rpg life sciences ltd Directors report

Your Directors are pleased to present the annual report and audited statement of accounts of the Company for the year ended on March 31, 2023.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is given below:

		(Rs. crores)
Particulars	2022-23	2021-22
A Operations
Total Income	517.61	443.15
Profit before depreciation, interest and tax	107.49	89.35
Less: Interest	0.31	0.52
Less: Depreciation	15.50	15.66
Profit before tax	91.68	73.17
Tax (including deferred tax)	24.04	21.69
B Profit for the year after tax	67.64	51.48
C Other Comprehensive Income net of tax	0.07	(0.25)
D Total Comprehensive Income	67.71	51.23
E Appropriations:
Dividend on equity shares	-	15.88

2. DIVIDEND

Y our Directors recommend a dividend H 12 (150%)of per equity share of H 8/- each for the financial year ended March 31, 2023.

3. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended ("SEBI Listing Regulations"), the Company has formulated a Dividend Distribution Policy which details various considerations based on which the Board may recommend or declare Dividend. The Policy is available on the website of the Company at https://rpglifesciences.com/website/code_policies_ forms.php.

4. TRANSFER TO RESERVES

The Company has not transferred any sum to the General Reserve during the financial year ended March 31, 2023.

5. OPERATIONS

The Company earned a total income of H 517.61 crores for the year as compared to H 443.15 crores during the previous year and a profit after tax from existing operations of H 67.64 crores, as against H 51.48 crores during the previous year. The increase in sales and net profit was driven by improved performance of the Domestic Formulations and International Formulations business.

The Companys Formulation facility at Ankleshwar, Plant (F1) has WHO GMP, Nigeria and Kenya Health Authority certifications and Plant (F2) has WHO GMP, EU GMP, TGA Australia GMP, Health Canada Drug Establishment License, Kenya, Ethiopia, Nigeria and Sudan Health Authority certifications. API facility at Navi Mumbai plant has WHO GMP, TGA Australia and PMDA Japan GMP certifications.

Domestic Formulations Business:

Performance

During the year under review, the Domestic Formulations business achieved sales revenue of H337.10 crores, higher by 20% over the previous year. The divisions performance improvement was a result of sustained prescription generation, product portfolio augmentation through new product launches and line extensions and healthy sales hygiene parameters. The portfolio has been strengthened by new launches in Cardiovascular, Diabetology, Nephrology, Rheumatology, Oncology and Urology segments.

Outlook

The Company will continue its emphasis on product portfolio rejuvenation by building chronic and specialty portfolios. The Company will also continue its strategy of building brand assets through life cycle management by introducing line extensions, customer coverage deepening in targeted therapies, skill building of field force and control of sales hygiene parameters.

International Formulations Business:

Performance

The International Formulations business achieved sales revenue of H92.16 crores in FY23, registering a growth of 18.3% as against the previous year mainly on account of increased sales to markets namely Myanmar, Canada, Colombia, Germany, Egypt, Philippines, South Africa, and Poland. The Company focused on expanding the business with existing customers in EU, Canada, Australia, UK, Asia and Latin America, new customer development, targeting new markets and offering new products. The Company has executed its first PAN European Out-license and supply deal for an immunosuppressant drug. The Company has filed for two new products dossier in ANZ market. The Company has won AOK, Germany tender for its flagship product.

Outlook

The International Formulations business is focused on increasing the penetration of existing and new products in multiple countries within EU as well as expanding its product offerings in UK, Australia, Canada, Myanmar and other emerging markets. The Company is also actively scouting for opportunities for geographic expansion through strategic partnerships in various international markets in India and South East Asian markets – Sri Lanka, Vietnam, Philippines, Thailand, Egypt and increasing the penetration of the current product assets -

Active Pharmaceutical Ingredients (API) Business:

Performance

The API business achieved sales of H 79.82 crores, growing 1.9% over the previous year. Key APIs for the Company include Quinfamide, Haloperidol, Haloperidol Decanoate, Pantoprazole and Risperidone.

Outlook

API business continues to be of strategic importance in the overall growth of the Company. Backward integration in products ensures lesser dependency on procuring APIs from external sources and increased reliability of supplies thus playing a crucial role in the current competitive and external environment. The Governments focus on developing APIs and reducing dependence on imports, furthers the strategic importance of the business.

