1. health and fitness
2. nutrition

Natural Products
Nutraceuticals
Therapeutics
Microbial Research
Drug Discovery
www.ablbiotechnologies.com
#55, 3rd East Street, Kamaraj Nagar, Thiruvanmiyur, Chennai - 600 041. Tamil Nadu, India.
Contents
SECTION I
Chairman's Message
3
SECTION II
Company Profile
5
Board of Directors
7
Key Management Team
8
Products
9
Some of our customers
10
Facilities
11
Results at a Glance
12
SECTION III - ANNUAL REPORT
Directors'Report
15
Report on Corporate Governance
18
Management Discussion and Analysis Report
28
Auditors' Report
32
Financial Statements
36
Balance Sheet
37
Schedules to Balance Sheet
38
Profit and Loss Account
42
Schedules to Profit and Loss Account
43
Schedules of Notes
46
Cash flow Statement
50
Balance Sheet Abstract
51
SECTION IV - NOTICE TO SHARE HOLDERS AND
PROXY FORM
52
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Chairman's Message
".Ml
Dear Shareholders
From its inception in 1992, ABL has come a long way, right from the moment ;t Jocided to walk on paths
lesser trodden, evolving into a pharmaceutical and biotechnology company having among the largest
culture collection of targeted microbials from various habitats, a research team unparalleled in its domain
and the step-by-step commercialization of a variety of products developed in-house. I am therefore
pleased to offer you the Fourteenth Annual Report of ABL Biotechnologies Ltd which details the growth of
your Company.
The last year has been a significant year for ABL with revenues growing by 84% and profitability by
175%. Our performance in the stock market has also seen considerable improvement, offering between
5-8 times returns to ouroriginal investors.
We have also seen the launching of Invia Health, our pharmaceutical marketing operations focused at
creating our own brands. We hope to expand our markets to an all India level over the next twelve
months.
During the coming year we hope to see the inauguration of our new research facility at the TICEL Biopark
and the commercialization of two products, DHA, a omega fatty acid, and Phycocyanin, a fluorescent
pigment, both of which have enormous use in therapeutics, nutrition and diagnostics. Both the DHAand
Phycocyanin projects will be the first such manufacturing facilities in the country and among the few in
the world, underlining the fact that ABL continues to work and explore in technology development at the
frontiers of science. Consequently we look to bringing in more investments and resources to the
Company so as to transform ABL from a boutique company to an internationally sized operation.
The Biotechnology and Pharmaceutical Industry
The biotechnology sector has shown rapid growth in the last few years with global revenues rising from
USD 22.7 Billion in 2000 to over USD 50.0 Billion last year. Over USD 160 Billion has been invested in
this sector between 2000 - 05, taking market cap to over USD 500 Billion in the beginning of 2006. Over
the past few years, biotechnology has evolved as an important contributor to the pharmaceutical
industry. This is because drug pipelines for the big pharmaceuticals are on the wane, principally due to
the enormous overheads and costs of research. However, the biotechnology sector comprising mainly of
leaner, smaller and more focused entities have contributed to new drug discovery at a fraction of the
costs of large pharmaceutical companies. Many biotechnology companies like ABL, have expanded
into pharmaceuticals in commercializing their projects. Many large pharmaceutical companies have
also backwardly integrated by building biotechnology capability. In India, the biotechnology industry
grew by over 37% with biopharma crossing Rs.4708 crores and comprising over 72% of the industry.Of
the top twenty Indian bio-pharmaceutical companies only six are multi-nationals, with 14 being home
grown. With an eye on capturing the global market Indian companies are strengthening their
manufacturing capability and R&D focus.
The Indian Pharma industry, a producer of low cost high quality drugs and formulations, is ranked fourth
globally, in terms of volume and 13 in terms of value.
th
3
The industry which has a turnover of USD 9 Billion is expected to grow at around 15-18% over the next
four years with almost 4 0 % of the total production of pharmaceuticals, as exports. Thus the Indian
pharmaceutical industry with increased M&A activities, a large basket of products going off patent,
tightened controls on costs and increased R&D, is looking to a good time ahead.
ABL's strategy of enhancing its research and manufacturing abilities as well as establishing its own
brand equity meshes well into the opportunities that lie ahead.
The Future
For years, physicians have concentrated on diagnosing and treating an existing disease condition. Now
we see a perceptible shift towards predicting disease susceptibility, preventing disease and a genomics
based selection of more efficacious therapy. The impact of genomics, proteomics, pharmacogenomics
and systems biology and the development of more targeted and personalized diagnostics and
therapeutics is significant. Biotechnology is changing the prescription from a world that is struggling to
address the health problems of an ageing population to one that treats the sick more personally and
focuses on wellness by preventing or detecting the onset of disease. Frankly there has never been a
more exciting time in the history of medicine than today.
I therefore foresee that at ABL our research efforts will focus on drug discovery, new diagnostic tools,
drug delivery systems and personalized, predictable and preventive medicine aimed at earlier disease
detection, more targeted treatments and adjunctive support through nutrition. We also see an
environment where strategic alliances and partnerships across the globe will facilitate us taking more
products to the market at a faster pace.
Thus we hope to focus on a few key areas to enhance our strengths and keep ahead of the competition:
1. Optimizing operating margins and widening our client base
2. Enhancement our research to put more products in the market
3. Enhancing our manufacturing capabilities to be globally competitive
4. Increasing quality of our differentiation in terms of innovation and execution
This kind of focus coupled with our proven capability of commercializing research gives us the impetus to
work towards the objectives that we have set for ourselves in the coming year and to continue to fulfill
yourexpectations.
Therefore I would like to particularly thank the employees of the Company, who have often gone beyond
the call of duty in taking this organization forward. We are also grateful to our bankers, customers,
vendors and all those who are associated with our business.
Once more we at ABL are grateful to you, our shareholders, for your continuing unstinted support and
cooperation. I am sure that the year ahead will justify and reward your patience.
Thankyou.
K. O. Isaac
4
IO - « n « n n f t a n c e n n o t
Company Profile
Overview
A B L B i o t e c h n o l o g i e s Limited ( A B L ) , a pioneer in h a r n e s s i n g t h e microbial diversity of the Indian
marine environment, focuses on applications in nutraceutical, cosmeceutical, and
pharmaceutical areas.
C o m m e n c i n g o p e r a t i o n s in 1992, A B L w o r k s in t h e a r e a s of d r u g d i s c o v e r y a n d microbial
metabolites f r o m m a r i n e s o u r c e s . Investing e n o r m o u s l y in infrastructure a n d m a n p o w e r , A B L is
on the cutting e d g e of r e s e a r c h in these a r e a s a n d has setup the largest m a r i n e microbial
culture collection a n d c o m p o u n d library in India.
A B L is m a n a g e d by a d y n a m i c g r o u p of p r o f e s s i o n a l s a n d fosters an entrepreneurial
a t m o s p h e r e with r e w a r d s that reflect e m p l o y e e c o n t r i b u t i o n .
R&D
A B L ' s R e s e a r c h a n d D e v e l o p m e n t facilities are located at
V i s a k h a p a t n a m a n d C h e n n a i a n d are the only o n e s in the private
sector in India, to be a c c o r d e d accreditation a n d recognition by the
D e p a r t m e n t of Scientific a n d Industrial R e s e a r c h , Ministry of
S c i e n c e a n d Technology, G o v e r n m e n t of India.
It's D r u g a n d N C E d i s c o v e r y r e s e a r c h is f o c u s e d on anti-bacterials,
anti-virals, chronic d i s e a s e s , s y s t e m i c d i s o r d e r s , e n z y m e s a n d
diagnostics.
Its microbial metabolite r e s e a r c h is f o c u s e d on d e v e l o p i n g p r o d u c t s
like P o l y s a c c h a r i d e s , Essential Fatty A c i d s , Natural P i g m e n t s ,
Tracers a n d Tags. Its first r e s e a r c h on t h e p r o d u c t i o n of
C a r o t e n o i d s has b e e n e x t r e m e l y s u c c e s s f u l a n d has b e e n
c o m m e r c i a l i z e d u n d e r S a m u d r a B i o p h a r m a Private L i m i t e d .
In addition to in-house c o m p e t e n c i e s , A B L enjoys a
s y m b i o t i c a n d collaborative relationship through joint
d e v e l o p m e n t p r o g r a m m e s with institutions of a d v a n c e d
r e s e a r c h in India, like t h e National Facility for Marine
C y a n o b a c t e r i a , B h a r a t h i d a s a n University, Trichy, the
National Institute of O c e a n o g r a p h y , The Madras
University, t h e Indian Institute of Technology, M a d r a s , the
Central University, H y d e r a b a d a n d the Dr. A. L. M Post
G r a d u a t e Institute of Basic M e d i c a l S c i e n c e s , M a d r a s .
5
Products and Formulations
To address this growing market, ABL has set up three divisions;
1.
SPECTRUM, for producing finished formulations for the P2P market consisting of existing pharma
companies. ABL's competence in pharmaceutical innovation through the development of new
formulations for applications in cardiology, diabetics,
paediatrics, w o m e n ' s health, geriatrics, neuropathy,
*"""""
retinopathy, etc has resulted in the Company manufacturing
over 100 products for around 60 pharmaceutical companies in
.
-.
India. These are in various formats including soft and hard
*„-..
gelatine capsules, tablets, liquid orals and topical ointments,
.
outsourced through six plants spread over Kerala, Tamilnadu
,
**K$»
and Pondicherry.
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2.
INVIA HEALTH, for marketing its own therapeutics. Under INVIA, ABL has developed 20
therapeutic products for two chronic disease states, Diabetes and Cardiology. These include
clinically proven combinations of pharmaceuticals as well as nutraceuticals.
3.
SANCTUM NUTRITION, focused at therapeutic nutrition products.
Under the umbrella brands 'SANCTUM' & 'HEALTH FARM', ABL proposes to market a series of
nutrition products and convenience foods with enhanced nutritional values for the following
categories of consumers:
Pediatric Nutrition
Diabetic Nutrition
Pregnancy and Lactation
Geriatric Nutrition
Sports Nutrition
Convalescence Nutrition
Products include Protein-Carbohydrate mixes, Mineral-Vitamin Mixes, Amino Acid Formulations,
Functional foods etc.
Partnership Opportunities
Strategic partnerships are a fundamental part of ABL's strategy to maximize the impact of technology
and build long-term value.
ABL partners with pharmaceutical and biotechnology companies to enhance drug discovery by
providing considerable inputs either through licensing of developed technologies or co-developing
them with partners. ABL also partners with platform companies to leverage complementary
technologies. In addition to pharmaceutical collaborations, ABL welcomes alliances with companies
that have complementary intellectual property, technology or expertise. Such companies might include
those with novel phytopharmaceuticals, intellectual property, informatics capabilities, compound
libraries, synthetic chemistry capabilities, biological platform expertise or even marketing expertise.
Given the significant value created for our partners, we expect to share in both the financial and
intellectual property value generated through these alliances.
6
Board of Directors
K. O. ISAAC
CHAIRMAN AND MANAGING DIRECTOR
K.O.ISAAC, with degrees in Life Sciences and Business Administration,
has over twenty one years of experience in the biotechnology industry,
fourteen of which are as an entrepreneur. He is the principal promoter of
ABL Biotechnologies Ltd. and has overseen the development of a
number of technologies from genesis. He is a member of the Committee
for National Biotech Policy and the Task Force on Aquaculture and
Marine Biotechnology, Government of India as well as on various
Boards of Studies of Madras University.
ROSEMARY ISAAC
DIRECTOR
MRS.ROSEMARY ISAAC, with a Masters degree in Economics and a
Post Graduate Diploma in Foreign Trade, co-founded
ABL Biotechnologies Ltd in 1991. She has been on ABL's Board for 14
years, very closely associated with its strategic planning and
operations.
She serves on the Board's Audit and Remuneration
Committees and Chairs the Company's Share Transfer Committee.
DR. G. SUBRAMANIAN
DIRECTOR
Dr. G SUBRAMANIAN, M. Phil in Plant Biology and Ph.D in
Microbiology, has many decades of experience in microbial
biotechnology. He is the Founder Director - National Facility for Marine
Cyanobacteria. Dr.Subramanian chairs the Company's Research
Review Committee.
