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Directors Report of Bilcare Ltd.

Mar 31, 2016

To the Members,

The Directors are pleased to present the 29th Annual Report and the Audited Statements of Account for the year ended 31 March 2016.

Performance of the Company

The Company''s financial performance, for the year ended 31 March 2016 is summarized below:

INR in Crs

2015-16

2014-15

Sales and Other Income

257.45

335.60

Profit / (Loss) before tax

(175.46)

(212.07)

Profit / (Loss) after tax

(147.87)

(183.68)

Balance in profit & loss account

(133.69)

14.19

State of Company''s Affairs

Please refer Management Discussion & Analysis dealing with the State of Company''s Affairs, at length.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is 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 2016, the consolidated revenue stood at INR 2,603 Crs against INR 2,737.88 Crs of previous year.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 is annexed herewith as Annexure "A" to this report.

Number of Meetings of the Board

During the Financial Year 2015-16, Six (6) Board Meetings were held, details of which are given in the Corporate Governance Report section.

Directors'' Responsibility Statement

Pursuant to the requirement under the Section 134(5) of the Companies Act 2013, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

a. in the preparation of the annual accounts for the financial year ended

31 March 2016, the applicable accounting standards had been followed and there are no material deviations from the same;

b. the directors had 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 Company as at 31 March 2016 and of the loss of the Company for the year ended on that date;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the accounts for the financial year ended 31 March 2016 have been prepared on a ''going concern'' basis;

e. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

f. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

Particulars of Loans, Guarantees and Investments under section 186 of the Companies Act, 2013

Particulars of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans/guarantees are primarily granted for the furtherance of business of the borrowing companies.

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transactions entered by the Company with related parties were in the ordinary course of business and on an arm''s length basis. Such transactions form part of the notes to the financial statements provided in this Annual Report.

During the year, the Company has not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at www.bilcare.com.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of such transactions are provided in Form AOC-2 which is annexed herewith as Annexure "B" to this report.

Dividend

In the absence of profits, the Directors are not recommending any Dividend for the financial year ended 31 March 2016.

Share Capital

The paid-up Equity Share Capital as on 31 March 2016 stood at INR 235,452,310. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31 March 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

Material Changes and Commitments, if any, affecting the financial position of the Company

No material changes and commitments affecting the financial position of the Company have occurred from the end of the financial year 2015-16 till the date of this report. Further there was no change in the nature of business of the Company.

Conservation of Energy, Technology Absorption and Foreign exchange earnings & outgo

A. Conservation of Energy

i. Steps taken for Conservation of Energy:

- The effort to maintain the electrical power factor to unity was sustained and this has resulted in savings of Rs.39.90 lacs per annum (Apr 15-Mar 16).

- Optimization of 105TR and 100TR chilling system and using cooling towers instead of chillers during the winter season has given a saving of Rs.4.80 Lacs and Rs.8.00 Lacs respectively in terms of electricity consumption.

ii. The Capital investment on energy conservation equipment:

No major investment was made during this financial year.

B. Technology Absorption, Adaptation and Innovation

Bilcare''s R&D activities are ongoing and some of the 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 as under:

- Developed and established overt UV ink with reverse printing anti-counterfeit features in Alu-Alu product

- Developed suppository film locally and ran successfully on the imported machine at one of the customers. Commercial order received for the same.

- Developed packaging film supplied for the stability study of the opthalmic tablet for one of the reputed customers.

- Developed process for Bilcare patina using state of the art duplex lamination machine which is installed recently.

- Developed process of making Paper/Foil lamination and then heat seal lacquer coating in one pass on state of the art triplex machine.

Benefits derived:

- Improved version of Bilcare Armour having cost effective solution and properties are

comparable, with conventionally available and expensive material.

- Developed and commercialized solvent based offline primer system for PVDC coating which results in sparing the additional free capacity for PVDC coating machine without compromising the quality.

During the financial year, the company filed 2 new Patent applications related to its innovative products and technologies and 1 Patent applied earlier was granted.

Expenditure on Research & Development

Particulars

Rs.in Crores

Capital

—

Recurring

1.34

Total

1.34

R&D expenditure as a percentage of total turnover

0.52%

On a consolidated basis total R&D expenditure as a percentage of consolidated turnover is 0.05%

C. Foreign Exchange Earnings & Outgo

Rs.in Crores

Foreign exchange earned

108.50

Foreign exchange outgo

144.64

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility and Governance Committee (CSR &G Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy), which has been approved by the Board.

