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Strides Shasun Ltd.

BSE: 532531 Sector: Health care
NSE: STAR ISIN Code: INE939A01011
BSE 15:24 | 18 Jun 404.25 12.40






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OPEN 395.00
VOLUME 1243915
52-Week high 1066.17
52-Week low 334.10
P/E 3.96
Mkt Cap.(Rs cr) 3,620
Buy Price 404.35
Buy Qty 25.00
Sell Price 404.80
Sell Qty 25.00
OPEN 395.00
CLOSE 391.85
VOLUME 1243915
52-Week high 1066.17
52-Week low 334.10
P/E 3.96
Mkt Cap.(Rs cr) 3,620
Buy Price 404.35
Buy Qty 25.00
Sell Price 404.80
Sell Qty 25.00

Strides Shasun Ltd. (STAR) - Director Report

Company director report

Dear Members

Your Company’s directors are pleased to present the Twenty-Fifth Annual Reporttogether with audited financial statements for the financial year ended March 31 2016.


(Figures in Million)

Year ended

March 31 2016

March 31 2015

Rupees US$ * Rupees US$ *
1.1 Financial Results
Income 23444.52 353.83 10295.94 164.74
Operating Profit (EBIDTA) 4230.21 63.84 2340.96 37.46
Net Profit (PAT) 1610.72 24.31 5323.19 85.17
Reserves and Surplus 30460.63 459.71 14148.07 226.37
1.2 Profits
Operating Profit (EBIDTA) 4230.21 63.84 2340.96 37.46
Less : Interest 1027.12 15.50 344.23 5.51
Depreciation & Amortisation 1058.48 15.97 492.54 7.88
Exceptional items incl. AS 30 251.75 3.80 (5186.14) (82.98)
Profit before tax 1892.86 28.57 6690.33 107.05
Less: Provision for Tax
Current tax expenses 327.12 4.94 1425.72 22.81
Current tax expense relating to prior years (52.91) (0.80) (11.87) (0.19)
Deferred tax expenses 335.05 5.06 (46.71) (0.75)
MAT credit entitlement (327.12) (4.94) - -
Profit after tax 1610.72 24.31 5323.19 85.17
Opening balance of Profit and Loss 47.26 0.71 1085.82 17.37
Add: Transferred from General reserve - - 560.72 8.97
Pursuant to the Scheme of Amalgamation 1916.75 28.93 - -
Available for appropriation 3574.73 53.95 6969.73 111.52
1.3 Appropriations
Depreciation on transition to Schedule II of the Companies Act 2013 on tangible fixed assets (8.07) (0.12) (28.79) (0.46)
Dividend on Equity Shares:
Interim Dividend Paid (67.22) (1.01) (6254.39) (100.07)
Proposed Dividend (357.41) (5.39) (178.85) (2.86)
Dividend Tax:
On Interim Dividend (14.07) (0.21) (460.44) (7.37)
On proposed Dividend (74.80) (1.13) -
Balance carried to Balance Sheet 3053.16 46.08 47.26 0.76

Note * 1 US$ = ' 66.26 (Exchange Rate as on March 31 2016)

* 1 US$ = ' 62.50 (Exchange Rate as on March 31 2015)

Previous year figures have been regrouped/ restated wherever necessary to make themcomparable with those of the current year.


FY 2015-16 has been a landmark year for us with the annualised revenue base of theCompany expanding almost 3 times driven by organic and inorganic strategies. The Companyreported robust FY16 Results with Pharma delivering strong operating margins and R&Dgaining momentum.

Regulated Markets - Driven by North America and Australia

• Revenues stood at ' 10934 million registering 75% growth over the lastyear

• The business contributed to 34% of the group revenue for the period ended March31 2016

• North America delivered robust performance in FY 2016. Base Portfolio delivereda strong performance with healthy market share gains for some key products - Vancomycinhardgel (50%) Ergocalciferol softgel (52%) Methoxsalen softgel (37%) and Calcitriolsoftgel (14%).

