Your Directors have pleasure in presenting herewith the 30th Annual Report togetherwith the Audited Accounts of the Company for the Financial Year ended 31st March, 2011
| || ||(Rs. in Lakhs) |
| ||Year ended 31.03.2011 ||Year ended 31.03.2010 |
|Total Income ||1369.60 ||1563.59 |
|Operating Profit / (Loss) ||(89.62) ||142.54 |
|Interest and Finance charge ||125.54 ||159.80 |
|Profit / (Loss) before depreciation, prior period adjustments & tax ||(215.16) ||(17.26) |
|Profit./ (loss) after depreciation and tax ||(326.53) ||(103.06) |
|Income tax for earlier year ||1.15 ||4.74 |
|Fringe Benefit Tax for earlier year || ||0.55 |
|Net Profit/(Loss) after tax ||(327.68) ||(108.35) |
|Surplus/(Deficit) brought forward ||(2463.09) ||(2354.74) |
|Surplus / (Deficit) carried forward to Balance Sheet ||(2790.77) ||(2463.09) |
Your Companys operations during the year under review have declined due to fireaccident occurred in your factory at Vapi on 9th December, 2010 affecting and damaging asection of plant, building, various equipments etc. Further due to less order on Job work,company could not achieve the production capacity.
Your Companys sales for the year ending 31st March, 2011 is Rs.0.40 Lacs(previous year Rs.2.28 lacs) and conversion charges for job work is Rs.1337.81 lacs(previous year Rs.1545.70 Lacs ). The operating loss for the year is Rs.89.62 lacs ascompared to operating profit of Rs. 142.54 lacs for the previous year. The net lossrecorded by the Company for the year is Rs. 327.68 lacs as compared to net loss ofRs.108.35 lacs in the previous year.
Your Company became "Sick Company" as defined under Sec 3 (1) (o) of the SickIndustrial Companies (Special provision) Act 1985, and in accordance with the provisionsof section 15 (I) of the said Act and registered with BIFR on 5/11/2007 under referenceNo.67/2007.
Based on the direction by BIFR the Revised Draft Rehabilitation Scheme has beenprepared by Union Bank of India (Operating Agency) in consultation with the promoters andother involved agencies and submitted to BIFR for their consideration.
Your Company is hopeful of working out an acceptable revival strategy and turn aroundthe performance of the Company within a reasonable time with technical and financialsupport of new co-promoters.
MANAGEMENT DISCUSSIONS AND ANALYSIS
1. Industry Structure & Developments
India has been making rapid strides in the field of Bulk Drugs and majority of thesedrugs required in India are manufactured in India. India also happens to be a majorexporter of bulk drugs all over the globe, particularly to Europe and US markets.
2. Opportunity, Threats, Outlook, Risk and Concerns
The Indian fermentation industry does not have a level playing field as compared toChina. The energy cost, labour cost and raw material cost are much lower in China,therefore the Company finds itself in a very difficult situation.
3. Segment-wise or Product-wise Performance
Your Company is engaged in manufacturing activities on Job Work basis. Your company isalso on look out for new products to support its activities and fixed costs.
4. Internal Control Systems and their adequacy.
The Company has adequate internal control procedures which commensurate with its sizeand nature of business. The internal control procedures and systems ensure efficient useand protection of resources and compliance with the policies, procedures and statutes.
5. Material Developments in Human Resources and Industrial Relations
Fermentation industry is a high technology Industry. Continues efforts are being madein training the employees through In-house training programs to suit the Companysrequirements. Industrial Relations have been generally cordial and healthy.
In terms of Article of Association of the Company as well as the requirement of theCompanies Act, 1956, Dr. Sachin D Patel, Mr. J.K. Cha and Mr. Vijay Agarwal retires byrotation at the ensuing Annual General Meeting and being eligible, offer themselves forre-appointment.
Mr. Rajneesh Anand was re-appointed as Managing Director of the Company for a period ofthree years with effect from 1st February, 2011. The Board places on record their sincereappreciation for the useful contribution made by Mr. Rajneesh Anand as the ManagingDirector.