The CSR Policy may be accessed on the Company''s website at the link: www.bilcare.com. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.

The Annual Report on CSR activities is annexed herewith marked as Annexure "C".

Audit Committee

The audit committee comprises of Mr. Avinash S. Joshi (Chairman), Mr. Rajendra B. Tapadia, Mr. Mohan H. Bhandari as members. All the recommendations made by the committee were accepted by the Board.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. Performance evaluation has been carried out as per the Nomination and Remuneration Policy.

Independent Directors'' Meeting

In accordance with the provisions of Schedule IV (Code for Independent Directors) of the Companies Act, 2013 and SEBI Listing Regulations, a meeting of the Independent Directors of the Company was held on 5 February 2016, without the attendance of Non Independent Directors and Members of the Management.

Details of Directors & Key Managerial Personnel

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 subsection (6) of Section 149 of the Companies Act, 2013 and under SEBI Listing Regulations.

As required under SEBI Listing Regulations, the information on the particulars of Directors proposed for appointment/re-appointment has been given in the Report on Corporate Governance.

Information about Subsidiary/JV/ Associate Company

During the year, two new wholly owned subsidiaries were formed viz. Bilcare GCS Limited, UK, Bilcare GCS Inc., USA. Bilcare Singapore Pte. Ltd. (BSPL) has been under judicial Management appointed by the Court in Singapore. The Judicial Managers formulated the Scheme of Arrangement with the BSPL creditors, by which there was an asset & business sale of BSPL and the amount received as consideration for such sale was distributed among creditors of BSPL.

As a part of this Scheme of Arrangement, all step-down subsidiaries of BSPL were transferred to Bilcare Packaging Limited, on September 2, 2015 for a consideration of SGD 1 each. Subsequently during the year these subsidiaries were closed and Bilcare Technologies Singapore Pte. Ltd. (BSTPL) was transferred to Bilcare Limited for a sale consideration of SGD 1 to become a directly owned subsidiary of Bilcare Limited.

Consolidated Financial Statements of the Company are inclusive of the results of the said subsidiaries. Further, a statement containing the particulars for each of the subsidiaries is also enclosed. Copies of annual accounts and related information of all the subsidiaries can also be sought by any member of the Company or its subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company. The annual accounts of the subsidiary companies are also available for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Company has Six (6) wholly owned subsidiaries viz. Bilcare Mauritius Ltd., Mauritius, Bilcare Packaging Limited, Mauritius, Bilcare Singapore Pte. Ltd., Singapore, Bilcare Technologies Singapore Pte. Ltd., Singapore, Bilcare GCS Limited, UK and Bilcare GCS Inc., USA. Some of these subsidiaries in turn have their respective step down subsidiaries.

A statement containing the salient features of the financial statement of the subsidiaries in the prescribed format AOC-1 is presented in a separate section forming part of the financial statement. The Policy for determining ''Material'' subsidiaries has been displayed on the Company''s website at www.bilcare.com.

Deposits

Given below are the details of deposits, covered under Chapter V of the Companies Act, 2013:

i. Deposits accepted during the year: Nil

ii. Deposits remaining unpaid or unclaimed as at the end of the year: Rs.41,30,000/-

iii. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: The Company has obtained an order from the Honourable Company Law Board (CLB) for making payments on a deferred schedule. Hence there are no defaults in the deposits as stated below:

a. At the beginning of the year: Nil

b. Maximum during the year: Nil

c. At the end of the year: Nil

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Vigil Mechanism

The Company has in place Whistle Blower Policy, wherein the Employees/ Directors/ Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company''s Code of Conduct. This mechanism provides safeguards against victimization of Employees, who report under the said mechanism. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy may be accessed on the Company''s website at www.bilcare.com

Corporate Governance

A report on Corporate Governance is given in this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

Auditors

Internal Auditors

The Internal Auditors, M/s. V.S. Rawat & Co.,

Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by Statutory Auditors and the Audit Committee.

Statutory Auditors

At the Annual General Meeting held on 30 September 2014, M/s. R. L. Rathi & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. R. L. Rathi & Co., Chartered Accountants as Statutory Auditors of the Company, will be placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if their appointment if ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

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.

