Information Memorandum 14Sept2011 IM_APL.pdf · EPS Earnings per equity share Equity Shares Equity shares of the Company of Rs.2/- each unless otherwise specified in the context thereof

Alembic Pharmaceuticals Limited Information Memorandum

1

INFORMATION MEMORANDUM

ALEMBIC PHARMACEUTICALS LIMITED

Registered Office: Alembic Road, Vadodara, Gujarat – 390 003 Phone: 0265-2282550 Fax: 0265 - 2282506

Website: www.alembic-india.com

Contact person: Mr. R.K. Baheti, Director-Finance & Company Secretary Phone: 0265-2282550/3007973 Fax: 0265 – 2282506

Email : [email protected] (We were incorporated as a Public Limited Company on June 16, 2010 and received the Certificate of Commencement of Business on July 1, 2010. The company changed its name from Alembic Pharma Limited to Alembic Pharmaceuticals Limited and the Registrar of Companies, Gujarat has approved the change of name and issued a fresh certificate of incorporation due to change of name on March 12, 2011.)

INFORMATION MEMORANDUM FOR LISTING OF 18,85,15,914 EQUITY SHARES OF RS. 2/- EACH FULLY PAID UP.

NO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS INFORMATION MEMORANDUM.

GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest in the equity shares of Alembic Pharmaceuticals Limited unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the Equity Shares of Alembic Pharmaceuticals Limited. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved.


2

ABSOLUTE RESPONSIBILITY OF ALEMBIC PHARMACEUTICALS LIMITED Alembic Pharmaceuticals Limited having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to Alembic Pharmaceuticals Limited, which is material, that the information contained in this Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Equity Shares of Alembic Pharmaceuticals Limited are proposed to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

The Company has submitted this Information Memorandum with BSE and NSE and the same has been made available on the Company’s website viz. www.alembic-india.com. The Information Memorandum would also be made available on the website of BSE (www.bseindia.com) and NSE (www.nseindia.com).

SHARE TRANSFER AGENT Link Intime India Private Limited

(Unit: Alembic Pharmaceuticals Limited)

B-102 & 103, SHANGRILA COMPLEX, FIRST FLOOR, OPP. HDFC BANK,

NEAR RADHAKRISHNA CHAR RASTA, AKOTA, VADODARA-390020

Tel:(0265) 2356573, 2356794

Fax:(0265) 2356791 Email: [email protected]


3

TABLE OF CONTENTS

Sr. No. Particulars Page No. 1. SECTION I – GENERAL DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS 4 CERTAIN CONVENTIONS; USE OF MARKET DATA 6 FORWARD LOOKING STATEMENTS 7

2. SECTION II – RISK FACTORS RISK FACTORS 8

3. SECTION III- INTRODUCTION SUMMARY 13 GENERAL INFORMATION 13 CAPITAL STRUCTURE 15 SALIENT FEATURES OF THE SCHEME OF ARRANGEMENT 23 STATEMENT OF TAX BENEFITS 45

4. SECTION IV – ABOUT ALEMBIC PHARMACEUTICALS LIMITED

OVERVIEW OF PHARMA INDUSTRY 53 BUSINESS 53 HISTORY 54 MANAGEMENT 56 PROMOTER 66 CURRENCY OF PRESENTATION 68 DIVIDEND POLICY 69

5. SECTION V – FINANCIAL INFORMATION FINANCIAL INFORMATION OF THE COMPANY 70 MANAGEMENT DISCUSSIONS AND ANALYSIS 118

GROUP COMPANIES FINANCIAL AND OTHER INFORMATION 121 KEY INVESTMENTS 126

6. SECTION VI - LEGAL & OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 127 GOVERNMENT APPROVALS 127

7. SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES

REGULATORY AND STATUTORY DISCLOSURES 128 ARTICLES OF ASSOCIATION 131

8. SECTION VIII – OTHER INFORMATION DOCUMENTS FOR INSPECTION 142 DECLARATION 142


4

SECTION – I GENERAL

DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS

Term Description

Act/Companies Act Companies Act, 1956 and amendments thereto

“Alembic” or “Company” or “Our Company” or Resulting Company or Alembic Pharmaceuticals Limited or APL

Alembic Pharmaceuticals Limited, a Public Limited Company incorporated under the Provisions of the Companies Act, 1956

“We” or “us” and “our” Refers to Alembic Pharmaceuticals Limited

Articles/Articles of Association Articles of Association of Alembic Pharmaceuticals Limited Auditors The Statutory Auditors of Alembic Pharmaceuticals Limited Board of

Directors/Board/Directors The Board of Directors of Alembic Pharmaceuticals Limited

BSE Bombay Stock Exchange Limited

CDSL Central Depository Services (India) Limited

Current Year April 1, 2010 to March 31, 2011

Demerged Company Alembic Limited, a Public Limited Company registered under the Provisions of the I n d i a n Companies Act VI of 1882.

DSE Designated Stock Exchange

EPS Earnings per equity share

Equity Shares Equity shares of the Company of Rs.2/- each unless otherwise specified in the context thereof

Financial year/fiscal/FY The twelve months ended 31st March , unless otherwise stated

HUF Hindu Undivided Family

Information Memorandum This document filed with the Stock Exchanges is known as and referred to as the Information Memorandum

I.T. Act The Income-tax Act, 1961, as amended from time to time, except as stated otherwise


5

Term Description

Memorandum/Memorandum of Association

The Memorandum of Association of Alembic Pharmaceuticals Limited

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

RBI Reserve Bank of India

Registered office of our Company Alembic Pharmaceuticals Limited, Alembic Road, Vadodara – 390 003, Gujarat, India

Record Date 14th April, 2011

ROC Registrar of Companies, Gujarat

Scheme Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 between Alembic Limited and Alembic Pharmaceuticals Limited and their respective shareholders and creditors sanctioned by the High Court of Judicature at Ahmedabad vide its order dated 24/1/2011.

SEBI The Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992 as amended from time to time

SEBI Regulations Extant Regulations issued by SEBI, constituted under the SEBI Act (as amended), called Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, including instructions and clarifications issued by SEBI from time to time.

Stock Exchanges BSE and NSE


6

CERTAIN CONVENTIONS; USE OF MARKET DATA Unless stated otherwise, the financial data in this Information Memorandum is derived from our audited financial statements for twelve months period i.e. from 1st April, 2010 to 31st March, 2011. Our current financial year commenced on 1st April, 2010 and ended on Ma r c h 3 1 , 2 0 1 1 . In this Information Memorandum, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. For definitions, please see the section titled “Definitions, Abbreviations and Industry Related Terms”. All references to “India” contained in this Information Memorandum are to the Republic of India. All references to “Rupees” or “Rs.” are to Indian Rupees, the legal currency of the Republic of India. Unless stated otherwise, industry data used throughout this Information Memorandum has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we bel ieve that industry data used in this Information Memorandum is reliable, it has not been independently verified. The information included in this Information Memorandum about the various other companies is based on their respective Annual Reports and information made available by the respective companies. The Equity shares of Alembic Pharmaceuticals Limited are not listed on any Stock Exchange.


7

FORWARD LOOKING STATEMENTS We have included statements in this Information Memorandum, that contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions that are “forward-looking statements”. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward- looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others:

General economic and business conditions in India and other countries; Regulatory changes and our ability to respond to them; Our ability to successfully implement our strategy, our growth and expansion plans

and technological changes; Changes in the value of the Rupee and other currency changes; Changes in Indian or international interest rates; Changes in laws and regulations in India; Changes in political conditions in India; Changes in the foreign exchange control regulations in India. Our exposure to market risks, general economic and political conditions in India

which have an impact on our business activities and investments; The monetary and fiscal policies in India, inflation, deflation, unanticipated

turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally;

Changes in domestic and foreign laws, regulations and taxes and changes in competition in our Industry.

For further discussion of factors that could cause our actual results to differ, see the section titled “Risk Factors”. By their nature, certain risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. We do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.


8

SECTION-II

RISK FACTORS

This is only a summary. Investors should read the following summary with the risk factors mentioned and the more detailed information about us and our financial statements included elsewhere in this Information Memorandum. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implication of any of the risks described in this section. An investment in equity shares involves a high degree of risk, you should carefully consider all of the information in this Information Memorandum, including the risks and uncertainties described below. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your investment. Internal Risk Factors Internal Risk Factors The Pharmaceutical Undertaking transferred to the Company includes International Business. If governmental regulations affecting our business change, we may need to incur additional costs to comply with the governmental regulations. There may be additional cost for complying with government regulations since the International Business Unit is supplying the product in the United States, Europe, and other countries. There are stringent requirements and audit mechanism regulating the manufacturing, research, development, testing and safety of pharmaceutical products on a on-going basis. There may be changes in the regulations regulating our existing and future products and we shall have to comply with the changed regulations from time to time. The time frame in obtaining required clearances from regulatory authorities in any country can not be predicted. Our products require extensive clinical trials and other testing and government reviews and approvals before we can market these products. All these uncertainties may affect the operations of the International Business of the Company. In case of International Business, if we do not successfully licence/commercialise our products under development, or if our licencing/commercialisation is delayed, it will harm our operating results. The operating results of the Company will depend upon our ability to successfully develop and license out the new products being developed by R&D Activities. We must develop, test and manufacture new products, which must meet regulatory standards and receive requisite regulatory approvals. The decisions by regulatory authorities regarding whether and when to approve our drug applications, the speed with which regulatory authorizations, pricing approvals and product launches may be achieved and competitive developments could affect the availability or commercial potential of our products. The development and commercialization process is both time consuming and costly.


9

The Pharmaceutical Undertaking transferred to the Company includes Research and Development Activities. The Research and Development Activities involve high risk as the costs are certain and the result uncertain: The Research and Development Activities will have high risk & high return compared to manufacturing & marketing of pharmaceutical products business. The Resource requirements in the R&D Activities also can be difficult to predict. However, given the right resource base and focus, the R& D Activities offer strong potential. Delays in any part of the R&D activity, our inability to obtain necessary regulatory approvals for our products or failure of a product to be successful at any stage and therefore not realized could harm our operating results. If we are unable to comply with the conditions of our licences and approvals, our licences may be cancelled resulting in an adverse affect on our business. In respect of the Pharmaceutical Undertaking, the de-merged company has obtained licenses from several regulatory authorities for the operations of our business. There are a number of conditions in these licences, which require us to comply with. Any non compliance may result in the cancellation of the relevant licenses which may adversely affect our business. If we fail to comply with laws relating to environment, employees, health and safety and other laws that regulate manufacturing activities, research and clinical trials or face litigation related to any of these, our costs may increase and our revenues may decrease. The Pharmaceutical Undertaking transferred to the Company includes manufacturing of Formulations, APIs, R&D, Clinical trials etc. There are stringent regulatory requirements relating to environment, employees, health & safety etc. For this purpose, we may incur substantial costs in order to comply with requirements of environmental laws and regulations. In addition, we may discover currently unknown environmental problems or conditions. We are subject to significant national and state environmental laws and regulations which govern the discharge, emission, storage, handling and disposal of a variety of substances that may be used in or result from our operations. Environmental laws and regulations are not as extensive in India as they are in other countries such as the United States. They have, however, been increasing in stringency and it is possible that they will become significantly more stringent in the future. We are also subject to laws and regulations governing relationships with employees in such areas as minimum wage and maximum working hours, overtime, working conditions, hiring and terminating of employees, contract labour and work permits. Furthermore, the success of our business is contingent upon, among other things, receipt of all required licences, permits and authorisations, including local land use permits, building and zoning permits and environmental, health and safety permits. Changes or concessions required by regulatory authorities could also involve significant costs and delay or prevent completion of the construction or opening or operations of expansions, renewals of existing facilities etc. In case of any injury or loss of limb or life or damage to any limb of any volunteer in case of any clinical trial conducted by us, we may be required to compensate the volunteer for the same. Even when in case of any injury or loss of limb or life or damage to any limb of any volunteer in case of any clinical trial conducted by us due to the fault of the volunteer and


10

not our fault or due to medicine administered, we may be sued for compensation by the volunteer for the same. Even when in case of any injury or loss of limb or life or damage to any limb of any volunteer in case of any clinical trial conducted by Contract Research Contractor due to the fault of the Contract Research Contractor and not our fault or due to medicine administered, we may be sued for compensation by the volunteer for the same. The insurance taken may not sufficient to cover damages in case loss of life, loss of limb, etc. The same is also applicable in case of manufacturing activities. Promoters and promoter group hold 74.13% of equity shares in the Company. Therefore, the promoters and promoter group control the Company and, if they take actions that are not in your best interests, it may harm the value of your investment. Consequent to demerger, the promoters(viz. Alembic Limited, Mr. Chirayu Amin and Mrs. Malika Amin) together with family members and promoter group/other connected persons as defined under the Companies Act, 1956 (or Companies Act) and/or under SEBI Regulations, in the aggregate, would own 74.13% of the issued equity shares of the Company as on the record date. As a result, these people, acting together, have the ability to exercise significant control over most matters requiring approval of the shareholders, including the election and removal of directors and significant corporate transactions. This control by the promoters and promoters group could delay, defer or prevent a change in control of the Company, impede a merger, consolidation, takeover or other business combination involving the Company, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company. The Company’s operations are dependent on our key personnel. If we are not able to continue to attract and retain qualified employees, our operations could be harmed. The Company’s operations are dependent on members of scientific, technical, marketing and management executives. The qualified personnel are difficult to be attracted and retained. We may not be able to continuously attract qualified personnel or retain such personnel, or retain them on acceptable terms, given the demand for such personnel among pharmaceutical and healthcare companies. If we are not able to attract and retain qualified personnel, our results of operations may be adversely affected. If there is a change in accounting or tax policies applicable to the Company, it may affect our reported results of operations. The Company’s reported results may be significantly affected by accounting or tax policies promulgated from time to time by relevant authorities. Some of the tax incentives may be phased out progressively and may cease to be available to us in near future. The implications of change in accounting or tax policies can not be assessed at this time and hence there is a likely uncertainty on these aspects. We are involved in litigation proceedings and it cannot be assured that we will prevail in these proceedings We are defendants in legal proceedings incidental to our business and operations. These legal proceedings are pending at different levels of adjudication before various courts and


11

tribunals. Should any new developments arise, such as a change in Indian law or rulings against us by appellate courts or tribunals, we may need to make provisions in our financial statements, which could adversely impact our business results. Furthermore, if significant claims are determined against us and we are required to pay all or a portion of the disputed amounts, it could have an adverse effect on our business and profitability. Our total contingent liabilities is Rs.8.16 Crores as at 31st December, 2010. If any of these contingent liabilities crystallizes, our profitability may be adversely affected. External Risk Factors Downturns or disruptions in the securities markets could reduce transaction volumes, and could cause a decline in the business and impact our profitability. The share price of the Company may be affected directly by national and global economic and political conditions, broad trends in business and finance, disruptions to the securities markets and changes in volume and price levels of securities and future transactions. Future sales by shareholders could cause the price of equity shares to decline. As there is no lock-in provision on the equity shares after listing except for shares held by Alembic Limited and some shares by the promoters, sale of substantial number of equity shares could lead to fall in market prices of the equity shares of the Company. After this listing, the prices of our Company’s equity shares may be volatile, or an active trading market for our Company’s equity shares may not develop. There has been no public market for our Company’s equity shares till now, and no history of public disclosure of information relating to our Company and/or our operating companies, and the prices of our Company’s equity shares may fluctuate after this listing. There can be no assurance that an active trading market for the equity shares will develop or be sustained after this listing. Our Company’s share price could be volatile. A significant change in the Indian Government or its economic liberalization and deregulation policies could disrupt our business. The Company is an Indian company and a substantial part of our operations are conducted, and most of our assets are located, in India. The Indian Government has traditionally exercised and continues to exercise a dominant influence over many aspects of the economy. Its economic policies have had and could continue to have a significant effect on private-sector entities, including the Company, and on market conditions and prices of Indian securities. It can not be ascertained that in future government will continue with the same economic policies or the same pace of change. A significant change in government policies could harm business and economic conditions in India in general as well as our business, our future financial performance and the price of our Shares. If regional hostilities or terrorist attacks increase, our business could suffer and the price of our equity shares could go down.


12

Terrorist attacks and such other acts of violence or terrorism may negatively affect the Indian markets where our equity shares trade and also adversely affect the worldwide financial markets. India has from time to time experienced social and civil unrest and hostilities with neighbouring countries. If such type of hostilities and tensions recur, they could lead to political or economic instability in India and harm our business, our future financial performance and the price of our equity shares.


13

SECTION-III INTRODUCTION

SUMMARY

You should read the following summary together with the risk factors and the more detailed information about us and our financial results included elsewhere in this Information Memorandum. Industry and Business Overview The Company is engaged in manufacturing and marketing of various pharmaceutical products (Formulations and APIs) in domestic and international markets. The Company is also engaged in R&D Activities and clinical trials. The Indian Pharma Industry has been resilient to the economic challenges. Our Country is holding its ground in the midst of the global financial crisis. There is considerable scope for collaborative activities in Pharma Industry in India, since it can offer several strengths to the international Pharma community. Please refer to the section “Risk Factors” and “About Alembic Pharmaceuticals Limited” for more details.

GENERAL INFORMATION Alembic Pharmaceuticals Limited (ALEMBIC) (the “Resulting Company”) was incorporated on June 16, 2010, under the Companies Act, 1956 and received the Certificate of Commencement of business on July 1, 2010. Registered Office of the Company Alembic Pharmaceuticals Limited Alembic Road, Vadodara - 390003, Gujarat, India Tel : 0265-2282550 Fax: 0265 –2282506 Corporate Identity Number: U24230GJ2010PLC061123 Address of Registrar of Companies: Registrar of Companies, Gujarat ROC Bhavan, Opp. Rupal Park, Near Ankur Bus Stand, Naranpura, Ahmedabad – 380 013, Gujarat


14

Board of Directors Board of Directors as on the date of filing of the Information Memorandum Name Category

1. Mr. Chirayu Amin Chairman & Managing Director

2. Mr. R. K. Baheti Director-Finance & Company Secretary

3. Mr. Pranav Amin Director & President-International Business

4. Mr. K.G. Ramanathan Independent Director

5. Mr. Pranav Parikh Independent Director

6. Mr. Paresh Saraiya Independent Director

7. Mr. Milin Mehta Independent Director

For further details of the Board of Directors of the Company, please see the section titled “Management”.

