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Novartis India Ltd.

BSE: 500672 Sector: Health care
NSE: NOVARTIND ISIN Code: INE234A01025
BSE 00:00 | 26 May 567.10 11.45
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NSE 05:30 | 01 Jan Novartis India Ltd
OPEN 568.55
PREVIOUS CLOSE 555.65
VOLUME 5980
52-Week high 780.00
52-Week low 420.05
P/E 61.31
Mkt Cap.(Rs cr) 1,401
Buy Price 567.10
Buy Qty 27.00
Sell Price 567.00
Sell Qty 3.00
OPEN 568.55
CLOSE 555.65
VOLUME 5980
52-Week high 780.00
52-Week low 420.05
P/E 61.31
Mkt Cap.(Rs cr) 1,401
Buy Price 567.10
Buy Qty 27.00
Sell Price 567.00
Sell Qty 3.00

Novartis India Ltd. (NOVARTIND) - Director Report

Company director report

Your Directors are pleased to present the Annual Report and the Audited Accounts forthe financial year ended March 31 2019.

Summary of the Financial Results
(` in million)
2018-19 2017-18
Revenue from Operations 4906.8 5638.9
Total Income 5689.4 7357.2
Profit before Tax 857.7 1575.2
Profit for the year 517.7 783.6
Other Comprehensive Income for the year 16.2 12.0
Balance brought forward from previous year 7238.4 8336.2
Available for appropriation
The Directors have made the following appropriations:
Dividend 246.9 281.4
Dividend distribution tax 50.8 57.3
Buy-back of equity shares 0 1537.4
Amount transferred to Capital Redemption Reserve 0 17.3
Carry forward 7474.6 7238.4

Dividend

The Board has recommended payment of dividend at ` 10 per equity share of ` 5 each forthe financial year 2018-19. The said dividend if approved by the members at the AnnualGeneral Meeting ("AGM") will result in a cash outflow of ` 297.7 millionincluding dividend tax. The Board continues to support a steady dividend policy and therecommended dividend is in accordance with the Dividend Distribution Policy of theCompany. A copy of the said Policy is available on the website of the Company atwww.novartis.in

Management Discussion and Analysis

For the year under review the business operations of the Company comprisesPharmaceuticals. a. Economy Industry and developments

India's economic growth in terms of GDP for Financial Year 2018-19 has averaged around6.8 percent primarily due a decline in the growth of private consumption tepid increasein fixed investment slowdown of growth in agriculture and muted exports. Howeverharmonization of structural reforms such as the Goods and Services Tax (GST) and bankrecapitalization controlled inflation rate cuts in repo rate and easing of bankliquidity have attempted to provide a fillip to the economic growth. According to theWorld Bank India will continue to be the fastest growing economy in the world. A newGovernment at the centre is expected to continue to prioritize welfare programs such asthose aimed at providing support to farmers improving housing conditions and expandingaccess to healthcare. Inspite of being the fastest growing major economy India'shealthcare system currently remains inadequate to provide care to a population of 1.3billion especially in rural areas. While the Government has set ambitious targets underthe National Health Policy (NHP) for improving healthcare standards the progress isexpected to be gradual and may take years for significant headway to be achieved. The NHP2017 calls for an increase in the government's contribution to healthcare spending to 2.5%of GDP by 2025 which is encouraging to note.

The Pradhan Mantri Jan Arogya Yojana (PMJAY) the national health protection schemeunder ‘Ayushman Bharat' was launched in September 2018. Once fully implementedPMJAY is expected to provide health insurance coverage for secondary and tertiary care to500 million poor and vulnerable people thereby expanding healthcare reach of the country.The proposed e-pharmacy regulation if implemented properly could boost growth for theindustry by streamlining the supply chain. The Indian Pharma Market ("IPM") isforecast to grow at a Compounded Annual Growth Rate (CAGR) of 10.2%* (+/- 3.0%) over thenext four years to reach ` 2255.5 billion by 2023. However it continues to be a highlyfragmented and a competitive market with a large number of players spread acrosstherapeutic segments.

