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Ranbaxy Laboratories
BSE: 500359|NSE: RANBAXY|ISIN: INE015A01028|SECTOR: Pharmaceuticals
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Download Annual Report PDF Format 2011 | 2010
Directors Report Year End : Dec '12    Dec 11
The Directors have pleasure in presenting the 52nd Annual Report and
 Audited Accounts for the year ended December 31, 2012.
 
 STANDALONE WOrkiNg rESULTS UNDEr iNDiAN gAAP
 
                                                     Rs. in Million
 
                                               Year ended   Year ended
                                               December     December
                                               31,2012      31, 2011
 
 Net Sales                                     61,124.43    74,758.96
 
 Expenditure                                   63,437.65    72,980.97
 
 Proft before exceptional items and tax         2,169.42     7,236.15 
 
 Exceptional Items
 
  Settlement provision                                -    26,480.00
 
  Provision for other than temporary 
 diminution in the value of non-current 
 investment                                     1,030.00            -
 
  Product recall                               2,370.20            -
 
  Loss on foreign currency option 
 derivative, net (other than on loans)            412.05    11,242.85
 
 (Loss)/Proft before Tax                       (1,642.83)  (30,486.70) 
 
 Income tax expenses
 
  Current tax                                    (19.44)      (33.07)
 
  Deferred tax                                        -        66.86
 
 (Loss) After Tax                              (1,623.39)  (30,520.49)
 
 Balance as per the last Balance Sheet        (23,689.31)    6,828.68
 
 (Loss)/Proft available for appropriation     (25,312.70)  (23,691.81)
 
 CONSOLiDATED WOrkiNg rESULTS UNDEr iNDiAN gAAP
 
 Net Sales                                    122,528.94    99,700.02
 
 Expenditure                                  112,784.10    95,369.04
 
 Proft before exceptional items and tax        14,720.53    10,480.04 
 
 Exceptional Items
 
  Settlement provision                                -    26,480.00
 
  Proft/(Loss) on disposal/sale of 
 subsidiaries and long term investment, (net)          -      (377.99)
 
  Product recall                               1,859.54            -
 
  Loss on foreign currency option 
 derivatives, net (other than on loans)           412.05    11,242.85
 
 Proft/(Loss) before tax share in loss of
 associates (net) and minority interest        12,448.94   (26,864.82) 
 
 Income tax expenses
 
  Current tax                                  2,912.58     1,959.62
 
  Deferred tax                                    26.46         9.72
 
 Proft/loss after tax and before share 
 in loss of Associates (Net) and 
 Minority Interest                              9,509.90   (28,834.16)
 
 Share in Loss of Associates (Net)                185.82        65.90
 
 Minority Interest in the proft 
 for the year (net)                                96.44        97.23
 
 Proft/ (Loss) after tax, share of loss 
 of associates(net) and minority interest       9,227.64   (28,997.29)
 
 Balance as per last Balance Sheet            (17,184.87)   11,809.92
 
 (Loss) available for appropriations           (7,957.21)  (17,187.37)
 
 Proposed Dividend                                     -         0.65
 
 Tax on Proposed Dividend                              -        (3.15)
 
 (Defcit)/ Surplus transferred to 
 Reserves & Surplus                            (7,957.21)  (17,184.87) 
 
 CONSOLiDATED FiNANCiAL STATEMENTS
 
 Consolidated Financial Statements for the year ended December 31, 2012,
 under Indian GAAP form part of the Annual Report.
 
 OPErATiONS
 
 The Company continued to be the leader amongst the pharmaceutical
 companies from India with consolidated global sales of Rs. 122,529
 million against Rs. 99,700 million in the previous year registering a
 growth of 23%. Proft before exceptional items and tax stood at Rs.
 14,721 million against a loss of Rs. 10,480 million in the previous
 year. Proft after tax stood at Rs. 9,228 million as against a loss of
 Rs. 28,997 million in the previous year despite the challenges in some
 of the major markets and foreign exchange impact due to depreciation of
 the Rupee against major currencies. However, in the standalone
 accounts, the Company incurred a loss of Rs. 1,623 million primarily
 due to foreign exchange impact on account of depreciation of the Rupee
 against major currencies, impairment of investments in subsidiaries and
 recall of Atorvastatin in the U.S.A.
 
 In April 2012, the Company launched India''s frst new drug, SynriamTM, a
 new age anti-malarial for the treatment of uncomplicated Plasmodium
 falciparum malaria in adults, thereby opening a new chapter in the
 history of Research & Development in India.
 
