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Astrazeneca Pharma India Ltd.

BSE: 506820 Sector: Health care
NSE: ASTRAZEN ISIN Code: INE203A01020
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P/E 113.93
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OPEN 945.60
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VOLUME 965
52-Week high 1348.00
52-Week low 916.00
P/E 113.93
Mkt Cap.(Rs cr) 2344.12
Buy Price 0.00
Buy Qty 0.00
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Astrazeneca Pharma India Ltd. (ASTRAZEN) - Director Report

Company director report

Your Directors are pleased to present the 37th Annual Report together withthe Audited Financial Statements of the Company for the financial year ended March312016.

Financials (Rs. in Million)
Particulars 2015-16 2014-15
Sales and Other Income 5705 5229
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 businessperformance considering its overall financial position the Directors are unable torecommend any dividend for the year 2015-16.

The Company registered sales of Rs. 5167.6 Million with a growth of 11% achieving a NetProfit of Rs. 53 Million during the year. The Company’s key growth brands -Brilinta Forxiga Onglyza Kombiglyze and Symbicort witnessed robust growth of 76% overlast year providing strong momentum to the Company’s performance throughout theyear.

Diabetes portfolio of the Company grew by 74% post acquisition from BristolMyers-Squibb and launch of Forxiga. Forxiga is part of a newer class of medicines known asSGLT2 (Sodium Glucose Cotransporter 2) inhibitors that act to block reabsorption of sugarin the kidneys.

The drug Brilinta (Ticagrelor) which provides cardiologists with a new and effectivetreatment to help reduce the rate of heart attack and cardiovascular deaths in adultpatients with Acute Coronary Syndrome (ACS) is being received well by the market andcontinues to register rapid growth. During the year the brand continued to grow itsmarket share as per IMS Health from 9.43% (MAT March 2015) to 14.3% (MAT March 2016) andcontinued to be the #1 Oral Antiplatelet brand". During the year Brilinta won themost prestigious OPPI Marketing Excellence Awards in the category of "Best New PharmaProduct 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 milestoneand also won the prestigious AWACS - AIOCD Award for "Brand of The Year" inAcute catergory.

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 withmetformin our patented therapy for the treatment of type 2 Diabetes. The secondDistribution Services Agreement is with Sun Pharma for Ticagrelor our treatment for acutecoronary syndrome (ACS) and the third Distribution Services Agreement for the treatment oftype 2 Diabetes with Sun Pharma to promote and distribute Dapagliflozin and its fixed dosecombination with metformin.

Pursuant to the above agreements the Company Dr. Reddy’s Laboratories and SunPharma will co-promote market & distribute Saxagliptin Dapagliflozin and Ticagrelorunder different brand name in Indian market.

These partnerships are in line with our commitment to transform patient care inDiabetes and ACS. It will enable us to increase the share of voice for the moleculesthrough a wider reach to physicians thereby benefitting more number of patients.

Manufacturing

Your Directors are pleased to inform that the manufacturing operations at theCompany’s factory situated at Bangalore have improved significantly. The factory hasbeen able to manufacture and supply products as per the demand. The factory has nowstreamlined production of Formulations & Packaging of oral solids with a strong focuson key performing parameters. The factory management has spearheaded many quality andcompliance driven initiatives to bring about a quality culture change at the site. Severalemployee engagement quality and compliance improvement programs were launched during theyear.

In view of low demand for Terbutaline Sulphate (TBS) which was manufacturedpredominantly 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 APImanufacturing activity was planned to be carried out in the future the Board of Directorsof 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 Companyfrom the end of the Financial Year and till the date of this Report

There has been no material change and commitment affecting the financial performanceof the Company which occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.

Deposits

During the year under review your Company has neither accepted nor renewed anydeposits from public within the meaning of Section 73 of the Companies Act 2013 and TheCompanies (Acceptance of Deposits) Rules 2014.

Safety Health and Environment

Safety as well as health & wellbeing of employees is a core focus area of theCompany. During the year under review the Company’s field force was trained indefensive driving techniques to enhance their on-road safety. There was a significantreduction in the number of road accidents in the field. Health awareness activities werecarried out during the year.

