MIRA INFORM REPORT
|
Report Date : |
02.10.2012 |
IDENTIFICATION DETAILS
|
Name : |
DIVI’S LABORATORIES LIMITED |
|
|
|
|
Registered
Office : |
7-1-77/E/1/303, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
12.10.1990 |
|
|
|
|
Com. Reg. No.: |
01-11854 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.265.469 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L24110AP1990PLC011854 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
HYDD00549D |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer of Active Pharma Ingredients (APIs) and Intermediates. |
|
|
|
|
No. of Employees
: |
100 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (72) |
|
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 86000000 |
|
|
|
|
Status : |
Very Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well established and a reputed company having fine track.
Financial position of the company appears to be sound. Fundamentals are strong
and healthy. Directors are reported to be an experienced an The company can be considered normal for business dealings at usual
trade 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 – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including industrial
deregulation, privatization of state-owned enterprises, and reduced controls on
foreign trade and investment, began in the early 1990s and has served to
accelerate the country's growth, which has averaged more than 7% per year since
1997. India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Slightly more than half of the work force is in agriculture, but
services are the major source of economic growth, accounting for more than half
of India's output, with only one-third of its labor force. India has
capitalized on its large educated English-speaking population to become a major
exporter of information technology services and software workers. In 2010, the
Indian economy rebounded robustly from the global financial crisis - in large
part because of strong domestic demand - and growth exceeded 8% year-on-year in
real terms. However, India's economic growth in 2011 slowed because of persistently
high inflation and interest rates and little progress on economic reforms. High
international crude prices have exacerbated the government's fuel subsidy
expenditures contributing to a higher fiscal deficit, and a worsening current
account deficit. Little economic reform took place in 2011 largely due to
corruption scandals that have slowed legislative work. India's medium-term
growth outlook is positive due to a young population and corresponding low
dependency ratio, healthy savings and investment rates, and increasing
integration into the global economy. India has many long-term challenges that
it has not yet fully addressed, including widespread poverty, inadequate
physical and social infrastructure, limited non-agricultural employment
opportunities, scarce access to quality basic and higher education, and
accommodating rural-to-urban migration.
|
Source
: CIA |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office : |
7-1-77/E/1/303, |
|
Tel. No.: |
91-40-23731318/ 23731760 / 61 / 23786300 |
|
Fax No.: |
91-40-23733242 / 23786460 |
|
E-Mail : |
marketing@divislaboratories.com chemicals@divislaboratories.com |
|
Website : |
|
|
|
|
|
Factory 1 : |
Choutuppal Unit |
|
Tel. No.: |
91-8694-272092,
272260 |
|
Fax No.: |
91-8694-272685 |
|
|
|
|
Factory 2 : |
100% Export
Oriented Unit – Chippada |
|
Tel. No.: |
91-8922-245166 |
|
Fax No.: |
91-8922-245165 |
|
|
|
|
Factory 3: |
Divi’s Pharma SEZ DSN SEZ Unit Chippada
Village, Bheemunipatnam Mandal, Visakhapatnam - 531 163, Andhra Pradesh,
India |
|
|
|
|
R
and D Centers: |
Located At: ·
·
Nalgonda ·
|
DIRECTORS
As on 31.03.2012
|
Name : |
Dr. Murali K Divi |
|
Designation : |
Chairman and Managing Director |
|
Qualification : |
M. Pharm. Ph.D. |
|
|
|
|
Name : |
Mr. Madhusudana Rao Divi |
|
Designation : |
Director [Projects] |
|
|
|
|
Name : |
