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|
MIRA INFORM REPORT
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Report No. : |
501281 |
|
Report Date : |
02.04.2018 |
IDENTIFICATION DETAILS
|
Name : |
NATCO PHARMA LIMITED |
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|
|
|
Registered
Office : |
Natco House, Road No.2, Banjara Hills, Hyderabad – 500034, Telangana |
|
Tel. No.: |
91-40-23710575 |
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|
Country : |
India |
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|
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Financials (as
on) : |
31.03.2017 |
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Date of
Incorporation : |
19.09.1981 |
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Com. Reg. No.: |
36-003201 |
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Capital
Investment / Paid-up Capital : |
INR 349.000 Million |
|
|
|
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CIN No.: [Company Identification
No.] |
L24230TG1981PLC003201 |
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|
|
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IEC No.: [Import-Export Code No.] |
0988004542 |
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|
|
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TAN No.: [Tax Deduction &
Collection Account No.] |
Not Available |
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PAN No.: [Permanent Account No.] |
AAACN6927A |
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GSTN : [Goods & Service Tax
Registration No.] |
Not Divulged |
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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
: |
The Company is engaged in the business of pharmaceuticals which comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations. (Registered Activity) |
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No. of Employees
: |
4411 (Approximately) |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
|
MIRA’s Rating : |
A+ |
|
Credit Rating |
Explanation |
Rating Comments |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
Maximum Credit Limit : |
USD 48560000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject was incorporated in the year 1981. It is involved in manufacturing
of active pharmaceuticals ingredients and finished dosage formulations. As per the quarterly results of December 2017, the company has
reported sales turnover of INR 5403.000 Million and has gained fair
profitability margin. As per the financial record of 2017, the company has achieved a decent
growth in its revenue as compared to the previous year and has earned
satisfactory profitability margin of 24.71%. The company possesses sound financial profile marked by healthy
networth base adequate liquidity position and low debt balance sheet profile. Rating takes into consideration the company’s favourable earnings per
share (EPS) of INR 28.27 as against its face value (FV) of INR 2. The company has its share price trading at around INR 754.25 on BSE as
on March 29, 2018 as against the Face Value (FV) of INR 2. Trade relations are fair. Business is active. Payments are seems to be
regular and as per commitment. In view of aforesaid, the company can be considered good for normal 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
|
Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
|
Moderately High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
Long Term Loans (AA) |
|
Rating Explanation |
High degree of safety and very low credit risk. |
|
Date |
10.07.2017 |
|
Rating Agency Name |
ICRA |
|
Rating |
Short Term Loans (A1+) |
|
Rating Explanation |
Very strong degree of safety and carry lowest credit risk |
|
Date |
10.07.2017 |
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
31-03-2016.
BIFR (Board for Industrial & Financial Reconstruction) LISTING
STATUS
Subject’s name is not listed as a Sick Unit in
the publicly available BIFR (Board for Industrial & Financial
Reconstruction) list as of 02.04.2018
IBBI (Insolvency and Bankruptcy Board of India) LISTING STATUS
Subject’s name is not listed in the publicly
available IBBI (Insolvency and Bankruptcy Board of India) list as of report
date.
INFORMATION DENIED
MANAGEMENT NON-COOPERATIVE (Tel. No.: 91-40-23710575)
LOCATIONS
|
Registered/ Correspondence Office : |
Natco House, Road No.2, Banjara Hills, Hyderabad – 500034, Telangana,
India |
|
Tel. No.: |
91-40-23547532 |
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Fax No.: |
91-40-23548243/ 23545298 |
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E-Mail : |
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|
Website : |
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Factory 1 : |
Pharma Division Kothur Post, Kothur Mandal, Mahaboobnagar District - 509228,
Telangana, India |
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Tel. No.: |
91-8548-257289/257173/257406 |
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Fax. No: |
91-8548-257290 |
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|
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Factory 2 : |
Pharma Division-
Parenterals Vijayapuri North, Nagarjuna Sagar, Peddavura Mandal, Nalgonda District – 508202, Telangana, India |
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Tel. No.: |
91-8680-276661 |
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Fax. No: |
91-8680-276246 |
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Factory 3 : |
Chemical
Division Mekaguda, Nandigama Mandal, Rangareddy District, – 509228, Telangana, India |
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Tel. No.: |
91-8548-249493/249496 |
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Fax. No: |
91-8548-249491 |
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|
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Natco Research
Center / Factory 4 : |
Pharma Division B – 11, Industrial Estate, Sanathnagar, Hyderabad – 500018, Telangana,
India |
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Tel. No.: |
91-40-2371 0575 |
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Fax. No: |
91-40-2371 0578 |
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Factory 5 : |
Pharma Division Plot No.19, |
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Tel. No.: |
91-135-2699093/2699094/2698016 |
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Fax. No: |
91-135-2698979 |
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Factory 6 : |
Pharma Division Plot No.A3, UPSIDC, Selaqui Industrial Area, Dehradun – 248001, |
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Tel. No.: |
91-135-2699877/2699878/2698020 |
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Fax. No: |
91-135-2698210 |
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Factory 7 : |
Chemical
Division No.74/B, |
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Tel. No.: |
91-44-29011779/29000434 |
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Factory 8 : |
Pharma Division DAG
No. – 749, 750, Kokjhar Village, Revenue Circle – Mirza, Kamrup (Rural)
Guwahati District-781122, Assam, India |
|
Tel. No.: |
91-362-3230471/72/73 |
DIRECTORS
As on 31.03.2017
|
Name : |
Mr. Venkaiah Chowdary Nannapaneni |
|
Designation : |
Managing Director |
|
Address : |
Plot No 529, Road No.26, Jubilee Hills, Hyderabad-500033, Telangana, India |
|
Date of Appointment : |
01.04.2015 |
|
DIN No.: |
00183315 |
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Name : |
Mr. Rajeev Nannapaneni |
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Designation : |
Whole-time Director |
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Address : |
Plot No.529, Road No.26, Jubilee Hills, Hyderabad-500033, Telangana,
India |
|
Date of Appointment : |
01.06.2012 |
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DIN No.: |
