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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

IIM RAIPUR

01-09-2013

COMPANY DETAILS
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 Indian Multinational company In Pharmaceuticals-world class

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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
01-09-2013

IIM RAIPUR

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 Karmayog rating – 2/5  Key CSR Areas:        Children Community Welfare Education Healthcare and Health education Rural Development Water Anti .malaria initiative 01-09-2013 IIM RAIPUR .CSR ACTIVITIES.RANBAXY 5  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.

RANBAXY – CSR AREAS 6 Supply Access and Viability Environment al Impact Employee skills Company Productivity Education Worker Safety People Health IIM RAIPUR 01-09-2013 .

•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.SUPPLY ACCESS AND VIABILITY 7 Supply Access and Viability •Honest dealings with suppliers are essential to cultivate mutually beneficial lasting relationships. 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 01-09-2013 IIM RAIPUR .

• 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 IIM RAIPUR 01-09-2013 .EMPLOYEE SKILLS 8 Supply Access and Viability Environmen tal Impact Employee skills • Recruitment based on skills and values.

WORKER SAFETY 9 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. •Extensive safety training programs. a safety audit by The National Safety Council was conducted during the year at our Mohali API manufacturing facility. Emergency preparedness •Additionally. both by internal as well as external specialists People Health IIM RAIPUR 01-09-2013 .

WORKERS SAFETY KPI‟S 10  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 IIM RAIPUR 01-09-2013 .

PEOPLE HEALTH 11 • 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. Madhya Pradesh and Delhi. Haryana. Six well equipped mobile health care vans with teams of medics and paramedics The company initiated Ranbaxy Sanjeevan Swasthya Sewa. health education and AIDS awareness. The issues addressed include maternalchild health. family planning. reproductive health. a public private partnership between the Punjab State government during 2010. The program today benefits nearly 2 lakh people in 77 rural and urban slum areas in Punjab. Himachal Pradesh. adolescent health. 01-09-2013 IIM RAIPUR .

12 • 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. diarrhoea. malaria and female foeticide. tuberculosis. pneumonia. Working hand in hand with the Government and other voluntary agencies to address issues like HIV/AIDS. 01-09-2013 IIM RAIPUR . Voluntary Health Association of Punjab and the Society for Service to Voluntary Agencies for important projects on Reproductive Child Health and HIV/AIDS.PEOPLE HEALTH CONTD. lack of new born care and management of obstetrical emergencies. Partnerships with reputed national organisations like the Rajiv Gandhi Foundation.

KPI‟s • 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 – IIM RAIPUR 01-09-2013 .PUBLIC HEALTH KPI‟S 13 • Measured in two factors Access to essential medicines. – Affordability of essential medicines.

women groups and other interactive groups like “dais”. volunteers. “anganwari” workers. • Established community based local groups like health committees. adolescents and breast-feeding support groups 01-09-2013 Company Productivity Education Worker Safety People Health IIM RAIPUR .EDUCATION AND SOCIAL UP-LIFTMENT 14 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.

15 • Supply Access and Viability Environmen tal Impact Employee skills • Company Productivity • Worker Safety Education People Health • IIM RAIPUR Rewards excellence in medical and pharmaceutical sciences Research awards to 5 Indians Conference on topics like cancer.. but also affordable SYNIRAM priced at 130 for three tablets Efforts to make quality anti-HIV generics.EDUCATION AND SOCIAL UP-LIFTMENT CONTD. Working on the anti-malaria collaborative research project since May 2003 – drug that is safe and effective. urban health etc Channelizes national and international knowledge in finding cures for diseases.better and wider access 01-09-2013 . afflicting mankind.

EDUCATION KPI 16  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 IIM RAIPUR 01-09-2013 .

Employed Environment. All the equipments and infrastructure for environmental management are in conformity with regulatory standards . in Himachal Pradesh. the Refrigeration Chiller . Health and Safety Management System (EHSMS) as a global framework to standardize the EHS processes and practices . 01-09-2013 IIM RAIPUR . were deployed in recent projects at the Baddi Dosage Form (DF) site. Innovative 'Green Technologies' like the Heat Pump.ENVIRONMENTAL IMPACT 17 • 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.

