MIRA
INFORM REPORT
|
Report Date : |
28.07.2008 |
IDENTIFICATION
DETAILS
|
Name : |
FDC LIMITED |
|
|
|
|
Registered Office : |
B-8, MIDC
Industrial Estate, Waluj, Aurangabad – 431 136, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
23.09.1940 |
|
|
|
|
Com. Reg. No.: |
3176 |
|
|
|
|
CIN No.: [Company
Identification No.] |
U24239MH1940PLC003176 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMF03524D |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACF0253H |
|
|
|
|
Legal Form : |
It is a public
limited liability company. The
company’s shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturers of pharmaceutical formulations
and bulk drugs. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
Maximum Credit Limit : |
USD 17000000 |
|
|
|
|
Status : |
Very Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well
established company having fine track. Available information indicates high
financial responding of the company. Financial position of the company is good.
Payments are correct and as per commitments. The company is doing very well. It can be
considered good for any normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
B-8, MIDC Industrial
Estate, Waluj, Aurangabad – 431 136, Maharashtra, India |
|
Tel. No.: |
91-240-2554407/2554967/2554299 |
|
Fax No.: |
91-240-2554299 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate
Office : |
142-48, Swami Vivekanand
Road, Jogeshwari (West), Mumbai – 400 102, Maharashtra, India |
|
Tel. No.: |
91-22-26782542 /26780652 /26782653 /26782656 /26785176 /26787568
/26794379 |
|
Fax No.: |
91-22-26786393
/26781912 /26788123 /26786194 |
|
|
|
|
Plant
Locations : |
·
142 / 48,
S.V. Road, Jogeshwari (West), Mumbai - 400 102, Maharashtra, India Tel No.:
91-22-26780652 / 26782653 / 26782656 / 26782542 / 26787568 / 26794379 Fax No.: 91-22-26786393/26781912/26788123/26786194
Tel No.: 91-240-2554407 / 2554299 / 2554967 Fax No.: 91-240-2554299 E-Mail: waluj@fdcl.com
Tel No.: 91-2194-263580 / 263692 / 263653/63264 Fax No.: 91-2194-263264 E Mail: roha@fdcl.com
Tel No.: 95-2551-230389 / 230674 Fax No.: 95-2551-230674 E Mail: sinnar@fdcl.com
Tel No.: 91-832-2783882 / 2783883 Fax No.: 91-832-2783884 E Mail : goa@fdcl.com
|
|
|
|
|
Branches : |
Located at :
Tel No.: 91-20-6989487 Fax Nos.:91-20-6989196
Tel. No. : 91-11-26372388/89/90/91 Fax No. : 91-11-26372391
Tel No.: 91-522-24333692432199 Fax No.: 91-522-2433369 E Mail: lucknow@fdcl.com
Tel No.: 91-120-2700993/2700309 Fax No.: 91-120-2700993 Email : ghaziabad@fdcindia.com
Tel No.: 91-44-26243825 / 26522807/ 26522808 Fax No.: 91-44-26253667 E Mail: chennai@fdcindia.com
Tel. No. : 91-33-22849053/22847598/22849752 Fax. No. : 91-33-22849752 Email : kolkatta@fdcindia.com
Tel No.: 91-40-27638904 / 27638467 / 27639830 / 27637149 Fax No.: 91-40-27613394 E Mail: hyderabad@fdcl.com
Tel No.: 91-731-2802713 / 2802515 Fax No.: 91-731-2802743 E Mail: indore@fdcl.com
Tel No.: 91-141-2214461 / 2214542 Fax No.: 91-141-2214461 E Mail: jaipur@fdcindia.com
Tel. No.: 91-80-28364777/28364888/28364999 Fax. No.: 91-80-28364999 Email: bangalore@fdcindia.com
|
|
|
|
|
Regional
Offices : |
Located at
Ahmedabad, Bangalore, Patna, Pune and Varanasi. |
|
|
|
|
International
Office |
10, The Tanneries, East Street, Titchfield, Fareham, Hampshire, PO14
4AR, United Kingdom, Tel No. : +44-1329-841560 Fax No.: +44-1329 841546
69, Wessel Road, Bantley Office Park, Building No. 2, Rivonia,
Sandton, Johannesburg, Republic of South Africa Tel No. : + 27-011-8072376 |
DIRECTORS
|
Name : |
Late Mr. Anand L.
