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Directors Report of Pfizer Ltd.

Mar 31, 2015

TO THE MEMBERS

The Directors take pleasure in presenting this 64th Annual Report along with the Audited Financial Statements for the financial year ended 31st March, 2015. The Company operates only in one business segment viz., "Pharmaceuticals" and this Report covers its Pharmaceutical business performance. The audited figures given hereunder for the financial year under review and the previous year are not comparable, as the current year includes figures of Wyeth Limited which amalgamated with the Company effective 1st December, 2014. The prior year figures are only of standalone Pfizer Limited. The Appointed date for the said Amalgamation was 1st April, 2013.

DIVIDEND

Your Directors recommended a dividend of Rs.12.50 per share (125%) for the period under review. The dividend payout will be Rs.5,718 Lakhs and the dividend distribution tax payable by the Company would amount to Rs.1,154 Lakhs. This aggregates to Rs.6,882 Lakhs.

FINANCIAL HIGHLIGHTS

Rs in lakhs Year ended Year ended 31st March,2015 31st March, 2014

RevenuefromOperations 182,774 100,427

Operatingandotherlncome 9,292 21,692

Profit Before Tax and Exceptional ltems 31,846 33,958

Exceptional Items (Expenses) /Income (8,045) -

ProfitBeforeTax 23,801 33,958

Less: Taxation

CurrentTax 15,100 11,304

Deferred Tax (Credit)/Debit (1,332) 568

Profit before impact of Scheme of Amalgamation 10,034 22,086

ImpactofSchemeofAmalgamation (3,052) -

Profit for the year after impact of Scheme of Amalgamation 6,982 22,086

BalanceofProfitfromPriorYears 30,387 136,197

Surplus available for Appropriation 37,369 158,283

Appropriations:

Transfer to General Reserve - 2,209

Adjustment on account of Depreciation 19 -

Interim Dividend - 107,429

Proposed Dividend 5,718 -

Tax on Dividend 1,164 18,258

Surplus as per Balance Sheet 30,467 30,387

The Scheme of Amalgamation of Wyeth Limited with the Company ("the Scheme") received approval of the Hon''ble High Court of Judicature at Bombay on 31st October, 2014 and, subsequent to approvals by other relevant regulatory authorities, the Scheme has become effective 1st December, 2014. Since the Scheme received all the requisite approvals after the financial statements for the year ended 31st March, 2014 were adopted and approved by the shareholders of the respective companies, the impact of amalgamation has been given in the current financial yearwith effect from the appointed date i.e., 1st April, 2013.

In terms of the Scheme of Amalgamation, your Company allotted and issued 15,906,292 equity shares of Rs.10/- each to the shareholders of Wyeth Limited. Accordingly, the paid up equity share capital of your Company now stands increased to Rs.4,575 Lakhs.

Your Company''s net sales for the year ended 31st March, 2015 was Rs.182,774 Lakhs. Your Company achieved a Net Profit of Rs.10,034 Lakhs before giving effect to the Scheme.

The Company had announced a Voluntary Retirement Scheme ("VRS") during the year under review in its Plant at Thane. The expenses in relation to VRS and other related costs are reflected as Exceptional item.

As stated earlier, the audited figures for 31st March, 2015 are not comparable with that of 31st March, 2014. However, on a like to like comparison, the pharmaceutical revenue from operations for the year under review was Rs.182,774 Lakhs as compared to Rs.163,223 Lakhs in the previous year, registering a growth of 12%. Higher expenses and depreciation/amortization as a result of amalgamation have impacted profit from operations for the year.

Profit after tax has been impacted by the comparatively lower bank interest income and higher expenses. On a like to like comparison, Profit from operations for the year after adjusting for the incremental impact on depreciation / amortization and other income would be Rs.37,032 Lakhs, reflecting a growth of17% overthe previous year ended 31st March, 2014.

The profit for the year ended 31st March, 2014 of erstwhile Wyeth Limited ofRs.8,792 Lakhs, depreciation on tangible assets, amortization of goodwill and intangible assets arising from the amalgamation for the period 1st April, 2013 to 31st March, 2014, aggregating to Rs.11,844 Lakhs, have been accounted for in the current year''s statement of profit and loss. Accordingly, the profit for the year under review after giving effect to the Scheme was Rs.6,982 Lakhs.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013, Mr. S. Sridhar retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. AijazTobaccowalla, Managing Director has been offered a global role with Pfizer Inc. USA which he intends to accept. He will continue in his current position as the Managing Director until his successor has been appointed by the Board of Directors of the Company. Mr.Aijaz Tobaccowalla was appointed as the Managing Directorforthe period of 3 years effective 16th August, 2012.

The Board of Directors at the meeting held on 14h February, 2015, based on the recommendation of Nomination and Remuneration Committee appointed Mr. Sunil Lalbhai as an Additional Director who will hold the office till the date of the ensuing Annual General Meeting. The Board of Directors at the said meeting also appointed Mr. Sunil Lalbhai as an Independent Director for a term of five years with effect from 14h February, 2015, subject to the approval of the members at the ensuing Annual General Meeting.

