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RPG Life Sciences Ltd.

BSE: 532983 Sector: Health care
NSE: RPGLIFE ISIN Code: INE105J01010
BSE LIVE 19:40 | 19 Oct 399.20 3.95
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OPEN 397.00
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VOLUME 231
52-Week high 537.50
52-Week low 294.00
P/E 145.69
Mkt Cap.(Rs cr) 660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 397.00
CLOSE 395.25
VOLUME 231
52-Week high 537.50
52-Week low 294.00
P/E 145.69
Mkt Cap.(Rs cr) 660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

RPG Life Sciences Ltd. (RPGLIFE) - Director Report

Company director report

Your Directors have pleasure in presenting the annual report and audited statement ofaccounts of the Company for the year ended on March 31 2017.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is givenbelow:

(in Crore)
2016-17 2015-16
Total Income 305.00 280.10
Profit before depreciation interest and tax 29.72 24.26
Less: Interest 2.64 2.49
Less: Depreciation 11.78 10.15
Profit for the year before tax 15.30 11.62
Add: Exceptional Item 7.38 -
Profit before tax 22.68 11.62
Less: Provision for tax 2.22 -
(including Deferred Tax)
Profit for the year after tax 20.46 11.62
Appropriations:
Interim Dividend - 2.65
Tax on Interim Dividend - 0.54
Proposed dividend 4.63 -
Tax on proposed dividend 0.94 -

2. DIVIDEND

The Directors recommend a dividend of ` 2.80 (35%) per equity share of ` 8/- each forthe financial year ended

March 31 2017.

3. OPERATIONS

Your Company earned a total income of ` 305 crore for the year as compared to ` 280.10crores during the previous year and a profit after tax of ` 20.46 crore includingexceptional item of ` 7.38 crore on sale of Biotech Unit as against profit after tax of `11.62 crore during the previous year. The profitability of the Company improved due torobust performance of Global Formulations and API divisions.

The Company continues to hold EU GMP WHO GMP and TGA Australia certifications for theAPI facility at Navi Mumbai plant and EUGMP UK MHRA certification for itsFormulationfacility (F2) at Ankleshwar plant.

The Company sold its Biotech Unit located at Ankleshwar to M/s. Intas PharmaceuticalsLimited as a going concern.

Formulations Business:

Performance

During the year under review the Formulations business achieved sales revenue of `184.3 crores with a growth of 10% over the previous year. As per the data compiled byPharmatrac a market researcher the Company has maintained its rank at 66thposition in sales value terms over the previous year. The Company's Nephrocare Divisioncontinues to feature among the top 5 Indian Companies operating in the renal therapysegment. The Company's strategy of focusing on brand building has shown promising outcomeswith Minmin tonic improving its ranking from 12th to 8th rank andMinmin PB and Lomofen+ becoming No. 2 and No. 3 ranked brands in respective therapies.

During the year the Company acquired 7 brands from Sun Pharmaceuticals Limited. TheCompany has during the year set up two new divisions viz. ‘Urolife' catering to theurology therapy and ‘Glodiance‘ division catering to the Cosmetic Derma therapy.

The Acute-care business grew by 15% whereas Nephrocare and Oncology divisions degrew by8% as several products belonging to these divisions came under price control. TheCompany's major brands such as Lomotil Aldactone Naprosyn registered healthy growth inthe year under review whereas Azoran despite price reduction of 15% maintained the samesales value as last year.

Outlook

In the current year the Company will continue its emphasis on Focus brands likeMinminTricaine and leverage the strength of its key brands to fuel growth.Gastrointestinal Pain Management and Nutritionals will drive growth in the Acutetherapies segment the Chronic segment consisting of Oncology and Nephrocare growth wouldhappen through market penetration. The acquired brands like Romilast Sildura and Tamflowould also add to the growth of the formulation division. Brand extensions and new productlaunches in therapies where the Company's core competencies exist in line with therapygaps identified would also be the growth drivers. In addition entry into new therapieslike Urology and Dermatology (cosmetology) will provide avenues for further growth.

Training of field force will continue to remain the cornerstone for improvingproductivity by strengthening product knowledge and selling skills.

Global Generics Business:

Performance

The Global Generics business achieved sales revenue of

` 33.5 crores. The business witnessed a robust growth by 21% over the previous yeardespite a challenging exchange rate scenario in the major currencies viz. GBP USD andEUR. The company has taken steps to focus on increasing the products basket for EU alongwith focus on foraying in other International Markets in Australia and Latin America toincrease the revenue base. The company has received an approval for a contractmanufacturing project in UK which will start contributing to the sales in FY 18.

Outlook

The Global Generics business is likely to grow well during the current financial yeardespite the downward pricing pressure in European Union (EU) – one of its key marketsas well as the pressure on exchange rates of major currencies viz. USD GBP and EUR withrespect to INR. The Company also expects to commercialize a new product in the thirdquarter of FY18 with its license partner in UK. The Company has been able to revive thebusiness with one of its most important partner in UK and shall continue to focus ongrowing this business. The company to perform well in UK with increasing market share andthis market is likely to contribute significantly to the Global Generics business in thenext year.

The company intends to enter into US market through strategic alliances andpartnerships and is already working on the products for this market. The Company hasalready identified Key Focus Areas for this market and has already started discussionswith partners for the commercialization strategies. The Company has worked significantlyon its manufacturing facility to take it through the USFDA inspection process to gain thesubsequent approval.

The Company's presence in the EU will become stronger as market penetration improveswith multiple partners. Addition of new customers and new products in EU as well as othergeographies will be the key growth drivers in the Generics business. The Company isactively scouting of license partnerships for its products in various InternationalMarkets.

Rest of World (RoW) Business: Africa & South East Asia (SEA) constitute the RoWgeographical space for the Company.

Performance:

During the year the RoW business registered a year-on-year growth of 96% with sales of` 31.40 Crore and contributing close to 11% to the overall sales of the Company.

In Africa region the Company emerged as the No.1 Indian pharmaceutical company inMauritius through its Anti-diabetic range while in Egypt Azoran with 70% market shareensured a leading position for the company in the post organ transplant care space. TheKenyan business registered a growth of 40% over the previous year. In SEA regionSiloxogene continued to maintain its leadership position in Myanmar with a market share of

35% in the antacid segment. In Cambodia Vietnam and Philippines the company revivedits business through re-alignment of partners and portfolio's.

Outlook:

Strategically for RoW business Nephrology Oncology and Critical care are thetherapies of core importance however the business will continue to tap opportunistictender procurements across the RoW geography. Additionally in SEA the goal is to attainleadership through Gastrointestinal (GI) care.

In FY 18 Portfolio Enhancement & New Market penetration will be the focus area forthe business. This is expected to be achieved through strategic out-sourcing of productsas well as by foraying into newer geographies such as Nigeria Ethiopia and Sudan.

Also the business will move into the space of Oncology in the existing geographies with100 new registrations along with current leadership in Nephrology and GI therapy shallfuel growth in RoW in FY 18.

Active Pharmaceutical Ingredients (API/Bulk Drugs) Business:

Performance

The API business achieved sales revenue of ` 43.04 crores registering a growth of 20%over the last year.

