MIRA INFORM REPORT
|
Report Date : |
21.08.2014 |
IDENTIFICATION DETAILS
|
Name : |
NOVARTIS INDIA LIMITED |
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|
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Registered
Office : |
Sandoz House, Shivnagar Estate, |
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Country : |
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Financials (as
on) : |
31.03.2014 |
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Date of
Incorporation : |
13.12.1947 |
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Com. Reg. No.: |
11-006104 |
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Capital
Investment / Paid-up Capital : |
Rs.159.800 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L24200MH1947PLC006104 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
PNEN03841F |
|
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PAN No.: [Permanent Account No.] |
AAACH2914F |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Subject is engaged in the business of Pharmaceuticals, Generics, Over-The-Counter (“OTC”) and Animal Health. |
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No. of Employees
: |
Not Divulged |
RATING & COMMENTS
|
MIRA’s Rating : |
A (62) |
|
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 38450000 |
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|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Comments : |
Subject is an established company having good track record. There seems some dip in the profit of the company during 2014 however financial
position of the company is sound. Fundamentals of the company are healthy. Share price are quoted high on stock exchange. Trade relations are reported as fair. Business is active. Payment
terms are reported to be regular and as per commitment. 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 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
N E W S
As per the latest IMF study, the total weigh of emerging markets in the GDP
of the world on a purchasing power parity basis has seen a sizeable shift. It
highlights how as against 51 % in 2005, the emerging economies now account for
close to 56 % of the global purchasing power GDP as per the latest survey. And
with the emerging economies growing at a faster rate than their developed
counterparts, there are every possibility that the their share goes up further
in the coming years. China may surpass the US over the next few years.
Politics and economics are very intricately connected. They tend to
influence each other in ways that could be very complex and far-reaching. The
prospects of the India’s economy have been seriously compromised due to
political corruption. High inflation, poor standard of living are to a great
extent a result of rampant corruption in the country. China on the other hand,
seems to be facing diametrically opposite challenge. American hedge fund
manager Jim Chanos has been keenly following the political and economic
development in the dragon economy and has figured out something that is quite
worrying. He is of the view that the Chinese economy could be heading toward
trouble on account of new Chinese President Xi Jingping’s very aggressive
anti-corruption drive. Chanos believes tat many things such as apartment sales,
luxury products, etc. were largely bought with dirty money. And it is now
beginning to impact consumption. This may indeed be bad news for an economy
that is struggling to transition from an investment-driven export-oriented
economy to a domestic consumption-driven economy.
A study published by Firstpost has revealed that asset classes like real
estate and equities were the biggest beneficiaries of the liberalization
policies. A firm called Ciane Analytics studied returns from assets including
equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate
outperformed every other asset classes during the 23-year period with an
annualized return of 20 % ! Equities came in second with annualized return of
15.5 % ! However, while these returns may seem mouthwatering, the fact is that
the return from equities adjusted for inflation came down to just 7.1 %.
Some brief news are as under
. R-Power to buy Jaypee’s hydro assets
. Investors await justice in NSEL case
. India seeks MFN status from Pakistan ahead of meeting
. Ukrain’s clashes with rebels hinder MH17 crash investigation
. India exploring merger of state-owned hydro PSUs
..Higher costs weigh down profit growth to slowest in 9 quarters
..Wal-Mart to expand wholesale business in India
. GMR group moves to strengthen balance sheet
. Central Bank to sell 4 % stake to Life Insurance Corporation
. Tata Chemicals plans to raise up to Rs 10000 mn.
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
31-03-2014.
