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Indoco Remedies Ltd.

BSE: 532612 Sector: Health care
BSE 00:00 | 02 Dec 397.25 16.70






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OPEN 380.55
VOLUME 27757
52-Week high 529.70
52-Week low 251.90
P/E 27.90
Mkt Cap.(Rs cr) 3,661
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 380.55
CLOSE 380.55
VOLUME 27757
52-Week high 529.70
52-Week low 251.90
P/E 27.90
Mkt Cap.(Rs cr) 3,661
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indoco Remedies Ltd. (INDOCO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Seventy Third Annual Report on the businessoperations together with the Audited Financial Statements for the Financial Year endedMarch 31 2020 and on the state of affairs of the Company.

Financial Performance:

The highlights of the performance of the Company for the year ended March 31 2020 issummarized below:

(Rs crores)

Particulars Financial Year ended March 31 2020 Financial Year ended March 31 2019
Revenue from Operations (Gross) 1106.00 967.74
Add: Other Income 2.43 6.15
Total Income 1108.43 973.89
Profit Before Finance Cost Depreciation Amortization Impairment Expenses & Tax 125.77 82.86
Less: Finance Cost 26.25 20.54
Less: Depreciation Amortization & Impairment Expenses 70.81 71.56
Profit / (Loss) Before Tax 28.71 (9.24)
Less: Provision for Taxation
- Current 3.86 -
- Deferred 4.46 (7.19)
- Mat Credit Adjustments (3.86) 0.79
Net Profit /(Loss) After Tax 24.25 (2.84)
Add: Other Comprehensive Income (1.84) (0.53)
Total Comprehensive Income 22.41 (3.37)
Balance brought forward 320.27 334.74
Amount available for appropriation 342.68 331.37
- Dividend Paid 2.76 9.21
- Dividend Tax 0.57 1.89
- Balance carried forward 339.35 320.27

Results from Operations:

In March 2020 with COVID-19 being declared a pandemic your Company adopted measuresto curb the spread of infection in order to protect the health of its employees and ensurebusiness continuity with minimal disruption. The spread of Covid-19 resulted in thecountry going into a sudden lockdown from March 25 2020 which bought the country to acomplete halt. Being in the Pharma sector except for the initial few days of thelockdown all the Plants of your Company were operational after taking all the requiredprecautions. Your Company has stood upto its commitments of serving the public at largeand with a team of dedicated staff has kept all the factories operational for themanufacture of medicines.

Your Company is part of the great initiative by the Indian government to exportParacetamol tablets to the UK in its fight against Covid-19 and had been grantedpermission to air ship 4.48 crore Paracetamol Tablets to the UK. The first shipment of11.70 lakh Paracetamol tablets to the UK was airlifted on April 12 2020 by a Charteredflight from the Goa airport. The Board also sincerely appreciates the efforts of theCompany's Field Staff as well as the Company's C&F Agents who in these trying timesensured that the Company's products were made available to the Stockists and MedicalStores. Your Company is assessing the impact of the Covid-19 pandemic and expects it to beshort term in nature. Your Company does not see any medium to long term risks in itsability to continue as a going concern and meeting its liabilities as and when they falldue.

The sudden declaration of the lockdown marginally affected the March revenue. The Totalrevenue of the Company amounted to Rs 1108.43 crores as compared to Rs 973.89 crores inthe previous year. The Profit Before Tax was Rs 28.71 crores as against a loss of Rs 9.24crores in the previous year. After providing for Tax/Deferred Tax the Net Profitamounted to Rs 24.25 crores as against a Net Loss of Rs 2.84 crores in the previousyear.

During the Year the company received:

- In November 2019 Establishment Inspection Report (EIR) from the US Food and DrugAdministration (USFDA) for its sterile facility (Plant II) and solid dosages facility(Plant III) at Verna Goa.

- In November 2019 Establishment Inspection Report (EIR) for its Clinical ResearchOrganization AnaCipher located at Hyderabad.

- In December 2019 received EU GMP certification from UK MHRA for its sterilemanufacturing facility (Plant II) at Verna Goa.

- In December 2019 received final approval of its ANDA for Febuxostat Tablets 40 mgand 80 mg which is therapeutically equivalent to the Reference Listed Drug (RLD) viz.Uloric Tablets 40 mg and 80 mg of Takeda Pharmaceuticals U.S.A. Inc.

- In December 2019 received tentative approval of its ANDA for Alogliptin Tablets6.25 mg 12.5 mg and 25 mg which is a generic version of Takeda's brand"Nesina" for treatment of Diabetes.

