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Directors Report of Alkem Laboratories Ltd.

Mar 31, 2016

Dear Members,

Alkem Laboratories Limited

The Directors are pleased to present their 42nd Annual Report on the business and operations together with the audited financial statements of the Company for the year ended 31st March, 2016. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.

FINANCIAL PERFORMANCE

(Rs. in Million)

Year ended Year ended Year ended Year ended Particulars 31st March, 2016 31st March, 2015 31st March, 2016 31st March, 2015

Income from Operations 39,246.9 31,375.6 49,915.4 37,433.5

Other Income 1,605.2 1,821.3 1,645.1 1,810.4

Total Revenue 40,852.1 33,196.9 51,560.5 39,243.9

Profit before Interest, Depreciation and Tax 8,727.9 5,276.4 10,127.4 6,028.7

Less: Interest 533.0 726.3 670.6 811.1

Less: Depreciation 735.3 596.8 1,005.8 709.4

Profit before tax 7459.6 3,953.3 8,451.0 4508.2

Less: Provision for Taxation (net) 1,075.2 276.4 1,606.0 592.3

Profit after tax and before minority interest 6,384.4 3,676.9 6,845.0 3,915.9

Less: Minority Interest - - 113.8 -

Profit for the year 6,384.4 3,676.9 6,731.2 3,915.9

Balance brought forward from previous year 11,385.4 8,275.3 10,207.5 6,858.4

Profit available for appropriations 17,769.8 11,952.2 16,938.7 10,774.3

Appropriations

Dividend on Equity Shares 1,518.5 478.3 1,518.5 478.3

Dividend Distribution Tax 309.1 88.5 311.1 88.5

Transfer to General Reserve - - 170.0 -

Balance carried to the Balance Sheet 15,942.2 11,385.4 14,939.1 10,207.5

OVERVIEW OF FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2016, the Company''s total revenue including other income was Rs. 40,852.1 million on standalone basis as against Rs. 33,196.9 million achieved in the previous year, registering a growth of 23.1%.

The export turnover of the Company during the financial year 2015-16 was Rs. 6472.3 million as against Rs. 3448.2 million achieved in the previous year registering a growth of 87.7%.

During the financial year ended 31st March, 2016, the Company achieved total revenue including other income of Rs. 51,560.5 million on consolidated basis, as against a turnover of Rs. 39,243.9 million achieved in the previous year, registering a growth of 31.4%.

During the financial year ended 31st March, 2016, Standalone Profit before interest, depreciation and tax increased by 65.4 % at Rs. 8,727.9 million as against Rs. 5,276.4 million in the previous year, whereas Consolidated Profit before interest, depreciation and tax increased by 68.0 % at Rs. 10,127.4 million as against Rs. 6,028.7 million in the previous year.

Standalone Profit before tax was Rs. 7,459.6 million, higher by 88.7 % over the previous year and Consolidated Profit before tax was Rs. 8,451.0 million, higher by 87.5 % over the previous year.

After providing for taxes, standalone net profit was Rs. 6,384.4 million, higher by 73.6 % over the previous year and after providing for taxes and minority interest, consolidated net profit was Rs. 6,731.2 million, higher by 71.9 % over the previous year.

INITIAL PUBLIC OFFERING

The Directors are pleased to inform that the Company''s Initial Public Offering of 12,853,442 Equity Shares of face value Rs. 2/- each through Offer for Sale received an overwhelming response from the investors. The Issue opened for subscription on 8th December, 2015 and closed on 10th December, 2015. The Company allotted 12,853,442 equity shares by the way of an offer for sale. The Qualified Institutional Bidder portion (excluding Anchor Investor Portion) was subscribed to the extent of 57.19 times, while the Non-Institutional and Retail portion were subscribed to the extent of 129.96 times and 3.17 times respectively. The Employee portion was subscribed to the extent of 0.67 time. The issue constituted 10.75% of the post-issue capital of the Company and the same was overall subscribed to the extent of 44.29 times. The Equity Shares of the Company are listed on BSE Limited and the National Stock Exchange of India Limited.

UTILISATION OF IPO PROCEEDS

As the Company''s IPO was through an offer for sale, the Company did not receive any proceeds from the offer and the proceeds were paid to the shareholders who offered their shares for sale.

DIVIDEND

During the financial year 2015-16, your Company declared and paid an Interim dividend at Rs. 3/- per Equity Share being 150% of paid up share capital on 28th September, 2015 and a Second Interim dividend at Rs. 9.7/- per Equity Share being 485% of paid up share capital on 9th March, 2016. In view of the payment of interim dividends during the year, the Directors have not recommended any further dividend for the financial year ended 31st March, 2016.

TRANSFER TO RESERVES

The Company has not transferred any amount to the general reserve. An amount of Rs. 15,942.2 million is proposed to be retained in the Statement of Profit and Loss.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2016 was Rs. 239.1 million. The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares to the employees or Directors of the Company under any Scheme (including sweat equity shares).

DEPOSITS

The Company has not accepted any deposits from the public/members under Section 73 of the Companies Act, 2013 (hereinafter referred to as the Act) read with Companies (Acceptance of Deposits) Rules, 2014 during the year. There are no deposits which are outstanding as on 31st March, 2016. The Company has no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

SUBSIDIARIES

As on 31st March, 2016, the Company had 18 subsidiaries. The Company does not have any joint venture / associate company (ies) within the meaning of Section 2(6) of the Act.

Details of companies which have become or ceased as subsidiary, associates and joint ventures, during the year under review, are as under:

Name Details of Change Date of Change

Alkem Real Ceased to be a subsidiary 11th September, Estate LLP due to liquidation 2015 (Strike off)

Pursuant to the first proviso to Section 129(3) of the Act and Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, the salient features of financial statements, performance and financial position of each subsidiary is given in Form AOC-1 as Annexure A to this Report. The Audited Financial Statements of the subsidiaries are available on the Company''s website atwww.alkemlabs.com and are available for inspection by the Members at the Registered Office of the Company during business hours on all working days as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided as a separate section forming part of this Report.

CORPORATE GOVERNANCE

A detailed report on the corporate governance systems and practices of the Company is provided as a separate section alongwith a certificate from the Statutory Auditors confirming the compliance by the Company with the conditions of Corporate Governance, forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company continues to believe in operating and growing its business in a socially responsible way. This belief forms the core of the CSR policy of the Company that drives it to focus on holistic development of its host community and immediate social and environmental surroundings qualitatively. The Company''s CSR Policy framework puts emphasis on social outreach programs in the areas of Education, Vocational Training, Health, Environment and Rural Development.

