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Directors Report of Bilcare Ltd.

Mar 31, 2014

Dear Members,

The Director we are pleased to present the report on our business and operations for the financial year ended 31 March 2014.

Financials

The Company''s Standalone revenue for the year FY 2014 stood at Rs. 394.47 Crores as against Rs. 726.64 Crores of FY 2013. The decline is mainly due to working capital shortage which resulted in a loss of execution of the sales orders in hand.

Rs. in Crore 2013-14 2012-13

Sales and Other Income 394.47 726.64

Profit / (Loss) before tax (157.35) 37.74

Profit / (Loss) after tax (121.46) 6.58

Balance in profit & loss account 201.95 323.41

Being a Company having its major operations & revenues stream overseas, the debt raised in India to support these operations, was at a disadvantage both in terms of the interest rates as well as the tenure. This resulted in a stress situation for the cash flows of India standalone. The Company has already initiated the process of realigning the entire structure to ensure optimum utilization of resources as well as capital reorganization.

Dividend

In absence of profits, your Directors are unable to recommend Dividend for the financial year ended 31 March 2014.

Fixed Deposit

Fixed deposits received from the shareholders and the public as on 31 March 2014 stood at Rs. 16,568.27 Lacs.

As on 31 March 2014, the Company has no overdue deposits other than the unclaimed deposits of Rs. 11.64 Lacs.

Consolidated Financial Statements

The Consolidated Financial Statements, pursuant to clause 32 of the Listing Agreement and in accordance with the Accounting Standard AS-21 on Consolidated Financial Statements and AS-27 on Financial Reporting of Interest in Joint Ventures are provided in the Annual Report.

These consolidated financial statements provide financial information about the Company and its subsidiaries as a single economic entity and form part of this Annual Report. For the year ended 31 March 2014, the consolidated revenue stood at Rs. 3,075.65 Crores against Rs. 3,551.61 Crores of previous year.

Subsidiary Companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. The Company has five subsidiary companies, namely Bilcare Singapore Pte. Ltd., Singapore, Bilcare Mauritius Ltd., Mauritius, Bilcare International (formerly Nazilla Limited), Mauritius, Bilcare Packaging Limited, Mauritius and B A Technologies Limited, India. Some of these subsidiaries in turn have their respective step down subsidiaries.

Research & Development

Bilcare steadfastly maintained its commitment, dedication and focus on significant investment of its time and resources in Research & Development activities to create innovative and novel products, processes and services. The primary objective was to strengthen the innovation pipeline and innovative offerings addressing unmet and newer challenges encountered by our customers. The activities also encompassed customized development on existing intellectual property to meet the specific needs and requirement of customers. All new development activities were protected by encapsulating them with intellectual property rights in key / potential business regions across the world.

Future plan of action

With securitization and governance becoming the key requirement in all sectors, Bilcare plans to strengthen the new approach of collaborating with sector / region specific technical partners / associates in order to enhance the ability of its products, processes, services and technologies reach to a wider pool of sectors / regions. Bilcare will also continue to invest time and resources in all the R&D activities initiated to enable accomplish commercialization of these initiatives and generate newer revenue streams. Bilcare will also continue to focus on R&D initiatives in providing innovative packaging solutions for ensuring that Bilcare sustains its leadership position and recognition as the one stop shop for pharmaceutical segment which provides for all aspects of packaging need

Expenditure on R & D Rs. in Crores

Capital -

Recurring 7.93

Total 7.93

R & D Expenditure as a percentage of Total Turnover 2.01%

On a consolidated basis, total R&D expenditure as a percentage of consolidated turnover is 0.64%.

Conservation of Energy and Technology

The quest for savings in electrical cost which is one of the key components in the cost of the product has not stopped. The never tiring team has once again contributed in maintaining the power factor to unity. This consistent effort has contributed to a saving of Rs. 0.37cr per annum on the annual electrical bill value in the year 2013-14.

As mentioned in the previous report we had initiated the use of FO instead of LDO and achieved a savings of Rs. 0.28 cr from Sept 2013 to March 2014. Due to financial constraints the project Regenerative Thermal oxidizer (RTO) is postponed to financial year 2014-15.

In the financial year 2014-15,

1. It is proposed to upgrade the heating system of the foils coating station. This will result in a savings of Rs. 0.25 cr per annum.

