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Directors Report of Ahlcon Parenterals (India) Ltd. Company
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Directors Report of Ahlcon Parenterals (India) Ltd.

Mar 31, 2015

To the Members,

The Directors have pleasure in presenting the 23rd Annual Report on the business and operations of the Company for the financial year ended 31st March 2015.

FINANCIAL RESULTS (Rs. in lacs)

FOR THE YEAR ENDED 31.03.2015 31.03.2014 CURRENT YEAR PREVIOUS YEAR

Sales (including excise) and other 12966.48 13358.71 Income

Gross operating Profit 2731.39 3451.84

Financial Charges 62.81 158.33

Cash Profit 2668.58 3293.51

Deprecation 460.76 344.09

Provision for doubtful debts/ 147.91 (42.95) obsolete Stock

Provision for doubtful debts written 28.94 (16.17) back

Prior period Adjustments - 2.22

Profit before Tax 2088.85 3006.32

Provision for Deferred Tax (100.26) 89.82

Provision for Current Tax 487.48 1008.39

Income Tax Paid for earlier years - (42.31)

Profit after Tax 1701.64 1950.41

Balance brought forward from 5768.96 3913.17 previous year

Depreciation Adjustment 73.88 -

Profit available for appropriation 7396.73 5863.58

Final Dividend on - 3.95 Preference Shares

Tax on Dividend on - 0.67 Preference Shares

Profits transferred to General - 90.00 Reserve

Profit carried forward 7396.73 5768.96

OPERATIONAL PERFORMANCE

Your Directors present the Operational performance of the company, which in the company has achieved a sales turnover ofRs. 11598 lacs (net of excise) as compared to the previous year sales turnover ofRs. 11996 lacs (net of excise) leading to a decline in sales by 3.31% due to the unrest in some of the export market and non award of government tenders.

The company's Net Profit during the year recorded Rs. 1701.64 lacs as compare to previous year figure ofRs. 1950.4 lacs, hereby a leading to a decline of profit toRs.248.7 lacs .

Directors are putting constant thrust on productivity enhancement, cost optimization and customer satisfaction by producing their quality products enabling continues growth track, in the operational results of the company.

SHARE CAPITAL

The paid up equity share capital as at 31st March, 2015 is Rs. 72,001,500/-. During the year under review, your Company has not issued any shares with differential rights, sweat equity shares and equity shares under employees stock option scheme.

Your Company has not bought back its own shares during the year under review.

TRANSFER TO RESERVES

No amount was transfer to the reserves during the year under review.

DIVIDEND

While approving the Final Accounts Statements for the year ended on 31st March 2015, the Board has not recommended any dividend on the Equity shares.

This is keeping in view of the company's need for upgradation of existing facilities and the expansion with intent to finance such plans through internal accruals to the maximum. Your directors certainly believe that this would increase shareholder value and eventually lead to a higher return threshold.

EARNING PER SHARE

EPS (Earning Per Share) is Rs. 23.63, as compared to the previous year's figure of Rs. 27.02 hereby a leading to a decline of 12.54 % as compare to the previous year.

MATERIAL CHANGES DURING THE FINANCIAL YEAR TO WHICH THE BALANCE-SHEET RELATES:

FINAL DELISTING APPROVAL OF ALL STOCK EXCHANGES

It was informed to the Board that The Offer ("Offer") to voluntarily delist the shares of Ahlcon Parenterals (India) Limited ("Company") by B. Braun Singapore Pte Ltd ("Acquirer"/promoter company) pursuant to the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 as amended from time to time ("Regulations") was filed before BSE, CSE, JSE and DSE.

The Company had thereafter applied for the delisting of its Shares from the Bombay Stock Exchange ("BSE") on 28.01.2014, Calcutta Stock Exchange ("CSE") on 28.01.2014, Delhi Stock Exchange ("DSE") on 30.01.2014 and the Jaipur Stock Exchange ("JSE") on 24.01.2014 (collectively referred to as the "Stock Exchanges"), where the Shares of the Company were listed.

BSE vide its notice no. DCS/DL/RK/RBBSFL/841/2014-15 dated January 16, 2015 informed their members about discontinuation of trading of the Shares of the Company with effect from January 22, 2015 and the delisting of Shares with effect from January 30th, 2015.

CSE, vide its notice dated February 9, 2015, informed their members about the delisting of Shares from CSE with effect from February 10th, 2015.

SEBI, vide its order no. WTM/PS /45/MRD/DSA/NOV/2014 dated November 19, 2014, withdrew the recognition granted to DSE.

JSE, vide its notice no. JSEL/2015/151 dated March 12, 2015 informed their members about the delisting of Shares from JSE with effect from March 25th, 2015.

For the purpose of date of delisting as mentioned in Regulation 21 of SEBI Regulations, SEBI, via its letter no. CFD / DCR1 / SG / OW / 3119 / 2015 dated February 3, 2015 directed the acquirer to consider the date of delisting as the date on which Shares are delisted from all the stock exchanges recognised by SEBI.

Accordingly, the date of delisting has been taken as March 25th, 2015, being the later of the date of delisting as intimated by BSE, CSE, DSE and JSE.

EXIT OFFER TO THE PUBLIC SHAREHOLDERS OF THE COMPANY BY B BRAUN SINGAPORE PTE LTD (ACQUIRER / PROMOTER).

The Company Secretary informed to the Board that in accordance with regulation 21 of the SEBI Regulations, the acquirer hereby provides an exit opportunity ("Exit Offer") to the remaining public shareholders holding shares in the company ("Residual Shareholders"). The residual Shareholders of the company can tender their shares to the acquirer - M/s B. BRAUN SINGAPORE PTE LTD at the Final Price of Rs. 525/- (Rupees Five Hundred and Twenty Five only) per share at any time from March 25th, 2015 ("Offer Opening Date") till March 24th, 2016 ("offer closing date") (such period being the "Exit Period"), as per the terms and conditions set out in this Exit Offer Letter. The details of Exit offer letter uploaded in the website of the company and also available with the RTA.

EXPANSION / PRODUCT DEVELOPMENT

During the year under review, the Company has completed the expansion project by addition of capacity of 42 million through installation of Rommelag FFS Technology - High capacity Machines, with a mission to achieve value added products in its products portfolio to meet the incremental demand of local and international markets, at its existing Bhiwadi plant in Rajasthan, the total cost of the project is Rs. 23680/- Lacs, met through debts/internal accruals.

