Abbott India Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

Mar 31, 2023

Your Directors have pleasure in presenting their Seventy-ninth Report and the Audited Financial Statements of the Company for the financial year 2022-23.

FINANCIAL HIGHLIGHTS

('' in Crores)
Particulars	For the year ended March 31, 2023	For the year ended March 31, 2022
Revenue from Operations	5,348.73	4,913.32
Other Income	154.15	83.16
Total Income	5,502.88	4,996.48
Profit Before Tax	1,273.82	1,079.73
Profit After Tax	949.41	798.70
Retained Earnings and Other Comprehensive Income (OCI)
Balance brought forward	2,151.57	2,014.18
Profit After Tax	949.41	798.70
OCI arising from remeasurement of employee benefits	3.62	2.92
Dividend - FY 2021-22	(584.36)	-
Dividend - FY 2020-21	-	(584.36)
Transfer to Reserves	(94.94)	(79.87)
Balance carried forward	2,425.30	2,151.57

DIVIDEND

Your Directors have recommended a final dividend of '' 180/-and special dividend of '' 145/- per share for the year ended March 31, 2023 on 2,12,49,302 fully paid-up Equity Shares of '' 10/- each for approval of the shareholders at the forthcoming Annual General Meeting. The said dividend, if declared will absorb a sum of '' 690.60 Crores.

In terms of the provisions of the Income-tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the proposed dividend for the year ended March 31, 2023 after deduction of tax at source.

DIVIDEND DISTRIBUTION POLICY

Dividend Distribution Policy adopted by the Company in terms of requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015, as amended from time to time (“SEBI Listing Regulations”) is available on the Company’s website at https://www.abbott.co.in/investor-relations.html. The said Policy lays down various factors which are considered by the Board while recommending the dividend for the year.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC OUTLOOK

In the last decade, India has been one of the fastest growing economies, and the GDP is expected to grow at 6.4% in 2023-24 as reported by Asian Development Bank. The acceleration in GDP growth can be attributed to multiple reasons, including favorable demographics, strong investment capital flows and technological efficiency and productivity gains.

INDUSTRY REVIEW

As per the India Brand Equity Foundation, the Indian pharmaceutical industry is currently ranked third in pharmaceutical pro duction by volume after evolving over time into a thriving industry growing at a CAGR of 9.43% for the past nine years. Generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research and manufacturing, biosimilars and biologics are some of the major segments of the Indian pharma industry. India also has the greatest number of pharmaceutical manufacturing facilities that are in compliance with the US Food and Drug Administration (USFDA) and has 500 Active Pharmaceutical Ingredient (API) producers that contribute to around 8% of the worldwide API market. The domestic pharmaceutical industry includes a network of approximately 3,000 drug companies and 10,500 manufacturing units.

Indian drugs are exported to more than 200 countries in the world. As per the India Brand Equity Foundation, India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications. Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK.

As the world’s pharmacy, India’s pharmaceutical exports have increased by 138%, rising from '' 37,987.68 Crores in 2013-14 to '' 90,324.23 Crores in 2021-22.

As per IQVIA, India’s domestic pharmaceuticals market (IPM) is estimated at '' 2,21,922 Crores in 2023 with growth of 9.5% vs growth of 6.6% in 2022. Branded generics dominated the domestic prescription pharmaceutical market, accounting for around 80% of sales by value as per IQVIA. While there are continuous efforts to raise the regulatory bar, a company’s reputation and brands are still widely regarded as indicators of quality. The market is expected to grow at a CAGR of 8.8% between 2022-2027 reaching '' 3,08,329 Crores by 2027, driven by economic growth, increasing penetration of health insurance and increased private sector investment.

OPPORTUNITIES AND CHALLENGES

Factors which impact Industry and Company include :

• Co-marketing Agreements : Promotional tie-ups between foreign companies and local partners are an established feature of the market, but co-marketing deals for new drugs have been increasingly introduced over the last few years. For multinationals, these agreements enable more widespread detailing of key brands, while for local manufacturers, which have seen lesser access to new drugs, these agreements offer opportunities to broaden existing portfolios. Partnerships between Indian companies and MNCs are expected to continue to grow due to benefits provided to both parties, as well as the opportunity to make relevant patient impact.

• E-pharmacy and Pharmacy Chains : The retail pharmacy sector is estimated to comprise of at least 6,00,000 licensed outlets. Most are small, independent businesses, but pharmacy chains and e-pharmacies are a growing force. Pharmacy chains have expanded aggressively with MedPlus at 3,000 stores and Apollo at 4,000 stores. In 2022, the market for online pharmacies was worth '' 25.50 billion. It is anticipated to expand at a compound annual growth rate (CAGR) of 22.20% from 2022 to 2027. This will increase access to organized pharmacies across the country and consequently drive increased demand and healthy competition.

• Ayushman Bharat : The central government’s health insurance scheme, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), is expected to drive increased public health insurance coverage. In January 2023, as per Economic Survey 2022-23, the scheme covered 22 crore beneficiaries with the provision of hospital care to an annual value of 5,00,000 per family. There are over 1.54 lakh Health and Wellness Centers (HWCs) across India, with over 135 crores footfall at

these HWCs. Further, the HWCs have also enabled over 87 crore screenings of non-communicable diseases. More than 31 crore health accounts have been created under the Ayushman Bharat Digital Mission, and over 7.5 crore health records have been linked. While coverage under the scheme itself is limited to hospital inpatient care, it will allow a growing number of patients to gain access to healthcare, increasing rates of diagnosis and raising disease awareness. This will further benefit private clinics and the retail pharmacy sector.

• Price Controls and Regulations : As per India Brand Equity Foundation, the National Pharmaceutical Pricing Authority (NPPA) had brought as many as 384 formulations under price control in 2022 and has now additionally fixed the ceiling price of 93 essential formulations including pain killers and drugs used to treat cancer, rheumatoid arthritis, heart disease, bacterial infections, pneumonia, tuberculosis, thyroid, epilepsy and urinary tract infections. Additional downward pressure could come from Trade Margin Rationalization to more non-scheduled drugs used for the long-term treatment of chronic conditions.

• OTC Drug Regulations : The OTC sector in India has been growing at a healthy rate driven by increased access to information and an evolving, and more informed consumer. The Drugs Technical Advisory Board (DTAB) approved a new OTC regulation policy in January 2022 to create an explicit OTC category and remove ambiguity from the current OTC definition. Post acceptance of the proposed amendment to the Drugs and Cosmetics Act, up to 100 drugs currently dispensed under a prescription can be shifted to the OTC category.

• Uniform Code of Pharmaceuticals Marketing Practices (UCPMP) : UCPMP, while currently voluntary, could become mandatory in the future. A mandatory code would require ethical marketing practices to be followed by all Companies. Given that the Company has a strong compliance process in place, it would be well positioned under a strict enforcement of UCPMP.

REVIEW OF OPERATIONS

The Company has consistently grown above market* in the last several years with a clear focus on providing scientific, trusted products, backed by expert clinical support. The Company’s position has been enhanced through consistent scientific engagement with doctors, increasing geographic penetration, strong customer insights, innovative products and a comprehensive pill plus service approach.

Financial performance

Revenue from Operations : Revenue from Operations for the year ended March 31, 2023, is '' 5,348.73 Crores in comparison to '' 4,913.32 Crores last year, recording a growth of 8.9%.

Profit Before Tax : Profit Before Tax for the year ended March 31, 2023, is '' 1,273.82 crores, which grew by 18.0% over the previous year.

Key Financial Ratios :

Particulars	2023	^^^2022	Change
Debtors Turnover (Days)	20.6	20.0	3.0%
Inventory Turnover (Days)	82.0	96.6	(15.1)%
Interest Coverage Ratio*	80.7	57.5	40.3%
Current Ratio	2.5	3.2	(21.9%)
Debt Equity Ratio	0.1	0.1	-
Operating Profit Margin (%)	24.1	22.3	8.1%
Net Profit Margin (%)	17.8	16.3	9.2%
Return on Net Worth (%)	31.6	29.5	7.3%
*Interest Coverage Ratio has increased because of accounting impact of Ind AS 116-Leases.

There is no significant change except Interest coverage ratio (i.e., change of 25% or more as compared to the immediately previous financial year) in the Key Financial Ratios.

Detailed explanation of Ratios :

(i) Debtors Turnover (Days)

The above ratio is used to quantify a Company’s effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a Company uses and manages the credit it extends to customers. It is calculated by dividing Revenue from Operations by average trade receivables.

(ii) Inventory Turnover (Days)

Inventory Turnover is the number of times a Company sells and replaces its inventory during a period. It is calculated by dividing Cost of goods sold by average inventory.

(iii) 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 Earnings Before Interest and Taxes by finance cost.

(iv) 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.

(v) Debt Equity Ratio

The Debt Equity 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. It is calculated by dividing a Company’s total lease liabilities by its Shareholder’s equity.

(vi) 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 Earnings Before Interest and Taxes by Revenue from Operations.

(vii) 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 the profit for the year by Revenue from Operations.

(viii) 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 after tax for the year by average capital employed during the year.

Business Performance

The Company operates in a single reportable business segment

i.e., “Pharmaceuticals”. The Company provides products and solutions across various therapeutic areas such as Women’s Health, Gastroenterology, Central Nervous System, Metabolics, Multi-Specialty and Vaccines.

Performance for the year under review in these therapeutic areas is highlighted below :

• Women’s Health : This year, the Women’s Health portfolio showed degrowth of 8.4%, mainly due to increased competition from generics in dydrogesterone market. The Company continued to enhance the connect with healthcare professionals through omnichannel campaigns and initiatives driving advocacy, while strengthening Duphaston’s positioning in the management of miscarriages and infertility.

Further, shaping the treatment landscape for menopause in India will be another key priority area for the Company and we will continue to build Femoston in this therapeutic area over the next few years. We launched the following new products to build on our

Women’s health portfolio during the year i.e., Femoston Mini (post-menopausal symptoms), Solfe extra tablet (iron deficiency anemia) and Cetropro vial (IVF).

• Gastroenterology (GI) : The Gastroenterology portfolio showed a robust growth of 10.5% and consolidated its market share in the segment. GI brands continued to be the key growth driver for the Company. Strong acceleration in 2022-23 was driven by the top brands in this segment, i.e., Udiliv (cholestatic chronic liver disease), Duphalac (constipation), Cremaffin Plus (constipation) and Creon (pancreatic exocrine insufficiency). These brands maintained their leadership position and market dominance with increased geographic presence, differentiated medico marketing programs and targeted micro market interventions. Other brands like Ganaton (gastrointestinal dysmotility) and Librax (irritable bowel syndrome), continued to outperform the market*. Our commitment to focus on new launches and build the existing top brands yielded substantial results accelerated portfolio growth.

During the year, Cortirowa OD (ulcerative colitis), Digeraft XT (gastroesophageal reflux), Digeraft Plus (gastroesophageal reflux) and Cremagel-L (anal fissures) were launched. Digeraft (anti reflux antacid) continued to be one of our best performing new products in 2022-23. Several beyond the pills offerings have also been significantly scaled up with the introduction of newer services such as EGG (Electrogastrogram) for enhancing dysmotility diagnosis in India. The Company plans to stay invested in extending better diagnosis support to patients in core therapy areas.

The Company will continue to identify need gaps in core therapy areas to maintain therapy leadership, launch new products to augment portfolio offerings, and support consumers with comprehensive and differentiated service offerings, to further accelerate mid-sized brands and enable disruptive growth of new product launches. The focus will remain on integrating and building a strong, sustainable and profitable hybrid promotional model for consumer facing legacy brands like Cremaffin and Digene by strengthening targeted consumerization and ethical promotional initiatives in the laxatives and antacids category.

• Central Nervous System (CNS) : The largest therapy area for the CNS business is vertigo, which grew by 4.1% over the previous year with Vertin delivering a market beating growth*. This has been made possible with the differentiated initiatives and campaigns, consistent therapy shaping initiatives, and successful product life cycle management.

• Metabolics : The Metabolics portfolio achieved strong double-digit growth of 14.5% driven by the success of Abbott’s flagship brand Thyronorm. Thyronorm grew faster than the represented market* and has maintained its market dominance*. The brand is driven by digital interventions to enhance scientific engagement, therapy shaping initiatives in collaboration with reputed bodies like Association of Physicians of India, Indian Medical Association and the Indian Thyroid Society. Multi-channel awareness campaigns continue to be an important lever aiming to provide credible information around thyroid disorders and resulting symptoms. During the year, Thyronorm 200 mcg (hypothyroidism) and India’s first Liothyronine (T3) molecule-Linorma T3 (hypothyroidism) were launched. Additionally, Combinorm grew faster than the market* and continues to establish the usage of pre-probiotics in the treatment of bacterial vaginosis.

• Multi-Specialty : Under Multi-Specialty, the Company offers products for insomnia, vitamin D, pre-term labor and pain management. This business has grown 4.7% in 2022-23 and is consistently growing higher than represented market*. Zolfresh (insomnia), Arachitol portfolio (vitamin D), Brufen (analgesics) and Duvadilan (preterm labor) are the key contributors to this business. Differentiated public awareness initiatives helped in creating awareness through experts. Scientific therapy initiatives in collaboration with India’s leading scientific bodies, were launched during the year. Going ahead, the focus will be to establish our base brands and build them into mega brands for the company. We also want to strengthen our new products pipeline to offer an even more comprehensive portfolio to covered specialties. During the year, Brufen P (pain and fever) was launched under this business.

• Vaccines : The key brands in the vaccines portfolio are Influvac (influenza), Enteroshield (typhoid), Havshield (hepatitis A), Rotasure (rotavirus diarrhea), and JE Shield SD (Japanese encephalitis). Vaccine business grew by 5.5 % during the year. We led robust medico-marketing and awareness plans to improve the pediatric vaccination numbers, especially for Influenza vaccination. We also launched several mother education initiatives under our Influenza flagship program and initiated several educational activities under our influenza flagship program. In partnership with US-India Strategic Partnership Forum (USISPF), Federation of Obstetric and Gynecological Societies of India (FOGSI), Indian Chest Society (ICS), guidelines for adult vaccinations

for critical patients were drafted and launched. The Company is working with National Technical Advisory Group on Immunization (NTAGI) to further build guidelines on influenza vaccinations for adults in high-risk groups. There are focused efforts though print and social media, along with campaigns on radio and parental platforms to create awareness. ‘In-Home-Vaccination’ and the ‘Influvac microsite’ were launched specifically for healthcare professionals for better services and to improve vaccine compliance. We will continue to expand the market for both pediatric and adult populations through newer patient services and product launches to strengthen the portfolio.

MEDICAL RESEARCH AND KNOWLEDGE SHARING INITIATIVES

Evidence-based medicine is gaining importance in empowering Healthcare Professionals (HCPs) to ensure better patient care. Research studies undertaken by the Company, ranging from real-world evidence-based studies (observational or epidemiological) to registration studies, have been instrumental in defining and driving organizational strategies and creating high-quality scientific evidence, thus aiding the optimization of healthcare.

During the year, the Company completed 6 clinical studies and executed 8 new clinical studies and published 18 articles in major indexed journals. All the studies were conducted in compliance with Good Clinical Practice (GCP) and regulatory requirements.

OUTLOOK

The pharmaceuticals industry is expected to grow at 9.5% in 2023. This continued economic growth, along with reduced Covid-19 impact, is expected to drive the market growth of non-Covid-19 therapies. We have also witnessed a global behavioral shift towards preventative care and remaining healthy, which is also expected to drive market growth in India. For Abbott, this market growth would present opportunities to provide relevant products and solutions to our customers.

In 2023, the Company we aim to and continue gaining share in the Indian pharmaceutical market. Some the key drivers that will help us deliver on our ambition are :

• Therapy shaping to accelerate pillar brands :

Focused efforts are being made to accelerate growth of current brands and future launches with clearly defined strategies, developed through in-depth analysis of market trends along with our capabilities and strengths. Shaping of key therapies is critical to drive leadership and ensure consistent market beating growth.

• Beyond-the-pill patient support : Engaging patients directly for education, counselling or compliance support is crucial today due to their increased awareness. The Company has been at the forefront of patient support programs and has continued expansion with new programs. For example, we’ve worked around menopause to help women improve their quality of life. Our existing programs have shown success in ensuring therapy adoption and adherence and we plan to explore targeted partnerships with other industry players and start-ups to expand the same.

• Multi-channel doctor engagement : A key focus of the Company is engaging with doctors through multiple physical and digital touchpoints. This is likely to help reach a larger base of doctors. We are also constantly revamping our knowledge platforms to be able to provide more relevant information to doctors.

• Increase portfolio depth : We continue to focus on new launches to ensure presence in strategic therapeutic areas and leverage loss of exclusivity of critical brands. We have built a robust plan for our new product pipeline across therapies.

RISKS AND CONCERNS

The Indian pharmaceutical industry operates under a highly regulated environment. Tighter norms for clinical trials as well as for development of new drugs and treatment may impact the industry growth, but are beneficial in the long run. Growing competition from generic medicines, dependence on imports for Active Pharma Ingredients (API), supply chain disruption due to geopolitical incidents, pose challenges to the industry and the Company. The Company remains at the forefront of these challenges and continue to develop new products at an affordable price point to meet evolving patient needs.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an internal control mechanism commensurate with its size and nature of business.

These systems provide a reasonable assurance on achievement of its operational, compliance and reporting objectives, including safeguarding the Company’s assets, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

This mechanism is sound in design and the framework is continuously evaluated for effectiveness and adequacy. The mechanism operates through well-documented standard operating procedures, policies and process guidelines and segregation of duties. Periodic analysis and reviews are

conducted by the senior management to assess its efficiency. Also, the same is discussed with auditors on a regular basis. Change in control structure is carried out to meet business needs along with control effectiveness.

The Internal audit plan is finalized based on current perception of internal control risk and compliance requirement in consultation with the operating divisions. The Internal Auditors, as a part of their audits, review the design of key processes to assess the adequacy of controls and propose remedial measures, wherever required.

The Internal Audit Reports issued by the Internal Auditors are discussed with the Senior Management and presented to the Audit Committee on a quarterly basis. An independent and empowered Audit Committee reviews the significant observations and assesses the adequacy of the actions proposed while monitoring their implementation. The Internal Auditors conduct a quarterly follow up for implementation/remediation of all audit recommendations and the status report is presented to the Audit Committee on a regular basis.

The Company has implemented both preventive and detection controls. Appropriate corrective actions taken to reduce the risks include the following :

• The Abbott Code of Business Conduct requires annual certification by all employees;

• The Compliance Committee is formed with representatives from all the operating groups;

• Senior Management has oversight of the compliance programs;

• The Business Compliance Cell is assigned the responsibility of training, monitoring and ensuring employees’ compliance with the Company’s policies and procedures;

• The Company has a Whistle-Blower mechanism in place;

• Internal Investigation reports are presented before the Audit Committee on a quarterly basis;

• Business divisions have periodic meetings with the Director-Office of Ethics and Compliance, to monitor and discuss compliance with various business processes.

For the year ended March 31, 2023, the Management has assessed the adequacy and effectiveness of internal controls over financial reporting and basis the assessment, believes that the processes are working efficiently and effectively. The Statutory Auditors have confirmed adequacy of the internal controls over financial reporting and its operating effectiveness.

DIRECTORS

During the year, the Board of Directors, basis the recommendation of the Nomination and Remuneration Committee, has approved the re-appointment of Ms Shalini Kamath (DIN : 06993314), as an Independent Director of the Company for a period of 5 (five) years effective October 29,

2022, not liable to retire by rotation. This was approved by the Shareholders through Postal Ballot on November 12, 2022.

Mr Rajiv Sonalker will retire as Whole-time Director effective June 30, 2023. The Board places on record appreciation for his contribution during his tenure.

The Board, upon recommendation of the Nomination and Remuneration Committee at its Meeting held on May 19,

2023, approved the appointment of Mr Mahadeo Karnik (DIN : 02606595) as Additional Director on the Board of the Company effective July 1, 2023 subject to approval of the Shareholders at the forthcoming Annual General Meeting.

In accordance with Section 152 of the Companies Act, 2013, Mr Kaiyomarz Marfatia (DIN : 03449627) and Ms Sabina Ewing (DIN : 09201770) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 (“the Act”) and the SEBI Listing Regulations. All the Independent Directors have registered themselves in the Independent Director’s Database managed by the Indian Institute of Corporate Affairs.

Number of Board Meetings

Five Board Meetings were held during the year 2022-23 on May 17, 2022; August 10, 2022; November 14, 2022; February 10, 2023 and March 17, 2023. The intervening gap between the Meetings was within the period prescribed under the Act, Rules framed thereunder read with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors.

Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy

The Company has adopted the Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as per the provisions of Section 178(3) of the Act and the Rules framed thereunder. The said Policies are available on the Company’s website at https://www.abbott.co.in/investor-relations.html.

Nomination Policy acts as a guideline for determining qualifications, positive attributes, independence of Directors and matters related to the appointment and removal of Directors and Senior Management.

The Policy lays down :

i. criteria, terms and conditions with regard to identifying suitable candidates who are qualified to become Directors and Senior Management;

ii. appointment mechanism for Managing Director/ Executive and Non-Executive Directors/Independent Directors/Key Managerial Personnel and Senior Management;

iii. tenure of Managing Director/Executive Directors/ Independent Directors;

iv. their removal process and succession planning.

Remuneration Policy lays down the Company’s philosophy and criteria as well as manner of determining the remuneration of Managing Director, Executive/ Non-Executive Directors, Independent Directors, Senior Management, Key Managerial Personnel and other employees.

Performance Evaluation of the Board, Board Committees and Directors

The Company has adopted the Board Evaluation Framework and Policy based on recommendation of the Nomination and Remuneration Committee, which sets a mechanism and criteria for evaluation of the Board, Board Committees and Directors, including Independent Directors. The same is available at https://www.abbott.co.in/investor-relations. html.

Every year, Directors evaluate the effectiveness of the Board and its Committees in performing its governance and oversight responsibilities. Directors assess the performance of their peers, as well as the full Board of Directors and each of the Committees on which they serve through online questionnaire.

Online Evaluations solicit feedback on various parameters described below :

For Board : Structure and composition of the Board, frequency and number of meetings, devotion of time for important business matters-financials, monitoring internal controls/ code of conduct/insider trading policy/risk management framework and emerging risks/governance and compliance issues, adequate access to information for effective decisionmaking, strategic guidance to management through regular interactions and cohesiveness in the overall working that facilitates open discussion.

For Committees : Structure and composition of the Committees, adequacy of charter and working procedure, frequency of meetings, if the Committee is functioning as per the charter and if the Committee recommendations contribute effectively to the Board decision-making.

For Directors : skill set, knowledge, attendance, effective participation at Board/Committee meetings, their contribution at the meetings, leveraging on his/her experience to provide the necessary insights/guidance on Board discussions and display of candor in expressing views even when they are in divergence with the rest of the Board, etc.

Review and discussions :

• Results are presented in the form of anonymized reports;

• The Nomination and Remuneration Committee reviews peer and Board Reports;

• Reports are then shared with the Board for review and discussions.

Feedback incorporation :

• Basis the feedback, enhancement opportunities are identified and implemented as appropriate;

• The Chair of the Nomination and Remuneration Committee discusses peer evaluation results with individual directors as needed.

During the year 2022-23, evaluation of the Board, Committees and Directors was conducted as per the process described above. Also, the Independent Directors conducted separate assessment of the Board, Non-Independent Directors and the Chairman basis the feedback from the other Board Members.

KEY MANAGERIAL PERSONNEL

Mr Vivek V Kamath, Managing Director, Mr Rajiv Sonalker, Chief Financial Officer and Ms Krupa Anandpara, Company Secretary, are the Key Managerial Personnel of the Company as on March 31, 2023.

Mr Rajiv Sonalker will retire as Chief Financial Officer of the Company effective June 30, 2023. The Board upon recommendations of the Audit and Nomination and Remuneration Committees, approved the appointment of Mr Sridhar Kadangode as Chief Financial Officer of the Company effective July 1, 2023.

Ms Krupa Anandpara has resigned and will cease as Company Secretary and Compliance Officer of the Company effective June 30, 2023.

AUDIT COMMITTEE

The Audit Committee comprises of Ms Anisha Motwan (Chairperson), Mr Munir Shaikh, Mr Sudarshan Jain anc Ms Shalini Kamath. Role of the Committee is provided in the Corporate Governance Report, forming part of this Report The recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Company has in place Vigil Mechanism/Whistle-Blowei Policy called “Abbott India Limited-Procedure for Interna. Investigations”. It lays down a mechanism for reporting am investigation of all unethical behavior, alleged or potentia violations of laws, regulations or Abbott Code of Business Conduct, policies, procedures or other standards.

A report indicating the number of cases reported investigations conducted including the status update is presented before the Audit Committee, on a quarterly basis.

The said Policy is available on the website of the Company at https://www.abbott.co.in/investor-relations html. Employees have numerous ways to voice their concerns and are encouraged to report the same internally for resolution

The said Policy provides for adequate safeguards againsl retaliation and access to the Chairperson of the Audil Committee.

Any concerns/grievances can be communicated through various sources as provided under the said Policy or via tol free number 0008001001058 or online at https://speakup abbott.com.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, your Directors state that :

a) in the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and there are no materia departures from the same;

b) they have selected such accounting policies and applied them consistently and 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, 2023 and of the Profits of the Company for that year;

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

d) they have prepared the Annual Accounts of the Company on a going concern basis;

e) they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

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

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality

The Company has in place the Policy on dealing with Related Party Transactions and Materiality in terms of requirements of the Act and the SEBI Listing Regulations. The said Policy is available on the Company’s website at https://www.abbott. co.in/investor-relations.html.

As per the said Policy, all Related Parties Transactions are pre-approved by the Independent Directors, Audit Committee and Board, as and when required as per the requirements under the Act and SEBI Listing Regulations. The details of actual transactions are reviewed by the Audit Committee on a quarterly/annual basis. Material transactions, if any, with the Related Parties are pre-approved by the shareholders.

Details of Related Party Transactions

The Company enters into the business transactions with various Abbott affiliate Companies (“Related Parties”) in the normal course of business and on arm’s length basis.

All the transactions with the Related Parties entered into during the financial year 2022-23 were pre-approved by the Independent Directors and Audit Committee. Actual Transactions are placed before the Audit Committee on a quarterly basis. Material Related Party Transactions are approved by the Shareholders, as and when required. The details of the same are provided in Note 38 to the Financial Statements.

Pursuant to Regulation 23(9) of the SEBI Listing Regulations, the Company has filed half yearly reports on Related Party Transactions with the BSE Limited.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the Section 124 and other applicable provisions of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all dividends which remain unpaid or unclaimed for a period of seven years, are required to be

• Reducing operational surprises and losses by identifying potential events and resultant responses, thus reducing surprises and associated costs or losses;

• Identifying and managing multiple and crossenterprise risks;

• Seizing opportunities by considering a full range of potential events and thus identify and proactively realize opportunities;

• Improving deployment of capital through robust risk information to effectively assess overall capital needs and enhance capital allocation.

These capabilities inherent in this Framework help in achieving the performance and profitability targets and prevent loss of resources.

This Risk Management Framework is directed to help ensure effective reporting and compliance with laws and regulations, avoid damage to the Company’s reputation and associated consequences.