Human Resources and Employee Relations

The Company is committed to provide career opportunities for its employees and enabletheir growth and development. During the year the India Development Week was conducted toenable employees to understand how to build careers and gain experiences across functionsand businesses. Further there is a focus on hiring science and pharmacy graduates tostrengthen the scientific orientation in the workforce. There continues to be a focus onbuilding gender diversity in the workforce. Training programs to strengthen scientific andtechnical 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 against1654 as on March 312015.

Factory Land

In the last Directors’ Report the Members were informed that the Company hadreceived compensation amount of (a) Rs. 13.7 million in respect of the first acquisitionof 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 inrelation 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 ofcompensation from NHAI in respect of second acquisition of land made by NHAI in 2011 isalso pending.

Other Matters

In November 2012 the Company had received a notice from Bruhat Bangalore MahanagaraPalike (BBMP) demanding from the Company improvement charges amounting to Rs.155804930/-. The Company had filed a Writ Petition before the Karnataka High Courtchallenging the said demand notice from BBMP. The Court had granted interim stay againstthe 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 demandingimprovement charges amounting to Rs. 70820430/-. The Company had filed a Writ Petitionbefore the Karnataka High Court challenging the said demand notice from BBMP. The Courthas granted interim stay against the notice issued by BBMP and the stay is in force tillthe next date of hearing. There is no further development in the matter since the lasthearing held on 26th April 2016.

Voluntary Delisting Offer

In last year’s Directors’ Report the Members were informed that an appealhas been filed by two shareholders of the Company (‘Appellants’) before theSecurities Appellate Tribunal (SAT) against part of the Order of Securities and ExchangeBoard of India (SEBI) dated June 24 2014 in relation to delisting proposal ofAstraZeneca Pharmaceuticals AB Sweden (AZPAB).

The SAT which heard the appeal on September 112015 had disposed of the same andpassed the following order:

a) Statement made by the Counsel for Respondent No.2 (i.e. AstraZeneca Pharma IndiaLimited) and Respondent No.5 (AZPAB) that they shall not proceed with the delisting ofequity shares of Respondent No.2 Company till completion of investigation and passingorder by SEBI on merits is accepted.

b) SEBI shall complete the investigation within a period of six months from September11 2015 and pass appropriate order on merits after hearing the parties including theAppellants as expeditiously as possible.

c) If the order to be passed by SEBI on merits is adverse to the Appellants then thesaid order shall not be given effect to from the date of passing the said order till it iscommunicated 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 dividendamount aggregating Rs. 19.96 Lacs lying with the Company for a period of seven yearspertaining to the financial year ended December 2007 was transferred during June 2015 tothe Investor Education and Protection Fund established by the Central Government.

Further the unclaimed debenture amount including the interest payable thereonaggregating Rs. 27.62 Lacs lying with the Company for a period of seven years sinceJanuary 2009 was transferred during February 2016 to the Investor Education andProtection Fund established by the Central Government.

Directors’ Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors state in terms of Section 134 (5) of theCompanies Act 2013 ('the Act'):

(a) that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any.

(b) that they had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2016 and of the profit of theCompany for the year ended on that date.

(c) that they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 Companyand that such internal financial controls are adequate and were operating effectively.

(f) that they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

The details in respect of internal financial controls and their adequacy are includedin 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. Henceit does not tolerate any discrimination and/or harassment in any form. The Company has inplace a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as perthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

During the year under review the Internal Complaints Committee received one complaintwhich was investigated. Post the investigation a report was submitted to managementindicating that the facts of the complaint could not be substantiated. However to ensurecomfortable working conditions there was a management decision to separate the reportingline of the complainant with her consent.

Board Meetings

During the year 6 meetings of the Board were held. For details of the meetings of theBoard 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 BoardCommittees and individual Directors pursuant to the requirements of the Companies Act2013 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 allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromeach of the committee members on the basis of the criteria such as the composition ofcommittees effectiveness of the functioning of committee meetings etc.

