Dear Members,
Your Directors have pleasure in presenting their 116th Annual Report
together with the Audited Statement of Accounts for the year ended on 31st
March, 2023.
1 Operations and State of Affairs of the Company:
(` In lakhs)
| Particulars |
For the Year ended |
|
2023 |
2022 |
| Profit for the year before Interest, Depreciation and Tax |
9,151 |
10,201 |
| Adjusting therefrom: |
|
|
| Interest (net) |
16 |
23 |
| Depreciation |
636 |
450 |
| Provision for deferred tax liabilities |
248 |
21 |
| Provision for current tax |
325 |
1,135 |
| Profit for the year |
7,927 |
8,571 |
| Add: |
|
|
| Balance brought forward from previous year |
24,593 |
18,555 |
| Total amount available for Appropriations |
35,520 |
27,126 |
| Other Appropriations |
5 |
20 |
| Less: |
|
|
| Dividend paid on Equity Shares during the year |
4622 |
514 |
| Transfer to General Reserve |
- |
2,000 |
| Balance carried forward to next year's accounts |
27,893 |
24,593 |
The Company has prepared the Standalone and Consolidated Financial Statements in
accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under
Section 133 of the Companies Act, 2013 ("Act").
2 Transfer to Reserve:
During the year, no amount was transferred to any of the reserves of the Company.
3 Dividend:
The Board of Directors at their meeting held on 12th May, 2023 has
recommended Dividend of ` 2.20/- (i.e. 110%) per equity share having face value ` 2/- each
for the financial year ended 31st March, 2023 as against ` 1.80/- (i.e. 90%)
per equity share having face value ` 2/- each for the financial year ended 31st
March, 2022.
4 Management Discussion and Analysis Report:
The Management Discussion and Analysis Report as required under Regulation 34 read with
Schedule V of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015") is
annexed herewith 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 Subsidiaries, Associates and Joint Ventures:
A statement containing the salient features of the financial statements of subsidiary
and associate companies, as per Section 129(3) of the Act, is part of the consolidated
financial statements.
In accordance with third proviso of Section 136(1) of the Act, the Annual Report of the
Company, containing therein its standalone and the consolidated financial statements has
been placed on the website of the Company, www.alembiclimited.com. Further, as per
fourth proviso of the said section, audited annual accounts of the subsidiary company has
also been placed on the website of the Company. Shareholders interested in obtaining a
physical copy of the audited annual accounts of the subsidiary company may write to the
Company Secretary requesting for the same.
6 Directors:
In accordance with the provisions of Section 152 and other applicable provisions, if
any, of the Act and the Articles of Association of the Company, Mr. Abhijit Joshi (DIN:
06568584), Non-Executive Director of the Company, will retire by rotation at the ensuing
Annual General Meeting ("AGM") and being eligible, offers himself for
re-appointment.
The first term of Mr. Mayank Amin (DIN: 03455164) as an Independent Director, will end
on 14th May, 2024. Based on the recommendation of Nomination and Remuneration
Committee ("NRC"), the Board of Directors at its meeting held on 12th
May, 2023 has approved his re-appointment as an Independent Director of the Company for a
second term of 5 (five) consecutive years w.e.f. 15 th May, 2024, subject to
the approval of the members by way of special resolution at the ensuing AGM.
The Board of Directors of the Company based on the recommendation of NRC has considered
the appointment of Dr. Girish Hirode (DIN: 10145777), as an Independent Director of the
Company for a term of (5) five consecutive years w.e.f. approval of his appointment at the
ensuing AGM.
7 Key Managerial Personnel:
Mrs. Malika Amin, Managing Director and CEO, Mr. Rasesh Shah, CFO and Mr. Drigesh
Mittal, Company Secretary are Key Managerial Personnel of the Company.
8 Meetings of the Board:
Four (4) Board Meetings were held during the financial year ended 31st
March, 2023. The details of the Board Meetings with regard to their dates and attendance
of each of the Directors thereat have been provided in the Corporate Governance Report.
9 Independent Directors:
The Company has received declarations / confirmations from all the Independent
Directors of the Company as required under Section 149(7) of the Act read with Rule 6 of
the Companies (Appointment and Qualifications of Directors)
Rules, 2014 and Regulation 25(8) of the SEBI Listing Regulations, 2015.
10 Performance Evaluation:
Pursuant to the provisions of the Act, SEBI Listing Regulations, 2015 and Nomination
and Remuneration Policy of the Company, the NRC and the Board has carried out the annual
performance evaluation of the Board, its Committees and individual Directors by way of
individual and collective feedback from Directors. The Independent Directors have also
carried out annual performance evaluation of the Chairperson, the non-independent
directors and the Board as a whole. Structured questionnaires covering the evaluation
criteria laid down by the NRC, prepared after taking into consideration inputs received
from Directors, were used for carrying out the evaluation process.
