Abott AnnualReport2005

Abbott India Limited
How our Income was spent

2005 (Rupees in Millions) 1. Materials 2. Salaries 3. Depreciation 4. Other Expenses 5. Tax 6. Dividend (Includes Corporate Dividend Tax) 7. Retained Earnings 2958 250 40 476 280 310 % 64.4 5.4 0.9 10.4 6.1 6.7 2004 (Rupees in Millions) 2490 244 42 475 352 605 % 53.8 5.3 0.9 10.3 7.6 13.1
281
6.1
418
9.0
Report & Accounts 2005
Notice
Notice is hereby given that the Sixty-Second Annual General Meeting of Abbott India Limited will be held at Y B Chavan Auditorium, General Jagannath Bhosale Marg, Mumbai 400 021 on Wednesday, May 3, 2006 at 10.30 a.m. to transact the following business:
NOTES :
i. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Office of your Company not less than 48 hours before the meeting. An explanatory statement pursuant to Section 173 of the Companies Act, 1956 relating to the special business to be transacted at the meeting is appended hereto. The Register of Beneficial Owners, Register of Members and Share Transfer Books of your Company will remain closed from Tuesday, April 25, 2006 to Wednesday, May 3, 2006 (both days inclusive). Dividend recommended by the Directors, and approved by the members at the Annual General Meeting will be paid on or before June 2, 2006. In respect of shares held in physical form, the dividend will be payable to those members whose names appear on the Register of Members on May 3, 2006. In respect of shares held in electronic form the dividend will be payable to the beneficial owners of the shares as on April 25, 2006 as per details furnished by the Depositories for this purpose. To ensure against misappropriation of dividend warrants to be mailed to them, members holding shares in physical form who have not sent in their bank details are requested to provide their bank account numbers, names and addresses of the bank branches to your Company or its Registrars & Share Transfer Agents for incorporating the same on the dividend warrants. Members holding shares in physical form are requested to immediately intimate to your Company or its Registrars & Share Transfer Agents, changes, if any, in their registered addresses along with the pin code number. Members holding shares in dematerialised mode are requested to forward intimation for change of address, if any, to their respective depository participants.
Ordinary Business:
1. To receive, consider and adopt the Balance Sheet as at November 30, 2005 and the Profit and Loss Account for the financial year ended on that date and the Reports of the Directors and Auditors. To declare a dividend. To appoint a Director in place of Mr Munir Shaikh, who retires by rotation and, being eligible, offers himself for reappointment. To appoint a Director in place of Mr R A Shah, who retires by rotation and, being eligible, offers himself for re-appointment. To appoint auditors and to fix their remuneration. ii.
iii.
2. 3.
iv.
4.
5.
Special business:
6. To appoint a Director in place of Mr Mark Masterson, who was appointed as Additional Director of your Company under Article 113 of the Articles of Association of the Company, and who holds office up to the date of this Annual General Meeting by reason of Section 260 of the Companies Act, 1956; but being eligible offers himself for appointment, and in respect of whom your Company has received notices in writing from some members expressing their intention of proposing him as a candidate for the office of Director, along with a deposit of Rs 500 from each such member. By Order of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 Registered Office: 3-4 Corporate Park Sion Trombay Road Mumbai 400 071 v.
vi.
vii. Reserve Bank of India has introduced Electronic Clearing Service (ECS) for payment of dividend electronically to your Bank. Your Company proposes to offer this facility to members located at Ahmedabad, Bangalore, Bhubaneshwar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Patna, Pune and Trivandrum. viii. Members holding shares in dematerialized mode are requested to instruct their respective Depository Participants regarding bank accounts in which they wish to receive the
dividends. Further, the bank details as furnished by the respective Depositories to your Company will be used for the purpose of distribution of dividend through Electronic Clearing Service (ECS) as directed by the Stock Exchanges. Your Company/Registrars & Share Transfer Agents will not act on any direct request from members holding shares in dematerialized form for change/deletion of such bank details. ix. In terms of Sections 205A and 205C of the Companies Act, 1956, any dividend remaining unpaid for a period of seven years from the due date of payment is required to be transferred to the Investor Education and Protection Fund. Accordingly unclaimed dividend for the year ended December 31, 1997 has been transferred to Investor Education and Protection Fund. Members who have not encashed their dividend warrants for the year ended December 31, 1998 or thereafter are requested to write to the Company/Registrars & Share Transfer Agents. As per the Companies Act, 1956, facility for nominations is available for shareholders in respect of the shares held by them. Shareholders who wish to obtain Nomination forms may write to the Company, or its Registrars & Share Transfer Agents or to their respective depository participants, as the case may be. Shareholders holding shares in identical order of names in more than one folio are requested to write to the Registrars & Share Transfer Agents of the Company to enable them to consolidate their shareholding into one folio.
Explanatory Statement pursuant to Section 173 of the Companies Act, 1956

Item No 6 Mr Mark Masterson graduated from Rhodes University, South Africa in 1984 with a Bachelor of Commerce Degree, and joined Abbott as Europe Area Product Manager Abbott Diagnostics Division located in Germany in 1989. He has since served in various management positions, including Marketing Manager in the US, for Abbotts Diagnostics Division, General Manager, Australia/New Zealand and General Manager, South Africa in Abbotts International Division. His most recent position was Divisional Vice President and Regional Director PAA for Abbotts International Division. He was elected to his current position, namely, Vice President, Pacific/Asia/Africa Operations on June 27, 2005. Prior to joining Abbott, Mr Masterson worked in sales and marketing roles with Johnson & Johnson. Presently he is on the Board of Abbott Australia PTY Limited, Abbott Laboratories NZ Ltd. and Abbott Laboratories (Pakistan) Ltd. He does not hold any shares of your Company. His rich and varied experience will benefit the Board and help provide strategic direction to your Company. It is recommended that Mr Mark Masterson be appointed as Director of your Company. Mr Mark Masterson is interested in the resolution at Item No 6 of the accompanying Notice relating to his appointment.
x.
xi.
xii. Trading in your Companys shares through stock exchange is permitted only in dematerialized/electronic form. The equity shares of your Company have been inducted in both National Securities Depository Limited as well as Central Depositories Services (India) Ltd to enable shareholders to hold and trade the securities in dematerialised/electronic form. In view of the numerous advantages offered by the Depository System, members holding shares in the Company in physical form are requested to avail of the facility of dematerialisation.
By Order of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 Registered Office: 3-4 Corporate Park Sion Trombay Road Mumbai 400 071
Report of the Directors

TO THE MEMBERS Your Directors have pleasure in presenting the SixtySecond Annual Report and Audited Accounts of the Company for the year ended November 30, 2005.
provided at the rate applicable on the day on which the Accounts were approved by the Board of Directors.
Reserves
The total Reserves as on November 30, 2005 amounted to Rs 2011.6 million comprising of Amalgamation Reserve Rs 3.8 million, Capital Reserve Rs 52.3 million, Capital Redemption Reserve Rs 9.2 million, Revenue Reserve Rs 288.2 million and Surplus as per Profit & Loss Account amounting to Rs 1658.1 million.
Financial Results
(Rupees in Millions) Year ended Year ended
Nov. 30, 2005 Nov. 30, 2004 Sales Profit before tax Profit after tax Balance brought forward Profit available for appropriation 4446.7 871.1 591.6 1435.7 2027.3 4050.7 1374.5 1022.5 1120.2
Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956 your Directors state that: 1. In the preparation of the annual accounts, the applicable accounting standards have been followed. 2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
2142.7
Appropriations: Dividend (Proposed) Corporate Dividend Tax Transfer to Reserves Balance carried forward 267.4 *42.6 59.2 1658.1 534.8 69.9 102.3 1435.7 3.
Company for the year ended November 30, 2005, and of the profit of the Company for that period, except for the following: The depreciation on computers, photocopiers,
facsimile machines, modems and appliances is provided at the rate of 80% (See Schedule 17 Significant Accounting Policies 4). Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
*includes Rs 5.1 million for the year ended November 30, 2004
Dividend
Your Directors recommend a dividend of Rs 17.50 per share on 15,280,100 fully paid-up Equity Shares of Rs 10 each of the Company for the year ended November 30, 2005. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs 267.4 million (Previous year: Rs 534.8 million) and Corporate Dividend Tax of Rs 37.5 million. The Corporate Dividend Tax is 4.
Your Directors have prepared the accompanying Annual Accounts for the year ended November 30, 2005, on a going concern basis.
Fixed Deposits
No fixed deposits were accepted during the year.
Information pursuant to Section 217 of the Companies Act, 1956

The information required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in Annexure I and forms part of this Report.
Your Directors have pleasure in recommending their appointment.
Auditors
Messrs Deloitte, Haskins & Sells, Chartered Accountants, retire at this Annual General Meeting and are eligible for re-appointment as Auditors.
Health, Safety and Environment

The Company continues to accord utmost priority to the areas of health, safety and environment. Compliance with relevant regulation on these issues is an integral part of the Companys operating philosophy. i. Environment The Goa Plant has obtained Hazardous Waste authorization from the State Pollution Control Board and is treating its wastes as per the directives of the authorization. A modern effluent treatment plant is operational at the Plant, treating and discharging wastewater with parameters of treated effluent well below the limits set by the local Pollution Control Board. The treated effluent is recycled for horticulture within the site. Water recycling activities have been encouraged and implemented. The emissions from boiler and generator stacks are monitored regularly and are well below the limits set by the State Pollution Control Board.
The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure II and forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company at its Registered Office.
Directors
Mr Thomas Chen resigned as Director of the Company with effect from September 21, 2005. The Board placed on record its sincere appreciation for his guidance and services rendered by him. At a meeting of the Board of Directors held on September 21, 2005, Mr Mark Masterson was appointed as additional director. Mr Mark Masterson holds office upto the date of the forthcoming Annual General Meeting. Notices in writing have been received from some members expressing their intention to propose the appointment of Mr Mark Masterson as candidate for the office of director of our Company. Your Directors have pleasure in recommending his appointment. Under Article 124 of the Articles of Association of the Company, Mr Munir Shaikh and Mr R A Shah retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. ii.
Health and Safety As part of its social responsibility towards promoting health and safety, the Company has formed a Safety Committee which includes representation from workmen and meets regularly to review issues impacting plant safety and employee health. Training programmes are conducted regularly on various health and safety issues including dealing with epidemics, work safety, road safety, first-aid, etc. An Automatic External Defibrillator is installed at the Plant and employees have been trained in its use. Detailed firstaid training has been imparted to about 25% of employees.
Routine audits for Environment, Health and Safety compliance are conducted with the assistance of personnel from Abbotts global team.
Employees
Relations with the employees remained cordial and your Directors would like to place on record their appreciation for the dedication and commitment shown by them.
Technology Absorption and Development

Development of new formulations and dosage forms and modification of existing ones for lifecycle management, cost containment and improved productivity is an ongoing process and the Company is constantly engaged in activities of development and clinical research. The R&D Centre of the Company located at Goa, which is approved by the Department of Scientific and Industrial Research, has made significant contributions towards its assigned goals of product and process development and cost reduction through import substitution and vendor development.
Reports on Corporate Governance and Management Discussion & Analysis

