MIRA
INFORM REPORT
|
Report Date : |
16.05.2012 |
IDENTIFICATION DETAILS
|
Name : |
SURYA PHARMACEUTICAL LIMITED |
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Registered
Office : |
Plot No. 85, HPSIDC Industrial Area, Baddi, The Nalagarh –
173 205, Himachal Pradesh |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
25.03.1992 |
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Com. Reg. No.: |
227186 |
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Capital
Investment / Paid-up Capital : |
Rs.192.752 Millions |
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CIN No.: [Company Identification
No.] |
L24232DL1992PLC227186 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
PTLS14220D |
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PAN No.: [Permanent Account No.] |
AABCS3001K |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
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Line of Business
: |
Development, Manufacturing and Marketing of Pharmaceutical Products. |
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No. of Employees
: |
Around 1000 |
RATING & COMMENTS
|
MIRA’s Rating : |
A (60) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 21000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established company having satisfactory track. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are reported as fair. General Financial position is satisfactory. Payments are reported as regular. The company can be considered normal for business dealings at usual trades terms and conditions. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office/ Factory : |
Plot No. 85, HPSIDC Industrial Area, Baddi, The Nalagarh –
173 205, Himachal Pradesh |
|
Tel. No.: |
91-172-2779635 (8 Lines) / 91-1795-245350 |
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Fax No.: |
91-172-2779639/ 91-1795-245350 |
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E-Mail : |
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Website : |
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Area : |
80000 sq. ft./ 80,000 sq. ft.[Plant] |
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Location : |
Owned by company |
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Corporate
Office 1/ Head Office : |
SCO 164-165,
Sector 9-C, Madhya Marg, |
|
Tel. No.: |
91-172-500-5000/1/2/3/4/5/ 2779635 |
|
Fax No.: |
91-172-507-6000/1/2/3 |
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Email: |
pkjain@suryapharma.com careers@suryapharma.com |
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Websites: |
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Location : |
Leased |
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Corporate Office 2: |
5190 Neil Road, Suite 430 Reno, NV 89502 |
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Administrative Office : |
1596, 1st Floor, Bhagirath Palace, Chandni Chownk, Delhi – 110006, India |
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911, 9th Floor, Surya Kiran
Building, 19, K.G Marg, New Delhi, India |
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Tel No.: |
91-11-23733021 |
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Fax No.: |
91-11-43561955 |
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Factory/Plant : |
· Plot No.383, Industrial Area, Phase I, Panchkula, Haryana, India Tel.: 91-172-2565222 / 5011319 Fax: 91-172-2573130 Area: 14,00,000 sq. ft. Location : Owned
· Plot No. 87, HPSIDC Industrial Area, Baddi - 173205, District Solan, Himachal Pradesh, India Tel.No.: 91-1795-246050 Fax: 91-1795-245350 Location : Owned
· Village Banur, Tehsil Rajpura, District Patiala, Punjab, India Tel.No.: 91-1762-507131-32 / 91-172-5005000 Fax: 91-1762-507130 / 91-172-5076000 Area: 20,000 sq. ft. Location : Owned
· Industrial Growth Centre II, Samba (Distt. Jammu), Jammu and Kashmir, India (Area: 80 Kanals , Location Leased) · Plot No.50-51, EPIP, Phase – I, Jharmajiri, District. Solan (Himachal Pradesh), Baddi. (Area : 3870 Sq.Mtrs, Location : Leased) |
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International
Offices : |
7, Kaki Bukit Road 1, #
02-10, Singapore (415937) |
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Tel No.: |
+65 6844 8134 |
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Fax No.: |
+65 6749 7302 |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. Rajiv Goyal |
|
Designation : |
Chairman and Managing Director |
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Name : |
Ms. Alka Goyal |
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Designation : |
Executive director |
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Name : |
Mr. Anil Arya |
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Designation : |
Director |
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Name : |
Mr. Abhishek Arya |
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Designation : |
Director |
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Name : |
Mr. Ashwani K. Aggarwal |