Chandavarkar (1905-1959) |
|
Designation : |
Founder |
|
|
|
|
Name : |
Late Mr. Ramdas
A. Chandavarkar (1933-2001) |
|
Designation : |
Chairman Emeritus |
|
|
|
|
Name : |
Mr. Mohan A.
Chandavarkar |
|
Designation : |
Chairman and
Managing Director |
|
|
|
|
Name : |
Mr. Ashok A.
Chandavarkar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Nandan M.
Chandavarkar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ameya A.
Chandavarkar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Girish C.
Sharedalal |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Satish S.
Ugrankar |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Rahim H.
Muljiani |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Nagam H.
Atthreya |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Ravindra Y.
Chittal |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Ms. Shalini
Kamath |
|
Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
AS ON 31.06.2008
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
Shareholding of Promoter and
Promoter Group2 |
|
|
|
Indian |
|
|
|
Individuals/ Hindu Undivided
Family |
72714656 |
37.98 |
|
Bodies Corporate |
49790000 |
26.00 |
|
Sub
Total(A)(1) |
122504656 |
63.98 |
|
Public shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds |
8659611 |
4.52 |
|
Financial Institutions / Banks |
33422 |
0.02 |
|
Venture Capital Funds |
1010 |
0.00 |
|
Insurance Companies |
1897000 |
0.99 |
|
Foreign Institutional
Investors |
2512496 |
1.31 |
|
Sub-Total
(B)(1) |
13103539 |
6.84 |
|
Non-institutions |
|
|
|
Bodies Corporate |
9628389 |
5.03 |
|
Individuals |
|
|
|
Individuals |
32136789 |
16.79 |
|
ii. Individual shareholders
holding nominal share capital in excess of Rs. 0.100 Million |
12580374 |
6.57 |
|
Any Other (Clearing Members) |
338956 |
0.18 |
|
(NRI) |
1168399 |
0.61 |
|
Sub-Total
(B)(2) |
55852907 |
29.18 |
|
Total Public Shareholding (B)=
(B)(1)+(B)(2) |
68956446 |
36.02 |
|
TOTAL
(A)+(B) |
191461102 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of pharmaceutical formulations
and bulk drugs. |
||||||||
|
|
|
||||||||
|
Products : |
|
PRODUCTION STATUS (31.03.2007)
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
Formulations
|
|
|
|
|
Injectables/Ophthamics |
Litres |
192,000.00 |
214666.56 |
|
Tablets, Capsules
etc |
Nos. in Millions |
3609.600 |
1100.700 |
|
Cream, Powder,
Ointmnets, Granules, Liquids, etc |
Kgs/Litres |
8407920.00 |
2135817.76 |
|
|
|
|
|
|
Food
Products |
|
|
|
|
Powder, Liquids, etc |
Kgs/Litres |
500,000.00 |
706120.60 |
|
Capsules |
Nos. in Millions |
-- |
-- |
|
Basic
Drugs |
Kgs |
118465.00 |
64857.34 |
GENERAL
INFORMATION
|
No. of Employees : |
2400 |
||||||
|
|
|
||||||
|
Bankers : |
·
Corporation Bank, Aurangabad,
Maharashtra, India ·
HDFC Bank Limited,
Aurangabad, Maharashtra, India ·
State Bank of India,
Aurangabad, Maharashtra, India |
||||||
|
|
|
||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
Satisfactory |
|
|
|
|
Auditors : |
RSM & Company Chartered
Accountants Mumbai, Maharashtra |
|
|
|
|
Branch Auditors : |
·
·
Ford, Rhodes, Parks &
Company Chartered Accountants Mumbai, Maharashtra,
India ·
·
Khanna, Thaker & Company Chartered Accountants Lucknow, Uttar Pradesh, India ·
·
B. Khosla & Company Chartered Accountants Jaipur, Rajasthan, India ·
·
D. J. Dave & Company Chartered Accountants Indore, Madhya Pradesh, India |
|
|
|
|
Joint Venture : |
Fair Deal Corporation
Pharmaceutical SA [Pty] Limited [up to 11th December, 2006] |
