Your Directors have pleasure in presenting herewith the 30thAnnual Report on the business of your Company together with the Audited Accounts for thefinancial year ended 31st March 2017.
| || |
|Financial Year |
|PARTICULARS || |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Operating Revenue ||73764.89 ||78356.24 ||68137.36 ||72216.91 |
|Other Income ||1673.86 ||1800.28 ||1114.11 ||1135.98 |
|Profit before Interest Depreciation & || || || || |
|Tax after exception Item ||19896.49 ||18888.87 ||17316.17 ||16893.69 |
|Interest ||264.52 ||269.41 ||327.19 ||393.30 |
|Depreciation ||2603.17 ||3002.14 ||2119.03 ||2313.88 |
|Net Profit Before Tax ||17028.80 ||15617.32 ||14869.96 ||14185.89 |
|Provision for taxation || || || || |
|a. Current Tax ||3632.26 ||3679.36 ||3035.51 ||3053.99 |
|b. Less: MAT credit entitlement ||(288.20) ||(288.19) ||(501.29) ||(501.30) |
|c. Deferred tax ||1025.68 ||1076.08 ||1049.48 ||1009.21 |
|Profit after Tax ||12659.05 ||11150.07 ||11286.26 ||10623.99 |
|Share of Profit/(Loss) in Associate/Joint Venture ||- ||(513.61) || ||(149.71) |
|Share of Profit (Loss) in Non-Controlling Interest ||- ||268.67 ||- ||(359.94) |
|Other Comprehensive Income/(Expenses) (Net) ||(182.60) ||(182.60) ||19.45 ||19.45 |
|Total Comprehensive income ||12476.46 ||10722.53 ||11305.71 ||10853.66 |
REVIEW OF OPERATIONS:
During the year under review the Company reported gross revenues ofRs.73764.89 lacs as against Rs.68137.36 lacs and Net Profit of Rs. 12659.05 lacs asagainst Rs.11286.26 lacs in the previous year.
Continuous focus of the management on new line of products research& development and strategic expansion of production/ development facilities has beenyielding good results in terms of high margins. Expansion of production facilities is asper schedule. Considering the fast developments in the pharma industry the Company hasstarted focusing on development of new process and new products.
Shilpa Medicare Limited Formulation Research and Development Centre islocated at Vizag.
Formulation research Centre is concentrated in developing genericequivalents to reference listed drugs for Global Markets like USA Europe and RoW forinjectable and oral formulations used for the treatment of cancer and other indicationslike Multiple sclerosis liver diseases HIV etc.
The research centre also concentrates in the development of newformulations leading to reduced costing and enhanced stability of the drug products. Alsothe R&D works on converting the existing Lyophilized products to Ready to Use (RTU's)liquid. Also R&D concentrates on development of ready to fill powders for injectableadministrations.
The oral department of R&D is concentrated in developing thegeneric equivalents for Global Markets. The R&D team is concentrated in developing theproducts as Para IV and 505 ((b)2). R&D is concentrated in working on products toreduce drug product administrations for Geriatric patients.
Highlights FY 16-17:
3 In FY 16-17 Shilpa successfully launched the generic versions ofVidaza Injection & Xeloda Tablets.
3 In FY 16-17 Shilpa filed one ANDA with paragraph IV certification asFirst to File (FTF)
SHILPA MEDICARE API FACILITIES
Shilpa Medicare having two API facilities in Raichur maintainingcontinuous GMP Compliance USFDA EU
Korean Cofepris Canadian PMDA Japan TGA Australia etc. approvedfacilities.
We have six API blocks in unit I and ten in unit II (EOU) at Raichur.We produce both Oncology and non-Oncology products and handle the Cytotoxic products in ahighly prcised isolators without affecting and taking care of persons and environment.
Accelerating access to affordable and innovative medicines is at thecore of our work at Shilpa Medicare. The belief that Good Health needs of patients aroundthe world and do all that it takes to fulfill them. Even as our medicines ensure goodhealth for millions of people around the world every day we are aware that there aremillions more in different countries for which high quality affordable medicinescontinue to be out of reach. Developing products where affordable alternatives exists ordon't exist working with all stakeholders in the healthcare systems across differentcountries to enable market access manufacturing medicines of the highest quality in fulladherence to the best global manufacturing practices and ensuring their availability atall times through a robust efficient and seamless supply chain.
