Directors Report of AstraZeneca Pharma India Ltd.
Mar 31, 2023
Business
The Company registered product sales of '' 9,417 million versus last year sales of '' 7,614 million delivering growth of 24%. Also, Company achieved a total comprehensive income of '' 967 million, with a growth of 62%, during the financial year 2022-23.
Aligned to our global strategy, Growth through innovation strategy of the Company worked well with innovative molecules like Osimertinib (Tagrisso), Olaparib (Lynparza), Durvalumab (Imfinzi), Benralizumab (Fasenra) and Acalabrutinib (Calquence). Ticagrelor (Brilinta) is approved for treatment in Acute Coronary Syndrome (ACS) and used in high-risk Post MI patients further gaining momentum with an achievement of 26.5% growth year on year despite loss of exclusivity by parent company. Ticagrelor continues to be the market leader with value share of 19.9% as against 17.2% last year in Oral Anti Platelets (OAP) market as per IQVIA report MAT March 2023. Our continued focus on awareness of use of potent anti-platelet drugs in ACS including the correct diagnosis and science behind the product led us to this achievement despite the presence of several generics in the market.
In the current year (2022-23), Fasenra the first Biologic from AstraZeneca to treat Severe Eosinophilic Asthma (SEA) has touched more than 400 Patients. Fasenra has gained significant traction amongst Pulmonologists. It is regarded as the most effective, convenient and safe therapy for SEA.
Forxiga franchise, as part of the SGLT2 class of drug (Sodium Glucose Cotransporter Inhibitors), grew despite strong headwinds from several companies who launched generic versions of Dapagliflozin. We continue to focus on high science and approval of Forxiga 10 mg in new indications like HFrEF & CKD which are helping SGLT2 inhibitors to be used early for these indications irrespective of the presence of type 2 diabetes.
In the fiscal year of 2022-23, the Oncology Business achieved a notable double-digit growth of 48%. This success was bolstered to strong performance recorded by Tagrisso (Osimertinib), Imfinzi (Durvalumab) and Lynparza (Olaparib) showing healthy share gains India-wide, besides continued strong market growth coupled with the approval and launch of the following new indications:
1. TOPAZ 1 - It is the first global phase 3 study to report
positive results of Imfinzi (Durvalumab) in combination with chemotherapy as the first line treatment for advanced Biliary Tract Cancer (BTC), a treatment setting with no major global treatment advancement in over a decade. The combination
Your Directors are pleased to present the 44th Annual Report together with the Audited Financial Statements of the Company for the financial year ended March 31,2023.
|
Financial Results |
('' in million) |
|
|
Particulars |
2022- 23 |
2021-22 |
|
Sales and Other Income |
10,291 |
8,204 |
|
Profit/(Loss) Before Tax |
1,341 |
830 |
|
Provision for Taxation |
||
|
- Income Tax |
383 |
226 |
|
- Adjustment for Deferred Tax |
(35) |
(12) |
|
Total Tax |
348 |
214 |
|
Profit/(Loss) after Taxation |
993 |
616 |
|
Other comprehensive income/(loss) for the year |
(26) |
(17) |
|
Total comprehensive income for the year |
967 |
599 |
|
Surplus brought forward from the previous year |
3,790 |
3,241 |
|
Impact of Ind AS 116 |
- |
- |
|
Total amount available for appropriation |
4,756 |
3,840 |
|
Appropriation made by Directors |
||
|
Transfer to General Reserve |
- |
- |
|
Appropriation recommended by Directors |
||
|
Dividend |
(200) |
(50) |
|
Tax on proposed Dividend |
- |
- |
|
Surplus carried over |
4,556 |
3,790 |
Company whose names appear in the Register of Members and whose names appear as beneficial owners as per the beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited as on record date fixed for this purpose.
The Board is pleased to recommend a dividend of '' 16/- per equity share of '' 2 each, which if approved at the forthcoming Annual General Meeting, will be paid to all those equity shareholders of the
was not only statistically significant but also showed clinically meaningful prolonged overall survival versus the comparative group on Chemotherapy & Placebo. This immunotherapy-based regimen is the new Standard of Care in the Treatment of Advanced BTC.
2. ADAURA - for the adjuvant treatment of patients with early-stage EGFRm non-small cell lung cancer (NSCLC) that recorded a noteworthy reduction of 79% in disease recurrence or death with Tagrisso (Osimertinib). Updated results from ADAURA showed adjuvant Osimertinib continued to prolong the overall survival for these patients who receive adjuvant Osimertinib after surgical resection.
3. OlympiA - Lynparza became the first and only approved medicine targeting BRCAm in early breast cancer as adjuvant treatment for gBRCAm HER2-negative high-risk patients based on the OlympiA Phase III trial. This indication was launched
in India in September 2022 and focussed through evidence generation (prevalence study) and diagnostic patient support programme in 2023.
Tagrisso (Osimertinib) has sustained its prominent position as the largest brand specialising in the treatment of Lung Cancer in India as per the recent IPSOS. In February 2022, the Company took a strategic decision to rationalise the price in the Indian market, as part of their unwavering commitment to enhance patient access to innovative treatments and in recognition of the affordability challenges faced by patients seeking such therapies. This price change has been received well in the market and has led to 40% growth in new patient enrolments (April 2022 - March 2023) post sustainability programme implementation.
Lynparza (Olaparib), an Oral PARP Inhibitor used to treat PARP dependent tumors like ovarian cancer, breast cancer, prostate cancer and pancreatic cancer, which was launched in February 2019, continues to be a leader in Ovarian Cancer market. After having established BRCA testing as a standard procedure in Ovarian Cancer patients, the Company has now created partnerships with ecosystem in expanding on Homologous Recombination Deficiency testing capability in the market, helping more patients benefit from the available targeted treatment therapies like Olaparib.
Imfinzi (Durvalumab) was launched in October 2019 for the patients with unresectable, Stage III NSCLC whose disease has not progressed following platinum-based chemotherapy and radiation therapy and in extensive stage small cell lung cancer continues to progress well. The brand registered growth of 185% during the year.
We are delighted to announce that in the Therapeutic Area of Oncology, the Company has gained 12 positions in the last 3 years and is now ranked third overall. It is also the third fastest growing MNC in India as per the latest available IPSOS report MAT December 2022 (released in May 2023).
Last year, we saw new Covid variants surface which kept us alert enough to consider all the risks before coming back to normal. Concerned about their personal lives, employees were deeply concerned about the threat from COVID-19. While the world was stepping out of the pandemic environment, the Company did not lower its guard completely and collaborated with the Companyâs medical team to build health and well-being advisory for the employees that guided the ways of working.
In tandem with government directives, from time to time we initiated two or three days of working from office to strike a balance between
Manufacturing
Despite the ongoing challenges in volatility, the factory delivered strong results for 2022. Our excellent safety and quality performance at manufacturing site continued with zero Lost Time Injury and no critical observations in both internal and external quality audits.
Our supply performance was strong with 100% stock availability and zero stockouts, ensuring unrestricted supply to patients.
Our lean and digital journey continues, focusing on low cost/no cost digital solutions. Multiple power apps dashboards have been deployed, giving us real time data, making our processes more efficient and providing significant tangible benefits.
Procurement saving targets were achieved by locally sourcing non-critical excipients and foil.
Productivity projects for site were:
⢠Rationalising pack sizes, such as Brilinta 4x14s and now Forxiga 7x14s.
⢠Moved to single shift operations
⢠Packaging Line balancing - by 2023 reduction of 2 packing lines
To deliver our bold ambition of zero carbon by 2025, the Operations has developed Carbon zero glidepath, with many initiatives such as:
⢠Air handling unit Ramp down
⢠Heat pump for HVAC system
business continuity and safety of the employees. All employees were advised to self-test and declare as they continued meeting external stakeholders as and when necessary. Meanwhile, technology and our omnichannel approach that was set up early, enabled us to continue work in a hybrid fashion. Teams connected with healthcare professionals and other stakeholders providing all support they needed to continue benefiting patients and ensure access to medicine. Our diverse mode of engagement continued last year that helped us to serve patients effectively.
Management has considered its liquidity position as at March 31, 2023 and over the next twelve months, by performing cash flow assessments and a sensitivity analysis thereon and has concluded that the Company will have adequate liquidity in the ordinary course of business.
⢠Quality Control Lab achieving My Green Lab Certification
The manufacturing site is now using 95-97% green energy. Further, there is zero discharge for effluent and the water is being treated and reused at site.
People are in the heart of everything we do, hence, the operations have rolled out many inclusion and diversity initiatives including manufacturing inclusion workshops for operators.
Material changes and commitment, if any, affecting financial position of the Company from the end of the Financial Year and till the date of this Report
There has been no material change and commitment affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
During the year under review, the Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
Safety, Health and Environment
During the year 2022, Safety, Health and well-being of employees continued to be an important focus area with an emphasis on COVID support. Teleservices and all new Employee Assistance Programme with new EAP partner were added to the We Care For You suite. We continued to distribute quality PPE on a regular basis to all teams in order to provide a safe working environment for our employees. Annual health check-up was rolled out for employees in field as well as in the head office of the Company.
Human Resources and Employee Relations
The Company is committed to provide career opportunities for its employees and enable their growth and development. There is continued focus on enabling career development and learning opportunities for the employees. During the year, the Company continued with developed focus by encouraging employees to take ownership of their development through innovative experiences.
The Company also continued to invest in talent development programmes to accelerate our talent pipeline for country leadership roles with continued investment on education, exposure and experience through Global, Regional and Local programmes. The Company continues to transform from rating-based Performance Management approach to Performance Development approach focused on continuous coaching and feed forward culture.
The total number of employees of the Company as on March 31,2023 was 947 as against 1,183 as on March 31, 2022.
In the last yearâs Boardâs Report, members were inter-alia informed about Arbitration proceedings initiated by National Highway Authority of India (NHAI) before Arbitrator at Bengaluru in relation to first acquisition of land made by NHAI in 2004 and the arbitration proceedings invoked by the Company seeking, inter-alia, enhancement of compensation from NHAI in respect of second acquisition of land made by NHAI in 2011. During the financial
year under review, the Arbitration proceedings initiated by NHAI in relation to first acquisition of land by NHAI in 2004 was heard by the Arbitrator and the same is now reserved for passing award. As regards Arbitration on second acquisition by NHAI, there has been no reportable development.
Further, the members were also informed about Writ Petition filed by the Company before the Honâble High Court of Karnataka challenging demand notice received from Bruhat Bengaluru Mahanagara Palike (BBMP) dated August 7, 2014 demanding improvement charges from the Company and the interim stay granted by the Honâble High Court of Karnataka. During the year under review, the matter was heard and reserved for judgement. However, the court has posted the matter back for further hearing, hence there is no reportable development.
In the last yearâs Boardâs Report, the members were also informed about the Company receiving a demand notice for an amount of ''157.39 crore (and interest thereupon) under Trade Margin Rationalisation notification (âTMR notificationâ) from National Pharmaceutical Pricing Authority (NPPA) alleging overcharging of a patented anti-cancer drug sold during the period of March 8, 2019 to January 31, 2021. The said drug has been included with certain other anti-cancer medicines, on which trade margin caps are applicable under TMR notification. Based on evaluation, management is of the view that the TMR notification is not applicable to the aforesaid patented drug and all applicable laws relating to the pricing of the product have been complied with. The Company has filed a Writ Petition before the High Court of Delhi challenging the NPPAâs demand notice, and the Writ Petition is currently pending hearing.
Transfer to Investor Education and Protection Fund
There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in the financial year 2022-23.
Directorsâ Responsibility Statement
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors state in terms of Section 134(5) of the Companies Act, 2013 (the Act):
(a) that in the preparation of the annual financial statements for the year ended March 31,2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) that they had 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 for the year ended March 31, 2023 and of the profit and loss of the Company for the year ended on that date.
(c) that they had 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.
(d) that they had prepared the annual financial statements on a going concern basis.
(e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The details in respect of internal financial controls and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to provide a healthy environment to all its employees. There is zero tolerance of discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year under review, there was no complaint received by the Internal Complaints Committee.
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year, 6 meetings of the Board were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (âListing Regulationsâ), performance evaluation exercise was carried out for evaluation of the performance of the Board as a Whole, the Chairman, Independent Directors and the Non-Independent Directors.
The Company had formulated a questionnaire to carry out the evaluation exercise. The questionnaire has been structured to embed various parameters based on identified criteria such as composition, functioning of board/committees, process, individual roles/obligations etc., and framework to carry out the evaluation effectively.
Further as part of the process, Chairperson of the Nomination and Remuneration Committee provided feedback to the Board members on the evaluation carried.
As required under Listing Regulations, the Independent Directors held a separate meeting on February 10, 2023. All the Independent Directors attended the meeting. The Independent Directors discussed/reviewed the matters specified in Regulation 25(4) of the Listing Regulations.
Nomination and Remuneration Policy of the Company
The Company has adopted a Nomination and Remuneration Policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company, which inter alagovern the selection/nomination of Board members, appointment to Senior Management levels, review and approval of their remuneration etc.
The policy is available at https://www.astrazeneca.in/content/dam/
az-in/pdf/files/AprNomination%20and%20Remuneration%20Policy.
Vigil Mechanism/Whistle-Blower Policy
The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct.
The mechanism provides for adequate safeguards to Director(s)/ Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairperson of the Audit Committee. The Whistle Blowing Policy is available at https://www.astrazeneca.in/content/dam/az-in/pdf/2019/Whistle Blowing Policy.pdf
The Company has adopted a Dividend Distribution Policy which is annexed as Annexure - I, which forms part of this Report.
The Dividend Distribution Policy is also available at https://
www.astrazeneca.in/content/dam/az-in/pdf/2017/Dividend%20
Distribution%20Policy.pdf
Conservation of Energy, Technology Absorption,Foreign Exchange Earnings and Outgo
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 as Annexure - II, which forms part of this Report.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and Senior Management which may have a potential conflict with the interest of the Company at large.
The Company entered into materially significant related party transactions with AstraZeneca UK Limited and AstraZeneca AB, Sweden for purchase, transfer and receipt of products, goods, material, services and reimbursement on account of transfer price or other obligations. The same is within the limits duly approved by the members at the 43rd Annual General Meeting.
Further, the Company has taken the approval of members of the Company at its 43rd Annual General Meeting for the transactions to be entered into by the Company with AstraZeneca UK and AstraZeneca AB Sweden which will be valid till the conclusion of 44th Annual General Meeting.
All related party transactions are placed before the Audit Committee for its prior approval. Omnibus approval of the Audit Committee is obtained for transactions which are repetitive in nature or when the need for them cannot be foreseen in advance.
The Company has adopted a Policy for dealing with related party transactions. The Policy as approved by the Board is available at https://www.astrazeneca.in/content/dam/az-in/pdf/files/Policy%20 on%20Related%20Party%20TransactionsS.pdf
Details of the related party transactions as required under Section 134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, are annexed as Annexure - III, which forms part of this Report.
The Company has in place a mechanism to inform the Board about the risk assessment and minimisation procedures and periodical review is carried out to ensure that executive management controls risks by means of a properly defined framework.
The Company has formulated a Risk Management Policy which will guide the Risk Management Committee and the internal team to effectively manage the risks that the business faces.
The details of Risk Management Committee and its terms of reference are set out in the Corporate Governance Report which forms part of this report.
Corporate Social Responsibility (CSR)
The Companyâs trust in the power of science is sustaining and growing, helping us transform the future of healthcare and the health of people, society and the planet. At AstraZeneca, our purpose and our value of doing the right thing, impels us to strive towards building healthier societies, forging partnerships to tackle major health challenges.
Sustainability at AstraZeneca means harnessing the power of science and innovation and our global reach to build a healthy future for people, society and the planet.
The Company is playing itâs part in tackling the biggest challenges of our time, from climate change to access to healthcare and disease prevention. By using a science-led approach and ensuring we act with integrity and in accordance with our values, the Company is transforming the future of healthcare and making a positive impact.
The Company seeks to create value beyond the impact of our lifechanging medicines, by embedding sustainability into everything.
Our three-pronged Sustainability ambition includes:
⢠Increasing access to life-saving treatments, promoting prevention and strengthening global healthcare resilience and sustainability.
⢠Accelerating the delivery of net-zero healthcare, proactively managing our environmental impact across all activities and investing in nature and biodiversity.
⢠Ensuring ethical, open and inclusive behaviour across.
The Companyâs flagship programme, the âGanga Godavari Screening Programmeâ persisted in its mission to identify the incidence of Cancer in women early-on by conducting preventative screenings among underserved communities.
India has seen a significant increase in cancer cases over the years, particularly in the case of common cancers such as oral, cervical and breast cancers. The number of cases diagnosed in India has risen by 324% between 2017 and 2018. According to GLOBOCAN 2020, an article published by the International Agency for Research on Cancer, there were an estimated 19.3 million new cancer cases worldwide in 2020, which almost 10 million cancer deaths. The overall incidence of cancer was 2-3 times higher in transitioning countries as compared to transitioned countries for both sexes. Unfortunately, breast cancer and cervical cancer are the leading cause of cancer deaths in women in India. The death rates for female breast and cervical cancers were also considerably higher in transitioning countries than in transitioned countries. The global
cancer burden is further expected to rise to 28.4 million cases in 2040, a 47% increase from 2020, which highlights the urgent need for effective cancer prevention and control strategies in countries around the world.
Emerging out of the pandemic hit nation, we strategically chose geographies that were still coming out of the pandemic and needed to kick-start their access to healthcare initiatives in tandem with the support from local districts as well as the community.
The programme focused on spreading awareness and early detection of cancer in women especially between the age of 30-60 years. As we entered in third year of the programme, we spread our reach to multiple regions and on-boarded two partners for the programme i.e. Indian Cancer Society and CAPED India, to spread our work in more communities. With due support from Ministry of Health and Family Welfare, the programme was implemented in over 120 villages in and around Nasik, Mathura and Patna. In order to make the programme more sustainable, we replicated our tri-party support model that could bring in local medical support for patient reference and community-based intelligence to catalyse field work and outreach. Indian Cancer Society and CAPED supported our mission to detect cancer in women early by conducting specialised health camps to check for Ovarian, Breast and Cervical cancer. We also supported women who needed further diagnosis and treatment through a âPatient Navigation Programmeâ, in partnership with local hospital partner such as the Ramakrishna Mission Sevashrama Charitable Hospital and Path Sanjivani Charitable Trust in Mathura.
In all, the programme this year organised over 130 camps and touched over 8,500 women out of which 1,100 women were found to be at risk of cancer and were referred for further medical treatment.
This year, the Company also initiated a programme to complement the National Cancer Grid, a Government of India initiative that links 280 cancer centres across India with the objective of reducing disparities in standards of care by adopting evidence-based management guidelines. It is an attempt to ensure that low-income patients receive high standard of care.
The Company collaborated with Tata Memorial Centre Navya to help promote this initiative to standardise care that has been particularly beneficial in the aftermath of the COVID-19 crisis since it has enabled cancer patients to receive remote opinions through next-gen technology and stay out of hospital. The programme focused on helping patients receive consultations from cancer specialists at Tata Memorial Centre and other National Cancer Grid centres and the pilot this year helped 157 patients across India. Depending on need, sponsored a higher ratio of women to that of men (57 vs 43) and beneficiaries were from 17 different states and union territories with the majority coming from Tamil Nadu, Maharashtra and Uttar Pradesh. To honour our shared objective of helping every cancer patient get access to quality care, the Company has also extended its reach to patients in West Bengal, where the cancer burden is extremely high.
Our global âYoung Health Programmeâ has built a legacy with over a decade old work across multiple communities in Delhi and helped us build a strong roadmap as we replicate the programme in newer territories. This programme founded in partnership with John Hopkins School of Public Health and Plan International, AstraZeneca aims at improving health outcomes of vulnerable youth, by building awareness on the ill-effects of behaviours such as tobacco and alcohol consumption, smoking, unhealthy lifestyle etc. that could lead to Non-communicable diseases (NCD) such as
Cancer, Diabetes, heart ailments etc., in the long run. With a unique working model, this project is implemented by developing youth from the community itself as âPeer Educatorsâ who not only believe in the objective of the programme but also act as influencers in driving change within the community.
This year we completed one year of expanding our initiative in Karnataka.
With over 15 âHealth Information Centresâ (HICs) in Delhi that are the focal points in identified communities helping us spread the right information on NCD Prevention and Management from generating awareness to identifying sustainable solutions to influence behaviour, we now have 6 HICs in unauthorised colonies of Mahadevpura, Varthur, Yelahanka, Dasarahalli and K. R. Puram in Bengaluru running successfully. Our primary objectives with this programme are:
⢠To empower young people through building knowledge and capacity on NCD prevention, enabling them to take informed decisions about their health, using peer education and community outreach.
⢠To increase awareness and knowledge of parents, teachers and community leaders on NCD prevention to create a supportive and enabling environment for young people.
⢠To strengthen health services in the targeted area for providing access to quality youth friendly sexual and reproductive health rights and NCD services.
⢠To advocate with state government for strengthening institutional systems and policy environment that supports NCD prevention and promotes the holistic health of young people.
We are refining our strategies to work in these new communities and have been able to capitalise on the support from local government in Karnataka including Ministry of Health and Family Welfare, NCD Cell and national health mission teams in not only implementing the programme but also strategically strengthening our grassroot connections by involving community government health offices.
Some of our activities in these communities include:
⢠Peer educator identification and training for young people, an integral process of the programme that helps to develop a cohort of peer educators and ambassadors to take the agenda forward in the community. The main focus of the training
is to empower them with technical knowledge on NCD risk behaviours and how they can share this knowledge with their peers in schools and communities.
These peer educators are working as agents of change in the community and using different platform including observation of days, Nehru Yuva Kendra Sansthan, Rajiv Gandhi National Institute of Youth Development Health Department for raising the voice of young people on NCD prevention.
⢠Training/sensitisation of school teachers from government schools on harms of alcohol & tobacco consumption, risky sexual behaviours, unhealthy diet and physical inactivity was a crucial activity to be able to reinforce the message in the community from all influencers. This helped in building knowledge of the teachers to cascade the knowledge forward to young people studying in school.
⢠Involving the community in observing important health days helped us reiterate the message in a continuous manner. YHP
of the Company for the financial year ended March 31,2023. The Secretarial Audit Report in Form MR-3 is annexed as Annexure - IX, which forms part of this Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.
Cost Auditors:
The Board of Directors of the Company, based on recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (holding Registration No. 000065), as Cost Auditor of the Company, for conducting the Cost Audit for the Financial Year 2023-24, on a remuneration as mentioned in the Notice convening the 44th Annual General Meeting.
A certificate from M/s. Rao, Murthy & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company is in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder.
Cost Audit Report for the year 2021-22 was filed with the Ministry of Corporate Affairs on September 7, 2022.
The Company maintains the cost records as specified by the Central Government under Section 148 (1) of the Act.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB, Sweden and AstraZeneca PLC, UK for their valuable guidance and strong support to the Companyâs operations during the year.
Your Directors would also like to thank the Central and the State Governments, other Statutory and Regulatory Authorities, the Companyâs Bankers, the Medical Profession and Trade, Vendors & Business Associates and the Members for their continued valuable support to the Companyâs operations.
Your Directors place on record their sincere appreciation of the significant contribution and continued support of the employees at all levels to the Companyâs operations during the year.
On behalf of the Board of Directors
Place: Bengaluru Narayan K. Seshadri
Date: May 30, 2023 Chairman
team along with peer educators organised multiple mass events and campaigns on special days to raise awareness on health amongst young people and community members. About 12 health days were observed both virtually and physically with the participation of over 6,000 young people. These celebrations included medical sessions on NCD & its risk factors, drawing competition, videos sessions, and health talk to increase the awareness and address their questions.
With an intervention in new territories, we reached about 1.3 lac people and built large scale awareness on NCDs, its causes and impact. In lines with the design of the programme, we also trained 560 youth, 150 teachers and 13 government facilitators on the subject.
Taking the promise of care forward with an underlying objective of adherence to treatment, AstraZeneca India, in partnership with Make-A-Wish Foundation, pledged to fulfill the wishes of approximately 550 critically ill children across the country while upholding the goal of treatment adherence, advancing its commitment to care. During conversations with several healthcare professionals treating children, it has been demonstrated that granting a childâs wish made a positive difference in their treatment journey. This serves as a crucial complement to medical care and experts have noticed that patients feel better and are more likely to adhere to treatment protocols when their wishes are fulfilled.
We backed a series of 11 events, either virtually or in-person, across Bengaluru, New Delhi, Mumbai, Kolkata, Vellore, Chennai, Hyderabad and Ahmedabad, in an effort to connect with as many children between the ages of 3 to 18 as possible and create joyous memories.