INFORMATION DENIED
MANAGEMENT NON CO-OPERATIVE (91-22-24958400)
LOCATIONS
|
Registered Office : |
Sandoz House, 8th floor, Shivnagar Estate, Dr. Annie Besant Road, Worli,
Mumbai – 400018, Maharashtra, India |
|
Tel. No.: |
91-22-22722041 / 24958400 |
|
|
91-22-24973938 |
|
E-Mail : |
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Website : |
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Business Unit:
Pharma |
No. 214, Raheja Chambers12, Phone: 91-80-2558 8911 Fax: 91-80-2558 8701 Borivali Site c/o
SGS Imaging Private Limited C/101, Shantidwar, Phone: 91-22-28972421 Fax: 91-22-28280271 Chennai Site Phone: 91-44-2855 4157 Fax: 91-44-2855 4565 127, 166, Ravindranath Tagore MargSouth Tukoganj, Phone: 91-731-252 8370 Fax: 91-731-2528370 Kolkata Site 3rd. Floor, 4/1/1, Phone: 91-33-22901533 Fax: 91-33-2290 1561 B-1, Nirala NagarGround Floor, Phone: 91-522-2788189 Fax: 91-522-2788189 Phone: 91-11-2324 2291 Fax: 91-11-2324 2291 201, Palika Bhavan, Sector XIII, R.K. Puram, Phone: 91-11-24101306 Fax: 91-11-26874021 OTC Business 6th Floor, Phone: 91-22-56744400 Fax: 91-22-25861784 |
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|
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Business Unit:
Sandoz |
MIDC, Plot No. 8-A/2, 8-BT.T.C. Industrial Area, Kalwe BlockVillage-Digha, Opp. Thane-Belapur Road, Navi Mumbai - 400078, Maharashtra, India Phone: 91-22-2763 9000 Fax: 91-22-2763 9064 |
DIRECTORS
As on 31.03.2014
|
Name : |
Mr. C Snook |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Ranjit Shahani |
|
Designation : |
Vice Chairman and Managing Director |
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|
Name : |
Mr. Dinesh Charak |
|
Designation : |
Whole Time Director |
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|
Name : |
Mr. Jai Hiremath |
|
Designation : |
Director |
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|
|
|
Name : |
Dr. Rajendra Nath Mehrotra |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Girish Techandani |
|
Designation : |
Company Secretary and Compliance Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2014
|
Category of
Shareholder |
Total No. of
Shares |
% of Total No.
of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
|
|
|
|
23970597 |
75.00 |
|
|
23970597 |
75.00 |
|
Total shareholding of Promoter and Promoter Group (A) |
23970597 |
75.00 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
333803 |
1.04 |
|
|
4142 |
0.01 |
|
|
291961 |
0.91 |
|
|
496237 |
1.55 |
|
|
1126143 |
3.52 |
|
|
|
|
|
|
940761 |
2.94 |
|
|
|
|
|
|
5088766 |
15.92 |
|
|
642909 |
2.01 |
|
|
191621 |
0.60 |
|
|
190721 |
0.60 |
|
|
794 |
0.00 |
|
|
106 |
0.00 |
|
|
6864057 |
21.48 |
|
Total Public shareholding (B) |
7990200 |
25.00 |
|
Total (A)+(B) |
31960797 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
31960797 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in the business of Pharmaceuticals, Generics, Over-The-Counter (“OTC”) and Animal Health. |
GENERAL INFORMATION
|
No. of Employees : |
Not Divulged |
|
|
|
|
Bankers : |
¨ The Hongkong And Shanghai Banking Corporation Limited ¨ Allahabad Bank ¨ Grindlays Bank ¨ Industrial Development Bank Of India |
|
Banking Relations
: |
-- |
|
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|
Auditors : |
|
|
Name : |
Lovelock and Lewes Chartered Accountants |
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Enterprise where control exists Holding
Company : |
² Novartis AG, Basel, Switzerland |
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Fellow Subsidiaries
: |
