Disclaimer
In this annual report we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements written and oral that we periodically make contain forward-looking statements that set out anticipated results based on the managements plans and assumptions. We have tried wherever possible to identify such statements by using words such as anticipates, estimates, expects, projects, intends, plans, believes and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. We undertake no obligation to publicly update any forwardlooking statements, whether as a result of new information, future events or otherwise.
Vision
To become a globally acceptable API and pharmaceutical manufacturing company by providing quality products that exceed customer expectations and are produced in a safe working environment
Mission
To be the chosen strategic partner of the worlds top ten pharmaceutical companies To grow consistently by entering Custom Synthesis and Contract Manufacturing relationships with large Generic and innovator companies To leverage our cost efficiencies in manufacturing to penetrate world markets across therapeutic segments, including oncology, cardiovascular and anti-hypertensive, among others
Growth driven by: research capabilities robust chemistry skills world class facilities with regulatory approvals integrated growth - horizontal and vertical Strong foothold in over 50 countries
Turnover (Million) PAT (Million) EBIDTA (Million) Net Worth (Million) Gross Block (Million)
` 10123
5 years CAGR 35%
` 512
5 years CAGR 30%
` 1614
March 31, 2012
3039
March 31, 2012
4076
March 31, 2012
Presence
Headquartered in Chandigarh. Operational in 50+ countries (including regulated markets). Listed on the National Stock Exchange (PARABDRUGS) and the Bombay Stock Exchange (533211).
Business
Engaged in the manufacture including contract manufacture of APIs and API intermediates for sales in India and abroad. In the FY 12, moved up the value chain by foraying into the formulations space.
Products
Manufactures over 50 APIs (Active Pharmaceutical Ingredients - sold to formulators to make capsules, tablets, liquids, injections and other dosage forms). Diversifying its product basket with over 20 molecules across 10 therapies in the FY 13-14.
Legacy
Parabolic Drugs Ltd was founded in 1996 by first generation entrepreneurs - Mr. Pranav Gupta & Mr. Vineet Gupta. In 2012, the Company has facilities, across four locations, two state of the art manufacturing plants at Derabassi and Panchkula for APIs, one Custom Synthesis and R&D centre at Barwala and one lifestyle drug manufacturing site at Chachhrauli. Employs over 1400 multi skilled professionals. Listed with BSE & NSE on July 1, 2010.
Facilities
Derabassi (Punjab): This facility has seven units manufacturing the oral and sterile range of cephalosporin APIs and intermediates. Panchkula (Haryana): This facility has two units manufacturing SSPs and API intermediates such as 6-APA. Barwala (Haryana): The research and development centre develops and scales new APIs and API intermediates in all therapeutic segments including non-antibiotic products. It also provides contract research services to innovator companies. Chhachrauli (Punjab): Multi block built in a 27 acre site for drugs for manufacturing non-antibiotic APIs in the new therapies such as CVS, CNS, oncology, antithrombotic, anti-diabetic and pain management.
Regulatory strength
As on date, PDL has filed 23 process patent applications with Indian Patent Office, New Delhi and 43 Drug Master Files across US, EU, Korea, Japan and Canada
Certifications
ISO 14001-2004 OHSAS 18001-2007 WHO-GMP European GMP from EDQM, European Union US FDA (for 6-APA at Panchkula) Japanese PMDA Korean FDA
43
23
Process Patents and one PCT filed with Indian Patents Office, New Delhi
Employees working towards the common vision Markets penetrated across the globe
50+
2010
2011
689.68
2011
1,271.45
2011
6,752.97
2012
943.39
2012
1,614.31
2012
10,123.08
2010
2011
1,125.36
2011
2,879.35
2011
528.73
2012
997.88
2012
3,039.00
2012
512.12
Milestones
Foray into herbal nutraceuticals Commissioning of multi-purpose block 3 & New Sterile Facility Approval from Korean FDA Filing of 7 DMFs across US, Korea and Japan Entry into finished dosage space Diversification into non antibiotics
12 20 11 -
Listing of company on the stock exchanges Received accreditation for compliance with European Good Manufacturing Practices standards 18 regulatory filings Received 'Certificate of Suitability' (COS) for Cefixime Received DNV's certificate for OHSAS 18001-2007 standards Commencements of commercial operations in the Multipurpose block 2 at Derabassi that added 325 TPA Cephalosporin capacities Recognized as a Star Export house by the Ministry of Commerce Filed 7 patents applications in FY 11
20 10 -
11
Certified by WHO-GMP for the Derabassi facility Received ISO 14001-2004 certification for environment and safety management at Derabassi Commissioned new R&D Centre at HSIIDC, Barwala Filed six Drug Master Files in the US and Europe
20
08
-0
Diversified into custom synthesis for innovator companies Commissioned two plants for additional Cephalosporin API capacities Filed eight DMFs in the EU / US Filed nine patent applications
20
07
Filed three US DMFs Established a sterile facility Commissioned a dedicated R&D wing
-0 8
05
-0
20
-0 5
20
03
-0 2
20
00
-9
Commenced commercial operation of PDL I at unit in Derabassi for Penicillin API and API intermediates
19
97
20
09
-1 0
Our objective towards creating a responsible enterprise will be led by the following actions:
Taking your company to newer geographies Your company has a considerable presence in over 50 countries. Historically, our growth in these markets has come through the antibiotics orals. With the expansion of sterile basket, addition of new verticals and products, your company looks to strengthen its presence across the globe, especially the regulated markets. The Regulated markets will also add a thrust to the margins and profitability.
Achieving highest International quality standards Your company hasa distinctive recognition of being one of the few pharmaceutical companies certified by the European GMP . With the audit approvals of over 40 pharmaceutical companies, your company foresees the regulatory approvals through other international agencies including the Japanese PMDA and the USFDA
Growth through developments in research and development The research team at Parabolic continues to drive the business by creating a grid of niche molecules and working on the next generation of products. Going forward, the in-house R&D team would continue to drive process research and find innovative ways to reduce cost and build competitiveness.
Headway in the Contract manufacturing Space Leveraging on the world class infrastructure with large capacities, a cost arbitrage in respect to competition, your company is geared to provide integrated solutions from route selection, process development, and optimization to different innovators and generic companies of the globe. It will continue to develop the competitive advantage it already possesses in the area of contract manufacturing and research to be able to grow and add scale to this segment of business.
Horizontal growth through the diversified basket Our foray into the non-antibiotic space places us in an unique position to be one of the largest API companies with a multiple range of products across varied therapies. The transition towards becoming a multi-specialty API manufacturer is going to de-risk the company's sizable reliance on antibiotics, where a couple of products have got commoditized and margins have been affected by competition. We believe that the new life style drugs will drive margins and hence profitability.
Vertical integration for value maximization The company moved up the value chain by launching its finished dosage business. The company successfully created a basket of over 150 products across multiple therapeutic classes in different dosage forms. The dosage business will substantially add to the value of the company in the forthcoming years. The thrust for the formulations business would be through two verticals - the domestic formulations through our division 'Nucleus' and the International Formulations division.
Business Outlook Parabolic Drugs will strive to continue the consistent growth that it has displayed over the last couple of years with increased commitment and focus on the bottom line. The company will achieve to realize this through operational efficiencies, improvements and innovation across production, marketing, research and other capabilities. The rationale is just not to create an organization of growth and profits, but to create a responsible organization which drives its business with excellence and sustainability. The key focus areas for the management in the coming year would be to: Focus on Regulated Markets of US, European Union, Canada, Japan, and Australia- filing of drug master files, certificate of suitability, and dossiers. Product basket- Launch of new molecules in the non-antibiotic space and diversify the product basket for a risk free sustainable growth Diversification into new business verticals- Integration into Finished Dosage formulations, entering into manufacturing alliances for inorganic growth Investment in R&D- development of new products , improving efficiencies in the existing range, filing of patents and building IPR wealth High GMP Standards- maintaining high GMP standards for seeking regulatory approvals from USFDA, PMDA, TGA amongst others. Safety, Health & Environment- safety of our human resource, our manufacturing facilities and our environment, conservation of resources and to be a responsible social citizen for a greener tomorrow Development of Human Resource- foster the skills, talent and efficiency of the human minds I thank you for the faith and conviction you have placed in us and I do believe that the company is poised for greater laurels in the future with your continued support, motivation and guidance. Regards
Pranav Gupta
Exploring the high growth markets of China, Korea, Turkey, Mexico, Argentina and Brazil. These markets are likely to add impetus to our growth. With regulatory approvals in place, the company aims to fortune its growth and market development in the regulated space. The company is buoyant on the opportunities from the markets of Japan, European Union and of late the United States of America.
Entering the new markets of South East Asia with the new products that complement the disease and life style pattern of the countries. Responding to the market dynamics by exploring new molecules that are off patent in different countries
Result : Parabolic Drugs will become a leading pharmaceutical player with strong presence in all major countries of the world Parabolic Drugs will add value to its revenues and margins by tapping the high margin regulated space Parabolic looks to capitalize its revenues by yielding growth from the emerging economies including Korea, Brazil, Mexico and China.
Result:
Parabolic classifies itself in the elite list of pharmaceutical companies that focus on the world class quality with cost effectiveness
The company is a preferred supplier to leading generic and innovator companies in India and abroad.
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Korea and Canada. To increase its access to these markets and to make its products acceptable, Parabolic Drugs has been filing the drug master files for its products across these markets. With the filing of DMFs, the company spectacles its strong regulatory hold Till date, the company has filed over 43 Drug master files. Patents of the non-fringing processes being developed for Non-antibiotics and antibiotics IP Management work is carried by the cell largely in areas of filing patent applications, patent prosecution for granting and doing searches like Novelty, Infringement, Validity & other State of the Art searches, which support Marketing & Research department to make their strategy on patents related issues. As on date, PDL has filed 23 process patent applications on of its non-infringing processes.
Filing of Drug Master Files and documents with the regulated markets. In the longer term, the exports for the company are likely to be driven by the regulated sales coming from the markets of Europe, US, Japan,
Result: The value of the company gets multiplied by the interplay of its intangible assets, filing strengths, broadly its Intellectual property. The company , going forward, will be fetching maximum sales from the regulated markets The domestic foothold of the company will build further with the efficiencies coming in for the existing range of products. The company has a diversified basket of as many as 20 products to be launched over the next few years.
Result: With all drivers set in place, the company aims to maximize its margins from CRO & CMO Business
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Anti-arrhythmic
To suppress abnormal rhythms of the heart (cardiac arrhythmias), such as atrial fibrillation, atrial flutter, ventricular tachycardia, and ventricular fibrillation. To combat the effects of the asthma cascade (bronchoconstriction, inflammation, edema)
Anti-asthmatic
The global market for asthma was valued at $34.9 billion in 2011. This figure is projected to reach $38 billion by the end of 2012 and $47.1 billion in 2017, increasing at a fiveyear compound annual growth rate (CAGR) of 4.4%. One of the most lucrative markets in the globe. Expected to grow over USD 100 billion by 2019. Significant growth to be seen from the emerging markets owing to their changing lifestyle
Anti-diabetic
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1. Financial Results:
The Financial Results for the year under review vis--vis the financial results for the previous year are as under: (` in million)
Particulars
Gross Sales Profit before Depreciation, Interest & Tax (PBDIT) Financial Expenses Depreciation Profit before Tax (PBT) Provision for Taxation: - Current Tax - Deferred Tax Less: Taxation Adjustments for earlier years Profit after Tax (PAT) Profits available for equity shareholders Appropriation: Proposed Dividend on Equity Shares Corporate Dividend Tax Surplus carried to Balance Sheet Earnings per Share(Basic) Earnings per Share (Diluted)
2011-2012
10123.08 1406.32 641.37 100.54 664.41 132.88 19.41 512.12 512.12 15.47 2.51 494.14 8.27 8.27
2010-2011
6752.97 1177.03 407.60 82.61 686.82 136.88 21.21 8.48 520.25 520.25 30.95 5.14 484.16 9.43 9.43
Financial Analysis and Review of Operations: Your directors are pleased to report performance of the business operations as follows: Sales and Export: During the year under review, your Company has registered Gross sales of Rs. 10123.08 million as compared to Rs. 6752.97 million in the previous year showing an increase of 49.91 percent. Further, your Company has registered an export of Rs. 1478.17 million as compared to Rs. 2301.99 million in the previous year showing a decrease of 35.79 per cent. A fall in the exports has been recorded on account of unrest in the global markets, the crisis in the Middle East and in Euro zone. Profitability : The Company earned profit before depreciation, interest and tax (PBDIT) of Rs.1406.32 million as against Rs. 1177.03 million in the previous year, showing an increase of 19.48 per cent. The Company earned profit before tax (PBT) of Rs. 664.41 million as compared to Rs. 686.82 million in the previous year, showing a decrease of 3.26 percent. After making provision for tax of Rs. 152.29 million (previous year Rs. 158.09 million), net profit worked out to Rs. 512.12 million as compared to Rs. 520.25 million in the previous year showing a decrease of 1.56 percent mainly due to increased cost of imported raw material, due to depreciation in rupee value, and higher interest cost. Fixed Assets : The net fixed assets (including work-in-progress) as at 31st March, 2012 were Rs. 3751.81 million as compared to Rs. 2752.07 million in the previous year.
4. Dividend :
The Board of Directors of your Company has recommended a dividend of Rs. 0.25 per share on the Fully Paid-up Equity Share of the Company.
5. Subsidiary :
During the year under review, the Company had floated a new subsidiary Company namely M/s. Ziven Lifesciences Limited to carry on the formulations business. The present paid-up capital of that Company is Rs. 1,04,00,000/- out of which your Company holds 90.38% share capital of that Company. Further, your Company holds 98.99% of paid up capital of Rs. 4,95,00,000/- of Parabolic Research Labs Limited, another subsidiary of your Company. A statement under Section 212 of the Companies Act, 1956 of the subsidiary companies is annexed hereto.
2. Directors :
Dr. Ram Kumar and Mr. Inder Bir Singh Passi, Directors of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.
8. Auditors :
M/s. S.K. Bansal & Company, Chartered Accountants, Chandigarh, the Statutory Auditors, are retiring at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. They have also given their eligibility in terms of Section 224 (1B) of the Companies Act, 1956. The Audit Committee and Board of Directors have recommended their appointment for the financial year 2012-2013 to the members for their approval in the ensuing Annual General Meeting.
3. Share Capital :
During the year under review, there is no change in the Share Capital of the Company.
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9. Auditors' Report :
The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.
proactive policies for industrial relations, the industrial relations between the employees and the management remained peaceful and cordial throughout the year at all offices and units of the Company.
16. Group :
The Company, inter-alia with the following entities, constitutes a group as defined under the Monopolistic and Restrictive Trade Practices Act, 1969: a) PNG Trading Private Limited b) Parabolic Infrastructure Private Limited
strategy of bringing about a general awareness amongst all regarding energy conservation. Particulars with respect to conservation of energy and other areas as per Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, are annexed hereto and form part of this report.
Your Directors also express their deep appreciation for the devoted and sincere services rendered by employees at all levels of operations of the Company during the year and we are confident that our Company will continue to receive such co-operation from them in future also.
For and on behalf of the Board Vineet Gupta Whole Time Director Place: Chandigarh Dated: 14th August, 2012 Pranav Gupta Managing Director
19. Acknowledgement :
Your Directors are pleased to place on record their sincere gratitude to Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company.