Your company sees a lot of potential in the export market post Covid-19 with a surgein demand for Indian made pharmaceutical medicines. However increase in input costs dueto shortage of Raw Material could affect the Margins.

A detailed discussion on the business performance and future outlook is included inManagement Discussion & Analysis which forms part of the Directors' Report.


In order to conserve resources the Board has found it prudent to recommend a Dividendof 15% (' 0.30/- per share) i.e. Rs 2.76 crores for the year 2019-2020. Dividend for theFY 2018-2019 was 15% (' 0.30/- per share) i.e. Rs 2.76 crores.

The Company has made no transfer to reserves during FY 2019-2020.

Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureA".

Share Capital:

The paid-up Equity Share Capital as on March 31 2020 is Rs 184300710. During theyear under review the Company has not issued shares on rights basis or Equity Shares withdifferential voting rights or granted stock options or sweat equity or bonus shares.

As on March 31 2020 none of the Directors of the Company held shares of the Companyexcept:

Mr. Suresh G Kare - Chairman

Ms. Aditi Panandikar - Managing Director

Mr. Sundeep V Bambolkar - Jt. Managing Director

Material changes and commitment - if any affecting financial position of the Companyfrom the end of the financial year till the date of this Report:

There has been no material change and commitment affecting the financial performanceof the Company which occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.


Cash and cash equivalent as at March 31 2020 was Rs 23.48 crores. The Companycontinues to focus on judicious management of its Working Capital. ReceivablesInventories and other working capital parameters were kept under strict check throughcontinuous monitoring.


The Company has not accepted any Deposit covered under Section 73 of the Companies Act2013 and The Companies (Acceptance of Deposit) Rules 2014 during the year under review.Hence the requirement for furnishing of details relating to deposits covered underChapter V of the Act or the details of deposits which are not in compliance with theChapter V of the Act is not applicable.

Particulars of Loans Guarantees and Investments:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Credit Rating:

ICRA has rated the Company's long term borrowings rating to A and reaffirmed the shortterm borrowing rating as A2+.

Corporate Social Responsibility (CSR):

In accordance with the provisions of Section 135 of the Act and Rules framed thereunder the Company has a Corporate Social Responsibility ("CSR") Committee ofDirectors comprising of Ms. Aditi Panandikar (Chairperson) Dr. Anil M Naik (Member) andMr. Sundeep V Bambolkar (Member).

As required under Section 135 of the Companies Act 2013 during the year the Companyundertook CSR initiatives which is mainly focused on promoting education health andpublic hygiene. In this connection the Company during the year under consideration spentan amount of Rs 92.91 lakhs as against an amount of Rs 87 lakhs required to be spent. Adetailed list of the CSR expenditure made is annexed herewith as "Annexure B".

In addition to fulfilling its CSR obligations the Company during the year madesubstantial donations of free medicines to charitable institutions for distribution amongthe needy.

Internal Control Systems and their Adequacy:

The Company has an Internal Control System commensurate with the size of itsoperations. The Internal Audit Department monitors and evaluates the efficacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.

The Company's Internal Auditor also monitors and evaluates the internal control systemand submits Quarterly Reports which are placed before the Audit Committee of the Board.

The Risk Management Policy of the Company is available on the Company Website at:

Vigil Mechanism / Whistle Blower Policy:

The Company has a Whistle Blower Policy to deal with instance of fraud andmismanagement if any. The details of the Policy are explained in the Corporate GovernanceReport and also posted on the website of the Company

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.

During the financial year 2019-2020 the Company received NIL complaints on sexualharassment. Subsidiaries:

As on March 31 2020 the Company had Two subsidiaries:

- Xtend Industrial Designers and Engineers Pvt. Ltd. (XIDEL)

- Indoco Remedies Czech sro

A statement containing salient features of the financial statements of subsidiaries inprescribed Form AOC-1 as required under Section 129(3) of the Companies Act 2013("Act") is furnished in "Annexure C" to this report.

Further pursuant to Section 136 of the Act the financial statements of the Companyconsolidated financial statements along with relevant documents and separate auditedaccounts in respect of subsidiaries are available on the website of the Company Any person desirous of obtaining the said Financial Statements may writeat There have been no material changes in the nature of thebusiness of the subsidiaries during the financial year 2019-2020.

The Company did not have any joint venture or associate companies during the year.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with IndianAS notified under Section 133 of the Companies Act 2013 read with Companies (IndianAccounting Standards) Rules 2015 forms part of this Annual Report.


