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Ajanta Pharma Ltd.

BSE: 532331 Sector: Health care
BSE 00:00 | 20 May 1733.35 28.00






NSE 00:00 | 20 May 1734.55 28.05






OPEN 1714.15
52-Week high 2420.00
52-Week low 1593.30
P/E 20.57
Mkt Cap.(Rs cr) 14,803
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1714.15
CLOSE 1705.35
52-Week high 2420.00
52-Week low 1593.30
P/E 20.57
Mkt Cap.(Rs cr) 14,803
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ajanta Pharma Ltd. (AJANTPHARM) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present their Forty-Second Annual Reportand Audited Financial Statements for the Year ended 31 March 2021.


(Rs. in cr. except EPS)

Particulars Standalone Consolidated
Year ended 31 march 2021 2020 2021 2020
Revenue from operations 2719 2196 2890 2588
Other Income 104 184 26 92
Profit before Depreciation Finance Costs and Tax expense 1020 717 1025 776
Profit after Tax 676 441 654 468
Total Comprehensive Income 674 439 647 473
Earning Per Share (EPS) (Rs.) (Basic) 77.59 50.55 75.09 53.60


The company achieved a growth of 12% in Consolidated Revenue fromOperations over the previous year while Consolidated Profit After Tax grew at 40% inspite of the challenges faced due to pandemic. Exports contributed around 71% of thebusiness.

Company continues to be engaged in development manufacture and sale ofgeneric and branded pharmaceutical formulations.


At the Board meeting held on 3 November 2020 the Board had declared aninterim dividend of ' 9.50/- (475%) per equity share in accordance with the DividendPolicy. Total dividend payout was ' 82.90 cr. The Board does not recommend any finaldividend and accordingly recommends interim dividend to be considered as final dividendfor FY 2021. The Dividend Distribution Policy is placed on the website of the Company andits web- link is PolicyCodes/Dividend Policy.pdf


The company continues to have five overseas subsidiaries including onestep down subsidiary. There has been no material change in the nature of business ofsubsidiaries. The Company does not have any Associate company or Joint Venture.

All the subsidiaries except Ajanta Pharma Nigeria Limited havecontributed positively in the growth and profitability of the Company. Financials ofsubsidiaries are included in the consolidated financial statements which forms part ofthis Annual Report. Statement containing salient features of financials of subsidiariespursuant to Section 129 of the Companies Act 2013 ("Act") read with Rule 5 and8(1) of the Companies (Accounts) Rules 2014 is annexed as "Annexure A" to thisReport in the Form AOC-1.

During the year Company's step-down subsidiary Ajanta PharmaMauritius (International) Limited has applied for de-registration as part of reorganisingthe business operations in Mauritius due to rationalisation of tax structure.

Audited Financial Statements of Company's subsidiaries areavailable on Company's website at and the same are available forinspection at the Registered Office of the Company. The same will also be made availableto interested members upon getting request.

Company's "Policy on Material Subsidiaries" can beaccessed at http://www. 5 6


In accordance with the Act and Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Annual Audited Consolidated Financial Statements for the financialyear ended 31 March 2021 together with Report of Auditors' thereon forms part ofthis annual report.

6. share capital

6.1. Buy-back of shares

During the year the Company bought back 735000 (Seven lakhsthirty-five thousand only) fully paid-up equity shares of the face value of Rs.2/- eachrepresenting 0.84% of the total number of equity shares in the subscribed and paid-upequity share capital of the Company from the existing shareholders / beneficial owners ofequity shares of the Company on a proportionate basis through "Tender Offer"route at a price of ' 1850/- (Rupees One thousand eight hundred and fifty only) perequity share for an aggregate amount of ' 135.98 cr. only.

Post Buyback the paid-up share capital has reduced from 87266770 to86531770 equity shares of Rs.2/- each. Shareholding pattern post buyback is given inthe Corporate Governance Report.

6.2. Employee Stock Option Scheme

The Company has Employee Stock Option Scheme 2011 ("ESOS2011") and Ajanta Pharma Share Based Incentive Plan 2019 ("SBIP 2019") thathelps the Company to retain and attract the right talent. The Nomination and RemunerationCommittee ("NRC") administers the ESOP schemes.

During the year 5500 shares were issued against the options exercisedand 3000 new options were granted under the SBIP 2019. Disclosures with regard toEmployees' Stock Options Scheme are put up on the Company's website and can beaccessed at Annual Reports.aspx


7.1. Retirement by rotation

Mr. Madhusudan B. Agrawal & Mr. Rajesh M. Agrawal retires byrotation at the ensuing Annual General Meeting and being eligible have offered themselvesfor re-appointment. Resolution seeking continuation of directorship of Mr. Mannalal B.Agrawal beyond 75 years of age is also submitted for Member's approval. The Boardrecommends their re-appointment/continuation.

