Directors Report of Unichem Laboratories Ltd.

Mar 31, 2025

The Board of Directors are pleased to present the audited financial statements of the Company for the financial year ended 31st
March 2025.

Standalone and Consolidated Financial Results « _{in crores})

Particulars	Standalone		Consolidated
	Year ended 31st March 2025	Year ended 31st March 2024	Year ended 31st March 2025	Year ended 31st March 2024
Revenue from operations	1,735.70	1,442.16	2,110.97	1,785.11
Other Income	40.83	30.39	35.32	31.59
Total Income	1,776.53	1,472.55	2,146.29	1,816.70
Profit/(loss) before tax after exceptional items	182.68	(92.18)	154.59	(84.96)
Current tax	-	-	18.39	7.94
Deferred tax	19.72	-	(1.20)	0.86
Short / (Excess) provision of tax for earlier years	-	-	(0.12)	-
Profit (Loss) for the year	162.96	(92.18)	137.52	(93.76)
Other Comprehensive Income	0.10	(0.53)	(6.97)	(5.65)
Total Comprehensive Income	163.06	(92.71)	130.55	(99.41)

In compliance with the provisions of Section 129(3) of the Companies Act, 2013 ("the Act"), the audited consolidated financial
statements of the Company forms an integral part of this Annual Report.

The fiscal year 2024-25 has been noteworthy for Unichem, being the first full year after becoming part of Ipca group, had shown
record achievements in revenue and margins. Building upon a robust performance from the preceding year, we have continued
our growth trajectory. Our revenue had crossed over ? 2,000 crores and margin had grown to 58.2%. The results are the
testimony towards successful business transformation which happened in the previous financial year.

The consolidated revenue from operations for the financial year under review stood at ? 2,110.97 crores compared to ? 1,785.11
crores in the previous financial year, reflecting a growth of 18.3%. Profit before tax increased to ? 154.59 crores, as against loss of
? 84.96 crores in the preceding year while Profit after tax is ? 137.52 crores an increase of ? 231.28 crores from a loss of ? 93.76 crores
in the previous financial year.

The Company continues to maintain a strong focus on international markets, with exports contributing 98.02% to the total sales
revenue.

The standalone revenue from operations for the financial year under review stood at ? 1,735.70 crores, compared to ? 1,442.16
crores in the previous financial year, reflecting a growth of 20.4%. Profit after tax increased to ? 162.96 crores, an increase of
? 255.14 crores from a loss of ? 92.18 crores in the preceding year. The performance achieved amid various economic and
geopolitical dynamics, highlights our resilience and customer-centric approach.

During the year, the Company had completed the capacity expansion of Phase I of API plant at Pithampur of approximately
210 KL with an investment of nearly ? 200 crores which will be used mainly for captive purposes.

There have been no material changes or commitments affecting the financial position of the Company that have occurred
between the end of the financial year and the date of this Report. Furthermore, there has been no change in the nature of the
Company''s business during the year under review.

Change in Registered Office and sale of premises

Unichem Laboratories Limited became a subsidiary of Ipca Laboratories Limited in the previous fiscal year. Ipca Laboratories
Limited is having a vast set-up at Kandivali (West), Mumbai and to derive synergy and effective co-ordination between parent
and subsidiary, the Company relocated its Registered Office effective 1st September 2024, from Unichem Bhavan, Prabhat Estate,
Off S.V. Road, Jogeshwari (West), Mumbai - 400 102 to 47, Kandivli Industrial Estate, Kandivli (West), Mumbai - 400 067.

Consequently, the premises situated at Jogeshwari, Mumbai was lying vacant with no ongoing business activity and the Board
decided to divest the said property. A memorandum of understanding had been signed with a developer to sell this property

comprising of approximately 3.4 acres of land and building attach thereto for a consideration of ? 279 crores subject to requisite
regulatory approvals and permission. The book value of the said property was approximately ? 2.21 crores while the ready
reckoner value was ? 157.87 crores.

Review of Subsidiaries and Associates

The Company has six subsidiaries and one associate company as on 31st March 2025. In compliance with applicable regulatory
requirements, the financial data of these entities is provided in the prescribed Form AOC-1, which is annexed to the consolidated
financial statements.

For further details pertaining to impairment of investments in the associate company and wholly owned subsidiaries, please
refer to Note Nos. 6, 37 and 41 of the standalone financial statements.

Key Developments during the Financial Year:

• During the year under review, the Company acquired nine Abbreviated New Drug Applications (ANDAs) from
Bayshore Pharmaceuticals LLC, USA (''''Bayshore USA"), a wholly owned step-down subsidiary of Ipca Laboratories
Limited (the holding company), for a total consideration of USD 2,650,000.

• Additionally, the Company''s wholly owned subsidiary, Unichem Pharmaceuticals (USA) Inc. (''''Unichem USA"),
acquired the generic formulations marketing and distribution business of Bayshore USA as a going concern through a
slump sale. This business was transferred on a debt-free basis for a consideration of USD 10,000,000.

• During the year it was decided that 100% share capital of Unichem Laboratories Ltd, Ireland, a wholly owned
subsidiary company, which was continuously incurring losses and the Company had written off its entire investment
in its books of accounts be transferred to Ipca Laboratories Limited, holding company of Unichem at a valuation of ? 4
(four) crores based on the independent valuation report.

• Similarly, the Company decided to close the manufacturing facility of its wholly owned subsidiary, Niche Generics
Limited (“Niche UK"), located at Baldoyle, Dublin, Ireland due to persistent operational losses and the high cost of
operations. The facility, which was being operated on leased premises, was nearing the end of its lease term in FY 2027
and had become commercially unviable. The products which were being manufactured at this facility will continue to
be manufactured at plant facilities of your company located in India.

Availability of Subsidiary Financial Statements:

The audited financial statements of all subsidiaries are available on the Company''s website at www.unichemlabs.com and
can also be inspected at any time at the Registered Office of the Company during business hours in accordance with the
provisions of Section 136 of the Act. Shareholders interested in obtaining a copy of the accounts of the subsidiaries may
write to the Company Secretary at the Company''s registered office or email to [e-mail].

Material Subsidiary:

Unichem Pharmaceuticals (USA) Inc. qualifies as a material subsidiary in accordance with the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the Company''s Policy on Material Subsidiaries. The said
policy is available on the Company''s website at: https://www.unichemlabs.com/pdf/policies/policy-on-material-subsidiaries.pdf

Dividend

In order to conserve resources, the Board of Directors has not recommended any dividend on the Equity Shares for the financial
year. In accordance with the Listing Regulations, the Company has adopted a Dividend Distribution Policy, which is available on
its official website at https://www.unichemlabs.com/pdf/policies/dividend-distribution-policy.pdf

Share Capital

The authorised and paid-up share capital of the Company remained unchanged during the year under review.

Employees Stock Options Scheme 2018

The Unichem Employee Stock Option Scheme 2018 (“Scheme") continues to be in effect and is administered by the Nomination
and Remuneration Committee (“NRC"). No modifications were made to the Scheme during the financial year under review.

In compliance with Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the requisite
disclosures relating to the Scheme are available on the Company''s website at https://www.unichemlabs.com/annual-report.php

M/s. Alwyn Jay & Co., Secretarial Auditors, have issued a certificate confirming that the Scheme has been implemented in
compliance with the applicable regulations and the resolution approved by the shareholders at the general meeting. The
certificate will be available for inspection by the members at the forthcoming Annual General Meeting (“AGM").

Credit Rating

The Company''s banking facilities are rated by ICRA. During the year, ICRA upgraded the Company''s long-term credit rating to A
(pronounced ICRA A Plus) from A (pronounced ICRA A), reflecting a stable outlook. The rating upgrade demonstrates your
Company''s healthy improvement in its revenues as well as significant improvement in margins due to its improved cost structure
and increased capacity utilisation.

Management Discussion and Analysis

In compliance with Regulation 34(2), read with Part B of Schedule V of the Listing Regulations, a detailed assessment of the sector
in which your company operates and overall financial and operational status is presented in the Management Discussion and
Analysis, which forms an integral part of this Report and is annexed herewith as Annexure A.

Corporate Governance

The Board of Directors reaffirms its unwavering commitment to upholding exemplary corporate governance and ethical
standards. The Company remains dedicated to maintaining the highest levels of corporate governance.

The Corporate Governance Report for the year forms an integral part of this report as Annexure B, accompanied by a certificate
from M/s. N. A. Shah Associates LLP, Statutory Auditors, confirming compliance with the corporate governance norms prescribed
under the Listing Regulations.

Directors and Key Managerial Personnel

The Company''s Board comprises distinguished professionals from diverse backgrounds, each bringing a wealth of expertise,
domain knowledge, and experience. This optimal mix of Executive and Independent Directors ensures a balanced approach,
combining business acumen with independent judgment in the Board''s decision-making processes.

During the year under review, none of the Non-Executive Directors had any pecuniary relationships or engaged in transactions
with the Company, except for the receipt of sitting fees.

a. Retirement by Rotation

In accordance with Section 152 of the Act, and the Company''s Articles of Association, Dr. Prakash A. Mody is scheduled to
retire by rotation at the forthcoming AGM and, being eligible, has offered himself for re-appointment. The Board of
Directors, recognizing his valuable contributions, recommends his re-appointment. A resolution seeking shareholders''
approval for his re-appointment, along with pertinent details as required, is included in the Notice convening the AGM.

b. Independent Directors ("IDs")

All IDs have confirmed their ongoing compliance with the independence criteria specified in Section 149(6) of the Act and
Regulation 16(b) of Listing Regulations. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, the Independent Directors of the Company have confirmed that
they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs (IICA) and have
passed the proficiency test, if applicable to them. There have been no changes in circumstances affecting their status as IDs
of the Company. Additionally, they have affirmed adherence to the Code of Conduct for IDs.

Based on the disclosures provided, none of the IDs are disqualified or debarred from serving as Directors under Section 164
of the Act or SEBI order, or any other relevant authority. The Board has reviewed and assessed the veracity of the aforesaid
declarations, as required under Regulation 25(9) of the Listing Regulations. The Board confirms that the IDs maintain
independence from management.

The Board recognizes that the IDs possess the necessary qualifications, experience, and expertise across various domains,
including manufacturing, operations, finance, human resources, strategy, sales and marketing, auditing, and risk
management. Moreover, they maintain exemplary standards of integrity.

A detailed matrix of the skills, expertise, and competencies of all Directors, including IDs as well as details of the
familiarization programme for Directors are provided in the Corporate Governance Report, which forms an integral part of
this Annual Report.

c. Key Managerial Personnel ("KMP")

During the year, Mr. Sandip Ghume, Deputy Chief Financial Officer & Key Managerial Personnel, resigned effective 30th June
2024 and Mr. Sanjay Jain had been appointed as Chief Financial Officer effective from 8th August 2024.

As of the date of this report, the Key Managerial Personnel of the Company are:

• Mr. Pabitrakumar Bhattacharyya, Managing Director;

• Mr. Pradeep Bhandari, Head - Legal & Company Secretary; and

• Mr. Sanjay Jain, Chief Financial Officer.

Board Performance and Evaluation

In compliance with the Act and the Listing Regulations, the Board has conducted its annual performance evaluation,
encompassing the Board itself, its Committees and individual Directors including the Chairman of the Board. This exercise was
carried out through a structured questionnaire prepared separately for the Board, Committees, Chairman and individual
Directors. Further details are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

Salient features of the Nomination and Remuneration Policy

Based on the recommendation of the NRC, the Board has established a policy governing the selection, appointment, and
remuneration of Directors, Key Managerial Personnel (KMP), and Senior Management. This policy was amended during the year and
is accessible on the Company''s website at: https://www.unichemlabs.com/pdf/policies/nomination-and-remuneration-policy.pdf

The Company recognizes its employees as invaluable assets and is committed to attracting, retaining, and motivating talented
personnel. Compensation packages including salaries, benefits, perquisites, and allowances are structured to reflect individual
performance, with annual increments tied to performance evaluations. This approach aligns with the Company''s Remuneration
Policy, designed to ensure fair and competitive compensation practices.

i. Whole-time/ Managing Director

The remuneration structure for Whole-time Director comprises both fixed and variable components. The fixed component
includes salary, perquisites, and allowances, while the variable component consists of commission, as specified in term of
appointment. Salaries are determined based on the recommendations of the NRC and approved by the Board of Directors,
with subsequent endorsement by the Shareholders, within the limits prescribed by the Act and its accompanying Rules.

ii. Non-Executive Directors

Non-Executive Directors receive remuneration in the form of sitting fees for their participation in Board and Committee
meetings, in accordance with the provisions of the Act, and the accompanying rules. Apart from these sitting fees, no
additional remuneration is provided to Non-Executive Directors.

iii. KMP, Senior Management and other Employees

The remuneration package for KMP, Senior Management and other employees primarily includes basic salary, perquisites,
allowances, and performance incentives, such as Employee Stock Options where applicable. Perquisites and retirement
benefits are provided in accordance with the Company''s established policies. In formulating these remuneration packages,
the Company takes into account the prevailing employment landscape and remuneration practices among industry peers
to ensure competitiveness and alignment with market standards.

Significant and Material Orders passed by the Regulators/Courts/Tribunals

During the year under review, there were no significant or material orders passed by any regulatory authorities, courts, or
tribunals that could impact the Company''s going concern status or its future operations.

Corporate Social Responsibility ("CSR")

The Corporate Governance Report outlines the terms of reference and composition of the CSR Committee. The Company has also
formulated a CSR Policy. Furthermore, in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as
amended, the Annual Report on CSR activities is annexed as Annexure C and forms an integral part of this Report. The CSR Policy
is available on the website at https://unichemlabs.com/pdf/policies/corporate-social-responsibilitv-CSR-policv.pdf

Statutory Auditors

M/s. N. A. Shah Associates LLP, Chartered Accountants (Firm Registration No. 116560W/W100149) (“M/s. N. A. Shah"), continue to
serve as the Statutory Auditors of the Company.

At the 59th AGM held on August 9, 2022, the Members re-appointed M/s. N. A. Shah for a second term of five consecutive years,
commencing from the conclusion of the 59th AGM and continuing until the conclusion of the 64th AGM, scheduled to be held in
the year 2027.

The Notes to the Financial Statements referred to in the Auditor''s Report are self-explanatory and do not warrant any further comments.

The Auditor''s Report for the financial year under review does not contain any qualifications, reservations, adverse remarks, or
disclaimers. M/s. N. A. Shah have confirmed that they remain eligible to continue as the Statutory Auditors of the Company. They
have also affirmed that their firm has undergone the peer review process conducted by the Institute of Chartered Accountants of
India (ICAI) and holds a valid certificate issued by the ICAI''s Peer Review Board.

Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Act. Accordingly,
no disclosure is required under Section 134(3)(ca) of the Act.

Cost Auditors

In compliance with the provisions of Section 148(1) of the Act, the Company maintains the requisite cost records, which are
subject to audit by Cost Auditors. Pursuant to Section 148(6) of the Act read with Rule 6(6) of the Companies (Cost Records and
Audit) Rules, 2014, the Cost Audit Report for the financial year ending 31st March 2025, in Form CRA-4 (XBRL format), will be filed
with the Ministry of Corporate Affairs within the prescribed timeline.

Based on the recommendation of the Audit Committee, the Board of Directors has appointed M/s. Kishore Bhatia & Associates,
Practicing Cost Accountants, as the Cost Auditors of the Company for the FY 2026. The said firm has confirmed that their
appointment is in accordance with the applicable provisions of the Act and the rules framed thereunder. They have also provided
confirmation of their eligibility to act as the Cost Auditors of the Company for the year ending 31st March 2026.

In accordance with Section 148 of the Act and the Companies (Audit and Auditors) Rules, 2014, the remuneration proposed to be
paid to the Cost Auditors for the FY 2026 is subject to ratification by the members of the Company. Accordingly, the Board
recommends the remuneration for approval of the members at the forthcoming AGM. The relevant resolution seeking
ratification forms part of the Notice of the AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, and Regulation 24A of the Listing Regulations, the Board of Directors has appointed M/s. Alwyn Jay & Co.,
Practicing Company Secretaries, to carry out the Secretarial Audit of the Company for the financial year ending 31st March 2025.

The Secretarial Audit Report, issued by M/s. Alwyn Jay & Co., is annexed to this Report as Annexure D. The Report is free from any
qualifications, reservations, or adverse remarks and is self-explanatory, requiring no further clarification.

Additionally, M/s. Alwyn Jay & Co. have issued the Secretarial Compliance Report for the financial year ending 31st March 2025.
This Report confirms the Company''s compliance with all applicable laws, rules, and regulations, and further affirms that no
enforcement actions have been initiated against the Company, its material subsidiaries, or its promoters/directors by SEBI or the
Stock Exchanges during the year. The Company has duly uploaded the said Report on the websites of BSE and NSE within the
prescribed timelines.

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2024, the Board
of Directors has, based on the recommendation of the Audit Committee, proposed the appointment of M/s. Alwyn Jay & Co.,
Practicing Company Secretaries, as the Secretarial Auditors of the Company for a term of five consecutive financial years
commencing from 1st April 2025 to 31st March 2030. The said appointment is subject to the approval of the shareholders at the
forthcoming AGM. M/s. Alwyn Jay & Co. have provided their consent for the proposed appointment and confirmed their
eligibility in accordance with the applicable provisions, along with a valid peer review certificate.

Further, during the year under review, the Statutory Auditors, Internal Auditors, Secretarial Auditors, and Cost Auditors have not
reported any instance of fraud committed by the Company''s officers or employees under Section 143(12) of the Act. Accordingly,
there are no disclosures required in this regard in the Board''s Report.

Compliance with Secretarial Standards

During the FY 2025, the Company has complied with all applicable Secretarial Standards, as amended, issued by the Institute of
Company Secretaries of India.

Meetings of Board

During the year, seven meetings of the Board of Directors were convened, the details of which are provided in the Corporate
Governance Report.

Committees of the Board

The Board has constituted five committees, namely the Audit, Nomination and Remuneration, Corporate Social Responsibility,
Stakeholders'' Relationship and Risk Management. All recommendations made by these committees have been accepted by the
Board. Detailed information regarding the composition of each committee, meeting frequency, and other relevant particulars is
provided in the Corporate Governance Report.

Related Party Transactions ("RPTs")

During the year under review, the Company has ensured compliance with the applicable regulatory requirements pertaining to
RPTs. Omnibus approval of the Audit Committee is obtained for the related party transactions which are repetitive in nature. Prior
approvals from the Audit Committee and/or the Board of Directors were obtained, wherever necessary, before entering into any
such transactions. All related party transactions were conducted at arm''s length and, where not in the ordinary course of
business, necessary approval from the Board was duly obtained. Details of RPTs undertaken during each quarter were placed
before the Audit Committee in the subsequent quarter for its review.

There were no contracts or arrangements necessitating reporting in Form AOC-2 as per Section 134(3)(h) read with Section 188
of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. Further, no such transactions were identified that could result in
a potential conflict of interest with the interests of the Company at large, in accordance with the Company''s Policy on the
materiality of RPTs.

In accordance with applicable regulations and as approved by the Audit Committee / Board of Directors, members'' approval is
being sought for the following material related party transactions proposed for the FY 2026:

• Unichem Laboratories Limited with Ipca Laboratories Limited;

• Unichem Laboratories Limited with Unichem Pharmaceuticals USA Inc.;

• Ipca Laboratories Limited with Unichem Pharmaceuticals USA Inc.

The Company''s Policy on Related Party Transactions, as approved by the Board, is available on the website at:
https://www.unichemlabs.com/pdf/policies/related-partv-transactions-policv.pdf.

Further, except for shareholding in the Company, receipt of remuneration, and sitting fees, there were no pecuniary transactions
between any Director or KMP and the Company that could potentially result in a conflict of interest.

Related Party disclosures as per Ind AS 24 have been provided in Notes to accounts annexed to the financial statements.

Internal control system and Risk Management

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with
the size, scale and complexity of its operations. Your Company has appointed an external firm, M/s. Ram Agarwal & Associates,
Chartered Accountants as Internal Auditors who are responsible for independently evaluating the adequacy and effectiveness of
all internal control designs and implementation, systems and processes. The internal control systems and risk management
framework have been discussed in detail in the Management Discussion and Analysis section, which forms an integral part of this
Report.

Whistle Blower Policy

The Company maintains a zero-tolerance stance towards any form of unethical conduct, reflecting its steadfast commitment to
integrity and ethical business practices. To reinforce this commitment, the Company has established a Whistle Blower Policy/Vigil
Mechanism that enables employees, directors, and stakeholders to report genuine concerns relating to unethical behaviour,
fraud, or violations of the Company''s Code of Business Conduct and Ethics.

This mechanism provides adequate safeguards to protect whistleblowers from any form of retaliation or victimization, no
individual was denied access to the Audit Committee during the year under review. The Company has not received any complaint
during the year. The Whistle Blower Policy is accessible on the Company''s intranet and website, and concerns can be reported via
the designated email address: [e-mail].

Particulars of Employees

Disclosures relating to remuneration and other requisite details, as stipulated under Section 197(12) of the Act and Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are set out in Annexure E to
this Report.

In accordance with the provisions of Section 136 of the Act, the statement containing particulars of employees as required under
Section 197 read with Rules 5(2) and 5(3) of the said Rules is not being circulated to the Members along with this Annual Report.
However, any Member interested in obtaining a copy of this information may do so by sending a written request to the Company
Secretary, quoting their Folio No./DPID & Client ID [e-mail].

Sustainability at Unichem

Sustainability has been now a focus in all our operations, we are dedicated to resource conservation across our business. During
the year, we achieved an impressive 54% reduction in our Scope 1 GHG emissions compared to our 2022 baseline and it is
expected to reduce further in coming years. Power purchase agreement is in process for Roha and Kolhapur which will reduce our
Scope 2 GHG emission. In the current year, Company aims to reduce Scope 2 GHG emission by 10%.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The disclosures required under Section 134(3)(m) of the Act, along with the applicable rules, are provided in Annexure F to this Report.
Business Responsibility and Sustainability Report ("BRSR")

The Company remains committed to creating a positive impact across economic, social, and environmental dimensions. In line
with Regulation 34(2)(f) of the Listing Regulations, the BRSR for the FY 2025 is annexed as Annexure G and forms an integral part
of this Annual Report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to providing a safe, inclusive, and respectful workplace where employees can perform their duties
free from prejudice, gender bias, and any form of harassment. Management consistently strives to maintain a work environment
that upholds dignity and equality, free from discrimination and sexual harassment.

In compliance with the provisions of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)
Act, 2013, the Company has implemented a comprehensive Policy on Prevention of Sexual Harassment at the Workplace. An
Internal Complaints Committee (ICC) has been duly constituted to address complaints related to sexual harassment. The policy
outlines the procedures for complaint redressal and the inquiry process to be followed by the ICC. It is applicable to all women
employees, including those who are permanent, temporary, contractual, or trainees.

The policy also incorporates safeguards to prevent any form of retaliation or victimization against individuals who report incidents in
good faith. During the year under review, the Company did not receive any complaints pertaining to sexual harassment.

Annual Return

In accordance with the provisions of Section 92(3) and Section 134 of the Act, read with Rule 12 of the Companies (Management
and Administration) Rules, 2014, the Annual Return of the Company is available on the Company''s website at
https://www.unichemlabs.com/annual-report.php.

Particulars of Loans, Guarantees and Investments

The particulars of loans, guarantees, and investments made under Section 186 of the Act, are disclosed in the note nos. 6, 7, 14, 36
and 52 to the standalone financial statements.

Other disclosures

There were no transactions during the year under review that necessitate disclosure or reporting in respect of the following
matters.

• Acceptance of deposits as covered under ChapterV of the Act;

• Transfer of any amount to reserves;

• Any material changes or commitments affecting the financial position of the Company occurring between the end of the
financial year and the date of this Report.

Human Resource, health and safety

The Company remains dedicated to fostering an inclusive and empowering workplace that acknowledges employee
contributions while promoting opportunities for continuous growth and development.

In addition, the Company places the utmost importance on protecting human health, ensuring workplace safety, and preserving
the environment. It is committed to maintaining the highest standards of health and safety across all its plants and facilities,

forming the foundation of its Environmental, Health, and Safety (EHS) management systems and governance framework.
Directors'' Responsibility Statement

To the best of their knowledge and belief, and based on the information and explanations received, your Directors hereby make
the following statements pursuant to Section 134(3)(c) of the Act:

a. that in preparation of annual accounts for the year ended 31st March 2025, the applicable accounting standards have been
followed and no material departures, have been made from the same;

b. that such accounting policies have been selected and applied consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial
year ending 31st March 2025 and Profit /Loss for that year;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;

d. that the annual accounts have been prepared on a going concern basis;

e. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Acknowledgement

Your Directors appreciate and value the co-operation and support of the Company''s parent company, customers, members,
suppliers, bankers, associates, Central & State Governments and employees at all levels and look forward to continuance of the
supportive relations and assistance in the future.

For and on behalf of the Board of Directors,
Dr. Prakash A. Mody

Mumbai Chairman

22nd May 2025 (DIN: 00001285)

---

Mar 31, 2024

Your Directors have the pleasure of presenting the audited accounts of your Company for the financial year ended 31 st March, 2024. Standalone and Consolidated Financial Results ('' i_{n cr}.)

Particulars	Standalone		Consolidated
	For the Year ended 31st March, 2024	For the Year ended 31st March, 2023	For the Year ended 31st March, 2024	For the Year ended 31st March, 2023
Revenue from operations	1,442.17	1,072.43	1,704.89	1,343.02
Other Income	30.39	41.85	31.60	38.52
Total Income	1,472.56	1,114.28	1,736.49	1,381.54
Profit/(loss) before tax after exceptional items	(92.18)	(279.09)	(61.67)	(176.36)
Current tax	-	-	7.94	11.06
Deferred tax	-	20.61	0.86	15.35
Short / (Excess) provision of tax for earlier years	-	-	-	(0.54)
Profit (Loss) for the year	(92.18)	(299.70)	(70.47)	(202.23)
Other Comprehensive Income	(0.53)	38.73	(5.47)	45.92
Total Comprehensive Income	(92.71)	(260.98)	(75.94)	(156.31)

The audited standalone and consolidated financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 (“Act”) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

In accordance with the provisions of Section 129(3) of the Act, the audited consolidated financial statements are also provided in the Annual Report.

