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Glaxosmithkline Pharmaceuticals Ltd.

BSE: 500660 Sector: Health care
NSE: GLAXO ISIN Code: INE159A01016
BSE 00:00 | 03 Dec 1732.10 37.80






NSE 00:00 | 03 Dec 1731.05 39.10






OPEN 1698.00
VOLUME 11412
52-Week high 1824.65
52-Week low 1379.00
P/E 57.47
Mkt Cap.(Rs cr) 29,344
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1698.00
CLOSE 1694.30
VOLUME 11412
52-Week high 1824.65
52-Week low 1379.00
P/E 57.47
Mkt Cap.(Rs cr) 29,344
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Glaxosmithkline Pharmaceuticals Ltd. (GLAXO) - Director Report

Company director report

The Directors of your Company are pleased to share their Report for the year ended 31March 2021.

1. Financial results for the year ended 31 March 2021

Rs. in lakhs

Year ended 31 March 2021 Year ended 31 March 2020
Revenue from Operations 319373 322468
Other Income 11019 7756
Total Income 330392 330224
Profit before Exceptional Items and Tax 72233 64699
(Less) / Add: Exceptional Items (17260) (32449)
Profit before Tax 54973 32250
Less: Income Tax Expenses 19217 21245
Profit for the year 35756 11005
Basic and Diluted EPS after Exceptional Items (Rs./Share) 21.11 6.50
Basic and Diluted EPS before Exceptional Items (Rs./Share) 31.32 26.69

2. Dividend

Your Directors are pleased to recommend a dividend of Rs. 30 per equity sharefor the year. This dividend for the year ended 31 March 2021 is subject to the approval ofshareholders at the Annual General Meeting on 27 July 2021 and will be paid on or after 27July 2021. If approved by the shareholders at the Annual General Meeting the dividendwill absorb Rs. 508 crores.

The Board of Directors of your Company had approved the Dividend Distribution Policy on27 October 2016 and it is available on the Company's website (

3. Management Discussion and Analysis

(a) Finance and accounts The unprecedented adverse business environment triggered bythe COVID-19 pandemic impacted the overall Indian Pharmaceuticals Market (IPM) during FY2020-21. As operations resumed after the initial lockdown your Company sharpened itsfocus on investing in and promoting its established brands. As a result of its concertedefforts the Company not only maintained but successfully consolidated its market positionduring the year. Its market share in represented segments showed increase while the keyestablished brands quickly bounced back to double-digit growth.

At Rs. 3194 crores the Revenue marked a 1% decline in year ended 31 March2021 previous year. Despite the of COVID-19 on operations for Company registered anunderlying of 3% driven by sustained and appropriate rationalisation of Other income washigher Rs. 71 on crores in interest on refunds from the income tax authorities.

Despite the unfavourable macro environment EBITDA improved by 5% compared to previousyear mainly on account of better operational efficiencies focused cost reduction andrenewed impetus on development of our innovative product portfolio. Profit After Tax wasimpacted due to charges and stood at Rs. 358 crores for the year. In the previousyear a strategic assessment for the Vemgal manufacturing facility was undertaken toevaluate various options arising from the global discontinuation of the Zinetac brand.These options included among others modification facility and in-sourcing of productscurrently being manufactured at internal or external manufacturing facilities. Theevaluation concluded that none of these alternatives were economically viable. As aresult the immediate sale of the facility was proposed as the best option. In line withthis decision your Company during the quarter ended March 2021 entered a bindingagreement for the sale of Vemgal assets. The conclusion of this sale is subject tonecessary statutory and regulatory approvals.

Exceptional charges during the year amounting to Rs. 173 crores largelycomprise impairment charge to reflect the estimated realisable value of the assetsreversal of associated costs and of earlier provisions no longer required on account ofthe Zinetac recall. Profit Before Exceptional Items and Tax amounted to Rs.722crores at 23% of sales for the year.