Details about the Company''s CSR Policy and initiatives undertaken by the Company during financial year 2015-16 are outlined in the Report on CSR Activities annexed to this Report as Annexure B.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments

As per the provisions of Section 149 and Section 152 of the Act, the shareholders at the Annual General Meeting (AGM) held on 13th July, 2015, appointed Mr. Arun Kumar Purwar (DIN 00026383), Ms. Sangeeta Singh (DIN 06920906) and Ms. Sudha Ravi (DIN 06764496) as Independent Directors of the Company. The terms and conditions of the appointment of the Independent Directors are posted on Company''s website.

Resignations/Retirements

Mr. Ennapadam N. Shankar (DIN 02118438) resigned from the Board with effect from 15th June, 2015. The Board places on record its appreciation for his valuable contribution during his tenure with the Company.

Directors liable to Retirement by Rotation

Mr. Dhananjay Kumar Singh (DIN 00739153) is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible he has offered himself for reappointment. Appropriate resolution for his re-appointment is included in the Notice of AGM for seeking approval of Members. The Directors recommend his re-appointment for your approval.

A brief resume and particulars relating to him is given separately as an annexure to the AGM Notice.

Key Managerial Personnel

Mr. Prabhat Agrawal, Chief Executive Officer, Mr. Rajesh Dubey, Chief Financial Officer and Mr. Manish Narang, Senior Vice President Legal, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company in accordance with the provisions of Sections 2(51) and 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no change in the Key Managerial Personnel during the financial year 2015-16.

Independent Directors

The Independent Directors hold office for a fixed term of 5 (Five) years and are not liable to retire by rotation.

In accordance with the Section 149(7)of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of Independence as mentioned under Section 149(6) of the Act and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI LODR Regulations").

Familiarization Program

In compliance with the requirements of SEBI LODR Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their roles, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also available on the Company website at http://wwwalkemlabs. com/admin/Photos/Policies/973052158Directors%20 Familiarisation%20Programme.pdf

Annual Evaluation of Board''s Performance

Pursuant to the provisions of the Act and the SEBI LODR Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The criteria applied in the evaluation process is explained in the Corporate Governance Report.

The Independent Directors at a separate meeting, evaluated performance of non-independent directors, performance of the Board as a whole and performance of the Chairpersons of the Company.

Remuneration Policy

The Company follows a policy for selection and appointment of Directors, Senior Management and their remuneration. The said policy is annexed to this Report as Annexure C.

PARTICULARS OF EMPLOYEES

The disclosure 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 to this Report as Annexure D.

Further a statement showing the names and other particulars of employees drawing remuneration in excess of the limits specified in Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and annual financial statements are being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection for the Members at the Registered Office of the Company during the business hours on working days and shall be provided to any Member on a written request to the Company Secretary.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 5 (Five) times during the financial year 2015-16. The details of the Board meetings and the attendance of Directors thereat are provided in the Corporate Governance Report forming part of the Annual Report.

In terms of requirements of Schedule IV of the Act, a separate meeting of Independent Directors was also held on 9th March, 2016 to review the performance of Non-independent Directors (including the Chairpersons), the entire Board and quality, quantity and timelines of the flow of information between the Management and the Board.

COMMITTEES OF THE BOARD Audit Committee

The Audit Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Mritunjay Kumar Singh, Ms. Sudha Ravi and Ms. Sangeeta Singh as Members. The terms of reference of the Audit Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of Mr. Arun Kumar Purwar, Chairman and Mr. Basudeo N. Singh, Mr. Akhouri Maheshwar Prasad and Ms. Sangeeta Singh as Members. The terms of reference of the Nomination and Remuneration Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Dhananjay Kumar Singh, Mr. Sandeep Singh and Mr. Balmiki Prasad Singh as Members.

Stakeholders'' Relationship Committee

The Stakeholders'' Relationship Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Dhananjay Kumar Singh, Mr. Sandeep Singh and Mr. Mangaldas Chhaganlal Shah as Members. The terms of reference of the Stakeholders'' Relationship Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

DIRECTORS''RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, the Directors, pursuant to the requirement of Section 134(3) (c) of the Act, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 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 of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual financial statements on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s BSR & Co. LLP (Firm Registration No: 101248W/W-100022), Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of the Forty Fifth (45th) Annual General Meeting. However, their appointment as Statutory Auditors of the Company is subject to ratification by the Members at every Annual General Meeting. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified from being so appointed.

A resolution for ratification of appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of Members.

Auditors Report

The Auditors Report for financial year ended 31st March, 2016, does not contain any qualification, reservation or adverse remark.

Cost Auditor

Pursuant to the provisions of Section 148 of the Act and the Rules made thereunder read with notifications / circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at its meeting dated 28th September, 2015, appointed Mr. Suresh D Shenoy, Cost Accountant (Membership No. 8318), as the Cost Auditor of the Company for financial year 2015-16 to conduct the audit of the cost records of the Company. The Company had also received certificate from the Cost Auditor certifying his independence and arm''s length relationship with the Company. A resolution for ratification of the remuneration payable to the Cost Auditor is included in the Notice of Annual General Meeting for seeking approval of Members. The Cost Audit Report will be filed within the period stipulated under the Act.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014,theBoardof Directors had appointed M/s. Manish Ghia & Associates, Practicing Company Secretaries, (Membership No. F6253, COP No. 3531) to conduct the Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report is annexed to this Report as Annexure E. The said Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

As required under Section 92(3) of the Act and the Rules made thereunder, extract of the Annual Return in Form MGT-9 is annexed to this Report as Annexure F.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions are entered into by the Company, at arm''s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Act and the SEBILODR Regulations and the Company''s Policy on Related Party Transactions. During the financial year 2015-16, the Company did not enter into any material related party transactions, i.e. transactions exceeding ten percent of the consolidated turnover as per the last audited financial statements. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is not applicable.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company''s website at http://www.alkemlabs.com/admin/PhotosPolicies/15915 Policy%20on%20Related%20Party%20Transactions.pdf

PARTICULARS OF LOANS/GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Act have been disclosed in the Notes 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 of Directors of the Company has framed the Vigil Mechanism / Whistle Blower Policy for Directors and employees of the Company. Under the said policy, provisions have been made to safeguard persons who use this mechanism from victimization. The policy also provides access to the Chairperson of the Audit Committee under certain circumstances. The Whistle Blower Policy is uploaded on the website of the Company at http://www.alkemlabs.com/admin/ Photos/Policies/3592Whistle%20Blower%20Policypdf.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. An Internal Complaints Committee has also been set up to redress complaints received on sexual harassment. During the financial year 2015-16, the Company had received one complaint with allegations of sexual harassment and the same was investigated and resolved.

BUSINESS RISKS AND OPPORTUNITIES

In line with the new regulatory requirements, the Company has formally framed Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure. A Risk Management Committee under the Chairmanship of Mr. Dhananjay Kumar Singh, Joint Managing Director, has also been constituted to oversee the risk management process in the Company.

DISCLOSURES UNDER THE ACT Change in Nature of Business, if Any

During the financial year 2015-16, there was no change in the nature of business of the Company.

