Fem Care Pharma Ltd merged Directors Report

FEM CARE PHARMA LIMITED ANNUAL REPORT 2008-2009 DIRECTORS REPORT TO THE MEMBERS OF The Directors have pleasure in presenting the 23rd Annual Report of the company together with audited accounts for the year ended 31st March, 2009 (Rs. In Lacs) Consolidated Current Year Previous Year Sales including other Income 10927.53 9481.64 Profit Before Tax and Exceptional Items 1409.34 1208.35 Profit Before Tax 1243.13 920.37 Profit After Tax 1072.21 801.73 Add: Balance brought forward from previous year 1523.98 1014.60 Surplus Available for Appropriations 2589.03 1816.33 Appropriations Proposed Final Dividend Nil 210.57 Tax on Dividend Nil 35.79 Transfer to General Reserve Nil 46.00 Balance Transferred to Balance Sheet 2589.03 1523.98 In the face of an intense competitive scenario and despite difficult economic conditions, your Companys business during the year grew in double digits. Your Company had to cope with the challenges of higher expenditure on advertisement and sales promotion to gain access into modern trade. Sales for the year increased by 14 per cent at Rs. 106.57 crore as against Rs. 93.00 crore. The profit after tax for the financial year 2008-09 grew by 33 per cent at Rs. 10.72 crore as against Rs. 8.01 crore in the previous year. OPEN OFFER TO ACQUIRE EQUITY SHARES OF THE COMPANY As the Shareholders maybe aware, Dabur India Limited (Acquirer) has entered into Share Purchase Agreement dated November 21, 2008, (SPA) with existing promoters of the Company to acquire 25,46,596 Equity Shares at a price of Rs. 800 per Share constituting 72.15% of the equity shares capital of the Company. As the aggregate equity stake of the Acquirer in the paid up equity share capital of the company, pursuant to the acquisition, will be more than the stipulated threshold of 15%, in compliance with regulation 10 and 12 of the SEBI Takeover Regulations, the Acquirer made a open offer to public shareholders to acquire 7,05,880 equity shares of the company at a price of Rs. 800 each, which closed on May 26,2009. DIVIDEND No dividend is being proposed on Equity Shares in order to conserve cash to meet the future growth plans of the Company. Your Director do not recommend any dividend. EMPLOYEE RELATIONS Relations between the employees and management continued to be cordial during the year. TRADE RELATIONS Your Directors wish to record appreciation of the continued unstinted support and co-operation from its retailers, stockists, suppliers of goods/services, clearing and forwarding agents and all others associated with it. Your Company will continue to build and maintain strong links with its business partners. CORPORATE GOVERNANCE Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company complied with the provisions of Clause 49 of the Listing Agreement with the stock exchange which relates to corporate governance. A separate section on corporate governance together with a certificate from Practising Company Secretary forms a part of this Annual Report. SUBSIDIARY COMPANIES In terms of Section 212 of the Companies Act, 1956, (the Act) the Accounts together with the Auditors Report of your Companys subsidiaries Jaquline Inc. forms a part of this Report. In line with the provisions of the Accounting Standards prescribed by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the stock exchanges, the duly audited Consolidated Financial Statement has been prepared after considering the financial statements of your Companys subsidiaries Jaquline Inc. DEPOSITS Your Company has not invited or renewed deposits from the public / shareholders in accordance with Section 58A of the Act. ENERGY, TECHONOLOGY AND FOREIGN EXCHANGE Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1) (e) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988is given in Annexure A and forms part of this Report. PARTICULARS OF EMPLOYEES The Particulars as required under Section 217 of the Companies Act,1956read with the Companies (Particulars of Employees) Rules, 1975 are set out in the Annexure B of this report. DIRECTORS RESPONSIBILITY STATEMENT The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substances of transactions carried out during the year under review and reasonably present your Companys financial condition and results of operations. Your Directors confirm that: (i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any; (ii) the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2009 and of the profit of your Company for the year ended on that date; (iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities; (iv) the Annual Accounts of your Company have been prepared on a going concern basis. DIRECTORS In accordance with the Articles of Association of your Company Mr. D.B Khade retire from office by rotation and being eligible, offer themselves for re-appointment. AUDITORS M/s. S V Ghatalia & Associates, Chartered Accountants, Mumbai statutory auditors of the Company retire and offer themselves for re-appointment as the statutory auditors of the company pursuant to section 224 of the Companies Act,1956. COST AUDITORS Pursuant to the provisions of Section 233B of the Act,your Directors have reappointed M/s. C Sahoo & Co., Cost Accountants, Mumbai as the Cost Auditor to conduct the cost audit of your Company, subject to the approval of the Central Government. APPRECIATION Your Directors wish to place their sincere thanks to the Union Government and the Governments of Maharashtra and Himachal Pradesh, as also to all the Government agencies, banks, financial