Key Financial Ratios Profitability Ratios Year ended 31-Mar-21 31-Mar-20
Operating ProfitMargin (%) Profit from Operations/ Sale of Products 19% 18%
Net Profit Margin (%)* Profit after Tax/ Revenue from operations 11% 3%
Returnon Net Worth * Profit after Tax/ Shareholders equity 24% 6%
EBITDA % EBITDA/Sales 22% 21%
Efficiency Ratios
Current Ratio Current assets/ current liabilities 1.5 1.8
Inventory turnover ratio Sale of products/ Average inventories 6.3 6.6
Debtors turnover ratio Sale of products/ Average trade receivables 20.0 28.9
FA Turnover Ratio Sale of Products/ Average Fixed Assets 6.5 6.2

*If the impact of exceptional items is excluded then the net profit margin (%) would be17% (previous year 14%) Return on Net Worth would be 35% (previous year 25%).

Interest coverage ratio and Debt Equity Ratio are not relevant for the company as ithas negligible debt.

Despite the difficult external environment Cash Generation from Operations remainedstrong even in FY 2020-21 and was in line with the good underlying business performance.Your Company focused its efforts on achieving working capital efficiencies and faster cashconversion. A deposit of Rs. 180 crores was received towards the sale of Vemgalassets. Your Company continues to deploy accumulated cash balances in bank deposits.

There are no loans or guarantees given securities provided and investments coveredunder Section 186 of the Companies Act 2013. Your Company has not accepted any fixeddeposits during the year. There was no outstanding amount towards unclaimed depositspayable to depositors as on 31 March 2021.

Further there are no significant orders passed by regulators courts or tribunalswhich impact the going concern status of your Company and its future operations. There arealso no material changes and commitments affecting the financial position of your Companyas on the date of this report.

(b) Business performance and outlook Pharmaceuticals

Even amid the lockdown your force remained active on the digital channels effectivelyto engage with Health Care Professionals (HCPs) Company's robust digital infrastructure tobe a reliable means of science behind the medicines. Touch increased to 30 million throughtele-calling webinars and emailers adoption of state-of-the-art technology such as VeevaEngage.

On resumption of interpersonal Company focused on skill enhancement field force toupgrade their skills amid the new norms of functioning Company's representatives wereamong to prudently adopt all necessary personal safety and physical distancing guidelinesto resume field work. In line with the changing business realities your Company adaptedits in-clinic communication to the need for delivery of key messages with greaterimmediacy and impact.

These initiatives led to gains in the market share for your Company across thecategories of Anti-Infectives Pain Dermatology Vitamins Minerals and Supplements. TheEvolution Index for top brands stood at: Augmentin 119 Ceftum 112Calpol 103 T-Bact 104 Cobadex CZS 117 (IMS

MAT March 2021).

Your Company also continued to focus on effective partnerships with key healthcareorganisations to engage on important topics such as judicious use of antibioticsparticularly after the administration of COVID-19 vaccine. Besides leading the topicalantibiotics market your Company has been making gains consistently in the topicalcorticosteroids and emollient categories.

Even though Dermatology was one of the adversely impacted segments your Companymaintained and consolidated its leadership in this segment during the year by remainingdigitally engaged with key opinion leaders. Virtual platforms such as Tell e-Skin weredeployed during the lockdown to disseminate the opinions and information shared bydermatology experts with general practitioners and pediatricians on diagnosis and use ofsteroids thereby improving the outcome for patients.


Five of your Company's the top 20 vaccines in MAT March 2021) in which 1 company.Though the market is estimated Rs. to 2500be it is currently not reflecting (IMSMAT March 2021) on uptake of vaccination during related lockdowns.

Your Company currently across age groups - infants adults. In September 2020 itinfluenza Northern Hemisphere Fluarix Tetra NH 2020-21) to help combat influenza.

Within three months of the launch the vaccine had garnered 30% volume share in themarket. The vaccine which builds on the demonstrated promise of Menveo that waslaunched in 2019 is a testament to the Company's strategy of leveraging the globalinnovation pipeline while bringing differentiated addressable markets.

Your Company launched three engaging direct-to-consumer awareness campaigns during theyear to strengthen its value proposition in this segment. It has also partnered with theFederation of Obstetric and Gynaecological Societies of India (FOGSI) and Indian Academyof Pediatrics (IAP) to increase awareness about vaccination and the benefits of itsvaccines Your Company plans to continue to grow its vaccines business by launching newbrands to optimise its portfolio and by expanding into new consumer segments.

