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Directors Report of Shilpa Medicare Ltd.

Mar 31, 2023

DIRECTORS REPORT

To

The Members,

Your Directors have pleasure in presenting their Report on the business and operations of the Company along with the Standalone
and Consolidated Audited Financial Statements for the year ended March 31,2023.

Financial Summary

Particulars

FINANCIAL YEAR 2022-23

FINANCIAL YEAR 2021-22

Standalone

Consolidated

Standalone

Consolidated

Continued operations :

Operating revenue

24,770.20

1,05,011.24

35,695.18

1,14,552.28

Other Income (Including Exceptional Item)

5,309.77

1,739.97

4,967.10

2,303.66

Profit before Interest, Depreciation, Tax and after
exceptional Items from continuing operations

909.66

11,968.13

7,135.72

22,689.22

Interest

2,082.51

5,865.21

905.36

4,116.52

Depreciation

4,654.75

9,549.90

3,481.77

7,980.19

Net profit before tax from continued operations

-5,827.60

-3,446.98

2,748.59

10,592.51

Provision for taxes

a. current tax

-836.56

3,413.10

480.23

3,404.31

b. Deferred Tax (Net of MAT Credit)

-42.74

-4,149.46

252.52

763.96

Profit after tax from continuing operations

-4,948.30

-2,710.62

2,015.84

6,424.24

Discontinued operations :

-

-

-

• Profit/ (loss) before tax from discontinued operation

7,095.22

-

16,540.71

-

• Tax expense/(credit) of discontinued operation

3,572.38

-

-4,457.74

-

Profit/(Loss) after tax from discontinued operations

10,667.60

-

12,082.97

-

Profit for the year from continued and discontinued
operations

5,719.30

-2,710.62

14,098.81

6,424.24

Share of profit/(Loss) in Associates/ Joint Ventures

-

-380.97

-

-366.03

Share of profit/(Loss) in Non-Controlling interest

-

-156.04

-

-8.02

Other comprehensive incomes (expenses) (Continued
and Discontinued operations)

-428.59

322.64

118.52

-136.33

Total Comprehensive Income

6,147.89

-2,924.99

13,980.29

5,929.90

REVIEW OF OPERATIONS:

During the year under review, the Company reported standalone operating revenues of '' 24770.20 Lakhs as against '' 35695.18
Lakhs and Total Comprehensive Income of
'' 6147.89 Lakhs as against '' 13980.28 Lakhs in the previous year, whereas consolidated
gross revenues of
'' 105011.24 Lakhs as against '' 114552.28 Lakhs and Total Comprehensive Income of ''-2924.99 Lakhs as
against '' 5929.90 Lakhs in the previous year.

Active Pharma Ingredients

SHILPA PHARMA LIFESCIENCES LIMITED (Wholly owned
subsidary) API FACILITIES

Shilpa has two world class State-of-art API manufacturing
facilities at Raichur, supported by strong & efficient team of
R&D, IPM, Production, Engineering, Quality Control, Quality
Assurance & regulatory functions with other supportive
functions & well administered Human Resource management.
The facilities are cGMP Complaint & approved by many
national & international regulatory bodies like USFDA, EU,
Cofepris- Mexican, PMDA-Japan, Korean FDA, TPD Canada &
TGA-Australia.

The company is having about 20 API''s & intermediate
manufacturing blocks with segregation of Oncology and
Non-Oncology manufacturing facilities. Oncology products
are manufactured & handled with highly precised isolators
& taking care of people & environment. Oncology blocks
designed to handle small scale, medium scale & high-volume
scale to handle different levels of Batch size like 500 gm to
350 kg.

The manufacturing facilities are certified by different bodies
for management systems of Quality, Safety, Environment &
Health like ISO 9001-2015 for Quality system, ISO 14001-2015
for Environment management system, OSHAS 18001-2007
for Occupational Health & Safety system & R&D is certified by
DSIR, Govt. of India.

Shilpa is first company to invest India on containment
technologies for the manufacturing of oncology drug
substances in a contained environment.

The company being environmentally conscious all the waste
is treated in its ZERO discharge handling facility with all down
line supported systems like Stripper, MEE, ATFD, Ficco Facco
followed by Biological & RO systems to treat the waste & make
it re-usable in applicable places.

The company given high level safety importance & designed
to train all the employees involved to make them aware about
the risk involved, its consequences & mitigations required.
All safety requirements of the facility are taken care in design
where safety is built in system like Air handling units, rapture
disc & safety vents, interlocks, alarms & firefighting systems.

Safety coordinators & safety squads are trained by expert to
help industry in case of any issue & also neighbors. Emergency
response team is in place to act in case of emergency. This
Team is trained by Local fire authorities. They are actively
involved in MOCK drills to Keep the system in always ready.

The facility is designed to provide complete utility services &
purified water systems. All utilities are designed to provide to
support required to manufacture without any interruption.
Well-designed coolers are used to support the systems like
Process cooling & HVAC and also compressed air & nitrogen

facility.

All utility system performance is tracked & ensured that it is
working at optimum level, Power consumption reductions are
Placed in case of AHU

Facility is having quality control unit with a capability of
method development, method validation & testing of RM,
IM & Finished products with all 21 CFR Part11 compliance
sophisticated instruments like LCMS, GCMS, ICPMS, XRPD,
PSD analyzer, HPLC, GC and all other supportive instruments
for testing products with well trained & qualified staff.

Shilpa brought out the new block with about 65KL volume
with higher size reactors to ensure the delivery of non-Onco
products in market.

Polymer block and Peptide block is ready to start validation
batches.

SHILPA PHARMA -R&D (API)

Shilpa Pharma views its R&D capabilities as a vital component
of its business strategy that will provide a sustainable, long¬
term competitive advantage. Shilpa pharma is among the few
Indian pharmaceutical companies in India to have started
its research program in support of its global ambitions. The
R&D environment reflects its commitment to be a leader in
the Oncology generics space. Our generics business helps to
reduce drug costs for individuals and governments by bringing
generic drugs to market as early as possible, and making
them available to as many patients as possible. We supply
pharmaceutical ingredients to pharmaceutical companies,
which contributes to our goal of providing affordable medicine.

We will continue to promote affordability in significant ways
and work to expand our product offering of generics, focusing
on increasing access to products with significant barriers
to entry. We will continue to look for new opportunities to
take generics to more patients, in collaboration with other
companies.

Our research and development Centre offers space for the
development of generics meeting international development
standards, including difficult to make complex API processes,
such as those for Oncology/non-Oncology molecule.

Shilpa flow chemistry Team is in action & commercially
demonstrated 2 products in Flow & expected to Demonstrate
another 3-4 products in FY 23-24. This is really added Capability
of close handling.

Shilpa started working on self-dependency on KSM &
intermediate, in this context R&D started is work & completed
2 Products backward integration.

Shilpa R&D continuously focusing on the process technology
improvement activities of existing commercialized API''s to
reduce the manufacturing cost to attain the global costing to
sustain in the market continuously.

Shilpa Medicare Limited - Finished Dosage Formulation Facility is a state of the art manufacturing and testing facility, engaged
in manufacturing and distribution of potent drugs- which includes liquid and lyophilized injectables in vials, sterile dry powder
injectables in vials, oral solid dosage form (Tablets and hard gelatine capsules) into various regulated and rest of the world
markets, including US and EU.. The facility is designed for handling of potent Drug Products (including Oncology products or
adjutant therapies) in a fully contained manner. Facility is designed to handle potent molecules up to OEL 4 level of containment.

The facility is approved by various regulatory agencies including EUGMP- AGES-Austria, ANVISA, PERU, Argentina, South
Africa & MEXICO COFEPRIS.

This facility consists of Oral Solid Block with two commercial scale tablet manufacturing and one commercial scale capsule
manufacturing line. There are two blister packing lines and one Bottle filling line.

Fully automatic packaging lines are available for Injectables in vial presentation and for Oral solid dosage forms in bottles and
blister presentations. The Injectable Packaging lines are designed for safe packaging for Onco Injectables.

Serialization (Track and Trace) is in place and implemented as per market requirement for commercial supplies.

Fully equipped Utility Block is equipped with water system (Pre-treatment and Post treatments for generation and distribution of
Purified water/WFI/Pure steam), Chillers, Air compressors, Boilers, Diesel generators, HVAC etc.

All world class process equipment are provided with 21 CFR part 11 compliant SCADA systems.

Fully equipped and approved chemical testing Laboratories and Microbiology laboratory are operational with trained and
qualified staff.

Commercial presence in various regulated, emerging markets and domestic markets in injectable and oral solid dosage forms.
Capacities:

Inj. - between 1.5-3.0 Million vials depending on product cycle and vial size.

OSD - about 15 - 20 Million units depending on product cycle.

Contract Manufacturing

Shilpa Medicare Limited manufactures many products in several types of dosage forms such as tablets, capsules, liquid injection
(Aseptically and terminally sterilized), Lyophilized Injectable, etc for various reputed pharmaceutical organisations across the
world.

All products are manufactured under the same stringent quality standards for export to USA, EU, EM and Domestic market.
Future Expansions

8 Acre Land available for further expansion. Currently a greenfield project is partially erected for facility expansion of Injectables.

REGULATORY FILINGS (API RAICHUR UNIT-1 & UNIT-2) FY- 2022-23

API

Particulars

Filed in 2022-23

Cumulative Filed Status Planning to file Remarks

in 2023-24

US DMF

No new DMF''s Were Filed

45 DMF 25 DMF was Approved 8 DMF''s -
3 DMF was under review
16 DMF''s CA listed

CEP-EDQM

3 CEPs Were Filed

17 CEP 17 CEP Approved 4-CEPS -
6 CEPs under review

EDMF

3 ASMF were Filed

26 ASMF 22 ASMF was Approved -- -
4 ASMF under review

Particulars

Filed in FY
2022-23

Cumulative

Filed

Cumulative Status

Planning to file
in FY 2023-24

Remarks

Formulation

US

Submissions

No

Submissions

29

Submissions

13 - Final approvals
3 - Tentative approvals
13 - Under assessment

2

Pemetrexed Injection (Ready to
Use) NDA is approved.

EU

Submissions

3 New

Submissions

28

Submissions

20- Final approvals
8 - Under assessment

4

Regulatory Inspections and approvals (API units).

In February 2020, two API facilities located at Raichur, Karnataka, i.e. Unit-1: Deosugur Industrial Area, Deosugur, Raichur,
Karnataka, India and Unit-2: Raichur Industrial Growth Centre, Chicksugur, Raichur, Karnataka, India, inspected by USFDA. EIR
received on April 17, 2020.

Regulatory Inspections and approvals (Formulation unit).

-Regulatory inspections:

(i)

Russia

Feb 2021

Approved

(ii)

Kenya

Nov 2021

Approved

(iii)

Kazakhstan

Mar 2022

Approved

(iv)

Health Canada

Sept 2022

Approved

(v)

Australia (TGA)

Sept 2022

responses submitted, outcome awaited

SHILPA MEDICARE LIMITED INTELLECTUAL PROPERTY MANAGEMENT (IPM) TEAM

Shilpa''s success depends on the Company''s ability to secure patents, protect the proprietary information and operate without
infringing on the others'' intellectual property rights.

Shilpa Medicare Limited Intellectual Property Management (IPM) team is responsible for building Shilpa''s global generic product
pipeline and 505(b)2 NDA pipeline as well as creating, managing and protecting its high value patent estate. Shilpa has a
dedicated IPM Team which provides stage wise IP-clearances during product/process development activities and also provides
frequent updates and alerts on relevant IP (patent, trademark etc) to R&D scientists for products/process and suggests remedial
measures to deal with IP issues. Shilpa IPM team is involved in product selection activity to ensure that right products are selected
for development.

Shilpa''s IPM team continues to build its future pipeline of complex products with an established robust portfolio selection
process, providing early launch opportunities with intellectual property advantages.

Shilpa''s strengths, across various molecules including oral, Injectable and complex differentiated products, biologics, lie in
developing intellectual property in non-infringing processes and resolving complex chemistry challenges. The API Process
development is focused for developing and transferring commercially viable, non-infringing and patentable novel API technologies.
The development grid selection for API''s is based on difficult-to-make API molecules and novel polymorphic forms of certain API''s
for creating value addition.

Shilpa''s IPM Team is involved in patenting of new products, processes, methods of use, drug delivery systems and medical
devices in India, US, EU and other countries with significant market value.

Highlights FY 22-23:

• Shilpa is committed to enhance our product profile by strengthening our intellectual property. Our patent portfolio is
testament to our commitment. In FY 22-23, Shilpa and its group companies have filed 53 patent applications taking the
cumulative total to 544 patent applications in India and other countries. Shilpa received grants for 7 patents during FY 22-23.

SHILPA MEDICARE DABASPET

Transdermal Patches and Oral Film Manufacturing Plant
(Unit VI) .

A transdermal patch is a medicated adhesive patch that is
placed on the skin to deliver a specific dose of medication
through the skin and into the bloodstream. Transdermal
patches have made their place in the global market in the past
few decades as an alternative to conventional therapeutic for
various disease indications. Transdermal patches are widely
accepted among physicians and patients due to their non¬
invasive, pain free and easy administration. In recent years, the
growth of the transdermal patch market has increased and
is expected to increase significantly in coming years. Higher
investments in research and development could be attributed
to the success of the transdermal patch market.

Similarly, the oral thin film drugs were recorded with high
market acceptance due to its ease of application and high
effectiveness. Moreover, developed economies such as the
U.S. and countries in Europe recorded significant sale of oral
thin film drugs. The oral thin film drugs achieve the desired
therapeutic results. Therefore, they have gained attention in
the market as a potential treatment option.

Looking to the market potential, facility is designed and build
a state of art Manufacturing facility of Transdermal Patch and
Oral Thin Films.

The layouts confirming cGMP requirements are finalized
along with Utility, Administration, and canteen building. The
equipment''s are designed to cater both Transdermal Patch
and Oral Thin Film Products. Space for future expansion is
allocated for capacity increment. The Facility comprises of
below sections -

Storage of incoming materials and finished products at
controlled conditions.

Transdermal System / Patch (TDS) and Oral Dispersible Film
(ODF) Manufacturing Plant status highlights:

Transdermal Patch and Oral Film Manufacturing Facility is a
Qualified GMP facility to manufacture exhibit batches filling
product filling and commercialized in Global market. This
facility is approved by
MHRA (UK) for ODF products.

We have completed execution of Exhibit/filing batches of Ten
ODF products and one Transdermal product. We have filed an
ODF product in UK MHRA which is expected to get approval in
2023. The rest of the products are under Clinical studies and
stability studies and will be ready to file for different countries
in the coming months.

We have got GMP certification program for Dietary
Supplements (ODF) from
UL Verification Services Inc.;
Pennsylvania 18106; United States of America.

We have ISO 5001:2018, ISO45001:2018 and ISO 14001:2015
Certification from AQC Middle East LLC, Noida, U.P. India and
ISO / IEC 27001:2013 Certification from KVQA Certification
Services Pvt Ltd Delhi, India

We have Manufacturing Site Registration Certificate from
Ministry of Health, UAE.

We have COPP/WHO Licence to manufacture for sale (or for
distribution of) drugs other than those specified in [Schedules
C and C(l) and X]

US CDMO Business Plan

Introduction

The global Contract Development and Manufacturing
Organization (CDMO) outsourcing market size is projected to
reach ~USD 160 billion by 2028, from USD 80 billion in 2021, at
a CAGR of 10% during 2022-2028 (MarketWatch report, 2022).
Small molecule API development and manufacturing for novel
chemical entities (NCEs) are expected to be the dominant
segments in the CDMO market with a revenue share of ~50%
in 2018. Large molecules, such as biologics, biosimilars, cell
and gene therapies, are expected to witness the fastest
growth over the next 5 years and the global biologics CDMO
Market is estimated to increase from ~USD 10 billion (2020) to
~USD 19 billion by 2026, registering a CAGR of 10.9%. Among
global markets, North America will maintain the lead due to
the presence of some of the largest industry players, focus
on innovative R&D into new treatments, increasing aging
population, prevalence of chronic conditions emergence of
new diseases, as well as the relative abundance of funding
from venture capital for undertaking the high-risk novel
drug discovery research effort. High R&D costs, capacity and
capability limitations and specialized expertise - all major
constraints within pharma companies big and small - make
CDMOs excellent external innovation partners to sponsors
for expediting the drug manufacturing process while offering
significant time, cost, and process efficiencies.

Shilpa Medicare Ltd. (SML) can expect rapid growth in
the CDMO business due to its high-quality workforce,
cost advantage in research and development (R&D) and
manufacturing, and expertise across a range of industry
verticals. In particular, SML''s capabilities in drug substance
(small molecules and large molecules) development and
manufacturing, and finished drug product development and
manufacturing, as well as therapeutic peptides, polymer
science and performance materials, makes a compelling case
for the Company to become firmly entrenched as a partner
of choice for a whole range of companies across pharma and
non-pharma segments.

Market strategy

Shilpa Medicare is a fully integrated Company providing DS,
DP development and cGMP manufacturing from
USFDA,

Health Canada, EMA, PM DA, KFDA, Cofepris, and TGA

accredited facilities. It is therefore well positioned to become
a trusted and truly end-to-end solution provider given existing
infrastructure and continuous capital-intensive investments.

(1) specialization with a strong focus in the high growth
oncology space

(2) further strengthening of biologics capabilities and
capacities, incl., vaccines

(3) technology focus with addition of niche capabilities such
as flow chemistry and AI-DD

(4) planned introduction of new segments such as
oligonucleotides

As an external innovation partner to the innovator biopharma
industry, the Company bring differentiation at several levels
that sets it apart in the CDMO industry-

(1) Early phase to late phase from AI/ML led discovery
(target to hit, hit to lead and lead to NCE) to custom
synthesis, scale up and clinical materials (for advanced
intermediates, RSMs)

(2) Commercial scale cGMP manufacturing with multi-metric
ton capacities for final API

(3) Specialized capabilities such as oncology API, high potent
(OEL Band 5) and cytotoxic compounds

(4) Flow technology with the ability to conduct asymmetric
catalysis, fluorinations, nitrations and a range of
hazardous/complex chemistries

(5) Process intensification using custom printed reactors
that offer exceptional COGS benefits over commercial
flow reactors

(6) AI/ML based process R&D that yields optimized ROS,
higher selectivity and purity, and reduction of unwanted
by-products and impurities (e.g., NDMA)

In addition, Shilpa enjoys a unique position - on one hand -
as a pharma Company first by combining both commercial
and regulatory experience with successful registrations
of >40 complex products globally incl., in the US and
EU markets. On the services side on the other hand its
experience in route scouting, synthetic chemistry, process
and analytical development, ICH stability, product formulation,
manufacturing, fill-finish, labeling and packaging offers
customers a truly integrated approach to drug R&D. That
combined with a structured program management approach
assures customers of full support and high-quality execution
from lab to clinic to market.

We will follow a fundamentally partnership driven approach
to the market with a focus on brand building, innovation,
impeccable delivery, and long-term supply chain assurance

as the key pillars of customer engagement and success. We
will follow a Deep Science methodology based on deep know¬
how of clients'' clinical pipelines, chemistry and biology that
will position Shilpa as a research driven CDMO and facilitate
the acquisition of net new logos. We will establish a Program
Management approach to delivery that transitions clients
from a PO based practice to a full ownership and full lifecycle
model and assure Speed to Clinic and Speed to Market. We will
create a Pharmaceutical Sciences Platform that offers clients
a full-value chain solution incorporating integrated CMC and
program delivery from lead selection to IND within 10-12
months where technical teams will work across functions to
ensure knowledge retention from early to late phase incl., scale
up, clinical trial materials and cGMP manufacturing. We will
establish a Governance Framework to ensure tight integration
with key stakeholders (client sponsors, technical, clinical,
quality, regulatory, commercial heads) with the objective to
evolve from a project-based into a long-term value-based
partnership and ensuring consistent delivery.

We will develop and execute consistent omnichannel (print
and digital) marketing campaigns to evangelize Company''s
capabilities (website, email, print and video), incl., Japanese
language messaging on LinkedIn and other social media
channels. We will utilize sales automation and analytics
to derive actionable intel and insights on markets and
customers (e.g., dormant accounts, underserved territories,
BD productivity metrics, win/loss stats, and so on).

Focus areas for the near-term (2023 - 2024)

(1) Small molecules: The US Food and Drug Administration
(USFDA) approved 53 new molecular entities (NMEs)
in 2020, of which 40, or 75%, were small molecules.
Accordingly, a major focus for the Company will be to
strengthen its position and penetration in this segment.
Shilpa provides a fully integrated CDMO services covering
drug substance, drug product development and cGMP
manufacturing from our USFDA, Health Canada, EMA,
PMDA and TGA accredited facilities. Our expertise
covers custom synthesis, chemical development,
clinical materials, scale-up and cGMP commercial scale
production of advanced intermediates, RSMs and API,
incl., high potency, oncology and cytotoxic compounds.
As oncology specialists, we bring significant experience
in the development and manufacturing of tyrosine
kinase inhibitors such as Axitinib, Dasatinib, Erlotinib,
Imatinib, Lenvatinib, Nilotinib, Pazopanib, Sorafenib,
Sunitinib and others, and a portfolio of anti-cancer
compounds (e.g., Bortezomib, Cabazitaxel, Capecitabine,
Decitabine, Enzalutamide, Gemcitabine, Pomalidomide,
Temozolomide, to name a few). With these unique
capabilities, the CDMO business has picked up a number
of innovator biopharma companies in its portfolio of
clients and delivered successfully on complex programs.

(2) Large molecules: Spending on biologics, and emerging
modalities, such as cell and gene therapies, rose to $164
billion globally in 2020 at an average of 14.3% between
2015 - 2020 (IQVIA report, 2020). Shilpa Biologicals from
its fully integrated facilities in Dharwad, Karnataka, India
provides drug substance and drug product development
and manufacturing for global markets. The facilities
are fully equipped with state-of-the-art upstream and
downstream processing for mammalian and microbial
systems for monoclonal antibodies (MAbs), fusion proteins
as well as adenoviral and AAV based gene therapies
and vaccine production. This includes mammalian cell
culture capacities to 8000L (with associated downstream
processing), three filling lines incl., a high throughput line
with capacities of 300u/m liquid vial fill (for vaccines) is
installed and will be commissioned in 2023. In microbial
fermentation, we have
2000 liters, and are setting up a
150,000L facility with a downstream for microbials.

We provide the full complement of services from cell
line / clone development, and cGMP cell banking to
manufacturing, fill/finish (in vials and PFS), packaging and
labeling -

(1) CHO cells for MAbs, fusion proteins, glycoproteins
and subunit vaccines

(2) HEK cells for adenoviruses and adeno-associated
viruses

(3) Pichia pastoris for VLP, antigen and heterologous
protein production

(4) E. coli for DNA vaccines and high purity DNA
plasmids (for mRNA vaccines)

Our expertise stems from extensive hands-on
development of molecules such as recombinant human
albumin, an NBE, biosimilars such as adalimumab,
etanercept, aflibercept and abatacept, as well as vaccine
manufacturing (e.g., from HEK293 and E. coli for Covid-19
and high purity DNA plasmids for mRNA vaccines). In
addition, we have developed recombinant human albumin
(rHA) in-house as a superior substitute as compared to
what is available from natural sources such as plasma
which carries risk of contamination from biological agents
and pathogens. Several companies have shown interest
in a strategic collaboration with us on rHA with immense
commercial potential for the Company. An invited talk
on Shilpa''s bioprocess expertise in the development of
novel biologics was presented by Dr. Harshawardhan Bal,
PhD, President of the CDMO business at the prestigious
American Association of Pharmaceutical Scientists (AAPS)
National Biotech Conference 2023 in Philadelphia in April
2023. The presentation received excellent reviews on
social media (LinkedIn) and provided further exposure
among the biopharma community as an innovator in the
biologics space.

(3) Drug Product Development: The Company brings
decades of experience developing a wide range of finished
dose formulations, e.g., orals, injectables (fill finish in
vials and pre-filled syringes), ophthalmics, suspensions,
topicals, extended-release formats such as oral thin
films and transdermal systems as well as nanoparticle,
liposomal and lyophilized preparations. This includes
extensive experience in developing value-added clinically
differentiated 505(b)(2) products across therapy areas
that enhance the patient experience. We have successfully
registered >50 products globally incl., in the US and EU
markets and bring together synthetic chemistry, process
development, manufacturing and regulatory expertise
assisted with AI/ML enabled discovery and development
for a uniquely integrated CMC approach to drug R&D. The
Company has successfully delivered on drug substance
and drug product programs under its CDMO business for
US based biotech companies following this approach.

(4) Specialty Chemicals: The Company brings extensive
infrastructure for the manufacturing of both cGMP and
non-GMP materials for use across multiple industry
segments, both pharmaceutical and non-pharmaceutical.
This includes high value, low volume and high-volume
commodity chemicals. This business will leverage
the Company''s existing chemical development and
manufacturing expertise and provide excellent cash flow
to the CDMO business.

(5) Therapeutic peptides: The global peptide CDMO market
was valued at ~USD 2.0 billion in 2021, and is expected to
double by 2030, with a CAGR of 9.0% during this period
(InsightAce Analytic Pvt. Ltd., 2022). Peptide therapeutics
play an essential role in addressing unmet medical needs
and several peptide drugs have reached the market for
diseases such as cancer, multiple sclerosis, diabetes,
osteoporosis, chronic pain, and HIV infection. This is a high
growth market due to advancements in peptide design
technologies, incl., use of bioinformatics and systematic
biological approaches, rising R&D investments in peptide-
based therapies, and inherent favorable properties such
as high specificity and tolerability. Shilpa is extremely
well positioned in this space given our proven expertise
in development, synthesis, incl., advanced technologies
such as
microwave synthesis, and formulation of
peptide products. The Company recently completed a
program for involving complex macrocyclic peptides.

(6) Polymers and performance materials: Shilpa brings
specialized expertise in specialty polymers from custom
synthesis through a range of mechanisms, such as free
radical polymerization, ring-opening polymerization,
anionic and cationic polymerization, ATRP polymerization,
RAFT polymerization, and condensation polymerization.
We bring specialized expertise in PEGylation chemistry

(incl., high MW pegylations), application of poly(butadiene)-
b-poly(ethylene oxide) for controlled drug release as well
as a range of capabilities in development of derivatives
(e.g., functionalization of polybutadienes, and other
polymers) and can deliver high quality and cost-effective
products at any commercial scale from our
USFDA
approved facilities. The polymer division has won a
number of programs and enjoys long-term relationships
with several marquee customers in the polymer space.

(7) Vaccines: The COVID-19 pandemic has brought pharma
companies face to face with unprecedented challenges
in the development of safe and effective therapies under
stringent timelines, especially, in vaccines. Contract
manufacturers have worked side by side with vaccine
producers to meet the tremendous demand and has
validated the Company''s ability to jump into action and
leverage its expertise to supply vaccine APIs to several
pharmaceutical companies such as Zydus, Dr Reddy''s
and the Serum Institute, thereby playing an important
role in India''s public health efforts against the spread
of the virus. This achievement highlights a key aspect of
the Company''s culture - the ability to provide purpose-
built and customized solutions for a client introducing a
new product with unique characteristics and regulatory
requirements. The global vaccine market has undergone
a radical transformation as a result of the pandemic.
There were 394 COVID-19 vaccines in development
between discovery and Phase III in 2020 (GlobalData
report, 2020). The vaccine market value is estimated to
reach $57 billion in 2025, expanding at a CAGR of 7.4%
between 2020 and 2025 (IMARC Group, 2020). Currently
representing less than 5% of the vaccines market, the
contract manufacturing sector has significant room for
expansion and biomanufacturing is a thrust area for the
Company that will continue to see significant traction and
revenues from India and regulated markets.

(8) Antibody-drug conjugates (ADCs): An increasing
number of ADCs are entering clinical trials and our
experience with handling cytotoxic payloads, linker
technologies, bioconjugation reactions and antibody
development, as well as large in-house manufacturing
capacity and the required containment and engineering
controls - all under one roof - means we can quickly emerge
as a front runner in this space. Given their complexity,
more than 70% of ADC projects are outsourced to
CDMOs and this is therefore another thrust area for the
Company. Analysis of companies going public or raising
fresh capital indicates nearly 50% of the companies
have small-molecule pipelines while
20% are focused on
monoclonal antibodies and recombinant proteins and
20% are developing cell and gene therapies. So, while
the focus will be on small and large molecules, a future

proof strategy will include forward investments into new
capabilities in gene and cellular therapies.

(9) Artificial Intelligence and Machine Learning (AIML)
in biopharma discovery and development:
Shilpa
added another feather in its cap through the investment
in Sravathi Artificial Intelligence Technology. Artificial
intelligence (AI) and machine learning (ML) are bringing
about a paradigm shift in drug discovery R&D and are
being adopted by pharma companies to enhance R&D
productivity and speed market. The global healthcare AI
market is estimated to grow from ~USD 5 billion in 2020
to USD45 billion by 2026 (Markets and Markets, 2020).
Applications of AI are being integrated into drug discovery
processes with 40% of start-ups exploiting AI to identify
new drug candidates, 28% to identify new targets, and
17% for de novo drug design. Shilpa/Sravathi AI brings the
ability to combine deep learning algorithms and domain
expertise and the opportunity to position itself as a highly
differentiated CDMO to big pharma customers. With its
AI-DD technology, the Company now provides significant
predictive utility, incl., forecasting novel lead molecules
with high affinity to the target of interest with enhanced
drug like properties and tox profiles, thereby enhancing
quality of compounds that go into the discovery funnel,
faster time to selection of lead compounds and reducing
probability of failures. Our validated AI-led discovery
methodology leads to new molecules in <3 months with
predicted tox profiles and high affinity to defined targets
and we can synthesize compounds from mg to kg to
multi-metric ton cGMP commercial scale from our API
manufacturing sites.

(10) FlowChemistry: Sravathi''s Advance Process Technologies
arm brings in AI-enabled process intensification and flow
chemistry that affords immense value to process R&D, e.g.,
optimized synthetic route, reaction conditions, controlled
heat and mass transfer leading to higher selectivity,
purity, and reduction of unwanted by-products. Sravathi''s
specialized capabilities spanning asymmetric catalysis,
fluorinations, nitrations and other complex chemistries
with custom printed reactors offer exceptional COGS
benefits over commercial flow reactors.

SML is extremely well positioned because of these superlative
and full value chain capabilities to become a strong contender
for innovative solutioning across modalities to the biopharma,
polymer and chemicals industry community globally.

Customer segmentation: Large pharmaceutical companies
are consolidating their supplier base to minimize overheads
and the complexities of dealing with multiple outsourcing
partners. Small and medium-sized biotech and biopharma
companies are increasingly introducing products into the
market on their own and account for a significant proportion

of R&D innovation. In 2017, for example, they made up 51%
of USFDA market approvals, a trend that is expected to rise
in the coming years as they gain experience and successfully
bring products to market. Additionally, small, and medium¬
sized biotech companies do not invest in developing
expensive cGMP production facilities in house and makes
this the top focus market for us. Big pharma companies were
the originators in 28% of USFDA approvals and remain a very
attractive market due to the sheer size of their developmental
pipelines. Our major focus will together be on the growing
segment of small and medium-sized (smid) and specialty
biopharma companies.

The buying criteria for big pharma are different than those
of the smid pharma incl., for example, access to technology
not available in-house in early phase, access to manufacturing
capacity and price rationalization for established or mature
products, on the other end of the spectrum. We will continue
to engage with big pharma along both these lines. Biopharma
companies raised
$88 billion in new equity in 2020, including
sources such as venture capital, initial public offerings (IPOs),
and secondary offerings by publicly listed companies (Jefferies
report, 2020). This is a 76% increase in the amount raised
over the previous year with most of the capital flowing into
emerging biopharma companies. In turn, this will fuel growth
of CDMOs and clinical contract research organizations (CROs)
for pharmaceutical and clinical development of pipeline
candidates.

Marketing: The Company attended several major industry
events such as American Peptide Society (Whistler, British
Columbia, June 2022), ChemOutsourcing 2022 (New Jersey),
CPhI 2022 (Frankfurt), AAPS 2023 (Philadelphia), Drug,
Chemical & Associated Technologies Association (DCAT) 2022
and DCAT 2023 (New York City), and others, incl., representing
the Company at booths for one-on-one interactions with
prospective customers as well as invited talks. Separately,
the Company undertook digital campaigns to advance the
Company''s brand as a science-driven CDMO on LinkedIn
which garnered excellent response from the industry across
key biopharma hubs. The Company will undertake a significant
amount of dedicated and week on week marketing effort to
establish its presence in the CDMO market.

