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Ahlcon Parenterals (India) Limited
Ahlcon Parenterals (India) Limited
4, Community Centre, Saket, New Delhi - 110017, India
Telefax No. 91-11-26852036 | Email: [email protected]
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20th Annual Report 2011-12
www.ahlconinida.com
Ahlcon cover for stat.indd 1 9/11/2012 5:39:27 PM
Note: Annual Listing Fee for the year 2012-2013 has been paid to all the Stock Exchanges
MAS SERVICES LTD.T-34, 2nd Floor, Okhla Industrial Area,Phase - II, New Delhi - 110 020Ph: 011-26387281/82/83,Fax: 011- 26387384Email: [email protected]: www.masserv.com
For Dematerialisation of SharesISIN No. INE 027C01011
REGISTRAR & SHARE TRANSFER AGENTS
STOCK EXCHANGES(Where the Company’s equity shares are listed)
1. Delhi Stock Exchange Ltd. DSE House, 3/1, Asaf Ali Road, New Delhi - 110002
2. Bombay Stock Exchange Ltd. P. J. Towers, 25th Floor, Dalal Street, Mumbai - 400001
3. Jaipur Stock Exchange Ltd. Jawaharlal Nehru Marg, Malviya Nagar, Jaipur - 302017
4. The Calcutta Stock Exchange Association Ltd. Calcutta Stock Exchange Building 7, Lyons Range, Kolkata - 700001
CORPORATE INFORMATIONBOARD OF DIRECTORS
BANKERS
REGISTERED OFFICE
AUDITORS
Mr. Bikramjit AhluwaliaChairman
Dr. Rohini AhluwaliaExecutive Vice Chairperson, CEO
Ms. Sudarshan Walia, DirectorMr. Arun Kumar Gupta, DirectorProf. G.P. Talwar, DirectorDr. S.S. Arora, DirectorDr. S.C.L. Gupta, DirectorMr. S.K. Sachdeva, Director
Punjab & Sind Bank Syndicate Bank State Bank of Bikaner & JaipurHDFC Bank Ltd.
4, Community Centre, Saket, New Delhi - 110017Tel: +91-11-26852036Fax: +91-11-26852036
MANUFACTURING FACILITIESSP-917 & 918, Phase III, Industrial Area,Bhiwadi - 301019Dist. Alwar, RajasthanTel: +91-01493-305300 Fax: +91-01493-221045
CORPORATE OFFICEM-1, Saket, New Delhi - 110017Tel: +91-011-40504562
WEBSITEwww.ahlconindia.comemail: [email protected]
M/s. Arun K. Gupta & Associates Chartered Accountants, D-58, East of Kailash,New Delhi - 110065
COMPANY SECRETARY Mr. Ranjan Kumar Sahu
CONTENTSNotice.......... 01 Directors’ Report.......... 03 Management Discussion & Analysis Report... 07
Report on Corporate Governance.......... 11 Auditors’ Report.......... 17 Balance Sheet....... 20
Statement of Profit and Loss.......... 21 Notes.......... 22 Cash Flow Statement.......... 44
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTICENotice is hereby given that the 20th Annual General Meeting of Ahlcon Parenterals (India) Limited will be held on Thursday, the 27th day of September 2012 at 03.00 P.M. at the Ahlcon Public School, Mayur Vihar, Phase-I, New Delhi-110091 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2012, Statement of Profit & Loss and Cash Flow Statement for the year ended on that date together with Reports of the Board of Directors and the Auditors thereon.
2. To consider the Interim Dividend of 10% paid only for the year 2011-12 on Equity Shares of the company as Final Dividend.
3. To appoint a Director in place of Mr. Arun Kumar Gupta, who retires by rotation and being eligible, offers himself for reappointment.
4. To appoint a Director in place of Prof. G. P. Talwar, who retires by rotation and being eligible, offers himself for reappointment.
5. To appoint a Director in place of Dr. S. S. Arora, who retires by rotation and being eligible, offers himself for reappointment.
6. To appoint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company and authorise the Board of Directors/ Audit Committee to fix their remuneration.
M/s. Arun K. Gupta & Associates, Chartered Accountants, are the retiring Auditors and, being eligible, offer themselves for reappointment.
By order of the Board
Place : New Delhi Ranjan Kumar SahuDated : 08.08.2012 Company Secretary
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/ HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.PROXIES IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY AT ITS REGISTERED OFFICE NOT LATER THAN, 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
2. Proxies shall not have any voting rights except on a poll.
3. Only bonafide members of the company whose names appear on the Register of Members/ Proxy holders, in possession of valid attendance slips duly filled and signed will be permitted to attend the meeting. The company reserves its right to take all steps as may be deemed necessary to restrict non members (excluding valid proxy holder) from attending the meeting.
4. The Register of Members and Share Transfer Books of the company shall remain closed from 20th September, 2012 to 27th September, 2012 (both days inclusive) for the purpose of Annual General Meeting.
5. After perusal of the availability of adequate net profit in the half- yearly results of the Financial year 2011-12, the Board in its meeting held on dated 13.02.2012 has considered the declaration of an Interim dividend of 10 % on the fully-paid up Equity Shares having a face value of ` 10 and paid ` 1 per equity share to those members whose names appeared in the Company’s Register of Members as on the opening hours of 25th February, 2012 by way of electronic transfer to the account of the shareholders who have provided their Bank account details to the DP and through cheques for others. While approving the audited financial results for the year ended 31st March, 2012, the Board has not recommended any further dividend and has considered the interim dividend only as Final Dividend, on Equity shares. Further, the Board has approved for payment of final dividend only on the 6% Cumulative, Redeemable Preference Shares amounting to ` 1,35,000/- (excluding tax on dividend) for the year 2011-12, in addition to ` 4,05,000/- (excluding tax on dividend) already paid as Interim Dividend on the said preference shares.
6. Those members who have so far not encashed their dividend warrants for the below mentioned financial years, may claim or approach the company for the payment thereof as the same will be transferred to the Investor Education and Protection Fund of the Central Government, pursuant to section 205C of the Companies Act, 1956 on the respective dates mentioned there against. Intimation in this regards is being sent to the concerned shareholders periodically. Kindly note that after such dates, members will lose their right to claim such dividend.
FINANCIAL YEAR ENDED AGM DATE DUE DATE
31.03.2005 30.09.05 05.11.2012
31.03.2006 30.09.06 05.11.2013
31.03.2007 29.09.07 04.11.2014
31.03.2008 30.09.08 05.11.2015
31.03.2009 30.09.09 05.11.2016
31.03.2010 17.09.10 23.10.2017
31.03.2011 30.09.11 05.11.2018
7. Pursuant to the provisions of Section 205A of the Companies Act, 1956, the unpaid/unclaimed Dividend for the year 2004-05 will be transferred to the Investor Education and Protection Fund of the Central Government on the due date.
8. Members those who may not have received/ encashed the dividend warrants for the year 2004-05, 2005-06, 2006-07, 2007-08 2008-09, 2009-10, 2010-11 and Interim Dividend 2011-12 may claim it/ apply for revalidation either to the RTA or the Secretarial Department of the company.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
9. All documents referred in the notice are open for inspection at the Registered Office of the company between 11.00 A.M. to 1.00 P.M. on any working day prior to the date of the Annual General Meeting.
10. Members / Proxies should bring the attendance slips duly filled in for attending the meeting. Members who hold shares in dematerialised form are requested to bring their Client ID and DP ID numbers for easy identification of attendance at the meeting.
11. It will be appreciated that queries, if any, on accounts and operations of the company are sent to the corporate office of the company ten days in advance of the meeting so that the information may be made readily available.
12. Shareholders are requested to immediately intimate the change in email address, correspondence address and bank details, if any, to the Company’s Registrar and Share Transfer Agent M/s. MAS Services Ltd., T-34, 2nd Floor, Okhla Industrial Area, Phase - II, New Delhi - 110 020 for payment of dividend, Annual Report and other documents from time to time. Those who are holding their shares in dematerialized form should notify to their Depository participants, change / correction in their address / bank account particulars etc.
13. Shareholders are requested to bring their copy of Annual Report to the meeting.
14. INFORMATION REQUIRED TO BE FURNISHED IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT WITH STOCK EXCHANGES
The particulars of the Directors who are proposed to be appointed /reappointed are as given below:
Mr. Arun Kumar Gupta, Independent Director
DOB: 27-12-1949, Age: 62 years
Mr. Arun Kumar Gupta is a Fellow member of the Institute of Chartered Accountants of India, as well as an Associate member of The Institute of Cost Accountants of India. He is also qualified as a Management Accountant from The Institute of Chartered Accountants of India. He is a Commerce Graduate from the prestigious Shri Ram College of Commerce, Delhi.
Mr. Gupta was nominated by Govt. of India between 1992 – 1995 to the Central Council of The Institute of Chartered Accountants of India, the highest governing body of the accountants in the country.
Mr. Gupta has vast experience in almost entire financial accounting spectrum including systems formulations, MIS, internal control, audit, taxation, and corporate laws. He has also been involved in few merger and acquisitions for small and medium enterprises. He has also been responsible for revival of many sick industrial units. Mr. Gupta has also successfully handled arrangement of loan
fund to over fifty companies. He has been a part of several teams for negotiating formation of joint ventures in India with Foreign Companies. He has also appeared as an Accounting Expert before International Chamber of Commerce, Paris.
He is Director and Chairman of Audit Committee of the following companies:
Indosolar LimitedAhluwalia Contracts (India) LimitedAhlcon Parenterals (India) LimitedSatia Synthetics Limited
He is also associated with number of NGO’s both as a member and as an advisor.
He is holding 1279 shares of the company as on 31.03.12.
Prof. G. P. Talwar, Independent Director
DOB : 02.10.1926 Age: 85 years
Prof. Talwar is having the qualifications of B.Sc. (Hons.) M.Sc. (Tech.) and Docteur es Sciences (Sorbonne). He is the founder Director of the Talwar Research Foundation for Immunology. To name a few of his previous experience, he was the head of Research and Training Centre in Immunology of WHO for India and South East Asia, Professor and HOD of Biochemistry, AIIMS, New Delhi, Professor of Eminence and Senior Consultant, International Centre for Genetic Engineering and Biotechnology, New Delhi.
He has been bestowed with several prestigious Honours and awards by many premier organizations at national and international level.
He is holding 500 shares of the company as on 31.03.12 and not holding directorship in any other company.
Dr. S. S. Arora, Independent Director
DOB: 16-01-1959, Age: 53 years
Dr. Arora is an MBBS, MD and having the Fellowship of American Association of Respiratory Care, USA. Presently, he is a Senior Consultant, Batra Hospital, New Delhi a large group of Hospital.
He possesses in-depth knowledge on analysis of pharmaceutical market data, and has expertise in establishing strategies for marketing of pharmaceutical products. Further, he is having an extensive 30 years of experience in pharmaceutical world specifically with respect to meeting challanges for unmet medical needs, healthcare and related medical activities.
He is not holding any shares and directorship in any other company.
By order of the Board
Place : New Delhi Ranjan Kumar SahuDated : 08.08.2012 Company Secretary
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
DIRECTORS’ REPORTTo the Members,
Your Directors have pleasure in presenting the 20th Annual Report on the business and operations of the Company for the financial year ended 31st March, 2012.
FINANCIAL RESULTS(` in lacs)
FOR THE YEAR ENDED 31.03.2012 CURRENT YEAR
31.03.2011 PREVIOUS YEAR
Sales (including excise) and other Income
8754.85 6827.84
Gross operating Profit 1489.86 1200.07
Financial Charges 369.91 247.09
Cash Profit 1119.95 952.98
Deprecation 339.60 289.32
Provision for doubtful debts/obsolete Stock
85.03 30.23
Provision for doubtful debts written back
45.94 16.12
Prior period Adjustments 17.82 1.28
Profit before Tax 723.44 648.28
Provision for Deferred Tax 5.34 159.70
Provision for Current 216.58 132.40
MAT Credit Entitlement (5.85) (73.03)
Income Tax Paid for earlier years 7.43 –
Profit after Tax 499.93 429.21
Balance brought forward from previous year
2082.44 2045.47
Profit available for appropriation 2782.37 2474.68
Interim Dividend on Preference Shares
4.05 –
Proposed Final Dividend on Preference Shares
1.35 5.40
Tax on Interim Dividend on Preference Shares
0.66 –
Tax on Proposed Dividend on Preference Shares
0.22 0.90
Interim Dividend on Equity Shares
72.00 –
Proposed Final Dividend on Equity Shares
– 108.00
Tax on Interim Dividend on Equity Shares
11.68 –
Tax on Final Dividend on Equity Shares
– 17.94
Profits transferred to General Reserve
60.00 60.00
Profit carried forward 2632.41 2282.44
OPERATIONAL PERFORMANCE
Your Directors have the reasons to be satisfied about the financial & operational performance of the company as it has continued to surpass all its previous records and has achieved a sales turnover of ` 7970 lacs as compared to the previous year sales turnover of ` 6277 lacs and thereby achieved a growth of 27%. The Company Net Profit has recorded a growth of 16.47% by scaling up from the previous year figure of ` 429.21 lacs to ` 499.93 lacs.
Constant thrust on productivity enhancement, cost optimization is being put by your directors to maintain a continuous growth track in the operational results of the company.
DIVIDEND
After perusal of the availability of adequate net profit in the half- yearly results of the Financial year 2011-12, the Board in its meeting held on 13.02.2012 has considered the declaration of an Interim dividend of 10 % on the fully-paid up Equity Shares having a face value of ` 10 and paid ` 1 per equity share to those members whose names appeared in the Company’s Register of Members as on the opening hours of 25th February, 2012 by way of electronic transfer to the account of the shareholders who have provided their Bank account details to the DP and through cheques for others. While approving the audited financial results for the year ended 31st March, 2012, the Board has not recommended any further dividend and has considered the interim dividend only as Final Dividend, on Equity shares.
Further, the Board has approved for payment of final dividend only on the 6% Cumulative, Redeemable Preference Shares amounting to ` 1,35,000/- (excluding tax on dividend) for the year 2011-12, in addition to ` 4,05,000/- (excluding tax on dividend) already paid as Interim Dividend on the said preference shares.
The dividend payout for the year under review has been formulated keeping in view the company’s need for capital, its growth plans and the intent to finance such plans through internal accruals to the maximum. Your directors believe that this would increase shareholder value and eventually lead to a higher return threshold.
TRANSFER TO RESERVES
Out of the profit available for appropriation, your directors propose to transfer ` 60 lacs to the General Reserve of the company which they consider for building a strong reserve position for future utilization.
EARNING PER SHARE
EPS (Earning Per Share) is ` 6.94, as compared to the previous year’s figure of ` 5.87 by a growth of 18.22 % as compare to the previous year.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
MATERIAL CHANGES WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE BALANCE-SHEET RELATES AND THE DATE OF REPORT
OPEN OFFER MADE BY B. BRAUN SINGAPORE PTE. LTD. (“Purchaser”) IN ACCORDANCE WITH THE SEBI TAKEOVER REGULATIONS, 2011
The promoters of the Company have entered into a Share Purchase Agreement with B. Braun Singapore Pte. Ltd. (Purchaser) on dated 21st March, 2012 for ceding controlling stake in the Company to it and in accordance with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SEBI Takeover Regulations”), an open offer had been given by the purchaser to purchase the equity shares from the public shareholders of the Company at a price determined in accordance with the SEBI Takeover Regulations.
