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Directors Report of IOL Chemicals and Pharmaceuticals Ltd.

Mar 31, 2015

Dear Members

The Board is pleased to present the Twenty-Eighth Annual Report and Audited Accounts for the financial year ended 31 March 2015.

Financial Results

Financial results of the Company for the financial year under report are given below:

(Rs. in crore)

Particulars Year ended Year ended 31 March 2015 31 March 2014

Gross sales and other income 427.02 626.04

Net sales and other income 386.04 564.81

Profit before interest & 12.58 97.06

depreciation

Interest 59.11 60.34

Profit before depreciation (46.53) 36.72

Depreciation 28.91 31.63

Profit before tax (75.44) 5.08

Provision for tax (including (8.79) 1.78 deferred tax)

Profit after tax (66.65) 3.30

Balance carried to the Balance Sheet

Performance review

Net revenue and other income for the year ended 31 March 2015 was at Rs. 386.04 crore against Rs. 564.81 crore during the previous year representing decrease of 31.65 % over the previous year.

Loss before tax for the year ended 31 March 2015 was at Rs. 75.44 crore against profit before tax Rs. 5.08 crore for the year ended 31 March 2014.

Loss is mainly due to decrease in gross sales and other income which decreased from Rs. 626.04 crore to Rs. 427.02 crore during the year under review.

Overall performance of the Company lower than that of previous year due to mis-match in input and output prices in chemical business and Company was not able to pass on the increased price of raw materials to its customers because of subdued sentiments in overall economy.

Now Company continues to maintain strategic focus on grabbing more share in market, improvement in the product mix so as to increase the share of pharma business, capitalizing product level opportunities for which regulatory approvals have been received, product rationalization, cost effectiveness throughout the organization.

Cash Flow statement

A Cash Flow Statement for the financial year 2014-15 is included in the annexed Statement of Accounts.

Dividend

The Board has not recommended any dividend due to inadequate profits during the year under review.

Share Capital

The paid up equity share capital of the Company has been increased from Rs. 28,81,51,640/- consisting of 2,88,15,164 equity shares of Rs. 10/- each to Rs. 47,65,55,020/- consisting of 4,76,55,502 equity shares of Rs. 10/- each due to allotment of 1,88,40,338 equity share of face value of Rs. 10/- each on the conversion of Preference Shares, Foreign Currency

Convertible Bonds and Share Warrants and allotment on preferential basis during the year ended 31 March 2015.

During the current year, the Company has allotted 33,00,000 equity share of face value of Rs. 10/- each on the conversion of Share Warrants resulting in total equity paid up capital of Rs. 50,95,55,020/- consisting of 5,09,55,502 equity shares of face value of Rs. 10/- each and still 52,50,000 Share Warrants are outstanding for conversion.

DEBT RESTRUCTURING

The Joint Lender Forum (JLF) has sanctioned the comprehensive restructuring of all debts of the Company with cut-off date as 01 September 2014. The restructuring of facilities included restructuring of repayment schedule, interest funding, reduction in interest rates, sanction of working capital term loans.

The Company is complying the provisions of debt restructuring approved by Joint Lender Forum (JLF) .There is no default in repayment of debts and interest thereon.

Holding & subsidiary Company

The Company has neither any holding company nor a subsidiary company.

Internal financial control systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report.

Loan, guarantees or investment under section 186 of the Companies Act, 2013

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

Awards

The Company has been awarded with "2nd prize in National Energy Conservation Award" by the Ministry of Power, Government of India in chemical sector. The Company has been awarded the prize consecutively for nine years by the Ministry of Power, Government of India.

RECOGNITIONS

Following recognitions were received by the Company during the year under review:

o Approval of US Food and Drug Administration (USFDA) in July 2015 to launch API business in US Market o Company has got "Two Star Export House" certificate from Joint Director General of Foreign Trade on 24 June 2015. o Company has got renewal of "HALAL CERTIFICATE" from Halal Committee, Jamiat Ulama - E - Maharashtra for Ibuprofen, Iso Butyl Benezene, Ethyl Acetate and other products of the Company for the year 2015-2016.

o The Company has been awarded with CEP certification (Certificates of Suitability) dated 17 April 2015 for its product Metformin Hydrochloride by European Directorate for the Quality of Medicines & HealthCare (EDQM) authorities, Council of Europe, France. The certificate is valid for a period of five years from the date of issue. Now, the Company is able to sell Metformin Hydrochloride in Europe resulting into increase in higher value added export turnover and margin.

The Company has already holding valid CEP certification (Certificates of Suitability) for its products Ibuprofen & Lamotrigine from European Directorate for the Quality of Medicines & HealthCare (EDQM) authorities, Council of Europe, France and selling these products in Europe.

Credit Rating

The Credit Analysis & Research Ltd (CARE) has rated Company as "CARE BB-" (pronounced " Double B Minus") for Long Term Facilities and "CARE A4" (pronounced "A Four") for Short Term Facilities.

