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Supriya Pharmaceuticals Ltd.

BSE: 524784 Sector: Health care
NSE: N.A. ISIN Code: INE647C01016
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Supriya Pharmaceuticals Ltd. (SUPRIYAPHARMA) - Director Report

Company director report

SUPRIYA PHARMACEUTICALS LIMITED ANNUAL REPORT 2002-2003 DIRECTOR'S REPORT The Members of Supriya Pharmaceuticals Limited Your Directors have pleasure in presenting the Seventeenth Annual Report and the Audited Statement of Accounts for the year ended 30th September, 2003. OPERATIONS (Rs./Lacs) Financial Results Year ended Year ended 30.09.2003 30.09.2002 Sales & Other Income 827.43 1576.65 Operating Profit 157.27 275.66 Financial Charges 27.46 18.96 Gross Profit 129.81 256.70 Depreciation & Non Cash write off 41.45 39.75 Profit (Loss) Before Tax 88.36 216.95 Your company has achieved a turnover of Rs. 827.43 Lacs, for the year ended on 30.09.2003 in comparison to Rs. 1576.65 Lacs achieved during the previous financial year representing a decrease of 47.50%. The company has posted cash profit of Rs. 129.81 Lacs, for the year ended on 30.09.2003 as compared to a cash profit of Rs. 256.70 Lacs during the previous year. The operating margins have improved, the turnover has declined due to the time devoted to changes carried out in the plants including putting up of new recovery systems. The positive results Of these changes shall be visible in the future years. The management is confident of overall improvement in the operations of the company. DIVIDEND Your Directors do not recommended any dividend for the year ended 30th September, 2003. FIXED DEPOSITS The Company has not accepted any fixed deposits during the year. LISTING The equity shares of your Company are listed on the Stock Exchanges at Mumbai, Delhi, Ahmedabad and Jaipur, PERSONNEL The results that the company has achieved during the year would not have been possible without the co-operation & support of our employees. The directors express their appreciation for the contribution made by the employers to the operations of the company during the year. There is no employee in the company whose particulars are required to be given under section 217 (2A) of the companies Act, 1956. DIRECTORS Mr. Dharam Singh retires by rotation from the Board and being eligible, offer himself for reappointment. The term of Mr. Sunil Gandhi, Mr. Gagnish Arora, Mr. C. R Madoukumar & Mr. S. N. Shukla all being additional directors, shall expire at this coming Annual General Meeting and being eligible, all of them offer themselves for reappointment. Brief resume of the above directors and the membership/chairmanship of committees of the Board, as stipulated under clause 49 of the Listing Agreement with the Stock exchanges, are given in the section on Corporate Governance elsewhere in the Annual Report. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT Management discussions and Analysis Report as required under the listing agreement With the Stock, exchanges enclosed and forms part of the Directors Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement it is hereby confirmed that. (i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. (ii) the Director had selected such accounting policies and applied them consistently and made judgement & estimates that are reasonable & prudent so as to give a true & fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the period. (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and fro preventing and detecting fraud and other irregularities ; and (iv) the Directors have prepared the annual accounts of the Company on a going concern basis. AUDITORS M/s. Doogar & Associates, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming AGM and are eligible for re-appointment. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to energy conservation, technology absorption. foreign exchange earnings and outgo required to to disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms part of this report. CORPORATE GOVERNANCE The Corporate Governance report and the certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Directors Report. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation for the assistance are co-operation received from the Financial Institutions, Banks, Government Authorities. Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the services of the Executives, Staff and workers of the Company. For and on behalf of the Board of Directors Sd/- Place: New Delhi VIJAY JULKA Date: 11.11.2003 Managing Director Information as per Sec 217(1)(e) read with Companies (Disclosure of particulars In the report of Board of Directors) Rules, 1988 and forming part of the Directors Report of the year ended 30th September 2003. A. CONSERVATION OF ENERGY a) Energy conservation measures taken i. Efforts have been made to create awareness among the user members for the judicious use of energy and for its conservation. ii. The maintenance and operating staff members are being imparted regular training for maintenance of the energy consuming devices in appropriate manner with an objective to conserve energy in operations on regular basis. iii. The energy consuming equipment are monitored regularly and are subjected to preventive repairs, etc. to