RESEARCH & DEVELOPMENT

The company has R & D division at Bhiwadi, duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR).

The Company's in house R & D Division is having a dedicated team of highly qualified, skilled scientists engaged in developing the formulations and products for its strategic portfolio management. R & D is also well on its way to realize the potential by innovating with various drug delivery technologies. The company is in the process of research to development of new formulations and registrations of products. The details of R & D are as per Form-B, forming part to the Annexure to the Director's Report.

EXPORTS

Your directors are putting constant efforts for increasing the export sales component on the total turnover to mitigate the risk posed by various domestic markets and factors, which are resulting into price discrimination, cut throat competition, entry of new entities in the market, government price regulatory mechanism.

Taking advantage of the increased demand of Indian pharmaceutical products, in the international market, the company has carried on registration and arrangement with several international agencies for increasing the base of export markets. Further plans are underway to increase the direct and indirect exports to various countries. As a result of this, during the year under review, the export sales were Rs. 3776.64 lacs as compared to the previous year's figure of Rs. 3538.15 lacs achieving a growth of 6.74 % approx.

As informed in our previous reports, to further expand the company's export activities, your company is in the process of registration of its new product dossiers, in both the regulated as well as unregulated markets and the registration formalities with number of countries are well in progress. We have obtained orders from some parties and as some countries registration process is in the pipe line and hence soon after these registration certificates are obtained, company shall be able to grab the export earnings by exporting to those countries.

BANKERS:

We are banking with the Mizuho Bank Ltd and Deutsche Bank which has been providing financial assistance to our company for various purposes and for which we express our hearty commends.

DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013.

In accordance with the provisions of the Companies Act, 1956, and Articles of Association of the company, Mr. Arun Mudgal, Managing Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.

Necessary resolutions seeking the approval of the shareholders for the aforesaid appointment & reappointment of directors, form part of the notice, convening the Annual General Meeting.

NUMBER OF MEETINGS OF THE BOARD

Five Board meetings of the Company were held during the year on the following dates:

I. 13-05-2014, II. 12-06-2014, III.12.08.2014 IV. 13.11..2014, V. 13-02-2015

AUDIT COMMITTEE

The Chairman informed to the Board that it is required to reconstitute a Audit Committee in accordance with Sec 177 of the Company's Act 2013.

The Board reconstituted the committee with the following members:

NAME OF THE DESIGNATION NATURE OF DIRECTOR DIRECTORSHIP

Mr. Arun Kumar Gupta Chairman Independent Director

Dr. S. C.L. Gupta Member Independent Director

Dr. S. S. Arora Member Independent Director

Mr. Anand Apte Member Non Executive Director

Mr. Arun Mudgal Member Executive Director

Statutory Auditors and the Internal Auditors of the Company were also invited to attend the Audit Committee meetings along with the Incharge of Finance (CFO) and Company Secretary. Asper the need, other key functionaries of the company were also invited to attend the meetings.

Under sec 177(4) : Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,-

(i) The recommendation for appointment, remuneration and terms of appointment of auditors of the company;

(ii) Review and monitor the auditor's independence and performance, and effectiveness of audit process;

(iii) Examination of the financial statement and the auditors' report thereon;

(iv) Approval or any subsequent modification of transactions of the company with related parties;

(v) Scrutiny of inter-corporate loans and investments;

(vi) Valuation of undertakings or assets of the company, wherever it is necessary;

(vii) Evaluation of internal financial controls and risk management systems;

(viii) Monitoring the end use of funds raised through public offers and related matters.

The Audit Committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company.

The Audit Committee shall have authority to investigate into any matter in relation to the items specified in sub-section (4) or referred to it by the Board and for this purpose shall have power to obtain professional advice from external sources and have full access to information contained in the records of the company.

The auditors of a company and the key managerial personnel shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor's report but shall not have the right to vote.

The Board's report under sub-section (3) of section 134 shall disclose the composition of an Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons therefor.

The committee meets from time to time with the terms of reference specified in writing by the Board which shall, inter alia, include other activates as specified under sec 177(4) of the Companies Act 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134 of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that;

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. 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 profit of the company for the year under review.

3. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions under the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. The directors had prepared the annual accounts for the financial year ended 31st March, 2015 on a going concern basis; and

5. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149;

Every independent director have shall give disclosure at their first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his status as an independent director, give a declaration that he meets the criteria of independence.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013.

THE EXTRACT OF THE ANNUAL RETURN AS PROVIDED UNDER SUB-SECTION (3) OF SECTION 92;

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2015 made under provisions of Section 92 (3) of the Act is attached as "Annexure I " which forms part of this Report.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178;

The Nomination and Remuneration Committee shall, while formulating the policy under sub-section (3) confirmed that -

(a) In the Company, the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:

The Board has set up a Nomination &Remuneration Committee to formulize company's policy on remuneration packages of the executive directors and determine the same from time to time.

The Committee has been reconstituted by the board and the composition and other details of the Nomination and Remuneration Committee are as follows:

Details of remuneration paid to Executive Director, for the year 2014-15 :

(In Rs.)

Basic Salary 1,808,736

HRA 9,04,368

Perquisites 1,72,501

Performance Incentives 1,059,888

Other 2,244,504

Total Remuneration 6,189,997

Other terms, if any.

The Payment of remuneration as per the Managing director Agreement 1.10.2012 and as per limit provided under section 197 and schedule V of the Companies Act 2013.

Statement of sitting fees paid to Non-Executive Director for the year 2014-15 and their shareholding position as on 31.03.2015.

NON EXECUTIVE SITTING SHARE HOLDING DIRECTOR REES Rs.

Mr. Anand NIL NIL Chandrashekhar Apte

Mr Manfred NIL NIL Gregor Mahrle

Mr. Arun Kumar Gupta 110,000 NIL

Dr. S. S. Arora 100,000 NIL

Dr. S. C. L. Gupta 1,10,000 NIL

The above figures are inclusive of fees paid for the attendance of the Committee meetings excluding service tax.