Composition and Number of Meetings of the Board

The Board comprises of well qualified and experienced persons having expertise in their respective areas. It has appropriate combination of Executive, Non Executive and Independent Directors.

During the financial year 2014-15, the Board met 9 (nine) times on 21 May 2014, 30 May 2014, 20 June 2014, 14 August 2014, 22 August 2014, 29 October 2014, 28 November 2014, 31 December 2014 and 13 February 2015.

Directors /Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr Vijay Singla is liable for retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. The Board has recommended the re-election to the members.

Mr Vikas Gupta appointed as an Additional Director and Executive Director of the Company with effect from 29 May 2015 on the recommendation of Nomination and Remuneration Committee and shall hold office upto the date of ensuing Annual General Meeting. He is BSc (Hons.) in Business Management from Kings College London. The Company has received requisite notice from a member proposing his name for appointment as director of the Company. The Board recommends his appointment as Executive Director for a term of five years.

The tenure of Mr Varinder Gupta as Managing Director of the Company is expiring on 31 August 2015. He is re-appointed as Managing Director of the Company for the period of 3 years from 01 September 2015 to 31 August 2018 on the recommendation of Nomination and Remuneration Committee held on 29 May 2015. The Board recommends his re-appointment to the mambers.

Mr Pardeep Khanna was appointed as Chief Financial Officer(CFO) of the Company w.e.f. 13 August 2015 in place of Mr Rakesh Mahajan. The Company is enhanced the role of Mr Rakesh Mahajan with higher responsibilities.

Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has appointed Dr Sandhya Mehta as Independent Director on the Board since 22 August 2014, who is presently the member of Audit and Risk Management Committee and Nomination and Remuneration Committee.

Board Evaluation

The Board has carried out an annual evaluation of its own performance, Board Committees and Independent Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The Board has evaluated the performance of Independent Directors mainly on the basis of their constructive participation in the Board/ Committee proceedings, their ability to monitor the management performance, providing guidance in the key issue in the best interest of the Company and their commitment to the ethical and to fulfillment of fiduciary and other duties assigned by the various act, regulation and rules by the Government. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Committee of Independent Directors.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee has formulated the Nomination and Remuneration Policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Clause 49 of the Listing Agreement. The Nomination and Remuneration Policy is annexed hereto as Annexure I and forms part of the report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Directors of your Company confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) they 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 at the end of the financial year and of the profit or loss of the Company for that period.

c) they have taken proper and sufficient 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.

d) they have prepared the annual accounts on a going concern basis.

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors

Every Independent Director, at the 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, gives a declaration that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Corporate Governance

The Company has in place a system of corporate governance. A separate report on corporate governance alongwith Auditors' Certificate regarding compliance with Clause 49 of the Listing Agreement is annexed to this Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report is given separately in this Annual Report.

Audit and Risk Management Committee

The composition and role of the Committee has been provided in the Corporate Governance Report annexed with the report.

Risk management

The Board has formed a Audit and Risk Management Committee inter alia to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

Related Party Transactions

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 and Risk Management Committee of the Board for their approval. The Committee has granted omnibus approval for related party transactions as per the provisions and restrictions contained in the Listing Agreement.

The Company has formulated a policy on materiality of related party transactions and also on dealing with related party transactions. The policy is available on the Company's website www.iolcp.com.

Fixed Deposits

The Company has not accepted any fixed deposits from the public/ members during the year under review.

Investor Services

The Company is committed to provide the best services to the shareholders/ investors. M/s Alankit Assignments Limited, New Delhi is working as Registrars and Share Transfer Agents (RTA) of the Company for transfer, dematerialization of shares and other investor related services. No correspondence /enquiry from any shareholder/ investor is pending with the Company for reply.

Listing of shares

The equity shares of the Company continued to be listed and traded on National Stock Exchange of India Limited (Script code; IOLCP) and BSE Limited (Script code; 524164). The Company has made all compliances of the Listing Agreements including payment of annual listing fee.

Change of Industrial Classification

Recently NSE and BSE has changed the industrial classification of the Company from specialty chemicals to pharmaceuticals.

Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, M/s S C Vasudeva & Co., Chartered Accountants, New Delhi were appointed as statutory auditors of the Company from the conclusion of the twenty seventh Annual General Meeting of the Company held on 30 September 2014 till the conclusion of the thirty first Annual General Meeting to be held in the year 2018, subject to ratification of their appointment at every Annual General Meeting of the Company.

In terms of aforesaid provisions, the appointment of auditors' is placed for rectification by the members. statutory auditors' Report

Auditors' Report on the accounts is self-explanatory and does not contain any qualifications, reservations or adverse remarks.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s B. K. Gupta & Associates, Practicing Company Secretaries for conducting secretarial audit of the Company for the financial year 2014-2015. The Secretarial Audit Report is annexed hereto as Annexure II and forms part of the report.

The Secretarial Audit report does not contain any qualification, reservation or adverse remark.

Cost Auditors

Pursuant to the provisions of Section 139 of Companies Act, 2013, Company has appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditor to conduct the audit of cost accounts of bulk drugs and chemicals maintained by the Company, for the financial year 2015-16, subject to determination of their remuneration by members of the Company thereto.