Supply chain

Manufacturing excellence

Consistent with your excellence the Nashik manufacturing is positioned to be criticalto sourcing. The facility continued to culture improvement initiatives while unhinderedsupply of products to the year the Nashik manufacturing new benchmarks in excellence:

Over three million without reportable illnesses;

81% reduction in 14.9% to 2.8%);

Significant improvement vaccines feature among self-pay Warehousing and distributionmarket (IMS The COVID-19 crisis necessitated agile it remains the No. adaptation of thesupply chain operations vaccines self-pay in keeping with the prevailing governmentcrores over mandates. Your Company conformed to the any value growth account regulationsof the notified slower by the government from the time to time by coordinating with morethan 30 COVID-19 manufacturing facilities 26 warehouses 6000 stockists a distributionteam of more than 700 markets external workers across warehousing and 280 10 vaccinesadolescents transporters across the country. Your Company and launched is pleased toreport that there was not a single tetravalent (day of interruption or delay in the supplychain network during the year.

Your Company's warehousing and distribution network continued to deliver high levels ofcustomer service on time and in the right quantity while maintaining the supply chainfundamentals. Your Company is also implementing automation initiatives within supply chainoperations to proactively track products until they reach the customer. This insight intocustomer requirements not only supports business growth but also ensures a positive impacton the society and the ecosystem.

(c) Opportunities risks concerns and threats

With the pandemic leading to lockdowns and other curtailments Outpatient Departments(OPDs) at hospitals remained shut and doctors either stopped functioning or avoidedvisiting clinics for most part of the year. This had a significant impact on generation ofnew prescriptions a critical growth driver for the pharmaceutical industry.

With the gradual relaxation in lockdown rules and the introduction of COVID-19vaccines hospitals and clinics started returning to pre-COVID activity level. Thoughoperations were again impacted by the second wave of the pandemic at the start of FY2021-22 the situation is expected to start normalising again as the surge ebbs. YourCompany's investment in digital initiatives deep customer relationships and a resilientsupply chain will continue to ensure high service levels across stakeholders and give it acompetitive advantage.

Several experts have predicted that India may experience future waves of COVID-19which could further stretch the country's healthcare ecosystem. This may also impact yourCompany's ability to service its patients and HCPs on time. With agile business continuityprocesses in place your Company will however ensure that optimum levels of productionand supply chain reliability are maintained. Over the medium to long-term your Companyremains positive about delivering healthy growth.

The outbreak of the global pandemic has also created raw material (ActivePharmaceuticals Ingredients or APIs) related disruptions for the Indian pharmaceuticalindustry. Your Company has long-term loan licenses with various Contract ManufacturingOrganisations (CMOs) that should help it tide over such unpredictable situations withminimum impact. However in the event of an extended period of shutdown there are risksof supply disruption and higher input costs. From a long-term advocacy perspective yourCompany is working closely with industry associations and policy makers to propose a morepredictable transparent API pricing regime that will be a win-win for all stakeholders.

Your Company operates in a price-regulated market. Adverse regulations on productprices may impact revenues and profit margins. To mitigate these your Companyperiodically assesses its product portfolio to make it more diversified with focus onhigh-volume growth products and operational efficiencies to control costs. With therevised National List of Essential Medicines (NLEM) expected to be released by theGovernment later in 2021 your Company is engaging in various stakeholder discussions on


The healthcare policy landscape in India is at an inflection point. Amid the pandemicthe uptake and acceptance of new areas of healthcare delivery such as telemedicinee-pharmacies Over-the-Counter (OTC) medicines are at an all-time high. New Governmentregulations could redefine the term and your Company is in discussion with policymakersand stakeholders on the subject.

(d) Regulatory affairs

Your Company applied to Central Drugs Standard Control Organisation (CDSCO) forregistration of

(i) Herpes Zoster Vaccine (recombinant adjuvanted) [Shingrix] for prevention ofHerpes Zoster and Post-Herpetic Neuralgia in adults aged 50 years;

(ii) Belimumab Solution for Injection 200mg/ml [Benlysta] for treatment ofadults with systemic Lupus Erythematosus and Lupus Nephritis; and

(iii) indication expansion for Quadrivalent Inactivated Influenza Vaccine (Fluarixtetra) for use in adults over 64 years of age.

