Your Directors are pleased to present the Sixty-Eighth Annual Report on the business operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2015 and on the state of affairs of the Company.
The highlights of the performance of the Company for the year ended 31st March, 2015 is summarized below:
|Particulars||Financial Year ended||Financial Year ended|
|31st March, 2015||31st March, 2014|
|Sales & Operations||86485||74045|
|Less: Excise Duty||(1121)||(1274)|
|Add: Other Income||174||175|
|Profit Before Interest, Depreciation & Tax||16693||12182|
|Less: Finance Cost||1034||1880|
|Less: Depreciation & Amortisation||4711||3091|
|Profit Before Tax||10948||7211|
|Less: Provision for Taxation|
|- Earlier Years Adjustment||256||338|
|- MAT Credit Entitlement||(299)|||
|Net Profit After Tax||8281||5790|
|Balance brought forward||16193||13412|
|Amount available for appropriation||24474||19202|
|- Proposed Dividend||1474||1290|
|- Dividend Tax||300||219|
|- Adjustment relating to Fixed Assets||471|||
|- Transfer to General Reserve||1500||1500|
|- Balance carried forward||20729||16193|
Results from Operations:
During the year 2014-15, the total income of the Company amounted to Rs 85,538 lakhs as compared to Rs 72,946 lakhs in the previous year. This represents a 17.30% growth. The Profit before tax (PBT) at 10,948 lakhs as compared to Rs 7,211 lakhs in the previous year represents a 51.80% growth. After providing for Tax and MAT, the Net Profit (PAT) amounted to Rs 8,281 lakhs as against Rs 5,790 lakhs in the previous year. The increase in PBT & PAT is mainly due to reduction in input and other costs as well as improvement in product and business mix.
In July, 2014, the Company purchased the remaining shares of Xtend Industrial Designers and Engineers Private Limited to make it a 100% subsidiary of the Company.
In April, 2015, the Company acquired from Piramal Enterprise Limited, their Clinical Research Division, located in Hyderabad. The Division is equipped with a 98 bed facility, including a four-bed ICU, state-of-the-art analytical lab and capabilities of eCTD submission. It also has GCP certification from UK-MHRA and also has regulatory approvals from several bodies including USFDA. The acquisition would reduce the Company's dependability to outsource bio-equivalence studies. This will not only reduce cost but also ensure time-bound outcome of studies and add pace to the Company's existing R&D efforts.
A detailed discussion on the business performance and future outlook is included in Management Discussion & Analysis which forms part of the Directors' Report.
Dividend & Reserves:
Your Directors are pleased to recommend a dividend of Rs 1.60 per share (80%) on the face value of Rs 2/-each (Previous Year Rs 1.40 per share (70%). The dividend payout will aggregate Rs 1,474.41 lakhs (Previous year: Rs 1,290.10 lakhs) and the tax on distributed profits payable by the Company would amount to Rs 300.15 lakhs (Previous year Rs 219.25 lakhs).
The Directors have recommended transfer of an amount of Rs 1,500 lakhs to General Reserves (Previous year Rs 1,500 lakhs).
Energy Conservation/Technology Absorption and Foreign Exchange Earnings and Outgo:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A".
The paid up Equity Share Capital as on 31st March, 2015 was Rs 18.43 crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.
As on 31st March, 2015 other than Mr. Suresh G. Kare - Chairman Ms. Aditi Panandikar - Managing Director Mr. Sundeep V. Bambolkar - Jt. Managing Director none of the Directors of the Company held shares of the Company
Cash and cash equivalent as at 31st March, 2015 was 1,528.17 crore. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
The Company has not accepted any Deposit covered under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposit) Rules, 2014.
Particulars of Loans, Guarantees and Investments:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
ICRA has revised the Company's long term borrowings rating upwards from A+ to AA- and reaffirmed the short term borrowing rating as A1+.
These ratings are considered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.
Corporate Social Responsibility:
As required u/s 135 of the Companies Act, 2013, the Board has approved a Policy for implementing the Corporate Social Responsibility (CSR).
During the year the Company undertook a number of CSR initiatives which is mainly focused on promoting education, health and public hygiene. In this connection, the Company during the year under consideration spent an amount of Rs 133.93 Lakhs. A detailed list of the CSR expenditure made is annexed herewith as
In addition to fulfilling its CSR obligations, the Company during the year made substantial donations of free medicines to charitable bodies for distribution among the needy including the victims of HUD HUD cyclone.
Internal Control Systems and their Adequacy:
The Company has an Internal Control System, commensurate with the size of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report, significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
The Company's Internal Auditor also monitors and evaluates the internal control system and submits Quarterly Reports which are placed before the Audit Committee of the Board.
