DirectorsThe Directors have pleasure in submitting their Report for the year ended 31stDecember 2009
1. Results & Dividend for the year ended 31st December 2009
| Year ended 31st December | Year ended 31st December |
| 2009 | 2008 |
| Rs. in Lakhs | Rs. in Lakhs |
| SALES (Gross) . . | 1912,77.03 | 1751,56.06 |
| Less: Excise duty on Sales | 42,00.31 | 91,15.53 |
| NET SALES . . | 1870,76.72 | 1660,40.53 |
| PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS | 758,48.20 | 679,89.76 |
| Less: Provision for Taxation | 253,58.88 | 231,53.94 |
| PROFIT AFTER TAXATION AND BEFORE | | |
| EXCEPTIONAL ITEMS | 504,89.32 | 448,35.82 |
| Exceptional Items (Net of Tax) | 7,39.77 | 128,21.08 |
| NET PROFIT AFTER TAX | 512,29.09 | 576,56.90 |
| Add: Balance brought forward from the previous year | 882,40.80 | 759,88.90 |
| Amount available for disposal | 1394,69.89 | 1336,45.80 |
| APPROPRIATIONS : | | |
| General Reserve | 51,22.91 | 57,65.69 |
| Equity Dividend (including special additional Dividend in the previous year) | 254,10.90 | 338,81.20 |
| Distribution Tax on Dividend | 40,12.67 | 57,58.11 |
| Balance carried forward | 1049,23.41 | 882,40.80 |
The growth in Net Sales (net of Excise duty) was 12.7% and in Profit after Tax andbefore Exceptional Items was 12.6% for the year ended 31st December 2009. Thegrowth in Gross Sales was impacted on account of lower selling prices as a result of thebenefit of excise duty reduction being passed on to the consumer.
2. Dividend
The Directors recommend a Dividend of Rs.30 per Equity Share for the year (previousyear: Rs.22 per Equity Share and a special additional Dividend of Rs.18 per Equity Share).If approved by the Shareholders at the Annual General Meeting, the Dividend will absorbRs.254 crores. The Dividend Distribution Tax borne by the Company will amount to Rs.40crores.
3. Management Discussion and Analysis
(a) Your Company maintained its leadership position in the Pharmaceuticals market withNet Sales registering a growth of 12.7%. Profit Before Tax and Exceptional Items grew by11.6%.
Sales performance in all of the Company’s diversified business units i.e. in themass market and mass specialty segments, dermatologicals, oncology, critical care andvaccines helped to support sales growth. Despite significant investments in salespromotion and field force expansion, Profit before investment income and tax wasmaintained at 35% of Net Sales.
Cash generation from operations was favourable, driven by the strong businessperformance and management of working capital. The Company’s investment portfoliocontinues to remain deployed largely in Bank Deposits.
(b) Pharmaceuticals Business Performance, Opportunities and Outlook
Your Company continues to enjoy a leadership position in the categories in which itsproducts are represented. The growth of your Company was marginally better than the growthof the Indian Pharmaceuticals market.
The Mass Markets activity comprising mainly of acute care products grew faster than themarket in their represented segments: the rural marketing initiative has picked upmomentum. Calpol, an anti-pyretic drug, is now the largest prescribed product in theindustry (Source: CMarc - Dec’09) while other products such as Parit, Vozet, CobadexCZS, Neosporin and Zentel have gained market share in their represented categories.
The Mass Specialty team continued to record good growth. Augmentin, currently thelargest selling antibiotic brand in the industry, Arixtra, Zobactin, Supacef and Eltroxinare major growth drivers for this team. Arixtra is the 6th largest brand in theanti-thrombotic market. The focus on Hospital and Tender businesses will help furthergrowth opportunities in these specialities.