Material Changes and Commitments affecting the financial position of the Company

There are no material changes and commitments which have occurred between the end of the financial year and the date of the Report which have affected the financial position of the Company.

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status and company''s operations in future.

Reporting of Frauds by Auditors

There were no frauds reported by auditors as per Section 134 (3)(ca) and Section 143(12) of the Act.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

During the year the internal financial controls were reviewed and tested by an outside consulting firm and no reportable material weaknesses in design or operations were observed.

CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE DETAILS

The information on conservation of energy, technology absorption and foreign earnings and outgo as stipulated under Section 134(3)(m) of the Act and the Rules framed thereunder is annexed herewith as Annexure G to this report.

ACKNOWLEDGEMENT

Your Directors are thankful to the Central and State Government Departments, Organizations and Agencies for their continued guidance and co-operation. The Directors are grateful to all valuable stakeholders of the Company viz. our customers, shareholders, dealers, vendors, banks, medical fraternity, patients and other business associates for their excellent support and help rendered during the year. The Directors also place on record their sincere appreciation for the significant contribution made by our employees through their dedication, hard work and unstinted commitment.

For and on behalf of the Board

Alkem Laboratories Limited

Samprada Singh

Chairman Emeritus

DIN:00760279

Date: 27th May, 2016

Place: Mumbai


Mar 31, 2015

Dear Members,

We are pleased to present you the Director''s Report highlighting the business and operations of the Company for the year ended 31st March, 2015.

FINANCIAL PERFORMANCE:

The financial performance of your Company for the year ended 31st March, 2015 is summarized below:

(Rupees in million)

Particulars 2015 2015 2014 2014 Standalone Consolidation Standalone Consolidation

Income from Operations 31,375.6 37,433.4 26,776 31,307.6

Other Income 1,821.3 1,810.4 1,694.7 1,690.2

Profit before Interest, 5,276.4 6,028.7 5,821.3 5,934.9

Depreciation and Tax

Depreciation 596J5 707.7 427.3 518.9

Provision for Taxation (net) 276.3 592.3 110.1 95.0

Profit after tax 3,677.0 3,917.6 4,441.1 4,390.2

Profit available for 11,952.3 10,776.0 11,055.0 9,638.1 appropriations

APPROPRIATIONS Dividend (including Tax on Dividend) 566.7 566.7 279.8 279.8

Transfer to General - - 2,500.0 2,500.0 Reserve Balance carried to the 11,385.5 10,209.3 8,275.3 6,858.4 Balance Sheet

OPERATIONAL PERFORMANCE:

During the financial year ended March 31, 2015, on standalone basis, your Company achieved a turnover of Rs. 31375.6 million as against a turnover of Rs. 26776.9 million in the previous year, registering a growth of 17.17%.

The export turnover of your Company during the year 2015 was Rs. 34481.69 Lakhs as against Rs. 27838.00 lakhs achieved in the previous year.

During the financial year ended March 31, 2015, on consolidated basis, your Company achieved a turnover of Rs. 37,433.4 million as against a turnover of Rs. 31,307.6 million in the previous year, registering a growth of 19.57%.

SUBSIDIARIES

A separate statement containing the salient features of financial statements of all subsidiaries of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.

The Company has 19 subsidiaries as on March 31, 2015. The Company does not have any associate company/ies within the meaning of Section 2(6) of the Companies Act, 2013.

During the year three Companies became subsidiaries of the Company. Details of companies which have become or ceased as subsidiary, associates and joint ventures, during the year under review, are as under:

Name Details of Change Date of Change

Ascend Laboratories (UK) Incorporated as subsidiary August 6,2014 Limited

Cachet Pharmaceuticals Private Became our subsidiary by way of March 27,2015 Limited acquisition of 51% Shareholding

Indchemie Health Specialties Became our subsidiary by way of March 30,2015 Private Limited acquisition of 51 % Shareholding

Pursuant to the provisions of Section 129 (3) of the Companies act, 2013, a statement containing the salient features of financial statements of the Company''s subsidiaries is part of the financial statement of the Company. Further Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

DIVIDEND

During the financial year 2014-15, your Company declared and paid an Interim dividend at Rs 20 per Equity Share amounting to Rs.23.91 Crores (Rupees Twenty Three Crores Ninety One Lacs only) being 200% of paid up share capital on 26th September, 2014 and paid a Second Interim dividend at Rs.20 per Equity Share amounting to Rs.23.91 Crores (Rupees Twenty Three Crores Ninety One Lacs only) being 200% of paid up share capital to the shareholders, on 20thFebruary, 2015. In view of the said payments of interim dividend, the Directors do not intend to recommend, any further dividend for the year 2014-15.

TRANSFER TO RESERVES

Your Company has not transferred any amount to the general reserve. An amount of Rs. 11,385.4 million is proposed to be retained in the Statement of Profit and Loss Account.

PUBLIC DEPOSITS

During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014. No amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder, the Board of Directors at their meeting held on 30th January, 2015 constituted the Nomination and Remuneration Committee of your Company and also formulated the Nomination and Remuneration Policy on the recommendations of the Nomination and Remuneration Committee.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company forms part of this Report and is set out in "Annexure D" to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments:

During the financial year 2014-15,

(a) Mr. M C Shah Director of the Company was appointed as an Independent Director on the Board of the Company in the meeting of the Board of Directors held on 20th February 2015 and in the Extra Ordinary General meeting of the members held on 16th March 2015 to hold office upto 15th March 2020 in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014.

(b) Mr. E N Shankar Director of the Company was appointed as an Independent Director on the Board of the Company in the meeting of the Board of Directors held on 20th February 2015 and in the Extra Ordinary General meeting of the members held on 16th March 2015 to hold office upto 15th March 2016 in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014

(c) Mr. A.M. Prasad was appointed as Additional Director designated as an Independent Director in the meeting of the Board of Directors held on 30th January, 2015 and he was appointed as an Independent Director in the Extra Ordinary General meeting of the members held on 16th March 2015 to hold office upto 15th March 2020 in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014.

(d) Mr. R L Shenoy was appointed as Additional Director designated as an Independent Director in the meeting of the Board of Directors held on 20th February, 2015 and he was appointed as an Independent Director in the Extra Ordinary General meeting of the members held on 16th March 2015 to hold office upto 15th March 2020 in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014.

(e) Mr. A K Purwar was appointed as Additional Director designated as an Independent Director in the meeting of the Board of Directors held on 16th March, 2015.

(f) Ms. Sangeeta Singh was appointed as Additional Director designated as an Independent Director in the meeting of the Board of Directors held on 29th June, 2015.

(g) Ms. Sudha Ravi was appointed as an Additional Director designated as an Independent Director in the meeting of the Board of Directors held on 29th June, 2015

Mr. A K Purwar, Ms Sudha Ravi and Ms. Sangeeta Singh who were appointed as Additional Directors by the Board of the Company and who in terms of Section 161 of the Companies Act, 2013 holds office upto the date of ensuing Annual General Meeting and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act 2013 proposing his candidature for the office of Director be and is hereby appointed as an Independent Directors of the Company to hold office for a term of five years upto 12th July, 2020.

