Your Directors are pleased to present the 39th Annual Report together withthe Audited Financial Statements of the Company for the financial year ended March312018.
| || ||(Rs. in million) |
|Particulars ||2017-18 ||2016-17 |
|Sales and Other Income ||5842 ||5631 |
|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 ||1177 ||918 |
|Appropriation made by Directors || || |
|Transfer to General Reserve ||- ||- |
|Appropriation recommended by Directors || || |
|Dividend ||- ||- |
|Tax on proposed Dividend ||- ||- |
|Surplus carried over ||1177 ||918 |
Though the Company made significant progress during the year in terms of its businessperformance considering its overall financial position the Directors have notrecommended any dividend for the year 2017-18.
The Company registered sales of Rs. 5276 million with a growth of 3% achieving a NetProfit of Rs. 259 million during the year. The current year growth for the Company comesfrom the focussed therapeutic areas Cardio-Metabolism Oncology and Respiratory.
The Company's Growth Platforms consist of the innovative drugs like Brilinta ForxigaXigduo Symbicort Onglyza Kombiglyze and the recently launched Tagrisso which togetherconstitutes 64% of total sales. The Launch of Tagrisso in the Lung Cancer segment hashelped the Company improve Lung cancer patient's lives and cater to the unmet need in thiscategory.
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 morepatients. This franchise crossed the Rs. 1000 million milestone within 5 years of launchand as per IQVIA Health
Ticagrelor franchise enjoyed 32% market share (MAT March 2018) while the OralAnti-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 (SodiumGlucose Cotransporter inhibitors) also experienced robust growth. As per IQVIA Healthdapagliflozin 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 combinationdrug which helps to improve glycemic control in adults with type 2 diabetes mellituswhen treatment with both dapagliflozin and metformin is appropriate.
The manufacturing operations continue to provide strong support for product deliveriesin the market. The robust Technology Transfer processes have enabled us to bring localpacking of new products like Forxiga and Oxra into the market much faster. It isheartening to note that Manufacturing and Supply of all the factory manufactured productsachieved 99% OTIF (On Time & In Full). There has been a seamless launch of productsfrom factory.
We are pleased to inform that the factory has received the renewed cGMP certificationfrom our Regulatory Authorities and we continue to improve our cGMP standards. In ourmanufacturing operations we ensure profitability by focusing on environmentallysustainable manufacturing practices continuous focus on variable and fixed costs andimplementation of lean supply chain practices. The manufacturing facility has entered intoa Solar Power supply agreement which will result in significant power savings andcontribute towards green energy and reduction in Carbon Footprint. Factory Operations haslaunched the lean manufacturing programme that will help reduce cost and improveefficiency. We would also like to highlight that to prepare the factory for any new growthopportunities for volume uptake the factory management is executing a plan to upgrade thetechnical capability of the existing workforce and steer towards a new way ofmanufacturing in the years ahead. We are also working towards creating a truly diverse andinclusive organisation which reflects our desire to further cement our diversity agenda.
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 performance ofthe Company which occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this Report.
During the year under review the Company has neither accepted nor renewed any depositsfrom the 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 and Well-being of employees is an important issue for theCompany. New initiatives were introduced on building a safe working environment for ourwomen employees. Many health awareness activities too were carried out throughout theyear.
Human Resources and Employee Relations
The Company is committed to provide career opportunities for its employees and enabletheir growth and development. Further there is a focus on hiring science and pharmacygraduates to strengthen the scientific orientation in the workforce. There continues to bea focus on building gender diversity in the workforce. Training programmes to strengthenscientific and technical knowledge of the employees were extensively implemented acrossthe business.
The Company continued to provide career development and learning opportunities for itsemployees. During the year the India Development Week was conducted to enable employeesto develop capabilities to further their development within AstraZeneca to enable them tobe ready for the focus on newer challenges and portfolio. We also continued to focus onbuilding 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 1356 as against1141 as on March 312017.
