Bal Pharma Directors Report, Bal Pharma Reports by Directors
Bal Pharma
BSE: 524824|NSE: BALPHARMA|ISIN: INE083D01012|SECTOR: Pharmaceuticals
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 The Directors have pleasure in presenting the 27th Annual Report
 together with the Audited Accounts of the Company, for the financial
 year ended on 31st March, 2014. As notified by MCA vide Circular No.
 1/19/2013-CL-V dated 04.04.2014, we have followed the provisions of
 Companies Act, 1956, in the preparation of this report.
                                                       (Rs. in Crores)
 Particulars                             FY 2013-14         FY 2012-13
 1) Total Income from operations             182.01             150.25
 2) Earnings before Interest , Tax ,          18.53              17.88
 Depreciation & Amortisation
 Less :
 Depreciation & Amortisation                   4.74               4.81
 Finance cost                                  7.16               7.98
 Profit before taxation and prior
 period adjustments.                           6.63               5.09
 Less :
 3)   Current Tax (Net)                        1.55                 -
 4)   Deferred Tax                             0.01               0.82
 5)   Extra Ordinary / Non Recurring items       -                  -
 6) Prior year Adjustments                                      (0.01)
 7)   Net Profit                               5.07               4.28
 Add :
 8)   Profit & loss account balance at the    15.16              11.80
 beginning of the year
 9)   Profit /(Loss) made available for       20.23              16.08
 Less :
 10)  Proposed Dividend on Equity Shares       1.11               0.79
 11)  Tax on Dividend                          0.19               0.13
 12)  Balance Carried to Balance sheet        18.93              15.16
 Note : Previous year''s figures have been regrouped wherever necessary
 to confirm to this year''s classification.
 Your Directors are pleased to recommend a payment of Dividend of Re.
 1.00/- (i.e 10%) on each Equity Share of Rs. 10/- each, thereby
 absorbing an amount of Rs. 1.11 crores excluding Dividend Distribution
 Tax of Rs. 0.19 crores. The balance amount of profit is retained as
 surplus in the Statement of Profit and Loss, forming part of Reserves
 and Surplus.
 (i) Turnover and Net profit:
 During the financial year 2013-14, your Company has achieved highest
 ever gross turnover of Rs. 182.01crores as against Rs. 150.25 crores
 achieved during the previous financial year, thus registering a good
 growth of 21.14%.
 The net profit after tax of the Company during the financial year
 2013-14 stands at Rs. 5.07 Crores as against the net profit of Rs. 4.28
 crores achieved in the previous financial year, 2012-13.
 (ii) Formulations'' Business:
 The turnover from export of formulations during the year under review
 stands at Rs. 72.24 crores as against Rs. 48.47 crores achieved during
 the previous financial year, thus registering an excellent growth of
 49%. The growth in export sales of formulations was due to high value
 orders received from overseas markets, especially markets like Latin
 America, Africa, etc.
 In the domestic market, Branded formulations of the Company, consisting
 of mainly Diabetic, Gynaecology and Cardiac drugs have contributed to a
 revenue of Rs. 24.93 crores during the year under review as against Rs.
 24.63 crores achieved during the previous year.
 During the year revenue from the sale of Export formulation comprising
 of Branded Items surpassed the revenue from the sale of Bulk Drugs.
 (iii) Bulk Drug Business:
 Bulk drug business continue to grow, with a revenue of Rs. 62.25 crores
 during the year under review as compared to Rs. 54.86 crores achieved
 during the previous financial year, thereby registering a double digit
 growth of 13.47%. Exports of bulk drug during the year under review
 stands at Rs. 35.42 crores as against Rs. 37.57 crores during the
 previous financial year. Thus, during the year under review, while
 export sales remained stagnant but domestic sales showed a healthy
 growth of 55% by achieving a turnover of Rs. 26.83 Crores as against
 Rs. 17.29 Crores achieved during the previous financial year. In order
 to exploit the Low Volume and High margin products in Bulk Drug
 segment, your Company has commissioned a Kilo Lab facility at
 Bangalore, during the Financial Year 2013-14, which will contribute to
 growth in the years to come.
 (iv) Overall Export Performance:
 The over all exports of your Company during the year under review
 increased to Rs. 107.66 crores from Rs. 86.04 crores achieved during
 the previous financial year, thus registering a growth of 25%. Your
 Company for the first time crossed a milestone of Rs. 100 crore in
 revenues from Export sales.