The terms and conditions of the appointment of the Independent Directors is posted on Company website.

During the year the Shareholders in their meeting held on 16th March 2015 and the Board of Directors in their meeting held on 20th February, 2015 had also approved the following:-

1. Elevation of Shri Samprada Singh, Chairman of your Company as Chairman Emeritus and non-executive director of the Company effective 1st April, 2015. He shall not be liable to retire by rotation.

2. Elevation of Shri Basudeo Narayan Singh, Managing Director of your Company as Executive Chairman of the Company effective 1st April, 2015 for the remaining period expiring on 31st March 2019. He shall not be liable to retire by rotation.

3. Re-designation and increase in remuneration of Mr. Dhananjay Kumar Singh and Mr. Sandeep Singh, Directors of the Company as Joint Managing Director (the "JMD") effective from 1st April, 2015 for the remaining period expiring on 31st December, 2018 Both will be liable to retire by rotation.

4. Re-appointment and increase in remuneration of Mr. Mritunjay Kumar Singh as Director of the Company effective from 1st April, 2015 for the remaining period expiring on 31st December, 2018.

Resi gnations/Retirements:

Shri Nawal Kishore Singh has resigned from the Board on 2nd January, 2015

Shri Prabhat Narain Singh has resigned from the Board on 20th February, 2015

Shri Mr. E.N. Shankar has resigned from the Board with effect from 15th June 2015,

The Board places on record its appreciation for their valuable contribution during their tenure with your Company.

Shri Mritunjay Kumar Singh and Shri Sandeep Singh Directors, are liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible have offer themselves for reappointment.

Appropriate resolutions for their re-appointment are being placed for your approval at the ensuing AGM. Your Directors recommend their re-appointment as Directors of the Company for your approval

Shri Prabhat Agrawal, Chief Executive Officer , Shri. Rajesh Dubey, Chief Financial Officer and Shri. Manish Narang, Sr. Vice President (Legal) & Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Annual Evaluation of Board''s Performance:

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board of/Director(s) for the financial year 2014-15.

In a separate meeting of the Independent Directors held on 31st March 2015 , performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated taking into account the views of the executive and non- executive directors.

NUMBER OF MEETINGS OF THE BOARD

During the year 10 meetings of the Board of Directors of your Company were held on the following dates:-

(i) 2nd April, 2014

(ii) 2nd May, 2014

(Hi) 1st July, 2014

(iv) 7th July, 2014

(v) 15th September, 2014

(vi) 26th September, 2014

(vii) 24th November, 2014

(viii) 30th January, 2015

(ix) 20th February, 2015

(x) 16th March, 2015

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder.

Board Committees:

During the year the Board has constituted the following Committees

1. Audit Committee Constitution:

Name of the Director Designation

Mr. R L Shenoy Chairman

Mr. M K Singh Member

Ms. Sudha Ravi Member

2. Nomination and Remuneration Committee:

Name of the Director Designation

Mr. A K Purwar Chairman

Mr. B N Singh Member

Mr. A M Prasad Member

Ms. Sangeeta Singh Member

3. CSR Committee:

Name of the Director Designation

Mr. R L Shenoy Chairman

Mr. D K Singh Member

Mr. B P Singh Member

Mr. Sandeep Singh Member

4. Risk Management Committee:

Name of the Director Designation

Mr. D K Singh Member

Mr. M K Singh Member

Mr. Sandeep Singh Member

5. Stakeholder Relationship Committee:

Name of the Director Designation

Mr. R L Shenoy Chairman

Mr. D K Singh Member

Mr. Sandeep Singh Member

Mr. M C Shah Member

DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief, your Directors pursuant to Section 134 (5) of the Companies Act, 2013, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit & loss of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the t the annual financial statements on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT:

M/s BSR & Co. LLP (LLP Reg No:- AAB-8181), Chartered Accountants , appointed as Statutory Auditors in place of retiring auditor i.e. M/s. R.S.Sanghai & Associates, Chartered Accountants of the Company at the conclusion of the Annual General Meeting held on 18th August, 2014 have confirmed their eligibility and willingness to accept the office of the Auditors for the year 2014-2015.

A certificate from them has been received to the effect that their appointment as Statutory Auditors in accordance to the provisions of Sections 139 and 141 of the Companies Act, 2013 and rules framed thereunder,

M/s BSR & Co. LLP shall continue to be the Statutory Auditors of the Company for the FY 2015-16 subject to ratification by the shareholders at next Annual General Meeting of the Company.

The Audit Committee and Board of Directors recommend the appointment of M/s. B S R & Co. LLP, (LLP Reg no :- AAB-8181) , Chartered Accountants as the Auditors of your Company for the financial year 2015-2016 till the conclusion of the next AGM. The Auditors Report for financial year 2014-2015 does not contain any qualification, reservation or adverse remark.

Auditors Report

The Observations of Auditors in their report are self-explanatory and need no further comments, Cost Auditor

The Board of Directors in their meeting held on 16th March, 2015, had appointed Mr. Suresh D Shenoy, Cost Accountant (Membership No. 8318), as the Cost Auditor of your Company for the financial year 2014-15 to conduct the audit of the cost records of your Company.

As per Section 148 and other applicable provisions , if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company has appointed Mr. Suresh D Shenoy, Cost Accountant (Membership No. 8318) for the financial year 2014-15 on the recommendation of the Audit Committee. The remuneration proposed to be paid to the Cost Auditor subject to the ratification by the members at the ensuing AGM would not be exceeding Rs. 6,00,000 (Rupees Six Lakhs only) plus service tax and reimbursement of Rs. 10,000 towards actual out of pocket expenses.

Your Company has received consent from Mr. Suresh D Shenoy, Cost Accountants, to act as the Cost Auditor of your Company for the financial year 2014-15 along with a certificate confirming their independence.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s. Manish Ghia & Associates, Practicing Company Secretaries, (COP No. 3531) to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure E" to this Report with the following observations:

(a) "The Company is yet to file e-form CHG-1 in respect of lien created on 27th February, 2015 on fixed deposit of the Company for availing credit facility from M/s Dena Bank, its bankers. The bankers themselves can also file the above form for charge so created within a period of 300 days from the date of creation of charge with late payment of fees. Accordingly, the company/bankers have adequate time to file this form with appropriate additional fees and as reported to us, as on the date of signing of this report, effective steps have been initiated by the company for filing of the aforesaid charge."