Company Secretary and Compliance Officer: Mr. R.K. Baheti Alembic Pharmaceuticals Limited Alembic Road, Vadodara-390 003, Gujarat Tele No.(0265) 2280550/3007973 Fax No.(0265) 2282506 Email: [email protected]

Auditors: M/s. K.S. Aiyar & Company Chartered Accountants Laxmi Estate No.F-07/08, Shakti Mills Lane, Off Dr. E. Moses Road, Mahalaxmi, Mumbai-400 011

Share Transfer Agent: Link Intime India Private Limited (Contact Person: Mr. Alpesh Gandhi) (Unit: Alembic Pharmaceuticals Limited)


15

B-102 & 103, Shangrila Complex, First Floor, Opp. Hdfc Bank, Near Radhakrishna Char Rasta, Akota, Vadodara-390020 Tel:(0265) 2356573, 2356794 Fax:(0265) 2356791 Email: [email protected]

CAPITAL STRUCTURE

Share Capital

Upon issue and allotment of shares pursuant to the Scheme, the Share Capital of the Company is as follows:

Authorised Share Capital Pre Demerger (Rs.)

Post Demerger (Rs.)

6,00,00,000 Equity Shares of Rs.2/- each 12,00,00,000 -

20,00,00,000 Equity Shares of Rs.2/- each

40,00,00,000

Issued, Subscribed & Paid-up Capital


11,00,00,000

-

18,85,15,914 Equity Shares of Rs.2/- each 37,70,31,828

The initial Authorised Share Capital of the Company at the time of incorporation was Rs.12,00,00,000/- (Rupees Twelve Crores only), which was increased to Rs.40,00,00,000/- as per the court sanctioned scheme of Arrangement. The initial Issued, Subscribed & Paid-up Share Capital was Rs.11,00,00,000/-(Rupees Eleven Crores only) which was subscribed by Alembic Limited.


16

SHAREHOLDING PATTERN OF THE COMPANY BEFORE AND AFTER ALLOTMENT OF EQUITY SHARES PURSUANT TO THE SCHEME

PRE- DEMERGER POST DEMERGER

Cate

gory

code

Category of

Shareholder

No of Equity

Shares

% No. of Equity

Shares

%

(A) Shareholding of

Promoter and

Promoter

Group

1 Indian

(a) Individuals/

Hindu Undivided

Family

6

0

1,34,16,641

7.12

(b) Central

Government/

State

Government(s)

-

-

-

-

(c) Bodies Corporate

5,49,99,994

100.00

12,63,36,184

67.01

(d) Financial

Institutions/

Banks

-

-

-

-

(e) Any

Others(Specify)

-

-

-

-

Sub

Total(A)(1)

5,50,00,000

100.0

0

13,97,52,825

74.13

2 Foreign

a Individuals (Non-

Residents

Individuals/

Foreign

Individuals)

-

-

-

-

b Bodies Corporate


17

- - - -

c Institutions

-

-

-

-

d Any

Others(Specify)

-

-

-

-

Sub

Total(A)(2)

-

-

-

-

Total

Shareholding of

Promoter

and Promoter

Group (A)=

(A)(1)+(A)(2)

5,50,00,000

100.0

0

13,97,52,825

74.13

(B) Public

shareholding

1 Institutions

(a) Mutual Funds/

UTI

-

-

4,37,798 0.23

(b) Financial

Institutions /

Banks

-

-

12,92,409

0.69

(c) Central

Government/

State

Government(s)

-

-

-

-

(d) Venture Capital

Funds

-

-

-

-

(e) Insurance

Companies

-

-

-

-

(f) Foreign

Institutional

Investors

-

-

1,29,24,749

6.86

(g) Foreign Venture

Capital Investors

-

-

-

-

(h) Any Other - -


18

(Trusts) - -

Sub-Total

(B)(1)

-

-

1,46,54,956 7.77

B 2 Non-

institutions

(a) Bodies Corporate

-

-

30,15,411

1.60

(b) Individuals

I

Individuals –

i. Individual

shareholders

holding nominal

share capital up

to Rs 1 lakh

-

-

2,50,51,024 13.29

II ii. Individual

shareholders

holding nominal

share capital in

excess of Rs. 1

lakh.

-

-

40,75,769

2.16

(c) Any Other

(specify)

(c-i) Clearing

Members

-

-

10,17,736

0.54

Non Resident

Indians (NRI)

(Repat)

-

-

6,64,786

0.35

Non Resident

Indians (NRI)

(Non-repat)

-

-

2,39,334

0.13

Overseas Body

Corporate

-

-

750

0.00

Trusts

-

-

43,323

0.02


19

Sub-Total

(B)(2)

-

-

3,41,08,133

18.09

(B)

Total

Public

Shareholding

(B)=

(B)(1)+(B)(2)

-

-

4,87,63,089

25.87

TOTAL (A)+(B)

5,50,00,000

100.00

18,85,15,914

100.00

(C) Shares held by

Custodians and

against which

Depository

Receipts have

been issued

- -

- -

GRAND TOTAL

(A)+(B)+(C)

5,50,00,000

100.0

0

18,85,15,914

100.00

List of the persons/entities comprising Promoter Group Sr. No. Name of Shareholder No. of Shares %

1 Alembic Limited 5,49,99,994 29.18

3 Shreno Ltd 1,83,68,780 9.74

3 Whitefield Chemtech Private Ltd 1,82,85,230 9.70

4 Sierra Investments Limited 1,67,92,070 8.91

5 Nirayu Pvt Limited 1,62,13,755 8.60

6 Chirayu Ramanbhai Amin 32,73,015 1.74

7 Malika Chirayu Amin 29,12,310 1.56


20

8 Yera Ramanbhai Amin 10,80,915 0.57

9 Pranav Chirayu Amin 10,09,800 0.54

10 Udit Chirayu Amin 10,06,980 0.53

11 Vidyanidhi Trust 8,09,550 0.43

12 Ninochaka A Kothari 6,32,900 0.34

13 Shaunak Chirayu Amin 6,14,940 0.33



16 Shaunak Chirayu Amin 3,92,040 0.21

17 Sierra Investments Limited 3,75,600 0.20

18 Shreya Rupendra Mukharji 3,39,860 0.18

19 Arogyavardhini Society 2,80,950 0.15


21 Anup N Kothari 1,90,000 0.10

22 Jyoti Suresh Patel 1,63,800 0.09



25 Utkarsh Vidyakendra 1,46,250 0.08

26 Malika Chirayu Amin 80,820 0.04

27 Ujjwal Vidyalaya 62,250 0.03

28 Samira Pranav Amin 30,000 0.01

29 Ranvir Pranav Amin 30,000 0.01

30 Naintara Shaunak Amin 30,000 0.01

31 Dr Babubhai R Patel 14,205 0

32 Malika Chirayu Amin 12,600 0

33 Viramya Packlight Limited 900 0


21

34 Paushak Limited 855 0

35 Chirayu Amin* 1 0

36 Malika Amin* 1 0

37 Pranav Amin* 1 0

38 Shaunak Amin* 1 0

39 Udit Amin* 1 0

40 R.K. Baheti* 1 0

Total 13,97,52,825 74.13

* Beneficiary interest held by Alembic Limited. Holding shares on behalf of Alembic Limited to ensure requirement of minimum 7 members at the time of incorporation.

The above 74.13% of Promoter Group includes 29.18% of Alembic Limited, the demerged company and the balance 44.95% owned by the Promoters and Promoters Group of Alembic Limited.

The list of top 10 shareholders of the Company and the number of Equity Shares held by them.

a) Top ten shareholders on the date of filing the Information Memorandum

List of Top 10 Shareholders of the Company and number of Equity Shares held by them:

Sr. No.

Name of Shareholder No. of Shares

%

1 Alembic Limited 5,49,99,994 29.18

2 Shreno Limited 1,83,68,780 9.74

3 Whitefield Chemtech Private Limited 1,82,85,230 9.70

4 Sierra Investments Limited 1,71,67,670 9.11

5 Nirayu Pvt Limited 1,62,13,755 8.60

6 Lotus Global Investments Limited 60,07,770 3.19


22

7 Elara India Opportunities Fund Limited 45,61,385 2.42


9 Malika Chirayu Amin 29,12,310 1.54

10 Bajaj Allianz Life Insurance Co. Ltd. 11,35,552 0.60

TOTAL 14,29,25,461 75.82

b) Top ten shareholders 10 days prior to the date of the Information Memorandum and allotment of shares pursuant to the Scheme of Arrangement

Sr. No. Name of Shareholders No. of Equity Shares

%

1. Alembic Pharmaceuticals Limited 5,49,99,994 100.00

2. Chirayu Amin* 1 0

3. Malika Amin* 1 0

4. Pranav Amin* 1 0

5. Shaunak Amin* 1 0

6. Udit Amin* 1 0

7. R.K. Baheti* 1 0

Total 5,50,00,000 100.00

* Holding shares on behalf of Alembic Limited to ensure requirement of minimum 7 members.

c) Top ten shareholders of the Company on the date of incorporation.

Sr. No. Name of Shareholders No. of Equity Shares

%

1. Alembic Pharmaceuticals Limited 5,49,99,994 100.00

2. Chirayu Amin* 1 0

3. Malika Amin* 1 0

4. Pranav Amin* 1 0

5. Shaunak Amin* 1 0

6. Udit Amin* 1 0

7. R.K. Baheti* 1 0

Total 5,50,00,000 100.00


23

* Beneficiary interest held by Alembic Limited. Holding shares on behalf of Alembic Limited to ensure requirement of minimum 7 members.

Notes:

1) The Company, its directors, its promoters have not entered into any buy-back, stand by or similar arrangements to purchase equity shares of the Company from any person. 2) There shall be only one denomination for the Equity Shares of the Company, subject to applicable regulations and Company shall comply with such disclosure and accounting norms specified by SEBI, from time to time. 3) The Company has approximately 48,682 members as on the date of filing this Information Memorandum. SALIENT FEATURES OF THE SCHEME OF ARRANGEMENT

The salient features of the Scheme of Arrangement are as under: 1. PREAMBLE

A. DESCRIPTION OF COMPANIES

(a) The Demerged Company viz. Alembic Limited (AL) was incorporated on 30/07/1907, under the name and style Alembic Chemical Works Company Limited under the provisions of the Indian Companies Act, VI of 1882. The name of the Company was changed to Alembic Limited and the Demerged Company obtained a new incorporation certificate on 31st May, 1999. The Equity Shares of AL are presently listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Demerged Company is presently engaged in manufacturing and marketing of fermentation and chemistry based Active Pharmaceuticals Ingredients (API) at Vadodara Plant and is also engaged in power generation through its co-generation power plant and through wind mills. The Company is also engaged in leasing out real estate and holding certain strategic and long term Investments. It is also engaged in manufacturing, marketing and trading of branded & generic Formulations and Active Pharmaceuticals Ingredients (API) at other manufacturing facilities. It is also engaged in research & development activities.

(b) The Resulting Company viz. Alembic Pharma Limited (APL) was incorporated on 16/06/2010 under the name and style “Alembic Pharma Limited”. The main object of APL is to manufacture, sale, purchase, deal in various pharmaceuticals products, bulk drugs, medicines, chemicals, raw materials, intermediates for various pharmaceutical products and to engage in business of healthcares, life-sciences, research and development, contract manufacturing in India and/or abroad.

B. RATIONALE AND OBJECTIVE OF THE SCHEME OF ARRANGEMENT

a) Alembic Limited is a leading pharmaceutical company with a global vision. Alembic is into the top bracket of Indian pharmaceutical companies with many of its brands amongst the top five in their respective categories. With such competitive advantages, the Company is uniquely poised in its pursuit of being amongst the largest Indian pharmaceutical companies. Its business comprises


24

of (i) manufacturing, marketing and trading of formulations & bulk drugs (Active Pharmaceutical Ingredients or APIs) and R & D Activities (the Pharmaceutical Undertaking), (ii) manufacture of predominantly fermentation and chemistry based bulk drugs (APIs) at its Vadodara Undertaking and (iii) power generation through its co-generation power plant and through wind mills (the Power Business) . The Company also has some real estate in Vadodara which can be potentially developed.

b) The Pharmaceutical Undertaking is poised for significant growth. The

international pharmaceutical industry is seeing greater share of generics with a large number of drugs expected to go off patent in the next few years offering tremendous growth opportunities to well managed and focused Indian pharmaceutical companies. The domestic pharmaceutical industry is also witnessing double digit growth riding on increasing economic development, increasing per capita income and greater focus on healthcare. However, in order to capitalize on the available opportunities there is a need for specialized attention, focus, resources, etc. Further this business is capable of attracting different set of investors, strategic partners, lenders and other stakeholders. Therefore, it is proposed to demerge the Pharmaceutical Undertaking into a separate company (Alembic Pharma Limited). As a new company the Pharmaceutical Undertaking will have the necessary independence, accountability and freedom to chart its own course of growth without the legacy of the other businesses / activities of the Company.

c) The Vadodara Undertaking of Alembic Limited consisting of the assets (hereinafter referred to as “the Assets”) more particularly described in Schedule II is engaged in the business of manufacture of predominantly fermentation and chemistry based bulk drugs (APIs) and is currently going through many challenges. The Vadodara Undertaking was established many decades ago and hence, some of its plant, machineries and other equipments are very old. Further, being an old facility, it is not designed in line with present regulatory and business requirements. The business is facing stiff price competition from Chinese manufacturers. The Company together with other manufacturers had applied for levy of anti dumping duty on such imports, which has not been favourably considered by the Government of India. In view of this situation the Vadodara Undertaking needs to be reorganized and right sized to enable it to survive the competitive pressures. The activities of the Vadodara Undertaking will also need greater focus and other restructuring measures to make it cost efficient and competitive. The Assets of the Vadodara Undertaking which are carried at historical costs do not reflect their true value and it has become imperative to revalue them so as to reflect their fair values.

d) The Company owns some land area at Vadodara which can be potentially used

for real estate development in future. Similarly the Power Business also has good opportunity for growth and consolidation

e) The risk-reward profile and the competition involved in each of these businesses

is distinct from each other and consequently each business or undertaking is capable of attracting a different set of investors, strategic partners, lenders and other stakeholders. There are also differences in the manner in which each of these businesses are required to be managed. The demerger will create two


25

separate entities with management focus on clearly laid out objectives, pursuant to which Alembic Pharma Limited would focus on the Pharmaceutical Undertaking consisting of the business of manufacturing, marketing and trading of formulations & APIs and Research & Development activities and Alembic Limited would focus on its existing business and activities other than the Pharmaceutical Undertaking.

f) It is believed that the proposed demerger will create enhanced value for

shareholders and allow a focused strategy in operations, which would be in the best interest of both AL & APL, its shareholders, creditors and all persons connected with AL and APL. The demerger proposed by this Scheme of Arrangement will enable investors to separately hold investments in businesses with different investment characteristics thereby enabling them to select investments which would best suit their investment strategies and risk profiles.

g) The demerger will also provide scope for independent collaboration and

expansion without committing the existing organization in its entirety.

h) The demerger will facilitate more transparent benchmarking of the Companies with their peers in their respective industries.

i) The Board of Directors of the Demerged Company and Resulting Company are

of the opinion that the demerger would benefit the shareholders, employees and other stakeholders of the Demerged Company and the Resulting Company.

j) With the aforesaid rationale and objectives, it is proposed to demerge AL’s

Pharmaceutical Undertaking comprising manufacturing, marketing and trading of Formulations & API and research & development activities from AL to APL and reorganize the Vadodara Undertaking.

C. OPERATION OF THE SCHEME a) In furtherance of the rationale and objectives mentioned above, this Scheme of

Arrangement provides for:

(i) The Demerger of the Pharmaceutical Undertaking from Demerged Company to the Resulting Company;

(ii) The reorganization of the capital of the Demerged Company and the Resulting Company;

(iii) Reorganization of the Vadodara Undertaking of Alembic Limited.

b) The Demerger of the Pharmaceutical Undertaking of the Demerged Company under this Scheme of Arrangement will be effected under the provisions of Sections 391 to 394 of the Companies Act, 1956. The Demerger complies with the provisions of Section 2(19AA) of the Income Tax Act, 1961, such that:

(i) All the properties of the Pharmaceutical Undertaking (as defined hereinafter)

being transferred by the Demerged Company immediately before the Demerger become the properties of the Resulting Company by virtue of the Demerger;

(ii) All the liabilities relatable to the Pharmaceutical Undertaking being transferred by the Demerged Company, immediately before the Demerger become the liabilities of the Resulting Company by virtue of the Demerger;


26

(iii) The properties and the liabilities, if any, relatable to the Pharmaceutical Undertaking being transferred by the Demerged Company are transferred to the Resulting Company at the values appearing in the books of account of the Demerged Company immediately before the Demerger;

(iv) The Resulting Company issues shares to the shareholders of the Demerged Company in consideration of the Demerger on a proportionate basis;

(v) All the shareholders of the Demerged Company shall become the shareholders of the Resulting Company by virtue of the Demerger; and

(vi) The transfer of the Pharmaceutical Undertaking will be on a going concern basis.

c) This Scheme has been drawn up to comply with the conditions relating to “Demerger” as specified under Section 2(19AA) of the Income Tax Act, 1961. If any terms or provisions of the Scheme is/ are inconsistent with the provisions of Section 2(19AA) and related provisions of the Income Tax Act, 1961, the provisions of Section 2(19AA) and related provisions of the Income Tax, 1961 shall prevail and the Scheme shall stand modified to the extent necessary to comply with Section 2(19AA) and the related provisions of the Income Tax Act, 1961; such modification shall not affect other parts of the Scheme.

2. DEFINITIONS:

In this Scheme, unless inconsistent with the subject or context, the following expressions shall have the following meaning: -

(a) 'Act' means the Companies Act, 1956 including any statutory modifications or re-

enactments for the time being in force. (b) ‘Appointed Date' means the commencement of 1st day of April, 2010 or such

other date as may be approved by the High Court of Judicature at Gujarat; (c) ‘Court’ or ‘High Court’, shall mean Hon'ble High Court of Gujarat, and shall be

deemed to include the National Company Law Tribunal, if applicable. (d) ‘Company’ or ‘AL’ or ‘Demerged Company ‘ means Alembic Limited, a listed

limited company incorporated under the Indian Companies Act VI of 1882 and having its Registered Office at Alembic Road, Vadodara, Gujarat, India 390 003.

(e) ‘Effective Date' means the last of the dates on which the sanctions / approvals

or orders as specified in Clause No. 22 of this Scheme have been obtained and the order of the High Court sanctioning the Scheme of Arrangement is filed with the Registrar of Companies by the Demerged Company and the Resulting Company. References in this Scheme to the date of “coming into effect of this


27

Scheme” or “effectiveness of this Scheme” or “Scheme becoming effective” shall be construed accordingly.