7.2. independent Directors

All the Independent Directors have given declarations that theycontinue to meet the criteria of independence as laid down under Section 149(6) of the Actand Rules made there under and under the Listing Regulations. They have registered theirnames in the Independent Directors data-base. They have also affirmed compliance to theConduct for Independent Directors as prescribed in Schedule IV of the Act.

Based on disclosures provided by them none of them are disqualifiedfrom being appointed as Director under Section 164 of the Act and are independent from themanagement.

7.3. Policies on appointment and remuneration of Directors

The Company has laid down "Policy for determining qualificationsof directors" and "Policy for remuneration of Directors" as approved by theNRC of the Board of Directors.

The policies are available at:

• Policy fordetermining qualifications of Directors.pdf

• The Policy for determining qualifications of Directors setsout guiding principles for selection of persons who are qualified to become Directors/Independent Directors.

The objective of the Policy for remuneration of Directors is to ensurethat the level and composition of remuneration is reasonable and sufficient to attractretain and motivate the Directors Key Managerial Personnel ("KMP") and SeniorManagement employees. The same are briefly mentioned in Corporate Governance Report whichforms integral part of this report.

7.4. Key Managerial Personnel

Mr. Yogesh M. Agrawal Managing Director; Mr. Rajesh M. Agrawal JointManaging Director; Mr. Arvind K. Agrawal Chief Financial Officer and Mr. Gaurang ShahCompany Secretary are the KMP of the Company as on the date of this report.

7.5. Board and Directors' evaluation

As per provisions of the Act and Regulation 17(10) of the ListingRegulations the evaluation process for the performance of the Board its committees andindividual Directors was carried in accordance with the manner specified by Board ofDirectors as suggested by the NRC. The evaluation was done in accordance with theframework and criteria laid down by the NRC. Further at a separate meeting theIndependent Directors evaluated performance of Non-Independent Directors Board as a wholeand of the Chairman of the Board.

A consolidated report on performance evaluation was shared with theChairman of the Board for his review and discussion with each Director.

Manner of evaluation of Board of Directors performance and mattersincidental thereto are detailed in the Report on Corporate Governance which forms partof this report.


During the year 4 Board meetings were held through video-conferencingdue to on-going threat of COVID-19 as well as exemptions provided by Ministry of CorporateAffairs and SEBI. Details of the meetings are given in the Report on Corporate Governance.


The Board currently has six committees viz. Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility CommitteeStakeholders Relationship Committee Risk Management Committee and Executive Committee.All the recommendations made by the Committees of Board including the Audit Committee wereaccepted by the Board.

A detailed update on the committees its composition number ofCommittee meetings held and attendance of the directors at each meeting is provided in theReport on Corporate Governance.


All the Related Party transactions ("RPTs") entered intoduring the financial year were on an arm's length basis and in the ordinary course ofbusiness and in accordance with the Company's Policy on Related Party Transactions.

Pursuant to Regulation 23(3) of the Listing Regulations and Rule 6A ofthe Companies (Meetings of Board and its Powers) Rules 2014 the Audit Committee grantedomnibus approval to the transactions likely to be entered into by the Company with relatedparties during the year and are of repetitive nature. The Audit Committee also reviewedall RPTs on quarterly basis. All the RPTs affected during the year are disclosed in thenotes to Financial Statements.

There were no materially significant RPTs which could have potentialconflict with interest of the Company at large.

During the year the Company had not entered into any transactions withrelated parties (save and except transaction with company's subsidiaries) whichcould be considered as material in accordance with the Company's Policy onmateriality of RPT or which is required to be reported in Form AOC-2 in terms of Section134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts)Rules 2014.


During the year Company continued Corporate Social Responsibility("CSR") program through various initiatives in the fields of COVID relatedassistance Education Community Welfare Healthcare and Promoting Sports.

Company contributed significantly for supporting fight against COVID-19by contributing Rs.2 cr. to Prime Minister CARES Fund and donating ventilators thermalthermometers oximeters sanitisers and protective gears to various governmentorganisations and amongst the needy. It also distributed food grains and food packets tomigrant labourers and daily wage earners across different locations as also in slums.Medicines were also provided free of cost to the needy patients. The Company has receivedLetter of Appreciation from the Governor of Maharashtra for the wholehearted support tothe government and citizens in tackling the numerous challenges posed by the COVID-19pandemic situation.