The revenue from operation on a consolidation basis for the financial year under review was '' 1,704.89 cr. as against '' 1,343.02 cr. for the previous financial year, registering an increase of 26.9%. The profit before tax excluding exceptional items improved to '' (4.05) cr. for the financial year under review as against '' (137.80) cr. for the previous financial year. During the year, the Company on the basis of abundant precaution had made a full provision of '' 125.62 cr. towards EU Commission fine which is disclosed under exceptional items. The Company continues to remain focussed on exports, the share of exports in the total revenue from operations is 94.8%.

Change in Control and Management

During the year, Ipca Laboratories Limited acquired 2,35,01,440 fully paid-up equity shares of '' 2/- each, constituting 33.38% of the fully diluted voting share capital of the Company from Dr. Prakash A. Mody, Promoter & Director.

On 21st September, 2023, Ipca Laboratories Limited further acquired an aggregate 1,35,79,571 equity shares at '' 440 per equity share pursuant to the open offer made by Ipca Laboratories Limited to the public shareholders of the Company in terms of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Consequently, the aggregate holding of Ipca Laboratories Limited in the Company as on 31st March, 2024 stands at 3,70,81,011 equity shares of the Company representing 52.67% of the total paid-up equity share capital of the Company. Thus, Ipca Laboratories Limited acquired majority control over the Company and accordingly your Company is now a subsidiary of Ipca Laboratories Limited.

Review of Subsidiaries and Associates

Your Company has six subsidiaries and one associate company. As required, the financial data of the subsidiaries and associate company is furnished in the prescribed Form AOC-1 as an annexure to the consolidated financial statements.

Please refer to detailed note nos. 6.1,38 & 42 of the standalone financials for impairment of investments in its associate company and Wholly Owned Subsidiaries.

Audited Financial Statements of subsidiaries are available on Company’s website at www.unichemlabs.com and the same are also available for inspection at the Registered Office of the Company during business hours as stipulated under Section 136 of the Act. The same will be made available to interested members upon request.

Unichem Pharmaceuticals (USA) Inc., is a material subsidiary in accordance with the provisions of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) read with the Company’s Policy on Material Subsidiaries which is available at https://www.unichemlabs.com/policy-on-material-subsidiaries.php.

Dividend

The Board of Directors has not recommended any dividend on the Equity Shares of the Company. Pursuant to the Listing Regulations, the Company has formulated a Dividend Distribution Policy and is available on the Company’s website https://www.unichemlabs.com/dividend-distribution-policy.php

Share Capital

There was no change in authorised or paid-up share capital of the Company during the year under review.

Employees Stock Options Scheme 2018

Unichem Employee Stock Option Scheme 2018 (“Scheme”) is in place which is administered by the Nomination and Remuneration Committee (“NRC”). No alterations were made in the scheme during the year. During the year under review, 5,00,000 options were granted to an employee of a subsidiary company.

Disclosure of details of the Scheme as required under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are posted on the Company’s website at https://www.unichemlabs.com/annual-report.php.

M/s. Alwyn Jay & Co., Secretarial Auditors have issued a certificate confirming that the aforesaid Scheme has been implemented in accordance with the Regulations and the resolution passed by members at the general meeting. The certificate will be available for inspection by members at the ensuing Annual General Meeting (“AGM”).

Credit Rating

The Company’s banking facilities are rated by ICRA. During the year, ICRA has upgraded the Company’s long-term rating to A (pronounced ICRA ‘A’) from A- (pronounced ICRA ‘A’ minus) which indicates a stable outlook.

Sale of strategic investments of the Company

During the year, Company sold its balance 0.02% equity shareholding held in Optimus Drugs Private Limited (”Optimus”) to Sekhmet Pharmaventures Private Limited (”Sekhmet”) for a consideration of '' 67.47 cr. as per the Share Purchase Agreement entered into between the Company, Optimus and Sekhmet after satisfaction of necessary conditions precedent. Please refer to the detailed notes no. 11 and 12 of the standalone and consolidated financial statements respectively, which are self-explanatory.

Management Discussion and Analysis

In accordance with Regulation 34(2) read alongside Part B of Schedule V of the Listing Regulations, a comprehensive assessment of the business operations, performance, significant events that transpired during the year and the overall state of the company''s affairs is provided in the Management Discussion and Analysis, which is an integral part of this report as Annexure A.

Corporate Governance

The Board of Directors reiterate their ongoing dedication to upholding good Corporate Governance and ethical standards. The Company is steadfast in its commitment to maintaining the highest level of Corporate Governance, striving to align with the best global practices.

The Corporate Governance Report for the year is included as an integral part of this report as Annexure B, alongwith a certificate from M/s. N. A. Shah Associates LLP, Statutory Auditors affirming compliance with Corporate Governance norms prescribed under the Listing Regulations.

Directors and Key Managerial Personnel

The Board of the Company consists of esteemed professionals from various backgrounds, each contributing diversified competencies, domain knowledge and experience. The optimal blend of Executive and Independent Directors ensures a fine balance of business acumen and independent judgment in the Board’s decision-making process.

Throughout the year under review, none of the Non-Executive Directors maintained any pecuniary relationships or engaged in transactions with the Company, apart from receiving sitting fees and reimbursement of expenses, if applicable.

a. Appointment of Managing Director (“MD”)

At the meeting held on 9th August, 2023, the Board approved the appointment & remuneration of Mr. Pabitrakumar Bhattacharyya as MD of the Company for a period of three years. His appointment was approved at the AGM by Shareholders on 25th September, 2023.

b. Retirement by Rotation

Mr. Pranay Godha retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment. A resolution seeking Shareholders’ approval for his re-appointment along with other required details forms part of the Notice.

c. Independent Directors (“IDs”)

All IDs have affirmed their continued compliance with the independence criteria outlined in Section 149(6) of the Act and the Listing Regulations. They have enrolled their names in the IDs database and have successfully completed required proficiency tests. There has been no change in the circumstances affecting their status as IDs of the Company. Additionally, they have attested to their adherence to the Code of Conduct for IDs.

Based on the disclosures provided by the IDs, none of them are disqualified or debarred from serving as Directors under Section 164 of the Act, SEBI order or any other relevant authority. The Board affirms that the IDs maintain independence from the management.

The Board acknowledges that the IDs possess the requisite qualifications, experience and expertise across various domains including manufacturing, operations, finance, foreign exchange, human resources, strategy, sales & marketing, auditing, banking and risk management. Furthermore, they uphold high standards of integrity.

A comprehensive overview of the skill set, expertise and competencies matrix of all Directors, including IDs, is available in the Corporate Governance Report, which is an integral part of this Annual Report.

i. Completion of tenure

The consecutive second term of five years as ID of Mr. Prafull Anubhai, Mr. Prafull Sheth and Mr. Anand Mahajan was completed on 31st March, 2024. As per Listing Regulations no IDs shall hold office for more than two consecutive terms.

The Board of Directors of the Company places on record their utmost appreciation and gratitude for the meaningful contribution made by Mr. Prafull Anubhai, Mr. Prafull Sheth and Mr. Anand Mahajan during their tenure with the Company.

ii. Appointment of new IDs

Based on the recommendations of NRC, Board had approved the appointment of Mr. Anand Kusre (DIN 00818477) and Mr. Arun Todarwal (DIN 00020916) as IDs of the Company for a term of five consecutive years with effect from 5th February, 2024. The members of the Company, by way of a special resolution passed through Postal Ballot, approved their appointment on 22nd March, 2024.

d. Key Managerial Personnel (“KMP”)

Mr. Pabitrakumar Bhattacharyya, Managing Director; Mr. Sandip Ghume, Deputy Chief Financial Officer and Mr. Pradeep Bhandari, Head - Legal & Company Secretary are the KMP of the Company as on the date of this report.

Consequent to the change in the Board of Directors, the Board committees were also reconstituted, the details of which are aptly covered in the Corporate Governance Report.

Board Performance and Evaluation

In accordance with the provisions of the Act and the Listing Regulations, the Board has conducted an annual performance evaluation of its own performance, its Committees and the individual Directors.

The manner of evaluation of Board of Directors performance and matters incidental thereto, are detailed in the Corporate Governance Report.

Salient features of the Nomination and Remuneration Policy

The Board, upon the recommendation of the NRC, has implemented a policy for the selection, appointment and remuneration of Directors, KMP and Senior Management. This policy is accessible on the Company’s website at the following link: https://www.unichemlabs.com/nomination-and-remunerationpolicy.php.

The Company regards its human resources as invaluable assets. Employee compensation, including salary, benefits, perquisites and allowances is provided with annual increments tied to individual performance evaluations. The Remuneration policy is crafted to attract, retain and incentivize talented personnel.

i. Whole-time/ Managing Director

The Company provides remuneration to its Whole-time Directors in the form of salary, perquisites and allowances (fixed component), as well as commission (variable component, where applicable as per terms of appointment). Salaries are disbursed based on the recommendation of the NRC and subsequent approval by the Board of Directors. Furthermore, such remuneration is subject to the endorsement of the Shareholders, within the limits prescribed by the Act and its accompanying Rules.

The remuneration accorded to Whole-time Directors is determined with consideration to industry benchmarks and the Company''s relative performance in comparison to industry standards.

ii. Non-Executive Directors

Non-Executive Directors receive sitting fees for their attendance at Board and Committee Meetings, in accordance with the provisions of the Act and the Rules. Apart from the payment of sitting fees, no additional remuneration is provided to NonExecutive Directors.

iii. KMP, Senior Management and other Employees

The remuneration of KMP, Senior Management and other employees primarily comprises of basic salary, perquisites, allowances and performance incentives including ESOPs wherever applicable. Perquisites and retirement benefits are disbursed in accordance with the Company’s established policy.

In determining the remuneration package, the Company considers the prevailing employment landscape, as well as remuneration packages offered by industry peers.

Significant and Material Orders passed by the Regulators/Courts/Tribunals

During the year under review, no significant or material orders were passed by the regulators or courts or tribunals, which may impact on the Company’s going concern status and its operations in the future.

Corporate Social Responsibility (“CSR”)

The Corporate Governance Report provides the terms of reference and constitution of the CSR Committee. Additionally, your Company has developed a CSR Policy, accessible on the Company’s website at https://www.unichemlabs.com/corporate-social-responsibility.php. Moreover, in compliance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Annual Report on CSR activities is annexed as Annexure C, forming an integral part of this Report.

Statutory Auditors

N. A. Shah Associates LLP, Chartered Accountants, (Firm Registration No. 116560W/W100149) (“M/s. N.A. Shah”) are the Statutory Auditors of the Company.

At the 59th AGM held on 9th August, 2022, Members re-appointed M/s. N. A. Shah for a further period of five years, i.e. from the conclusion of the 59th AGM till the conclusion of the 64th AGM of the Company to be held in the year 2027.

The Notes on the Financial Statements referred to in the Auditor’s Report are self-explanatory and do not call for any comments.

The Auditor’s Report does not contain any qualification or reservation, adverse remark or disclaimer. M/s. N.A. Shah have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company. The said auditors have confirmed that their firm has been subjected to the peer-review process of the Institute of Chartered Accountants of India (“ICAI”) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

During the year under review, the Auditors have not reported any matter under Section 143(12) of the Act and therefore no details are disclosed under Section 134(3)(ca) of the Act.

Cost Auditors

The Company adheres to the provisions of Section 148(1) of the Act by maintaining cost accounts and records, which are subject to audit by Cost Auditors. In line with Section 148(6) of the Act read with Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014, the cost audit report for the year ending 31st March, 2024, in Form No. CRA-4 (in XBRL mode), will be duly submitted to the Ministry of Corporate Affairs within the stipulated timeframe.

Upon the recommendation of the Audit Committee, the Board has appointed M/s. Kishore Bhatia & Associates, Practicing Cost Accountants, to conduct the audit of the Company''s cost records for the financial year 2024-25. They have affirmed that their appointment aligns with the applicable provisions of the Act and the rules established thereunder. Furthermore, they have confirmed their eligibility to serve as the Cost Auditors of the Company for the year ending 31st March, 2025.

In compliance with the provisions outlined in Section 148 of the Act, along with the Companies (Audit and Auditors) Rules, 2014, the remuneration proposed to be paid to the Cost Auditor for the financial year 2024-25 necessitates ratification by the members. Consequently, the Board of Directors advocates for its endorsement by the members during the upcoming AGM. This proposal is included as part of the notice for the AGM.

Secretarial Audit

In accordance with Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and Regulation 24A of the Listing Regulations, the Board has engaged M/s. Alwyn Jay & Co., Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for the financial year ending 31st March, 2024.

The Secretarial Audit Report is annexed to this report as Annexure D. It is noteworthy that the report does not contain any qualifications, reservations or adverse remarks. The content of the report is self-explanatory and does not necessitate any additional comments.

M/s. Alwyn Jay & Co., Practicing Company Secretaries, have also issued a Secretarial Compliance Report for the financial year ending 31st March, 2024. This report confirms that the Company has maintained proper records as mandated under various Rules and Regulations applicable to it. Furthermore, it affirms that no actions have been taken against the Company, its material subsidiaries or its promoters/directors by SEBI/Stock Exchanges. The Company disseminates this report on the websites of BSE and NSE within the specified timeframe.

Upon the recommendation of the Audit Committee, the Board of Directors has re-appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries, to conduct the secretarial audit for the financial year 2024-25. They have provided their consent and confirmed their eligibility for the said re-appointment.

During the reviewed period, the Statutory, Internal, Secretarial and Cost Auditors have not reported any instances of fraud perpetrated against the Company by its officers or employees to the Audit Committee. Hence, there are no details pertaining to such incidents to be included in the Directors'' report.

Compliance with Secretarial Standards

During the financial year 2023-24, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India as amended.

Meetings of Board

During the year, seven Board Meetings were held, the details of which are given in the Corporate Governance Report.

Committees of the Board

The Board has constituted five committees, viz., Audit Committee, NRC, CSR Committee, Stakeholders'' Relationship Committee and

Risk Management Committee. The Board has endorsed all recommendations put forth by these committees, with comprehensive information regarding the committees'' composition, reconstitution following changes in the Board of Directors, meeting schedules and other pertinent details outlined in the Corporate Governance Report.

Related Party Transactions (“RPTs”)

During the year under review, the Company has obtained prior approval from both the Audit Committee and/or Board of Directors for RPTs whenever necessary. The details of such transactions undertaken during a particular quarter are placed at the meeting of the Audit Committee held in the succeeding quarter. These transactions conducted with related parties were on an arm''s length basis and wherever not in the ordinary course of business, approval of the Board is obtained. Notably, the Company did not engage in any RPTs (with the exception of transactions involving the Company''s Wholly Owned Subsidiaries) that could be deemed material as per the Company''s Policy on materiality of RPTs or necessitating reporting in Form AOC-2 as per Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 or could have a potential conflict with the interests of the Company at large.

Members had approved following material related party transactions to be entered into for financial year 2024-25:

a. Unichem Laboratories Limited with Ipca Laboratories Limited;

b. Ipca Laboratories Limited with Unichem Pharmaceuticals USA Inc., wholly owned subsidiary of Unichem Laboratories Limited; and

c. Unichem Laboratories Limited with Unichem Pharmaceuticals USA Inc.

The Board approved policy on RPTs is accessible on the Company’s website via the weblink: https://www.unichemlabs.com/related-partv-transactions-policv.php.

Apart from the shares held in the Company, remuneration and sitting fees, there is no pecuniary transaction with any Director/KMP, which had potential conflict of interest with the Company.

Internal control system and Risk Management

Internal control system and Risk Management have been dealt with in Management Discussion & Analysis, which forms integral part of this report.

Whistle Blower Policy

The Company upholds a zero-tolerance policy towards any form of unethical conduct or behavior for maintaining an unwavering commitment to integrity in its business operations. To uphold these standards, the Company has implemented a Whistle Blower Policy/Vigil Mechanism, allowing stakeholders, directors and employees to report genuine concerns regarding unethical behavior, fraud or violations of the Company’s Code of Business Conduct and Ethics.

This mechanism ensures adequate safeguards against victimization of individuals who utilizes it. It is affirmed that no individual has been denied access to the Audit Committee. During the year under review, there was one complaint received and the same was resolved. The policy is readily accessible on the Company''s intranet and website, with the designated email address for reporting genuine concerns being [e-mail].

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The details required under Section 134(3)(m) of the Act and related rules are outlined in Annexure E of this Report.

Particulars of Employees

Details regarding remuneration and other necessary information, as mandated by Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided in Annexure F of this Report.

The statement showing particulars of employees pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not being sent to the Members along with this Annual Report in accordance with the provision of Section 136 of the Act. Any Member interested in obtaining a copy of this information may request it by writing to the Company Secretary stating their Folio No./DPID & Client ID [e-mail].

Business Responsibility and Sustainability Report (“BRSR”)

The Company is committed to ensuring that its actions have a positive impact on the economic, societal and environmental fronts. BRSR for the financial year 2023-24 in accordance with Regulation 34(2)(f) of the Listing Regulations, forming part of this report is annexed as Annexure G and forms an integral part of this Annual Report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is dedicated to fostering a safe, supportive and healthy working environment where employees can work without fear of prejudice or gender bias. The management continuously strives to cultivate an environment that is free from discrimination and sexual harassment.

The Company has established a policy on Prevention of Sexual Harassment at the Workplace, aligning with the requirement of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee

(“ICC”) has been constituted to address complaints pertaining to sexual harassment. The policy provides guidelines for the redressal, inquiry process to be followed by complainants and the ICC while addressing incidents of sexual harassment in the workplace. All women employees, including permanent, temporary, contractual and trainees, are covered under this policy. Additionally, the policy includes measures to ensure that no employee faces victimization or harassment for reporting such incidents in the Company''s interest. During the year under review, no complaint of sexual harassment has been received.

Annual Return

In accordance with the provisions of Section 92(3) and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 of the Act, Annual Return of the Company is hosted on the website of the Company at https://www.unichemlabs.com/annual-report.php.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.

Other disclosures

No disclosure or reporting is necessary regarding the following items, as there were no transactions of this nature during the year under review:

• Details relating to deposits covered under Chapter V of the Act;

• Transfer of any amount to reserves;

• Material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

Human Resource, health and safety

The Company is committed towards providing an enabling environment that recognizes and values the contributions of its employees while offering them opportunities for growth and development.

The Company is deeply committed to safeguarding human health, safety and the environment, upholding the highest standards of health and safety across all its plants and facilities. This dedication serves as the cornerstone of our Environmental, Health and Safety (EHS) management systems and governance.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

a. that in preparation of annual accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed and no material departures, have been made from the same;

b. that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ending 31st March, 2024 and Profit /Loss for that year;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts have been prepared on a going concern basis;

e. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Acknowledgement

The Board gratefully acknowledges the invaluable support and wise counsel provided to the Company by its customers, bankers, government agencies, suppliers, shareholders and other esteemed associates who serve as its business partners. Your directors express sincere gratitude for the invaluable contributions made by employees during the year under review. The consistent growth of the Company has been made possible by their hard work, solidarity, cooperation and unwavering perseverance and commitment. The Board further expresses its gratitude for the trust bestowed upon the Company by the medical fraternity and patients alike. With deep appreciation, we anticipate continued support in our mission to advance health through the delivery of quality products.

For and on behalf of the Board of Directors,

Dr. Prakash A. Mody

Mumbai Chairman

22nd May, 2024 (DIN: 00001285)

---

Mar 31, 2023

The Directors have pleasure of presenting the audited accounts of your company for the financial year ended 31st March, 2023.

Financial Highlights

The table below gives the financial highlights of the Company for the year ended 31st March, 2023 on a standalone and consolidated basis as compared to the previous financial year. (Rs. in Lakhs)

Particulars	Standalone (Audited)		Consolidated (Audited)
	For the year ended 31st March, 2023	For the year ended 31st March, 2022	For the year ended 31st March, 2023	For the year ended 31st March, 2022
Revenue from operations	1,07,243.22	94,292.66	1,34,302.32	1,26,983.22
Other Income	4,184.75	4,206.79	3,851.51	4,750.94
Total Income	1,11,427.97	98,499.45	1,38,153.73	1,31,734.16
Profit/(loss) before tax	(27,908.97)	(8,674.77)	(17,636.29)	2,196.81
Current tax	-	-	1,105.63	1,050.83
Deferred tax	2,061.22	(3,155.51)	1,534.98	(2,183.81)
Short/(Excess) provision for tax (earlier years)	-	23.70	(54.14)	23.70
Profit/(loss) for the year	(29,970.19)	(5,542.96)	(20,222.76)	3,306.17
Other Comprehensive Income	3,872.67	5,537.20	4,592.49	5,375.05
Total Comprehensive Income	(26,097.52)	(5.76)	(15,630.27)	8,681.22

Change in Control and Management

Dr. Prakash A. Mody, one of the members of the promoter and promoter group of the Company (Seller), Ipca Laboratories Limited (Acquirer) and the Company entered into a Share Purchase Agreement dated 24th April, 2023 (SPA) whereby the Acquirer agreed to purchase 2,35,01,440 fully paid-up equity shares of '' 2/- each, constituting 33.38 % of the fully diluted voting share capital of the Company(Shares), from the Seller, at a price of '' 440/- per equity share (Transaction). Dr. Mody transferred the said Shares to the Acquirer on 2nd August, 2023. The Acquirer is classified as one of the promoters of the Company and would be part of the promoter group alongwith the existing promoter/promoter group.

The Acquirer has already made an open offer to the public shareholders of the Company to acquire from them upto 26% of the fully diluted outstanding equity share capital of the Company at a price of '' 440/- per share aggregating to '' 805.44 crores under the relevant provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The Draft Letter of Offer (DLOF) in respect of the open offer was filed by the Acquirer with SEBI on 10th May, 2023. SEBI observations/comments on the DLOF are now received. The Acquirer will now proceed with the open offer as per the provisions of the said Regulations.

Pursuant to the Transaction, the Board of directors was reconstituted, the details of appointment/redesignation and resignation of directors in the course of such re-constitution are set out herein below under Directors and Key Managerial Personnel.

Management Discussion and Analysis

As required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements), 2015 (Listing Regulations), a Management Discussion and Analysis, Report forms part of this Report as Annexure A.

Dividend

The Board of Directors has not recommended a dividend on the Equity Shares of the Company.

Dividend Distribution Policy

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and is available on the Company’s website https://www.unichemlabs.com/dividend-distribution-policy.php.

Transfer to Reserves

Your Directors do not propose to transfer any amount into the reserves.

Consolidated Financial Statements

The annual consolidated financial statements together with the report of the Auditors thereon form part of this Annual Report.

Sale of strategic investments of the Company

In November 2018, the Company had made a strategic investment in two Hyderabad based Active Pharmaceutical Ingredients (APIs) manufacturing company namely Optimus Drugs Private Limited (ODPL) and Optrix Laboratories Limited (Optirx) for a total consideration of '' 12,000.62 Lakhs by acquiring 19.99% of the issued and paid-up share capital of each of the said companies. Optrix was later merged into ODPL with no change in the overall shareholdings of the Company in the merged entity. Unichem held 19.99% of the equity share capital of ODPL.

In September 2022, Unichem sold its 19.97% equity shareholding held in ODPL on a fully diluted basis in the first

tranche to Sekhmet Pharmaventures Private Limited (Sekhmet), for an aggregate consideration of '' 27,098.99 Lakhs and sale of the second tranche consisting of the remaining 0.02% equity shares shall be sold for a price to be determined as per the said Share Purchase Agreement entered into between the Company, ODPL and Sekhmet after satisfaction of necessary conditions precedent. Please refer to the detailed Notes no.11 and 12 of the standalone and consolidated financial statements respectively which are self-explanatory.

Corporate Governance

As required under Regulation 34 of the Listing Regulations, a Report on Corporate Governance along with a Certificate of Compliance from the Auditors forms part of this Report as Annexure B.

Review of Subsidiaries and Associates

Your Company has six subsidiaries and one associate company. A statement containing salient features of the financial statements of the subsidiaries and associate company, pursuant to Section 129 of the Companies Act, 2013 (Act), and the Rules made thereunder, is annexed to this Report as Annexure C in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Please refer to detailed Note nos. 38, 42, 6 of the standalone financials and Note no. 6 of the consolidated financials for impairment of investments in its Wholly Owned Subsidiaries in Brazil, UK and Ireland and that of its associate Company.

Audited Financial Statements of subsidiaries are available on Company’s website at www.unichemlabs.com and the same are also available for electronic inspection. Unichem Pharmaceuticals (USA) Inc, is a material subsidiary in accordance with the provisions of the Listing Regulations read with the Company’s Policy on Material Subsidiaries which is available at https://www.unichemlabs.com/policy-on-material-subsidiaries.php.

Material changes and commitment, if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

There were no material changes and commitment affecting the financial position of the Company from the end of the financial year till the date of this report. There has been no change in the nature of business of your Company.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013 (Act):

1. that in preparation of annual accounts for the year ended 31st March, 2023, the applicable

accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and Profit /Loss for that year;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Directors and Key Managerial Personnel

Dr. (Mrs) B. Kinnera Murthy (DIN:1878144) retired as an Independent Non-Executive Director of the Company w.e.f. 21st March, 2023 after completion of her second term of five consecutive years. The Board of Directors had on the recommendation of the Nomination and Remuneration Committee (NRC), at their meeting held on 20th March, 2023 appointed Mrs. Priti Puri (DIN:07755966) as an Independent Non-Executive Director of the Company w.e.f. 21st March, 2023 for a term of three consecutive years, which was subsequently approved by the shareholders on 3rd May, 2023.

At the Board meeting held on 9th August, 2023, Dr. Prakash A. Mody (DIN:00001285) the Chairman and Managing Director of the Company stepped down from the role of Managing Director and was re-designated as a Non-Executive, Non-Independent Director, and Chairman of the Company w.e.f. 10th August, 2023, subject to the approval of the shareholders at the ensuing annual general meeting of the Company and whose office is liable to retire by rotation. Consequently, he ceased to be the Chairman of the Risk Management Committee, Corporate Social Responsibility Committee and Member of the Stakeholders’ Relationship Committee.

Your directors wish to place on record their appreciation for the contributions made by Dr. Mody during his tenure as the Managing Director of the Company.

Mr. Pranay Premchand Godha (DIN:00016525) was appointed as the Non-Executive, Non-Independent Director of the Company w.e.f. 10th August, 2023 subject to the

approval of the shareholders at the ensuing annual general meeting of the Company, whose office is liable to retire by rotation.

Mr. Pabitrakumar Kalipada Bhattacharyya (DIN:07131152) was appointed as an additional director and Managing Director of the Company w.e.f. 10th August, 2023 for a period of three consecutive years subject to the approval of the shareholders at the ensuing annual general meeting of the Company who office is liable to retire by rotation.