The Cost Audit Report for the year ended 31 March 2014 has been filed on 03 September 2014 with Ministry of Corporate Affairs, New Delhi. Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo

Energy conservation continues to be an area of major emphasis in the Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure III and forms part of the report.

The Company has awarded with "2nd Prize in National Energy Conservation Award" in consecutively for nine years by Ministry of Power, Government of India for its continued efforts towards new technology implementation so as to conserve the energy resources of the country. Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure IV forming part of the Annual Report. Particulars of remuneration and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure V forming part of the Report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there has no employee who was in receipt of remuneration equal to or exceeding Rs. 60 lacs per annum or Rs. 5 lacs per month if employed for part of the year.

Industrial Relations

Industrial relations remained cordial and harmonious throughout the year under review.

Safety, Health and Environment

Safety is Company's top priority with regard to employment and it is encouraging safety measures at all levels of operations especially at the floor level. Regular training programmers are being conducted to bring in awareness about the importance of safety at work place. Bi-monthly medical camps are also being organized for welfare of the members in addition to regular medical facilities provided to them.

Prevention of sexual Harassment Policy

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An 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. During the year 2014-2015, no complaints was received by the Company related to sexual harassment.

Vigil Mechanism

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.iolcp.com.

Acknowledgement

We are pleased to place on record our sincere gratitude and appreciation for assistance and co-operation received from the Union Government, Punjab Government, Company's Bankers, Members, Customers and Business Constituents.

We also place on record our sincere appreciation for contribution made by the employees at all levels. Our consistent growth is made possible by their devout, sincere and unstinted services.

For and on behalf of the Board

Sd/- Sd/-

Place : Ludhiana Varinder Gupta Dr M A Zahir

Dated : 13 August 2015 Managing Director Chairman

DIN: 00044068 DIN: 00002973


Mar 31, 2014

Dear Members

The Board of Directors of the Company has the pleasure of presenting the Twenty-seventh Annual Report of IOL Chemicals and Pharmaceuticals Limited together with Audited Statements of Accounts for the fi nancial year ended 31 March 2014.

1. Financial Results

Financial results of the Company for the fi nancial year under report vis-a-vis previous year are as under:

(X in crore)

Particulars Year ended Year ended 31 March 2014 31 March 2013

Gross sales and other 626.04 536.43

Income

Net sales and other income 564.81 484.04

Profi t before interest & 97.06 91.57

depreciation

Interest 60.34 57.23

Profi t before depreciation 36.72 34.33

Depreciation 31.63 31.37

Profi t before tax 5.08 2.96

Provision for tax (including 1.78 1.37 deferred tax)

Profi t after tax 3.30 1.59

Balance carried to the 49.33 46.03

Balance Sheet

2. Performance Review

The Company, during fi nancial year 2013-14, has clocked a growth of 16.70% in gross revenue, which has grown to X 626.04 crore from the gross revenue of X 536.43 crore in the previous year.The profi t before depreciation interest and tax (PBDIT) to net revenue has decreased from 18.92% to 17.18%. The Company has earned profi t before tax (PBT) of X 5.08 crore during the year under review against X 2.96 crore during the previous year. Higher PBT is mainly due to increase in sale of the Company and improved in operation effi ciency during the year.

The Company continues to maintain strategic focus on grabbing more share in market, improvement in the product mix, capitalizing product level opportunities for which regulatory approvals have been received, product rationalization, cost effectiveness throughout the organization.

3. Cash Flow Statement

A Cash Flow Statement for the fi nancial year 2013-14 is included in the annexed Statement of Accounts.

4. Dividend

The Board of Directors has not recommended any dividend keeping in view the ongoing expansion, modifi cation and other future investment possibilities and decided to plough back profit.

5. Capital Structure Authorised Capital

The Company has enhanced the authorized share capital from X 54 crore to X 80 crore divided into 2,20,00,000 Preference Share of X 10/- each and 5,80,00,000 Equity Shares of X 10/- each on 20 June 2014

Paid -up Share Capital

The paid up equity share capital of the Company has been increased from Rs. 28,81,51,640/- to Rs. 39,31,15,910/- due to allotment of 1,04,96,427 equity share on the conversion of preference share and allotment on preferential basis in following trenches:

71,46,427 Equity Share of face value of Rs. 10/- each at a premium of Rs. 18/- per share on 21 June 2014 against redemption of 1,50,10,000 1% Non Cumulative Redeemable Preference Shares of Rs. 10/- each to promoter group Companies and 50,00,000 7% Non Cumulative Redeemable Preference Shares of Rs. 10/- each to a non-promoter;

22,00,000 equity share of face value of Rs. 10/- each at premium of Rs. 18/-each on preferential basis on 21 June 2014 to non- promoters;

11,50,000 equity share of face value of Rs. 10/- each at premium of Rs. 18/- each on preferential basis on 4 July 2014 to non promoters;

In addition of above, the Company has allotted 1,10,00,000 warrants with option to subscribe to a equity share of face vale of Rs. 10/- at the premium of Rs. 18/- for each warrant, within period of 18 month from the date of allotment on preferential basis to non- promoters on 04 July 2014.