² Alcon Laboratories (India) Private Limited, India ² Alcon Pharmaceuticals Limited, Switzerland ² Befico Limited, Bermuda ² Chiron Behring Vaccines Private Limited, India ² Novartis (Bangladesh) Limited, Bangladesh ² Novartis (Singapore) Pte Limited, Singapore ² Novartis (Taiwan) Company Limited, Taiwan ² Novartis (Thailand) Limited, Thailand ² Novartis Animal Health GmbH, Austria ² Novartis Animal Health Inc., Switzerland ² Novartis Animal Health US Inc., USA ² Novartis Asia Pacific Pharmaceuticals Pte. Limited, Singapore ² Novartis Consumer Health Inc., USA ² Novartis Consumer Health SA, Switzerland ² Novartis Healthcare Private Limited, India ² Novartis Holding AG, Switzerland ² Novartis International AG, Switzerland ² Novartis Pharma AG, Switzerland ² Novartis Pharma GmbH, Germany ² Novartis Pharma Services AG, Switzerland ² Novartis Pharmaceuticals (HK) Limited, Hong Kong ² Novartis Pharmaceuticals Australia Pty Limited, Australia ² Novartis Pharmaceuticals Corporation Inc., USA ² Novartis South Africa (Pty) Ltd., South Africa ² Novartis Vaccines and Diagnostics Inc., USA ² PT Novartis Indonesia, Indonesia ² Sandoz Private Limited, India ² Shanghai Novartis Animal Health Company Limited, China |
CAPITAL STRUCTURE
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
64000000 |
Equity Shares |
Rs.5/- each |
Rs.320.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
31960797 |
Equity Shares |
Rs.5/- each |
Rs.159.800 Millions |
|
|
|
|
|
(a) Reconciliation of the number of shares
|
Particulars |
No. of
Shares |
Rs. In Millions |
|
Number of shares outstanding as at the beginning of the year |
31960797 |
159.800 |
|
Number of shares outstanding as at the end of the year |
31960797 |
159.800 |
(b) The company has only one class of shares i.e. Equity Shares having a face value of ` 5 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.
(c) Of the above, 23,970,597 (Previous year – 24,424,802) shares are held by Novartis AG, Basel, Switzerland, the holding company.
(d) Shareholder holding more than 5% shares as at the Balance Sheet date
|
Particulars |
31.03.2014 |
|
|
|
No. of Shares |
% of Holding |
|
Novartis AG, Basel, Switzerland |
23970597 |
75.00% |
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders'
Funds |
|
|
|
|
(a) Share Capital |
159.800 |
159.800 |
159.800 |
|
(b) Reserves & Surplus |
9453.700 |
8842.300 |
8018.900 |
|
(c) Money
received against share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2)
Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
9613.500 |
9002.100 |
8178.700 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
0.000 |
0.000 |
1.400 |
|
(b) Deferred tax liabilities (Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term liabilities |
38.800 |
37.800 |
38.700 |
|
(d) long-term provisions |
247.200 |
249.700 |
187.600 |
|
Total Non-current Liabilities (3) |
286.000 |
287.500 |
227.700 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
0.000 |
0.000 |
0.000 |
|
(b) Trade payables |
1124.300 |
1195.900 |
979.100 |
|
(c) Other current
liabilities |
426.700 |
406.900 |
411.200 |
|
(d) Short-term provisions |
562.500 |
519.400 |
540.200 |
|
Total Current Liabilities (4) |
2113.500 |
2122.200 |
1930.500 |
|
|
|
|
|
|
TOTAL |
12013.000 |
11411.800 |
10336.900 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
78.700 |
99.400 |
100.500 |
|
(ii) Intangible Assets |
0.000 |
0.200 |
0.600 |
|
(iii) Capital
work-in-progress |
0.000 |
2.700 |
1.000 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
0.300 |
0.300 |
0.300 |
|
(c) Deferred tax assets (net) |
182.100 |
162.100 |
172.600 |
|
(d) Long-term Loan and Advances |
1140.200 |
810.900 |
711.400 |
|
(e) Other Non-current assets |
1.300 |
0.900 |
23.900 |
|
Total Non-Current Assets |
1402.600 |
1076.500 |
1010.300 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
1035.900 |
1101.500 |
790.100 |
|
(c) Trade receivables |
774.000 |
824.400 |
699.500 |
|
(d) Cash and cash
equivalents |