Mr. Godha and Mr. Bhattacharyya are not disqualified as the Director in terms of Section 164 of the Act. They have given all the necessary declarations under the Act. They have also confirmed that they are not debarred from holding the office of a Director by virtue of any order passed by the SEBI or any such authority. The Company has received a notice pursuant to Section 160 of the Act from a Member signifying the intention to propose the appointment of Mr. Godha and Mr. Bhattacharyya as directors of the Company. Detailed profile of Mr. Godha and Mr. Bhattacharyya is aptly covered in the Notice of the 60th Annual General Meeting and not repeated here for the sake of brevity.

In accordance with provisions of the Act, Dr. Mody would retire by rotation at the ensuing annual general meeting. Being eligible, he has offered himself for re-appointment.

Mr. Dilip Kunkolienkar (Director Technical) ceased to be director w.e.f. 10th August, 2023. Consequently, he also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board of Directors.

Your directors wish to place on record their appreciation for the contributions made by Dr. (Mrs) B. Kinnera Murthy and Mr. Dilip Kunkolienkar during their tenure as directors of the Company.

Consequent to the change in the board of directors, the Board committees were also reconstituted, the details of which are aptly covered in the Corporate Governance Report.

All the Independent Non-Executive Directors of your Company have submitted the declaration confirming that they meet the criteria of independence as prescribed under the Act and the Listing Regulations and are not disqualified from continuing as Independent Non-Executive Directors. The Board is of the opinion that the Independent NonExecutive Directors of the Company including those appointed during the year possess requisite qualifications, expertise and experience and they hold highest standards of integrity. The Independent Non-Executive Directors of the Company have confirmed compliance with relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014.

During the year under review, the Non-Executive Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for attending Meetings of the Board/Committee of the Company and the dividend paid on the equity shares held by them.

In terms of Section 203 of the Act, as on 31st March, 2023, Dr. Prakash A. Mody, Chairman & Managing Director, Mr. Sandip Ghume, Deputy Chief Financial Officer, and Mr. Pradeep Bhandari, Head-Legal & Company Secretary were the Key Managerial Personnel of the Company. With the reconstitution of the Board of the Directors w.e.f. 10th August, 2023. Mr. Pabitrakumar Kalipada Bhattacharyya, Managing Director, Mr. Sandip Ghume, Deputy Chief Financial Officer, and Mr. Pradeep Bhandari, Head-Legal & Company Secretary shall be the Key Managerial Personnel of the Company.

Board Performance and Evaluation

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of the working of its performance, its Committees, and the Directors individually. The performance evaluation of Independent Directors was done by the entire Board of Directors and in the evaluation, the Directors who were subject to evaluation did not participate. A structured questionnaire was prepared after taking into consideration inputs received from the Directors covering various aspects of the functioning of the Board and its Committees.

The evaluation of the Directors was done on various parameters such as vision and strategy, Board participation, Board disclosures of interests, review of management policies, strategy, compliances, and leadership skills. The Directors expressed their satisfaction with the evaluation process.

Salient Features of the Nomination and Remuneration Policy

The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for the selection, appointment, and remuneration of Directors, Key Managerial Personnel, and Senior Management. The policy is available on the Company’s website at

https://www.unichemlabs.com/nomination-and-remunerationpolicv.php.

The Company considers human resources as its invaluable assets. The Company pays to its employees by way of salary, benefits, perquisites and allowances and annual increments are linked to the overall individual performance. The Remuneration policy for all employees is designed to attract, retain and motivate talented personnel.

Whole-time/ Managing Director

The Company pays remuneration by way of salary, perquisites, and allowances (fixed component) and commission (variable components wherever applicable as per terms of appointment) to its Whole-time Directors. Salary is paid based on the recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors, subject to the approval of the Shareholders within the limits stipulated by the Act and the Rules made thereunder. The remuneration paid to the Whole Time Directors is determined keeping in view the industry benchmark and the relative performance of the Company compared to the industry performance.

Non-Executive Directors

Non-Executive Directors receive sitting fees for attending Meetings of the Board and its Committees as per the provisions of the Act and the Rules made thereunder. Besides payment of sitting fees and Dividends on equity shares, if any, held by the Directors, no other remuneration is paid to the Non-Executive Directors.

Key Managerial Personnel (KMP) and other Employees

The remuneration of KMP other than the Executive Directors and other Senior Managerial Employees largely consists of basic salary, perquisites, allowances and performance incentives (wherever paid). Perquisites and retirement benefits are paid according to the Company’s policy. The Company while deciding the remuneration package takes into consideration the current employment scenario and remuneration package prevalent in the industry and peer group companies.

Significant and Material Orders passed by the Regulators /Courts/Tribunals

During the year under review, no significant or material orders were passed by the regulators or courts or, tribunals which impact the Company’s going concern status and its operations in the future.

However as reported earlier on 9th July, 2014, the European Commission (EU) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd (Niche) contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits, have filed appeals against the decision of General Court before the Court of Justice of the EU and the

outcome of the appeals are awaited. The auditors qualification and response of the management on the above matter has been dealt under Note 3 of the Auditors standalone and consolidated audit report and under Notes 38 and 39 of the standalone and consolidated financial statements respectively which are self-explanatory.

Corporate Social Responsibility (CSR)

The terms of reference of the CSR Committee and its constitution are provided in the Corporate Governance Report. Your Company has also formulated a CSR Policy, which is available on the website of the Company at httDs://www.unichemlabs.com/corDorate-social-resDonsibilitv.DhD. Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended (CSR Rules) is annexed as Annexure D and forms an integral part of this Report.

Statutory Auditors

As per Section 139 of the Companies Act, 2013, read with your Companies (Audit and Auditors) Rules, 2014, the members of the Company at the 59th Annual General Meeting of the Company (59th AGM) approved the appointment of M/s. N. A. Shah Associates LLP, Chartered Accountants (Firm Registration No. 116560W/W100149) (M/s. N.A. Shah), as the Statutory Auditors of the Company for a term of five consecutive years i.e. from the conclusion of 59th AGM till the conclusion of 64th AGM. The Report given by M/s. N.A. Shah on the Financial Statements of your Company for the financial year ended 31st March, 2023 is part of the Annual Report. The Notes on the Financial Statements referred to in the Auditor’s Report are selfexplanatory and do not call for any comments.

The Auditor’s Report does not contain any other qualification or reservation, adverse remark or disclaimer except for the audit qualification and emphasis of matter as detailed in note no. 3 of their standalone and consolidated audit report. The response of the management on the above is given in Note no. 38 and 39 of the Standalone and consolidated financial statements respectively.

N.A. Shah have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company. The said auditors have confirmed that their firm has been subjected to the peer-review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no details are disclosed under Section 134 (3) (ca) of the Act.

Cost Auditors

Your Company is required to make and maintain cost records as specified by the Central Government under sub-section (1)

of Section 148 of the Act. Accordingly, your Company has been making and maintaining such cost records as per the requirements. In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed Kishore Bhatia & Associates, Cost Accountants, (Firm Registration No. 00294) being eligible, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company in relation to the financial year ending 31st March, 2024. Your Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and Rules framed thereunder. The Cost Auditors have confirmed they are not disqualified to be appointed as the Cost Auditors of your Company for the year ending 31st March, 2024. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee. In terms of the Act and Rules thereunder requisite resolution for ratification of remuneration of the Cost Auditors by the members has been set out in the Notice of the 60th AGM of your Company. In the opinion of the Directors, considering the limited scope of audit, the proposed remuneration payable to the Cost Auditors would be reasonable and fair and commensurate with the scope of work carried out by them. The Cost Audit Report for the year ended 31st March, 2023 was filed with the Ministry of Corporate Affairs on 2nd August, 2023.

During the year under review, the Cost Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134(3) (ca) of the Act.

Secretarial Audit

The Secretarial Audit was carried out by Alwyn Jay & Co, Company Secretaries (PCS Registration No. 6915) for the financial year ended 31st March, 2023. The Report given by the Secretarial Auditors is set as Annexure E and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer except for their observations which are selfexplanatory and detailed in the Secretarial Audit report.

During the year, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act. In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed Alwyn Jay & Co, Company Secretaries as the Secretarial Auditors of the Company for the financial year ending 31st March, 2024. Your Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditors have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of the Company for the financial year ending 31st March, 2024.

Compliance with Secretarial Standards

During the financial year 2022-23, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India as amended.

Meetings of Board

During the year, six Board Meetings were held, the details of which are given in the Corporate Governance Report.

Particulars of Loans, Guarantees, and Investments

Details of Loans, Guarantees, and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.

Related Party Transactions

During the year under review, prior approval of the Audit Committee and Board of Directors was sought for Related Party Transactions (RPTs) wherever required. The RPTs entered by the Company with the related parties were on arm’s length basis and in ordinary course of business. Further, the Company had not entered into any RPT with related parties (save and except transactions with the Company’s Wholly Owned Subsidiaries), which could be considered as material in accordance with the Company’s Policy on materiality of RPTs or which are required to be reported in Form AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and the weblink

is https://www.unichemlabs.com/related-partv-transactions-policv.php.

Except to the extent of the shares held in the Company and the remuneration drawn from the Company, none of the Directors and Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Risk Management

Your Company has developed and implemented a Risk Management Policy and in the opinion of the Board of Directors, during the year, there were no elements of risks identified which may threaten the existence of the Company. Details of the constitution of the Risk Management Committee are given in the corporate governance report. A detailed section on Risk Management practices of the Company is included in the Management Discussion and Analysis Report.

Internal control systems and their adequacy

Internal controls are the backbone of governance. The Company has in place systems, policies and procedures for ensuring efficient conduct of its business, prevention and detection of frauds and errors with remedial measures and safeguard of the company’s assets. These financial controls also ensure the accuracy and completeness of the

accounting records and the timely preparation of reliable financial statements as per the regulatory requirements. The monitoring of these controls are undertaken by the audit committee through periodic management reviews. The internal audit team does independent audits of various risk areas as per pre-approved internal audit plans. A detailed section on internal control is included in the Management Discussion and Analysis Report.

Committees of the Board

The Board has constituted five committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders'' Relationship Committee and Risk Management Committee. All the recommendations made by these Committees were accepted by the Board. Details of committees, their composition including their reconstitution post the change in the Board of Directors, meetings held, etc. are provided in the Corporate Governance Report.

Whistle Blower Policy

Your Company has zero tolerance for any form of unethical conduct or behaviour and it adheres to uncompromising integrity in the conduct of its business. The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors, and Employees can report genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company’s Code of Business Conduct and Ethics. The Policy provides for adequate safeguards against victimization of director(s)/employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no person has been denied access to the Audit Committee. The said policy is posted on the intranet and website of the Company. The e-mail ID for reporting genuine concerns is [e-mail].

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134(3)(m) of the Act and Rules made thereunder are set out in Annexure F to this Report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, are annexed as Annexure G to this Report.

In terms of the provisions of Section 197(12) of the Act and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, details of employee’s remuneration, form part of this Report. However, as per the provisions of Sections, 134 and 136 of the Act, the Report and financial statements are

being sent to the Members and others entitled thereto, excluding the information on employees’ particulars. Any Member interested in obtaining a copy of the same may write to the Company Secretary at [e-mail].

Business Responsibility and Sustainability Report

In terms of Regulation 34 of the Listing Regulations, read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under Business Responsibility and Sustainability Report (BRSR). The BRSR seeks disclosure on the performance of the Company against nine principles of the National Guidelines on Responsible Business Conduct (NGRBCs). As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for top 1000 listed companies by market capitalisation. BRSR is annexed as Annexure H and forms an integral part of this Annual Report.

Employees Stock Options Scheme 2018

The Company had implemented the Unichem Employee Stock Option Scheme 2018 (Scheme) which was duly approved by the Shareholders vide a Special Resolution passed through Postal Ballot Meeting held on 15th May, 2018. This scheme is administered by the Nomination and Remuneration Committee.

52,75,275 Options were approved out of which 15,12,224 were granted and were due for exercise in terms of the said scheme and more detailed in the below annexure posted on the website of the Company. Subsequent to the year ended 31st March, 2023, all the outstanding 15,12,224 ESOPs have been surrendered by the employees of the Company and that of its Subsidiary. Accordingly, the balance in ESOP reserve will be transferred to retained earnings on the date of surrender.

Disclosure of details of the Scheme as required under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are posted on the Company’s website at https://www.unichemlabs.com/annual-report.php.

M/s. Alwyn Jay & Co., Secretarial Auditors have issued certificate confirming that the Scheme has been implemented in accordance with the SEBI Regulations and the resolution passed by members at the general meeting. The certificate will be available for inspection by members.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual

harassment. The policy has set guidelines on the redressal and inquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the workplace. All women employees (permanent, temporary, contractual, and trainees) are covered under this policy. The policy also provides for the requisite checks, balances, and safeguards to ensure that no employee is victimized or harassed for reporting and bringing up such incidents in the interest of the Company. The ICC received one complaint which was addressed during the year.

Extract of Annual Return

In accordance with the provisions of Section 92(3) and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 of the Act, Annual Return of the Company is hosted on the website of the Company at https://www.unichemlabs.com/annual-report.php.

Credit Rating

The Company’s banking facilities are rated by ICRA. ICRA has rated the Company’s long-term rating to [ICRA] A- (Stable) (pronounced ICRA A minus with a stable outlook). This rating indicates an adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

General

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) details relating to deposits covered under Chapter V of the Act; (b) changes in share capital; (c) issue of equity shares with differential rights as to dividend, voting or otherwise; (d) raising of funds through preferential allotment or qualified

institutions placement; (e) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and (f) instance of one-time settlement with any bank or financial institution.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by customers, bankers, government agencies, suppliers, shareholders, and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

---

Mar 31, 2022

Your Directors have the pleasure of presenting the audited accounts of your Company for the financial year ended 31st March, 2022.

Financial Highlights

The table below gives the financial highlights of the Company for the year ended 31st March, 2022 on a standalone and consolidated basis as compared to the previous financial year.

('' in lakhs)
Particulars	Standalone (Audited)		Consolidated (Audited)
	For the year ended		For the year ended
	31st March, 2022	31st March, 2021	31st March, 2022	31st March, 2021
Revenue from operations	94,292.66	1,12,397.28	1,26,983.22	1,23,513.53
Other Income	4,206.79	4,737.11	4,750.94	5,018.76
Total Income	98,499.45	1,17,134.39	1,31,734.16	1,28,532.29
Profit/(Loss) before tax	(8,674.77)	6,564.55	2,196.89	5,147.94
Current tax	-	-	1,050.83	1,668.26
Deferred tax	(3,155.51)	1,094.30	(2,183.81)	(14.82)
Short/(Excess) provision for tax (earlier years)	23.70	62.02	23.70	62.02
Profit/(Loss) for the year	(5,542.96)	5,408.23	3,306.17	3,432.48
Other Comprehensive Income	5,537.20	2,130.49	5,375.05	1,639.47
Total Comprehensive Income	(5.76)	7,538.72	8,681.22	5,071.95

Management Discussion and Analysis

As required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis Report is part of this Report as Annexure A.

The state of the affairs of the business along with the financial and operational developments has been given in this Report.

Appropriations

A loss of '' (8,359.19) lakhs after considering dividend paid during the year is proposed to be carried forward in the Profit & Loss Account. Your Company does not propose to transfer any amount in the General Reserves of the Company.

Dividend

The Board has recommended a Dividend of '' 4/- (200%) per equity share of '' 2/- each for the year ended 31st March, 2022. The Dividend will be paid after approval of Members at the ensuing Annual General Meeting (AGM) of the Company which will result in a cash outflow of '' 2,816.23 lakhs.

The Register of Members and Share Transfer Books shall remain closed from Wednesday, 3rd August, 2022, to Tuesday, 9th August, 2022 (both days inclusive) for AGM and, Dividend, if approved by the Members.

Pursuant to Finance Act, 2020, Dividend income will be taxable in the hands of Shareholders with effect from 1 st April, 2020 and the Company shall deduct tax at source from Dividends paid to the Shareholders at the prescribed rates. A detailed communication on this shall be separately sent to the Shareholders.

The Company has a Dividend Distribution Policy in place and the same is available on the website of the Company at https://www.unichemlabs.com/dividend-distribution-policy.php.

Employees Stock Options Scheme

The Company has implemented the “Unichem Employee Stock Option Scheme, 2018” (Scheme) which was duly approved by the Shareholders vide a Special Resolution passed through Postal Ballot Meeting held on 15th May, 2018. Under the said Scheme 52,75,275 Options were approved, out of which 15,12,224 Options were granted to the eligible employees of the Company and its subsidiary in August 2018. 50% of the options granted i.e. 7,56,112 Options became vested on to them on 1st April,2022 and are exercisable in terms of the said Scheme. As on date none of the eligible employees have yet exercised these options.

The certificate from the Secretarial Auditor of the Company on the implementation of the said Scheme in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) has been duly obtained.

Details of this scheme form part of the Director’s Report and are available on the Company’s website at https://www.unichemlabs.com/annual-report.php.

Research and Development (R&D)

Kindly refer to the write-up in the Section, Management Discussion and Analysis Report.

Corporate Governance

As required under Regulation 34 of the Listing Regulations, a Report on Corporate Governance along with a Certificate of Compliance from the Auditors is given in Annexure B of this Report.

Corporate Social Responsibility (CSR)

The Board has constituted a Corporate Social Responsibility (CSR) Committee to monitor the implementation of CSR activities of your Company. The Annual Report on CSR activities as amended in terms of Section 135 of the Act and the Rules made thereunder, is annexed as Annexure C to this Report.

During the year under review, there was no mandatory requirement to spend towards CSR. However, the Company has voluntarily spent '' 63.22 lakhs for the year under review which includes an amount of '' 2.60 lakhs which has remained unutilized with an implementing agency as on 31st March, 2022. This is expected to be utilized in the subsequent financial year.

Consolidated Financial Statements

The annual consolidated financial statements together with the report of the Auditors thereon form part of this Annual Report.

Review of Subsidiaries and Associates

Your Company has 6(six) subsidiaries and 1(one) associate company. A statement containing salient features of the financial statements of the subsidiaries and associate company, pursuant to Section 129 of the Companies Act, 2013 (the Act), and the Rules made thereunder, is annexed to this Report as Annexure D in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Synchron Research Services Private Limited (Synchron) is an associate company in terms of Section 2(6) of the Act. Synchron is a contract research organization in India which offers clinical trial services to pharmaceutical companies. The Company has made a provision towards impairment of its equity investment in Synchron as per the note appearing under 6.2 of the notes to the accounts under standalone financial statements.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees, and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Risk Management

Your Company considers risk management as a key element of its business operations and has put in place effective systems to identify, monitor, and mitigate risks to ensure sustained operations. Your Company has constituted a Risk Management Committee, details of which are disclosed in the Corporate Governance Report. A section on Risk Management practices of the Company is included in the Management Discussion and Analysis Report.

Directors and Key Managerial Personnel

All Independent Directors have declared that they meet the criteria of Independence as laid down under Section 149(6) of the Act and Regulation 16(b) of the Listing Regulations. All Independent Directors have given declarations stating compliance with the Code of Ethics and Business Conduct. There has been no change in the circumstances affecting their status as Independent Directors of the Company. In the opinion of the Board, the Independent Directors fulfill the conditions specified in these Regulations and are independent of the management.

During the year under review, the Non-Executive Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for attending Meetings of the Board/Committee of the Company and the dividend paid on the equity shares held by them.

In terms of Section 203 of the Act, Dr. Prakash A. Mody, Chairman & Managing Director, (DIN: 00001285), Mr. Dilip Kunkolienkar, Director Technical, (DIN: 02666678), Mr. Sandip Ghume, Deputy Chief Financial Officer, and Mr. Pradeep Bhandari, Head-Legal & Company Secretary are the Key Managerial Personnel of the Company. Mr. Kunkolienkar retires by rotation and being eligible has offered himself for re-appointment.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013 (Act):

1. that in preparation of annual accounts for the year ended 31st March, 2022, the applicable accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and Profit /Loss for that year;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for

Committee and as approved by the Board of Directors, subject to the approval of the Shareholders within the limits stipulated by the Act and the Rules made thereunder. The remuneration paid to the Whole Time Directors is determined keeping in view the industry benchmark and the relative performance of the Company compared to the industry performance.

Non-Executive Directors

Non-Executive Directors receive sitting fees for attending Meetings of the Board and its Committees as per the provisions of the Act and the Rules made thereunder. Besides payment of sitting fees and Dividends on equity shares, if any, held by the Directors, no other remuneration is paid to the Non-Executive Directors.

Key Managerial Personnel (KMP) and Senior Management

The remuneration of KMP other than the Executive Directors and other Senior Managerial Employees largely consists of basic salary, perquisites, allowances and performance incentives (wherever paid). Perquisites and retirement benefits are paid according to the Company’s policy. The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification and experience, merits, and performance of each employee. The Company while deciding the remuneration package takes into consideration the current employment scenario and remuneration package prevalent in the industry and peer group companies.

Board Meetings

During the year, 5 (five) Board Meetings were held, the details of which are given in the Corporate Governance Report.

Audit Committee

The Company has an Audit Committee pursuant to the requirements of the Act read with the Rules framed thereunder and Listing Regulations. The details relating to the same are given in the report on Corporate Governance forming part of this Report. During the financial year 2021-22, the recommendations of the Audit Committee were duly accepted by the Board.

Whistle Blower Policy

The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors, and Employees can report genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company’s Code of Business Conduct and Ethics. The said policy provides for adequate safeguards against victimization and direct access to the Audit Committee. The e-mail id for reporting genuine concerns is [e-mail]. No complaints were received during the year.

Significant and Material Orders passed by the Regulators /Courts/Tribunals

No significant or material orders were passed by the regulators or courts or, tribunals which impact the Company’s going concern status and its operations in the future.

preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Board performance and evaluation

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of the working of its performance, its Committees, and the Directors individually. The performance evaluation of Independent Directors was done by the entire Board of Directors and in the evaluation, the Directors who were subject to evaluation did not participate. A structured questionnaire was prepared after taking into consideration inputs received from the Directors covering various aspects of the functioning of the Board and its Committees.

The evaluation of the Directors was done on various parameters such as vision and strategy, Board participation, Board disclosures of interests, review of management policies, budget concerning the risk and return, and leadership skills. The Directors expressed their satisfaction with the evaluation process.

Salient features of the Nomination and Remuneration Policy

The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for selection, appointment, and remuneration of Directors, Key Managerial Personnel, and Senior Management. The policy is available on the Company’s website at

https://www.unichemlabs.com/nomination-and-remunerationpolicv.php.

The Company considers human resources as its invaluable assets. The Nomination and Remuneration Policy aims to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP), and employees of the Company and is linked to the overall individual performance. The Remuneration policy for all employees is designed to attract talented personnel and remunerate them fairly and responsibly, this being a continuous, ongoing exercise at each level in the organization.

Whole-time/Managing Director

The Company pays remuneration by way of salary, perquisites, and allowances (fixed component) and commission (variable components wherever applicable as per terms of appointment) to its Whole-time Directors. A proper balance between fixed and variable components is aimed at. Salary is paid based on the recommendation of the Nomination and Remuneration

Further, as per the management the future business outlook and projections of the subsidiary are sufficient so as not to warrant any impairment on the investments in subsidiary (Niche) unless the outcome of EU matter is not in favour of the subsidiary.

Consolidated financials - Note no. 39

The management has obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and fine imposed by the EU of Euro 13.96 million (equivalent to '' 11,818.62 lakhs) is continued to disclose the matter under contingent liability.

On the above matter, the auditors of the Niche have given qualified opinion in their audit report and the statutory auditor of Company have reported the said qualification in their audit report on consolidated financial statement for the year ended 31st March, 2022.

Material changes and commitment, if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

In November 2018, the Company had made a strategic investment in two Hyderabad based Active Pharmaceutical Ingredients (APIs) manufacturing company namely Optimus Drugs Private Limited (“ODPL”) and Optrix Laboratories Limited (“Optirx”) for a total consideration of '' 120 crs (Rupees One hundred twenty crores) by acquiring 19.99% of the issued and paid-up share capital of each of the said companies. Optrix was later merged into ODPL which no change in the overall shareholdings of the Company in the merged entity. Unichem held 19.99% of the equity share capital of ODPL.

Subsequent to the financial year ended 31st March, 2022, the Company has entered into binding Share Purchase Agreement (‘SPA’) dated 10th May, 2022 with Sekhmet Pharmaventures Private Limited (‘Purchaser’) and Optimus Drugs Private Limited (‘Optimus’) to sell its entire shareholding in Optimus to the Purchaser (‘Transaction’). As per the SPA, the Company will sell 19.97% equity shares on a fully diluted basis in the first tranche and remaining 0.02% equity shares in the second tranche. For the first tranche, total consideration is '' 27,098.99 lakhs and for the second tranche for a price to be determined as per the said SPA after satisfaction of necessary conditions precedent. Fair value gain of '' 7,646.40 lakhs was recognized in Other Comprehensive Income in the current quarter and year ended 31st March, 2022 based on independent valuation report and carrying value of such investment as at balance sheet date is '' 22,595.23 lakhs. The additional fair value gain will be recognized in the subsequent period as per SPA. The Transaction is expected to complete in the subsequent period after satisfaction of necessary condition precedents as mutually agreed between the parties under the SPA.

However on 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd (“Niche”) contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits, have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited.

Audit qualification and Response of the Management on the above matter.Standalone financials - Note no. 38

In this regard, the statutory auditors of Niche have given qualified audit opinion on the financial statement of Niche for the year ended 31st March, 2022. They have stated that previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, however following the hearing in October 2021, and their review of the available documentation, their opinion is that it is more likely than not that Niche will be liable for the fine of Euro 13.96 million (equivalent to '' 11,818.62 lakhs) and hence they believe that this should be provided for in the financial statements of Niche. As per the Board of Directors of Niche, there remains an inherent uncertainty as to the outcome of the appeal and therefore the Directors are of the opinion that no provision should be made at this point of time. The management has obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and continued to disclose the matter under contingent liability.

As at Balance Sheet date, the Company has aggregate financial exposure of '' 12,267.33 lakhs in Niche comprising of investment, trade receivable and corporate guarantee given to bank for loan availed by Niche. Considering the impact of on-going litigation as elaborated in the above para and accumulated losses in Niche as at Balance Sheet date, the statutory auditor of the Company are of the view that the Company would need to provide for impairment on the exposure involved of '' 12,267.33 lakhs. However, the Company is of the view that such provision for impairment on exposure would be required only in the event of unfavourable outcome of the appeal which itself is uncertain. On the above matter, the auditors of the Company have given qualified opinion in their audit report on standalone financial statement for the year ended 31st March, 2022.

