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Abbott India Limited
How our Income was spent
2005 2004
(Rupees in % (Rupees in %Millions) Millions)
1. Materials 2958 64.4 2490 53.8
2. Salaries 250 5.4 244 5.3
3. Depreciation 40 0.9 42 0.9
4. Other Expenses 476 10.4 475 10.3
5. Tax 280 6.1 352 7.6
6. Dividend (Includes 310 6.7 605 13.1Corporate DividendTax)
7. Retained Earnings 281 6.1 418 9.0
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Report & Accounts 2005
Notice
Notice is hereby given that the Sixty-Second Annual General
Meeting of Abbott India Limited will be held at Y B ChavanAuditorium, General Jagannath Bhosale Marg, Mumbai 400 021 on
Wednesday, May 3, 2006 at 10.30 a.m. to transact the following
business:
Ordinary Business:
1. To receive, consider and adopt the Balance Sheet as at
November 30, 2005 and the Profit and Loss Account for the
financial year ended on that date and the Reports of the
Directors and Auditors.
2. To declare a dividend.
3. To appoint a Director in place of Mr Munir Shaikh, who retiresby rotation and, being eligible, offers himself for re-
appointment.
4. To appoint a Director in place of Mr R A Shah, who retires by
rotation and, being eligible, offers himself for re-appointment.
5. To appoint auditors and to fix their remuneration.
Special business:
6. To appoint a Director in place of Mr Mark Masterson, who
was appointed as Additional Director of your Company under
Article 113 of the Articles of Association of the Company, and
who holds office up to the date of this Annual GeneralMeeting by reason of Section 260 of the Companies Act,
1956; but being eligible offers himself for appointment, and in
respect of whom your Company has received notices in
writing from some members expressing their intention of
proposing him as a candidate for the off ice of Director, along
with a deposit of Rs 500 from each such member.
By Order of the Board
Vivek Mohan
Managing Director
Mumbai : March 7, 2006
Registered Office:
3-4 Corporate ParkSion Trombay Road
Mumbai 400 071
NOTES :
i. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED
TO APPOINT ONE OR MORE PROXIES TO ATTEND AND
VOTE INSTEAD OF HIMSELF, AND A PROXY NEED NOT BE
A MEMBER OF THE COMPANY. Proxies, in order to be
effective, should be duly stamped, completed, signed and
deposited at the Registered Office of your Company not less
than 48 hours before the meeting.
ii. An explanatory statement pursuant to Section 173 of the
Companies Act, 1956 relating to the special business to be
transacted at the meeting is appended hereto.
iii. The Register of Beneficial Owners, Register of Members and
Share Transfer Books of your Company will remain closed
from Tuesday, April 25, 2006 to Wednesday, May 3, 2006
(both days inclusive).
iv. Dividend recommended by the Directors, and approved by
the members at the Annual General Meeting will be paid on or
before June 2, 2006. In respect of shares held in physical
form, the dividend will be payable to those members whose
names appear on the Register of Members on May 3, 2006. In
respect of shares held in electronic form the dividend will be
payable to the beneficial owners of the shares as on April 25,
2006 as per details furnished by the Depositories for this
purpose.
v. To ensure against misappropriation of dividend warrants to
be mailed to them, members holding shares in physical form
who have not sent in their bank details are requested toprovide their bank account numbers, names and addresses
of the bank branches to your Company or its Registrars &
Share Transfer Agents for incorporating the same on the
dividend warrants.
vi. Members holding shares in physical form are requested to
immediately intimate to your Company or its Registrars &
Share Transfer Agents, changes, if any, in their registered
addresses along with the pin code number. Members holding
shares in dematerialised mode are requested to forward
intimation for change of address, if any, to their respective
depository participants.
vii. Reserve Bank of India has introduced Electronic Clearing
Service (ECS) for payment of dividend electronically to your
Bank. Your Company proposes to offer this facility to
members located at Ahmedabad, Bangalore, Bhubaneshwar,
Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur,
Kolkata, Mumbai, Nagpur, New Delhi, Patna, Pune and
Trivandrum.
viii. Members holding shares in dematerialized mode are
requested to instruct their respective Depository Participants
regarding bank accounts in which they wish to receive the
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Abbott India Limited
Item No 6
Mr Mark Masterson graduated from Rhodes University, South
Africa in 1984 with a Bachelor of Commerce Degree, and joined
Abbott as Europe Area Product Manager Abbott Diagnostics
Division located in Germany in 1989. He has since served in
various management positions, including Marketing Manager in
the US, for Abbotts Diagnostics Division, General Manager,
Australia/New Zealand and General Manager, South Africa in
Abbotts International Division. His most recent position was
Divisional Vice President and Regional Director PAA for Abbotts
International Division. He was elected to his current position,
namely, Vice President, Pacific/Asia/Africa Operations on June 27,
2005. Prior to joining Abbott, Mr Masterson worked in sales and
marketing roles with Johnson & Johnson.
Presently he is on the Board of Abbott Australia PTY Limited,
Abbott Laboratories NZ Ltd. and Abbott Laboratories (Pakistan)
Ltd. He does not hold any shares of your Company.
His rich and varied experience will benefit the Board and help
provide strategic direction to your Company.
It is recommended that Mr Mark Masterson be appointed as
Director of your Company.
Mr Mark Masterson is interested in the resolution at Item No 6 of
the accompanying Notice relating to his appointment.
By Order of the Board
Vivek Mohan
Managing Director
Mumbai : March 7, 2006
Registered Office:
3-4 Corporate Park
Sion Trombay Road
Mumbai 400 071
Explanatory Statement pursuant to
Section 173 of the Companies Act, 1956
dividends. Further, the bank details as furnished by the
respective Depositories to your Company will be used for the
purpose of distribution of dividend through Electronic
Clearing Service (ECS) as directed by the Stock Exchanges.Your Company/Registrars & Share Transfer Agents will not
act on any direct request from members holding shares in
dematerialized form for change/deletion of such bank details.
ix. In terms of Sections 205A and 205C of the Companies Act,
1956, any dividend remaining unpaid for a period of seven
years from the due date of payment is required to be
transferred to the Investor Education and Protection Fund.
Accordingly unclaimed dividend for the year ended
December 31, 1997 has been transferred to Investor
Education and Protection Fund. Members who have not
encashed their dividend warrants for the year ended
December 31, 1998 or thereafter are requested to write to the
Company/Registrars & Share Transfer Agents.
x. As per the Companies Act, 1956, facility for nominations is
available for shareholders in respect of the shares held by
them. Shareholders who wish to obtain Nomination forms
may write to the Company, or its Registrars & Share Transfer
Agents or to their respective depository participants, as the
case may be.
xi. Shareholders holding shares in identical order of names in
more than one folio are requested to write to the Registrars &
Share Transfer Agents of the Company to enable them to
consolidate their shareholding into one folio.
xii. Trading in your Companys shares through stock exchange is
permitted only in dematerialized/electronic form. The equity
shares of your Company have been inducted in both National
Securities Depository Limited as well as Central Depositories
Services (India) Ltd to enable shareholders to hold and trade
the securities in dematerialised/electronic form. In view of the
numerous advantages offered by the Depository System,
members holding shares in the Company in physical form are
requested to avail of the facility of dematerialisation.
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Report & Accounts 2005
Report of the Directors
TO THE MEMBERS
Your Directors have pleasure in presenting the Sixty-
Second Annual Report and Audited Accounts of the
Company for the year ended November 30, 2005.
Financial Results (Rupees in Millions)
Year ended Year ended
Nov. 30, 2005 Nov. 30, 2004
Sales 4446.7 4050.7
Profit before tax 871.1 1374.5
Profit after tax 591.6 1022.5
Balance brought forward 1435.7 1120.2
Profit available for appropriation 2027.3 2142.7
Appropriations:
Dividend (Proposed) 267.4 534.8
Corporate Dividend Tax *42.6 69.9
Transfer to Reserves 59.2 102.3
Balance carried forward 1658.1 1435.7
*includes Rs 5.1 million for the year ended November 30,
2004
Dividend
Your Directors recommend a dividend of Rs 17.50 per
share on 15,280,100 fully paid-up Equity Shares of Rs 10
each of the Company for the year ended November 30,
2005. The proposed dividend, if approved at the Annual
General Meeting, will absorb a sum of Rs 267.4 million
(Previous year: Rs 534.8 million) and Corporate Dividend
Tax of Rs 37.5 million. The Corporate Dividend Tax is
provided at the rate applicable on the day on which the
Accounts were approved by the Board of Directors.