A Global Clinical Trial (GCT) application was approved during the year for conductinga multi-country phase 3 study with Respiratory Syncytial Virus (RSV) Maternal (RSVPreF3)vaccine in


Registrations were successfully completed for

(i) a new fixeddose combination of Fluticasone Furoate Umeclidinium and VilanterolPowder for Inhalation (Trelegy) for chronic obstructive pulmonary disease (COPD);

(ii) new strength of an already marketed oral suspension of Augmentin viz.Amoxycillin and Potassium Clavulanate oral suspension 642.9 mg/5ml (Augmentin ES);and

(iii) a ready-to-use liquid formulation of Mepolizumab Injection 100mg (Nucala)for treatment of severe refractory eosinophilic asthma in adults.

These approvals will enable timely access to new and innovative therapeutic options topatients in India besides improving compliance to treatment of existing products with newformulations and strength.

(e) Medical affairs and medical governance

Despite challenges associated with the pandemic during the year your Company's medicalteam maintained its robust connect with the healthcare community to keep them updated onthe science of disease and the Company's products. The team delivered over 2200scientific presentations through virtual GSK standalone scientific promotional meetings(SPMs) and webcasts reaching over 90000 HCPs.

In addition your Company's medical affairs team ensured continued one-to-oneinteractions with HCPs by utilising an optimal mix of digital platforms and deliveringover 3300 interactions. Full support was provided to the healthcare community in thefight against COVID-19 through webinars with experts across specialties on effectivediagnosis and management of the coronavirus in addition to various aspects oftelemedicine. These initiatives have helped your Company build greater trust andcredibility as a science-led organisation focused on benefitting patients.

In the Anti-Infective therapy area your Company's medical team delivered over 1200scientific presentations reaching over 30000 HCPs and more than 1500 one-to-oneinteractions with experts across specialties. In Dermatology the medical team continuedits efforts to drive appropriate use of topical steroids and dissemination of sciencebehind relevant disease areas through more than 900 scientific presentations. The medicalteam responsible for Primary Care contributed by delivering over 220 scientificpresentations reaching over 30000 HCPs and more than 300 one-to-one interactions withexperts including endocrinologists.

In the Respiratory therapy area your Company's medical experts participated in over100 promotional meetings as speakers and moderators reaching approximately 1900 HCPs inaddition to more than 1300 one-toone scientific interactions with external experts. Themedical science liaisons (MSLs) led six non-promotional meetings on severe asthma andconducted an advisory board meeting to gather insights on the role of eosinophils inhealth and disease. The medical team initiated the Nucala Home Administration programme in2020 to support eligible patients to continue treatment amid the pandemic challenges. Theteam also launched the Severe Asthma Clinic programme to support HCPs in early diagnosisand phenotyping of patients of the disease.

Several key evidence generation activities such as two Investigator Sponsored Studies(ISS) and eight key review articles published in peer-reviewed indexed medical journalswere undertaken to spread vaccine awareness. The medical team delivered 390 scientificpresentations and 860 one-to-one scientific interactions reaching out to more than 23000doctors. The vaccines medical team also collaborated with the Indian Medical Association(IMA) to support the module development of the Life Course Immunisation Guidebook and itsrollout to their members.

(f) Internal control framework

Your Company conducts its business with integrity and high standards of ethicalbehaviour and in compliance with the laws and regulations that govern the business. ItsInternal Control Framework (ICF) is a comprehensive enterprise-wide risk management modeland supports the continuous process of identification evaluation and management of theCompany's risks. ICF is supported by standard operating procedures policies andguidelines including suitable monitoring procedures and self-assessment exercises.

Compliance with laws and regulations is monitored through a well-crafted framework. Asrequired by the Companies Act 2013 your

Company has implemented an Internal Financial Control (IFC) framework. It alsocontinues its annual Independent Business Monitoring (IBM) designed by GSK plc andrequiring a regular review of activities data exceptions and deviations for monitoringand improving the quality of operations.