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

Related Party Transactions

During the year under review, approval of the Audit Committee and Board of Directors was sought for Related Party Transactions wherever required.

The Audit Committee has given prior approval for all Related Party Transactions wherever applicable. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and the weblink is https://www.unichemlabs.com/related-party-transactions-policy.php. The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Act are provided, in the prescribed Form AOC-2 annexed as Annexure E to this Report.

Except to the extent of the shares held in the Company and the remuneration drawn from the Company, none of the Directors and Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and inquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the workplace. All women employees (permanent, temporary, contractual, and trainees) are covered under this policy. The policy also provides for the requisite checks, balances, and safeguards to ensure that no employee is victimized or harassed for reporting and bringing up such incidents in the interest of the Company. The ICC received 1 (one) compliant which was addressed during the year.

Auditors

Pursuant to the provisions of Section 139 of the Act read with applicable Rules framed thereunder, M/s. N. A. Shah Associates LLP, Chartered Accountants the existing Statutory Auditors of the Company will complete their first term of 5 (five) years as Statutory Auditors of the Company at the concl usion of this 59th Annual General Meeting (‘AGM’). In view of the same, M/s. N. A. Shah Associates LLP, Chartered Accountants (Firm Registration 1 16560W/W100149) based on the recommendation of the Audit Committee, have been reappointed by the Board as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years to hold office from the conclusion of the 59th AGM till the conclusion of

the 64th AGM subject to the approval of the Members of the Company at the ensuing Annual General Meeting on such remuneration plus applicable taxes and out-of-pocket expenses incurred in connection with the Audit as may be decided by the Board and the said auditors.

The said Auditors have given their eligibility certificate and willingness to be appointed as statutory auditors for a second term of 5 (five) years from the conclusion of the 59th AGM till the conclusion of the 64th AGM.

The said Auditors have confirmed that their firm has been subjected to the peer-review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of the ICAI.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no details are disclosed under Section 134 (3) (ca) of the Act.

Cost Auditors

The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act, accordingly such accounts and records are made and maintained by the Company.

The Board of Directors at its Meeting held on 27th May, 2022, based on the recommendation of the Audit Committee, appointed Kishore Bhatia & Associates, Cost Accountants, (Firm Registration No. 00294); as Cost Auditors for undertaking Cost Audit of the Cost Accounting Records maintained by the Company for the financial year 2022-23 at a remuneration not exceeding '' 9.00 lakhs (Rupees Nine Lakhs Only Only) plus applicable taxes and out-of-pocket expenses at actuals. The said Auditors have confirmed their eligibility for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors is required to be placed before the Members at the ensuing AGM for ratification and a suitable Resolution has been set out in the Notice of this AGM. The Cost Audit Report for the year ended 31st March, 2021 was filed with the Ministry of Corporate Affairs on 4th August, 2021.

During the year under review, the Cost Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134(3) (ca) of the Act.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, the Company has appointed Alwyn Jay & Co., Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure F to this Report. There is no qualification, reservation, adverse remark, or disclaimer in the said Report.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134(3) (ca) of the Act.

Compliance with Secretarial Standards

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of I ndia about Board Meetings (SS-1) and General Meetings (SS-2).

Internal control systems and their adequacy

The Company has in place adequate internal financial controls concerning its financial statements. These controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements. The details of the same are included in the Management Discussion and Analysis Report.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134(3)(m) of the Act and Rules made thereunder are set out in Annexure G to this Report.

Dividend Distribution Policy

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and is available on the Company’s website https://www.unichemlabs.com/dividend-distribution-policy.php.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, are annexed as Annexure H to this Report.

In terms of the provisions of Section 197(12) of the Act and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, details of employee’s remuneration, form part of this Report. However, as per the provisions of Sections, 134 and 136 of the Act, the Report and financial statements are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars. Any Member interested in obtaining a copy of the same may write to the Company Secretary at [e-mail].

Extract of Annual Return

In accordance with the provisions of Section 92(3) and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 of the Act, Annual Return of the Company is hosted on the website of the Company at https://www.unichemlabs.com/annual-report.php.

Business Responsibility Report

In compliance with Regulation 34(2) of the Listing Regulations, the Business Responsibility Report for the financial year 2021-22 is set out in Annexure I of this Annual Report.

Human Resources and Employee Relations

The Board of Directors commends the continued dedication of all its employees. Details of Human Resources and Employee Relations and matters incidental thereto are provided in the Management Discussion and Analysis Report.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by investors, analysts, bankers, government agencies, shareholders, suppliers, and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

Cautionary Statement

Statements in this Directors’ Report and Management Discussion and Analysis Report describing the Company’s objectives, projections, estimates, expectations, or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, cyclical demand, pricing and changes in government regulations, tax regimes, economic developments among the countries in which the Company conducts business, and other ancillary factors.

For and on behalf of the Board of Directors,

Dr. Prakash A. Mody

Mumbai Chairman & Managing Director

27th May, 2022 (DIN: 00001285)

---

Mar 31, 2019

Directors'' Report

Dear Members,

The Directors take pleasure in presenting the 56^th Annual Report on the business and operations of your Company for the financial year ended March 31, 2019.

Financial Highlights

The table below gives the financial highlights of the Company for the year ended March 31, 2019 on Standalone basis as compared to the previous financial year. _

(Rs, in lakhs)

Particulars	For the year ended
	March 31, 2019	March 31, 2018
Revenue from operations (inclusive of excise duty upto June 2017)	96,773.89	66,646.97
Other Income	10,154.23	6,288.60
Total Income	106,928.12	72,935.57
Profit/(Loss) before tax	(2,158.02)	(12,155.04)
Current tax	-	-
Deferred tax	(2,737.77)	1,257.90
Short/(Excess) provision for tax (earlier years)	(124.45)	(1,271.99)
Profit/(Loss) for the year from continuing operations	704.20	(12,140.95)
Profit/(Loss) from discontinued operations
A. Profit/(Loss) from discontinued operations	246.96	15,358.12
B. Gain on sale of identified business (net)	-	321,731.05
Profit/(Loss) for the year from discontinued operations (A B)	246.96	337,089.17
Tax on discontinued operations	71.24	69,288.37
Profit/(Loss) from discontinued operations (after tax)	175.72	267,800.80
Profit/(Loss) for the year	879.92	255,659.85
Total Comprehensive Income	851.43	255,479.77

Management Discussion and Analysis

As required by Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis Report forms part of this Report. The detailed state of the affairs of the business along with the financial and operational developments have been discussed in the Management Discussion and Analysis Report.

Appropriations

An amount of Rs,879.92 lakhs is proposed to be carried forward in the Profit & Loss Account. No amount has been transferred to General Reserve.

Dividend

The Board has recommended a dividend of Rs,4/- (200%) per equity share of Rs,2/- each for the year ended March 31, 2019 for the approval of the Members at the ensuing Annual General Meeting (AGM). An amount of Rs,3,394.16 lakhs would be paid as dividend (including dividend distribution tax). The Register of Members and Share Transfer Books shall remain closed from Monday, July 22, 2019 to Saturday, July 27, 2019 (both days inclusive) for the purpose of AGM and dividend, if approved by the Shareholders. The AGM of the Company is scheduled for Saturday, July 27, 2019. The Company has a dividend distribution policy in place and the same is available on the website of the Company at https://unichemlabs.com/policies-code-of-conduct/dividend-distribution-policy/.

Employees Stock Option Schemes Scheme 2008

During the year under review, 46,250 options were exercised and 46,250 equity shares of Rs,2/- each were allotted (on pari passu basis) under the Employees Stock Option Scheme -2008. As per the requirements of the SEBI (Share Based Employee Benefits) Regulations, 2014, details of stock options exerc ised during the year under review form part of the Directors’ Report and are available on the Company’s website at https://unichemlabs.com/investor-information/annual-report/.

Scheme 2018

The Shareholders, vide Special Resolutions dated May 15, 2018, approved the Unichem Employee Stock Option Scheme 2018 (Scheme) for the employees of the Company and its subsidiary company (ies) and setting up of Unichem Employee Welfare Trust (s) for implementing the Scheme. The maximum number of Employee Stock Options that can be granted under the Scheme shall not exceed 52,75,275 (Fifty-Two lakh, Seventy Five thousand Two hundred and Seventy Five), i.e., 7.50% of the issued, subscribed and paid-up equity share capital of the Company as on March 31, 2018 (as adjusted for any corporate action and/or change in the capital structure) at such price or prices and such other terms and conditions as may be determined by the Board or the Nomination and Remuneration Committee from time to time. The Company has received in principle approval from the Stock Exchanges where the Company’s shares are listed.

During the year under review, 16,88,064 Stock Options were granted to the Senior Management under the Employee Stock Option Scheme 2018. In terms of the requirements specified under the SEBI (Share Based Employee Benefits) Regulations, 2014, details of the Employee Stock Option Scheme 2018, form part of the Directors’ Report, and are available on the Company’s website at https://unichemlabs.com/investor-information/annual-report/ .

Research and Development (R&D)

Kindly refer to the write up in the section, Management Discussion and Analysis.

Corporate Governance

A detailed report on Corporate Governance as required under Regulation 34 of the Listing Regulations, forms part of this Annual Report. The Auditors’ Certificate on compliance with the conditions of Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements together with the Report of the Auditors’ thereon, forms part of this Annual Report.

Review of Subsidiaries and Associates

Your Company has five Subsidiaries and one Associate Company. A statement containing salient features of the Financial Statements of the Subsidiaries and Associate Company, pursuant to Section 129 of the Companies Act, 2013 (the Act), and Rules made there under, is annexed to this Report as Annexure A in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Synchron Research Services Pvt. Ltd. (Synchron) is an Associate Company in terms of Section 2 (6) of the Act. Synchron is a leading contract research organization in India which offers competitive and high-quality clinical trial services to domestic and international pharmaceutical and bio-pharmaceutical companies. Your Company avails such services from Synchron from time to time.

On internal assessment of long term strategic investments made by the Company in its Wholly Owned Subsidiary, Unichem Farmaceutica Do Brasil Ltda., considering its past performance, results, assets, expected cash flows, projections and having confidence in the business model and strategy of the said Subsidiary achieving its goals given favourable business opportunities, the management has determined an amount of Rs,302.83 lakhs as diminution for the year (previous year Rs,511.71 lakhs). This has resulted in an aggregate impairment loss of Rs,7,086.72 lakhs (previous year Rs,6,783.89 lakhs) on total investment of Rs,7,086.72 lakhs (previous year Rs,6,783.89 lakhs) made therein.

Particulars of Loans, Guarantees and Investments

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

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Risk Management

The Company has formulated a policy on Risk Management. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. A risk register is prepared for identification of risk and formulating mitigation plans.

Directors and Key Managerial Personnel

During the year under review Dr. Prakash A. Mody (DIN 00001285) was re-appointed Chairman & Managing Director for a period of three years w.e.f. July 1, 2018 to June 30, 2021. Mr. Dilip Kunkolienkar (DIN 02666678) was appointed whole time Director, designated as Director Technical for a period of three years w.e.f. April 1, 2018 to March 31, 2021. Mr. Prafull Anubhai (DIN 00040837), Mr. Prafull Sheth (DIN 00184581) and Mr. Anand Mahajan (DIN 00066320) were appointed as Independent Directors for a second term of five consecutive years w.e.f. April 1, 2019 up to March 31, 2024.

Mr. Ramdas Gandhi (DIN 00029437), Independent Director, resigned w.e.f. May 29, 2018 due to advanced age. The Board places on record its deep appreciation for the services rendered by Mr. Ramdas Gandhi during his tenure with the Company.

Mr. Dilip Kunkolienkar, Director Technical retires by rotation and being eligible has offered himself for re-appointment. The Board has recommended his re-appointment for consideration of the shareholders at the 56^th AGM.

All Independent Directors have declared that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (b) of the Listing Regulations. All Independent Directors have given declarations stating compliance with the Company’s Code of Ethics and Business Conduct.

Mr. Rakesh Parikh, Chief Financial Officer of the Company superannuated from the services of the Company on August 31, 2018. Mr. Sandip Ghume was appointed as Deputy Chief Financial Officer w.e.f. October 30, 2018.

In terms of Section 203 of the Companies Act, 2013, Dr. Prakash A. Mody, Chairman & Managing Director, Mr. Dilip Kunkolienkar, Director Technical, Ms. Neema Thakore, Head- Legal & Company Secretary and Mr. Sandip Ghume, Deputy Chief Financial Officer are the Key Managerial Personnel of the Company.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Act:

1. that in preparation of annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied 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 as at March 31, 2019 and profit / loss for the year ended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that internal financial controls were in place and that they were adequate and operating effectively; and

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

Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations, performance evaluation of the Board, its Committees, the Chairman & Managing Director and the Independent Directors was carried out. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are given hereunder. The policy is available on the Company’s website at https://unichemlabs.com/nomination-and-remunerationpolicy/.

The Company considers human resources as its invaluable assets. The Nomination and Remuneration Policy aims to pay equitable remuneration to all Directors, Key Managerial Personnel and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company. The Remuneration Policy for all employees is designed to attract talented personnel and remunerate them fairly and responsibly, this being a continuous, ongoing exercise at each level in the organization.

Whole Time/ Managing Director

The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission (variable component) to its Managing Director. A proper balance between fixed and variable component is aimed at. Salary is paid based on the recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors, subject to the approval of the Shareholders within the limits stipulated by the Act and the Rules made there under. The remuneration paid to the Whole Time Director is determined keeping in view the industry benchmark and the relative performance of the Company compared to the industry performance. The Company pays remuneration by way of salary, perquisites and allowances to its Whole Time Director.

Non-Executive Directors

Non-Executive Directors receive sitting fees for attending Meetings of the Board and its Committees as per the provisions of the Act and the Rules made there under. Besides payment of sitting fees and dividend on equity shares, if any, held by the Directors, no other remuneration is paid to the Non-Executive Directors. The Nomination and Remuneration Committee may recommend to the Board, the payment of commission taking into account the evaluation of the performance of the Directors.

Key Managerial Personnel (KMP) and other Employees

The remuneration of KMP other than the Whole Time Director and other Senior Managerial Employees largely consists of basic salary, perquisites, allowances and performance incentives (wherever paid). Perquisites and retirement benefits are paid according to the Company’s policy. The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification and experience, merits and performance of each employee. The Company while deciding the remuneration package takes into consideration the current employment scenario and remuneration package prevalent in the industry and peer group companies.

Meetings

During the year, seven Board Meetings were held, the details of which are given in the Corporate Governance Report.

Board Committees

The constitution of the Board Committees, their scope, role and terms of reference are as per the provisions of the Act, the Rules made there under and the Listing Regulations. All the recommendations made by the Audit Committee were accepted by the Board of Directors. The constitution of the Board Committees is provided in the Corporate Governance Report.

Whistle Blower Policy

The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors and Employees can report genuine concerns about unethical behavior and actual or suspected fraud or violation of the Company’s ‘Code of Business Conduct and Ethics’. The said Policy provides for adequate safeguards against victimization and also direct access to the Audit Committee. The e-mail id for reporting genuine concerns is [e-mail].

Significant and Material orders passed by the Regulators/ Courts / Tribunals

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

However, the Board of Directors would like to inform that on July 9, 2014, the European Commission decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd. (Niche), contending that they have acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014, to the EU General Court seeking appropriate relief in the matter.

The General Court of the European Union has on December

12, 2018 rejected the appeal and confirmed the fine of Euro 13.96 million imposed by the European Commission jointly and severally on the Company and its subsidiary, Niche. The Company has filed an appeal against the decision of the General Court before the Court of Justice of the European Union. The Company awaits the outcome of the appeal.

Material changes and commitment if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

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

Related Party Transactions

During the year under review, approval of the Audit Committee and Board of Directors was sought for Related Party Transactions wherever required.

The Audit Committee has given prior approval for all Related Party Transactions. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and the we blink is provided in the Corporate Governance Report.

The particulars of contracts or arrangements with Related Parties referred to in Section 188 (1) of the Act are provided, in the prescribed Form AOC - 2 annexed as Annexure B to this Report.

Except to the extent of the shares held in the Company and the remuneration if any, drawn from the Company, none of the Directors and Key Managerial Personnel have any pecuniary relationships or transactions ws-a-wsthe Company.

Disclosure under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the workplace. All women employees (permanent, temporary, contractual and trainees) are covered under this Policy. The ICC received one complaint during the year under review. As on date the same has been redressed in terms of the Policy.

Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 (the Act) read with the Companies (Audit and Auditors) Rules, 2014, N.A. Shah Associates LLP (Firm Registration No. 116560W/W100149), Chartered Accountants, were appointed as Statutory Auditors of the Company, to hold office from the conclusion of 54^th Annual General Meeting (AGM) until the conclusion of 59^th AGM, subject to ratification by Shareholders at every subsequent AGM.

The provisions of Section 139 of the Act were amended and notified with effect from May 7, 2018. In terms of the said amendment, appointment of the Auditors is no longer required to be ratified by the Members at every subsequent AGM. In view of this, no resolution is proposed for ratification of the appointment of the Auditors at the ensuing AGM.

N.A. Shah Associates LLP, (Firm Registration No. 116560W/W100149), Chartered Accountants, have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no details are disclosed under Section 134 (3) (ca) of the Act.

Cost Auditors

The Board of Directors at its Meeting held on May 24, 2019, based on the recommendation of the Audit Committee, appointed Kishore Bhatia & Associates, Cost Accountants, (Firm Registration No. 00294); as Cost Auditors for undertaking Cost Audit of the Cost Accounting Records maintained by the Company for the financial year 2019-2020 at a remuneration not exceeding Rs,7.50 lakhs (Rupees Seven Lakhs Fifty Thousand Only) plus applicable taxes and out of pocket expenses at actuals. The said Auditors have confirmed their eligibility for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors is required to be placed before the Members at the ensuing AGM for ratification and a suitable Resolution has been set out in the Notice of the 56^th AGM. The Cost Audit Report for the year ended March 31, 2018 was filed with the Ministry of Corporate Affairs on August 24, 2018.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Rules made there under, the Company has appointed Alwyn Jay & Co., Company Secretaries in Practice to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure C to this Report. There is no qualification, reservation, adverse remark or disclaimer in the said Report.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134 (3) (ca) of the Act.

Compliance with Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

Internal control systems and their adequacy

Kindly refer to the write up in the section, Management Discussion and Analysis.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 (3) (m) of the Act and Rules made thereunder are set out in Annexure D to this Report.

Dividend Distribution Policy

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy which is available on the Company’s website https://unichemlabs.com/ policies-code-of-conduct/dividend-distribution-policy/.

Extract of Annual Return

Form MGT-9, providing an extract of the Annual Return in terms of Section 92 of the Act and the Rules made there under, forms part of this Report as Annexure E and the same is available on the website of the Company at https://unichem labs.com/investor-information/annual report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Act and Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, are annexed as Annexure F to this Report.

In terms of the provisions of Section 197 (12) of the Act and Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, details of employee’s remuneration, form part of the Director’s Report. However, as per the provisions of Sections 134 and 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars, which is available for inspection at the Registered Office of the Company as per details mentioned in the Notice of the 56^th AGM. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Company’s Registered Office.

Human Resources and Employee Relations

Kindly refer to the write up in the section, Management Discussion and Analysis.

Quality and Environment

Your Company’s mission envisages a strong sense of commitment to work by being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims at consistently providing products that meet customer needs as well as national and international regulatory requirements, as may be applicable. Your Company has been steadily raising the bar, setting higher goals for incremental performance and enlarging the scope of its initiatives. The environmental policy of your Company emphasizes being a caring Company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

Various initiatives are taken at your Company''s manufacturing locations to reduce waste across the plants and reduce usage of paper by recycling wastepaper. Training programs are organized from time to time to create environmental awareness amongst the employees. To conserve water, your Company has devised various water saving methods which are monitored on a day to day basis.

Your Company continues to strive for energy saving and conservation of natural resources. In all its Active Pharmaceutical Ingredient (API) plants, your Company has installed online effluent monitoring equipment which is connected to the system of the Central Pollution Control Board.

At the manufacturing units, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water and using solar energy for street lighting.

Corporate Social Responsibility (CSR)

Your Company believes in the philosophy of giving back. Being in the pharmaceutical industry your Company’s primary focus is healthcare. Education, sanitation, protection of environment, general welfare and development are the other areas in which your Company concentrates its CSR activities. While the focus of CSR efforts will be in the areas around the Company’s locations, the Company may also undertake projects looking into other societal needs in compliance with Schedule VII to the Act. The CSR policy is available on the website of the Company and the Annual Report on CSR activities, as required under Section 135 of the Act, is annexed as Annexure G to this Report.

During the year under review, the total amount to be spent on CSR was Rs,226.91 lakhs. The Company spent Rs,156.51 lakhs which is 1.37 % of the average profits for the last three financial years. Balance amount of Rs,70.40 lakhs remained unspent.

The Company could not spend the balance amount since it is in the process of identifying appropriate CSR programs/projects in line with its CSR policy. Further, certain funds even though allocated to approved educational and health projects by the CSR Committee were not disbursed during the year under review since implementation of the projects were delayed or there was no requirement for these funds from the respective organizations/institutions.

The Company plans to scale up its CSR activities in areas of education, health, environment protection, sanitation, general welfare and development activities in a structured manner to meet the objectives of its CSR policy in the coming years.

Business Responsibility Report

Regulation 34 (2) of the Listing Regulations, inter alia, provides that the Annual Report of the Top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report ("BRR"). Since your Company, does not feature in the Top 500 listed entities as per market capitalization as on March 31,

2019, the Business Responsibility Report for the financial year 2018-2019 does not form a part of this Annual Report.

Health and Safety

Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to the families of its employees. Periodic health check-ups are carried out for all employees and regular training programs are organized on safety and precautionary measures. Firefighting training programs and first aid training camps are organized regularly to educate workers and employees at the plant locations and corporate office.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, Government agencies, shareholders, investors, suppliers, distributors, employees and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

Cautionary Statement

Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, cyclical demand and pricing in the Company’s principle markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

For and on behalf of the Board of Directors,

Dr. Prakash A. Mody

Mumbai Chairman & Managing Director

May 24, 2019 (DIN 00001285)

---

Mar 31, 2018

Dear Members,

The Directors take pleasure in presenting the 55th Annual Report on the business and operations of your Company for the financial year ended March 31, 2018.

Financial Highlights

The table below gives the financial highlights of the Company for the year ended March 31, 2018 on Standalone basis as compared to the previous financial year.

(Rs. in Lakhs)

Particulars	For the year ended
	March 31, 2018	March 31, 2017
Revenue from operations (inclusive of excise duty upto June 2017)	66,973.05	57,702.28
Other Income	6,288.60	719.25
Total Income	73,261.65	58,421.53
Profit/(Loss) before tax	(12,155.04)	(9,223.46)
Current tax	-	(1,408.08)
Deferred tax	1,257.90	(262.25)
Short/(Excess) provision for tax (earlier years)	(1,271.99)	-
Profit/(Loss) for the year from continuing operations	(12,140.95)	(7,553.13)
Profit/(Loss) from discontinued operations
A. Profit/(Loss) from discontinued operations	15,358.12	22,383.15
B. Gain on sale of identified business (net)	321,731.05	-
Profit/(Loss) for the year from discontinued operations (A B)	337,089.17	22,383.15
Tax on discontinued operations	69,288.37	4,443.30
Profit/(Loss) from discontinued operations (after tax)	267,800.80	17,939.85
Profit/(Loss) for the year	255,659.85	10,386.72
Total Comprehensive Income	255,479.77	10,263.19

Review of Operations

During the year under review, Standalone Sales/Income from operations (Gross) increased to Rs.66,973.05 lakhs (continuing operations) from Rs.57,702.28 lakhs (continuing operations) in 2016-2017, registering a growth of 16.07%. Consolidated Sales/Income from Operations (Gross) stood at Rs.81,839.69 lakhs (continuing operations) in 2017-2018 as compared to Rs.69,866.67 lakhs (continuing operations) in 2016-2017, registering an increase of 17.14%.

Sale of Domestic Business

The Company, in December 2017, transferred its business of manufacture, sale, marketing and distribution of domestic formulations in India and Nepal, and the manufacturing facility at Sikkim together with all specified tangible and intangible assets, contracts, rights, personnel and employees, data and records, inventory and other assets and liabilities as agreed between the parties in relation to the said business (“Identified Business”) by way of slump sale on a going concern basis, to Torrent Pharmaceuticals Limited on mutually agreed terms and conditions.

The Company received a consideration (net of incidental expenses) of Rs.335,428.62 lakhs subject to tax. Gain on sale of Identified Business (net) amounting to Rs.321,731.05 lakhs was recognized during the financial year 2017-2018. These funds have been utilized for Buyback of the Company’s shares (as reported in detail below) and for the Company’s operations. Surplus funds have been invested as per the Company’s investment policy.

Going forward Unichem will:

. focus attention on all aspects of the international business including finished formulations, API, contract manufacturing and contract research;

. increase investments in R&D in the New Chemical and Biological Entities (NCE & NBE), Bio-similars and complex generics;

. initiate various measures towards achieving organizational and operating efficiencies and strengthening core competencies.

Buyback of equity shares

In March 2018, the Company bought back 2,06,00,000 (two crore six lakhs only) fully paid-up equity shares of the face value of Rs.2/each, representing 22.65% of the total number of equity shares in the issued, subscribed and paid-up equity share capital of the Company, from the existing shareholders / beneficial owners of equity shares of the Company as on the Record Date (February 16, 2018), on a proportionate basis (subject to small shareholder reservation), through the “Tender Offer” route at a price of Rs.430/-(Rupees four hundred and thirty only) per equity share for an aggregate amount of Rs.8,85,80,00,000/- (Rupees eight hundred eighty five crores eighty lakhs only). The buyback offer opened on March 7, 2018 and closed on March 20, 2018. The buyback consideration was paid to the eligible shareholders on March 27, 2018. Post Buyback, the paid-up share capital has reduced from 9,09,37,000 to 7,03,37,000 equity shares having a face value of Rs.2/ each. Details of the shareholding pattern post buyback are given in the Corporate Governance Report.

Appropriations

An amount of Rs.255,659.85 lakhs is proposed to be carried forward in the Profit & Loss Account. An amount of Rs.412 lakhs was transferred to Capital Redemption Reserve. No amount was transferred to General Reserve.