Reserves
The total Reserves as on November 30, 2005 amounted to
Rs 2011.6 million comprising of Amalgamation Reserve
Rs 3.8 million, Capital Reserve Rs 52.3 million, Capital
Redemption Reserve Rs 9.2 million, Revenue Reserve
Rs 288.2 million and Surplus as per Profit & Loss Account
amounting to Rs 1658.1 million.
Directors Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956
your Directors state that:
1. In the preparation of the annual accounts, the
applicable accounting standards have been followed.
2. Your 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 for the year ended November 30, 2005, and
of the profit of the Company for that period, except for
the following:
The depreciation on computers, photocopiers,
facsimile machines, modems and appliances is
provided at the rate of 80% (See Schedule 17
Significant Accounting Policies 4).
3. Your Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of this Act for
safeguarding the assets of the Company and forpreventing and detecting f raud and other irregularities.
4. Your Directors have prepared the accompanying
Annual Accounts for the year ended November 30,
2005, on a going concern basis.
Fixed Deposits
No fixed deposits were accepted during the year.
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Abbott India Limited
Information pursuant to Section 217 of the
Companies Act, 1956
The information required to be disclosed under Section
217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 with respect to
conservation of energy, technology absorption and foreign
exchange earnings/outgo is given in Annexure I and forms
part of this Report.
The information required under Section 217(2A) of
the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975 is given in Annexure
II and forms part of this Report. As per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the
Report and Accounts is being sent to the shareholders of
the Company, excluding the statement of particulars of
employees under Section 217(2A) of the Companies Act,
1956. Any shareholder interested in obtaining a copy
of the said statement may write to the Company at its
Registered Office.
Directors
Mr Thomas Chen resigned as Director of the Company with
effect from September 21, 2005. The Board placed on
record its sincere appreciation for his guidance and
services rendered by him.
At a meeting of the Board of Directors held on September
21, 2005, Mr Mark Masterson was appointed as additional
director. Mr Mark Masterson holds office upto the date of
the forthcoming Annual General Meeting. Notices in writing
have been received from some members expressing their
intention to propose the appointment of Mr Mark
Masterson as candidate for the office of director of our
Company. Your Directors have pleasure in recommending
his appointment.
Under Article 124 of the Articles of Association of the
Company, Mr Munir Shaikh and Mr R A Shah retire by
rotation at the forthcoming Annual General Meeting and
being eligible, offer themselves for re-appointment.
Your Directors have pleasure in recommending their
appointment.
Auditors
Messrs Deloitte, Haskins & Sells, Chartered Accountants,
retire at this Annual General Meeting and are eligible for
re-appointment as Auditors.
Health, Safety and Environment
The Company continues to accord utmost priority to the
areas of health, safety and environment. Compliance with
relevant regulation on these issues is an integral part of the
Companys operating philosophy.
i. Environment
The Goa Plant has obtained Hazardous Waste
authorization from the State Pollution Control Board
and is treating its wastes as per the directives of the
authorization. A modern effluent treatment plant is
operational at the Plant, treating and discharging
wastewater with parameters of treated effluent well
below the limits set by the local Pollution Control
Board. The treated effluent is recycled for horticulture
within the site. Water recycling activities have been
encouraged and implemented. The emissions from
boiler and generator stacks are monitored regularly
and are well below the limits set by the State Pollution
Control Board.
ii. Health and Safety
As part of its social responsibility towards promoting
health and safety, the Company has formed a Safety
Committee which includes representation from
workmen and meets regularly to review issuesimpacting plant safety and employee health. Training
programmes are conducted regularly on various health
and safety issues including dealing with epidemics,
work safety, road safety, first-aid, etc. An Automatic
External Defibrillator is installed at the Plant and
employees have been trained in its use. Detailed first-
aid training has been imparted to about 25% of
employees.
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Report & Accounts 2005
Routine audits for Environment, Health and Safety
compliance are conducted with the assistance of personnel
from Abbotts global team.
Technology Absorption and Development
Development of new formulations and dosage forms and
modification of existing ones for lifecycle management,
cost containment and improved productivity is an ongoing
process and the Company is constantly engaged in
activities of development and clinical research. The R&D
Centre of the Company located at Goa, which is approved
by the Department of Scientific and Industrial Research,
has made significant contributions towards its assigned
goals of product and process development and cost
reduction through import substitution and vendor
development.
Employees
Relations with the employees remained cordial and your
Directors would like to place on record their appreciationfor the dedication and commitment shown by them.
Reports on Corporate Governance and
Management Discussion & Analysis
A Report on Corporate Governance along with a certificate
from the Auditors of the Company regarding compliance of
the conditions of Corporate Governance as also a
Management Discussion & Analysis Report pursuant to
Clause 49 of the Listing Agreement are annexed hereto.
For and on behalf of the Board
Vivek Mohan R A Shah
Managing Director Director
Mumbai : March 7, 2006
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Abbott India Limited
Annexure I
Information pursuant to the Companies (Disclosure of
Particulars in the Report of the Board of Directors)Rules, 1988.
1. Conservation of Energy
(I) Energy conservation measures taken:
Fully automatic packaged type boilers having fuel
efficiency in excess of 80% have been installed.
Steam condensate is being recovered for re-use in
boilers.
Power factor improvement capacitors have been
installed for reducing the reactive power
consumption.
Maximum demand controller has been installed for
limiting development of peak demand.
(II) Additional investments and proposals, if any,
being implemented for reduction in consumption
of energy:
Nil.
(III) Impact of the measures at (I) and (II) above for
reduction of energy consumption and consequent
impact on the cost of production of goods:
The installation of capacitors and maximum
demand cont roller has resulted in lower maximum
demand for power.
(IV) Total energy consumpt ion and energy
consumption per unit of production:
A. Power & Fuel Consumption
2005 2004
(a) Electricity
(i) Purchased
(Unit Millions) 3.0 1.8
Total amount
(Rs Millions) 20.1 9.1
Rate/Unit (Rs) 6.63 5.18
(ii) Own Generation
Through Diesel
Generator
Through Steam
turbine/Generator N.A. N.A.
2005 2004
(b) Coal N.A. N.A.
(c) Furnace Oil
Quantity (kilo ltrs) 40.50 58.31
Total amount
(Rs Millions) 0.6 0.8
Average rate (Rs) 15.65 13.09
(d) Others/Internal
Generation N.A. N.A.
B. Consumption per Unit of Products
Since the Goa Plant manufactures different
dosage forms it is not practical to apportionutility cost based on available records.
2. Technology Absorption
A. Efforts made in technology absorption.
Following were the achievements of the
Companys R&D Centre at Goa:
1. Development of new Pharmaceutical
Products.
2. Establishing new technical capabilities.
3. Import substitutions and new vendor
development.
4. Optimization, standardization and
improvement of products and manufacturing
processes.
The R&D Centre developed new pharmaceutical
products in the areas of liquid orals, tablets,
capsules and topical preparations. It also
undertook the quality improvement of existing
products and manufacturing processes to
meet ever-changing regulatory and quality
requirements.
B. Benefits derived as a result of the above R & D.
A well focused R&D effort has helped the
company in launching a number of new products
in the Indian market. Manufacturing process
optimization helped to bring in improved quality
and efficiency and substitution of imported
materials helped to reduce cost and to improve
the efficiency of supply chain. R&D work has also
resulted in improving the stability of some of the
products.
Cost of own
generation is
not comparable
as the generator
sets were
operated for trial
runs.
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Report & Accounts 2005
C. Future plan of action.
R&D activities will continue to focus on new
product development, improvement in the existing
formulations/process and improving operationalefficiencies.
D. Expenditure on R&D.
Rs in Million
(a) Capital 0.5
(b) Recurring 15.1
(c) Total 15.6
(d) Total R&D expenditure
as a percentage of total turnover 0.4 %
E. Technology absorption, adaptation andinnovation.
(a) Efforts, in brief, made towards technology
absorption, adaptation and innovation.
The Company on an ongoing basis interacts
with Abbott, USA, for technical expertise
for products of high technology and
pharmaceutical formulations.
(b) Benefits derived as a result of the above
efforts, e.g., product improvement, cost
reduction, product development, import
substitution, etc.
The Company has benefited substantially as a
result of the emphasis on innovation.
Reduction in energy consumption and
improvement in product quality are some of
the benefits achieved in the current year.
(c) Imported technology (imported during the last
five years reckoned from the beginning of the
financial year).
Nil
3. Foreign Exchange Earnings and Outgo
(I) Activities relating to exports; initiatives taken to
increase exports; development of new export
markets for products and services, and export
plans.