DOMESTIC

At Shilpa Medicare Ltd Our key expertise lies in the oncology
formulation. Fiscal Year 2022-2023, we have started a brand-
new voyage! Embarked our journey to reach out to all the
cancer treatment facilities nationwide with the primary goal of
offering World-Class drugs at competitive pricing.

By hiring the best field teams with the best skills and educating
them with the best scientific information on treatments and
Products. In the year 2022-2023, we have expanded our reach.
To guarantee that the most recent scientific advancements
may be disseminated to all Stakeholders, particularly the

medical community and caregivers, a medico-marketing
department was established.

Capebel 1000 mg dispersible Tablet (Capecitabine
1000 mg tablet) is an excellent example. Capebel
1000 mg dispersible tablets enable doctors to provide
recommended dosages with more compliance and, as a
result, a more powerful outcome.

Current market trends:

In the 75th year of Independence, the pharma sector has put
India on the global map. Globally, today India is one of the
largest sources of Pharmaceuticals.

In India, an estimated 1.32 million new cancer cases are
diagnosed each year with 0.9 million deaths annually, Since
the last decade, the cancer burden has more than doubled in
India. Breast, Lip, Oral and Cervical Cancer account for 1/3rd
of cancer cases in India. 5-year prevalence is estimated to be
around 2.7 million Patients

The domestic oncology market is valued at 4500 Cr and
expanding at an 18% rate across a range of medicines
including hematology and solid tumors. Immunotherapies
and Targeted MABs are therapeutic oncology subspecialties
that are expanding quickly. Additionally, the new molecular
pipeline into the domestic market offers doctors additional
possibilities for interventional therapy as well as new paths for
patients in need of treatment assistance.

Oncology has a huge demand for treatments, thus improving
formulation with a patient-centric perspective is even more
essential.
Shilpa Medicare Ltd is therefore obligated to offer
such
Thoughtful Innovations for Powerful Outcomes.

Molecules like Capecitabine Dispersible Tablets.

To effectively maximize the benefits of Thoughtful Innovations
for Powerful Outcomes,
frequent communication aids and
performing RTM and CME with doctors and emerging experts
are required in order to effectively reach this communication
with the Care Givers, and our field force is fully equipped in
this front.

Recent Trends including pricing in Oncology and Approach:

In the oncology market, new molecules are introduced
quickly due to patent expirations. Prices are extremely
volatile because of the constant introductions of the same
molecules by different companies, but special dosage forms
like Capecitabine dispersible tablets must be developed with
the patient in mind.

Decreasing medicine wastage by developing Multidose Ready
to Use [RTU] formulations, especially injectables.

Effectively communicating the same with regular
communications aids and conducting RTM and CME with
Doctors and emerging specialists.

Strong Growth in Biologic & Biosimilars Drugs in Domestic
Market: -

The Indian Biosimilars market was worth around 300 million in
2015 and is expected to reach 40 billion by 2030.

Looking into the attractiveness of Biologicals, Shilpa has
introduced a separate entity Shilpa Biologics Pvt. Ltd. Shilpa
Biosciences division of SBPL will focus on the core segment
Orthopedics & Rheumatology segment. Looking into the
high prevalence of Autoimmune diseases SBPL is planning
to introduce the brand
Oriadali (Adalimumab 40mg/0.4ml
concentration). It will be manufactured in the SBPL Dharwad
facility. The current domestic market is 87 Cr which is growing
at a
CAGR of 21% (source AIOCD). In FY 23-24, Shilpa
Biosciences aims to achieve a
5% Market Share.

With the launch of SBPL, we are spreading our reach to newer
therapeutic areas like Rheumatoid Arthritis, Orthopedics,
Gastroenterology, and Dermatology.

At SBPL we have identified these therapeutics areas to enter
into
INR. 650 Crores represented the market. With a goal to
attain
7 % market share within first three years of its launch.
In a nutshell, Biologics is the future of Indian Pharmaceuticals
and SBPL will have a strong presence in the coming days.

Shilpa Biologicals Pvt Ltd

Shilpa Biologicals Pvt Ltd''s core expertise lies in the
development of biologics and has mainly focused this year on
the approvals and market authorizations of internal projects
and expansion of CDMO capabilities. With strong emphasis on
quality control and assurance throughout its manufacturing
processes, the company is confident of obtaining certifications
from different regulatory authorities.

Shilpa Biologicals'' biosimilar programs for Adalimumab,
Aflibercept and Abatacept
are progressing well towards
approvals from different regulatory authorities. Focusing on
obtaining approvals from different markets worldwide is a
strategic move for Shilpa Biologicals. In line with this strategy,
our RA, BD and marketing teams are working towards filing in
different ROW markets. This will allow the company to expand
its market reach beyond India and cater to patients in various
regions.

The anticipated launch of our biosimilar to Humira, Oriadali®,
in India during the 2nd quarter of 2023-2024 is a significant
milestone for the organization. SBPL''s Adalimumab is the
biosimilar version of innovator''s high concentration product
(100mg/mL). By developing a biosimilar version, Shilpa
Biologicals can provide a more cost-effective alternative to
patients without compromising on quality or efficacy. Due to
this advantage over other biosimilar versions of Adalimumab,
revenue generation is expected post-product''s launch from
direct sales, partnering and out-licensing opportunities across
the India and RoW markets.

SBPL has received phase III clinical trial approval for our
biosimilar to Eylea (Aflibercept) in India, which is another
significant milestone during this financial year. Aflibercept is a
complex molecule in terms of process development and SBPL
has developed a perfusion process to achieve biosimilarity
for this molecule. Material generation for Clinical trials for
the molecule is completed and process validation is ongoing.
The progress made with Aflibercept signifies the company''s
dedication to innovation and improving patient outcomes in
the field of ophthalmology. Additionally, three other pipeline
drugs are expected to complete preclinical studies indicates
that SPBL is continuously expanding its portfolio and investing
in research and development.

The joint inspections and clearance from the Central Drugs
Standard Control Organization (CDSCO) for Bioanalytical
Laboratory and for marketing authorization of our Biosimilar
to Humira are significant achievements. The approval received
for Bioanalytical Laboratory will fasten the clinical trials
programs of our Biosimilar programs and also opens up new
area for revenue generation through CRO activities.

It''s positive to note that multiple customers have approached
Shilpa Biologicals for CDMO activities in FY2022-23, indicating
an increasing demand for the company''s services. The
fact that Shilpa Biologicals underwent audits from various
prominent organizations of India and successfully cleared
them, highlights the company''s commitment of maintaining
high quality and meeting regulatory standards.

The combined market size of the two drugs currently in clinical
trials, estimated at around $30 billion, signifies the potential
commercial value of these products. This demonstrates SPBL''s
focus on developing drugs targeting therapeutic areas with
significant market demand. Furthermore, the anticipation of
adding two more drugs to the clinical trial pipeline in the next
financial year, with an estimated market size of approximately
$17 billion, highlights SPBL''s commitment to further expansion
and capturing additional market opportunities.

Opportunity and drivers -

a) Opportunity in RoW markets - Our company is in
the process of establishing partnerships with leading
pharmaceutical players for biosimilars across different
geographies as a strategic approach to expand its
presence in these markets. Due diligence of our
Dossier of our Biosimilar Adalimumab and Aflibercept
is completed in different RoW markets, and we expect
successful collaborations in the coming year. In addition,
we have signed an out-licensing deal with one of the
Russian organizations for Aflibercept. These partnerships
can lead to increased market penetration, accelerated
product adoption, and mutually beneficial growth
opportunities.

Shilpa Biologicals Pvt Ltd has a robust pipeline comprising
of
11 biosimilars which cater to different therapeutic areas
like autoimmune disorders, ophthalmics, and cancer. By
diversifying their pipeline with a combination of established
biologics and niche opportunities, Shilpa Biologicals
demonstrate a comprehensive approach to product
development. This strategy allows SBPL to leverage their
expertise in biopharmaceuticals while targeting a wide range
of therapeutic areas and patient needs.

FTF Pharma (P) Ltd.

Almost a 10 years old company, FTF Pharma is the trusted
and a well-known name amid various big and medium sized
pharmaceutical players across the globe as a reputed CDO &
CDMO. Employing about 70 highly skilled professionals, FTF
Pharma owns a state-of-the-art R&D center in Ahmedabad,
Gujarat (India) that is spread into 55,000 square feet area with
dedicated FnD labs, AR&D labs and facility for handling highly
potent drugs, all equipped fully with modern equipment &
sophisticated instruments.

As a CDO, FTF focuses on the development of high valued
first-to-file generic products under ANDA regulatory pathway,
complex generic products & innovative new drug products
covered by 505b2 NDA applications. FTF''s interest lies
predominantly in the development of products comprising
small molecules & peptide molecules. Since its inception,
FTF has developed & collaborated more than 100 products
for major regulated markets & RoW markets. FTF''s front-end
generic development partners from all over the world makes
FTF globally a leading CDO and partner of choice.

FTF''s thirst for innovation is evident by its patent filing numbers.
So far, FTF has filed more than 75 patent applications in
different jurisdictions including USA, Europe/UK, Canada,
China, and India and awarded 5 US patents & 2 Indian patents
covering FTF''s 505b2 oral & parenteral technologies.

Having its expertise in the development of different types of
solid, liquid, lyophilized & topical dosage forms, FTF is also
working on new-edge technologies such as Nano-emulsions,
SMEDDS, micellar formulations and lipid nanoparticles.
FTF is expert in developing tablets, hard gel capsules, low
& high volume parenterals (ready-to-use/dilute solutions,
suspensions), lyophilized solids, oral thin films, strips, patches,
prefilled syringes, ophthalmic solution & drops, coated/
uncoated/sugar coated/film coated pellets/beads in capsules,
matrix dosage forms, orally disintegrating tablets, IR/ER/PR/
SR/DR/MR dosage forms, bi-layered tablets, and combination
products.

FTF''s product development expertise is further evident by the
fact that some of the products developed & collaborated by
FTF are now approved in US. These products include first to
file generics of Opsumit® and Otezla®; 505b2 oral liquids
Norliqva® (amlodipine oral solution), Tadliq® (tadalafil oral

suspension), Zonisade® (zonisamide oral suspension), Liqrev®
(sildenafil oral suspension) and Atorvaliq® (atorvastatin oral
suspension).

Continuously striving towards its vision & mission, through
all these years, FTF has been successfully offering Research
and Formulation Development services, Technology Transfer
& Contract Manufacturing services, Non-infringing/Design-
around strategies, Regulatory filing strategies, and BA/BE &
clinical support services.

Under the leadership of Shilpa Medicare Ltd. (SML), FTF
is achieving new milestones in its growth journey and is
increasing its footprints in US, Europe, Canada, China and
other emerging markets. After its acquisition by SML, FTF has
considerably added good numbers of clients to its clientele
list. FTF visions to become one of the TOP GLOBAL CROs by
2025 and FTF is moving towards its vision firmly & positively.

STANDALONE AND CONSOLIDATED FINANCIAL
STATEMENTS:

The Standalone and Consolidated Financial Statements of
your Company have been prepared in accordance with Indian
Accounting Standards (''Ind AS'') notified under the Companies
(Indian Accounting Standards) Rules, 2015, as amended.

Further, a statement containing the salient features of
the Financial Statements of our subsidiaries pursuant to
subsection 3 of Section 129 of the Companies Act, 2013 in
the prescribed form AOC-1 is appended as Annexure to the
Board''s Report. The Statement also provides the details of
performance and financial position of each of the subsidiaries.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURES

The Company has direct and step down subsidiaries in
India and overseas. Consolidated financial statements have
been prepared by the Company in accordance with the
requirements of Ind AS 27 issued by Institute of Chartered
Accountants of India (ICAI) and as per the provisions of the
Companies Act, 2013 ("the Act").

As per the provisions of Section 136 of the Act, separate
audited financial statements of subsidiaries are placed by
the Company on its website at
www.vbshilpa.com. Statement
containing the salient features of the financial statement of
subsidiaries and associate company for the year ending March
31, 2023 in Form AOC-1

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the
nature of business carried out by your Company. Further, it
is to be noted that consequent to the approval of members
of the Company vide postal ballot dated 20 July 2021 & 08
February 2022, The API business was transferred to Shilpa
Pharma Lifesciences Limited (A wholly owned Subsidiary
Company) via Slump sale. The said transaction was complete
and effective from 01July 2022.

DIVIDEND:

In pursuance to the Dividend Distribution policy of the
Company, your Directors do not recommend any dividend
for the year. The Dividend Distribution Policy of the Company
is set out as
Annexure-2 and the same is uploaded on
the Company''s website at
https://www.vbshilpa.com/pdf/
Dividend%20Distribution%20Policy Update.pdf

SHARE CAPITAL:

The paid up share capital of your Company is '' 8,68,01,898/-
(Rupees Eight Crore Sixty Eight Lakhs One Thousand Eight
hundred and Ninety Eight) divided into 8,68,01,898 equity
shares of
'' 1/- each.

Pursuant to the provisions of section 124 (5) of the Companies
Act, 2013 read with the IEPF Rules, the Company has
transferred 251 shares, belonging to the shareholders who
did not continuously claim dividend for seven years from the
financial year 2014- 15 to IEPF Account, the details of which
are placed on the website of the Company.

LISTING OF EQUITY SHARES:

The securities of the Company are listed on National Stock
Exchange of India Limited (NSE) and BSE Limited (BSE). Further,
the Company has no equity shares carrying differential rights.

TRANSFER TO RESERVES:

During the financial year under review, your Company has not
transferred any amount to the general reserve.

DIRECTORS OR KEY MANAGERIAL PERSONNEL:

Mr. Om Prakash Inani (DIN No.01301385), Non-Executive
Director will retire by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment.

CHANGE IN DIRECTORSHIP

During the year Ms. Sirisha Chintapalli - Independent Director
of the Company ceased from the office of Directorship w.e.f 28
September 2022 due to completion of her tenure. In place of
the retiring Director Dr. Anita Bandyopadhyay was appointed
as Independent Director a period of 3 years. Further, Dr.
Kamal K Sharma was appointed as Independent Director for
a period of 3 years. Their appointments were approved by
members of the Company at the Annual general meeting held
on 28 September 2022.

CHANGE IN KEY MANAGERIAL PERSONNEL

During the year Ms. Ritu Tiwary was appointed as Company
Secretary & Compliance officer w.e.f 23 May 2022. Following
are the key managerial personnel''s of the Company:

Mr. Vishnukant C Bhutada - Managing Director

Mr. Kalakota Sharath Reddy - Whole-time Director

Mr. Alpesh M Dalal - Chief Financial Officer

Mrs. Ritu Tiwary - Company Secretary & Compliance Officer

NUMBER OF MEETINGS OF THE BOARD:

During the financial year, Five Board Meetings were held as
detailed below which are in compliance with the provisions
of the Companies Act, 2013, the Listing Regulations and
Secretarial Standards on Board meeting:

1. 23 May 2022

2. 11 August 2022

3. 11 November 2022

4. 04 February 2023

5. 14 February 2023

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT
DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149:

The Independent Directors have submitted their declaration
of Independence, as required under Section 149(7) of the
Companies Act, 2013 stating that they meet the criteria of
independence as provided in Section 149(6) and Regulation
25 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

AUDITORS:

Statutory Auditors:

Members of the Company at the Annual General Meeting
held on 28 September 2022 approved the appointment
of M/s. Bohara Bhandari Bung & Associates LLP, Chartered
Accountants, Raichur FRN:008127S/S200013, as the new
statutory auditors of the Company to hold office for one
term of 5 years commencing from conclusion of the ensuing
35th Annual General Meeting up to the 40th Annual General
Meeting of the Company.

Cost Auditors:

The Board, on the recommendation of the Audit Committee,
has appointed M/s. V.J. Talati & Co., Cost Accountants, for
conducting the audit of cost records of various segments
of the Company for the financial year 2023-24. As required
under Section 148 of the Companies Act, 2013 and Rule 14 of
the Companies (Audit and Auditors) Rules, 2014, a resolution
is being placed at the ensuing Annual General Meeting for
ratification of remuneration payable to the said Cost Auditors.

Secretarial Auditors:

Mr. D.S. Rao, Practicing Company Secretary was appointed to
conduct the Secretarial Audit of the Company for the financial
year 2022-23, as required under Section 204 of the Companies
Act, 2013 and Rule 9 framed thereunder. The Secretarial Audit
Report, in form MR-3, for the financial year 2022-23 forms part
of this Report as
Annexure - 3.

The Board on the recommendation of the Audit Committee
has appointed Mr. D S Rao, Practicing Company Secretaries,

as Secretarial Auditors of the Company for the financial year
2023-24.

Internal Auditor:

Pursuant to the provisions of section 138 of the Companies
Act, 2013 and rules made thereunder, the Board on the
recommendation of the Audit Committee has appointed M/s
BDO India LLP as Internal Auditors of the Company for the
financial year 2023-24.

COMMENTS BY THE BOARD ON EVERY QUALIFICATION,
RESERVATION OR ADVERSE REMARK OR DISCLAIMERS:

Statutory Auditors:

As there is no qualification, reservation or adverse remark
in the reports given by the Statutory Auditors, your directors
need not provide any clarification on the same.

Secretarial Auditors:

As there is no qualification, reservation or adverse remark in
the reports given by the Secretarial Auditors, your directors
need not provide any clarification on the same.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE OUTGO:

Information required under section 134(3)(m) of the
Companies Act, 2013 read with Rule
8 of the Companies
(Accounts) Rules, 2014, is enclosed herewith as
Annexure - 4

RISK MANAGEMENT POLICY:

Pursuant to Regulation 21(4) of SEBI (LODR) Regulations, 2015,
the Board of Directors have formulated and implemented a
Risk Management Policy, which identifies various elements
of risks, which, in its opinion, may threaten the existence of
the Company and contains measures to mitigate the same.
The Risk Management Policy of the Company is hosted on the
Company''s website:
www.vbshilpa.com.

A Risk Management Committee has been constituted as per
the terms of Regulation 21 of SEBI (LODR) Regulations, 2015
to monitor and review the major risks faced by and the risk
management plan of the Company periodically.

During the year two Risk Management Committee meetings
were held on 24 September 2022 & 17 March 2023.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY:

In terms of the provisions of Section 135 read with Schedule
VII to the Companies Act, 2013 and the Companies (Corporate
Social Responsibility Policy) Rules, 2014, a Corporate Social
Responsibility Policy (CSR Policy), indicating the activities to
be undertaken by the Company, as framed by the Corporate
Social Responsibility Committee (CSR Committee) has been
adopted by the Board of Directors. Accordingly, the Company
has transferred the CSR amount to ''Shilpa Foundation'', a

public charitable trust taking up various social public causes
of the society in and around Raichur, Karnataka and the
activities of the said trust are covered under the Schedule VII
of the Companies Act, 2013. A report on the CSR activities,
as required under Rule
8 of the Companies (Corporate Social
Responsibility) Rules, 2014, is enclosed herewith as
Annexure
- 5.

The Company has constituted the CSR Committee for
monitoring the activities undertaken by the Company in this
regard. The CSR Policy of the Company and other details as
required is are placed on the Company''s website at
https://
vbshilpa.com/pdf/CSR Policy.pdf

NOMINATION AND REMUNERATION POLICY:

A Committee of the Board named as "Nomination and
Remuneration Committee" has been constituted to comply
with the provisions of Section 178, Schedule IV of the
Companies Act and Regulation 19 of SEBI (LODR) Regulations,
2015. It has been entrusted with the task to recommend to
the Company the prospective Directors and KMP who possess
the requisite skills and positive attributes as specified in the
Nomination and Remuneration Policy.

The Nomination and Remuneration Committee has formulated
a Nomination and Remuneration Policy which recommends
the guidelines based on which the annual performance of
the Independent Directors, Board and Individual Directors is
carried out by the Board.

The Nomination and Remuneration Policy of the Company
is placed on the Company''s website at
https://www.vbshilpa.
com/pdf/NominationRemunerationPolicy.pdf

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF
ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND
INDIVIDUAL DIRECTORS:

The Board of Directors have carried out an annual evaluation
of its own performance, as well as that of its Committees and
individual directors pursuant to the provisions of the Sections
134 and 178 read with Schedule IV to the Companies Act,
2013. A structured questionnaire was prepared after taking
into consideration inputs received from the Directors, covering
various aspects of the Board''s functioning such as adequacy of
the composition of the Board and its Committees, execution
and performance of specific duties by the Board of Directors,
independence governance, ethics and values, attendance and
contribution at meetings etc.

The performances of the Independent Directors were
evaluated by the Board after seeking inputs from all the
directors on the effectiveness and contribution of the
Independent Directors.

The performance of the Committees was evaluated by the
Board after seeking inputs from the Committee members

based on the criteria such as the composition of Committees,
effectiveness of Committee Meetings, etc.

The Board reviewed the performance of the individual
directors on the basis of criteria such as the contribution of
the individual director to the Board and Committee Meetings,
like preparedness on the issues to be discussed, meaningful
and constructive contribution and inputs in Meetings, etc. In
addition, the Chairman was also evaluated on the key aspects
of his role.

In a separate meeting of Independent Directors, performance
of the Non-Independent Directors, performance of the Board
as a whole and performance of the Chairman was evaluated,
taking into account the views of Executive Directors and Non¬
Executive Directors. The Independent Directors also assessed
the quality, quantity and timeliness of flow of information
between the Board and the management that is necessary for
the Board to perform its functions reasonably and effectively.
The same was discussed in the Board Meeting that followed
the meeting of the Independent Directors.

FINANCIAL STATEMENTS:

In accordance with the provisions of Section 129 (3) of the
Companies Act, 2013, the Standalone and Consolidated
Financial Statements, drawn up in accordance with the
applicable Accounting Standards, form part of this Annual
Report.

In accordance with Rule 8 (1) of Companies (Accounts) Rules
2014, the highlights of performance of the Subsidiaries,
Associates and Joint Ventures and their contribution to the
overall performance of the Company have been detailed in
Annexure - 1 enclosed to this report.

Further, the annual accounts of all the subsidiary companies
are available on the Company''s website
www.vbshilpa.com

Annual accounts of the Subsidiary Companies and related
detailed information will be available for inspection by the
members, at the registered office of the Company and will also
be made available to the members upon request.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has Internal Control Systems, commensurate
with the size, scale and complexity of its operations. Various
Audit systems in the Company monitor and evaluate the
efficacy and adequacy of the internal control systems of the
Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company.
Based on the audit reports, the concerned department/
unit undertakes corrective action in the respective areas
and strengthens the controls. Significant audit observations
and corrective actions thereon are presented to the Audit
Committee of the Board periodically.

The Board of Directors of the Company have adopted various
policies like Related Party Transactions Policy, Whistle Blower
Policy, Policy to determine Material Subsidiaries, Code of
Conduct for Regulating, Monitoring and Reporting Insider
Trading and such other procedures for ensuring orderly and
efficient conduct of its business for safeguarding its assets,
prevention and detection of frauds and errors, accuracy
and completeness of the accounting records and timely
preparation of reliable financial information.

DETAILS OF THE COMPANIES WHICH HAVE BECOME
OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR
ASSOCIATE COMPANIES DURING THE YEAR UNDER
REVIEW:

The following instances took place during the year under
review which need to be reported in accordance with Rule 8(5)
(iv) of Companies (Accounts) Rules, 2014:

During the year, no new Companies have become Subsidiaries/
Joint ventures/ Associate Companies of Shilpa Medicare
Limited

Your Company has filed a Second Stage petition with National
Company Law Tribunal for effecting the amalgamation with
INM Technologies Private Limited being the wholly owned
subsidiary, The Company is awaiting for the final order of the
Hon''ble tribunal in this regard.

Zatortia Holdings Limited a wholly owned Subsidiary Company
of Shilpa Medicare Limited was closed during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 Your
Directors'' confirm that:

Applicable accounting standards have been followed in the
preparation of the annual accounts and that no material
departures have been made from the same;

Accounting policies have been selected and applied
consistently. Judgments and estimates made are reasonable
and prudent, so as to give a true and fair view of the state of
affairs of the Company at the end of the FY2023 and of the
profit of the Company for that period;

Proper and sufficient care has been taken to maintain adequate
accounting records in accordance with the provisions of
the Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

Annual accounts have been prepared on a going concern
basis

Adequate internal financial controls for the Company to follow
have been laid down and these are operating effectively; and

Proper and adequate systems have been devised to ensure
compliance with the provisions of all applicable laws and these
systems are operating effectively

EXTRACT OF ANNUAL RETURN:

In accordance with Section 92(3) of the Act and rule 12(1) of
the Companies (Management and Administration) Rules, 2014
(as amended), a copy of the Annual Return of the Company
has been placed on the Website of the Company at
www.
vbshilpa.com

OTHER DISCLOSURES:

Committees of Board:

Your Company has the following committees, namely:

Audit Committee

Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Risk Management Committee

The constitutions of all the committees are as per the provisions
of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The details of the constitution are mentioned in Corporate
Governance Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT:

Regulation 15 of SEBI (LODR) Regulations, 2015 is applicable
to your Company and as such the details as specified in
Schedule V(C) of SEBI (LODR) Regulations, 2015, with regard to
Corporate Governance Report including Practicing Company
Secretary''s Certificate on compliance with the conditions
of Corporate Governance specified in Schedule V(E) of SEBI
(LODR) Regulations, 2015 as well as a certificate as specified
in Schedule V(C)(10)(i) of SEBI (LODR) 2015 forms part of the
Annual report as
Annexure- 6.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the
year under review as stipulated under Regulation 34 read
with Schedule V (B) to the SEBI (LODR) Regulations, 2015 is
annexed hereto and forms part of this Annual Report.

VIGIL MECHANISM:

In pursuance to the provisions of Section 177(9) & (10) of
the Companies Act, 2013 and Regulation 22 of SEBI (LODR)
Regulations, 2015, a vigil mechanism for directors and
employees to report genuine concerns has been established.
The Policy on vigil mechanism i.e. Whistle Blower Policy may be
accessed on the Company''s website at
https://www. vbshilpa.
com. The policy provides for a framework and process for
safeguard against victimization of director(s) or employee(s)
or any other person who avail the mechanism and allow direct
access to the Chairman of the Audit Committee in exceptional
cases. Your Company adheres to uncompromising integrity in

conduct of its business and strictly abides by well-accepted
norms of ethical, lawful and moral conduct. It has zero
tolerance for any form of unethical conduct or behaviour.
Directors and employees are at liberty to report unethical
practices.

REMUNERATION RATIO OF THE DIRECTORS/KEY
MANAGERIAL PERSONNEL/EMPLOYEES:

Statement showing disclosures pertaining to remuneration
and other details as required under Section 197(12) of the
Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is enclosed herewith as
Annexure-7.

PARTICULARS OF EMPLOYEES:

Statement of employees as required under Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is enclosed as
Annexure - 8 to the
Board''s Report.

COST RECORDS AND COST ACCOUNTS:

The Company is maintaining cost records and accounts as
specified by the Central Government under subsection (1) of
section 148 of the Companies Act, 2013.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN
AT WORKPLACE (PREVENTION, PROHIBITION, AND
REDRESSAL) ACT, 2013:

Your Company has always provided a safe and harassment
free workplace to every individual working in its premises
through various policies and practices. Your Company
always endeavors to create an environment that is free from
discrimination and harassment, including sexual harassment.
Your Company has been actively involved in ensuring that the
clients and all the employees are aware of the provisions of
the POSH Act, 2013 and the rights available to them there
under.

Your Company has in place an Anti-Sexual Harassment Policy
in line with the requirements of the Sexual Harassment of
Women at workplace (Prevention, Prohibition and Redressal)
Act, 2013. Internal Complaints Committee has been set up to
redress the complaints received regarding sexual harassment.
Your Company did not receive any complaints during the
period under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the loans granted, guarantees given, securities
provided and investments made during the year under review,
as covered under Section 186 of the Companies Act, 2013, are
detailed in the notes to the financial statements which may be
read as a part of this Report.

DEPOSITS:

During the year under review, your Company has not
accepted any deposits within the meaning of Section 73 of the
Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014.

RELATED PARTY TRANSACTIONS:

Related Party Transactions entered into during the financial
year under review are disclosed in Note No. 45 to the
Financial Statements. These transactions were at an arm''s
length basis and in the ordinary course of business. There
were no materially significant Related Party Transactions with
the Company''s promoters, directors, management or their
relatives which could have had a potential conflict with the
interests of the Company. Form AOC-2, containing a note on
the aforesaid Related Party Transactions is enclosed herewith
as
Annexure - 9.

Related Party disclosures as per Schedule V of SEBI (LODR)
Regulations, 2015 are enclosed I

The policy on Related Party Transactions, as approved by the
Board may be accessed on the Company''s website
https://
www.vbshilpa.com/pdf/related party policy.pdf

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT:

The SEBI vide its circular dated 10 May 2021 made Business
Responsibility & Sustainability (BRSR) Mandatory for top 1000
Listed Companies (by Market Capitalization) from the FY 2023,
while disclosure was voluntary for the FY 2022.

Pursuant to Clause 34(2)(f) of the SEBI (LODR) Regulations,
2015 Business Responsibility & Sustainability Report, being
applicable to the Company, forms part of the Board Report as
Annexure-10

GENERAL:

Your Directors state that no disclosure or reporting is required
in respect of the following items as there were no transactions
on these items during the year under review:

Issue of equity shares with differential rights as to dividend,
voting or otherwise. Issue of shares (including sweat equity
shares) to employees of the Company under any scheme.

Neither the Managing Director nor the Whole-time Director of
the Company received any remuneration or commission from
any of its subsidiaries.

No significant or material orders were passed by the Regulators
or Courts or Tribunals which impact the going concern status
and Company''s operations in future.

No frauds were reported by the auditors during the year
under review.

There are no material changes and commitments affecting the
financial position of the Company occurred between the end
of the financial year to which the financial statements relate
and the date of the report.

No applications were filed before or any proceedings pending
under the Insolvency and Bankruptcy Code, 2016

The details of Difference between valuation done at the time
of one time settlement and the valuation done while taking
loan from the banks and financial institutions along with the
reason thereof - Not Applicable.

The Company has complied with Secretarial Standards, i.e.
SS-1, and SS-2 relating to Meetings of the Board of Directors
and General Meetings respectively, issued by the Institute of
Company Secretaries of India and notified by the Ministry of
Corporate Affairs.

Your Directors wish to express their gratitude to the Central
and State Governments, investors, analysts, financial
institutions, banks, business associates and customers, the
medical profession, distributors and suppliers for their whole¬
hearted support. Further, Your Directors would like to express
the appreciation to all the employees of your Company for
their continued dedication, significant contributions, hard
work and commitment towards achieving the objects of the
Company.

For and on behalf of the Board of Directors
Shilpa Medicare Limited

Sd/-

Omprakash Inani

Chairman
DIN: 01301385

Place: Raichur

Date: 01 September 2023


Mar 31, 2022

Your Directors have pleasure in presenting their Report on the business and operations of the Company along with the Standalone and Consolidated Audited Financial Statements for the year ended March 31,2022.

Financial Summary

(All figures are in

Rupees in Lakhs)

Particulars

FINANCIAL YEAR 2021-22

FINANCIAL YEAR 2020-21

Standalone

Consolidated

Standalone

Consolidated

Operating revenue

35695.18

114552.28

25705.05

90113.01

Other Income (Including Exceptional Item)

4086.20

1424.55

3224.58

3014.16

Profit before Interest, Depreciation, Tax and after exceptional Items from continuing operations

6254.82

22689.21

6561.67

27263.31

Interest

905.36

4116.52

607.42

2186.87

Depreciation

3481.77

7980.19

2228.06

5397.67

Net profit before tax

2748.59

10226.49

9020.99

19505.19

Provision for taxes

a. current tax

480.23

3404.31

1577.95

4523.00

b. Deferred Tax (Net of MAT Credit)

252.52

763.96

933.69

361.83

Profit after tax from continuing operations

2015,84

6058.22

6509.35

14793.94

Discontinued operations :

-

-

-

-

• Profit/ (loss) before tax from discontinued operation

16540.71

-

16532.88

-

• Tax expense/(credit) of discontinued operation

4457.74

-

4603.07

-

Profit/(Loss) after tax from discontinued Operations

12082.97

-

11929.81

-

Profit for the year

14098.81

6058.22

18439.17

14620.37

Share of profit/(Loss) in Associates/ Joint Ventures

-

(366.03)

-

(173.58)

Share of profit/(Loss) in Non-Controlling interest

-

(8.02)

-

(157.67)

Other comprehensive incomes (expenses)

41.09

(136.33)

46.70

27.07

Total Comprehensive Income

13980.29

5929.92

18440.97

14805.11

REVIEW OF OPERATIONS:

STANDALONE AND CONSOLIDATED FINANCIAL STATEMENTS:

The Standalone and Consolidated Financial Statements of your Company have been prepared in accordance with Indian Accounting Standards (''Ind AS'') notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended.

