Indoco Remedies Ltd

BSE: 532612 | NSE: INDOCO | ISIN: INE873D01024 
Market Cap: [Rs.Cr.] 1,262 | Face Value: [Rs.] 2
Industry: Pharmaceuticals - Indian - Bulk Drugs & Formln

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Director's Report


Dear Members,

Your Directors are pleased to present the Sixty-Sixth Annual Report on the businessoperations of the Company together with the Audited Accounts for the financial year ended31st March, 2013.


The highlights of the performance of the Company for the year ended 31stMarch, 2013 are summarized below:

(Rs. lakhs)


Financial Year ended 31st March, 2013

Financial Year ended 31st March, 2012

Sales & Operations 64164 57622
Less: Excise Duty (1124) (745)
Net Sales 63040 56877
Other Income 90 226
Total Income 63130 57103
Profit Before Interest, Depreciation and Tax 9397 8684
Less: Finance Cost 2188 1633
Less: Depreciation & amortisation 2372 1925
Profit Before Tax 4837 5126
Less: Provision for Taxation
- Current 968 1026
- Deferred 543 366
- Earlier Years Adjustment 28
- MAT Credit Entitlement (968) (900)
Net Profit After Tax 4266 4634
Balance brought forward 11832 9876
Amount available for appropriation 16098 14510
Appropriations :
Proposed Dividend 1014 1014
Dividend Tax 172 164
Transfer to General Reserve 1500 1500
Balance carried forward 13412 11832
16098 14510

Results from Operations:

The financial year 2012-13 witnessed a slowdown in global economy with signs ofimprovement, albeit at a slower pace. Euro zone including countries like Portugal, Spainand Cyprus remained mired in recession. Prolonged non-resolution of the debt crisis in theEuro region and deferral in the recovery process of the US economy coupled with slowingdown of the emerging countries affected India's growth momentum. In addition to subduedglobal demand, policy drift and persistent inflationary pressures within the countryweakened the economic growth in India.

Inspite of the challenges and sluggish trend in the second half of the year, the IndianPharmaceutical Industry registered a decent growth of 11.9%. Your Company registeredbetter growth rate than the industry average in the domestic market and performedreasonably well in the international market.

During the year 2012-13, the total income of the Company amounted to Rs. 63130 lakhs ascompared to Rs. 57103 lakhs in the previous year. This represent 10.55% growth. The Profitbefore Tax (PBT) at Rs. 4837 lakhs as compared to Rs. 5126 lakhs in the previous yearrepresent a decline of 5.64%. After providing for Tax and MAT, the Net Profit after Tax(PAT) amounts to Rs. 4266 lakhs as against Rs. 4634 lakhs in the previous year. Thedecline in PBT & PAT is mainly due to rise in input costs.

A detailed discussion on the business performance and future outlook is included inManagement Discussion & Analysis which forms part of the Directors' Report.

Sub-division of shares and Bonus shares:

The Company on 8th May, 2012, through Postal Ballot sub-divided the nominalvalue of the share from Rs. 10/- per share to Rs. 2/- per share and subsequently issuedbonus shares to its shareholders in the ratio of 1 equity share for every 2 equity sharesheld.

Dividend & Reserves:

Your Directors are pleased to recommend a dividend of Rs. 1.10 per share @ 55%(Previous year Rs. 1.10 per share @ 55%) on the face value of Rs. 2/- each. The dividendpayout will aggregate Rs. 1013.65 lakhs (Previous year Rs. 1013.65 lakhs) and the tax ondistributed profits payable by the Company would amount to Rs. 172.27 lakhs (Previous yearRs. 164.44 lakhs).

The Directors have recommended transfer of an amount of Rs. 1500 lakhs to GeneralReserves (Previous year Rs. 1500 lakhs).

Credit Rating:

Company's working capital facilities are rated ICRA A1+ and long term borrowings arerated ICRA A+ by ICRA.

Social Initiatives

Indoco's Corporate Social responsibilities continued to be focused on promotingeducation, health and hygiene. In this connection the Company during the year underconsideration made donations of Rs. 62.57 lakhs.

In addition to the above, the Company during the year made substantial donation of freemedicines to charitable bodies for distribution among the needy.