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Designation : |
Nominee Director Of IDBI |
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Name : |
Dr. H.B.L. Vohra, |
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Designation : |
Director |
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Name : |
Mr. Devinder Pal |
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Designation : |
Director |
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Name : |
Dr. R.K. Gupta |
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Designation : |
Additional Director |
KEY EXECUTIVES
|
Name : |
Mr. Rajansh Thukral |
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Designation : |
Company
Secretary and Compliance Officer |
|
Address : |
S.C.O. 164-165, Sector
9-C, Madhya Marg, Chandigarh-160 009, Punjab, India |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 31.03.2012)
|
Names of Category |
No. of Shares |
Percentage of
Holding |
|
|
|
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|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
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|
32,452,550 |
19.77 |
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|
44,811,080 |
27.29 |
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|
77,263,630 |
47.06 |
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Total
shareholding of Promoter and Promoter Group (A) |
77,263,630 |
47.06 |
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(B) Public
Shareholding |
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|
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|
|
|
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44,516,316 |
27.11 |
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33,459,380 |
20.38 |
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5,916,843 |
3.60 |
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|
|
|
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|
3,027,211 |
1.84 |
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|
2,913,898 |
1.77 |
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|
1,000 |
- |
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|
112,313 |
0.07 |
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|
86,919,750 |
52.94 |
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|
|
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Total Public
shareholding (B) |
86,919,750 |
52.94 |
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|
|
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Total (A)+(B) |
164,183,380 |
100.00 |
|
|
|
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(C) Shares held by
Custodians and against which Depository Receipts have been issued |
- |
- |
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|
- |
- |
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|
38,569,000 |
- |
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|
38,569,000 |
- |
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Total
(A)+(B)+(C) |
202,752,380 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 Million BUSINESS DETAILS
|
Line of Business : |
Development, Manufacturing and Marketing of Pharmaceutical Products. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Installed Capacity |
Actual Production |
|
|
|
|
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|
Bulk Drug |
MT |
2866 |
1873.01 |
|
Formulation– Tablets & Capsules (No in Lacs) |
Nos in Lacs |
16020 |
2527.48 |
|
Formulation - Dry Syrup (No in lacs) |
180 |
||
|
Menthol & Mint Derivatives |
MT |
5400 |
7387.06 |
|
Phyto Chemicals |
MT |
900 |
5.99 |
GENERAL INFORMATION
|
No. of Employees : |
Around 1000 |
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Bankers : |
· State Bank of India · Punjab National Bank · IDBI Bank · Bank of Baroda · Punjab and Sind Bank · Export and Import Bank of India · Allahabad Bank · Corporation Bank · Federal Bank · Catholic Syrian Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Aad and
Associates Chartered Accountant |
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Address : |
# 1595, Sector 33D, Chandigarh, Punjab, India |
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Subsidiaries: |
·
Surya Healthcare Limited · Surya Pharmaceutical Inc, USA · Surya Pharmaceutical (Singapore) Pte Limited · Surya Biopharma USA Inc. |
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Entities over which key management personnel/ their relatives are
able to exercise significant influence: |
· Surya Healthcare Limited · Surya Pharmaceutical Inc. · Ess Ess Exim Private Limited · Surya Envirotech Limited. · Kala Infra Private Limited · Surya Pharmaceutical (Singapore) Pte Limited · Surya Biopharma U.S.A Inc |
CAPITAL STRUCTURE
(AS ON 30.09.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1000000000 |
Equity Share |
Rs.1/- each |
Rs.1000.000 Millions |
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|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
202752380 |
Equity Share |
Rs.1/- each |
Rs.202.752 Millions |