The Board of Directors at their meeting held on 14h February, 2015, based on the recommendation of Nomination and Remuneration Committee, appointed Dr. Lakshmi Nadkarni as an Additional Director who will hold the office till the date ofthe ensuing Annual General Meeting. The Board of Directors at the said meeting also appointed Dr. Lakshmi Nadkarni as a Whole-time Director for a period of five years with effect from 14h February, 2015, subject to the approval ofthe members at the ensuing Annual General Meeting.

All Independent Directors have given the declarations that they meet the criteria of independence as laid down under Section 149(5) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Performance Evaluation

The Company has devised a Performance Evaluation Framework and Policy, which sets a mechanism for the evaluation of the Board, Board Committees and Directors.

Performance Evaluation of the Board, Committees and Directors was carried out through an evaluation mechanism in terms of the aforesaid Performance Evaluation Frameworkand Policy.

Independent Directors'' Meeting

Two Meetings of the Independent Directors were held on14h February, 2015 and 5th May, 2015, without the presence of the Executive Directors or management personnel. On 5th May, 2015, the Independent Directors carried out performance evaluation of Non- Independent Directors and the Board of Directors as a whole, performance of Chairman ofthe Company, the quality, content and timelines of flow of information between the Management and the Board, based on the Performance Evaluation framework of the Company. All the Independent Directors were presentatthe aforesaid Meetings.

Nomination and Remuneration Policy

The Board has on the recommendation ofthe Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management, Key Managerial Personnel and their remuneration. The Nomination and Remuneration Policy is annexed herewith as

"Annexure - B".

Meetings of the Board

During the year, five Board Meetings and five Audit Committee Meetings were held and convened. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 ofthe Listing Agreement.

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) ofthe CompaniesAct, 2013:

a. that in the preparation ofthe annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with properexplanation relating to material departures, if any;

b. that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company as at31st March, 2015 and ofthe profit of the Company forthe year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. thatthe annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and thatthe financial controls were adequate and were operating effectively.

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

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details pertaining to Familiarization Programme for Independent Directors are included in the Corporate Governance Report, which forms part of this Report.

RISK MANAGEMENT POLICY

The details pertaining to the Risk Management Policy are included in the Corporate Governance Report, which forms part of this Report. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The Company had entered into materially significant related party transactions with Pfizer Export Company, Ireland for purchase of raw materials, bulk drugs and finished goods. The same is within the limits duly approved by the members at the 53rd Annual General Meeting.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee for approval and before the Board for consideration and noting.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website ''www.pfizerindia.com''. The weblinkforthe Policy is http://www.pfizerindia.com/eNewsWebsite/ investor/pdf/Related%20Party%20Transaction%20Policy.pdf

None ofthe Directors have any material pecuniary relationships ortransactions ws-a-wsthe Company.

Pursuant to Section 134 of the Companies Act, 2013 and Rules made thereunder, particulars of transactions with related parties as required under Section 188(1) ofthe CompaniesAct, 2013, in the prescribed Form AOC-2 is annexed herewith as "Annexure - C".

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not granted any loans, guarantees and investments forthe financial year ended 31st March 2015.

DEPOSITS FROM PUBLIC

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

OTHER INFORMATION

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure - D".

A table containing particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, ("the Act") read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as "Annexure - E".

The information required pursuant to Section 197(12) of the Act read with Rule 5(2) 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 provision of Sections 134 and 135 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members atthe Registered Office ofthe Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy of such statement may write to the Company Secretary at the Company''s Registered Office.

AUDITORS

The Auditors, Messrs. B S R & Co. LLP, were appointed as Statutory Auditors to hold office for a term of 3 (three) years from conclusion of 63rd Annual General Meeting till the conclusion of the 66th Annual General Meeting subject to ratification by members at every subsequent Annual General Meeting.

The appointment of Messrs. BSR&Co. LLP will be placed before the members at this Annual General Meeting for ratification.

COST AUDITORS

Pursuant to Section 148 ofthe Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the costaudit records maintained by the Company is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs. RA &Co., to audit the cost accounts ofthe Company for the financial year 2015-15 on a remuneration of Rs.10.40 Lakhs. As required under the CompaniesAct, 2013, the remuneration payable to the CostAuditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Messrs. RA & Co., CostAuditors is included at Item No. 8 ofthe Notice convening theAnnual General Meeting.

The Company has filed the Cost Audit Report for Formulations and Compliance Report for the financial year ended 31st March, 2014 on 24th September, 2014, due date being 27th September, 2014. The Cost Audit Report Formulations and Compliance Report for the financial year ended 31st March, 2015 is due to be filed by 27th September, 2015.

Messrs. R.A.& Co., have confirmed their eligibility to be the CostAuditors and have been appointed to conduct Cost Audit ofthe Company''s records forthe financial year ending 31st March, 2015. The remuneration is subject to ratification by the shareholders.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs. Saraf & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure - F".

EXTRACT OF ANNUAL RETURN

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

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a Certificate from Messrs. B S R & Co. LLP, regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges forms part of this Report and annexed herewith as "Annexure - H".

ACKNOWLEDGEMENTS

Your Directors would like to place on record their sincere appreciation for the support and assistance extended by the Company''s suppliers and business associates. Your Directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management.

Your Directors wish to place on record theirappreciation forthe supportand guidance provided by its Parent Company, Pfizer Inc. USA.