Dividend

The Board has recommended a dividend of Rs.5/- (250 %) per equity share of Rs.2/- each for the year ended March 31, 2018 for the approval of the Members at the ensuing Annual General Meeting (AGM). The Register of Members and Share Transfer Books shall remain closed from Monday, July 23, 2018 to Saturday, July 28, 2018 (both days inclusive) for the purpose of AGM and dividend, if approved by the Shareholders. The AGM of the Company is scheduled for Saturday, July 28, 2018.

Employees Stock Option Scheme 2008

During the year under review, 60,475 options having a face value of Rs.2/- each were exercised and the same were allotted (on pari passu basis) under the Employees Stock Option Scheme - 2008. Details of the Employees Stock Option Scheme - 2008 are set out as Annexure A to this Report.

Employees Stock Option Scheme 2018

The Shareholders vide Special Resolutions dated May 15, 2018 approved the Unichem Employee Stock Option Scheme 2018 (Scheme) for the employees of the Company and of its subsidiary company (ies) and setting up Unichem Employee Welfare Trust(s) for implementing the Scheme. The maximum number of Employee Stock Options that can be granted under the Scheme shall not exceed 52,75,275 equity shares (Fifty two lac, seventy five thousand, two hundred and seventy five), i.e., 7.50% of the issued, subscribed and paid-up equity share capital of the Company as on March 31, 2018 (as adjusted for any corporate action and/or change in the capital structure) at such price or prices and such other terms and conditions as may be determined by the Board or the Nomination and Remuneration Committee from time to time. Process for seeking in principle listing approval from the Stock Exchanges is under way.

Research and Development (R&D)

Kindly refer to the write up in the section, Management Discussion and Analysis.

Management Discussion and Analysis

A detailed review on the operations and performance of the Company is given in the Management Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), forms part of this Annual Report. The Auditors’ Certificate on compliance with the conditions of Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements together with the Report of the Auditors’ thereon, forms part of this Annual Report.

Review of Subsidiaries and Associates

Your Company has 5 (five) Subsidiaries and one Associate Company. A statement containing salient features of the Financial Statements of the Subsidiaries and Associate Company, pursuant to Section 129 of the Companies Act, 2013 (the Act), and Rules made thereunder, is annexed to this Report as Annexure B in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Synchron Research Services Private Limited (Synchron) is an Associate Company in terms of Section 2 (6) of the Act. Synchron is a leading contract research organization in India which offers competitive and high quality clinical trial services to domestic and international pharmaceutical and bio-pharmaceutical companies. Your Company avails such services from Synchron from time to time.

On internal assessment of long term strategic investments made by the Company in its Wholly Owned Subsidiary, Unichem Farmaceutica Do Brazil Ltda., considering its past performance, results, assets, expected cash flows, projections and having confidence in the business model and strategy of the said Subsidiary achieving its goals given favourable business opportunities, the management has determined an amount of Rs.511.71 lakhs as diminution for the year (previous year Rs.2,690.78 lakhs). This has resulted in an aggregate impairment loss of Rs.6,783.89 lakhs (previous year Rs.6,272.19 lakhs) on total investment of Rs.6,783.89 lakhs made therein.

Particulars of Loans, Guarantees and Investments

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

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Risk Management

The Company has formulated a policy on Risk Management. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. A risk register is prepared for identification of risk and formulating mitigation plans.

Directors and Key Managerial Personnel

Dr. Prakash A. Mody is the Chairman & Managing Director of the Company.

Dr. Prakash A. Mody (DIN 00001285) was re-appointed as Chairman & Managing Director of the Company for a tenure of five years with effect from July 1, 2013 upto June 30, 2018 and approval of the members of the Company was duly obtained at the Annual General Meeting of the Company held on July 19, 2013. The tenure of his appointment will end on June 30, 2018. In accordance with the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on May 29, 2018, re- appointed Dr. Prakash A. Mody as the Chairman & Managing Director of the Company for a period of five years with effect from July 1, 2018 upto June 30, 2023, subject to the approval of the Members at the ensuing AGM and approval of the Central Government, if required.

The Board of Directors at its meeting held on March 31, 2018, based on the recommendation of the Nomination and Remuneration Committee appointed Mr. Dilip Kunkolienkar, (DIN 02666678) as an Additional Director of the Company with effect from April 1, 2018, to hold office upto the date of the ensuing Annual General Meeting wherein he is proposed to be appointed as a Director of the Company, liable to retire by rotation.

At the said Board meeting Mr. Kunkolienkar was also appointed as a Whole Time Director of the Company designated as Director Technical, for a period of five years with effect from April 1, 2018 upto March 31, 2023, subject to the approval of the Members at the ensuing AGM and approval of the Central Government, if required.

Dr. Prakash A. Mody retires by rotation at the ensuing AGM in terms of the provisions of Section 152 of the Act. The Act provides that Independent Directors are not subject to retirement by rotation and two thirds of the remaining Directors shall be subject to retirement by rotation. Since all the Directors except Dr. Mody and Mr. Kunkolienkar are Independent Directors, Dr. Mody being longest in office will retire by rotation and being eligible offers himself for re-appointment.

Mr. Ramdas Gandhi, Independent Director of the Company resigned with effect from May 29, 2018 due to advanced age. The Board places on record its deep appreciation for the services rendered by Mr. Ramdas Gandhi during his tenure with the Company.

Mr. Prafull Anubhai, Mr. Prafull Sheth and Mr. Anand Mahajan’s first term as Independent Directors of the Company will expire on March 31, 2019. Based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors, it is proposed to re-appoint Mr. Prafull Anubhai, Mr. Prafull Sheth and Mr. Anand Mahajan as Independent Directors, for a second term of five consecutive years with effect from April 1, 2019 upto March 31, 2024.

All Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and the Listing Regulations.

Attention of the Members is invited to the relevant items in the Notice of the AGM seeking your approval to the aforesaid appointment/ re-appointments. The information required under Regulation 36 of the Listing Regulations is provided in the Notice of the 55th AGM and the statement annexed thereto.

Dr. Prakash A. Mody, Chairman & Managing Director, Mr. Rakesh Parikh, Chief Finance & Compliance Officer and Ms. Neema Thakore, Head - Legal & Company Secretary were the Key Managerial Personnel during the financial year.

Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Act:

1. that in preparation of annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied 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 as at March 31, 2018 and profit/loss for the year ended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations, performance evaluation of the Board, it’s Committees, the Chairman & Managing Director and the Independent Directors was carried out. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are provided in the Corporate Governance Report.

Meetings

During the year, eight Board Meetings were held, the details of which are given in the Corporate Governance Report.

Audit Committee

The constitution of the Audit Committee, its scope, role and terms of reference are as per the provisions of the Act, the Rules made thereunder and the Listing Regulations. All the recommendations made by the Audit Committee were accepted by the Board of Directors. Pursuant to the resignation of Mr. Ramdas Gandhi, Independent Director and member of the Audit Committee, with effect from May 29, 2018, the said Committee has been reconstituted, details of which are provided in the Corporate Governance Report.

Whistle Blower Policy

The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors and Employees can report genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company’s ‘Code of Business Conduct and Ethics’. The said Policy provides for adequate safeguards against victimization and also direct access to the Audit Committee. The e-mail id for reporting genuine concerns is [e-mail]

Significant and Material orders passed by the Regulators/Courts/Tribunals

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

However, the Board of Directors would like to inform that on July 9, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd., (Niche) contending that they have acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche have submitted appeals in September 2014, to the EU General Court seeking appropriate relief in the matter. Your Company has challenged this order and the proceedings are currently ongoing.

Material changes and commitment, if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

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

Related Party Transactions

During the year under review, approval of the Audit Committee and Board of Directors was sought for Related Party Transactions wherever required.

The Audit Committee has given prior approval for all Related Party Transactions. The Policy on Related Party Transactions (Policy) as approved by the Board is uploaded on the Company’s website and the weblink is provided in the Corporate Governance Report. The Board of Directors of the Company has approved the criteria for omnibus approval of Related Party Transactions by the Audit Committee within the overall framework of the Policy.

The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Act are provided, in the prescribed Form AOC - 2 annexed as Annexure C to this Report.

Except to the extent of the shares held in the Company and the remuneration if any, drawn from the Company, none of the Directors and Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the workplace. All women employees (permanent, temporary, contractual and trainees) are covered under this Policy. The Company had received one complaint during the year under review and the same has been redressed in terms of the Policy.

Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 (the Act) read with the Companies (Audit and Auditors) Rules, 2014, N. A. Shah Associates LLP (Firm Registration No. 116560W/W100149), Chartered Accountants, were appointed as Statutory Auditors of the Company, to hold office from the conclusion of the 54th Annual General Meeting (AGM) until the conclusion of 59th AGM, subject to ratification by Members at every subsequent AGM.

The provisions of Section 139 of the Act have been amended by the Companies (Amendment) Act, 2017 and notified with effect from May 7, 2018. In terms of the said amendment, ratification of the appointment of the Auditors by Members at every subsequent AGM is no longer required. In view of this, no resolution is proposed for ratification of the appointment of the Auditors at the ensuing AGM.

N. A. Shah Associates LLP, (Firm Registration No. 116560W/W100149), Chartered Accountants, have confirmed that they are not disqualifying from continuing as Statutory Auditors of the Company.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

Cost Auditors

The Board of Directors at its Meeting held on May 29, 2018, based on the recommendation of the Audit Committee, appointed Kishore Bhatia & Associates, Cost Accountants, (Firm Registration No. 00294); as Cost Auditors for undertaking Cost Audit of the Cost Accounting Records maintained by the Company for the financial year 2018-2019 at a remuneration not exceeding Rs.7.50 lakhs (Rupees Seven Lakhs Fifty Thousand Only) plus applicable taxes and out of pocket expenses at actuals. The said Auditors have confirmed their eligibility for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors is required to be placed before the Members at the ensuing AGM for ratification and a suitable Resolution has been set out in the Notice of the 55th AGM. The Cost Audit Report for the year ended March 31, 2017 was filed with the Ministry of Corporate Affairs on September 5, 2017.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, the Company has appointed Alwyn Jay & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure D to this Report. There is no qualification, reservation, adverse remark or disclaimer in the said Report.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

Internal control systems and their adequacy

Kindly refer to the write up in the section Management Discussion and Analysis.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 (3)(m) of the Act and Rules made thereunder are set out in Annexure E to this Report.

Dividend Distribution Policy

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy which forms part of this Annual Report as Annexure F and is also available on the Company’s website https://unichemlabs.com/policies-code-of-conduct/dividend-distribution-policy/

Extract of Annual Return

Form MGT-9 providing an extract of the Annual Return in terms of Section 92 of the Act and the Rules made thereunder, is annexed as Annexure G to this Report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, are annexed as Annexure H to this Report.

In terms of the provisions of Section 197(12) of the Act and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, containing details of employees remuneration forms part of this Report as Annexure J. However, as per the provisions of Sections 134 and 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars, which is available for inspection at the Registered Office of the Company as per details mentioned in the Notice of the 55th AGM. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Company’s Registered Office.

Human Resources and Employee Relations

Kindly refer to the write up in the section. Management Discussion and Analysis.

Quality and Environment

Your Company’s mission envisages a strong sense of commitment to work by being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims at consistently providing products that meet customer needs as well as national and international regulatory requirements, as may be applicable. Your Company has been steadily raising the bar, setting higher goals for incremental performance and enlarging the scope of its initiatives. The environmental policy of your Company emphasizes at being a caring Company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

Various initiatives are taken at your Company’s manufacturing locations to reduce waste across the plants and reduce usage of paper by recycling waste paper. Training programs are organized from time to time to create environmental awareness amongst the employees. To conserve water, your Company has devised various water saving methods which are monitored on a day to day basis.

Your Company continues to strive for energy saving and conservation of natural resources. In all its Active Pharmaceutical Ingredient (API) Plants your Company has installed online effluent monitoring equipment which is connected to the system of the Central Pollution Control Board.

Your Company is in the process of commissioning advanced Effluent Treatment Systems to control the usage of polluted effluent which will improve quality of effluent discharge. Your Company has initiated a study to install a cleaner form of energy, namely solar energy.

At the manufacturing units, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water and using solar energy for street lighting.

Corporate Social Responsibility (CSR)

Your Company believes in the philosophy of giving back. Being in the pharmaceutical industry your Company’s primary focus is healthcare. Education, sanitation, protection of environment, general welfare and development are the other areas in which your Company concentrates its CSR activities. While the focus of CSR efforts will be in the areas around the Company’s locations, the Company may also undertake projects looking into other societal needs. The CSR policy is available on the website of the Company and the Annual Report on CSR activities, as required under Section 135 of the Act, is annexed as Annexure I to this Report. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.

During the year under review, the total amount to be spent on CSR was Rs.272.99 lakhs. The Company spent Rs.92.49 lakhs which is 0.67 % of the average profits, for the last three financial years. Balance amount of Rs.180.50 lakhs remained unspent.

The Company could not spend the balance amount since it is in the process of identifying appropriate CSR programs/projects in line with its CSR policy. Further, certain funds even though allocated to approved educational and health projects by the CSR Committee, were not disbursed since there was no requirement for these funds from the organizations/institutions during the year under review.

The Company plans to scale up its CSR activities in areas of education, health, environment protection, sanitation, general welfare and development activities in a structured manner to meet the objectives of its CSR policy in the coming years.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the Annual Report of the Top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report (“BRR”). Since your Company, does not feature in the Top 500 listed entities as per market capitalization as on March 31, 2018, the Business Responsibility Report for the financial year 20172018 does not form a part of the Annual Report.

Health and Safety

Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to the families of its employees. Periodic health check-ups are carried out for all employees and regular training programs are organized on safety and precautionary measures. Fire fighting training programs and first aid training camps are organized regularly to educate workers and employees at the plant locations and corporate office.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, Government agencies, shareholders, investors, suppliers, distributors, stockists, employees and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

Cautionary Statement

Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, cyclical demand and pricing in the Company’s principle markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

For and on behalf of the Board of Directors,

Dr. Prakash A. Mody

Mumbai Chairman & Managing Director

May 29, 2018 (DIN 0001285)

---

Mar 31, 2017

Dear Members,

The Directors take pleasure in presenting the 54th Annual Report on the business and operations of your Company for the financial year ended March 31, 2017.

Financial Highlights

The table below gives the financial highlights of the Company for the year ended March 31, 2017 on Standalone basis as compared to the previous financial year.

For the year ended (Rs. in lacs)

Particulars	March 31, 2017	March 31, 2016
Sales / Income from operations (Including Excise Duty)	1,41,385.22	1,23,614.52
Other Income	1,273.54	2,270.87
Total Income	1,42,658.76	1,25,885.39
Profit before Tax and Exceptional items	13,159.69	12,770.44
Exceptional Items	-	353.00
Profit before tax	13,159.69	12,417.44
Tax expenses (including deferred Tax and short/excess provision	2,772.97	2,368.97
pertaining to previous years)
Profit after Tax and Exceptional items	10,386.72	10,048.47
Total Comprehensive Income	10,263.19	10,060.04

Note: Previous year’s figures have been re-grouped/re-classified wherever necessary.

Review of Operations

During the year under review, Standalone Sales/Income from operations (Gross) increased to Rs.1,41,385.22 lacs from Rs.1,23,614.52 lacs in 2015-2016, registering a growth of 14.40%. Consolidated Sales/Income from Operations (Gross) stood at Rs.1,53,549.61 lacs in 2016-2017 as compared to Rs.1,34,828.00 lacs in 2015-2016, registering an increase of 13.90%.

Appropriations

An amount of Rs.84,336.37 lacs is proposed to be carried forward in the Profit & Loss Account. During the year under review, no amount was transferred to General Reserve.

Dividend

The Board has recommended a dividend of Rs.3/- (150 %) per equity share of Rs.2/- each for the year ended March 31, 2017 for the approval of the Shareholders at the ensuing Annual General Meeting (AGM). The Register of Members and Share Transfer Books shall remain closed from Monday, July 17, 2017 to Saturday, July 22, 2017 (both days inclusive) for the purpose of AGM and dividend, if approved by the Shareholders. The AGM of the Company is scheduled for Saturday, July 22, 2017.

Employees Stock Option Scheme

During the year under review, 7,07,776 options having a face value of Rs.2/- each were exercised and the same were allotted (on pari passu basis) under the Employees Stock Option Scheme - 2008. Details of the Employees Stock Option Scheme - 2008 are set out as Annexure A to this Report.

Research and Development (R&D)

Kindly refer to the write up in the section, Management Discussion and Analysis.

Management Discussion and Analysis

A detailed review on the operations and performance of the Company is given in the Management Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), forms part of this Annual Report. The Auditors’ Certificate on compliance with the conditions of Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements together with the Report of the Auditors’ thereon forms part of this Annual Report.

Review of Subsidiaries and Associates

Your Company has 5 (five) Subsidiaries and one Associate Company. Financials of the Subsidiaries and Associate Company are disclosed in the Consolidated Financial Statements, which form part of this Annual Report.

A statement containing salient features of the Financial Statements of the Subsidiaries and Associate Company, pursuant to Section 129 of the Companies Act, 2013 (the Act), and Rules made there under, is annexed to this Report as Annexure B in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Synchron Research Services Private Limited (Synchron) is an Associate Company in terms of Section 2 (6) of the Act. Synchron is a leading contract research organization in India which offers competitive and high quality clinical trial services to domestic and international pharmaceutical and bio-pharmaceutical companies. Your Company avails such services from Synchron from time to time.

On internal assessment of long term strategic investments made by the Company in its Wholly Owned Subsidiary, Unichem Farmaceutica Do Brazil Ltda., considering its past performance, results, assets, expected cash flows, projections and having confidence in the business model and strategy of the said Subsidiary achieving its goals given favourable business opportunities, the management has determined an amount of Rs.2,690.78 lacs as diminution for the year (previous year Rs.2,277.63 lacs). This has resulted in an aggregate impairment loss of Rs.6,272.19 lacs (previous year Rs.3,581.41lacs) on total investment of Rs.6,272.19 lacs made therein.

Particulars of Loans, Guarantees and Investments

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

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Risk Management

The Company has formulated a policy on Risk Management. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. A risk register is prepared for identification of risk and formulating mitigation plans.

Credit Rating

ICRA has re-affirmed your Company’s A1 rating for short-term debt (including Commercial Paper) Programme of Rs.1,500 lacs. The rating indicates strong degree of safety regarding timely payment of financial obligations.

Directors and Key Managerial Personnel

All the Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and the Listing Regulations.

Dr. Prakash A. Mody retires by rotation at the ensuing AGM in terms of the provisions of Section 152 of the Act. The Act provides that Independent Directors are not subject to retirement by rotation and two thirds of the remaining Directors shall be subject to retirement by rotation. Since all the Directors except Dr. Mody are Independent Directors, Dr. Mody will retire by rotation and being eligible offers himself for re-appointment.

Dr. Mody is the Chairman & Managing Director of the Company. Upon his re-appointment as a Director, he shall continue to hold office as the Chairman & Managing Director of the Company.

Attention of the Members is invited to the relevant item in the Notice of the AGM seeking your approval to the aforesaid re-appointment. The information required under Regulation 36 of the Listing Regulations is provided in the Notice of the 54th AGM and the statement annexed thereto.

Dr. (Mrs.) B. Kinnera Murthy’s first term as an Independent Director of the Company will expire on March 20, 2018. Based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors it is proposed to re-appoint Dr. (Mrs.) B. Kinnera Murthy as an Independent Director, for a second term of 5 (five) years w.e.f. March 21, 2018. Due notice under Section 160 of the Act has been received from a Member of the Company proposing the appointment of Dr. (Mrs.) B. Kinnera Murthy as an Independent Director of the Company at this AGM.

Appropriate Resolution(s) seeking your approval to the appointment/ re-appointment of Directors forms part of the Notice convening the 54th AGM and the same are recommended for your consideration and approval.

Dr. Prakash A. Mody, Chairman & Managing Director, Mr. Rakesh Parikh, Chief Finance & Compliance Officer and Ms. Neema Thakore, Head - Legal & Company Secretary were the Key Managerial Personnel during the financial year.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Act:

1. that in preparation of annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017, and profit for the year ended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that the internal financial controls were in place and that they were adequate and operating effectively; and

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

Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations, performance evaluation of the Board, it’s Committees, the Chairman & Managing Director and the Independent Directors was carried out. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board, on the recommendation of the Nomination and Remuneration Committee, has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are provided in the Corporate Governance Report.

Meetings

During the year, 5 (five) Board Meetings were held, the details of which are given in the Corporate Governance Report.

Audit Committee

The constitution of the Audit Committee, its scope, role and terms of reference are as per the provisions of the Act, the Rules made there under and the Listing Regulations. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Whistle Blower Policy

The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors and Employees can report genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company’s ‘Code of Business Conduct and Ethics’. The said Policy provides for adequate safeguards against victimization and also direct access to the Audit Committee. The e-mail id for reporting genuine concerns is [e-mail]

Significant and Material orders passed by the Regulators/Courts/Tribunals

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

However, the Board of Directors would like to inform that on July 9, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd., (Niche) contending that they have acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche have submitted appeals in September 2014, to the EU General Court seeking appropriate relief in the matter. Your Company has challenged this order and the proceedings are currently ongoing.

Material changes and commitment, if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

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

Related Party Transactions

During the year under review, approval of the Audit Committee and Board of Directors was sought for Related Party Transactions wherever required; including inter alia for increase in remuneration payable to Ms. Supriya Mody, daughter of Dr. Prakash A. Mody, Chairman & Managing Director of the Company up to a sum not exceeding Rs.65 lacs (Rupees Sixty Five Lacs Only) in a financial year starting from April 1, 2015, inclusive of perquisites (“Maximum Remuneration”).

The said transaction, not being an arm’s length transaction, but a transaction in the ordinary course of business was duly approved by the Shareholders at the AGM held on July 11, 2015.

The Audit Committee has given prior approval for all Related Party Transactions. The Policy on Related Party Transactions (Policy) as approved by the Board is uploaded on the Company’s website and the weblink is provided in the Corporate Governance Report. The Board of Directors of the Company has approved the criteria for omnibus approval of Related Party Transactions by the Audit Committee within the overall framework of the Policy.

The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Act are provided, in the prescribed Form AOC - 2 annexed as Annexure C to this Report.

Except to the extent of the shares held in the Company and the remuneration if any, drawn from the Company, none of the Directors and Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Disclosure under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the workplace. All women employees (permanent, temporary, contractual and trainees) are covered under this Policy. The Company has not received any complaints during the year under review.

Auditors

B. D. Jokhakar & Co. (Firm Registration No. 104345W), were appointed as Statutory Auditors of the Company to hold office from the conclusion of the 51st AGM to the conclusion of the 54th AGM, (subject to ratification of the appointment by the Members at every AGM held after the 51st AGM).

As per the provisions of the Act, no listed company shall appoint an audit firm (including its affiliate firms) as auditors for more than 2 (two) terms of 5 (five) consecutive years. The Act also provided for an additional transition period of 3 (three) years from the commencement of the Act i.e. April 1, 2014.

B. D. Jokhakar & Co., have completed the period of 10 (ten) years and will also be completing the additional transition period of 3 (three) years at the conclusion of the forthcoming AGM.

Accordingly, the term of the present Auditors, B. D. Jokhakar & Co., expires at the conclusion of the forthcoming AGM. The Audit Committee and the Board of Directors place on record their appreciation for the professional services rendered by B. D. Jokhakar & Co., during their association with the Company as its Auditors.

Pursuant to Section 139 of the Act, and on the recommendation of the Audit Committee, it is now proposed to appoint, N. A. Shah Associates LLP, Chartered Accountants (Firm Registration No. 116560W/W100149), as Statutory Auditors of the Company for a term of 5 (five) years from the conclusion of the 54th AGM (subject to ratification of such appointment by the Members at every AGM) till the conclusion of the 59th AGM at such remuneration as may be determined by the Board of Directors and the said Auditors from time to time.

The said Auditors have confirmed their eligibility for appointment in terms of Section 139 of the Act.

During the year under review, the retiring Auditors have not reported any matter under Section 143 (12) of the Act and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

A Resolution seeking the appointment of N. A. Shah Associates LLP, forms part of the Notice convening the 54th AGM and the same is recommended for your consideration and approval.

Cost Auditors

The Board of Directors at its Meeting held on May 30, 2017, based on the recommendation of the Audit Committee, appointed Y. R. Doshi & Co., (Firm Registration No. 000003) Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit of the Cost Accounting Records maintained by the Company for the financial year 2017-2018 at a remuneration not exceeding Rs.7.50 lacs (Rupees Seven Lacs Fifty Thousand Only) plus applicable taxes and out of pocket expenses at actuals. The said Auditors have confirmed their eligibility for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors is required to be placed before the Members at the ensuing AGM for ratification and a suitable Resolution has been set out in the Notice of the 54th AGM. The Cost Audit Report for the year ended March 31, 2016 was filed with the Ministry of Corporate Affairs on August 17, 2016.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Rules made there under, the Company has appointed Alwyn Jay & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure D to this Report. There is no other qualification, reservation, adverse remark or disclaimer in the said Report except that National Stock Exchange of India Limited (NSE) had sought a clarification from the Company on delayed reporting of the proceedings of the 53rd AGM of the Company held on July 23, 2016. The Company had clarified to NSE that the proceedings filed with the Exchange on July 26, 2016, did not contain any material new information and was a mere reiteration of the facts already stated in the voting results of the 53rd AGM given within the stipulated time as required under Regulation 44 of the Listing Regulations. No action has been initiated by NSE against the Company.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

Internal control systems and their adequacy

Kindly refer to the write up in the section Management Discussion and Analysis.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 (3)(m) of the Act and Rules made there under are set out in Annexure E to this Report.

Dividend Distribution Policy

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy which forms part of this Annual Report as Annexure F and is also available on the Company’s website https://unichemlabs.com/policies-code-of-https://unichemlabs.com/policies-code-of-conduct/dividend-distribution-policy/

Extract of Annual Return

Form MGT-9 providing an extract of the Annual Return in terms of Section 92 of the Act and the Rules made there under, is annexed as Annexure G to this Report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, are annexed as Annexure H to this Report.

In terms of the provisions of Section 197(12) of the Act and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, containing details of employees remuneration forms part of this Report as Annexure K. However, as per the provisions of Sections 134 and 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars, which is available for inspection at the Registered Office of the Company as per details mentioned in the Notice of the 54th AGM. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Company’s Registered Office.

Human Resources and Employee Relations

Kindly refer to the write up in the section Management Discussion and Analysis.