b. Performance

Revenue from operations for the year ended March 31 2019 was ` 4906.8 millionrepresenting a decrease of 13.0% over the previous year. Profit before tax for the yearstood at ` 857.7 million representing a decrease of 45.5% over the previous year. This ismainly on account of extraordinary interest income of

` 981.3 million received on income tax refund of Assessment Year (AY) 1995-96 duringthe financial year 2017-18.

c. Segment-wise operational performance

The Pharmaceuticals business registered Net Revenue from Operations of ` 4906.8million representing a decrease of 13.0% over the previous year. Some of the factors thatimpacted results for the year under review include issuance of notices by the DrugsLicensing Authority Daman to a supplier of Company's product (viz. Voveran 1ml) andconsequently the Company suspending the sale of that product in the market. The supplierhas contested the notices and presently the matter is sub judice before the Hon'ble HighCourt of Delhi. However with the launch of Voveran maxxgel™ and a new variant ofVoveran 1ml the Company expects to further strengthen its position by serving morepatients. In addition to the above supply constraints pertaining to a few productssourced from Contract manufacturing also impacted the Company's revenue during year underreview. To mitigate the impact of decline in revenue cost containment measures wereundertaken by the Company during the year to protect its operating profits. The followingbrands hold key positions in major therapeutic areas such as:

Therapeutic Area Product
Central Nervous System Tegrital
Pain & Inflammation Voveran
Transplantation/Immunology Sandimmun Neoral

 

d. Key Financial Indicators
Particulars 2018-19 2017-18
Operating profit margin (%) 1.9 –1.6
Net profit margin (%) 10.6 13.9
Debtors turnover ratio 11.0 13.3
Current ratio 4.4 2.9
Return on Net Worth 6.8 10.7
Inventory turnover ratio 8.4 7.8
Interest coverage ratio NA NA
Debt equity ratio NA NA

* Source: IQVIA™ MARKET PROGNOSIS 2019-2023 Asia/Australia – India. PublishedMarch 2019

Reasons for change compared to the previous financial year in some of the key financialratios is as follows:

Operating profit margin

Operating profit margin is a profitability or performance ratio used to calculate thepercentage of profit a company produces from its operations. It is calculated by dividingthe operating earnings before interest and tax by turnover. The Company's efforts to loweremployee material and other costs during the Financial Year (FY) 2018-19 has resulted inimprovement of operating profit margin as compared to FY 2017-18.

Net profit margin

The net profit margin is equal to how much net income or profit is generated as apercentage of revenue. It is calculated by dividing profit for the year by turnover. Netprofit margin in FY 2018-19 is lower compared to FY 2017-18 as one-off Interest income onIncome Tax refund for AY 1995-96 of INR 981.3 million was received in FY 2017-18.

Debtors turnover ratio

It is calculated by dividing turnover by average trade receivables to quantify acompany's effectiveness in collecting its receivables. Since the Company had higherdebtors as at March 31 2019 it led to lower turnover ratio.

Current ratio

The Current Ratio is a liquidity ratio that measures a company's ability to payshort-term obligations or those due within one year. It is calculated by dividing thecurrent assets by current liabilities. Since the Company had lower ‘otherfinancial liabilities' as at March 31 2019 it led to higher current ratio.

Return on Net Worth

Return on Net Worth is a measure of profitability of a company expressed in percentage.It is calculated by dividing profit for the year by total equity. Return on net worth inFY 2018-19 is lower compared to FY 2017-18 as one-off Interest income on Income Taxrefund pertaining to AY 1995-96 of INR 981.3 was received in FY 2017-18.

Inventory turnover ratio

Inventory turnover is the number of times a company sells and replaces its inventoryduring a period. It is calculated by dividing turnover by average inventory. Lowerinventory in FY 2018-19 led to higher turnover ratio.

Interest coverage ratio

The interest coverage ratio measures how many times a company can cover its currentinterest payment with its available earnings. It is calculated by dividing profit beforeinterest and tax by finance cost. The Company does not have any debts as at March31 2019 and March 31 2018 and hence this ratio is not given in the table.