The Directors expressed their satisfaction with the evaluation process.
11 Audit Committee:
The Audit Committee consists of Independent Directors with Mr. C. P. Buch as Chairman
and Mr. Sameer Khera and Mr. Mayank Amin as members. The Committee inter alia reviews the
Internal Control System, Reports of Internal Auditors, Key Audit Matters presented by the
Statutory Auditors and compliance of various regulations. The Committee also reviews the
financial results and financial statements before they are placed before the Board of
Directors.
12 Vigil Mechanism/Whistle Blower Policy:
Pursuant to the provisions of Section 177(9) & (10) of the Act and the applicable
provisions of SEBI Listing Regulations, 2015, a Vigil Mechanism or Whistle Blower Policy
for directors and employees to report genuine concerns has been established. The same is
also uploaded on the website of the Company and the web-link as required under SEBI
Listing Regulations, 2015 is as under:
https://www.alembiclimited.com/policy/AL-Whistle%20Blower%20Policy.pdf
13 Internal Control Systems:
The Company's internal control procedures which includes internal financial controls,
ensure compliance with various policies, practices and statutes and keeping in view the
organization's pace of growth and increasing complexity of operations. The internal
auditors' team carries out extensive audits throughout the year across all locations and
across all functional areas and submits its reports to the Audit Committee.
14 Corporate Social Responsibility:
Alembic Group has been proactively carrying out CSR activities since more than fifty
years. Alembic Group has established, nurtured and promoted various Non-Profit
Organisations focusing on three major areas – Education, Healthcare and Rural
Development.
In compliance with requirements of Section 135 of the Act, 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 31 st March, 2023 in the
format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014
is annexed herewith as Annexure B.
15 Policy on Nomination and Remuneration:
In compliance with the requirements of Section 178 of the Act and Regulation 19 of the
SEBI Listing Regulations, 2015, the Company has laid down a Nomination and Remuneration
Policy which has been uploaded on the Company's website. The web-link as required under
the Act is as under: https://www.alembiclimited.com/policy/AL-NRC%20Policy.pdf
The salient features of the NRC Policy are as under:
1) Setting out the objectives of the Policy.
2) Definitions for the purposes of the Policy.
3) Policy for appointment and removal of Director, KMP and Senior Management.
4) Policy relating to the Remuneration for the Managerial Personnel, KMP, Senior
Management Personnel & other employees.
5) Remuneration to Non-Executive / Independent
Director.
16 Dividend Distribution Policy:
In compliance with the requirements of Regulation 43A of the SEBI Listing Regulations,
2015, the Company has laid down a Dividend Distribution Policy, which has been uploaded on
the Company's website. The web-link as required under SEBI Listing Regulations, 2015 is as
under: https://www.alembiclimited.com/policy/AL-Dividend%20
Distribution%20Policy.pdf
17 Related Party Transactions:
Related party transactions entered into during the financial year were on arm's length
basis and were in ordinary course of business. In accordance with the requisite approval
obtained the Company has entered into transactions with the related party as mentioned in
Note No. 34(D) of Standalone Financial Statements. However, there are no related party
transactions made by the Company which may have potential conflict with the interest of
the Company.
Necessary disclosure in form AOC-2 with respect to the applicable transactions, is
given in Annexure C of the Board's
Report. Save and except the above, the Company has not entered into any other
arrangement/ transaction with related parties which could be considered material in
accordance with the Company's Policy on Related Party Transactions, read with the SEBI
Listing Regulations, 2015, during the year under review.
The Board has approved a policy for related party transactions which has been uploaded
on the Company's website. The web-link as required under SEBI Listing Regulations, 2015 is
as under: https://www.alembiclimited.com/policy/AL-RPT%20Policy. pdf
18 Corporate Governance Report:
The Report on Corporate Governance as stipulated under Regulation 34 read with Schedule
V of the SEBI Listing Regulations, 2015 forms part of this Annual Report.
The certificate from M/s. Samdani Shah & Kabra, Practicing
Company Secretaries required as per the aforesaid Schedule
V, confirming compliance with the conditions of Corporate
Governance as stipulated under the SEBI Listing Regulations, 2015 is annexed to the
Report on Corporate Governance.
19 Business Responsibility & Sustainability Report: The Business
Responsibility & Sustainability Report as required under Regulation 34 of the SEBI
Listing Regulations, 2015, forms part of this Annual Report.