As part of the due diligence activities for onboarding of vendors and third partiesengaged by your Company they are required to compliance with our corporate values througha detailed Third Party Oversight (TPO) process. As an annual exercise your Company'ssenior confir to GSK executivesreviewand plc's IFC. Mandatory training on the GSK Code ofConduct is conducted for all employees. During the year an enterprise-wide ‘Livingour Values' training was undertaken for all employees and complementary workers. Thistraining accounted for scenarios that explored your Company's values and their applicationto its ways of working and risks such as those associated with Privacy as well asAnti-Bribery and Corruption (ABAC).

Risk management

Your Company has a Compliance Board (RMCB) of senior leaders responsible the‘tone from the top' culture besides ensuring effective of internal controls andprocesses. Each principal risk risk owner accountable for including setting of riskimplementation and reporting their and progress to the RMCB The Risk ManagementFramework business operational and financial reviewed annually by the RMCB

At present in the Directors there are no risks the existence of your Company.

Vigil mechanism

Your Company has a which offers people whether not a range of channels report anymisconduct. The and procedures encourage everyone concerns about potential unethicalinappropriate conduct and assure and protection from retaliation retribution or any formof harassment to those reporting such concerns.

Confidential Speak Up channels are available to people within and outside the Company.An independent third party manages these reporting lines and calls are logged throughtheir central system to ensure integrity of the programme. Your Company endeavours totreat all questions or concerns about compliance in a confidential manner even if theperson reporting a question or concern identifieshimself/herself. Your Company also has anextensive and widely communicated process to prevent take disciplinary action and deteracts of sexual harassment.

The Speak Up channels can be accessed at on theCompany's website.

Your Company also has in place Whistleblower policy to provide a mechanism for itsemployees/external stakeholders to approach local/group management or the Chairperson ofthe Audit Committee (accindrx. Risk Management andin acase team of any grievance or concern. for promoting an TheappropriateWhistleblowerrisk policy can be oversight on your Company's website (https://india-management an information/policies/)assigned . the risk (g) Human resources plans their approach Your Company is focused ondelivering the on strategic priorities set under GSK plc's global regular basis. coveringInnovation Performance and Trust (IPT) risks framework. is also .

Organisational culture opinion of Thethe Board pandemic of induced whichnotwithstandingmay threaten your Company continued prioritise the safety health andemployees in line with its commitment inclusion and diversity health and ‘SpeakcontinuousUp' programme learning and development. for GSK or voice concernsDuring theandyear the ‘GSK rolledUp channel out to obtain feedback from toelicit raise theirviews on the future illegal and collaboration. For India the confidentiality scoresremained greater than 95% challenging times highlighting your Company's strong connectwith employees. Your Company also launched several culture and capability buildinginitiatives such as Performance with Choice GSK Learning Warriors League GSK from Womenand Leadership Action Programme (WeLeAP) Commercial Development Programmes with wide andenthusiastic participation from employees.

‘Workplace by Facebook' the preferred mode of connecting and collaborating withGSK employees across the globe helped your Company stay engaged and connected with allemployees through the lockdown period. The platform has helped to transform the wayemployees work together and accelerate the delivery of the IPT framework while shapingthe cultural evolution.

Inclusion and diversity

Your Company has instituted the Women's Leadership Initiative (WLI) to promote women'srepresentation foster a more inclusive workplace ensure diversity in perspectivesaccelerate capabilities build talent pool and pave the way for career growth.

Your Company has 11% gender diversity in its workforce 15% of new hires being women inthe commercial organisation which was traditionally male dominated 30% women at Boardlevel and 26% women in top leadership positions. During the year your Company focused onsensitising employees across the organisation through campaigns such as #BreakingBias andWeLeAP

2.0 GSK Women and Leadership Action Programme to develop high potential mid-levelwomen talent.

As a result of these efforts your Company was recognised among the 100 Best Companiesfor Women by Working Mother and AVTAR the Best Workplaces for Women by Great Places toWork and was also conferred the Advancement of Women Award by Community Business in 2020.

Your Company was recognised as one of the top employers by the India Workplace EqualityIndex (IWEI) the country's first comprehensive index for LGBT+ equality. Severalinitiatives were also undertakentocatertothe

Learning and development

Your Company offers a wide range of learning resources and tools to support individualand team development needs. During the year employees participated in and benefitedGSK's global talent programmes such as the Asia Leadership Programme for EmergingLeaders Accelerating Difference Programme Asia Global Leaders Programme and IMPACTprogramme for building specific develop leadership talent.