The Company has two subsidiary companies:

1. Indoco Industrial Designers and Engineers Private Limited

2. Indoco Pharmchem Limited

In accordance with the general exemption granted by the Ministry of Corporate Affairs,Government of India, the Balance Sheet, Profit and Loss Account and other documents of thesubsidiary companies are not being attached with the Balance Sheet of the Company. Howeverthe financial information of the subsidiary companies is disclosed in the Annual Report incompliance with the said circular. The Company will make available the Annual Accounts ofthe subsidiary companies and the related detailed information to any member of the Companywho may be interested in obtaining the same. The Annual Report of the subsidiary companieswill also be kept open for inspection at the Registered Office of the Company and that ofthe respective subsidiary companies. The Consolidated Financial Statement of your Companyincludes the financial results of its subsidiary companies.

Consolidated Financial Statements :

In accordance with Accounting Standard AS-21, the Audited Consolidated FinancialStatements are provided in the Annual Report.

Corporate Governance

In compliance with the provisions of Clause 49 of the Listing Agreement, the Report onthe Corporate Governance is annexed and forms part of the Annual Report. The Report isduly certified by the Statutory Auditors of the Company whose certificate is also annexed.

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information andexplanations obtained by them, your Directors make the following statement in terms ofSection 217(2AA) of the Companies Act, 1956:

i. that in the preparation of annual accounts, the applicable accounting standards havebeen followed and no material departures have been made from the same;

ii. that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofits of the Company for that year;

iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. that the annual accounts have been prepared on a 'going concern' basis.


During the year, Mr. D. M. Sukthankar, resigned from the Directorship of the Company.His resignation was accepted by the Board with effect from 3rd November, 2012.The Board places on record its appreciation for the valuable contribution by him asIndependent Director during his tenure.

Mr. Suresh G. Kare was re-appointed as Chairman & Managing Director of the Companyfor a period of 5 years from 1st July, 2008 to 30th June, 2013.However, in February 2012 Mr. Suresh G. Kare relinquished the post of Managing Directorand was re-designated as Chairman with effect from 15th February, 2012 upto theexpiry of his term i.e. 30th June, 2013.

The Board is of the view that on account of Mr. Suresh G. Kare's vast experience andknowledge of the Pharmaceutical Industry and his commitment towards the business, hisre-appointment will immensely benefit the Company. Hence it is proposed to re-appoint himas the Wholetime Director of the Company, designated as Chairman on fresh terms &conditions including remuneration. The Board of Directors at its meeting held on 28thMay, 2013 have approved the re-appointment of Mr. Suresh G. Kare subject to approval ofshareholders at Annual General Meeting for a tenure of 5 years with effect from 1stJuly, 2013 on revised terms and conditions as stated in the explanatory statement annexedto Notice to Annual General Meeting. The members are requested to approve the resolutionNo.6 in the Notice.

In terms of provisions of the Companies Act, 1956 and the Articles of Association ofthe Company, Mr. D. M. Gavaskar and Mr. Sharad Upasani retire by rotation at theforthcoming Annual General Meeting, and being eligible offer themselves forre-appointment. The profile of directors seeking reappointment pursuant to Clause49(IV)(G)(i) of the Listing Agreement with the Stock Exchanges is included in the annualreport.


M/s. Patkar & Pendse, Chartered Accountants, hold office as Auditors till theconclusion of the ensuing Annual General Meeting, and are eligible for re-appointment.M/s. Patkar & Pendse have confirmed their eligibility as required by Section 224(1B)of the Companies Act, 1956 to act as Auditors of the Company. They have also conveyedtheir willingness to accept the office as Auditors, if re-appointed. The Audit Committeeof the Board has recommended their re-appointment.

Cost Audit

In terms of the Order issued by the Central Government under Section 233B of theCompanies Act, 1956, the Company was required to appoint cost auditors to get the audit ofthe cost records of the Company. Accordingly, for the FY 2011-12, the Company hadappointed Mr. Prakash A. Sevekari, as the Cost Auditor and from FY 2012-13 the Companyappointed M/s Sevekari Khare & Associates to get the audit of the cost records done.For the FY 2011-12, Mr. Prakash A. Sevekari was required to submit his report by 31stJanuary, 2013 and he has submitted the report on 14th January, 2013.

For the FY 2012-13, M/s Sevekari Khare & Associates would be required to submit thereport by 30th September, 2013.

For the FY 2013-14, M/s Sevekari Khare & Associates has been appointed as the costauditor by the Company. They would be required to submit the report by 30thSeptember, 2014.

