Net sales for the year are, however, marginally lower at Rs 382.49 crore as against Rs 386.90 crore in the previous year. The results are only in respect of HMR and do not include that of Roussel India.

Other income and total expenditure stood at Rs 19.78 crore and Rs 339.35 crore respectively, while interest was at Rs 8.41 crore. Depreciation was higher at Rs 12.44 crore against Rs 10.74 crore in the previous year.

Profit before extraordinary items and taxation was lower at Rs 42.07 crore as against Rs 42.72 crore in the previous year. Net profit margins is 8.11 per cent against 5.23 per cent in the previous year. Extraordinary income for the year was Rs 3.19 crore against an extraordinary expenseof Rs 7.60 crore in the previous year. Extraordinary items include the profit on sale of fixed assets and developmental rights and payment of voluntary retirement compensation.

Tax for the year was Rs 14.23 crore as against Rs 14.86 crore in the previous year. The tax figure includes provisions for previous years.

Meanwhile, Roussel India, which is in the process of being merged with Hoechst Marion Roussel has registered a sales turnover of Rs 166 crore for the year ended March 31, 1998, representing a 13 per cent increase over the previous year. Exports have increased to Rs 25 crore, while profit after tax has doubled to Rs 1.64 crore. During the year, the company launched an anti-infective parenteral, Targocid and a topical corticosteroid, Dermatop.

Though the scheme of amalgamation between HMR and Roussel India has been unanimously approved by the shareholders, the sanction of the Bombay High court is pending.

The merger is expected to lead to significant cost savings, operational efficiencies,better marketing and translate into higher revenues to the shareholders. Significant improvements in market coverage and focus on target segments will be achieved through rationalisation of the field force into two: A) the larger one for general practitioners and the smaller one for specialists in urban centres.

The integration will also facilitate the streamlining of manufacturing, quality control and pooling of resources which would in turn mean better products and faster launch of the group's international range of drugs.

The company has also set up an integration task force to tackle issues relating to functional integration and process improvements.

INSIGHT

Margin under pressure

After a good performance in the first half, the notification by the NPPA reducing the prices of some of the products has resulted in a fall in operating margins to 11 per cent from 13 per cent last year. In fact operating margins have fallen from 14 per cent in the first half to just 8 per cent in thesecond half of last year.

Neverthless the bottomline has been benefited by a lower corporate tax rate and a higher extraordinary income.