 During the second half of the year, the Company made a voluntary recall
 of Atorvastatin tablets in the U.S.A. due to the potential presence of
 a very small foreign matter. Due to this, the Company had to write off
 the inventory which has impacted the proftability of the Company.
 
 In continuation of signing of the Consent Decree with the USFDA, the
 Company is in the fnal stage of settlement with the U.S.  Department of
 Justice (DOJ) to resolve civil and criminal liabilities.
 
 The Company continues to maintain strategic focus on the ''branded''
 markets, improvement in the product mix, capitalizing product level
 opportunities for which regulatory approvals have been received,
 product rationalization, greater marketing synergies and cost-effciency
 throughout the organization.
 
 DiViDEND
 
 In view of the loss in the standalone accounts, no dividend has been
 proposed for the year ended December 31, 2012.
 
 CHANgES iN CAPiTAL STrUCTUrE
 
 Allotment of shares on exercise of Employees'' Stock Options
 
 During the year, the Company allotted Equity Shares (on pari-passu
 basis) pursuant to exercise of Stock Options by the eligible employees,
 as summarized below:
 
 Date of Allotment          No. of Shares
 
 January 13, 2012             31,966
 
 April 17, 2012               80,898
 
 July 11, 2012               152,361
 
 October 11, 2012            208,854
 
 The Allotment Committee of Directors on December 21, 2012, also
 allotted 440,000 Equity Shares of Rs. 5 each for cash at par to Ranbaxy
 ESOP Trust (Trust), set up to administer Ranbaxy Employee Stock Option
 Plan-2011 (ESOP-2011). The Trust would allocate the shares to the
 employees of the Company and of its subsidiaries on exercise of stock
 options from time to time under ESOP- 2011.
 
 SUBSiDiAriES AND JOiNT VENTUrES
 
 In continuation of the pursuit of leveraging and maximizing the
 synergies of the Hybrid Business Model, the Company and Daiichi Sankyo
 Co., Ltd., have decided to integrate the management and operations of
 the subsidiaries in Thailand.
 
 With a view to create sustainable business base in CIS countries, the
 Company incorporated a subsidiary in Ukraine, through Ranbaxy
 (Netherlands) B.V., a wholly owned subsidiary of the Company. Further,
 for competing better in German market, another subsidiary in Germany
 was set up through Basics GmbH, a wholly owned subsidiary of the
 Company.
 
 The Hon''ble High Courts of Delhi and Punjab & Haryana have approved the
 scheme of merger of Rexcel Pharmaceuticals Limited, Solus
 Pharmaceuticals Limited, Ranbaxy Drugs and Chemicals Company, Ranbaxy
 Life Sciences Research Limited and Ranbaxy SEZ Limited with Ranbaxy
 Drugs Limited, another wholly owned subsidiary of the Company.
 
 A statement pursuant to Section 212 of the Companies Act, 1956,
 relating to subsidiary companies is attached to the accounts. In terms
 of the general exemption granted by the Ministry of Corporate Affairs
 vide its circular no. 02/2011 dated February 8, 2011, the audited
 accounts and Reports of Board of Directors and Auditors of the
 Company''s subsidiaries have not been annexed to this Annual Report. The
 Company has complied with the requirements as prescribed under the said
 circular. The consolidated fnancial statements prepared in accordance
 with Accounting Standard  21 issued by the Institute of Chartered
 Accountants of India forming part of this Annual Report include the
 fnancial information of the subsidiary companies.
 
 MANAgEMENT DiSCUSSiON AND ANALYSiS rEPOrT
 
 Management Discussion and Analysis Report, as required under the
 Listing Agreements with the Stock Exchanges, is enclosed at Annexure
 ''A''.
 
 EMPLOYEES'' STOCk OPTiON SCHEMES
 
 Information regarding the Employees'' Stock Option Schemes is enclosed
 at Annexure ''B''.
 
 LiSTiNg AT STOCk EXCHANgE
 
 The equity shares of the Company continue to be listed on Bombay Stock
 Exchange Ltd. and The National Stock Exchange of India Ltd. Global
 Depository Shares are listed on the Stock Exchange at Luxembourg. The
 annual listing fees for the year 20122013 have been paid to these
 Exchanges.
 
 DiSCLOSUrE OF PArTiCULArS
 
 As required by the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988, the relevant information and data
 is given at Annexure ''C''.
 