The Board has also approved a Risk Management Policy. The policy is available on the Company Website at: http://www.indoco.com/policies/the_risk_management_policy.pdf
Whistle Blower Policy:
The Company has a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is posted on the website of the Company: http://www.indoco.com/policies/ whistle_blowers_policy.pdf
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15:
|- No. of complaints received:||Nil|
|- No. of complaints disposed off:||Nil|
The Company has two subsidiary companies:
1. Xtend Industrial Designers and Engineers Private Limited
2. Indoco Pharmchem Limited
Statement pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act 2013, read with rule 5 of Companies (Accounts) Rules, 2014 in the prescribed Form AOC-1 relating to subsidiary Companies is given herein below:
|Name of the Subsidiary||Xtend Industrial Designers and Engineers Pvt. Ltd||Indoco Pharmchem Ltd.|
|Reporting period for the subsidiary||1st April 2014 - 31st March 2015||1st April 2014 - 31st March 2015|
|Reporting Currency||INR (Rs)||INR (Rs)|
|Reserves and Surplus||60.92||(1.00)|
|Profit before Taxation||2.58||(0.34)|
|Provision for Taxation||0.89||0|
|Profit after Taxation||1.69||(0.34)|
|% of shareholding||100%||100%|
Note : The above statement may be deemed to form a part of the financial statement.
The Company has one associate LLP:
Indoco Analytical Solutions LLP
There was no activity in the associate LLP - Indoco Analytical Solutions LLP. The Salient Financial Statement is given herein below:
|Name of the Associate||Indoco Analytical Solutions LLP|
|Latest Audited Balance Sheet Date||31st March 2015|
|Share of Associate held by the Company as|
|on 31st March 2015|
|ii) Amount of Capital Contributed||4.90|
|iii) Extent of Holding||98%|
|Description of how there is significant influence||The Company holds 98% of the capital of the LLP|
|Reason why the associate is not consolidated||There was no business activity during the Financial Year|
|Net worth attributable to Shareholding as per latest Audited Balance Sheet||4.18|
|Profit/(Loss) for the Year|
|i) Considered in Consolidation||NIL|
|ii) Not considered in Consolidation||(0.21)|
The audited financial statements, the Auditors Report thereon and the Board's Report for the year ended 31st March, 2015 for each of the Company's subsidiaries viz. Xtend Industrial Designers and Engineers Pvt. Ltd, Indoco Pharmchem Ltd. are available on the Company website : www.indoco.com.
The Company will make available, the Annual Accounts of the subsidiary Companies to any Member of the Company who may be interested in obtaining the same.
No Company has become or ceased to be a Subsidiary, Joint Venture or Associate Company of Indoco Remedies Limited during the year under consideration.
Consolidated Financial Statements:
The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.
In terms of provisions of the Section 152(6) of the Companies Act, 2013, Mr. Sundeep V Bambolkar retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himself for re-appointment. The profile of director seeking reappointment pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.
Dr. Anand Nadkarni was appointed as Non Executive Director on 28th May, 2014. His appointment was confirmed at the 67th Annual General Meeting held on 30th July, 2014. In the meeting held on 23rd March, 2015, Mr. Sundeep V Bambolkar was designated as CFO of the Company. Mr. Sundeep V. Bambolkar has now been designated as Jt. Managing Director and CFO.
Other than this No Director or Key Managerial Personnel (KMP) was appointed or has resigned during the year under consideration.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
During the year 5 Board Meetings were held and the gap between two Board Meetings did not exceed 120 days. Details of the Board Meeting are given in the Report on Corporate Governance.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, CSR Committee, Nomination & Remuneration Committee and Stakeholder Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, KMP and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
1. The Board affirms that the remuneration paid is as per the Remuneration Policy of the Company.
2. The percentage increase in the remuneration of President (Finance) & Company Secretary in the financial year was 14%.
3. The percentage increase in the median remuneration of employees in the financial year 9.12%.
4. Average percentage increase in salaries of non-managerial employees was 16% as compared to average percentage increase in managerial remuneration which was 14%.
5. Number of Permanent employees on the rolls of the company as on 31st March, 2015 5033 Nos.
6. The Ratio of the remuneration paid to each Director to the median remuneration of the employees of the Company during the year under consideration:
|Name of Director||Remuneration Paid||Median Remuneration||Ratio|
|Mr. Suresh G. Kare||1,85,50,177||1,76,004||1:105|
|Ms. Aditi Panandikar||1,12,09,815||1,76,004||1:64|
|Mr. Sundeep V. Bambolkar||99,53,262||1,76,004||1:56|
|(Jt. Managing Director)|
|Mr. Rajiv P. Kakodkar||1,70,000||1,76,004||1:0.97|
|Dr. Anil M. Naik||1,65,000||1,76,004||1:0.94|
|Mr. Sharad P. Upasani||1,00,000||1,76,004||1:0.57|
|Mr. D. M. Gavaskar||90,000||1,76,004||1:0.51|
|Dr. Anand Nadkarni||80,000||1,76,004||1:0.45|
|(Non Executive Director)|
7. There has been no increase in the remuneration paid to the Executive Directors as well as the sitting fees paid to the Independent Directors and Non Executive Directors. During the year there has been an increase in Sales by 17.30% and increase in PAT by 43%. Taking into consideration the above increase as well as performance of individual employees, the average increase in remuneration for the year is 8%.