168.100 |
393.000 |
828.900 |
|
(e) Short-term loans and
advances |
8630.100 |
7971.100 |
6997.600 |
|
(f) Other current assets |
2.300 |
45.300 |
10.500 |
|
Total Current Assets |
10610.400 |
10335.300 |
9326.600 |
|
|
|
|
|
|
TOTAL |
12013.000 |
11411.800 |
10336.900 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
8622.300 |
9033.600 |
8442.900 |
|
|
|
Other Income |
951.200 |
831.900 |
840.100 |
|
|
|
TOTAL |
9573.500 |
9865.500 |
9283.000 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
337.300 |
403.600 |
313.900 |
|
|
|
Purchases of Stock-in-Trade |
3530.300 |
3579.300 |
3023.800 |
|
|
|
Changes in inventories of finished goods, work-in-progress
and Stock-in-Trade |
63.100 |
(266.400) |
(222.900) |
|
|
|
Employees benefits expense |
1741.900 |
1623.000 |
1376.800 |
|
|
|
Other expenses |
2962.700 |
2793.700 |
2512.400 |
|
|
|
TOTAL |
8635.300 |
8133.200 |
7004.000 |
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION |
938.200 |
1732.300 |
2279.000 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
2.700 |
2.200 |
5.400 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION |
935.500 |
1730.100 |
2273.600 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
36.500 |
35.900 |
26.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX |
899.000 |
1694.200 |
2246.900 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
(86.300) |
496.900 |
726.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX |
985.300 |
1197.300 |
1520.200 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
5237.600 |
4533.900 |
3537.100 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
98.500 |
119.700 |
152.000 |
|
|
|
Dividend |
319.600 |
319.600 |
319.600 |
|
|
|
Tax on Dividend |
54.300 |
54.300 |
51.800 |
|
|
BALANCE CARRIED
TO THE B/S |
5750.500 |
5237.600 |
4533.900 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports (excluding exports to Nepal) |
79.100 |
50.200 |
45.100 |
|
|
|
Sale of Services |
42.200 |
29.000 |
14.200 |
|
|
|
Freight and Insurance |
4.700 |
4.800 |
2.700 |
|
|
|
Expenses recharged to Other Companies |
17.500 |
40.600 |
23.500 |
|
|
TOTAL EARNINGS |
143.500 |
124.600 |
85.500 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
179.000 |
168.300 |
183.500 |
|
|
|
Stock in trade |
1697.800 |
1581.000 |
1312.800 |
|
|
TOTAL IMPORTS |
1876.800 |
1749.300 |
1496.300 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
30.83 |
37.46 |
47.56 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2011 |
|
PAT / Total Income |
(%) |
10.29 |
12.14 |
16.38 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.43 |
18.75 |
26.61 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
7.60 |
15.06 |
22.11 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.09 |
0.19 |
0.27 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
5.02 |
4.87 |
4.83 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
159.800 |
159.800 |
159.800 |
|
Reserves & Surplus |
8018.900 |
8842.300 |
9453.700 |
|
Net
worth |
8178.700 |
9002.100 |
9613.500 |
|
|
|
|
|
|
long-term borrowings |
1.400 |
0.000 |
0.000 |
|
Short term borrowings |
0.000 |
0.000 |
0.000 |
|
Total
borrowings |
1.400 |
0.000 |
0.000 |
|
Debt/Equity
ratio |
0.000 |
0.000 |
0.000 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
8442.900 |
9033.600 |
8622.300 |
|
|
|
6.996 |
-4.553 |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
8442.900 |
9033.600 |
8622.300 |
|
Profit |
1520.200 |
1197.300 |
985.300 |
|
|
18.01% |
13.25% |
11.43% |
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 |
No |
|
8] |
No. of employees |
No |
|
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 |
Yes |
|
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] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN 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 |