(f) ‘Pharmaceutical Undertaking’ or ‘Demerged Undertaking’ means the

Demerged Company’s undertaking, business activities and operations pertaining to pharmaceutical business other than Vadodara Undertaking comprising all the assets, (moveable and immoveable, tangible or intangible, real or personal, corporeal or incorporeal, present, future or contingent) and liabilities, which relate thereto or are necessary therefor and including specifically the following:

I) The manufacturing facilities and research & development centre as described in

Schedule I-A, together with all that pieces or parcels of freehold and leasehold lands, hereditaments and premises situate, lying and being thereat together with all the buildings and structures standing thereon as on the Appointed Date.

II) All secured and unsecured debts, fixed deposits, liabilities (including contingent

liabilities), duties and obligations of every kind and nature whatsoever and howsoever accruing or arising out of and all loans or borrowings raised and incurred and utilized for its businesses, activities and operations pertaining to Pharmaceutical Undertaking, along with any charge, encumbrance, lien or security thereon, of the Demerged Company as on the Appointed Date (hereinafter referred to as 'the said Liabilities'). All other regional offices relating to pharmaceutical business whether owned or leased.

For the purpose of this Scheme, it is clarified that liabilities pertaining to the Pharmaceutical Undertaking include:

the liabilities, including contingent liabilities, which arise out of the respective activities or operations of the Pharmaceutical Undertaking;

specific loans and borrowings raised, incurred and utilized solely for the respective activities or operation of the Pharmaceutical Undertaking;

liabilities other than those referred to in sub-clauses above, being the amounts of general or multipurpose borrowings of the Demerged Company, allocated to the Pharmaceutical Undertaking in the same proportion in which the value of the assets transferred under this Scheme bear to the total value of the assets of the Demerged Company immediately before giving effect to this Scheme.

III) All strategic investments of the Demerged Company pertaining to Pharmaceutical Undertaking as described in Schedule I-B.

IV) All reserves and provisions and funds relating to Pharmaceutical

Undertaking. V) Without prejudice to the generality of sub-clause (I) and (II) mentioned

above, the Pharmaceutical Undertaking of the Demerged Company shall include all Pharmaceutical Undertaking activities, assets including investments, claims, subsidies, powers, authorities, allotments, approvals, consents, contracts, enactments, arrangements, rights, titles, interests, benefits, advantages, lease-hold rights and other intangible rights, hire


28

purchase contracts and assets, lending contracts, benefit of any security arrangements, reversions, permits, quotas, entitlements, registrations, construction and infrastructure registration(s), licences (industrial, software or otherwise), municipal permissions, systems of any kind whatsoever, rights and benefits of all agreements and other interests including rights and benefits under various schemes of different taxation laws as may belong to or be available to the Pharmaceutical Undertaking activities of the Demerged Company, rights and powers of every kind, nature and description of whatsoever probabilities, liberties, easements, advantages and approvals of whatsoever nature and wheresoever situated, belonging to or in ownership, including but without being limited to patents, copyrights, brand names, and any other intellectual property rights of any nature whatsoever, trade mark except trademark “Alembic”(the trademark “Alembic” will remain the property of the Demerged Company. However, the Resulting Company shall be entitled to make use of the word “Alembic” for the purpose of the Pharmaceutical Undertaking), domain names, service marks, colour schemes, logos, records, files papers, engineering and process information, quotations, technical know-how, designs, design registrations, authorizations, rights to use and avail of telephones, telexes, facsimile, email, internet, lease line connections and installations, utilities, electricity and other services, all records, files, papers, computer programs, manuals, data, catalogues, sales and advertising materials, lists and other details of present and former customers and suppliers, customer credit information, customer and supplier pricing information and other records in connection with or in relation to the Pharmaceutical Undertaking of the Demerged Company and all other interests of whatsoever nature belonging to or in the ownership, power, possession, or the control of or vested in or granted in favour of or held for the benefit of or enjoyed by the Pharmaceutical Undertaking of Alembic Limited.

VI) All the employees of the Demerged Company employed in the

Pharmaceutical Undertaking, as identified by the Board of Directors or any Committee or Person(s) authorized by the Board of the Demerged Company as on the Effective Date.

Any question that may arise as to whether a specified asset or liability pertains to or does not pertain to the Pharmaceutical Undertaking, or whether it arises out of the activities or operations, shall be decided by mutual agreement between the Board of Directors of Demerged Company and the Resulting Company.

(g) ‘Resulting Company’ or ‘APL’ means Alembic Pharma Limited, a public limited

company, incorporated under the Companies Act, 1956 having its Registered Office at Alembic Road, Vadodara, Gujarat, India 390 003.

(h) ‘Record Date’ means the date fixed by the Board of Directors of the Demerged

Company in consultation with the Resulting Company for the purpose of reckoning names of the equity shareholders of the Demerged Company, who shall be entitled to receive shares of the Resulting Company upon coming into effect of this Scheme as specified in Clause 10(a) of this Scheme.


29

(i) ‘Remaining Undertaking’ means all the business and all the properties, assets, investments and liabilities, employees of the Demerged Company including the Vadodara Undertaking, Power Business, investments other than Pharmaceutical Undertaking defined hereinabove.

(j) 'Scheme' or ‘the Scheme’ or ‘this Scheme’ means this Scheme of Arrangement

in its present form as submitted to the Honorable High Court of Gujarat or this Scheme with such modification(s), if any made, as per Clause 20 of the Scheme.

(k) ‘Vadodara Undetaking’ means and includes business of manufacturing and

marketing of fermentation and chemistry based Active Pharmaceuticals Ingredients (API) at Vadodara. It includes the assets more particularly described in Schedule II.

All the terms and words used but not defined in this Scheme shall, unless repugnant or contrary to the context or meaning thereof, have the same meaning ascribed to them under the Act, the Securities Contract (Regulation) Act, 1956, the Depositories Act, 1996, the Income Tax Act, 1961 and other applicable laws, rules and regulations, bye-laws, as the case may be or any other statutory modifications or re-enactment thereof for the time being in force.

3. SHARE CAPITAL

A. The Share Capital of AL as on 31st March, 2010 (Audited) is as under:

Authorized Capital (Rs. in lacs) 22,50,00,000 Equity Shares of Rs.2/-each Rs. 4500.00

5,00,000 redeemable cumulative Preference Shares of Rs.100/- each

Rs.500.00

Total Rs. 5000.00

Issued and subscribed Capital (Rs. in lacs)

13,84,64,270 Equity shares of Rs.2/- each. Rs.2769.29

Total Rs.2769.29

Paid-up Capital (Rs. in lacs)

13,35,15,914 Equity shares of Rs.2/- each. Rs.2670.31

Total Rs. 2670.31


30

The equity shares of Demerged Company are listed on Bombay Stock Exchange and National Stock Exchange.

B. The Share Capital of the Resulting Company as on 29th June, 2010 is as under:

Authorized Capital (Rs. in lacs) 6,00,00,000 Equity Shares of Rs.2/- each Rs.1200.00

Total Rs.1200.00 Issued, Subscribed and Paid-up (Rs. in lacs)

5,50,00,000 Equity Shares of Rs.2/- each Rs.1100.00

Total Rs.1100.00

100% of the shareholding of the Resulting Company is held by the Demerged Company as on date.

4. TRANSFER OF UNDERTAKING

The Pharmaceutical Undertaking of the Demerged Company as defined in Clause 2(f), shall stand transferred to and vested in the Resulting Company, as a going concern, in accordance with Section 2(19AA) of the Income Tax Act and in the following manner:

(a) With effect from the Appointed Date and subject to the provisions of this Scheme and pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Act and in relation to the mode of transfer and vesting, all the assets and properties, rights, claims, title, interest, hereditaments and authorities including accretions and appurtenances thereto such as dividends, or other benefits received of the Pharmaceutical Undertaking of the Demerged Company shall, without any further act, instrument or deed, be and the same shall stand transferred to and / or vested in or be deemed to have been and stand transferred to or vested in the Resulting Company as a going concern so as to become as and from the Appointed Date, the estate, rights, titles, hereditaments and interests and authorities including accretions and appurtenances thereto such as dividends, or other benefits receivable that of the Resulting Company.

(b) With effect from the Appointed Date, and subject to the provisions of this Scheme,

all the debts, liabilities including entire existing fixed deposits of the Demerged Company, contingent liabilities, duties and obligations of every kind, nature and description of the Demerged Company relatable to the said Pharmaceutical Undertaking of the Demerged Company shall stand transferred or deemed to have been transferred without any further act, instrument or deed of the Resulting Company, pursuant to the provisions of Sections 391 to 394 of the Act, so as to become as and from the Appointed Date, the debts, liabilities, contingent liabilities, duties and obligations of the Resulting Company and further that it shall not be necessary to obtain consent of any third party or other person who is a party to the contract or arrangements by virtue of which such debts, liabilities, duties and obligations have arisen, in order to give effect to the provisions of this Clause.


31

(c) With effect from the Appointed Date and upon the Scheme becoming effective, any

statutory licenses, certificates, clearances, quota, authorities, USFDA approvals, DMF approvals, ANDA approvals, ISO certifications, trademarks, patents, Intellectual property rights, leases, tenancy, assignments, allotments, power of attorney given by, issued to or executed in favour of the Demerged Company in relation to the Pharmaceutical Undertaking, permissions or approvals or consents held by the Demerged Company required to carry on operations of Pharmaceutical Undertaking shall stand vested in or transferred to the Resulting Company without any further act or deed, and shall be appropriately mutated by the statutory authorities concerned therewith in favour of the Resulting Company. The benefit of all statutory and regulatory permissions, environmental approvals and consents, registration or other licenses, and consents shall vest in and become available to the Resulting Company pursuant to the Scheme. In so far as the various incentives, subsidies, rehabilitation schemes, special status and other benefits or privileges enjoyed, granted by any Government body, local authority or by any other person, or availed of by the Demerged Company relating to the Pharmaceutical Undertaking, are concerned, the same shall vest with and be available to the Resulting Company on the same terms and conditions without any further act or deed, and shall be appropriately mutated by the statutory authorities concerned therewith in favour of the Resulting Company.

(d) The transfer and vesting of Pharmaceutical Undertaking as aforesaid shall be

subject to the existing securities, charges, mortgages and other encumbrances if any, subsisting over or in respect of the property and assets or any part thereof relatable to Pharmaceutical Undertaking to the extent such securities, charges, mortgages, encumbrances are created to secure the liabilities forming part of the Pharmaceutical Undertaking.

(e) All debentures, bonds or other debt securities, if any, of the Demerged Company

relating to the liabilities comprised in the Pharmaceutical Undertaking, (hereinafter referred to as the “Debt Securities”) shall, pursuant to the provisions of Sections 391 to 394 and other relevant provisions of the Act, without any further act, instrument or deed, become the Debt Securities of the Resulting Company on the same terms and conditions except to the extent modified under the provisions of this Scheme and all rights, powers, duties and obligations in relation thereto shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in and shall be exercised by or against the Resulting Company to the same extent as if it were the Demerged Company in respect of the Debt Securities so transferred.

(f) With effect from the Appointed Date, and subject to the provisions of this Scheme

all the Employees of the Pharmaceutical Undertaking of the Demerged Company shall stand transferred or deemed to have been transferred with all their accrued liabilities without any further act, instrument or deed of the Resulting Company, pursuant to the provisions of Sections 391 to 394 of the Act, so as to become as and from the Appointed Date, the employees of the Resulting Company and further that it shall not be necessary to obtain consent of any third party or other person, in order to give effect to the provisions of this Clause.

(g) Without prejudice to the other provisions of this Scheme and notwithstanding the

fact that vesting of the Pharmaceutical Undertaking occurs by virtue of this Scheme itself, the Resulting Company may, at any time after the coming into


32

effect of this Scheme in accordance with the provisions hereof, if so required under any law or otherwise, take such actions and execute such deeds (including deeds of adherence), confirmations or other writings or tripartite arrangements with any party to any contract or arrangement to which the Demerged Company is a party or any writings as may be necessary in order to give formal effect to the provisions of this Scheme, the Resulting Company shall be deemed to be authorised to execute any such writings on behalf of the Demerged Company and to carry out or perform all such formalities or compliances referred to above on the part of the Demerged Company to be carried out or performed.

(h) It is clarified that if any assets (estate, claims, rights, title, interest in or

authorities relating to such assets) or any contract, deeds, bonds, agreements, schemes, arrangements or other instruments of whatsoever nature in relation to the Pharmaceutical Undertaking, which the Demerged Company owns or to which the Demerged Company is a party and which cannot be transferred to the Resulting Company for any reason whatsoever, the Demerged Company shall hold such asset in trust for the benefit of the Resulting Company to which the Pharmaceutical Undertaking is being transferred in terms of this Scheme, in so far as it is permissible so to do, till such time as the transfer is effected.

(i) Where any of the debts, liabilities, loans raised and used, liabilities and obligations

incurred, duties and obligations of the Demerged Company as on the Appointed Date deemed to be transferred to the Resulting Company have been discharged by the Demerged Company after the Appointed Date and up to the Effective Date, such discharge shall be deemed to have been for and on account of the Resulting Company.

(j) All loans raised and used and all liabilities and obligations incurred by the

Demerged Company for the operations of Pharmaceutical Undertaking after the Appointed Date and up to the Effective Date, shall, subject to the terms of this Scheme, be deemed to have been raised, used or incurred for and on behalf of the Resulting Company in which the Pharmaceutical Undertaking shall vest in terms of this Scheme and to the extent they are outstanding on the Effective Date, shall also without any further act or deed be and stand transferred to and be deemed to be transferred to the Resulting Company and shall become the debts, liabilities, duties and obligations of the Resulting Company which shall meet discharge and satisfy the same.

(k) Without prejudice to clause (a) above, it is expressly provided that in respect of

such assets belonging to Pharmaceutical Undertaking of the Demerged Company as are movable in nature or are otherwise capable of transfer by manual delivery or by endorsement and delivery, the same shall be so transferred by the Demerged Company, and shall become the property of the Resulting Company in pursuance of the provisions of Sections 391 to 394 and other applicable provisions of the said Act.

(l) the Demerged Company may, if required, give notice in such form as it may deem

fit and proper to each party, debtor or depositor as the case may be that pursuant to the High Court of Gujarat sanctioning the Scheme, the said debt, loan, advance, etc. be paid or made good or held on account of the Resulting Company as the person entitled thereto and that the right of the Demerged Company to recover or realise the same stands extinguished.


33

(m) The Resulting Company may, if required, give notice in such form as it may deem fit and proper to each person, debtor or depositor that pursuant to the High Court of Gujarat having sanctioned the Scheme, the said person, debtor or depositor should pay the debt, loan or advance or make good the same or hold the same to its account and that the right of the Resulting Company to recover or realise the same is in substitution of the right of the Demerged Company.

(n) The demerger and the transfer and vesting of the assets comprised in the

Pharmaceutical Undertaking to and in the Resulting Company under this clause shall be subject to the mortgages and charges, if any, affecting the same as hereinafter provided.

(i) The existing securities, mortgages, charges, encumbrances or liens (the

“Encumbrances”) or those, if any created by the Demerged Company after the Appointed Date, in terms of this Scheme, over the assets comprised in the Pharmaceutical Undertaking or any part thereof transferred to the Resulting Company by virtue of this Scheme, shall, after the Effective Date, continue to relate and attach to such assets or any part thereof to which they related or attached prior to the Effective Date and as are transferred to the Resulting Company, and such Encumbrances shall not relate or attach to any of the other assets of Resulting Company Provided however that no Encumbrances shall have been created by the Demerged Company in relation to any of the Pharmaceutical Undertaking after the Appointed Date without the prior consent of the Resulting Company.

(ii) In so far as any Encumbrances over the assets comprised in the

Pharmaceutical Undertaking are security for liabilities of the Remaining Undertaking retained with the Demerged Company, the same shall, on the Effective Date, without any further act, instrument or deed be modified to the extent that all such assets shall stand released and discharged from the obligations and security relating to the same and the Encumbrances shall only extend to and continue to operate against the assets retained with the Demerged Company and shall cease to operate against any of the assets transferred to the Resulting Company in terms of this Scheme. The absence of any formal amendment which may be required by a lender or third party shall not affect the operation of the above.

(iii) Without prejudice to the provisions of the foregoing clauses and upon the

effectiveness of this Scheme, the Demerged Company and the Resulting Company shall execute any instruments or documents or do all the acts and deeds as may be required, including the filing of necessary particulars and/or modification(s) of charge, with the Registrar of Companies, Gujarat to give formal effect to the above provisions, if required.

(iv) Upon the coming into effect of this Scheme, the Resulting Company alone shall

be liable to perform all obligations in respect of the liabilities, which have been transferred to them respectively in terms of the Scheme, and the Demerged Company shall not have any obligations in respect of such liabilities, and the Resulting Company shall indemnify the Demerged Company in relation to any claim, at any time, against the Demerged Company in respect of the liabilities which have been transferred to the Resulting Company.


34

(v) It is expressly provided that, save as mentioned in this Clause (n), no other term or condition of the liabilities transferred to the Resulting Company is modified by virtue of this Scheme except to the extent that such amendment is required by necessary implication.

(vi) Subject to the necessary consents being obtained in accordance with the terms of this Scheme, the provisions of this Clause (n) shall operate, notwithstanding anything to the contrary contained in any instrument, deed or writing or the terms of sanction or issue or any security document; all of which instruments, deeds or writings shall stand modified and/or superseded by the foregoing provisions.

5. CONTRACTS, DEEDS AND OTHER INSTRUMENTS:

a) Subject to the provisions of this Scheme, all contracts, deeds, bonds, agreements,

arrangements and other instruments of whatsoever nature to which the Pharmaceutical Undertaking of the Demerged Company is a party or to the benefit of which Pharmaceutical Undertaking of the Demerged Company may be eligible, and which are subsisting or having effect immediately before the Effective Date, shall continue in full force and effect against or in favour of the Resulting Company as the case may be and may be enforced as fully and effectively as if, instead of the Demerged Company, the Resulting Company had been a party or beneficiary thereto. The Resulting Company shall enter into and/or issue and/or execute deeds, writings or confirmations or enter into a tripartite arrangement, confirmation or novation to which the Demerged Company will, if necessary, also be a party in order to give formal effect to this Clause, if so required or become necessary.

b) It is clarified that if any assets (estate, claims, rights, title, interest in or

authorities relating to such assets) or any contracts deeds, bonds, agreements, schemes, arrangements or other instruments of whatsoever nature in relation to Pharmaceutical Undertaking, which the Demerged Company owns or to which the Demerged Company is a party and which cannot be transferred to the relevant Resulting Company for any reason whatsoever, the Demerged Company shall hold such asset or any contracts deeds, bonds, agreements, schemes, arrangements or other instruments of whatsoever nature in trust for the benefit of the Resulting Company to which the Pharmaceutical Undertaking is being transferred in terms of this Scheme, in so far as it is permissible so to do till such time as the transfer is effected.

c) On and from the Appointed Date, if any certificate for tax deducted or collected at source or any other tax credit certificate relating to the business of the Pharmaceutical Undertaking is received in the name of the Demerged Company, it shall be deemed to have been received by the relevant Resulting Company which alone shall be entitled to claim credit for such tax deducted or paid.

d) The advance income tax paid by the Demerged Company to the tax authorities can be allocated amongst the Demerged Company and the Resulting Company in proportion to the taxes (net of tax deducted at source) attributable to the taxable income of the relevant Demerged Undertaking in the books of accounts of the Demerged Company.