The Purchaser has made a Detailed Public Statement in accordance with the SEBI Takeover Regulations on dated 29.03.2012 and has, in light of the provisions of Regulation 26(6) of the SEBI Takeover Regulations, requested the Board of Directors of the Company to constitute a Committee of Independent Directors to provide reasoned recommendations with respect to the Open Offer made by the Purchaser in accordance with the SEBI Takeover Regulations and to publish such recommendations in accordance with the SEBI Takeover Regulations.
After adequate legal consultation, the Committee of Independent Directors has approved its recommendation on dated 19.05.2012, about the fairness of the offer price of ` 460/- by the purchaser, which were also published on various National newspapers for the information of the shareholders.
After the successful completion of the open offer process, there will be a change in the Management of the company.
UPGRADATION / PRODUCT DEVELOPMENT
The GMP standards has been revised for International as well as domestic markets. Revised Schedule M of the Drugs and Cosmetics Rules, WHO-GMP and other International norms relating to good manufacturing practices, require facilities and equipments, which causes additional financial burden upon the Company.
To meet with the current GMP norms and as well as revised Schedule M to the Drugs and Cosmetics Rules, WHO-GMP and other international norms relating to good manufacturing practices, the Company has engaged a renowned Pharma Consultant for upgrading the present facilities. Your company is updating the existing formulations, manufacturing process, packing materials and develop new formulations for AHLCON through its own In house R&D Division. The production facilities of
the Company have to be upgraded as it plans to stretch its value added products in both the domestic as well as in international markets.
RESEARCH & DEVELOPMENT
The Company has considered Research and Development (R&D) as crucial for the sustained growth of the Company. The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005. The Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario.
The Company has established an In house R&D Division at Bhiwadi with a dedicated team of highly qualified, skilled scientists engaged in developing the formulations and products for its strategic portfolio management. R&D is also well on its way to realize the potential of the company by innovating with various drug delivery technologies. The company is in the process of research and development of new formulations and registration of products.
The Company has R&D Division at Bhiwadi, duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR).
With qualified and experienced research scientists manning the research and development activities, the Company has focused its thrust on new and innovative process and product development.
In respect of weighted tax benefit under the R&D expenditure, the company has filed application before the prescribed authority under Section 35 (2AB) of the Income Tax Act, 1961 which is under pipeline.
EXPORTS
In this report your company has planned for major attention of its operation on export market due to opportunity and demand of your products in the international market. Your directors are putting constant efforts for increasing the export sales component on the total turnover to mitigate the risk posed by various domestic markets and factors, which are resulting into price discrimination, cut throat competition, entry of new entities in the market, government price regulatory mechanism. Taking advantage of the increased demand of Indian pharmaceutical products, in the international market, the company has carried on registration and arrangement with several international agencies for increasing the base of export markets. Further plans are underway to increase the direct and indirect exports to various countries. As a result of this, during the year under review, the direct export sales were ` 1519 lacs as compared to the previous year’s figure of ` 670 lacs, achieving a growth of 127% approx.
As informed in our previous report, to further expand the company’s export activities, your company is in the process of registration of its product dossiers, in both the regulated as well as unregulated markets and
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
the registration formalities with number of countries are well in progress. We have obtained orders from some parties and as some countries registration process is in under the pipe line and hence soon after these registration certificates are obtained, company shall be able to grab the export earnings by exporting to those countries.
BANKERS
We are banking with the Punjab & Sind Bank which has been providing financial assistance to our company for various purposes and for which we express our hearty commends.
DIRECTORS
The Present directors having a vast experience in this Industry & their timely directions ultimately had provided long term benefits to the Company. Their constant efforts and seasoned decisions paved the way to success in each path.
In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company, Mr. Arun Kumar Gupta, Prof. G. P. Talwar and Dr. S. S. Arora, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
Necessary resolutions seeking the approval of the shareholders for the aforesaid appointment & reappointment of directors, form part of the notice, convening the Annual General Meeting. The details of the directors, seeking appointment/ reappointment is provided under the “Report on Corporate Governance” forming part of this Annual Report.
Directors’ Responsibility Statement: Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, it is hereby confirmed :
(i) That the applicable accounting standards have been followed alongwith proper explanation relating to material departures in the preparation of annual accounts;
(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 profit or loss of the Company for the year under review;
(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2012 on a ‘going concern’ basis.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled “Report on Corporate Governance” has been annexed to this Annual Report.
AUDITOR’S REPORT
The remarks referred to in the Auditors Report are self explanatory except on the observation of disputed tax / other demand mentioned at point no. 9 (ii) of the Annexure to their report, the company has already preferred appeals before the appellate authorities against the said demand of the respective departments. Company has strong grounds to believe that the appellate authorities shall pass orders in favour of the company.
STATUTORY AUDITORS: M/s. Arun. K. Gupta & Associates, Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. We recommend for their reappointment.
COST AUDITORS: M/s. Kabra and Associates, Cost Accountants, New Delhi have been reappointed as Cost Auditors of the company for the financial year 2012-13,by the Board of Directors, on a remuneration to be settled mutually. The Cost Audit report for the financial year 2011-12 shall be filed with the MCA within the prescribed time.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS / OUTGO: The information pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is furnished in the Annexure forming part of this report.
PARTICULARS OF EMPLOYEES: During the year under review, no employee was in receipt of remuneration exceeding the specified limits. Hence, no disclosure under section 217(2-A) of the Companies Act, 1956, is required to be made.
INDUSTRIAL RELATION: The Company continued to maintain very healthy, cordial and harmonious industrial relations at all levels and your Directors wish to place on record their appreciation for the contributions made by the employees at all levels and take this opportunity to thank all employees for their hard work, dedication and commitment.
ACKNOWLEDGEMENTS: Your Directors take this opportunity to offer their sincere thanks to various departments of the Central and State Governments, Banks and Investors for their unstinted support, assistance and valuable guidance. Last but not the least, the directors wish to place on record their deep sense of appreciation for the devoted service of the Executives, Staff and workers of the company at all levels.
For and on behalf of the Board of Directors
Place: New Delhi Bikramjit AhluwaliaDate: 08.08.2012 Chairman
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
ANNEXURE TO THE DIRECTORS’ REPORT I - CONSERVATION OF ENERGY
Steps towards energy conservation are being continuously undertaken to reduce wastage and improve efficiency resulting in reduced energy cost. The company has appointed a specialized agency to conduct an energy audit regularly and implement new and improved powers saving techniques to optimize the energy consumption and reduce cost on such account.
FORM - A
(A) 1. Electricity, power and fuel consumption:
CURRENT YEAR PREVIOUS YEAR
(a) Purchased:
Units 7057700 6459740
Total amount (`) 38079177 30792562
Average Rate per Unit 5.40 4.77
(b) Own Generation: Units Generated 891266 625860
Units generated per liter of Diesel oil 3.42 3.30
Average Cost per Unit (`) 11.22 10.25
2. Fuel (Furnace Oil/LDO):
Units (Ltrs.) 1335971 1058501
Total amount (`) 51938678 30306256
Average Rate/Unit (`) 38.88 28.63
B. AVERAGE CONSUMPTION (VALUE) PER UNIT OF PRODUCTION:
Electricity 0.345 0.277
Fuel (Furnace Oil/ LDO) 0.373 0.226
II - TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION:
The company manufactures IV Fluids and ophthalmic products using the FFS (Form-Fill-Seal) latest imported technology which is considered as the best technique world over. Further, At Ahlcon, our investment in Research and Development has been initiated to meet the challange of unmet medical needs. A strong new product pipeline, one that is continually replenished, will be our aim for the coming years as a means to achieve success as a Branded Pharmaceutical Company.
FORM - B
1. Specific area in which R&D carried out by the Company.
a. To develop new products in different dosage form for Domestic and International market.
b. To develop new analytical methods and their validation
c. Improvement of existing products with the objective to reduce cost, improve process and quality.
d. To develop new innovative products in novel drug delivery system
e. To develop new innovative products for different segments where currently products are not available
f. To develop ‘ready to use’ injectable dosage form
2. Benefits derived as results of the R&D process.
Six products are developed by R&D division and commercialized. Ten products are under different stages of development and a few more have been taken of for cost optimisation.
3. Future plan of action
Your Company has ambitious plans to invest further for enhancing its R&D capabilities.
4. Expenditure on Research and Development:` `
Capital 4,225,716.00
Recurring
Material 1,326,711.00
Personnel 3,886,617.00
Printing & Stationery 1,02187.00
5,315,515.00
Depreciation (R&D Division) 211,910.00 5,527,425.00
Total R&D Expenditure 9,753,141.00
As a percentage of total turnover 1.12%
III - FOREIGN EXCHANGE EARNINGS AND OUTGO:(` in lacs)
CURRENT YEAR PREVIOUS YEAR
Foreign Exchange earnings 1519.09 670.00
Foreign Exchange Outgo:
(a) Imports - Machinery spares
15.62 100.85
(b) Capital Goods 0.00 921.72
(c) Imports - Raw Materials
1459.11 854.54
(d) Bank charges 3.18 1.12
(e) Registration Charges 2.06 11.95
(f) Professional Charges – 25.64
(g) Business Promotion 35.78 –
1515.75 1915.82
For and on behalf of the Board of Directors
Place: New Delhi Bikramjit AhluwaliaDate: 08.08.2012 Chairman
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
MANAGEMENT DISCUSSION & ANALYSIS REPORT
To the Shareholders,
This report aims to be helpful to the Shareholders of the pharmaceutical and healthcare market and provide them with an in-depth analysis of the business prospects.
CAVEAT
This section of the 20th Annual Report has been included in adherence to the spirit enunciated in the Code of Corporate Governance approved by the Securities and Exchange Board of India. Shareholders are cautioned that certain data and information external to the Company is included in this section. Though these data and information are based on sources believed to be reliable, no representation is made on their accuracy or comprehensiveness. Further, though utmost care has been taken to ensure that the opinions expressed by the management herein contain their perceptions on most of the important trends having a material impact on the Company’s operations, no representation is made that the following presents an exhaustive coverage on and of all issues related to the same. The opinions expressed by the management may contain certain forward-looking statements in the current scenario, which is extremely dynamic and increasingly fraught with risks and uncertainties. Actual results, performances, achievements or sequence of events may be materially different from the views expressed herein. Shareholders are hence cautioned not to place undue reliance on these statements, and are advised to conduct their own investigation and analysis of the information contained or referred to in this section before taking any action with regard to their own specific objectives. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice.
The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this section, consequent to new information, future events, or otherwise.
ECONOMIC BACKGROUND
According to the Economic Survey 2011-12, Indian economy is estimated to grow at 6.9% in 2011-12 and is expected to be around 7.6% in 2012-13. The growth has been broad based with a rebound in the agriculture sector which is expected to grow around 2.5%. Manufacturing and services sector also have registered impressive gains. The Survey reports that the industrial output growth rate was 3.9% while the services sector registered a growth rate of 9.4% in 2011-12.
In order to review the performance of Ahlcon in the financial year 2011-12, it will be relevant to comprehend the prevailing backdrop:
• Cumulativeexportsrecordedduring2011-12(April-January)stoodat USD 242.8 billion, registering a growth of 23.5%;
• Importsin2011-12(April-January)atUSD391.5billionregistereda growth of 29.4%;
• ForexreservesstoodatUSD292.6billionatendofJanuary2012;
• Services sectorgrewby9.4%, its share ingrossdomesticproduct(GDP) goes upto 59%
• Industrialgrowthisestimatedtobe3.9%,expectedtoimproveaseconomic recovery resumes;
• Foreigntradeperformancetoremainakeydriverofgrowth;
• Net capital flows stood at USD 41.1 billion in the first half of 2011-12, remained higher as compared to USD 38.9 billion in the first half of 2010-11;
• India’s external debt stock stood at USD 326.6 billion at endSeptember 2011;
• Indiaremainsamongthefastestgrowingeconomiesoftheworld.The country’s sovereign credit rating rose by a substantial 2.98% during the period 2007-12.
The year was also adversely affected by severe inflationary pressures, rising interest costs, volatile rupee-dollar ratio with a tendency to get weaker and currency concerns in almost all trading partner-countries.
Despite the macro strains and likely headwind of double-dip recessions in Europe and the US, India’s economic growth is expected to remain robust in 2012 and 2013, according to a United Nations’ annual economic report - World Economic Situation and Prospects 2012. They believe Indian economy is expected to grow between 7.7% and 7.9% this year, as per the report.
India is the second most preferred destination for foreign investors, according to the report ‘Doing Business in India’ by Ernst & Young. The report explores India’s key sectors, investment climate, funding scenario, laws and regulations, to aid companies that are doing, or plan to do business in India.
INDUSTRY PERSPECTIVE
After a brief period of sluggishness, the growth momentum in the domestic formulations market appears to be back on track. Structural demand drivers include:
• rising household income levels; increasing prevalence of lifestylerelated diseases;
• improvinghealthcareinfrastructure/deliverysystems;and
• rising penetration in smaller towns and rural areas continue tosupport long term growth
However, competitive pressures in the domestic market are likely to sustain as MNCs become aggressive and domestic companies leverage on their expanded field force. Potential regulatory interventions could put pressure or hurt pricing.
A large number of patent expirations continue to offer strong growth prospects for generic players in the developed markets. In the recent quarters, a peer set of seven leading generic players have reported a fairly strong revenue growth in the US driven by steadily expanding product
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
portfolio and exclusivities. While patent expiries are expected to peak out in 2012, the growth momentum would sustain as most Indian companies have a fairly spread product pipeline till 2014. While some companies have a healthy pipeline of First-to-File opportunities, a few others are likely to benefit from the launch of niche, limited competition products.
Significantly, the quality of filings by major Indian companies has also significantly improved over the years with complex molecules, non-orals (i.e. inhalers, injectables, oral contraceptive, ophthalmic etc.) and Para IV/FTFs forming increased share of the pipeline.
Globally, generics players however, continue to face competitive environment with increasingly crowded space for filing ANDAs (Abbreviated New Drug Application) and Para IV challenges and aggressive product life cycle management strategies of large innovator companies. Price erosion, especially through regulatory interventions, remains a foremost challenge in the European markets, while presence in limited competition product segments and over-the-counter (OTCs) segment offers some protection for margins.
Most developed markets continue to move away from branded generics to commoditised un-branded generics and lower margin tender based business. Amongst new frontiers, Japanese genericmarket offers largepotential, though there are significant challenges.
In the U.S., companies with a robust and selective product pipeline, presence in niche/complex segments and diversified therapies would continue to exhibit a relatively strong earnings profile. There would also be significant one-time upsides for companies, stemming largely from Para IV/FTF opportunities in US.