The committee meet from time to time for formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

The board confirm to the shareholders that there is no qualification, reservation or adverse remark or disclaimer by the auditors in his report;

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186;

The company disclosed that sec 186 not applicable to the company and the company shall not give any loans, made any investment or provide any security to any other company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188

All Related Party Transactions that were entered into during the financial year were on arm's length and were in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee and Board of Directors for their approval. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained therein.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions.

The Company in the ordinary course of its business, enters into transactions relating to purchase, transfer or receipt of products, goods, active pharmaceutical ingredients, materials, services, other obligations from B. Braun group companies, who is a 'Related Party' within the meaning Section 2 (76) of the Act.

DEPOSITS

The Company has not accepted any deposit under section 73 of the Companies Act, 2013

RISK MANAGEMENT

This Risk Management Policy is a formal acknowledgement of the commitment of the company to risk management. The aim of the policy is not to have risk eliminated completely from Companies activities, but rather to ensure that every effort is made by the company to manage risk appropriately to maximise potential opportunities and minimise the adverse effects of risk.

POLICY OBJECTIVES

To confirm and communicate the company's commitment to risk management to assist in achieving its strategic and operational goals and objectives.

To formalize and communicate a consistent approach to managing risk for all departmental activities and to establish a reporting protocol.

To ensure that all significant risks to the company are identified, assessed and where necessary treated and reported to the committee.

To assign accountability to all staff for the management of risks within their areas of control.

To provide a commitment to staff that risk management is a core management capability.

SCOPE OF THE POLICY

Risk is an inherent aspect of all Company's, administrative and commercial business activities. Sound risk management principles must become part of routine management activity across the company. The key objective of this policy is to ensure the company has a consistent basis for measuring, controlling, monitoring and reporting risk across the company at all levels.

CORPORATE SOCIAL RESPONSIBILITY

The Company has actively supported various initiatives in the areas of health, education and environment over the years. With the introduction of Section 135 of the Act, which will came into effect during this financial year, the Company has already constituted a Corporate Social Responsibility ("CSR") Committee. The CSR Policy adopted by the Board of Directors is available on the Company's website. The CSR Committee will decide to implement the programmes as per the CSR project report and increase focus on health and education in the years ahead.

In addition to the above company plans to implement our CSR Project through NGOs as approved by our CSR committee in rural health near by our Factory and offices. The details of Project, and its application in CSR will be placed in the next Directors Report.

Pursuant to Section 135 of the Companies Act, 2013 and rule made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The Committee has adopted a Corporate Social Responsibility Policy. As per Section 135(5) of the Act, the Company needs to ensure at least 2% of the average net profit of preceding three financial years is spent on CSR activities as mentioned in CSR Policy. The average result of preceding three financial years (2011-12, 2012-13 and 2013-14) was Rs. 189,367,581/- and the CSR obligations was Rs.3751981/- (P.Y. Rs. Nil).

However the Company has not spent any amount on CSR during the current year.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company did not receive any complain during the year 2014-15.

CORPORATE GOVERNANCE

Since the company delisted from all stock exchanges w.e.f 25th March, 2015, there is no need of disclosure under clause 49 of the listing agreement.

But, the best corporate governance practices have been adopted by Ahlcon Parenterals (India) Ltd and the same is being continuously reviewed to ensure that they adhere to the latest corporate developments and conform to the best corporate governance ethics.

STATE OF COMPANY'S AFFAIRS

A brief state of company's affairs as given below aims to be helpful to the Shareholders of the company and provide them with an in-depth Analysis of the business prospects.

Ahlcon Parenterals (India) Limited is one of the leading manufacturing Company in the Indian Pharmaceutical Industry. The Company's revenues are mainly from Contract Manufacturing, Institutional sales and ethical sale of branded-generic and unbranded-generic manufactured pharmaceutical products. A further break down of pharmaceutical sales can be done as, Domestic formulations (comprising branded pharmaceuticals formulations sold in the domestic market), Contract manufacturing (comprising sourcing, manufacturing and supplying pharmaceutical formulations to giant pharma company under their brand name) and direct export to International market comprising exports of branded and generic manufactured pharmaceutical formulations. The operating costs primarily comprise raw and packing materials, purchase of finished goods, staff cost, selling and marketing expenses, manufacturing, Research & Development expenses and general overheads.

AUDITOR'S REPORT

The remarks referred to in the Auditors Report are self explanatory except on the observation of disputed tax /other demand mentioned at point no. vii (c) of the Annexure to their report, the company has already preferred appeals before the appellate authorities against the said demand of the respective departments. Company has strong grounds to believe that the appellate authorities shall pass orders in favour of the company.

AUDITORS

M/s Arun. K. Gupta & Associates, Chartered Accountants, Statutory Auditors of the company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment as Statutory Auditors for the financial year 2015-2016. M/s Arun. K. Gupta & Associates, Chartered Accountants, have signified their consent, in writing, for such appointment along with a certificate stating that their appointment, if made, shall be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.

COST AUDITORS

The Board of Directors reappointed M/s Kabra and Associates, Cost Accountant, New Delhi, holding valid certificate of practice no.000075 as the Cost Auditor for conducting the Cost Audit for the financial year 2015-16 with a remuneration of Rs. 50,000/- settled mutually. The Audit Committee of the company recommended for their reappointment in accordance with Companies (Audit and Auditors) Rules, 2014, and relevant notification issued by the Ministry of Corporate Affairs.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS / OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, in the annexure forming part of this report .

PARTICULARS OF EMPLOYEES

During the year under review, one employee was in receipt of remuneration exceeding the specified limits. Hence, disclosure under section 134 of the Companies Act, 2013 read with companies (Appointment and remuneration) Rules 2014, is annexure forming part of this report.

INDUSTRIAL RELATION

The Company continued to maintain very healthy, cordial and harmonious industrial relations at all levels and your Directors wish to place on record their appreciation for the contributions made by the employees at all levels and take this opportunity to thank all employees for their hard work, dedication and commitment.

ACKNOWLEDGMENTS:

Your Directors take this opportunity to offer their sincere thanks to various departments of the Central and State Governments, Banks and Investors for their unstinted support, assistance and valuable guidance. Last but not the least, the directors wish to place on record their deep sense of appreciation for the devoted service of the Executives, Staff and workers of the company at all levels.