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as also a Management Discussion & Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto. For and on behalf of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 R A Shah Director
Annexure I
Information pursuant to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. 1. Conservation of Energy (I) Energy conservation measures taken: Fully automatic packaged type boilers having fuel efficiency in excess of 80% have been installed. Steam condensate is being recovered for re-use in boilers. Power factor improvement capacitors have been installed for reducing the reactive power consumption. Maximum demand controller has been installed for limiting development of peak demand. (II) Additional investments and proposals, if any, being implemented for reduction in consumption of energy: Nil. (III) Impact of the measures at (I) and (II) above for reduction of energy consumption and consequent impact on the cost of production of goods: The installation of capacitors and maximum demand controller has resulted in lower maximum demand for power. (IV) Total energy consumption and consumption per unit of production: A. Power & Fuel Consumption 2005 (a) Electricity (i) Purchased (Unit Millions) Total amount (Rs Millions) Rate/Unit (Rs) (ii) Own Generation Through Diesel Generator 3.0 20.1 6.63 1.8 9.1 5.18 B. 2004 energy 2. B. (b) Coal (c) Furnace Oil Quantity (kilo ltrs) Total amount (Rs Millions) Average rate (Rs) (d) Others/Internal Generation
2005 N.A.
2004 N.A.
40.50 0.6 15.65
58.31 0.8 13.09
N.A.
N.A.
Consumption per Unit of Products Since the Goa Plant manufactures different dosage forms it is not practical to apportion utility cost based on available records.
Technology Absorption A. Efforts made in technology absorption. Following were the achievements Companys R&D Centre at Goa: 1. 2. 3. 4. Development Products. of new of the
Pharmaceutical
Establishing new technical capabilities. Import substitutions development. and new vendor
Optimization, standardization and improvement of products and manufacturing processes.
The R&D Centre developed new pharmaceutical products in the areas of liquid orals, tablets, capsules and topical preparations. It also undertook the quality improvement of existing products and manufacturing processes to meet ever-changing regulatory and quality requirements. Benefits derived as a result of the above R & D. A well focused R&D effort has helped the company in launching a number of new products in the Indian market. Manufacturing process optimization helped to bring in improved quality and efficiency and substitution of imported materials helped to reduce cost and to improve the efficiency of supply chain. R&D work has also resulted in improving the stability of some of the products.
Through Steam turbine/Generator N.A.
Cost of own generation is not comparable as the generator sets were operated for trial runs. N.A.
C.
Future plan of action. R&D activities will continue to focus on new product development, improvement in the existing formulations/process and improving operational efficiencies.
3.
Foreign Exchange Earnings and Outgo (I) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services, and export plans. The total foreign exchange earned during the year amounted to Rs 35.3 million, which includes a consideration of Rs 1.7 million towards sales promotion and Rs 33.6 million towards exports. (II) Total foreign exchange used and earned. A. Total foreign exchange used Rs in Million (a) On import of raw materials, finished goods, consumable stores and capital goods (b) Expenditure in foreign currencies for technical support charges, data center charges, business travel, subscription, commission on export sales, registration fees, etc. (c) Remittance during the year in foreign currency on account of dividend B. Total foreign exchange earned
D.
Expenditure on R&D. Rs in Million (a) Capital (b) Recurring (c) Total (d) Total R&D expenditure as a percentage of total turnover 0.5 15.1 15.6
0.4 % and
E.
Technology innovation.
absorption,
adaptation
113.4
(a) Efforts, in brief, made towards technology absorption, adaptation and innovation. The Company on an ongoing basis interacts with Abbott, USA, for technical expertise for products of high technology and pharmaceutical formulations. (b) Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. The Company has benefited substantially as a result of the emphasis on innovation. Reduction in energy consumption and improvement in product quality are some of the benefits achieved in the current year. (c) Imported technology (imported during the last five years reckoned from the beginning of the financial year). Nil
10.1
330.0 35.3
For and on behalf of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 R A Shah Director
10
Report on Corporate Governance

1. Companys Philosophy on Corporate Governance The Companys philosophy on corporate governance is to conduct its affairs in a manner which is transparent, clear and evident to those having dealings with or having a stake in the Company, namely shareholders, lenders, creditors and employees. The Companys philosophy on corporate governance is thus concerned with the ethics, values and morals of the Company and its directors, who are expected to act in the best interests of the Company and remain Name of Directors Category: Executive/ Non-Executive/ Independent Board Meetings 2.
accountable to shareholders and other beneficiaries for their action. Board of Directors (a) The present strength of the Board is six directors (1 executive director and 5 non-executive directors, of which two are independent directors) who are professionals and have expertise in their respective functional areas. The attendance at Board Meetings and the last Annual General Meeting of each of the directors during the financial year of the Company was as under: Membership of other Board(s) Annual General Meeting (April 26, 2005) (including alternate directorships and directorships in private companies) Membership/ Chairmanship of other Board Committees
(b)
Attendance at
Mr Munir Shaikh Chairman of the Board Mr Vivek Mohan Managing Director Mr R A Shah
Non-Executive Director
Yes
3*
Executive Director
Yes
Non-Executive, Independent Director
Yes
23*
10 (includes Chairmanship of 4 companies)
Mr Ashok Dayal
Non-Executive, Independent Director
Yes
Mr Thomas Chen (Resigned with effect from 21.09.2005) Mr David Wardell Mr Mark Masterson (Appointed as Additional Director with effect from 21.09.2005)
Non-Executive Director
No
1*
Non-Executive Director Non-Executive Director
1 1
No No
3* 3*
* including directorships of companies incorporated outside India. (c) During the financial year 7 Board Meetings were held on the following dates: December 8, 2004, January 25, 2005, March 22, 2005, April 26, 2005, June 28, 2005, August 3, 2005, and September 21, 2005.
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3.
Audit Committee The Audit Committee of members of the Board comprises of three non-executive directors of which, Mr Ashok Dayal, who is Chairman of the Audit Committee and Mr R A Shah, are independent directors. Mr Munir Shaikh is the other member of the Audit Committee. Mr G S Kurmi, Company Secretary, was the Secretary of the Audit Committee until his resignation on February 28, 2006. The role of the Audit Committee and its terms of reference are in accordance with the provisions of Clause 49 of the Listing Agreement and include oversight of the companys financial reporting process, reviewing the financial statements, reviewing the adequacy of internal audit function, discussions with internal and statutory auditors periodically about their scope of audit and adequacy of internal control systems, discussing with internal auditors on any significant findings. The Audit Committee also acts as a link between the Board of Directors and the internal and statutory auditors. The duly constituted Committee met five times during the financial year on January 25, 2005, March 22, 2005, April 26, 2005, June 28, 2005 and September 21, 2005 and these meetings were attended by all the members.
5.
Remuneration of Directors The remuneration of the directors during the financial year was as follows: A. Executive Directors All elements of remuneration package i.e. salary, benefits, bonuses etc. paid to the Executive Director, Mr Vivek Mohan, amount to Rs 20.3 million. (a) The above remuneration includes commission/ performance linked incentive or bonus of Rs 2.1 million, based on certain pre-agreed criteria. The Agreement with Mr Vivek Mohan is for a period of 5 years from November 1, 2004 and terminable by 6 months notice on either side as per the approval dated July 25, 2005 received from the Central Government, however, the Company may opt to pay 6 months remuneration including salary, allowances, benefits/perquisites in lieu of notice. Presently, the Company does not have a Scheme for grant of Stock Options to the Directors.
(b)
(c) B.
4.
Shareholders/Investors Grievance Committee This Committee comprises of Mr Ashok Dayal, who is a nonexecutive independent director and Chairman of the Committee. Mr Vivek Mohan, the Managing Director, is the other member of the Shareholders/Investors Grievance Committee. Mr G S Kurmi, Company Secretary, was the Compliance Officer until his resignation on February 28, 2006. During the financial year, the Committee held 4 meetings on January 25, 2005, March 22, 2005, June 28, 2005 and September 21, 2005. A summary of complaints received and resolved by the Company during the year ended November 30, 2005 is given below: Received Non-receipt of share certificates duly transferred Non-receipt of dividend warrants Miscellaneous Letters from SEBI, Stock Exchanges and Department of Company Affairs 13 43 58 Cleared 13 43 58
Non-executive Directors Two of the Non-Executive Directors, Mr R A Shah and Mr Ashok Dayal were paid sitting fees totaling Rs 55,000/- and Rs.70,000/- respectively for attending Board meetings and various Committee meetings of the Company. The Company paid fees amounting to Rs 0.4 million to its Solicitors, M/s Crawford Bayley & Co., of which Mr R A Shah is a partner, for professional services rendered to the Company. The quantum of professional fees received by M/s Crawford Bayley & Co. from the Company forms a very small portion of the total revenues of M/s Crawford Bayley & Co. and less than a fraction of the total revenues of the Company.
C.
None of the NonExecutive Directors and relatives is holding any shares of the Company except for Mr R A Shah who through relatives holds 5098 shares.
6.
General Body Meetings Financial Date Year 2002 April 29, 2003 Time Location
3.00 p.m. Y B Chavan Auditorium General Jagannath Bhosale Marg Mumbai 400 021 3.00 p.m. Y B Chavan Auditorium General Jagannath Bhosale Marg Mumbai 400 021
2003 2 2 2004
April 27, 2004
As on November 30, 2005, there were no pending share transfers. Barring certain cases pending in Courts/Consumer Forums relating to disputes over the title of the shares in which the Company has been made a party, no investor complaint is pending for a period exceeding one month.
3.30 p.m. Y B Chavan Auditorium General Jagannath Bhosale Marg Mumbai 400 021 At present, no special resolutions are proposed to be conducted through postal ballot.
April 26, 2005
12
7.
Disclosures There were no transactions of a material nature with the Directors or the management, the Companys subsidiary or relatives of the Directors during the financial year of the Company which could have potential conflict with the interests of the Company at large. The Register of Contracts containing the transactions in which Directors are interested is placed before the Board regularly for its approval. Transactions with related parties are disclosed in Note No 22 of Schedule 17 to the Accounts in the Annual Report. There were no instances of non-compliance by the Company on any matters related to the capital markets or penalties/ strictures imposed on the Company by the Stock Exchange or SEBI or any statutory authority during the last 3 financial years.
Listing On Stock Exchange Stock Code
: Bombay Stock Exchange Limited : 500488
Market Price Data (High/Low during each month) on BSE: Month December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 High 768.00 745.00 749.00 695.00 702.00 682.00 694.90 690.00 740.00 688.95 678.00 743.00 Low 613.60 625.00 605.00 615.00 620.00 630.00 582.00 595.00 640.00 611.00 624.95 647.00
8.
Means of Communication Quarterly results are published in one English daily newspaper (Free Press Journal) circulating in the country and one Marathi newspaper (Navshakti) published from Mumbai. These quarterly results are also made available on the website of the Company (www.abbott.co.in) and on SEBIs EDIFAR (Electronic Data Information Filing And Retrieval) website (www.sebiedifar.nic.in). During the financial year, the Company has not made any presentation to the institutional investors or analysts. The Management Discussion and Analysis Report forms a part of this Annual Report.
Performance in comparison to broad based indices: Abbott Share Price / BSE 100 Year 2004 - 2005
9.
General Shareholder Information Annual General Meeting : Wednesday, May 3, 2006 at 10.30 a.m Y B Chavan Auditorium, General Jagannath Bhosale Marg, Mumbai 400 021 Financial Calendar : The Company follows December 1 November 30 as its financial year. The unaudited results for every quarter beginning from December are declared in the month following the quarter except for the last quarter, for which the audited results are declared within 3 months of the close of the financial year : April 25, 2006 to May 3, 2006 (both days inclusive) : On or before June 2, 2006
Registrars and Share Transfer Agents
Date of Book Closure
Dividend Payment Date
Sharepro Services (India) Private Limited, Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious Road, Chakala, Andheri (East), Mumbai 400 099. Phone : 2834 82 18 / 2832 98 28 / 2821 51 68 Fax : 2837 56 46 Email : sharepro@vsnl.com
13
10. Share Transfer System To expedite the process of share transfers, the Board has delegated the powers of share transfers to a Share Transfer Committee comprising of the officers of the Secretarial Department, who attend to the share transfer formalities at least once in a fortnight. The Share Transfer Committee also considers transmission of shares, issue of duplicate certificates and issue of certificates on split/consolidation/ renewal. The business transacted at the Share Transfer Committee meetings is also noted at every meeting of the Board. Shares lodged for transfer at the Registrars office are normally processed within 15 days from the date of lodgement, if the documents are clear in all respects. All requests for dematerialisation of shares are processed and the confirmation is given to the depositories within 15 days. 11. Distribution of shareholding as on November 30, 2005 Number of Equity share holdings Number Percentof Shareage of holders Shareholders 5,636 3,171 3,493 831 643 36 34 13,844 40.71 22.90 25.23 6.00 4.65 0.26 Number Percentof shares age of shareholding 149,074 282,549 868,743 611,268 1,293,428 244,849 0.98 1.85 5.69 4.00 8.46 1.60 77.42 100.00
13. Dematerialisation of Shares as on November 30, 2005 92.30% of the Companys total paid-up share capital (including 61.7% held by the parent company) representing 14,103,804 shares are held in dematerialised form. The Companys shares are traded on BSE A Group. 14. Plant Location L-18/19, Verna Industrial Estate, Goa 15. Address for correspondence Shareholders should address all correspondence to the Companys Registrars and Share Transfer Agents, Sharepro Services (India) Private Limited, at the address mentioned above or at : 912, Raheja Centre, Free Press Journal Road, Nariman Point, Mumbai 400 021 Contact Person: Ms Mazrine Wadia/Mr Ramesh Babu Telephone : 2288 15 68 / 2288 15 69 Fax : 2282 54 84 Email : sharepro_services@roltanet.com 16. Appointment/Re-appointment of Directors (1) As required by Clause 49.VI.A. of the Listing Agreement, the profile of Mr Mark Masterson is given in the Explanatory Statement forming part of the Notice for the 62nd Annual General Meeting. Mr Munir Shaikh and Mr R A Shah retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. (a) Mr Munir Shaikh joined Abbott in 1968, and has since served in several management positions with Abbott in Asia, Latin America and United States, including General Manager Pakistan, General Manager Caribbean, Director Business Development, Pacific and Far East, Regional Director Pacific/Asia/Africa, Regional Director Southeast Asia/ India in the Abbott International Division. He was named Vice-President and Regional Director, Southeast Asia/Sub-continent Korea in 2003 and most recently, appointed Divisional Vice President, Southeast Asia/Middle East/Africa, Abbott Nutrition International, in June 2005, based in Singapore. He is a Fellow of The Institute of Chartered Accountants in England and Wales. He is also a Director on the Board of Abbott Laboratories (Singapore) Pte Ltd, Abbott Laboratories (Pakistan) Limited and Pt Abbott Indonesia. (b) Mr R A Shah is a leading Solicitor and a Senior Partner of M/s Crawford Bayley & Co., a firm of Solicitors and Advocates. He specialises in a broad
1 - 50 51 - 100 101 - 500 501 - 1000 1001 - 5000 5001 - 10000 10001 & above Total
(2)
0.25 11,830,189 100.00 15,280,100
12. Shareholders profile as on November 30, 2005 Sr. Category of Shareholders No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Foreign Collaborators Banks Financial Institutions Foreign Institutional Investors Overseas Corporate Bodies Mutual Funds Domestic Companies Non-Resident Indians Others Total No. of shares held 9,428,184 6,400 1,352,722 214 200 835,384 158,308 44,946 3,453,742 15,280,100 % to total 61.70 0.04 8.85 5.47 1.05 0.29 22.60 100.00
14
spectrum of corporate laws. Mr R A Shah and his relatives hold 5098 shares in the Company. Presently he is the Chairman/Director and Chairman or member of Audit Committees of the following companies: Name of the Company Designation Chairmanship or Membership of Audit Committee of Board
Name of the Company
Designation
Chairmanship or Membership of Audit Committee of Board
12.
Deepak Fertilizers & Petrochemicals Corporation Ltd Procter & Gamble Hygiene and Healthcare Ltd Nicholas Piramal India Ltd Century Enka Ltd
Director
13.
Director
Member
1.
Godfrey Phillips India Ltd Roche Scientific Co (I) Pvt Ltd Pfizer Limited Colgate Palmolive (I) Ltd Asian Paints (I) Ltd Atul Limited The Bombay Dyeing & Mfg. Co. Ltd BASF India Ltd Colour Chem Ltd Clariant India Ltd Jumbo World Holdings Ltd (Foreign Company)
Chairman
14. Chairman 15. Chairman ViceChairman Director Chairman 16.
Director
Chairman
2.
Alternate Director Alternate Director Alternate Director Director Director Alternate Director Alternate Director Alternate Director Alternate Director
Member (Alternate)
3. 4.
Wockhardt Ltd
Member (Alternate)
Chairman 17. BASF Polyurethanes India Ltd Gillette India Ltd Lupin Limited Modicare Limited
5.
18.
6. 7.
Director Director
19. Chairman / Member Member 21. Member 23. Uhde India Limited 22. RPG Life Sciences Ltd Schrader Duncan Ltd. 20.
8. 9. 10. 11.
Director Director Director Director
On behalf of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 R A Shah Director
15
Auditors Certificate for Corporate Governance