 Your Company continues to be a consistent net foreign exchange earner
 to the country''s economy.
 (v) Others:
 Revenue from sales to Govt. Institutional business registered a
 turnover of Rs. 2.88 crores during the year under review as against Rs.
 5.11 crores achieved during the previous financial year.  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. 3.19 crores, during the year under review as against
 Rs. 1.92 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.
 As part of its forward integration plans, Your Company has ventured
 into the Health Care Segment by starting its maiden health care clinic
 in Bangalore which is aimed at providing holistic diabetes care to the
 patients. Your Company plans to expand its network based on the success
 of this pilot project.
 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 markets.
 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. 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
 The Board of Directors of the Company has in principle approved setting
 up of a research foundation called as ''Bal Research Foundation'' with an
 objective of doing research and study in allopathic, ayurvedic and
 herbal formulations. This foundation is being formed exclusively as non
 profit organisation with an intention for promoting the wellbeing of
 the society at large.
 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. S. Pranesh,
 Director who is nominee of EXIM Bank, the term loan lender to the
 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 qualifications or adverse remarks by the auditors in their
 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
 generally 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
 business requirements.
 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 the areas of audit
 carried out by them.
 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 31.03.2014:
 (i) that in preparing the Annual Accounts, all the applicable
 Accounting Standards have been followed;
 (ii) that the Directors had selected such accounting policies and
 applied them consistently and made judgements 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 and of the
 P&L of the Company for that period.
 (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
 concern'' basis.
 (v) That the Directors have laid down internal financial controls to be
 followed by the Company and that such internal financial controls are
 adequate and operating effectively.
 (vi) That the Directors have devised proper systems to ensure
 compliance with the provisions of all applicable laws and that such
 systems were adequate and operating effectively.
 As on 31.03.2014, your Company has no subsidiaries, either wholly owned
 or otherwise, Indian or overseas.
 As per provisions of Section 2I7(I)(e) of the Companies Act, I956, 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 & Foreign Exchange Earnings and
 Outflow are given in Annexure I which forms part of the Directors''
 A statement of particulars of employees as required under Section
 2I7(2A) of the Companies Act, 1956, is given as Annexure II and forms
 part of this report.
 As on date of the Report, the Company has not accepted any deposits
 from public.
 Dr. G.S.R Subba Rao and Mr. Pramod Kumar S, Directors, retire by
 rotation and being eligible, offer themselves for re-appointment.  In
 terms of the requirements of the new Companies Act, 2013, their
 appointments as Independent Directors are proposed under Special
 Mr. Shrenik Siroya, Non Independent Director, retires by rotation as
 per the new Companies Act, 2013 and being eligible, offers himself for
 Mr. Shailesh Siroya was reappointed as Managing Director by the Board
 for a period of next 5 (five) years i.e. from 01.08.2014 to 31.07.2019,
 subject to the approval by the Shareholders.
 Messrs T D. Jain & DI Sakaria Chartered Accountants, Statutory Auditors
 of the Company retire at the Annual General Meeting and being eligible,
 offer themselves for re-appointment.
 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 Business.
 The Board has appointed Mr. M.R. Krishna Murthy as Cost Auditor of the
 Company for the financial year 2013-14 for cost audit of both
 Formulations and Bulk Drug units of the Company.  The cost audit report
 will be submitted to authorities within the time limit prescribed for
 the purpose.
 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 financial year 2005-06 that
 is due for transfer to the Investor Education and Protection Fund has
 been duly transferred, during the year.
 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.
 There was no complaint lodged by any woman employee under Sexual
 Harassment of Women at Workplace (Prevention, Prohibition and
 Redressal) Act, 2013, with the Company during the period under report.
 The Board has acknowledged the Managing Director as the CEO of the
 Company and AVP Finance & Accounts as the CFO for the purpose of
 compliance under the Listing Agreement. The CEO and 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.
 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 place on
 record their sincere thanks to the trust reposed on the Company by the
 medical fraternity and the patients. Your board also acknowledge the
 support extended to your Company by Canara Bank, Punjab National Bank,
 EXIM Bank, other Banks & financial institutions, government agencies,
 shareholders and investors at large. Your Company look forward to the
 continued support from all the quarters in its endeavour to help people
 lead healthier lives.
 For and on behalf of the Board of Directors
 Bangalore           Dr. S. Prasanna         Shailesh D Siroya
 28th May, 2014      Whole Time Director     Managing Director
Source : Dion Global Solutions Limited
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