00183872 |
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|
|
|
Name : |
Potluri Prasad Sivaramakrishna |
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Designation : |
Whole-time Director |
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Address : |
8-1-405/A/12, QQ Tombs Dream Valley, Shaikpet, Hyderabad-500008,
Telangana, India |
|
Date of Appointment : |
12.11.2014 |
|
DIN No.: |
07011140 |
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|
|
|
Name : |
Mr. Lingarao Donthineni |
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Designation : |
Whole-time Director |
|
Address : |
Flat No 207, Mount Meru Apartments, Road No. 5, Banjara Hills,
Hyderabad - 500034, Telangana, India |
|
Date of Appointment : |
11.02.2015 |
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DIN No.: |
07088404 |
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|
|
|
Name : |
Mr. Sreerammurthy Gubbala |
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Designation : |
Director |
|
Address : |
Flat No. # 304, Sarada Apartment, Plot II, 6-3-596/77/12, Road No. 1,
Naveen Nagar, Banjara Hills, Hyderabad-500034, Telangana, India |
|
Date of Appointment : |
31.01.2000 |
|
DIN No.: |
00122454 |
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|
|
|
Name : |
Mr. Govinda Prasad Dasu |
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Designation : |
Director |
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Address : |
A - 8, Madhura Nagar Ameerpet, Hyderabad – 500038, Telangana, India |
|
Date of Appointment : |
13.02.2014 |
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DIN No.: |
00160408 |
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|
|
Name : |
Mr. Vivek Chhachhi |
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Designation : |
Director |
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Address : |
C/O, 409, Magnolias, Golf Course Road, DLF Phase 5, Sector - 42,
Gurugram – 122009, Haryana, India |
|
Date of Appointment : |
07.01.2014 |
|
DIN No.: |
00496620 |
|
|
|
|
Name : |
Mr. Umamaheshwarrao Naidu Madireddi |
|
Designation : |
Director |
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Address : |
13-1-241, Mothi Nagar, Mothi Nagar, Bala Nagar, Hyderabad-500018,
Telangana, India |
|
Date of Appointment : |
11.02.2015 |
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DIN No.: |
05111014 |
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|
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Name : |
Mr. Thallapaka Venkateswara Rao |
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Designation : |
Director |
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Address : |
Flat No 803, Silverlake Terrace, Apartment No. 167, Richmond Road,
Bengaluru-560025, Karnataka, India |
|
Date of Appointment : |
25.08.2014 |
|
DIN No.: |
05273533 |
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|
|
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Name : |
Mrs. Leela Digumarti |
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Designation : |
Director |
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Address : |
Plot No. 7 55 43 6, Padmalaya Doctors Colony, Seetammadhara,
Visakhapatnam-530013, Andhra Pradesh, India |
|
Date of Appointment : |
22.09.2014 |
|
DIN No.: |
06980440 |
KEY EXECUTIVES
|
Name : |
Mr. Adinarayana Madineedi |
|
Designation : |
Company Secretary |
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Address : |
12-13-274/1, Ground Floor, Seshodaya Apartment, Street No. 2, Lane No 8, Tarnaka, Secunderabad-500017, Telangana, India |
|
Date of Appointment : |
14.11.1994 |
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PAN No.: |
ACIPM3455B |
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|
|
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Name : |
Mrs. Veera Venkata Narasimha Appa Rao Sannidhanam |
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Designation : |
Chief Finance Officer |
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Address : |
Plot No 45, Tirumala Nagar, H. No 1-3-40, Kanajiguda, Secunderabad-500015, Telangana, India |
|
Date of Appointment : |
11.02.2016 |
|
PAN No.: |
AUJPS5964Q |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2017
|
Category of
shareholder |
No. of fully
paid up equity shares held |
Shareholding as a
% of total no. of shares (calculated as per SCRR, 1957)As a % of |
|
|
(A) Promoter and Promoter
Group |
89225320 |
48.36 |
|
|
(B) Public |
95259980 |
51.64 |
|
|
Grand
Total |
184485300 |
100.00 |
Statement showing
shareholding pattern of the Promoter and Promoter Group
|
Category of
shareholder |
No. of fully
paid up equity shares held |
Shareholding as a
% of total no. of shares (calculated as per SCRR, 1957)As a % of |
Number of Locked
in shares |
||
|
No. |
As a % of total
Shares held |
||||
|
A1) Indian |
0.00 |
0.00 |
|||
|
Individuals/Hindu
undivided Family |
49069560 |
26.60 |
621165 |
1.27 |
|
|
VENKAIAH CHOWDARY
NANNAPANENI HUF |
5440045 |
2.95 |
0.00 |
||
|
KANTAMANI RATNA KUMAR |
76000 |
0.04 |
0.00 |
||
|
DURGA DEVI NANNAPANENI |
1128760 |
0.61 |
0.00 |
||
|
V C NANNAPANENI |
35311270 |
19.14 |
617625 |
1.75 |
|
|
RAJEEV NANNAPANENI |
1497975 |
0.81 |
3125 |
0.21 |
|
|
RAMAKRISHNA RAO
NANNAPANENI |
746410 |
0.40 |
0.00 |
||
|
NEELIMA SITA NANNAPANENI |
182960 |
0.10 |
0.00 |
||
|
DEVENDRANTH ALAPATI |
15000 |
0.01 |
0.00 |
||
|
BAPANNA ALAPATI |
18300 |
0.01 |
0.00 |
||
|
BAPINEEDU TUMMALA |
415 |
0.00 |
415 |
100.00 |
|
|
TUMMALA JANSI |
247100 |
0.13 |
0.00 |
||
|
T ANANDA BABU |
473205 |
0.26 |
0.00 |
||
|
VIDYADHARI TUMMALA |
442200 |
0.24 |
0.00 |
||
|
T ANILA |
629920 |
0.34 |
0.00 |
||
|
VENKATA SATYA SWATHI
KANTAMANI |
2860000 |
1.55 |
0.00 |
||
|
Any Other (specify) |
37717220 |
20.44 |
187500 |
0.50 |
|
|
NATSOFT INFORMATION
SYSTEMS PRIVATE LIMITED |
15767500 |
8.55 |
0.00 |
||
|
TIME CAP PHARMA LABS
LIMITED |
17157220 |
9.30 |
93750 |
0.55 |
|
|
NATCO AQUA LIMITED |
16000 |
0.01 |
0.00 |
||
|
NDL INFRATECH PRIVATE
LIMITED |
93750 |
0.05 |
93750 |
100.00 |
|
|
Vistra ITCL India Limited |
4082750 |
2.21 |
0.00 |
||
|
IL & FS TRUST COMPANY
LIMITED |
600000 |
0.33 |
0.00 |
||
|
Sub Total A1 |
86786780 |
47.04 |
808665 |
0.93 |
|
|
A2) Foreign |
0.00 |
0.00 |
|||
|
Individuals (Non Resident
Individuals/ Foreign Individuals) |
2438540 |
1.32 |
0.00 |
||
|
DURGADEVI NANNAPANENI |
2410340 |
1.31 |
0.00 |
||
|
RAJEEV N |
28200 |
0.02 |
0.00 |
||
|
Sub Total A2 |
2438540 |
1.32 |
0.00 |
||
|
A=A1+A2 |
89225320 |
48.36 |
808665 |
0.91 |
|
Statement showing
shareholding pattern of the Public shareholder
|
Category &
Name of the Shareholders |
No. of fully
paid up equity shares held |
Shareholding %
calculated as per SCRR, 1957 As a % of |
|
|
B1) Institutions |
0 |
0.00 |
|
|
Mutual Funds/ |
9139546 |
4.95 |
|
|
Alternate Investment
Funds |
111850 |
0.06 |
|
|
Foreign Portfolio
Investors |
45878323 |
24.87 |
|
|
NOMURA INDIA INVESTMENT
FUND MOTHER FUND |
4334700 |
2.35 |
|
|
CX SECURITIES LIMITED |
4494975 |
2.44 |
|
|
EM RESURGENT FUND |
1900000 |
1.03 |
|
|
STEADVIEW CAPITAL
MAURITIUS LIMITED |
2625581 |
1.42 |
|
|
PLENTY PRIVATE EQUITY FII
I LIMITED |
3166178 |
1.72 |
|
|
STICHTING DEPOSITARY APG
EMERGING MARKETS EQUITY POOL |
1924105 |
1.04 |
|
|
Financial Institutions/
Banks |
486276 |
0.26 |
|
|
Sub Total B1 |
55615995 |
30.15 |
|
|
B2) Central Government/
State Government(s)/ President of India |
0 |
0.00 |
|
|
B3) Non-Institutions |
0 |
0.00 |
|
|
Individual share capital
upto INR 0.200 Million |
20320716 |
11.01 |
|
|
Individual share capital in
excess of INR 0.200 Million |
11403519 |
6.18 |
|
|
DILIP.S.SHANGHVI |
5750000 |
3.12 |
|
|
Any Other (specify) |
7919750 |
4.29 |
|
|
IEPF AUTHORITY |
625801 |
0.34 |
|
|
Unclaimed or Suspense or
Escrow Account |
238600 |
0.13 |
|
|
Bodies Corporate |
5524552 |
2.99 |
|
|
Clearing Members |
474702 |
0.26 |
|
|
Trusts |
90837 |
0.05 |
|
|
NRI |