Quality and Environment

Your Company’s mission envisages a strong sense of commitment to work by being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims at consistently providing products that meet customer needs as well as national and international regulatory requirements, as may be applicable. Your Company has been steadily raising the bar, setting higher goals for incremental performance and enlarging the scope of its initiatives. The environmental policy of your Company emphasizes at being a caring Company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

Various initiatives are taken at your Company''s manufacturing locations to reduce waste across the plants and reduce usage of paper by recycling waste paper. Training programs are organized from time to time to create environmental awareness amongst the employees. To conserve water, your Company has devised various water saving methods which are monitored on a day to day basis.

Your Company continues to strive for energy saving and conservation of natural resources. In all its Active Pharmaceutical Ingredient (API) Plants your Company has installed online effluent monitoring equipment which is connected to the system of the Central Pollution Control Board.

Your Company is in the process of commissioning advanced Effluent Treatment Systems to control the usage of polluted effluent which will improve quality of effluent discharge. Your Company has initiated a study to install a cleaner form of energy, namely solar energy.

At the manufacturing units, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water and using solar energy for street lighting.

Corporate Social Responsibility (CSR)

Your Company believes in the philosophy of giving back. Being in the pharmaceutical industry your Company’s primary focus is healthcare. Education and development of needy sections of the Society, especially the economically backward sections are the other areas in which your Company concentrates its CSR activities. While the focus of CSR efforts will be in the areas around the Company''s operations, your Company may also undertake project''s looking into other societal needs. The CSR policy is available on the website of the Company and the Annual Report on CSR activities, as required under Section 135 of the Act, is annexed as Annexure I to this Report. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.

During the year under review, the total amount to be spent on CSR was Rs.279.32 lacs. The Company spent Rs.122.20 lacs which is 0.87 % of the average profits, for the last three financial years. Balance amount of Rs.157.12 lacs remained unspent.

The Company could not spend the balance amount since it is in the process of identifying appropriate CSR programs/projects in line with its CSR policy. Further, certain funds even though allocated to approved educational and health projects by the CSR Committee, were not disbursed since there was no requirement for these funds from the organizations/institutions during the year under review.

The Company plans to scale up its CSR activities in areas of education, health, environment protection, sanitation, general welfare and development activities in a structured manner to meet the objectives of its CSR policy in the coming years.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the Annual Report of the top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report ("BRR").

Your Company, being one of such 500 listed entities, has included BRR, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.

The Business Responsibility Report forms part of this Annual Report and is annexed as Annexure J.

Health and Safety

Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to the families of its employees. Periodic health check-ups are carried out for all employees and regular training programs are organized on safety and precautionary measures. Fire fighting training programs and first aid training camps are organized regularly to educate workers and employees at the plant locations and corporate office.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, Government agencies, shareholders, investors, suppliers, distributors, stockiest, employees and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

Cautionary Statement

Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, cyclical demand and pricing in the Company’s principle markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

For and on behalf of the Board of Directors,

Dr. Prakash A. Mody

Mumbai Chairman & Managing Director

May 30, 2017 (DIN No.: 00001285)

---

Mar 31, 2016

Dear Members,

The Directors take pleasure in presenting the 53rd Annual Report on the business and operations of your Company for the financial year ended March 31,2016.

Financial Highlights

The table below gives the financial highlights of the Company on Standalone basis for the year ended March 31,2016 as compared to the previous financial year.

For the year ended (Rs. in lacs)

Particulars March 31, 2016 March 31, 2015

Sales / Income from operations (Net of Excise Duty) 1,22,241.14 1,09,098.46

Other Income 2,265.50 1,996.77

Total Income 1,24,506.64 1,11,095.23

Profit before Tax and Exceptional items 12,778.84 8,149.77

Exceptional Items 353.00 -

Profit before tax 12,425.84 8,149.77

Tax expenses (including deferred Tax and short/excess provision 2,368.97 1,710.05

pertaining to previous years)

Profit after Tax and Exceptional items 10,056.87 6,439.72

Note: Previous year''s figures have been re-grouped/re-classified wherever necessary.

Review of Operations

During the year under review, Stand alone Sales/Income from operations (Net) increased to Rs. 1,22,241.14 lacs from Rs.1,09,098.46 lacs in 2014-2015, registering a growth of 12.05%. Consolidated Sales/Income from Operations (Net) stood at Rs. 1,33,456.38 lacs in 2015-2016 as compared to Rs. 1,20,179.34 lacs for the year ended March 31,2015, registering an increase of 11.05%.

Appropriations

An amount of Rs. 74,071.11 lacs is proposed to be carried forward in the Profit & Loss Account. During the year under review, no amount was transferred to General Reserve.

Dividend

The Board of Directors at its Meeting held on March 9, 2016 declared an Interim Dividend of Rs. 2/-(100%) per equity share of Rs. 2/- each. The Dividend was paid to the shareholders on March 28, 2016. The said Interim Dividend has been confirmed by the Board as Final Dividend for the financial year ended March 31,2016.

Employees Stock Option Scheme

During the year under review, 6,74,451 options having a face value of Rs. 2/- were exercised and the same were allotted (on pari passu basis) under the Employees Stock Option Scheme - 2008. Details of the Employees Stock Option Scheme - 2008 are set out as Annexure A to this Report.

Research and Development (R&D)

Kindly refer to the write up in the section, Management Discussion and Analysis.

Management Discussion and Analysis

A detailed review on the operations and performance of the Company is given in the Management Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), forms part of this Annual Report. The Auditors'' Certificate on compliance with the conditions of Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

Consolidated Financial Statements

In accordance with the Accounting Standards AS - 21 on Consolidated Financial Statements, and the Listing Regulations, your Directors provide the Audited Consolidated Financial Statements in the Annual Report.

Review of Subsidiaries and Associates

Your Company has five Subsidiaries and one Associate Company. Financials of the Subsidiaries and Associate Company are disclosed in the Consolidated Financial Statements, which form part of this Annual Report.

A statement containing salient features of the Financial Statements of the Subsidiaries and Associate Company, pursuant to Section 129 of the Companies Act, 2013 and Rules made thereunder is annexed to this Report as Annexure B in the prescribed Form AOC -1 and hence not repeated here for the sake of brevity.

Synchron Research Services Private Limited (Synchron) is an Associate Company in terms of Section 2 (6) of the Companies Act, 2013. Synchron is a leading contract research organization in India which offers competitive and high quality clinical trial services to domestic and international pharmaceutical and bio-pharmaceutical companies. Your Company avails such services from Synchron from time to time, on competitive terms.

On internal assessment of long term strategic investments made by the Company in its Wholly Owned Subsidiary, Unichem Farmaceutica Do Brazil Ltda., considering its past performance, results, assets, expected cash flows, projections and having confidence in the business model and strategy of the said Subsidiary achieving its goals given favourable business opportunities, the management has determined an amount of Rs. 2,277.63 lacs as diminution for the year (previous year Rs. 434.55 lacs) taking the accumulated provision to Rs. 3,581.41 lacs (previous year : Rs. 1,303.77 lacs) on total investment ofRs. 5,695.88 lacs made therein and the same is considered adequate by the Board of Directors as at the balance sheet date.

Particulars of Loans, Guarantees and 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.

Deposits

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

Risk Management

The Company has formulated a policy on Risk Management. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. A risk register is prepared for identification of risk and formulating mitigating plans.

Credit Rating

ICRA has re-affirmed your Company''s A1 rating for short- term debt (including Commercial Paper) Programme of Rs. 1,500 lacs. The rating indicates strong degree of safety regarding timely payment of financial obligations.

Directors and Key Managerial Personnel

At the Annual General Meeting of the Company held on July 11, 2015, theshareholders approved the appointment of Dr. (Mrs.) B. KinneraMurthy as an I ndependent Director to hold office for a period of three (3) consecutive years upto March 20,2018.

All the Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and the Listing Regulations.

Dr. Prakash A. Mody retires by rotation at the ensuing Annual General Meeting in terms of the provisions of Section 152 of the Companies Act, 2013 (the Act). The Act provides that Independent Directors are not subject to retirement by rotation and two thirds of the remaining Directors shall be subject to retirement by rotation. Since all the Directors except Dr. Mody are Independent Directors, Dr. Mody will retire by rotation and being eligible offers himself for re-appointment.

Dr. Mody is the Chairman & Managing Director of the Company. Upon his re-appointment as a Director, he shall continue to hold office as the Chairman & Managing Director of the Company.

Attention of the Members is invited to the relevant item in the Notice of the Annual General Meeting seeking your approval to the aforesaid re-appointment. The information required under Regulation 36 of the Listing Regulations is provided in the Notice of the 53rd Annual General Meeting and the statement annexed thereto.

Dr. Prakash A. Mody, Chairman & Managing Director, Mr. Rakesh Parikh, Chief Finance & Compliance Officer and Mrs. Neema Thakore, Head - Legal & Company Secretary were the Key Managerial Personnel during the financial year.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013, (the Act):

1. that in preparation of annual accounts for the year ended March 31, 2016, the applicable accounting standards have been followed and no material departures, have been made from the same;

2. that such accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and profit for the year ended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts have been prepared on a going concern basis;

5. that the internal financial controls were in place and that they were adequate and operating effectively and;

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

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, performance evaluation of the Board, it''s Committees, the Chairman & Managing Director and the Independent Directors was carried out. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are provided in the Corporate Governance Report.

Meetings

During the year, 5 (five) Board Meetings were held, the details of which are given in the Corporate Governance Report.

Audit Committee

The constitution of the Audit Committee, its scope, role and terms of reference are as per the provisions of the Companies Act, 2013, the Rules made thereunder and the Listing Regulations. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Whistle Blower Policy

The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors and Employees can report their genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company''s ''Code of Business Conduct and Ethics''. The said Policy provides for adequate safeguards against victimization and also direct access to the Audit Committee. The e-mail id for reportinggenuine concerns is [e-mail] Significantand Material orders passed by the Regulators/Courts/Tribunals No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the Company''s going concern status and its operations in the future.

However the Board of Directors would like to inform that on July 9, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd., (Niche) contending that they have acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche have submitted appeals in September 2014, to the EU General Court seeking appropriate relief in the matter.Your Company has challenged this order and the proceedings are currently ongoing.

Material changes and commitment, if any, affecting the financial position of the Company from the end of the financial year till the date of this Report

There have been no material changes and commitments, if any 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.

Related Party Transactions

All Related Party Transactions entered during thefinancial year under review were in the ordinary course of business and on arm''s length basis, except for increase in remuneration payable to Ms. Supriya Mody, daughter of Dr. Prakash A. Mody, Chairman & Managing Director of the Company upto a sum not exceeding Rs. 65 lacs (Rupees Sixty Five Lacs Only) in a financial year starting from April 1, 2015 inclusive of perquisites ("Maximum Remuneration"). The said transaction, not being an arm''s length transaction, but a transaction in the ordinary course of business was duly approved by the shareholders at the Annual General Meeting held on July 11,2015.

All other Related Party Transactions that were entered into during the year under review were on an arm''s length basis and in the ordinary course of business. The Audit Committee has given prior approval for Related Party Transactions. The Policy on Related Party Transactions (Policy) as approved by the Board is uploaded on the Company''s website and the weblink is provided in the Corporate Governance Report. The Board of Directors of the Company has approved the criteria for omnibus approval of Related Party Transactions by the Audit Committee within the overall framework of the Policy.

Details of Related Party Transactions not on arm''s length basis but in the ordinary course of business for which prior approval of the Audit Committee and shareholders'' approval has been sought and details of Material Related Party Transactions which are on arm''s length basis and in the ordinary course of business entered during the financial year under review as required under Section 134(3)(h) of the Companies Act, 2013 are annexed as Annexure C in the prescribed format, Form AOC 2, forming an integral part of this Report.

Except to the extent of the shares held in the Company and the remuneration if any, drawn from the Company none of the Directors and the Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Disclosure under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this Policy. The Company has not received any complaints during the year under review.

Auditors

B. D. Jokhakar & Co., were appointed as Statutory Auditors to hold office from the conclusion of the 51 st Annual General Meeting (AGM) to the conclusion of the fourth consecutive AGM, (subject to ratification of the appointment by the Members at every AGM held after the 51st AGM). A proposal for ratification of the appointment of the Statutory Auditors for the financial year 2016-2017 is placed before the Members at the ensuing AGM. The said Auditors have confirmed their eligibility for appointment in terms of Section 139 of the Companies Act, 2013.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013 and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

A Resolution seeking ratification of their appointment, forms part of the Notice convening the 53rd Annual General Meeting and the same is recommended for your consideration and approval.

Cost Auditors

The Board of Directors at its Meeting held on May 20, 2016, based on the recommendation of the Audit Committee, appointed Y. R. Doshi & Co., (Firm Registration No. 000003) Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit of the Cost Accounting Records maintained by the Company for the financial year 2016-2017 at a remuneration not exceeding Rs. 6.50 lacs (Rupees Six Lacs Fifty Thousand Only) plus service tax as may be applicable and out of pocket expenses at actuals. The said Auditors have confirmed their eligibility for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors is required to be placed before the Members at the ensuing Annual General Meeting for ratification and a suitable Resolution has been set out in the Notice of the 53rd Annual General Meeting of your Company. The Cost Audit Report for the year ended March 31, 2015 was filed with the Ministry of Corporate Affairs on September 29,2015.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company has appointed Alwyn Jay & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure D to this Report. There is no qualification, reservation, adverse remark or disclaimer in the said Report. During the year under review, theSecretarial Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no details are disclosed under Section 134 (3)(ca) of the Act.

Internal control systems and their adequacy

Kindly refer to the write up in the section Management Discussion and Analysis.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134 (3)(m) of the Companies Act, 2013 and Rules made thereunder are set out in Annexure E to this Report.

Extract of Annual Return

Form MGT-9 providing an extract of the Annual Return in terms of Section 92 of the Companies Act, 2013 and the Rules made thereunder is annexed as Annexure F to this Report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as Annexure G to this Report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars, which is available for inspection at the Registered Office of the Company as per details mentioned in the Notice of the 53rd Annual General Meeting on any working day of the Company upto the date of the 53rd Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Company''s Registered Office.

Human Resources and Employee Relations

Kindly refer to the write up in the section Management Discussion and Analysis.

Quality and Environment

Your Company''s mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims at consistently providing products that meet customer needs as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for incremental performance and enlarging the scope of its initiatives. The environmental policy of your Company emphasizes at being a caring company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

With a view to meet this challenge, our manufacturing facilities plant trees and saplings in the Company premises. Our employees spread awareness amongst the locals about planting more trees and making less use of plastic bags. Similarly, various initiatives are taken at our manufacturing locations to reduce waste across the plants and reduce usage of paper by recycling waste paper. Training programmes are organised from time to time to create environmental awareness amongst the employees. To conserve water, the Company has devised various water saving methods which are monitored on day to day basis.

Your Company continues to strive for energy saving and conservation of natural resources. In some of our Active Pharmaceutical Ingredients (API) Plants your Company has installed online effluent monitoring equipment which is connected to the system of the Central Pollution Control Board.

At the manufacturing units, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water and using solar energy for street lighting.

Corporate Social Responsibility (CSR)

Your Company believes in the philosophy of giving back. Being in the pharmaceutical industry your Company''s primary focus is healthcare. Education and development of needy sections of the Society especially the economically backward section are the other areas in which your Company concentrates its CSR activities. While the focus of CSR efforts will be in the areas around Company operations, the Company may also undertake projects looking into other societal needs. The CSR policy is available on the website of the Company and the Annual Report on CSR activities, as required under Section 135 of the Companies Act, 2013, is annexed as Annexure H to this Report. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013.

During the year under review the total amount to be spent was Rs. 291.33 lacs. The Company spent Rs. 253 lacs on CSR which is 1.74% of the average profits, for the last three financial years. Balance amount of Rs. 38.33 lacs remained unspent.

The Company has plans to scale up its CSR activities in areas of education and health in a structured manner to meet the objectives of its CSR Policy in the coming years. Further certain funds even though allocated to approved educational projects by the CSR committee, were not disbursed since there was no requirement for these funds from the organizations/institutions during the year under review.

Health and Safety

Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health check ups are carried out for all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programmes and first aid training camps are organised regularly to educate workers and employees at the plant locations and corporate office.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, Government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

Cautionary Statement

Statements in this Directors'' Report and Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference

to the Company''s operations include raw material availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

For and on behalf of the Board of Directors,

Mumbai Dr. Prakash A. Mody

May 20, 2016 Chairman & Managing Director

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 52nd Annual Report on the business and operations of the Company for the Financial Year ended March 31, 2015.

Financial Highlights

The table given below gives the financial highlights of the Company on Standalone basis for the year ended March 31, 2015 as compared to the previous Financial Year .

For the year ended (Rs. in lacs) Particulars March 31, 2015 March 31, 2014

Sales / Income from operations (Net of Excise Duty) 1,09,098.46 1,04,417.50

Other Income 1,996.77 4,283.91

Total Income 1,11,095.23 1,08,701.41

Profit before Tax and Exceptional items 8,149.77 17,882.38

Tax expenses (including deferred Tax & short/excess

provision pertaining to previous years) 1,710.05 4,300.11

Profit after Tax and before Exceptional items 6,439.72 13,582.27

Exceptional items - 4,114.55

Profit after Tax and Exceptional items 6,439.72 17,696.82

Note: Previous year’s figures have been re-grouped/re-classified wherever necessary.

Review of Operations

During the year under review, Standalone Sales/Income from operations (Net) increased to Rs. 109,098.46 lacs from Rs. 104,417.50 lacs in 2013-2014, registering a growth of 4.48%. Consolidated Sales/Income from Operations (Net) stood at Rs. 120,179.34 lacs in 2014-2015 as compared to Rs. 113,344.79 lacs for the year ended March 31, 2014, registering an increase of 6.03%.

Appropriations

An amount of Rs. 66,200.97 lacs is proposed to be carried forward in the Profit & Loss Account. During the year under review, no amount was transferred to General Reserve.

Dividend

The Board has recommended a dividend of Rs. 2/- (100%) per equity share of Rs. 2/- each for the approval of the shareholders at the ensuing Annual General Meeting (AGM) for the year ended March 31, 2015. The Register of Members and Share Transfer Books shall remain closed from July 6, 2015 to July 11, 2015 (both days inclusive) for the purpose of AGM and dividend, if approved by the shareholders. The AGM of the Company is scheduled for July 11, 2015.

Employees’ Stock Options Scheme

During the year under review, 141,399 options having a face value of Rs. 2/- each were exercised and the same were allotted (on pari passu basis) under the Employees’ Stock Options Scheme – 2008. Details of the Employees’ Stock Options Scheme – 2008, are set out as Annexure A to this Report.

Research and Development (R&D)

Kindly refer to the write up in the section Management Discussion and Analysis.

Management Discussion and Analysis

A detailed review on the operations and performance of the Company and its business is given in the Management Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance forms part of this Annual Report. The Auditors’ Certificate on compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

Consolidated Financial Statements

In accordance with the Accounting Standards AS – 21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements in the Annual Report.

Review of Subsidiaries and Associates

Your Company has five Subsidiaries and one Associate Company. Financials of the Subsidiaries and Associate Company are disclosed in the Consolidated Financial Statements, which form part of this Annual Report. A statement containing salient features of the Financial Statements of the Subsidiaries and Associate Company, is annexed to this Report as Annexure ‘B’ pursuant to Section 129 of the Companies Act, 2013 and Rules made thereunder in the prescribed Form, AOC -1 and hence not repeated here for the sake of brevity.

During the year, Synchron Research Services Private Limited (Synchron) became an Associate in terms of Section 2(6) of the Companies Act, 2013. Synchron is a leading contract research organization in India which offers competitive and high quality clinical trial services to domestic and international pharmaceutical and bio- pharmaceutical companies. Your Company avails such services from Synchron from time to time .

European Commission matter

On July 9, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Limited, (Niche) contending that they have acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche have submitted appeals in September 2014, to the EU General Court seeking appropriate relief in the matter.

Directors'' Responsibility Statement

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

1. in preparation of annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and profit for the year ended on that date;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. they have prepared the annual accounts on a going concern basis;

5. they have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively and

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

Particulars of Loans, Guarantees and 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.

Deposits

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

Risk Management

The Company has formulated a policy on Risk Management and constituted a Risk Management Committee and the same is detailed in the Corporate Governance Report. Risks are classified in different categories such as Financial, Operational, Legal and Strategic risks. These risks are reviewed from time to time and controls are put in place with specific responsibility of the concerned officer of the Company.

Credit Rating

ICRA has reaffirmed your Company’s A1 rating for short-term debt (including Commercial Paper) Programme of Rs. 1500 lacs. The rating indicates strong degree of safety regarding timely payment of financial obligations.

Directors

The Board of Directors had on the recommendation of the Nomination and Remuneration Committee appointed Dr. (Mrs.) B. Kinnera Murthy as an Additional Director of the Company in the category of Independent Directors with effect from March 21, 2015 to hold office upto the ensuing Annual General Meeting. It is now proposed to appoint her as an Independent Director of the Company for a period of three consecutive years upto March 20, 2018.

During the year under review Mr. Nasser Munjee, resigned as a Director of the Company with effect from September 26, 2014, since the revised Clause 49 of the Listing Agreement (effective from October 1, 2014), places restrictions on the number of directorships that an individual can hold as Independent Director in listed Companies. The Board places on record its deep appreciation of the services rendered by Mr. Nasser Munjee during his tenure as a Director.

All the Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Dr Prakash A Mody retires by rotation at the ensuing Annual General Meeting in terms of the provisions of Section 152 of the Companies Act, 2013 ("The Act"). The Act provides that Independent Directors are not subject to retirement by rotation. Since all the Directors except Dr. Mody are Independent Directors, Dr. Mody will retire by rotation and being eligible offers himself for re-appointment. Dr. Mody is the Chairman and Managing Director of the Company. As per the clarification issued by the Department of Company Affairs (Int. Circular No. 3(No.8/16(1)/61-PR, dated 9th May 1961) in relation to appointment of Managing Director: "a MD’s office as a MD does not suffer any break if he retires as a Director under Section 255 of the erstwhile Companies Act, 1956 and is re-elected as Director in the same meeting."

Upon his re-appointment as a Director, Dr. Prakash A. Mody shall continue to hold office as the Chairman and Managing Director of the Company.

Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting seeking your approval to the aforesaid appointments. The information required under Clause 49 of the Listing Agreement is provided in the Notice of the 52nd Annual General Meeting and the Statement annexed thereto.

Mr. K. Subharaman, Vice President (Legal & Company Secretary) resigned from the Company and Mrs. Neema Thakore is appointed as Head - Legal & Company Secretary with effect from May 15, 2015.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, performance evaluation of the Board, it’s Committees and the Independent Directors was carried out. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee has adopted the policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this policy are provided in the Corporate Governance Report.

Meetings

During the year five board meetings were held, the details of which are given in the Corporate Governance Report.

Whistle Blower Policy

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The same is explained in the Corporate Governance Report. The details of establishment of the reporting mechanism are disclosed on the website of the Company. No person has been denied access to the Audit Committee.

Related Party Transactions

All Related Party Transactions that were entered into during the year under review were on an arm’s length basis and in the ordinary course of business. The Audit Committee has given prior approval for the Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and the weblink is provided in the Corporate Governance Report.

Disclosure under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The Company has not received any complaints during the year.

Auditors

B. D. Jokhakar & Co., were appointed as Statutory Auditors to hold office from the conclusion of the 51st Annual General Meeting (AGM) to the conclusion of the fourth consecutive AGM, (subject to ratification of the appointment by the members at every AGM held after the 51st AGM). A proposal for ratification of the appointment of the Statutory Auditors for the Financial Year 2015-2016 is placed before the Members at the ensuing AGM. The said Auditors have given their eligibility certificate in terms of Section 139 of the Companies Act, 2013.

Cost Auditors

The Board of Directors at its meeting held on May 9, 2015, based on the recommendation of the Audit Committee, appointed Y. R. Doshi & Co., (Firm Registration No. 000003) Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit of the Cost Records maintained by the Company for the Financial Year 2015-2016 at a remuneration of Rs. 5.50 lacs (Rupees Five Lacs Fifty Thousand Only) plus service tax as may be applicable and out of pocket expenses at actuals. The said Auditors have given their eligibility certificate for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors needs to be ratified by the Shareholders at the ensuing Annual General Meeting. The Cost Audit Report for the year ended March 31, 2014 was filed with the Ministry of Corporate Affairs on September 24, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under, the Company has appointed Alwyn Jay & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure C to this Report.

Internal control systems and their adequacy

Kindly refer to the write-up in the section Management Discussion and Analysis.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 and Rules made thereunder are set out in Annexure D to this Report.

Extract of Annual Return

Form MGT-9 providing an extract of the Annual Return in terms of Section 92 of the Companies Act, 2013 and the Rules made thereunder is annexed as Annexure E to this Report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Companies Act, 2013 and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules is annexed as Annexure H to this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as Annexure F to this Report.

Human Resources and Employee Relations

Kindly refer to the write-up in the section Management Discussion and Analysis.

Quality and Environment

Your Company’s mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims to consistently provide products that meet customer as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for environmental performance and enlarging the scope of initiatives. The environmental policy of your Company emphasizes at being a caring company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

With a view to meet this challenge, our manufacturing facilities, plant trees and saplings in the Company premises. Our employees spread awareness amongst the locals about planting more trees and making less use of plastic bags. Similarly, various initiatives are taken at our manufacturing locations to reduce waste production across the plant and reduce usage of paper by recycling waste paper. Training programmes are organised from time to time to create environmental awareness amongst the employees. To conserve water, the Company has devised various water saving methods which are monitored on a day-to-day basis.

Your Company continues to strive for energy saving and conservation of natural resources. At our units, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water and using solar energy for street lighting.

Corporate Social Responsibility(CSR)

Unichem being a pharmaceutical company, is naturally inclined to improve the health of the general public at large and the Company is well known for its Quality and Reliability for over six decades. The present CSR initiatives focus on two main recognized activities mentioned in Schedule VII of the Companies Act, 2013, namely promoting education and promoting preventive health care particularly for scheduled tribes. The CSR policy is available on the website of the Company and the Annual Report on Corporate Social Responsibility (CSR) activities as required under Section 135 of the Companies Act, 2013 is annexed as Annexure G to this Report. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013.

During the year under review, the Company spent Rs. 241.75 lacs on CSR which is 1.57 % of the average profits, for the last three Financial Years.