Till now company enjoyed a sound business in providing affordable APIsto country and worldwide.
The technology involving complex chemistry and tough purificationprocedures to manufacture certain necessary drug substances for injectable and OSDproducts were transferred. Chemical processes were developed for quite a number ofcomplicated drug substances taking them to production stage on a commercial scale.
Every employee has been made aware that being safe and taking care ofourselves and each other are our highest priority. Our aim is to protect our employeesagainst work related hazards. Employees in the manufacturing function are being trained tobecome safety champions. They are being trained to take ownership of production blocks.
Shilpa Medicare- Finished Dosage Formulation Facility
Shilpa Medicare Limited - Finished Dosage Formulation Facility is aWorld Class GMP compliant Facility engaged in manufacturing of potent drugs. The facilityis designed for handling of potent Drug Products (including Oncology products) for variousregulatory markets in a highly contained manner. All types of OEL category (Type-1 to 4)can be handled in the facility.
The facility is approved by various regulatory agencies including
USFDA EUGMP ANVISA & COFEPRIS. This facility consists of OralSolid Block with two commercial scale tablet manufacturing and one commercial scalecapsule manufacturing line approved by USFDA. Three Separate Injectable blocks consists oftwo liquid-lyophilization commercial scale manufacturing lines approved by USFDA and 3rdInjectable combi-line for handling of liquid lyophilized and Dry Powder Injectable undercommissioning.
4 No's of oral solid dosage and 7 no's of injectable products have beentaken the exhibit batches during 2016-17.
SHILPA MEDICARE LIMITED INTELLECTUAL PROPERTY MANAGEMENT (IPM) TEAM
Shilpa's success depends on the Company's ability in future to obtainpatents protect the proprietary information and operate without infringing on theintellectual property rights of other pharma companies. Shilpa's inability to obtaintimely ANDA approval thus missing out on early launch opportunities and litigationoutcomes could affect product launch date.
Shilpa Medicare Limited Intellectual Property Management (IPM) team isresponsible for building Shilpa's global generic product pipeline as well as creatingmanaging and protecting its high value patent estate. Shilpa has a dedicated IPM Teamwhich provides stage wise IP-clearances during product/process development activities andalso provides frequent updates and alerts on relevant IP (patent trademark etc) toR&D scientists for products/process and suggests remedial measures to deal with IPissues. Shilpa IPM team is involved in product selection activity to ensure that rightproducts are selected for development.
Shilpa's IPM team continues to build its future pipeline of complexproducts with established robust portfolio selection process providing early launchcapabilities along with intellectual property advantages.
Shilpa's strengths across various molecules including oral andInjectables lie in developing intellectual property in non-infringing processes andresolving complex chemistry challenges. In this process Shilpa develops dosageformulations and applies new technologies for better processes. The API Processdevelopment is focused for developing and transferring commercially viable non-infringingand patentable novel API technologies. The development grid selection for API's is baseddifficult-to-make API molecules and novel polymorphic forms of certain API's for creatingvalue addition.
Shilpa's IPM Team is involved in filing of the patent applications ofnewer processes/newer products in India US & EU.
Highlights FY 16-17:
During the year FY 16-17 Shilpa has settled one of its ANDApending litigation on generic version of Gleevec Tablets.
In FY 16-17 Shilpa has filed 24 patent applications taking thecumulative total to 213 patent applications in India and other countries. Shilpa receivedgrants for 5 patents.
Shilpa has plans for filing 3 ANDA with paragraph IVcertification with US FDA out of which two could be first-to-file ANDA's.
REGULATORY FILINGS (API RAICHUR UNIT-1 & UNIT-2)
1 (one) (Pirfenidone)- and is with CA status available.
4 (Four) - (Azacitidine Fingolimod Hydrochloride Capecitabine andTemozolomide) DMFs approved in support of ANDA reviews.