The Company’s chronic care portfolio includes the Dermatology, Oncology,Cardiovascular, Respiratory and Diabetes segments. Your Company is currently the leader inthe Dermatology category with 14% market share and key products such as Betnovate,Zovirax, Zimig and Tenovate are consistently maintaining a leadership position in theirrespective categories. In Oncology, your Company has supported approximately 400 patientswith the drug Tykerb. Lanoxin has consistently maintained a leadership position and launchof Benitec makes the Company’s foray in cardiovascular therapy. In diabetes care,Windia is the leader in the Rosiglitazone segment. With the acquisition of distributionrights for the Stiefel (a global dermatologicals company) range of products in India,plans are in hand for market expansion in cosmetic dermatology therapies like acne, sunprotection, emollients and moisturizers.
The Vaccines business continued to perform well in the current year. Rotarix, a vaccinefor rotaviral diarrhoea is making significant strides. Cervarix, a vaccine for preventionof cervical cancer, was launched during the year. Your Company expects to introduce newerand sophisticated vaccines which will help increase market penetration.
New products launched during the year included Benitec A (Olmesatan in combination withAmilodipine) in Cardiology, Dermocalm (Calamine lotion) in Dermatology, Ventorlin CFC freeinhaler (Salbutamol) in Respiratory and Esblanem (Meropenem) in Antibiotic segments.
Your Company continued the search for new Business Development opportunities in highgrowth therapeutic areas like Cardiology, Diabetes and Oncology and in therapeutic areasin which your Company has well established presence like Dermatology, Gynecology,Antibiotics and Gastroenterology. Going forward, your Company intends to enter into highgrowth segments such as CNS (Central Nervous System).
Exports recorded a sales turnover of Rs.71.50 crores comprising both Bulk Drugs andFormulations. Exports of bulk drugs were to major markets like Japan, Mexico, France,Indonesia, Jordan, U.K. and Germany.
(c) Risk, Concerns and Threats
As expected, India has been relatively insulated from the global recession, without anysignificant impact on the growth of the pharmaceutical industry. The industry growth islargely driven by chronic disease segments viz. cardiovascular, diabetes, asthma, cancer,and largely influenced by changing lifestyles. There are signs that health awareness hasincreased due to higher disposable incomes, urbanization and greater health insurancecoverage, which could improve further with acceleration in Government spend on healthcareinfrastructure. The adoption of intellectual property rights has encouraged innovation.The industry continues to remain under price control; the scope and coverage of theGovernment’s new pharmaceuticals policy cannot be ascertained, since it is pendingreview by the Government and remains an area of uncertainity for the pharmaceuticalindustry. It is hoped that Government will consider several representations made byindustry associations in framing the new policy. Data Exclusivity/Data Protection remainconcern area for the industry.
(d) Research & Development and Regulatory Matters
GlaxoSmithKline continues to be committed to research and development of medicines thatwill improve the quality of life of people around the world and that truly make adifference to patients. The Clinical Operations group in India, which conducts clinicalstudies across a number of disease areas ranging from Cancer, Coronary Heart Diseaseincluding acute coronary syndrome, Diabetes, Chronic Liver Disease and Hepatitis C,supports this effort.
Last year, your Company conducted 18 clinical trials, of which 7 were new studiesinitiated in 2009. In all, over 800 patients participated. The therapeutic area focus for2009 has been Oncology and Cardiovascular diseases. Your Company has so far trainedclinical trial investigators in over 131 hospitals / institutes across India. The qualityof work continues to be of a very high order, evidenced by a number of successful internalcompliance audits as well as US FDA inspections at two of our investigational sites.
During the year under review, in order to support the launch of new drugs that wouldbenefit and improve the quality of life of Indian patients suffering from variousdiseases, your Company submitted 7 NDAs (New Drug Applications) for GlaxoSmithKlineinnovator and in-licensed products and 2 INDs (Investigations New Drug Applications) tothe CDSCO (Central Drugs Standard Control Organization), Ministry of Health and FamilyWelfare, Government of India. Your Company has received approval for 3 NDAs and 1 IND fromCDSCO which paves the way for speedy introduction of new drugs. Additionally, to supportthe R&D efforts of GlaxoSmithKline, your Company submitted 3 global Clinical Trialapplications to CDSCO, and was granted approval to conduct these studies in the Indianpopulation through the Clinical Operations group in India.