35

6. LEGAL PROCEEDINGS:

(a) Upon coming into effect of this Scheme, all suits, claims, actions and proceedings by or against or in relation to the Pharmaceutical Undertaking of the Demerged Company pending and / or arising on or before the Effective date shall be continued and be enforced by or against the Resulting Company as effectually as if the same had been pending and/or arising by or against the Resulting Company.

(b) If proceedings are taken against Demerged Company in respect of the matters

referred to in clause above, it shall defend the same in accordance with the advice of the Resulting Company and at the cost and risk of the Resulting Company, and the latter shall reimburse and indemnify the Demerged Company against all liabilities and obligations incurred by the Demerged Company in respect thereof. In respect of such defence, the Resulting Company shall extend full and timely cooperation, including providing requisite information, personnel and the like, so as to enable Demerged Company to defend the same.

(c)The Resulting Company also undertakes to reimburse and indemnify the Demerged

Company against invocation of bank guarantee, if any, relating to the Pharmaceutical Undertaking after the Appointed Date.

(d) The Demerged Company and the Resulting Company shall, to the extent possible,

co-operate with each other in respect of any such contest, defence, litigation or settlement arising in respect of the Pharmaceutical Undertaking on or after the Appointed Date.

(e) The Resulting Company will undertake to have all legal or other proceedings

initiated by or against the Pharmaceutical Undertaking of the Demerged Company referred to in sub-clause (a) above transferred to its name and to have the same continued, prosecuted and enforced by or against the Resulting Company.

(f) All legal, taxation or other proceedings whether civil or criminal (including before any statutory or quasi-judicial authority or tribunal) by or against the Demerged Company under any statute, whether pending on the Appointed Date or which may be instituted at any time thereafter, and in each case relating to the Remaining Undertaking (including those relating to any property, right, power, liability, obligation or duties of the Demerged Company in respect of the Remaining Undertaking) shall be continued and enforced by or against the Demerged Company after the Effective Date. The Resulting Company shall not in any event be responsible or liable in relation to any such legal, taxation or other proceeding against the Demerged Company, which relate to the Remaining Undertaking.

(g) If proceedings are taken against the Resulting Company in respect of the matters

referred to in sub- clause (a) above, the Resulting Company shall defend the same in accordance with the advice of the Demerged Company and at the cost and risk of the Demerged Company, and the latter shall reimburse and indemnify the Resulting Company against all liabilities and obligations incurred by the Resulting Company in respect thereof. In respect of such defense, the Demerged Company shall extend full and timely cooperation, including providing requisite information, personnel and the like, so as to enable the Resulting Company to defend the same.

7. REMAINING UNDERTAKING OF THE DEMERGED COMPANY


36

The Remaining Undertaking and all the assets, liabilities and obligations pertaining thereto shall continue to belong to and be vested in and be managed by the Demerged Company, (subject only in relation to encumbrances in favour of banks and financial institutions). For the purpose of clarity, the Remaining Undertaking will include but not limited to all the assets situated at the Vadodara Plant, Co-generation Power plants, Wind Mill Power project, Staff Colony at Vadodara, Mumbai Offices situated at Mahim and Sahar Road and Delhi Liasoning Office, Alembic Business Park, other land and buildings at Vadodara. The Resulting Company may use the common facilities viz. Mumbai Office, Corporate Office etc. after the demerger on such terms and conditions as may be mutually agreed between the Demerged Company and the Resulting Company. All other regional offices relating to Pharmaceutical Undertaking whether owned or leased will be transferred to the Resulting Company.

8. OPERATIVE DATE OF THE SCHEME

This Scheme though effective from the Appointed Date shall be operative from the Effective Date.

9. CONDUCT OF BUSINESS BY DEMERGED COMPANY AND RESULTING

COMPANY TILL EFFECTIVE DATE: With effect from the Appointed Date, and upto the Effective Date:

(i) The Demerged Company shall carry on and shall be deemed to have carried on all its business and activities of the Pharmaceutical Undertaking as hitherto and shall be deemed to have held and stood possessed of the Undertaking on account of, and for the benefit of and in trust for the Resulting Company.

(ii) All the profits or income accruing or arising to the Pharmaceutical Undertaking of

the Demerged Company or expenditure or losses arising or incurred (including the effect of taxes, if any, thereon) by the Pharmaceutical Undertaking of the Demerged Company shall, for all purposes be treated and be deemed to be and accrued as the profits or income or expenditure or losses or taxes of the Resulting Company, as the case may be.

(iii) The Pharmaceutical Undertaking of Demerged Company shall carry on its business

and activities with reasonable diligence, business prudence and shall not, undertake any additional financial commitments of any nature whatsoever, borrow any amounts nor incur any liabilities or expenditure, issue any additional guarantee, indemnities, letter of comfort or commitments either for itself or on behalf of any third party, or sell transfer, alienate, charge, mortgage, encumber or otherwise deal with the said Pharmaceutical Undertaking or any part thereof except in the ordinary course of business or if the same is expressly permitted by this Scheme or pursuant to any pre-existing obligation undertaken by the Pharmaceutical Undertaking of the Demerged Company prior to the Appointed Date, except with prior written consent of the Resulting Company.


37

Provided that as far as the obligations referred as above are concerned, the restrictions there under shall be applicable from the date of the acceptance of the present Scheme by the respective Board of Directors of the Demerged Company and Resulting Company even if the same are prior to the Appointed Date.

(iv) The Demerged Company shall not vary the terms and conditions and employment of employees of the Pharmaceutical Undertaking except in the ordinary course of business or with approval of Resulting Company.

(v) The Demerged Company shall not, without prior consent of the Resulting

Company, take any major policy decisions in respect of management of the Pharmaceutical Undertaking other than in ordinary course of business.

(vi) The Demerged Company and the Resulting Company shall not make any change in

their respective capital structure either by any increase, (by issue of equity or shares on a right basis, bonus shares, convertible debentures or otherwise) decrease, reduction, reclassification, sub-division or consolidation, reorganisation, or in any other manner which may, in any way, affect the Share Exchange Ratio, except by mutual consent of the respective Board of Directors of Demerged Company and the Resulting Company or except as may be expressly permitted or envisaged under this Scheme.

10. ISSUE OF SHARES AND SECURITIES BY THE RESULTING COMPANY: (a) Upon the Scheme becoming finally effective, in consideration of the transfer of and

vesting of the Pharmaceutical Undertaking of the Demerged Company in the Resulting Company, the Resulting Company shall, subject to the provisions of the Scheme and without any further application, act, instrument or deed, issue and allot at par to every member of the Demerged Company, holding fully paid up Equity Shares in the Demerged Company and whose name appears in the Register of members of the Demerged Company on the Record Date or to his / her heirs, executors, administrators or the successors-in-title, as the case may be, in respect of every 1 (One) Equity Share of face value Rs.2/- (Rupees Two only) each held by him in the Demerged Company, 1 (One) Equity Share of face value Rs.2/- (Rupees Two Only) each shall be credited as fully paid-up in the Equity Share Capital of the Resulting Company.

(b) The said shares shall be issued in dematerialized form by the Resulting Company,

to those shareholders whose shares in the Demerged Company are in dematerialized form and shall be issued in physical form to those shareholders whose shares in the Demerged Company are in physical form, unless otherwise notified in writing by the shareholders of Demerged Company to the Resulting Company on or before such date as may be determined by the Board of Directors of Demerged Company. If any Bonus Equity Shares are issued by Demerged Company to the Equity Shareholders of Demerged Company on or before the Record Date, necessary adjustments in the number of shares to be issued and the ratio of the shares will be made by the Board of Directors of the Demerged Company in consultation with the Resulting Company.

(c) In the event of there being any pending share transfers, whether lodged or

outstanding, of any shareholder of the Demerged Company, the Board of Directors or any committee thereof of the Demerged Company shall be empowered in appropriate cases, prior to or even subsequent to the Record Date, to effectuate


38

such a transfer in the Demerged Company as if such changes in the registered holder were operative as on the Record Date, in order to remove any difficulties arising to the transferor or transferee of equity shares in the Resulting Company issued by the Resulting Company after the effectiveness of this Scheme

(d) The said new Equity Shares issued and allotted by the Resulting Company in terms of this Scheme shall be subject to the provisions of the Memorandum and Articles of Association of the Resulting Company and shall rank for voting rights and in all other respects pari-passu with the existing Equity Shares of the Resulting Company.

(e) Equity shares of the Resulting Company issued in terms of clause 10 of this

Scheme may be listed and / or admitted to trading on the National Stock Exchange and / or the Bombay Stock Exchange and / or any other Stock Exchange where the shares of Demerged Company are listed and / or admitted to trading in terms of the SEBI (Issue of Capital and Disclosure Requirements) Regulations (ICDR) 2009 and circulars/regulations/rules or directions issued by Securities and Exchange Board of India under section 11 of the Securities and Exchange Board of India Act, 1992. The Resulting Company shall enter into such and give such confirmations and / or undertaking as may be necessary in accordance with the applicable laws or regulations for complying with the formalities of the said Stock Exchanges. On such formalities being fulfilled the said Stock exchanges shall list and / or admit such equity shares also for the purpose of trading.

(f) For the purpose of issue of equity shares to the shareholders of the Demerged

Company, the Resulting Company shall, if and to the extent required, apply for and obtain the required statutory approvals and other concerned regulatory authorities for the issue and allotment by the Resulting Company of such equity shares.

(g) The Equity Shares to be issued by the Resulting Company pursuant to this Scheme

in respect of Equity Shares of Demerged Company, which are not fully paid up shall also be kept in abeyance and dealt with by the Resulting Company when they become fully paid-up, based on information periodically provided by Demerged Company to the Resulting Company.

(h) Unless otherwise determined by the Board of Directors or any committee thereof of

Demerged Company and the Board of Directors or any committee thereof of the Resulting Company, issuance of Equity shares in terms of Clause 10 shall be done within 45 days from the Effective Date.

(i) For the purpose of Income Tax Act, 1961 :

(i) The cost of acquisition of the shares of the Resulting Company in the hands of

the shareholders of the Demerged Company shall be the amount which bears to the cost of acquisition of shares held by the shareholder in the Demerged Company the same proportion as the net book value of the assets transferred in the Demerger to the Resulting Company bears to the net worth of the Demerged Company immediately before the Demerger hereunder.

(ii) The period for which the share(s) in the Demerged Company were held by the

shareholders shall be included in determining the period for which the shares in the Resulting Company have been held by the respective shareholder.


39

(j) The issue and allotment of Equity Shares by the Resulting Company as provided in the Scheme shall be deemed to have been carried out by following the procedure laid down under Section 81(1A) of the Companies Act, 1956, if applicable, and other applicable provisions of the Act.

(k) The Shares allotted pursuant to the Scheme shall remain frozen in the depositories

system till listing / trading permission is given by the Designated Stock Exchange. There shall be no change in the shareholding pattern or control in Alembic Pharma Limited between the record date and the listing which may affect the status of the approval of the Stock Exchange.

(l) No fractional entitlements shall be issued in favour of any member of Demerged

Company holding Equity Shares of the Demerged Company in respect of the fractional entitlements if any, to which he may be entitled on issue or allotment of the shares of the Resulting Company as aforesaid. The Board of Directors of the Resulting Company shall instead consolidate all such fractional entitlements and allot shares in lieu thereof to a director or an authorized officer of the Resulting Company with express understanding that such director or the officer shall sell the same at the best available price in one or more lots by private sale / placement or by auction as deemed fit (the decision of such director or the officer as the case may be as to the timing and method of the sale and the price at which such sale has been given effect to shall be final) and pay the sales proceeds to the Resulting Company. The net sale proceeds thereupon shall be distributed among the members of the Demerged Company in the proportion of their fractional entitlements in the Resulting Company.

11. ACCOUNTING BY THE DEMERGED COMPANY AND THE RESULTING

COMPANY IN RESPECT OF ASSETS AND LIABILITIES: 11.1 Accounting treatment in the books of the Demerged Company: a) The assets and the liabilities of the Demerged Company being transferred to

the Resulting Company shall be at values appearing in the books of accounts of the Demerged Company as on the closure of March 31, 2010.

b) An amount equivalent to net book value of the assets (net of liabilities) of the Pharmaceutical Undertaking transferred to the Resulting Company by the Demerged Company in terms of this Scheme, shall be appropriated against Securities Premium account of the Demerged Company, and after such appropriation, will be further appropriated against General Reserve Account / Profit and Loss Account of the Demerged Company to the extent required.

c) The general and multipurpose loan obtained by the Demerged Company

from various Banks will be apportioned between the Demerged Company and the Resulting Company in the ratio of the value of the assets allocated to both the Demerged Company and the Resulting Company and respective charges will be created over the assets of the respective Companies.

d) The book value of investment by the Demerged Company in the share capital of Resulting Company will be continued and shall not be cancelled.


40

11.2 Accounting treatment in the Books of the Resulting Company:

a) Upon coming into effect of this Scheme and upon the arrangement becoming operative, the Resulting Company shall record the assets and liabilities (including the portion of the Loan obtained for the Pharmaceutical Undertaking from various Banks) comprised in the Pharmaceutical Undertaking transferred to and vested in them pursuant to this Scheme, at the same value appearing in the books of the Demerged Company as on the closure of March 31, 2010.

b) The Resulting Company shall credit the Share Capital Account in its books of account with the aggregate face value of the new equity shares issued to the shareholders of the Demerged Company pursuant to Clause 10 of this Scheme.

c) The excess or deficit, if any, remaining after recording the aforesaid entries shall be credited by the Resulting Company to its General Reserve Account or debited to Goodwill / Securities Premium Account, as the case may be. The General Reserve created, if any, shall be treated for all purposes, as free reserve.

d) On allotment of shares by the Resulting Company in terms of Clause 10 above, the existing shareholding of the Demerged Company, in the Resulting Company shall be continued as an integral part of this Scheme and hence no reduction in the Share Capital will take place.

e) The borrowing limits of the Resulting Company in terms of Section 293(1)(d) read with Section 293(1)(a) of the Act shall, without any further act, instrument or deed, stand enhanced to an amount Rs.2000 Crores over and above its paid up capital and free reserves.

12. REORGANIZATION OF AUTHORISED SHARE CAPITAL 12.1 AUTHORISED SHARE CAPITAL OF THE DEMERGED COMPANY a) Upon the scheme becoming effective, the existing preference share capital of

Rs.5 Crores consisting of 5,00,000 Preference Shares of Rs.100/- each shall stand reclassified as equity shares of Rs.5 Crores consisting of 2,50,00,000 equity shares of Rs.2/- each pursuant to 16, 31, 94 and 394 and other applicable provisions of the Act, as the case may be without any further act, instrument or deed.

b) Upon the scheme becoming effective, the Authorised Share Capital of the

Demerged Company shall stand transferred to the Resulting Company without any further act, instrument or deed and without payment of any fees, stamp duty etc. to the extent of Rs.20,00,00,000 (Rupees Twenty Crores) pursuant to 16, 31, 94 and 394 and other applicable provisions of the Act, as the case may be without any further act, instrument or deed.

c) Consequentially, upon Scheme being effective,


41

Clause V of the Memorandum of Association of the Demerged Company (relating to authorised share capital) shall, without any further act, instrument or deed, be and stand altered, modified and amended pursuant to Sections 16, 31, 94 and 394 and other applicable provisions of the Act, as the case may be, in the manner set out below and be replaced by the following clause:

“The authorised share capital of the Company is Rs.30,00,00,000/- (Rupees Thirty Crores only) divided into 15,00,00,000 (Fifteen Crores Only) Equity Shares of Rs. 2/- (Rupees Two only) each , with power to classify or reclassify, increase or reduce the capital from time to time in accordance with the regulations of the Company and the legislative provisions for the time being in force in this behalf and with the power to divide the share capital for the time being into several classes and to attach thereto respectively any preferential. qualified or special rights, privileges or condition including as to voting and to vary, modify or abrogate the same in such manner as may be determined by or in accordance with these present and the Articles of Association.”

12.2 AUTHORISED SHARE CAPITAL OF THE RESULTING COMPANY a) Upon the scheme being effective, the Authorized Capital of the Resulting

Company shall stand increased by Rs.20,00,00,000 (Rupees Twenty Crores) which shall stand transferred from the Authorized Capital of Demerged Company to the Resulting Company without any further act, instrument or deed and without payment of any fees, stamp duty etc.

b) Upon the scheme being effective, the Authorized Capital of the Resulting

Company shall stand increased by Rs.8,00,00,000(Rupees Eight Crores) without any further act, instrument or deed but subject to payment of fees and stamp duty thereon.

c) Consequentially, upon Scheme being effective,

(i) Clause V of the Memorandum of Association of the Resulting Company (relating to authorized share capital) shall, without any further act, instrument or deed, be and stand altered, modified and amended pursuant to Sections 16, 31, 94 and 394 and other applicable provisions of the Act, as the case may be, in the manner set out below and be replaced by the following clause:

“The Authorized share capital of the Company is Rs. 40,00,00,000/- (Rupees Forty Crores only) divided into 20,00,00,000 (Twenty Crores Only) Equity Shares of Re. 2/- (Rupee Two only) each with power to classify or reclassify, increase or reduce the capital from time to time in accordance with the regulations of the Company and the legislative provisions for the time being in force in this behalf and with the power to divided the share capital for the time being into several classes and to attach thereto respectively any preferential, qualified or special rights, privileges or condition including as to voting and to vary, modify or abrogate the same in


42

such manner as may be determined by or in accordance with these present and the Articles of Association.”

12.3 Under the accepted principle of Single Window Clearance, it is hereby provided that the aforesaid alterations in the memorandum and Articles of Association of both the Demerged Company and Resulting Company viz. Change in the Capital Clause, referred above, shall become operative on the scheme being effective by virtue of the fact that the Shareholders of the Demerged Company and the Resulting Company while approving the Scheme as a whole at duly convened meetings or by virtue of written consent letter, have also resolved and accorded the relevant consents as required respectively under Sections 16, 31, 94 and 394 of the Companies Act, 1956 or any other provisions of the Act and shall not be required to pass separate resolutions as required under the Act.