conserve energy. b) Additional Investment & proposals if any, being Implemented for reduction of consumption of energy No separate investment is proposed as yet, however, the expenses on training of staff are being considered as part of the operational expenditure. The segregation of expenses on this account has not been done. c) Impact of the measures as (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. Not quantified. d) Power & Fuel Consumption: As at As at 30.09.2003 30.09.2002 1. ELECTRICITY (i) Purchased Units 1278948 1395137 Total Amount (in Rs.) 5685989 6547822 Rate/Unit 4.45 4.69 (ii) Own Generation through DG set Units 146411 105250 Unit Per liter of Diesel oil 4.10 4.21 - Cost/Unit 4.75 4.83 2. FURNACE OIL Quantity (K. Ltrs) 237 196 Total Amount (in Rs.) 3968268 2612454 Average Rate/ Ltrs 16.74 13.33 3. OTHERS (i) Consumption per unit of Production Electricity (Unit/M.T) 4189 3744 Furnace oil (Ltrs/M.T) 681 489 B. TECHNOLOGY ABSORPTION 1. RESEARCH & DEVELOPMENT (i) Specify area in which R & D carried out by the Company : The R & D efforts of the company is directed towards in the following areas: a). Quality assurance & improvement of existing products. b). Improvement in existing Production: processes & design and productivity (ii) Benefits derived as a result of the above R & D Improvement in yields & and production, losses, improved solvent recoveries (iii) Future plan of Action The R & D efforts are being directed for cost reduction, process optimization and upgrading of existing technologies. (iv) Expenditure on R&D a. Capital Nil b. Recurring Nil c. Total Nil 2. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION The technologies developed as a result of R & D efforts were properly absorbed, which has resulted in product improvement and better yields. C. FOREIGN EXCHANGE EARNING & OUTGO (Rs./Lacs) 30.09.2003 30.09.2002 a) Total Foreign exchange earning NIL NIL b) Total Foreign exchange outgo NIL 1.12 MANAGEMENT DISCUSSION AND ANALYSIS Overview 1. Supriya Pharmaceuticals Limited (Supriya) values its contribution to b its customers and medical profession. The company has therefore planned its strategic growth, keeping in view the expectations of its customers and medical profession. Supriya has state of the art manufacturing facilities, which are regularly upgraded from time to time with changes in technologies and general practice. Semi Synthetic Penicillins (SSPs) contribute a major part of company's business. Supriya takes care to remain a quality conscious and cost efficient producer. Industry Developments Pharma industry in India is witnessing a metamorphosis phase. The industry is gearing up for WTO requirements and changes in the patent regimes. It will be easier for well-organized players to take a share of the market. The unorganized players are likely to face difficult times ahead. Those who are committed to stringent quality norms, adapting changes within the industry including technological advancement, changing regulatory environment, etc. stand better chances to grow. Risks & Concerns Supriya has identified those threats that face the industry, and has already initiated step face for delisting its business. Developing new production processes & designs, strengthening existing infrastructure to increase productivity and reduce operational costs are part of this endeavor to overcome risks, gain advantage in the changing market place. Fresh investments in upgrading facilities have been considered. Quality And Cost Management Supriya is a cost effective quality producer. The company has aims to achieve further cost reduction with improvement in its existing infrastructure. Quality control and quality assurance systems are being further strengthened. The company has a wealth of trained team to enforce the systems. The awareness levels in quality control and production departments are high and are regularly upgraded through suitable methods of personnel training. Financial Management & Internal Controls The company has a disciplined approach to cost and follows prudential norms in every sphere of its activities The profit making is put at the center of decision making. The costs are budgeted, reviewed and and monitored at regular intervals. Human Resources A knowledge company is built on the strength of its people. The management of the company has been continuously adding skilled and experiences professionals from time to time. Your company recognises the need for formal human resource planning and strategy, and has initiated stops to create systems mid procedures the will further enhance the work environment. The company values the resources and will endeavor to make them better. Outlook Supriya will face challenges both anticipated and unanticipated. We are poised to meet the challenges. The employees and customers remain happy, the balance sheet has improved. The company has proved its ability to deliver the best quality products constantly and regularly and has resources including technologies to excel. The company has a strong foundation for growth. The set of changes being carried out will transform the future of the company into a better and larger player in the pharma industry, and create wealth of its shareholders. The shareholders can look forward to a better future.