The Company could not spend up to 2 % of the net profits as stipulated in the Companies Act, 2013 as the Company’s profits/ earnings were lesser than the previous Financial Year.

Health and Safety

Health and Safety issues are addressed systematically, effectively and proactively. Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health checkups are carried out for all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programmes and first-aid training camps are organised regularly to educate workers and employees at our plant locations and corporate office.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by the medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

For and on behalf of the Board of Directors, Mumbai Dr. Prakash A. Mody May 9, 2015 Chairman & Managing Director

---

Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 50th Annual Report on the business and operations of the Company for the financial year ended March 31, 2013.

Financial Highlights

The table given below gives the financial highlights of the Company on Standalone basis for the year ended March 31, 2013 as compared to the previous financial year.

For the year ended March 31

(Rs. in Lacs)

Particulars 2013 2012

Sales/ Income from operations (Net of Excise Duty) 1,00,521.69 80,318.73

Other Income 1,406.70 939.47

Total Income 1,01,928.39 81,258.20

Profit before tax 16,244.63 10,523.55

Tax Expenses (Including deferred tax & short/excess provision pertaining to previous years) 3,285.03 2,277.22

Profit for the period 12,959.60 8,246.33

Review of Operations

During the year under review, Sales/Income from operations (Net) increased to Rs. 1,00,521.69 Lacs in 2012-13 from Rs. 80,318.73 Lacs in 2011-12, registering a growth of 25.15%. Consolidated Sales/Income from operations (Net) stood at Rs. 1,08,080.28 Lacs as compared to Rs. 87,546.30 Lacs registering an increase of 23.45%.

Appropriations

Your Company has transferred Rs. 1,500 Lacs to the General Reserve during the year under review. An amount of Rs. 54,533.07 Lacs is proposed to be carried forward from the Profit & Loss Account.

Dividend

Your Board of Directors at their meeting held on May 11, 2013 recommended a dividend of Rs. 4.5 (225%) per equity share of Rs. 2/- each fully paid up. The register of members and share transfer books shall remain closed from July 15, 2013 to July 19, 2013, both days inclusive. The Annual General Meeting of the Company is scheduled for July 19, 2013.

Employee Stock Options Scheme

During the year under review, 1,34,937 options of Rs. 2/- were exercised and the same were allotted (on pari passu basis) under the Employees'' Stock Option Scheme - 2004 and Employees'' Stock Option Scheme - 2008.

Details of Employees'' Stock Option Schemes, as required to be disclosed under Clause 12 of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase) Guidelines, 1999 are set out in the Annexure I to this Report.

Management''s Discussion and Analysis

A detailed review on operations and performance of the Company and its business is given in the Management''s Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance forms part of this Annual Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors'' Certificate on compliance with Corporate Governance requirements by the Company is attached to the report on Corporate Governance.

Information for Shareholders

Additional information pertaining to shareholders like Equity History, Dividend Payment History, Shareholding pattern, etc. is provided in this Annual Report.

Consolidated Financial Statements

In accordance with the Accounting Standards AS - 21 on Consolidated Financial Statements, your Directors provide the audited Consolidated Financial Statements in the Annual Report.

Notes on Subsidiaries

Last year, your Company had incorporated a new subsidiary in Ireland taking the total number of subsidiaries to 5 (five) as on March 31, 2013. Your Directors believe that the Consolidated Financial Statements present a full and fair view of the state of affairs of your Company as a whole. In terms of general approval granted by the Central Government under Section 212(8) of Companies Act, 1956, financial statements pertaining to the subsidiaries have not been attached with the Balance Sheet of the Company. However, for the benefit of the members, we have published a summary of the financials of the subsidiaries in the Annual Report. The financial statements of subsidiaries, along-with related information and reports are available for inspection at the registered office of your Company.

Review of Subsidiaries

Niche Generics Limited

Niche Generics Limited is a wholly-owned subsidiary of your Company. It is engaged in manufacturing formulations and dossier filing in European markets. It recorded sales of GBP 107.68 Lacs for the year ended March 31, 2013 as compared to GBP 103.20 Lacs for the previous year ended March 31, 2012. The profit for the year ended March 31, 2013 stood at GBP 0.99 Lacs compared to the loss of GBP 1.90 lacs for the year ended March 31, 2012.

Unichem Pharmaceuticals (USA) Inc.

Unichem Pharmaceuticals (USA) Inc., a wholly-owned subsidiary of your Company in USA, has been set up for business development, filing of ANDA''s and exploring the opportunities for marketing alliances in North American markets. The subsidiary recorded sales of USD 82.48 Lacs for the year ended March 31, 2013 as compared to USD 52.13 Lacs for the previous year ended March 31, 2012 and incurred loss of USD 6.23 Lacs for the same period compared to the loss of USD 7.48 lacs for the year ended March 31, 2012.

Unichem Farmaceutica Do Brasil Ltda Unichem Farmaceutica Do Brasil Ltda., is a wholly- owned subsidiary of your Company in Brazil. This subsidiary has been set-up to own product registrations, launch generic and branded generics products in the Brazilian market. The subsidiary plans to have marketing alliances for promoting, warehousing and distribution. The entity suffered a loss of Brazilian Reals 29.61 Lacs in the current year as against Brazilian Reals 24.80 lacs during the previous year.

Unichem SA (Proprietary) Limited

Unichem SA (Proprietary) Limited is a wholly-owned subsidiary of your Company in South Africa. This subsidiary has been set-up for business development and to own product registrations. The subsidiary has suffered a marginal loss of SA Rand 72 in the current year as compared to loss of SA Rand 6,113 for the previous year ended March 31, 2012.

Unichem Laboratories Ltd. Ireland

Unichem Laboratories Ltd, Ireland is a wholly-owned subsidiary of your Company in Ireland. This subsidiary was incorporated last year under review for business development and to own product registrations. The subsidiary during the current year has suffered a loss of Euro 2.95 lacs as compared to loss of Euro 0.09 lacs for the previous year ended March 31, 2012.

Directors'' Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

1. in preparation of annual accounts for the year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgements 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 2012-13 and profit made by the Company for that period;

3. they have 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;

4. they have prepared the annual accounts on a going concern basis.

Credit Rating

ICRA has reaffirmed the A1 rating for short-term debt (including Commercial Paper) Programme of Rs. 1,500 Lacs. The rating indicates highest safety, the prospect of timely repayment of debt/obligation being the best.

Directors

The present term of Dr. Prakash A. Mody as Managing Director & Chairman will expire on June 30, 2013. At the meeting of the Board of Directors held on May 11, 2013, he was re-appointed as Chairman & Managing Director for a further term of 5 years with effect from July 1, 2013, subject to approval of Shareholders at ensuring Annual General Meeting which is to be held on July 19, 2013.

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Prafull Anubhai and Mr. Anand Mahajan retire by rotation at the ensuing Annual General Meeting. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting for seeking your approval for the aforesaid appointments. The information required under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the Annual General Meeting.

Auditors

The Statutory Auditors of the Company, M/s. B. D. Jokhakar & Co., retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. Your Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.They have confirmed their willingness to accept office, if reappointed. The Board and Audit Committee recommend the re-appointment of M/s. B.D. Jokhakar & Co. as Statutory Auditors of your Company for the financial year 2013-14.

Cost Auditors

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company''s Bulk Drugs and Formulations Division. The Board of Directors of your Company has re-appointed Mr. Y. R. Doshi, Cost Accountant, having membership no. 3286, as the Cost Auditor to audit the cost accounts relating to "Bulk Drugs" and "Formulations" for the financial year ending 2013-14. The due date for filing Cost Audit Reports of the financial year 2012-13 for your Company is 25th September, 2013 and the tentative date for filing these reports would be 24th September, 2013.

Energy, Research and Development, Technology Absorption, Foreign Exchange

The particulars as prescribed under Clause (e) of Sub- section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule, 1988 are set out in Annexure II to this Report.

Particulars of Employees

Particulars of employees, as required under 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However in pursuance of Section 219(1)(b)(iv) of the Act, this Annual Report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department at the Registered Office of the Company.

Human Resources & Employee Relations

Unichem propagates a philosophy where its human resource continues to be the key focus of its business. We have a talented HR pool of 4,592 employees as on April 2013. We endeavor to align our HR policies to meet our dynamic business needs.

The year 2012-13 has been a year of consolidation and streamlining of activities. We have realigned our business portfolio to have better business synergies. HR supported the initiative to ensure a smooth transition. This year the shift has been towards building a performance culture in the organization. The emphasis has been towards creating a culture that is challenging and rewarding to performers. Evolving and implementing robust processes have been at the core of all organizational initiatives.

Recruitment activities were on the upswing to strengthen the domestic pharma business. Regional recruitment drives provided the additional impetus of fortifying the field force.

Recognizing internal talent and providing them opportunities to excel in leadership roles has always been at the crux of our HR philosophy. This year too, assessments of internal talents and enhancing their capabilities through skill development programmes were undertaken.

In order to have a better focus on our research initiatives we have shifted our Chemical and Formulation Development (PTD) Research Centres to Goa where our new state of the art Centre of Excellence is located.

Employee engagement continued to be a focus and several initiatives across locations were carried out.

Quality and Environment

Your Company''s mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims to consistently provide products that meet customer as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for environmental performance and enlarging the scope of initiatives. The environmental policy of your Company emphasizes at being a caring company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

With a view to meet this objective, our manufacturing facility at Baddi celebrated Environment Day with great enthusiasm and our employees planted about 100 trees in the Company premises followed by a pledge ceremony wherein all our employees took a pledge to protect the environment. Pollution Prevention Day was celebrated and employees were made aware of the effects of pollution on the environment and on living beings. Our employees spread awareness amongst the locals about planting more trees and making less use of plastic bags.

Similarly, various initiatives were taken at our manufacturing facility at Roha like planting more than 100 saplings in the Company premises, reduce waste consumption across the plant by 5% and reduce usage of paper by recycling waste paper. Training programmes were organized from time to time to create environmental awareness amongst the employees.

To conserve water, the Company has devised various water saving methods which are monitored on day-to- day basis. In this direction, the Company has devised rain-harvesting system at its Ghaziabad and CoE, Goa manufacturing units.

Your Company continues to strive for energy saving and conservation of natural resources. At our unit, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water, using solar energy for street lighting and limiting the use of Hot water Generation System in the plant by utilizing heat recovery options in Chilling plant.

Corporate Social Responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company and its dedicated employees continue to contribute towards several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

As you are aware, Unichem has undertaken a project for Primary Health Centre in Village Take- Pathar, Shahpur Taluka, Dist. Thane in the name of Mr. Amrut Vithaldas Mody, founder of the Company, and the project is known as Adiwasi Unnati Mandal (AUM). AUM caters to medical needs of adiwasi population of Shahpur taluka of Thane district. AUM conducts regular Medical check-up, Dental check-up camps, Nutrition programmes, arranges distribution of free medicines and provides regular treatment to patients for TB, epilepsy and leprosy at the Centre with the help of dedicated team of doctors and volunteers who have been rendering selfless service. During the year 14,521 patients were treated at OPD camps held at various centres. Your Company donated Tata Sumo and Tata Winger during the year to AUM. This vehicle is utilised for transporting doctors and paramedical volunteers from Mumbai to Shahpur and back where major social activity of the AUM is carried out.

During the year 12 diagnostic camps were held at Taki, 7 at Panchghar and 1 camp at Pivli for cataract surgery and during the year 201 patients cataract surgery were successfully carried at "Bombay City Eye Institute and Research Centre, Babulnath". 540 needy people were provided with the spectacles and dark glasses were provided to patients who had undergone cataract surgery.

Besides Health care programmes AUM also conducts various activities like distribution of notebooks, compass boxes, shoes, books and other articles useful items to school children were distributed amongst more than 2000 students from 35 schools. Other Programmes like free distribution of medicines, bicycles for school girls, umbrellas, clothes and nutrition food were provided to needy people.

Our Company has volunteered to be the chief donor to Ahmedabad University School of Management which is promoted by Ahmedabad Education Society. During the year, the Company donated a sum of Rs. 2 Crores to the Management School. This donation is being given in the memory of founder of the Company, Late Mr. Amrut Vithaldas Mody, who was a pioneer in Indian Pharma Industry and a visionary Technocrat and who was instrumental in supporting and contributing via endowments to educational institutions during his lifetime. Ahmedabad University started Amrut Mody School of Management, the Post Graduate Institute of Management (PGIM). Our Company in this manner helped in shaping many lives in a small but significant way.

Bombay College of Pharmacy (BCP) is one of the premier pharmacy colleges in India, imparting quality pharmaceutical education & training for the last 50 years. BCP was founded in 1957 by the Indian Pharmaceutical Association- Maharashtra State Branch (IPA-MSB) with financial assistance from Government of Maharashtra and several pharmaceutical corporations including Unichem. Unichem contributed 1% of its issued capital to Bombay College of Pharmacy in the form of equity shares as endowment. This College is managed independently without any interference from Unichem.

Our Company is considering donating some of its analytical instruments to BCP and other pharmacy and technology colleges. Our Company has provided industry based training to several pharma and technical students over the years.

Green Initiative

The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in Corporate Governance" (Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011) allowing paperless compliances by Companies through electronic mode. Companies are now permitted to send various notices /documents to its shareholders through electronic mode to the registered email addresses of shareholders. This move by the Ministry is welcome since it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment.

Keeping in view the underlying theme and the circular issued by MCA, we have participated in Green Initiative and sent documents like General Meeting Notices (including AGM), Audited Financial Statements, Directors'' Report, Auditors'' Report etc. to the shareholders in the electronic form, to the e-mail addresses so provided by the shareholder and made available to us by the Depositories, NSDL & CDSL using data maintained by the Depository Participants (DP). Thus we sent Annual Report for the year 2011-12 electronically to more than 6,000 shareholders and contributed in saving paper. We intend to send the current Annual Report for the year 2012-13 to atleast 6,000 shareholders this year again through electronic media.

We have also taken green initiative for the purpose of postal ballot. We have offered e-voting facility along with physical voting for passing the resolution.

Health & Safety

Your Company assiduously endeavours to act in a responsible manner to avoid causing any harm to the health and for safety of its employees, contract personnel and visitors. Health and Safety issues are addressed systematically, effectively and proactively. Mock drills are conducted regularly for different emergency situations for enhancing effectiveness of response plan.

Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health checkups are carried out for all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programmes and first-aid training camps are organised regularly to educate workers and employees at our plant locations and corporate office. Our Pithampur plant officials have developed a Safety Park at the plant where various types of personal protective equipments, informative posters, fire extinguishers, etc are displayed for creating awareness towards safety among all employees.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

On behalf of the Board of Directors,

For Unichem Laboratories Limited

Dr. Prakash A. Mody

Chairman & Managing Director

Mumbai,

May 11, 2013

---

Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting the 49th Annual Report on the business and operations of the Company for the financial year ended March 31, 2012.

Financial Highlights

The table given below gives the financial highlights of the Company on Standalone basis for the year ended March 31,

(Rs. in Lacs)

Particulars 2012 2011

Sales/ Income from operations (Net of Excise Duty) 80,318.73 76,473.74

Other Income 939.47 796.22

Total Income 81,258.20 77,269.96

Profit before tax 10,523.55 14,017.99

Tax Expenses (Including deferred tax & short/excess provision pertaining to previous years) 2,277.22 3,168.21

Profit for the period 8,246.33 10,849.78

Review of Operations

During the year under review, Sales/Income from operations (Net) increased to Rs. 80,318.73 Lacs in 2011-12 from Rs. 76,473.74 Lacs in 2010-11, registering a growth of 5.0%. Consolidated Sales/Income from operations (Net) stood at Rs. 87,546.30 Lacs as compared to Rs. 82,403.81 Lacs registering an increase of 6.24%.

Appropriations

Your Company has transferred Rs. 1,500 Lacs to the General Reserve during the year under review. An amount of Rs. 47,836.52 Lacs is proposed to be carried forward from the Profit & Loss Account.

Dividend

Your Board of Directors at their meeting held on August 11, 2012 recommended Rs. 3 (150%) per equity share of Rs. 2/- each fully paid up. The register of members and share transfer books shall remain closed from September 17, 2012 to September 21, 2012, both days inclusive. The Annual General Meeting of the Company is scheduled for September 27, 2012.

Scheme of Arrangement

During the year under review, your Company made an application to the Hon'ble High Court of Judicature at Bombay for approval to a Scheme of Arrangement between AVM Capital Services Private Limited, Chevy Capital Services Private Limited, PM Capital Services Private Limited, Pranit Trading Private Limited and Viramrut Trading Private Limited and Unichem Laboratories Limited. The petition was approved by the Hon'ble High Court vide order dated July 12, 2012 and the Scheme has become effective as on August 6, 2012.

Employee Stock Options Scheme

During the year under review, 82,002 of Rs. 2/- options were exercised and equivalent numbers of equity shares were allotted (on pari passu basis) under the Employees' Stock Option Scheme 2008.

Details of Employees' Stock Option Schemes, as required to be disclosed under Clause 12 of the SEBI (Employees of Stock Option Scheme and Employees Stock Purchase) Guidelines, 1999 are set out in the Annexure I to this Report.

Management's Discussion and Analysis

A detailed review on operations and performance of the Company and its business is given in the Management's Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance forms part of this Annual Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors' Certificate on compliance with Corporate Governance requirements by the Company is attached to the report on Corporate Governance.

Information for Shareholders

Additional information pertaining to shareholders like Equity History, Dividend Payment History Shareholding pattern, etc. is provided in this Annual Report.

Consolidated Financial Statements

In accordance with the Accounting Standards AS 21 on Consolidated Financial Statements, your Directors provide the audited Consolidated Financial Statements in the Annual Report.

Notes on Subsidiaries

During the year, your Company incorporated a new subsidiary in Ireland taking the total number of subsidiaries to 5 (five) as on March 31, 2012. Your Directors believe that the Consolidated Financial Statements present a full and fair view of the state of affairs of your Company as a whole. In terms of general approval granted by the Central Government under Section 212(8) of Companies Act, 1956, financial statements pertaining to the subsidiaries have not been attached with the Balance Sheet of the Company. However, for the benefit of the members, we have published a summary of the financials of the subsidiaries in the Annual Report. The financial statements of subsidiaries, along-with related information and reports are available for inspection at the registered office of your Company.

Review of Subsidiaries

Niche Generics Limited

Niche Generics Limited is a wholly-owned subsidiary of your Company. It is engaged in manufacturing formulations and dossier filing in European markets. It recorded sales of GBP 103.2 Lacs for the year ended March 31, 2012 as compared to GBP 100.4 Lacs for the previous year ended March 31, 2011. The loss for the year ended March 31, 2012 stood at GBP 1.9 Lacs compared to the loss of GBP 7.9 Lacs for the year ended March 31, 2011.

Unichem Pharmaceuticals (USA) Inc. Unichem Pharmaceuticals (USA) Inc., a wholly-owned subsidiary of your Company in USA, has been set up for business development, filing of ANDAs and exploring the opportunities for marketing alliances in North American markets. The subsidiary recorded sales of USD 54.3 Lacs for the year ended March 31, 2012 and incurred loss of USD 7.5 Lacs for the same period compared to the loss of USD 9.2 Lacs for the year ended March 31, 2011.

Unichem Farmaceutica Do Brasil Ltda

Unichem Farmaceutica Do Brasil Ltda., is a wholly- owned subsidiary of your Company in Brazil. This subsidiary has been set-up to own product registrations, launch generic and branded generics products in the Brazilian market.

The subsidiary plans to have marketing alliances for promoting, warehousing and distribution. The entity suffered a loss of Brazilian Reals 24.8 Lacs in the current year as against Brazilian Reals 14.4 Lacs during the previous year.

Unichem SA (Proprietary) Limited

Unichem SA (Proprietary) Limited is a wholly-owned subsidiary of your Company in South Africa. This subsidiary has been set-up for business development and to own product registrations. The subsidiary has suffered a loss of SA Rand 6,113 in the current year.

Unichem Laboratories Ltd. Ireland

Unichem Laboratories Ltd, Ireland is a wholly-owned subsidiary of your Company in Ireland. This subsidiary was incorporated during the year under review for business development and to own product registrations. The subsidiary suffered a loss of Euro 8,512 during the year ended March 31, 2012.

Directors' Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

1. in preparation of annual accounts for the year have ended March 31, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgements 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 2011-12 and profit made by the Company for that period;

3. they have 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;

4. they have prepared the annual accounts on a going concern basis.

Credit Rating

ICRA has reaffirmed the A1 rating for short-term debt (including Commercial Paper) Programme of Rs. 1500 Lacs. The rating indicates highest safety, the prospect of timely repayment of debt/obligation being the best.

Directors

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Nasser Munjee and Mr. Prafull D. Sheth retire by rotation at the ensuing Annual General Meeting. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting for seeking their approval for the aforesaid appointments. The information required under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the Annual General Meeting.

Auditors

The Statutory Auditors of the Company, M/s. B. D. Jokhakar & Co., retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. Your Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.They have confirmed their willingness to accept office, if reappointed. The Board and Audit Committee recommend the re-appointment of M/s. B.D. Jokhakar & Co. as Statutory Auditors of your Company for the financial year 2012-13.

Cost Auditors

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company's Bulk Drugs and Formulations Division. The Board of Directors of your Company has re-appointed Mr. Y. R. Doshi, Cost Accountant, having membership no. 3286, as the Cost Auditor to audit the cost accounts relating to "Bulk Drugs" and "Formulations" for the financial year ending 2012-13. The due date for filing Cost Audit Reports of the financial year 2011-12 for your Company is 27th September, 2012 and the tentative date for filing these reports would be 24th September, 2012.

Energy, Research and Development, Technology Absorption, Foreign Exchange

The particulars as prescribed under Clause (e) of Sub- section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule, 1988 are set out in Annexure II to this Report.

Particulars of Employees

Particulars of employees, as required under 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However in pursuance of Section 219(1)(b)(iv) of the Act, this annual report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department situated at the Registered Office of the Company.

Human Resources & Employee Relations

Unichem employs over 4,000 employees who are vital to the growth of the Company. Several HR initiatives encompassing development and engagement of employees were conducted in the past financial year.

The Talent Associate Scheme has been launched at Corporate Office in a bid to provide an opportunity to employees to refer their known circle of people for an available requirement and thereby participate in the organization's growth by helping to place the right person in the right job.

Performance Enhancement & Development System (PEDs) is in place whereby the performance of the employees is appraised. As a part of the Talent Development Strategy, workshops were conducted for Management Development.

The attrition of employees and sales staff in sales divisions has been a matter of concern for the management. Your Company's HR & ER team has reviewed its selection and recruitment process and made it more robust. Introduction of new and multiple tools of assessment were introduced in the process. A capsule module of Initial Induction Training' was developed by our Sales Training Team. This module of training emphasized on the need for increased learning and skill building amongst other things before the sales staff went in the field.

Relations with employees across all the offices and manufacturing units continued to be cordial throughout the year. Your Directors place on record, their sincere appreciation of the significant contribution made by the employees at all levels through their dedication, hard work and commitment.

Quality and Environment

Your Company's mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims to consistently provide products that meet customer as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for environmental performance and enlarging the scope of initiatives. The environmental policy of your Company emphasizes at being a caring company which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

With a view to meet this objective, our manufacturing facility at Baddi celebrated Environment Day with great enthusiasm and our employees planted about 100 trees in the Company premises followed by a pledge ceremony wherein all our employees took a pledge to protect the environment. Pollution Prevention Day was celebrated and employees were made aware of the effects of pollution on the environment and on living beings. Our employees spread awareness amongst the locals about planting more trees and making less use of plastic bags. Similarly various initiatives were taken at our manufacturing facility at Roha like planting more than 100 saplings in the Company premises, reduce waster consumption across the plant by 5% and reduce usage of paper by recycling waster paper. Training programmes were organized from time to time to create environmental awareness amongst the employees.

To conserve water, the Company has devised various water saving methods which are monitored on day-to- day basis. In this direction, the Company has devised rain-harvesting system at its Ghaziabad and Pithampur (SEZ) manufacturing units.

Your Company continues to strive for energy saving and conservation of natural resources. At our Pithampur SEZ unit, several green initiatives have been undertaken, most significant being soil conservation, recycling of treated effluent water, using solar energy for street lighting and limiting the use of Hot water Generation System in the plant by utilizing heat recovery options in Chilling plant.

Corporate Social Responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company and its dedicated employees continue to contribute towards several worthwhile causes. Yours Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

As you are aware, our Company has undertaken a project for Primary Health Centre in Village Take- Pathar, Shahpur Taluka, Dist. Thane in the name of Mr. Amrut Mody, founder of the Company, known as Adiwasi Unnati Mandal (AUM). AUM caters to medical needs of adiwasi population of Shahpur taluka of Thane district. AUM conducts regular Medical check-up, Dental check- up camps, Nutrition programmes, arranges distribution of free medicines and provides regular treatment to patients for TB, epilepsy and leprosy at the Centre with the help of dedicated team of doctors and volunteers who have been rendering selfless service. During the year, 191 cataract operations were successfully conducted with the help of "Vision Foundation of India". Besides Health care programmes, notebooks, shoes, books and other articles useful to school children were distributed amongst more than 2000 students over the last few years. The Company has donated TATA SUMO to AUM. This vehicle is utilised for transporting doctors and paramedical volunteers from Mumbai to Shahpur and back.

Our Company has volunteered to be the chief donor to Ahmedabad University School of Management which is promoted by Ahmedabad Education Society. During the year, the Company donated a sum of Rs. 2 Crores to the Management School. This donation is being given in the memory of founder of the Company, Mr. Amrut Mody who was a pioneer in Indian Pharma Industry and a visionary Technocrat and who was instrumental in supporting and contributing via endowments to educational institutions during his lifetime. Ahmedabad University started Amrut Mody School of Management, the Post Graduate Institute of Management (PGIM). Our Company in this manner helped in shaping many lives in a small but significant way.

Bombay College of Pharmacy (BCP) is one of the premier pharmacy colleges in India, imparting quality pharmaceutical education & training for the last 50 years. BCP was founded in 1957 by the Indian Pharmaceutical Association- Maharashtra State Branch (IPA-MSB) with financial assistance from Government of Maharashtra and several pharmaceutical corporations including Unichem. Unichem contributed 1% of its issued capital to Bombay College of Pharmacy in the form of shares. This College is managed independently without any interference from Unichem.

Our Company is considering donating some of its analytical instruments to BCP and other pharmacy and technology colleges. Our Company has provided industry based training to several pharma and technical students over the years.