The traditional markets of Latin America where the Company enjoys a major market sharecontinued to perform well. Quinfamide business in Mexico was on target while sales ofPantoprazole in the domestic market grew by 215% over the previous year. In additionHaloperidol Risperidone and Propantheline sales to EU and emerging markets grew by morethan 40 % over last year.

Outlook

API business has a strategic importance in the overall growth of the company. Thecompany has a backward integration for Azathioprine and Di-phenoxylate. With the marketingapprovals for Nicorandil finished dosage forms in Europe with captive source companyexpects to achieve global leadership in Azathioprine and Nicorandil.

As a key objective to build a strong and sustainable product portfolio the Companyplans to introduce 3 to 5 APIs every year in various key segments. With successful ContactManufacturing Organisations (CMO) partnership in place company plans to penetrate US andEU markets with the emergence of localisation programme across all key markets. Braziland Russia are the key markets for future growth. The global API market which stood at USD143 Bn in 2016 is expected to grow around 7% during 2017 to 2020. This will bring moreopportunities to grow API business in future.

4. EXTRACT OF ANNUAL RETURN

As required under Section 92 of the Companies Act 2013 details forming part of theextract of the Annual Return in form MGT-9 is annexed herewith as Annexure A.

5. MEETINGS OF THE BOARD

The details of Board Meetings held during the year are given in the CorporateGovernance Report.

6. DIRECTOR'S RESPONSIBILITY STATEMENT

The Directors confirm that a) in the preparation of the annual accounts for thefinancial year ended March 31 2017 the applicable accounting standards had been followedand there were no material departures; b) the directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year as at March 31 2017 and of the profit and lossof the Company for that period; c) the directors had taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the directors had prepared the annual accounts on a going concernbasis; e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; f) the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

7. STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declaration from each of the Independent Directors underSection 149 (6) and (7) of the Companies Act 2013 and Regulation 16(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

8. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS ANDDISCLOSURES ON THE REMUNERATION OF THE DIRECTORS

All pecuniary relationship or transactions of the Non-Executive Directors vis--visthe Company along with criteria for such payments and disclosures on the remuneration ofthe Directors along with their shareholding are disclosed in Corporate Governance Reportand Form MGT-9 which forms a part of this report.

9. NOMINATION AND REMUNERATION POLICY

The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a

Director and other matters provided under Section 178 (3) is annexed with this Reportas Annexure B.

10. EXPLANATION AND COMMENTS ON AUDITOR'S AND SECRETARIAL AUDIT REPORT

There is no qualification disclaimer reservation or adverse remark made by theStatutory Auditors in Auditor's Report.

Further there is no qualification disclaimer reservation or adverse remark made bythe Company Secretary in practice in Secretarial Audit Report.

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Loans Guarantees and Investments made by the Company are within the limitsprescribed under the provisions of Section 186 of the Companies Act 2013 and the detailsare given in the notes to the Financial Statements.

12. RELATED PARTY TRANSACTIONS

There were no contracts or arrangements or transactions entered into by the Companywith related parties referred to in sub-section (1) of Section 188 of the Companies Act2013 during the course of business which were not at arm's length basis.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website www.rpglifesciences.com.

13. TRANSFER TO RESERVES

The Company has not transferred any sum to the General

Reserve during the financial year ended March 31 2017.

14. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year on March 31 2017 towhich the financial statements relate and the date of this report.

15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 (3) of Companies (Accounts) Rules 2014 are given in Annexure C tothis report.

16. RISK MANAGEMENT

The details of Risk Management Committee (RMC) and its terms of reference are set outin the Corporate Governance Report.

The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.

The business risk framework defines the risk identification and its management approachacross the enterprise at various levels including documentation and reporting. Theframework helps in identifying risks trends exposure and potential impact analysis atCompany's business.

17. CORPORATE SOCIAL REPONSIBILITY (CSR)

In accordance with the provisions of Section 135 read with Schedule VII of the Act theCompany as a part of its Corporate Social Responsibility ("CSR") initiativehas adopted a CSR Policy outlining various CSR activities to be undertaken by the Companyin the area of health water sanitation promoting education skill development etc. TheCSR policy of the Company is available on the Company's website i.e.www.rpglifesciences.com under ‘Investors' tab. During the year under review theCompany has spent

` 9 Lakh on CSR activities. The Board has constituted a CSR Committee inter alia torecommend on the CSR projects/ programs recommend the amount on each CSR activity and tomonitor such CSR activities being undertaken by the Company. The report on CSR activitiesas required under the Companies (Corporate Social Responsibility Policy) Rules 2014 isset out as Annexure D.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. H. V. Goenka retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting.

At the Board Meeting held on July 27 2016 Mr. Yugal Sikri was appointed as anAdditional Independent Director. Mr. P. K. Mohapatra passed away on March 13 2017. TheBoard placed on record its appreciation for the deliberations made by him at the Board andCommittee meetings.

Mr. Sachin Raole Chief Financial Officer (CFO) and Senior

Vice President – Corporate Services resigned from the services of the Company onJune 30 2016.The Board placed on record its appreciation for the services rendered by Mr.Sachin Raole during his tenure with the Company.

Mr. Mahesh Narayanaswamy was appointed as Vice President – Finance with effectfrom July 1 2016 to discharge the responsibilities and duties of the CFO.

None of the aforesaid Directors and Key Managerial Personnel (KMP) is related to anyother Director of the Company.

Mr. CT. Renganathan Managing Director Mr. Mahesh Narayanaswamy Vice President -Finance and Mr. Rajesh Shirambekar Head – Legal & Company Secretary are KeyManagerial Personnel of the Company within the meaning of Section 203 of the CompaniesAct 2013.

19. SUBSIDIARY COMPANIES

There were no Companies which have become or ceased to be our subsidiaries jointventures or associate companies during the year.

20. FIXED DEPOSITS

Your Company has not accepted any fixed deposit from public during the year underreview under Chapter V of the Companies Act 2013. As on March 31 2017 no depositwas overdue and deposit aggregating to

` 5.40 Lakhs was lying unclaimed with the Company.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS and material orders passed by theTherearenosignificant

Regulators or Courts or Tribunals impacting the going concern status and company'soperations in future.

22. CHANGE IN THE NATURE OF BUSINESS

During the year under review there was no change in the nature of business.

23. INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to theFinancial Statements are stated in Management Discussion and Analysis which forms part ofthis annual report.

