Annual-Report-2018-1

Index Corporate Overview 2-33 About NATCO Pharma 2 Key milestones 6 Business highlights FY 2018-19 8 Key performance indicators 10 Megatrends 12 Management message 14 Building businesses in diverse markets 18 Leveraging synergies through diversity 20 Advancing R&D diversification 22 Board of Directors and Key 24 Management Team Risk framework and mitigation 26 strategy Corporate social responsibility (CSR) 28 Environment, health & safety (EHS) 32 Key numbers of FY 2018-19 on consolidated basis Statutory Reports 34-98 Total Revenue PAT Management Discussion and Analysis 34 Board's Report 43 ` 22,247 million ` 6,444 million Corporate Governance Report 71 Business Responsibility Report 90 EBITDA Basic EPS ` 9,250 million ` 34.98 Financial Statements 99-192 Disclaimer Standalone Financials 99 In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and Consolidated Financials 147 other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and Notice 193 words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Revenue splits for different geographies used in the Corporate Overview and Management Discussion & Analysis sections are based on management assessments. The global pharmaceutical and lifesciences sector is ever evolving, thereby creating the demand for unexplored synergies, innovation and diversification. Ever since we began our journey, we have consistently reinvented ourselves and course-corrected our strategies to remain resilient and create value for our stakeholders. In all these years, we have our ability to adapt ourselves to products by filing for approvals meticulously built businesses the changing business climate by across different markets. The result across different molecules, multiple streamlining our resources and is that today, we have a much therapy segments and global focusing on growth areas. stronger presence in Canada, markets, through strategic alliances promising opportunities in Brazil and and manufacturing capabilities. After our initial high-impact foray into incremental growth coming in from The intersecting synergies between oncology in 2003, through Imatinib, India and the rest of the world. all these activities act as a force we have made our mark in the multiplier for us to grow and gastro hepatology segment through During the year, we continued to diversify our business. the launch of Hep C; Further, we file carefully chosen high-potential capitalised through well-recognised products. The result of one such filing We have steadily increased our product launches of Glatiramer is Ibrutinib tablets, which we believe presence from an oncology-focused Acetate, Liposomal Doxorubicin and is a first-to-file. We continue to build product portfolio to multiple therapy Oseltamivir in the US. niche products for the US, which segments. Similarly, we have widened we hope will lead to blockbuster our footprint from India and the A few years ago, we made a returns in future. US, to many other markets globally. conscious decision to diversify This has been possible only due to our exposure into other non-US With sustainability deeply embedded our deep focus and niche approach. markets to minimise the impact in our business model, we have from economic and geographic risks. made selective investments in crop We have strengthened our business This was possible by leveraging our health sciences, by building on our through a carefully selected portfolio research and manufacturing skills existing resources and skill sets in of products and markets which as well as reinforcing our regulatory both chemistry and manufacturing. has contributed to our sustainable efforts across regions. We have also fostered value-accretive growth. Despite economic volatility alliances with partners at all levels and sector-specific headwinds, we We have also taken a unique global to ensure the continuity of our have successfully demonstrated portfolio approach towards our business growth. NATCO Pharma Limited About NATCO Pharma Growing with quality and consistency We are in the business of pharmaceuticals with research, manufacturing and marketing of Finished Dosage Formulations (FDF) and Active Pharmaceutical Ingredients (API). Creativity runs deep in our DNA; and with emphasis on quality, we have stringently run our research programmes to develop unique products that help us stay ahead of the curve. NATCO has invested in developing well-built systems in its manufacturing facilities to ensure consistent delivery of products. Our capability is to manufacture the same approach of filing for manufacturing of the finished niche pharma products in line with select high-value molecules across dosage formulation. market requirements and patient markets. Our growth in India and needs. We have a strong presence the US enabled us to establish our Our capability to develop multi-step in India and the US, with growing footprint with our subsidiaries in cytotoxic high-potency APIs is also market potential in Canada, Brazil Canada, Brazil and other regions. well demonstrated. and rest of the World (ROW). Today, we reach out to 40+ countries either directly or through our We have shown an inherent ability We bring dedicated focus on a limited alliance partners. to take calculated bets, leverage set of molecules and we bring those on their success and diversify into out into the market at affordable We have adopted a differentiated new geographies and businesses. prices for people in need. approach unlike many of our peers We have done so, through growth with focus on limited competition in India and then expansion in the We have come a long way from products that help maximise our US, and most recently in Brazil and where we started. The seeds of earnings. Within the FDF business, Canada. Our recent diversification today’s NATCO were sown over our strengths emanate from our into the business of crop health 15 years ago with our foray into success in oncology, which remains sciences is an example of our India’s oncology segment. We have a flagbearer with a continued strong ability to leverage our strengths consistently delivered products since pipeline of molecules. across sectors. then, which have kept us ahead of the competition. We have strong focus on the The foundation of NATCO’s business strategically important active is built on experienced management Our success in the oncology ingredient manufacturing business, with strong R&D focus and deft segment enabled us to expand into a significant proportion of which decision-making, which equips us to the US market; and we followed is captively consumed in the monetise on emerging opportunities. 2 | Annual Report 2018-19 Corporate Overview Our mission Filings Patents Making specialty medicines accessible 51 218 to all Cumulative ANDAs International patents filed filed till date 45 152 Cumulative USDMFs International patents filed till date granted Experience 5 213 35+ ANDAs filed in FY 2018-19 India patents filed Years of rich experience in the ever-evolving pharmaceutical industry 3 87 USDMF's filed in FY 2018-19 India patents granted Assets 6 FDF 2 API Manufacturing facilities 2 Well-established research centres Abbreviated New Drug Application (ANDA) Drug Master File (DMF) Building on Synergies. Driving Diversification | 3 NATCO Pharma Limited About NATCO Pharma Business segments at a glance*# Domestic FDF API (domestic and exports) ` 7,347 million ` 2,719 million Revenue in FY 2018-19 Revenue in FY 2018-19 33% 12% Revenue contribution in FY 2018-19 Revenue contribution in FY 2018-19 • Strong brand position in the domestic • Our APIs are used for both - captive oncology and Hepatitis-C segments consumption and third party customers • Has ten brands in excess of ` 100 million • Portfolio of 45 USDMFs with niche revenue in the domestic oncology products under development and pharma specialty segment • Exports made predominantly to Europe • Launched six products during the year; and South America target to launch 6-8 products a year • 350+ specialist sales force • 400+ distributors International FDF Subsidiaries ` 8,791 million ` 1,083 million Revenue in FY 2018-19 Revenue in FY 2018-19 40% 5% Revenue contribution in FY 2018-19 Revenue contribution in FY 2018-19 • Portfolio of niche and complex products • Operations in Brazil, Canada, Singapore, for the US market Philippines and Australia • Front-end partnerships with leading • Demonstrated growth in Canada global generic pharma companies • Positioned well for monetisation in • Niche Para-IV and Para-III filings Brazil for FY 2019-20

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