Ranbaxy Corporate Social Responsibility

GROUP 5 S U J E E T M AT H E W R A H U L PAVA N K U M A R POUSALI CHAKRABARTI R I S H I R A J S I N G H A S H I YA S AT H I YA S U N D A R A M T V E N K AT A A C H Y U T H K U M A R A N S H U L T R I PAT H I

(12PGP028) (12PGP031) (12PGP032) (12PGP035) (12PGP038) (12PGP054) (12FPM001)

AGENDA
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1)Introduction to company and industry

2)Analysis of CSR areas of Ranbaxy

3)Corporate Governance 4)Points to ponder

5)Synergy Integration with Daiichi

6)Further Analysis 7)Reccommendations

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COMPANY DETAILS
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Indian Multinational company In Pharmaceuticals-world class

generics, branded generic pharmaceuticals and Active Pharmaceutical Ingredients (APIs). Taken over by Japanese drug major Daiichi Sankyo in June 2008 Revenue $2.3 billion Diverse product basket of over 5,000 SKUs. Headquartered at Gurgaon (Haryana) with a presence in over 125 countries Around 12000 employees World-class manufacturing facilities in 7 countries. Products: Cefaclor, Cephalexin, Amoxycillin
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CSR ACTIVITIES- RANBAXY

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At Ranbaxy, corporate social responsibility and environment health and safety are viewed as

essentials of corporate DNA Reaching out to the underserved rural communities and helping them overcome their challenges is central to Ranbaxy's CSR philosophy Included in the Asia Pacific Index of the Dow Jones Sustainability Indices and FTSE4 Good Global Index for two consecutive years. Karmayog rating 2/5
Key CSR Areas:

Children Community Welfare Education

Healthcare and Health education

Rural Development Water Anti - malaria initiative
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RANBAXY CSR AREAS

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Supply Access and Viability

Environment al Impact

Employee skills

Company Productivity

Education

Worker Safety

People Health

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SUPPLY ACCESS AND VIABILITY

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Supply Access and Viability

Honest dealings with suppliers are essential to cultivate mutually beneficial lasting relationships. Reasonable profits for Suppliers
Employee skills

Environmen tal Impact

Company Productivity

Education

Worker Safety

People Health

Supply Access and Viability KPI Suppliers legal compliance and ethical performance should be made a criteria for selection. Measure could be relevant ISO certifications Fair trade: Transparency in trade proper documentation should be made a priority Quality management Stable supply and steady delivery times
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EMPLOYEE SKILLS
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Supply Access and Viability

Environmen tal Impact

Employee skills

Recruitment based on skills and values. Less focus on sustainability in training and recruitment Employee skills & benefits KPI Worker turnover Absenteeism rate Increased competence level for employees Employee satisfaction survey Gender ratio and diversity ratio

Company Productivity

Education

Worker Safety

People Health

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WORKER SAFETY
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Supply Access and Viability

Environmen tal Impact

Employee skills

Company Productivity

Education

Worker Safety

Road safety initiative to educate employees, contractors and the local community on positive road behaviour. Emergency preparedness Additionally, a safety audit by The National Safety Council was conducted during the year at our Mohali API manufacturing facility. Extensive safety training programs, both by internal as well as external specialists

People Health

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WORKERS SAFETY KPIS

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Total number of injuries as a percentage of total number of

workers Total number of leave because of occupational side-effects Compliance to standard safety equipments and processes according to international standards

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PEOPLE HEALTH
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Supply Access and Viability

Employee skills

Environmen tal Impact

Company Productivity

Worker Safety

Education

People Health

A novel idea of providing mobile health care outreach service for the poor and underprivileged was initiated. The program today benefits nearly 2 lakh people in 77 rural and urban slum areas in Punjab, Haryana, Himachal Pradesh, Madhya Pradesh and Delhi. Six well equipped mobile health care vans with teams of medics and paramedics The company initiated Ranbaxy Sanjeevan Swasthya Sewa, a public private partnership between the Punjab State government during 2010. The issues addressed include maternalchild health, family planning, reproductive health, adolescent health, health education and AIDS awareness.
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PEOPLE HEALTH CONTD.

