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Panacea Biotec Ltd.

BSE: 531349 Sector: Health care
NSE: PANACEABIO ISIN Code: INE922B01023
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VOLUME 143660
52-Week high 265.55
52-Week low 103.00
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Mkt Cap.(Rs cr) 1,438
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OPEN 226.00
CLOSE 225.30
VOLUME 143660
52-Week high 265.55
52-Week low 103.00
P/E
Mkt Cap.(Rs cr) 1,438
Buy Price 0.00
Buy Qty 0.00
Sell Price 234.55
Sell Qty 27.00

Panacea Biotec Ltd. (PANACEABIO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 31st Annual Report on the business andoperations together with the Company's audited financial statements and the auditors'report thereon for the financial year ended March 31 2015. The financial highlights forthe year under review are given below:

Financial Results

(Rs. in million)

Particulars March 31 2015 March 31 2014*
Revenue from operations 6792.0 4975.7
Other Income 280.5 171.0
Total Income 7072.5 5146.7
Earning Before Interest Depreciation & Tax (EBITDA) 943.6 (922.3)
Profit/ (Loss) before tax and exceptional items (633.4) (2974.4)
Exceptional items - 2970.2
Profit/(Loss) before Tax (PBT) (633.4) (4.2)
Provision for Taxation 18.9 -
Profit/(Loss) after Tax (PAT) (652.3) (4.2)
Basic EPS (Rs.)* (10.7) (0.1)
Cash EPS (Rs)* 0.1 11.2

* Face value Re.l per share

# Previous year's figures have been re-grouped/re-classified wherever necessary.

Business Performance

During the year your Company registered a growth of 36.5% with turnover of Rs.6792.0million as against Rs.4975.7 million during the corresponding financial year.

The vaccines segment registered a growth of more than 115.9% with turnover ofRs.2763.0 million as against Rs.1279.5 million during the previous financial year. Theformulations segment registered a growth of 7.6% with turnover of Rs.3790.7 million asagainst Rs.3523.2 million during the previous financial year. The Research &Development segment registered a growth of 37.7% with turnover of Rs.238.3 million asagainst Rs.173.0 million during the previous year.

During the year your Company registered positive EBITDA of Rs.943.6 million as againstthe negative EBITDA of Rs.922.3 million in the previous financial year with overalllosses before tax & exceptional items reduced significantly from Rs.2974.4 million toRs.633.4 million.

During the year under review your Company has continued to supply Easyfive-TT Vaccinesagainst long-term supply order received from UNICEF during previous financial year forsupply of vaccines for the calendar years 2014 to 2016. The Company has also won anational tender in Philippines for supply of Easyfive-TT vaccine and an order fromGovernment of India for supply of Oral Polio Vaccines which have been the leading keydrivers in the improved performance of the Company during the year under review.

During the year your Company has entered into a strategic alliance with Canada'slargest pharma company Apotex Inc. for research development license and supply of twodrug delivery-based generic products in the US Canada Australia and New Zealand marketsand also entered into similar deal with US-based Rising Pharmaceuticals Inc. for an oralcontrolled release product in the CNS space. Similar collaboration has also been enteredinto with a leading Indian pharma company with extensive global operations for thedevelopment and supply of a modified release immunosuppressant generic product for the USmarket.

A detailed discussion on operations for the year ended March 312015 is given in theManagement Discussion and Analysis section forming part of the Annual Report.

Corporate Debt Restructuring Scheme (CDR Scheme)

As the members are aware during previous financial year the Company had made areference to the Corporate Debt Restructuring (CDR) Cell for comprehensive restructuringof Company's debts from consortium banks in view of difficult financial situation mainlydue to the delisting of company's vaccine from WHO's list of pre-qualified vaccines in thefinancial year 2011-12. The CDR Empowered Group ("CDR EG") in its meeting heldon September 9 2014 has approved the CDR proposal and issued provisional Letter ofApproval (LOA) dated September 24 2014 which was later on confirmed vide letter datedOctober 112014.

Pursuant to the said LOA the Company had executed a Master Restructuring Agreement(MRA) with all the consortium banks (except State Bank of Travancore ("SBT")which has given a negative mandate) on December 27 2014 with cutoff date of October 12013. The MRA inter-alia provides for waiver of certain existing obligations of theCompany restructuring of repayment terms for principal and interest reduction ininterest rates conversion of outstanding interest amounts to Working Capital/ FundedInterest Term Loans pledge of promoters' shareholding as additional security to lenderspromoters' undertaking to bring additional funds as promoters' contribution monitoringoversight and certain restrictive covenants. The debt obligations including interestthereon have been measured classified and disclosed in these financial statements inaccordance with the MRA as agreed by seven out of nine lender banks. As on March 312015 some of the terms of CDR package were implemented and creation of security has beencompleted partly and the balance was in process. The Company had approached the banks forextension of time for implementation of few conditions which was considered by the banks.The banks and CDR EG had accepted few requests for modifications/ waivers and with theacceptance of such modifications/ waivers the CDR Scheme shall stand implemented by allthe banks accept SBT.

The SBT which had given a negative mandate in the CDR scheme had sent legal noticesfor recovery of its debts & winding up of the Company which have suitably beenreplied. Simultaneously they have been requested for reconsidering their decision. TheCDR mechanism operates on the principles of super majority of 75% of the creditors byvalue and 60% of the creditors in number. The CDR Scheme has been approved with theconsent of all the banks except one forming such super majority.

The implementation of CDR scheme gives your Company critical support to tide over thepresent difficult financial situation and business environment. The decision of the banksto consider and approve CDR Scheme also reflects the faith these institutions have in thelong term business model of the Company.

Dividend

In view of the losses during the year the Board of Directors did not recommend anydividend on the Equity Shares of the Company.

Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) of the Companies Act 1956 the dividendfor the year 2006-07 which remained unpaid or unclaimed for a period of 7 yearsamounting to Rs.0.2 million has been transferred by the Company to the CentralGovernment's Investors Education and Protection Fund on November 26 2014. Similarly thedividend for the year 2007-08 which shall remain unpaid or unclaimed for a period of 7years shall be transferred by the Company to the Central Government's Investors Educationand Protection Fund by the due date i.e. November 25 2015.

Details of significant and material orders impacting the going concern status andcompany's operations in future

During the year under review no significant and material orders were passed by anyregulator or court or tribunal which may impact the going concern status and yourCompany's operations in future.

A search operation was conducted by Income Tax department in the premises of theCompany in January 2012 and hence Company has filed the income tax returns for theAssessment Year 2006-2007 to Assessment year 2012-2013. The Income Tax department hascompeted the Income Tax assessment of said years and income tax demand of Rs.3294.9million (including interest) has been raised on various grounds. The Company has preferredappeals before the CIT (Appeals) against the Orders of Income Tax department. Yourdirectors are pleased to inform that after several hearings in the matter and on the basisof facts of the matter the CIT (Appeals) has granted the relief to the Company from suchdemand and the entire income tax demand of Rs.3294.9 million stands dismissed exceptcertain disallowances made in Assessment year 201011 and Assessment year 2011-12 pursuantto the Orders issued by CIT (Appeals).

Share Capital and Net Worth

The issued subscribed and paid up Share Capital of the Company as on March 31 2015was Rs.224.3 million comprising of Rs.61.3 million equity share capital divided into61250746 Equity Shares of Re.1 each and Rs.163.0 million preference share capitaldivided into 16300000 0.5% NonConvertible Cumulative Redeemable Preference Shares ofRs.10 each. During the year the Company had issued and allotted 16300000 (One CroreSixty Three Lac Only) 0.5% Non-Convertible Cumulative Redeemable Preference Shares("NCCRPS") of Rs.10 each at par by converting the existing unsecured loan and/orfixed deposits (including outstanding interest thereon) aggregating to Rs.163.0 million tosome of the promoters of the Company to meet the requirements of the promoters'contribution pursuant to the CDR Scheme approved by CDR EG.

During the year under review the Company had not issued any equity shares withdifferential rights/sweat equity shares under Rule 4 & Rule 8 of Companies (ShareCapital and Debentures) Rules 2014.

As the members are aware in view of the fact that the Company's accumulated losses asat March 31 2013 had resulted into erosion of more than 50% of its peak net worth duringthe immediately preceding four financial years (as computed as per the provisions of SickIndustrial Companies (Special Provisions) Act 1985 ("SICA")) the Company hadmade necessary reference on November 22 2013 to the Board for Industrial and FinancialReconstruction (BIFR) pursuant to the provisions of SICA. The Company's accumulated lossesas at March 31 2015 continue to remain more than 50% of its peak net worth during theimmediately preceding four financial years as computed as per the provisions of SICA.

As at the end of year under review the net worth of the Company calculated as persection 2(57) of the Companies Act 2013 ("the Act") stood at Rs.1296.2 millionas compared to Rs.1790.9 as at the end of the previous financial year.

Report on Corporate Governance

Your company has always placed thrust on managing its affairs with diligencetransparency responsibility and accountability. Your Directors support the broadprinciples of Corporate Governance and lays emphasis on its role to align and direct theactions of the Company in achieving its objectives. The report on Corporate Governance asstipulated under Clause 49 of the listing agreement entered with the stock exchanges("Listing Agreement") together with a certificate from the Practicing CompanySecretary confirming compliance is attached and forms part of this Annual report.

Management Discussion & Analysis Report

As required pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges adetailed Management Discussion and Analysis Report is attached herewith and forms part ofthe Annual Report.

Information about the Subsidiaries/Associates/ Joint Ventures

A. Subsidiaries

As on the date of this report your Company has 4 wholly owned subsidiary (WOS)companies viz. Radhika Heights Limited Panacea Biotec (International) S.A. ReesInvestments Limited and Panacea Biotec GmbH (under liquidation) and one subsidiary viz.NewRise Healthcare Private Limited. Your Company also has 8 indirect WOS companies asunder:

• Cabana Construction Private Limited Radicura Infra Limited Nirmala BuildwellPrivate Limited Sunanda Infra Limited Cabana Structures Limited and Nirmala OrganicFarms Resorts Private Limited; all being WOS of Radhika Heights Limited;

• Panacea Biotec Germany GmbH the WOS of Panacea Biotec (International) S.A.; and

• Kelisia Holdings Limited the WOS of Rees Investments Limited.