965258 |
0.52 |
|
|
Sub Total B3 |
39643985 |
21.49 |
|
|
B=B1+B2+B3 |
95259980 |
51.64 |
BUSINESS DETAILS
|
Line of Business : |
The Company is engaged in the business of pharmaceuticals which comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations. (Registered Activity) |
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Products/ Services : |
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Brand Names : |
Not Available |
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Agencies Held : |
Not Available |
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Exports : |
Not Divulged |
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Imports : |
Not Divulged |
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||||
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Terms : |
Not Divulged |
PRODUCTION STATUS NOT AVAILABLE
GENERAL INFORMATION
|
Suppliers : |
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Customers : |
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No. of Employees : |
4411 (Approximately) |
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Bankers : |
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Facilities : |
Note: Working capital loans
represents cash credit, overdraft, commercial paper, bills purchased and discounted
with various banks and carry interest linked to the respective Bank’s base
lending rate/Marginal cost of lending rate and range from 1.00% per annum to
12.70% per annum (31 March 2016: 9.25% per annum to 13.25% per annum, 31
March 2015: 10% per annum to 14% per annum). Working capital loans are
secured by way of first charge on all the current assets of the Company. The
collateral security is joint pari passu first charge on the corporate office
and all fixed assets of Nagarjuna Sagar Unit apart from personal guarantees
of V. C. Nannapaneni, Chairman and Managing Director, Durga Devi Nannapaneni
and N. Ramakrishna Rao, relatives of Chairman and Managing Director. |
|
Statutory
Auditors
: |
|
|
Name : |
Walker Chandiok and
Company LLP Chartered Accountants |
|
Address : |
7th
Floor, Block III, White House Kundan Bagh, Begumpet, Hyderabad- 500016,
Telangana, India |
|
Tel. No.: |
91-40-66308200 |
|
Fax No.: |
91-40-66308230 |
|
|
|
|
Cost
Auditors |
|
|
Name : |
S.S. Zanwar and
Associates Cost Accountants |
|
Address : |
Flat
No 205, 3rd Floor, Reliance Krishna Apartment, Hill fort, Hyderabad-500004,
Telangana, India |
|
|
|
|
Secretarial Auditor |
|
|
Name : |
CS Balachandra Sunku |
|
Address : |
Abhaya, 6-3-609/140/1, Anand Nagar, Khairathabad,
Hyderabad- 500004, Telangana, India |
|
|
|
|
Memberships : |
Not Available |
|
|
|
|
Collaborators : |
Not Available |
|
|
|
|
Subsidiary Company
: |
|
|
|
|
|
Step-down
subsidiary company : |
NATCO Farma Do Brazil Ltda., Brazil |
|
|
|
|
Entities in which
KMP have control or have significant influence |
|
CAPITAL STRUCTURE
As on 31.03.2017
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity Shares |
INR 2/- each |
INR 400.000 Million |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
174307800 |
Equity Shares |
INR 2/- each |
INR 349.000
Million |
|
|
|
|
|
Reconciliation
of number of equity shares outstanding at the beginning and at the end of the
year
|
Equity
shares |
31 March 2017 |
|
|
Number |
Amount In Million |
|
|
Balance
at the beginning of the year |
174174245 |
348.000 |
|
Add:
Issued during the year |
133555 |
1.000 |
|
Balance
at the end of the year |
174307800 |
349.000 |
Rights,
preferences and restrictions attached to equity shares
The Company has only one
class of equity shares having a par value of `2 per share. Each holder of
equity shares is entitled to one vote per share. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing
general meeting. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive the remaining assets of the Company,
after distribution of all preferential amounts in proportion of their
shareholding.
The
Board of Directors have recommended two interim dividends of `0.75 and `6
during the current financial year.
Details
of shareholder holding more than 5% share capital
|
Name
of the equity shareholder |
31 March 2017 |
|
|
Number |
% holding |
|
|
V
C Nannapaneni* |
40736815 |
23.37% |
|
Time
Cap Pharma Labs Limited |
17157220 |
9.84% |
|
Natsoft
Information Systems Private Limited |
15767500 |
9.05% |
*including
shares held in the capacity of Karta of HUF aggregating to 5440045 (31 March 2016:
5,440,045, 31 March 2015: 5440045)
Shares
reserved for issue under options
The Company has instituted
the NATCO Employee Stock Option Plan ‘ESOP-2015’ and NATCO Employee Stock
Option Plan ‘ESOP-2016’
(“the Schemes”). The Schemes were formulated in accordance with the Securities
Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
issued by the Securities and Exchange Board of India (“SEBI”). Pursuant to the
terms of the Scheme, the Board of the Directors of the Company have granted
750000 options (post split) and 174330 (post split) to eligible employees on 12
August 2015 and 11 November 2016 respectively. The terms of the Scheme provide
that each option entitles the holder to one equity share of INR 2 each (post
split) and that the options can be settled only by way of issue of equity
shares. The options vest on an annual basis over a period of 5 years from the
date of grant and the options are entirely time-based with no performance
conditions.
During
the year ended 31 March 2017, the Company had incurred stock compensation cost
of INR 123 (31 March 2016: INR 97, 31 March 2015: INR Nil) in respect of ESOP
2015 and ESOP 2016 schemes.
The details of options are as follows :
|
EQUITY
SHARE CAPITAL (CONTINUED) |
31 March 2017 |
|
|
Number of shares |
Weighted average Exercise price |
|
|
Outstanding
at the beginning of the year |
750000 |
2 |
|
Granted
during the year |
174330 |
2 |
|
Forfeited
during the year |
-- |
-- |
|
Exercised
during the year |
133555 |
2 |
|
Expired
during the year |
-- |
-- |
|
Outstanding
at the end of the year |
790775 |
2 |
|
Exercisable
at the end of the year |
-- |
-- |
The weighted average share
price at the date of exercise for stock options exercised during the year was
INR 2 post split (31 March 2016: INR Nil; 31 March 2015: INR Nil). The stock
options outstanding as at 31 March 2017 had a weighted average exercise price
of INR 2 post split (31 March 2016: INR 2 post split; 31 March 2015: INR Nil),
and the weighted average remaining contractual life of unvested options is
29.41 months (31 March 2016: 25.13 months, 31 March 2015: Nil).
The fair value of options
was estimated at the date of grant using the Black-Scholes-Merton formula with
the following assumptions:
|
|
ESOP 2016 |
ESOP 2015 |
|
Risk-free
interest rate |
6.82% - 8.05% |
7.14% - 8.18% |
|
Expected
life |
1-5 years |
1-5 years |
|
Expected
volatility |
37.28%-43.76% |
40.59%- 49.91% |
|
Expected
dividend yield |
0.20% |
0.20% |
Details
of shares issued pursuant to contract without payment being received in cash
during the last 5 years, immediately preceding the balance sheet date:
|
PARTICULARS |
Number of shares |
|
1 April 2012 to 31 March 2017 |
|
|
Aggregate
number of equity shares allotted * |
2068040 |
*Equity
shares allotted pursuant to contract without payment being received in cash
comprise of:
During the year ended 31
March 2015, the Company has issued 808875 equity shares (post split) of INR 2
each, fully paidup at a premium of INR 238 per equity share (post split) to the
erstwhile shareholders of Natco Organic Limited (‘NOL’) in exchange of 19310000
equity shares of INR 10 each at face value held in NOL.
Balance equity shares
comprising of 1259165 (31 March 2016: 1125610; 31 March 2015: 1125610) (post
split) were allotted during the period of five years, on exercise of the
options granted under the employee stock option plan wherein part consideration
was received in the form of employee services.