Further, a statement containing the salient features of the Financial Statements of our subsidiaries pursuant to subsection 3 of Section 129 of the Companies Act, 2013 in the prescribed form AOC-1 is appended as Annexure to the Board''s Report. The Statement also provides the details of performance and financial position of each of the subsidiaries.

During the year under review, the Company reported standalone operating revenues of '' 35695.18 Lakhs as against '' 25705.05 Lakhs and Total Comprehensive Income of '' 13980.29 Lakhs as against '' 18440.96 Lakhs in the previous year,

whereas consolidated gross revenues of '' 114552.28 Lakhs as against '' 90113.01 Lakhs and Total Comprehensive Income of '' 5929.92 Lakhs as against '' 14805.10 Lakhs in the previous year.

The Company registered a growth of over 40.62 % on standalone basis and 24.53% on Consolidated in gross income and registered decline in profit by 23.53% on Standalone basis and decline of -58.56% at consolidated bases respectively over the previous year.

SHILPA MEDICARE API FACILITIES

Shilpa Medicare has two world class State-of-art API manufacturing facilities at Raichur, supported by strong & efficient team of R&D, IPM, Production, Engineering, Quality Control, Quality Assurance & regulatory functions with other supportive functions & well administered Human Resource management. The facilities are cGMP Complaint & approved by many national & international regulatory bodies like USFDA, EU, Cofepris- Mexican, PMDA-Japan, Korean FDA, TPD Canada & TGA-Australia.

The company is having about 19 API''s & intermediate manufacturing blocks with segregation of Oncology and Non-Oncology manufacturing facilities. Oncology products are manufactured & handled with highly precised isolators & taking care of people & environment. Blocks designed to handle small scale, medium scale & high-volume scale to handle different levels of Batch size like 500 gm to 350 kg.

The manufacturing facilities are certified by different bodies for management systems of Quality, Safety, Environment & Health like ISO 9001-2015 for Quality system, ISO 14001-2015 for Environment management system, OSHAS 18001-2007 for Occupational Health & Safety system & R&D is certified by DSIR, Govt. of India.

Shilpa is first company to invest India on containment technologies for the manufacturing of oncology drug substances in contained environment & also latest technologies like Bipolar system from Japan to ensure the manufacturing process are sustainable with less consumption of natural resources & safe operations. These types of innovative Technologies provide us the sustainable process which are validated & commercialized. This strength provides us the tremendous opportunities to enhance competitive to improve our positions in the market place & also to find the New market.

The company being environmentally conscious all the waste is treated in its ZERO discharge handling facility with all down line supported systems like Stripper, MEE, ATFD, Ficco Facco followed by Biological & RO systems to treat the waste & make it re-usable in applicable places. Company also planning to use organic waste to use as fuel in furnace where inorganic metals are recovered.

The company has positioned fractional distillation columns, where solvents from products which requires to purify & separate to get pure material which can be re used, with this all solvents are recycled.

Company is also investing on membrane technology where solvent recoveries are done without using natural resource.

The company given high level safety importance & designed to train all the employees involved to make them aware about the risk involved, its consequences & mitigations required. All safety requirements of the facility are taken care in design where safety is built in system like Air handling units, rapture disc & safety vents, interlocks, alarms & firefighting systems.

Safety coordinators & safety squads are trained by expert to help industry in case of any issue & also neighbors.

The facility is designed to provide complete utility services & purified water systems. All utilities are designed to provide to support required to manufacture without any interruption. Well-designed coolers are used to support the systems like Process cooling & HVAC and also compressed air & nitrogen facility.

All utility system performance is tracked & ensured that it is working at optimum level.

Facility is having quality control unit with a capability of method development, method validation & testing of RM, IM & Finished products with all 21 CFR Part11 compliance sophisticated instruments like LCMS, GCMS, ICPMS, XRPD, PSD analyzer, HPLC, GC and all other supportive instruments for testing products with well trained & qualified staff.

Shilpa started new analytical laboratories in Hyderabad to enhance analytical capability be segregating the functions to support regulatory & also Product development.

Shilpa taken up many expansions in last 1 Year, one of our Main & Regular Product called Tranexamic acid (Non-Oncology Product) Plant is modified & also expanded from 5.5 MT to 20.0 MT/month. currently it is supplying about 10.0 MT/m in market from this Block.

One of our another main non-Oncology Product called Ambroxol capacity expanded from 17.0MT -22.0 MT/month. other than this, Shilpa taken up debottlenecking of all the blocks & created double Bay/2 line in 2 manufacturing Onco Blocks which is helping to have multiple Products at a time with dedicated entry/exit. This increases block occupancy & productivity.

Shilpa proved its Capability & Capacity by selling 139 MT Ambroxol & 133 MT Tranexamic acid in FY 21-22 - which is the witness of the scale of Facility.

Shilpa started working for high volume block which about 30-40KL reactors with larger scale to lead few intermediates

which are required in scale & take out the outside dependency of INDIA.

Company has segregated 80% of the block to have 2 bay or to segregate chemical & carbo treatment section which can add efficiency & productivity

Shilpa commissioned its new R&D center for polymer & peptide, created separate wing for CDM0 with its scientific head.

SHILPA MEDICARE -R&D (API)

Shilpa Medicare views its R&D capabilities as a vital component of its business strategy that will provide a sustainable, longterm competitive advantage. Shilpa Medicare is among the few Indian pharmaceutical companies in India to have started its research program in support of its global ambitions. The R&D environment reflects its commitment to be a leader in the Oncology generics space. Our generics business helps to reduce drug costs for individuals and governments by bringing generic drugs to market as early as possible, and making them available to as many patients as possible. We supply pharmaceutical ingredients to pharmaceutical companies, which contributes to our goal of providing affordable medicine.

We will continue to promote affordability in significant ways and work to expand our product offering of generics, focusing on increasing access to products with significant barriers to entry. We will continue to look for new opportunities to take generics to more patients, in collaboration with other companies.

Our research and development centre offers space for the development of generics meeting international development standards, including difficult to make complex API processes, such as those for Oncology/NON Oncology molecule.

The Shilpa Medicare R&D centre in Raichur has shown good progress in terms of new projects taken for development and the projects which were successfully transferred to plant. The Raichur API team has delivered more than 10 projects successfully and taken trial/validation at plant scale and taken up 20-25 new projects for process development of Onco/Non Onco molecule including intermediate/KSM synthesis to make more cost effective and without dependency of outsource.

For environmental protection, we have introduced bipolar membrane technique to remove the ionic impurities from the drug substance during purification/removal of resin treatment to save water to protection of environment.

For further strength of our business strategy to depend less on external customers for supply of starting material and make them in-house to further reduce the cost of existing API to make more cost effective technology. For important projects starting material synthesis in-house initiated and taken some trial at plant/lab scale & some are the under lab development/

process optimization.

FINISHED DOSAGE FORMULATION FACILITY

Shilpa Medicare Limited - Finished Dosage Formulation Facility is a state of the art manufacturing and testing facility, engaged in manufacturing and distribution of potent Oncology and adjunct therapy drugs- which includes liquid and lyophilized injectables in vials, sterile dry powder injectables in vials, oral solid dosage form (Tablets and hard gelatine capsules) into various regulated and rest of the world markets, including US and EU. The facility is designed for handling of potent Drug Products (including Oncology products or adjutant therapies) in a fully contained manner. Facility is designed to handle potent molecules upto OEL 4 level of containment.

The facility is approved by various regulatory agencies including EUGMP- AGES-Austria, ANVISA, PERU, Argentina, South Africa & MEXICO COFEPRIS.

For USFDA, currently the facility is under Import Alert, however; USFDA has exempted three products from the Import Alert. Shilpa Medicare Unit 4 is distributing these three products (Azacitidine for Injection, Erlotinib Capsules and Cyclophosphamide Capsules), in the US market.

Supplies to Europe are going on uninterrupted!

This facility consists of Oral Solid Block with two commercial scale tablet manufacturing and one commercial scale capsule manufacturing line. There are two blister packing lines and one Bottle filling line.

Three separate Injectable blocks consist of commercial scale manufacturing lines for liquid, lyophilised and powder filled injections. Line 1 and 2 are approved by USFDA and 3rd Injectable combi-line is approved by Europe and rest of the world markets.

Fully automatic packaging lines are available for Injectables in vial presentation and for Oral solid dosage forms in bottles and blister presentations. The Injectable Packaging lines are designed for safe packaging for Onco Injectables.

Serialization (Track and Trace) is in place and implemented as per market requirement for commercial supplies.

Fully equipped Utility Block is equipped with water system (Pre-treatment and Post treatments for generation and distribution of Purified water/WFI/Pure steam), Chillers, Air compressors, Boilers, Diesel generators, HVAC etc.

All world class process equipment are provided with 21 CFR part 11 compliant SCADA systems.

Fully equipped and approved chemical testing Laboratories and Microbiology laboratory are operational with trained and qualified staff.

Commercial presence in various regulated, emerging markets

and domestic markets in injectable and oral solid dosage forms.

Contract Manufacturing

Shilpa Medicare Limited manufactures many products in several types of dosage forms such as tablets, capsules, liquid injection (Aseptically and terminally sterilized), Lyophilized Injectable, etc for various reputed pharmaceutical organisations across the world.

All products are manufactured under the same stringent quality standards for export to USA, EU, EM and Domestic market.

Future Expansions

8 Acre Land available for further expansion. Currently a greenfield project is partially erected for facility expansion of Injectables.

FORMULATION R&D

Research and Development team of Shilpa Medicare is committed in attaining the vision of Shilpa Medicare for affordable Health Care. Over the years R&D has played a vital and significant role in strengthening the company''s competitive advantage in the global pharma sector. API Research and Development, activities of Shilpa Medicare Limited have delivered Oncology and Non-Oncology API''s.

Over the years the Formulation Research & Development has emerged as an important player in delivering, generic equivalents in both oncology and non-oncology formulations (injectables and oral dosage forms).

Formulation Research Center was audited virtually by USFDA in year 2021 and concluded with no observations.

The Formulation Research & Development Team has developed products for the treatment of Androgenic Alopecia and Phase III clinical trials are on - going.

Developed a Novel Oral Disintegrating Films of Blood Thinning Agent. Also involved in development of nutritional supplements.

For the treatment of Intra - Ocular Pressure Ophthalmic formulation with reduced dose and enhanced efficacy, all the pre - clinical phase studies are completed, with approval for clinical phase III trails form Authorities.

Formulation Team has developed a novel injectable formulation for the treatment of Breast, Head & Neck, Prostrate & Lung Cancer reduced adverse events compared to the standard therapy. patches,

Scientist at Formulation Research have developed a Novel formulation for the controlling hemorrhage the product phase III clinical trails completed. The Product will be a boon to save life during accidental injuries.

Formulation Development Group has developed a Novel Injectable formulation for the treatment of Alcoholic Liver Disease and Product is being evaluated as part of Clinical Trails.

On Analytical front, the R&D is equipped with state of the art instruments to evaluate the all kinds of dosage forms. State of the Art infrastructure is built for Extractable & Leachable studies for relevant products. Facility is capable of carrying out analytical method validations for both in-house & customer products. Analytical R&D has capabilities of characterization of API, impurities, excipients and packing components.

Process Development Lab meeting the cGMP requirement for manufacture scale-up batches to optimize the process variables and to manufacture of clinical batches is commissioned in place and ready for execution. New Research and Development Centre is a can as CRO for Non-Onco products for dosage forms like injectables, solid orals, liquid orals, topical, & ophthalmic along with analytical method development and validation support and for CRAMS for Oncology portfolio, along with transdermal patches and oral disintegrating films/ strips of customers.

INTELLECTUAL PROPERTY MANAGEMENT

Shilpa''s success depends on the Company''s ability to secure patents, protect the proprietary information and operate without infringing on the others'' intellectual property rights.

Shilpa Medicare Limited Intellectual Property Management (IPM) team is responsible for building Shilpa''s global generic product pipeline and 505(b)2 NDA pipeline as well as creating, managing and protecting its high value patent estate. Shilpa has a dedicated IPM Team which provides stage wise IP-clearances during product/process development activities and also provides frequent updates and alerts on relevant IP (patent, trademark etc) to R&D scientists for products/process and suggests remedial measures to deal with IP issues. Shilpa IPM team is involved in product selection activity to ensure that right products are selected for development.

Shilpa''s IPM team continues to build its future pipeline of complex products with an established robust portfolio selection process, providing early launch opportunities with intellectual property advantages.

Shilpa''s strengths, across various molecules including oral, Injectable and complex differentiated products, biologics, lie in developing intellectual property in non-infringing processes and resolving complex chemistry challenges. The API Process development is focused for developing and transferring commercially viable, non-infringing and patentable novel API technologies. The development grid selection for API''s is based on difficult-to-make API molecules and novel polymorphic forms of certain API''s for creating value addition.

Shilpa''s IPM Team is involved in patenting of new products,

processes, methods of use, drug delivery systems and medical devices in India, US, EU and other countries with significant market value.

Highlights FY 21-22:

• In FY 21-22, Shilpa has filed one ANDA with PIV certification, where brand company has not initiated litigation within the statutory stipulated timelines.

• In FY 21-22, Shilpa Pharma, Inc. a U.S operating company of Shilpa Medicare Limited ("Shilpa") filed patent infringement lawsuit against Novartis Pharmaceutical Corporation in the United States District court for the district of Delaware seeking relief for the infringement of the US Patent No. 9,266,816 entitled "Fingolimod Polymorph and Their Processes". Shilpa has invested significant time and effort to develop its own IP related to the drug Fingolimod. Shilpa is committed to enforce its IP in the U.S.

• Shilpa is committed to enhance our product profile by strengthening our intellectual property. Our patent portfolio is testament to our commitment. In FY 21-22, Shilpa and its group companies have filed 27 patent applications taking the cumulative total to 491 patent applications in India and other countries. Shilpa received grants for 26 patents during FY 21-22.

Transdermal Patches and Oral Film Manufacturing Plant (Unit VI)

A transdermal patch is medicated adhesive patch that is placed on the skin to deliver a specific dose of medication through the skin and into the bloodstream. Transdermal patches have made their place in global market in past few decades as an alternative to conventional therapeutic for various disease indications. Transdermal patches are widely accepted among physicians and patients due to their non-invasive, pain free and easy administration. In recent years, the growth of transdermal patch market has increased and expected to increase significantly in coming years. Higher investments in research and development could be attributed to the success of transdermal patch market.

Similarly, the thin film drugs were recorded with high market acceptance due to its ease of application and high effectiveness. Moreover, developed economies such as the U.S. and countries in Europe recorded significant sale of thin film drugs. Thin film drugs achieve the desired therapeutic results. Therefore, they have gained attention in the market as a potential treatment option.

Looking to the market potential, facility is designed and build a state of art Manufacturing facility of Transdermal Patch and Oral Films at Dobaspet, Bangalore Rural District. The site is well connected to Bangalore Tumkur highway. This facility shall cater to Global Regulatory Market.

The lay outs confirming to cGMP requirements is finalized along with Utility, Administration and canteen building. The equipment''s are designed to cater both Transdermal Patch and Oral Film Products. A space for future expansion is allocated for capacity increment.

Transdermal Patch and Oral Film Manufacturing Plant status highlights:

> Transdermal Patch and Oral Film Manufacturing Facility Qualification activities completed and execution of filing batches is in the process.

> We have completed execution of Exhibit/filing batches of Nine ODF products which includes strength wise 82 batches. Products are under stability and will be ready to file for different countries in coming months.

> We have files two products in regulated EU market viz. Betahistine ODF in UK-MHRA and Tadalafil ODF in EU. Now UK-MHRA is approved our facility.

> We have done scale up batches of Two TDS products which includes 8 strengths. These products are ready for manufacturing submission batches and are tentatively planned in April-June 23. Two more products are in development pipeline in 2022 which are close to scale up and few more products are initial development pipeline for Global market.

Shilpa Medicare Ltd, Biologics SBU

Background -

The past year witnessed turmoil in the global markets and biopharmaceuticals were not exempt from this turmoil, on account of Covid related disruptions in raw materials and logistics. Shilpa Biologicals Pvt Ltd too, has been affected by extended disruptions in the supply chain that continue to dog the pharma industry currently. While the company has tried to derisk itself from shortages/delays by significantly stocking up on raw materials and single use consumables, this has been a drag on the balance sheet. The disruption in the biopharmaceutical markets is expected to normalise by end of 2022, if there are no further major outbreaks.

The biosimilar programs remain on track and our first biosimilar product is expected to be commercialised in third quarter of FY2022-23, with India and countries in Asia being the first markets. Beyond this, we expect to commercialise a biosimilar every 6-8 months. The company is also entering into tie-ups with leading biopharmaceutical marketing companies in several geographies to ensure the widest possible reach for its products, while focusing on its core - technology development and manufacturing.

Biosimilar Aflibercept received the approval of RCGM for filing for clinical trials in the first quarter of FY2022-23. Clinical trials for the molecule are expected to commence in the coming quarters. This molecule, directed at age related macular degeneration and macular edema, is expected to be a major revenue driver for the company in the coming years.

FY2021-22 marked your company''s first forays into contract development and manufacturing (CDMO) of vaccines and biologics - with tie-ups with DRL, Mylab-SII and Zydus Lifesciences - this has yielded mixed results thus far - the technology transfer and process validation batches being successfully completed, but projects delayed / stalled on account of the ongoing war in Ukraine and constantly changing business environment in vaccines. While this has led to delays in the revenues from the CDMO segment, our successes in the technology area has not gone un-noticed with new potential partners / customers approaching SBPL for its expertise in development and manufacturing of biologics. 2022-23 is expected to be a watershed year for the company in CDMO with 3-4 anchor partnerships bearing fruit. The CDMO market is expected to contribute meaningfully to SBPL''s top and bottomline for atleast the next 3-4 years.

With the viral vector technology platforms used in the vaccines outlasting the pandemic, we expect to use similar technologies in our internal development programs in the near future and view this as a strategic investment for the long term.

Opportunity and drivers -

a) Opportunity in regulated markets - Our single use manufacturing facility, coupled with very strong R&D backing in the area will help the company integrate vertically in biopharmaceuticals - conventional MAbs as well as in cell/gene therapies. Your company expects strong international partnerships in biologics over the next 1-2 years, to drive the business in regulated markets with the development and manufacturing from our site in Belur.

b) Opportunity in RoW markets - Your company is in the process of establishing partnerships with leading pharmaceutical players for biosimilars across different geographies. We believe this coming financial year should see at least 3-4 strategic partnerships being established. Apart from this, your company is targeting

co-development partnerships with global startups -which helps in expanding your company''s footprint globally.

c) Your company is has also received approval from the CDSCO to conduct Human Clinical Trials on its Recombinant Human Albumin (NavAlbumin) - designated as a New Biological Entity (NBE). This is expected to be major revenue driver from 2023-24 onwards - both, through direct sales and licensing opportunities for the company.

The same molecule is also being targeted at the excipient markets where test marketing of the molecule has commenced and expected to see fruition in 2022-23.

Recognising the potential of NavAlbumin as a "Pipeline in a Molecule", the asset has been hived off into a separate subsidiary of SML - Shilpa Biocare Pvt Ltd. Apart from the conduct of the clinical trials, the company is also now setting up a dedicated 165KL fermentation capacity (and associated downstream facility) for NavAlbumin at Kadechur, Karnataka. This world class facility, when commissioned will be amongst the largest globally and is also expected to go on stream in the 4th quarter of FY 2022-23 and designed to produce 15TPA of NavAlbumin, expandable to 30TPA at a later date. This is expected to contribute significantly to India''s Albumin supply gap at competitive prices and as a safer alternative to the Plasma Albumin that is currently on the market. The company is also looking at global partnerships with the India facility serving as a blueprint to expand the Albumin production network across different geographies.

Shilpa Biologicals Pvt Ltd and Shilpa Biocare Pvt Ltd now have 11 biosimilars and one New Biological Entity in their pipeline and is dominated by drugs catering to the autoimmune disorders, Ophthalmics and blood substitute segments, with 6 of the top 10 biologics in its pipeline. The remaining are niche, high margin opportunities catering to high unmet clinical needs.

Your company is forging ahead with clinical trials on 1 nos MAb, 1 nos fusion protein and 1 nos NBE, while 3 others are expected to complete preclinical studies. The combined market size of these three drugs today is about $30 billion. 3 more are expected to be added in the next financial year to the Clinical trial pipeline, with market size of about $17 billion.

We look forward to a challenging, but exciting year ahead!

Polymers Research and Technology (PR&T) Department

Polymer Research & Technology (PR&T) department was established in 2018 at Shilpa Medicare Limited. Based on recent trends in advanced polymer materials in the multidisciplinary fields, the PR&T department focused on polymers for pharma & biomedical applications and specialty polymers for electronics, coatings, automotive, and

petroleum products. Even though end-user applications differ for these polymers, polymer synthetic methodologies, required capabilities, skillsets & facilities are identical for these products. SML is considering the growth of excipients in the generic market, and the shortage of USFDA approved sites in specialty polymers to develop a cGMP process for polymer excipients, which currently exist in the market or pipelines are an excellent opportunity for SML. In addition, SML is working on the development of molecularly-customized stimulated excipients.

PR&T Department has the Head with more than 25 years of experience in the field of Polymer Science and also well-qualified scientists, including five personnel with PhD qualification and ten personnel with Master of Science qualification with industrial experience in respected areas.

PR&T department has the skills and capabilities to operate polymerization techniques at a g to kg scale. The facility has a high vacuum and schleck lines, gaseous monomers cryo-distillation set-ups, high purity inert gas lines and polymerization operating temperatures (-80 to 200oC) facility, dedicated solvent purification stations, catalyst preparation set-ups and storage facilities at different temperatures (-40, -20 & 2-8oC)

Based on the facility and skillset, and capabilities of SML, working for the custom synthesis, technology development projects, cGMP material supply and toll manufacturing.

SML offers well-defined polymer synthesis/ manufacturing projects using classical anionic, conventional and controlled radical (ATRP, RAFT and NMP), ring-opening, addition & condensation polymerization techniques, and polymer functionalization. Our Team has the skillset & capabilities to synthesize polymers with control of molecular weight, molecular weight distribution, composition and microstructure, branching, and chain-end functionality. In addition, our dedicated and skilled technical support experts meet the unique needs of the Client project with the highest quality in the shortest possible time.

SML developed various polymers for pharma and biomedical applications like polybutadiene, polyethylene oxide, and polycaprolactone-based block copolymers by anionic and ring-opening polymerization route. These block copolymers can form self-assembled morphologies and be used in drug delivery applications. And also, SML has the technology of the various molecular weights of linear polyethylenimine based homo and well-defined block copolymers, PLGA with various ratios of polylactide and polyglycolide (50:50, 75:25), Polymer Hydrogels, Poly [2-(N, N-dialkylamino)ethyl methacrylate] with narrow molecular weight distribution.

SML developed the novel process for the anionic hydroxyl-terminated polybutadiene (HTPB), the first indigenous technology. HTPB is an essential resin for high energy solid

propellants. In addition, SML established the in-house technology to manufacture the water-soluble polymers.

Peptide Department

The Peptide Research group, established in 2020 at Shilpa Medicare Limited, specializes in the long-term development of peptide-based drugs for chronic diseases. As an established manufacturer and supplier of key oncology APIs, SML can integrate peptide production, sales, research and development activities for long-term business goals. At present, SML has research and development facilities spread across 2400 square meters, a production area of 1000 square meters, and dedicated analytical capabilities. It plans to build a production base of 12000 square meters with quality system management as per GMP global standards to manufacture various types of peptides under the umbrella of Shilpa Medicare Limited.

The main products are high purity single molecular PEG series derivatives, polypeptide long acting drug side chain, and intermediates (Liraglutide, Semaglutide, Glucagon Hydrochloride, and Calcitonin salmon) and short peptide drugs disulfide bridge (-Desmopressin Acetate, Octreotide Acetate, Vasopressin). Further SML is aggressively working with innovative pharmaceutical companies to build a platform for research and development of polypeptide long-acting drugs, and is committed to building a systematic and diverse long-acting side chain library, establishing molecular blocks of polypeptide long-acting side chains, and providing various solutions for customers to develop polypeptide long-acting drugs. Our company adheres to the concept of "quality first, technology foremost", to provide global customers with the best products and the best service.

The current capabilities are as follows: Acetylation, formylation, acylation Amidation, Biotinylation, Branched peptides, Conjugation to polymers, Conjugation to proteins: BSA, KLH, Cyclization''s, head to tail and side chain (lactam bridge, thioether), Methylation, alkylation, Multiple disulfide bond formation Phosphorylation and sulfation.

The peptide R&D team has human resources that are well-experienced and with the qualification of M.Sc.''s/M. Pharma. Further, the group is well-equipped manufacturing facility with the cGMP compliance for manufacturing generic peptides with combined medium to large-scale peptide production capabilities also include Multiple SPPS reactors, Microwave synthesizer, and preparative HPLC and Lyophilization equipment. Additionally, provides expertise in scaling complex peptides with multiple disulfide bridges or longer sequenced Peptides. At present, SML is ready with the manufacturing process of the Generic Peptides, for instance Desmopressin Acetate, Octreotide Acetate, Liraglutide and Leuprolide Acetate. Our future projections for the generic peptides based on the requirement under process development at our well-equipped R&D facility are Semaglutide, Teriparatide,

Vasopressin Acetate, Plecanatide etc. Fully equipped lab for Analytical support for in process and final API released.

Contract Development & Manufacturing Organization Services: Helping Manage Growing Demand

The rising preponderance of various diseases of different etiologies is a significant factor in the Contract Development and Manufacturing Organization (CDMO) market growth. The rise in cancer incidence is expected to drive the demand for oncology drugs, of which biologics also form a significant share. Furthermore, the rising number of cases of rare diseases is further expected to contribute to the growth of the CDMO market. Shilpa Medicare Limited CDMO is involved in the drug development process, starting from initial development to product manufacturing and providing end-to-end solutions to pharmaceutical and biopharmaceutical companies in the field of across oncology API''s, formulations, peptides, biological and polymer excipients.

SML has state-of-the-art R&D, pilot scale and manufacturing facilities with CDMO capabilities and plans to help address the ever-evolving manufacturing needs of organizations in all these fields. Our goal is to help accelerate drug candidates to clinics as quickly and safely as possible. Our focus will be to establish solutions for streamlining the client supply chain, increasing manufacturing predictability and managing overall risk. Our line of products and services shall be specifically designed to provide the flexibility needed to deal with uncertainty at every stage of the process.

SML-API Division is one of India>s leading oncology API manufacturers and supplies more than 30 oncology APIs, including key products in the portfolio. SML has nononcology and intermediates production capability at the tonnage level. SML-CDMO team is committed to developing high-quality finished products and offering flexibility to serve multiple quantitative and qualitative customer needs. And ensure full compliance with health and environmental regulations. In addition to this, accelerate Client strategic goals with complete transparency. SML has a standardized workflow from lab to clinic to commercial supply and phases appropriate development methodology from early to late phase development.

SML R&D team has a workforce of more than 150 scientists with the qualification of PhD and MSc are working in the lab. State of the art research laboratory and pilot scale facility available to handle full spectrum of chemical reactions with different conditions from gram scale to kg to multi-metric ton. The following are the range of operations.

• High pressure reaction with Pd/Ru/Rd etc.,H2

• Cyanation

• Asymmetric synthesis

• Hydrogenation including asymmetric capabilities

• Cyclopropane Chemistry

• Indole Chemistry

• Nucleoside Chemistry

• Oxidation and reduction reactions

• Use of phase transfer catalyst

Facility including the fully integrated analytical support for in-process control and process safety lab. Expertise in chemo-enzymatic transformation. Dedicated purification teams are available at SML based on the volumes/quantity, like purification of impurities by prep HPLC and flash chromatography. Facilities have dedicated stability stations and a centralized microbiology lab.

Coming to Flow Chemistry & Technology, Sravathi''s subsidiary of SML has unique 3D printed unique flow reactors designed based on the process. There are various reaction capabilities in the continuous flow process and highly exothermic reactions like nitration, oxidation-reduction, and fluorination.

CDMO Business Plan-US

The global Contract Development and Manufacturing Organization (CDMO) outsourcing market size is projected to reach ~USD 160 billion by 2028, from USD 80 billion in 2021, at a CAGR of 10% during 2022-2028 (MarketWatch report, 2022). Small molecule API development and manufacturing for novel chemical entities (NCEs) are expected to be the dominant segments in the CDMO market with a revenue share of ~50% in 2018. Large molecules, such as biologics, biosimilars, cell and gene therapies, are expected to witness the fastest growth over the next 5 years and the Global Biologics CDMO Market is estimated to increase from ~USD 10 billion (2020) to ~USD 19 billion by 2026, registering a CAGR of 10.9%. Among global markets, North America will maintain the lead due to the presence of some of the largest industry players, focus on innovative R&D into new treatments, increasing aging population, prevalence of chronic conditions emergence of new diseases (exemplified by the COVID-19 pandemic), as well as the relative abundance of funding from venture capital for undertaking the high-risk novel drug discovery research effort. High R&D costs, capacity and capability limitations and specialized expertise - all major constraints within pharma companies big and small - make CDMOs excellent external innovation partners to sponsors for expediting the drug manufacturing process while offering significant time, cost, and process efficiencies.

Shilpa Medicare Ltd. can expect rapid growth in the CDMO business due to its high-quality workforce, cost advantage in research and development (R&D) and manufacturing, and expertise across a range of industry verticals. In particular,

SML''s capabilities in drug substance (small molecule and large molecule API) development and manufacturing, and finished drug product development and manufacturing, as well as therapeutic peptides, polymer science and performance materials, makes a compelling case for the Company to become firmly entrenched as a partner of choice for a whole range of companies across pharma and non-pharma segments.

Market strategy

Shilpa is well positioned to become a trusted and truly end to end solution provider given existing infrastructure and continuous capital-intensive investments -

(1) specialization with a strong focus in the high growth oncology space

(2) further strengthening of biologics capabilities and capacities, incl., vaccines

(3) technology focus with addition of niche capabilities such as flow chemistry and AI-DD

(4) planned introduction of new segments such as oligonucleotides

Shilpa enjoys a unique position in this respect - combining regulatory and commercial experience as a pharma company first with successful registrations of >40 complex products globally incl., in the US and EU markets, on one hand and on the services side - its experience in route scouting, synthetic chemistry, process and analytical development, ICH stability, product formulation, manufacturing, fill-finish, labeling and packaging along with AI/ML enabled drug discovery for a truly integrated approach to drug R&D. That combined with a structured program management approach assures customers of full support and high-quality execution from lab to clinic to market.

We will follow a fundamentally partnership driven approach to the market with a focus on brand building, innovation, impeccable delivery, and long-term supply chain assurance as the key pillars of customer engagement and success. We will follow a Deep Science methodology based on deep know-how of clients'' clinical pipelines, chemistry and biology that will position Shilpa as a research-driven CDMO and facilitate the acquisition of net new logos. We will establish a Program Management approach to delivery that transitions clients from a PO based practice to a full ownership and full lifecycle model and assure Speed to Clinic and Speed to Market. We will create a Pharmaceutical Sciences Platform that offers clients a full-value chain solution incorporating integrated CMC and program delivery from lead selection to IND within 10-12 months where technical teams will work across functions to ensure knowledge retention from early to late phase incl., scale up, clinical trial materials and cGMP manufacturing. We will establish a Governance Framework to ensure tight integration with key stakeholders (client sponsors,

technical, clinical, quality, regulatory, commercial heads) with the objective to evolve from a project-based into a long-term value-based partnership and ensuring consistent delivery.