The Company recognises the connection between healthy people and a healthy planet and are using a science-based approach to proactively manage our environmental impact. The Company is actively investing in biodiversity and nature conservation, as we strive towards achieving our Zero Carbon ambition. The Companyâs AZ Forest programme has already made significant strides, with over 10.5 million trees planted globally since 2020. Through the AZ Forest initiative, AstraZeneca is collaborating with local governments and non-profit organisations to restore forests and promote biodiversity by planting trees worldwide. In India, AstraZeneca associated with SankalpTaru Foundation and committed to plant and maintain geo-tagged trees. This innovative approach includes individual tracking of each plant, enabling us to monitor and manage their growth remotely.
The Corporate Social Responsibility Policy is available at https:// www.astrazeneca.in/content/dam/az-in/pdf/files/Corporate%20 Social%20Responsibility%20PolicyS.pdf
The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - IV, which forms part of this Report.
In terms of the requirements of Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available at www.astrazeneca.com/india.
Details of remuneration of Directors/Key Managerial Personnel
The information relating to remuneration of Directors/Key Managerial Personnel as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Act, is annexed as Annexure - V, which forms part of this Report.
The statement under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure - VI, which forms part of this Report.
However, the said Annexure shall be provided to Members on a specific request made in writing to the Company. The said information is open for inspection and any member interested in obtaining the copy of the same may write to the Company Secretary.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing Regulations is annexed as Annexure - VII, which forms part of this Report.
A detailed report on corporate governance as required under the Listing Regulations is annexed as Annexure - VIII, which forms part of this Report. Certificate of the Practising Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Report on Corporate Governance.
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or the Board, as required under Section 143(12) of the Act and Rules framed thereunder.
Particulars of Loans, Guarantees or Investments
During the year under review, the Company has not granted any Loan, Guarantee or made Investments within the meaning of Section 186 of the Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or Tribunals
During the year under review, there was no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
Pursuant to Section 178 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on May 30, 2014, had constituted the Nomination & Remuneration Committee and the Stakeholdersâ Relationship Committee.
Pursuant to Section 135 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on August 12, 2014 had constituted the Corporate Social Responsibility Committee. Further, pursuant to Regulation 21 of the Listing Regulations, the Board of Directors at its meeting held on February 6, 2019 had constituted the Risk Management Committee. Details of these Committees including the Audit Committee are furnished in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Companies Act, 2013 provides for appointment of Independent Directors, who shall hold office for a term of up to 5 consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a special resolution by the Company. Further, the provisions of retirement by rotation as envisaged under Section 152 of the Companies Act, 2013, shall not apply to such Independent Directors. The Independent Directors of the Company Mr. Narayan K. Seshadri, Ms. Revathy Ashok and Ms. Shilpa Shridhar Divekar, have furnished the required declaration under the provisions of Section 149 of the Companies Act, 2013, affirming that they meet the criteria of independence.
Changes to the Board of Directors
Pursuant to Section 152 of the Companies Act, 2013, Ms. Weiying Sarah Wang (Non-Executive Director), will retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. A resolution in this behalf is set out at Item No. 3 of the Notice of the Annual General Meeting.
During the year, Mr. Gagandeep Singh Bedi resigned from the office of Managing Director and also as Director of the Company with effect from the closing of business hours on December 31,2022, consequent to transfer to a new position within AstraZeneca Group.
Based on the recommendations of the Nomination & Remuneration Committee, Mr. Rajesh Marwaha was re-appointed as the Whole-Time Director of the Company with effect from December 2, 2022 for a period of three years and Mr. Sanjeev Kumar Panchal was appointed as the Managing Director of the Company with effect from January 1,2023 for a period of three years.
Pursuant to the provisions of Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings, brief resume and other disclosures relating to the Director who is proposed to be re-appointed are given in the Annexure to the Notice of the 44th Annual General Meeting.
The details of familiarisation programme and annual board evaluation process for Directors have been provided in the Corporate Governance Report.
As on date, Mr. Sanjeev Kumar Panchal, Managing Director,
Mr. Rajesh Marwaha, Chief Financial Officer & Director and Ms. Manasa. R, Company Secretary, are the Key Managerial Personnel of the Company.
At the Annual General Meeting held on August 9, 2021, the present statutory auditors, M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009), were re-appointed as statutory auditors of the Company for a period of 5 years viz. till the conclusion of 47th Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments made thereto, the Company engaged the services of Mr. Vijayakrishna K.T., Practising Company Secretary to conduct the Secretarial Audit
Mar 31, 2022
Your Directors are pleased to present the 43rd Annual Report together with the Audited Financial Statements of the Company for the financial year ended March 31,2022.
|
Financial Results |
('' in million) |
||
|
Particulars |
2021 |
- 22 |
2020-21 |
|
Sales and Other Income |
8,204 |
8,264 |
|
|
Profit/(Loss) Before Tax |
830 |
1,271 |
|
|
Provision for Taxation |
|||
|
- Income Tax |
226 |
348 |
|
|
- Adjustment for Deferred Tax |
(12) |
(10) |
|
|
Total Tax |
214 |
338 |
|
|
Profit/(Loss) after Taxation |
616 |
933 |
|
|
Other comprehensive income/(loss) for the year |
(17) |
34 |
|
|
Total comprehensive income for the year |
599 |
967 |
|
|
Surplus brought forward from the previous year |
3,241 |
2,324 |
|
|
Impact of Ind AS 116 |
- |
- |
|
|
Total amount available for appropriation |
3,840 |
3,291 |
|
|
Appropriation made by Directors |
|||
|
Transfer to General Reserve |
- |
- |
|
|
Appropriation recommended by Directors |
|||
|
Dividend |
(50) |
(50) |
|
|
Tax on proposed Dividend |
- |
- |
|
|
Surplus carried over |
3,790 |
3,241 |
|
Business
The Company registered sales of '' 7,614 million versus last year sales of '' 7,768 million and achieved a total comprehensive income of '' 599 million, during financial year 2021-22. The performance for the current year was impacted due to generic proliferation of low priced products in the Dapagliflozin market.
The second wave of COVID-19 during the year 2021 had very serious and unprecedented effects across various parts of the country and led to tremendous stress on healthcare and health delivery system.
The growth platform of the Company keeps performing well with innovative molecules like Osimertinib, Olaparib, Durvalumab and Acalabrutinib. Brilinta (Ticagrelor) is approved for treatment in Acute Coronary Syndrome and high-risk Post MI patients and gained momentum with an achievement of 6.8% growth y-o-y despite Loss of Exclusivity by parent company. Brilinta continues to be the market leader with value share of 16.5% as against 15.8% last year in Oral Anti Platelets market as per IQVIA report MAT March 2022.
During the year, the Board recommended an interim dividend of '' 2/- per equity share which was paid out during the year. The Board is pleased to recommend a final dividend of '' 8/- per equity share of '' 2 each, which if approved at the forthcoming Annual General Meeting, will be paid to all those equity shareholders of the Company whose names appear in the Register of Members and whose names appear as beneficial owners as per the beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited as on record date fixed for this purpose. The total dividend for the year would be '' 10/-per equity share carrying face value of '' 2 each.
In the current year, the Company introduced Benralizumab (Fasenra) which is an innovative therapy to treat Severe Uncontrolled Asthma. Fasenra is also the Companyâs first Monoclonal Antibody to target Eosinophilic Pathway of Asthma (One of the Phenotype). Launched in the beginning of the year, Fasenra has gained significant advocacy amongst the Pulmonologists, it is being regarded as effective and safer therapy. Since launch, it has touched the lives of more than 200 patients.
Forxiga, as part of the SGLT2 class of drug (Sodium Glucose Cotransporter Inhibitors), also experienced volume growth of 9.3% in trade channel despite strong headwinds from a number of companies who launched generic versions of Dapagliflozin.
The efficacy of the Companyâs molecule and its wide acceptance among physicians and benefits to numerous diabetic patients is quite evident. Dapagliflozin after getting approval in Chronic Kidney Disease & Heart failure with reduced ejection fraction is helping the patients of these two chronic diseases of high unmet need and is now also being endorsed by Global guidelines in these indications.
The Oncology Business Unit continues to expand its access, helping more patients gain access to novel treatment solutions. ADAURA indication (adjuvant treatment after complete tumor resection in patients with early non-small cell lung cancer (NSCLC) whose tumors have epidermal growth factor receptor (EGFR) exon 19 deletions or exon 21 (L858R) substitution mutations), which was approved by the regulatory authorities in India during month of March 2021, benefitted 17 number of patients during the year [ADAURA Trial, presented in 2020, had revealed a 79% reduction in the risk of disease recurrence or death with Tagrisso (osimertinib), a third-generation EGFR inhibitor, versus placebo in the adjuvant setting in EGFR mutant patients with early-stage disease (stage IB, II and IIIA)]. The newer launch of previous year Acalabrutinib started gaining strong traction with the top Physicians preferring the molecule over the competing alternative treatment solutions, due to long term safety. The molecule is promoted in India under the brand name of âCalquenceâ.
Tagrisso (Osimertinib) maintained its leadership as the largest brand in the area of lung cancer treatment in India as per the IPSOS report released in December 2021. In February 2022, the brand reduced its MRP as a part of strategy to increase the access of the novel solution, considering the affordability challenge in the India market. The reduction in the pricing has been received well in the market and brand continues to see strong growth momentum consequent to the price dilution.
Lynparza (Olaparib), an Oral PARP Inhibitor used to treat PARP dependent tumors like ovarian cancer, breast cancer, prostate cancer and for pancreatic cancer, which was launched in February 2019, is now a leader in Ovarian Cancer market. After having established BRCA testing as a Standard procedure in Ovarian Cancer patients, the Company has now created partnerships with ecosystem in bringing Homologous Recombination Deficiency testing capability in the market, helping more number of patients getting benefitted from the available targeted treatment therapies like Olaparib.
Imfinzi (Durvalumab) was launched in October 2019 for the patients with unresectable Stage III non-small cell lung cancer (NSCLC) whose disease has not progressed following platinum-based chemotherapy and radiation therapy and in extensive stage small cell lung cancer continues to progress well. The brand registered a growth of 133.4% during the year.
During the year, two new global clinical studies (HIMALAYA and TOPAZ-1) were read out. Positive results from Himalaya Phase III trial showed a single, high priming dose of Tremelimumab added to Imfinzi demonstrated improved overall survival (OS) versus sorafenib in 1st-line unresectable hepatocellular carcinoma (HCC). Positive results from TOPAZ-1 Phase III trial showed Imfinzi plus Chemotherapy improved OS versus Chemotherapy alone in 1st - Line advanced bilary tract cancer. The Company is preparing for regulatory submission for getting the indication approved in India for promotion.
We are delighted to announce that in the Therapeutic Area of Oncology, the Company continues to strengthen its ranking and is now ranked fourth largest MNC in India as per the latest IPSOS report MAT Decâ2021 (released in Mayâ2022).
As COVID-19 changed the working conditions across industries, at the Company too, we relooked at our day-to-day operations and adopted to the new situation very effectively. Technology played a key role in ensuring a continuous connect with both healthcare professionals (HCPs), patients and providing the vital support that they needed. Our multi-channel engagement model ensured a high-level engagement with our stakeholders via diverse digital touch points. We utilised virtual platforms to launch our products and organised knowledge sharing sessions with doctors. Employees too continued to receive relevant training and education online.
The Company undertook a vaccination drive for all its employees and their immediate families. A structured process was designed to conduct the vaccination drive across the country. The vaccination drive received a good response from the employees and the proactive efforts of the team that was involved in running the drive was very well appreciated. This drive resulted in 96% of our colleagues getting vaccinated against the COVID-19 virus.
We made sure that our manufacturing plant remained fully operational despite the challenges around us, because we know that our medicines are helping patients to lead a healthier life.
Our resilient manufacturing operations, supply chain, robust inventory management process and efficient distribution network enabled us to maintain business continuity.
Management has considered its liquidity position as at March 31, 2022 and over the next twelve months, by performing cash flow assessments and a sensitivity analysis thereon and has concluded that the Company will have adequate liquidity in the ordinary course of business.
In Operations, as COVID challenges with Wave 3 continued, we maintained strict Covid appropriate behaviours. Despite the ongoing challenges the factory delivered strong results for 2021.
Our excellent safety and quality performance at manufacturing site continued with zero Lost Time Injury and no critical observations in both internal and external quality audits.
Our supply performance was strong with 100% stock availability and zero stockouts, ensuring unrestricted supply to patients.
Our lean and digital journey continues, focusing on low cost/no cost digital solutions. Multiple power apps dashboards have been deployed, giving us real time data, making our processes more efficient and providing significant tangible benefits.
Major projects executed were:
⢠Solar Panels Installation - Approx 1100 panel - >90% Green energy usage at site.
⢠Boiler fuel changed from Diesel to LPG.
People development and building capability of our people is also a focus for the site. In 2021 the Operations deployed virtual job rotation programme and local job rotations.
Material changes and commitment, if any, affecting financial position of the Company from the end of the Financial Year and till the date of this Report
There has been no material change and commitment affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
During the year under review, the Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.
Safety, Health and Environment
Safety, Health and well-being of employees continued to be an important focus area for the Company, especially in light of the Covid Wave 2. âWe Care For Youâ initiative was ramped up. In addition to awareness sessions, Covid screening, Home Isolation monitoring & hospitalisation introduced in 2020, vaccination camps were conducted in PAN India locations and Oxygen concentrators provided to employees on SOS basis. Oximeters were provided to employees. We continued to distribute quality PPE on a regular basis to all teams in order to provide a safe working environment for our employees. Additional state of the art Covid precautions were introduced in the Head Office.
Human Resources and Employee Relations
The Company is committed to provide career opportunities for its employees and enable their growth and development. In the year 2021-22, to enable our workforce readiness in the new normal context, digital has been a key area of focus both for Sales Force and functional teams. To support our colleagues in the digital skill-set, there has been an extensive investment on capability building to strengthen virtual/remote connect skills, along with scientific and technical knowledge across the business.
There is continued focus on enabling career development and learning opportunities for the employees. During the year, we continued with India Development Week for all employees which was focused on building capabilities and competencies aligned to our future portfolio. We also had a dedicated âPower of Diversityâ Week to embed an inclusive culture and reinforce our commitment to nurturing and building a diverse organisation with employees from different backgrounds and cultures. We also transitioned from rating based Performance Management approach to Performance Development approach focused on continuous coaching and feedforward culture. The Company also continued to invest in talent development programmes to accelerate our talent pipeline for country leadership role with continued investment on education, exposure and experience through Global, Regional and Local programme.
The total number of employees of the Company as on March 31, 2022 was 1,183 as against 1,283 as on March 31,2021.
In the last yearâs Boardâs Report, members were inter alia informed about Arbitration proceedings initiated by National Highway Authority of India (NHAI) before Arbitrator at Bengaluru in relation to first acquisition of land made by NHAI in 2004 and the arbitration proceedings invoked by the Company seeking, inter alia, enhancement of compensation from NHAI in respect of second acquisition of land made by NHAI in 2011. Further, the members were also informed about Writ Petition filed by the Company before the Honâble High Court of Karnataka challenging demand notice received from Bruhat Bengaluru Mahanagar Palike dated August 7, 2014 demanding improvement charges from the Company and the interim stay granted by the Honâble High Court of Karnataka. During the financial year under review, there have been no reportable developments on the above matters.
During the year, the Company received a demand notice for an amount of '' 157.39 crore (and interest thereupon) under Trade Margin Rationalisation notification (TMR notification) from National Pharmaceutical Pricing Authority (NPPA) alleging overcharging of a patented anti-cancer drug sold during the period of March 8, 2019 to January 31, 2021. The said drug has been included with certain other anti-cancer medicines, on which trade margin caps are applicable under TMR notification. Based on evaluation, management is of the view that the TMR notification is not applicable to the aforesaid patented drug and all applicable laws relating to the pricing of the product have been complied with. The Company has filed a Writ Petition before the High Court of Delhi challenging the NPPAâs demand notice, and the Writ Petition is currently pending hearing.
Transfer to Investor Education and Protection Fund
There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in the financial year 2021-22.
Directorsâ Responsibility Statement
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors state in terms of Section 134 (5) of the Companies Act, 2013 (the Act):
(a) that in the preparation of the annual financial statements for the year ended March 31,2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) that they had 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 31,2022 and of the profit of the Company for the year ended on that date.
(c) that they had 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.
(d) that they had prepared the annual financial statements on a going concern basis.
(e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The details in respect of internal financial controls and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to provide a healthy environment to all its employees. There is zero tolerance of discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year under review, there was 1 complaint received by the Internal Complaints Committee and the same was resolved.
The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year, 5 meetings of the Board were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), performance evaluation exercise was carried out for evaluation of the performance of the Board as a Whole, the Chairman, Independent Directors and the Non-Independent Directors.
The Company had formulated a questionnaire to carry out the evaluation exercise. The questionnaire has been structured to embed various parameters based on identified criteria such as composition, functioning of board/committees, process, individual roles/obligations etc. and framework to carry out the evaluation effectively.
Further as part of the process, the Chairman of the Board provided feedback to the Board members on the evaluation carried.
As required under Listing Regulations, the Independent Directors held a separate meeting on February 8, 2022. All Independent Directors attended the meeting. The Independent Directors discussed/reviewed the matters specified in Regulation 25(4) of the Listing Regulations.
Nomination and Remuneration Policy of the Company
The Company has adopted a Nomination and Remuneration Policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company, which inter alia govern the selection/nomination of Board members, appointment to Senior Management levels, review and approval of their remuneration etc. The policy is available at https://www. astrazeneca.in/content/dam/az-in/pdf/files/AprNomination%20 and%20Remuneration%20Policy.pdf.
Vigil Mechanism/Whistle-Blower Policy
The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct.
The mechanism provides for adequate safeguards to Director(s)/
Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blowing Policy is available at https://www.astrazeneca.in/content/dam/azin/pdf/2019/Whistle%20 Blowing%20Policy.pdf.
The Company has adopted a Dividend Distribution Policy which is annexed herewith as Annexure - I, which forms part of this Report. The Dividend Distribution Policy is also available at https:// www.astrazeneca.in/content/dam/az-in/pdf/2017/Dividend%20 Distribution%20Policy.pdf.
Conservation of Energy, Technology Absorption,Foreign Exchange Earnings and Outgo
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 as Annexure - II, which forms part of this Report.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and Senior Management which may have a potential conflict with the interest of the Company at large.
The Company entered into materially significant related party transactions with AstraZeneca UK Limited for purchase, transfer and receipt of products, goods, material, services and reimbursement on account of transfer price or other obligations. The same is within the limits duly approved by the members at the 40th Annual General Meeting.
Further, the Company has taken the approval of members of the Company through postal ballot for the transactions to be entered by the Company with AstraZeneca UK from March 31,2022.
All related party transactions are placed before the Audit Committee for its prior approval. Omnibus approval of the Audit Committee is obtained for transactions which are repetitive in nature or when the need for them cannot be foreseen in advance.
The Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board is available at https://www.astrazeneca.in/content/dam/az-in/pdf/files/Policy%20 on%20Related%20Party%20TransactionsS.pdf
Details of the related party transactions as required under Section 134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, are attached as Annexure - III, which forms part of this Report.
The Company has in place a mechanism to inform the Board about the risk assessment and minimisation procedures and periodical review is carried out to ensure that executive management controls risks by means of a properly defined framework.
The Company has formulated a Risk Management Policy which will guide the Risk Management Committee and the internal team to effectively manage the risks that the business faces.
The details of Risk Management Committee and its terms of reference are set out in the Corporate Governance Report which forms part of this report.
Corporate Social Responsibility
Inspired by our Values and what science can do, the Company focused on accelerating the delivery of life-changing medicines that create enduring value for patients and society. The Company committed to operating in a way that recognises the interconnection between business growth, the needs of society and the limitations of our planet. In the year 2021, while at one end the Company continued our focus on access to healthcare, the Company also looked at ways we can contribute in protecting the environment.
The Companyâs flagship initiative âGanga Godavari Screening Programmeâ continued its focus on early detection via preventive screening of non-communicable diseases in the under resourced communities.
(a) At one end, the Company cancer screening programme that were launched in the year 2019, entered phase 2. In consensus with National Health Mission and the Ministry of Health and Family Welfare the programme moved and was implemented in Tikri village in Uttar Pradesh. In order to make the programme more sustainable, the Company created a tri-party support model that could bring in local medical support for patient reference and community-based intelligence to catalyse
field work and outreach. Indian Cancer Society being the Companyâs primary partner worked closely with Banaras Hindu University that supported our mission to conduct specialised health camps that focused on checking women for Ovarian, Breast and Cervical cancer. Despite multiple interruptions given the pandemic-based lockdowns, the camps touched about 5,500 beneficiaries where over 220 suspected positive cases were referred for further medical treatment.
(b) The initiative was supported by a public facing campaign âNew Normal, Same Cancerâ that was developed in collaboration between AstraZeneca and the global cancer patient community touched about 18.4 million people this year. The campaign that was initially developed alongside a steering committee of advocacy partners from around the world during the pandemic to raise awareness on the need for people
to get back to cancer care services despite the disruption caused by the COVID-19, expanded its focus on bringing about awareness on Cancer, its causes, better management and importance of preventive treatment. This was implemented by on-boarding multiple influencers from different walks of life such as real-life survivors, celebrities, renowned care takers who have seen the journey of a cancer patient closely to build awareness. This World Cancer Day, these influencers helped the Company disseminate its message that âCancer doesnât wait and neither should youâ directly through multi-media such as radio, facebook, Instagram etc.
(c) The Company entered into cardiac care as another area posing a significant burden on the healthcare ecosystem of the country. AstraZeneca joined hands with Ummeed Foundation to support Gauri Healthy Heart a project that was conceptualised by Padma Shri Dr. Upendra Kaul in the year 2020 that focuses on preventing heart attacks and strokes. With a No-heart-attack-mission-2025, the project is a collaboration between central & state/union territory government, health departments, medical education & academic research centres, pharma companies, social
& development organisations, army, volunteers and civil society at grass root levels. In its early years, it has targeted
remoter parts of the country starting with union territory of Jammu and Kashmir and fanning out to various selected parts of India. These healthy heart screening camps evaluate numerous patients with high blood pressure or diabetes with or without a heart disease already on treatment. The project is driven by an objective of making quality heart care available to underprivileged people by early identification and treatment of heart attacks and strokes, prevention of reoccurring cardiovascular events and reduction in deaths from cardiovascular ailments.
Our global âYoung Health Programmeâ expanded its boundaries from Delhi to Karnataka this year. An over a decade old programme implemented in multiple communities of Delhi helped us build a model âcommunity developmentâ approach that could influence behaviours especially in youngsters between 10-24 years of age.
This programme founded in partnership with John Hopkins School of Public Health and Plan International, AstraZeneca global aims at improving health outcomes of vulnerable youth, by building awareness on ill-effects of behaviours such as tobacco and alcohol consumption, smoking, unhealthy lifestyle etc. that could lead to NCDs such as Cancer, Diabetes, heart ailments etc. in the long run. With a unique working model, this project is implemented by developing youth from the community itself as âPeer Educatorsâ who not only believe in the objective of the programme but also act as influencers in driving change within the community. Thus far, the programme has over 21 âHealth Information Centersâ - that are the focal points in identified communities helping us spread the right information on NCD Prevention and Management from generating awareness to identifying sustainable solutions to influence behaviour. This year with the help of the impact we have created, we garnered support from the local government both in Karnataka and Delhi including MoHFW, NCD Cell, national health mission in not only implementing the programme but also strategically strengthening our grassroot connect by involving community government health offices to be able to engage with the community. This programme has thus far touched more than 460,000 young people with health information and trained more than 7,800 Peer Educators who have delivered numerous health promotion activities with the target community from time to time. Specifically in Karnataka, we aim to touch about 50,000 lives in its first year.
Once the vaccination drive against COVID-19 began in India, vaccine hesitancy became the next big matter of concern. There were multiple reports emerging from different regions where general pubic was hesitant to administer their dose due to myths, fear of side effects and misconceptions. This needed quick and strong community intervention to ensure that more and more people came forward for vaccination of both the doses to curb the spread of COVID-19 infection. The Company recognising the gap, made an effort to strengthen community action for the COVID vaccination drive through Plan India. âVaccine Hesitancy Programmeâ was curated with two-fold objectives: supporting government efforts to combat the outbreak of COVID-19 in the country by addressing vaccination hesitancy and promoting COVID appropriate behaviour through community-led action. The Company collaborated to curate and support âCOVID Vaccination Campaignâ for end-to-end outreach in Bawana and Jahangirpuri area of North Delhi to promote COVID appropriate behaviour and thereby improve the vaccine uptake through community mobilisation. The target groups in the project included men, women and children from these resettlement colonies. Over 11,000 people were vaccinated, about 40,000
reached with targeted messages through 7,300 household visits and over 395,000 people were sensitised on COVID appropriate behaviour and COVID-19 Vaccination through mass awareness.