13. REDUCTION OF SECURITIES PREMIUM AND/OR GENERAL RESERVE OF THE

DEMERGED COMPANY. Upon the Scheme being finally effective, in view of the transfer of Pharmaceutical Undertaking by the Demerged Company i. An amount equivalent to net book value of assets (net of liabilities) of the

Pharmaceutical Undertaking transferred to the Resulting Company by the Demerged Company in terms of this Scheme, shall be firstly appropriated against Securities Premium Account of Demerged Company and after such appropriation, balance left if any, will be secondly appropriated against the General Reserve Account / Profit and Loss Account of the Demerged Company.

ii. It is proposed that the entire amount of Rs. 4057.47 lacs standing to the credit balance of Share Premium Account in the books of the Demerged Company as on the Appointed Date, shall be so utilized for the said adjustment.

iii. The same amounts to reduction of capital under sec. 78 and 100 of the Companies Act. However, the same is consequential in nature and is proposed to be effected as an integral part of the Scheme. The approval of the members of the De-merged Company to the proposed Scheme at the Court convened meeting, shall be deemed to be their approval under the provisions of Sections 78, 100 and all other applicable provisions of the Act to such reduction of capital of the De-merged Company and the De-merged Company shall not be required to undertake any separate proceedings for the same. The order of the Honorable High Court sanctioning the Scheme shall be deemed to be an Order under Section 102 of the Act. In view of the same, the Resulting Company shall not be required to separately comply with Sec. 100 or any other provisions of Companies Act, 1956. The De-merged Company shall not be required to add “And Reduced” after its name.


43

14. TAXES

All Taxes (including income tax, sales tax, excise duty, custom duty, service tax VAT etc) paid or payable by the Demerged Company in respect of the operations and/or profits of the Demerged Company before the Appointed Date, shall be on account of the Demerged Company and, insofar as it relates to the tax payment (including, without limitation, income tax, sales tax, excise duty, custom duty, service tax, VAT etc), whether by the way of deduction at source, advance tax or otherwise howsoever, by the Demerged Company in respect of the profits or activities or operation of the Pharmaceutical Undertaking after the Appointed Date, the same shall be deemed to be the corresponding item paid by the Resulting Company and shall, in all proceedings, be dealt with accordingly.

18. REORGANISATION OF THE VADODARA UNDERTAKING Subsequent to the demerger, as on the Appointed Date, the Assets of the Vadodra

Undertaking will be revalued and such a revaluation will be done by an approved valuer in accordance with the Accounting Standard 10 issued by the Institute of Chartered Accountant of India. The net increase in net book value of the Assets including out of the revaluation of the appurtenant land of the Vadodara Undertaking, will be firstly credited directly to the owner’s interests under the head of Revaluation Reserve. The said Revaluation Reserve shall be renamed as Business Restructuring Reserve pursuant to the Scheme, to be referred to as such or by any other name and such Reserve shall be available to meet the costs, expenses, and losses, including on account of impairment of or write-down of assets of the Vadodara Undertaking, which may be suffered by AL, pursuant to this Scheme or otherwise in course of its business or in carrying out such re-organisation of operations of Vadodara Undertaking or any of its subsidiaries, as the Company considers necessary or appropriate. Such Reserve shall be arising out of this Scheme and shall not be considered as a reserve created by AL. Depreciation, after revaluation will be charged on the revalued amount of the Assets.

Approvals with respect to the Scheme of Arrangement The Honorable High Court of Judicature at Ahmedabad, vide Order dated 24th January, 2011 has approved the Scheme of Arrangement between Alembic Limited and Alembic Pharmaceuticals Limited(earlier known as Alembic Pharma Limited) and their respective shareholders and creditors (the “Scheme”). In accordance with the said Scheme, the Equity shares of Alembic Pharmaceuticals Limited issued pursuant to the Scheme, subject to applicable regulations shall be listed and admitted to trading on the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). Such listing and admission for trading is not automatic and will be subject to such other terms and conditions as may be prescribed by the Stock Exchanges at the time of application by Alembic Pharmaceuticals Limited seeking listing. The aforesaid Order of the Honorable High Court of Judicature at Ahmedabad was filed by Alembic Limited and Alembic Pharmaceuticals Limited with the Registrar of Companies


44

(“ROC”), on 1st April, 2011. The Effective Date of the Scheme is 1st April, 2011. Subsequently, SEBI, vide its letter ref. no. CFD/DIL/SP/JAK/OW/28506/2011 dated September 9, 2011 has granted relaxation from Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957 (SCRR) for the purpose of listing of shares of Alembic Pharmaceuti cals Limited subject to the transferee company, viz., Alembic Pharmaceuti cals Limited, complying with the provisions of SEBI circular No.CFD/SCRR/01/2009/03/09 dated September 3, 2009.

Alembic Pharmaceuticals Limited has submitted its Information Memorandum, containing information about itself, making disclosures in line with the disclosure requirement for public issues, as applicable, to BSE and NSE for making the said Information Memorandum available to public through their websites.

This Information Memorandum is made available on the websites as under:

Company’s website : www.alembic-india.com BSE’s website : www.bseindia.com NSE’s website : www.nseindia.com

The Company has published an advertisement in the news papers containing its details in line with the details required as in terms of SEBI Circular SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009. The advertisement has been published on September 13, 2011.

Alembic Pharmaceuticals Limited also undertakes that all material information about itself shall be disclosed to stock exchanges on a continuous basis so as to make the same available to public, in addition to the requirements, if any, specified in Listing Agreement for disclosures about the subsidiaries.


45

Statement of Tax Benefits


46


47


48


49


50


51


52


53

SECTION - IV

ABOUT ALEMBIC PHARMACEUTICALS LIMITED OVERVIEW OF PHARMACEUTICAL INDUSTRY The Indian Pharmaceutical Industry has been largely resilient to the economic challenges. The Global Pharmaceutical Market is expected to grow between 5 & 7% in 2011. Indian Pharmaceutical industry grew at healthy 18% in last year and is likely to sustain current growth momentum (14-15% versus historical run-rate of 10-12% over FY09-10). The Indian economy is expected to emerge as the fastest growing economy by 2013 and to be the 3rd largest economy by 2050 (Source: BRICs Report, Goldman Sachs). The GDP growth will be driven by both exports and domestic consumption. The current spending on healthcare [public and private] is estimated at 6% of GDP and expected to increase to 10% of GDP by 2016. The market remains dominated by acute therapies; however chronic segments such as Cardio Vascular, Diabetes, Central Nervous System and specialty segments like Oncology are growing faster at 18-19% versus the current industry growth of 15% (MAT March 2011). India is also emerging as a low-cost, high quality option for outsourcing of research, manufacturing and other services. This offers a great opportunity for the Indian pharmaceutical industry and Indian pharma companies. The Global pharmaceutical Industry is witnessing a growing importance of generics. The Pharmaceutical Industry continues to remain fragmented and competitive especially due to increased genericisation. Global pharmaceutical market intelligence company IMS Health believes the Indian generic manufacturers will grow at a faster clip as drugs worth approximately $170 billion will go off patent in 2015. In fact, with nearly $105 billion worth of patent-protected drugs to go off-patent (including 30 of the best selling US patent-protected drugs) by 2012, Indian generic manufacturers are positioning themselves to offer generic versions of these drugs. With drugs going off patent each year, generics represent a major outsourcing opportunity for pharmaceutical producers in India. The global pharmaceutical outsourcing market is rapidly growing.

BUSINESS

DOMESTIC FORMULATION BUSINESS:

The domestic formulation business is a very critical component of Alembic’s business. Alembic has built an important relationship with doctors and is known as the leading company in Macrolides as well as other acute therapies. Alembic has now made a mark in some specialized therapies such as Diabetology, Cardiology and Gynaecology as well.


54

The company continues to make investment in the domestic branded business, particularly with the newer specialty segments. The Company has also renewed its focus on penetrating rural segment which we believe will be the next growth driver for us. The positive impact of the restructuring undertaken in the recent years is evident from the fact that company registered 19% growth in primary numbers in FY 10-11. INTERNATIONAL BUSINESS: Alembic’s export formulation business to regulatory markets of US, Canada and Europe recorded a stellar performance during the year to reach turnover of Rs. 174 crores and registered 70% growth over last year. During the year Company launched 3 ANDA’s in USA market. The Company has filed 38 Abbreviated New Drug Applications (ANDAs) and 53 Drug Master Files (DMFs) and received approvals for 15 ANDA’s. Alembic’s strategy in International Generics is to partner with International Generic companies and leverage on their marketing and sales capabilities. Alembic typically shares the investment and return with the marketing partners and this helps de-risk its ANDA programme and reduces the upfront investment in the development stage. HISTORY Alembic Pharmaceuticals Limited ( the “Resulting Company”) was originally incorporated on 16th June, 2010 in the name and style “Alembic Pharma Limited”, under the Companies Act, 1956 and had received the Certificate of Commencement of business on 1st July, 2010. The company changed its name from Alembic Pharma Limited to Alembic Pharmaceuticals Limited and the Registrar of Companies, Gujarat has approved the change of name and issued a fresh certificate of incorporation consequent upon change of name on 12th March, 2011. Main Object of the Alembic Pharmaceuticals Limited as set out in Memorandum of Association of the Company are as under :

1. To manufacture, sale, purchase, deal in various pharmaceuticals products, bulk drugs, medicines, chemicals, raw materials, intermediates for various pharmaceutical products and to engage in business of healthcares, lifesciences, research and development, contract manufacturing in India and/or abroad.

2. To manufacture, process, produce, assemble, distribute, buy, sell, import, export and

deal in pharmaceuticals, drugs, chemicals, medicines, raw materials, intermediates, vaccines, tonics, enzymes, steroids, vitamins, hormones, antibiotics, antiseptics, disinfectants, veterinary medicines, poultry medicines, herbal products, their by-products, intermediates, residues, mixtures, compounds, preparations, cosmetics, pesticides, medicinal components, injections, dyewares, cordials, liquors, restoratives, acids, surgical preparations, medical equipments, surgical equipments and other related equipments, used in all therapies of medical treatment and the other life saving equipments apparatus and medicinal equipments and to engage in the business of Healthcare, lifesciences, research and development, contract manufacturing etc. in India and/or abroad.


55

Subsidiaries Alembic Global Holding, SA a company incorporated as per Swiss Laws is a wholly owned subsidiary of Alembic Pharmaceuticals Limited. Before demerger, it was a wholly owned subsidiary of Alembic Limited i.e. demerged company. Date of Incorporation: Alembic Global Holding, SA was incorporated on December 10, 2007. Principal Business: Alembic Global Holding, SA is engaged in purchase, sale, packaging, manufacturing, research and development of pharmaceutical products, intermediates and raw materials as well as acquisition and management of intellectual property. Shareholding Pattern of Alembic Global Holding, SA as on 31/3/2011: Sr. No.

Category No. of shares held % of Shareholding

1 Alembic Limited 99’998 100

2 Mr. R.K. Baheti 1 Negligible

3 Mr. Charles Buhlmann 1 Negligible

100’000 100 Capital Structure of Alembic Global Holding, SA

Authorized Share Capital Amount as on 31/3/2011 in CHF

100000 shares with a value of CHF 1 per share 100000


100000 shares with a value of CHF 1 per share 100000


56

Board of Directors of Alembic Global Holding, SA:

Financial performance of Alembic Global Holding, SA:

Amount in CHF

Particulars For the year ended on

31-12-2008

For the year ended on

31-12-2009

For the year ended on 31-3-2011

(15 Months)

Sales & Other Income - 27138772.09 10654218.16

PAT (28762.93) 3051754.17 1356678.91

Equity Capital 100000 100000 100000

Reserves & Surplus - 3022991.24 4359670.15

EPS (in CHF) (0.28) 30.52 13.57

Book Value(in CHF) 0.74 30.23 43.60

MANAGEMENT OF ALEMBIC PHARMACEUTICALS LIMITED

Board of Directors

As per the Articles of Association of the Company, the Company shall not have less than 3 and unless otherwise determined by the Company in General Meeting not more than twelve directors. The Board of Directors of the Company is as follows: Name Category






Name of the Director Particulars

Mr. Chirayu Amin Director

Mr. Charles Buhlmann Director


57



Details regarding Board of Directors of the Company are given below: Sr. No.

Name, Age, Designation, Fathers' Name, Address, Occupation

Other Directorships

1. Mr. Chirayu Amin Father’s Name: Mr. Ramanbhai Amin Age : 64 years Designation : Chairman & Managing Director Address : F-10/195, Race Course Circle, Gotri Road, Vadodara- 390 007 Occupation : Industrialist

1. Alembic Limited 2. Alembic Exports Limited 3. Shreno Limited 4. Elecon Engineering Co. Ltd. 5. Federation of Indian Chamber of Commerce and Industries (Section-25 company). 6. Gujarat Flying Club (Section-25 company) 7. Paushak Limited 8. AGI Developers Limited 9. United Phosphorus Limited 10. Quick Flight Limited 11. Sierra Investments Limited 12. Sierra Healthcare Limited 13. Nirayu Private Limited 14. Alembic Europe Pvt. Ltd., UK 15. Alembic Global Holding, SA 16. Panasonic Energy India Co. Ltd.

2. Mr. R.K. Baheti Father’s name: Mr. Shreeram Baheti Age : 51 years Designation : Director-Finance & Company Secretary Address : B-2-302 Orcadia Nautilus Complex Near Sabari School Off Vasna Road Vadodara : 390015

1. Alembic Exports Limited 2. Sierra Investments Limited 3. Sierra Healthcare Limited 4. Alembic Europe Pvt. Ltd., UK


58

3.

Mr. Pranav Amin Father’s name: Mr. Chirayu Amin Age : 35 years Designation: Director & President-International Business Address: F-10/195, Race Course Circle, Gotri Road, Vadodara- 390 007 Occupation : Industrialist

1. Gujarat Flying Club(Section-25 company)

2. Quick Flight Limited 3. Incozen Therapeutics Pvt. Ltd.

4.

Mr. K.G. Ramanathan Father’s Name: Mr.Gopalkrishnan Ramanathan Age:72 years Designation: Independent Director Address :Maker Chamber-IV, 3rd Floor, Nariman Point, Mumbai-400 021. Occupation: Professional Director

Nil

5. Mr. Pranav Parikh Father’s Name: Mr. Natverlal Parikh Age : 68 years Designation : Independent Director Address : Laxmi Mills Estate, Off Dr. E. Moses Road, Mahalaxmi, Mumbai- 400 011 Occupation: Industrialist

1. TechNova Imaging Systems Pvt. Ltd. 2. TechNova Graphics Pvt. Ltd. 3. TechNova Imaging Systems Inc.USA 4. Lee & Muirhead Pvt. Ltd. 5. Lemuir Containers Pvt. Ltd. 6. AL Movers Pvt. Ltd. 7. LEFA Freight Pvt. Ltd. 8. DHL Lemuir Logistics Pvt. Ltd. 9. AL Records Management Pvt. Ltd. 10. Lemuir Packers Pvt. Ltd. 11. Shree Laxmi Wollen Mills Estate Ltd.

6. Mr. Paresh Saraiya Father’s Name: Mr. Manilal Saraiya Age :58 years Designation: Independent Director Address : 9, Charotar Society, Old Padra Road, Vadodara – 390020

Occupation: Service

1. Transpek-silox Industry Ltd. 2. Parul Chemicals Ltd. 3. Shroffs Engineering Ltd. 4. Excel Generics Limited


59

7. Mr. Milin Mehta Father’s Name: Mr. Kaimas Mehta Age : 47 years Designation: Independent Director Address: E-101/104, Rio Vista Residence, Old Padra Road, Preetvan Society, Gulabwadi, Vadodara-390 020

Occupation: Practicing Chartered Accountant

1. Startronic Investment Consultant Pvt. Ltd.

2. Gujarat Life Sciences Pvt. Ltd.


60

Brief Biography of the Directors Mr. Chirayu Amin Mr. Chirayu R. Amin is Chairman and Managing Director of the Company. He is M.B.A. from U.S.A. Mr. Chirayu Amin is the Chairman of Alembic Limited, a century old group in India, pioneer in Healthcare / Pharmaceutical Industry. The Alembic Group’s another company Shreno Limited wherein he is Chairman, is also involved in the manufacture & supply of glassware and its brand “Yera” is the brand leader in the glass industry in India for over six decades. Shreno’s Engineering Division manufactures & supplies special purpose machines & equipments for critical process requirements in the Biotechnology & Food Processing Industry, Chemicals & Pharmaceuticals Industry, Glassware Manufacturing Industry, etc. Paushak Limited wherein he is chairman, is a specialty chemicals company belonging to the Alembic group from Vadodara, India. It is listed with Bombay Stock Exchange Limited. The Company has mastered the Production of phosgene gas and phosgene based specialty Chemicals/intermediates through indigenously developed Technology. These chemicals are used in diverse fields such as Pesticides, pharmaceuticals, dyes, plastics, perfumeries etc. Mr. Chirayu Amin is former President of FICCI. He is Vice President of Board of Control of Cricket in India (BCCI) and President of Baroda Cricket Association (BCA). Besides, he is also trustee in hospital and schools of Alembic Group. Mr. R.K. Baheti Mr. R.K. Baheti is commerce graduate and a fellow member of Institute of Chartered Accountants of India. He is also a fellow member of Institute of Company Secretaries of India. He is having a wide and varied experience in finance, accounts, taxation and management function. Mr. R.K. Baheti is Director-Finance and Company Secretary of the Company. Mr. Pranav Amin Mr. Pranav Amin has done Bachelors of Science in Economics/Industrial Management from the Carnegie Mellon University in Pittsburgh, USA. He worked as a Jr. Financial Analyst at Dendrite Inc. in New Jersey, USA. Dendrite focuses on Customer Relationship Management software catering mainly to Pharmaceutical Companies. He pursued his M.B.A in International Management from Thunderbird, The American Graduate School of International Management. He is Director & President - International Business. Mr. K.G. Ramanathan

Mr. K.G. Ramanathan is a postgraduate in Physics from University of Madras and is a Retd. IAS Officer. He has worked in senior administrative positions in the State of Gujarat and also in Government of India. He has wide industrial experience particularly in the fields of fertilizers, chemicals and petrochemicals. Before his retirement from Government service, he was the Chairman and Managing Director of erstwhile Indian Petrochemicals Corporation Limited (IPCL), a prestigious petrochemical Company of India. Mr. Ramanathan is the Chairman of Chemical and Petrochemical Manufacturers Association of India since its


61

inception. He is also the founder President of Indian Centre for Plastics in the Environment (ICPE). He is also associated with several trade and industry associations and social organisations. Mr. Pranav Parikh Mr. Pranav Parikh is a Commerce Graduate and has done Business Administration Program at Harvard University, USA. He is an Industrialist and is Chairman of TechNova and Lemuir Group companies. He has vast experience as an industrialist and has been an active participant in various industrial fora and organisations. Mr. Paresh Sariaya Mr. Paresh Saraiya, is a Graduate in Mechanical Engineering with Distinction from the M.S. University of Vadodara. He is the Managing Director of Transpek-Silox Industry Limited, a joint venture Company between Silox S.A., Belgium and the Excel/Transpek Group. He has a vast experience in technical, commercial, management and corporate functions. Mr. Milin Mehta Mr. Milin Mehta is a Senior Partner of M/s. K. C. Mehta & Co., a reputed Chartered Accountants’ Firm, since more than 2 decades. He is a fellow member of the Institute of Chartered Accountants of India. He is also a Law Graduate and holds a Masters Degree in Commerce. He has also co-authored a book on “Minimum Alternate Tax” published by The Bombay Chartered Accountants’ Society. He is also active in social service and is presently heading a reputed educational institution involved in providing school education in Baroda.