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(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1000000000 |
Equity Share |
Rs.1/- each |
Rs.1000.000 Millions |
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|
|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
192752380 |
Equity Share |
Rs.1/- each |
Rs.192.752 Millions |
|
|
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|
NOTE:
Out of which 675000 shares @ Rs.1/- each
issued as bonus shares and 700 shares @1/- each issued for consideration other
than cash
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
192.752 |
144.683 |
144.683 |
|
|
2] Share Application Money |
65.625 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
4941.097 |
2887.202 |
2156.412 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
5199.474 |
3031.885 |
2301.095 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
9630.825 |
6805.091 |
4665.766 |
|
|
2] Unsecured Loans |
1555.945 |
276.004 |
341.511 |
|
|
TOTAL BORROWING |
11186.770 |
7081.095 |
5007.277 |
|
|
DEFERRED TAX LIABILITIES |
193.604 |
132.172 |
141.841 |
|
|
|
|
|
|
|
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TOTAL |
16579.848 |
10245.152 |
7450.213 |
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
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FIXED ASSETS [Net Block] |
6350.185 |
4279.800 |
3007.786 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
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|
INVESTMENT |
258.143 |
54.953 |
2.535 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
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|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
10406.325
|
6572.584
|
3731.804
|
|
|
Sundry Debtors |
2908.487
|
1530.802
|
1373.123
|
|
|
Cash & Bank Balances |
154.802
|
179.076
|
82.293
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
1566.046
|
1226.523
|
1282.564
|
|
Total
Current Assets |
15035.660
|
9508.985
|
6469.784
|
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
3920.240
|
2618.146
|
1774.619
|
|
|
Other Current Liabilities |
1129.278
|
979.356
|
246.323
|
|
|
Provisions |
28.913
|
21.703
|
17.362
|
|
Total
Current Liabilities |
5078.431
|
3619.205
|
2038.304
|
|
|
Net Current Assets |
9957.229
|
5889.780
|
4431.480
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
14.291 |
20.619 |
8.412 |
|
|
|
|
|
|
|
|
TOTAL |
16579.848 |
10245.152 |
7450.213 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
16332.674 |
11575.314 |
7515.259 |
|
|
|
Other Income |
89.042 |
104.982 |
47.578 |
|
|
|
TOTAL (A) |
16421.716 |
11680.296 |
7562.837 |
|
|
|
|
|
|
|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material Consumed |
12756.150 |
8850.571 |
|
|
|
|
Manufacturing Expenses |
426.514 |
280.838 |
|
|
|
|
Excise Duty |
328.499 |
233.963 |
|
|
|
|
Personnel Expenses |
402.036 |
288.332 |
|
|
|
|
Administration Expenses |
149.497 |
95.973 |
|
|
|
|
Selling Expenses |
198.373 |
157.605 |
6349.820 |
|
|
|
Loss Due to Fire |
0.000 |
24.473 |
|
|
|
|
Preliminary and Deferred Revenue Expenses
Written Off |
6.327 |
5.953 |
|
|
|
|
Increase/(Decrease) in Finished Goods |
(505.845) |
8.788 |
|
|
|
|
TOTAL (B) |
13761.551 |
9946.496 |
6349.820 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2660.165 |
1733.800 |
1213.017 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1077.534 |
623.618 |
411.583 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1582.631 |
1110.182 |
801.434 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
265.470 |
205.548 |
160.450 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1317.161 |
904.634 |
640.984 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
315.582 |
144.029 |
79.692 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
1001.579 |
760.606 |
561.292 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
28.913 |
21.703 |
17.362 |
|
|
|
Dividend Distribution Tax |
3.605 |
2.951 |
2.459 |
|
|
|
Income Tax |
12.460 |
5.162 |
25.364 |
|
|
BALANCE CARRIED
TO THE B/S |
956.601 |
730.790 |
516.107 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
4227.806 |
3412.195 |
2129.683 |
|
|
TOTAL EARNINGS |
4227.806 |
3412.195 |
2129.683 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
3295.863 |
2099.806 |
1340.516 |
|
|
|
Capital Goods |
284.645 |
138.446 |
48.899 |
|
|
TOTAL IMPORTS |
3580.508 |
2238.252 |
1389.415 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
5.20 |
5.26 |
-- |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
4055.500 |
4701.640 |
5498.350 |
|
Total Expenditure |
3369.270 |
3938.970 |
4754.170 |
|
PBIDT (Excl OI) |
686.230 |
762.670 |
744.180 |
|
Other Income |
14.340 |
53.820 |
12.210 |
|
Operating Profit |
700.570 |
816.490 |
756.390 |
|
Interest |
318.030 |
517.750 |
449.890 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
382.540 |
298.740 |
306.500 |
|
Depreciation |
79.240 |
86.930 |
89.520 |
|
Profit Before Tax |
303.300 |
211.810 |
216.980 |
|
Tax |
60.660 |
0.000 |
0.000 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
242.640 |
211.810 |