LITIGATION DETAILS
|
HIGH COURT OF
BOMBAY |
|
CASE DETAILS BENCH: BOMBAY |
|
Presentation
Date:- 11.03.2014 |
|
Lodging No.:- ITXAL/669/ 2014
Filing Date:- 11.03.2014 |
|
Petitioner: COMMISSIONER OF INCOME TAX 7-
Respondent: M/S NOVARTIS INDIA LIMITED Petn. Adv : SHEHNAZ (SHEROO) VISPY BHARUCHA District: MUMBAI |
|
Bench: SINGLE Status: Pre-Admission
Category: TAX APPEAL Last Date: 17.07.2014 Stage: FOR REJECTION
(ORIGINAL SIDE MATTERS) Last Coram: REGISTRAR(OS)/PROTHONOTARY
AND SR. MASTER |
|
Act: Income Tax Act, 1961 UNDER SECTION: 260A |
INDEX OF CHARGES
|
S.No. |
Charge ID |
Date of Charge Creation/Modification
|
Charge amount
secured |
Charge Holder |
Address |
Service Request
Number (SRN) |
|
1 |
90232124 |
12/04/1999 |
1,000,000,000.00 |
BANQUE NATIONALE DE PARIS |
62; HOMJI STEET, MUMBAI, Maharashtra - 400001, INDIA |
- |
|
2 |
90229347 |
02/05/1998 |
50,000,000.00 |
THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD. |
52/60; MAHATMA GANDHI ROAD, FORT, BOMBAY, Maharashtra - 400001, INDIA |
- |
|
3 |
90228667 |
21/07/1993 |
450,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
4 |
90230751 |
12/02/1997 * |
450,000,000.00 |
ALLAHABAD BANK |
APEEJAY HOUSE, DINSHAW WACHA ROAD, BOMBAY, Maharashtra - 400020, INDIA
|
- |
|
5 |
90228548 |
28/05/1992 |
380,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
6 |
90230703 |
26/03/1992 |
50,000,000.00 |
INDUSTRIAL DEVELOPMENT BANK OF INDIA |
IDBI TOWER, CUFFE PARADE, BOMBAY, Maharashtra - 400005, INDIA |
- |
|
7 |
90228501 |
24/07/1992 * |
100,000,000.00 |
THE INDUSTRIAL CREDIT AND INVESTMENT CORPN. OF INDIA LTD. |
163; BACKBAY RECLAMATION, NARIMAN POINT, BOMBAY, |
- |
|
8 |
90230694 |
27/09/1994 * |
100,000,000.00 |
THE INDUSTRIAL CREDIT AND INVESTMENT CORPN. OF INDIA LTD. |
163; BACKBAY RECLAMATION, NARIMAN POINT, BOMBAY, |
- |
|
9 |
90228409 |
09/05/1991 |
325,000,000.00 |
NATIONALE DE PARIS FRENCH BANK BUILDING |
HOMJI STREET, BOMBAY, Maharashtra - 400001, INDIA |
- |
|
10 |
90228106 |
30/06/1989 * |
112,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
11 |
90230554 |
21/08/1990 * |
112,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
12 |
90227698 |
24/11/1987 * |
112,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
13 |
90227632 |
17/08/1982 |
2,000,000.00 |
GRINDLAYS BANK |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400023, INDIA |
- |
|
14 |
90227549 |
25/06/1980 |
5,000,000.00 |
CITI BANK N. A. |
293; DR. D. N. ROAD, BOMBAY, Maharashtra - 400001, |
- |
|
15 |
90227281 |
30/11/1970 |
20,000,000.00 |
THE BANK OF AMERICA NATIONAL TRUST AND SAVINGA ASS |
18; BRUSCE STREET, FORT, BOMBAY, Maharashtra - 400001, INDIA |
- |
|
16 |
90227136 |
19/01/1961 |
11,000,000.00 |
THE NATIONAL & GRINDLAYS BANK LTD. |
MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400001, INDIA |
- |
|
17 |
90227132 |
10/05/1960 |
8,000,000.00 |
NATIONAL & GRINDLYAS BANK LTD. |
MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400001, |
- |
|
18 |
90227116 |
02/09/1958 |
6,500,000.00 |
NATIONAL OVERSEAS & GRINDLAYS BANK LTD. |
MAHATMA GANDHI ROAD, BOMBAY, Maharashtra - 400001, |
- |
|
19 |
90232393 |
12/09/1947 |
2,500,000.00 |
THE NATIONAL BANK INDIA LTD. |
90; MAHATMA GANDHI ROAD, BOMBAY, Maharashtra, INDIA |
- |
|
20 |
90232391 |
16/02/1942 |
500,000.00 |
THE NATIONAL BANK OF INDIA LTD. |
BOMBAY, MUMBAI, Maharashtra - 400001, INDIA |
- |
|
21 |
90230132 |
06/08/1940 |
300,000.00 |
THE NATIONAL BANK OF INDIA LTD. |
BOMBAY, MUMBAI, Maharashtra - 400001, INDIA |
- |
* Date of charge modification
BUSINESS SEGMENTS
The businesses comprise Pharmaceuticals, Generics, OTC and Animal Health. The operational performance of the business is reviewed by the management based on such segmentation.
