Annual Report - Glenmark

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40 Secured Loans Secured loans increased to Rs. 1293.03 million in 2004-05 compared with Rs. 1029.43 million in 2003-04. The other major component of the secured loan was the Term Loans from State Bank of India, State Bank of Patiala and IDBI Bank, which were secured by mortgaging the land, building, equipment and machinery at Ankleshwar, Mahape and Goa. Unsecured Loans Unsecured loans increased to Rs. 3080.58 million in 2004-05 compared with Rs. 119.31 million in 2003-04 due to the issue of: i) 20,000 Zero Coupon Foreign Currency Convertible Bonds of USD 1,000 each [Rs. 873.20 million at issue] convertible at the option of the bondholder at any time on or after 28th March 2005 but prior to the close of business on 2nd January 2010 at a fixed exchange rate of Rs. 43.66 per 1 USD and price of Rs. 862.394 per share of par value of Rs. 2.00 per share subject to adjustment in certain events, i.e. issue of bonus shares, division, consolidation, reclassification of shares etc. and redeemable on maturity date on 16th February 2010 at 133.74 percent of its principal amount if not redeemed or converted earlier. The redemption premium of 33.74 percent payable on maturity of the bond, if there is no conversion of the bond, to be debited to Securities Premium account evenly over the period of 5 years from the date of issue of bonds and ii) 50,000 Zero Coupon Foreign Currency Convertible Bonds of USD 1,000 each [Rs. 2183.00 million at issue] convertible at the option of the bondholder at any time on or after 15th November 2006 but prior to the close of business on 2nd January 2010 at a fixed exchange rate of Rs. 43.66 per 1 USD and the price greater of 35 percent of the average of the order book volume-weightedaverage-price of a share on each Trading Day during the period commencing on 15th September and ending on 14th November 2006 and the Floor Price [Rs. 500.00] of par value of Rs. 2.00 per share, and redeemable in whole but not in part at the option of the company on or after 15th February 2009, if closing price of the share for each of the 25 consecutive trading days immediately prior to the date upon which notice of such redemption is given was at least 130 percent of the applicable Early Redemption Amount divided by the conversion ratio and redeemable on maturity date on 16th February 2010 at 134.07 percent of its principal amount if not redeemed or converted earlier. The redemption premium of 34.07 percent payable on maturity of the bond, if there is no conversion of the bond, to be debited to Securities Premium account evenly over the period of 5 years from the date of issue of bonds. Fixed Assets The Company's gross asset block increased from Rs. 1723.53 million as at 31st March 2004 to Rs. 2586.23 million as at 31st March 2005 on account of modernisation of the plants at Nasik, Kurkumbh, Mohol and Ankleshwar, capitalisation of the Goa plant and additions made in the R&D division. Capital work-in-progress and capital advances worth Rs. 129.05 million were made towards the Baddi, Mohol and Goa plants. Investment Investments declined from Rs. 299.37 million in 2003-04 to Rs. 264.56 million in 2004-05. The Company's investment in its wholly-owned subsidiaries, Glenmark Pharmaceuticals Inc., USA and Glenmark Farmacêutica Ltda., Brazil have been transferred to Glenmark Pharmaceuticals SA, Switzerland a wholly-owned subsidiary of the Company. Inventory Materials inventory increased from Rs. 310.10 million in 2003-04 to Rs. 360.36 million in 2004-05, mainly to service a larger product basket for the domestic, export and API businesses. Finished goods and work-in-process inventory increased from Rs. 508.93 million in 2003-04 to Rs. 746.56 million in 2004-05 largely due to changes in the indirect taxation, i.e. MRP-based Excise and VAT implementation. Receivables Receivables increased from Rs. 1304.81 million in 2003-04 to Rs. 1821.05 million in 2004-05. Loans and Advances Loans and advances increased from Rs. 392.54 million in 2003-04 to Rs. 1871.87 million in 2004-05 primarily on account of advances of Rs. 1324.05 million to the wholly-owned subsidiary, Glenmark Pharmaceuticals SA, Switzerland. Cash and Bank Balance Cash and bank balance increased to Rs. 1092.79 million from Rs. 67.69 million mainly due to short term deposits of the FCCB issue proceeds. Current Liabilities Current liabilities and provisions increased from Rs. 745.12 million in 2003-04 to Rs. 781.43 million in 2004-05.