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1. Conservation of Energy :
Your Company has always been conscious of the need to conserve energy and also reduce the cost of production. We hold regular meetings in our units for discussions on the various energy conservation measures and implement them. Various energy conservation measures taken during the year include use of condensate water in boilers, separation of high and low pressure air lines, change of cooling tower fills, improvement of refrigeration system, provision of PSA system in Amorphous plants and Power trading etc. The details regarding the present energy consumption are furnished below as per form A of the annexure to the rules.
Form-A
A. Power & Fuel Consumption: Particulars 1. Electricity a) Purchased Units Total Amount Rate per Unit b) Own Generation i) Through diesel generator Units Units per litre of Diesel Cost per Unit ii) Through steam turbine/generator Units Units per litre of fuel oil/gas Cost per Unit 2. Coal Quantity Total Cost Average Rate 3. Furnace Oil : Quantity Total Cost Average Rate 4. Others /Internal Generation Quantity (Timber & Husk) Total cost Rate/Unit Ton ` in million `/ton 8258.41 40.85 4946.71 7230.61 31.20 4315.58 K. Litres ` in million `/ litre 20.00 1.15 57.36 59.70 2.84 47.60 Ton ` in million ` /ton KWH in million KWH `/KWH 1.47 3.00 13.66 0.97 3.00 12.03 KWH in million ` in million `/KWH 16.20 98.04 6.05 11.33 60.96 5.38 Unit 2011-2012 2010-2011
B. Consumption Per Unit of Production: Production of Different Products Electricity Furnace Oil Coal (MT) Furnace Oil (Litres) Others/Internal Generation (*) Variation due to change in product mix KWH/KG 5.65* 5.38*
2. Technology Absorption :
Efforts made in technology absorption are furnished in Form B as under:
adoption of latest technology in its all plants. The Company has also created specific R & D and other cells for studying and analyzing the existing process for further improvement. b) i) ii) iii) Particulars of Imported Technology in last five years: Technology Imported Year of Import Has the Technology been fully absorbed : : : NIL Not Applicable Not Applicable
Form -B
A. Research and Development(R&D) : a. Specific areas in which Research & Development is carried out by the Company : R & D has been carried out in areas of improvement on Product, Process, Cost Reduction, development of new products like Montelukast, Bortezomib and Anti Diabetic Compounds like Sitagliptin, Vildagliptin etc. and increase in Productivity. b. Benefits derived as a result of above R & D : The Company was able to improve the quality of existing products like Cefuroxime Axetil and develop new products Strontium Ranelate, Febuxostat and was also able to reduce the cost of Production. c. Further course of action : We intend to develop new product, to further reduce the cost and improve capacity utilization. d. Expenditure on R & D : (` in million) 2011-12 Capital Recurring Total 10.01 933.38 --------------943.39 --------------2010-11 49.52 640.16 -------------689.68 --------------
Total R& D expenditure as a percentage of turnover: 9.32% B. Technology Absorption, Adaptation and Innovation : a) Effort made: The Company is continuously making efforts for
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Persons employed for a part of the financial year, who were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs. 5,00,000 per month. Details as on 31.03.2012 Dr. P . B. Deshpande Chief Scientific Officer Rs. 26,24,398/Non Contractual Scientific Research M.Sc., P .hd 02.08.2010 27 years 57 years Emcure Limited, Pune Mr. Seetaraju Gembali President-Formulation Business Rs. 24,51,386/Non Contractual Formulation Business M.Pharm( Pharmaceutics) and Diploma in marketing management 05.12.2011 23 years 48 years Mid Pharma and Promed Research, Jordan
S No. Particulars Name 1. 2. 3. 4. 5. 6. 7. 8. 9. Notes: Designation of Employee Remuneration Received Nature of Employment Nature of Duties Qualifications & Experience Date of commencement of Employment Experience Age Last Employment held
1. Remuneration includes salary and other perquisites (in case of Mr. Pranav Gupta and Mr. Vineet Gupta) 2. Remuneration includes Salary, Other Allowances and Provident Fund ( in cases of rest of the employees) 3. Mr. Pranav Gupta and Mr. Vineet Gupta are related to each other. 4. Mr. Pranav Gupta and Mr. Vineet Gupta are holding 824,100 and 701,550 Equity Shares of the Company respectively . 5. Dr. P . B. Deshpande resigned from the Company w.e.f. 14th September, 2011.
Statement Pursuant to Section 212 of the Companies Act, 1956 Relating to Subsidiary Companies:
Name of Subsidiary Company Financial Year ending of the Subsidiary Number of Shares held ( Face Value) Extent of Holding For Financial Year of the Subsidiary For the Previous Financial Years since it became a Subsidiary
Profit/(Losses) so far it concerns the members of the Holding Company and not dealt with the books of Accounts of the Holding Company (Except to the extent dealt within Col.6) 1 Parabolic Research Labs Limited Ziven Lifesciences Limited* 2 31.03.2012 3 2,950,000 ( Rs. 10 each) 4 98.33% 5 Nil
Profit/(Losses) so far it concerns the members of the Holding Company and dealt within the books of Accounts of the Holding Company.
Profit/(Losses) so far it concerns the members of the Holding Company and not dealt within the books of accounts of the Holding (Except to the extent dealt within Col. 8)
Profit/(Losses) so far it concerns the members of the Holding Company and dealt within the books of accounts of the Holding Company
6 Nil
7 N.A.
8 N.A.
31.03.2012
79.99%
Nil
Nil
N.A.
N.A.
Note: *The financial year of the Ziven Lifesciences Limited was from 01.11.2011 to 31.03.2012.
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The Ministry of Commerce has proposed an ambitious Strategy Plan to double pharmaceutical exports from US$ 10.4 billion in 2009-10 to US$ 25 billion by 2013-14. The Government has also planned a 'Pharma India' brand promotion action plan spanning over a three-year period to give an impetus to generic exports Key Drivers to Indian Growth Competent workforce: India has a pool of personnel with high managerial and technical competence. It has an educated work force fluent in English. 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 has an old democracy and hence has a solid legal framework and strong financial markets. There is already an established international industry and business community. Consolidation: 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.
Indian pharma industry in the 1990s, when the rising healthcare costs in many developed countries forced them to seek the cheaper generic drug option. Thus, the Indian pharma industry was able to exploit the enormous generic opportunity that was spawned.
In the near-term, the generic opportunity will continue to lure
more companies. And, with competition intensifying, generic drugs will see greater price erosion.
For sustaining growth, Indian drug-makers will look at newer
avenues such as entering niche segments, building relationships with global pharma for joint research and development and widening distribution networks through marketing alliances. Other potential thrust areas include biopharmaceuticals, contract research and manufacturing, and new drug research.
The low cost of manufacturing renders India as an attractive
destination for contract research, and the availability of a large patents pool makes it appealing for clinical trials, which contributes the most, in terms of revenue, to the contract research segment. An increased presence in contract research will also help them build expertise to move up the value chain and engage in new drug development.
Indian industry's R&D capabilities currently lie in reverse
Industry classification
Indian Pharmaceutical Industry
Active Pharmaceutical Ingredients(API) Contract Research And Manufacturing Service (CRAMS)
Company perspective
Biosimilars
Formulations
Established in 1996, Parabolic Drugs started its operations in 1998 as a small manufacturer producing for few of the clients in the region. From being a pharmaceutical ancillary in the initial years to a leading pharmaceutical company in 2012, Parabolic has emerged as a preferred partner and supplier to global innovators and generic companies in the antibiotic and nonantibiotic segments. Over the years, the company has strengthened its competitive position in the antibiotics and non-antibiotic APIs, Research and Development, and CRAMS space. It has registered a five year CAGR of over 35% while establishing a basket of over 50 APIs and various intermediates being serviced to about 800 customers. The company has also created a pipeline of 20 generic drugs across the niche therapies. In the year 2011, the company has stepped up in the value chain by foraying into the formulations segment. The Company has a clear vision to be a fully integrated Pharmaceutical Company
Way forward
The Indian pharmaceutical industry's emergence on the global landscape as a strong generics player is largely due to the Indian Patents Act-1970, which allowed only process patents in pharmaceutical space. The process patent regime has since then enabled pharmaceutical companies to keep the cost of medicines at affordable levels, therefore resulting in further cost reduction by reverse engineering. Although India shifted to the product patent regime in 2005, the capabilities developed during the past two decades became a competitive advantage for the
25
providing world class pharmaceutical products and services, from development of API intermediates to API contract manufacture to supplying finished formulations, for both generic and Innovator companies across the globe. The company is going ahead with the vision of being a fully integrated pharma company having backward and forward integration, world class infrastructure, R&D strengths, diversified product basket across different therapeutic segments and Intellectual Property Rights in the form of DMFs, and Patents for novel processes. Parabolic continues to build on its strengths and is fundamentally prepared for the challenges from the changing business and global economics.
2.
To develop products and chemistry for the new molecules as identified by marketing. This includes the evaluation of patents, synthetic route study through non-infringement process before starting development work. To enable the company in sustaining the cost competitiveness in market by continuous improvement in the existing processes. To provide quality documentation to Quality assurance, Regulatory affairs for filing DMFs in the regulated space Process validation activities jointly by Cross functional teams. Writing of validation protocols as per regulatory and GMP guidelines
3.
4. 5. 6.
Business Model
Finished Dosage Formulations Research and Development Active Pharmaceutical Ingredients
Key achievements in FY 12
Successful execution of about 35 projects till date Alliance with top generic and innovator companies in Europe, US and Japan. Successfully completed the EHS and CGMP audit by innovator companies from US and Japan.
support with ETP , an in-house liquid nitrogen tank, and a GMP compliant water systems and chillers
Regulated Approvals: WHO GMP , USFDA for 6-APA
IPR Capabilities
Patent analysis via prior art search Technology assessment Patentability assessment Patent application drafting and filing Licensing support IP overlap analysis Competitor analysis and IP monitoring
HPLC, XRD, GC with Head space, GC, LC-MS, IR Spectrophotometer, UV-Visible Spectrophotometer, Polarimeter, Auto Titrator and Lypholizer Non- Antibiotic Facility at Chachrauli(PDL IV)
Pilot plant commissioned for manufacturing non-antibiotic
APIs in the new therapies such as CVS, CNS, oncology, antithrombotic, anti-diabetic and pain management.
Includes QA/QC block, pilot plant, manufacturing plant with
five production streams, separate finished goods processing section, solvent recovery, utilities, effluent treatment plant, canteen, stores, warehouses, hazardous reaction block and engineering and project sections.
Segments
Antibiotics-Cephalosporin Parabolic started as a contract manufacturer in the Penicillin space in 1998 and it has journeyed as a leading antibiotic manufacturer now. The company in the antibiotic segment has created a presence in over 50 countries. In the Antibiotics, the company banks on the following strengths:
Two large scale cGMP compliant API manufacturing facilities Plants audited and approved by leading MNCs and
Solvent recovery units, three R&D laboratories, a pilot plant for scale-up of new technologies developed by our in-house R&D, three boilers and utilities, two warehouses and in house healthcare centre
Regulated Approvals: EU GMP , WHO GMP , Japanese PMDA,
Korean FDA, OHSAS 18001-2004, ISO 14001-2004 Penicillin Facility at Panchkula(PDL II)
Two dedicated blocks for the manufacturing of wide range of
oral penicillin products including niche penicillin APIs such as Bacampicillin, Sultamycillin and Pivampicillin
27
Therapies being worked into a. b. c. d. e. f. g. h. i. j. Anti-Thrombotic Anti-Osteoporotic Anti-Diabetic Anti-Hypertensive Neuro-Muscular Blocking Agent Antineoplastic Analgesic Treatment of Hyperuricemia & chronic gout Muscle Relaxant (Skeletal) Chelating Agent (iron)
cGMP specifications and conforming to USFDA standards. The entire operations are in closed condition without human intervention using manufacturing line of BADO from OMCA, Italy.
Filed over 39 Drug Master files across Europe, Japan, USA,
Key Achievements in FY 12
Commissioning of multi-purpose block 3 with 120 TPA
automated International BADO machinery for World class quality and compliance. Adds 120TPA capacity to Sterile basket
Audit from the Japanese companies for inspection from the
Herbal Nutraceuticals
Parabolic has been successful in launching its Herbal nutraceutical molecules across different markets in the globe. PDL has a Long term Strategic Tie up with Herbal API Manufacturer for the sales and marketing of herbal Nutraceuticals Key Herbal APIs offered are: Reserpine Used in Antihypertension, treatment of insanity 10 DAB III It is a precursor of Paclitaxel and Docetaxel, which is used for cancer treatment Raubasine Used for treatment of high blood pressure and Cerebral Hypoxia Youhmbine Used as both an over the counter dietary supplement in herbal extract. Colchicine An Anticancer natural product Thiocolchicoside Used as Anti- inflammatory muscle relaxant Calcium Sennoside Used in the treatment of constipation, working through a stimulation of intestinal peristalsis.
Authority(KFDA) on Cephalosporin
Audit and visit from the European customers for EUGMP
requirement , thereby enabling a trigger for USFDA inspectionFiling of 7 drug master files across EU, US and Japan. The total filings till date are 43 Antibiotics- Penicillins In the penicillin space, the company has successfully cleared audit and inspection from the European regulator which has a potential business in FY 13. The company is in negotiations with different customers in EU for regulatory business in Penicillin segment. Non-Antibiotics (Life Style Drugs) In December, 2011, the company successfully initiated the production in its green field project for the life style drugs and non-antibiotics. With a pipeline of over 17 new drugs in different therapeutic segments, the company is expecting sales in FY 13. The Lalru facility is spread across 27 acres and includes QA/QC block, pilot plant, manufacturing plant with different production streams, separate finished goods processing section, solvent recovery, utilities, effluent treatment plant, canteen, stores, warehouses, hazardous reaction block and engineering and project sections.
Major initiatives
The company organized several free health checkups for the
villages across its different locations. Over the years, this has been a regular practice for the company as an initiative towards society
Towards the noble cause, the employees of the company
safety
We believe that all our employees shall have an attitude of
responsibility and be willing to work as a team for the benefit of Safety of self and of their co workers.
