Ambalal Sarabhai Enterprises Ltd Directors Report.

To

The Shareholders

The Directors hereby present their 41st Annual Report together with the Audited Financial Statements of the Company for the year ended March 31, 2019.

(Rs. lakh)
2018-19 2017-18
(Consolidated Accounts)
Turnover (Net) 15188 12562
Other Income 547 2504
Total Income 15735 15066
Financial Cost 325 336
Depreciation 210 212
Profit/Loss before extra ordinary Income 821 796
Net Profit/ (Loss) before Taxation 821 796
Net Profit (Loss) 410 110

Your directors regret their inability to recommend payment of any dividend.

Consolidated Results:

The Companys strategy of moving each business in a focused subsidiary has led to better growth and has been a success over the past few years. The Company has shown an overall increase in both turnover and net profit and the company strives to perform even better in the future.

Asence Group:

Asence Inc., a wholly – owned subsidiary of the Company, specializes in the supply of quality pharmaceutical preparation (Finished Dosage Forms and Active Pharmaceutical Ingredients) to the international markets.

Asence is developing novel products for the European and US markets using the infrastructure of the group companies.

Sarabhai Chemicals (India) Pvt. Ltd.:

Sarabhai Chemicals, a subsidiary Company, has made inroads in the domestic market with key strategic products in Oncology,Infertility and Uro-gynaec areas. These three subdivisions of the company are marketing speciality pharmaceutical products under the Sarabhai house mark across India.

Suvik Hitek Pvt. Ltd.:

Suvik, a wholly owned subsidiary of the Company, is manufacturing Pharmaceuticals products and marketing Generics and Veterinary products in the domestic market.

Synbiotics Limited:

Synbiotics is an USFDA inspected manufacturing Company in the fermentation area. It manufactures an antifungal active ingredient product which has an expanding global market.

Systronics (India) Limited:

Systronics, a subsidiary company, has two divisions Systronics & Telerad.

SYSTRONICS is a leading manufacturer of Analytical and Test & Measuring instruments distributing its products across India.

TELERAD is one of the oldest representatives of SONY in India promoting Broadcast and Professional Video/ Audio products of various International Companies across India

Sarabhai M. Chemicals Ltd.:

Sarabhai M Chemicals Ltd, a wholly owned subsidiary company will start its Vitamin C coated products manufacturing in August 2019.

Joint Venture Companies:

Vovantis Laboratories Pvt. Ltd.:

Vovantis, a joint venture Company, is an USFDA inspected effervescent product manufacturing company with increased focus on the USA and European markets. It has recently set up a state of the art manufacturing facility to expand its business.

Cosara Diagnostics Pvt. Ltd.:

Cosara Diagnostics, is a new Company promoted by Synbiotics Limited in partnership with Co-diagnostics of USA to manufacture and market molecular diagnostics products globally.

Corporate Governance:

Pursuant to provisions of SEBI (LODR), Regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate regarding Compliance of Conditions of Corporate Governance are made part of the Annual Report.

Subsidiaries:

The Company has 8 subsidiaries and two joint venture and one associate company. Their performance is integrated in the consolidated accounts.

Consolidated Financial Statement:

In compliance of the Accounting Standard AS-21 on Consolidated Financial Statement, the Consolidated Financial Statements, which form part of the Annual Report and Accounts, are attached herewith.

Directors and Key Managerial Personnel:

Pursuant to the provisions of Section 152 of the Companies act, 2013, Ms. Chaula Shastri, who retires by rotation and being eligible, offers herself for the appointment.

Declaration by Independent Directors:

The Independent Directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies act, 2013 stating that they meet the criteria of independence as provided in sub-section (6).

Annual Evaluation:

The Board of Directors has carried out an annual Evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities & Exchange Board of India (SEBI) under Listing Regulation.

The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of the criteria such as Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of the Committees Meeting, etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.In addition, the Chairman was also evaluated on the key aspects of his role.

Particulars of Loans, Guarantees or Investments:

Information regarding loans, guarantees and Investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the financial statements.

Related Party Transactions:

Since all the related party transactions are carried out in the ordinary course of business on arms length basis such transactions entered into by the Company during the financial year did not attract the provisions of Section 188 of the Companies Act, 2013. There is no material related party transaction. The detail to be disclosed in Form AOC-2 is attached.

During the year 2018-19, pursuant to Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 all RPTs were placed before Audit Committee for its prior/ omnibus approval.

Material Changes and Commitments:

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.

Number of Meetings of the Board:

There were five Meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.