âAZ Forestâ initiative by the Company looks forward to restoring forests and biodiversity by planting trees worldwide in partnership with local governments and non-profit organisations. Tree plantation across globe is often seen as a quantity driven activity with the goal of planting a certain number of trees in a day or an hour. But this is associated with certain maintenance and ownership challenges. In India with an aim to convert a denuded area of land into a lush green forest to create an ecosystem involving community, the Company collaborated with SankalpTaru Foundation, focused on afforestation throughout India and providing livelihood to farmers along the way. We flagged off a mass sapling plantation campaign in Bengaluru and committed to planting 5,000 smartly geo-tagged trees in phase 1 that would enable individualistic tracking of each plant remotely. This unique model will help in ensuring that the growth and management of a plant is well monitored, and timely interventions can be planned as and when required. The approach here was to lay the foundation of greenery on a denuded community land, convert a barren land into forest, owning the plantation of trees and maintaining them for an agreed period of three years of time and lastly transferring a healthy and green forest back to the community owner at the end of its agreed tenure.
The Companyâs âBack2schoolâ campaign was curated given a need found at the ground level where people started putting their children away from school once the lockdown were lifted. This 3 month long campaign in two communities of New Delhi had a straight forward objective to mobilise parents and nudge them to ensure that the education for their children continued. With the help of local youth and peer educators, this programme saw a participation from 5,400 parents, over 1,500 education kits distribution to young girls, and 1,200 safety kits were distributed to help children return to school.
Taking the promise of care forward with an underlying objective of adherence to treatment, the Company committed to fulfil the wishes of about 830 children suffering from critical ailments across the country in collaboration with Make-A-Wish Foundation. It has proven to have created an impact in a patientâs treatment cycle as indicated during the interactions with multiple health professionals treating children. This support is an important adjunct to medical treatment, and health experts have observed their patients feel better and comply more readily with treatment protocols when they experience their wish come true. The community volunteers who grant wishes say the wish granting process heightens both their ability to see the best in others, and their commitment to actively help more people in need. The Company supported a series of 11 events organised either virtually or on-ground across Bengaluru, Goa, Mumbai, Kolkata, Jaipur, Delhi, Pune, Hyderabad, Chennai, Ahmedabad and Baroda in an effort to reach out as many children between the age of 3 to 18 years as possible and leave them with joyous memories.
The Corporate Social Responsibility Policy is available at https:// www.astrazeneca.in/content/dam/az-in/pdf/files/Corporate%20 Social%20Responsibility%20PolicyS.pdf.
The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - IV, which forms part of this Report.
In terms of the requirements of Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available at www.astrazeneca.com/india.
Details of remuneration of Directors/Key Managerial Personnel
The information relating to remuneration of Directors/ Key Managerial Personnel as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Act, is given in Annexure - V, which forms part of this Report.
The statement under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure - VI, which forms part of this Report.
However, the said Annexure shall be provided to Members on a specific request made in writing to the Company. The said information is open for inspection and any member interested in obtaining the copy of the same may write to the Company Secretary.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing Regulations is annexed as Annexure - VII, which forms part of this Report.
A detailed report on corporate governance as required under the Listing Regulations is annexed as Annexure - VIII, which forms part of this Report. Certificate of the Practicing Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Report on Corporate Governance.
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or the Board, as required under Section 143(12) of the Act and Rules framed thereunder.
Particulars of Loans, Guarantees or Investments
During the year under review, the Company has not granted any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or Tribunals
During the year under review, there was no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
Pursuant to Section 178 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on May 30, 2014, had constituted the Nomination & Remuneration Committee and the Stakeholdersâ Relationship Committee.
Pursuant to Section 135 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on August 12, 2014 had constituted the Corporate Social Responsibility Committee. Further, pursuant to Regulation 21 of the Listing Regulations, the Board of Directors at its meeting held on February 6, 2019 had constituted the Risk Management Committee. Details of these Committees including the Audit Committee are given in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Companies Act, 2013 provides for appointment of Independent Directors, who shall hold office for a term of up to 5 consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a special resolution by the Company. Further, the provisions of retirement by rotation as envisaged under Section 152 of the Companies Act, 2013, shall not apply to such Independent Directors. The Independent Directors of the Company Mr. Narayan K. Seshadri, Ms. Revathy Ashok and Ms. Shilpa Shridhar Divekar, have furnished the required declaration under the provisions of Section 149 of the Companies Act, 2013, affirming that they meet the criteria of independence.
Changes to the Board of Directors
Pursuant to Section 152 of the Companies Act, 2013, Mr. Rajesh Marwaha (Executive Director), will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. A resolution in this behalf is set out at Item No. 3 of the Notice of the Annual General Meeting.
Based on the recommendations of the Nomination & Remuneration Committee Ms. Shilpa Shridhar Divekar (Non-Executive Independent Director) was appointed as an Additional Director of the Company by the Board of Directors on December 29, 2021. A proposal is placed before the members for appointment of Ms. Shilpa Shridhar Divekar as a Director to hold office for a term of 5 consecutive years i.e. up to December 28, 2026.
Pursuant to the provisions of regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings, brief resume and other disclosures relating to the Directors who are proposed to be appointed/re-appointed are given in the Annexure to the Notice of the 43rd Annual General Meeting.
The details of familiarisation programme and annual board evaluation process for Directors have been provided in the Corporate Governance Report.
As on date, Mr. Gagandeep Singh Bedi, Managing Director,
Mr. Rajesh Marwaha, Chief Financial Officer & Director and Mr. Pratap Rudra, Company Secretary & Legal Counsel, are the Key Managerial Personnel of the Company.
At the Annual General Meeting held on August 9, 2021, the present statutory auditors, M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009), were re-appointed as statutory auditors of the Company for a period of 5 years viz., till the conclusion of 47th Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act,
2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments made thereto, the Company engaged the services of Mr. Vijayakrishna K.T., Practicing Company Secretary to conduct the Secretarial Audit of the Company for the financial year ended March 31,2022. The Secretarial Audit Report in Form MR-3 is annexed as Annexure - IX, which forms part of this Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.
The Board of Directors of the Company, based on recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (holding Registration No.000065), as Cost Auditor of the Company, for conducting the Cost Audit for the financial year 2022-23, on a remuneration as mentioned in the Notice convening the 43rd Annual General Meeting.
A Certificate from M/s. Rao, Murthy & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company is in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder.
Cost Audit Report for the year 2020-21 was filed with the Ministry of Corporate Affairs on September 6, 2021.
The Company maintains the cost records as specified by the Central Government under Section 148 (1) of the Act.
Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB, Sweden and AstraZeneca PLC, UK for their valuable guidance and strong support to the Companyâs operations during the year.
Your Directors would also like to thank the Central and the State Governments, other Statutory and Regulatory Authorities, the Companyâs Bankers, the Medical Profession and Trade, Vendors & Business Associates and the Members for their continued valuable support to the Companyâs operations.
Your Directors place on record their sincere appreciation of the significant contribution and continued support of the employees at all levels to the Companyâs operations during the year.
For and on behalf of the Board of Directors
Place: Bengaluru Narayan K. Seshadri
Date: May 26, 2022 Chairman
Mar 31, 2018
Boardâs Report
The Directors are pleased to present the 39th Annual Report together with the Audited Financial Statements of the Company for the financial year ended March 31, 2018.
FINANCIAL RESULTS
(Rs, in million)
|
Particulars |
2017-18 |
2016-17 |
|
|
Sales and Other Income |
5,842 |
5,631 |
|
|
Profit/(Loss) Before Tax |
438 |
355 |
|
|
Provision for Taxation |
|||
|
- Income Tax |
90 |
88 |
|
|
- Adjustment for Deferred Tax |
89 |
67 |
|
|
Total Tax |
179 |
154 |
|
|
Profit/(Loss) after Taxation |
259 |
201 |
|
|
Surplus brought forward from the previous year |
918 |
717 |
|
|
Total amount available for appropriation |
1,177 |
918 |
|
|
Appropriation made by Directors |
|||
|
Transfer to General Reserve |
- |
- |
|
|
Appropriation recommended by Directors |
|||
|
Dividend |
- |
- |
|
|
Tax on proposed Dividend |
- |
- |
|
|
Surplus carried over |
1,177 |
918 |
|
Dividend
Though the Company made significant progress during the year in terms of its business performance, considering its overall financial position, the Directors have not recommended any dividend for the year 2017-18.
Business
The Company registered sales of Rs, 5,276 million with a growth of 3% achieving a Net Profit of Rs, 259 million, during the year. The current year growth for the Company comes from the focussed therapeutic areas Cardio-Metabolism, Oncology and Respiratory.
The Companyâs Growth Platforms consist of the innovative drugs like Brilinta, Forxiga, Xigduo, Symbicort, Onglyza, Kombiglyze and the recently launched Tagrisso which together constitutes 64% of total sales. The Launch of Tagrisso in the Lung Cancer segment has helped the Company improve Lung cancer patientâs lives and cater to the unmet need in this category.
Brilinta (Ticagrelor) is approved for treatment in Acute Coronary Syndrome (ACS) disease and continued to register rapid growth.
The partnership with Sun Pharma has helped boost the reach of the drug to more patients. This franchise crossed the Rs, 1,000 million milestone within 5 years of launch and as per IQVIA Health,
Ticagrelor franchise enjoyed 32% market share (MAT March 2018) while the Oral Anti-Platelets (OAP) market grew by 3.2%, proving the success of the drug.
Forxiga in the dapagliflozin franchise, as part of the SGLT2 class of drug (Sodium Glucose Cotransporter inhibitors), also experienced robust growth. As per IQVIA Health, dapagliflozin franchise is having ~33% market share within SGLT2 class (MAT March 2018), efficacy and wide acceptance among physicians and benefiting numerous diabetic patients.
Xigduo was launched in the last quarter of 2017-18. It is a fixed dose combination drug, which helps to improve glycemic control in adults with type 2 diabetes mellitus, when treatment with both dapagliflozin and metformin is appropriate.
Manufacturing
The manufacturing operations continue to provide strong support for product deliveries in the market. The robust Technology Transfer processes have enabled us to bring local packing of new products like Forxiga and Oxra into the market much faster. It is heartening to note that Manufacturing and Supply of all the factory manufactured products achieved 99% OTIF (On Time & In Full). There has been a seamless launch of products from factory.
We are pleased to inform that the factory has received the renewed cGMP certification from our Regulatory Authorities and we continue to improve our cGMP standards. In our manufacturing operations, we ensure profitability by focusing on environmentally sustainable manufacturing practices, continuous focus on variable and fixed costs and implementation of lean supply chain practices. The manufacturing facility has entered into a Solar Power supply agreement which will result in significant power savings and contribute towards green energy and reduction in Carbon Footprint. Factory Operations has launched the lean manufacturing programme that will help reduce cost and improve efficiency. We would also like to highlight that to prepare the factory for any new growth opportunities for volume uptake, the factory management is executing a plan to upgrade the technical capability of the existing workforce and steer towards a new way of manufacturing in the years ahead. We are also working towards creating a truly diverse and inclusive organisation which reflects our desire to further cement our diversity agenda.
Material changes and commitment, if any, affecting financial position of the Company from the end of the Financial Year and till the date of this Report
There has been no material change and commitment affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
Deposits
During the year under review, the Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.
Safety, Health and Environment
Safety as well as Health and Well-being of employees is an important issue for the Company. New initiatives were introduced on building a safe working environment for our women employees. Many health awareness activities too were carried out throughout the year.
Human Resources and Employee Relations The Company is committed to provide career opportunities for its employees and enable their growth and development. Further, there is a focus on hiring science and pharmacy graduates to strengthen the scientific orientation in the workforce. There continues to be a focus on building gender diversity in the workforce. Training programmes to strengthen scientific and technical knowledge of the employees were extensively implemented across the business.
The Company continued to provide career development and learning opportunities for its employees. During the year, the India Development Week was conducted to enable employees to develop capabilities to further their development within AstraZeneca to enable them to be ready for the focus on newer challenges and portfolio. We also continued to focus on building a diverse organisation with employees from different backgrounds and cultures.
Number of Employees
The total number of employees of the Company as on March 31, 2018 was 1,356 as against 1,141 as on March 31, 2017.
Legal Matters
In the last yearâs Boardâs Report, members were informed about the following legal matters:
(a) Arbitration proceedings initiated by National Highway Authority of India (NHAI) before Arbitrator at Bengaluru in relation to first acquisition of land made by NHAI in 2004 and the arbitration proceedings invoked by the Company seeking, inter alia, enhancement of compensation from NHAI in respect of second acquisition of land made by NHAI in 2011.
(b) Writ Petition filed by the Company before the Karnataka High Court challenging demand notice received from Bruhat Bangalore Mahanagar Palike dated August 7, 2014 demanding improvement charges from the Company and the interim stay granted by the High Court of Karnataka.
(c) Appeal filed by 2 shareholders of the Company before Securities Appellate Tribunal against part of the Order of Securities and Exchange Board of India (SEBI) dated June 24, 2014, in relation to delisting proposal of AstraZeneca Pharmaceuticals AB, Sweden.
During the year under review, there have been no reportable developments on the above matters.
Transfer to Investor Education and Protection Fund
As required under the Companies Act, 1956/2013, the unclaimed dividend amount aggregating '' 1,203,740 lying with the Company for a period of 7 years pertaining to the financial year ended December 2009 was transferred during July 2017 to the Investor Education and Protection Fund, established by the Central Government.
Further, as required under the said Act, the shares pertaining to the aforesaid unclaimed dividends aggregating 67,300 shares held by 194 shareholders were transferred to the Investor Education and Protection Fund Authority.
Directorsâ Responsibility Statement
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors state in terms of Section 134 (5) of the Companies Act, 2013 (the Act):
(a) that in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date.
(c) that they had 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.
(d) that they had prepared the annual financial statements on a going concern basis.
(e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to provide a healthy environment to all its employees. There is zero tolerance of discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, there were no complaints received by the Internal Complaints Committee.
Board Meetings
During the year, 6 meetings of the Board were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), performance evaluation exercise was carried out for evaluation of the performance of the Board as a Whole, the Chairman, Independent Directors and the Non-Independent Directors. The Company had formulated a questionnaire to carry out the evaluation exercise. The questionnaire has been structured to embed various parameters based on identified criteria and framework to carry out the evaluation effectively.
Nomination and Remuneration Policy of the Company
The Company has adopted a Nomination and Remuneration Policy relating to the appointment and payment of remuneration to the Directors, Key Managerial Personnel and Senior Executives of the Company which is annexed herewith as Annexure - I, which forms part of this Report.
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs code of conduct. The mechanism provides for adequate safeguards for victimization of Director(s)/Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blowing Policy is available on the Companyâs website www.astrazeneca.com/india.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow
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 - II.
Related Party Transactions
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and Senior Management which may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the Audit Committee for its prior approval. Omnibus approval of the Audit Committee is obtained for transactions which are repetitive in nature or when the need for them cannot be foreseen in advance.
The Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board is available on the Companyâs website at www.astrazeneca.com/india.
The related party transactions which are of material nature, as defined in the Listing Regulations, are required to be approved by the Members by way of an Ordinary Resolution. In this connection, the material related party transactions requiring Membersâ approval are dealt with at Item No. 4 of the Notice, read with the Explanatory Statement.
Details of the related party transactions as required under Section 134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, are attached as Annexure - III.
Risk Management
The Company has in place a mechanism to inform the Board about the risk assessment and minimization procedures and periodical review is carried out to ensure that executive management controls are appreciated by means of a properly defined framework.
Corporate Social Responsibility
The Company in partnership with Plan International (India chapter), a reputed non-governmental organization and global implementation partners for AstraZenecaâs global community initiative - the Young Health Programme, organized free Non-Communicable Diseases (NCDs) health camps for prevention and detection of common lifestyle diseases such as diabetes, hypertension and respiratory disorders in 4 urban slum areas in K.R. Puram, Mahadevpura, Jayanagar and C.V. Raman Nagar, Bengaluru.
The health camps included community mobilization, as awareness campaign for early prevention, screening, counseling and post screening follow ups to ensure that high risk/diagnosed patients are seeking further medical advice. The screening tests included Glucose-serum, Plasma, Blood Pressure, Haemoglobin, Body Mass Index and Pulmonary Function Test. More than 900 community members participated in the 4 health camps including women and young boys and girls from the communities. The Companyâs employees also volunteered in this community service programme.
AstraZeneca continues its commitment towards prevention of NCDs among adolescents in its global community investment initiative
- The Young Health Programme, now in its 8th year of successful implementation in marginalised communities in Delhi. So far, the programme has benefitted 255,397 adolescents and reached out to 140,339 members of the wider community including parents, teachers, health workers and policy makers. Over 3,600 peer educators have been trained so far as part of the programme. This programme is funded by AstraZeneca Global.
The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - IV, which forms part of this Report.
Extract of Annual Return
In terms of the requirements of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in the prescribed form i.e. MGT-9 is annexed herewith as Annexure - V, which forms part of this Report.
Details of remuneration of Directors/Key Managerial Personnel
The information relating to remuneration of Directors/Key Managerial Personnel as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - VI, which forms part of this Report.
Particulars of Employees
The statement under Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure - VII which forms part of this Report.
However, the said Annexure shall be provided to Members on a specific request made in writing to the Company. The said information is available for inspection by the Members at the Registered Office of the Company on any working day of the Company up to the date of the 39th Annual General Meeting.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing Regulations is annexed as Annexure - VIII, which forms part of this Report.
Corporate Governance
A detailed report on corporate governance as required under the Listing Regulations is annexed as Annexure - IX. Certificate of the Practicing Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Report on Corporate Governance, which forms part of this Report.
Reporting of Frauds
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/ or the Board, as required under Section 143(12) of the Act and Rules framed there under.
Particulars of Loans, Guarantees or Investments
During the year under review, the Company has not granted any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or Tribunals
During the year under review, there was no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
Committees
Pursuant to Section 178 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on May 30, 2014, had constituted the Nomination and Remuneration Committee and the Stakeholdersâ Relationship Committee. Further, pursuant to Section 135 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors at its meeting held on August 12, 2014 had constituted the Corporate Social Responsibility Committee. Details of these Committees including the Audit Committee are given in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Companies Act, 2013 provides for appointment of Independent Directors, who shall hold office for a term of up to five consecutive years on the Board of the Company and shall be eligible for reappointment on passing of a special resolution by the Company. Further, the provisions of retirement by rotation as envisaged under Section 152 of the Companies Act, 2013, shall not apply to such Independent Directors. The Independent Directors of the Company Mr. Narayan K Seshadri, Ms. Revathy Ashok and Ms. Kimsuka Narsimhan, have furnished the required declaration under Section 149 of the Companies Act, 2013, affirming that they meet the criteria of independence.
Changes to the Board of Directors
During the year under review:
(a) Mr. Ian Brimicombe (Non-Executive Director) resigned w.e.f.
May 31, 2017.
(b) Mr. Sanjay Murdeshwar (Managing Director) resigned w.e.f.
June 30, 2017.
(c) Mr. Gagan Singh Bedi (Managing Director) was appointed as Additional Director of the Company w.e.f. July 1, 2017 at the meeting of the Board held on June 29, 2017 and was appointed as the Director of the Company in the Annual General Meeting held on September 13, 2017.
(d) Mr. Ian John Parish (Non-Executive Director) was appointed as Additional Director of the Company at the meeting of the Board held on August 8, 2017 and was appointed as the Director of the Company in the Annual General Meeting held on September 13, 2017.
Pursuant to Section 152 of the Companies Act, 2013,
Mr. Rajesh Marwaha, will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. A resolution in this behalf is set out at Item No. 2 of the Notice of the Annual General Meeting.
The details of familiarization programme and annual board evaluation process for Directors have been provided in the Corporate Governance Report.
As on date, Mr. Gagan Singh Bedi, Managing Director,
Mr. Rajesh Marwaha, Chief Financial Officer and Director and Mr. Pratap Rudra, Company Secretary and Legal Counsel, are the Key Managerial Personnel of the Company.
Auditors Statutory Auditor:
At the Annual General Meeting held on August 11, 2016, M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009), were appointed as statutory auditors of the Company for a period of 5 years viz. till the conclusion of 42nd Annual General Meeting, subject to ratification of their appointment by the shareholders.
The Ministry of Corporate Affairs vide its Notification dated May 7, 2018, has dispensed with the requirement of ratification of Auditorâs appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditorâs appointment is not included in the Notice of the ensuing Annual General Meeting.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments made thereto, the Company engaged the services of Mr. Vijayakrishna KT, Practicing Company Secretary to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2018. The Secretarial Audit Report in Form MR-3 is annexed as Annexure - X, which forms part of this Report.
Cost Auditor:
The Board of Directors of the Company, based on recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (holding Registration No. 000065), as Cost Auditor of the Company, for conducting the Cost Audit for the financial year 2018-19, on a remuneration as mentioned in the Notice convening the 39th Annual General Meeting.
A Certificate from M/s. Rao, Murthy & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.
Cost Audit Report for the year 2016-17 was filed with the Ministry of Corporate Affairs on October 10, 2017.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB, Sweden and AstraZeneca PLC, UK for their valuable guidance and strong support to the Companyâs operations during the year.
Your Directors would also like to thank the Central and the State Governments, other Statutory and Regulatory Authorities, the Companyâs Bankers, the Medical Profession and Trade, Vendors and Business Associates and the Members for their continued and valuable support to the Companyâs operations.
Your Directors place on record their sincere appreciation of the significant contribution and continued support of the employees at all levels to the Companyâs operations during the year.
On behalf of the Board of Directors
Place: Bengaluru Narayan K Seshadri
Date: May 21, 2018 Chairman
Mar 31, 2017
BOARDâS REPORT
The Directors are pleased to present the 38th Annual Report together with the Audited Financial Statements of the Company for the financial year ended March 31, 2017.
|
FINANCIAL RESULTS |
( Rs, in Million) |
||||
|
Particulars |
2016-17 |
2015-16 |
|||
|
Sales and Other Income |
5,592 |
5,705 |
|||
|
Profit/(Loss) before Tax |
332 |
58 |
|||
|
Provision for Taxation |
|||||
|
- Income Tax |
88 |
5 |
|||
|
- Adjustment for Deferred Tax |
- |
- |
|||
|
Total Tax |
88 |
5 |
|||
|
Profit/(Loss) after Taxation |
244 |
53 |
|||
|
Surplus brought forward from the previous year |
255 |
203 |
|||
|
Total amount available for appropriation |
500 |
255 |
|||
|
Appropriation made by Directors |
|||||
|
Transfer to General Reserve |
- |
- |
|||
|
Appropriation recommended by Directors |
|||||
|
Dividend |
- |
- |
|||
|
Tax on proposed Dividend |
- |
- |
|||
|
Surplus carried over |
500 |
255 |
|||
Dividend
Though the Company made significant progress during the year in terms of its business performance, considering its overall financial position, the Directors are not recommending any dividend for the year 2016-17.
Business
The Company registered sales of Rs, 5,047 million with a de-growth of 2.3% achieving a Net Profit of Rs, 244 million, during the year. The Company aligned its portfolio to AstraZenecaâs Global Therapeutic Focus which is in core areas of Cardio-Metabolism, Oncology and Respiratory. Accordingly, certain brands were divested globally and locally in therapy areas of Antibiotics, Local Anaesthesia, Maternal Health Care and other Products. This resulted in de-growth in financial year 2016-17 sales, however, the underlying growth of the company for 2016-17 for non-divested brands was at 15.8%.
The Companyâs Growth Platform including the innovative drugs Brilinta, Forxiga, Symbicort, Onglyza and Kombiglyze now constitutes 54% of total sales and grew by 30%.
In the last Board''s Report, members were informed that the Company had entered into Distribution Services Agreement with Dr. Reddyâs Laboratories to distribute Saxagliptin and with Sun Pharma to distribute Dapagliflozin and Ticagrelor under different brand names. During the year, these partnerships have enabled us to increase our access to a wider reach of health care professionals thereby benefitting more patients.
Brilinta (Ticagrelor) prescribed for treatment in Acute Coronary Syndrome (ACS) disease, continued to register rapid growth. This franchise crossed the Rs, 1,000 million milestone within 5 years of launch and as per IMS Health, Ticagrelor franchise enjoyed 22% market share (MAT Mar 2017). Brilinta continues to be the #1 Oral Antiplatelet brand and won the prestigious award from AWACS for âBrand of the Yearâ in chronic category.