2 (Two) (Pirfenidone and Temozolomide) Filed.
4 (Four) CEPs granted (Pirfenidone Temozolomide Imatinib mesylate andCapecitabine)
Europe DMFs approvals :
3 (Three) DMFs Bortezomib Imatinib Mesylate Gemcitabine HCl wereapproved / in support of dossiers filed by different MAHs.
Regulatory Approvals: USFDA.
During the year under review the Company has received EIR from USFDAfor the inspection conducted during the period of December 2016 for both APImanufacturing sites located at Raichur Karnataka i.e. Unit-1: Deosugur Industrial AreaDeosugur Raichur Karnataka India and Unit-2: Raichur Industrial Growth CentreChicksugur Raichur Karnataka India.
REGULATORY FILINGS (UNIT-IV-Jadcherla) (Formulation)
Dimethyl Fumarate DR Capsules 120 mg & 240 mg -ANDA#210291
US ANDA's Approvals
Azacitidine for Injection 100 mg/vial - ANDA#207518 (29th Sep2016)
Capecitabine Tablets USP 150 mg & 500 mg-ANDA#207456 (12thDec 2016)
Several ANDA under filing/filed.
Imatinib 100 mg Film Coated Tablets
Imatinib 400 mg Film Coated Tablets
Bortezomib Koanaa 3.5 mg Powder for Solution for Injection
Several MA under filing/filed.
Regulatory Approvals: USFDA
During the assessment year FDF site was inspected by FDA and the EIRreceived with zero 483 on December 2016.
CHANGE IN NATURE OF BUSINESS:
During the year under review there is no change in the nature ofbusiness carried out by your Company.
During the financial year under review your Company declared and paidan interim dividend of Re. 0.60 per share and the Directors recommended the same asdividend for the F.Y 2016-17 keeping in view the fund requirements for the on-goingexpansion plans. An amount of Rs.57863315/- (Rupees Five Crore Seventy Eight Lakh SixtyThree Thousand Three Hundred and Fifteen only) inclusive of dividend distribution tax wasabsorbed towards the dividend for the F.Y 2016-17.
TRANSFER TO RESERVES:
We propose to transfer Rs. 500.00 Lacs to the general reserve. Anamount of Rs. 11397.82 Lacs is proposed to be retained in the surplus account.
INFUSION OF CAPITAL:
During the year under review as part of mobilization of resources forthe purpose of expanding the operations of the Company fresh funds were raised byallotting 3025000 (Thirty Lakh Twenty Five Thousand) equity shares of Re.1/- (Rupee One)each to TA FII Investors Limited at a premium of Rs.569/- (Rupees Five Hundred and SixtyNine) each on 26th December 2016 on preferential basis.
STATUS OF MERGER OF M/s. NAVYA BIOLOGICALS PRIVATE LIMITED WITH THECOMPANY:
Pursuant to the enforcement of Section 230 - 240 of the Companies Act2013 the merger application filed by the Company before the Hon'ble High Court ofJudicature of Karnataka was transferred to National Company Law Tribunal (NCLT)Bengaluru Bench. NCLT directed the Company to seek the approval of the equity shareholderson the proposed scheme and dispensed with the meeting of the Creditors as Creditorssubmitted their No-objection to the proposed scheme. Notice of the Court Convened meetingwas sent to all the shareholders of the Company who were holding shares as on the recorddate fixed and they had an option to vote on the proposed scheme through postalballot/e-voting/by way of physically participating in the meeting. The Court convenedmeeting of the equity shareholders was held on 29th April 2017 whereinmajority of the equity shareholders present and those who participated through postalballot and e-voting have consented to the proposed scheme.
Subsequent to obtaining approval of the equity shareholders theCompany has filed a Petition before NCLT to sanction the proposed scheme. The petitionfiled is pending for consideration of the Tribunal.
DIRECTORS OR KEY MANAGERIAL PERSONNEL
Ms. Namrata Bhutada (DIN No.05133614) Director will retire by rotationat the ensuing Annual General Meeting and being eligible offers herself forre-appointment.