2. It is proposed to refine and recycle the used solvent which will help us in procuring lesser quantity of fresh solvent. This project will help us to save Rs. 0.12 cr per annum.

Technology Absorption, Adaptation and Innovation

Bilcare''s commitment of continued significant investments on R&D activities has helped in sustaining the continuity of its innovation pipeline with successful addition of newer products, processes services and technologies to its innovation portfolio.

During the financial year, the company filed 21 Patent applications related to its innovative products and technologies and were granted 2 Patents.

The company has also continued its focus on ensuring a sizeable portion of its innovation activities on Technology absorption and adaptation which has led to significant improvement in the processes and manufacturing operations related to existing products which in turn has resulted in better earnings on innovative products and remaining competitive in generic products.

Directors

Dr. Praful Naik, Executive Director is retiring by rotation and being eligible offer himself for re-appointment.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors has, at its meeting held on 30 May 2014, appointed the existing Independent Directors Mr. Rajendra Tapadia and Mr.Pawan G. Chandak as Independent Directors for a term of 5 consecutive years with effect from the date of ensuing Annual General Meeting, subject to approval of shareholders. The requisite resolutions for approval of their appointment as Independent Directors, are being proposed in the notice of the ensuing Annual General Meeting for the approval of the members.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub- section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of Directors proposed for appointment/re-appointment has been given in the Report on Corporate Governance.

Directors'' Responsibility Statement

Pursuant to the requirement under the Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that :

1. In the preparation of the annual accounts for the year ended 31 March 2014, the applicable accounting standards have been followed and there are no material departures from the same.

2. The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2013-14 and of the loss of the Company for the year ended on that date.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The accounts for the financial year ended 31 March 2014 have been prepared on a ''going concern'' basis.

Corporate Governance

A report on Corporate Governance is given in this Annual Report.

Auditors

M/s. R. L. Rathi & Co., Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 139 of The Companies Act 2013 and the conditions prescribed read with the Rule 4 of Companies (Audit and Auditors) Rules, 2014 and that they are eligible for such appointment.

The observations and comments given by the Statutory Auditors in their report read together with notes thereon are self- explanatory and hence, do not call for any further comments under Section 217 of the Companies Act, 1956.

Cost Auditors

The Cost Audit Report under The Companies (Cost Audit Report) Rules, 2011 for the year 2012-13 was duly filed with the Ministry of Corporate Affairs on 27 September 2013.

The Central Government had approved appointment of M/s. Parkhi Limaye & Co., Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2013-14.

Statutory Disclosures

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company. The statement is also available for inspection at the Registered Office, during working hours upto the date of the Annual General meetng.

Particulars regarding technology absorption, conservation of energy and foreign exchange earning and outgo required under section 217 (1) (e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 have been given in the preceding paras.

For the FY 2014, the compliance report is provided in the Corporate Governance section of this Annual Report. The Auditors'' Certificate on compliance with the mandatory recommendations of the committee is annexed to this report.

Acknowledgement

We thank our domestic and international customers, vendors, investors, banking community, investment bankers, rating agencies and stock exchanges for their continued support during the year.

We place on record our appreciation of the contribution made by the employees at all levels worldwide. Our consistent growth was made possible by their hard work, solidarity, commitment and unstinted efforts.

We thank the Governments of various countries where we have our operations and also thank Government of India and other government agencies for their positive co-operation and look forward to their continued support in future. Finally, we wish to express our gratitude to the members and shareholders for their trust and support.

For and on behalf of the Board of Directors

Mohan H. Bhandari Chairman and Managing Director

Place: Pune Date : 30 May 2014


Mar 31, 2013

To the Members,

The are pleased to present the report on our business and operations for the financial year ended 31 March 2013.

Financials

The Company''s Standalone revenue for the year FY 2013-stood at Rs. 727 Crores as against Rs. 759 Crores of FY 2012 due to break down of coating line in India for a month amounting to loss of Rs. 75 Crores. There was also severe shortage of working capital in India resulting to further loss.

Rs. Crores

2012-13 2011-12

Sales and Other Income 726.64 758.86

Profit before tax 37.74 113.19

Profit after tax 6.58 74.75

Profit available for 323.41 332.30 appropriation

General Reserve -- 10.00

Dividend -- 4.71

Dividend Tax -- 0.76

Debenture Redemption

-- -- Reserve

Balance in profit & loss 323.41 316.83 account

Being a Company parented out of India, most of its debt is raised in Indian currency, with relatively shorter tenure which is a big disadvantage considering the current global business scenario. This has resulted in severe stress on operations, cash flows and creditor''s commitment delays. Meanwhile, as a corrective measure, Company has initiated a comprehensive restructuring and financial consolidation exercise.