6. Adjustment of Conversion Price of FCCBs

On the issue of aforesaid equity shares and warrants, the pursuant to para 6.3.12 of the Terms and Conditions relating to adjustment of conversion price in connection with the Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCB) issued by the Company in May 2010, the conversion price of said Bonds stands adjusted from date of allotment that is from 04 July 2014 from Rs. 78/- to Rs. 77/- per equity share.

7. Credit Rating

The Credit Analysis & Research Ltd (CARE) has rated Company as "CARE BB-" (pronounced "Double B Minus") for Long Term Facilities and "CARE A4" (pronounced "A Four") for Short Term Facilities.

8. Holding & Subsidiary Company

The Company has neither any holding company nor a subsidiary company.

9. Awards

Members would be happy to note the receipt of following Awards by the Company during the year under review:

The Company has been awarded with "1st prize in National Energy Conservation Award" in Drugs and Pharmaceuticals sector and with "2nd prize in National Energy Conservation Award" in Chemicals sector by the Ministry of Power, Government of India. The Company has been awarded the prize consecutively for eight years by the Government of India.

10. Recognitions

Following recognitions were received by the Company during the year under review:

- Certifi cate of Good Manufacturing Practices Compliance of Manufacturer" from Authority for Health and Consumer Protection, Hamburg, Germany

11. Directors

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Dr Sandhya Mehta, was appointed as an Additional Director designated as an

Independent Director w.e.f. 22 August 2014 on the recommendation of Nomination and Remuneration Committee and she shall hold offi ce up to the date of the ensuing Annual General Meeting. She has vast 22 experience to her credit. She has published seven books in addition to numerous papers published in reputed National & International Journals. She holds master degree in Business Management and Ph.D in Management Studies. The Company has received requisite notice in writing from a member proposing her name for appointment as an Independent Director. The Board recommends her appointment as Independent Directors for a term up to fi ve consecutive fi ve years.

As per the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr Vijay Singla and Mr Vijay Garg will retire in the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Board recommends their re-appointment.

As per the provisions of the Companies Act, 2013, Independent Director are eligible to hold offi ce for a term maximum up to consecutive fi ve years and are eligible for re-appointment for the second term on passing a special resolution by the company. During their tenure, they shall not be retire by rotation.

In terms of the Articles of Association of the Company, Dr M A Zahir, Mr Chandra Mohan, Mr Yogesh Goel and Mr Ravi Pratap Singh, non-executive ( independent ) directors so appointed, will retire in the ensuing Annual General Meeting.

The Company has received from all the Independent Directors consents for their appointment and declarations confi rming that they meet the criteria of independence as envisaged under the Companies Act, 2013 and the Listing Agreement. The Company has received requisite notices in writing from members proposing their names for appointment as Independent Directors. The Board recommends their appointment as Independent Directors for a term up to fi ve consecutive years.

12. Corporate Governance

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance alongwith Auditors'' Certifi cate regarding compliance with Clause 49 of the Listing Agreement is annexed to this Annual Report.

13. Management Discussion and Analysis Report

Management Discussion and Analysis Report is given separately in this Annual Report.

14. Safety, Health and Environment

Safety is Company''s top priority with regard to employment and it is encouraging safety measures at all levels of operations especially at the fl oor level. Regular training programmers are being conducted to bring in awareness about the importance of safety at work place. Bi-monthly medical camps are also being organized for welfare of the members in addition to regular medical facilities provided to them.

15. Fixed Deposits

The Company has not accepted any fi xed deposits from the public/ members during the year under review.

16. Investor Services

The Company is committed to provide the best services to the shareholders/ investors. M/s Alankit Assignments Limited, New Delhi are working as Registrars and Share Transfer Agents (RTA) of the Company for transfer, dematerialization of shares and other

investor related services.

No correspondence /enquiry from any shareholder/investor are pending with the Company for reply.

17. Listing of equity shares

The equity shares of the Company continued to be listed and traded on National Stock Exchange of India Limited (Script code; IOLCP) and BSE Limited (Script code; 524164). The Company has made all compliances of the Listing Agreements including payment of annual listing fee.

18. Statutory Auditors'' Report

Auditors'' Report on the accounts is self-explanatory and no comments are required.

19. Statutory Auditors

In terms of the provisions of the Companies Act, 2013, M/s S C Vasudeva and Co., Chartered Accountants, New Delhi (Firm Reg. No. 00235N) Statutory Auditors of the Company, will complete six consecutive years at the conclusion of the ensuing Annual General Meeting. They can be further appointed as Statutory Auditors for another term of four consecutive years i.e, till the conclusion of Annual General Meeting to be held in the year 2018. The Company has obtained necessary certifi cate under Section 141 of the Companies Act, 2013 from the auditors conveying their eligibility for the above appointment. The Audit & Risk Management Committee and the Board reviewed their eligibility criteria, as laid down under Section 141 of the Companies Act, 2013 and recommended their appointment as auditors for the above said period.