For and on behalf of the Board of Directors

R.A. Shah Mumbai, 12th June, 2015 Chairman


Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting this 62nd Annual Report together with the Audited Accounts for the year ended 31st March, 2013. Your Company has, on 2nd April, 2012 transferred its animal health business to its wholly-owned subsidiary and hence the audited figures for the financial year under review with the previous year are not comparable. The prior year''s figures in the financial statements have been regrouped/rearranged where necessary.

DIVIDEND

Your Directors recommend a dividend of Rs.32.50 per equity share (325%) for the financial year ended 31st March, 2013 which includes a one-time special dividend of Rs.20.00 per equity share (200%) in view of the gain on sale of the animal health business. The proposed dividend, if approved at the ensuing Annual General Meeting, will aggregate to Rs.9699 Lakhs and the tax on distributed profits payable by the Company would amount to Rs.1648 Lakhs.

FINANCIAL HIGHLIGHTS

Your Company''s revenue from operations for the year under review stood at Rs.94798 Lakhs as compared to Rs.101732 Lakhs in the previous year. As highlighted earlier, the previous year''s figures are not comparable in view of the divestment of the animal health business on 2nd April, 2012. On a comparable basis, i.e., excluding animal health sales from the previous year, the Company''s Pharmaceutical sales grew at 4%.

For the year under review, your Company achieved a Profit Before Tax of Rs.69377 Lakhs as compared to Rs.27753 Lakhs for the previous year. On a comparable basis, i.e., after excluding the profit attributable to the animal health business in the previous year, the Profit Before Tax and Exceptional Items grew by 6%.

The Company made a gain of Rs.38252 Lakhs on account of sale of the animal health business to Pfizer Animal Pharma Private Limited (PAPPL), the erstwhile wholly-owned subsidiary of the Company and Rs.3160 Lakhs on account of transfer of investment in PAPPL.

The Company reported Other Income of Rs.10524 Lakhs for the year under review showing an increase of 13% over the previous year.

Rs. in Lakhs Particulars Year ended Year ended 31st March, 2013 31st March, 2012

Revenue from Operations 94798 101732

Operating and other Income 20733 16870

Profit Before Tax and Exceptional Items 28407 27790

Exceptional Items (Expenses)/Income 40970 (37)

Profit Before Tax 69377 27753

Less: Taxation

Current Tax 19543 9447

Deferred Tax (Credit)/Debit (486) (155)

Profit After Tax carried to Balance Sheet 50320 18461

Balance of Profit from Prior Years 102256 89977

Surplus available for Appropriation 152576 108438

Appropriations:

Transfer to General Reserve 5032 1846

Proposed Dividend 9699 3730

Tax on Dividend 1648 605

Surplus as per Balance Sheet 136197 102257

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. R.A. Shah retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Sunil Madhok, Executive Director - Business Operations, retired from the services of the Company with effect from 31st January, 2013 and has also resigned from the Board of Directors effective the said date. Your Directors wish to place on record their appreciation for the valuable contributions made by Mr. Madhok.

At the 61st Annual General Meeting of your Company, Mr. Aijaz Tobaccowalla was appointed as Managing Director of the Company with effect from commencement of business on 16th August, 2012, subject to the approval of the Central Government, which has been received.

The Board of Directors at their meeting held on 14th May, 2013 appointed Mr. S. Sridhar as Additional Director pursuant to Section 260 of the Companies Act, 1956 ("the Act") who will hold office till the date of the ensuing Annual General Meeting. The Company has received a notice for his candidature as a Director from a member pursuant to Section 257 of the Act. The Board of Directors at their meeting held on 14th May, 2013 also appointed Mr. S. Sridhar as a Whole-time Director of the Company for a period of 5 years. Mr. Sridhar''s appointment and remuneration are being placed before the shareholders for their approval at the ensuing Annual General Meeting. The information required to be furnished under Clause 49IV(G) of the Listing Agreement is given in the Notice of the 62nd Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

ii. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2013 and of the profit of the Company for that period.

iii. Your Directors 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.

iv. Your Directors have prepared the attached Statement of Accounts for the financial year ended 31st March, 2013, on a ''going concern'' basis.

CORPORATE GOVERNANCE

The Company has taken requisite steps to comply with the recommendations concerning Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report.

A separate report on Corporate Governance forms part of this Annual Report.

SUBSIDIARY COMPANY

Members are aware that your Company had incorporated a wholly-owned subsidiary in the previous year viz., Pfizer Animal Pharma Private Limited for the purpose of divesting its Animal Health business. On 7th December, 2012, your Company transferred its 100% ownership in the said subsidiary to Pfizer Animal Health India Limited, a 100% indirect subsidiary of Pfizer Inc., USA, for a consideration of Rs.47160 Lakhs. Accordingly, Pfizer Animal Pharma Private Limited ceased to be your Company''s subsidiary effective 7th December, 2012.

OTHER INFORMATION

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, information pertaining to Conservation of Energy, Technology Absorption and Exports is given as Annexure to this Report. The information required under Section 217(2A) of the Companies Act, 1956 ("the Act") read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Company''s Registered Office.

AUDITORS

The Auditors, M/s. B S R & Co., retire at the conclusion of this Annual General Meeting and offer themselves for re-appointment. M/s. B S R & Co. have confirmed their eligibility for re-appointment under Section 224(1B) of the Companies Act, 1956.

M/s. B S R & Co., if appointed, will hold office up to the conclusion of the next Annual General Meeting of the Company.

