2A) of the Companies Act, I956, read with Companies (Particulars of Employees) Rules, 1975, forms part of this report as Annexure-C.

(10) Corporate Governance :

Your Company has complied with all the provisions of Corporate Governance as prescribed under the Listing Agreements of the Stock Exchanges, with which the Company's shares are listed.

A separate report on Corporate Governance is produced as a part of the Annual Report, along with the Auditor's Certificate on the compliance.

As required vide clause 49 of the listing agreement on Corporate Governance, the board has laid down a code of conduct for all Board members and senior management team of the Company. The said code of conduct has been posted on the website of the Company - www.alembic-india.com. All Board members and senior management personnel of the company have affirmed the requirements of the said code of conduct.

(11) Audit Committee :

The Audit Committee consists of Mr. Paresh Saraiya, Mr. Milin Mehta and Mr. Pranav Parikh. Mr. Paresh Saraiya is Chairman of the Audit Committee. All the Directors in Audit Committee are Non-Executive Independent Directors. The Committee reviewed the Internal Control System, Scope of Internal Audit and compliance of various regulations. The Committee reviewed at length the Annual Financial Statements and approved the same before they were placed before the Board of Directors.

(12) Auditors :

M/s. K. S. Aiyar & Co., Chartered Accountants, Statutory Auditors, (Firm Regn. No. 100186W) will retire at the conclusion of the ensuing Annual General meeting and are eligible for re-appointment as Auditors. Members are requested to re-appoint them and fix their remuneration.

The Company has appointed M/s. Sharp & Tannan, Chartered Accountants as its Internal Auditors to carry out the Internal Audit of various operational areas of the Company.

(13) Cost Auditors :

As per the order No. 52/26/CAB/2010 dated 2nd May, 2011 of the Ministry of Corporate Affairs, the Company is required to get audited, the Cost Accounts maintained by the Company relating to Bulk Drugs and Formulations for the year ended on 31st March, 2012 by Auditors with qualification prescribed in Section 233B(I) of the Companies Act, I956. Accordingly, the Board has appointed Mr. H. R. Kapadia as Cost Auditor for the year ended on 31st March, 2012.

(14) Human Resource Management :

Human capital has always been the most important and valuable asset to your Company. Your Company has enhanced its performance management process that motivates people to take ownership of their own performance and encourages innovation and meritocracy. Your Company has created people practices which enables it to attract and retain potential talents. Employee relations in your Company continues to be cordial and harmonious.

(15) Directors' Responsibility Statement :

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

On behalf of the Board of Directors,

Chirayu R. Amin

Chairman & Managing Director

Vadodara, 25th April, 2012

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