In the European markets, while companies may face pressure on profitability, volume growth would continue as healthcare reforms initiated by governments would push growth in generics. Emerging markets, with growing spend on healthcare and strong branded generic markets offer profitable growth opportunities for formulations business. Besides emerging markets, the gradually evolving generics opportunity in Japan,thesecond-largestmarketintheworld(afterUnitedStates)alsooffers the generic players an opportunity to pursue long-term investments.
On the CRAMS (Contract Research and Manufacturing Services) front, Indian players are focusing on providing services across the value chain spanning from development stage to commercial scale production. Relatively lower exposure to small biotech companies has been a risk mitigant during the downturn for these entities. With several drugs going off-patent and big pharma increasing their exposure to cost efficient sourcing locations, opportunities remain favourable for CRAMS players to provide developmental services and subsequently graduate to commercial scale production.
Key challenges facing the industry are potential implementation of the new pricing policy in India, increasing competitive pressure in the chronic
segments, aggressive approach such as authorized generics by innovators in the US and healthcare reforms in European markets are some of the factors that could impede profitability for pharma companies.
Patent expirations, weak pipeline quality and increasing focus by governments to reduce healthcare costs continue to exert pressure on innovator companies which supports outsourcing to low-cost nations. Despite challenges, leading Indian players continue to exhibit strong profitability indicators (excluding one-time instances like exclusivity-related aberrations or impact of foreign exchange fluctuations) and credit metrics. These strengths are also reflected in their strong credit profile.
Overall, outlook on the Indian pharmaceutical companies remains favourable as earnings growth will continue with companies benefitting from an expanding domestic market, strong growth potential in developed markets on the back of patent expiries and potential outsourcing opportunities. Investments including capital expenditure are likely to remain buoyant over the medium term. Balance sheets of major pharmaceutical companies continue to remain strong providing adequate room for fund raising. (Source: ICRA’s Indian Pharmaceutical Sector Industry update, March 2012).
OVERVIEW AHLCON
Ahlcon Parenterals (India) Limited is one of the leading manufacturing Company in the Indian Pharmaceutical Industry. The Company’s revenues are mainly from Contract Manufacturing and ethical sale of branded-generic and unbranded-generic manufactured pharmaceutical products. A further break down of pharmaceutical sales can be done as, Domestic formulations (comprising branded pharmaceuticals formulations sold in the domestic market), Contract manufacturing (comprising sourcing, manufacturing and supplying pharmaceutical formulations to giant pharma company under their brand name) and direct export to International market comprising exports of branded and generic manufactured pharmaceutical formulations. The operating costs primarily comprise raw and packing materials, purchase of finished goods, staff cost, selling and marketing expenses, manufacturing, Research & Development expenses and general overheads.
OPERATIONAL PERFORMANCE
AHLCON growth continued in 2011-12 in terms of value as well as volumes and performance is given below:
(` in lacs)
2011-12 2010-11 GROWTH
Total Income 8201.44 6550.59 25.20%
EBIDTA 1415.35 1162.71 21.73%
Profit before Tax (PBT) 723.44 648.28 11.59%
Net Profit after Tax (PAT) 499.93 429.21 16.47%
Earning per Share (EPS) 6.94 5.87 18.23%
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
OVERVIEW INDIAN PHARMA INDUSTRY
The Indian pharmaceutical industry currently tops the chart amongst India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. It ranks very high amongst all the third world countries, in terms of technology, quality and the vast range of medicines that are manufactured. It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made in the Indian pharmaceutical industry.
It has expanded drastically in the last two decades. The Pharmaceutical and Chemical industry in India is an extremely fragmented market with severe price competition and government price control. The Pharmaceutical industry in India meets around 70% of the country’s demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles.
Advantages in India
The Indian Pharmaceutical Industry, particularly, has been the front runner in a wide range of specialties involving complex drugs’ manufacture, development and technology.
Competent workforce: India has a pool of personnel with high managerial and technical competence as also skilled workforce. Professional services are easily available.
Cost-effective chemical synthesis: Its track record of development, particularly in the area of improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk drugs.
Legal & Financial Framework: India as a democracy have solid legal framework and strong financial markets.
Information & Technology: It has a good network of world-class educational institutions and established strengths for the same.
Globalisation: The country is committed to a free market economy and globalization. Above all, it has a 70 million middle class market, which is continuously growing.
Consolidation: For the first time in many years, the international pharmaceutical industry is finding great opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world pharmaceutical industry, has started taking place in India.
OUTLOOK ON THREATS, RISK AND CONCERNS
Government Initiative
The Department of Pharmaceuticals has prepared a “Pharma Vision 2020” for making India one of the leading destinations for end-to-end drug discovery and innovation and for that purpose provides requisite
support by way of world class infrastructure, internationally competitive scientific manpower for pharma research and development (R&D), venture fund for research in the public and private domain and such other measures. The government plans to open 3,000 Jan Aushadhistores, which sell unbranded generic drugs at heavy discounts to branded drugs, in the next two years.
Pharmaceuticals Pricing:
One of the very serious concerns for the Pharmaceuticals division is Government regulation of prices of medicines and mounting pressure to reduce drug prices. The control extends two ways with the first being on the cost of inputs i.e raw materials, packing materials where the Government determines the fixation of prices and the second being the conversion cost and packing cost which is yet again decided by the Government on the basis of studies carried out by them. The domestic market is subject to price control under DPCO, 1995. More and more products are being added to the list of controlled products and thereby, the profit margins could be significantly affected. The Company manages its product portfolio, product mix and value added products, so as to move away, reduce and minimize the product weightage of drugs under price control.
Financial Risks:
With the high amount of imports of raw materials like granules and exports of finished goods transacted in foreign currencies the foreign exchange fluctuations have may an impact on the working of the Company. By way of hedging of foreign exchange transactions wherever found prudent, the Company minimizes the impact of foreign exchange loss. Due to the broad customer base in Pharmaceuticals segment, the Company is exposed to a low credit risk in its sales markets.
Weakness in domestic markets:
Fierce price competition has become the order of the day for the domestic pharma industry, which has restricted the ability of the domestic pharma market to grow in value terms. Due to its highly fragmented structure, the pricing power of the players has been pruned. The Indian markets have traditionally been and continue to remain price sensitive and premium pricing of products is extremely difficult to maintain .The new players in the industry are resorting to the cutthroat price competition. However, the company has been able to increase its product ranges and able to maintain a balance for its existing profit percentage.
Challenges
Over the past decade, pharmaceutical companies have entered a difficult period where shareholders, the market and regulators have created significant pressures for change within the industry. The core issues for most of drug companies are declining productivity of in-house R&D, patent expiration of number of block buster drugs, increasing legal and regulatory concern, and pricing issue. As a result larger pharmaceutical
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
companies are shifting to new business model with greater outsourcing of discovery services, clinical research and manufacturing.
Current global financial conditions and the threat of a broad recession accelerated the timetable for implementing transformational changes in global organizations, as the industry confronts lower corporate stock prices and an increasingly cost-averse customer. Leaders of the largest global pharmaceutical companies recognize the need for transformational change and will need to move swiftly to ensure sustained growth.
Transformations in the business model of larger pharmaceutical industry spell more opportunities for Indian pharmaceutical companies. Pharmaceutical production costs are almost 50 percent lower in India than in western nations, while overall R&D costs are about one-eighth and clinical trial expenses around one-tenth of western levels.
At the same time, the Indian Pharma Industry would have to contend with several challenges particularly the :
• Effectsofnewproductpatent
• Drugpricecontrol
• Regulatoryreforms
• Infrastructuredevelopment
• Qualitymanagementand
• Conformancetoglobalstandards.
(Sources: http://www.cci.in/pdf/surveys_reports/indias_pharmaceutical_industry.pdf)
INTERNAL CONTROL SYSTEMS AND ADEQUACY
Your company has reviewed internal controls and its effectiveness through the internal audit process. Internal audits were undertaken for every operational department and all major corporate functions under the direction of the Internal Audit department. The focus of these reviews are to Identify weakness and areas of improvement; Compliance with defined policies and processes; Safeguarding of tangible and intangible assets; Management of business and Operational risks; Compliance with applicable statutes and the Ahlcon’s Code of Conduct. The internal control system provide for well-documented policies, guidelines, authorisations and approval procedures. The Companies internal control activities is headed by President & Chief Executive-Operation, which carries out review and checks extensively each and every department throughout the year. The Internal Audit Department make a executive summary to the President & Chief Executive-Operation, Audit Committee and Board on periodically basis. To make such control procedures a foolproof system, outside independent agencies are also employed to make test audit. The prime objective of such audits is to test the adequacy and effectiveness of all internal controls laid down by the management and to suggest improvements.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
AHLCON believes that its human assets give it the competitive edge.
The definition and institutionalization of work ethics has resulted in creating a transparent, empowered and ownership driven culture in the organization. All efforts are being taken to ensure that people processes are aligned to business processes through key processes such as Talent Acquisition, Performance Management, KRA and Talent Development. Internal Communication continues to be the key engine to motivate and engage employees at the work place.
At AHLCON, we have been continuously developing the internal potential of the employees from the present level to the desired level, to sustain the growth of our company. Regular and detailed performance appraisal system is in place to evaluate the performance of all employees and the necessary steps are taken to strengthen the areas which need improvements. Regular Training programmes, were organized for the employees. The Company regards its human resources amongst its most valuable assets and proactively reviews and evolves policies and processes to attract and retain its substantial pool of scientific, technical and managerial resources through a work environment that encourages initiative, provides challenges and opportunities.
Adequate facilities and opportunities are also being provided to the technical and professional staff to update themselves in the fast changing era of technologies. More experienced technical manpower’s are being taken at the senior and middle level to streamline the whole business process.
Corporate Social Responsibility:
At Ahlcon, a large part of its commitment to caring for life comprises its commitment to think and make a difference beyond the world of business into the world of the under privileged and needy. It is in keeping with this core ideology of making a difference to communities and being at the forefront of corporate social responsibility that the AHLCON has always offered financial aid. Ahlcon recognizes the important responsibility towards society and has constantly endeavored and embarked on spreading awareness about social responsibility.
CAUTIONARY STATEMENT
The statements in this Report, particularly which relate to Management Discussion and Analysis describing the Company’s objectives, plans, projections, estimates and expectations, may constitute “forward looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied in the statement depending on the circumstances, which are beyond the control of the Company. The company assumes no responsibility in respect of forward looking statements which may be amended or modified in the future on the basis of subsequent developments, information or events.
For and on behalf of the Board of Directors
Place: New Delhi Bikramjit AhluwaliaDated: 08.08.2012 Chairman
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REPORT ON CORPORATE GOVERNANCEThe best corporate governance practices have been adopted by Ahlcon Parenterals (India) Ltd. and the same is being continuously reviewed to ensure that they adhere to the latest corporate developments and conform to the best corporate governance ethics. In accordance with Clause 49 of the listing agreement with the stock exchanges, the details of compliance by the Company are as under:
1. BOARD OF DIRECTORS
The Board is having a non-executive Chairman and appropriate composition of Executive and Non- Executive Directors conforming to the specification provided in the Listing Agreement. All the Directors are equipped with variety of perspectives and skills, to ensure effectiveness of the Board, facilitating efficient discharge of duties and adding value in the context of the Company’s circumstances.
The composition and category of Board of Directors is as follows:
NAME OF DIRECTOR
CATEGORY BOARD MEETING
ATTENDED
ATTENDANCE AT THE LAST
AGM HELD ON 30/09/2011
NO. OF DIRECTORSHIP
IN OTHER COMPANIES
NUMBER OF COMMITTEE
MEMBERSHIP HELD IN OTHER COMPANIES
DATE OF APPOINTMENT/ RESIGNATION
CHAIRMAN MEMBER
Mr. Bikramjit Ahluwalia
Chairman (Promoter) Non Executive
5 Yes 3 NIL NIL Since Incorporation
Dr. Rohini Ahluwalia
Vice Chairperson (WTD) (Promoter & Executive)
5 NO 2 NIL NIL 01.04.1994, elevated as Vice Chairperson since 29.07.2006 and reappointed as WTD from 01.04.2009
Ms. Sudarshan Walia
Director (Promoter) Non Executive
5 NO 3 NIL 1 Since Incorporation
Mr. Arun Kumar Gupta
Independent Director Non Executive
5 Yes 3 2 2 15.03.1993
Prof. G.P. Talwar Independent Director Non Executive
4 Yes NIL NIL NIL 30.01.2002
Dr. S.S. Arora Independent Director Non Executive
4 Yes NIL NIL NIL 30.01.2002
Dr. S.C.L. Gupta Independent Director Non Executive
5 Yes NIL NIL NIL 29.01.2003
Mr. S.K. Sachdeva Non Executive Director 5 Yes 1 NIL NIL 30.01.2009
Five Board meetings of the Company were held during the year on the following dates:
I.14.05.2011, II.11.08.2011, III.11.11.2011, IV.12.11.2011, V.13.02.2012.
None of the Directors on the Board hold directorship in more than fifteen companies and no Director is a member of more than 10 committee and Chairman of more than 5 Committee (as specified in Clause 49), across all the Companies of which he/she is a Director. The Directors have made the necessary disclosures regarding directorship and committee positions in other companies.
2. BOARD AND ITS SUBORDINATE COMMITTEES
With a view to sub serve the functions specifically prescribed by
Clause 49 of the listing agreements; the company has constituted an Audit Committee, Remuneration Committee and Shareholders Grievance Committee. The following report depicts the composition of the committees and also the nature of functions performed by them during the year under report:
AUDIT COMMITTEE
The Board has constituted an Audit Committee on dated 30th April, 2002 and nominated Mr. Arun K. Gupta, an Independent Director and a Chartered Accountant by profession, as the Chairman of the Committee. The role and powers of the audit committee as stipulated by the Board are in accordance with the items listed in Clause 49 (II) (C) & (D) of the Listing Agreement and as per Section 292A of the Companies Act, 1956.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
Four meetings of the Committee were held during the year on the following dates:
I.14.05.2011, II.11.08.2011, III.11.11.2011, IV.08.02.2012
The composition and other details of the Audit Committee are as follows.
NAME OF THE DIRECTOR
DESIGNATION NATURE OF DIRECTORSHIP
NO. OF MEETINGS
ATTENDED
Mr. Arun Kumar Gupta
Chairman Independent Director
4
Dr. S.S. Arora Member Independent Director
3
Dr. Rohini Ahluwalia
Member Vice Chairperson & CEO, WTD
4
Dr. S.C.L. Gupta
Member Independent Director
4
The President & Chief Executive-Operation, Statutory Auditors and the Internal Auditors of the Company were also invited to attend the Audit Committee meetings along with the Incharge of Finance (CFO) and Company Secretary. As per the need, other key functionaries of the company were also invited to attend the meetings.
REMUNERATION COMMITTEE
The Board has set up a Remuneration Committee to formalize company’s policy on remuneration packages of the executive directors and determine the same from time to time.
The composition and other details of the remuneration committee are as follows
NAME OF THE DIRECTOR
DESIGNATION NATURE OF DIRECTORSHIP
Prof. G. P. Talwar Chairman Independent Director
Mr. Arun Kumar Gupta
Member Independent Director
Dr. S. S. Arora Member Independent Director
There was no meeting held during the year 2011-12.
