| Dear Members,
The Directors have pleasure in presenting the Nineteenth Annual
Report on the business and operations together with audited annual
accounts of your Company for the financial year ended 31st March 2013.
FINANCIAL RESULTS (Rs. in lacs)
Particulars 2012-2013 2011-12
Total Income 2409.03 4852.95
Increase/(Decrease) in stocks 1644.73 (388.77)
Total Expenditure before Finance
cost& Depreciation 3945.73 4581.16
Finance cost 511.14 441.93
Depredation 171.86 170.14
Profil/(Loss) before Taxation (3864.43) 48.5
Provision for tax 0 0
Profit/(Loss) after Taxation (3864.43) 48.5
OPERATIONS
Turnover of the Company has decreased from Rs 4852.95 Lacs (previous
financial year) to Rs.2409.03 Lacs (current financial year)
registering a decrease of 50.35% over previous financial year. During
the year under review, the Company has a net loss of Rs. 3864.43 Lacs
as against a net profit of Rs 48.5 Lacs in the previous year 2011-12
Company's sales and profitability were badly affected during the
Financial Year 2012-13. The drug control authorities have stopped
production from 19th May, 2012 due to regulatory issues and seized
some stocks. The Company has complied with the regulatory conditions
and restarted production from 5th October 2012 onwards. Due to
operational and non availability of managerial & technical manpower to
manage the Regulatory standards Plant at Gulburga has been closed.
The demand medical disposables and IV Sets in particular has been
increasing continuously and the growth has been around 15-18% year on
year. Health Care providers have realised the importance of delivery
of quality treatment and as a result have been preferring use of best
quality medical disposables in their hospitals.
The Company has been continuously working on quality upgradation of
the products, implementation of innovative techniques for product
development, cost reduction and to increase its productivity.
PRODUCT DEVELOPMENT AND COST REDUCTION
Developmental activities are carried out on continuous basis on
product performance and improvement, reduction in consumption of Basic
Polymers, replacing existing Polymers with latest generation &
alternate polymers, thereby resulting in reduction in cost of
production.
Alternative sources of Energy are being contemplated in view of
limited availability of electrical energy and upswing in its cost;
this ensures company operations on a regular basis without
interruptions. Reduction in consumption of energy is also being
carried out on continuous basis.
At present all these activities are on ongoing basis and when
completed shall bring in reduction in cost of production and also
performance development of the main product range.
REVOCATION OF SUSPENSION OF COMPANY'S SCRIP
The work for revocation of suspension of the Company' s Scrip is in
progress.
NEW PRODUCTS
Based on the market research your company has embarked on development
of new Medical disposables which are currently not produced & marketed
by the company. Some of the new products contemplated are undergoing
performance trials and some are in developmental stage.
All these new products are in developmental stage and would be
launched after completion of performance tests and Licensing
procedures.
In view of the Research and Developmental activities carried out by
the R&D Team of your company, a number of new infusion sets have been
successfully launched. All the new products listed earlier have been
commercialized and are being marketed on regular basis. The sales
volume of each of all these new products are increasing month after
month.
MARKETING
Marketing of our existing product range is segregated into two
Division (1) Marketing through Trade and (2) Marketing directly to the
Corporate Hospitals.
These two Marketing Division are headed by (1) Marketing Manager and
(2) Deputy General Manager (Marketing), who have considerable years of
experience in marketing of medical disposable in India.
The Marketing team is headed by President (Marketing) who is
professinally qualified and with considerable experience in Health
Care Industry.
Team which markets through the trade comprises of Field Sales
Executives, Territory Managers Area Sales Managers, Regional Sales
Managers are working in the field through out the length and breadth
of the Country covering the Retail medical stores, Clinics, Nursing
Homes Pathological laboratories and Institutions. The field sales team
also develops the marketing network consisting of Stockists and
Distributors based in their geographical territory. The field staff
reports to the Marketing Manager at Head Office, who in turn reports
to the President (Marketing).
A Specialized marketing team consisting of "Sales Managers -
Corporate Hospitals" have been identified to market the existing
products to 500 Corporate Hospitals in the Country manufactured by the
company to the corporate Hospitals. Tie corporate sales team is headed
by Deputy General Manager (Marketing) who has considerable years of
experience in marketing and sales promotions of high value medical
disposables to the corporate hospitals in the Country.
Your company has a Strong Distribution Network spread all over the
country through consigned agents, direct distributors, stockists and
Dealers.
Your company has gained entry into a number of Corporate Hospitals
with the help of the dedicated sales team, working in all the major
cities of the Country.
DIVIDEND
Your directors express their inability to recommend any dividend for
the financial year 2012 to 2013 due to huge loss during the current
period.