Radhika Heights Limited ("RHL") inter-alia owns a prime immovable propertywhich is being used by the Company as its Corporate Office at New Delhi and land atPataudi Road Gurgaon (along with its 5 WOSs). It has diversified its activities inconstruction and development of township as part of its growth plans. Accordingly RHLalong with its 5 WOS has signed a term sheet with a developer for development of theintegrated township on its land at Pataudi Road Gurgaon however a dispute has emergedamong the parties and the matter is under arbitration. The Company holds 4776319 equityshares in RHL with an investment of Rs.3385.6 million as on March 312015.

Panacea Biotec (International) S.A. Switzerland (PBS) is engaged in the business oftrading of pharmaceutical products. The Company holds 6000 equity shares of CHF 100 eachwith an investment of Rs.34.4 million as on March 31 2015. Panacea Biotec Germany GmbHWOS of PBS is engaged in marketing of the Company's products in Germany.

NewRise Healthcare Private Limited ("NewRise") has set-up a 224 beddedstate-of-the-art multi super-specialty hospital at Gurgaon Haryana. It had planned tohave the full-fledged operations during the year under review and started hiring therequired personnel to start operations and also obtained the necessary licenses &permissions for such operations. However since it was requiring additional funds to startthe operations as well as to fund the initial losses and working capital requirements butthe funds were not available; it has decided to put the operations of hospital on hold forthe time being. The efforts are also being made to dispose of the Company's stake inNewRise either in full or in part.

During the year under review NewRise had issued and allotted 3394915 equity sharesof Rs.10 each for cash at a price of Rs.59 per share on May 28 2014 aggregating Rs.200.3million against the share application money pending allotment as at the end of previousfinancial year. The Company has also purchased 182900 equity shares in NewRise at anaggregate value of Rs.15.5 million pursuant to the agreement entered into with othershareholders of NewRise during previous financial year. Your Company holds 87.4% stake inNewRise with an investment of Rs.497.8 million therein as on March 2015.

During the year under review the Company's indirect subsidiary Kelisia InvestmentHolding AG (step down subsidiary of Rees Investments Limited) has been liquidatedeffective as on October 7 2014.

B. Joint Ventures and Associates

PanEra Biotec Private Limited ("PanEra"): PanEra the Company's associateCompany is continuing to meet requirement of bulk antigens for the manufacture of Hib andPentavalent Vaccines by your Company. During the year under review PanEra has achieved anet turnover of Rs.152.3 million as compared to Rs.391.8 million during previous year. Ithas incurred a loss of Rs.116.3 million as compared to loss of Rs.11.5 million in previousfinancial year.

Chiron Panacea Vaccines Private Limited (CPV) (Under Liquidation): CPV had discontinuedits operations during the financial year 2012-13 pursuant to dissolution of joint ventureand is currently in the process of voluntary winding up. Adveta Power Private Limited("Adveta"): Adveta the Company's 50:50 joint venture with PanEra has beengranted in-principle approval by Govt. of Arunachal Pradesh for allotment of two PowerProjects of 80 MW and 75 MW in Arunachal Pradesh in financial year 2012-13. Adveta is inthe process of taking preliminary steps in connection with the implementation of projects.However no major investment is envisaged in this regard during the current financialyear. Pursuant to the provisions of Section 129 134 and 136 of the Act read with rulesframed thereunder and pursuant to clause 41 of the Listing Agreement the Company hadprepared consolidated financial statements of the Company and its subsidiaries and aseparate statement containing the salient features of financial statements ofsubsidiaries joint ventures and associates in Form AOC-1 which is forming part of theAnnual Report and hence not repeated here for the sake of brevity.

The annual financial statements and related detailed information of the subsidiarycompanies shall be made available to the shareholders of the holding and subsidiarycompanies seeking such information on all working days during business hours. Thefinancial statements of the subsidiary companies shall also be kept open for inspection byany shareholder/s during working hours at the Company's registered/corporate office andthat of the respective subsidiary companies concerned.

Consolidated Financial Statements

The consolidated financial statements of the Company and its subsidiaries jointventures and associates prepared in terms of Section 129 of the Act and Clause 32 &41 of the Listing Agreement and in accordance with Accounting Standard 21 on 'ConsolidatedFinancial Statements' read with Accounting Standard AS-27 on 'Financial Reporting ofInterest in Joint Ventures' and Accounting Standard AS-23 on 'Accounting for Investmentsin Associates' as issued by the Institute of Chartered Accountants of India and inaccordance with the provisions of schedule III of the Act are attached herewith and thesame together with Auditors' Report thereon forms part of the Annual Report of theCompany.

Listing of Equity Shares

The Equity Shares of the Company continue to be listed on National Stock Exchange ofIndia Limited ("NSE") and Bombay Stock Exchange ("BSE"). The requisiteannual listing fees have been paid to these Exchanges.

Public Deposits

During the year under review your Company has not invited or accepted any depositsfrom the public/ members pursuant to the provisions of Section 73 and 76 of the Act.Further the Company had paid/adjusted the outstanding balances of deposits from theCompany's Directors & their relatives amounting to Rs.142.0 million as on March 312014 along with interest thereon in compliance with the provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014.

Directors and Key Managerial Personnel

During the year under review Mr. Sunil Kapoor (DIN: 00029133) who was earlierappointed as an independent director was not satisfying the criteria of independentdirector as per the provisions of the revised Clause 49 of the Listing Agreement effectivefrom October 1 2014 and therefore resigned from the directorship of the Company w.e.f.August 4 2014. The Board places its sincere appreciation towards the valuablecontribution received from Mr. Sunil Kapoor during his tenure as a Director of theCompany.

Further pursuant to the provisions of Section 149 of the Act Mr. Raghava LakshmiNarasimhan (DIN: 000738736) Mr. Namdeo Narayan Khamitkar (DIN: 00017154) Mr. A.N.

Saksena (DIN: 00016107) and Mr. Krishna Murari Lal (DIN: 00016166) IndependentDirectors were appointed as Independent Directors of the Company not liable to retire byrotation for a period of five years i.e. till March 312020 in the 30th Annual GeneralMeeting held on September 25 2014. The terms and conditions of appointment of IndependentDirectors are as per Schedule IV to the Act. Your Company has received declarations fromall the Independent Directors of the Company confirming that they meet with the criteriaof independence provided in Section 149(6) of the Act and Clause 49 of the ListingAgreement and there has been no change in the circumstances which may affect their statusas Independent Director during the year under review.

Further as required pursuant to the provisions of Section 149 of the Act Mr. OmPrakash Kelkar (DIN:00943362) and Mrs. Manjula Upadhyay (DIN: 07137968) have beenappointed as Additional Directors of the Company in the category of Independent Directorswith effect from October 30 2014 and March 30 2015 respectively to hold office uptothe ensuing Annual General Meeting.

Mr. Om Prakash Kelkar (DIN:00943362) was subsequently appointed by the shareholders bypassing resolution through Postal Ballot the result whereof was declared on December 232014 as an Independent Director for a period of five years as per the provisions ofSection 149 of the Act and Clause 49 of the Listing Agreement not liable to retire byrotation and shall hold such office for the period upto October 30 2019. Further theCompany has received a notice in writing along with requisite deposit from a member underSection 160 of the Act signifying his intention to propose candidature of Mrs. ManjulaUpadhyay for the office of Director of the Company. Your directors recommend herappointment as an Independent Director in the ensuing Annual General Meeting of theCompany for a period of five years as per the provisions of the Act and Clause 49 of theListing Agreement not liable to retire by rotation and to hold office for a period offive years upto March 29 2020.

Further on the recommendation of Nomination & Remuneration Committee the Board ofDirectors of the Company had in its meeting held on July 17 2015 reappointed Mr. SumitJain (DIN: 00014236) as a Whole time Director designated as Director Operations &Projects for a period of 3 years with effect from July 22 2015 subject to the approvalof shareholders in their general meeting. The terms and conditions for his re-appointmentare contained in the explanatory statement forming part of the notice of the ensuingAnnual General Meeting.

Further in accordance with Section 152 of the Act and Article 112 of the Articles ofAssociation of the Company Mr. Soshil Kumar Jain (DIN: 00012812) & Mr. Sumit Jain(DIN: 00014236) directors of the Company are also liable to retire by rotation. Beingeligible they have offered themselves for re-appointment as director.

The brief resumes of the Directors who are to be appointed/ re-appointed in the ensuingAnnual General Meeting the nature of their expertise in specific functional areas namesof companies in which they have held directorships committee memberships/chairmanshipsand their shareholding etc. are furnished in Corporate Governance Report forming part ofthe Annual Report.

The Board recommends their appointment/re-appointment of the above said directors inthe ensuing Annual General Meeting.

During the year under review Mr. Partha Sarathi De resigned from the position of ChiefFinancial Officer of the Company with effect from November 30 2014. Mr. Devender Guptahas been appointed as Chief Financial Officer and Head Information Technology of theCompany with effect from May 29 2015. Mr. Vinod Goel Company Secretary of the Companyhas also been elevated as Group Chief Financial Officer and Head Legal & CompanySecretary of the Company with effect from May 29 2015.

Board Meetings

During the year under review six (6) Board Meetings were held on May 30 2014 August1 2014 October 31 2014 December 9 2014 February 13 2015 and March 30 2015. Thedetails pertaining to the attendance are provided in the Corporate Governance Report. Theintervening gap between two Board Meetings was within the period prescribed under the Act.

Audit Committee

The Audit Committee of the Board of Directors consists entirely of IndependentDirectors. The details of the constitution composition and number of meetings of theAudit Committee are furnished in the Corporate Governance Report. During the year allrecommendations made by the Audit Committee were accepted by the Board.

Policy on Directors' appointment & remuneration

Pursuant to the provisions Section 178(3) of the Act and Clause 49(IV)(B) of theListing Agreement and as per the recommendations of the Nomination and RemunerationCommittee the Board has adopted a policy for selection & appointment of Directors andKey Managerial Personnel of the Company and their remuneration. The components ofremuneration policy are briefly stated in the Corporate Governance Report.