DR. S. RAVINDRAN
DIRECTOR
An M.S. in Orthopaedic Medicine, Dr.RAVINDRAN heads the
orthopaedic unit in the Voluntary Health Services Hospital, Adyar, a fourhundred and fifty bedded multi speciality hospital which mainly serves
poor patients. Dr.Ravindran has a keen interest in drug discovery and
development.
7
Key Management Team
T.R.VENKATRAMAN, BSc, LLB, CAIIB, has over thirty t w o years of
experience in the finance, accounting and treasury functions. He
heads the finance and treasury functions at ABL.
Mr.P.S.GANESHAN, M.Sc (Medical Biochemistry) w i t h an MBA, has
over 22 years of experience in development and marketing of
pharmaceutical formulations, worldwide. Mr. Ganeshan is the
President of Invia Health, a new division of the company to market
pharmaceutical products under its o w n brands.
i
.
l
DR. DEBASHIS MUKHERJEE, Ph.D, w i t h over fifteen years of
experience, heads the Spectrum Division and oversees production
planning, scheduling, purchase and process control for the
formulation and manufacturing operations of the company.
MR. MATHEW JOHN, B.tech (Mech. Eng) and MBA, has more than
thirty years of experience in administration and corporate affairs.
He has served in various states including Assam, Meghalaya,
Kerala, Kamataka and Andhra Pradesh and retired as DGP, Tripura.
He is the Vice President-Corporate Affairs and Administration.
DR. T. AJITHKUMAR, Ph.D. in Botany has been working at ABL since
1998. Dr.Ajithkumar is designated as General Manager Incubation Projects and New Business Development and oversees
the R&D of the Company.
Mr. K.O. PHILIP, B.E., w i t h more than twelve years of experience in
developing processes and commercializing technologies, oversees
Bioprocess Development. He is seconded as the Managing Director
of Samudra Biopharma Pvt Ltd.
8
Products
SPECTRUM DIVISION
ABL's Spectrum division has developed numerous formulations for
t h e r a p e u t i c s e g m e n t s like G e n e r a l S u p p l e m e n t a t i o n ,
Ophthalmology, Pediatrics, Pregnancy and Lactation, Geriatrics,
Arthritis and Lupus, Coronary Arterial Disease, Diabetes, Oncology,
Dermatology, etc
INVIA HEALTH
ABL has developed 20 therapeutic products for chronic disease
states like Diabetes, Cardiology and Gastro intestinal disease.
These include clinically proven combinations of pharmaceuticals
as well as nutraceuticals.
These products are marketed by INVIA HEALTH, ABL's
therapeutics division, to both Indian as well as international
markets.
SANCTUM DIVISION
ABL has developed a series of nutrition products and convenience
foods under the umbrella brand 'SANCTUM' & 'HEALTH FARM',
with enhanced nutritional values for the following categories of
consumers:
Pediatric Nutrition
Diabetic Nutrition
Pregnancy and Lactation
Geriatric Nutrition
Sports Nutrition
Convalescence Nutrition
Products include Protein-Carbohydrate mixes, Mineral-Vitamin
Mixes, Amino Acid Formulations, Functional foods etc.
9
Some of Our Customers
INTAS P H A R M A C E U T I C A L S LTD
Zydus
did c j 11 d
rouirts
ZYDUS CADI LA HEALTHCARE
LTD
CifJI
AHMEDABAD
KHANDELWAL LABORATORIES
P V T LTD
MUMBAI
BIOCHEM
MUMBAI
F O U R R T S INDIA L A B O R A T O R I E S
P V T LTD
CHENNAI
T.T.K H E A L T H C A R E L T D
lUl
AHMEDABAD
J.B C H E M I C A L S &
P H A R M A C E U T I C A L LTD
CHENNAI
MUMBAI
E L D E R H E A L T H C A R E LTD
MUMBAI
A J A N T H A P H A R M A LTD
MUMBAI
INDSWIFT LIMITED
1 N«I - S w i : t
10
CHANDIGARH
Facilities
ABL's Mariculture Development
C e n t r e in V i s h a k a p a t n a m ,
India, has for many years
carried out r e s e a r c h on
aquacultured food organisms,
brood stock d e v e l o p m e n t ,
bioremediation, nutrition and
mass culture systems.
ABL's Research Labs at at
TICEL Biopark, Chennai works
on drug discovery and
molecular biology.
ABL's microbial metabolites
laboratory at Chennai works on
h a r n e s s i n g a v a r i e t y of
microalgae, cyanobacteria and
heterotrophs for development
of biopharmaceuticals, NCE's,
and technology platforms in the
areas of therapeutics and
nutrition.
ABL's Product Development
Laboratory works on formulated
nutrition and therapeutic
products in various formats like
capsules, liquids, tablets,
powders, ointments chocolates
etc.
Associated
facility for
production of juices, pulp,
powders, flavors etc. from fruits
and vegetables.
Associated
facility for
production of formulated foods
including fruit preserves, jams,
s q u a s h e s , c h o c o l a t e s and
biscuits.
A s s o c i a t e d facility for
production of liquids, hard and
soft capsules and tablets.
Associated facility for production
of soft gelatin capsules, tablets
and ointments.
11
Results at a Glance
ABL CLIENT CONCENTRATION FOR FY 05-06 (% OF REVENUE)
ABL REVENUE PERFORMANCE FOR THE FY 05-06
| • R e v e n u e FY 05-06 j
Q2
Q3
QUARTER
ABL KEY PERFORMANCE RATIOS (% OF REVENUE)
ABL PROFIT PERFORMANCE FOR FY 05-06
- • - O p e r a t i n g I n c o m e / Profit; FY 05-06 |
78.99
- » - P r o f i t after Tax; FY 05-06
iis-f
Q4
Q1
Gross Profit
Operating Income /Profit BeforeTax
ABL EPS QUARTERLY PERFORMANCE - Diluted
18
Q1
Q2
Q3
QUARTER
12
Q4
P r o f i t a f t e r Tax
Other Income
Annual Report of the company
BOARD OF DIRECTORS
Mr.K. O. Isaac - Chairman & Managing Director
Mrs.Rosemary Isaac, Director
Dr. G. Subramanian, Director
Dr. S. Ravindran,Director
REGISTERED OFFICE
55, Third East Street, Kamarajar Nagar,
Thiruvanmiyur, Chennai - 600 041.
ASSOCIATED MANUFACTURING FACILITIES
RESEARCH & DEVELOPMENT CENTRE -1
No.110-112, First Floor,
TICEL Bio Park, Taramani Road,
Taramani, Chennai - 600 113.
1. Industrial Estate, Kallimel P.O,
Mavelikara, Kerala - 690 570.
2. 155, Medavakkam Road,
Keelkattalai, Chennai - 600 117.
RESEARCH & DEVELOPMENT CENTRE - II
Rockrosh I & II, Seaview Enclave,
Neelankarai, Chennai - 600 096.
3. Plot No: 54, Sidco Industrial Estate,
Thirumudivakkam, Chennai - 600 044.
RESEARCH & DEVELOPMENT CENTRE - III
Thimmapuram, Kappuluppada Village,
Bheemili Mandal, Visakhapatnam District,
Andhra Pradesh.
4. A - 9 7 , Pipdic Industrial Estate,
Mettupalayam, Pondicherry - 605 009.
5. Plot No: A-116, 27th Cross,
Pipdic Industrial Estate, Mettupalayam,
Pondicherry - 605 009.
AUDITORS
M/s Pratapkaran Paul & Co.,
Chartered Accountants,
Chennai - 600 020.
6. 21, Koodapakkam Road, Villianoor,
Pondicherry - 605 009.
BANKERS
State Bank of India,
Adyar Branch,
Chennai - 600 020.
SHARE TRANSFER AGENTS & DEMAT
ELECTRONIC CONNECTIVITY AGENT
CAMEO CORPORATE SERVICES LTD
"Subramaniam Buildings" 1, Club House Road,
Chennai - 600 002. Ph : 28460390
14
Directors' Report
To
All members,
Your Directors take great pleasure in presenting this 14 Annual Report together with the audited
accounts for the year ended on March 31,2006.
th
You Company's performance during the last financial year has shown a significant improvement from the
previous year's revenue of Rs.7.40 crores to Rs.11.02 croresforthe current year. Profitability has gone
up from Rs.61 lakhs in the previous year to Rs.1.64 crores for the year under review, amounting to an
improvement of 85% in revenues and 168% in profitability. Earnings per share has gone up to Rs.3.81
from Rs. 1.49 in the previous year.
OPERATIONS
Spectrum
In line with the Company's consolidation efforts the entire contract manufacturing operations have been
put together under a new division called SPECTRUM. Spectrum is responsible for almost the entire
revenues for the Company for the year under review, offering over a hundred brands to more than forty
pharmaceutical companies in India.
The formulated product market has seen a number of swings in the previous year as a consequence of
increased Excise Duty and Value Added Tax, thereby rendering most outsourced manufacturing
unviable. Inspite of this, your Company has, through innovation and product differentiation, doubled its
order book, overcoming the various problems in the market. Improvement of products as well as
enlarging the customer base has further provided solutions to your Company.
Invia Health
The Company launched a new division, Invia Health, offering twenty products under the Company's own
brand name, initially to markets in Tamil Nadu. Considering ABL's longterm goals of being a strong
player in the biotechnology and pharmaceuticals markets, it is essential for your Company to start
establishing itself in the pharmaceutical markets and create brand value and consequent equity. Invia
Health hopes to expand its target market to the rest of the country by the end of2007.
Research and Development
The Company's research efforts have increased dramatically after receiving the first tranche of funding
of Rs.200 lakhs from the Drug Development Board. The Company is in the process of establishing its
new Research and Development facility for drug discovery and bioactives at the TICEL Biopark in
Chennai.
Your Company has also increased its collaborative research to include the Central University of
Hyderabad and the Indian Institute of Technology, Chennai, where research initiatives have
commenced.
15
Projects
Your Company's efforts in completing the pilot scale production for DHAand Phycocyanin are complete.
These two projects are expected to be commercialized in the immediate future.
Samudra B i o p h a r m a Pvt Ltd
Your Company's investment in Samudra Biopharma Pvt Ltd continues to be monitored and protected.
Samudra has improved its performance from Rs.4.38 crores of turnover last year to Rs.7.28 crores in the
year under review, an increase of 66%. It is hoped that this healthy trend will continue and ensure that
Samudra Biopharma will overcome its initial challenges.
TRADING OF SHARES IN THE STOCK EXCHANGES
The shares of the Company are listed in the Mumbai and Chennai exchanges. They are traded in the
dematform.
CORPORATEGOVERNANCE
The company continues to follow the code of Corporate Governance during the year under review.
DEPOSITS
No
deposits
have
been
accepted
from
the
public
during
the
year
under
review.
DIRECTORS
Dr.S.Ravindran, retiring at this meeting by rotation and being eligible, offers himself for reappointment.
The resolution for the same is placed before the shareholders for their approval.
AUDITORS
M/s.Pratapkaran Paul & Co., Chartered Accountants Chennai, auditors of the Company retire at the
ensuing annual general meeting and a notice has been received under section 224(1 B) of the
Companies Act 1956 from them expressing their eligibility for reappointment
REPLYTO AUDITORS' QUALIFICATION
As regards the observation made in Clause 9 of the Auditor's Report, the real delay in payment of
statutory dues was due to the need for increased working capital resources for expanded activity. Since
March 2006 the Company has paid all the arrears observed in the said report and as on date there are no
arrears payable.
EMPLOYEES
Your Directors place on record their appreciation of the sincere and dedicated services rendered by all
the employees during the year under review. None of the employees of the Company were in receipt of
remuneration in excess of the limits stated under Section 217(2A)of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 as amended.
16
DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that
in the preparation of the annual accounts, the applicable accounting standards have been
followed.
they have selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent so as to give a true and fair
statement of the state of affairs of the Company as on 3 1 March, 2006 and of the Profit and
Loss of the Company for that period.
proper and sufficient care has been taken 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,
the annual accounts are prepared on a going concern basis.
st
ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
Information in accordance with the provisions of 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 regarding
conservation of energy, Technology absorption and Foreign Exchange earnings and outgo are given
below:
CONSERVATION OF ENERGY
Energy conservation is not applicable to the biotechnology industry.