To, The Members of Abbott India Limited We have examined the compliance of conditions of Corporate Governance by Abbott India Limited for the year ended November 30, 2005, as stipulated in Clause 49 of the Listing Agreement of the said Company with The Stock Exchange, Mumbai. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
As required by the guidance note issued by The Institute of Chartered Accountants of India, we have to state that, based on the information received from the Companys Registrars and Share Transfer Agents and as per the records maintained by the Investor Grievance Committee, barring certain cases pending in courts/consumer forums, relating to disputes over the title of shares in which the Company has been made a party, no investor grievance is pending for a period exceeding one month against the Company. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
FOR DELOITTE HASKINS & SELLS Chartered Accountants K A KATKI Partner Membership No. 038568
Mumbai March 7, 2006
16
Management Discussion Analysis Report

1. Industry structure and developments
&
The Indian pharmaceutical market recorded sales of Rs 230 billion with a growth of 8.6% on MAT basis in the year 2005. After an average growth of just 6% in the previous two years, and a decline in the first quarter of 2005 due to reduced buying by trade prior to implementation of Value Added Tax (VAT), for the most part the Industry recovered and grew in line with the projected GDP growth. Indian pharmaceutical market ranks 4th in the world in terms of volume and 13th in terms of value. The Government has taken a number of steps to fuel further growth in the sector such as export incentives, patent protection, import liberalization and increased outlay on health. During the year the Government amended the Patents Act to provide for grant of product patents in respect of pharmaceuticals, however, the impact of certain provisions of the amended Patents Act such as patentability and compulsory licensing, will be known only over a period of time through implementation/administration of the new law. The Draft National Pharmaceuticals Policy 2006 (Part A) has been circulated and addresses issues in relation to integration of drug regulatory bodies, IPR implementation, data protection in clinical trials, price negotiations for patented drugs, trade margins, government procurement, branding and Research & Development. Part B of this document relating to pricing is awaited. MRP (Maximum Retail Price) based excise duty was made applicable to the pharmaceutical industry from January 2005. This caused many pharmaceutical companies, including your Company, to revisit their manufacturing strategy. 2. Opportunities and Threats Introduction of product patents from 2005 presents an opportunity for the growth of the pharmaceutical industry. It will facilitate speedier introduction of new products, attract investment in research and lead to development of the industry and market. Global Phase II and III clinical trials can now be concurrently carried out in India. Transition to VAT system is likely to benefit the industry in the long run through uniformity and transparency in prices all over the country. It is expected that the remaining seven states that have not adopted the Value Added Tax system are likely to join the mainstream in the near future. The industry also suffered on account of imposition of MRP based Excise Duty on formulations. Pursuant to industry representations made to the Government, changes are expected in Excise Duty as well as Central Sales Tax, which will provide an opportunity to revamp the strategy in manufacturing, sourcing and distribution operations. Eventually, elimination of Central Sales taxes (CST) will lead to simplification of the distribution chain. The Indian middle class is growing steadily and so also the prospects for health insurance. The Indian market is very under-insured and less than 4% of the population is covered
by State Health Insurance and private health insurance is limited to a miniscule number. It is estimated that the number of Indians who can afford quality private healthcare stands at about 100 million, which is about 1/3rd of the middle class population and 1/10th of the total population. Increasing penetration of health insurance coupled with rising purchasing power is expected to stimulate the market. Healthcare reforms are also expected to expand the coverage of organized healthcare to rural areas leading to increased supply of secondary care. All the above factors are likely to provide renewed opportunities for the growth of pharmaceutical industry. Yet there are some factors that limit Indias appeal for multinational companies. The absence of a clear, objective and transparent policy on drug price control continues to impact the overall industry direction. The new Draft National Pharmaceuticals Policy addresses some of the issues, however, policy relating to price control is yet to be announced. Similarly, the amended Patents Act does not have adequate clarity with respect to definition of patentable invention, data protection and compulsory licensing. 3. Segmentwise performance The Company operates only in the pharmaceutical segment. It has recorded faster growth than other multinational companies across various therapeutic segments, especially gastroenterology, neurology and metabolic disorders. India is afflicted by a variety of health issues. In addition to chronic diseases such as cardiovascular disorders, diabetes and depression, which are prevalent in the developed countries, India also has to face up to infectious diseases, reemerged diseases such as tuberculosis (TB) and malaria and dreaded diseases such as cancer and AIDS. Although acute diseases are on the decline, chronic diseases are on the rise due to changing lifestyles. Your Companys product portfolio provides therapies for both acute and chronic health conditions. The performance of the Company is in line with trends observed in the market, viz, good growth in chronic disease areas, however, the volumes in acute therapy areas such as gastroenterology and pain management continue to be under pressure. India is seeing the emergence of corporate hospitals and world-class facilities. Abbott Indias hospital product portfolio includes anaesthesia and neonatology and continues to record good growth over the market. 4. Outlook It is the Companys strategy to continue to focus on its core therapeutic areas in pharmaceuticals, viz, CNS, gastroenterology, metabolics, pain management, urology, specialized anaesthesia range and neonatology. Growth in chronic therapy areas is expected to continue while innovations and life cycle management will continue to support performance in acute therapy segments. While keeping its focus on achieving a higher sales growth, the Company continues to work on extracting cost related efficiency in areas of Supply Chain as well as Administration and Selling expenses and thus deliver improved operating
17
margins. The Company will also continue to work on increasing capacity utilization at its Goa plant and aligning manufacturing/distribution strategy with emerging opportunities. 5. Risks and Concerns Introduction of new drugs and proliferations of generic products have affected both demand and pricing of your Companys products, specially in case of acute therapy. Lack of clarity on the Governments future policy in relation to Price Control continues to be a major risk facing the industry even though draft policy has been circulated on other issues. The industry also continues to be faced by the challenges posed by manufacturers of spurious drugs and the company is taking various measures to counter the threat. There could be an impact on demand during the year due to the uncertainty on VAT as the remaining seven States take their decisions on movement to the VAT regime. Introduction of new taxes and changes in existing tax laws as well as other statutes particularly in the pharmaceutical sector continue to pose a challenge to the industry. 6. Internal Control Systems and their adequacy Your Company has an adequate system of internal controls which ensures that its assets are protected against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported in conformity with generally accepted accounting principles. The Internal control systems are documented with clearly defined authority limits. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically updated to meet current business requirements. The Company has a regular process of Internal Audit by a leading firm of Chartered Accountants whose scope of work and work programme is agreed with the Audit Committee at the beginning of each year. The findings of the Internal Auditors are discussed with the Audit Committee and adequate mitigatory steps are taken accordingly to plug control weaknesses pointed out. In line with the requirement of the amended Clause 49 of the Listing Agreement which came into force on January 1, 2006 the Company had appointed a firm of Consultants to do a complete review of risks faced by the Company and to help put in place a Risk Management Framework and their findings/recommendations were discussed with the Board of Directors/Audit Committee. Risk Management as a formal concept is an integral part of the business process and the recommendations are being implemented. 7. Discussion on Financial Performance with respect to Operational Performance During the year under review, Sales amounted to Rs 4446.7 million (representing an increase of 9.8% over Last Year) and
Profit Before Tax stood at Rs 871.1 million. The Operating Profit for the year amounted to Rs 762.6 million as compared to Rs 842.5 million Last Year. This was impacted due to levy of Excise Duty on Maximum Retail Price (MRP) and destocking by trade in the initial part of the year on account of introduction of Value Added Tax (VAT) even though the Company took a number of steps to mitigate their impact. Your Company continues to focus on extracting cost efficiency in areas of Supply Chain, Selling and Administrative expenses and to improve returns on capital. There were unprecedented rains and floods in Mumbai and Southern States, causing huge loss to life and property and resulting in disruption of supplies. The Company too sustained loss at the Central Warehouses, however, the loss was covered by insurance. The Companys income from investment of surplus funds came down significantly as compared to last year on account of the fall in interest rates as well as the fact that a large portion of income in the last year related to capital appreciation of investments in the growth schemes of Mutual Funds. The Company adopts a conservative approach towards investments and its investment strategy is to ensure safety of capital and liquidity, however, this is reviewed continuously with consultants to optimize returns. Last year, the Company had achieved Class A accreditation which was re-confirmed recently. This recertification marks a continued commitment to excellence whereby the company continuously raises the bar and sets a high level of expectations of its business, its people and processes. Your company has tremendous opportunities to grow the business, and ensuring sound processes will enable it to achieve objectives with greater speed. 8. Material developments in Human Resources/Industrial Relations During the year under review the Company has made significant progress towards developing a high-performance work culture and upgradation of talent and capabilities. Key Human Resources (HR) initiatives have been built into the strategic plan of the Company in order to attract, develop and create a talent pool capable of achieving the business objectives of the Company. Focused initiatives were undertaken to improve HR process tools and techniques. With a view to recognize individuals who have shown outstanding performance, various recognition programs were introduced during the year. The number of employees as on November 30, 2005 was 858.
