Indoco Remedies Ltd

BSE: 532612 | NSE: INDOCO | ISIN: INE873D01024 
Market Cap: [Rs.Cr.] 3,359.79 | Face Value: [Rs.] 2
Industry: Pharmaceuticals - Indian - Bulk Drugs & Formln

Director's Report

Dear Members,

Your Directors are pleased to present the Sixty-Seventh Annual Report on the businessoperations of the Company together with the Audited Accounts for the financial year ended31st March, 2014 and on the state of affairs of the Company.


The highlights of the performance of the Company for the year ended 31st March, 2014 issummarized below:

(Rs. lakhs)
Particulars Financial Year ended Financial Year ended
31st March, 2014 31st March, 2013
Revenue from Operations (Gross) 74045 64163
Less: Excise Duty (1274) (1124)
Revenue from Operations (Net) 72771 63039
Add: Other Income 175 150
Total Income 72946 63189
Profit Before Finance Cost, Depreciation & Tax 12182 9396
Less: Finance Cost 1880 2187
Less: Depreciation & Amortisation 3091 2372
Profit Before Tax 7211 4837
Less: Provision for Taxation
- Current 1511 968
- Deferred (428) 543
- Earlier Years Adjustment 338 28
- MAT Credit Entitlement (968)
Net Profit After Tax 5790 4266
Balance brought forward 13412 11832
Amount available for appropriation 19202 16098
Appropriations :
Proposed Dividend 1290 1014
Dividend Tax 219 172
Transfer to General Reserve 1500 1500
Balance carried forward 16193 13412
19202 16098

Results from Operations:

The FY 2013-14 under consideration witnessed a continued slowdown in the Indianeconomy. Delays in project clearances and difficulties in achieving the financial closureaffected the industry resulting in sluggish growth. Added to this was higher inflation andadverse climatic conditions resulting in slowdown in agriculture. The cumulative impactwas lower industrial production and slower growth in GDP. In the pharmaceutical industryin particular there was confusion because of lack of clarity due to introduction of NPPAfor NLEM Products which resulted in less than expected performance for many companies.Internationally also the Indian pharmaceutical companies faced a lot of challenges fromregulatory authorities in various countries resulting in the lower growth of business.However, we were proactive to take effective steps to overcome these difficulties as aresult of which our overall performance was not affected to a large extent.

During the year 2013-14, the total income of the Company amounted to Rs.72946 lakhs ascompared to Rs.63189 lakhs in the previous year. This represents a 15.44% growth. TheProfit before Tax (PBT) at Rs.7211 lakhs as compared to Rs.4837 lakhs in the previous yearrepresenting a 49.08% growth. After providing for Income Tax and MAT, the Net Profit AfterTax (PAT) amounts to Rs.5790 lakhs as against Rs.4266 lakhs in the previous year. Theincrease in PBT & PAT is mainly due to reduction in input and other costs.

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

Dividend & Reserves:

Your Directors are pleased to recommend a dividend of Rs.1.40 per share on the facevalue of Rs.2/- each (70%). The dividend payout will aggregate Rs.1290.10 lakhs (Previousyear: Rs.1013.65 lakhs) and the tax on distributed profits payable by the Company wouldamount to Rs.219.25 lakhs (Previous year Rs.172.27 lakhs). The Directors have recommendedtransfer of an amount of Rs.1500 lakhs to General Reserves (Previous year Rs.1500 lakhs).

Credit Rating:

Company's working capital facilities are rated A1+ and long term borrowings are ratedA+ by ICRA. A1+ rating indicates highest credit quality rating and A+ rating indicatesadequate credit quality rating.

Social Initiatives

Indoco's Corporate Social responsibilities continue to be focused on promotingeducation, health and hygiene. In this connection the Company during the year underconsideration made donations of Rs.45.51 lakhs. In addition to the above, the Companyduring the year made substantial donation of free medicines to charitable bodies fordistribution among the needy.