24. INFORMATION PURSUANT TO SECTION 197 (12) OF THE COMPANIES ACT 2013 AND RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL REMUNERATION) RULES 2014

1 The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; Mr. H. V. Goenka (Chairman)– 0.76
Mr. C. L. Jain – 0.97
Dr. Lalit S. Konadia – 0.62
Mr. Mahesh Gupta – 0.91
Mr. Manoj Maheshwari – 0.61
Mr. P. K. Mohapatra – 0.72
Mr. Narendra Ambwani – 0.63
Ms. Zahabiya Khorakiwala – 0.47
Mr. Sachin Nandgaonkar – 0.79
Mr. Yugal Sikri – 0.45
Mr. CT. Renganathan
(Managing Director)– 65.08
2 The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Mr. H. V. Goenka (Chairman)– 25%
Mr. C. L. Jain – 31%
Dr. Lalit S. Konadia – 22%
Mr. Mahesh Gupta – 25%
Mr. Manoj Maheshwari – 25%
Mr. P. K. Mohapatra – 23%
Mr. Narendra Ambwani – 37%
Ms. Zahabiya Khorakiwala- 38%
Mr. Sachin Nandgaonkar – 22%
Mr. Yugal Sikri *
Mr. CT. Ranganathan - 10%
Mr. Mahesh Narayanaswamy - 24%
Mr. Rajesh Shirambekar - 12%
3 The percentage increase in the median remuneration of employees in the financial year; 12%**
4 The number of permanent employees on the rolls of Company; 1237 employees as on March 31 2017
5 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; Average Salary increase of non-managerial employees is around 14%.
that the 6 remuneration Affirmation is as per the remuneration policy of the Company. Average Salary increase of managerial employees is around 11%.
There are no exceptional circumstances in increase of managerial remuneration.
Remuneration Paid during the year ended March 31 2017 is as per the Remuneration Policy of the Company.

Notes:

*Mr. Yugal Sikri was appointed on the Board in the financial year 2015-16 and thereforecomparable amount of remuneration was not available for determintation of percentageincrease in the remuneration.

**The percentage increase in the median remuneration of employee has been calculatedafter excluding Managing Director's remuneration.

25. WHISTLE BLOWER POLICY

The Audit Committee's terms of reference inter-alia include vigil mechanism which alsoincorporates a Whistle Blower Policy in terms of Section 177(10) of the Companies Act2013. The Company has adopted Whistle Blower Policy. The Whistle Blower mechanism providesfor Directors and employees to report concerns about unethical behavior actual orsuspected fraud or violation of Company's Code of Governance and Ethics. The WhistleBlower Policy is uploaded on the Company's website www.rpglifesciences.com.

26. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The Company has familiarisation programmes and the details of it have been uploaded onthe website of the Company on the link below:http:/www.rpglifesciences.com/financial_policies.jsp.

27. FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to provisions of Section 134 of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee laid down a criteria for evaluating Board effectiveness byassessing performance of the Board as a whole performance of individual Director andCommittees of the Board namely Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship Committee Corporate Social Responsibility Committee and RiskManagement Committee. The Board approved the criteria laid down by Nomination andRemuneration Committee for evaluating Board effectiveness and engaged a third party agencyto conduct Board effectiveness survey during the year under review.

28. AUDITORS

Statutory Auditors:

At the Seventh Annual General Meeting (AGM) held on September 25 2014 the Members hadappointed M/s. Lovelock & Lewes Chartered Accountants (Firm Registration No.301056E) as Statutory Auditors of the Company for a period of 3 (three) consecutiveyears from the conclusion of the seventh AGM till the conclusion of the tenth AGM. In viewof completion of the prescribed term of M/s. Lovelock & Lewes at the ensuing AGM onthe recommendation of the Audit Committee the Board of

Directors at its meeting held on February 1 2017 appointed M/s. BSR & Co. LLPChartered Accountants (Firm Registration No. 101248W/W-100022) as the Statutory Auditorsof the Company for a period of 5 years from conclusion of the tenth AGM till theconclusion of fifteenth

AGM of the Company subject to approval by Members. Pursuant to the provisions ofSection 139(1) and Section

141 of the Act the Company hasreceived Certificatefrom

M/s. BSR & Co. LLP certifying that if they are appointed as Auditors; theirappointment would be as per the conditions prescribed by the said Sections.

The Board placed on record its sincere appreciation for the valuable services renderedby M/s. Lovelock & Lewes during their long association with the Company.

Internal Auditors:

M/s. Aneja Associates Chartered Accountants are the Internal Auditors of the Company.

Secretarial Auditors:

M/s. Parikh Parekh & Associates Practicing Company Secretaries are theSecretarial Auditors of the Company. The Secretarial Audit Report required pursuant tosub-section (3) of Section 134 and Section 204 (1) of the Companies Act 2013 is given inAnnexure E to this report.

Cost Auditors:

Pursuant to the provisions of Section 148(3) of the Companies Act 2013 M/s. KiritMehta & Co. (Registration No. 000353) Cost Accountants was appointed to conductaudit of cost records of Pharmaceutical Activities for the year ended March 31 2017. CostAudit reports would be submitted to the Central Government within the prescribed time.Pursuant to Rule 6 of the Companies (Cost Records and Audit) Rules 2014 cost auditreports for Pharmaceutical

Activities for the year ended March 31 2016 was filed with the Central Government onAugust 22 2016.

29. EMPLOYEES STOCK OPTION PLAN

The Company has "2005 Employee Stock Option Plan" (ESOP 2005) for grantingperformance based stock option to employees. In the financial year 2016-17 2910 equityshares were allotted under ESOP 2005. The Disclosure in compliance with clause 12 of theSecurities and Exchange

Board of India (Share Based Employee Benefits) Regulations

2014 in this respect are stated in Annexure F to this report.

Disclosures for the financial year ended March 31

2017 regarding ESOP 2005 in terms of Companies (Share Capital and Debentures) Rules2014 are as below:

Particulars ESOP 2005
Options Granted Nil
Options vested 2910
Options exercised 2910
The total no of shares arising as a result of exercise of options 2910
Options lapsed/cancelled during the year Nil
The exercise price ` 104.00
Variation of terms of options No variation in the terms of options during the year under review.
Money realized by exercise of options ` 302640
Total no of options in force Nil
Employee wise details of options granted to:
Key Managerial Personnel (KMP) No new options were granted to KMPs during the year under review
Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year Nil
Identified employees who were granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant Nil

30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The particulars of employees in compliance with the provisions of Section pursuant toSection 134 (3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided to the shareholder uponrequest. The same shall be available for inspection by the shareholder of the

Company at the Registered Office of the Company during business hours on working daysof the Company till the date of Annual General Meeting of the Company.

31. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34(3) read with Schedule V of SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 Management Discussion and Analysis andCorporate Governance Report as approved by the

Board of Directors together certificatefrom a with

Practicing Company Secretary confirming the compliance with the requirements ofCorporate Governance policies are set out in the Annexures forming part of this annualreport.

32. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013.

Internal Complaints Committee has been set up to redress complaints.

The Company has not received any complaint of sexual harassment during the financialyear 2016-17.

33. MATERIAL TRANSACTIONS WITH RELATED PARTIES

The Company has not entered into any transaction with related parties during the yearunder review which requires reporting in Form AOC-2 in terms of Companies Act 2013 readwith Companies (Accounts) Rules 2014.

34. SAFETY

Your company has carried out Safety audit Fire audit and Environment audit throughcompetent authorities at API Navi Mumbai Plant. The Company also organised various safetyawareness programmes to impart safety training to its employees.