• 5 product approvals received from US FDA in FY 2016. New product launchesgarnered important market share - Benzonatate Softgel (20%) Dutasteride Softgel (14%) andLamivudine/ Zidovudine Softgel (10%).

• New product filing gained momentum with 10 ANDA filings for H2 FY 2016 R&Dspent is ' 757 Million in FY 2016 versus ' 592 Million in FY 2015

• Cumulative filings of 52 ANDAs in the US with 29 products pending approval.

• Re-entered the Australian market in a leadership position under ArrowPharmaceuticals. The business consolidated for 7 months in FY 2015-16 delivering steadyperformance.

Emerging Markets

• Revenues stood at ' 4301 Million versus ' 4609 Million in theprevious year

• The business contribution stood at 14% of Group revenue for the period endedMarch 31 2016

• Significant corporate actions announced during the year in Africa and India witha focus on improving the quality of the business. Continue to be invested in business froma long term perspective as it has the right pivots to deliver sustainable growth

• Disciplined approach to credit risk helps tide over a volatile operatingenvironment in Africa. Branded business continues to track healthy growth at secondarylevel. Volatile currency environment during the year impacts demand for generic productsby few countries in Africa

• Successfully integrated the acquired businesses of Central Nervous System (CNS)from erstwhile Ranbaxy brand portfolio from J&J and probiotics business from Medispanin India. Business now has a strong product portfolio and a well-integrated field force toleverage pan India foot print

• Investment in new markets of Russia CIS and South East Asia on track with afocus on building a strong branded generics platform in the regions.

• Strong Field force of ~1000+ medical representative across emerging markets

Institutional Business

• Revenues stood at ' 5951 Million with 49% growth over the previous year

• The business vertical contributed 19% of Group revenue for the period endedMarch 31 2016

• Increased off-take in ARV (antiretroviral) segment and strong supply chainexecution for higher volumes in Anti-Malarials helped deliver best yearly performance inthe FY 2016.

• Working in collaboration with Gilead Sciences for development and distributionof generic Sofosbovir and Tenofovir Alafenamide (TAF) in developing economies

• Working in collaboration with Medicines for Malaria Venture (MMV) for thedevelopment of rectal artesunate for pre-referral treatment of children with severemalaria

• Signed a sub-licensing agreement with the Medicines Patent Pool (MPP) to developDolutegravir (DTG) for treatment of HIV in developing countries

• Received approval from Drug Controller General of India (DCGI) for manufacturinggeneric version of Sofosbuvir (Gilead’s Sovaldi) used for treatment of Hepatitis C.Currently marketing the product under the brand name "Virso". Registrations andsales for "Virso" gaining momentum in key emerging markets

Pharmaceutical Services & Active Ingredients (PSAI)

• Revenues stood at ' 10591 Million versus ' 10626 Million in theprevious year

• The business vertical contributed 33% of Group revenue for the period endedMarch 31 2016

• API delivered a steady performance in FY 16 despite impact of incessant rains inthe state of Tamil Nadu

• Focus shifts towards captive consumption New Drug Master File (DMF) filing planaligned to formulations strategy. Filed 5 new DMFs during the year including 3 filed forcaptive use.

• R&D function for API and formulations aligned to ensure seamless executionof backward integration plan for key products across markets.

• Rationalised API portfolio for commodity products with focus on deliveringsuperior margins retained business to be attractive with increased captive consumptions.

Bio Generics

• R&D spent for FY 2016 is ' 197 Million against ' 80 Million in FY2015.

• Company’s lead biosimilar asset reached an inflection point as the pilotclinical study in limited subjects was completed successfully. Focus now is on scaling upthe asset for pivotal clinical study.

• Successfully scaled up the second biosimilar asset which is now ready forbio-compatibility testing.

• Commenced construction activity of biopharmaceutical facility at DoddaballapurBengaluru.