|
|
|
|
Associates/Subsidiaries : |
·
FDC
Holdings, Netherlands B.V. ·
FDC
International Limited ·
FDC Inc. ·
Fair Deal Corporation
Pharmaceutical SA [Pty] Limited [from 12th December, 2006] |
CAPITAL STRUCTURE
AS ON 31.03.2007
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
250,000,000 |
Equity Shares |
Re. 1/- each |
Rs. 250.000 millions |
Issued and
Subscribed Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
194,461,102 |
Equity Shares |
Re. 1/- each |
Rs. 194.606 millions |
Paid-up
Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
191,461,102 |
Equity Shares |
Re. 1/- each |
Rs. 191.461 millions |
|
|
Add: 3,145,000
Equity Shares Forfeited |
|
Rs. 0.786 million |
|
|
TOTAL |
|
Rs. 192.247 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
192.247 |
192.247 |
192.247 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
3128.580 |
2709.739 |
2190.906 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3320.827 |
2901.986 |
2383.153 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
|
|
2] Unsecured Loans |
31.086 |
31.774 |
32.625 |
|
|
TOTAL BORROWING |
31.086 |
31.774 |
32.625 |
|
|
DEFERRED TAX LIABILITIES |
130.196 |
96.178 |
94.955 |
|
|
DEFERRED GOVERNMENT GRANTS |
0.000 |
1.500 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
3482.109 |
3031.438 |
2510.733 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1964.671 |
1477.151 |
1086.963 |
|
|
|
|
|
|
|
|
INVESTMENT |
507.750 |
683.718 |
630.902 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
976.387
|
708.227
|
569.798 |
|
|
Sundry Debtors |
212.238
|
198.777
|
470.331 |
|
|
Cash & Bank Balances |
202.133
|
198.292
|
116.703 |
|
|
Other Current Assets |
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances |
233.958
|
292.910
|
235.394 |
|
Total Current Assets |
1624.716
|
1398.206
|
1392.226 |
|
|
Less
: CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
594.399
|
464.579
|
619.831 |
|
|
Provisions |
20.814
|
77.759
|
8.742 |
|
Total Current Liabilities |
615.213
|
542.338
|
628.573 |
|
|
Net Current Assets |
1009.503
|
855.868
|
763.653 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.185 |
14.701 |
29.215 |
|
|
|
|
|
|
|
|
TOTAL |
3482.109 |
3031.438 |
2510.733 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
4237.590 |
3396.560 |
3446.063 |
|
|
Other Income |
136.374 |
269.813 |
-- |
|
|
Total Income |
4373.964 |
3666.373 |
3446.063 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
813.177 |
842.279 |
698.416 |
|
|
Provision for Taxation |
169.836 |
147.917 |
153.068 |
|
|
Profit/(Loss) After Tax |
643.341 |
694.362 |
545.348 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
NA |
419.289 |
800.674 |
|
|
|
|
|
|
|
|
Imports : |
NA |
189.189 |
145.654 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods Sold |
2011.575 |
1545.827 |
|
|
|
Employees Cost |
464.088 |
366.286 |
|
|
|
Operating Expenses |
965.869 |
809.011 |
2733.442 |
|
|
Depreciation |
94.915 |
79.603 |
|
|
|
Interest |
10.133 |
9.162 |
|
|
|
Other Expenditure |
14.207 |
14.205 |
|
|
Total Expenditure |
3560.787 |
2824.094 |
2733.442 |
|
SUMMARISED RESULTS
|
PARTICULARS |
|
|
31.03.2008 |
|
Type |
|
|
Full
Year |
|
Sales Turnover |
|
|
4896.700 |
|
Other Income |
|
|
191.400 |
|
Total Income |
|
|
5088.100 |
|
Total Expenditure |
|
|
4182.100 |
|
Operating Profit |
|
|
906.000 |
|
Interest |
|
|
14.800 |
|
Gross Profit |
|
|
891.200 |
|
Depreciation |
|
|
111.500 |
|
Tax |
|
|