TECHNOLOGY ABSORPTION
The technology for marine microbial metabolites is developed indigenously and hence absorption of
foreign technology does not arise.
RESEARCH AND DEVELOPMENT
Your Company has been continuing its research and development activities during the year on various
microalgae and other organisms. Your Company has expended Rs. 115.75 lakhs towards Research and
Development Expenditure.
FOREIGN EXCHANGE EARNINGS:
Rs.7,99,845.00 (Previous Year: Nil)
FOREIGN EXCHANGE OUTGO:
On account of import of goods - NIL (Previous Year: Nil)
Foreign Travel - Rs.2,21,126.00 (Previous Year: Nil)
ACKNOWLEDGEMENT
The Board would like to place on record its gratitude to the State Bank of India, Adyar, Chennai and
Global Trade Finance Ltd, T.Nagar, Chennai, the Company's customers and suppliers and the ever so
many people and organizations that have supported the company during the past year.
For and on behalf of the Board of Directors
Date: 28.08.2006
Place: Chennai
K.O. Isaac
Chairman and Managing Director
17
REPORT ON CORPORATE GOVERNANCE: 1. C o m p a n y ' s P h i l o s o p h y on Code of Governance
ABL BIOTECHNOLOGIES LIMITED defines Corporate Governance as a systematic process by which
companies are directed and controlled to enhance their wealth generating capacity. ABL believes that
the governance process should ensure that these companies are managed in a manner that meets
stakeholders' aspirations and social expectations.
The basic objective of corporate governance policies adopted by this company is to attain the highest
levels of transparency, accountability and integrity. This objective extends not merely to meet with
statutory requirements but also go beyond them by putting into place procedures and systems which are
in accordance with best practice of governance.
Your company believes that good corporate governance enhances the trust and confidence of all the
stakeholders. Good practice in corporate behaviour helps to enhance and maintain public trust in
companies and the stock market.
2. B o a r d of Directors:
C o m p o s i t i o n and category of B o a r d of Directors:
The Board of Directors of the Company comprises of executive, non-executive and independent
directors. In all there are four Directors.
s t
As on 3 1 March 2006, the composition of the Board of Directors of the Company meets the stipulated
requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. The Board is responsible
for the management of the business and meets regularly for discharging its role and functions.
Number of Board Meetings held and dates on w h i c h held:
,h
th
During the financial year 2005-2006 four Board Meetings (4) were held dated 29 June 2005, 29 July
2005, 29 October 2005 and 30 January 2006. The Annual General Meeting was held on 30
September 2005.
,h
th
th
The composition and membership on other Boards, Committees of Directors and attendance of
Directors at the Board of Directors meetings held during the financial year 2005-2006 and the last AGM
held on 30.9.2005 are given herein as underl-
ie
t>ihtcto>v%
Composition, attendance of each director at the Board Meetings and at the last AGM and the
number of other directorship, committee memberships are set out below:Name of the
Director
Category
Attendance
Particulars
Board
Meetings
K.O.Isaac
Chairman and
Managing
Director
Number of other Directorships and Committee
Members Chairmanships
Last
AGM
(Yes/No)
4
Yes
Other
Directorships
Committee
Memberships
(other than
ABL)
3
-
-
1
-
-
Committee
Chairmanships
(other than
ABL)
Mrs. Rosemary
Isaac
Non
Executive
Director
4
Yes
Dr.G.Subramanian
Non
Executive
Independent
4
Yes
NIL
-
-
Dr.S.Ravindran
Non
Executive
4
Yes
NIL
-
-
Thus the Board comprising of two independent directors out of present strength of four Directors is in
conformity with Clause 49 of the listing agreement.
3. Board Committees
A. A u d i t Committee
Charter:
The Primary Object of the Audit Committee of the Company is to monitor and provide effective
supervision of the management's financial reporting process with a view to ensure accurate, timely
and proper disclosures and the transparency, integrity and quality of financial reporting.
Composition:
The company derived immense benefit from the deliberations of the audit committee with the
following Directors of the company.
Dr. S. Ravindran
Chairman
Mrs. Rosemary Isaac
Member
Dr. G. Subramanian
Member
19
t>ihtdo>v'&
The major terms of reference of this committee are as under:•
•
•
•
•
Reviewing the financial statements with the management before submission of the same to the
Board.
Overseeing of company's financial reporting process and disclosures of its financial
information.
Reviewing the adequacy of the internal audit function.
Recommendation and removal of statutory Auditor and fixation of audit fees.
Reviewing the reports furnished by the internal auditors and statutory auditors and ensuring
suitable follow up thereon.
Meeting and attendance of the Audit Committee:
th
During the financial year four Audit Committee meetings were held on the following dates; 29 June
2005, 29 July 2005, 29 October 2005 and 30 January 2006. The terms of reference of the Audit
Committee are as per the guidelines set out in the in the Listing Agreement with the stock exchanges.
th
th
th
The Attendance of Directors at the Audit Committee Meetings held during the year 2005-2006 is given
below:
Name of the
Category
of
Attendance Particulars
Director
Membership
Dr.S.Ravindran
Chairman
4
4
Dr.G.Subramanian
Member
4
4
Mrs.Rosemary
Member
4
4
Meetings Held
Meetings Attended
Isaac
B. Remuneration Committee:
The Remuneration Committee comprising three non-executive Directors viz :
Dr.G.Subramanian
Chairman
Mrs.Rosemary Isaac
Member
Dr.S.Ravindran
Member
No meeting of the Remuneration Committee was held during the year.
20
t>VtfJ&o>v\
C. Shareholders/Investors Grievance and Share Transfer C o m m i t t e e :
Composition:The Shareholders / Investors Grievance and Share Transfer Committee comprises
Mrs.Rosemary Isaac
Chairman
Dr.G.Subramanian
Member
The terms of reference of this committee are as under:
The share holders / investor grievance committee specifically looks into redressing of shareholders' and
investors' complaints such as transfer of shares, on-receipt of shares, conversion of shares and to
ensure expeditious share transfers.
Meeting and Attendance of the committee:
The Committee oversees the performance of share transfer agents and recommends measures to
improve the shareholders/investors service. The said Committee met 18 times during the year
2005-2006. The Company Secretary is the compliance officer.
Shareholders queries received and replied in 2005-2006.
During the Financial Year 2005-2006, no complaints were received from shareholders. There are no
complaints pending as on the date of this report. There were no share transfers pending registration as
on 3 1 March 2006.
s t
6. General Body Meetings
Year
Date and Time
Venue
th
2002-2003
29 September 2003 at 10.30 a.m
2003-2004
24 September 2004 at 2.30 p.m
2004-2005
30 September 2005 at 11.30 a.m
th
th
21
Chromepet Cultural Academy,
3, Indira Gandhi Cross Street,
Radha Nagar, Chromepet,
Chennai - 600044
Narada Gana Sabha, Mini hall,
Alwarpet, Chennai - 600018
Narada Gana Sabha,Mini hall,
Alwarpet, Chennai - 600018
I) Special Resolution passed in the past three AGM's:2004-2005:Special Resolution for the purpose of:
•
Resolution under section 372A under the Companies Act 1956 to make investments up to an
aggregate amount of Rs.5,00,00,000.
•
Resolution under section 293(1 )(a) & section 293(1) (d) under the Companies Act 1956 to borrow
money from the company's bankers or any other bank, financial institutions or any lending
institutions to pledge, mortgage, hypothecate on terms and conditions to banks / financial
institutions/any other body corporate up to a limit not exceeding Rs.50 Crores.
2003-2004
Special Resolution for the purpose of
• Appointing Mr.K.O.Isaacasthe Chairman & Managing Director.
• Keeping the Register of Member's details with Cameo Corporate Services Ltd., Chennai.
• Delisting shares of the Company from Madras and Cochin Stock Exchanges.
2002-2003
No Special Resolution was passed in this year.
7. Disclosures
The company has not entered into any transactions of a material nature with the promoters, the
directors or the management, their subsidiaries or relatives, etc, that may have potential conflict with
the interests of the Company. The necessary disclosures regarding the related party transactions are
given in the Notes to the Accounts.
8. Means of Communication:
The quarterly financial results are published in the English and regional newspapers.
22
9. General Shareholders Information
th
2 8 September 2006
11.00 A.M.
'Bharathi Vidya Bhavan',
Mylapore,
Chennai - 600 004.
(i) Date of Annual General Meeting:
Time :
Venue
s t
st
1 April 2005 to 3 1 March 2005
(ii) Financial calendar Year
Results for the quarter ending June 30, 2005
Last week of July 2005
Results for the quarter ending September 30, 2005 Last week of October 2005
Results for the quarter ending December 30, 2005 Last week of January 2006
Unaudited Results before last week
Results for the quarter ending March 31, 2006
of June 2006
Listing on the stock exchanges
The equity shares of the Company are listed
on the Stock exchanges at Madras and
Mumbai. The Company has paid its annual
listing Fees to all the listed stock exchanges
for the financial year 2005 - 2006
(vi) Stock Code
The Stock Exchange of Mumbai - 526955
(vii) Stockmarket data
The Stock Exchange, Mumbai: High and Low quotations of the Company's shares during the
81
st
period 1 April 2005 to 3 1 March 2006:
Month
Share Prices (Rs.)
High
April 2005
May 2005
Low
47.40
34.00
57.45
37.55
June 2005
July 2005
51.95
38.00
53.00
37.00
August 2005
52.90
36.55
September 2005
84.55
42.20
October 2005
70.25
48.10
November 2005
62.40
49.90
December 2005
60.00
52.00
January 2006
76.95
52.00
February 2006
66.60
54.50
March 2006
58.55
45.00
23
(viii) Registrar and Share Transfer Agents
M/s.Cameo Corporate Service Limited.
"Subramanian Buildings"
1, Club House Road,
Chennai-600 002
(ix) Address for communication
53,3 East Street,
Kamaraj Nagar,
Thiruvanmiyur,
Chennai-600041
rd
(x) Share Transfer System: Presently the share transfer documents which are received by the
Company are processed, approved and kept ready for despatch within 15 days from the date of
receipt.
(xi) Distribution of shareholding as on 31.3.2006
Range
No. of
shareholders
% to total
Share/debenture
amount (Rs.)
% to total
Up to 5000
2007
73.8139
4837000
11.7996
5001-10000
409
15.0423
3255800
7.9410
10001-20000
144
5.2961
2278440
5.5872
20001-30000
54
1.9860
1371760
3.3458
30001 -40000
23
0.8459
840500
2.0500
40001-50000
24
0.8827
1159460
2.8280
50001-100000
31
1.1401
2160820
5.2703
100001 & above
27
0.9930
25095320
61.2081
100.0000
41000000
100.0000
Total
2719
24
(xig snarenoiaing pattern as on di.d.^uub
Category
No. of Shares Held
Percentage of
Share holding
A. Promoter's Holding
1. Promoters
Indian promoters
Foreign promoters
2. Persons acting in concert
Sub-total
1136400
27.72
NIL
NIL
NIL
NIL
1136400
27.72
a. Mutual Funds and UTI
21800
0.53
b. Banks, financial institutions,
147558
3.60
NIL
NIL
169358
4.13
4. Private corporate bodies
990004
24.15
5. Indian public
1782730
43.48
6. NRIs/OCBs
14683
0.36
Independent directors
NIL
NIL
Clearing members
5825
0.14
Trust
1000
0.02
B. Non-promoters holding
3. Institutional Investors
insurance companies (central / state
govt, institutions / non - government
institutions)
c. Flls
Sub-total
7. Any other (please specify)
Sub-total
2794242
68.15
Grand Total
4100000
100.00
25
TOP 10 Holders Report - NSDL & CDSL & Physical Record Date: 31-March 2006
SL
.No.
Folio
DPID/CLID
Name of Holder
Shares
Percentage
1.
IN300100
11979874
K.O.ISAAC
847500
20.6707
2.
00000776
SYNERGY SECURITIES LTD
460600
11.2341
3.
IN300100
11979882
ROSEMARY ISAAC
286400
6.9854
4.