216.980 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
242.640 |
211.810 |
216.980 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total
Income |
(%) |
6.13
|
6.51
|
7.42
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
8.06
|
7.82
|
8.52
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
6.16
|
6.56
|
6.76
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.25
|
0.30
|
0.27
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.13
|
3.53
|
3.06
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.96
|
2.63
|
3.17
|
LOCAL AGENCY FURTHER INFORMATION
|
Check list by info
Agents |
Available in Report (Yes/ No) |
|
|
|
|
Year of Establishment |
Yes |
|
Locality of the Firm |
Yes |
|
Constitution of the Firm |
Yes |
|
Premises details |
Yes |
|
Type of Business |
Yes |
|
Line of Business |
Yes |
|
Promoter’s Background |
No |
|
No. of Employees |
Yes |
|
Name of Person Contacted |
No |
|
Designation of Contact person |
No |
|
Turnover of Firm for last three years |
Yes |
|
Profitability for last three years |
Yes |
|
Reasons for variation <> 20% |
----- |
|
Estimation for coming financial year |
No |
|
Capital in the business |
Yes |
|
Details of sister concerns |
Yes |
|
Major Suppliers |
No |
|
Major Customers |
No |
|
Payments Terms |
No |
|
Export/ Imports Details (If applicable) |
No |
|
Market Information |
----- |
|
Litigations that the firm/ Promoters Involved in |
----- |
|
Banking details |
Yes |
|
Banking Facility Details |
Yes |
|
Conduct of the Banking Account |
----- |
|
Buyer visit details |
----- |
|
Financials, if provided |
Yes |
|
Incorporation details is applicable |
Yes |
|
Last Accounts filed at ROC |
Yes |
|
Major Shareholders, if available |
No |
CORPORATE RESULTS
During the year 2010-11, the net revenue of the company was Rs.16599.100 Millions as compared with Rs.11437.500 Millions during the previous year, thus registering an increase of 45.13%.
The profit before interest, depreciation and taxes was Rs.2660.200 Millions as compared with Rs.1733.800 Millions during the previous year, thus advancing by 53.43%. Further the company reported a PAT of Rs.1001.600 Millions as compared with the PAT of Rs.760.600 Millions, thereby showing growth of 31.69%.
EXPANSION/GROWTH PLANS AND OUTLOOK
Subject and its
group companies identified particular segments and invested in new product
development in ethical formulations, generic formulations, consumer personal
care and consumer healthcare (OTC).
In order to provide
new and hitherto unavailable alternatives to the Indian consumer, the Company
entered into exclusive, international alliances to market and distribute the
therapeutic footwear of Crocs, where the footwear is not only recommended by
doctors to diabetic patients for preventive and curative purpose but to any
profession that demands long standing hours. The therapeutic footwear comes in
various designs for male and female wear and in various colours, and is
available across all major cities in India.
Similarly, the
Company entered into a tie-up with US-based company, Palmer’s, for the cocoa
butter-based beauty care products that will vie with the premium brands and
will provide “value for money” in the markets upper segment. Another alliance
with Thailand-based Royal Industries for baby feeding products and accessories
and range of products is based on superior design and material, and is
well-accepted by the market. The fourth tie-up was struck with the
Belgium-based QNT, one of the global companies in sports nutrition and dietary
supplements. This market is emerging stronger as people everywhere have started
taking control of their exercise regimen and food habits.
The three existing
formulations divisions of the Company, namely Alexus (for ethical formulations),
Aegis (for generic formulations) and Altair (for medical devices and
diagnostics) became available pan-India, launched new products and consolidated
and grew market share during the year. The Company also launched the
gynaecology-focused division, Adonia with 15 major products. Further, new
therapeutic specific divisions are due to be launched this year. They expect to
emerge among the formulations players in India in next 3-5 years.
The Company
achieved new milestones for cost improvement and technology leadership. The
state-of-the-art cGMP-compliant, Jammu plant commissioned two units in 2009-10,
underwent further validation trials and commercial production started in two
new units during 2010-11. The Jammu plant can manufacture sterile and nonsterile
cephalosporin APIs and formulations for the regulated markets. Among other
developments, the Company‘s Banur plant, the largest plant location among the
six locations, underwent successful audits with Korean FDA as well as large
Indian buyers. The cephalosporin formulations plant in Baddi also successfully
and deservedly underwent the CDSCO inspection. Many technological improvements
were implemented in the plants to secure efficiency and compliances. The
Company will continue to invest in modern technology in the plants.