The CSR Committee reviews and monitors the CSR projects and expenditureundertaken by the Company on a regular basis and apprises the Board of the same. CSRpolicy and CSR activities undertaken during the year in accordance with Section 134 &135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy)Amendment Rules 2021 and Rule 9 of the Companies (Accounts) Rules 2014 is annexed tothis report as "Annexure B".


A detailed review of the operations performance and future outlookmajor events occurred during the year as well as state of company's affairs is givenin the Management Discussion and Analysis which forms part of this report.


Report on Corporate Governance together with certificate from thePracticing Company Secretaries regarding compliance of conditions of Report on CorporateGovernance is annexed and forms an integral part of this report.


Business Responsibility Report ("BRR") for FY 2021 formspart of the Annual Report and the same has been hosted on the Company's websitewhich can be accessed at AnnualReports.aspx. Any Memberinterested in obtaining a copy of BRR may write to the Company Secretary.


The Company's bank facilities are rated by Credit Analysis andResearch Limited ("CARE"). They have assigned rating Care A1+ for workingcapital facilities and Care AA for long term borrowings which reaffirms the reputationand trust the Company has earned for its sound financial management and its ability tomeet its financial obligations.


Pursuant to Section 92(3) read with Section 134(3) (a) of the Act theAnnual Return as on 31 March 2021 is available on the Company's website at


17.1.Statutory Auditors

At the 38th Annual General Meeting held on 5 July 2017 theshareholders had approved appointment of B S R & Co. LLP Chartered Accountants (ICAIFirm's Registration No. 101248W/W- 100022) as the Statutory Auditors for a period of5 years commencing from the conclusion of the 38th Annual General Meeting untilthe conclusion of 43rd Annual General Meeting. Auditors have confirmed thatthey hold a valid certificate issued by the Peer Review Board of the ICAI in pursuance ofthe Listing Regulations. The Auditors attend the Annual General meeting of the Company.

Auditor's Report for the year under review forms part of thisannual report. It does not contain any qualifications reservations or adverse remarks.

17.2.internal Auditors

M/s. Ernst & Young LLP conducted internal audit of importantcentralised functions. For other locations viz. factories C&F agents and warehousesother Chartered accounting firms having requisite expertise and resources are appointed asinternal auditors. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.

17.3.Secretarial Auditors

Pursuant to provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A ofthe Listing Regulations Board had appointed M/s. Alwyn D'souza & Co. PracticingCompany Secretaries to undertake the Secretarial Audit of the Company.

Secretarial Audit Report is annexed to this report as "AnnexureC". There are no qualifications or reservations or adverse remarks in the SecretarialAudit Report.

17.4.Cost Auditors

The Company maintains cost accounts and records as per the provisionsof Section 148(1) of the Act and the same are audited by the Cost Auditors. Cost AuditReport for FY 2020 has been filed with the Ministry of Corporate Affairs on 19 August2020.

Board has appointed M/s. Sevekari Khare & Associates PracticingCost Accountants to audit the cost records of the Company for FY 2022. The remuneration issubiect to ratification by shareholders at the ensuing Annual General Meeting.Accordingly resolution seeking members' ratification of their remuneration formspart of the Notice convening the 42nd Annual General Meeting. Board recommendsthe same for approval of members.

During the year under review the statutory auditors internalauditors secretarial auditors and cost auditors have not reported any instances of fraudcommitted in the Company by its officers or employees.


M/s. Alwyn D'Souza & Co. Practicing Company Secretaries haveissued Secretarial Compliance Report for the year ended 31 March 2021 confirmingcompliance of SEBI Regulations/guidelines/circulars issued thereunder and applicable tothe Company. There are no observations or adverse remarks in their reports.


The Company has a well-established internal control framework which isdesigned to continuously assess the adequacy effectiveness and efficiency of financialand operational controls. The Internal Financial Controls ("IFCs") arecommensurate with the scale and complexity of its operations. The controls were testedduring the year and no reportable material weaknesses either in their design or operationswere observed. The current system of IFCs is aligned with the requirement of the Act andis in line with globally accepted risk-based framework as issued by the Committee ofSponsoring Organisations.

The Company also has Risk Management framework in place which definesroles and responsibilities at various levels of the risk management process.

Board has set up Risk Management Committee ("RMC") as perdetails set out in the Report on Corporate Governance. Audit Committee and RMC reviews keyrisk elements of the Company's business finance operations & compliance and itsmitigation strategies. RMC reviews key strategic business compliance and operationalrisks; whereas issues around ethics and fraud internal control over financial reportingprocess risks and their mitigation are reviewed by the Audit Committee. Risk Managementsystem followed by the Company is detailed in the Management Discussion and Analysisreport and in the Notes of Accounts.