Equity shares of the
Company with face value of INR 10 per share were sub-divided into 5 equity
shares of INR 2 each effective 30 November 2015. Consequently, in accordance
with Indian Accounting Standard (Ind AS) 33 - “Earnings Per Share”, the basic
and diluted earnings per share of the Company has been recomputed and disclosed
accordingly
FINANCIAL DATA
[all figures are
in INR Million]
ABRIDGED
BALANCE SHEET (STANDALONE)
|
SOURCES OF FUNDS |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
349.000 |
348.000 |
332.348 |
|
(b) Reserves & Surplus |
16648.000 |
13015.000 |
8457.572 |
|
(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) |
16997.000 |
13363.000 |
8789.920 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) Long-term borrowings |
0.000 |
0.000 |
962.821 |
|
(b) Deferred tax liabilities (Net) |
150.000 |
146.000 |
112.905 |
|
(c) Other long term
liabilities |
8.000 |
8.000 |
7.710 |
|
(d) Long-term
provisions |
219.000 |
125.000 |
91.886 |
|
Total Non-current
Liabilities (3) |
377.000 |
279.000 |
1175.322 |
|
|
|
|
|
|
(4)
Current Liabilities |
|
|
|
|
(a) Short
term borrowings |
2206.000 |
960.000 |
1685.436 |
|
(b) Trade
payables |
2514.000 |
2701.000 |
1153.394 |
|
(c) Other
current liabilities |
1359.000 |
1109.000 |
1133.188 |
|
(d) Short-term
provisions |
18.000 |
15.000 |
11.106 |
|
Total Current
Liabilities (4) |
6097.000 |
4785.000 |
3983.124 |
|
|
|
|
|
|
TOTAL |
23471.000 |
18427.000 |
13948.366 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1)
Non-current assets |
|
|
|
|
(a) Fixed
Assets |
|
|
|
|
(i)
Tangible assets |
8234.000 |
7003.000 |
5680.249 |
|
(ii)
Intangible Assets |
56.000 |
53.000 |
47.102 |
|
(iii)
Capital work-in-progress |
3362.000 |
2119.000 |
1007.737 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
859.000 |
717.000 |
1311.497 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d)
Long-term Loan and Advances |
0.000 |
0.000 |
1424.736 |
|
(e) Other
Non-current assets |
609.000 |
626.000 |
35.206 |
|
Total Non-Current
Assets |
13120.000 |
10518.000 |
9506.527 |
|
|
|
|
|
|
(2)
Current assets |
|
|
|
|
(a)
Current investments |
89.000 |
221.000 |
1.183 |
|
(b)
Inventories |
3369.000 |
3519.000 |
1983.468 |
|
(c) Trade
receivables |
4689.000 |
2558.000 |
1889.575 |
|
(d) Cash
and cash equivalents |
251.000 |
402.000 |
71.882 |
|
(e)
Short-term loans and advances |
66.000 |
28.000 |
476.624 |
|
(f) Other
current assets |
1887.000 |
1181.000 |
19.107 |
|
Total
Current Assets |
10351.000 |
7909.000 |
4441.839 |
|
|
|
|
|
|
TOTAL |
23471.000 |
18427.000 |
13948.366 |
PROFIT
& LOSS ACCOUNT (STANDALONE)
|
|
PARTICULARS |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
|
SALES |
|
|
|
|
|
Income |
20028.000 |
10592.000 |
7155.506 |
|
|
Other Income |
132.000 |
129.000 |
135.666 |
|
|
TOTAL |
20160.000 |
10721.000 |
7291.172 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials
Consumed |
5208.000 |
3037.000 |
1785.811 |
|
|
Purchases of
Stock-in-Trade |
687.000 |
4.000 |
8.751 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
(167.000) |
(478.000) |
(87.597) |
|
|
Employees benefits
expense |
2321.000 |
1719.000 |
1161.889 |
|
|
Other expenses |
5059.000 |
3503.000 |
2000.997 |
|
|
Exceptional
Items |
|
|
151.275 |
|
|
TOTAL |
13108.000 |
7785.000 |
5021.126 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION |
7052.000 |
2936.000 |
2270.046 |
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES |
175.000 |
219.000 |
301.319 |
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE
TAX, DEPRECIATION AND AMORTISATION |
6877.000 |
2717.000 |
1968.727 |
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
536.000 |
502.000 |
424.639 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE TAX |
6341.000 |
2215.000 |
1544.088 |
|
|
|
|
|
|
|
Less |
TAX |
1393.000 |
450.000 |
14.833 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) AFTER TAX
|
4948.000 |
1765.000 |
1529.255 |
|
|
|
|
|
|
|
|
EARNINGS IN FOREIGN
CURRENCY |
|
|
|
|
|
Export on F.O.B. basis |
|
3141.33 |
2866.258 |
|
|
Sale of services |
|
41.404 |
85.397 |
|
|
Income from Profit sharing agreements |
|
274.721 |
203.944 |
|
|
TOTAL EARNINGS |
6792.840 |
3457.455 |
3155.599 |
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
Raw materials and packing materials |
|
704.496 |
369.934 |
|
|
Capital Goods and consumable stores |
|
463.911 |
168.311 |
|
|
TOTAL IMPORTS |
NA |
1168.407 |
538.245 |
|
|
|
|
|
|
|
|
Earnings / (Loss) Per
Share (INR) |
|
|
|
|
|
Basic |
28.27 |
10.17 |
9.23 |
|
|
Diluted |
28.24 |
10.14 |
9.23 |
CURRENT MATURITIES OF LONG TERM DEBT DETAILS
|
Particulars |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
Current Maturities of Long term debt |
0.000 |
142.000 |
440.283 |
|
Cash generated from operations |
4522.000 |
2347.000 |
1446.434 |
|
Net cash flow from operating activity |
3298.000 |
1899.000 |
1245.524 |
QUARTERLY RESULTS
|
Particulars |
30.06.2017 |
30.09.2017 |
31.12.2017 |
|
Unaudited |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Net Sales |
4308.000 |
4084.000 |
5403.000 |
|
Total Expenditure |
2902.000 |
2832.000 |
2540.000 |
|
PBIDT (Excl OI) |
1406.000 |
1252.000 |
2863.000 |
|
Other Income |
27.000 |
49.000 |
112.000 |
|
Operating Profit |
1433.000 |
1301.000 |
2975.000 |
|
Interest |
38.000 |
41.000 |
41.000 |
|
Exceptional Items |
NA |
NA |
NA |
|
PBDT |
1395.000 |
1260.000 |
2934.000 |
|
Depreciation |
148.000 |
158.000 |
171.000 |
|
Profit Before Tax |
1247.000 |
1102.000 |
2763.000 |
|
Tax |
273.000 |
228.000 |
590.000 |
|
Provisions and contingencies |
NA |
NA |
NA |
|
Profit After Tax |
974.000 |
874.000 |
2173.000 |
|
Extraordinary Items |
NA |
NA |
NA |
|
Prior Period Expenses |
NA |
NA |
NA |
|
Other Adjustments |
NA |
NA |
NA |
|
Net Profit |
974.000 |
874.000 |
2173.000 |
KEY
RATIOS
EFFICIENCY RATIOS
|
PARTICULARS |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
Average Collection Days (Sundry
Debtors / Income * 365 Days) |
85.45 |
88.15 |
96.39 |
|
|
|
|
|
|
Account Receivables Turnover ( Income / Sundry Debtors) |
4.27 |
4.14 |
3.79 |
|
|
|
|
|
|
Average Payment Days (Sundry Creditors / Purchases * 365 Days) |
155.66 |
324.19 |
234.59 |
|
|
|
|
|
|
Inventory Turnover (Operating Income / Inventories) |
2.09 |
0.83 |
1.14 |
|
|
|
|
|
|
Asset Turnover (Operating Income / Net Fixed Assets) |
0.61 |
0.32 |
0.34 |
LEVERAGE RATIOS
|
PARTICULARS |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
Debt Ratio ((Borrowing
+ Current Liabilities) / Total Assets) |
0.26 |
0.27 |
0.39 |
|
|
|
|
|
|
Debt Equity Ratio (Total Liability / Networth) |
0.13 |
0.08 |
0.35 |
|
|
|
|
|
|
Current Liabilities to Networth (Current Liabilities / Net Worth) |
