Novartis India Ltd Directors Report.

Your Directors are pleased to present the Annual Report along with the Audited Financial Statement for the Financial Year ended March 31, 2021 ("the year under review").

Summary of Financial Results

(Rs. in million)

2020-21 2019-20
Revenue from Operations 3813.5 4382.5
Total Income 4144.4 4743.9
Profit before Tax 400.4 286.4
Profit for the year 209.0 100.8
Other Comprehensive Income for the year (60.9) (197.3)
Balance brought forward from previous year 7080.4 7474.6
Available for appropriation
The Directors have made the following appropriations:
Dividend 246.9 246.9
Dividend distribution tax 0 50.8
Carry forward 6981.6 7080.4


The Board has recommended payment of dividend at Rs. 10 per equity share of Rs. 5 each, for the Financial Year 2020-21. The said dividend, if approved by the members at the Annual General Meeting ("AGM"), will result in a cash outflow of Rs. 246.9 million. The Board continues to support a steady dividend policy and the recommended dividend is in accordance with the Dividend Distribution Policy of the Company. A copy of the said Policy is available on the website of the Company at

Management Discussion and Analysis

For the year under review, the business operations of the Company comprises Pharmaceuticals.

a. Economy, Industry and developments

India’s economic growth in terms of GDP, for the Financial Year 2020-21 has contracted by almost 7.5% as against growth of 4.2% during the Financial Year 2019-20. This means growth in real GDP was just around 2% over the absolute level of the Financial Year 2019-20, implying that the economy would take at least two years to reach and go past pre-pandemic levels.

The slowdown was caused by a decline in private consumption growth, disruption in business activities and stress in NBFCs, which compounded pre-existing weaknesses in investment. In response to the Covid-19 outbreak, a nation-wide lockdown had also brought economic activity to a near standstill during the April-June quarter of the Financial Year 2020-21. The most impacted sub-sectors included aviation and tourism, hospitality, trade, and construction. Industrial activity was also disrupted due to mobility restrictions, while agriculture was mostly unaffected.

Although the Reserve Bank of India (RBI) provided liquidity and government increased spending on health and social protection through expenditure re-prioritizing and fiscal expansion, the sharp contraction in output between April and September 2020, inflicted significant impact on economic growth.

Retail inflation as measured by the Consumer Price Index (CPI) was hovering between 5% and 7%. While food prices were under moderation, non-food inflation has been slowly gaining momentum. This is primarily due to high taxes on petrol and diesel, raising of prices by companies trying to make up for lost incomes, a spike in global commodity prices and an inflation in prices of various kinds of services. According to a recent World Bank report, India’s sustained GDP recovery depends on the success of its vaccination campaign and government spending.

The Covid-19 pandemic has also had a disruptive impact on the pharmaceutical market, prompting a sharp downward revision of the anticipated growth rate for the Financial Year 2020-21. It has exposed the shortcomings in India’s Healthcare system. Access to healthcare, which was already a problem for many patients, has been rendered even more difficult. While demand for some drugs, especially for chronic drugs spiked in the early months due to panic buying, the lockdown and subsequent reduction in patient flow, and the concomitant decline in prescriptions and new prescription initiations, had a major impact on sales. Primary care and hospital outpatient consultations fell sharply. Elective surgeries were suspended, while a backlog of urgent surgical cases also built up. The outbreak led to a rapid increase in the use of digital and virtual communication tools – both for patient consultations as well as for Physician detailing activity. Online pharmacy sales were also boosted further by the disruptive impact of the pandemic. While e-pharmacy regulations have yet to be finalized, online sales are widely expected to account for a growing share of the retail market over the next five years. All these dynamics would play a more significant role in future promotional strategies.