20. Cost Auditors

The Company has appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors to conduct the audit of Cost Accounts of chemicals and bulk drugs maintained by the Company, for the fi nancial year 2013-14, subject to the approval of Central Govt. thereto. As mandated by Circular No.15/2011 dated 11th April, 2011 issued by the Ministry of Corporate Affairs, Govt. of India, full particulars of Cost Auditors are given herein below:-

Name M/s Ramanath Iyer & Co.Cost Accountants ICWA Membership No. 13848

Address No. 808, Pearls Business Park, Netaji Subhash Place, Delhi – 110034

Details of Cost Audit Report for the financial year ended 31 March 2013

(a) Due date of fi ling 30 September 2013

(b) Actual date of filing 06 September 2013

21. Industrial Relations

Industrial relations remained cordial and harmonious throughout the year under review.

22. Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo

Energy conservation continues to be an area of major emphasis in the Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with 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 is annexed hereto as Annexure I and forms part of the report.

The Company has been awarded with "1st prize in National Energy Conservation Award" in Drugs and Pharmaceuticals sector and with "2nd prize in National Energy Conservation Award" in Chemicals sector by the Ministry of Power, Government of India. The Company has been awarded the prize consecutively for eight years by the Government of India.

23. Information on personnel

Statement showing particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 is not given as no employee was in receipt of remuneration equal to or exceeding Rs. 60 lacs per annum or Rs. 5 lacs per month if employed for the part of the year.

24. Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, it is hereby confi rmed that:

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

2. the directors had 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 at the end of the fi nancial year and of the profi t of the Company for that period;

3. the directors had taken proper and suffi cient 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;

4. the directors had prepared the annual accounts on a going concern basis.

25. Acknowledgement

We are pleased to place on record our sincere gratitude and appreciation for assistance and co-operation received from the Union Government, Punjab Government, Company''s Bankers, Members, Customers and Business Constituents.

We also place on record our sincere appreciation for contribution made by the employees at all levels. Our consistent growth is made possible by their devout, sincere and unstained services.

For and on behalf of the Board

Sd/- Sd/- Place : Ludhiana Dr M A Zahir Varinder Gupta Dated : 22 August 2014 Chairman Managing Director DIN: 00002973 DIN: 00044068


Mar 31, 2013

Dear Members

The Board of Directors of the Company has the pleasure of presenting the Twenty-sixth Annual Report of IOL Chemicals and Pharmaceuticals Limited together with Audited Statements of Accounts for the fnancial year ended 31 March 2013.

1. Financial Results

Financial results of the Company for the fnancial year under report vis-a-vis previous year are as under:

(Rs.in crore) Particulars Year ended Year ended 31 March 2013 31 March 2012

Gross sales and other 536.43 507.85

Income

Net sales and other income 484.04 473.02

Proft before interest & 91.57 70.94 depreciation

Interest 57.24 43.20

Proft before depreciation 34.33 27.74

Depreciation 31.37 23.94

Proft before tax 2.96 3.80

Provision for tax (including 1.37 (0.96) deferred tax)

Proft after tax 1.59 4.75

Balance carried to the 46.03 44.45

Balance Sheet

2. Performance Review

The Company, during FY 2012-13, has clocked a growth of 5.63% in Gross Revenue, which has grown to Rs. 536.43 crore from the gross revenue of Rs.507.85 crore in the previous year. Your Company has also improved in operational effciency this year and proft before depreciation interest and tax (PBDIT) to Net Revenue has increased from 14.99% to 18.92%. The Company has earned proft before tax (PBT) of Rs. 2.96 crore during the year under review against Rs. 3.80 crore during the previous year. Lower PBT is mainly due to increase in interest cost which increased from Rs. 43.20 crore to Rs. 57.24 crore during the year.

Your Company continues to maintain strategic focus on grabbing more share in market, improvement in the product mix, capitalizing product level opportunities for which regulatory approvals have been received, product rationalization, cost effectiveness throughout the organization.

3. Cash Flow Statement

A Cash Flow Statement for the fnancial year 2012-13 is included in the annexed Statement of Accounts.

4. Dividend

The Board of Directors has not recommended any dividend keeping in view the ongoing expansion, modifcation and other future investment possibilities and decided to plough back proft.

5. Credit Rating

The Credit Analysis & Research Ltd (CARE) has rated Company as "CARE BB-" (pronounced "Double B Minus") for long term facilities and "CARE A4" (pronounced "A Four") for short term facilities.

6. Holding & Subsidiary Company

Your Company has neither any holding company nor a subsidiary company.

7. Awards

Members would be happy to note the receipt of following Awards by the Company during the year under review:

The Company has been awarded with "2nd prize in National Energy Conservation Award" by the Ministry of Power, Government of India in chemical sector. The Company has been awarded the prize consecutively for seven years by the Ministry of Power, Government of India.