Debt equity ratio

The ratio is used to evaluate a company's financial leverage. It is a measure of thedegree to which a Company is financing its operations through debt versus wholly ownedfunds. The Company does not have any debts as at March 31 2019 and March 31 2018 andhence this ratio is not given in the table.

e. Risks

Healthcare insurance in India is yet to make a positive impact on affordability.(Control of prices of certain drugs under the DPCO continues to affect the profitabilityof the pharmaceutical industry). Revision of the National List of Essential Medicines(NLEM) could result in expansion of price controls under the DPCO which would put furtherdownward pressure on drug prices.

The Indian Pharma Market (IPM) is dominated by generic medicines and these drugsaccount for nearly 75% of the pharma industry. Prescription by generic names could alsohave an impact on pharma companies and it could necessitate a change in the Company'spromotional strategies.

Any proposal to cap trade margins on non-scheduled products at 10% for distribution and20% for retail pharmacy would significantly impact the business model for trade generics.

Novartis AG which is the Company's holding company owns directly or indirectlyseveral companies in Novartis Group worldwide including various brands and patents.Therefore any merger acquisition divestment or restructuring by Novartis AG or itssubsidiaries would have an influence on the Company's operations in India as well.

f. Outlook

A stable new Government at the centre is likely to continue to prioritise welfareprograms such as those aimed at providing support to farmers improving housingconditions and expanding access to healthcare. However the effectiveness of such programsmay be undermined by problems in their implementation as well as funding shortfalls.

The NHP 2017 calls for an increase in the Government's contribution to healthcarespending to 2.5% of GDP by 2025; implementation of PMJAY should help achieve thisobjective but the target is unlikely to be realized by 2025.

Inflation is projected to rise somewhat above the midpoint of the Reserve Bank ofIndia's target range of 2 to 6 per cent mainly owing to energy and food prices. Howeverprivate consumption is projected to remain robust and investment growth is expected tocontinue as the benefits of new policy reforms begin to materialize.

While the overall outlook for the economy looks promising it is also dependent uponmany macro-economic factors like increasing crude oil prices commodity inflationpotential disruptions due to global events problem of non-performing assets a belownormal monsoon which could have a dampening effect on GDP growth in future.

g. Internal control systems and their adequacy

The Company maintains appropriate systems of internal control including monitoringprocedures to ensure that all assets are safeguarded against loss from unauthorized useor disposal. Company policies guidelines and procedures provide for adequate checks andbalances and are meant to ensure that all transactions are authorized recorded andreported correctly.

The Head of Internal Audit together with external audit consultants reviews theeffectiveness and efficiency of these systems and procedures to ensure that all assets areprotected against loss and that the financial and operational information is accurate andcomplete in all respects. The Audit Committee approves and reviews audit plans for theyear based on internal risk assessment. Audits are conducted on an ongoing basis andsignificant deviations are brought to the notice of the Audit Committee of the Board ofDirectors following which corrective action is recommended for implementation. All thesemeasures facilitate timely detection of any irregularities and early remedial steps.

During the year the Company conducted a detailed review of its internal controlsystems evaluated the internal financial control systems with the Audit Committee anddiscussed relevant issues with internal and statutory auditors. Based on therecommendations of the Audit Committee the Board has stated in its responsibilitystatement that the Company followed proper internal financial controls and that suchinternal financial controls are adequate and were operating effectively.

h. Vigil Mechanism

The Company has established a Vigil Mechanism and Whistleblower policy that enables theDirectors and employees to report genuine concerns. The said Policy provides for (a)adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b)direct access to the Chairperson of the Audit Committee of the Board of the Company inappropriate or exceptional cases. Details of the Vigil Mechanism and Whistleblower policyare made available on the Company's website www.novartis.in.

i. Personnel

Industrial Relations scenario continued to be cordial. The Company regards itsemployees as a great asset and accords high priority to training and development ofemployees.

Number of employees as on March 31 2019 was 581.