For and on behalf of the Board Vivek Mohan Managing Director Mumbai : March 7, 2006 R A Shah Director
18
Auditors Report
To the Members of Abbott India Limited 1. We have audited the attached Balance Sheet of Abbott India Limited, (the Company) as at November 30, 2005, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Statement on Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: (i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(iii)
the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (v) on the basis of written representations received from directors as on November 30, 2005 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on November 30, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
2.
(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) (b) (c) in the case of the balance sheet, of the state of affairs of the Company as at November 30, 2005; in the case of the profit and loss account, of the profit for the year ended on that date; and in the case of the cash flow statement, of the cash flows for the year ended on that date.
3.
4.
For DELOITTE HASKINS & SELLS Chartered Accountants Mumbai, March 7, 2006 K A KATKI Partner Membership No. 038568
(ii)
Annexure referred to in paragraph 3 of the Auditors Report on the Accounts of Abbott India Limited
1. In our opinion and according to the information and explanations given to us, the nature of the Companys business/activities during the year are such that clauses xiii, xiv, xviii, xix, xx are not applicable to the Company. In respect of its fixed assets: a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. Physical verification of fixed assets is being conducted in a phased programme by the management designed to cover all assets over a period of three years, except for fixed assets lying with third parties in respect of which the Company is in the process of obtaining necessary confirmations, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. The discrepancies noticed on such verification c. were not material and have been properly dealt with in the books of account. Although some of the fixed assets have been disposed off during the year, in our opinion and according to the information and explanations given to us, the ability of the Company to continue as a going concern is not affected.
2.
3.
b.
In respect of its inventories: a. As explained to us, the inventories were physically verified during the year by the management at reasonable intervals. b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
19
c.
In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.
4.
According to the information and explanations given to us, the Company has not granted or taken any loan secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods. There were no transactions in respect of sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.
9. We have broadly reviewed the books of account and records maintained by the Company relating to the manufacture of formulations, pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been maintained and the prescribed accounts are in the process of being made up. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company. 10. In respect of statutory dues: a. According to the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with the appropriate authorities during the year. Further, since the Central Government has till date not prescribed the amount of cess payable under Section 414A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. According to the information and explanations given to us, details of disputed excise duty and sales tax, which have not been deposited as on November 30, 2005 on account of any dispute are given below:
6. To the best of our knowledge and belief and according to the information and explanations given to us, there were no transactions required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. 7. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. 8. In our opinion, the internal audit functions carried out during the year by an external entity appointed by the management have been commensurate with the size of the Company and nature of its business. b.
Nature of Statute
Nature of Dues
Amount Rs in Millions 0.3 0.1 0.03 0.1 0.05 3.0 0.1 4.0 0.4
Period to which the Amount relates 1991-1992 1994 1994 2000 1998-2002 2005 2001 1999- 2000 1989-1990 and 1998-1999 2000-2001 2001-2002 2001-2002
Forum where dispute is pending
Central Excise Act, 1944
Classification dispute Modvat Credit availed on inputs Modvat Credit availed on capital goods Recovery of amount allegedly refunded erroneously Demand for excise duty on empty plastic containers Classification dispute Modvat Credit availed on capital goods
Commissioner (Appeals) Commissioner Assistant Commissioner Assistant Commissioner Assistant Commissioner Commissioner (Appeal) Deputy Commissioner Sales Tax Tribunal Sales Tax Tribunal
The Bombay Sales Tax Act, 1959 Uttar Pradesh Trade Tax Act, 1948
Disputed Set off Disallowances of Credit Notes Non-submission/Rejection of relevant statutory forms Non-submission/Rejection of relevant statutory forms
0.1 0.01 0.01
Sales Tax Tribunal Deputy Commissioner of Trade Tax Deputy Commissioner of Trade Tax
Central Sales Tax Act, 1956
Non-submission/Rejection of relevant statutory forms
20
There were no disputed dues in respect of Income tax, Customs Duty, Wealth tax, Service tax and Cess during the year. 11. The Company does not have any accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. 12. In our opinion and according to the information and explanations given to us, the Company has not obtained any borrowings from any banks or financial institutions or by way of debentures. 13. In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks and financial institutions.
15. The Company has not obtained any term loans. 16. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have prima-facie, not been used during the year for long-term investment. 17. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
For DELOITTE HASKINS & SELLS Chartered Accountants Mumbai, March 7, 2006 K A KATKI Partner Membership No. 038568
21
Balance Sheet
As at November 30, 2005
As at November 30, 2005 Rupees in Millions As at November 30, 2004 Rupees in Millions
Schedule I. SOURCES OF FUNDS (1) SHAREHOLDERS FUNDS (a) Share Capital ......................................................... (b) (2) (3) Reserves and Surplus ........................................... TOTAL SHAREHOLDERS FUNDS ................................. LOAN FUNDS Unsecured Loans ................................................... DEFERRED TAX LIABILITY (NET) ................................... TOTAL .............................................................................. (3) (1) (2)
Rupees in Millions
152.8 2,011.6 2,164.4 18.2 53.1 2,235.7
152.8 1,730.0 1,882.8 21.9 64.7 1,969.4
II.
APPLICATION OF FUNDS (1) FIXED ASSETS (a) (b) (c) (d) (2) (3) Gross Block ........................................................... Less: Depreciation ................................................. Net Block ............................................................... Capital Work-in-Progress ...................................... (4) (5) (6) (7) (8) (9) 442.1 200.1 93.5 123.3 859.0 Less : CURRENT LIABILITIES AND PROVISIONS (a) (b) Current Liabilities ................................................... Provisions ............................................................... (10) NET CURRENT ASSETS ................................................. TOTAL .............................................................................. 374.0 494.0 868.0 (9.0) 2,235.7 344.2 807.5 1,151.7 (455.4) 1,969.4 676.2 365.7 310.5 1.2 311.7 1,933.0 642.5 327.5 315.0 10.2 325.2 2,099.6 299.1 203.2 125.1 68.9 696.3
TOTAL FIXED ASSETS ................................................... INVESTMENTS ................................................................ CURRENT ASSETS, LOANS AND ADVANCES (a) (b) (c) (d) Inventories .............................................................. Sundry Debtors ...................................................... Cash and Bank Balances ...................................... Loans and Advances .............................................
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS ......................................................................................... As per our report of even date For DELOITTE HASKINS & SELLS Chartered Accountants K A KATKI Partner Mumbai, March 7, 2006
(17) For and on behalf of the Board VIVEK MOHAN R A SHAH ASHOK DAYAL Managing Director Director Director Mumbai, March 7, 2006
22
Profit and Loss Account

For the Year ended November 30, 2005
Year ended November 30, 2005 Rupees in Millions Year ended November 30, 2004 Rupees in Millions 4,050.7 575.4 4,595.3 II. EXPENDITURE (a) Raw and Packing Materials Consumed ................................ (b) Purchase of Finished Goods (Refer Note B19 Schedule 17) ........................................................................... (c) (Increase)/Decrease in Work-in-Progress and Finished Goods ...................................................................................... (d) Manufacturing, Administrative & Selling Expenses ............... (e) Depreciation ............................................................................ (f) Interest ..................................................................................... PROFIT BEFORE TAX .................................................................. PROVISION FOR TAXATION Current Income Tax ................................................................ Deferred Tax (Credit) (Net) ................................................... Fringe Benefit Tax .................................................................. PROFIT AFTER TAX ..................................................................... PRIOR YEARS ADJUSTMENTS Taxation ............................................................................................ BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR .... 4,626.1
Schedule I. SALES AND OTHER INCOME (a) Sales ........................................................................................ (b) Other Income ..........................................................................
Rupees in Millions 4,446.7 148.6
(11) (12)
(13)
84.6 3,011.4
147.9 2,306.1 36.1 718.1 41.7 1.7 3,724.2 3,251.6 1,374.5 358.4 (6.4) 279.4 352.0 1,022.5 * 1,022.5 1,120.2 591.7 (0.1) 591.6 1,435.7 871.1
(14) (15) (16)
(138.4) 726.5 39.9 0.2
III. IV.
278.0 (11.6) 13.0
V. VI.
VII.
2,027.3
VIII. APPROPRIATIONS (a) Proposed Dividend ................................................................. (b) Corporate Dividend Tax For the year ended November 30, 2005 ...................... For the year ended November 30, 2004 ...................... (c) Revenue Reserve .................................................................... IX. BALANCE CARRIED FORWARD ................................................. Earnings per Share Basic and Diluted ........................................ Face Value per Share ...................................................................... Profit After Tax available to Equity Shareholders .......................... (267.4) (37.5) (5.1) (59.2) 1,658.1 Rs 38.72 Rs 10.00 591.6 15,280,100 (17)
2,142.7
(534.8) (69.9) (102.3) 1,435.7 Rs 66.92 Rs 10.00 1,022.5 15,280,100
Number of Shares used in computing earnings per Share

