GRANULES INDIA Share price

Granules India Ltd (GIL) was incorporated as a PrivateLimited Company on March 16 1991 and was later convertedinto a Public Limited Company on February 8 1993. GILcommenced its operations in April 1991 as a merchantexporter of bulk drugs like Paracetamol Guaifenesin andChloro Pheniramine Maleste. It has been exporting mainlyto the developed markets such as U.S.A. Europe Mexico andHongkong. Since 1992 GIL concentrated on export ofParacetamol powder which was procured from a GroupCompany M/s.Triton Laboratories Pvt Ltd (TLPL) a smallscale unit. In 1993-94 the international prices of bulkdrugs like Paracetamol were under pressure and GIL decidedto enter into value added areas.In April 1993 GIL also joined as a partner of M/s.TritonLaboratories (TL) a partnership firm promoted by thepromoters in 1985. After GIL became a partner. TL crestedfacilities for manufacture of DC blends of Paracetamol anddirectly entered into its export market. Later TL decidedto diversify into manufacturing of bulk drugs and startedimplementing a project for the same. In August 1994 aspart of consolidation and restructuring the Group''soperations. TL was dissolved and its assets andliabilities were taken over by GIL at book value. The assetswere independently valued by Shri S.Deshpande CharteredEngineer and approved valuer. (Rs.lakhs)Description Book Transfer Chartered value value Engineer''s valuationAssetsLand & Development *35.54 35.54 39.58Building 22.42 22.42 # 102.57Plant & Machinery 13.36 13.36) # 125.10Others 17.76 17.76)Capital work-in-progress 174.17 174.17 263.25 267.25 Investment 5.00 5.00Total (A) 268.25LiabilitiesNet current liabilities 63.27 63.27Long term liabilities 0.92 0.92Total liabilities (B) 64.19Purchase consideration (A) - (B) 204.06* The value of land purchased in 1985 for Rs.88994 wasrevalued at Rs.2826980/- on March 30 1993 at Government fixed rate of Rs.500/-per sq. yard and as valued by M/s. M. Raja Rao & Co.Chartered Engineers. Registered valuers & Insurancesurveyors. Development cost includes land leveling. # Includes Capital work-in-progressOut of the purchase consideration of Rs.204.06 lakhs theshares of the partners were as follows: - GIL - Rs.131.13 lakhs Sri Krishna Prasad - Rs. 37.47 lakhs Smt C. Uma Devi - Rs. 35.45 lakhsSri Krishna Prasad and Smt C. Uma Devi were allotted374700 and 354500 equity shares respectively of GIL ofRs. 10/- each at par in settlement of their share ofpartnership as detailed above. In addition to the above GILallotted (I) 6500 equity shares of Rs. 10/- each at par toSmt. C. Uma Devi in settlement-of rental dues for theyears 1992-93 and 1993-94 and (ii) 2600 equity shares toDr. C. Hariprasad 1500 equity shares to Dr. C. Nageswara Rao and 5000 equity shares to Smt R.Santisree all these of Rs. 10/- each and issued at partowards the long term liabilities taken over from thepartnership firm as detailed above.GIL has also purchased the assets of a sick unit from theAndhra Pradesh State Financial Corporation (APSFC) on March 30 1994. This unit was manufacturing bulk drugs.The assets comprising of land buildings and plant andmachinery were purchased for Rs.35 lakhs by availing termloan from APSFC (Rs.22.75 lakhs) and own funds (Rs.12.25lakhs). These assets are not presently used and areearmarked for future expansion needs of the companyGIL is now implementing the ongoing project taken over fromTL and is exporting DC blends of Paracetamol ofinternational pharmacopial standards from September 11994. Trial production of Folic Acid commenced in November1994 and commercial production in August 1995. The list of GIL''s clients include M/s.Roussel CorporationHelm New York Chemical Corporation and Granutec all ofU.S.A Welding GMBH & Co of Germany and Flavine Espana S.A.of Spain.