Granules India
BSE: 532482 | NSE: GRANULES | ISIN: INE101D01012 | Pharmaceuticals
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Jun '08 |
The Directors submit the Annual Report of the Company together with the
audited statement of accounts for the year ended June 30, 2008.
1. Financial results
Particulars 2007-08 2006-07
(Rs.in lacs) (Rs.in lacs)
Sales 21,414.65 18,570.10
Other income 68.51 246.31
Total income 21,483.16 18,816.41
Expenditure before depreciation,
interest and tax 18,032.71 15,447.16
Interest and finance charges 1,197.21 1,202.85
Depreciation and amortisation 972.09 817.73
Profit before tax 1,281.15 1,348.67
Provision for taxes including deferred tax
and FBT 367.70 336.70
Prof it after tax 913.45 1,011.97
Add: surplus brought forward 3,324.03 2,630.90
Surplus available 4,237.48 3,642.87
Appropriations
Dividend 250.71 250.29
Tax on distributed profits 42.60 42.54
Transfer to general reserve 23.00 27.00
Balance carried to balance sheet 3,921.17 3,323.04
2. Changes in share capital
During the financial year 2007-08, 33,520 equity shares were issued and
allotted to the employees consequent to the exercise of the stock
options issued by the Company, which resulted in an increase in the
paid-up equity share capital from Rs. 20,02,36,340 to Rs. 20,05,71,540.
In accordance with the resolution passed by the shareholders at the
Extraordinary General Meeting held on February 17, 2007, the Committee
of the Board allotted 16,00,000 warrants at Rs. 94.50 per warrant,
convertible into equity shares of Rs. 10 each to the promoters of the
Company. On the said warrants, T0% of the value i.e., Rs. T,5T, 20,000
was received towards application money. As on June 30, 2008, the entire
16,00,000 warrants were outstanding.
The said warrants were not exercised by the applicants before the due
date i.e. September 27, 2008 and consequently, the entire application
amount of Rs. 1,51,20,000 received from the applicants was forfeited to
the Company.
3. Dividend
In view of the Companys profitable performance, the Directors are
pleased to recommend for approval of the shareholders, a dividend of
12.5% on 2,00,57,1 54 equity shares (face value of Rs. 10 each) of the
Company in respect of the financial year 2007-08. The dividend, if
declared as above, would involve an outflow of Rs. 250.71 lakhs towards
dividend and Rs. 42.61 lakhs towards dividend tax, resulting in a total
outflow of Rs. 293.32 lakhs. Under the Income Tax Act, 1961, the
dividend will be tax free in the hands of the shareholders.
4. Transfer to reserves
The Company proposes to transfer Rs. 23 lakhs to the general reserve
out of the amount available for appropriations. After the
appropriations, it is proposed that Rs. 597.13 lakhs be retained from
the current years profits.
5. Operating results
The Company has achieved a turnover of Rs. 21,414.65 lakhs, showing a
significant 15% growth compared with that of the previous year. The
operating profit during the year has increased 13% to Rs. 6,065.95
lakhs. Profit after tax has decreased 10% to Rs. 913.45 lakhs.
6. Funding
Your Company has availed the sanctioned loan of US$ 9 million from the
International Finance Corporation (IFC).
7. Research and development
R&D at Granules India, a service organisation, is catering to our
in-house product development requirements for both PFI and finished
dosage. Our in-house development philosophy aims to collaborate and
offer a business model of delivering end-to-end solutions for OTC -
monograph, OTC ANDA and prescription products.
During the year, the Companys R&D developed many new products with
novel formulations that deliver superior customer value and better
consumer appeal. Process technology development for new API launch and
cost reduction of currently produced APIs were focused on.
Granules provide comprehensive drug development resources and solutions
for pre-formulation, formulation development, analytical development,
cGMP scale-up, stability and also coordinate bioavailability,
bioequivalence studies for regulated and emerging markets.
8. Directors
Pursuant to Article 51 of the Articles of Association of the Company,
Shri L. S. Sarma and Shri A. P. Kurian, Directors, will retire by
rotation at the forthcoming Annual General Meeting and being eligible
offer themselves for re-appointment. Your Board of Directors recommends
their re-appointment.
Brief profiles of Shri L. S. Sarma and Shri A. P. Kurian, the nature of
their expertise in specific functional areas and the number of
companies in which they hold directorships and memberships /
chairmanships of committees of the board, as stipulated under Clause 49
of the Listing Agreement with the stock exchanges, have been provided
in the section on Corporate Governance in this Annual Report.
9. Corporate Governance report and Management Discussion and Analysis
A report on Corporate Governance is attached to this Report as is a
Management Discussion and Analysis statement.
