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Directors Report of Marksans Pharma Ltd.

Mar 31, 2023

The Directors take pleasure in presenting the THIRTY FIRST (31st) Annual Reports along with the financial statements for the year ended 31st March, 2023.

FINANCIAL HIGHLIGHTS

(Rs. in Million)

Particulars

2022-23

2021-22

Turnover

6,552.04

6,582.89

Profit before Depreciation & Amortization expenses, Non-recurring expenses and Tax expenses

1,487.72

1,521.71

Less: Depreciation & Amortization Expenses

167.37

176.63

Non-recurring expenses

-

-

Tax expenses

291.69

305.20

Profit after Tax

1,028.66

1,039.88

OPERATIONS/STATE OF AFFAIRS OF THE COMPANY

During the year 2022-23, your Company achieved turnover of H 6,552.04 Million with net profit of H 1,028.66 Million as compared to turnover of H 6,582.89 Million with net profit of H 1,039.88 Million in the previous year.

On consolidated basis, your Company achieved turnover of H 18,521.39 Million with net profit of H 2,653.21 Million as compared to turnover of H 14,908.39 Million with net profit of H 1,868.14 Million in the previous year. During the year, US and North America Formulation business reported growth of 22%, Europe and UK formulation business reported growth of 26%. Australia and New Zealand formulation business reported growth of 16.5% and Rest of World formulation business reported growth of 50.2%.

In compliance with the Ind AS on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review.

DIVIDEND

The Board of Directors at its Meeting held on 30th May, 2023, declared dividend of H 0.50/- (50%) per equity share of H 1/- each for the financial year ended 31st March, 2023. Total cash outflow on account of dividend payment has been H 226.58 Million for the financial year ended 31st March, 2023. The Dividend has been paid in compliance with applicable regulations and in accordance with Company’s Dividend Distribution policy. The Dividend Distribution policy is available on the Company’s website http:// www.marksanspharma.com/pdf/dividend-distribution-policy.pdf

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

i. Marksans Pharma (UK) Limited, through step down subsidiaries Bell, Sons & Co. (Druggists) Limited and Relonchem Limited which operates in the European markets, has achieved sales of H 7,660.99 Million as compared to sales of H 6,075.84 Million during previous year.

ii. Marksans Pharma Inc., through step down subsidiary Time-Cap Laboratories Inc. which operates mainly in US and North America, has achieved sales of H 7,613.03 Million as compared to sales of H 6,288.02 Million during previous year.

iii. Nova Pharmaceuticals Australasia Pty Ltd. (your company holds 60% of the share capital) which operates mainly in Australia and New Zealand has achieved sales of H 1,926.86 Million as compared to sales of H 1,681.22 Million during previous year.

iv. Access Healthcare for Medical Products L.L.C, a wholly owned subsidiary which operates mainly in UAE and neighboring countries has achieved sales of H 218.48 Million.

Pursuant to a Central Government’s Circular dated 8th February, 2011, the audited accounts together with Directors’ Report and Auditors’ Report of the subsidiaries namely Marksans Pharma (U.K.) Limited, Marksans Pharma Inc. and Nova Pharmaceuticals Australasia Pty Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including step down subsidiaries are attached to the Consolidated Balance Sheet. Statement containing the salient features of financial statements of subsidiary companies and their contribution to the overall performance of the company is annexed to this report as Annexure - I.

Your Company has no Joint Ventures and Associate Companies.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis covering industry structure and developments, financial and operational performance of the Company, risks, concerns, opportunities, threats and outlook forms a part of this Report.

RESERVES

Your Company has not transferred any amount out of the profit of the year to the General Reserve.

SHARE CAPITAL

During the year under review, Company has undertaken buyback of equity shares through stock exchange mechanism. The Company bought back & extinguished 64,74,276 equity shares which reduced the paid-up capital of the Company to 40,28,39,422 equity shares by 18th January, 2023.

Further, pursuant to exercise of conversion rights associated with warrants by the warrants-holders and balance consideration having been paid toward subscription money in compliance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the Board of Directors of the Company, at its meeting held on 20th January, 2023, issued and allotted 10,00,000 equity shares to Mr. Mark Saldanha and 4,93,24,324 equity shares to OrbiMed Asia IV Mauritius FVCI Limited at a price of H 74/- per equity share having face value of H 1/- each on preferential basis against the conversion of warrants allotted to them. Accordingly, the paid-up equity share capital of the Company has increased to 45,31,63,746 equity shares with effect from 20th January, 2023.

The Company has neither issued any equity shares with differential rights as to dividend, voting or otherwise nor issued ESOP or sweat equity shares to Directors or employees, under any Scheme.

ACQUISITION OF MANUFACTURING FACILITIES IN GOA

On October 11, 2022, your company entered into a Business Transfer Agreement with Tevapharm India Private Limited to acquire its business relating to the manufacture and supply of pharmaceutical formulations in Plot No. A1, Phase 1-A, Verna Industrial Estate, Verna, Goa - 403722 as a going concern on a slump sale basis. Eventually, your company formally took over the above business in April 2023.

The acquisition has potential to significantly expand your Company’s manufacturing capability and accelerate core growth strategy. It will supplement innovative product portfolio. It is also a testament to the Company’s commitment to invest in product innovation, expand capacities, and drive market share gains. We are confident that this acquisition will lead to a transformational growth journey unlocking further value for the Company’s shareholders.

The above acquisition was for H 77.94 crore and your Company plans to further invest H 200 Crore in next Two years to build an additional capacity of 8 billion units per annum. The mode of finance for the above acquisition and further investment is equity and internal accrual.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Your Company’s Board comprises of 8 (Eight) Directors, of which 5 (Five) Directors are Non-Executive and 3 (Three) Directors are Executive.

a. Appointment / Resignation of Directors:

The Company has re-appointed Mr. Digant Mahesh Parikh (DIN: 00212589) as an Independent Director for a second term of 5 (five) years by passing special resolution through postal ballot and his office shall not be liable to retire by rotation.

The Board of Directors has appointed Ms. Shailaja Vardhan (DIN: 10172764) as an Additional Director in the Category of Independent Non-Executive Director with effect from 30th May, 2023 and her office shall not be liable to retire by rotation.

Ms. Meena Rani Surana (DIN: 08863769) has resigned from the Board as an Independent Director with effect from 30th May, 2023.

b. Retirement of Director by rotation:

In terms of Section 152 of the Companies Act, 2013, Dr. Sunny Sharma (DIN: 02267273) will retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment.

c. Appointment / Resignation of Key Managerial Personnel:

During the year under review, there is no change in the Key Managerial Personnel of the Company.

NUMBER OF MEETINGS OF THE BOARD

During the financial year 2022-23, the Board met 9 (Nine) times on 23.04.2022, 30.05.2022, 08.07.2022, 29.07.2022, 13.08.2022, 10.10.2022, 14.11.2022, 20.01.2023 and 13.02.2023.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Your Company has in place a policy relating to nomination and remuneration of directors as well as key managerial personnel and other employees formulated by the Nomination and

Remuneration Committee. The Nomination and Remuneration Policy, inter alia, provides for the following:

1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director in terms of Diversity Policy of the Board and recommend to the Board his / her appointment.

2. For the appointment of KMP (other than Managing / Wholetime Director) or Senior Management, a person should possess adequate qualification, expertise and experience for the position he / she is considered for the appointment. For administrative convenience, the Managing Director is authorised to identify and appoint a suitable person for the position of KMP (other than Managing / Whole-time Director) and Senior Management.

3. The remuneration / compensation / commission, etc., as the case may be, to the Managing / Whole-time Director is determined by the Nomination and Remuneration Committee and recommended to the Board for approval. Such remuneration / compensation / commission, etc., as the case may be, is subject to approval of the shareholders of the Company and is in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder. Remuneration of KMP (other than Managing / Wholetime Director) and Senior Management is decided by the Managing Director based on the standard market practice and prevailing HR policies of the Company.

4. The remuneration / commission / sitting fees, as the case may be, to the Non-Executive / Independent Director, is in accordance with the provisions of the Companies Act, 2013 and the Rules made thereunder for the time being in force or as may be decided by the Committee / Board / shareholders.

5. An Independent Director is not entitled to stock option of the Company.

DISCLOSURE UNDER SECTION 197(14) OF THE COMPANIES ACT, 2013

During the Financial Year 2022-23, Mr. Mark Saldanha, Managing Director of the Company has also received remuneration of H 1,15,66,080.00 from the Company’s wholly owned subsidiary Time-Cap Laboratories Inc.

EVALUATION OF PERFORMANCE OF BOARD, COMMITTEE AND DIRECTORS

Performance evaluation of the Board as a whole, the Committees of Directors and all individual Directors including Independent Directors has been carried out for the year under review in accordance with the criteria framed pursuant to the

provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Notes issued by SEBI.

Performance Evaluation of each individual director including independent director

A questionnaire containing performance evaluation criteria was circulated to each Director including Independent Directors. The Directors filled-up the questionnaire pertaining to other Directors (except for himself/herself) and submitted the same to the Chairman of the Board for review.

The Nomination and Remuneration Committee also carried out performance evaluation of each director of the Company for the year 2022-23. The evaluation of each director was done by all the other directors (other than the director being evaluated) in accordance with the performance criteria suggested by the Committee and applicable SEBI Guidance Note.

Performance Evaluation of the Board and Committees of Directors

The Board reviewed a questionnaire containing performance criteria for the Board and the Committees of Directors. For the evaluation, the Board took into consideration composition of the Board and Committees of Directors, frequency of the meetings, attendance of each directors at the Board and respective Committee Meetings, discharge of key functions and responsibilities prescribed under law, effectiveness of corporate governance practices in the Company, integrity of the Company’s accounting/auditing and financial reporting/control systems, etc.

All the independent directors of your Company also had a separate meeting without the attendance of executive directors and management personnel and reviewed the performance of the Board of Directors as a whole, the Chairman of the Board and the executive non-independent directors during the year 202223. The independent directors have also reviewed the quality, quantity and timeliness of flow of information between the Company management and the directors that was necessary for the directors to effectively and reasonably perform their duties.

The results of the above performance evaluations are satisfactory and adequate and meet the requirement of the Company.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declaration from all the Independent Directors confirming that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 read with Schedule IV of the Act and rules made thereunder, as well as Regulations 16(1)(b) of the SEBI Listing regulations and they have registered themselves with the Independent Director’s Database maintained by the Indian

Institute of Corporate Affairs. The Independent Directors also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties. In the opinion of the Board, the Independent Directors fulfilled the conditions specified in the above Act and Regulations and are independent of the management.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company conducts Familiarization Programme for Independent Directors to enable them to understand their roles, rights and responsibilities and proactively keeps them informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Company’s policy on the familiarization program for the independent directors as well as details of familiarization programme imparted during the year is available on the Company’s weblink at http://marksanspharma.com/pdf/familiarisation-programme-for-independent-directors-2022-23.pdf.

COMMITTEES OF THE COMPANY

Currently, the Company has five committees; The Audit Committee, The Nomination and Remuneration Committee, The Stakeholders’ Relationship Committee, The Corporate Social Responsibility Committee and The Risk Management Committee. Details of the composition of these committees are given in the Corporate Governance Report section of this Annual Report.

POLICIES AND CODES

Your Company always strives to promote and follow the highest level of ethical standards in all its business transactions. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated formulation of certain policies and codes for all listed companies. All the policies and codes adopted by your Company are available on the weblink at http://marksanspharma.com/codes-policies.html. These policies and codes are reviewed periodically by the Board and updated based on need and new compliance requirement. Key policies and codes that have been adopted by the Company are as follows:

Name of the Policy and Code with weblink

Brief Description

Code of Conduct for Directors & Employees at http://marksanspharma.com/pdf/Code-of-Conduct.pdf

The Code envisages directors and employees of the Company to observe in day to day operations of the Company

Code of Conduct to Regulate, Monitor and Report Trading in securities at http://marksanspharma.com/pdf/Code-Of-Conduct-Insider-Trading.pdf

The Code provides framework for dealing with securities of the Company by directors and employees of the Company

Policy on Related Party Transactions at http://marksanspharma. com/pdf/Policy-on-materiality-of-related-party-transactions-and-on-dealing-with-related-party-transactions.pdf

The Policy regulates all transactions between the Company and its related parties

Corporate Social Responsibility (CSR) Policy at http://marksanspharma.com/pdf/CSR-Poilcy.pdf

The Policy outlines Company’s strategy to bring about a positive impact on society

Whistle Blower Policy (Vigil Mechanism) at http://marksanspharma.com/pdf/whistle-blower-policy.pdf

The Policy provides for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s codes of conduct and ethics

Policy for determination of materiality of events or information and disclosures at http://marksanspharma.com/pdf/determining-materiality-for-disclosures.pdf

The policy provides for determination of materiality of events or information and disclosures of the same to stock exchanges

Code of Practice and Procedure for Fair Disclosure of Unpublished Price Sensitive Information at http://marksanspharma.com/pdf/ code-of-fair-disclosure.pdf

The Code envisages fair disclosure of events and occurrences that could impact price discovery in the market for the Company’s securities.