Details of remuneration paid to Directors for the year 2011-2012
The details of the remuneration paid to the Executive Directors during the year 2011-12 are as under:
EXECUTIVE DIRECTOR DR. ROHINI AHLUWALIA, (WTD, VC, CEO) (`)
Salary and allowances 24,00,000
Contribution to P.F 3,26,640
Perquisites 2,62,949
Gratuity –
Total 29,89,589/-
Note: Whole Time Director is covered under the Company’s gratuity scheme along with the other employees of the Company. The gratuity liability is determined for all the employees on overall basis by an independent actuarial valuation. The specific amount of gratuity for whole time directors cannot be ascertained separately and accordingly the same has not been included in the above note. There is no any fixed component or commission as performance linked incentives for the executive directors. No severance fee or notice period is specified. Presently, the company does not have a scheme for grant of Stock Options either to the Executive Directors or employees.
Dr. Rohini was holding 4,69,710 Equity Shares of the company, as on 31st March, 2012.
Statement of sitting fees paid to Non-Executive Director for the year 2011-12 and their shareholding position as on 31.03.2012.
NON EXECUTIVE DIRECTOR
SITTING FEES (`)
SHARE HOLDING
Mr. Bikramjit Ahluwalia NIL 2949312
Ms. Sudarshan Walia NIL 709610
Mr. Arun Kumar Gupta 50000 1277
Dr. S. S. Arora 40000 NIL
Dr. G .P. Talwar 25000 500
Dr. S. C. L. Gupta 50000 NIL
Mr. S. K. Sachdeva NIL NIL
The above figures are inclusive of fees paid for the attendance of the Committee meetings.
SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE
The Board of Directors of the Company has constituted a Shareholders’/Investors’ Grievance Committee, comprising of Prof. G. P. Talwar, Chairman, Dr. S. C. L. Gupta, Member, Dr. Rohini Ahluwalia, member, interalia approves issue of duplicate certificates and oversees and reviews all matters connected with the securities transfers. The Committee also looks into redressal of shareholders’ complaints like transfer of shares, non-receipt of balance sheet etc. The Committee oversees the performance of the Registrar and Transfer Agents, and recommends measures
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
for overall improvement in the quality of investor services. The Board of Directors has delegated the power of approving transfer of securities to the Company Secretary. The Board has designated Shri Ranjan Kumar Sahu,Company Secretary & Sr.Manager-Legal, as the Compliance Officer.
During the financial year 2011-12, 66 investors’ complaints were received including those received through the website :www.scores.gov.in, designated by SEBI for investor grievances, and all of them were resolved to the satisfaction of the shareholders.
BOARD PROCEDURE
The Chairman of the Board and the Company Secretary in consultation with other concerned persons in the senior management, finalise the agenda papers for the Board Meetings. All divisions/departments in the Company are encouraged to plan their functions well in advance, particularly with regard to matters requiring discussion /approval /decision in the Board/ Committee Meetings. All such matters are communicated to the Company Secretary in advance so that the same could be included in the Agenda for the Board Meetings. Agenda papers are circulated to the Directors, in advance and all material information is incorporated in the Agenda Papers for facilitating meaningful, informed and focused discussions at the meeting. Where it is not practicable to attach any document to the Agenda, the same are placed on the table at the meeting with specific reference to this effect in the Agenda.
4. COMPLIANCE
The Company Secretary while preparing the agenda, notes on agenda, minutes etc. of the meeting(s) and holding and conducting the meetings, is responsible for and is required to ensure adherence to all the applicable provisions of law including the Companies Act, 1956 and the Secretarial Standards recommended by the Institute of Company Secretaries of India, New Delhi.
5. CODE OF CONDUCT
A code of Conduct for the Board members and senior management of the company has been laid down by the Board and it is posted on the website of the company. The same has been circulated to all the concerned who have affirmed the compliance with it. The declaration by the vice Chairperson (CEO) to that effect part of this report as Annexure I.
6. CEO/CFO Certification
The CEO/CFO of the company have certified to the Board as required under Clause (V) of the Listing Agreement. A copy of the certificate is attached hereto.
7. GENERAL BODY MEETINGS
Annual General Meetings
Location and time for last 3 Annual General Meetings were as
follows:
Year, Location, Date and Time:
2008-09: Ahlcon Public School Auditorium, Mayur Vihar, Phase-I, Delhi-92 on 30th September, 2009 at 3.00 P.M.
2009-10: same as above 17th September, 2010 at 3.00 P.M.
2010-11: same as above 30th September, 2011 at 4.00 P.M.
II Special Resolutions passed in the previous three years
Year 2008-09:
One Resolution: One relating to Reappointment of Whole Time Director.
Year 2009-10:
One resolution relating to increase of managerial remuneration of Whole time director
Year 2010-11:
There was no special resolution passed during the year 2010-11.
III. Passing of postal ballot: No resolution was passed through postal ballot in the last year.
IV. No resolution is proposed to be conducted through postal ballot in the ensuing Annual General Meeting.
8. DISCLOSURES
a) Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large.
None of the transactions with any of the related parties were in conflict with the interest of the Company.
b) Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchanges or SEBI, or any statutory authority, on any matter related to capital markets, during the last three years.
No penalty or strictures had been imposed on the company by any regulatory authorities relating to capital markets in the last three years.
c) Whistle Blowing Policy Mechanism:
Considering the nature and size of the company, no such mechanism has been established as on date.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
9. Means of Communication
The quarterly, half yearly and annual financial results of the company were published in leading national newspaper namely, Economics Times, Nav Bharat Times alongwith Business Standard/ The Pioneer in English and Veer Arjun, Hari Bhoomi in Hindi, Financial express etc. The same is displayed in the company’s website www.ahlconindia.com for public information in compliance with listing agreements.
10. THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT FORMS PART OF THIS ANNUAL REPORT.
11. GENERAL SHAREHOLDER INFORMATION
11.1 20th Annual General Meeting
The 20th Annual General Meeting of the company will be held on Thursday, 27th day of September, 2012 at Ahlcon Public School Auditorium, Mayur Vihar, Phase-I, Delhi-91 at 3.00 P.M.
11.2 Tentative Financial Calendar for the year 2012-2013:
The financial year of the Company is April to March. Financial calender (tentative and Subject to change) of the financial year 2012-13 is as follows:
Quarterly Results:
First Quarter Results on or before 14th August, 2012
Second Quarter Results on or before 14th November, 2012
Third Quarter Results on or before 14th February, 2013
Fourth Quarter Results on or before 15th May, 2013
11.3 Date of Book closure
From 20th September, 2012 to 27th September, 2012 (both days inclusive), for the purpose of Annual General Meeting of the company.
11.4 Dividend payment date
The Board in its meeting held on dated 13.02.2012 has considered and paid an Interim dividend of 10% on the fully-paid up Equity Shares having a face value of ` 10 and paid ` 1 per equity share to those members whose names appeared in the Company’s Register of Members as on the opening hours of 25th February, 2012.
While approving the audited financial results for the year ended 31st March, 2012, the Board has not recommended any further dividend and has considered the interim dividend only as Final Dividend, on Equity Shares.
Further, the Board has approved for payment of final dividend only on the 6% Cumulative, Redeemable Preference Shares amounting to ` 1,35,000/- (excluding tax on dividend) for the year 2011-12, in
addition to ` 4,05,000/- (excluding tax on dividend) already paid as Interim Dividend on the said preference shares.
11.5 Listing of Equity Shares on Stock Exchanges at:
Mumbai,Calcutta,NewDelhiandJaipur.
Note: The Company has paid Annual Listing Fee 2012-2013 to each of these Stock Exchanges and their respective addresses have been given in the Annual Reports sent to member’s alongwith the notice of the 20th Annual General Meeting of the company.
11.6 a) Stock Code: Trading Symbol - Bombay Stock Exchange Ltd.: ‘524448’AhlconParen,DES:‘101237’.JSE:‘294’,CSE:‘11084’
b) Demat ISIN Numbers in NSDL & CDSL for Equity Shares: ISIN No. INE027C01011.
c) Stock Market Data (In ` per share) in the year in Bombay Stock Exchange Limited (BSE) with Month’s High and Low:
MONTH HIGH LOW
April, 2011 72.00 62.10
May, 2011 74.40 59.10
June,2011 70.5 58.05
July,2011 72.5 62.00
August, 2011 76.00 59.00
September, 2011 81.05 60.00
October, 2011 112.9 74.9
November, 2011 115.3 95.10
December, 2011 144.90 85.00
January,2012 130.00 105.00
February, 2012 307.95 129.00
March, 2012 427.15 197.65
11.7 Registrars and Transfer Agents:
M/s. MAS Services Ltd.T-34, 2nd Floor, Okhla Industrial Area, Phase-II,New Delhi-110 020, Tel. No.-011-26387281/82/83Fax No.- 011-26387384, E.mail: [email protected]
11.8 Share Transfer System
Presently, the share transfers which are received in physical form are processed and the share certificates returned within a period of 10 to 15 days from the date of receipt, subject to the documents being valid and complete in all respects. The share Certificates are despatched within a period of one month from the date of its receipt. All the demateralisation request received from the shareholders are confirmed within the specified period of 21 days from the date of its generation of DRN Number by the DPs and physically received in the office of the RTA.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
11.9 Distribution of share holders as at 31st March, 2012
SHARE OR DEBENTURE HOLDING OF NOMINAL VALUE
OF ` 10/- EACH
NUMBER OF SHARE
SHARE HOLDERS SHARE AMOUNT
` ` NUMBER % TO TOTAL (IN `) % TO TOTAL
Upto 5,000 398827 3673 92.426 3988270 5.539
5,001 10,000 106845 132 3.322 1068450 1.484
10,001 20,000 99819 68 1.711 998190 1.386
20,001 30,000 66677 27 0.679 666770 0.926
30,001 40,000 52922 15 0.377 529220 0.735
40,001 50,000 52325 11 0.277 523250 0.727
50,001 1,00,000 127011 18 0.453 1270110 1.764
1,00,001 and above 6295724 30 0.755 62957240 87.439
TOTAL 7200150 3974 100.000 72001500 100.000
Shareholding Pattern as at 31st March, 2012
SL. NO. CATEGORY NO OF SHARES HELD % OF SHAREHOLDING
1 Promoters 51,08,205 70.946
2 NRI’s, OCB’s etc. 4,407 0.061
3 Mutual Funds, Banks, FII’s – 0.000
4 Bodies Corporate 2,77,539 3.855
5 Indian Public 15,64,214 21.724
6 Clearing Member 2,45,785 3.414
TOTAL 72,00,150 100.00
11.10 Dematerialisation of Shares
95.12 % of the Company’s paid-up equity share capital has been dematerialised as on 31st March, 2012. Trading in Equity Shares of the Company is permitted only in dematerialised form as per notification issued by the Securities and Exchange Board of India (SEBI).
Liquidity
The shares of the company are being regularly traded in the Bombay Stock Exchange.
11.11 Plant Location- Bhiwadi
SP- 917 & 918, Phase-III, Bhiwadi, Dist- Alwar, Rajasthan-301019
11.12 Address for Correspondence
For share transfer, transmission and demateralisation request M/s. MAS Services Ltd. T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi - 110 020 Ph: 26387281/82/83, Fax: 26387384, email: [email protected], website: www.masserv.com. Any
assistance relating to such matters or Annual Report may be taken up with Mr. Ranjan Kumar Sahu, Company Secretary & Sr. Manager-Legal at the registered office of the company at 4, Community Centre, Saket, New Delhi - 110 017, Telephone No. 011-40504562, Telefax Nos. 011-26852036, email: [email protected] or [email protected].
Annexure 1 to the Corporate Governance Report
To the ShareholdersAffirmation of compliance with Code of Business Conduct. I, Dr. Rohini Ahluwalia, Vice Chairperson (CEO) declare that the Board of Directors of the Company has received affirmation on compliance with the Code of Business Conduct for the period from 1st April, 2011 or date of their joining the Company, whichever is later to 31st March, 2012 from all members of the Board and employees under Senior Management Cadre.
Place : New Delhi Dr. Rohini AhluwaliaDate : 08.08.2012 Vice Chairperson (CEO)
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
AUDITORS’ CERTIFICATEToThe members ofAhlcon Parenterals (India) Limited
We have examined the compliance of conditions of Corporate Governance by Ahlcon Parenterals (India) Limited for the year ended on March 31, 2012, as stipulated in Clause 49 of the Listing Agreement of the said company with Stock Exchange(s).
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the corporate Governance. It is neither an audit nor an expression of opinion of the financial statement of the Company.
In our opinion and the to the best of our information and according to the explanation given to us, we certify that the Company has complied
with conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We state that no investor grievance is pending for a period of exceeding one month against the Company as per the records maintained by the Shareholders / Investor Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For ARUN K. GUPTA & ASSOCIATES Chartered Accountants
Firm Registration No. 000605N
SACHIN KUMARPlace: New Delhi PartnerDated: 08.08.2012 M.NO. 503204
Dated: 30.05.2012ToThe Board of Directors,Ahlcon Parenterals (India) Limited4, Community Centre, Saket,New Delhi-110017
We hereby certify that for the financial year ending 31st March, 2012, on the basis of the review of the financial statements and the cash flow statement and to the best of our knowledge and belief that:-
1. These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
2. These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations;
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year ended on 31st March, 2012, which are fraudulent, illegal or violative of the Company’s code of conduct.
4. We accept responsibility for establishing and maintaining internal controls. We have evaluated the effectiveness of the internal control system of the company and we have disclosed to the auditors and the Audit Committee those deficiencies, of which we are aware, in the design of operation of the internal control systems and that we have taken the required steps to rectify these deficiencies.
5. We further certify that: -
a) There have been no significant changes in internal control during this year.
b) There have been no significant changes in accounting policies during this year.
c) There have been no instances of significant fraud of which we have become aware and involvement therein, of management or an employee having a significant role in the company’s internal control system.
Dr. Rohini Ahluwalia Rajeev Kumar WaliaVice Chairperson (CEO) Chief Financial Officer
CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
AUDITORS’ REPORTTo,The Members of AHLCON PARENTERALS (INDIA) LIMITED.
1. We have audited the attached Balance Sheet of Ahlcon Parenterals (India) Ltd., as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;
(iii) The balance sheet, Statement of Profit and Loss and cash flow statement dealt with by this report are in agreement with the books of account;
(iv) In our opinion, the balance sheet, Statement of Profit and Loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2012;
(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For ARUN K. GUPTA & ASSOCIATES Chartered Accountants
Firm Registration No. 000605N
SACHIN KUMARPlace : New Delhi PartnerDated : 30.05.2012 M.NO. 503204
ANNEXURE TO THE AUDITORS’ REPORT(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)
Ahlcon Parenterals (India) Limited
1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management during the year has physically verified the fixed assets and no material discrepancies have been noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the Company and the nature of its business. In our opinion the company has not disposed of any substantial part of its fixed assets during the year and
the going concern status of the company is not affected.