35. AWARDS

Your Company has been recognised as Great Place to Work-Certified Company forthe year 2017 through the study conducted by "Great Place to Work" Institutewhich validates the progressive culture of the organization.

36. APPRECIATION

Your Directors record their appreciation of the valuable services rendered by allemployees of the Company their gratitude to the banks for their assistance and to theCompany's shareholders customers and suppliers for their continued support.

For and on behalf of the Board of Directors
Place: Mumbai H.V. Goenka
Date: April 28 2017 Chairman

Form MGT-9

EXTRACT OF ANNUAL RETURN

As on the financial year ended on March 31 2017

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS
i. CIN L24232MH2007PLC169354
ii. Registration Date March 27 2007
iii. Name of the Company RPG Life Sciences Limited
iv. Category/Sub-Category of the Company Company limited by shares
Indian Non-Government Company
v. Address of the Registered office and contact details RPG House 463 Dr. Annie Besant Road Worli Mumbai-400 030
Tel No: 91-22-24981650/66606375 l Fax: +91-22-24970127
E-mail : info@rpglifesciences.com l Web: www.rpglifesciences.com
vi. Whether listed Company Yes
vii. Name Address and Contact details of Registrar and Link Intime India Pvt. Ltd
Transfer Agent if any C 101 247 Park L B S Marg Vikhroli West
Mumbai 400 083. Tel: +91-22-49186000 l Fax: +91-22- 49186060

II. PRINCIPAL BUSINESS ACTIVITES OF THE COMPANY

All the Business activities contributing 10% or more of the total turnover of theCompany shall be stated:-

Sr. No. Name and Description of main products/services NIC Code of the Product/service % to total turnover of the Company
1 Manufacturer of Pharmaceutical preparations 21002 100%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

Sr. No Name and address of the Company CIN/ GLN Holding /Subsidiary /Associate % of shares held Applicable Section
NIL NA NA NA NA

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as Percentage of TotalEquity)

I. Category-wise Share Holding No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change During the year
Category of Shareholders Demat Physical Total % of total Demat Physical Total % of total
Shares Shares
A Promoters
(1) Indian
a. Individual/HUF 859987 - 859987 5.20 977124 - 977124 5.91 0.71
b. Central Govt - - - - - - - - -
c. State Govt - - - - - - - - -
d. Bodies Corp 10183933 - 10183933 61.59 10183934 - 10183934 61.57 (0.02)
e. Banks/FI - - - - - - - - -
f. Any other - - - - - - - - -
Sub- Total (A) (1) 11043920 - 11043920 66.79 11161058 - 11161058 67.48 0.69

 

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change During the year
Demat Physical Total % of total Demat Physical Total % of total
Shares Shares
(2) Foreign
a. NRIs- Individuals - - - - - - - - -
b. Other Individuals - - - - - - - - -
c. Bodies Corp - - - - - - - - -
d. Banks/FI - - - - - - - - -
e. Any Other - - - - - - - - -
Sub Total (A) (2) - - - - - - - - -
Total Shareholding of Promoter 11043920 - 11043920 66.79 11161058 - 11161058 67.48 0.69
(A) = (A)(1) + (A) (2)
B. Public Shareholding
1. Institutions
a. Mutual Funds - 1050 1050 0.01 - 1050 1050 0.01 -
b. Banks/FI 39048 2224 41272 0.25 39169 2224 41393 0.25 -
c. Central Govt - - - - - - - - -
d. State Govts - - - - - - - - -
e. Venture Capital Funds - - - - - - - - -
f. Insurance Companies - - - - - - - - -
g. FIIs - 5500 5500 0.03 7208 5500 12708 0.07 0.04
h. Foreign Venture - - - - - - - - -
Capital Funds
i. Others (specify) - - - - - - - - -
Sub-total (B) (1) 39048 8774 47822 0.29 46377 8774 55151 0.33 0.04
2. Non-Institutions
a. Bodies Corp - - - - - - - - -
i Indian 1254652 3444 1258096 7.61 1256495 3444 1259939 7.62 0.01
ii Overseas - - - - - - - - -
b. Individuals
i Individual shareholders 2605586 406217 3011803 18.21 2657162 391529 3048691 18.43 0.22
holding nominal share capital upto ` 1 lakh ii Individual shareholders 761506 - 761506 4.61 586513 - 586513 3.55 (1.05)
holding nominal share capital in excess of ` 1 lakh
Qualified Foreign - - - - - - - - -
Investor
c. Others (Specify)
i. Clearing Member 114153 - 114153 0.69 136409 - 136409 0.82 0.13
ii. NRI (Repatriable) 81299 360 81659 0.49 73910 360 74270 0.46 (0.03)
iii. NRI (Non-Repatriable) 40092 - 40092 0.24 44912 - 44912 0.27 0.03
iv. Trusts 6000 - 6000 0.04 - - - - (0.04)
v. Hindu Undivided Family 171040 14 171054 1.03 172058 14 172072 1.04 0.01
Sub-Total (B)(2) 5034328 410035 5444363 32.92 4927459 395347 5322806 32.19 (0.73)
Total Public Shareholding 5073376 418809 5492185 33.21 4973836 404121 5377957 32.52 (0.69)
(B)=(B)(1)+ (B) (2)
C Shares held by the - - - - - - - - -
Custodian for GDRs and
ADRs
Grand Total (A+B+C) 16117296 418809 16536105 100.00 16134894 404121 16539015 100

 

II. Shareholding of promoters
Sr. Shareholders Name No.

Shareholding at the Beginning of the year

Shareholding at the end of the year

No. of Shares % of total shares of the Company % of shares Pledged/ encumbered to total share holders No. of Shares % of total shares of the Company % of shares Pledged/ encumbered to total share- holders % Change in share- holding during the year
1 Chattarpati Apartments LLP 126450 0.76 - 5148078 31.13 - 30.36
2 Instant Holdings Limited 2734397 16.54 - 2734397 16.54 - -
3 Summit Securities Limited 1792398 10.84 - 1792398 10.84 - -
4 STEL Holdings Limited 502550 3.04 - 502550 3.04 - -
5 Carniwal Investments Limited 6500 0.04 - 6500 0.04 - -
6 Swallow Associates LLP 5021638 30.37 - 10 - - (30.36)
7 Sudarshan Electronics and TV Ltd - - - 1 - - -
8 Harsh Vardhan Goenka* 824324 4.99 - 941459 5.69 - 0.70
9 Harsh Vardhan Goenka 26913 0.16 - 26913 0.16 - -
10 Mala Goenka 8747 0.05 - 8747 0.05 - -
11 Harsh Vardhan Goenka** 1 - - 1 - - -
12 Harsh Vardhan Goenka*** 1 - - 1 - - -
13 Harsh Vardhan Goenka**** 1 - - 1 - - -
14 Harsh Vardhan Goenka***** - - - 1 0.00 - 0.00
15 Harsh Vardhan Goenka****** - - - 1 0.00 - 0.00
Total 11043920 66.79 - 11161058 67.48 - 0.70

 

* Trustee of Nucleus Life Trust. **Trustee of Crystal India Tech Trust.
*** Trustee of Monitor Portfolio Trust. **** Trustee of Stellar Energy Trust.
***** Trustee of Secura (India) Trust. ****** Trustee of Prism Estates Trust.