Policy for determining Material Subsidiary at http:// marksanspharma.com/pdf/policy-on-material-subsidiary.pdf

The Policy provides criteria when a subsidiary becomes a material subsidiary

Dividend Distribution Policy at http://marksanspharma.com/pdf/ dividend-distribution-policy.pdf

The Policy envisages criteria for distribution of dividend.

Nomination and Remuneration Policy at http://marksanspharma. com/pdf/nomination-and-remuneration-policy.pdf

Policy provides for criteria for appointment and remuneration of Directors and Employees of the Company.

DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and therefore, there are no deposits which are outstanding as on the date of the Balance Sheet.

LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in Note No. 40(d) of the notes to the Standalone Financial Statements of the Company.

RESEARCH AND DEVELOPMENT (R&D)

Your Company is committed to continuously fund its R&D capabilities. One of the Company’s biggest strength lies in vibrant and productive R&D function that has continuously placed your Company ahead through consistent development of niche technology, processes and products. Your Company will continue to invest in R&D to keep pace with the changing global scenario.

Your Company has a Research & Development Centre at Verna, Goa and at Navi Mumbai, Maharashtra to foray into new segments, respond to globally unmet therapeutic needs, enhance the Company’s opportunity responsiveness and file a larger number of ANDAs.

REGULATORY COMPLIANCES

Your Company’s facilities in UK and USA are approved by UK MHRA and US FDA respectively. The Goa facility has also gone through successful GMP audit by US FDA, UK MHRA and Australian TGA Authorities.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure - A.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate system of internal control and management information systems which covers all financial

and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company’s tangible and intangible assets and compliance with policies, applicable laws, rules and regulations. Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. The Audit Committee has a process for timely check for compliance with the operating systems, accounting procedures and policies. Major risks identified by the Company are systematically addressed through mitigating action on continuing basis.

INFORMATION TECHNOLOGY

Your Company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently. Your Company has implemented state-of-the-art IT applications in automating the processes in Quality, Manufacturing and R&D. Your Company has also invested significant amount of resources to build IT platform to de-risk manufacturing process and to adopt best practices in the industry. The implementations spread across Lab automation, instrument integration and manufacturing execution systems. Virtually every aspect of your Company’s business operations is carried out through SAP (Systems Applications and Products in Data Processing) Enterprise Resource Planning.

HEALTH, SAFETY & ENVIRONMENT

Your Company is committed to ensure Safety and sound Health of the employees at the work place. Your Company is also committed to strengthen pollution prevention and waste management practices for a safe and healthy environment. The Company’s Plants are in compliance with environmental regulations.

RELATED PARTY TRANSACTIONS

Your Company has not entered into any transaction during the year with any related parties which are not at arm’s length basis.

All Related Party Transactions (with the subsidiaries) that were entered into during the financial year were in the ordinary course of business on arm’s length basis and repetitive in nature. These transactions were placed before the Audit Committee for information and entered in the Register maintained under Section 189 of the Companies Act, 2013. The Audit Committee has granted omnibus (ad hoc) approval for Related Party Transactions as per the provisions and restrictions contained in the policy framed under Regulation 23 of the SEBI (LODR) Regulations, 2015. Company’s Policy on Related Party Transactions is available

on the Company’s weblink at http://marksanspharma.com/ pdf/Policy-on-materiality-of-related-party-transactions-and-on-dealina-with-related-party-transactions.pdf. Particulars of related party transactions entered into during the FY 2022-23 have been disclosed under Note No. 40(c) of the Notes to the Standalone Financial Statement. Details of material transactions with the related parties entered into during the year are disclosed in Form - AOC - 2 annexed to this report as Annexure - B.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has in place a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. Under the policy, an effective vigil mechanism for directors and employees has been established to report their genuine concerns, actual or suspected fraud or violation of the Company’s codes of conduct. The details of establishment of the Whistle-Blower Policy have been disclosed on the Company’s weblink at http://marksanspharma.com/pdf/whistle-blower-policy.pdf.

The said mechanism also provides for adequate safeguards against victimisation of the persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee. During the financial year 2022-23, no employee of the Company was denied access to the Audit Committee and there were no instances of any unethical behaviour, actual or suspicious fraud or violation in the Company’s operational policies.

RISK MANAGEMENT SYSTEM

Your Directors are aware of the risks associated with the Company’s business. Your Company makes timely and regular analyses of various risks associated with the Company’s business and takes corrective actions for managing/mitigating the same. Your Company has institutionalized the policy/process for identifying, minimizing and mitigating risks under the supervision of the Risk Management Committee of the Company. The key risks and mitigation measures are also reviewed by the Audit Committee. There is no element of risk which in the opinion of the Board may threaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY

Your company understands its responsibility towards the society, community and environment and committed to spend sensibly to meet its CSR objectives. The report on the CSR activities undertaken by the Company in the format prescribed under the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 is given in Annexure - C annexed to this Report.

DISCLOSURE UNDER SEXUAL HARASSMENTOF WOMAN AT WORKPLACE (PREVENTION,PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is fully committed to uphold and maintain dignity of women working in the Company and has zero tolerance towards any actions which may fall under the ambit of sexual harassment at work place. The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up in compliance with provisions relating to the constitution of Internal Complaints Committee under the said Act to redress complaints regarding sexual harassment at Mumbai office, Goa plant and R&D Centre at Navi Mumbai. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, the Company has not received any complaints related to sexual harassment at any of the locations and the necessary annual report has been submitted to the competent authority in this regard.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no orders passed by the Regulators/ Courts/ tribunal which would impact the going concern status of the Company and its future operations. During the year under review, securities of the Company were not suspended from trading in the stock exchanges in which they are listed.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there is no change in the nature of Business of the Company.

MATERIAL CHANGES & COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

CORPORATE GOVERNANCE

Corporate Governance is an ethical business process to create and enhance value of stakeholders and reputation of an organization. Your directors function as trustee of the shareholders and ensure long term economic value for its stakeholders. Pursuant to Schedule V of SEBI (LODR) Regulations, 2015, a detailed report on Corporate Governance and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance is annexed to this report as Annexure - D.

ANNUAL RETURN

In accordance with the requirements of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in the prescribed Format proposed to be submitted to the Registrar of Companies for the financial year ended 31st March, 2023 is available in the Company’s weblink at http://marksanspharma. com/annual-reports.html.

INSOLVENCY AND BANKRUPTCY CODE 2016

There is no application made nor any proceeding pending under the Insolvency and Bankruptcy Code 2016.

EMPLOYEES

The ratio of the remuneration of each Director to the median employee’s remuneration and other details in terms of 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 annexed to this report as Annexure - E.

The statement showing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure - F.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The guiding principle of HR Policy at your Company is that the “Intellectual Capital” and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating “Ownership of Goals” at each level and synchronizing the efforts of all employees to achieve the company’s quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your Company is cordial.

As on 31st March, 2023, the Company’s permanent employee strength is 852 (809 as on 31st March, 2022).

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- they have selected such accounting policies and applied them consistently and made judgments and estimates that 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 financial year ended 31st March, 2023 and Profit of the Company for the period ended 31st March, 2023;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis;

- proper internal finance controls were in place and that the financial controls were adequate and were operating effectively;

- they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report for the financial year 2022-23 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as Annexure - G.


AUDIT & AUDITORS

Statutory Audit:

The Auditors have issued an unmodified opinion on the Financial Statements, both standalone and consolidated for the financial year ended 31st March, 2023. The Auditor’s reports for the financial year 2022-23 do not contain any qualification, reservation or adverse remark.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has appointed M/s Jinesh Dedhia & Associates, Practising Company Secretaries (Membership No. 54731, Certificate of Practice No. 20229) as Secretarial Auditor to undertake Secretarial Audit of the Company for the financial year 2022-23. The report of the Secretarial Auditor is annexed to this report as Annexure - H. There are no qualifications, reservation or adverse remark made by the auditor in their report.

Cost Audit:

The Company has maintained the cost accounts and cost records as specified by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013. However your Company is a 100% export oriented unit and therefore, it is exempted from audit of its cost accounting records.

Reporting of Frauds:

There was no instance of any fraud during the year under review which required the Statutory Auditors to report to the Audit Committee or the Board under Section 143(12) of Act and Rules framed thereunder.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively.

APPRECIATION:

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company’s Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

For and on behalf of the Board of Directors of Marksans Pharma Limited

Mark Saldanha

Mumbai Chairman & Managing Director

Dated: 1st August, 2023 DIN: 00020983


Mar 31, 2018

Dear Shareholder’s

The Directors take pleasure in presenting the Twenty Sixth (26) Annual Reports along with the financial statements for the year ended 31st March 2018.

FINANCIAL HIGHLIGHTS (Rs. in Lakh)

Particulars

2017-18

2016-17

Turnover

29,466.23

21,584.00

Profit before Depreciation & Amortization expenses, Non-recurring expenses and Tax expenses

2,890.31

2,694.83

Less: Depreciation & Amortization Expenses

1,225.07

1,500.16

Non-recurring expenses

-

-

Tax expenses

422.51

40.15

Profit after Tax

1,242.73

1,154.52

OPERATIONS/STATE OF AFFAIRS OF THE COMPANY

During the year 2017-18, your Company achieved turnover of Rs. 29,466.23 Lakh with net profit of Rs. 1,242.73 Lakh as compared to turnover of Rs. 21,584.00 Lakh with net profit of Rs. 1,154.52 Lakh in the previous year.

On consolidated basis, your Company achieved turnover of Rs. 91,269.20 Lakh with net profit of Rs. 3,580.10 Lakh as compared to turnover of Rs. 76,716.13 Lakh with net profit of Rs. 1,133.41 Lakh in the previous year. During the year, US and North America Formulation business reported growth of 6.32% and Europe and UK reported growth of 45.07%

In compliance with the IND AS on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review.

DIVIDEND

Your Directors have recommended a Dividend, subject to approval of the Members at the ensuing Annual General Meeting, of Re. 0.05/-(5%) per equity share of Re. 1/- each and dividend of Rs. 7/-(7%) per preference share of Rs. 100/- each for the financial year ended 31st March, 2018. Total cash outflow on account of dividend payment including dividend distribution tax will be Rs. 330.57 Lakh for the financial year ended 31st March, 2018. The Dividend will be paid in compliance with applicable regulations. Company''s policy on the Dividend Distribution is available on the Company''s website www.marksanspharma.com.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

i. Performance of Marksans Pharma (UK) Limited, through its step down subsidiaries Bell, Sons & Co. (Druggists) Limited and Relonchem Limited which operates in the European markets, has shown satisfactory growth. The Directors foresee further growth in the forthcoming years.

ii. Marksans Pharma Inc., through its step down subsidiary, Time-Cap Laboratories Inc. which operates mainly in US and North America, has achieved sales of USD 52,483,447 as compared to sales of USD 38,691,660 during previous year.

iii. Performance of Nova Pharmaceuticals Australasia Pty Ltd. (your company holds 60% of the share capital) which operates mainly in Australia was satisfactory.

Pursuant to a Central Government''s Circular dated 8th February, 2011, the audited accounts together with Directors'' Report and Auditors'' Report of the subsidiaries namely Marksans Pharma (U.K.) Limited, Marksans Pharma Inc. and Nova Pharmaceuticals Australasia Pty Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet. Statement on the highlight of performance of subsidiary companies and their contribution to the overall performance of the company are given in Note No. 2.20 of the consolidated financial statements and forms part of this report.

Your Company has no Joint Ventures and Associate Companies.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis covering industry structure and developments, financial and operational performance of the Company, risks, concerns, opportunities, threats and outlook forms a part of this Report.

RESERVES

Your Company has not transferred any amount out of the profit of the year to the General Reserve.

SHARE CAPITAL

During the year under review, there was no change in the Equity Share Capital of the Company.

During the year under review, your Company has redeemed 1,00,000 Preference Shares of Rs. 100/- each at par. Accordingly, Issued, Subscribed and Paid-up Preference Share Capital has reduced from 11,00,000 Preference Shares of Rs. 100/- each to 10,00,000 Preference Shares of Rs. 100/- each with effect from 14th March, 2018.

The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise, during the year under review.