(i) The Pharmaceuticals segment comprises a portfolio of prescription medicines which are provided to patients through healthcare professionals. These are mainly products of original research of the Novartis Group.
(ii) The Generics segment comprises Retail Generics products. The business unit primarily focuses on the therapeutic segments such as Anti-TB, Anti-DUB (Gynaecology), Antihistamines, Antibiotics, Anti-ulcerants, Anti-diabetes and Cardiovascular.
(iii) The Animal Health segment has a presence primarily in the cattle and poultry market segments.
(iv) The OTC segment is mainly in the VMS (vitamins, minerals and nutritional supplements) and CoCoA (cough, cold and allergy) market segments.
INDUSTRY STRUCTURE
AND DEVELOPMENTS
PHARMACEUTICALS
AND GENERICS
The Indian Economy
is the 5th fastest growing economy in the world (Euromonitor) and is poised to
be the 3rd largest economy by 2040 (PwC) with a rapidly growing
middle class. As economies develop, there is increasing healthcare awareness
and hence greater spends. The market drivers include a growing educated and
middle class, rising income levels, rising life expectancy, increase in chronic
and lifestyle related diseases, increased penetration of health insurance and
of class II – VI and rural markets, increased government spending on
healthcare, rapid growth of the private sector and speciality hospitals among
others.
The year 2013
represented a marked change in the operational dynamics of the Indian
Pharmaceuticals Market, (IPM). Though the market always had some form of price
controls, the scope and basis changed following implementation of the Drug
Price Control Order (DPCO) 2013 with 348 drugs being brought under the ambit of
price control. This had a major negative impact on the industry and has
impacted short term growth rates.
Valued at around `
804 billion (IMS, MAT March 2014) the IPM is a highly fragmented market with a
large number of players spread across therapy segments. It continues to be a
highly competitive market with a large number of brands per therapeutic area.
Globally, the 3rd largest by volume and 13th largest by value, the IPM is
expected to grow at a 12.2 per cent CAGR over the next 4 years.
For a science
based Industry like Pharmaceuticals, non-recognition of patents and compulsory
licensing have been a major dampener in the recent past. 2013-14 continued to
witness a slump in GDP growth which will have a negative impact on the near
term growth prospects of the IPM.
OTC
Valued at ` 136.2
billion, the OTC market in India is the 13th largest market in the world and
has grown at 5.8 per cent in 2013 (Nicholas Hall DB 2013). Lack of regulatory
guidelines for the OTC sector together with lower GDP growth are expected to
impact development of this market in the short to medium term.
ANIMAL HEALTH
The Animal Health
industry is estimated to have grown by around 5 to 6 per cent during this financial
year. The fastest growing segment in the past 5 years has been the poultry
layer industry. Growing at a steady pace, the dairy industry in India continues
to be the world’s largest. The key growth factors helping the Animal Health
sector are increase in disposable income, domestic demand and exports together
with the dairy market getting increasingly organized.
PERFORMANCE
Net Revenue from
Operations for the year ended March 31, 2014 was at Rs. 8622.300 millions
representing a decline of 4.6 per cent over the previous year. Profit before
tax for the year was at Rs. 899.00
millions representing a decline of 46.9 per cent over the previous year.
Decline in profit was mainly on account of substantial reduction in selling
prices due to the new Drug Price Control Order (DPCO) 2013, and depreciation in
the value of the rupee resulting in higher cost of imports. After providing for
income tax credit of Rs. 86.300 millions, profit after tax was Rs. 985.300
millions.
OUTLOOK
PHARMACEUTICALS
AND GENERICS
A large and
growing population with low healthcare penetration presents a huge opportunity
for the Pharmaceutical Industry.
Changing
demographics with increasing urbanization is leading to a rise in chronic and
lifestyle diseases which could drive growth. Increasing healthcare awareness
and growing income levels is likely to result in increased spend on medicines
and healthcare products. Notwithstanding the strong long-term potential of the
IPM given the several factors in favour, investments in the sector and
profitability could still be impeded in the short to medium term given the
current economic environment. Subsequent to price cuts (DPCO 2013),
profitability will continue to be negatively impacted in the short-to-medium
term. The Company is currently working on initiatives to partially offset the
severe negative impact of the price cuts and will continue to drive operational
excellence to increase productivity and commercial responsiveness.
