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Ajanta Pharma Ltd.

BSE: 532331 Sector: Health care
NSE: AJANTPHARM ISIN Code: INE031B01049
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OPEN 1199.00
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VOLUME 10841
52-Week high 2150.00
52-Week low 1106.00
P/E 21.62
Mkt Cap.(Rs cr) 10,304
Buy Price 1170.25
Buy Qty 17.00
Sell Price 1171.85
Sell Qty 58.00
OPEN 1199.00
CLOSE 1197.40
VOLUME 10841
52-Week high 2150.00
52-Week low 1106.00
P/E 21.62
Mkt Cap.(Rs cr) 10,304
Buy Price 1170.25
Buy Qty 17.00
Sell Price 1171.85
Sell Qty 58.00

Ajanta Pharma Ltd. (AJANTPHARM) - Director Report

Company director report

Dear Shareholders

Your Directors take pleasure in presenting Thirty-Eighth Annual Report and AuditedFinancial Statements for the Year ended 31st March 2017.

1. Financial Results

( Rs. in cr. except EPS)

Standalone Consolidated
Year ended 31 March
2017 2016 Growth 2017 2016 Growth
Total Revenue 1823 1574 16% 2002 1749 14%
EBITDA 645 523 23% 701 587 19%
Profit after Tax 500 422 18% 507 416 22%
Dividend paid on equity shares including tax 129 135 - 129 135 -
Transfer to General Reserve Nil 330 - Nil 321 -
Earnings Per Share (EPS) (Rs. ) 56.79 47.95 - 57.59 47.23 -

2. Dividend

During the year your Company declared and paid two interim dividends totaling to Rs.13/- (650%) per equity share of Rs. 2/- each. Directors recommend interim dividends to beconsidered as final.

3. P erformance Review

T he Company posted remarkable performance the year under review and continued to growon different parameters. Domestic business contributed 32% whereas exports contributed 68%of the total revenue. Company continues to launch new products first to market productsand gain market share in the therapeutic segments and geographies it operates in.

Company continues to operate only in one segment i.e. pharmaceuticals and there is nochange in the nature of business of the company.

There are no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year and the date of thisreport.

No significant or material orders have been passed against the Company by theregulators courts or tribunals which impacts the going concern status and company'soperations in future.

4. Management Discussion and Analysis

Management Discussion and Analysis (MDA) forms part of this annual report which isgiven elsewhere in the Report.

5. Share Capital

During the year 3750 shares were issued under the ESOS 2011. Consequent theretototal paid up equity share capital of the Company as on 31st March 2017 stoodat Rs. 17.60 cr. divided into 88005000 equity shares of Rs. 2/- each. Particulars ofEmployee Stock Options granted/vested/exercised during the year are given in "AnnexureA" to this report.

6. Credit Rating

Company's bank facilities are rated by Credit Analysis and Research Limited (CARE).Company continues to have rating A1+ for its working capital facilities which denotesvery strong degree of safety regarding timely payment of financial obligations. For longterm borrowings Company's rating is AA which indicates high degree of safety regardingtimely servicing of financial obligations.

7. Subsidiaries and Associate

Y our company continues to have six subsidiaries overseas including one step downsubsidiary and there were no changes in the same during the year. Financials ofsubsidiaries are disclosed in the consolidated financial statements which forms part ofthis Annual Report.

S tatement containing salient features of financial statements of subsidiaries pursuantto section 129 of the Companies Act 2013 (Act) read with Rule 5 of the Companies(Accounts) Rules 2014 is annexed to this Report in the prescribed Form AOC-I as "AnnexureB". Financial statements of the subsidiary companies are available for inspectionby the shareholders at the registered office of the company. The Company has laid downpolicy on material subsidiaries and none of the subsidiaries are material subsidiary asper the Policy. The policy is placed on the website of the Company athttp://www.ajantapharma.com/AdminData/PolicyCodes/c2ea3c56-332b-4e83-a771-f1a8934ec008PolicyonMaterialSubsidiaries.pdf

Company had invested in a JV Turkmenderman Ajanta Pharma Limited (TDAPL) about twodecade back where it had management control. However later on company surrenderedmanagement control in favour of local partner and since then do not have any control orsignificant influence on the same. Further TDAPL operates under severe restriction thatsignificantly impairs its ability to transfer the funds. Hence company impaired entireinvestment in TDAPL and considered as unrelated party. As such it is no more an Associateand its accounts are not consolidated.