The total foreign exchange earned during the year
amounted to Rs 35.3 million, which includes a
consideration of Rs 1.7 million towards sales
promotion and Rs 33.6 million towards exports.
(II) Total foreign exchange used and earned.
A. Total foreign exchange used
Rs in Million
(a) On import of raw materials,
finished goods, consumable
stores and capital goods 113.4
(b) Expenditure in foreign
currencies for technical
support charges, data center
charges, business travel,
subscription, commission on
export sales, registration
fees, etc. 10.1
(c) Remittance during the year
in foreign currency on account
of dividend 330.0
B. Total foreign exchange earned 35.3
For and on behalf of the Board
Vivek Mohan R A Shah
Managing Director Director
Mumbai : March 7, 2006
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Abbott India Limited
Report on Corporate Governance
Name of Directors Category: Attendance at Membership Membership/
Executive/ of other Board(s) Chairmanship of
Non-Executive/ Board Annual General (including alternate other Board
Independent Meetings Meeting directorships and Committees(April 26, 2005) directorships in
private companies)
Mr Munir Shaikh Non-Executive Director 7 Yes 3*
Chairman of the Board
Mr Vivek Mohan Executive Director 7 Yes
Managing Director
Mr R A Shah Non-Executive, 6 Yes 23* 10
Independent Director (includes
Chairmanship o f4 companies)
Mr Ashok Dayal Non-Executive, 5 Yes 4 1
Independent Director
Mr Thomas Chen Non-Executive Director 1 No 1*
(Resigned with effect
from 21.09.2005)
Mr David Wardell Non-Executive Director 1 No 3*
Mr Mark Masterson Non-Executive Director 1 No 3*
(Appointed as
Additional Director
with effect from 21.09.2005)
* including directorships of companies incorporated outside India.
(c) During the financial year 7 Board Meetings were held on the following dates:
December 8, 2004, January 25, 2005, March 22, 2005, April 26, 2005, June 28, 2005, August 3, 2005, and
September 21, 2005.
1. Companys Philosophy on Corporate Governance
The Companys philosophy on corporate governance is to
conduct its affairs in a manner which is transparent, clear
and evident to those having dealings with or having a stake in
the Company, namely shareholders, lenders, creditors and
employees. The Companys philosophy on corporate
governance is thus concerned with the ethics, values and
morals of the Company and its directors, who are expected
to act in the best interests of the Company and remain
accountable to shareholders and other beneficiaries for
their action.
2. Board of Directors
(a) The present strength of the Board is six directors(1 executive director and 5 non-executive directors, of
which two are independent directors) who are
professionals and have expertise in their respective
functional areas.
(b) The attendance at Board Meetings and the last Annual
General Meeting of each of the directors during the
financial year of the Company was as under:
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Report & Accounts 2005
3. Audit Committee
The Audit Committee of members of the Board comprises of
three non-executive directors of which, Mr Ashok Dayal, who
is Chairman of the Audit Committee and Mr R A Shah, areindependent directors. Mr Munir Shaikh is the other member
of the Audit Committee. Mr G S Kurmi, Company Secretary,
was the Secretary of the Audit Committee until his resignation
on February 28, 2006.
The role of the Audit Committee and its terms of reference are
in accordance with the provisions of Clause 49 of the Listing
Agreement and include oversight of the companys financial
reporting process, reviewing the financial statements,
reviewing the adequacy of internal audit function,
discussions with internal and statutory auditors periodically
about their scope of audit and adequacy of internal control
systems, discussing with internal auditors on any significant
findings. The Audit Committee also acts as a link between the
Board of Directors and the internal and statutory auditors.
The duly constituted Committee met five times during the
financial year on January 25, 2005, March 22, 2005, April 26,
2005, June 28, 2005 and September 21, 2005 and these
meetings were attended by all the members.
4. Shareholders/Investors Grievance Committee
This Committee comprises of Mr Ashok Dayal, who is a non-
executive independent director and Chairman of the
Committee. Mr Vivek Mohan, the Managing Director, is the
other member of the Shareholders/Investors Grievance
Committee. Mr G S Kurmi, Company Secretary, was theCompliance Officer until his resignation on February 28,
2006.
During the financial year, the Committee held 4 meetings on
January 25, 2005, March 22, 2005, June 28, 2005 and
September 21, 2005.
A summary of complaints received and resolved by the
Company during the year ended November 30, 2005 is given
below:
Received Cleared
Non-receipt of share certificates
duly transferred 13 13
Non-receipt of dividend warrants 43 43
Miscellaneous 58 58
Letters from SEBI, Stock
Exchanges and Department of
Company Affairs 2 2
As on November 30, 2005, there were no pending share
transfers. Barring certain cases pending in Courts/Consumer
Forums relating to disputes over the title of the shares in
which the Company has been made a party, no investor
complaint is pending for a period exceeding one month.
5. Remuneration of Directors
The remuneration of the directors during the financial year
was as follows:
A. Executive Directors
All elements of remuneration package i.e. salary,
benefits, bonuses etc. paid to the Executive Director,
Mr Vivek Mohan, amount to Rs 20.3 million.
(a) The above remuneration includes commission/
performance linked incentive or bonus of Rs 2.1
million, based on certain pre-agreed criteria.
(b) The Agreement with Mr Vivek Mohan is for a period
of 5 years from November 1, 2004 and terminable
by 6 months notice on either side as per the
approval dated July 25, 2005 received from the
Central Government, however, the Company may
opt to pay 6 months remuneration including salary,allowances, benefits/perquisites in lieu of notice.
(c) Presently, the Company does not have a Scheme
for grant of Stock Options to the Directors.
B. Non-executive Directors
Two of the Non-Executive Directors, Mr R A Shah and
Mr Ashok Dayal were paid sitting fees totaling
Rs 55,000/- and Rs.70,000/- respectively for attending
Board meetings and various Committee meetings of the
Company.
The Company paid fees amounting to Rs 0.4 million to
its Solicitors, M/s Crawford Bayley & Co., of which
Mr R A Shah is a partner, for professional services
rendered to the Company. The quantum of professional
fees received by M/s Crawford Bayley & Co. from the
Company forms a very small portion of the total
revenues of M/s Crawford Bayley & Co. and less than a
fraction of the total revenues of the Company.
C. None of the NonExecutive Directors and relatives is
holding any shares of the Company except for Mr R A
Shah who through relatives holds 5098 shares.
6. General Body Meetings
Financial Date Time LocationYear
2002 April 29, 3.00 p.m. Y B Chavan Auditorium
2003 General JagannathBhosale MargMumbai 400 021
2003 April 27, 3.00 p.m. Y B Chavan Auditorium2004 General Jagannath
Bhosale MargMumbai 400 021
2004 April 26, 3.30 p.m. Y B Chavan Auditorium2005 General Jagannath
Bhosale MargMumbai 400 021
At present, no special resolutions are proposed to be
conducted through postal ballot.
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Abbott India Limited
7. Disclosures
There were no transactions of a material nature with the
Directors or the management, the Companys subsidiary or
relatives of the Directors during the financial year of theCompany which could have potential conflict with the
interests of the Company at large. The Register of Contracts
containing the transactions in which Directors are interested
is placed before the Board regularly for its approval.
Transactions with related parties are disclosed in Note No 22
of Schedule 17to the Accounts in the Annual Report.
There were no instances of non-comp liance by the Company
on any matters related to the capital markets or penalties/
strictures imposed on the Company by the Stock Exchange
or SEBI or any statutory authority during the last 3 financial
years.
8. Means of Communication
Quarterly results are published in one English daily
newspaper (Free Press Journal) circulating in the country and
one Marathi newspaper (Navshakti) published f rom Mumbai.
These quarterly results are also made available on the
website of the Company (www.abbott.co.in) and on SEBIs
EDIFAR (Electronic Data Information Filing And Retrieval)
website (www.sebiedifar.nic.in). During the financial year, the
Company has not made any presentation to the institutional
investors or analysts.
The Management Discussion and Analysis Report forms a
part of this Annual Report.