Forxiga, which is part of a newer class of anti-diabetic known as SGLT2 (Sodium Glucose Cotransporter 2) inhibitors, also experienced a robust growth. Forxiga won the âNew Introduction of the Yearâ award for the best launch in chronic category by AIOCD-AWACS. As per IMS Health, the Dapagliflozin franchise enjoyed a 32 % market share within SGLT2 class (MAT Mar 2017).
Manufacturing
Manufacturing Operations in India continue to progress and develop. Several quality and compliance programs have been launched at the plant during last 3 years and have been instrumental in propagating the cGMP culture at the plant. The plant has successfully completed the Worldwide Audit Group audit this year and also passed inspections from the state drug authorities. The plant has undertaken several initiatives around Safety, Health & Environment, Engineering Efficiencies and achieved overall productivity improvements. The overall capacity utilization of the plant has been a specific area of focus and initiatives were undertaken to assess opportunities.
Material changes and commitment, if any, affecting financial position of the Company from the end of the Financial Year and till the date of this Report
There has been no material change or commitment affecting the financial performance 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.
Deposits
During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.
Safety Health and Environment
Safety as well as Health and Wellbeing of employees is an important issue for the Company. During the year, the Companyâs field force was trained in defensive driving techniques to enhance their onroad safety. This led to a significant reduction in the number of road accidents in the field. Further, new initiatives were introduced on building a safe working environment for our women employees. Many health awareness activities too were carried out throughout the year.
Human Resources and Employee Relations
The Company is committed to provide career opportunities for its employees and enable their growth and development. Further, there is a focus on hiring science and pharmacy graduates to strengthen the scientific orientation in the workforce. There continues to be a focus on building gender diversity in the workforce. Training programs to strengthen scientific and technical knowledge of the employees were extensively implemented across the business.
We continued our strong focus on cost optimization and controls. Measures were undertaken to reduce unproductive, discretionary and non-customer facing spends, develop simple and more efficient processes and encourage higher accountability to improve decision making and communication.
The Company continued to provide career development and learning opportunities for its employees. During the year, the India Development
Week was conducted to enable employees to develop capabilities to further their development within AstraZeneca to enable them to be ready for the focus on newer challenges and portfolio. We also continued to focus on building a diverse organization with employees from different backgrounds and cultures.
Number of Employees
The total number of employees of the Company as on March 31, 2017 was 1,141 as against 1,587 as on March 31, 2016.
Legal Matters
In the last yearâs Boardâs Report, members were informed about the following pending matters:
(a) Arbitration proceedings with National Highway Authority of India (NHAI) in respect of first and second acquisition of land made by NHAI in the year 2004 and 2011 respectively.
(b) Writ Petition before the High Court of Karnataka challenging the notice received from Bruhat Bangalore Mahanagar Palike dated August 7,
2014 and the interim stay against the demand notice granted by the High Court of Karnataka.
(c) Appeal filed by two shareholders of the Company before Securities Appellate Tribunal against part of the Order of Securities and Exchange Board of India (SEBI) dated June 24, 2014, in relation to delisting proposal of AstraZeneca Pharmaceuticals AB, Sweden.
During the year under review, there has been no reportable developments on the above matters.
Transfer to Investor Education and Protection Fund
As required under the Companies Act, 1956/2013 the unclaimed dividend amount aggregating '' 1,931,580 lying with the Company for a period of seven years pertaining to the financial year ended December 2008 was transferred during July 2016, to the Investor Education and Protection Fund, established by the Central Government.
Directorsâ Responsibility Statement
To the best of our knowledge and belief and according to the information and explanations obtained by us, the Directors state in terms of Section 134 (5) of the Companies Act, 2013 (the Act):
(a) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date.
(c) that they had 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.
(d) that they had prepared the annual financial statements on a going concern basis.
(e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to provide a healthy environment to all its employees. There is zero tolerance of discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Internal Complaints Committee received two complaints. In respect of one complaint, the recommendations of the Internal Complaints Committee have been implemented by the management. The other complaint is under review.
Board Meetings
During the year, five meetings of the Board of Directors were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, performance evaluation exercise was carried out for evaluation of the performance of the Board as a Whole, the Chairman, Independent Directors and the non-independent Directors. The Company has formulated a questionnaire to carry out the evaluation exercise. The questionnaire is structured to embed various parameters based on identified criteria and framework to carry out the evaluation effectively.
Remuneration Policy of the Company
The Remuneration Policy of the Company for appointment and payment of remuneration to the Directors, Key Managerial Personnel and Senior Executives of the Company is annexed herewith as Annexure - I, which forms part of this Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a disclosure mechanism for Directors and Employees to report any concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs code of conduct. The mechanism provides adequate safeguards for victimization of Directors / Employees. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blowing Policy is available on the Companyâs website www.astrazeneca.com/india.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow
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 - II.
Related Party Transactions
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and Senior Management which may have a potential conflict with the interest of the Company.
All related party transactions are placed before the Audit Committee for prior approval. Omnibus approval of the Audit Committee is obtained for transactions which are repetitive in nature or when the need for them cannot be foreseen in advance.
The Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board is uploaded on the Companyâs website and can be accessed at www.astrazeneca.com/ india.
The related party transactions which are of material nature, as defined in the Listing Regulations, require to be approved by the Members by way of an Ordinary Resolution. In this connection, the material related party transactions requiring Membersâ approval are dealt with at Item No.12 of the Notice, read with the Explanatory Statement.
Details of the related party transactions as required under Section 134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, are attached as Annexure - III.
Risk Management
The Company has a mechanism to inform the Board on the risk assessment and minimization procedures, and a periodical review is carried out to ensure that executive management controls are appraised by means of a properly defined framework.
Corporate Social Responsibility (CSR)
Since the average net profit of the Company during the three immediately preceding financial years was negative, the Company was not required to spend on CSR activities during the financial year 2016-17.
Founded in partnership with John Hopkins School of Public Health and Plan International, AstraZeneca global had introduced its signature global community initiative âthe Young Health Programmeâ (YHP) in the year 2010-11 in five resettlement colonies in Delhi. The overall aim of YHP is to make a meaningful difference to the health and well-being of marginalized and disadvantaged adolescent boys and girls by helping them to make informed choices to protect their health, now and in the future. YHP focuses on prevention of Non Communicable Diseases (NCDs) during adolescence because that is when risk behaviors such as tobacco use, alcohol abuse and unhealthy eating usually start. Scientific research has shown that these behaviors, once formed, are hard to change and can lead to major NCDs like type 2 diabetes, cancer, heart and respiratory disease, later in life.
YHP India is funded and supported by AstraZeneca global and the Companyâs contribution to YHP India includes employee engagement and disease awareness initiatives in the communities.
The Programme completed five successful years in 2015. AstraZeneca global launched the third phase of YHP in 2016 extending the Programme to additional five communities in North West Delhi till 2020. YHP India has directly reached out to 199,387 adolescents (114,539 girls) and has influenced 119,770 wider community members, including health professionals, educators and policy makers. Close to 2,200 young people have been trained to be educators in their local communities (1,135 girls). 15 Health Information Centres provide preventive, promotive health and counselling services and special health clinics for adolescents have been initiated across 5 project communities. In the third phase, YHP expects to reach over 130,000 adolescent girls and boys directly and indirectly influence at least 80,000 people in the wider community, including parents, policy makers, educators and health professionals.
YHP was recognized as a âCorporate CSR -Best Practiceâ at the National Human Resources Development Conference held in Bangalore in 2016.
The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure - IV, which forms part of this Report.
Extract of Annual Return
In terms of the requirements of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in the prescribed form i.e., MGT - 9 is annexed herewith as Annexure - V, which forms part of this Report.
Details of remuneration of Directors / Key Managerial Personnel
The information relating to remuneration of Directors/Key Managerial Personnel as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Act, is given in Annexure - VI, which forms part of this Report.
Particulars of Employees
The statement under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure - VII, which forms part of this Report.
However, the said Annexure shall be provided to Members on a specific request made in writing to the Company. The said information is available for inspection by the Members at the Registered Office of the Company on any working day of the Company up to the date of the 38th Annual General Meeting.
Management Discussion and Analysis
Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclousure Requirements) Regulations, 2015 (''the Listing Regulations'') is annexed as Annexure - VIII, which forms part of this Report.
Corporate Governance
A detailed report on corporate governance as required under the Listing Regulations is annexed as Annexure - IX. Certificate of the Practicing Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Report on Corporate Governance, which forms part of this Report.
Reporting of Frauds
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section 143(12) of the Act and Rules framed there under.
Particulars of Loans, Guarantees or Investments
During the year under review, the Company has not granted any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or Tribunals
During the year under review, there was no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
Committees
Pursuant to Section 178 of the Companies Act, 2013 and the rules made there under, the Board of Directors at its meeting held on May 30, 2014, had constituted the Nomination & Remuneration Committee and the Stakeholdersâ Relationship Committee. Further, pursuant to Section 135 of the Companies Act, 2013 and the rules made there under, the Board of Directors at its meeting held on August 12, 2014 constituted the Corporate Social Responsibility Committee. Details of these Committees including the Audit Committee are given in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Companies Act, 2013 provides for the appointment of Independent Directors, who shall hold office for a term of up to five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a special resolution by the Company. Further, the provisions of retirement by rotation as envisaged under Section 152 of the Companies Act, 2013, shall not apply to such Independent Directors. The Independent Directors of your Company Mr. Narayan K Seshadri, Ms. Revathy Ashok and Ms. Kimsuka Narsimhan, have furnished the required declaration under Section 149 of the Companies Act, 2013, affirming that they meet the criteria of independence.
Changes to the Board of Directors:
The following Directorship changes occurred and the Board during the year and up to the date of this report:
Resignations from the Board:
(a) Mr. D.E. Udwadia (Chairman and Independent Director), Mr. K.S. Shah (Independent Director) and Ms. Claire-Marie Oâ Grady (Non-executive Director) resigned w.e.f December 2, 2016
(b) Mr. Ian Brimicombe (Non-executive Director) resigned w.e.f May 31, 2017
(c) Mr. Sanjay Murdeshwar (Managing Director) resigned w.e.f June 30, 2017
Appointments to the Board:
(a) Ms. Revathy Ashok (Independent Director), Mr. Gregory David Emil Mueller (Non executive Director) and Mr. Rajesh Marwaha (Whole-time Director) were appointed as Additional Directors of the Company at the meeting of the Board held on December 2, 2016.
(b) Ms. Kimsuka Narsimhan (Independent Director) was appointed as Additional Director of the Company at the meeting of the Board held on February 2, 2017.
(c) Mr. Gagan Singh Bedi (Managing Director) was appointed as Additional Director of the Company w.e.f July 1, 2017 at the meeting of the Board held on June 29, 2017.
(d) Mr. Ian John Parish (Non-executive Director) was appointed a Director of the Company to fill the casual vacancy arising due to the resignation of Mr. Ian Brimicombe, at the meeting of the Board held on August 8, 2017.
A proposal is placed before the shareholders for the appointment of the aforesaid directors at the Annual General Meeting. The Board recommends their appointment to the shareholders.
Mr. Anantha Murthy N resigned as Legal Counsel & Company Secretary effective November 15, 2016. Mr. Pratap Rudra, was appointed as the Company Secretary & Legal Counsel effective February 2,
2017.
The details of familiarization programme for Directors have been provided in the Corporate Governance Report.
As on date of this report, Mr. Gagan Singh Bedi, Managing Director, Mr. Rajesh Marwaha, Chief Financial Officer & Director and Mr. Pratap Rudra, Company Secretary & Legal Counsel, are the Key Managerial Personnel of the Company.
Auditors Statutory Auditors:
At the Annual General Meeting held on August 11, 2016, M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/ E-300009), were appointed as statutory auditors of the Company for a period of 5 years viz., till the conclusion of 42nd Annual General Meeting. In terms of the first proviso on Section 139 of the Companies
Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Price Waterhouse & Co. Chartered Accountants LLP, as statutory auditor of the Company, is placed for ratification by the shareholders at the Annual General Meeting. The Company has received a certificate from the auditor to the effect that if appointed, their appointment would be in acordance with the provisions of section 139 read with section 141 of the Companies Act, 2013.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments made thereto, your Company engaged the services of Mr. Vijayakrishna KT, Practicing Company Secretary to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2017. The Secretarial Audit Report in Form MR-3 is annexed as Annexure - X, which forms part of this Report.
Cost Auditors:
The Board of Directors of the Company, based on recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bangalore, (holding Registration No.000065), as Cost Auditor of the Company, for conducting the Cost Audit for the financial year 2017-18, on a remuneration as mentioned in the Notice convening the 38th Annual General Meeting.
A Certificate from M/s. Rao, Murthy & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.
Cost Audit Report for the year 2015-16 was filed with the Ministry of Corporate Affairs on September 1, 2016.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable guidance and strong support to the Companyâs operations during the year.
Your Directors would also like to thank the Central and the State Governments, other Statutory and Regulatory Authorities, the Companyâs Bankers, the Medical Profession and Trade, Vendors & Business Associates and the Members for their continued valuable support to the Companyâs operations.
Your Directors place on record their sincere appreciation of the significant contribution and continued support of the employees at all levels to the Companyâs operations during the year.
Place : Bengaluru On behalf of the Board of Directors
Date : August 8, 2017 Narayan K Seshadri
CHAIRMAN
Mar 31, 2016
The Directors are pleased to present the 37th Annual Report together
with the Audited Financial Statements of the Company for the financial
year ended March 31, 2016.
Financials
( Rs. in Million)
Particulars 2015-16 2014-15
Sales and Other Income 5,705 5,229
Profit/(Loss) before Tax 58 -208
Provision for Taxation
- Income Tax 5 -
- Adjustment for Deferred
Tax - -
Total Tax 5 -
Profit/(Loss) after
Taxation 53 -208
Surplus brought forward
from the previous year 203 411
Total amount available for
appropriation 255 203
Appropriation made by
Directors
Transfer to General Reserve - -
Appropriation recommended
by Directors
Dividend - -
Tax on proposed Dividend - -
Surplus carried over 255 203
Dividend
Though the Company made significant progress during the year in terms
of its business performance, considering its overall financial
position, the Directors are unable to recommend any dividend for the
year 2015-16.
The Company registered sales of Rs. 5167.6 Million with a growth of 11%
achieving a Net Profit of Rs. 53 Million, during the year. The
Company''s key growth brands - Brilinta, Forxiga, Onglyza, Kombiglyze
and Symbicort, witnessed robust growth of 76% over last year, providing
strong momentum to the Company''s performance throughout the year.
Diabetes portfolio of the Company grew by 74% post acquisition from
Bristol Myers-Squibb and launch of Forxiga. Forxiga is part of a newer
class of medicines known as SGLT2 (Sodium Glucose Cotransporter 2)
inhibitors that act to block reabsorption of sugar in the kidneys.
The drug, Brilinta (Ticagrelor) which provides cardiologists with a new
and effective treatment to help reduce the rate of heart attack and
cardiovascular deaths in adult patients with Acute Coronary Syndrome
(ACS), is being received well by the market and continues to register
rapid growth. During the year, the brand continued to grow its market
share, as per IMS Health, from 9.43% (MAT March 201 5) to 1 4.3% (MAT
March 201 6) and continued to be the #1 Oral Antiplatelet brand".
During the year, Brilinta won the most prestigious OPPI Marketing
Excellence Awards in the category of "Best New Pharma Product Launch".
Brilinta also won the prestigious "Brand of The Year" AWACS - AIOCD
Award for Chronic category under "Best New Pharma Product Launch".
Meronem, became the Company''s first brand to cross the Rs. 100 Crores
milestone and also won the prestigious AWACS - AIOCD Award for "Brand
of The Year" in Acute category.
Distribution Services Agreements
During the year, the Company has entered into three Distribution
Services Agreement. With Dr. Reddy''s Laboratories for Saxagliptin and
its fixed dose combination with metformin, our patented therapy for the
treatment of type 2 Diabetes. The second Distribution Services
Agreement is with Sun Pharma for Ticagrelor, our treatment for acute
coronary syndrome (ACS) and the third Distribution Services Agreement
for the treatment of type 2 Diabetes with Sun Pharma to promote and
distribute Dapagliflozin and its fixed dose combination with metformin.
Pursuant to the above agreements, the Company, Dr. Reddy''s
Laboratories and Sun Pharma will co-promote, market & distribute
Saxagliptin, Dapagliflozin and Ticagrelor under different brand name in
Indian market.
These partnerships are in line with our commitment to transform patient
care in Diabetes and ACS. It will enable us to increase the share of
voice for the molecules through a wider reach to physicians, thereby
benefitting more number of patients.
Manufacturing
Your Directors are pleased to inform that the manufacturing operations
at the Company''s factory situated at Bangalore have improved
significantly. The factory has been able to manufacture and supply
products as per the demand. The factory has now streamlined production
of Formulations & Packaging of oral solids with a strong focus on key
performing parameters. The factory management has spearheaded many
quality and compliance driven initiatives to bring about a quality
culture change at the site. Several employee engagement, quality and
compliance improvement programs were launched during the year.
In view of low demand for Terbutaline Sulphate (TBS), which was
manufactured predominantly for export markets and TBS being the only
Active Pharmaceutical Ingredient (API) which was manufactured at the
Company''s factory in Bangalore and no other API manufacturing
activity was planned to be carried out in the future, the Board of
Directors of your Company decided to close the Active Pharmaceuticals
Ingredient Unit (API Unit) situated at Yelahanka, Bangalore.
Material changes and commitment, if any, affecting financial position
of the Company from the end of the Financial Year and till the date of
this Report
There has been no material change and commitment, affecting the
financial performance of the Company which occurred between the end of
the financial year of the Company to which the financial statements
relate and the date of this Report.
Deposits
During the year under review, your Company has neither accepted nor
renewed any deposits from public within the meaning of Section 73 of
the Companies Act, 2013 and The Companies (Acceptance of Deposits)
Rules, 2014.
Safety Health and Environment
Safety as well as health & wellbeing of employees is a core focus area
of the Company. During the year under review, the Company''s field
force was trained in defensive driving techniques to enhance their
on-road safety. There was a significant reduction in the number of road
accidents in the field. Health awareness activities were carried out,
during the year.
Human Resources and Employee Relations
The Company is committed to provide career opportunities for its
employees and enable their growth and development. During the year, the
India Development Week was conducted to enable employees to understand
how to build careers and gain experiences across functions and
businesses. Further, there is a focus on hiring science and pharmacy
graduates to strengthen the scientific orientation in the workforce.
There continues to be a focus on building gender diversity in the
workforce. Training programs to strengthen scientific and technical
knowledge of the employees were extensively implemented across all
businesses.
Number of Employees
The total number of employees of the Company as on March 31, 2016 was
1587 as against 1654 as on March 31, 2015.
Factory Land
In the last Directors'' Report, the Members were informed that the
Company had received compensation amount of (a) Rs. 13.7 million in
respect of the first acquisition of land made by National Highways
Authority of India (NHAI) in 2004 and
(b) Rs. 102.8 million in respect of second acquisition of land made by
NHAI in 2011.
The arbitration proceedings initiated by NHAI before the Arbitrator at
Bangalore, in relation to the first acquisition of land made by NHAI in
2004, are still pending.
Further, the arbitration invoked by the Company seeking, inter-alia,
enhancement of compensation from NHAI in respect of second acquisition
of land made by NHAI in 2011, is also pending.
Other Matters
In November 2012, the Company had received a notice from Bruhat
Bangalore Mahanagara Palike (BBMP) demanding from the Company,
improvement charges amounting to Rs. 15,58,04,930/-. The Company had
filed a Writ Petition before the Karnataka High Court challenging the
said demand notice from BBMP. The Court had granted interim stay
against the notice issued by BBMP and the stay continues to be in
force.
Further, the Company had received a notice dated August 7, 2014 from
BBMP demanding improvement charges amounting to Rs. 7,08,20,430/-. The
Company had filed a Writ Petition before the Karnataka High Court
challenging the said demand notice from BBMP. The Court has granted
interim stay against the notice issued by BBMP and the stay is in force
till the next date of hearing. There is no further development in the
matter since the last hearing held on 26th April 2016.
Voluntary Delisting Offer
In last year''s Directors? Report, the Members were informed that an
appeal has been filed by two shareholders of the Company
(''Appellants'') before the Securities Appellate Tribunal (SAT),
against part of the Order of Securities and Exchange Board of India
(SEBI) dated June 24, 2014, in relation to delisting proposal of
AstraZeneca Pharmaceuticals AB, Sweden (AZPAB).
The SAT which heard the appeal on September 11, 2015, had disposed of
the same and passed the following order:
a) Statement made by the Counsel for Respondent No.2 (i.e., AstraZeneca
Pharma India Limited) and Respondent No.5 (AZPAB) that they shall not
proceed with the delisting of equity shares of Respondent No.2 Company
till completion of investigation and passing order by SEBI on merits,
is accepted.
b) SEBI shall complete the investigation within a period of six months
from September 11, 2015 and pass appropriate order on merits after
hearing the parties including the Appellants, as expeditiously as
possible.
c) If the order to be passed by SEBI on merits is adverse to the
Appellants, then the said order shall not be given effect to from the
date of passing the said order till it is communicated to the
Appellants and four weeks thereafter.
There is no further development in the matter.
Transfer to Investor Education and Protection Fund
As required under Section 205C of the Companies Act, 1956, the
unclaimed dividend amount aggregating Rs. 19.96 Lacs lying with the
Company for a period of seven years pertaining to the financial year
ended December 2007 was transferred during June 2015, to the Investor
Education and Protection Fund, established by the Central Government.
Further, the unclaimed debenture amount including the interest payable
thereon aggregating Rs. 27.62 Lacs lying with the Company for a period
of seven years since January 2009 was transferred during February 2016,
to the Investor Education and Protection Fund, established by the
Central Government.
Directors'' Responsibility Statement
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors state in
terms of Section 134 (5) of the Companies Act, 2013 ("the Act"):
(a) that in the preparation of the annual financial statements for the
year ended March 31, 2016, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any.
(b) that they had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2016 and of the profit of the Company for
the year ended on that date.
(c) that they had 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.
(d) that they had prepared the annual financial statements on a going
concern basis.
(e) that they had laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate
and were operating effectively.
(f) that they had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
The details in respect of internal financial controls and their
adequacy are included in the Management Discussion & Analysis Report,
which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013
AstraZeneca is committed to provide a healthy environment to all its
employees. Hence, it does not tolerate any discrimination and/or
harassment in any form. The Company has in place a Prevention of Sexual
Harassment Policy and an Internal Complaints Committee as per the
requirements of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
During the year under review, the Internal Complaints Committee
received one complaint which was investigated. Post the investigation,
a report was submitted to management indicating that the facts of the
complaint could not be substantiated. However, to ensure comfortable
working conditions, there was a management decision to separate the
reporting line of the complainant with her consent.
Board Meetings
During the year, 6 meetings of the Board were held. For details of the
meetings of the Board, please refer to the Corporate Governance Report,
which forms part of this Report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its
performance, Board Committees and individual Directors pursuant to the
requirements of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("the
Listing Regulations").
The performance of the Board was evaluated by the Board after seeking
inputs from all the Directors on the basis of the criteria such as the
Board composition and structure, effectiveness of Board processes,
information and functioning etc.
The performance of the Committees was evaluated by the Board after
seeking inputs from each of the committee members on the basis of the
criteria such as the composition of committees, effectiveness of the
functioning of committee meetings etc.
The Board and the Nomination & Remuneration Committee also reviewed the
performance of the individual directors on the basis of the criteria
such as the contribution of the individual director to the Board and
Committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in meetings, etc.
In addition, the Chairman was also evaluated on the key aspects of his
role.
In a separate meeting of Independent Directors, the performance of
Non-Independent Directors and the performance of the Board as a whole
were evaluated taking into account the views of executive directors and
non-executive directors. The same was discussed in the Board meeting,
at which the performance of the Board, its Committees and individual
directors were also discussed.
Remuneration Policy of the Company
The Remuneration Policy of the Company for appointment and payment of
remuneration to the Directors, Key Managerial Personnel and Senior
Executives of the Company along with other related matters have been
provided in the Corporate Governance Report, which forms part of this
Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism for Directors and Employees to report
their concerns about unethical behavior, actual or suspected fraud or
violation of the Company''s code of conduct. The mechanism provides
for adequate safeguards for victimization of Director(s) / Employee(s)
who avail of the mechanism. In exceptional cases, Directors and
Employees have direct access to the Chairman of the Audit Committee.
