alembic pharma share price Directors report

Dear Members,

Your Directors have pleasure in presenting their 13^th Annual Report together with the Audited Statement of Accounts for the year ended 31^st March, 2023.

1. Operations and State of Affairs of the Company:

(H In Crores)

Particulars	Standalone Basis		Consolidated Basis
	2023	2022	2023	2022
For the year ended 31st March
Revenue from operations	5,149.00	5,035.41	5,652.62	5,305.79
Other Income	3.55	51.14	2.74	50.46
Profit for the year before Interest, Depreciation and Tax Less:	667.88	959.95	711.10	924.62
Interest (net)	49.00	17.02	50.17	17.73
Depreciation	272.95	284.92	275.43	286.78
Provision for Taxation	(0.79)	114.45	12.60	104.46
Share of (Profit)/Loss of Associates and Joint Venture	-	-	30.92	(5.28)
Net Profit for the year	346.73	543.55	341.99	520.94
Retained Earnings - Balance brought forward	2,632.89	2,440.83	2,554.39	2,384.94
Conversion of subsidiary into wholly owned subsidiary	-	(76.30)	-	(76.30)
Dividend paid on Equity Shares during the year	(196.56)	(275.19)	(196.56)	(275.19)
Transfer from General Reserve	868.63	-	868.63	-
Balance carried forward	3,651.68	2,632.89	3,568.44	2,554.39

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

(Rs in crores)

Particulars		2023	2022
Formulations	India Branded Business	2,063.50	1,926.45
	International Business	2,423.61	2,440.82
api	India Business	250.17	192.57
	International Business	915.34	745.95
Total		5,652.62	5,305.79

The Company has prepared the Standalone and Consolidated Financial Statements in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013 (the "Act").

2. I mpairment Review of the Capital Work-inProgress and Scheme of Arrangement:

The Company has provided detailed disclosure at note no. 27 to the Standalone Financial Statements about the Impairment Review of the Capital Work-in-Progress.

The Board also approved a Scheme of Arrangement between the Company and its shareholders, for reorganization of General Reserve of the Company, inter alia, providing for utilization of the amounts standing to the credit of the General Reserve, pursuant to the provisions of Section 230 and other applicable provisions of the Companies Act, 2013 read with applicable rules made thereunder ("Scheme") with the Appointed Date of 1^st January, 2023.

The Scheme is subject to the approval of National Stock Exchange of India Limited ("NSE"), BSE Limited ("BSE") and Securities and Exchange Board of India Limited, the shareholders and creditors of the Company and other statutory and regulatory authorities, as may be required, including that of National Company Law Tribunal, Ahmedabad Bench.

3. Dividend:

The Board of Directors at their meeting held on 5^th May, 2023 has recommended Dividend of H8/- (400%) per equity share having face value of H2/- each for the financial year 2022-23 as against the Dividend of H10/- (500%) per equity share having face value of H2/- each for the financial year 2021-22.

4. Management Discussion and Analysis Report:

T he 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") forms part of this Annual Report. Certain Statements in the said report may be forward-looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

5. USFDA Audit:

0 ur Injectable and Opthalmic Facility (F-3) at Karkhadi was inspected by USFDA with 2 minor observations. As on date, the Establishment Inspection Report (EIR) is in place for all our USFDA facilities, except for F-4 facility at Jarod.

6. Financing:

T uring the year under review, the Company had issued commercial papers (CPs) to meet working capital requirements. As on 31^st March, 2023, the outstanding amount of CPs was H100 Crore.

The other financing requirement of the Company has been met through working capital loans from multiple banks.

7. Subsidiaries, Associates and Joint Venture:

T statement containing the salient features of the financial statements of subsidiary/associate/ joint venture companies, as per Section 129(3) of the Act, is part of the consolidated financial statements.

1 n 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.aiembicpharmaceuticais.com Further, as per fourth proviso of the said section, audited annuai accounts of each of the subsidiary companies have aiso been piaced on the website of the Company. Sharehoiders interested in obtaining a physicai copy of the audited annuai accounts of the subsidiary companies may write to the Company Secretary requesting for the same.