Cost Auditors

The Cost Audit Report under The Companies (Cost Audit Report) Rules, 2011 for the year 2014-15 was duly filed with the Ministry of Corporate Affairs on 27 October 2015.

Secretarial Auditor

The Board has appointed M/s. Shekhar Ghatpande & Co, Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31 March 2016 is annexed herewith marked as Annexure "D" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Particulars of Employees & Related Disclosures

In terms of the provisions of Section 197(12) of the Companies Act (herein referred as Act), read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of the Annual Report.

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of the Annual Report. However, as per the provisions of Section 136(1) of the Act, the Report and Accounts are being sent to the members, excluding the aforesaid information. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company during working hours up to the date of the Annual General Meeting.

For the financial year ended 31 March 2016, 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.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

3. Neither the Managing Director nor the Whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act 2013

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace.

Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgement

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

Your Directors also wish to place on record their deep sense of appreciation for the committed services of the employees at all levels worldwide.

We thank the Governments of various countries where we have our operations and also thank Central Government, various State Governments 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 & Managing Director

Pune: 30 May 2016


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


Mar 31, 2012

We are pleased to present the report on our business and operations for the financial year ended 31 March 2012.

Financials

The Company on a stand alone basis has achieved a turnover growth of over 14% vis-a-vis previous year.

Rs. Crores

2011-12 2010-11

Sales and Other Income 758.86 662.90

Profit before tax 113.19 125.85

Profit after tax 74.75 87.04

Profit available for 332.30 340.76 appropriation

General Reserve 10.00 15.00

Dividend 4.71 7.06

Dividend Tax 0.76 1.15

Debenture Redemption -- 60.00 Reserve

Balance in profit & loss 316.83 257.55 account

Dividend

We recommend a Dividend of 20% i.e. Rs. 2/- per equity share of Rs. 10/- each for the financial year ended 31 March 2012.

Fixed Deposit

Pursuant to the provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, proposal for inviting deposits from public was approved.

As on 31 March 2012, the Company has no overdue deposits other than the unclaimed deposits of Rs. 12.89 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 2012, the consolidated turnover of Rs. 3,649.43 Crores, was higher by 57% over the previous year's turnover of Rs. 2,325.57 Crores.

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 two wholly owned subsidiary companies, namely Bilcare Singapore Pte. Ltd., Singapore and Bilcare Mauritius Ltd., Mauritius. These in turn have their respective step down subsidiaries. The Company also has a 50% joint venture in International Labs, LLC, US.

Research & Development

Bilcare believes and recognizes its research initiatives to be the core and essential part of the integrated healthcare system. Bilcare's quality policy epitomizes, "excelling through continuous research". Bilcare is constantly on the strive to provide end-to-end solutions more innovatively, effectively and efficiently to the global pharmaceutical sector resulting in an ideal environment for creating unique products & services, brand growth and brand management technologies.

The continual effort to discover new knowledge that redefines excellence in healthcare industry has led to a series of core as well as specific research development programs and some of these highlighted below exemplify the sustained progress accomplished till date:- - Introduction of packaging solutions for Active Pharmaceutical Ingredients (APIs')

- Development of various innovative test methods for assuring quality of packaging materials

- Development of innovative packaging materials for example, Bilcare Protect® & Bilcare Secure® in different colors, Nova® –SL, Nova® – M P, embedded image aluminum, special effect PVC substrates.

- Creating multi colour options in metallized films.

- Bilcare Crispak® registered for senior citizen friendly package design and approved by UK testing agencies for child resistant compliance.

- Primer system for printing on Aluminium substrate using UV curable inks.

- Identification, design and evaluation of optimum packaging for various pharmaceutical formulations.

These are some of the representative examples of the many achievements of Bilcare researchers in the last few years. All the innovative films & foils developed in house and introduced to the global market have received US, European and Canadian DMF registrations. They reflect the diversity, depth and quality of our research and serve as measures of our success. It also helps us chart our future direction by using new knowledge to address new challenges.

Bilcare understandably takes tremendous pride in the research enterprise that has made notable contributions in the healthcare space. Although research by its definition is never complete, we view our achievements as marks of progress. In doing so, however the true importance of the research achievements lies in successfully applying its outcomes to the benefit of the global pharmaceutical industry. Each new insight fortifies our efforts to find new and better ways to care for the pharmaceutical and the healthcare industry.