Dr. K. Satyanarayana |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. G. Venkat Rao |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. G. Suresh Kumar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N V Ramana |
|
Designation : |
Executive Director |
|
Qualification : |
B.Sc.(Chem) |
|
|
|
|
Name : |
Mr. Kiran S. Divi |
|
Designation : |
President Director |
|
|
|
|
Name : |
Mr. S. Vasudev |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. C. Ayyanna |
|
Designation : |
Director |
|
|
|
KEY EXECUTIVES
|
Name : |
Mr. P.V. Lakshmi Rajani |
|
Designation : |
Company Secretary |
|
|
|
|
Name : |
Mr. L. Kishore Babu |
|
Designation : |
Chief Financial Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2012
|
Category of
Shareholder |
Total No. of
Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
65,172,100 |
49.10 |
|
|
4,000,000 |
3.01 |
|
|
69,172,100 |
52.11 |
|
|
|
|
|
|
50,000 |
0.04 |
|
|
50,000 |
0.04 |
|
Total shareholding of Promoter and Promoter Group (A) |
69,222,100 |
52.15 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
22,793,492 |
17.17 |
|
|
74,782 |
0.06 |
|
|
13,581,349 |
10.23 |
|
|
36,449,623 |
27.46 |
|
|
|
|
|
|
14,539,568 |
10.95 |
|
|
|
|
|
|
9,132,305 |
6.88 |
|
|
1,438,069 |
1.08 |
|
|
1,952,625 |
1.47 |
|
|
1,037,120 |
0.78 |
|
|
709,470 |
0.53 |
|
|
36,556 |
0.03 |
|
|
169,479 |
0.13 |
|
|
27,062,567 |
20.39 |
|
Total Public shareholding (B) |
63,512,190 |
47.85 |
|
Total (A)+(B) |
132,734,290 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
132,734,290 |
- |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of Active Pharma Ingredients (APIs) and Intermediates. |
||||||||
|
|
|
||||||||
|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Installed Capacity |
Actual Production |
|
Active Pharma Ingredients and Intermediates |
MTs |
4500 |
2595.39 |
|
|
|
|
|
NOTE:
Net of captive consumption of 6421.08 MTs (Previous
year 3525.88 MTs)
GENERAL INFORMATION
|
No. of Employees : |
100 (Approximately) |
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|
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Bankers : |
·
Bank of Nova Scotia |
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|
Facilities : |
(Rs. in Millions)
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
P.V.R.K. Nageswara Rao and Company Chartered Accountants |
|
Address : |
109, Metro Residency, 6-3-1247, |
|
|
|
|
Cost Auditors : |
|
|
Name : |
EVS and
Associates Cost Accountants |
|
Address : |
206, Raghava
Ratna Towers, Chirag Ali Lane, Hyderabad – 500 001, Andhra Pradesh, India |
|
|
|
|
Subsidiaries : |
·
Divis Laboratories ( ·
Divis Laboratories Europe Ag, Basel, Switzerland |
CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
150000000 |
Equity Shares |
Rs.2/- each |
Rs.300.000 Millions |
|
|
|
|
|
Issued Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
132734290 |
Equity Shares |
Rs.2/- each |
Rs.265.469
Millions |
|
|
|
|
|
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
132734290 |
Equity Shares |
Rs.2/- each |
Rs.265.469
Millions |
|
|
|
|
|
Note: Of the above 6,55,97,975
Equity Shares of Rs.2/- each have been allotted as Bonus Shares)
Reconciliation of
the number of Equity Shares Outstanding is set out below:
|
Particulars |
31.03.2012 |
|
Shares
outstanding at the beginning of the year |
132595110 |
|
Shares issued
during the year - ESOP |
139180 |
|
Shares
outstanding at the end of the year |
132734290 |
The details of
Shareholders holding more than 5% of the equity capital is set out below :
|
Name of Shareholder |
31.03.2012 |
|
|
|
No.of Shares Held |
% of Holding |
|
PROMOTERS GROUP : |
|
|
|
Dr.Murali
Krishna Prasad Divi |
7783500 |
5.86 |
|
Satchandra Kiran
Divi |
23000000 |
17.33 |
|
Swarnalatha Divi |
7000000 |
5.27 |
|
Nilima Motaparti |
27000000 |
20.35 |
|
OTHER THAN PROMOTERS GROUP : |
|
|
|
Reliance Capital
Trustee Company Limited |
11873711 |
8.95 |
Terms/rights
attached to equity shares:
The company has
only one class of equity shares having a par value of Rs.2/- per share. Each
holder of equity shares is entitled to one vote per share. The company declares
and pays dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.