9. General Shareholder Information
Annual General Meeting : Wednesday, May 3, 2006
at 10.30 a.m
Y B Chavan Auditorium,
General Jagannath Bhosale
Marg,
Mumbai 400 021
Financial Calendar : The Company fol lows December
1 November 30 as its financial
year. The unaudited results for
every quarter beginning from
December are declared in the
month following the quarter
except for the last quarter, for
which the audited results are
declared within 3 months of the
close of the financial year
Date of Book Closure : April 25, 2006 to
May 3, 2006 (both days
inclusive)
Dividend Payment Date : On or before June 2, 2006
Listing On Stock : Bombay Stock Exchange
Exchange Limited
Stock Code : 500488
Market Price Data (High/Low during each month) on BSE:
Month High Low
December 2004 768.00 613.60
January 2005 745.00 625.00
February 2005 749.00 605.00
March 2005 695.00 615.00
April 2005 702.00 620.00
May 2005 682.00 630.00
June 2005 694.90 582.00
July 2005 690.00 595.00
August 2005 740.00 640.00
September 2005 688.95 611.00
October 2005 678.00 624.95
November 2005 743.00 647.00
Performance in comparison to broad based indices:
Abbott Share Price / BSE 100
Year 2004 - 2005
Registrars and Share : Sharepro Services (India)Transfer Agents Private Limited,
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road,
Chakala, Andheri (East),
Mumbai 400 099.
Phone : 2834 82 18 / 2832 98 28 /
2821 51 68
Fax : 2837 56 46
Email : [email protected]
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10. Share Transfer System
To expedite the process of share transfers, the Board has
delegated the powers of share transfers to a Share Transfer
Committee comprising of the officers of the SecretarialDepartment, who attend to the share transfer formalities at
least once in a fortnight. The Share Transfer Committee also
considers transmission of shares, issue of duplicate
certificates and issue of certificates on split/consolidation/
renewal. The business transacted at the Share Transfer
Committee meetings is also noted at every meeting of the
Board.
Shares lodged for transfer at the Registrars office are
normally processed within 15 days from the date of
lodgement, if the documents are clear in all respects. All
requests for dematerialisation of shares are processed and
the confirmation is given to the depositories within 15 days.
11. Distribution of shareholding as on November 30, 2005
Number of Number Percent- Number Percent-
Equity share of Share- age of of shares age of
holdings holders Share- share-
holders holding
1 - 50 5,636 40.71 149,074 0.98
51 - 100 3,171 22.90 282,549 1.85
101 - 500 3,493 25.23 868,743 5.69
501 - 1000 831 6.00 611,268 4.00
1001 - 5000 643 4.65 1,293,428 8.46
5001 - 10000 36 0.26 244,849 1.60
10001 & above 34 0.25 11,830,189 77.42
Total 13,844 100.00 15,280,100 100.00
12. Shareholders profile as on November 30, 2005
Sr. Category of Shareholders No. of % to
No. shares held total
1. Foreign Collaborators 9,428,184 61.70
2. Banks 6,400 0.04
3. Financial Institutions 1,352,722 8.85
4. Foreign Institutional Investors 214
5. Overseas Corporate Bodies 200
6. Mutual Funds 835,384 5.47
7. Domestic Companies 158,308 1.05
8. Non-Resident Indians 44,946 0.29
9. Others 3,453,742 22.60
Total 15,280,100 100.00
13. Dematerialisation of Shares as on November 30, 2005
92.30% of the Companys total paid-up share capital
(including 61.7% held by the parent company) representing
14,103,804 shares are held in dematerialised form. TheCompanys shares are traded on BSE A Group.
14. Plant Location
L-18/19, Verna Industrial Estate, Goa
15. Address for correspondence
Shareholders should address all correspondence to the
Companys Registrars and Share Transfer Agents, Sharepro
Services (India) Private Limited, at the address mentioned
above or at :
912, Raheja Centre, Free Press Journal Road,
Nariman Point, Mumbai 400 021
Contact Person: Ms Mazrine Wadia/Mr Ramesh Babu
Telephone : 2288 15 68 / 2288 15 69
Fax : 2282 54 84
Email : sharepro_services@roltanet .com
16. Appointment/Re-appointment of Directors
(1) As required by Clause 49.VI.A. of the Listing Agreement,
the profile of Mr Mark Masterson is given in the
Explanatory Statement forming part o f the Notice for t he
62nd Annual General Meeting.
(2) Mr Munir Shaikh and Mr R A Shah retire by rotation at the
ensuing Annual General Meeting and are eligible for
re-appointment.(a) Mr Munir Shaikh joined Abbott in 1968, and has
since served in several management posit ions with
Abbott in Asia, Latin America and United States,
including General Manager Pakistan, General
Manager Caribbean, Director Business
Development, Pacific and Far East, Regional
Director Pacific/Asia/Africa, Regional Director
Southeast Asia/ India in the Abbott International
Division. He was named Vice-President and
Regional Director, Southeast Asia/Sub-continent
Korea in 2003 and most recently, appointed
Divisional Vice President, Southeast Asia/Middle
East/Africa, Abbott Nutrition International, in June
2005, based in Singapore.
He is a Fellow of The Institute of Chartered
Accountants in England and Wales. He is also a
Director on the Board of Abbott Laboratories
(Singapore) Pte Ltd, Abbott Laboratories (Pakistan)
Limited and Pt Abbott Indonesia.
(b) Mr R A Shah is a leading Solicitor and a Senior
Partner of M/s Crawford Bayley & Co., a firm of
Solicitors and Advocates. He specialises in a broad
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Abbott India Limited
spectrum of corporate laws. Mr R A Shah and his
relatives hold 5098 shares in the Company.
Presently he is the Chairman/Director and
Chairman or member of Audit Committees of thefollowing companies:
Name of the Company Designa- Chairmanship
tion or Membership
of Audit
Committee of
Board
1. Godfrey Phillips Chairman
India Ltd
2. Roche Scientific Chairman
Co (I) Pvt Ltd
3. Pfizer Limited Chairman Chairman
4. Colgate Palmolive (I) Vice- Chairman
Ltd Chairman
5. Asian Paints Director
(I) Ltd
6. Atul Limited Director
7 . The Bombay Dyeing & Director Chairman /
Mfg. Co. Ltd Member
8. BASF India Ltd Director Member
9. Colour Chem Ltd Director Member
10. Clariant India Ltd Director
11. Jumbo World Director
Holdings Ltd
(Foreign Company)
12. Deepak Fertilizers & Director
Petrochemicals
Corporation Ltd
13. Procter & Gamble Director Member
Hygiene and
Healthcare Ltd
14. Nicholas Piramal Director Chairman
India Ltd
15. Century Enka Lt d Alternate Member (Alternate)
Director
16. Wockhardt Ltd Alternate Member (Alternate)Director
17. BASF Polyurethanes Alternate
India Ltd Director
18. Gillette India Ltd Director
19. Lupin Limited Director
20. Modicare Limited Alternate
Director
21. RPG Life Sciences Alternate
Ltd Director
22. Schrader Duncan Ltd. Alternate
Director
23. Uhde India Limited Alternate
Director
Name of the Company Designa- Chairmanship
tion or Membership
of Audit
Committee of
Board
On behalf of the Board
Vivek Mohan R A Shah
Managing Director Director
Mumbai : March 7, 2006
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To,
The Members of Abbott India Limited
We have examined the compliance of conditions of Corporate
Governance by Abbot t India Limited for the year ended November
30, 2005, as stipulated in Clause 49 of the Listing Agreement of the
said Company with The Stock Exchange, Mumbai.
The compliance of conditions of Corporate Governance is the
responsibility of the Management. Our examination was limited to
procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of the Corporate
Governance. It is neither an audit nor an expression of opinion on
the financial statements of the Company.
In our opinion and to the best of our information and according to
the explanations given to us, we certify that the Company has
complied in all material respects with the conditions of Corporate
Governance as stipulated in the above mentioned Listing
Agreement.
Auditors Certificate for CorporateGovernance
As required by the guidance note issued by The Institute of
Chartered Accountants of India, we have to state that, based on
the information received from the Companys Registrars and
Share Transfer Agents and as per the records maintained by theInvestor Grievance Committee, barring certain cases pending in
courts/consumer forums, relating to disputes over the title of
shares in which the Company has been made a party, no investor
grievance is pending for a period exceeding one month against the
Company.
We further state that such compliance is neither an assurance as
to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the
affairs of the Company.
FOR DELOITTE HASKINS & SELLS
Chartered Accountants
K A KATKI
Mumbai Partner
March 7, 2006 Membership No. 038568
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Abbott India Limited
Management Discussion &Analysis Report
1. Industry structure and developments
The Indian pharmaceutical market recorded sales of Rs 230
billion with a growth of 8.6% on MAT basis in the year 2005.
After an average growth of just 6% in the previous two years,
and a decline in the first quarter of 2005 due to reduced
buying by trade prior to implementation of Value Added Tax
(VAT), for the most part the Industry recovered and grew in
line with the projected GDP growth.