The Company by way of a Circular Resolution appointed wef March 27 2020 Dr (Ms.)Vasudha V Kamat (DIN 07500096) as an Additional Independent Director of the Company. Dr(Ms.) Vasudha V Kamat has a Bachelor's degree in Science (Chemistry) Master's degree inArts (Sociology) Bachelor's and Master's degree in Education and a Doctoral degree inPhilosophy (Arts). She has a varied experience in the education sector. In the past shehas held the post of Joint Director at the Central Institute of Educational Technology aconstituent unit of National Council of Educational Research and Training and Vice -Chancellor of S.N.D.T Women's University.

The Board considers that the appointment of Dr. (Ms) Vasudha V Kamat would be ofimmense benefit to the Company.

Dr. (Ms) Vasudha V Kamat holds office up to the date of the ensuing Annual GeneralMeeting. The Company has received requisite notice in writing from a member proposing Dr.(Ms) Vasudha V Kamat for appointment as an Independent Director to hold office for a termupto Five consecutive years from the date of the Annual General Meeting.

In terms of provisions of the Section 152(6) of the Companies Act 2013 Ms. AditiPanandikar retires by rotation at the forthcoming Annual General Meeting and beingeligible offers herself for re-appointment. The profile of Director seeking reappointmentpursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is included in the Annual Report.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Board Meetings:

During the financial year 2019-2020 Four (4) Board Meetings were held and the gapbetween two Board Meetings did not exceed 120 days. The details of the attendance ofDirectors at the Board Meetings are mentioned in the report on Corporate Governanceannexed hereto.

Annual evaluation of Board its Committees and individual Directors

Pursuant to the provisions of the Companies Act 2013 and Regulation 19 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Committee CSR Committee Nomination& Remuneration Committee and Stakeholder Relationship Committee. The manner in whichthe evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel (KMP)and their remuneration. The Remuneration Policy is stated in the Corporate GovernanceReport.

1. The Board Affirms that the remuneration paid is as per the Remuneration Policy ofthe Company.

2. The percentage increase in the median remuneration of employees in the financialyear: 8%.

3. Average percentage increase in salaries of non-managerial employees was 6.90% ascompared to average percentage increase in managerial remuneration which was 8.12%.

4. Number of Permanent employees on the rolls of the Company as on March 312020: 5860Nos.

5. The Ratio of the remuneration paid to each Director to the median remuneration ofthe employees of the Company during the year under consideration:

Name of Director Remuneration Paid ( Rs) Median Remuneration ( Rs) Ratio
Mr. Suresh G Kare (Executive Chairman) 22395600 277218 1:81
Ms. Aditi Panandikar (Managing Director) 20083189 277218 1:72
Mr. Sundeep V Bambolkar (Jt. Managing Director) 18283810 277218 1:66
Dr. Anil M Naik (Independent Director) 440000 277218 1:1.59
Mr. Sharad P Upasani (Independent Director) 400000 277218 1:1.44
Mr. Rajiv P Kakodkar (Independent Director) 400000 277218 1:1.44
Mr. D M Gavaskar (Independent Director) 340000 277218 1:1.23
Dr. Anand M Nadkarni (Non Executive Director) 160000 277218 1:0.58

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) read with Section 134(5) of the Companies Act 2013.

i. that in the preparation of annual accounts the applicable accounting standards havebeen followed and no material departures have been made from the same;

ii. that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period;

iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. that the annual accounts have been prepared on a 'going concern' basis;

v. that the Company has laid down internal financial controls and such internalfinancial controls are adequate and operating effectively;

vi. that proper systems have been devised to ensure compliance with the provisions ofall applicable laws and such systems are adequate and operating effectively;

Particulars of contracts or arrangements with Related Party Transactions

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors orKey Managerial Personnel which may have a potential conflict with the interest of theCompany at large.

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior approval of the Audit Committee is obtained on a yearly basisspecifying the upper ceiling as to amount for the transactions which are of a foreseen andrepetitive nature. The transactions entered into pursuant to the prior approval so grantedare audited and a statement giving details of all related party transactions is placedbefore the Audit Committee and the Board of Directors for their approval on a quarterlybasis.

The particulars as required under the Companies Act 2013 is furnished in"Annexure D" to this report. Significant and Material Orders passed by theRegulators or Courts

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

Material changes and commitments if any affecting the financial position haveoccurred between the end of the financial year of the Company and date of this report.

No material changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and date of thisreport.

Compliance with Secretarial Standards

During FY 2019-2020 the Company has complied with applicable standards issued by theInstitute of the Company Secretaries of India.