During the year ended
31st March 2012, the amount of per share dividend recognised as distributions
to equity shareholders was Rs.13/- (31 st March 2011 : Rs. 10/-)
In the event of
liquidation of the company, the holders of equity shares will be entitled to
receive remaining assets of the company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
265.469 |
265.190 |
264.288 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
21482.487 |
18015.265 |
15156.463 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
21747.956 |
18280.455 |
15420.751 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
527.606 |
185.456 |
298.465 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
30.024 |
|
|
TOTAL BORROWING |
527.606 |
185.456 |
328.489 |
|
|
DEFERRED TAX LIABILITIES |
672.872 |
549.119 |
519.050 |
|
|
|
|
|
|
|
|
TOTAL |
22948.434 |
19015.030 |
16268.290 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
7381.949 |
5897.286 |
5896.718 |
|
|
Capital work-in-progress |
1815.778 |
1037.158 |
203.908 |
|
|
Unallocated
expenditure pending capitalisation |
4.106 |
6.199 |
0.000 |
|
|
Advances for
Capital Works |
0.000 |
0.000 |
33.623 |
|
|
|
|
|
|
|
|
INVESTMENT |
4798.551 |
5284.543 |
4418.586 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
6509.685
|
5430.655 |
4795.727 |
|
|
Sundry Debtors |
5344.709
|
3927.801 |
2344.415 |
|
|
Cash & Bank Balances |
218.224
|
127.998 |
128.687 |
|
|
Other Current Assets |
68.467
|
51.243 |
2.708 |
|
|
Loans & Advances |
1888.181
|
1318.442 |
1040.572 |
|
Total
Current Assets |
14029.266
|
10856.139 |
8312.109 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
0.000
|
0.000 |
1575.547 |
|
|
Other Current Liabilities |
2982.614
|
1707.427 |
56.868 |
|
|
Provisions |
2098.602
|
2358.868 |
964.239 |
|
Total
Current Liabilities |
5081.216
|
4066.295 |
2596.654 |
|
|
Net Current Assets |
8948.050
|
6789.844 |
5715.455 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
22948.434 |
19015.030 |
16268.290 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
18449.281 |
13148.695 |
9292.919 |
|
|
|
Other Income |
657.607 |
292.253 |
306.868 |
|
|
|
TOTAL (A) |
19106.888 |
13440.948 |
9599.787 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Raw
materials consumed |
7686.799 |
4866.797 |
|
|
|
|
Purchases of
Stock-in-trade |
1.006 |
0.000 |
|
|
|
|
Changes in
inventories of finished goods, work-inprogress and
Stock-in-trade |
(106.566) |
345.229 |
|
|
|
|
Employee
benefits expense |
1451.562 |
1120.556 |
|
|
|
|
Research and
development expenses |
188.593 |
159.809 |
|
|
|
|
Other expenses |
2279.200 |
1609.380 |
|
|
|
|
TOTAL (B) |
11500.594 |
8101.771 |
5174.278 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
7606.294 |
5339.177 |
4425.509 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
37.432 |
15.165 |
27.578 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
7568.862 |
5324.012 |
4397.931 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
620.311 |
533.515 |
514.516 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
6948.551 |
4790.497 |
3883.415 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
1488.858 |
434.836 |
441.369 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
5459.693 |
4355.661 |
3442.046 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
14211.413 |
12146.806 |
10159.310 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
NA |
1325.951 |
792.865 |
|
|
|
Corporate Dividend Tax |
NA |
215.103 |
131.685 |
|
|
|
General Reserve |
NA |
750.000 |
530.000 |
|
|
|
Difference in Final Dividend |
NA |
0.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
NA |
14211.413 |
12146.806 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports |
16068.838 |
11811.894 |
8353.953 |
|
|
|
Contract Research Fee |
58.958 |
23.840 |
61.205 |
|
|
|
Interest |
0.000 |
0.000 |
13.264 |
|
|
|
Others |
0.000 |
0.000 |
1.216 |
|
|
|
Job work charges |
23.093 |
0.000 |
0.000 |
|
|
TOTAL EARNINGS |
16150.889 |
11835.734 |
8429.638 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
3486.414 |
2369.903 |
1293.558 |
|
|
|
Packing Material |
17.218 |
6.724 |
0.000 |
|
|
|
Lab Chemicals |
11.819 |
6.123 |
0.000 |
|
|
|