29
5. To enhance productivity of human resources by developing efficient and effective systems of manpower planning, succession planning, selection, placement, training & Development and effective performance management system. During the period under review, there was no incident of work stoppage or loss of production due to IR related issues
business. The company shall continue to build growth momentum through its partner in the strategic alliances
The commissioning of new sterile and amorphous facility
Formulations
FY 12 marks the presence of Parabolic in the formulations space. The company has a vision of being a vertically integrated pharmaceutical company. The strategic initiatives are driven by two divisions across the different verticals: 1. Nuclues- A division of Parabolic Drugs for the domestic formulations space 2. International Formulations Division Developments in NUCLEUS FY 12 marks the presence of Parabolic in the formulations space. The company's under its division NUCLEUS has ensured a PAN India presence with about 500 Stockiest, 20 distributors and wide basket of 170 products in different dosage form. The company clocked a topline of about 8 Cr in FY 12. Going forward, FY 13 will further cement Nucleus's presence in the domestic market. Developments in the International Formulations Meanwhile, the company's own plants get commissioned; it has identified and finalized different WHO GMP approved manufacturing sites to initiate the business. The focus is on the therapeutic segments where PDL has backward integration. Developments in FY 12: a) Registration of about 50 brands in India and Internationally b) Submission of about 80 dossiers for registration (FY 13 target of 150) c) Contracts finalized with key distributors in APAC d) Loan License agreements with six WHO GMP approved manufacturing sites
completes the API expansion that was started some years back. With over 1000 Tons annual capacity, backed by the international regulatory approvals, the company looks to build its turnover on exports, preferably the regulated exports. FY 13 may also bring some achievements to the company with the approvals from Japanese PMDA and the USFDA
With a foothold in over 50 countries, the company looks to
develop its market presence and strengthen its revenues from the markets of Japan, Korea, China, CIS and the European markets
With over 20 molecules to be launched in the life style space,
the non-antibiotic facility at Lalru is likely to contribute and add value to the topline and bottomline. This adds to the
The company would continue its research on identified life
literature search, novel route scouting, Small scale synthesis, characterization of molecules to drive the revenues for CRAMS
Developments in the process R&D projects related to route
selection and optimization, method Development and Validation and synthesis of GMP /Non GMP material
Catering to innovators needs of large scale contract
manufacturing
PDL shall continue to explore new opportunities in the off-
revenues from the formulations out of its three pronged strategy of domestic formulations, International formulations and branded generics(Ziven Life Science)
its sustainable business model comprising of the active pharmaceuticals, contract research and finished dosage
Your company is distinctively placed for risk management and has set in place key risk management policies. The managementadministers these policies and ensures that the operations combat the potential threats and the risk is minimized. Within the pharmaceutical space, there are certain risks which are natural and each company is exposed to it. Some of them are: Slowdown in the world economy Risk: Slowdown in the economy Impact: The world is experiencing an economic slowdown since the financial crisis of 2008-2009. Furthermore the prevailing debt crisis across the EuropeanUnion has exposed the world to another wave of slowdown. Parabolic Drugs, being a pharmaceutical exporting company is exposed to this risk Mitigation Strategy: The Companyhas a basket of diversified products, and after the launch of its non-antibiotic range of products, the company's product acceptance is wide, and it can further expand its presence across new territories. Further, the company has also received regulatory approvals from the Asian pharmaceutical giants like Japan and Korea, this would derisk the company's standalone reliance on the European markets Volatility in the Indian Currency Risk: The Indian currency against the US Dollar has depreciated by about 14% in FY 11-12 Impact: The sharp changes in the valuation of the rupee vis-a-vis the dollar in the recent times, superimposed on an overall negative trend of depreciation, negatively impacts the earnings of the company. A year ago the rupee stood at a strong 44.50 to a dollar, followed by showing signs of weakness and sliding to a low of 54/US$. The company is a net importer and a further fall in Indian Currency will affect the margins and profitability Mitigation Strategy: The Company has a well-structuredpolicy to review and mitigate the exchange rate risk. Although the company uses appropriate hedging tools to diminish the impact of currency risk, in the long term the company looks to expand the size of exports as to build a natural hedge to set off the impact. Erosion of the selling prices Risk:There has been a substantial fall in the prices of antibiotic range of molecules. With the increasing pressure of governments across the world to reduce the health care cost, the world is moving towards economical alternatives to the branded products. The Genericization, along with an opportunity to
launch new drugs, also adds to the pressure of falling prices in old APIs Impact: Parabolic Drugs has larges capacities in the antibiotic space, and it has the major reliance on the antibiotic APIs Mitigation Strategy: As a long term strategy to diversify and mitigate the individual risk of antibiotics, the company has forayed into non antibiotic range of molecules. These molecules will not only derisk the reliance of the company on antibiotics, it will also give an impetus to the margins Competitive pressure Risk: Increasing competition in the pharmaceutical Space Impact: In 2012-13, CRISIL research expects the pharmaceutical industry to grow by 16-18 per cent y-o-y to $36- 37 billion. Such bright industry prospects would encourage huge competition not only on the domestic front but also from multinational companies.Competitive pressure in the domestic market is likely to be sustained as MNCs become more aggressive and domestic companies leverage on their expanded field force. Potential regulatory interventions could further put pressure or hurt pricing. Mitigation Strategy: PDL has uniquely positioned itself in the market with introduction of new and improved molecules, expansion of the production capacity meeting international standards and improving the existing product range, thereby having an edge over the competitors. Human resource management Risk: High attrition rate in the pharmaceutical space Impact: Enhancing productivity, quality and reliability is a result of highly motivated and professional workforce. Since the attrition rate in this industry is very high, retaining the pool of talent is a major challenge. Mitigation Strategy: PDL has always nurtured a policy to promote a vibrant work culture based on innovation and capability building and performance measurement. HR has always emphasized on talent attraction, retention and staff welfare. At PDL, the individual rewards on performance are aligned to the organization and business unit performance.
31
interest rates, the depreciated Indian rupee, the company recorded the net profits of INR 512.12 million, short by 150 bps over previous year. The size of the balance sheet has gone up to INR 13143.77 million Sales and Revenue The revenue figures for the FY '12 stands at INR 10,123.08 million as against INR 6,752.97 million in the FY'11 which accounts for a robust 49.9% growth over the previous year . The growth has largely been achieved by the :
Enhanced production capacity in Antibiotic APIs Introduction of new molecules in the key regulated and non-
481.59 million against INR 398.06 million in FY'11. The reason owing to the 20.98% increase has been a result of increased expenses on manufacturing due to increase power cost, consumables and spares,rise in general administration expenses resulting from new plant. The financial cost of the company has risen significantly to INR 641.37 million in FY'12 from INR 407.60 million in FY'11, showing a 57% increase. The increase in base rate by the respective banks has raised the financial cost of the company. The EBIDTA margins for the company stand at INR 1,614.32 million in the FY'12 as compared to INR 1,271.45 million in the FY'11 thereby showing an increase of 26.9%. Profit after tax (PAT) stood at Rs. 512.11 million, which is marginally (1.5%) less than the previous year of Rs 520.24 million. Balance Sheet The size of the balance sheet has grown to INR 13,143.77 million in FY'12 from INR 10,672.51 million in FY'11 recording a 23.15% growth. The capital employed in the business is Rs. 8,018.32 million in FY'12 Reserves and surplus have registered a growth of 15.5% from Rs.3,171.08 million in FY'11 to Rs.3,665.21 million in FY'12. The long term and short term borrowings of the company has increased from Rs. 4,513.64 million to Rs. 5,223.88 million in FY'12 which accounts for a 16% increase. Gross block of the company increased to Rs. 3,787.46 million in FY'12 from Rs. 2,808.8 million in FY'11 registering a 34% increase. Investments registered a decrease of 37% from Rs. 56.73 million in FY'11 to Rs. 35.66 million in FY'12.
regulated markets.
Entering new vertical space- Herbal APIs and the domestic
formulation
Launch of 4th generation molecules in Turkey.
Cost and expenses The operational cost of business for the FY'12 stands at INR 7,669.9 million, against the INR 5,080.43 million for FY 11, thereby an increase of 50.96%. Material cost for FY'12 has been INR 6,963.15 million, whereas the same for FY'11 was INR 4,513.07 million thereby showing 54.28% increase over the previous year. Due to volatility in the Indian Rupee, the cost of imported raw material has significantly gone up leading to inflated material cost. Personnel expenses for the FY'12 has increased to INR 641.37 million from INR 407.60 million in FY'11 showing an overall increase of 57.35%. With the commissioning of the new plant at Lalru, in addition to the new sterile and amorphous facility, investments in Human resource has significantly gone up. The remaining expenses including Administration expenses, selling and distribution expenses for the FY'12 stand at INR
Report on
Corporate Governance
2. Board of Directors:
a) Board Meetings: During the financial year 2011-12, the Board met 4 times on the following dates: - 13th May, 2011 - 12th November, 2011 b) Composition as on 31st March, 2012: The Board of Directors comprises of a Non- Executive Chairman, a Managing Director, two Executive/Whole Time Directors and 5 Non - Executive Directors. Out of the total strength of 9 directors, 5 directors are Independent, thus it meets the stipulated requirement. The composition of the Board of Directors and their attendance at the Board Meetings during the year and at last Annual General Meeting of the Company as also the number of other Directorship in Indian Public Limited Companies. - 13th August, 2011 - 11th February, 2012
33
Chairman, Non Executive & Independent Director Managing Director Whole Time Director Executive Director Non Executive Independent Director Non Executive Non Independent Director Non Executive Independent Director
Yes
Pranav Gupta Vineet Gupta Gurpreet Singh Sandhu Dr. Ram Kumar
4 2 4 4
2 2 Nil Nil
No
Nil
Nil
Yes
Nil
Nil
Nil
Nil
Pardeep Diwan* Non Executive Independent Director Nikhil Goel Non Executive Independent Director Non Executive Independent Director
No
Nil
Nil
Nil
Nil
No
Nil
Nil
Nil
Nil
No
Nil
Nil
Nil
Nil
* Mr. Pardeep Diwan retired by rotation from the Directorship of the Company w.e.f. 29th September, 2011 **Mr. Manmohan Lal Sarin was appointed as a Director of the Company liable to retire by rotation w.e.f. 29th September, 2011. Disclosure of Change Mr. Pardeep Diwan retired by rotation from the Directorship of the Company w.e.f. 29th September, 2011 and Mr. Manmohan Lal Sarin was appointed as a Director of the Company w.e.f. 29th September, 2011 in his place.
3. Audit Committee:
As at 31st March, 2012, the Audit Committee comprised of Four Directors namely Mr. Nikhil Goel, Mr. Inder Bir Singh Passi, Mr. Pranav Gupta and Mr. Arun Mathur. Mr. Nikhil Goel is the Chairman of the Audit Committee. The Company Secretary is the secretary of Audit Committee. The terms of reference of the Audit Committee are, as contained in Corporate Governance Clause of the Listing Agreement. The Audit Committee met five times during the financial year 2011-12 on the following dates: - 13th May, 2011 - 12th August, 2011 - 11th February, 2012 - 15th June, 2011 - 12th November, 2011
The attendance of the members of the Audit Committee during the financial year 2011-12 is given below: Sr. No. Name of the Director Designation Executive/ Non Executive/ Promoter Independent/ Non Independent No. of Audit Committee Meetings Attended 3 2 4 5 2
1. 2. 3. 4. 5.
Pardeep Diwan* Nikhil Goel** Inder Bir Singh Passi Pranav Gupta Arun Mathur***
Non Executive Non Executive Non Executive Executive & Promoter Non Executive
* Mr. Pardeep Diwan retired by rotation from the Directorship of the Company w.e.f. 29th September, 2011. ** Mr. Nikhil Goel was appointed as a Member and Chairman of the Audit Company w.e.f. 30th September, 2011. *** Mr. Arun Mathur was appointed as a Member of the Audit Company w.e.f. 30th September, 2011.
4. Remuneration Committee
The remuneration Committee was constituted by our Directors pursuant to a Board Resolution dated 13th May, 2011 and comprises of three Directors namely Mr. Inder Bir Singh Passi, Dr. Ram Kumar and Mr. Arun Mathur. a) Sr. No. 1. 2. 3. b) Composition: The Remuneration Committee of the Company comprises of three Directors as per details given below: Name of the Director Inder Bir Singh Passi Dr. Ram Kumar Arun Mathur Terms of Reference: a) Reviewing, assessing and recommending the appointment of Executive/Non-Executive Directors and Senior employees; b) c) d) Reviewing the remuneration packages of Executive/Non Executive Directors and senior employees; Recommending the payment of compensation in accordance with the provisions of the Companies Act,1956 and Carrying out any other function in the Equity Listing Agreement as and when amended from time to time. Designation Chairman Member Member Executive/ Non Executive/ Promoter Non Executive Non-Executive Non Executive Independent/ Non Independent Independent Independent Independent
One meeting of Remuneration Committee was held during the financial year 2011-12 c) Detail of Remuneration paid to the Executive Directors for the Financial Year 2011-12: The details of the remuneration paid to the Managing Director and Executive Directors/Whole Time Director for the Financial Year 2011-12 is as under: Particulars Salary, Allowances & perquisites Bonus/Performance Incentive Retirement Benefits Stock options Tenure Notice Period & Severance Pay Number of shares held Pranav Gupta Rs. 96,00,000 5 years 824100 Vineet Gupta Rs. 84,00,000 5 years 701550 Gurpreet Singh Sandhu NIL 2 years 11500
35
d)
Details of Remuneration paid to the Non-Executive Directors for the Financial Year 2011-12: Non-Executive Directors are not entitled to any remuneration except sitting fees for the Board and Committee Meetings. The details of the sitting fees paid to the Non-Executive Directors for the Financial Year 2011-12 is as follows:
S. No. 1. 2. 3. 4. 5. 6. 7.
Name of the Director Mr. Inder Bir Singh Passi Dr. Ram Kumar Mr. Pardeep Diwan* Mr. Arun Kumar Mathur Mr. Koppisetty Srinivas Mr. Nikhil Goel Mr. Manmohan Lal Sarin*
Sitting Fee (in Rs.) 18500 29500 7000 20500 15000 18000 5000
*Mr. Pardeep Diwan retired by rotation from the Directorship of the Company w.e.f. 29th September, 2011 and Mr. Manmohan Lal Sarin was appointed as a Director of the Company w.e.f. 29th September, 2011 in his place.
No Shareholders'/ Investors' Grievance Committee was held during the Year 2011-12 The Company Secretary is the Compliance Officer of the Shareholders'/Investors' Grievance Committee. Details of investors' complaints during the financial year 2011-12: Received 10 Resolved 10 Pending 0
15th Annual General Meeting for the financial year ended 31st March, 2011
Nature of Meeting
Venue
Whether any special resolution passed last year through postal ballot No
14th Annual General Meeting for the financial year ended 31st March, 2010 13th Annual General Meeting for the financial year ended 31st March, 2009
Tuesday 28th September, 2010 3.00 P .M. Saturday 26th September, 2009 3.30 P .M.
PHD House, Sector 31 A, Chandigarh S.C.O. 99-100, Top Floor, Sector 17 B, Chandigarh
No
The Company has not passed any resolution through postal ballot during the Financial Year 2011-12. No resolution is proposed to be passed by postal ballot in the forthcoming Annual General Meeting.
7. Disclosures:
During the year, there was no material/significant transaction with related parties that may have potential conflict with the interests of Company at large. Also there has not been any non compliance by the Company in respect of which penalties or strictures were imposed by the Stock Exchanges, the Securities and Exchange Board of India or any other Statutory Authority on any matter related to Capital Markets during the last three years. The Company has not so far, adopted any non mandatory requirements as stated in Annexure III of the Listing Agreement except the Remuneration Committee and Whistle Blower Policy. As per the Whistle Blower Policy adopted by the Company, every personnel of the Company have access to the Audit Committee.
8. Means of Communication:
Presently, the Company communicates with the shareholders at large through its Annual Reports, publication of financial results, press releases in leading newspapers and by filing of various reports, informations and returns with the Statutory Bodies like Stock Exchanges, Reserve Bank of India and the Registrar of Companies. The informations are published in prominent daily newspapers viz. The Economic Times, Financial Express, Business Standard and Desh Sewak. The Investors' relating informations of the Company are also made available at the website i.e. www.parabolicdrugs.com.
37
v.