0.36 |
0.36 |
0.45 |
|
|
|
|
|
|
Fixed Assets to Networth (Net Fixed Assets / Networth) |
0.69 |
0.69 |
0.77 |
|
|
|
|
|
|
Interest Coverage Ratio (PBIT / Financial Charges) |
40.30 |
13.41 |
7.53 |
PROFITABILITY RATIOS
|
PARTICULARS |
|
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
Net Profit Margin [(PAT / Sales)
* 100] |
% |
24.71 |
16.66 |
21.37 |
|
|
|
|
|
|
|
Return on Total Assets ((PAT / Total Assets) * 100) |
% |
21.08 |
9.58 |
10.96 |
|
|
|
|
|
|
|
Return on Investment (ROI) ((PAT / Networth) * 100) |
% |
29.11 |
13.21 |
17.40 |
SOLVENCY RATIOS
|
PARTICULARS |
31.03.2017 |
31.03.2016 |
31.03.2015 |
|
Current Ratio (Current
Assets / Current Liabilities) |
1.70 |
1.65 |
1.12 |
|
|
|
|
|
|
Quick Ratio ((Current Assets – Inventories) / Current
Liabilities) |
1.15 |
0.92 |
0.62 |
|
|
|
|
|
|
G-Score Ratio Financial (Networth / Total Assets) |
0.72 |
0.73 |
0.63 |
|
|
|
|
|
|
G-Score Ratio Debt (Debts / Equity Capital) |
6.32 |
3.17 |
9.29 |
|
|
|
|
|
|
G-Score Ratio Liquidity (Total Current Assets / Total Current Liabilities) |
1.70 |
1.65 |
1.12 |
Total
Liability = Short-term Debt + Long-term Debt + Current Maturities of Long-term
debts
STOCK
PRICES
|
Face Value |
INR 2.00/- |
|
Market Value |
INR 754.25/- |
FINANCIAL ANALYSIS
[all figures are
in INR Million]
DEBT EQUITY RATIO
|
Particular |
31.03.2015 |
31.03.2016 |
31.03.2017 |
|
|
INR In Million |
INR In Million |
INR In Million |
|
Share Capital |
332.348 |
348.000 |
349.000 |
|
Reserves & Surplus |
8457.572 |
13015.000 |
16648.000 |
|
Money received against
share warrants |
0.000 |
0.000 |
0.000 |
|
Share Application money
pending allotment |
0.000 |
0.000 |
0.000 |
|
Net worth |
8789.920 |
13363.000 |
16997.000 |
|
|
|
|
|
|
long-term borrowings |
962.821 |
0.000 |
0.000 |
|
Short term borrowings |
1685.436 |
960.000 |
2206.000 |
|
Current Maturities of
Long term debt |
440.283 |
142.000 |
0.000 |
|
Total borrowings |
3088.540 |
1102.000 |
2206.000 |
|
Debt/Equity ratio |
0.351 |
0.082 |
0.130 |
YEAR-ON-YEAR GROWTH
|
Year on Year Growth |
31.03.2015 |
31.03.2016 |
31.03.2017 |
|
|
INR In Million |
INR In Million |
INR In Million |
|
Sales |
7155.506 |
10592.000 |
20028.000 |
|
|
|
48.026 |
89.086 |
NET PROFIT MARGIN
|
Net Profit Margin |
31.03.2015 |
31.03.2016 |
31.03.2017 |
|
|
INR In Million |
INR In Million |
INR In Million |
|
Sales |
7155.506 |
10592.000 |
20028.000 |
|
Profit/(Loss) |
1529.255 |
1765.000 |
4948.000 |
|
|
21.37% |
16.66% |
24.71% |
ABRIDGED
BALANCE SHEET (CONSOLIDATED)
|
SOURCES
OF FUNDS |
|
31.03.2017 |
31.03.2016 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
|
349.000 |
348.000 |
|
(b) Reserves &
Surplus |
|
16144.000 |
12609.000 |
|
(c) Money received
against share warrants |
|
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application
money pending allotment |
|
0.000 |
0.000 |
|
Non-controlling interest |
|
41.000 |
49.000 |
|
Total Shareholders’ Funds
(1) + (2) |
|
16534.000 |
13006.000 |
|
|
|
|
|
|
(3) Non-Current
Liabilities |
|
|
|
|
(a) long-term borrowings |
|
0.000 |
0.000 |
|
(b) Deferred tax
liabilities (Net) |
|
150.000 |
147.000 |
|
(c) Other long term
liabilities |
|
8.000 |
8.000 |
|
(d) long-term provisions |
|
219.000 |
125.000 |
|
Total Non-current
Liabilities (3) |
|
377.000 |
280.000 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
|
2216.000 |
984.000 |
|
(b) Trade payables |
|
2627.000 |
2756.000 |
|
(c) Other current
liabilities |
|
1404.000 |
1176.000 |
|
(d) Short-term provisions |
|
18.000 |
15.000 |
|
Total Current Liabilities
(4) |
|
6265.000 |
4931.000 |
|
|
|
|
|
|
TOTAL |
|
23176.000 |
18217.000 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
|
8272.000 |
7046.000 |
|
(ii) Intangible Assets |
|
58.000 |
55.000 |
|
(iii) Capital
work-in-progress |
|
3363.000 |
2118.000 |
|
(iv) Intangible assets
under development |
|
0.000 |
0.000 |
|
(b) Non-current
Investments |
|
1.000 |
1.000 |
|
(c) Deferred tax assets
(net) |
|
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
|
0.000 |
0.000 |
|
(e) Other Non-current
assets |
|
609.000 |
627.000 |
|
Total Non-Current Assets |
|
12303.000 |
9847.000 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
|
321.000 |
221.000 |
|
(b) Inventories |
|
3489.000 |
3573.000 |
|
(c) Trade receivables |
|
4752.000 |
2616.000 |
|
(d) Cash and cash
equivalents |
|
358.000 |
452.000 |
|
(e) Short-term loans and
advances |
|
35.000 |
28.000 |
|
(f) Other current assets |
|
1918.000 |
1480.000 |
|
Total Current Assets |
|
10873.000 |
8370.000 |
|
|
|
|
|
|
TOTAL |
|
23176.000 |
18217.000 |
PROFIT
& LOSS ACCOUNT (CONSOLIDATED)
|
|
PARTICULARS |
|
31.03.2017 |
31.03.2016 |
|
|
SALES |
|
|
|
|
|
Income |
|
20650.000 |
10801.000 |
|
|
Other Income |
|
139.000 |
96.000 |
|
|
TOTAL |
|
20789.000 |
10897.000 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials
Consumed |
|
5208.000 |
3037.000 |
|
|
Purchases of
Stock-in-Trade |
|
971.000 |
152.000 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
|
-188.000 |
-483.000 |
|
|
Employees benefits
expense |
|
2432.000 |
1798.000 |
|
|
Other expenses |
|
5393.000 |
3641.000 |
|
|
TOTAL |
|
13816.000 |
8145.000 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION |
|
6973.000 |
2752.000 |
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES |
|
185.000 |
229.000 |
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE TAX,
DEPRECIATION AND AMORTISATION |
|
6788.000 |
2523.000 |
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
|
544.000 |
508.000 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE TAX |
|
6244.000 |
2015.000 |
|
|
|
|
|
|
|
Less |
TAX |
|
1395.000 |
479.000 |
|
|
|
|
|
|
|
|
Profit from continuing operation |
|
4849.000 |
1536.000 |
|
|
Profit from discontinued operations |
|
0.000 |
71.00 |
|
|
Tax expense on discontinued operations |
|
0.000 |
49.000 |
|
|
Profit from discontinued operations, net of
tax |
|
00.000 |
22.000 |
|
|
Profit after tax |
|
4849.000 |
1558.000 |
|
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
Items that will not be reclassified to
profit or loss |
|
|
|
|
|
Re-measurement gains (losses) on defined
benefit plans |
|
(41.000) |
(31.000) |
|
|
Net (loss)/gain on FVTOCI equity securities |
|
23.000 |
6.000 |
|
|
Exchange differences on translation of
foreign operations |
|
(12.000) |
(18.000) |
|
|
|
|
|
|
|
|
Income tax relating to items that will not
be reclassified to profit or loss |
|
|
|
|
|
Re-measurement gains (losses) on defined
benefit plans |
|
(9.000) |
(7.000) |
|
|
Net (loss)/gain on FVTOCI equity securities |
|
5.000 |
1.000 |
|
|
Total comprehensive income for the year |
|