Risk Management Framework enables the Company to avoid pitfalls and surprises along the way.

2. Roles and Responsibilities

• Board of Directors

The Board provides oversight about Risk Management and is responsible for approving Risk Management Framework. The Board has constituted Risk Management Committee with defined roles and responsibilities.

• Audit Committee

Audit Committee conducts evaluation of Risk Management systems and such other functions as may be assigned by the Board from time to time.

• Risk Management Committee

Key roles and responsibilities are outlined below :

i. Monitoring and implementing Risk Management Plans;

ii. Ensures that the adequacy of the Company’s

Risk Management Framework is being

assessed and that action is taken if it is inadequate;

iii. Reports Risk Management activities

and information, including top risks and

mitigation, to the Audit Committee and Board;

transferred by the Company to the IEPF, established by the Government of India. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

In accordance with the said requirements, during the year, the unpaid dividend and shares were transferred to IEPF. The details of the same are provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Policy

The CSR Policy is available on the Company’s website at https://www.abbott.co.in/investor-relations.html.

CSR Programs/Activities undertaken during the financial year 2022-23

The Company spent an amount of '' 19.36 Crores on various CSR programs during the financial year 2022-23. The Annual Report of the CSR activities undertaken by the Company is annexed as “Annexure I” and forms part of this Report.

RISK MANAGEMENT

The Company has formulated a “Risk Management Policy” which includes :

• Risk identification framework (including Environment, Sustainability and Governance related risks [ESG]);

• Risk mitigation measures ;

• Business Continuity Plan (BCP).

The framework above covers financial, operational, HR, reputational, sectoral, cybersecurity, ESG and any other risk determined by the Risk Management Committee (RMC).

1. Objective

Risk Management Policy is directed to enable Management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Broadly, the Policy Framework encompasses :

• Aligning risk appetite and strategy considering the risk appetite in evaluating strategic alternatives, setting related objectives and developing mechanisms to manage related risks;

• Enhancing risk response decisions and select among alternative risk responses-risk avoidance, reduction, sharing and acceptance;

iv. Understands the significant or high risks affecting Company and ensures that processes to mitigate them are effective;

v. Reviewing and amending Risk Management Framework from time to time;

vi. Such other functions as may be delegated by the Board from time to time.

• Risk Management Core Team

The Risk Management Team oversees the process by which business division/function management identifies and assesses risks and determines appropriate responses. It addresses organizational risks and sets performance measure goals and key risk indicators for those risks. It takes care of the following :

i. Design, develop and periodically update the Risk Management framework and procedure;

ii. Ensure appropriateness of risk culture and understanding across the Company at all levels;

iii. Plan and organise risk management programs;

iv. Ensure adherence to Risk Management policies and procedures within Abbott;

v. Facilitate validators in preparation and execution of control validation plan;

vi. Conduct adequate awareness;

vii. The Core Team along with the concerned Division/Function heads identifies risks faced/ perceived by the Company and mitigation plans. The core team further evaluates whether the mitigation measures have helped bringing down the scale and magnitude of risk, from time to time.

STATUTORY AUDITORS

S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration No. : 324982E/E300003), were appointed as the Statutory Auditors at the Seventy-fifth Annual General Meeting of the Company held on August 22, 2019, for a period of five years i.e., from financial year 2019-20 to financial year 2023-24, to hold office till the conclusion of the Eightieth Annual General Meeting of the Company.

AUDITORS’ REPORT

The Auditors’ Report for the financial year 2022-23 does not contain any adverse remarks, qualifications or reservations or disclaimers, which require explanations/comments by the Board.

COST AUDITORS

M/s Kishore Bhatia & Associates, Cost Accountants (Registration No. 00294), are the Cost Auditors of the Company for the financial year 2022-23.

M/s Kishore Bhatia & Associates are appointed as Cost Auditors of the Company for the financial year 2023-24 at a remuneration of '' 0.08 Crores plus taxes as applicable and reimbursement of out-of-pocket expenses. The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

COST AUDIT REPORT

As per the provisions of Section 148(1) of the Companies Act, 2013, the Company has maintained the cost records, as specified by the Central Government.

Cost Audit Report along with the Compliance Report for the financial year 2021-22, issued by M/s Kishore Bhatia & Associates, Cost Auditors, was filed with the Ministry of Corporate Affairs on August 25, 2022 (due date of filing was September 8, 2022).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (ICAI Firm Registration No. BA62445) are the Internal Auditors of the Company. Internal Audit Report, their significant observations and follow up actions taken by the Management is reviewed by the Audit Committee on a quarterly basis.

SECRETARIAL AUDITOR

Ms Neena Bhatia, Practising Company Secretary (Membership No. FCS 9492 and Certificate of Practice No. 2661) is the Secretarial Auditor of the Company for the financial year 2022-23.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report issued by Ms Neena Bhatia, Practising Company Secretary for the financial year ended March 31, 2023, does not contain any adverse remark, qualifications, reservations or declaimer except the observation that the name of the Company is appearing in the breach list displayed on the website of the BSE Limited for having foreign investment in excess of prescribed sectoral cap.

In this connection, the Company had received post-facto approval from the Department of Pharmaceuticals permitting the increase in foreign shareholding in excess of 75.11% from October 19, 2012 to January 14, 2021, which was subject

to compounding with the Reserve Bank of India for the contravention of applicable rules under the Foreign Exchange Management Act, 2000.

The Company has filed the compounding application with the Reserve Bank of India and taking adequate steps in this regard.

The Secretarial Audit Report is annexed as “Annexure II” and forms part of this Report.

REPORTING OF FRAUD BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors, Internal Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act.

HUMAN RESOURCES

Abbott is an innovative and great place to work, that cares about and values its employees. The purpose and mission is to provide employees with the opportunity to change people’s lives for the better, while living their own best lives personally and professionally. As they drive growth for the Company, the Company provides a supportive, inclusive culture and programs that help ensure their continued development and encourage them to build a successful career. The Company offers a variety of benefits and development opportunities that allow employees to build thriving workplace relationships and careers, along with financial security for themselves and their families.

The Company has 3,700 employees as on March 31, 2023. They are the pillars of the Company’s growth and success. Employee well-being is a key priority and the Company is committed to protecting it.

The Company offers career development programs for employees from all levels of the organization to build a diverse, innovative workforce of the future. This is done with a particular focus on diversity, equity and inclusion.

All efforts resulted in Abbott being recognized amongst the ‘Top 10 Best Companies To Work For in India,’ by Business Today-one of the leading business magazines.

Talent Strategy

A strong talent strategy has been developed to help attract and retain the right talent and emerge as the employer of choice in the Indian Healthcare Industry. The Company believes in motivating and engaging employees through shared goals, capability building initiatives, career growth opportunities and providing an environment of transparency, accountability and positive reinforcement.

Training and Capability building initiatives

1. Training and Development Resources

The Abbott Global Training Site provides variety of materials and resources to meet the development and functional training needs of employees including role-based trainings, in-person trainings, eLearning (online training) and articles, accessible on real-time basis calendarized and localized programs are additionally designed basis need identification. The Learning and Development team caters to customized training requests from business in parallel to the open enrollments. E-Learning and virtual learning play an integral role in learning offerings and provides employees the flexibility they need. The Career Connect Platform helps employees to engage in new experiences, discover innovative ways to connect with colleagues globally and take advantage of personalized resources to create a high-impact development plan. Employees also have opportunities to work on Learning Gigs-an innovative concept facilitating voluntary project-based learnings with teams across any country within Abbott.

2. Leadership Pipeline Building Programs

Talent Management Reviews : These programs focus on the development of key personnel who are part of the succession pipeline at various levels. They focus on building skills and capabilities required for the next level roles.

Transition Programs : These training programs are very specific to the employees who are getting into their new roles. As an employee transitions from being an individual contributor to a manager, this program provides the necessary support in navigating the complexity of being a manager.

The program focuses on building people manager leadership competencies and comes with three levels :

• Individual Contributor to People Manager;

• Manager to Director;

• Director to General Manager.

Key talent programs like In-Stride and Future Leaders Development Program aim at developing future leaders and accelerate their readiness into critical roles. The 12-month development journey consists of crossfunctional mentoring, classroom trainings, digital learning, leadership and business simulations, campus immersion at top class academic institutes and exposure to senior leaders to review development progress.

3. Executive Coaching and Mentoring

Executive coaching and mentoring are used as development interventions for senior leaders. They are based on the needs identified for senior leaders and a 6-12 months’ engagement with an external senior coach is established. The goals are set up and agreed to by the coachee, coach and the manager. Success is measured by the achievement of milestones and development goals achieved by the coachee.

4. Mentoring Programs

Leaders like the vice presidents, general managers, senior directors and functional leaders actively engage in mentoring talent across the organization. Mentoring develops employees to drive new, cross functional expertise and perspectives. Mentors are identified and a panel is created with expertise in a variety of areas of development to address the needs of our talent with respect to business and professional growth. The mentor-mentee pairs and groups are assigned based on need, expertise and personal attributes. Tools and guidelines to maximize learning are provided.

5. Leading with Impact-Integrated Managerial Capability Program

The Company helps managers accelerate their development and transition into senior leadership roles through skill building, experiences, and learnings from current leaders. The “Leading With Impact” program was offered to all people managers in the Company in 2021 to help them effectively lead people and the group underwent refresher programs on the same in 2022. The 12-week module consisting of online learning and simulations, on the job experiences, discussion with peers on the learnings, coaching from certified global coaches and pre and post program leadership effectiveness surveys, outlined modules such as See, Hear, Speak, Coach and Develop and is considered to be highly effective. Leading with Impact efforts are sustained through various initiatives like Pop Up quiz on Intranet portal, quarterly mailers related to employee life cycle processes, leader panel sessions, etc.

Diversity, Equity and Inclusion (DE&I) :

Diversity is fundamental at Abbott-in people, mindsets and business models. It’s core to fulfilling the purpose and is embedded in values and is driven across leadership levels. Diversity is built into Abbott’s worldview, workplaces and customer bases. The Company strives to create and provide

the work environment where every employee feels welcome and able to bring their whole self to work. This means integrating diversity, equity and inclusion in all areas of business and building teams reflective of the communities the Company serves.

Some key focus areas to help bring the Diversity, Equity and Inclusion vision at Abbott to life include :

• Equal Employment Opportunities : The Company’s Equal Employment Opportunity Policy reinforces the commitment in ensuring that workplace is free from discrimination and employment is based solely on merit during external hiring and internal job movements. Opportunities are provided without discrimination on the basis of race, sex/gender, religion/caste/ creed, social or ethnic origin, color, age, differently abled (including physical medical conditions), sexual orientation, domestic partnership status, gender identity or expression, marital status, ancestry, genetic information or any other reason prohibited by laws in the country.

• Capability and Mindset : Initiatives to continue building managerial capability to leverage diverse ideas and talent and build high performing, inclusive teams are pivotal.

• Forums and Networks : Provide opportunities for employees to engage with and learn from different communities creating robust, extensive employee networks and resource groups.

All of these is reinforced by continuous communication and awareness to ensure we build sensitization and advocacy for an inclusive workplace.

There are various interventions for DE&I undertaken and promoted during the year :

• Women Leaders of Abbott (WLA) : WLA takes a proactive role in connecting women within the organization and offers dynamic programs and initiatives to enhance leadership experiences and career development of women. It acts as a platform for attracting, retaining and advancing women in the organization, thereby becoming an Employer of Choice for Women.

• Working Mothers of Abbott (WMA) : WMA is an

employee resource group launched in Abbott India in 2022 to provide working mothers an avenue to connect, support, share and learn from each other as they strongly navigate expectations of balancing work and motherhood.

• Happy Feet-Joy of Motherhood : Happy Feet is a program designed to support and provide a conducive work environment for our women employees as they step into the phase of motherhood. The document is shared with women employees who are expecting and also provide details of preparing for maternity leave and provide support before, during and after pregnancy.

• ASCENT-Abbott Second Careers Engagement Program : This program aims to strengthen our diversity commitment by providing second career opportunity to veterans and women returning from career breaks. ASCENT aims at empowering these professionals with relevant opportunities and providing the required support and flexibility to ensure a seamless transition.

• Unconscious Bias Training for all Managers : Building individual awareness of unconscious bias and their understanding of its impact at work.

• Wo-Mentoring Program : One of our key focus is the development of our key women talent and creating women leaders across levels. Our Wo-Mentoring program provides an accelerated development experience through a mentoring opportunity for identified key women talent over a nine-month mentoring program. The Wo-mentoring program which started in our head office, now extends to manufacturing and sales employees. We have mentored 200 women employees so far and of these 40% have had a role rotation, promotions and transfers.

• Empower : As a part of this initiative, women employees receive exposure to best-in-class expert workshops/ curated session as well as content that includes theme specific webinars, videos, articles and podcasts to sharpen and enhance their leadership skills like networking, building personal brands, resilience mindset, etc.

• Avenue : Avenue is an offering designed to support women during any relocation requirement due to a change in personal circumstances.

• Early Career Network : This employee resource group set up in India has been launched with the purpose to help our early career professionals explore the mammoth organization that Abbott is, engage and network with leaders and diverse talent across the organization. The aim is to help these individuals evolve as professionals resulting in long and meaningful careers with Abbott.

• Abbott Disability Network : To be a best-in-class network supporting people of all abilities within Abbott. We empower people with disabilities to reach their fullest career potential. We create a culture of understanding, awareness, advancement and advocacy for individuals with disabilities through education, training, outreach, volunteer events and collaboration.

Prevention of Sexual Harassment (POSH) at Workplace

The Company has an Internal Complaints Committee (ICC) in place as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Appropriate training under POSH is imparted to employees regularly. This training also forms part of the new Employee Orientation program.

During the year 2022-23, all the employees have undergone and completed the aforesaid mandatory training program.

1 complaint was received by the Company/ICC during the year, under the aforesaid Act and the same was appropriately closed.

HEALTH, SAFETY AND ENVIRONMENT

The Company is committed to the protection of human health, safety and the environment. This commitment forms the basis for our EHS management systems and governance. Attainment of our long-range targets to reduce worker injuries and the environmental impacts of our business across our value chain is a priority. Meeting our targets, along with our EHS objectives, is the continuation of a long legacy of responsible business practices at Abbott that reflect our core values : Pioneering, Achieving, Caring and Enduring.

Health and Safety :

During the year, Goa plant received the prestigious Abbott Global EHS Excellence award for upgrading occupational health and fire protection facilities at site.

Site Safety Committee is formed at the plant having representation from both supervisory and non-supervisory staff. Committee meets at regular frequency to discuss and resolve EHS issues.

On-job, Classroom and Online EHS trainings are regularly arranged for employees. Training topics cover applicable EHS regulations, Abbott’s EHS technical standards, firefighting, hazardous chemical and waste handling, Slip/Trip/Fall, Machine Guarding, Material Handling and emergency preparedness.

State of art centralized dust collection system is provided in the manufacturing facility which removes the dust generated during the process thus preventing employees from dust exposure. The dust which is also explosive in nature is vented out effectively with this dust collection unit as this system by design has features to protect the equipment and area around in event of explosion. Thus, ensuing safety of personnel and workplace in event of dust explosion.

Automatic sprinkler system is installed in raw material, packing material and finished goods store, thus providing 100% sprinkler coverage to entire warehouse which is the most expensive block at site. In event of fire the sprinklers will automatically get activated, extinguish the fire and also to prevent the spread of fire in adjacent areas, thus providing protection even during non-working hour. Total 25% of sites built up area has coverage of automatic sprinklers system.

Hazardous Area Classification (HAC) study was carried out for Plants where the chemical Flash Point (FP) is less than 65° C as per IS5572/2009 (Class A and B liquids). Hence all plants/areas where any chemical stored/handled has a FP less than 65° C will be considered for this Hazardous Area Classification Study. Chemicals handled above their flash point were also included, as they are considered as flammable at elevated temperatures above their flash point.

Special focus is maintained on critical safe work initiatives like contractor safety, hand safety, hot work and working on heights.

Mass awareness programs such as celebration of National Safety Week and Abbott EHS week were conducted to help build a sustainable EHS culture.

For EHS cultural enhancement, we are running Behavior Based Safety-BBS program which includes observation and correction of unsafe acts. There also exists system for reporting of unsafe conditions and near miss. Such initiatives have greatly helped improve positive EHS culture.

Road Safety :

Various Road Safety programs were conducted for field employees during the year :

• 100% of the sales employees completed the online defensive riding refresher training module;

• 611 new sales employees were trained virtually on defensive riding skills and behaviors and COVID-19 Safety guidelines and behaviors, within 60 days of joining;

• 639 new sales employees were provided with 2 helmets (one for self and one for the pillion rider) as a part of the joining kit;

• A new online defensive driving refresher training module will be rolled-out to all field employee. This module covers all the new risks that a driver faces post COVID-19.

To further enhance employee engagement on road safety and defensive riding, a series of initiatives like quizzes and creative competitions were rolled-out with good participation from employees.

Environment :

A responsibility towards the environment is part of Abbott’s mandate. We continuously endeavor to minimize the use of renewable resources and cut down on carbon emission.

In all our initiatives, a holistic approach is adopted and efforts are made to curtail adverse environmental impact, if any. The Goa plant continued to implement multiple energy, water conservation and emission reduction projects.

The Company has a state-of-the-art effluent treatment plant with parameters of treated effluent well within the limit set by the local State Pollution Control Board. The rainwater harvesting project continues to save water by reducing the intake of purchased water.

In 2022-23 the effluent treatment plant was upgraded to next level by installing primary clarifier to remove solid particles and oil/grease. This will further improve the quality of treated water.

Multidisc screw press was introduced for sludge drying which is latest technology available in market. This helps in removing water from sludge at much faster rate and consumes 75% less power.

The transparent roofing sheet over sludge drying beds will prevent the ingress of rainwater during monsoon and also facilitates the sun drying of sludge. Hence efficient drying will reduce the total quantity of sludge generated which is disposed off as hazardous waste.

Furthermore, gas emissions from the boiler and generator stacks as well as the ambient air quality are monitored regularly and they are well within the limits set by the State Pollution Control Board. Vermi-composting unit is in place to convert canteen food waste into organic manure, which is used in the lawns and in the plantation inside the Goa factory premises.

Out of total non-hazardous waste generated at site, 60% of the waste is used for the beneficial purpose without undergoing any recycling process. Remaining 40% of waste is sent for recycling.

Out of total hazardous waste generated at site, 0.7% of the waste is incinerated without energy recovery, 0.3% is sent for recycling (used oil and e-waste). Rest 99 % of hazardous waste is disposed off through co-processing (in cement industries).

During the year, World Environment Day was celebrated as EHS mass awareness program.

Goa plant is certified as Zero Waste to Landfill facility which means no waste is disposed off through landfill.

Plastic Waste Management :

The Company is adhering to the requirements of Plastic Waste Management Rules as laid down by the Ministry of Environment, Forests and Climate change.

As a responsible organization, we collected and reprocessed 100% of plastic packaging. We entered into agreement with waste management agency for this purpose and collected and processed 2,000 MT plastic packaging waste, from the states and union territories of India where we operate.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The required information under the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. are annexed as “Annexure III” and forms part of this Report.

ANNUAL RETURN

The Annual Return of the Company as on March 31, 2023 has been placed on the website of the Company at https://www. abbott.co.in/investor-relations.html.

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosures required in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure IV” and forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing

Particulars of Employees, which is available for inspection by the Members up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at [email protected].

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report as required under Regulation 34 of the SEBI Listing Regulations forms part of this Report.

CORPORATE GOVERNANCE REPORT

Corporate Governance Report and Certificate from the Statutory Auditors of the Company on compliance of the conditions of Corporate Governance pursuant to the requirements of the SEBI Listing Regulations, form part of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (SS1 and SS2) respectively relating to Meetings of Board, its Committees and General Meetings.

DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company’s operations in future.

The Company had received post-facto approval from the Department of Pharmaceuticals permitting the increase in foreign shareholding in excess of 75.11% from October 19, 2012 to January 14, 2021, which was subject to compounding with the Reserve Bank of India for the contravention of applicable rules under the Foreign Exchange Management Act, 2000. The Company has filed the compounding application with the Reserve Bank of India and taking adequate steps in this regard.

INDUSTRIAL RELATIONS

The Company has overall cordial industrial relations. The Company continues to receive strong support from distributors, suppliers, vendors, stockists and other partners.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year.

GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review :

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. The Company does not have any joint venture or subsidiaries.

4. There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

5. There are no instances of one-time settlement during the financial year.

ACKNOWLEDGEMENT

Your Board expresses gratitude towards all the employees, business partners, institutions, banks and the Members, for their continued trust and support to the Company.

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Mar 31, 2022

Your Directors have pleasure in presenting their Seventy-eighth Report and the Audited Financial Statements of the Company for the financial year 2021-22.

FINANCIAL HIGHLIGHTS

('' in Crores)
Particulars	For the year ended March 31, 2022	For the year ended March 31, 2021
Revenue from Operations	4,919.27	4,310.02
Other Income	77.21	80.90
Total Income	4,996.48	4,390.92
Profit Before Tax	1,079.73	925.95
Profit After Tax	798.70	690.69
Retained Earnings and Other Comprehensive Income (OCI)
Balance brought forward	2,014.18	1,922.54
Profit After Tax	798.70	690.69
OCI arising from remeasurement of employee benefits	2.92	1.25
Dividend - FY 2019-20	-	(531.23)
Dividend - FY 2020-21	(584.36)	-
Transfer to Reserves	(79.87)	(69.07)
Balance carried forward	2,151.57	2,014.18

DIVIDEND

Your Directors have recommended a final dividend of '' 145/-and special dividend of '' 130/- per share for the year ended March 31, 2022 on 2,12,49,302 fully paid-up Equity Shares of '' 10/- each. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of '' 584.36 Crores.

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the proposed dividend for the year ended March 31, 2022 after deduction of tax at source.

DIVIDEND DISTRIBUTION POLICY

Dividend Distribution Policy adopted by the Company in terms of requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time

to time (“SEBI Listing Regulations”) is available on the Company’s website at https://www.abbott.co.in/investor-relations/corporate-governance-and-policies/policies.html The said Policy lays down various factors which are considered by the Board while recommending the dividend for the year.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC OUTLOOK

In the last decade, India has been one of the fastest-growing economies, with annual growth rate averaging 6-7%. The increase in GDP can be attributed to a variety of reasons, including favorable demographics, influx of investment capital and technological efficiency and productivity gains.

As per IMF, the economy grew by 8.7% in 2021, recovering from a contraction of 8% in 2020 as the country recovered from the COVID-19 pandemic and lockdown. Growth in 2022 is expected to reach 8.2% according to latest forecasts boosted by a recovery from COVID-19 restrictions. However, new COVID-19 strains and the Ukraine-Russia war remain as major concerns to the projected growth.

INDUSTRY REVIEW

India ranks as one of the top countries in terms of pharmaceuticals production with ~3,000 drug companies and ~10,500 manufacturing units. According to IBEF, the Indian Pharmaceuticals Industry ranks 3^rd worldwide by volume (10% share of production) and 14^th by value (1.5% share). It contributes about 2% to India’s GDP and 8% of the countries merchandize exports. Indian pharmaceuticals hold an important place in the global supply chain with over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in UK supplied by India. Further, the sector has been historically resilient to economic shocks exemplified by the fact that drugs and pharmaceuticals was one of the two commodity groups that did not degrow.

As per IQVIA, India’s domestic pharmaceuticals market (IPM) is estimated at '' 2,08,452 Crores in 2022 with growth of 9.5% vs growth of 18.5% in 2021. Growth in 2021 was driven by a boost to nutritional supplements, antibiotics and anti-virals due to COVID-19 impact whereas the demand is expected to normalize in 2022. Over the long-term, the market is expected to grow annually at 9.2% till 2026.

The IPM remains dominated by branded generics which make up 80% of sales by value as per IQVIA. Brand names and company image are regarded as de facto indicators of quality.

With healthcare becoming a key government agenda in the wake of the COVID-19 pandemic, government interest in the pharmaceuticals industry will continue. The government is expected to continue to build on initiatives to improve access to healthcare. Initiatives like improvements in the drug registration process, OTC regulations, expansion of Ayushman Bharat, etc., are expected to be long-term growth drivers.

OPPORTUNITIES AND CHALLENGES

The COVID-19 pandemic has transformed the industry with increasing digitization, and traction of e-pharmacy and pharmacy chains. Increased healthcare coverage and better policy support are likely to boost growth whereas adverse regulation could impact in a negative way.

Factors which impact Industry and Company include :

• E-pharmacy and Pharmacy Chains : New-age channels are gaining increasing salience and have emerged as an additional access point for consumers along with brick-and-mortar retailers. The rapid growth of the sector further driven by COVID-19 tailwinds has led to the entry of conglomerates and e-commerce players like Reliance, TATA and Flipkart. Propelled by the impact of the pandemic and its impact on consumer behavior, the online pharmacy channel is expected to continue growing and it is estimated to reach 70 Million households by 2025.

• Ayushman Bharat : The central government’s health insurance scheme, Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), is expected to drive up public health insurance coverage. 107.4 Million underprivileged and vulnerable families - equivalent to around 500 Million people or 40% of India’s population are covered under the scheme, with the provision of hospital care to an annual value of '' 5,00,000 per family. By February, 2022, more than 174 Million e-cards had been distributed to PMJAY affiliates, covering over 26 Million hospital admissions across 25,000 participating public and private hospitals. While coverage under the scheme itself is limited to hospital inpatient care, it will allow a growing number of patients to gain access to healthcare, increasing rates of diagnosis and raising disease awareness. This will further benefit private clinics and the retail pharmacy sector.

• GST : The Indian Government is looking at rationalizing GST rates. Currently, majority of drugs are in 12% category. If drugs are put in higher category and if it is not implemented rationally, it may impact the industry.

• OTC Drug Regulations : The OTC sector in India has been growing at a healthy rate driven by growing access to information for patients and willingness to self-medicate. The Ministry of Health (MOH) has published a draft notification which proposes to allow 16 OTC drugs used for treatment of common ailments to be sold without doctor’s prescription. The MOH also plans to formulate an OTC regulation to promote responsible selfmedication for treatment of common ailments, which will also enhance access to healthcare services. Any policy mandate is likely to benefit the Company given its dedicated OTC vertical.

• Uniform Code of Pharmaceutical Marketing Practices (UCPMP) : UCPMP, while currently voluntary, could become mandatory in future. A mandatory code would require ethical marketing practices to be followed by all companies. Given that the Company has robust compliance processes in place, it would be well positioned under a strict enforcement of UCPMP.

• NMC Regulations : The National Medical Council has published draft Registered Medical Practitioner (Professional Conduct) Regulations, 2022, which has proposed several restrictions on RMP’s engagements with the pharmaceutical industry and proposed changes in prescription guidelines. The draft once notified will replace the existing MCI regulations.

• Digital Engagement : Field force activity witnessed major disruption during the pandemic prompting companies to utilize digital means for engagement with Healthcare Professionals (HCPs). The trend is expected to continue with HCPs looking for high quality, scientific promotional material that is available at their convenience.

REVIEW OF OPERATIONS

The Company has consistently grown above market* in the last several years by keeping a clear focus on providing scientific, trusted products, backed by expert clinical support.