COST AUDITORS

Pursuant to the provisions of Section 233B of the Companies Act, 1956, read with General Circular No. 2/2013 dated 31st January, 2013 issued by the Ministry of Corporate Affairs, companies were required to file their Cost Audit Reports and Compliance Reports by 28th February, 2013. The Company filed the said Reports for the financial year ended 31st March, 2012, on 31st January, 2013.

The Cost Audit Report for the financial year ended 31st March, 2013 is due to be filed by 27th September, 2013. M/s. RA & Co., who have confirmed their eligibility under Section 224(1 B) of the Companies Act, 1956, have been appointed as Cost Auditors to conduct Cost Audit of the Company''s records for the year ending 31st March, 2014.

ACKNOWLEDGEMENTS

Your Directors record their sincere appreciation to the Company''s employees at all levels for their dedication and commitment throughout the year.

Your Directors would like to place on record their appreciation for the support and assistance extended by all its external stakeholders. Your Directors are also thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management.

Your Directors wish to place on record their appreciation for the support and guidance provided by its Parent Company, Pfizer Inc., USA.

For and on behalf of the Board of Directors

of Pfizer Limited

R.A. SHAH

Mumbai, 26th July, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting this 61st Annual Report together with the Audited Accounts for the year ended March 31, 2012. The Report reviews the Company's operations covering Pharmaceutical and Animal Health Products. The audited figures given hereunder for the financial year under review and the previous period are not comparable, as the current period is for 12 (twelve) months from 1st April, 2011 to 31st March, 2012, while the previous period was for a period of 16 (sixteen) months from 1st December, 2009 to 31st March, 2011. The prior year's figures in the financial statements have been regrouped/re-arranged where necessary.

DIVIDEND

Your Directors recommended a dividend of Rs12.50 per share (125%) for the period under review. The dividend payout will aggregate to Rs 3730 Lakhs and the tax on distributed profits payable by the Company would amount to Rs 605 Lakhs.

FINANCIAL RESULTS

Your Company's net sales were Rs 101730 Lakhs recording a growth of 13% on an annualised basis. Your Company achieved a Net Profit of Rs 18461 Lakhs showing an increase of 8.75% on an annualized basis.

Rs in Lakhs

Particulars Year ended 16 Months Period March 31, 2012 ended March 31, 2011

Sales (Net of Excise Duty & Sales Tax) 101730 116956

Operating and Other Income 16870 17579

Profit Before Tax and Exceptional Items 27790 34764

Exceptional Items (Expenses)/Income (37) (303)

Profit Before Tax 27753 34461

Less: Taxation

- Current Tax 9447 12631

- Fringe Benefit Tax - -

- Deferred Tax (Credit)/Debit (155) (804)

Profit After Tax 18461 22634

Balance of Profit from Prior Years 89977 75329

Surplus available for Appropriation 108438 97963

Appropriations:

Transfer to General Reserve 1846 2263

Interim Dividend - 3730

Proposed Dividend 3730 1194

Tax on Dividend (proposed dividend & interim dividend) 605 799

Balance carried to Balance Sheet 102257 89977

PHARMA INDUSTRY OVERVIEW & OUTLOOK

India is at an exciting phase where the challenging dynamics of growth provide opportunities to innovate and progress. As a country, we continue to battle inflation with Gross Domestic Product (GDP) growth projected to dip below 6.9 percent in 2011-12 from 8.4 percent growth achieved during the two preceding years. The pharmaceutical industry however retains a healthy growth rate despite signs of deceleration in the larger economy. The audited pharmaceutical market in India grew by 16.34 percent to reach USD 13.3 billion in 2011-12 (Source: IMS MAT March 2012). The retail sector accounted for USD 11.2 billion and grew at 15.02 percent, while the hospital sector accounted for USD 1.3 billion and grew by 28.3 percent , (Source: IMS MAT March 2012). IMS ranks Indian pharmaceutical industry 14th in terms of value and 3rd in volume globally (Jan-Dec 2011).

A kaleidoscopic view of India in the coming years show favourable demographics that will fuel the growth of the healthcare and pharmaceutical sector - rising disposable income levels, increasing population and shift in disease patterns. Yet on the other hand, private expenditure on health as a percentage of total expenditure on health is 69.7 percent (2009) as per World Health Statistics 2012 by WHO. Health care - both at primary and secondary level will be driven by private providers. Changes in lifestyle, morbidity patterns and increasing penetration of private hospital based health care services will all call for a dynamic and evolving approach to healthcare. The pharmaceutical industry will have to seize the opportunities and challenges that this change will stimulate and will have to find innovative ways to address them. Ernst & Young has forecast that India will be one of the top 10 pharmaceutical markets in the world by 2015, along with Brazil and China.

Given the present inequities that exist in healthcare, the pharmaceutical industry will need to consolidate its growth story by expanding beyond cities to smaller towns.

OPPORTUNITIES, THREATS, RISKS & CONCERNS

The Government website on 'India - Opportunities - a guide to do business in India' states that 'the government, along with participation from the private sector, is planning to invest USD 1 billion to USD 2 billion in an effort to make India one of the top five global pharmaceutical innovation hubs by 2020. This clearly emphasizes the opportunities that will unfold for pharmaceutical sector in the coming years. Growth drivers like increased awareness of health care technology and focus on accessibility will drive innovation for the industry. The promising intent shown by the government when coupled with other pieces of the health pie like health insurance, improved health care delivery and diagnostic services can be harnessed to redefine the contributions of pharmaceutical sector for a healthier India.