2. The management has conducted physical verification of inventory at reasonable intervals. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory except for work in progress, which has been determined on the physical verification at the year-end. No material discrepancies in inventory were noticed on physical verification.
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
3. i. As informed to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.
ii. As informed to us, the Company has not taken any loan, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations given to us, there is an adequate internal control commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Accordingly the issue of continuing failure to correct major weakness in internal control in these areas does not apply.
5. According to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements
entered into the register maintained under Section 301 and exceeding the value of five lacs rupees.
6. The Company has not accepted any deposits from the public within the meaning of section 58A & 58AA of the Companies Act, 1956 and the rules made there under.
7. In our opinion, internal audit system of the company is commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records.
9. i. According to the records of the company, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Wealth Tax, Sales Tax, Service Tax, Customs duty and Excise duty outstanding, as at 31st March, 2012 for a period of more than six months from the date they became payable except for Entry Tax (Rajasthan) ` 96,918/- for F.Y. 2007-08, ` 1,33,668/- for F.Y. 2008-09 ` 2,51,496/- for F.Y. 2009-10 ` 1,89,806/- for F.Y. 2010-11, ` 4,87,030/- for F.Y. 2011-12 and Income Tax of ` 2,26,864/-, ` 1,04,936/-, ` 43,334/- respectively for F.Y. 2000-01, F.Y. 2002-03 & F.Y. 2004-05.
ii. According to the records of the Company, the dues outstanding of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Excise Duty and Cess on account of any dispute are as under:
NATURE OF STATUTE
NATURE OF DUES AMOUNT (`) PERIOD TO WHICH AMOUNT RELATES
FORUM WHERE DISPUTE IS PENDING
Central Excise Penalty on Service Tax on Transport Services
113189/- April 05 to September 05 RajasthanHighCourtBench,Jaipur
Central Excise Excise Duty on Physician Sample
16,67,708/- April 05 to March 06 Customs, Excise and Service Tax appellate Tribunal, New Delhi
Central Excise Service Tax on Foreign based services
9,01,021/- April 06 to August 09 Customs, Excise and Service Tax appellate Tribunal, New Delhi
Penalty on above 9,01,021/- -do-Penalty on above 5,000/- -do-
Central Excise Cenvat Credit on Photocopy of bill of entry
6,08,056/- 2009-2010 JointCommissioner,Jaipur,Rajasthan
Central Excise Service Tax on Foreign based services
1,15,342/- April 10 to March 11 Asst. Commissioner, Bhiwadi, Rajasthan
Central Sales Tax Demand against non submission of forms
14,19,780/- 2007-2008 to 2009-2010 Commercial Tax Officer, Bhiwadi, Rajasthan
Central Sales Tax Interest on Sales Tax 3,47,427/- 1999-2000 to 2009-2010 Commercial Tax Officer, Bhiwadi, Rajasthan
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
10. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately proceeding financial year.
11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or bank.
12. According to the information and explanation given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanation given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund, nidhi / mutual benefit fund and Societies.
14. The Company has not dealt / traded in shares, securities, debentures and other investments.
15. We have been informed that the company has not given any guarantee for loans taken by others from bank & financial institutions.
16. Based on information and explanations given to us by the management the term loans were applied for the purpose for which loans were obtained.
17. According to the information & explanation given and on the basis of overall examination of balance sheet of the company in our opinion no short term funds have been used for long term investments during the year.
18. During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.
19. During the period covered by our audit, the Company has not issued any debentures.
20. The company has not raised any money through a public issue during the year.
21. Based upon the audit procedures performed by us for expressing our opinion on these financial statements and as per information & explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For ARUN K. GUPTA & ASSOCIATES Chartered Accountants
Firm Registration No. 000605N
SACHIN KUMARPlace : New Delhi PartnerDated : 30.05.2012 M.NO. 503204
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
BALANCE SHEET AS AT 31ST MARCH, 2012
PARTICULARS NOTE AS AT 31ST MARCH, 2012
AS AT 31ST MARCH, 2011
` ` ` `
EQUITY AND LIABILITIES
Shareholders’ Funds
Share Capital 1 81,001,500 81,001,500
Reserves and Surplus 2 340,995,614 421,997,114 299,998,339 380,999,839
Non-Current Liabilities
Long Term Borrowings 3 70,144,447 113,333,636
Deferred Tax Liabilities (net) 4 63,800,424 63,266,016
Long Term Provisions 5 3,910,368 137,855,239 2,556,037 179,155,689
Current Liabilities
Short Term Borrowings 6 116,435,779 91,147,070
Trade Payables 7 67,586,395 55,862,662
Other Current Liabilities 8 79,689,902 85,194,533
Short Term Provisions 9 7,362,291 271,074,367 13,894,473 246,098,738
TOTAL 830,926,720 806,254,266
ASSETS
Non Current Assets
Fixed assets
Tangible Assets 10 496,840,137 499,891,725
Intangible Assets 10 2,955,325 3,505,666
Capital Work-In-Progress 10 31,903,177 24,921,785
Long-Term Loans and Advances 11 24,245,088 17,958,527
Other Non-current Assets 12 4,194,084 560,137,811 3,585,184 549,862,887
Current Assets
Inventories 13 97,370,459 76,202,966
Trade Receivables 14 129,980,519 145,693,414
Cash and Cash Equivalents 15 19,036,958 12,054,682
Short Term Loans and Advances 16 15,121,820 18,539,847
Other Current Assets 17 9,279,153 270,788,909 3,900,470 256,391,379
TOTAL 830,926,720 806,254,266
Significant Accounting Policies Notes on Financial Statements
(1 to 37)
As per our report of even dateFor Arun K. Gupta & AssociatesChartered AccountantsFirm Registration No : 000605N
Sachin Kumar Bikramjit Ahluwalia Dr. Rohini AhluwaliaPartner Chairman Vice Chairperson (CEO)M. No: 503204
Place : New Delhi Rajeev Kumar Walia Ranjan Kumar SahuDate : 30-05-2012 Chief Financial Officer Company Secretary
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS NOTE YEAR ENDED 31ST MARCH, 2012
YEAR ENDED 31ST MARCH, 2011
` ` ` `
INCOME
Revenue from Operations 18 866,407,011 677,380,976
Less: Excise duty 18 69,379,425 53,044,901
Revenue from Operations (Net) 797,027,586 624,336,075
Other Income 19 9,077,891 5,402,788
Total Revenue 806,105,477 629,738,863
EXPENDITURE
Cost of Materials Consumed 20 310,571,323 233,374,008
Purchases of Stock-in-Trade 20 144,926 11,897,288
Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade
21 (13,893,868) (13,422,761)
Employee Benefits Expense 22 130,403,511 104,423,500
Finance Costs 23 36,991,401 24,708,975
Depreciation and Amortisation Expense 10 33,959,591 28,931,582
Other Expenses 24 235,585,116 174,998,303
Total expenses 733,762,000 564,910,895
Profit Before Tax 72,343,477 64,827,968
Tax Expenses:
Current Tax Expense for current year 21,657,570 13,239,564
Less: MAT Credit Entitlement (585,061) 21,072,509 (7,302,775) 5,936,789
Current Tax Expense Relating to Prior years 743,492 –
Net Current Tax Expense 21,816,001 5,936,789
Deferred Tax 534,408 15,970,299
22,350,409 21,907,088
Profit for the Year 49,993,068 42,920,880
Earnings per Equity Share of - Face Value of ` 10 /- each
Basic 25 6.94 5.87
Diluted 6.94 5.87
Significant Accounting Policies Notes on Financial Statements
(1 to 37)
As per our report of even dateFor Arun K. Gupta & AssociatesChartered AccountantsFirm Registration No : 000605N
Sachin Kumar Bikramjit Ahluwalia Dr. Rohini AhluwaliaPartner Chairman Vice Chairperson (CEO)M. No: 503204
Place : New Delhi Rajeev Kumar Walia Ranjan Kumar SahuDate : 30-05-2012 Chief Financial Officer Company Secretary
STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
Significant Accounting Policies
1 Nature of Operations
Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.
2 Statement of Significant Accounting Policies
a. Basis of Accounting
i The Accounts of the Company are prepared under the historical cost convention. For recognition of Income and Expenses, accrual basis of accounting is followed except for claims not accepted / acknowledged, which are accounted for on cash basis on account of uncertainties.
ii Gratuity and Leave encashment liability is accounted for on accrual basis as per the Acturial Valuation determined, at the end of accounting year.
iii Cenvat benefit on the Raw Material stocks is accounted for on the basis of production plan for excisable and non - excisable products.
b. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Sale of Goods
Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. It includes excise duty but excludes sales return, volume discount and value added tax / sales tax. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year.
Revenue from the sale / Contract Packaging of goods is recognised upon dispatch of goods to the customers and shown net of sales tax and excise duty.
Export Benefit
Export Benefits constituting import duty benefits under Duty Exemption Pass Book (DEPB) / Duty Draw Back are accounted for on accrual basis.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
c. Fixed Assets
Fixed Assets have been shown at cost of acquisition, comprising of purchase price (net of rebates and discounts) levies and any other directly attributable cost and indirect expenditure for bringing the asset to its working condition for the intended use less accumulated depreciation
d. Depreciation
i. Depreciation on all completed Fixed Assets is provided on the Straight Line Method in accordance with the Schedule XIV of Companies Act, 1956.
ii. Leasehold land is amortized over the period of lease.
iii. Software costs relating to acquisition and development are capitalized in the year of purchase and amortized on a straight-line basis over its useful life not exceeding 10 years.
iv. Improvement in Building is written off in three equal annual installments.
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
e. Borrowing Cost
Borrowing costs specifically relatable to acquisition of fixed assets are capitalized as part of the cost of fixed assets. Other borrowing costs are charged to revenue.
f. Inventories
Inventories are valued as follows :
Finished goods and Work in Progress : Lower of cost and net realizable value.
Scrap : Net Realisable value
Raw Material, Stores and Spare and others : Lower of cost and net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products, in which they will be incorporated, are expected to be sold at or above cost. Cost of Raw materials is determined on a monthly moving weighted average basis and cost of stores and spares is determined on transaction moving weighted average.
g. Foreign Currency Transactions
The monetary items of foreign currency transactions (not covered under forward contracts) are converted into Indian Rupees at the exchange rates prevailing on the date of Balance Sheet. The Exchange difference on such conversion is adjusted in Income/Expenditure. Foreign Currency transactions are recognized at the exchange rate prevailing at the time of transaction.
In respect of Forward Exchange Contract entered into by the Company, the difference between the contracted rate and the rate at the date of transaction is recognized as gain or loss over the period of contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.
h. Share issue expenses are amortised in 5 yearly equal installments.
i. Current Tax is being provided as per the prevailing provisions of Income Tax Act, 1961.
j. In accordance with AS 14 on ‘Disclosure of Revenue from Sales Transactions’ issued by Institute of Chartered Accountants of India, excise duty on turnover has been reduced from turnover in Profit & Loss Account.
k. Deferred Taxation
Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the substantively enacted rate of tax on the Balance Sheet date, to the extent that the timing differences are expected to crystallize / capable of reversal as deferred tax charge / benefit in the Profit and Loss Account and as deferred tax liability / asset in the Balance Sheet.
l. Impairment of Assets
Consideration is given at each balance sheet date to determine whether there is any indication of the impairment / loss of the fixed assets. If any indication exists, an asset recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.
m. Retirement and other Employee Benefits
Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.
Retirement benefits in the form of Provident Fund (where contributed to the Regional PF Commissioner) is a defined contribution scheme
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
and the contributions are charged to the Profit and Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.
Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.
Actuarial gains/losses are immediately taken to Profit and Loss account and are not deferred.
n. Segment Reporting
1. Business Segment: In the opinion of the management, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standard 17 ‘Segment Reporting’, prescribed by the companies (Accounting Standards) Rules, 2006.
2. Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.
Accordingly, Information about secondary business segment have been considered for disclosure as follows:
For Sales Revenue
• SalesrevenuewithinIndiaincludesSalestocustomerswithinIndia.
• SalesrevenueoutsideIndiaincludesSalestocustomerslocatedoutsideIndia.
For Carrying Amount of Geographical Segment Assets (i.e. Debtors)
Carrying amount receivables / (Advance from Customers) of Geographical segmented assets are as follows:
• ReceivableswithinIndia
• ReceivablesoutsideIndia
• SegmentLiabilitiesoutsideIndia(AdvancefromCustomers)
For Common Fixed Assets
The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, segregated figures are not furnished.
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 01 – SHARE CAPITAL
Authorised Share Capital
1,10,00,000 Equity Shares of ` 10/- each 110,000,000 110,000,000
70,00,000 Preference Shares of ` 10/- each 70,000,000 70,000,000
180,000,000 180,000,000
Issued, Subscribed and fully paid up
72,00,150 Equity Shares of ` 10/- each 72,001,500 72,001,500
9,00,000, 6% Redeemable Cumulative Preference Shares of ` 10/- each fully paid up
9,000,000 9,000,000
Total Share Capital 81,001,500 81,001,500
a) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:
AS AT 31ST MARCH, 2012 AS AT 31ST MARCH, 2011
Number of shares
` Number of shares
`
Equity Shares
At the beginning of the year 7,200,150 72,001,500 7,200,150 72,001,500
Add: Shares issued during the year – – – –
Outstanding at the end of the period 7,200,150 72,001,500 7,200,150 72,001,500
6% Redeemable Cumulative Preference Shares
At the beginning of the year 900,000 9,000,000 900,000 9,000,000
Add: Shares issued during the period – – – –
Outstanding at the end of the year 900,000 9,000,000 900,000 9,000,000
b) Terms / rights / preferences and restrictions attached to the each class of shares
(i) Terms / rights attached to Equity Shares
The Company has fully paid up equity shares having a par value of ` 10/- per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupee.
During the year ended March 31, 2012, the amount of final dividend for 2010 -11 distributed to equity shareholders was ` 1.50 per share (previous year ̀ 1.50 per share for 2009-10). Further during the year Interim dividend for 2011-12 was also distributed to equity share holder at ` 1.00 per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.
(ii) Terms / rights attached to Preference Shares
The Company has fully paid up 6% Redeemable cumulative preference shares having a par value of ` 10/- per share. Each holder of redeemable preference shares entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to redeemable preference shares. The Company declares and pays preference dividend in Indian rupee.
The preference shares are non-convertible and non - participatory and are redeemable at par by way of a put and call options at any time after a period of two years from the date of their allotment i.e. 28.10.2006 by giving one month prior notice either by the Company or by preference shareholders.
During the year ended March 31, 2012, neither company nor preference shareholders have exercised the call / put option.