The Company’s position has been enhanced through consistent scientific engagement with doctors, increasing geographic penetration, strong customer insights, innovative products and comprehensive pill plus service approach.

Financial performance

Revenue from Operations : Revenue from Operations for the year ended March 31, 2022 is '' 4,919.27 Crores in comparison to '' 4,310.02 Crores last year, recording a growth of 14.1%.

Profit Before Tax : Profit Before Tax for the year ended March 31, 2022 is '' 1,079.73 Crores grew by 16.6% over the previous year.

Other Income : Other Income stood at '' 77.21 Crores, mainly comprising interest income from bank fixed deposits. The Company continues to invest in fixed deposits with banks that have high credit ratings, with a view to safeguarding the principal and maintaining liquidity. Income from bank deposits reduced by 4.7% due to reduction in interest rates. The Company has an investment portfolio of '' 2,669.83 Crores as on March 31, 2022.

Material Cost : Material Cost increased on account of inflation, but was compensated by improved sales price realization, resulting in a decrease in the same as a percentage to Sales from 56.3% in financial year 2020-21 to 54.8% in the current year.

Employee Cost : The Company increased its employee strength to 3,597. The increase in Employee Cost by 17.6% over the last year is mainly due to merit increase and increased sales incentives to field force. The Employee Cost as a percentage to Sales shows an increase at 12.0% in the current year vis-a-vis 11.6% in the financial year 2020-21.

Other Expenses : Other Expenses including Depreciation and Finance Cost increased by 17.0% over the last year. The percentage to Sales marginally increased to 14.0% compared to 13.7% for the financial year 2020-21, mainly on account of increased marketing spend to support volume growth.

Key Financial Ratios :

Particulars |	2022	2021	Change
Debtors Turnover (Days)	20.0	24.1	(17.0%)
Inventory Turnover (Days)	96.6	95.1	1.6%
Interest Coverage Ratio	57.5	51.7	11.2%
Current Ratio	3.2	3.4	(5.9%)
Debt Equity Ratio	0.1	0.1	-
Operating Profit Margin (%)	22.3	22.0	1.4%
Net Profit Margin (%)	16.2	16.0	1.3%
Return on Net Worth (%)	29.5	27.4	7.4%

There is no significant change (i.e., change of 25% or more as compared to the immediately previous financial year) in the Key Financial Ratios.

Detailed explanation of ratios :

(i) Debtors Turnover (Days)

The above ratio is used to quantify a company’s effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a company uses and manages the credit it extends to customers. It is calculated by dividing Revenue from Operations by average trade receivables.

(ii) Inventory Turnover (Days)

Inventory Turnover is the number of times a company sells and replaces its inventory during a period. It is calculated by dividing Cost of goods sold by average inventory.

(iii) 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 Earnings Before Interest and Taxes by finance cost.

(iv) 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.

(v) Debt Equity Ratio

The Debt Equity 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. It is calculated by dividing a company’s total lease liabilities by its Shareholder’s equity.

(vi) 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 Earnings Before Interest and Taxes by Revenue from Operations.

(vii) 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 the profit for the year by Revenue from Operations.

(viii) 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 after tax for the year by average capital employed during the year.

Business Performance

The Company operates in a single reportable business segment i.e., “Pharmaceuticals”.

The Company provides products and solutions across various therapeutic areas such as Women’s Health, Gastroenterology, Central Nervous System, Metabolics, Multi-Specialty, Vaccines, Consumer Health, etc.

Performance for the year under review in respect of above therapeutic areas are highlighted below :

Women’s Health : Women’s Health portfolio grew by 23.3% during the year led by the key brand Duphaston (miscarriage and IVF). Our robust medico-marketing initiatives, legacy and equity of the brand and our first of its kind patient support program “Tender Love & Care” give us high confidence of sustaining this growth momentum of Duphaston amidst further generic launches.

During the year, 3 new products viz. Riligol (post partum haemorrhage), Preservgest (pregnancy maintenance) and Femoston 2/10 (postmenopausal symptoms) were launched. Shaping the treatment landscape of Menopause in India will be yet another key priority for us in Women’s Health space and we will continue building Femoston in management of Menopause over the next few years.

Gastroenterology : The Gastroenterology portfolio showed a robust growth of 26.9% and was a key growth driver for the Company. Strong growth of top brands in this segment

i.e., Udiliv (cholestatic chronic liver disease), Duphalac (constipation) and Cremaffin Plus (constipation) was driven by increased geographic presence, differentiated medico marketing programs and targeted micro market interventions. Next set of mid-sized brands Creon (pancreatic insufficiency) and Ganaton (gastrointestinal dysmotility) continued to outperform the market*. Focus on new launches has yielded substantial results and accelerated the portfolio growth. Digeraft (anti reflux antacid) continued to be one of our best performing new products in recent years. Our beyond pills offerings have also seen significant scale up and we continue to invest in this area to extend better support to our patients. Going forward, our focus would remain to identify need gaps in our core therapy areas to maintain therapy leadership, launch new products to augment our portfolio offerings and support our consumers with a comprehensive and differentiated service offerings. During the year, Florachamp (probiotic for irritable bowel syndrome) was launched.

Metabolics : The portfolio grew by 9.4% mainly driven by Thyronorm (hypothyroidism). Thyronorm continues to be market leader* and is growing faster than the representative market*. We have increased our focus on enhancing digital footprint in all therapy shaping initiatives especially during and after COVID-19 affected period. We have continued efforts to scale up access towards affordable diagnosis in Tier II/III *Source : IQVIA

geographies. We collaborated with the Indian Thyroid Society and conducted multiple Thyroid Updates across country to establish the emerging concept of ‘Pragmatic Thyrovigilance’. Under strategic lever of ‘Regionalization’ we have enhanced resource allocation in states of Tamil Nadu, Maharashtra and West Bengal and also, enhanced our scientific initiatives to develop therapy advocacy. Combinorm continues to grow faster than market* as we made good progress towards establishing the concept of usage of pre-probiotics in the treatment of bacterial vaginosis.

Central Nervous System (CNS) : The CNS segment achieved a growth of 12.8%, mainly driven by Vertin (vertigo). Vertin continues to perform better than the anti-vertigo market* driven by its market shaping initiatives, like the first of its kind Vertigo Care in the differential diagnosis area of patient care. The recent launch of innovative formulations like Vertin DT (disintegrating tablet) offer solutions for broader vertigo management. Strengthening key therapies such as epilepsy with new generation drug launches such as Brivetoin (epilepsy), is part of the long term strategy to build a relevant portfolio offering.

Multi-Specialty : Under Multi-Specialty, the Company offers products for insomnia, Vitamin D, pre-term labor and pain management. This business showed a strong growth of 39.5% despite the dynamic situations, consistently growing higher than represented market*. Zolfresh (insomnia), Arachitol portfolio (vitamin D), Brufen (analgesics) and Duvadilan (preterm labor) are the key contributors in this business. Differentiated public awareness initiatives such as D Strong Active Life, Wake up fresh and scientific therapy initiatives like D Active India Symposium (DAIS), Sustaining Term Enabling Pregnancy (STEP), etc. in collaboration with India’s leading scientific bodies, were launched during the year. Zolfresh, Duvadilan and Brufen are leaders in their respective category* while Arachitol is among top 3 as faster growing brand in represented market*.

To expand this portfolio, we launched a new brand Arachitol Gummies, an innovative orange flavored FSSAI approved to fulfill daily requirements of Vitamin D and Calcium. Going ahead, our focus is to establish base brands to be among mega brands of the Company and robust new products pipeline to offer comprehensive portfolio to covered specialties.

Vaccines : The key brands in vaccines portfolio are Influvac (influenza), Enteroshield (typhoid) and Rotasure (rotavirus diarrhea). During the year, we have launched Havshield, vaccine for immunization against Hepatitis-A in line with our portfolio building strategy.

Vaccine segment was adversely impacted during the year due to the new COVID-19 strain and preventive measures like home schooling, etc. reducing the infections. Vaccine business declined by 13.2% during the year; however, there are robust medico-marketing and awareness plans in place to improve the pediatric vaccination numbers; specially Influenza vaccination where we are the leader with significant market share*.

over 1,98,000 medical doctors. During the year, the Company used digital technologies to reach out to doctors and provide therapy updates to them. Over and above these, over 25,000 patient awareness programs were conducted across India reaching ~2.2 Million patients.

OUTLOOK

The pharmaceuticals industry is expected to grow at 9.5% in 2022. With economic growth expected to continue in India along the lines of 2021, patient spending on healthcare and drugs is expected to recover in non-COVID-19 therapies. However, due to the current geopolitical environment along with the continued threat of COVID-19 resurgence, there remains a risk on the industry.

In 2022, we are striving to deliver market beating growth to continue gaining share in the IPM. We have identified a few critical areas which provide opportunities for us to improve our business model and relationships with our customers :

• Therapy shaping to accelerate pillar brands : We aim

to gain therapy leadership and grow faster than market through an approach focused on accelerating existing pillar brands via innovative marketing campaigns and partnerships. Our brand strategies are a result of a detailed analysis of market trends and our capabilities.

• Beyond the pill patient support : We have always strived to deliver a holistic healthcare experience for patients which has interventions at each stage of the continuum of care. Patient engagement by providing them with adequate information, counselling and compliance support will enable higher awareness, therapy adoption, adherence and eventually better health outcomes. We have several patient support programs running including, “Tender Love & Care” - a program to provide virtual counselling and curated lifestyle management support for couples undergoing pregnancy and “Gutfit” - counselling and nutrition advice for patients. To optimize delivery of patient support programs, we have launched a:care, a patient facing mobile application and will be setting up a centralized management team to drive all patient service programs.

• Increase portfolio depth : To ensure presence in strategic therapeutic areas and leverage loss of exclusivity of competition brands, we have built a robust plan for the new product pipeline. Building new launches into future pillar brands will remain a key focus area.

• Digital differentiation : The Company continues to build differentiated digital assets for HCPs engagement with a key focus on getting multiple physical and digital touchpoints with HCPs. We have continued utilization

We have launched several Mom education initiatives under our Influenza flagship program “Mother’s Against Influenza”. We, in partnership with USISPF, FOGSI, etc., launched guidelines for adult vaccination for critical patient profiles. We have made focused efforts through Influenza awareness drive on Social Media, YouT ube, Radio and Parental Platforms. We also launched ‘In-Home-Vaccination’ and ‘FLU-Vaccine-Reminder’ service to improve the vaccine compliance.

Our Priorities are to expand the Influenza market with pediatric and adult, launch newer patient services and strengthen the portfolio through new vaccine introductions.

Consumer Health : During the year, this portfolio delivered a growth of 8.0%. We significantly strengthened consumerization initiatives during the year. Consumer Health portfolio now includes products offerings across antacids, laxatives and topical analgesics with Digene, Cremaffin and Brufen Power as key brands. We undertook significant marketing driven initiatives on e-pharmacies. Innovative products as stick packs of Digene and Cremaffin were launched during the year, aimed at convenience and increasing access of antacid and laxative solutions for Indian consumers.

IMPACT OF COVID-19

Throughout the year, the Company and its employees displayed speed, resilience and agility to ensure minimum disruption in business operations by proactively assessing the demand and ensuring uninterrupted supply of our products. There has not been any significant adverse impact on the business operations.

MEDICAL RESEARCH AND KNOWLEDGE SHARING INITIATIVES

Evidence-based medicine is gaining importance in empowering Healthcare Professionals (HCPs) to ensure better patient care. Research studies undertaken by the Company, ranging from real-world evidence-based studies (observational or epidemiological) to registration studies, have been instrumental in defining and driving organizational strategies and creating high-quality scientific evidence, thus aiding the optimization of healthcare.

During the year, the Company completed 10 clinical studies, and executed 10 new clinical studies and published 17 articles in major indexed journals. All the studies were conducted in compliance with Good Clinical Practice (GCP) and regulatory requirements.

Capability building of HCPs has remained a high priority for the Company. During the year, more than 6,500 medical education programs were conducted towards achieving this objective. The Company also partnered with over 12 medical associations to drive capability building in various therapeutic areas. Furthermore, as a ongoing commitment towards scientific knowledge dissemination, Continued Medical Education programs were conducted, training

of the multi-channel engagement capabilities developed during the pandemic and are building a HCP facing application to drive scientific engagement. We will also continue to drive gains in operational efficiency, and rich data collection through the adoption of ipad detailing and updated sales review tools.

• Channel engagement : We are focusing on building the business across traditional retail and institutions channels and in the emerging organized retail channel of pharmacy chains and e-pharmacies. Building strong relationships with our pharmacists, building partnerships with players in emerging channels and further strengthening our channel management capabilities will be an important focus going ahead.

RISKS AND CONCERNS

High government control on drug pricing through the National List of Essential Medicines (NLEM) and Drug Price Control Orders (DPCO) along with restrictions on trade margins mark-ups create price pressure across the industry. Expansion of NLEM will remain a critical risk for the Company. Further, any supply chain disruptions due to new waves of the pandemic or geo-political incidents might affect operations negatively. With high government oversight in the sector, any adverse regulation could cause a negative impact on the business.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an internal control mechanism commensurate with its size and nature of business. These systems provide a reasonable assurance on achievement of its operational, compliance and reporting objectives, including safeguarding the Company’s assets, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

This mechanism is sound in design and the framework is continuously evaluated for effectiveness and adequacy. The mechanism operates through well-documented standard operating procedures, policies and process guidelines and segregation of duties. Periodic analysis and reviews are conducted by the senior management to assess its efficiency. Also, the same is discussed with auditors on a regular basis. Change in control structure is carried out to meet business needs along with control effectiveness.

The Internal audit plan is finalized based on current perception of internal control risk and compliance requirement in consultation with the operating divisions. The Internal Auditors, as a part of their audits, review the design of key processes to assess the adequacy of controls and also propose remedial measures, wherever required.

The Internal Audit Reports issued by the Internal Auditors are discussed with the Senior Management and presented to the Audit Committee on a quarterly basis. An independent and empowered Audit Committee reviews the significant

observations and assesses the adequacy of the actions proposed while monitoring their implementation. The Internal Auditors conduct a quarterly follow up for implementation/ remediation of all audit recommendations and the status report is presented to the Audit Committee on a regular basis.

The Company has implemented both preventive and detection controls. Appropriate corrective actions taken to reduce the risks include the following :

• The Abbott Code of Business Conduct requires annual certification by all employees;

• The Compliance Committee is formed with representatives from all the operating groups;

• Senior Management has oversight of the

compliance programs;

• The Business Compliance Cell is assigned the responsibility of training, monitoring and ensuring employees’ compliance with the Company’s policies and procedures;

• The Company has a Whistle-Blower mechanism in place;

• Internal Investigation reports are presented before the Audit Committee on a quarterly basis;

• Business divisions have periodic meetings with the Director - Office of Ethics and Compliance, to monitor and discuss compliance with various business processes.

The Management has assessed the adequacy and effectiveness of internal controls over financial reporting for the year ended March 31, 2022 and basis the assessment, believes that the processes are working efficiently and effectively.

The Statutory Auditors have issued unmodified audit report on the adequacy of the internal controls over financial reporting and its operating effectiveness.

DIRECTORS

During the year, Mr Anil Joseph (DIN : 08753233) resigned as a Director and Managing Director of the Company effective January 31, 2022. The Board places on record appreciation for his contribution during his tenure.

The Board of Directors of the Company, basis the recommendation of the Nomination and Remuneration Committee, have approved the :

• Re-appointment of Mr Sudarshan Jain (DIN : 00927487), as an Independent Director of the Company for a period of 5 (five) years effective April 1, 2022, not liable to retire by rotation;

• Appointment of Mr Vivek V Kamath (DIN : 06606777), as Director and Managing Director of the Company for a period of 5 (five) years effective February 15, 2022, not liable to retire by rotation.

The above appointment/re-appointments were approved by the Shareholders through Postal Ballot on March 26, 2022.

In compliance with Section 152 of the Companies Act, 2013, Mr Ambati Venu (DIN : 07614849) and Mr Munir Shaikh (DIN : 00096273) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 (“the Act”) and the SEBI Listing Regulations. All the Independent Directors have registered themselves in the Independent Director’s Database managed by the Indian Institute of Corporate Affairs.

Number of Board Meetings

Five Board Meetings were held during the year on May 18, 2021; August 6, 2021; November 12, 2021; February 9, 2022 and March 15, 2022. The intervening gap between the Meetings was within the period prescribed under the Act, Rules framed thereunder read with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors.

Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy

The Company has adopted the Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as per the provisions of Section 178(3) of the Act and the Rules framed thereunder. The said Policies are available on the Company’s website at https://www.abbott.co.in/investor-relations/corporate-governance-and-policies/policies.html

Nomination Policy acts as a guideline for determining qualifications, positive attributes, independence of Directors and matters related to the appointment and removal of Directors and Senior Management. The Policy lays down :

i. criteria, terms and conditions with regard to identifying suitable candidates who are qualified to become Directors and Senior Management;

ii. appointment mechanism for Managing Director/ Executive and Non-Executive Directors/Independent Directors/Key Managerial Personnel and Senior Management;

iii. tenure of Managing Director/Executive Directors/ Independent Directors;

iv. their removal process and succession planning.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, your Directors state that:

a) in the preparation of the Annual Accounts for the year ended March 31, 2022, the applicable accounting standards have been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and 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, 2022 and of the profits of the Company for that year;

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

d) they have prepared the Annual Accounts of the Company on a going concern basis;

e) they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

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

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality

The Company has in place the Policy on dealing with Related Party Transactions and Materiality in terms of requirements of the Act and the SEBI Listing Regulations. The said Policy is available on the Company’s website at https://www. abbott.co.in/investor-relations/corporate-governance-and-policies/policies.html

The said Policy was reviewed and updated at the Meeting of Board of Directors held on February 9, 2022. The amendments made by SEBI in the relevant provisions of the SEBI Listing Regulations have been duly incorporated in the said Policy.

As per the said Policy, all Related Parties Transactions are pre-approved by the Independent Directors, Audit Committee and Board, as and when required as per the requirements under the Act and SEBI Listing Regulations. The details of such transactions are also reviewed by the Audit Committee on a quarterly/annual basis. Material transactions, if any, with the Related Parties are pre-approved by the shareholders.

Remuneration Policy lays down the Company’s philosophy and criteria as well as manner of determining the remuneration of Managing Director, Executive/Non-Executive Directors, Independent Directors, Senior Management, Key Managerial Personnel and other employees.

Performance Evaluation of the Board, Board Committees and Directors

The Company has adopted the Board Evaluation Framework and Policy based on recommendation of the Nomination and Remuneration Committee, which sets a mechanism and criteria for evaluation of the Board, Board Committees and Directors, including Independent Directors. The same is available at https://www.abbott.co.in/investor-relations/ corporate-governance-and-policies/policies.html

Every year, Directors evaluate the effectiveness of the Board and its Committees in performing its governance and oversight responsibilities. Directors assess the performance of their peers, as well as the full Board of Directors and each of the Committees on which they serve through written questionnaire.

Written Evaluations solicit feedback on various parameters described below :

For Board : Structure and composition of the Board, frequency and number of meetings, devotion of time for important business matters - financials, monitoring internal controls/ code of conduct/insider trading policy/risk management framework and emerging risks/governance and compliance issues, adequate access to information for effective decisionmaking, strategic guidance to management through regular interactions and cohesiveness in the overall working that facilitates open discussion.

For Committees : Structure and composition of the Committees, adequacy of charter and working procedure, frequency of meetings, if the Committee is functioning as per the charter and if the Committee recommendations contribute effectively to the Board decision-making.

For Directors : skill set, knowledge, attendance, effective participation at Board/Committee meetings, their contribution at the meetings, leveraging on his/her experience to provide the necessary insights/guidance on Board discussions and display of candor in expressing views even when they are in divergence with the rest of the Board, etc.

Review and discussions :

• Results are presented in the form of anonymized reports;

• The Nomination and Remuneration Committee reviews peer and Board Reports;

• Reports are then shared with the Board for review and discussions.

Feedback incorporation :

• Basis the feedback, enhancement opportunities are identified and implemented as appropriate;

• The Chair of the Nomination and Remuneration Committee discusses peer evaluation results with individual directors as needed.

During the year 2021-22, evaluation of the Board, Committees and Directors was conducted as per the process described above. Also, the Independent Directors conducted separate assessment of the Board, Non-Independent Directors and the Chairman basis the feedback from the other Board Members.

KEY MANAGERIAL PERSONNEL

Mr Vivek V Kamath, Managing Director, Mr Rajiv Sonalker, Chief Financial Officer and Ms Krupa Anandpara, Company Secretary, are the Key Managerial Personnel of the Company as on March 31, 2022.

AUDIT COMMITTEE

The Audit Committee comprises of Ms Anisha Motwani (Chairperson), Mr Munir Shaikh, Mr Sudarshan Jain and Ms Shalini Kamath. Role of the Committee is provided in the Corporate Governance Report, forming part of this Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Company has in place Vigil Mechanism/Whistle-Blower Policy called “Abbott India Limited-Procedure for Internal Investigations”. It lays down a mechanism for reporting and investigation of all unethical behavior, alleged or potential violations of laws, regulations or Abbott Code of Business Conduct, policies, procedures or other standards.

A report indicating the number of investigations conducted including the status update is presented before the Audit Committee on a quarterly basis.

The said Policy is available on the website of the Company at https://www.abbott.co.in/investor-relations/ corporate-governance-and-policies/policies.html

Employees have numerous ways to voice their concerns and are encouraged to report the same internally for resolution. The said Policy provides for adequate safeguards against retaliation and access to the Chairperson of the Audit Committee.

Any concerns/grievances can be communicated through various sources as provided under the said Policy or via toll free number 0008001001058 or online at https:// speakup.abbott.com

The Board has constituted Risk Management Committee with defined roles and responsibilities.

• Audit Committee

Audit Committee conducts evaluation of Risk Management systems and such other functions as may be assigned by the Board from time to time.

• Risk Management Committee

Key roles and responsibilities are outlined below :

i. Monitoring and implementing Risk Management Plans;

ii. Ensures that the adequacy of the Company’s Risk Management Framework is being assessed and that action is taken if it is inadequate;

iii. Reports Risk Management activities and information, including top risks and mitigation, to the Audit Committee and Board;

iv. Understands the significant or high risks affecting Company and ensures that processes to mitigate them are effective;

v. Reviewing and amending Risk Management Framework from time to time;

vi. Such other functions as may be delegated by the Board from time to time.

• Risk Management Core Team

The Risk Management Team oversees the process by which business division/function management identifies and assesses risks and determines appropriate responses. It addresses organizational risks and sets performance measure goals and key risk indicators for those risks. It takes care of the following :

i. Design, develop and periodically update the Risk Management framework and procedure;

ii. Ensure appropriateness of risk culture and understanding across the Company at all levels;

iii. Plan and organise risk management programs;

iv. Ensure adherence to Risk Management policies and procedures within Abbott;

v. Facilitate validators in preparation and execution of control validation plan;

vi. Conduct adequate awareness;

vii. The Core Team along with the concerned Division/Function heads identifies risks faced/perceived by the Company and way forward for tackling them.

Details of Related Party Transactions

The Company enters into the business transactions with various Abbott affiliate companies (“Related Parties”) in the normal course of business and on arm’s length basis.

All the transactions with the Related Parties during the financial year 2021-22 were pre-approved by the Independent Directors and Audit Committee. Prior approvals of the shareholders are in place for the Material Related Party transactions. Actual transactions were reviewed by the Audit Committee on a quarterly basis. The details of the same are provided in Note 39 to the Financial Statements.

Pursuant to Regulation 23(9) of the SEBI Listing Regulations, the Company has filed half yearly reports on Related Party Transactions with the BSE Limited.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all dividends which remain unpaid or unclaimed for a period of seven years, are required to be transferred by the Company to the IEPF, established by the Government of India. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

During the year, the unpaid dividend and shares were transferred to IEPF in line with the aforesaid requirements. The details of the same are given in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Policy

The CSR Policy is available on the Company’s website at https://www.abbott.co.in/investor-relations/corporate-governance-and-policies/policies.html.

CSR Programs/Activities undertaken during the financial year 2021-22

The Company spent an amount of '' 16.36 Crores on various CSR programs during the financial year 2021-22. The Annual Report of the CSR activities undertaken by the Company is annexed as “Annexure I” and forms part of this Report.

RISK MANAGEMENT

The Company has formulated a “Risk Management Policy” which includes :

• Risk mitigation measures;

• Business Continuity Plan (BCP);

• Risk identification framework (particularly Environment, Sustainability and Governance related risks [ESG]).

The framework above is not limited to ESG but would also cover financial, operational, sectoral, cybersecurity risks and any other risk determined by the Risk Management Committee (RMC).

1. Objective

Risk Management Policy is directed to enable Management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Broadly, the Policy Framework encompasses :

• Aligning risk appetite and strategy considering the risk appetite in evaluating strategic alternatives, setting related objectives and developing mechanisms to manage related risks;

• Enhancing risk response decisions and select among alternative risk responses - risk avoidance, reduction, sharing and acceptance;

• Reducing operational surprises and losses by identifying potential events and resultant responses, thus reducing surprises and associated costs or losses;

• Identifying and managing multiple and crossenterprise risks;

• Seizing opportunities by considering a full range of potential events and thus identify and proactively realize opportunities;

• Improving deployment of capital through robust risk information to effectively assess overall capital needs and enhance capital allocation.

These capabilities inherent in this Framework helps in achieving the performance and profitability targets and prevent loss of resources.

This Risk Management Framework is directed to help ensure effective reporting and compliance with laws and regulations, avoid damage to the entity’s reputation and associated consequences.

Risk Management Framework enables the Company to avoid pitfalls and surprises along the way.

2. Roles and Responsibilities

• Board of Directors

The Board provides oversight about Risk Management and is responsible for approving Risk Management Framework;

STATUTORY AUDITORS

S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration No. : 324982E/E300003), were appointed as the Statutory Auditors at the Seventy-fifth Annual General Meeting of the Company held on August 22, 2019 for a period of five years i.e., from financial year 2019-20 to financial year 2023-24, to hold office till the conclusion of the Eightieth Annual General Meeting of the Company.

AUDITORS’ REPORT

The Auditors’ Report for the financial year 2021-22 does not contain any adverse remarks, qualifications or reservations or disclaimers, which require explanations/ comments by the Board.

COST AUDITORS

M/s Kishore Bhatia & Associates, Cost Accountants (Registration No. 00294), are the Cost Auditors of the Company for the financial year 2021-22.

M/s Kishore Bhatia & Associates, are appointed as Cost Auditors of the Company for the financial year 2022-23 at a remuneration of '' 0.08 Crore plus taxes as applicable and reimbursement of out-of-pocket expenses. The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

COST AUDIT REPORT

As per the provisions of Section 148(1) of the Companies Act, 2013, the Company has maintained the cost records, as specified by the Central Government.

Cost Audit Report along with the Compliance Report for the financial year 2020-21, issued by M/s Kishore Bhatia & Associates, Cost Auditors, was filed with the Ministry of Corporate Affairs on August 18, 2021 (due date of filing was September 27, 2021).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (ICAI Firm Registration No. BA62445) are the Internal Auditors of the Company. Internal Audit Report, their significant observations and follow up actions taken by the Management is reviewed by the Audit Committee on a quarterly basis.