SAFETY AND ENVIRONMENTAL PROTECTION
The Production process of our Company is totally non-hazardous. There
are no effluents in production. Very limited water is used in the
manufacturing operations of the company even then a major portion of
the process waste is re-cycled. The little wastage left, if any, does
not pose any harm to the environment. However your Company, as a
matter of policy has been adhering on highest priorityto the safety of
its employees as well as the environment and carrying out periodic
audits and reviews to ensure total protection.
FIXED DEPOSITS
During the year the Company has neither invited nor accepted any Fixed
Deposits from the public under the provisions of Section 58A of the
Companies Act, 1956.
INDUSTRIAL RELATIONS
The Management and Labour relations were very cordial and harmonious
and continued to remain cordial at all levels during the year under
review.
AUDITORS
M/s Jayant & Sadashiv, Chartered Accountants(Firn Reg No 001297S),
Auditors' of the Company old office until the conclusion of the
ensuing Annual General Meeting. The Company has received a letter from
the Auditors that their appointment, if made, will be in conformity
with Section 224 (IB) of the Companies Act, 1956. M/s.TaVant &
Sadashiv,
Auditors Qualifications
* Sl. No (ix) (b) of Annexure to Auditors Report:
As as 31st March, 2013, according to the records of the company and
the information and explanations given to us, the following are the
particulars of dues on account of Value Added Tax, Wealth ax, Service
Tax, Customs duty, excise duty and cess matters that have not been
deposited on account of any dispute:
Nature Nature of Amount (Rs. Period to which Forum
Statute Dues in Lakhs) the amount relates where
pending
Income Minimum 22.15 FY 2004-2005 Income
Tax Alternate Tax
Laws Tax (MAT) Tribunal
Hyderabad
* Sl.No (x) of Annexure to Auditors Report:
In our opinion accumulated losses of the Company at the end of the
accounting year are more than Fifty percent of its networth. Further,
the Company has incurred cash losses during the current financial year
amounting to Rs. 36,92,56,542/- and has not incurred cash losses in
the immediately preceding financial year.
* Sl.No (xi) of the Auditors Reports:
Based on our verification and according to the information and
explanations given to us by the management, the Company has defaulted
in repayment of dues of Rs. 31.13 Crores to banks.
Management Reply
*Sl No (x) of Annexure to Auditors Report:
Company's sales and profitability were badly affected during the
Financial Year 2012-13 as the Drug Control Authorities had stopped
production from 19th May, 2012 due to Regulatory issues and seized
some stocks. Due to these reasons huge amount of stock were damaged
and also fixed costs had to be entailed during the said period. The
Company has complied the regulatory conditions and restarted
production from 5th October 2012 onwards.
*Sl. No (xi) of the Auditors Report:
The Company account was declared as Non Performing Asset (NPA) w.e.f
September 2012. The total dues of Rs.31.13 crores includes the term
and working Capital loans.
Chartered Accountants, being eligible, are recommended for
re-appointment as Auditors of the Company till the conclusion of the
next Annual General Meeting.
Replies to the Auditor Qualifications:
DIRECTORS
Mr. Basawaraj Nagabusappa Sajjan, Director of the Company is liable to
retire by rotation at the ensuing Annual General Meeting and being
eligible, offered himself for reappointment
Brief resume of the above Director is provided in the Report of
Corporate Governance forming part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to the Directors' responsibility statement,
the Board of Directors of your Company confirm that:
a) In the preparation of the annual accounts for the year ended 31st
March 2013, the applicable accounting standards have been followed
with proper explanations relating to material departures.
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year ended of 31st March,
2013 and of the loss for the year under review;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities; and
d) The Directors have prepared the accounts for the financial year
ended 31st March 2013 of a going concern basis.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars regarding Research & Development Conservation of
energy, technology absorption in terms of Section 217(l)(e) of the
Companies Act, 1956 read with Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules,1988 are given in tb
"Annexure -1" forming part of this Report.
PARTICULARS OF EMPLOYEES
There are no employees in the Company, whose names are requited to be
disclosed under the provisions of Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 and drawing salary in excess of the limits specified therein.
CORPORATE GOVERNANCE
The Report on Corporate Governance and Management Discussion and
Analysis along with the certificate from the Statuatory Auditors
certifying the compliance of Corporate Governance enunciated in Clause
49 of the Listing Agreement with the Stock Exchange is annexed to this
Annual Report.
Appreciation
Your Directors take this opportunity to express their sincere
appreciation and thanks to all the employees and workers of the
Company for their wholehearted co-operation in improving the working
of the Company.
The Directors also thank the Consignee Agents, Distributors,
Stockists, Dealers, Suppliers/Vendors and Technical Collaborators for
the support and co-operation extended by them in the growth of the
Company.
Your directors express sincere gratitude to the shareholders for their
continued support.
For and on behalf of the Board of Directors
Sangam Health Care Products Limited
Place: Secunderabad. J M Narsinga Rao L.S. Patil
Date: 30.08.2013 Managing Director Director |