8. Directors

a. There were no changes in the directors or Key Managerial Personnel during theyear. All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations). Based on disclosures provided by Directors none of them aredisqualified from being appointed as Directors under section 164 of the Act.

b Retirement by rotation

Mr. Madhusudan B. Agrawal and Mr. Rajesh M. Agrawal retire by rotation at the ensuingAnnual General Meeting and being eligible offer themselves for re-appointment. Boardrecommends their re-appointment for approval of members.

c. Board meetings

During the year five Board meetings were held details of which are given in theCorporate Governance Report.

d. Independent Director's familiarization programme

The Company continued with its Independent directors' familiarization program forfamiliarizing them with company's operations and other critical aspects which would enablethem to effectively discharge responsibilities and functions conferred on them. Programsundertaken during the year include:

i. Overview of business operations;

ii. Tax & Regulatory updates and compliance with IND-AS;

iii. Investor Relation employee development etc.;

iv Role responsibilities. and functions of Independent Directors under corporate laws;

v Visit of Dahej manufacturing facility; .

vi. Business operations of subsidiaries; vii. R&D operations & way forward

Details of familiarization programme imparted is placed on the company's website atwww.ajantapharma.com/ Admin Data/Director Familiarization Program/ Directorsfamilarisationprogramme 2017.pdf

Evaluation of Board Committees and Directors .

Pursuant to the provisions of the Act and the Listing Regulations the Board hadcarried out performance evaluation of its own the Board Committees and of the Independentdirectors. Further Independent Directors at a separate meeting evaluated performance ofthe Non-Independent Directors Board as a whole and of the Chairman of the Board. Mannerin which the evaluation has been carried out has been detailed in the Corporate GovernanceReport.

f Policy on appointment and remuneration of Directors

Details of criteria laid down for appointment of Directors and policy on remunerationof Directors are given in the Corporate Governance Report.

9. A udit Committee

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

10. New projects

Y our company has commenced production at both its new manufacturing facilities inGuwahati (Phase I) and Dahej. Construction of phase II of Guwahati is underway. Inaddition your company proactively assesses its requirement of infrastructure for futuregrowth and continuously invests in the same.

11. A uditors a. S tatutory Auditors

A uditor's Report for the year does not contain any qualifications or adverse remarks.The Auditors have also not reported any fraud committed in the Company or by its officersor employees.

S tatutory auditors M/s. Kapoor & Associates Chartered Accountants Mumbai holdoffice till the conclusion of ensuing Annual General Meeting (AGM) and they are noteligible for reappointment in terms of section 139 (2) of the Act.

On the basis of recommendations of the Audit Committee the Board has appointed M/s. BS R & Co. LLP as the new auditors subject to approval of members at the ensuing AnnualGeneral meeting. Company has received consent and certificate of eligibility from M/s. B SR & Co. LLP in accordance with Sections 139 141 and other applicable provisions ofthe Act and Rules issued thereunder Further they have confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia (ICAI) as required under the Listing Regulations.

The Board recommends for approval of members their appointment for a period of 5(five) years from the conclusion of 38th AGM till the conclusion of 43rd AGM subject toratification by members at each AGM.

b Secretarial Auditors.

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. AlwynDsouza & Co Company Secretaries in Practice to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is annexed to this report as "Annexure C".There are no qualifications reservation or adverse remark in the report.

c. Cost Auditors

Company has appointed M/s. Sevekari Khare & Associates Practicing CostAccountants to audit the cost records of the Company for the financial year 2017-18subject to ratification of their remuneration by Members at the ensuing AGM.

12. Internal Control System risk management and compliance framework

Company has in place well defined and adequate review internal financial controlframework. During the year such controls were tested and no material weakness in theirdesign of operations were observed. Risk Management system followed by the Company isdetailed in the MDA.

13.Parekh Vigil Mechanism

The Company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and Directors to report to the Audit Committee Chairman genuine concernsunethical behaviour and irregularities if any noticed by them in the Company whichcould adversely affect company's operations. It is posted on the intranet of the Company.The same is reviewed by the Audit Committee from time to time. No concerns orirregularities have been reported by employees/ directors till date.

14. Related Party Transactions and Policy

All Related Party transactions (RPTs) entered during the financial year were on anarm's length basis and in the ordinary course of business. As such no particulars of suchcontracts or arrangements are furnished.