During the year Mr. Naresh Patwari (DIN No.03319397) had been co-optedas Additional Director w.e.f 26th December
2016 as a Nominee of TA FII Investors Limited. Notice in writing underSection 160 of the Companies Act 2013 proposing his candidature for the office ofDirector of the Company has been received and the board has proposed to co-opt him asDirector of the Company whose period of office shall be determinable by retirement ofDirector by rotation subject to the recommendation of the Nomination and RemunerationCommittee.
During the period under review the Company Secretary Mrs. SujaniVasireddi has resigned from the services w.e.f 01-09-2016 and Mr. Madhusudhan Reddy hasbeen appointed as Company Secretary of the Company w.e.f 26-12-2016.
During the period under review Chief Financial Officer (CFO) Mr.Nihalchand Bhandari has resigned from the services w.e.f 26-08-2016 and Mr. Rajendra Dugarhas been appointed as CFO w.e.f 25-11-2016.
STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDERSUBSECTION (6) OF SECTION 149:
The Independent Directors have submitted the declaration ofindependence as required under Section 149(7) of the Companies Act 2013 stating thatthey meet the criteria of independence as provided in Section 149(6) and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As per the provisions of Section 139(2)(b) of the Companies Act 2013the term of M/s. Bohara Bhandari Bung and Associates LLP Chartered Accountants hasexpired. Basing on the recommendation of the Audit Committee the Board has proposed toappoint M/s. Brahmayya & Co Chartered Accountants Registration No. 000513S asStatutory Auditors of the Company to hold office from the conclusion of the ensuing AnnualGeneral Meeting till the conclusion of the 35th Annual General Meeting subject toratification by the members at every Annual General Meeting. In terms of the first provisoto Section 139 of the Companies Act 2013 the appointment of the auditor shall be placedfor ratification at every subsequent Annual General Meeting. In this regard the Companyhas received a certificate from the auditors to the effect that if they are appointed itwould be in accordance with the provisions of Section 141 of the Companies Act 2013 readwith Rule 4 of Companies (Audit & Auditors) Rules 2014.
The Board has appointed M/s. V.J. Talati & Co. Cost Accountantsfor conducting the audit of cost records of the Company for various segments for thefinancial year 2017-18 as recommended by the Audit Committee. As required under Section148 and Rule 14 of the Companies (Audit and Auditors) Rules 2014 a resolution is beingplaced at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.
M/s. P.S. Rao & Associates Practicing Company Secretaries wereappointed to conduct the Secretarial Audit of the Company for the financial year 2016-17as required under Section 204 of the Companies Act 2013 and Rule 9 there-under. TheSecretarial Audit Report for Financial Year 2016-17 forms part of this Report as Annexure- 9.
The Board has appointed M/s P.S. Rao & Associates PracticingCompany Secretaries as Secretarial Auditors of the Company for the financial year2017-18.
COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSEREMARK OR DISCLAIMERS:
As there is no qualification reservation or adverse remark in thereports made by the Auditors your directors need not give their comments on that.
However with regard to the qualification raised by the SecretarialAuditor with regard to not spending the CSR amount for the year 2016-17 your Companystates that the entire amount has been transferred to Shilpa Foundation a Trust formed bythe Company to carry on the CSR Activities.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO:
Information required under section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure- 8.
RISK MANAGEMENT POLICY:
Pursuant to Regulation 21 (4) of SEBI (LODR) Regulations 2015 theCompany has formulated a policy on the Risk Management. The Risk Management Policy of theCompany is posted on the Company's website:www.vbshilpa.com. The Board formulated andimplemented Risk Management Policy for the Company which identifies various elements ofrisks which in its opinion may threaten the existence of the Company and measures tocontain and mitigate risks. Major risk to the Company apart from the general businessrisks related to pharmaceutical industry is supplies from low cost countries like Chinaand other unregulated suppliers.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of Section 129 (3) of the CompaniesAct 2013 the Consolidated Indian Financial Statements drawn up in accordance with theapplicable Indian Accounting Standards forms part of this Annual Report. A separatestatement containing the salient features of the financial statements of SubsidiariesAssociates and Joint Ventures in Form AOC-1 is annexed herewith as Annexure - 5.