The Company has not issued ESOP or sweat equity shares to Directors or employees, during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Your Company''s Board comprises of 6 (Six) Directors, of which 3 (Three) are Non-Executives Independent and 3 (Three) Directors are Executives.

a. Appointment / resignations of Directors:

During the year under review, Mr. Naresh Balwant Wadhwa (DIN: 01999073) has resigned as an Independent Director with effect from 02.01.2018 and Mr. Digant Mahesh Parikh (DIN: 00212589) has been appointed as Additional Independent Director with effect from 14.03.2018.

b. Retirement of Director by rotation:

In terms of Section 152 of the Companies Act, 2013, Dr. Vinay Gopal Nayak (DIN: 02577389) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

c. Appointment / resignation of Key Managerial Personnel:

During the year under review, there is no change in Key Managerial Personnel of the Company.

NUMBER OF MEETINGS OF THE BOARD

The Board met 6 (Six) times in financial year 2017-18 on 29.05.2017, 11.08.2017, 13.11.2017, 12.02.2018, 14.03.2018 and 27.03.2018.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Your Company has in place a policy relating to nomination and remuneration of directors as well as key managerial personnel and other employees formulated by the Nomination and Remuneration Committee. The Nomination and Remuneration Policy, inter alia, provides for the following:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director in terms of Diversity Policy of the Board and recommend to the Board his / her appointment.

For the appointment of KMP (other than Managing / Whole-time Director) or Senior Management, a person should possess adequate qualification, expertise and experience for the position he / she is considered for the appointment. For administrative convenience, the Managing Director is authorised to identify and appoint a suitable person for the position of KMP (other than Managing / Whole-time Director) and Senior Management.

The remuneration / compensation / commission, etc., as the case may be, to the Managing / Whole-time Director is determined by the Nomination and Remuneration Committee and recommended to the Board for approval. Such remuneration / compensation / commission, etc., as the case may be, is subject to approval of the shareholders of the Company and is in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder. Remuneration of KMP (other than Managing / Whole-time Director) and Senior Management is decided by the Managing Director based on the standard market practice and prevailing HR policies of the Company.

The remuneration / commission / sitting fees, as the case may be, to the Non-Executive / Independent Director, is in accordance with the provisions of the Companies Act, 2013 and the Rules made thereunder for the time being in force or as may be decided by the Committee / Board / shareholders.

An Independent Director is not entitled to stock option of the Company.

During the financial year ended 31st March, 2017, the remuneration paid to Dr. Vinay Gopal Nayak, Whole-time Director has exceeded the permissible limit as prescribed under Section 197 read with Schedule V of the Companies Act, 2013 by Rs. 79,52,068.00 due to inadequacy of profit. Members of the Company have at the 25th AGM held on 26th September, 2017 approved waiver of recovery of such excess payment subject to approval of Central Government. The Company has applied to the Central Government for approval of such excess payment and waiver of recovery of the same which is pending. Pending such approval, the excess amount is held by Dr. Viany Gopal Nayak in trust for the Company.

EVALUATION OF PERFORMANCE OF BOARD, COMMITTEE AND DIRECTORS

Performance evaluation of the Board as a whole, the Committees of Directors and all individual Directors including Independent Directors has been carried out for the year under review in accordance with the criteria framed pursuant to the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Notes issued by SEBI.

Performance Evaluation of each individual director including independent director

A questionnaire containing performance evaluation criteria was circulated to each Director including Independent Directors. The Directors filled-up the questionnaire pertaining to other Directors (except for himself/herself) and submitted the same to the Chairman of the Board for review.

The Nomination and Remuneration Committee also carried out performance evaluation of each director of the Company for the year 2017-18. The evaluation of each director was done by all the other directors (other than the director being evaluated) in accordance with the performance criteria suggested by the Committee and applicable SEBI Guidance Note.

Performance Evaluation of the Board and Committees of Directors

The Board reviewed a questionnaire containing performance criteria for the Board and the Committees of Directors. For the evaluation, the Board took into consideration composition of the Board and Committees of Directors, frequency of the meetings, attendance of each directors at the Board and respective Committee Meetings, discharge of key functions and responsibilities prescribed under law, effectiveness of corporate governance practices in the Company, integrity of the Company''s accounting/auditing and financial reporting/control systems, etc.

All the independent directors of your Company also had a separate meeting without the attendance of executive directors and management personnel and reviewed the performance of the Board of Directors as a whole, the Chairman of the Board and the executive non-independent directors during the year 2017-18. The independent directors have also reviewed the quality, quantity and timeliness of flow of information between the Company management and the directors that was necessary for the directors to effectively and reasonably perform their duties.

The results of the above performance evaluations are satisfactory and adequate and meet the requirement of the Company.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declaration from all the Independent Directors under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Company''s policy on the familiarization program for the independent directors is available on the Company''s website www.marksanspharma.com.

COMMITTEES OF THE COMPANY

Currently, the Company has five committees; The Audit Committee, The Nomination and Remuneration Committee, The Stakeholders'' Relationship Committee, The Corporate Social Responsibility Committee and the Risk Management Committee. Details of the composition of these committees are given in the Corporate Governance Report section of this Annual Report.

POLICIES

Your Company always strives to promote and follow the highest level of ethical standards in all its business transactions. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated formulation of certain policies for all listed companies. All the policies adopted by your Company are available on the website www.marksanspharma.com. These policies are reviewed periodically by the Board and updated based on need and new compliance requirement. Key policies that have been adopted by the Company are as follows:

Name of the Policy

Brief Description

Code of Conduct for Directors & Employees

The Code envisages directors and employees of the Company to observe in day to day operations of the Company

Code of Conduct to Regulate, Monitor and Report Trading in securities

The Code provides framework for dealing with securities of the Company by directors and employees of the Company

Policy on Related Party Transactions

The Policy regulates all transactions between the Company and its related parties

Corporate Social Responsibility (CSR) Policy

The Policy outlines Company''s strategy to bring about a positive impact on society

Whistle Blower Policy (Vigil Mechanism)

The Policy provides for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s codes of conduct and ethics

Code of Practice and Procedure for Fair Disclosure of Unpublished Price Sensitive Information

The Code envisages fair disclosure of events and occurrences that could impact price discovery in the market for the Company''s securities.

Dividend Distribution Policy

The Policy envisages criteria for distribution of dividend.

DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RESEARCH AND DEVELOPMENT (R&D)

Your Company is committed to continuously fund its R&D capabilities. One of the Company''s biggest strength lies in vibrant and productive R&D function that has continuously placed your Company ahead through consistent development of niche technology, processes and products. Your Company will continue to invest in R&D to keep pace with the changing domestic and global scenario.

Your Company is setting up a New Research & Development Centre at Navi Mumbai, Maharashtra with a view to foray into new segments, respond to globally unmet therapeutic needs, enhance the Company''s opportunity responsiveness and file a larger number of ANDAs.

REGULATORY COMPLIANCES

Your Company''s facilities in UK and USA are approved by UK MHRA and US FDA respectively. The Goa facility has also gone through successful GMP audit by US FDA, UK MHRA and Australian TGA Authorities.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the relevant information and data are annexed to this report as Annexure - A.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company''s tangible and intangible assets and compliance with policies, applicable laws, rules and regulations. Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. The Audit Committee has a process for timely check for compliance with the operating systems, accounting procedures and policies. Major risks identified by the businesses and functions are systematically addressed through mitigating action on continuing basis.

INFORMATION TECHNOLOGY

Your Company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently. Your Company has implemented state-of-the-art IT applications in automating the processes in Quality, Manufacturing and R & D. Your Company has also invested significant amount of resources to build IT platform to de-risk manufacturing process and to adopt best practices in the industry. The implementations spread across Lab automation, instrument integration and manufacturing execution systems. Your Company''s virtually every aspect of the business operations is carried out through SAP (Systems Applications and Products in Data Processing) Enterprise Resource Planning.

HEALTH, SAFETY & ENVIRONMENT

Your Company is committed to ensure Safety and sound Health of the employees at the work place. Your Company is also committed to strengthen pollution prevention and waste management practices for a safe and healthy environment. The Company''s Plants are environment regulations compliant.

RELATED PARTY TRANSACTIONS

There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel or their relatives.

All Related Party Transactions (with the subsidiaries) that were entered into during the financial year were in the ordinary course of business on arm''s length basis and repetitive in nature. These transactions are placed before the Audit Committee for information and are entered in the Register maintained under Section 189 of the Companies Act, 2013. The Audit Committee has granted omnibus (ad hoc) approval for Related Party Transactions as per the provisions and restrictions contained in the policy framed under Regulation 23 of the SEBI (LODR) Regulations, 2015. Company''s Policy on Related Party Transactions is available on the Company''s website www. marksanspharma.com.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has in place a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. Under the policy, an effective vigil mechanism for directors and employees has been established to report their genuine concerns, actual or suspected fraud or violation of the Company''s codes of conduct. Details of the Whistle Blower Policy are available on the Company''s website www. marksanspharma.com.

The said mechanism also provides for adequate safeguards against victimisation of the persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee. We confirm that during the financial year 2017-18, no employee of the Company was denied access to the Audit Committee. During the financial year 2017-18, there were no instance of any unethical behavior, actual or suspicious fraud or violation in the Company''s operational policies.

RISK MANAGEMENT SYSTEM

Your directors are aware of the risks associated with the Company''s business. Your Company makes timely and regular analyses of various risks associated with the Company''s business and takes corrective actions for managing/mitigating the same. Your Company has institutionalized the policy/process for identifying, minimizing and mitigating risks under the supervision of the Risk Management Committee of the Company. The key risks and mitigation measures are also reviewed by the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

During the financial year 2017-18, your Company has not spent any amount towards CSR. Your Company understands its responsibility towards the Society, Community, Environment and committed to spend sensibly after identifying right avenues for the purpose. The CSR Committee had been meeting and discussing with number of NGOs to actively support and channelize the Company''s activities especially in the areas around the Company''s Goa Plant. However, even after meeting number of NGOs, the Committee could not identify any suitable NGOs for the purpose and therefore required more time to meet other NGOs and / or explore the appropriate avenues to achieve its CSR objectives.

The particulars required to be disclosed pursuant to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure - B annexed to this Report.

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

Your Company is fully committed to uphold and maintain dignity of women working in the Company and has zero tolerance towards any actions which may fall under the ambit of sexual harassment at work place. The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints regarding sexual harassment at Mumbai office as well as Goa plant. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, the Company has not received any complaints related to sexual harassment at both the sites.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no orders passed by the Regulators/Courts/tribunal which would impact the going concern status of the Company and its future operations.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there is no change in the nature of Business of the Company.

MATERIAL CHANGES & COMMITMENT IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR TILL THE DATE OF THE REPORT

There have been no 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 Statements relate and the date of this Report.

CORPORATE GOVERNANCE

Corporate Governance is an ethical business process to create and enhance value of stakeholders and reputation of an organization. Your directors function as trustee of the shareholders and ensure long term economic value for its stakeholders. Pursuant to Schedule V of SEBI (LODR) Regulations, 2015, a detailed report on Corporate Governance and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance is annexed to this report as Annexure - C.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014 is annexed to this report as Annexure - D.

EMPLOYEES

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of 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 annexed to this report as Annexure - E.

The statement showing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure - F.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The guiding principle of HR Policy at your Company is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at each level and synchronizing the efforts of all employees to achieve the company''s quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your Company is cordial.

As on 31st March, 2018, the Company''s permanent employee strength was 785 (717 as on 31st March, 2017).

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that 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 financial year ended 31st March, 2018 and Profit of the Company for the period ended 31st March, 2018;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis;

- proper internal finance controls were in place and that the financial controls were adequate and were operating effectively;

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

AUDIT & AUDITORS

Statutory Audit

The Auditors, M/s. V. S. Lalpuria & Company, Chartered Accountants (Firm Registration No. 105581W), were appointed as Auditors at the 25th Annual General Meeting held on 26th September, 2017 for a term of five (5) years i.e. till the conclusion of the 30th Annual General Meeting of the Company. However, M/s. V. S. Lalpuria & Company have tendered their resignation as the Statutory Auditor effective from the conclusion of the ensuing Annual General Meeting citing personal reason. Your directors, on the recommendation of the Audit Committee, is proposing M/s. Bhuta Shah & Co. LLP, Chartered Accountant (Firm Registration No. W100100), for appointment as the Statutory Auditor of the Company to fill the casual vacancy caused by the resignation of M/s. V. S. Lalpuria & Company.

The Auditors report for the financial year 2017-18 does not contain any qualification, reservation or adverse remark.

Secretarial Audit

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors has appointed Ms. Khushboo Bakul Gopani, a Practicing Company Secretary (Membership No.29194, Certificate of Practice No. 10560) as Secretarial Auditor to undertake Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed to this report as Annexure - G.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except one observation which is self explanatory.

Cost Audit

As specified under Section 148(1) of the Companies Act, 2013, your Company maintains cost accounting records. However, your Company is a 100% export oriented unit and therefore, it is exempted from audit of its cost accounting records.