112.700 |
|
Reported PAT |
|
|
657.600 |
|
Dividend (%) |
|
|
1000.000 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity
Ratio |
0.01 |
0.01 |
0.03 |
|
Long
Term Debt-Equity Ratio |
0.01 |
0.01 |
0.03 |
|
Current
Ratio |
2.15 |
2.02 |
1.79 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
2.48 |
2.49 |
2.67 |
|
Inventory |
5.57 |
5.91 |
6.66 |
|
Debtors |
22.82 |
11.28 |
9.06 |
|
Interest
Cover Ratio |
81.51 |
79.75 |
104.63 |
|
Operating
Profit Margin(%) |
19.58 |
21.33 |
18.75 |
|
Profit
Before Interest And Tax Margin(%) |
17.55 |
19.22 |
16.74 |
|
Cash
Profit Margin(%) |
15.74 |
17.65 |
14.96 |
|
Adjusted
Net Profit Margin(%) |
13.72 |
15.55 |
12.94 |
|
Return
On Capital Employed(%) |
26.36 |
27.49 |
26.34 |
|
Return
On Net Worth(%) |
20.76 |
22.32 |
20.74 |
LOCAL AGENCY FURTHER
INFORMATION
HISTORY
Promoted as a partnership firm in 1936 by the late Anand
Chandravarkar to import pharmaceutical dosage forms, specialised infant foods
and surgical goods Fairdeal Corporation (P) Limited, as the company was known, was
converted into a private limited company in 1940. It set up a formulation unit
at Jogeshwari, Bombay in 1949.
FDC's subsidiaries are FDC Holdings, Netherlands B V, FDC International
Limited,UK and FDC Inc,New Jersey ,USA . Fair Deal Corporation Pharmaceutical
SA (Pty) Limited is its Joint Venture Entity.
The company manufactures Electral, oral rehydration salt (ORS), being a leader
in this segment with market share has improved from 1.24% to 1.32% and its
market rank has improved from 25th to 22nd. FDC manufactures bulk drugs,
formulations and food products. The plant at Roha manufactures pharma dosage
forms, food products and bulk drugs for the anti-rheumatic, anti-asthmatic,
opthalmic and ENT segments.
The company part financed its technical upgradation/modernisation/backward
integration/expansion plans from the proceeds of its initial public issue in
Jan.'96. The company set up a modern manufacturing plant at Goa for manufacture
of tablet dosage forms. The plant has commenced commercial production in Sep
2000. The plant is designed to meet UK/US standards on solid dosage form.
In Feb. 2001, the company has signed a marketing tie-updeal with Aspen
Pharmacare of South Africa. Through this alliance, FDC will be initially
marketing 10-12 ophthalmic products manufactured at its plants in India and
approved by the UK Medicines Control Agency in South Africa.
FDC will also enter into a licensing arrangement with Aspen Pharmacare for
solid dosage forms and oral rehydration salts, to be manufactured locally in
South Africa at Aspen's facilities with knowhow from FDC. Aspen Pharmacare is
the largest listed pharmaceutical company in South Africa and a dominant player
in generic medicine. The total market for ophthalmic products in South Africa
is estimated at Rs 78.70 cr, and FDC hopes to achieve a 30% marketshare in five
years.
During 2000-01, the company's Roha plant, manufacturing basic raw materials,
was inspected and approved by US FDA. The company is also setting up a modern
manufacturing plant at a separate site in Goa. The plant will be a world class
facilities with quality systems of International GMP Standards and it will also
enable the company to enter into US market. The trial runs and commerical
production is expected to be commenced in March 2004. To tap the Sub Sahara
African countries FDC is planning to set up a marketing joint venture in South
Africa and Russia.