Efforts towards a speedy review and approval by regulatory authorities for some ofthese products, particularly a calcium supplement, micafungin, retapamulin and a newindication for Carzec help achieve early access to new and innovative therapeutic optionsto patients in the country. The Medical Affairs team is adequately resourced to play apivotal role in communicating cutting edge scientific information to internal and externalstakeholders.
(e) Internal Control Framework
Your Company conducts its business with integrity and high standards of ethicalbehavior, and in compliance with the laws and regulations that govern its business. YourCompany has a well established framework of internal controls in operation, includingsuitable monitoring procedures and self-assessment exercises. In addition to externalaudit, the financial and operating controls of your Company at various locations arereviewed by the Internal Auditors, who report their findings to the Audit Committee of theBoard. Compliance with laws and regulations is also monitored.
Your Company’s Code of Conduct sets out the fundamental standards to be followedby employees in their everyday actions. In accordance with the Code of Conduct, andStandards associated with the Code of Conduct, employees are required to become familiarwith the legal requirements, policies and procedures applicable to their areas ofoperation, avoid conflicts of interest and are tasked with upward reporting of allunethical and illegal conduct. All employees are committed to the principle of performancewith integrity and ensuring that activities comply with all applicable laws.
Additionally, Managers are required to certify on an annual basis whether there havebeen any transactions which are fraudulent, illegal or violative of the Code of Conduct.Strong oversight and self monitoring policies and procedures demonstrate yourCompany’s commitment to the highest standards of integrity.
(f) Human Resources
With the increasing importance of Human Resources, emphasis has been laid on capabilitybuilding and towards enhancing the effectiveness of specialised teams. StructuredManagement Trainee schemes have been set up/revamped to support the different functions.Your Company’s employees have played a key role in contributing to the growth andmaintaining its status as one of the most reputed companies in India and more specificallyin the pharmaceuticals industry.
In reaching out to its employees, the Company has also launched a Wellness and Wellbeing Program, a recognition scheme called ‘AAA award’ (Acknowledge, Appreciateand Award) to recognize employees who have made good contributions as well as anEmpowerment Program for employees to contribute their ideas through small groupactivities. Talent management continues to be an important area for your Company and keytalent amongst the first line managers attended a three Module Leadership and Developmentprogram in collaboration with the SP Jain Institute of Management. Other employees wereencouraged to avail of an educational assistance policy so as to encourage a learningculture.
Your Company has maintained an amicable relationship with its Unions. During the courseof the year, long term settlements have been signed at the two manufacturing sites, Thaneand Nashik. Long term settlements were also signed with the Unions representing the fieldsales force.
Sales training supports the delivering of quality communication to the medicalfraternity. A ‘Brand Calling Card’ prompts Medical Representatives ondifferentiating their Brand communication to Doctors. This interactive detailing also hasa bank of FAQs, Rebuttals, Clinical Papers and other Pathology-Product-Promotionliterature for training. A new Development Navigator and Field Coaching Tool enablesPerformance Tracking and Continuous Improvement from the sales teams.
Your Company had staff strength of 4006 employees as on 31st December, 2009 compared to3722 employees at the end of the previous year. The additional headcount is on account ofnew initiatives in the Field to extend our reach.
(g) Procurement
To meet the challenges in procurement which surfaced in 2008, strategic contractshelped in capitalizing on the opportunities in key raw material categories. This hasensured procurement efficiency and assurance of supply. Focus on risk based sourcingmanagement received a thrust with the launch of advance procurement initiatives aimed atbuilding capability of vendors. Supplier Quality Management, through a dedicated teamlaunched this year, aims at ensuring best quality of all our ingredients by end to endquality management at vendors’ sites. A vendor assessment tool specifically aimed atmeasuring capability and capacity of vendors was developed and deployed.
Sourcing strategies were developed for spend optimization in the area of marketingpromotional support items, promotional printing, air travel and events management.