SECRETARIAL AUDITOR

Ms Neena Bhatia, Practising Company Secretary (Membership No. FCS 9492 and Certificate of Practice No. 2661) is the Secretarial Auditor of the Company for the financial year 2021-22.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report issued by Ms Neena Bhatia, Practising Company Secretary for the financial year ended March 31, 2022 does not contain any adverse remark, qualifications, reservations or declaimer except the observation that the name of the Company is appearing in the breach list displayed on the website of the BSE Limited for having foreign investment in excess of prescribed sectoral cap.

In this connection, the Company had received post-facto approval from the Department of Pharmaceuticals permitting the increase in foreign shareholding in excess of 75.11% from October 19, 2012 to January 14, 2021, which was subject to compounding with the Reserve Bank of India for the contravention of applicable rules under the Foreign Exchange Management Act, 2000. The Company is taking steps with the Reserve Bank of India in this regard.

The said Report is annexed as “Annexure II” and forms part of this Report.

REPORTING OF FRAUD BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors, Internal Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act.

HUMAN RESOURCES

The Company has 3,597 employees as on March 31, 2022. Our people are our greatest assets. They play key role in the Company’s success.

Our employees’ innovative ideas, hard work and dedication are helping build a sustainable and healthy future. As they drive our growth, we provide a supportive, inclusive culture, and programs that help ensure their continued development and encourage them to build a successful career with us.

Our talent priorities are aligned to help the organization achieve its strategic goals. The talent priorities are centered around Talent, Growth, Productivity.

Talent Strategy

A strong talent strategy was developed to help us attract and retain the right talent and emerge as the employer of choice in the Indian healthcare industry. We believe in motivating and engaging our employees through shared goals, capability building initiatives, career growth opportunities and providing an environment of transparency, accountability and positive reinforcement.

Trainning and Capability building initiatives

1. Training and Development Resources

Calendarized programs are designed for employees across grades. The programs are planned in the beginning of the new year. Our Learning and Development team caters to specific training requests from business in parallel to the open enrollments. E-Learning and virtual learning play an integral role in our learning offerings. All employees have access to a vast and varied learning portfolio to upskill themselves through the online learning portal accessible on real time basis.

2. Leadership Pipeline Building Programs

These programs focus on the development of key personnel who are part of the succession pipeline at various levels. They focus on building skills and capabilities required for the next level roles.

Transition programs : These training programs are very specific to the employees who are getting into their new roles. As an employee transitions from being an individual contributor to a manager, this program provides the necessary support in navigating the complexity of being a manager.

The program focuses on building people manager leadership competencies and comes with three levels:

• Individual Contributor to People Manager;

• Manager to Director;

• Director to General Manager.

3. Executive Coaching and Mentoring

Executive coaching and mentoring are used as development interventions for senior leaders. They are based on the needs identified for senior leaders and a 6-12 months’ engagement with an external senior coach is established. The goals are set up and agreed to by the coachee, coach and the manager. Success is measured by the achievement of milestones and development goals achieved by the coachee.

4. Mentoring Programs

Leaders like the vice presidents, general managers, senior directors and functional leaders actively engage in mentoring talent across the organization. Mentoring develops employees to drive new, cross functional expertise and perspectives. Mentors are identified and a panel is created with expertise in a variety of areas of development to address the needs of our talent with respect to business and professional growth. The mentor-mentee pairs and groups are assigned based on need, expertise and personal attributes. Tools and guidelines to maximize learning are provided.

5. Leading with Impact - Integrated Managerial Capability Program

This program was rolled out across 2000 people managers in India to help them effectively lead people and enhancing the leadership skills and understand what is expected as a leader at Abbott through 12 weeks module consisting of online learning and simulations, practical application of learnings through on the job experiences, discussion with peers on the learnings, coaching from certified global coaches and pre and post program leadership effectiveness surveys. The program outlined modules such as See, Hear, Speak, Coach and Develop.

Diversity, Equity and Inclusion (DE&I) :

Diversity continues to be a big priority for the Company. The guiding principles towards that is to promote workforce diversity and not discriminating against any employee for reasons such as race, religion, color, age, gender, ethnicity, disability, marital status and sexual orientation, in addition to any other status protected by local law. It is a focus area and is driven at a leadership level.

The Company’s Equal Employment Opportunity Policy reinforces the commitment in ensuring that workplace is free from discrimination and employment is based solely on merit.

We also identified certain key focus areas to help bring the Diversity, Equity and Inclusion vision at Abbott to life. These focus areas include :

• Workplace Policies and Practices : We strive to make our policies and processes more inclusive. The Equal Employment Opportunity Policy continues to drive our agenda on diversity, equity and inclusion.

• Hiring Practices : To review, strengthen and modify our hiring practices and approach to enable effective hiring of diverse talent across businesses.

• Capability and Mindset : To continue building managerial capability to leverage diverse ideas and talent and build the high performing, inclusive teams.

• Forums and Networks : Provide opportunities for employees to engage with and learn from different communities creating robust, extensive employee networks and resource groups.

All of these is reinforced by continuous communication and awareness to ensure we build sensitization and advocacy for an inclusive workplace.

There are various interventions for DE&I undertaken and

promoted during the year :

• Women Leaders of Abbott (WLA) : WLA takes a proactive role in connecting women within the organization and offers dynamic programs and initiatives to enhance leadership experiences and career development of women. It acts as a platform for attracting, retaining and advancing women in the organization, thereby becoming an Employer of Choice for women.

• ASCENT-Abbott Second Careers Engagement Program : This program aims to strengthen our diversity commitment by providing second career opportunity to veterans and women returning from career breaks. ASCENT aims at empowering these professionals with relevant opportunities and providing the required support and flexibility to ensure a seamless transition.

• Unconscious Bias Training for all Managers :

Building individual awareness of unconscious bias and their understanding of its impact at work.

• Happy Feet-Joy of Motherhood : Happy feet is a program designed to support and provide a conducive work environment for our women employees as they step into the phase of motherhood. The Joy of Motherhood document is shared with women employees who are expecting and also provide details of preparing for maternity leave and provide support before, during and after pregnancy.

• Wo-Mentoring Program : A dedicated initiative for high potential women employees. We have mentored 150 women employees so far and of these 40% have had a role rotation, promotions and transfers.

• Empower : As a part of this initiative, women employees receive curated content that includes theme specific webinars, videos, articles and podcasts to sharpen and enhance skills.

• Avenue : Avenue was an initiative launched in September 2021, an offering designed to support women during any relocation requirement due to a change in personal circumstances.

• Advancing Professionals Network : This is our second employee resource group set up in India and has been launched with the purpose to help our early career professionals explore the mammoth organization that Abbott is, engage and network with leaders and diverse talent across the organization. The aim is to help these individuals evolve as professionals resulting in long and meaningful careers with Abbott.

• Abbott Disability Network : To be a best-in-class network supporting people of all abilities within Abbott. We empower people with disabilities to reach their fullest career potential. We create a culture of understanding, awareness, advancement and advocacy for individuals with disabilities through education, training, outreach, volunteer events and collaboration.

Prevention of Sexual Harassment (POSH) at Workplace

The Company has an Internal Complaints Committee (ICC) in place as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Appropriate training is imparted to employees regularly through the online learning portal. All employees have completed the mandatory online training program on POSH. This training also forms part of the new Employee Orientation program.

During the year, one complaint was received by the Company/ICC under the aforesaid Act and the same was appropriately closed.

HEALTH, SAFETY AND ENVIRONMENT

The Company is committed to the protection of human health, safety and the environment. This commitment forms the basis for our EHS management systems and governance. Attainment of our long-range targets to reduce worker injuries and the environmental impacts of our business across our value chain is a priority. Meeting our targets, along with our EHS objectives, is the continuation of a long legacy of responsible business practices at Abbott that reflect our core values : Pioneering, Achieving, Caring and Enduring.

Health and Safety :

The health and safety of our employees and contract workers is paramount for Abbott. During the COVID-19 pandemic, the Company took key steps to protect and safeguard employees. Crisis Management Team (CMT) formed on Day 1 of the COVID-19 outbreak, regularly keeps assessing the situation and takes timely steps to provide all support to employees.

For those employees working at the Goa plant, local transport is provided for commuting to the workplace safely. The cleaning frequency was increased at the plant and in offices to ensure best health and hygiene and to curb the chances of infections substantially. All the norms and measures of social distancing were followed. Guidance/ Rules of the State and Central Government from time to time are being rigorously followed. The Company launched project ‘Empire’ for weekly rapid test of COVID-19 for all its employees working at plants and offices. This proved to be

very important proactive step to safeguard employees and the business amidst COVID-19. Project ‘Rainbow’ was launched for employee vaccination and thereby to safeguard them against COVID-19.

Our Goa plant donated a set of personal protective equipment (PPE) consisting of respiratory and non-respiratory protective equipment to Goa Inspectorate of Factories and Boilers. These PPEs are placed in museum and are used as an educational aid for the various courses conducted by Inspectorate of Factories and Boilers.

On-job, Classroom and Online EHS trainings are regularly arranged for employees. Training topics cover applicable EHS regulations, Abbott’s EHS technical standards, firefighting, hazardous chemical and waste handling, Slip/ Trip/Fall, Machine Guarding, Material Handling and emergency preparedness.

Site Safety Committee is formed at the plant having representation from both supervisory and non-supervisory staff. Committee meets at regular frequency to discuss and resolve EHS issues.

Goa site underwent Global EHS audit in month of November 2021. The audit was successful, without any critical/major findings.

New Occupational health center was constructed with dedicated observation room for patients at plant. New ambulance was procured, which can facilitate mobilizing of casualty using wheeled stretcher. Automatic sprinkler system was installed in FG store area including the FG expansion block thus providing 100% sprinkler coverage to the most expensive block of the Goa plant.

We upgraded Dust Extraction System at the plant which has benefits like compliance with Abbott Global Engineering standard, approval as per FM, ATEX and NFPA, air quality superior than relevant OSHA standard, energy efficiency and explosion protection.

Detailed Machine guarding assessment was carried out and corrective actions are being taken.

Special focus is maintained on critical safe work initiatives like contractor safety, hand safety, hot work and working on heights.

Mass awareness programs such as celebration of National Safety Week and Abbott EHS week were conducted to help build a sustainable EHS culture.

For EHS cultural enhancement, we are running Behavior Based Safety - BBS program which includes observation and correction of unsafe acts. There also exists system for reporting of unsafe conditions and near miss. Such initiatives have greatly helped improve positive EHS culture.

Road Safety :

Various Road Safety programs were conducted for field employees during the year :

• 100% of the sales employees completed the online defensive riding refresher training module;

• 430 new sales employees were trained virtually on defensive riding skills and behaviors, and COVID-19 Safety guidelines and behaviors, within 60 days of joining;

• 362 new sales employees were provided with 2 helmets (one for self and one for the pillion rider) as a part of the joining kit;

• A new online defensive driving refresher training module will be rolled-out to all field employee. This module covers all the new risks that a driver faces post COVID-19.

To further enhance employee engagement on road safety and defensive riding, a series of initiatives like quizzes and creative competitions were rolled-out with good participation from employees.

Environment :

A responsibility towards the environment is part of Abbott’s mandate. We continuously endeavor to minimize the use of renewable resources and cut down on carbon emission. In all our initiatives, a holistic approach is adopted and efforts are made to curtail adverse environmental impact, if any. The Goa site continued to implement multiple energy, water conservation and emission reduction projects.

The Company has a state-of-the-art effluent treatment plant with parameters of treated effluent well within the limit set by the local State Pollution Control Board. The plant is a zero-discharge plant. The rainwater harvesting project continues to save water by reducing the intake of purchased water.

The Company continued to focus on process optimization and yield improvement through various initiatives. Along with increasing productivity, these initiatives have helped prevent the discharge of raw materials and solvents into the environment.

Furthermore, gas emissions from the boiler and generator stacks as well as the ambient air quality are monitored regularly and they are well within the limits set by the State Pollution Control Board. Vermi-composting unit is in place to convert canteen food waste into organic manure, which is used in the lawns and in the plantation inside the Goa factory premises.

Out of total non-hazardous waste generated at site, 60% of the waste is used for the beneficial purpose without undergoing any recycling process. Remaining 40% of waste is sent for recycling.

Out of total hazardous waste generated at site, 0.7% of the waste is incinerated without energy recovery, 0.4% is sent for recycling (Used oil and E-waste). The balance hazardous waste is disposed off through co-processing (in cement industries).

During the year, World Environment Day was celebrated as EHS mass awareness program.

Our plant is certified as Zero Waste to Landfill facility which means no waste is disposed off through landfill. Out of total fresh water intake of site, 1.5% of water is consumed is obtained from rain water harvesting. The plant has installed digital Environmental Display Board at site in compliance towards the requirement of Central Pollution Control Board.

Plastic Waste Management :

The Company is adhering to the requirements of Plastic Waste Management Rules as laid down by the Central Pollution Control Board.

For plastic packaging waste collection and processing, the Company has engagement with various waste management agencies for plastic waste processing facilities. During the financial year, the Company has collected and processed 1,500 MT of plastic waste from all the states and union territories of India where it operates.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO

The required information under the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. are annexed as “Annexure III” and forms part of this Report.

ANNUAL RETURN

The Annual Return of the Company as on March 31, 2022 has been placed on the website of the Company at https://www.abbott.co.in/investor-relations/financials/ annual-return.html

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosures required in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure IV” and forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing

Particulars of Employees, which is available for inspection by the Members up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at [email protected]

CORPORATE GOVERNANCE REPORT

Corporate Governance Report and Certificate from the Statutory Auditors of the Company on compliance of the conditions of Corporate Governance pursuant to the requirements of the SEBI Listing Regulations, form part of this Report.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report as required under Regulation 34 of the SEBI Listing Regulations forms part of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (SS1 and SS2) respectively relating to Meetings of Board, its Committees and General Meetings.

DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company’s operations in future.

INDUSTRIAL RELATIONS

The Company has overall cordial industrial relations. The Company continues to receive strong support from distributors, suppliers, vendors, stockists and other partners.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year.

GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review :

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

3. The Company does not have any joint venture or subsidiaries.

4. There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

5. There are no instances of one-time settlement during the financial year.

ACKNOWLEDGEMENT

Your Board expresses gratitude towards all the employees, business partners, institutions, banks and the Members, for their continued trust and support to the Company.

For and on behalf of the Board

Vivek V Kamath Sudarshan Jain

Managing Director Director

DIN : 06606777 DIN : 00927487

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Mar 31, 2021

Your Directors have pleasure in presenting their Seventy-seventh Report and the Audited Financial Statements of the Company for the financial year 2020-21.

FINANCIAL HIGHLIGHTS

C in Crore)
Particulars	For the year ended March 31, 2021	For the year ended March 31, 2020
Revenue from Operations	4,310.02	4,093.14
Other Income	80.90	114.39
Total Income	4,390.92	4,207.53
Profit Before Tax	925.95	802.70
Profit After Tax	690.69	592.93
Retained Earnings and Other Comprehensive Income (OCI)
Balance brought forward	1,922.54	1,567.49
Profit After Tax	690.69	592.93
OCI arising from remeasurement of employee benefits	1.25	(4.96)
Dividend-FY 2019-20	(531.23)	-
Dividend-FY 2018-19	-	(138.12)
Dividend Distribution Tax *		(28.39)
Transfer to Reserves	(69.07)	(59.29)
Implementation of IND AS 116 (Net of Tax)*		(7.12)
Balance carried forward	2,014.18	1,922.54

*Under modified retrospective method.

#Effective April 1, 2020, dividends distributed by the Company shall be taxable in the hands of the shareholders.

DIVIDEND

Your Directors recommend a final dividend of '' 120/-and special dividend of '' 155/- per share (previous year : final dividend of'' 107/- and special dividend of'' 143/- per share) for the year ended March 31, 2021 on 2,12,49,302 fully paid-up Equity Shares of '' 10/- each. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of '' 584.36 Crore (previous year : '' 531.23 Crore).

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the proposed dividend for the year ended March 31, 2021 after deduction of tax at source.

DIVIDEND DISTRIBUTION POLICY

Dividend Distribution Policy adopted by the Company in terms of requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is available on the Company’s website at https://www.abbott.co.in/investor-relations/policies.html The said Policy lays down various factors which are considered by the Board while recommending dividend for the year.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

ECONOMIC OUTLOOK

India has been one of the fastest growing large countries in the past decade, regularly achieving an annual growth of 6-7%. The rise in GDP is largely credited to factors including urbanization and improvement in the efficiency and productivity of technologies.

As per IMF, the economy contracted by 8% in 2020 owing to the COVID-19 pandemic and lockdown. The Government has made significant efforts towards safeguarding citizens and energizing the economy.

Going ahead, accelerating global recovery, ample liquidity/ low rates are expected to aid upturn. Growth in 2021 was expected to bounce back to 12.5% due to recovery post easing of lockdowns. However, second wave, high caseloads, new lockdowns, rising input prices, MSME stress and weak labour market are some of the headwinds in need of immediate addressal. A combination of policy reforms and rapid digitalisation continue to boost the Indian economy onto a higher growth trajectory, despite the debilitating effects of the pandemic. Monetary and Fiscal support is crucial in this regard. The Reserve Bank of India is committed to keeping rates well anchored and the Government must keep up spending. Finally, quick progress on vaccination is paramount.

INDUSTRY REVIEW

The global pharmaceutical industry has seen an increased use of medicines over the past decade where the rate of growth of medicine usage has outpaced both population and economic growth. This expansion has been largely on account of the pharmemerging markets.

The Indian pharmaceuticals industry is poised for a big leap forward in this decade. Health, science and innovation have come into sharp focus as never before. The developments over the past year have emphasized the importance of an innovation ecosystem, a robust infrastructure for production of drugs and pharmaceuticals and the need to constantly build a huge talent pool of scientists, researchers and technologists who can be the arrowheads for the future. India has emerged as a pharmacy to the world, supplying critical drugs and vaccines in the course of this pandemic.

Indian pharmaceuticals industry supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in UK as per the Indian Ministry of Commerce. It is also the largest producer of generic medicines and vaccines, occupying 20% volume share in generics and 62% in vaccines as per the National Indian Promotion Agency.

As per IQVIA, India’s domestic Pharmaceuticals Market (IPM) is estimated at '' 153,534 Crore in 2021 with growth of 4.4% v/s 2020. Acute therapies dominate IPM with 64% of total sales, however the chronic segment shows faster growth. There are estimated to be over 8,000 pharmaceutical companies, however the market is dominated by a core of around 300 manufacturers whose products generate the majority of sales in most therapy areas. Domestic manufacturers claim around three-quarters of the market in value terms.

Branded generics dominate the domestic prescription pharmaceutical market, accounting for around 80% of sales by value as per IQVIA. While efforts to raise the regulatory bar are being pursued, brand names and company image are still widely regarded as de-facto indicators of quality. The market is expected to grow at 8% per annum over the next 5 years driven by high economic growth, increasing penetration of health insurance and increased private sector investment.

OPPORTUNITIES AND CHALLENGES

The COVID-19 pandemic has transformed the industry with increasing digitization and traction of e-pharmacy and pharmacy chains. Increased healthcare coverage and better policy support are likely to boost growth whereas adverse regulation could impact in a negative way.

Factors which impact Industry and Company growth include :

• Technology and Digitalization : The COVID-19 pandemic has changed the comfort level of patients and doctors with using technology. Over three-quarters of doctors also expect to conduct remote consultations more widely in the long term. While results of tele-detailing by medical representatives have been mixed, a substantial proportion of physicians have proved receptive to these shifts, which appear likely to trigger a permanent change in promotional

models. Going forward, there will be a greater emphasis placed on the sales representative’s ability to communicate effectively through digital channels.

• Ayushman Bharat : AB-PMJAY targets to cover around 500 million of the country’s poorest individuals with health insurance of '' 5 Lakh per family per annum for secondary and tertiary care hospitalization. By May 2021 it had issued approx. 150 million e-cards, however take up was slow with only 50% of the total budget allocated being used. The transformation of public primary care facilities into Health and Wellness Centers is faring better, with more than 75,000 Health and Wellness Centers operational by May 2021.

• E-pharmacy and pharmacy chains : The retail pharmacy sector is estimated to comprise at least 6,00,000 licensed outlets. Most are small, independent businesses, but pharmacy chains and e-pharmacies are a growing force. Pharmacy chains have expanded aggressively with MedPlus at 1,650 stores and Apollo at 3,700 stores. E-pharmacies’ share of the retail market is currently estimated to stand at around 5% on an all-India basis, but shares are topping 15% in some major cities and expected to grow. The Company has engaged with leading players in this space and is poised to benefit from any growth.

• Price Controls and Regulations : The 2021 update of the National List of Essential Medicines (NLEM) is likely to increase downward pressure on drug prices. Additional downward pressure could come from plans to cap the MRP of Non-NLEM drugs by limiting trade margins, as well as from expansion of the span of DPCO price controls. While those plans may have been put on hold in the face of the COVID-19 pandemic, both are expected to re-emerge in the medium term.

• OTC Drug Regulations : With rising patient empowerment and growing willingness to self-medicate, there is growing demand for drafting a well-defined OTC policy. A committee tasked with the development of recommendations on the establishment of an explicit OTC medicines category was set up in 2016. Any policy mandate is likely to benefit the Company given its dedicated OTC vertical.

• Uniform Code of Pharmaceuticals Marketing Practices (UCPMP) : UCPMP, while currently voluntary, could become mandatory in future. A mandatory code would require ethical marketing practices to be followed by all companies. Given that the Company has a strong compliance process in place, it would be well positioned under a strict enforcement of UCPMP.

REVIEW OF OPERATIONS

The Company has consistently grown above market in

the last few years by keeping a clear focus on providing

scientific, trusted products, backed by expert clinical support.

The Company’s position has been enhanced through consistent engagement with doctors, increasing geographic penetration, strong customer insights, innovative products and comprehensive pill plus service approach.

Financial Performance

Revenue from Operations : Revenue from Operations for the year ended March 31, 2021 is '' 4,310.02 Crore in comparison to '' 4,093.14 Crore last year, recording a growth of 5.3% over the previous financial year.

Profit Before Tax : Profit Before Tax for the year ended March 31, 2021 at '' 925.95 Crore grew by 15.4% over the previous year.

Other Income : The Other Income stood at '' 80.90 Crore, mainly comprising interest income from bank fixed deposits. The Company continues to invest in fixed deposits with banks that have high credit ratings, with a view to safeguarding the principal and maintaining liquidity. Income from bank deposits reduced by 29.4% due to reduction in interest rates. The Company has an investment portfolio of '' 2,332.14 Crore as on March 31, 2021.

Material Cost : The Material Cost increased on account of inflation, but was compensated by improved sales price realisation, resulting in a marginal decrease in the same as a percentage to Sales from 57.1% in financial year 2019-20 to 56.3% in the current year.

Employee Cost : The Company increased its employee strength to 3,585. The Employee Cost as a percentage to Sales shows a marginal decrease at 11.6% in the current year vis-a-vis 11.7% in the financial year 2019-20. The increase in Employee Cost by 3.5% over the last year is mainly due to merit increase.

Other Expenses : Other Expenses including Depreciation and Finance Cost decreased by 5.2% over the last year. Also, as a percentage to Sales, it has decreased to 13.7% vis-a-vis 15.1% in the previous year.

Key Financial Ratios :
Particulars	2021	^^^2020	Change
Debtors Turnover (Days)	15.2	13.8	10.1%
Inventory Turnover (Days)	6.9	7.2	(4.2%)
Interest Coverage Ratio*	51.7	95.1	(45.6%)
Current Ratio	3.4	3.6	(5.6%)
Debt Equity Ratio	0.5	0.5	-
Operating Profit Margin (%)	22.0	20.0	10.0%
Net Profit Margin (%)	16.0	14.0	14.3%
Return on Net Worth (%)	27.0	26.0	3.8%
*Interest Coverage Ratio has dropped because of accounting impact o Ind AS 116-Leases.

There is no significant change (i.e. change of 25% or more as compared to the immediately previous financial year) in the Key Financial Ratios except Interest Coverage Ratio.

Detailed explanation of ratios :

(i) Debtors Turnover (Days)

The above ratio is used to quantify a company’s effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a company uses and manages the credit it extends to customers. It is calculated by dividing Revenue from Operations by average trade receivables.

(ii) Inventory Turnover (Days)

Inventory Turnover is the number of times a company sells and replaces its inventory during a period. It is calculated by dividing Revenue from Operations by average inventory.

(iii) 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 Earnings Before Interest and Taxes by finance cost.

(iv) 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.

(v) Debt Equity Ratio

The Debt Equity 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. It is calculated by dividing a company’s total liabilities by its Shareholder’s equity.

(vi) 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 Earnings Before Interest and Taxes by Revenue from Operations.

(vii) 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 the profit for the year by Revenue from Operations.

(viii) Return on Net Worth (%)

Return on Net Worth is a measure of profitability of a company expressed in percentage. It is calculated by dividing total comprehensive income for the year by average capital employed during the year.

Business Performance

The Company operates in a single reportable business segment i.e. “Pharmaceuticals”.

The Company provides products and solutions across various therapeutic areas such as Women’s Health, Gastroenterology, Central Nervous System, Metabolics, Multi-Specialty (Pain Management, Insomnia, Nutritional supplements and Vitamins), Vaccines, Consumer Health, etc.

Performance for the year under review in respect of the Company’s various therapeutic segments are highlighted below :

Women’s Health : This portfolio was adversely impacted during the year due to key elective procedures such as In-Vitro Fertilisation (IVF) being postponed owing to the ongoing COVID-19 pandemic. Overall, there was a de-growth of 19.8% during the year. The key brand under Women’s Health is Duphaston (miscarriage and IVF). The Company has robust plans in place to address generic competition to lead brand Duphaston, leveraging its high level of equity, credibility and trust with gynecologists and IVF specialists. The launch of a first-of-its-kind “Tender Love and Care” program to provide virtual counseling and curated lifestyle management support for couples undergoing pregnancy has provided a significant boost to our value proposition in this therapy. Regaining strong growth trajectory in Duphaston, shaping menopause therapy and expanding into new areas through launch of new products and indication expansions are the key priorities in this space. During the year, Parihep 60 (deep vein thrombosis) was launched.

Gastroenterology : The Gastro portfolio was a key growth driver for the Company with 7.9% growth during the year. This was mainly driven by growth of top brands Cremaffin Plus (constipation), Udiliv (cholestatic chronic liver disease) and Duphalac (constipation). Increased geographic presence, relevant line extensions and differentiated marketing contributed to the sustained growth. Focus on new launches has yielded substantial results with Digeraft (antacid) being one of best performing new products in recent years. Beyond-the-pills offerings have also seen significant scale up and we continue to invest in this area to connect and support our patients better. A robust new product introduction process through extensive market research has helped to further enhance the portfolio. Going forward, focus remains to launch new products and support our consumers with a comprehensive service offering. Besides Digeraft, we have launched 3 other new products viz. Colohep (fatty liver disease), Pankreoflat HD (indigestion), Rowasa 2 (ulcerative colitis).