We will develop and execute consistent omnichannel (print and digital) marketing campaigns to evangelize company''s capabilities (website, email, print and video), incl., Japanese language messaging on LinkedIn and other social media channels. We will utilize sales automation and analytics to derive actionable intel and insights on markets and customers (e.g., dormant accounts, underserved territories, BD productivity metrics, win/loss stats, and so on).

Focus areas

(1) Small and large molecule API: The US Food and Drug Administration (USFDA) approved 53 new molecular entities (NMEs) in 2020, of which 40, or 75%, were small molecules. Accordingly, a major focus for the company will be to strengthen its position and penetration in this segment. Spending on cancer therapeutics, across small molecules, biologics, and emerging modalities, such as cell and gene therapies, rose to $164 billion globally in 2020 at an average of 14.3% between 2015 - 2020 (IQVIA report, 2020). As oncology specialists, we will place a significant emphasis on high value niche areas such as highly potent active pharmaceutical ingredients (HPAPIs), anti-cancer and cytotoxic agents.

(2) Vaccines: The COVID-19 pandemic has brought pharma companies face to face with unprecedented challenges in the development of safe and effective therapies under stringent timelines, especially, in vaccines. Contract manufacturers have worked side by side with vaccine producers to meet the tremendous demand and has validated the Company''s ability to jump into action and leverage its expertise to supply vaccine APIs to a number of pharmaceutical companies such as Zydus, Dr Reddy''s and the Serum Institute, thereby playing an important role in India''s public health efforts against the spread of the virus. This achievement highlights a key aspect of the company''s culture - the ability to provide purpose-built and customized solution for a client introducing a new product with unique characteristics and regulatory requirements. The global vaccine market has undergone a radical transformation as a result of the pandemic. There were 394 COVID-19 vaccines in development between discovery and Phase III in 2020 (GlobalData report, 2020). The vaccine market value is estimated to reach $57 billion in 2025, expanding at a CAGR of 7.4% between 2020 and 2025 (IMARC Group, 2020). Currently representing less than 5% of the vaccines market, the contract manufacturing sector has significant room for expansion and biomanufacturing is a thrust area for the company that will continue to see significant traction and revenues from India and regulated markets.

(3) Antibody-drug conjugates (ADCs): An increasing number of ADCs are entering clinical trials and our experience with handling cytotoxic payloads, linker technologies, bioconjugation reactions and antibody development, as well as large in-house manufacturing capacity and the required containment and engineering controls - all under one roof - means we can quickly emerge as a front runner in this space. Given their complexity, more than 70% of ADC projects are outsourced to CDMOs and this is therefore another thrust area for the company. Analysis of companies going public or raising fresh capital indicates nearly 50% of the companies have small-molecule pipelines while 20% are focused on monoclonal antibodies and recombinant proteins and 20% are developing cell and gene therapies. So, while the focus will be on small and large molecules, a future proof strategy will include forward investments into new capabilities in gene and cellular therapies.

(4) Therapeutic peptides: The global peptide CDMO market was valued at ~USD 2.0 billion in 2021, and is expected to double by 2030, with a CAGR of 9.0% during this period (InsightAce Analytic Pvt. Ltd., 2022). Peptide therapeutics play an essential role in addressing unmet medical needs and several peptide drugs have reached the market for diseases such as cancer, multiple sclerosis, diabetes, osteoporosis, chronic pain, and HIV infection. This is a high growth market due to advancements in peptide design technologies, incl., use of bioinformatics and systematic biological approaches, rising R&D investments in peptide-based therapies, and inherent favorable properties such as high specificity and tolerability. Shilpa is extremely well positioned in this space given our proven expertise in development, synthesis, incl., advanced technologies such as microwave synthesis, and formulation of peptide products.

(5) AI/ML led drug discovery: Artificial intelligence (AI) and machine learning (ML) are engendering a paradigm shift in drug discovery R&D and are being adopted by pharma companies to enhance speed to market. The global healthcare AI market is estimated to grow from ~USD 5 billion in 2020 to USD45 billion by 2026 (Markets and Markets, 2020). Applications of AI are being integrated into drug discovery processes with 40% of start-ups exploiting AI to identify new drug candidates, 28% to identify new targets, and 17% for de novo drug design. Shilpa through its subsidiary company Sravathi AI brings the ability to combine deep learning algorithms and domain expertise and the opportunity to position itself as a highly differentiated CDMO to big pharma customers.

(6) Polymers and performance materials: Shilpa brings specialized expertise in specialty polymers from custom synthesis through a range of mechanisms, such as free

radical polymerization, ring-opening polymerization, anionic and cationic polymerization, ATRP polymerization, RAFT polymerization, and condensation polymerization. We bring specialized expertise in PEGylation chemistry (incl., high MW pegylations), application of poly(butadiene)-b-poly(ethylene oxide) for controlled drug release as well as a range of capabilities in development of derivatives (e.g., functionalization of polybutadienes, and other polymers) and can deliver high quality and cost-effective products at any commercial scale from our USFDA approved facilities.

Customer segmentation: Large pharmaceutical companies are consolidating their supplier base to minimize overheads and complexities of dealing with multiple outsourcing partners. Small and medium-sized biotech and biopharma companies are increasingly introducing products into the market on their own and account for a significant proportion of R&D innovation. In 2017, for example, they made up 51% of USFDA market approvals, a trend that is expected to rise in the coming years as they gain experience and successfully bring products to market. Additionally, small, and mediumsized biotech companies do not invest in developing expensive cGMP production facilities in house and makes this the top focus market for us. Big pharma companies were the originators in 28% of USFDA approvals and remain a very attractive market due to the sheer size of their developmental pipelines. Our major focus will together be on the growing segment of small and medium-sized (smid) and specialty biopharma companies.

The buying criteria for big pharma are different than those of the smid pharma incl., for example, access to technology not available in-house in early phase, access to manufacturing capacity and price rationalization for established or mature products, on the other end of the spectrum. We will continue to engage with big pharma along both these lines. Biopharma companies raised $88 billion in new equity in 2020, including sources such as venture capital, initial public offerings (IPOs), and secondary offerings by publicly listed companies (Jefferies report, 2020). This is a 76% increase in the amount raised over the previous year with most of the capital flowing into emerging biopharma companies. In turn, this will fuel growth of CDMOs and clinical contract research organizations (CROs) for pharmaceutical and clinical development of pipeline candidates.

US based CDMO team: Shilpa''s unique and specialized capabilities will be showcased to US-based customers through the recruitment of client facing CDMO business development team with one dedicated specialist BD/sales manager focused on each of the 4 key segments (small molecule API, large molecule API, specialty peptides and therapeutic peptides). These individuals will bring specialized experience in their respective areas and will be based in the key biopharma hubs

such as NY, NJ, PA, MA, NC on the East Coast. They will bring an existing network and the ability to convert relationships into high value RFPs and realized revenues of USD 2-3 Million in Year 1 and ramping up to USD4-5 million in Year 2 and thereafter build a steady growth YOY. The BD team will engage net new customers through one-on-one meetings on site at the customer''s facilities as well as through face to face or virtual meetings with prospective customers at several major industry/trade shows such as CPhI, DCAT, BIO, and others. We will also engage senior industry consultants as advisors who will enable reach into C-suite leadership among Fortune 500 companies and establish strategic long-term relationships that provide steady year on year multi-million dollar revenues. With the entire team in place, revenue estimates for the CDMO business for 2022-23 will be ~USD 10 million.

Conclusions: Shilpa Medicare Ltd. is extremely well positioned to leverage its excellent track-record, technical expertise, qualified workforce, and state-of-the-art infrastructure to build a robust US business with a singular focus on trust, reliability, consistency, and delivering value to customers through innovation.

CDMO

The global market for pharmaceutical contract manufacturing represents one of the fastest growing markets and it is expected to proffer enormous opportunities in the near future. Contract manufacturing contributes significantly to the overall outsourcing market, owing to its popularity and widespread adoption by pharmaceutical companies.

Contract Development & Manufacturing organization (CDMO) has evolved as a strategic option, offers the certain benefits such as cost reduction, improved product quality, product portfolio and reduction in time to market.

At Shilpa Medicare Ltd (SML), we offer tailor-made CDMO services as per customer requirements for both Niche small pharma & global pharma companies. We aim to serve generic & innovator customer from early development to cGMP manufacturing support. We are Mainly focused on End to solution & support for new chemical entities development and cGMP supplies for clinical and commercial applications.

SML is having expertise & state of the art facilities for HPAPI, Peptide, Polymers, Formulations (Oral, liquid, Parenteral, Topical etc.) and Biologics which is audited & approved by all the major regulatory agencies. SML HPAPI and Peptide facility can develop and manufacture molecules up-to occupational exposure band (OEB) five. SML integrated supply chain and inhouse capabilities are well poised to solve toughest problems for Pharma, Bio-Pharma, Biotech and non-Pharma customers which make us a partner of choice in CDMO market place.

SML has proven track record in successful CDMO operations in past, supporting various global programs and we aim to

establish SML as global CDMO brand for

1. One stop CMC solutions for preclinical, clinical and commercial outsourcing services of both Drug Substance and Drug Product for Small Molecules and Biologicals.

2. Complex API and high potent API solutions to Innovator Pharma and Biotech companies.

3. Specialised Chemistry one stop solutions from development to cGMP supplies for peptides, Polymers, Flow Chemistry.

4. Integrated and standalone services to ADC and Pegylation customers for Chemistry (payload, linker, Bioconjugation), Biology and Formulations.

5. Standalone Formulation solutions to Innovators and Generic Pharma in Novel therapeutics, 505(b)2, NDDS, Complex peptide injectable, OSD, Transdermal and oral suspension areas.

6. End to end solutions to Biologics Customers in Biosimilars, Novel Biologics, Vaccines, Gene and Cell therapies areas

API Business Strategy

The global API industry was valued at around USD 177.05 billion in 2021, and it is expected to reach USD 258.60 billion by 2027, of which merchant API accounts for 40%. Specialty small molecules represents close to 13% by value of this.

Shilpa Medicare is active in the USD 9Bn merchant API market with focus on small specialty molecules. Outsourcing by pharma companies is showing an increasing trend and Shilpa is focusing on the small molecule specialty API market that is typically characterized by complex manufacturing and high entry barriers.

The global merchant API market is expected to grow at 7.50% p.a driven by strong outsourcing trends and ongoing genericization driven by patent expires. Shilpa''s revenue is generated mainly with off patent drugs. The Indian API industry is expected to expand at a CAGR of around 8.6% during 202024 signifying its future potential and global importance.

As of January 2022, the top 2 therapeutic areas with largest number of R&D products are Anticancer and Immunomodulators . Anticancer and immunomodulators has 4275 products under R&D and represent 42% of R&D Basket globally.

The Indian pharma industry has shown remarkable proactiveness in ramping up production of medicines and vaccines during the pandemic period.

The pandemic highlighted numerous opportunities in raw materials and Intermediates for the manufacturing sector and hence capacity building in this segment .

The Government''s Production Linked Incentive ( PLI ) scheme can significantly strengthen domestic Pharma manufacturing .

Shilpa with its technological capabilities, process efficiencies, high quality manufacturing standards and facilities meeting regulatory standards of all major markets, occupies a sweet spot in the API industry. With global spending on treatment for cancer on the rise , Shilpa has a role to play in offering cost competitive oncology APIs to the global generic industry and thereby try and reduce the cost for patient treatment. The company focusses on sustainable growth through continuous cost reduction measures. With 9 dedicated oncology manufacturing blocks and multi product capability, we are ready to meet the growing demand for oncology APIs.

While we continue to develop new oncology APIs to meet the demand for off patent products , we are also now developing a range of non oncology API molecules to cater to the growing outsourcing demand from India. 7 production blocks cater to this segment .

Continuous supply disruptions from China , either due to pollution related issues or the recent pandemic , has induced global generic companies for mitigating supply chain risks associated with one country source, to look at India in their "China " strategy for their API requirements.

Shilpa plans to increase capacities to meet this increasing demand , backward integrate to produce our own key starting materials and use advanced process flow chemistry techniques to be cost competitive and gain global market share. We plan to introduce at least 5 non oncology API molecules every year.

Shilpa is investing heavily on API R&D (around 12% of sales) and augmenting its capabilities across various API segments (Peptides , niche oncology , Intermediates). The API business is expected to grow on account of increased capacity and backward integration which will lead to operational efficiencies. The commercialization of Peptide block would also lead to incremental revenues.

The genericization of a large number of drug products, rising number of small molecules in Phase II clinical trials, increasing tendency by big pharma to outsource development & manufacturing activities and increasing healthcare spend by most Governments , the demand for synthetic APIs is here to stay and for the moment it is advantage India.

Globally the synthetic production process which was largely employed is slowly giving way to biotech production process. HPAPIs have progressed into important treatment areas such as cancer. The growing acceptance of these compounds and the increase in R&D for the development of newer HPAPIs will drive the market growth considerably.

The European active pharmaceutical ingredients market was valued at $49.52 billion in 2021 and will grow by 7.3% annually over 2021-2028, with Germany, France, Italy, Spain & UK being the major markets.

Shilpa has the requisite approval from European Health

Authorities to sell APIs in the EU markets. With 16 valid CEP certifications and 45 active US DFMs and more on the anvil , Shilpa is well poised to grow business in this part of the globe. A strong pipeline of APIs at various stages of development will contribute to the growth of business year on year. The company maintains the most stringent quality standards for all its products.

Amongst the emerging markets , there is a sharp focus on Brazil & Russia .

Recently concluded audit by the Russian Health Authorities will result in strong momentum in this market, once approvals are in place.

Ability to meet the CADIFA guidelines will enable traction in Brazilian market.

Our wide range of APIs , early entry opportunity for customers due to non infringing chemistry and supply security, will position Shilpa as a preferred partner for API supplies. Our long standing relationships with existing partners, whom we have supported in establishing leading market positions, will help enhance our share of business with them.

With a large number of products in Shilpa''s API portfolio getting genericized between 2021 and 2025, we expect business from commercialisation of these molecules to sustain our growth momentum. The addition of new products into our non oncology portfolio will add to the pace of growth. Overall, the growth outlook for the API business remains healthy.

Attaining cost leadership , product differentiation, capacity augmentation, backward integration, customer centric approach form the pillars of our business strategy.

Domestic market overview

> Indian Oncology Market was valued at INR 4500 Crs. as of June MAT 21 with a growth rate of 4.96% over June MAT 20.

> The market reported a 4-year CAGR of 11% (2017-2020)

> Increased competition

> Price erosion in generics

> Customer oriented business

> Strategical approach towards potential doctors

> Prescription focused marketing

SUBSIDIARIES. ASSOCIATES & IOINT VENTURES

The Company has direct and step down subsidiaries in India and overseas. Consolidated financial statements have been prepared by the Company in accordance with the requirements of Ind AS 27 issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of the Companies Act, 2013 ("the Act").

As per the provisions of Section 136 of the Act, separate audited financial statements of subsidiaries are placed by the Company on its website at www.vbshilpa.com . Statement containing the salient features of the financial statement of subsidiaries and associate company for the year ending March 31, 2022 in Form AOC-1 (Pursuant to first proviso to Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) is attached at the end of the notes to "Accounts to Financial Statements.

Koanaa Healthcare Canada Inc

Koanaa Healthcare Canada Inc was incorporated on April-24th-2020. The Senior Management implemented the B2B strategy model (out-licensing products to partners).

SHILPA THERAPEUTICS PRIVATE LIMITED (STPL)

Shilpa Therapeutics Pvt. Ltd. situated at Cherlapally, IDA Phase-III, Medchal-Malkajgiri District, Hyderabad, Telangana, India - 500051, a progressive novel drug delivery company with an international outlook is dedicated to the development and commercialization of innovative and patient compliant novel drug delivery systems such as fast disintegrating oral strips.

Sravathi AI Technology Pvt Ltd

Sravathi AI Technology Pvt Ltd is established its Research & Development facility in Rajajinagar, Bengaluru-10 has completed first financial year as company.

• Developed entire capabilities for Drug Discovery using Artificial Intelligence and Molecular Modelling In-silico techniques. This reduces discovery of Drugs time order of magnitude.

• Started Sravathi own Drug Discovery programs and got some promising initial results (binding energy) for two programs.

• Developed entire capabilities for Drug Repurposing in this year and validated program.

• Further strengthened multi-disciplinary team consists of all required disciplines. Present team strength is ~30.

• Developed several Platforms for Reactions using Artificial Intelligence program. Namely, Route of synthesis and prediction of reaction for major product and impurity identification.

• Developed entire platform for Reaction Yield prediction and Yield optimization platforms. Web interfaces for all of these platforms also developed internally. This platform unique and first in the world. Experimental validation is in progress.

• Developed Formulation platform, mainly for Solubility predictions.

• Generated first revenues in this financial year through external customer.

• Signed CDAs with >10 customers in this financial year.

FTF Pharma Pvt. Ltd.

Founded in 2012, FTF Pharma is the trusted, well-known name amid various big and medium sized pharmaceutical players across the globe as CRO. FTF Pharma now employs about 80 employees and owns a state-of-the-art R&D centre in Ahmedabad, Gujarat in India spread into 40,000 square feet area with dedicated FnD labs, AR&D labs and facility for handling highly potent drugs, all equipped fully with modern equipment & sophisticated instruments.

As a CRO, FTF focuses on the development of high valued first-to-file generic products covered by ANDAs, complex generic products & innovative new drug products covered by 505b2 applications. FTF''s interest lies predominantly in the development of products comprising small molecules & peptide molecules. Since its inception, FTF has developed & partnered more than 100 products for major regulated markets (such as US, Europe, Canada) & RoW markets. FTF''s development partners are all front end generic players from all over the world that makes FTF a leading CRO globally and partner of choice.

FTF strongly believes in adding value to its innovations through generation of IPRs of proprietary technologies. And therefore, so far, FTF has filed more than 75 patent applications in different jurisdictions and earned 3 US patents, 1 EU patent & 2 Indian patents covering FTF''s 505b2 oral & parenteral drug products.

Having its expertise in the development of different types of solid, liquid, lyophilized & topical dosage forms, FTF is also working on new-edge technologies such as Nano-emulsions, SMEDDS, micellar formulations and lipid nanoparticles. FTF''s expertise lies largely in the development of tablets, hard gel capsules, low & high volume parenterals (ready-to-use/ dilute solutions, suspensions), lyophilized solids, oral thin films, strips, patches, prefilled syringes, ophthalmic solution & drops, coated/uncoated/sugar coated/film coated pellets/ beads in capsules, matrix dosage forms, orally disintegrating tablets, IR/ER/PR/SR/DR/MR dosage forms, bi-layered tablets, and combination products.

Continuously striving towards its mission & vision, through all these years, FTF has been successfully offering following services: Research and Formulation Development,

Technology transfer & Contract Manufacturing, Non-infringing developments, Regulatory filing strategies, and BA/BE & clinical support.

After acquisition by Shilpa Medicare Ltd., FTF is all set to achieve new milestones in its growth journey. FTF has increased footprints in US, Europe, Canada, China and other emerging markets.

REVA MEDICARE (P) LTD

The company achieved its goals for the financial year on its

sales and BD plan. The Market access has been structured into formidable projects across verticals with business buildup across regulated and the emerging markets.

There is a working plan for Biosimilars with Oncology & Diabetics as the core drivers, the team is confident to layout its implementation in year 2022-23. At 71% oncology is still the leading class followed by Anti-diabetics with 64% and Immunology being the next. The focused regions are; Europe, Japan and selective emerging nations. Covid and the Pandemic played its toll for markets of North Africa, Asia which has resulted in dampening of sales and delay in payments. As a company we hold no debt nor any receivables payable against sales. Also, we were hit by political turmoil in Afghanistan thus hampering shipments of medicines against tenders in pipeline with Ministries of Interior & Health for the country.

SHILPA PHARMA INC., USA (Wholly Owned Subsidiary)

Shilpa Pharma Inc. has been promoted with the vision to register, create and develop marketing network for the products of the Company in North American countries, particularly aimed at USA and also to co-ordinate with the USFDA authorities directly on a regular basis for obtaining approvals. The business plan of the Company in USA has been enumerated above.

KOANAA HEALTHCARE SPAIN (Wholly Owned Subsidiary)

S.L., Headquarters of Shilpa B2B Europe, became active in April 2020.

Currently, there are three executives (Vice President, and recently incorporated, Head of Business Development and Head of Regulatory Affairs), employed and located near Barcelona, Spain.

The main business model for Europe is a B2B License and Supply model, in which we out-license our high-quality Dossiers to European end customers who will market the products, supplied by Shilpa, under their own brand name.

Our aim is to become the preferred partner of choice, by providing a high-level quality of service and information, combined with a continuously growing strong, competitive and innovative portfolio.

KOANAA INTERNATIONAL FZ-LLC

Koanaa International FZ-LLC is a Rakez Free Zone Limited Liability Company FZ-LLC in United Arab Emirates.

Koanaa International is offering its services to Africa and Middle East where they provide sales and marketing information. The Company also offers analytical data in pharmaceutical for Africa and Middle East countries.

The Company also manage the healthcare Companies specific project like sales and distribution channel, Pharmaceutical Research and development, supply chain management and all

the Pharmaceutical companies related project.

The Company also offers the consultancy services for appointing distributor channel and poestablishing a company sales and distribution in Africa and Middle East

SHILPA BIOCARE PRIVATE LIMITED (A WHOLLY OWNED SUBSIDIARY)

Shilpa Biocare Private Limited is a 100% subsidiary of Shilpa Medicare Ltd, & is establishing a state of art Manufacturing Facility for Recombinant Human Albumin manufacturing.

This Product is developed by Shilpa Biologicals as a novel biological entity - a program part funded by the Department of Biotechnology, Gol, through its BIRAC arm. The program was also recognized as amongst the most innovative by DBT in 2012 and again in 2014/15.

While the estimated Global demand is 1000 MT per annum for Albumin, hardly a fifth of this requirement is being catered to currently. The current market for Albumin is $1 billion based on the current supply condition

Having recognised this as a important potential business opportunity, The Company has invested in developing a synthetic route for generation of Human Albumin (outside of the human body) and came up with a technology that has been scaled up

The company has global patent granted for this technology and intends to pursue this vigorously.

The company with permission from the RCGM (regulatory body) and DCGI, is conducting the clinical studies on the said Product . The European Union has also waived off a part of the clinical trials required to release the protein on the market after having gone through the data generated so far. Hence the company is setting up a large scale production unit for its recombinant Human Albumin at Kadechur Industrial Area.

The clinical studies data & approval will be obtained in the ist quarter of 2022. There after the company will cater to global demand for Albumin from this site - thus keeping Shilpa Biocare on the Global Biotechnology map.

SHILPA PHARMA LIFESCIENCES LIMITED (A WHOLLY OWNED SUBSIDIARY)

Shilpa Pharma Lifesciences Limited (Formerly known as Shilpa Corporate Holdings private Limited) is a wholly owned Subsidiary Company of Shilpa Medicare Limited.

The Company has purchased the Active Pharmaceutical Business of Shilpa Medicare Limited consisting of Unit-1 and Unit-2 situated at Raichur, Karnataka via Slumpsale which is complete and effective from the Closing hours of 30 June 2022.

SHILPA LIFESCIENCES PRIVATE LIMITED.

This is a Step down Subsidiary of Shilpa Medicare Limited, currently the Company is setting up a project for manufacturing intermediates

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business carried out by your Company. However, In order to build an independent business of API and to rationalize the corporate entities of the group, the Shareholders of the Company have approved the Slump sale of Active Pharmaceutical Ingredient (API) Business of the Company consisting of Unit-1 and Unit-2 situated at Raichur, Karnataka to its wholly owned subsidiary ''Shilpa Pharma Lifesciences Limited. the Company, has duly executed the Business Transfer agreement with Shilpa Pharma Lifesciences Limited (Formerly known as Shilpa Corporate Holdings Private Limited) which is complete and effective from 30 June 2022, closing of business hours.

DIVIDEND:

Your Directors recommended a dividend of '' 1.10 Per Equity Share of '' 1 /- each (i.e. 110 %) for the FY 2021-22, absorbing an amount of '' 954.82 Lakhs from the profits of FY 2021-22.

The Dividend Distribution Policy of the Company is set out as Annexure-2 and the same is uploaded on the Company''s website at https://www.vbshilpa.com/pdf/Dividend-Distribution-Policy.pdf.

SHARE CAPITAL:

The paid up share capital of your Company is '' 8,68,01,898/-(Rupees Eight Crore Sixty Eight Lakhs One Thousand Eight hundred and Ninety Eight) divided into 8,68,01,898 equity shares of '' 1/- each.

During the year the Company has allotted 52,75,000 Equity Shares of Re.1/- each by way of Preferential Allotment pursuant to the Provisions of Companies Act, 2013 and SEBI Regulations.

Pursuant to the provisions of section 124 (5) of the Companies Act, 2013 read with the IEPF Rules, the Company has transferred 79813 shares, belonging to the shareholders who did not continuously claim dividend for seven years from the financial year 2013- 14 to IEPF Account, the details of which are placed on the website of the Company.

LISTING OF EQUITY SHARES:

The securities of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Further, the Company has no equity shares carrying differential rights.

TRANSFER TO RESERVES:

During the financial year under review, your Company has not transferred any amount to the general reserve.

DIRECTORS OR KEY MANAGERIAL PERSONNEL:

Mr. Om Prakash Inani (DIN No.01301385), Non-Executive Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Kalakota Sharath Reddy (DIN: 03603460), Whole Time Director of the Company, whose tenure of 3 yrs is about to complete, being eligible, offers himself for reappointment.

CHANGE IN DIRECTORSHIP

During the year Mr. Rajender Sunki Reddy & Mr. Pramod Kasat-Independent Directors of the Company ceased from the office of Directorship w.e.f 28 September 2021 due to completion of their tenure. In place of the retiring Directors Mr. Hetal Madhukant Gandhi & Mr. Arvind Vasudeva were appointed as Independent Directors in the Company for a period of 3 years.

Further, Mr. Naresh Patwari & Mr. Piyush Goenka ceased from the office of Directorship of the Company w.e.f 02 February 2022 & 07 February 2022 due to their pre-occupancy.

Dr. Kamal K Sharma & Dr. Anita Bandyopadhyay were appointed as Additional Directors w.e.f 01 July 2022 & 11 August 2022 respectively.

There appointment as Independent Directors for a period of 3 years is subject approval of members of the Company at the ensuing Annual General Meeting

CHANGE IN KEY MANAGERIAL PERSONNEL

Mr. Alpesh M Dalal was appointed as Chief Financial Officer of the Company w.e.f. 31 May 2021. Mr. V V Krishna Chaitanya resigned from the office of Company Secretary & Compliance Officer w.e.f 16 March 2022 & Ms. Ritu Tiwary was appointed a Company Secretary and Compliance officer of the Company w.e.f 23 May 2022.

NUMBER OF MEETINGS OF THE BOARD:

During the financial year, Nine Board Meetings were held as detailed below which are in compliance with the provisions of the Companies Act, 2013, the Listing Regulations and Secretarial Standards on Board meeting:

1. 31 May 2021

2. 17 July 2021

3. 14 August 2021

4. 02 September 2021

5. 14 October 2021

6. 29 October 2021

7. 12 November 2021

8. 08 February 2022

9. 29 March 2022

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149:

The Independent Directors have submitted their declaration of Independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS:

Statutory Auditors:

M/s. Brahmayya & Co., Chartered Accountants (Firm Registration No. 000513S), were appointed at the 30th Annual General Meeting as the Statutory Auditors of the Company for a term of five years to hold office till the conclusion of the ensuing 35th Annual General Meeting.

The Board of Directors at their Meeting held on 11 August 2022 recommended appointment of M/s. Bohara Bhandari Bung & Associates LLP, Chartered Accountants, Raichur FRN:008127S/S200013, as the new statutory auditors of the Company to hold office for one term of 5 years commencing from conclusion of the ensuing 35th Annual General Meeting up to the 40th Annual General Meeting of the Company. The Company has received a certificate from the M/s. Bohara Bhandari Bung & Associates LLP, Chartered Accountants, to the effect that their appointment, if made, shall be in compliance with the provisions of Section 139 and 141 of the Companies Act, 2013. Accordingly, the Board proposes appointment of M/s. Bohara Bhandari Bung & Associates LLP, Chartered Accountants, to hold office from the conclusion of this AGM until the conclusion of the 40th AGM of your Company Necessary resolution has been provided in the AGM notice seeking approval of shareholders.

Cost Auditors:

The Board, on the recommendation of the Audit Committee, has appointed M/s. V.J. Talati & Co., Cost Accountants, for conducting the audit of cost records of various segments of the Company for the financial year 2022-23. As required under Section 148 of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, a resolution is being placed at the ensuing Annual General Meeting for ratification of remuneration payable to the said Cost Auditors.

Secretarial Auditors:

Mr. D.S. Rao, Practicing Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2021-22, as required under Section 204 of the Companies Act, 2013 and Rule 9 framed thereunder. The Secretarial Audit

Report, in form MR-3, for the financial year 2021-22 forms part of this Report as Annexure - 3.

The Board on the recommendation of the Audit Committee has appointed Mr. D S Rao, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2022-23.

Internal Auditor:

Pursuant to the provisions of section 138 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has appointed M/s M. Bhasakara Rao and Co., Chartered Accountants as Internal Auditors of the Company for the financial year 2022-23.

COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMERS:Statutory Auditors:

As there is no qualification, reservation or adverse remark in the reports given by the Statutory Auditors, your directors need not provide any clarification on the same.

Secretarial Auditors:

As there is no qualification, reservation or adverse remark in the reports given by the Secretarial Auditors, your directors need not provide any clarification on the same.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO:

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure - 4

RISK MANAGEMENT POLICY:

Pursuant to Regulation 21(4) of SEBI (LODR) Regulations, 2015, the Board of Directors have formulated and implemented a Risk Management Policy, which identifies various elements of risks, which, in its opinion, may threaten the existence of the Company and contains measures to mitigate the same. The Risk Management Policy of the Company is hosted on the Company''s website: www.vbshilpa.com.

A Risk Management Committee has been constituted as per the terms of Regulation 21 of SEBI (LODR) Regulations, 2015 to monitor and review the major risks faced by and the risk management plan of the Company periodically.

During the year two Risk Management Committee meetings were held on 23 December 2021 & 28 March 2022

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY:

In terms of the provisions of Section 135 read with Schedule VII to the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, a Corporate Social Responsibility Policy (CSR Policy), indicating the activities to

be undertaken by the Company, as framed by the Corporate Social Responsibility Committee (CSR Committee) has been adopted by the Board of Directors. Accordingly, the Company has transferred the CSR amount to ''Shilpa Foundation'', a public charitable trust taking up various social public causes of the society in and around Raichur, Karnataka and the activities of the said trust are covered under the Schedule VII of the Companies Act, 2013. A report on the CSR activities, as required under Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, is enclosed herewith as Annexure - 5.

The Company has constituted the CSR Committee for monitoring the activities undertaken by the Company in this regard. The CSR Policy of the Company and other details as required is are placed on the Company''s website at https:// vbshilpa.com/pdf/CSR Policy.pdf

NOMINATION AND REMUNERATION POLICY:

A Committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of Section 178, Schedule IV of the Companies Act and Regulation 19 of SEBI (LODR) Regulations, 2015. It has been entrusted with the task to recommend to the Company the prospective directors and KMP who possess the requisite skills and positive attributes as specified in the Nomination and Remuneration Policy.

The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy which recommends the guidelines based on which the annual performance of the Independent Directors, Board and Individual Directors is carried out by the Board.

The Nomination and Remuneration Policy of the Company is placed on the Company''s website at https://vbshilpa.com/pdf/ NominationRemunerationPolicy.pdf

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Board of Directors have carried out an annual evaluation of its own performance, as well as that of its Committees and individual directors pursuant to the provisions of the Sections 134 and 178 read with Schedule IV to the Companies Act, 2013. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties by the Board of Directors, independence governance, ethics and values, attendance and contribution at meetings etc.

The performances of the Independent Directors were evaluated by the Board after seeking inputs from all the directors on the effectiveness and contribution of the

Independent Directors.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members based on the criteria such as the composition of Committees, effectiveness of Committee Meetings, etc.

