The Directors have pleasure in presenting the 26th Annual Report
together with the Audited Accounts of the Company for the financial
year ended on 31st March, 2013.
1. FINANCIAL RESULTS
Particulars 2012-13 2011-12
1) Total Income from operations 150.25 142.25
2) Earnings before Interest, Tax, 17.88 15.89
Depreciations Amortisation 4.81 4.13
Finance cost 7.98 7.39
Profit/(Loss)before taxation and prior
period adjustment 5.09 4.37
3) Current Tax
4) Deferred Tax 0.82 0.61
5) Extra Ordinary/Non Recurring items
6) Prior year Adjustments (0.01) -
7) Profit after tax for the year 4.28 3.76
8) Profits loss account balance at the 11.80 8.04
beginning of the year
9) Profit/(Loss) made available for 16.08 11.80
10) Proposed Dividend on Equity Shares 0.79 0.00
11) Tax on Dividend 0.13 0.00
12) Balance Carried to Balance sheet 15.16 11.80
Note : Previous year''s expenses have been regrouped to confirm this
2. DIVIDEND & APPROPRIATIONS
Your directors are pleased to recommend payment of dividend of Re.
0.75/- (i.e 7.5%) on each equity share of Rs. 10 each, thereby absorbing
an amount of Rs. 0.92 crores including dividend distribution tax of Rs.
0.13 crores. The balance amount of profit is retained as surplus in the
statement of profit and loss, forming part of reserves and surplus.
3. BUSINESS OPERATIONS
(i) Turnover and Net profit
Duringthe financial year 2012-13, your Company has achieved an gross
turnover of Rs. 150.25 cores as against Rs. 142.25 crores achieved during
the previous financial year, thus registering a moderate growth of
The net profit after tax of the Company during the financial year
2012-13 stands at Rs. 4.28 Crores as against the net profit of Rs. 3.75
crores achieved in the previous financial year, 201
l-l2.Theprofitofthefinancialyear20l l-l2includeaone time gain of Rs. 0.88
crores on sale of fixed assets (building). If the same is excluded for
comparison purpose, the net profit growth during the current financial
year stands at 49% over the previous year.
The turnover from export formulations during the year under review
stands at Rs. 48.47 crores as against Rs. 39.42 crores achieved during the
previous financial year thus registering a good growth of 22.96%. The
growth in export was due to penetration in new virgin markets like Lain
America, African and South East Asian Countries with both the plants at
Bangalore and Uttaranchal contributing with higher volume of production
to meet the demand.
In the domestic market, Branded formulations of the company, consisting
of mainly Diabetic and Cardiac drugs have contributed to a revenue of Rs.
24.63 crores during the year under review as against Rs. 24.09 crores
achieved during the previous year, Considering the overall sluggishness
in the domestic market, the performance may be considered satisfactory.
(iii) Bulk Drugs
Bulk drug business continues to be the major contributor of revenue,
with a revenue of Rs. 54.86 crores during the year under review as
compared to Rs. 53.01 crores achieved during the previous financial year,
thereby registering the moderate growth of 3.48%. Exports of bulk drug
during the year under review stands at Rs. 37.57 crores as against Rs.
36.44 crores during the previous financial year.
(iv) Overall export performance
The over all exports of your Company during the year under review
increased to Rs. 86.04 crores from Rs. 75.85 crores achieved during the
previous financial year, thus registering a growth of 13.43%
Your company continues to be a consistent net foreign exchange earner
to the country''s economy.
Revenue from sales to Govt. Institutional business registered a
turnover of Rs. 5.1 I crores during the year under review as against Rs.
8.14 crores achieved during the financial year 201 1-12. This negative
growth in turnover is mainly due to company''s focus shift towards
export markets. The Ayurvedic products Division has contributed to a
turnover of Rs. 1.92 crores, during the year under review as against Rs.
1.73 crores registered during the previous year. Your company is
planning to give more focus to this division to improve its share in
the overall revenue contribution in the years to come.
5. RESEARCH & DEVELOPMENT
The Research and Development division of our Company has continued its
activity in the field of development and standardization of pathways
for the manufacture of novel and high value active pharmaceutical
ingredients. The efficient pathways thus devised have resulted in
reaching commercial production levels of these drugs to meet the needs
of the international market.
The products developed by the R&D division, when they enter the
manufacturing stream, are backed by extensive documentation of data
pertaining to the control of the quality of the drug. The quality and
purity of these products are established by recourse to extensive and
sophisticated analytical methodology. The R&D division works in tandem
with the Quality Control Department in the development of stringent
analytical procedures and protocols.
The quality of the drugs that are offered to our customers being of
such high order that there is ready acceptance of our products in the
international markets. There is continuing and growing demand for
products of your Company. Very new products in the therapeutic segments
of anti allergic, psychiatrics and for the treatment of inflammatory
disorders are being introduced in the near future in the commercial
market. These products are of direct result of R&D efforts in this
6. AUDIT COMMITTEE
The Audit Committee, a sub-committee of Board consists of Dr. G.S.R
Subba Rao, Independent Director, Mr. Shrenik Siroya, Non- executive
Director, Mr.Pramod Kumar S Independent Director and Mr. Ajit Kumar,
Director who is nominee of EXIM Bank, the lender to the company.