8. Recognitions

Following recognitions were received by the Company during the year under review:

- ANVISA Certifcate (Brazil) Ministry of Health Dated 12 June 2012

- EUGMP certifcation from "Freie und Hansestadt Hamburg", Germany Dated 21 February 2013 Company has also received "Trading House Certifcate" from Joint Director General of foreign trade on 03 May 2013

9. Directors

According to Article 146 of the Articles of Association of the Company and subject to the provisions of Section 255 of the Companies Act, 1956, all the directors other than Managing Director and Whole Time Directors of the Company shall retire from the offce. Accordingly, Dr M A Zahir, Mr Chandra Mohan, Mr Yogesh Goel and Mr Ravi Pratap Singh are liable to retire at the ensuing Annual General Meeting and, being eligible, have offered themselves for re-appointment. The Board has recommended the re-election of these directors to the members.

Mr Vijay Kumar Garg was appointed as Additional and Whole Time Director on the Board w.e.f. 02 March 2013 in terms of Article 133 of the Articles of Association of the Company and designated as Joint Managing Director of the Company. Pursuant to Section 260 of the Companies Act, 1956, he holds offce upto the date of ensuing Annual General Meeting. The Company has received a notice from a member under Section 257 of Companies Act,1956 for his appointment as Director of the Company.

Mr N K Pundir, resigned from the directorship of the Company w.e.f. 14 August 2012. The Board has placed on record their appreciation for the valuable services rendered by him during his tenure as director of the Company.

10. Corporate Governance

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance alongwith Auditors'' Certifcate regarding compliance with Clause 49 of the Listing Agreement is annexed to this Annual Report.

11. Management Discussion and Analysis Report

Management Discussion and Analysis Report is given separately in this Annual Report.

12. Safety, Health and Environment

Safety is Company''s top priority with regard to employment and it is encouraging safety measures at all levels of operations especially at the foor level. Regular training programmers are being conducted to bring in awareness about the importance of safety at work place. Bi-monthly medical camps are also being organized for welfare of the members in addition to regular medical facilities provided to them.

13. Fixed Deposits

The Company has not accepted any fxed deposits from the public/ members during the year under review.

14. Investor Services

The Company is committed to provide the best services to the shareholders/ investors. M/s Alankit Assignments Limited, New Delhi are working as Registrars and Share Transfer Agents (RTA) of the Company for transfer, dematerialization of shares and other investor related services.

No correspondence /enquiry from any shareholder/investor are pending with the Company for reply.

15. Listing of equity shares

The equity shares of the Company continued to be listed and traded on National Stock Exchange Limited (Script code; IOLCP) and BSE Limited (Script code; 524164). The Company has made all compliances of the Listing Agreements including payment of annual listing fee.

16. Statutory Auditors'' Report

Auditors'' Report draw intention to note no. 36 to the fnancial statement, relating to remuneration paid/ provided in respect of Managing Director and Whole Time Director of the Company, in excess of the limit prescribed under Section 198 read with Schedule XIII to the Companies Act, 1956, which is subject to the approval of Central Government.

In this regard we wish to inform you that the Company has received approval of the Central Government vide its letter no. B61721627/1/2012-CL,VII dated 29 May 2013 to the appointment of Mr Varinder Gupta as Managing Director of the Company and the approval of the Central Government is awaited to the appointment of Mr Vijay Kumar Garg as Joint Managing Director of the Company .

17. Statutory Auditors

M/s S C Vasudeva and Co., Chartered Accountants, New Delhi (Firm Reg. No. 00235N) Statutory Auditors of the Company, retire at the conclusion of ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

18. Cost Auditors

The Company has appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditor to conduct the audit of cost accounts of chemicals and bulk drugs maintained by the Company, for the fnancial year 2013-14, subject to the approval of Central Government thereto. As mandated by Circular No.15/2011 dated 11 April 2011 issued by the Ministry of Corporate Affairs, Govt. of India, full particulars of Cost Auditor are given herein below:- Name M/s Ramanath Iyer & Co., Cost

Accountants ICWA Membership No. 13848

Address No. 808, Pearls Business

Park, Netaji Subhash Place, Delhi – 110 034 Details of Cost Audit Report for the fnancial year ended 31 March 2012

(a) Due date of fling 28 February 2013

(b) Actual date of fling 9 January 2013

19. Industrial Relations

Industrial relations remained cordial and harmonious throughout the year under review.

20. Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo

Energy conservation continues to be an area of major emphasis in the Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with 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 is annexed hereto as Annexure I and forms part of the report.

The Company has been awarded with "2nd prize in National Energy Conservation Award" by Ministry of Power, Government of India in chemical sector. The Company has been awarded the prize consecutively for seven years by the Ministry of Power, Government of India.

21. Information on personnel

Statement showing particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 is not given as no employee was in receipt of remuneration equal to or exceeding Rs. 60 lacs per annum or Rs. 5 lacs per month if employed for the part of the year.

22. Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, it is hereby confrmed that:

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

2. the directors had 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 at the end of the fnancial year and of the proft of the Company for that period;

3. the directors had 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;

4. the directors had prepared the annual accounts on a going concern basis.

