The Directors have pleasure in presenting the 25th Annual Report
together with the Audited Accounts of the Company for the financial
year ended on 31st March, 2012.
1. FINANCIAL RESULTS:
(Rs. in Lakhs)
Particulars 2011-12 2010-11
1) Total Income 14,224.60 11,664.84
2) Earnings before Interest , Tax, 1588.51 1131.76
Depreciation & Amortisation
Depreciation & Amortisation 413.08 342.36
Finance cost 729.91 679.13
Profit /(Loss)before taxation and prior
period adjustment 445.52 110.27
3) Provision for taxation 8.95 4.53
4) Deferred Tax 60.75 58.67
5) Extra Ordinary / Non Recurring items - -
6) Prior year adjustments 0.12 (0.16)
7) Profit after Tax 375.70 47.23
8) Profit & loss account balance at the 804.53 809.56
beginning of the year
9) Profit /(Loss) made available for 1,180.23 856.79
10) Proposed Dividend on Equity Shares - -
11) Tax on Dividend - -
12) Balance Carried to Balance sheet 1,180.23 856.79
Note: Previous year''s income has been regrouped in line with that of
the year under review for comparison. The opening balance of P & L has
been reduced during the year consequent upon merger of Basava Chem
Ltd., with the Company.
In view of the capex plans and to facilitate expansion programs under
consideration, your Directors have decided not to recommend payment of
dividend for the financial year 2011-12.
4. BUSINESS OPERATIONS:
During the financial year 2011-12, your Company has achieved a total
turnover of Rs 142.25 crores as against Rs. 116.65 crores achieved during
the previous year 2010-11, thus registering a growth of 21.95%.
With this increase in turnover, the net profit after tax of the Company
during 2011-12 has increased substantially to Rs. 3.76 crores as against
the net profit of Rs. 0.47 crore achieved in the previous year, 2010-11.
The bulk drug business continues to dominate, as the total sales on
this segment has increased from Rs. 46.20 crores in 2010-11 to Rs. 53.01
crores during the year 2011-12. The products mix during the year
2011-12 improved with higher sale of high value items in addition to
our regular API.
Exports of Bulk Drugs has registered a growth of 16.05% during the year
under review with a turnover of Rs. 36.44 crores as against Rs. 31.40
crores achieved during the previous financial year.
The export formulations division registered a growth of 6.71% by
increasing its turnover from Rs. 36.94 crores in the previous year to Rs.
39.42 crores during the year under review. Your Company expanded its
presence in many new global markets such as Latin America, many African
countries, South East Asia etc.
Your Company''s branded formulations Divisions mainly consisting of
Diabetic and Cardiac Products made a net sale of Rs. 24.09 crores
during 2011.12 as against Rs. 19.58 crores during the previous year,
thereby strengthening the Company''s presence in the domestic market.
The over all exports of your Company during the year under review has
increased to Rs. 75.85 crores from Rs. 66.48 crores achieved during the
Supplies to Govt. Institutional business registered a turnover of Rs.
8.14 crores during the year, as against Rs. 6.44 crores during the
previous year and the Ayurvedic products Division has achieved a turn
over of Rs 1.73 crores, during the year under review as against Rs. 1.94
crores achieved during the previous financial year.
Your Company has also won the Best Exporter award from the Sri Lankan
Government for the Year 2011-12 for supply of drugs and medical
equipments to Sri Lanka Pharmaceutical Corporation, a Government of Sri
5. RESEARCH & DEVELOPMENT:
The Research and Development division of your Company continued its
activities in the field of development and standardization of pathways
for the manufacture of novel and high value active pharmaceutical
ingredients. The clear pathways thus established have resulted in the
scale up of production levels of these drugs to meet the needs of the
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 your Company offers to its customers being of
such high order, there is ready acceptance of these products in the
international markets. There is continuing and growing demand for
products of your Company. New products in the therapeutic segments of
antihistamines, anxiolytics and for the treatment of neurological
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 consisted of Dr. G.S.R. Subba Rao, Independent
Director as Chairman, Mr. Ajit Kumar, nominee Director of EXIM Bank and
Mr. Shrenik Siroya, Non-executive Director; Mr. Pramod Kumar. S who is
Independent Director was inducted into the Committee as member, with
effect from 10.08.2012. The 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.
7. AUDITORS'' REPORT
There are no adverse qualifications or remarks in the Auditors'' Report.
However, regarding the outstanding un-paid dividend amount for the year
2003.04 of Rs. 1,84,828 which was due for transfer to the Investor
Education and Protection Fund, as mentioned in the Auditors'' Report, it
is hereby confirmed that the amount has since been transferred to 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
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
Internal Audit is carried out by Messrs. Manjunath & Co. Bangalore, an
independent firm of Chartered Accountants. They interact with the
Audit Committee and have reported to the Directors that there is
adequate internal control systems in respect of areas carried out by
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 31.03.2012:
(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:
The Amalgamation proceedings of Basav Chem limited, with Bal Pharma
Limited was approved by Honourable High Court of Karnataka vide COP No
90/2010 and 89/2010. As on 31.03.2012 the Company has no subsidiaries,
either wholly owned or otherwise. Hence, the financial results of the
Company for the year under review and the results pertaining to the
previous year, are not entirely comparable.
11. PARTICULARS OF EMPLOYEES:
There was no employee drawing remuneration falling within the limits
prescribed under Section 2I7(2A) of the Companies Act, 1956.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND FOREIGN EXCHANGE OUTGO:
As per provisions of Section 217(I)(e) of the Companies Act, I956, read
with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, I988, details relating to the Conservation
of Energy and Technology Absorption and Foreign Exchange Earnings and
Outflow are given in Annexure I, which is forming part of the Directors
13. PUBLIC DEPOSITS:
As on date of the Report, the Company has not accepted any public
Dr. G. S. R Subba Rao and Mr. Shrenik Siroya, Directors retire by
rotation at the 25th Annual General Meeting of the Company and being
eligible, offer themselves for reappointment. Your Directors recommend
Messrs T. D. Jain & DI Sakaria (erstwhile Messrs Ostawal & Jain),
Chartered Accountants, Statutory Auditors of the Company retire at the
Annual General Meeting and are eligible them for appointment.
16. COST AUDIT:
Pursuant to Section 233B of the Companies Act, I956, the Central
Government has prescribed Cost Audit of the Company''s Formulations
Division as well as Bulk Drug Division.
Subject to the approval of the Central Government, the Board has
appointed Mr. M.R. Krishna Murthy as Cost Auditor of the Company for
the financial year, 2011-12 for cost audit of both Formulation and Bulk
Drug divisions of the Company separately. The Cost Audit is under
progress and the Company will submit the Cost Auditor''s report to the
Central Government soon.
17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHAREHOLDERS:
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.
18. HUMAN RESOURCES:
The Company''s Human Resource agenda for the year focused on
strengthening four key areas: Building a robust talent pipeline,
enhancing individual and organizational capabilities for future
readiness, driving greater employee engagement, and strengthening
employee relations through progressive people management.
19. INSURANCE COVERAGE:
The Board reports that your Company has adequate insurance cover on all
the 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 and the trust reposed on us by the
medical fraternity and the patients. The Directors also acknowledge the
support and wise counsel extended to the Company by Canara Bank, Punjab
National Bank, EXIM Bank, State Bank of India and other Banks and
financial institutions, government agencies, shareholders and investors
at large. Your Directors look forward to having the same support in
their endeavour to help people lead healthier lives.
For and on behalf of the Board of Directors
Dr. S. Prasanna Shailesh Siroya
10th August, 2012 Executive Director Managing Director