Bilcare R & D is about the pursuit of new knowledge, about innovative research solutions in both packaging materials and its application to pharmaceutical formulations which continues to be our key growth factor. This year also R&D has signed several business agreements with global pharmaceutical customers for providing customized scientific solutions for addressing key challenges of their valuable brands. Successful completion of projects and solution deployment has resulted in significantly enhanced confidence levels of customers across the globe who see Bilcare as a complete solution provider. This has also led to substantial growth in the materials business arising from the conversion of conventional packaging to more attractive and value added packaging solutions

The Bilcare Optima® service introduced for pharmaceutical formulation sensitivity profiling along with the advanced CAD and FEA based simulation processing for designing of primary packaging for dosage forms has gained tremendous customer interest across the globe resulting in increased number of customers signing for this novel service. The new developments at Bilcare has helped pharmaceutical industry in keeping their brands relevant, vibrant and valuable. These new developments from R&D continue to generate future growth opportunities to keep the company ahead of its global contemporary organizations. The technical collaborations of our R&D with global pharmaceutical leaders and packaging research organizations has benefited the pharmaceutical industry immensely in new product registrations, exports to developed markets and for countering the copycats and counterfeiters. Bilcare will leverage this special relation with pharmaceutical industry across the globe to accomplish continued robust business growth.

Benefits derived from R & D

- One of the CR foils has been approved by European Regulatory authority for pharmaceutical use.

- Successful implementation of Bilcare Protect film for major Indian and Overseas pharma clients helped them to increase their revenues by adding a combination of Overt and Covert anti counter fiet features.

- Commercialised Bilcare Protect® film in different colours has aided the pharmaceutical industry as an effective anti-counterfeit solution and has enabled them to significantly enhance their brand integrity and value.

- Bilcare Optima® research service successfully extended to Pesticide sector and used by a leading brand in India.

- Developed and commercialized special effect film for pharma sector as an economical, overt anti counterfeit solution, resulting in a significant value addition for this range of products.

- Deployment of easy peelable paper based liding foil for overseas markets.

- Deployment of PVC based lidding foil for Indian pharma sector, this composite attracts not only sizable business to Bilcare but also provides indigenous CR foil concept.

- Commercially established two different paper based composite CR lidding films for domestic market.

- Commercialized Super Nova as lidding material for US market.

- Modified existing manufacturing processes of some products to reduce overall production cost.

- Established cost effective alternatives for replacing existing adhesives & lacquers and raw materials.

- Pharmaceutical Exports Promotion Council conferred Silver Patent Award for FY 2010-11.

Future plan of action

Billcare will continue to focus on R&D initiatives in providing innovative packaging solutions to the global pharmaceutical industry.

Expenditure on R & D

Rs. Crores

Capital 1.54

Recurring 17.20

Total 18.74

R & D Expenditure as a 2.47% percentage of Total Turnover

On a consolidated basis, total R&D expenditure as a percentage of consolidated turnover is 1.28%

Conservation of Energy and Technology

Improved energy efficiency is one of the cheapest, fastest and most sustainable ways to save the world's environment. Energy storage is a key component in many energy efficient systems. Energy storages can be described by their storage capacity (stored energy per mass or volume), power (energy output per time), storage period (how long the energy should be stored) and size.

Some of the key initiatives along with the benefits derived during this year were- - The power factor was consistently maintained at unity which has contributed to a saving of 6.83% amounting to Rs. 0.26 crores per annum of the total bill value.

- After the successful commissioning of the express feeder electricity power line, the usage of DG power reduced remarkably from 27% to 6% which has resulted in savings of Rs. 1.5 crores.

- The replacement of Light Diesel Oil (LDO) by Bio-Diesel, an environmental friendly fuel which is used in heating systems, has resulted in savings of Rs. 0.11 crores in the third and fourth quarter.

The energy audit was conducted and as per the auditors' observations, there is a good potential for savings in energy cost once the suggestions are implemented.

Technology Absorption, Adaptation and Innovation

Bilcare continues to invest on R&D and a large part of the spend is for innovative products and technologies for global market that are complex and require dedicated manufacturing sites. Investments have been made in creating research sites, employing scientifically skilled manpower, adding equipment and upgrading continuously the exposure and research understanding of the scientific team in the areas of our interest.