(h) Manufacturing
Your Company’s Nashik site commenced manufacture and supply of Albendazole tabletsto WHO for the Lymphatic Filriasis eradication programme. Thane site continued to supplyBetamethasone and its derivatives to highly regulated markets. Upgradation at Nashik sitehas been undertaken resulting in significant increase in productivity. There wasconsiderable focus on improving Environment, Health and Safety and a number of activitieshave been undertaken at both the Nashik and Thane sites during the year.
(i) Information Technology (IT) & Supply Chain
As a global initiative to bring down cost and reinvest for further improvements intechnology, the IT function has been restructured globally to form IT demand (businessfacing) and IT supply (technology delivery) functions. The transition to the new model waswell planned and executed, with no adverse impact on the business.
A mobile phone based Field activity reporting initiative was successfully pilotedacross two cities. Another major IT initiative, aimed at risk mitigation and control, wassuccessfully completed during the year. IT enabled external facing web applications werereviewed and the identified risks were mitigated through a well coordinated plan.
In a goods and services tax regime, a Hub and Spoke initiative is being piloted in thedistribution network. New ways of working were put in place for better networking ofsupply sites, both local and global, using global GSK systems and resources to ensure anuninterrupted supply.
(j) Corporate Social Responsibility
During the year, your Company undertook several community development projects bycontinuing to make a positive and significant contribution to the society.
Gramin Arogya Vikas Sanstha (GAVS), the Trust established and supported by the Companycontinues to operate in predominantly tribal and remote villages around Nashik. TheTrust’s Mobile Clinic operates in these remote regions covering a distance of over160 kms each day, visiting around 35 clusters of villages in rotation. GAVS during theyear has been successful in reaching out to over 40000 tribal people as direct andindirect beneficiaries, covering six blocks of Peth Taluka. Three Medical centres locatedin the pre-dominantly remote villages provide primary healthcare services to the tribals,who are socio-economically disadvantaged and marginalized group of people living in verydifficult terrain, with very limited access to healthcare services. The project wasexecuted in collaboration with Niramaya Health Foundation.
GAVS, in its on-going education initiative for the Rural Tribal youth, runs threeVocational Training Centers in Peth Taluka, Nashik, in collaboration with partnerorganization Kherwadi Social Welfare Association. The project was undertaken with the longterm objective of imparting specialized skills and making the tribal youth more employablein the areas of computer literacy, tailoring, beauty training, wireman/ electriciantraining, English speaking, motor training etc. Various batches covering around 700 youthhave successfully completed their courses, with over 50% of them currently gainfullyemployed.
During the year, the Company continued its support to Pratham, a charitableOrganization, in running a Shelter home for children under the age of 16. This Shelterhome is located in Behraich, Lucknow, which is one of the highest child migrating regionsin the country. During the year the shelter home catered to 120 children and providedshelter to 52 needy and vulnerable children. The Shelter home provides education, food andshelter to these children for their holistic development.
Your Company continues supporting the medical healthcare services in Deonar dumpingground, the largest garbage dumping ground in Mumbai. The project involves providingprimary healthcare services to children who are rag-pickers and their families who work inand around the dumping ground. The intervention has achieved improved life expectancy ofthe children working as rag pickers in the dumping ground, while reducing the rate ofanaemia and other nutritional deficiencies and general ailments in the community.
Donation of essential medicines / products for humanitarian causes was continued with,while also continuing to support ISKCON Foundation’s Mid-Day Meal project in Mumbaifor municipal school children by way of Cash Donation.
Your Company also undertook new projects for capacity building in Kolkata. It supportedInstitute of Child Health, a charitable organisation, by providing donation to set up atechnically sound NICU step down Unit for its 150 bedded hospital, benefiting increasednumber of infants from economically weaker section. Your company also extended its supportto Indian Institute for Mother and Child, a voluntary organization, committed to promotechild and maternal health and literacy. An annual financial support was provided to theorganization to run it’s on-going medical programs benefiting over 1 lakh poorpeople.