The Company has two subsidiary companies:

1. Xtend Industrial Designers and Engineers Pvt. Limited (Formerly known as IndocoIndustrial Designers and Engineers Pvt. 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 members of theCompany who may be interested in obtaining the same. The Annual Report of the subsidiarycompanies will also be kept open for inspection at the Registered Office of the Companyand that of the respective subsidiary companies. The Consolidated Financial Statement ofyour Company includes 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.


The Company at its Board Meeting held on 28th May, 2014, appointed Dr. Anand Nadkarnias Non Executive Director of the Company liable to retire by rotation. Dr. Anand Nadkarniis a Consultant Psychiatrist and a Corporate Trainer and Human Resource Consultant for anumber of major corporate organizations. The Board considers that the appointment of Dr.Anand Nadkarni would be of immense benefit to the Company. Dr. Anand Nadkarni holds officeup to the date of the ensuing Annual General Meeting. The Company has received requisitenotice in writing from a member proposing Dr. Anand Nadkarni for appointment as a NonExecutive Director.

Your Directors have proposed to alter the terms of appointment of Ms. Aditi Panandikar,Managing Director and Mr. Sundeep V. Bambolkar, Jt. Managing Director so as to make themDirectors retiring by rotation for reasons as stated in the Explanatory Statement to theNotice of 67th Annual General Meeting of the Company (forming part of this Annual Report)pursuant to Section 102 of the Companies Act, 2013.

It has been proposed to make the composition of the Board in line with Section 152 ofthe Companies Act, 2013 on account of provisions of Section 152(6) of the Companies Act,2013. Accordingly Independent Directors are being reappointed for a period of 5 years fromthe date of the AGM and they will not be liable to retire by rotation.

The profile of directors seeking reappointment pursuant to Clause 49(IV)(G)(i) of theListing Agreement with the Stock Exchanges is therefore included in the annual report.


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 read with Section 139 of the Companies Act, 2013 to act asAuditors of the Company. They have also conveyed their willingness to accept the office asAuditors, if re-appointed. The Audit Committee of the Board has recommended theirre-appointment for a period of 3 years from the conclusion of the forthcoming AnnualGeneral Meeting till the conclusion of the Seventieth Annual General Meeting.

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 done by a member of the Institute of Cost & WorksAccountants of India (ICAI). Accordingly for FY 2012-2013, the Company had appointed M/s.Sevekari, Khare & Associates of the ICAI as the Cost auditor to get the audit of thecost records done. For the Financial year 2012-13 M/s. Sevekari, Khare & Associateswas required to submit their report by 27th September, 2013 and they have submitted thereport on 6th September, 2013. For the financial year 2013-14, M/s Sevekari, Khare &Associates would be required to submit the reports by 27th September, 2014.

For the financial year 2014-15, M/s Sevekari, Khare & Associates has been appointedthe Cost auditor by the Company. They would be required to submit the reports by 27thSeptember, 2015.

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



Place: Mumbai

Date: 28th May, 2014.