APPRECIATION

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company''s Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

For and on behalf of the Board of

Directors of Marksans Pharma Limited

Mark Saldanha

Mumbai Chairman & Managing Director

Dated: 25th August, 2018 DIN: 00020983


Mar 31, 2017

The Directors take pleasure in presenting the Twenty Fifth (25) Annual Reports along with the financial statements for the year ended 31st March 2017.

Financial Highlights (Rs, in Lakh)

Particulars

2016-17

2015-16

Turnover

21584.00

35813.21

Profit before Depreciation & Amortization expenses, Non-recurring expenses and Tax expenses

2758.03

10637.73

Less: Depreciation & Amortization Expenses

1500.16

1474.85

Non-recurring expenses

-

-

Tax expenses

35.32

2014.33

Profit after Tax

1222.55

7148.55

Dividend

Your Directors have recommended a Dividend, subject to approval of the Members at the ensuing Annual General Meeting, of RS,0.05 (5%) per equity share of Re. 1/- each and dividend of RS,7/- (7%) per preference share of RS,100/- each for the financial year ended 31st March, 2017. Total cash outflow on account of dividend payment including dividend distribution tax will be RS,338.99 Lakh for the financial year ended 31st March, 2017. The Dividend will be paid in compliance with applicable regulations.

Operations/State of Affairs of the Company

During the year 2016-17, your Company achieved turnover of RS,21584.00 Lakh with net profit of RS,1222.55 Lakh as compared to turnover of RS,35813.21 Lakh with net profit of RS,7148.55 Lakh in the previous year. During the year, the UK business witnessed price erosion on account of higher competition and adverse currency movement due to Brexit.

On consolidated basis, your Company achieved turnover of RS,76716.13 Lakh with net profit of RS,951.88 Lakh as compared to turnover of RS,89332.62 Lakh with net profit of RS,7851.16 Lakh in the previous year.

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review.

Subsidiaries, Joint Ventures and Associate Companies

i. Performance of Marksans Pharma (UK) Limited, which operates in the European markets has not been satisfactory mainly due to price erosion on account of higher competition, channel consolidation, government action on pricing/reimbursement and adverse currency movement due to Brexit.

ii. Marksans Pharma Inc., through its step down subsidiary, Time-Cap Laboratories Inc. which operates mainly in US and North America, has performed well.

iii. Performance of Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60% of the share capital) which operates mainly in Australia is satisfactory.

Pursuant to a Central Government''s Circular dated 8th February, 2011, the audited accounts together with Directors'' Report and Auditors'' Report of the subsidiaries namely Marksans Pharma (U.K.) Limited, Marksans Pharma Inc. and Nova Pharmaceuticals Australasia Pty Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet. Statement on the highlights of performance of the subsidiary companies and their contribution to the overall performance of the company are given in Note No.

2.24 of the consolidated financial statements and forms part of this report.

Your Company has no Joint Ventures and Associate Companies.

Management Discussion and Analysis

A report on Management Discussion and Analysis covering industry structure and developments, financial and operational performance of the Company, risks, concerns, opportunities, threats and outlook forms a part of this Report.

Reserves

Your Company has not transferred any amount out of the profit of the year to the General Reserve.

Share Capital

During the year under review, there was no change in the Equity Share Capital of the Company.

During the year under review, your Company has redeemed 1,50,000 Preference Shares of RS,100/- each at par. Accordingly, Issued, Subscribed and Paid-up Preference Share Capital has reduced from 12,50,000 Preference Shares of RS,100/- each to 11,00,000 Preference Shares of RS,100/- each with effect from 31st March, 2017.

The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise, during the year under review.

The Company has not issued ESOP or sweat equity shares to Directors or employees, during the year under review.

Directors and Key Managerial Personnel (KMP):

Your Company''s Board comprises of 6 (Six) Directors, of which 3 (Three) are Non-Executives Independent and 3 (Three) Directors are Executives.

a. Appointment / resignations of Directors:

During the year under review, there is no change in the composition of the Board of Directors of the Company.

b. Retirement of Director by rotation:

In terms of Section 152 of the Companies Act, 2013, Mrs. Sandra Saldanha (DIN: 0021023) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

c. Appointment / resignation of Key Managerial Personnel: During the year under review, there is no change in Key Managerial Personnel of the Company.

Number of Meetings of the Board

The Board met 6 (Six) times in financial year 2016-17 on 30.05.2016, 13.08.2016, 12.11.2016, 19.12.2016, 06.02.2017 and 29.03.2017.

Policy on Directors Appointment and Remuneration

Your Company has in place a policy relating to nomination and remuneration of directors as well as key managerial personnel and other employees formulated by the Nomination and Remuneration Committee. The Nomination and Remuneration Policy, inter alia, provides for the following:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director in terms of Diversity Policy of the Board and recommend to the Board his / her appointment.

For the appointment of KMP (other than Managing / Whole time Director) or Senior Management, a person should possess adequate qualification, expertise and experience for the position he / she is considered for the appointment. For administrative convenience, the Managing Director is authorized to identify and appoint a suitable person for the position of KMP (other than Managing / Whole-time Director) and Senior Management.

The remuneration / compensation / commission, etc., as the case may be, to the Managing / Whole-time Director is determined by the Nomination and Remuneration Committee and recommended to the Board for approval. Such remuneration / compensation / commission, etc., as the case may be, is subject to approval of the shareholders of the Company and is in accordance with the provisions of the Companies Act, 2013 and Rules made there under. Remuneration of KMP (other than Managing / Whole time Director) and Senior Management is decided by the Managing Director based on the standard market practice and prevailing HR policies of the Company.

The remuneration / commission / sitting fees, as the case may be, to the Non-Executive / Independent Director, is in accordance with the provisions of the Companies Act, 2013 and the Rules made there under for the time being in force or as may be decided by the Committee / Board / shareholders.

An Independent Director is not entitled to stock option of the Company.

During the financial year ended 31st March, 2017, the remuneration paid to Dr. Vinay Gopal Nayak, Whole-time Director has exceeded the permissible limit as prescribed under Section 197 read with Schedule V of the Companies Act, 2013 by C79,52,068.00 due to inadequacy of profit. The Company is in the process of complying with the statutory requirements prescribed to regularise such excess payment including seeking approval from Members and the Central Government, as necessary. Pending such approvals, the excess amount is held by the Whole-time Director in trust for the Company.

Evaluation of Performance of Board, Committee and Directors

Performance evaluation of the Board as a whole, the Committees of Directors and all individual Directors including Independent Directors has been carried out for the year under review in accordance with the criteria framed pursuant to the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Notes issued by SEBI.

Performance Evaluation of each individual director including independent director

A questionnaire containing performance evaluation criteria was circulated to each Director including Independent Directors. The Directors filled-up the questionnaire pertaining to other Directors (except for himself/herself) and submitted the same to the Chairman of the Board for review.

The Nomination and Remuneration Committee also carried out performance evaluation of each director of the Company for the year 2016-17. The evaluation of each director was done by all the other directors (other than the director being evaluated) in accordance with the performance criteria suggested by the Committee and applicable SEBI Guidance Note.

Performance Evaluation of the Board and Committees of Directors

The Board reviewed a questionnaire containing performance criteria for the Board and the Committees of Directors. For the evaluation, the Board took into consideration composition of the Board and Committees of Directors, frequency of the meetings, attendance of each directors at the Board and respective Committee Meetings, discharge of key functions and responsibilities prescribed under law, effectiveness of corporate governance practices in the Company, integrity of the Company''s accounting/auditing and financial reporting/control systems, etc.

All the independent directors of your Company also had a separate meeting without the attendance of executive directors and management personnel and reviewed the performance of the Board of Directors as a whole, the Chairman of the Board and the executive non-independent directors during the year 2016-17. The independent directors have also reviewed the quality, quantity and timeliness of flow of information between the Company management and the directors that was necessary for the directors to effectively and reasonably perform their duties.

The results of the above performance evaluations are satisfactory and adequate and meet the requirement of the Company.

Declaration From Independent Directors

The Company has received necessary declaration from all the Independent Directors under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015.

Familiarization Programme For Independent Directors

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Company''s policy on the familiarization program for the independent directors is available on the Company''s website www.marksanspharma. com.

Committees of the Company

Currently, the Company has five committees; The Audit Committee, The Nomination and Remuneration Committee, The Stakeholders'' Relationship Committee, The Corporate Social Responsibility Committee and the Risk Management Committee. Details of the composition of these committees are given in the Corporate Governance Report section of this Annual Report.

Name of the Policy

Code of Conduct for Directors & Employees

Code of Conduct to Regulate, Monitor and Report Trading in securities

Policy on Related Party Transactions Corporate Social Responsibility (CSR) Policy Whistle Blower Policy (Vigil Mechanism)

Code of Practice and Procedure for Fair Disclosure of Unpublished Price Sensitive Information

Details Relating to Deposits, Covered Under Chapter V of the Companies Act, 2013

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Policies

Your Company always strives to promote and follow the highest level of ethical standards in all its business transactions. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated formulation of certain policies for all listed companies. All the policies adopted by your Company are available on the website www.marksanspharma.com. These policies are reviewed periodically by the Board and updated based on need and new compliance requirement. Key policies that have been adopted by the Company are as follows:

Brief Description

The Code envisages directors and employees of the Company to observe in day to day operations of the Company

The Code provides framework for dealing with securities of the Company by directors and employees of the Company

The Policy regulates all transactions between the Company and its related parties

The Policy outlines Company''s strategy to bring about a positive impact on society

The Policy provides for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s codes of conduct and ethics

The Code envisages fair disclosure of events and occurrences that could impact price discovery in the market for the Company''s securities.

Research and Development (R&D)

Your Company is committed to continuously fund its R&D capabilities. One of the Company''s biggest strength lies in vibrant and productive R&D function that has continuously placed your Company ahead through consistent development of niche technology, processes and products. Your Company will continue to invest in R&D to keep pace with the changing domestic and global scenario.

Your Company is setting up a new Research & Development Centre at Navi Mumbai, Maharashtra with a view to foray into new segments, respond to globally unmet therapeutic needs, enhance the Company''s opportunity responsiveness and file a larger number of ANDAs.

Regulatory Compliances

Your Company''s facilities in UK and USA are approved by UK MHRA and US FDA respectively. During the year under review, the Goa facility has gone through successful GMP audit by UK MHRA and Australian TGA Authorities.

Particulars Regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the relevant information and data are annexed to this report as Annexure - A.

Internal Financial Control Systems and their Adequacy

Your Company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company''s tangible and intangible assets and compliance with policies, applicable laws, rules and regulations. Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. The Audit Committee has a process for timely check for compliance with the operating systems, accounting procedures and policies. Major risks identified by the businesses and functions are systematically addressed through mitigating action on continuing basis.

Information Technology

Your Company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently. Your Company has implemented state-of-the-art IT applications in automating the processes in Quality, Manufacturing and R & D. Your Company has also invested significant amount of resources to build IT platform to derisk manufacturing process and to adopt best practices in the industry. The implementations spread across Lab automation, instrument integration and manufacturing execution systems. Your Company''s virtually every aspect of the business operations is carried out through SAP (Systems Applications and Products in Data Processing) Enterprise Resource Planning.

Health, Safety & Environment

Your Company is committed to ensure Safety and sound Health of the employees at the work place. Your Company is also committed to strengthen pollution prevention and waste management practices for a safe and healthy environment. The Company''s plants are environment regulations compliant.

Related Party Transactions

There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel or their relatives.

All Related Party Transactions (with the subsidiaries) that were entered into during the financial year were in the ordinary course of business on arm''s length basis and repetitive in nature. These transactions are placed before the Audit Committee for information and are entered in the Register maintained under Section 189 of the Companies Act, 2013. The Audit Committee has granted omnibus (ad hoc) approval for Related Party Transactions as per the provisions and restrictions contained in the policy framed under Regulation 23 of the SEBI (LODR) Regulations, 2015. Company''s Policy on Related Party Transactions is available on the Company''s website www.marksanspharma.com.

Whistle Blower Policy/Vigil Mechanism

Your Company has in place a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. Under the policy, an effective vigil mechanism for directors and employees has been established to report their genuine concerns, actual or suspected fraud or violation of the Company''s codes of conduct. Details of the Whistle Blower Policy are available on the Company''s website www. marksanspharma.com.

The said mechanism also provides for adequate safeguards against victimization of the persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee. We confirm that during the financial year 2016-17, no employee of the Company was denied access to the Audit Committee. During the financial year 2016-17, there were no instance of any unethical behavior, actual or suspicious fraud or violation in the Company''s operational policies.

Risk Management System

Your directors are aware of the risks associated with the Company''s business. Your Company makes timely and regular analyses of various risks associated with the Company''s business and takes corrective actions for managing/mitigating the same. Your Company has institutionalized the policy/ process for identifying, minimizing and mitigating risks under the supervision of the Risk Management Committee of the Company. The key risks and mitigation measures are also reviewed by the Audit Committee.