Pursuing commercial excellence

In 2020 GSK's Selling Excellence team partnered with the HR team to launch the GSK

Learning Warriors League for the commercial organisation to promote virtual learningfor capability building and engagement.

Apart from new initiatives to promote excellence your Company continued to invest inthe Future Leaders Programme Commercial Leadership Programme and the Pharma Supply ChainLeadership Programme wherein hires from premier B-schools undergo an extensiveexperiential training before taking up important roles such as First Line Sales Leader(FLSL). In 2020 with the objective of enhancing its brand awareness among potentialcampus hires your Company also launched a virtual case study competition across topB-schools.

Wellness and wellbeing

Committed to people wellbeing your Company expanded its offerings under thePartnership for Prevention (P4P) programme during the year by including two more vaccinesin the Flu category. Medical insurance benefits were reviewed as your Company includedadditional coverage designed specifically for COVID-19 such as home quarantine expenses.Your Company also introduced modular plans in health insurance giving options toemployees to increase their medical coverage. To help employees and their families buildresilience and cope with the COVID-19 related challenges it partnered with externalexperts for sessions on mental health under the Employee Assistance Programme (EAP) andactivities centered around physical health augmenting mental and emotional resiliencewellbeing and nutrition.

Employee relations

Your Company works benefit of its members and to voice their opinions and themselves.The Company believes to be an integral part of

Four unions based on

(North East West and South) represent the

Medical Business Associates (MBAs) in their respective locations. The union in the WestZone also represents employees of the Nashik manufacturing facility.

The management and the unions of Company are currently engaged in negotiations toarrive at a long-term wage and benefits settlement to be valid for a period of four years

Your Company is grateful to its unions for positive contributions and maintenance ofcordial industrial relations.

Prevention of sexual harassment at the workplace

Your Company has a policy for workplace safer in line with the provisions the SexualHarassment of Women at (Prevention Prohibition and Redressal) Act (India) and the rulesthereunder. Your has established Internal Committees (ICs) different zones andmanufacturing facilities address any kind of sexual harassment complaint. All the membersof these ICs trained to handle such complaints.

During the year your Company received SH complaints. One case has been after takingappropriate action following investigation while the remaining two currently underinvestigation.

The Company aims to further increase around prevention of sexual harassment and theworking of internal committees refresher e-learning modules and training programmes.

Environment health safety and sustainability

Your Company's Environment Health Safety and Sustainability (EHSS) strategy isembedded across its value chain. From sourcing of raw materials to the delivery ofproducts the EHSS unions practices conform to local laws as well as GSK's for the mutualprovidesglobal standards. them forums effectively represent these Your Company iscommitted to the reduction of unions its the environmental footprint from the productionof business and growth. antibiotics at its manufacturing facility at Nashik the and alsoresulting from operations of third-party selling area zones manufacturers by controllingthe release of antibiotic residues into the environment within the science-drivenrisk-based discharge limits. This is also in accordance with the AMR (antimicrobialresistance) Industry Alliance's Antibiotic Manufacturing Framework. Your Company is asignatory to the AMR Industry Alliance which is one of the largest private sectorcoalitions set up to provide sustainable solutions to curb AMR and wastewater dischargelimits.

Your Company continues to invest in the safety of its employees through multipleinitiatives. These include the global driver safety programme ‘Safe Driving: EveryJourney Counts' - for the safety of employees in the field. This is complemented withother initiatives such as the Virtual Risk Manager OnetoOne+ Mentor and of otherdriving programmes that are instituted to inculcate defensive driving skills. Your Companyremains committed to environmental sustainability and the safety of employees andpatients in line with locally applicable laws and to regulations. Your Company hascomplied with the Extended Producer Responsibility (EPR) well obligations and collected2070.52 MT of post-consumer plastic waste from the market in FY

2020-21 and disposed it in an environmentally three sustainable manner.

(h) Corporate Social Responsibility (CSR)

Your Company has a rich legacy of partnering with the communities in which it operates.Strong partnerships with these groups are critical to understanding the needs of thecommunities and formulate strategies accordingly to maximise their outreach and impact.