62

Compensation of Managing Directors/ Whole Time Directors Mr. Chirayu Amin has been appointed as the Managing Director of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.3 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders. Mr. R.K. Baheti has been appointed as the Director-Finance & Company Secretary of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.2.50 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders. Mr. Pranav Amin has been appointed as the Director & President-International Business of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.2.50 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders. The members of the Company have at their Annual General Meeting held on 29th August, 2011 approved the appointment and remuneration of the above referred Managerial Personnel.


63

CORPORATE GOVERNANCE The provisions of the listing agreement to be entered into with the Stock Exchanges with respect to corporate governance will be applicable to the Company immediately upon the listing of its Equity Shares on the Stock Exchanges. The Company is fully compliant with the provisions of Clause 49 of the Listing Agreement. Board of Directors Name Category








Audit Committee

Director Category Member / Chairman of the Audit Committee

Mr. Paresh Saraiya Independent Director Chairman

Mr. Milin Mehta Independent Director Member

Mr. Pranav Parikh Independent Director Member SHAREHOLDERS/INVESTORS GREVIANCE COMMITTEE

Director Category Member / Chairman of the Shareholders/Investors Grievances Committee

Mr. Milin Mehta Independent Director Chairman

Mr. Paresh Saraiya Independent Director Member


64

Mr. Pranav Amin Executive-Promoter Member The role, powers, scope of functions and duties of the Audit committee and shareholders/Investors’ Grievance Committee of the Board are as per the applicable provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Since, the Company was not listed, the Clause 49 of the listing Agreement was not applicable to the Company. However the same is complied with and will be complied with continuously, with effect from the date of this Memorandum. The Directors have no interest in the transactions of the Company, otherwise than as directors of the Company and of those companies in which they are Directors. Change in Board of Directors since the Company’s inception At the time of inception, the Board of Directors of the Company consisted of three Directors Mr. Chirayu Amin, Mrs. Malika Amin and Mr. R.K. Baheti. Further, the Board of Directors at the Meeting held on 31st March, 2011 have appointed Mr. Pranav Amin, Mr. K. G. Ramanathan, Mr. Pranav Parikh, Mr. Paresh Saraiya and Mr. Milin Mehta as Additional Directors of the Company with effect from that date. Mrs. Malika Amin resigned from the directorship of the Company with effect from 1st April, 2011. Date of expiration of current term of office of Directors Mr. Chirayu Amin and Mr. R.K. Baheti were appointed as the First Directors of the Company in terms of Article 131 of the Articles of Association of the Company and their term of office as first directors will expire at the First Annual General Meeting of the Shareholders of the Company. The members of the Company have at their Annual General Meeting held on 29th August, 2011 appointed them as Directors of the Company. Mr. Chirayu Amin has been appointed as an Non-rotational Director. Mr. Chirayu Amin has been appointed as the Managing Director of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.3 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders. Mr. R.K. Baheti has been appointed as the Director-Finance & Company Secretary of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.2.50 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders. Mr. Pranav Amin has been appointed as the Director & President-International Business of the Company by the Board of Directors in their meeting held on 31/3/2011 with total maximum remuneration of Rs.2.50 Crores, for a period of 5 years with effect from 1st April, 2011 subject to approval of shareholders.


65

The members of the Company have at their Annual General Meeting held on 29th August, 2011 approved the appointment and remuneration of Mr. Chirayu Amin, Mr. R. K. Baheti and Mr. Pranav Amin. Mr. K.G. Ramanathan, Mr. Pranav Parikh, Mr. Paresh Saraiya and Mr. Milin Mehta have been appointed as Additional Directors of the Company with effect from 31st March, 2011 upto the date of ensuing Annual General Meeting of the Company. The members of the Company have at their Annual General Meeting held on 29th August, 2011 regularised their appointment as Directors of the Company Shareholding of Directors

Name of Director No. of Shares held %

Mr. Chirayu Amin 45,51,465 2.41

Mr. Pranav Amin 10,09,800 0.54

Mr. R.K. Baheti - -

Mr. K.G. Ramanathan - -

Mr. Pranav Parikh - -

Mr. Paresh Saraiya - -

Mr. Milin Mehta - - Key managerial personnel The Company is managed, controlled, and directed by the Board of Directors. The Board has appointed Mr. Chirayu Amin as Chairman & Managing Director and Mr. R.K. Baheti as Director-Finance & Company Secretary and Compliance Officer of the Company. DEMERGED COMPANY’S EMPLOYEES: On the Scheme taking effect as aforesaid, all officers and employees of the Demerged Company, engaged in the activities of the Pharmaceutical Undertaking to be transferred, in service on the Effective Date, shall become the officers and employees of the Resulting Company on such date as if they were in continuous service without any break or interruption in service and on the terms and conditions as to remuneration not less favourable than those subsisting with reference to the Demerged Company as on the said date.

It is expressly provided that as far as Provident Fund, Gratuity Fund, Pension Fund and/or Superannuation Fund or Trusts created by the Pharmaceutical Undertaking of the Demerged Company or any other special funds / Scheme(s) created or existing for the benefit of the officers and employees of the Pharmaceutical Undertaking are concerned, upon the Scheme becoming effective, the Resulting Company shall stand substituted for the Demerged Company for all purposes whatsoever related to the administration or operation of such Scheme(s)/Fund(s) or in relation to the obligation to make contribution to the said Schemes/Funds in accordance with the provisions of such Schemes/Funds as per the terms provided in the respective Trust Deeds. It is the end intent that all the rights, duties, powers and obligations of the Pharmaceutical Undertaking of the Demerged Company in relation to such fund shall become those of the Resulting Company. It is


66

clarified that the services of the officers and employees of the Pharmaceutical Undertaking of the Demerged Company will be treated as having been continuous without any break or interruption for the purpose of aforesaid Schemes/Funds. It is however, clarified that the Resulting Company shall be eligible and entitled to effect the transfer of the officers and employees of the Pharmaceutical Undertaking of the Demerged Company in ordinary and usual course of business and as per business prudence, the Board of Directors of the Resulting Company shall be eligible to re-assess and to re-allocate any of the activity undertaken by the employees of the Pharmaceutical Undertaking of the Demerged Company. Upon the Scheme taking effect, the Pharmaceutical Undertaking of the Demerged Company shall stand substituted by The Resulting Company for all purposes whatsoever in relation to the administration of or obligations, right, duties (including under the respective Deeds pertaining thereto) and liabilities under or in respect of or pertaining to the Provident Fund, Gratuity Fund, Superannuation Fund, pension scheme or any other scheme or fund created or existing for the benefit of the employees or officers of the business of Pharmaceutical Undertaking of the Demerged Company. All officers and employees of the Demerged Company engaged in the activities of the Vadodara Undertaking and the Remaining Undertaking shall continue to remain in service with Demerged Company. All other employees of the Demerged Company working at the Registered Office who could not be specifically identified for the Pharmaceutical Undertaking, will provide their services to Resulting Company for a period up to 24 months on such terms and conditions as may be mutually agreed between the Resulting Company and the Demerged Company. PROMOTERS Before the Scheme becoming effective, the Company was a wholly owned subsidiary of Alembic Limited. Pursuant to the Scheme becoming effective, the Company has allotted equity shares to the shareholders of Alembic Limited. Thus, the shareholding of Alembic Limited in Alembic Pharmaceuticals Limited has reduced from 100% to 29.18%. Alembic Limited, Mr. Chirayu Amin and Mrs. Malika Amin are the promoters of Alembic Pharmaceuticals Limited. Details of Promoters Alembic Limited Alembic Limited was formed in the year 1907. The Founder Promoters of Alembic Limited are H.H. Maharaja Sayajirao Gaekwar, Professor T.K. Gajjar, Professor A.S. Kotibhasker and Rajmitra B.D. Amin. The Company is in the business of manufacturing and marketing of pharmaceutical products since 1950. The company has received a prestigious award “Dr. P.C. Ray Award” for Quality. The Company is pioneer in manufacturing penicillin through fermentation process by developing indigenous know-how. Over the years, the company has also developed other bulk drugs like Erythromycin, Roxithromycin, Azithromycin, etc. The company was also in the formulations market and was producing number of items in therapeutic segments of which some of the products are the market leaders. The Company also makes exports and has also won awards from CHEMEXIL for export performance in the year 1991-92. It has also been recognized as Export House by Government of India. The Company has got ISO-9002 Certification from an Accreditation Agency for


67

manufacture and marketing of Bulk Drugs and Formulations for domestic and exports markets. The Company has also received ISO-14001 certificate and has taken various initiatives that are directed towards a cleaner environment through waste minimization, efficiency improvement and resource conservation. Alembic Ltd. is a leading pharmaceutical company in India. The company is vertically integrated with the ability to develop, manufacture and market pharmaceutical products, pharmaceutical substances and Intermediates. Alembic was the market leader in Macrolides segment of anti-infective drugs in India. Glycodin (cough syrup) and Althrocin (Erythromycin) Azithral (Azithromycin), Wikoryl, Roxid are some of the leading brands of the company. Alembic’s manufacturing facilities are located in Vadodara, Gujarat. The plant at Vadodara has the largest fermentation capacity in India. As per the scheme of arrangement, the Pharmaceutical Undertaking is demerged from Alembic Limited and the same is merged into Alembic Pharmaceuticals Limited with effect from 1st April, 2010. Alembic Limited shall continue its business of manufacturing and marketing of fermentation and chemistry based Active Pharmaceuticals Ingredients (API) at Vadodara Undertaking, power infrastructure, investments and real estate development. Mr. Chirayu Amin

Mr. Chirayu R. Amin is Chairman and Managing Director of the Company. He is M.B.A. from U.S.A. Mr. Chirayu Amin is the Chairman of Alembic Limited, a century old group in India, pioneer in Healthcare / Pharmaceutical Industry. The Alembic Group’s another company Shreno Limited wherein he is Chairman, is also involved in the manufacture & supply of glassware and its brand “Yera” is the brand leader in the glass industry in India for over six decades. Shreno’s Engineering Division manufactures & supplies special purpose machines & equipments for critical process requirements in the Biotechnology & Food Processing Industry, Chemicals & Pharmaceuticals Industry, Glassware Manufacturing Industry, etc. Paushak Limited wherein he is chairman, is a specialty chemicals company belonging to the Alembic group from Vadodara, India. It is listed with Bombay Stock Exchange Limited. The Company has mastered the Production of phosgene gas and phosgene based specialty Chemicals/intermediates through indigenously developed Technology. These chemicals are used in diverse fields such as Pesticides, pharmaceuticals, dyes, plastics, perfumeries etc.


68

Mr. Chirayu Amin is former President of FICCI. He is Vice President of Board of Control of Cricket in India (BCCI) and President of Baroda Cricket Association (BCA). Besides, he is also trustee in hospital and schools of Alembic Group. Mrs. Malika Amin

Mrs. Malika C. Amin is Master of Arts. She has been working with Alembic Limited since 1988. Mrs. Amin is having extensive experience in corporate management, HRD and General Administration. By virtue of Mr. Chirayu Amin and Mrs. Malika Amin being the Promoter of the Company, the following are derived as promoters of the Company in terms of SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 1997: Chirayu R. Amin-HUF Mr.Pranav C. Amin Mr.Shaunak C. Amin Mr.Udit C. Amin Ms. Samira Pranav Amin Ms. Naintara Shaunak Amin Master Ranvir Amin Mrs.Jyotiben S. Patel Ms.Yera R. Amin Mrs.Ninochaka A. Kothari Mr.Anup Kothari Mrs.Shreya R. Mukherjee Dr.Babubhai R. Patel Alembic Limited Whitefield Chemtech P.Ltd. Viramya Packlight Ltd. Nirayu Private Ltd. Paushak Limited Shreno Ltd. Sierra Investments Ltd. Arogyavardhini Society Utkarsh Vidya Kendra Ujjwal Vidyalaya Vidyanidhi Trust CURRENCY OF PRESENTATION In this Information Memorandum all references to ‘Rupees’ and ‘Rs’ are to Indian Rupees, the legal currency of India.


69

DIVIDEND POLICY There is no set dividend payment policy. Dividend is intended to be declared based on the quantum and availability of future profits and will be disbursed based on shareholder approval based on the recommendation of the Board of Directors. The Company has declared and paid dividend of Re. 1 per equity share having face value of Rs. 2/- each (i.e., 50%) for the year ended on 31st March, 2011. The dividend was paid on 2nd September, 2011.


70

SECTION-V

FINANCIAL INFORMATION

FINANCIAL RESULTS FOR THE YEAR ENDED ON 31ST MARCH, 2011


71


72


73


74


75


76


77


78


79


80


81


82


83


84


85


86


87


88


89


90


91


92


93


94


95


96


97


98


99


100


101


102


103


104


105


106


107


108


109


110


111


112


113

FINANCIAL RESULTS FOR THE QUARTER ENDED ON 30TH JUNE, 2011


114


115


116


117


118

MANAGEMENT DISCUSSIONS AND ANALYSIS INDUSTRY PERSPECTIVE The Indian Pharmaceutical Industry has been largely resilient to the economic challenges. The Global Pharmaceutical Market is expected to grow between 5 & 7% in 2011. Indian Pharmaceutical industry grew at healthy 18% in last year and is likely to sustain current growth momentum (14-15% versus historical run-rate of 10-12% over FY09-10). The Indian economy is expected to emerge as the fastest growing economy by 2013 and to be the 3rd largest economy by 2050 (Source: BRICs Report, Goldman Sachs). The GDP growth will be driven by both exports and domestic consumption. The current spending on healthcare [public and private] is estimated at 6% of GDP and expected to increase to 10% of GDP by 2016. The market remains dominated by acute therapies; however chronic segments such as Cardio Vascular, Diabetes, Central Nervous System and specialty segments like Oncology are growing faster at 18-19% versus the current industry growth of 15% (MAT March 2011). India is also emerging as a low-cost, high quality option for outsourcing of research, manufacturing and other services. This offers a great opportunity for the Indian pharmaceutical industry and Indian pharma companies. The Global pharmaceutical Industry is witnessing a growing importance of generics. The Pharmaceutical Industry continues to remain fragmented and competitive especially due to increased genericisation. Global pharmaceutical market intelligence company IMS Health believes the Indian generic manufacturers will grow at a faster clip as drugs worth approximately $170 billion will go off patent in 2015. In fact, with nearly $105 billion worth of patent-protected drugs to go off-patent (including 30 of the best selling US patent-protected drugs) by 2012, Indian generic manufacturers are positioning themselves to offer generic versions of these drugs. With drugs going off patent each year, generics represent a major outsourcing opportunity for pharmaceutical producers in India. The global pharmaceutical outsourcing market is rapidly growing.

BUSINESS

DOMESTIC FORMULATION BUSINESS :

The domestic formulation business is a very critical component of Alembic’s business. Alembic has built an important relationship with doctors and is known as the leading company in Macrolides as well as other acute therapies. Alembic


119

has now made a mark in some specialized therapies such as Diabetology, Cardiology and Gynaecology as well. The company continues to make investment in the domestic branded business, particularly with the newer specialty segments. The Company has also renewed its focus on penetrating rural segment which we believe will be the next growth driver for us. The positive impact of the restructuring undertaken in the recent years is evident from the fact that company registered 19% growth in primary numbers in FY 10-11. INTERNATIONAL BUSINESS : Alembic’s export formulation business to regulatory markets of US, Canada and Europe recorded a stellar performance during the year to reach turnover of Rs. 174 crores and registered 70% growth over last year. During the year Company launched 3 ANDA’s in USA market. The Company has filed 38 Abbreviated New Drug Applications (ANDAs) and 53 Drug Master Files (DMFs) and received approvals for 15 ANDA’s. Alembic’s strategy in International Generics is to partner with International Generic companies and leverage on their marketing and sales capabilities. Alembic typically shares the investment and return with the marketing partners and this helps de-risk its ANDA programme and reduces the upfront investment in the development stage FINANCE : The Company has registered a standalone total income of Rs.1164.92 Crores for the year under review. The standalone Profit, before providing for Interest, Depreciation, Nonrecurring Income, expenses and Taxes, was Rs.155.73 Crores for the year under review. The Company has made a standalone profit after tax of Rs.81.50 Crores for the year under review. The Company has registered a consolidated total income of Rs.1202.04 Crores for the year under review. The consolidated Profit, before providing for Interest, Depreciation, Nonrecurring Income, expenses and Taxes, was Rs.160.25 Crores for the year under review. The Company has made a consolidated profit after tax of Rs.85.39 Crores for the year under review. OUTLOOK: It has been witnessed by the domestic pharmaceutical industry that with increase in GDP and per capita income, more customers are able to afford organized healthcare. This is very important and advantageous for a company like Alembic which has strength in the acute therapy segments since Alembic has started the consolidation process for its product line in the lifestyle dieses segment also and is registering growth. It is also looking at various other high growth and niche areas in the domestic segment. Alembic has had a history of having a very good equity with its customers and has successfully built up quite a few large brands.