20 Listing of shares:
The equity shares of the Company are listed on BSE Limited (BSE) and National Stock
Exchange of India Limited (NSE) with security ID/symbol of ALEMBICLTD. The ISIN for equity
shares is INE426A01027. The Company confirms that the annual listing fees to both the
stock exchanges for the financial year 2023-24 have been paid.
21 Loans, Guarantee or Investments:
During the year under review, the Company has granted Loans, given Guarantees and made
investments in compliance with the provisions of Section 186 of the Act read with
Companies (Meetings of Board and its Powers) Rules, 2014. The details of the same are
provided in the Standalone Financial Statements as follows: loans and advances - Note No.
13 & 14; Corporate Guarantee – Para III (a) of Annexure "A" to the
Independent Auditor's Report; and Investments - Note No. 6 & 9.
22 Auditors:
(a) Statutory Auditors:
In compliance with the provisions of Section 139 of the Act read with the Companies
(Audit and Auditors) Rules, 2014,
M/s. CNK & Associates LLP, Chartered Accountants, having Firm Registration No.
101961W/W-100036 were appointed as Statutory Auditors of the Company by the Members at
their 115th Annual General Meeting (AGM) held on 22nd
September, 2022 to hold office for a second term of five (5) years i.e. till the
conclusion of 120th AGM for the financial year ended 2026-27.
The Auditor's Report on the Standalone Financial Statements for financial year 2022-23
does not contain any qualification, reservation or adverse remark.
Due to an audit qualification in the Auditor's Report of the
Company's associate entity, the Auditor's Report on the
Consolidated Financial Statements for financial year 2022-23 has been issued with
qualified opinion as mentioned under ‘Basis for Qualified Opinion' of their Report.
The Company has provided the Statement on Impact of Audit Qualifications on Consolidated
Financial Statements as Annexure D to this Report which shall be treated as Board's
response.
The Auditor's Report is enclosed with the financial statements in this Annual Report.
(b) Secretarial Auditors:
The Board of Directors appointed M/s. Samdani Shah & Kabra,
Practising Company Secretaries, to conduct Secretarial Audit for the financial year
2023-24.
The Secretarial Audit Report of M/s. Samdani Shah & Kabra, Practising Company
Secretaries for the financial year ended 2022-23, is annexed as Annexure E.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark.
During the year under review, the Company has complied with all the applicable
provisions of the Secretarial Standards issued by the Institute of Company Secretaries of
India.
(c) Cost Auditors:
The provisions of Section 148(1) of the Act with regard to maintenance of cost records
are applicable to the Company and the Company has made and maintained the cost records as
specified therein.
Pursuant to Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, the Company
will be required to get its
Cost records audited by a Cost Auditor for the financial year 2023-24.
The Board of Directors appointed M/s. Santosh Jejurkar
& Associates, Cost & Management Accountants as Cost Auditors for conducting
audit of the cost accounts maintained by the Company relating to Bulk Drugs and Real
Estate Division for the financial year 2023-24.
(d) Internal Auditors:
The Board of Directors appointed M/s. Sharp & Tannan Associates, Chartered
Accountants as Internal Auditors of the Company for the financial year 2023-24.
23 Risk Management:
The Company has constituted a Risk Management Committee and formulated Risk Management
Policy which functions as a guiding tool in fulfilling the management's responsibility
towards risk management. Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuing basis. These are
discussed at the meetings of the Risk Management Committee, Audit Committee and the Board
of Directors of the Company.
24 Material Changes:
There have been no material changes and commitments affecting the financial position of
the Company since the close of financial year ended 31 st March, 2023. Further,
it is hereby confirmed that there has been no change in the nature of business of the
Company.
25 Annual Return:
A copy of Annual Return as required under Section 92(3) of the Act has been placed on
the website of the Company. The web-link as required under the Section 134(3)(a) of the
Act is as under: https://www.alembiclimited.com/#services
26 Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and
Outgo:
The information required under Section 134(3)(m) of the Act read with Rule 8(3) of the
Companies (Accounts) Rules, 2014, is annexed herewith as Annexure F.
27 Particulars of employees and related disclosures:
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is annexed herewith as Annexure G.
A statement showing the names and particulars of the employees falling within the
purview of Rules 5(2) and 5(3) of the aforesaid Rules are provided in the Annual Report.
The Annual Report is being sent to the members of the Company excluding the aforesaid
information. The said information is available for inspection at the Registered Office of
the Company during working hours and the same will be furnished on request in writing to
the members.
28 Other Disclosures:
(a) The Company has not invited/accepted any deposits from public during the period
under review. Further, there has been no default in repayment of deposits or interest
thereon on unclaimed deposits.