• Board approval in place to spin off the Biotech business into a separate entity.

Key Corporate Actions

Merger of Shasun Pharmaceuticals Limited

We successfully completed the merger of Shasun Pharmaceuticals Limited with theCompany forming the new identity Strides Shasun Limited effective from November 19 2015(Appointed Date being April 1 2015).

The merger provided synergies of complementary product portfolio strong R&Dinfrastructure and de-risked manufacturing base. The merger also provides the supply chainsecurity for the formulations business through in house API capabilities. Going forwardwe are focused on deriving synergies through backward API

integration of key products across businesses and also building an integrated productportfolio with captive API supplies. Besides we are committed to further integrating ourbusiness to leverage the combined infrastructure and resources in a better way to deliversustainable growth.

Acquisition of Generics portfolio in Australia

Strides Pharma Global Pte. Ltd Singapore and Strides (Australia) Pharma Pty LtdAustralia both wholly owned subsidiaries of the Company acquired a generic portfolio ofpharmaceutical products together with certain branded pharmaceutical assets and businessfrom certain wholly owned subsidiaries of Aspen Pharmacare Holdings Limited a companylisted on the Johannesburg Stock Exchange (Aspen). The acquired business has been brandedas Arrow Pharmaceuticals. The business and assets acquired from Aspen have a currentprescription market share that ranks Strides and its group entities as one of the top 3generic pharmaceutical suppliers in Australia and among the top 10 pharmaceuticalcompanies in the Australian pharma market.

Update on Stelis Biopharma

The Company had entered into an agreement with GMS Holdings ("GMS") wherebyGMS or its affiliates would invest USD 21.90 Million for 25.10% stake in Stelis BiopharmaPrivate Limited India ("Stelis") the biotech arm of the Strides Group to fundits greenfield project. During the year the Parties have received the FIPB approval videits letter dated December 23 2015. Pursuant to the approval 69813 equity shares ofStelis Biopharma Private Limited were issued to GMS Pharma (Singapore) Pte. Ltd. Post thisallotment Strides holding in Stelis is 74.90%.

Other Corporate Actions

• Acquired erstwhile Ranbaxy’s ‘Solus’ and ‘Solus Care’divisions operating in the Central Nervous System (CNS) segment in India from SunPharmaceuticals Limited. The arrangement involved transfer of these two marketingdivisions along with their employees to the Company for a consideration of '16500 Lakhs. The transaction has received all the requisite regulatory approvals and hasachieved its closure.

• Acquired seven brands from Johnson & Johnson Group. The products acquiredare in the category of Dermatology Antiemetic and Pain Management segments. The brandportfolio includes Otogesic eardrops Ethnorub ointment and Stugil tablets. Thetransaction has received all the requisite regulatory approvals and has achieved itsclosure.

• Acquired majority stake in domestic branded business of Medispan which enabledentry into niche Probiotics segment. The brand portfolio

includes established brands such as Lactovit and Lactogut. The Business in its entirety(including IPs and manpower) was acquired by an SPV Strides Biologix Private Limited inwhich Strides holds 51% and the balance is held by Medispan Limited. The transaction hasreceived all the requisite regulatory approvals and has achieved its closure.

• Strides Pharma Global Pte. Ltd Singapore entered into a definitive agreement inFebruary 2016 to acquire a strategic stake in Generic Partners Holdings Co. Pty Ltd. andits subsidiaries which includes an Australian pharmaceutical supply and research company.The acquisition provides the Company immediate access to 47 commercialised marketingauthorisations which would make Arrow the second largest generic pharmaceutical productscompany in Australia with a portfolio of over 180 molecules. The acquisition also providesaccess to 22 registrations pending approval with TGA and strong pipeline of 32 moleculesincluding host of drugs going off patent in future. Going forward Arrow will consolidateits R&D initiatives for the Australian market under Generic Partners Entityleveraging its strong product development and registration capabilities. Generic Partnersis one of Australia’s leading B2B suppliers of generic pharmaceuticals.