Indian pharmaceutical market ranks 4th in the world in terms
of volume and 13th in terms of value. The Government has
taken a number of steps to fuel further growth in the sector
such as export incentives, patent protection, import
liberalization and increased outlay on health.
During the year the Government amended the Patents Act to
provide for grant of product patents in respect of
pharmaceuticals, however, the impact of certain provisions of
the amended Patents Act such as patentability and
compulsory licensing, will be known only over a period of
time through implementation/administration of the new law.
The Draft National Pharmaceuticals Policy 2006 (Part A) has
been circulated and addresses issues in relation to
integration of drug regulatory bodies, IPR implementation,
data protection in clinical trials, price negotiations for
patented drugs, trade margins, government procurement,
branding and Research & Development. Part B of this
document relating to pricing is awaited.
MRP (Maximum Retail Price) based excise duty was made
applicable to the pharmaceutical industry from January 2005.
This caused many pharmaceutical companies, including your
Company, to revisit their manufacturing strategy.
2. Opportunities and Threats
Introduction of product patents from 2005 presents an
opportunity for the growth of the pharmaceutical industry. It
will facilitate speedier introduction of new products, attract
investment in research and lead to development of the
industry and market. Global Phase II and III clinical trials can
now be concurrently carried out in India.
Transition to VAT system is likely to benefit the industry in the
long run through uniformity and transparency in prices all
over the country. It is expected that the remaining seven
states that have not adopted the Value Added Tax system are
likely to join the mainstream in the near future.The industry also suffered on account of imposition of MRP
based Excise Duty on formulations. Pursuant to industry
representations made to the Government, changes are
expected in Excise Duty as well as Central Sales Tax, which
will provide an opportunity to revamp the strategy in
manufacturing, sourcing and distribution operations.
Eventually, elimination of Central Sales taxes (CST) will lead
to simplification of the distribution chain.
The Indian middle class is growing steadily and so also the
prospects for health insurance. The Indian market is very
under-insured and less than 4% of the population is covered
by State Health Insurance and private health insurance is
limited to a miniscule number. It is estimated that the number
of Indians who can afford quality private healthcare stands at
about 100 million, which is about 1/3rd of the middle class
population and 1/10th of the total population. Increasingpenetration of health insurance coupled with rising
purchasing power is expected to stimulate the market.
Healthcare reforms are also expected to expand the
coverage of organized healthcare to rural areas leading to
increased supp ly of secondary care.
All the above factors are likely to provide renewed
opportunities for the growth of pharmaceutical industry. Yet
there are some factors that limit Indias appeal for
multinational companies. The absence of a clear, objective
and transparent policy on drug price control continues to
impact the overall industry direction. The new Draft National
Pharmaceuticals Policy addresses some of the issues,
however, policy relating to price control is yet to be
announced. Similarly, the amended Patents Act does nothave adequate clarity with respect to definition of patentable
invention, data protection and compulsory licensing.
3. Segmentwise performance
The Company operates only in the pharmaceutical segment.
It has recorded faster growth than other multinational
companies across various therapeutic segments, especially
gastroenterology, neurology and metabolic disorders.
India is afflicted by a variety of health issues. In addition to
chronic diseases such as cardiovascular disorders, diabetes
and depression, which are prevalent in the developed
countries, India also has to face up to infectious diseases, re-
emerged diseases such as tuberculosis (TB) and malaria and
dreaded diseases such as cancer and AIDS. Although acutediseases are on the decline, chronic diseases are on the rise
due to changing lifestyles.
Your Companys product portfolio provides therapies for
both acute and chronic health condit ions. The performance of
the Company is in line with trends observed in the market,
viz, good growth in chronic disease areas, however, the
volumes in acute therapy areas such as gastroenterology and
pain management continue to be under pressure.
India is seeing the emergence of corporate hospitals and
world-class facilities. Abbott Indias hospital product
portfolio includes anaesthesia and neonatology and
continues to record good growth over the market.
4. OutlookIt is the Companys strategy to continue to focus on its
core therapeutic areas in pharmaceuticals, viz, CNS,
gastroenterology, metabolics, pain management, urology,
specialized anaesthesia range and neonatology. Growth in
chronic therapy areas is expected to continue while
innovations and life cycle management will continue to
support performance in acute therapy segments.
While keeping its focus on achieving a higher sales growth,
the Company continues to work on extracting cost related
efficiency in areas of Supply Chain as well as Administration
and Selling expenses and thus deliver improved operating
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margins. The Company will also continue to work on
increasing capacity utilization at its Goa plant and aligning
manufacturing/distribution strategy with emerging
opportunities.
5. Risks and Concerns
Introduction of new drugs and proliferations of generic
products have affected both demand and pricing of your
Companys products, specially in case of acute therapy.
Lack of clarity on the Governments future policy in relation to
Price Control continues to be a major risk facing the industry
even though draft policy has been circulated on other issues.
The industry also continues to be faced by the challenges
posed by manufacturers of spurious drugs and the company
is taking various measures to counter the threat.
There could be an impact on demand during the year due to
the uncertainty on VAT as the remaining seven States take
their decisions on movement to the VAT regime.Introduction o f new taxes and changes in existing tax laws as
well as other statutes particularly in the pharmaceutical
sector continue to pose a challenge to the industry.
6. Internal Control Systems and their adequacy
Your Company has an adequate system of internal controls
which ensures that its assets are protected against loss from
unauthorized use or disposition and all transactions are
authorized, recorded and reported in conformity with
generally accepted accounting principles.
The Internal control systems are documented with clearly
defined authority limits. These systems are designed to
ensure accuracy and reliability of accounting data, promot ion
of operational efficiency and adherence to the prescribedmanagement policies. These policies are periodically
updated to meet current business requirements.
The Company has a regular process of Internal Audit by a
leading firm of Chartered Accountants whose scope of work
and work programme is agreed with the Audit Committee at
the beginning of each year. The findings of the Internal
Auditors are discussed with the Audit Committee and
adequate mitigatory steps are taken accordingly to plug
control weaknesses pointed out.
In line with the requirement of the amended Clause 49 of the
Listing Agreement which came into force on January 1, 2006
the Company had appointed a firm of Consultants to do a
complete review of risks faced by the Company and to help
put in place a Risk Management Framework and theirfindings/recommendations were discussed with the Board of
Directors/Audit Committee. Risk Management as a formal
concept is an integral part of the business process and the
recommendations are being implemented.
7. Discussion on Financial Performance with respect to
Operational Performance
During the year under review, Sales amounted to Rs 4446.7
million (representing an increase of 9.8% over Last Year) and
Profit Before Tax stood at Rs 871.1 million. The Operating
Profit for the year amounted to Rs 762.6 million as compared
to Rs 842.5 million Last Year. This was impacted due to levy
of Excise Duty on Maximum Retail Price (MRP) and
destocking by t rade in the initial part of the year on account ofintroduction of Value Added Tax (VAT) even though the
Company took a number of steps to mitigate their impact.
Your Company continues to focus on extracting cost
efficiency in areas of Supply Chain, Selling and
Administrative expenses and to improve returns on c apital.
There were unprecedented rains and floods in Mumbai and
Southern States, causing huge loss to life and property and
resulting in disruption of supplies. The Company too
sustained loss at the Central Warehouses, however, the loss
was covered by insurance.
The Companys income from investment of surplus funds
came down significantly as compared to last year on account
of the fall in interest rates as well as the fact that a large
portion of income in the last year related to capitalappreciation of investments in the growth schemes of Mutual
Funds. The Company adopts a conservative approach
towards investments and its investment st rategy is to ensure
safety of capital and liquidity, however, this is reviewed
continuously with consultants to optimize returns.
Last year, the Company had achieved Class A accreditation
which was re-confirmed recently. This recertification marks a
continued commitment to excellence whereby the company
continuously raises the bar and sets a high level of
expectations of its business, its people and processes. Your
company has tremendous opportunities to grow the
business, and ensuring sound processes will enable it to
achieve objectives with greater speed.
8. Material developments in Human Resources/Industrial
Relations
During the year under review the Company has made
significant progress towards developing a high-performance
work culture and upgradation of talent and capabilities. Key
Human Resources (HR) initiatives have been built into the
strategic plan of the Company in order to attract, develop and
create a talent pool capable of achieving the business
objectives of the Company. Focused initiatives were
undertaken to improve HR process too ls and techniques.
With a view to recognize individuals who have shown
outstanding performance, various recognition programs were
introduced during the year.
The number of employees as on November 30, 2005 was858.