The focus of your Company's CSR efforts during the year was on impacting lifechanging differencesand lasting in human health by addressing the healthcare burdens ofaccessibility affordability and awareness. The Company touched the lives of over amillion people suffering from Lymphatic Filariasis (LF) through its flagship CSR project -Partnering India to Eliminate Lymphatic Filariasis.

Pursuant to the provisions of Section 135 of the Companies Act 2013 and the rulesmade thereunder your Company has constituted a CSR Board Committee to monitor its CSRprogrammes.

The CSR policy of your Company can be accessed on its website( media/911273/annual-csr-report-2020-21.pdf). A detailedreport on the CSR programmes undertaken during the year has been provided in Annexure‘A' of this Annual Report.

4. Directors

Mr. R. Krishnaswamy ceased to be a Director on the Board with effect from 27 January2021. The Board places on record its appreciation of the valuable services rendered by Mr.Krishnaswamy during his tenure on the Board. Mr. M. Dawson was appointed as AdditionalNon-Executive Director from 28 January 2021.

In terms of the provisions under Section 149 of the Companies Act 2013 the Board andShareholders have approved the appointment of all the existing Independent Directors viz.Mr. P.V. Bhide Mr. N. Kaviratne Mr. A. N. Roy and Mr. D. Sundaram for a second term offiveyears from 30 March 2020 and Dr. (Ms.) S. Maheshwari for a first term of five yearsfrom 18 May 2020.

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet thecriteria of Independence as provided in sub-section (6).

During the year ended 31 March 2021 eight Board and five Audit Committee Meetings wereheld the details of which are given in the Corporate Governance Report. The interveninggap between the meetings was within the period prescribed under the Companies Act 2013.

Remuneration policy and Board evaluation

In compliance with the provisions of the Companies Act 2013 and Regulation 27 of theListing Obligations & Disclosures Regulations (LODR) the Board of Directors on therecommendation of the Nomination & Remuneration Committee adopted a Policy onremuneration of Directors and Senior Management. The Remuneration Policy is stated in theCorporate Governance Report. Performance evaluation of the Board was carried out duringthe period under review. The details are given in the Corporate Governance Report.

Familiarisation programmes for Independent Directors

In compliance with the requirements of Regulations your Company has put in placefamiliarisation programme for the Independent Directors to familiarise them with theirrole and responsibility as Directors the working of Company the nature of the industryin operates its business model etc. The programme details are available on the Company's( shareholder-information/policies/).

5. Particulars of contracts and Related party transactions

In line with the requirements of the Companies Act 2013 and LODR your Company hasformulated a policy on Related Party Transactions. All related party transactions enteredduring the year were on an ‘arm's length' basis and were in the ‘ordinary courseof business'. There were no materially significant party transactions made with thePromoters Directors or Key Managerial Personnel which may have a potential conflict ofinterest of the Company at large. The Policy of related party transactions can be accessedon the company's website(

All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for Related Party Transactions on a quarterlybasis for transactions which are of repetitive nature and/or entered in the ordinarycourse of business and are at arm's length. All Related Party Transactions are subjectedto independent review by a reputed accounting firm to establish compliance with therequirements of Related Party Transactions under the Companies Act 2013 and LODR.

6. Directors' responsibility statement

Your Directors confirm:

(i) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanations relating to material departures if any;

(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on 31 March 2021 andof the profit of the Company for the year ended on that date;

(iii) that the Directors had taken properandsufficient care for the maintenance ofadequate accounting records in accordanceof their appointment by the Members with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (iv) that the Directorsof theMembers for the appointment have prepared the annual accounts on a going concern basis; ofthe members (v) that proper internal financial controls laid down by the Directors werefollowed by the Company and such internal financial controls are adequate and wereoperating effectively and

(vi) that proper systems to ensure compliance with the provisions of all applicablelaws have been devised and such systems were adequate and were operating effectively.