For and on behalf of the Board of Directors

Anand Chandrashekhar Apte

Place: New Delhi Chairman

Date: 03.09.2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 22nd Annual Report on the business and operations of the Company for the financial year ended 31st March 2014.

FINANCIAL RESULTS

(Rs. in lacs)

FOR THE YEAR ENDED 31.03.2014 31.03.2013 CURRENT YEAR PREVIOUS YEAR

Sales (including excise) and other 13358.71 11910.60 Income

Gross operating Profit 3484.19 2600.41

Financial Charges 158.33 295.37

Cash Profit 3325.86 2305.05 Deprecation 344.09 360.51

Provision for doubtful debts/ (42.95) 72.18 obsolete Stock

Provision for doubtful debts 16.17 03.49 written back

Prior period Adjustments 2.22 -

Profit before Tax 3006.32 1868.86

Provision for Deferred Tax 89.82 (56.36)

Provision for Current Tax 1008.39 633.82

Income Tax Paid for earlier years (42.31) 4.44

Profit after Tax 1950.41 1286.96

Balance brought forward from 3913.17 2632.41 previous year

Profit available for appropriation 5863.58 3919.38

Proposed Final Dividend on 3.95 5.40 Preference Shares

Tax on Dividend on Preference Shares 0.67 0.81

Profits transferred to General 90.00 -

Reserve

Profit carried forward 5768.96 3913.17

OPERATIONAL PERFORMANCE

Your Directors feels highly satisfied about Operational performance of the company as it has continued to surpass all its previous records since inception and has achieved a sales turnover of Rs. 11996 lacs as compared to the previous year sales turnover of Rs. 10770 lacs thereby registered a growth of 11.38%. The company''s Net Profit has recorded a substantial growth of 51.55% by scaling up from the previous year figure of Rs. 1286.96 lacs to Rs. 1950.41 lacs.

Directors are putting constant thrust on productivity enhancement, cost optimization and customer satisfaction by producing their quality products enabling continues growth track, in the operational results of the company.

DIVIDEND

While approving the Final Accounts Statements for the year ended on 31st March 2014, the Board has not recommended any dividend on the Equity shares and has approved for payment of due dividend only on the 6% Cumulative, Redeemable Preference Shares amounting to Rs. 3,94882/- ( excluding tax on dividend) for the year 2013-14.

This is keeping in view of the Company''s need for upgradation of existing facilities, its growth plans and the intent to finance such plans through internal accruals to the maximum. Your directors certainly believe that this would increase shareholder value and eventually lead to a higher return threshold.

EARNING PER SHARE

EPS (Earning Per Share) is Rs. 27.02, as compared to the previous year''s figure of Rs. 17.79, a growth of51.88% as compared to the previous year.

REDEMPTION OF PREFERENCE SHARES OF RS. 90 LACS

During the year ended March, 2014, Preference Shares of Rs. 90 lacs were redeemed, out of the profits of the company. Further the Company has paid preference dividend of Rs. 3,94,882/- (Exclusive of tax) during the year ended 31st March, 2014.

MATERIAL CHANGES DURING THE FINANCIAL YEAR TO WHICH THE BALANCE-SHEET RELATES:

SHAREHOLDERS APPROVED THE VOLUNTARY DELISTING OF THE EQUITY SHARES FROM ALL STOCK EXCHANGES

The Chairman stated that pursuant to Section 192A of the Companies Act, 1956 read with Companies (Passing of Resolution by Postal ballot) Rules, 2011, dispatch of postal ballot notice dated 26 Day of December, 2013 to the shareholders of the Company was completed on 4th January, 2014 for the purpose of obtaining the consent of the shareholders of the Company by way of Special Resolution for:"Voluntary Delisting of the Equity Shares from the Bombay Stock Exchange Limited ("BSE"), Delhi Stock Exchange Limited ("DSE"), the Calcutta Stock Exchange Limited ("CSE"), and Jaipur Stock Exchange Limited ("JSE") where the equity shares of the Company are listed pursuant to delisting offer by the promoters of the Company in accordance with the Securities and exchange Board of India (Delisting of Equity Shares)."The last date for receipt of postal ballot forms, duly completed by the shareholders in the self addressed, postage prepaid envelope was the closing of working hours i.e. 5.00 pm on 6th February, 2014.The Company had appointed the Scrutinizer for conducting the postal ballot in a fair and transparent manner. The Chairman read from the Scrutinzer''s report dated 10th February 2014 and informed the Board that the Scrutinizer, has carried out the scrutiny of all the postal ballot forms received up to the close of working hours on 6th February, 2014. The Chairman read the results of the postal ballot as per the Scrutinzer''s report and placed the Scrutinzer''s report dated 10th February 2014 before the Board.

The Chairman announced that the Special Resolution as contained in the Postal Ballot Notice dated 26th day of December, 2013 has been duly passed by the requisite majority under the Companies Act, 1956.

The company has obtained the In Principle approval for Voluntary Delisting of the Equity Shares from all Stock Exchanges.

EXPANSION / PRODUCT DEVELOPMENT

During the year under review, the Company has initiated program for expansion of capacities by addition of Rommelag FFS Technology - High capacity Machines, with a mission to achieve and further addition of value added products in its products portfolio to meet the incremental demand of local and international markets, at its existing Bhiwadi plant in Rajasthan, the estimated cost of which is approximately Rs. 190 Crores, to be met through debts / internal accruals, and is expected to commence commercial production in quarter ended December 2014.

RESEARCH & DEVELOPMENT

The Company has R & D Division at Bhiwadi, duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR).

The Company''s in house R & D Division is having a dedicated team of highly qualified, skilled scientists engaged in developing the formulations and products for its strategic portfolio management. R & D is also well on its way to realize the potential by innovating with various drug delivery technologies. The company is in the process of research to development of new formulations and registrations of products. The details of R & D is as per Form -B, forming part to the Annexure to the Director''s Report.

In respect of weighted tax benefit under the R & D expenditure, the company has obtained the certificate from the prescribed authority under sec 35 (2AB) of the Income tax Act, 1961.

EXPORTS

Your directors are putting constant efforts for increasing the export sales component on the total turnover to mitigate the risk posed by various domestic markets and factors, which are resulting into price discrimination, cut throat competition, entry of new entities in the market, government price regulatory mechanism.