In the last year's Board's Report members were informed about the following legalmatters:
(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 in2004 and the arbitration proceedings invoked by the Company seeking inter aliaenhancement of compensation from NHAI in respect of second acquisition of land made byNHAI in 2011.
(b) Writ Petition filed by the Company before the Karnataka High Court challengingdemand notice received from Bruhat Bangalore Mahanagar Palike dated August 7 2014demanding improvement charges from the Company and the interim stay granted by the HighCourt of Karnataka.
(c) Appeal filed by 2 shareholders of the Company before Securities Appellate Tribunalagainst part of the Order of Securities and Exchange Board of India (SEBI) dated June 242014 in relation to delisting proposal of AstraZeneca Pharmaceuticals AB Sweden.
During the year under review there have been no reportable developments on the abovematters.
Transfer to Investor Education and Protection Fund
As required under the Companies Act 1956/2013 the unclaimed dividend amountaggregating Rs. 1203740 lying with the Company for a period of 7 years pertaining to thefinancial year ended December 2009 was transferred during July 2017 to the InvestorEducation and Protection Fund established by the Central Government.
Further as required under the said Act the shares pertaining to the aforesaidunclaimed dividends aggregating 67300 shares held by 194 shareholders were transferred tothe Investor Education and Protection Fund Authority.
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 March312018 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 judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312018 and of the profit ofthe Company 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 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. Thereis zero tolerance of 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 the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the year under review there were no complaints received by the InternalComplaints Committee.
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.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations') performanceevaluation exercise was carried out for evaluation of the performance of the Board as aWhole the Chairman Independent Directors and the Non-Independent Directors. The Companyhad formulated a questionnaire to carry out the evaluation exercise. The questionnaire hasbeen structured to embed various parameters based on identified criteria and framework tocarry out the evaluation effectively.
Nomination and Remuneration Policy of the Company
The Company has adopted a Nomination and Remuneration Policy relating to theappointment and payment of remuneration to the Directors Key Managerial Personnel andSenior Executives of the Company which is annexed herewith as Annexure - I 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 behaviour actual or suspected fraud or violation of the Company's code ofconduct. The mechanism provides for adequate safeguards for victimisation 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 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 - II.
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 transactions which arerepetitive 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 available on the Company's website atwww.astrazeneca.com/india.
The related party transactions which are of material nature as defined in the ListingRegulations are required to be approved by the Members by way of an Ordinary Resolution.In this connection the material related party transactions requiring Members' approvalare 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 withRule 8 of the Companies (Accounts) Rules 2014 are attached as Annexure - III.
The Company has in place a mechanism to inform the Board about the risk assessment andminimisation procedures and periodical review is carried out to ensure that executivemanagement controls are appreciaed by means of a properly defined framework.
Corporate Social Responsibility
The Company in partnership with Plan International (India chapter) a reputednon-governmental organisation and global implementation partners for AstraZeneca's globalcommunity initiative - the Young Health Programme organised free Non-CommunicableDiseases (NCDs) health camps for prevention and detection of common lifestyle diseasessuch 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 mobilisation as awareness campaign for earlyprevention screening counselling and post screening follow ups to ensure that highrisk/diagnosed patients are seeking further medical advise. The screening tests includedGlucose-serum Plasma Blood Pressure Haemoglobin Body Mass Index and Pulmonary FunctionTest. More than 900 community members participated in the 4 health camps including womenand young boys and girls from the communities. The Company's employees also volunteered inthis community service programme.
AstraZeneca continues its commitment towards prevention of NCDs among adolescents inits global community investment initiative - The Young Health Programme now in its 8thyear of successful implementation in marginalised communities in Delhi. So far theprogramme has benefitted 255397 adolescents and reached out to 140339 members of thewider community including parents teachers health workers and policy makers. Over 3600peer educators have been trained so far as part of the programme. This programme is fundedby 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 - IVwhich 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 - V which forms part of thisReport.
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 2014 is given in Annexure - VI which formspart 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 - VII 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 39th Annual General Meeting.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under the Listing Regulations isannexed as Annexure - VIII which forms part of this Report.
