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Gujarat Terce Laboratories Ltd.

BSE: 524314 Sector: Health care
NSE: N.A. ISIN Code: INE499G01013
BSE LIVE 14:15 | 19 Sep 8.80 -0.30
(-3.30%)
OPEN

8.75

HIGH

8.80

LOW

8.75

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 8.75
PREVIOUS CLOSE 9.10
VOLUME 745
52-Week high 18.20
52-Week low 7.73
P/E
Mkt Cap.(Rs cr) 7
Buy Price 8.80
Buy Qty 200.00
Sell Price 9.48
Sell Qty 600.00
OPEN 8.75
CLOSE 9.10
VOLUME 745
52-Week high 18.20
52-Week low 7.73
P/E
Mkt Cap.(Rs cr) 7
Buy Price 8.80
Buy Qty 200.00
Sell Price 9.48
Sell Qty 600.00

Gujarat Terce Laboratories Ltd. (GUJTERCELABS) - Director Report

Company director report

GUJARAT TERCE LABORATORIES LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT Dear Shareholders, Your Directors present the Twenty Seventh Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2012. FINANCIAL RESULTS: 2011-12 2010-11 (Rs. in Lac) (Rs. in Lac) Gross Income 9870.61 3590.58 Profit before Depreciation & Tax 46.31 90.67 Depreciation 29.25 19.17 Profit after Depreciation 17.07 71.50 Tax- Current 3.36 31.85 Deferred 0.66 (1.78) Profit after tax 13.05 41.42 Profit brought forward from previous year 104.18 62.76 Balance Carried To Balance Sheet 117.24 104.18 PERFORMANCE REVIEW The Company has more than one business segments namely pharmaceutical formulations and metal recycling division. PHARMACEUTICAL DIVISION: During the year under review, the revenue from operations increased from Rs.1834.29 lacs to Rs 1925.56 lacs and has written off bad debts to the tune of Rs 16.91 lacs as compared to Rs 88.50 lacs during previous year. METAL RECYCLING DIVISION: During the year under review, the revenue from operations increased from Rs.1776.38 lacs to Rs 7940.40 lacs. Your Directors are actively considering hiving off Metal Recycling Division by way of demerger. The demerger will be undertaken subject to the approval of the Gujarat High Court, BSE, the Securities and Exchange Board of India and other statutory bodies. The demerger will help the company to continue to carry on business with greater focus and attention through two separate companies each having their own management team and administrative set-up. Once hived off, the resulting Company consisting of Metal unit will offer a ready platform for induction of Joint venture partner. APPROPRIATIONS The Company has not recommended any dividend and hence the Board has recommended a transfer of Rs NIL to General Reserve and an amount of Rs.13.05 Lacs has been retained in Statement of Profit & Loss. LISTING OF SHARES The Company's .share continues to remain listed with The Stock Exchange, Mumbai, where the share is actively traded. MANAGEMENT DISCUSSION & ANALYSIS Management Discussion and Analysis have been reviewed by the Audit Committee and the same is forming a part of this Annual Report. CORPORATE GOVERNANCE Pursuant to clause 49 of the listing agreement, a report on corporate governance along with auditors' certificate of its compliance is included as part of the annual report. DIRECTORS The Clause 65 of Articles of Association of the Company provides that at least two-thirds of our Directors shall be subject to retirement by rotation. One third of these retiring Directors must retire from office at each Annual General Meeting of the shareholders. A retiring Director is eligible for re-election. Mr. Gordhanbhai Patel, Mr. Kanubhai Patel and Mr. S. P. Pareek retire by rotation at the ensuing Annual General Meeting and, being eligible, Mr. Gordhanbhai Patel and Mr. Kanubhai Patel offer themselves for reappointment. Mr. S. P. Pareek does not offer himself for reappointment. On recommendation of remuneration committee your Directors at its meeting held on 31/12/2011 recommended for the approval of the Members, re- appointment of Mr. N. P. Prajapati as Managing Director, not liable to retire by rotation, of your Company, for a period of five years from 11/01/2012. STATUTORY DISCLOSURES: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: A. Conservation of Energy I. The company has not made any investment [for energy conservation] and taken any specific measures to reduce energy cost per unit. However, it intends to conserve energy for future generation. II. Part A pertaining to conservation of energy is applicable to the Company. Power and fuel consumption: [Pharma Division] I. Electricity Current Year Previous Year * Purchased Unit 51370 57165 Total Amount 337990 347078 Average Cost 6.60 6.07 * Own generation: N.A. N.A. Power and fuel consumption: [Metal Division] II. Electricity Current Year Previous Year * Purchased Unit 105610 13805 Total Amount 1214727 150776 Average Cost 11.50 10.92 * Own generation: N.A. N.A. NOTE: The Company has not used coal/furnace oil as fuel during the year and has