18 • 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 Impact contd. 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 01-09-2013 IIM RAIPUR .

IIM RAIPUR 01-09-2013 .ENVIRONMENT KPI 19 • 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.

reliability and transparency and trust with the shareholders Reporting and disclosures Audits – External and Internal Risk assessment Legal compliances Code of conduct IIM RAIPUR 01-09-2013 .CORPORATE GOVERNANCE 20  An institutionalised framework of corporate governance and      code of ethics ensures ethical integrity.

which introduces our compliance activities and describes difficult cases  Whistleblower system  Each group company provides reporting channels for whistleblower. 21  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).  The Compliance newsletter intranet portal.  Actions are taken to decimate such risks by the concerned departments. holding discussions to select the most important risks and taking into account the likelihood of each risk and its impact. each department.CORPORATE GOVERNANCE CONTD. such as hotline or e-mail IIM RAIPUR 01-09-2013 .  Since fiscal 2010. Compliance training  Compliance training is proactively provided to employees and training content changes with respect to regional rules and regulations. section or group as a unit has to identify the compliance risks presumed to be latent in its workplace.

• 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. IIM RAIPUR 01-09-2013 . • 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.CORPORATE GOVERNANCE KPI‟S 22 A survey can be conducted to understand the employee‟s understanding of the core values of the company and it‟s commitment to sustainability.

. also pioneered FDC in HIV The drug was invented by a doctor at university of Nebraska...the new anti malarial drug really an act of CSR ??  Ranbaxy claims     that it has spent invested $30 million to develop this drug..POINTS TO PONDER. 23  Is Synriam. Cipla‟s anti malarial drug is also an FDC and a combination of two other drugs. 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)  IIM RAIPUR 01-09-2013 ..  The fixed dosage drug is first of its kind DNA report by Priyanka Golikeri reports that the drug is arterolane maleate + piperaquine phosphate.

Medical representatives US drug Lipitor case Import ban on 30 drugs Expiration date Medical Waste disposal IIM RAIPUR 01-09-2013 . 24  Stands to make killer profits from these drugs simply through       economies of scale Though the price of drug is just 130.POINTS TO PONDER CONTD. but the number of new malaria cases in the world every year is estimated to be at around 250 million.. OTC drugs.

Vision for 2015:Become a global pharmaceutical innovator IIM RAIPUR 01-09-2013 .DAIICHI‟S CORPORATE VALUE SYSTEM 25 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.

Including Medicine. Globally IIM RAIPUR 01-09-2013 .CSR GOALS OF DAIICHI GROUP 26 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.

CSR 27  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. IIM RAIPUR 01-09-2013 .  Be a responsible corporate citizen.  Manage our operations with high concern for safety and environment.

CSR OR CSV?? 28  “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 IIM RAIPUR 01-09-2013 .

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 ..

01-09-2013 IIM RAIPUR .SHIFT OF FOCUS.WHY?? 30 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.

CORPORATE CHARACTERISTICS 31 LOW IMPACT REGENERATIV E RANBAXY BUTTERFLY HIGH IMPACT HONEYBEES DEGENERATIV E IIM RAIPUR LOCUSTS CATERPILLARS 01-09-2013 .

More stakeholder relation oriented approaches-Requires change in mindset to go from production to co-creation. Public disclosure of CSR budget 01-09-2013 IIM RAIPUR . The benefits of reduced costs can be transferred to consumers. energy conservation – Renewable energy are needed Pursue green purchasing from vendors Further penetration into developing markets Focus on distribution networks to reduce costs. Audit in terms of waste management is required Measures on water.RECOMMENDATIONS 32  Major improvement guidance required in audits of plants that had        already received certification.

IIM RAIPUR 01-09-2013 . in line with the Doha Declaration. and report on their impact.  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. 33 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.RECOMMENDATIONS CONTD.

34 THANK YOU IIM RAIPUR 01-09-2013 .