Bilcare filed 17 Patent applications related to its innovative products and technologies during the year and was granted 6 Patents.

Benefits derived as a result of the aforementioned efforts are product improvement, cost reduction and product development. Training the employees in various technical and management development programmes conducted by various agencies helped in, Shop-floor practices improvement resulting in greater customer satisfaction and loyalty. The following are the areas where Bilcare has successfully absorbed, adapted technologies as well as led to technology innovations:

1. Trials for the technique developed to apply non uniform embossed pattern on aluminum based substrates, was successfully completed at customer end and is under stability study for commercialization. This makes it extremely difficult to reproduce fake material which in turn significantly enhances the security of various pharma brands.

2. On completion of standardization of incorporation of multiple anti counterfeiting features in the form of Nano, Micro and 3D images in soft aluminum foil, the product is now under stability study. Incorporation of these features leads to offering unique products which significantly enhances pharma product security resulting in an overall patient safety.

3. Child Resistant foils has been developed in-house with a unique technique and commercialized successfully.

4. Bilcare Protect® is successfully commercialized for highest selling brand of Sanofi Aventis, India with an overt and covert anti-counterfeiting feature on the film as well as on the lidding foil.

5. Development of eco-friendly heat seal lacquer for non Pharma applications.

6. The research and development initiatives on processing of heat seal lacquers has resulted in enhancing the consistency in the quality of the aluminum based products and its compatibility with different grades of polymeric materials.

7. Continued development and adaptation of new technologies for the Bilcare Zenith series of products has resulted in production process optimization leading to enhanced productivity without compromising on quality.

Directors

Dr. Kalyani Gandhi, Dr. R.V. Chaudhari and Dr. Praful R. Naik are retiring by rotation and being eligible offer themselves for re-appointment. Dr. Bhojraj Suresh resigned as Director of the company.with effect from 03 July 2012. The directors placed on record their appreciation for the services and contributions made by Dr. Bhojraj Suresh during his 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 2012, 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 2012 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.

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 fiscal year 2012, 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 : 12 July 2012


Mar 31, 2011

To the Members

We are pleased to present the report on our business and operations for the financial year ended 31st March, 2011.

Financials

The Company on a stand alone basis has achieved a turnover growth of over 19.8% vis-a-vis previous year.

Rs. Crores

2010-11 2009-10

Sales and Other Income 662.90 564.40

Profit before tax 125.85 112.89

Profit after tax 87.04 75.47

Profit available for 340.76 275.32 appropriation

General Reserve 15.00 15.00

Dividend 7.06 5.67

Dividend Tax 1.15 0.94

Debenture Redemption 60.00 — Reserve

Balance in profit & loss 257.55 253.71 account

Dividend

We recommend a Dividend of 30% i.e. Rs.3.00 per equity share of Rs.10/- each for the financial year ended 31st March, 2011.

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 31st March 2011, the consolidated turnover of Rs.2,286.58 Crores, was higher by 118% over the previous year's turnover of Rs. 1,047.83 Crores. The consolidated net profit after tax went up to Rs.149.46 Crores for 2010-11 from Rs. 116.95 Crores in the 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 two wholly owned subsidiary companies, namely Bilcare Singapore Pte. Ltd., Singapore and Bilcare Mauritius Ltd., Mauritius. These in turn have their respective step down subsidiaries.

The Company has a 50% joint venture in International Labs, LLC, US.

Research & Development

Bilcare Research and Development department is growing on a concrete platform of new technologies & modern approaches and has been working relentlessly in providing end to end solutions for the global pharmaceutical sector across its entire value chain through its unique products, services and brand management technologies.

Over the year Research & Development scientists have successfully developed and commercialized packaging development methods for stabilizing Active Pharmaceutical Ingredients and transdermal patches. This year R&D expertise have successfully introduced packaging solutions for packing Active Pharmaceutical Ingredients (API) and these solutions may be useful to entire API industry across the globe. R&D scientists have successfully developed and validated various test methods for assuring quality of the packaging materials.

