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.
1. FINANCIAL RESULTS
(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
Depreciation & Amortisation 4.74 4.81
Finance cost 7.16 7.98
Profit before taxation and prior
period adjustments. 6.63 5.09
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
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
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.
2. DIVIDEND & APPROPRIATIONS
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
3. BUSINESS OPERATIONS
(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.
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.
4. HEALTH CARE BUSINESS
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.
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 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.
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. 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.
7. AUDITORS'' REPORT
There are no qualifications or adverse remarks by the auditors in their
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. 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.
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 31.03.2014:
(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
(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.
10. SUBSIDIARY COMPANIES
As on 31.03.2014, 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 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''
12. PARTICULARS OF EMPLOYEES
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.
13. PUBLIC DEPOSITS
As on date of the Report, the Company has not accepted any deposits
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.
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 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
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 financial year 2005-06 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.
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.
19. CEO & CFO CERTIFICATION
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.
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 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