• Arrow Pharmaceuticals Pty Ltd. a wholly owned subsidiary of the Company inAustralia has entered into a 10-year supply partnership and trading platform with PharmacyAlliance Australia’s longest standing co-operative buying groups. The supplyagreement is an extension to the existing supply arrangement previously in place betweenPharmacy Alliance and Aspen before the Aspen Generics & Chemists’ Own businesswas acquired by Arrow. The Agreement guarantees Pharmacy Alliance members a market-leadingsuite of products and services across both the Arrow Generic range and the renownedChemist Own range of over-the-counter medicinal generics. The Agreement is also reflectiveof Arrow’s current position as the largest generic supplier to Pharmacy Alliancemembers and the value that Pharmacy Alliance represents to Arrow. The transaction hasreceived all the requisite regulatory approvals and has achieved its closure.

• The Group acquired a controlling stake in Universal Corporation Limited(Universal) Kenya. Universal is a Nairobi based pharmaceutical manufacturing andmarketing company which is strongly entrenched in the East African territory with itsfront-end business and has supply contracts with key donor agencies. Strides Shasuncurrently has a strong foothold in West and French Africa with a significant localmanufacturing footprint and front end presence. With this acquisition the Company willget a strong foothold in the key East African markets. The acquisition also providesaccess to one of the only two WHO prequalified manufacturing sites in Sub-Saharan Africawhich will complement 7 strategically located plants the Company currently has acrossmajor geographies in Africa. The acquisition was made through a wholly owned subsidiary.The transaction has received all the requisite regulatory approvals and has achieved itsclosure.

• Company’s wholly owned subsidiary Strides Pharma Inc. USA acquired an OTCportfolio comprising of Jointflex Fergon and Vanquish brands/trademarks from MobergPharma Sweden and/or its affiliates along with applicable production and commercialknowhow domain name and inventory for an aggregate consideration of ~$10.40 million. Theacquisition strengthens the Company’s strategy to build a global OTC franchise. TheMoberg brands/trademarks that are currently marketed in USA and Middle East will furtherstrengthen the OTC franchise. The transaction has received all the requisite regulatoryapprovals and has achieved its closure.

• Divestment of CRAMS Business: The Board of Directors at their meeting held onMay 16 2016 have approved the divestment of Shasun Pharma Solutions Ltd UK (SPSL) whichis into CRAMS API business. Divestment would be made to a Company to be set up by thecurrent management team of SPSL and members of promoter group of Strides Shasun Limited.Divestment would be for an enterprise value not less than GBP 25 Million with an equityvalue of GBP 6 Million (after adjustment of debt and debt like items) to be discharged byway of cash and on such terms and conditions as may be decided by the Board. Thedivestment is subject to approval of Members of the Company and other applicable laws.

2.1 Nature of Business of the Company

There has been no change in the nature of business of the Company during the year underreview.


Authorized Share Capital

During FY 2016 pursuant to completion of merger of Shasun Pharmaceuticals with theCompany effective November 19 2015 the Authorized Share Capital of ShasunPharmaceuticals was added to the Authorized Share Capital of the Company and thePreference Share Capital of the Company was reclassified into Equity Share Capital.

Accordingly the Authorised Share Capital of the Company as at March 31 2016 is '1767500000 divided into 176750000 equity shares of ' 10/- each.

Issued Subscribed and Paid-Up Share Capital

During the year under review:

• Pursuant to completion of merger of Shasun Pharmaceuticals with the Company onNovember 20 2015 the Company allotted 21017329 equity shares of ' 10/- each toshareholders of erstwhile Shasun Pharmaceuticals;.

• Shareholders of the Company had approved raising of long-term funds by way ofissuance of GDR’s/ ADR’s/ FCCBs / QIP or such other equity linked instruments asmay be permissible for an amount up to ' 150000 Lakhs including a green shoeoption. In accordance with the said approval the Company had completed the placement ofequity shares through QIP during the current year. On December 23 2015 the Company hasallotted 8628028 equity shares of ' 10/- each at a price of ' 1278/- pershare (including a premium of ' 1268/- per share).