FDC is setting up a manufacturing facility at Baddi, Himachal Pradesh, for the
manufacturing of Cephalosporin drugs. This facility is expected to be
operational in 2006. The company has received approvel from US FDA for its
sterile manufacturing facility for ophthamlmic dosage forms at Waluj,
Aurangabad and an analytical research and development laboratory at Jogeshwari,
Mumbai. Also the company is setting up an additional facility at Waluj by
adding one more Form-Fill-Seal(FFS) machine during the year 2004-05.
During the year 2004-2005, FDC has received a certification for its plant at
Waluj conforms to the Quality Management System Standards ISO 9001:2000 and
ISO13485:2003 respectively. This will enable the company to enhance its exports
to European countries.
In the year 2004-05, the company has issued bonus equity shares in the ratio of
1:1.
In 2006, The company has expanded its installed capacity of Basic Drugs,
Capsules and Formulations (Cream, Powder, Ointments etc.) by 2350 kgs,
20,00,000 nos and 1342200 kgs respectively during the year. With this expansion
the total capacity of Basic Drugs, Capsules and Formulations (Cream, Powder,
Ointments, etc) has been increased to 119050 kgs, 19.20 nos in crores and
77,77,920 respectively.
The company has set up a production facility at Baddi, Himachalpradesh, the
production at this new site will commence from July 2006.
aWARDS:
- 1992 The
“National Award” – 1992 awarded by ‘The Ministry of Science and
Technology’ (Government of India) for the R & D achievements.
- 1993 The
“Quality Excellence Award” – 1993 awarded to ‘FDC – Mumbai’ plant by the
Indian Drug Manufacturers Association.
- 1994 The
“Certificate of Merit” – 1994 awarded to ‘FDC – Waluj’ plant by the Indian
Drug Manufacturers Association.
- 1995 The
“Certificate of Merit” – 1995 awarded to ‘FDC – Roha’ plant by the Indian
Drug Manufacturers’ Association.
- 1996 The
“Quality Excellence Award” – 1996 awarded to ‘FDC – Waluj’ plant by the
Indian Drug Manufacturers’ Association.
- 1996 The
“Certificate of Merit” – 1996 awarded to ‘FDC-Roha’ plant by the Indian
Drug Manufacturers’ Association.
BUSINESS
REVIEW
The global pharmaceutical market grew by 7% to reach US$608 billion in 2006.
The generic segment growth, continued to outpace the global pharmaceutical
market due to increasing ageing population and Government's effort to reduce
their healthcare expenditure. Generics are increasingly being prescribed by the
general practitioners as an alternative to high priced originator brands.
According to ASSOCHAM and Cygnus research paper, the Indian domestic pharma
market, which consistently grew at a single digit figure of 9.5% CAGR in the
last five years, is poised to accelerate at 13.6% between 2006-2010 to touch
the market size of $9.48 billion by 2010 from present level of little over $
5.7 billion.
The new patent regime encouraged many MNCs to introduce their block buster
drugs in India, while Indian companies were focused on fostering cross border
alliances in the form of mergers, acquisitions, joint ventures, marketing tie
ups, and strengthening their Research & Development for providing clinical
trials, contract research, contract manufacturing, drug development, and
licensing.
The Indian pharmaceutical market (consisting of indigenous and multinationals
companies) estimated at Rs. 279020 Millions, grew by 14.3%. On the whole Indian
Pharmaceutical companies, consisting of domestic companies, outgrew the market
by 16.2%, while multinational companies registered a healthy growth of 7.4.%.
(Source: ORG IMS March 2007 MAT')
Around 4716 new products were introduced in the Indian Pharma market in the
year 2006-2007 (Source: ORG IMS March 2007 MAT'). With the increase in the
overall health awareness and the improvement in life-style of the middle-class
segment of the population, the market is shifting to life-style products.
Chronic segments namely cardiovascular, anti-depressants and anti-diabetics
etc, are growing more rapidly than the acute segments namely anti-infectives,
analgesics and antacids etc. The industry is focusing its efforts towards
specialised products, while spreading their awareness among the medical
fraternity. Further health awareness has also reached the semi urban and rural
areas, which has resulted in increased demand for domestic as well as western
medicines.