Relations between the Management and the workers generally remained cordial andpeaceful.
Messrs Khandelwal Jain & Co., Chartered Accountants, Statutory Auditors of theCompany retires at the conclusion of the forthcoming Annual General Meeting and beingeligible, offers themselves for re-appointment.
The Auditors have furnished to the Company the requisite Certificate under Section 224(1B) of the Companies Act, 1956.
The Company has appointed M/s Gopalkrishnan Aiyer & Co., Chartered Accountants asInternal Auditors of the Company.
The Company being Sick Unit and Registered with BIFR and presently the Company isengaged in manufacturing activities on Job Work basis.
Based on the said reason, the company making an application to Central Government forexemption from Cost Audit of the Record of the Company for the financial year 2010-11 u/s233 of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
No employees of the Company are drawing salary in excess of the limits specified undersection 217(2A) of the Companies Act, 1956 read with the Companies (Particulars ofEmployees) Rules, 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of energy and technology absorption etc. as required to bedisclosed in terms of Section 217(1) (e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of the Directors) Rules, 1988, aregiven in Annexure "A" to the Directors Report.
Report of Directors on compliance of conditions on Corporate Governance as specified inClause 49 of the Listing Agreement together with certificate issued by the PracticingCompany Secretary thereon attached to this Report.
Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:
i) In the preparation of the Annual Accounts, the applicable accounting standards havebeen followed.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the financial year under consideration.
iii) The Directors have taken proper and sufficient care of the maintenance of adequateaccounting records in accordance with the provision of this act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
AUDITORS OBSERVATIONS & COMMENTS
As regards remarks in the Auditors Report, the notes wherever referred to, areself-explanatory.
Your Directors have pleasure to place on record their sincere appreciation for thecontinued co-operation, support extended to the Company by Financial Institutions, UnionBank of India, all the Employees, Yuhan Corporation, the State Government of Gujarat,Dept. of Chemical & Petrochemical and various other Government authorities.
| ||For and on behalf of the Board of Directors || |
| ||RAJNEESH ANAND ||DR. SACHIN D. PATEL |
| ||Managing Director ||Director |
|Place : Mumbai || || |
|Date : 26th August, 2011 || || |
ANNEXURE A TO THE DIRECTORS REPORT
INFORMATION AS PER SECTION 217 (1) (e) READ WITH COMPANIES (DISCLOSURE OF PARTICULARSIN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS'REPORT.
CONSERVATION OF ENERGY
(a) Energy conservation measures taken: -
During the year under review, all possible efforts were made to ensure optimumconservation of electricity and fuel at the plant.
(b) Additional investments and proposals, if any, being implemented for reduction ofconsumption of energy: -
The Company has introduced improved operational methods, improved maintenance systemsand rationalisation to bring about a saving in power consumption.
(c) Impact of measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods: -The adoption of energy conservationmeasures stated above is expected to help in saving to the Company on fuel and energycost.
(d) The total energy consumption per unit of production as per Form A of the Annexureto the Rules in respect of Industries specified in the Schedule thereto: -
The Company has invested substantial amount in the Plant and equipment to reduce energyConsumption and the Company will continue in its efforts to improve methods of energyconservation and utilisation.