The Whistle Blowing Policy is available on the Company''s website at
www.astrazeneca.com/india.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outflow
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 - I.
Related Party Transactions
There are no materially significant related party transactions made by
the Company with Promoters, Directors, Key Managerial Personnel and
Senior Management which may have a potential conflict with the interest
of the Company at large.
All related party transactions are placed before the Audit Committee
for its prior approval. Omnibus approval of the Audit Committee is
obtained for the transactions which are repetitive in nature or when
the need for them cannot be foreseen in advance.
The Company has adopted a Policy for dealing with Related Party
Transactions. The Policy as approved by the Board is uploaded on the
Company''s website and can be accessed at www.astrazeneca.com/india.
The related party transactions which are of material nature, as defined
in the Listing Regulations, require to be approved by the Members by
way of an Ordinary Resolution. In this connection, the material related
party transactions requiring Members'' approval, are dealt with at
Item No. 5 of the Notice, read with the relative Explanatory Statement.
Details of the related party transactions as required under Section
134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, are
attached as Annexure - II.
Risk Management
The Company has in place a mechanism to inform the Board about the risk
assessment and minimization procedures and periodical review is carried
out to ensure that executive management controls risks by means of a
properly defined frame work.
Corporate Social Responsibility (CSR)
The Company had introduced AstraZeneca''s signature global initiative
''the Young Health Programme'' (YHP) in the year 2010-11, designed to
help marginalized young people deal with health problems they face ,
enabling them to live a better life. The programme has made significant
progress since then.
YHP India has directly been able to reach out to 199,387 young people
(84,848 boys and 114,539 girls) and has influenced 119,770 wider
community members, including health professionals , educators and
policy makers.
Since the average net profit of the Company during the three
immediately preceding financial years being negative, the Company was
not required to spend on CSR activities during the financial year
2015-16.
The Annual Report on CSR activities in terms of the requirements of
Companies (Corporate Social Responsibility Policy) Rules, 2014 is
annexed herewith as Annexure - III, which forms part of this Report.
Extract of Annual Return
In terms of the requirements of Section 92(3) of the Act and Rule 12 of
the Companies (Management and Administration) Rules, 2014, the extract
of the Annual Return in the prescribed form i.e., MGT - 9 is annexed
herewith as Annexure - IV, which forms part of this Report.
Details of remuneration of Directors / Key Managerial Personnel
The information relating to remuneration of Directors/ Key Managerial
Personnel as required under Section 197(12) read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
201 4 of the Act, is given in Annexure - V, which forms part of this
Report.
Particulars of Employees
The statement under Rule 5(2) and 5(3) of The Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, are set out in
Annexure - VI which forms part of this Report.
However, the said Annexure shall be provided to Members on a specific
request made in writing to the Company. The said information is
available for inspection by the Members at the Registered Office of the
Company on any working day of the Company up to the date of the 37th
Annual General Meeting.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing
Regulations is annexed as Annexure - VII, which forms part of this
Report
.
Corporate Governance
Your Company has been practicing the principles of good corporate
governance. A detailed report on corporate governance as required under
the Listing Regulations is annexed as Annexure - VIII. Certificate of
the Practicing Company Secretary regarding compliance with the
conditions stipulated in the Listing Regulations forms part of the
Report on Corporate Governance, which forms part of this Report.
Reporting of frauds
There was no instance of fraud during the year under review, which
required the Statutory Auditors to report to the Audit Committee and /
or the Board, as required under Section 143(12) of the Act and Rules
framed thereunder.
Particulars of Loans, Guarantees or Investments
During the year under review, your Company has not granted any Loan,
Guarantees or made Investments within the meaning of Section 186 of the
Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or
Tribunals
During the year under review, there was no significant and material
orders passed by the Regulators or Courts or Tribunals impacting the
going concern status of the Company and its future operations.
Committees
Pursuant to Section 178 of the Companies Act, 2013 and the rules made
thereunder, the Board of Directors at its meeting held on May 30, 2014,
had constituted the Nomination & Remuneration Committee and the
StakeholdersRs. Relationship Committee. Further, pursuant to Section
135 of the Companies Act, 201 3 and the rules made thereunder, the
Board of Directors at its meeting held on August 12, 2014 had
constituted the Corporate Social Responsibility Committee. Details of
these Committees are given in the Corporate Governance Report, which
forms part of this Report.
Audit Committee
The details pertaining to composition of the Audit Committee are
included in the Corporate Governance Report, which forms part of this
Report.
Directors and Key Managerial Personnel
The Companies Act, 2013 provides for appointment of Independent
Directors, who shall hold office for a term of upto five consecutive
years on the Board of the Company and shall be eligible for
re-appointment on passing of a special resolution by the Company.
Further, the provisions of retirement by rotation as envisaged under
Section 152 of the Companies Act, 2013, shall not apply to such
Independent Directo'' The Independent Directors of your
Company viz., Mr. D. E. Udwadia, Mr. K. S. Shah and Mr. Narayan K
Seshadri have furnished the required declaration under Section 149 of
the Companies Act, 2013, affirming that they meet the criteria of
independence.
Ms. Rebekah Martin and Mr. Justin Ooi resigned as Director(s) of the
Company, effective November 6, 2015 and January 11, 2016, respectively.
The Board of Directors at its meeting held on November 6, 2015
appointed Ms. Claire-Marie O''Grady as Director of the Company in the
vacancy caused by the resignation of Ms. Rebekah Martin, to hold office
as such upto the date Ms. Rebekah Martin would have held the office of
Director.
Pursuant to Section 152 of the Companies Act, 2013, Mr. Sanjay
Murdeshwar, Managing Director, will retire by rotation at the ensuing
Annual General Meeting and being eligible, offer himself for
re-appointment. A resolution in this behalf is set out at Item No.2 of
the Notice of the Annual General Meeting.
The details of familiarization programme and Annual Board Evaluation
process for Directors have been provided in the Corporate Governance
Report.
As on date, Mr. Sanjay Murdeshwar, Managing Director, Mr. Rajesh
Marwaha, Chief Financial Officer and Mr. Anantha Murthy N, Legal
Counsel & Company Secretary, are the Key Managerial Personnel of the
Company.
Auditors
a) Statutory Auditors:
The present Auditors - M/s. BSR & Co. LLP, Chartered Accountants,
Bangalore who hold office up to the ensuing Annual General Meeting have
conveyed that they do not wish to be re-appointed as Statutory Auditors
of the Company for the financial year 2016-17. As such, the Board of
Directors of your Company based on the recommendation of the Audit
Committee, have approved the proposal for appointment of M/s. Price
Waterhouse & Co Chartered Accountants LLP (Firm Registration No.
304026E/E-300009), as Statutory Auditors of the Company to hold office
for a period of 5 years from the conclusion of the 37th Annual General
Meeting, subject to the approval of the Members of the Company at the
ensuing Annual General Meeting. The Notice of AGM contains a business
to this effect
for your approval.
The Board of Directors wishes to place on record its appreciation of
the guidance and support ably provided by M/s. BSR & Co. LLP during
their tenure as the Statutory Auditors of the Company.
b) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and Rule 9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and amendments made thereto, your Company
engaged the services of Mr. Vijayakrishna KT, Practicing Company
Secretary, to conduct the Secretarial Audit of the Company for the
financial year ended March 31, 2016. The Secretarial Audit Report in
Form MR-3 is annexed as Annexure - IX, which forms part of this
Report.
c) Cost Auditors:
The Board of Directors of the Company, based on recommendation of the
Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost
Accountants, Bangalore, (holding Registration No.000065), as Cost
Auditor of the Company, for conducting the Cost Audit for the financial
year 2016-17, on a remuneration as mentioned in the Notice convening the
37th Annual General Meeting.
A Certificate from M/s. Rao, Murthy & Associates, Cost Accountants, has
been received to the effect that their appointment as Cost Auditor of
the Company, if made, would be in accordance with the limits specified
under Section 141 of the Act and Rules framed thereunder.
Cost Audit Report for the year 2014-15 was filed with the Ministry of
Corporate Affairs on September 29, 2015.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable
guidance and strong support to the Company''s operations during the
year.
Your Directors would also like to thank the Central and the State
Governments, other Statutory and Regulatory Authorities, the
Company''s Bankers, the Medical Profession and Trade, Vendors &
Business Associates and the Members for their continued valuable
support to the Company''s operations.
Your Directors place on record their sincere appreciation of the
significant contribution and continued support of the employees at all
levels to the Company''s operations during the year.
On behalf of the Board of Directors
Place: Bangalore D E UDWADIA
Date: May 25,2016 CHAIRMAN
Mar 31, 2015
Dear Members,
The Directors present the 36th Annual Report together with the Audited
Financial Statements of the Company for the financial year ended March
31, 2015.
FINANCIALS
( Rs. in Million)
Particulars 2014-15 2013-14
Sales and Other Income 5,229 4,832
Profit/(Loss) Before Tax -208 -
Provision for Taxation
- Income Tax - 5
- Adjustment for Deferred Tax - -
Total Tax - 5
Profit/(Loss) after Taxation -208 -5
Surplus brought forward from the
previous year 411 416
Total amount available for
appropriation 203 411
Appropriation made by Directors
Transfer to General Reserve - -
Appropriation recommended by
Directors
Dividend - -
Tax on proposed Dividend - -
Surplus carried over 203 411
DIVIDEND
Though the Company made significant progress during the year in terms
of its business performance, considering its overall financial
position, the Directors are unable to recommend any dividend for the
year 2014-15.
The Company registered sales of Rs. 4657.8 Million (excluding export
sales), a 12.4% growth over the last year. The growth has been steady
and while over the 9 months April-December 2014, the Company grew by
13.6%, last quarter registered a 9% growth over the same quarter
previous year (excluding export sales).
The Company's key growth brands - Brilinta, Onglyza, Kombiglyze,
witnessed robust growth, providing strong momentum to the Company's
performance throughout the year. Diabetes portfolio of the Company grew
by 33% post acquisition from BMS.
The drug, BRILINTA (Ticagrelor) which provides cardiologists with a new
and effective treatment to help reduce the rate of heart attack and
cardiovascular deaths in adult patients with Acute Coronary Syndrome
(ACS), is being received well by the market and continues to register
rapid growth. During the year, the brand continued to grow its market
share, as per IMS Health, from 6.7% (MAT March 2014) to 9.7% (MAT March
2015)1. Members were informed that, as per IMS Health data (YTD March
2015)2, Brilinta became the #1 brand in the oral anti platelets segment
in the Indian Pharmaceutical Market, within 29 months of launch.
In the last Directors' Report, Members were informed that Drug Pricing
Control Order was notified in May 2013. Since then, ceiling prices have
been announced by the Government in a phased manner. In the year
2014-15, 10 selling units across 5 brands of the Company were
additionally covered under the NLEM. While the said Order benefits the
patients by making essential drugs affordable, it had an adverse impact
on the Company's profitability due to average price reduction of 41%.
The Company, during the year, undertook a comprehensive review of the
manufacturing standards of its contract manufacturers and identified
certain process weaknesses. Production was stopped pending the review.
Due to this, a significant part of the Company's portfolio, including
several of its major brands, namely, Bricanyl (Respiratory), Bricarex
(Respiratory), Linctus Codeinae (Respiratory), Xylocaine (Local
Anesthesia), Sensorcaine (Local Anesthesia), Cerviprime (Maternal),
Prostodin (Maternal), Seloram and Selomax (Cardiovascular) were not
available in the market during a substantial part of the year.
MANUFACTURING
The Company continues to benefit from the comprehensive review of its
manufacturing operations with assistance from AstraZeneca Group.
The manufacturing site at Yelahanka has resolved many constraints in
the supply during the year 2014-15, consistently meeting supply
requirements. The Tablet Manufacturing Plant has been progressively
ramping up production volumes.
The Directors are pleased to inform that the entire manufacturing of
Oral Solid Dosages has been shifted to the New Tablet Manufacturing
Plant on 1st July 2014 and the Old Pharma Plant has been shut down in
December 2014. Now all the manufacturing and supply of all oral solids
from the site is being carried out from the New Tablet Plant only.
The current oral solid dosage facility has spare manufacturing
capacity. Different options are under consideration to utilize this
capacity to put the Company on a stronger footing for the future.
DEPOSITS
During the year under review, your Company has neither accepted nor
renewed any deposits from public within the meaning of Section 73 of
the Companies Act, 2013 and The Companies (Acceptance of Deposits)
Rules, 2014.
SHIFTING OF REGISTERED OFFICE
Your Company has shifted its Registered Office to its new premises
situated at Block N1, 12th Floor, Manyata Embassy Business Park,
Rachenahalli, Outer Ring Road, Bangalore - 560045, effective September
1, 2014.
SAFETY HEALTH AND ENVIRONMENT
Providing a safe workplace and promoting the health and wellbeing of
all its people remains a core consideration for the Company. During the
period under review, the Company's field force was trained in defensive
driving techniques which resulted in decrease in number of road
accidents. Medical check-up for all the field employees was done during
the period under review.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
The Company continued to enjoy good industrial relations and
co-operation with its employees. The pending long term settlement was
signed with the field union in this year effective January 1, 2013.
Employee engagement continued to be high as reflected in our employee
survey which was done during the year. Talent management and providing
career opportunities to our employees remained key focus in our people
devolepment strategy, The Campus Hire Program was started to induct
Pharmacy Graduates into the field force.
FACTORY LAND AT YELAHANKA
In the last Directors' Report, the Members were informed that the
Company had received compensation amount of (a) Rs. 13.7 million in
respect of the first acquisition of land made by NHAI in 2004 and (b)
Rs. 102.8 million in respect of second acquisition of land made by NHAI
in 2011.
The arbitration proceedings initiated by NHAI before the Arbitrator at
Bangalore, in relation to the first acquisition of land made by NHAI in
2004, are still pending.
Further, the arbitration invoked by the Company seeking, inter-alia,
enhancement of compensation from NHAI in respect of second acquisition
of land made by NHAI in 2011, is also pending.
OTHER MATTERS
In November 2012, the Company had received a notice from Bruhat
Bangalore Mahanagara Palike (BBMP) demanding from the Company,
improvement charges amounting to Rs. 15,58,04,930/-. The Company had
filed a Writ Petition before the Karnataka High Court challenging the
said demand notice from BBMP. The Court had granted interim stay
against the notice issued by BBMP and the stay continues to be in
force.
Further, the Company received a notice dated August 7, 2014 from BBMP
demanding improvement charges amounting to Rs. 7,08,20,430/-. The
Company filed a Writ Petition before the Karnataka High Court
challenging the said demand notice from BBMP. The Court has granted
interim stay against the notice issued by BBMP and the stay is in force
till the next date of hearing.
In the last Directors' Report, the members were informed of the ongoing
investigation pursuant to a First Information Report filed in February
2012 by the Central Bureau of Investigation against, among others, the
Company. The investigation was concluded and a charge sheet was filed
in the Court by CBI on August 5, 2013. Neither your Company nor any of
its officials/employees have been named as accused in the charge sheet.
The proceedings are going on against the accused named in the charge
sheet.
VOLUNTARY DELISTING OFFER
In last year's Directors' Report, Members were informed that a Writ
Petition had been filed by two shareholders of the Company before the
Bombay High Court seeking, inter-alia, an order from the Court,
restraining the Company and AstraZeneca Pharmaceuticals AB, Sweden
(AZPAB) from implementing the voluntary delisting as proposed by AZPAB.
The Bombay High Court, which heard the Petition on October 8, 2014,
disposed of the same, with the following directions:
(i) the Petitioners as well as the Company and AZPAB are at liberty to
prefer appeal against Securities and Exchange Board of India (SEBI)
Order dated June 24, 2014, to the Securities Appellate Tribunal (SAT),
Mumbai, within 6 weeks;
(ii) until SAT hears and disposes of the petitioners' appeal, the
Company and AZPAB, shall not take any further steps in the process of
delisting of equity shares and
(iii) SAT to hear and decide the appeals as expeditiously as possible
and preferably by February 28, 2015.
Pursuant to the above, an appeal has been filed by two shareholders of
the Company before the SAT, against part of the Order of SEBI dated
June 24, 2014, in relation to delisting proposal of AZPAB. There is no
material development in the appeal and the matter has been adjourned by
SAT from time to time. The next hearing has been scheduled for August
11,2015.
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 (5) of the Companies Act,
2013 (the Act):
(a) that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures - if any.
(b) that such accounting policies as mentioned in notes to the
financial statements have been selected and applied consistently and
judgments and estimates have been made 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 of the loss of the Company for the 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
this Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities.
(d) that the annual financial statements have been prepared on a going
concern basis.
(e) that proper internal financial controls were in place and that the
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.
The details in respect of internal financial controls and their
adequacy are included in the Management Discussion & Analysis Report,
which forms part of this Report.
Disclosure as required under Section 22 of Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013
AstraZeneca is committed to provide a healthy environment to all its
employees. Hence, it does not tolerate any discrimination and/or
harassment in any form. The Company has in place a Prevention of Sexual
Harassment Policy in line with the requirements of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
During the year under review, the Company has not received any
complaint of sexual harassment at the workplace.
Board Meetings
Eight meetings of the Board were held during the year. For details of
the meetings of the Board, please refer to the Corporate Governance
Report, which forms part of this Report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance, Board Committees and individual Directors pursuant to the
requirements of the Companies Act, 2013 and the revised Clause 49 of
the Listing Agreement.
The performance of the Board was evaluated by the Board after seeking
inputs from all the Directors on the basis of the criteria such as the
Board composition and structure, effectiveness of Board processes,
information and functioning etc.
The performance of the Committees was extensively evaluated by the
Board after seeking inputs from each of the committee members on the
basis of the criteria such as the composition of committees,
effectiveness of the functioning of committee meetings etc.
The Board and the Nomination & Remuneration Committee also reviewed the
performance of the individual directors on the basis of the criteria
such as the contribution of the individual director to the Board and
Committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in meetings, etc.
In addition, the Chairman was also evaluated on the key aspects of his
role.
In a separate meeting of Independent Directors, the performance of
Non-Independent Directors and the performance of the Board as a whole
were evaluated taking into account the views of executive directors and
non-executive directors. The same was discussed in the Board meeting,
at which the performance of the Board, its Committees and individual
directors were also discussed.
Policy on Directors' appointment and remuneration and other details
The Company's Policy on Directors' appointment and remuneration and
other matters provided in Section 178(3) of the Companies Act, 2013 has
been disclosed in the Corporate Governance Report, which forms part of
this Report.
Number of Employees
The total number of employees of the Company as on March 31,2015 was
1654 as against 1559 as on March 31,2014.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism for Directors and Employees to report
their concerns about unethical behavior, actual or suspected fraud or
violation of the Company's code of conduct. The mechanism provides for
adequate safeguards for victimization of Director(s) / Employee(s) who
avail of the mechanism. In exceptional cases, Directors and Employees
have direct access to the Chairman of the Audit Committee. The Whistle
Blowing Policy is available on the Company's website
www.astrazeneca.com/india.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outflow
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 - I.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by
the Company with Promoters, Directors, Key Managerial Personnel and
Senior Management which may have a potential conflict with the interest
of the Company at large.
All related party transactions are placed before the Audit Committee
for its approval. Prior omnibus approval of the Audit Committee is
obtained for the transactions which are repetitive in nature, in terms
of the requirements of Clause 49(VII) of the Listing Agreement entered
into with Stock Exchanges ('Clause 49').
The Company has adopted a Policy for dealing with Related Party
Transactions. The Policy as approved by the Board is uploaded on the
Company's website and can be accessed at www.astrazeneca.com/india.
The related party transactions which are of material nature, as defined
in Clause 49, require to be approved by the Members by way of a Special
Resolution. In this connection, the material related party transactions
requiring Members' approval, are dealt with at Item Nos.6 and 7 of the
Notice, read with the relative Explanatory Statement.
Details of the related party transactions as required under Section
134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, is
attached as Annexure - II.
Risk Management Policy
The Company has framed a Risk Management Policy which was approved by
the Board pursuant to the requirements of Clause 49 of the Listing
Agreement. The details of the Risk Management Committee and its terms
of reference are set out in the Corporate Governance Report which forms
part of this report.
Corporate Social Responsibility
The Company introduced AstraZeneca's signature global initiative the
Young Health Programme (YHP) in Financial Year 2010-11, designed to
help marginalized young people deal with health problems they face,
enabling them to live a better life. The programme has made significant
progress since then.
YHP India has directly been able to reach out to 104,343 young people
(47,088 boys and 57,255 girls) and has influenced 103,940 wider
community members, including health professionals, educators and policy
makers.
The several achievements of YHP India have been through two key
approaches namely, the establishment of 15 Health Information Centers
(HICs) which act as a forum for youth. The second vital approach is the
training and support of 2,136 Peer Educators (of which 1,103 are girls)
who are responsible for spreading awareness in their respective
communities.
In India, YHP focuses on hygiene, infection, reproductive health and
wider health issues (such as tobacco and alcohol abuse) of adolescents.
Customized packages comprising of training curriculum is disseminated
through various mediums such as street plays, magic shows, workshops,
community meetings, video shows, competitions, thematic camps and
fairs. Training of 588 healthcare workers including Anganwadi workers
(family health), ASHA workers (community health) and Auxiliary Nurse
Midwives (ANMs) have been a part of YHP's achievements as well. YHP
India continues to enhance knowledge of health issues and ways to cope
with it for adolescents and hopes to reach a larger audience as the
time progresses.
The Annual Report on CSR activities in terms of the requirements of
Companies (Corporate Social Responsibility Policy) Rules, 2014 is
annexed herewith as Annexure - III, which forms part of this Report.
Extract of Annual Return
In terms of the requirements of Section 92(3) of the Act and Rule 12 of
the Companies (Management and Administration) Rules, 2014, the extract
of the Annual Return in the prescribed form i.e., MGT - 9 is annexed
herewith as Annexure - IV, which forms part of this Report.
Details of remuneration of Directors / Key Managerial Personnel
The information relating to remuneration of Directors/ Key Managerial
Personnel as required under Section 197(12) read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
201 4 of the Act, is given in Annexure - V, which forms part of this
Report.
Particulars of Employees
Information required under the provisions of Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, are set out in Annexure - VI which forms part of this Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under Clause 49
of the Listing Agreement is annexed as Annexure - VII, which forms part
of this Report.
Corporate Governance
Your Company has been practicing the principles of good corporate
governance. A detailed report on corporate governance as required under
Clause 49 of the Listing Agreement is annexed as Annexure - VIII.
Certificate of the Statutory Auditors regarding compliance with the
conditions stipulated in Clause 49 of the Listing Agreement forms part
of the Report on Corporate Governance, which forms part of this Report.
Particulars of Loans, Guarantees or Investments
During the year under review, your Company has not granted any Loan,
Guarantees or made Investments within the meaning of Section 186 of the
Companies Act, 2013.
Significant and material orders passed by the Regulators or Courts or
Tribunals
During the year under review, there was no significant and material
orders passed by the Regulators or Courts or Tribunals impacting the
going concern status of the Company and its future operations.
COMMITTEES
Pursuant to Section 178 of the Companies Act, 2013 and the rules made
thereunder, the Board of Directors at its meeting held on May 30, 2014,
constituted the Nomination & Remuneration Committee and the
Stakeholders' Relationship Committee. Further, pursuant to Section 135
of the Companies Act, 201 3 and the rules made thereunder, the Board of
Directors at its meeting held on August 12, 2014 constituted the
Corporate Social Responsibility Committee. Details of these Committees
are given in the Corporate Governance Report.
Further, in terms of Clause 49 of the Listing Agreement, the Board of
Directors at its meeting held on February 11, 2015, constituted the
Risk Management Committee, which comprises of Mr. K S Shah, Mr. Justin
Ooi, Ms. Rebekah Martin and Mr. Sanjay Murdeshwar, as Members of the
Committee.
Audit Committee
The details pertaining to composition of the Audit Committee are
included in the Corporate Governance Report, which forms part of this
Report.
DIRECTORS
The Companies Act, 2013 provides for appointment of Independent
Directors, who shall hold office for a term of upto five consecutive
years on the Board of the Company and shall be eligible for
re-appointment on passing of a special resolution by the Company.
Further, the provisions of retirement by rotation as envisaged under
Section 152 of the Companies Act, 2013, shall not apply to such
Independent Directors. Based on the recommendation of the Nomination &
Remuneration Committee, the Board of Directors at its meeting held on
August 12, 2014, appointed Mr. D. E. Udwadia, Mr. K. S. Shah and Mr.