(b) "In respect of resolutions passed by the board of directors in exercise of their powers under section 179 of the Act in the meetings held on 2nd April 2014 and 1st July, 2014, the company is yet to file MGT-14; the said form is to be filed within 30 days with normal fee or within a further period of 270 days with additional fee, and as the delay is beyond 300 days, the company has filed necessary applications to the Central Government seeking condemnation of delay attaching therewith the requisite e-form MGT-14 to be filed. If the applications for condemnation as mentioned hereinbefore is approved by the Central Government, the delay in filing will be treated as deemed compliance."

(c) "The company has not appointed women director by 31st March 2015 as required under section 149 of the Act, However, as on the date of this report, the company has appointed the woman director as required under the Act." The observations in the Secretarial Audit Report are self-explanatory and need no further comments.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return prepared under Section 92 of the Companies Act, 2013 in Form MGT- 9 is given in ''Annexure B" to this Report.

RELATED PARTY TRANSACTIONS

During the financial year 2014-15, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms'' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder.

The details of the related party transactions as required under Accounting Standard - 18 are set out in the standalone financial statements forming part of this Annual Report.

The Form AOC- 2 Pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the information on transactions with related parties is set out as "Annexure C" to this Report in The Form AOC- 2 and the same forms part of the Report.

LOANS/GUARANTEES AND INVESTMENTS:

The particulars of loans, guarantees and investments covered under the provisions of Section 186 of Companies Act 2013 have been disclosed in the financial statements.

VIGIL MECHANISM (Whistle Blower Policy):

The Company has a vigil mechanism named Whistle Blower Policy and Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of establishment of the vigil mechanism is explained on the website of the Company.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee has framed a policy for selection and appointment of Directors, senior management and their remuneration. The Remuneration Policy is annexed to the Report in Annexure F.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has constituted Risk Management Committee. The said Committee would formulate and recommend to the Board, a Policy on Risk Management. Though the Company does not have a documented Risk Management Policy as on the date of this Report, it has in place necessary process to assess, manage and mitigate risks, across the departments. Company''s risk management approach is based on a clear understanding of the variety of risks that the organisation faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.

CORPORATE SOCIAL RESPONSIBILITY

The Board of Directors have approved the Corporate Social Responsibility (CSR) Policy for your Company pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy outlines the CSR vision of your Company which is based on embedded tenets of trust, fairness and care The CSR Policy shall be on the website of the Company which can be viewed at www.alkemlabs.com

The initiatives undertaken by your Company during the financial year 2014-15 in CSR have been detailed in this Annual Report,

The Annual Report on CSR activities including the contents of the CSR policy, in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out herewith as "Annexure A" to this Report in the format prescribed in the said Rules. Such Report is also displayed on the Company''s website.

Disclosures:

Material Changes and Commitments:

There are no material changes and commitments which have occurred between the end of the financial year and the date of the Report which have affected the financial position of the Company.

Significant and Material Orders;

There are no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status and company''s operations in future,

Prevention of Sexual Harassment at Workplace Policy;

There were no complaints filed under the Sexual harassment of Women at Workplace (Prevention & Prohibition & Redressal) Act, 2013.

Reporting of Frauds by Auditors

There were no frauds reported by auditors under section 143(12).

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls to ensure that all assets/inventories are safeguarded and protected against loss from unauthorized use and disposition and all transactions are authorized and reported correctly. There is a robust documentation system on internal controls along with exhaustive budgetary and costing process to ensure systematic and smooth function of all facets of Company working. These controls are supplemented by effective internal audit process both in-house and from reputed outside auditing firm, both reporting to the Audit Committee. The Audit Committee finalizes the areas of audit and the schedule and discusses the findings of the audit and if wherever required direct the Company to set up applicable control measures.

CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE DETAILS

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the

(A) CONVERSATION OF ENERGY:

(a) Energy Conservation Measures taken:

Energy conservation continues to receive top priority in the company, energy consumption are monitored, maintenance systems improved and distribution losses are reduced. Specific Energy Conservation measures taken include

1. We have improved our power factor up to 0.99 by proper installation of capacitor panel and reduce total consumption of energy in the form of electricity.

2. We have improved our efficiency of boiler by taking following measures

a. By increasing feed water temperature up to 90°

b. Installation of energy efficient system in the existing equipment configuration.

c. Condensate recovery as a boiler feed water

d. Condenser water of multi column as a boiler feed water

e. Proper combustion of fuel by proper setting of automation system

f. Temperature sensors in cooling towers

g. Control systems in air compressors.

3. We have reduced our consumption of steam by proper installation of steam trap in line as well as in equipment''s.

4. We are in process to replace all lights with LED fittings or solar system phase by phase in result we will save energy in the form of electricity.

5. We have installed VFD for all major equipment''s. With the help of VFD we are saving energy in the form of electricity.

6. For fuel conservation - installed condensate recovery system. The condensate at 80 deg. C is fed to the boiler.

Additional proposals or activities, if any:

i) Improving the insulation of low and high temperature services.

ii) Conversion of all CFL lights to LED in production area.

Energy conservation measures of the type mentioned above have resulted in gradual savings like reduction in electricity consumption saving around 10% of fuel as in feed to boiler.

(b) Steps taken by the Company for utilizing the alternate sources of energy:

We have installed bio mass, rice husk and wood fried boiler in place of furnaces oil.

(c) The capital investment on energy conservation equipment''s:

(1) Investment of Rs. 12.22 lakhs in Sikkim, Kumrek:

VFD ACS 550-01-45A-4 22 KW-

Utility Area

Husk Boiler Bag Filter Hot Insulation

Providing, Fixing and Hot Insulation of HB Duct

Husk Boiler Steam Pipeline Hot Insulation Work

Hot Insulation-Steam Pipeline- Husk Boiler

Bucket Elevator with Hopper

(2) Insulation Work in Alkem

Health science Unit I in Sikkim AMOUNTING TO Rs. 3.76 Lakhs

(3) Investment of Rs. 67.97 lakhs in the following:

VFD & APFC PANEL- 500K VAR

VFD & VFD PANEL BLOW DOWN VALUE

(B) TECHNOLOGY ABSORPTION:

1. Specific areas in which R&D work is carried out:

The focus of the Company''s R&D efforts was on the following areas:

i. Development of new drug formulations for existing and newer active drug substances.

ii. Development of agro technology, genetics and biotechnology for cultivation of medicinal plants and isolation of active ingredients from plant materials.

iii. Development of new drug delivery systems for existing and newer active drug substances as also newer medical devices.

iv. Patenting of newer processes/newer products/newer drug delivery systems/newer medical devices/newer usage of drugs for both local and international markets.

v. Development of new innovative technology for the manufacture of existing APIs and their intermediates.

vi. Development of new products, both in the area of APIs as well as formulations, specifically for export,

vii. Development of methods to improve safety procedures, effluent control, pollution control, etc.

viii. Projects to develop APIs and formulations jointly with overseas companies.

ix. Development of products related to the indigenous system of medicines.