Further the annual accounts of all the subsidiary companies shall beposted on Company's website - www.vbshilpa.com.
Annual accounts of the Subsidiary Companies and related detailedinformation will be available for inspection by the members at the registered office ofthe Company and will also be made available to the members upon request.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIALSTATEMENTS:
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations.
Various Audit Systems in the Company monitor and evaluates the efficacyand adequacy of internal control system in the Company its compliance with operatingsystems accounting procedures and policies at all locations of the Company. Based on theaudit reports the units undertake corrective action in their respective areas andstrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board periodically.
The Board of Directors of the Company have adopted various policieslike Related Party Transactions policy Whistle Blower Policy Policy to determinematerial subsidiaries and such other procedures for ensuring the orderly and efficientconduct of its business for safeguarding its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
SUBSIDIARIES & ASSOCIATES & JOINT VENTURES
RAICHEM MEDICARE PRIVATE LIMITED (100% EOU)
Raichem Medicare Pvt Ltd is a 100% export oriented unit and jointventure of SHILPA MEDICARE LTD with ICE SPA and PCA SPA Italy which is located at RaichurIndustrial Growth Centre Raichur in the state of Karnataka. During the year 2016-17Raichem completed all the validation activities and started commercial production and itsproducts are exported. Also Raichem has been approved as qualified supplier for ICE SPAand PCA SPA. Raichem site has also registered with PMDA Japan and the approval process isunder progress. After approval Raichem will produce for Japanese market and supply throughICE SPA by adhering to CGMP and stringent quality parameters. Raichem also set upfull-fledged R & D lab and analytical development lab for supporting production andalso to develop new molecules of bile derivatives. Raichem has established its qualitypolicy EHS policy and has initiated training programs for safety and also employee wellfare measures are implemented.
INM TECHNOLOGIES PRIVATE LIMITED
Innovative Nano & Micro Technologies Private Limited Incorporatedin the FY 2014-2015 a subsidiary of Shilpa Medicare Ltd Raichur. Company has a vision toserve the humanity using Nano technology products. Company drives with Strategic intent"Innovations for All Generations". INM Technologies profile mainly contains:High-tech know-how competencies and expertise to meet industrial needs and strengthenindustrial competitiveness in Asia Europe and USA. Expertise in the field of theMaterials Engineering /
Pharmaceutical Technology and service in advanced technology andproduct development. Scale up process for the developed micro / nanomaterials. Based onour research activity and our experience in the chemistry materials science andengineering pharmaceutical technology sectors we develop and integrate nanostructuredmaterials in the products of our customers of various industrial sectors. State of the artfacility for synthesis characterization and analytical testing of Nano products trainedmanpower for process design & monitoring has been established and includes 9departments in the company involving major disciplines namely Biotechnology Bio-MedicalAnalytical and Pharmaceutical Chemical Polymer Coatings Electronics and Smartmaterials. INM Technologies has initiated the process to obtain ISO 9001 certificationfrom prestigious TUV Group. After completion of 3 years of establishment i.e. by 2018January INM Technologies will apply for DSIR certification.
SHILPA THERAPEUTICS PRIVATE LIMITED
(FORMERLY NU THERAPEUTICS PRIVATE LIMITED)
Shilpa Therapeutics Pvt. Ltd. (formerly NU Therapeutics Pvt. Ltd.)situated at Cherlapally IDA Phase-III Hyderabad India a progressive novel drugdelivery company with an international outlook is dedicated to the development andcommercialization of innovative and patient compliant novel drug delivery systems such asfast disintegrating oral strips.
Shilpa Therapeutics Pvt. Ltd. (formerly NU Therapeutics Pvt. Ltd.) isthe first company to commercialize prescription products as oral thin strips/films inIndia.