With the government’s attention focused on containing the outbreak, progress on the delivery of key healthcare reforms is likely to slow temporarily, given the toll the disaster has taken on government finances. In the medium to longer term, it is hoped that the crisis will lead to an increase in government healthcare spending and a more effective approach to reform of the healthcare system. The government’s policy think tank, NITI Aayog, in its publication, Healthcare system reform roadmap, acknowledged that the Ayushman Bharat program (viz., Pradhan Mantri Jan Arogya Yojana (PMJAY), the national health protection scheme) had laid foundations for improvements and called for the consolidation of highly fragmented payer and provider networks through establishment of a risk-pooling system for the middle class – effectively recommending the expansion of health insurance coverage to that segment of the population. This is encouraging for the pharmaceutical industry.

The national government has also acknowledged the need to strengthen the healthcare infrastructure and address existing shortages of doctors and other health professionals. Raising tax revenues to bankroll those initiatives will be difficult in the wake of the Covid-19 pandemic, however public-private partnerships (PPPs) appear likely to play a key role. To fulfill such aspirations, it requires serious and focused intent by the government together with targeted spends to build and improve healthcare infrastructure in primary and secondary care centers. There is also a need to make the overall ecosystem swift, including making research and healthcare institutions more contemporary and adaptive to newer domains of technology. We are hopeful that timely and universal access to Covid-19 vaccinations will place the economy and the industry on a faster recovery path.

b. Performance

Revenue from operations for the Financial Year ended March 31, 2021 was Rs. 3813.5 million representing a decrease of 13.0% over the previous year.

Profit before tax for the year stood at Rs. 400.4 million representing an increase of 39.8% over the previous year. The current Financial Year 2020-21 had lower spends due to extraordinary market environment.

It may be noted that, the Covid-19 pandemic and nationwide lockdown/restrictions in the Financial Year 2020-21 have impacted the Company’s business. Due to the pandemic, there were limited operations at contract manufacturing sites resulting in sporadic supply disruptions. There were instances of delay in import clearances and in local supply chain activities, which affected the supplies initially, but these got streamlined in the subsequent months. Due to limited supplies, there was product substitution at local pharmacy levels. In addition, many patients have postponed their visits to healthcare professionals, many OPDs/Nursing homes were non-operational during this period and all these resulted in no new prescription generation, specially for the topical portfolio. The transplant business was impacted with the National Organ and Tissue Transplant Organization (NOTTO) temporarily suspending the living donor transplant program due to associated high risk. Considering the safety of our employees, we have advised our employees to take an informed decision while going back to the field. To minimize this impact, the Company has amplified its innovative digital engagements with physicians to amplify the share of voice in the highly competitive pain management market for a high brand recall and for the dissemination of key scientific messages. This has resulted in driving performance of key brands like Voveran SR 100 and Voveran 1 ml AQ.

Similarly, the Company strategy on "prevention of infections" in patients undergoing transplant, is well accepted by transplant surgeons and Nephrologists and has resulted in a gain of market share versus competition. While restrictions are easing out gradually, the Company continues to devote significant resources and management attention to ensure business continuity and uninterrupted supplies to patients and customers. The incredible agility and resilience shown by our employees in switching to new digital ways of working ensured that we could continue to operate during this challenging period.

c. Operational performance

The Pharmaceuticals business registered Net Revenue from Operations of Rs. 3813.5 million representing a decrease of 13.0% over the previous year.

In spite of the Covid-19 challenges, the Pain portfolio has recorded a growth during the year under review resulting from focused sales, increased marketing efforts and integration of a robust digital strategy driving growth of our flagship portfolio of Orals and Injectables. As part of the Company’s life-cycle management strategy, the Company took a bold step with the first ever digital launch of a new product - Voltaflam TH, a combination medicine used in the treatment of pain due to muscle spasm. Our efforts have resulted in the Company being the number two MNC in the Indian pain market.