4815.000 |
1509.000 |
|
|
PROFIT FOR THE YEAR ATTRIBUTABLE TO: |
|
|
|
|
|
Owners of the parent |
|
4860.000 |
1571.000 |
|
|
Non-controlling interests |
|
(11.000) |
(13.000) |
|
|
Total comprehensive income for the year
attributable to: |
|
|
|
|
|
Owners of the parent |
|
4826.000 |
1522.000 |
|
|
Non-controlling interests |
|
(11.000) |
(13.000) |
|
|
Basic earnings per equity share (INR) (of nominal value
INR 2 each) |
|
|
|
|
|
From continued and discountinued operations |
|
27.78 |
9.14 |
|
|
From continued operations |
|
27.78 |
9.01 |
|
|
Diluted earnings per equity share (INR) (of nominal value
INR 2 each) |
|
|
|
|
|
From continued and discountinued operations |
|
|
|
|
|
From continued operations |
|
27.75 |
9.11 |
|
|
Earnings / (Loss) Per
Share (INR) |
|
27.75 |
8.98 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check list by
info agents |
Available in Report
(Yes/No) |
|
1 |
Year of establishment |
Yes |
|
2 |
Constitution of the entity -Incorporation
details |
Yes |
|
3 |
Locality of the entity |
Yes |
|
4 |
Premises details |
No |
|
5 |
Buyer visit details |
-- |
|
6 |
Contact numbers |
Yes |
|
7 |
Name of the person contacted |
No |
|
8 |
Designation of contact person |
No |
|
9 |
Promoter’s background |
Yes |
|
10 |
Date of Birth of Proprietor / Partners /
Directors |
No |
|
11 |
Pan Card No. of Proprietor / Partners |
No |
|
12 |
Voter Id Card No. of Proprietor / Partners |
No |
|
13 |
Type of business |
Yes |
|
14 |
Line of Business |
Yes |
|
15 |
Export/import details (if applicable) |
No |
|
16 |
No. of employees |
Yes |
|
17 |
Details of sister concerns |
Yes |
|
18 |
Major suppliers |
No |
|
19 |
Major customers |
No |
|
20 |
Banking Details |
Yes |
|
21 |
Banking facility details |
Yes |
|
22 |
Conduct of the banking account |
-- |
|
23 |
Financials, if provided |
Yes |
|
24 |
Capital in the business |
Yes |
|
25 |
Last accounts filed at ROC, if applicable |
Yes |
|
26 |
Turnover of firm for last three years |
Yes |
|
27 |
Reasons for variation <> 20% |
-- |
|
28 |
Estimation for coming financial year |
No |
|
29 |
Profitability for last three years |
Yes |
|
30 |
Major shareholders, if available |
Yes |
|
31 |
External Agency Rating, if available |
Yes |
|
32 |
Litigations that the firm/promoter
involved in |
-- |
|
33 |
Market information |
-- |
|
34 |
Payments terms |
No |
|
35 |
Negative Reporting by Auditors in the Annual
Report |
No |
GENERAL INFORMATION
The Company is a public limited company domiciled and incorporated in India in accordance with the provisions of the Companies Act, 1956. The registered office of the Company is at NATCO House, Road No. 2, Banjara Hills, Hyderabad – 500034. The equity shares of the Company are listed on the National Stock Exchange and Bombay Stock Exchange.
The Company is engaged in the business of pharmaceuticals which comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations. The Company has manufacturing facilities in India which caters to both domestic and international markets including regulated markets like United States of America and Europe.
These financial statements for the year ended 31 March 2017 were authorized and approved for issue by the Board of Directors on 30 May 2017.
BRIEF REVIEW OF THE
FINANCIAL YEAR
Revenues from formulations segment was the key driver of growth during the fiscal year constituting over 87% of total net revenue on standalone basis. This was largely driven by continued growth of domestic formulations segments of hepatitis C and oncology drugs, as well as the launch of generic Oseltamivir in the US market. API constituted just under 9% of total net revenue on standalone basis.
As of Mar 31st, 2017, the Company has 43 ANDA filings of which (i) 20 Para IV filings (ii) 22 approved ANDAs (1 yet to be launched); which have been filed in collaboration with global pharmaceutical companies.
As of Mar 31st, 2017, the Company filed 37 DMFs with the USFDA across therapeutic segments such as oncology, CNS, anti-asthmatic, anti-depressant, anti-migraine, anti-osteoporosis and gastrointestinal disorders and are currently working on several more DMFs to be filed in near future.
MANAGEMENT DISCUSSION
AND ANALYSIS
ECONOMIC OVERVIEW AND
OUTLOOK
Global economic activity has improved in 2017, with a steady momentum reflected in a wide range of variables, including Purchasing Managers’ Index (PMI), industrial production, global trade and robust financial markets. Overall, the world economy is well on its way towards recovery and global growth is expected to touch 3.5% in 2017 and 3.6% in 2018. The IMF has projected an upward trend for the United States of America, mirroring the assumed fiscal policy easing and an uptick in business and consumer confidence. If this positivity persists, it will reinforce the cyclical momentum. Moreover, the prospects for Europe and Japan improved owing to cyclical recovery in global manufacturing and trade that commenced in the second half of 2016.
The reviving global economic landscape cannot be mentioned in isolation without discussing the downside risks, which include low productivity growth, high-income inequality, geo-political uncertainties and so on. Besides, the growing trend towards protectionism in the developed countries may hinder global trade and integration.
At the same time, the Emerging Markets and Developing Economies (EMDEs) account for a significant portion (over 60%) of global growth in output and consumption. The contribution of EMDEs in global economic activity almost doubled in the last two decades.
In FY 2016-17, the picture for EMDEs remained distinctly diverse. On one hand, China registered stronger than expected growth, supported by continued policy stimulus. On the other hand, some EMDEs like Argentina, Brazil and Turkey observed weaker than expected economic progress as they faced sharp contraction in tourism revenues. Russia’s economy performed better than expected during the year, in
part reflecting firmer oil prices.
For those EMDEs that rely heavily on energy or metal exports, lower commodity prices remain a key influencer for short- and medium-term scope. The slowdown of productivity growth in the last few years is also a medium-term challenge for many EMDEs African economies encountered major challenges in the form of sharp declines in commodity pricing, the Ebola epidemic, and severe drought in Eastern and Southern and African (ESA) countries. Besides, political turmoil and fuel shortages in some countries slowed economic progress in the continent. However, economic growth improved in the last quarter of 2016; The momentum is likely to continue into 2017.