Metabolics : This portfolio achieved a growth of 7.0% mainly driven by Thyronorm (hypothyroidism) which continues to maintain it’s leadership position*. We have increased our focus on enhancing our digital footprint in

all therapy shaping initiatives especially during COVID-19 period and look forward to scaling these up going forward. Consolidating presence in space of hormone management, we launched Cabernorm in January 2021 which is preferred widely to treat hyperprolactinemia. Combinorm continues to establish concept of usage of pre-probiotics in treatment of bacterial vaginosis.

Central Nervous System (CNS) : The CNS business achieved a growth of 10.0% which was higher than the market*, mainly driven by Vertin (vertigo). The other key brands in CNS are Prothiaden (pain & depression) and Inderal (migraine & hypertension). We have restructured our sales force to drive higher focus on the key brands and have seen positive results from that. Innovative new products, like the mouth dissolving Vertin MDS strip (first globally) (vertigo), Lacoxa, a syrup formulation of Lacosamide (which is a new generation of anti-epileptic) and Brivetoin (anti-epileptic) were launched during the year. Growth of these new products will be a priority for the business going forward.

Multi-Specialty : Under Multi-Specialty, the Company offers products for insomnia, nutritional supplements and vitamins, Pre-term labor and pain management. This portfolio has shown a growth of 6.6% during the year despite the pandemic situation. Zolfresh (insomnia), Arachitol portfolio (Vitamin D deficiency), Brufen (analgesics) and Duvadilan (preterm labor) are the key contributors in the business. We pioneered a crossfunctional initiative for process enhancement which helped us build a progressive business.

To expand portfolio, 3 new products with patient centric solutions, Arachitol Nano Daily 2K IU with innovative Acudose caps (Vitamin D deficiency), Doxstem 20 (antiemetic) and Digecaine (antacid) were launched.

Vaccines : The Vaccines portfolio showed strong doubledigit growth of 42.3%, which was mainly driven by Influvac (prevention of influenza). Influvac is the key brand for the Company under this portfolio and leads its participated market. The Company has a licensing arrangement with Bharat Biotech India Limited to market vaccines in immunology segment. The key brands under this arrangement are Enteroshield (prevention of typhoid) and Rotasure (prevention of rotavirus gastroenteritis). The launch of a very critical adult immunization guideline for vaccine-preventable diseases by the Association of Physicians in India (API) will help us increase awareness and equip Healthcare Practitioners (HCP) with evidence-based information to guide vaccine recommendation and administration. We have also conducted a special vaccination drive for HCPs during the lockdown so that the frontline workers and their families could get their flu vaccines without supply constraints. Going forward, a key priority is to establish adult immunization segment in India through a dedicated adult vaccination task force.

We are looking to expand the portfolio beyond current set of vaccines and target segments. During the year, we launched Influvac Quadrivalent 0.5 ml vaccine (prevention of influenza) which will help us receive advocacy from doctors and launched JE Shield (prevention of japanese encephalitis).

Consumer Health : During the year, this portfolio delivered growth of 15.9% despite pandemic challenges. Digene, flagship brand in antacids strengthened its positioning and was awarded the Economic Times “Best Brand Award” for 2020. We further expanded the portfolio with the launch of Digene Ultra fizz in May 2020, a differentiated innovation with 50% higher ANC (acid neutralizing capacity) than leading powder antacids. Cremaffin continued its efforts on consumerising the brand post its Cx switch. We increased awareness of our scientific positioning of gentle and effective relief through direct-to-consumer campaigns and new packaging launch along with increasing availability and visibility at pharmacists.

We extended our footprint in analgesics category with launch of Brufen Power Spray. With a category-first unique metered spray and double strength diclofenac formula it provides targeted and powerful pain relief.

IMPACT OF COVID-19

Throughout the year, the Company and its employees displayed speed, resilience and agility to ensure minimum disruption in business operations by proactively assessing the demand and ensuring uninterrupted supply of our products. There has not been any significant adverse impact on the business operations.

The Management has exercised due care, made reasonable judgements and estimates, interalia, in determining carrying amounts of trade receivables, property, plant & equipment, inventories and other financial assets based on the information available to date, while preparing the financial results as of and for the year ended March 31, 2021.

The second wave of COVID-19 pandemic has been fast-moving and has had very serious and unprecedented effects across various parts of the country. Our unwavering focus remains to ensure the uninterrupted supply of our medicines to meet the needs of our customers.

The Company’s plant at Goa is functioning at normal capacity with stringent social distancing norms keeping health and safety of employees at priority. Office based employees have been working remotely as per the State Government guidelines. There is no significant disruption in availability of raw materials, manufacturing, supply chain and distribution.

In view of the uncertainties regarding the extent and duration of the current COVID-19 situation, we are unable to predict the future impact on the business operations. The Company will continue to closely monitor the situation and take appropriate measures in an attempt to mitigate adverse impact.

MEDICAL RESEARCH AND KNOWLEDGE SHARING INITIATIVES

Evidence-based medicine is gaining importance in empowering healthcare professionals to ensure better patient care. Research studies undertaken by the Company, ranging from real-world evidence-based studies (observational or epidemiological) to registration studies, have been instrumental in defining and driving organizational strategies and creating high-quality scientific evidence, thus aiding the optimisation of healthcare.

During the year, the Company executed 8 new studies, published 8 articles in major indexed journals. All the studies were conducted in compliance with Good Clinical Practice (GCP) and regulatory requirements.

Capability building of healthcare professionals has remained a high strategic priority for the Company. During the year, more than 3,500 medical education programs were conducted towards achieving this objective. The Company also partnered with over 12 medical associations to drive capability building in various therapy areas. Furthermore, as a continued commitment towards knowledge dissemination, 100 workshops were conducted, training approximately 20,300 medical staff. Over and above these, over 4,000 patient awareness programs were conducted on multiple therapy areas across India.

OUTLOOK

As per IQVIA, the pandemic will continue to affect healthcare provision and pharmaceutical sales through 2021 due to emergence of new variants that can spread faster and also vaccination availability challenges. While economic growth is forecast to rebound in 2021, the after effect of the economic downturn during the pandemic will continue to impact patient spending on healthcare and drugs negatively through 2021. However, even in these challenging times we strive for market beating growth. We have adapted to newer ways of working and provided continuous support to our patients and doctors. The following are expected to be major drivers of growth :

• Multi-channel doctor engagement : A key focus of the Company is engaging with doctors through multiple physical and digital touchpoints. This is likely to increase the productivity of the field force enabling them to reach a larger base of doctors. We are also constantly revamping our knowledge platforms to be able to provide more relevant information to doctors.

• Beyond-the-pill patient support : Engaging patients directly for education, counselling or compliance support is crucial today due to their increased awareness. The Company has been at the forefront of patient support programs and has continued expansion of the same with new programs including a first-of-its-kind “Tender Love and

Care” program to provide virtual counseling and curated lifestyle management support for couples undergoing pregnancy. Our existing programs have shown success in ensuring therapy adoption and adherence and we plan to explore targeted partnerships with other industry players and start-ups to expand the same.

• Pharmacy engagement : The OTC vertical has played a key role in establishing deeper relationships with our pharmacists. Further, strengthening of our channel management capabilities and early partnerships with emerging players will be an important focus going ahead.

• Therapy shaping : We are prepared to accelerate growth of current brands and future launches with clearly defined strategies, developed through in-depth analyses of market trends along with our capabilities and strengths. Shaping of key therapies is critical to drive therapy leadership and ensure that we continue on our path of consistent market beating growth.

RISKS AND CONCERNS

The Pharmaceutical Industry in India is considered amongst the most critical and hence is strictly regulated by the Government. Increase in the list of drugs covered by the National List of Essential Medicines (NLEM), restrictions on trade margin mark-ups and amendments in pricing regulations will create price pressure on the industry. Growing awareness about cheaper alternatives to branded generics and Government efforts for their increased penetration could also impact volume growth. Uncertainty on implementation of Uniform Code of Pharmaceuticals Marketing Practices (UCPMP) and any adverse regulation could cause a negative impact as well.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an internal control mechanism commensurate with its size and nature of business. These systems provide a reasonable assurance on achievement of its operational, compliance and reporting objectives, including safeguarding the Company’s assets, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

This mechanism is sound in design and the framework is continuously evaluated for effectiveness and adequacy. The mechanism operates through well-documented standard operating procedures, policies and process guidelines. Periodic analysis and reviews are conducted by the Senior Management to assess its efficiency. Also, the same is discussed with auditors on a regular basis.

The Internal audit plan is finalized based on current perception of internal control risk and compliance requirement in consultation with the operating divisions. The Internal

Auditors, as a part of their audits, review the design of key processes to assess the adequacy of controls and also propose remedial measures, wherever required.

The Internal audit reports issued by the Internal Auditors are discussed with the Senior Management and presented to the Audit Committee on a quarterly basis. An independent and empowered Audit Committee reviews the significant observations and assesses the adequacy of the actions proposed while monitoring their implementation. The Internal Auditors conduct a quarterly follow up for implementation/remediation of all audit recommendations and the status report is presented to the Audit Committee regularly.

The Company has implemented both preventive and detection controls. Appropriate corrective actions taken to reduce the risks include the following :

• The Abbott Code of Business Conduct requires annual certification by all employees;

• The Compliance Committee is formed with representatives from all the operating groups;

• Senior Management has oversight of the compliance programs;

• The Business Compliance Cell is assigned the responsibility of training, monitoring and ensuring employees’ compliance with the Company’s policies and procedures;

• The Company has a Whistle Blower mechanism in place;

• Internal investigation reports are presented before the Audit Committee on a quarterly basis;

• Business divisions have periodic meetings with the Director-Office of Ethics and Compliance, to monitor and discuss compliance with various business processes.

The Company Management has assessed the effectiveness of internal controls over financial reporting for the year ended March 31, 2021 and basis the assessment, believes that the processes are working efficiently and effectively.

The Statutory Auditors have issued unmodified audit report on the adequacy of the internal controls over financial reporting and its operating effectiveness.

DIRECTORS

The Board of Directors of the Company, basis the recommendation of the Nomination and Remuneration Committee, have approved the

• Re-appointment of Ms Anisha Motwani (DIN : 06943493), as Independent Director for a period of 5 (five) years effective April 25, 2021, not liable to retire by rotation;

• Re-appointment of Mr Rajiv Sonalker (DIN : 07900178), as Whole-time Director for a period of 2 (two) years effective July 1, 2021, not liable to retire by rotation.

These re-appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.

During the year, the Board, basis the recommendation of the Nomination and Remuneration Committee, had appointed Ms Karen Peterson (DIN : 08865448) as Additional Director effective September 8, 2020. Ms Peterson resigned from the Board effective close of business hours on May 18, 2021.

In compliance with Section 152 of the Companies Act, 2013, Mr Kaiyomarz Marfatia (DIN : 03449627) and Mr Ambati Venu (DIN : 07614849) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. All the Independent Directors have registered themselves in the Independent Director’s Database as managed by the Indian Institute of Corporate Affairs.

Number of Board Meetings

Six Board Meetings were held during the year on April 27, 2020; June 8, 2020; August 7, 2020; November 11, 2020; February 9, 2021 and March 11, 2021. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013, Rules framed thereunder read with the Secretarial Standards on Meetings of the Board of Directors.

Policy on Nomination and Appointment of Directors/ Criteria for appointment of Senior Management and Remuneration Policy

The Company has adopted the Policy on Nomination and appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as per the provisions of Section 178(3) of the Companies Act, 2013 and the Rules framed thereunder. The said Policies are available on the Company’s website at https://www.abbott.co.in/investor-relations/ policies.html

Nomination Policy acts as a guideline for determining qualifications, positive attributes, independence of Directors and matters related to the appointment and removal of Directors and Senior Management. The Policy lays down :

i) criteria and terms and conditions with regard to identifying suitable candidates who are qualified to become Directors and Senior Management;

ii) appointment mechanism for Managing Director/Executive and Non-Executive Directors/Independent Directors/Key Managerial Personnel and Senior Management;

iii) tenure of Managing Director/Executive Directors/ Independent Directors;

iv) their removal process and succession planning.

Remuneration Policy lays down the Company’s philosophy and criteria as well as manner of determining the remuneration of Managing Director, Executive/Non-Executive Directors, Independent Directors, Senior Management, Key Managerial Personnel and other employees.

Performance Evaluation of the Board, Board Committees and Directors

The Company has adopted the Board Evaluation Framework and Policy based on recommendation of the Nomination and Remuneration Committee, which sets a mechanism and criteria for evaluation of the Board, Board Committees and Directors, including Independent Directors. The same is available at https://www.abbott.co.in/investor-relations/policies.html

As per the aforesaid Framework, Board and Board Committees evaluation is done by the Board through self-assessment and group discussions. Parameters for evaluation of the Board include structure and composition of the Board, frequency and number of meetings, devotion of time for important business matters-financials, monitoring Internal Controls/ Code of Conduct/Insider Trading Policy/Risk Management Framework and Emerging Risks/Governance and compliance issues, adequate access to information for effective decisionmaking, strategic guidance to management through regular interactions and cohesiveness in the overall working that facilitates open discussion.

Parameters for evaluation of the Committee include structure and composition of the committees, adequacy of charter and working procedure, frequency of meetings, if the Committee is functioning as per the charter and if the Committee recommendations contribute effectively to the Board decision making.

Evaluation of the Directors is done by the Board (excluding the Director whose evaluation is being done). Parameters for evaluation of the Directors include skill set, knowledge, attendance, effective participation at Board/Committee Meetings, their contribution at the Meetings, leveraging on his/ her experience to provide the necessary insights/guidance on Board discussions and display of candor in expressing views even when they are in divergence with the rest of the Board, etc.

Independent Directors at their separate meeting evaluate the performance of the Board, Non-Independent Directors and the Chairman basis the feedback from Executive and NonExecutive Board Members.

During the year 2020-21, questionnaire along with feedback forms were circulated to the Directors for evaluation of the Board, Committees and Directors. The Board discussed the responses received from each of the Directors on the same. The Board also confirmed that the Independent Directors continue to fulfil criteria prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and remain independent from the Management. Independent Directors, at their separate meeting, reviewed performance of Non-Independent Directors, Board and the Chairman, considering the views of the other Executive and NonExecutive Directors.

KEY MANAGERIAL PERSONNEL

Mr Anil Joseph, Managing Director, Mr Rajiv Sonalker, Chief Financial Officer and Ms Krupa Anandpara, Company Secretary, are the Key Managerial Personnel of the Company as on March 31, 2021.

AUDIT COMMITTEE

The Audit Committee comprises of Ms Anisha Motwani (Chairperson), Mr Munir Shaikh, Mr Sudarshan Jain and Ms Shalini Kamath. Role of the Committee is provided in detail in the Corporate Governance Report, forming part of this Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has in place Vigil Mechanism/Whistle Blower Policy called “Abbott India Limited-Procedure for Internal Investigations”. It lays down a mechanism for reporting and investigation of all unethical behavior, alleged or potential violations of laws, regulations or Abbott Code of Business Conduct, policies, procedures or other standards.

A report indicating the number of investigations conducted including the status update is presented before the Audit Committee and the Board on a quarterly basis.

The said Policy is available on the website of the Company at https://www.abbott.co.in/investor-relations/policies.html

Employees have numerous ways to voice their concerns and are encouraged to report the same internally for resolution. The said Policy provides for adequate safeguards against retaliation and access to the Chairperson of the Audit Committee.

Any concerns/grievances can be communicated through various sources as provided under the said Policy or via toll free number 0008001001058 or online at https://speakup.abbott.com

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors state that :

a) in the preparation of the Annual Accounts for the year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and 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 profits of the Company for that year;

c) they have taken proper and sufficient care 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) they have prepared the Annual Accounts of the Company on a going concern basis;

e) they have laid down adequate Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively;

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

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality

The Company has in place the Policy on dealing with Related Party Transactions and Materiality in terms of requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said Policy is available on the Company’s website at https://www.abbott.co.in/ investor-relations/policies.html

As per the said Policy, all Related Party Transactions are preapproved by the Audit Committee and Board, as and when required. The details of such transactions are also reviewed by the Audit Committee on a quarterly/annual basis. Material transactions (transactions exceeding 10% of the annual turnover as per the last audited financial statements), if any, with any Related Party are pre-approved by the Shareholders.

The said policy was reviewed and updated at the Meeting of Board of Directors held on May 18, 2021 in line with the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Details of Related Party Transactions

The Company enters into the business transactions with various Abbott affiliate companies (“Related Parties”) in the normal course of business and on arm’s length basis. All the transactions with the Related Parties during the financial year 2020-21 were pre-approved by the Audit Committee. Prior approvals of the shareholders are in place for the Material Related Party transactions. Actual transactions were reviewed by the Audit Committee on a quarterly basis. The details of the same are provided in Note 41 to the Financial Statements.

Pursuant to Regulation 23(9) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has filed half yearly reports on Related Party Transactions with the BSE Limited.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after completion of the seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

During the year, the unpaid dividend and shares were transferred in line with the above, the details of which have been given in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Policy

The CSR Policy is available on the Company’s website at https://www.abbott.co.in/investor-relations/policies.html The said Policy has been updated to meet with the requirements of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

CSR Programs/Activities undertaken during the financial year 2020-21

The Company spent an amount of '' 13.88 Crore on various CSR programs during the financial year 2020-21. The Annual Report of the CSR activities undertaken by the Company is annexed as “Annexure I” and forms part of this Report.

RISK MANAGEMENT FRAMEWORK

The Company recognises Risk Management as an integrated, forward-looking and process-oriented approach. It has developed a Risk Framework which is directed to enable the Management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. It enables to avoid pitfalls and surprises along the way.

• Aligning risk appetite and strategy-The Company considers its risk appetite in evaluating strategic alternatives, setting related objectives and developing mechanisms to manage related risks.

• Enhancing risk response decisions-Risk Management provides the rigor to identify and select among alternative risk responses-risk avoidance, reduction, sharing and acceptance.

• Reducing operational surprises and losses-The Company strives to gain enhanced capability to identify potential events and establish responses, reducing surprises and associated costs or losses.

• Identifying and managing multiple and cross-enterprise risks-The Company faces a variety of risks affecting different parts of the organization, and risk management facilitates effective response to the interrelated impacts, and integrated responses to multiple risks.

• Seizing opportunities-By considering a full range of potential events, the Company is positioned to identify and proactively realise opportunities.

• Improving deployment of capital-Obtaining robust risk information allows management to effectively assess overall capital needs and enhance capital allocation.

These capabilities, inherent in this Framework, enable the Company to achieve the performance and profitability targets and guard against loss of resources. It is also directed to help ensure effective reporting and compliance with laws and regulations, avoid damage to the Company’s reputation and associated consequences. The Company’s operations and its business divisions are included in the scope of the Risk Management Framework.

A comprehensive exercise is done by the Risk Management Core Team comprising of representatives of relevant functional experts on an annual basis who help to identify additional mitigating actions that may be required to ensure risk management keeps pace with the business strategy. The Company’s Chief Financial Officer presents an overall Risk Management update to the Risk Management Committee, Audit Committee and Board once a year.

STATUTORY AUDITORS

5 R B C & CO LLP, Chartered Accountants (ICAI Firm Registration No. : 324982E/E300003), were appointed as the Statutory Auditors at the Seventy-fifth Annual General Meeting of the Company held on August 22, 2019 for a period of five years i.e. from financial year 2019-20 to financial year 2023-24, to hold office till the conclusion of the Eightieth Annual General Meeting of the Company.

AUDITORS’ REPORT

The Auditors’ Report for the financial year 2020-21 does not contain any adverse remarks, qualifications or reservations or disclaimers, which require explanations/comments by the Board.

COST AUDITORS

M/s Kishore Bhatia & Associates, Cost Accountants (Registration No. 00294), are appointed as the Cost Auditors of the Company for the financial year 2020-21 at a remuneration of '' 0.08 Crores plus taxes as applicable and reimbursement of out-of-pocket expenses.

The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

COST AUDIT REPORT

As per the provisions of the Section 148(1) of the Companies Act, 2013, the Company has maintained the cost records, as specified by the Central Government.

Cost Audit Report along with the Compliance Report for the financial year 2019-20, issued by M/s Kishore Bhatia

6 Associates, Cost Auditors, was filed with the Ministry of Corporate Affairs on August 24, 2020 (due date of filing was September 27, 2020).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (ICAI Firm Registration No. BA62445) are the Internal Auditors of the Company. Internal Audit Report, their significant observations and follow up actions taken by the Management is reviewed by the Audit Committee on a quarterly basis.

SECRETARIAL AUDITOR

Ms Neena Bhatia, Practising Company Secretary (Membership No. FCS 9492 and Certificate of Practice No. 2661) is the Secretarial Auditor of the Company for the financial year 2020-21.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report issued by Ms Neena Bhatia, Practising Company Secretary for the financial year ended March 31, 2021 does not contain any adverse remark, qualifications, reservations or declaimer except the observation that the name of the Company is appearing in the breach list displayed on the website of the BSE Limited for having foreign investment in excess of prescribed sectoral cap.

With regards to the same, the Company has obtained an Order from the Department of Pharmaceuticals for increase in the limits for Foreign Investment upto 80% subject to compounding by the Reserve Bank of India. The Company has filed the application for compounding with the Reserve Bank of India.

The said Report is annexed as “Annexure II” and forms part of this Report.

REPORTING OF FRAUD BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors, Internal Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

HUMAN RESOURCES

The key to the Company’s agility and success is, of course, its highly dedicated people. The focus of the Company is on attracting, engaging and developing talented people who share its vision and values. Therefore, the Company offers innovative programs, benefits and resources that address the diverse needs of employees, rewards their efforts, helps them build their best careers at Abbott.

Talent Strategy and Development

The above objectives are fulfilled through five strategic pillars of the talent strategy :

• Leadership Engine : Have a robust talent pipeline for all critical positions by identifying and developing high performing talent and preparing them for successful transition to critical roles;

• No. 1 Field Force : Enhance quality, productivity and diversity in Field Force and retain strong performers;

• Managerial Effectiveness : Develop Managerial capability to support and accelerate team performance and drive higher employee engagement;

• Best-in-class support functions : Build and strengthen functional capabilities to effectively meet changing organizational needs;

The training is provided to EHS employees on applicable EHS regulations and internal technical standards through both internal and external trainings and conferences. Monthly webinars are arranged by the subj''ect matter experts to promote EHS awareness and share best practices across the Company.

In 2020 we moved to virtual training of employees, as per COVID-19 safety guidelines. Virtual training on hazardous waste disposal by GSPCB, effective measures on handling COVID-19 crisis at site by Green Triangle Society in which site representative participated. Site trainings were also conducted on topics like Slip, Trip Fall, Machine Guarding, Material Handling and emergency preparedness.

The EHS Policy has been implemented through our Global EHS standards based on ISO 14001 and OHSAS 45001, supported by a well-defined EHS organizational structure, EHS Standard Operating Procedures and EHS specific programs that ensure that we meet all the local regulatory requirements.

Safety committee was reconstituted at site for the years 2021 and 2022 effective January to comply with State government regulation. Occupational Safety & Health Audit was conducted at site by competent person notified by Inspectorate of Factories & Boilers. Action based on audit recommendations were submitted to the concerned Inspector.

Special focus is maintained on critical safe work initiatives like contractor safety, hand safety and working on heights. Additionally, several employee engagement programs, such as celebration of National Safety Week was conducted to help build a sustainable EHS culture.

During the year, the following initiatives took place at the Goa plant :

• The Plant successfully participated in Occupational Health & Safety audit carried out at site by competent person as required under Goa Factories Rules, 1985. There were no critical/maj''or findings in the audit report.

• 418 employees (including contractual employees) completed the Global EHS induction training module, and 30 employees attended Slip, Trip & Fall under STOP for Safety program.

• 544 Behavior Based Safety (BBS) programs observations were reported against a goal of 407 (134% of goal).

• Efficiently implemented COVID-19 safety guidelines and norms at site and resolved issues to ensure business continuity.

There is continuous improvement on the BBS program and a visible improvement in safety culture has been observed. The Stop for safety initiative is being practiced in order to support the BBS program.

• Stronger Employee Value Preposition (EVP) :

Strengthen the EVP through various internal and external initiatives for Abbott employees, potential talent pool and other external stakeholders.

The Human Resources team is instrumental in driving hiring effectiveness and on-boarding with focus on increasing representation of talent, ensuring customized best in industry training and development programs for all levels of employees and having the right campaign and processes to build culture of individual leadership and high performance.

Capability building initiatives

The Company believes in providing career growth opportunities through upskilling interventions across all levels of employees. Several leadership development programs such as In-stride, Global Citizen Development Program, Emerging Leaders Program, New Leaders Program, etc., were conducted during the year. The Company focuses on intentional development through various interventions :

• Emphasis on Individual Development Plan (IDPs) :

The focus is on having customized development plans for employees on current and future aspirational roles. This helps in strengthening the internal talent pipeline and increasing readiness for the next role. IDPs comprise of 70% of experiential learning, 20% of internal/external coaching and 10% of classroom learning.

• Talent Management Review (TMR) : Talent Management process is well embedded in our system and supports leadership, sales, marketing and support functions. It is a robust annual talent review to ensure that critical roles have high performing incumbents based on performance evidence and to identify key successors for these critical roles.

• Accelerate : This program is focused on building uniform functional competency-based development journey for the First Line Managers (FLM). The key objective is to build best-in-class front line managers across business by contextualizing FLM competencies and identification of success profile behaviors.

• Abbott Learning Academy : Abbott Learning Academy comprises of calendarized programs for employees across levels and functions. Employees have access to e-learning and virtual learning platforms to upskill themselves on a real-time basis. All the employees have access to the platforms like Career Connect and global training sites which offer personalized tools and resources to help them manage their careers and create a high-impact development plan. The experience involves access to online learning resources on LinkedIn learning/Skillsoft/Mindtools,

on-the-job development and building global connections through exploring role profiles and connecting with role advisors.

Diversity and Inclusion (D&I) :

Diversity continues to be a big priority for the Company. The guiding principles towards that is to promote workforce diversity and not discriminating against any employee for reasons such as race, religion, color, age, gender, ethnicity, disability, marital status and sexual orientation, in addition to any other status protected by local law. It is a focus area and is driven at a leadership level.

The Company’s Equal Employment Opportunity Policy reinforces the commitment in ensuring that workplace is free from discrimination and employment is based solely on merit.

There are various interventions for D&I undertaken and promoted during the year :

• Women Leaders of Abbott (WLA) : WLA takes a proactive role in connecting women within the organization and offers dynamic programs and initiatives to enhance leadership experiences and career development of women. It acts as a platform for attracting, retaining and advancing women in the organization, thereby becoming an Employer of Choice for women.

• ASCENT-Abbott Second Careers EngagemENT Program :

This program was launched to strengthen the diversity commitment by providing second career opportunity to veterans and women returning from career breaks. ASCENT aims at empowering these professionals with relevant opportunities and providing the required support and flexibility to ensure a seamless transition.

• Unconscious Bias Training for all Managers : Building individual awareness of unconscious bias and their understanding of its impact at work.

• Happy Feet-Joy of Motherhood : Happy feet is a program designed to support and provide a conducive work environment for our female employees as they step into the phase of motherhood. The Joy of Motherhood document is shared with women employees who are expecting, and also provide details of preparing for maternity leave and provide support before, during and after pregnancy.