The Board reviewed the performance of the individual directors on the basis of criteria such as the contribution of the individual director to the Board and Committee Meetings, like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in Meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of the Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and NonExecutive Directors. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Board and the management that is necessary for the Board to perform its functions reasonably and effectively. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors.

FINANCIAL STATEMENTS:

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Standalone and Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of this Annual Report.

In accordance with Rule 8 (1) of Companies (Accounts) Rules 2014, the highlights of performance of the Subsidiaries, Associates and Joint Ventures and their contribution to the overall performance of the Company have been detailed in Annexure - 1 enclosed to this report.

Further, the annual accounts of all the subsidiary companies are available on the Company''s website -www.vbshilpa.com.

Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations.

Various Audit systems in the Company monitor and evaluate the efficacy and adequacy of the internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports, the concerned department/ unit undertakes corrective action in the respective areas

and strengthens the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries, Code of Conduct for Regulating, Monitoring and Reporting Insider Trading and such other procedures for ensuring orderly and efficient conduct of its business for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

DETAILS OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR UNDER REVIEW:

The following instances took place during the year under review which need to be reported in accordance with Rule 8(5) (iv) of Companies (Accounts) Rules, 2014:

a. During the year, two new Companies were incorporated during the year i.e., Vegil Labs Private Limited and Shilpa Lifesciences Private Limited. A project for Manufacturing of Intermediates is being set up in the Shilpa Lifesciences Private Limited & Vegil Labs Private Limited is holding investments in Sravathi AI technologies Private Limited & Auxilla Pharmaceuticals & Research LLP as on 31 March 2022.

b. Your Company has filed a Second Stage petition with National Company Law Tribunal for effecting the amalgamation with INM Technologies Private Limited being the wholly owned subsidiary, The Company is awaiting for the final order of the Hon''ble tribunal in this regard.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors'' confirm that:

• In preparation of annualaccounts for the financial year ended 31 March 2022 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

• The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2022 and of the profit and loss of the Company for the year;

• The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act

for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• The Directors had prepared the annual accounts on a ''going concern'' basis;

• The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

• The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

In accordance with Section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), a copy of the Annual Return of the Company has been placed on the Website of the Company at https:// www.vbshilpa.com.

OTHER DISCLOSURES:

Committees of Board:

Your Company has the following committees, namely:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The constitutions of all the committees are as per the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The details of the constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT:

Regulation 15 of SEBI (LODR) Regulations, 2015 is applicable to your Company and as such the details as specified in Schedule V(C) of SEBI (LODR) Regulations, 2015, with regard to Corporate Governance Report including Practicing Company Secretary''s Certificate on compliance with the conditions of Corporate Governance specified in Schedule V(E) of SEBI (LODR) Regulations, 2015 as well as a certificate as specified in Schedule V(C)(10)(i) of SEBI (LODR) 2015 forms part of the Annual report as Annexure- 6.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34 read with Schedule V (B) to the SEBI (LODR) Regulations, 2015 is annexed hereto and forms part of this Annual Report.

VIGIL MECHANISM:

In pursuance to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a vigil mechanism for directors and employees to report genuine concerns has been established. The Policy on vigil mechanism i.e. Whistle Blower Policy may be accessed on the Company''s website at https://www. vbshilpa. com. The policy provides for a framework and process for safeguard against victimization of director(s) or employee(s) or any other person who avail the mechanism and allow direct access to the Chairman of the Audit Committee in exceptional cases. Your Company adheres to uncompromising integrity in conduct of its business and strictly abides by well-accepted norms of ethical, lawful and moral conduct. It has zero tolerance for any form of unethical conduct or behaviour. Directors and employees are at liberty to report unethical practices.

REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL/EMPLOYEES:

Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure-7.

PARTICULARS OF EMPLOYEES:

Statement of employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure - 8 to the Board''s Report.

COST RECORDS AND COST ACCOUNTS:

The Company is maintaining cost records and accounts as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) ACT, 2013:

Your Company has always provided a safe and harassment free workplace to every individual working in its premises through various policies and practices. Your Company always endeavors to create an environment that is free from discrimination and harassment, including sexual harassment. Your Company has been actively involved in ensuring that the clients and all the employees are aware of the provisions of the POSH Act, 2013 and the rights available to them there under.

Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to

• Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

• No frauds were reported by the auditors during the year under review.

• There are no materialchanges and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report.

• No applications were filed before or any proceedings pending under the Insolvency and Bankruptcy Code, 2016

• The details of Difference between valuation done at the time of one time settlement and the valuation done while taking loan from the banks and financial institutions along with the reason thereof - Not Applicable.

The Company has complied with Secretarial Standards, i.e. SS-1, and SS-2 relating to Meetings of the Board of Directors and General Meetings respectively, issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their wholehearted support. Further, Your Directors wish to express their deep gratitude to all the employees of your Company for their continued dedication, significant contributions, hard work and commitment towards achieving the objects of the Company.

For and on behalf of the Board of Directors Shilpa Medicare Limited

Sd/-

Omprakash Inani

Chairman DIN: 01301385

Place: Raichur Date: 11 August 2022

redress the complaints received regarding sexual harassment. Your Company did not receive any complaints during the period under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the loans granted, guarantees given, securities provided and investments made during the year under review, as covered under Section 186 of the Companies Act, 2013, are detailed in the notes to the financial statements which may be read as a part of this Report.

DEPOSITS:

During the year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

RELATED PARTY TRANSACTIONS:

Related Party Transactions entered into during the financial year under review are disclosed in Note No. 45 to the Financial Statements. These transactions were at an arm''s length basis and in the ordinary course of business. There were no materially significant Related Party Transactions with the Company''s promoters, directors, management or their relatives which could have had a potential conflict with the interests of the Company. Form AOC-2, containing a note on the aforesaid Related Party Transactions is enclosed herewith as Annexure - 9.

Related Party disclosures as per Schedule V of SEBI (LODR) Regulations, 2015 are enclosed herewith as Annexure - 10.

The policy on Related Party Transactions, as approved by the Board may be accessed on the Company''s website https:// www.vbshilpa.com/pdf/related party policy.pdf

BUSINESS RESPONSIBILITY REPORT:

Pursuant to Clause 34(2)(f) of the SEBI (LODR) Regulations, 2015 Business Responsibility Report, being applicable to the Company, forms part of the Board Report as Annexure - 11.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Issue of equity shares with differentialrights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme.


Mar 31, 2018

To,

The Shareholders,

The Directors have pleasure in presenting herewith the 31st Annual Report on the business of your Company together with the Audited Accounts for the financial year ended 31st March, 2018.

FINANCIAL SUMMARY (Rupees in Lakhs)

Financial Year

Financial Year

PARTICULARS

2017-18

2016-17

Standalone

Consolidated

Standalone

Consolidated

Operating Revenue

74,394.60

79,153.39

73,789.90

78,381.25

Other Income

2,331.53

2,167.76

1,988.32

1,967.13

Profit before Interest, Depreciation & Tax after exceptional items

20,238.43

18,384.11

19,798.86

18,641.00

Interest

212.69

266.12

279.46

313.47

Depreciation

3,277.70

3,722.21

2,665.52

3,064.49

Net Profit Before Tax

16,748.51

14,395.78

16,853.48

15,263.04

Provision for taxation

a. Current Tax

3,494.19

3,495.73

3,535.05

3,579.93

b. Less: MAT credit entitlement

(757.51)

(757.51)

(664.20)

(664.20)

c. Deferred tax

687.95

652.34

1,237.80

1,288.14

Profit after Tax

13,323.90

11,005.22

12,744.83

11,059.17

Share of Profit/(Loss) in Associate/Joint Venture

-

(719.03)

-

(613.81)

Share of profit ( Loss) in Non-Controlling Interest

-

238.08

-

312.46

Other comprehensive income (Expenses) (Net of taxes)

108.29

109.55

(182.60)

(182.60)

Total Comprehensive income

13,432.19

10,633.74

12,562.23

10,575.23

REVIEW OF OPERATIONS:

During the year under review the Company reported standalone operating revenues of Rs. 74,394.60 lakhs as against Rs. 73789.90 lakhs and Net Profit of Rs.13432.16 lakhs as against Rs. 12562.20 lakhs in the previous year.

Continuous focus of the management on new line of products, research & development and strategic expansion of production/ development facilities has been yielding good results in terms of high margins. Expansion of production facilities is as per schedule. Considering the fast developments in the pharma industry the Company has started focusing on development of new process and new products.

API FACILITIES

Shilpa Medicare has two API plants with world class state of art facilities at Raichur, supported by strong R&D team backed with IPM intellectuals and efficiently managed by competent operational team involving production, engineering, Quality Control, Quality Assurance & Regulatory Functions. The units are cGMP compliant and are approved by national & international regulatory bodies like USFDA, EU, Korean FDA, Cofepris-Mexico, TPD-Canada, PMDA-Japan and TGA-Australia.

The company is having 19 multiple API Products and intermediates manufacturing blocks producing latest Oncology and handle in a highly precised isolators and taking care of persons, environment & non oncology drug substances.

The Company units are also certified by IS09001-2015 for Quality systems, IS014001-2015 for Environmental Management systems & 0SHAS18001-2007 for Occupational Health & Safety Management systems. Also our R&D is certified by DSIR, Govt, of India.

The Company has developed novel and innovative technologies for the manufacture of the life saving Oncology and nononcology drug substances, validated and commercialised the same and made available at an affordable prices. This strength provides us with tremendous opportunities to enhance competitiveness, to improve our position in the market place & find the new markets.

The Company has invested in containment technologies for manufacture of oncology drug substances and made our manufacturing process sustainable. The Company has invested in latest available technologies like Bipolar system fromjapan, first in India to manufacture one of our products there by reduced the water consumption by about 10 fold in that product.

In this process the company has invested in developing continuous flow processes for its products wherever suitable. The company supports its customers by a way of providing all the necessary data for complying with their regulatory. The organizational structure ensures sharp focus on accountability especially in areas such as quality and compliance standards. Our strengths provide us with tremendous opportunities to enhance competitiveness, to improve our position in the market place.

Accelerating access to affordable and innovative medicines is at the core of our work at Shilpa Medicare. The belief that Good Health needs of patients around the world and do all that it takes to fulfill them. Even as our medicines ensure good health for millions of people around the world every day, we are aware that there are millions more, in different countries, for which high quality, affordable medicines continue to be out of reach. Developing products where affordable alternatives exists or don’t exist, working with all stakeholders in the healthcare systems across different countries to enable market access, manufacturing medicines of the highest quality in full adherence to the best global manufacturing practices, and ensuring their availability at all times through a robust, efficient and seamless supply chain.

Enabling and helping our clients to ensure that our APIs are available wherever and whenever they needed. Working with clients to help them to succeed. We have set clear goals and aspirations for our next set of milestones. In the medium term, building on proven results, we are having the power of our carefully developed product portfolio, relationships built over a long period and a diversified customer mix. Further, we have an optimized cost structure.

The technology involving complex chemistry and tough purification procedures to manufacture certain necessary drug substances for injectable and OSD products were transferred. Chemical processes were developed for quite a number of complicated drug substances, taking them to production stage on a commercial scale.

Every employee has been made aware that being safe and taking care of ourselves and each other are our highest priority. Our aim is to protect our employees against work related hazards. Employees in the manufacturing function are being trained to become safety champions. They are being trained to take ownership of production blocks.

RESEARCH AND DEVELOPMENT

Shilpa Medicare views its R&D capabilities as a vital component of its business strategy that will provide a sustainable, longterm competitive advantage. Shilpa Medicare is among the few Indian pharmaceutical companies in India to have started its research program in support of its global ambitions. The R&D environment reflects its commitment to be a leader in the Oncology generics space. Our generics business helps to reduce drug costs for individuals and governments by bringing generic drugs to market as early as possible, and making them available to as many patients as possible. We supply pharmaceutical ingredients to pharmaceutical companies, which contributes to our goal of providing affordable medicine.

We will continue to promote affordability in significant ways and work to expand our product offering of generics, focusing on increasing access to products with significant barriers to entry. We will continue to look for new opportunities to take generics to more patients, in collaboration with other companies.

Our research and development centre offers space for the development of generics meeting international development standards, including difficult to make complex API processes, such as those for Oncology/non Oncology molecule.

Shilpa Medicare R&D Centre in Raichur/Vizag has shown good progress in terms of new projects taken for development and the projects which were successfully transferred to plant.

To enhance the further productivity of the existing molecule we have started new AFR technology to reduce the reaction time for the completion of reaction followed by conventional method for workup/crystallization of final molecule.

Almost 55 products (Oncology & non-Oncology) are currently running in development.

FINISHED DOSAGE FORMULATION FACILITY

Shilpa Medicare Limited — Finished Dosage Formulation Facility is a World Class GMP compliant Facility engaged in manufacturing of potent drugs- which includes liquid and lyophilized injectables in vials, sterile dry powder injectables in vials, oral solid dosage form (Tablets and hard gelatine capsules). The facility is designed for handling of potent Drug Products (including Oncology products or adjuant therapies) for various regulatory markets in a highly contained manner. Facility is designed to handle potent molecules upto OEL 4 level of containment.

The facility is approved by various regulatory agencies including USFDA, EUGMP, ANVISA & COFEPRIS. This facility consists of Oral Solid Block with two commercial scale tablet manufacturing and one commercial scale capsule manufacturing line approved by USFDA. Three separate Injectable blocks consists of two liquid-lyophilisation commercial scale manufacturing lines approved by USFDA and 3rd Injectable combi-line for handling of liquid, lyophilized and Dry Powder Injectable under qualification.

Fully automatic packing area is under installation and commissioning. The packaging line is complying with Global Track & Trace (Serialization & Aggregation) regulations including Drug Supply Chain Security Act (DSCSA, USA) and Falsified Medicines Directive (FMD, Europe) by Strategizing, Planning and Managing Complex Serialization deployments.

CONTRACT MANUFACTURING

Shilpa Medicare Limited manufactures many products in several types of dosage forms such as tablets, capsules, liquid injection (Aseptically and terminally sterilized), Lyophilized Injectable, Sterile Dry powder injectables.

All products are manufactured under the same stringent quality Standards for export to USA, EU and RoW market.

FORMULATION R&D

Shilpa Medicare Limited Formulation Research and Development Centre is located near Vizianagaram District of Andhra Pradesh.

Formulation Research Centre is concentrating in developing generic equivalents and super generics to Reference Listed Drugs for Global Markets like USA, Europe and RoW for injectable and oral formulations used for the treatment of cancer and other indications like Multiple sclerosis, liver diseases, HIV, smoking cessation, Alopecia, Eye disorders etc...

The research centre also concentrates in the development of new formulations leading to reduced costing and enhanced stability of the drug products. Also the 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 injectable administrations. The injectable department of R&D is developing the anticancer drugs in liquid injectable infusion bags.

The oral department of R&D is concentrated in developing the generic equivalents for Global Markets. The R&D team is concentrated in developing the products as Para IV and 505((b)2). R&D is concentrated in working on products to reduce drug product administrations.

Clinical department of R&D is concentrated in surveillance of safe use of the drugs manufactured by Shilpa Medicare. Clinical study monitoring. Evaluating the patient requirements and proposing the development strategy to product development.

R&D is working on development of products with target filing as First to File and Para IV filing to US FDA.

INTELLECTUAL PROPERTY MANAGEMENT (IPM)

Shilpa’s success depends on the Company’s ability in future to obtain patents, protect the proprietary information and operate without infringing on the intellectual property rights of other pharma companies. Shilpa’s inability to obtain timely ANDA approval, thus missing out on early launch opportunities and litigation outcomes could affect product launch date.

Shilpa Medicare Limited Intellectual Property Management (IPM) team is responsible for building Shilpa’s global generic product pipeline and 505(b)2 NDA pipeline as well as creating, managing and protecting its high value patent estate. Shilpa has a dedicated IPM Team which provides stage wise IP-clearances during product/process development activities and also provides frequent updates and alerts on relevant IP (patent, trademark etc.) to R&D scientists for products/process and suggests remedial measures to deal with IP issues. Shilpa IPM team is involved in product selection activity to ensure that right products are selected for development.

Shilpa’s IPM team continues to build its future pipeline of complex products with established robust portfolio selection process, providing early launch capabilities along with intellectual property advantages.

Shilpa’s strengths, across various molecules including oral, Injectable and complex differentiated products lie in developing intellectual property in non-infringing processes and resolving complex chemistry challenges. In this process Shilpa develops dosage formulations and applies new technologies for better processes. The API Process development is focused for developing and transferring commercially viable, non-infringing and patentable novel API technologies. The development grid selection for API’s is based difficult-to-make API molecules and novel polymorphic forms of certain API’s for creating value addition.

Shilpa’s IPM Team is involved in filing of the patent applications of newer processes/newer products in India, US & EU.

Highlights FY 17-18:

- In FY 17-18, the Company has filed two ANDAs with paragraph IV certification as First to File (FTF).

- In FY 17-18, Shilpa and its group companies have filed 34 patent applications taking the cumulative total to 247 patent applications in India and other countries. Shilpa received grants for 9 patents.

Future plan FY 18-19

- Shilpa has plans for filing 5 ANDAs with paragraph IV certification with US FDA, out of which two could be first-to-file ANDAs.

- Shilpa & it’s Partners has plans for filing of two 505(b)2 NDAs.

- Shilpa plans to file at least one NDA for its differentiated product.

REGULATORY FILINGS (API RAICHUR UNIT-1 & UNIT-2) US DMFs

- 4 (Four) (Gemcitabine HC1 (route-2), Ibrutinib, Teriflunomide, Pomalidomide)— and are with CA status available.

- 5 (Five) — (Busulfan, Irinotecan HC1, Oxaliplatin, Imatinib Mesylate and Zoledronic Acid) DMFs approved for scientific assessment in support of ANDA reviews.

- Cumulative USDMF filings: 30 Products.

EDQM

- 2 (Two) (Irinotecan HC1 and Tranexamic Acid) DMFs Filed for grant of CEPs.

- 1 (One) CEP, Irinotecan HC1 granted.

- Cumulative CEP''s: 11 Products.

Europe DMFs Filed

- 6 (Six) Bortezomib, Bendamustine HC1, Pemetrexed Disodium, Melphalan HCl, Gemcitabine RTU, Clofarabine Filed through DCPs / NPs to support three MAHs for their MAAs.

- Cumulative EUDMF (DCP/CP procedures): 15 Products.

Regulatory Inspections and approvals

- During the year under review, the Company has received EIR from USFDA, for the inspection conducted during the period of November, 2017 for FDF manufacturing site, Jadcherla.

- During the year under review, two API facilities located at Raichur and FDF facility at Jadcherla inspected & approved by European authority from Austria (AGES) for GMP compliance.

- During the year under review, two API facilities located at Raichur, Karnataka, i.e. Unit-1: Deosugur Industrial Area, Deosugur, Raichur, Karnataka, India and Unit-2: Raichur Industrial Growth Centre, Chicksugur, Raichur, Karnataka, India, inspected by USFDA for PAI. EIR received.

REGULATORY FILINGS (UNIT-IVJadcherla)

US ANDA’s filed: 7 Products.

EU Dossiers filed: 7 Products

CumulativeANDA''s filings: 15 Products.

Cumulative clients ANDA''s filings: 9 Products.

Cumulative EU dossier filings: 14 Products.

Europe Approvals

Imatinib 100 mg & 400 mg Film Coated Tablets (Czech Republic, Finland, Ireland, Netherlands, Sweden) Bortezomib 3.5 mg Powder for Solution for Injection (Germany, Ireland, Italy & Romania) Irinotecan 20 mg/ml concentrate for solution for infusion (Ireland, Malta, Netherlands, Romania & United Kingdom).

Regulatory Approvals: USFDA

During the assessment year FDF site was inspected by FDA and the EIR received.

BIOLOGICS SBU UNIT

Background -

The global prescription pharmaceutical market is estimated at $811 Billion in 2018 and expected to grow at 6.5% for the next 5 years. Of this, the generics market is estimated at $90 billion and expected to grow at a similar rate. The above figures hide the new shifting reality — Biologics now constitute about 27% of prescription pharma sales, while biologics share within the top 100 drugs is ~50% — showcasing the effectiveness of these drugs, whose target markets are — oncology, Autoimmune disorders, hematology and diabetes.

Opportunity and drivers -

a) Most biologics sales today are driven by 1st and 2nd generation biologics whose patents expire in the 2014 -2024 window.

b) All biologics today are injectables — an area which your company understands well and is well prepared to attack.

c) Price erosion in this segment is not expected to be as high as the chemical generics due to complexities in developing and manufacturing of these products.

d) Regulated markets, including the USA, that remain the main drivers for these products in terms of value - are gradually opening up to biosimilars. While automatic substitution is yet to be a reality for biosimilars today and is the single largest barrier to wide adoption of biosimilars, pressure from patient/activist groups in regulated markets, coupled with huge advances in analytical technologies and ever-increasing safety data from markets that have already taken to biosimilars add to the pressure on governments to come up with automatic substitution legislations in the regulated markets.

e) BRICS markets present the largest volume growth opportunity for biosimilars since they have the largest patient populations, backed by growth in purchasing power over the last decade and half. Despite this, these markets remain price sensitive.

f) Novel formulations and delivery devices will also help us differentiate ourselves from competitors in these markets.

g) Genericized biologics (biosimilars) growth in the generics market is expected to parallel the growth of innovator biologics above, thus presenting the largest opportunity for growth over the next decade, with sales of biosimilars expected to hit $20-23 billion by 2023-24 globally

Our platform & delivery technologies, molecule selection, ability to select markets, partners will play a key role in our growth in this strategic area.

Where we are -

The amalgamation of Navya Biologicals Pvt Ltd with your company was completed in late November 2017 and now is your company’s Biologics Division, based out of Hubli-Dharwad in Karnataka. This transaction has enabled your company to save about 5-7 years in development timelines for biosimilars. The company now has 13 biosimilars in its pipeline and is dominated by drugs catering to the autoimmune disorders and oncology segments, with 7 of the top 10 biologics in its pipeline. The remaining are niche, high margin opportunities catering to high unmet clinical needs. The company has also filed 3 platform patents and is pursuing these in global markets.

The first biosimilar is poised to enter human clinical studies later this year. The innovator has a global market of $8 billion pa for this molecule, while the biosimilar opportunity is at $3-3.2 billion per annum. Three other molecules are ready to complete preclinical studies this year. Your company expects to commercialize its first biosimilar in 2019 in India, with the others following suit in 2020-21. We expect to be in a position of strength to penetrate the global window of opportunity for global biosimilars through strategic partnerships in the global markets, while opportunistically continuing to build our marketing channels in a few strategically important markets.

FORWARD INTEGRATION - SETUP OF BIOLOGICS MANUFACTURING UNIT IN DHARWAD -

Your company has taken steps to become a vertically integrated biopharmaceutical player, by acquiring 11 acres of industrial land in Belur industrial area, Dharwad and initiating set up a world class biologies manufacturing unit (including fill & finish), employing best in class manufacturing technologies, that reduce the footprint of the facility by about 40%, thereby reducing the capital and operational costs significantly. Phase 1 of the facility is expected to be commissioned in the first half of 2019 and will cater to global biologics markets.

The biologics unit is expected to emerge as the next growth driver for your company in the coming decade and look forward to an exciting future in biopharmaceuticals.

MANUFACTURING FACILITY - TRANSDERMAL PATCHES AND ORAL FILMS AT BANGALORE.

A transdermal patch is medicated adhesive patch that is placed on the skin to deliver a specific dose of medication through the skin and into the bloodstream. Transdermal patches have made their place in global market in past few decades as an alternative to conventional therapeutic for various disease indications. Transdermal patches are widely accepted among physicians and patients due to their non-invasive, pain free and easy administration. In recent years, the growth of transdermal patch market has increased and expected to increase significantly in coming years. Higher investments in research and development could be attributed to the success of transdermal patch market.

Similarly, the thin film drugs were recorded with high market acceptance due to its ease of application and high effectiveness. Moreover, developed economies such as the U.S. and countries in Europe recorded significant sale of thin film drugs. Thin film drugs achieve the desired therapeutic results. Therefore, they have gained attention in the market as a potential treatment option.

Looking to the market potential, we have planned to build a state of art manufacturing facility of Transdermal Patch and Oral Films at Dobaspet, Bangalore.

The lay outs confirming to cGMP requirements is finalized along with Utility, Administration and canteen building. The equipment’s are designed to cater both Transdermal Patch and Oral Film Products.

The plant construction work is already initiated and expected to be completed by end of year 2018.The High Quality critical equipment’s required for the above formulations manufacturing are already ordered from known European vendors and are expected to be received at site between Jan to June’19. Capacities are planned looking to all markets in first phase. A space for future expansion is allocated for capacity increment. Site will be ready for qualification by September 2019.

CENTRALIZED RESEARCH AND DEVELOPMENT CENTRE AT BANGALORE

We have also planned to have a state of art Research and Development centre along with a pilot plant facility for potent and non-potent formulation. Layouts are under approval process and construction shall be initiated soon. This facility also will be ready by September 2019. Initial discussion initiated with Vendors for equipment finalization.

US BUSINESS PLAN

Shilpa Medicare Limited has been investing in infrastructure and R&D capabilities to develop, manufacture and submit regulatory applications to the USFDA for marketing approval. When approved these generic alternatives will offer patients a very much needed affordable option for their health care needs. The US market is very important to Shilpa Medicare Limited as it represents the largest pharmaceutical market in the world. It has been proven in many markets the use of generic alternatives which have gone through vigorous testing requirements save healthcare systems money while providing the same level of high quality, safety and effective medicines.

During the past year Shilpa received two product approvals for Azacitidine and Capecitabine. Those products are being commercialized by partners in the US.

Since Shilpa’s roots are in developing API. The majority of the formulations coming from the company’s R&D efforts utilize API from its own plants. This is important to US customers as it insures greater control over the production process and greatly enhances continuous supply chain capabilities. Shilpa develops and manufactures different dosage forms i.e., oral and injectable drugs in the Oncology therapeutic area along with other high potent drugs that require the level of complexity that Shilpa has built into its R&D and production capabilities.

The US market has seen tremendous consolidation of the customer base. The number of customers for retail based products has decreased as mergers and acquisitions has increased in the past years. Similar trends have been observed in the hospital or institutional segment where injectable drugs are the primary dosage form. Group purchasing organizations for hospital/Institutional organizations have undergone similar consolidation. There are three GPO customers representing a majority of hospitals in the US. Oncology Clinics are another major customer group for Shilpa’s products. They purchase products from specialized distributors. There are two main distributors with a handful of smaller ones addressing the clinic market.

In order to address this consolidated and diverse group of customers. Shilpa hired in January 2018 a seasoned Executive Mr. Adam Levitt as CEO (US Market). He has a diverse background in the generic pharmaceutical business. He is an experienced leader having worked for global and International generic companies. During his career, he has developed strategies, built multiple organizations while creating sustainable value in both retail and Institutional markets. He understands the resources required to build a local presence to support the company’s business development, Regulatory and Marketing plans. Shilpa expects more products to be approved for the US market. The team in the US will be addressing local business needs around financial reporting, business development, managing relationships and preparing the company to operationalize and execute launch strategies for its pipeline. The vision for Shilpa’s US business is to build a valuable and sizable specialty pharmaceutical business in the next 5 years capable of taking Shilpa to the next stage of its evolution. In order to accomplish, the US business will create valuable relationships with the different customer channels by offering them high quality, consistent supply of cost effective important medicines that will impact patients quality of life.

CHANGE IN NATURE OF BUSINESS:

During the year under review, there is no change in the nature of business carried out by your Company.

DIVIDEND:

During the financial year under review your Company declared and paid an interim dividend of Re. 0.70 per share and the Directors recommended the same as dividend for the FY 2017-18 keeping in view the fund requirements for the on-going expansion plans. An amount of Rs. 6,86,86,700/-(Rupees Six Crores Eighty Six Lakhs Eighty Six Thousand Seven Hundred only) inclusive of dividend distribution tax was absorbed towards the dividend for the F.Y 2017-18.

The Dividend Distribution Policy of the Company is set out as Annexure-10 and the same is uploaded on the Company’s website at http://vbshilpa.com/Dividend-Distribution-Policy html.

SHARE CAPITAL

The paid up share capital of your Company increased by Rs. 13.99 lakhs to Rs. 815.26 lakhs due to allotment of 13,99,994 Equity Shares to Shareholders of erstwhile Navya Biologicals Private Limited pursuant to scheme of amalgamation of Navya Biologicals Private Limited with your Company.

Pursuant to the provisions of Section 124 (6) of the Companies Act, 2013 read with IEPF Rules, the Company has transferred 1,80,582 shares whose details are placed in the website of the Company.

TRANSFER TO RESERVES:

We propose to transfer Rs. 500 Lakhs to the general reserve. An amount of Rs. 12128.09 Lakhs is proposed to be retained in the surplus account.

MERGER OF M/s. NAVYA BIOLOGICALS PRIVATE LIMITED WITH THE COMPANY:

Pursuant to the order dated 24/11/2017 of Hon''ble National Company Law Tribunal, Bangalore Bench, the Navya Biologicals Private Limited has been merged with the Company we.f 01/04/2016 being the appointed date for merger.

DIRECTORS OR KEY MANAGERIAL PERSONNEL

Mr. Omprakash Inani (DIN No. 01301385), Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

During the period under review Chief Financial Officer (CFO) Mr. Rajendra Dugar has resigned from the services we.f 31/10/2017 and Mr. Sushil Bajaj has been appointed as CFO we.f 13/11/2017.

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUBSECTION (6) OF SECTION 149:

The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS STATUTORY AUDITORS

M/s. Brahmayya & Co, Chartered Accountants, Registration No. 000513S, were appointed at the 30th Annual General Meeting as the Statutory Auditors of the Company for five years till the conclusion of the 35th Annual General Meeting of the Company. They have confirmed their eligibility for the FY 2018-19 under Section 141 of the Companies Act, 2013 and the Rules framed thereunder. The Companies Amendment Act, 2017 has omitted the requirement of ratification of the appointment of statutory auditors at every Annual General Meeting.

COST AUDITORS:

The Board has appointed M/s. VJ. Talati & Co., Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2018-19 as recommended by the Audit Committee. As required under Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

SECRETARIAL AUDITORS:

M/s. P.S. Rao & Associates, Practicing Company Secretaries were appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18, as required under Section 204 of the Companies Act, 2013 and Rules there-under. The Secretarial Audit Report for Financial Year 2017-18 forms part of this Report as Annexure - 8.

The Board has appointed M/s. P.S. Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2018-19.

COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMERS:

As there is no qualification, reservation or adverse remark in the reports made by the Auditors, your directors need not give their comments on that.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO:

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure — 7.

RISK MANAGEMENT POLICY:

Pursuant to Regulation 21 (4) of SEBI (LODR) Regulations, 2015, the Company has formulated a policy on the Risk Management. The Risk Management Policy of the Company is posted on the Company’s website:wwwvbshilpa.com. The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. Major risk to the Company apart from the general business risks related to pharmaceutical industry, is supplies at low cost countries like China and other unregulated suppliers.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, forms part of this Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries, Associates and Joint Ventures in Form AOC-1, is annexed herewith as Annexure - 4.

Further, the annual accounts of all the subsidiary companies shall be posted on Company’s website — wwwrvbshilpa.com.

Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

Various Audit Systems in the Company monitor and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy, Policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURES INM TECHNOLOGIES PRIVATE LIMITED Nano-technology Division

INM Technologies Private Limited incorporated on 23rd January 2015 is subsidiary of Shilpa Medicare Ltd. The Company has a vision to serve 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 strengthen industrial competitiveness in Asia, Europe, and USA. INM has expertise in the field of the Materials Engineering / Pharmaceutical Technology and service in advanced technology and product development with scale up process for the developed micro/nano materials. Based on our research activity and our experience in the chemical technology, materials science and engineering, pharmaceutical technology sectors, we develop and integrate nano structured materials in the products of our customers of various industrial sectors. INM has state-of-the-art facility for synthesis, characterization and analytical testing of nano technology based products, trained manpower for process design & monitoring and created 9 departments in the company involving major disciplines namely Biotechnology, Bio-Medical, Analytical and Pharmaceutical, Chemical, Polymer, Coatings, Electronics and Smart materials. After completion of 3 years of establishment i.e., by 2018 January, INM Technologies has received DSIR certification.