As part of its regional CSR program, your Company supported smaller projects in Nashikand New Delhi. The Company also supported St. Jude India Care centre by way of providinginfrastructure support to its new centre in Navi Mumbai for cancer afflicted poor childrenand also donated a dialysis machine to Tamilnadu Kidney Research Association, a Charitableorganization supporting economically weak patients in need of dialysis.
The Company also initiated new projects in support of the geriatric population. Thefirst project, your Company initiated was a long term project for supporting annually a 24X 7 Helpline for senior citizens in Mumbai, run by Dignity Foundation, a voluntary nonprofit organization. The Helpline provides immediate and emergency support, rescue andrelief to elderly people calling at the Helpline. The second project was for providingmedical support to the aged in the remote and under developed Khurda district of Orissa.The project envisages support to about 14,000 underserved villagers suffering fromdebilitating diseases, especially orthopaedic conditions and helping in theirrehabilitation.
The Company also took active steps by partnering with the Mumbai Municipal Corporationin spreading awareness of swine flu. There were a number of promotional initiatives thatwere taken that included release of advertisements, creation of bus panels, posters etc.among other initiatives.
India is increasingly becoming an integral part of GlaxoSmithKline’s CSRinitiatives. During the year, our parent fulfilled its plans of up scaling its efforts inIndia and building a new manufacturing production line in India that would helpsubstantially towards helping eliminate Lymphatic Filariasis (LF) by 2020. The GlobalCommunity partnerships project, Personal Hygiene and Sanitation Education (PHASE) has alsobeen successfully launched during the year in India covering 16 municipal schools inMumbai’s Deonar Dumping ground and Dharavi.
(k) Cautionary Note
Certain statements in the "Management Discussion and Analysis" section may beforward-looking and are stated as required by applicable laws and regulations. Manyfactors may affect the actual results, which could be different from what the Directorsenvisage in terms of future performance and outlook.
4. Directors
Resignation
Mr. Peter Bains and Dr. Mark Reilly resigned as Directors from 27th July 2009. TheBoard places on record its appreciation of the valuable services rendered during theirtenure as Directors and for their contributions to the deliberations of the Board.
Appointment
The Board of Directors has appointed Mr. D. Sundaram as Non-Executive IndependentDirector of the Company with effect from 27th July 2009, in the casual vacancy caused bythe resignation of Dr. Mark Reilly. The Board has also appointed Mr. A. M. Nimbalkar asadditional Director of the Company with effect from 27th July 2009. A proposal for hisappointment as Non-Executive Independent Director is being placed before the Members forapproval at the ensuing Annual General Meeting.
Mr. R. R. Bajaaj, Mr. M. B. Kapadia and Mr. R. C. Sequeira retire by rotation and,being eligible, offer themselves for re-appointment.
5. Directors’ Responsibility Statement
Your Directors confirm:
(i) that in the preparation of the annual accounts, the applicable accounting standardshave been followed;
(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 at the end of thefinancial year ended 31st December 2009 and of the profit of the Company forthat year;
(iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors have prepared the annual accounts on a going concern basis.
6. Corporate Governance
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 Agreements with the Stock Exchanges. A report on CorporateGovernance, along with a certificate of compliance from the Auditors, given in Annexure‘B’, forms a part of this Report.
7. Auditors
Members are requested to re-appoint M/s. Price Waterhouse & Co., CharteredAccountants, as the Auditors of the Company and authorise the Audit Committee to fix theirremuneration.
8. General
The particulars relating to conservation of energy, technology absorption and foreignexchange earnings and outgo are given in Annexure ‘A’ forming part of thisReport. The particulars of employees required to be furnished under Section 217(2A) of theCompanies Act, 1956, read with the rules thereunder, forms part of this Report. However,as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the reportsand accounts are being sent to all the Shareholders of the Company excluding the statementof particulars of employees. Any Shareholder interested in obtaining a copy may write tothe Company Secretary at the Registered Office of the Company. Further, attached to theaccounts of the Company are the Report and Audited Accounts of Biddle Sawyer Limited, asubsidiary company.