Narayan K Seshadri, as Independent Directors, to hold office as such,
for a period of 5 years i.e., upto September 29, 2019, which was
approved by the shareholders at the last Annual General Meeting of the
Company held on September 30, 2014. The Independent Directors have
furnished the required declaration under Section 149 of the Companies
Act, 2013, affirming that they meet the criteria of independence.
Pursuant to Section 152 of the Companies Act, 2013, Mr. Ian Brimicombe,
Director, will retire by rotation at the ensuing Annual General Meeting
and being eligible, offer himself for re-appointment.
The Board of Directors at its meeting held on November 3, 2014,
appointed Ms. Rebekah Martin, as an Additional Director. She will hold
office up to the date of the ensuing Annual General Meeting and is
eligible for appointment as Director. A resolution in this behalf is
set out at Item No.5 of the Notice of the Annual General Meeting.
Mr. Robert Haxton resigned as Wholetime Director of the Company,
effective December 14, 2014.
The details of familiarization programme and Annual Board Evaluation
process for Directors have been provided in the Corporate Governance
Report.
DETAILS OF KEY MANAGERIAL PERSONNEL
a) Mr. Rajesh Marwaha, was appointed as the Chief Financial Officer of
the Company, effective August 4, 2014.
b) Mr. Pawan Singhal, resigned as VP - Legal & Company Secretary,
effective July 31,2014.
c) Mr. Anantha Murthy N, was appointed as the Legal Counsel & Company
Secretary, effective August 1,2014.
AUDITORS
a) Statutory Auditors:
The present Auditors - M/s. BSR & Co. LLP, Chartered Accountants, hold
office up to the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
b) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, Secretarial Audit has been carried out by Mr.
Vijayakrishna KT, Practising Company Secretary and the Report is
annexed as Annexure - IX.
c) Cost Auditors:
The Board of Directors of the Company has appointed M/s. Rao, Murthy &
Associates, Cost Accountants, Bangalore, (holding Registration
No.000065), as Cost Auditors of the Company, for conducting the Cost
Audit for the year 2014-15. Cost Audit Report for the year 2013-14 was
filed with the Ministry of Corporate Affairs on September 18, 2014.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable
guidance and strong support to the Company's operations during the
year.
Your Directors would also like to thank the Central and the State
Governments, other Statutory and Regulatory Authorities, the Company's
Bankers, the Medical Profession and Trade, Vendors & Business
Associates and the Members for their continued valuable support to the
Company's operations.
Your Directors place on record their sincere appreciation for the
significant contribution and continued support of the employees at all
levels to the Company's operations during the year.
On behalf of the Board of Directors
Place: Bangalore D E UDWADIA
Date : August 4, 2015 CHAIRMAN
Mar 31, 2014
Dear members,
The Directors present the 35th Annual Report together with the Audited
Financial Statements of the Company for the Financial Year ended March
31, 2014.
FINANCIALS
(RS. in Million)
Particulars 2013-14 2012-13
Sales and Other Income 4,832 4,009
Profit/ (Loss) Before Tax - (703)
Provision for Taxation
-Income Tax 5 15
-Adjustment for Deferred Tax - 178
Total Tax 5 193
Profit/(Loss)after Taxation (5) (895)
Surplus brought forward from the
previous year 416 1,312
Total amount available for appropriation 411 416
Appropriation made by Directors
Transfer to General Reserve - -
Appropriation recommended by Directors
Dividend - -
Tax on proposed Dividend - -
Surplus carried over 411 416
DIVIDEND
Though the Company made significant progress during the year in terms
of its business performance, considering its overall financial
position, the Directors are unable to recommend any dividend for the
year 2013-14.
The Year 2013-14 has been the first full year post supply stabilization
from the Company''s factory operations, which had impacted the
performance of the Company since March 2012. Continuing with its
commitment to growth, the Company registered sales of RS. 4415.6
Million, a 24% growth over the last year. The growth has been steady
and while over the 9 months April-December 2013, the Company grew by
22%, the last quarter growth surpassed the growth rate by registering a
30% growth over the same quarter previous year.
In the last Directors'' Report, the Members were informed that the
Company''s efforts would be focused on regaining the market position by
re- introduction of the products which were impacted due to supply
constraints. The Directors are pleased to inform that, despite the long
disruption in the supply, the Company has delivered strong growth in
these products and has been able to regain 60-80% of the market share1
in respect of most of the key products not impacted by regulatory
changes.
The Year 2013-14 witnessed a series of regulatory interventions in the
Indian Pharmaceutical Market. In the last Directors'' Report, Members
were informed that the National Pharmaceutical Pricing Policy 2012
announced by the Government in December 2012 had brought 348 medicines
covered in the National List of Essential Medicines (NLEM), under price
control. Based on this policy, Drug Pricing Control Order was notified
in May 2013. Since then, ceiling prices have been announced by the
Government in a phased manner. Uncertainty around the announcements on
the ceiling prices and the multiple notifications by the Government
impacted the market growth for these products. 15 SKUs across 8 brands
of the Company were covered under the NLEM.
The drug, BRILINTA® (Ticagrelor) which provides cardiologists with a
new and effective treatment to help reduce the rate of heart attack and
cardiovascular deaths in adult patients with Acute Coronary Syndrome
(ACS), has been received well by the market and continues to register
rapid growth. During the year, the brand continued to grow its market
share, as per IMS Health, from 1.4% (MAT March 2013) to 6.7% (MAT March
2014). Members were informed that, as per IMS Health data, the brand
ranked in the top 10 brands in the oral antiplatelets segment in the
Indian Pharmaceutical Market.
MANUFACTURING
The Company benefitted from a comprehensive review of its manufacturing
operations with assistance from AstraZeneca group, initiated during
2012-13.
The manufacturing site at Yelahanka has resolved many constraints in
the supply during the year 2013- 14, consistently meeting supply
requirements. The remediation measures established in the previous year
have delivered discernible improvements in Quality Management System
and Quality Capabilities in the current year, such as Good
Manufacturing Practices (GMP), root cause analysis and shop floor
Quality Assurance Controls. Resultantly, GMP metrics tracked by the
Company on site have also shown significant improvements.
The Directors are pleased to inform that the planned move of
manufacture and Quality Control laboratory from its existing facilities
to the new state-of-the- art tablets and laboratory facility was
completed as per the plan with the first commercial supply from the new
facility taking place in the first quarter of Financial Year 2013-14.
The establishment programme was delivered to plan, with planned QC
transfers and the majority of tablet transfers delivered by the end of
the Financial Year 2013-14. This will enable the cessation of
manufacture from the existing manufacturing facility and will ensure a
platform for consistent supply of global quality medicines.
The supply assurance of Terbutalane Sulphate (TBS) API to AstraZeneca
Group was strengthened with an INR 185.5 million investment. The
upgrade programme was completed in the last quarter of Financial Year
2013-14. The Company is currently establishing new quality control
testing equipment and is experiencing some product supply delays.
As has been widely reported, regulatory authorities around the world
have recently adopted a more stringent and forensic approach to their
audit programmes, with particular emphasis on data integrity. In line
with this, our World Wide Audit Group (WWAG) is now following a similar
format for their audits.
The outsourcing programme of sterile products, liquid orals and
semisolids completed during the previous year has presented significant
challenges in sustaining supply in accordance with GMP. The Company
continues to monitor and review the performance of its external
partners. As compliance issues arise, the Company makes its assessment
and develops and implements corrective action plans as appropriate.
VOLUNTARY NON-REPAYABLE FINANCIAL GRANT BY ASTRAZENECA PHARMACEUTICALS
AB, SWEDEN
As you are aware, last year, in order to assist the Company in its
efforts to establish/grow its presence in the Indian market despite the
significant losses incurred, AstraZeneca Pharmaceuticals AB Sweden
(Promoter Company) had agreed to provide a voluntary non-repay able
financial grant of approximately USD 22.5 million to USD 26.5 million
over the three years period Financial Year 2013-14 to Financial Year
2015-16 under a Subvention Agreement dated May 7, 2013.
During the year ended 31 March 2014, the Company received a sum of RS.
862.4 million as financial grant under the said agreement. The Promoter
Company vide its letter dated March 1, 2014 informed the Board of
Directors of the Company of a revision of the said agreement, whereby
the payment under the said agreement was revised to USD 14 million
(Indian rupee equivalent 862.4 million) and period covered under the
said agreement to financial year 2013-14. The Promoter Company, in
terms of the said agreement, vide its letter dated April 25, 2014
terminated it effective March 25, 2014 on the ground that the Company''s
business and financial performance has been in line with more recent
expectations and that the Company shall not require any further grant
for the financial years 2014-15 and 2015-16.
SAFETY HEALTH AND ENVIRONMENT
Providing a safe workplace, and promoting the health and wellbeing of
all its people remains a core consideration for the Company. During the
period under review, the Company''s field force was trained in defensive
driving techniques which resulted in a decreased number of road
accidents. Regular initiatives like ''Hypertension awareness'' and
''Diabetes Awareness'' continued during the year to encourage the
Company''s employees to adopt healthy and productive lifestyle
practices.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
The Company continued to enjoy good industrial relations and
cooperation with its employees. Retaining and developing talent during
a period when the Company is targeting to return to growth, employee
morale and motivation was a priority. The increased focus on employee
engagement through improved communication and building accountability
at all levels had a positive impact on talent management. Managers were
trained in conducting performance coaching and feedback with a view to
enhancing capabilities of employees.
FACTORY LAND AT YELAHANKA
The Company received compensation amount of RS. 13.7 million in respect
of first acquisition of land made by NHAI in 2004. However, the review
petition which was filed by NHAI before the Karnataka High Court, and
the arbitration proceedings initiated by NHAI before the Arbitrator at
Bangalore, are still pending.
The Company received further compensation amount of RS.102.8 million in
respect of second acquisition of land made by NHAI in 2011. The Company
subsequently invoked arbitration seeking, inter alia, enhancement of
compensation from NHAI.
OTHER MATTERS
In December 2012, the Company had received a notice from Bruhat
Bangalore Mahanagar Palike (BBMP) demanding from the Company
improvement charges amounting to Rs.15,58,04,930/-. The Company had
filed a Writ Petition before the Karnataka High Court challenging the
said demand notice from BBMP. The Court had granted interim stay
against the notice issued by BBMP and the stay is in force.
In the last Directors'' Report, the members were informed of the ongoing
investigation pursuant to a First Information Report filed in February
2012 by the Central Bureau of Investigation against, among others, the
Company. During the year, the investigation was concluded and a charge
sheet was filed in the Court by CBI on August 5, 2013. Neither your
Company nor any of its officials/employees have been named as accused
in the charge sheet.
VOLUNTARY DELISTING OFFER
AstraZeneca Pharmaceuticals AB, Sweden (AZPAB) vide its letter dated
March 1, 2014, notified the Company of its proposal to make a voluntary
delisting offer to the public shareholders of the Company, in
accordance with the Securities and Exchange Board of India (Delisting
of Equity Shares) Regulations, 2009, with a view to delist the equity
shares of the Company from BSE Limited (BSE), National Stock Exchange
of India Limited (NSE) and Bangalore Stock Exchange Limited (BgSE),
where the equity shares of the Company are currently listed (delisting
proposal).
The Board at its meeting held on March 5, 2014 considered the delisting
proposal as above and sought additional information from AZPAB. On
receipt of the additional information, the Board had a further meeting
on March 15, 2014, at which, after consideration of the additional
information, it approved the delisting proposal.
Thereafter, the Board met on April 15, 2014 to consider seeking
approval of shareholders through Postal Ballot and deferred the
decision in light of further clarifications and explanations sought
from ICICI securities Ltd. (Manager) and Walker Chandiok & Co LLP
(Valuer). Upon receipt of the clarifications sought, the Board again
met on May 5, 2014 and after consideration of the clarifications
provided, approved seeking approval of shareholders of the Company
through Postal Ballot, for voluntary delisting of equity shares from
the stock exchanges.
In terms of the report submitted by the Scrutinizer, the Special
Resolution in relation to voluntary delisting of equity shares of the
Company from stock exchanges has been duly approved by the requisite
majority of shareholders. Further, the number of votes cast by public
shareholders in favour of the Special Resolution being two times more
than the votes cast against it by the public shareholders, the
additional requirement as envisaged in Regulation 8(1)(b) of Securities
and Exchange Board of India (Delisting of Equity Shares) Regulations,
2009 has been satisfied and accordingly, the Special Resolution would
be acted upon by the Company.
SABI ORDER DATED JUNE 24, 2014
The Securities & Exchange Board of India (SABI), came across certain
reports stating that the Offer for Sale (NFS) of the shares of the
Company carried out by the Promoter - AstraZeneca Pharmaceuticals AB,
Sweden, (AZPAB) on May 26, 2013, was a deliberate attempt to
subsequently get the shares of the Company delisted at ease. It was
also reported that more than 94% of total shares offered through OFS
had been subscribed by 6 Foreign Institutional Investors (FII).
SEBI has in its order dated June 24, 2014, stated that the facts and
circumstances stated in the order, raises suspicion that Elliott Group
who are the end subscribers in respect of shares held by Fils, may have
been working in collaboration/ concert with the Promoters, to
facilitate the delisting of shares of the Company.
The Order also states that the matter requires further examination and
in rder to protect the interest of the retail investors in the
delisting process which is already on, SEBI issues the following
directions:
(a) Bombay Stock Exchange Limited and National Stock Exchange of India
Limited shall closely monitor the entire delisting process of the
Company and allow the final delisting of shares only after satisfying
themselves that the process has been fair and transparent
(b) Bombay Stock Exchange Limited and National Stock Exchange of India
Limited shall promptly report any aberrations noticed in the delisting
process of the Company, to SEBI
(c) The Promoters of the Company shall finally purchase shares from
public shareholders in the delisting offer only after seeking approval
of Bombay Stock Exchange Limited and National Stock Exchange of India
Limited.
WRIT PETITION - VOLUNTARY
DELISTING OFFER
A Writ Petition has been filed by two shareholders of the Company
before the Bombay High Court seeking inter-alia an order from the
Court, restraining the Company and AZPAB from implementing the said
voluntary delisting as proposed by AZP AB.
The Hon''ble High Court which heard the matter on July 14, 2014
adjourned the same to July 24, 2014, with a direction that any steps
taken hereafter shall be subject to further orders and shall not
entitle any of the parties to claim equities.
The Company has filed its affidavit before the Court stating that it is
only a target Company and that it has no stake in the Delisting
Proposal of AZPAB other than to comply with the mandatory requirements
under the SEBI (Delisting of Equity Shares) Regulations, 2009
(ÂDelisting Regulations'') and the procedure prescribed thereunder &
the Companies Act, 2013 and that it has duly complied with the
requirements as such.
At the hearing held on July 24, 2014, SEBI had sought additional time
to file its affidavit in the matter and in view thereof, the Court
adjourned the matter by 2 weeks. Further, at the hearing held on August
7, 2014, SEBI sought further additional time to file its affidavit,
based on which, the Court has granted one week''s time to enable SEBI
file its affidavit. The matter is now scheduled for hearing by the
Court on August 14, 2014.
ACQUISITION OF BMS''S DIABETES INTEREST
In December 2013, AstraZeneca globally announced an agreement to
purchase BMS''s 50% interest in AstraZeneca''s and BMS''s joint diabetes
business. On February 1, 2014, AstraZeneca completed the acquisition
of BMS''s interests in the companies'' diabetes alliance. The acquisition
provided AstraZeneca with 100% ownership of the intellectual property
and global rights for the development, manufacture and
commercialisation of the diabetes business, which includes Onglyza
(saxagliptin), Kombiglyze XR (saxagliptin and metformin HCI extended
release), Komboglyze (saxagliptin and metformin HCI), Farxiga
(dapagliflozin, marketed as Forxiga outside the US), Byetta
(exenatide), Bydureon (exenatide extended release for injectable
suspension), metreleptin and Symlin (pramlintide acetate).
The Company had since 2010 been associated with BMS in promotions of
Onglyza (Saxagliptin), Kombiglyze XR (Saxagliptin and Metformin HCI
extended release) and Byetta in the Indian Pharmaceutical Market. The
acquisition enables the Company to focus on the Diabetes segment, which
today impacts approximately 65 million people in India, who are
suffering from the disease. The Company, over the next few years,
expects to launch more products in disease segment and strengthen its
position.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act), the
Board of Directors states that:
a) In the preparation of the Company''s Annual Accounts, the applicable
accounting standards had been followed and proper explanations had been
provided for material departures, wherever applicable.
b) It has selected such accounting policies which had been 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 year March 31, 2014 and of the Loss of
the company for that period.
c) It had 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.
d) The financial statements had been prepared on a going concern basis.
BOARD''S RESPONSE TO AUDIT OBSERVATIONS
The observations made by the Auditors under para (x) of the Annexure to
the Auditors'' Report relating to cash loss in the immediately preceding
financial year is self explanatory. The management has initiated and is
vigorously pursuing plans and actions to drive the Company back to
profitability. These measures would help the Company in stabilizing
its fund position during the Financial Year2014-15.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
Information required under Section 217(1)(e) of the Companies Act, 1956
(1956 Act), read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988, is given in Annexure-I
and forms part of this Report.
Information under Section 217 (2A) of the 1956 Act, read with Companies
(Particulars of Employees) Rules, 1975, forms part of this Report.
However, as per the provisions of Section 219(1)(b)(iv) of the 1956
Act, the Report and the Accounts are being sent to all the members,
excluding the information under Section 217(2A) of the 1956 Act. Any
member, desirous of obtaining a copy of this Statement, may write to
the Company Secretary.
CORPORATE SOCIAL RESPONSIBILITY
The Company introduced AstraZeneca''s signature global initiative the
Young Health Programme (YHP) in Financial Year 2010-11, designed to
help marginalized young people deal with health problems they face,
enabling them to live a better life. The programme has made significant
progress since then.
YHP India has directly been able to reach out to 89,493 young people
(40,271 boys and 49,222 girls), and has influenced 84,387 wider
community members, including health professionals, educators and policy
makers.
The several achievements of YHP India have been through two key
approaches namely, the establishment of 15 Health Information
Centres(HICs) which act as a forum for the youth. The second vital
approach is the training and support of 1,581 Peer Educators (of which
814 are girls) who are responsible for spreading awareness in their
respective communities.
In India, YHP focuses on hygiene, infection, reproductive health and
wider health issues (such as tobacco use and alcohol abuse) of
adolescents. Customized packages comprising of training curriculum is
disseminated through various mediums such as street plays, magic shows,
workshops, community meetings, video shows, competitions, thematic
camps and fairs. Training of 588 healthcare workers including Anganwadi
workers (family health), ASHA workers (community health) and ANMs
(Auxiliary Nurse Midwives) have been a part of YHP''s achievements as
well. YHP India continues to enhance knowledge on health issues and
ways to cope with it for adolescents and hopes to reach a larger
audience as the year progresses.
COMMITTEES
Pursuant to Section 178 of the Companies Act, 2013 and the rules made
thereunder, the Board of Directors at its meeting held on May 30, 2014,
constituted the Nomination & Remuneration Committee and the
Stakeholders'' Relationship Committee, details of which are given in the
Corporate Governance Report.
Further, pursuant to Section 135 of the Companies Act, 2013 and the
rules made thereunder, the Board of Directors at its meeting held on
August 12, 2014, constituted the Corporate Social Responsibility
Committee, which comprises of Mr. Ian Brimicombe, Mr. DE Udwadia and
Mr. Sanjay Murdeshwar, as Members of the Committee.
CORPORATE GOVERNANCE
The Company has taken steps to ensure that all mandatory provisions of
Corporate Governance as per the Listing Agreement with the Stock
Exchanges, where the Company shares are listed, have been complied
with.
The Management Discussion and Analysis is attached as Annexure-ll and
forms part of this Report.
The Report on Corporate Governance, along with a certificate from the
Statutory Auditors confirming compliance, is annexed as Annexure-lll
and forms part of this Report.
DIRECTORS
The Companies Act, 2013 provides for appointment of Independent
Directors, who shall hold office for a term of upto five consecutive
years on the Board of the Company and shall be eligible for
re-appointment on passing of a special resolution by the Company.
Further, the provisions of retirement by rotation as envisaged under
Section 152 of the Companies Act,2013, shall not apply to such
Independent Directors.
Based on the recommendation of the Nomination & Remuneration Committee,
the Board of Directors at their meeting held on August 12, 2014, have
appointed Mr. D. E. Udwadia, Mr. K. S. Shah and Mr. Narayan K Seshadri,
as Independent Directors, to hold office as such, for a period of 5
years i.e., upto September 29, 2019, subject to approval by the
shareholders at the ensuing Annual General Meeting.
Pursuant to Section 152 of the Companies Act, 2013, Mr. Justin Ooi,
Director will retire by rotation at the ensuing Annual General Meeting
and being eligible, offers himself for re-appointment.
During the year, the Company received approvals from the Central
Government for the appointment of (a) Mr. Sanjay Murdeshwar as Managing
Director and (b) Mr. Rob Haxton as Whole Time Director, both being
persons not resident in India, as envisaged in Part I of Schedule XIII
to the Companies Act, 1956. Their appointments were approved by the
members at the last Annual General Meeting of the Company.
AUDITORS
The present Auditors Messrs. BSR & Co. LLP Chartered Accountants, hold
office up to the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable
guidance and strong support to the Company''s operations during the
year.
Your Directors would also like to thank the Central and the State
Governments, other Statutory and Regulatory Authorities, the Company''s
Bankers, the Medical Profession and Trade, Vendors & Business
Associates and the Members for their continued valuable support to the
Company''s operations.
Your Directors place on record their sincere appreciation of the
significant contribution made by and the continued support of the
employees at all levels to the Company''s operations during the year.
On behalf of the Board of Directors
D E UDWADIA
CHAIRMAN
Place: Bangalore
Date : August 12, 2014
Mar 31, 2013
The Directors present their 34th Annual Report together with the
Audited Accounts of the Company for the Financial Year ended March 31,
2013.
FINANCIAL RESULTS
(Rs. in Million)
Particulars 2012-13 2011-12
Sales and Other Income 4,009 5,379
Profit/(Loss) Before Tax (703) 293
Provision for Taxation
- Income Tax 15 197
- Adjustment for Deferred Tax 178 (102)
Total Tax 193 95
Profit/(Loss) after Taxation (895) 198
Surplus brought forward from
the previous year 1,312 1,235
Total amount available for
appropriation 416 1,433
Appropriation made by Directors
Transfer to General Reserve - 19
Appropriation recommended by
Directors
Dividend - 88
Tax on proposed Dividend - 14
Surplus carried over 416 1,312
DIVIDEND
The Company has incurred a Net Loss after Tax of Rs. 895 Million during
the Financial Year 2012-13, consequent to significantly lower sales.
Considering the Company''s overall financial position, the Directors
regret they are unable to recommend a dividend for the year 2012-13.
Net worth
SALES AND MARKETING
In the last Directors'' Report, Members were informed that the Company
had, as a measure of extra and abundant caution, undertaken a voluntary
recall of sterile products manufactured at its Bengaluru plant
following AstraZeneca Worldwide Audit Group''s quality audit. During the
year, the Company had to undertake voluntary recall of two more
products - Actamase and Pulmicort. As a precautionary measure, the
Company had also voluntarily suspended production temporarily to review
manufacturing practices at the plant resulting in a temporary
disruption of supplies.
The Company, during the year, undertook a comprehensive review of its
factory operations and that of its contract manufacturers. As a
consequence of this review, a significant part of the Company''s
portfolio, including several of its major brands, namely, Imdur
(Cardiovascular), Betaloc (Cardiovascular), Ramace (Cardiovascular),
Xylocaine (Local Anesthesia), Sensorcaine (Local Anesthesia), Linctus
Codeinae (Respiratory), were not available in the market (Impacted
Products*) during a substantial part of the year.
In the above circumstances, the Company registered sales of Rs. 3,557
Million (including exports) in the Financial Year ended March 31, 2013,
a steep decline of 28.8% from the previous year ended March 31, 2012.
Having completed the review of the Company''s factory operations and
that of its contract manufacturers, a majority of the impacted products
have already been reintroduced in to the market in a phased manner. The
Company''s effort is focused on regaining its lost market position by
increasing the supply of these products to meet the market demand. The
Company has discontinued a few impacted products on account of
portfolio rationalization and in some cases inability to find local
supplier for these products. These products contributed about 8 to 10%
of its sales turnover in the Financial Year 2011-12.
With the impacted products being reintroduced in to the market, the
sales turnover for the fourth quarter of the Financial Year 2012-13 has
registered a growth of 2.8% as against the successive decline in sales
turnover across the three previous quarters during the year. With
strong and concerted efforts being made to regain the lost market
position for these products, the Company expects to resume its growth
path during the Financial Year 2013-14.