institutions, customers, shareholders, employees, vendors and other related organisations who,through their continued support and co-operation, have helped, as partners, in your Companys progress. For and on behalf of the Board Sunil H. Pophale Chairman & Managing Director Mumbai, June 10, 2009. ANNEXURE - A DISCLOSURES OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988. A. CONSERVATION OF ENERGY: a) Energy Conservation Measures taken - Installation of Temperature Controller for optimum use of energy - Monitoring closely high energy consuming equipment - Maintenance of the machine as per schedule. b) Additional investments and proposals if any, being implemented for reduction of consumption of energy - Solar heater will provided for water heating c) Total energy consumption and energy consumption per unit of production as per FORM-A of this Annexure. B. TECHNOLOGY ABSORPTION: Efforts made in technology absorption as per FORM-B of this Annexure. C. FOREIGN EXCHANGE EARNINGS AND OUTGO: The information on foreign exchange earnings and outgo is contained in Schedule 21 FORM - A Information under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988and forming part of the Directors Report for the year ended 31st March, 2009. Unit of Year ended 31st Year ended 31st measurement March, 2009 March, 2008 A) Power and Fuel Consumption 1. Electricity Purchased Units 000 Kwhr. 1336 844 Total Amount Rs. 000 7038 4435 Rate/Unit Rs./Kwhr. 5.27 5.26 Self-generated (see note 1below) Units 000 Kwhr. 94.30 62.15 Total Amount Rs. 000 728 745 Rate/Unit Rs./Kwhr. 7.72 11.99 2. Diesel * Quantity KL 68.30 53.73 Total Amount Rs. 000 2480 1741 Average Rate Rs./Ltr. 36.32 32.40 * Used for both DG Set and Boiler B) Consumption per unit of Production Electricity Kwhr./Kg. 1.24 0.60 Diesel Ltrs./Kg. 0.06 0.05 Notes: (1) Standards are not comparable with previous years consumption due to change in product mix during the year under report. FORM - B (See Rule 2) Form for disclosure of particulars with respect to absorption Research and Development plays an integral role for FEM. Your Company has integrated its R & D practices to operate in tandem with the long-term strategy and cater to the demands of the market-place. The focus of the R &D team is to implement knowledge management and drive quality assurance while maintaining customer centricity in the entire process. RESEARCH AND DEVELOPMENT (R & D) 1) Specific areas in which R & D carried out by the Company Research & Development efforts were focused on improvement in existing products and development of new products in following segments. - Personal Care products - Domestic / household products - Pharma products - Diagnostic evaluation of topical products 2) Benefits derived as a result of the above R & D: Following new products were introduced as a result of sustained R & D efforts. - Personal Care products - Herbal Stratum Lotion - Hair dyeneutralizer - Extra Care Skin Nourishing Lotion - Post depilatory - Herbal Bleach Cream with Pre Bleach & Post Bleach Cream - 1KB Skin Litener Cream - Carotis Moisturizing Lotion - Minoplus Pomade with Vegetable Marrow - Minoplu s Pomade with Carrot Oil - Keratex Gold Hair Oil Pharma products: - Ketoconazole Solution 2%(Topdan) - Anti dandruff - Mityscab Cream - Scabicidal product - Minoxidi l 2% & 5% (Carotis Minoplus) - Pedrol Anti Acne Lotion 3) Future plan of action: New products will be launched on approval from R&DDivision. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION: 1. Efforts in brief, made towards technology absorption, adaptation and innovation: * Participation in national and international conferences * Imparting training to personnel by foreign technicians in various manufacturing techniques by foreign and Indian experts and technology suppliers 2. Benefit derived as a result of the above efforts: * Improvement in existing processes and reducing consumption of scarce raw materials and fuel * Cost reduction 3. Information regarding technology imported during the last 5 years : Nil MANAGEMENT DISCUSSION AND ANALYSIS (within the limits set by the Companys competitive position) The year in retrospect has been highly turbulent and challenging for the world economy. The unprecendented financial crisis, probably the worst since the great depression era, has shaken the foundation of some of the strongest economies in the world. India has not been immune to this global upheaval and meltdown. Though there are signs of recovery it is too early to predict signals of full fledged recovery. The Company business segments are Personal Care products, pharmaceutical and speciality chemical business. The Personal Care business continues to account for over 75 per cent of the Companys sales turnover. During the year 2008-09, the consumer care business grew by 14 per cent, the Pharmaceutical business by 26 per cent and Chemical business grew by 67 percent. The overall market environment continues to be very competitive. In the face of an intense competitive scenario and despite difficult economic conditions, the Company reinforced its leadership in the consumer segment and achieved a commendable business performance. During the year your company introduced several new products and revamped some of our current offerings to better suit consumer tastes. During the year under review, we re-launched Fem Hair Removing Cream as Fem Complete Hair Removing System With Dual Care range now comprises of three variants and four fragrances. Fem Complete Hair Removing System With Dual Care and Fem Herbal Bleach are led by its new brand ambassador PRIETY ZINTA