 FiXED DEPOSiTS
 
 The Company has not invited / received any fxed deposits during the
 year.
 
 DirECTOrS'' rESPONSiBiLiTY STATEMENT
 
 In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
 (Act), your Directors confrm that:
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed, alongwith proper explanation
 relating to material departures, wherever applicable.
 
 (ii) The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company, as at the end of the accounting year and of the loss of
 the Company for the year.
 
 (iii) The Directors have taken proper and suffcient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 (iv) The Directors have prepared the annual accounts on a going concern
 basis.
 
 DirECTOrS
 
 The Board of Directors of the Company appointed Dr. Kazunori Hirokawa
 as an Additional Director of the Company pursuant to Section 260 of the
 Companies Act, 1956 and Articles of Association of the Company
 effective May 9, 2012 and holds offce upto the date of this Annual
 General Meeting. The Company has received Notice along with requisite
 deposit of Rs. 500 from a member under Section 257 of the Companies
 Act, 1956 proposing the candidature of Dr. Kazunori Hirokawa as a
 Director of the Company.
 
 In accordance with the Articles of Association of the Company, Dr.
 Tsutomu Une and Mr. Rajesh V Shah, Directors, retire by rotation at the
 ensuing Annual General Meeting and being eligible offer themselves for
 re-appointment.
 
 COrPOrATE gOVErNANCE
 
 Report on Corporate Governance alongwith the Certifcate of the
 Auditors, M/s. B S R & Co. confrming compliance of conditions of
 Corporate Governance as stipulated under Clause 49 of the Listing
 Agreement with the stock exchanges forms part of the Annual Report.
 
 COST AUDiT
 
 The Board of Directors of the Company appointed M/s. RJ. Goel & Co.,
 Cost Accountants, as the Cost Auditor of the Company for the year ended
 December 31, 2012. The Audit report of the cost accounts of the Company
 for the year ended December 31, 2012, will be submitted to the Central
 Government in due course.
 
 In terms of the circulars issued by Ministry of Corporate Affairs, the
 last date for fling the Cost Audit Report for the year ended December
 31, 2011, with the Central Government was February 28, 2013. The Report
 was fled on December 31, 2012.
 
 AUDiTOrS
 
 M/s. B S R & Co., Chartered Accountants, retire as Auditors of the
 Company at the conclusion of ensuing Annual General Meeting and have
 confrmed their eligibility and willingness to accept the offce of the
 Auditors, if reappointed.
 
 AUDiTOrS'' rEPOrT
 
 With regard to comments contained in the Auditors'' Report, explanations
 are given below:
 
 i) The accumulated losses of the Company at the end of the year are not
 less than ffty percent of its net worth.
 
 The accumulated losses are primarily due to provision of Rs. 26,480
 million created by the Company in the year ended December 31, 2011 for
 settlement with the DOJ for resolution of potential civil and criminal
 allegations by the DOJ.  (Note 8 of the Financial Statements)
 
 ii) Short term funds used for long term purposes.
 
 The Company had made a provision of Rs. 26,480 million in the previous
 accounting year for settlement with the DOJ (Note 8 of the Financial
 Statements). This has resulted into long-term funds being lower by Rs.
 5,558.22 million compared to long-term assets as at December 31, 2012.
 Accordingly, short-term funds of Rs. 5,558.22 million have been used
 for long-term purposes which is temporary in nature.
 
 STATEMENT OF EMPLOYEES
 
 Statement of particulars of employees as required under Section 217(2A)
 of the Companies Act, 1956 (Act) and Rules framed thereunder forms
 part of this Report. However, in terms of the provisions of Section
 219(1) (b) (iv) of the Act, this Report and Accounts are being sent to
 all the shareholders excluding the Statement of particulars of
 employees under Section 217(2A) of the Act. Any shareholder interested
 in obtaining a copy of the statement may write to the Company Secretary
 at the Corporate Offce of the Company.
 
 ACkNOWLEDgEMENTS
 
 The Directors hereby wish to place on record their appreciation of the
 signifcant contribution made by each and every employee of the Company.
 The Directors also thank all other stakeholders for their support and
 encouragement. Your Directors look forward to your continued support in
 the years to come.
 
                               On behalf of the Board of Directors
 
 Gurgaon                             Dr. Tsutomu Une
 
 February 26, 2013                       Chairman
Source : Dion Global Solutions Limited
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