Board Evaluation

In terms of the provisions of the Act and Clause 49 of the Listing Agreement the Boardhad adopted a formal mechanism for evaluating its performance as well as that of itsCommittees and individual Directors including the Chairman of the Board. The exercise wascarried out through a structured evaluation process covering various aspects such as Boardcomposition & quality strategic & risk management board functioning etc.Performance evaluation of Independent Directors was conducted by the Board of Directorsexcluding the Director being evaluated on the criteria such as ethics and valuesknowledge and proficiency behavioural traits etc.

Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Walker Chandiok & Co. LLP Chartered Accountants (Regn. No. 001076N/N500013)were appointed as statutory auditors of the Company for a period of five years to holdoffice from the conclusion of the 30th Annual General Meeting ("AGM") of theCompany held on September 25 2014 till the conclusion of the 35th AGM subject toratification of their appointment at every AGM. Accordingly the appointment of M/s.Walker Chandiok & Co. LLP Chartered Accountants as statutory auditors of theCompany is placed for ratification by the shareholders. in this regard the Company hasreceived a certificate from the auditors to the effect that if they are re-appointed itwould be in accordance with the provisions of Section 141 of the Act.

Auditors' Report

The management response to the matters of emphasis and observations/ comments containedin the Auditors' Report and Annexure thereto are given below:

i. Amount of advance received as research fees from a customer amounting to Rs.197.2million which has been accounted for as income from research and development: In Auditor'sopinion the recognition of such advances as income is not consistent with the revenuerecognition principles as prescribed under the Accounting Standard - 9 (AS-9) 'RevenueRecognition' Had the Company followed the principles of AS-9 with respect to theseamounts the revenue for the year ended March 312015 would have been lower by Rs.197.2million and the loss would have been higher by Rs.197.2 million. Further the reserves andsurplus as at that date would have been lower by Rs.197.2 million and current liabilitiesas at that date would have been higher by Rs.197.2 million.

The Company has received Research & Development (R&D) fees from a customer andsuch fees is nonrefundable subject to certain pre-conditions (as defined in the agreement)and most of the conditions are being complied by the Company. As the product is alreadyavailable in the domestic market the management is reasonably certain of meeting theremaining preconditions and therefore believes that the said fees should be accounted foras income.

ii. Payment of managerial remuneration exceeding the limits prescribed under Section198 and 309 read with Part II of Schedule XIII to the Companies Act 1956 by Rs.13.5million and Rs.13.2 million in previous financial years ended March 31 2014 and 2013respectively (Emphasis of Matter in the Auditors' Report):

The Company has incurred losses in the respective years mainly due to the delisting ofcompany's vaccine from WHO's list of pre-qualified vaccines in the financial year 2011-12.The Managerial Personnel have already voluntarily reduced their salary by 30-53% in thereferred years. The Company has taken various measures as explained elsewhere in thisreport to regain its business. Further the Company has already filed applications withMinistry of Corporate Affairs to obtain requisite approvals from Central Government inrespect of such excess remuneration and requisite approvals are awaited.

iii. The Company has incurred a net loss of Rs.652.3 million during the year endedMarch 31 2015. Further as of that date the Company's current liabilities exceeded itscurrent assets by Rs.3835.3 million. These conditions along with other matters as setforth in aforesaid note indicate the existence of a material uncertainty that may castsignificant doubt about the Company's ability to continue as a going concern. (Emphasis ofMatter - clause 11 of Auditors Report):

The Company has undertaken several measures to mitigate this risk which include supplyto UNICEF/other customers of pentavalent vaccine; certain strategic alliances with foreigncollaborators for supply of vaccines and pharma products including 3 collaborationagreements signed during the year under review. The Company has also successfully executedthe Master Restructuring Agreement (MRA) with the lenders of the Company and has compliedwith the key conditions and successfully implemented the MRA. Based on above measures andcontinuous efforts to improve the business the management believes that it would be ableto generate sustainable cash flow recover and recoup the erosion in its net worth throughprofitable operations discharge its obligations as they fall due and continue as a goingconcern.

Further with regard to the Emphasis of Matters and observations contained in theAuditors' Report on the Consolidated Financial Statements & the management'sexplanations are given below:

i. The Auditors' report on the financial statements of Subsidiary/Associate Companyviz. NewRise Healthcare Private Limited and PanEra Biotec Private Limited contains aqualification with respect to non-receipt of confirmations from the foreign and domesticvendors: The respective companies are in the process of reconciling these balances withits vendors and the management is of the opinion that the result of reconciliations willnot have any material impact on the consolidated financial statements of the Company.

ii. Unaudited Annual Accounts of the Subsidiary Rees Investments Limited: Though theAnnual Accounts were duly finalized & signed by its Board of Directors the auditthereof could not be completed till the date on which the Company's consolidated accountswere finalized. Its auditors have since completed their audit and given their audit reporton such accounts and there is no difference in the audited annual accounts thereof.

iii. Slight delay in deposition of tax with appropriate authority in one case: Therehas been a delay of 1 day in deposition of VAT of Rs.2.3 million with concerned VATauthority at Kochi in the state of Kerala due to last day being holiday in Kerala.

The notes to accounts and other observations if any in the Auditors' Report areself-explanatory and therefore do not call for any further comments.

Cost Auditors

Pursuant to the provisions of Section 148 of the Act M/s J.P. Gupta & AssociatesCost Accountants were appointed as the Cost Auditors to conduct the audit of theCompany's Cost Records for the year ended March 31 2015 and the remuneration has beenratified by the shareholders in the 30th Annual General Meeting of the Company held onSeptember 25 2014.

The cost audit for the said period has been completed and the Cost Auditors' Reportwill be submitted with the Central Government within the prescribed time.

Based on the recommendations of the Audit Committee the Board of Directors hasappointed M/s G.T. & Co. Cost Accountants (Firm's Registration Number: 000253) (afirm formed by Mr. J.P. Gupta proprietor of the existing cost auditors viz. M/s. J.P.Gupta & Associates Cost Accountants) as cost auditors of the Company for thefinancial year 2015-16 pursuant to Section 148 of the Act. As required the resolution forratification of remuneration of cost auditor has been included in the notice of the AGMfor shareholders' approval. The Cost Audit Report for the financial year 2013-14 was filedon September 12 2014 well before the last date of filing being September 30 2014.

Secretarial Audit

Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company engagedthe services of M/s R&D Company Secretaries Practicing Company Secretaries toconduct the Secretarial Audit of the Company for the financial year ended March 31 2015.The Secretarial Audit Report (in Form MR-3) is attached as Annexure F to this Report.

The Secretarial Audit Report contains observation in respect of excess remunerationpaid to Managing Director during the financial year 2014-15 and in this respect theCompany has decided to seek the approval of Central Government pursuant to shareholders'approval being sought in the ensuing Annual General Meeting of the Company.

Material changes and commitments affecting the financial position of the Company whichhave occurred between March 31 2015 and date of the Report

Except as disclosed elsewhere in the Annual Report there have been no material changesand commitments which can affect the financial position of the Company between the end ofthe financial year and the date of report.

As required under Section 134(3) of the Act the Board of Directors inform the membersthat during the financial year there have been no material changes except as disclosedelsewhere in report:

• in the nature of Company's business

• in the Company's subsidiaries or in the nature of business carried out by themand

• in the classes of business in which the Company has an interest.

Energy Conservation Technology Absorption & Foreign Exchange

Particulars required pursuant to Section 134(3)(m) of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 regarding conservation of energy technologyabsorption and foreign exchange earnings & outgo are given in Annexure A hereto andforms part of this Report.

Extract of Annual Return

In accordance with the provisions of section 134(3)(a) of the Act the extract ofAnnual Return in Form MGT-9 as on March 31 2015 is attached as Annexure B hereto andforms a part of this Report.

Directors' Responsibility Statement

The Directors hereby confirm:

a) that in the preparation of the annual financial statements for the financial yearended March 31 2015 the applicable Accounting Standards had been followed along withproper explanation relating to material departures;

b) that for the financial year ended March 31 2015 such accounting policies asmentioned in the Notes to the financial statements have been applied consistently andjudgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company and of the profit and loss ofthe Company for the year ended March 31 2015;

c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual accounts have been prepared on a going concern basis;

e) that proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and were operating effectively; and

f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.

Particulars of loans guarantees or investments under Section 186 of the Act

Details of loans guarantees and investments covered under the provisions of Section186 of the Act are given in the notes to the financial statements.

Risk management

The Company has formulated a Risk Management Policy and monitors the risk managementplan on a periodic basis. The Company has defined a structured approach to manageuncertainty and to make use of these in the decision making in all business decisions andcorporate functions.

Insurance

Risk mitigation continues to be a key area of concern for the Company which hasregularly invested in insuring itself against unforeseen risks. The Company's stocks andinsurable assets like building plant & machinery computer equipments officeequipments furniture & fixtures lease hold improvements and upcoming projects havebeen adequately insured against major risks. The Company has also taken appropriateproduct liability insurance policies for conducting clinical trials and for insuring itsproducts (manufactured & sold) with an extension of unnamed vendor liability and addon cover of public liability inclusive of pollution liability to cover the risk on accountof claims if any filed against the Company.

Internal Control System

Your Company has established a system of internal controls to ensure that assets aresafeguarded and transactions are appropriately authorised recorded and reported. TheCompany's internal control system comprises internal audit carried out by independentfirms of Chartered Accountants and periodical review by the management. The AuditCommittee of the Board of Directors addresses significant issues raised by both theInternal Auditors and the Statutory Auditors.

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

The management believes that the overall internal control system is dynamic andreflects the current requirements at all times hence ensuring that appropriate proceduresand controls are in place. Your Company is proactively identifying the areas for furtherimprovement which shall remain an ongoing process.

Vigil Mechanism/Whistle Blower Policy

Your Company has adopted a Whistle Blower Policy with a view to provide its employeesan avenue to raise any sensitive concerns regarding any unethical behaviour or wrongfulconduct and to provide adequate safeguard for protection from any victimization.

Further the Act and revised Clause 49 of the Listing Agreement mandated every listedCompany to establish a vigil mechanism accordingly the Company has amended the policy toalign the same with the provisions of Section 177(9) of the Act read with Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 and Clause 49 of the ListingAgreement and the same is available on the website of the Company. This Policy inter-aliaprovides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.