SHILPA THERAPEUTICS PVT. LTD. (STPL)

STPL situated at Cherlapally, IDA Phase-III, Hyderabad, India, a progressive novel drug delivery company with an international outlook is dedicated to the development and commercialization of innovative and patient compliant novel drug delivery systems such as fast disintegrating oral strips.

STPL is the first company to commercialize prescription products as oral thin strips/films in India.

Strong technical expertise to develop thin strips/films for oral/sub-lingual/buccal delivery

As a result of continued efforts in the research and product development, STPL had developed the most sought after novel drug delivery dosage form— orally disintegrating strip/film and obtained the manufacturing and marketing licenses for this dosage form in India and abroad.

The orally disintegrating formulation resembling a postage stamp in size and shape is a taste masked, fast dissolving, convenient and potentially effective dosage form.

Vertically integrated GMP facility from Research to Commercialization

STPL facility is capable of meeting the regular commercial supply demand from manufacturing to secondary packing with its compliance to meet the latest Schedule ‘M’, cGMP/WHO GMP compliant systems, procedures and practices.

Products available in the Domestic Market

STPL had obtained manufacturing and marketing license from the Drugs Control General (India), New Delhi for the following products and these products have also been launched in India by well-established national pharmaceutical companies.

Molecule

Category

Ondansetron Hydrochloride 2mg , 4mg & 8mg Orally Disintegrating Strips

For the prevention of chemotherapy induced nausea and 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

Montelukast 10 mg/5mg/4 mg ODS

Treatment of Prophylaxis and Chronic Asthma

Menthol Mouth Freshener ODS

Mouth Freshener

Products in the Pipeline

The following formulations are under various stages of Research & Product Development along with several others in the initiation phase.

Molecule

Category

Tadalafil 5mg ODS

For Treatment of Erectile Dysfunction

Vitamin D3 (Cholecalciferol) 2000IU ODS

Treatment of Vitamin deficiency

Montelukast 10 mg Levocetirizine 5 mg ODS

Treatment of Allergic Rhinitis and Chronic Asthma

Hydroxyapetite 165 mg ODS

Treatment of Velopalatal (VP) insufficiency

Paracetamol 120 mg ODS

Analgesic and Antipyreic

Sildenafil 100 mg ODS

For Treatment of Erectile Dysfunction

Nicotine 1 mg/ 2 mg ODS

For Nicotine Replacement Therapy

Loratadine 5 mg/ 10 mg ODS

For Treatment of Severe Allergic Rhinitis

Patent granted on “Perforated water-soluble polymer based edible films”

Many other patents are under approval process.

Business Scope

STPL holds bright prospects for its business scope. ODS products of Shilpa Therapeutics have already been launched in India by prominent pharma companies viz., Mankind, Delvin, Alkem, Leads Pharma and Rx Drugs. Shilpa Therapeutics has also extended its business to the external markets with its ODS products launched in Kenya, Yemen, Honduras and many other countries to follow.

Registration process like dossier submission is under process in many countries like Francophone countries, Malaysia, Thailand, Myanmar and Cambodia etc.,

STPL with its technical expertise, manufacturing capabilities and its finished products at various stages of registration in several countries is poised to attain promising business results in the very near future.

KOANAA HEALTHCARE GmbH

Koanaa Healthcare GmbH was funded in July 2016 as 100% subsidiary of Shilpa Medicare Limited and Mr. RK Somani took over the responsibility as CEO. He is initiating, developing and guiding Koanaa Healthcare GmbH as a Start-Up company to a pharmaceutical company which is distributing and selling Shilpa''s oncological portfolio in Europe.

Koanaa Healthcare GmbH will be positioned as “European Player” with Austrian basis with low prices and high service in the field of oncology with the brand “Austrian Quality”. The products will prove highest standards and quality and Koanaa Healthcare GmbH will stand for Deliverability and Service for Patients and Physicians.

Koanaa Healthcare GmbH will act as a regulatory hub here in Austria and is currently focused on getting commercial cooperation’s with other pharmaceutical companies. First cooperation with Amring is already achieved and intensive discussions to expand the existing partnership are ongoing. Further discussions with other potential partners are in discussion and business development activities will broaden the number of partnerships.

With an appropriate regulatory strategy, step by step more oncological products will be part of Koanaa Healthcare GmbH''s portfolio.

The vision of Koanaa Healthcare GmbH is to develop as a successful and reliable partner within the pharmaceutical domain.

LOBA FEINCHEMIE GmbH

Dr. Walter Erber took over the responsibility as CEO/ Managing director for LOBA Feinchemie GmbH from May 2016 and is leading and guiding and developing the company With the strategic vision, to achieve sales of 10 million Euro within the next 5 years, an euphoric and challenging strategic goal is set for Loba Feinchemie GmbH.

Main strategy of Loba Feinchemie GmbH is to enhance the focus on business development and sales & marketing within the next business years to support sales- and profit growth.

In the budget year 2017/2018, beside intensive business activities, main challenge was to increase the level of GMP in all areas, which was successfully achieved. Two main products showed unexpected reduction in sales, which only partly could be compensated with other products. Nonetheless sales forecast for the next years will show positive development. In the years 2018/2019 and onwards the sales will further increase and allow Loba Feinchemie GmbH to proceed with the expansion strategy in terms of production and in terms of human resources as well as to start with necessary investments in the facility Loba philosophy is to be a global company offering its customer a unique product by providing them a choice of operational excellence and best services with cost efficiencies. The mission is to add value to our customers by offering excellent products through continuous innovation and delivering the promises to the customers.

REVA MEDICARE PRIVATE LTD

The organization operations have commenced, and it has expanded as per its vision set-up. The key verticals are:

DOSAGE FORM:

As per strategy we have positioned in Emerging Markets by formalizing a consortium (Manufacturing Cos) backing Reva. We have secured the registration approvals in a key market and are hopeful to service both Tender (Public) & Private Trade. The license to export will be under Reva Pharma.

We have adopted module of licensing (Licence In & License Out) for Large Generic & Innovator Cos’. The 1st license out has been completed for the market of Europe (Medical Device — Women Health Care). We are evaluating positioning of the product across Middle East & CEE markets and are optimistic to close in year 2018-19.

RAICHEM MEDICARE PRIVATE LIMITED

The Company has entered into Share Purchase agreement with joint partner ICE SPA Italy to dispose off its entire stake in the Company to the joint partner ICE SPA Italy. According to the terms of agreements, the Company has so far disposed off 24% stake in the Company for which the Consideration has already been received. The Company is in the process of disposing the remaining 26% with prior approval of Reserve Bank of India.

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 — 3.

CSR Policy of the Company and other details as required is placed on the Company’s website at http://vbshilpa.com/ CSRPolicy.pdf.

NOMINATION AND REMUNERATION POLICY

A committee of the Board named as “Nomination and Remuneration Committee” has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Regulation 19 of SEBI (LODR) Regulations, 2015. It has been entrusted with the task to recommend a policy of the Company on Directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation 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 the Company’s website at http://vbshilpa.com/ pdf/NominationRemunerationPolicy.pdf.

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS.

As required under the provisions of Section 134 of the Companies Act, 2013 read with Rule 4 of Companies (accounts) Rules, 2014 the performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the director being evaluated. The Company has put in place a mechanism for evaluation of its own performance, its Committees and Independent Directors The evaluation of Board, Committees and Directors was conducted based on the evaluation of parameters such Board composition, structure, effectiveness of Board, participation at meetings, domain knowledge and governance adherence

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 ended 31st March, 2018 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2018 and of the profit and loss of the Company for the year;

iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud 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 be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is placed at website of the Company at http://wwwvbshilpa.com/annualreturn.html and Annexure-A of this Directors Report.

OTHER DISCLOSURES:

Board Meetings

During the year under review, 6 (Six) Board Meetings were held during the year. For further details, please refer Corporate Governance Report which forms part of 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 Act, 2013 and SEBI (LODR) Regulations, 2015. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Corporate Governance Report

Regulation 15 of SEBI (LODR) Regulations, 2015 is applicable to your Company, 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 on compliance with the code of Corporate Governance specified in Schedule V(E) of SEBI (LODR) Regulations, 2015 forms part of this Annual report.

Management Discussion and Analysis

The Management discussion and analysis Report for the year under review as stipulated under Regulation 34 SEBI (LODR) regulations, 2015 is annexed here to and forms part of this Annual Report.

Vigil Mechanism:

In pursuance to the provisions of section 117(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. Protected disclosures can be made by a whistle blower through to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link: http://vbshilpa.com/pdf/ Whistle_Blower_Policy.pdf

Remuneration ratio of the Directors/Key Managerial Personnel/Employees:

Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure — 1.

Particulars of Employees:

Statement of employees employed throughout the financial year and in receipt of remuneration of Rs. 1,02,00,000/- (Rupees One Crores Two Lakh) or more, or employed for part of the year and in receipt of Rs. 8,50,000/- (Rupees Eight Lakh Fifty Thousand) or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure - 2.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review;

DEPOSITS

Your Company has not accepted any fixed deposits under chapter V of the Companies Act, 2013 and as such no principal or interest was outstanding.

RELATED PARTY TRANSACTIONS:

Related Party Transactions entered during the financial year under review are disclosed in Note No. 45 of the Financial Statements. These transactions entered were at an arm’s length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure - 5.

Related Party Disclosure as per Schedule V of SEBI (LODR) Regulations, 2015 is enclosed herewith as Annexure - 6.

The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s at website http://vbshilpa. com/pdf/related_party_policy.pdf

BUSINESS RESPONSIBILITY REPORT:

Pursuant to Clause 34(2)(f) of the SEBI (LODR) Regulations, 2015, Business Responsibility Report, is applicable to the Company, the same forms part of the Board Report as Annexure - 9.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT.

There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

5. No frauds were reported by the auditors during the year under review

Your Directors further states that during the year under review, there were no cases filed/registered pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Directors further states that in accordance with the provisions of section 148 (1) of the Companies Act, 2013 read rules thereunder, the company has maintained cost accounts and records for the financial year 2017-18.

ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their wholehearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hard work and commitment.

For and on behalf of the Board of Directors

Sd/-

Omprakash Inani

Chairman

DIN: 01301385

Place: Raichur

Date: 13.08.2018


Mar 31, 2017

To,

The Shareholders,

The Directors have pleasure in presenting herewith the 30th Annual Report on the business of your Company together with the Audited Accounts for the financial year ended 31st March, 2017.

FINANCIAL SUMMARY (Rs. in lakhs)

PARTICULARS

Financial Year 2016-17

Financial Year 2015-16

Standalone

Consolidated

Standalone

Consolidated

Operating Revenue

73,764.89

78,356.24

68,137.36

72,216.91

Other Income

1,673.86

1,800.28

1,114.11

1,135.98

Profit before Interest, Depreciation & Tax after exception Item

19,896.49

18,888.87

17,316.17

16,893.69

Interest

264.52

269.41

327.19

393.30

Depreciation

2,603.17

3,002.14

2,119.03

2,313.88

Net Profit Before Tax

17,028.80

15,617.32

14,869.96

14,185.89

Provision for taxation

a. Current Tax

3,632.26

3,679.36

3,035.51

3,053.99

b. Less: MAT credit entitlement

(288.20)

(288.19)

(501.29)

(501.30)

c. Deferred tax

1,025.68

1,076.08

1,049.48

1,009.21

Profit after Tax

12,659.05

11,150.07

11,286.26

10,623.99

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

12,476.46

10,722.53

11,305.71

10,853.66

REVIEW OF OPERATIONS:

During the year under review the Company reported gross revenues of Rs.73,764.89 lacs as against Rs.68,137.36 lacs and Net Profit of Rs. 12,659.05 lacs as against Rs.11,286.26 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 been yielding good results in terms of high margins. Expansion of production facilities is as per schedule. Considering the fast developments in the pharma industry the Company has started focusing on development of new process and new products.

FORMULATION R&D

Shilpa Medicare Limited Formulation Research and Development Centre is located at Vizag.

Formulation research Centre is concentrated in developing generic equivalents to reference listed drugs for Global Markets like USA, Europe and RoW for injectable and oral formulations used for the treatment of cancer and other indications like Multiple sclerosis, liver diseases, HIV etc.

The research centre also concentrates in the development of new formulations leading to reduced costing and enhanced stability of the drug products. Also the 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 injectable administrations.

The oral department of R&D is concentrated in developing the generic equivalents for Global Markets. The R&D team is concentrated in developing the products as Para IV and 505 ((b)2). R&D is concentrated in working on products to reduce drug product administrations for Geriatric patients.

Highlights FY 16-17:

- In FY 16-17, Shilpa successfully launched the generic versions of Vidaza® Injection & Xeloda® Tablets.

- In FY 16-17, Shilpa filed one ANDA with paragraph IV certification as First to File (FTF)

SHILPA MEDICARE API FACILITIES

Shilpa Medicare having two API facilities in Raichur, maintaining continuous GMP Compliance USFDA, EU, Korean, Cofepris, Canadian, PMDA Japan, TGA Australia etc. approved facilities.

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 a highly précised isolators without affecting and taking care of persons and environment.

Accelerating access to affordable and innovative medicines is at the core of our work at Shilpa Medicare. The belief that Good Health needs of patients around the world and do all that it takes to fulfill them. Even as our medicines ensure good health for millions of people around the world every day, we are aware that there are millions more, in different countries, for which high quality, affordable medicines continue to be out of reach. Developing products where affordable alternatives exists or don''t exist, working with all stakeholders in the healthcare systems across different countries to enable market access, manufacturing medicines of the highest quality in full adherence to the best global manufacturing practices, and ensuring their availability at all times through a robust, efficient and seamless supply chain.

TiH now company enjoyed a sound business in providing affordable APIs to country and worldwide.

The technology involving complex chemistry and tough purification procedures to manufacture certain necessary drug substances for injectable and OSD products were transferred. Chemical processes were developed for quite a number of complicated drug substances, taking them to production stage on a commercial scale.

Every employee has been made aware that being safe and taking care of ourselves and each other are our highest priority. Our aim is to protect our employees against work related hazards. Employees in the manufacturing function are being trained to become 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 a World Class GMP compliant Facility engaged in manufacturing of potent drugs. The facility is designed for handling of potent Drug Products (including Oncology products) for various regulatory 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 Oral Solid Block with two commercial scale tablet manufacturing and one commercial scale capsule manufacturing line approved by USFDA. Three Separate Injectable blocks consists of two liquid-lyophilization commercial scale manufacturing lines approved by USFDA and 3rd Injectable combi-line for handling of liquid, lyophilized and Dry Powder Injectable under commissioning.

4 No''s of oral solid dosage and 7 no''s of injectable products have been taken 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 obtain patents, protect the proprietary information and operate without infringing on the intellectual property rights of other pharma companies. Shilpa''s inability to obtain timely ANDA approval, thus missing out on early launch opportunities and litigation outcomes could affect product launch date.

Shilpa Medicare Limited Intellectual Property Management (IPM) team is responsible for building Shilpa''s global generic product pipeline as well as creating, managing and protecting its high value patent estate. Shilpa has a dedicated IPM Team which provides stage wise IP-clearances during product/process development activities and also provides frequent updates and alerts on relevant IP (patent, trademark etc) to R&D scientists for products/process and suggests remedial measures to deal with IP issues. Shilpa IPM team is involved in product selection activity to ensure that right products are selected for development.

Shilpa''s IPM team continues to build its future pipeline of complex products with established robust portfolio selection process, providing early launch capabilities along with intellectual property advantages.

Shilpa''s strengths, across various molecules including oral and Injectables, lie in developing intellectual property in noninfringing processes and resolving complex chemistry challenges. In this process Shilpa develops dosage formulations and applies new technologies for better processes. The API Process development is focused for developing and transferring commercially viable, non-infringing and patentable novel API technologies. The development grid selection for API''s is based difficult-to-make API molecules and novel polymorphic forms of certain API''s for creating value addition.

Shilpa''s IPM Team is involved in filing of the patent applications of newer processes/newer products in India, US & EU.

Highlights FY 16-17:

- During the year FY 16-17, Shilpa has settled one of its ANDA pending litigation on generic version of Gleevec® Tablets.

- In FY 16-17, Shilpa has filed 24 patent applications taking the cumulative total to 213 patent applications in India and other countries. Shilpa received grants for 5 patents.

- Shilpa has plans for filing 3 ANDA with paragraph IV certification with US FDA, out of which two could be first-to-file ANDA''s.

REGULATORY FILINGS (API RAICHUR UNIT-1 & UNIT-2) US DMFs

1 (one) (Pirfenidone)- and is with CA status available.

4 (Four) - (Azacitidine, Fingolimod Hydrochloride, Capecitabine, and Temozolomide) DMFs approved in support of ANDA reviews.

EDQM:

2 (Two) (Pirfenidone and Temozolomide) Filed.

4 (Four) CEPs granted (Pirfenidone, Temozolomide, Imatinib mesylate and Capecitabine)

Europe DMFs approvals :

3 (Three) DMFs Bortezomib, Imatinib Mesylate, Gemcitabine HCl were approved / in support of dossiers filed by different MAHs.

Regulatory Approvals: USFDA.

During the year under review the Company has received EIR from USFDA, for the inspection conducted during the period of December, 2016 for both API manufacturing sites located at Raichur, Karnataka, i.e. Unit-1: Deosugur Industrial Area, Deosugur, Raichur, Karnataka, India and Unit-2: Raichur Industrial Growth Centre, Chicksugur, Raichur, Karnataka, India.

REGULATORY FILINGS (UNIT-IV-Jadcherla) (Formulation) US ANDA''s

- Dimethyl Fumarate DR Capsules 120 mg & 240 mg -ANDA#210291

US ANDA''s Approvals

- Azacitidine for Injection 100 mg/vial - ANDA#207518 (29th Sep 2016)

- Capecitabine Tablets USP 150 mg & 500 mg-ANDA#207456 (12th Dec 2016)

- Several ANDA under filing/filed.

Europe approvals

- 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 EIR received with zero 483 on December 2016.

CHANGE IN NATURE OF BUSINESS:

During the year under review, there is no change in the nature of business carried out by your Company.

DIVIDEND:

During the financial year under review your Company declared and paid an interim dividend of Re. 0.60 per share and the Directors recommended the same as dividend for the F.Y 201617 keeping in view the fund requirements for the on-going expansion plans. An amount of Rs.5,78,63,315/- (Rupees Five Crore Seventy Eight Lakh Sixty Three Thousand Three Hundred and Fifteen only) inclusive of dividend distribution tax was absorbed towards the dividend for the F.Y 2016-17.

TRANSFER TO RESERVES:

We propose to transfer Rs. 500.00 Lacs to the general reserve. An amount 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 for the purpose of expanding the operations of the Company, fresh funds were raised by allotting 30,25,000 (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 Sixty Nine) each on 26th December, 2016 on preferential basis.

STATUS OF MERGER OF M/s. NAVYA BIOLOGICALS PRIVATE LIMITED WITH THE COMPANY:

Pursuant to the enforcement of Section 230 - 240 of the Companies Act, 2013, the merger application filed by the Company before the Hon''ble High Court of Judicature of Karnataka, was transferred to National Company Law Tribunal (NCLT), Bengaluru Bench. NCLT directed the Company to seek the approval of the equity shareholders on the proposed scheme and dispensed with the meeting of the Creditors, as Creditors submitted their No-objection to the proposed scheme. Notice of the Court Convened meeting was sent to all the shareholders of the Company, who were holding shares as on the record date fixed and they had an option to vote on the proposed scheme, through postal ballot/e-voting/by way of physically participating in the meeting. The Court convened meeting of the equity shareholders was held on 29th April, 2017, wherein majority of the equity shareholders present and those who participated through postal ballot and e-voting, have consented to the proposed scheme.

Subsequent to obtaining approval of the equity shareholders, the Company has filed a Petition before NCLT, to sanction the proposed scheme. The petition filed is pending for consideration of the Tribunal.

DIRECTORS OR KEY MANAGERIAL PERSONNEL

Ms. Namrata Bhutada (DIN No.05133614), Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

During the year Mr. Naresh Patwari (DIN No.03319397), had been co-opted as Additional Director w.e.f 26th December,

2016, as a Nominee of TA FII Investors Limited. Notice in writing under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company, has been received and the board has proposed to co-opt him as Director of the Company, whose period of office shall be determinable by retirement of Director by rotation, subject to the recommendation of the Nomination and Remuneration Committee.

During the period under review the Company Secretary Mrs. Sujani Vasireddi has resigned from the services w.e.f 01-09 2016 and Mr. Madhusudhan Reddy has been 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 Dugar has been appointed as CFO w.e.f 25-11-2016.

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUBSECTION (6) OF SECTION 149:

The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS STATUTORY AUDITORS

As per the provisions of Section 139(2)(b) of the Companies Act, 2013, the term of M/s. Bohara Bhandari Bung and Associates LLP, Chartered Accountants, has expired. Basing on the recommendation of the Audit Committee, the Board has proposed to appoint M/s. Brahmayya & Co, Chartered Accountants, Registration No. 000513S, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the 35 th Annual General Meeting, subject to ratification by the members at every Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every subsequent Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.

Cost Auditors:

The Board has appointed M/s. VJ. Talati & Co., Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2017-18 as recommended by the Audit Committee. As required under Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

Secretarial Auditors:

M/s. P.S. Rao & Associates, Practicing Company Secretaries were appointed to conduct the Secretarial Audit of the Company for the financial year 2016-17, as required under Section 204 of the Companies Act, 2013 and Rule 9 there under. The Secretarial Audit Report for Financial Year 201617 forms part of this Report as Annexure - 9.

The Board has appointed M/s P.S. Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2017-18.

COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMERS:

As there is no qualification, reservation or adverse remark in the reports made by the Auditors, your directors need not give their comments on that.

However with regard to the qualification raised by the Secretarial Auditor, with regard to not spending the CSR amount for the year 2016-17, your Company states that the entire amount has been transferred to Shilpa Foundation, a Trust formed by the 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, 2013 read 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, the Company has formulated a policy on the Risk Management. The Risk Management Policy of the Company is posted on the Company''s website:www.vbshilpa.com. The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. Major risk to the Company apart from the general business risks related to pharmaceutical industry, is supplies from low cost countries like China and other unregulated suppliers.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Indian Financial Statements, drawn up in accordance with the applicable Indian Accounting Standards, forms part of this Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries, Associates and Joint Ventures in Form AOC-1, is annexed herewith as Annexure - 5.

Further, the annual accounts of all the subsidiary companies shall be posted on Company''s website - www.vbshilpa.com.

Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

Various Audit Systems in the Company monitor and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy, Policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation 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 joint venture of SHILPA MEDICARE LTD with ICE SPA and PCA SPA Italy, which is located at Raichur Industrial Growth Centre, Raichur in the state of Karnataka. During the year 2016-17 Raichem completed all the validation activities and started commercial production and its products are exported. Also Raichem has been approved as qualified supplier for ICE SPA and PCA SPA. Raichem site has also registered with PMDA Japan and the approval process is under progress. After approval Raichem will produce for Japanese market and supply through ICE SPA by adhering to CGMP and stringent quality parameters. Raichem also set up full-fledged R & D lab and analytical development lab for supporting production and also to develop new molecules of bile derivatives. Raichem has established its quality policy, EHS policy, and has initiated training programs for safety, and also employee well fare measures are implemented.

INM TECHNOLOGIES PRIVATE LIMITED (NANOTECHNOLOGY DIVISION)

Innovative Nano & Micro Technologies Private Limited Incorporated in the FY 2014-2015 a subsidiary of Shilpa Medicare Ltd, Raichur. Company has a vision to serve the humanity using Nano technology products. Company drives with Strategic intent "Innovations for AH Generations". INM Technologies profile mainly contains: High-tech know-how, competencies and expertise to meet industrial needs and strengthen industrial competitiveness in Asia, Europe, and USA. Expertise in the field of the Materials Engineering /

Pharmaceutical Technology and service in advanced technology and product development. Scale up process for the developed micro / nanomaterials. Based on our research activity and our experience in the chemistry, materials science and engineering, pharmaceutical technology sectors, we develop and integrate nanostructured materials in the products of our customers of various industrial sectors. State of the art facility for synthesis, characterization and analytical testing of Nano products, trained manpower for process design & monitoring has been established and includes 9 departments in the company involving major disciplines namely Biotechnology, Bio-Medical, Analytical and Pharmaceutical, Chemical, Polymer, Coatings, Electronics and Smart materials. INM Technologies has initiated the process to obtain ISO 9001 certification from prestigious TUV Group. After completion of 3 years of establishment

i.e., by 2018 January, 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 drug delivery company with an international outlook is dedicated to the development and commercialization of innovative and patient compliant novel drug delivery systems such as fast disintegrating oral strips.

Shilpa Therapeutics Pvt. Ltd. (formerly NU Therapeutics Pvt. Ltd.) is the first company to commercialize prescription products as oral thin strips/films in India.

Strong technical expertise to develop thin strips/films for oral/sub-lingual/buccal delivery

As a result of continued efforts in the research and product development, Shilpa Therapeutics had developed the most sought after novel drug delivery dosage form- orally disintegrating strip/film and obtained the manufacturing and marketing licenses for this dosage form in India and abroad.

The orally disintegrating formulation resembling a postage stamp in size and shape is a taste masked, fast dissolving, convenient and potentially effective dosage form.

Vertically integrated GMP facility from Research to Commercialization

Shilpa Therapeutics facility is capable of meeting the regular commercial supply demand from manufacturing to secondary packing with its compliance to meet 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 license from the Drugs Control General (India), New Delhi for the following products and these products have also been launched in India by well established national pharmaceutical companies.

KOANAA HEALTHCARE GmbH

Molecule

Category

Ondansetron Hydrochloride 2mg , 4mg & 8mg Orally Disintegrating Strips

For the prevention of chemotherapy induced nausea and 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 was incorporated in July 2016 as 100% subsidiary of Shilpa Medicare Limited and Dr. Walter Erber took over the responsibility as CEO/Managing director. He is initiating, developing and guiding Koanaa Healthcare GmbH as a Start-Up company to a pharmaceutical company which is distributing and selling Shilpa''s oncological portfolio in Europe.

Koanaa Healthcare GmbH is being managed by a well experienced group of leaders who share the passion and dreams of Koanaa Healthcare GmbH vision of "Innovating for Affordable Healthcare". With their vast expertise in diverse sector of pharma business, our team brings on board their care, creativity, enthusiasm and commitment of achieving ''Affordable Healthcare'' for everyone. Our team is dedicated for creating value to our customers, shareholders, partners and providing care for employees at all levels in the organization.

Koanaa Healthcare GmbH will be positioned as "European Player" with Austrian basis with low prices and high service in the field of oncology with the brand "Austrian Quality". The products will prove highest standards and quality and Koanaa Healthcare GmbH will stand for Deliverability and Service 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 own commercial teams, in other territories like Northern Europe, CEE and Benelux and South Europe we are seeking for partnerships with other pharmaceutical companies.

As a very first step, Koanaa Healthcare GmbH got the approval from the AGES inspection (Austrian pharmaceutical authority) in December 2016 as a wholesaler with the official right to provide pharmaceutical products including Formulation & Filling, Packaging, Product Release, Storage and Transport. Koanaa Healthcare GmbH got subsequently on the 18 January

2017 the pharmaceutical trade certificate and went "online" with selling the first oncology products in Europe.

Imatinib was the first product which was launched in the Germany and Austria in April/May 2017. After pricing- and reimbursement and commercial activities first sales came already shortly after launch and will proceed within the next months, especially under the light that in Austria, finally reimbursement is achieved for September 2017.

With an appropriate regulatory strategy, step by step more oncological products will be part of Koanaa Healthcare GmbH''s portfolio.

The vision of Koanaa Healthcare GmbH is to develop as a successful and reliable partner within the pharmaceutical domain.

LOBA FINECHEMIE GmbH

Dr. Walter Erber took over the responsibility as CEO/Managing Director for LOBA Feinchemie GmbH from May 2016 and is leading and guiding and developing the company. With the strategic vision, to achieve sales of 10 million Euro within the next 5 years, and euphoric and challenging strategic goal is set for Loba Feinchemie GmbH

Main strategy of Loba Feinchemie GmbH is to enhance the focus in terms of resources on business development and Sales & Marketing within the next business years to support sales-and profit growth.

In the years 2017/2018 and onwards the sales will further develop and allow Loba Feinchemie GmbH to proceed with the expansion strategy in terms of production and in terms of human resources.

Reva Pharmachem (P) Ltd

The company is focused and specialised in API business with operations in Regulated and Emerging markets. The core markets are; Japan, Korea, Vietnam, Italy & Greece. The customer base has increased across markets but Japan & Korea are the front runners. We have secured foothold with the largest Oncology "Generic" Co of Japan which controls over 70% of the market. We are hopeful that in next 6 months we will 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 Akira Pharma (P) Ltd.

The core focus, expertise of the organization is to build Drug Product Business in Emerging Markets. The company has already executed agreements with key generic manufacturers who will supply their products exclusively through Reva to the consumption market. The license to the export market will be held by Reva.

MAIA Pharmaceuticals, Inc. ("MAIA"):

MAIA is a company based in USA,that engages in the research, development and commercialization of pharmaceutical products. The Company has made an investment into MAIA Pharmaceuticals, Inc. in 2013 and 2014 respectively. MAIA has

2 products commercially approved in the US and Canadian markets with an expectation of an increasing number of products commercialized in 2018-2019.

MAKINDUS INC, USA

Makindus is a specialty pharmaceutical development company focused on ophthalmology and rare diseases. Makindus'' lead asset is MI-100, a novel ophthalmic formulation of a legacy compound being developed for Stargardt disease, a rare form of juvenile macular degeneration. The estimated prevalence in the U.S. and Europe is approximately 1 in 10,000 individuals. There is currently no cure or treatments.

Makindus has been granted orphan drug designation for MI-100 for the treatment of Stargardt Disease in both the United States and Europe. The Company will benefit from a number of incentives related to orphan drug designation including market exclusivity in the US for 7 years and 10 years in Europe.

No business has done in current year (16-H). Hence we have provided the 50% diminution in the value of investments. We will see the progress in next one or two years 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. CSR Policy of the Company and other details as required is placed on the Company''s website at http://vbshilpa.com/CSRPolicy.pdf.

NOMINATION AND REMUENRATION POLICY

A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Regulation 19 of SEBI (LODR) Regulations, 2015. It has been entrusted with the task to recommend a policy of the Company on Directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation 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 the Company''s website at http://vbshilpa.com/pdf/ NominationRemunerationPolicy.pdf.

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS.

As required under the provisions of Schedule IV of the Companies Act, 2013 the performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination and Remuneration 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 ended 31st March, 2017 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2017 and of the profit and loss of the Company for the year;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud 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 be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - 1.

OTHER DISCLOSURES: Board Meetings

During the year under review, 8 (Eight) Board Meetings were held during the year. For further details, please refer Corporate Governance Report which forms part of 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 Act, 2013 and SEBI (LODR) Regulations, 2015. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Corporate Governance Report

Regulation 15 of SEBI (LODR) Regulations, 2015 is applicable to your Company, 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 on compliance 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 review as stipulated under Regulation 34 SEBI (LODR) regulations, 2015 is annexed here to and forms part of Annual Report.

Vigil Mechanism:

In pursuant to the provisions of section 117(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. Protected disclosures can be made by a whistle blower through to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company''s website at the link:

http://vbshilpa.com/pdf/Whistle_Blower_Policy.pdf

Remuneration ratio of the Directors/ Key Managerial Personnel/ Employees:

Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure - 2.

Particulars of Employees:

Statement of employees employed throughout the financial year and in receipt of remuneration of Rs. 1,02,00,000/- (Rupees One Crores Two Lakh) or more, or employed for part of the year and in receipt of Rs. 8,50,000/- (Rupees Eight Lakh Fifty Thousand) or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of 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 Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review.

DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding.

RELATED PARTY TRANSACTIONS:

Related Party Transactions entered during the financial year under review are disclosed in Note No. 43 of the Financial Statements. These transactions entered were at an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure -6.

Related Party Disclosure as per Schedule V of SEBI (LODR) Regulations, 2015 is enclosed herewith as Annexure - 7. The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed 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, 2015, Business Responsibility Report, is applicable to the Company, the same forms part of the Board Report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, EFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT.

There are no material changes and commitments effecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

5. No frauds were reported by the auditors during the year under review

Your Directors further states that during the year under review, there were no cases filed/registered pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole-hearted support. Your Directors commend all the employees of the Company for their continued dedication, 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


Mar 31, 2016

The Directors have pleasure in presenting herewith the 29th Annual Report on the business of your Company together with the Audited Accounts for the financial year ended 31st March, 2016.