Corporate Social Responsibility

During the financial year 2016-17, your Company has not spent any amount towards CSR. Your Company understands its responsibility towards the Society, Community, Environment and committed to spend sensibly after identifying right avenues for the purpose. Your Company is continuously exploring various focus areas for its CSR activities and is also in the process of identifying NGOs working in the area of health and education to support them in their endeavors.

The particulars required to be disclosed pursuant to the Companies (Corporate Social Responsibility Policy) Rules,

2014 are given in Annexure - B annexed to this Report.

Disclosure Under Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company is fully committed to uphold and maintain dignity of women working in the Company and has zero tolerance towards any actions which may fall under the a mbit of sexua l ha rassment at work place. The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints regarding sexual harassment at Mumbai office as well as Goa plant. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, your Company has not received any complaints related to sexual harassment at both the sites.

Significant and Material orders Passed by the Regulators or Courts or Tribunals

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

Change in the Nature of Business

During the year under review, there is no change in the nature of Business of the Company.

Material changes and commitment if any, affecting financial position of the company from the end of the financial year till the date of the report.

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occured between the end of the financial year of the company to which a financial statements relate and the date of this report.

Corporate Governance

Corporate Governance is an ethical business process to create and enhance value of stakeholders and reputation of an organization. Your directors function as trustee of the shareholders and ensure long term economic value for its stakeholders. Pursuant to Schedule V of SEBI (LODR) Regulations, 2015, a detailed report on Corporate Governance and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance is annexed to this report as Annexure - C.

Extract of Annual Return

The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014 is annexed to this report as Annexure - D.

Employees

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of 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 annexed to this report as Annexure - E.

The statement showing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure - F.

Human Resources Development and Industrial Relations

The guiding principle of HR Policy at your Company is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at each level and synchronizing the efforts of all employees to achieve the company''s quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your Company is cordial.

As on 31st March, 2017, the Company''s permanent employee strength was 717 (574 as on 31st March, 2016).

Directors Responsibility Statement

In terms of provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that 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 financial year ended 31st March, 2017 and Profit of the Company for the period ended 31st March, 2017;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis;

- proper internal finance controls were in place and that the financial controls were adequate and were operating effectively;

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

Audit & Auditors Statutory Audit

Tenure of M/s. N. K. Mittal & Associates, Statutory Auditors of the Company will come to end at the conclusion of the ensuing Annual General Meeting. Your directors have decided, based on the recommendation of the Audit Committee, to recommend the appointment of M/s.

V S Lalpuria & Company, Chartered Accountants (Firm Registration No. 105581W) as Statutory Auditors of the Company under section 139 of the Companies Act, 2013.

The Board placed on record its appreciation for the services of the retiring Auditors M/s. N. K. Mittal & Associates, who have been Auditors of the Company for a long time.

The Auditors Reports do not contain any qualification, reservation or adverse remark.

Secretarial Audit

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors has appointed Ms. Khushboo Bakul Gopani, a Practicing Company Secretary (Membership No.29194, Certificate of Practice No. 10560) as Secretarial Auditor to undertake Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed to this report as Annexure - G.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except three observations which are self explanatory.

Cost Audit

Your Company is a 100% export oriented unit and therefore, it is exempted from audit of its cost accounting records.

Appreciation

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company''s Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

For and on behalf the Board of Directors of

Marksans Pharma Limited

Mark Saldanha

Mumbai Chairman & Managing Director

Dated 11th August, 2017 DIN: 00020983


Mar 31, 2015

The Directors take pleasure in presenting the Twenty Third Report along with the financial statements for the year ended 31st March 2015.

Financial Highlights

(Rs.in Million)

2014-15 2013-14 Particulars

Turnover 4055.94 3149.45

Profit before Depreciation & Amortization expenses, Non-recurring expenses and 1057.16 719.15 Tax expenses

Less: Depreciation & Amortization Expenses 90.31 86.56

Non-recurring expenses - -

Tax expenses 295.76 77.02

Profit after Tax 671.09 555.57

Operations/State of Affairs of the Company

During the year ended 31st March, 2015, total turnover achieved by your Company was H4055.94 Mn as compared to H3149.45 Mn in the previous year. During the year under review, your Company has registered a net profit of H671.09 Mn as compared to H555.57 Mn in the previous year. This is mainly due to strong business and improved financial performances, and also due to better realization on account of currency movement.

Consolidated Financial Statements

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Statement of Profit and Loss, it may be observed that the turnover for the year under review has increased to H7966.68 Mn from H6299.97

Mn in the previous financial year. During the year under review, your company registered a consolidated net profit of H1093.96 Mn as compared to net profit of H719.08 Mn during the previous financial year.

Management Discussion and Analysis

A report on Management Discussion and Analysis covering industry structure and developments, financial and operational performance of the Company, risks, concerns, opportunities, threats and outlook forms a part of this Report.

Dividend

Your Directors have recommended subject to the approval of the members in the ensuing Annual General Meeting dividend of H0.12 (12%) per equity share of H1/- each and dividend of H7/- (7%) per preference share of H100/- each for the financial year ended 31st March, 2015.

Total cash outflow on account of dividend payment including dividend distribution tax will be H69.72 Mn for the financial year ended 31st March, 2015.

Reserves

During the year under review, your Company transferred a sum of H10.00 Mn to Capital Redemption Reserve on account of redemption of 100,000 Preference Shares of H100/- each face value.

During the year under review, no amount was transferred to General Reserve.

Share Capital

Your Company has, on 30th March, 2015, issued and allotted 240,06,494 equity shares of H1/- each to qualified institutional buyers under QIP for cash at H54.67 (including premium) per Equity Share.

In accordance to the terms of the issue, your Directors at their meeting held on 7th February, 2015 has decided to redeem the entire 13,50,000 7% Redeemable Cumulative Preference Shares of face value of H100/- per share at par out of the profits in tranches before the due date of redemption i.e 27th March, 2018. Accordingly, on 7th February, 2015, your Directors have redeemed 1,00,000 preference shares at par.

Consequently, the Issued, Subscribed and Paid-up Equity Share Capital stands increased to H409.31 Mn. and the Issued, Subscribed and Paid-up Preference Share Capital stands reduced to H125.00 Mn. as on 31st March, 2015.

Foreign Currency Convertible Bonds (Bonds)

Your Company had issued 50,000 Bonds of USD 1,000 each in principal value during the financial year. As on the date of this report, your Company has bought back and extinguished 49,939 Bonds. As on the date of this report, only 61 Bonds of USD 1,000 each in principal value (out of total 50,000 Bonds issued) remained outstanding as the same are not traceable and adequate provision has been made in the book of accounts therefore.

Number of Meetings of the Board

The Board met 8 (Eight) times in financial year 2014-15 viz., 29.05.14, 26.06.14, 15.07.14, 12.08.14, 25.09.14, 31.10.14, 23.12.14 and 07.02.15.

Particulars Regarding Conversation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the relevant information and data are annexed to this report as Annexure A.

Research and Development (R&D)

Your Company is committed to continuously fund its R&D capabilities. One of the Company's biggest strength lies in vibrant and productive R&D function that has continuously placed your Company ahead through consistent development of niche technology, processes and products. Your Company will continue to invest in R&D to keep pace with the changing domestic and global scenario. During the year, your company invested 4.26 % of its total revenue in R&D and related spends amounting to H174.11 Mn with continued product development and dossier filing in US, Europe and other emerging markets.

Details Relating to Deposits, Covered under Chapter V of the Companies Act 2013

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Subsidiaries, Joint Ventures and Associate Companies

i. Performance of Marksans Pharma (UK) Limited, which operates in the European market has improved.

ii. Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60% of the share capital) which operates mainly in Australia is doing well with consistent growth.

Pursuant to a Central Government's Circular dated 8th February, 2011, the audited accounts together with Director's Report and Auditor's Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia Pty Limited and M/s. Marksans Pharma (U.K.) Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet.

iii. Your company has acquired 100% share capital of Time- Cap Laboratories Inc., New York through a wholly owned subsidiary Marksans Pharma Inc. Time-Cap was founded in 1979 and is a leading manufacturer and marketer of solid dose generic pharmaceuticals, including private label over-the-counter ("OTC") medications, generic prescription drugs ("Rx"), and nutritional supplements. Time-Cap manufactures over 50 unique products from its facility in Farmingdale, New York, including tablets, caplets, capsules and pellets. Time-Cap will be an ideal platform for your Company to expand its operation in the US. This strategic acquisition will help Marksans to expand its manufacturing capabilities along with product portfolio and penetration into the US. Time-Cap is a zero debt company.

Your Company has no Joint Ventures and Associate Companies

Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Internal Financial Control Systems and Their Adequacy

Your company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company's tangible and intangible assets and compliance with policies, applicable laws, rules and regulations. Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. The Audit Committee has a process for timely check for compliance with the operating systems, accounting procedures and policies. Major risks identified by the businesses and functions are systematically addressed through mitigating action on continuing basis.

Information Technology

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

Health, Safety & Environment

Your company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is also committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

Related Party Transactions

There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel or their relatives.

All Related Party Transactions that were entered into during the financial year were in the ordinary course of business on arm's length basis and repetitive in nature. All Related Party Transactions were placed before the Audit Committee of the Board of Directors for information and are entered in the Register maintained under Section 189 of the Companies Act, 2013. The Audit Committee has granted omnibus (ad hoc) approval for Related Party Transactions as per the provisions and restrictions contained in the policy framed under Clause 49 of the Listing Agreement. The policy is available on the Company's website www.marksanspharma.com

Evaluation of Performance of Board, Committee, and Directors

Performance evaluation of the Board as a whole, the Committees of Directors and all individual Directors during the year under review has been carried out in accordance with the criteria framed pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Board of Directors has expressed its satisfaction over the evaluation process.

All the independent directors of your Company also had a separate meeting without the attendance of executive directors and management personnel and reviewed the performance of the Board of Directors as a whole, the Chairman of the Board and the executive non-independent directors and have expressed their satisfaction over the same. The independent directors have also reviewed and expressed their satisfaction over the quality, quantity and timeliness of flow of information between the company management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Policy on Directors Appointment and Remuneration

Nomination and Remuneration Committee of the Company has formulated a policy relating to nomination and remuneration of directors as well as key managerial personnel and other employees of the Company. The Nomination and Remuneration Policy, inter alia, provides for the following:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director in terms of Diversity Policy of the Board and recommend to the Board his / her appointment.

For the appointment of KMP (other than Managing / Wholetime Director) or Senior Management, a person should possess adequate qualification, expertise and experience for the position he / she is considered for the appointment. Further, for administrative convenience, the appointment of KMP (other than Managing / Wholetime Director) or Senior Management, the Managing Director is authorised to identify and appoint a suitable person for such position.

The remuneration / compensation / commission, etc., as the case may be, to the Managing / Whole-time Director will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission, etc., as the case may be, shall be subject to the prior / post approval of the shareholders of the Company and shall be in accordance with the provisions of the Companies Act, 2013 and Rules made there under. Further, the Managing Director of the Company is authorised to decide the remuneration of KMP (other than Managing / Whole-time Director) and Senior Management, and which shall be decided by the Managing Director based on the standard market practice and prevailing HR policies of the Company.

The remuneration / commission / sitting fees, as the case may be, to the Non-Executive / Independent Director, shall be in accordance with the provisions of the Companies Act, 2013 and the Rules made there under for the time being in force or as may be decided by the Committee / Board / shareholders.

An Independent Director shall not be entitled to any stock option of the Company unless otherwise permitted in terms of the Act and the Clause 49, as amended from time to time.

Whistle Blower Policy/Vigil Mechanism

Your Company has established a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. This policy establishes a vigil mechanism for directors and employees to report their genuine concerns actual or suspected fraud or violation of the Company's code of conduct. Details of the Whistle Blower Policy is displayed on the website of the Company www.marksanspharma.com.

The said mechanism also provides for adequate safeguards against victimisation of the persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee. We confirm that during the financial year 2014-2015, no employee of the Company was denied access to the Audit Committee.

Risk Management Policy

Your Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing/ mitigating the same. Your Company has institutionalized the policy/process for identifying, minimizing and mitigating risk which is reviewed. The key risks and mitigation actions are placed before the Audit Committee.

Corporate Social Responsibility

Pursuant to Section 135 of the Act, your Company has constituted a Corporate Social Responsibility (CSR) Committee. The CSR Committee provides guidance on various CSR activities to be undertaken by the Company as per the CSR Policy and monitors its progress. Company's CSR Policy is available on the Company's website www.marksanspharma.com. Your company has registered an average net loss for the preceding three financial years amounting to H(3,038.01) Lacs. Hence, the CSR Committee has not recommended any CSR Expenditure for the financial year ended 31st March, 2015.

Directors Responsibility Statement

In terms of provisions of Section 134(3)(c) of the Companies Act, 2013 your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that 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 financial year ended 31st March, 2015 and the Statement of Profit and Loss for the period ended 31st March, 2015;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis.