Listing on Stock Exchanges: The Equity Shares of the Company are listed on the following two Stock Exchanges: The Bombay Stock Exchange Limited (BSE) Floor 25, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 The National Stock Exchange of India Limited (NSE), Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 The Company has duly paid the listing fee to both the aforesaid Stock Exchanges for the financial year 2012-13.
vi.
vii. Market Price Data: High, Low during each month in last financial year: Financial Year 11-12 Share Price of Parabolic Drugs Limited Highest (Rs.) Lowest (Rs.) Closing (Rs.) % age change over last month's closing -9.12 -5.55 -6.25 -29.9 23.19 22.06 -12.26 -10.95 10.03 -1.18 -13.40 BSE Sensex Highest (Rs.) Lowest (Rs.) Closing (Rs.) % age change over last month's closing -3.30 1.85 -3.44 -8.35 -1.34 7.60 -8.93 -4.15 11.25 3.25 -1.96
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
52.70 47.30 46.00 42.80 38.25 33.25 40.80 39.95 38.00 35.70 40.50 35.80
40.00 39.60 37.00 36.85 25.90 26.70 31.70 29.55 29.25 29.00 32.60 28.10
46.60 42.35 40.00 37.50 26.30 32.40 39.55 34.70 30.90 34.00 33.60 29.10
19811.14 19253.87 18873.39 19131.70 18440.07 17211.80 17908.13 17702.26 17003.71 17258.97 18523.78 18040.69
18976.19 17786.13 17314.38 18131.86 15765.53 15801.01 15745.43 15478.69 15135.86 15358.02 17061.55 16920.61
19135.96 18503.28 18845.87 18197.20 16676.75 16453.76 17705.01 16123.46 15454.92 17193.55 17752.68 17404.20
C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai - 400 078 Tel: + (91 22) 2596 3828 Fax: + (91 22) 2594 6969 E-mail: mumbai@linkintime.co.in Website: www.linkintime.co.in ix. Share Transfer System:
A-40, 2nd Floor, Naraina Industrial Area, Phase-II, Near Batra Banquet Hall, New Delhi - 110 028 Tel: + (91 11) 4141 0592,93,94 Fax: + (91 11) 4141 0591 E-mail: delhi@linkintime.co.in Website: www.linkintime.co.in
The Company has constituted a Share Transfer Committee of its Directors. The Committee meets on an average once in a fortnight as per the requirement. The list of valid transfers and objections, if any, are placed before the Company for its approval/ Confirmation. Presently, the shares of the Company are traded on the Stock Exchanges compulsorily in demat form. The Company has participated as an issuer both with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The Shareholders may operate through any of the depositories. The International Securities Identification Number (ISIN) is INE 618H01016. x. Distribution of shareholding as on 31st March, 2012: No. of shareholders 11861 1241 723 167 62 71 113 173 14411 % of shareholders 82.31 8.61 5.02 1.16 0.43 0.49 0.78 1.20 100.00 No. of shares 1895946 1003722 1010929 434115 221323 338178 833573 56154228 61892014 % of shareholding 3.06 1.62 1.63 0.70 0.36 0.55 1.35 90.73 100.00
No. of equity share held Up to 500 501-1000 1001-2000 2001-3000 3001-4000 4001-5000 5001-10000 10001 and above Total
Shareholding Pattern as on 31st March, 2012: Category Promoter & Promoter Group Public Shareholding Institutions Mutual Funds/ UTI/FIs/ Banks/ Central & State Government FVCF/FII Non Institutions - Individuals - Bodies Corporate 9520597 4288109 13816 285 15.39 6.93 2911672 6 4.70 No. of shares 24275327 No. of shareholders 16 % of shareholding 39.22
10133960
16.37
39
xi.
Dematerialization of shares and Liquidity: Presently, some of the Pre IPO shares are in physical mode and the entire PostIPO holding is in Demat form.
xii. Outstanding GDRs/ADRs/ Warrants or any Convertible instruments, conversion date and likely impact on equity: Not Applicable xiii. Plant Locations: The plants of the Company are located at the following locations: a) b) c) Parabolic Drugs Limited, Village: Sundhran, P .O.: Mubarakpur, Tehsil: Derabassi, District: Mohali, Punjab Parabolic Drugs Limited, Plot No. 45, Industrial Area, Phase II, Panchkula, Haryana Parabolic Drugs Limited, Plot No. 280-281, Phase I, Block 1, Alipur Industrial Estates, HSIIDC, Tehsil: Barwala, District: Panchkula, Haryana d) Parabolic Drugs Limited, Village: Chachrauli, Tehsil: Derabassi, District: Mohali, Punjab xv. Address for correspondence: Registered Office: Parabolic Drugs Limited, S.C.O. 99-100, Top Floor, Sector 17 B, Chandigarh - 160 017 Phone Nos: 0172-3914646-647 Fax No: 0172-3914645 Website: www.parabolicdrugs.com Corporate Office: Parabolic Drugs Limited, 9 AB, Second Floor, Taimoor Nagar, New Friends Colony, New Delhi - 110 065 Phone Nos: 011-65514789 Fax No: 011-26332660
Auditors' Certificate on Compliance of Corporate Governance under Corporate Governance Clause of the Listing Agreement(s)
The Members Parabolic Drugs Limited, S.C.O. 99-100, Top Floor, Sector 17 B, Chandigarh We have examined the compliance of conditions of Corporate Governance by M/s. Parabolic Drugs Limited ("the Company"), for the year ended 31st March, 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges. The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to review the procedures and implementation thereof, adopted by the Company, for ensuring the compliance of the condition of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and based on the representation made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For S.K. Bansal & Co., Chartered Accountants
(S.K. Bansal) Place: Chandigarh Date: 14th August, 2012 Partner Membership No. 013147 FRN 002222N
41
Auditors Report
To The Shareholders We have audited the attached Balance Sheet of M/s. Parabolic Drugs Limited, Chandigarh as at 31st March 2012 and also the Statement of Profit & 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. 1. We conducted our audit in accordance with auditing standards generally accepted in India. These 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. As required by the Companies (Auditor's Report) Order, 2003 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. 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; FOR S.K. BANSAL & CO., Chartered Accountants (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) Subject to Note 26(b) of financial statements regarding confirmation of Debit or Credit Balances. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with note 26 forming part of financial statement 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 Balance Sheet, of the state of affairs on the Company as at 31st March 2012; (b) in the case of Statement of Profit & Loss , of the Profit for the year ended on that date. (c) in case of Cash Flow Statement, of the cash flows for the year ended on that date.
2.
(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 & 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 & 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 to the extent applicable, Place : Chandigarh Dated : 14 August, 2012
Name : M/s. S.K. Bansal & Co. Chartered Accountants Address: Kothi No. 3193, Sector 28 D, Chandigarh-160002
Annexure referred to in Paragraph-2 of the Auditors' Report to the Shareholders of M/s. Parabolic Drugs Limited, Chandigarh on the accounts for the year ended 31st March 2012.
(i) (a) As confirmed by the management the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) We are informed that the company has framed programme of periodical physical verification of its fixed assets in phased manner, which in our opinion is reasonable having size of the company and nature of its business. In terms of such programme, during the year ended 31st March 2012, physical verification of the fixed assets was carried out by the management during the year and no material discrepancy was noticed on such verification. (c ) As confirmed by the management ,the substantial part of Fixed Assets have not been disposed off during the year. (ii) (a) According to the information & explanations given to us the inventories comprises of raw material, work in progress, material at shop floor and finished goods as on 31St March 2012 have been physically verified by the management. (b) The procedure of physical verification of inventory followed by the management is, in our opinion reasonable and adequate in relation to the size of the company and the nature of its business. (c) Quantitative records have been maintained for Raw Materials & Finished Goods produced. As confirmed by management no material discrepancies were noticed on physical verification. (iii) (a) The Company has not taken from/granted any (secured or unsecured) loans from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. (b) As Company has not taken from/granted loans apart from transactions on current account para iii(b), iii(c), iii(d) of the order is not applicable. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the (v) company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the act have been entered into the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangement entered into the register in pursuance of section 301 of the Act and exceeding the value of Rupees Five Lacs in respect of any party during the year, have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time. (vi) In our opinion and according to information and explanation given to us, the Company has not accepted deposits from the public as per Companies (Acceptance of Deposits) Rule of 1975 and as per provisions of Section 58A and 58AA of the Companies Act, 1956.
(vii) In our opinion the Company has an Internal Audit System commensurate with its size and nature of its business. (viii) As confirmed by the management, the Company is maintaining cost records as prescribed by Central Government under section 209(1)(d) of the Companies Act 1956. (ix) (a) According to information and explanations given to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable to it. . (b) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess, which have not been deposited on account of any disputed except as
43
referred to in Para No. (x) and (y) of additional note 26 to financial statement as on 31st March 2012. (x) There are no accumulated losses of the Company at the end of the year. The company has not incurred cash losses during the year covered by our audit and the immediately preceding financial year. In our opinion and according to the information and explanations given to us and as confirmed by management, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. No longterm funds have been used to finance short-term assets. (xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. (xix) No debentures have been issued during the year by the company. (xx) During the year no money has been raised by public issue hence the requirement of paragraph 4(xx) is not applicable. (xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.
(xi)
(xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. (xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. (xv) According to information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions. (xvi) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and as confirmed by management , we report that the term loans were applied for the purpose for which the loans were obtained.
FOR S.K. BANSAL & CO., Chartered Accountants (S.K. Bansal) Partner Place : Chandigarh Dated : 14 August, 2012 Membership No: 13147 FRN 002222N
Name : M/s. S.K. Bansal & Co. Chartered Accountants Address: Kothi No. 3193, Sector 28 D, Chandigarh-160002
The accompanying notes (No. 1 to 26) are an integral part of Financial Statements
45
For the year ended March 31, 2012 (` in million) Note As at 31.03.2012 As at 31.03.2011
REVENUE I. II. Revenue from Operations Other Income 18 19 9243.44 40.77 9284.21 6198.44 153.45 6351.89
III. Total Revenue (I +II) EXPENSES Cost of Materials consumed Changes in inventories of finished goods, work-in-progress and Stock-in-Trade Employee benefit expenses Finance costs Depreciation and amortization expense Other expenses IV. Total Expenses V. Profit before tax(III-IV) 22 23 24 25 20 21
8004.48 (1041.33)
5410.89 (897.82)
VI. Tax expense: (1) Current tax (including wealth tax) (2) Deferred tax Charge/ (Credit) (3) Tax Adjustment Earlier Years Total Tax Expenses VII. Profit for the period (V-VI) Weighted Average Number of Equity Shares Outstanding VIII. Earning per equity share of Rs.10 each: (1) Basic (2) Diluted 8.27 8.27 9.43 9.43 132.88 19.41 0.00 152.29 512.12 61892014 136.88 21.21 8.48 166.57 520.25 56086198
26
The accompanying notes (No. 1 to 26) are an integral part of Financial Statements Under reference to our report of even date. For S. K. Bansal & Co. Chartered Accountants S. K. Bansal Partner Membership No. 013147 FRN. 002222N Place : Chandigarh Dated : August 14, 2012 For and on behalf of the Board Vineet Gupta Whole Time Director Pranav Gupta Managing Director
For the year ended March 31, 2012 (` in million) As at 31.03.2012 As at 31.03.2011
CASH FLOW FROM OPERATING ACTIVITIES (Including WC Changes) - Profit Before Tax - Depreciation & Amortization - Finance Expenses - R & D Expenses Written off - Misc Expenses Written Off - Total Operating Cash flow before WC Changes Working Capital Changes Current Assets - Inventory - Trade Receivable - Loans & Advances & Other Current Assets Increase / (Decrease) in Current Assets Current Liabilities - Trade Payables - Other Current Liabilities & Provisions - Long Term Provisions Increase / (Decrease) in Current Liabilities Net Increase/(Decrease) in Working Capital - Income Tax Total Cash Flow from Operations including WC CASH FLOW FROM INVESTMENT ACTIVITIES - Purchase of Fixed Assets - Investment in Shares - R&D Expenditure Total Cash Flow from Investment Activities (B) 1100.27 (21.07) 934.83 2014.03 1125.75 36.81 640.16 1802.72 (A) 1068.16 187.59 9.83 1265.58 (589.45) 132.88 2070.88 894.87 70.43 7.16 972.46 1100.65 145.36 25.44 1110.84 (534.02) 99.31 676.13 1005.34 821.07 246.70 2073.11 664.41 100.54 641.37 206.14 1.85 1614.31 686.82 82.61 407.60 92.57 1.85 1271.45
47
For the year ended March 31, 2012 (` in million) As at 31.03.2012 As at 31.03.2011
CASH FLOW FROM FINANCING ACTIVITIES - Share Capital/Share Premium - Term Loans Additions / (Repayments) - Unsecured Loans/Deferred Creditors - Increase / (Decrease) in Working Capital Loans - Dividend - Public Issue Expenses - Finance Expenses Total Cash Flow from Financing Activities Net cash inflow/(outflow) (During the Year) Cash Balance in the beginning of the year Cash Balance at the end of the year (C) (A-B+C) 369.71 166.94 173.59 (36.09) (641.37) 32.78 89.63 256.57 346.20 1848.07 113.68 348.80 74.60 (117.69) (407.60) 1859.86 82.58 173.99 256.57
Under reference to our report of even date. For S. K. Bansal & Co. Chartered Accountants S. K. Bansal Partner Membership No. 013147 FRN. 002222N Place : Chandigarh Dated : August 14, 2012 For and on behalf of the Board
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 1 SHARE CAPITAL As at 31.03.2011
Authorised 62000000 Equity Shares (Previous Year 62000000) of Rs. 10 each Issued, Subscribed and Fully Paid Up 61892014 Equity Shares (Previous Year 61892014) of Rs. 10 each fully paid up Total Issued, Subscribed & Fully Paid Up Share Capital 618.92 618.92 618.92 618.92 620.00 620.00
(a) Reconciliation of Number of Shares Outstanding As at 31.03.2012 Number Equity Shares Shares outstanding at the beginning of current reporting period Shares Issued & Subscribed during the Period Shares Bought Back Shares outstanding at the end of current reporting period (b) Terms/ Rights Attached to Equity Shares 61892014 618.92 61892014 61892014 618.92 61892014 Amount Number
The Company has only One Class of Equity Shares having par value of Rs. 10 each. Each holder of Equity share is entitled to one vote per share with a right to receive per share dividend declared by the company. The company declares and pays dividend in Indian rupees.The Dividend proposed by Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of Equity shares held by the Shareholders. (c) Detail of Shareholders Holding more than 5% Shares in the Company As at 31.03.2012 Number M/s PNG Trading Pvt. Ltd. M/s Parabolic Infrastructure Pvt. Ltd. M/s BTS India Private Equity Fund Ltd. 14171836 5935891 5467484 % Holding 22.90% 9.59% 8.83% Number 13614045 5852462 5467484 As at 31.03.2011 % Holding 22.00% 9.46% 8.83%
49
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 2 RESERVE & SURPLUS As at 31.03.2011
Profit and Loss Account At the beginning of the year Add: Net Profit for the Year Less: Appropriations Provision for dividend on equity shares Equity dividend tax At the end of the year Capital Reserve At the beginning and at the end of the year Capital Subsidy At the beginning and at the end of the year Security Premium At the beginning of the year Add: Addition during the Year Less: Public Issue Expenses At the end of the year Net Surplus in the Statement of Profit and Loss 3 LONG TERM BORROWINGS 1291.28 168.05 1459.33 Terms of borrowings are as under: Term Loans from Banks are secured by way 1st pari passu charge on all existing & future fixed assets of the company at all locations with equitable mortgage of land & building, 2nd pari passu charge on all the current assets of the Company and pari passu charge on the collateral properties of M/s Parabolic Infrastructure P Ltd, M/s PNG Trading P Ltd & also personally guranteed by Mrs Rama Gupta,Mr. J.D.Gupta,Mr T.N Goel, Mr Pranav Gupta and Mr Vineet Gupta. 4 DEFERRED TAX LIABILITIES (NET) 921.57 1.11 922.68 1631.18 1631.18 3665.22 157.91 1601.67 128.40 1631.18 3171.08 3.00 3.00 0.34 0.34 15.47 2.51 2030.70 30.95 5.14 1536.56 1536.56 512.12 1052.40 520.25
Deferred Tax Liability Related to Fixed assets 116.94 116.94 97.53 97.53
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 5 LONG TERM PROVISIONS 14.72 16.16 30.88 6 SHORT TERM BORROWING 9.49 11.56 21.05 As at 31.03.2011
Secured: Working Capital Loans from Banks: - Cash Credit - Buyer Credit - Packing Credit - FCNR - Bills Discounted Unsecured: Working capital loan from Banks 362.19 3764.55 609.28 3590.96 2150.29 447.03 547.11 257.93 1382.56 718.95 340.19 225.78 314.20
Working Capital borrowings from Banks are secured by way of first pari passu charge on hypothecation of entire present & future current assets of the Company, Second pari passu charge on all fixed assets of the Company and pari passu charge on the collateral properties of M/s Parabolic Infrastructure Pvt Ltd, M/s. PNG Trading Pvt Ltd & also personally guaranteed by Mrs. Rama Gupta, Mr. J.D. Gupta ,Mr T.N Goel, Mr. Pranav Gupta and Mr. Vineet Gupta.