23. Acknowledgement

We are pleased to place on record our sincere gratitude and appreciation for assistance and co-operation received from the Union Government, Punjab Government, Company''s Bankers, Members, Customers and Business Constituents.

We also place on record our sincere appreciation for contribution made by the employees at all levels. Our consistent growth is made possible by their devout, sincere and unstained services.

For and on behalf of the Board

Sd/- Sd/-

Place : Ludhiana Dr M A Zahir Varinder Gupta

Dated : 12 August 2013 Chairman Managing Director


Mar 31, 2012

The Directors are pleased to present the Twenty-fifth Annual Report and Audited Accounts for the financial year ended 31 March 2012.

1. Financial Results

Financial results of the Company for the financial year under report are given below:

(in crore)

Particulars Year ended Year ended 31 March 2012 31 March 2011

Net sales and other income 473.02 391.30

Profit before interest & depreciation 70.94 69.60

Interest 43.20 36.80

Profit before depreciation 27.74 32.80

Depreciation 23.94 23.76

Profit before tax 3.80 9.04

Provision for tax (including deferred tax) (0.96) 2.86

Profit after tax 4.75 6.18

Balance carried to the Balance Sheet 44.45 52.37

2. Presentation of Financial Results

Notification dated 28 February 2011 issued by the Ministry of Corporate Affairs has stipulated a revised format for disclosure of financial statements under Schedule VI to the Companies Act, 1956. The financial results of the Company for the year ended 31 March 2012 are, therefore, disclosed as per the revised Schedule VI and the previous years' figures have been restated to align with the current year's presentation.

3. Performance Review

There was a healthy improvement in the overall performance of the Company in comparison to the previous year's performance. Net sales and other income of the Company has increased by 20.88% to Rs. 473.02 crore from Rs. 391.30 crore during the previous year. Profit before interest & depreciation has increased by 1.91% to Rs. 70.94 crore during the year under review against from Rs. 69.60 crore during the previous year. The Company has earned net profit after tax Rs. 4.75 crore during the year under review against Rs. 6.18 crore during the previous year.

4. Cash Flow Statement

A Cash Flow Statement for the financial year 2011-12 is included in the annexed Statement of Accounts.

5. Dividend

The Board of Directors has not recommended any dividend keeping in view the ongoing expansion, modification and other future investment possibilities and decided to plough back profit.

6. Merger

The Board for Industrial and Financial Reconstruction (BIFR) the competent authority under the Sick Industrial Companies (Special Provisions) Act, 1985 vide its order dated 15 March 2012 sanctioned merger of G Drugs and Pharmaceuticals Limited (GDPL) with the Company with appointed date of 1 April 2010. The merger become effective on 20 April 2012 with the filing of order with the Registrar of Companies. Consequently GDPL ceased to exit from that date. Pursuant to the aforesaid scheme, 4,34,500 equity shares of the Company were issued to the shareholders of GDPL on 2 May 2012 in swap ratio of 1:20 i.e. one fully paid equity share of Rs. 10/- each of the Company for every 20 equity shares of Rs. 10/- each of GDPL. With this issue, the paid-up equity share capital of the Company has increased from Rs. 25.72 crore consisting of 2,57,16,664 equity shares of face value of Rs. 10/- each to Rs. 26.15 crore consisting of 2,61,51,164 equity shares of face value of Rs. 10/- each. These shares are listed on BSE Limited (BSE) and the National Stock

Exchange of India Limited (NSE).

7. Change in Authorised share capital

Pursuant to merger of G Drugs and Pharmaceuticals Limited with the Company vide BIFR's order dated 15 March 2012 the Authorised share capital of the Company stands increased from Rs. 45 crore consisting of 4,00,00,000 equity shares of face value of Rs. 10/- each and 50,00,000 preference shares of Rs. 10/- each to Rs. 54 crore consisting of 4,90,00,000 equity shares of Rs. 10/- each and 50,00,000 preference shares of Rs. 10/- each.

8. Multi Product Plant and upgrading of R&D facilities

The project of capacity enhancement and multi product PPIs plant and other pharmaceutical intermediate products with a CAPEX of Rs. 130 crore has been completed and in process of stabilization. The Company has undertaken another project of multi product plant for manufacture active pharmaceutical ingredients and upgrading of R&D facilities involving a CAPEX of Rs. 58.41 crore. The aforesaid project is on schedule and likely to be completed during the current year.

9. Credit Rating

The Credit Analysis & Research Ltd (CARE) has rated Company as "CARE BBB" for Long Term Facilities which indicates moderate safety for timely servicing of debt obligations and as "CARE A2" for Short Term Facilities which indicates adequate capacity for timely payment of short term debt obligations.

10. Awards

Members would be happy to note the receipt of following Awards by their Company during the year under review:

Awarded with "2nd prize in National Energy Conservation Award" consecutively for the years 2005, 2006, 2007, 2008, 2009 & 2011 by Ministry of Power, Government of India in Chemical Sector and awarded with "1st prize in National Energy Conservation Award" 2010 in Drugs and Pharmaceutical Sector by Ministry of Power, Government of India.