Dividend

In absence of adequate profits, your Directors are unable to recommend Dividend for the financial year ended 31 March 2013.

Fixed Deposit

Fixed deposits received from the shareholders and the public as on 31 March 2013 stood at Rs. 16,370.54 Lacs.

As on 31 March 2013, the Company has no overdue deposits other than the unclaimed deposits of Rs. 12.79 Lacs.

Consolidated Financial Statements

The Consolidated Financial Statements, pursuant to clause 32 of the Listing Agreement and in accordance with the Accounting Standard AS-21 on Consolidated Financial Statements and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

These consolidated financial statements provide financial information about the Company and its subsidiaries as a single economic entity and form part of this Annual Report. For the year ended 31 March 2013, the consolidated revenue stood at Rs. 3,547 Crores against Rs. 3,642 Crores of previous year.

Subsidiary Companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. The Company has four subsidiary companies, namely Bilcare Singapore Pte. Ltd., Singapore, Bilcare Mauritius Ltd., Mauritius, Bilcare International (formerly Nazilla Limited), Mauritius and B A Technologies Limited, India. Some of these subsidiaries in turn have their respective step down subsidiaries. The Company also has a 50% joint venture in International Labs, LLC, US.

Research & Development

Bilcare''s firm belief in long-term value creation from continual investments in Research & Development has enabled the expansion of its horizon of Innovation pipeline which has successfully yielded a rich portfolio of newer products, process and services this year as well. Bilcare continued investing significantly in R&D activities leading to the creation of new innovations and also invested in protecting these innovations through intellectual property rights in major regions of the world for ensuring sustained business expansion and growth. Some of the key R&D activities in TFY 2013 include:

- Newer packaging solutions for Active Pharmaceutical Ingredients (APIs'')

- Development of innovative packaging materials viz. Venus Protect, Printed Venus Protect.

- In-house development of PVC and Aclar lamination.

- In-house development of tri-laminate film comprising PVC, EVOH and Aclar for Oxygen sensitive formulations.

- PVdC based high barrier films for highly sensitive formulations as viable alternative to high cost barrier films for use in low value pharmaceutical products.

- In-house development of Suppository films.

- Development of unique printed features on film substrates.

- Development of paper based extrusion laminates having surlyn as sealant layer.

- Development of unique complexes based on co-extrusion process.

- Development of various complexes with unique printing features for confectionary products.

- Stabilization and Scale up of image embedded transparent colored high barrier composite as overt anti- counterfeit features for packaging of multivitamin products.

- Development of various aluminum foil based complexes to pack ORS with the help of special adhesive system.

- Development of robust Bilcare Protect-L with the help of special adhesive and process.

Bilcare also continued focused research and development activities on its path-breaking nonClonableID™ technologies. Some of the key development activities accomplished include:

- Research and development activities on the project entitled "Customized adaptation of nonClonableID™ technology to establish authenticity of medical products approved by CSIR under its prestigious New Millennium Indian Technology Leadership Initiative (NMITLI) program comprising:

a. Core ncID™ chip adaptation design and development

b. ncID™ chip applicator system

c. Secure track and trace cum authentication application system

d. Securitization of developed IT architecture

e. BATS-PTA™ track and trace mobile application

f. Medication compliance mobile application

g. Patient compliance and Doctor monitoring system

h. Project plan mapping

i. Quality management system

j. Touch reader adaptation design and development

k. System integration testing

- Successfully completed the design and development of secured track and trace cum authentication management system for pharmaceutical products manufactured for exports.

- Designed and developed "Secured fertilizer supply chain control and direct to farmer subsidy management system".

- Design and development of Duty planning management system for the Delhi Police for continued enhancement of the nonClonableID™ based Secured Identity Management system which has been successfully implemented for Delhi Police personnel.

- Designed and developed the "Secured Identification and Authorisation solution for B.Twill jute bales".

- Initiated and completed the Design and development of the Build & Operate Secured Exported Drugs Traceability

& Authentication System for Drugs Manufactured in and Exported from India.