Taking advantage of the increased demand of Indian pharmaceutical products, in the international market, the company has carried on registration and arrangement with several international agencies for increasing the base of export markets. Further plans are underway to increase the direct and indirect exports to various countries. As a result of this, during the year under review, the export sales were Rs. 3538.15 lacs as compared to the previous year''s figure of Rs. 2616.98 achieving a growth of 35.20% approx.

As informed in our previous reports, to further expand the company''s export activities, your company is in the process of registration of its new product dossiers, in both the regulated as well as unregulated markets and the registration formalities with number of countries are well in progress. We have obtained orders from some parties and as some countries registration process is in under the pipe line and hence soon after these registration certificates are obtained, company shall be able to grab the export earnings by exporting to those countries.

BANKERS:

We are banking with the Deutsche Bank, Punjab & Sind Bank, Mizuho Bank Ltd which has been providing financial assistance to our company for various purposes and for which we express our hearty commends.

DIRECTORS:

In order to align the term of existing Independent Directors with the provisions of the Companies Act, 2013, the Board of Directors in their meeting held on 13th May, 2014 has proposed the appointment of Mr Arun Kumar Gupta, Dr. S.S. Arora and Dr. S.C. L. Gupta, as Independent Directors of the Company for a term of 5 consecutive years with effect from the date of ensuing Annual General Meeting till 31st March 2019, subject to the approval of the members.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchange.

In accordance with the provisions of the Companies Act, 1956, and Articles of Association of the company, Mr. Anand Chandrashekhar Apte, of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Necessary resolutions seeking the approval of the shareholders for the aforesaid appointment & reappointment of directors, form part of the notice, convening the Annual General Meeting. The details of the directors, seeking appointment/ reappointment is provided under the "Report on Corporate Governance" forming part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That the applicable accounting standards have been followed along with proper explanation relating to material departures in the preparation of annual accounts;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care 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) That the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled "Report on Corporate Governance" has been annexed to this Annual Report.

AUDITOR''S REPORT:

The remarks referred to in the Auditors Report are self explanatory except on the observation of disputed tax / other demand mentioned at point no. 9 (ii) of the Annexure to their report, the company has already preferred appeals before the appellate authorities against the said demand of the respective departments. Company has strong grounds to believe that the appellate authorities shall pass orders in favour of the company.

AUDITORS:

M/s Arun. K. Gupta & Associates, Chartered Accountants, Statutory Auditors of the company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment as Statutory Auditors for the financial year 2014-2015.M/s Arun. K. Gupta & Associates, Chartered Accountants, have signified their consent, in writing, for such appointment along with a certificate stating that their appointment, if made, shall be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.

COST AUDITORS:

The Board of Directors reappointed M/s Kabra and Associates, Cost Accountant, New Delhi, holding valid certificate of practice no.000075 as the Cost Auditor for conducting the Cost Audit for the financial year 2014-15 with a remuneration of Rs. 50,000/- settled mutually. The Audit Committee of the company recommended for their reappointment in accordance with Cost Audit Rules 2011 and relevant notification issued by the Ministry of Corporate Affairs.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS / OUTGO:

The information pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is furnished in the Annexure forming part of this report.

PARTICULARS OF EMPLOYEES:

During the year under review, no employee was in receipt of remuneration exceeding the specified limits. Hence, no disclosure under section 217(2-A) of the Companies Act, 1956, is required to be made.

INDUSTRIAL RELATION:

The Company continued to maintain very healthy, cordial and harmonious industrial relations at all levels and your Directors wish to place on record their appreciation for the contributions made by the employees at all levels and take this opportunity to thank all employees for their hard work, dedication and commitment.

ACKNOWLEDGMENTS:

Your Directors take this opportunity to offer their sincere thanks to various departments of the Central and State Governments, Banks and Investors for their unstinted support, assistance and valuable guidance. Last but not the least, the directors wish to place on record their deep sense of appreciation for the devoted service of the Executives, Staff and workers of the company at all levels.

For and on behalf of the Board of Directors Anand Chandrashekhar Apte

Chairman DIN: 01677401

Place: New Delhi Date: 12.08.2014


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the 21st Annual Report on the business and operations of the Company for the financial year ended 31st March 2013.

FINANCIAL RESULTS

(Rs.in lacs)

FOR THE YEAR ENDED 31.03.2013 31.03.2012 CURRENT YEAR PREVIOUS YEAR

Sales (including excise) and other 11910.60 8707.78

Income

Gross operating Profit 2594.30 1454.22

Financial Charges 295.37 369.91

Cash Profit 2298.93 1084.31

Deprecation 360.51 339.60

Provision for doubtful debts/ 104.04 85.03 obsolete Stock

Provision for doubtful debts (31.89) (45.94) written back

Prior period Adjustments (2.59) (17.82)

Profit before Tax 1868.86 723.44

Provision for Deferred Tax (56.36) 5.34

Provision for Current Tax 633.82 216.58

MAT Credit Entitlement (5.85)

Income Tax Paid for earlier years 4.44 7.43

Profit after Tax 1286.96 499.93

Balance brought forward from 2632.41 2282.44 previous year

Profit available for appropriation 3919.38 2782.37

Proposed Final Dividend on 5.40 1.35 Preference Shares

Interim Dividend on Preference 4.05 Shares

Tax on Interim Dividend on 0.66 Preference Shares

Tax on Proposed Dividend on 0.81 0.22 Preference Shares

Interim Dividend on Equity 72.00 Shares

Tax on Interim Dividend on 11.68 Equity Shares

Profits transferred to General 60.00 Reserve

Profit carried forward 3913.17 2632.41

OPERATIONAL PERFORMANCE

Your Directors feels highly satisfied about Operational Performance of the company as it has continued to surpass all its previous records since inception and has achieved a sales turnover of Rs.10770 lacs as compared to the previous year sales turnover of Rs. 7970 lacs thereby registering a growth of 35%. The Company''s Net Profit has recorded substantial growth of 157.42% by scaling up from the previous year figure of Rs. 499.93 lacs to Rs. 1286.96 lacs.