• Wo-Mentoring Program : This program is dedicated for Hi-Po women employees, 150 women employees have been mentored so far and of these 40% women employees have had role rotation, promotions and transfers.

• Empower : As a part of this initiative, women employees receive curated content that include theme specific webinars, videos, articles and podcasts to sharpen and enhance skills.

• Special Field Allowances for Women Employees :

The Field allowance was introduced to strengthen the measures focused on the health and safety of women field colleagues.

Employee Recognition :

Abbott India Limited Excellence Club was launched in 2021 to recognize the employees across levels under different categories basis their high performance, individual leadership and demonstration of the Company’s behaviors and values. There are recognitions ranging from the best leaders, projects, business units, and brands.

Prevention of Sexual Harassment (POSH) at Workplace

The Company has an Internal Complaints Committee (ICC) in place as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Appropriate training is imparted to employees regularly through the online learning portal. In 2020-21, all employees completed the mandatory online training program on POSH. This training also forms part of the new Employee Orientation program.

During the year, 2 complaints were received by the Company/ ICC under the aforesaid Act and the same were appropriately closed.

HEALTH, SAFETY AND ENVIRONMENT

Health and Safety :

At Abbott, employees’ health and safety are the utmost priority and hence during the COVID-19 pandemic, the Company took key steps to protect and safeguard employees. Crisis Management Team formed on day 1 of the COVID-19 outbreak, regularly keeps assessing the situation and takes timely steps to provide all support to employees. Work from home transition for the PAN-India sales workforce and head office employees was announced on an immediate basis upon the lockdown being effective.

For those employees working at the Goa plant, local transport is provided for commuting to the workplace safely. The cleaning frequency was increased at the plant and in offices to ensure best health and hygiene and to curb the chances of infections substantially. All the norms and measures of social distancing were followed. Guidance/Rules of the State and Central government from time to time are being rigorously followed.

The Company is committed to keeping employees safe by preventing dangerous incidents in and around the workplace. The Company strives to maintain the highest standards of Environment, Health and Safety (EHS) practices.

During the year, the Goa Plant received internal EHS excellence award from global divisional team for upgradation of firefighting facility at site with no business interruption.

Road Safety :

Various Road Safety programs were conducted for field employees during the year such as :

• 100% of the sales employees completed the online defensive driving refresher training module;

• About 2,400 sales employees attended a Virtual Refresher training on Defensive Riding skills and behaviors and Covid-19 Safety guidelines and behaviors;

• Developed BTB 2.0, a program for new employees that involves virtual training on defensive riding skills and behaviors as well as risk-assessment of their driving behaviors. The first program was rolled out in the month of March 2021.

To further enhance employee engagement on road safety and defensive riding, a series of initiatives like Quiz competition, Gamification-led engagement, family and community outreach programs are planned.

Environment :

A responsibility towards the environment is part of Abbott’s mandate. We continuously endeavor to minimize the use of renewable resources and cut down on carbon emission. In all our initiatives, a holistic approach is adopted and efforts are made to curtail adverse environmental impact, if any. The Goa site continued to implement multiple water conservation and emission reduction projects.

The Company has a state-of-the-art effluent treatment plant with parameters of treated effluents well below the limit set by the local State Pollution Control Board. The plant is a zero-discharge plant.

Over the period of last five years, the plant has achieved more than 20% absolute water reduction in usage. The rainwater harvesting project continues to save water by reducing the intake of purchased water. Total rainwater harvested and consumed during the financial year 2020-21 was 1,055 KL.

The Company continued to focus on process optimization and yield improvement through various initiatives. Along with increasing productivity, these initiatives have helped prevent the discharge of raw materials and solvents into the environment.

Furthermore, gas emissions from the boiler and generator stacks as well as the ambient air quality are monitored regularly, and they are well below the limits set by the State Pollution Control Board. There is also a vermi-composting unit in place to convert canteen waste into organic manure, which is used in the lawns and in the plantation inside the factory premises.

The plant retains its Zero Waste to Landfill (ZWL) certification. In financial year 2020-21, 64% of the waste was sent for recycling, 34% for co-processing and 2% for composting. The plant continued sending hazardous waste for co-processing, which has also helped reduce considerably the usage of plastic for packaging of such hazardous waste. The Company ensures that energy from the waste is recovered, thus contributing to the reduction of CO2 emission and global warming. 33% of plant waste was incinerated with energy recovery.

During the year, World Environment Day was celebrated with distribution of vegetable seeds to all plant employees. Tree plantation was carried out by site leadership team.

Plastic Waste Management :

The Company is adhering to the requirements of Plastic Waste Management Rules as laid down by the Central Pollution Control Board. During the year, the Company has collected approximately 1,383 MT of post-consumer waste through Extended Producer Responsibility (EPR) partners. This waste is recycled or disposed of in a scientific way. The Company is also working towards several upstream eco-initiatives that will help in plastic waste minimization, which is fundamental to the concept of EPR.

A project was undertaken at the Goa plant in January 2021, to change the packaging for disposal of off-specification product. This has resulted in change in the mode of packaging of off-specification product from 50 liters High Density Polyethylene (HDPE) drum to Low Density Polyethylene (LDPE) polybags. Around 1,306 HDPE drums were changed to LDPE which has resulted in reduction of 3,657 kg weight of hazardous waste. The empty drums which are saved in this process are then in turn sold to authorized recycler contributing to revenue generated from scrap sales at plant.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The required information under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. are annexed as “Annexure III” and forms part of this Report.

ANNUAL RETURN

The Annual Return of the Company as on March 31, 2021 has been placed on the website of the Company at https://www.abbott.co.in/investor-relations/financials.html

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosures required in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure IV” and forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing Particulars of Employees, which is available for inspection by the Members up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at investorrelations. [email protected]

CORPORATE GOVERNANCE REPORT

Corporate Governance Report and Certificate from the Statutory Auditors of the Company on compliance of the conditions of Corporate Governance pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, form part of this Report.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report, as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (SS1 and SS2) respectively relating to Meetings of Board and its Committees and General Meetings.

DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company’s operations in future.

INDUSTRIAL RELATIONS

The Company has overall cordial Industrial Relations. The Company continues to receive the support from distributors, suppliers, vendors, stockists and other partners.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year.

GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review :

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

3. The Company does not have any joint venture or subsidiaries.

ACKNOWLEDGEMENT

Your Board expresses gratitude towards all the employees, business partners, institutions, banks and, the Members, for their continued trust and support to the Company.

For and on behalf of the Board

Anil Joseph Sudarshan Jain

Mumbai Managing Director Director

May 18, 2021 DIN : 08753233 DIN : 00927487

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Mar 31, 2018

TO THE MEMBERS

The Directors have pleasure in presenting their Seventy-fourth Annual Report and the Audited Financial Statements of the Company for the financial year 2017-18.

FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)

Particulars	For the year ended March 31, 2018	For the year ended March 31, 2017
Net Sales	3273,90.01	2902,37.67
Other Operating Income	33,22.16	36,31.45
Other Income	116,98.72	57,64.28
Total Income	3424,10.89	2996,33.40
Profit Before Tax	621,48.26	436,49.17
Profit After Tax	401,21.78	276,64.88
Retained Earnings and Other Comprehensive Income (OCI)
Balance brought forward	1047,45.13	889,85.66
Profit After Tax	401,21.78	276,64.88
OCI arising from re-measurement of employee benefits	(1,07.64)	(1,87.61)
Dividend - FY 2016-17	(84,99.72)	-
Dividend - FY 2015-16	-	(74,37.26)
Corporate Dividend Tax	(17,30.34)	(15,14.05)
Transfer to Reserves	(40,12.18)	(27,66.49)
Balance carried forward	130S,17.03	1047,45.13

INDIAN ACCOUNTING STANDARDS (IND AS)

Effective April 1, 2016, the Company has adopted all the Ind AS Standards and the adoption was carried out in accordance with Ind AS 101 ‘First-time adoption of Indian Accounting Standards’, with April 1,2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

DIVIDEND

Your Directors recommend a final dividend of Rs. 50/- and special dividend of Rs. 5/- per Equity Share for the year ended March 31, 2018 on 212,49,302 fully paid-up Equity Shares of Rs. 10/- each. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 116,87.12 Lakhs (Previous year : Rs. 84,99.72 Lakhs) and Corporate Dividend Tax ofRs. 24,02.32 Lakhs (Previous year : Rs. 17,30.34 Lakhs). The Corporate Dividend Tax is provided at the rate applicable on the day on which the accounts were approved by the Board of Directors.

DIVIDEND DISTRIBUTION POLICY

The Company has formulated Dividend Distribution Policy in terms of requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said Policy is available on the Company''s website at http://www.abbott.co.in/investor-relations/policies.html

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors state that:

a) in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and 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 31,2018 and of the profits of the Company for that year;

c) they have taken proper and sufficient care 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) they have prepared the Annual Accounts of the Company on a going concern basis;

e) they have laid down adequate Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively;

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

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality

The Company has formulated a Policy on dealing with Related Party Transactions and Materiality in terms of requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said Policy is available on the Company’s website at http://www.abbott.co.in/investor-relations/policies.html

As per the said Policy, all Related Party Transactions are pre-approved by the Audit Committee and Board, as and when required. The details of such transactions are also reviewed by the Audit Committee on a quarterly/annual basis. Material Transactions (transaction exceeding 10% of the annual turnover as per the last audited financial statements), if any, with any Related Parties are pre-approved by the Shareholders.

Details of Related Party Transactions

All the Related Party Transactions, including the Material Transactions entered into by the Company during the year 2017-18 (“said Transactions”), were in the ordinary course of business and on arm’s length basis. The said Transactions were pre-approved by the Audit Committee, Board and Shareholders, wherever necessary.

Details of the said Transactions are provided in Note 42 to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Policy

The CSR Policy is available on the Company’s website at http://www.abbott.co.in/investor-relations/policies.html

CSR initiatives undertaken during the financial year 2017-18

The Company incurred an amount of Rs. 9,12.22 Lakhs on various CSR activities during the financial year 2017-18.

The Annual Report of CSR activities undertaken by the Company during the financial year 2017-18, is annexed as “Annexure I” and forms part of this Report.

RISK MANAGEMENT FRAMEWORK

The Company recognises Risk Management as an integrated, forward-looking and process-oriented approach. It has developed a Risk Framework which is directed to enable management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. It enables to avoid pitfalls and surprises along the way. Broadly, the Framework encompasses :

- Enhancing risk response decisions - Risk Management provides the rigor to identify and select among alternative risk responses - risk avoidance, reduction, sharing and acceptance.

- Reducing operational surprises and losses - The Company strives to gain enhanced capability to identify potential events and establish responses, reducing surprises and associated costs or losses.

- Identifying and managing multiple and cross-enterprise risks

- The Company faces a variety of risks affecting different parts of the organisation, and risk management facilitates effective response to the interrelated impacts, and integrated responses to multiple risks.

- Seizing opportunities - By considering a full range of potential events, the Company is positioned to identify and proactively realise opportunities.

- Improving deployment of capital - Obtaining robust risk information allows management to effectively assess overall capital needs and enhance capital allocation.

These capabilities, inherent in this Framework enable the Company achieving the performance and profitability targets and guard against loss of resources. It is also directed to help ensure effective reporting and compliance with laws and regulations, avoid damage to the entity''s reputation and associated consequences.

The Company operations and its Business Divisions are included in the scope of the Risk Management Framework.

During the year, Risk Management Core Team comprising of representatives of various functions and businesses carried out risk assessment exercise to identify various significant risks associated with the business operations and mitigation plans to address such risks. Material risks identified are evaluated on a continuing basis.

Material risks and mitigation plans were reviewed by the Risk Management Committee and then presented to the Board and Audit Committee.

DIRECTORS

We report with profound grief, the sad and untimely demise of Mr Ranjan Kapur, who passed away on January 27, 2018. The Board places on record its sincere appreciation for the invaluable contributions and guidance received from Mr Kapur towards the progress of the Company.

The Board, based on the recommendation of the Nomination and Remuneration Committee, appointed the following Directors on the Board of the Company upto the date of this Report.

1. Mr Rajiv Sonalker (DIN : 07900178) has been appointed as Additional and Whole-time Director of the Company for a period of 2 (two) years effective August 8, 2017, subject to the approval of the Members at the ensuing Annual General Meeting;

2. Ms Anisha Motwani (DIN : 06943493) has been appointed as Additional and Independent Director for a period of 3 (three) years effective April 25, 2018, subject to the approval of the Members at the ensuing Annual General Meeting.

In compliance with Section 152 of the Companies Act, 2013, Mr Munir Shaikh (DIN : 00096273) and Mr Kaiyomarz Marfatia (DIN : 03449627) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

In accordance with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (effective April 1, 2019), approval of Members is sought through Special Resolution for re-appointment of Mr Munir Shaikh, who has attained the age of Seventy-five years.

Based on recommendation of the Nomination and Remuneration Committee, your Directors recommend appointment/ re-appointment of Mr Rajiv Sonalker, Ms Anisha Motwani, Mr Munir Shaikh and Mr Kaiyomarz Marfatia.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

Number of Meetings of the Board

Seven Board Meetings were held during the year on May 19, 2017; July 18, 2017; August 8, 2017; November 13, 2017; December 19, 2017; February 14, 2018 and March 27, 2018.

Policy on Nomination and Appointment of Directors/ Criteria for appointment of Senior Management and Remuneration Policy

Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as formulated under Section 178(3) of the Companies Act, 2013 is annexed as “Annexure II” and forms part of this Report.

Performance Evaluation of the Board, Board Committees and Directors

Pursuant to the requirements of the Companies Act, 2013 read with Rules framed thereunder and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Company has formulated Performance Evaluation Framework and Policy, which sets a mechanism for the evaluation of the Board, Board Committees and Directors. The said Policy is available at http://www.abbott.co.in/investor-relations/policies.html

Under the aforementioned Framework and Policy, the performance evaluation of the Board, Committees and individual Directors is conducted through self-assessment and group discussion. The Board may refer to a suggested set of questions/parameters to guide their discussions. The Chairman of the Board/Nomination and Remuneration Committee meet the individual Directors to provide feedback, if any.

During the year, the Board/the Nomination and Remuneration Committee conducted performance evaluation of each individual director and the Board conducted performance evaluation of the Board and Committees, through self-assessment and group discussions. Evaluation was done based on the parameters stated under the aforesaid Framework. Independent Directors, at their separate meeting, evaluated performance of Non-Independent Directors, the Board as a whole and the Chairman. Appropriate feedback was provided to the Chairman and Managing Director.

KEY MANAGERIAL PERSONNEL

Mr Ambati Venu, Managing Director, Mr Rajiv Sonalker, Chief Financial Officer and Ms Krupa Anandpara, Company Secretary, are the Key Managerial Personnel of the Company.

AUDIT COMMITTEE

The Audit Committee comprises Mr R A Shah (Chairman), Mr Krishna Mohan Sahni, Mr Munir Shaikh and Ms Anisha Motwani. Role of the Committee is provided in detail in the Corporate Governance Report, forming part of this Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Vigil Mechanism/Whistle Blower Policy called “Abbott India Limited - Procedure for Internal Investigations” lays down a mechanism for reporting and investigation of all unethicalbehavior, alleged violations or potential violations of laws, regulations or Abbott Code of Business Conduct, policies, procedures or other standards.

The said Policy is available on the website of the Company at http://www.abbott.co.in/investor-relations/policies.html

Employees have numerous ways to voice concerns and are encouraged to report the same internally for resolution. The said Policy provides for adequate safeguards against retaliation and access to the Chairman of the Audit Committee.

Any concerns/grievance can be communicated through various sources as provided under the said Policy or via toll free number 0008001001058 or online at http://speakup.abbott.com

STATUTORY AUDITORS

S R B C & CO LLP, Chartered Accountants, (IC AI Firm Registration No. 324982E/E300003), were appointed as the Statutory Auditors at the Seventieth Annual General Meeting of the Company held on August 1, 2014 for a term of 5 years i.e. from financial year 2014-15 to the financial year 2018-19, to hold office till the conclusion of the Seventy-fifth Annual General Meeting of the Company subject to ratification at each Annual General Meeting.

In terms of Section 40 of the Companies (Amendment) Act, 2017 notified on May 7, 2018, the requirement for ratification of appointment of Statutory Auditors by Members at every Annual General Meeting has been omitted and accordingly, Members'' approval is not required for ratification of their appointment annually.

AUDITORS’REPORT

The Auditors’ Report for the financial year 2017-18 does not contain any adverse remarks, qualifications or reservations or disclaimers, which require explanation/comments by the Board.

COST AUDITORS

M/s Kishore Bhatia & Associates, Cost Accountants (Registration No. 00294), are appointed as the Cost Auditors of the Company for the financial year 2018-19 at a remuneration of Rs. 6.65 Lakhs plus taxes as applicable and reimbursement of out-of-pocket expenses.

The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

Cost Audit Report along with the Compliance Report for the financial year 2016-17, issued by M/s N I Mehta and Associates, then Cost auditors, was filed on August 22, 2017 (due date of filing was September 27, 2017).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (ICAI Firm Registration No. BA62445) are the Internal Auditors of the Company. Internal Audit Report, their significant findings and follow up actions taken by the Management is reviewed by the Audit Committee on a quarterly basis.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report issued by Ms Neena Bhatia, Practising Company Secretary (Membership No.: FCS 9492 and Certificate of Practice No. 2661) for the financial year ended March 31,2018 does not contain any adverse remark, qualifications or reservations or declaimer which requires any explanation/ comments by the Board. The said Report is annexed as “Annexure III” and forms part of this Report.

HEALTH, SAFETY AND ENVIRONMENT

Health and Safety:

Providing a safe workplace and keeping the employees healthy is the Company’s top priority. We are committed to keeping all those who work for the Company safe by preventing dangerous incidents in and around the workplace. Our EHS strategy aims to develop a standardised approach to foster continuous improvement and ensure a safe and efficient working environment that minimises any adverse environmental impact. In educating our employees, we also empower them to promote safer and healthier lives in their wider communities. We strive to maintain the highest standards of Environment, Health and Safety (EHS) practices.

The Employee Health and Safety (EHS) Policy has been implemented through our Global EHS Standards, supported by a well-defined EHS organisational structure, EHS Standard Operating Procedures and EHS specific programs, all ensuring we meet all the local regulatory requirements.

Suggestions from the Safety Committee, comprising representatives from the workforce and management, are implemented promptly to resolve issues impacting Plant safety and employee health. Routine self-audits and third party safety audits are conducted to verify compliance with the regulatory and internal safety requirements.

During the year, pumps within the existing fire hydrant system were upgraded to cover additional expansion area to mitigate the risk of fire at the Goa Plant. The site is geared to handle any type of fire situation.

Training programs are conducted at the Plant on health and safety issues to build technical capabilities. Employees are also encouraged to attend external training programs on various topics such as regulatory requirements, ergonomics, machine guarding, hot work safety, road safety, industrial hygiene, industrial safety and so on. A cross-functional teams for emergency response and firefighting is in place. Mock drills for fire-fighting and rescue operations are conducted in association with local fire brigade to keep the staff in a state of preparedness for any emergencies. The Company has a detailed Business Continuity Plan in place. We are continuously improving on the Behavior Based Safety (BBS) program and visible improvement in safety culture is observed. Stop for Safety initiative was initiated this year to support the BBS program. The Plant had no reportable or loss time incident during last 5 years.

The Plant has a well-appointed first-aid room with a full time nurse and Occupational Health Physician catering to employee needs. The Plant is also armed with an on-site fully-equipped ambulance van. It is mandatory for all plant employees to undergo regular medical check-up as prescribed under the Company’s Policies.

Introduction of closed loop system for Chloroform handling was a major initiative undertaken at the Plant this year. This will reduce employee exposure and accidental inhalation. Additionally, we have invested in several employee engagement programs like celebration of National Safety week, World Environment day and Abbott EHS month that will help build a sustainable EHS culture.

Environment:

A responsibility towards the environment is part of Abbott’s mandate. We continuously endeavor to minimize the use of renewable resources and cut down on carbon emission. In all our initiatives, we adopt a holistic approach and make efforts to curtail the adverse environmental impact, if there is any, during product-manufacturing and its disposal either by us, our vendors or customers. The site continued to implement multiple water conservation projects to save water. Examples include improved condensate recovery from boilers, installation of fluid bed dryer filter bag washing and drying machine to save 50 liters of water per washing cycle and intermediate product container cleaning machine installed to save 40 liters of water per container. The treated water from our waste water treatment plant is recycled for horticulture within the site.

The Company has a state-of-the-art effluent treatment plant at Goa, with parameters of treated effluents well below the limit set by the local State Pollution Control Board. Our Goa plant is a “ZERO” discharge plant.

Over the period of last 5 years, the site has achieved more than 25% absolute water reduction in usage and the rain water harvesting project was effectively continued at the Plant this year, which resulted in 600 KL of water storage during the monsoon season.

Major focus during the year was yield improvement. Along with increasing productivity, this initiative has helped save the discharge of raw materials and solvents into the environment.

Goa plant has received the “Best Environmental Practices Award” from Goa State Pollution Control Board to recognise the efforts for recycling the used water from liquid bottle cleaning machines in cooling water towers in utility section.

Furthermore, gas emissions from the boiler and generator stacks as well as the ambient air quality are monitored regularly by us and they are well below the limits set by the State Pollution Control Board. There is also a vermi-composting unit in place to convert canteen waste into organic manure, which is used in the lawns and on the plantation inside the factory premises. The site retains its Zero Waste to landfill certification in the purview of waste disposal. In 2017, 36% of the waste was sent for recycling, 62 % for incineration/co-processing and 2% for composting. One of our significant achievements has been the changing fate of hazardous waste through our initiatives that changed from Incineration to Co-processing. With this change, we have ensured that the energy from the waste is recovered, thus contributing to the reduction of C02 emission and global warming. 56% of site waste was incinerated with energy recovery.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. are annexed as “Annexure IV” and forms part of this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013 and Rules framed thereunder is annexed as “Annexure V” and forms part of this Report.

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosures required in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure VI” and forms part of this Report.

Statement containing Particulars of Employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing Particulars of Employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on all working days (except Saturdays), up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE GOVERNANCE REPORT

Corporate Governance Report along with a Certificate from the Statutory Auditors of the Company with regard to compliance of the conditions of Corporate Governance pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report, as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Report

DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company’s operations in future.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

During the year, the Company granted a loan ofRs. 200,00.00 Lakhs to Alere Medical Private Limited, India (a Related Party as per the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015) for a period of six months on December 26, 2017, at an interest rate of 10% per annum pursuant to the provisions of Section 186 of the Companies Act, 2013 and Rules framed thereunder, to pay off its existing inter-company trade liability. The said loan is guaranteed by Abbott Laboratories, USA i.e. the ultimate holding company.

GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

3. The Company does not have any joint venture or subsidiaries.

AWARDS AND RECOGNITIONS

During the year, the Company won several prestigious awards and recognitions including “Best Companies to Work For” by Business Today; Best Marketing Campaign for “Constipation Conversations” by Healthcare Leadership Awards; Best use of Technology for Training and Excellence in the Production of Learning Content by 4th World Training Development Congress; Silver for Digital Marketing Excellence for Abbott India Radio by DIGIX X.

EMPLOYEES

Your Board recognises the extensive contribution made by all employees towards the growth of the Company year-after-year and places on record its sincere appreciation for the same.

ACKNOWLEDGEMENT

Your Board is sincerely thankful to all business partners, institutions, banks and in particular, the Members, for their on-going support and trust in the Company.

For and on behalf of the Board

Munir Shaikh R A Shah

Chairman Director

DIN : 00096273 DIN : 00009851

---

Mar 31, 2017

TO THE MEMBERS

The Directors have pleasure in presenting their Seventy-third Annual Report and the Audited Financial Statements of the Company for the financial year 2016-17.

FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)

	For the year ended March 31, 2017	For the year ended March 31, 2016
Sales	2902,37.67	2613,05.95
Other Operating Income	36,31.45	32,58.22
Other Income	57,64.28	50,58.69
Total Income	2996,33.40	2696,22.86
Profit Before Tax	436,49.17	398,01.15
Profit After Tax	276,64.88	255,25.00
Balance brought forward	889,85.66	740,85.35
Other adjustments to Equity	(1,87.61)	(1,00.11)
Profit available for appropriation Appropriations :	1164,62.93	995,10.24
Dividend - FY 2015-16	74,37.26	-
FY 2014-15	-	65,87.28
Corporate Dividend Tax	15,14.05	13,41.02
Transfer to Reserves	27,66.49	25,96.28
Balance carried forward	1047,45.13	889,85.66

Note : The above figures are as per Indian Accounting Standards (Ind AS). For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101, First-Time Adoption of Indian Accounting Standards with April 1, 2015 as the transition date with IGAAP as the previous GAAP.

INDIAN ACCOUNTING STANDARDS (Ind AS)

The Company has adopted Indian Accounting Standards (Ind AS) as per the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs (MCA). Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Company has published financials using Ind AS for the year ended March 31, 2017 along with comparable as on March 31, 2016 and Opening Statement of Assets and Liabilities as on April 1, 2015. Following are the major areas which had an impact on account of transition to Ind AS :

- Fair Valuation of certain financial instruments

- Employee costs pertaining to defined benefit obligations

- Discounting of certain long term liabilities

- Share based compensation to employees

- Deferred taxes on above areas

DIVIDEND

Your Directors recommend a dividend of Rs.40/- per share on 212,49,302 fully paid-up Equity Shares of Rs.10/- each of the Company for the year ended March 31, 2017. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs.84,99.72 Lakhs (Previous year :Rs.74,37.26 Lakhs) and Corporate Dividend Tax of Rs.17,30.34 Lakhs (Previous year :Rs.15,14.05 Lakhs). The Corporate Dividend Tax is provided at the rate applicable on the day on which the accounts were approved by the Board of Directors.

OTHER EQUITY

During the year,Rs.27,66.49 Lakhs was transferred to General Reserve. The total Reserves as at March 31, 2017 amounted to Rs.1365,69.47 Lakhs comprising of Amalgamation Reserve Rs.37.82 Lakhs, Capital Reserve Rs.522.62 Lakhs, Capital Redemption Reserve Rs.252.48 Lakhs, General Reserve Rs.296,78.98 Lakhs, Share based Payment Reserve Rs.13,32.44 Lakhs and Retained Earnings at Rs.1047,45.13 Lakhs.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors state that :

a) in the preparation of the Annual Accounts for the year ended March 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

b) they have selected such accounting Policies and applied them consistently and 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, 2017 and of the profits of the Company for that year;

c) they have taken proper and sufficient care 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) they have prepared the Annual Accounts of the Company on a going concern basis;

e) they have laid down adequate Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively;

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

DIVIDEND DISTRIBUTION POLICY

The Board approved the Dividend Distribution Policy in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said Policy is available on the Company’s website at http://www.abbott.co.in/ investor-relations/policies.html

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality

As per the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has Policy on dealing with Related Party Transactions and Materiality which is also available on the Company’s website at http://www.abbott.co.in/investor-relations/policies.html

As per the said Policy, all Related Party Transactions are pre-approved by the Audit Committee and Board, as and when required. The same are also reviewed by the Audit Committee on a quarterly/annual basis.