Information in Terms of Section 217 (1)(e) & Section 217(2A)

Information in terms of the provision of Section 217 (1)(e) of the Companies Act, 1956,read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, as amended, is contained in Annexure-I to this report and forms part of the Report.

Information in terms of the provision of Section 217 (2A) of the Companies Act, 1956,read with Companies (Particulars of Employees) Rules, 1975 as amended, is contained inAnnexure-II to this report. However, in terms of the provisions of Section 219(1)(b) ofthe Companies Act, 1956, the said annexure has not been forwarded to the members and thosemembers interested in the said information may write to the Company Secretary at theregistered office of the Company.

Employee Relations

The employees' relation at all levels and at all units continued to be cordial duringthe year.


Your Directors wish to place on record their appreciation of the dedicated efforts byemployees at all levels. The Directors also wish to place on record their word of sincereappreciation to the bankers & financial institutions, the investors, the vendors, thecustomers, the medical profession and all other business associates for their continuedsupport.

For and on behalf of the Board of Directors
Mumbai, 28th May, 2013



To the Directors' Report

Particulars required under Section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.


(a) Details of Energy Conservation measures taken in 2012-13 :-

1. Installation of 5 star rating Air conditioners and Motors for plant machineries tosave electricity.

2. Installation of Variable Frequency Drive (VFDS) to all air handling units and plantmachineries.

3. Additional Capacitor Bank installed for APFC (automatic power factor correction)panels to maintain power factor.

4. Installation of Screw Air Compressors.

5. Utility equipments operationally controlled as per the production plans.

6. Installation of SCADA for temperature and humidity control in all warehouses, whichcontrols the consumption of utility.

(b) Additional Investments and proposals, if any, being implemented for reduction ofconsumption of energy:-

1. Rain harvesting proposal to save water.

2. Replacement of vapour absorption chillers to screw chillers for saving of electricenergy.

3. Implementation of pressure impedance balancing control valves to all air handlingsystems to control chilled water and utility.

4. Old reciprocating air compressors to be replaced by efficient screw air compressors.

(c) Impact of measures at (a) & (b) above for reduction of energy consumption &consequent on the cost of production of goods :-

1. Reduction in Energy cost.

2. Reduced Fuel and water consumption.

3. Improved air compressor efficiency.

(d) Total energy consumption and energy consumption per unit of production:


1. Power and Fuel Consumption


Current Year

Previous Year



1) Electricity
a) Purchased Units (in lakhs) 222.52 215.73
Total Amount (Rs. lakhs) 1224.49 1313.85
Rate/Unit (Rs.) 5.50 6.09
b) Own generation
i) Through diesel generator
Units (KWH’000) 1119.23 1801.60
Units per ltr. of diesel oil (KWH) 3.05 2.91
Rate/Unit (Rs.) 14.29 14.44
ii) through steam turbine/generator
Units Nil Nil
Units per ltr of fuel oil/gas
Cost/Unit (Rs.)
2) Coal
Qty Nil Nil
Total cost
Average rate
3) Furnace Oil
Qty (Kilo litres) 322.41 350.08
Total Amount (Rs. lakhs) 146.88 137.62
Average rate (Rs.) 45.56 39.31
4) Others/internal generation (briquettes, cashew seeds etc.)
Quantity NIL NIL
Total Cost (Rs. lakhs) 151.14 167.48
Rate/Unit (Rs.) NIL NIL

2. Consumption per unit of production

On account of the manufacture of products with varied pack size/units of measures, itis not practicable to express the consumption of power per unit of production.


Efforts made in technology absorption as per Form B given below :-


Research and Development (R&D)

1. Specific areas in which Research and Development are carried out by the Company are:

Development of manufacturing processes and analytical methods for APIs, intermediatesand finished dosages, including development of non-infringing route ofsynthesis/formulations and Novel New Drug Delivery System (NDDS). Development of Complexgenerics involving multi unit pellet systems (MUPS) and enteric coated pellets for highlyvariable drugs are also undertaken. New developments for catering to the Dental range ofproducts for treatment of sensitive teeth are also in the pipeline.

2. Benefits derived as a result of above efforts are

Creation of the Company's own intellectual property which can be exploited commerciallyand for preventing competitors from blocking ideas for design around manufacturingprocesses. R&D efforts gives an edge over the competitors in the market place in termsof early entry and better pricing. The Company's patent portfolio consists of 7 grantedformulation patents and 60 patent applications applied for.