Directors are putting constant thrust on productivity, enhancement, cost optimization and customer satisfaction by producing their quality products enabling continuous growth track, in the Operational results of the Company

DIVIDEND

While approving the Final Accounts Statements for the year ended on 31st March 2013, the Board has not recommended any dividend on the Equity shares and has approved for payment of due dividend only on the 6% Cumulative, Redeemable Preference Shares amounting to Rs. 5,40,000/– (excluding tax on dividend) for the year 2012–13.

This is keeping in view of the Company''s need for upgradation of existing facilities, its growth plans and the intent to finance such plans through internal accruals to the maximum. Your directors certainly believe that this would increase shareholder value and eventually lead to a higher return threshold.

EARNING PER SHARE

EPS (Earning Per Share) is Rs. 17.79, as compared to the previous year''s figure of Rs. 6.94, growth of 156.34% as compared to the previous year.

MATERIAL CHANGES IN THE COMPANY DURING THE FINANCIAL YEAR TO WHICH THE BALANCE–SHEET RELATES:

NOTING OF CHANGE IN CONTROL OF THE COMPANY FROM THE ERSTWHILE PROMOTERS TO B. BRAUN SINGAPORE PTE. LIMITED

The open offer made by the acquirer company M/s B Braun Singapore PTE Ltd had been completed in accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The acquirer company, acquired 54,00,112 equity shares of Rs. 10 each aggregating to 75% of the paid up equity share capital of the Company out of which 15,80,811 equity shares of Rs. 10 each aggregating to 21.96% of the paid up equity share capital of the Company have been transferred from public shareholders and 38,19,301 equity shares of Rs. 10 each aggregating to 53.04% of the paid up equity share capital of the Company have been transferred from Mr. Bikramjit Ahluwalia and persons acting in concert with him to B. Braun Singapore PTE. Limited under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and recorded the relevant Forms FC–TRS in accordance with the applicable provisions under Foreign Exchange Management Act, 1999 and other applicable laws.

The Board of Directors at its meeting held on 28.09.2012 took on record the transfer of equity shares of 75% from the erstwhile promoters and

public shareholders to B. Braun Singapore PTE. Limited and effected the change of control and management of the company. B Braun Singapore PTE. Limited nominated directors to the Board of directors of the Company with immediate effect.

EXPANSION / PRODUCT DEVELOPMENT

The Company has envisaged enhancing its existing production capacity by addition of Rommelag FFS Technology – High capacity Machines, with a mission to achieve and further addition of value added products in its products portfolio to meet the incremental demand of local and international markets.

RESEARCH & DEVELOPMENT

The Company has Research & Development Division at Bhiwadi, duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR).

The Company''s in house R & D Division is having a dedicated team of highly qualified, skilled scientists engaged in developing the formulations and products for its strategic portfolio management. R & D is also well on its way to realize the potential by innovating with various drug delivery technologies. The company is in the process of research to development of new formulations and registrations of products. The details of R & D is as per Form –B, forming part to the Annexure to the Director''s Report.

In respect of weighted tax benefit under the R & D expenditure, the company has obtained the certificate from the prescribed authority under sec 35(2AB) of the Income tax Act, 1961.

EXPORTS

Your directors are putting constant efforts for increasing the export sales component on the total turnover to mitigate the risk posed by various domestic markets and factors, which are resulting into price discrimination, cut throat competition, entry of new entities in the market, government price regulatory mechanism.

Taking advantage of the increased demand of Indian pharmaceutical products, in the international market, the company has carried on registration and arrangement with several international agencies for increasing the base of export markets. Further plans are underway to increase the direct and indirect exports to various countries. As a result of this, during the year under review, the export sales were 2616 lacs as compared to the previous year''s figure of Rs.1519 lacs , achieving a growth of 72% approx.

As informed in our previous reports, to further expand the company''s export activities, your company is in the process of registration of its new product dossiers, in both the regulated as well as unregulated markets and the registration formalities with number of countries are well in progress. We have obtained orders from some parties and as some countries registration process is in the pipe line and hence soon after these registration certificates are obtained, company shall be able to grab the export earnings by exporting to those countries.

BANKERS

We are banking with the Punjab & Sind Bank, Deutsche Bank which has been providing financial assistance to our company for various purposes and for which we express our hearty commends.

DIRECTORS

Mr Bikramjit Ahluwalia, Chairman, Dr Rohini Ahluwalia, Whole Time Director, Ms Sudershan Walia, director and Mr S K Sachdeva non executive director of the company had resigned from the directorship of the Company with effect from 28th September, 2012. The Board records its sincere appreciation of the valuable contribution and learned advice rendered by Mr Ahluwalia, Dr Rohini Ahluwalia, Ms Walia and Mr Sachdeva during their tenure as a director of the Company.

The Promoter Company M/s B Braun Singapore Pte Ltd nominated Mr Anand Chandrashekhar Apte, Mr Arun Mudgal and Mr Manfred Gregor Mahrle as additional directors to the board of the Company with effect from 28th September, 2012.

Another long time member of the board, Professor G. P. Talwar, Independent Director has tendered his resignation due to personal reason effective from 15.10.2012 and the Board records its sincere appreciation and take on records, the resignation of Professor G P Talwar from the post of an Independent Director.

The present directors have vast experience in the industry & their timely directions/under executions shall provide long term benefits to the company.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company, Dr S C L Gupta and Dr S S Arora Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Necessary resolutions seeking the approval of the shareholders for the aforesaid appointment & reappointment of directors, form part of the notice, convening the Annual General Meeting. The details of the directors, seeking appointment/reappointment is provided under the "Report on Corporate Governance" forming part of this Annual Report.

ELEVATION:

Mr Anand Chandrashekhar Apte, as an additional director, was elected as the Chairman of the board with effect from 28.09.2012. Mr. Apte is a seasoned professional, having a vast experience in this Industry & his guidance and directions are providing enduring benefits to the Company.

Mr Arun Mudgal, as an additional director with effect from 28.09.2012 was elevated with immediate effect as the Managing Director of the company. Mr Mudgal is a seasoned professional having more than 26 years of reach experience in operation of pharmaceutical, healthcare business segment in India and abroad. His expertise is in specific functional areas i.e: Operations Management, Business Managements, Project Managements, etc.