FINANCIAL SUMMARY (Rs. in lakhs)

Financial Year Financial Year

PARTICULARS 2015-16 2014-15

Standalone Consolidated Standalone Consolidated

Operating Revenue (Net of ED) 67579.06 71936.62 56540.21 61379.91

Other Income 680.52 464.21 545.34 479.89

Profit before Interest, Depreciation & Tax 16928.75 15759.66 14189.78 13330.24

Interest 327.19 686.48 387.98 405.03

Depreciation 2119.03 2862.91 1908.50 2141.16

Net Profit Before Tax 14482.53 12210.27 11893.30 10784.05

Provision for taxation

a. Current Tax 3035.51 3054.08 2455.69 2487.11

b. Less: MAT credit entitlement (501.29) (501.30) (154.65) (154.65)

c. Deferred tax 915.40 214.02 1182.49 1189.12

Profit after Tax 11032.92 9871.50 8409.77 7262.48

Add: Minority Share of Loss - (506.83) - (106.64)

Profit After Tax net of Minority Interest 11032.92 10378.34 8409.77 7369.12

REVIEW OF OPERATIONS:

During the year under review the Company reported gross revenues of Rs.682.59 Cr as against Rs.570.85 Cr and a Net Profit of Rs.110.32 Cr as against Rs.84.09 Cr registering growth of 31% and 4% respectively as against in the previous year. Out of the current year profits after tax Rs.5.00 Cr has been transferred to General Reserve and Rs.5.55 Cr has been paid as interim dividend and the balance has been carried forwarded to balance sheet.

Continuous focus of the management on new line of products, research & development and strategic expansion of production/ development facilities has been yielding good results in terms of high margins. Expansion of production facilities is as per schedule. Considering the fast developments in the pharma industry the Company has started focusing on development of new process and new products.

API R&D FACILITIES

With more than two decades of presence in the industry, Shilpa Medicare Ltd has created a niche for itself in very competitive domain of oncology products. The state of the art facilities in Raichur and Vishakhapattanam R&D centers with latest equipment''s which creates backbone of making complex molecules in oncology as well as non-oncology active pharmaceutical ingredients. These R&D center are separate from production and quality control. These facilities are approved by DSIR, Government of India

The activity in R&D centers includes chemical route evaluation keeping in mind the IPR protection, identification of key process parameters and optimization of processes, Analytical method development and validation, Documentation for DMF filling, Synthesis of impurities and reference standards. The world class facilities have capability of making API from gram to kilo scale synthesis and supply of API for formulation development and clinical studies. These facilities are capable enough to handle complex reactions like alkylation, acetylation, bromination, chlorination, hydrogenation, high pressure reactions and various named synthesis.

Many complex viruses have been discovered over the past few years for which new drugs have been tried and tested all over the world. We are glad to have helped in the fight against these life taking diseases. Some of the drugs developed by these R&D centers for diseases like multiple myeloma, mental cell lymphoma, breast cancer, non-small cell lung cancer, proteasome inhibitor, chronic lymphomatic leukemia, immune modulatory agent and non-cancerous diseases like multiple sclerosis, idiopathic pulmonary fibrosis, chronic intestinal pseudo obstruction and pulmonary arterial hypertension.

As many as 11 oncology API''s and 4 non-oncology APIs have been developed in R&D and successfully transferred the technology to plant for commercial production this year another set of 18 new oncology drugs are currently under development.

Shilpa Medicare has compliance with government norms like cGMP and have got approvals from various FDA authorities from countries across the world. Maintaining high standards of quality has helped Shilpa develop trust with its partners and puts them in a favorable position amongst the top API manufacturers.

FORMULATION R&D

Formulation research Centre is concentrated in developing generic equivalents to reference listed drugs for Global Markets like USA, Europe and RoW for injectable and oral formulations used for the treatment of cancer and other indications like Multiple sclerosis, liver diseases, HIV etc.

The research centre also concentrates in the development of new formulations leading to reduced costing and enhanced stability of the drug products. Also the 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 injectable administrations.

The oral department of R&D is concentrated in developing the generic equivalents for Global Markets. The R&D team is concentrated in developing the products as Para IV and 505 ((b)2). R&D is concentrated in working on products to reduce drug product administrations for Geriatric patients.

R&D is working on development of products with target filing as First to File and Para IV filing to US FDA.

API FACILITIES

Shilpa Medicare Ltd is strong player in global markets because of its inherent strength in R&D, IPR & GMP Compliance Active Pharmaceutical Manufacturing Facilities approved by USFDA in the segments of Oncology, amino acids & non Oncology Products.

The Company has commercialized the following API Technologies & the following patents have been granted and having more than 10 API Production Blocks approved BY USFDA at its two Raichur sites.

The Investment in the robust and adequate facilities with latest technologies the Company is generating revenue of Rs.58356.48 Lacs from its API Operations.

The Company is investing consistently in R&D, R&D Facilities, personnel, IPR, across south India in the segments of Oncology, Non Oncology, Bio-similar & working on the molecules of importance down the coming years to sustain it''s growth in the API segment.

INTELLECTUAL PROPERTY MANAGEMENT (IPM) GROUP

Shilpa Medicare Limited Intellectual Property Management (IPM) Group is responsible for building Shilpa''s global generic product pipeline as well as creating, managing and protecting its high value patent estate. Shilpa has a dedicated IPM Group which provides stage wise IP-clearances during product/process development activities and also provides frequent updates and alerts on relevant IP (patent, trademark etc) to R&D scientists for products/process and suggests remedial measures to deal with IP issues. Shilpa IPM Group is involved in product selection activity to ensure that right products are selected for development.

Highlights FY 15-16:

- In FY 15-16, Shilpa filed two ANDA with paragraph IV certifications and out of which one ANDA did not received any notice from brand company.

- In FY 15-16, Shilpa has filed 45 patent applications taking the cumulative total to 189 patent applications in India and other countries. Shilpa received grants for 13 patents.

Future plan FY 16-17

- Planned to file 3 ANDA with paragraph IV certification with US FDA, out of which one could be a first-to-file ANDA.

REGULATORY FILINGS: API RAICHUR UNIT-1, UNIT-II & UNIT-IV (FORMULATION UNIT-SEZ)

US DMFs

- 7 (Seven) - All are with CA status available.

- 19 ANDA filed as on 31.03.2016 out of which 6 ANDA on Shilpa and balance 13 were on behalf of Customer using our facility. Two DMFs approved in support of ANDA review.

Europe DMFs approvals:

- 6 MAs were filed as on 31st March, 2016 out of which 4 (Four DMFs, Bortezomib, Bendamustine, Pemetrexed and Gemcitabine) were approved in support of various MAs (Bortezomib, Bendamustine, Pemetrexed and Gemcitabine).

Regulatory Approvals: PMDA-Japan, GMP clearance from TGA-Australia and USFDA.

SUB-DIVISION OF EQUITY SHARES FROM Rs.2/- TO Re.1/-

During the year under review, the Company after obtaining the approval of members at the 28th Annual General Meeting held on 28th September, 2015, divided the face value of existing equity share of Rs.2/- into two equity shares of Re.1/- each fully paid-up, with effect from the Record Date specified. Members holding shares in demat form as on the Record Date, were directly given credit to their respective beneficiary accounts and member(s) holding share(s) in physical form, was/were issued new share certificates.

DIVIDEND:

During the financial year under review your Company declared and paid an interim dividend of Re. 0.60 per share and the Directors recommended the same as dividend for the F.Y 2015-16 keeping in view the fund requirements for the on-going expansion plans. An amount of Rs.555.12 lacs inclusive of dividend distribution tax was absorbed towards the dividend for the F.Y 2015-16.

TRANSFER TO RESERVES:

We propose to transfer Rs.500 Lacs to the general reserve. An amount of Rs.9,977.79 Lacs is proposed to be retained in the P&L account.

DIRECTORS OR KEY MANAGERIAL PERSONNEL

Mr. Omprakash Inani, Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The term of all the Independent Directors of the Company shall come to an end at the ensuing Annual General Meeting, the entire Board of Directors excluding the Director being evaluated, evaluated their performance and recommends to the members to consider their re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act.

During the period under review the Company Secretary Mr. Vemuri Ajay has resigned from the services w.e.f 19.10.2015 and Mrs. Sujani Vasireddi has been appointed as Company Secretary of the Company w.e.f 01-11-2015.

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB- SECTION (6) OF SECTION 149:

The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS STATUTORY AUDITORS

At the Annual General Meeting (AGM) held on September 20, 2014, M/s. Bohara Bhandari Bung and Associates LLP, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first provison to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Bohara Bhandari Bung and Associates LLP, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.

Cost Auditors:

The Board has appointed M/s. VJ Talati &Co., Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2016-17 as recommended by the Audit Committee. As required under Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

Secretarial Auditors:

M/s P.S.Rao & Associates, Practicing Company Secretaries were appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rule 9 there-under. The Secretarial Audit Report for FY 2015-16 forms part of this Report as Annexure - 9.

The Board has appointed M/s P.S.Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2016-17.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read 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, the Company has formulated a policy on the Risk Management. The Risk Management Policy of the Company is posted on the Company''s website:www.vbshilpa.com. The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and migrate risks. Major risk to the Company apart from the general business risks related to pharmaceutical industry, is supplies at low cost countries like China and other unregulated suppliers.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, forms part of this Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries, Associates and Joint Ventures in Form AOC-1, is annexed herewith as Annexure - 5.

Further, the annual accounts of all the subsidiary companies shall be posted on Company''s website - www.vbshilpa.com.

Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

Various Audit Systems in the Company monitor and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy, Policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURES RAICHEM MEDICARE PVT LIMITED 100% EOU.

RAICHEM MEDICARE PVT LIMITED is a Subsidiary of SHILPA MEDICARE LTD and joint venture of ICE.SPA and PCA.SPA.

Raichem completed installation of all machineries during 2015- 2016 and Recruited all the key personnel, also commenced trial production in aug-2015 after the Audit by External consultant from ITALY and started commercial production in Dec-2015.

Raichem has obtained the Drug Manufacturing license and GMP certificate and consent from pollution control board for operating the plant.

Raichem will be initially manufacturing intermediates for UDCA (Ursodeoxycholic acid) until ICE SPA and PCA SPA obtain the Import License by Dec-2016.

Raichem has completed validation batches of Raw UDCA and already exported to ICE.SPA and PCA.SPA, also registration of Raichem site with PMDA-JAPAN.

Raichem will carry out New Validation batches during Oct/ Nov-2016 for improved process and yields.

INM TECHNOLOGIES PVT LTD (NANOTECHNOLOGY DIVISION)

Innovative Nano & Micro Technologies Private Limited Incorporated in the FY 2014-2015 a Subsidiary of Shilpa Medicare Ltd, Raichur. Company has a vision to serve the humanity using Nano technology products. Company drives with Strategic intent "Innovations for All Generations". Company Business Portfolio includes Nanomaterial manufacturing, Research & development in the field of Nano science & Nano (chemical and Bio) technology and Nanoformulations for pharmaceutical technology applications. State of the art facility for synthesis, characterization and analytical testing of Nano products, trained manpower for process design & monitoring has been established and includes 9 departments in the company involving major disciplines namely Biotechnology, Bio-medical, Analytical and Pharmaceutical, Chemical, Polymer, Coatings, Electronics and Smart materials.

In the area of Bio-medical sector, INM Technologies presently working on dental products with new Nanoformulation to avoid toxicity of the existing filling material, dental hemostatic gels formulation with enhanced blood clotting, and immediate release of the drug, temporary filling materials based on nano zinc oxide formulations for improved efficacy.

INM Technologies plans at launch these dental products in the first quarter of 2018. Nanoemulsions with no side effects and improved efficacy, for ocular delivery have been undertaken Nanoformulations for ophthalmic applications have global market approx. 12 billion USD and approx. Rs. 500 Crores Indian market.

Department of Coatings working towards nanostructured coatings based on simple and cost effective process. These include: hydrophilic coatings, hydrophobic coatings, self cleaning, anti reflective, UV- absorbing coatings, Heat absorbing coatings, Transparent conductive coatings, Electrochromic coatings. These nanostructured coatings for automobile, building, domestic applications have global market approx. 15 Billion USD and approx. Rs. 5,000 Crores Indian market. INM Technologies plans at launch some of these nanostructured coatings into Indian and global market by first quarter of 2018.

In the area of Pharmaceutical division, INM Technologies presently working on different pharmaceutical dosage form, namely Ophathalmics, NDDS (Novel drug delivery system), SR oral thin film, Parenteral and Dermatological formulations. We have also identifying new technologies in designing new technology based formulation.

During this financial year, we have selected three to four formulations and initiated the development of those formulations at INM Technologies. This year, we focused on conducting confirmative animal studies of these formulations. Along with we have developed two high value formulations in opthalmics and we are planning to scale up ophthalmic formulation using contract manufacturing facilities. This year, we have identified nanofibres technology to design Rapid Oral Film formulations.

The future plan of Pharmaceutical division of INM Technologies,

1. Identification of new technologies to improve constrains with existing formulations.

2. Developed formulation using new design adopting nano and micro technology.

3. Identification of portfolio, for Rapid Oral thin Film and Parenteral products.

4. Adding new products in the area of NDDS, Ophthalmic and Dermatology.

5. Focusing on improved formulation in Oral dosage formulation.

SHILPA THERAPEUTICS PVT. LTD. (FORMERLY KNOWN AS NU THERAPEUTICS PVT. LTD.)

Situated at Hyderabad, India, a progressive novel drug delivery company with an international outlook is dedicated to the development and commercialization of innovative and patient compliant novel drug delivery systems such as fast disintegrating oral strips.

Shilpa Therapeutics Pvt. Ltd. is the first company to commercialize prescription products as oral thin strips/films in India.

Shilpa Therapeutics is being lead and promoted by highly motivated professionals with extensive experience both in domestic and international pharmaceutical arena and highly qualified management professionals with a vision to develop and market innovative and patient compliant novel drug delivery systems.

Shilpa Therapeutics has a strong IP profile. Almost 10 patents has been filed in ODS space and also approval for its oral disintegrating strip products from regulatory authorities of Kenya, Uganda along with filing in several other countries at various stages.

Shilpa Therapeutics with its technical expertise, manufacturing capabilities and its finished products at various stages of registration in several countries is poised to attain promising business results in the very near future.

KOANAA HEALTHCARE GmbH

Koanaa Healthcare GmbH is 100% subsidiary of Shilpa Medicare Limited. The AGES inspection (Austrian pharmaceutical authority) will take place in Q3 2016 to be compliant in Formulation & Filling, Packaging, Product Release and Storage and Transport and to get the pharmaceutical trade certificate to go "online" with selling the first oncology products in Europe.

Koanaa Healthcare GmbH is being managed by a well experienced group of leaders who share the passion and dreams of Koanaa Healthcare GmbH vision of "Innovating for Affordable Healthcare". With their vast expertise in diverse sector of pharma business, our team brings on board their care, creativity, enthusiasm and commitment of achieving ''Affordable Healthcare'' for everyone. Our team is dedicated for creating value to our customers, shareholders, partners and providing care for employees at all levels in the organization.

Koanaa Healthcare GmbH will be positioned as "European Player" with Austrian basis with low prices and high service in the field of oncology. The products will prove highest standards and quality and we will stand for Deliverability and Service for Patients and Physicians.

In terms geographical presence we are starting in Austria (headquarter) and in Germany (with a subsidiary office) with own commercial teams, in other territories like Northern Europe, CEE and Benelux and South Europe we are seeking for partnerships with other pharmaceutical companies.

The vision of Koanaa Healthcare GmbH is to develop as a successful and reliable partner within the pharmaceutical domain.

LOBA FEINCHEMIE GmbH

Dr. Walter Erber took over the responsibility as CEO/Managing director for LOBA Finechemie GmbH from beginning May 2016.

Main strategy of Loba Finechemie GmbH is to enhance the focus in terms of resources on business development and Sales & Marketing within the next business years to support sales- and profit growth. The financial situation of Loba Finechemie GmbH already improved over the last years and will further develop extraordinarily over the next years. Main key of success will be keeping the exceptional quality and momentum for fine chemicals and especially the new orientation of Loba

Finechemie GmbH more towards a "Focus on API business" which is compared to the finechemical business more profitable.

To support the sales expansion strategy for the next years, Loba Finechemie GmbH has developed an investment plan to update the facility, the technical equipment and the capacity of the factory, and especially to invest more in human resources. Overall link in all processes is to comply to the Austrian trade law and environmental law and to have the highest possible quality standards.

REVA PHARMACHEM PVT LTD

The Company is focused and working in regulated and emerging markets. It has gained its foothold in most stringent market (Japan) with domain area contract manufacturing and Generics (Oncology & Cephalosporin''s). The Japan government (MOHLW) Ministry of Health Labour Welfare & PMDA (Japan Regulator) has aligned with DCGI (India FDA) to support facilitation of Pharma investment & generic business. Our customer base has broadened in Japan and projects secured with both Innovator & Generic companies. We are positive that by 2017 we should forge another partnership with a key big pharma co. The countries "Vietnam & Korea" are the front runners in terms of growth and revenue as part of emerging markets for the company.

Contract partnerships for dosage form {Oncology & Women Health} is the next line of operation. We are in discussion and outlying "projects" and this will business will become a key base for the company (mid to long term).

MAKINDUS INC, USA

Makindus is a specialty pharmaceutical development company focused on ophthalmology and rare diseases. Makindus'' lead asset is MI-100, a novel ophthalmic formulation of a legacy compound being developed for Stargardt disease, a rare form of juvenile macular degeneration. The estimated prevalence in the U.S. and Europe is approximately 1 in 10,000 individuals. There is currently no cure or treatments.

Makindus has been granted orphan drug designation for MI- 100 for the treatment of Stargardt Disease in both the United States and Europe. The Company will benefit from a number of incentives related to orphan drug designation including market exclusivity in the US for 7 years and 10 years in Europe.

MI-100 has shown promising results in improving visual acuity for Stargardt patients in an investigator-initiated clinical trial. Makindus has developed MI-100 in a new proprietary sterile and more convenient ophthalmic dosage form that allows for a ready-to-use multi-dose eye dropper for easy administration.

The clinical development program for MI-100 has been reviewed with the Food & Drug Administration (FDA) and European Medicines Agency (EMA). Makindus plans to file a New Drug Application (NDA) in 4Q of 2018 utilizing a streamlined 505(b)(2) regulatory pathway. Makindus is currently in discussions with interested parties to secure the needed financial support to advance MI-100 into Phase 3 clinical trial starting in the 2Q of 2017 with a target launch date of 1Q 2020.

MAIA PHARMACEUTICALS, INC, USA

MAIA Pharmaceuticals, Inc. ("MAIA") is a Princeton, New Jersey, USA based specialty pharmaceutical company founded in 2013.

MAIAs focus is to address an unmet need for a high quality, lower price pharmaceutical drugs used in the hospital that also provide product usability benefits to the end customer. MAIAs product pipeline consists of 15 niche generic and proprietary pharmaceutical products with a portfolio value of $10Bn focused on the US, European and Canadian markets

REVA MEDICARE PRIVATE LIMITED

Reva Medicare Private Limited (Reva) was incorporated on 12-02-2016, is a Joint Venture Company, promoted by your Company along with M/s Akira Pharma Private Limited. As per the understanding your Company holds 50.001% of the total equity in Reva.

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. CSR Policy of the Company and other details as required is placed on the Company''s website at http://vbshilpa.com/CSRPolicy.pdf.

NOMINATION AND REMUENRATION POLICY

A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Regulation 19 of SEBI (LODR) Regulations, 2015. It has been entrusted with the task to recommend a policy of the Company on Directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation 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 the Company''s website at http://vbshilpa.com/pdf/ NominationRemunerationPolicy.pdf.

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

As required under the provisions of Schedule IV of the Companies Act, 2013 the performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination and Remuneration Committee.

All the Independent Directors are due for re-appointment.

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 ended 31st March, 2016 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2016 and of the profit and loss of the Company for the year;

iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud 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 be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - 1.

OTHER DISCLOSURES:

Board Meetings

During the year under review, Five Board Meetings were held during the year. For further details, please refer Corporate Governance Report which forms part of 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 Act, 2013 and SEBI (LODR) Regulations, 2015. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Corporate Governance Report

Regulation 15 of SEBI (LODR) Regulations, 2015 is applicable to your Company, 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 on compliance 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 review as stipulated under Regulation 34 SEBI (LODR) regulations, 2015 is annexed hereto and forms part of this Report.

Vigil Mechanism:

In pursuant to the provisions of section 117(9)( & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. Protected disclosures can be made by a whistle blower through to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company''s website at the link: http://www.vbshilpa.com/pdf/ Whistle_Blower_Policy.pdf.

Remuneration ratio of the Directors/ Key Managerial Personnel/ Employees:

Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure - 2.

PARTICULARS OF EMPLOYEES

Statement of employees employed throughout the financial year and in receipt of remuneration of Rs. 1,02,00,000/- (Rupees One Crores Two Lakh) or more, or employed for part of the year and in receipt of Rs. 8,50,000/- (Rupees Eight Lakh Fifty Thousand) or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of 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 Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review.

DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding.

RELATED PARTY TRANSACTIONS:

Related Party Transactions entered during the financial year under review are disclosed in Note No. 41 of the Financial Statements. These transactions entered were at an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure - 6.

Related Party Disclosure as per Schedule V of SEBI (LODR) Regulations, 2015 is enclosed herewith as Annexure -7.

The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website http:// www.vbshilpa.com/policies.html.

Material Changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statement relates and the date of the report.

The Board of Directors at their Meeting held on 27th June, 2016 approved the proposal of merger of Navya Biologicals Private Limited with Shilpa Medicare Limited. The Company has filed a scheme of merger with both the Stock Exchanges seeking their No-objection Letter.

All the documents filed to the exchanges pursuant to the approval may be accessed on the Company''s website http:// www.vbshilpa.com/draft-scheme-mergers.html

During the current financial year the Company had an audit conducted by the United States Food & Drug Administration (USFDA) at the SEZ Formulations facility situated at Jadcherla in the state of Telangana has received the approval without 483 for the said facility.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

5. No frauds were reported by the auditors during the year under review

Your Directors further states that during the year under review, there were no cases filed/registeredpursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole-hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hard work and commitment.



For and on behalf of the Board of Directors

Place : Hyderabad OMPRAKASH INANI

Date : 26-08-2016 CHAIRMAN


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting herewith the 27th Annual Report on the business of your Company together with the Audited Accounts for the financial year ended 31st March, 2014.

FINANCIAL RESULTS (Rs. In Lakhs) Financial Year PARTICULARS 2013-14 Standalone Consolidated

Sales (Net of ED) 52736.81 57137.62

Other Income 885.33 907.04

Profit before Interest, Depreciation, Income Tax 13214.14 12772.81 & Exchange Fluctuation

Interest 339.74 352.41

Depreciation 2109.20 2321.79

Exchange Fluctuation Loss( )/ Income (-) 557.00 553.41

Net Profit before Tax 10208.20 9545.20

Provision for Taxation

a. Current Tax(Including Previous year) 2102.72 2143.77

b. Less: MAT credit entitlement (614.65) (614.65)

c. Deferred tax 634.45 501.13

Profit after Tax 8085.68 7514.95

Less: Share in Losses of Associates - -

Prior Period adjustment (Loss) - -

Brought forward from previous year 18215.18 17277.51

Profit available for appropriation 26300.87 24792.47

Transfer to General Reserve 810.00 810.00

Provision for proposed Dividend and dividend tax 451.03 451.03

Add: Loss pertaining to Minority Interest NA 51.98

Balance Carried to Balance Sheet 25039.84 23583.42

FINANCIAL RESULTS (Rs. In Lakhs) Financial Year PARTICULARS 2012-13 Standalone Consolidated

Sales (Net of ED) 32819.59 37132.34

Other Income 500.64 501.05

Profit before Interest, Depreciation, Income Tax 6852.32 7272.66 & Exchange Fluctuation

Interest 136.23 143.88

Depreciation 1275.36 1533.99

Exchange Fluctuation Loss( )/ Income (-) (120.40) (104.81)

Net Profit before Tax 5561.13 5699.60

Provision for Taxation

a. Current Tax(Including Previous year) 1061.11 1080.18

b. Less: MAT credit entitlement (248.19) (248.19)

c. Deferred tax 152.25 121.08

Profit after Tax 4595.96 4746.42

Less: Share in Losses of Associates - -

Prior Period adjustment (Loss) -

Brought forward from previous year 14514.76 13438.84

Profit available for appropriation 19110.72 18185.36

Transfer to General Reserve 525.00 525.00

Provision for proposed Dividend and dividend tax 370.53 370.53

Add: Loss pertaining to Minority Interest NA (12.31)

Balance Carried to Balance Sheet 18215.19 17277.51

REVIEW OF OPERATIONS:

During the year under review the Company performed well in all fronts posting good growth over 60% in sales revenues and 76% in profit after tax. Timely decisions of management in taking-up expansion/new projects, launching new products/ processes and maintaining good long-standing relationship with customers have been giving good results and taking- up the Company to next level. The management continues to concentrate on expansion of operations into formulations, high-margin products, invention of new process, maintaining specified standards in production and quality of product and effective financial management to streamline the operations to continue with growth path. Export revenues have also shown good growth by posting of Rs.33470.80 Lakhs (PY Rs. 24517.05 Lakhs) an increase of 36.5% over previous year.

DIVIDEND:

Your Directors recommended a dividend of Rs.1 i.e. 50% per equity share of Rs.2/- each for the financial year under review, absorbing an amount of Rs.451.03 Lakhs inclusive of dividend distribution tax.

During the year under review the Company has issued and allotted 1,22,62,082 bonus shares in the ratio of 1 bonus share for every 2 existing shares.

RAISING OF FUNDS :

During the current financial year i.e. 2014-15 the Company has issued and allotted 17,64,705 equity shares of Rs.2/- each at a premium of Rs.423/- on preferential basis to raise an amount of Rs.75 Crores.

EXPANSION AND NEW PROJECTS

Operations of Formulation unit are expected to commence during the current financial year after completion of testing and validation batches.

Other expansion projects ofthe Company are also progressing as per the schedule including R&D Projects.

CERTIFICATES & AWARDS:

During the year, your Company received following important approvals/awards beside state award for Best Exporter:

1. Karnataka State Export Excellence Award-District Category-2011-12.

2. EOU has completed ISO 14001:2004 surveillance audit successfully.

3. Obtained EU-GMP Compliance from Germany for Unit I & II both for two of its API.

RESEARCH & DEVELOPMENT:

Your Company continues to be committed to Research and Development of new processes/ new materials for medicines that will reduce the cost of drug to make available expensive drugs to common man at affordable price. Your Company initiated various research studies in Oncology drugs.

To strengthen quality of drugs, the Company enhanced its existing quality standards to meet the requirements of various regulatory bodies.

DEVELOPMENTS AND ACHIEVEMENTS

Till date your Company has filed about 40 PATENT applications, of which about 15 International Patent Applications(PCT), ~ 20 Indian Patent Applications (IN) and few US Patent Applications. In our endeavor for "Innovating for Affordable Healthcare", the Company successfully crossed mark of 100 patent applications entirely with in- house efforts and has also successfully filed four US-DMFs. At present the Company has 13 Nos of US DMFs available as CA (Complete assessment)

The Company also contributed to the Generic Formulation Development of Finished Dosage Forms (FDFs), both for Regulatory (US & EU) and Rest of World (ROW)markets and all new inventions for making FDFs are captured under 04 International Patent Applications (PCT) and 07 Indian Patent Applications (IN). In order to assist AIDs cure at affordable cost, the Company inked a pact with Medicine Patent Pool/ Gilead for HIV/AIDS drug. Necessary efforts are being made for the development of cost-effective and improved process of making ARVs and affordable FDFs containing ARVs.

During the year following new Projects and Expansion Projects have been taken-up:

1. Completed capacity enhancement / modification for Capacetabine.

2. Registered CDM project "Biomass Based Steam Generation Project at Raichur, India" (3926) and successfully completed the verification of the CERs earned. CDM Registry has been instructed to issue 24,294 CERs .

3. Expansion Projects of Unit-I at Raichur for new Production Block, Onco & Non Onco Ware-house are at an advanced stage of completion.

4. Formulation plant at Raichur is progressing as per schedule and expected to be completed during the current financial year.

OPERATIONS OF SUBSIDIARY COMPANIES:

During the year M/s. LOBA Feinchemie GmbH, Austria and Zatortia Holdings Ltd., has posted a loss of Rs.168.40 Lakhs as against profit of Rs.156.63 Lakhs in the previous year. The management is implementing various options to further improve the sales and turn to profitability taking into consideration the statutory regulations of Austria.

Nu Therapeutics Private Limited (NTPL), a Subsidiary Company has posted a loss of Rs.41.84 Lakhs against Profit of Rs. 3.06 Lakhs in the previous year. Installation of new packing machine has been completed. NTPL is awaiting for the approval of Government for its new products.

Raichem Medicare Private Limited (RMPL), a joint venture Company with Italian Company, has earned a profit of Rs. 62.85 Lakhs from investment of surplus funds. Civil construction works are in the final stage and the installation of plant and machinery is going on at the plant site at Raichur, Karnataka. RMPL may commence its commercial operations by end of this financial year after obtaining the necessary approvals.

DIRECTORS

Mr. Omprakash Inani, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

According to the provisions of section 149 and 152 of the Companies Act, 2013 all Independent Directors are proposed to be reappointed for a period of 2 years. Necessary resolutions have been incorporated in the notice to ensuing Annual General Meeting.

COMPLIANCE WITH GENERAL CIRCULAR No.2/2011 DATED 8TH FEBRUARY, 2011 ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

Since the Central Government had issued a general circular No. 2/2011 dated 8th February, 2011 granting general exemption from attaching annual accounts of subsidiary companies subject to fulfillment of few conditions, your Company has duly complied with the respective conditions and opted for exemption. Your Board has passed necessary resolution at its meeting held on August 11, 2011 to comply with the conditions of the circular. Statements pursuant to Section 212 of the Companies Act, 1956 relating to performance/ financials of the subsidiary companies form part of this Annual Report.

Further, the Board undertakes that the annual accounts of the subsidiary companies and the related detailed information shall be made available for inspection by any shareholder at the Registered Office of the Company during business hours and shall be provided to the shareholders who seek such information.

EMPLOYEES INFORMATION U/S 217 (2A) OF THE COMPANIES ACT, 1956 :

Details of employees drawing remuneration exceeding limits prescribed U/s 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is attached with the report.

DEPOSITS :

The Company has not accepted any deposits which cover under the section 58A of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to Section 217 (2AA) of the Companies Act, 1956 your Directors'' confirm that:

i. In preparation of annual accounts for the financial year ended 31st March, 2014 the applicable Accounting Standards have been followed.

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the Company at the end of the financial year ended 31st March, 2014 and of the profit and loss of the Company for the year.

iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

iv. The Directors have prepared the annual accounts on a ''going concern'' basis.

COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information is given as Annexure to this report.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges. Report on Corporate Governance including Auditor''s Certificate on compliance with the code of Corporate Governance under Clause 49 of the Listing Agreement is enclosed as Annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the year under review is annexed hereto and forms part of the Annual Report.

AUDITORS

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013, on rotation of audit firms, and based on the recommendation of the Audit Committee, the Board recommends the re-appointment of M/s. Bohara Bhandari Bung and Associates, Chartered Accountants, as the Statutory Auditors of the Company to hold office from conclusion of this Annual General Meeting for a period of 3 years in accordance with the Act, subject to the ratification of shareholders at every Annual General Meeting. M/s. Bohara Bhandari Bung and Associates, Chartered Accountants, have confirmed that the appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013. Accordingly, the appointment of M/s. Bohara Bhandari Bung and Associates, Chartered Accountants, as the Statutory Auditors, is being proposed as an Ordinary Resolution.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole- hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hardwork and commitment.