• The Company allotted 75000 equity shares consequent to exercise of stockoptions.

Consequent to the above the Issued Subscribed and Paid-Up Share Capital of theCompany as at March 31 2016 was ' 893459780 divided into ' 89345978equity shares of ' 10/- each.


Your Directors are pleased to recommend a Final Dividend of ' 4/- (Rupees FourOnly) per equity share of face value of ' 10/- each for the year ended March 312016.

During the year under review the Board of Directors of erstwhile ShasunPharmaceuticals Limited at its meeting held on July 30 2015 had declared an interimdividend of ' 1/- per equity share of face value of ' 2 each and the samewas paid on August 12 2015.

Considering the above the total dividend payout for the year under review includingthe proposed Final Dividend will absorb ' 513.5 Million of reserves which isinclusive of Dividend Distribution Tax of ' 88.87 Million.


The Company has not accepted any deposits and accordingly no amount is outstanding ason the balance sheet date.


As at March 31 2016 the Company had 40 subsidiaries overseas 7 subsidiaries in Indiaand 2 overseas Joint Ventures. List of subsidiaries/ JVs which have become or ceased to bepart of the Company is attached as Annexure 1.

Accounts of Subsidiaries

In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company and all its subsidiary companies whichis forming part of the Annual Report. Statement containing salient features of thefinancial statements of the subsidiary companies / joint venture as required in Form AOC 1is enclosed as Annexure 2 to this Report.


The Company has complied with all the mandatory requirements of Corporate Governance asstipulated in Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. As required by the said regulation a separate report on CorporateGovernance forms part of the Annual Report of the Company. A certificate from theStatutory Auditors of the Company regarding compliance with the conditions of CorporateGovernance also forms part of this Report.


Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Management Discussion and Analysis is given separately and forms partof this Report.


SEBI had notified the Share Based Employee Benefits Regulations 2014 which replacedthe erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines 1999. It mandates that all listed companies having existing stock optionschemes comply with the revised regulation in their entirety.

The Company had 4 ESOP Schemes viz. Strides Arcolab ESOP 2006 Strides Arcolab ESOP2008 Strides Arcolab ESOP 2008 (Directors) and Strides Arcolab ESOP 2011. While there areno outstanding options under the ESOP 2006 ESOP 2008 and ESOP 2008 (Directors) Schemesthere were 350000 options due for vesting over the next three years under the ESOP 2011Scheme.

Considering the provisions of the new Regulation the Nomination and RemunerationCommittee resolved that the existing ESOP Schemes under which there are no outstandingoptions be terminated. Further the Committee resolved that it should not grant furtherstock options under the ESOP 2011 Scheme. However the outstanding options under the ESOP2011 shall continue to vest as per the offer letter granted to employees of the Company.

Pursuant to completion of merger of Shasun Pharmaceuticals with the Company a new ESOP

Scheme titled Strides Arcolab ESOP 2015 was launched to allot upto 70000 stock optionsto employees of erstwhile Shasun holding stock options under Shasun ESOP Scheme. TheScheme has received shareholder approval and In-Principle approval from Stock Exchanges.

Consequent to the cancellation of the old ESOP Scheme the Nomination and RemunerationCommittee has launched a new ESOP Scheme titled Strides Shasun ESOP 2016 which enablesgrant of upto 30 Lakh stock options to Employees of the Company whether in India oroverseas. The Scheme has received shareholder approval and InPrinciple approval from StockExchanges.

Statement giving detailed information on stock options granted to Employees under theCompany’s Employee Stock Option Schemes as required under the SEBI Regulation isenclosed as Annexure 3 to this Report.


