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Bal Pharma
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Directors Report Year End : Mar '13    « Mar 12
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
 
                                                          (Rs.in Crores)
       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
 
       Less:
 
       Depreciations Amortisation                  4.81          4.13
 
       Finance cost                                7.98          7.39
 
       Profit/(Loss)before taxation and prior
       period adjustment                           5.09          4.37
 
       Less:
 
 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
 
       Add:
 
 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
       appropriation
 
       Less:
 
 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
 year''s classification.
 
 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
 5.62%.
 
 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.
 
 (ii) Formulations
 
 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.
 
 (v) Others
 
 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
 direction.
 
 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.
 
 7.  AUDITORS''REPORT
 
 There are no adverse qualifications or remarks by the Auditors'' in the
 Auditors''Report.
 
 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
 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 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
 concern''basis.
 
 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
 from public.
 
 14.  DIRECTORS
 
 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.
 
 15.  AUDITORS
 
 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
 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 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.
 
 21.  APPRECIATION
 
 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
Source : Dion Global Solutions Limited
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