DIRECTORS'' RESPONSIBILITY STATEMENT: Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That the applicable accounting standards have been followed alongwith proper explanation relating to material departures in the preparation of annual accounts;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care 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) That the Directors have prepared the accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled "Report on Corporate Governance" has been annexed to this Annual Report.

AUDITOR''S REPORT:

The remarks referred to in the Auditors Report are self explanatory except on the observation of disputed tax / other demand mentioned at point no. 9 (ii) of the Annexure to their report, the company has already preferred appeals before the appellate authorities against the said demand of the respective departments. Company has strong grounds to believe that the appellate authorities shall pass orders in favour of the company.

AUDITORS: M/s Arun. K. Gupta & Associates, Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. We recommend for their reappointment.

COST AUDITORS: The Board of Directors reappointed M/s Kabra and Associates, Cost Accountant, New Delhi, holding valid certificate of practice no.000075 as the Cost Auditor for conducting the Cost Audit for the financial year 2013–14 with a remuneration of Rs. 50,000/– settled mutually. The Audit Committee of the company recommended for their reappointment in accordance with Cost Audit Rules 2011 and relevant notification issued by the Ministry of Corporate Affairs.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS / OUTGO: The information pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is furnished in the Annexure forming part of this report.

PARTICULARS OF EMPLOYEES:

During the year under review, no employee was in receipt of remuneration exceeding the specified limits. Hence, no disclosure under section 217 (2A) of the Companies Act, 1956, is required to be made.

INDUSTRIAL RELATION:

The Company continued to maintain very healthy, cordial and harmonious industrial relations at all levels and your Directors wish to place on record their appreciation for the contributions made by the employees at all levels and take this opportunity to thank all employees for their hard work, dedication and commitment.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to offer their sincere thanks to various departments of the Central and State Governments, Banks and Investors for their unstinted support, assistance and valuable guidance. Last but not the least, the directors wish to place on record their deep sense of appreciation for the devoted service of the Executives, Staff and workers of the company at all levels. For and on behalf of the Board of Directors

Place: New Delhi Anand Chandrashekhar Apte

Date: 12.08.2013 Chairman


Mar 31, 2011

To the Members,

The Directors have their pleasure in presenting the 19th Annual Report on the business and operations of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS:

(Rs. in Lacs)

FOr The year ended 31.03.2011 31.03.2010

(current year) (previous year)

Sales (including excise) and 6809.70 5527.78 other Income

Gross operating Profit 1200.07 1516.95

Financial Charges 247.09 167.99

Cash Profit 952.98 1348.95

Deprecation 289.32 219.54

Misc. expenditure written off 0 0.43

Provision for doubtful debts/ 30.23 15.93

obsolete Stock

Provision for doubtful debts 16.12 5.78

written back

Prior period Adjustments 1.28 10.70

Profit before Tax 648.28 1108.12

Provision for Deferred Tax 159.70 6.13

Provision for Current & 132.27 382.10

Fringe Benefit Tax

Income Tax Paid for earlier 0 3.79 years

Profit after Tax 429.21 715.87

Balance brought forward 2045.47 1522.27

from previous year

Profit available for 2474.68 2238.14

appropriation

Proposed Dividend on 5.40 5.40

Preference Shares

Tax on Dividend on 0.90 0.92

Preference Shares

Proposed Dividend on Equity 108.00 108.00

Shares

Tax on Dividend on Equity 17.94 18.35

Shares

Profits transferred to General 60.00 60.00

Reserve

Profit carried forward 2282.44 2045.46

OPERATIONAL PERFORMANCE

Your company has planned to face the new challenges and to built up the sales as compared to the previous year. Your Directors have the reasons to be satisfied about the financial & operational performance of the company as it has continued to surpass all its previous records and has achieved a positive sales growth. Our sales turnover increased from Rs. 5063 lakhs in 2009-10 to Rs. 6277 lakhs in 2010-11through the constant efforts put by the directors and employees in internal initiatives on productivity enhancement, cost optimization and a congenial work environment, however the company could achieve Net Profit after tax of Rs.429.21 Lacs as compared to the previous year's figure of Rs.715.87 Lacs, on the back of excess volatility in input prices and mounting governmental pressure to reduce drug prices. Further, your directors are making constant efforts to build up the same in the ensuing and coming years.

dividend

Your board of directors have recommended a final dividend of Rs.1.50 per Equity Share (face value Rs.10 per share) subject to your approval at the ensuing Annual General Meeting scheduled to be held on 30th September 2011 which, if approved at the ensuing AGM will be paid to those members whose names are on the Register of Members of the company and the beneficiaries' list of the Depositories as on the opening hours of 19.09.2011. The company had made payment of Dividend Rs.132.24 lacs (including dividend Tax) to the shareholders for the year ended on 31.03.2010.

The dividend payout for the year under review has been formulated keeping in view the company's need for capital, its growth plans and the intent to finance such plans through internal accruals to the maximum. Your directors believe that this would increase shareholder value and eventually lead to a higher return threshold.

TRANSFER TO RESERVES

Out of the profit available for appropriation, your directors propose to transfer Rs.60 lacs to the general reserve of the company which they consider for building a strong reserve position for future utilization.

EARNING PER SHARE

EPS (Earning Per Share) is Rs.5.87, as compared to the previous year's figure of Rs.9.85.

CORPORATE REVIEW

Contract Manufacturing (CM) has become a promising medium for the Indian pharma industry, with India increasingly being viewed as global hub for Contract Manufacturing. Due to rising concerns over high production costs globally, India has become a prominent destination for the purpose of contract manufacturing of pharma products. Additionally, pharma giants are looking for convenient and faster transportation of products to the target

markets. Besides, sponsor companies are looking to outsource related services, such as product development, packaging, and logistics. Contract manufacturing Industry is expected to grow at a magnificent CAGR of over 45% during 2011-2013. Growth will be much higher than the past years as the impacts of the global recession are wearing off from the market.

Contract manufacturing will also help the pharmaceutical companies to meet with the growing demand for new drugs and improve their core competencies. The report depicts the overall market scenario across the prominent destinations in the developed and developing regions of the country. Apart from the current market scenario in these destinations, the report covers the initiatives, which are being taken up by the State Governments. The report also includes detailed competitive analysis of key players functioning in the Indian contract manufacturing industry. A prudent analysis of the trends and drivers of the market delineates the favourable avenues for the purpose of contract manufacturing.