Corporate Social Responsibility

The provisions of Section 135 of the Act regarding Corporate Social Responsibility arenot attracted to the Company as the Company does not fall under the threshold limit ofnetworth of Rs.500 crore or turnover of Rs.1000 crore or a net profit of Rs.5 croreduring the financial year. However the Company has been over the years pursuingCorporate Social Responsibility by putting continuous efforts in the areas of healtheducation and patient awareness/assistance programs towards the development of happier andhealthier society.

Related Party Transactions

As per the provisions of the Act and the Listing Agreement your Company has formulateda Policy on Related Party Transactions which is also available on Company's website athttp://www.panacea-biotec.com/statutorypolicies. The Policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and Related Parties.

This Policy specifically deals with the review and approval of Material Related PartyTransactions keeping in mind the potential or actual conflicts of interest that may arisebecause of entering into these transactions. All Related Party Transactions are placedbefore the Audit Committee for review and approval. Wherever applicable prior omnibusapproval is obtained for related party transactions on a quarterly basis for transactionswhich are of repetitive nature and/or entered in the ordinary course of business and areat arm's length basis. During the year all the related party transactions entered intowere on an arm's length basis. The Company has not entered into any material related partytransactions i.e. transactions exceeding 10% of the annual consolidated turnover as perthe last audited financial statements. Suitable disclosures as required under AS-18 havebeen made in the notes to the financial statements.

Information on transactions with related parties pursuant to Section 134(3)(h) of theAct read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure C asper the prescribed Form AOC-2 and the same forms part of this report.

Particulars of Employees and Related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said Rules is provided in the Annexure D forming partof the Annual Report.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in the Annexure E forming part of the AnnualReport.

Prevention of Sexual Harassment at Workplace

As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and Rules made thereunder your Company hasconstituted Internal Complaints Committees (ICC). During the year one complaint wasreceived and the same has been satisfactorily resolved by the said Committee.

Acknowledgements

Your Directors acknowledge with gratitude the co-operation and assistance received fromthe UN Agencies Central Government State Governments and all other Government agenciesand encouragement they have extended to the Company. Your Directors also thank theshareholders Financial Institutions Banks/ other lenders Customers Vendors and otherbusiness associates for their confidence in the Company and its management and lookforward for their continuous support. The Board wishes to place on record its appreciationfor the dedication and commitment of your Company's employees at all levels which hascontinued to be our major strength.

For and on behalf of the Board
Dated: August 132015 Soshil Kumar Jain
Place: New Delhi Chairman

Annexure to the Directors' Report

Annexure A

Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo required under the Companies (Accounts) Rules 2014

I. Conservation of Energy

The Company believes that energy conservation is the most economical solution to energyshortages that our country is facing and is a more environmentally benign alternative toincreased energy production if practiced with rigour. The Company strives to be energyefficient by being conservative in its approach of energy utilisation and also utilisingenergy efficient devices. Therefore conservation of energy has always been a prime focusarea of the Company. The Company regularly reviews energy consumption and maintainseffective control on utilisation of energy by adopting measures to reduce wastage andoptimise consumption. The Company has undertaken several measures to minimise energylosses and ensure sustainable energy utilisation.

1. Energy Conservation measures taken

The Company had devised its production lines and other facilities keeping in view theobjective of minimum energy losses. The following are the major energy conservationmeasures implemented during the year under review and recent past:

• Use of low capacity 22.5 KW air compressor (air cooled) instead of aircompressor having higher capacity 45 KW (water cooled) at Lalru.

• During winter season at Lalru low capacity chilled water supply pump of 25 HPhave been used instead of water supply pump having higher capacity of 75 HP.

• 100% use of treated ETP water for irrigation purpose.

• Use of RO rejected water for fire hydrant system instead of drainage.

• Installation of motion sensor for lighting control at Lalru and Mohali.

• Modification of upper limit of temperatures in AC storage area & in foilstorage area.

2. Additional Investments/ Proposals if any for reduction of Energy Consumption:

The Company's initiatives in energy consumption extend beyond the needs of the presentto ensure sustainable growth for years ahead. Continuous efforts are being made to furtherreduce the expenditure on power & fuel in the time to come.

3. Impact of measures taken and impact on cost of production of goods:

The energy conservation measures indicated above have helped the Company to restrictthe impact of increase in the cost of energy thereby reducing the cost of production ofgoods to that extent.

Form A

Particulars of Consumption of Energy

Current Year Previous Year
A. Power and Fuel Consumption
1. Electricity
(a) Purchased
Units (Nos. in thousand) 24705.1 26070.4
Total Amount (Rs. in million) 175.2 186.0
Rate/Unit (Rs.) 7.1 7.1
(b) Own generation
(i) Through Diesel Generator
Units (Nos. in thousand) 723.4 2058.0
Unit per litre of Diesel/Oil 3.4 3.5
Cost/Unit (Rs.) 15.5 15.3
(ii) Through Steam Turbine/Generator
Units (Nos.) Nil Nil
Unit per litre of Diesel/Oil
Cost/Unit (Rs.)
2. Coal
Quantity (tonnes) Nil Nil
Total Cost
Average Rate

 

Current Year Previous Year
3. Furnace Oil
Quantity (Kilolitres) 343.9 757.0
Total Cost (Rs. in Million) 10.9 37.4
Rate/Unit (Rs.) 31.8 49.2
4. Others/Internal generation
Quantity Nil Nil
Total Cost
Rate/Unit
B. Consumption per unit of production
Tablets
Production (no. in thousand) 647083 655511
Electricity Consumption (Units per thousand) 4.6 3.9
Capsules
Production (no. in thousand) 126506 108787
Electricity Consumption (Units per thousand) 17.0 22.9
Syrups
Production (in liters) 198028 176905
Electricity Consumption (Units per kiloliter) 0.3 0.3
Gels
Production (in kilograms) 35067 47879
Electricity Consumption (Units per kilogram) 5.4 6.4
Vaccines
Production (no. of vials in thousand) 20304 7991
Electricity Consumption (Units per thousand) 117.8 635.5
Pre-filled Syringes (PFS)
Production (no. of PFS in thousand) 767 495
Electricity Consumption (Units per thousand) 269.4 287.3
Granules (in kilograms)
Production (Packs in thousands) 11622 12783
Electricity Consumption (Units per kilogram) 0.7 0.6
Injections
Production (no. of injection in thousand) 54 13
Electricity Consumption (Units per thousand) 913.8 8468.3

II. Technology Absorption

Form B

Form for disclosure of particulars with respect to Technology Absorption

Research & Development (R&D)

1. Specific areas in which R&D is carried out by the Company

Research & Development is a key fundamental strength of the Company. The Company isa research-focused and IPR oriented with one of its end objectives as innovation anddevelopment of patentable products and technologies. Additionally the Company is alsoinvolved in research on technologies for development of products suitable for substituteas cost effective alternatives that would address unmet medical needs and increase patientconvenience and compliance.

The areas of research being pursued by the Company include:

• Small Molecule Drug Discovery (NCE Research) in 3 Therapeutic Areas viz.Metabolic Disorders (Diabetes &

Obesity) Infectious Diseases and CNS Disorders.

• Platform Technology - SPORTS Technology.

• NDA formulation development.

• Development of peptides.

• Development of biosimilar therapeutic products & monoclonal antibodies.

2. Benefits derived as a result of the above R&D

• Development of Novel Drug Delivery products.

• Bringing innovative products to market.

• Fulfilling unmet therapeutic needs and customer satisfaction.

• Improved product quality and safety aspects.

• Competitively priced products.

• Minimization of wastes.

• Grant of new product/process patents.

• Entry into newer markets and export of quality products

• Solving public health problems with the availability of vaccines forimmunization of public at large

3. Future Plan of Action

The Company will continue to focus on Research & Development activities for growingits revenues and profitability inter-alia in the following areas:

• Oral Immediate and Modified Release Formulation

• Technology based Injectable dosage form

• Nano-emulsion technology based dosage form

• Polymeric Nano-particulate system

• Nano-crystal Technology

• Solid-Solid Dispersion of Critical Dose Drugs

• Biodegradable Polymer Based Long Acting Injection

• Liposomal drug delivery technology

• IPV based pentavalent and hexavalent combination vaccines

• Recombinant polysaccharide conjugate and cell culture based vaccines.

• Development of biosimilar therapeutic products and monoclonal antibodies.

4. Expenditure on R&D

(Rs. in million)

2014-15 2013-14
a) Revenue (excluding Depreciation on R&D assets) 453.7 772.5
b) Capital 14.5 116.3
c) Total 468.2 888.8
d) Total R&D expenditure as a percentage of net sales 7% 19%

Technology absorption adaptation and innovation

1. Efforts in brief made towards technology adaptation and innovation:

Research & Development plays a vital role in developing and adopting newtechnologies to enhance our operational efficiencies. The Company is continuously focusingon cutting-edge science with a customer focus that can be converted into commerciallyviable applications to support its business segments pharmaceutical formulations andbiopharmaceuticals. The Company is actively involved in research & development ofvaccines biopharmaceuticals proteins peptides novel drug delivery systems advanceddrug delivery systems and drug discovery (small molecules) in compliance withinternational regulatory standards.

The R&D centers of the company have developed several indigenous technologies inrespect of various products being manufactured. The latest technological innovation is thedevelopment & successful commercialization of Bemustine (Bendamustine HCl) Paclitrust(Paclitaxel injection) PacliAll (Paclitaxel protein-bound particles for injectablesuspension) Docetrust (Docetaxel injection) Ramy 24 Capsules (Ramipril modified releasecapsules) and Fosbait (Lanthanum carbonate chewable tablets). The registration dossiersfor several generic products have recently been filed for USFDA approval.

2. Benefits derived as a result of the above efforts include product improvement costreduction product development import substitution competitive products product qualityimprovement product development and import substitution. With in-licensing arrangementsthe Company will be able to commercialize these products in the domestic and internationalmarkets.