A detailed report on corporate governance as required under the Listing Regulations isannexed as Annexure - IX. 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 the 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 Company.
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 andRemuneration Committee and the Stakeholders' Relationship Committee. Further pursuant toSection 135 of the Companies Act 2013 and the rules made thereunder the Board ofDirectors at its meeting held on August 12 2014 had constituted the Corporate SocialResponsibility Committee. Details of these Committees including the Audit Committee aregiven in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Companies Act 2013 provides for appointment of Independent Directors who shallhold office for a term of up to five consecutive years on the Board of the Company andshall 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 theCompanies Act 2013 shall not apply to such Independent Directors. The IndependentDirectors of the Company Mr. Narayan K Seshadri Ms. Revathy Ashok and Ms. KimsukaNarsimhan have furnished the required declaration under Section 149 of the Companies Act2013 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 312017.
(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 ofthe Company w.e.f. July 12017 at the meeting of the Board held on June 29 2017 and wasappointed as the Director of the Company in the Annual General Meeting held on September13 2017.
(d) Mr. Ian John Parish (Non-Executive Director) was appointed as Additional Directorof the Company at the meeting of the Board held on August 8 2017 and was appointed as theDirector 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 byrotation at the ensuing Annual General Meeting and being eligible offers himself forreappointment. A resolution in this behalf is set out at Item No. 2 of the Notice of theAnnual General Meeting.
The details of familiarisation programme and annual board evaluation process forDirectors have been provided in the Corporate Governance Report.
As on date Mr. Gagan Singh Bedi Managing Director Mr. Rajesh Marwaha ChiefFinancial Officer and Director and Mr. Pratap Rudra Company Secretary and Legal Counselare the Key Managerial Personnel of the Company.
Auditors Statutory Auditor:
At the Annual General Meeting held on August 112016 M/s. Price Waterhouse & Co.Chartered Accountants LLP (Firm Registration No. 304026E/E-300009) were appointed asstatutory auditors of the Company for a period of 5 years viz. till the conclusion of 42ndAnnual General Meeting subject to ratification of their appointment by theshareholders.
The Ministry of Corporate Affairs vide its Notification dated May 7 2018 hasdispensed with the requirement of ratification of Auditor's appointment by theshareholders every year. Hence the resolution relating to ratification of Auditor'sappointment is not included in the Notice of the ensuing Annual General Meeting.
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 the Company engaged the services of Mr. Vijayakrishna KTPracticing Company Secretary to conduct the Secretarial Audit of the Company for thefinancial year ended March 312018. The Secretarial Audit Report in Form MR-3 is annexedas Annexure - X which forms part of this Report.
The Board of Directors of the Company based on recommendation of the Audit Committeehas appointed M/s. Rao Murthy & Associates Cost Accountants Bengaluru (holdingRegistration No. 000065) as Cost Auditor of the Company for conducting the Cost Auditfor the financial year 2018-19 on a remuneration as mentioned in the Notice convening the39th Annual 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 2016-17 was filed with the Ministry of Corporate Affairson October 10 2017.
Your Directors take this opportunity to thank AstraZeneca Pharmaceuticals AB Swedenand AstraZeneca PLC UK 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 Profession andTrade Vendors and Business Associates and the Members for their continued and 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: Bengaluru ||Narayan K Seshadri |
|Date: May 212018 ||Chairman |
Annexure I to Board's Report
Nomination and Remuneration Policy
The Remuneration Committee of AstraZeneca Pharma Limited (the Company') wasconstituted on February 6 2013. In order to align with the provisions of the CompaniesAct 2013 and the Listing Agreement the Board at its meeting held on May 30 2014renamed the Remuneration Committee' as Nomination and Remuneration Committee'and approved the Terms of Reference.
The Nomination and Remuneration Committee was constituted pursuant to Section 178 ofthe Companies Act 2013 (the Act') read along with the applicable rules thereto andClause 49 of the Listing Agreement and this Policy is in compliance therewith.