With Indian companies being accredited with large number of international
regulatory approvals like the USFDA, UKMHRA, UKFDA, ANVISA, SA-MCC, India will
soon be established as a manufacturing hub for multinational drug
manufacturers. Indian pharma companies can now boast of having filed the
maximum number of drug master filings (DMFs) with the USFDA. Indian
Pharmaceutical Industry has thus been recognized as a reliable source of drugs
and drug intermediates, pharmaceutical dosage forms.
India is able to produce cost effective world class products because it has the
advantages of having good clinical trial laboratories, talented medical
faculty, large patient pool, mass production, quality products supported by
Intellectual Property Protection regime. This has also led to multinational
preferring domestic companies as a preferred site for outsourcing their
requirements.
Price reductions and revisions from the much awaited Drug (Price Control)
Order, which is expected to affect profit margins, is a cause of concern of all
pharma companies. The new patent regime has led to companies to make huge
investment in research & development to tap the new opportunities set out
by the multinationals and the introduction of the product patent to create
niche products. In the year 2005-2006 a survey conducted on fifty major pharmaceutical
companies witnessed R & D expenditure growth by 26% over the previous year,
which was mainly attributed to the new patent regime introduced in the year
2005 (Source : ASSOCHAM and Cygnus research paper) and thereafter the
expenditure has been on rise. Also that the product patent regime is going to
witness a strong competition in terms of prices.
Against the above market background, given below is a brief review of various
functions of the Company:
a. Marketing:
As per ORG-IMS' Stockists' Secondary audit report for March 2007 MAT', the
Company registered a growth of 13% during the year 2006-2007, as against the
Indian pharma industry growth of 14.30%. The Company has maintained a market
share of 1.50% and its rank has been maintained at 22nd. The Company has shown
good performance in the western region. Most of the leading products continued
to register excellent growth with the flagship brand 'ZIFI', which is now
ranked as the 13th largest pharmaceutical product in India as against 14th rank
of last year. Brand extension 'ZIFI LBX' has been ranked 3rd most successful
product amongst all the new products launched in the industry during
2006.
During the year 2006-2007, the Company continued to introduce innovative
products which are being aggressively promoted in various therapeutic
categories which is as under:
|
Therapeutic Group |
Trade Name |
|
ORS |
'Enerzal' (Ready to drink product) |
|
Ophthalmologicals |
'U.V. Lube' |
|
Dermatologicals |
'Zocon' Lotion |
|
Anti-biotics/ Anti-bacterials |
'Zilee'-OZ, 'ZO'-SR 400, 'Zorno' Susp., 'Zemi' |
|
Haematologicals |
'Clip-MF', Vitcofer |
|
Anti-allergies |
'Ralzal' |
|
Neutraceuticals |
'Reliter'-D |
|
Pain management |
'Arflur' 3D, 'Arflur' -MR |
|
Cardiovasculars |
'Synplatt', 'Zilos'-H, 'Zivast'-AM, 'Zivast'
ASP |
|
Anti-diabetics |
'Zoform' SR, 'Ziglim', 'Ziglim' M, 'Ziglim' Plus,
'Zilmet', 'Zipio', 'Zipio'-M |
The performance of the new products is encouraging.
b. Financial Performance
The Company recorded sales growth of 27% in domestic market over previous year,
which constitutes 91% of the Company's total sales. The margins were however
under pressure due to price reduction in some of the Company's leading brands
and an all round increase in costs of active ingredients, utilities and
marketing costs. In addition, the investment income from dividends and gains on
investments was substantially lower during the year, since the Company chose to
deploy a major portion of surplus funds in safer liquid mutual funds than in
equity / equity related instruments, in view of extreme market volatility.
Forbes Asia October 2006 Magazine has ranked the company as one of the 23
publicly quoted companies in the region with sales of less than $ 1 billion
with solid top and bottom line gains and potentials for more success.