TRADE PAYABLES 2674.50 77.26 90.18 2841.94 1649.04 41.82 82.92 1773.78
Sundry Creditors - Materials Sundry Creditors - Expenses Sundry Creditors - Capital Expenses
OTHER CURRENT LIABILITIES 323.36 2.52 0.05 14.76 100.10 54.34 495.13 230.36 0.05 5.72 26.42 40.99 303.54
Current maturities of Long Term Debt Interest accrued but not due on Borrowings Share Application money due for refund Advance from Customers Statutory Liabilities Other Expenses Payable
51
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 9 SHORT TERM PROVISIONS 132.88 15.47 2.51 150.86 136.88 30.95 5.14 172.97 As at 31.03.2011
Provision for Income Tax Proposed Dividend on Equity shares Corporate Dividend Tax on Dividend
10
FIXED ASSETS
GROSS BLOCK Rate of Dep. (%) As on 1.4.2011 Addition During the Year Deduction During the Year Total As on 31.3.2012 As on 1.4.2011 DEPRECIATION Provided During the Year Assets As on Sold / 31.3.2012 Written Back / Adjustment NET BLOCK As on 31.3.2012 As on 31.3.2011
Tangible Assets: Land & Site Development Factory Building Non Factory Building Plant & Machinery Furniture & Fixture Tubewell Vehicles Computers & Peripherals Research & Development Fixed Assets 1847.44 350.01 3.55 2193.90 219.87 99.86 0.94 318.79 1875.11 1627.57 3.34% 1.63% 5.28% 6.33% 1.63% 9.50% 16.21% 7.80 333.33 6.50 1109.26 18.55 3.18 24.95 9.61 334.26 28.98 295.74 7.46 1.56 4.56 1.70 10.01 3.35 0.20 7.80 362.31 6.50 1405.00 26.01 4.74 26.16 11.31 344.07 24.69 0.87 146.15 3.17 0.18 8.49 4.67 31.65 11.46 0.11 65.94 1.24 0.06 2.50 1.66 16.89 0.94 36.15 0.98 212.09 4.41 0.24 10.05 6.33 48.54 7.80 326.16 5.52 1192.91 21.60 4.50 16.11 4.98 295.53 7.80 308.64 5.63 963.11 15.38 3.00 16.46 4.94 302.61
Intangible Assets: Computer Software 16.21% 2.67 2.67 2.53 2.53 5.20 5.20 0.71 0.71 0.68 0.68 1.39 1.39 3.81 3.81 1.96 1.96
1122.54 1122.54
951.41 951.41
201.07 201.07
1872.88 1872.88
1872.88 1872.88
1122.54 1122.54
TOTAL
2972.65
1303.95
204.62
4071.98
220.58
100.54
0.94
320.18
3751.80
2752.07
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 11 a. NON CURRENT INVESTMENTS Trade Investments: As at 31.03.2011
Parabolic Research Labs Ltd (Unquoted, Fully paid up) 2950000 equity Shares (PY 2950000) of Rs. 10/- each Parabolic Research Labs Ltd Unquoted, Fully paid up, towards Share Application Money pending allotment Ziven Lifesciences Ltd Unquoted, Fully paid up, 399996 equity Shares (PY nil ) of Rs. 10/- each b. Non Trade Investments: Investment in equity instruments Nimbua Greenfield (Punjab) Ltd- Unquoted, Fully paid up 18750 Equity shares (PY 25000) of Rs. 10/- each Investment in Mutual funds- Quoted, Fully Paid up SBI - SHF Ultra Short Term Fund Nil units (PY- 1952880.89) of Rs. 10/- each 35.66 56.73 0.18 0.25 25.00 4.00 1.98 1.98 29.50 29.50
12
Other Non Current Assets - Preliminary Expenses - Research & Development Expenses 11.32 1626.17 1637.49 13.17 897.48 910.65
13
INVENTORIES 462.18 4016.08 31.53 7.53 4517.32 392.85 3005.02 1.26 7.35 3406.48
Raw Materials Work in Progress/ Semi Finished Goods Finished Goods Stores and Consumables
Inventory has been valued as per inventory taken, valued and certified by the management on which we have relied upon.
53
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 14 TRADE RECEIVABLES As at 31.03.2011
(Unsecured, Considered Good) Outstanding for a period of: - More than six Months - Less than six Months Less: Provision for doubtful debts 469.36 1748.20 2217.56 168.29 2583.29 2751.58
15
CASH & CASH EQUIVALENTS 1.21 32.32 312.67 346.20 8.30 11.55 236.72 256.57
Cash in hand and as imprest Balance with Banks - Current accounts - Fixed Deposit accounts
16
SHORT TERM LOANS & ADVANCES 11.55 2.31 24.16 139.19 13.83 45.92 227.35 464.31 3.43 21.96 137.53 23.44 42.01 142.13 370.50
Loans and Advances to Related Parties Loans and Advances to Employees Security Deposits Deposits/Balances with Statutory Authorities Unexpired Expenses Commercial Advances - For Raw materials/ Expenses - For Capital Goods Other Loans and Advances
17
Interest accrued but not due on Fixed deposits Advances Recoverable in cash or kind or for value to be received
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 18 REVENUE FROM OPERATIONS 10123.08 80.04 959.68 9243.44 6752.97 38.22 592.75 6198.44 As at 31.03.2011
Gross Revenue from sale of products Other Operating Revenue Less: Excise duty attributable to products sold
19
20
Raw Material Opening Stock Add: Purchases Less: Closing Stock Stores and Spares Opening Stock Add: Purchases Less: Closing Stock 7.35 37.17 7.53 36.98 8004.48 5.55 37.35 7.35 35.55 5410.89 392.85 8036.82 462.18 7967.49 287.13 5481.06 392.85 5375.34
21
Opening Stock: Finished Goods Work in Progress Closing Stock: Finished Goods Work in Progress 31.53 4016.08 4047.61 (1041.33) 1.26 3005.02 3006.28 (897.82) 1.26 3005.02 3006.28 2108.46 2108.46
55
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 22 EMPLOYEE BENEFIT EXPENSES 200.41 9.03 15.72 225.16 150.76 6.67 11.87 169.30 As at 31.03.2011
Salary, Wages and other allowances Staff and labour Welfare Expense Contribution to Statutory Funds
23
FINANCE COST 504.82 155.59 (19.04) 641.37 298.53 96.53 12.54 407.60
Interest expense Other Borrowing cost Applicable net loss on foreign currency transactions and translations
24
DEPRECIATION & AMORTISATION EXPENSES 100.54 1.85 206.14 308.53 82.61 1.85 92.57 177.03
Depreciation Miscellaneous Expenditure written off Research and development expenditure written off
25
OTHER EXPENSES 98.06 13.73 2.37 5.71 32.95 24.30 8.59 59.93 0.77 1.26 14.04 1.58 3.58 2.73 60.96 10.32 0.70 5.46 45.29 13.62 10.71 65.23 0.40 1.19 7.26 0.89 2.82 2.17
Water & Electricity charges Repair & maintenance - Machinery - Building - Others Job work charges Generator set expenses Lab expenses Freight & other expenses (inward) Hire charges (nitrogen tank) Travelling & conveyance - Directors (including foreign travelling) - Others (including foreign travelling) Vehicle running & maintenance Printing & stationery Telephone expenses
Notes on Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 Postage & telegram Insurance expenses Rate, fees & taxes Legal & professional charges Directors remuneration Office expenses Security charges Auditors' remuneration - Statutory auditor - Internal auditor - Out of pocket expense Charity & donation Director sitting fee Advertisement Office rent Subscription fee Festival expenses Testing charges Newspaper,books & periodicals General repair & maintenance Loss on sale of fixed assets/shares Service charges Insurance expenses (sales) Freight & cartage outward Clearing & forwarding (export) Commission on sale Business promotion Exhibition & fair expenses Rebate & discount Miscellaneous expenses 0.60 0.23 0.01 0.08 0.11 0.35 2.95 0.42 0.17 0.99 0.04 2.78 1.11 0.28 6.57 10.13 32.42 25.60 13.59 0.09 51.36 6.67 481.59 0.45 0.17 0.03 0.61 0.09 0.85 2.18 0.19 0.49 0.51 0.11 2.05 0.57 0.59 5.83 15.85 17.44 17.77 35.74 3.45 24.08 2.93 398.07 2.76 8.98 5.11 10.25 18.00 6.09 4.25 As at 31.03.2011 2.75 8.49 1.72 3.76 15.00 3.98 3.37
57
Notes on Financial Statements for the year ended 31st March, 2012
Notes on Financial Statements for the year ended 31st March, 2012
Lower of Cost or Net Realizable Value whichever is less on FIFO Basis. However, materials and other items held for use in the production of finished goods are not written down below cost if the products in which they will be used are expected to be sold at or above cost. (ii) Works in Process / Semi Finished Goods At cost up to estimated stage of completion. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. (iii) Finished Goods Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of Finished goods includes excise duty. H. REVENUE RECOGNITION Revenue is recognized to the extent that it can be reliably measured and is probable that the economic benefits will flow to the company. The following specific recognition criteria must also be met before revenue is recognized. Sale of Goods Revenue from sale of Goods is recognized at the point of dispatch of finished goods. The VAT liability has been provided as per the VAT Returns filed. The additional liability arising at the time of assessment will be booked as & when arise. Sales are exclusive of VAT. Excise Duty deducted from Revenue (Gross) is the amount that is included in the Revenue (Gross) and not the entire amount of liability arising during the year. Interest Income Interest Income is recognized on time proportionate basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "Other Income" in the statement of Profit and Loss. Income from Job Work Income from job work is recognized on the basis of work executed as per the contract/agreement. DEPB (Duty Entitlement Pass Book) Income DEPB income is recognized by the Company after the admission of export benefit credited against the DEPB license realized from the Director General of Foreign Trade on eligible exports made by the Company and the gain (recognized on the basis of discount amount and the resultant difference between the license value and purchase value) on purchase of DEPB licenses from exporters for the purpose of payment of customs duty on import of raw material by the Company is also included within DEPB income. Investment Income Income from Investments is accounted on an accrual basis, inclusive of related tax deducted at source. Income from Dividends is accounted when the right to receive such dividends is established. I. FOREIGN CURRENCY TRANSACTIONS Foreign Currency Transactions are accounted for in accordance with Accounting Standard-11-The Effects of changes in Foreign Exchange Rates. Transactions in foreign currencies are recorded at the rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the rate prevailing as on the balance sheet date. Exchange differences arising on the settlement of monetary items or on reporting companys monetary items at rates different from those at which they were initially recorded during the year are recognized as income or expenses in the year in which they arise. Foreign Currency Monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Any gains or losses are recognized in the profit and loss account.
59
Notes on Financial Statements for the year ended 31st March, 2012
J.
INVESTMENTS The company follows AS-13 Accounting for investments for treatment of its investments. Long Term investments are stated at cost. However, provision for diminution in value, other than temporary is made. Current investments are stated at the lower of cost and fair value, which is determined on an individual investment basis.
K.
RETIREMENT AND OTHER EMPLOYEE BENEFITS Retirement Benefits are accounted in accordance with Accounting Standard -15 Accounting for retirement benefits in the financial statements of employers as follows: i) Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The company makes regular monthly contributions to Provident Funds and such paid/payable amounts are charged against revenue. ii) Defined Benefit Plans: Liability in respect of defined benefit plans i.e. gratuity and leave encashment, are determined based on actuarial valuation made by an independent actuary as at balance sheet date .The actuarial gains or losses are recognized immediately in the profit and loss account.
L.
BORROWING COSTS Borrowing costs include interest and commitment charges on borrowings. As per Accounting Standard -16 Borrowing Costs Costs incurred on borrowings directly attributable to development projects, which take substantial period of time to complete, are capitalized to respective projects and all other borrowing costs are recognized in the profit and loss account in the period in which they are incurred.
M. SEGMENT REPORTING The company is exclusively in the Pharmaceutical business segment and thus there is not more than one reportable segment, therefore the disclosure in the context of Accounting Standard 17 Segment Reporting has not been considered necessary. N. TAXES ON INCOME The company provides for Current tax as the amount of tax payable in respect of taxable income for the period, measured using the applicable tax rates and tax laws. Deferred tax is recognized on timing differences between taxable income and accounting income subject to the consideration of prudence, measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. Further, in respect of Deferred tax asset, it is recognized to the extent there is virtual certainty that there will be sufficient future taxable income available to realize such assets. O. EARNING PER SHARE Basic Earning per Share is calculated by dividing the net earnings after tax for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share net profit or loss for the year attributable to equity shareholders and weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. P . RESEARCH AND DEVELOPMENT EXPENSES In accordance with the Accounting Standard -26 "Intangible Assets", Cost incurred on research and development expenses of revenue nature are recognized as intangible assets and amortized on a straight line basis over a period of five years. Subsequent expenditure on research and development of revenue nature are also added to the cost of intangibles and also written off in succeeding five years.
Notes on Financial Statements for the year ended 31st March, 2012
Capital expenditure on Research & Development is shown under R&D Equipment under Fixed Assets and depreciation have been provided at the rates and in the manner provided according to Schedule VI of the Companies Act 1956. Q. AMORTISATION OF EXPENSES Preliminary Expenses are amortized over a period of ten years. R. EXPORT BENEFITS/ INCENTIVES Export entitlements under Duty Entitlement pass Book [DEPB] Scheme are recognized in the Profit & Loss Account when the right to receive credit as per terms of the scheme is established in respect of export made. Obligations/entitlements on account of Advance license scheme for import of raw material are accounted for on purchase of raw material and/ or export sales. S. CONTINGENT LIABILITIES AND PROVISIONS In accordance with Accounting Standard -29- Provisions, Contingent Liabilities and Contingent Assets, which are material and where future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed in notes on accounts to financial statements after careful evaluation by the management of the facts and legal aspects of the matters involved. T. USE OF ESTIMATES In preparing companies financial statement in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Difference between actual results and estimates are recognised in the period in which the results are known/ materialised. U. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS The use of Financial Derivatives Hedging Contracts is governed by the Companys policies which provide principles on the use of such financial derivatives consistent with the companys risk management strategy. The company does not use derivative financial instruments for speculative purposes. Financial Derivatives Hedging Contracts are accounted on the date of their settlement/termination and realized gain/loss in respect of the settled/terminated contracts is recognized in the profit and loss account. V. CASH AND CASH EQUIVALENTS Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of not more than three months.
61
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (a) During the year ended 31st March 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation for financial statements. However, it has significant impact on presentation and disclosures made in financial statements. The company has also regrouped/ reclassified the previous year figures to correspond with the current year's classification/ disclosure. (b) Debit or Credit Balances on whatever account are subject to confirmation/ reconciliation. (c) The work-in-process / semi finished goods and by product etc. have been grouped as closing stock and the variation is stock has been worked out accordingly. (d) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account. (e) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities. (f) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.