Indian
Economy
India has emerged as one of
the fastest growing economies in the world. Bold policy initiatives, coupled
with higher disposable incomes - due to good monsoon and Seventh Central Pay
Commission - have propelled India’s consumer demand and enhanced the country’s
economic potential. In FY 2016-17, India witnessed two major policy reforms –
demonetisation and passing of the bill for implementation of the Goods and
Services Tax (GST).
Despite short-term
hardships due to demonetisation, India is expected to record 7.6% GDP in FY
2017-18. The country has positioned itself as a vibrant emerging economy, and
attracted Foreign Direct Investment (FDI) worth $ 60.1 billion in FY 2016-17.
Several initiatives by the government,
such as Make in India, Digital India, Skill India, Start-Up India and so on are
serving to empower the domestic manufacturing sector. Moreover, these
initiatives are helping create appropriate infrastructure, and enhance digital
literacy along with India’s talent pool. Regardless of the challenges, India is
poised for a long-term growth trajectory, powered by a stable economy and
investments to improve infrastructure, manufacturing output and rural income.
Additionally, robust private consumption, the trend of benign inflation and a
consistent focus on institutional reforms across all sectors are improving
India’s macroeconomic parameters.
GLOBAL PHARMACEUTICAL
INDUSTRY
The global pharma industry
is expected to witness encouraging growth in the coming years. Emerging and
lower-income countries are likely to drive the rise in healthcare expenditures,
with a potential for expansion of services in developed countries.
Global medicine spend is
expected to reach nearly $1.5 trillion (on an invoice price basis) by 2021,
which is up by $370 billion from the 2016. Besides, overall medical device
research and development spending is expected to grow at a CAGR of 4.3% from
2015 to 2020.
Major
global healthcare drivers
• By 2020, 50% of global
healthcare expenditures – about US$ 4 trillion – will be spent on three leading
causes of death: cardiovascular diseases, cancer and respiratory diseases.
• Hepatitis C treatments
alone accounted for 3% of the overall growth of 12% in 2015, and now is
expected to grow modestly till 2021.
•
Oncology, autoimmune and diabetes treatments will drive much of the growth in
future.
• HIV-AIDS continues to
affect 36.9 million people worldwide, around 70% of whom are living in
Sub-Saharan Africa. Moreover, the Zika virus and associated upsurge in
microcephaly are major threats in Latin America.
• Innovation in specialty
medicines will continue lifting the share of global spending from 30% in 2016
to 35% in 2021.
GLOBAL MARKET REVIEW
Developed
markets
Pharmaceutical
spending in developed markets is estimated to rise from $749 billion in 2016 to
$975-1,005 billion by 2021. Among developed markets, the US will remain the
most important market and will be a key growth driver for the industry.
Developed markets pharmaceutical spending
USA
With a market
size of $462 billion in 2016, the US pharmaceutical market is expected to grow
by 6-9% CAGR to $645-675 billion in 2021. The US economy has one of the world’s
most supportive regulatory framework for development and commercialisation of
innovative pharmaceuticals. Its key strengths include an intellectual property
ecosystem that encourages and rewards innovation and a stringent regulatory
architecture that ensures quality. At present, the market is registering a
steady growth across biologics and generics.
The reduction in overall
spending (as branded medicines lose exclusivity) is likely to reach $143.5
billion in the next five years - more than 1.5 times the impact as compared to
the past five years. This includes the estimated impact of biosimilars,
uncertainty based on multiple issues in litigation with originators, as well as
regulatory, pricing and competitive dynamics.
BUSINESS OVERVIEW
NATCO’s philosophy has always been to improve affordability and access to medicines. Headquartered in Hyderabad, India, NATCO is an R&D-focused, vertically integrated, generic pharmaceutical drug company engaged in developing, manufacturing and marketing Finished Dosage Formulations (FDF) and Active Pharmaceutical Ingredients (API). NATCO’s manufacturing plants are spread across India and certified by key regulatory authorities.
The Company markets and distributes products in over 40 countries, and sells FDF products in USA, India, Europe and rest of the world. NATCO’s success stems from its research-led ability to identify and develop complex products in specialty therapeutic segments in a cost-effective manner.
AMALGAMATION
OF NATCO ORGANICS LIMITED
NATCO Organics Limited
(“NOL”), a wholly owned subsidiary of the Company, amalgamated with the
Company, with effect from 1 April 2015 (“the appointed date”). NOL was engaged
in the business of manufacturing and selling of bulk drugs in domestic markets.
The amalgamation was pursuant to a composite scheme of amalgamation sanctioned
by the Honourable High Court of Judicature at Madras vide their Order dated 28
April 2016. Pursuant thereto all the assets and properties, both movable and
immovable, rights, title and interests, secured and unsecured debts,
borrowings, and all other duties, debts, liabilities, undertakings and
obligations of NATCO Organics Limited, have been transferred to and vested in
the Company retrospectively with effect from 1 April 2015. The amalgamation has
been accounted for under the ‘pooling of interests’ method as prescribed by the
Indian Accounting Standard 103 (Ind AS 103) - “Business Combinations” specified
under Section 133 of the Act read with Rule 7 of the Companies (Accounts)
Rules, 2014. Accordingly, the assets, liabilities and reserves of NATCO
Organics Limited as at 1 April 2015 have been taken over at their book values
and in the same form.
Since
NOL was wholly owned by the Company, no shares were exchanged to effect the
amalgamation.