3. In case of imported technology (imported during the last 5 years reckoned from thebeginning of the financial year) following information may be furnished:

Technology imported Year of import Has technology been fully absorbed If not fully absorbed areas where this has not taken place reasons thereof and future plan(s) of action
(a) (b) (c) (d)
1. Technology for development of sabin IPV Vaccine 2011-12 No Technology transfer is in progress. Optimization in original process at Netherland facility to improve the process in terms of yield has been completed. Demonstration of optimized process and establishment of process at Lab scale is under progress.

III. Foreign Exchange Earnings and Outgo

1. Activities relating to exports

During the year 2014-15 the Company's total export revenue was Rs.2519.2 million(including R&D income of Rs.222.7 million) as compared to Rs.1617.4 million(including R&D income of Rs.178.5 million) in the previous year. Exports contributed37.1% of the net revenue from operations of the Company during financial year 2014-15 ascompared to 32.1% during previous year. The major countries where the Company's productswere exported during the year included US Germany Russia Brazil Sri Lanka SerbiaTurkey Phillipines Kazakhstan Vietman and Tanzania.

2. Initiatives taken to increase export

The Company focuses on the emerging and ROW countries. Over the last couple of yearsstrategic collaborations have been initiated in more than 20 countries with customizedbusiness models. Till date vaccines have been registered in 11 countries with furtherregistrations in around 20 countries expected in the near future. The Company is targetingto enter emerging markets with sizeable birth cohort (3-5 mn) to expand business with aview to reduce dependence over institutional business.

The Company has also laid its future growth strategy with focus on the regulatedmarkets of US and Europe. The Company launched its first product Tacpan (Tacrolimus) in2011 in Germany and it has now become the 2nd largest generic in Germany. The Company'sIndirect WOS is selling the products there in trade as well as in tender markets. TheCompany has also launched Tacrolimus in USA in December 2012 and is currently in theprocess of entering in the key pharmacy accounts through its local strategic partner. TheCompany has filed 6 more ANDAs with USFDA since its first product was launched in USA. TheCompany's strategy is to develop and launch selective portfolio of difficult to developgenerics with high barrier to entry. The Company is also developing products forregistration pursuant to application under section 505(b)(2) in US markets.

The Company has also created a global presence through its wholly-owned subsidiaries inGermany and Switzerland. During the year the Company has continued to supply Easyfive-TTVaccines against long-term supply order received from UNICEF during previous financialyear for supply of vaccines for the calendar years 2014 to 2016 and has also won anational tender in Philippines for supply of Easyfive-TT vaccine.

3. Development of new export markets for Products and Export Plans

The Company is in the final stages of registration and approval in key markets likeEgypt South Africa & Saudi Arabia (GCC). The Company has forayed into the GCC marketsby successfully registering the products in UAE. Commercialization of products is expectedto start during the current financial year. The Company is also in the process of filingits oncological range of products in the key emerging markets and expects to start theexport from the current financial year onwards.

4. Total foreign exchange earned and used

(Rs. in million)

Particulars 2014-15 2013-14
Foreign Exchange Earned
F.O.B. value of Exports 2125.1 1263.8
Income from distribution rights 2.3 2.3
Research & License Fees income 222.7 178.5
Interest Income from subsidiary company 48.7 94.6
Total 2398.8 1539.2
Foreign Exchange Used
Raw Materials & Packing Materials 1392.1 490.1
Capital Goods 7.2 34.7
Know-how Fee 20.6 18.8
Interest 83.1 89.6
Professional & Consultation Fees 55.2 73.5
Other Expenses
- Patents Trade Marks & Product Registration 7.0 7.4
- Advertising and Sales Promotion 37.6 36.6
- Commission on Sales 5.8 28.2
- Processing charges - 50.4
- Others 64.8 112.7
Total 1673.4 942.1
For and on behalf of the Board
Dated: August 132015 Soshil Kumar Jain
Place: New Delhi Chairman

ANNEXURE B

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on March 312015

Pursuant to Section 92 (3) of the Companies Act 2013 read with rule 12(1) of theCompany (Management & Administration) Rules 2014.

I. REGISTRATION & OTHER DETAILS:
1 CIN L33117PB1984PLC022350
2 Registration Date 02-02-1984
3 Name of the Company Panacea Biotec Limited
4 Category/Sub-category of the Company Company Limited by Shares
5 Address of the Registered office & contact details Ambala Chandigarh Highway Lalru-140501 Punjab
Phone: +91-1762-505900
E-mail: corporate@panaceabiotec.com
6 Whether listed company Yes
7 Name Address & contact details of the Registrar & M/s. Skyline Financial Services Private Limited
Transfer Agent if any. D-153 A 1st Floor Okhla Indl. Area Phase-I New Delhi - 110020 India

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10% or more of the total turnover of thecompany shall be stated)

S. No. Name and Description of main products/services NIC Code of the Product/service % to total turnover of the company
1 Manufacture of allopathic Pharmaceuticals preparations 21002 100

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

S. No. Name and address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of shares held Applicable

Section

1 Radhika Heights Limited U74899DL1995PLC068967 Wholly Owned Subsidiary 100 section 2(87)
2 Rees Investments Limited NA Wholly Owned Subsidiary 100 section 2(87)
3 Panacea Biotec (International) SA NA Wholly Owned Subsidiary 100 section 2(87)
4 Panacea Biotec GmbH (Under liquidation) NA Wholly Owned Subsidiary 100 section 2(87)
5 NewRise Healthcare Private Limited U85110DL2002PTC114987 Subsidiary 87.4 section 2(87)
6 PanEra Biotec Private Limited U24231DL1999PTC102557 Associate 50 section 2(6)
7 Adveta Power Limited U40101HP2011PTC031700 Joint Venture 50 section 2(6)
8 Chiron Panacea Vaccines Private Limited (Under liquidation) U24230MH2004PTC147790 Joint Venture 50 section 2(6)
9 Panacea Biotec Germany GmbH NA Step down Subsidiary 100 section 2(87)
10 Cabana Construction Private Limited U80904DL2007PTC166661 Step down Subsidiary 100 section 2(87)
11 Radicura Infra Limited U74899DL1993PLC056682 Step down Subsidiary 100 section 2(87)
12 Nirmala Buildwell Private Limited U55101DL2007PTC166763 Step down Subsidiary 100 section 2(87)
13 Sunanda Infra Limited U13209DL2007PLC163082 Step down Subsidiary 100 section 2(87)
14 Cabana Structures Limited U15122DL2007PLC170999 Step down Subsidiary 100 section 2(87)
15 Nirmala Organic Farms Resorts Private Limited U01403DL2010PTC198194 Step down Subsidiary 100 section 2(87)
16 Kelisia Holdings Limited NA Step down Subsidiary 100 section 2(87)

IV. SHARE HOLDING PATTERN

(Equity share capital breakup as percentage of total equity

(i) Category-wise Share Holding

No. of Shares held at the beginning of the year (As on March 312014)

No. of Shares held at the end of the year (As on March 312015)

% Change during the year
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares
A. Promoters*
(1) Indian
a) Individual/ HUF 43510100 - 43510100 71.04% 43309493 - 43309493 70.71% -0.33%
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - - - - - - - - -
e) Banks/FI - - - - - - - - -
(f) Partnership Firms 2313454 - 2313454 3.78% 2313454 - 2313454 3.78% -
Sub Total (A) (1) 45823554 - 45823554 74.81% 45622947 - 45622947 74.49% -0.33%

 

No. of Shares held at the beginning of the year (As on March 312014)

No. of Shares held at the end of the year (As on March 312015)

% Change during the year
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares
(2) Foreign - - - - - - - - -
a) NRI Individuals - - - - - - - - -
b) Other Individuals - - - - - - - - -
c) Bodies Corp. - - - - - - - - -
d) Any other - - - - - - - - -
Sub Total (A) (2) - - - - - - - - -
TOTAL (A) 45823554 - 45823554 74.81% 45622947 - 45622947 74.49% -0.33%
B. Public Shareholding
1. Institutions
a) Mutual Funds - - - - 353299 - 353299 0.58% 0.58%
b) Banks/FI 32435 - 32435 0.05% 28470 - 28470 0.05% -0.00%
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture Capital Funds - - - - - - - - -
f) Insurance Companies - - - - - - - - -
g) FIIs 1003451 1003451 1.64% 798568 798568 1.30% -0.34%
h) Foreign Venture Capital Funds - - - - - - - - -
i) Others (specify) - - - - - - - - -
Sub-total (B)(1): 1035886 - 1035886 1.69% 1180337 - 1180337 1.93% 0.24%
2. Non-Institutions
a) Bodies Corporate 9650220 1000 9651220 15.76% 9910260 1000 9911260 16.18% 0.42%
i) Indian - - - - - - - - -
ii) Overseas - - - - - - - - -
b) Individuals
i) Individual shareholders holding nominal share capital upto Rs.1 lakh 2865419 508791 3374210 5.51% 2939318 470791 3410109 5.57% 0.06%
ii) Individual shareholders holding nominal share capital in excess of Rs.1 lakh 135000 135000 0.22% 179572 179572 0.29% 0.07%
Hindu Undivided Family 104835 - 104835 0.17% 81825 - 81825 0.13% -0.04%
Non Resident Indians 59699 - 59699 0.10% 127598 - 127598 0.21% 0.11%
Overseas Corporate Bodies 1045000 - 1045000 1.71% 639500 - 639500 1.04% -0.67%
Foreign Nationals - - - - - - - - -
Clearing Members 18887 - 18887 0.03% 95143 - 95143 0.16% 0.13%
Trusts - - - - - - - - -
Foreign Bodies - D R 2455 - 2455 0.00% 2455 - 2455 0.00% -
Sub-total (B)(2):- 13881515 509791 14391306 23.50% 13975671 471791 14447462 23.59% 0.09%
Total Public (B) 14917401 509791 15427192 25.19% 15156008 471791 15627799 25.51% 0.32%
C. Shares held by Custodian for GDRs & ADRs - - - - - - - - -
Grand Total (A+B+C) 60740955 509791 61250746 100.00% 60778955 471791 61250746 100.00% -

 

(ii) Shareholding of Promoters* Shareholder's Name
S. No.