The information required pursuant to Section 197 of the Companies Act 2013 ("theAct") read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to themembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AGM. Ifany member is interested in obtaining a copy thereof such member may write to the CompanySecretary & Compliance Officer of the Company in this regard.

Corporate Social Responsibility

The Company continues to support various initiatives in the areas of health educationand environment. The CSR Policy adopted by the Board of Directors is available on theCompany's website www.novartis.in.

Health: India has around 60% of the world's leprosy caseload and leprosy continuesto be an area of focus for the Company's CSR work in India. The Leprosy Post ExposureProphylaxis (LPEP) project was launched in the union territory of Dadra & Nagar Haveliin March 2015 and continued during the financial year under review. Refresher training wasconducted for 3 research assistants 1 project supervisor 17 medical officers 57PHC staff 134 auxiliary nurse midwives (ANMs) 300 accredited social health activists(ASHAs) from general healthcare who were trained in leprosy as well as in the LPEPproject. 42333 people were screened for leprosy with a prophylactic dose for preventionof transmission of leprosy being given to 30295 eligible persons. 42 new cases of leprosywere detected.

The Company also supported a non-profit organization in Telangana to set up anintegrated health management system which will result in digitization of over 22000leprosy records aiming to eventually drive early diagnosis of leprosy.

Novartis India continued its health awareness initiative through its Healthy Familiesprogram Arogya Parivar reaching out to more than 7.8 million individuals across ruralIndia and conducted 11254 health camps in the year under review.

The Company also supported a comprehensive programme centered on reproductive healthawareness for underprivileged and vulnerable people including adolescents towardsimproving their health and well-being. The intervention will be implemented over a periodof four months in Mumbai and Thane District. A strong player in the oncology segment theCompany furthered its commitment to cancer care by supporting a"home-away-from-home" in Vellore Tamil Nadu which caters to less privilegedfamilies from outside the city.

Novartis supported disaster relief in Kerala by providing painkillers for personsaffected by the unprecedented floods in the area.

Education: The poor in India continue to be heavily impacted by lack of educationwith children not being sent to school so that they can contribute to the family income ordropping out of school. The mid-day meal program when run effectively has helped bringand keep children in school. Recognizing this as an important role in education theCompany made significant investments in this area to provide less privileged children witha nutritious meal. More than 5500 children in Mumbai are beneficiaries under thisprogramme.

The Company supports the Network Support Team (NST) of an NGO that works towards theeducation of the underprivileged. NST is an overarching team that supports all the schoolsin this NGOs network. The team helps schools develop goals for the year assists schoolleaders in identifying professional development needs and conducts teacher workshops basedon the needs of the network of schools. These workshops act as a platform for sharing bestpractices and different things happening across the network of schools. They also work oncurriculum development in these schools.

Environment: The city of Mumbai is starved of open green spaces and the Company hascontributed in a positive way by supporting the upkeep of two beautiful gardens in Mumbai.

The Company continues to commemorate Community Partnership Week ("CPW") eachyear encouraging employees to work on causes close to their heart. CPW continues to growin stature with a rising number of associates participating in a broad range of activitiescovering the less fortunate.

A pan India activity that has shown rising numbers is the blood donation drive forchildren suffering from thalassemia a hereditary blood disorder where the body makes anabnormal form of hemoglobin the protein in red blood cells that carry oxygen. They needto get blood every two weeks.

The Annual Report on Corporate Social Responsibility Activities is annexed herewith as

Annexure A.

Related Party Transactions

All Related Party Transactions entered into during the financial year were on arm'slength basis and in the ordinary course of business. All Related Party Transactions wereplaced before the Audit Committee of the Board of Directors for their approval. The AuditCommittee has granted omnibus approval for Related Party Transactions as per theprovisions and restrictions contained in the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. ("Listing Regulations").

The Company has formulated a policy on materiality of Related Party Transactions andalso on dealing with Related Party Transactions. The policy is available on the Company'swebsite www.novartis.in.