6. INDIAN ACCOUNTING STANDARDS (IND AS)

As notified by the Ministry of Corporate Affairs, the Company adopted Indian Accounting Standards (‘Ind AS) with effect from April 01, 2017.

7. ANNUAL RETURN

Pursuant to Sections 92 and 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the

Annual Return as on March 31, 2023, is available on Companys Website www.rpglifesciences.com.

8. DISCLOSURE UNDER SECRETARIAL STANDARDS ON MEETINGS OF BOARD OF DIRECTORS (SS-1):

During the year under review, the Company has complied with all applicable Secretarial Standards.

9. MEETINGS OF THE BOARD

The details of Board Meetings held during the year are given in the Corporate Governance Report.

10. MEETINGS OF AUDIT COMMITTEE

The details of Audit Committee meetings and composition of the Committee are given in the Corporate Governance Report.

11. DIRECTORSRESPONSIBILITYSTATEMENT

The Directors confirm that – a) in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards had been followed and there was no material departures; b) 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 as at March 31, 2023 and of the profit and loss of the Company for that period; c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors had prepared the annual accounts on a going concern basis; e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. ST ATEMENT ON DECLARATION OF

INDEPENDENT DIRECTORS

The Company has received declaration from each of the Independent Directors under Section 149 (6) and (7) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 as amended from time to time. There has been no change in the circumstances affecting their status as Independent Directors of the Company. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. As per the proviso to Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company are exempted from undertaking the online proficiency self- assessment test.

13. PECUNIARY RELATIONSHIP OR TRANSACTIONSOFTHENON-EXECUTIVE

DIRECTORS AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS

All pecuniary relationship or transactions of the Non- Executive Directors vis--vis the Company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report which forms part of this Report.

14.NOMINATION AND REMUNERATION

POLICY

The Companys policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) is annexed with this Report as Annexure A.

15. EXPLANATION AND COMMENTS ON STATUTORY AUDIT AND SECRETARIAL AUDIT REPORT

There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in Auditors Report.

As per the provisions of Section 143 (12) of the Companies Act, 2013 read with Rule 13 of the Companies (Audit & Auditors) Rules, 2014, the Statutory Auditors have not reported any instances of fraud to the Central Government and/or Audit Committee.

Further, there is no qualification, disclaimer, reservation or adverse remark made by the Practicing Company Secretary in its Audit Report.

16.P ARTICULARSOFLOANS,GUARANTEES

OR INVESTMENTS

The Loans, Guarantees and Investments made by the Company are within the limits prescribed under the provisions of Section 186 of the Companies Act, 2013 and the details are given in the notes to the Financial Statements. There was no application made during the year nor any proceeding was pending under the Insolvency and Bankruptcy Code, 2016 at the end of the financial year.

17. RELA TED PARTY TRANSACTIONS

There were no contracts or arrangements or transactions entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 during the course of business which were not at arms length basis. Suitable disclosure as required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Financial Statements. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website www.rpglifesciences.com.

18.MATERIAL CHANGES AND

COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on March 31, 2023 to which the financial statements relate and the date of this report.

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

The particulars as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014, are given in Annexure B to this report.

20.RISK MANAGEMENT

The details of Risk Management Committee (RMC) and its terms of reference are set out in the Corporate Governance Report. The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework help in identifying risks trend, exposure and potential impact analysis at Companys business.

21.SUSTAINABILITY AND CORPORATE

SOCIAL RESPONSIBILITY (SCSR)

In accordance with the provisions of Section 135 read with Schedule VII of the Companies Act, 2013, the Company, as a part of its Corporate Social Responsibility ("CSR") initiative, has adopted a CSR Policy outlining various CSR activities to be undertaken by the Company in the area of health, water, sanitation, promoting education, skill development, etc. The CSR policy of the Company is available on the Companys website i.e. https://www.rpglifesciences.com/website/code_ policies_forms.php under ‘Investors tab.

During the year under review, the Company has contributed H 81.29 Lakhs to RPG Foundation, the implementing agency towards CSR activities and H 31.14 Lakhs was transferred to a separate Bank Account viz. ‘RPG Life Sciences Limited Unspent Corporate Social Responsibility Account FY 2022- 23 to be disbursed in the future towards approved projects pursuant to CSR rules dated January 22, 2021.