The Company's internal control procedures commensurate with its size and nature
of business. The internal audit reports are regularly placed before the Audit
Committee for its review.
c. Expansion and Up-gradation of
facilities
Expansion and up-gradation is an ongoing process at each manufacturing location
to meet the international standards and quality systems. Continuous
improvements have been made in GMP standards, infrastructure and quality
systems at various locations to meet international standards. The directors
have pleasure in informing that Roha plant has obtained certification of HACCP
(Hazard Analysis and Critical Control Point) for infant milk substitutes. This is
a process control system designed to identify and prevent microbial and other
hazards in production of range of Neutraceuticals. It includes steps designed
to prevent problems before they occur and to correct deviations as soon as they
are detected. Such preventive control system with documentation and
verification are widely recognized by scientific authorities and international
organizations as the most effective approach available for producing safe food.
They are pleased to inform you that the Company's bulk drug plant at Roha has
been recently cleared with USFDA accreditation for the eighth time.
As reported to you earlier, the new state of art production facility at Baddi,
Himachalpradesh, has gone into commercial production during July 2006. This
facility is geared to meet international quality systems.
d. Exports
The annual export turnover of the Company was Rs. 409.016 Millions as compared
to Rs. 419.143 Millions in 2005-2006. The export performance for the year was
almost par with the previous year on account of increase in price of Dextrose,
coupled with increases in air and sea freight resulting in an upward price
revision of the large volume ORS business, leading several large NGOs to
migrate to other low cost suppliers / countries. The planned foray into several
new markets took longer than anticipated regulatory hurdles, thereby delaying
market entry into strategic export zones. African markets continued to insist
on low-margin products, holding back business under price pressure leading to
loss in sales.
Through planned entry into new markets Australia, Azerbaijan, Jamaica and
cultivating new NGOs into customers, new business reversed loss of ORS
business. Gentamycin Eye Drops won a long-term contract with a leading NGO
generating new business generation.
The Company's ORS was forayed into new markets like Angola, Afghanistan,
Netherlands and Fiji.
The board of directors are pleased to inform that the Company has entered into
an exclusive agreement with Akorn Inc., a leading marketing Company for
Ophthalmic drugs in the United States, for development and supply agreement for
two Ophthalmic suspension drug products. The two drugs currently have a
combined United States market size of approximately $170 million. Under the terms
of the agreement, FDC will fund the development and will be responsible for
manufacturing the two Ophthalmic suspensions. Akorn will be responsible for
marketing the two drugs in the United States and will receive 40% of the gross
profit, while FDC will receive 60% of the gross profit generated from sales of
the two drugs. FDC will own the ANDAs and Akorn has agreed to meet the annual
minimum unit sales requirements in order to maintain United States marketing
exclusivity.
The directors hope that FDC's strong product development and manufacturing
capabilities are very well complemented by Akron's strengths in sales and
marketing.
RESEARCH & DEVELOPMENT
Indian Pharmaceutical industry is identified as a growing R & D hub. FDC
recognized 'For Dedicated Care' has continuously contributed in giving cost
effective products without compromising on quality. Introduction of new
products, innovation and improvement in the existing products are attributed to
the efforts of the R&D team backed by the excellent support structure of
the organisation.
a. Formulations
The Company has been making continuous endeavor to deliver efficient and cost
effective products to the ultimate consumer. At places, they have revised the
formulas and manufacturing process, resulting in cost savings and have
developed alternative vendors for supply of raw material. The Research and
Development Center of the Company continued to contribute to the quality of the
existing products and the Company has been successful in launching variety of
cost effective products.
They have launched several new products in this financial year.
Highlights of the new developments were as follows:
a) developed Chloroquine Phosphate Eye drops (UV Lube Unims) and launched first
time in India.
b) Developed three tablets formulations (targeted for ANDA submission) ready
for pilot bio-studies.
c) Successfully launched Fluconazole capsules in Australian market
including developing and executing the bulk pack.
The Company has entered into a non-exclusive license agreement with GILEAD
Sciences Inc., for production and distribution of Tenofovir disoproxil fumarate
(tenofovir DF) to 95 low-income countries around the world, including India.