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding during the year
No. of

Shares

% of total Shares of the company % of Shares Pledged/ encumbered to total shares No. of

Shares

% of total Shares of the company % of Shares Pledged/encumbered to total shares
1 Mr. Soshil Kumar Jain 5000000 8.16% - 5000000 8.16% 100.00% -
2 Mr. Ravinder Jain 5712300 9.33% - 5712300 9.33% - -
3 Dr. Rajesh Jain 6213500 10.14% - 6213500 10.14% 100.00% -
4 Mr. Sandeep Jain 4792100 7.82% - 4792100 7.82% 100.00% -
5 Mrs. Nirmala Jain 2511000 4.10% - 2511000 4.10% - -
6 Mrs. Sunanda Jain 635000 1.04% - 635000 1.04% - -
7 Mrs. Meena Jain 897000 1.46% - 897000 1.46% - -
8 Mrs. Pamilla Jain 816500 1.33% - 816500 1.33% - -
9 Soshil Kumar Jain (HUF) 2380700 3.89% - 2181093 3.56% - -0.33%
10 Ravinder Jain (HUF) 4135000 6.75% - 4135000 6.75% - -
11 Rajesh Jain (HUF) 4368500 7.13% - 4368500 7.13% - -
12 Sandeep Jain (HUF) 4105000 6.70% - 4105000 6.70% - -
13 Mr. Ankesh Jain 307000 0.50% - 307000 0.50% - -
14 Mr. Harshet Jain 299500 0.49% - 299500 0.49% - -
15 Mr. Nipun Jain 300000 0.49% - 300000 0.49% - -
16 Ms. Priyanka Jain 318000 0.52% - 318000 0.52% - -
17 Mrs. Radhika Jain 357000 0.58% - 357000 0.58% - -
18 Mr. Sumit Jain 358500 0.59% - 358500 0.59% - -
19 Mr. Abhey Kumar Jain 1000 0.00% - 1000 0.00% - -
20 Ms. Anu Jain 2000 0.00% - 1000 0.00% - -0.00%
21 Mr. Ashish Jain 500 0.00% - 500 0.00% - -
22 First Lucre Partnership Co. 2255815 3.68% - 2255815 3.68% - -
23 Second Lucre Partnership Co. 57639 0.09% - 57639 0.09% - -

(iii) Change in Promoters' Shareholding* (please specify if there is no change)

S. No. Particulars Date Reason

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares No. of shares % of total shares
1 Soshil Kumar Jain (HUF) 01.04.2014 2380700 3.89% 2380700 3.89%
26.12.2014 Transfer (184607) -0.30% 2196093 3.59%
07.01.2015 Transfer (15000) -0.02% 2181093 3.56%
At the end of the year 2181093 3.56% 2181093 3.56%
2 Anu jain 01.04.2014 2000 0.00% 2000 0.00%
Changes during the year 25.04.2014 Transfer (1000) 0.00% 1000 0.00%
At the end of the year 1000 0.00% 1000 0.00%

* Promoters include promoter group as defined under SEBI (Issue of Capital andDisclosure Requirements) Regulations 2009

(iv) Shareholding patterns of top 10 shareholders*

(Other than Directors Promoters and Holders of GDRs and ADRs):

S. No. For each of the Top 10 shareholders* Date Reason

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares No. of shares % of total shares
1 Serum Institute of India Limited
At the beginning of the year 01.04.2014 8932632 14.58% 8932632 14.58%
Changes during the year NIL
At the end of the year 31.03.2015 8932632 14.58% 8932632 14.58%
2 Gain Premium Limited
At the beginning of the year 01.04.2014 1045000 1.71% 1045000 1.71%
Changes during the year 23.05.2014 Transfer (100000) -0.16% 945000 1.54%
30.05.2014 Transfer (245000) -0.40% 700000 1.14%
30.06.2014 Transfer (200000) -0.33% 500000 0.82%
31.03.2015 Transfer 139500 0.23% 639500 1.04%
At the end of the year 31.03.2015 639500 1.04% 639500 1.04%
3 BNP Paribas Arbitrage
At the beginning of the year 01.04.2014 493777 0.81% 493777 0.81%
Changes during the year NIL
At the end of the year 31.03.2015 493777 0.81% 493777 0.81%
4 Privatabank Ihag Zurich AG
At the beginning of the year 01.04.2014 262691 0.43% 262691 0.43%
Changes during the year N L
At the end of the year 31.03.2015 262691 0.43% 262691 0.43%
5 Chakan Investment Private Limited
At the beginning of the year 01.04.2014 222149 0.36% 222149 0.36%
Changes during the year NIL
At the end of the year 31.03.2015 222149 0.36% 222149 0.36%
6 ICICI Prudential Growth Fund- Series 2
At the beginning of the year 01.04.2014 - - - -
Changes during the year 22.08.2014 Purchase 27747 0.05% 27747 0.05%
29.08.2014 Purchase 11456 0.02% 39203 0.06%
05.09.2014 Purchase 34793 0.06% 73996 0.12%
12.09.2014 Purchase 7153 0.01% 81149 0.13%
18.09.2014 Purchase 45467 0.07% 126616 0.21%
19.09.2014 Purchase 60291 0.10% 186907 0.31%
30.09.2014 Purchase 16273 0.03% 203180 0.33%
At the end of the year 31.03.2015 203180 0.33% 203180 0.33%
7 ICICI Prudential Exports And Other Services Fu nd
At the beginning of the year 01.04.2014 - - - -
Changes during the year 16.05.2014 Purchase 19550 0.03% 19550 0.03%
23.05.2014 Purchase 34346 0.06% 53896 0.09%
30.05.2014 Purchase 126280 0.21% 180176 0.29%
06.06.2014 Purchase 53942 0.09% 234118 0.38%
13.06.2014 Purchase 55204 0.09% 289322 0.47%
20.06.2014 Purchase 60678 0.10% 350000 0.57%
18.07.2014 Purchase 50000 0.08% 400000 0.65%
30.09.2014 Transfer (133521) -0.22% 266479 0.44%
03.10.2014 Transfer (31306) -0.05% 235173 0.38%
14.11.2014 Transfer (46186) -0.08% 188987 0.31%
31.12.2014 Transfer (38868) -0.06% 150119 0.25%
At the end of the year 31.03.2015 150119 0.25% 150119 0.25%
8 Poonawalla Investment & Industries Private Limited
At the beginning of the year 01.04.2014 79610 0.13% 79610 0.13%
Changes during the year NIL
At the end of the year 31.03.2015 79610 0.13% 79610 0.13%
9 Monarch Project & Finmarkets Limited
At the beginning of the year 01.04.2014 - - - -
Changes during the year 03.10.2014 Purchase 350 0.00% 350 0.00%
10.10.2014 Purchase 125090 0.20% 125440 0.20%
14.11.2014 Purchase 25 0.00% 125465 0.20%
21.11.2014 Purchase 25 0.00% 125490 0.20%
28.11.2014 Transfer (6728) -0.01% 118762 0.19%
05.12.2014 Transfer (212) 0.00% 118550 0.19%
12.12.2014 Transfer (75) 0.00% 118475 0.19%
31.12.2014 Purchase 100 0.00% 118575 0.19%
09.01.2015 Purchase 105 0.00% 118680 0.19%
16.01.2015 Transfer (11790) -0.02% 106890 0.17%
06.02.2015 Transfer (100) 0.00% 106790 0.17%
13.02.2015 Purchase 30 0.00% 106820 0.17%
20.02.2015 Transfer (50000) -0.08% 56820 0.09%
27.02.2015 Purchase 300 0.00% 57120 0.09%
13.03.2015 Transfer (200) 0.00% 56920 0.09%
20.03.2015 Transfer (100) 0.00% 56820 0.09%
27.03.2015 Purchase 300 0.00% 57120 0.09%
31.03.2015 Purchase 300 0.00% 57420 0.09%
At the end of the year 31.03.2015 57420 0.09% 57420 0.09%
10 H S Gowrishankara
At the beginning of the year 01.04.2014 - - - -
Changes during the year 11.04.2014 Purchase 30000 0.05% 30000 0.05%
07.11.2014 Purchase 5000 0.01% 35000 0.06%
28.11.2014 Purchase 3000 0.00% 38000 0.06%
31.12.2014 Purchase 2000 0.00% 40000 0.07%
09.01.2015 Purchase 7000 0.01% 47000 0.08%
13.02.2015 Purchase 2000 0.00% 49000 0.08%
27.03.2015 Purchase 4000 0.01% 53000 0.09%
At the end of the year 31.03.2015 53000 0.09% 53000 0.09%

*Top 10 Shareholders as on March 31 2015

(v) Shareholding of Directors and Key Managerial Personnel

S. No. Shareholding of each Directors and each Key Managerial Personnel Date Reason

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares No. of shares % of total shares
A. Executive Directors :
1 Mr. Soshil Kumar Jain
At the beginning of the year 01.04.2014 5000000 8.16% 5000000 8.16%
Changes during the year NIL
At the end of the year 31.03.2015 5000000 8.16% 5000000 8.16%
2 Mr. Ravinder Jain
At the beginning of the year 01.04.2014 5712300 9.33% 5712300 9.33%
Changes during the year NIL
At the end of the year 31.03.2015 5712300 9.33% 5712300 9.33%
3 Dr. Rajesh Jain
At the beginning of the year 01.04.2014 6213500 10.14% 6213500 10.14%
Changes during the year NIL
At the end of the year 31.03.2015 6213500 10.14% 6213500 10.14%
4 Mr. Sandeep Jain
At the beginning of the year 01.04.2014 4792100 7.82% 4792100 7.82%
Changes during the year NIL
At the end of the year 31.03.2015 4792100 7.82% 4792100 7.82%
5 Mr. Sumit Jain
At the beginning of the year 01.04.2014 358500 0.59% 358500 0.59%
Changes during the year NIL
At the end of the year 31.03.2015 358500 0.59% 358500 0.59%
B Non Executive Directors
6 Mr. Aditya Narain Saksena
At the beginning of the year 01.04.2014 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
7 Mr. Krishna Murari Lal
At the beginning of the year 01.04.2014 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
8 Mr. Namdeo Narayan Khamitkar
At the beginning of the year 01.04.2014 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
9 Mr. Raghava Lakshmi Narasimhan
At the beginning of the year 01.04.2014 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
10 Mr. Om Prakash Kelkar*
At the beginning of the year 31.10.2014 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
11 Mrs. Manjula Upadhyay*
At the beginning of the year 30.03.2015 - - - -
Changes during the year - - - -
At the end of the year 31.03.2015 - - - -
12 Mr. Sunil Kapoor*
At the beginning of the year 31.03.2014 - - - -
Changes during the year - - - -
At the end of the year 04.08.2014 - - - -
C Key Managerial Personnel (KMP's)
13 Mr. Vinod Goel (Company Secretary)
At the beginning of the year 01.04.2014 250 0.00% 250 0.00%
Changes during the year NIL
At the end of the year 31.03.2015 250 0.00% 250 0.00%
14 Mr. Partha Sarathi De*
At the beginning of the year 01.04.2014 - - - -
Changes during the year - - - -
At the end of the year 30.11.2014 - - - -

* Date of Shareholding from the date of appintment and till the date of cessation

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment.

