DIRECTORS REPORT The Members, Your Directors have pleasure in presenting their 43rd Annual Report on the working of the Company together with the 2. Transfer to Reserves: 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 of Rs. 3/- per share (i.e. 30%) on the equity shares of Rs. 10/- each for the year ended on 31st March, 2016 as against Rs. 3/- per share (i.e. 30%) for the year ended 31st March, 2015. 4. Management Discussion and Analysis Report: As per the provision of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report has been included and is enclosed as Annexure-A to this Report. 5. Operations and State of Affairs of the Company: The Company's Gross Sales including export incentives were Rs. 7,789.23 Lacs for the year under review as compared to Rs. 6,898.64 Lacs for the previous year. The Profit before interest, depreciation and tax was Rs. 1,947.20 Lacs for the year under review as compared to Rs. 2,016.24 Lacs for the previous year. The Company made a Net Profit of Rs. 1,241.82 Lacs for the year under review as compared to Net Profit of Rs. 1,299.43 Lacs for the previous year. 6. Corporate Governance: A Report on Corporate Governance along with a certificate from M/s. Samdani Shah & Associates, Practising Company Secretaries on compliance of the conditions of Corporate Governance pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report of the Company. 7. Directors: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Udit Amin, Director of the Company, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. 8. Key Managerial Personnel: Mr. Abhijit Joshi, Whole-time Director and CEO, Mr. Kaushik Shah, Dy. CFO and Mr. Charandeep Singh Saluja, Dy. Company Secretary are Key Managerial Personnel of the Company. 9. Meetings of the Board: Four (4) Board Meetings were held during the financial year ended 31st March, 2016. 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 provided in Section 149(6) of the Companies Act, 2013. 11. Performance Evaluation: Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 following were the Evaluation Criteria: (a) For Non-Executive & Independent Directors: - Knowledge and Skills - Professional conduct - Duties, Role and functions (b) For Executive Directors: - Performance as Member / Team Leader - Evaluating Business Opportunity and analysis of Risk Reward Scenarios - Key set Goals/KRA and achievements - Professional Conduct and Integrity - Sharing of Information with the Board The Directors expressed their satisfaction with the evaluation process. 12. Audit Committee: The Audit Committee comprises of Mr. Amit Goradia, Mr. V. H. Gandhi and Mr. Atul Patel. Mr. Amit Goradia is Chairman of the Audit Committee. All the Directors in Audit Committee are Non-Executive Independent Directors. The Committee inter alia reviews the Internal Control System, Scope of Internal Audit and Compliance of various regulations. The Committee also reviewed at length, the financial statements and approved the same before they were placed before the Board of Directors. 13. Vigil Mechanism: In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 ensure compliance with various policies, practices and statutes and keeping in view the organization's pace of growth and increasing complexity of operations. The Company's internal auditor team carries out extensive audits throughout the year across all functional areas, and submits its reports to the Audit Committee of the Board of Directors. 15. Corporate Social Responsibility: During the year, the Company along with other entities in the group, settled a Trust in the name of Alembic CSR Foundation and obtained requisite statutory approvals for enabling it to carry out CSR activities for the entire group. 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, 2016 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 Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 no materially significant related party transactions made by the Company which may have 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under: <http://www.paushak.com/pdf/RPT-Policy.pdf> 18. Fixed Deposits: During the year under review, the Company has not invited/accepted any deposits from public. 19. Loans, Guarantees or Investments: Details of Loans granted, Guarantees given and Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given as Annexure C. 20. Listing of Shares: The Equity Shares of the Company are listed on BSE Limited (BSE) with scrip code number 532742. The Company confirms that the annual listing fees to the BSE Limited for the financial year 2016-17 has been paid. 21. Auditors: (a) Statutory Auditors: M/s. Maloo Bhatt & Co, Chartered Accountants, Vadodara (Firm Registration No. 129572W) Statutory Auditors of the Company will be retiring at the conclusion of the ensuing Annual General Meeting. The Audit Committee and Board of Directors of the Company respectively at their meeting held on 15th April, 2016 proposed, subject to approval of the shareholders, the appointment of M/s. Maloo Bhatt & Co., Chartered Accountants, Vadodara as Statutory Auditors of the Company, to hold office from the conclusion of ensuing Annual General Meeting up to the conclusion of next Annual General Meeting of the Company. M/s. Maloo Bhatt & Co., Chartered Accountants, Vadodara have given their consent, confirming that their appointment, if made, would be in accordance with the provisions of Section 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. The Auditor's Report for financial year 2015-16 does not contain any qualification, reservation or adverse remark. The Auditor's Report is enclosed with the financial statements in this Annual Report. (b) Secretarial Auditors: The Board of Directors of the Company appointed M/s. Samdani Shah & Associates, Practising Company Secretaries, Vadodara as Secretarial Auditors for undertaking Secretarial Audit of the Company for the financial year 2016-17. The Secretarial Audit Report of M/s. Samdani Shah & Associates, Practising Company Secretaries for the financial year ended 31st March, 2016 is annexed as Annexure D. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. (c) Internal Auditors: The Board of Directors has appointed M/s. K. C. Mehta & Co., Chartered Accountants as Internal Auditors of the Company for the financial year 2016-17. 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. 22. Particulars of employees and related disclosures: Disclosures pertaining to remuneration and other details as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure E. During the year under review there is no employee in respect of whom information as per Section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is required to be given. 23. Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo: The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure F. 24. Extracts of Annual Return: The extract of Annual Return required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, forms part of this report as Annexure G. 25. 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 31st March, 2016. Further, it is hereby confirmed that there has been no change in the nature of business of the Company. 26. Directors' Responsibility Statement: In terms of the provisions of Companies Act, 2013, the Directors state that: (a) in preparation of the annual accounts for the financial year ended 31st March, 2016, 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 AA 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 31st March, 2016 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. 27. Details of Unclaimed Suspense Account: Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith as Annexure H. The voting rights on the equity shares which are transferred to Unclaimed Suspense Account shall remain frozen till the rightful owner of such equity shares claims the shares. On behalf of the Board of Directors, Chirayu R. Amin Chairman Date: 15th April, 2016 Place: Vadodara |