Within
pharmaceuticals, the regulatory filings in terms of marketing dossiers and drug
master files gained momentum, and during the year, the Company obtained drug
master files for Cefaclor and CPDP. New regulatory filings for Europe and the
US are in the pipeline. In menthol and mint derivatives, the Company continues
to enjoy the confidence of some of the world’s largest buyers in consumer goods
and flavours and fragrances. The R&D division continued to focus on process
improvement, product development and added new dimensions in the form of
R&D formulations during the year. Phytochemicals and CRAMS plan to exploit
their strategic advantages in the future.
Talent acquisition
and retention has become one of the top priorities, given that new businesses
have been started with experienced professionals, and the Company strengthened
the middle management ranks during the year. They aspire to become the first
choice employer for all professions in the Indian economy. The Company also moved
its registered office from Himachal Pradesh to New Delhi in order to acquire
and retain professionals from more diverse backgrounds.
MANAGEMENT
DISCUSSION AND ANALYSIS
ECONOMIC OVERVIEW
Global economic overview:
The global economy rebounded with 5.1% growth in 2010 against (0.5%) in
2009, facilitated by strong private consumption in advanced economies, private
demand, accommodative policy stances and resurgent capital inflows in emerging
economies.
Pockets of vulnerability persisted; real estate markets and household
income remained weak in some major advanced economies. Financial turbulence
reemerged in the periphery of the Euro area in the last quarter of 2010. One
key difference was the limited financial market spillover to other countries.
Natural global disasters posed a significant challenge for global
economic growth, taking a massive toll on human life and wealth. Political
turmoil in the Middle East and North Africa contributed to a modest
deceleration in global industrial production and trade.
Indian economic overview:
India retained its position as the second fastest-growing nation with 8.5% growth in 2010-11. The highlight was robust agricultural sector growth at 5.4% in 2010-11 against 0.4% growth in 2009-10.
Even as macroeconomic numbers remained robust, they were marked by volatility, primarily driven by global clues and policy responses to address inflation.
Headline inflation witnessed a relentless rise in 2010-11.
Despite government intervention through large scale monetary policy tightening,
inflation continued to remain close to the double digit mark. Rising inflation
and moderate demand are expected to limit India’s economic growth below 8% in
2011-12.
INDUSTRY REVIEW AND OPPORTUNITIES
THE PHARMACEUTICAL
INDUSTRY
Global
pharmaceutical sector
The global pharmaceutical market is expected to grow 5-7% in 2011 (4-5% in 2010) and reach US$ 880 billion. The market is expected to grow at a 4-7% CAGR till 2013 to US$ 975 billion. Growing economies with several innovative treatment options will contribute significantly towards this growth as against developed markets, which face constraints like major patent expiries and payer mechanisms that limit drug spending.
The 17 emerging pharmaceutical countries are expected to record a growth of 15-17% in 2011 to reach US$ 170-180 billion, with China growing 25-27% into a market worth US$ 50 billion. This growth will be boosted by increased government expenditure on healthcare and broader private healthcare funding.
The Asia-Pacific market will grow at a CAGR of 12.6% during 2010-12, owing to increased R&D activities in the region, low costs and a favourable regulatory environment.
Among the developed countries, Japan is likely to grow 5-7%. The US is likely to remain the single largest market with a growth of 3-5% to US$ 320-330 billion. The five major European markets (Germany, France, Italy, Spain and the U.K.) will collectively grow at 1-3%
Long term
The global pharmaceutical market is expected to become increasingly genercised. Over US$ 267 billion of sales are exposed to patent expirations in 2011-16 and as a result, the expected loss of sales will be US$ 141 billion.
Interestingly, the US market is approaching a patent cliff where branded is expected to decline significantly due to the following reasons:
Significant R&D expenses not translating into an increasing number of product launches
Increasing regulation focused on safety and cost-effectiveness
This is expected to increase competition from players in emerging markets and big pharmaceutical companies involved in generics.
Estimates suggest that global pharmaceutical R&D spend is expected to grow 2.3% (CAGR 2009-16) to US$ 145 billion by 2016 leading to a robust product pipeline of new generation products.
Indian pharmaceutical sector There are more than 5,000 Indian pharmaceutical firms employing about 3,40,000 people, with around 1,000 pharmaceutical plants having the World Health Organisation’s seal of current good manufacturing practices (cGMP).The pharmaceutical industry is also one of India’s most innovative industries in terms of R&D spending and the number of patents granted in India and abroad.