The Board has constituted a SCSR Committee inter alia to recommend on the CSR projects/ programs, recommend the amount on each CSR activity and to monitor such CSR activities, being undertaken by the Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure C.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Rajat Bhargava, Non-Executive Director, retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

None of the Directors and Key Managerial Personnel (KMP) is related to any other Director of the Company. Mr. Yugal Sikri, Managing Director, Mr. Vishal Shah, Chief Financial Officer and Mr. Rajesh Shirambekar, Head – Legal and Company Secretary are Key Managerial Personnel of the Company within the meaning of Section 203 of the Companies Act, 2013.

23.SUBSIDIARY COMPANIES

There were no Companies which have become or ceased to be our subsidiaries, joint ventures or associate companies during the year.

24.FIXED DEPOSITS

The Company has not accepted any fixed deposit from the public during the year under review under Chapter V of the Companies Act, 2013. As on March 31, 2023, no deposit was lying unclaimed or unpaid with the Company.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

26. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business.

27. INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this annual report.

28. INFORMATION PURSUANT TO SECTION 197 (12) OF THE COMPANIES ACT, 2013 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL REMUNERATION) RULES, 2014

1 The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;	Mr. Harsh V. Goenka (Chairman)	1.12
	Dr. Lalit S. Kanodia	1.21
	Mr. Mahesh S. Gupta	1.86
	Mr. Manoj Maheshwari	1.12
	Mr. Narendra Ambwani	1.79
	Ms. Zahabiya Khorakiwala	0.70
	Mr. Bhaskar Iyer	1.72
	Mr. Sachin Nandgaonkar	0.89
	Mr. Rajat Bhargava	1.72
	Mr. Yugal Sikri (Managing Director)	96.35
director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;	Dr. Lalit S. Kanodia	Nil
	Mr. Mahesh Gupta	Nil
	Mr. Manoj Maheshwari
		Nil
	Mr. Narendra Ambwani	Nil
	Ms. Zahabiya Khorakiwala	Nil
	Mr. Bhaskar Iyer	Nil
	Mr. Sachin Nandgaonkar	Nil
	Mr. Rajat Bhargava	Nil
	Mr. Yugal Sikri	11.5%
	Mr. Vishal Shah	7.5%
	Mr. Rajesh Shirambekar	7.0%

3 The percentage increase in the median remuneration of employees in the financial year;	9.77%*
4 The number of permanent employees on the rolls of Company;	1,235 employees as on March 31, 2023.
5 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;	• Average Salary increase of non-managerial employees is around 10.7%. • Average Salary increase of managerial employees is around 9.1%. • There are no exceptional circumstances in increase of managerial remuneration.
6 Affirmation that the remuneration is as per the remuneration policy of the Company.	Remuneration paid during the year ended March 31, 2023 is as per the Remuneration Policy of the Company.

Note: *The percentage increase in the median remuneration of employee has been calculated after excluding Managing Directors remuneration.

29. WHISTLE BLOWER POLICY

The Audit Committees terms of reference inter-alia include vigil mechanism which also incorporates a Whistle Blower Policy in terms of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has adopted Whistle Blower Policy. The Whistle Blower mechanism provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Companys Code of Governance and Ethics. The Whistle Blower Policy is uploaded on the Companys website www.rpglifesciences.com.

30. F AMILIARISATION PROGRAMMES

INDEPENDENT DIRECTORS

The Company conducts familiarization programme for Independent Directors and the details are uploaded on the website of the Company on the below mentioned link: https://www.rpglifesciences.com/website/code_ policies_forms.php

31. FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to provisions of Section 134 of the Companies Act, 2013, the Nomination and Remuneration Committee laid down a criteria for evaluating Board effectiveness by assessing performance of the Board as a whole, performance of individual Director and Committees of the Board namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Sustainability and Corporate Social Responsibility Committee and Risk Management Committee. The Board approved the criteria laid down by Nomination and Remuneration Committee for evaluating Board effectiveness and engaged a third party agency to conduct Board effectiveness survey during the year under review. The Board has carried out annual performance evaluation of its own performance, the Directors individually and of its Committees as mandated under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

32. AUDITORS

Statutory Auditors:

The members of the Company at its Annual General meeting held on July 29, 2022 appointed M/s. SRBC

& Co. LLP, Chartered Accountants (Firm Registration No. 324982E/E300003), as Statutory Auditors of the Company, for a period of 5 (five) consecutive years from the conclusion of fifteenth Annual General meeting till the conclusion of Twentieth Annual General Meeting. The auditors confirmed that their appointment shall be in compliance with Sections 139 and 141 of the Companies Act, 2013.