OTC
The overall future
of the OTC market looks promising provided it is left out of the ambit of price
controls. A growing economy, higher disposable incomes, rapidly increasing
middle class and greater health awareness are likely to translate in to greater
spend on OTC products.
ANIMAL HEALTH
The Animal Health
sector is dependent on the monsoon for adequate availability of feed
ingredients to manufacture poultry and cattle feed. The industry is on a growth
trajectory which is likely to continue barring any unforeseen developments.
CONTINGENT
LIABILITIES:
|
PARTICULARS |
31.03.2014 (Rs.
In Millions) |
31.03.2013 (Rs.
In Millions) |
|
Income-tax matters |
|
|
|
(i) Matters decided in favour of the company but disputed further by the income-tax authorities |
76.400 |
301.900 |
|
(ii) Matters decided against the company in respect of which the company has preferred an appeal |
118.500 |
119.900 |
|
Sales tax matters |
463.400 |
287.500 |
|
Service tax matters |
4.500 |
4.500 |
|
Excise matters |
3.000 |
3.000 |
|
Claims from third party manufacturers in respect of Excise matters |
38.000 |
36.300 |
|
Claims from Consumers |
0.200 |
0.200 |
|
Others |
2.100 |
2.100 |
NOTE:
Future cash outflows in respect of the above are determinable only on receipt of judgements/decisions pending with various authorities/forums and/or final outcome of the matters.
FIXED ASSETS
œ Buildings
œ Plant and
Equipment
œ
Furniture and Fixtures
œ
Vehicles
œ
Office Equipment
œ
Leasehold Improvements
œ
Trade Marks
UNAUDITED
RESULTS FOR THE QUARTER AND ENDED ON 30TH JUNE, 2014
(Rs. In Millions)
|
|
|
Particulars |
Quarter
ended 30.06.2014 |
|
1 |
Income from Operations |
|
|
|
|
a) Net Sales/Income from Operations (net of excise duty) |
2020.600 |
|
|
|
b) Other Operating Income |
66.900 |
|
|
|
Total Income from Operations (Net) |
2087.500 |
|
|
2 |
Expenses |
|
|
|
|
a) |
Cost of Materials consumed |
47.400 |
|
|
b) |
Purchase of stock in-trade |
896.000 |
|
|
c) |
Changes in inventories of finished goods, work-in-progress and
stock-in-trade |
(58.900) |
|
|
d) |
Employee benefit expenses |
483.000 |
|
|
e) |
Depreciation and amortization expense |
8.800 |
|
|
f) |
Other expenses |
751.400 |
|
|
Total Expenses |
2127.700 |
|
|
3 |
|
Profit /(Loss) from
operations before other income, finance costs and exceptional items (1-2) |
(40.200) |
|
4 |
Other Income |
|
|
|
5 |
|
Profit /(Loss) from
ordinary activities before finance costs and exceptional items (3+4) |
248.700 |
|
6 |
Finance Costs |
208.500 |
|
|
7 |
|
Profit /(Loss) from
ordinary activities after finance costs but before exceptional items (5-6) |
0.500 |
|
8 |
Profit /(Loss) from ordinary activities before tax |
208.000 |
|
|
9 |
Tax Expense |
64.900 |
|
|
10 |
Net Profit /(Loss) for the period (11-12) |
143.100 |
|
|
11 |
Paid up equity share
capital (Eq. shares of Rs.10/- each) |
159.800 |
|
|
12 |
Reserve excluding
revaluation reserves |
|
|
|
|
|
Earnings per share
(before/after extraordinary items) of
Rs.10/- each |
|
|
|
|
Basic and Diluted |
4.48 |
|
|
|
|
|
|
A |
|
PARTICULARS OF
SHAREHOLDING |
|
|
1 |
|
Public Shareholding |
|
|
|
|
- No. of Shares |
7990200 |
|
|
|
- Percentage of
Shareholding |
25.00% |
|
2 |
|
Promoters and promoter group shareholding |
|
|
|
|
a) Pledged/Encumbered |
|
|
|
|
- Number of shares |
-- |
|
|
|
- Percentage of shares ( as
a % of the total shareholding of the promoter and promoter group) |
-- |
|
|
|
- Percentage of shares
(as a % of the total share capital of the Company) |
-- |
|
|
|
b) Non- encumbered |