(Amt. Rs./Lacs)
Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 91186 6456 1402 99044
ii) Interest due but not paid 5207 265 46 5518
iii) Interest accrued but not due 54 153 2 209
Total (i+ii+iii) 96447 6874 1450 104771
Change in Indebtedness during the financial year
* Addition 8488 - - 8488
* Reduction - 523 1450 1973
Net Change 8488 523 1450 6515
Indebtedness at the end of the financial year
i) Principal Amount 95597 5881 - 101477
ii) Interest due but not paid 9319 438 - 9757
iii) Interest accrued but not due 20 33 - 52
Total (i+ii+iii) 104935 6351 - 111286

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

S. No. Particulars of Remuneration

Name of MD/WTD/ Manager

Name Soshil Kumar Jain Ravinder Jain Rajesh Jain Sandeep Jain Sumit Jain Total Amount (Rs/Lac)
Designation Chairman Managing Director Joint Managing Director Joint Managing Director Director Operations & Projects
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 72.00 72.00 60.00 56.40 25.20 285.60
(b) Value of perquisites u/s 17(2) Income Tax Act 1961 8.50 60.37 13.96 8.70 10.50 102.03
(c) Profits in lieu of salary under section 17(3) Income Tax Act 1961 -
2 Stock Option - - - - - -
3 Sweat Equity - - - - - -
4 Commission - - - - - -
- as % of profit - - - - - -
- others specify - - - - - -
5 Others please specify - - - - - -
Total 80.50 132.37 73.96 65.10 35.70 387.63

 

B. Remu neration to other Directors
S. No. Particulars of Remuneration

Name of Directors

Total Amount
Independent Directors R.L. Narasimhan N.N. Khamitkar K.M. Lal A.N Saksena Sunil Kapoor O.P. Kelkar (Rs/Lac)
1 Fee for attending board committee meetings 1.45 1.75 1.40 1.75 0.60 0.70 7.65
2 Commission - - - - - - -
3 Others - monthly allowances until 30.09.14 0.93 0.93 0.93 0.93 0.62 - 4.34
Total 2.38 2.68 2.33 2.68 1.22 0.70 11.99

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

S. No. Particulars of Remuneration

Name of Key Managerial Personnel

Total Amount (Rs/Lac)
Name Mr. Partha Sarathi De Mr. Vinod Goel
Designation CFO & Head IT & BPR* Sr. VP Legal & CS**
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 63.52 31.99 95.53
(b) Value of perquisites u/s 17(2) Income Tax Act 1961 0.14 0.21 0.35
(c) Profits in lieu of salary under section 17(3) Income- tax Act 1961 - - -
2 Stock Option - - -
3 Sweat Equity

-

-

-

4 Commission - - -
- as % of profit

-

-

-

- others specify - - -
5 Others please specify

-

-

-

Total 63.66 32.21 95.88

*until 30.11.2014 **as on 31.03.2015.

VII. PENALTIES/ PUNISHMENT/ COMPOUNDING OF OFFENCES:

During the year 2014-15 there were no penalties/ punishment/ compounding of offencesunder the Companies Act 2013

For and on behalf of the Board
Dated : August 13 2015 Soshil Kumar Jain
Place : New Delhi Chairman

ANNEXUREC

FORM NO. AOC - 2

[Pursuant to clause (h) of sub section (3) of section 134 of the Companies Act 2013and Rule 8 (2) of the Companies (Accounts) Rules 2014]

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with the related parties referred to in sub- section (1) of Section 188 of theCompanies Act 2013 including certain arms-length transactions under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm's length basis :

S. No. Name of the related party and nature of relationship Nature of contracts/arrangements/transactions Duration of contracts/ arrangements/transactions Salient features of contracts/arrangements/transactions including value if any Date(s) of approval by the Board Amount paid as advances if any Date on which special resolution was passed in General Meeting u/s 188 (1)
(a) (b) (c) (d) (f) (g) (h)
NIL

2. Details of contracts or arrangements or transactions at arm's length basis :

S. No. Name of the related party and nature of relationship Nature of contracts/arrangements/transactions Duration of contracts/ arrangements/transactions Salient features of contracts/ arrangements/transactions including value if any Date(s) of approval by the Board Amount (Rs. in million) Date on which special resolution was passed in General Meeting u/s 188 (1)
(a) (b) (c) (d) (f) (g) (h)
1 PanEra Biotec Private Limited (Associate Company) Agreement for supply of bulk vaccines & Antigens Ongoing Supply agreement for purchase of Bulk Vaccines & Antigens i) 13.02.2014 ii) 31.10.2014 157.6 N.A
2 PanEra Biotec Private Limited (Associate Company) Facility Agreement Ongoing Agreement for providing Manufacturing facility Utilities and Transfer of Raw Materials i) 13.02.2014 ii) 31.10.2014 26.2 N.A
3 Chiron Panacea Vaccines Private Limited (Joint Venture) Facility Agreement Ongoing subject to renewal as per contractual terms Facility Agreement for providing space in Offices Premises at monthly Payment of Rs.27500 30.05.2014 0.3 N.A
4 Radhika Heights Limited (Formerly known as Best on Health Limited) (Wholly owned subsidiary) Lease Agreement Ongoing subject to renewal as per contractual terms Lease Agreement for taking on lease immovable property at New Delhi on monthly rent of Rs.90000 30.05.2014 1.1 N.A
5 NewRise Healthcare Private Limited (Subsidiary) Lease Agreement Ongoing subject to renewal as per contractual terms Lease deed for renting out premises to NewRise Healthcare Private Limited on monthly rent of Rs.7500 30.05.2014 & 31.10.2014 0.1 N.A
6 PanEra Biotec Private Limited (Associate Company) Lease Agreement Ongoing subject to renewal as per contractual terms Lease deed for renting out portion of office remises on monthly rent of Rs.8000 30.05.2014 & 31.10.2014 0.1 N.A
7 Radhika Heights Limited (Formerly known as Best on Health Limited) (Wholly owned subsidiary) Lease Agreement Ongoing subject to renewal as per contractual terms Lease deed for taking on rent office premises on monthly rent of Rs.576000 30.05.2014 & 31.10.2014 6.9 N.A
8 Radhika Heights Limited (Formerly known as Best on Health Limited) (Wholly owned subsidiary) Lease Agreement Ongoing subject to renewal as per contractual terms Lease deed for renting out office premises on monthly rent of Rs.36000 30.05.2014 & 13.02.2015 0.5 N.A
9 Trinidhi Finance Private Limited (Company in which Directors are interested) Lease Agreement Ongoing subject to renewal as per contractual terms Lease deed for renting out office premises on monthly rent of Rs.18000 30.05.2014 & 13.02.2015 0.2 N.A
S. No. Name of the related party and nature of relationship Nature of contracts/arrangements/transactions Duration of contracts/ arrangements/transactions Salient features of contracts/ arrangements/transactions including value if any Date(s) of approval by the Board Approved Contract Amount (Rs. in million) Date on which special resolution was passed in General Meeting u/s 188 (1)
(a) (b) (c) (d) (f) (g) (h)
10 Mr. Ankesh Jain (Relative of Director) Promotion Letter With effect from 01.09.2014 as per the terms of promotion letter Promoted as Head Pharmaceutical Business on monthly remuneration of Rs.100000 31.10.2014 0.8 N.A
11 Mr. Harshet Jain (Relative of Director) Letter of Appointment With effect from 01.09.2014 as per the terms of appointment letter Appointed as Management Trainee - International Marketing on monthly remuneration of Rs.30000 31.10.2014 0.2 N.A

Note:

1. Advance(s) paid if any have been been adjusted against the billings.

2. All related party transactions are approved by the Audit Committee & Board ofDirectors.

For and on behalf of the Board

Dated : August 13 2015 Soshil Kumar Jain

Place : New Delhi Chairman

Annexure D

INFORMATION AS PER RULE 5(1) OF CHAPTER XIII OF COMPANIES (APPOINTMENT AND REMUNERATIONOF MANAGERIAL PERSONNEL) RULES 2014

a. The ratio of the remuneration of each Director to the median remuneration of theemployees and the performance of the Company for the year 2014-15: (Rs. inmillion)

Name of the Director Title Financial Year 2014-15 Financial Year 2013-14 No. of Stock options granted in Financial Year 2014-15 % increase of remuneration as compared to Previous Year* Ratio of remuneration to Ratio of remuneration to MRE** Ratio of remuneration to revenue (FY 2015)
Mr. Soshil Kumar Jain Chairman 8.05 8.03 Nil - 28.89 0.00118
Mr. Ravinder Jain Managing Director 13.23 12.48 Nil - 47.50 0.00194
Dr. Rajesh Jain Joint Managing Director 7.40 7.08 Nil - 26.54 0.00108
Mr. Sandeep Jain Joint Managing Director 6.51 6.46 Nil - 23.36 0.00095
Mr. Sumit Jain Director 3.57 3.51 Nil - 12.81 0.00052

* Increase/ decrease in remuneration during financial year 2014-15 is on account ofchange in perquisite value.

** MRE - Median Remuneration of Employees.

b. The ratio of the remuneration of each Key Managerial Personnel (KMP) to the medianremuneration of the employees and the performance of the Company for the year 2014-15.