Tenofovir DF is sold by Gilead under the brand name 'Viread'. In addition, this
agreement also allows the manufacture of commercial quantities of both Active
Pharmaceutical Ingredient (API) and finished product.
b. Synthetics
Development and commercialization of technology was carried out for API's namely
Brimodine Tartrate, Dorzolamide Hydrochloride and Flucanazole. Four Indian
process patents for APIs and two U.S patents for antifungal NCEs were also
filed. Three NCEs belonging to anti-fungal class of compounds are currently
in-vivo testing.
c. Nutraceuticals
Several nutritional products are in the pipeline this year. R & D is going
on for releasing a low calorie sucralose based tabletop sweetener for calorie
conscious people. A protein supplement with ten other essential nutrients in
disc form for children, sports person is under development. Also the company's
well renowned brand 'RELITER' D, will be re-launched in a pan masala
flavour.
d. Biotechnology
As reported to the earlier with regards to the technology agreement, entered
into with the Israel based Company, the Company is actively involved in the
process of introducing an additional chromatography step to obtain high quality
consistent pure product. Thereafter, the consistency batches will be submitted
to the Review Committee on Genetic Manipulation for which they have already
obtained permission from the Department of Bio-Technology (DBT).
The Company's Wholly Owned Subsidiary (WOS), FDC International Limited, United
Kingdom, FDC Holdings Netherlands BV, Netherlands, FDC Inc., United States of
America, reported a profit of 47,297 pounds (Rs.4.506 Millions), Euro 35,151,
(Rs.3.673 Millions), USD 93,410 (Rs.3.931 Millions) respectively.
The Company's joint venture business at South Africa namely Fair Deal
Corporation Pharmaceutical (Pty) Limited (FDC SA), reported a profit of Rand
541,682. (Rs.3.172 Millions)
The Company acquired an additional 35% shareholding (representing 113,750
Equity shares having face value of Rand 1 each) in FDC SA on December 12, 2006
from one of the joint venture partners for a consideration of Rs 0.655 Million,
thereby making FDC SA, a subsidiary of the Company. Further, subsequent to the
balance sheet date, the Company has entered into an agreement for transfer of
the aforesaid 35% shareholding in FDC SA to a newjoint venture partner, Micro
Healthcare (Proprietary) Limited, a company incorporated in South Africa, who
presently manufacture and sell to FDC SA. The manufacturing capabilities of
Micro coupled with FDC's strong Research & Development abilities is
expected to earn good volumes and profits for the joint venture. The accounting
treatment of FDC SA is explained in detail in notes to accounts of the Company
and also to the consolidated accounts. (refer Schedule N')
UKMHRA has granted marketing Authorisations under The Medicines for Human Use
(Marketing Authorisations etc.,) Regulations, for marketing of the product
Flucanazole tablets and Sodium Cromoglicate Eye drops in United Kingdom.
In terms of section 212(8) of the Company's Act 1956, the Company has received
exemption from Government of India, Ministry of Company Affairs, New Delhi,
from attaching the accounts of its subsidiaries viz. FDC Holdings Netherlands
B.V., FDC International Limited, U.K., FDC Inc., U.S.A., and Fair Deal
Corporation Pharmaceutical SA (Pty) Limited, South Africa, for the financial
year ended March 31, 2007. However as directed by the Central Government, the
financial data of the subsidiaries have been furnished under' Notes to the Consolidated
Accounts' (refer note 21 of Schedule N').
Also, as directed by the Central Government, annual accounts of the
subsidiaries and the related detailed information will be made available to the
holding and subsidiary company investors on request and the same is available
for inspection by the members at the registered office of the Company, between
10.00 a.m. to 12.00 noon on all days except Fridays and holidays, till the date
of the forthcoming meeting and will also be placed before the said meeting.
Any shareholder interested in obtaining a copy of the annual accounts of the
subsidiary company and the detailed information with the financial statement of
the said subsidiaries may write to the secretarial department at the corporate
office of the Company.
FIXED ASSETS:
The company’s fixed assets of important value include leasehold land,
freehold land, buildings, plant & machinery, laboratory testing machines,
electrical installations, furniture, fixtures & fittings, office
equipments, water coolers, air-conditioners and vehicles.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.30 |
|
UK Pound |
1 |
Rs.84.03 |
|
Euro |
1 |
Rs.66.42 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|