8. Directors:

The Board of Directors of the Company based on the recommendation of Nomination and Remuneration Committee appointed Mr. Jai Diwanji (DIN: 00910410) as an Additionai Director designated as Independent Director of the Company w.e.f. 5^th May, 2023.

I n accordance with the provisions of Section 152 and other appiicabie provisions, if any, of the Act and the ArticLes of Association of the Company, Mr. Pranav Amin (DIN: 00245099), Managing Director of the Company, wiii retire by rotation at the ensuing Annuai Generai Meeting and being eiigibie offers himseif for re-appointment.

9. Key Managerial Personnel:

T r. Chirayu Amin, Chairman & Chief Executive Officer, Mr. Pranav Amin, Managing Director, Mr. Shaunak Amin, Managing Director, Mr. R. K. Baheti, Director - Finance & Chief Financiai Officer and Ms. Manisha Saraf, Company Secretary are Key Manageriai Personnei of the Company.

T uring the year under review, Mr. Charandeep Singh Saiuja resigned as Company Secretary & CompLiance Officer of the Company w.e.f 21^st March, 2023. Ms. Manisha Saraf was appointed as Company Secretary and CompLiance Officer of the Company w.e.f 1^st Aprii, 2023.

10. Meetings of the Board:

S even (7) Board Meetings were heid during the financiai year ended 31^st March, 2023. The detaiis 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.

11. Independent Directors:

T he Company has received deciarations/ confirmations from aii the Independent Directors of the Company as required under Section 149(7) of the Act read with RuLe 6 of the Companies (Appointment and Quaiification of Directors) RuLes, 2014 and ReguLation 25(8) of the SEBI Listing ReguLations, 2015.

12. Performance Evaluation:

S ursuant to the provisions of the Act, SEBI Listing ReguLations, 2015 and Nomination and Remuneration PoLicy of the Company, the Nomination and Remuneration Committee ("NRC") and the Board has carried out the annuai performance evaiuation of the Board, its Committees and individuai Directors by way of individual and coLLective feedback from Directors. The Independent Directors have aiso carried out annuai 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.

13. Audit Committee:

The Audit Committee consists of Independent Directors with Mr. Paresh Saraiya as Chairman, Mr. K. G. Ramanathan, Mr. Pranav Parikh, Dr. Archana Hingorani and Mr. Ashok Kumar Barat 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.

14. Vigil Mechanism/Whistle Blower Policy:

T ursuant to the provisions of Section 177(9) & (10) of the Act and Regulation 22 of the SEBI Listing Regulations, 2015, a Vigil Mechanism/Whistle Blower Policy for directors and employees to report genuine concerns has been established. The same is uploaded on the website of the Company and the web-link as required under SEBI Listing Regulations, 2015 is as under: https://alembicpharmaceuticals.com/ wp-content/uploads/2022/02/05APL-Whistle- Blower-Policy.pdf

15. Internal Control Systems:

The Companys internal control procedures which includes internal financial controls, ensure compliance with various policies, practices and statutes and keeping in view the organizations 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.

16. Corporate Social Responsibility:

Tlembic Group has been proactively carrying out CSR activities since more than fifty years. Alembic Group has established, nurtured and promoted various Non-Profit Organizations focusing on three major areas - Education, Healthcare and Rural Development.

I n 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 A.

17. Policy on Nomination and Remuneration:

I n 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 Companys website. The web-link as required under the Act is as under:

https://alembicpharmaceuticals.com/ wp-content/uploads/2022/02/Nominafion-and-

Remuneration-Policy.pdf

T he 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) Tolicy for appointment and removal of Director, KMP and Senior Management

4) Tolicy relating to the Remuneration for the Managerial Personnel, KMP, Senior Management Personnel & other employees

5) Temuneration to Non-Executive/ Independent Director

18. Dividend Distribution Policy:

I n 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 Companys website. The web-iink as required under SEBI Listing ReguLations, 2015 is as under: https://aiembicpharmaceuticais.com/ wp-content/upioads/2023/06/APL-Dividend- Distribution-Poiicy.pdf

19. Related Party Transactions:

R eiated party transactions that were entered into during the financial year were on arms Length basis and were in ordinary course of business. There were no related party transactions which couid be considered material. Hence, there is no information to be provided as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

There are no materiaiiy significant related party transactions made by the Company which may have potential conflict with the interest of the Company.