Internal Auditors:

M/s Deloitte Touche Tohmatsu India LLP carried out the internal audit of the Company for FY 2022-23.

At the Board meeting of the Company held on April 28, 2023, M/s PricewaterhouseCoopers Services LLP, were appointed as the Internal Auditors of the Company for a period of 3 financial years from April 1, 2023 to March 31, 2026 on expiry of term of M/s. Deloitte Touche Tohmatsu India LLP.

Secretarial Auditors:

M/s. Parikh Parekh & Associates, Practicing Company Secretaries, are the Secretarial Auditors of the Company.

The Secretarial Audit Report required pursuant to subsection (3) of Section 134 and Section 204 (1) of the Companies Act, 2013, is given in Annexure D to this report.

Cost Auditors:

The Company maintains cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co. (Registration No. 000353), Cost Accountants, was appointed to conduct audit of cost records of Pharmaceutical Activities for the year ended March 31, 2023. Cost Audit reports would be submitted to the Central Government within the prescribed time. Pursuant to Rule 6 of the Companies (Cost Records and Audit) Rules, 2014, cost audit reports for Pharmaceutical Activities for the year ended March 31, 2022 was filed with the Central Government on August 26, 2022.

33. EMPLOYEES STOCK OPTION PLAN

The Company has no employee stock option scheme.

34. PARTICULARS OF EMPLOYEES

RELATED DISCLOSURES

The particulars of employees in compliance with the provisions of Section 134 (3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided to the shareholder upon request. The said information is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.

35. MANAGEMENT DISCUSSION AND ANALYSIS, BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT AND CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and

Analysis, Business Responsibility and Sustainability Report and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practicing Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexures forming part of this annual report.

36.DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-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 Committee has been set up to redress complaints.

During the financial year 2022-23, the Company has not received any complain of sexual harassment.

37. MATERIAL TRANSACTIONS WITH RELATED PARTIES

The Company has not entered into any transaction with related parties during the year under review which requires reporting in Form AOC-2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

38. SAFETY

The Company conducts regularly Safety audit and Environment audit through competent authorities for its manufacturing facilities located at Navi Mumbai and Ankleshwar. The Company also organises various safety awareness programmes to impart safety training to its employees.

39. AWARDS

The Company was conferred with the prestigious Jamnalal Bajaj award for Fair Business Practices by Jamnalal Bajaj Council. One of the Companys key brands, Naprosyn+ won Champion of the Year award by Pronto Consult.

40. APPRECIATION

Your Directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Companys shareholders, customers and suppliers for their continued support.

	For and on behalf of the Board of Directors
Place: Mumbai	Harsh V. Goenka
Date: April 28, 2023	Chairman

NOMINATION AND REMUNERATION POLICY

1. Introduction:

This policy on Nomination and Remuneration Directors, Key Managerial Personnel ("KMP"), Senior Management Personnel ("SMP") and other employees has been formulated in terms of the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), as amended from time to time, in order to appoint and pay equitable remuneration to Directors, KMP, SMP and other employees of the Company.

2. Objective:

The Policy sets out the guiding principles on:

i. Appointment and remuneration of the Directors, KMP and SMP;

ii. Determining qualifications, positive attributes and independence for appointment of a Director (Executive / Non-Executive / Independent) and recommend to the Board a policy relating to the remuneration for the Directors, KMP and SMP;

iii. Formulating the criteria for performance evaluation of all Directors, Board and its Committee;

iv. Board diversity.

3. Constitution of the Nomination and Remuneration Committee:

The Board has constituted the Nomination and Remuneration Committee (NRC) on April 08, 2014 as per Companies Act, 2013.

4. Definitions:

"Act" means the Companies Act, 2013 and Rules framed thereunder, as amended from time to time.

"Board" means Board of Directors of the Company. "Company" means RPG Life Sciences Limited. "Directors" means Directors of the Company. "Independent Director" (ID) means a Director referred to in Section 149 (6) of the Companies Act, 2013 and Rules made thereunder and Regulation 16(1)(b) of the Listing Regulations.

"Key Managerial Personnel" (KMP) means

1. Chief Executive Officer or the Managing Director or the Manager;

2. Whole-time Director(s);of

3. Chief Financial Officer;

4. Company Secretary; and

5. Such other officer, not more than one level below the directors who is in whole time employment and designated as KMP by the Board.