00000447
SRiVARi INVESTMENTS (P) LTD
230300
5.6171
5.
IN301080
REPARTRIATES CO OPERATIVE
FINANCE DEVELOPMENT
BANK LTD.
147558
3.5990
6.
IN300126
10008507
MONAMEHULPARIKH
75000
1.8293
7.
000001807
SRIVARI INVESTMENTS
PVT LTD
75000
1.8293
8.
IN300126
10782484
MONA MEHUL PARIKH
MEHUL SURESH PARIKH
40990
0.9998
9.
IN300214
10356215
DHARMESH SHAH
33490
0.8168
10.
IN300095
10359440
SHANTI RAJKUMAR CHANDAN
25000
0.6098
2221838
52.362
TOTAL:
(xii)
Dematerialisation of shares
The equity shares of the company have been admitted for dematerialization with NSDL and CDSL.
The ISIN No. of the Company is INE707D01016. 4 0 . 4 1 % of the Company's paid up equity share capital
has been dematerialised upto March 31,2006.
26
(xiv)
Address for correspondence:
Regd.and Administrative Office:
rd
53,3 East Street, Kamaraj Nagar,
Thiruvanmiyur, Chennai - 600041.
DECLARATION
I, K.O.Isaac Chairman & Managing Director of the Company, hereby declare that the Board of Directors
has laid down a code of conduct for its Board members and senior Management of the Company and
Board Members have affirmed compliance with the said code of conduct.
for ABLBIOTECHNOLOGIES LIMITED,
Place: Chennai
Date: 28.08.2006
K.O.Isaac
Chairman & Managing Director.
27
Management Discussion
And Analysis
MANAGEMENT DISCUSSION AND ANALYSIS
The previous year has seen a shake up of the pharmaceutical industry i n l n d i a . This trend underlines
the transformation from a locally focused industry to an internationally focused and competent
establishment. The year has seen considerable investment in India from oversees manufacturers in
both additional manufacturing facilities in India for APIs and biologicals as well as advanced research
and development. Thus the industry is currently seeing a vibrancy not seen earlier, heralding a
transformation to a greaterfocus.
The Indian pharmaceutical market has seen robust growth inspite of statutory obstacles and cyclicals.
Your Company's strategy for improving its research and production capabilities is in tandem with the
perception of opportunities in India.
It is clear that these strengths in research as well as
biomanufacturing are what is important to your Company's growth over the next few years. Your
Company therefore looks forward to a future full of challenges and opportunities.
FINANCIAL P E R F O R M A N C E
Share capital a n d reserves
The share capital of the company as of 31.03.2006 is Rs 410.00 lakh, consisting of Rs 41.00 lakh shares
at face value of Rs. 10/- each. The company has added to the general reserve to the extent of Rs. 93.67
lakh during the year.
Loans
The company has availed from State Bank of India, Adyar, working capital of Rs. 143.96 lakh by way of
cash credit and LC limits.
Further, the company has been sanctioned an unsecured soft loan of Rs.400 lakhs from the
Department of Science and Technology, Government of India, against which Rs 200 lakh has been
disbursed for research. This loan is repayable over a period of 10 years.
Tangible f i x e d a s s e t s
The company has fixed assets in the form of land and buildings situated at Vishakapatanam covering an
area of 1.7 acres falling within Vizag Urban Development Authority limits.
Debtors
The outstanding debtor position as on 31.03.2006 was Rs.305.72 lakhs. The sales outstanding stands
at around 30-45 days. However the Company has arrangements to factor all bills of major clients with
'SBI Factors and Commercial Services Private Limited', Chennai.
Revenues
The company showed a total revenue of 1102 lakhs, for the year 2005-06, a growth of 8 4 % over the
previous year, with net profits of Rs. 1.07 crores, a growth of 175% over the previous year. The Company
expects this performance to continue.
29
REVENUE GENERATED BY A B L DURING THE FY 05-06 Vs 04-05
Operations
The company generates a contribution of about 2 6 % from its operations. The details of expenses
are as under.
Expenditure
Rupees
% of total expenditure
Material cost
32,286,374
35.66
Direct expenses
41,390,669
45.72
Personnel cost
6.025,801
6.65
Administrative expenses
7,606,346
8.40
Selling expenses
419,680
0.47
Financial charges
2,809,718
3.10
90,538,588
100.00
Total
RISKS A N D CONCERNS
Client c o n c e n t r a t i o n risk: The Company's top 5 clients contribute to more than 83% of revenue. As a
result, lack of repeat orders from these clients, client attrition, etc can materially diminish the
organization's ability to grow.
The Company is therefore working hard to widen its client base as well as enter alternate markets.
Geographical c o n c e n t r a t i o n risk: As 50% of clients are located in northern India, the Company could
be exposed to threats from short term manufacturers coming from the excise free zone established at
Baddi, Himachal Pradesh. As ABL's manufacturing base is predominantly in south India, the Company
may lose out due to delays in responding and excess transportation costs, apart from excise duty
disadvantages. The Company is looking at associated manufacturing options in Baddi as well as other
special economic zones to mitigate this threat.
30
liUi/
CLIENT CONCENTRATION OF ABL DURING THE FY 05-06
B west - 1 0 %
• south - 37%
B north - 50%
• east - 3 %
15
11
Figures on the graph are number of clients from East, West,
North, South regions of India.
Human Resource: The Company's performance is highly dependent on its ability to retain and
continuously motivate its workforce. A higher than normal attrition rate will directly impact on the
intellectual pool of the company. This could lead to delays, disruption of material deliveries, research
projects and other programmes that are under execution.
The Company has initiated numerous programmes to mitigate this risk.
Disaster Risk: In the event of any unforeseen disasters like the Tsunami which hit coastal India during
the month of December' 04, ABL's research facility and the corporate office which are located in Chennai
are at risk. Data backup, and years of Research could be affected. In case of floods, it would completely
hamper the logistics of finished goods from manufacturing facilities to the client's depot.
The Company is establishing a disaster management and recovery plan.
InflationRisk: Compensation and benefits form a significant chunk of the total cost structure. A more
than anticipated rise in salaries or operating costs could erode profitability. This is more so in the case of
products that come under the Drug Price Control Order.
Quality Risk: Any drop in quality, reflected in poor over aging, leakers in soft gel capsules, bad
packaging, etc could lead to customer dissatisfaction and result in customer attrition.
The Company has initiated a quality assurance protocol to mitigate the risk.
31
Auditor's Report
AUDITORS' REPORT TO THE MEMBERS OF ABL BIOTECHNOLOGIES LIMITED
1. We have audited the attached Balance Sheet of ABL BIOTECHNOLOGIES LIMITED as at 31st
March 2006 and also the Profit and Loss Account and the Cash Flow Statement for the year ended
on that date annexed thereto. These financial statements are the responsibility of the Company's
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 (a) examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements (b)
assessing the accounting principles used in the preparation of financial statements (c) assessing
significant estimates made by management in the preparation of financial statements and (d)
evaluating the overall financial statement preparation.
We believe that our audit provides a
reasonable basisforouropinion.
3. As required by the Companies (Auditor's Report) Order, 2003 and Companies (Auditor's Report)
amendment order, 2004, issued by the Central Government of India in terms of section 227(4A) 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.
Further to our comments in the Annexure referred to above, subject to
a) We have obtained all the information and explanations, which, to the best of our knowledge and
belief, were necessary for the purpose of, audit.
b) In our opinion, the Company has kept proper books of accounts as required by law so far, as appears
from our examination of those books.
c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of accounts.
d )ln our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement, comply with
theAccounting Standards referred to in Sub-section (3C) of Section 21 1 of the Companies Act, 1956.
e) On the basis of written representations received from the directors, as on 31st March, 2006, and
taken on record by the Board of Directors, we report that none of the directors is disqualified as on
31st March, 2006 from being appointed as directors in terms of Clause (g) of Sub-section (1) of
Section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to the explanations given to us, the
said accounts 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:
i) In the case of Balance sheet, of the state of affairs of the Company as at 31 st March, 2006
ii) In the case of Profit and loss Account, of the profit for the year ended 31st March 2006.
iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For and on behalf of
PRATAP K A R A N PAUL & CO.,
Chartered A c c o u n t a n t s ,
Date
Place
: 25th May, 2006
: Chennai
Pratapkaran Paul
Partner.
33
Annexure referred to in paragraph 3 of Auditors' Report to the Members of~ABL BIOTECHNOLOGIES
LIMITED on the accounts for the year ended 31 st March 2006.
In terms of the information and explanations given to us and the books and records examined by us in the
normal course of audit and to the best of our knowledge and belief, we state as under:
1. The company has maintained proper records showing full particulars, including quantitative details
and situation of its fixed assets. As explained to us, all the assets have been physically verified by the
management at a reasonable interval during The year. According to the information and explanation
given to us, no material discrepancies were noticed on such verification. Substantial parts of fixed
assets have not been disposed of during the year, which will affect its status as going concern.
2. The stocks of inventory have been physically verified during the year by the Management at
reasonable intervals. In our opinion the procedure of physical verification of the Inventory followed by
the management are, in our opinion reasonable and adequate in relation to the size of the company
and nature of its business. The company is maintaining proper records of Inventory. The discrepancies
noticed on physical verification of stocks as compared to book records were not material; however, the
same have been properly dealt with in the books of accounts.
3. a) As informed, the company has not granted a loan, to companies, firms or other parities covered in
the Register maintained under section 301 of the Companies Act, 1956.
b) In our opinion, loan of Rs.859,675/- taken by the Company from two of its Directors covered in the
register maintained under section 301 of the Companies Act, 1956, the rate of interest and otherterms
and conditions of loans taken by the company are not prima facie prejudicial to the interest of the
company. The principal amount is still due as on date.
4. 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 the nature of its business,
for purchase of Inventory, Fixed Assets and for the sale of goods. In our opinion, there is no continuing
failure to correct major weakness in internal control systems.
5. (a) In ouropinion, the particulars of contracts and arrangements referred to in Section 301 of the Act
have been entered in the register required to be maintained under that section; and
(b) In ouropinion, each of these transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted any deposits within the provisions of Sections 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975.
7. The Company has an internal audit system commensurate with its size and nature of its business.
8. As explained to us, the Central Government has not prescribed maintenance of Cost Record for any of
the products manufactured by the Company under section 209 (1) (d) of the Companies Act, 1956.
34
9)
a) The company has not been regular in depositing undisputed statutory dues including Provident
Fund, Income Tax, Sales Tax, Excise Duty and cess with the appropriate authorities.
Details of amount due exceeding 6 months
1)
2)
3)
Rs. 32391.00
Rs. 26546.00
Rs. 341773.00
TDS
Professional Tax
Income Tax Demand
10. The company has no accumulated losses to carry forward and has not incurred cash losses in the
financial year under report and in the immediately preceding financial year.
11. The company has not defaulted in repayment of dues to a financial institution or bank or debenture
holder.
12. As explained to us, the company has not granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
13. The company is not a chit fund, nidhi or mutual benefit fund/society.
14. The company is not dealing or trading in shares, securities, debentures and other investments.
15. The company has not given guarantees for loans taken by others from banks or financial institutions
16. Term loans are applied for the purpose of which they were obtained.
17. The funds raised on short-term basis have not been used for long term investment.
18. The company has not made any preferential allotment of shares to parties and companies covered in
the Register maintained undersection 301 of the Act
19. The company has not issued debentures during the year.
20. The company has not raised any money through a public Issue during the year.
2 1 . During the checks carried out by us, any fraud on or by the company has not been noticed.
For and on behalf of
PRATAPKARAN PAUL & CO.,
Chartered A c c o u n t a n t s ,
Date
Place
Pratapkaran Paul
Partner.
: 25th May, 2006
: Chennai.
35
Financial Statements
36
B A L A N C E SHEET AS AT 31.03.2006
Sen.