For and on behalf of the Board
Vivek Mohan R A Shah
Managing Director Director
Mumbai : March 7, 2006
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Abbott India Limited
Auditors Report
To the Members of Abbott India Limited
1. We have audited the attached Balance Sheet of Abbott IndiaLimited, (the Company) as at November 30, 2005, the Profit
and Loss Account and also the Cash Flow Statement for the
year ended on that date annexed thereto. These financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well asevaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Statement on Companies (Auditors
Report) Order, 2003 issued by the Central Government of
India in terms of sub-section (4A) of Section 227 of the
Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of
the said Order.
4. Further to our comments in the Annexure referred to above,
we report that:
(i) we have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
(iii) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with
the books of account;
(iv) in our opinion, the balance sheet, profit and loss account
and cash flow statement dealt with by this report complywith the accounting standards referred to in sub-section
(3C) of Section 211 of the Companies Act, 1956;
(v) on the basis of written representations received from
directors as on November 30, 2005 and taken on record
by the Board of Directors, we report that none of the
directors is disqualified as on November 30, 2005 from
being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act,
1956;
(vi) in our opinion and to the best of our information and
according to the explanations given to us, the said
accounts read together with notes thereon, give the
information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in
conformity with the accounting principles generally
accepted in India:
(a) in the case of the balance sheet, of the state of
affairs of the Company as at November 30, 2005;
(b) in the case of the profit and loss account, of the
profit for the year ended on that date; and
(c) in the case of the cash flow statement, of the cash
flows for the year ended on that date.
For DELOITTE HASKINS & SELLS
Chartered AccountantsK A KATKI
Mumbai, Partner
March 7, 2006 Membership No. 038568
1. In our opinion and according to the information and
explanations given to us, the nature of the Companys
business/activities during the year are such that clauses xiii,
xiv, xviii, xix, xx are not applicable to the Company.
2. In respect of its fixed assets:
a. The Company has maintained proper records showing
full particulars, including quantitative details and
situation of fixed assets.
b. Physical verification of fixed assets is being conducted
in a phased programme by the management designed to
cover all assets over a period of three years, except for
fixed assets lying with third parties in respect of which
the Company is in the process of obtaining necessary
confirmations, which in our opinion is reasonable having
regard to the size of the Company and the nature of
assets. The discrepancies noticed on such verification
were not material and have been properly dealt with in
the books of account.
c. Although some of the fixed assets have been disposed
off during the year, in our opinion and according to the
information and explanations given to us, the ability ofthe Company to continue as a going concern is not
affected.
3. In respect of its inventories:
a. As explained to us, the inventories were physically
verified during the year by the management at
reasonable intervals.
b. In our opinion and according to the information and
explanations given to us, the procedures of physical
verification of inventories followed by the management
are reasonable and adequate in relation to t he size of the
Company and the nature of its business.
Annexure referred to in paragraph 3 of theAuditors Report on the Accounts of AbbottIndia Limited
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c. In our opinion and according to the information and
explanations given to us, the Company has maintained
proper records of its inventories and the discrepancies
noticed on such physical verification between physical
stock and book records were not material and havebeen adequately dealt with in the books of account.
4. According to the information and explanations given to us,
the Company has not granted or taken any loan secured or
unsecured to or from companies, firms or other parties
covered in the register maintained under Section 301 of the
Companies Act, 1956.
5 In our opinion and according to the information and
explanations given to us, there are adequate internal control
systems commensurate with the size of the Company and
nature of its business for the purchase of inventory and fixed
assets and for the sale of goods. There were no transactions
in respect of sale of services. During the course of our audit,
we have not observed any continuing failure to correct major
weaknesses in internal controls.
6. To the best of our knowledge and belief and according to the
information and explanations given to us, there were no
transactions required to be entered in the register maintained
in pursuance of Section 301 of the Companies Act, 1956.
7. In our opinion and according to the information and
explanations given to us, the Company has not accepted any
deposits within the meaning of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public.
8. In our opinion, the internal audit functions carried out during
the year by an external entity appointed by the management
have been commensurate with the size of the Company and
nature of its business.
9. We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture of
formulations, pursuant to the Order made by the Central
Government for the maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 and are of theopinion that prima facie, the prescribed records have been
maintained and the prescribed accounts are in the process of
being made up. We have however, not made a detailed
examination of the records with a view to determining
whether they are accurate or complete. To the best of our
knowledge and according to the information and
explanations given to us, the Central Government has not
prescribed the maintenance of cost records for any other
product of the Company.
10. In respect of statutory dues:
a. According to the information and explanations given to
us, the Company has been regular in depositing
undisputed statutory dues, including Provident Fund,
Investor Education and Protection Fund, Employees
State Insurance, Income tax, Sales tax, Wealth tax,
Service tax, Customs Duty, Excise Duty, Cess and any
other material statutory dues with the appropriate
authorities during the year. Further, since the Central
Government has till date not prescribed the amount of
cess payable under Section 414A of the Companies Act,
1956, we are not in a position to comment upon the
regularity or otherwise of the Company in depositing the
same.
b. According to the information and explanations given to
us, details of disputed excise duty and sales tax, which
have not been deposited as on November 30, 2005 on
account of any dispute are given below:
Nature of Statute Nature of Dues Amount Period to Forum where dispute is pending
Rs in which the
Millions Amount relates
Central Excise Act, 1944 Classification dispute 0.3 1991-1992 Commissioner (Appeals)
Modvat Credit availed on inputs 0.1 1994 Commissioner
Modvat Credit availed on capital
goods 0.03 1994 Assistant Commissioner
Recovery of amount allegedly
refunded erroneously 0.1 2000 Assistant Commissioner
Demand for excise duty on empty
plastic containers 0.05 1998-2002 Assistant Commissioner
Classification dispute 3.0 2005 Commissioner (Appeal)
Modvat Credit availed on capital
goods 0.1 2001 Deputy Commissioner
The Bombay Sales Tax Act, 1959 Disputed Set off 4.0 1999- 2000 Sales Tax Tribunal
Uttar Pradesh Trade Tax Act, 1948 Disallowances of Credit Notes 0.4 1989- 1990 and Sales Tax Tribunal
1998-1999
Non-submission/Rejection of
relevant statutory forms 0.1 2000-2001 Sales Tax Tribunal
Non-submission/Rejection of
relevant statutory forms 0.01 2001-2002 Deputy Commissioner of Trade Tax
Central Sales Tax Act, 1956 Non-submission/Rejec tion o f
relevant statutory forms 0.01 2001-2002 Deputy Commissioner of Trade Tax
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Abbott India Limited
There were no disputed dues in respect of Income tax,
Customs Duty, Wealth tax, Service tax and Cess during the
year.
11. The Company does not have any accumulated losses as at
the end of the financial year. The Company has not incurredcash losses during the financial year covered by our audit and
the immediately p receding financial year.
12. In our opinion and according to the information and
explanations given to us, the Company has not ob tained any
borrowings from any banks or financial institutions or by way
of debentures.
13. In our opinion, the Company has not granted loans and
advances on the basis of security by way of pledge o f shares,
debentures and other securities.
14. In our opinion and according to the information and
explanations given to us, the Company has not given any
guarantees for loans taken by others from banks and financial
institutions.
15. The Company has not obtained any term loans.
16. According to the information and explanations given to us,
and on an overall examination of the balance sheet of the
Company, funds raised on short-term basis have prima-facie,
not been used during the year for long-term investment.
17. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by
the Company was noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
K A KATKI
Mumbai, Partner
March 7, 2006 Membership No. 038568
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As at As at
November 30, November 30,
2005 2004
Schedule Rupees in Rupees in Rupees in
Millions Millions Millions
I. SOURCES OF FUNDS
(1) SHAREHOLDERS FUNDS
(a) Share Capital .... .... ..... .... ..... ..... .... ..... .... ..... ..... .... ... (1) 152.8 152.8
(b) Reserves and Surplus ...... ..... ..... ..... .... ..... ..... ..... ... (2) 2,011.6 1,730.0
TOTAL SHAREHOLDERS FUNDS ............................ ..... 2,164.4 1,882.8
(2) LOAN FUNDS
Unsecured Loans................................................... (3) 18.2 21.9
(3) DEFERRED TAX LIABILITY (NET)................................... 53.1 64.7TOTAL.............................................................................. 2,235.7 1,969.4
II. APPLICATION OF FUNDS
(1) FIXED ASSETS
(a) Gross Block ........................................................... 676.2 642.5
(b) Less: Depreciation ................................................. 365.7 327.5
(c) Net Block ............................................................... 310.5 315.0
(d) Capital Work-in-Progress ...................................... 1.2 10.2
TOTAL FIXED ASSETS ................................................... (4) 311.7 325.2
(2) INVESTMENTS ................................................................ (5) 1,933.0 2,099.6
(3) CURRENT ASSETS, LOANS AND ADVANCES(a) Inventories .............................................................. (6) 442.1 299.1
(b) Sundry Debtors .. .... .... .... .... .... ... .... .... .... .... .... .... .... . (7) 200.1 203.2
(c) Cash and Bank Balances....... ...... ...... ..... ...... ..... ... (8) 93.5 125.1
(d) Loans and Advances .... .... ..... .... .... ..... .... ..... .... ..... . (9) 123.3 68.9
859.0 696.3
Less :
CURRENT LIABILITIES AND PROVISIONS
(a) Current Liabilities ................................................... 374.0 344.2
(b) Provisions ............................................................... 494.0 807.5
(10) 868.0 1,151.7
NET CURRENT ASSETS.......................... ....................... (9.0) (455.4)
TOTAL.............................................................................. 2,235.7 1,969.4
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THEACCOUNTS......................................................................................... (17)
Balance Sheet
As at November 30, 2005
As per our report of even date
For DELOITTE HASKINS & SELLSChartered Accountants
K A KATKIPartner
Mumbai, March 7, 2006
For and on behalf of the Board
VIVEK MOHAN Managing Director
R A SHAH Director
ASHOK DAYAL Director
Mumbai, March 7, 2006
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Abbott India Limited
Year ended Year endedNovember 30, November 30,
2005 2004Schedule Rupees in Rupees in Rupees in
Millions Millions MillionsI . SALES AND OTHER INCOME
(a) Sales ........................................................................................ (11) 4,446.7 4,050.7
(b) Other Income .......................................................................... (12) 148.6 575.4
4,595.3 4,626.1
II. EXPENDITURE
(a) Raw and Packing Materials Consumed ................................ (13) 84.6 147.9
(b) Purchase of Finished Goods (Refer Note B19
Schedule 17) ............................ ............................ ................... 3,011.4 2,306.1
(c) (Increase)/Decrease in Work-in-Progress and FinishedGoods ...................................................................................... (14) (138.4) 36.1
(d) Manufacturing, Administrative & Selling Expenses............... (15) 726.5 718.1
(e) Depreciation ............................................................................ 39.9 41.7
(f) Interest ..................................................................................... (16) 0.2 1.7
3,724.2 3,251.6
III. PROFIT BEFORE TAX .................................................................. 871.1 1,374.5
IV. PROVISION FOR TAXATION
Current Income Tax ...................... ........................ .................. 278.0 358.4
Deferred Tax (Credit) (Net) .............................. ..................... (11.6) (6.4)
Fringe Benefit Tax .............................. .............................. ...... 13.0
279.4 352.0
V. PROFIT AFTER TAX ..................................................................... 591.7 1,022.5
VI. PRIOR YEARS ADJUSTMENTS
Taxation .......................... ........................... ............................ ........... (0.1) *
591.6 1,022.5VII. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR .... 1,435.7 1,120.2
2,027.3 2,142.7VIII. APPROPRIATIONS
(a) Proposed Dividend ................................................................. (267.4) (534.8)(b) Corporate Dividend Tax
For the year ended November 30, 2005 ................... ... (37.5) For the year ended November 30, 2004 ................... ... (5.1) (69.9)
(c) Revenue Reserve .................................................................... (59.2) (102.3)
IX. BALANCE CARRIED FORWARD ................................................. 1,658.1 1,435.7
Earnings per Share Basic and Diluted ....................... ................. Rs 38.72 Rs 66.92Face Value per Share ......................... .......................... ................... Rs 10.00 Rs 10.00
Profit After Tax available to Equity Shareholders .......................... 591.6 1,022.5
Number of Shares used in computing earnings per Share Basic and Diluted ...................... .......................... ........................... .. 15,280,100 15,280,100
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THEACCOUNTS............................................................................................... (17)
* Less than Rs 0.1 Million
Profit and Loss Account
For the Year ended November 30, 2005
As per our report of even date
For DELOITTE HASKINS & SELLSChartered Accountants
K A KATKIPartner
Mumbai, March 7, 2006
For and on behalf of the Board
VIVEK MOHAN Managing Director
R A SHAH Director
ASHOK DAYAL Director
Mumbai, March 7, 2006
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Report & Accounts 2005
Cash Flow Statement for the year ended November 30, 2005Year ended Year ended
November 30, November 30,
2005 2004Rupees in Rupees in Rupees in Rupees in
Millions Millions Millions M illions
A Cash flow from operating activities :
Net Profit before tax .......................................................................... 871.1 1,374.5
Adjustments for :
Depreciat ion .......................... ........................... ........................... .. 39.9 41.7
Loss on sale of Fixed Assets/Impairment of Fixed Assets ...... 0.2 17.2
Unrealised (Gain)/Loss on Foreign Exchange ............................ 0.6 0.2
Provision for Doubtful Debts/Bad Debts written off ................. 1.8
Profit on sale of Investments in units of Mutual Funds (Net)... (0.9) (426.7)
Write back of dimunition in value of Investments in units of
Mutual Funds ......................... ............................. .......................... (0.2) (2.2)
Dividend .............................. .............................. ............................ (76.2) (55.8)
Interest payments ............................. .............................. .............. 0.2 1.7
(36.4) (422.1)
Operating Profit before working capital changes ........................... 834.7 952.4
Adjustments for :
Trade and other receivables .............................. .......................... (51.0) 54.0
Inventories .......................... ............................ ............................ ... (143.0) 38.4
Trade Payables and other liabilities ...................... ...................... 36.9 (39.1)
(157.1) 53.3
Cash generated from operations ...................................................... 677.6 1,005.7
Direct taxes paid net of refund ................................................... (309.4) (322.0)
Net cash f rom operating activities ................................................... 368.2 683.7
B Cash flow from investing activities :
Purchase of Fixed Assets ......................... ............................. ...... (30.2) (45.9)
Proceeds on sale of Fixed Assets .............................. ................ 0.2 2.4
Purchase of Investments in units of Mutual Fund including
Dividend Reinvested ............................. .............................. ......... (2,609.0) (3,539.8)
Less : Dividend Reinvested ....................... ........................... ....... 76.2 55.8
(2,532.8) (3,484.0)
Sale of Investments in units of Mutual Fund ............................. 2,776.7 3,469.2
Net cash f rom/(used in) investing activities ..................................... 213.9 (58.3)
C Cash flow from financing activities :
Repayment of long term borrowings .......................................... (3.7) (0.1)
Dividends paid (Includes Corporate Dividend Tax) ................... (609.8) (603.3)
Interest paid .......................... ........................... ........................... .. (0.2) (1.7)
Net cash from/(used in) financing activities .................................... (613.7) (605.1)
D Net increase/(decrease) in Cash and Cash equivalents (A+B+C) (31.6) 20.3
E Cash and Cash equivalents at the beginning of the year ....... 125.1 104.8
F Cash and Cash equivalents at the close of the year (D + E) ............ 93.5 125.1
See Notes attached
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Abbott India Limited
Notes to the Cash Flow Statement for the year ended November 30, 2005Year ended Year ended
November 30, November 30,
2005 2004Rupees in Rupees in
Millions Millions
1. Cash and Cash equivalents include :
Cash and Bank Balances ................................ .............................. ................... 93.5 125.1
Unrealised (Gain)/Loss on Foreign Currency ............................. ..................... * *
Total ....... 93.5 125.1
* Less than Rs 0.1 Million
2. The above Cash Flow Statement has been prepared under the Indirect
Method as set out in Accounting Standard-3 on Cash Flow Statements issued
by The Institute of Chartered Accountants of India.
3. The figures of the previous year are regrouped/rearranged wherever considered
necessary.