Details of Related Party Transactions

All contracts/arrangements/transactions entered into by the Company during the financial year 2016-17 with Related Parties were in the ordinary course of business and on arm’s length basis. No material related party transactions, i.e. transaction exceeding 10% of the annual turnover as per the last audited financial statements, were entered during the year by the Company.

Details of Related Party Transactions entered into by the Company during the financial year 2016-17 are provided in Note 42 to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility (CSR) Policy

The CSR Policy of the Company is available on its website at http://www.abbott.co.in/investor-relations/policies.html

CSR initiatives undertaken during the financial year 2016-17

During the year, the Company spent an amount of Rs.713.95 Lakhs on various CSR activities.

The Annual Report of CSR activities undertaken by the Company during the financial year 2016-17, is annexed as “Annexure I” and forms part of this Report.

RISK MANAGEMENT FRAMEWORK

The Company recognizes Risk Management as an integrated, forward-looking and process-oriented approach. It has developed a Risk Framework that broadly encompasses : aligning risk appetite and strategy; enhancing risk response and reducing operational surprises.

During the year, Risk Management Core Team comprising of representatives of various functions and business had carried out risk assessment exercise to identify the various significant risks associated with the business operations and mitigation plans to address such risks. Material risks and mitigation plans were reviewed by the Risk Management Committee and then presented to the Board.

DIRECTORS

The Board of Directors of the Company, based on the recommendation of Nomination and Remuneration Committee, appointed Mr Ambati Venu (DIN : 07614849) as Additional Director and Managing Director of the Company for a period of 5 (five) years effective from September 29, 2016, subject to approval of the Central Government and Members at the ensuing Annual General Meeting.

In compliance with provisions of Section 152 of the Companies Act, 2013, Mr Bhasker Iyer (DIN : 00480341) and Mr Sachin Dharap (DIN : 00785700) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee, your Directors recommend appointment/re-appointment of Mr Ambati Venu, Mr Bhasker Iyer and Mr Sachin Dharap on the Board of the Company.

Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Number of Meetings of the Board

Six Board Meetings were held during the year on May 25, 2016; July 18, 2016; August 26, 2016; September 29, 2016; November 28, 2016 and February 6, 2017.

Policy on Nomination and Appointment of Directors/ Criteria for appointment of Senior Management and the Remuneration Policy

Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as formulated under Section 178 (3) of the Companies Act, 2013 is annexed as “Annexure II” and forms part of this Report.

Performance Evaluation of the Board, Board Committees and Directors

Pursuant to the requirements the Companies Act, 2013 read with Rules framed thereunder and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Company has adopted Performance Evaluation Framework and Policy which interalia, contains various parameters for evaluation of Board, Committees and individual Directors. The said Policy is available at http://www.abbott.co.in/investor-relations/policies.html

The Nomination and Remuneration Committee and the Board conducted performance evaluation of each individual directors, the Board and Committees through self-assessment and group discussions. Evaluation was done based on the parameters stated under the aforesaid Framework and after taking into consideration Guidance Note issued by the Securities and Exchange Board of India on January 5, 2017. Independent directors, at their separate meeting, also evaluated performance of non-independent directors, the Board as a whole and the Chairman.

KEY MANAGERIAL PERSONNEL

Mr Ambati Venu, Managing Director, Mr Rajiv Sonalker, Chief Financial Officer and Ms Krupa Anandpara, Company Secretary are the Key Managerial Personnel of the Company.

AUDIT COMMITTEE

The Audit Committee comprises of Mr R A Shah (Chairman), Mr Ranjan Kapur, Mr Krishna Mohan Sahni and Mr Munir Shaikh. Role of the Committee is provided in the Corporate Governance Report, forming part of this Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Vigil Mechanism/Whistle Blower Policy called “Abbott India Limited - Procedure for Internal Investigations” lays down a mechanism for reporting and investigation of all unethical behavior, alleged violations or potential violations of laws, regulations or Abbott’s Code of Business Conduct, policies, procedures or other standards.

The said Policy is available on the website of the Company at http://www.abbott.co.in/investor-relations/policies.html

Employees have numerous ways to voice concerns and are encouraged to report concerns internally for resolution. The said Policy provides for adequate safeguards against retaliation and access to the Chairman of the Audit Committee.

Any concerns can be communicated through various sources as provided under the said Policy or via toll free number 0008001001058 or online at http://speakup.abbott.com

STATUTORY AUDITORS

S R B C & CO LLP, Chartered Accountants, (ICAI Firm Registration No : 324982E/E300003), were appointed as the Statutory Auditors for a term of 5 years at the Seventieth Annual General Meeting of the Company held on August 1, 2014.

In terms of provisions of Section 139(1) of the Companies Act, 2013, the continuation of the appointment of S R B C & CO LLP as Statutory Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from S R B C & CO LLP regarding their eligibility and willingness to continue as the Statutory Auditors.

AUDITORS’ REPORT

The Auditors’ Report for the financial year 2016-17 does not contain any adverse remarks, qualifications or reservations or disclaimer, which require explanation/comments by the Board.

COST AUDITORS

M/s Kishore Bhatia & Associates, Cost Accountants (Registration No. : 00294), having its office at 701/702, D wing, 7^th Floor, Neelkanth Business Park, Nethani Road, Vidhyavihar (West), Mumbai - 400 086 are appointed as the Cost Auditors of the Company for the financial year 2017-18 at a remuneration ofRs.6.65 Lakhs plus taxes as applicable and reimbursement of out-of-pocket expenses.

The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

Cost Audit Report along with the Compliance Report for the financial year 2015-16, issued by M/s N I Mehta and Associates, then Cost auditors, was filed on August 2, 2016 (due date of filing was September 27, 2016).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (ICAI Firm Registration No. : BA62445) are the Internal Auditors of the Company.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report issued by Ms Neena Bhatia, Practicing Company Secretary (Membership No. : ACS 11950 and Certificate of Practice No. 2661) for the financial year ended March 31, 2017 does not contain any adverse remark, qualifications or reservations or declaimer which requires any explanation/comments by the Board. The said Report is annexed as “Annexure III” and forms part of this Report.

HEALTH, SAFETY AND ENVIRONMENT

Health and Safety :

Providing a safe workplace and keeping the employees healthy is the Company''s top priority. Safe working is a condition for employment. The Employee Health and Safety (EHS) policy laid the foundation for our EHS philosophy and performance expectations. The policy has been implemented through our Global EHS Standards, supported by a well-defined EHS organizational structure, EHS Standard Operating Procedures and EHS specific programs. The Company has a dedicated Safety Officer and a Safety Committee, comprising representatives from the workforce and management, which meet regularly to review issues impacting plant safety and employee health. Routine self-audits and third party safety audits are conducted to verify compliance with the regulatory and internal safety requirements.

To build technical capabilities, training programs are conducted at the Plant on health and safety issues. Employees are also encouraged to attend external training programs. Some training topics included regulatory requirements, ergonomics, machine guarding, hot work safety, road safety, industrial hygiene and so on. A cross-functional team for emergency response and firefighting is in place. Mock drills for fire-fighting and rescue operations are conducted to keep the staff in a state of preparedness for any emergencies. The Company has a detailed Business Continuity plan in place. Behavior Based Safety (BBS) program was launched this year to further improve the safety culture at the Plant.

The Plant has a well-appointed first-aid room with a fulltime nurse and Occupational Health Physician catering to employee needs, as well as a fully-equipped ambulance van. Each employee undergoes annual medical examination to include various tests over and above the local regulatory requirement.

The Plant celebrated National Safety Week from 4^th to 11^th of March, 2017. Safety week 2017 emphasized on the Leadership in Safety and Health to Enhance Business Sustainability. Key functions and events like Safety slogan, Drawing competition Spot the hazard, Monologue competition, EHS quiz were organized at the Plant with an intent to raise the leadership drive, involvement and participation from all employees in day to day safety activities. Health Training Programs for employees well-being were also conducted during the year.

Environment :

A responsibility towards the environment is part of Abbott''s mandate. We continuously endeavor to minimize adverse environmental impact, and demonstrate our commitment to protecting the environment through everything we do. The Company has a state-of-the-art effluent treatment plant at the Goa unit, with parameters of treated effluents well below the limit set by the local State Pollution Control Board. Our Goa plant is a “ZERO” discharge plant. The treated water from our waste water treatment Plant is recycled for horticulture within the site. The site has achieved more than 30% absolute water reduction over the period of last 5 years. Our rain water harvesting project, initiated three years ago, was effectively continued at the Plant this year as well, which resulted in 480 KL of water-saving during the monsoons.

Emissions from boiler and generator stacks are monitored regularly and are, well below the limits set by the State Pollution Control Board. Ambient air quality is monitored on a regular basis to confirm to air quality standards. There is also a vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the factory premises. The site retains its certification of Zero Waste to landfill in purview of waste disposal. In 2016, 56% of our waste was sent for recycling, 42 % for incineration and 2% for composting. Installation of a Filter Press System for drying ETP sludge will help in reducing the generation of ETP sludge.

Environmental Key Performance Indicators are shared and discussed with employees on a regular basis in order to continuously minimize the impact on environment. The site is working proactively in reducing its Environmental footprint. Use of alternative energy sources is being explored and plans are in place to implement the same in near future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. are annexed as “Annexure IV” and forms part of this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return as provided under sub-section (3) of Section 92 is annexed as “Annexure V” and forms part of this Report.

DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosures required in accordance with the provisions of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure VI” and forms part of this Report.

Statement containing Particulars of Employees pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, as per the provisions of Sections 134 and 136 of the Companies Act, 2013, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement containing Particulars of Employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on all working days (except Saturdays), upto the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such Statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE GOVERNANCE REPORT

Corporate Governance Report along with a Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report forms part of this Report.

DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company’s operations in future.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year.

GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review :

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

3. The Company does not have any joint venture or subsidiaries.

AWARDS AND RECOGNITIONS

The Company’s Annual Report for the year ended March 31, 2016 won the most prestigious “Gold Shield” Award by The Institute of Chartered Accountants of India for Excellence in Financial Reporting.

During the year, the Company also won several other prestigious awards and recognitions such as CMO ASIA National awards and CMO Healthcare Excellence awards, Business World Digital Pharma Excellence awards, UBM India Pharma awards, AWACS awards in Marketing Excellence, Flame awards Asia 2016, for its innovative and digital marketing initiatives and training and development initiatives.

EMPLOYEES

Your Board places on record its sincere appreciation for the dedication, hard work and significant contributions made by the employees across the Company.

ACKNOWLEDGEMENT

Your Board sincerely thanks all business partners, institutions, banks and in particular, the Members for their continued support to and trust in the Company.

For and on behalf of the Board

Munir Shaikh Ranjan Kapur

Chairman Director

DIN : 00096273 DIN : 00035113

---

Mar 31, 2015

TO THE MEMBERS

The Directors have pleasure in presenting the Seventy-first Annual report and the Audited Financial statements of the Company for the financial year 2014-15.

FINANCIAL HIGHLIGHTS (Rs. in Lakhs) For the For the year Period ended January 1, March 2013 to 31, 2015 March 31, 2014*

sales 2237,60.25 2231,28.59

Profit before Tax 344,36.08 294,55.35

Profit After Tax 228,95.93 198,45.07

balance brought forward 539,34.96 418,20.25

Profit available for 768,30.89 616,65.32

appropriation

Appropriations :

Dividend (Proposed) 65,87.28 48,87.34

Corporate Dividend Tax 13,41.02 8,58.51@

Transfer to reserves 22,89.59 19,84.51

balance carried forward 666,13.00 539,34.96

@ Includes Corporate Dividend Tax of Rs. 27.91 Lakhs for the year ended December 31, 2012.

* With effect from previous financial year, the Company has changed its accounting year from year ended December 31 to year ended March 31.

DIVIDEND

Your Directors have pleasure in recommending a dividend of Rs. 31/- per share on 2,12,49,302 fully paid-up Equity Shares of Rs. 10/- each of the Company for the year ended March 31, 2015. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 65,87.28 Lakhs (Previous year : Rs. 48,87.34 Lakhs) and Corporate Dividend Tax of Rs. 13,41.02 Lakhs (Previous year : Rs. 8,30.60 Lakhs). The Corporate Dividend Tax is provided at the rate applicable on the day on which the Financial statements were approved by the Board of Directors.

RESERVES

During the year, Rs. 22,89.59 Lakhs was transferred to General Reserve. The total Reserves as on March 31, 2015 amounted to Rs. 916,27.83 Lakhs comprising of Amalgamation Reserve Rs. 37.82 Lakhs, Capital Reserve Rs. 5,22.62 Lakhs, Capital Redemption Reserve Rs. 2,52.48 Lakhs, General Reserve Rs. 242,01.91 Lakhs and Surplus as per the Statement of Profit & Loss amounting to Rs. 666,13.00 Lakhs.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors state that :

a. in the preparation of the Annual Accounts for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures from the same;

b. they have selected such accounting Policies and applied them consistently and 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, 2015 and of the profits of the Company for that year;

c. they have taken proper and sufficient care 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. they have prepared the Annual Accounts of the Company on a going concern basis;

e. they have laid down adequate Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

Policy on dealing with Related Party Transactions and Materiality :

Policy on dealing with Related Party Transactions and Materiality, as approved by the Board,

is available on the Company''s website at http://www.abbott.co.in/investor-relations.html.

As per the said Policy, all Related Party Transactions are pre-approved by the Audit Committee and Board as and when required. The same are also reviewed by the Audit Committee and Board on a quarterly / annual basis.

Details of Related Party Transactions :

All contracts / arrangements / transactions entered into by the Company during the financial year 2014-15 with Related Parties were in the ordinary course of business and on arm''s length basis. Also, there was no contract / arrangement / transaction with any of the Related Parties which could be considered material in accordance with the Companies Act, 2013, Rules framed thereunder and Clause 49 of the Listing Agreement.

Details of Related Party Transactions entered into by the Company during the financial year 2014-15 are provided in Note 40 to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) Policy :

The Board has, on recommendation of the Corporate Social Responsibility Committee, adopted a CSR Policy. The said Policy is available on the Company''s website at http://www. abbott.co.in/investor-relations.html.

CSR initiatives undertaken during the financial year 2014-15 :

During the year, the Company spent Rs. 4,63.19 Lakhs on CSR activities.

The Annual Report of CSR Activities undertaken by the Company during the financial year 2014-15, is annexed as "Annexure I" and forms part of this Report.

RISK MANAGEMENT FRAMEWORK

The Company recognises Risk Management as an integrated, forward-looking and process-orientated approach. It has developed a Risk Framework that broadly encompasses : aligning risk appetite & strategy; enhancing risk response; reducing operational surprises. During the year, a Risk Management Core Team was formed with representatives of different businesses and functions, who would identify risks and propose mitigation plans. The Company has set up a Risk Management Committee, in accordance with the requirements of Clause 49 of the Listing Agreement, which would periodically monitor the major risks & assess the adequacy of their mitigation plans. Key risks and their mitigation plans are reported to the Audit Committee and Board of Directors.

DIRECTORS

Mr Ashok Dayal (DIN : 00065907), retired by rotation at the last Annual General Meeting held on August 1, 2014.

Ms Valentine Yien (DIN : 05180794) resigned as Director effective February 28, 2015. The Board places on record its sincere appreciation for their valuable contributions during their tenure.

Mr Krishna Mohan Sahni (DIN : 02103128), was appointed by the Board as Additional Director under Section 161 of the Companies Act, 2013 and Article 113 of the Articles of Association of the Company and as Independent Director Company for a period of five years, not liable to retire by rotation under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with effect from October 29, 2014. His appointment is subject to the approval of the Members .

Ms Nancy Berce (DIN : 07190005), was appointed as Additional Director by the Board effective May 27, 2015. In terms of provisions of Section 161 (1) of the Companies Act, 2013, she holds office upto the date of the ensuing Annual General Meeting.

In compliance with provisions of Section 152 of the Companies Act, 2013, Mr Bhasker Iyer (DIN : 00480341) and Mr Sachin Dharap (DIN : 00785700) retire by rotation, at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Based on the recommendation of Nomination and Remuneration Committee, your Directors recommend the appointment / re-appointment of Mr Sahni, Ms Berce, Mr Iyer and Mr Dharap on the Board of the Company.

Declaration of Independence :

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Number of Meetings of the Board :

Five Board Meetings were held during the year on May 28, 2014; August 1, 2014; August 14, 2014; November 11, 2014 and February 10, 2015.

Policy on Nomination and Appointment of Directors / Criteria for appointment of Senior Management :

Policy on Nomination and Appointment of Directors / Criteria for Appointment of Senior Management as formulated under Section 178 (3) of the Companies Act, 2013 and Clause 49 (IV) (B) (2) of the Listing Agreement is annexed as "Annexure II" and forms part of this Report.

The Remuneration Policy is annexed to the Corporate Governance Report which forms part of this Report.

Performance Evaluation of the Board, Board Committees and Directors :

The Company has devised Performance Evaluation Framework and Policy, which sets a mechanism for the evaluation of the Board, Board Committees and Directors.

Performance evaluation of the board, board Committees and Directors was carried out through self-assessment and group discussions in terms of the aforesaid Framework and Policy.

Familiarisation Programs for Independent Directors :

In terms of the Company''s Policy on Induction and Continuing Education Program for Independent Directors, various programs are conducted from time to time to familiarize the Independent Directors with the Company, its operations, its management and the industry in which it operates. It seeks to enable the Independent Directors to understand the business and strategy, and leverage their expertise and experience to the maximum benefit of the Company.

Details of such programs conducted by the Company for the financial year 2014-15 are available on the website of the Company at http://www.abbott.co.in/investor-relations.html.

KEY MANAGERIAL PERSONNEL

Mr Rehan A. Khan, Managing Director; Mr Kaiyomarz Marfatia, Whole-time Director; Mr Rajiv Sonalkar, Chief Financial Officer; and Ms Krupa Anandpara, Company Secretary are the Key Managerial Personnel of the Company.

There was no change in Key Managerial Personnel of the Company during the financial year.

AUDIT COMMITTEE

The Audit Committee comprises of Mr Ranjan Kapur (Chairman), Mr R.A.Shah, Mr Krishna Mohan Sahni and Mr Munir Shaikh. Role of the Committee is provided in the Corporate Governance Report annexed to this Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board, in terms of the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement, has formulated the Whistle Blower Policy / Vigil Mechanism called "Abbott India Limited - Procedure for Internal Investigations". The said Policy lays down a mechanism for reporting and investigations of all unethical behavior, alleged violations or potential violations of laws, regulations or Abbott''s Code of Business Conduct, policies, procedures or other standards.

The said Policy is available on the website of the Company at http://www.abbott.co.in/investor-relations.html.

Employees have numerous ways to voice concerns and are encouraged to report concerns internally for resolution. The said Policy provides for adequate safeguards against retaliation and access to the Chairman of the Audit Committee.

The genuine concerns can be communicated through any sources provided under the said Policy or e-mail at http:// speakup.abbott.com .

statutory auditors

S R B C & CO LLP, Chartered Accountants, (ICAI Firm Registration No : 324982E), were appointed as the Statutory Auditors for a term of 5 years at the last Annual General Meeting of the Company held on August 1, 2014.

In terms of provisions of Section 139(1) of the Companies Act, 2013, the continuation of the appointment of S R B C & CO LLP as Statutory Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from S R B C & CO LLP regarding their eligibility and willingness to continue as the Statutory Auditors.

auditors'' report

The Auditors'' Report for the financial year 2014-15 does not contain any adverse remarks, qualifications or reservation or disclaimer, which required explanation / comments by the Board.

cost auditors

M/s N I Mehta & Co., Cost Accountants (Registration No.: 000023), having its office at 11, Jolly Maker Chamber - II, Nariman Point, Mumbai - 400 021, are appointed as the Cost Auditors of the Company for the financial year 2015-16 at a remuneration of Rs. 6.05 Lakhs plus applicable taxes and reimbursement of out-of-pocket expenses.

The said remuneration to the Cost Auditors shall be subject to ratification by the Members at the ensuing Annual General Meeting.

Cost Audit Report alongwith the Compliance Report was filed on September 26, 2014 (Due date of filing was September 27, 2014).

INTERNAL AUDITORS

M/s KPMG, Chartered Accountants, (Registration No.: BA62445) are the Internal Auditors of the Company.

SECRETARIAL AUDITORS

Ms. Neena Bhatia, Practicing Company secretary, (Membership No. : ACs 11950) (CP No. : 2661) was appointed as secretarial Auditor of the Company to conduct secretarial Audit for the financial year 2014-15.

SECRETARIAL AUDIT REPORT

The secretarial Audit Report for the financial year ended March 31, 2015 does not contain any adverse remark, qualification or reservation or declaimer which requires any explanation / comments by the board. The said report is annexed as "Annexure III" and forms part of this report.

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations coupled with effective management of these issues is an integral part of the Company''s operating philosophy and we stand committed to continually improve on these objectives. The Company, year on year, increases its focus on improving Health, safety and Environment.

Health and Safety :

The Company is committed to promoting health and safety of its employees. The Company has a dedicated safety Officer and a safety Committee, which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. The Company''s EHs program includes the policy on safety, health and environment, well defined EHs organizational structure, EHs soPs and EHs specific programs.

Various training programs are conducted at the Plant on health and safety issues including dealing with epidemics, ergonomics, machine guarding, work safety, road safety, etc. Regular health checkup (once a year) of the Plant employees is carried out. Mock drills for firefighting and rescue operations with the involvement of local fire services are also being conducted.

The plant has a well-equipped first-aid room with a full- time nurse and occupational Health Physician catering to employee needs. The Plant also has a full-fledged ambulance van. A cross-functional team for Employee Health and safety (EHs) and Emergency Action Plan (EAP) is in place.

The Plant celebrated National safety Week from 4th to 10th of March, 2015. Various activities were planned during the week. Training program for e-waste disposal was conducted by an external agency during the week. Blood Donation Camp was organized in this week with the help of Goa Medical College and there was enthusiastic participation by plant personnel. Additionally, training program on women''s health and related issues was also organised by a leading cardiologist during this period.

An elaborate audit for Environment, Health and safety in accordance with Abbott''s global standards and local regulations compliance was conducted by Abbott''s global corporate team and external consultants

Environment :

The Company continuously endeavors to improve on environmental management to minimize the adverse environmental impact and through all activities demonstrate commitment to protecting the environment.

The Goa plant is a "ZERO" discharge plant. The Company has in place a modern state of art effluent treatment plant at the Goa unit, treating and discharging waste water with parameters of treated effluent well below the limits set by the local Pollution Control Board. The treated water from waste water treatment plant is recycled for horticulture within the site.

Rain water harvesting project, initiated two years ago, continued at the Plant during this year also, which resulted in 650 KL of water saving during monsoons. The emissions from boiler and generator stacks are monitored regularly and are well below the limits set by the state Pollution Control Board. The ambient air quality is being monitored on a regular basis to conform to the compliance of ambient air quality standards. There is also a vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the factory premises.

The site retains its certification of Zero Waste to landfill in purview of waste disposal. 81% of our waste goes for recycling, 16% for incineration and 3% for composting.

Environmental Key Performance Indicators are shared and discussed with employees on regular basis in order to continuously minimise the impact on environment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OuTGO

The particulars as required under the provisions of section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of

Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo, etc. are annexed as "Annexure IV" and forms part of this Report.

EXTRACT OF ANNUAL RETURN

extract of Annual return as provided under sub-section (3) of section 92 is annexed as "Annexure V" and forms part of this report.

DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS pER RuLE 5 OF THE COMpANIES (AppOINTMENT AND REMUNERATION OF Managerial pERSONNEL ) RULES, 2014.

Disclosures required in accordance with the provisions of section 197 (12) of the Companies Act, 2013, read with rule 5 (1) of the Companies (Appointment and remuneration of Managerial Personnel) rules, 2014 is annexed as Annexure VI and forms part of this report.

statement containing Particulars of employees pursuant to section 197 (12) of the Companies Act, 2013 read with rule 5 (2) of the Companies (Appointment and remuneration of Managerial Personnel) rules, 2014 forms part of this report. However, as per the provisions of section 134 and 136 of the Companies Act, 2013, the report and Financial statements are being sent to the Members and others entitled thereto, excluding the statement containing Particulars of employees, which is available for inspection by the Members at the registerd office of the Company during business hours on all working days (except saturdays), upto the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such statement may write to the Company secretary at the registered office of the Company.

Report ON corporate GOVERNANCE

A report on Corporate Governance along with a Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreement is annexed hereto and forms part of this report.

DISCLOSURES OF ORDERS pASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any regulator or Court or Tribunal which can have impact on the going concern status and the Company''s operations in future.

FIxED DEpOSITS

No fixed deposits were accepted during the year.

particulars OF LOANS, Investments AND GUARANTEES

The Company has not granted any loan or provided any guarantees to or invested in securities of any other body corporate during the year.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions relating to these items during the year under review :

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. The Company does not have any joint venture or subsidiaries.

EMpLOYEES

Your Board places on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment.

ACKNOWLEDGEMENT

Your Board sincerely thank all the business partners, institutions, banks and in particular, the shareholders for their continued support to and trust in the Company.

For and on behalf of the Board

Munir Shaikh Ranjan Kapur Chairman Director DIN : 00096273 DIN : 00035113

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Mar 31, 2014

TO THE MEMBERS

The Directors have pleasure in presenting the Seventieth Annual Report and the Audited Accounts of the Company for 15 months'' period ended March 31, 2014.

Financial Results

(Rs. in Lakhs)

For the period For year ended January 1, 2013 to December 31, March 31, 2014# 2012

Sales 2231,28.59 1613,09.30

Profit Before Tax 294,55.35 214,99.29

Profit After Tax 198,45.07 144,70.05

Balance brought forward 418,20.25 329,95.61

Profit available for appropriation 616,65.32 474,65.66

Appropriations :

Dividend (Proposed) 48,87.34 36,12.38

Corporate Dividend Tax 8,58.51* 5,86.02

Transfer to Reserves 19,84.51 14,47.01

Balance carried forward 539,34.96 418,20.25

* Includes Corporate Dividend Tax of Rs. 27.91 Lakhs for the year ended December 31, 2012.

#The Company changed its accounting year from year ended December 31 to year ended March 31 effective this year. Accordingly, these fnancial statements are prepared for 15 months'' period from January 1, 2013 to March 31, 2014.

Dividend

Your Directors recommend a dividend of Rs. 23/- per share on 2,12,49,302 fully paid-up Equity Shares of Rs. 10/- each of the Company for the period ended March 31, 2014. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 48,87.34 Lakhs. (Previous year : Rs. 36,12.38 Lakhs) and Corporate Dividend Tax of Rs. 8,30.60 Lakhs (Previous year : Rs. 5,86.02 Lakhs). The Corporate Dividend Tax is provided at the rate applicable on the day on which the Accounts were approved by the Board of Directors.

Reserves

The total Reserves as on March 31, 2014 amounted to Rs. 766,60.20 Lakhs comprising of Amalgamation Reserve Rs. 37.82 Lakhs, Capital Reserve Rs. 5,22.62 Lakhs, Capital Redemption Reserve Rs. 2,52.48 Lakhs, General Reserve Rs. 219,12.32 Lakhs and Surplus as per the Statement of Profit & Loss amounting to Rs. 539,34.96 Lakhs.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors state that :

1. In the preparation of the Accounts, the applicable accounting standards have been followed.

2. They have selected such accounting policies and applied them consistently and 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 for the period ended March 31, 2014, and of the Profit of the Company for that period.