 

III. Change in Promoters' Shareholding (please specify if there is no change)
Sr. No.

Shareholding at the beginning of the year

Cumulative shareholding during the year

No. of Shares % of total shares No. of Shares % of total shares
of the Company of the Company

At the beginning of the year

11043920 66.79 11043920 66.79
1

Sudarshan Electronics and TV Ltd

05.04.2016 Market Purchase 1 - 11043921 66.79
2 Harsh Vardhan Goenka*
09.11.2016 Market Purchase 13311 0.08 11057232 66.87
11.11.2016 Market Purchase 4331 0.03 11061563 66.90
15.11.2016 Market Purchase 57032 0.34 11118595 67.23
16.11.2016 Market Purchase 26377 0.16 11144972 67.39
17.11.2016 Market Purchase 13584 0.08 11158556 67.48
21.11.2016 Market Purchase 2500 0.01 11161056 67.48
3 Harsh Vardhan Goenka**
05.04.2016 Market Purchase 1 - 11161057 67.48
4 Harsh Vardhan Goenka***
12.01.2017 Market Purchase 1 - 11161058 67.48
At the End of the year 11161058 67.48 11161058 67.48

** Trustee of Secura (India) Trust. *** Trustee of Prism Estates Trust

Inter se Transfer
Sr. No.

Shareholding at the beginning of the year

Cumulative shareholding during the year

No. of Shares % of total shares No. of Shares % of total shares
of the Company of the Company
1 Swallow Associates LLP
29.03.2017 Inter se transfer 5021628 30.36 - -
2 Chattarpati Apartments LLP
29.03.2017 Inter se transfer - - 5021628 30.36

IV. SHAREHOLDING PATTERN OF TOP TEN SHAREHOLDERS (OTHER THAN DIRECTORS PROMOTERS ANDHOLDERS OF GDRS AND ADRS)

Sr. No. For Each of the Top 10 Shareholders

Shareholding at the beginning of the year

Shareholding at the end of the year

No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company
1 Mentor Capital Limited 345000 2.09 327584 1.98
2 Neville Jijibhoy Mistry 152000 0.92 152000 0.92
3 Paramjeet Singh 139814 0.85 134577 0.81
4 Quest Portfolio Services Pvt Ltd - - 114015 0.69
5 Ajay Relan - - 86843 0.53
6 Deepa Bagla Financial Consultants Pvt. Limited 76681 0.46 76681 0.46
7 Deepa Bagla 94943 0.57 70000 0.42
8 Muskan Arora 66199 0.40 66119 0.40
9 Joindre Capital Services Limited 36250 0.22 65200 0.39
10 Bhupinder Kaur 143103 0.87 31822 0.19

Notes:

1. In case of joint holding the name of first holder has been considered.

2. The shares of the Company are traded on daily basis by the top ten shareholders andhence the date wise increase/decrease in the shareholding is on consolidated basis.

3. The shareholding details are given on the legal ownership and not beneficialownership.

V. SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Sr. For each of the Directors and KMP No.

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company
Shareholding of Directors:
At the beginning of the year
1 H.V. Goenka Chairman 26913 0.16 26913 0.16
2 CT. Renganathan Managing Director - - - -
3 Manoj Maheshwari Director - - 500 -
At the end of the year 26913 0.16 27413 0.17
Shareholding of KMP:
At the Beginning of the year - - - -
1 Mahesh Narayanaswamy – Vice President Finance - - - -
2 Rajesh Shirambekar Company Secretary - - - -
At the end of the year - - - -

Notes:

1. Apart from above no other Director and KMP holds any shares at the beginning and endof the financial year 2016-17 in the

Company.

2. Further apart from above there was no increase/decrease in shareholding of any otherDirector and KMP.

VI. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment (` in Lakhs)

Secured Loans excluding deposits Unsecured loans Deposits Total Indebtedness
Indebtedness at the beginning of the Financial year
i. Principal Amount 2224 34 - 2258
ii. Interest due but not paid - - - -
iii. Interest accrued but not due - - - -
Total (i+ii+iii) 2224 34 - 2258
Change in Indebtedness during the Financial year
Addition
Reduction 244 2027 - 2271
(17) (27) - (44)
Net Changes 227 2000 - 2227
Indebtedness at the end of the Financial year
i. Principal Amount 2451 2034 - 4485
ii. Interest due but not paid - - - -
iii. Interest accrued but not paid - - - -
Total (i +ii +iii) 2451 2034 - 4485

VII. REMUNERATION OF DIRECTORS AND KEY MANEGERIAL PERSONNEL

A. Remuneration to Managing Director Whole- time Directors and/or Manager (Amont in `)
Sr. Particulars of Remuneration Name of Managing
No. Director:
Mr. CT. Renganathan
1 Gross Salary
a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 16218684
b) Value of perquisites u/s 17(2) Income-tax Act 1961 -
c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 -
2 Stock Option -
3 Sweat Equity -
4 Commission -
l As % of profit
l Others specify
5 Other please specify:
l Performance Bonus 4407400
l Retiral Benefits 850500
Total (A) 21476584
Ceiling as per the Act As per Section 197 of
Companies Act 2013

B. Remuneration to other Directors

Name of Director
Sr. No Particulars of Remuneration C.L Jain Dr. Lalit S. Kanodia Mahesh Gupta Manoj Mahesh- wari P.K. Mohapatra Narendra Ambwani Zahabiya Khoraki- wala Yugal Sikri H.V. Goenka Sachin Nandga- onkar ) Total (`
1 2 3 4 5 6 7 8 9 10
1. Independent Directors Fee for attending 320000 205000 299000 150000 238000 208000 155000 150000 - - 1725000
board committee meetings Commission - - - - - - - - - - -
Others please specify - - - - - - - - - - -
Total (1) 320000 205000 299000 150000 238000 208000 155000 150000 - - 1725000
2. Other Non-Executive - - - - - - - - 250000 260000 510000
Directors Fee for attending board committee meetings Commission - - - - - - - - - - -
Others please specify - - - - - - - - - - -
Total (2) - - - - - - - - 250000 260000 510000
Total (B)= (1+2) 320000 205000 299000 150000 238000 208000 155000 150000 250000 260000 2235000
Total Managerial Remuneration 2235000
Overall Ceiling as per the Companies Act 2013 is ` 1 lakh per meeting

C.Remuneration to Key Managerial Personnel other than MD/Manager/WTD (Amount in ` )

Sr. No. Particulars of Remuneration

Key Managerial Personnel

1 Gross Salary Chief Financial Officer (up to June 30 2016) Vice President – Finance (w.e.f. July 1 2016) Company Secretary Total
a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 1771398 2835190 3541736 8148324
b) Value of perquisites u/s 17(2) Income- tax Act 1961 82068 92400 163701 338169
c) Profits in lieu of salary under section - - - -
17(3) Income-tax Act 1961
2 Stock Option

No new stock options granted during the year

-
3 Sweat Equity - - - -
4 Commission - - - -
As % of profit
Others specify
5 Other please specify - - - -
Total (A) 1853466 2927590 3705437 8486493

VIII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

Type Section of the companies Act Brief Description Details of penalty/ punishment/ Compounding fees imposed Authority [RD/ NCLT/COURT] Appeal made if any(give Details)
A. Company
B. Directors
C. Other officers in Default
Penalty/ Punishment/ NIL NIL NIL NIL NIL
Compounding

Annexure ‘B' to the Directors' Report

NOMINATION AND REMUNERATION POLICY

1. Introduction:

This policy on Nomination and Remuneration of Directors Key Managerial Personnel andother employees has been formulated in terms of the provisions of the Companies Act 2013and the Listing Agreement/ SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") in order to pay equitable remunerationto Directors Key Managerial Personnel and other employees of the Company.