- Proper internal finance controls were in place and that the financials control were adequate and were operating effectively.

- Had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration from Independent Directors:

The Company has received declarations from all the Independent

Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Familiarization Programme for Independent Directors:

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Company's policy on the familiarization program for the independent directors is available on the Company's website www.marksanspharma.com.

Disclosure Under Sexual Harassment of Woman at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints regarding sexual harassment at Mumbai office as well as Goa plants. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, no complaints were received by the Company related to sexual harassment at both the sites.

Significant and Material orders Passed by the Regulators or Courts or Tribunals

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

Change in the Nature of Business

During the year under review there is no change in the nature of Business of the Company.

Extract of Annual Return

The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT- 9 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure B to this Report.

Employees

The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of 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 annexed herewith as Annexure C.

The statement showing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure D.

Human Resources Development and Industrial Relations:

The guiding principle of HR Policy at your company is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the company's quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your company is cordial.

As on 31st March, 2015, the Company's permanent employee strength was 421(436 as on 31st March, 2014).

Audit Committee of the Company

Your Company's Audit Committee comprises the following 3(Three) Independent Directors and 1(One) Executive Director:

Sr. Name of the Directors Designation No

1. Mr. Seetharama R. Buddharaju Non-Executive & Independent

2. Mr. Naresh B. Wadhwa Non-Executive & Independent

3. Mr. Ajay S. Joshi Non-Executive & Independent

4. Dr. Balwant S. Desai Executive & Non Indepemdent

The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Companies Act, 2013.

Directors & KMP:

In accordance with the provisions of the Section 152(6)(e) of the Companies Act, 2013 read with the Articles of Association of the Company, Dr. Balwant Shankarrao Desai (DIN: 03631170), Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Mark Saldanha's term as the Managing Director of the Company will expire on 5th October, 2015. Your directors have proposed to re-appoint him as the Managing Director of the Company for a further period of five years with effect from 6th October, 2015.

Mr. Ajay Shivram Joshi and Mr. Seetharama Raju Buddharaju are being proposed to be re-appointed as Independent Directors.

During the year under review, appointment of Mr. Jitendra Sharma, Chief Financial Officer of the Company was formalized in accordance with the Companies Act, 2013.

Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance is annexed herewith as Annexure E.

Auditors:

M/s. N. K. Mittal & Associates, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that they are eligible and are not disqualified for the appointment and that their appointment, if made, would be within the prescribed limits under the provisions of the Companies Act, 2013. The Board recommends their re-appointment as Statutory Auditors of the Company.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. N. K. Mittal & Associates, Chartered Accountants Statutory Auditors, in their report.

Cost Audit

Your Company is a 100% export oriented unit and therefore it is exempted from audit of its cost accounting records.

Secretarial Audit

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors has appointed Ms. Khushboo Bakul Gopani, a practicing company secretary (Membership No.29194) as Secretarial Auditor to undertake the Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed herewith as Annexure F.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

However, as per the observation made by the Secretarial Auditor in their Report, the Company has not considered re- appointment of two existing Independent Directors as an Independent Director for a specified term, not liable to retire by rotation at their 22nd Annual General Meeting of the Company.

In regard to this, the company hereby clarifies as follows:

As per the provisions of the Companies Act, 2013, every existing company shall appoint an independent director within one year from the date of notification of the rules. The Company already had the requisite number of independent directors as on date of notification of rules. In order to comply with the provisions of the Companies Act, 2013, the Board has appointed Mr. Ajay Joshi and Mr. Seetharama Raju Buddharaju w.e.f. 1st April, 2015 in the Board Meeting held on 7th February, 2015 as the Independent Directors of the Company subject to the approval of members in the ensuing Annual General Meeting.

Appreciation

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company's Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.



By order of the Board of Directors

Mark Saldanha

Mumbai Chairman & Managing Director

Dated 8th August, 2015 DIN: 00020983


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the 22nd Report together with the Audited Accounts of the Company for the year ended 31st March, 2014.

Financial Results (Rs in Million)

Particulars 2013-14 2012-13

Turnover 3149.45 1922.97

Profit before Depreciation & Amortization expenses, Non-recurringexpenses and 719.15 383.08

Tax expenses Less:

Depreciation & Amortization Expenses 86.56 87.03

Non-recurring expenses - -

Tax expenses 77.02 (99.78)

Profit after Tax 555.57 395.83

OPERATIONS

During the year ended 31st March, 2014, total turnover achieved by your company was H3149.45 Mn as compared to H1922.97 Mn in the previous year. The year under review has registered a net profit of H555.57 Mn as compared to H395.83 Mn in the previous year. This is mainly due to strong business and improved financial performances, new ANDA product licenses in US markets and also due to better realization on account of currency movement.

DIVIDEND

Your Directors have recommended dividend of Rs.0.10 (10%) per equity share of Rs.1/- each face value for the financial year ended 31st March 2014. The Preference Shareholder will also get dividend of Rs.7/- (7 percent ) per preference share of Rs.100/- each face value.

Total cash outflow on account of dividend payment including dividend distribution tax will be Rs.56.13 Mn for the financial year ended 31st March, 2014.

Research and DevelOpment (R&D) The global challenges for the Indian pharma industry at large have increased several folds and to face the challenges, your company has continuously sharpened its focus on R&D, which is the need of the hour and will continue to commit funds to strengthen R&D capabilities. In fact, one of the Company''s biggest strength lies in vibrant and productive R&D function that has continuously placed Marksans Pharma Ltd ahead through consistent development of niche technology, processes and products. Your company will continue to invest in R&D to keep pace with the changing domestic and global scenario. During the year, your company invested 6.33 percent of its total revenue in R&D and related spends amounting to H201.37 Mn with continued product development and dossier filing in US, Europe and other emerging markets.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBS)

The Company had signed settlement agreement with few bond holders for settlement of 36,789 Bonds of US$1000 each in principal value representing about 97 percent of the outstanding bonds during February 2013.

One bond holder holding 15,278 Bonds has defaulted in surrendering the third and final tranche bonds as per the settlement terms even though the company was ready to pay the settlement consideration. They had already executed first and second tranche bonds which were subsequently cancelled and extinguished but have defaulted in executing the third and final tranche settlement. The company has, therefore, filed a suit in the High Court of England for specific performance by the bond holder in accordance with the settlement agreement. In the meantime, the English High Court has granted injunction restraining the bond holder from selling or transferring their bonds to or create any interest in such bonds in favour of any person or entity other than the Company until further order of the court.

INTERNAL CONTROL SYSTEMS

Your company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company''s tangible and intangible assets and compliance with policies, applicable laws, rules and regulations.

INFORMATION TECHNOLOGY

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

Health, safety & envirOnment Your company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is also committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

FIXED DEPOSITS

During the year under review, your company has not accepted any deposits.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(AA) of the Companies Act, 1956 the Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been selected and applied consistently and judgments and estimates made that 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 financial year ended 31st March, 2014 and the Statement of Profit and Loss for the period ended 31st March, 2014;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Statement of Profit and Loss, it may be observed that the turnover for the year under review has increased to H6299.97 Mn from H4384.22 Mn in the previous financial year. During the year under review, your company registered a consolidated net profit of H719.08 Mn as compared to net profit of H458.83 Mn during the previous financial year.

SUBSIDIARIES

Performance of Marksans Pharma (UK) Limited, which operates in the European market has improved.

Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60 percent of the share capital) which operates mainly in Australia is doing well with consistent growth.

Pursuant to a Central Government''s Circular dated 8th February, 2011, the audited accounts together with Director''s Report and Auditor''s Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia Pty Ltd and M/s. Marksans Pharma (UK) Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

EMPLOYEES

There was no employee drawing remuneration exceeding RS.60 Lacs per annum or Rs.5 Lacs per month during the year ended 31st March, 2014 and therefore, provisions of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employee) Rules 1975, as amended up to date do not apply.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The guiding principle of HR Policy at your company is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the company''s quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your company is cordial.

As on 31st March, 2014, the Company''s permanent employee strength was 436 (388 as on 31st March, 2013).

DIRECTORS

Dr. Balwant Shankarrao Desai, Whole-time Director of your company will cease to be a Director on the forthcoming Annual General Meeting and accordingly will also cease to be Whole-time Director. Dr. Balwant Shankarrao Desai has offered himself for re-appointment as a Director. Dr. Desai has been associated with your company since 7th March, 2006 looking after quality management systems and regulatory affairs. The Board recommends his re-appointment as a whole-time director of the Company.

Your Directors have proposed that Mrs. Sandra Saldanha be appointed as a Whole-time Director of the Company. Requisite notice has been received from a member proposing Mrs. Sandra Saldanha for appointment as a Director. Mrs. Sandra Saldanha has a vast experience in the field of Human Resource Management, Business Development, Projects and Supply Chain Management. The Board recommends her appointment as a Whole-time Director of the Company.

Mr. Naresh B. Wadhwa, who was appointed as an additional director with effect from 31st October, 2013, will vacate the office from the forthcoming Annual General Meeting. Requisite notice has been received from a member proposing Mr. Naresh B. Wadhwa for appointment as an independent Director. Mr. Wadhwa is a technocrat and has been instrumental in globalization using India as a platform for innovation and benefit of other emerging markets. He has worked in collaboration with Cisco''s Globalization Center and Cisco''s engineering organization (R&D) to develop and deploy disruptive technology and business models that were leveraged across the world. Technology intervention for inclusive growth across emerging countries is a personal passion for Mr. Wadhwa. The Board recommends his appointment as an independent director of the Company.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and Management Discussion and Analysis and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance forms a part of this report.

AUDITORS

M/s. N. K. Mittal & Associates, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that they are eligible and are not disqualified for the appointment and that their appointment, if made, would be within the prescribed limits under the provisions of the Companies Act, 2013. The Board recommends their re-appointment as Statutory Auditors of the Company.

APPRECIATION

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company''s Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

By order of the Board of Directors Place : Mumbai Mark Saldanha Dated : 29th May, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors take pleasure in presenting the 21st Report together with the Audited Accounts of the Company for the year ended 31 March, 2013.

FINANCIAL RESULTS

(Rs./ Lacs) Particulars 2012-13 2011-12

Turnover 19,229.70 15,459.13

Profit before Depreciation & 3,830.84 (2,328.91)

Amortization expenses, Non- recurring expenses and Tax expenses

Less:

Depreciation &

Amortization Expenses 870.33 179812

Non-recurring expenses 14,163.27

Tax expenses (997.77) (183.69)

Profit after Tax 3,958.28 (18,106.61)

OPERATIONS

During the year ended 31 March, 2013, total turnover achieved by your company was Rs. 19229.70 Lacs as compared to Rs. 15459.13 Lacs in the previous year. The year under review has registered a net profit of Rs. 3958.28 Lacs as against net loss of Rs. 18106.61 Lacs in the previous year. This is mainly due to strong business and improved financial performances, new ANDA product licenses in US markets and also due to better realization on account of currency movement.

RESEARCH AND DEVELOPMENT

The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005 and to face the challenge, your company has continuously sharpened its focus on R & D, which is the need of the hour and will continue to commit funds to strengthen R & D capabilities. In fact, one of the Company''s biggest strength lies in vibrant and productive R & D function that has continuously placed Marksans Pharma Ltd ahead through consistent development of niche technology, processes and products. Your company will continue to invest in R & D to keep pace with the changing domestic and global scenario. During the year, your company continued product development and dossier filing in US, Europe and other emerging markets.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

Your company has signed settlement agreement with few bond holders for settlement of principal value of USD 36,789,000 worth of Bonds. Under the settlement agreement, the settlement amount is payable over a period of 12 months from the date of signing the respective settlement agreements. Accordingly, the Company has written back the entire amount of USD 36,789,000 Bonds along with redemption premium of USD 16,628,628 (aggregating to USD 53,417,628) and provided for new liability based on the settlement payout in terms of the Settlement Agreements in the books of accounts for the year ended 31 March, 2013.

DE-REGISTRATION FROM BIFR

Due to settlement of a substantial amount of FCCBs and improved financial performance of your company, the Net Worth of your company has turned positive as at 31 March, 2013. Therefore, your company has been de-registered from the purview of SICA and is no longer under BIFR.

INTERNAL CONTROL SYSTEMS

Your company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company''s tangible and intangible assets and compliance with policies, applicable laws, rules and regulations.

INFORMATION TECHNOLOGY

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

HEALTH, SAFETY & ENVIRONMENT

Your company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is also committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

DIVIDEND

In view of settlement payout to the Bond holders, the Board of Directors is not recommending any dividend for the financial year ended 31 March, 2013.