not generated electricity internally. B. Technology Absorption There is no Research and Development activity carried out by the Company. C. Foreign Exchange Earnings and Outgo: The Company has earned total Foreign Exchange of Rs 12.34 Lacs by way of exports in the year 2011-12 (6.89 Lacs P.Y). PARTICULARS OF EMPLOYEES: The information as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees') Rules, 1975 as amended from time to time is nil. Human Resource The Human Resource plays an important and vital role in the growth and success of an organization. The Human Resource Development is an integral part of the Company's Corporate Philosophy. The Company is committed to provide career oriented training to its employees at all levels with an added impetus to build leaders. The company continues to have extremely cordial personnel relations. DIRECTOR'S RESPONSIBILITY STATEMENT: Pursuant to sub-Section (2AA) of Section 217 of Companies Act'1956 the Board of Directors of the Company hereby state and confirm that: ' (i) in preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;. (ii) We have selected such accounting policies and applied them consistently and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at end of the financial year and of the profit or loss of the Company for that period; (iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) We have prepared the annual accounts on a going concern basis. CASH FLOW A Cash Flow statement for the year ended March 31, 2012 is attached to the Balance Sheet. AUDITORS AND AUDITORS' REPORT: The retiring Auditor M/s Pary & Co, Chartered Accountants, Ahmedabad has indicated their willingness to continue as auditor of the Company. It is proposed to reappoint M/s Pary & Co., Chartered Accountants, Ahmedabad as auditors of the Company till the conclusion of Twenty Seventh Annual General Meeting. The Company has received certificate from auditor to the effect that the reappointment if made, would be within prescribed limit under Section 224 (1-B) of the Companies Act, 1956. COST AUDIT As per the requirement of the Central government and pursuant to Section 233B of the Companies Act, the Audit of the cost accounts relating to Pharma Sector and Metal Sector is carried out. M/s Koushlya V. Melwani was appointed as a cost auditor relating to Pharma division and Metal Division for the year ended on 31-03-2012. EXPLANATION TO COMMENTS OF AUDITORS' REPORT: The auditors have qualified their report in respect of delay in payment of certain statutory dues, it is always our endeavor to pay all statutory dues within the prescribed time limit. The delay, as reported was not intentional and was for few days. FIXED DEPOSITS: The Company has not accepted any deposits from the public. INSURANCE The Company's assets are adequately insured against major risks. ACKNOWLEDGMENTS: The Board expresses their appreciation for continued co-operation and support extended to the Company by Bank of Baroda and customers. The Board also thanks the Medical Profession, the Trade and Consumers for their patronage of the Company's products. The Board also records its deep appreciation of the creditable services rendered by the Company's employees at all levels. For and on behalf of the Board of Directors 30/07/2012 Registered office:122/2, Mr. N.P. Prajapati Ravi Estate, Bileshwarpura, Managing Director Chhatral Dist: Gandhinagar MANAGEMENT DISCUSSION & ANALYSIS This Report includes discussion on the following matters within the limits set by the Company's competitive position: INDUSTRY STRUCTURE & DEVELOPMENT PHARMACEUTICAL FORMULATIONS The pharmaceutical industry in India is stated to be valued at approximately US$ 12.26 billion as per industry estimates. This industry is growing @ 10-11% per annum on compounded growth rate basis. India's pharmaceutical sector is slated to grow to US $ 55 billion by 2020, based on projections by a McKinsey report on Pharma 2020. The Domestic formulations market, valued at Rs. 48,200 crore has grown steadily at CAGR of 14-15% over the past five years. The strong growth has been driven by a confluence of factors including - a) rising household income levels leading to higher expenditure on healthcare, b) increasing prevalence of life?