11. Recognitions

Following recognitions were received by the Company during the year under review:

* OHSAS 18001:2007 for Occupational Health & Safety Management System

* Recognition for In house R & D unit by Department of Scientific & Industrial Research (DSIR), Ministry of Science & Technology, Government of India.

12. Directors

According to Article 146 of the Articles of Association of the Company, one third of the directors for time being liable to retire by rotation, shall retire from the office. Accordingly, Dr M A Zahir and Mr Chandra Mohan, are liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, have offered themselves for re-appointment. The Board has recommended the re-election of these directors to the members.

Mr N K Pundir was appointed as Additional Director and Director (Commercial) on the Board w.e.f. 31 March 2012 in terms of Article 133 of the Articles of Association of the Company.

Mrs Dimple Gupta and Mr Kanwal Pushkarnath Pandita, Directors resigned from the directorship of the Company w.e.f 31 March 2012. Mr N K Pundir, Director (Commercial) resigned from the directorship of the Company w.e.f 14 August 2012. The Board has placed on record their appreciation for the valuable services rendered by them during their tenure as Director of the Company

13. Corporate Governance

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance alongwith Auditors'Certificate regarding compliance with Clause 49 of the Listing Agreement is annexed to this Annual Report.

14. Management Discussion and Analysis Report Management Discussion and Analysis Report is given separately in this Annual Report.

15. Safety, Health and Environment

Safety is Company's top priority with regard to employment and it is encouraging safety measures at all levels of operations especially at the floor level. Regular training programmers are being conducted to bring in awareness about the importance of safety at work place. Bi-monthly medical camps are also being organized for welfare of the members in addition to regular medical facilities provided to them.

16. Fixed Deposits

The Company has not accepted any fixed deposits from the public/ members during the year under review.

17. Investor Services

The Company is committed to provide the best services to the shareholders/ investors. M/s Alankit Assignments Limited, New Delhi are working as Registrars and Share Transfer Agents (RTA) of the Company for transfer, dematerialization of shares and other investor related services. No correspondence /enquiry from any shareholder/ investor is pending with the Company for reply.

18. Listing of Shares

The equity shares of the Company continued to be listed and traded on National Stock Exchange Limited (Script code; IOLCP) and BSE Limited (Script code; 524164). The Company has made all compliances of the Listing Agreements including payment of annual listing fee.

19. Statutory Auditors' Report

Auditors' Report on the accounts is self-explanatory and no comments are required.

20. Statutory Auditors

M/s S. C. Vasudeva and Co., Chartered Accountants, New Delhi (Firm Reg. No. 00235N) Statutory Auditors of the Company, retire at the conclusion of ensuing Annual General Meeting and being eligible, have offered themselves for re- appointment.

21. Cost Auditors

The Company has appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors to conduct the audit of cost Accounts of chemicals and bulk drugs maintained by the Company, for the financial year 2012-13, subject to the approval of Central Government thereto. As mandated by Circular No.15/2011 dated 11 April 2011 issued by the Ministry of Corporate Affairs, Government of India, full particulars of Cost Auditor are given herein below:-

Name M/s Ramanath Iyer & Co., Cost Accountants

ICWA Membership No. 13848

Address BL-4 (Paschmi), Shalimar Bagh, New Delhi - 110088

Details of Cost Audit Report for the financial year ended 31 March 2011

(a) Due date of filing 30 September 2011

(b) Actual date of filing 09 September 2011

22. Industrial Relations

Industrial relations remained cordial and harmonious throughout the year under review.

23. Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo Energy conservation continues to be an area of major emphasis in the Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with 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 is annexed hereto as Annexure I and forms part of the report.

The Company has Awarded with "2nd prize in National Energy Conservation Award" consecutively for the years 2005, 2006, 2007, 2008, 2009 & 2011 by Ministry of Power, Government of India in Chemical Sector. The Company has also Awarded with "1st prize in National Energy Conservation Award" for the year 2010 in Drugs & Pharmaceuticals Sector by Ministry of Power, Government of India.

24. Information on personnel

Statement showing particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 is not given as no employee was in receipt of remuneration equal to or exceeding Rs. 60 lacs per annum or Rs. 5 lacs per month if employed for the part of the year.

25. Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

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

2. the directors had 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 at the end of the financial year and of the profit of the Company for that period;

3. the directors had taken proper and sufficient 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;

4. the directors had prepared the annual accounts on a going concern basis.

26. Acknowledgement

We are pleased to place on record our sincere gratitude and appreciation for assistance and co-operation received from the Union Government, Punjab Government, Company's Bankers, Members, Customers and Business Constituents.

We also place on record our sincere appreciation for contribution made by the employees at all levels. Our consistent growth is made possible by their devout, sincere and unstinted services.

For and on behalf of the Board

Sd/-

Place : Ludhiana Varinder Gupta

Dated : 14 August 2012 Chairman and Managing Director

 
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