3. Future plan of action

Development of non-infringing API manufacturing processes, patentable Novel DrugDelivery System (NDDS) formulations, filing Para IV and 505(b)2 applications using newtechnology platforms. Developing an expertise in the analytical methods development foroffering value added services for Isolation and Characterization of Impurities,extractables, leachables, polymorphism and lyophilization study.

4. Expenditure on R & D:

(Rs. lakhs)

Sr. No. Particulars

Current Year

Previous Year



1 Capital 434.83 651.77
2 Recurring 1290.24 1080.32
3 Total 1725.07 1732.09
4 Total R&D expenditure as a % of total net sales 2.74 3.04

Technology absorption, adaptation and innovation

1. Efforts, in brief, made towards technology absorption, adaptation and innovation andbenefits derived as a result of such efforts

During the year the following processes were successfully implemented:

a) Rasagiline Mesylate - The Technology for synthesizing this molecule wasdeveloped in-house by using a novel resolution process and was implemented successfully atthe plant level.

b) Quetiapine - A process for manufacturing of Quetiapine Fumarate wasimprovised at the R&D and scaled up at the plant level; the new process is costeffective as well as environmentally benign.

2. In case of imported technology (imported during the last 5 years reckoned from thebeginning of the financial year), following information may be furnished:

a) Technology Imported - None
b) Year of import - N.A.
c) Has technology been fully absorbed - N.A.
d) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action - N.A.


(a) Activities relating to exports; initiatives taken to increase exports; developmentof new export markets for products and services; and export plans:

The Company participates in International Conferences and exhibitions in US, Europe,Japan and other countries. Such participation helps us in expanding our network ofcustomers. During the year the Company continued with its efforts of filing own Dossiersin Europe through DCP (Decentralization Procedure) route and filing own ANDA's with USFDA.The product basket has been expanded and scope of services offered is also extended toanalytical and synthesis of impurities, reference standards and building blocks of NCEsfor MNCs. The Company plans to move up in the value chain by offering newproducts/services and expanding into newer territories is well on track.

(b) Total foreign exchange used and earned

(Rs. lakhs)
Sr. No. Particulars

Current Year

Previous Year



1 Total foreign exchange earned (CIF) 21871.04 20172.35
2 Total foreign exchange used 4303.24 4850.23

Peer Comparison

Company Market Cap
(Rs. in Cr.)
Sun Pharma.Inds. 129,305.02 0.00 16.60 112.59 6.6 8.3 0.01
Dr Reddy's Labs 43,477.56 23.63 5.59 14.62 17.5 20.0 0.25
Cipla 32,164.17 23.32 3.63 13.35 18.4 23.4 0.06
Cadila Health. 19,914.04 27.34 6.84 22.22 18.2 14.8 0.56
Ranbaxy Labs. 19,859.54 0.00 136.22 72.87 0.0 0.0 2.38
Aurobindo Pharma 16,071.85 17.76 5.47 7.02 18.3 14.8 1.03
Glenmark Pharma. 15,796.04 43.02 6.26 28.85 16.4 14.3 0.23
Piramal Enterp. 10,394.41 0.00 0.98 60.64 -2.1 1.2 0.28
Ipca Labs. 9,979.27 24.00 6.36 12.28 23.4 24.9 0.40
Torrent Pharma. 9,361.25 13.53 5.67 8.14 37.0 32.1 0.43
Biocon 9,092.00 31.70 4.12 12.28 12.8 14.6 0.07
Wockhardt 6,868.73 20.88 8.39 23.16 63.8 31.3 0.66
Alembic Pharma 5,085.73 23.02 11.06 8.35 38.4 31.8 0.66
Mylan Lab. 3,273.19 5.13 1.32 0.00 29.4 30.0 0.69
Strides Arcolab 2,702.99 2.49 0.55 46.94 7.3 8.9 0.56

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Key Information

Key Executives:

Suresh G Kare , Chairman  

D M Gavaskar , Director  

Sundeep V Bambolkar , Joint Managing Director  

Aditi Kare Panandikar , Managing Director  

Company Head Office / Quarters:
Indoco House 166 C S T Road,
Santacruz (East),
Phone : 91-022-26541851-55
Fax : 91-022-26523067/66936241
E-mail :
Web :

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