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 25 9/11/2012 5:09:03 PM
26
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
c) Details of shares held by each shareholder holding more than 5% shares in the Company
CLASS OF SHARES / NAME OF SHAREHOLDER AS AT 31ST MARCH, 2012 AS AT 31ST MARCH, 2011
Number of shares held
% holding in that class of
shares
Number of shares held
% holding in that class of
sharesEquity Shares
Bikramjit Ahluwalia 2,949,312 41 2,941,312 41
Sudarshan Walia 709,610 10 709,610 10
Rohini Ahluwalia 469,710 7 469,710 7
Redeemable Preference Shares
Chander P. Sharma and Sneh L. Sharma 430,000 48 430,000 48
Sneh L. Sharma and Chander P. Sharma 470,000 52 470,000 52
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 02 – RESERVES AND SURPLUS
Capital Reserve
State Subsidy on Fixed Capital Investment 1,721,246 1,721,246
Surplus on Reissue of Forfeited Shares 33,000 1,754,246 33,000 1,754,246
Capital Redemption Reserve 29,000,000 29,000,000
General Reserve
Balance as per last financial statement 41,000,000 35,000,000
Add: Transferred from Surplus in Statement of Profit and Loss 6,000,000 47,000,000 6,000,000 41,000,000
Surplus / (Deficit) in Statement of Profit and Loss
Balance as per last financial statement 228,244,095 204,546,913
Add: Profit for the year 49,993,068 42,920,880
Less: Appropriations
Interim Dividend distributed to Equity Shareholders 7,200,150 –
Final Dividend Proposed to be distributed to Equity Shareholders – 10,800,225
Interim Dividend distributed to Preference Shareholders 405,000 –
Dividend proposed to be distributed to Preference Shareholders 135,000 540,000
Tax on Interim Dividend 1,233,745 –
Tax on Final Dividend 21,900 1,883,475
Transferred to General Reserve 6,000,000 6,000,000
Net Surplus in Statement of Profit & Loss 263,241,368 228,244,093
Total Reserves and Surplus 340,995,614 299,998,339
NOTE 03 – LONG-TERM BORROWINGS
From Banks (Secured)
Term Loans 70,144,447 112,844,421
Vehicle Loan – 489,215
Total Long-Term Borrowings 70,144,447 113,333,636
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 26 9/11/2012 5:09:03 PM
27
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
a) Term loans from Punjab & Sind Bank are secured by way of first and exclusive charge on the specific machinery purchased against the terms loans and on other fixed assets including hypothecation and mortgage on land & building of the company as well as on all the current assets of the company. The said loans is further secured by the personnel guarantee of the Chairman and two promoter directors in their individual capacity. The term loans bears floating interest at the rate, base rate plus 2.75% p.a. The loans are repayable in quarterly installments of ` 28.23 lacs and ` 78.75 lacs respectively along with interest.
b) Vehicle loan is secured by hypothecation of specific vehicle acquired out of proceeds of the loan and carries interest at the rate 8.75% p.a.
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 04 – DEFERRED TAX LIABILITY
Deferred Tax Liabilities
Fixed Assets : Impact of difference between tax depreciation and depreciation / amortisation charged for financial reporting
70,893,187 68,329,213
Gross Deferred Tax Liability 70,893,187 68,329,213
Deferred Tax Assets
Effect of expenditure debited to statement of profit and loss in the current year but allowed for tax in the following years.
7,092,763 5,063,197
Gross Deferred Tax Assets 7,092,763 5,063,197
Net Deferred Tax Liability / (Assets) 63,800,424 63,266,016
Deferred Tax Liability / (Assets) for the year 534,408 15,970,298
NOTE 05 – LONG-TERM PROVISIONS
Provision for Leave Encashment 3,910,368 2,556,037
Total Long Term Provisions 3,910,368 2,556,037
NOTE 06 – SHORT-TERM BORROWINGS
Secured Working Capital Facility from Bank 116,435,779 91,147,070
Total Short-Term Borrowings 116,435,779 91,147,070
Note
(i) Working Capital facility from Punjab & Sind Bank is secured by way of first exclusive hypothecation charge on entire current assets (both present & future) including stock of raw materials, finished goods, work in progress, stores & spares etc and assignment of entire book debts of the Company and further secured by way of equitable mortgage of industrial land & building of the company at its Bhiwadi works, Rajasthan, and the personal guarantee of the Chairman and two promoter directors in their individual capacity.
(ii) The Working Capital facility from Punjab & Sind Bank is repayable on demand and carries interest at base rate plus 2.75% p.a.
NOTE 07 – TRADE PAYABLES
Trade Payables
Total Outstanding Dues of Micro, Small & Medium Enterprises (Refer Note 27)
2,188,976 462,027
Total Outstanding Dues other than Micro, Small & Medium Enterprises 65,397,419 55,400,635
Total Trade Payables 67,586,395 55,862,662
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 27 9/11/2012 5:09:04 PM
28
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 08 – OTHER CURRENT LIABILITIES
Current Maturities of Term Loans 42,793,500 42,793,500
Current Maturities of Vehicle Loan 483,486 535,859
Interest Accrued and Due on Borrowings 1,037,810 3,588,282
Unpaid Dividend 1,708,384 1,723,334
(To be transferred to Investor Education & Protection Fund as and when due)Due to Statutory Authorities 7,160,421 6,179,181
Trade / Security Deposits 660,000 812,000
Payables for Capital Goods 1,734,147 7,640,457
Advances from Customers 17,254,779 14,439,896
Due to Director 99,554 21,000
Expenses Payable 6,757,821 7,461,024
Total Other Current Liabilities 79,689,902 85,194,533
NOTE 09 – SHORT-TERM PROVISIONS
For Employee Benefits:
Provision for Bonus 3,084,818 2,694,506
Provision for Leave Encashment 508,537 954,335
Provision for Gratuity 1,092,615 1,614,680
Total Provision for Employee Benefits 4,685,970 5,263,521
Others:
Provision for Taxation (Net of Advance Tax Payments ` 1,91,38,149/- Previous Year ` 1,78,32,312/-)
2,519,421 (4,592,748)
Provision for Proposed Equity Dividend – 10,800,225
Provision for Proposed Preference Dividend 135,000 540,000
Provision for Tax on Proposed Dividend 21,900 1,883,475
Total Others 2,676,321 8,630,952
Total Short-Term Provisions 7,362,291 13,894,473
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 28 9/11/2012 5:09:04 PM
29
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”SC
HE
DU
LE 1
0 –
FIX
ED
ASS
ET
S
PAR
TICU
LARS
G
ROSS
BLO
CKAC
CUM
ULA
TED
DEP
RECI
ATIO
N /
AMO
RTIS
ATIO
N
NET
BLO
CK
AS A
T
01-04
-2011
ADD
ITIO
NS
DU
RIN
G T
HE
YEAR
ADJU
STM
ENTS
DU
RIN
G T
HE
YEAR
AS A
T
31-03
-2012
AS A
T
01-04
-2011
FOR
THE
PERI
OD
ADJU
STM
ENTS
UP
TO
31-03
-2012
AS A
T
31-03
-2012
AS A
T
31-03
-2011
``
``
``
``
``
TAN
GIB
LE A
SSE
TS:
Land
(Lea
se h
old)
29,0
29,5
18–
–29
,029
,518
1,92
3,65
229
3,22
7–
2,21
6,87
926
,812
,639
27,1
05,8
66
Bui
ldin
gs89
,074
,262
––
89,0
74,2
6227
,840
,359
2,98
3,23
1–
30,8
23,5
9058
,250
,672
61,2
33,9
03
Impr
ovem
ent i
n
Bui
ldin
g
8,14
1,19
43,
651,
405
–11
,792
,599
6,69
8,69
893
3,65
0–
7,63
2,34
84,
160,
251
1,44
2,49
6
Plan
t & M
achi
nery
646,
958,
950
15,9
64,8
713,
951,
747
658,
972,
074
249,
001,
717
27,1
11,0
392,
144,
224
273,
968,
532
385,
003,
542
397,
957,
233
Furn
iture
& F
ixtu
res
7,46
1,45
175
3,62
1–
8,21
5,07
25,
583,
675
503,
901
–6,
087,
576
2,12
7,49
51,
877,
776
Off
ice
Equ
ipm
ent
14,1
47,1
171,
656,
471
–15
,803
,588
9,13
2,23
556
2,58
7–
9,69
4,82
26,
108,
766
5,01
4,88
2
Veh
icle
s6,
576,
178
10,2
69,0
2757
6,33
916
,268
,866
1,31
6,60
983
5,89
526
0,41
01,
892,
094
14,3
76,7
725,
259,
569
SUB
TO
TAL
(A)
801,
388,
670
32,2
95,3
954,
528,
086
829,
155,
979
301,
496,
945
33,2
23,5
312,
404,
634
332,
315,
842
496,
840,
137
499,
891,
725
INT
AN
GIB
LE A
SSE
TS
Soft
war
e4,
367,
163
185,
720
–4,
552,
883
861,
497
736,
061
–1,
597,
558
2,95
5,32
53,
505,
666
Sub
Tota
l (B
)4,
367,
163
185,
720
–4,
552,
883
861,
497
736,
061
–1,
597,
558
2,95
5,32
53,
505,
666
Tota
l (A
)+(B
)80
5,75
5,83
332
,481
,115
4,52
8,08
683
3,70
8,86
230
2,35
8,44
233
,959
,591
2,40
4,63
433
3,91
3,39
949
9,79
5,46
250
3,39
7,39
1
Cap
ital
Wor
k in
Prog
ress
Plan
t & M
achi
nery
Und
er E
rect
ion
453,
589
5,12
8,90
325
1,58
95,
330,
903
––
––
5,33
0,90
345
3,58
9
Bui
ldin
g U
nder
Con
stru
ctio
n
24,4
68,1
962,
104,
078
–26
,572
,274
––
––
26,5
72,2
7424
,468
,196
SUB
TO
TAL
(C)
24,9
21,7
857,
232,
981
251,
589
31,9
03,1
77–
––
–31
,903
,177
24,9
21,7
85
Gra
nd T
otal
(Cur
rent
Year
)
830,
677,
618
39,7
14,0
964,
779,
675
865,
612,
039
302,
358,
442
33,9
59,5
912,
404,
634
333,
913,
399
531,
698,
639
528,
319,
176
Gra
nd T
otal
(Pre
viou
s
Year
)
649,
825,
936
189,
164,
796
7,34
7,70
383
1,64
3,10
927
4,92
6,18
928
,931
,582
1,49
9,33
030
2,35
8,44
252
9,28
4,58
837
4,89
9,74
7
Not
e :
(i)
Add
ition
s to
Fix
ed A
sset
s in
clud
es `
42,
25,7
15/-
(Pre
viou
s Ye
ar `
Nil)
tow
ards
Ass
ets
used
for
Res
earc
h an
d D
evel
opm
ent.
(ii
) A
dditi
ons
to P
lant
& M
achi
nary
incl
udes
Pre
oper
ativ
e E
xpen
ses
Cap
ital
ised
` N
il (P
revi
ous
Year
` 4
6,51
,008
/-)
Par
ticu
lars
Cur
rent
year
(`)
Pre
viou
s
year
(`)
a)
Ban
k C
harg
esN
il1,
439,
955
b)
Inte
rest
on
term
loan
Nil
2,02
0,33
9
c)
Lega
l & P
rofe
ssio
nal c
harg
esN
il68
6,80
0
d)
Trav
ellin
g E
xpen
seN
il35
6,73
0
e)
Mis
c. E
xpen
ses
Nil
147,
184
Tota
lN
Il4,
651,
008
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 29 9/11/2012 5:09:04 PM
30
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 11 – LONG-TERM LOANS AND ADVANCES
Unsecured Considered Good
Capital Advances 2,121,966 965,410
Loans and Advances to Employees 783,131 274,501
Advance Income Tax (Net of Provisions) 13,452,155 9,415,841
MAT Credit Entitlement 7,887,836 7,302,775
Total Long Term Loans & Advances 24,245,088 17,958,527
NOTE 12 – OTHER NON-CURRENT ASSETS
Unsecured Considered Good
Security Deposits
Earnest Money Deposits 400,000 1,000,000
Other Security Deposits 3,794,084 2,585,184
Total Other Non - Current Assets 4,194,084 3,585,184
NOTE 13 – INVENTORIES (AT LOWER OF COST AND NET REALISABLE VALUE)
Raw Materials 26,778,441 22,158,148
Work-In-Progress 13,251,079 6,118,319
Finished Goods (other than those acquired for Trading) 31,946,074 25,596,859
Stock-In-Trade (acquired for Trading) 22,108 223,511
Stores and Spares 12,685,428 12,274,183
Scrap 662,128 48,832
Packing Materials 15,749,638 13,681,615
Gross total 101,094,896 80,101,467
Less Provision for Obsolete Stock 3,724,437 3,898,501
Total Inventory 97,370,459 76,202,966
NOTE 14 – TRADE RECEIVABLES
Receivables for a Period Exceeding Six Months from the date they are Due for PaymentUnsecured, Considered Good 4,716,213 8,441,629
Considered Doubtful 8,611,846 5,253,814
13,328,059 13,695,443
Less: Provision for Doubtful 8,611,846 5,253,814
4,716,213 8,441,629
Other Receivables
Unsecured, Considered Good 125,264,306 137,251,785
Total Receivable 129,980,519 145,693,414
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 30 9/11/2012 5:09:05 PM
31
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS AS AT 31ST MARCH, 2012 (`)
AS AT 31ST MARCH, 2011 (`)
NOTE 15 – CASH AND BANK BALANCE
Cash and Cash Equivalents
Cash on Hand 117,969 222,151
Balances with Banks
In Current Accounts 13,159,184 5,796,548
Unpaid Dividend Accounts* 1,708,384 1,723,334
Deposits with Original Maturity of - Less than 3 Months – –
Total Cash and Cash Equivalents 14,985,537 7,742,033
Other Bank Balances
Deposits with Original Maturity of More than 3 Months but Less than 12 Months (Pledged as Margin Money)
4,051,421 4,312,649
Total Other Bank Balances 4,051,421 4,312,649
Total Cash and Bank Balances 19,036,958 12,054,682
Notes: *These balances are not available for use by the company as they represent corresponding Unpaid Dividend Liabilities.
NOTE 16 – SHORT-TERM LOANS AND ADVANCES
Advances Recoverable in Cash or in Kind or for value to be Received (Unsecured, Considered Good) Earnest Money Deposits
Unsecured Considered Good 889,000 857,233
Considered Doubtful 618,233 –
1,507,233 857,233
Less: Provision for Doubtful 618,233 –
889,000 857,233
Advance to Suppliers
Unsecured Considered Good 836,072 5,117,851
Considered Doubtful 310,029 203,942
1,146,101 5,321,793
Less: Provision for Doubtful 310,029 203,942
836,072 5,117,851
Security Deposits 1,335,190 900,538
Loans and Advances to Employees 1,779,617 576,900
Prepaid Expenses 610,122 660,110
Balances with Government Authorities 9,671,819 10,427,215
Total Short Term Loans & Advances 15,121,820 18,539,847
NOTE 17 – OTHER CURRENT ASSETS
Interest Receivable 495,600 343,279
Export Benefit Receivable 8,783,553 3,557,191
Total Other Current Assets 9,279,153 3,900,470
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 31 9/11/2012 5:09:05 PM
32
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS FOR THE YEAR ENDED 31ST MARCH, 2012 (`)
FOR THE YEAR ENDED 31ST MARCH, 2011 (`)
NOTE 18 – REVENUE FROM OPERATIONS
Sales 552,359,674 401,676,912
Sale Contract Packaging 290,062,760 257,802,915
Other Operating Revenues 23,984,577 17,901,149
866,407,011 677,380,976
Less: Excise Duty 69,379,425 53,044,901
Total 797,027,586 624,336,075
Excise duty on sales amounting to ` 6,92,35,747/- (previous year ` 5,30,44,901/-) has been reduced from sales in statement of profit & loss.