"Senior Management Personnel" (SMP) means officers/ personnel of the Company, who are members of its core management team excluding Board of Directors and shall comprise all members of management one level below the Chief Executive Officer/Managing Director/Whole Time Director/Manager (including Chief Executive Office/Manager, in case they are not part of the Board) and shall include Company Secretary and Chief Financial Officer.

Unless the context otherwise requires, words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 and, as may be amended from time to time, shall have the meaning respectively assigned to them therein.

5. ^{Matters to be dealt with and recommended}by NRC to the Board

The following matters shall be dealt by the Committee:

a) Directors

Formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommending candidates to the Board, when circumstances warrant the appointment of a new Director, having regard to the variety of skills, experience and expertise on the Board and who will best complement the Board.

b) Evaluation of performance

Making recommendations to the Board on appropriate performance criteria for the Directors. Formulate criteria and framework for evaluation of the Board, its committees, and every Director and review the implementation and compliance of the manner in which evaluation is carried out. c) Familiarization

Identifying familiarization and training programs for the Board to ensure that Non-Executive Directors are provided adequate information regarding the operations of the business, the industry and their duties and legal responsibilities.

d) Remuneration framework and policies

NRC is responsible for reviewing and making recommendations to the Board on the following:

i. The remuneration of MD, KMP and SMP.

ii. Remuneration of Non-Executive Directors and Chairman.

iii. Remuneration Policy for all employees including

KMP and SMP which requires:

a. Attract and motivate talent to accomplish Companys long term growth.

b. Demonstrate a clear link between executive compensation and performance.

6. Board Diversity

NRC shall ensure a transparent nomination process to the Board of Directors with the diversity of gender, thought, experience, qualification, knowledge, core skills, competencies and perspective in the Board.

Diversity at the Board level shall be used as a tool for supporting the attainment of the strategic objectives of the Company and also to drive business results.

Accordingly, while designing the composition of the Board, diversity shall be considered on all aspects and all appointments shall be based on the above parameters.

7. Policy for appointment and removal of Director, KMP and SMP:

A. Appointment criteria and qualifications

NRC shall formulate the criteria for determining the qualification, positive attributes, expertise, experience and independence of the person, wherever required, eligible for appointment as Director, KMP or SMP. It shall identify such person and recommend to the Board his/ her appointment.

For every appointment of an independent director, the Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommended to the Board for appointment as an Independent Director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may avail the services of an external agencies, if required, consider candidates from a wide range of backgrounds, having due regard to diversity and also consider the time commitments of the candidates.

B. Term /Tenure

1. Managing Director

Term of appointment or re-appointment of Managing Director not to exceed five years at a time. No reappointment shall be made earlier than one year before the expiry of term.

2. Independent Director

An Independent Director shall hold office on the Board of the Company for a term as may be determined by the Board but in any case, not exceeding five years and shall not hold office for more than two consecutive terms. Such Independent Director shall be eligible for appointment after the expiry of such period as prescribed under the applicable law.

C. Retirement

The Director, KMP and SMP shall retire as per the provisions of the applicable Act, and the prevailing policy of the Company. On the recommendation of the NRC, the Board if it considers to be in the Companys interest, shall have the discretion to retain Director, KMP and SMP even after attaining the retirement age.

D. Removal

In case any Director or KMP or SMP incurs any disqualification as provided under the Act or Rules made thereunder or is in breach of Code of Governance and Ethics adopted by the Company, the NRC may recommend to the Board removal of such Director or KMP or SMP.

8.

Policy for remuneration to MD, NEDs, KMP& SMP:

MD: i. The remuneration to be paid to the MD at the time of his/her appointment shall be recommended by the NRC and approved by the Board of Directors and the shareholders of the Company.

ii. Annual increment /subsequent variation in remuneration to the MD shall be approved by the NRC/Board of Directors, within the overall limits approved by the shareholders of the Company.

NEDs: i. NEDs shall be entitled to sitting fees as may be decided by the Board of Directors from time to time for attending the Meeting of the Board and sub Committees of the Board.

ii. Remuneration (including Commission) as may be recommended by NRC and subsequently approved by the Board of Directors and shareholders of the Company, wherever required. and the same shall be paid in accordance with the applicable laws.

iii. The NEDs shall be eligible for remuneration of professional services rendered if in the opinion of the NRC, the NED possesses the requisite qualification for rendering such professional services in accordance with applicable laws.