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 2013-14

1. Replacement of Reciprocating and Vapour absorption chiller to Screw chiller to saveelectricity and maintenance cost.

2. Human motion sensors installed for air conditions and lamps for various locations tosave electricity.

3. Installation of LED lamps in various departments to save electricity.

4. Installation of sophisticated Demineralised plant to reduce chemical cost andconservation of water.

5. Installation of additional Screw air compressors.

6. Condensate water recovery of process steam and utilizing it as a feed water forboiler.

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

1. Feasibility of gas as a fuel for boiler to reduce stack emission and cost benefit.

2. Installation of solar system to generate electricity for plant lighting purpose.

3. Rain harvesting to save rain water.

4. Replacement of pending reciprocating air compressor to Screw air compressor.

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

1. Reduction in Energy cost.

2. Reduced Fuel and water consumption.

3. Improved air compressor efficiency.

4. Reduction of air pollution

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


1. Power and Fuel Consumption

Particulars Current Year Previous Year
2013-14 2012-13
1) Electricity
a) Purchased Units (in lakhs) 239.30 222.52
Total Amount (Rs. lakhs) 1338.74 1224.49
Rate/Unit (Rs.) 5.59 5.50
b) Own generation
i) Through diesel generator
Units (KWH’000) 908.37 1119.23
Units per ltr. of diesel oil (KWH) 2.84 3.05
Rate/Unit (Rs.) 20.86 14.29
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) 410.87 322.41
Total Amount (Rs.lakhs) 219.98 146.88
Average rate (Rs.) 53.54 45.56
4) Others/internal generation (briquettes, cashew seeds etc.)
Quantity NIL NIL
Total Cost (Rs.lakhs) 158.08 151.14
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:


Research and Development (R&D)

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

Development of Complex Ophthalmic Formulations like Nanosuspensions, Ophthalmic Gels,High viscosity combination products are in progress. Ophthalmic ointments and emulsionsand First-To-File projects are also in the pipeline of development projects.

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 give an edge over the competitors in the market place in termsof early entry and better pricing. The Company's patent portfolio consists of 4 grantedformulation patents and 20 patent application applied for

3. Future plan of action

The Company intends to file multiple Para IV applications by using non-infringingstrategies for different dosage forms and thereby patenting innovating ideas to create ourown intellectual property. The Company has

- Filed multiple patent applications in India and two PCT applications and plans toenter Europe and USA for the same.

- Has 3-4 Para IV applications in pipeline and also has plans to file with our partnersin the USA, FTF Para IV applications for ophthalmic products.

- Has started scrutinizing different patented and off-patented potential molecules for505(b)(2) applications for the USA market.

- Has plans to launch in the coming years multiple molecules in Europe 4. Expenditureon R & D:

(Rs. lakhs)
Particulars Current Year Previous Year
2013-14 2012-13
1 Capital 310.60 434.83
2 Recurring 1442.86 1290.24
3 Total 1753.46 1725.07
4 Total R&D expenditure as a % of total net sales 2.41 2.74

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 weresuccessfully implemented: a) Domperidone base and maleate: The Technology for synthesizingthis molecule was developed in-house and successfully implemented at plant level.

b) Betaxolol Hydrochloride-The process for manufacturing of Betaxolol Hydrochloride wasimproved at R&D and scaled up at plant level with better yield and quality. c)Fabuxostat: The technology was developed inhouse at our R&D. The product is undercommercialization. d) Olopatadine HCl, bromfenac Sodium and Brimonidine Tartrate: Thebatch size for these API's was scaled from existing 2 kgs to 20 kgs for Olopatadine HCl, 1kg to 2 kg for Bromfenac Sodium and 0.8 kg to 5 kg for Brimonidine Tartrate to cater theincreased market demands.

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 Companyparticipates in International Conferences and exhibitions in US, Europe, Japan and othercountries. Such participation helps us in expanding our network of customers. During theyear the Company continued with its efforts of filing own Dossiers in Europe through DCP(Decentralization Procedure) route and filing own ANDA's with USFDA. The product baskethas been expanded and scope of services offered is also extended to analytical andsynthesis of impurities, reference standards and building blocks of NCEs for MNCs. TheCompany plans to move up in the value chain by offering new products/services andexpanding into newer territories is well on track.

(b) Total foreign exchange used and earned

(Rs. lakhs)
Particulars Current Year Previous Year
2013-14 2012-13
1 Total foreign exchange earned (CIF) 25434.60 21871.04
2 Total foreign exchange used 5490.76 4303.24

For and on behalf of the Board of Directors



Place: Mumbai

Date: 28th May, 2014.

Futures & Options Quote
Future Data Not present
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 : Maharashtra-91-022-26541851-55 / Maharashtra-
Fax : Maharashtra-91-022-26523067/66936241 / Maharashtra-
E-mail :
Web :


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