2. Some of the major benefits derived as a result of R&D include:

i. Successful commercial scale up of several new APIs and formulations.

ii. Development of new drug delivery systems and devices.

iii. Improved processes and enhanced productivity in both APIs and formulations.

3. Future plan of action:

i. Optimization of process parameters with emphasis on cost reduction and simplification.

ii. Development of new drug delivery systems, pharmaceutical and nutritive supplements.

iii. Studying feasibility of using new manufacturing techno-logy in existing solid dosage forms.

iv. Development of formulations based on certain herbal preparation, a set of diagnostic kits based on Elisa techniques, etc.

v. Development of new molecules for formulations & processes for manufacture of bulk drugs.

4. Expenditure on R & D:

Sr. No. Particulars Amount (Rs. lakhs)

(i) Capital 1,966.23

(ii) Recurring 14,237.98

(excluding depreciation of Rs.892.84 lakhs)

Total 16,204.21

Total R&D expenditure as percentage to total turnover: 5.10%.

5. Efforts, in brief, made towards technology absorption, adaptation and innovation:

i. Development and patenting of new molecular forms and methods of synthesis.

ii. Development of new drug delivery systems.

6 Benefits derived as a result of the above efforts:

i. Improvement in operational efficiency through reduction in batch hours, increase in batch sizes, better solvent recovery and simplification of processes.

ii. Meeting norms of external regulatory agencies to facilitate more exports.

iii. Improvements in effluent treatment, pollution control and all-round safety standards

iv. Maximum utilization of indigenous raw materials,

v. Development of products for import substitution.

7. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year):- N.A.as the Company has not imported any technology in the last three years.

(C)FOREIGN EXCHANGE EARNING AND OUTGO:

Earnings in foreign exchange was equivalent to Rs. 35162.20 lakhs and expenditure was Rs 11376.81 lakhs.

For and on behalf of the Board

Alkem Lahiruiurics Limited

Samprada Singh

Chairman Emeritus

DIN ; 00760279

29.06.2015


Mar 31, 2014

The Directors have pleasure in presenting their 40th Annual Report along with the audited accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS: (Rs. in Lakhs)

2013-2014 2012-13

"Sales (Gross) 2,72,645.20 2,33,528.73

"Profit before tax 45,511.47 50,990.98

Less: Provision for Income Tax (9,299.00) (10,300.00)

(Add)/Less: Provision for Deferred (1,101.13) (1,348.75)

Taxation

Add: MAT Credit Entitlement 9,299.00 10,270.76

Add/ (Less): Income Tax of earlier year

Profit after tax 44,410.34 49,612.99

Add: Balance of profit from previous years 66,138.53 44,304.77

Profit available for appropriation 1,10,548.87 93,917.76

Appropriations:

proposed Dividend Interim Dividend 2,391.30 2,391.30

Corporate Tax on Dividend 406.40 387.93

General Reserve 25,000.00 25,000.00

Balance Carried Forward 82,751.27 66138.53

1,10,548.87 1 93,917.76

DIVIDEND :

The Company has paid an interim dividend of 200% during the year. Your Directors do not recommend any further dividend for the year ended 31st March, 2014.

OPERATIONS :

The Company''s sales (Gross) has increased to Rs. 2,72.645.20 lakhs as against Rs. 2,33,528.73 lakhs for the previous year resulting in an increase of 16.75% over the previous year.

SUBSIDIARIES :

A statement pursuant to section 212 of the Companies Act, 1956 relating to the subsidiaries have been given as an annexure to the Annual Report.

DIRECTORS :

Mr. D K Singh and Mr. B P Singh retire by rotation and are eligible for reappointment.

PERSONNEL:

As required by the provision of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provision of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of your Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Registered Office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date;

iii that proper and sufficient care has been taken 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;

iv that the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Information in accordance with the provisions of Section 217(l)(e) of the Companies Act 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this report.

AUDITORS:

The Board of Directors has proposed M/s. BSR & Co. LLP as the Statutory Auditors of the Company in place of M/s R.S. Sanghai & Associates, Chartered Accountants who have shown their unwillingness to act as the Auditors of the Company to hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting of the Company.

ACKNOWLEDGEMENTS:

Your Directors would like to express their grateful appreciation to the Bankers and trade associates for their valuable assistance, continued support and co-operation and also wish to extend their thanks and appreciation to the Management team, Staff and Workers of the Company for their commitment, dedication and respective contributions to the Company''s operations during the year under review.

For and on behalf of the Board

(SAMPRADA SINGH)

Chairman

Place:- Mumbai

Date:-7th July, 2014


Mar 31, 2013

Dear Members,

The Director have pleasure in presenting their 39th Annual report along with the audited accounts for the year ended 31st March 2013

FINANCIAL RESULTS:

(Rs in Lakhs)

2012-13 2011-12

Sales (Gross) 2,33,528.73 1,97,352 60

Profit before tax 50,990.98 45,438.23

(Less): Provision for Income Tax (10,300.00) (9,200.00)

Add/(Less):Provision for Deferred Taxation (1,348.75) (551.69)

Add: MAT Credit Entitlement 10,270.76 7,693.86

Add/(Less): Income Tax of earlier years - (832.28)

Profit after-tax 49,612.99 42,548.12

Add: Balance of profit from previous years 44,304,99 24,535.90

Profit available for appropriation 93,917.76 67,084.02

Appropriations:

Proposed Dividend - 2,391.30

Interim Dividend 2,391.30 -

Corporate Tax on Dividend 387.93 387.93

General Reserve 25,000.00 20,000.00

Balance Carried Forward 66,138.53 44,304.79

93,917.76 67,084.02

DIVIDEND:

The Company has paid an interior dividend of 200% during the year .Your Directors do not recommend any further dividend for the year ended 31st March, 2013.

OPERATIONS:

The Company''s sales (Gross) has increased to Rs 2,33,528.73 lakhs as against Rs. 1,97,352.60 lakhs for the previous year resulting in an increase of 18.33 % over the previous year.

TO THE MEMBERS

Your Directors have pleasure in presenting their 39th Annual Report along with the audited accounts for the year ended 31s1 March, 2013.

SUBSIDARIES:

During the year, the Company has incorporated a wholly owned subsidiary in the name of , Alkem Laboratories Korea Inc on 7th August, 2012 in Korea having 15000 units of 100 Korean Won each amounting to Korean Won 1,50,00,000.