"Indian Contract Manufacturing - A Hot Opportunity" also covers various issues being faced by the contract manufacturing industry, including IP issues, investment risks, and issues related to quality assurance. These segments are aimed to provide a pragmatic outlook of the contract manufacturing market, thereby allowing the identification of shortcomings of certain avenues in the industry.

Analysis of the ongoing developments, market expectations, and driving factors facilitates clear outlook of every aspect of the industry. Besides current market scenario, forecasting in the report provides a clear picture of the industry's future scenario. The report would help clients in enhancing their understanding regarding the industry and thereby, formulating strategies to help their business grow.

EXPANSION/ PRODUCT DEVELOPMENT

The 5th Explanation Plan with an additional capacity of 13 million Large Volume Parenterals has been successfully commissioned and the commercial production from the same has been started. Your company shall update through the organization the existing formulations, manufacturing process, packing materials and develop new formulations for AHLCON through its own in house R & D Division. The production capacity/ utilization of the company have been scaled up as it plans to stretch its operations in both the domestic as well as in international markets. Currently, the company has an installed capacity of 45 million units for Large Volume of Parenterals and 144 million units for Small Volume Parenterals.

RESEARCH & DEVELOPMENT

R&D represents the growth engine for pharma companies, as it holds the key to a company's developmental pipeline, right from research to development of new formulations and registrations of products. The Company has initiated and have an in house R & D Division at Bhiwadi with a dedicated team of highly qualified, skilled scientists engaged/focussed in developing the formulations and products for its strategic portfolio management. R & D is also well on its way to realize the potential of the company by innovating with various drug delivery technologies.

EXPORTS

In this report your company has planned for major attention of its operation on export market due to opportunity and demand of your products in the international market. Your directors are putting constant efforts for increasing the export sales component on the total turnover to mitigate the risk posed by various domestic markets and factors, which are resulting into price discrimination, cut throat competition, entry of new entities in the market, government price regulatory mechanism. Taking advantage of the increased demand of Indian pharmaceutical products, in the international market, the company has carried on registration and arrangement with several international agencies for increasing the base of export markets. Further plans are underway to increase the direct and indirect exports to various countries. As a result of this, during the year under review, the direct export sales were Rs.670(FOB value)lacs as compared to the previous year's figure of Rs.467 (FOB value) lacs in the Previous year, achieving a growth of 44% approx.

As informed in our previous report, to further expand the company's export activities, your company is in the process of registration of its product dossiers, in both the regulated as well as unregulated markets and the registration formalities with number of countries are well in progress. We have obtained orders from some parties and as some countries registration process is in under the pipe line and hence soon after these registration certificates are obtained, company shall be able to grab the export earnings by exporting to those countries.

Bankers:

We are banking with the Punjab & Sind Bank which has been providing financial assistance to our company for various purposes and for which we express our hearty commends.

DIRECTORS:

During the year under review, Mr Bikramjit Ahluwalia, Chairman,Dr. Rohini Ahluwalia, Whole Time Director, CEO of the company control the affairs of the company to maximize wealth for the shareholders as well as the company. Having a vast experience in this Industry & their timely directions ultimately had provided long term benefits to the Company. Their constant efforts and seasoned decisions paved the way to success in each path.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company, Dr.Rohini Ahluwalia, Ms. Sudarshan Walia, and Mr.Sunil Kumar Sachdeva, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Necessary resolutions seeking the approval of the shareholders for the aforesaid appointment & reappointment of directors, form part of the notice, convening the Annual General Meeting. The details of the directors, seeking appointment/ reappointment is provided under the "Report on Corporate Governance" forming part of this Annual Report.

Directors' Responsibility Statement: Pursuant to the requirement under section 217 (2AA) of the Companies Act,1956, with respect to Directors' Responsibility Statement, it is hereby confirmed :

(i) That the applicable accounting standards have been followed alongwith proper explanation relating to material departures in the preparation of annual accounts;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care 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) That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled "Report on Corporate Governance" has been annexed to this Annual Report.

AUDITOR'S REPORT:

The remarks referred to in the Auditors Report are self explanatory except the following points on which we comment as follows:

On the observation of disputed income tax / other demand mentioned at point no. 9 (ii) of the Annexure to their report, the company has already preferred appeals before the appellate authorities against the said demand of the Income Tax and other departments. Company has strong grounds to believe that the appellate authorities shall pass orders in favour of the company.

On the observation of utilization of short term funds for long term purposes mentined at point no. 17 of the Annexure to their report, we submit that the company has availed term loan assistance for LVP expansion line from bankers. However, to meet certain urgent

needs on capital account, short term funds available have been utilized.

Auditors: M/s Arun. K. Gupta & Associates, Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. We recommend for their reappointment.

Cost Auditors : As per General Circular No. 15/2011 dated 11.04.2011 and in terms of "General Cost Audit Orders" dated 02.5.2011 and 03.5.2011 respectively issued by the Ministry of Corporate Affairs, Government of India, M/s Kabra and Associates, Cost Accountants, be and are hereby appointed as the Cost Auditors of the company for the financial year 2011- 12, by the Board at a remuneration to be settled mutually and as approved by the Board of Directors of the Company. The company will seek confirmation of central goverment for such appointment in terms of appicable provisions of the Companies Act, 1956 and rules made their under.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings / Outgo:

The information pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is furnished in the Annexure forming part of this report.

PARTICULARS OF EMPLOYEES:

During the year under review, no employee was in receipt of remuneration exceeding the specified limits. Hence, no disclosure under section 217(2-A)of the Companies Act, 1956, is required to be made.

INDUSTRIAL RELATION:

The Company continued to maintain very healthy, cordial and harmonious industrial relations at all levels and your Directors wish to place on record their appreciation for the contributions made by the employees at all levels and take this opportunity to thank all employees for their hard work, dedication and commitment.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to offer their sincere thanks to various departments of the Central and State Governments, Banks and Investors for their unstinted support, assistance and valuable guidance. Last but not the least, the directors wish to place on record their deep sense of appreciation for the devoted service of the Executives, Staff and workers of the company at all levels.

For and on behalf of the Board of Directors

Place: New Delhi Bikramjit Ahluwalia

Date: 11.08.2011 Chairman











 
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