FORM - A
Form for disclosure of Particulars with respect to Conservation of Energy
A POWER AND FUEL CONSUMPTION
| ||2010-2011 ||2009-2010 |
|1. Electricity : || || |
|a) Purchase : || || |
|Units ||8685390 ||9636840 |
|Total Amount ||53391598 ||60143017 |
|Rate/Unit (Rs.) ||6.15 ||6.24 |
|b) Own Generation : || || |
|Through diesel / LDO Generators (KwH) ||116760 ||60824 |
|Diesel / LDO Consumed (Liters) ||51858 ||34396 |
|Units / Liter of Diesel /LDO (KwH) ||2.25 ||1.77 |
|Total Amount (Rs.) ||2162850 ||1224783 |
|Cost / Unit ( Rs. / KwH) ||18.52 ||20.14 |
|2. Furnace Oil : || || |
|Quantity (Liters) ||315167 ||301628 |
|Total Amount (Rs) ||8281905 ||7019567 |
|Average Rate (Rs./Liter) ||26.28 ||23.27 |
|3. Coal / Lignite : || || |
|Quantity (Kgs) ||7461990 ||7198000 |
|Total Amount (Rs.) ||37275691 ||32786997 |
|Rate / Kgs (Rs.) ||5.00 ||4.56 |
B. CONSUMPTION PER MT OF FINISHED GOODS PRODUCED *
| ||2010-2011 ||2009-2010 |
|Electricity per MT (Rs) ||442790 ||386720 |
|Furnace Oil Per MT (Rs) ||68684 ||45136 |
|Diesel /LDO Per MT (Rs) ||17937 ||7875 |
|Coal / Lignite Per MT (Rs) ||309137 ||210820 |
* Figures are not comparable as mix of two products were produced and use ofsubstitute, also the per MT cost has been calculated excluding the finished goods used forcaptive consumption.
Efforts made in technology absorption as per Form-B of the Annexure to the Rules:
Form for disclosure of Particulars with respect to absorption
1 Research & Development ( R & D)
(a) Specific areas in which R & D carried out by the Company:
Since the company is currently in the Job work business, the company works on thedevelopment of processes and strains to improve productivity to increase the income/reduce losses.
(b) Benefits derived as a result of the above R & D:
The R & D activities of the Company have resulted in improved productivity andquality of the product, better yields and recoveries leading to cost containment.
(b) Future Plan of action:
The Research activity will continue to concentrate on new product, development ofproducts which the company will identify in future, process improvement and development.The Company is working aggressively to scale up new product.
(c) Expenditure on R & D:
| ||(Rs. in Lakhs) |
|i. Capital ||Nil |
|ii. Recurring ||1.66 |
|iii. Total ||1.66 |
|iv. Total R&D Expenses as per percentage of total turnover ||0.12% |
2 Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation and innovation:
The Company has taken steps to increase the yields and productivity to bring down thecost of operation.
(b) Benefits derived as a result of the above efforts:
- Reduction of operation cost.
- Improvement in product quality.
3. Activities related to exports, initiatives taken to increase exports,development of new export markets for products and services and export plan:
The company is in the job work business area only, however the product made by thecompany is used by the principals for manufacture of down stream API which is widelyexported. This will help the country to gain good foreign exchange. Our Principals earlierwere also importing the products manufactured by us from China. Thus our activity in a wayis also helping the country to save foreign exchange.
|Total foreign exchange used and earned ||(Rs. In lakhs) |
|- Total foreign exchange earned ||NIL |
|- Total foreign exchange spent ||NIL |
| ||For and on behalf of the Board of Directors || |
| ||RAJNEESH ANAND ||DR. SACHIN D. PATEL |
| ||Managing Director ||Director |
|Place : Mumbai || || |
|Date : 26th August, 2011 || || |
ANNEXURE B TO THE DIRECTORS REPORT
REPORT ON CORPORATE GOVERNANCE
The Directors of the Company are pleased to present report on Corporate Governance forthe financial year ended 31st March, 2011.
PHILOSOPHY ON CODE OF GOVERNANCE
The philosophy underlying Corporate Governance seeks to create a system of "Checksand Balances" based on transparency, ensuring integrity, clarity and consistency inthe dealing of the Company with all its stakeholders. Good governance ensures that aCompany follows the best corporate practices. Implementation of good governance indicatesnot only the compliance of the laws and regulations of the land but also indicates thevalues, practices and culture of your organisation.
BOARD OF DIRECTORS
(A) Composition of the Board
The Companys Board comprises an optimum combination of Executive andNon-Executive Directors in conformity with the provisions of the listing agreement onCorporate Governance. The Company also has the optimum number of Independent Directors inaccordance with the criteria given in Clause 49 of the listing agreement. TheNon-Executive Directors brings an external and wider perspective confirming therewith indepth business deliberations and decisions advantage. The Board represents an optimum mixof professionals, knowledge and expertise.