The Board and the Nomination & Remuneration Committee also reviewed the performanceof the individual directors on the basis of the criteria such as the contribution of theindividual director to the Board and Committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors the performance of Non-IndependentDirectors and the performance of the Board as a whole were evaluated taking into accountthe views of executive directors and non-executive directors. The same was discussed inthe Board meeting at which the performance of the Board its Committees and individualdirectors were also discussed.

Remuneration Policy of the Company

The Remuneration Policy of the Company for appointment and payment of remuneration tothe Directors Key Managerial Personnel and Senior Executives of the Company along withother related matters have been provided in the Corporate Governance Report which formspart of this Report.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism for Directors and Employees to report their concernsabout unethical behavior actual or suspected fraud or violation of the Company’scode of conduct. The mechanism provides for adequate safeguards for victimization ofDirector(s) / Employee(s) who avail of the mechanism. In exceptional cases Directors andEmployees have direct access to the Chairman of the Audit Committee. The Whistle BlowingPolicy 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 Exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith 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 withPromoters Directors Key Managerial Personnel and Senior Management which may have apotential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee for its priorapproval. Omnibus approval of the Audit Committee is obtained for the transactions whichare 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. ThePolicy as approved by the Board is uploaded on the Company’s website and can beaccessed at www.astrazeneca.com/india.

The related party transactions which are of material nature as defined in the ListingRegulations require to be approved by the Members by way of an Ordinary Resolution. Inthis connection the material related party transactions requiring Members’ approvalare 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 withRule 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 andminimization procedures and periodical review is carried out to ensure that executivemanagement controls risks by means of a properly defined frame work.

Corporate Social Responsibility (CSR)

The Company had introduced AstraZeneca’s signature global initiative ‘theYoung Health Programme’ (YHP) in the year 2010-11 designed to help marginalizedyoung 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 199387 young people (84848 boys and114539 girls) and has influenced 119770 wider community members including healthprofessionals educators and policy makers.

Since the average net profit of the Company during the three immediately precedingfinancial years being negative the Company was not required to spend on CSR activitiesduring 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 theprescribed form i.e. MGT - 9 is annexed herewith as Annexure - IV which forms part ofthis Report.

Details of remuneration of Directors / Key Managerial Personnel

The information relating to remuneration of Directors/ Key Managerial Personnel asrequired under Section 197(12) read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 201 4 of the Act is given in Annexure - Vwhich forms part of this Report.

Particulars of Employees

The statement under Rule 5(2) and 5(3) of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are set out in Annexure - VI which forms part ofthis Report.

However the said Annexure shall be provided to Members on a specific request made inwriting to the Company. The said information is available for inspection by the Members atthe Registered Office of the Company on any working day of the Company up to the date ofthe 37th Annual General Meeting.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under the Listing Regulations isannexed as Annexure - VII which forms part of this Report.

Corporate Governance

Your Company has been practicing the principles of good corporate governance. Adetailed report on corporate governance as required under the Listing Regulations isannexed as Annexure - VIII. Certificate of the Practicing Company Secretary regardingcompliance with the conditions stipulated in the Listing Regulations forms part of theReport 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 theStatutory Auditors to report to the Audit Committee and / or the Board as required underSection 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 madeInvestments 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 bythe Regulators or Courts or Tribunals impacting the going concern status of the Companyand its future operations.

Committees

Pursuant to Section 178 of the Companies Act 2013 and the rules made thereunder theBoard of Directors at its meeting held on May 30 2014 had constituted the Nomination& Remuneration Committee and the Stakeholders’ Relationship Committee. Furtherpursuant to Section 135 of the Companies Act 201 3 and the rules made thereunder theBoard of Directors at its meeting held on August 12 2014 had constituted the CorporateSocial Responsibility Committee. Details of these Committees are given in the CorporateGovernance Report which forms part of this Report.