Accordingly,
the amalgamation has resulted in transfer of assets, liabilities and reserves
in accordance with the terms of the Scheme at the following summarised values:
|
|
As at 1 April 2015 |
|
ASSETS |
|
|
Fixed
assets (net) |
1212.000 |
|
Cash
and bank balances |
12.000 |
|
Inventories |
107.000 |
|
Loans
and advances and other assets |
54.000 |
|
Less:
Liabilities |
|
|
Trade
payables, other liabilities and provisions |
(82.000) |
|
|
1303.000 |
|
Less: |
|
|
Adjustment
for cancellation of the Company’s investment |
797.000 |
|
Adjustment
for cancellation of advances given by the Company to NATCO Organics Limited |
866.000 |
|
Transfer
of balances of deficit in the Statement of Profit and Loss of NOL |
(360.000) |
|
|
-- |
UNSECURED LOAN
|
PARTICULARS |
31.03.2017 (INR
in Million) |
31.03.2016 (INR
in Million) |
|
Short-term
borrowings |
|
|
|
Working capital loans (Unsecured loans are personally guaranteed by V.C. Nannapaneni, Chairman and Managing Director.) |
760.000 |
102.000 |
|
|
|
|
|
Total |
760.000 |
102.000 |
INDEX
OF CHARGES
|
Charges Registered |
||||||||
|
SNo |
SRN |
Charge Id |
Charge Holder Name |
Date of Creation |
Date of Modification |
Date of Satisfaction |
Amount |
Address |
|
1 |
G21943659 |
100059941 |
KOTAK MAHINDRA BANK |
18/10/2016 |
- |
- |
500000000.0 |
2nd Floor, Jewel Pavani TowerSomajiguda,
Raj bhavan Road HYDERABAD TELANGANA 500082 INDIA |
|
2 |
G33588203 |
10271782 |
ALLAHABAD BANK |
08/03/2011 |
26/12/2016 |
- |
3030000000.0 |
INDUSTRIAL FINANCE BRANCH6-3-850/3,1ST FLOOR,SREENIVASA
PLAZA,AMEERPETHYDERABAD TEGANA 500016 INDIA |
|
3 |
G36089043 |
10276521 |
EXPORT IMPORT BANK OF INDIA |
29/03/2011 |
04/07/2012 |
16/02/2017 |
500000000.0 |
Floor 21, Center One Building,World Trade
Center, Cuffee ParadeMumbaiMH400005IN |
|
4 |
G29233558 |
10577202 |
Citi Bank N.A. |
22/06/2015 |
31/12/2015 |
05/12/2016 |
120450000.0 |
Mid Market Enterprise, 1st Floor,, Queens
Plaza,S.P. Road,, HyderabadHYDERABADTG500003IN |
|
5 |
G05419304 |
90126960 |
EXPORT - IMPORT BANK OF INDIA |
21/12/2004 |
- |
06/06/2016 |
2000000.0 |
CENTRE ONE BUILDING . FLOOR-21WORLD TRADE
CENTRE COMPLEX; CUFFE PARADEMUMBAIMH400005IN |
|
6 |
G02038735 |
90258131 |
EXPORT IMPORT BANK OF INDIA |
07/11/1995 |
- |
25/04/2016 |
140000000.0 |
CENTRE ONEWORLD TRADE CENTRE; CUFFE
PARADEBOMBAYMH400005IN |
|
7 |
C73689051 |
90338707 |
CENTRAL BANK OF COMMRCE; |
13/11/1992 |
- |
04/12/2015 |
5300000.0 |
NAMPOLLY BRANCHHYDERABADAPIN |
|
8 |
C74091364 |
90340009 |
ORIENTAL BANK OF COMMERCE |
09/12/1994 |
26/12/1995 |
04/12/2015 |
9700000.0 |
NAMPALLY STATION ROADHYDERABADAPIN |
|
9 |
C74108366 |
90259582 |
ORIENTAL BANK OF COMMERCE |
13/11/1992 |
09/12/1994 |
04/12/2015 |
11450000.0 |
NAMPALLY STATION ROADHYDERABADAPIN |
|
10 |
C74111204 |
90339937 |
ORIENTAL BANK OF COMMERCE |
13/11/1992 |
20/04/1995 |
04/12/2015 |
11450000.0 |
NAMPALLY STATION ROADHYDERABADAPIN |
UNAUDITED FINANCIAL
RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2017
(INR In Million)
|
Particulars |
Quarter Ended |
Nine Months Ended |
|
|
|
31.12.2017 |
30.09.2017 |
31.12.2017 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Income from
Operations |
|
|
|
|
Revenue from Operations |
5403.000 |
4084.000 |
13795.000 |
|
Other Income |
112.000 |
49.000 |
188.000 |
|
Total Income from
Operations (Net) |
5515.000 |
4133.000 |
13983.000 |
|
Expenses |
|
|
|
|
Cost of Materials Consumed |
733.000 |
811.000 |
2830.000 |
|
Excise duty |
0.000 |
0.000 |
172.000 |
|
Purchases of Stock-in-Trade |
10.000 |
9.000 |
206.000 |
|
Changes in inventories of finished goods, work-in-progress
and Stock-in-Trade |
(136.000) |
244.000 |
(339.000) |
|
Employee benefit expenses |
754.000 |
705.000 |
2062.000 |
|
Finance cost |
41.000 |
41.000 |
120.000 |
|
Depreciation and amortization expense |
171.000 |
158.000 |
477.000 |
|
Other expenses |
1179.000 |
1063.000 |
3343.000 |
|
Total Expenses |
2752.000 |
3031.000 |
8871.000 |
|
|
|
|
|
|
Profit /(Loss)
before tax |
2763.000 |
1102.000 |
5112.000 |
|
Tax Expenses |
|
|
|
|
-Current Tax |
590.000 |
235.000 |
1091.000 |
|
-Deferred Tax Charge/ (Credit) |
0.000 |
(7.000) |
0.000 |
|
Profit /(Loss)
after taxes |
2173.000 |
874.000 |
4021.000 |
|
Other Comprehensive
Income |
|
|
|
|
Items that will not
be reclassified to profit or loss |
|
|
|
|
Remeasurement of defined benefit obligation |
(3.000) |
4.000 |
(7.000) |
|
Net gain/(loss) on FVTOCI equity securities |
4.000 |
(10.000) |
0.000 |
|
Total Other
Comprehensive Income |
2174.000 |
868.000 |
4014.000 |
|
Paid up equity share capital (Eq. shares of INR 2/- each) |
369.000 |
349.000 |
369.000 |
|
Other equity |
-- |
18274.000 |
-- |
|
Earnings per share
of INR 2/- each (Basic & Diluted) |
|
|
|
|
Basic |
12.33 |
4.98 |
22.94 |
|
Diluted |
12.29 |
4.97 |
22.89 |
Notes :
- The Company adopted Indian Accounting Standard ("Ind AS") from 1 April 2016 and accordingly these results have been prepared in accordance with the recognition and measurement principles laid down in the Ind AS 34, Interim Financial Reporting prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and other accounting pronouncements generally accepted in India.
- The standalone financial results for the quarter and nine months ended 31 December 2017 have been reviewed by the Audit Committee of the board and approved by the Board of Directors of the Company at their meeting held on 6 February 2018. These results were subjected to a limited review by the Statutory Auditors of the Company.
- The Company operates in one reportable segment which is "Pharmaceuticals".
- Excise duty on sales was included under Revenue from operations and disclosed separately under Expenses upto all reporting periods ending 30 June 2017. Post implementation of Goods and Services Tax (GST) from quarter ended 30 September 2017, revenue from operations is reported net of GST and hence to that extent is not comparable.
- During the quarter, the Company has alloted 177500 equity shares of INR 2 each, fully paid up on exercise of options by employees in accordance with the Company's Employee Stock Options scheme.
- In accordance with provisions of Chapter VIII of the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and pursuant to the approval accorded by the shareholders in the Extra-Ordinary General Meeting on 29 November 2017, the Company has raised a sum of INR 9150.000 million during the current quarter by allotment of 10000000 equity shares of INR 2 each at a premium of INR 913 per share through Qualified Institutional Placement.
- The Board of Directors have recommended a second interim dividend of INR 7 per equity share of INR 2 each for the current financial year.
CONTINGENT
LIABILITIES:
(INR in million)
|
PARTICULARS |
31.03.2017 |
31.03.2016 |
|
Disputed sales tax liabilities |
9.000 |
9.000 |
|
Disputed service tax liabilities |
2.000 |
2.000 |
|
Disputed customs liability |
2.000 |
2.000 |
|
Claims not acknowledged as debt |
-- |
6.000 |
|
The Company is contesting certain patent infringement cases filed against it by the innovators. A few of these cases pertain to products already launched by the Company in the market. These cases are pending before different authorities / courts within the Indian jurisdiction and the outcome cannot be ascertained with reasonable certainty. Accordingly, a reliable estimate of the liability towards damages/penalties, if any, cannot be made at present. These amounts will be recognised during the periods in which such liabilities can be reasonably measured. Further, the management does not expect such liabilities to be significant. |
||
FIXED ASSETS
·
Buildings
·
Plant
and Equipment
·
Furniture
and Fixtures
·
Vehicles
·
Office
Equipment
·
Computer
·
Leasehold Land
·
Freehold
land
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
|
INR |
|
US Dollar |
1 |
INR 65.04 |
|
|
1 |
INR 92.28 |
|
Euro |
1 |
INR 80.62 |
INFORMATION DETAILS
|
Information
Gathered by : |
KMN |
|
|
|
|
Analysis Done by
: |
NYT |
|
|
|
|
Report Prepared
by : |
SUD |
SCORE FACTORS
|
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 |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
|
A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
|
B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
|
C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
|
D |
High Risk |
Business dealing not recommended or on
secured terms only |
|
NB |
New Business |
No recommendation can be done due to
business in infancy stage |
|
NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.