This Committee is Chaired by Dr.G.S.R Subba Rao. Audit Committee has
been discharging its duties under SEBI Guidelines read with the listing
agreement. The said Committee is also functioning as Audit committee
under section 292A of the Companies Act, 1956.
There are no adverse qualifications or remarks by the Auditors'' in the
8. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an adequate system of internal controls with clearly
defined authority limits. They ensure that the Company''s assets are
protected against loss from unauthorised use or disposition and all
transactions are authorised, recorded and reported in conformity with
general accepted accounting principles. These systems are designed to
ensure accuracy and reliability of accounting data, promotion of
operational efficiency and adherence to the prescribed management
policies. These policies are periodically reviewed to meet current
Internal Audit is carried out by Messrs., Manjunath & Co. a firm of
independent Chartered Accountants. They interact with the Audit
Committee and have reported to the Directors that there is adequate
internal control systems in place in respect of areas of audit carried
out by them.
9. DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance to the provisions of Section 2I7(2AA) of the Companies
Act, 1956, your Directors wish to confirm with reference to statement
of Accounts for the financial year ended on 31.03.2013:
(i) that in preparing the Annual Accounts, all applicable Accounting
Standards have been followed;
(ii) that the accounting policies adopted are consistently followed and
the judgements or estimates made 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 and of the profit and Loss Account of the
Company for the financial year;
(iii) that the 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/detecting fraud and other irregularities;
(iv) That the Directors have prepared the annual accounts on ''going
10. SUBSIDIARY COMPANIES
As on 3 1.03.2013, your company has no subsidiaries, either wholly
owned or otherwise, Indian or overseas.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND FOREIGN EXCHANGE OUTGO
As per provisions of Section 217( I )(e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, details relating to the Conservation
of Energy and Technology Absorption and Foreign
Exchange Earnings and Outflow are given in Annexure I which forms part
of the Directors''Report.
12. PARTICULARS OF EMPLOYEES
A statement of particulars of employees as required under Section
217(2A) of the Companies Act, 1956, is given as Annexure II and forms
part of this report.
13. PUBLIC DEPOSITS
As on date of the Report, the Company has not accepted any deposits
Dr. S Prasanna and Mr. Pramod Kumar. S, Independent Directors of the
Company are retiring by rotation at the ensuing Annual General Meeting
and being eligible, offer themselves for reappointment. Your Directors
recommend their reappointment.
Messrs TD.jain & Dl Sakaria (eststwhile) M/s Ostawal & Jain, Chartered
Accountants, Statutory Auditors of the Company retire at the Annual
General Meeting and being eligible offer them selves for
16. COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company''s Formulations as
well as Bulk Drug Units.
The Board has appointed Mr. M.R Krishna Murthy as Cost Auditor of the
Company for the financial year 2012-13 for cost audit of both
Formulation and Bulk Drug units of the Company and the Company has also
obtained the central government approval for the same. The Cost Audit
is under progress and the Company will submit the Cost Auditor''s report
for FY 2012-13, to the Central Government soon.
17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHARE HOLDERS
A detailed report on the Corporate Governance System and practices of
the Company are given in a separate section in this Annual Report.
Detailed information for the shareholders is given in Additional
Shareholders information section.
Outstanding Un-paid dividend amount for the year 2004-05 that is due
for transfer to the Investor Education and Protection Fund has been
duly transferred, during the year.
18. HUMAN RESOURCES
The human resources of the Company continue to contribute its share in
the growth of the Company. Human Resource agenda of the company for the
year continued to focus on building a robust talent pipeline, enhancing
individual and organizational capabilities for future readiness,
driving greater employee engagement, and strengthening employee
relations though progressive people management.
19. CEO &CFO CERTIFICATION
The Board has acknowledged the Managing Director as the CEO of the
Company and G.M Finance as the CFO for the purpose of compliance under
the Listing Agreement. The CEO & CFO have certified to the Board, in
terms of Clause 49 of the Listing Agreement that the financial
statements present a true and fair view of the company''s affairs and
are in compliance with accounting standards.
20. INSURANCE COVERAGE
The Board of Directors reports that your Company has adequate and
comprehensive insurance cover on all the movable and immovable assets
of the Company.
Your Directors place on record their sincere appreciation of
significant contributions made by the employees through their
dedication, hard work and commitment. Your directors also places on
record its thanks on the trust reposed on the Company by the medical
fraternity and the patients. We also acknowledge the support extended
to us by Canara Bank, Punjab National Bank, EXIM Bank, and other Banks
& financial institutions, government agencies, shareholders and
investors at large. We look forward to having the same support in our
endeavor to help people lead healthier lives.
For and on behalf of the Board of Directors
Bangalore Dr. S Prasanna Shailesh Siroya
27th May, 2013 Non-Executive Director Managing Director