BOARD'S REPORT Dear Members, 1. Your Directors have pleasure in presenting their 108th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2015. 2. Transfer to reserve: an amount of Rs. 1,000 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 Rs. 0.15 per share (i.e. 7.5%) of face value Rs. 2/- per share for the year ended on 31st March, 2015 as against Rs. 0.15 per share (i.e. 7.5%) 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 agreements is included in this Report as Annexure a. 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 revenues from operations including export incentives were Rs. 149.94 Crores for the year ended 31st March, 2015 as compared to Rs. 160.92 Crores for the previous year. The Company has made Net profit of Rs. 24.15 Crores for the year under review as compared to Rs. 29.53 Crores for the previous year. 6. Subsidiaries, Associates and Joint Ventures: The Company does not have any subsidiaries or joint ventures. Alembic pharmaceuticals Limited and Alembic Exports Limited are Associate Companies. In terms of Section 129 of the Companies Act, 2013 read with third proviso to Rule 6 of Companies (Accounts) Rules, 2014, the Company is not required to prepare consolidated financial statements for the financial year 2014-15. 7. Directors: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Chirayu R. Amin, 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 Mr. Abhijit Joshi and Mr. Sameer Khera as Additional Directors w.e.f. 5th November, 2014 and 25th February, 2015 respectively. They hold office up to the ensuing Annual General Meeting of the Company. The Company has received notices together with requisite deposit of Rs. 1 Lac under Section 160 of the Companies Act, 2013, from the members of the Company proposing the candidature of Mr. Abhijit Joshi for the office of a non-executive director liable to retire by rotation and of Mr. Sameer Khera as an Independent Director, for a term of 5 consecutive years upto 24th February, 2020. Mr. R. M. Kapadia and Mr. Ashok tulankar have resigned from the Board of the Company w.e.f. 13th August, 2014 and 31st October, 2014 respectively. The Board places on record its gratitude for the services rendered by them as members of the Board. 8. Key Managerial Personnel: Mr. Udit C. Amin, Director & president-Operations (CEO) and Mr. Rasesh Shah, CFO are Key Managerial personnel of the Company. Mr. Rasesh Shah was appointed as CFO of the Company w.e.f 13th August, 2014. Mr. Chirag Shukla, Company Secretary of the Company resigned w.e.f. 15th April, 2015. 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 prescribed both under subsection (6) of Section 149 of the Companies Act, 2013 and Listing Agreements. 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 Evaluation Criteria were as follows: (a) For Non-Executive and 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. Milin Mehta as Chairman and Mr. C. p Buch and Mr. R. C. Saxena 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 Organisation 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 B. 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 materially significant related party transactions made by the Company with Alembic pharmaceuticals Limited, related party. However, no related party transactions have any 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 Agreements is as under: <http://www.alembiclimited.com/AL-RpT%20policy.pdf> 18. corporate Governance: The Report on corporate governance as stipulated under Clause 49 of the Listing Agreements 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: During the year under review, 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. 506235 and on National Stock Exchange of India Limited (NSE) with scrip code of ALEMBICLTD. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 20I5-I6 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 I86 of the Companies Act, 20I3 are given as Annexure C. 22. Auditors: (a) Statutory Auditors: In compliance with the Companies (Audit and Auditors) Rules, 20I4, 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. 20I6-I7, as approved by the members at their 107th Annual General Meeting held on 13th August, 20I4. Further, pursuant to the requirement of Section I39 of the Companies Act, 20I3, 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. 20I5-I6. (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 3Ist March, 20I5, is annexed as Annexure D. (c) cost Auditors: The Board of Directors of the Company appointed M/s. Santosh Jejurkar & Associates, Cost Accountant, Vadodara as Cost Auditor for the F. Y. 20I5-I6 for conducting audit of the cost accounts maintained by the Company relating to Bulk Drugs and Real Estate business. (d) Internal Auditors: The Board of Directors has appointed CNK & Associates, LLp Chartered Accountants as Internal Auditors of the Company for the Financial Year 20I5-I6. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their report or by the Secretarial Auditor in their Secretarial Audit Report and hence no explanation or comments of the Board is required in this matter. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. 23. Directors' Responsibility Statement: In terms of the provisions of Companies Act, 20I3, the Directors state that: a) in preparation of the annual accounts for the financial year ended 3Ist March, 20I5, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the directors had selected such accounting policies as listed in Note Z-I 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 3Ist March, 20I5 and of the profit of the Company for that period. c) the directors had 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 had prepared the annual accounts on a going concern basis; and e) the directors had 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 had 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 3Ist March, 20I5. 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 I34(3)(a) of the Companies Act, 20I3 read with Rule I2(I) of the Companies (Management and Administration) Rules, 20I4, forms part of this report as Annexure E. 26. conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo: The information required under Section I34(3)(m) of the Companies Act, 20I3 read with Rule 8(3) of the Companies (Accounts) Rules, 20I4, is annexed herewith as Annexure F. 27. Particulars of employees and related disclosures: Disclosures pertaining to remuneration and others details as required under Section I97 (I2) of the Act read with Rule 5(I) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, is annexed herewith as Annexure G. In terms of the provisions of Section I97(I2) of the Companies Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, a statement showing the name and other particulars of the employees drawing remuneration in excess of the limits set out in the said rule 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 Regd. Off. Alembic Road, Vadodara - 390003 7th May, 2015 CIN: L26I00GJI907pLC000033 Tel: 0265-2280550 Fax: 0265-2282506 Website: www.alembiclimited.com Email: alembic.investors@alembic.co.in |