The Transplant business was negatively impacted due to the Covid-19 pandemic. However, the impact was limited due to our concerted efforts during this period and total sales were impacted by only 24% as against a 55% drop in the number of transplant procedures during this period. The Company used the time effectively to get extensively involved in scientific engagement with healthcare professionals and key institutions to drive awareness of ‘prevention of infections’ and developed a robust digital strategy for customer engagement and to enhance brand reach. Our strategy resulted in gain in the induction patient share gain from 35% in the Financial Year 2019-20 to 48% in the Financial Year 2020-21. The Company’s Voveran group of products continues to be one of the top brands in the Non-Steroidal Anti-Inflammatory Drugs (NSAID) market and ranks among the top three brands in India. With new products Voveran 1ml AQ already in the market, the Company expects to further strengthen its position by serving more patients, while continuing to have scientific engagements and leveraging digital strategic initiatives with its stakeholders. The following brands hold key positions in major therapeutic areas such as:

Therapeutic Area Therapeutic Area Product
Central Nervous System Tegrital, Exelon
Pain & Inflammation Voveran
Transplantation/Immunology Simulect, Certican, Myfortic, Sandimmun Neoral

d. Key Financial Indicators

Particulars 2020-21 2019-20
Operating profit margin (%) 3.8 (0.3)
Net profit margin (%) 5.5 2.3
Debtors turnover ratio 10.0 10.5
Current ratio 4.5 3.5
Return on Net Worth 2.9 1.4
Inventory turnover ratio 7.2 7.4
Interest coverage ratio NA NA
Debt equity ratio NA NA

Reasons for change compared to the previous Financial Year in some of the key financial ratios are as follows:

Operating profit margin

Operating profit margin is a profitability or performance ratio used to calculate the percentage of profit a company produces from its operations. It is calculated by dividing the operating earnings before interest and tax by turnover. The operating margins improvement were driven by lower spends during the year under review.

Net profit margin

The net profit margin is equal to how much net income or profit is generated as a percentage of revenue. It is calculated by dividing profit for the year by turnover. Net profit margin in the Financial Year 2020-21 is higher compared to the Financial Year 2019-20 driven by lower spends.

Debtors turnover ratio

It is calculated by dividing turnover by average trade receivables, to quantify a company’s effectiveness in collecting its receivables. The change is driven mainly due to decrease in revenue.

Current ratio

The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities. Reduction in ‘other financial liabilities’ and Trade Payables supported upside of the 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 in the Financial Year 2020-21 is higher compared to previous year due to increased profitability with lower spends.

Inventory turnover ratio

Inventory turnover is the number of times a company sells and replaces its inventory during a period. It is calculated by dividing turnover by average inventory. Lower sales in the Financial Year 2020-21 consequently led to lower turnover ratio.

Interest coverage ratio

The interest coverage ratio measures how many times a company can cover its current interest payment with its available earnings. It is calculated by dividing profit before interest and tax by finance cost. The Company does not have any debts as at March 31, 2021 and March 31, 2020, 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 the degree to which a company is financing its operations through debt versus wholly owned funds. The Company does not have any debts as at March 31, 2021 and March 31, 2020, and hence this ratio is not given in the table.

e. Risks

Control of prices of certain drugs under the Drug Price Control Order (DPCO) continues to affect the profitability of 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 further downward pressure on drug prices. Building investments in non-traditional opportunities, coupled with heightened competition and a rising cost of talent, will result in margin pressures.

The Indian Pharma Market (IPM) is dominated by generic medicines and these drugs account for nearly 75% of the pharma industry. Prescription by generic names could also have an impact on pharma companies and it could necessitate a change in the Company’s promotional strategies. Regulations to cap trade margins on non-scheduled products, could impact the business model for trade generics.