RPTs which are foreseen and repetitive in nature omnibus approval of Audit Committeeis obtained at the beginning of the financial year. All the RPTs affected during the yearare disclosed in the notes to Financial Statements.

The Board has approved and adopted Policy on Related Party Transactions and the same isuploaded on the Company's website at http://www.ajantapharma.com/AdminData/PolicyCodes/ec6023bc-420f-438c-94f9-506925ee2cf4PolicyonRelatedPartyTransactions.pdf

15. Managerial Remuneration and particulars of employees

Information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed to this report as "Annexure D"and is also given elsewhere in this report.

Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 pertaining to the top ten names andother particulars of employees also forms part of this report. However this informationis not sent along with this report pursuant to the proviso to Section 136(1) of the Act.Any shareholder interested in obtaining a copy of the same may write to the CompanySecretary/ Compliance Officer at the Registered office address of the Company.

16. Loans guarantees or investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements.

17. Corporate Social Responsibility (CSR)

The Company's CSR Policy primarily rests on three broad tenets: Healthcare Education& Community Development and the same is within the ambit of Schedule VII of the Act.During the year Company continued several initiatives under the CSR program directly aswell as through agencies permitted under the Act. Details of CSR policy and CSR activitiesundertaken during the year is annexed to this report as "Annexure E" andare also given elsewhere in this report.

18. Deposits

Y our Company has not accepted any deposits from public falling within the purview ofSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.

19. Unclaimed dividend and unclaimed shares

In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations thecompany has during the year transferred unclaimed shares to the ‘Unclaimed SuspenseAccount' opened for the purpose after following due process.

20. Extract of the annual return

The extract of the Annual Return in form MGT 9 is annexed to this report as "AnnexureF".

21. Directors' Responsibility Statement

To the best of their knowledge and belief and to the information and explanationsobtained by them your Directors confirm:

a. that in the preparation of the annual accounts for the year ended 31stMarch 2017 the applicable

Accounting Standards had been followed along with proper explanation relating tomaterial departures if any;

b. that the directors had selected accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year ended 31st March 2017 and of the profit of the company for theyear;

c. that proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts/financial statements have been prepared on a going concernbasis;

the that proper internal financial controls were in place. and that the financialcontrols were adequate and were operating effectively;

f that. the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws were in place and were adequate the and operatingeffectively.

22. Conservation of energy technology absorption foreign exchange earnings and outgo

The information relating to Conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134 of the Act read with Companies(Accounts) Rules 2014 is annexed to this report as "Annexure G".

23. Corporate Governance

R eport on Corporate Governance is annexed and forms an integral part of this AnnualReport. Certificate from the Auditors regarding compliance of conditions of CorporateGovernance as stipulated in the Listing Regulations is also appended to the report onCorporate Governance.

24. Business Responsibility Reporting

The Business Responsibility Report of the Company for the year ended 31stMarch 2017 forms part of this Annual report and is given elsewhere in the report.

25. Human Resource

In k eeping with the Company's firm belief that resource plays pivotal role in thesuccess of the organization the Company continued to organise various inbound &outbound training programes recreational and team building activities to enhance employeeskills motivation as also to foster team spirit. Company also conducted various workshopsand events for grooming and upgrading vocational skills of the talent pool in order tomeet future talent requirements. Industrial relations were cordial throughout the year.

26. P olicy on sexual harassment of women at work place

The Company has in place policy on Prevention Prohibition and Redressal of SexualHarassment for women at workplace in accordance with the requirements of The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. AnInternal Complaints Committee (ICC) has been set up as per the statutory requirements toredress complaints regarding sexual harassment. The policy has set guidelines on theredressal and enquiry process that is to be followed by complainants and human the ICCwhilst dealing with issues related to sexual harassment at the work place. All womenemployees (permanent temporary contractual and trainees) are covered under this policy.The company has not received any complaints during the year.

27. Gratitude & Acknowledgements

Y our Directors place on record their sincere gratitude for the staunch dedication andhighly motivated performance by employees across the globe which contributed greatly forpersistent performance of the company. Your Directors also sincerely thank all thestakeholders medical professionals business partners government & other statutorybodies banks financial institutions analysts and shareholders for their continuedassistance co-operation and support.

