Your Directors have the pleasure of presenting their report and the Audited Accounts of
your Company for the Financial Year ended December 31, 2022.
The financial results for the year ended December 31, 2022 are not comparable with that
of year ended December 31, 2021 due to the following:
1. During the previous financial year 2021, the Board of Directors of the Company
approved a transaction for the slump sale and transfer of the Companys
Nutraceuticals business, on a going concern basis to Universal Nutriscience Private
Limited for the consideration of Rs.5,860 million (after working capital adjustments).
2. The Board of Directors of the Company at its meeting held on November 25, 2021,
approved the transfer of certain assets namely marketing intangibles, customer
lists/database, trade channel knowledge/wholesaler lists, vendor/supplier database,
pharmacovigilance/medical database that are related to the distribution business of
Soframycin and Sofradex conducted by the Company and product inventory to Encube Ethicals
Private Limited. The transaction concluded during the year on January 31, 2022 after
fulfillment of the underlying conditions and the Company received the full consideration
of Rs.1,369 million including working capital adjustments and consequently, during the
quarter ended March 31, 2022.
Transfer to Reserves
Your Company does not propose to transfer any amount to the general reserves of the
Company.
Dividend
Your Directors at their meeting held on February 23, 2023 have recommended payment of
final dividend of Rs.194 per equity share of Rs.10 each and a second special dividend of
Rs.183 per equity share of Rs.10 each for the year ended December 31, 2022, considering
the business and cash requirements of the Company. The dividend is subject to approval of
members at the ensuing Sixty-Seventh Annual General Meeting (AGM) of the Company.
The dividend, if approved by the Members at the AGM scheduled on May 11, 2023, will
result in cash outflow of Rs.8,683 million.
During the year under review, the Board of Directors approved and paid a one-time
special Interim Dividend of Rs.193 per equity share of Rs.10 each for the year ending
December 31, 2022, which was paid on August 22, 2022.
The total dividend for the Financial Year 2022, including the proposed final dividend
and second special dividend, amounts to Rs.570 per equity share of Rs.10 each. The normal
divided without exceptional and special dividend results in a payout of 85% of the profits
of the Company.
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 Members.
The Company shall, accordingly, make the payment of the dividend after deduction of tax at
source.
Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing
Regulations), the Dividend Distribution Policy of the Company is available on the
Companys website at https://
www.sanofiindialtd.com/en/investors/corporate-policies
Unpaid/ Unclaimed Dividend
In terms of the provisions of Investor Education and Protection Fund (Accounting,
Audit, Transfer and Refund) Rules, 2016 (including amendments and modifications, thereof),
Rs.4.14 million of unpaid/unclaimed dividends were transferred during the year 2022 to the
Investor Education and Protection Fund.
Directors and Key Managerial Personnel (KMP)
During the year under review, Mr. Rajaram Narayanan (DIN: 02977405) stepped down as the
Managing Director of the Company with effect from close of business hours on April 10,
2022. The Board places on record its immense appreciation for his contribution to the
Company.
The Board of Directors of the Company at its meeting held on April 18, 2022, based on
the recommendation of the Nomination and Remuneration Committee approved the appointment
of Mr. Rodolfo Hrosz (DIN: 09609832) as the Managing Director of the Company with effect
from June 1, 2022.
Mr. Rodolfo Hrosz joined Sanofi Group as General Manager of the Consumer Healthcare
business in Brazil in 2017 and has successfully led the organisation through several
transformative stages, right from its inception to it becoming a top growth contributor
and a digital- acceleration reference point within the Sanofi Group.
He has wealth of rich experience from commercial, marketing, and general management
roles across several multinational companies. Prior tojoining Sanofi, he has worked with
Pfizer, LVMH, Heineken and Procter & Gamble in USA and in Brazil.
The shareholders approved the appointment of Mr. Rodolfo Hrosz, as the Managing
Director through Postal Ballot conducted in accordance with Section 108 and Section 110
and other applicable provisions of the Companies Act, 2013 (hereinafter referred to as
"the Act") read with the applicable Rules, Secretarial Standards and the Listing
Regulations on June 22, 2022, with requisite majority. The Company has made an application
to the Central Government pursuant to the provisions of Sections 196,197, 203 and other
applicable provisions, read with Schedule V of the Act and Rules framed thereunder to
obtain approval for his appointment, and is awaiting approval.