(b) The Company does not have any scheme of provision of money for the purchase of its
own shares by employees or by trustees for the benefit of employees.
(c) The Managing Director of the Company has not received any remuneration or
commission from its subsidiary.
(d) No fraud has been reported by the Auditors to the Audit Committee or the Board.
(e) No application was made nor is any proceeding pending under the Insolvency and
Bankruptcy Code, 2016.
(f) No settlements have been done with banks or financial institutions.
(g) No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the going concern status and Company's
operations in future.
(h) The Company has in place a policy on prevention of Sexual Harassment in line with
the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 and has constituted the Internal Complaints Committee to redress
complaints received regarding sexual harassment. During the year, no complaint was
received by the Company.
29 Directors' Responsibility Statement:
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its
knowledge and ability, confirm that:
(a) in 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 them 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 at the end of the financial year and of the profit
of
Company for that period;
(c) they have taken proper and sufficient care for 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 accounts 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; and
(f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
For and on behalf of the Board of Directors,
Sd/-
Chirayu Amin
Chairman (DIN: 00242549)
Registered Office:
Alembic Road, Vadodara - 390 003 CIN: L26100GJ1907PLC000033 Tel: +91 265 6637300 Web:
www.alembiclimited.com Email ID: alembic.investors@alembic.co.in Date: 12th
May, 2023 Place: London
ANNEXURE C
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of
the Companies (Accounts) Rules, 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by the
company with related parties referred to in sub section (1) of section 188 of the
Companies Act, 2013 including certain arm's length transactions under third proviso
thereto.
1. Details of contracts or arrangements or transactions not at Arm's length basis: Not
Applicable
2. Details of material contracts or arrangements or transactions at Arm's length basis.
| Name of Related Party and nature of relationship |
Nature of contract / arrangement / transaction |
Amount Paid as Advance, If any |
Duration of contract / arrangement / transaction |
Salient terms of the contracts or arrangements Or transactions
including the value, if any |
Date (s) of Approval by the Board, If any |
| Alembic Pharmaceuticals Limited (APL) – Associate Company |
(a) Supply / job work / purchase of goods including active pharmaceutical ingredients
(‘API'), excipients and spent solvents |
Nil |
Ongoing and as per approval |
Transactions to be carried out on arms- length basis. Maximum aggregate value of the
transactions: ` 63 Cr. p.a. |
Audit Committee and Board of Directors: 10th August, 2022. |
|
(b) Providing various premises on leave and license / lease basis |
|
|
Details of the transactions carried out during the year are provided at note no. 33 D
to the Standalone Financial Statements |
Members' approval: 20th September, 2022 |
|
(c) Reimbursement of expenses |
|
|
|
|
|
(d) Receipt of dividend from investment in securities of APL |
|
Not Applicable |
Not Applicable |
|
| Shreno Limited – Other Related Parties |
(a) Buying or selling or leasing immovable property |
Nil |
Ongoing and as per approval |
Transactions to be carried out on arms- length basis. |
Audit Committee and Board of Directors: 10th August, 2022. |
|
(b) Entering into agreements for Transfer of Development Rights / Floor Space Index
(FSI) |
|
|
Maximum aggregate value of the transactions: ` 30 Cr. p.a. |
|
|
(c) Entering into Agreements for joint development of projects on revenue sharing /
area sharing / profit sharing basis |
` 6.72 Cr. |
|
Details of the transactions carried out during the year are provided at note no. 33 D
to the Standalone Financial Statements |
Members' approval: 20th September, 2022 |
|
(d) Granting of loans, advances and providing guarantee in relation to the above (b)
& (c) |
|
|
|
|
|
(e) Entering into Project Management Consultancy Agreements |
Nil |
|
|
|
|
(f) Availing or rendering of services |
|
|
|
|
|
(g) Reimbursement of expenses |
|
|
|
|
For and on behalf of the Board of Directors,
|
Chirayu Amin |
| Date: 12th May, 2023 |
Chairman |
| Place: London |
(DIN: 00242549) |
ANNEXURE D
Statement on Impact of Audit Qualifications (for audit report with modified opinion)
submitted along-with Annual Audited
Financial Results - Consolidated.