As per our report of even date
For DELOITTE HASKINS & SELLSChartered Accountants
K A KATKIPartner
Mumbai, March 7, 2006
For and on behalf of the Board
VIVEK MOHAN Managing Director
R A SHAH Director
ASHOK DAYAL Director
Mumbai, March 7, 2006
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Report & Accounts 2005
As at As atNovember 30, November 30,
2005 2004Rupees in Rupees in Rupees in
Millions Millions Millions1. SHARE CAPITAL
Authorised :
16,200,000 (2004 : 16,200,000) Equity Shares of Rs 10 each ........... 162.0 162.0
5,800,000 (2004 : 5,800,000) Unclassified Shares of Rs 10 each.... 58.0 58.0
220.0 220.0
Issued and Subscribed :
15,280,100 (2004 : 15,280,100) Equity Shares of Rs 10 each fullypaid-up ............................................................................... 152.8 152.8
PER BALANCE SHEET .... 152.8 152.8[9,428,184 (2004 : 8,262,000) Equity Shares are held by Abbott
Capital India Ltd (Formerly known as Lupharma UKHolding One Ltd) the holding company and Nil (2004 :1,166,184) Equity Shares are held by Abbott EquityHoldings Ltd, a group company, both of which aresubsidiaries of Abbott Laboratories, USA]
Of the above :
(a) 99,995 (2004 : 99,995) Equity Shares were allotted as fully paidpursuant to a contract without payment being receivedin cash.
(b) 15,099,570 (2004 : 15,099,570) Equity Shares were issued as fullypaid Bonus Shares by capitalisation of Share Premiumand Revenue Reserve.
(c) 25,000 (2004 : 25,000) Equity Shares were allotted to thefinancial institutions on conversion of 5% of Debentures
into Equity Shares.
2. RESERVES AND SURPLUS
Amalgamation Reserve :
Balance as per last Balance Sheet ..................... ............................. .......... 3.8 3.8
Capital Reserve :
Balance as per last Balance Sheet ..................... ............................. .......... 52.3 52.3
Capital Redemption Reserve :
Balance as per last Balance Sheet ..................... ............................. .......... 9.2 9.2
Revenue Reserve :
Balance as per last Balance Sheet ..................... ............................. .......... 229.0 126.7
Add : Transferred from Profit and Loss Account ....................... ................... 59.2 102.3
288.2 229.0
Surplus as per Profit and Loss Account ....................... ........................... ..... 1,658.1 1,435.7
PER BALANCE SHEET .... 2,011.6 1,730.0
3. LOANS
Unsecured Loans :
Deferred Sales tax liability under the Maharashtra Governments PackageScheme of Incentives 1988
Pending Conversion into Long-term interest free Sales tax loan ........... 5.9 5.9
Converted into Long-term interest free Sales tax loan [Repayable withinone year Rs 4.2 Million (2004 : Rs 3.7 Million)] ......................................... 12.3 16.0
(Refer Note B18 Schedule 17)18.2 21.9
PER BALANCE SHEET .... 18.2 21.9
Schedules
Annexed to and forming part of the Balance Sheet as at November 30, 2005
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Abbott India Limited
Schedules
Annexed to and forming part of the Balance Sheet as at November 30, 2005
4. FIXED ASSETSGROSS BLOCK AT COST DEPRECIATION NET BLOCK
As at Additions Disposals Impairment As at As at For the On Disposals As at As at As at
November 30, d uring the during the d uring the November 30, November 30, year during the November 30, November 30, November 30,
2004 year year year 2005 2004 year 2005 2005 2004
Rupees in Rupees in Rupees in Rupees in Rupees in Rupees in Rupees in Rupees in Rupees in Rupees in Rupees inMillions Millions Millions Millions Millions Millions Millions Millions Millions Millions Millions
Leasehold Land ......................... 4.8 4.8 0.6 0.1 0.7 4.1 4.2Buildings ..................................... 326.4 0.7 327.1 135.0 11.5 146.5 180.6 191.4Machinery and Equipments ....... 202.0 25.1 1.6 225.5 123.3 15.9 1.3 137.9 87.6 78.7Furniture, Fittings and OfficeEquipments ................................ 99.8 5.1 0.5 104.4 65.1 9.6 0.4 74.3 30.1 34.7Vehicles ...................................... 9.5 4.9 * 14.4 3.5 2.8 6.3 8.1 6.0
642.5 35.8 2.1 676.2 327.5 39.9 1.7 365.7 310.5 315.0
Previous year . ..... ...... ...... ...... ...... 648.7 40 .4 36.8 9.8 642.5 314.8 41.7 29.0 327.5
Capital Work-in-Progress and Advances thereagainst, at cost 1.2 10.2
PER BALANCE SHEET.............. 311.7 325.2
Note : Included in buildings is an amount of Rs 2,540 (2004: Rs 2,540) representing value of shares in co-operative housing societies, of which share certificates of Rs 1,540(2004 : Rs 1,540) are yet to be received.
* Less than Rs 0.1 Million.
As at As atNovember 30, November 30,
2005 2004Rupees in Rupees in Rupees in
Millions Millions Millions5. INVESTMENTS
IN FULLY PAID SHARES NON-TRADE UNQUOTED:
1,900 (2004 : 1,900) Equity Shares of Zest Pharmaceuticals Pvt Ltd of Rs 10 eachfully paid- up .................................................................................................................................. * *
CURRENT INVESTMENTS
IN UNITS OF MUTUAL FUNDS NON-TRADE QUOTED:
Mutual Fund No. of Face Repurchase
Units in Value PriceMillions Rs Rs in
Millions
Birla Cash Plus Institutional Plan Weekly Dividend 59.8(5.5) (10.00) (59.9)
Birla Cash Plus Institutional Premium Weekly Dividend 38.9 10.00 389.7 389.6 263.9
(26.3) (10.00) (263.9)DSP Merill Lynch Liquidity Fund Weekly Dividend 406.9
(32.8) (10.00) (407.0)
Grindlays Cash Fund Institutional Plan B Weekly Dividend 30.8 10.00 308.4 308.4 141.4(13.7) (10.00) (141.4)
HDFC Liquid Fund Premium Plan Dividend 36.4 10.00 445.3 440.7 172.3
(14.3) (10.00) (172.9)HSBC Cash Fund Institutional Plan Monthly Dividend 32.1 10.00 321.0 321.0 321.8
(30.8) (10.00) (321.8)HSBC Income Fund Short Term Institutional Dividend 3.8 10.00 38.4 38.4
() () ()
Prudential ICICI Institutional Liquid Plan Monthly Dividend 36.5 10.00 434.9 434.9 406.2(39.2) (10.00) (406.2)
Templeton India Treasury Management
Account Regular Plan Weekly Dividend 327.3(0.3) (1,000.00) (327.3)
1,933.0 2,099.6
PER BALANCE SHEET................. .......... 1,933.0 2,099.6
Notes : (1) Figures for the previous year are in bracket(2) Aggregate Book Value of Unquoted Investments * *(3) Aggregate Book Value of Quoted Investments 1,933.0 2,099.6(4) Aggregate Market Value of Quoted Investments 1,937.7 2,100.4(5) * Less than Rs 0.1 Million.
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Report & Accounts 2005
As at As atNovember 30, November 30,
2005 2004Rupees in Rupees in Rupees in
Millions Millions Millions6. INVENTORIES
Stock-in-Trade :Raw Materials ........................... ........................... ............................ .......... 8.2 4.2Packing Materials ........................... ............................... ............................ 1.6 1.0Work-in-Progress....................................................................................... 4.3 1.9Finished Goods ................. ........................... ........................... .................. 428.0 292.0
PER BALANCE SHEET .... 442.1 299.1
7. SUNDRY DEBTORS UNSECUREDDebts outstanding for a period exceeding six months :
Considered Good ......................... ............................. ............................. ... Considered Doubtful ...................... ............................... ............................ 8.8 9.5
8.8 9.5Less : Provision for Doubtful Debts ......................... .......................... ...... 8.8 9.5
Other Debts :
Considered Good ......................... ............................. ............................. ... 200.1 203.2Considered Doubtful ...................... ............................... ............................ 0.7
200.8 203.2Less : Provision for Doubtful Debts ......................... .......................... ...... 0.7
200.1 203.2
PER BALANCE SHEET .... 200.1 203.2
8. CASH AND BANK BALANCESCash, Cheques and Stamps on hand ..................... ........................ .............. 0.1 0.1With Scheduled Banks :
On Current Account .......................... .......................... .......................... ...... 93.4 125.0
PER BALANCE SHEET .... 93.5 125.1
9. LOANS AND ADVANCES(Unsecured, Considered Good unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received ..... 91.6 37.6(Refer Note B2 Schedule 17)Sundry Deposits ........................... ............................ ............................ ....... 31.7 31.3With Customs and Excise on Current Account .................................. ....... * *
PER BALANCE SHEET .... 123.3 68.9
10. CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities :
Sundry Creditors :Due to Small Scale Industrial Undertakings (Refer Note B24 Schedule 17) ........................... ........................... ............................ .......... 0.9 13.8Others ............................ .....