Components and Spare parts |
7.450 |
17.929 |
7.720 |
|
|
|
Capital goods |
115.536 |
122.366 |
9.223 |
|
|
TOTAL IMPORTS |
3638.437 |
2523.045 |
1310.501 |
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(Rs.) [Basic] |
41.15 |
32.90 |
26.40 |
|
|
|
Earnings Per
Share (Rs.) [Diluted] |
41.15 |
32.88 |
26.35 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2012 |
|
|
|
|
1st
Quarter |
|
Net Sales |
|
|
4695.100 |
|
Total Expenditure |
|
|
2779.700 |
|
PBIDT (Excl OI) |
|
|
1915.400 |
|
Other Income |
|
|
406.600 |
|
Operating Profit |
|
|
2322.000 |
|
Interest |
|
|
4.100 |
|
Exceptional Items |
|
|
0.000 |
|
PBDT |
|
|
2317.900 |
|
Depreciation |
|
|
174.800 |
|
Profit Before Tax |
|
|
2143.100 |
|
Tax |
|
|
469.300 |
|
Provisions and contingencies |
|
|
0.000 |
|
Profit After Tax |
|
|
1673.800 |
|
Extraordinary Items |
|
|
0.000 |
|
Prior Period Expenses |
|
|
0.000 |
|
Other Adjustments |
|
|
0.00 |
|
Net Profit |
|
|
1673.800 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
28.57
|
35.64 |
35.85 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
34.66
|
36.43 |
41.79 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
49.53
|
44.13 |
46.72 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.32
|
0.26 |
0.25 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.26
|
0.23 |
0.19 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.76
|
2.67 |
3.20 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
-- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm
/ promoter involved in |
-- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
-- |
|
26] |
Buyer visit details |
-- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
32] |
Date of Birth of Proprietor/Partner/Director,
if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
No |
FINANCIAL RESULTS
They have had a very
satisfactory business performance this financial year. They achieved a growth
of sales of 41% over the last year. PBT amounted to Rs.6950.000 Millions for
the year, reflecting a growth of 45%. Some of the capex programmes taken up at
the existing Units have become operational during the year. The new DSN SEZ
Unit has also become operational during the year. These capacity additions have
contributed to business during the year. They have made a provision of
Rs.1365.100 Millions towards Income-tax as against Rs.404.800 Millions during
the last year – as no tax holiday is available to EOU Unit from this financial
year and as their first SEZ Unit is eligible only for 50% of tax exemption from
this year. Deferred Tax provision for the year amounted to Rs.123.800 Millions
as against Rs.30.000 Millions during last year.
Profit after Tax
(PAT) for the year came to Rs.5460.000 Millions as against Rs.4360.000 Millions
during the previous year, a growth of 25%. Earnings per Share of Rs.2/- each
works out to Rs.41.15 for the year as against Rs.32.90 last year.
SUBSIDIARIES
They have two
wholly owned subsidiaries viz., M/s. Divis Laboratories (USA) Inc., in USA and
M/s. Divi’s Laboratories Europe AG in Switzerland which are engaged in
marketing of nutraceutical products and to provide a
greater reach to
customers within these regions. During the year, the subsidiaries have enhanced
their reach to customers in North America and Europe and contributed net sales
of Rs.810.000 Millions for the nutraceutical products to the company.
While loss for
current year at Divis Laboratories (USA) is Rs.64.000 Millions, the loss at
Divi’s Laboratories Europe is Rs.63.000 Millions.
Auditors of these
subsidiaries have observed that they have negative networth and suffer from deficiency
of cash for continuing operations as a going-concern without the support of the
parent. The losses in the subsidiaries are on account of low level of
operations at the subsidiaries.
MANAGEMENT DISCUSSION AND ANALYSIS
Economy
The year 2011 was
probably one of the toughest years for the Indian economy in recent times. The
adverse performance of all the key economic indicators weighed heavily on the
Indian economy throughout the year. Headline and food inflation indices were at
high single digit levels and showed no signs of cooling off throughout the
year.