(g) Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents. (h) Stock of stores and consumables amounting to Rs.7.53 mn comprises spares and others consumable items. The value as estimated and certified by the management has been considered. (i) (j) Fixed Deposit with banks Rs.312.67 mn. (Previous year Rs.236.71 mn.) are pledged as margin money with banks. The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 933.38 mn. have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true financial position of the company as per policy of the company followed in proceeding years.
(k) The DEPB Income comprises export benefit against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of commerce, Govt. of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company. (l) Export Incentive have been accounted on accrual basis.
(m) The Inventory comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop floor as physically verified as on 31st March 2012, valued and certified by the management has been considered. (n) The company has circulated the balance confirmation letters for the balance confirmation from sundry Debtors and Creditors as on 31st March, 2012. However, in the absence of confirmation, the balances have been taken as per records of the company. (o) i) Disclosure in accordance with accounting standard (AS 29) Provisions, Contingent Liabilities and Contingent Assets: (` in million)
Particulars As at 1st April, 2011 Additions during the year Amount paid/ reversed during the year As at 31st March, 2012
9.49 11.56
5.78 6.52
0.55 1.92
14.72 16.16
Taxation matters in respect of which appeals are pending: Particulars Central Excise Duty # Rs. 0.34 million have been deposited towards disputed liability 2011-12 0.59 #
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (p) Taxation i) In order to comply with the requirement of section 211(3c) of the Companies Act, 1956 consequent to Accounting Standard 22 Accounting for Taxes on Income, the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax for the current period amounting to Rs.19.41 Million in the Statement of Profit & Loss. Deferred Tax Asset/ Liability are attributable to the following items: Deferred Tax Asset (Liability) 31.3.2011 (97.53) (97.53) Charge/ Credit (` in million) Deferred Tax Asset (Liability) 31.3.2012 (116.94) (116.94)
ii)
Particulars
Deferred Tax Liability Difference between Tax and Book Written down value of Fixed Assets (19.41) (19.41)
(q) Fixed Assets possessed by PARABOLIC DRUGS LIMITED are treated as Corporate Assets and are not cash generating units as per Accounting Standard-28 issued by the Institute of Chartered Accountants of India. In the opinion of Management there is no impairment of fixed assets of the Company. (r) Employee Benefits: Consequent upon adoption of Accounting Standard on Employee Benefits" (As 15) (Revised 2005), as required by the Standard, the following disclosures are made : (` in million) Reconciliation of opening and closing balances of the present value of the defined benefit obligation Obligation at period beginning Current service Cost Reconciliation of opening and closing balances of the present value Actuarial (gain)/loss Benefits paid Obligation at the year end (March 31, 2012) Changes in plan assets Plan assets at period beginning, at fair value Expected return on plan assets Actuarial gain / (loss) Contributions Benefits paid Plan assets at the year end, at fair value Reconciliation of present value of the obligation and the fair value of plan assets Fair value of plan assets at the end of the year Present value of the defined benefits obligation at the end of the year Liability / (Asset) recognized in the Balance Sheet Cost for the year Current Service Cost 4.64 5.71 Nil 14.72 14.72 Nil 16.16 16.16 (April1, 2011) Leave Encashment (Unfunded) 9.49 4.64 0.77 0.37 -0.55 14.72 N.A. Nil Nil Gratuity (Unfunded) 11.56 5.71 0.94 -0.13 -1.92 16.16 N.A. -
63
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: Interest Cost Expected return on plan assets Actuarial (gain)/ loss Net Cost recognized in the Profit and Loss Account Assumption used to determine the benefit obligations: Interest rate Estimated rate of return on plan assets Expected rate of increase in salary Actual return on plan assets (s) Earnings Per Share 2012 Profit for the year Weighted average number of Ordinary shares outstanding Add: Dilutive effect of potential ordinary shares Weighted average number of Ordinary shares in computing diluted earning per share Earnings per share on profit for the year (Face value Rs.10/- per share) - Basic - Diluted (t) 8.27 8.27 9.43 9.43 512.12 61892014 61892014 (` in million) 2011 528.73 56086198 56086198 8.60% N.A. 10.00% 8.60% N.A. 10.00% 0.77 0.37 5.78 -0.13 6.52 0.94 -
Related Party Disclosures in accordance with the Accounting Standard-18 as notified by the Companies (Accounting Standard) Rules, 2006 Key Management Personnel with whom transactions have taken place during the Year 1. 2. Shri Pranav Gupta Shri Vineet Gupta Managing Director Whole Time Director
Relatives of Key Management Personnel with whom transactions have taken place during the Year 1. 3. Shri J.D Gupta Smt. Rama Gupta 2. J.D Gupta (HUF) 4. Dr. Deepali Gupta
Subsidiary with whom transactions have taken place during the Year 1. Parabolic Research Lab Limited 2. Ziven Life Sciences Limited
Associates with whom transactions have taken place during the Year 1. 3. 5. PNG Trading Private Limited Vineet Packaging Industries Saj Infrastructure Private Limited 2. Parabolic Infrastructure Private Limited 4. Parabolic Estates Private Limited 6. Trackball Technology Private Limited
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: Related Party Transactions Disclosure of transactions between the company and the Related parties and the status of outstanding balances as on 31.03.2012 Nature of Transactions (Excluding Reimbursements) Remuneration to Key Management Personnel Rent Paid Purchase of Fixed Assets Loan & Advances given Loan & Advances taken Share Application Money Purchase of Goods Sale of Goods Salary Investment Balances as on 31st March, 2012 Investments Loans & Advances Loans (Liability) Sundry Creditors Sundry Debtors Note: Figures in Italics represents Previous Year's amount. 35.48 31.48 10.47 Nil 0.11 Nil 161.05 Nil 0.67 0.23 0.97 Subsidiary Associates Key Management Personnel 3.00 Nil 0.11 Nil 161.05 Nil 2.32 1.21 0.97 Nil 18.00 15.00 Relatives of Key Management Personnel 0.76 0.66 1.20 Nil Total
18.00 15.00 0.76 0.66 3.00 Nil 10.57 Nil 161.05 Nil Nil 1.98 2.32 1.21 0.97 Nil 1.20 Nil 4.00 10.00
65
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (u) The following expenses incurred during the year as attributable to the fixed assets (including Capital Work in Progress) have been capitalized: (` in million) Particulars Salary and Allowances Consultancy Charges Bank Interest/ Processing Fee Power & Fuel Others Amount 10.78 1.34 76.26 35.34 6.30 130.02 (v) The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientific and Industrial Research, Govt. of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala. The exemption from Director General of Income Tax (Exemption) is extended upto 31.3.2015 for Derabassi and up to 31.03.2013 for Barwala unit. (w) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. (x) There is a sum of Rs. 0.59 million outstanding on account of excise duty out of which a sum of Rs. 0.34 million has been deposited and balance of Rs. 0.26 million has not been deposited on account of dispute for which appeal is pending. (y) There is an outstanding liability of Rs.93.2 million on account of income tax for the Ay 2011-12 which has not been deposited on account of assessment proceedings, under process in view of proceedings initiated under section 132 of Income tax act 1961 in the financial year 2010-11. (z) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O. 301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an export oriented company is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i) (a), 3(ii)(a), 3 (ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided. (za) Additional information pursuant to the provision of paragraph 3 and 4 of Part-II of Schedule-VI of the Companies Act, 1956. [As certified by the Management and accepted by the Auditors] i) Value of Imports during the year (C.I.F Basis) As at 31.03.2012 Raw materials Capital goods 1785.34 54.95 (` in million) As at 31.03.2011 2592.23 22.85
Notes on Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: ii) Expenditure in Foreign Currency As at 31.03.2012 Salary Consultancy expenses Travelling expenses Commission on sales Fee & Taxes Business promotion expenses R & D Expenses iii) Earnings in Foreign Currency As at 31.03.2012 Export of Goods (F.O.B) 1212.46 10.62 1.61 3.33 14.75 1.89 0.44 (` in million) As at 31.03.2011 1736.17 12.00 1.51 3.40 (` in million) As at 31.03.2011 1.57 2.20
iv)
Amount of Dividend
1.02
(zb) Contingent Liabilities As at 31.03.2012 Letter of Credit (Foreign/ Inland) * Bank Guarantees Custom Duty # 2540.40 29.99 21.70
* Out of above material valuing Rs. 2413.88 Million (Previous year Rs 1232.21 million) has been received by 31.03.2012 and credited to respective Creditor Account. # The Company has received show clause notices from the Jt. Director General of Foreign Trade towards the non-fulfilment of export obligation against the Advance Licences obtained for import of duty free raw material. Though the company has taken up the matter with appropriate authority for the extension of export obligation period. In this regard the estimated contingent liability is Rs. 21.7 million towards the custom duty. (zc) Segment Reporting: There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.
67
2.
S. K. Bansal Partner Place: Chandigarh Dated: August 14, 2012 Membership No: 013147 FRN 002222N
I.
EQUITY AND LIABILITIES (1) Shareholders' Funds (a) Share Capital (b) Reserves and Surplus (2) Minority Interest (3) Non-Current Liabilities (a) Long-term borrowings (b) Deferred tax liabilities (Net) (c) Long term provisions (4) Current Liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions Total 6 7 8 9 3764.55 2842.56 498.06 150.86 13148.82 3590.96 1773.78 303.55 172.97 10673.02 3 4 5 1459.33 116.94 30.88 922.68 97.53 21.05 1 2 618.92 3665.22 1.50 618.92 3171.08 0.50
II.
ASSETS (1) Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress (b) Non-current investments (c) Other non-current assets (2) Current assets (a) Inventories (b) Trade receivables (c) Cash and cash equivalents (d) Short-term loans and advances (e) Other current assets Total 13 14 15 16 17 4517.32 2217.56 346.82 454.34 173.43 13148.82 26 3406.48 2751.58 256.76 370.50 167.93 10673.02 11 12 10 1875.13 3.96 1922.15 0.19 1637.92 1627.57 1.96 1154.02 25.25 910.97
The accompanying notes (No. 1 to 26) are an integral part of Financial Statements Under reference to our report of even date. For S. K. Bansal & Co. Chartered Accountants S. K. Bansal Partner Membership No. 013147 FRN. 002222N Place : Chandigarh Dated : August 14, 2012 For and on behalf of the Board Vineet Gupta Whole Time Director Pranav Gupta Managing Director
69
Consolidated Statement of Profit and Loss For the year ended March 31, 2012
(` in million) Note REVENUE I. II. Revenue from Operations Other Income 18 19 9243.44 40.77 9284.21 6198.44 153.45 6351.89 As at 31.03.2012 As at 31.03.2011
III. Total Revenue (I +II) EXPENSES Cost of Materials consumed Changes in inventories of finished goods, work-in-progress and Stock-in-Trade Employee benefit expenses Finance costs Depreciation and amortization expense Other expenses IV. Total Expenses V. Profit before tax(III-IV) 22 23 24 25 20 21
8004.48 (1041.33)
5410.89 (897.82)
VI. Tax expense: (1) Current tax (including wealth tax) (2) Deferred tax Charge/ (Credit) (3) Tax Adjustment Earlier Years Total Tax Expenses VII. Profit for the period (V-VI) Weighted Average Number of Equity Shares Outstanding VIII. Earning per equity share of Rs.10 each: (1) Basic (2) Diluted 8.27 8.27 9.43 9.43 132.88 19.41 152.29 512.12 61892014 136.88 21.21 8.48 166.57 520.25 56086198
26
The accompanying notes (No. 1 to 26) are an integral part of Financial Statements Under reference to our report of even date. For S. K. Bansal & Co. Chartered Accountants S. K. Bansal Partner Membership No. 013147 FRN. 002222N Place : Chandigarh Dated : August 14, 2012 For and on behalf of the Board Vineet Gupta Whole Time Director Pranav Gupta Managing Director
For the year ended March 31, 2012 (` in million) As at 31.03.2012 As at 31.03.2011
CASH FLOW FROM OPERATING ACTIVITIES (Including WC Changes) - Profit Before Tax - Depreciation & Amortization - Finance Expenses - R & D Expenses Written off - Misc Expenses Written Off - Total Operating Cash flow before WC Changes Working Capital Changes Current Assets - Inventory - Trade Receivable - Loans & Advances & Other Current Assets Increase / (Decrease) in Current Assets Current Liabilities - Trade Payables - Other Current Liabilities & Provisions - Long Term Provisions Increase / (Decrease) in Current Liabilities Net Increase/(Decrease) in Working Capital - Income Tax Total Cash Flow from Operations including WC CASH FLOW FROM INVESTMENT ACTIVITIES - Purchase of Fixed Assets - Minority Interest - Investment in Shares - Preliminary Expenses - R&D Expenditure Total Cash Flow from Investment Activities (B) 1118.23 (1.00) (25.06) 934.92 2027.04 1137.63 25.00 0.08 640.17 1802.88 (A) 1068.78 190.51 9.82 1269.11 (602.95) 132.88 2084.38 894.85 77.62 972.47 1102.73 145.36 23.36 1110.84 (534.02) 89.34 666.16 1005.34 821.07 248.79 2075.20 664.41 100.54 641.37 206.14 1.85 1614.31 686.82 82.61 407.60 92.57 1.85 1271.45
71
For the year ended March 31, 2012 (` in million) As at 31.03.2012 As at 31.03.2011
CASH FLOW FROM FINANCING ACTIVITIES - Share Capital/Share Premium - Term Loans Additions / (Repayments) - Unsecured Loans/Deferred Creditors - Increase / (Decrease) in Working Capital Loans - Dividend - Public Issue Expenses - Finance Expenses Total Cash Flow from Financing Activities Net cash inflow/(outflow) (During the Year) Cash Balance in the beginning of the year Cash Balance at the end of the year (C) (A-B+C) 369.70 166.94 173.59 (36.09) (641.37) 32.77 90.06 256.76 346.82 1848.07 113.67 348.77 74.60 (117.69) (407.60) 1859.82 80.30 176.46 256.76
Under reference to our report of even date. For S. K. Bansal & Co. Chartered Accountants S. K. Bansal Partner Membership No. 013147 FRN. 002222N Place : Chandigarh Dated : August 14, 2012 For and on behalf of the Board
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 1 SHARE CAPITAL As at 31.03.2011
Authorised 62000000 Equity Shares (Previous Year 62000000) of Rs. 10 each Issued, Subscribed and Fully Paid Up 61892014 Equity Shares (Previous Year 61892014) of Rs. 10 each fully paid up Total Issued, Subscribed & Fully Paid Up Share Capital 618.92 618.92 618.92 618.92 620.00 620.00
(a) Reconciliation of Number of Shares Outstanding As at 31.03.2012 Number Equity Shares Shares outstanding at the beginning of current reporting period Shares Issued & Subscribed during the Period Shares Bought Back Shares outstanding at the end of current reporting period (b) Terms/ Rights Attached to Equity Shares 61892014 618.92 61892014 61892014 618.92 61892014 Amount Number
The Company has only One Class of Equity Shares having par value of Rs. 10 each. Each holder of Equity share is entitled to one vote per share with a right to receive per share dividend declared by the company. The company declares and pays dividend in Indian rupees.The Dividend proposed by Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of Equity shares held by the Shareholders. (c) Detail of Shareholders Holding more than 5% Shares in the Company As at 31.03.2012 Number M/s PNG Trading Pvt. Ltd. M/s Parabolic Infrastructure Pvt. Ltd. M/s BTS India Private Equity Fund Ltd. 14171836 5935891 5467484 % Holding 22.90% 9.59% 8.83% Number 13614045 5852462 5467484 As at 31.03.2011 % Holding 22.00% 9.46% 8.83%
73
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 2 RESERVE & SURPLUS As at 31.03.2011
Profit and Loss Account At the beginning of the year Add: Net Profit for the Year Less: Appropriations Provision for dividend on equity shares Equity dividend tax At the end of the year Capital Reserve At the beginning and at the end of the year Capital Subsidy At the beginning and at the end of the year Security Premium At the beginning of the year Add: Addition during the Year Less: Public Issue Expenses At the end of the year Net Surplus in the Statement of Profit and Loss 3 LONG TERM BORROWINGS 1291.28 168.05 1459.33 Terms of borrowings are as under: Term Loans from Banks are secured by way 1st pari passu charge on all existing & future fixed assets of the company at all locations with equitable mortgage of land & building, 2nd pari passu charge on all the current assets of the Company and pari passu charge on the collateral properties of M/s. Parabolic Infrastructure P Ltd, M/s. PNG Trading P Ltd & also personally guaranteed by Mrs. Rama Gupta,Mr. J.D.Gupta,Mr T.N Goel, Mr. Pranav Gupta and Mr. Vineet Gupta. 4 DEFERRED TAX LIABILITIES (NET) 921.57 1.11 922.68 1631.18 1631.18 3665.22 157.91 1601.67 (128.40) 1631.18 3171.08 3.00 3.00 0.34 0.34 15.47 2.51 2030.70 30.95 5.14 1536.56 1536.56 512.12 1052.40 520.25
Deferred Tax Liability Related to Fixed assets 116.94 116.94 97.53 97.53
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 5 LONG TERM PROVISIONS 14.72 16.16 30.88 6 SHORT TERM BORROWING 9.49 11.56 21.05 As at 31.03.2011
Secured: Working Capital Loans from Banks: - Cash Credit - Buyer Credit - Packing Credit - FCNR - Bills Discounted Unsecured: Working capital loan from Banks 362.19 3764.55 609.28 3590.96 2,150.29 447.03 547.11 257.93 1,382.56 718.95 340.19 225.78 314.20
Working Capital borrowings from Banks are secured by way of first pari passu charge on hypothecation of entire present & future current assets of the Company, Second pari passu charge on all fixed assets of the Company and pari passu charge on the collateral properties of M/s Parabolic Infrastructure P Ltd, M/s PNG Trading P Ltd & also personally guaranteed by Mrs Rama Gupta, Mr. J.D. Gupta ,Mr T.N Goel, Mr. Pranav Gupta and Mr Vineet Gupta.