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Supply Access and Viability

Environmen tal Impact

Employee skills

Company Productivity

Education

Worker Safety

People Health

Significant decrease in child mortality by addressing issues like low birth weight, pneumonia, diarrhoea, lack of new born care and management of obstetrical emergencies. Working hand in hand with the Government and other voluntary agencies to address issues like HIV/AIDS, tuberculosis, malaria and female foeticide. Partnerships with reputed national organisations like the Rajiv Gandhi Foundation, Voluntary Health Association of Punjab and the Society for Service to Voluntary Agencies for important projects on Reproductive Child Health and HIV/AIDS.
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PUBLIC HEALTH KPIS

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Measured in two factors

Access to essential medicines. Affordability of essential medicines. KPIs Infant and maternal mortality rate Free consultations offered at RCHS Number of RCHS established Quantity of Medicines and vaccinations administered aptly through urban family welfare centers

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EDUCATION AND SOCIAL UP-LIFTMENT

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Supply Access and Viability

Environmen tal Impact

Employee skills

Two stage initiative under RCHS: RCHS Medical officers were trained to train the dais Training of dais' from the community was done in the second phase. Established community based local groups like health committees, women groups and other interactive groups like dais, anganwari workers, volunteers, adolescents and breast-feeding support groups
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Company Productivity

Education

Worker Safety

People Health

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EDUCATION AND SOCIAL UP-LIFTMENT CONTD..

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Supply Access and Viability

Environmen tal Impact

Employee skills

Company Productivity

Worker Safety

Education

People Health

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Rewards excellence in medical and pharmaceutical sciences Research awards to 5 Indians Conference on topics like cancer, urban health etc Channelizes national and international knowledge in finding cures for diseases, afflicting mankind. Working on the anti-malaria collaborative research project since May 2003 drug that is safe and effective, but also affordable SYNIRAM priced at 130 for three tablets Efforts to make quality anti-HIV generics- better and wider access
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EDUCATION KPI
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Number of local dais trained

Ratio of amount spent for education as to total CSR

budget Contribution in employee time and amount on primary education

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ENVIRONMENTAL IMPACT
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Supply Access and Viability

Employee skills

Environmen tal Impact

Company Productivity

Worker Safety

Education

People Health

In the process of continual improvement in EHS performance aimed at minimizing risks. Employed Environment, Health and Safety Management System (EHSMS) as a global framework to standardize the EHS processes and practices . All the equipments and infrastructure for environmental management are in conformity with regulatory standards . Innovative 'Green Technologies' like the Heat Pump, the Refrigeration Chiller , were deployed in recent projects at the Baddi Dosage Form (DF) site, in Himachal Pradesh.
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Environmental Impact contd.

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Supply Access and Viability

Environmen tal Impact Employee skills

Company Productivity

Education

Worker Safety

People Health

Working proactively to acquire ISO 14001 certification in the recognition that its plants have a substantial environmental impact. Environmental auditing Internal auditing Evaluations by ISO audit organizations Environmental audits per formed by the environmental management department (CSR Department) Environmental accounting Initiatives on biodiversity: use of natural resources status of efforts to comply with the Cartagena Protocol
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ENVIRONMENT KPI
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CO2 emission/ carbon footprint

Compliance: ISO 14001 Volume of waste generated per annum EHS performance matrix

waste recycled (per annum)

Amount of water consumed Green house gases emission Land pollution

Emissions to air
Environment Committee All animal experiments conducted by the R&D Division are reviewed by the

Institutional Animal Care and Use Committee.

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CORPORATE GOVERNANCE
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An institutionalised framework of corporate governance and

code of ethics ensures ethical integrity, reliability and transparency and trust with the shareholders Reporting and disclosures Audits External and Internal Risk assessment Legal compliances Code of conduct

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CORPORATE GOVERNANCE CONTD.

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A 11 member Corporate Ethics Committee is presided by the head of the Legal affairs

and CSR Division (who enforces the compliance rules throughout the company). Compliance training Compliance training is proactively provided to employees and training content changes with respect to regional rules and regulations. Since fiscal 2010, each department, section or group as a unit has to identify the compliance risks presumed to be latent in its workplace, holding discussions to select the most important risks and taking into account the likelihood of each risk and its impact. Actions are taken to decimate such risks by the concerned departments. The Compliance newsletter intranet portal, which introduces our compliance activities and describes difficult cases Whistleblower system Each group company provides reporting channels for whistleblower, such as hotline or e-mail
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CORPORATE GOVERNANCE KPIS