FIXED DEPOSITS

During the year under review, your company has not accepted any deposits.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(AA) of the Companies Act, 1956 the Directors confirm that: in the preparation of the annual accounts, the applicable accounting standards have been followed; appropriate accounting policies have been selected and applied consistently and judgments and estimates made that 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 financial year ended 31 March, 2013 and the Statement of Profit and Loss for the period ended 31 March, 2013; proper and sufficient care has been taken for the 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; the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Statement of Profit and Loss, it may be observed that the turnover of the year under review has increased to Rs. 43842.23 Lacs from Rs. 35554.87 Lacs in the previous financial year. During the year under review, your company registered a consolidated net profit of Rs. 4882.62 Lacs as against the net loss of Rs. 17607.93 Lacs during the previous financial year.

SUBSIDIARIES

Performance of Marksans Pharma (UK) Limited, which operates in the European market has improved.

Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60% of the share capital) which operates mainly in Australia is doing well with consistent growth.

Pursuant to a Central Government''s Circular dated 8th February, 2011, the audited accounts together with Director''s Report and Auditor''s Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia PTY Limited and M/s. Marksans Pharma (U.K.) Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

EMPLOYEES

There is no employee drawing remuneration exceeding Rs. 60 Lacs per annum or Rs. 5 Lacs per month during the year ended 31 March, 2013 and therefore, provisions of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employee) Rules 1975, as amended up to date do not apply.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The guiding principle of HR Policy at your company is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the company''s quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your company is cordial.

As on 31 March, 2013, the Company''s permanent employee strength was 388.

DIRECTORS

Mr. Seetharama Raju Buddharaju, who was appointed as a Director to fill the casual vacancy caused by the resignation of Mr. M. B. Parikh with effect from 5th October, 2011, will vacate the office from the forthcoming Annual General Meeting. Your company has received notice from a member proposing the appointment of Mr. Seetharama Raju Buddharaju as a Director of the Company. The Board recommends the appointment of Mr. Seetharama Raju Buddharaju as a Director liable to retire by rotation.

CORPORATE GOVERNANCE

Pursuant to the Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and Management Discussion and Analysis and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance forms a part of this report.

AUDITORS

Members of the Company are requested to appoint Auditors for the ensuing year. It is proposed to appoint M/s. N. K. Mittal and Associates, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits Under Section 224 of the Companies Act, 1956. The Board recommends their appointment as Statutory Auditors.

APPRECIATION

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company''s Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

By order of the Board of Directors

Mumbai Mark Saldanha

Dated 16th August, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors take pleasure in presenting the 20th Report together with the Audited Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs in Lacs)

Particulars 2011-12 2010-11

Turnover 15459.13 15469.77

Profit before Depreciation & (2328.91) (11808.21) Amortization expenses, Non- recurring expenses and Tax expenses

Less:

Depreciation &

Amortization

Expenses 1798.12 1464.39

Non-recurring expenses 14163.27 -

Tax expenses (183.69) 484.63

Profit after Tax (18106.61) (13757.23)

OPERATIONS :

During the year ended 31st March, 2012, total turnover achieved by your company was Rs. 15459.13 Lacs as compared to previous year of Rs. 15469.77 Lacs. Though during the year under review, the sales from formulation business have increased, the comparision with previous year is showing a negligible decrease of Rs. 10.64 Lacs. This is because previous year's turnover also includes sales of the erstwhile API division which was sold during the previous year. This year's turnover consists of formulation business only.

The year under review has registered a net loss of Rs. 18106.62 Lacs as compared to net loss of Rs. 13757.24 Lacs in the previous year. This is mainly due to the charging of the diminution in the value of investment and impairment of assets during the year under review.

RESEARCH AND DEVELOPMENT

The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005 and to face the challenge, your company has continuously sharpened its focus on R & D, which is the need of the hour and will continue to commit funds to strengthen R & D capabilities. In fact, one of the Company's biggest strength lies in vibrant and productive R & D function that has continuously placed Marksans Pharma Ltd ahead through consistent development of niche technology, processes and products. Your company will continue to invest in R & D to keep pace with the changing domestic and global scenario. During the year, your company continued product development and dossier filing in US, Europe and other emerging markets.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

The current outstanding of principal value of FCCBs is Rs. 19746.64 Lacs and a further redemption premium of Rs. 8925.48 Lacs. As disclosed in our last reports, the FCCBs have become due for redemption in November 2010 but have not been redeemed on the due date due to financial constraints. Further, due to the redemption default, there will be a default interest payable at 8% p.a. from the due date of redemption. No provision for default interest has yet been made in the books of accounts.

EROSION OF NET WORTH AND REFERENCE TO BIFR

As reported in our last reports, the Net Worth of the Company as on 31st March, 2011 had been completely eroded. Therefore, as required under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, we have made a reference to the Board for Industrial and Financial Reconstruction for determining measures that will be adopted with respect to the Company. Accordingly, your Company is registered with the Board for Industrial and Financial Reconstruction.

INTERNAL CONTROL SYSTEMS

Your company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company's tangible and intangible assets and compliance with policies, applicable laws, rules and regulations.

INFORMATION TECHNOLOGY

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

HEALTH, SAFETY & ENVIRONMENT

Your company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is also committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

DIVIDEND

In view of net loss during the year under review, the Board of Directors is not recommending any dividend for the financial year ended 31st March, 2012.

FIXED DEPOSITS

During the year under review, your company has not accepted any deposits.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(AA) of the Companies Act, 1956 the Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been selected and applied consistently and judgments and estimates made that 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 financial year ended 31st March, 2012 and the Statement of Profit and Loss for the period ended 31st March, 2012;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Statement of Profit and Loss, it may be observed that the turnover of the year under review has increased to Rs. 35554.87 Lacs from Rs. 30457.81 Lacs during the previous financial year and net loss after tax has reduced to Rs. 17883.97 from Rs. 22,324.45 Lacs in the previous year.

SUBSIDIARIES

Performance of Mark sans Pharma (UK) Limited, which operate in the European market is satisfactory, though not as expected, considering the adverse economic scenario in that market and changed ownership structure. The business model of the Company has now been changed to secure sustained profitable growth in the years ahead.

Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60% of the share capital) which operates mainly in Australia, is doing well with consistent growth.

Pursuant to a Central Government's Circular dated 8th February, 2011, the audited accounts together with Director's Report and Auditor's Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia PTY Limited and M/s. Marksans Pharma (U.K.) Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

EMPLOYEES

There is no employee drawing remuneration exceeding Rs. 60 Lacs per annum or Rs. 5 Lacs per month during the year ended 31st March, 2012 and therefore, provision of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employee) Rules 1975, as amended up to date does not apply.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The guiding principle of HR Policy at Marksans is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the company's quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relation at all the plant sites of your company is cordial.

As on 31st March, 2012 the Company's permanent employees strength was 718.

DIRECTORS

Mr. V. Nagaraj, Whole-time Director resigned as Director and Whole-time Director, which the Board accepted effective from 29th June, 2011. Dr. Balwant Shankarrao Desai has been appointed as a Whole-time Director in the last AGM held on 29th September, 2011.

Mr. M. B. Parikh resigned as a Director of the Company effective from 5th October, 2011. The Board of Directors has appointed Mr. Seetharama Raju Buddharaju as a Director to fill the casual vacancy caused by the resignation of Mr. M. B. Parikh with effect from 5th October, 2011.

Mr. Ajay S. Joshi, who was appointed to fill the casual vacancy caused by the resignation of Mr. Kumar Nair, will vacate the office from the forthcoming AGM. Your company has received notice from a member proposing the appointment of Mr. Ajay S. Joshi as a Director of the Company. The Board recommends the appointment of Mr. Ajay S. Joshi as a Director liable to retire by rotation.

CORPORATE GOVERNANCE

Pursuant to the Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and Management Discussion and Analysis and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance forms a part of this report.

AUDITORS

Members of the Company are requested to appoint Auditors for the ensuing year. It is proposed to appoint M/s. N, K. Mittal and Associates, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits Under Section 224 of the Companies Act, 1956. The Board recommends their appointment as Statutory Auditors.

APPRECIATION

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company's Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

By order of the Board of Directors

Mumbai Mark Saldanha

Dated 14th August, 2012 Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting the 19th Report together with the Audited Accounts of the Company for the year ended 31st March, 2011.

FINANCIAL RESULTS

(Rs./Lac)

Particulars 2010-11 2009-10

Turnover 15543.76 19956.21

Profit/(Loss) Before (9628.43) 1046.59 Depreciation, Taxation & non recurring items

Less: Depreciation 1464.38 983.92

Provision for Taxation 138.49 8.50

Non Recurring Items 10201.47 -

Deferred Tax 346.14 25.19

Net Profit/(Loss) for the year (21778.91) 28.98

Add: Profit & Loss A/c. Balance 6505.73 6476.75 at the beginning of the year

Balance Carried to Balance (15273.18) 6505.73 Sheet

OPERATIONS:

During the year ended 31st March, 2011, total turnover achieved by your Company was Rs. 15543.76 Lacs as compared to previous year of Rs. 19956.21 Lacs, i.e., a decrease of Rs. 4412.45 Lacs mainly due to sale of the API business. The year under review has registered a net loss of Rs. 21778.91 Lacs as compared to net profit Rs. 28.98 Lacs in the previous year. This is mainly due to loss on the sale of API Business of Rs. 8663.88 Lacs, provision of redemption premium of FCCBs of Rs. 9017.33 Lacs and provision of foreign exchange loss on FCCBs of Rs. 2363.45 Lacs. Baring the aforesaid constraints, operational performance of the Company mainly international formulation business is improving gradually.

RESEARCH AND DEVELOPMENT:

The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005 and to face the challenge, your company has continuously sharpened its focus on R & D, which is the need of the hour and will continue to commit funds to strengthen R & D capabilities. In fact, one of the Company's biggest strength lies in vibrant and productive R & D function that has continuously placed Marksans Pharma Ltd. ahead through consistent development of niche technology, processes and products. Your company will continue to invest in R & D to keep pace with the changing domestic and global scenario. During the year, your company continued product development and dossier filing in US, Europe and other emerging markets.

DISPOSAL OF API PLANTS

Due to severe pricing pressure, foreign exchange fluctuations and rising raw material prices, Active Pharmaceutical Ingredient (API) division of your company located at Kurkumbh, Pune was not performing well. As a measure of restructuring business model, the Company has, with the approval of the shareholders, hived off this API division and a Business Transfer Agreement signed in this regard with Kores (India) Limited on 28th July, 2010. Consequently, the Company has sold the API business to Kores (India) Limited in July, 2010 on a slump sale basis, resulting into loss of Rs. 8663.88 Lacs.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

The current outstanding of principal value of FCCBs is USD 43,999,000 (Rs. 19949.85 Lacs) and a further redemption premium of USD 19.89 Mn. (Rs. 9017.33 Lacs). The FCCBs have become due for redemption in November, 2010. The redemption premium of USD 19.89 Mn. (Rs. 9017.33 Lacs) has become payable alongwith the principal amount of USD 43,999,000 (Rs. 19949.85 Lacs) (total due USD 63.89 Mn or Rs. 28967.18 Lacs). However, the FCCBs have not been redeemed on the due date due to financial constraints. The Management was in constant discussion with the bond holders for restructuring of the FCCBs and were offered various options. However, the negotiation has not yielded any result as on the date of this report.

The Company has provided for these liabilities in its books of accounts resulting into further erosion of its net worth. Further, due to the redemption default, there will be a default interest payable at 8% p.a. from the due date of redemption. No provision for default interest has been made in the books of accounts.

EROSION OF NET WORTH AND REFERENCE TO BIFR

After making of provision of loss on the sale of API business amounting to Rs. 8663.88 Lacs, redemption premium on the FCCBs of Rs. 9017.33 Lacs and foreign exchange loss on FCCBs of Rs. 2363.45 Lacs in the books of accounts for the year ended 31st March, 2011, the Net Worth of the Company as on 31st March, 2011 has been completely eroded. Therefore, the Directors have formed an opinion that the Company has become a Sick Industrial Company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and it is mandatory under the provisions of the said Act to make a reference to the Board for Industrial and Financial Reconstruction for determining measures that will be adopted with respect to the Company. Under the circumstances, the Directors will make a reference to the Board for Industrial and Financial Reconstruction within the stipulated time after the adoption of the accounts by the Shareholders in the forthcoming AGM.

INTERNAL CONTROL SYSTEMS:

Your company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Company's tangible and intangible assets and compliance with policies, applicable laws, rules and regulations.

INFORMATION TECHNOLOGY:

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

HEALTH, SAFETY & ENVIRONMENT:

Your company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is also committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

DIVIDEND:

In view of net loss during the year under review, The Board of Directors is not recommending any dividend for the financial year ended 31st March, 2011.