Further, Mr. Charles Billard (DIN: 08173583) informed the Board vide his letter dated
October 26, 2022 that he would like to resign as the Non-Executive Director of the
Company, with effect from November 3, 2022, as he was pursuing other opportunities within
Sanofi Group. The Board noted and accepted his resignation at its meeting held on November
3, 2022. The Board places on record its immense appreciation for his contribution during
his tenure as a Non-Executive Director of the Company.
At the same Board Meeting, based on the recommendation of the Nomination and
Remuneration Committee, the Board of Directors of the Company approved the appointment of
Ms. Annapurna Das (DIN: 08634664) as a Non-Executive Non-Independent Director of the
Company with effect from November 3,2022. Ms. Annapurna Das, currently is the Head of
Asia, Sanofi Vaccines since June 2022 with responsibility for commercial operations for
countries across Asia including India. Prior to this, she was the General Manager,
Sanofi Vaccines, India, since Nov 2019. She has over 23 years of experience and a
successful career with major pharmaceutical organisations in India holding roles across
sales, marketing, and strategy and business development. The Members approved appointment
of Ms. Annapurna Das as the Non-Executive Directors, of the Company through Postal Ballot
on December 28, 2022, with requisite majority.
As on the date of this Report, Mr. Rodolfo Hrosz, Managing Director; Mr. Cherian
Mathew, Whole-time Director;
Mr. Vaibhav Karandikar, Whole-time Director and Chief Financial Officer and Ms. Radhika
Shah, Company Secretary & Compliance Officer are the Key Managerial Persons of the
Company.
Mr. Aditya Narayan, Chairman, Mrs. Usha Thorat, Chairperson of the Audit Committee and
Nomination and Remuneration Committee and Mr. Rahul Bhatnagar, Chairman of Stakeholder
Relationship Committee, Corporate Social Responsibility Committee and Risk Management
Committee are the Independent Directors of the Company.
The Company has received declarations from all Independent Directors that they meet the
criteria of independence as laid down under Section 149(6) of the Act and the Listing
Regulations and they have registered themselves with the Independent Directors
Database maintained by the IICA (The Indian Institute of Corporate Affairs). In the
opinion of the Board, the Independent Directors fulfill the conditions specified in these
regulations and are independent of the Management.
Mr. Marc-Antoine Lucchini, Non-Executive Director (DIN: 08812302) is liable to retire
by rotation at the ensuing Sixty-Seventh Annual General Meeting and being eligible offers
himself for re-appointment. The Board of Directors recommend his re-appointment to the
Members.
Cash Flow and Consolidated Financial Statements
As required under Regulation 34 of the Listing Regulations, a Cash Flow Statement is
part of the Annual Report. The Company does not have any subsidiaries and hence not
required to publish Consolidated Financial Statements.
Management Discussion and Analysis
As required by Regulation 34(2) of the Listing Regulations, a Management Discussion and
Analysis Report forms part of this Report.
The state of the affairs of the business along with the financial and operational
developments has been discussed in detail in the Management Discussion and Analysis
Report.
Business Responsibility and Sustainability Report
The Business Responsibility and Sustainability Report for the year ended December 31,
2022, forms part of this Report.
Report on Corporate Governance
As required under Regulation 34 of the Listing Regulations, a Report on Corporate
Governance along with a Certificate of Compliance from the Statutory Auditors is part of
this Report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Information on Conservation of Energy, Technology absorption and Foreign Exchange
earnings and outgo pursuant to Section 134(3)(m) of the Act, read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is given in Annexure - A to this Report.
Subsidiaries, Associate Companies and Joint Ventures
Your Company does not have any subsidiaries, associate companies or joint ventures.
Meetings of the Board
During the year under review, Nine (9) meetings of the Board were held. The dates,
attendance of the Directors and other details of the meetings are given in the Report on
Corporate Governance. The maximum interval between any two meetings did not exceed 120
days, as prescribed by the Act and Listing Regulations.
Familiarization Program for Independent Directors
The Independent Directors are regularly informed during meetings of the Board and
Committees on the business strategy, business activities, manufacturing operations,
updates on the pharmaceutical industry and regulatory updates. The Directors when they are
appointed are given a detailed orientation on the Company, pharmaceuticals industry,
Sanofi Global strategy, policies and Code of Conduct, regulatory matters, business,
financial matters, human resource matters and Corporate social responsibility initiatives
of the Company. The details of familiarisation programs provided to the Directors of the
Company are mentioned in the Report on Corporate Governance and on the Companys
website at https://www.sanofiindialtd.com/ en/investors/corporate-policies.