Strong technical expertise to develop thin strips/films fororal/sub-lingual/buccal delivery
As a result of continued efforts in the research and productdevelopment Shilpa Therapeutics had developed the most sought after novel drug deliverydosage form- orally disintegrating strip/film and obtained the manufacturing and marketinglicenses for this dosage form in India and abroad.
The orally disintegrating formulation resembling a postage stamp insize and shape is a taste masked fast dissolving convenient and potentially effectivedosage form.
Vertically integrated GMP facility from Research to Commercialization
Shilpa Therapeutics facility is capable of meeting the regularcommercial supply demand from manufacturing to secondary packing with its compliance tomeet the latest Schedule 'M' cGMP/WHO GMP compliant systems procedures and practices.
Products available in the Domestic Market
Shilpa Therapeutics had obtained manufacturing and marketing licensefrom the Drugs Control General (India) New Delhi for the following products and theseproducts have also been launched in India by well established national pharmaceuticalcompanies.
|Molecule ||Category |
|Ondansetron Hydrochloride 2mg 4mg & 8mg Orally ||For the prevention of chemotherapy induced nausea and |
|Disintegrating Strips ||vomiting (CINV) |
|Simethicone 62.5mg Orally Disintegrating Strips ||Anti-Flatulent. |
|Sildenafil Citrate 25mg & 50mg Orally Disintegrating Strips ||For the treatment of erectile dysfunction (ED) |
|Tadalafil 20mg & 10mg Orally Disintegrating Strips ||For the treatment of erectile dysfunction (ED) |
|Methylcobalamin 1500mcg ODS ||Treatment of various neuropathic conditions and |
| ||vitamin deficiency |
KOANAA HEALTHCARE GmbH
Koanaa Healthcare GmbH was incorporated in July 2016 as 100% subsidiaryof Shilpa Medicare Limited and Dr. Walter Erber took over the responsibility asCEO/Managing director. He is initiating developing and guiding Koanaa Healthcare GmbH asa Start-Up company to a pharmaceutical company which is distributing and selling Shilpasoncological portfolio in Europe.
Koanaa Healthcare GmbH is being managed by a well experienced group ofleaders who share the passion and dreams of Koanaa Healthcare GmbH vision of"Innovating for Affordable Healthcare". With their vast expertise in diversesector of pharma business our team brings on board their care creativity enthusiasm andcommitment of achieving 'Affordable Healthcare' for everyone. Our team is dedicated forcreating value to our customers shareholders partners and providing care for employeesat all levels in the organization. Koanaa Healthcare GmbH will be positioned as"European Player" with Austrian basis with low prices and high service in thefield of oncology with the brand "Austrian Quality". The products will provehighest standards and quality and Koanaa Healthcare GmbH will stand for Deliverability andService for Patients and Physicians.
In terms of geographical presence we are starting in Austria(Fischamend) near Vienna and in Germany (Subsidiary office Medical Park Hanover) with owncommercial teams in other territories like Northern Europe CEE and Benelux and SouthEurope we are seeking for partnerships with other pharmaceutical companies.
As a very first step Koanaa Healthcare GmbH got the approval from theAGES inspection (Austrian pharmaceutical authority) in December 2016 as a wholesaler withthe official right to provide pharmaceutical products including Formulation & FillingPackaging Product Release Storage and Transport. Koanaa Healthcare GmbH got subsequentlyon the 18 January 2017 the pharmaceutical trade certificate and went "online"with selling the first oncology products in Europe. Imatinib was the first product whichwas launched in the Germany and Austria in April/May 2017. After pricing- andreimbursement and commercial activities first sales came already shortly after launch andwill proceed within the next months especially under the light that in Austria finallyreimbursement is achieved for September 2017.
With an appropriate regulatory strategy step by step more oncologicalproducts will be part of Koanaa Healthcare GmbHs portfolio.
The vision of Koanaa Healthcare GmbH is to develop as a successful andreliable partner within the pharmaceutical domain.