7. Annual return

In line with the requirement of the Companies (Amendment) Act 2017 effective from 31July 2018 the extract of annual return is no longer required to be part of the Board'sReport. However a copy of the Annual Return shall be placed on the Company's website( shareholder-information/annual-return/ ofremuneration). for

8. Corporate governance & Business sustainability report

Your Company is part of the GlaxoSmithKline plc group and conforms to norms ofCorporate Governance adopted by them. As a listed Company necessary measures are taken tocomply with the Listing Obligations & Disclosures Regulations 2015 (LODR) with theStock Exchanges. A report on Corporate Governance along with a certificate of compliancefrom the Auditors given in Annexure ‘B' forms a part of this Report. Further aBusiness Responsibility Report describing the initiatives taken by your Company from anEnvironmental Social and Governance perspective are given in Annexure ‘C' whichforms a part of this Annual Report.

9. Auditors

As per the provisions of section 139 of the Companies Act 2013 Deloitte Haskins andSells LLP Chartered Accountants were appointed as the Statutory Auditors of the Companyfor the period of five years at the 92nd Annual General Meeting held on 25 July2017 to hold office from the conclusion of the said Meeting till the conclusion of the 97thAnnual General Meeting to be held in 2022 on a remuneration to be determined by the Boardof Directors. Their appointment was subject to ratification of the Company at every AnnualGeneral Meeting. Pursuant to the amendments made to section 139 of the Companies Act 2013by the Companies (Amendment) Act 2017 effective from 7 May 2018 the requirement ofseeking ratification of the Statutory Auditors has been withdrawn from the statute. Inview of the above ratification at Annual General Meeting is not being sought.

Pursuant to the provisions of section 204 of the Act and the Rules made thereunderthe Company has appointed Parikh & Associates Practicing Company Secretaries toundertake Secretarial Audit of the Company. The Report of the Secretarial Auditor isannexed to the Board Report as Annexure 'D' which forms a part of this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee have appointed R. Nanabhoy & Co. the CostAccountants for conducting the audit of the cost accounting records maintained by theCompany for its Formulations for FY 2021-22. The Committee recommended ratification2020-21 to the Shareholders of the Company at the ensuing Annual General Meeting.

10 Transfer of equity shares unpaid/Unclaimed dividend to the Investor EducationProtection Fund (IEPF)

In line with the statutory requirements the Company has transferred to the credit ofthe Investor Education and Protection Fund set up by the Government of India the equityshares in respect of which dividend had remained unpaid/ unclaimed for a period of sevenconsecutive years within the timelines laid down by the Ministry of Corporate Affairs.Unpaid/unclaimed dividend for seven years or more has also been transferred to the IEPFpursuant to the requirements under the Act.

11 Compliance with secretarial standards

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India (SS1 andSS2) respectively relating to Meetings of the Board and its Committees which havemandatory application.

12. General

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated in section 134(3) M of the Companies Act 2013 and therules framed thereunder is attached herewith as Annexure 'E' which forms a part of thisReport. The disclosures pertaining to the remuneration and other details as requiredunder section 197(12) of the Companies Act 2013 and the rules made thereunder areenclosed asAnnexure 'F' which forms a part of this Report. Pursuant to section 129(3) ofthe Companies Act 2013 a statement in form "AOC-1" containing salientfeatures of the Financial Statements of the Subsidiary Company is attached.

Although the audited statements of accounts relating to the Company's Subsidiary are nolonger required to be attached to the Company's Annual Report the same is enclosed as andin way of better disclosure practice. The information relating to top ten employees interms of remuneration and employees who were in receipt of remuneration of not less than Rs.1.02 cores during the year or Rs. 8.5 lakhs per month during any part of the yearforms part of this report and will be provided to any shareholder on a written request tothe Company Secretary. In terms of Section 136 of the Act the said report will beavailable for inspection of the shareholders through electronic mode. The shareholders maywrite an email by mentioning "Request for Inspection" in thesubject of the email.

13. Acknowledgments

The Directors express their appreciation for the contribution made by the employees forremarkable agility and resilience throughout the year in unprecedented circumstancesincluding significant improvement in the operations of the Company and also for thesupport received from all other stakeholders including Shareholders doctors medicalprofessionals customers suppliers business partners and the government.

The Board and the Management of your Company appreciative of the support being receivedfrom GSK plc.

On behalf of the Board of Directors

Ms. R. S. Karnad


Mumbai 18 May 2021