- Initiated the Design and development of the "Local Authentication based NREGA Management Solution using ncID™Technology" for ensuring non- disruption of Activities in areas / regions with Poor and or No Network Connectivity.

- Initiated the Design and Development of nonClonableID™ Technology for Secured Smart card based solution for Targeted Public Distribution Management System.

Bilcare Research and Development activities have remained focused on innovative research solutions in both packaging materials and its application to pharmaceutical formulations and this continues to be our key growth factor. This has led to substantial growth in the materials business arising from the conversion of conventional packaging to more attractive and value added packaging solutions. The novel Bilcare Optima service continues to generate newer alliances with global pharmaceutical companies in not only the developing regions but also the developed regions of the world resulting from the hugely successful outcomes of the innovative and completely accurate fast- track study results. These Research initiatives has enabled Bilcare not only to continue generate future growth opportunities to keep the company ahead of its global contemporary organizations but also gainfully leverage the special relation with pharmaceutical industry across the globe and continue accomplishing robust and sustainable business growth. Bilcare also devoted significant time and resources on doing application research initiatives on our path-breaking ncID™ technology to enable create novel solutions which had immense value for not only the pharmaceutical sectors but also in several key e-governance initiatives of our country. Successful completion of development projects in the ncID™ technology domain has resulted in significantly enhanced confidence levels of pharma customers across the globe that now see Bilcare as a complete solution provider. The development initiatives in ncID™ technology also has resulted in significant interests from the government sector for use of the ncID™ technology solution in addressing the key challenges in securitization of critical e-governance projects.

Benefits derived from R & D

- Venus Protect, Bilcare Printed Venus Protect submitted to the customer for trial purpose and it is under study which can give the customer anti counterfeit solution for highly sensitive formulation.

- Bilcare developed Suppository laminate is successfully running on the machine in Asia-Pacific region. This kind of development is considered as the first film development out of Europe that runs smoothly on special kind of thermoformed, fill and seal machine for suppository applications

- Bilcare developed printed PVdC composite helped the pharmaceutical customer for the brand identity in the market for the non sensitive to high sensitive products.

- Bilcare developed high barrier PVdC complexes are economical as compare

to the existing complexes which are using for the highly sensitive formulation.

- Bilcare developed laminates which are Surlyn based benefits the customer to pack their temperature sensitive formulations at lower temperature.

- Developed new anti-counterfeit concept for the pharma and non-pharma sector for establishing distinct brand identity.

- Development of unique and complex print features for confectionary business on their demand proves the first in its kind in the world with the help of Flexographic printing techniques and we as Bilcare are proud with this remarkable development.

- Aluminum/PVC based CR foils has been approved by European Regulatory authority for pharmaceutical use.

- Successful completion of the design and development activities on the ncID technology solution for CSIR - NMITLI project has now taken the project into the last phase of field deployment.

- The secured track and trace cum authentication management system developed has been commercially deployed for use in the tertiary and secondary product packages by 7 pharmaceutical manufacturers who are manufacturing pharmaceutical products for exports.

- Based on the developed solution, the Department of Fertilizers, Ministry of Chemicals & Fertilizers, Government of India awarded a pilot project to Telecommunications Consultants India Limited (TCIL), a Government of India Enterprise under the Ministry of Communications & IT, Government of India which has been successfully completed and a detailed project completion report has been submitted to the Department of Fertilizers by TCIL.

- Based on the developed solution, a commercial pilot project was awarded to Bilcare by the National Jute Board (NJB) and the Directorate General of Supplies and Disposals (DGS&D), Ministry of Commerce and Industries, Government of India which has been successfully completed and a detailed project completion report has been submitted which has been acknowledged and accepted by NJB & DGS&D.

- Based on the developed solution, a detailed techno-commercial proposal has been submitted by Telecommunications Consultants India Limited (TCIL), a Government of India Enterprise under the Ministry of Communications & IT, Government of India to the Ministry of Commerce and Industries, Government of India for being the Nodal agency to Build & Operate Secured Exported Drugs Traceability & Authentication System for Drugs Manufactured in and Exported from India.