In the last Directors'' Report, Members were informed that the Company
had obtained marketing approval from the Drugs Controller General of
India (DCGI) for its new patented antiplatelet drug -
BRILINTA®(Ticagrelor). Your Directors are glad to inform that the
Company launched BRILINTA in India in September 2012. BRILINTA is an
oral antiplatelet treatment for Acute Coronary Syndrome (ACS) in adult
patients. BRILINTA provides cardiologists with a new and effective
treatment to help reduce the rate of heart attack and cardiovascular
deaths in these patients. Since its launch in September 2012, the brand
has been progressing satisfactorily. As per IMS Health data, the brand
has broken into top 10 brands in the oral antiplatelets segment in the
Indian market, within 6 months of its launch - an achievement which has
already placed the brand amongst some of the best patented launches in
the Indian market.
The National Pharmaceutical Pricing Policy 2012 announced by the
Government in December 2012 had brought 348 medicines covered in the
National List of Essential Medicines (NLEM), under price control. Based
on this policy, Drug Pricing Control Order 2013 was notified in May
2013. On 14th June 2013, the ceiling prices of 151 formulations were
notified.
While the said Policy will benefit the patients by making essential
drugs affordable, it is likely to have an adverse impact on the
profitability of pharmaceutical companies including the Company in the
near to medium term. The Company is closely monitoring the developments
and evaluating the impact of the ceiling prices, on its portfolio.
MANUFACTURING
During the year, the Company undertook a comprehensive review of its
entire manufacturing facility in the wake of the concerns that had
emerged during the last quarter of the Financial Year 2011-12. In its
efforts to review the processes and remediate the concerns, the Company
has received strong and invaluable support from the AstraZeneca Group
in terms of expertise and best practices in manufacturing, including
support for resuming production post remediation, and outsourcing
manufacture of certain products.
The Directors are pleased to inform you that remediation has been
completed and majority of the impacted products have been reintroduced
in to the market. Further, the manufacture of sterile products, liquid
orals and semisolids has been successfully outsourced to select
contract manufacturers in India through technology transfer.
The remediation measures have delivered significant improvements to
Quality Management System and Quality Capabilities, such as Good
Manufacturing Practices (GMP), root cause analysis and shop floor
Quality Assurance controls. Resultantly, GMP metrics tracked by the
Company have also shown significant improvements.
The Directors are also pleased to inform the members that the New
Tablet Manufacturing Facility and New Quality Control Laboratory
received the approval of the Drug Controller of Karnataka in May 2013.
With this approval to operate, the Company expects to get the New
Tablet Manufacturing Facility operational by end of first quarter of
Financial Year 2013-14. This will provide a platform for ensuring
consistent supply of global quality medicines.
In its pursuit for continuous improvement, a Site Compliance
Improvement Plan for the Financial Year 2013-2014 has been prepared, in
line with AstraZeneca Global Standards. The Plan will address 12 core
areas of Quality. The Company is taking support from the AstraZeneca
Group and its Global resources have been deployed on site in Quality
Assurance, Manufacturing, Human Resources and other support functions
to actively support and strengthen the factory site capabilities.
These resources have been carefully selected based on their proven
track record of performance and capabilities.
The Company has, in pursuance of its objective of driving a stringent
compliance culture, undertaken new initiatives including electronic
laboratory management systems. These initiatives will enhance
visibility, vigilance over processes and effective compliance to
sustain the improvements.
Mr. Robert Ian Haxton, having over 20 years of diverse experience in
the Pharmaceutical Industry working across various roles and regions
within the AstraZeneca Group, joined the Company as Vice President -
India Operations and Whole Time Director in February 2013. The
Directors are confident that Mr. Robert Ian Haxton, with his diverse
experience and creditable track record, with support of his team at the
manufacturing facility, will ensure continuous improvement enabling a
stable base for supply of high quality products.
VOLUNTARY NON-REPAYABLE FINANCIAL GRANT BY ASTRAZENECA PHARMACEUTICALS
AB, SWEDEN
In order to assist the Company in its efforts to establish/grow its
presence in the Indian market despite the significant losses incurred,
AstraZeneca Pharmaceuticals AB Sweden, the promoter of the Company, has
agreed to provide a voluntary non repayable financial grant of
approximately USD 22.5million (~ Rs. 1192* million) to USD 26.5million
(~ Rs. 1404*million) over the three years period Financial Year 2013-14
to Financial Year 2015-16 under a Subvention Agreement dated May 7,
2013. The first tranche of USD 14 million (~ Rs. 740* million) has
been agreed to be provided to the Company during the Financial Year
2013-14.
*Exchange rate 1 USD = Rs. 53
SAFETY HEALTH AND ENVIRONMENT (SHE)
Providing a safe workplace, and promoting the health and wellbeing of
all its people remains a core consideration for the Company. A new
initiative called "Well Women" was launched this year to bring
focus on personal safety of women employees. Women employees were
provided with a basic personal protection kit. During the period under
review, the Company''s field force was trained in defensive driving
techniques which resulted in a decreased number of road accidents.
Regular initiatives like Annual Health Check-up, ''Hypertension
Awareness'' and ''Diabetes Awareness'' continued during the year to
encourage the Company''s employees to adopt healthy and productive
lifestyle practices.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
During the year, the Company enjoyed good industrial relations and
cooperation with its unionised staff. There have been trainings and
assessments conducted at the factory to prepare the workmen for meeting
required standards for deployment at the New Tablet Production
Facility.
Retaining and developing talent during a period when the Company''s
sales declined and sustaining employee morale was a priority. The
increased focus on employee engagement through improved communication
and building accountability at all levels had a positive impact on
talent management. This was reflected in the lower attrition levels
vis-a- vis the industry. The employee strength as on March 31, 2013 was
1588.
FACTORY LAND AT YELAHANKA
In the last Directors'' Report, the members were informed that the
National Highways Authorities of India (NHAI) had acquired a portion of
the factory land at Yelahanka for expansion of the Hyderabad- Bengaluru
Highway. Pursuant to the Writ Petition filed by the Company, the
Karnataka High Court had directed NHAI to pay as per the original award
to the Company upon it furnishing a Bank Guarantee. The final amount
determined to be payable for the Company''s portion of land is Rs. 13.7
million. The Company has submitted a Bank Guarantee to NHAI as per the
Court''s direction and is awaiting release of the compensation amount.
NHAI has, in meantime, filed a review petition before the Karnataka
High Court, stating that, while the High Court in its judgment was
pleased to reserve liberty to NHAI to raise arbitration proceedings but
due to inadvertence, the operative portion of the Court''s Order did not
mention the same. The Petition is pending before the Court. NHAI has
also initiated arbitration proceedings before the Arbitrator at
Bangalore.
In 2011, NHAI had acquired a further portion of the factory land at
Yelahanka for expansion of the Hyderabad-Bengaluru Highway. The Special
Land Acquisition Officer, (SLAO) had awarded compensation @ Rs. 1,314/-
per square feet for the said land. The Company, notwithstanding
continuous follow-up, has not received the said compensation @ Rs.
1,314/- psf. The Company has filed a Writ Petition before the Karnataka
High Court seeking early release of compensation by NHAI.
OTHER MATTERS
In December 2012, the Company received a notice from Bruhat Bangalore
Mahanagar Palike (BBMP) demanding from the Company improvement charges
amounting to Rs. 15,58,04,930/-. The Company filed a Writ Petition
before the Karnataka High Court challenging the said demand notice from
BBMP. The Court has granted interim stay against the notice issued by
BBMP.
In the last Directors Report, the members were informed that a First
Information Report was filed in February 2012 by the Central Bureau of
Investigation against, among others, the Company wherein it is alleged
that the Company submitted a false affidavit with respect to rates
quoted by the Company to the Directorate of Health Services, Delhi
(DHS). It is further alleged that unknown officers of DHS and unknown
officials of the Company and other private persons conspired to cancel
the recovery proceedings by DHS. The investigation is ongoing. The
Company continues to fully cooperate with the investigation.
OFFER FOR SALE OF SHARES BY ASTRAZENECA PHARMACEUTICALS AB, SWEDEN
To comply with the mandatory requirement of minimum public shareholding
in a public listed company, as specified in Securities Contracts
(Regulation) Rules, 1957, AstraZeneca Pharmaceuticals AB Sweden, the
Company''s promoter, reduced its shareholding in the Company from 89.99%
to 75% by selling 37,49,950 equity shares of the Company through
''Offer For Sale'' mechanism in May 2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act), the
Board of Directors states that-
(A) in the preparation of the Company''s Annual Accounts, the applicable
accounting standards have been followed and proper explanations have
been provided for material departures, wherever applicable,
(B) it has selected such accounting policies which have been 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 the end of the year March 31, 2013 and of the loss of
the Company for that period,
(C) it has 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, and
(D) the financial statements have been prepared on a going concern
basis.
BOARD''S RESPONSE TO AUDIT OBSERVATIONS
The observations made by the Auditors under paras (x) and (xvii) of the
Annexure to the Auditors'' Report relating to cash loss in the financial
year and of using short term funds for long term investments in fixed
assets respectively are self explanatory. The management has initiated
and is vigorously pursuing plans and actions to drive the Company back
to profitability. These measures would help the Company in stabilizing
its fund position during the Financial Year 2013-14.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
Information required under Section 217(1)(e) of the Act, read with the
Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, is given in Annexure-I and forms part of this
Report.
Information required under Section 217 (2A) of the Act, read with the
Companies (Particulars of Employees) Rules, 1975, forms part of this
Report. However, as per the provisions of Section 219(1) (b)(iv) of
the Act, the Report and the Accounts are being sent to all Members,
excluding the Statement of Particulars under Section 217(2A). Any
Member, desirous of obtaining a copy of this Statement, may kindly
write to the Company Secretary.
CORPORATE SOCIAL RESPONSIBILITY
Young Health Programme
The Company introduced AstraZeneca''s signature global initiative the
Young Health Programme (YHP) in Financial Year 2010-11, designed to
help marginalized young people deal with health problems they face,
enabling them to live a better life. The programme has made significant
progress since then. The YHP India has directly been able to reach out
to 65,250 young people, and has influenced 60,988 wider community
members, including health professionals, educators and policy makers,
through its around 1400 peer educators. This is more than twice the
target set out for the three year programme.
CORPORATE GOVERNANCE REPORT
The Company has taken steps to ensure that all mandatory provisions of
Corporate Governance as prescribed by the Listing Agreement of the
Stock Exchanges, on which the Company shares are listed, have been
complied with.
The Management Discussion and Analysis is attached as Annexure-II and
forms part of this Report.
A Report on Corporate Governance, along with a certificate from the
Statutory Auditors confirming compliance, is annexed as Annexure-III
and forms part of this Report.
REMUNERATION COMMITTEE OF THE BOARD
In view of the absence of profits in the Financial Year ended March 31,
2013, the Remuneration Committee of the Board, comprising four
directors including three independent directors, was constituted by the
Board at its meeting held on February 6, 2013 pursuant to the
requirements of sub-para (C) of Section II of Part II of Schedule XIII
to the Companies Act, 1956, to consider and approve the remuneration
paid to Mr. Anandh Balasundaram in respect of the period April 1, 2012
to August 31, 2012 (when he ceased to be the Managing Director), to Ms.
Ruby Lau in respect of the period April 1, 2012 to February 27, 2013
(when she ceased to be a Whole Time Director), and to Mr. Robert Ian
Haxton and Mr. Sanjay Murdeshwar, respectively.
DIRECTORS
In accordance with the provisions of the Act and the Company''s Articles
of Association, Mr. Ian Brimicombe, Director will retire by rotation at
the ensuing Annual General Meeting and being eligible, offers himself
for re-appointment.
Mr. Anandh Balasundaram ceased to be the Managing Director of the
Company effective August 31, 2012. Ms. Ruby Lau ceased to be a Whole
Time Director of the Company effective February 27, 2013.
Mr. Narayan K Seshadri was appointed on the Board as an additional
director on December 6, 2012. He will hold office up to the date of the
ensuing Annual General Meeting and being eligible offers himself for
appointment as a Director. Mr. Justin Ooi joined the Board as Non
Executive Director effective May 2, 2013, in the casual vacancy caused
by the resignation of Mr. Luigi Felice La Corte from the Board.
Mr. Robert Ian Haxton was appointed by the Board as an additional
director and as Whole Time Director of the Company with effect from
February 6, 2013, subject to requisite approvals of the Members and
also of the Central Government since he is not a person resident in
India as envisaged in Part I of Schedule XIII to the Act. He holds
office as an additional director up to the date of the ensuing Annual
General Meeting and being eligible offers himself for appointment as a
Director.
Mr. Sanjay Murdeshwar was appointed by the Board as an Additional
Director and as Managing Director of the Company with effect from May
2, 2013, subject to requisite approvals of the Members and also the
Central Government since he is not a person resident in India as
envisaged in Part I of Schedule XIII to the Act. He holds office as an
Additional Director up to the date of the ensuing Annual General
Meeting and being eligible offers himself for appointment as a
Director.
AUDITORS
The present Auditors Messrs. BSR & Co., Chartered Accountants, hold
office up to the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable
guidance and strong support to the Company''s operations in the
extremely challenging times encountered during the year.
Your Directors thank the Central and the State Governments, various
other Statutory and Regulatory Authorities, the Company''s Bankers, the
Medical Profession and Trade, Vendors & Business Associates and the
Members for their understanding and continued valuable support to the
Company''s operations.
Your Directors place on record their sincere appreciation of the
significant contribution made, and the continued support extended, by
the employees at all levels to the Company''s operations during the
period under review.
On behalf of the Board of Directors
Place: Bengaluru D E UDWADIA
Date: 24 June 2013 CHAIRMAN
Mar 31, 2012
Dear Members,
The Directors present their 33rd Annual Report together with the
Audited Accounts of the Company for the financial year ended March 31,
2012.
Financial Results
(Rs. in Mio)
Particulars 2011-12 2010-11
(12 months) (15 months)*
Sales and Other Income 5379 6003
Proft Before Tax 293 1010
Provision for Taxation
- Income Tax 197 415
- Adjustment for Deferred Tax (102) (46)
Total Tax 95 369
Proft after Taxation 198 641
Surplus brought forward from
the previous year 1235 948
Total amount available for
appropriation 1433 1589
Appropriation made
by Directors
Transfer to General Reserve 19 64
Appropriation recommended by Directors
Dividend 88 250
Tax on proposed Dividend 14 40
Surplus carried over 1312 1235
*Previous accounting period was for 15 months from January 2010 to
March 2011.
Dividend
The Directors recommend a dividend payment of 175% (Rs. 3.50 per equity
share of Rs. 2/- each), which, if approved by the members at the Annual
General Meeting will involve an outfow of Rs. 88 Mio towards dividend and
Rs. 14 Mio as Dividend Distribution Tax resulting in a total outfow of Rs.
102 Mio. This amounts to a distribution of 51% of the net profits of the
Company for the financial year 2011-12.
Sales and Marketing
The Company registered sales of Rs. 4653 Mio (excluding export sales) in
the financial year ended March 31, 2012, clocking a growth of 4% over
the corresponding 12 months period ended March 31, 2011.
In the last quarter of 2011-12, the Company's sales declined by 29%
over the same quarter of the previous financial year. The sales for the
quarter and the financial year ended March 31, 2012 were impacted by the
following:
A) As a measure of extra and abundant caution, the Company undertook a
voluntary recall of sterile products manufactured at its Bengaluru
plant of a value of Rs. 26.8 million, following AstraZeneca Worldwide
Audit Group's (WWAG) quality audit. As a precautionary measure, the
Company also voluntarily suspended production temporarily to review
manufacturing practices at the plant resulting in a temporary
interruption of supplies. The net sales of the products affected by
supply constraint amounted to Rs. 272 million in the last quarter ended
March 31, 2012 as against Rs. 606.8 million in the quarter ended December
31, 2011.
B) Provision for potential prior period charge back amounting to Rs. 143
million (quarter ended March 31, 2011: Rs. Nil, Period ended March 31,
2011: Rs. Nil) from customers.
However, sales during the frst three quarters of 2011-12 registered a
growth of 15% over the same period in the previous year.
Sales Performance à Excluding Exports (Rs. Mio)
The Company's key growth brands à Crestor, Seloken XL, Selomax,
Actamase, Meronem and Neksium à witnessed robust growth, providing
strong momentum to the Company's performance throughout the year.
Branded Generics products launched over the last three years made
significant contribution to the Company's sales and growth. Seloram,
Actamase and Enclere Forte drove the performance of the branded
generics portfolio, which grew by 38% over the corresponding 12 months
period ended March 31, 2011 and contributed 8% to the Company's total
sales. During the financial year, the Company launched Remergin
(Colistimethate sodium) and Rhinomax (montelukast sodium and
levocetirizine dihydrochloride) and one line extension in the infection
therapeutic area.
During the Financial Year 2012-13, your Company will continue to focus
on driving growth in its established key growth brands and launching
new branded generics in the market. The Company has obtained marketing
approval from the Drugs Controller General of India (DCGI) for its
patented innovator brand à Brilinta (ticagrelor). Brilinta is approved
for the prevention of cardiac events in patients with Acute Coronary
Syndrome (ACS). It is an oral anti-platelet medicine that works to
prevent platelets from sticking together and forming potentially
harmful blood clots.
Key Sales and Marketing Initiatives
Driving commercial innovation to bring value to customers in an ethical
manner is a priority for the Company. Various innovative marketing
methods have been initiated during the year to achieve this goal.
The Company's commitment to disseminate relevant and valuable inputs to
the medical fraternity was further strengthened by utilizing webcasts.
Conducting medico-marketing activities via webcasts has expanded the
Company's reach to Health Care Professionals (HCPs) dispersed across
geographies.
The Company's medical information team fulfls the information needs of
HCPs by providing them relevant scientifc and academic information.
This year the team responded to approximately 33,000 queries received
from HCPs.
The sales force has started interactive detailing of products with
iPads in certain therapeutic areas.
Commercial innovation will continue to remain a focus area for the
Company in 2012-13.
Manufacturing
The Company had to deal with some significant challenges that emerged at
its manufacturing facility in Bengaluru during the last quarter of the
financial year, as stated under the heading 'Sales and Marketing'
earlier in this Report.
The Company explored multiple options to resume quality supplies of its
sterile and other products, and has recommenced production at the
existing manufacturing facility in a phased manner.
In the last Directors' Report, the members were informed that the
Company had invested in a new tablet manufacturing facility at its
manufacturing site in Bengaluru. The facility will be ready for
operation towards the end of the current financial year.
Safety Health and Environment (SHE)
Providing a safe workplace and promoting the health and wellbeing of
all its people remains a core consideration. During the period under
review, the Company's feld force was trained in safe driving techniques
as part of a larger 'Drive Success' programme. Accidents impacting the
Company's employees have decreased as a result. To improve health
awareness among the sales force and corporate offce staff various
initiatives like Annual Health Check-up, Hypertension Awareness, and
Enrich (smoking cessation) were launched during the year.
Human Resources and Employee Relations
Attracting, retaining and developing talent continued to be a focus
area for the Company. The increased focus on capability enhancement and
employee engagement had a positive impact on talent retention as
refected in the lower attrition levels vis- ÃÂ -vis the industry. Other
important developments included the launch of AZ Engage, a global
employee management system. Your Company's employee strength as of
March 31, 2012 was 1674.
During the period under review, the Company announced a Voluntary
Retirement Scheme (VRS) for permanent workmen at the Company's
manufacturing facility in Bengaluru. This is in line with the Company's
long term strategy for the facility. Seventy workmen have opted for
retirement under this scheme.
Factory Land at Yelahanka
In the last Directors' Report the members were informed that the
National Highways Authorities of India (NHAI) had acquired a portion of
the factory land at Yelahanka for expansion of the Hyderabad Ã
Bengaluru Highway. The Special Land Acquisition Offcer (SLAO) had
awarded compensation of Rs. 23,709,554/- for the said acquisition. The
SLAO reduced the above amount of compensation awarded to Rs. 4,98,879/-,
on the basis of a direction received from the Government of Karnataka.
The Company did not accept the amended award and has disputed the same.
The Company invoked the arbitration provisions under the National
Highway Act, 1956 and fled a Writ Petition challenging the above
direction given by the Government of Karnataka and for directing the
SLAO to pay compensation as per the original amount awarded.
The said Writ Petition fled by the Company was allowed by the Karnataka
High Court. The modifed order of SLAO was quashed. The High Court
further directed NHAI to pay the original award amount of Rs. 2.37 Crores
to the Company upon it furnishing a Bank guarantee. NHAI has fled a
review petition before the Karnataka High Court stating that while the
High Court in its judgment was pleased to reserve liberty to NHAI to
raise arbitration proceedings but due to inadvertence, the operative
portion of the order did not mention the same. The Company's Counsel
has fled a vakalatnama in the Court.
NHAI has acquired a further portion of the factory land at Yelahanka
for expansion of the Hyderabadà Bengaluru Highway. The SLAO has vide
his Award dated May 24, 2011 awarded compensation @ Rs. 1,314/- per
square feet for the said land. The Company has sought from SLAO details
of exact measurement of the said portion of the land, which is yet to
be received. The Company is also reviewing the adequacy of the amount
of compensation awarded by SLAO and will take appropriate action, if
required, seeking enhancement of the said compensation.
Other Matters
On October 20, 2011, the Company received a notice from Bruhat
Bangalore Mahanagar Palike (BBMP) asking the Company to stop the
construction of the Tablet Production Facility. The Company fled a Writ
Petition before the Karnataka High Court challenging the notice from
BBMP and the Court granted stay against the notice issued by BBMP.
A First Information Report was fled on February 23, 2012 by the Central
Bureau of Investigation against, among others, the Company wherein it
has been alleged that the Company submitted a false affdavit with
respect to rates quoted by the Company to the institution (Directorate
of Health Services, Delhi). It is further alleged that unknown offcers
of the Directorate of Health Services, Delhi (DHS) and unknown offcials
of the Company conspired to cancel the recovery proceedings by DHS. The
Company is fully cooperating with the ongoing investigations.
Open Public Offers made by Astra Pharmaceuticals AB, Sweden to the
Shareholders of the Company
Members have been advised in previous Directors' Reports of the Writ
Petition fled by the under mentioned shareholder challenging the First
Open Public Offer made pursuant to the Letter of Offer dated May 11,
2002, by Astra Pharmaceuticals AB, Sweden (APAB). The status of the
same as of March 31, 2012 continues to remain unchanged, in that the
Writ Petition fled by Ms. Annie Koshy in the Kerala High Court, Kochi,
is still pending before the Court.
Directors' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act), the
Board of Directors states that- (A) in the preparation of the Company's
Annual Accounts, the applicable accounting standards have been followed
and proper explanations have been provided for material departures,
wherever applicable,
(B) it has selected such accounting policies which have been 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 the end of the year March 31, 2012 and of the proft
of the Company for that period,
(C) it has taken proper and suffcient 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, and
(D) the financial statements have been prepared on a going concern
basis.
Board's Response to Audit Observations
The observation made by the Auditors under para (xxi) of the annexure
to the Auditors' Report is self explanatory. The management is
undertaking a comprehensive review of the existing Institutional
Business Processes and Internal Control systems and is strengthening
them to prevent the occurrence of such incidents in future.
Information Pursuant to Section 217 of the Companies Act, 1956
Information required under Section 217-(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988, is given in Annexure - I and
forms part of this Report.
Information required under Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975, forms
part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts
are being sent to all shareholders, excluding the Statement of
Particulars under Section 217(2A). Any shareholder, desirous of
obtaining a copy of this Statement, may kindly write to the Company
Secretary.
Corporate Social Responsibility
Young Health Programme
Your Company has introduced AstraZeneca's signature global initiative
the Young Health Programme designed to help marginalized young people
deal with the health problems they face and improve their chances of
living a better life. The aim of this program is to improve the health
of adolescents by empowering them with necessary information, skills
and access to services. In partnership with a NGO, the program is
targeting people between the age of 14 and 24 years, their families and
communities across the fve resettlement areas in New Delhi à Dwarka,
Holambi Kalan, Mangolpuri, Badarpur and Madanpur Khadar.
In India, the adolescent population constitutes more than one ffth
(23%) of the total population. Key issues for adolescent health in
urban slum areas include malnutrition; hygiene and sanitation;
infections such as TB and malaria; substance abuse; anaemia in girls;
unwanted pregnancy; illegal and unsafe abortion and sexually
transmitted diseases. The Young Health Programme in India is
addressing these key issues. Some activities that the Company has
undertaken in these areas include providing schools with low cost
sanitary kits, establishing and creating referral services to Health
Information Centres, arranging thematic camps and fairs, and addressing
adolescent health issues.