The pharmaceutical sector will continue to attract investments with Mergers & Acquisitions paving growth; giving it substantial value. However, the recent government curbs on FDI in pharma will keep the M&A story in the background with India well missing the bus. Policy reforms are critical to ensure the growth of the pharmaceutical sector but the recent regulatory uncertainties like the proposed new drug policy coupled with the policy paralysis and economic downturn could cripple the growth curve.

The need of the hour is to develop integrated approaches to provide solutions that go beyond the pill and bring in value across the health care delivery chain. The intent of the government needs to be translated into increased budgetary spends on healthcare, R&D, positive reforms for the pharmaceutical sector and by ensuring transparent processes and systems that provide a level field for all players in the sector. Unless that happens, reforms will be fragmented, thus denying the vast population the benefit of innovation and research based quality drugs that the industry can bring to the country.

REVIEW OF OPERATIONS - BUSINESS SEGMENT: PHARMACEUTICAL

Your Company continued to record double digit growth for the year under review and has grown faster than the therapeutic segments in Respiratory, Pain, Neuro CNS (Source: IMS TSA MAT MAR '12) Currently, your Company is growing at 12.6% and has a market share of 2.3% (Source: IMS-TSA MAT MAR '12). As was the case last year, a significant proportion of the growth has come from increased volumes by revitalizing growth in core brands. Our current portfolio includes some of India's best known brands, with six of our key brands being in the list of top 100 brands in the industry.

Your Company's aggressive investment in geographic expansion, increased focus on key prescribers and emphasis on performance management has resulted in increased market share of these brands.

The pharmaceutical division has been aligned and is better positioned to address our customer needs. In addition to new products, your Company also entered into chronic segments such as neuroscience which is one of the fastest growing markets in India. Given the high prevalence of neuropsychiatric illness and low awareness and diagnosis, this segment can drive growth for your Company. The Pfizer Neuroscience team have a 150 strong field force with an augmented and fortified portfolio consisting of branded generics and global brands.

The business imperative of the Rx to OTC Business Unit (BU) is to engage three stakeholders - doctors, trade channel partners like stockists, pharmacies and consumers through a revitalized and augmented Rx to OTC portfolio for wellness and common ailments. This BU has a presence in Gastro, Cough, Food Supplement and Personal Care. The key growth drivers for this BU are lifecycle management of existing mature products like Gelusil and Corex Dx, launch of new Branded Value Offerings (BVOs) to augment the portfolio, focus on customer reach and customer engagement.

Some of the Company's established brands like Corex, Becosules, Minipress XL, Lyrica, Gelusil showed double digit growth. The slow down in the Anti - infective segment impacted Magnex Growth during the year and we expect that this trend will soon be reversed. Your Company has launched 26 Branded Value Offerings (BVOs) during the year under review mainly in the anti- infective, analgesic, CNS, CVS and diabetes segment. The Pharmaceutical Segment of your Company recorded a growth of 14%. Consequent to the global termination of the agreement with Biocon, the Company withdrew Insulin products from the market which had a marginal impact on the revenue and cost.

BUSINESS SEGMENT: ANIMAL HEALTH

Indian animal health market is growing at 5% growth rate. Dairy, Poultry and Companion animals are three major verticals that make up more than 95% of the market. During the financial year under review, your Company's Animal Health division recorded a revenue growth of 12% on an annulized basis.

The Dairy Sector in India is one of the fastest growing in the world, with milk production growing at a CAGR of 3.5% over the last decade. Considering the demands of the growing population, the country is going to need 172.2 MMT of milk by 2021-22. The Government has plans to ramp up per capita milk productivity in the country to WHO standards, and has already initiated the process of growth enablers, in the form of the National Dairy Plan, with special emphasis on increasing productivity of dairy animals, improving genetic potential of the animals, improving access to fodder and market penetration by creating and improving the broad-based veterinary infrastructure in the country. These initiatives will help in achieving the dual objective of self sufficiency in domestic milk production and inclusive growth in rural areas. Growth opportunities are being leveraged through field force expansion to increase market reach.

India ranks 3rd in global egg production and 5th in global broiler meat production.Population rise, increasing incomes and lower prices are key growth drivers. Growing influence of food service and retail chains on poultry production and end-consumer preferences are slowly shifting from live bird markets to processed and chilled products. Biological products are a focus area of the Poultry team.

The Companion Animal business is growing at 12% per annum and Pfizer continues to be a major player in the biological segment. Growth stimulators in this segment are the need for companionship, higher disposable income, responsible pet ownership and media attention. Targeted focus on the top brands and improved market penetration has yielded positive results for the business during the year under review.

In July 2011, Pfizer Inc, USA, ("Pfizer") the Ultimate Holding Company, announced that it was reviewing strategic alternatives for its global animal health business. In connection with the strategic review Pfizer undertook certain internal reorganization steps that were intended to give Pfizer the broadest possible flexibility to pursue a range of possible transactions in the future.