|
|
|
|
- Number of shares |
23970597 |
|
|
|
- Percentage of shares (
as a % of the total shareholding of the promoter and promoter group) |
100.00% |
|
|
|
- Percentage of shares
(as a % of the total share capital of the Company) |
75.00% |
|
|
Particulars |
Quarter
ended 30.06.2014 |
|
|
B |
|
Investor Complaints |
|
|
|
|
Pending at the beginning
of the quarter |
-- |
|
|
|
Received during the
quarter |
-- |
|
|
|
Disposed during the
quarter |
-- |
|
|
|
Remaining unresolved at the
end of the quarter |
-- |
SEGMENTWISE
REVENUE, RESULTS AND CAPITAL EMPLOYED
|
|
Particulars |
Quarter
ended 30.06.2014 |
|
1. |
Segment Revenue (Sales and Other Operating
Income) |
|
|
a) |
Pharmaceuticals |
1506.100 |
|
b) |
Generics |
122.900 |
|
c) |
OTC |
228.300 |
|
d) |
Anirnal Health |
230.200 |
|
|
Total Income from operation |
2087.500 |
|
|
|
|
|
2. |
Segment Results: |
|
|
a) |
Pharmaceuticals |
37.500 |
|
b) |
Generics |
20.200 |
|
c) |
OTC |
(40.200) |
|
d) |
Anirnal Health |
9.300 |
|
|
TOTAL |
26.800 |
|
|
Less: Financial Cost |
(0.500) |
|
|
Other
unallocable Expenditure |
(59.700) |
|
|
Other
unallocable Income |
241.400 |
|
|
Total Profit/
Loss –before tax |
208.000 |
|
|
|
|
|
3. |
Capital Employed: |
|
|
a) |
Pharmaceuticals |
348.000 |
|
b) |
Generics |
22.500 |
|
c) |
OTC |
4.000 |
|
d) |
Anirnal Health |
376.000 |
|
|
TOTAL |
750.500 |
|
|
Add: unallocable Corporate Assets less unallocable Corporate Liabilities |
9006.100 |
|
|
Total Capital Employed |
9756.600 |
NOTE:
1. The above results were reviewed by the Audit Committee at Its meeting held on 25th July, 2014 and approved at the meeting of the Board of Directors held on that date.
2. The results for the quarter ended 30th June, 2014 have been subjected to limited review by the statutory auditors of the company.
3. Transactions with GSK and Lilly:
On 22nd April 2014, No AG, Basel, Switzerland (Novartis) entered into the following agreements with GlaxoSmithKline plc, UK (GSK) and Ell Lilly and Company, USA (Lilly).
(a) Combination of Novartis OTC with GSK Consumer Healthcare in a Joint Venture
Novartis and G5K have agreed to create a consumer healthcare business through a joint venture between Novartis OTC and GSK Consumer Healthcare. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture's Board. The transaction with GSK Is subject to approval by G5K shareholders and other closing conditions, including anti-trust approvals. The transaction is expected to close during the first half of 2015.
(b) Divestment of Novartis Animal Health business to Lilly
In a separate transaction, Novartis has agreed to divest its Animal Health Business to Lilly. The transaction is subject to closing conditions, including anti-trust approvals and is expected to close by the end of the first quarter of 2015.
The company will evaluate and take necessary approvals as may be required under applicable laws and regulations In India at the aappropriate time.
4. Figures for the prior periods have been regrouped where necessary.
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] 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.60.67 |
|
|
1 |
Rs.100.81 |
|
Euro |
1 |
Rs.80.72 |
INFORMATION DETAILS
|
Information Gathered
by : |
NYA |
|
|
|
|
Analysis Done by
: |
DIV |
|
|
|
|
Report Prepared
by : |
ANK |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--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 |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
62 |
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.