TRADE PAYABLES 2674.50 77.88 90.18 2842.56 1649.04 41.82 82.92 1773.78
Sundry Creditors - Materials Sundry Creditors - Expenses Sundry Creditors - Capital Expenses
OTHER CURRENT LIABILITIES 323.36 2.52 0.05 14.76 100.60 56.77 498.06 230.36 0.05 5.72 26.42 41.00 303.55
Current maturities of Long Term Debt Interest accrued but not due on Borrowings Share Application money due for refund Advance from Customers Statutory Liabilities Other Expenses Payable
75
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 9 SHORT TERM PROVISIONS 132.88 15.47 2.51 150.86 136.88 30.95 5.14 172.97 As at 31.03.2011
Provision for Income Tax Proposed Dividend on Equity shares Corporate Dividend Tax on Dividend
10
FIXED ASSETS
GROSS BLOCK Rate of Dep. (%) As on 1.4.2011 Addition During the Year Deduction During the Year Total As on 31.3.2012 As on 1.4.2011 DEPRECIATION Provided During the Year Assets As on Sold / 31.3.2012 Written Back / Adjustment NET BLOCK As on 31.3.2012 As on 31.3.2011
Tangible Assets: Land & Site Development Factory Building Non Factory Building Plant & Machinery Furniture & Fixture Tubewell Vehicles Computers & Peripherals Research & Development Fixed Assets 1847.44 Intangible Assets: Computer Software Patents 16.21% 2.67 2.67 2.53 0.15 2.68 5.20 0.15 5.35 0.71 0.71 0.68 0.68 1.39 1.39 3.81 0.15 3.96 1.96 1.96 350.03 3.55 2193.92 219.87 99.86 0.94 318.79 1875.13 1627.57 3.34% 1.63% 5.28% 6.33% 1.63% 9.50% 16.21% 7.80 333.33 6.50 1109.26 18.55 3.18 24.95 9.61 334.26 28.98 295.76 7.46 1.56 4.56 1.70 10.01 3.35 0.20 7.80 362.31 6.50 1405.02 26.01 4.74 26.16 11.31 344.07 24.69 0.87 146.15 3.17 0.18 8.49 4.67 31.65 11.46 0.11 65.94 1.24 0.06 2.50 1.66 16.89 0.94 36.15 0.98 212.09 4.41 0.24 10.05 6.33 48.54 7.80 326.16 5.52 1192.93 21.60 4.50 16.11 4.98 295.53 7.80 308.64 5.63 963.11 15.38 3.00 16.46 4.94 302.61
1154.02 1154.02
969.20 969.20
201.07 201.07
1922.15 1922.15
1922.15 1922.15
1154.02 1154.02
TOTAL
3004.13
1321.91
204.62
4121.42
220.58
100.54
0.94
320.18
3801.24
2783.55
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 11 a. b. NON CURRENT INVESTMENTS Trade Investments: Non Trade Investments: As at 31.03.2011
Investment in equity instruments Nimbua Greenfield (Punjab) Ltd- Unquoted, Fully paid up 18750 Equity shares (PY 25000) of Rs. 10/- each Investment in Mutual funds- Quoted, Fully Paid up SBI - SHF Ultra Short Term Fund Nil units (PY- 1952880.89) of Rs. 10/- each 0.19 25.25 0.19 0.25 25.00
12
Other Non Current Assets - Preliminary Expenses - Research & Development Expenses 11.75 1626.17 1637.92 13.49 897.48 910.97
13
INVENTORIES 462.18 4016.08 31.53 7.53 4517.32 392.85 3005.02 1.26 7.35 3406.48
Raw Materials Work in Progress/ Semi Finished Goods Finished Goods Stores and Consumables
Inventory has been valued as per inventory taken, valued and certified by the management on which we have relied upon.
77
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 14 TRADE RECEIVABLES As at 31.03.2011
(Unsecured, Considered Good) Outstanding for a period of: - More than six Months - Less than six Months Less: Provision for doubtful debts 2217.56 2751.58 469.36 1748.20 168.29 2583.29
15
CASH & CASH EQUIVALENTS 1.27 32.78 312.77 346.82 8.33 11.72 236.71 256.76
Cash in hand and as imprest Balance with Banks - Current accounts - Fixed Deposit accounts
16
SHORT TERM LOANS & ADVANCES 1.08 2.61 24.20 139.20 13.83 46.07 227.35 454.34 3.43 21.96 137.53 23.44 42.01 142.13 370.50
Loans and Advances to Related Parties Loans and Advances to Employees Security Deposits Deposits/Balances with Statutory Authorities Unexpired Expenses Commercial Advances - For Raw materials/ Expenses - For Capital Goods Other Loans and Advances
17
Interest accrued but not due on Fixed deposits Advances Recoverable in cash or kind or for value to be received
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 18 REVENUE FROM OPERATIONS 10123.08 80.04 959.68 9243.44 6752.97 38.22 592.75 6198.44 As at 31.03.2011
Gross Revenue from sale of products Other Operating Revenue Less: Excise duty attributable to products sold
19
20
Raw Material Opening Stock Add: Purchases Less: Closing Stock Stores and Spares Opening Stock Add: Purchases Less: Closing Stock 7.35 37.16 7.53 36.98 8004.47 5.55 37.35 7.35 35.55 5410.89 392.85 8036.82 462.18 7967.49 287.13 5481.06 392.85 5375.34
21
Opening Stock: Finished Goods Work in Progress Closing Stock: Finished Goods Work in Progress 31.53 4016.08 4047.61 (1041.33) 1.26 3005.02 3006.28 (897.82) 1.26 3005.02 3006.28 2108.46 2108.46
79
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 22 EMPLOYEE BENEFIT EXPENSES 200.41 9.03 15.72 225.16 150.76 6.67 11.87 169.30 As at 31.03.2011
Salary, Wages and other allowances Staff and labour Welfare Expense Contribution to Statutory Funds
23
FINANCE COST 504.82 155.59 (19.04) 641.37 298.53 96.53 12.54 407.60
Interest expense Other Borrowing cost Applicable net loss on foreign currency transactions and translations
24
DEPRECIATION & AMORTISATION EXPENSES 100.54 1.85 206.14 308.53 82.61 1.85 92.57 177.03
Depreciation Miscellaneous Expenditure written off Research and development expenditure written off
25
OTHER EXPENSES 98.06 13.73 2.37 5.71 32.95 24.30 8.59 59.93 0.77 1.26 14.04 1.58 3.58 2.73 60.96 10.32 0.70 5.46 45.29 13.62 10.71 65.23 0.40 1.19 7.26 0.89 2.82 2.17
Water & Electricity charges Repair & maintenance - Machinery - Building - Others Job work charges Generator set expenses Lab expenses Freight & other expenses (inward) Hire charges (nitrogen tank) Travelling & conveyance - Directors (including foreign travelling) - Others (including foreign travelling) Vehicle running & maintenance Printing & stationery Telephone expenses
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
(` in million) As at 31.03.2012 31.03.2011 Postage & telegram Insurance expenses Rate, fees & taxes Legal & professional charges Directors remuneration Office expenses Security charges Auditors' remuneration - Statutory auditor - Internal auditor - Out of pocket expense Charity & donation Director sitting fee Advertisement Office rent Subscription fee Festival expenses Testing charges Newspaper,books & periodicals General repair & maintenance Loss on sale of fixed assets/shares Service charges Insurance expenses (sales) Freight & cartage outward Clearing & forwarding (export) Commission on sale Business promotion Exhibition & fair expenses Rebate & discount Miscellaneous expenses 0.60 0.23 0.01 0.08 0.11 0.35 2.95 0.42 0.17 0.99 0.04 2.78 1.11 0.28 6.57 10.13 32.42 25.60 13.59 0.09 51.36 6.67 481.59 0.45 0.17 0.03 0.61 0.09 0.85 2.18 0.19 0.49 0.51 0.11 2.05 0.57 0.59 5.83 15.85 17.44 17.77 35.74 3.45 24.08 2.93 398.07 2.76 8.98 5.11 10.25 18.00 6.09 4.25 As at 31.03.2011 2.75 8.49 1.72 3.76 15.00 3.98 3.37
81
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FORMING PART OF BALANCE SHEET AND STATEMENT OF PROFIT & LOSS FOR PERIOD ENDED 31stMARCH, 2012 I.
a.
b.
Principles of Consolidation i) The consolidated financial statements relate to Parabolic Drugs Limited (the 'Company') and its subsidiaries. The consolidated financial statements have been prepared on the following basis: The financial statements of the company and its subsidiaries have been combined on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra group balances and intra group transaction resulting in unrealized profit or losses. The consolidated financial statements have been prepared using uniform accounting policies for like transaction and other event in similar circumstances and are presented to the extent possible in the same manner as in the company separate financial statements.
ii)
The subsidiaries considered in the consolidated financial Statements are:Country Of Incorporation % Age voting Power held as at 31.03.2012 98.33 79.99 % Age voting Power held as at 31.03.2011 98.33 -
Name of Company
India India
c. Other Significant Accounting Policies These are setout in the notes to the financial statements under Significant accounting policies and notes to accounts of the financial statements of the Parabolic Drugs Limited and its subsidiaries.
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (a) During the year ended 31st March 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation for financial statements. However, it has significant impact on presentation and disclosures made in financial statements. The company has also regrouped/ reclassified the previous year figures to correspond with the current year's classification/ disclosure. (b) Debit or Credit Balances on whatever account are subject to confirmation/ reconciliation. (c) The work-in-process / semi finished goods and by product etc. have been grouped as closing stock and the variation is stock has been worked out accordingly. (d) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account. (e) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities. (f) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.
(g) Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents. (h) Stock of stores and consumables amounting to Rs.7.53 mn comprises spares and others consumable items. The value as estimated and certified by the management has been considered. (i) (j) Fixed Deposit with banks Rs.312.67 mn. (Previous year Rs.236.71 mn.) are pledged as margin money with banks. The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 933.38 mn. have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true financial position of the company as per policy of the company followed in preceeding years.
(k) The DEPB Income comprises export benefit against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of commerce, Govt. of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company. (l) Export Incentive have been accounted on accrual basis.