2. Objective:

I. Formulate the criteria for determining qualifications positive attributes andindependence for appointment of a Director (Executive/non-executive) and recommend to theBoard a policy relating to the remuneration for the Directors Key Managerial Personneland other employees.

II. To formulate the criteria for performance evaluation of all Directors.

III. Formulate Board diversity policy.

IV. Framing of remuneration policy for employees.

3. Constitution of the Nomination and Remuneration Committee:

The Board has constituted the Nomination and Remuneration Committee (NRC) on April 302014 as per Companies Act 2013.

4. Definitions:

" Act" means the Companies Act 2013 and Rules framed there under asamended from time to time.

"Board" means Board of Directors of the Company. "Company" meansRPG Life Sciences Limited "Directors" means Directors of the Company.

"Independent Director" (ID) means a Director referred to in Section 149(6) of the Companies Act 2013 and Rules made thereunder.

"Key Managerial Personnel" (KMP) means

1) Chief Executive Officer or the Managing Director or the Manager;

2) Whole time Director(s);

3) Chief Financial Officer; and

4) Company Secretary

" Senior Management Personnel" (SMP) means the employees of thecompany who are directly reporting to the

Managing Director/Chief Executive Officer.

Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.

5. Matters to be dealt with and recommended by NRC to the Board

The following matters shall be dealt by the Committee:

a) Directors

Formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommending candidates to the Board when circumstanceswarrants the appointment of a new Director having regard to the variety of skillsexperience and expertise on the Board and who will best complement the Board.

b) Evaluation of performance

Making recommendations to the Board on appropriate criteria for evaluation ofDirectors' performance. Identifying familiarization and training programs for the Board toensure that Non- Executive Directors are provided adequate information regarding theoperations of the business the industry and their duties and legal responsibilities.

c) Board diversity

NRC is to assist the Board in ensuring Board nomination process with diversity ofgender thought experience knowledge and perspective in the Board in accordance with theBoard diversity.

d) Remuneration framework and policies

NRC is responsible for reviewing and making recommendation to the Board on thefollowing: i. The remuneration of MD/CEO and KMPs. ii. Remuneration of Non-executiveDirectors and chairman. iii. Remuneration Policy for all employees including KMPs and SMPswhich requires to take note of need to: a. Attract and motivate talent to accomplishCompany's long term growth plans. b. Demonstrate a clear link between executivecompensation and performance.

e) Company's stock option schemes.

6. Policy for appointment and retirement or removal of Director KMP and SMP:

A. Appointment criteria and qualifications

NRC shall identify person and criteria for the qualification expertise and experienceof the person for appointment as

Director KMP or SMP and recommend to the Board his/her appointment.

B. Term/ Tenure

1. Managing Director/ CEO

Term of appointment or re-appointment of Managing

Director or CEO not to exceed five years at a time. No reappointment shall be madeearlier than one year before the expiry of term.

2. Independent Director

An Independent Director shall hold office on the Board of the Company for a term as maybe determined by the Board but in any case not exceeding five years and shall not holdoffice for more than two consecutive terms.

C. Retirement

The Director KMP and SMP shall retire as per the provisions of the applicable Act andthe prevailing policy of the Company. On the recommendation of the NRC the Board if itconsiders it to be in the Company's interest shall have the discretion to retain theDirector KMP and SMP even after attaining the retirement age.

D. Removal

In case any Director or KMP incurs any disqualification as provided under the Act orRules made thereunder or is in breach of Code of Governance and Ethics adopted by theCompany the NRC may recommend to the Board removal of such Director or KMP.

7. Policy for remuneration to MD/CEO NEDs KMP & SMPs: MD/CEO: i. Theremuneration to the MD/CEO at the time of his/her appointment shall be recommended by theNRC and approved by the Board of Directors and the shareholders of the Company. ii. Annualincrement /subsequent variation in remuneration to the MD/CEO shall be approved by theNRC/Board of Directors within the overall limits approved by the shareholders of theCompany.

NEDs: i. NEDs shall be entitled to sitting fees as may be decided by the Board ofDirectors from time to time for attending the meeting of the Board and sub Committees ofthe Board. ii. Commission as may be recommended by NRC and subsequently approved by theBoard of Directors and wherever required approval of the shareholders of the Company shallbe obtained. iii. The NEDs shall be eligible for remuneration of such professionalservices rendered if in the opinion of the

NRC the NED possesses the requisite qualification for rendering such professionalservices.

KMPs & SMPs: i. The remuneration to the KMPs and SMPs at the time of his/ herappointment shall be recommended by the NRC and approved by the Board considering relevantqualification and experience of the individual as well as the prevailing market condition.The remuneration shall be combination of fixed and variable pay; ii. Annual increment/subsequent variation in remuneration to the KMPs/SMPs shall be approved by the NRC/ Boardof Directors.

8. NRC may consider granting Stock Options to MD/CEO KMPs SMPs and otheremployees pursuant to any Stock Option Plan adopted by the Company.

9. General:

This policy is framed based on the provisions of the Companies Act 2013 and Rulesframed thereunder and the requirements of erstwhile Clause 49 of the Listing Agreementwith Stock Exchanges/ Listing Regulations. In case of any subsequent changes in theprovisions of the Companies Act 2013 or any other Regulations which makes any of theprovisions in the policy inconsistent with the Act or Regulations then the provisions ofthe Act or Regulations would prevail over the policy and the provisions in the policywould be modified in due course to make it consistent with law.

Annexure ‘C' to the Directors' Report

Pursuant to the Rule 8 (3) of the Companies (Accounts) Rules 2014.

A. Conservation of Energy: a.(i) Energy Conservation measures taken during the year:

Energy audit has been conducted through competent authority and suggestedrecommendations are being implemented. Multiple energy conservation measures were takenacross all manufacturing facilities such as strong vigilance employee awarenessminimizing leakages and energy waste. energy conversation measures taken Thesignificantduring the year:

I. Replacement of existing conventional type Light fittings by LED lights in offices& corporate offices in API.

II. Installation of VFD's on root blower motors. III. Installation of Energyconservation devices on Air conditioners.

IV. Installation of Heat Exchanger on vacuum pumps for water circulation tank.

V. Maintaining Power factor unity & getting incentives from power supplyauthorities.

VI. Harmonic audit has been carried out for API plant

& rectified power losses across plant.