9. Employees
The Directors express their appreciation for the contribution made by the employees tothe significant improvement in the operations of the Company and for the support receivedfrom all other stakeholders, including shareholders, doctors, medical professionals,customers, suppliers and business partners.
On behalf of the Board of Directors
| D.S. Parekh |
| Chairman |
| Mumbai, 15th February 2010 | |
Annexure ‘A’ to the Directors’ Report
I. Conservation of Energy:
Both the factories - Thane and Nashik, intensified their efforts in identifying andimplementing Energy Conservation measures. In support of the initiative on Climate Change,the focus is to reduce the Energy Consumption at the sites by using non-conventionalEnergy sources e.g. Solar heating system and by adopting new Technologies e.g. Variablespeed Drive. Usage is closely monitored so as to avoid any wastage and also with a view toreducing the adverse impact of consumption of fossil fuel on the environment. Air, Steamand Nitrogen system leakage audits were carried out at periodic intervals. Thane Plant hasundergone a complete energy audit by an external expert – M/s Schneider.
Some of the measures for optimising the usage, undertaken during the year are listedbelow-
Energy Conservation measures taken:
• Energy efficient pumps for cooling water/Boiler
• Replacement of three small air compressors with energy efficient screwcompressor
• Installation of variable speed drives for continuous running equipments ( Pumps/FANS/ Compressors)
• Solar hot water system for certain areas of operations.
• Replacement of reciprocating compressor with energy efficient screw compressorfor chilled brine plant and chilled water plants.
• Replacement of reciprocating compressor with screw compressor along withcomplete PSA Nitrogen generating system.
• Installed wind driven turbo ventilator for exhausting air from productionbuilding.
• Replaced flame proof tube light fittings with energy efficient CFL fitting inClean room area.
Apart from the above measures, monitoring of noise levels and re-cycling of waste werecarried out. Gaseous emission from boiler chimney was monitored and controlled by ensuringproper combustion efficiency of the equipment.
A) Power and Fuel Consumption
| | Year Ended 31st December 2009 | Year Ended 31st December 2008 |
| 1. Electricity | | | |
| (a) Purchased units | KWH’000 | 23,065.03 | 21,189.36 |
| Total amount | Rs.Lacs | 12,48.41 | 10,37.11 |
| Rate/Unit | Rs. | 5.41 | 4.89 |
| (b) Own generation | | | |
| (i) Through DG | | | |
| Units | KWH’000 | 110.01 | 194.87 |
| Units /Ltr of HSD | KWH’000 | 2.04 | 2.44 |
| Cost per unit | Rs. | 19.03 | 15.44 |
| (ii) Coal | | — | — |
| 2. Furnace Oil, LDO & LSHS | | | |
| Quantity | KL | 2,991.17 | 3,023.80 |
| Total amount | Rs.Lacs | 6,75.11 | 8,93.06 |
| Average rate | Rs./KL | 22,570.02 | 29,534.36 |
| 3. Others | | — | — |
B) Consumption PU of production
| | Year ended 31st December 2009 | Year ended 31st December 2008 |
| | Chemicals (Incl.Bulk Drugs) | Formulations Per Million Packs | Chemicals (Incl.Bulk Drugs) | Formulations Per Million Packs |
| | Per Tonne | | Per Tonne | |
| Electricity | Units | 5,32,894 | 78,971 | 3,52,629 | 62,049 |
| Furnace Oil, LDO & LSHS | KLtrs | 98.44 | 6.72 | 71.03 | 5.75 |
II. Research and Development (R&D)
The company has two R&D units, namely Chemistry Research & Development(CR&D) and Pharmaceutical Research & Development (PR&D). Both are approved byDepartment of Science and Industrial Research, Government of India.