Excise duty differential of ` 92,113/- on increase in stock in the current year and of ` 2,05,562/- on increase in stock in the previous year, has been shown under the manufacturing expense in note 24.
Detail of Goods Sold
Manufactured Goods
IV Infusion 387,789,160 249,638,288
Opthalmics 76,653,708 91,873,712
Injection 40,238,551 6,619,474
Respiratory 46,359,102 40,017,827
Total - Sale of Manufactured Goods 551,040,521 388,149,301
Contract Packaging
IV Infusion 138,764,222 82,634,506
Opthalmics 116,769,088 97,405,955
Injection 10,005,372 9,896,937
Respiratory 24,524,078 30,450,830
Total Sale of Contract Packaging 290,062,760 220,388,228
Traded Goods
Ahlmo Eye Ointment 356,282 193,783
Eye Look Capsule 962,874 1,061,042
IV Fluids – 12,272,786
Total Traded Goods 1,319,156 13,527,611
iii) Other Operating Revenue Comprise:
Sale of Scrap 15,036,123 12,869,259
Duty Drawback and Other Export Incentives 8,715,287 5,031,890
Others 233167 –
Total - Other Operating Revenues 23,984,577 17,901,149
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 32 9/11/2012 5:09:05 PM
33
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS FOR THE YEAR ENDED 31ST MARCH, 2012 (`)
FOR THE YEAR ENDED 31ST MARCH, 2011 (`)
NOTE 19 – OTHER INCOME
Interest Income on Fixed Deposits 395,035 827,534
Foreign Exchange Fluctuation Gain 3,257,480 (564,103)
Rent 36,000 36,000
Profit on Sale of Fixed Assets 2,430 33,636
Liabilities / Provisions Written Back 4,706,875 3,552,018
Miscellaneous Income 680,071 1,517,703
Total Other Income 9,077,891 5,402,788
NOTE 20 – COST OF MATERIALS CONSUMED
Raw Material
Opening stock 21,022,148 13,702,493
Add: Purchases 219,911,205 171,470,959
240,933,353 185,173,452
Less: Closing Stock 24,772,630 21,022,148
Raw Material Consumed 216,160,723 164,151,304
Packing Material Consumed 94,410,600 69,222,704
Total Cost of Material Consumed 310,571,323 233,374,008
Details of Raw Materials
PE Granules 157,525,823 113,802,225
Dextrose 32,425,986 21,133,260
Chemicals and Others 26,208,914 29,215,819
Total 216,160,723 164,151,304
Details of Purchase of Traded Goods
Ahlmo Eye Ointment – 176,789
Eye Look Capsules 144,926 301,412
IV Fluids – 11,419,087
Total 144,926 11,897,288
NOTE 21 – CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
Inventories at the End of the Year:
Finished Goods 31,946,074 25,596,859
Work-In-Progress 13,913,207 6,167,151
Stock-In-Trade 22,108 223,511
45,881,389 31,987,521
Inventories at the beginning of the Year:
Finished Goods 25,596,859 12,266,976
Work-In-Progress 6,167,151 6,227,714
Stock-In-Trade 223,511 70,070
31,987,521 18,564,760
Net Increase / (Decrease) in Inventories 13,893,868 13,422,761
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
Ahlcon AR Stat 110912.indd 33 9/11/2012 5:09:06 PM
34
Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
Details of Finished Goods -
IV Infusion 26,900,326 17,181,470
Opthalmics 4,101,738 6,185,921
Injection 580,482 514,150
Respiratory 363,493 1,715,318
Total 31,946,039 25,596,859
Details of Work-In-Progress
IV Infusion 3,725,372 3,219,532
Opthalmics 3,199,848 1,598,223
Injection 6,539,138 823,794
Respiratory 448,884 525,602
Total 13,913,242 6,167,151
Details of Stock-In-Trade
Ahlmo Eye Ointment 3,063 112752
Eye Look Capsule 19,045 110759
Total 22108 223511
NOTE 22 – EMPLOYEE BENEFIT EXPENSES
Salaries, Wages and Bonus 114,530,102 91,954,874
Contributions to Provident and other Funds 10,473,325 8,064,080
Staff Welfare Expenses 5,400,084 4,404,546
Total Employee Benefit Expenses 130,403,511 104,423,500
NOTE 23 – FINANCE COST
Interest Expense on:
Term Loans 14,728,905 13,606,166
Working Capital 17,542,939 8,131,032
Others 2,960,562 774,332
Other Borrowing Cost 579,075 1,420,113
Bank Charges 1,179,921 777,332
Total Finance Cost 36,991,401 24,708,975
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
PARTICULARS FOR THE YEAR ENDED 31ST MARCH, 2012 (`)
FOR THE YEAR ENDED 31ST MARCH, 2011 (`)
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS FOR THE YEAR ENDED 31ST MARCH, 2012 (`)
FOR THE YEAR ENDED 31ST MARCH, 2011 (`)
NOTE 24 – OTHER EXPENSES
Manufacturing Expenses
Consumption of Stores and Spares 25,416,908 29,194,365
Increase / (Decrease) of Excise Duty on Inventory 92,113 205,562
Power and Fuel 100,016,305 67,654,901
Testing Fees 2,860,500 4,128,816
Repairs and Maintenance - Machinery 4,331,073 2,005,593
Sub Total (A) 132,716,899 103,189,237
Selling and Distribution Expenses
Freight and Forwarding 28,856,796 18,939,008
Sales Commission 5,448,245 7,034,999
Sales Discount 2,320,417 1,047,997
Business Promotion 6,407,433 4,610,369
Bad Trade and other Receivables, Loans and Advances Written Off 3,494,982 32,435
Registration Charges 210,844 1,196,057
Sub Total (B) 46,738,717 32,860,865
Administrative and Other Expenses
Rent 3,523,000 1,207,859
Repairs and Maintenance - Buildings 1,291,109 3,063,215
Repairs and Maintenance - Others 2,730,048 3,539,391
Vehical Running & Maintenance 2,151,745 1,877,826
Insurance 457,996 480,568
Rates and Taxes 2,817,764 1,111,056
Communication 2,458,955 2,531,491
Travelling and Conveyance 11,960,387 11,595,186
Printing and Stationery 2,048,317 1,765,409
Research & Development Exp. (Excluding Depreciation) Refer Note 35 5,315,515 –
Sale Tax Demand 576,403 166,568
Watch & Ward 1,364,777 1,074,301
Electricity & Water Charges 722,831 184,523
Donations 600,000 616,100
Legal and Professional 4,912,860 3,254,505
Director Sitting Fee 170,000 138,000
Membership & Subscription 274,593 334,424
Payments to Auditors 666,004 521,738
Loss on Fixed Assets Sold 10,928 564,491
Provision for Doubtful Trade/Other Receivables, Loans & Advances (Net) 8,502,631 3,023,198
Prior Period Adjustments (Net) 1,782,496 127,639
Miscellaneous Expenses 1,791,141 1,770,713
Sub Total (C) 56,129,500 38,948,201
Total Other Expenses (A+B+C) 235,585,116 174,998,303
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
PARTICULARS FOR THE YEAR ENDED 31ST MARCH, 2012 (`)
FOR THE YEAR ENDED 31ST MARCH, 2011 (`)
NOTE 25 – EARNING PER SHARE (EPS)
Net Profit for Calculation of Basic / Diluted EPS 49,993,068 42,920,880
Weighted Average Number of Equity Shares for Calculating Basic & Diluted EPS
7,200,150 7,200,150
Basic (in `) 6.94 5.87
Diluted EPS (in `) 6.94 5.87
SL. NO.
PARTICULARS CURRENT YEAR (`)
PREVIOUS YEAR (`)
NOTE 26 – CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: -
a Excise duty pending hearing of appeals / writ petitions.
i Cenvat credit availed on raw material utilised on prorata basis 2,275,764 3,990,947
ii Cenvat credit disallowed on inputs – 454,797
iii Other Miscellaneous Cases – 170,586
b. Service Tax
i Reversal of cenvat credit availed on input services 113,189 113,189
ii Demand on import of services 1,922,384 1,922,384
c. Value Added Tax
i Declaration forms pending submission 1,767,512 1,218,974
d Letter of credit for import of raw material 15,209,233 31,972,760
e Bank guarantees 5,949,655 4,536,264
f Duty exemption availed on import of machinery under EPCG Scheme 8,982,469 22,619,163
Based on favourable decisions in similar cases legal opinion taken by the Company, discussions with the solicitors etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (d) above and hence no provision is considered necessary against the same.
i. National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F. No. 21 (807)07/DW IV /NPPA dated 03/09/2008; subsequent letters dated 24/11/2008, 01/05/2009, 08/11/2010 and in continuation letter dated 06/02/2012 have raised a demand of ` 6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to ` 5,59,00,067/- (previous year ` 4,45,95,347/-) thereby aggregating to ` 11,60,92,958/- (Previous year ` 10,47,88,238/-)
ii. Capital Commitments :- Capital contracts remaining to be executed (net of advances) and not provided for ` 1,19,09,039/- (previous year ` 52,96,373/-)
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
SL. NO.
DESCRIPTION CURRENT YEAR (`)
PREVIOUS YEAR (`)
NOTE 27 – AMOUNT DUE TO SUPPLIERS COVERED UNDER MICRO, SMALL AND MEDIUM ENTERPRISES ACT, 2006 ON THE BASIS OF CONFIRMATION RECEIVED IS AS UNDER:I The principal amount and the interest due thereon remaining unpaid to any supplier as at the end
of yearPrincipal Amount Unpaid 2,188,976 462,027
Interest Due 120,887 26,621
II The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during the year.Payment made beyond the Appointed Date 12,195,396 4,782,438
Interest Paid beyond the Appointed Date – –
III The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.
476,528 175,910
IV The amount of interest accrued and remaining unpaid at the end of the year; and 597,415 202,531
V The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006
921,487 324,072
NOTE 28 – GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:
The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.
The Company has also provided long term compensated absences which are unfunded.
The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.
Profit and Loss Account
Net employee benefit expense (recognised in Employee Cost) (Amount in `)
GRATUITY 31ST MARCH, 2012 31ST MARCH, 2011
Current service cost 1,511,408 1,161,323
Interest cost on benefit obligation 698,341 574,792
Expected return on plan assets (837,007) (576,541)
Net actuarial loss / (gain) recognised in the year 532,726 455,106
Past service cost – –
Net benefit expense 1,905,468 1,614,680
Actual return on plan assets 837,007 576,541
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
Balance Sheet
Details of provision for Gratuity (Amount in `)
31ST MARCH, 2012 31ST MARCH, 2011
Defined benefit obligation 11,152,240 8,729,258
Fair value of plan assets 10,059,625 6,461,494
Less: Unrecognised past service cost – –
Plan liability (1,092,615) (2,267,764)
Changes in the present value of the defined benefit obligation are as follows: (Amount in `)
31ST MARCH, 2012 31ST MARCH, 2011
Defined benefit obligation as at April 1 (Opening Balance) 8,729,258 7,464,833
Interest cost 698,341 574,792
Past service cost – –
Current service cost 1,511,408 1,161,323
Benefits paid (319,493) (926,796)
Actuarial losses on obligation 532,726 455,106
Defined benefit obligation as at March 31 (Closing Balance) 11,152,240 8,729,258
The principal assumptions used in determining gratuity benefit obligations for the Company’s plans for last three years are shown below:
31ST MARCH, 2012 31ST MARCH, 2011 31ST MARCH, 2010
Discount rate 8.70% 8.00% 7.70%
Increase in Compensation cost 6.00% 5.50% 5.50%
Rate of Return on Plan Assets 9.15% 9.15% 9.15%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Amount for the current and previous two years are as follows:
GRATUITY
31ST MARCH, 2012 31ST MARCH, 2011 31ST MARCH, 2010 31ST MARCH, 2009
Defined benefit obligation 11,152,240 8,729,258 7,464,833 5,885,903
Plan Assets 10,059,625 6,461,494 5,642,161 4,426,759
Deficit (1,092,615) (2,267,764) (1,822,672) (1,459,144)
Experience adjustments on plan liabilities (Loss) / Gain (760,409) (1,206,745) 194,364 529,296
Experience adjustments on plan assets (Loss)/ Gain – – 76,819 156,725
Contribution to Defined Contribution Plans:
PARTICULARS CURRENT YEAR (`)
PREVIOUS YEAR (`)
Provident Fund 6,756,258 5,124,625
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTE 29
i) AUDITOR’S REMUNERATION
SL.NO.
PARTICULARS CURRENT YEAR (`)
PREVIOUS YEAR (`)
a. For Statutory audit 393,260 358,475
b. For Tax Audit 112,360 82,725
c. Certification and other matters 168,540 110,300
d. Out of pocket expense 25,000 23,077
Total * 699,160 * 574,577
Note : * Including Service tax ` 74,160/- (previous year: ` 52,839/-) claimed / set off as cenvat credit.
ii) DIRECTOR’S REMUNERATION
a. Salaries and allowances 2,400,000 2,160,000
b. Contribution to Provident Fund 326,640 293,976
c. Perquisites 262,949 123,630
Total 2,989,589 2,577,606
Note: Wholetime Director is covered under the Company’s gratuity scheme along with the other employees of the Company. The gratuity liability is determined for all the employees on overall basis by an independent actuarial valuation. The specific amount of gratuity for whole time directors cannot be ascertained separately and accordingly the same has not been included in the above note.
NOTE 30 – LEASE
The Company has taken various residential and office premises under operating lease agreements. These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement. There are no subleases.
PARTICULARS LEASE PAYMENTS
CURRENT YEAR (`)
PREVIOUS YEAR (`)
Total lease payment for the year (Recognised in Profit & Loss Account) 3,516,000 1,151,809
Minimum Lease Payment
Not later than one year 3,450,000 696,000
Later than one year but not later than five years 2,375,000 7,395,000
Later than five years – –
NOTE 31 – RELATED PARTY DISCLOSURES
a. List of Related Parties (As ascertained by the management)
1 Enterprises under Common Control Ahluwalia Contracts (India) Ltd.Ahluwalia Builders Development Group (P) Ltd.Tidal Securities Pvt. Ltd.Capricon Industrials Ltd.Ahlcons India (P) Ltd.Ahlcon Ready Mix Concrete Pvt. Ltd.Dipesh Mining Pvt. Ltd.