The Indian pharmaceutical industry ranks third by drug volume (10% of global share) and 14th by value -- about
US$ 24.8 billion (3% of global sales). The industry is growing at around 1.5- 1.6 times the country's GDP growth. The Indian pharmaceutical industry’s growth was propelled primarily by exports, expanding 18.7% CAGR to US$ 9 billion in 2009-10 (2005-2010). During the same period, the domestic market grew at 13.5% CAGR to US$ 13.8 billion.
India has the highest number of FD Aapproved production facilities in the world outside the US and possesses 25% of the drug master files (DMFs) with the U.S. Food and Drug Administration.
Bulk drugs/APIs: In India, the bulk drug market, which grew at a CAGR of 18.5% during five years to reach US$ 7.69 billion in 2010, is expected to grow to US$ 16.91 billion by 2014. The Indian API segment is fragmented, with top 10 companies constituting 44% of the market. About 30% of the bulk drugs manufactured in India are for domestic consumption.
According to the World Health Organisation and Pharmexcil, more than 90% of API approvals for antiretroviral drugs, anti-tubercular and antimalarials are granted to India, out of a total of 4,942 pre-qualified approvals granted by WHO to 12 countries in 2009.
Generics: India accounts for about 25% of the world’s generic drug production and is ranked third in the global generics market behind the US and China. It accounts for nearly 6% of the global generics markets. Branded generics represent the single largest segment in the generics segment. Hence, doctors will remain key influencing factors leading to the growth of branded generics in India.
According to FICCI, India and China are set to dominate the global generics (off patent drugs) market as low manufacturing and R&D costs will prompt key global pharma players to look east.
Exports: India’s pharmaceutical exports grew 16% from US$ 8,878.27 million in 2009-10 to US$ 10,300 million in 2010-11. Indian pharmaceutical products are exported to more than 65 countries. The US has consistently been its biggest market.
INDIAN PHARMACEUTICAL MARKET
Research and development: India’s R&D
investments have been low – at 0.9% of India’s GDP over the past few years. Of
this, 0.61% comprises the government’s R&D investment, which grew
consistently in the past years. The current total target for R&D as a share
of GDP is 1.2% by 2012. To achieve this target, the government announced the
following favourable policies:
In the Union
Budget 2010-11, the weighted deduction on in-house R&D increased to 200%
from 150%, which is likely to reduce the tax liability of drug companies.
The government
plans to create a pharma fund of Rs.30000.000 Millions to promote innovative
research and development in drug discovery. The proposed fund will focus on key
areas such as biologics, among others.
Pharmacy retail: Organised retail chains account for around
3% of total pharmacy sales. The market is highly fragmented with more than
800,000 chemists and 50,000 stockists distributing formulations pan-India.
Sizeable
investments are expected in this segment from corporates like Apollo Hospitals
and Fortis Hospitals. Additionally, the entry of large retail chains, namely,
Big Bazaar, Hypercity and Spencers in pharmaceutical products retail is
expected to grow the organised retail share to 10% of the market size by 2015.
BUSINESS OPERATIONS:
Subject is not only
recording impressive growth in sales and profits, but is undergoing a makeover
from conventional businesses that manufacture (antibiotic APIs, finished dosage
forms, menthol and mint derivatives, phyto-pharmaceuticals), market
domestically and abroad and offer CRAMs solutions to new generation businesses
that also develop and market own medicine, OTC and consumer product brands.
INTERNAL CONTROL SYSTEMS
The Company has sound internal control systems commensurate to its size, business scale and operational complexity. Clearly defined policies and procedures and inbuilt checks and controls supplement the internal control procedures. A well-established and empowered system of internal audits and control procedures independently review the financial and operational controls and report deviations, if any, to the senior management and facilitate course correction when required. The Company constantly engages in practicing best financial and operational control systems as per international practices and standards.
The Company’s internal audit team carried out extensive audits throughout the year across all functional areas and submits its report to the Audit Committee of the Board of Directors.
The Audit committee addresses significant issues raised by
the internal and statutory auditors.