The Managing Director subject to the superintendents and direction of the Board ofDirectors manages the business of the Company. Details of Board of Directors and theirdirectorship/membership in committees of other companies (excluding Private Limited andForeign Companies) are as under:
|Name of the Director ||Category ||Number of other directorships ||Committee Memberships |
| || || ||Chairman ||Member |
|Dr. Dinesh S. Patel ||Non executive Promoter Director ||3 || ||1 |
|Dr. Sachin Dinesh Patel ||Non executive & Promoter Director ||2 || ||1 |
|Mr. A. B Shah (Nominee of GIIC) ||Non executive & Independent ||4 || ||2 |
|Mr. J. K. Cha ||Non executive Representative of Yuhan Corpn. || || || |
|Mr. S. C. Kim ||Non executive Representative of Yuhan Corpn. || || || |
|Mr J. H. Choi ||Non executive Representative of Yuhan Corpn. || || || |
|Mr. S.S. Lee ||Non executive Representative of Yuhan Corpn. || || || |
|Mr Vijay Agarwal ||Non executive & Independent ||7 || ||4 |
|Mr Hinesh Doshi ||Non executive & Independent || || || |
|Mr. Rajneesh Anand (Managing Director) ||Executive ||1 || ||1 |
|Ms. Dharmishta N Raval ||Non executive & Independent || || || |
|Mr. Subhash C Kaushik ||Non executive & Promoter Diector ||1 || || |
(B) Details of attendance of the directors at the Board Meetings held in Financial Year2010-11 and at the last Annual General Meeting.
|Name of the Director ||Number of Board Meetings held during F.Y. 2010-11 while holding the Office. ||Number of Board Meetings attended while holding the Office. ||Attendance at last Annual General Meeting. |
|Dr. Dinesh Patel ||4 ||4 ||Yes |
|Dr. Sachin Dinesh Patel ||4 ||4 ||Yes |
|Mr. A.B Shah (Nominee of GIIC) ||4 || || |
|Mr. J. K. Cha ||4 || || |
|Mr. S.S Lee ||4 || || |
|Mr. J. H. Choi ||4 || || |
|M. S.C Kim ||4 || || |
|Mr.Rajneesh Anand (Managing Director) ||4 ||4 ||Yes |
|Mr. Vijay Agarwal ||4 ||3 || |
|Mr. Hinesh Doshi ||4 ||3 || |
|Ms. Dharmishta N. Raval ||4 ||2 || |
|Mr. Subhash C Kaushik ||3 ||1 || |
The Board meetings are generally held in Mumbai. During the financial year 2010-11,Four meetings of the Board of Directors were held on 21st May, 2010, 31st July 2010, 111hNovember 2010 and 31st January 2011.
(C) Role of Independent Directors
The Independent Director's play an important role in bringing deliberation in BoardMeeting and guide the company with their wide experience in Accountancy, Finance, Taxationand Legal Fields.
(D) Board Meetings
The Meetings of the Board of Director's are held at regular intervals of not more thanfour months in Mumbai or at other places in India as per the convenience of the Directors.These are generally scheduled well in advance. The provisions of the Companies Act, 1956and those under Clause 49 of the Listing Agreement have been followed. The Board meets atleast once a Quarter to review Performance and Financial Results. All the major decisionsare taken at the Board meeting wherein directors are provided with all materialinformation. Senior Executives of the Company are invited to attend the board meeting andprovide clarifications as and when required.
The last Annual General Meeting of the Company was held on 28th September, 2010.
Pursuant to provisions of Section 292A and Clause 49 of the Listing Agreement, theAudit Committee was formed on 27th June, 2001. The terms of reference and powers ofcommittee are in compliance with the provisions of clause 49 of the listing agreement oncorporate governance and Section 292A of the Companies Act, 1956. The Committee alsoreviews Reports of the Statutory Auditors along with the comments and action taken. SeniorExecutives are invited to attend the meeting of the Audit Committee as and when consideredappropriate. The head of Finance function regularly attends the Meeting of the AuditCommittee.