Industry Outlook
Pharmaceutical
market research firm, IMS Health forecast that the global pharmaceutical market
will grow between 3% and 6% annually upto 2015, based on sales of US$ 856
billion in 2010. In the five preceding years, the market grew by an average of
6.2% per year. According to the data, overall market volume should increase by
between US$ 210 billion and US$ 240 billion up until 2015, then reaching a
total volume of between US$ 1,065 billion and US$ 1,095 billion.
While the U.S.
market represented 36% of the global market in 2010, this share is expected to
decline to 31% by 2015. The United States will still be the world’s largest
market (US$ 320 billion to US$ 350 billion). IMS Health sees Japan remaining in
second place in 2015 (11% share, US$ 110 billion to US$ 140 billion), followed
by China (US$ 115 billion to US$ 125 billion) and Germany (US$ 38 billion to
US$ 43 billion).
Future level of
global spending on medicines has implications for healthcare systems and policy
makers across developed and emerging economies. Unprecedented dynamics are at
play – including historically high levels of patent expiry, rapid expansion of
demand for medicines in the world’s growing economies, fewer new medicines
reaching patients, and more moderate uptake of those that do become available.
These dynamics are driving rapid shifts in the mix of spending between branded
products and generics; and between spending in the major developed countries
and those 17 high growth emerging countries referred to as ‘pharmerging’.
Pharmaceutical
industry is presently facing many challenges and uncertainties. The industry
continues to grow modestly, while adapting to unparalleled changes. This is putting
pressure on the companies to focus on ways to increase the productivity and
streamline the significant overheads.
In order to stay
competitive vis-a-vis its peers in Europe and US, the company lays great stress
on leveraging its inherent strengths of playing a complementary and
non-conflict role building strong customer relationships supported by
developing cost competitive and faster delivery structure.
Company infrastructure
Divi operates from
its Headquarters and Registered Office at Hyderabad. The company has four
multi-purpose manufacturing facilities with all support infrastructure like
Utilities, environment management and safety systems.
Unit I : The 1st
Facility at village Lingojigudem, Choutuppal Mandal, Nalgonda district, about
60 KM from Hyderabad developed on a 500 acre site and comprises of 13
production buildings, a Pilot Plant and a kilo lab. The plant consists of
around 322 reactors totalling a capacity of 1425 m3 supported with all utility
and service units. The production buildings have clearly defined finished
product areas for APIs with clean air, purified water systems that operate
under full cGMP as per US-FDA
guidelines.
Export Oriented Unit: The 2nd Facility
is at village Chippada, Bheemunipatnam Mandal, Visakhapatnam Dist. about 30 KM
from the port city of Visakhapatnam on the east coast. The Unit has 8
production blocks with around
175 reactors
totalling a capacity of 1413 m3 with all utility and service units.
SEZ Unit: The 3rd facility is at village Chippada,
Bheemunipatnam Mandal, Visakhapatnam Dist. An area of 260 acres was approved
and notified as Sector Specific Special Economic Zone in Pharma Sector with
Divi’s Laboratories Limited as a Developer and Divi’s (SEZ) as a production
unit. The Unit has 9 production blocks with
around 253
reactors totalling a capacity of 1820 m3 with all required utility and
infrastructure.
DSN SEZ Unit: This 4th facility has been set up at Their
Pharma SEZ at village Chippada during the year 2011 at an estimated cost of
Rs.2000.000 Millions. This facility commenced operations during the first
quarter of the year 2011-12. The Unit will have 5 production blocks with around
186 reactors totalling a capacity of 2000 m3 with all required utility and
infrastructure.
Research Centres: The company has 4 Research Centers with
the well defined functional focus on custom synthesis, contract research for
MNC companies as also future generics involving processes like route design,
route selection, establishing gram scale process and structural confirmation,
process optimization, impurity profile, pilot studies, prevalidation batches,
validation of process and transfer of technology to Plant, review efficiency of
processes and ongoing process.
The company has
constantly been augmenting capacities to cater to increasing business needs.