On April 2, 2012, your Company transferred its Animal Health Business to its wholly owned subsidiary, Pfizer Animal Pharma Private Limited by way of a slump sale for a consideration of Rs 440 crores, subject to adjustment for working capital.

BUSINESS SEGMENT: SERVICES - CLINICAL OPERATIONS

The Clinical Operations group is responsible for all clinical trials conducted by the Company within the country. The Clinical Operations group comprises four segments: Study Management; India Regional Monitoring Group; Business Operations and Clinical Quality Services. Your Company has contributed greatly to the development of clinical research in the country and holds a position of leadership in this area. Initiatives such as the establishment of preferred research centers, core research sites and earning trust initiative helped to establish training partnerships that are key to Pfizer's commitment to develop research capacity and supporting scientific and medical professionalism.

Your Company has partnered with other pharmaceutical companies, contract research organizations and investigators through the Indian Society for Clinical Research (ISCR) - a professional society aimed at raising the standards of clinical research in the country as well as Academy for Clinical Excellence.

MEDICAL RESEARCH DIVISION:

Medical Affairs and Research (MAR) Division consists of about 50 medical doctors that represent the medical conscience of your Company and they support scientific presentations to the medical community, investigator- initiated research, medical information, design of local clinical programs and scientific engagements with physicians to the product training of sales force and new product evaluations.

The medical team is responsible for ensuring compliance of promotional practices to international and local industry standards as well as regulatory requirements. The team also provides medical support to regulatory registration as well as safety review and labeling activities.

Notable contributions have been made by MAR Division in evaluation, differentiation and positioning of Branded Value Offerings and medico-marketing activities for in- line and line extensions.

This year, a team of Medical Research Specialists was taken on board to focus on knowledge dissemination to clinicians and improve health outcomes for patients. The key initiatives of the MAR Division were focused around World Kidney Day in March, World Hypertension Day in May, World Heart Day in September and World Diabetes Day in November. Around these days, activities like patient awareness camps, Continuous Medical Education (CME) programs and educational sessions were conducted in institutions and teaching hospitals. By associating with these events throughout the year, the Company emphasized on the management of hypertension and also on protecting the vital organs that may be affected by hypertension thus projecting our vision of working together for a healthier world. A novel concept of antibiotic stewardship was disseminated this year by conducting international speaker programs and advisory board meetings. The Medical Division also contributed to overall leadership development in physicians through LOGOS initiative and a number of other therapy shaping activities.

Noteworthy contributions were made for the Rx to OTC BU through initiation of CMEs for their doctors for the first time on "Clinical Insights - Cough Management", which was highly appreciated by the physicians.

HUMAN RESOURCES DIVISION

Globally, the HR function was involved in redesigning the HR structure and processes to make the function more agile and adaptable to deliver HR solutions to the business. Some of the initiatives made are HR Operating Model, Global Shared Service, Talent Acquisition, OWN IT Culture. While being aligned to our budgetary commitments, we are also committed to standardization, automation and consolidation of processes to efficiently and effectively manage an increasing workforce across multiple locations.

Diversity

To further the objective of Diversity through Women's Allies (DIWA), a three-year-old program to harness the unique potential of women, your Company established an India Women's Council. It has three work streams - one focused on attracting and engaging women in sales; and the second to engage women customers who are becoming important decision makers in Indian healthcare. The third work stream, which focuses on networking and communication, created a women's blog and conducted several career guidance workshops during the year. A training program on 'Empowering women for Field Force Effectiveness' customized for women sales colleagues has been launched with the support of business units and enabling functions.

Talent Management Process

Your Company has a robust talent management process, supported by on-line assessment and development resources, to ensure that we have the right people to take the company forward. Colleagues in the Talent Pool are involved in high level projects identified by the organization.

We continue our practice of infusing good talent, by inducting Management Graduates from leading India business schools and putting them through a year-long structured program.

Employee Relations

Overall, Employee Relations were cordial. Your Company's present employee strength is 3151.

MANUFACTURING OPERATIONS

Your Company's manufacturing is an integral part of Pfizer Global Supply Operations which focuses its activities towards ensuring that quality products are available as per business requirements. With more than 150 years of manufacturing experience in markets across the world, your Company today is one of the most trusted names in the manufacture and supply of high quality products in the world.

Your Company has always endeavored to bring newer drugs to the market to improve patient health and contribute to a better standard of living. Last year your Company launched several new Branded Value Offerings (BVOs) and new products.

Manufacturing operations are carried out in full compliance with local statutory laws and Pfizer standards. The Company's continued focus on non-renewable resources has created an excellent model for environmental sustainability. There is a constant emphasis on conservation of resources across manufacturing sites and to reduce waste. The excellent Environment, Health and Safety standards of the Company have earned Pfizer India recognition in the form of ISO 14001:2004 and OHSAS 18001:2007. The ISO 14001 certification reiterates the Company's focus on Environment, Health and Safety.

Your Company's Manufacturing Operations have fully embraced the company-wide culture initiative OWN IT, to create an Ownership culture. This initiative will provide us an opportunity to instill a culture where we can maximize our potential. The new initiative revolves around Owning the Business and Winning at the Market place with a focus on results and creating a culture of trust.

Various initiatives such as Kaizen Schemes, Rewards and Recognition, 'Continuous Improvement' programs, now better known as Operational Excellence (OE) have been initiated and are contributing to employee involvement, improved efficiency and productivity. These initiatives have resulted in successful completion of many Yellow Belt, Green Belt and Black Belt projects. Training and skill enhancement are also ongoing initiatives that are the core of our manufacturing operations.