For and on behalf of the Board of Directors
Mannalal B. Agrawal
Chairman
Mumbai 3rd May 2017

Annexure ‘A' to the Directors' Report Employee Stock Option Scheme

No. Description Details / No. of Options
a) Total Options granted 172000
b) The pricing formula Exercise price is Rs. 2 per option.
c) Options vested 147500
d) Options exercised 127500
e) Total number of shares arising as result of exercise of options 127500
f) Options lapsed during the year None
g) Variation of terms of options Exercise price was reduced from Rs. 835/- to Rs. 2 for some of the Options.
h) Money realized by exercise of options Rs. 255000/-
i) Total no. of options in force 24500
j) Employee-wise details of options granted to
i. Senior Managerial Personnel 149500 options granted to employees of the Company and 22500 to employees of overseas subsidiaries.
ii. Any other employees to whom options granted amounting to 5% or more of the total options granted during the year None
iii. Employees to whom options equal to or exceeding 1% of the issued capital have been granted during the year None
k) Diluted earnings per share (EPS) calculated in accordance with Accounting Standard (AS) 20 EPS Rs. 57.58
l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company Not Applicable
m) Weighted average exercise prices and weighted average fair values of options outstanding disclosed separately for options whose exercise price either equals or exceeds or is less than market price of the stock Weighted average exercise price is Rs. 2/- for 24500 options.
Weighted average fair value of 3000 options is Rs. 1207/-; for 6000 options is Rs. 1456.91/- and for 15500 options is Rs. 1681/-

n) Description of the method and significant assumptions used during the year toestimate the fair values of the options including the following weighted averageinformation :

Variables Weighted Average Information
Plan ESOS 2011
3000 options 6000 options 15500 options
Grant date 8th May 2015 26th July* 2016 26th July 2016
Last date for acceptance 8th June 26th August 26th August
2015 2016 2016
Risk free rate (%) 8.00% 7.30% 7.30%
Expected Life (years) 1 to 3 years 3 to 4 years 1 to 3 years
Volatility (%) 31.70% 20.23% 20.23%
Dividend yield (%) 1.50% 0.53% 0.53%
Price of the underlying share in the market at the time of option grant Rs. 1264/- Rs. 1478/- Rs. 1701.60

*Original grant date was 13th August 2015 however grant date isrevised with the variation of exercise price.

Notes:-

• Fair value calculated by using Black-Scholes option pricing formula.

Stock price: The closing price on NSE as on the date of grant has beenconsidered for valuing the options granted.

Volatility: The historical volatility of the stock till the date of granthas been considered to calculate the fair value of the options.

Risk free rate of return: The risk free interest rate on the date ofgrant considered for the calculation is the interest rate applicable for a maturity equalto the expected life of the options based on the zero coupon yield curve for GovernmentSecurities.

Time to Maturity: Time to Maturity/ Expected Life of option is the periodfor which the Company expects the options to be live. The minimum life of a stock optionis the minimum period before which the options cannot be exercised and the maximum life isthe period after which the options cannot be exercised.

Expected dividend yield: Expected dividend yield has been calculated asan average of dividend yields for the four financial years preceding the date of the grant

Annexure ‘B' to the Directors' Report - Form No. AOC. 1

Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures (Pursuant to first proviso to sub-section(3) of section 129 read with rule 5 of Companies (Accounts) Rules 2014)

Part "A": Subsidiaries

Rs. in cr.
1 Sl. No. 1 2 3 4
2 Name of the Subsidiary Ajanta Pharma (Mauritius) Limited (Consolidated) Ajanta Pharma Philippines Inc. Ajanta Pharma USA Inc. Ajanta Pharma Nigeria Ltd.
3 Reporting period for the subsidiary concerned if different from the holding company's reporting period 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17
4 Reporting currency for the subsidiary MUR PHP USD NN
5 Reporting exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries Rupee equivalent of 1 unit of foreign currency as at 31st March 2017 (Rs.) 1.78 1.29 64.86 0.21
6 Share Capital 8.10 1.38 6.07 0.36
7 Reserves & Surplus 74.64 42.51 4.35 (1.36)
8 Total Assets 87.81 70.95 170.40 9.90
9 Total Liabilities (excluding Share Capital and Reserves & Surplus) 5.07 27.06 159.98 10.90
10 Investments - - - -
11 Turnover 207.98 121.82 168.18 8.01
12 Profit before taxation 39.81 28.30 15.97 (1.95)
13 Provision for taxation 0.87 8.79 6.68 (0.52)
14 Profit after taxation 38.94 19.51 9.29 (1.43)
15 Proposed Dividend - - - -
16 % of shareholding 100% 100% 100% 100%

Notes:

1) Ajanta Pharma (Mauritius) Ltd. consolidated figures includes its wholly ownedsubsidiary Ajanta Pharma (Mauritius) Int'l Ltd.