Pursuant to Clause(h) of sub-section(3) of Section 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules 2014 the particulars of contracts/arrangements entered intoby the Company with related parties referred to in sub-section(1) of Section 188 of theAct including certain arm's length transactions under third proviso thereto are requiredto be disclosed in Form AOC–2. Form AOC–2 envisages disclosure of materialcontracts or arrangement or transactions on arm's length basis.

Details of the material Related Party Transactions in financial year 2018-19 as perthe Policy on dealing with Related Parties adopted by the Company are disclosed inAnnexure B.

The transactions disclosed in the Annexure relate to material Related PartyTransactions with Novartis Pharma AG for purchase transfer or receipt of products goodsactive pharmaceutical ingredients materials services other obligations as approved bymembers under erstwhile Clause 49(VII)(E) of the listing agreement at the 67th AnnualGeneral Meeting of the Company held on July 23 2015.

Risk Management

The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The Policy provides for constitution of a RiskManagement Committee. The Committee has created a Risk Register and works towards reviewand identification of internal and external risks and implementation of risk mitigationsteps. The Company provides updates on risk management to the Audit Committee of the Boardof Directors of the Company on a regular basis.

Fixed Deposits

The Company has not accepted deposits from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the rules framed thereunder.

Particulars of Loans Guarantees or Investments

As on March 31 2019 there were no outstanding loans or guarantees covered under theprovisions of Section 186 of the Act. The Company has certain unquoted investments in co-operativehousing societies for premises owned by the Company. The details of changes in the LoansGuarantees and Investments covered under the provisions of Section 186 of the Act aregiven in the notes to the Financial Statements.

Board of Directors

The Company has received declarations from all Independent Directors under Section149(7) of the Act that they meet the criteria of independence as provided under Section149(6) of the Act and Regulation 16(1)(b) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (‘the ListingRegulations'). In the opinion of the Board they fulfil the conditions of independence asspecified in the Act and the Listing Regulations and are independent of the management.

During FY 2018-19 the members of the Company through a Special Resolution under thePostal Ballot dated February 4 2019 approved the re-appointment of Mr. Jai Hiremath andDr. Rajendra Nath Mehrotra as Independent Directors of the Company not liable to retireby rotation to hold office for an additional term of five years and one year respectivelyon the Board effective from April 1 2019.

Mr. Jawed Zia resigned from the Board as Vice Chairman & Managing Director of theCompany with effect from May 31 2018 and in his place Mr. Milan Paleja was appointed asVice Chairman & Managing Director effective June 1 2018. Mr. Paleja resigned from theoffice effective May 31 2019.

The Board of Directors based on the recommendation of the Nomination &Remuneration Committee appointed Mr. Sanjay Murdeshwar as Vice Chairman & ManagingDirector of the Company with effect from June 15 2019 subject to the approval of membersat this AGM and approval of the Central Government if any.

Ms. Monaz Noble was appointed as Whole Time Director of the Company w.e.f. June 132016. Consequent to her recent elevation within the Novartis Group in India (Viz.Novartis Healthcare Private Limited) she has been functioning on the Board of the Companyin a Non-Executive and Non-Independent capacity effective June 1 2019 and continues tocontribute to the stability and growth of the Company. Ms. Noble retires at this AGM andbeing eligible offers herself for re-appointment.

Necessary resolutions for the appointment/re-appointment of Directors together withdetails for appointment/re-appointment have been included in the Notice convening theensuing AGM. Appropriate details on Board and Committee composition and other CorporateGovernance matters are elaborated in the Report on Corporate Governance which forms partof this Annual Report.

Familiarization programme for Independent Directors

The Company keeps its Directors informed of the activities of the Company itsmanagement and operations and provides an overall industry perspective on issues beingfaced by the industry including changes in regulatory landscape in a proactive manner.Details of familiarization provided to the Directors of the Company are available on theCompany's website www.novartis.in.

Auditors

Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. Deloitte Haskins & Sells LLP (FirmRegistration No. 117366W/W-100018) were appointed as Statutory Auditors of theCompany for a second term of five years to hold office from the conclusion of the 69thAnnual General Meeting till the conclusion of the 74th Annual General Meeting of theCompany.