The Board has approved a policy for related party transactions which has been uploaded on the Companys website. The web-iink as required under SEBI Listing Regulations, 2015 is as under: https://aiembicpharmaceuticais.com/ wp-content/upLoads/2022/02/RPT-Poiicy-l.pdf

20. Corporate Governance Report:

The Report on Corporate Governance as required 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 attached to the Report on Corporate Governance.

21. 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.

22. Listing of securities:

The equity shares of the Company are Listed on BSE and NSE with security ID/symboL of APLLTD. The ISIN for equity shares is INE901L01018.

The Company confirms that the annual Listing fees to both the stock exchanges for the financial year 2023-24 have been paid.

23. Loans, Guarantees or Investments:

R uring the year under review, the Company has not granted any Loans and given any Guarantees failing within the purview of the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. The details of Investments made under the said provisions are provided in Note No. 5 of Notes to Standalone Financial Statements of the Company.

24. Auditors:

a) Statutory Auditors:

I n compliance with the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. K C Mehta & CO LLP, Chartered Accountants having Firm Registration No. 106237W/W100829 has been appointed as Statutory Auditors of the Company by the members at their 10^th Annual General Meeting heid on 22^nd July, 2020 to hold office for a term of five (5) years i.e. tiii the conclusion of Annual General Meeting for the financial year 2024-25.

Rhe Statutory Auditors in their Reports to the members, have issued their Audit Reports with Qualified opinion as mentioned under Basis for Qualified Opinion of their Reports.

The Company has provided the Statement on Impact of Audit Qualifications on Standalone Financial Statements and Consolidated Financial Statements as Annexure B to this Report which shall be treated as Boards response.

T any other large and reputed listed companies have, in the past, followed similar accounting treatment in such situations.

b) Secretarial Auditors:

T he 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, Practicing Company Secretaries for the financial year 2022-23, is annexed herewith as Annexure C.

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

T uring the year under review, the Company has complied with the applicable provisions of the Secretarial Standards.

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.

The Board of Directors appointed M/s. Diwanji & Co., Cost & Management Accountants as Cost Auditors for conducting audit of the cost records maintained by the Company relating to Bulk Drugs and Formulations for the financial year 2023-24.

d) Internal Auditors:

T he Board of Directors appointed

M/s. Sharp & Tannan Associates, Chartered

Accountants as Internal Auditors of the Company for the financial year 2023-24.

25. Risk Management:

The Company has constituted a Risk Management Committee and formulated Enterprise Risk Management Policy which functions as a guiding tool in fulfilling the managements 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.

26. 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 31^st March, 2023. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

27. Annual Return:

A copy of the Annual Return as required under Section 92(3) of the Act has been placed on the Companys website. The web-link as required under Section 134(3)(a) of the Act is as under: https://alembicpharmaceuticals.com/ notices-correspondences-disclosures/

28. 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 D.

29. 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 E.

D statement showing the names and particulars of the employees falling within the purview of Rule 5(2) 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.

30. Other Disclosures:

a) Dhe Company has not accepted/renewed any deposits. Further, there has been no default in repayment of deposits or interest thereon on unclaimed deposits.

b) Dhe 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) D either the Managing Directors nor the Whole-time Directors of the Company have received any remuneration or commission from any of its subsidiaries.

d) D o significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

e) D o fraud has been reported by the Auditors to the Audit Committee or the Board.

f) Dhe Company has in place a Policy on prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & 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.

g) D either application was made nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

h) N o settlements have been done with banks or financial institutions.

31. 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) i n preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) t hey 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 the 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) t hey have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

On behalf of the Board of Directors,

Chirayu Amin

Chairman & Chief Executive Officer

(DIN: 00242549)

Date: 5th May, 2023

Place: London

Alembic Pharmaceuticals Limited

CIN: L24230GJ2010PLC061123

Regd. Office: Alembic Road, Vadodara - 390 003

Tel: +91 265 6637000

Website: www.alembicpharmaceuticals.com

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