2) Details of Ajanta Pharma UK Ltd. have not been given as no equity contribution hasbeen made and it has not yet started business operations.

As per our report of even date attached
For Kapoor & Parekh Associates For and on behalf of Board of Directors
Chartered Accountants
Nilesh Parekh Mannalal B. Agrawal
Partner Chairman
Purushottam B. Agrawal Yogesh M. Agrawal Arvind Agrawal
Vice Chairman Managing Director Chief Financial Officer
Madhusudan B. Agrawal Rajesh M. Agrawal Gaurang Shah
Mumbai 3rd May 2017 Vice Chairman Joint Managing Director Company Secretary

Annexure ‘D' to the Directors' Report

Details pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

1 Name & Designation of Director & KMP Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the FY 2016-17 *% increase / (decrease) in remuneration in the FY 2016-17
(i) Mannalal Agrawal 49:1 1
(ii) Purushottam Agrawal 82:1 10
(iii) Madhusudan Agrawal 82:1 10
(iv) Yogesh Agrawal 82:1 10
(v) Rajesh Agrawal 82:1 10
(vi) Chandrakant Khetan 3:1 62
(vii) Dr. Anil Kumar 3:1 181
(viii) K. H. Viswanathan 2:1 64
(ix) Prabhakar Dalal 2:1 91
(x) Dr. Anjana Grewal 2:1 82
(xi) Arvind Agrawal Chief Financial Officer N.A. 19
(xii) Gaurang Shah Company Secretary N.A. 13

* Includes sitting fees paid to Non-Executive Directors. Further sitting fees increasedfrom Rs. 24000 to Rs. 30000 w.e.f. 1st April 2016.

2 The percentage increase in the median remuneration of employees in the financial year 11.86%
3 The number of permanent employees on the rolls of company 6316
4 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Average increase in remuneration of employee for the financial year 2016-17 was 11.15% against which the increase in managerial remuneration was 10.02%. Percentile increase in median remuneration and that of managerial personnel is in the same range and does not need any justification.
5 Afirmation that the remuneration is as per the remuneration policy of the company Yes

Annexure – ‘G' to the Director's Report

A. CONSERVATION OF ENERGY:

1. Energy Conservation Measures taken during the year: i. Monitored power factor tounity. ii. R eplacement of CFL and metal headlight lamps with LED Lights in plants andwarehouses. iii. Continuous monitoring of HVAC System & AHU iv Eliminated leakages inutility systems. . v Installation of solar heaters in one of the manufacturing facilities.. vi. Installation of motion sensors to reduce electricity wastage. vii. Fixed of variablefrequency for heavy load machines. viii. Ensured best possible automation to reduceelectricity wastage.

2. Impact of above measures: i. R eduction in power consumption. ii. R eduction infuel consumption. iii. R eduction in carbon footprint. iv R . eduction in fuel & powercost. v Increase in operational efficiencies. .

3. Total energy consumption and energy consumption per unit of production i. As perdetails in Form A below

Form A
Year ended 31 March 2017 2016
(i) P ower and Fuel Consumption
Electricity
(a) Purchased Unit (Thousand KWH) 11514.46 11868.71
Total Amount (Rs. In lacs) 795.12 911.18
R ate/Unit (KWH) ( Rs.) 6.63 7.68
(b) Own generation Unit (Thousand KWH) 142.90 598.04
Unit per Ltr. of Diesel Oil (KWH) 4.00 3.12
Cost / Unit (KWH) (Rs.) 20.01 17.71

ii. Consumption per unit of production

The Company manufactures APIs and several drug formulations of different pack sizes. Itis therefore impracticable to apportion the consumption and the cost of utilities to eachproduct.

4. S teps taken by the company for utilizing alternate sources of energy:

It has taken steps to adopt green energy alternates & invested significantly forinstallation of solar heater system at one of its manufacturing facilities.