Performance Evaluation of the Board
During the year under review, the performance evaluation of the Board, Committees and
Directors was conducted based on the criteria, framework and questionnaires approved by
the Nomination and Remuneration Committee and the Board. The details of the performance
evaluation exercise conducted by the Company are set out in the Report on Corporate
Governance.
Nomination and Remuneration Policy & Remuneration of Directors, Key Managerial
Personnel and Senior Management
During the year under review, the Board of Directors approved the revised Nomination
and Remuneration Policy of the Company which now captures the Companys Leadership
Framework for its employees and explains the principles of the overall remuneration
including short-term incentive and the long-term incentive payable to the Executive
Directors, Key Managerial Personnel,
Senior Management, and other employees of the Company. The Policy also provides
guidance on selection and nomination of Directors to the Board of the Company and
appointment of the Senior Management Personnel of the Company. The remuneration paid to
the Executive Directors, Key Managerial Personnel and Senior Management is in accordance
with the Nomination and Remuneration Policy formulated in accordance with Section 178 of
the Act and the Listing Regulations. Further details form part of the Report on Corporate
Governance and a Statement of Disclosure of Remuneration pursuant to Section 197 of the
Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is provided as Annexure - B to this Report.
The statement showing particulars of employees pursuant to Section 197 of the Act read
with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is not being sent to the Members along with this Annual Report in
accordance with the provision of Section 136 of the Act. Any person interested in
receiving the said statement may write to the Company Secretary stating their Folio No./
DPID & Client ID.
Audit Committee
Details pertaining to composition and re-constitution of the Audit Committee are
included in the Report on Corporate Governance. All the recommendations made by the Audit
Committee were accepted by the Board.
Vigil Mechanism
As per the provision of Section 177(9) of the Act and Regulation 22 of the Listing
Regulations, the Company is required to establish a Vigil Mechanism. The Companys
Code of Conduct, Whistle blower and other Governance Policies lays out the principles of
highest ethical standards. The details of the Whistle blower Policy are provided in the
Report on Corporate Governance forming part of this Report.
Related Party Transactions
All related party transactions, which were entered into during the year under review
were on arms length basis and in the ordinary course of business. There were no
materially significant related party transactions by the Company with the Promoters,
Directors and Key Managerial Personnel which may have a potential conflict with the
interests of the Company at large.
The Company adopted the revised Policy on Materiality of Related Party Transactions and
also on Dealing with Related Party Transactions in line with the amended Listing
Regulations. The policy is available on the Companys website at
https://www.sanofiindialtd.com/en/investors/ corporate-policies. The Form AOC - 2
envisages disclosure of material contracts or arrangements or transactions at arms
length basis. The details of the material related party transactions for the Financial
Year ended December 31, 2022, as per the Policy on dealing with related parties adopted by
the Company are disclosed in Annexure - Rs.to this Report. The Company had extended
a loan of Rs.4,450 million to Sanofi Healthcare India Private Limited which has been fully
repaid in the month of July 2022. Accordingly, the said material related party transaction
stands closed.
The Company has entered into material related party transactions with Sanofi-Aventis
Singapore Pte. Ltd., and Sanofi Healthcare India Private Limited for purchase and sale of
products and services. These transactions were in the ordinary course of business and at
arms length duly certified by third-party experts. The transactions were within the
limits approved by the Members.
Corporate Social Responsibility
The Board has constituted a Corporate Social Responsibility (CSR) Committee to monitor
the implementation of CSR activities of your Company. The details of the composition of
the CSR Committee, CSR policy, CSR initiatives and activities undertaken during the year
are given in the Annual Report on CSR activities in Annexure - D to this Report.
Risk Management
Your Company has implemented a mechanism for risk management and formulated a Risk
Management Policy.
The policy provides for the creation of a risk register, identification of risks and
formulating mitigation plans.
Your Company has also constituted a Risk Management Committee, details of which are
disclosed in the Corporate Governance Report. As per the governance process described in
the Policy, the Risk Management Committee reviews the risk identification, risk assessment
and minimisation procedures on quarterly basis and updates the Audit Committee and the
Board periodically.