(m) The Inventory comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop floor as physically verified as on 31st March 2012, valued and certified by the management has been considered. (n) The company has circulated the balance confirmation letters for the balance confirmation from sundry Debtors and Creditors as on 31st March, 2012. However, in the absence of confirmation, the balances have been taken as per records of the company. (o) i) Disclosure in accordance with accounting standard (AS 29) Provisions, Contingent Liabilities and Contingent Assets: (` in million)
Particulars As at 1st April, 2011 Additions during the year Amount paid/ reversed during the year As at 31st March, 2012
9.49 11.56
5.78 6.52
0.55 1.92
14.72 16.16
Taxation matters in respect of which appeals are pending: Particulars Central Excise Duty # Rs. 0.34 million have been deposited towards disputed liability 2011-12 0.59 #
83
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (p) Taxation i) In order to comply with the requirement of section 211(3c) of the Companies Act, 1956 consequent to Accounting Standard 22 Accounting for Taxes on Income, the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax for the current period amounting to Rs.19.41 Million in the Statement of Profit & Loss. Deferred Tax Asset/ Liability are attributable to the following items: Deferred Tax Asset (Liability) 31.3.2011 (97.53) (97.53) Charge/ Credit (` in million) Deferred Tax Asset (Liability) 31.3.2012 (116.94) (116.94)
ii)
Particulars
Deferred Tax Liability Difference between Tax and Book Written down value of Fixed Assets (19.41) (19.41)
(q) Fixed Assets possessed by PARABOLIC DRUGS LIMITED are treated as Corporate Assets and are not cash generating units as per Accounting Standard-28 issued by the Institute of Chartered Accountants of India. In the opinion of Management there is no impairment of fixed assets of the Company. (r) Employee Benefits: Consequent upon adoption of Accounting Standard on Employee Benefits" (As 15) (Revised 2005), as required by the Standard, the following disclosures are made : (` in million) Reconciliation of opening and closing balances of the present value of the defined benefit obligation Obligation at period beginning Current service Cost Reconciliation of opening and closing balances of the present value Actuarial (gain)/loss Benefits paid Obligation at the year end (March 31, 2012) Changes in plan assets Plan assets at period beginning, at fair value Expected return on plan assets Actuarial gain / (loss) Contributions Benefits paid Plan assets at the year end, at fair value Reconciliation of present value of the obligation and the fair value of plan assets Fair value of plan assets at the end of the year Present value of the defined benefits obligation at the end of the year Liability / (Asset) recognized in the Balance Sheet Cost for the year Current Service Cost 4.64 5.71 Nil 14.72 14.72 Nil 16.16 16.16 (April1, 2011) Leave Encashment (Unfunded) 9.49 4.64 0.77 0.37 -0.55 14.72 N.A. Nil Nil Gratuity (Unfunded) 11.56 5.71 0.94 -0.13 -1.92 16.16 N.A. -
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: Interest Cost Expected return on plan assets Actuarial (gain)/ loss Net Cost recognized in the Profit and Loss Account Assumption used to determine the benefit obligations: Interest rate Estimated rate of return on plan assets Expected rate of increase in salary Actual return on plan assets (s) Earnings Per Share 2012 Profit for the year Weighted average number of Ordinary shares outstanding Add: Dilutive effect of potential ordinary shares Weighted average number of Ordinary shares in computing diluted earning per share Earnings per share on profit for the year (Face value Rs.10/- per share) - Basic - Diluted (t) 8.27 8.27 9.43 9.43 512.12 61892014 61892014 (` in million) 2011 528.73 56086198 56086198 8.60% N.A. 10.00% 8.60% N.A. 10.00% 0.77 0.37 5.78 -0.13 6.52 0.94 -
Related Party Disclosures in accordance with the Accounting Standard-18 as notified by the Companies (Accounting Standard) Rules, 2006 Key Management Personnel with whom transactions have taken place during the Year 1. 2. Shri Pranav Gupta Shri Vineet Gupta Managing Director Whole Time Director
Relatives of Key Management Personnel with whom transactions have taken place during the Year 1. 3. Shri J.D Gupta Smt. Rama Gupta 2. J.D Gupta (HUF) 4. Dr. Deepali Gupta
Subsidiary with whom transactions have taken place during the Year 1. Parabolic Research Lab Limited 2. Ziven Life Sciences Limited
Associates with whom transactions have taken place during the Year 1. 3. 5. PNG Trading Private Limited Vineet Packaging Industries Saj Infrastructure Private Limited 2. Parabolic Infrastructure Private Limited 4. Parabolic Estates Private Limited 6. Trackball Technology Private Limited
85
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: Related Party Transactions Disclosure of transactions between the company and the Related parties and the status of outstanding balances as on 31.03.2012 Nature of Transactions (Excluding Reimbursements) Remuneration to Key Management Personnel Rent Paid Purchase of Fixed Assets Loan & Advances given Loan & Advances taken Share Application Money Purchase of Goods Sale of Goods Salary Investment Balances as on 31st March, 2012 Investments Loans & Advances Loans (Liability) Sundry Creditors Sundry Debtors Note: Figures in Italics represents Previous Year's amount. 35.48 31.48 10.47 Nil 0.11 Nil 161.05 Nil 0.67 0.23 0.97 Subsidiary Associates Key Management Personnel 3.00 Nil 0.11 Nil 161.05 Nil 2.32 1.21 0.97 Nil 18.00 15.00 Relatives of Key Management Personnel 0.76 0.66 1.20 Nil Total
18.00 15.00 0.76 0.66 3.00 Nil 10.57 Nil 161.05 Nil Nil 1.98 2.32 1.21 0.97 Nil 1.20 Nil 4.00 10.00
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: (u) The following expenses incurred during the year as attributable to the fixed assets (including Capital Work in Progress) have been capitalized: (` in million) Particulars Salary and Allowances Consultancy Charges Bank Interest/ Processing Fee Power & Fuel Others Amount 10.78 1.34 76.26 35.34 6.30 130.02
(v) The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientific and Industrial Research, Govt. of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala. The exemption from Director General of Income Tax (Exemption) is extended upto 31.3.2015 for Derabassi and up to 31.03.2013 for Barwala unit. (w) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries is as under : (` in million) Particulars 2011-12 Parabolic Research Labs Ltd. a) b) c) d) e) f) g) h) i) j) Share Capital Reserves Total Assets Total Liabilities Detail of Investments Turnover Profit before Taxation Provision for Taxation Profit after Taxation Proposed Dividend 30.00 42.10 0.00 Ziven Lifesciences Ltd 5.00 8.89 0.00 2010-11 Parabolic Research Labs Ltd. 30.00 31.99 0.00 Ziven Lifesciences Ltd -
(x) There is a sum of Rs. 0.59 million outstanding on account of excise duty out of which a sum of Rs. 0.34 million has been deposited and balance of Rs. 0.26 million has not been deposited on account of dispute for which appeal is pending. (y) There is an outstanding liability of Rs. 93.2 million on account of income tax for the Ay 2011-12 which has not been deposited on account of assessment proceedings, under process in view of proceedings initiated under section 132 of Income tax act 1961 in the financial year 2010-11. (z) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O. 301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an export oriented company is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i) (a), 3(ii)(a), 3 (ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided. (za) Additional information pursuant to the provision of paragraph 3 and 4 of Part-II of Schedule-VI of the Companies Act, 1956. [As certified by the Management and accepted by the Auditors] i) Value of Imports during the year (C.I.F Basis) As at 31.03.2012 Raw materials Capital goods 1785.34 54.95 (` in million) As at 31.03.2011 2592.23 22.85
87
Notes on Consolidated Financial Statements for the year ended 31st March, 2012
26 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS: ii) Expenditure in Foreign Currency As at 31.03.2012 Salary Consultancy expenses Travelling expenses Commission on sales Fee & Taxes Business promotion expenses R & D Expenses iii) Earnings in Foreign Currency As at 31.03.2012 Export of Goods (F.O.B) 1212.46 10.62 1.61 3.33 14.75 1.89 0.44 (` in million) As at 31.03.2011 1736.17 12.00 1.51 3.40 (` in million) As at 31.03.2011 1.57 2.20
iv)
Amount of Dividend
1.02
(zb) Contingent Liabilities As at 31.03.2012 Letter of Credit (Foreign/ Inland) * Bank Guarantees Custom Duty # 2540.40 29.99 21.70
* Out of above material valuing Rs. 2413.88 Million (Previous year Rs 1232.21 million) has been received by 31.03.2012 and credited to respective Creditor Account. # The Company has received show clause notices from the Jt. Director General of Foreign Trade towards the non-fulfilment of export obligation against the Advance Licences obtained for import of duty free raw material. Though the company has taken up the matter with appropriate authority for the extension of export obligation period. In this regard the estimated contingent liability is Rs. 21.7 million towards the custom duty. (zc) Segment Reporting: There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.
NOTICE
NOTICE is hereby given that the SIXTEENTH ANNUAL GENERAL MEETING of the Members of the Company will be held on Friday, the 28th day of September, 2012 at 3.00 P .M. at PHD House, Sector 31 A, Chandigarh to transact the following business:-
Ordinary Business:
1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2012, the Statement of Profit and Loss for the year ended on that date, together with Report of Auditors and Directors thereon. To declare dividend on Equity Shares. (a) To appoint a Director in place of Mr. Inder Bir Singh Passi, who retires by rotation in accordance with Article 76 of the Articles of Association of the Company and being eligible, offers himself for re-appointment. (b) To appoint a Director in place of Dr. Ram Kumar, who retires by rotation in accordance with Article 76 of the Articles of Association of the Company and being eligible, offers himself for re-appointment. 4. To appoint Auditors for the year 2012-2013 and to fix their remuneration.
2. 3.
Special Business:
5. To consider and if thought fit, to pass with or without modification (s), the following resolution as a Special Resolution: RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 and other applicable provisions, if any, of the Companies Act, 1956, read with Schedule XIII of the said Act and subject to such approvals/ sanctions as may be required, Mr. Gurpreet Singh Sandhu be and is hereby appointed as a Whole Time Director (Business Promotion) of the Company for a period of one year w.e.f. 1st November, 2012 to 31st October, 2013 and Mr. Sandhu shall not be entitled to any salary, commission or perquisites, however, he shall be reimbursed all expenses as may be incurred by him regarding all business promotion activities of the Company. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take all such acts, deeds, matters and things as may be deemed necessary, expedient and proper to give effect to the aforesaid resolution.
(Vipin Gupta) Vice President & Company Secretary Place: Chandigarh Date: 14th August, 2012
89
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. THE BLANK PROXY FORM IS ENCLOSED. 2. The Information pursuant to Corporate Governance Clause of the Listing Agreement (s) regarding the directors seeking appointment/re-appointment in the Annual General Meeting as proposed in Item No. 3 & 5 of the notice is annexed hereto separately and forms part of the Notice. 3. The Register of Members and the Share Transfer Books of the Company shall remain closed from 21st September, 2012 to 28th September, 2012 (Both days inclusive). 4. Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, in respect of Item No. 5 is annexed hereto and forms part of the Notice. 5. The Dividend declared, if any, will be paid to those members whose names appear in the Register of Members of the Company as on the date of Annual General Meeting i.e. 28th September, 2012. However, in respect of the shares held in electronic form, the dividend will be paid on the basis of beneficial ownership as at the closing hour of the 20th September, 2012, as per details to be furnished by Depositories for this purpose. 6. The Members holding shares in physical mode are requested to notify the change in their address, if any, at the earliest to the Registrar & Transfer Agent/Company. However members, holding shares in electronic mode may notify the change in their address, if any, to their respective Depository Participants. 7. Members desiring any information as regards Accounts are requested to write to the Company at its Registered Office at least 10 days before the date of Annual General Meeting so as to enable the management to keep the information ready. 8. The copies of relevant documents can be inspected at the Registered Office of the Company on any working day between 10.30 A.M. to 12.30 P .M. 9. Members are requested to bring their copy of Annual Report along with them to the Annual General Meeting. 10. The Ministry of Corporate Affairs ("MCA") has vide Circular Nos. 17/ 2011 and 18/ 2011 dated 21st April, 2011 and 29th April, 2011 respectively, taken a 'Green Initiative in Corporate Governance' by allowing paperless compliances through electronic mode, allowing to send documents such as Notices convening General Meetings, Audited Financial Statements, Directors' Report, Auditors' Report etc. and any other Notice/Documents, henceforth in electronic form in lieu of paper form. Pursuant of above, the Company is sending the notice of 16th Annual General Meeting and Annual Report of the Company for the Financial Year 2011-12 at the E-mail address of the members whose E-mail address are registered with the Depositories/ RTA/Company. The members whose E-mail address are not registered/updated with the Depositories or the RTA/Company are requested to please register their E-mail address with your Depositories, if they hold the Company's shares in electronic form, under intimation to the Registrar & Transfer Agent through their registered E-mail address. However, if they hold the shares in physical form then they may register their E-mail address with Registrar & Transfer Agent of the Company by sending a letter under their Registered Signature at the below mentioned Address: M/s. Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai - 400 078 Tel: + (91 22) 2596 3828 Fax: + (91 22) 2594 6969 Email: mumbai@linkintime.co.in Website: www.linkintime.co.in A-40, 2nd Floor, Naraina Industrial Area, Phase-II, Near Batra Banquet Hall, New Delhi - 110 028 Tel: + (91 11) 4141 0592,93,94 Fax: + (91 11) 4141 0591 Email: delhi@linkintime.co.in Website: www.linkintime.co.in
11. Members holding shares in the same/identical name(s) under different folios are requested to apply for consolidation of such folios and send relevant share certificates to the Company/ Registrar and Transfer Agent. By order of the Board (Vipin Gupta) Vice President & Company Secretary Place: Chandigarh Date: 14th August, 2012
Nil
Nil
Nil
15000
11500
PROXY FORM
I/We ........................................................................................................................................................................................................ of ............................................................................................................................................................................................................ in the District ............................................................................................................................................. being a Member/Members of Parabolic Drugs Limited, hereby appoint ......................................................................................................................................... of ..................................................................................................... in the ........................................................................................... District of .................................................................................... failing him/her .................................................................................. of ...................................................................................... in the district of .......................................................................................... as my/our proxy to vote for me/us on my/our behalf at the 16th Annual General Meeting of the Company to be held on Friday, the 28th day of September, 2012 at 3.00 P .M. and at any adjournment thereof. Signed this ..................................... Day of .....................................2012. Address .................................................................................................... Folio No./Client ID No. ........................................................................... DP ID No. ................................................................................................. NOTES: 1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote on poll instead of himself/herself. 2. The Proxy form duly signed across Revenue Stamp of Rupee One should reach the Companys Registered Office at least 48 hours before the time of meeting.
Affix Rupee One Stamp Signature ...................................................................... here
ATTENDANCE SLIP
I hereby record my presence at the 16th Annual General Meeting of the above named Company being held at PHD House, Sector 31 A, Chandigarh at 3.00 P .M. on Friday, and the 28th day of September, 2012.
Full Name of the Member (In BLOCK LETTERS) Folio No./Client ID No. .....................................................
Signature
Signature
NOTE: Members attending the meeting in person or by proxy are requested to complete the attendance slip and hand it over at the entrance of the meeting hall of the Company
Corporate Information
Board of Directors:
Mr. Inder Bir Singh Passi - Chairman Mr. Pranav Gupta - Managing Director Mr. Vineet Gupta - Whole -Time Director Mr. Gurpreet Singh Sandhu - Whole Time Director (Business Promotion) Mr. Arun Mathur - Director Dr. Ram Kumar - Director Mr. Manmohan Lal Sarin - Director Mr. Nikhil Goel - Director Mr. Koppisetty Srinivas - Nominee Director (M/s. BTS India Private Equity Fund Limited)
Auditors:
M/s. S.K. Bansal & Co., Chartered Accountants, Kothi No.3193,Sector 28 D, Chandigarh
Registered Office:
S.C.O. 99-100, Top Floor, Sector 17 B, Chandigarh Website : www.parabolicdrugs.com
Corporate Office:
9AB, Second Floor, Taimoor Nagar, New Friends Colony, New Delhi
President (Technical)
Mr. Yatish Kumar Bansal
Works:
Village : Sundhran, P .O. : Mubarakpur, Tehsil : Derabassi, Distt.: Mohali (Punjab) Plot No.45, Industrial Area, Phase - II, Panchkula (Haryana) Village : Chachrauli, Tehsil : Derabassi, Distt.: Mohali (Punjab)
R&D Centre:
Plot No. 280-281, Phase - I, Block - 1, Alipur, Industrial Estates, HSIIDC, Tehsil : Barwala, Distt.: Panchkula (Haryana)
Bankers:
State Bank of India (Specialised Commercial Branch) S.C.O.103-106, Bank Square, Sector 17 B, Chandigarh ICICI Bank Limited S.C.O. 129-130, Madhya Marg, Sector 9, Chandigarh UCO Bank S.C.O. 55-57, Bank Square, Sector 17 B, Chandigarh State Bank of Patiala S.C.O. 103-107, Sector 8 C, Chandigarh Union Bank of India 4/14-A, Asaf Ali Road, New Delhi Central Bank of India S.C.O. 58-59, Bank Square, Sector 17 B, Chandigarh Bank of Baroda S.C.O. 62-63, Bank Square, Sector 17 B, Chandigarh IDBI Bank Limited S.C.O. 72-73, Bank Square, Sector 17 B, Chandigarh Canara Bank S.C.O. 117-119, Sector 17 C, Chandigarh Export-Import Bank of India First Floor, PHD House, Sector 31 A, Dakshin Marg, Chandigarh State Bank of Hyderabad S.C.O. 62-63, Sector 34 A, Chandigarh
Sales Depot:
Parabolic Drugs Limited Godown No.11, Baldev Estate, Opp. M.P . Pandya High School, Jetpur (Aslali) Ahmedabad (Gujarat) Parabolic Drugs Limited Unit No. B-116, Shree Raj Laxmi Commercial Complex, Agra Road, Kalher Village : Bhiwandi, Distt.: Thane (Maharashtra) Parabolic Drugs Limited Safex Cargo Complex, Village Kishanpura Nalagarh Road, Baddi, Distt.: Solan (H.P) Parabolic Drugs Limited (Formulations Warehouse) 35 Feet Road, Near Cipla Warehouse, Zirakpur, Distt.: Mohali (Punjab)
Design & Printed at : Azad Hind Stores (P) Ltd.; SCO 34, 17-E, Chd.
www.parabolicdrugs.com