Board Composition

The Board comprises of adequate number of Executive and Non-Executive Directors asrequired under the Companies Act 2013 read with Rules made thereunder and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

As on date of this Report the Board comprises of 9 Directors comprising of 2 ExecutiveDirectors 5 Independent Directors and 2 Non-Executive Directors. Chairman of the Board isNon-Executive.

Meetings of the Board

During the year ended March 31 2016 the Board met 5 times. These meetings were heldon May 22 2015 July 30 2015 September 25 2015 October 27 2015 and February 8 2016.For further details please refer to the Corporate Governance Report which forms part ofthis Report.

Policy on Directors’ Appointment and Remuneration

The Directors of the Company are appointed by shareholders at the General Meetings.

As regards the appointment and tenure of Independent Directors the Company has adoptedthe provisions of the Companies Act 2013 read with Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

The Company’s Remuneration Policy for Directors Key Managerial Personnel andSenior Management is enclosed as Annexure 4.

Board Evaluation

As stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Companies Act 2013 and Schedule IV of the Companies Act 2013 the evaluationof the Board as a whole and all directors was conducted based on identified criteria andframework.

The performance evaluation of the Chairman Managing Director Executive Director andthe Non-Independent Directors were carried out by the Independent Directors and theperformance evaluation of the Independent Directors was carried out by the entire Boardexcluding the director being evaluated.

Declaration by Independent Directors

The Company has received necessary declaration from each of the Independent Directorthat he/ she meets the criteria of independence as laid down in Section 149 (6) of theCompanies Act 2013.

Retirements and Appointments

Mr. Deepak Vaidya non-executive Director retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for reappointment. Your Directorsrecommend his re-appointment to the Board.

During the year under review Mr. S. Abhaya Kumar was appointed as an ExecutiveDirector (Additional Director) of the Company effective from November 19 2015 and interms of Section 161 of the Companies Act 2013 he holds office until the date of theensuing Annual General Meeting of the Company. Your Directors recommend his appointment asan Executive Director of the Company for a period of 3 years with effect from November 192015.

Further Mr. Bharat Shah was re-designated as an Independent Director of the Companyeffective from June 15 2016. Mr. Shah was originally appointed as a Non-ExecutiveDirector of the Company on July 25 2014. While he met the criteria stipulated forIndependent Directors under the Act he was designated as Non-Executive Director to ensurecompliance with Section 152 of the Act which stipulates retirement of Directors byrotation. Subsequently as the Board of the Company has requisite number of Non-ExecutiveDirectors who can fulfil the compliance requirement and considering that Mr. Shahcontinues to meet the criteria stipulated for Independent Directors he was re-designatedas Independent Director of the Company. Your Directors recommend his appointment as anIndependent Director for a period of 5 years with effect from June 15 2016.

Key Managerial Personnel

During the year under review Mr. S. Abhaya Kumar who was appointed as an ExecutiveDirector was designated as a Key Managerial Personnel (KMP) of the Company in terms ofSection 203 of the Companies Act 2013.

The KMPs of the Company as on the date of this report are Mr. Arun Kumar ManagingDirector Mr. S. Abhaya Kumar Executive Director and Mr. Badree Komandur Group CFO andCS.


The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is enclosed as Annexure 5 of this Report. Further theparticulars of employees required under Rule 5(2) and 5(3) showing statement of names andother particulars of employees drawing remuneration in excess of the limits as set out inthe said rules is provided in a separate annexure forming part of this Report. The reportand the accounts are being sent to the members excluding the aforesaid annexure. The saidannexure is open for inspection at the Registered Office of the Company. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary.


The Company has undertaken Corporate Social Responsibility (CSR) initiatives in areasof Health Education and Employability which are projects in accordance with Schedule VIIof the Companies Act 2013 (‘Act’). During the year under review your Companyhas spent ' 42.38 Million in CSR activities as against ' 25.55 Millionrequired under the Act. The CSR spend also reflects the erstwhile ShasunPharmaceutical’s spending on CSR activities.