The Audit Committee consists of Mr. Vijay Agarwal Chairman, Mr.Rajneesh Anand,Dr. Sachin D. Patel and Mr. Hinesh Doshi (upto 30th October, 2010). The Committee met fourtimes during the Financial Year 2010-11. The dates of Audit Committee meetings held duringFinancial Year 2010-11 are 21st May, 2010, 31st July 2010, 11th November, 2010 and 31stJanuary 2011 and most of the members were present at all the meetings.
The Remuneration Committee of the Directors of the Company comprised of Dr. DineshPatel Chairman, Mr. Vijay Agarwal and Dr. Sachin D. Patel.
Remuneration of Directors
Mr. Rajneesh Anand, the Managing Director is the only Executive Director in the Board.The Board of Directors of the Company takes all the decisions regarding appointment andpayment of remuneration to the Directors (including Managing Director) as per therecommendation of the Remuneration Committee.
The Company is paying managerial remuneration to the Managing Director only. Thedetails of such remuneration are given herewith.
The remuneration payable to Mr. Rajneesh Anand, Managing Director of the Company asspecified hereunder, is pursuant to provisions of Section 269, Schedule XIII and otherapplicable provisions of the Companies Act, 1956.
Details of remuneration paid to the Managing Director for year 2010-11 is as under:
|Particulars ||Amount (in Rs.) (2010 11) |
|Salary ||3,00,000/- |
|Gratuity || |
|Leave Salary || |
|LTA, Medical & Other benefits || |
|Total ||3,00,000/- |
The Company has not paid any commission to the Managing Director.
In the year 2010-2011, the Company has not paid any sitting fees to the Directors.
SHARE TRANSFER AND INVESTORS GRIEVANCE COMMITTEE
The Share Transfer Committee was formed on 26th July, 2000 by the Board of Directors ofthe Company and had delegated the authority to approve transfer of shares and to attendother share transactions including transmission, transposition, split, consolidation andissue of duplicate share certificate so as to expedite the process relating thereto.During the financial year 2010-11, the Board of Directors has renamed the committee asShare Transfer & Investors Grievance Committee to look into the grievances ofinvestors in addition to approval of transfer of shares. The present members of ShareTransfer & Investors Grievance Committee are Mr. Rajneesh Anand Chairman, Dr.Sachin Dinesh Patel & Mr.Vijay Agarwal .
The committee met 10 times during the Financial Year 2010-11. For some periods therewere no share transfers, therefore the share transfer committee meetings were not held.The Minutes of the Share Transfer Committee were laid before the Board of Directors forrecord. All the valid applications for share transfer received during the year 2010-11have been approved. During the year 2010-11, Company has received complaints fromShareholders and all the complaints were resolved and no complaint is pending as on 31stMarch, 2011.
Mr. Jayapal. K
69/C, GIDC Industrial Estate,
Vapi 396 195, Dist. Valsad,
CERTIFICATE ON CORPORATE GOVERNANCE
Gujarat Themis Biosyn Limited
I have examined the compliance of conditions of Corporate Governance by the GujaratThemis Biosyn Limited for the year ended on 31st March, 2011 as stipulated in clause 49 ofthe listing agreement of the said Company with the stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of themanagement. My examination was limited to the procedures and implementations thereofadopted by the Company for ensuring the compliance of conditions of the CorporateGovernance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.
In my opinion and to the best of information and explanations provided to me, I certifythat the Company has complied with the conditions of Corporate Governance as stipulated inClause 49 of the above mentioned listing agreement.
Based on verification of the records of the Company and as certified by theCompanys Registrar and Share Transfer Agent, I state that no investor grievances arepending against the Company for more than 30 days as on 31st March, 2011.
I further state that such compliance is neither an assurance as to the future viabilityof the Company nor efficiency or effectiveness with which the management has conducted theaffairs of the Company.
| ||SANDHYA BORASE |
| ||Company Secretary |
|Date : 26th August, 2011 ||ACS 8353 |
|Place : Mumbai ||C P 4563 |