SOURCE OF FUNDS
Shareholders Funds:
Equity Capital
Reserves & Surplus
Loan Funds
Secured Loans
Unsecured Loans
No
1
41,000,000
9,367,855
41,000,000
2
3
28,749,793
22,955,507
12,356,503
2,745,838
102,073,155
56,102,341
36,580,841
9,838,808
26,742,033
36,757,604
8,906,713
27,850,891
24,000,000
24,000,000
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross Block
Less:Depreciation
Net B l o c k
4
INVESTMENTS
5
CURRENT ASSETS, LOANS AND ADVANCES
a. Inventories
b. Sundry Debtors
c. Loans and Advances
d. Cash and Bank Balances
LESS: CURRENT LIABLITIES AND
PROVISIONS
a. Current Liabilities
b. Provision for taxation
6
6.1
6.2
6.3
6.4
7
_
'
16,310,234
30,572,818
34,368,218
43,342
42,090,580
1,254,254
Net Current Assets
Mis.Expenditure
Profit & Loss Account
TOTAL
Significant Accounting Policies
Notes to the Accounts
(Rs)
AS AT
31.03.2005
A S AT
31.03.2006
8
81,294,612
13,596,583
1,437,706
2,835,184
45,614
17,915,088
43,344,834
29,067,874
345,000
29,412,874
37,949,778
(11,497,786)
13,381,344
102,073,155
8,325,357
7,423,879
56,102,341
19
20
Schedules 1 to 8, 19 & 20 refered to above form an integral part of the Balance Sheet
This is the Balance Sheet referred
to in our Report of even date
For Pratapkaran Paul & Co.,
Chartered A c c o u n t a n t s ,
Pratapkaran Paul
Partner
For and on behalf of the Board
Dr.G.Subramanian
Director
25th May, 2006
Chennai
37
K.O.Isaac
Chairman & Managing
Director
Schedule to Balance Sheet
Schedule No.1
SHARE CAPITAL
AS AT
31.03.2006
Authorised:
60,00,000 Equity Share of
Rs.107- Each
Issued, Subscribed & Paid up:
41,00,000 Equity Shares of Rs.10 Each for
Cast at par
(Rs)
AS AT
31.03.2005
60,000,000
60,000,000
41,000,000
41,000,000
41,000,000
41,000,000
14,396,125
10,222,143
Schedule No.2
SECURED LOANS
A. From Banks and Financial Institutions
(a) From State Bank CC account
Cash Credit
(Security Details ref SI.No.1 to Notes on
Accounts)
(b) From SBI
Demand Loan
(Secured against Fixed Deposits made from Soft Loan)
c) From Others
4,830,000
7,848,577
Under Hirepurchase Agreement
(Securred against assets purchased under H.P.A.)
1,675,090
2,134,360
Total
Schedule No.3
UNSECURED LOANS
28,749,793
12,356,503
A. From Directors
B. From Others
859,675
22,095,832
650,006
2,095,832
22,955,507
2,745,838
13,000,000
13,000,000
11,000,000
24,000,000
11,000,000
24,000,000
Schedule No.5
INVESTMENTS
AT COST
Unquoted- Fully Paid
1,300,000 Equity Shares of Rs.10 Each of
M/S.Samudra Biopharma Private Limited
Share Application Money with M/S.Samudra
Bio pharma Private Limited
38
Schedule No.4
Fixed Assets as on 31.3.2006
(Rs)
GROSS BLOCK
Particulars
LAND
As At
01.04.2005
Additions Sale/trf
As At
31.03.2006
2,136,073
-
-
2,136,073
16,445,128
-
-
16,445,128
9,187,275
-
-
ELECTRICAL
INSTRUMENTS
982,768
-
OFFICE EQUIPMENT
918,096
LAB EQUIPMENT
BUILDING
PLANT AND MACHINERY
FURNITURE & FITTINGS
LIBRARY
As At
01.04.2005
-
DEPRECIATION
For the
year
Adjustments
NET BLOCK
As At
31.03.2006
A s At
31.03.2006
A s At
31.03.2005
-
2,136,073
2,136,073
-
-
2,267,043
268,056
-
2,535,099
13,910,029
14,178,085
9,187,275
3,573,438
436,396
-
4,009,834
5,177,441
5,613,837
-
982,768
245,903
46,681
-
292,584
690,184
736,865
94,098
-
1,012,194
473,324
184,398
-
657,722
354,472
444,772
247,811
52,978
-
300,789
174,275
12,981
-
187,256
113,533
73,536
1,726,614
19,518
-
1,746,132
419,588
109,555
-
529,143
1,216,989
1,307,026
-
-
34,321
17,139
2,173
-
19,312
15,009
17,182
34,321
VEHICLES
3,617,977
265,000
759,407
3,123,570
930,324
345,156
719,460
556,020
2,567,550
2,687,653
COMPUTERS
1,461,541
151,050
-
1,612,591
805,680
246,159
-
1,051,839
560,752
655,861
TOTAL
36,757,604
582,644
759,407 36,580,841
8,906,713
1,651,555
9,838,808
26,742,033
27,850,891
Previous Year
34,787,795
1,969,809
36,757,604
7,445,853
1,460,860
8,906,713
27,850,891
27,341,942
-
719,460
-
Schedule to Balance Sheet
Schedule No.6.1
INVENTORIES (as Certified by the
Management)
(Rs)
A S AT
31.03.2006
A S AT
31.03.2005
5,040,544
7,419,927
1,367,971
2,481,792
3,232,340
6,540,789
1,101,827
2,721,627
Total
16,310,234
13,596,583
Schedule No.6.2
S u n d r y Debtors (Unsecured)
Less than 180 Day
Considered Good and Recoverable
Others
Total
30,296,578
276,240
30,572,818
1,118,156
319,550
1,437,706
Raw Material
Work In Progress
Packing Materials
Finished Goods
Schedule No.6.3
LOANS, ADVANCES AND DEPOSITS
(Unsecured considered Good)
Staff Advance
1,347,260
114,639
Interest Receivable
Deposits
Advance others
22,071,867
10,949,091
1,415,317
1,305,228
Total
34,368,218
2,835,184
3,695
15,065
Balance w i t h Banks
On current account
39,647
30,549
Total
43,342
45,614
2,284,550
1,315,614
23,619,595
8,383,173
5,920,914
501,993
1,936,768
17,165,964
7,600,791
1,442,392
566,734
419,966
42,090,580
29,067,874
Schedule No.6.4
CASH AND BANK BALANCE
Cash, Cheques and Stamps on Hand
Schedule No.7
CURRENT LIABILITIES & PROVISIONS
a. Current Liabilities
Sundry Creditors Advances
Sundry Creditors others
Sundry Creditors Trade
Oustanding Expenses
Other Liabilities
b. Provisions
Provisionfor Gratuity & Bonus
Total
40
(Rs)
A S AT
Schedule No. 8
31.03.2006
A S AT
31.03.2005
MISCELLANEOUS EXPENDITURE & RESEARCH A N D
DEVELOPMENT EXPENDITURE
Balance as per last year
Less: Written Off during the year
Balance
Research and Development Expenditure
Add: Additions
Total
Less: Written Off during the year
Balance
Balance carried over to the Balance Sheet
1,804,660
a
1,804,660
8,325,357
3,251,328
11,576,685
238,116
238,116
-
b
11,576,685
4,753,066
4,522,904
9,275,970
950,613
8,325,357
a+b
13,381,344
8,325,357
-
41
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2006
Sch. No
For the year ended
31.03.2006
Income
Sales
Other Income
Increase in Inventory
10
11
12
(Rs)
For the year ended
31.03.2005
99,514,628
10,082,200
639,303
67,846,502
17,568
6,152,811
110,236,131
74,016,881
32,286,374
41,390,669
6,025,801
7,606,346
419,680
87,728,870
30,514,207
21,139,195
6,080,655
7,976,615
465,924
1,188,729
67,365,325
22,507,261
6,651,556
2,809,718
1,514,980
19,697,543
5,136,575
1,651,555
1,460,860
18,045,988
3,675,715
-
2,786,731
18,045,988
6,462,446
1,254,254
345,000
Profit after taxation and before Extra-ordinary Items
16,791,734
6,117,446
Loss for the earlier year brought forward
(7,423,879)
13,541,325
9,367,855
(7,423,879)
4.10
1.49
4,100,000
4,100,000
Total Income
Expenditure
Material Cost
Direct Expenses
Personnel Cost
Administrative Expenses
Selling Expenses
Research and Development and Preliminary Expenses w/o
Total Expenditure
13
14
15
16
17
8
-
Profit Before Interest and Depreciation
18
Financial Charges
Profit Before Depreciation and Taxation
Depreciation as per Companies Act
Profit before Taxation & Extra-ordinary Item
Add: Excess Provision of Previous Year now written back
Profit before taxation and Extraordinary Items
Provision for Taxation
Profit / Loss Carried Forward to BS
Significant Accounting Policies
Notes to the Accounts
Basic and Diluted Earnings Per Share
(in Rupees) Face Value Rs.10(Note 14 )
19
20
Number of Equity Shares
This is the Profit and Loss Account referred to in our report of even date.
For Pratapkaran Paul & Co.,
Chartered Accountants,
Pratapkaran Paul
Partner
For and on behalf of Board
Dr.G.Subramanian
Director
42
K.O.Isaac
Chairman & Managing Director
Schedule to Profit and Loss Account
in Rs
For the year ended
31.03.2006
Schedule No.10
SALES
Sales (Inclusive of Excise Duty)
For the year ended
31.03.2005
99,514,628
67,846,502
99,514,628
67,846,502
10,082,200
17,568
10,082,200
17,568
4,334,167
1,872,682
4,334,167
1,872,682
29,762,474
4,598,249
34,360,722
28,013,808
4,961,884
32,975,692
Less: Closing Stock
Raw Materials
Packing Materials
5,040,544
1,367,971
3,232,340
1,101,827
Total Closing stock
6,408,515
4,334,167
32,286,374
30,514,207
6,540,789
2,721,627
9,262,416
1,587,845
1,521,760
3,109,605
7,419,927
2,481,792
9,901,719
639,303
6,540,789
2,721,627
9,262,416
6,152,811
Schedule No.14
DIRECT EXPENSES
Capsulation Charges
10,240,905
9,812,884
C and F Expenses
Labour Charges
Packing Materials
Excise duty
Total
661,043
64,963
962,384
29,461,374
41,390,669
1,052,775
85,454
346,632
9,841,450
21,139,195
Schedule No.11
OTHER INCOME
Other Income
Schedule No.13
MATERIAL COST
Opening Stock
Raw Materials
Total Opening Stock
Add: Purchases
Raw Materials
Packing Materials
Total Purchases
Raw Material Consumed
Schedule No.12
STOCK (INCREASE) / DECREASE
Opening Stock
Work in Progress
Finished Goods
Total Opening Stock
a+bc
Less: Closing Stock
WIP
Finished Goods
Total Closing stock
43
S c h e d u l e t o Profit a n d L o s s A c c o u n t
S c h e d u l e No.15
PERSONNEL COST
For t h e year e n d e d
31.03.2006
Salaries & Bonus
Gratuity
Staff Welfare Expenses
Contribution to Provident Fund
Total
(Rs)
For the year e n d e d
31.03.2005
4,989,836
61,768
208,812
765,386
5,219,233
30,800
182,006
648,616
6,025,801
6,080,655
67,344
4,196
70,535
528,747
66,120
7,364
S c h e d u l e No.16
ADMINISTRATIVE EXPENSES
Auditors Remuneration
Books and Periodicals
Brokerage
Communication Expenses
Donation
Electicity Bills
Hire charges
Insurance
Loss On sale of assets
Misc Expenses
Printing and Stationery
Rent rates & Taxes
Repairs & Maintenance
Security Charges
Seminar & Training
173,119
383,716
109,313
343
180,573
257,192
1,363,617
828,702
751,470
196,734
1,263,965
1,426,780
Service, Legal & Consultancy Charges
Travelling Expenses
Vehicle Maintenance
Total
31,825
12,500
193,003
80,507
185,068
114,802
234,624
1,385,445
1,379,911
500,620
1,699,996
1,178,314
206,516
7,606,346
7,976,615
Sales Promotion Expenses
419,680
465,924
Total
419,680
465,924
1,777,002
1,032,716
1,139,927
375,053
2,809,718
1,514,980
S c h e d u l e No.17
SELLING EXPENSES
S c h e d u l e No.18
FINANCE CHARGES
Interest on Loans
Bank Charges
Total
44
Schedule No.19
SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION OF FINANCIAL
STATEMENTS
The financial statements have been prepared in accordance with the Accounting Standards
Specified by the Institute of
Chartered Accountants of India.