This year our innovative research services in both packaging materials and pharmaceutical formulations continue to be a key growth driver. This year R&D has signed substantial business agreements with global pharmaceutical customers for providing customized scientific solutions for addressing key challenges of their valuable brands. This enables to generate sizeable revenue and also helps to increase the material business by converting conventional packaging to more economical and attractive packaging. These services have increased the comfort levels of the pharmaceutical industry across the globe with Bilcare. The newly introduced packaging sensitivity profiling service is gaining customer interest across the globe. This year BilcareOptima® study is extended for identifying optimum packaging requirement of Non-Pharma products. This year R&D expertise has successfully implemented advanced CAD and FEA based simulation processes for optimizing design of primary packaging, change part of thermoforming machines and process parameters.

Bilcare R&D is continuously evolving to meet new challenges and demands of global pharmaceutical and healthcare industry. The depth and breath of our technological and scientific expertise, continuous interaction with the global pharmaceutical industry on scientific aspects of packaging brings forth innovative ideas and enabled us to develop commercially viable new packaging materials, Bilcare Protect® in different colours, Bilcare Alpro, Nova® –HL, Nova® – M P, Bilcare Optra®, Bilcare Petra® and Bilcare Astra®. This development helps pharmaceutical industry for keeping their brands relevant, vibrant and valuable. These new development from R&D continue to generate future growth opportunities to keep the company ahead of its global contemporary organizations of this field.

This year R&D has made technical collaborations with global pharmaceutical formulation development centers and packaging research organizations which also enables them to discover and develop path breaking packaging technology for pharmaceutical industry across the globe. This technical collaborations on packaging has benefited the pharmaceutical industry immensely for new product registrations, export to regulatory markets, and for countering the copycats and counterfeiters. Bilcare will leverage this special relation with pharmaceutical industry across the globe to increase its business.

This year was a very fruitful year for R&D for its commercial success. Major Pharma brands got a new redefined look in R&D developed packaging concepts which helped Pharma industry to overcome counterfeiting problems and had a major impact in increasing their sales. All the innovative films & foils developed in house and introduced to the global market have received US & European and Canadian DMF registration, a major break through achievement for R&D. A new innovative process of creating multi colour options in metallic films has been developed in house for brining innovations in packaging materials, which will multiply the product ranges available for pharmaceutical packaging. Bilcare Crispak® is registered for senior friendly package design and approved by UK testing agencies for child resistant compliance. R&D has developed primer system for printing on Aluminium substrate using UV curable ink.

Some of the key R&D initiatives during the year were:

- Development of extended BilcareOptima® program for Non-Pharma products.

- Develop Bilcare Protect® film in different colours; this development will aid the pharmaceutical industry in significantly enhancing their brand integrity, value and solution for counterfeit.

- Develop various paper/aluminum/film based laminate structures for pharmaceutical/non pharma sector.

- Get approval for all existing CR foils from global regulatory authority for pharmaceutical use.

- Enhancing the quality features of existing CR foils for process excellence.

- Incorporate unique anti counterfeit features in Aluminium foil based packaging materials.

- Development of novel packaging materials with improved barrier properties and smart functionalities like thermo chromic, photo chromic and glow in dark features.

- Unique test methods developed for formability analysis of Alu Alu composite packaging by Erichsen cupping test.

- Design and development of a device for measurement of dead-fold characterization of paper and film laminates.

- Develop study protocol for material characterization of adhesive backed labels and extraction method of extractable items in packaging materials.

- Develop specialized CAD and FEA based simulation program for optimizing design of primary packaging, change part of thermoforming machines and process parameters.

- Development of eco-friendly lidding pharmaceutical packaging materials.

- Design and development of hardness testing instrument for conducting hardness testing of Trans dermal patches.

- Develop protocol for freeze though study of pharmaceutical formulations.

- Develop low temperature sealing aluminum lidding foils.

- Develop study protocol for performing stability study of UV ink printed aluminum based packaging materials.

- Design & develop coating/lamination process for applying low molecular weight polymeric materials on aluminum based substrates.

Benefits derived from R & D

- Developed and commercialized three & four ply Aluminum foil based laminates for stabilizing highly sensitive pharmaceutical active ingredients and formulations, this creates a significant value addition in this range of products.

- The specialized primer coating process developed for printing UV curable inks on aluminum substrate for nullifying the Ink lifting issue.

- Developed & validated unique testing methods and instruments for conducting the sensitivity studies of pharmaceutical formulations and packaging materials.