5. Capital investment on energy conservation equipment:

Company has invested significantly on energy conservation equipment across all units.

B. RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION

W e continued to fortify our research foundation through prudent investments that placeus at the front-line of technology and help us deliver complex products. We continued todevelop new products and processes to enrich our portfolio and to give further impetus toour growth plans. During the year we added around 200 scientists to strengthen the team.

W e have significant expertise to develop and manufacture complex formulations invarious dosage forms including tablets capsules powders ophthalmic sterile eye dropsointments and injectables. During the year we continued to develop robust potent and costeffective formulations to meet patient needs and bridge the gaps with special emphasis ondeployment of new processes for synthesis of Active Pharmaceutical Ingredients;development of novel drug delivery systems for existing and newer active drug substances;use of cutting technology for making superior quality products; analytical methoddevelopment and validation etc.

1. Specific areas in which R & D was carried out:

• Development of Peroduo Gel for treatment of acne.

• Development of Minocycline Foam without surfactant for acne treatment.

• Development of Minocycline Gel for acne treatment.

• Development of lotion for fungal infections.

• Development of double and triple combination products for effective and fastremedy

• Development of low and high power tablets for the treatment of pulmonaryarterial hypertension.

• Development of Tablets for the treatment of rheumatoid arthritis.

For the US and developed markets company has made successful developments offormulations in the areas of:

• Immediate-release solid oral dosage forms including Nanonized technology.

• P owder for Oral Solutions / Suspensions

• Extended-Release and Delayed-Release pellet based capsules dosage forms

• OROS (Osmotic Release Oral System) based technology in solid oral dosage formproducts for various therapeutic segments.

• Ophthalmic products for various therapeutic segments for filing in regulatedmarkets.

2. Benefits derived as a result of R&D

• Company has launched 15 new products seven of which are for domestic marketone for ROW market and seven for US market.

• Introduced about 80% of 1st time ophthalmic launches in last 11 years.

• L aunched world's fastest acting & India's first ocular anti-allergic drugwhich is approved by USFDA and other regulators

• R eceived approvals for 9 ANDAs; launched commercialized 7 products in US marketand filed 8 news products with USFDA for ANDA approval.

• First day launch of Omeprazole and Sodium Bicarbonate Capsules in US market.

• 13 APIs successfully developed and charged for stability study during FY17 7API were scaled-up at plant for commercialization for Domestic/ROW market

• Several other APIs under development/ ready for scale up at plant level.

3. Future plan of action

In the coming year company plans:

• New platform technologies development in derma products for better stability.

• Development of parenteral and topical dosages forms.

• Development of ophthalmic products for ROW market.

• Develop preservative free ophthalmic products.

. • Continue to innovate APIs for specialty segments.

• Focus on formulation development of Patent challenge products.

• Develop/launch annually 12 to 15 first time products in India & to file 12to 15 ANDAs.

• Continue quality upgradation of existing products with newer technologies.

• Continue to develop cost-e_ective formulations for expanding consumer base.

• Accelerate R & D activities to support product pipeline for various marketsacross the globe.

4. Efforts in brief made towards Technology absorption adaptation andinnovation

Company strives to develop technologically advanced potent and affordable products tomeet the patients' needs. Focus is on continuous quality upgradation of existing productsby adopting new technology and developing new and improved drug delivery system forenhancing patient comfort.

Company has set up separate state-of-art R & D facility to meet the needs ofdifferent geographies and segments. Top most quality being the benchmark the R & Dfacilities and team develop formulations and APIs that meet stringent regulatory norms andaudit and enjoy consumer preferences worldwide.

The Company lays emphasis on absorbing and latest technologies and find innovativesolutions in the form of novel drug delivery system double and triple combinations togive multiple reliefs alternative and efficient formulations vis--vis traditional onesetc.

5. Expenditure on R&D
Particulars Rs. cr.
Capital Expenditure 45.77
Recurring Expenditure 150.15
Total 195.92
Total R&D expenditure as a percentage of total turnover 10.75%

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

1. Information on activities relating to exports initiatives taken to increaseexports etc. are covered in the Management Discussion and Analysis in this annual report.

2. T otal foreign exchange used and earned adapting

• Earnings in foreign currency – Rs. 1147.70 cr. (previous year Rs. 1042.18cr.)

• Outgo in foreign currency – Rs. 220.58 cr. (previous year Rs. 167.82 cr.)