The key risks impacting the Company are discussed in the Management Discussion and
Analysis section forming part of this Report.
Deposits from Public
Your Company has not accepted any deposits from the public and as such no amount of
principal or interest on deposits from the public was outstanding as on the date of the
Balance Sheet.
Loans, Guarantees or Investments
The Company has not granted any loan or provided any guarantees to or invested in
securities of any other body corporate during the year. The Company had extended a loan of
Rs.4,450 million to Sanofi Healthcare India Private Limited which has been fully repaid in
the month of July 2022.
Directors' Responsibility Statement
As required by Section 134(3) of the Act, your Directors, to the best of their
knowledge and belief, confirm that:
1. in the preparation of the annexed accounts for the Financial Year ended December 31,
2022 all the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
2. your Directors 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 at the end of the Financial Year, 2022
and of the profit of the Company for that year;
3. your Directors 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. the said accounts have been prepared on a going concern basis;
5. internal financial controls to be followed by the Company have been laid down and
that internal controls are adequate and were operating effectively; and
6. proper systems to ensure compliance with the provisions of all applicable laws have
been devised and that such systems are adequate and operating effectively.
Cost Audit
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit)
Rules, 2014, the Company is required to maintain cost records. The accounts and records
are made and maintained by the Company and are required to be audited. Your Directors
have, on the recommendation of the Audit Committee, appointed M/s. Kirit Mehta & Co.,
Cost Accountants to audit the cost accounts maintained by the Company for the financial
year ending December 31, 2023.
As required by the Act, the remuneration payable to the Cost Auditor is required to be
placed before the members in General Meeting for their ratification. Accordingly, a
resolution seeking ratification of the remuneration payable to M/s. Kirit Mehta & Co.
as approved by the Audit Committee and Board is included in the Notice convening the
Annual General Meeting of the Company. In the opinion of the Directors, considering the
limited scope of audit, the proposed remuneration payable to the Cost Auditors would be
reasonable and fair and commensurate with the scope of work carried out by them.
Auditors
Previous year, M/s. Price Waterhouse & Co. Chartered Accountants LLP (Firm
Registration Number 304026E/E-300009) were re-appointed as Statutory Auditors of your
Company for a further period of Five (5) years, to hold office from the conclusion of the
Sixty-sixth AGM held in the year 2022, until the conclusion of the Seventy-first AGM to be
held in the year 2027.
The Statutory Auditors have issued an unqualified audit report on the annual accounts
of the Company for the year ended December 31, 2022.
Reporting of Fraud by Auditors
During the year under review, the Statutory Auditors,
Cost 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 Act, details of which needs to be mentioned in this Report.
Prevention of Sexual Harassment Policy
The Company has in place a Prevention of Sexual Harassment Policy in line with the
requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. An Internal Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary, trainees)
are covered under this policy.
During the year 2022, the Company did not receive any complaint of alleged sexual
harassment. As on December 31, 2022 no complaints related to sexual harassment are pending
for disposal.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s.
Makarand M. Joshi & Co., a firm of Company Secretaries in Practice, to undertake the
Secretarial Audit of your Company for the year ended December 31, 2022.
The Secretarial Auditors have issued an unqualified audit report for the year ended
December 31, 2022.
The comments made by the Secretarial Auditors are self-explanatory. Their report is
annexed herewith as Annexure - E to this Report.
Secretarial Standards
The Company has complied with all applicable Secretarial Standards issued by the
Institute of Company Secretaries of India and adopted under the Act.
Annual Return
As required under Section 92(3) of the Act, Annual Return is hosted on the website of
the Company at https://www. sanofiindialtd.com/en/investors/annual-return.
Material Changes and Commitments After the Financial Year
No material changes and commitments have occurred after the closure of the Financial
Year ended December 31, 2022 till the date of this Report, which would affect the
financial position of your Company.
There has been no change in the nature of business of your Company.
Significant and Material Orders passed by the Regulators/ Courts/ Tribunals
No significant or material orders were passed by the Regulators or Courts or Tribunals
which impacts the going concern status and Companys operations in future.
Acknowledgements
Your Directors place on record their deep appreciation to employees at all levels for
their hard work, dedication and commitment. The Board also places on record its
appreciation for the support and co-operation that your Company has been receiving from
the medical fraternity, suppliers, distributors, retailers, business partners, government
departments both at Central & State level and all other stakeholders.