ACCOUNTING CONVENTION AND REVENUE RECOGNITION
The financial statements are prepared und
er the historical cost convention, in accordance with the generally accepted
accounting principles and the provision of Companies Act, 1956, as adopted and consistently
followed by the
Company.
FIXED ASSETS
Fixed Assets are stated at
Cost of acquisition less accumulated depreciation
DEPRECIATION
The Company has adopted Depreciation as per the Companies Act, 1956
INVENTORIES
a) Raw Materials, Packing Material - Valued at Cost
b) Work in Progress - Valued at Cost
c) Finished Goods - valued at net realisable value.
INVESTMENTS
Long term Investments are stated at cost
RETIREMENT BENEFITS
a) Gratuity liability under the Payment of Gratuity Act is accured and provided at the end of each
financial year.
b) Retirement benefits in the form of provident fund and pension./superannuation schemes whether
in pursuance of any law or otherwise is accounted on accrual basis and charged to profit and loss
account for the year.
As per our Report of even date attached
For Pratapkaran Paul & Co.,
Chartered Accountants,
Pratapkaran Paul
Partner
For and on behalf of the Board
Dr.G.Subramanian
Director
25th May, 2006
Chennai
45
K.O.Isaac
Chairman & Managing Director
Schedule No.20
NOTES TO THE ACCOUNTS
1
Secured Loans
State Bank of India
Primary Security
a) Hypothecation by way of First Charge of all the company's stocks of raw materials, semi finished, finished
goods, stores, spares, book debts/movables and the Company's Fixed assets both present and future.
Co\\atera\ Security
b) EM of Immovable properties at Thimmapuram Village, Bheemunipatnam Mandalam, Vishakapatnam District,
- all that piece of land extent 29 cents or 0.116 hectares survey no.329/3, Thimmapuram Village
- all that piece of land extent 33 cents or 0.132 hectares covered by survey no.329/3, Thimmapuram Village
- all that piece of land extent of 0.52 cents or 0.208 hectares covered by survey no.329/3, Thimmapuram
Village
- all that piece of land extent of 0.20 cents or 0.080 hectares or 968 sq. yard or 813.12 sq.mtrs covered by
S.No.329/3 of Thimmapuram Village
- all that piece of land extent of 860 sq. yards covered by survey no.329/3, Thimmapuram Village,
Kapuluppada Panchayath, Beemunipatnam Mandalam, Vishakapatnam, District.
Demand Loan
Secured against Fixed Deposit of 2 Crores received from the Department of Science and Technology.
2
Unsecured Loans
Unsecured Loans includes the Soft Loan of Rs.2 Crore from Department of Science and Technology.
3
Investments
a) Shares held by M/S.ABL Biotechnologies Ltd in M/S.Samudra Biopharma Private Limited amounting to
Rs.130 lacs is pledged to TDB of Government of India as collateral security for the loan facility extended to
M/S.Samudra Biopharma Private Limited.
b) Investment represents the cost price and no adjustment has been made due to change in the value of the
share of the M/S.Samudra Biopharma Private limited, being a private limited company and not traded.
c) No interest has been recognised from the above investment of Rs.2.4 crores
4
Fixed Assets
Depreciation on Fixed Assets is calculated on Straight Line Method in accordance with the rates prescribed
under Schedule XIV of the Companies Act, 1956. Sale of Assets had been adjusted and loss is charged to
Profit & Loss account.
5
Research and Development Expenditure
During the year Rs. 32.51 Lacs (Rs45.22 Lacs) was spent towards development of Bio-technology products.
Out of the Total Expenditure of Rs115.75 Lacs (Rs.92.75 Lacs) including the additional expenditure incurred
during the year, no amount has been written off as per the decision of the management and profit is higher to
that extent.
•
.
-
6
Additional information as required in Para II of Schedule VI to the Companies Act, 1956
Technology Sales
The Company has recognised a technology sale income of Rs.50 lacs during the year, made to M/s Samudra
Biopharma Private Limited, a related party as per agreement.
Royalty
The Company has recognised Royalty Income from M/s Samudra Biopharma Private Limited as per
Technology Agreement dated 15th June, 2000.
46
Year Ended
a)
Turnover
Softgel capsules
b)
Closing Stock
31.03.2006"
Value
Rs
99,514,628
31.03.2005
Value
Rs
58,005,052
5,040,544
7,419,927
2,481,792
Raw Materials (Various Items)
WIP
Finished Goods (Softgel- Various Items)
3,232,340
6,540,489
2,721,627
c)
Consumption
32,286,374
30,514,207
d)
Raw Materials (Various Items)
34,360,722
32,975,692
7
Value of Imports calculated on C.I.F.basis:
8
Expenditure in Foreign Currency during
the Financial Year (In Rs)
9
10
NIL
NIL
a) Foreign Travel
b) Technicians' Salary
c) Purchase Trading Items
221,126
NIL
NIL
NIL
Earnings in Foreign Exchange : (In Rs)
799,845
Unsecured Loans" Include Loans from Directors as per the following breakup.
Name
11
Balance As on
31.03.2006
K.O.Isaac
Rosemary Isaac
Rs
790,504
69,171
Rs
580,835
69,171
Total
859,675
650,006
2005-2006
2004-2005
30,000
20,000
10,000
30,000
20,000
10,000
Auditors Remuneration
Statutory Auditors:
Audit
Tax Audit
Certification Fees
12
Balance As on
31.03.2005
in Rs
in Rs
in Rs
The Equity Shares of the Company are listed in the Bombay and Chennai Stock Exchanges. The Listing fee
is due for the year.
47
Related Party Disclosures
As per Accounting Standard (AS) 18 issued by The Institute of Chartered Accoutants of India, the
Company's related parties in terms of AS 18 are disclosed below
(a) Other Related parties with whom transactions have taken place during the year.
Nature of Relationship
The Company holds 40% shares in M/S. Samudra Biopharma
private Limited and Managing Director of the Company is
also the Chair man of M/S.Samudra Biopharma Private Limited
(b) Transactions with Related Parties
Current Year
in Rs
Previous
Year
in Rs
1) M/S.Samudra Biopharma Private Limited
(Formerly Shanta Marine Biotechnologies Pvt Ltd)
Trade Advance
Investments in Share Application
5,401,118
2,541,884
11,000,000
11,000,000
Royalty receivable
5,000,000
Technology Sale Income Receivable
5,000,000
26,401,118
Total
13,541,884
2) M/S.Sea Horse Trading Private Limited
Advances Received
Reimbursement of Expenses
3,000
Advances Paid
22,378
(c )Amount due to (from) related party: as on 31st March 06
Amount
Receivable
Amount
Payable
In Rs
In Rs
M/S.Sea Horse Trading Pvt.
1,171,883
In calculating Basic and Diluted Earnings per share:
Numerator Used
2005-06
2004-05
Profit Before Extra-ordinary items
16,791,734
6,117,446
16,791,734
6,117,446
4.10
1.49
Profit after Extra-ordinary items
Earnings per share:
Excluding Extra-ordinary items
Including Extra-ordinary items
Denominator Used (No. of Equity shares Outstanding)
48
4.10
1.49
4,100,000
4,100,000
15
16
No Confirmation of balances has been obtained with regard to Sundry Debtors and Sundry Creditors.
Provision for Taxation includes current year provision and FBT payable. Short provision of Rs.536215/- has been
made and the profit will be overstated to that extent.
17
The company has no reportable segment under AS17.
18
Out of the tax demand for the assessment year 2000- 2001 amounting to Rs.6,70,674/- An Amount of Rs.450000/had been remitted as on 31.03.2006 and the balance is payable as on this date.
19
Penal interest of Rs.121099/- had been paid by the company and is charged to Profit & Loss account. The company
has approached the Assessing officer for waiver and refund of the same.
20
Deferred Tax
In term of Accounting standard (AS22) on "Accounting for Taxes on Income" issued by the Institute of Chartered
Accountants of India, there is a net deferred tax liability.
In compliance with the provision of the Accounting Standard and based on general prudence, the company has not
recognised the said deferred tax liability while preparing the accounts of the current year.
21
Previous Year Figures have been regrouped and rearranged wherever necessary, to confirm to current year's
classification.
22
The figures have been rounded off to the nearest rupee.
As per our Report of even date attached
For and on behalf of the Board
For Pratapkaran Paul & Co.,
Chartered Acountants,
Pratapkaran Paul
Partner
Dr.G.Subramanian
Director
25th May, 2006
Chennai
49
K.O.Isaac
Chairman and Managing Director
CASH FLOW STATEMENT
Current Year
2005-2006
Previous Year
2004-2005
9
10
Cash from Operating Activity
Net Profit as per profit and loss
Adjustments for:
Depreciation
Loss on Sale of Assets
R & D Expenses and Misc. Exp. w/o
Interest paid
Provision for Income Tax
Tax Paid During The year
Excess provision writen back
Bad Debts
Mis. Expenditure Deferred
11
12
13
14
Operating Profit before working capital Changes
Adjustments for
Inventories
Trade and Other Receivables
Loans and Advances
Sundry Creditors
(27.14)
(291.35)
(315.33)
130.23
(86.14)
(3.01)
(12.68)
138.82
14
Cash generated from Operation
Interest Paid
(332.53)
(28.10)
70.16
(15.15)
Cash Flow before Extraordinary items
Extraordinary items
(360.63)
55.01
15
Net Cash from Operating Activities
CASH FLOW FROM INVESTING ACTIVITIES
Sale of Asset
Investment in Share Application
Purchase of Assets
(360.63)
A
1
CD
2
3
4
5
7
CO
B
C
61.17
16.52
0.00
14.61
-
28.10
12.54
(3.46)
-
11.89
15.15
3.45
-
-
(27.87)
(50.56)
(45.23)
171.06
33.17
-
-
Net cash used in Investing Activities
CASH FLOW FROM FINANCING ACTIVITIES
Indian Bank WC loan Repaid
Secured Loan
,
Vehicle Loan
Unsecured Loan
Net cash from Financing Activities
Net Cash Flow During the year
Cash and Cash Equivalent as at 01.04.2005
Cash and Cash Equivalent as at 31.03.2006
Place :Chennai
Date :25th May,2006
167.92
-
55.01
-
0.40
(5.83)
(110.00)
(19.70)
(5.43)
(129.70)
-
-
163.93
;
202.10
366.03
(0.03)
0.46
0.43
Dr. G.Subramanian
Director
(32.65)
102.22
4.85
74.42
(0.27)
0.72
0.46
,
K.O. Isaac
Chairman & Managing Director
AUDITOR" S REPORT
We have examined the above Cash Flow Statement of M/S.ABL BIOTECHNOLOGIES LIMITED for the period ended
March 31, 2006. The statement has been prepared by the Company in accordance with the requirements of the clause 32
of the listing agreement and is based on and in agreement with the corresponding Profit & Loss account and Balance Sheet
of the Company covered by our report of 25th May,2006 to the members of the Company.
For Pratapkaran Paul & CO.,
Chartered Accountants,
25th May, 2006
Chennai
Pratapkaran Paul
Partner
50
B A L A N C E SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
1
R e g i s t r a t i o n Details
Registration No.
