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Ambalal Sarabhai Enterprise Ltd.

BSE: 500009 | NSE: AMBASARABH | Series: NA | ISIN: INE432A01017 | SECTOR: Pharmaceuticals

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Ambalal Sarabhai Enterprise is not listed on NSE

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Directors hereby present their 40th Annual Report together with the Audited Financial Statements of the Company for the year ended March 31, 2018.

(Rs. lakh)

2017-18

2016-17

(Consolidated accounts)

Turnover (Net)

12562

13634

Other Income

2504

622

Total Income

15066

14256

Financial Cost

336

471

Depreciation

212

427

Profit/Loss before

extra ordinary Income

796

(1362)

Net Profit/(Loss) before taxation

796

(1362)

Net Profit (Loss)

110

(1911)

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

Consolidated Results :

The Company''s strategy of moving each business into a focused subsidiary has led to better growth and has seen success over the past few years. While the Company shows a slight decrease in sales, considering other income, the Company has shown a profit of Rs 7.96 crores. As a result of the IND AS the sales of our joint venture company are now not included in overall sales.

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 sub-division of the company are marketing speciality pharmaceutical products under the Sarabhai house mark across India

Asence Group

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

Asence is concentrating on its exports business along with its domestic sales and setting up a new finished dosage manufacturing plant which will be operational in the 1st quarter of the year 2019.

Suvik Hitek Pvt. Ltd.

Suvik, a wholly owned subsidiary of the Company, is manufacturing Pharmaceutical products and marketing various generic products and veterinary products in the domestic market.

Synbiotics Limited

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

Systronics (India ) Limited

It has two divisions Systronics & Telerad.

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

TELERAD is one of the oldest representatives of SONY in India promoting Broadcast and Professional Video/Audio products of various international companies.

Sarabhai M. Chemicals Ltd.

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

Joint Venture Companies:

Vovantis Laboratories Pvt. Ltd.

Vovantis, a joint venture company is a USFDA inspected effervescent product manufacturing company with increased focus on the USA and European markets.

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 (Listing Obligation and Disclosure Requirements) 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 owned 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 from 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, Mr. K. Mohandas, who retires by rotation and being eligible, offers himself for the appointment.

The three whole time directors namely Mr. Anil. H. Parekh, Ms. Chaula Shastri and Mr. Kartikeya. V. Sarabhai have been reappointed by the Board for a further period of three years. These resolutions are proposed for your approval in the ensuing AGM.

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)

The five year term of Independent directors will come to an end on 31st March 2019.The resolutions for reappointment for a further term of five years in respect of Mr. Ashwin P Hathi , Mr. Chandra Shekhar Bohra and Mr.G D Zalani are proposed for your approval .

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 Board of India (SEBI) under Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the 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 committees meetings, 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 issued 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 arm''s length basis such transactions entered into by the Company during the financial year did not attract the provisions of Section188 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 2017-18 , pursuant to section 177 of the Companies Act,213 and SEBI (LODR) Regulations, 2013 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 7 meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.

Extract of Annual Return:

Extract of Annual Return as provided under sub-section (3) of section 92of the Companies Act, 2013 in the prescribed form MGT-9 is annexed to this Report.

Policy on Director''s Appointment and Remuneration and other details:

The Company''s policy on director''s appointment and remuneration and other matters provided in Section 178(3) of the Act has been followed by Nomination and Remuneration Committee while recommending appointment of Directors 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 Systems and their 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 with 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 this report.

Risk Management:

The Audit committee of the Company is assigned the task to frame, implement and monitor the risk management plan for 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:

Since Company incurred losses for the last financial year (2016-17) and has no profits from its business operations during last three years, the provisions relating to corporate social Responsibility are not attracted.

Particulars of Employees:

The information required under Section 197 of the Act read with the 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 others 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 o section 197(14) of the Companies Act 2013:

No Whole time director of the company was in receipt of any remuneration or commission from the company''s holding or subsidiary companies during the financial year.

Details of Establishment of Vigil Mechanism:

The company has formulated a Whistle Blower Policy to establish a vigil mechanism for directors and employees of the company to report concerns about unethical behaviour, actual or suspended fraud or violation of company''s code of conduct policy.

Disclosure under Sexual Harrassment 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 Act.

Fraud Reporting:

There was no fraud reporting by the Auditors of the company under section 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:

As required under Section 134(5) of the Companies Act, 2013, we hereby state:

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

(ii)That the Director have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2018.

(iii)That the Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguard in the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv)That the Directors have prepared the annual accounts on a going concern basis.

(v)That the directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively.

(vi)That the Directors have devised proper system to ensure compliances with the provisions of all applicable laws and the systems are adequate and operating effectively.

Insurance:

Building, Plant and machinery and stocks, have been adequately insured. The company carries a risk for certain assets like goods in transit in respect of which any loss resulting from non-insurance is small because of fairly large drop in production and sales.

Statutory Auditors:

Pursuant to Section 139 of the Companies Act, 2013 and the Rules made there under, M/s Khandhar & Associates are appointed as Auditors by the member in their last AGM held on 29-9-2017 to hold office until the conclusion of the 44th Annual General Meeting, to be held in the year 2021-22.

Acknowledgement:

Your Directors would like to take this 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 the dedication and hard work put in by one and all members of Sarabhai Pariwar including workers.

For and on behalf on the Borad

Ahmedabad Kartikeya V Sarabhai

14-8-2018 Chairman

Director’s Report