(a) Act means the Companies Act 2013 and the Rules framed thereunder as amended fromtime to time.
(b) Board means the Board of Directors of the Company
(c) Directors means Directors of the Company
(d) Key Managerial Personnel: Key Managerial Personnel means -
(i) Chief Executive Officer or the Managing Director or the Manager;
(ii) Company Secretary
(iii) Whole-time director;
(iv) Chief Financial Officer; and
(v) such other officer as may be prescribed by the Act or rules made thereunder.
(e) Senior Management Personnel: Senior Management means personnel of the Company whoare members of its core management team excluding the Board of Directors. This would alsoinclude all members of management one level below the executive directors including allfunctional heads.
The Policy is applicable to
(a) Directors (Executive and Non-Executive)
(b) Key Managerial Personnel
(c) Senior Management Personnel
4. Constitution Composition Quorum:
(a) The Committee shall consist of a minimum Three (3) Directors and all the directorsshall be non-executive directors out of which not less than one half shall be IndependentDirectors.
(b) Two (2) members present out of whom one shall be an Independent Director shallconstitute a quorum for a Committee meeting.
(c) The Chairman of the Committee shall be an Independent Director. In the absence ofthe Chairman of the Committee the members present at the meeting shall elect one of themembers of the Committee to act as Chairman of that meeting.
(d) The Chairman of the Company can be a member of the Committee but shall not chairthe Committee.
(e) The Chairman of the Committee or in his absence any member of the Committeenominated by the Chairman shall be present at the AGM to answer shareholders queries.
(f) Membership of the Committee shall be disclosed in the Annual Report.
5. Meetings and invitees to meetings:(a) The Committee will meet as andwhen required or mandated by the Board or the Chairman of the Committee.
(b) The Committee may invite such executives as it considers appropriate tobe present at any meeting of the Committee.
(c) The Company Secretary shall act as Secretary of the Committee.
6. Role and Functions of the Committee relating to
(a) To review the Board structure size and composition and make recommendations to theBoard in this regard;
(b) To identify persons who are qualified to become directors (including appointmentsto committees) and who may be appointed in Senior Management in accordance with thecriteria laid-down recommend to the Board their appointment and removal and to carry outevaluation of every director's performance;
(c) To formulate the criteria for determining qualifications positive attributes andindependence of a director;
(d) To recommend to the Board plans for succession in particular of the ManagingDirector the Executive Directors Key Managerial Personnel and Senior ManagementPersonnel;
(e) To evaluate the performance of the Board on certain predetermined parameters as maybe laid down by the Board as part of the self-evaluation process.
7. Functions and Responsibilities of the Committee relating to Remuneration:
The functions and responsibilities of the Committee in relation to remuneration will beas under:
7.1 Relating to the Company:
The Committee to formulate and recommend to the Board a policy relating to theremuneration for the Directors Key Managerial Personnel and other employees.
The Committee while formulating the above policy shall ensure that -
(a) the level and composition of remuneration be reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
(b) relationship of remuneration to performance be clear and meets appropriateperformance benchmarks; and
(c) remuneration to Directors Key Managerial Personnel and/ senior Management involvesa balance between fixed and
incentive pay reflecting short and long-term performance objectives appropriate to theworking of the Company and its goals.
7.2 Relating to the Performance and Remuneration of the Managing Director/Whole-timeDirector:
Establish key performance metrics to measure the performance of the ManagingDirector/Whole-time Director including the use of financial non-financial andqualitative measures.
Review and recommend to the Board the remuneration and performance bonus or commissionto the Managing/ Whole-time Directors.
7.3 Relating to the Performance and Remuneration of the Non-Executive Directors:
Define the principles guidelines and process for determining the payment of commissionto non-executive directors of the Company.
8. Other Functions:
Perform such other activities within the scope of this Policy as may be directed by theBoard of Directors or under any regulatory requirements.
This Policy as amended from time to time shall be disclosed in the Board's Report.