*yle related diseases, c) improving healthcare infrastructure/delivery systems and 4) rising penetration in smaller towns and rural areas. The acute therapy segments dominate the market with a share of 73% of the total market. However, with changing demographics and lifestyle patterns, the chronic segments such as cardiovascular, anti-diabetic, neurology, psychiatry have been growing at a faster pace and the market is gradually shifting towards chronics. In 2010-11, while the market grew by 15%, chronics grew by 18%. As per IMS health estimates, the chronic therapies are likely to comprise more than 50% of the market by 2020 with cardiovascular (second largest segment after anti-infective) and anti- diabetic will take lead while segments like anti-cancer will also add to the momentum. The industry today can boast of producing the entire range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations. The Government allows 100 per cent FDI under the automatic route in the drugs and pharmaceuticals sector. India has a total of 24,000 pharmaceutical companies, of which around 250 falls under the organized category. METAL RECYCLING Recycling of copper and copper alloys is relatively cheap, with small power consumption, and with minimal losses. The recycling of copper and its alloys play a significant role in the economics of production. The cost of the raw material can be considerably reduced if an alloy can be made using recycled material. If the scrap is high purity copper and has not been contaminated by other metals, it can be used to make a high quality product. Likewise, if the scrap is kept segregated and comprises only of one alloy composition it is easier to remelt to a superior quality product conforming to industry standards. Opportunities PHARMACEUTICAL FORMULATIONS The per capita consumption of drugs in India, stands at US$3, is amongst the lowest in the world, as compared to Japan- US$412, Germany- US$222 and USA- US$191. Apparently, this huge gap indicates the underlying opportunities. Majority of the growth of your company will be driven by expansion in volumes and new product introductions as against prices increases. While patent expires are expected to peak out in 2012, we betieve that the growth momentum would sustain from the launch of niche, limited competition products. METAL RECYCLING The recycling of copper is primarily market driven across the world and this will continue to be the case for the foreseeable future, with the recycling sector consistently gaining strength. This strength, however, is typically a reflection of consistently increasing consumption of metals and production of waste. As long as this is the case, the prices of scrap will remain high and the recycling rates should see at least a marginal improvement every year. Threats PHARMACEUTICAL FORMULATIONS The competitive pressure in the domestic formulations market has been rising steadily for some time now. While on one hand, this has been prompted by significant increase in investments by domestic players in marketing efforts through expansion in field force, on the other, MNC have also renewed their focus on India. Some of the smaller players have also contributed to the competitive intensity by offering huge discounts/incentives to the distribution network. Potential regulatory interventions could hurt pricing. METAL RECYCLING Challenges faced by the trade with regard to the pre-shipment procedures and problems of the trade in relation to various shipping related matters, including monopolistics attitude of shipping lines. SEGMENT WISE REPORTING: PHARMACEUTICAL FORMULATIONS Profit: The profit before tax and interest but after writing off bad debts of Rs 16.91 lacs amounted to Rs 51.91 lacs and profit before tax was Rs 8.21 lacs. Employees Cost: The Employees cost was Rs 515.86 lacs in comparison to 428.50 Lacs in the previous Year. The increase in employees cost is due to normal increments/promotions. METAL RECYCLING Profit: The profit before tax of the division amounted to 8.86 Lacs. RISK & CONCERNS The Company has adopted risk management approach with an objective to balance risk & cost. The policy lays down a detailed structure for risk management & control in the company. There are few risk factors that are relevant to the business of your Company. The Company operates in a highly regulated industry & must comply with a broad range of dynamic regulatory controls, particularly in the regulated markets. INTERNAL CONTROL SYSTEM The Internal Control System of the Company is adequate. The Company has set up detailed systems & procedure in all-important areas which act as guideline to its employees. The recommendations of the auditors on the efficacy of the internal control are implemented. Audit committee constituted by the Board of Directors continuously reviews the reports of the internal audit team. The shortcomings observed in the system are regularly monitored for corrections as well as prevention. CAUTIONARY STATEMENT Statement in the Management Discussion & Analysis Report describing the Company's objective, expectations or predictions may be forward looking within the meaning of applicable Securities Laws & Regulations. Actual performance may differ from those expressed or implied depending upon the economic conditions, the Government Policies & the other incidental/related factors.