(Rs. in million)

Name of the KMP Title Financial Year 2014-15 Financial Year 2013-14 No. of Stock options granted in Financial Year 2014-15 % increase of remuneration as compared to Previous Year Ratio of remuneration to Ratio of remuneration to MRE Ratio of remuneration to revenue (FY 2015)
Mr. Partha Sarathi De* C.F.O and Head IT & BPR 6.37 6.48 Nil 8 % 34.27 0.00140
Mr. Vinod Goel Sr. Vice President - Legal & Company Secretary 3.22 2.77 Nil 4 % 11.56 0.00047

* For the period April 1 2014 to November 30 2014.

c. The Median Remuneration of Employees (MRE) including Whole-time Directors (WTDs) wasRs.278654 and Rs.245564 in financial year 2014-15 and financial year 2013-14respectively. The increase/(decrease) in MRE (including WTDs) in financial year 2014-15as compared to fiscal 2013-14 was 13.48 %. The aggregate remuneration of employeesexcluding WTD grew by 12.75 % over the previous financial year.

d. During the year there is no change/increase in salary of WTDs and aggregateincrease in salary for KMPs was 6 % in financial year 2014-15 over financial year 2013-14.

e. The number of permanent employees on the rolls of the Company as of March 312015and March 312014 was 2708 and 2846 respectively. The revenue growth during financialyear 2014-15 over fiscal 2013-14 was 35% and net loss was reduced significantly.

f. Variations in the market capitalisation of the Company as at the closing date of thecurrent financial year and previous financial year and percentage increase over decreasein the market quotations of the shares of the Company in comparison to the rate at whichthe Company came out with the last public offer:

Particulars

As at March 312015

As at March 312014

Market capitalisation (Rs. in million) BSE 8581.23 BSE 5812.70
NSE 8642.50 NSE 5776.00

Market quotations of the shares of the Company in comparison to the rate at which theCompany came out with the last public offer:

The Company came out with an Initial Public Offer in the year 1995 at a price Rs.60 perequity share of Rs.10 each. The market price of the Company's equity share of Re.1 each(closing price) as on March 312015 was Rs.141.10 on NSE and Rs.140.10 on BSE.

g. As the Company is in loss price earning ratio as at March 312015 and March 312014is not available.

h. During the year under review no variable component of remuneration was availed bythe directors.

i. None of the employees (who are not directors) received remuneration in excess of thehighest paid Director.

j. The remuneration and perquisites provided to the employees including that of theManagement are on par with industry levels. The nomination and remuneration committeecontinuously reviews the compensation of Executive Directors & key managerialpersonnel to align both the shortterm and long-term business objectives of the Company andto link compensation with the achievement of measurable performance goals.

j. It is affirmed that the remuneration is as per the remuneration policy of theCompany.

For and on behalf of the Board

Soshil Kumar Jain

Chairman

Dated : August 13 2015

Place : New Delhi

ANNtAUKtt

Statement pursuant to Section 197(12) of the Companies Act 2013 read with Rules 5(2)& (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and forming part of the Directors' Report for the year ended March 312015.

S. No. Name Designation and Nature of Duties Remuneration (Rs. in million) Qualifications Experience (Years) Date of Commencement of Employment Age (Yrs.) Particulars of Last Employment Name of Employer Designation Period of Service (Years)
A.

Persons employed throughout the Financial Year ended March 312014 who were in receipt of remuneration for the year in which the aggregate was not less than Rs.6000000.

1. Mr. Soshil Kumar Jain Chairman 8.05 Pharmacist 60 02.02.1984 82 None NA NA
2. Mr. Ravinder Jain Managing Director 13.24 Matriculate 35 15.11.1984 58 None NA NA
3. Dr. Rajesh Jain Joint Managing Director 7.40 B. Sc. PGDBM & Advanced Mgmt. Diploma in Market Research Ph.D. 31 15.11.1984 51 None NA NA
4. Mr. Sandeep Jain Joint Managing Director 6.51 B.Com 30 15.11.1984 49 None NA NA
5. Dr. Sanjay Trehan President Drug Discovery Research* 8.41 Ph.D. - Doctor of Philosophy M.Sc. (H) 27 01.07.2004 56 Dr. Reddy's Laboratories Limited Research Director 3 years
B.

Persons employed for a part of the Financial Year ended March 312015 who were in receipt of remuneration for any part of the year at the rate which in the aggregate was not less than Rs.500000 per month:

1. Mr. Partha Sarathi De* C.F.O. and Head IT & BPR 6.37 B. Sc. (Econ) ACA AICWA 27 02.06.2008 53 Piramal Glass Limited President-Finance Glass Group 2.5 years

*For the period from April 1 2014 to November 30 2014.

Notes:

1. Remuneration includes salary commission on profits house rent allowance bonusCompany's contribution to Provident Fund Leave Travel Allowance Medical Assistance andall allowances paid in cash and monetary value of taxable perquisites wherever applicableand also includes Gratuity/ Retirement Benefit.

2. There was no employee who was employed either throughout the financial year or partthereof who was holding either by himself or along with the spouse and dependent children2% or more of the Shares of the Company and drawing remuneration in excess of theremuneration drawn by Managing Director/Joint Managing Director/Whole-time Director.

3. The terms and conditions of employees at Sl. No. 1 to 4 are as approved by the Boardof Directors and Shareholders on the recommendation of Nomination & RemunerationCommittee. The employee at Sl. No. 5 is paid remuneration as per the policy/rules of theCompany.

4. All the above said appointments are contractual.

5. None of the above employees is related to any of the Directors except that Mr.Soshil Kumar Jain Mr. Ravinder Jain Dr. Rajesh Jain and Mr. Sandeep Jain are related toeach other.

6. The nature of duties of Chairman Managing Director and Joint Managing Directors isas under: Mr. Soshil Kumar Jain Chairman - Strategic planning vision and formulation ofstrategies. Mr. Ravinder Jain Managing Director - Overall supervision of day-to-dayoperations with emphasis on strategic planning and business development. Dr. Rajesh JainJoint Managing Director - Overall supervision of day-to-day operations with emphasis onR&D business development and marketing. Mr. Sandeep Jain Joint Managing Director -Overall supervision of day-to-day operations with emphasis on finance internationalmarketing and regulatory affairs.

For and on behalf of the Board
Dated : August 13 2015 Soshil Kumar Jain
Place : New Delhi Chairman

Secretarial Audit Report for the financial year ended March 312015

Annexure F

To

The Members

Panacea Biotec Limited

Ambala Chandigarh Highway

Lalru Punjab- 140 501

In terms of the provisions of section 204(1) of the Companies Act 2013 and Rule 9 ofthe Companies (Appointment and Remuneration Personnel) Rules 2014 and other applicableprovisions if any we have conducted the Secretarial Audit of the compliance ofapplicable statutory provisions and the adherence to good corporate practices by PanaceaBiotec Limited a Company incorporated under the provisions of the Companies Act 1956vide CIN L 33117 PB 1984 PLC 022350 and having its registered office at Ambala ChandigarhHighway Lalru Punjab-140 501 (hereinafter referred to as "the Company").Secretarial Audit was conducted in a manner that provided us a reasonable basis forevaluating the corporate conducts/statutory compliances and expressing our opinionthereon.

Based on our verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct of theSecretarial Audit we hereby report that in our opinion the Company has during the auditperiod covering the financial year ended on March 312015 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter.

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on March 31 2015according to the provisions of:

i. The Companies Act 2013 (the Act) and the rules made thereunder;

ii. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder:

iii. The Depositories Act 1996 and the Regulations and Byelaws framed thereunder:

iv. Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; Not applicable as the Company has notissued/ proposed to issue any Employee Stock Option Scheme and Employee Stock PurchaseScheme during the financial year under review.

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; Not applicable as the Company has not issued any debt securities duringthe financial year under review.

f. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (De-listing of Equity Shares)Regulations 2009; Not applicable as the Company has not delisted/ proposed to delist itsequity shares from any stock exchange during the financial year under review.

h. The Securities and Exchange Board of India (Buy-back of Securities) Regulations1998; Not applicable as the Company has not bought back/ propose to buy back any of itssecurities during the financial year under review.

vi. The Company has identified the following laws as specifically applicable to theCompany:

a. Drugs & Cosmetics Act 1940;

b. Drugs Act 1940;

c. Drug (Control) Act 1950;

d. Narcotic Drugs and Psychotropic Substances Act 1955;

e. Dangerous Drugs Act 1930;

f. Drugs and Magic Remedies (Objectionable Advertisement) Act 1954;

g. Epidemic Diseases Act 1897;

h. Essential Commodities Act 1955;

i. The Poisons Act 1919;

j. The Pharmacy Act 1948;

We have also examined compliance with the applicable clauses

of the following:

i. Secretarial Standards issued by The Institute of Company Secretaries of India; Notapplicable as not notified during the period under review;

ii. The Listing Agreements entered into by the Company with Stock Exchanges.

During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above subject to thefollowing observations:

1. The Company had paid remuneration to Mr. Ravinder Jain as Managing Director of theCompany in excess of the limits prescribed under the provisions of Section 197 read withSchedule V of the Companies Act 2013.

We further report that

During the period under review the Board of Directors of the Company was dulyconstituted with proper balance of Executive Directors Non-Executive Directors andIndependent Directors. The changes in the composition of the Board of Directors that tookplace during the period under review were carried out in compliance with the provisions ofthe Act. Adequate notices were given to all directors to schedule the Board Meetingsagenda and detailed notes on agenda were sent adequately in advance and a system existsfor seeking and obtaining further information and clarifications on the agenda itemsbefore the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes wherever applicable.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period the Company has not enteredinto/carried out any specific events/actions which may have a major bearing on theCompany's affairs.

For R&D Company Secretaries
Debabrata Deb Nath
Place : Delhi Partner
Date : July 312015 FCS No.:7775; CP No.: 8612

This Report is to be read with our letter of even date which is annexed as Annexure Aand forms an integral part of this report.

Annexure A

To

The Members

Panacea Biotec Limited

Ambala-Chandigarh Highway

Lalru Punjab-140 501

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. We believe that the process and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Whereever required we have obtained the management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedure on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

For R&D Company Secretaries
Debabrata Deb Nath
Place : Delhi Partner
Date : July 312015 FCS No.:7775; CP No.: 8612