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
JiwanjyotiTradersPvt.Ltd.Paramount Dealcomm Pvt. Ltd.Prem Sagar Merchants Pvt. Ltd.Splendor Distributors Pvt. Ltd.Enterprises over which key managerial personal is able to exercise significant influence.Shantidevi Progressive Educational Society Karamchand Ahluwalia Charitable Hospital
2 Individuals owning, directly or indirectly a substantial Interest in the voting power of the CompanyMrs. Sudarshan Walia Director (Also relative of Key Management Personnel)
3 Key Management PersonnelMr. Bikramjit Ahluwalia ChairmanDr. Rohini Ahluwalia Vice Chairperson & Whole Time Director (also relative of Key management personnel)
4 Relative of the key management personnel with whom the transactions have taken place during the yearMrs. Mukta Ahluwalia Daughter of Chairman
5 Non-Executive DirectorsMrs. Sudarshan WaliaMr. Arun Kumar GuptaDr. S.S. AroraProf. G.P. TalwarDr. S.C.L GuptaMr. S.K. Sachdeva
b. Transactions with Related Parties
SL.NO.
PARTICULARS CURRENT YEAR (`)
PREVIOUS YEAR (`)
i Rent Paid to
- Companies under common control 270,000 270,000
- Daughter of Chairman 360,000 360,000
- Wife of Chairman 2,400,000 200,000
ii Managerial Remuneration
- Key Management Personnel 2,989,589 2,577,606
iii Payment of Donation
Enterprises over which key managerial personal is able to exercise significant influence. 600,000 600,000
c. Amount Due from / to Related Parties
i. Included in Current Liabilities
- Due to key management personnel 99,554 21,000
ii - Companies under common control
- Rent 121,500 303,750
- Purchase – 156,587
Note :- No amount has been written off provided for in respect of transaction with related parties.
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTE 32 – SEGMENT REPORTING:
1. Business Segment: In the opinion of the managemnt, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standard 17 ‘Segment Reporting’, prescribed by the companies (Accounting Standards) Rules, 2006.
2. Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.
Information about secondary business Segments:
a. Revenue as per Geographical Markets
CURRENT YEAR (`)
PREVIOUS YEAR (`)
Revenue within India (Gross) 714,197,285 609,399,542
Revenue outside India 152,209,726 67,981,434
Total Gross Revenue 866,407,011 677,380,976
b. Carrying amount of Segment Assets (Debtors) by geographical location of assets
Receivables within India 116,427,215 133,454,898
Receivables outside India 13,553,304 12,238,516
Segment Liabilities outside India (From Customers) (6,870,334) (3,982,207)
Total 123,110,185 141,711,207
Rest of the current assets are common and not segregateable, geographical segment wise.
c. The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, Separate figurers for fixed assets / addition to fixed assets cannot be furnished.
NOTE 33 – DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
Particulars of unhedged foreign currency exposure as at Balance Sheet date:
PARTICULARS CURRENT YEAR PREVIOUS YEAR
AMOUNT IN FOREIGN CURRENCY
AMOUNT (`)
AMOUNT IN FOREIGN CURRENCY
AMOUNT (`)
Import Creditors – – – USD 196,264 9,009,167
Export Debtors USD 264,938 13,553,301 USD 272,360 12,238,516
Advance Given USD 6,867 346,120 USD 11,743 537,199
Advance Received USD 128,978 6,598,476 USD 81,674 3,727,152
EUR 3,978 271,858 EUR 3,978 255,055
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTE 34
DESCRIPTION CURRENT YEAR (`)
PREVIOUS YEAR (`)
a) Expenditure in Foreign Currency (Payment basis)
Bank Charges 318,343 112,154
Business Promotion 3,578,123 2,563,908
Registration Fee / Advance for registration 206,444 1,195,097
b) Remittance in foreign currency on account of dividend :
Interim Dividend
Number of non - resident shareholder 13 –
Number of shares held 22,517 –
Amount of dividend 22,517 –
Final Dividend
Number of non - resident shareholder 18 15
Number of shares held 25,624 9,479
Amount of dividend 38,438 14,219
c) Earning in Foreign Currency:
FOB Value of Exports 151,908,950 67,041,559
d) Value of Imports calculated on CIF basis:
Raw materials 145,911,453 85,453,744
Stores & Spares 1,562,384 10,085,409
Capital Goods – 92,171,711
e) Value of Materials, Stores & spares Consumed:
DESCRIPTION CURRENT YEAR PREVIOUS YEAR
VALUE % VALUE %
Materials
Imported 143,190,623 46.11 96,907,707 41.52
Indigenous 167,380,700 53.89 136,466,302 58.48
310,571,323 100.0 233,374,009 100.00
Stores & Spares
Imported 2,015,717 7.93 8,293,425 28.41
Indigenous 23,401,190 92.07 20,900,940 71.59
25,416,907 100.00 29,194,365 100.00
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
NOTE 35 – RESEARCH AND DEVELOPMENT
Company have incurred during the year, in addition to capital expenditure, revenue expenditure on research and development and the break - up of the amount is as under:
CURRENT YEAR (`)
PREVIOUS YEAR (`)
Material 1,326,711 –
Personnel 3,886,617 –
Printing & Stationery 102,187 –
Depreciation 211,910 –
Total 5,527,425 –
NOTE 36
The promoters of the company viz., Ahluwalia family group, vide letter dated 22nd March, 2012 informed the company that they have executed an agreement to sell their shareholding of equity shares of ` 10 each held by them in the company to B. Braun Singapore Pte. Ltd. (Acquirer). The transfer of aforesaid shares will take place after receiving the necessary approvals by the Acquirer. The Acquirer is an unlisted company incorporated under the laws of Singapore.
NOTE 37
Till the year ended 31st March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for the preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI has been notified under the companies Act, 1956, which has become applicable to the Company. Accordingly in view of the same, the Company has reclassified previous year figures to confirm to this year classification.
As per our report of even dateFor Arun K. Gupta & AssociatesChartered AccountantsFirm Registration No : 000605N
Sachin Kumar Bikramjit Ahluwalia Dr. Rohini AhluwaliaPartner Chairman Vice Chairperson (CEO)M. No: 503204
Place : New Delhi Rajeev Kumar Walia Ranjan Kumar SahuDate : 30-05-2012 Chief Financial Officer Company Secretary
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012
PARTICULARS YEAR ENDED 31ST MARCH, 2012
YEAR ENDED 31ST MARCH, 2011
` ` ` `
A. Cash flow from operating activities
Net Profit / (Loss) before extraordinary items and tax 72,343,477 64,827,968
Adjustments for:
Depreciation and amortisation 33,959,591 28,931,582
(Profit) / loss on sale / write off of assets 8,498 530,855
Finance costs 35,232,405 22,511,530
Interest income (395,035) (827,534)
Liabilities / provisions no longer required written back (4,706,875) (1,612,089)
Bad trade and other receivables, loans and advances written off 3,494,982 32,435
Provision for doubtful trade/other receivables, loans & advances 8,502,631 76,096,197 2,990,763 52,557,542
Operating profit / (loss) before working capital changes 148,439,674 117,385,510
Changes in working capital:
Adjustments for (increase) / decrease in operating assets:
Inventories (20,993,429) (28,420,887)
Trade receivables 9,341,280 (38,002,837)
Short-term loans and advances 2,212,308 (11,959,883)
Long-term loans and advances (5,738,901) (8,825,101)
Other current assets (5,378,683) (334,245)
Mat Credit Entitlement – (20,557,425) 7,302,775 (80,240,179)
Adjustments for increase / (decrease) in operating liabilities:
Trade payables 11,836,265 11,164,372
Other current liabilities (5,504,631) 20,834,540
Short-term provisions 4,015,197 1,006,488
Long-term provisions 1,354,331 11,701,162 372,594 33,377,994
Cash generated from operations 139,583,411 70,523,325
Interest Paid (35,232,405) (22,511,530)
Net income tax paid (19,296,580) (17,832,312)
Net cash flow from / (used in) operating activities (A) 85,054,426 30,179,483
B. Cash flow from investing activities
Capital expenditure on fixed assets, including capital advances (40,619,063) (184,082,779)
Proceeds from sale of fixed assets 2,123,452 766,356
Interest received 395,035 827,534
(Profit) / loss on sale of assets (8,498) (530,855)
Net cash flow from / (used in) investing activities (B) (38,109,074) (183,019,744)
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Ahlcon Parenterals (India) Ltd. “20th Annual Report 2011–12”
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012
PARTICULARS YEAR ENDED 31ST MARCH, 2012
YEAR ENDED 31ST MARCH, 2011
` ` ` `
C. Cash flow from financing activities
Proceeds from long-term borrowings – 124,079,792
Repayment of long-term borrowings (43,189,189) (19,654,075)
Net increase / (decrease) in working capital borrowings 25,288,709 43,439,581
Dividends paid (22,062,595) (13,223,700)
Net cash flow from / (used in) financing activities (C) (39,963,075) 134,641,598
Net increase/(decrease) in Cash and cash equivalents (A+B+C) 6,982,277 (18,198,663)
Cash and cash equivalents at the beginning of the year 12,054,681 30,253,344
Cash and cash equivalents at the end of the year 19,036,958 12,054,681
Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents as per Balance Sheet (Refer Note 19) 19,036,958 12,054,681
Less: Bank balances not considered as Cash and cash equivalents as defined in AS 3 Cash Flow Statements
4051421 4312649
Net Cash and cash equivalents (as defined in AS 3 Cash Flow Statements) included in Note 15
14,985,537 7,742,032
Cash and cash equivalents at the end of the year Comprises:
Cash on hand 117,969 222,151
Balances with Banks:
In current accounts 13,159,184 5,796,548
In deposit accounts with original maturity of less than 3 months – –
Unpaid Dividend Accounts* 1,708,384 1,723,334
14,985,537 7,742,033
Notes: *These balances are not available for use by the company as they represent corresponding Unpaid Dividend Liabilities.
As per our report of even dateFor Arun K. Gupta & AssociatesChartered AccountantsFirm Registration No : 000605N
Sachin Kumar Bikramjit Ahluwalia Dr. Rohini AhluwaliaPartner Chairman Vice Chairperson (CEO)M. No: 503204
Place : New Delhi Rajeev Kumar Walia Ranjan Kumar SahuDate : 30-05-2012 Chief Financial Officer Company Secretary
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NOTES
#
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AHLCON PARENTERALS (INDIA) LIMITEDRegd. Office: 4, Community Centre, Saket, New Delhi-110017
20th Annual General Meeting – September 27, 2012
I certify that I am a member / proxy for the member of the company.I record my presence at the 20th Annual General Meeting of the Company to be held at Ahlcon Public School, Mayur Vihar, Phase-I, New Delhi-110091, at 3.00 P.M. on Thursday, 27th day of September 2012.
------------------------------------------------------------------------------ ------------------------------------------------------------------------------Name of the member/proxy Signature of member/proxy(In BLOCK letters)
Note: Please fill up this attendance slip and hand over at the entrance of the meeting hall.Members are requested to bring their copies of the annual report to the meeting.
I/we --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
of -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
in the district of ------------------------------------------------------------------------------------------------------------------------------------------------------------ being a member / members of the Company, hereby
appoint Shri/Smt. ------------------------------------------------------------------------------ of ------------------------------------------------------------------------------ in the district of ------------------------------------------------------ or
failing him /her --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- of ----------------------------------------------------------------------------------------
in the district of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
as my / our proxy to vote for me / us on my / our behalf at the 20th Annual General Meeting of the Company to be held on Thursday, 27th day of
September 2012 at 03.00 P.M. at Ahlcon Public School, Mayur Vihar, Phase-I, New Delhi-110091 and at any adjournment (s) thereof.
Signed this ------------------------------------------------------------------------------ day of September, 2012. Signature ------------------------------------------------------------------------------
Notes: This form, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Office of the Company, not less than 48 hours before the meeting.
AHLCON PARENTERALS (INDIA) LIMITEDRegd. Office: 4, Community Centre, Saket, New Delhi-110017
(Name of Member)
(Address)
(Name of alternate proxy)
(Address of alternate proxy)
(Address of proxy)
(Name of proxy)
Affix ` 1 Revenue Stamp
please tear here ##
#
ATTENDANCE SLIP
REGD FOLIO No.
DP ID No.
CLIENT ID No.
No. OF SHARES HELD
PROXY FORM
REGD FOLIO No.
DP ID No.
CLIENT ID No.
No. OF SHARES HELD
Ahlcon AR Stat 110912.indd 47 9/11/2012 5:09:09 PM
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Note: Annual Listing Fee for the year 2012-2013 has been paid to all the Stock Exchanges
MAS SERVICES LTD.T-34, 2nd Floor, Okhla Industrial Area,Phase - II, New Delhi - 110 020Ph: 011-26387281/82/83,Fax: 011- 26387384Email: [email protected]: www.masserv.com
For Dematerialisation of SharesISIN No. INE 027C01011
REGISTRAR & SHARE TRANSFER AGENTS
STOCK EXCHANGES(Where the Company’s equity shares are listed)
1. Delhi Stock Exchange Ltd. DSE House, 3/1, Asaf Ali Road, New Delhi - 110002
2. Bombay Stock Exchange Ltd. P. J. Towers, 25th Floor, Dalal Street, Mumbai - 400001
3. Jaipur Stock Exchange Ltd. Jawaharlal Nehru Marg, Malviya Nagar, Jaipur - 302017
4. The Calcutta Stock Exchange Association Ltd. Calcutta Stock Exchange Building 7, Lyons Range, Kolkata - 700001
CORPORATE INFORMATIONBOARD OF DIRECTORS
BANKERS
REGISTERED OFFICE
AUDITORS
Mr. Bikramjit AhluwaliaChairman
Dr. Rohini AhluwaliaExecutive Vice Chairperson, CEO
Ms. Sudarshan Walia, DirectorMr. Arun Kumar Gupta, DirectorProf. G.P. Talwar, DirectorDr. S.S. Arora, DirectorDr. S.C.L. Gupta, DirectorMr. S.K. Sachdeva, Director
Punjab & Sind Bank Syndicate Bank State Bank of Bikaner & JaipurHDFC Bank Ltd.
4, Community Centre, Saket, New Delhi - 110017Tel: +91-11-26852036Fax: +91-11-26852036
MANUFACTURING FACILITIESSP-917 & 918, Phase III, Industrial Area,Bhiwadi - 301019Dist. Alwar, RajasthanTel: +91-01493-305300 Fax: +91-01493-221045
CORPORATE OFFICEM-1, Saket, New Delhi - 110017Tel: +91-011-40504562
WEBSITEwww.ahlconindia.comemail: [email protected]
M/s. Arun K. Gupta & Associates Chartered Accountants, D-58, East of Kailash,New Delhi - 110065
COMPANY SECRETARY Mr. Ranjan Kumar Sahu
CONTENTSNotice.......... 01 Directors’ Report.......... 03 Management Discussion & Analysis Report... 07
Report on Corporate Governance.......... 11 Auditors’ Report.......... 17 Balance Sheet....... 20
Statement of Profit and Loss.......... 21 Notes.......... 22 Cash Flow Statement.......... 44
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Ahlcon Parenterals (India) Limited
Ahlcon Parenterals (India) Limited
4, Community Centre, Saket, New Delhi - 110017, India
Telefax No. 91-11-26852036 | Email: [email protected]
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20th Annual Report 2011-12
www.ahlconinida.com
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