For and on behalf of the Board of Directors

Place : Raichur OMPRAKASH INANI Date : 14th August,2014 CHAIRMAN


Mar 31, 2013

To, The Shareholders,

The Directors have pleasure in presenting herewith the 26th Annual Report on the business of Your Company together with the Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS (Rs. In Lakhs)

Financial Year Financial Year PARTICULARS 2012-13 2011-12 Stand alone Consoli dated Stand alone Consoli dated

Sales (Net of ED) 32819.59 37132.34 27,975.94 31,818.19

Other Income 500.64 501.05 778.60 828.16

Profit before I nterest, Depreciation, Income Tax & 6852.03 7272.66 6,707.67 7,240.71 Exchange Fluctuation

Interest 135.94 143.60 149.20 167.41

Depreciation 1275.36 1533.99 1,143.85 1,436.24

Exchange Fluctuation Loss( )/ (120.40) (104.81) 285.41 286.26 Income (-)

Net Profit before Tax 5561.13 5699.88 5,129.21 5,350.80

Provision for Taxation

a. Current Tax 1061.11 1080.18 1,080.19 1,090.41

b. Less: MAT credit entitlement (248.19) (248.19) (308.21) (310.80)

c. Deferred tax 152.25 121.08 382.47 442.83

Profit after Tax 4595.96 4746.80 3,974.76 4,128.35

Less: Share in Losses of Associates - - - -

Prior Period adjustment (Loss) - (0.28) - (16.97)

Brought forward from previous year 14514.76 13438.94 11,321.52 10,096.62

Profit available for appropriation 19110.72 18185.46 15296.28 14208.00

Transfer to General Reserve 525.00 525.00 525.00 525.00

Provision for proposed Dividend and dividend tax 370.53 370.53 256.52 256.52

Add: Loss/(Profit) pertaining to Minority rate NA (12.31) NA 12.46

Balance Carried to Balance Sheet 18215.19 17227.52 14514.76 13438.94

Review of Operations:

Your Company maintained its growth with sales registering a growth of 17.31%. Despite competition, material cost increases and significant investments in expansion, Profit before Tax grew by 8.42%, and Profit before Interest, Depreciation, Exchange fluctuation and Tax grew by 2.15% over previous year. Cash generation from Operations continued favorable, driven by business performance and management of working capital. Your Company continues to concentrate on better working capital management and fund raising to meet its future expansion plans.

During the year, your Company has continued to export to various countries and earned valuable foreign exchange of Rs.24517.05 Lacs (PY Rs. 22,791.75 lacs).

Dividend:

Your Directors recommended dividend of Re.1.30 i.e. 65% (Rs.0.90 i.e.45%) per equity share of Rs.2/- each for the financial year under review absorbing an amount of Rs.370.53 lacs (PY 256.52 Lacs) inclusive of dividend tax.

Bonus Shares:

Your Directors recommended a bonus issue in the ratio of 1 (One) bonus share for every 2 (two) existing shares at their meeting held on 29th May, 2013. The Company is in the process of compliance of bonus issue procedures.

Research & Development:

Your Company continues to be committed to Research and Development of new processes/ new materials for medicines that will reduce the cost of drug to make available expensive drugs to common man at affordable price. Your Company initiated various research studies in Oncology drugs.

To strengthen quality of drugs, the Company enhanced its existing quality standards to meet the requirements of various regulatory bodies.

Key Achievements for the Financial Year 2012-13 With Shilpa Medicare Ltd.''s rapid expanding R&D activities in the last few years, Year 2012-13 has generated extensive intangible assets (as patent/ trademark) to align its upcoming

Key Business Strategies in the Pharma domain successfully.

In view of maintaining its leading role in Pharma business, particularly focusing on ONCOLOGY APIs and Formulations, R&D centres at RAICHUR & VIZAG have generated significant amount of patentable work, which expectedly may have meaningful impact on our future business aiming for affordable healthcare.

Patents filed in the FY 2012-2013 :

- 18 Patent Applications —Filed in INDIA

- 02Trademark Applications —Filed in INDIA

- 4 Patent Applications —Filed in USA

- 3 Patent Applications —Filed in Europe (EPO)

- 1 Patent Application —Filed in Japan

- 7 International Patent Applications —Published as PCT

- 2 New International Patent Applications —Filed as PCT DMFs filed in the FY 2012-2013

ImatinibMesylate : China BendamustineHCl : Austria, Cyprus, Denmark,

Finland,Iceland, Ireland, Norway, Poland,Slovakia, Spain Busulfan : TGA-Australia

Irinotecan : Hungery, Romania, Slovania,

Temozolomide : KFDA-Korea, Swedan.

Capecitabine : TGA-Australia, Zoledronic Acid - Swedan.

Product Transfer during from April 2012 to March 2013 for commercial production.

1. Azacytidine

2. Decitabine

3. Letrozole USP

4. Docetaxel (open side chain) EP

5. Gabapentin USP/EP

6. Imatinib Mesylate (New ROS)

The Company has implemented the energy Efficient technologies and utilised renewable energy for its energy requirements and has established biomass based steam Generation unit which has reduced the emission of green house gases per year , that produce Thermal Energy for it''s process Requirements which is qualified as Clean Development Methods ( CDM) Project under Kyoto protocol and Registered this project with UNFCC under CDM, with the project identification No. 3926 on 25th Dec 2010,

The project activity was undertaken as a CDM (Clean Development Mechanism) under Kyoto Protocol in 2008. Reputed validation firm DNV (Det Norske Veritas) was appointed for carrying out the CDM validation and finally the project was finally with UNFCCC on 25th December 2010

The Monitoring Report from ist January 2011 to October 2012 was prepared for Verification and DNV has verified the figures as quoted in the monitoring report and finally the project has been submitted to UNFCCC for issuance of the CER''s .

The Company has earned 24900 CER''s during this period Apart From the above the Company has Implemented other Energy saving Measures and has conserved both Electrical &Thermal Energy as given bellow :

Sl. No Description UOM 2010-11 2011-12

1 Specific Electrical KWH/ 18349 15122 Energy Consumption MT

Specific Thermal MKcal/ 70.30 66 Energy Consumption MT

The Company has Secured National Energy Conservation award -2012, First prize in Pharmaceutical Sector from Government of India, Ministry of Power and the award was conferred by President of India

The Company is committed to being a responsible steward of the environment for the well being our employees, stakeholders and the community at large. In this process the company was certified for ISO14001.

Expansion And New Projects

With the merger of Raichem Life Sciences Private Limited the operations will be expanded into formulations. Testing of machinery and other equipment is in progress and other work is as per the schedule. Commercial operations of formulations plant are expected to be commenced by middle of the current financial year.

Other expansion projects of the Company are also progressing as per the schedule including R&D Projects.

Certificates & AWARDS:

During the year, your Company received following important approvals/awards beside state award for Best Exporter: Shilpa: i) Certificate of GMP compliance of manufacturer from "Freie Und Hansestadt- Hamburg" for Deosugur and EOU sites; ii) National Energy Conservation Award for the year 2012 in "Drugs and Pharmaceuticals Sector".

Loba Feinchemie, Subsidiary Company became one of the 100 Companies of Austria, which were certified for quality as per ISO-9000 Standards for longest period i.e. 20(Twenty) continuous years.

Merger Of Raichem Life Sciences Private Limited

With the approval of High Court of Andhra Pradesh vide its order dated 31st August, 2012 Raichem Life Science Private Limited (RLSPL), a 100% subsidiary Company, has been merged with the Company w.e.f. 01-04-2011 being the appointed date for merger.

Wos Companies'' Operations

During the year M/s. LOBA Feinchemie GmbH, Austria has posted a profit of Rs.161.02 lacs. Slowly the operations are stabilizing and it is expected to improve the margins and sales. Nu Therapeutics Private Limited (NTPL), a subsidiary Company has posted a profit of Rs.3.06 lacs for the year ended 31st March, 2013. Installation of new packing machine has been completed. Land has been acquired for expansion plans. NTPL is awaiting for the approval of Government for its new products. Raichem Medicare Private Limited (RMPL), a joint venture company with Italian Company, has earned a profit of Rs. 22.68 lacs from investment of surplus funds. Company started the civil construction works of plant at Raichur, Karnataka after obtaining the necessary approvals and also placed orders for major equipments and machineries.

Directors

Mr. Rajender Sunki Reddy, Mr. N.P.S.Shinh and Mr. Omprakash Inani Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Compliance With General Circular No.2/2011 Dated 8Th February, 2011 Issued By The Ministry Of Corporate Affairs Under Section 212(8) Of The Companies Act, 1956

Since the Central Government had issued a general circular No. 2/2011 dated 8 th February, 2011 granting general exemption from attaching annual accounts of subsidiary companies subject to fulfillment of few conditions, your Company has duly complied with the respective conditions and opted for exemption. Your Board has passed necessary resolution at its meeting held on August 11, 2011 to comply with the conditions of the circular. Statements pursuant to section 212 of the Companies Act, 1956 relating to performance/ financials of the subsidiary companies form part of this Annual Report. Further, the Board undertakes that the annual accounts of the subsidiary companies and the related detailed information shall be made available for inspection by any shareholder at the Registered Office of the Company during business hours and shall be provided to the shareholders who seek such information.

Employees Information U/S 217 (2A) Of The Companies Act, 1956.

Details of employees drawing remuneration exceeding limits prescribed U/s 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) rules, 1975 is attached with the report.

Deposits

The Company has not accepted any deposits which cover under the section 58A of the Companies Act, 1956.

Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956 Your Directors'' confirm that:

i. In preparation of annual accounts for the financial year ended 31st March, 2013 the applicable Accounting Standards have been followed.

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the Company at the end of the financial year ended 31st March, 2013 and of the profit and loss of the Company for the year.

iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

iv. The Directors have prepared the annual accounts on a ''going concern'' basis.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo

As required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the information is given as Annexure to this report.

Corporate Governance

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges. Report on Corporate Governance including Auditor''s certificate on compliance with the code of Corporate Governance under Clause 49 of the Listing Agreement is enclosed as Annexure to this report.

Management Discussion And Analysis

A report on the Management Discussion and Analysis for the year under review is annexed hereto and forms part of the Annual Report.

Auditors

The Statutory Auditors of the Company, M/s Bohara Bhandari Bung and Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board recommended the re-appointment of M/S Bohara Bhandari Bung and Associates, Chartered Accountants, as Statutory Auditors of your Company.

Acknowledgements

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole- hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hardwork and commitment.

For and on behalf of the Board of Directors

Place : Raichur OMPRAKASH INANI

Date : 20-06-2013 CHAIRMAN


Mar 31, 2012

The Shareholders,

The Directors have pleasure in presenting herewith the 25th Annual Report on the business of your Company together with the Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL RESULTS ( Rs. In Lakhs)

Financial Year Financial Year Particulars 2012 2011

Standalone Consolidated Standalone Consol -idated

Sales (Net of ED) 27,845.48 31,818.19 25,754.35 29,028.57

Other Income 1,015.79 828.16 531.25 515.25

Profit before Interest, Depreciation 7,022.95 7,240.71 7,432.05 7,534.29 Income Tax & Exchange Fluctuation

Interest 148.24 167.41 184.74 205.84

Depreciation 1,142.20 1,436.24 1,042.10 1,295.74

Exchange Fluctuation Loss( )/Income (-) 285.41 286.26 (378.44) (379.96)

Net Profit before Tax 5,447.10 5,350.79 6,583.65 6,412.68

Provision for Taxation

a. Current Tax 1,080.19 1,090.41 1,329.00 1,330.06

b. Less: MAT credit entitlement (308.21) (310.80) - -

c. Deferred tax 380.75 410.73 162.11 129.94

Profit after Tax 4,294.37 4,160.45 5,092.54 4,952.68

Less: Share in Losses of Associates - - - 10.00

Prior Period adjustment (Loss) - (16.97) (4.31) (17.89)

Brought forward from previous year 11,487.03 10,124.42 7,147.92 5,948.66

Profit available for appropriation 15,781.40 14,267.90 12,236.14 10,873.54

Transfer to General Reserve 525.00 525.00 525.00 525.00

Provision for proposed Dividend Tax 256.52 256.52 224.11 224.11

Add: Loss pertaining to Minority Interest NA (12.46) NA (0.09)

Balance carried forward to next year 14,999.88 13,498.84 11,487.03 10,124.42

REVIEW OF OPERATIONS :

Your Company has achieved a turnover of Rs. 278.45 Crs. (Rs.257.54 Crs.) and profit before interest, depreciation and tax (PBDIT) of Rs.70.23 Crs (74.32 Crs) for the year ended March 31, 2012. The net profit is Rs.42.94 Crs as against Rs.50.93 Crs in the previous year. The Company''s policy to maintain quality and consistency has been giving good returns by way of long-standing good customer base for the Company due to which the Company is able to maintain its margins though there was a stiff competition particularly from China and other pharma companies. The net profit in terms of EPS is Rs.17.87 against Rs.22.08 in the previous year.

EXPORTS :

During the year, your Company has continued to export to various countries and earned valuable foreign exchange of Rs. 22,791.75 Lacs ( Rs.19,741.71 Lacs). This has been recognized by the FKCCI, Bangalore and VITC, Bangalore by bestowing the Best District Exporter and Best Exporter in the category respectively.

Your Company has given utmost thrust on filing DMFs in various countries including Canada, EU Countries,USA and China for marketing Company''s products in these Countries.

During the year, your Company received ISO-14001-2004 Certificate from the British Certifications Inc. RESEARCH & DEVELOPMENT :

Your Company attaches utmost importance to Research and Development activities which is essential for survival and future growth of any organization. Company''s continuous efforts in this area only. It invented various APIs in Oncology. Company''s R & D facilities at Vizag has received the recognition by DSIR during the year.

Your Company has made significant investments in generating clean energy by commissioning biomass fired boilers which has also been registered as CDM Project. This project will generate Certified Emmission Reductions (CERs). This is expected to generate more than 3 lacs of CERs in a span of 8 years.

DIVIDEND :

Your Directors have recommended dividend of Rs.0.90 i.e. 45% (Rs.0.80 i.e.40%) per equity share of Rs.2/- each for the financial year under review absorbing an amount of Rs. 256.52 lacs inclusive of Dividend Tax.

SHARE CAPITAL :

During the year the Company has issued and allotted 5,00,000 equity shares of Rs.2/- each at a premium of Rs.348/- to the Promoters and PACs on preferential basis.

WOS COMPANIES'' OPERATIONS :

Raichem Life Sciences Private Limited (RLSPL) a 100% subsidiary Company has posted a net loss of Rs.59.14 lacs for the year ended 31st March, 2012. Efforts are being made to stabilize the marketing network of the Company.

Application for merger of Raichem of Life Sciences Pvt. Ltd. with Shilpa Medicare Ltd. is under consideration of the Hon. High Court of Andhra Pradesh.

STRATEGIC INVESTMENTS :

During the year Nu Therapeutics Private Limited (NTPL) in which your Company had invested, commenced the commercial production and earned cash profit. To enhance the production, Capex plan is drawn and being executed.

During the year, your Company also invested an amount of Rs.164.98 lacs in Raichem Medicare Private Limited (RMPL) a Joint Venture Company. With this investment RMPL has become a subsidiary of the Company as per section 4 of the Companies Act, 1956.

Raichem Medicare Private Limited, a joint venture company has started the civil construction of plant at Raichur, Karnataka after obtaining the necessary approvals and also finalised Civil Work & POs for major machineries of long delivery schedule have been placed. Barring unforeseen eventually, plant''s errection should be completed by March, 2013.

DIRECTORS

Mr. Venugopal Loya and Mr. Pramod Kasat, Directors retires by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COMPLIANCE WITH GENERAL CIRCULAR No.2/2011 DATED 8th FEBRUARY, 2011 ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956.

Since the Central Government had issued a general circular No. 2/2011 dated 8th February, 2011 granting general exemption from attaching annual accounts of subsidiary companies subject to fulfillment of few conditions, your Company has duly complied with the respective conditions and opted for exemption. Your Board has passed necessary resolution at its meeting held on August 11, 2011 to comply with the conditions of the circular. Statements pursuant to section 212 of the Companies Act, 1956 relating to performance/ financials of the subsidiary companies form part of this Annual Report.

Further, the Board undertakes that the annual accounts of the subsidiary companies and the related detailed information shall be made available for inspection by any shareholders at the Registered Office of the Company during business hours and shall be provided to the shareholders who seek such information.

DIRECTORS INFORMATION U/S 217 (2A) OF THE COMPANIES ACT, 1956.

Details of employees drawing remuneration exceeding limits prescribed U/s 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) rules, 1975 is attached with the report.

FIXED DEPOSITS

The Company has not accepted any deposits which cover under the section 58A of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956 your Directors'' confirm that:

i. In preparation of annual accounts for the Financial Year Ended 31st March, 2012 the applicable Accounting Standards have been followed.

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the Company at the end of the financial year ended 31st March, 2012 and of the profit and loss of the Company for the year.

iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

iv. The Directors have prepared the Annual Accounts on a ''going concern'' basis.

COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information is given as Annexure to this report.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges. Report on Corporate Governance including Auditor''s Certificate on compliance with the Code of Corporate Governance under Clause 49 of the Listing Agreement is enclosed as Annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the year under review is annexed hereto and forms part of the Annual Report.

AUDITORS

The Statutory Auditors of the Company, M/s Bohara Bhandari Bung And Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit committee and the Board recommended the re-appointment of M/s. Bohara Bhandari Bung And Associates, Chartered Accountants, as Statutory Auditors of your Company.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude to the Central and State Governments, Investors, Analysts, Financial Institutions, Banks, Business Associates and Customers, the Medical Profession, Distributors and Suppliers for their whole hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hardwork and commitment.

By order of the Board of Directors For Shilpa Medicare Limited

Place : Hyderabad Omprakash Inani

Date : 10th August, 2012 Chairman


Mar 31, 2011

The Shareholders,

The Directors have pleasure in presenting herewith the 24th Annual Report on the business of Your Company together with the Audited Accounts for the financial year ended 31st March, 2011.

FINACIAL RESULTS (Rs. In Lakhs)

Financial Year Financial Year

PARTICULARS 2010-11 2009-10

Standalone Consolidated Standalone Consolidated

Sales (Net of ED) 25,754.35 29,028.57 23,445.97 26,491.20

Other Income 531.25 515.25 111.94 177.45

Profit before Interest, Depreciation, Income Tax 7,432.04 7,536.52 7,783.67 7,765.41 & Exchange Fluctuation

Interest 184.74 206.01 504.04 542.29

Depreciation 1,042.10 1,297.78 976.47 1,271.61

Exchange Fluctuation (Gain) / Loss (378.44) (379.96) (421.26) (417.86)

Net Profit before Tax 6,583.64 6,412.68 6,724.43 6,369.37

Provision for Taxation

a. Current Tax 1,329.00 1,330.06 1,840.00 1,841.46

b. Deferred Tax 162.10 129.94 283.15 268.40

Profit after Tax 5,092.53 4,952.69 4,601.28 4,259.51

Less: Share in Losses of Associate – 10.00 – —

Prior Period adjustment (Loss) (4.31) (17.89) 10.66 4.68

Brought forward from previous year 7,147.92 5,948.66 3,216.35 2,364.75

Profit & Loss A/c Balance before transfer to 12,236.14 10,873.46 7,828.29 6,628.94

General Reserve

Transfer to General Reserve 525.00 525.00 500.00 500.00

Provision for proposed Dividend and dividend tax 224.11 224.11 180.37 180.37

Add: Loss pertaining to Minority Group NA (0.09) – 0.09

Balance carried to Balance Sheet 11,487.03 10,124.42 7,147.92 5,948.66

REVIEW OF OPERATIONS :

Your Company has achieved a turnover of Rs. 257.54 Crs. (Rs. 234.46 Crs.) and profit before interest, depreciation and tax (PBDIT) of Rs. 78.10 Crs. for the year ended March 31, 2011. The net profit is Rs. 50.93 Crs. as against Rs. 46.01 Crs. in the previous year. The Company's policy to maintain quality and consistency has been giving good returns by way of long-standing good customer base for the Company due to which the Company is able to maintain its margins though there was a stiff competition particularly from China and other pharma companies. The net profit in terms of EPS is Rs. 22.08 against Rs. 20.89 in the previous year.

EXPORTS :

During the year, your Company has continued to export to various countries and earned valuable foreign exchange of Rs. 19,741.71 Lacs (Rs. 16,863.90 Lacs). This has been recognized by the FKCCI Bangalore and VITC Bangalore by bestowing the Best District Exporter and Best Exporter in the category respectively.

Certificates:

During the year, your Company received following important approvals related to Oncology products :

TGA - Australia PMDA - Japan Health - Canada

BSG - Hamburg INFARMED - Portugal Afssaps - France

In - House R & D recognised by DSIR - India

RESEARCH & DEVELOPMENT

Your Company attaches utmost importance to Research and Development activities which is essential for survival and future growth of any organization. Due to Company's continuous thrust in this area only it invented various API's in Oncology. Company's R & D facilities have received the recognition by DSIR during the year.

Shilpa Medicare has made significant investments in generating clean energy which is the only project of its kind in PHARMA Industry.

The company has commissioned biomass fired boilers of capacity 6 &10 TPH, considering Clean Development Mechanism (CDM), an instrument established under the Kyoto Protocol, in view to contribute to the mitigation of climate change. On 25th Dec, 2010 under the United Nations Framework Convention on Climate Change (UNFCCC), the company in association with the consulting firm First Climate (India) Pvt. Ltd. got the Biomass based steam generation project registered as a CDM project activity titled "Biomass Based Steam Generation Project at Raichur, India". This CDM project activity will be able to generate around 350,000 Certified Emission Reductions (CERs) in its ten years of crediting period up to 31st December, 2020.

DIVIDEND

Your Directors recommended dividend of Rs. 0.80 i.e. 40% (Rs. 0.70 i.e.35%) per equity share of Rs. 2/- each for the financial year under review abserbing an amount of Rs. 224.11 lacs inclusive of dividend tax.

CAPITAL

During the year the Company has issued and allotted 2,000,000 equity shares of Rs. 2/- each at a premium of Rs. 348/- to M/s. Baring India Private Equity Fund III Limited on preferential basis and also issued and allotted 500,000 share warrants carrying a right to subscribe to equal number of equity shares of Rs. 2/- at the price of Rs. 350/- per share (including premium) to the Promoters and PACs.

WOS COMPANIES' OPERATIONS

During the year M/s. LOBA Feinchemie GmbH, Austria has turned around in the last quarter and posted a nominal profit. It is expected that the operations would further improve this year to post profits.

Raichem Lifesciences (P) Limited (RLSPL), a 100% subsidiary Company has posted a net loss of Rs. 59.27 lacs for the year ended 31st March, 2011. Marketing operations of this Company are satisfactory. RLSPL has started the civil construction works of formulation unit, at Forma SEZ, Jedcherla, Andhra Pradesh after obtaining the necessary approvals.

STRATEGIC INVESTMENTS

During the year the Company has invested in Nu Therapeutics (P) Limited (NTPL) to acquire a strategic stake. In the current financial year the Company has agreed to acquire further Shares from promoters of NTPL. After such acquisition, the NTPL would become a subsidiary of the Company.

During the year the Company also invested an amount of Rs. 133.35 lacs in Raichem Medicare Private Limited (RMPL) a Joint Venture Company. With this investment RMPL has become a subsidiary of the Company as per Section 4 of the Companies Act, 1956.

DIRECTORS

During the year Mr. Ajeet Singh Karan has been co-opted as Additional Director w.e.f. 28th January, 2011 to act as an Independent Director. A notice in writing under Section 257 read with Section 190 of the said Act, along with a deposit of Rs. 500/- proposing his candidature for the office of Director of the Company has been received to appoint him as a Director of the Company whose period of office shall be determinable by retirement of Directors by rotation."

Mr. Omprakash Inani, Mr. Carlton Felix Pereira and Dr. Abhay B. Upasani will retire at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

COMPLIANCE WITH GENERAL CIRCULAR No.2/2011 DATED 8TH FEBRUARY, 2011 ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

Since the Central Government had issued a general circular No. 2/2011 dated 8th February, 2011 granting general exemption from attaching annual accounts of subsidiary companies subject to fulfillment of few conditions, your Company has duly complied with the respective conditions and opted for exemption. Your Board has passed necessary resolution at its meeting held on August 11, 2011 to comply with the conditions of the circular. Statements pursuant to Section 212 of the Companies Act, 1956 relating to performance/ financials of the subsidiary companies form part of this Annual Report.

Further, the Board undertakes that the annual accounts of the subsidiary companies and the related detailed information shall be made available for inspection by any shareholders at the Registered Office of the Company during business hours and shall be provided to the shareholders who seek such information.

DIRECTORS' INFORMATION U/S 217 (2A) OF THE COMPANIES ACT, 1956.

Details of employees drawing remuneration exceeding limits prescribed U/s 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 is attached with the report.

FIXED DEPOSITS

The Company has not accepted any deposits which cover under the Section 58A of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956 Your Directors' confirm that:

i. In preparation of annual Accounts for the Financial Year ended 31st March, 2011 the applicable Accounting Standards have been followed.

ii. The Directors' have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the Company at the end of the financial year ended 31st March, 2011 and of the profit and loss of the Company for the year.

iii. The Directors' have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

iv. The Directors have prepared the Annual Accounts on a 'going concern' basis.

COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the information is given as Annexure to this report.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges. Report on Corporate Governance including Auditor's certificate on compliance with the code of Corporate Governance under Clause 49 of the Listing Agreement is enclosed as Annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the year under review is annexed hereto and forms part of the Annual Report.

AUDITORS

The Statutory Auditors of the Company, M/s Bohara Bhandari Bung And Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board recommended the re-appointment of M/s Bohara Bhandari Bung And Associates, Chartered Accountants, as Statutory Auditors of your Company.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole-hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hardwork and commitment.

For and on behalf of the Board of Directors

Place : Hyderabad Omprakash Inani

Date : 11th August, 2011 Chairman


Mar 31, 2010

The Directors have pleasure in presenting herewith the 23rd Annual Report on the business of Your Company together with the Audited Accounts for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

Financial Year

PARTICULARS 2009-10

Standalone Consolidated

Sales (Net of ED) 23445.97 26491.20

Other Income 111.94 177.45

Profit before Interest,

Depreciation, Income tax

& Exchange Fluctuation 7783.67 7765.41

Interest 504.04 542.29

Depreciation 976.47 1271.61

Exchange Fluctuation Loss

(+)/Income (-) -421.26 417.86

Net profit before tax 6724.43 6369.37

Provision for taxation

a. Current tax 1840.00 1841.46

b. Deferred tax 283.15 268.40

c. Fringe Benefit Tax 0.00 0.00

Profit after tax 4601.28 4259.51

Prior period adjustment (Loss) 10.66 4.68

Brought forward from previous year 3216.35 2364.75

Profit before transfer to

General Reserve 7828.29 6628.94

Transfer to General Reserve 500.00 500.00

Provision for proposed Dividend

and Dividend Tax 180.37 180.37

Add : Loss pertaining to

Minority share - 0.09

Balance carried to Balance Sheet 7147.92 5948.66

(Rs. in lakhs)

PARTICULARS Financial Year

2008-09

Standalone Consolidated

Sales (Net of ED) 13595.51 16643.22

Other Income 74.73 103.64

Profit before Interest,

Depreciation, Income tax

& Exchange Fluctuation 3748.83 3301.14

Interest 499.52 576.75

Depreciation 604.37 941.10

Exchange Fluctuation Loss

(+)/Income (-) 1042.86 1027.26

Net profit before tax 1602.08 756.03

Provision for taxation

a. Current tax 525.00 524.88

b. Deferred tax 332.18 332.18

c. Fringe Benefit Tax 3.20 3.20

Profit after tax 741.70 -104.23

Prior period adjustment (Loss) 14.79 14.79

Brought forward from previous year 2688.69 2682.94

Profit before transfer to General Reserve 3445.18 2593.50

Transfer to General Reserve 100.00 100.00

Provision for proposed Dividend and Dividend Tax 128.84 128.84

Add : Loss pertaining to Minority share - 0.08

Balance carried to Balance Sheet 3216.34 2364.74



FINANCIAL PERFORMANCE

Your Company scaled and recorded newer heights and benchmarks in terms of sales and profits for the year ended March 31, 2010. Your Company recorded all time high net sales of Rs.23445.97 Lacs (Rs.13595.51 Lacs) recording a growth of 72.45 %. It recorded net profit (after tax) of Rs.4601.28 lacs (Rs.741.70 Lacs ) growth of 520.36% over the previous year due to good margins in the oncology products and increase in production of other products. The net profit in terms of EPS is Rs.20.89 against Rs.3.40 in the previous year.

During the year under review the Company has performed very well in all product segments recording new customers from various countries. Operations of EOU stabilized and the Company is expecting better volumes in the future from this unit.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.0.70 i.e. 35% (Rs.0.50 i.e. 25%) per equity share of Rs.2/- each for the financial year under review absorbing an amount of Rs.180.37 lacs inclusive of tax on dividend.

SUBSIDIARIES

Operations of M/s. Loba Feinchemie GmbH, Austria are satisfactory and registered cash profit during the financial year. It is expected that it would breakeven during the year.

Raichem Lifesciences Private Limited, a 100% Subsidiary Company started its marketing operations and is receiving good response from the market.

AWARDS & CERTIFICATIONS

During the year under review the Company achieved the following:

Date Details description of Achievements/Certifications (2009-10)

19.03.2009 Non-Oncology APIs registered in Taiwan

24.03.2009 Recognition & ranked 172nd for its superior financial performance during 2007-08 from SMB Awards

(Industry 2.0 Magazine)

23.09.2009 Filed USDMF of Anastrozole with USFDA (23123)

19.10.2009 Ambroxol MF Holder & Site Registered with PMDA, Japan

15.01.2010 Filed USDMF of Temozolomide with USFDA (23479)

21.01.2010 Patent Filed for Novel Polymorphic Form of Bortezomib (160/CHE/2010)

29.01.2010 Filed USDMF of Irinotecan HCl Trihydrate with USFDA (23562)

11.02.2010 Filed USDMF of Oxaliplatin with USFDA (23563)

11.03.2010 Site inspected Effectively by TGA, Australia

Further, during the period April10 to Aug10 following important events have happened:

05.05.2010 Export Excellence Award-2010 received from FKCCI, Bangalore

08.06.2010 Obtained EUGMP Certificate for Gemcitabine HCl EP from AFSSAPS, France

15.06.2010 Obtained ISO 9001:2008 Certification for Raichem Lifesciences Pvt Ltd

16.07.2010 State Export Excellence Award-2007-08 & 2008-09 from VITC,Bangalore

28.07.2010 Obtained EUGMP Certificate for Temozolomide (Unit-1) & Capecitabine (Unit-2) from BSG, Hamburg

29.07.2010 Obtained EUGMP Certificate for Anastrozole, Irinotecan & Oxaliplatin from INFARMED, Portugal

INVESTMENTS

During the year the Company has completed 100% EOU Project and stabilized its operations and total sum of Rs 97.42 Crs till date incurred towards the capital expenses.

Operation of Subsidiaries:

Company has invested Rs 281 lacs in the Raichem Lifesciences Private Limited, a WOS of the Company to meet its capital and operational expenses. During the year this subsidiary has commenced its commercial operations.

Your Company has invested Rs77.25 lacs in Raichem Medicare Private Limited an Associate and proposed joint venture with Italian Company.

During the period the Company also invested Rs.10.00 lac in Reva Pharmachem Private Limited an Associate of the Company in which the Company holds 47.54% of shareholding.

DIRECTORS INFORMATION U/S 217(2A) OF THE COMPANIES ACT, 1956.

Details of employees drawing remuneration exceeding limits prescribed U/s 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is attached with the report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 Your Directors confirm that:

i. In preparation of annual accounts for the financial year ended 31st March, 2010 the applicable Accounting Standards have been followed.

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2010 and of the profit and loss of the Company for the year.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Company Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and.

iv. The Directors have prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the information is given as Annexure to this report.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges. Report on Corporate Governance including Auditors Certificate on compliance with the code of Corporate Governance under Clause 49 of the listing agreement is enclosed as Annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the year under review is annexed hereto and forms part of the Annul Report.

AUDITORS

The Statutory Auditors of the Company, M/s. Bohara Bhandari Bung And Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board recommend the re-appointment of M/S. Bohara Bhandari Bung And Associates, Chartered Accountants, as Statutory Auditors of your Company.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude to the Central and State Governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole-hearted support. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hard work and commitment.

For and on behalf of the Board of Directors

Sd/-

Place :Raichur Omprakash Inani

Date :01st September, 2010 Chairman

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