Performance and Operations Review
They have had a
very satisfactory business performance this financial year. They achieved a
sales growth of 41% over the last year. PBT
amounted to Rs.6950.000 Millions for the year, reflecting a growth of 45%.
Some of the capex
programmes taken up at the existing Units have become operational during the
year. The DSN SEZ Unit has also become operational during the year. These capacity
additions have contributed to business during the year.
They have made a
provision of Rs.1365.100 Millions towards Income-tax as against Rs.404.800
Millions during the last year – as no tax holiday is available to EOU Unit from
this financial year and as their first SEZ Unit is eligible only for 50% of tax
exemption from this year. Deferred Tax provision for the year amounted to
Rs.123.800 Millions as against Rs.30.000 Millions during last year.
Profit after Tax
(PAT) for the year came to Rs.5460.000 Millions as against Rs.4360.000 Millions
during the previous year, a growth of 25%. Earnings per Share of Rs.2/- each
works out to Rs. 41.15 for the year as against Rs. 32.90 last year.
During the year,
Divi has added 8 products to its product portfolio of which 3 are generic APIs
and intermediates and 5 are custom synthesis APIs and intermediates.
The company
continues to work towards optimizing the capacities created at its
multi-purpose manufacturing facilities and also adding additional capacities aimed
at the business opportunities available to it in its domain of capability in
line with its strategy to work with innovators playing a complementary role and
non-compete model with its generic customers.
Exports
Exports
constituted around 89% of gross sales during the year as against 92% in the
previous year. Exports to advanced markets comprising Europe and America
accounted for 71% of business.
CONTINGENT
LIABILITIES AND COMMITMENTS:
(Rs. In Millions)
|
PARTICULARS |
31.03.2012 |
|
A. CONTINGENT LIABILITIES |
|
|
(i) On account
of Letters of Credit and Guarantees issued by the bankers. |
472.140 |
|
(ii) Demands
being disputed / contested by the Company |
62.120 |
|
B. COMMITMENTS |
|
|
(i) Estimated amount
of contracts remaining to be executed on capital account and not provided
for (Net of advances) |
955.305 |
|
(ii) On account
of bonds and / or legal agreements executed with Central Excise / Customs
authorities/ Development Commissioners |
1195.000 |
|
(iii)Derivative
related commitments |
306.939 |
UNAUDITED FINANCIAL RESULTS (STANDALONE) FOR THE
QUARTER ENDED 30TH JUNE, 2012
(Rs. In Millions)
|
|
|
STANDALONE |
|
Sl No. |
Particulars |
Quarter ended 30.06.2012 |
|
|
(1) |
(2) |
|
1 |
Income from operations (a) Net Sales/Income from operations (Net
of Excise Duty) |
46841 |
|
|
(b) Other Operating Income |
110 |
|
|
Total Income from
operations (net) |
46951 |
|
2 |
Expenditure: |
|
|
|
a. Cost of materials consumed |
17138 |
|
|
b. Purchases of stock-in-trade |
0 |
|
|
c. Changes in inventories of finished
goods, work-in- progress and stock-in-trade |
(1174) |
|
|
d. Employee benefits expense |
4845 |
|
|
e. Depreciation and amortization expense |
1748 |
|
|
f. Other Expenses |
6988 |
|
|
Total Expenses |
29545 |
|
3 |
Profit from Operations before Other Income,
Interest and Exceptional Items (1-2) |
17406 |
|
4 |
Other Income |
4066 |
|
5 |
Profit from ordinary activities before
finance costs and exceptional Items (3+4) |
21472 |
|
6 |
Finance Costs |
41 |
|
7 |
Profit from ordinary activities after
finance costs but before exceptional Items (5-6) |
21431 |
|
8 |
Exceptional items |
0 |
|
9 |
Profit from ordinary activities before Tax
(7-8) |
21431 |
|
10 |
Tax Expense: |
4693 |
|
11 |
Net Profit from ordinary activities after
Tax: (910) |
16738 |
|
12 |
Extra-ordinary items (net of tax expense) |
0 |
|
13 |
Net Profit (+)/Loss(-) for the period
(11-12) |
16738 |
|
14 |
Share of profit / (loss) of associates |
0 |
|
15 |
Minority
Interest |
0 |
|
16 |
Net
Profit (+)/Loss(-) after taxes, minority interest and share of profit/ (loss)