Extract of Annual Return:

Extract of Annual Report is available on the website of Company www.ase.life

Policy of Directors Appointment and Remuneration and other details:

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been followed by Nomination and Remuneration Committee or Key Managerial Personnel. They have fixed criteria for appointment of directors and Key Managerial Persons. Every year their performance is evaluated by the Committee and accordingly suitable recommendations are made.

Internal Financial Control System and its adequacy:

The Company has an Internal Control System commensurate with size, scale and complexity of its operations. The Company has appointed an Independent Internal Auditor who carries out Internal Auditing works according to policies and rules framed to monitor and control financial transactions within the Company and submits his report at every quarter which is put before the Audit Committee for their perusal.

Audit Committee:

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report which forms part of this report.

Auditors Report and Secretarial Auditors Report:

Auditors Report does not contain any qualifications, reservations or adverse remarks. Report of the Secretarial Auditor is given as an annexure which forms part of it.

Regarding Penalty imposed by BSE, the Company will put its stand before BSE and a Hearing will be held with BSE in this regard, the positive result of which is expected.

Regarding regulation 29(2) and 29(3) of SEBI (LODR) regulation 2015 the matter has been resolved

Risk Management:

The Audit Committee of the Company is assigned the task to frame, implement and monitor the risk management plan of the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.

Corporate Social Responsibility (CSR):

Since Company had incurred loss in the immediately preceding financial year (2017-18) and has no profits from its business operations during the last three years, the provisions relating to CSR are not attracted.

Particular of Employees:

The information required U/s. 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014 will be provided upon request in terms of section 136 of the Act, the reports and accounts are being sent to the members and other excluding the information on employees particulars, which is available for inspection by members at the registered office of the Company during 2:00 p.m. to 4:00 p.m. on working days of the Company upto the date of AGM. If any Member is interested in obtaining a copy thereof, he/she may write to Secretarial Department of the Company. There is no employee drawing salary in excess of limit prescribed in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Fixed Deposits:

The Company has not accepted any fixed deposit during the year neither there was any unpaid/unclaimed amount of deposit at the beginning of the year or at the end of the year.

Details of Significant Orders passed by Regulators or Courts:

There is no significant or material order passed by any regulators or courts during the financial year.

Disclosure pursuant to section 197 (14) of the Companies Act 2013

No Whole time director of the Company was in receipt of any remuneration/ commission from the companys holding/ subsidiary companies during the financial year.

Details of Establishment of Vigil Mechanism:

The Company has formulated Whistle Blower policy to establish a vigil mechanism for directors and employees of the Company to report concerns about unethical behavior, actual or suspended fraud or violation of Companys code of conduct policy.

Details under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has established Internal Complaints Committee to redress the complaints received from any woman employee of the Company as required under the provisions of the Act.

Fraud Reporting:

There was no fraud reporting by the Auditors of the Company u/s. 143(12) of the Companies Act, 2013 to the Audit Committee or the Board of Directors during the year under review.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo required to be given, are given in the Annexure to this Report in the prescribed format.

Directors Responsibility Statement:

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts for the year ended 31.03.2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b) The Directors 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 as on31.03.2019 and of the profit of the Company for the year ended on that date.

c) The Directors 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) The Directors have prepared the annual accounts on a ‘going concern basis.

e) The Company has laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively.

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

Insurance:

Building, Plant and Machinery and Stocks, have been adequately insured.

Statutory Auditors:

Pursuant to section 139 of the Companies Act, 2013 and the Rules made there under, M/s. Khandhar & Associates, Chartered Accountants, (Firm Registration No. 118940w), are appointed as Auditors by the Members in the AGM held on 29.09.2017 to hold office until the conclusion of 44th Annual General Meeting, to be held in the year 2022.

Acknowledgement:

Your Directors would like to take opportunity to express their deep sense of gratitude to the Banks, Government Authorities, Customers and Shareholders for their continuous guidance and support. Further they would also like to place on record their sincere appreciation for dedication and hard work put in by one and all Members of Sarabhai Pariwar including workers.

For and on behalf on the Borad
Date : 29-5-2019 Kartikeya V Sarabhai
Place : Ahmedabad Chairman

ANNEXURE TO THE DIRECTORS REPORT

Disclosure of additional particulars as required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, forming part of the Directors Report for the year ended 31.03.2019.

A. Conservation of Energy &

B. Technology absorption

During the year under report, there was no production activities carried out in the Company and therefore, details are not required to be given.

C. Foreign Exchange Earnings and Outgo

(i) The Company is making all efforts to boost up the exports of its various products.

(ii) Total Foreign Exchange Earned and Used:

Rs. Lakh
For exchange earned Nil
Foreign exchange used 8.10