10. Nomination Duties:
Evaluating the performance of the Board members in the context of the Company'sperformance from business and compliance perspective.
11. Remuneration Duties:
The duties of the Committee in relation to remuneration matters include:
(a) to consider and determine the Remuneration Policy based on the performance andalso bearing in mind that the remuneration is reasonable and sufficient to attract retainand motivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board.
(b) to review periodically the terms of appointment and the remuneration of the SeniorManagement including Key Managerial Personnel of the Company maintaining a balance betweenfixed and incentive pay reflecting short and long-term performance objectives appropriateto the working of the Company.
(c) to delegate any of its powers to one or more of its members.
(d) to consider any other matters as may be requested by the Board;
(e) professional indemnity and liability insurance for Directors and senior management.
Criteria for payment of remuneration to Directors KMP and Senior Management Personnelis provided under Annexure - A attached to this Policy.
12. Minutes of Committee Meetings:
Proceedings of all meetings shall be minuted and signed by the Chairman of theCommittee at the subsequent meeting. Minutes of the Committee meetings will be tabled atthe subsequent Board and Committee meetings.
Annexure - A
Criteria for payment of remuneration to Directors KMP and Senior Management Personnel
(A) (i) Remuneration to Managing/Whole-time Directors
(a) The remuneration and commission to be paid to the Managing and Whole-time Directorshall be in accordance with the percentage/slabs/conditions laid down in the Articles ofAssociation of the Company and as per the provisions of the Companies Act 2013 and therules made thereunder.
(b) The remuneration and commission etc. to be paid to the Managing Director/Whole-timeDirector will be determined by the Committee and recommended to the Board for approval.The same shall be subject to the prior/post approval of the shareholders of the Companyand Central Government wherever required.
(c) Subject to Para (B) below the increments to the existing remuneration/compensationstructure may be recommended by the Committee to the Board which should be within theslabs approved by the Shareholders in the case of Managing and Whole-time Director.
(d) Where any insurance is taken by the Company on behalf of its Directors forindemnifying them against any liability the premium paid on such insurance shall not betreated as part of the remuneration payable to any such Directors. Provided that if suchperson is proved to be guilty the premium paid on such insurance shall be treated as partof the remuneration.
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Directors including Managing Director andWhole-time Director in accordance with the provisions of Schedule V to the Companies Act2013 and if it is not able to comply with such provisions with the previous approval ofthe shareholders and/or Central Government as the case may be.
Provision for excess remuneration:
If Managing Director Whole-time Director draws or receives directly or indirectly byway of remuneration any such sums in excess of the limits prescribed under the CompaniesAct 2013 or without the prior sanction of the Central Government where required he/ sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.
(ii) Remuneration to Non-Executive Independent Directors in India:
(a) Sitting Fees:
The Independent Directors in India may receive remuneration by way of fees forattending meetings of Board or Committee thereof. Provided that the amount of such feesshall not exceed the amount as may be prescribed under the Companies Act 2013 and theRules made thereunder.
Commission may be paid within the monetary limit approved by shareholders subject tothe limit not exceeding 1% of the profits of the Company computed as per the applicableprovisions of the Companies Act 2013.
(B) Remuneration to KMP and Senior Management Personnel:
KMP and Senior Management Personnel shall be eligible for remuneration by way of bothfixed and variable pay comprising of monthly salary and perquisites and performance basedincentive/commission.
Appraisals of KMP and Senior Management Personnel annual and/or otherwise shall bedone by the Managing Director and Head of HR function. The Managing Director shall approvethe remuneration including the annual increase in remuneration payable to the KMP thereof.
Annexure II to Board's 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:
Our Tablet Facility was the first pharma facility in India to be accredited with GoldStandard Rating under LEED (Leadership in Energy and Environmental Design) certification.The facility uses vapour absorption chiller efficient water fixtures and an extensiveenergy modelling done with 33.67% reduction in power consumption. All the HVAC operationsis controlled by the building management system which enables the facility to be energyefficient.