Basic and Diluted ............................................................................. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS ............................................................................................... * Less than Rs 0.1 Million As per our report of even date For DELOITTE HASKINS & SELLS Chartered Accountants K A KATKI Partner Mumbai, March 7, 2006 VIVEK MOHAN R A SHAH ASHOK DAYAL
For and on behalf of the Board Managing Director Director Director Mumbai, March 7, 2006
23
Cash Flow Statement for the year ended November 30, 2005
Rupees in Millions A Cash flow from operating activities : Net Profit before tax .......................................................................... Adjustments for : Depreciation .................................................................................. Loss on sale of Fixed Assets/Impairment of Fixed Assets ...... Unrealised (Gain)/Loss on Foreign Exchange ............................ Provision for Doubtful Debts/Bad Debts written off ................. Profit on sale of Investments in units of Mutual Funds (Net) ... Write back of dimunition in value of Investments in units of Mutual Funds ................................................................................ Dividend ........................................................................................ Interest payments ......................................................................... 39.9 0.2 0.6 (0.9) (0.2) (76.2) 0.2 (36.4) Operating Profit before working capital changes ........................... Adjustments for : Trade and other receivables ........................................................ Inventories ..................................................................................... Trade Payables and other liabilities ............................................ (51.0) (143.0) 36.9 (157.1) Cash generated from operations ...................................................... Direct taxes paid net of refund ................................................... Net cash from operating activities ................................................... B Cash flow from investing activities : Purchase of Fixed Assets ............................................................ Proceeds on sale of Fixed Assets .............................................. Purchase of Investments in units of Mutual Fund including Dividend Reinvested .................................................................... Less : Dividend Reinvested ......................................................... Sale of Investments in units of Mutual Fund ............................. Net cash from/(used in) investing activities ..................................... C Cash flow from financing activities : Repayment of long term borrowings .......................................... Dividends paid (Includes Corporate Dividend Tax) ................... Interest paid .................................................................................. Net cash from/(used in) financing activities .................................... D E F Net increase/(decrease) in Cash and Cash equivalents (A+B+C) Cash and Cash equivalents at the beginning of the year ....... Cash and Cash equivalents at the close of the year (D + E) ............ (3.7) (609.8) (0.2) (613.7) (31.6) 125.1 93.5 (0.1) (603.3) (1.7) (605.1) 20.3 104.8 125.1 (2,609.0) 76.2 (2,532.8) 2,776.7 213.9 (30.2) 0.2 (3,539.8) 55.8 (3,484.0) 3,469.2 (58.3) (45.9) 2.4 677.6 (309.4) 368.2 54.0 38.4 (39.1) 53.3 1,005.7 (322.0) 683.7 834.7 41.7 17.2 0.2 1.8 (426.7) (2.2) (55.8) 1.7 (422.1) 952.4 871.1 1,374.5 Year ended November 30, 2005 Rupees in Millions Year ended November 30, 2004 Rupees in Rupees in Millions Millions
See Notes attached
24
Notes to the Cash Flow Statement for the year ended November 30, 2005
Year ended November 30, 2005 Rupees in Millions 1. Cash and Cash equivalents include : Cash and Bank Balances ................................................................................. Unrealised (Gain)/Loss on Foreign Currency .................................................. Total ....... * Less than Rs 0.1 Million 2. The above Cash Flow Statement has been prepared under the Indirect Method as set out in Accounting Standard-3 on Cash Flow Statements issued by The Institute of Chartered Accountants of India. The figures of the previous year are regrouped/rearranged wherever considered necessary. For and on behalf of the Board VIVEK MOHAN R A SHAH ASHOK DAYAL Managing Director Director Director Mumbai, March 7, 2006 93.5 * 93.5 125.1 * 125.1 Year ended November 30, 2004 Rupees in Millions
3.
As per our report of even date For DELOITTE HASKINS & SELLS Chartered Accountants K A KATKI Partner Mumbai, March 7, 2006
25
Schedules
Annexed to and forming part of the Balance Sheet as at November 30, 2005
As at November 30, 2005 Rupees in Millions As at November 30, 2004 Rupees in Millions
Rupees in Millions 1. SHARE CAPITAL Authorised : 16,200,000 (2004 : 16,200,000) Equity Shares of Rs 10 each ........... 5,800,000 (2004 : 5,800,000) Unclassified Shares of Rs 10 each ....
162.0 58.0 220.0
162.0 58.0 220.0
Issued and Subscribed : 15,280,100 (2004 : 15,280,100) Equity Shares of Rs 10 each fully paid-up ............................................................................... PER BALANCE SHEET .... [9,428,184 (2004 : 8,262,000) Equity Shares are held by Abbott Capital India Ltd (Formerly known as Lupharma UK Holding One Ltd) the holding company and Nil (2004 : 1,166,184) Equity Shares are held by Abbott Equity Holdings Ltd, a group company, both of which are subsidiaries of Abbott Laboratories, USA] the above : 99,995 (2004 : 99,995) Equity Shares were allotted as fully paid pursuant to a contract without payment being received in cash. 15,099,570 (2004 : 15,099,570) Equity Shares were issued as fully paid Bonus Shares by capitalisation of Share Premium and Revenue Reserve. 25,000 (2004 : 25,000) Equity Shares were allotted to the financial institutions on conversion of 5% of Debentures into Equity Shares.
152.8 152.8
152.8 152.8
Of (a)
(b)
(c)
2.
RESERVES AND SURPLUS Amalgamation Reserve : Balance as per last Balance Sheet ............................................................ Capital Reserve : Balance as per last Balance Sheet ............................................................ Capital Redemption Reserve : Balance as per last Balance Sheet ............................................................ Revenue Reserve : Balance as per last Balance Sheet ............................................................ Add : Transferred from Profit and Loss Account .......................................... Surplus as per Profit and Loss Account ....................................................... PER BALANCE SHEET ....
3.8 52.3 9.2 229.0 59.2 288.2 1,658.1 2,011.6
3.8 52.3 9.2 126.7 102.3 229.0 1,435.7 1,730.0
3.
LOANS Unsecured Loans : Deferred Sales tax liability under the Maharashtra Governments Package Scheme of Incentives 1988 Pending Conversion into Long-term interest free Sales tax loan ........... Converted into Long-term interest free Sales tax loan [Repayable within one year Rs 4.2 Million (2004 : Rs 3.7 Million)] ......................................... (Refer Note B18 Schedule 17) PER BALANCE SHEET ....
5.9 12.3 18.2 18.2
5.9 16.0 21.9 21.9
26
Schedules
4. FIXED ASSETS
GROSS BLOCK AT COST
As at November 30, 2004 Additions during the year Disposals during the year
DEPRECIATION
Impairment As at As at during the November 30, November 30, year 2005 2004
NET BLOCK
For the On Disposals As at As at As at year during the November 30, November 30, November 30, year 2005 2005 2004
Leasehold Land ......................... Buildings ..................................... Machinery and Equipments ....... Furniture, Fittings and Office Equipments ................................ Vehicles ......................................
Rupees in Millions 4.8 326.4 202.0 99.8 9.5 642.5
Rupees in Millions 1.6 0.5 * 2.1 36.8
Rupees in Millions 9.8
Rupees in Millions 4.8 327.1 225.5 104.4 14.4 676.2 642.5
Rupees in Millions 1.3 0.4 1.7 29.0
Previous year ..............................
648.7
Capital Work-in-Progress and Advances thereagainst, at cost PER BALANCE SHEET..............
1.2 311.7
10.2 325.2
Note : Included in buildings is an amount of Rs 2,540 (2004 : Rs 2,540) representing value of shares in co-operative housing societies, of which share certificates of Rs 1,540 (2004 : Rs 1,540) are yet to be received. * Less than Rs 0.1 Million.
Rupees in Millions
As at November 30, 2005 Rupees in Millions
As at November 30, 2004 Rupees in Millions
5.
INVESTMENTS IN FULLY PAID SHARES NON-TRADE UNQUOTED: 1,900 (2004 : 1,900) Equity Shares of Zest Pharmaceuticals Pvt Ltd of Rs 10 each fully paid-up .................................................................................................................................. CURRENT INVESTMENTS IN UNITS OF MUTUAL FUNDS NON-TRADE QUOTED:
Mutual Fund No. of Units in Millions Face Value Rs Repurchase Price Rs in Millions (59.9) 389.7 (263.9) (407.0) 308.4 (141.4) 445.3 (172.9) 321.0 (321.8) 38.4 () 434.9 (406.2) (327.3)
Birla Cash Plus Institutional Plan Weekly Dividend Birla Cash Plus Institutional Premium Weekly Dividend DSP Merill Lynch Liquidity Fund Weekly Dividend Grindlays Cash Fund Institutional Plan B Weekly Dividend HDFC Liquid Fund Premium Plan Dividend HSBC Cash Fund Institutional Plan Monthly Dividend HSBC Income Fund Short Term Institutional Dividend Prudential ICICI Institutional Liquid Plan Monthly Dividend Templeton India Treasury Management Account Regular Plan Weekly Dividend
(5.5) 38.9 (26.3) (32.8) 30.8 (13.7) 36.4 (14.3) 32.1 (30.8) 3.8 () 36.5 (39.2) (0.3)
(10.00) 10.00 (10.00) (10.00) 10.00 (10.00) 10.00 (10.00) 10.00 (10.00) 10.00 () 10.00 (10.00) (1,000.00)
389.6 308.4 440.7 321.0 38.4 434.9
59.8 263.9 406.9 141.4 172.3 321.8 406.2
1,933.0
327.3 2,099.6 2,099.6
PER BALANCE SHEET ........................... Notes : (1) (2) (3) (4) (5) Figures for the previous year are in bracket Aggregate Book Value of Unquoted Investments Aggregate Book Value of Quoted Investments Aggregate Market Value of Quoted Investments * Less than Rs 0.1 Million.
1,933.0
* 1,933.0 1,937.7
* 2,099.6 2,100.4
27
Schedules
As at November 30, 2005 Rupees in Millions 8.2 1.6 4.3 428.0 442.1 As at November 30, 2004 Rupees in Millions 4.2 1.0 1.9 292.0 299.1
Rupees in Millions 6. INVENTORIES Stock-in-Trade : Raw Materials ............................................................................................ Packing Materials ...................................................................................... Work-in-Progress ....................................................................................... Finished Goods ......................................................................................... PER BALANCE SHEET .... 7. SUNDRY DEBTORS UNSECURED Debts outstanding for a period exceeding six months : Considered Good ...................................................................................... Considered Doubtful ................................................................................. Less : Provision for Doubtful Debts ......................................................... Other Debts : Considered Good ...................................................................................... Considered Doubtful ................................................................................. Less : Provision for Doubtful Debts ......................................................... PER BALANCE SHEET .... 8. CASH AND BANK BALANCES Cash, Cheques and Stamps on hand ........................................................... With Scheduled Banks : On Current Account .................................................................................... PER BALANCE SHEET .... 9. LOANS AND ADVANCES (Unsecured, Considered Good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received ..... (Refer Note B2 Schedule 17) Sundry Deposits .......................................................................................... With Customs and Excise on Current Account ......................................... PER BALANCE SHEET .... 10. CURRENT LIABILITIES AND PROVISIONS Current Liabilities : Sundry Creditors : Due to Small Scale Industrial Undertakings (Refer Note B24 Schedule 17) ............................................................................................ Others ....................................................................................................... Advance payments and unexpired discounts ........................................... Unclaimed Dividends (Refer Note B25 Schedule 17) ............................ Other Liabilities ............................................................................................ Provisions : For Taxation : Current Income Tax less payments thereagainst .................................. Fringe Benefit Tax less payments thereagainst ..................................... For Proposed Dividend ............................................................................... For Corporate Dividend Tax ....................................................................... For Gratuity/Pension ................................................................................... For Leave Encashment ............................................................................... PER BALANCE SHEET .... * Less than Rs 0.1 Million
8.8 8.8 8.8 200.1 0.7 200.8 0.7 200.1 200.1 0.1 93.4 93.5
9.5 9.5 9.5 203.2 203.2 203.2 203.2 0.1 125.0 125.1
91.6 31.7 * 123.3
37.6 31.3 * 68.9
0.9 94.2 18.1 21.2 239.6 374.0 161.7 5.5 267.4 37.5 8.0 13.9 494.0 868.0
13.8 88.9 8.0 18.1 215.4 344.2 185.5 534.8 69.9 6.5 10.8 807.5 1,151.7
28
Schedules
Annexed to and forming part of the Profit and Loss Account for the year ended November 30, 2005
Year ended November 30, 2005 Rupees in Millions 5,119.5 42.7 220.7 409.4 672.8 PER PROFIT AND LOSS ACCOUNT .... 4,446.7 Year ended November 30, 2004 Rupees in Millions 4,721.0 41.3 254.2 374.8 670.3 4,050.7
Rupees in Millions 11. SALES Gross ............................................................................................................... Less : Excise Duty .......................................................................................... Sales Tax .............................................................................................. Trade Discount .....................................................................................
12. OTHER INCOME Sales Tax set off claims ................................................................................. Sales Tax refund ............................................................................................. Insurance, Customs and Carriers Claims ...................................................... Profit on sale of Fixed Assets ........................................................................ Profit on sale of Units of Mutual Funds ........................................................ Interest received on Deposits and others [Tax deducted at source Rs 0.1 Million (2004 : Rs 0.2 Million)] ............................................................ Dividend on Units of Mutual Funds ............................................................... Exchange Gain ................................................................................................ Miscellaneous Income .................................................................................... PER PROFIT AND LOSS ACCOUNT .... 6.8 2.3 1.8 1.1 76.2 60.4 148.6 19.1 * 1.0 0.4 433.1 1.5 55.8 0.1 64.4 575.4
13. RAW AND PACKING MATERIALS CONSUMED Opening Stock : Raw Materials .............................................................................................. Packing Materials ........................................................................................ 4.2 1.0 5.2 Add Purchases : Raw Materials .............................................................................................. Packing Materials ........................................................................................ 62.3 26.9 89.2 94.4 Less Closing Stock : Raw Materials .............................................................................................. Packing Materials ........................................................................................ PER PROFIT AND LOSS ACCOUNT .... * Less than Rs 0.1 Million 8.2 1.6 9.8 84.6 4.2 1.0 5.2 147.9 121.7 23.9 145.6 153.1 5.3 2.2 7.5
29
Schedules
Annexed to and forming part of the Profit and Loss Account for the year ended November 30, 2005
Year ended November 30, 2005 Rupees in Millions Year ended November 30, 2004 Rupees in Millions
Rupees in Millions 14. (INCREASE)/DECREASE IN WORK-IN-PROGRESS AND FINISHED GOODS Opening Stock : Work-in-Progress ........................................................................................ Finished Goods ........................................................................................... Less Closing Stock : Work-in-Progress ........................................................................................ Finished Goods ........................................................................................... PER PROFIT AND LOSS ACCOUNT .... 15. MANUFACTURING, ADMINISTRATIVE AND SELLING EXPENSES Salaries, Wages and Bonus ........................................................................... Contribution to Provident and Other Funds .................................................. Workmen and Staff Welfare Expenses .......................................................... Consumption of Stores ................................................................................... Power and Fuel ............................................................................................... Repairs and Maintenance : Buildings .................................................................................................. Machinery ................................................................................................. Others ....................................................................................................... Rent ................................................................................................................. Insurance ......................................................................................................... Rates and Taxes ............................................................................................. Loss on Fixed Assets Sold/Discarded .......................................................... Impairment on Fixed Assets .......................................................................... Advertising and Publicity ................................................................................ Forwarding Charges ....................................................................................... Travelling Expenses ........................................................................................ Discount and Commission on Sales .............................................................. Loan Licence Manufacturing Charges ........................................................... Exchange Loss ................................................................................................ Bad Debts written off ..................................................................................... Less : Adjusted against earlier year's provision ........................................... Provision for Doubtful Debts .......................................................................... Miscellaneous Expenses ................................................................................ PER PROFIT AND LOSS ACCOUNT .... 16. INTEREST Bank Overdrafts .............................................................................................. Income-tax ...................................................................................................... Others .............................................................................................................. PER PROFIT AND LOSS ACCOUNT .... * Less than Rs 0.1 Million 1.9 292.0
7.6 322.4 293.9 330.0 1.9 292.0 432.3 (138.4) 293.9 36.1
4.3 428.0
206.1 30.9 13.2 5.1 27.3 1.8 3.5 20.1 12.3 7.4 15.5 0.2 104.7 62.1 84.5 29.8 0.8 101.2 726.5
196.1 32.9 14.9 4.1 18.4 0.9 2.1 19.8 12.2 9.1 16.4 7.8 9.8 95.9 62.0 74.6 30.9 8.4 0.7 0.7 1.8 100.0 718.1
* 0.2 0.2
* 0.4 1.3 1.7
30
Significant Accounting Policies and Notes