Other Activities
The Company continues to support community activities focused on making
the Katigenahalli Primary School, Yelahanka - Bengaluru, as a more
conducive place to enable study by needy children.
Corporate Governance Report
The Company has taken steps to ensure that all mandatory provisions of
Corporate Governance as prescribed by the Listing Agreement of the
Stock Exchanges on which the Company shares are listed, have been
complied with.
The Management Discussion and Analysis is attached as Annexure-II and
forms part of this Report.
A Report on Corporate Governance, along with a certifcate from the
Statutory Auditors confrming compliance, is annexed as Annexure-III and
forms part of this Report.
Directors
In accordance with the applicable provisions of the Companies Act 1956
and the Company's Articles of Association, Mr. K. S. Shah and Mr. Luigi
Felice La Corte, Directors will retire by rotation at the ensuing
Annual General Meeting. Being eligible, they offer themselves for
re-appointment. Your Board of Directors recommends their
re-appointment. Ms. Ruby Lau, Vice President à Operations, was
inducted on the Board and appointed as Whole Time Director with effect
from November 10, 2011, subject to requisite approvals of the
shareholders and the Central Government.
Auditors
The present Auditors Messrs. BSR & Co., Chartered Accountants, hold
offce up to the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their valuable
guidance and support to the Company's operations.
Your Directors thank the Central and the State Governments, various
other Statutory and Regulatory Authorities, the Company's Bankers, the
Medical Profession and Trade, Vendors & Business Associates and the
Shareholders for their continued interest in, and valued support to,
the Company's operations.
Your Directors place on record their sincere appreciation of the
significant contribution made, and the continued support extended, by
the employees at all levels to the Company's operations during the
period under review.
On behalf of the Board of Directors
D E UDWADIA
CHAIRMAN
Place: Bangalore
Date: May 11, 2012
Mar 31, 2011
The Directors have pleasure in presenting their 32nd Annual Report
together with the Audited Accounts of the Company for the 15 Months
period ended March 31, 2011.
Financial Results
(Rs. in Mio)
Particulars 2010-11 2009
(15 months)*
Sales and Other Income 6003 4024
Profit Before Tax 1010 884
Provision for Taxation
-Income Tax 415 310
- Adjustment for Deferred Tax (46) (6)
- Fringe Benefit Tax 369 3 307
Profit after Taxation 641 577
Surplus brought forward from the
previous year 948 409
Total amount available for
appropriation 1589 986
Appropriation made by Directors
Transfer to General Reserve 64 58
Transfer from Debenture Redemption Reserve _ (312)
Appropriation recommended by Directors
Dividend 250 250
Tax on proposed Dividend 40 42
Surplus carried over 1235 948
Consequent to the change in the Accounting year of the Company from
January-December to April-March, the last accounting period was for
a period of 15 months.
Dividend
The Directors are pleased to recommend payment of a Dividend of 500%
(Rs.10/- per Equity share of the face value of Rs.2/- each), which, if
approved by Members at the Annual General Meeting will involve an
outflow of Rs.250 Mio towards Dividend and ^40
Mio as Dividend Distribution Tax resulting in a total outflow of Rs.290
Mio representing distribution of 45% of the net profits of the Company
for the year.
Sales and Marketing
"he Company registered sales of Rs.5339.2 Mio (excluding export sales) in
the 15 months period ended March 31, 2011.
The Company grew by 14% during the calendar year 2010 (Jan - Dec 2010).
However, in Quarter 1 of 2011 (Jan - Mar 2011) the Company grew by 35%
over same period last year.
The growth during the period under review, was broad based with all the
therapy areas registering good growths.
The Company has a strong portfolio of established and originator brands
well complemented with the launch of branded generics products in 2009
and 2010. Our power brands - Crestor, Seloken, Selomax, Meronem,
Neksium and Linctus Codeinae witnessed robust growth and provided
strong momentum to the Companys performance. The AstraZeneca original
research brand, Crestor (Rosuvastatin) launched in 2009 (in
Cardiovascular Therapeutic Area) was a huge success and achieved over
Rs.100 Million sales in the first 9 months of 2010.
Branded Generics products launched in 2009 and 2010 made significant
contribution to the Companys sales and growth. Seloram and Actamase
recorded strong growth and are the leading brands in their respective
categories. The Company launched
6 new products - Olways and Valfect in the Cardiovascular therapy area,
Diprivan, Naropin and Enclere in the Infection therapy area and
Bricacef in the Respiratory therapy area.
During the Financial Year 2011-12, your Company will focus on driving
growth in its established power brands along with launch of new branded
generics products in its key therapy areas. In the coming years, the
Companys product portfolio and performance will be further
strengthened by the launch of AZ patented innovator products.
Sales Force Effectiveness (SFE)
SFE team partnered with business units (BU) in aiding the Companys
performance by driving new sales training initiatives & embedding SFE
metrics across a newly recruited field Force.
A large scale segmentation & targeting (S&T) exercise was planned and
executed to assist the primary care BU expand their reach and customer
coverage. Restructuring the speciality care (SC) team into sub-teams
and driving a new S&T strategy for Cardiovascular (CV) team helped
drive business efficiencies.
By imparting cutting edge training to our field force has enhanced the
usage of our e-learning platform AZLEARN and also improved the
efficiency in reporting and communication. To manage the challenge of
selling many brands together with the new launches, enhanced selling
skill models like Multi Product Selling (MPS) were introduced.
Medical, Regulatory and Clinical Trials
During the period under review, medical and regulatory support was
provided for the launch of several new products.
The Regulatory team ensured early registration of new products and also
obtained additional indication approvals and product registration
renewals in time.
Strategic medico-marketing initiatives such as setting up and
conducting of Advisory Board meetings, Web casts, scientific meetings
and symposium in order to disseminate scientific knowledge to the
medical fraternity were undertaken. Pharmacovigilance workshops were
conducted across the country with a view to increasing the awareness on
adverse event reporting amongst the healthcare professionals.
Your company saw increased participation in, and contribution to,
pivotal global clinical trials as per Good Clinical Practice (GCP)
norms for AstraZeneca pipeline and approved products in the therapy
areas of Respiratory, Oncology, Cardiovascular and Diabetes in
accordance with local and global standards.
Manufacturing
The Companys Operation team supported the launch of new products
during the year. Productivity continues to improve both in terms of
value & volume at its manufacturing plant.
The Company also continued with its initiatives towards better-cost
management through purchasing efficiency, improved Overall Equipment
Effectiveness and pack rationalizations. Product pack security features
were introduced as an anti- counterfeit measure for the products
manufactured at the plant.
The manufacturing plant successfully underwent AstraZenecas global
current Good Manufacturing Practices (cGMP) audit. Further the plant
received AstraZenecas regional and global recognition for its
operational excellence.
The new tablet manufacturing facility involving an outlay of Rs.700 Mio,
is expected to be completed by end of this year as per schedule- Safety
Health and Environment (SHE)
During the period under review the Companys manufacturing site was
re-certified for Occupational Health Safety Assessment Series (OHSAS)
18001 for health and safety and ISO 14001 for the environment by M/s
Germanischer Lloyd, Germany. The site achieved 2 million accident free
man hours during the period under review.
Highest safety standards are being observed at the construction site
for the new Tablet manufacturing facility.
All suppliers of formulations and Active Pharmaceutical Ingredients
(APIs) are regularly evaluated on AstraZenecas global quality and
safety standards.
Human Resources and Employee Relations
Attracting, retaining and developing talent continued to be a focus
area for the Company. The increased focus on capability enhancement and
employee engagement had a positive impact on talent retention as
reflected in the lower attrition levels. The Company has a total
employee strength of 1705.
A settlement with field union was signed on February 4, 2011, for three
years effective January 1, 2010. Employee Relations continued to be
cordial at all levels.
Factory Land at Yelahanka
In the last Directors Report members were informed that the National
Highways Authorities of India (NHAI) had acquired a portion of the
factory land at Yelahanka for expansion of the Hyderabad - Bangalore
Highway. The Special Land Acquisition Officer (SLAO) had awarded
compensation of Rs.23,709,554/- for the said acquisition. The SLAO
reduced the above amount of compensation awarded to Rs.4,98,879/-, on the
basis of a direction received from the Government of Karnataka. The
Company has not accepted the amended award and has disputed the same.
The Company has invoked the arbitration provisions under the National
Highways Act, 1956. The Company has further filed a Writ Petition
challenging the above direction given by the Government of Karnataka
and for directing the SLAO to pay compensation as per the original
amount awarded.
The Writ Petition filed by the Company is part heard before the Honble
High Court of Karnataka.
In this connection reference may be made to note No.2 in Schedule 17 of
the Accounts for the 15 months period under review.
Open Public Offers made by Astra Pharmaceuticals AB, Sweden to the
Shareholders of the Company Members have been advised of the Writ
Petitions filed by the under mentioned shareholder challenging the
First Open Public Offer made pursuant to the Letter of Offer dated May
11, 2002, by Astra Pharmaceuticals AB, Sweden (APAB). The status of the
same as of March 31, 2011 continues to remain unchanged, in that the
suit filed by Ms. Annie Koshy in the Kerala High Court, Kochi, is
still pending hearing before the Court.
Directors Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act), the
Board of Directors states that- (A) In the preparation of the Companys
Annual Accounts, the applicable accounting standards have been followed
and proper explanations have been provided for material departures,
wherever applicable, (B) It has selected such accounting policies which
have been 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 the end of the 15 Months period
ended March 31, 2011 and of the profit of the Company for that period,
(C) It has 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, and (D) The financial
statements have been prepared on a going concern basis.
Boards Response to Audit Observations
The observation made by the Auditors under para (xxi) of the annexure
to the Auditors Report is self explanatory. The management has since
then strengthened the controls to prevent the occurance of such
incidents in future.
Information Pursuant to Section 217 of the Companies Act, 1956
Information required under Section 217 (1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988, is given in Annexure-I and
forms part of this Report.
Information required under Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of the Employees) Rules, 1975,
forms part of this Report. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts
are being sent to all shareholders, excluding the Statement of
Particulars under Section 217(2A). Any shareholder, desirous of
obtaining a copy of this Statement, may kindly write to the Company
Secretary.
Corporate Social Responsibility
Your Company continues to contribute meaningfully to local communities
through charitable donations, sponsorships and other initiatives that
help make a difference to peoples lives.
The Company continued its community activities focused on making the
Katigenahalli Primary School, Yelahanka, a better place to study for
the children. Your Company also continues to contribute to the monthly
operating cost of the emergency ambulance service Operation
Sanjeevini run by the Comprehensive Trauma Care Consortium, Bangalore.
Your Company, with a view to address the need for adolescent healthcare
amongst the urban poor, embarked on a 3 year program in partnership
with PLAN India (a multinational NGO) to improve the health of
adolescents in five disadvantaged communities of Delhi. The program
will reach around 31,000 households and indirectly influence an
estimated population of 190,000, including policy makers, educators,
and health professionals in the communities in which these young people
live. This program aims at dissemination of information on healthcare,
hygiene and sanitation to create awareness amongst adolescents.
Corporate Governance Report
The Company has taken steps to ensure that all mandatory provisions of
Corporate Governance as prescribed by the Listing Agreement of the
Stock Exchanges on which the Company shares are listed, have been
complied with.
The Management Discussion and Analysis is attached as Annexure-ll and
forms part of this Report.
A Report on Corporate Governance forming part of the Directors Report,
along with a certificate from the Statutory Auditors confirming
compliance, is annexed as Annexure-lll and forms part of this Report.
Directors
Mr. Francis McNamara III resigned as Director with effect from
September 30, 2010. The Board places on record its appreciation of the
services rendered and contribution made by Mr. Francis McNamara III to
the Company, during his tenure as a Director.
In accordance with the provisions of the Companies Act 1956 and the
Companys Articles of Association,
Mr. D. E. Udwadia & Mr. Ian Brimicombe, Directors will retire by
rotation at the ensuing Annual General Meeting. Being eligible, they
offer themselves for re- election. Your Board of Directors has
recommended their re-election.
Auditors
The present Auditors M/s. BSR & Co., Chartered Accountants, retire at
the ensuing Annual General Meeting. However, being eligible, they offer
themselves for re-appointment.
Acknowledgements
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their continued
support to the Companys operations.
Your Directors thank the Central and the State Governments, various
other Statutory and Regulatory Authorities, the Companys Bankers, the
Medical Profession and Trade, Vendors & Business Associates and the
Shareholders for their continued interest in, and valued support to the
Companys operations.
Your Directors place on record their sincere appreciation of the
significant contribution made and the continued support extended, by
the employees at all levels to the Companys operations during the
period under review.
On behalf of the Board of Directors
D E UDWADIA
Chairman
Place: Bangalore
Date: May 13, 2011
Dec 31, 2009
The Directors have pleasure in presenting their 31st Report together
with the Audited Accounts of the Company for the year ended December
31, 2009.
FINANCIAL RESULTS
Particulars 2009 2008
Sales and Other Income 4024 3681
Profit Before Tax 884 1144
Provision for Taxation
- Income Tax 310 395
- Adjustment for Deferred Tax (6) (6)
- Fringe Benefit Tax 4 308 17 406
Profit after Taxation 576 738
Surplus brought forward from
the previous year 409 496
Total amount available for
appropriation 985 1234
Appropriation made by Directors
Transfer to General Reserve 57 74
Transfer to Debenture Redemption Reserve - 312
Transfer from Debenture
Redemption Reserve (312) -
Appropriation recommended
by Directors
Dividend 250 375
Tax on proposed Dividend 42 64
Surplus carried over 948 409
Members are informed that at the Board meeting held on February 23,
2010, the Board approved the change in the accounting year of the
Company from ÃJanuary-Decemberà to ÃApril-Marchà and consequently, the
accounting period would be a 15 months period i.e. from ÃJanuary 2010
to March 2011Ã.
DIVIDEND
The Directors are pleased to recommend payment of a Dividend of 500%
(Rs.10/- per Equity Share of the face value of Rs.2/- each), which, if
approved by Members at the Annual General Meeting will involve an
outflow of Rs. 250 Mio towards Dividend and Rs. 42.49 Mio as Dividend
Distribution Tax resulting in a total outflow of Rs. 292.49 Mio.
SALES AND MARKETING
The Company registered a healthy growth of 13.5% (excluding export
sales) over the previous year with sales of Rs. 3,679 Mio (excluding
export sales).
As a part of the growth strategy, 7 new products were launched in year
2009. Your Company also launched an AstraZeneca original research
brand, viz. Crestor (Rosuvastatin) in the Cardiovascular Therapeutic
Area for Lipid Management. The new products launched under the
CompanyÃs growth strategy have contributed to the overall performance
of the Company, within six months of their respective launch.
During the year, the Cardiovascular Therapeutic Area (TA) grew by 11%.
ÃSeloken XLà and ÃSelomaxà continued to show good performance. The
launch of ÃCrestorà further boosted the performance of this TA.
Infection TA grew by 19%. Both ÃMeronemà and ÃVancocinà registered
double-digit growth and ÃMeronemà continued to be the No. 1 hospital
product.
ÃNeksiumÃ, the CompanyÃs product in the Gastrointestinal TA posted an
impressive growth of 36%, during the year.
The Local Anaesthesia TA continued to grow with both ÃXylocaineà and
ÃSensorcaineà registering steady growth.
SALES FORCE EFFECTIVENESS (SFE)
SFE played a key role in the CompanyÃs growth strategy by facilitating
deployment of Field Force and Sales Training for the new recruits.
A massive Segmentation & Targeting exercise was undertaken for
profiling the customer and key accounts. The Sales Training Team
ensured timely, quality induction training for all the new recruits.
The E-learning platform - AZLEARN- was effectively employed in the
induction training programmes, launch of new products and for
retraining the existing Field Force.
MEDICAL, REGULATORY AND CLINICAL TRIALS
During the year 2009, medical support was provided for the launch of
global brand ÃCrestorà and other new products. Strategic
medico-marketing initiatives such as setting up and conducting of
Advisory Board meetings, Web casts, scientific meetings and symposium
in order to disseminate scientific knowledge to the medical fraternity
were undertaken.
PhysicianÃs awareness increased on Adverse Event Reporting and its
importance through Pharmacovigilance workshops. Timely renewals of
various licenses including import license and site registrations were
obtained for the CompanyÃs products.
Your company continued to participate in, and contribute to, pivotal
global clinical trials as per Good Clinical Practice (GCP) norms for
AstraZeneca pipeline products.
MANUFACTURING
Operations team supported launch of 7 new products during the year.
Productivity continues to improve both in terms of value & volume at
manufacturing plant.
The Company also continued with its initiatives towards better-cost
management through purchasing efficiency, improved Overall Equipment
Effectiveness and pack rationalizations / process improvements in
formulations and Active Pharmaceutical Ingredients (APIs).
The manufacturing plant also successfully underwent Global SHE audit
with no critical observations.
The members are informed that at the Board meeting held on March 25,
2010, the Board has approved of an investment of USD 14.6 Mio (approx
Rs. 700 Mio) by the Company towards setting up of a New Tablet
Manufacturing Plant and Facility at the CompanyÃs existing site at
Yelahanka.
SAFETY HEALTH AND ENVIRONMENT
During the year 2009, the CompanyÃs operation site has been accredited
with the latest version for Occupational Health Safety Assessment
Series (OHSAS) 18001 for health and safety and successfully sustained
surveillance audit for ISO 14001 for the environment by M/s
Germanischer Llyod, Germany. The Company continued with its emphasis on
ÃDriver SafetyÃ. We are happy to inform you that there was no fatality
despite the substantial increase in the field force strength.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
Attracting, retaining and developing talent continued to be a focus
area for the Company, in the year 2009. The CompanyÃs strong Goal
Alignment Process continued to ensure that every individualÃs effort
were fully aligned to the overall business objective. Employee
Relations continued to be cordial at all levels. The Company has a
total employee strength of 1464.
INFORMATION SYSTEMS
During 2009, the Company rolled out SAP (ERP) which went live in April
2009. The Company implemented web based E-learning solution to the
field force which helped in training new recruits and bringing them on
board quickly and to enhance the product knowledge of the field force.
The Company also implemented a world class weighing and dispensing
system in the factory for further improving the GMP compliance.
FACTORY LAND AT YELAHANKA
In the last Directorsà Report members were informed that the National
Highways Authorities of India (NHAI) had acquired a portion of the
factory land at Yelahanka for expansion of the Hyderabad à Bangalore
Highway. The Special Land Acquisition Officer (SLAO) had awarded
compensation of Rs.23,709,554/- for the said acquisition. The SLAO had
subsequently reduced the compensation to Rs.4,98,879/-, claiming that
the original award was amended on the basis of a direction received
from the Government of Karnataka. The Company has not accepted the
amended award and has disputed the same. The Company has invoked the
arbitration provisions under the National Highways Act, 1956. The
Company has further filed a Writ Petition challenging the direction
given by the Government of Karnataka and for directing the SLAO to pay
compensation as per the original amount awarded.
The Writ Petition filed by the Company is part heard before the HonÃble
High Court of Karnataka.
In this connection reference may be made to note No.2 in Schedule 17 of
the Annual Accounts.
DRUG PRICE CONTROL ORDER
The Writ Petitions filed by the Company challenging the Demand Notices
issued by the Central Government under the provisions of the Drug Price
Control Order were heard in the HonÃble High Court of Karnataka. The
HonÃble High Court of Karnataka has by its Order passed on October 14,
2009, allowed the Writ Petitions filed by the Company challenging the
Demand Notices issued by the Central Government under the provisions of
the Drug Price Control Order in respect of Rifampicin and Ibuprofen.
In this connection, reference may be made to note No.1 in Schedule 17
to the Annual Accounts.
OPEN PUBLIC OFFERS MADE BY ASTRA PHARMACEUTICALS AB, SWEDEN TO THE
SHAREHOLDERS OF THE COMPANY
Members have been regularly advised of the status of the Writ Petitions
filed by the under mentioned shareholders challenging the First Open
Public Offer made pursuant to the Letter of Offer dated May 11, 2002
and the Second Open Public Offer made pursuant to the Letter Of Offer
dated October 29, 2002, by Astra Pharmaceuticals AB, Sweden (APAB). The
position as of December 31, 2009 is as under:
First Open Offer pursuant to the Letter of Offer dated May 11, 2002
The Writ Petitions filed by Mr. Arun Kumar Agarwal and Ms. A Prameela,
two members of the Company, in the Karnataka High Court, Bangalore were
fully heard. They have been dismissed by the HonÃble Court by its Order
dated September 7, 2009.
The Writ Petition filed by Ms. Annie Koshy, a member of the Company, in
the Kerala High Court, Kochi, is pending hearing before that Court.
Second Open Offer pursuant to the Letter Of Offer dated October 29,
2002
The Writ Petitions filed by Mr. Arun Kumar Agarwal and Ms. A Prameela,
in the Karnataka High Court, Bangalore were fully heard. They have been
dismissed by the HonÃble Court by its Order dated September 7, 2009.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956 (Ãthe ActÃ),
the Board of Directors states that in the preparation of the CompanyÃs
Annual Accounts, the applicable accounting standards have been followed
and proper explanations have been provided for material departures,
wherever applicable. The Board of Directors has selected such
accounting policies which have been 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 of the
financial year ended December 31, 2009 and of the profit of the Company
for that period. The Board of Directors has 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.
It is confirmed that the financial statements have been prepared on a
going concern basis.
BOARDÃS RESPONSE TO AUDIT OBSERVATION
The observation made by the Auditors under Para (ix) (a) of the
Annexure to the Auditorsà Report regarding Sales Tax dues aggregating
to Rs. 11,631,873/- pertains to C & F Forms pending collection for the
Financial Years 2007-08 and 2008-09. The Company is energetically
following up on collection of the said C & F Forms and will endeavour
to collect them before the assessments for the respective years are
completed.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
Information required under Section 217 (1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988, is given in Annexure-I and
forms part of this Report.
Information required under Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of the Employees) Rules, 1975, is
given in Annexure-II and forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company continues to make a positive contribution to the local
communities through charitable donations, sponsorships and other
initiatives that help make a difference to peopleÃs lives.
In the year 2009, the Company continued its community activities
focused on making the Katigenahalli Primary School, Yelahanka, a better
place to study for the children. Your Company also continues to
contribute to the monthly operating cost of the emergency ambulance
service ÃOperation Sanjeevinià run by the Comprehensive Trauma Care
Consortium, Bangalore.
CORPORATE GOVERNANCE REPORT
The Company has taken adequate steps to ensure that all mandatory
provisions of Corporate Governance as prescribed by the Listing
Agreement of the Stock Exchanges on which the CompanyÃs shares are
listed, have been complied with.
The Management Discussion & Analysis is attached as Annexure-III and
forms part of this Report.
A Report on Corporate Governance forming part of the Directorsà Report,
along with a certificate from the Statutory Auditorsà confirming
compliance, is attached as Annexure-IV and forms part of this Report.
DIRECTORS
Mr. Bhasker V. Iyer resigned as a Director with effect from February
23, 2010. The Board places on record its appreciation of the services
rendered and contribution made by Mr. Bhasker Iyer to the Company,
during his tenure as a Director.
Mr. Luigi Felice La Corte was appointed as an Additional Director with
effect from March 25, 2010. Mr. La Corte will hold office as a Director
only upto the date of the forthcoming Annual General Meeting of the
Company, but is eligible for re-appointment. The Company has received a
notice in writing from a Member under Section 257 of the Companies Act,
1956, proposing his candidature for the office of Director of the
Company. Your Board of Directors has recommended his re-election.
In accordance with the provisions of the Companies Act, 1956 and the
CompanyÃs Articles of Association, Mr. Francis McNamara III & Mr.
Anandh Balasundaram, Directors will retire by rotation at the
forthcoming Annual General Meeting and, being eligible, they offer
themselves for re-election. Your Board of Directors has recommended
their re-election.
AUDITORS
The present Auditors M/s. BSR & Co., Chartered Accountants, retire at
the forthcoming Annual General Meeting. However, being eligible, they
offer themselves for re-appointment.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank AstraZeneca
Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their continued
support.
Your Directors would also like to thank the Central and the State
Governments, various other Statutory and Regulatory Authorities, the
CompanyÃs Bankers, the Medical Profession and Trade, Vendors & Business
Associates and the Shareholders for their continued interest in, and
valued support to the CompanyÃs operations.
The Directors place on record their sincere appreciation of the
significant contribution made and the continued support extended, by
the employees at all levels to the CompanyÃs operations during the
year.
On behalf of the Board of Directors
D E UDWADIA
CHAIRMAN
Place : Mumbai
Date: March 25, 2010
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