The requirement of seeking ratification of the members for continuance of StatutoryAuditors appointment has been withdrawn consequent to changes in the Companies (Amendment)Act 2017 w.e.f. May 7 2018. Hence the resolution seeking ratification of the membersfor their appointment is not being placed at the ensuing Annual General Meeting.

The Statutory Auditor has confirmed their eligibility and submitted the certificate inwriting that they are not disqualified to hold the office of Statutory Auditor.

The Auditors' Report to the Members on the Accounts of the Company for the year endedMarch 31 2019 does not contain any qualification reservation or adverse remark. Duringthe year 2019 the Auditors had not reported any matter under Section 143(12) of the Act;therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.

Statutory Audit and other fees paid to Statutory Auditors:

During FY 2018-19 the total fees for the statutory audit and other services renderedby the Statutory Auditors are given below:

Auditors' Remuneration ` in million
2018-19 2017-18
Audit Fees 5.6 5.5
Tax Audit Fees 1.3 1.2
Other Services 2.1 *2.8
Reimbursement of expenses 0.3 0.1
Total 9.3 9.6

* Includes ` 0.3 million being expenses pertaining to buy-back of equity shares whichhas been debited to Retained Earnings [Refer Note 12(b)]

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board has appointed Mr. K. G. Saraffrom Saraf & Associates Practicing Company Secretary for conducting secretarial auditof the Company for the Financial Year 2018-19.

The Secretarial Audit Report is annexed herewith as Annexure C. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.

During the Financial Year 2018-19 the Company has complied with Secretarial Standardon Meetings of the Board of Directors (SS–1) and General Meetings (SS–2) issuedby the Institute of Company Secretaries of India.

Annual Secretarial Compliance Report

The Company has undertaken an examination of all applicable compliances as perSecurities and Exchange Board of India Regulations and Circulars/Guidelines issuedthereunder for the Financial Year 2018-19.

The Annual Secretarial Compliance Report as issued by the Practising Company Secretaryhas been submitted to the stock exchanges within 60 days of the end of the FinancialYear. The Report does not contain any adverse remark.

Energy Technology Absorption and Foreign Exchange

Information required under Section 134(3)(m) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 with respect to conservation of energy technologyabsorption and foreign exchange earnings/outgo is included in Annexure D.

Directors' Responsibility Statement

Pursuant to Section 134 of the Act the Directors state that:

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

(b) Appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 31 2019 and of theprofit and loss of the Company for the year ended March 31 2019

(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) The annual accounts have been prepared on a going concern basis;

(e) Proper internal financial controls were followed by the Company and such internalfinancial controls are adequate and were operating effectively;

(f) Proper systems are devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company is committed to good corporate governance and is in compliance with theprovisions on corporate governance specified in the Listing Regulations and Novartis Groupcorporate governance norms. A certificate of compliance from Dr. K. R. ChandratrePracticing Company Secretary and the report on Corporate Governance form part of thisDirectors' Report.

Prevention of Sexual Harassment Policy

The Company has in place a Prevention of Sexual Harassment policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Committee has been set up to redress complaintsreceived regarding sexual harassment. All persons whether employed as permanentcontractual temporary or trainees are covered under this policy.

During the Financial Year 2018-19 one complaint was received by the Company related tosexual harassment.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 are placedon the website of the Company at www.novartis.in.

Acknowledgement

The Board appreciates and places on record the contribution made by all stakeholdersparticularly employees shareholders customers the medical fraternity and all businesspartners during the year under review and acknowledges the support received from theparent Company Novartis AG.

Cautionary Note

The statements forming part of the Directors' Report may contain certain forwardlooking remarks within the meaning of applicable securities laws and regulations. Manyfactors could cause the actual results performances or achievements of the Company to bematerially different from any future results performances or achievements that may beexpressed or implied by such forward looking statements.

On behalf of the Board of Directors

CHRISTOPHER SNOOK

Chairman

June 15 2019