17. SIGNIFICANT ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT NOVEMBER 30, 2005 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON THAT DATE A. Significant Accounting Policies 1. Basis of Accounting The financial statements are prepared under historical cost convention on an accrual basis. 2. Use of Estimates The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known/materialised. 3. Revenue Recognition Sales are recognised when the risk and reward of ownership is passed on to the customers, which is generally on despatch of goods. Sales are stated exclusive of Excise Duty, Sales Tax and Trade Discount. Dividend income is recognised when the right to receive the dividend is unconditional at the balance sheet date. Interest income is recognised on the time proportion basis. 4. Fixed Assets and Depreciation All Fixed Assets are stated at Cost of Acquisition less Accumulated Depreciation and Impairment in value, if any. Depreciation has been provided on the Written Down Value method at the rates specified in Schedule XIV of the Companies Act, 1956 except in respect of computers, photocopiers, facsimile machines, modems and appliances where depreciation has been provided @ 80%. Depreciation on addition/deletion to fixed assets during the year is provided on a pro-rata basis. Cost of Leasehold land is amortised over the period of lease. 5. Foreign Currency Transactions Transactions denominated in foreign currencies are recorded at the exchange rates prevailing at the date of transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates. In respect of monetary items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference and the premium on such forward contracts is recognised over the life of the forward contract. The exchange difference arising on settlement/translation are recognised in the revenue accounts, except those pertaining to the fixed assets acquired from outside India, which are adjusted to the cost of such fixed assets. 6. Investments Long-term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Current Investments are stated at lower of cost and net realisable value. 7. Inventories Inventories are valued on a FIFO basis, at lower of standard cost adjusted for variances and net realisable value. 8. Research and Development Capital expenditure on Research and Development is treated in the same way as expenditure on Fixed Assets. The Revenue expenditure on Research and Development is written off in the year in which it is incurred. 9. Retirement Benefits The Company has various schemes of Retirement Benefits such as Provident Fund, Superannuation Fund and Gratuity Fund. Companys contribution towards Provident Fund and Superannuation Fund are made at pre-determined rates and charged to the Profit and Loss Account for the year. The Gratuity and Superannuation Fund benefits are funded through the Group Schemes of the Life Insurance Corporation of India.
31
A.
Significant Accounting Policies (Contd.) The liability for gratuity and encashment of earned leave on retirement has been provided on the basis of actuarial valuation thereof as at the year end. 10. Excise Duty Excise Duty paid on goods manufactured by the Company and remaining in inventory, is included as part of valuation of Finished Goods. 11. Leases Lease rentals/Licence fees in respect of assets under Operating Lease are charged off to Profit and Loss Account, as incurred. 12. Taxation The provision for Income Tax is made at the average rate of tax as applicable for the income of the previous year as defined under the Income Tax Act, 1961. Deferred tax resulting from timing differences between book and tax profits is accounted for at the current rate of tax/ substantively enacted tax rates, as applicable, to the extent that the timing differences are expected to crystalise. Fringe Benefit Tax has been calculated in accordance with the provisions of the Income Tax Act, 1961. 13. Impairment of Assets The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. 14. Provisions and Contingent Liabilities A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made. Provisions are not discounted and are determined based on best estimate required to settle the obligation at each balance sheet date. Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation. A contingent liability is disclosed where the possibility of an outflow of resources embodying the economic benefits is remote.
Notes
Year ended November 30, 2005 Rupees in Millions B. Notes : 1. Contingent Liabilities : (a) In 1996 the Government had made a tentative claim for a sum of Rs 111.2 Million to be paid into the Drugs Prices Equalisation Account (DPEA) on account of unintended benefit enjoyed by the Company during the period May 1, 1986 to August 25, 1987. This was contested by the Company and subsequently during the current year a final demand has been received for Rs 34.7 Million. The Company, being aggrieved of the said demand and based on legal advice obtained in this regard, has decided to contest the above final demand of Rs 34.7 Million. The Company has however, out of abundant caution and based on its understanding of the facts and circumstances of the case provided for a sum of Rs 6.4 Million including interest liability. Year ended November 30, 2004 Rupees in Millions
32
Notes
Year ended November 30, 2005 Rupees in Millions 5.9 1.0 4.0 Year ended November 30, 2004 Rupees in Millions 1.6 8.8
(b) (c) (d) 2.
Claims against the Company, not acknowledged as debts .................................. Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances) ................................................................... In respect of the guarantees issued by the banks .................................................
Advances recoverable in cash or for value to be received includes : (a) Amount recoverable from companies under same management within the meaning of Section 370 (1B) of the Companies Act, 1956 (i) Abbott Laboratories (Singapore) Pte Ltd ........................................................ [Maximum amount due during the year Rs 0.3 Million (2004 : Rs 0.5 Million)] Abbott Healthcare Pvt Ltd ............................................................................... [Maximum amount due during the year Rs 16.4 Million (2004 : Rs 3.4 Million)] 0.3 0.2
(ii)
3.2
(iii) Abbott Laboratories Intl Co ............................................................................. [Maximum amount due during the year Rs 3.7 Million (2004 : Rs 2.0 Million)] (iv) Abbott Japan Co Ltd ....................................................................................... [Maximum amount due during the year Rs Nil (2004 : Rs * Million)] (v) (b) 3. Abbott Korea .................................................................................................... [Maximum amount due during the year Rs Nil (2004 : Rs 0.1 Million)]
3.7
2.0
4.5
4.8
Amount recoverable from Directors, Managers and Officers of the Company ....
Payments to Directors : (a) Managerial remuneration under Section 198 of the Companies Act, 1956 approved by the Central Government, as applicable [inclusive of Performance Linked Bonus Rs 2.1 Million (2004 : Rs 1.8 Million) monetary value of perquisites Rs * Million (2004 : Rs * Million)] ......................................................... Directors Fees ......................................................................................................... In addition, provision is made for the actuarially valued liability in respect of future payment of gratuity and pension amounting to Rs 0.5 Million (2004 : Rs 2.1 Million).
20.3 0.1
17.9 0.1
(b) (c)
4.
Auditors Remuneration (Including Service Tax) : (a) (b) (c) (d) Audit Fees ................................................................................................................. Certification .............................................................................................................. Other Services .......................................................................................................... Reimbursement of out-of-pocket expenses ........................................................... 2.7 * 0.1 2.2 * 0.1
5.
Particulars in respect of goods manufactured : (a) Registered/Licensed Capacities : In terms of Press Note No. 4 dated 25.10.1994 industrial licensing has been abolished in respect of pharmaceutical formulations/nutritional products. The registered/licensed capacities for pharmaceutical formulations/nutritional products produced by the Company have therefore not been specified. * Less than Rs 0.1 Million
33
Notes
Year ended November 30, 2005 Rupees in Millions (b) Installed Capacities : Pharmaceutical Formulations : Tablets ........................................................................................................... Liquids ............................................................................................................ Capsules ........................................................................................................ Nutritional Products : Powder ........................................................................................................... The installed capacities are as on the last day of the Accounting year. It is certified by the management of the Company. The auditors have placed reliance without verification on the certificates stated above in respect of installed capacities. Actual Production : Pharmaceutical Formulations : Tablets ........................................................................................................... Liquids ............................................................................................................ Capsules ........................................................................................................ Injectables ...................................................................................................... Nutritional Products : Powder ........................................................................................................... Note : Actual production in respect of Previous year includes quantities produced in the factories of third parties on loan licences. 6. Unit Quantity Million 450 Kilo Litre 5,185 Million 46 Tonne 600 Year ended November 30, 2004 Rupees in Millions Quantity 450 5,185 27
(c)
Million Kilo Litre Million Thousand Tonne
25 1,141 29 49
18 1,072 22 1,442
Information in respect of Opening Stock, Closing Stock, Sales and Purchases of Finished Goods : Opening Stock Class of Goods Unit Quantity Value Rupees in Millions 79.8 (82.2) 5.7 (16.5) 45.4 (31.2) 1.5 (3.1) 150.1 (175.4) () 4.8 (8.7) 4.7 (5.3) 292.0 (322.4) Closing Stock Quantity Value Rupees in Millions 73.1 (79.8) 12.7 (5.7) 39.7 (45.4) 0.2 (1.5) Sales Quantity Value Rupees in Millions 1,413.0 (1,345.4) 131.4 (108.3) 731.8 (682.6) 18.2 (18.0) 2,095.8 (1,860.8) 15.4 () 41.1 (35.6) () 4,446.7 (4,050.7) Contd.........
(i)
Pharmaceutical Formulations : Tablets ...................................... Million Capsules ................................... Million Liquids ...................................... Kilo Litre Ointments ................................. Tonne Injectables ................................ Thousand
208.15 (143.50) 5.65 (15.49) 488.18 (290.74) 2.35 (4.08) 1,204.26 (1,528.64) ()
118.62 (208.15) 9.67 (5.65) 364.91 (488.18) 0.25 (2.35) 2,087.35 (1,204.26) 0.94 ()
1,688.79 (1,794.36) 48.87 (48.35) 3,414.24 (3,609.95) 11.77 (13.73)
287.5 15,781.90 (150.1) (14,755.59) 0.3 () 8.9 (4.8) 5.6 (4.7) 428.0 (292.0) 47.41 ()
(ii)
Nutritional Products : Powder ...................................... Tonne
(iii)
Others : Excise Duty ............................... Total....
34
Notes
6. Information in respect of Opening Stock, Closing Stock, Sales and Purchases of Finished Goods (Contd.) Purchase of Finished Goods Unit Quantity Value Rupees in Millions
(i)
Pharmaceutical Formulations : Tablets .................................. Million Capsules ............................... Million Liquids ................................... Kilo Litre Ointments .............................. Tonne Injectables ............................. Thousand
1,645.81 (1,875.38) 30.89 (20.93) 2,346.20 (2,881.10) 12.69 (14.85) 16,822.89 (13,025.45)
623.2 (566.6) 46.8 (22.4) 269.7 (243.6) 8.7 (8.9) 2,064.4 (1,435.5) 45.9 (29.1) 3,058.7 (2,306.1)
(ii)
Others .......................................
Less: Insurance claims lodged on account of loss of stocks due to flood/fire .. Total ......... Note : Figures for the previous year are in bracket. 7. Consumption of Raw Materials and Packing Materials*:
47.3 () 3,011.4 (2,306.1)
Year ended November 30, 2005 Item Unit Quantity Value Rupees in Millions 52.6 3.3 28.7
Year ended November 30, 2004 Quantity Value Rupees in Millions 117.2 2.0 28.7
Active Bulk Ingredients ......... Foils ........................................ Miscellaneous ........................
Tonne Tonne
666.77 15.31
569.57 10.00
Total ...
*
84.6
147.9
Consumption has been arrived at by adding purchases to opening stock and deducting closing stock therefrom and includes Rs Nil (2004 : Rs 1.8 Million) of the materials sold/disposed off during the year. Year ended November 30, 2005 Rupees in Millions Year ended November 30, 2004 Rupees in Millions 83.6 1.7 84.8 0.5
8.
Value of Imports calculated on C.I.F. basis : (a) Raw Materials ............................................................... (b) Capital Goods .............................................................. (c) Finished Goods ............................................................ (d) Consumable Stores ..................................................... Expenditure in foreign currencies for : (a) Sales Promotion Expenses .......................................... (b) Technical support charges/Data center charges etc. (c) Others ...........................................................................
1.0 1.8 110.2 0.4
9.
2.7 7.4
3.2 5.2 1.4
35
Notes
Year ended November 30, 2005 Rupees in Millions 10. (a) Consumption of Raw and Packing Materials : Indigenous99.2% (2004 : 41.7%) ............................ Imported0.8% (2004 : 58.3%) .................................. 83.9 0.7 84.6 (b) Consumption of Stores : Indigenous90.2% (2004 : 80.5%) ............................. Imported9.8% (2004 : 19.5%) .................................. 4.6 0.5 5.1 11. Remittances during the year in foreign currency on account of dividend : Number of non-resident Shareholders 2 (2004 : 2) Equity Shares held on which dividend remitted 9,428,184 (2004 : 9,428,184) Dividend remitted for the year ended November 30, 2004 (2004 : November 30, 2003) ................................................ 12. Earnings in Foreign Exchange : (a) Goods exported on FOB basis .................................... (b) Reimbursement of Insurance and Freight on Exports (c) Reimbursement of Sales Promotion Expenses .......... 13. Miscellaneous Expenses include : Loss on Sale of Units of Mutual Funds ............................... 14. Miscellaneous Income includes : Write back of the diminution in value of Investments ........ 15. Materials cost / Finished Goods Purchased and Manufacturing, Administrative & Selling Expenses include medical samples manufactured/purchased which, valued at standard cost, amount to Rs 67.0 Million (2004 : Rs 39.5 Million) 16. Future obligations for : (a) Lease rentals in respect of assets taken on operating lease prior to April 1, 2001 .......................................... (b) Licence fees in respect of office premises taken on leave and license basis : not later than one year .............................................. later than one year and not later than five years ..... 17. Deferred Tax Asset/(Liability) consists of : Book/Tax Depreciation difference ....................................... Provision for earned leave ................................................... Provision for doubtful debts ................................................ Provision for excise and sales tax ....................................... Others (Net) ........................................................................... Total ............. Year ended November 30, 2004 Rupees in Millions 61.7 86.2 147.9 3.3 0.8 4.1
330.0 33.6 * 1.7 0.9 0.2
330.0 27.6 0.1 8.1 6.4 2.2
0.3
2.4 2.8 (66.2) 4.7 3.2 5.2 (53.1)
1.0 (76.6) 3.9 3.5 4.2 0.3 (64.7)
18. Consequent to the sale of the undertaking at Jejuri, Maharashtra, as a going concern in 2002, the eligibility certificate under the package scheme of incentives notified under Maharashtra Governments Resolution Number IDL-1088/(6603) IND-8, dated 30.09.1988 stands transferred to the purchaser as per order passed by Office of the Joint Director of Industries dated February 11, 2004. As the Sales Tax deferral benefit is being utilised by the Company, the Company has agreed to repay these amounts on the respective due dates to the purchaser. 19. Purchase of Finished Goods is net of Insurance claims of Rs 47.3 Millions lodged by the Company on account of loss of stocks due to flood/fire during the year. 20. The Company operates in one business segment i.e. Pharmaceuticals and one geographical segment i.e. Within India. Hence, no separate information for segmentwise disclosure is required. * Less than Rs 0.1 Million
36
Notes
21. Purchase and Sale of Investments during the year ended November 30, 2005 : CURRENT INVESTMENTS IN UNITS OF MUTUAL FUNDS NON-TRADE QUOTED: Mutual Fund Purchases No. of units Rupees in in Millions Millions
(12.4) (20.1) 42.8 (26.3) * (5.5) () () 0.6 (44.2) (0.5) 13.2 (13.7) 33.3 () (0.2) (7.6) () () (6.6) 36.4 () 9.8 (14.3) (0.2) 7.4 (30.8) (8.7) 6.8 () 41.2 () (0.2) () () (129.3) (201.4) 429.4 (263.9) 0.5 (59.8) () () 6.9 (548.3) (4.7) 136.5 (141.4) 333.7 () (1.6) (78.2) () () (66.2) 440.7 () 118.6 (172.3) (1.6) 77.7 (321.8) (92.2) 68.4 () 413.3 () (1.6) () ()
Cost of Sale No. of units Rupees in in Millions Millions