We value the confidence and faith reposed by the patients in support of 'Pfizer Quality' products. We continue to have a leading portfolio of medicines that prevent, treat and cure diseases across a broad range of therapeutic areas.

CORPORATE AFFAIRS

The Corporate Affairs Function (CAF) is a blend of regulatory and policy shaping activities, coupled with activities that fulfill the Company's strategic role as a conscientious Corporate. Your Company continued to develop innovative partnership programs that demonstrate the Company's support to addressing the challenges of the UN Millennium Development Goals (MDGs). For instance, the Tuberculosis (TB) treatment centre in an urban slum in New Delhi empowers the disadvantaged through intensive education, ensuring treatment compliance and reduction of stigma. In the partnership project by your Company with OpAsha, your Company has supported a TB centre in the urban slums of New Delhi. The Government provides free medicines and services under the National TB Control Program and your Company puts in an investment that together works to educate more than 40,000 urban slum dwellers on the need for proper treatment against TB. OpAsha runs several such centers across the country.

The nearly decade old Arpana Mother and Child Project continues with its focus on holistic approach to healthcare and economic empowerment of the community, the Arpana Mother and Child Project'. The program has had 94 percent coverage for its antenatal check up activities, resulting in better all round healthcare and awareness of health needs of pregnant women and children less than five years of age.

The Community Pharmacy in Orissa has completed one year and your Company in relationship with its partners - the Micro Insurance Academy (MIA) and Mahashakti, has demonstrated the true value of sustainable programs that can run on Private Public Partnership platform. The innovative program establishes your Company's thought leadership to develop sustainable holistic approaches to advance healthcare goals of the country by piloting innovative healthcare access model making quality medicines and service delivery available at remote areas and to empower community in accessing health services.

The goal of The District Integrated Health & Family Welfare Society (DIHFWS), Zilla Parishad, Thane is to improve the availability of and access to quality health care by people, especially for those residing in rural areas, the poor, women and children, in accordance with the National Rural Health Mission (NRHM). The DIHFWS, in partnership with Impact India Foundation (IIF) and your Company is working towards upgrading and maintenance of the Parli Primary Health Centres (PHCs), Parli and Mangrul Sub Centre located in Thane District, Maharashtra. This pilot project is an outcome of your Company's endeavor to enable access to healthcare to remote areas in the country.

CAF in association with OPPI, FICCI, CII and ASSOCHAM continued its engagement of external stakeholders on various policy issues like patents, pricing and FDI. Abiding by the credo 'One voice, One strategy', your Company made several joint representations to senior government officials to enforce the industry dialogue and views on several critical policy areas.

CAF oversaw charitable contributions, product donations and participated in various initiatives to promote corporate governance, environment and social responsibility.

Your Company has been recognized as one of the Best Companies to Work for in India by the Business Today- Indicus-PeopleStrong survey in 2011. This is the second consecutive year in which Your Company has received this recognition from the leading business publication.

The Pharma Leaders Magazine named Your Company as the Multinational Company of the Year 2011 and Managing Director Mr. Kewal Handa as the Business Leader of the Year 2011.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has clearly laid down policies, guidelines and procedures that form part of internal control system, which provide for automatic checks and balances. Your Company has maintained a proper and adequate system of internal controls. This is to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and that transactions are authorized, recorded and reported diligently. Your Company's internal control systems are commensurate with the nature and size of its business operations.

An extensive program of Compliance, Control and Risk Team (CCR) further supplements the Company's internal control systems. This is done by the CCR, which is supported by an independent firm of chartered accountants, who review the effectiveness and efficiency of these systems and procedures. The management periodically reviews reports of internal auditors. All significant Internal Audit observations and follow-up actions thereon are brought to the notice of the Audit Committee of the Board and corrective steps recommended for implementation. The Audit Committee of the Board addresses significant issues raised by the CCR, Cost Auditors and Statutory Auditors.

Your Company has a well defined Standard Operating Procedure for identifying and mitigating risks across all divisions of the Company. The Company periodically identifies all risks and prioritizes the major risk and develops appropriate plans for its mitigation. The senior management has ownership of the major risks and its management and mitigation plans.

The internal control system is designed to ensure that all financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. Pradip Shah retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Dr. Bomi Gagrat, Executive Director - Technical Operations, retired from the services of the Company with effect from June 30 2011. Dr. Gagrat continued as Non-Executive Director on the Board with effect from July 1, 2011. Dr. Gagrat resigned from the Board with effect from May 21, 2012. Your Directors wish to place on record their appreciation for the valuable contributions made by Dr. Gagrat.

The Board of Directors at their meeting held on June 28, 2012 appointed Mr. Aijaz Tobaccowalla as Additional Director pursuant to Section 260 of the Companies Act, 1956 ("the Act") who will hold office till the date of the ensuing Annual General Meeting. The Company has received his candidature as a Director from a member pursuant to Section 257 of the said Act. Mr. Tobaccowalla's appointment is being placed before the shareholders for their approval at the ensuing Annual General Meeting. The information required to be furnished under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the 61st Annual General Meeting.