During the year, the Company has incorporated a wholly owned limited liability Partnership in the name of The Pharma Network Limited Liability Partnership in Kazakhstan on 14th August, 2012 with a charter capital of Tenge 1.61.800

During the year S & B Pharma Inc was incorporated on 25 01.2012 in the State of Delaware USA with a authorized share capital of 100 shares of common stock at 0 01S per share in which the Company holds 49 share and the balance 51 share are held by S S. B Holdings BV. a wholly owned subsidiary of the Company in Netherlands

During the year, the Company has acquired 6,83,13,954 shares being 100% of the share capital of Pharmacor Limited, Australia. Consequent to this Pharmacor Limited has become '' a wholly owned subsidiary of the Company. Out of this 100% share capital 54,651,163 , shares constituting 80% of the share capital in Pharmacor Limited were acquired by the Company from S & B Holdings BV. a wholly owned subsidiary of the Company in Netherlands and the balance 13,662,791 shares constituting 20% of the share capital in Pharmacor Limited were acquired by the Company from Phamacy I pry Limited as a trustee for the Jean Pierre Salama No. 2 Family Trust

S & B Holding BV. a wholly owned subsidiary of the Company in Netherlands had acquired 51% of total shares i.e. 34,883.721 shares in Pharmacor Limited Australia on 30 06.2009 S & B Holding BV further acquired 29% of the total share capital ie 19,767.442 shares in Phamacor Limited on 1st April, 2011 thus acquiring 80% of total share capital i e. 54,651.163 shares in Pharmacor Limited, Australia

A statement pursuant to Section 212 of the Companies Act, 1956 relating to the above subsidiaries have been given as an annexure to the Annual Report

DIRECTORS:

Mr M K. Singh, Mr M. C Shah and E N Shankar retire by rotation and are eligible for reappointment

PERSONNEL:

As required by the provision of Section 217(2A) of the Companies Act. 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of the employees are set out in the Annexure to the Directors Report However, as per the provision of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of your Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Registered Office of the Company. .

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. That the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

iii. That proper and sufficient care has been taken 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;

rv. That the annual accounts have been prepared on a going concern basis.

ENERGY,TECHNOLOGY & FOREIGN EXCHANGE:

Information in accordance with the provisions of Section 217(1)(e) of the Companies, Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this report.

AUDITORS:

M/s R.S.Sanghai & Associates, Chartered Accountants, the Company''s Auditors will retire at the conclusion of the ensuing Annual General Meeting. They have given their consent to act as Auditors of the Company, if re-appointed. Members are requested to appoint the auditors and fix their remuneration.

AUDFTORS REMARKS:

The auditors have not given any adverse remark in their report which requires any further clarification. The report is self explanatory.

ACKNOWLEDGEMENT:

Your Directors would like to express their grateful appreciation to the Bankers and trade associates for their valuable assistance, continued support and co-operation and also wish to extend their thanks and appreciation to the Management team. Staff and Workers of the Company for their commitment, dedication and respective contributions to the Company''s operations during the year under review.

For and on behalf of the Board

SAMPRADA SINGH

Chairman

Mumbai, 12th June, 2013


Mar 31, 2012

The Directors have pleasure in presenting their 38th Annual Report along with the audited accounts for the year ended 31st March, 2012

FINANCIAL RESULTS:

(Rs. in Lakhs)

2011-12 2010-11

Sales (Gross) 1,97,352.60 1,66,877.87

Profit before tax 45,438.23 35,520.96

(Less): Provision for Income Tax (9,200.00) (7,100.00)

Add /(Less):Provision for Deferred Taxation (551.69) (69.24)

Add: MAT Credit Entitlement 7,693.86 4,657.67

Add / (Less): Income Tax of earlier years (832.28) (666.89)

Profit after tax 42,548.12 32,342.50

Add: Balance of profit from previous years 24,535.90 9,284.75

Profit available for appropriation 67,084.02 41,627.25

Appropriations:

Proposed Dividend 2,391.30 1,793 48

Interim Dividend - -

Corporate Tax on Dividend 387.93 297.89

General Reserve 20,000.00 15,000.00

Balance Carried Forward 44,304.79 24,535.88

67,084.02 41,627.25

DIVIDEND:

The Board of Directors of your Company are pleased to recommend for approval of the members final dividend of 200% for the year ended 31SL March, 2012.

OPERATIONS:

The Company''s sales (Gross) has increased to Rs. 1,97,352.60 lakhs as against Rs. 166,877.87 lakhs for the previous year resulting in an increase of 18.26% over the previous year.

SUBSIDARES:

During the year the Company has acquired 100% stake in Ascend Laboratories SDN BHD, Malaysia amounting to RM 2 divided into 2 shares of RM 1 each on 1st July, 2011.

During the year the Company has incorporated a wholly owned subsidiary in the name of Ascend Laboratories Spa, Chile on 19th July, 2011.

During the year the Company has acquired majority stake in Eezone Biosciences Private Limited, India on 4th November, 2011. Upon conversion to Public Limited Company the name of ''Enzene Biosciences Private Limited'' was changed to ''Enzene Biosciences Limited'' w. e. f 22nd March, 2012

During the year the Company has incorporated a wholly owned subsidiary in the name of Pharmacia Limited, Kenya having share capital of Shillings 1,00,000 divided into 1000 shares of Shillings 100 each on 15th May, 2012.

A statement pursuant to Section 212 of the Companies Act, 1956 relating to the above subsidiaries have been given as an annexure to the Annual Report.

DIRECTORS:

Mr. N K Singh and Mr. P N Singh retire by rotation and are eligible for reappointment PERSONNEL:

As required by the provision of Section 217(2A) of the Companies Act. 1956. read with Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of the employees are set out in the Annexure to the Directors Report However, as per the provision of the Companies Act. 1956. the Report and Accounts are being sent to all the shareholders of your Company excluding the aforesaid information Any shareholder interested in obtaining such particulars may write to the Registered Office of the Company

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. That the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year ended on that date;

iii That proper and sufficient care has been taken for the maintenance of adequate accounting records In accordance with the provisions of the Companies Act, 1956 for safeguarding the assets o'' the Company and for preventing and detecting fraud and other irregularities;

iv. That the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this report.

AUDITORS:

M/s R.S.Sanghai & Associates, Chartered Accountants, the Company''s Auditors will retire at the conclusion of the ensuing Annual General Meeting. They have given their consent to act as Auditors of the Company, if re-appointed. Members are requested to appoint the auditors and fix their remuneration.

AUDITORS REMARKS:

The auditors have not given any adverse remark in their report which requires any further clarification. The report is self explanatory.

ACKNOWLEDGEMENT:

Your Directors would like to express their grateful appreciation to the Bankers and trade associates for their valuable assistance, continued support and co-operation and also wish to extend their thanks and appreciation to the Management team, Staff'' and Workers of the Company for their commitment, dedication and respective contributions to the Company s operations during the year under review

For and on behalf of the Board

SAMPRADA SINGH

Chairman

Mumbai, 25th May, 2012


Mar 31, 2011

The Directors have pleasure in presenting their 37th Annual Report along with the audited accounts for the year ended 31st March, 2011.