3. They have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. They have prepared the accompanying Accounts for the period ended March 31, 2014, on a going concern basis.

Fixed Deposits

No fixed deposits were accepted during the period.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956

The information required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in Annexure I and forms part of this Report.

The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure II and forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company at its Registered office.

DIRECTORS

Mr Thomas Dee resigned as Director of the Company effective September 30, 2013.

Mr Ashok Dayal, who retires by rotation at the ensuing Annual General Meeting, does not seek re-appointment. The Board proposes not to fll up the vacancy, for the time being.

The Board places on record its sincere appreciation for the valuable support and guidence received from Mr Thomas Dee and Mr Ashok Dayal during their tenure.

Ms Valentine Yien was appointed as an Additional Director of the Company with effect from December 23, 2013, and holds office upto the date of the ensuing Annual General Meeting. The Board recommends appointment of Ms Yien as Director of the Company, liable to retire by rotation.

Mr R. A. Shah and Mr Ranjan Kapur retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board proposes to appoint them as Independent Directors, in terms of the provisions of Section 149 of the Companies Act, 2013, for a term upto March 31, 2019, not liable to retire by rotation.

The Company has received declarations from Mr R. A. Shah and Mr Ranjan Kapur, confrming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

Your Directors have pleasure in recommending their appointment.

STATUTORY AUDITORS

Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration No. : 117366W), the Statutory Auditors, hold office upto the conclusion of the ensuing Annual General Meeting.

In view of completion of the term prescribed under the provisions of Section 139(2) of the Companies Act, 2013 for Deloitte Haskins & Sells LLP, the Statutory Auditors, your Board proposes rotation of the Auditors of the Company and recommend appointment of S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration No. : 324982E) as the Statutory Auditors for a term of five years i.e. from fnancial year 2014-15 to fnancial year 2018-19 and to hold office till the conclusion of the Seventy-fifth Annual General Meeting of the Company (subject to ratifcation by Members at every Annual General Meeting).

The Board places on record its sincere appreciation for the valuable services rendered by Deloitte Haskins & Sells LLP during its association with the Company over the past 19 years.

COST AUDITORS

M/s N I Mehta & Co., Cost Accountants (Registration No. 000023), having its office at 115, Jolly Maker Chamber – II, Nariman Point, Mumbai – 400 021, are appointed as the Cost Auditors of the Company for the fnancial year 2014-15 at a remuneration of Rs. 6.05 Lakhs plus applicable taxes and reimbursement of out of pocket expenses.

The said remuneration will be subject to ratifcation by the shareholders at the ensuing Annual General Meeting.

ENVIRONMENT, HEALTH AND SAFETY

Compliance with relevant regulations coupled with effective management of these issues is an integral part of the Company''s operating philosophy and we stand committed to continually improve on these objectives. There was a considerable focus on improving Environment, Health and Safety during the period under review by the Company.

I. ENVIRONMENT

The Company continuously endeavors to improve on environmental management to minimize the adverse environmental impact and through all activities demonstrate commitment to protecting the environment.

The Goa plant is a "ZERO" discharge plant. The Company has in place a modern state of the art effuent treatment plant at the Goa unit, treating and discharging wastewater with parameters of treated effuent well below the limits set by the local Pollution Control Board. The treated water from waste water treatment plant is recycled for horticulture within the site.

The rain water harvesting project, which was installed last year, resulted in 600 KL of water saving during monsoons. The emissions from boiler and generator stacks are monitored regularly and are well below the limits set by the State Pollution Control Board. The ambient air quality is being monitored on a regular basis to conform to the compliance of ambient air quality standards. There is also a vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the factory premises. The plant''s briquette (compressed groundnut shells, wastes from crops, etc.) fred boiler eliminates furnace oil usage. The annual CO2 emission reduction is 740 tons and zero sulphur emissions.

The site has been awarded Zero Waste to Landfll certification in purview of waste disposal. 81% of waste generated at the plant goes for recycling, 17% for incineration and 2% for composting.

Environmental Key Performance Indicators are shared and discussed with the employees in order to continuously minimise the impact on environment.

II. HEALTH AND SAFETY

The Company is committed to promoting health and safety of its employees. The Company has a dedicated Safety officer and a Safety Committee in place, which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. Our EHS program includes the policy on Environment, Health and Safety, well defined EHS organizational structure, EHS Standard Operating Procedures and EHS specific programs.

Various key measures like conducting training programs on various health and safety issues including dealing with epidemics, ergonomics, machine guarding, work safety, road safety, frst-aid, manual handling, etc. have been implemented. Regular health checkup (once a year) of the plant employees is carried out. Detailed frst-aid training by certified agencies like Indian Red Cross Society has also been imparted to the employees. The plant celebrated National Safety Week from 4th to 10th of March, 2014. Various activities were planned during the week. Programs like safety quiz, drawing competition, slogan and hazard identifcation competition were conducted. Training programs by external agencies were also conducted during the week, which included machine safety, guarding and material handling from

Green Triangle Society and frst aid training from the Indian Red Cross Society.

The plant also celebrated Road Safety Week in the month of January, 2014 in which road safety awareness programs were conducted. A two-wheeler conditioning camp was conducted for employees at the site.

The plant has a well-equipped frst aid room with a full-time nurse and Occupational Health Physician catering to employee needs.

The plant also has a full-fedged ambulance van.

A cross-functional team for Employee Health and Safety (EHS) and Emergency Action Plan (EAP) is in place.

Routine audits for Environment, Health and Safety compliance are conducted with the assistance of personnel from Abbott''s global corporate team.

TECHNOLOGY ABSORPTION AND DEVELOPMENT

The R & D Centre of the Company at Goa is approved by the Department of Scientifc and Industrial Research. It carries out development of new formulations and modification of existing ones for life cycle management. The R & D Centre also carries out evaluation of product dossiers for introduction of new products through insourcing. Effective life cycle management, cost reduction in existing product and new vendor development are focus areas at the R & D Centre.

The R & D Centre has played a key role in launching new products during the period under review e.g. Vertin OD Tablet (Vertigo), Dufaxamin tablet (Hepatic encephalopathy), Arachitol chewable tablets (Vitamin D3), Bruft tablet (Acute pain) and Titaferon injection (Hepatitis C). It has also been instrumental in site to site technology transfers for rationalization of production sites to improve efficiencies, costs and take care of business exigencies; notable among them were technology transfer of Vertin and Duphaston to alternative manufacturing sites.

EMPLOYEES

Your Board records its sincere appreciation for the significant contributions made by employees across the Company through their continued commitment and dedication.

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

For and on behalf of the Board

Mumbai R. A. Shah Rehan A. Khan

May 28, 2014 Director Managing Director

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Dec 31, 2012

TO THE MEMBERS

The Directors have pleasure in presenting the Sixty-Ninth Annual Report and Audited Accounts of the Company for the year ended December 31, 2012.

Financial Results

Rs. in Lakhs Year ended Year ended December December 31, 2012 31,2011

Sales 1613,09.30 1445,5729

Profit Before Tax 214,99.29 180,15.83

Profit After Tax 144,70.05 120,39.30

Balance brough forward 329,95.61 263,44.69

Profit availabile for appropriation 474,65.66 383,83.99

Appropriations:

Dividend (Proposed) 36,12.38 36,12.38

Corporate Dividend Tax 5,86.02 # 5,72.07

Transfer to Reserves 14,47.01 12,03.93

Balance Carried forward 418,20.25 329,95.61

# Includes credit of Corporate Dividend Tax Rs. 13.95 Lakhs for period December 1, 2009 to December 31, 2010

Dividend

Your Directors recommend a dividend of Rs. 17 per share for the year ended December 31, 2012. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 36,12.38 Lakhs (Previous year: Rs. 36,12.38 Lakhs) and Corporate Dividend Tax of Rs. 5,86.02 Lakhs (Previous year: Rs. 5,86.02 Lakhs). The Corporate Dividend Tax is provided at the rate applicable on the day on which the Accounts were approved by the Board of Directors.

Reserves

Reserves as on December 31, 2012 were Rs. 625,60.98 Lakhs comprising of Amalgamation Reserve Rs. 37.82 Lakhs, Capital Reserve Rs. 5,22.62 Lakhs, Capital Redemption Reserve Rs. 2,52.48 Lakhs, General Reserve Rs. 199,27.81 Lakhs and Surplus in Statement of Profit and Loss Rs. 418,20.25 Lakhs.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act) your Directors state that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

2. They have selected such accounting policies and applied them consistently and 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 for the year ended December 31, 2012, and of the Profit of the Company for the year.

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. They have prepared the accompanying Annual Accounts for the year ended December 31, 2012, on a going concern basis.

FIXED DEPOSITS

No fixed deposits were accepted during the year.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956

The information required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings/ outgo is given in Annexure I and forms part of this Report.

The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure II and forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company at its Registered Office.

DIRECTORS

Mr Laurent Van Lerberghe and Mr Ramon F Neira Hoyos resigned as Directors of the Company effective February 20, 2013. The Board placed on record its sincere appreciation for the valuable support rendered by them.

Mr Bhasker Iyer and Mr Sachin Dharap have been appointed as Additional Directors by the Board with effect from February 20, 2013, subject to approval of the shareholders of the Company at the ensuing Annual General Meeting.

Mr Munir Shaikh and Mr R. A. Shah retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors have pleasure in recommending their appointment.

STATUTORY AUDITORS

Messrs Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors, retire at this Annual General Meeting and are eligible for re-appointment.

COST AUDITORS

M/s N I Mehta & Co, Cost Accountants 83, Bakhtawar Narayan Dabholkar Road Mumbai-400 006

The Cost Audit Report for the financial year 2011 was filed with the Central Government on January 30, 2013 (Due date for filing - February 28, 2013).

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations coupled with effective management of these issues is an integral part of the Company''s operating philosophy and we stand committed to continually improve on these objectives. There was considerable focus on improving Health, Safety and Environment during the year by the Company.

i. Environment

The Company continuously endeavors to improve on environmental management to minimise the adverse environmental impact and through all our activities demonstrate commitment to protecting the environment.

The plant has a state of the art activated sludge type waste water treatment plant. The plant is a ZERO discharge plant. The quality of treated water from the waste water treatment plant is well below the norms laid down by pollution control board. The treated water is recycled for horticulture within the site. During the current year water recycling initiatives were taken up.

The ambient air quality is being monitored on a regular basis to conform to the compliance of ambient air quality standards.

There is also a vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the premises.

During the year the plant reduced the carbon footprint by reducing 112 tons of C02 emission by implementing various electricity saving projects such as, installation of Variable Frequency Drive (VFD), optimisation of light usage, online dissolve oxygen trimming system in effluent treatment plant etc. Further, the plant commissioned briquette fired boiler which reduced furnace oil usage. The anticipated annual C02 emission reduction is 740 tons and there are no sulphur emissions.

Environmental Key Performance Indicators are shared and discussed with employees to increase awareness and thereby minimise the impact on environment.

ii. Health and Safety

The Company is committed to promoting health and safety of its employees. The Company has a dedicated Safety Officer and a Safety Committee in place, which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. The Employee, Health and Safety (EHS) programme includes EHS & E policy, well defined orgnisational structure, EHS SOP''s and EHS specific programmes.

In the plant we are driving a programme of moving to ZERO EHS incidents with focus on near miss reporting, cultural change and behavioural based safety.

Employees are the key to the success of the EHS Management System as they are responsible for the proper implementation and maintenance of systems.

The site conducts various training programmes related to EHS. The site develops a yearly training schedule (calendar), reviewed quarterly and strictly adheres to it. The topics covered are machine guarding, forklift safety, electrical safety, ergonomics, waste management, first aid, emergency preparedness planning, confined spaces, spill prevention, chemical safety, work permit, biological safety, etc.

Detailed first-aid training by certified agencies like Indian Red Cross Society has also been imparted to the employees.

The plant celebrated the World Environment Day on June 5, 2012. Vehicle emission checking drive was also conducted.

The plant has an in house occupational health centre. The centre is equipped with Phygmo Nanometer, Spirometer, Audiometer, Audiometric Cabin and Otoscope, besides regular first aid equipment. The plant also has a well equipped ambulance.

A cross-functional team for EHS and Emergency Action Plan (EAP) is in place.

Routine audits for Environment, Health and Safety compliance are conducted with the assistance of personnel from Abbott''s global corporate team.

TECHNOLOGY ABSORPTION AND DEVELOPMENT

The R&D Centre of the Company at Goa is approved by the Department of Scientific and Industrial Research. It carries out development of new formulations and modification of existing ones for Life Cycle Management. R&D center also carries out evaluation of product dossiers for introduction of new products through insourcing. Effective Life Cycle Management, cost reduction in existing products and new vendor development are focus areas at the R&D centre.

The R&D centre has played a key role in launching new products in 2012, e.g. Adiza, Zilsa, Obimet GX forte and Omacor. The R&D has been instrumental in site to site technology transfers as a result of rationalisation of production sites to improve efficiencies and costs. Notable among them were insourcing of Cremaffin Plus, Udiliv and Duphalac manufacturing to Goa Plant.

EMPLOYEES

Your Board records its sincere appreciation for the significant contribution made by employees across the Company through their continued commitment and dedication.

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance and also a Management Discussion & Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

For and on behalf of the Board

February 20, 2013 Munir Shaikh Rehan A. Khan

Mumbai Chairman Managing Director

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Dec 31, 2010

The directors have pleasure in presenting the Sixty-Seventh Annual Report and Audited Accounts of the Company for the thirteen months period ended December 31, 2010.

Financial Results

Rupees in Lakhs

Thirteen Months period ended Year ended December November 31, 2010 30, 2009

Sales 989,88 760,93

Profit Before Tax 94,15 117,38

Profit After Tax 60,94 77,51

Balance brought forward 235,71 193,15

Profit available for appropriation 296,65 270,66

Appropriations:

Dividend (Proposed) 23,25 23,25

Corporate Dividend Tax 3,86 3,95

Transfer to Reserves 6,09 7,75

Balance carried forward 263,45 235,71

Dividend

Your Directors recommend a dividend of Rs. 17.00 per share on 1,36,75,240 fully paid-up Equity Shares of Rs. 10 each of the Company for the period ended December 31,2010. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 23,25 Lakhs (Previous year : Rs. 23,25 Lakhs) and Corporate Dividend Tax of Rs. 3,86 Lakhs. The Corporate Dividend Tax is provided at the rate applicable on the day on which the Accounts were approved by the Board of Directors.

Reserves

The total Reserves as on December 31, 2010 amounted to Rs. 291,71 Lakhs comprising of Amalgamation Reserve Rs. 38 Lakhs, Capital Reserve Rs. 5,23 Lakhs, Capital Redemption Reserve Rs. 2,52 Lakhs, Revenue Reserve Rs. 20,13 Lakhs and Surplus as per Profit & Loss Account amounting to Rs. 263,45 Lakhs.

Fixed Deposits

No fixed deposits were accepted during the period.

Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act) your Directors state that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed.

2. They have selected such accounting policies and applied them consistently and 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 for the period ended December 31, 2010, and of the Profit of the Company for that period, except for the following:

As per the practise consistently followed by the Company, the depreciation on computers, photocopiers, facsimile machines, modems and appliances is provided at the rate of 80%. Fixed Assets costing Rs. 5,000 or less are fully depreciated in the year of acquisition. (See Schedule 15 - Significant Accounting Policies 4).

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. They have prepared the accompanying annual accounts for the period ended December 31, 2010, on a going concern basis.

Information pursuant to Section 217 of the Companies Act, 1956

The information required to be disclosed under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings / outgo is given in Annexure I and forms part of this Report.

The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure II and forms part of this Report. As per the provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company at its Registered Office.

Directors

Mr Zahirali Lavji resigned as Director of the Company effective December 31, 2010. The Board placed on record its sincere appreciation for support rendered by him.

The Board at its meeting held on February 28, 2011 appointed Mr Kaiyomarz Marfatia as Additional/ Whole-time Director and Mr Ramon F Neira Hoyos as Additional Director effective March 01, 2011 and March 09, 2011 respectively. In terms of Section 260 of the Companies Act, 1956, they hold office upto the date of forthcoming Annual General Meeting and being eligible offer themselves for appointment.

Mr Ashok Dayal and Mr Thomas Dee retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

Your Directors have pleasure in recommending their appointment.

Auditors

Messrs Deloitte, Haskins & Sells, Chartered Accountants, the Statutory Auditors, retire at this Annual General Meeting and are eligible for re-appointment.

Health, Safety and Environment

Health, Safety and Environment are always prime areas of concern for the Company. Compliance with relevant regulation and effective management of these issues is an integral part of the Companys operating philosophy.

i. Environment

Out of the total plot area of approximately 35,000 sq. meters, about 14,600 sq. meters is a green area which constitutes approximately 42% of the total area. The Company has planted over 4000 trees within the factory premises.

During the year the plant reduced the carbon footprint by reducing 398 tons of C02 emission by implementing various electricity saving projects such as, replacing old chillers with energy efficient screw chillers, installation of Variable Frequency Drives (VFDs) for various equipment, replacing existing lights with energy efficient lights & replacement of common wet scrubber with individual dry dust collectors & liquid cooling line automation with installation of pressure transmitter

The plant has established vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the premises.

The Goa plant is a "ZERO" discharge plant. The Company has in place a modern the state of art effluent treatment plant at the Goa unit, treating and discharging wastewater with parameters of treated effluent well below the limits set by the local Pollution Control Board. Water recycling activities have continuously been encouraged and implemented. The emissions from boiler and generator stacks are monitored regularly and are well below the limits set by the State Pollution Control Board. The treated water from waste water treatment plant is recycled for horticulture within the site.

The Company continuously endeavors to improve on environmental management to minimize the adverse environmental impact.

ii. Health and Safety

Our SHE program includes the policy on safety, health and environment, well defined EHS organizational structure, EHS SOPs & EHS specific programs. The Company is committed to promoting health and safety of its employees. All our new medical representatives have received training on safe driving. A video on safe driving was also made and shown to our existing field staff as well as provided to OPPI (Organisation of Pharmaceutical Producers of India) for dissemination among other member companies. The Company has dedicated a Safety Officer and a Safety Committee in place, which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. Various key measures like conducting training programmes on various health and safety issues including dealing with epidemics, ergonomics work safety, road safety, first-aid, etc have been implemented. Regular health check up (twice a year) of the Plant employees is carried out. Automatic External Defibrillators are installed at the Plant and Headquarter Offices and training has been imparted to the employees for its use. Detailed first-aid training by certified agencies like Indian Red Cross Society has also been imparted to the employees.

The plant has a well-equipped first aid room with a full - time nurse and part time Occupational Health Physician catering to employee needs. Sphygmo Nanometer, Spirometer, Audiometric Cabin and Otoscope are also established at the plant besides regular first aid equipment.

A cross-functional team for Employee Health and Safety (EHS) and Emergency Action Plan (EAP) is in place.

Routine audits for Environment, Health and Safety compliance are conducted with the assistance of personnel from Abbotts global corporate team.

Technology absorbtion and Development

Development of new formulations and modification of existing ones for lifecycie management, cost containment and improved productivity is an ongoing process. The Company is constantly engaged in activities of development. The Research and Development Centre of the Company at Goa, which is approved by the Department of Scientific and Industrial Research carries out these development activities. The Research and Development centre is also the technical monitor and coordinator for all outsourced development projects. It has continued to make significant contributions towards its assigned goals of product and process development, cost reduction and new vendor development. The Company has continued to accelerate the pace of new products introduction in 2010 in its core therapeutic areas, with the introduction of Levilex (Antiepileptic), Digene fastmelt with Lime/Lemon, Jeera/Black Currant flavour, (Antacid), Surbex Osteo (Osteoporosis Management), Heptral (Hepato Protector), Cremahep (Laxative), Cremagel

(Anal Fissures). The laboratory is currently working on new products, line extensions and also on quality improvement of existing products.

The Research and Development centre has played a key role in developing some of the above new products.

Employees

Relations with the employees remained cordial throughout the year. Your Board records its appreciation for the significant contribution made by employees across the Company through their continued commitment and dedication.

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

For and on behalf of the Board

Mumbai, Vivek Mohan R A Shah

February 28,2011 Managing Director Director

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Nov 30, 2009

The directors have pleasure in presenting the Sixty-Sixth Annual Report and Audited Accounts of the Company for the year ended November 30, 2009.

Financial Results (Rupees in Lakhs)

Year ended Year ended Nov. 30, 2009 Nov. 30, 2008

Sales 760,92.64 665,70.35

Profit Before Tax 117,38.37 94,34.77

Profit After Tax 77,51.02 62,86.45

Balance brought forward 193,15.40 204,33.61

Profit available for appropriation 270,66.42 267,20.06

Appropriations:

Dividend (Proposed) 23,24.79 19,14.53

Corporate Dividend Tax 3,95.10 3,25.37

Adjusted against premium paid on Buy back -- 45,36.11

Transfer to Reserves 7,75.10 6,28.65

Balance carried forward 235,71.43 193,15.40

Dividend

Your Directors recommend a dividend of Rs 17.00 per share on 1,36,75,240 fully paid-up Equity Shares of Rs 10 each of the Company for the year ended November 30, 2009. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs 23,24.79 Lakhs (Previous year: Rs 19,14.53 Lakhs) and Corporate Dividend Tax of Rs 3,95.10 Lakhs. The Corporate Dividend Tax is provided at the rate applicable on the day on which the Accounts were approved by the Board of Directors.

Reserves

The total Reserves as on November 30, 2009 amounted to Rs 257,88.10 Lakhs comprising of Amalgamation Reserve Rs 37.82 Lakhs, Capital Reserve Rs 5,22.62 Lakhs, Capital Redemption Reserve Rs 2,52.48 Lakhs, Revenue Reserve Rs 14,03.75 Lakhs and Surplus as per Profit & Loss Account amounting to Rs 235,71.43 Lakhs.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act), your Directors state that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed.

2. They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended November 30, 2009, and of the Profit of the Company for that period, except the following -

As per the practice consistently followed by the Company, the depreciation on computers, photocopiers, facsimile machines, modems and appliances is provided at the rate of 80%. Fixed Assets costing Rs 5,000 or less are fully depreciated in the year of acquisition. (See Schedule 16 - Significant Accounting Policies 4).

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. They have prepared the accompanying Annual Accounts for the year ended November 30, 2009, on a going concern basis.

Fixed Deposits

No Fixed Deposits were accepted during the year.

Information pursuant to Section 217 of the Companies Act, 1956

The information required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in Annexure I and forms part of this Report.

The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure II and forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company at its Registered Office.

Directors

Mr Laurent Van Lerberghe, Mr Neil Aylward and Mr Zahirali Lavji were appointed as Additional Directors effective September 29, 2009. Mr Mario Durante and Mr John Berry resigned as directors effective September 29, 2009. The Board placed on record its sincere appreciation for the valuable support rendered by them.

Mr Vivek Mohan was reappointed by the Board for a period of 5 years effective November 1, 2009 subject to approval of shareholders at the Annual General Meeting.

Mr Munir Shaikh and Mr R A Shah retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors have pleasure in recommending their appointment.

Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors, retire at this Annual General Meeting and are eligible for re-appointment.

Health, Safety and Environment

Health, Safety and Environment are always prime areas of concern for the Company. Compliance with relevant regulation and effective management of these i3sues is an integral part of the Companys operating philosophy.

i. Environment

Out of the total plot area of approximately 35,000 sq. meters, about 14,600 sq. meters is a green area which constitutes approximately 42% of the total area. The Company has planted over 4,000 trees within the factory premises.

During the year the plant reduced the carbon footprint by reducing 162 tons of C02 emission by implementing various electricity saving projects such as, replacing old chillers with energy efficient screw chillers, replacing surface aeration to diffused aeration in waste water treatment plant, installation of Variable Frequency Drives (VFDs) for various equipment, replacing existing lights with energy efficient lights.

The plant has established vermi-composting unit to convert canteen waste into organic manure, which is used in the lawns and plantation inside the premises.

The Goa plant is a "ZERO" discharge plant. The Company has in place a modern state of the art effluent treatment plant at the Goa unit, treating and discharging wastewater with parameters of treated effluent well below the limits set by the local Pollution Control Board. Water recycling activities have continuously been encouraged and implemented. The emissions from boiler and generator stacks are monitored regularly and are well below the limits set by the State Pollution Control Board. The treated water from waste water treatment plant is recycled for horticulture within the site.

The Company continuously endeavors to improve on environmental management to minimize the adverse environmental impact.

ii. Health and Safety

Our SHE program includes the policy on safety health and environment, well defined EHS organizational structure, EHS SOPs & EHS specific programs. The Company is committed to promoting health and safety of its employees. All our new medical representatives have received training on safe driving. A video on safe driving was also made and shown to all our existing field staff as well as provided to OPPI (Organisation of Pharmaceutical Producers of India) for dissemination among other member companies. The Company has a dedicated Safety Officer and a Safety Committee in place, which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. Various key measures like conducting training programmes on various health and safety issues including dealing with epidemics, ergonomics work safety, road safety, first-aid, etc. have been implemented. Regular health check up (twice a year) of the Plant employees is carried out. Automatic External Defibrillators are installed at the Plant and Headquarter Offices and training has been imparted to the employees for its use. Detailed first-aid training by certified agencies like Indian Red Cross Society has also been imparted to the employees.

The plant has a well-equipped first aid room with a full-time nurse and part-time Occupational Health Physician catering to employee needs. Sphygmo Nanometer, Spirometer, Audiometric Cabin and Otoscope are also established at the plant besides regular first aid equipment.

A cross-functional team for Employee Health and Safety (EHS) and Emergency Action Plan (EAP) is in place.

Routine audits for Environment, Health and Safety compliance are conducted with the assistance of personnel from Abbotts global corporate team.

Technology Absorption and Development

Development of new formulations and modification of existing ones for lifecycle management, cost containment and improved productivity is an ongoing process. The Company is constantly engaged in activities of development. The R&D Centre of the Company at Goa, which is approved by the Department of Scientific and Industrial Research carries out these development activities. The R&D centre is also the technical monitor and coordinator for all outsourced development projects. It has continued to make significant contributions towards its assigned goals of product and process development, cost reduction and new vendor development. The Company has continued to accelerate the pace of new products introduction in 2009 in its core therapeutic areas, with the introduction of sugar free Digene Tablets in strawberry flavour (Antacids), new strengths of Thyronorm, Rex XR (Bipolar disorders), Obiglo (Diabetes) and new strength of Prothiaden 50 (CNS), Surbex Gold and Betonin XT (Vitamins). The laboratory is currently working on new products, line extensions and also on quality improvement of existing products.

Employees

Relations with the employees remained cordial throughout the year. Your Board records its appreciation for the significant contribution made by employees across the Company through their continued commitment and dedication.

Reports on Corporate Governance and Management Discussion & Analysis

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as also a Management Discussion & Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

For and on behalf of the Board

Vivek Mohan R A Shah

Managing Director Director

Mumbai, February 1, 2010