A. Chemistry Research & Development (CR&D), Thane
CR&D at Thane carries out research activities for the "Computational andStructural Chemistry – Molecular Discovery Research" (CSC-MDR) group of GSKR&D, UK. These activities are in the area of very early phase of drug discovery. Thework consists of synthesis of monomers (or building blocks) and also synthesis of arraycompounds. These monomers are used in high throughput chemistry. Array compounds are finalmolecules, which are directly deposited into GSK’s library of new compounds.
During 2009, CR&D also provided synthesis services to GSK Services Unlimited, UK.The work involved synthesis of certain compounds by novel routes.
B. Pharmaceutical Research and Development (PR&D), Nashik
GSK plc has augmented its technology development capability by upgrading the existingfacility at PR&D. This upgraded facility is now operational with fully instrumentedlaboratory scale and pilot scale equipment for manufacturing of tablets, oral liquids andsemisolids. This supports the GSK philosophy of science and risk based approach to ensurethat the quality is built into the products.
The facility is supporting local business and GSK plc for new source evaluation,process improvement, technical trouble shooting, pilot scale studies, processunderstanding and identification of "critical to quality" and "critical toprocess" parameters. In addition, this facility also supports, new productintroduction, product transfers and line extension development. The facility works incollaboration with GSK’s Technical Development facility at Mayenne-France.
Specific areas in which R&D is carried on by the Company :
• Pharmaceutical R&D has developed and transferred the technology of topicalcombination preparation with corticosteroid and tablet formulation containing calciumsupplement with vitamins.
• The facility partnered in scaling up environment - friendly coating process forZinetac 150 tablet to ensure that the aqueous coated product is successfully manufactured.
• This facility played a leading role in transferring the dry granulationmanufacturing technology for Albendazole LF tablet at Nashik from GSK France andSouth-Africa, for WHO’s Global programme to eliminate Lymphatic Filariasis.
Benefits derived as a result of the above R&D:
PR&D efforts have helped to introduce new products to grow a diversified businessand to deliver more value to the customer and reduce solvent emission. It has also broughtout an improvement in processes, product design and operating efficiencies. R&D workhas also resulted in improved stability of products and cost reduction.
Future Plan of Action:
The Pharmaceutical R&D is planning to exploit the Near-Infrared technology forroutine QC release testing to reduce cycle-time and inventory levels.
The company is privileged to have access to various research databases used worldwideand to latest technologies developed by the GlaxoSmithKline Group
Expenditure on R&D:
| Rs. Lakhs |
| 1. Capital | 3,34.6 |
| 2. Recurring | 4,66.8 |
| Total: | 8,01.4 |
| 3. Total R&D expenditure as a percentage of turn over - | 0.42% |
Technology Absorption, Adaptation and Innovation:
1) Albendazol facility was created at Nashik to support LF initiative. New facilitymeets the cGMP requirements & has latest technology like computer controlledcompression machines, IBC systems to avoid dust exposure and Electronic tablet counter tofill the bottles.
2) Development of Palletizer using innovative techniques to minimise manual handling.
3) Innovative cartonators on Ampoule packing lines and strip packing lines to eliminatemanual packing and for minimizing ergonomic hazards.
4) Development of NIR methods for raw material identification
5) Installation of Camera based inspection systems for checking overprinting details onAmpoules
III. Foreign Exchange Earnings and Outgo
Activities relating to exports, initiatives taken to increase exports, development ofnew export markets for products and services and export plans:
(1) Exports amounted to Rs.7150 lakhs for the year.
(2) Total Foreign Exchange used and earned :
During the 12 month period, the foreign exchange outgo was Rs.35185 Lakhs (whichincludes amounts spent on import of raw and packing materials and goods for resaleaggregating to Rs.17395 Lakhs and Dividend payment of Rs.17167 Lakhs) as compared toRs.32122 lakhs in 2008. The foreign exchange earned was Rs.12220 Lakhs mainly on accountof exports and clinical research and data management as compared to Rs.9628 lakhs in 2008.Details have been given in Notes 20 to 23 in Schedule 17 to the financial statements.