10. Directors responsibility statement
Pursuant to the requirement of Section 217 (2AA) of the Companies Act,
1956 and based on the representations received from the operating
management, the Directors hereby confirm that:
i. the applicable accounting standards issued by the Institute of
Chartered Accountants of India have been followed;
ii. appropriate accounting policies have been applied consistently.
Judgement and estimates that are reasonable and prudent have been made,
so as to give a true and fair view of the state of affairs the profits
of the Company as at the end of the financial year.
iii. proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv. the annual accounts have been prepared on a going concern basis.
11. Subsidiary company, Granules USA Inc.
Granules USA Inc., a wholly owned subsidiary company, operates for the
marketing requirements of the Company in USA. During 2007-08, the
subsidiary company achieved a turnover of Rs. 5,508.52 lakhs.
The relevant particulars of Granules USA Inc. and the consolidated
final accounts for the year ended June 30, 2008, in accordance with the
Accounting Standard AS-21 on Consolidated Financial Statements, read
with Accounting Standard AS-23 on Accounting for Investment in
Associates, are appended to this report.
12. Joint venture company: Granules-Biocause Pharmaceutical Co. Ltd.
During the year under review, the joint venture company has commenced
commercial operations. At a 50% share, joint venture achieved a
turnover of Rs. 3,818.47 lakhs.
13. Auditors
M/s. Kumar & Giri, Chartered Accountants, who are the statutory
auditors of the Company hold office, in accordance with the provisions
of the Companies Act, 1956, up to the conclusion of the forthcoming
Annual General Meeting and have confirmed their eligibility and
willingness for re- appointment.
14. Cost auditors
Mr. E. Vidya Sagar, Cost Accountant, was appointed as the cost auditor
of the Company, subject to the consent of the Government of India to
conduct cost audits of the bulk drugs division of the Company for
2008-09.
15. Fixed deposits
Your Company has not accepted any public deposits and, as such, no
amount on account of principal or interest on public deposits was
outstanding on the date of balance sheet.
16. Conservation of energy and technology absorption
The particulars as prescribed under section 217 (1) (e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in
Annexure I to this report.
17. Human resources
Your Company enjoys cordial employee relations, marked by empowerment
and delegation. In view of this need, the Company approved an Employee
Stock Option Plan and implemented the Granules India Equity Option Plan
2002, framed and implemented in accordance with the SEBI (Employees
Stock Option Scheme and Employees Stock Purchase Scheme) Regulations
1999.
18. Particulars of employees
Information as required under Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975, as
amended, are given in Annexure II to this report.
19. Employee Stock Option Plan
Your Company implemented the Granules India Equity Option Plan 2002
with the objective of enhanced employee commitment.
The details of the stock options granted under the Granules India
Equity Option Plan 2002, including grants to senior management
(comprises all Independent Directors), are given below:
Description Deatails
A Total number of shares 3,91,082 - one share represents
one option
B Pricing formula At the fair market value as on
the date of the grant
C Options granted during the year Nil
D Options vested during the year 41,520
E Options exercised during the year 33,520
F Total number of shares arising as a
result of exercise of options 33,520
G Options lapsed during the year 1,04,100
H Variation of terms of options Not applicable
I Money realised by exercise of
options during the year Rs. 1 5,01,780
J Total number of options in force 45,500
K Options granted to the Independent
Director during the year Nil
L Employees who were granted options
amounting to 5% or Nil
more of the options granted
during the year.
M Employees who were granted options
in any one year Not applicable
equal to or exceeding 1% of the
issued capital of the
Company at the time of grant.
20. Transfer of unpaid / unclaimed dividend to Investor Education and
Protection Fund (IEPF)
Pursuant to the provisions of Section 205A (5) of the Companies Act,
1956, the dividends declared for the year 1999-2000 and which remained
unpaid / unclaimed for a period of seven years has been transferred to
the credit of the Investor Education and Protection Fund (IEPF),
established by the Central Government pursuant to Section 205C of the
said Act.
21. Related party transactions
As a matter of policy, your Company carries out transactions with
related parties on an arms- length basis. Statement of these
transactions is given in the Notes to Accounts in compliance with
Accounting Standard AS - 18.
22. Acknowledgement
The Directors thank the Companys customers, vendors, investors,
business associates, bankers and financial institutions for their
support.
The Directors also thank the Government of India and the Governments of
various countries, the concerned State Governments and other government
Departments and governmental Agencies for their cooperation.
The Directors place on record their appreciation of the contributions
made by every member of the Granules family.
On behalf of the Board of Directors
Place : Hyderabad Dr. C. Nageswara Rao
Date : October 20, 2008 Chairman |
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| Source : Religare Technova | |
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