of associates (13+14+15) |
16738 |
|
17 |
Paid-up
Equity Share Capital (Face Value : Rs.2 per share) |
2655 |
|
18 |
Reserves
excluding revaluation reserves as per balance sheet of previous accounting
year |
|
|
19 |
Earnings
per Share: |
|
|
a) |
Basic
Earnings Per Share before extra-ordinary items Rs. Diluted
Earnings Per Share before extra-ordinary items Rs. |
12.61 12.61 |
|
b) |
Basic
Earnings Per Share after extra-ordinary items Rs. Diluted
Earnings Per Share after extra-ordinary items Rs. |
12.61 12.61 |
|
|
|
|
|
A |
PARTICULARS
OF SHAREHOLDING |
|
|
1 |
Public shareholding - No. of shares - Percentage of shareholding |
63512190 47.85% |
|
2 |
Promoters and promoter group shareholding: a) pledged / encumbered b) non-encumbered: |
Nil |
|
|
No. of shares |
69222100 |
|
|
Percentage of
shares (as a % of the total shareholding of the promoter group) |
100% |
|
|
Percentage of shares (as a % of the total share capital of the company) |
52.15% |
|
|
Particulars |
Quarter
ended 30th June 2012 |
|
B |
INVESTOR
COMPLAINTS |
|
|
|
Pending at the beginning of the quarter |
Nil |
|
|
Received during the quarter |
5 |
|
|
Disposed off during the quarter |
5 |
|
|
Remaining unresolved at the end of the
quarter |
Nil |
NOTES:
1. The above results for the
quarter ended 30th June 2012, as reviewed by the Audit Committee,
were considered and approved by the Board of Directors at its meeting held on 4th
August, 2012 and were subjected to 'limited review' by the Auditors.
2. The Company is primarily
engaged in the manufacture of Active Pharmaceutical Ingredients and
intermediates. Accordingly there are no reportable segments as per Accounting
Standard 17 notified under the Companies Act, 1956.
3. As per Clause 41 of the
listing agreement, the company has opted to publish quarterly unaudited
standalone results and to publish consolidated results at the year end.
4. Figures for the previous
year/period have been regrouped or recasted, wherever necessary, as per format
revised by SEBI in conformity with the amended Schedule VI to the Companies
Act, 1956. Figures of quarter ended 31st March, 2012 are the
balancing figures between audited figures in respect of the financial year
ended 31st March, 2012 and the published year-to-date figures upto
the third quarter of that financial year.
FIXED ASSETS
·
Land and Development
·
Buildings
·
Plant and Machinery
·
Laboratory Equipment
·
Furniture and Fixtures
·
Data Processing Equipment
·
Vehicles
PRESS RELEASE
Divi’s Labs earns a PBT of Rs. 214 crores for Q1 of FY13
04th August, 2012
Divi’s
Laboratories has earned a Profit before Tax (PBT) of Rs.2140.000 Millions on a
total income of Rs. 4700.000 Millions for the 1st quarter of the
year 2012-13 on a Standalone basis. PBT for the corresponding quarter of the
last year was Rs.1300.000 Millions on a total income of Rs.3620.000 Millions.
While Income for the quarter grew by 30%, the PBT grew by 65%.
Profit after Tax
(PAT) for the current quarter amounted to Rs.1670.000 Millions after a tax
provision of Rs.470.000 Millions. The company had a PAT of Rs. 1030.000
Millions during the corresponding quarter of last year.
The company’s
Unit-2 near Visakhapatnam has undergone 3 cGMP inspections during June-July,
2012. One of the inspections was by TGA of Australia for active pharma
ingredients. The other 2 inspections were by US-FDA, one for nutraceuticals and
the other for active pharma ingredients. All the 3 inspections had no major
observations.
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 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.52.78 |
|
|
1 |
Rs.85.16 |
|
Euro |
1 |
Rs.67.78 |
INFORMATION DETAILS
|
Report Prepared
by : |
NLM |
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 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--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 |
NO |
|
--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 |
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.