With the uncertainty around the ongoing pandemic and the extended duration of Covid-19 in the country, it may lead to business risks i.e. interrupted supply of key products and generation of new prescriptions. However, we have charted a control/mitigation plan to overcome/minimize the impact of these anticipated challenges. Novartis AG, which is the Company’s holding company, owns directly or indirectly several companies in Novartis Group worldwide including various brands and patents. Therefore, any merger, acquisition, divestment or restructuring by Novartis AG or its subsidiaries, would have an influence on the Company’s operations in India as well.

f. Outlook

At around 3.5%, the proportion of GDP allocated to total healthcare expenditure is less than half the OECD average, and is lower than figures in other BRICS economies (Brazil, Russia, China and South Africa). The government’s contribution to national health expenditure is also low, leaving patients to foot more than 70% of healthcare costs, mostly on an out-of-pocket basis. While government spending has accelerated, the upward trend has been gradual rather than transformative, and medium-term targets – which envisage that public health expenditure will reach 2.5% of GDP by 2025 – are unlikely to be met. The Covid-19 pandemic has had a substantial impact on both state and national government finances. With many businesses and individuals also taking a significant financial hit, additional funds for healthcare are unlikely to be raised in the near future.

Domestic API manufacturing capabilities will come under the spotlight in the wake of the Covid-19 pandemic, which has highlighted the local industry’s reliance on bulk drug imports from China. Contract manufacturing opportunities may be affected by new rules which extend liability for the quality and safety of medicines to companies marketing products manufactured by third parties. The introduction of GST has paved the way for consolidation of the distribution sector, fueling the emergence of larger stockists with an increasingly broader geographic footprint. The pandemic has hit small stockists hardest and it may trigger further restructuring within the distribution chain. The government’s aspiration to improve healthcare infrastructure, expansion of PMJAY, streamlining new regulations for e-pharmacies, telemedicine and the like is encouraging to note, but the key remains timely execution, focused approach and targeted spends on improving health infrastructure.

T he ongoing crisis due to the Covid-19 pandemic has impacted the medium to short term outlook for the economy. The pharmaceutical industry is to some extent in a slightly better place given the increased focus on health. However, there are various parameters such as availability of healthcare infrastructure, faster vaccination of population, emerging new commercial models, adoption of new technologies, new policy reforms together with several macro-economic factors such as changes in crude oil prices, commodity inflation, potential disruptions due to global events, problem of non-performing assets, a below normal monsoon etc., which could have an impact on GDP growth in future.

g. Internal control systems and their adequacy

The Company maintains appropriate systems of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposal. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Head of Internal Audit together with external audit consultants reviews the effectiveness and efficiency of these systems and procedures to ensure that all assets are protected against loss and that the financial and operational information is accurate and complete in all respects. The Audit Committee approves and reviews audit plans for the year based on internal risk assessment. Audits are conducted on an ongoing basis and significant deviations are brought to the notice of the Audit Committee of the Board of Directors following which corrective action is recommended for implementation. All these measures facilitate timely detection of any irregularities and early remedial steps. During the year, the Company conducted a detailed review of its internal control systems, evaluated the internal financial control systems with the Audit Committee and discussed relevant issues with internal and statutory auditors. Based on the recommendations of the Audit Committee, the Board has stated in its responsibility statement that the Company followed proper internal financial controls and that such internal financial controls are adequate and were operating effectively.

h. Vigil Mechanism

The Company has established a Vigil Mechanism and Whistleblower policy that enables the Directors 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 in appropriate or exceptional cases. Details of the Vigil Mechanism and Whistleblower policy are made available on the Company’s website at

i. Personnel

Industrial Relations scenario continued to be cordial. The Company regards its employees as a great asset and accords high priority to training and development of employees. Number of employees as on March 31, 2021 was 539.

The information required pursuant to Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees’ particulars, which is available for inspection by the members. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary & Compliance Officer of the Company in this regard.