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A survey can be conducted to understand the employees understanding of the core values of the company and its commitment to sustainability. Average of respondents answers as to whether social and environmental issues are important for the future of the company. Average of respondents answers as to whether management demonstrates in words and action that they live up to our Values. Percent of fulfilment of action points planned arising from facilitations of the management values. Average of respondents answers as to whether there is Organisational support for and understanding of responsible business practices.
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POINTS TO PONDER.....
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Is Synriam.- the new anti malarial drug really an act of CSR ?? Ranbaxy claims

that it has spent invested $30 million to develop this drug. The fixed dosage drug is first of its kind DNA report by Priyanka Golikeri reports that the drug is arterolane maleate + piperaquine phosphate. Ciplas anti malarial drug is also an FDC and a combination of two other drugs, also pioneered FDC in HIV The drug was invented by a doctor at university of Nebraska, Ranbaxy entered at the time of clinical trials- Not much work in R&D by Ranbaxy Major cost of any drug : clinical trials which has been covered by DST ( deptt of science &technology)

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POINTS TO PONDER CONTD..

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Stands to make killer profits from these drugs simply through

economies of scale Though the price of drug is just 130, but the number of new malaria cases in the world every year is estimated to be at around 250 million. OTC drugs, Medical representatives US drug Lipitor case Import ban on 30 drugs Expiration date Medical Waste disposal

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DAIICHIS CORPORATE VALUE SYSTEM

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Daiichi Sankyo Group Corporate conduct Charter (based on the principles of the United Nations Global Compact) in October last year. This Charter is used as the basis for the practices of all Group companies.

Vision for 2015:Become a global pharmaceutical innovator

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CSR GOALS OF DAIICHI GROUP

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Goal 1 Promote Management of Compliance globally

Goal 2 Realize a Working Environment Which Respects Employee Diversity

Goal 3 Reinforce Communication with Stakeholders Goal 4 Reduce the Environmental Burden in every operation Goal 5 Broaden the Opportunities of Access to Medical Services, Including Medicine, Globally
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CSR
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Mission:

Enriching lives globally with affordable and quality pharmaceuticals Vision Achieving customer satisfaction is valuable to our business. Provide products and services of highest quality Practice dignity and equity in relationship and provide opportunities for our people to reach their full potential Ensure profitable growth and enhance wealth of shareholders Foster mutually beneficial relations with all our business partners. Manage our operations with high concern for safety and environment. Be a responsible corporate citizen.

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CSR OR CSV??
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Preserving the planet while improving the quality of life for its

current and future inhabitants As defined by Ranbaxy : No proper definition Focus on sustainability of the hybrid business model Possible indicators Market share Market growth Revenue stream

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What Qualities Enable Sustainability Practices to be Implemented..

The Triple Bottom Line SUSTAINABLE ENTERPRISE
COLLABORATIVE INTEGRATION Holistic Integration Broad Stakeholder Engagement TRACTION Alignment of Hard & Soft Organization Systems Metrics Measurement & Reporting FOUNDATION Strategic Centrality Senior Management Embrace/Support Deeply Embedded Values

SHIFT OF FOCUS- WHY??

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DEVELOPING NATIONS Growth rate of 15 % as compared to 5 % for developed countries Rising incomes Large prevalence of cardio vascular diseases and malaria Need for affordable drugs

DEVELOPED NATIONS Aging populations Faltering economic growth Efforts to curb medical and pharmaceutical costs Standards for determining the safety and Efficacy of pharmaceutical products are growing more stringent Hurdles for development of new drugs are getting higher.
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CORPORATE CHARACTERISTICS
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LOW IMPACT
REGENERATIV E RANBAXY BUTTERFLY

HIGH IMPACT
HONEYBEES

DEGENERATIV E
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LOCUSTS CATERPILLARS
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RECOMMENDATIONS
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Major improvement guidance required in audits of plants that had

already received certification. Audit in terms of waste management is required Measures on water, energy conservation Renewable energy are needed Pursue green purchasing from vendors Further penetration into developing markets Focus on distribution networks to reduce costs. The benefits of reduced costs can be transferred to consumers. More stakeholder relation oriented approaches-Requires change in mindset to go from production to co-creation. Public disclosure of CSR budget
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RECOMMENDATIONS CONTD.
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Patents The company should support lifting TRIPS restrictions on the export of generic versions of patented medicines to developing countries where a patent is not in force, in line with the Doha Declaration. The company should disclose to shareholders its lobbying position on patents and expenditure on such lobbying Joint Public Private Initiatives (JPPIs) The company should ensure that its JPPIs state objectives to integrate with and strengthen national health systems, and report on their impact.
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THANK YOU

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01-09-2013