Statement on Impact of Audit Qualifications for the Financial Year ended 31 st
March, 2023
[See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations, 2016]
Rs. in Lakhs
I
| Sl. No. |
Particulars |
Audited Figures (as reported before adjusting for qualifications) |
Adjusted Figures (audited figures after adjusting for
qualifications) |
| 1 |
Total income |
19,151 |
19,151 |
| 2 |
Total Expenditure |
9,410 |
9,410 |
| 3 |
Profit Before Exceptional Item and Tax |
9,741 |
9,741 |
| 4 |
Exceptional Item |
1,061 |
1,061 |
| 5 |
Net Profit after tax for the Period |
8,062 |
8,062 |
| 6 |
Share of Associate's Profit/(Loss) |
11,003 |
(18,269) |
| 7 |
Net Profit/(Loss) after tax and Share of Associate's Profit/ (Loss) |
19,065 |
(10,207) |
| 8 |
Earnings Per Share (in Rs) |
7.42 |
(3.97) |
| 9 |
Total Assets |
2,20,458 |
2,20,458 |
| 10 |
Total Liabilities |
12,655 |
12,655 |
| 11 |
Net Worth |
2,07,803 |
2,07,803 |
| 12 |
Any other financial item(s) (as felt appropriate management) |
by the No |
No |
II. Audit Qualification (each audit qualification separately):
a. Details of Audit Qualification:
The Statutory Auditors of Alembic Pharmaceuticals Limited (hereinafter referred to as
‘APL'), an Associate of the Holding Company, have mentioned the following Audit
Qualification in their Audit Report dated 05 th May, 2023:
"We refer to Note No. 3b to the consolidated financial statements/results
regarding Draft Scheme of Arrangement ("Scheme") approved by the Board of
Directors of Holding Company in its meeting held on March 2, 2023, involving
reorganization / utilisation of General Reserve, between the Holding Company and its
shareholders with effect from the appointed date i.e. January 1, 2023 which is pending
before regulatory authorities. Further, the Holding Company has withdrawn INR 1,025.66
crores from General Reserve and transferred the same to the Statement of Profit and Loss
for the year ended March 31, 2023 under the head "Exceptional Items". We are of
the opinion that the said treatment does not meet the criteria of "Income" under
Indian Accounting Standards ("Ind AS") and therefore, the same should not be
recognised in the Statement of Profit and Loss for the year. Had this transfer not been
effected, Profit after tax for the year and Retained Earnings as at March 31, 2023 would
have been reduced by INR 1,025.66 crores each, General Reserve as at March 31, 2023 would
have been increased by INR 1,025.66 crores and Basic and Diluted Earnings per Share for
the year ended March 31, 2023 would have been lower by INR 52.18 on consolidated
basis."
The figures stated above, are adjusted for the above referred qualification, in
proportion to the Company's holding in APL.
b. Type of Audit Qualification: Qualified Opinion
c. Frequency of qualification: Appeared first time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management's Views:
The response filed by the management of APL, in its submission with the Stock
Exchanges, is re-produced as under:
The Board of the Company has approved Draft Scheme of Arrangement between the Company
and its shareholders ("Scheme"), which provides for reorganization / utilization
of General Reserve of the Company, pursuant to the provisions of Section 230 and other
applicable provisions of the Companies Act, 2013 read with applicable rules made
thereunder (‘the Act'), with the Appointed Date of 1st January, 2023 With
reference to Note No. 3b, an amount equivalent to the amount of write-off and impairment
of assets / Identified CWIP (net of deferred tax amount) has been transferred from General
Reserve to the Statement of Profit and Loss for the financial year ended on 31st
March, 2023 in order to maintain the accumulated unconditional distributable profits that
existed before giving effect of write-off / impairment of Identified CWIP, in a manner
permitted under the Act, and in alignment with intention specified in the Scheme.
It is pertinent to note that the transfer of General Reserve to the Statement of Profit
and Loss, as aforesaid, does not have any impact on the networth of Company and it is a
mode of utilization of the General Reserve of the Company.
The management has considered it appropriate to give the above accounting treatment
together with giving effect to the provisions of the Scheme in the financial results for
the financial year ended on 31 st March, 2023, pending approval from Hon'ble
NCLT, given that appointed date (January 1, 2023 ) falls within the FY 2022-23 and that
there is high probability of effectiveness of the Scheme and to avoid reopening /
restating the financial statements post receipt of all requisite approvals.
Said treatment gives an appropriate presentation of financial results given that
Identified CWIP was built-up over the years and its debit to P&L in the current year
does not reflect true financial result for the current year and as such also, said
treatment provides better / true reflection of the financial results of the current
financial year. e. For Audit Qualification(s) where the impact is not quantified by the
auditor: Not Applicable
III. Signatories:
Malika Amin, Managing Director & CEO
(Place: London)
Rasesh Shah, CFO
(Place: Vadodara)
C.P. Buch, Chairman of Audit Committee
(Place: Vadodara)
Himanshu Kishnadwala, Partner -Statutory Auditors
(Place: Mumbai) Date: 12th May, 2023