Corporate Social Responsibility

The Company continues to support various initiatives in the areas of health and environment. The CSR Policy adopted by the Board of Directors is available on the Company’s website at Health: The Government of India announced its commitment to eradicate leprosy from the country by the year 2030. Aligned with this vision, the Company reinforced its commitment to leprosy as part of its CSR work in India. The Company continued its support to a non-profit organization in Telangana to set up an integrated health management system, which will result in digitization of around 22,000 leprosy records, in the hope that this data will eventually serve to drive early diagnosis of leprosy. The Company’s Healthy Families program, Arogya Parivar continued its health awareness programs reaching out to more than 5.8 million individuals across rural India and conducted 456,136 health education programs and 105 health camps in the year under review. Environment: The city of Mumbai – owing to its dense population – lacks adequate green cover and open spaces. The Company has continued supporting the upkeep of a beautiful garden in the heart of the city.

Disaster Relief: The Covid-19 pandemic has presented unprecedented challenges to all of us. In such difficult times, the Company has partnered with a non-profit to provide cooked meals to the frontline staff of government hospitals in Mumbai. The Annual Report on Corporate Social Responsibility Activities is annexed herewith as

Annexure A.

Related Party Transactions

The Audit Committee and the Board approved all Related Party Transactions entered into during the year under review, from time to time.

The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. ("SEBI Listing Regulations"). The Company has formulated a policy on materiality of Related Party Transactions and on dealing with Related Party Transactions. The policy is available on the Company’s website at Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/arrangements/transactions entered into by the Company with its related parties, during the year under review, were: • in "ordinary course of business" of the Company; • on "an arm’s length basis"; and • not "material".

All transactions with related parties are in accordance with the policy on Related Party Transactions formulated by the Company.

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

Details of the material Related Party Transactions in the Financial Year 2020-21, as per the Policy on dealing with Related Parties adopted by the Company are disclosed in Annexure B. The transactions disclosed in the Annexure relate to material Related Party Transactions with Novartis Pharma AG for purchase, transfer or receipt of products, goods, active pharmaceutical ingredients, materials, services, other obligations as approved by members under erstwhile Clause 49(VII)(E) of the listing agreement at the 67th Annual General Meeting of the Company held on July 23, 2015.

Risk Management

Pursuant to Regulation 21 of the SEBI Listing Regulations, the Company has constituted a Risk Management Committee ("RMC") of the Board to identify elements of risk in different areas of operations and to develop a policy for actions to mitigate the risks.

The RMC is supported by an internal Risk Steering Committee, Risk Champions and on some occasions supported by an external risk advisory firm. The team undertakes assessment of internal and external risks, adopts the risk mitigation plan and regularly monitors them in a structured and controlled environment. The Committee provides updates on risk management to the Audit Committee of the Board of Directors of the Company on a regular basis. Details of composition of the RMC and the Risk Management Policy, adopted by the Board, are in the Corporate Governance Report.

Fixed Deposits

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

Particulars of Loans, Guarantees or Investments

As on March 31, 2021, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act. The details of changes in the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

Board of Directors and Key Managerial Personnel

During the Financial Year under review, the Board of Directors, based on the recommendation of the Nomination & Remuneration Committee appointed Mr. Sanker Parameswaran as Additional Director (Independent and Non-Executive) of the Company, to hold office for a period of five consecutive years effective June 22, 2020. Members of the Company through an ordinary resolution at the 72nd AGM of the Company held on August 7, 2020, approved the aforesaid appointment of Mr. Parameswaran as Independent Director of the Company for a period of five years. During the Financial Year 2020-21, the members of the Company through a special resolution under Postal Ballot dated March 24, 2021 approved the re-appointment of Ms. Sandra Martyres as Independent Director of the Company, not liable to retire by rotation, to hold office for an additional term of five years on the Board effective from April 19, 2021.

Ms. Monaz Noble has been functioning on the Board of the Company in Non-Executive and Non-Independent capacity effective June 1, 2019. Ms. Noble retires by rotation and being eligible, offers herself for re-appointment. Necessary resolutions for the re-appointment of Directors together with details for re-appointment have been included in the Notice convening the ensuing AGM.