State Code
Balance Sheet Date
22340
18
31.03.2006
2
Capital raised d u r i n g the year ( A m o u n t in T h o u s a n d s )
3
P o s i t i o n of M o b i l i s a t i o n a n d D e p l o y m e n t of F u n d s ( A m o u n t in R s . T h o u s a n d s )
Total Liabilities
Total Assets
Source of Funds
Paid up Capital
Reserves and Surplus
Secured Loans
Unsecued Loans
4
102,073
102,073
41,000
9,368
28,750
22,956
Application of Funds
Net Fixed Assets
Profit and Loss Account
Investment
Net Current Assets
Misc. Expenses
26,742
24,000
37,950
13,381
P e r f o r m a n c e of C o m p a n y ( A m o u n t in Rs. T h o u s a n d s )
Turnover (including other income)
Total Expenditure
Profit Before Tax
Profit after Extra-ordinary items
Profit After Tax
Earnings Per share
Dividend
5
NIL
110,236
92,190
18,046
18,046
16,792
4.10
Generic Name(s) of P r i n c i p a l P r o d u c t s / S e r v i c e s of C o m p a n y (as per m o n e t a r y t e r m s )
Item Code No.(ITC Code)
Product Description
Softgel Capsule
A s per o u r R e p o r t o f even date a t t a c h e d
For Pratapkaran Paul & Co.,
Chartered A c c o u n t a n t s ,
Pratapkaran Paul
Partner
For a n d o n behalf o f the B o a r d
Dr.G.Subramanian
Director
25th May, 2006
Chennai
51
K.O.Isaac
C h a i r m a n & M a n a g i n g Director
Notice to Share Holders
52
NOTICE TO THE SHAREHOLDERS
NOTICE is hereby given that the Fourteenth Annual General Meeting of the Company will be held
on Thursday, the 28 day of September 2006 at 'Bharathi Vidya Bhavan'rMylapore, Chennai - 600
004 at 11.00 A.M. to transact the following business:
th
ORDINARY BUSINESS
s t
1.
To receive consider and adopt the Balance Sheet as at 3 1
Directors and Auditors thereon.
March 2006, and the report of the
2.
To appoint a Director in the place of DR.S.RAVINDRAN, who retires from office by rotation and
being eligible offers himself for reappointment
3.
To appoint auditors to hold office until the conclusion of the next Annual General Meeting and to fix
their remuneration. The retiring auditors, M/s. Pratap Karan Paul & Co. are eligible for
reappointment.
SPECIAL BUSINESS:
To Consider and if though fit, to pass, with or without modifications(s), the following resolutions as
Special Resolution:
4)
Increase in Authorized Share Capital of the company.
a)
"RESOLVED that pursuant to the provisions of Sections 16, 94 of the Companies Act, 1956
(including any amendments to or re-enactment thereof), the authorized share capital of the
Company be increased from Rs.60,000,000/- divided into 60,00,000 Equity Shares of face value of
Re. 10/- each to Rs.200,000,000 divided into 20,000,000 equity shares of Rs,10/- (Rupees Ten
Only) each and that the Memorandum of Association and Articles of Association of the company be
altered accordingly."
"RESOLVED FURTHER THAT the existing Clause V of the Memorandum of Association of the
Company, relating to authorized share capital be altered by substituting the same with the following
clause:
The authorized share capital of the Company is Rs.200,000,000/- (Rupees twenty crores only)
divided into 20,000,000 (Two crores) Equity shares of Rs.10/- (Rupees ten only) each with power
to increase or reduce and alter the capital in accordance with the provisions of the Companies Act,
1956.
b) "RESOLVED FURTHER THAT the existing regulation 3 (a) of the Articles of Association of the
Company be and is hereby altered and reads as under:
The authorized share capital of the Company is Rs.200,000,000/- (Rupees twenty crores only)
divided into 20,000,000 (Two crores) Equity shares of Rs. 10/- (Rupees ten only) e a c h .
5. Issue of Shares by way of Rights, Private Placement & ADR/GDPJ FCCB
"RESOLVED THAT pursuant to Section 81(1 A) and other applicable provisions, if any, of the
Companies Act, 1956, and subject to the approvals, consents, permissions and / or sanctions as may be
necessary, of the Government of India (GOI), Reserve Bank of India (RBI), and the Securities and
53
Notice, to
tkt SkaMkoMeh^
Exchange Board of India (SEBI), the Listing Agreement entered by the company with the Stock
Exchanges and any other appropriate authorities, institutions or bodies and. subject to such conditions
as may be prescribed by any of them in granting any such approval, consent, permission or sanction, the
Board of Directors of the Company (hereinafter referred to as "the Board", which term shall be deemed to
include any committee of the Board exercising the powers conferred by the Board) be and is hereby
authorized on behalf of the Company to issue / offer and allot Equity Shares and Securities convertible
into Equity shares whether optionally or otherwise) by way of Rights issue, Public Issue, Private
placement, Foreign Currency Convertible Bonds (FCCB's)/Global Depositary Receipts (GDR's) /
American Depositary Receipts (ADR's) (hereinafter referred to as "Securities") or a combination thereof
for an aggregate amount not exceeding - Rs.90.00 Crores (with permissible green shoe option) or its
equivalent in Indian and / or in any other currency(ies) (inclusive of such premium, as may be fixed on
such Equity shares) or upon such limit as may be permitted by the Ministry of Finance or such other
Authorities, whichever is higher, directly to Indian or Foreign Investors (whether institutions,
incorporated bodies, mutual funds and / or individuals or otherwise and whether or not such investors are
members, promoters, directors or their associates of the Company) at such time or times and in such
tranches, at such price or prices, at a discount or premium to market price or prices in such manner and
on such terms and conditions contained in the Letter of Offer including security, rate of interest etc. as
may be decided and deemed appropriate by the Board at the time of such issue or allotment considering
the prevailing market conditions and other relevant factors wherever necessary, in consultation with the
Lead Managers and Underwriters or through the subsidiaries, so as to also enable the Company to get
listed at Stock Exchanges".
"RESOLVED FURTHER THAT the Board be and is hereby authorized to accept any modifications in the
proposal as may be required by the authorities involved in such issues but subject to such conditions as
the SEBI / GOI / RBI or other such appropriate authorities may impose at the time of their approval and as
agreed to by the Board."
"RESOLVED FURTHER THAT without prejudice to the generality of the above, issue of securities in
international offering may have all or any term or combination of terms in accordance with the
international practice including but not limited to conditions in relation to payment of interest, additional
interest, premium on redemption, prepayment and any other debt service payment whatsoever and all
such terms as are provided in international offering of this nature including terms for issue of additional
Equity Shares or variation of the conversion price of the Securities during the duration of the securities."
"RESOLVED FURTHER THAT the Board be and is authorized to enter into and execute all such
arrangements / agreements with any Lead Managers / Underwriters / Guarantors / Depositors /
Custodians and all such agents as may be involved or concerned in such offering of securities and to
remunerate all such agents, including by way of payment of commission, brokerage, fees, expenses
incurred in relation to the issue of securities and other expenses if any, or the like."
"RESOLVED FURTHER THAT the Board be and is hereby authorized subject to approval of the
Reserve Bank of India and the concerned authorities to secure the entire or any part of the issue by
creation of a mortgage / charge on the Company's immovable and movable properties, present and
future, such charge to rank either pari passu with, or second, subsequent, subservient and subordinate
to all the mortgages / charges created / to be created by the Company for all existing and future
borrowings and facilities whatsoever."
"RESOLVED FURTHER THAT the Securities issued for international offerings shall be deemed to have
been made abroad in the market and / or at the place of issue of the Securities in international markets
and shall be governed by English or American law, as the case may be."
54
Ncbucjb to ike, SkaAeholdeAL
RESOLVED FURTHER THAT the Board be and is hereby authorized to issue and allot such number of
Equity Shares as may be required to be issued and allotted upon conversion of any Securities referred to
in the paragraph(s) above as may be necessary in accordance with the terms of the offering and all such
shares to rank pari passu with the existing Equity shares of the Company in all respects, excepting such
right as to dividend and voting as may be provided under the Terms of the issue and in the Offer
Document."
"RESOLVED FURTHER THAT for the purpose of giving effect to any issue of allotment of Equity Shares
or Securities representing the same, the Board be and is hereby authorized to do all such acts, deeds,
matters and things as it m a y , in its absolute discretion, deem necessary or desirable including listing of
the shares/securities and to settle any questions, difficulties or doubts, that may arise in regard to the
offering, issue, allotment and utilization of the issue proceeds, as it may in its absolute discretion, deem
fit and proper and that the Board be and is hereby authorized to delegate all or any of the powers herein
conferred to any committee of Directors or Senior Executive(s) / Officer(s) of the Company to give effect
to the resolution".
6. Issue of shares on a preferential basis:
"RESOLVED THATpursuanttotheprovisionsofSection81(1A) and all other applicable provisions if
any, of the Companies Act, 1956 (the "Act") (including any statutory modification or re-enactment
thereof for the time being in force) and in accordance with the provisions of the Articles of
Association of the Company, the Listing Agreement entered into by the Company with the stock
exchanges where the shares of the company are listed, the guidelines and clarifications issued by
the Securities and Exchange Board of India (the "SEBI") and any other statutory/regulatory authorities,
and subject to all such other approvals, permissions, consents and sanctions of any authorities, as may
be necessary and subject to such conditions and modifications as may prescribed or imposed by any of
them while granting such approvals, permissions, consents and sanctions and which may be agreed
to by the Board of Directors of the Company (hereinafter referred to as the "Board") which terms shall
also include any committee thereof, the consent of the Company be and is hereby accorded to the
Board of directors to offer, issue and allot upto an extent of 30,00,000 warrants convertible into Equity
Shares value per share Rs.10/-and premium per share Rs.45 aggregating to Rs. 16,50,00,000 (Rupees
sixteen crores fifty lakhs only) being the price determined in accordance with the SEBI (Disclosure and
investor Protection) Guidelines, 2000 ("SEBI Guidelines) as in force on the date of this notice, to
Mr.K.O.Isaac, Promoter and his associates on such terms and conditions including conditions as to
dividends, premiums, terms of conversion, etc., as the Board may in its absolute discretion deem fit and
in accordance with the Articles of Associations of the Company and as per the Guidelines of SEBI."
"RESOLVED FURTHER THAT Rs.1,65,00,000 (Rupees one crores and sixty-five lakhs only)
amounting to 10% of the total subscription Price in respect of shares that may be allotted upon
conversion of the warrants determined in accordance with the SEBI Guidelines, be paid up-front on the
date of the allotment of the warrants to such person(s)."
"RESOLVED FURTHER THAT the warrants holder shall have the option of applying for and being
allotted Equity Shares of the company of face value of Rs.10/- each by paying the balance subscription
amount after adjusting the upfront payment made by them on the date of allotment of such warrants or at
any time prior to the expiry of 18 months from the date of allotment of the warrants."
"RESOLVED FURTHER THAT to the extent permitted as per the existing provisions of law in this regard
all/any Equity Shares resulting from the conversions of the warrants to be allotted as an outcome of the
above mentioned preferential allotments shall rank pari passu in all respects with the then existing Equity
Shares including dividend entitlement.
55
Notice, to
tkt Ska/ukoUe\^
"RESOLVED FURTHER THAT the relevant date in relation to the above mentioned Preferential
issue of share warrants for the purpose of determining the issue price under the SEBI Guidelines
shall be 28 August 2006."
,h
"RESOLVED FURTHER THAT the Board be and is hereby authorized to accept such amendments,
modifications, variations and alterations as stock exchanges may stipulated in that behalf.
"RESOLVED FURTHER THAT the Board be and is hereby authorized to take necessary steps for listing
of Equity shares allotted under the preferential issue of Equity shares and warrants on one or more
recognized stock exchanges in India where the company's shares are listed, as per the terms and
conditions of the listing agreement with the stock exchanges concerned, and in accordance with such
other guidelines, rules and regulations as may be applicable with regard to such listing.
"FURTHER RESOLVED THAT for the purpose of giving effect to the above, the Board be and is hereby
authorized to take all actions and do all such deeds, matters and expedients to effect the issue or
allotment of aforesaid securities and to resolve and settle all questions and difficulties that may arise in
the proposed issue and allotment of aforesaid securities and to do all acts ,deeds and things in
connection therewith and incidental thereto as the Board in its absolute discretion deem fit, without being
required to seek any further consent or approval of the members or otherwise and intend that they shall
be deemed to have given their approval thereto expressly by the authority of this resolution."
"RESOLVED FURTH ER THAT the Board be and is hereby authorised to delegate all or any of the powers
to any committee of Director's of the company or Managing Director to give effect to the aforesaid
resolutions."
For and on behalf of the Board,
Date: 28.8.2006
Place: Chennai
K.O.Isaac
C h a i r m a n a n d Managing Director
56
Notice- to
tkb SlwvehoWhb,
NOTES
a.
A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A
MEMBER.
b.
The Instrument appointing a proxy shall be deposited at the Registered Office of the Company not
less than 48 hours before the time for holding the aforesaid meeting.
c.