(21.6) (20.1) 30.3 () 5.6 () (3.8) (26.2) 33.4 (11.4) (0.5) 27.0 () 2.5 () (7.7) (19.0) (5.8) (8.1) (6.6) () 24.1 () (7.3) 38.2 () (18.2) 3.0 () 9.2 () (8.3) (1.1) (4.6) (226.0) (201.4) 303.7 () 60.2 () (78.8) (339.4) 413.8 (141.4) (4.7) 277.9 () 24.9 () (77.5) (195.2) (66.2) (96.2) (66.2) () 290.9 () (79.4) 399.6 () (192.4) 30.0 () 91.9 () (84.8) (12.0) (63.1) Contd.........
Birla Bond Plus Institutional Plan Dividend Reinvestment Birla Cash Plus Monthly Dividend Reinvestment ............... Birla Cash Plus Institutional Premium Weekly Dividend Reinvestment ........................................................................ Birla Cash Plus Institutional Weekly Dividend Reinvestment Birla Income Plus Plan B Growth ........................................ DSP Merill Lynch Bond Fund Growth ................................. DSP Merill Lynch Liquidity Fund Weekly Dividend Reinvestment ........................................................................ Grindlays Cash Fund Weekly Dividend Reinvestment ...... Grindlays Cash Fund Institutional Plan B Weekly Dividend Reinvestment ........................................................................ Grindlays Cash Fund Super Inst. Plan C Monthly Dividend Reinvestment ........................................................................ GSSIF Medium Term Bimonthly Dividend Reinvestment GSSIF Short Term Plan B Inst. Plan Monthly Dividend Reinvestment ........................................................................ GSSG Grindlays Super Saver Income Fund Growth .......... HDFC Income Fund Growth ................................................ HDFC Liquid Fund Dividend Reinvestment ........................ HDFC Liquid Fund Premium Plus Plan Weekly Dividend Reinvestment ........................................................................ HDFC Liquid Fund Premium Plan Dividend Reinvestment HDFC Short Term Premium Plus Plan Dividend Reinvestment ........................................................................ HSBC Cash Fund Institutional Monthly Dividend Reinvestment ........................................................................ HSBC Income Fund Short Term Institutional Plan Dividend Reinvestment ........................................................................ HSBC Cash Fund Institutional Plus Weekly Dividend Reinvestment ........................................................................ HSBC Cash Fund Institutional Plus Monthly Dividend Reinvestment ........................................................................ HSBC Institutional Income Fund Short Term Investment Plan Dividend Reinvestment ............................................... K Bond Unit Scheme 99 (Wholesale Growth Plan) ............. Prudential ICICI Income Plan Growth ................................. * Less than Rs 0.1 Million
37
Notes
21. Purchase and Sale of Investments during the year ended November 30, 2005 (Contd.)
Mutual Fund
Purchases No. of units Rupees in in Millions Millions