- Telecommunications Consultants India Limited (TCIL), a Government of India Enterprise under the Ministry of Communications & IT, Government of India has submitted a detailed techno- commercial proposal to the Department of Rural Development, Ministry of Rural Development, Government of India on

" Local Authentication based NREGA Management Solution using ncID™ Technology" for ensuring non-disruption of Activities in areas / regions with Poor and or No Network Connectivity

- Delhi Police has initiated the execution of the Duty planning management system proposed by Bilcare.

- Bilcare is working with Centre for Development of Advanced Computing (C-DAC), an autonomous scientific society of Department of Information Technology, Ministry of Communications & Information Technology, Government of India for development and validation of ncID™ technology based local authentication system. A techno-commercial proposal is being formulated by Telecommunications Consultants India Limited (TCIL), a Government of India Enterprise under the Ministry of Communications & IT, Government of India for the Government of Arunachal Pradesh on nonClonableID™ Technology for Secured Smart card based solution for Targeted Public Distribution Management System.

Future plan of action

Bilcare will continue to focus on R&D initiatives in providing innovative packaging solutions and the nonClonableID™technology solution for secured identity, authenticity and track and trace of pharmaceutical products to the global pharmaceutical industry. The significant interest evinced by a host of government agencies in the use of the nonClonableID™ technology for securitization of various e-governance projects will drive continued application based research initiatives on customized adaptation of nonClonableID™ technology solution.

Expenditure on R & D

Rs. Crores

Capital -

Recurring 14.89

Total 14.89

R & D Expenditure as a percentage 2.05% of Total Turnover

On a consolidated basis, total R&D expenditure as a percentage of consolidated turnover is 1.05%.

Conservation of Energy and Technology

Energy being a key component in the cost of the product every effort was made to reduce the losses incurred. The major contributor for the reduction in the energy cost is maintaining the power factor to unity. The consistent effort in this category contributed to a saving of 6.6 % amounting to Rs. 0.31 crores per annum of the annual bill value in FY 2013.

In the third quarter of FY 2013, a pilot project was initiated by installing an energy saving device called the articmaster in the air conditioning unit of the Flexo printing plant. This articmaster device has resulted in saving of 10% of electrical units consumed by the Flexo plant air conditioning system.

In the financial year 2013-14 -

1. We intend to install the Regenerative Thermal Oxidizer (RTO) which helps the eco system in great way. The basic concept is to oxidize or burn the volatile organic compound vapours (VOC) at high temp by secondary burning system (which provides burning heat to VOC). In this way the calorific value of VOC is utilized & no fumes are left in exhaust of various processes machines. We intend to utilize this heat from oxidizer for preheating of thermic fluid heater, which will reduce the fuel consumption.

2. We intend to replace the fuel being used in the new thermic fluid heater from Light Diesel oil (LDO) to Furnace Oil (FO). This change will save us Rs. 50 lacs for the year and will be effective from Sept 2013.

Technology Absorption, Adaptation and Innovation

Bilcare continues to invest on R&D activities and effectively utilize its investments made on creation of research sites resulting in successful addition of newer products, processes services and technologies to its innovation portfolio.

During the financial year, Bilcare filed 24 Patent applications related to its innovative products and technologies and were granted 3 Patents.

Benefits derived as a result of the R&D efforts not only comprise newer innovative products and technologies but also has yielded significant improvement in existing products and realization of cost reduction measures in the manufacturing processes.

Some of the key accomplishments leading to successful absorption and adaptation of technologies include:

1. Trials for the non-uniform embossed pattern on alu-alu substrates, was successfully completed and also incorporated with printing. This makes it extremely difficult to reproduce and therefore useful as an effective anti-counterfeit solution for brand protection.

2. New Process has been developed for making Aclar based laminates in-house which results in delivering the products to the domestic customer in time and saving the cost in logistics.

3. Innovative PVdC based laminates for the highly sensitive formulations have been developed.

4. Unique printing pattern on PVdC substrate has been successfully developed and commercialized for the packaging of highly sensitive formulations requiring distinctive brand identity.

5. Developed and commercialized paper based extrusion laminates having surlyn as sealant layer to pack temperature sensitive liquid as well as solid dosage formulations at lower temperature.

6. Trials for development have been successfully conducted for creation of unique complexes based on co-extrusion process to pack contraceptives for healthcare segment.

7. Trails for development have been successfully conducted for commercialization of various complexes with unique printing features for meeting the requirement of the confectionary sector.

8. Commercialized image embedded films in transparent color as effective anti- counterfeit feature for packaging of multivitamins.