VII. Thermal Energy Audit has been carried out & rectified power losses.

(ii) Impact of measures mentioned above for energy conservation and consequent impacton cost of production of goods during the year:

The energy conservation measures undertaken during the year contributed to reduction inthe cost of production by approximately ` 14.00 Lakhs.

(b) Measures taken for utilizing alternate sources of energy:

Company had Pipe Natural Gas connection (PNG) which is being used in emergency. Duringthe year PNG rates were at higher side therefore Company has used Furnace Oil.

(c) Capital investment on energy conservation equipments:

Various energy conservation equipments were added to the production facilities acrossall Plant locations with approximate cost of ` 6.00 lakhs.

B. TECHNOLOGY ABSORPTION:

1. Efforts made towards technology absorption:

Development of solid dosage forms (tablets capsules) for markets of India EU and restof the world. Process excellence projects aimed at meeting current quality requirements.

2. Benefits derived like product improvement cost reduction product development orimport substitution as a result of above: a) A. UK MHRA approval is expected for anantianginal product to initiate commercial supply to EU market. B. Validation batchescompleted for products AntiplateletAnti-diabeticandImmunosuppressant category C. PRtablet formulation of antiepileptic drug is under progress.

D. Technology transfer completed for the site variation project of vaginal pessary.

E. Pilot BE study completed for an enteric coated tablets product of immunosuppressanttherapeutic category and it is under progress for the product indicated in hyponatremia.

F. Product development completed for Immunosuppressant Tablets Capsule formulation fortreatment of Prostatic Hyperplasia Tablets formulation for the treatment of overactivebladder Tablet formulation for the treatment hyperparathyroidism.

G. In case of imported technology:

No new technologies have been imported during the year 2016-2017.

H. Expenditure incurred on Research & Development:

Item (` in Lakhs)
(a) Capital 151
(b) Recurring 1081
(c) Total 1232
(d) Total R & D expenditure as a 4.13%
percentage of total turnover

b) Specific areas in which API-R & D has been carried out by the Company: (i)Process development of Active Pharmaceutical Ingredients (APIs) using non-infringingsynthetic routes for Global Markets.

(ii) Process excellence exercise aimed at optimizing existing commercial processes witha view to improve yield and quality.

(iii) Recovery & recycling of solvents used in several APIs c) Benefits derived asa result of above R & D

The R&D supports two businesses of the company namely International Businesscomprising Active Pharmaceutical Ingredient (API) and Global formulation and DomesticBusiness comprising Domestic Formulation.

API research is focused on developing new products and also on optimizing existingprocesses to make them environmental friendly and cost effective. During the year a non-infringing processes for one Antihyperparathyroid drug & another drug for thetreatment of urinary incontinence were developed which are ready for Plant validation. OneAntihypertensive drug was commercialized at Plant level. Process excellence with oneAntihypertensive two Antipsychotic one Immunosuppressant one Antiulcer & oneAntiamebic drug were established at lab as well as plant scale. Recovery & recyclingof solvents used in one Antipshychotic & one Antiamebic drug were established at Lablevel which are for Plant trials. Parallel to this technology transfer of existing oneImmunosuppressant drug was established in Contract Research Manufacturing Unit at Lablevel. d) Future plan of action At API R&D development work with Plant trial onseveral new products that include cardiovascular Antihyperparathyroid Antidiabetic drugs& one for the treatment of urinary incontinence will be carried out. The processexcellence work for existing processes and recovery and recycling of solvents in theexisting APIs will continue. e) Patent Filing/Grant One US Patent was granted forAntihypertensive drug.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review Foreign Exchange earned in terms of actual inflows was `9455 lakhs and the Foreign Exchange outgo in terms of actual outflow was ` 1770lakhs.

Annexure ‘D' to the Directors' Report

ANNEXURE ‘D' TO DIRECTORS' REPORT

#CSRStart#

ANNUAL REPORT ON CSR ACTIVITIES

FOR FINANCIAL YEAR 2016 – 2017

1.A brief outline of the Company's CSR policy including As part of its initiativesunder Corporate Social Responsibility ("CSR") and overview of projects orprograms proposed to be RPG Life Sciences Limited (RPGLS) vision to drive ‘holisticempowerment' undertaken and a reference to the web-link to the CSR of the community aroundthe local vicinity of our plants and the society at policy and projects or programs largewe have undertaken the following projects through RPG Foundation in accordance with CSRpolicy of the Company read with Schedule VII of the Companies Act 2013.

1. Vision/Eye Care (Project-Netranjali) –RPGLS through the RPG Foundation launched this flagship programme in FY 2016-17 to work towards the cause of preventing avoidable blindness in India. This is a key need in India as India has the world's largest blind population with 80 percent of cases of blindness being preventable with early stage interventions. Two different target groups were covered via this project
– school children elderly and truckers. The project was three stages of eye care intervention module viz. promotive preventive and curative eye health care. In FY 2016-17 over 12000 beneficiaries were covered in total through eye check-up camps and awareness sessions. 3130 beneficiaries were screened with 1216 received free spectacles and 72 referrals provided.
2. Healthcare Sector Skilling (Project Sanjeevani): RPGLS through the RPG Foundation launched this flagship programme in FY 2016-17 to work towards the critical need for trained skilled healthcare professionals. The core aim of the project was to create a genre of dedicated & passionate trained healthcare givers in rural and urban India who will in turn be life givers to the elderly & sick. Increase employability by making available them a Livelihood avenue. In project Sanjeevani 25 candidates being trained in X- Ray and Ultrasound Assistance (DUXA) and Diploma in Medical Lab Technology (DMLT) through 18 months diploma course.
3. The CSR Policy is available at the Company's website and can be accessed at http://www.rpglifesciences.com under policies tab.
2. The Composition of the CSR Committee I. C. L. Jain (Chairman)
II. Narendra Ambwani
III. Z. Khorakiwala
IV. CT. Rengantahan
3. Average net profit of the Company for last three financial years. ` 450 lakhs
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) ` 9 lakhs
5. Details of CSR spent during the financial year
a. Total amount to be spent for the financial year ` 9 Lakhs
b. Amount unspent if any Nil
c. Manner in which the amount spent during the The Company has spent ` 9 lakhs on its CSR activities through RPG
financial year Foundation and the details are annexed with this report.
6. Reason for shortfall in spent if any Not applicable
7. Responsibility statement of CSR Committee We hereby confirm that the implementation and monitoring of the CSR Policy is in compliance with CSR objectives and policies of the Company.