Monthly Contribution Online Chillan Status

FINANCIAL RESULTS:

(Rs. in Lakhs)

2010-11 2009-10

Sales (Gross) 1,66,877.87 1,36,259.92

Profit before tax 35,520.96 24,507.07

Less: Provision for Income Tax 7,100.00 4,600.00

Add: Less: Provision for Deferred Taxation 69.24 (177.00)

Add: MAT Credit Entitlement (4,657.67) (3,421.11)

Profit after tax 33,009.39 23,505.18

Add(Less) Income Tax of Earlier years (666.89) 301.64

Add: Balance of profit from previous years 9,284.75 2,226.49

Amount available for appropriation 41,627.25 26,033.31

Appropriations:

Proposed Dividend 1,793.48

Interim Dividend 1,494.56

Corporate Dividend Tax Paid 297.89 254.00

General Reserve 15,000.00 15,000.00

Balance carried Forward 24,535.88 9,284.75

41,627.25 26,033.31

DIVIDEND:

The Board of Directors of your Company are pleased to recommend for approval of the members final dividend of 150% for the year ended 31s'' March, 2011.

OPERATIONS:

The Company''s sales (Gross) has increased to Rs. 166,877.87 Lakhs as against Rs. 136,259.92 Lakhs for the previous year resulting in an increase of 22.47% over the previous year.

PERSONNEL:

As required by the provision of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provision of the Companies Act,1956, the Report and Accounts are being sent to all the shareholders of your Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Registered Office of the Company.

DIRECTORS :

Mr. B.P. Singh, and Mr. D.K. Singh, retire by rotation and are eligible for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. That the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the year ended on that date;

iii. That proper and sufficient care has been taken 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;

iv. That the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE :

Information in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this report.

AUDITORS:

M/s R.S.Sanghai & Associates, Chartered Accountants, the Company''s Auditors will retire at the conclusion of the ensuing Annual General Meeting. They have given their consent to act as Auditors of the Company, if re-appointed. Members are requested to appoint the auditors and fix their remuneration.

AUDITORS REMARK:

The auditors have not given any adverse remark in their report which requires any further clarification. The report is self-explanatory.

SUBSIDIARIES:

During the year name of Alkem Laboratories B. V. Netherlands, a subsidiary of the Company was changed to S & B Holdings B. V. w.e.f 4th October, 2010.

During the year S & B Holdings B. V. had acquired 100% sharea in The Pharma Network, LLC, USA amounting to USD 2,35,45,000.00 divided into 6,62,33,766 shares.

During the year S & B Holdings B.V., incorporated Angelic Holdings SA, Switzerland having paid up share capital of CHF 100,000.00 divided into 100,000 shares of CHF 1 each.

During the year Alchemy Parma FZC, Dubai a subsidiary of the company has been closed down on 29th August, 2010.

A statement pursuant to section 212 of the Companies Act, 1956 relating to the above subsidiaries have been given as an annexure to the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their grateful appreciation to the Bankers and trade associates for their valuable assistance, continued support and co-operation and also wish to extend their thanks appreciation to the management team, Staff and Workers of the Company for their commitment, dedication and respective contributions to the Company''s operations during the year under review.

For and on behalf of the Board



SD/-

SAMPRADA SINGH

Chairman

Mumbai, 14th June, 2011


Mar 31, 2009

The Directors have pleasure in presenting their 35th Annual Report along with the audited accounts for the year ended 31st March, 2009.

FINANCIAL RESULTS: (Rs. in Lakhs)

2008-09 2007 - 08

Sales 118486.68 102378.13

Profit before tax 16893.53 13851.94

Less: Provision for Income Tax 1940.00 1585.00

Less: Provision for Fringe Benefit Tax 607.00 510.00

Less: Provision for Deferred Tax 400.00 375.00

Add: MAT Credit Entitlement 1871.18 1375.00

15817.71 12756.94

Add/(Less): Prior period items for Taxation (237.81) 1750.00

Profit after tax 15579.90 14506.94

Add: Balance of profit from previous years 3395.15 2787.06

Amount available for appropriation 18975.05 17294.00

Appropriations

Interim Dividend 1494.56 1195.65

Corporate Dividend Tax Paid 254.00 203.20

General Reserve 15000.00 12500.00

Balance Carried Forward 2226.49 3395.15

18975.05 17294.00

DIVIDEND:

The Company has paid an interim dividend of 125% of Rs. 12.50 per equity share of Rs. 10/- each absorbing an amount of Rs. 1748.56 lakhs inclusive of tax on dividend. In view of the payment of interim dividend, the Directors, do not recommend for any further dividend for the year.

OPERATIONS:

The Company''s sale has increased to Rs.1184.87 crores as against Rs. 1023.78 crores of the previous year resulting in an increase of 16%. The Profit before tax has increased to Rs. 168.94 crores as against Rs. 138.52 Lakhs of the previous year resulting in an increase of 22%.

PERSONNEL:

As required by the provision of Section 217(2A) of the Companies Act, 1956, . read with Companies (Particulars of Employees) Rules, 1975 as amended, the particulars of the employees are set out in the Annexure. to the Directors'' Report.

However, as per the provision of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of your Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Registered Office of the Company.

DIRECTORS:

Mr. P. N. Singh and Mr. N. K. Singh retire by rotation and being eligible offer themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirms: .

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the. state of affairs of the Company as at 31st March, 2009 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken 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;

iv. that the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this report.

AUDITORS :

The Statutory Auditors of the Company, M/s R.S.Sanghai & Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting.

They have given their consent to act as the Auditors of the Company, if re- appointed. Members are requested to appoint the auditors and to fix their remuneration.

AUDITORS REMARKS:

The auditors have not given any adverse remark in their report which requires any further clarification. The report is self explanatory.

SUBSIDARIES:

During the year the Company incorporated the following wholly owned subsidiaries:

1. Alkem Laboratorios Do Brazil Ltda in Brazil having a paid up capital of Brazilian Real 35,00,000 divided into 3,50,000 Shares of Brazilian Real 10 each.

2. Alkem Laboratories Pty. Ltd. in South Africa having a paid up capital of South African Rand 50,00,000 divided into 5,00,000 shares of South African Rand 10 each.

3. Alkem Laboratories Corporation in Philiipines having a paid up capital of Pesos 94,00,000 divided into 94000 shares of Pesos 100 each.

During the year the Company had acquired Biitzstart F08-eins- eins-drei GmbH incorporated under the German Laws and the name of the said Company was subsequently changed to Alkem Pharma GmbH. The share capital of Alkem Pharma GmbH is Euro 25000.

A statement pursuant to section 212 of the Companies Act, 1956 relating to the above subsidiaries have been given as an annexure to the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to express their grateful appreciation to the Bankers and trade associates for their valuable assistance, continued support and co-operation and also wish to extend their thanks and appreciation to the Management team, Staff and Workers of the Company for their commitment, dedication and respective contributions to the Company''s operations during the year under review.

For and on behalf of the Board

(SAMPRADA SINGH)

Chairman

Mumbai: 27th July, 2009

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