Glenmark Pharmaceuticals Limited Figures in Rs. /Mn. Head March 2005 March 2004 Creditors 556.23 464.60 Other Liabilities 130.52 192.29 Dividend and Dividend Tax 94.68 88.23 781.43 745.12 Net Working Capital The net working capital has increased from Rs. 1841.53 million to Rs. 5114.87 million due to an increase in the receivables by Rs. 516.23 million, cash and bank balance by Rs. 1025.10 million, and loans and advances by Rs. 1479.33 million. Opportunities Low per capita expenditure on pharmaceuticals India has one of the lowest per capita health care expenditures in the world, which is likely to correct over the coming years. For instance, India's per capita expenditure on pharmaceuticals is only USD 4, well below USA [USD 1992], Canada [USD 1483], Germany [USD 1819] and United Kingdom [USD 1415]. Privatisation of insurance Presently, only two million Indians - 0.2 percent of the population - are medically insured even as a recent study indicates that 75 percent are potentially insurable. Insurance companies have estimated that household healthcare spending will rise from 2 per cent to 6 percent in the coming years, translating into attractive growth for India's pharmaceutical industry. Rising income levels Rising incomes and an increase in the geriatric population, sustained by advances in hygiene and medicine, are driving a shift in the market away from vitamins, anti-infectives and gastrointestinal treatments towards products that treat cardiovascular problems, central nervous system disorders, diabetes and other complex ailments. By 2010, cardiovascular and central nervous system treatments will account for a higher share of remedies provided. This is expected to result in a faster growth for companies like Glenmark that specialise in related niches. Rural opportunity Presently, 76 percent of the Indian pharmaceutical off-take transpires in urban centres. The four metros namely Delhi, Mumbai, Kolkata and Chennai account for about a fourth of the entire IPM. Within rural India, the market is concentrated in areas where the level of infrastructure development is relatively high. According to the World Development Report 2000, only 50 percent of the population in India has access to healthcare facilities. In rural areas, this percentage is lower. As penetration levels improve, a broader growth for India's pharmaceutical industry is expected. Generics opportunity This has been discussed in detail earlier. Threats The implementation of GATT from 2005 represents the biggest threat facing the IPI. India will recognise product patents, thus reducing process reverse engineering opportunities. Indian companies that have not prepared for this reality will face intense competition and perhaps even de-grow over the coming years. Outlook Glenmark's short-term and long-term outlook appears encouraging for the following reasons: An integrated approach with a presence in R&D, bulk actives and formulations along with an increasing coverage of markets with its own sales force. A strong focus on establishing each element in its integrated chain as a revenue generator. A commitment to expand to new global markets with customised strategies. A horizontal and vertical expansion in therapeutic segments in all target markets. A reputation for being a first-mover in target markets and launching drugs in different therapeutic segments with low cycle times. An aggressive and adaptable marketing approach to widen its doctor reach, e.g. creation of 8 new divisions, each having its own marketing focus. A variety of investments ranging from upgrading manufacturing capabilities, understanding regulatory requirements, alliances, and building IPR assets, like new drugs and delivery systems for the future. Human Resources Development The successes and rate of expansion seen by Glenmark have raised unique challenges for the human resources (HR) function. The main among these are: Management of sourcing processes in countries of operation and the assimilation of the diverse work-force into a Glenmark work ethic. Additionally, the development of processes and systems that cater to a global audience. Continually adding to the skill inventory of the organization to help fuel its growth and value addition to 41 Annual Report 2004-2005
Page 1 and 2: Glenmark Pharmaceuticals Limited An
Page 3: Consolidated Financial Highlights Y
Page 6 and 7: Global. Research-focused. Integrate
Page 8 and 9: Global accounts for half the global
Page 10 and 11: Research-focused 6 In the post-GATT
Page 12 and 13: Integrated 8 Glenmark's business st
Page 14 and 15: Highlights, 2004-05 Consolidated re
Page 16 and 17: Interview with MD & CEO 12 Glenn Sa
Page 18 and 19: Our lead compound for Asthma and CO
Page 20 and 21: Business Divisional Analysis 16 Ind
Page 22 and 23: Domestic Formulations Performance H
Page 24 and 25: 20 accounted for almost 50 percent
Page 26 and 27: Active Pharmaceutical Ingredients 2
Page 28 and 29: Therapeutic segment contribution in
Page 30 and 31: International Formulations Performa
Page 32 and 33: 28 percent evinced a growth spurt i
Page 34 and 35: Research and Development 30 JANUARY
Page 36 and 37: 32 compounds are licensed to global
Page 38 and 39: Diabetes/Obesity Incidence Globally
Page 40 and 41: Global Management Team Name Glenn S
Page 42 and 43: 38 Revenues Glenmark's turnover for
Page 46 and 47: existing employees to keep them in
Page 48 and 49: 44 who are geared to respond to and
Page 50 and 51: Profit & loss Account (Rs. in ‘00
Page 52 and 53: PAT Margin Research and development
Page 54 and 55: Directors’ Report Your Directors
Page 56 and 57: 52 of the Company. On exercising th
Page 58 and 59: Annexure to the Directors’ Report
Page 60 and 61: v. The products launched and sold i
Page 62 and 63: Disclosure pursuant to the provisio
Page 64 and 65: Report on Corporate Governance Purs
Page 66 and 67: B. Given below are the details of r
Page 68 and 69: He is also a Director of following
Page 70 and 71: Further resolutions with requisite
Page 72 and 73: (All figures in Indian Rupees) Mont
Page 74 and 75: ) Risk as to fraudulent encashment
Page 76 and 77: ANNEXURE TO AUDITORS’ REPORT Refe
Page 78 and 79: Balance Sheet Rs. In (’000s) As a
Page 80 and 81: Cash Flow Statement Rs. In (’000s
Page 82 and 83: Schedules forming part of the Balan
Page 90 and 91: Schedules to the Profit & Loss Acco
Page 92 and 93: Schedules forming part of the Finan
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Schedules forming part of the Finan
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Page 100 and 101:
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100 SECTION 212 STATEMENT PURSUANT
Page 106 and 107:
Consolidated Balance Sheet Rs. In (
Page 108 and 109:
Consolidated Cash Flow Statement Rs
Page 110 and 111:
Schedules forming part of the Conso
Page 112 and 113:
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114 Notes to the Consolidated Accou
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Notes to the Consolidated Accounts
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118 Notes to the Consolidated Accou
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14 13 12 43 19 71 49 10 5 20 62 3 3
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