 

CT. Renganathan C.L. Jain
Managing Director Chairman of CSR Committee
(DIN :02158397) (DIN: 00102910)
Place : Mumbai
Date : April 28 2017

Annexure

Details of the CSR activities of the Company for the Financial Year 2016-17:

(` in Lakhs)

(1) (2) (3) (4) (5) (6) (7) (8)
Sr. No CSR Project or Activity Identified Sector in Which the Project is Covered Location of Projects or Programs undertaken Amount Outlay (Budget) Project or Program wise Amount Spent on Projects or Programs Cumulative Expenditure up to the reporting period Amount Spent: Direct or through Implementing Agency.
Local Area or Other District (State) Direct Expense s
Project Vision –
1 5.00 5.00 5.00
Netranjali Eye Care
Navi Thane
Healthcare Mumbai (Maharashtra)
2 Project Sector 4.00 4.00 4.00 RPG Foundation
Sanjeevani Skilling
Total CSR 9.00 9.00 9.00
Spent

#CSREnd#

Annexure ‘E' to the Directors' Report

FORM No. MR-3

#SARStart#

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017 (Pursuant to Section 204 (1)of the Companies Act 2013 and Rule No. 9 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014) To The Members

RPG LIFE SCIENCES LIMITED

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by RPG LIFE SCIENCES LIMITED(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.

Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the company the information provided by thecompany its officers agents and authorised representatives during the conduct ofsecretarial audit the explanations and clarifications given to us and the representationsmade by the Management we hereby report that in our opinion the company has during theaudit period covering the financial year ended on 31st

March 2017 generally complied with the statutory provisions listed hereunder and alsothat the Company has proper Board processes and compliance mechanism in place to theextent in the manner and subject to the reporting made hereinafter: We have examined thebooks papers minute books forms and returns filed and other records made available tous and maintained by the Company for the financial year ended on 31st March2017 according to the provisions of: (i) The Companies Act 2013 (the Act) and the rulesmade thereunder; (ii) The Securities Contract (Regulation) Act 1956 (‘SCRA') and therules made thereunder; (iii) The Depositories Act 1996 and the Regulations and Bye-lawsframed thereunder; (iv) Foreign Exchange Management Act 1999 and the rules andregulations made thereunder to the extent of Foreign Direct Investment Overseas DirectInvestment and External Commercial Borrowings; (v) The following Regulations andGuidelines prescribed under the Securities and Exchange Board of India Act 1992(‘SEBI Act') (a) The Securities and Exchange Board of India (Substantial Acquisitionof Shares and Takeovers) Regulations 2011; (b) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015; (c) The Securities and Exchange Boardof India (Issue of Capital and Disclosure Requirements) Regulations 2009 and amendmentsfrom time to time; (d) The Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase

Scheme) Guidelines 1999 and The Securities and Exchange Board of India ( Share BasedEmployee

Benefits) Regulations 2014;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 ;( Not applicable to the Company during the audit period) (f) TheSecurities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)Regulations 1993 regarding the Companies Act and dealing with client; (Not applicable tothe Company during the audit period) (g) The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations 2009; (Not applicable to the Company during theaudit period) and (h) The Securities and Exchange Board of India (Buyback of Securities)Regulations 1998; (Not applicable to the Company during the audit period)

(vi) Other laws specifically applicable to the Company namely:

1. Drug & Cosmetics Act 1940

2. The Environment (Protection ) Act 1986

3. Manufacture Storage & Impact of Hazardous Chemical Rules 2000

4. The Prevention of Food Adulteration Act 1954

5. Pharmacy Act 1948

6. Drugs and Magic Remedies (Objectionable Advertisement) Act 1954

7. Narcotic Drugs and Psychotropic Substances Act 1985

8. Poisons Act 1919

9. Food Safety and Standards Act 2006 10. The Patents Act 1970 11. The Trade MarksAct 1999

We have also examined compliance with the applicable clauses of the following: (i)Secretarial Standards issued by The Institute of Company Secretaries of India with respectto board and general meetings.

(ii) The Listing Agreements entered into by the Company with BSE Limited and NationalStock Exchange of India Limited read with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines standards etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice was given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Decisions at the Board Meetings were taken unanimously. We further report that thereare adequate systems and processes in the Company commensurate with the size andoperations of the Company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.

We further report that during the audit period no events occurred which had bearing onthe Company's affairs in pursuance of the above referred laws rules regulationsguidelines etc.

For Parikh Parekh & Associates
Company Secretaries
Mitesh Dhabliwala
Place: Mumbai Partner
Date: April 28 2017 FCS: 8331 CP No: 9511

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 Secretarial Audit Report'

To

The Members

RPG LIFE SCIENCES LIMITED

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

1. Maintenance of Secretarial record 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 in

Secretarial 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. Where ever 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 Parikh Parekh & Associates
Company Secretaries
Mitesh Dhabliwala
Place: Mumbai Partner
Date: April 28 2017 FCS: 8331 CP No: 9511

#SAREnd#

Annexure ‘F' to the Directors' Report

THE DISCLOSURES IN COMPLAINCE WITH CLAUSE 12 OF THE SECURITIES AND EXCHANGE BOARD OFINDIA (EMPLOYEES STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES 1999READ WITH CLAUSE 14 SECURITIES AND EXCHANGE BOARD OF INDIA (SHARE BASED EMPLOYEE BENEFITS)REGULATIONS 2014

Sr. Description
No.
1 Name of the Scheme 2005 2005 Employees Stock Option Plan [ESOP 2005]
2 Total number of options to be granted under the plan 250000
3 Options Granted during the year Nil
4 Pricing formula The Nomination and Remuneration Committee decides exercise price for the Stock Options based on the market price ie. the closing price on the Stock Exchange where trading volume is more on the previous day of the Compensation Committee Meeting held for granting of Stock Options. Compensation Committee may determine the Exercise Price at a premium or discount of a maximum of 20% on the market price.
5 Options vested as of 31st March 2017 2910
6 Options exercised during the year 2910
7 Total number of shares arising as a result of exercise of options till 31st March 2017 2910
8 Options lapsed / cancelled during the year Nil
9 Variation of terms of options Nil
10 Money realized by exercise of options during the year. ` 302640
11 Total number of options in force at the end of the year Nil
12 Employee-wise details of Stock Options granted to Senior Managerial Personnel as on 31st March 2017. Nil
13 Employees who were granted options amounting to 5% or more of the options granted during the year. Nil
14 Employees who were granted options in any one year equal to or exceeding 1% of the issued capital of the Company at the time of grant. Nil
15 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS 20) ` 12.37
16 Where the Company has calculated the employee compensation cost using the intrinsic value of the stock options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and EPS of the Company shall also be disclosed. The Company calculates the Employee Compensation Cost using the intrinsic value of the Stock Options. The difference between the Employee Compensation Cost computed as per Intrinsic Value method and Fair Value Method is Nil for the year Fair Value being higher than Intrinsic Value. The impact on Profits and EPS is Nil and Nil respectively.
17 Weighted-average exercise prices and weighted- average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock on the grant date Weighted average exercise price of the options is ` 104.00 Weighted average fair value of the options is ` 41.34.
18 Description of the method and significant assumptions used during the year to estimate the fair values of options: The Company has used the Black Scholes Model for estimating the Fair Value of the options. The Company has applied the following assumptions while computing the fair value:
1. Average risk-free interest rate : 8.08%
2. Average option life: 8 years
3. Average of expected volatility : 47.98%
4. Average expected dividend yield :3.50%
5. Average exercise price: ` 90.70
6. Average share price on the date of option grant: ` 91.33