The Register of Members and Transfer Books of the Company will remain closed from Friday, 22
September, 2006 to Thursday, 28 day of September, 2006. (Both days inclusive).
nd
,h
d.
Members/Proxies should bring the Attendance Slip sent herewith duly filled in for attending the
meeting.
e.
Members are requested to notify immediately any change in their address to the Registrar and Share
transfer Agent - M/s. Cameo Corporate Services Ltd., "Subramanian Buildings", 1, Club House
Road, Chennai-600 002.
f.
The equity shares of the Company have been admitted for dematerialization with National Securities
Depository Limited and Central Depository Services Limited. The ISIN No. is INE707D01016.
g.
Information pursuant to Clause 49 of the Listing Agreement for reappointment of Directors is
enclosed herewith for item number 2.
h.
Explanatory Statement as required under section 173 (2) of the Companies Act, 1956 is enclosed
herewith for item numbers 4 to 6.
57
Notice, to
the, SiuAtkotdehi,
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956
AND SEBI (DISCLOSURE & INVESTOR PROTECTION) GUIDELINES" 2000 IN RESPECT OF THE
BUSINESS SETOUT IN THE NOTICE
Item no. 2: Dr.S.Ravindran holds an MS in Orthopaedic Surgery with special interest in Arthoroplastic
Surgeries, Trauma and Peadiatric Orthopaedic surgeries. Dr.Ravindran has enormous experience
and interest in the area of focussed pharmaceutical development, especially in therapeutic nutrition.
He also has exposure to management and operations of business as well as international trade, in
the area of pharmaceuticals. Dr.Ravindran brings to the Board a diverse but thorough exposure to
the area of medicine and pharmaceutical sciences. He is also personally interested in and
associated with the Drug Discovery Programmes at ABL's research facility.
Item no. 4 (a) & (b) for Increase of Authorized Share Capital
The shareholders are well aware that the Company's performance during the past year has shown
significant improvement and the Board of Directors propose to initiate new projects to increase the
efficiency and profitability of the Company
These include a facility for production of DHA, an omega fatty acid necessary for the development of the
human brain, the reduction of low density cholesterol, the improvement of liver function and with
applications in treatment of cancer and neuro-degeneratory diseases. This product will be manufactured
for the first time in India and for the second time in the world. In addition, the Company proposes to
establish a facility for production of Phycocyanin from a marine cyanobacterium, useful in the natural
pigment industry with applications in anti-cancer treatment and diagnostics. The Department of Science
and Technology, Government of India, is funding ABL for clinical research applications of this product.
This product also finds enormous use in the food and cosmetic industry. In addition, ABL proposes to set
up a formulation facility for its finished products to make itself more self reliant. This facility will look at
various formats like liquids, tablets, ointments and capsules and will create opportunity for value addition
of the Company's products.
In this regard your Board of Directors proposes to infuse more funds into the Company by way of issue of
equity shares by public issue, rights issue, preferential allotments including ADR, GDR and other issues
since for the proposed projects the present share capital would not sufficient. To enable the Board of
Directors to effect further issue of shares it was decided to increase the present authorized capital from
Rs.6.00 Crores to Rs.20.00 Crores.
Such issue of further shares and increase in the authorized share capital requires alteration in the
Memorandum and Articles of Association of the company and hence the necessary resolutions are being
put forth for the approval of the shareholders.
None of the Directors are interested in the above resolution except to the extent of their shareholding in
the Company.
Item no. 5 for issue of shares by way of rights, private placement and ADR/GDR/ FCCB
58
Alofxce to tke> SkahAiotJitK^
To meet the fund requirements for its various business plans, the Company intends to enter into the
Capital Market to raise an amount not exceeding Rs.90.00 Crores through issue of equity shares by
way of rights issue, public issue, private placements and equity linked instruments like ADR/GDR/FCCB.
The purpose of the proposed offer is to exploit the emerging opportunities for growth through
acquisitions, joint ventures and strategic alliances, both abroad and in India.
The proposed issue will be subject to the approval of the appropriate authorities and within the
framework of the guidelines issued by the SEBI and as per the terms mentioned in the resolution.
The Company will work out the plans and modes of financing and utilization in consultation with the
advisors, lead managers and / or other agencies wherever applicable subject to the approval of
Government of India, Reserve Bank of India, Securities and Exchange Board of India and other
authorities concerned. Since the modalities and the terms of the issue will be decided by the Board of
Directors, the issue price of such securities will be determined by the Board at the time of issue[s]
depending on the prevailing market conditions and may be listed on stock exchange[s], whether in India
or abroad, as may be deemed fit by the Board and may be represented by depository receipts and / or
such other securities. This resolution gives adequate flexibility in respect of working out the modalities of
issue including size, timing and pricing and also issue such securities in such tranches, at such times and
at such prices and / or such other valuable considerations] as the Board may in its absolute discretion
deem fit.
Section 81 of the Companies Act, 1956, provides that where increase in the subscribed capital of the
Company is proposed by allotment of further shares, such further shares shall be offered to the existing
holders of equity shares in the Company, unless the Board is authorized by a special resolution passed
by the Company in a General Meeting to issue such further shares to any person whether or not those
persons are the existing shareholders of the equity shares in the Company. The proposed resolution
will enable the Board to raise capital in such form and manner as may be decided and also to issue
further shares to such persons who may or may not be the shareholders of the Company.
This special resolution if passed will have the effect of allowing the Board to issue and allot shares to
investors as detailed above, who may or may not be existing shareholders of the Company.
The Board recommends the resolution for approval of the members.
None of the Directors are concerned or interested in the resolution except in so far as it relates to the
offers to be made by way of preferential/rights basis to them or their relatives, associates or Companies
in which they may be interested.
Item no.6. Issue of shares on preferential basis
The information as required under clause 13.1 A of the SEBI (Disclosure and Investor Protection)
Guidelines, 2000 for preferential issues is as under:
a) Objects of the issue through preferential offer:
The Company aims to actively pursue growth opportunities in the growing biopharma sector. The
proposed issue of share warrants will also lead to increase in net worth. The proceeds of Rs.16.5 crores
59
Notice, to tkc SkaxAiclJUh^
to be generated through the proposed issue will be utilized for initiation of the proposed projects for the
production of DHAand Phycocyanin.
(b) The intention of the promoters/directors/key management persons to subscribe to the offer:
The promoters namely Mr. K.O. Isaac and Mrs. Rosemary Isaac intend to apply for 100% of proposed
preferential warrants.
Identity of Existing
Share holding post
Proposed Allottees
(As on date)
No. of shares
% of holding
Mr.K.O.Isaac
847500
20.6707%
Mrs.Rosemary Isaac
286400
6.9854%
Share holding post issue of
equity shares
No. of shares
% of holdings
*
*The percentage of shareholding shall be determined in accordance with the following:
•
In the event of the Company opting for a rights issue, the shareholding of the promoters shall
be restricted within the limits prescribed by SEBI.
•
In the event of the Company not opting for a rights issue, exemption from SEBI shall be
sought prior to the conversion of warrants beyond 5% of the paid up capital for each financial year
falling within 18 months.
60
Notice, to t$w SkaXekctiiK^
(c) Shareholding pattern of the Company before and after the proposed issue of equity shares
pursuant to the resolution:
No. of Shares
Held
Category
Percentage of
Share holding
A.PROMOTERS HOLDINGS
1. Promoters
1136400
Indian promoters
Foreign promoters
2.Persons acting in concert
27.72
NIL
NIL
NIL
NIL
1136400
27.72
21800
147558
0.53
3.60
NIL
169358
NIL
4.13
a. Private corporate bodies
b. Indian public
c. N R I s / O C B s
990004
1782730
14683
24.15
43.48
0.36
d. A n y other (please specify)
Independent Directors
Clearing m e m b e r s
Trust
sub-total
NIL
5825
1000
2794242
Grand total
4100000
NIL
0.14
0.02
68.15
100.00
sub-total
B. Non-promoter's holdings
3. Institutional Investors
a. Mutual Funds and UTI
b.Banks, financial institutions,
insurance companies(central/state gov
institutions/non-government institutions )
c. Flls
sub-total
There will be no change in management control subsequent to the allotment of warrants on Preferential
basis and the conversion of said warrants into equity shares at any time shall be within the prescribed
threshold limit for making of a public offer in terms of SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997. The voting rights will change in tandem with the shareholding pattern.
(d) Proposed time within which allotment will be completed:
As required under SEBI Guidelines, the allotment as aforesaid is proposed to be made within 15 (fifteen)
days of the date of passing of this resolution or within 15 (fifteen) days of receipt of all requisite statutory
approvals, whichever is later within which time 10% of the value of issue of warrants shall be deposited.
(e) Lock-in period
The equity shares proposed to be issued to the investors on preferential basis shall be subject to Lockin-Period as per SEBI (DIP) Guidelines, 2000 as applicable at the time of allotment from the date of
conversion of warrants into equity.
61
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Dr.William Fenical
Discovery Magazine
PROXY AND ATTENDANCE FORM
ABL BIOTECHNOLOGIES LTD
No. 55, 3rd East Street, Kamaraj Nagar, Thiruvanmiyur, Chennai - 600 041.
PLEASE COMPLETE THIS ATTENDANCE AND HAND IT OVER AT THE ENTRANCE OF THE HALL. ONLY
MEMBERS OR THEIR PROXIES ARE ENTITLED TO BE PRESENT AT THE MEETING.
R.F. No.
SI.No.
Name and Address
No.of shares
I hereby record my presence at the FOURTEEN ANNUAL GENERAL MEETING being held at
11.00 A.M at Bharatiya Vidya Bhavan, Mylapore, Chennai - 600 004, on Friday, 28th September
2006 and at any adjournment thereof.
SIGNATURE OF THE SHAREHOLDERS / PROXY
A B L BIOTECHNOLOGIES LTD
No. 55, 3rd East Street, Kamaraj Nagar, Thiruvanmiyur, Chennai - 600 0 4 1 .
I/We
Folio No
of
a Member/Members of ABL BIOTECHNOLOGIES LTD., hereby appoint
of
or failing him
of
as my/our Proxy to attend and vote for me/us and on my/our behalf at the FOURTEENTH ANNUAL
GENERAL MEETING being held at 11.00 A.M at Bharatiya Vidya Bhavan, Mylapore, Chennai 600004, on Thursday, 28th September 2006 and at any adjournment thereof.
Dated this
day of
2006
Signed by
the said
1 Re.
Revenue
Stamp
NOTE : The Proxy must be deposited at the Registered Office of the Company at No.55, 3rd East Street,
Kamaraj Nagar, Tiruvanmiyur, Chennai 600 041 not less than 48 hours before the time for holding the meeting
SHARE HOLDER INFORMATION
A B L Biotechnologies Ltd
No. 55, Third East Street
Kamaraj Nagar
Thiruvanmiyur,
Chennai-600041.
Tel : +91 4442020501 /42020502
F a x : + 9 1 4442020957
For corporate reports and company news, visit our website at :
www.ablbiotechnologies.com
STATUTORY AUDITORS
M/s Pratapkaran Paul & Co.,
Chartered Accountants,
Chennai-600 020.
REGISTRAR A N D SHARE TRANSFER AGENTS.
M/s.Cameo Corporate Service Limited.
"Subramanian Buildings"
1, Club House Road,
Chennai-600 002
Listed o n the f o l l o w i n g e x c h a n g e s
Bombay Stock Exchange
Madras Stock Exchange
Cochin Stock Exchange
SAFE HARBOR STATEMENT
Certain statements in this presentation are forward looking statements which involve a number of risks and uncertainties that
could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties
relating to these statements include, but are limited to risks and uncertainties regarding fluctuations in earnings, our ability to
manage growth, intense competition in the biotechnology industry including those factors which may affect our cost
advantage, wage increases, our ability to attract and retain highly skilled professionals, time and cost over-runs in fixed price,
fixed time frame contracts, client concentration, our ability to manage our international operations, reduced demand for
technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and
integrate potential acquisitions, liability for damages on our service contracts, etc. The Company does not undertake to
update any forward looking statement that may be made from time to time by or on behalf of the Company.
Abl
RESEARCH