1.3 (50.3) (9.2) (0.1) (16.5) (13.9) (2.4) 36.5 () (*) () (3.4) (0.1) (*) 0.1 () * (0.3) 13.0 (522.3) (99.3) (0.8) (195.9) (165.2) (28.2) 435.4 () (*) () (33.9) (65.2) (17.3) 133.5 () 1.4 (327.4) 2,609.0 (3,539.8)
Cost of Sale No. of units Rupees in in Millions Millions

40.5 (11.1) (21.1) (3.3) (16.7) (13.9) (2.4) () (1.0) (8.3) (3.4) (0.1) (0.1) 0.1 () 0.3 () 420.6 (114.8) (228.5) (35.8) (198.9) (165.2) (28.2) () (10.1) (130.7) (33.9) (65.2) (106.5) 133.5 () 328.8 () 2,775.8 (3,042.5)
Prudential ICICI Institutional Liquid Plan Monthly Dividend Reinvestment ......................................................................... Prudential ICICI Institutional Short Term Dividend Reinvestment ....................................................................... Prudential ICICI Institutional Short Term Monthly Dividend Reinvestment ........................................................................ Prudential ICICI Liquid Plan Dividend Reinvestment ......... Prudential ICICI Liquid Plan Daily Dividend Reinvestment Prudential ICICI Liquid Plan Weekly Dividend Reinvestment Prudential ICICI Liquid Plan Institutional Plus Monthly Dividend Reinvestment ........................................................ Prudential ICICI Short Term Plan Dividend Reinvestment Templeton India Income Fund Growth ................................ Templeton India Liquid Fund Weekly Dividend Reinvestment ........................................................................ Templeton India Short Term Monthly Dividend Reinvestment ....................................................................... Templeton India Short Term Weekly Dividend Reinvestment ....................................................................... Templeton India Treasury Management Account Institutional Plan Weekly Dividend Reinvestment .............. Templeton India Treasury Management Account Regular Plan Weekly Dividend Reinvestment ..................... Total ................. * Less than Rs 0.1 Million 22. Related Party Disclosure (a) Parties where control exists : Holding Company (b)
Abbott Capital India Limited (Formerly known as Lupharma UK Holding One Ltd) Other related parties with whom transactions have taken place during the year : (I) Fellow subsidiaries Abbott Logistics BV Abbott GmbH & Co KG Abbott Laboratories (Singapore) Pte Ltd Abbott Laboratories Intl Co Abbott Equity Holdings Ltd Abbott Australia Pvt Ltd Abbott Japan Co Ltd Abbott Laboratories Ltd, Thailand Abbott Laboratories, SA Abbott Healthcare Pvt Ltd
38
Notes
(II) Key Management Personnel : Mr V Mohan Managing Director Mr D M Gavaskar# Managing Director & President Mr R Seth@ Director Finance Mr S Jain Director Marketing Mr N Y Katre Director Supply Chain Mr U D Chiniwala Vice President Finance Mr A V Chandorkar Vice President Human Resources & Administration Dr A Rodrigues Regional Medical Director Mr K M Marfatia Vice President Legal Dr S Acharya General Manager Quality Control & Development (III) Relatives of Key Management Personnel Mrs V Jain Wife of Mr S Jain Mrs S Chandorkar Wife of Mr A V Chandorkar @ For part of the year # For part of the previous year (c) Transactions during the year : Sr. Nature of Transactions No. Holding Company Fellow Subsidiary Rupees in Millions Key Relatives Management of Key Personnel Management Personnel
Sales & Income 1. Goods Trading Abbott Healthcare Pvt Ltd 2. Rendering of services Abbott Laboratories (Singapore) Pte Ltd Abbott Laboratories Intl Co 3. General Administrative Charges Abbott Healthcare Pvt Ltd Total Purchases & Expenses 1. Goods Trading Abbott Logistics BV Abbott Laboratories Intl Co Others Total
20.9 () 0.1 () 1.6 () 0.2 (0.2) 22.8 (0.2)
92.4 (74.8) 17.8 (10.1) 8.4 (14.7) 118.6 (99.6)
2. Product Registration fees, MIS charges, Training etc. Abbott Laboratories Intl Co Abbott Australia Pvt Ltd Abbott Laboratories (Singapore) Pte Ltd Abbott Laboratories Ltd, Thailand Abbott Laboratories, SA Total
0.4 (3.6) 0.2 (1.6) 0.6 () 0.1 () 2.6 () 3.9 (5.2) Contd.........
39
Notes
(c) Transactions during the year (Contd.) Sr. Nature of Transactions No. Holding Company Fellow Subsidiary Rupees in Millions Key Relatives Management of Key Personnel Management Personnel
3. Interest (Net) Abbott Healthcare Pvt Ltd Payments to Key Management Personnel 1. Remuneration Mr D M Gavaskar# Mr V Mohan Others Total 2. Rent Mr U D Chiniwala
* (1.1)
(16.0) 20.3 (2.0) 18.4 (13.4) 38.7 (31.4) 0.1 (0.1) 0.1 (0.1) 0.1 (0.1) (0.1) 0.2 (0.3) (*) 0.1 (0.1)
Mr A V Chandorkar Mrs V Jain Others Total Dividend Remitted Abbott Capital India Limited (Formerly known as Lupharma UK Holding One Ltd) Abbott Equity Holdings Ltd
289.2 (289.2) 40.8 (40.8)
(d)
Outstandings as on November 30, 2005 Payable Abbott Laboratories Intl Co Abbott Logistics BV Others Mr V Mohan Total 43.0 (29.9)
16.0 (9.2) 25.5 (18.7) 1.5 (2.0) (1.6) (1.6)
* Less than Rs 0.1 Million # For part of the previous year. Contd.........
40
Notes
(d) Outstandings as on November 30, 2005 (Contd.) Nature of Transactions Holding Company Fellow Subsidiary Rupees in Millions Key Relatives Management of Key Personnel Management Personnel
Receivables/Deposits Abbott Laboratories Intl Co Abbott Healthcare Pvt Ltd Others Mr U D Chiniwala Others Mrs V Jain Mrs S Chandorkar Total
3.7 (2.0) 3.2 () 0.3 (0.2) 2.8 (2.8) 1.7 (2.0) 2.3 (2.3) 1.0 (1.0) 7.2 (2.2) 4.5 (4.8) 3.3 (3.3)
Note : Figures for the previous year are in bracket. 23. The Company has Bank Overdraft arrangement secured by hypothecation of all stocks and book debts. 24. The names of the Small Scale Industrial Undertakings to whom the Company owes a sum for more than 30 days as at November 30, 2005 are given below : Herald Publications Pvt Ltd Mhalasa Chemicals Rasula Pharmaceuticals & Fine Chemicals Aarsha Chemicals Pvt Ltd Amijal Chemicals Hi-Tech Enterprises The above information and that given in Schedule 10 Current Liabilities and Provisions regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. 25. In respect of the amounts as mentioned under Section 205C of the Companies Act, 1956, no dues are to be credited to the Investor Education and Protection Fund as on November 30, 2005. 26. The revenue expenditure on Research and Development is Rs 15.1 Million (2004 : Rs 14.4 Million). 27. The figures of the previous year are regrouped wherever considered necessary. Signatures to Schedules 1 to 17 which form an integral part of the Accounts.
For and on behalf of the Board VIVEK MOHAN R A SHAH ASHOK DAYAL Managing Director Director Director Mumbai, March 7, 2006
41
Balance Sheet Abstract and General Business Profile

I. Registration Details Registration No. Balance Sheet Date 7330 30-11-2005 State Code 11
II.
Capital Raised during the year (Amount in Rs Millions) Public Issue NIL Bonus Issue NIL Right Issue NIL Private Placement NIL
III.
Position of Mobilisation and Deployment of Funds (Amount in Rs Millions) Total Liabilities 3,103.7 Sources of Funds Paid-up Capital 152.8 Secured Loans NIL Application of Funds Net Fixed Assets 311.7 Net Current Assets (62.1) Accumulated Losses NIL Investments 1,933.0 Miscellaneous Expenditure NIL Reserves & Surplus 2,011.6 Unsecured Loans 18.2 Total Assets 3,103.7
IV. Performance of Company (Amount in Rs Millions) Turnover (including Other Income) 4,595.3 Profit/(Loss) Before Tax 871.1 Earning per Share in Rs 38.72 V. Generic Names of Three Principal Products/ Services of Company (As per monetary terms) Item Code No. (ITC Code) 300431 01 300490 37 300490 07 Insulins Antacid Ibuprofen For and on behalf of the Board VIVEK MOHAN R A SHAH ASHOK DAYAL Managing Director Director Director Mumbai, March 7, 2006 Product Description Total Expenditure 3,724.2 Profit/(Loss) After Tax 591.6 Dividend Rate % 175%
42

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Abbott India Limited

How our Income was spent

Report & Accounts 2005

Abbott India Limited

Explanatory Statement pursuant to Section 173 of the Companies Act, 1956

Report & Accounts 2005

Report of the Directors

(Rupees in Millions) Year ended Year ended

Directors Responsibility Statement

Abbott India Limited

Information pursuant to Section 217 of the Companies Act, 1956

Your Directors have pleasure in recommending their appointment.

Health, Safety and Environment

Report & Accounts 2005

Technology Absorption and Development

Reports on Corporate Governance and Management Discussion & Analysis

Abbott India Limited

40.50 0.6 15.65

58.31 0.8 13.09

Optimization, standardization and improvement of products and manufacturing processes.

Through Steam turbine/Generator N.A.

Report & Accounts 2005

Abbott India Limited

Report on Corporate Governance

Non-Executive, Independent Director

10 (includes Chairmanship of 4 companies)

Non-Executive, Independent Director

Non-Executive Director Non-Executive Director

Report & Accounts 2005

April 27, 2004

April 26, 2005

Abbott India Limited

Listing On Stock Exchange Stock Code

: Bombay Stock Exchange Limited : 500488

Registrars and Share Transfer Agents

Date of Book Closure

Dividend Payment Date

Report & Accounts 2005

0.25 11,830,189 100.00 15,280,100

Abbott India Limited

Name of the Company

Chairmanship or Membership of Audit Committee of Board

14. Chairman 15. Chairman ViceChairman Director Chairman 16.

Director Director Director Director

Report & Accounts 2005

Auditors Certificate for Corporate Governance

Mumbai March 7, 2006

Abbott India Limited

Management Discussion Analysis Report

Report & Accounts 2005

Abbott India Limited

Report & Accounts 2005

Forum where dispute is pending

Central Excise Act, 1944

0.1 0.01 0.01

Central Sales Tax Act, 1956

Non-submission/Rejection of relevant statutory forms

Abbott India Limited

Report & Accounts 2005

152.8 2,011.6 2,164.4 18.2 53.1 2,235.7

152.8 1,730.0 1,882.8 21.9 64.7 1,969.4

Abbott India Limited

Profit and Loss Account