The Company has received necessary declaration from each Independent Director of the Company stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. Based on the declarations received from Independent Directors and in the opinion of the Board of Directors, the Independent Directors of the Company fulfill the conditions of independence and are independent of the management.

Appropriate details on Board and Committee composition and other Corporate Governance matters are elaborated in the Report on Corporate Governance, which forms a part of this Annual Report.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2021 are: i. Mr. Sanjay Murdeshwar - Managing Director; ii. Mr. Felix Doss - Chief Financial Officer; and iii. Mr. Trivikram Guda - Company Secretary & Compliance Officer.

Directors’ Responsibility Statement

The Audited Financial Statements of the Company for the year under review ("financial statements") are in conformity with the requirements of the Companies Act, 2013 read with the rules made thereunder ("the Act") and the Accounting Standards. The financial statements fairly reflect the form and substance of transactions carried out during the year under review and reasonably present the Company’s financial condition and results of operations.

Pursuant to Section 134 of the Act, the Board of Directors, to the best of its knowledge and ability confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit and loss of the Company for the Financial Year ended March 31, 2021;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) proper internal financial controls were laid down and followed by the Company and such internal financial controls are adequate and were operating effectively;

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

Familiarization programme for Independent Directors

The Company keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective on issues being faced 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 the Company’s website at

Auditors and Auditors’ Report

During the year under review, no frauds in terms of the provisions of Section 143(12) of the Act, have been reported by the statutory auditor and secretarial auditor in their report for the year under review.

(i) Statutory auditor

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

T he requirement of seeking ratification of the members for continuance of Statutory Auditors 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 members for their appointment is not being placed at the ensuing Annual General Meeting.

The Auditors’ Report to the members on the Accounts of the Company for the Financial Year ended March 31, 2021 does not contain any qualification, reservation or adverse remark. During the year under review, 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 the Statutory Auditors:

During the Financial Year 2020-21, the total fees for the statutory audit rendered by the Statutory Auditors are given below:

Auditors’ Remuneration (Rs. in million)

(excluding Goods and Service tax, where applicable)

2020-21 2019-20
Audit Fees 9.0 8.4
Tax Audit Fees 1.3 1.3
Reimbursement of expenses 0.2 0.3
Total 10.5 10.0

(ii) Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr. K. G. Saraf from Saraf & Associates, Practicing Company Secretary for conducting secretarial audit of the Company for the Financial Year 2020-21.

The Secretarial Audit Report is annexed herewith as Annexure C. The Secretarial Audit

Report does not contain any qualification, reservation or adverse remark.

Compliance with Secretarial Standards

During the Financial Year 2020-21, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Annual Secretarial Compliance Report

The Company has undertaken an examination of all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder, for the Financial Year 2020-21.

The Annual Secretarial Compliance Report as issued by the Practising Company Secretary has been submitted to the stock exchanges within 60 days from the end of the Financial Year. The Report does not contain any qualifications.

Energy, Technology Absorption and Foreign Exchange

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

Corporate Governance

The Company is committed to follow best practices of corporate governance and is in compliance with the provisions on corporate governance specified in the SEBI Listing Regulations and Novartis Group corporate governance norms.

A certificate of compliance from Dr. K. R. Chandratre, Practicing Company Secretary and the report on Corporate Governance forms a part of this Directors’ Report.

Prevention of Sexual Harassment Policy

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Committee has been set up to redress complaints received regarding sexual harassment. All persons whether employed as permanent, contractual, temporary or trainees are covered under this policy.

During the Financial Year 2020-21, no complaint was received by the Company related to sexual harassment.

Extract of Annual Return

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is available on the website of the Company at


The Board appreciates and places on record the contribution made by all stakeholders, particularly employees, shareholders, customers, the medical fraternity and all business partners, during the year under review and acknowledges the support received from the parent Company, Novartis AG.

Cautionary Note

The statements forming part of the Directors’ Report may contain certain forward looking remarks within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.

On behalf of the Board of Directors
June 17, 2021 Chairman