20. vigil mechanism / whistle blower policy

Company has zero tolerance policy for any form of unethical behaviour.In accordance with Section 177(9) of the Act Rule 7 of the Companies (Meetings of Boardand its Powers) Rules 2014 and Regulation 22 of the Listing Regulations Company hasformulated vigil mechanism viz. Whistle Blower Policy to encourage the company employeeswho have knowledge of actual or suspected violation malpractices corruption fraud orunethical conduct leak of unpublished price sensitive information. The employees can comeforward and express their legitimate concerns to the Audit Committee Chairman without anyfear of reprimand victimisation or unfair treatment.

It is posted on the intranet and website of your Company and the sameis available at / Admin Data / Policy Codes /WhistleBlowerPolicy2019.pdf

The same is reviewed by the Audit Committee from time to time. Noconcerns or irregularities have been reported by employees/directors till date.


There were 7035 permanent employees of the Company as of 31 March2021. The information pursuant to Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is annexed to this report as "Annexure D".

Information pursuant to Rule 5(2) & 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 also forms part of thisreport pursuant to proviso to Section 136(1) of the Act. Any shareholder interested inobtaining a copy of the same may write to the Company Secretary at the registered officeaddress of the Company.


Details of Loans Guarantees and Investments pursuant to provisions ofSection 186 of the Act & Rules framed thereunder and Schedule V of the ListingRegulations are given in Notes to Financial Statements.

23. directors' responsibility statement

To the best of their knowledge and belief and according to theinformation and explanations obtained by them the Directors confirm:

a. that in the preparation of the annual accounts for the year ended 31March 2021 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;

b. that the directors had selected accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31 March 2021 and of the profit of the Company for the period;

c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the annual accounts / financial statements have been preparedon a going concern basis;

e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

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


Pursuant to Section 134 of the Act read with Companies (Accounts)Rules 2014 Particulars relating to conservation of energy technology absorptionforeign exchange earnings and outgo are given in "Annexure E" to this report.


In pursuance of Regulation 39 read with Schedule VI of the ListingRegulations the details of shares lying in unclaimed suspense account and unclaimedshares / dividend transferred to Investor Education and Protection Fund are provided inthe Report on Corporate Governance.


During FY 2021 the Company has complied with all applicable mandatorySecretarial Standards issued by The Institute of Company Secretaries of India.


Company believes that Human resources are invaluable assets andemployees are pivotal to all the initiatives that drive to realise its plans.

Ajantaites have uncompromising commitment and ensure that despitechallenges medicines manufactured by the Company were available across the world. Companytakes pride in its human capital which comprises people from diverse backgrounds andcultures. The organisation's achievements are an outcome of efforts dedication andconviction demonstrated by its people.

Company maintains highest standards of health and safety in all theplants.


The Company is committed to creating a healthy working environment thatenables employees to work without fear of prejudice and gender bias. Company hasformulated Policy on prevention prohibition and redressal of sexual harassment of womenat workplaces in accordance with The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Company has been imparting training programmes onperiodic basis to familiarise women employees about the policy. Policy is available onintranet of the Company. The policy has set guidelines on the redressal and enquiryprocess that is to be followed by complainants and the Internal Complaints Committees(ICC) whilst dealing with issues related to sexual harassment at the work place.

The Company has set up ICC at all the locations where there are morethan 10 women employees to address the complaints regarding sexual harassment. Companyhas not received any complaints during the year.


No disclosure or reporting is made with respect to the following itemsas there were no such transactions during the year under review:

• Details relating to deposits accepted by the Company;

• The issue of equity shares with differential rights as todividend voting or otherwise;

• Provision of money for the purchase of its own shares byemployees or by trustees for the benefits of employees;

• Remuneration or commission received by Managing Director fromsubsidiaries;

• Revision in the financial statements;

• Change in the nature of company's business;

• Transfer of any amount to reserves during the year under review;

• There were no material changes and commitments affectingfinancial position of the Company between the end of the financial year and the date ofthis report.


Your Directors place on record their sincere appreciation for thecommitment dedication and hard work put in by each and every Ajantaite during the testingtimes. The Directors also wish to express their gratitude to investors for the confidenceand faith that they continued to repose in the Company. They also acknowledge theguidance whole-hearted support encouragement and co-operation received by it fromvarious departments of the Governments & other statutory bodies financialinstitutions banks distributors suppliers business associates analysts medicalprofessionals and customers.