Our Company has entered into an agreement for sourcing solar power vide open accesswhich will meet more than 70% of our site's energy requirement resulting in cost savingsand reducing carbon footprint.
(ii) The steps taken by the Company for utilising alternate sources of energy:
The Company is using renewable energy concepts like: Sourcing Solar power for sitepower requirements
B. Technology Absorption
Usage of Agro husk Boilers for steam generation Rainwater Harvesting Condensate waterrecovery system Recycled Materials for Construction
Usage of transparent roofing in engineering stores and other areas to conserve lightingload.
(iii) The capital investment on energy conservation equipment:
The Company's investment into the existing Tablet Facility includes investments made onenergy conservation equipment and systems.
Usage of power saving LED fixtures for lighting production Central warehouse facilityand street lighting.
Usage of motion sensors for office and some production areas to conserve lighting load.
|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 3 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) Foreign exchange earned in terms of actual inflows - Rs. 299547952
(b) Foreign exchange outgo in terms of actual outflows - Rs. 2014908209
| ||On behalf of the Board of Directors |
|Place: Bengaluru ||Narayan K Seshadri |
|Date: May 212018 ||Chairman |
Annexure III to Board's 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 arms length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's length basis:
During the financial year 2017-18 there was no contract or arrangement or transactionwith the related parties which was not at arm's length and in the ordinary course ofbusiness.
2. Details of material contracts or arrangement or transactions at arm's length basis
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: Purchase of raw materials and tradedgoods by the Company from AZ UK and Reimbursement by AZ UK the cost of employees deputedby the Company outside India.
D) Duration of the contracts/arrangements/transactions: Agreement dated June 20 2005entered 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 June 20 2005:
Nature: Formulation packaging and resale of the products by the Company
Credit Period: 120 days
Transactions to take place at agreed transfer pricing
Termination of Agreement by 6 months written notice by either party Monetary value oftransaction(s) during 2017-18 is Rs. 188.27 crores
(ii) The Company had sent its personnel to the Related Party viz. AZ UK on deputation.The Related Party has reimbursed the Company cost of deputation of such personnel. Theaggregate reimbursement made by the Related Party to the Company is Rs. 1.04 crores.
The aggregate value of transactions with AZ UK a Related Party during the financialyear 2017-18 was Rs. 189.31 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: Bengaluru ||Narayan K Seshadri |
|Date: May 212018 ||Chairman |
Annexure VI to Board's Report
The information relating to remuneration of Directors/KMP as required under Section197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
| ||Ratio |
|1. The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year || |
|(a) Mr. Gagan Singh Bedi Managing Director* ||28:1 |
|(b) Mr. Rajesh Marwaha Whole-time Director ||25:1 |
The Independent Directors of the Company were entitled to sitting fee as per thestatutory provisions. The ratio of remuneration and percentage increase for IndependentDirectors' remuneration is therefore not considered for the above purpose. Non-ExecutiveDirectors who are employees of the AstraZeneca group do not receive any sitting fee.
|2. The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year || |
|(a) Mr. Gagan Singh Bedi Managing Director ||10% |
|(b) Mr. Rajesh Marwaha Chief Financial Officer and Director ||11% |
|(c) Mr. Pratap Rudra Company Secretary and Legal Counsel ||12% |
|3. Percentage increase in the median remuneration of employees in the financial year ||10% |
|4. Number of permanent employees on rolls of the Company as on March 312018 ||1356 |
|5. Average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and to point out if there are any exceptional circumstances for increase in the managerial remuneration ||The average increase is 10% for all. No exceptional circumstances in increase of remuneration. The increase is as per company increment guidelines |
|6. Affirmation that the remuneration is as per remuneration policy of the Company ||It is affirmed that the remuneration is as per remuneration policy of the Company. |
* Mr. Gagan Singh Bedi was appointed as the Managing Director of the Company w.e.f.July 12017
| ||On behalf of the Board of Directors |
|Place: Bengaluru ||Narayan K Seshadri |
|Date: May 212018 ||Chairman |