Mr. Kewal Handa, resigned as the Director and Managing Director of the Company with effect from end of day of August 15, 2012. Your Directors wish to place on record their appreciation for the valuable contributions made by Mr. Handa.

The Board of Directors at the meeting held on June 28, 2012 appointed Mr. Aijaz Tobaccowalla as the Managing Director of the Company with effect August 16, 2012. Mr. Tobaccowalla's appointment and remuneration will be subject to approval of the members at the ensuing Annual General Meeting and also will be subject to approval of the Central Government.

The Board of Directors at their meeting held on May 21, 2012 appointed Mr. Uday Khanna as Additional Director pursuant to Section 260 of the Act, who will hold office till the date of the ensuing Annual General Meeting. The Company has received his candidature as a Director from a member pursuant to Section 257 of the said Act. Mr. Khanna's appointment is being placed before the shareholders for their approval at the ensuing Annual General Meeting. The information required to be furnished under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the 61st Annual General Meeting.

The Board of Directors at their meeting held on May 21, 2012 appointed Mr. Vivek Dhariwal as Additional Director pursuant to Section 260 of the Act, who will hold office till the date of the ensuing Annual General Meeting. The Company has received his candidature as a Director from a member pursuant to Section 257 of the said Act. The Board of Directors at their meeting held on May 21, 2012 also appointed Mr. Dhariwal as a Whole-time Director designated as Executive Director, Technical Operation for a period of 5 years. Mr. Dhariwal's appointment and remuneration are being placed before the shareholders for their approval at the ensuing Annual General Meeting. The information required to be furnished under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the 61st Annual General Meeting.

The Board of Directors at their meeting held on May 21, 2012 appointed Mr. Sunil Madhok as Additional Director pursuant to Section 260 of the Act, who will hold office till the date of the ensuing Annual General Meeting. The Company has received his candidature as a Director from a member pursuant to Section 257 of the said Act. The Board of Directors at their meeting held on May 21, 2012 also appointed Mr. Madhok as a Whole-time Director designated as Executive Director, Business Operation for a period of 3 years or till the date of his retirement, whichever is earlier. Mr. Madhok's appointment and remuneration are being placed before the shareholders for their approval at the ensuing Annual General Meeting. The information required to be furnished under Clause 49 IV (G) of the Listing Agreement is given in the Notice of the 61st Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors confirm the following.

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

ii. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended March 31, 2012 and of the profit of the Company for that period.

iii. Your Directors 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.

iv. Your Directors have prepared the attached Statement of Accounts for the Financial Year ended March 31, 2012, on a going 'concern basis'.

CORPORATE GOVERNANCE

The Company has taken requisite steps to comply with the recommendations concerning Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report.

A separate report on Corporate Governance forms part of this Annual Report.

SUBSIDIARY COMPANY

As per Section 212 of the Companies Act, 1956 ("the Act") the Company is required to attach the to Directors' Report, Balance Sheet and Statement of Profit and Loss of its Subsidiary. However, the Central Government has granted general exemption from complying with Section 212 of the Act to all companies vide Notification No.5/ 12/2007-CL-III dated February 8, 2011. Further In terms of Para 11 (a) of Accounting Standard (AS 21), the Company is not required to consolidate the accounts of its wholly-owned subsidiary company, Pfizer Animal Pharma Private Limited, since the control of the same is held for a temporary period as a pre-step for subsequent sale/divestment.

In view of the above, the Company has not consolidated the accounts of its subsidiary, which was incorporated on February 10, 2012, and has not attached the Directors' Report, Balance Sheet and statement of Profit & Loss of its Subsidiary. The statement of accounts as on March 31, 2012 and related information of the Subsidiary will be made available upon request by any shareholders of the Company and the Subsidiary. The statement of accounts as on March 31, 2012 of the Subsidiary Company will be available for inspection by any member at the Registered Office of the Company between 11.00 a.m. to 1.00 p.m. on any working day.

OTHER INFORMATION

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, information pertaining to Conservation of Energy, Technology Absorption and Exports is given as Annexure 'I' to this Report.

The information required under Section 217(2A) of the Companies Act, 1956 ("the Act") read with the Rules framed thereunder forms part of this Report and marked as Annexure 'II'. However, as per provision of Section 219 (1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Company's Registered Office.

AUDITORS

M/s. B S R & Co., the Company's Auditors, will retire at the conclusion of the ensuing Annual General Meeting. They have given their consent to continue to act as Auditors of the Company for the current year, if re- appointed.

COST AUDITORS

Pursuant to the provisions of Section 233B of the Companies Act, 1956, necessary application has been submitted to the Ministry of Corporate Affairs, for the appointment of M/s. RA & Co. as Cost Auditors to audit the cost accounts maintained by the Company in respect of Formulations for the year ending March 31, 2013. The Company has filed its Cost Audit Report for the sixteen months ended March 31, 2011 on 26th September, 2011 and the due date for filling the Cost Audit Report for the financial year ended March 31, 2012 is on 27th September, 2012.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their sincere appreciation for the support and assistance extended by the Company's suppliers and business associates. Your Directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management.

Your Directors wish to place on record their appreciation for the support and guidance provided by its Parent Company, Pfizer Inc., USA.

For and on behalf of the

Board of Directors of Pfizer Limited

R.A. SHAH

Mumbai, June 28, 2012 Chairman

 
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