LOBA FINECHEMIE GmbH
Dr. Walter Erber took over the responsibility as CEO/Managing Directorfor LOBA Feinchemie GmbH from May 2016 and is leading and guiding and developing thecompany. With the strategic vision to achieve sales of 10 million Euro within the next 5years and euphoric and challenging strategic goal is set for Loba Feinchemie GmbH
Main strategy of Loba Feinchemie GmbH is to enhance the focus in termsof resources on business development and Sales & Marketing within the next businessyears to support sales-and profit growth.
In the years 2017/2018 and onwards the sales will further develop andallow Loba Feinchemie GmbH to proceed with the expansion strategy in terms of productionand in terms of human resources.
Reva Pharmachem (P) Ltd
The company is focused and specialised in API business with operationsin Regulated and Emerging markets. The core markets are; Japan Korea Vietnam Italy& Greece. The customer base has increased across markets but Japan & Korea are thefront runners. We have secured foothold with the largest Oncology "Generic" Coof Japan which controls over 70% of the market. We are hopeful that in next 6 months wewill have 2 products registered in Japan besides more in pipeline.
Reva Medicare Private Ltd
Reva Medicare is a joint venture between Shilpa Medicare Ltd and AkiraPharma (P) Ltd.
The core focus expertise of the organization is to build Drug ProductBusiness in Emerging Markets. The company has already executed agreements with key genericmanufacturers who will supply their products exclusively through Reva to the consumptionmarket. The license to the export market will be held by Reva.
MAIA Pharmaceuticals Inc. ("MAIA"):
MAIA is a company based in USAthat engages in the researchdevelopment and commercialization of pharmaceutical products. The Company has made aninvestment into MAIA Pharmaceuticals Inc. in 2013 and 2014 respectively. MAIA has 2products commercially approved in the US and Canadian markets with an expectation of anincreasing number of products commercialized in 2018-2019.
MAKINDUS INC USA
Makindus is a specialty pharmaceutical development company focused onophthalmology and rare diseases. Makindus' lead asset is MI-100 a novel ophthalmicformulation of a legacy compound being developed for Stargardt disease a rare form ofjuvenile macular degeneration. The estimated prevalence in the U.S. and Europe isapproximately 1 in 10000 individuals. There is currently no cure or treatments.
Makindus has been granted orphan drug designation for MI-100 for thetreatment of Stargardt Disease in both the United States and Europe. The Company willbenefit from a number of incentives related to orphan drug designation including marketexclusivity in the US for 7 years and 10 years in Europe.
No business has done in current year (16-H). Hence we have provided the50% diminution in the value of investments. We will see the progress in next one or twoyears and take a call for future provisions.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
A report on CSR Activities as required under Rule 9 of the Companies(Corporate Social Responsibility) Rules 2014 is enclosed herewith as Annexure - 4. CSRPolicy of the Company and other details as required is placed on the Company's website athttp://vbshilpa.com/CSRPolicy.pdf.
NOMINATION AND REMUENRATION POLICY
A committee of the Board named as "Nomination and RemunerationCommittee" has been constituted to comply with the provisions of section 178Schedule IV of the Companies Act and Regulation 19 of SEBI (LODR) Regulations 2015. Ithas been entrusted with the task to recommend a policy of the Company on Directors'appointment and remuneration including criteria for determining qualifications positiveattributes independence of a Director and other matters and to frame proper systems foridentification appointment of Directors & KMPs Payment of Remuneration to them andEvaluation of their performance and to recommend the same to the Board from time to time.
Nomination and Remuneration Policy of the Company is placed on theCompany's website at http://vbshilpa.com/pdf/ NominationRemunerationPolicy.pdf.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE ANDOF ITS COMMITTEES AND INDIVIDUAL DIRECTORS.
As required under the provisions of Schedule IV of the Companies Act2013 the performance evaluation of Independent Directors has been done by the entire Boardof Directors excluding the director being evaluated. The evaluation of all the Directorsand the Board as a whole was conducted based on the criteria and framework adopted by theBoard. The Board approved the evaluation results as collated by the Nomination andRemuneration Committee.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 your Directors'confirm that:
i. In preparation of annual accounts for the financial year ended31st March 2017 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;
ii. The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31st March 2017 and of the profit and loss of the Company for theyear;
iii. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;
iv. The Directors had prepared the annual accounts on a 'going concern'basis;
v. The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
vi. The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in FormMGT-9 is annexed herewith as Annexure -
1. OTHER DISCLOSURES: Board Meetings
During the year under review 8 (Eight) Board Meetings were held duringthe year. For further details please refer Corporate Governance Report which forms partof this Annual Report.