Audit Committee

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

Directors and Key Managerial Personnel

The Companies Act 2013 provides for appointment of Independent Directors who shallhold office for a term of upto five consecutive years on the Board of the Company andshall 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 theCompanies Act 2013 shall not apply to such Independent Directors. The IndependentDirectors of your

Company viz. Mr. D. E. Udwadia Mr. K. S. Shah and Mr. Narayan K Seshadri havefurnished the required declaration under Section 149 of the Companies Act 2013 affirmingthat they meet the criteria of independence.

Ms. Rebekah Martin and Mr. Justin Ooi resigned as Director(s) of the Company effectiveNovember 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 theresignation of Ms. Rebekah Martin to hold office as such upto the date Ms. Rebekah Martinwould have held the office of Director.

Pursuant to Section 152 of the Companies Act 2013 Mr. Sanjay Murdeshwar ManagingDirector will retire by rotation at the ensuing Annual General Meeting and beingeligible offer himself for re-appointment. A resolution in this behalf is set out at ItemNo.2 of the Notice of the Annual General Meeting.

The details of familiarization programme and Annual Board Evaluation process forDirectors have been provided in the Corporate Governance Report.

As on date Mr. Sanjay Murdeshwar Managing Director Mr. Rajesh Marwaha ChiefFinancial Officer and Mr. Anantha Murthy N Legal Counsel & Company Secretary are theKey Managerial Personnel of the Company.

Auditors

a) Statutory Auditors:

The present Auditors - M/s. BSR & Co. LLP Chartered Accountants Bangalore whohold office up to the ensuing Annual General Meeting have conveyed that they do not wishto be re-appointed as Statutory Auditors of the Company for the financial year 2016-17. Assuch the Board of Directors of your Company based on the recommendation of the AuditCommittee have approved the proposal for appointment of M/s. Price Waterhouse & CoChartered Accountants LLP (Firm Registration No. 304026E/E-300009) as Statutory Auditorsof the Company to hold office for a period of 5 years from the conclusion of the 37thAnnual General Meeting subject to the approval of the Members of the Company at theensuing Annual General Meeting. The Notice of AGM contains a business to this effect foryour approval.

The Board of Directors wishes to place on record its appreciation of the guidance andsupport ably provided by M/s. BSR & Co. LLP during their tenure as the StatutoryAuditors of the Company.

b) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andamendments made thereto your Company engaged the services of Mr. Vijayakrishna KTPracticing Company Secretary to conduct the Secretarial Audit of the Company for thefinancial year ended March 31 2016. The Secretarial Audit Report in Form MR-3 is annexedas Annexure - IX which forms part of this Report.

c) Cost Auditors:

The Board of Directors of the Company based on recommendation of the Audit Committeehas appointed M/s. Rao Murthy & Associates Cost Accountants Bangalore (holdingRegistration No.000065) as Cost Auditor of the Company for conducting the Cost Audit forthe financial year 2016-17 on a remuneration as mentioned in the Notice convening the 37thAnnual General Meeting.

A Certificate from M/s. Rao Murthy & Associates Cost Accountants has beenreceived to the effect that their appointment as Cost Auditor of the Company if madewould be in accordance with the limits specified under Section 141 of the Act and Rulesframed thereunder.

Cost Audit Report for the year 2014-15 was filed with the Ministry of Corporate Affairson September 29 2015.

Acknowledgements

Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB Swedenand AstraZeneca PLC for their valuable guidance and strong support to the Company’soperations during the year.

Your Directors would also like to thank the Central and the State Governments otherStatutory and Regulatory Authorities the Company’s Bankers the Medical Professionand Trade Vendors & Business Associates and the Members for their continued valuablesupport to the Company’s operations.

Your Directors place on record their sincere appreciation of the significantcontribution and continued support of the employees at all levels to the Company’soperations during the year.