120

With India becoming a hub for manufacturing and research operations, Alembic looks to get significant growth from this area as well. Our manufacturing facilities have passed successful inspections from regulatory bodies from all over the world and testimony to that is USFDA status being confirmed to both API and Solid Dosage facilities. Our research labs are well equipped to develop new products and formulations. Low cost of products and strong Intellectual Property are going to be the two most important drivers in the International Generics Markets. Timely and accelerated quality filling ANDAs / DMF’s will be key to Alembic’s success in these advanced markets. Alembic has strived to show excellence in both these areas in development as well as manufacturing. It is a focused approach on these two which will give Alembic’s Future plans a fillip. INTERNAL CONTROL SYSTEMS AND ADEQUACY: The Company maintains a system of well established policies and procedures for internal control of operations and activities. The internal audit function is further strengthened in consultation with statutory auditors for monitoring statutory and operational issues. The Company has appointed M/s. Sharp & Tannan, Chartered Accountants, as Internal Auditors. The prime objective of this audit is to test the adequacy and effectiveness of all internal control systems and suggest improvements. Significant issues are brought to the attention of the audit committee for periodical review HUMAN RESOURCE INTERVENTION IN 2010-11: Success of a growing organization is the resultant endeavor of a dedicated team setting stretch targets to push prospects for advancement. The potential and ability to deliver consistently is evident from the consistent growth of your company. Your directors appreciate the valuable contribution of its employees towards the progress we report every year. This year, amongst other initiatives, a newly designed talent screening workshop greatly helped recognize internal talent more systematically, as also a competency grid administered jointly with line functions strengthening selection processes. Conscious investment on training and development continue to enhance competency levels to foster a performance driven culture. As always, performance orientation, innovation and meritocracy remain high priority areas, and your company continues to afford an enabling work environment and opportunities for career advancement. Industrial relations at Alembic too continue to be harmonious. HEALTH, SAFETY, SECURITY AND ENVIRONMENT: Health, Safety, Security and Environment is at the core of our business and all employees are accountable for it. Alembic’s operations follow the best industry practices as regards to Health, Safety, Security and Environment. During the


121

year under review, safety audits were carried out by third party & all observations / suggestions were implemented. Environmental audits (statutory) were carried out & submitted to pollution control boards for their review. ETP upgradation was done with a capital investment of around Rs. 125 lacs. Alembic carried out the following activities as part of its annual plan:

a. Basic safety training was imparted to all factory employees including temporary workers. Safety and technical competency development programmes were carried out to improve competencies of employees and employees of contractors for safety critical jobs.

b. Work place inspections were carried out by executives and managers at all levels. Senior management team members demonstrated leadership commitment through work place inspections.

c. Tree plantation across premises and factories. d. Safety Infrastructure enhanced by addition of auto control systems. e. Conducted employee motivation and participation programme for EHS. f. Efforts continued for reduction / recycle / reuse of waste. g. Energy conservation measures taken.

CONTRIBUTION TO SOCIETY: Alembic is committed to enhancing the quality of life in and around the community it operates in. During the year under review, the Company undertook a number of development projects with a focus on health, education and vocational training. The Company has a rural development society started in 1980. This is located near Panelav in the foothills of Pawagadh. The Objective is to provide self employment opportunities through vocational training and education for adults and children in 50 villages in the vicinity. GROUP COMPANIES The details of other listed companies in the Group are as under: 1. Alembic Limited

Date of Incorporation: Alembic Limited was incorporated on 30th July, 1907.

Principal Business: Alembic Limited is engaged in the business of manufacturing, marketing of fermentation based APIs and chemistry based APIs and real estate development activities. Shareholding Pattern of Alembic Limited as on 30/06/2011:


122

Category No. of shares held % of Shareholding

A Promoter Holding 8,47,52,825 63.48%

B Public Holding 4,87,63,089 36.52%

Total 13,35,15,914 100.00% Capital Structure of Alembic Limited

Authorized Share Capital Pre Demerger (Rs.)

Post Demerger (Rs.)

22,50,00,000 Equity Shares of Rs.2/- each 45,00,00,000 -

5,00,000 Redeemable Cumulative Preference Shares of Rs.100/- each

5,00,00,000 -

15,00,00,000 Equity Shares of Rs.2/- each - 30,00,00,000



26,70,31,828

-

13,35,15,914 Equity Shares of Rs.2/- each 26,70,31,828

Board of Directors of Alembic Limited:


Mr. Chirayu Amin Chairman

Mrs. Malika Amin Whole time Director

Mr. Ashok Tulankar Additional Director / Executive

Dr. B.R. Patel Independent Director

Mr. Milin Mehta Independent Director

Mr. R. M. Kapadia Independent Director


123

Financial performance of the Company:

(Rs. In crores except for EPS and Book Value) Particulars 2006-07 2007-08 2008-09 2009-10 2010-11

Sales & Other Income 709.56 1015.00 1107.10 1025.81 204.55

PAT 70.68 112.19 7.28 20.68 (12.90)

Equity Capital 27.69 27.69 27.44 26.70 26.70

Reserves & Surplus 357.23 313.67 299.55 289.03 182.66

EPS (Rs.) 5.10 8.10 0.53 1.53 -

Book Value(Rs.) 27.80 24.66 23.83 23.64 -

Details of listing and Highest & Lowest market price during the preceding six months: Equity Shares of Alembic Limited are listed at the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Monthly High & Low price of the Equity Shares of Alembic Limited at BSE & NSE for Last six months and last three financial years: [Alembic Limited’s shares were traded ex-entitlement (of Alembic Pharmaceutical Limited’s shares) w.e.f. 11/4/2011 consequent to fixing of Record date for the purpose.]

BSE NSE Month

High Rs. Low Rs. High Rs. Low Rs.

March, 2011 75.70 61.05 77.90 60.65

April, 2011 74.50 19.10 74.50 19.35

May, 2011 22.95 18.70 22.95 18.70

June, 2011 20.60 17.60 20.80 17.55

July, 2011 25.40 18.90 25.35 18.75

August, 2011 22.65 17.60 22.90 17.60

BSE NSE

High Rs. Low Rs. Average Rs. High Rs. Low Rs. Average Rs.

2011 75.7 17.6 38.88 77.90 17.55 39.42


124

2010 77.25 43.00 60.13 77.45 43.05 60.25

2009 56.25 29.65 42.95 56.30 29.50 42.90

2008 101.00 24.75 62.88 100.90 21.00 60.95

2. Paushak Limited Date of Incorporation: Paushak Limited was incorporated on 6th May, 2010.

Principal Business: The Company is a specialty chemicals company belonging to the Alembic group from Vadodara, India. The Company has mastered the Production of phosgene gas and phosgene based specialty Chemicals/intermediates through indigenously developed Technology. These chemicals are used in diverse fields such as Pesticides, pharmaceuticals, dyes, plastics, perfumeries etc. Shareholding Pattern of Paushak Limited as on 30/6/2011: Category No. of shares held % of Shareholding

A Promoter Holding 21,39,258 66.70%

B Public Holding 10,67,856 33.30%

Total 32,07,114 100.00%

Capital Structure of Paushak Limited

Share Capital

Amount (Rs.)

Authorized Share Capital 90,00,000 Equity Shares of Rs.10/- each 9,00,00,000 11,00,000 Redeemable Cumulative Preference Shares of Rs.100/- each

11,00,00,000

Total 20,00,00,000


32,07,114 Equity Shares of Rs.10/- each 3,20,71,140

Total 3,20,71,140

Board of Directors of Paushak Limited:


125


Mr. Chirayu R. Amin Chairman

Mrs. Malika C. Amin Promoter Non Executive Director

Mr. Udit C. Amin Promoter Non Executive Director

Mr. Amit Goradia Non Executive Director

Mr. Santosh Jejurkar Non Executive Director

Consequent to the resignation of Mr. R. M. Kapadia from the Board of Paushak Limited w.e.f. 25.04.2011, Paushak Limited will be required to appoint one more independent Director to comply with the provisions of the Corporate Governance. As per the provisions of Corporate Governance, the Company may appoint independent director within 180 days from the date of resignation of the independent director. Therefore, Alembic Limited will appoint an independent Director on its Board on or before 25th October, 2011.

Financial performance of the Company:

(Rs. In crore except for EPS and Book Value)

Details of listing and Highest & Lowest market price during the preceding six months: Equity Shares of Paushak Limited are listed at the Bombay Stock Exchange Limited. Monthly High & Low price of the Equity Shares of Paushak Limited at BSE for Last six months and last 3 financial years:

Month BSE

Particulars 2006-07 2007-08 2008-09 2009-10 2010-11

Sales & Other Income 21.74 22.28 28.86 25.89 30.80

PAT 2.42 3.13 3.50 2.14 3.70

Equity Capital 3.21 3.21 3.21 3.21 3.21

Reserves & Surplus 15.17 18.29 21.04 22.43 25.39

EPS (Rs.) 7.32 9.75 10.92 6.67 11.53

Book Value(Rs.) 47.80 57.55 66.12 70.46 95.83


126

High Rs. Low Rs.

March, 2011 122.70 66.00

April, 2011 83.60 71.00 May, 2011 76.50 62.00 June, 2011 69.90 60.55 July, 2011 71.95 61.80 August, 2011 69.75 55.05

BSE High Rs. Low Rs. Average Rs.2011 122.70 55.00 96.46 2010 109.65 50.05 79.85 2009 80.20 22.00 51.10 2008 104.70 25.40 65.05

KEY INVESTMENTS:

The Pharmaceutical Undertaking merged with Alembic Pharmaceuticals Limited also includes the following key investments:

1. Investments in the share capital of Incozen Therapeutics Private Limited.(1000000 equity shares of the face value of Rs.10/- each).

2. Investments in the share capital of Alembic Global Holding SA, a wholly owned subsidiary company in Switzerland (100000 equity shares of the face value of CHF 1 each).


127

SECTION VI LEGAL & OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS In relation to the Company, persons named as Promoters, Directors, and the companies/firms promoted by the Promoters, to the best of knowledge of the Company, there are no outstanding material litigations against or any material disputes for tax liabilities, non payment of statutory dues, overdue to banks / financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits and arrears on cumulative preference shares issued by the Company, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII to the Companies Act, 1956), no disciplinary action has been taken by SEBI / Stock Exchanges against the Company, its Directors, its promoters, and the companies/firms promoted by the Promoters. The contingent liabilities of the Company have been disclosed in the Annual Report/Financial Information/Risk Factors. GOVERNMENT APPROVALS The Company has received all the necessary permissions and approvals from the Government and various Government agencies for the existing activities. No further approvals from any Government authority/Reserve Bank of India (RBI) are required by the Company to undertake the existing activities, save and except those approvals, which may be required to be taken in the normal course of business from time to time.


128

SECTION VII

OTHER REGULATORY AND STATUTORY DISCLOSURES

REGULATORY AND STATUTORY DISCLOSURES Authority for the Scheme The Honorable Gujarat High Court by its Order dated 24/1/2011 issued on 21/3/2011 has approved the Scheme of Arrangement between Alembic Limited and Alembic Pharmaceuticals Limited and their respective shareholders and creditors (the “Scheme”). Prohibition by SEBI The Company, its directors, its promoters, other companies promoted by the promoters and companies with which the Company’s directors are associated as directors have not been prohibited from accessing the capital markets under any order or direction passed by SEBI. Caution The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements to be published in terms of SEBI circular No.CFD/SCRR/01/2009/03/09 dated September 3, 2009 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. All information shall be made available by the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner. Disclaimer Clause of the BSE As required, a copy of this Information Memorandum has been submitted to BSE. The BSE has vide its letter dated July 16, 2010 has approved the said Scheme under Clause 24(f) of the Listing Agreement and subsequently BSE has given its in-principle approval for listing of equity shares of the Company vide its letter no. DCS/AMAL/BS/IP/107/2011-12 dated May 16, 2011 and by virtue of that approval the BSE’s name in this Information Memorandum has been incorporated as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. The BSE does not in any manner: warrant, certify or endorse the correctness or completeness of any of the

contents of this Information Memorandum; or


129

warrant that this Company’s securities will be listed or will continue to be

listed on the BSE; or take any responsibility for the financial or other soundness of this

Company, its promoters, its management or any scheme or project of this Company;

and it should not for any reason be deemed or construed to mean that

this Information Memorandum has been cleared or approved by the BSE. Every person who desires to acquire any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Disclaimer Clause of the NSE As required, a copy of this Information Memorandum has been submitted to NSE. The NSE has vide its letter dated July 26, 2010, has approved the said Scheme under Clause 24(f) of the Listing Agreement and subsequently NSE has given its in-principle approval for listing of equity shares of the Company vide its letter no. NSE/LIST/166580-J dated May 31, 2011 and by virtue of that approval the NSE’s name in this Information Memorandum has been incorporated as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. As required, a copy of the Information Memorandum has been submitted to NSE. It is to be distinctly understood that it should not in any way be deemed or construed that this Information Memorandum has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Information Memorandum; nor does it warrant that our securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company. Every Person who desires to acquire any of our securities may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Filing Copies of this Information Memorandum have been filed with BSE and NSE.


130

Listing Applications will be made to BSE & NSE for permission to deal in and for an official quotation of the Equity Shares of the Company The Company has nominated BSE as the Designated Stock Exchange for the aforesaid listing of the shares. The Company shall ensure that all steps for the completion of necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above. Demat Credit The Company has executed Agreements with NSDL and CDSL for admitting its securities in demat form. On 15/4/2011 the Company made allotment of the equity shares and such shares were credited in demat form by NSDL on 27/4/2011 and by CDSL on 27/4/2011 to the respective demat account of those shareholders who have provided necessary details to the Company and/or who were holding their shares in Alembic Limited in demat form and/or of those shareholders who have opted to receive the shares in demat form, as on the Record Date. Despatch of Share Certificates Upon allotment of Shares to eligible shareholders pursuant to the Scheme on 15/4/2011 the Company dispatched share certificates on 23/4/2011 to those shareholders who were holding shares in Alembic Limited in physical form and have not opted to receive shares in demat form, as on the Record Date. Share Certificates to drop cases reported by the depositories were dispatched on 29/4/2011. Expert Opinions Save as stated elsewhere in this Information Memorandum, we have not obtained any expert opinions. Previous rights and public issues The Company has not made any public or rights issue since incorporation. Commission and brokerage on previous issues Since the Company has not issued shares to the public in the past, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since its


131

inception. Companies under the Same Management Save and except Alembic Limited and Paushak Limited there is no other listed company under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act. Promise vis-à-vis performance This is for the first time the Company is being listed on the Stock Exchange. Disposal of Investor Grievances Link Intime India Private Limited is the Registrars and Transfer Agents of the Company. Documents/Letters are also received from the Investors directly at i ts Vadodara O f f i ce by courier/post. All documents are received at the inward department, where the same are classified based on the nature of the queries/actions to be taken and coded accordingly. The documents are then electronically captured before forwarding to the respective processing units. The Company has appointed Mr. R.K. Baheti, Company Secretary as the Compliance Officer and he may be contacted in case of any queries. He can be contacted at the following address: Alembic Pharmaceuticals Limited Alembic Road, Vadodara-390 003 Tele No.(0265) 2280550/3007973 Fax No.(0265) 2282506 Email : [email protected] Articles of Association of Alembic Pharmaceuticals Limited Articles of Association comply with the requirements of the Companies Act, 1956, other relevant laws and the requirements of the Listing agreement. The relevant provisions of Articles of Association of the Company are as under:

TABLE A NOT TO APPLY 1. Table ’A’ not to apply but Company to be governed by these Articles. The

regulations contained in Table ’A’ in Schedule I of the Companies Act, 1956 shall not apply to the Company but the regulations for the


132

Management of the Company and for the observance of the members thereof and their representatives shall subject to any exercise of the statutory powers of the Company with reference to the repeal or alteration of or addition to its regulations by Special Resolution, as prescribed by the Companies Act, 1956, be such as are contained in these Articles.

CALLS 33. Directors may make call Subject to the provisions of Section 91 of the Act, the Board of Directors may

from time to time by a resolution passed at a meeting of a board (and not by a circular resolution), make such calls as it thinks fit upon the members in respect of all moneys unpaid on shares whether on account of the nominal value of shares or by way of premium, held by them respectively and not by conditions of allotment thereof made payable at fixed time and each member shall pay the amount of every call so made on him to the person or persons and at the times and places appointed by the Board of Directors. A call may be made payable by installments. A call may be postponed or revoked as the Board may determine.

34. Notice of calls Not less than thirty days notice in writing of any call shall be given by the

Company specifying the time and place of payment and the person or persons to whom such call shall be paid.

35. When call deemed to have been made A call shall be deemed to have been made at the time when the resolution

authorizing such call was passed at a meeting of the Board of Directors and may be made payable by the members on such date at the discretion of the Directors or such subsequent date as shall be fixed by the Board of Directors.

36. Directors may extend time The Board of Directors may from time to time at its discretion, extend the time

fixed for the payment of any call and may extend such time to call on any of members, the Board of Directors may deem fairly entitled to such extension, but no member shall be entitled to such extension as of right except as a matter of grace and favour.

37. Amount payable at fixed time or by installment to be treated as calls If by the terms of issue of any share or otherwise any amount is made payable at

any fixed time or by installments at fixed time (whether on account of the amount of the share or by way of premium) every such amount or installment shall be payable as if it were a call duly made by the Directors and of which due notice has been given and all the provisions herein contained in respect of calls shall apply to such amount or installment accordingly.

38. When interest on call or installment payable If the sum payable in respect of any call or installment be not paid on or before

the day appointed for the payment thereof, the holder for the time being or allottee of the shares in respect of which the call shall have been made or the installment shall be due, shall pay interest on the same at such rate not exceeding eighteen per cent per annum as Directors shall fix from the day appointed for the payment thereof up to the time of actual payment but the Directors may waive payment of such interest wholly or in part.

39. Evidence in actions by Company against shareholders


133

On the trial or hearing of any action or suit brought by the Company against any member or his legal representatives for the recovery of any moneys claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of the members in respect of whose shares the money is sought to be recovered and entered on the register of member as the holder or as one of the holders at or subsequent to the date at which the money sought to be recovered is alleged to have become due on the shares in respect of which the money is sought to be recovered that the resolution making the call is duly recorded in the minute book and the notice of such call was duly given to the member or his legal representatives sued in pursuance of these Articles and it shall not be necessary to prove the appointment of Directors who made such call, not that quorum of Directors was present at the Board at which any call was made not that the meeting at which any call was made was duly convened or constituted, nor any other matter whatsoever but the proof of the matters aforesaid shall be conclusive evidence of the debt.

40. Payment in anticipation of calls may carry interest The Board of Directors may, if it thinks fit, agree to and receive from any member

willing to advance the same all or any part of the amount due upon the shares held by him beyond the sums actually called for and upon the moneys so paid up in advance or so much thereof, from time to time and at any time thereafter as exceeds the amount of the calls then made upon and in respect of its shares on account of which such advances are made, the Board of Directors may pay or allow interest at such rate not exceeding, unless the Company in General Meeting shall otherwise direct, fifteen percent per annum as the member paying the sum in advance and the Board of Directors agree upon. The Board of Directors may agree to repay at any time any amount so advanced or may at any time repay the same upon giving to such members three months notice in writing. Money so paid in advance of the amount of calls shall not confer a right to participate in profit or dividend. No member paying any such sum in advance shall be entitled to voting rights in respect of the moneys so paid by him until the same would but for such payment become presently payable.