Green Initiative

The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in Corporate Governance" (Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011) allowing paperless compliances by Companies through electronic mode. Companies are now permitted to send various notices /documents to its shareholders through electronic mode to the registered email addresses of shareholders. This move by the Ministry is welcome since it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment.

Keeping in view the underlying theme and the circular issued by MCA, we have participated in Green Initiative and sent documents like General Meeting Notices (including AGM), Audited Financial Statements, Directors' Report, Auditors' Report etc. to the shareholders in the electronic form, to the e-mail addresses so provided by the shareholder and made available to us by the Depositories, NSDL & CDSL using data maintained by the Depository Participants (DP). Thus we sent Annual Report for year 2010-11 electronically to more than 6,000 shareholders and contributed in saving paper. We intend to continue with this initiative.

Health & Safety

Your Company assiduously endeavours to act in a responsible manner to avoid causing any harm to the health and for safety of its employees, contract personnel and visitors. Health and Safety issues are addressed systematically, effectively and proactively. Mock drills are conducted regularly for different emergency situations for enhancing effectiveness of response plan.

Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health checkups are carried out of all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programmes and first-aid training camps are organised regularly to educate workers and employees at our plant locations and corporate office. Our Pithampur plant officials have developed a Safety Park at the plant where various types of personal protective equipments, informative posters, fire extinguishers, etc are displayed for creating awareness towards safety among all employees.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

On behalf of the Board of Directors,

For Unichem Laboratories Limited

Dr. Prakash A. Mody

Chairman & Managing Director

Mumbai, August 11, 2012

---

Mar 31, 2011

The Directors have pleasure in presenting the 48th Annual Report on the business and operations of the Company for the financial year ended March 31, 2011.

Financial Highlights

The table given below gives the financial highlights of the Company on Standalone basis for the year ended March 31, 2011 as compared to the previous financial year.

For the year ended March 31 (Rs. in lacs)

Particulars 2011 2010

Sales/ Income from operations (Net) 76,473.74 69,059.67

Other Operating Income 660.22 658.36

Total Income 77,133.96 69,718.03

Profit before tax 14,030.30 16,405.66

Tax Expenses (Including deferred tax & Fringe Benefit tax) 3,159.00 3,043.00

Net profit from ordinary activities after tax but before Prior period items 10,871.30 13,362.66

Add/(less): Prior period Expenses (1.31) (0.86)

Add/(less): Excess/(Short) provision for taxation pertaining to previous years (20.21) 32.63

Net Profit for the period 10,849.78 13,394.43

Notes: Previous years figures have been regrouped/reclassified wherever necessary.

Review of Operations

During the year under review, Sales / Income from operations (Net) increased to Rs. 76,473.74 Lacs in 2010-11 from Rs. 69,059.67 Lacs in 2009-10, registering a growth of 10.74 %. Consolidated Sales / Income from operations (Net) stood at Rs. 82,403.81 Lacs as compared to Rs. 74,738.60 Lacs registering an increase of 10.26%.

Appropriations

Your Company has transferred Rs. 1,500.00 Lacs to the General Reserve during the year under review. An amount of Rs. 44,242 Lacs is proposed to be carried forward from the Profit & Loss Account.

Dividend

Your Company has consistently paid higher rate of dividend over all these years. Your Directors at their meeting held on October 16, 2010, declared Interim Dividend of Rs. 1.20/- (60%) per equity share of Rs. 2/- each fully paid up (previous year: total interim dividend declared and paid was Rs. 10/- (200%) equity share of Rs. 5/- each fully paid up). The total interim dividend payout for year 2010-11 (including dividend distribution tax) was Rs. 1,262.67 Lacs. The above Interim Dividend declared and paid is to be confirmed by the Members at the ensuing Annual General Meeting.

Your Board of Directors at their meeting held on May 14, 2011 recommended Rs. 2.80 (140%) per equity share of Rs. 2/- each fully paid up. The register of members and share transfer books shall remain closed from July 18, 2011 to July 22, 2011, both days inclusive. The Annual General Meeting of the Company is scheduled for July 28, 2011. If the final dividend is approved by the shareholders at the

annual general meeting it would take the total dividend paid for the year to Rs. 4/- (200%) per equity share of Rs. 2/- each fully paid-up.

Sub-division of Face Value of Equity shares

As you are aware during the year under review, face value of equity shares were sub-divided from Rs. 5/- each to Rs. 2/- each. At present, the issued, subscribed and paid-up Share Capital of the Company stands at Rs. 180,494,000 Crores comprising of 90,247,000 Equity Shares of Rs. 2/- each fully paid-up.

Scheme of Arrangement

Your Board has considered and approved the valuation report, exchange ratio and the Scheme of Arrangement between AVM Capital Services Private Limited, Chevy Capital Services Private Limited, PM Capital Services Private Limited, Pranit Trading Private Limited and Viramrut Trading Private Limited and Unichem Laboratories Limited at its meeting held on May 14, 2011. The above mentioned Transferor Companies are companies through which the promoters of your Company hold shares in Unichem Laboratories Ltd. The proposed merger would help in consolidating and streamlining the Promoter holding in your Company and bring long term stability in the holding structure of Unichem without any change in the promoter holdings.

The said Scheme shall be filed with the concerned High Court or such other competent authority and directions would be sought for holding/dispensing with meeting of the shareholders/creditors of your Company to give effect to the Scheme.

Employee Stock Options Scheme

During the year under review, 73,000 of Rs. 2/- options were exercised and equivalent numbers of equity shares were allotted (on pari passu basis) under the Employees Stock Option Scheme – 2008.

Details of Employees Stock Option Schemes, as required to be disclosed under Clause 12 of the SEBI (Employees of Stock Option Scheme and Employees Stock Purchase) Guidelines, 1999 are set out in the Annexure I to this Report.

Managements Discussion and Analysis

A detailed review on operations and performance of the Company and its business is given in the Managements Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance forms part of this Annual Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors Certificate on compliance with Corporate Governance requirements by the Company is attached to the report on Corporate Governance.

Information for Shareholders

Additional information pertaining to shareholders like Equity History, Dividend Payment History, Shareholding pattern, etc. is provided in this Annual Report.

Consolidated Financial Statements

In accordance with the Accounting Standards AS – 21 on Consolidated Financial Statements, your Directors provide the audited Consolidated Financial Statements in the Annual Report.

Notes on Subsidiaries

Your Company has 4 (four) subsidiaries as on March 31, 2011. Your Company had applied to the Central Government for an exemption from attaching the Financial Statements of its Subsidiaries, since the Audited Consolidated Financial Statements are presented in the Annual Report. Your Directors believe that the Consolidated Financial Statements present a full and fair view of the state of affairs of your Company as a whole. In terms of approval granted by the Central Government under Section 212(8) of Companies Act, 1956, financial statements pertaining to the subsidiaries have not been attached with the Balance Sheet of the Company. However, for the benefit of the members, we have published a summary of the financials of the subsidiaries in the Annual Report. The financial statements of subsidiaries, along- with related information and reports are available for

inspection at the registered office of your Company.

Review of Subsidiaries

Niche Generics Limited

Niche Generics Limited is a wholly-owned subsidiary of your Company. It is engaged in manufacturing formulations and dossier filing in European markets. It recorded sales of GBP 100.4 Lacs for the year ended March 31, 2011 as compared to GBP 104.1 Lacs for the previous year ended March 31, 2010. The loss for the year ended March 31, 2011 stood at GBP 7.9 Lacs compared to the loss of GBP 1.9 Lacs for the year ended March 31, 2010.

Unichem Pharmaceuticals (USA) Inc.

Unichem Pharmaceuticals (USA) Inc., a wholly-owned subsidiary of your Company in USA, has been set up for business development, filing of ANDAs and exploring the opportunities for marketing alliances in North American markets. The subsidiary recorded sales of USD 27.7 Lacs for the year ended March 31, 2011 and incurred loss of USD 9.2 Lacs for the same period compared to the loss of USD 12.4 Lacs for the year ended March 31, 2010.

Unichem Farmaceutica Do Brasil Ltda

Unichem Farmaceutica Do Brasil Ltda., is a wholly- owned subsidiary of your Company in Brazil. This subsidiary has been set-up to own product registrations, launch generic and branded generics products in the Brazilian market.

The subsidiary plans to have marketing alliances for promoting, warehousing and distribution. The entity suffered a loss of Brazilian Reals 14.4 Lacs in the current year as against Brazilian Reals 9.3 Lacs during the previous year.

Unichem SA (Proprietary) Limited

Unichem SA (Proprietary) Limited is a wholly-owned subsidiary of your Company in South Africa. This subsidiary has been set-up for business development and to own product registrations. The subsidiary has registered profit of SA Rand 58 in the current year as compared to profit of SA Rand 197 during the previous year.

Directors Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

1. in preparation of annual accounts for the year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgements 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 2010- 11 and profit made by the Company for that period;

3. they have 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;

4. they have prepared the annual accounts on a going concern basis. Credit Rating

ICRA has reaffirmed the A1+ rating for short-term debt (including Commercial Paper) Programme of Rs. 1500 Lacs. The rating indicates highest safety, the prospect of timely repayment of debt/obligation being the best.

Directors

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Prafull Anubhai and Mr. Ramdas Gandhi retire by rotation at the ensuing Annual General Meeting. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting for seeking their approval for the aforesaid appointments. The information required under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the Annual General Meeting.

Auditors

The Statutory Auditors of the Company, M/s. B. D. Jokhakar & Co., retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. Your Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.They have confirmed their willingness to accept office, if re-appointed. The Board and Audit Committee recommend the re-appointment of M/s. B.D. Jokhakar & Co. as Statutory Auditors of your Company for the financial year 2011-12.

Cost Auditors

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Companys Bulk Drugs and Formulations Division. The Board of Directors of your Company has re-appointed Mr. Y. R. Doshi, Cost Accountant, having membership no. 3286, as the Cost Auditor to audit the cost accounts relating to "Bulk Drugs" and "Formulations" for the financial year ending 2011-12. The due date for filing Cost Audit Reports of the financial year 2009-10 for your Company was 27th September, 2010 and the reports were filed well within the due date i.e. on 24th September, 2010. Similarly, the due date for filing Cost Audit Reports of the financial year 2010-11 for your Company is 27th

September, 2011 and the tentative date for filing these reports is 24th September, 2011.

Energy, Research and Development, Technology Absorption, Foreign Exchange

The particulars as prescribed under Clause (e) of Sub- section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule, 1988 are set out in Annexure II to this Report.

Particulars of Employees

Particulars of employees, as required under 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However in pursuance of Section 219(1)(b)(iv) of the Act this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department at the Registered Office of the Company.

Employee Relations

Relations with employees across all the offices and units continued to be cordial throughout the year. Your Directors place on record, their sincere appreciation of the significant contribution made by the employees at all levels through their dedication, hard work and commitment.

Quality and Environment

Your Companys mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims to consistently provide products that meet customer as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for environmental performance and enlarging the scope of initiatives. The environmental policy of your Company emphasizes at being a caring company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

To conserve water, the Company has devised various water savings methods which are monitored on day-to- day basis. In this direction, the Company has devised rain-harvesting system at its Ghaziabad manufacturing unit. Your Company continues to strive for energy saving and conservation of natural resources.

Corporate Social Responsibility

Good governance demands adherence of social

responsibility coupled with creation of value in the larger interest of the general public. Your Company and its dedicated employees continue to contribute towards several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility. The range of our activities begins with organizing fire fighting drills, blood donation camps in collaboration with Blood Banks, facilitating plantation of trees, extending educational and on-job training facilities and goes on to cover vocational guidance and supporting seminars in co-ordination with Universities, arranging spiritual upliftment programmes, etc. The aim of these seminars and lectures is to increase the intellectual wealth of employees, who in turn are expected to go back and spread the knowledge to build a happy, peaceful and strong nation.

To create awareness about the pollution generated by motor vehicles, Unichem is rolling out a mandatory check of Pollution Under Control (PUC) certificates of all vehicles entering Company premises at Goa manufacturing unit. As a part of Unichems Environmental Awareness Drive, various programmes by eminent environmentalists are organized on a regular basis for the benefit of the industrial community in association with Goa University, Inspectorate of Factories & Boilers, Government of Goa and Green Triangle Society.

As you are aware, our Company has undertaken a project for Primary Health Centre in Village Taki-Pathar, Shahpur Taluka, Dist. Thane in the name of Mr. Amrut Mody, founder of the Company. This Health Centre was inaugurated in September last year and now shall cater to medical needs of adiwasi population of Shapur taluka of Thane District. A dedicated team of doctors provide regular treatment to patients for TB, epilepsy and leprosy at the Centre. During the financial year under review, the Centre organized 18 diagnostic, surgery and post operative camps at Taki, Andad and Shirval Villages of Shapur. Free Cataract operations were carried out in Mumbai for 205 patients. Educational aid in the form of notebooks, compass boxes, biscuits, etc was provided to around 1600 students from 20 schools. General Medical and Dental check up camp was organized in Khalapur district in Raigad. 180 students took advantage of the camp.

Our Company has volunteered to be the chief donor to Ahmedabad University School of Management which is promoted by Ahmedabad Education Society. During the year the Company donated a sum of Rs. 3 Crores to the Management School. This donation is being given in the memory of its founder Chairman Mr. Amrut Mody who was a pioneer in Indian Pharma Industry and a visionary Technocrat and who was instrumental in supporting and

contributing via endowments to educational institutions during his lifetime.

Plant Visit

Your Company had organized a plant visit for the shareholders to our Roha plant. The visit included information about the various functions and processes taking place at Roha plant. The visit was a grand success.

Health & Safety

Your Company assiduously endeavours to act in a responsible manner to avoid causing any harm to the health and for safety of its employees, contract personnel and visitors. Health and Safety issues are addressed systematically, effectively and proactively. Mock drills are conducted regularly for different emergency situations for enhancing effectiveness of response plan.

Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health checkups are carried out of all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programs and first-aid training camps are organised regularly to educate workers and employees at our plant locations and corporate office. Our Pithampur plant officials have developed a Safety Park at the plant where various types of personal protective equipments, informative posters, fire extinguishers, etc are displayed for creating awareness towards safety among all employees.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledges the trust reposed in the Company by medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

On behalf of the Board of Directors,

For Unichem Laboratories Limited

Dr. Prakash A. Mody

Chairman & Managing Director

Mumbai, May 14, 2011

---

Mar 31, 2010

The Directors have pleasure in presenting the 47th Annual Report on the business and operations of the Company for the financial year ended March 31, 2010.

Financial Highlights

The table given below gives the financial highlights of the Company on Standalone basis for the year ended March 31,

2010 as compared to the previous financial year. For the year ended March 31

( Rs. in lacs)

Particulars 2010 2009

Sales/ Income from operations (Net) 68,383.54 64,886.79

Other Operating Income 676.13 799.87

Total Income 69,059.67 65,686.66

Profit from Operations before other income, interest & exceptional items 15,798.27 13,423.02

Profit from ordinary activities before tax 16,405.66 14,408.96

Tax Expenses (Including deferred tax & Fringe Benefit tax) 3,043.00 1,920.00

Net profit from ordinary activites after tax but before Prior period items 13,362.66 12,488.96

Prior period Expenses 0.86 -

Excess/(Short) provision for taxation pertaining to earlier years 32.63 (13.81)

Net Profit for the period 13,394.43 12,475.15

Notes: Previous years figures have been regrouped/reclassified wherever necessary.

Review of Operations

During the year under review, Total Income increased to Rs. 69,059.67 lacs in 2009-10 from Rs. 65,686.66 lacs in 2008-09, registering a growth of 5.14%. Net Profit after tax for the year stood at Rs. 13,394.43 lacs compared to Rs. 12,475.15 lacs recorded last year, thus reflecting 7.37% growth. The Global Net Profit for the group for the year stood at Rs. 12,312.27 lacs as compared to Rs. 10,801.71 lacs in the previous year registering a growth of 13.98%.

Appropriations

Your Company has transferred Rs. 1,500.00 lacs to the General Reserve during the year under review. An amount of Rs. 39,091.69 lacs is proposed to be carried forward from the Profit & Loss Account.

Dividend

Your Directors at their meeting held on October 22, 2009, declared 1st Interim Dividend of Rs. 3/- (60%) per equity share of Rs. 5/- each. Subsequently, 2nd Interim Dividend of Rs. 7/- (140%) per equity share of Rs. 5/- each fully paid up was declared at the meeting held on May 10, 2010, taking the total interim dividend declared for the year to Rs. 10/- (200%) per share (previous year : total dividend declared Rs. 8/- (160%) per share). The total interim dividend payout for year 2009-10 (including dividend distribution tax) was Rs. 4,209.85 lacs. The above Interim Dividends declared and paid are to be confirmed by the Members at the ensuing Annual General Meeting. The Board at their meeting held on July 22, 2010, has decided to

consider the said interim dividends as final.

The register of members and share transfer books shall remain closed from September 13, 2010 to September 15, 2010, both days inclusive. The Annual General Meeting of the Company is scheduled for September 16, 2010.

Sub-division of Face value of Equity shares

The Board of Directors is pleased to recommend the sub-division of face value of equity shares of Rs.5/- into face value of Rs.2/- each, subject to approval of shareholders at the forthcoming Annual General Meeting.

Employee Stock Options Scheme

During the year under review, 8,100 options were exercised and equivalent numbers of equity shares were allotted (on pari passu basis) under the Employees Stock Option Scheme – 2004.

Details of Employees’ Stock Option Schemes, as required to be disclosed under Clause 12 of the SEBI (Employees Stock Option Scheme) Guidelines, 1999 are set out in the Annexure I to this Report.

Information Systems

Your Company has successfully implemented SAP ERP 6.0 thereby enabling proper planning and company wide efficiency. The modules have been implemented and stabilized and the system is fully integrated with BaaN system.

Managements Discussion and Analysis

A detailed review on operations and performance of the Company and its business is given in the Management’s Discussion and Analysis, which forms part of this Annual Report.

Corporate Governance

A detailed report on Corporate Governance forms part of this Annual Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors’ Certificate on compliance with Corporate Governance requirements by the Company is attached to the report on Corporate Governance.

Information for Shareholders

Additional information pertaining to shareholders like Growth in Shareholders Fund, Shareholding pattern, Equity History of the Company, etc. is provided in this Annual Report.

Consolidated Financial Statements

In accordance with the Accounting Standard AS – 21 on Consolidated Financial Statements, your Directors provide the audited Consolidated Financial Statements in the Annual Report.

Notes on Subsidiaries

Your Company has 4 (four) subsidiaries as on March 31, 2010. Your Company had applied to the Government of India for an exemption from attaching the Financial Statements of its Subsidiaries, since the Audited Consolidated Financial Statements are presented in the Annual Report. Your Directors believe that the Consolidated Financial Statements present a full and fair view of the state of affairs of your Company as a whole. In terms of approval granted by the Central Government under Section 212(8) of Companies Act, 1956, financial statements pertaining to the subsidiaries have not been attached with the Balance Sheet of the Company. However, for the benefit of the members, we have published a summary of the financials of the subsidiaries in the Annual Report. The financial statements of subsidiaries, along-with related information and reports are available for inspection at the registered office of your Company.

Review of Subsidiaries

Niche Generics Limited

Niche Generics Limited is a wholly-owned subsidiary of your Company. It is engaged in manufacturing formulations, product development and dossier filing in European markets. It recorded sales of GBP 104.1 lacs for the year ended March 31, 2010 as compared to GBP 114.7 lacs for the previous year ended March 31, 2009. During the year, there is a considerable improvement in the working of the company and accordingly the loss for the

year ended March 31, 2010 stood at GBP 1.9 lacs compared to the loss of GBP 13.1 lacs for the year ended March 31, 2009.

Unichem Pharmaceuticals (USA) Inc.

Unichem Pharmaceuticals (USA) Inc., a wholly-owned subsidiary of your Company in USA, has been set up for business development, filing of ANDA’s and exploring the opportunities for marketing alliances in North American markets. The subsidiary recorded sales of USD 7.5 lacs for the year ended March 31, 2010 and incurred loss of USD 12.4 lacs for the same period compared to the loss of USD 11.7 lacs for the year ended March 31, 2009.

Unichem Farmaceutica Do Brasil Ltda

Unichem Farmaceutica Do Brasil Ltda., is a wholly-owned subsidiary of your Company in Brazil. This subsidiary has been set-up to own product registrations, launch generic and branded generic products in the Brazilian market.

The subsidiary plans to have its own set-up for sales, marketing, warehousing and distribution. The entity suffered a loss of Brazilian Reals 12.6 lacs in the current year as against Brazilian Reals 9.32 lacs during the previous year.

Unichem SA (Proprietary) Limited

Unichem SA (Proprietary) Limited is a wholly-owned subsidiary of your Company in South Africa. This subsidiary has been set- up for business development and to own product registrations. The subsidiary has registered profit of SA Rand 197 in the current year against loss of SA Rand 28 during the previous year.

Directors Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

1. in preparation of annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. they have selected such accounting policies and applied them consistently and made judgements 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 2009-10 and profit made by the Company for that period;

3. they have 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;

4. they have prepared the annual accounts on a going concern basis.

Fixed Deposits

Your Company discontinued its fixed deposits scheme in financial year 2005. As on March 31, 2010, the total amount of fixed deposits was Rs. 39,000/-, which represents the unclaimed deposits that have matured.

Credit Rating

ICRA has reaffirmed the A1+ rating for short-term debt (including Commercial Paper) Programme of Rs. 1500 lacs. The rating indicates highest safety, the prospect of timely repayment of debt/obligation being the best.

Directors

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Prafull D. Sheth and Mr. Anand Mahajan retire by rotation at the ensuing Annual General Meeting. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting for seeking their approval for their re-appointment. The information required under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the Annual General Meeting.

Auditors

The Statutory Auditors of the Company, M/s. B. D. Jokhakar & Co., retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Your Company has received intimation to the effect that, proposed re- appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956. They have confirmed their willingness to accept office, if re-appointed. The Board and Audit Committee recommend the re-appointment of M/s. B. D. Jokhakar & Co. as Statutory Auditors of your Company for the financial year 2010-11.

Cost Auditors

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company’s Bulk Drugs and Formulations Division. The Board of Directors of your Company have re-appointed Mr. Y. R. Doshi, Cost Accountant as the Cost Auditor to audit the cost accounts relating to “Bulk Drugs” and “Formulations” for the financial year 2010-11.

Energy, Research and Development, Technology Absorption, Foreign Exchange

The particulars as prescribed under Clause (e) of Sub-section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule, 1988 are set out in Annexure II to this Report.

Particulars of Employees

Particulars of employees, as required under 217(2A) of the

Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However in pursuance of Section 219(1)(b)(iv) of the Act this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department at the Registered Office of the Company.

Employee Relations

Relations with employees across all the offices and units continued to be cordial throughout the year. Your Directors place on record, their sincere appreciation of the significant contribution made by the employees at all levels through their dedication, hard work and commitment.

Quality and Environment

ISO 9001 and ISO 14001 certificates for Quality and Environmental Management System enhance the credibility of your Company to increase process efficiencies, reduce consumption of energy and lower risk of environmental damage.

Your Companys mission envisages a strong sense of commitment to work towards being a caring pharmaceutical company, which will continuously strive to enhance health through quality products. Your Company aims to consistently provide products that meet customer as well as national and international regulatory requirements as may be applicable. It has been steadily raising the bar, setting higher goals for environmental performance and enlarging the scope of initiatives. The environmental policy of your Company emphasizes at being a caring company, which shall protect and promote the environment by complying with applicable environmental regulations and preventing pollution in all its operations.

To conserve water, the Company has devised various water savings methods which are monitored on day-to-day basis. In this direction, the Company has devised rain-harvesting system at its Ghaziabad manufacturing unit. Your Company continues to strive for energy saving and conservation of natural resources.

Corporate Social Responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company and its dedicated employees continue to contribute towards several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility. The range of our activities begins with organizing fire fighting drills, blood donation camps in collaboration with Blood Banks, facilitating plantation of trees, extending educational and on-job training facilities and goes on to cover vocational guidance and supporting seminars in co-ordination with Universities, arranging spiritual upliftment programmes, etc. The aim of these seminars and lectures is to increase the intellectual wealth of employees, who in turn are expected to go back and spread the knowledge to build a happy, peaceful and strong nation.

To create awareness about the pollution generated by motor vehicles, Unichem is rolling out a mandatory check of Pollution Under Control (PUC) certificates of all vehicles entering Company premises at Goa manufacturing unit. As a part of Unichem’s Environmental Awareness Drive, various programmes by eminent environmentalists are organized on a regular basis for the benefit of the industrial community in association with Goa University, Inspectorate of Factories & Boilers, Government of Goa and Green Triangle Society.

Besides the aforesaid, your Company has taken two key initiatives in the fields of healthcare for the under privileged and education in the fond memory of our founder Mr. Amrut Mody, who was the pioneer of Indian Pharma industry and a visionary Technocrat and who was instrumental in supporting the needy and also contributing via endowments to educational institutions during his lifetime. Firstly, your Company has undertaken a project for Primary Health Centre in Village Tanki- Pathar, Shahpur Taluka, Dist. Thane in the name of Mr. Amrut Mody, founder of the Company. This Health Centre shall cater to the basic medical needs of the tribals in the vicinity. Secondly, your Company has volunteered to be the chief donor to Ahmedabad University School of Management which is promoted by Ahmedabad Education Society.

Health & Safety

Your Company assiduously endeavours to act in a responsible manner to avoid causing any harm to the health and for safety of its employees, contract personnel and visitors. Heath and Safety issues are addressed systematically, effectively and proactively as per requirements of ISO standards/ OHSAS guidelines. Mock drills are conducted regularly for different emergency situations for enhancing effectiveness of response plan.

Your Company takes pride in providing various forms of medical assistance to the families of its employees and also to all those living in surrounding villages. Periodic health checkups are carried out of all employees and regular training programmes are organised on safety and precautionary measures. Fire fighting training programs and first-aid training camps are organised regularly to educate the employees. Our API facility at Roha and Pithampur are accredited with OHSAS 18001:1999 and OHSAS 18001:2007 respectively which stands for Occupational Health and Safety Management System.

Acknowledgement

Your Directors acknowledge the support and wise counsel extended to the Company by analysts, bankers, government agencies, shareholders, investors, suppliers, distributors, stockists and others associated with the Company as its business partners. Your Directors also acknowledge the trust reposed in the Company by medical fraternity and patients. We look forward to having the same support in our mission to enhance health through quality products.

On behalf of the Board of Directors, For Unichem Laboratories Limited

Dr. Prakash A. Mody Chairman & Managing Director

Mumbai, July 22, 2010