A detailed report on CSR activities undertaken during FY 2015-16 is enclosed asAnnexure 6 to this Report.


The Company has a vigil mechanism pursuant to which a Whistle Blower Policy is inplace. The Policy ensures that strict confidentiality is maintained whilst dealing withconcerns and also that no discrimination will be meted out to any person for a genuinelyraised concern.

The Policy covering all employees Directors and other persons having association withthe Company is hosted on the Company’s website at


The assets/ properties of the Company are adequately insured against loss due to fireriots earthquake terrorism etc. and against other perils that are considered necessaryby the management.


The Company has designed and implemented a framework for Internal Financial Controls("IFC") as required under Section 134 (5) (e) of the Companies Act 2013.

For the Year ended March 31 2016 the Board believes that the Company has sound IFCcommensurate with the nature and size of its business operations; wherein controls are inplace and operating effectively and no material weaknesses exist.

The Company has a process in place to continuously monitor the existing controls andidentify gaps if any and implement new/ improved controls.


The Company has a risk management framework for identification and managing risks.Please refer the Management Discussion and Analysis report forming part of the AnnualReport for additional details.


Particulars of investments made loans given and guarantees covered under theprovisions of Section 186 of the Companies Act 2013 are provided in Note no. 47 to thestandalone financial statements in the Annual Report.


All the transactions with related parties are in the ordinary course of business and atarm’s length basis. Hence disclosure under Form AOC2 is not part of this report.However transactions with related parties are disclosed in Note no. 47 to the standalonefinancial statements in the Annual Report.

The Company has formulated a policy for transacting with Related Parties which isuploaded on the website of the Company.

Further there are no materially significant related party transactions with itssubsidiaries promoters the directors or the management or their relatives etc. thatmay have potential conflict with the interests of the Company at large.


There are no significant and material orders passed by the Regulators/ Courts thatwould impact the going concern status of the Company and its future operations.


Extract of Annual Return in Form MGT 9 is enclosed as Annexure 7 to this Report.


Details of Energy Conversation R&D Technology Absorption and Foreign ExchangeEarnings/Outgo are enclosed as Annexure 8 to this Report.


Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Gopalkrishnaraj HH & Associates a firm of Company Secretaries inPractice (Certificate of Practice No: 4152) to undertake the Secretarial Audit. TheSecretarial Audit Report is annexed as Annexure 9 to this Report. There are noqualifications observations or adverse remarks in the Secretarial Audit Report.


There are no qualifications or adverse remarks in the Audit Report issued by theStatutory Auditors of the Company on the financial statements for the financial year endedMarch 31 2016.


At the Annual General Meeting held on September 9 2014 M/s. Deloitte Haskins &Sells Chartered Accountants (ICAI Registration Number 008072S) were appointed asstatutory auditors of the Company for a period of 3 years viz. till the conclusion of26th Annual General Meeting. In terms of the first proviso to Section 139 of the CompaniesAct 2013 the appointment of auditors shall be placed for ratification at every AnnualGeneral Meeting. Accordingly the appointment of M/s. Deloitte Haskins & SellsChartered Accountants as statutory auditors of the Company is placed for ratification bythe shareholders. In this regard the Company has received a certificate from the auditorsto the effect that if they are reappointed it would be in accordance with the provisionsof Section 139 read with Section 141 of the Companies Act 2013.


Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 with respect to the Directors’ Responsibility

Statement the Board of Directors of your company state that:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts of the Company on a going concernbasis;

(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Your Directors place on record their sincere appreciation for the significantcontribution made by the employees through their dedication hard work and commitment andthe trust and confidence reposed on us by the medical profession and trade.

We also acknowledge the support and wise counsel extended to us by the bankersfinancial institutions Government agencies analysts shareholders and investors atlarge.

For and on behalf of the Board of Directors
Date: June 15 2016 Deepak Vaidya Arun Kumar
Place: Bengaluru Chairman Executive Vice Chairman & Managing Director