OTHER
INFORMATION:
Amalgamation
Pursuant to the Scheme of Amalgamation of the Sam Biotech Limited with the company, as approved by the shareholders and sanctioned by the Hon'ble Punjab and Haryana High Court on 26.07.2001 and by the Hon'ble Himachal Pradesh High Court on 14.08.2001, the assets and liabilities of Sam Biotech Limited stand transferred to and vested in the company with retrospective effect from 01.04.2000 being the effective date.
The amount standing to the credit of capital suspense accounts represents shares of Subject to be allotted to the original subscribers of Sam Biotech Limited after transfer date.
The company maintained the pace of sustained growth, reported to increase in turnover by 30% and the profits increased by 5%.
The year 2002 was momentous for the company’s operations. A number of landmarks achievements during the year had laid the foundation for future growth. Some of these accomplishments include:
·
Development of new molecules i.e. Desloratadine
by own R and D. Desloratadine is
advanced version of Loratadine (a non sedative anti histamine and is among the
highest selling over counter drugs in
· Development and Commercialisation of D-PHPG base by own R and D. This is a raw material / intermediate required for the production of Amoxycillin, Cefadroxil which are also produced by the company.
· Export House, ISO 9002
Contingent Liabilities:
(Rs. In Millions)
|
Sr. No |
Particulars |
31.03.2011 |
31.03.2010 |
|
i |
Foreign/ Inland Letter of Credit |
211.673 |
357.689 |
|
ii |
Bank Guarantees |
141.389 |
8.892 |
|
iii |
Corporate Guarantee (Subsidiaries) |
1136.500 |
108.582 |
|
iv |
Bills Discounted (FOBN) |
232.729 |
341.327 |
|
v |
Claims against the Company not
acknowledged as debt as on 31.03.2010 in respect of : |
||
|
a |
Income Tax matters, pending decisions on various
appeals made by the company and by the department. |
||
|
i) Cases for A.Y.
2000-01, 2001-02, 2003-04,2004-05 & 2005-06 are remanded back by ITAT to Assessing Officer for reframing the case. |
No Demand Pending |
No Demand Pending |
|
|
ii) Case for A.Y.
2006-07 is pending with Tribunal. |
Appeal Pending at ITAT |
Demand Notice 8.972 Millions |
|
|
iii) Case for A.Y.
2007-08 is under processing with ITAT |
CIT(A) has allowed their appeals and company has applied for appeal affect
asking for refund of (Rs.55.561 Millions) |
Demand Notice 64.947 Millions (Rs. 0.125 Millions deposited under protest, till 31.03.2010.) |
|
|
b |
Excise matters, under dispute |
73.452 |
159.148 |
|
c |
Sales Tax matters, under dispute |
-- |
15.581 |
|
d |
Service Tax, under dispute |
17.394 |
2.488 |
|
e |
Customs Act |
31.327 |
31.327 |
FIXED ASSETS
·
Land
·
Building
·
Plant and Machinery
·
R and D Assets
·
Miscellaneous Assets
·
Electrical and Fittings
·
Computers
·
Pollution Control
Equipment
·
Furniture and Fixtures
·
Motor Vehicle
AS PER WEB SITE DETAILS:
PROFILE:
Subject was established in 1992, with a vision towards
Empowering Life and well being, and has rapidly emerged as the premier
integrated pharmaceutical company in
The company is one of the largest manufacturers and exporters of Mint / Menthol derivatives and also manages state of the art research and development centres that offer the highest quality of Contract Research and Manufacturing Services. Over the years, Subject has established a global footprint in fulfilling the requirements of clients across 90 countries.
At Surya Pharmaceutical, they believe that if they take care of the present, they inspire a better future. It is this vision towards a disease-free world, a sustainable natural environment and a healthy global population, that supports there commitment to ensure the highest quality of products and services towards offering unparalled care to there clients, and to the larger community.
Subject is the flagship company of Surya Corp which has
business interests in Healthcare, Education, Infrastructure and Communications.
The company is an ISO 9001-2008, WHO GMP certified organization with six
state-of-the-art manufacturing units positioned in multiple locations across
the northern region in
The company currently supports a personnel base of more than
2500 employees in locations across
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts,
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.53.84 |
|
|
1 |
Rs.86.72 |
|
Euro |
1 |
Rs.69.17 |
INFORMATION DETAILS
|
Report Prepared
by : |
NIT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
60 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.