FIXED DEPOSITS:

During the year under review, your company has not accepted any deposits.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of provisions of Section 217(AA) of the Companies Act, 1956 the Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been selected and applied consistently and judgments and estimates made that 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 financial year ended 31st March, 2011 and the Profit and Loss Account for the period ended 31st March, 2011;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS:

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Profit and Loss Account, it may be observed that the turnover stands at Rs. 30,531.80 Lacs as compared to Rs. 35,936.58 Lacs during the previous financial year and net loss after tax stands at Rs. 22,324.45 Lacs as compared to Rs. 1,004.35 Lacs in the previous year. This is mainly on account of loss on the sale of API Business, provision of redemption premium of FCCBs and provision of foreign exchange loss on FCCBs of Rs. 2363.45 Lacs.

SUBSIDIARIES:

Performance of Bell, Sons & Co. (Druggists) Limited (wholly owned subsidiaries of Marksans Pharma (UK) Limited), which operate in the European market, has improved in comparison to the previous year so far as sales in concerned. However, profit after tax has reduced mainly due to higher expenses incurred on new product development and interest costs. The performance of Relonchem Limited (wholly owned subsidiaries of Marksans Pharma (UK) Limited), which also operate in the European market is satisfactory, though not as expected, considering the adverse economic scenario in that market and changed ownership structure. Though turnover has reduced, the loss after tax has also reduced. The business model of the Company has now been changed to secure sustained profitable growth in the years ahead.

Nova Pharmaceuticals Australasia Pty Ltd. (your Company holds 60% of the share capital) which operates mainly in Australia, is doing well.

Pursuant to a Central Government's Circular dated 8th February, 2011, the audited accounts together with Director's Report and Auditor's Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia PTY Limited and M/s. Marksans Pharma (U.K.) Limited are not being appended to the Annual Report. However, a statement giving information in aggregate for each subsidiary including subsidiaries of subsidiaries are attached to the Consolidated Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

EMPLOYEES:

There is no employee drawing remuneration exceeding Rs. 60 Lacs per annum or Rs. 5 Lacs per month during the year ended 31st March, 2011 and therefore, provision of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employee) Rules 1975, as amended up to date does not apply.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS:

The guiding principle of HR Policy at Marksans is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the Company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the company's quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

The management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relations at all the plant sites of your Company is cordial.

As on 31st March, 2011 the Company's permanent employees strength was 368 (474 in the previous year).

DIRECTORS:

Mr. Kumar Nair has resigned as a Director of the Company with effect from 2nd November, 2010. The Board of Directors has appointed Mr. Ajoy S. Joshi as a Director to fill the casual vacancy caused by the resignation of Mr. Kumar Nair with effect from 2nd May, 2011.

Mr. M.B. Parikh will be retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

Mr. V. Nagaraj, Whole-time Director has submitted his resignation as Director and Whole-time Director. The Board has accepted his resignation and he will be relieved from service effective from 29th June, 2011.

Your company has received notice from a member proposing the appointment of Dr. Balwant Shankarrao Desai as a Director of the Company. Dr. Desai has been associated with your company since 7th March, 2006 looking after quality management systems and regulatory affairs. The Board recommends the appointment of Dr. Desai as a Whole-time Director in the forthcoming AGM.

CORPORATE GOVERNANCE:

Pursuant to the Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and Management Discussion and Analysis and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance forms a part of this report.

AUDITORS:

Members of the Company are requested to appoint Auditors for the ensuing year. It is proposed to appoint M/s. N. K. Mittal and Associates, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits Under Section 224 of the Companies Act, 1956. The Board recommends their appointment as Statutory Auditors.

APPRECIATION:

The directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

The directors also appreciate the valuable co-operation and continued support extended by Company's Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

By order of the Board of Directors

Mark Saldanha Chairman & Managing Director

Mumbai Dated 28th June, 2011


Mar 31, 2010

The Directors take pleasure in presenting the 18th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

(RS./LAC) Particulars 2009-10 2008-09

Turnover 19956.21 20356.11

Profit Before Depreciation, Taxation

& non recurring items 1046.59 1212.04

Less: Depreciation 983.92 972.97

Provision for Taxation 8.50 66.01 Non Recurring Items

Deferred Tax 25.19 123.57

Net Profit for the year 28.98 49.49

Add: Profit & Loss A/c. Balance at

the beginning of the year 6476.75 6427.26

Balance Carried to Balance Sheet 6505.73 6476.75

OPERATIONS:

During the year ended 31st March, 2010, total turnover achieved by your company was Rs. 19956.21 Lacs as compared to previous year of Rs 20356.11 Lacs, i.e., a decrease of Rs. 399.9 Lacs and net profit for the year has come down to Rs. 28.98 Lacs as compared to previous year of Rs. 49.49 Lacs. This is mainly due to increased raw material price and stiff competition.

However, the situation is showing some improvement since the last quarter of the year under review. During the quarter ended 31st March, 2010, your company has achieved a turnover of Rs. 5560.18 Lacs as compared to Rs. 3050.34 Lacs during the same quarter of the preceding financial year. Net profit during the quarter was Rs. 507.49 Lacs as compared to net loss of Rs. 1343.13 Lac during the same quarter of the preceding financial year.

RESEARCH AND DEVELOPMENT:

The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005 and to face the challenge, your company has continuously sharpened its focus on R & D, which is the need of the hour and will continue to commit funds to strengthen R & D capabilities. In fact, one of your companys biggest strength lies in vibrant and productive R & D function that has continuously placed Marksans ahead through consistent development of niche technology, processes and products. Your company will continue to invest in R & D to keep pace with the changing

domestic and global scenario. During the year, your company continued product development and dossier filing in US, Europe and other emerging markets. Drug discovery and new chemical entity development projects needs huge amount of funding. Due to insufficient profits and recessionary market conditions, your company has stopped funding all New Chemical Entity research projects.

INTERNAL CONTROL SYSTEMS:

The Company has in place adequate system of internal control and management information systems which covers all financial and operating functions. These systems are designed in a manner which provides assurance with regard to maintenance of strict accounting control, efficiency of operations, optimum efficiency in operations and utilization of resources as well as financial reporting, protection of Companys tangible and intangible assets and compliance with policies, applicable laws, rules and regulations.

INFORMATION TECHNOLOGY:

Your company continues to make required investments in the Information Technology area to cope up with the growing information needs necessary to manage operations efficiently.

HEALTH, SAFETY & ENVIRONMENT:

Your Company is committed to ensure sound Safety, Health and Environment performance related to its activities, products and services. Your company is committed to strengthen pollution prevention and waste management practices and to provide a safe and healthy environment.

DIVIDEND:

In view of Companys ongoing expansion plans and to support the fund requirements of the Company to stimulate further growth, your Board of Directors is not recommending any dividend for the financial year ended 31st March, 2010.

FIXED DEPOSITS:

During the year under review, your company has not accepted any deposits.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBS)

During the year under review, your company has bought back US Dollar 6,000,000 FCCBs in the open market at the price prevailing in the Singapore Stock Exchange where the FCCBs are listed. Further, one holder of FCCB holding 1 FCCB of US Dollar 1000 had given notice for conversion of the FCCB into Equity Shares of the Company. Accordingly, the Company has allotted on 14.04.2010 1,333 Equity Shares of Re. 1/- each on conversion of one FCCB of US Dollar 1000. As on the date of this report, total outstanding FCCBs is US Dollar 43,999,000.

DISPOSAL OF API PLANTS

Due to severe pricing pressure, foreign exchange fluctuations and rising raw material prices, this division was not performing well. As a measure of restructuring business model, your company has, with the approval of the shareholders, hived off the API business located at Kurkumbh, Pune and a Business Transfer Agreement has been signed in this regard with Kores (India) Limited on 28th July, 2010. Since, the Business Transfer Agreement is signed post 31st March, 2010, no impact thereof is shown in the accounts for the year under review.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of provisions of Section 217(AA) of the Companies Act, 1956 your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed except AS – 11 (Effects of changes in foreign exchange rates) with proper disclosure made in Note 12 of the Notes forming part of the Accounts for the year ended 31st March, 2010;

- appropriate accounting policies have been selected and applied consistently and judgments and estimates made that 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 financial year ended 31st March, 2010 and the Profit and Loss Account for the period ended 31st March, 2010;

- proper and sufficient care has been taken for the 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;

- the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS:

In compliance with the Accounting Standard - 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year under review. From the Consolidated Profit and Loss Account, it may

be observed that the turnover stands at Rs. 35936.58 Lacs as compared to Rs. 36013 Lacs during the previous financial year and net loss after tax stands at Rs. 962.16 Lacs as compared to Rs. 795.48 Lacs in the previous year. This is mainly on account of payments related to acquisition of a company in Europe, foreign exchange fluctuation and amortization of goodwill on acquisition.

SUBSIDIARIES:

Performance of Bell, Sons & Co. (Druggists) Limited (wholly owned subsidiary of Marksans Pharma (UK) Limited), which operate in the European market, has improved in comparison to the previous year. The performance of Relonchem Limited (wholly owned subsidiary of Marksans Pharma (UK) Limited), which also operate in the European market is satisfactory, though not as expected, considering the adverse economic scenario in that market and changed ownership structure. The Directors expect the performance of this company to be much improved in the coming year.

Nova Pharmaceuticals Australasia Pty Ltd (your company holds 60% of the share capital) which operates mainly in Australia, is doing well.

As required under the provisions of Section 212 of the Companies Act, 1956 the audited accounts together with Directors Report and Auditors Report of the subsidiaries namely M/s. Nova Pharmaceuticals Australasia PTY Limited and M/s. Marksans Pharma (U.K.) Limited, made out in accordance with the requirements of the Companies Act, 1956 are appended to and form part of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

EMPLOYEES:

Information under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employee) Rules 1975, as amended up to date for the year ended 31st March,2010 is given here under :

Name Designation Age Gross Qualification Remuneration

Mr. Anurag Pathak Associate Director - 38 3600970.00 PGDBM -

Global Exports Mktg

Dr. Desai Balwant Director - Quality & 46 3116832.00 Ph.D. Shankarrao Regulatory Affairs

Mr. Arun Kumar Director - R&D 59 2403811.00 M Pharma, Shukla Ph.D

Name Experience Date of Last Employment & Remuneration Appoinment Designation

Mr. Anurag Pathak 14 08/09/2008 Pan India Network Infravest Pvt. Ltd.

Vice President - Sales Dr. Desai Balwant 22 07/03/2006 Alembic Ltd Shankarrao Vice President - Quality &

Regulatory Affairs

Mr. Arun Kumar 31 01/04/2009 Gel Tech Pvt. Ltd. Shukla Director - Operations

DIRECTORS:

Mr. Kumar Nair will be retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

CORPORATE GOVERNANCE:

Pursuant to the Clause 49 of the Listing Agreement, a detailed report on Corporate Governance and Management Discussion and Analysis and a certificate from the Auditors regarding compliance with the conditions of Corporate Governance form parts of this report.

AUDITORS:

Members of the Company are requested to appoint Auditors for the ensuing year. It is proposed to appoint M/s. N. K. Mittal and Associates, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letter from them to the effect that his appointment, if made, would be within the prescribed limits Under Section 224 of the Companies Act, 1956. The Board recommends their appointment as Statutory Auditors.

COST AUDITORS:

The Board of Directors has appointed Girish S. Maniar. Cost Accountants, as Cost Auditor for audit of the cost accounting records relating to Bulk Drugs and Formulations for the year ending 31st March, 2011.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS:

The guiding principle of HR Policy at Marksans is that the "Intellectual Capital" and dedication of employees will help the Company emerge as a successful player in this highly competitive scenario.

The recruitment procedure ensures that people with talent and the right skill sets are selected. Nurturing of talent and a Performance Management System (PMS) is in place to ensure that the coordinated efforts of our people lead to achievement of the Business Goals of the company.

Empowerment and a motivational package ensure that employees keep performing at peak levels. The HR Policy

is directed towards creating "Ownership of Goals" at levels and synchronizing the efforts of all employees to achieve the companys quality and business goals.

Development of skills through mentoring and training by our seasoned professionals ensures that the talent pool keeps expanding. The Leadership Role played by our senior professionals helps to keep the next rung of leadership ready to take up the challenges thrown up by the global market.

Your management helps the process of decision making by decentralizing and empowering professionals to execute tasks in a speedy manner. The management fosters information sharing and free exchange of ideas. Above all, the sense of ownership and empowerment to take decisions helps the Company to adapt and be ahead of the competition in this rapidly changing global environment.

The industrial relations at all the plant sites of your company is cordial.

As on 31st March, 2010 the Companys permanent employees strength was 474 (442 in the previous year).

APPRECIATION:

Your directors place on record their appreciation for the contribution made by the employees at all levels enabling the Company to achieve the performance during the year under review.

Your directors also appreciate the valuable co-operation and continued support extended by Companys Bankers, Medical Professionals, Business Associates and Investors who have put their faith in the Company.

By order of the Board of Directors

Mark Saldanha

Chairman & Managing Director

Mumbai

Dated : 12th August, 2010

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