8. Comparison of remuneration of the Key Managerial Personnel against the performance of the Company:
i) Change in sales of the Company : 17.30% increase
ii) Change in the PAT of the Company: 43% increase
iii) Change in the remuneration of Mr. Sunil D. Joshi (KMP) 14%
9. Variation in Market capitalization
|2014 :||1296 cr|
|2015 :||3352 cr|
|10. Price earning Ratio as on 31st March 2015:||40.47|
|Price earning Ratio as on 31st March 2014:||22.39|
11. Percentage Increase in market quotation in the shares of the Company in comparison to the rate at which the Company came out with the last public issue:
|Particulars||March 31, 2015||January 14, 2005||January 14, 2005*||% change|
|Market Price (BSE)||363.10||245.00||32.67||1011.42|
|Market Price (NSE)||363.80||245.00||32.67||1013.56|
* Adjusted for Sub-division and Bonus issue in 2012
Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013:
i. that in the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
ii. that 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 profits of the Company for that year;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a 'going concern' basis;
v. that the Company has laid down internal financial controls and such internal financial controls are adequate and operating effectively;
vi. that proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively;
Related Party Transactions:
All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior approval of the Audit Committee is obtained on a yearly basis specifying the upper ceiling as to amount for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the prior approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.
The particulars as required under the Companies Act, 2013 is furnished in Annexure C to this report.
Significant and Material Orders passed by the Regulators or Courts:
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
The Members at the Sixty Seventh Annual General Meeting approved the appointment of M/s. Patkar & Pendse, Chartered Accountants, (Firm Registration No. 107824W), as Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 to hold office for a period of 3 years till the conclusion of the Seventieth Annual General Meeting to be held in 2017.
M/s Patkar and Pendse have confirmed that they continue to be eligible under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for continuing as Auditors of the Company. As required by the Companies Act, 2013, the Members are requested to ratify their appointment as Auditors for the FY 2015-2016.
In terms of the Order issued by the Central Government under Section 148 of the Companies Act, 2013 the Company was required to appoint cost auditors to get the audit of the cost records of the Company done by a member of the Institute of Cost & Works Accountants of India (ICAI).
For FY 2014-2015, the Company had appointed M/s Sevekari, Khare & Associates (Firm Registration No. 000084) to get the audit of the cost records done. They would be required to submit the reports by 29th September, 2015.
As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member's ratification for the remuneration payable to M/s Sevekari, Khare & Associates, Cost Auditors is included at Item No. 5 of the Notice convening the Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed CS Ajit Sathe- Proprietor of M/s A. Y. Sathe & Co. Company Secretary in Practice (Registration No. FCS2899/COP738) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure D".
In compliance with the provisions of Clause 49 of the Listing Agreement, the Report on the Corporate Governance is annexed and forms part of the Annual Report. The Report is duly certified by the Statutory Auditors of the Company whose certificate is also annexed.
Extract of the Annual Return:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as
Particulars of Employees:
The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is provided in the Corporate Governance Report.
The employees' relation at all levels and at all units continued to be cordial during the year.
Your Directors wish to place on record their appreciation of the dedicated efforts by employees at all levels. The Directors also wish to place on record their word of sincere appreciation to the bankers & financial institutions, the investors, the vendors, the customers, the medical profession and all other business associates for their continued support.
|For and on behalf of the Board of Directors|
|SURESH G. KARE|
|Mumbai, 27th May, 2015|
ANNEXURE-A TO THE DIRECTORS' REPORT
A) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
Particulars required under Section 134(3)(m) of the Companies Act, 2013, read with the Rules 8(3) of the Companies (Account) Rules, 2014.
(a) Steps Taken or impact of conservation of energy during 2014-2015.
1. Human m
|30-Jul-15||Indoco Remedies Q1 net profit at Rs. 20.3 crore|
|27-May-15||Indoco Remedies net profit at Rs. 18.7 crores|
|01-Apr-15||Indoco Remedies acquires Piramals Clinical Research Division|
|01-Apr-15||Entering high growth phase|
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) Kalina,
Phone : Maharashtra-91-022-26541851-55 / Maharashtra-
Fax : Maharashtra-91-022-26523067/66936241 / Maharashtra-
E-mail : firstname.lastname@example.org
Web : http://www.indoco.com
|Scheme Name||No. of Shares|
|DSP BR Micro-Cap Fund (G)||29,13,658|
|UTI-Mid Cap Fund (G)||17,37,558|
|Reliance Pharma Fund (G)||10,84,077|
|SBI Magnum Midcap Fund (G)||6,98,057|
|SBI Tax Advantage Fund - Series I (G)||6,78,105|