41. Company to have lien on shares The Company shall have a first and paramount lien upon all shares (other than

fully paid up shares registered in the name of each member, whether solely or jointly with others) and upon the proceeds of sale thereof, for all moneys (whether presently payable or not), called or payable at a fixed time in respect of such shares and no equitable interests in any share shall be created except upon the footing and condition that this Article is to have full legal effect. Any such lien shall extend to all dividends from time to time declare in respect of shares, PROVIDED THAT the board of directors may, at any time, declare any share to be wholly or in part exempt from the provisions of this article.

42. As to enforcing lien by sale The Company may sell, in such manner as the Board thinks fit, any shares on

which the Company has a lien for the purpose of enforcing the same PROVIDED THAT no sale shall be made: (a) Unless a sum in respect of which the lien exists I presently payable or (b) Until the expiration of fourteen days after a notice in writing stating and

demanding payment of such part of the amount in respect of which the lien exists as is presently payable has been given to the registered holder for the


134

time being of the share or the person entitled thereto by reason of his death or insolvency.

For the purpose of such sale, the Board may cause to be issued a duplicate certificate in respect of such shares and may authorise one of their members to execute a transfer thereof on behalf of and in the name of such members.

(c) The purchaser shall not be bound to see the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

43. Application of proceeds of sale (a) The net proceeds of any such sale shall be received by the Company and

applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable and

(b) The residue, if any, after adjusting costs and expenses, if any, incurred shall be paid to the person entitled to the shares at the date of the sale (subject to a like lien for sums not presently payable existed on the shares before the sale.)

FORFEITURE OF SHARES 44. If money payable on share not paid notice to be given If any member fails to pay the whole or any part of any call or any instalment of a

call on or before the day appointed for the payment of the same or any such extension thereof, the Board of Directors may, at any time thereafter, during such time as the call for installment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.

45. Sum payable on allotment to be deemed a call For the purposes of the provisions of these presents relating to forfeiture of

shares, the sum payable upon allotment in respect of a share shall be deemed to a call payable upon such share on the day of allotment.

46. Form of Notice The notice shall name a day (not being less than one month from the day of the

notice) and a place or places on and at which such call or installment and such interest thereon at such rate not exceeding eighteen percent per annum as the Directors may determine and expenses as aforesaid are to be paid. The notice shall also state that in the event of the non-payment at or before the time and at the place appointed, shares in respect of which the call was made or installment is payable will be liable to be forfeited-

47. In default of payment shares to be forfeited If the requirements of any such notice as aforesaid are not complied with, any

share or shares in respect of which such notice has been given may at any time thereafter before payment of all calls or installments, interests, and expenses due in respect thereof, be forfeited by a resolution of the Board of Directors to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited shares and not actually paid before the forfeiture.

48. Notice of forfeiture to a member When any share shall have been so forfeited, notice of the forfeiture shall be

given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall forthwith be made in the


135

Register of Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

49. Forfeited share to be the property of the Company and may be sold Any share so forfeited, shall be deemed to be the property of the Company and

may be sold, reallotted or otherwise disposed off, either to the original holder or to any other person, upon such terms and in such manner as the Board of Directors shall think fit.

50. Member still liable to pay money owing at the time of forfeiture and interest Any member whose share have been forfeited shall notwithstanding the forfeiture

be liable to pay and shall forthwith pay to the Company on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding eighteen percent per annum as the Board of Directors may determine and the Board of Directors may enforce the payment of such moneys or any part thereof, if it thinks fit, but shall not be under any obligation to do so.

51. Effect of forfeiture The forfeiture of a share shall involve the extinction at the time of the forfeiture of

all interest in and al claims and demand against the Company in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved.

52. Power to annul forfeiture The Board of Directors may at any time before any share so forfeited shall have

been sold, reallotted or otherwise disposed off, annual the forfeiture thereof upon such conditions as it thinks fit.

53. Declaration of Forfeiture (a) A duly verified declaration in writing that the declament is a Director, the

Managing Director or the Manager or the Secretary of the Company and that a share in the Company has been duly forfeited in accordance with these Articles, on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

(b) The Company may receive the consideration, if any, given for the share on any sale, re-allotment or other disposal thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed off.

(c) The person to whom such share is sold, reallotted or disposed off shall thereupon be registered as the holder of the share.

(d) Any such purchaser or allottee shall not (unless by express agreement) be liable to pay any calls, amounts, installments, interest and expenses owing to the Company prior to such purchase or allotment nor shall be entitled (unless by express agreement) to any of the dividends, interests or bonuses accrued or which might have accrued upon the share before the time of completing such purchase or before such allotment.

(e) Such purchaser or allottee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be effected by the irregularity or invalidity in the proceedings in reference to the forfeiture, sale, re-allotment or other disposal of the shares.


136

54. Provisions of these Articles as to forfeiture to apply in case of non-payment of any sum.

The provisions of these Articles as to forfeiture shall apply in the case of nonpayment of any sum which by the terms of issue of a share becomes payable at a fixed time, whether on account of the nominal value of a share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

55. Cancellation of share certificate in respect of forfeited shares Upon, sale, re-allotment or other disposal, under the provisions of these Articles,

the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a new certificate or certificates in respect of the said shares to the person or persons entitled thereto.

56. Surrender of Shares The Directors may, subject to the provisions of the Act, accept a surrender of any

share from any member desirous of surrendering on such terms and conditions as they think fit.

TRANSFER AND TRANSMISSION OF SHARES 57. No transfer to minor The Board shall not issue or register a transfer of any shares for a minor (except

in case when they are fully paid) or insolvent or person of unsound mind. 58. Form of transfer The instrument of transfer of any share shall be in the prescribed form under the

companies (Central Government) General Rules and Forms, 1956 and in accordance with the requirements of Section 108 of the Act.

59. Application for transfer (a) An application for registration of a transfer of the shares in the Company may

be either by the transferor or the transferee. (b) Where the application is made by the transferor and relates to partly paid

shares, the transfer shall not be registered unless the Company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.

(c) For the purpose of clause (b) above, notice to the transferee shall be deemed to have been duly given if it is dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been duly delivered at the time at which it would have been delivered in the ordinary course of post.

60. Execution of transfer The instrument of transfer of any share shall be duly stamped and executed by or

on behalf of both the transferor and the transferee and shall be attested. The transferor shall be deemed to remain the holder of such share until the name of the transferee shall have been entered in the Register of Members in respect thereof.

PROVIDED THAT registration of a transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except where the Company has a lien on shares.


137

61. Transfer by legal representatives Transfer of share in the Company of a deceased member thereof made by his

legal representative shall, although the legal representative is not himself a member, be as valid as if he had been a member at the time of the execution of the instrument of transfer.

62. Register of Members when closed The Board of Directors shall have power on giving not less than seven days

previous notice by advertisement in some newspaper circulating in the district in which the registered office of the Company is situated to close the Register of Members and/or the Register of Debenture Holders at such time or times and for such period or periods not exceeding thirty days at a time and not exceeding in the aggregate forty five days in each year as it may seem expedient to the Board.

63. Directors may refuse to register transfers Subject to the provisions of Section 111 of the Act or any statutory modification

thereof at any time in their own, absolute and uncontrolled discretion decline to register or acknowledge any transfer of any share giving reasons therefor and in particular may so decline in any case in which the Company has a lien upon the shares desired to be transferred or any call or installment regarding any of them remain unpaid or unless the transferee is not approved by the Directors and suck refusal shall not be affected by the fact that, the proposed transferee is already a member, the registration of transfer shall be conclusive evidence of the approval of the Directors of the transferee.

64. Directors may refuse any application for split or consolidation of Certificate(s)

Subject to the power of the Directors stated in Article 63 and the provisions of this clause, transfer of Share/Debentures, in whatever lot should not be refused.

However, the Company may refuse to split a Share Certificate/Debenture Certificate into several scripts of vary small denominations or to consider a proposal for transfer of Shares/Debentures comprised in a Share Certificate/Debenture Certificate to several parties, involving such splitting, if on the face of it such splitting/transfer appears to be unreasonable or without a genuine need or a marketable lot.

65. Notice of refusal to be given to transferor and transferee If the Company refuse to register the transfer of any shares or debentures or

transmission of any right therein, the Company shall within one month from the date on which the instrument of transfer or intimation of transmission as delivered with the Company send notice of refusal to the transferee and the transferror or to the person giving the intimation of the transmission as the case may be giving reasons for such refusal an thereupon the provisions of Section 111 of the act and statutory modification or re- enactment thereof for the time being in force shall apply.

66. Death of one or more joint holders of shares In case of the death of any one or more of the persons named in the Register of

Members as the joint holders of any share, the survivor or survivors shall be the only persons recognized by the Company as having any title or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares held by him with any other person.

67. Titles to shares of deceased member


138

The executors or administrators of a deceased member or holders of a Succession Certificate or the legal representatives in respect of the shares of a deceased member (not being one of two or more joint holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such members and the Company shall not be bound to recognize such executors or administrators or holders of a succession certificate or the legal representatives unless such executors or administrators or legal representatives shall have first obtained Probate or Letters of Administration or Succession Certificate as the case may be from a duly constituted Court in the Union of India provided that in any case where the Board of Directors in its absolute discretion thinks fit, the Board upon such terms as to indemnity or otherwise as the Directors may deem proper dispense with production of Probate or Letters of Administration or Succession certificate and register under Article 73 shares standing in the name of a deceased member, as a member.

68. Registration of persons entitled to shares otherwise then by transfer (Transmission clause)

Subject to the provisions of Article 66, any person becoming entitled to any share in consequence of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by the transfer in accordance with these Articles, may with consent of the Board of Directors (which it shall not be under obligation to give) upon producing such evidence that he sustains the character in respect of which he proposes to act under these or of his title, as the Board of Directors shall require and upon giving such indemnity as the Directors shall require either be registered as member in respect of such shares or elect to have some person nominated by him and approved by the Board of Directors registered as members in respect of such shares.

PROVIDED NEVERTHELESS that if such person shall elect to have his nominee

registered, he shall testify his election by executing in favour of his nominee and instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be free from any liability in respect of such shares, this clause is herein referred to as “THE TRANSMISSION CLAUSE”

69. Refusal to register nominee Subject to the provisions of the Act and these Articles, the Directors shall have

the same right to refuse to register a person entitled by transmission to any share or his nominee as if he were the transferee named in an ordinary transfer presented for registration.

70. Person entitled may receive dividend without being registered as member. A person entitled to a share transmission shall subject to the right of the Directors

to retain such dividends or money as is herein after provided be entitled to receive and may give a discharge for any dividends or other moneys payable in respect of the share.

71. No fee on transfer or transmission No fee shall be charged for registration of transfer, Probate, Succession

Certificate and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar other documents.

72. Transfer to be presented with evidence of title Every instrument of transfer shall be presented to the Company duly stamped for

registration accompanied by such evidence as the Board may require to prove


139

the title of the transferor his right to transfer the shares and generally under and subject to such conditions and regulations as the Board may, from time to time, prescribe and every registered instrument of transfer shall remain in the custody of the Company until destroyed by order of the Board.

73. The Company not liable for discharge of a notice prohibiting registration of a transfer

The Company shall incur no liability whatever in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof as shown or appearing in the Register of Members to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer and may have entered such notice or referred thereto in any book of the Company and the Company shall not be bound or required to regard of attend to give effect to any notice which may be given to it of any equitable right, title or interest or be under any liability whatsoever for refusing or neglecting to do so, though it may have been entered preferred to in some book of the Company, but the Company shall nevertheless, be at liberty to regard and attend to any such notice and give effect thereto if Board of Directors shall so think fit.

DIVIDEND 182. Division of profits

(a) Subject to the rights of persons, if any entitled to shares with special rights as to divide. dividends shall be declared and paid according to the amounts paid or credited a paid on the shares in respect whereof the dividend is paid but if and so long as nothing is paid upon any share i ” Company, dividends may be declared and paid according to the amounts of the shares.

(b) No amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this regulation as paid on the shares.

183. The Company in General Meeting may declare dividends The Company in General Meeting may declare dividends, to be paid to members

according to their respective rights and interest in the profits and may fix the time for payment and the Company shall comply with the provisions of Section 205 of the Act, but no dividends shall exceeds the amount recommended by the Board of Directors but the Company may declare a smaller dividends in General Meeting.

184. Dividend out of profits only No dividend shall be payable except out of profits of the Company arrived at in

the manner provided for in Section 205 of the Act. 185. Interim Dividend The Board of Directors may from time to time pay to the members such interim

dividends as in their judgement the position of the Company justifies. 186. Debts may be deducted

(a) The Directors may retain the dividends on which the Company has a lien and may apply the same in or toward the satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

Company may retain dividends


140

(b) The Board of Directors may retain the dividend payable upon shares in respect of which any person is under the transmission Article entitled to become a member or which any person under that Article is entitled to transfer until such person shall become a member or shall duly transfer the same.

187. Capital paid up in advance at interest not to earn dividend Where the capital is paid in advance of the calls upon the footing that the same

shall carry interest, such capital shall not, whilst carrying interest, confer a right to dividend or to participate in profits.

188. Dividends in proportion to amount paid up All dividends shall be apportioned and paid proportionately to the amounts paid

or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid but if any shares is issued on terms, providing that it shall rank for dividends as from a particular date, such share shall rank for dividend accordingly.

189. No member to receive dividend whilst indebted to the Company and the Company’s right of reimbursement thereof

No member shall be entitled to receive payment of any interest or dividend or bonus in respect of his share of shares, whilst any money may be due or owing from him to the Company in respect of such share or shares (or otherwise however either alone or jointly with any other person or persons) and the Board of Directors may deduct from the interest or dividend to any member all such sums of money so due from him to the Company.

190. Effect of Transfer of Shares A transfer of shares shall not pass the right to any dividend declared therein

before the registration of the transfer. 191. Dividend to joint holders Any one of several persons who are registered as joint holders of any share may

give effectual receipts for all dividends or bonus and payments on account of dividends in respect of shares.

192. Dividend how remitted The dividend payable in cash may be paid by cheque or warrant sent through

post direct to registered address of the shareholder entitled to the payment of the dividend or in case of joint holders, to the registered address of that one of the joint holders which is first named on the register of members or to such person and to such address as the holder or the joint holders may in writing direct. The company shall not be liable or responsible for any cheque or warrant or pay slip or receipt lost on transit or for any dividend lost to the member or person entitled thereto by forged endorsement of any cheque or warrant or forged signature on any pay slip or receipt or the fraudulent recovery of the dividend by any other means.

193. Notice of dividend Notice of the declaration of any dividend whether interim or otherwise shall be

given to the registered holders of share in the manner herein provided. 194. Reserves The Directors may, before recommending or declaring any dividend set aside out

of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors be applicable for meeting contingencies or for any other purpose to which the profits of the Company may


141

be properly applied and pending such application may, at the like discretion either be employed in the business of the Company or be invested in such investments (other than shares of the Company) as the Directors may from time to time think fit.

195. Dividend to be paid within thirty days The Companys’ all pay the dividend or send the warrant in respect thereof to

shareholders entitled to the payment of dividend, within thirty days from the date of the declaration unless; (a) When the dividend could not be paid by reason of the operation of any law. (b) Where a shareholder has given directions regarding the payment of the

dividend and those directions cannot be complied with. (c) Where there is a dispute regarding the right to receive the dividend. (d) Where the dividend has been lawfully adjusted by the Company against any

sum due to it from shareholder; or (e) Where for any other reason, the failure to pay the dividend or to post the

warrant within the period aforesaid was not due to any default on the part of the Company.

196. Unclaimed dividend No unpaid/unclaimed dividend shall be forfeited by the Board and the Directors

shall comply with the provisions of Sections 205A (1) and 205B of the Companies Act, 1956, as regards unclaimed dividends.

197. Set off of calls against dividend Any General Meeting declaring a dividend may on the recommendation of the

Directors make a call on the members of such amount as the meeting fixes but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the members, be set off against the calls.

198. Dividend in cash No dividend shall be payable except in cash, provided that nothing in this Article

shall be deemed to prohibit the capitalisation of the profits or reserves of the Company for the purpose of issuing duly paid up bonus shares or paying up any amount for the time being unpaid on any shares held by members of the Company.

199. Dividend, right shares and bonus shares to be held in abeyance Where any instrument of transfer of shares has been delivered to the company

for registration and the transfer of such shares has not been registered by the Company, it shall, notwithstanding any thing contained in any other provisions of the Act: (a) Transfer the dividend in relation to such shares to the special account

referred to in Section 205A unless the Company is authorised by the registered holder of such share in writing to pay such dividend to the transferee specified in such instrument of transfer; and

(b) keep in abeyance in relation lo such shares any offer of right shares under clause (a) of sub-section (1) of Section (8) and any issue of fully paid-up bonus shares in pursuance of sub-section (8) of Section 205.


142

SECTION VIII OTHER INFORMATION

OTHER INFORMATION Documents available for Inspection during business hours at the Registered office of the Company:

1. Memorandum and Articles of Association, as amended till date. 2. Certification of incorporation dated June 16, 2010 and Certificate of

Commencement of Business dated July 1, 2010. Fresh Certificate of Incorporation consequent upon change of name issued by ROC dated 12/3/2011.

3. Scheme of Arrangement sanctioned by the Hon’ble High Court of Gujarat vide its order dated 24/1/2011 issued on 21/3/2011 between Alembic Limited and Alembic Pharmaceuticals Limited.

4. Order dated 24/1/2011 of the Honorable High Court of Gujarat approving the Scheme of Arrangement.

5. Letters dated 16/7/2010 of BSE and 26/7/2010 of NSE approving the Scheme.

6. Tripartite Agreement with NSDL dated 14/2/2011 and with CDSL dated 14/3/2011.

7. Certificate from M/s.U.K. Gala & Associates, Chartered Accountants regarding Statement of Tax Benefits, dated 30/03/2011.

8. SEBI letter ref. no. CFD/DIL/SP/JAK/OW/28506/2011 dated September 9, 2011, granting relaxation from the strict enforcement of the requirement of Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957 (SCRR) for the purpose of listing of shares of Alembic Pharmaceuticals Limited.

DECLARATION: To the best of knowledge and belief of the Board of Directors of the Company, all statements made in this Information Memorandum are true and correct. By order of the Board of Directors and For Alembic Pharmaceuticals Limited R. K. Baheti Director-Finance & Company Secretary Date : 14th September, 2011 Place : Vadodara