On behalf of the Board of Directors
Place: Bangalore D E UDWADIA
Date: May 25 2016 CHAIRMAN

Annexure I to Directors’ Report

Details on Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo

A. Conservation of Energy-

(i) The steps taken or impact on conservation of energy;

The New Tablet Facility was the first pharma facility in India to be accredited withGold Standard Rating under LEED (Leadership in Energy and Environmental Design)certification. The facility uses vapour absorption chiller efficient water fixtures andan extensive energy modelling. All the HVAC operations is controlled by the buildingmanagement system which enables the facility to be energy efficient.

ii. The steps taken by the Company for utilising alternate sources of energy;

The Company continues to use renewable energy concepts like

• Agro husk Boilers for steam generation

• Rainwater Harvesting

• Condensate water recovery system

• Recycled Materials for Construction

iii. The capital investment on energy conservation equipment;

• Investment in power saving LED fixtures for lighting in the Central warehousefacility.

• The Company has taken initiative towards surrendering of surplus 750KVA contractdemand load of BESCOM to reduce the energy cost the process was completed in April 2016.

• Voltage stabilizer for lighting power conservation being implemented as part ofour investment towards energy conservation

B. Technology Absorption

1 The efforts made towards technology absorption N. A.
2 The benefits derived like product improvement cost reduction product development or import substitution. N. A.
3 In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) N. A.
a) The details of technology imported
b) The year of import
c) Whether the technology has been fully absorbed
d) If not fully absorbed areas where absorption has not taken place and reasons thereof
4 The expenditure incurred on Research and Development N. A.

C. Foreign Exchange Earnings and Outgo

(a) Activities relating to Exports etc.:

The Company has not exported any goods during the year ended March 312016.

(b) Total foreign exchange used and earned:

The Company used foreign exchange amounting to Rs. 1222357454 and earned Rs.97041364.

On behalf of the Board of Directors
Place: Bangalore D E UDWADIA
Date: May 25 2016 CHAIRMAN

Annexure II to Directors’ Report

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts / arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm’s length transactions under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis:

During the financial year 2015-16 there was no contract or arrangement or transactionwith the related parties which is not at arm’s length and in the ordinary course ofbusiness.

2. Details of material contracts or arrangement or transactions at arm’s lengthbasis

A) Name of the related party: AstraZeneca UK Limited (AZ UK)

B) Nature of relationship: AstraZeneca UK Limited is the Parent Company of AstraZenecaTreasury Limited United Kingdom which is the Holding Company of AstraZeneca AB Swedenwhich in turn is the Holding Company of AstraZeneca Pharmaceuticals AB Sweden and whichin turn is the Holding Company of AstraZeneca Pharma India Limited

C) Nature of contracts / arrangements / transactions: (i) Purchase of raw materials andtraded goods by the Company from AZ UK

(ii) Reimbursement by AZ UK to the Company of the cost of employees deputed by theCompany outside India and (iii) Reimbursement by the Company to AZ UK the cost related tooverseas employees deputed in India.

D) Duration of the contracts / arrangements / transactions: (i) Agreement dated 20thJune 2005 entered into by the Company with AZ UK is ongoing

E) Salient terms of the contract including value if any:

(i) Formulation Packaging and Distribution Agreement dated 20th June 2005:

Nature: Formulation packaging and resale of the products by the Company Credit Period:360 days maximum

Transactions to take place at agreed transfer pricing

Termination of Agreement by 6 months written notice by either party Monetary value ofthe transaction(s) during 2015-16 was Rs. 102.07 Crores

(ii) The Company had sent its personnel to the Related Party viz. AZ UK ondeputation. Likewise the AZ UK had deputed its personnel to the Company. The RelatedParty has reimbursed the Company cost of deputation of such personnel and vice-versa. Theaggregate reimbursement made by the Related Party to the Company and vice-versa is Rs.1.96 Crores.

The aggregate value of transactions with AZ UK a Related Party during the financialyear 2015-16 was Rs. 104.03 Crores.

F) Date of approval by the Board: Not applicable as the transactions referred to aboveare in the ordinary course of business and on arm’s length basis.

G) Amount paid as advances if any: Nil

On behalf of the Board of Directors
Place: B angalore D E UDWADIA
Date: May 25 2016 CHAIRMAN

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