Committees of Board
Your company has the following committees namely: 1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee and
4. Corporate Social Responsibility Committee
The constitutions of all the committees are as per the Companies Act2013 and SEBI (LODR) Regulations 2015. The details of the Constitution are mentioned inCorporate Governance Report which forms part of this Annual Report.
Corporate Governance Report
Regulation 15 of SEBI (LODR) Regulations 2015 is applicable to yourCompany as such the details as specified in Schedule
V(C) of SEBI (LODR) Regulations 2015 with regard to
Corporate Governance Report including Auditor's Certificate oncompliance with the code of Corporate Governance specified in Schedule V(E) of SEBI (LODR)Regulations 2015 forms part of the Annual report.
Management Discussion and Analysis
The Management discussion and analysis Report for the year under reviewas stipulated under Regulation 34 SEBI (LODR) regulations 2015 is annexed here to andforms part of Annual Report.
In pursuant to the provisions of section 117(9) & (10) of theCompanies Act 2013 and Regulation 22 of SEBI (LODR) Regulations 2015 a Vigil Mechanismfor Directors and employees to report genuine concerns has been established. Protecteddisclosures can be made by a whistle blower through to the Chairman of the AuditCommittee. The Policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website at the link:
Remuneration ratio of the Directors/ Key Managerial Personnel/Employees:
Statement showing disclosures pertaining to remuneration and otherdetails as required under Section 197(12) of the Companies Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosedherewith as Annexure - 2.
Particulars of Employees:
Statement of employees employed throughout the financial year and inreceipt of remuneration of Rs. 10200000/- (Rupees One Crores Two Lakh) or more oremployed for part of the year and in receipt of Rs. 850000/- (Rupees Eight Lakh FiftyThousand) or more a month under Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is enclosed as Annexure - 3 to the Board's report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of the Loans guarantees and investments covered under Section186 of the Companies Act 2013 are given in the notes to the financial statementspertaining to the year under review.
Your Company has not accepted any fixed deposits and as such noprincipal or interest was outstanding.
RELATED PARTY TRANSACTIONS:
Related Party Transactions entered during the financial year underreview are disclosed in Note No. 43 of the Financial Statements. These transactionsentered were at an arm's length basis and in the ordinary course of business. There wereno materially significant related party transactions with the Company's PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. Form AOC-2 containing the note on the aforesaid relatedparty transactions is enclosed herewith as
Related Party Disclosure as per Schedule V of SEBI (LODR) Regulations2015 is enclosed herewith as Annexure - 7. The policy on materiality of Related PartyTransactions and dealing with related party transactions as approved by the Board may beaccessed on the Company's website http://vbshilpa.com/ pdf/related_party_policy.pdf
BUSINESS RESPONSIBILITY REPORT:
Pursuant to Clause 34(2)(f) of the SEBI (LODR) Regulations 2015Business Responsibility Report is applicable to the Company the same forms part of theBoard Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY EFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THECOMPANY TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT.
There are no material changes and commitments effecting the financialposition of the Company occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
3. Neither the Managing Director nor the Whole-time Director of theCompany received any remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture.
5. No frauds were reported by the auditors during the year under review
Your Directors further states that during the year under review therewere no cases filed/registered pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
Your Directors wish to express their gratitude to the Central and StateGovernments investors analysts financial institutions banks business associates andcustomers the medical profession distributors and suppliers for their whole-heartedsupport. Your Directors commend all the employees of the Company for their continueddedication significant contributions hard work and commitment.
For and on behalf of the Board of Directors
| ||Sd/- |
|Place: Raichur ||Omprakash Inani |
|Date: 10.08.2017 ||Chairman |
| ||DIN: 01301385 |