9. Developed various aluminum foil based complexes to pack ORS with the help of special adhesive system which can give good protection during shelf life of the product.

10. Developed a new, robust Bilcare Protect-L with the help of special adhesive and process..

11. Developed a new analytical method for analysis of packaging materials which can enable establish conformity to compliances of the packaging material to regulatory requirements.

12. Developed and commercialized unique aclar based composites with EVOH as sandwich structure to enhance oxygen barrier of composites along with the moisture barrier.

13. Successfully commercialized the unique complex printing process for polymeric substrates for use in confectionary as well as pharmaceutical segments.

14. Successfully completed development and standardization of incorporation of multiple anti-counterfeiting features in the form of Nano, Micro and 3D images in soft aluminum foil. Product is currently under stability testing. Incorporation of these features will lead to offering unique products which will significantly enhance pharma product security and enabling enhanced patient safety.

15. New Child Resistant foil has been developed in-house with a unique technique and commercialized successfully.

16. Bilcare Protect® is successfully commercialized for highest selling brand with a combination of overt and covert anti-counterfeiting features on the blister film as well as lidding foil.

17. Successfully developed eco-friendly heat seal lacquer for non-pharma applications.

18. The development initiatives on processing of heat seal lacquers has resulted in enhancing the consistency in the quality of lacquer coating on aluminum based products as well as its sealing compatibility with different grades of polymeric materials.

19. Continued development and adaptation of new technologies for the Bilcare Zenith series of products has resulted in significant production process optimization without compromising on quality.

Foreign Exchange Earnings & Outgo

Rs. Crores

Foreign exchange earned 87.50

Foreign exchange outgo 197.30

Directors

Mr. Rajendra Tapadia and Dr. Volker Huelck are retiring by rotation and being eligible offer themselves for re-appointment. Mr. Robin Banerjee resigned as Deputy Managing Director of the Company, with effect from 31 December 2012. The directors placed on record their appreciation for the services and contributions made by Mr. Robin Banerjee during his association with the Company. Dr. Kalyani Gandhi resigned as Director of the Company, with effect from 5 April 2013. The directors placed on record their appreciation for the services and contributions made by Dr. Kalyani Gandhi during her association with the Company.

Directors'' Responsibility Statement

Pursuant to the requirement under the Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that :

i. In the preparation of the annual accounts for the year ended 31 March 2013, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed along with proper explanations relating to material departures, if any.

ii. The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The accounts for the financial year ended 31 March 2013 have been prepared on a ''going concern'' basis.

Corporate Governance

A report on Corporate Governance is given in this Annual Report.

Auditors

M/s. R. L. Rathi & Co., Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment.

In respect of the Emphasis of Matter by the Auditors in their report, it has been explained in the Notes forming part of said Financial Statements which are self- explanatory and therefore do not call for any further comments.

COST AUDITORS

The Compliance Report under The Companies (Cost Accounting Records) Rules, 2011 for the year 2012 was duly filed with the Ministry of Corporate Affairs on 24 December 2012.

The Central Government had approved appointment of M/s. Parkhi Limaye & Co., Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2013. The Cost Audit Report for the year 2013 is due for filing with the Ministry of Corporate Affairs on 27 September 2013.

Your Company has re-appointed them as Cost Auditors of the Company for the year 2013-14.

Statutory Disclosures

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company.

Particulars regarding technology absorption, conservation of energy and foreign exchange earning and outgo required under section 217 (1) (e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 have been given in the preceding paras.

For the FY 2013, the compliance report is provided in the Corporate Governance section of this Annual Report. The Auditors'' Certificate on compliance with the mandatory recommendations of the committee is annexed to this report.

Acknowledgement

We thank our domestic and international customers, vendors, investors, banking community, investment bankers, rating agencies and stock exchanges for their continued support during the year.

We place on record our appreciation of the contribution made by the employees at all levels worldwide. Our consistent growth was made possible by their hard work, solidarity, commitment and unstinted efforts.

We thank the Governments of various countries where we have our operations and also thank Government of India and other government agencies for their positive co-operation and look forward to their continued support in future. Finally, we wish to express our gratitude to the members and shareholders for their trust and support.



For and on behalf of the Board of Directors

Mohan H. Bhandari

Chairman and Managing Director

Place: Pune

Date : 28 May 2013

 
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