KMP & SMP: i. The remuneration to be paid to the KMP and SMP, at the time of his/her appointment shall be recommended by the NRC and approved by the Board considering relevant qualification, experience and performance of the individual as well as the prevailing market conditions. The remuneration may be combination of fixed and variable pay;

ii. Annual increment /subsequent variation in remuneration to the KMP/SMP shall be approved by the NRC/Board of Directors.

9. Director and Officer Liability Insurance:

Wher e Insurance Policy is taken by the Company for its Directors, KMP, SMP and employees indemnifying them against any liability, the premium paid by the Company for such insurance cover shall not be treated as part of the remuneration payable to such personnel. However, if such person is proved to be guilty, the premium paid on such insurance shall be recovered from such persons.

10. General:

This policy is framed based on the provisions of the Companies Act, 2013 and Rules framed thereunder and the requirements of Listing Regulations, as amended from time to time. In the event of any conflict between the provisions of this Policy and of the Act or Listing Regulations or any other statutory enactments, rules, the provisions of such Act or Listing Regulations or statutory enactments, rules shall prevail over this Policy.

Any subsequent amendment / modification in the Listing Regulations, Act and/or other applicable laws in this regard shall mutatis mutandis apply to /prevail upon this Policy. Subject to applicable laws the Board can further delegate any of its powers herein to the Committee.

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

(Pursuant to the Rule 8 (3) of the Companies (Accounts) Rules, 2014)

A. Conservation of Energy:

(i) Energy Conservation measures taken during the year:

Multiple energy conservation measures were taken across all manufacturing facilities such as strong vigilance, employee awareness, minimizing leakages and energy waste.

The following significant energy conversation measures taken during the year:

1. Chilled water system was installed for optimum usages which used 300 TR instead of 400 TR during winter season.

2. VFD and pressure transmitter were provided for controlled RPM.

3. Efficient air compressor replaced with old Air compressor and capacity enhanced.

4. Chilled water existing open loop converted in closed loop to save energy.

5. Staggering usages of Transformer during silent hours to save copper losses of power.

6. Modification of jet mill for reduction in batch cycle time.

7. Using of one cooling tower for two utilities.

8. VFD for air compressor for reduction in load.

9. Heat recovery wheel of Air Handling.

(ii) Impact of measures mentioned above for energy conservation and consequent impact on cost of production of goods during the year: The energy conservation measures undertaken during the year contributed to reduction in the cost of production by H 67.9 lakhs.

(iii) Measures taken for utilizing alternate sources of energy: a) Company has signed Power Purchase Agreement for hybrid (solar + wind) power supply and it is implemented from February 2023.

b) Agreement executed for outsourced steam operating on solid fuel and it is implemented from September 2022.

(iv) Capital investment on energy conservation equipment: Various energy conservation equipments were added to the production facilities across all Plant locations with approximate cost of H 78.9 Lakhs.

B. Technology Absorption:

1. Efforts made towards technology absorption: The company has full-fledged API and Formulation R&D functions which are continuously engaged in R&D activities with respect to new product development and process improvement/excellence.

Focus is on in-house new product development as well as technology transfer of products (tablets and capsules) meant for domestic, emerging and developed markets.

2. Benefits derived like product improvement, cost reduction, product development or import substitution: Successful development of complex generic products is being accomplished through innovation and deployment of latest technology. Products are developed using the principle of Quality by Design (QbD) that results into product robustness and optimal cost.

Examples are in-house development of 2 major drug products belonging to immunosuppressant therapeutic category for export market with successful bio equivalence study completed for one such product and another one is in progress.

Also product and process development is being undertaken for one of the key drugs in CVM segment.

A major project for cost reduction has been formulation re-engineering of multiple SKUs of our legacy products.

New APIs have been taken for process development at R&D.

• APIs belonging to therapy areas of Immunosuppressant, Antihypertensive, Aquaretic, Antiepileptic, Antidepressant, Antihistamine and Antifungal are under development.

3. In case of imported technology:

Technology transfer of some of the oral solid dosage forms have been undertaken.

4. Expenditure incurred on Research & Development:

Item	(Rs. Lakhs)
Capital	480
Recurring	722
Total	1,202

C. Foreign Exchange Earnings and Outgo:

For eign Exchange earned in terms of actual inflowswas Rs.16,242 lakhs

Foreign Exchange outgo in terms of actual outflow was Rs.2,005 lakhs.