Statutory Auditors:

In terms of provisions of Section 139(1) of the Companies Act 2013 M/s. Gokhale &Sathe a Firm of Chartered Accountants bearing Firm Registration No. 103264W have beenappointed as the Statutory Auditors of the Company at the 70th Annual General Meeting ofthe members of the Company held on August 9 2017 to hold office for a period of 5 yearstill the conclusion of the 75th AGM of the Company.

In terms of the Companies (Amendment) Act 2017 and vide notification no S.O. 1833(E)dt. 7.5.2018 the Ministry of Corporate Affairs have done away with the requirement ofratification of the appointment of auditors at each subsequent Annual General meeting bydeleting the 1st Proviso to the sub-section (1) of Section 139 of the Companies Act 2013.Accordingly the same is not required to be put up to the members for ratification.

M/S Gokhale & Sathe have confirmed that they continue to be eligible under Section141 of the Companies Act 2013 and the Rules framed thereunder for continuing as Auditorsof the Company.

The Auditors' Report issued by M/s. Gokhale & Sathe the Statutory Auditory forthe FY 2019-2020 does not contain any qualification reservation adverse remark ordisclaimer.

Details in respect of frauds reported by auditors pursuant to section 143(12) of theCompanies Act 2013:

There have been no instances of fraud reported by above-mentioned Auditors underSection 143(12) of the Act and Rules framed thereunder either to the Company or to theCentral Government during FY 2019-2020.

Cost Auditors:

As per requirements of Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 the Company is required to maintain cost records andaccordingly such accounts are made and records have been maintained in respect of theapplicable products for the year ended March 31 2020.

The Company has appointed M/s Sevekari Khare & Associates (Firm Registration No.000084) to get the audit of the cost records done for FY 2019-2020. They would be requiredto submit the reports by September 29 2020.

As required under the Companies Act 2013 the remuneration payable to the Cost Auditoris required to be placed before the Members in a general meeting for their ratification.Accordingly a Resolution seeking Member's ratification for the remuneration payable toM/s Sevekari Khare & Associates Cost Auditors for FY 2020-2021 is included at ItemNo. 5 of the Notice convening the Annual General Meeting.

Secretarial Audit

The Secretarial Audit was carried out by M/s A. Y Sathe & Co. Company Secretariesin Practice (Registration No.: FCS 2899/COP 738) for the financial year 2019-2020. TheReport given by the Secretarial Auditors is annexed as "Annexure E" and formsintegral part of this Report. There has been no qualification reservation or adverseremark or disclaimer in their Report. During the year under review the SecretarialAuditors had not reported any matter under Section 143 (12) of the Act therefore nodetail is required to be disclosed under Section 134 (3) (ca) of the Act.

In terms of Section 204 of the Companies Act 2013 the Board of Directors hasappointed CS Ajit Sathe - Proprietor of M/s A. Y Sathe & Co. Company Secretaries inPractice (Registration No.: FCS 2899/COP 738) to undertake the Secretarial Audit of theCompany for the Year 2020-2021.

Corporate Governance

The Company complies with the Securities and Exchange Board of India (SEBI)'sguidelines on Corporate Governance. The Company has documented its internal policies onCorporate Governance. Several aspects of the Act such as the Whistleblower Policy andCode of Conduct and Ethics have been incorporated into the Company's policies. TheCorporate Governance Report for fiscal 2019-2020 forms part of this Annual Report. TheReport is duly certified by the Statutory Auditors of the Company whose certificate isalso annexed.

Extract of the Annual Return:

The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is annexed as Annexure-F and forms anintegral part of this Report.

Particulars of Employees:

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is provided in the Corporate Governance Report.

Employees Relations

The employees' relation at all levels and at all units continued to be cordial duringthe year.

Business Responsibility Report

As mandated by the Securities and Exchange Board of India (SEBI) the BusinessResponsibility Report of the Company for the year ended March 31 2020 is annexed as"Annexure G" and forms integral part of this Report.


Your Company has been able to operate efficiently through continuous improvement in allfunctions and areas by efficiently utilizing the Company's resources. The Directors wishhereby to place on record their appreciation of the services rendered by each and everyemployee without whose whole-hearted efforts the overall satisfactory performance wouldnot have been possible. The Directors also wish to place on record their word of sincereappreciation to the bankers & financial institutions the investors the vendors thecustomers the medical profession and all other business associates for their continuedsupport. Your Directors look forward to the long term future with confidence.

Cautionary Statement

Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectations mayconstitute 'forward looking statements' within the meaning of applicable laws andregulations. Actual results might differ materially from those either expressed or impliedin the statement depending on the circumstances.

For and on behalf of the Board of Directors
Place : Mumbai Chairman
Date : June 24 2020 DIN:00179220