- Developed & commercialized paper based ecofriendly packaging materials like Bilcare Nova® –HL & Bilcare Nova®-MP for replacement to existing Aluminium foil for non sensitive pharmaceutical formulations.

- Developed and commercialized embedded image technology for aluminium based materials which can provide solution for counterfeiting without significant increase on the packaging cost.

- Incorporated special features in Bilcare Alpro for anti-counterfeit solution.

- Developed ecofriendly packaging materials like Bilcare Optra®, Bilcare Petra® and Bilcare Astralia, that can be used as an alternative for PVC in future.

- Modified existing manufacturing processes of some products helps to reduce overall production cost.

- Bilcare research services helps to increase considerable revenue of the company and also the material business by offering research solutions for converting conventional packaging to more economical and attractive options.

- Established cost effective alternatives for replacing existing adhesives & lacquers and raw materials.

Future plan of action

- Develop & commercialize aluminium based laminates for providing complete barrier protection to highly sensitive types of the pharmaceutical formulations.

- Develop new packaging materials for stabilizing Active Pharmaceutical Ingredients (API's).

- Develop and commercialize special packaging materials for Non Pharma Sector.

- Strategic collaboration with Pharma R&D centers for increased speed and cost competitiveness in new packaging material development.

- Develop web based research & knowledge management on line system.

- Continue to strengthen R&D capabilities in the area of formulation development, stability studies and packaging material development.

- Develop novel packaging materials with improved oxygen and moisture barrier properties with smart functionalities.

Expenditure on R & D

Rs. Crores

Capital 8.16

Recurring 18.12

Total 26.28

R & D Expenditure as a 3.96% percentage of Total Turnover

On a consolidated basis, total R&D expenditure as a percentage of consolidated turnover is 2.47%

Conservation of Energy and Technology

In conjunction with the ongoing process of Energy Conservation & efficient Utilization of the resources the power factor was consistently maintained at unity which has contributed to a saving of 7% (Rs. 0.18 Crores per annum) of the total bill value.

There has been a reduction of 8% in the captive power generation due to better load distribution.

The changes incorporated in the aluminum lamination machine have resulted in efficient utilization of energy. The monitoring of compressed air supply and changes incorporated in the air compressor resulted in 4% reduction in the consumption of energy at Utility division.

The uninterrupted power supply through express feeder was successfully commissioned at the end of the financial year.

Additional investments and proposals for the further reduction of consumption of energy have been planned. They include:

a) An external agency has been appointed to conduct an energy audit in second quarter of the year 2011-12 and the findings of the audit will help us to further reduce the energy consumption and considerable saving.

b) The substitution of LDO by HSD in the heating systems is proposed in the year 2011-12 which will result in saving of Rs. 0.50 Crores per annum.

Technology Absorption, Adaptation and Innovation

Bilcare continues its effort for research in the area of new packaging development & design and innovations in packaging materials. Absorption and adaptation of new ideas and technologies enable us to develop new product, processes and solutions. Bilcare has successfully absorbed, adopted technologies as well as led to technology innovations in the following areas:

1. Techniques developed for applying non uniform embossed pattern on aluminum based substrates, making extremely difficult to reproduce fake material which significantly enhances the securitization of pharma brands.

2. Successfully completion of standardization of incorporation of multiple anti counterfeiting features in the form of nano, micro and 3D images in soft aluminum foil. Incorporation of these features led to generation of a range of proprietary developing technologies for Bilcare and also led our expertise in offering unique products which significantly enhance the product safety resulting in an overall patient security.

3. Techniques for incorporation of complex ghost images in all aluminum foil products. These images are only visible at particular angles with a ghost effect, this is a unique feature for anti- counterfeiting. These techniques make it impossible for a duplicator to produce fake of the genuine product.

4. Development of adaptation of Heat sealable lacquer coating technology on Flexo machine on foil substrate. This development had dual impact wherein this not only helps to increase the production of coated material but also reduce the burden of electricity consumptions.

5. The design and development efforts on special types of over coats which can withstand technologically advanced state of the art Pharma packaging machines.

6. The continual research and development initiatives on processing of heat seal lacquers. This development had dual impact wherein this not only enhances the consistency in the quality of the aluminum based products but also results in compatibility with different grades of polymeric materials.

7. Continual development and adaptation of new technologies enable us to optimize production process for enhancing the productivity without compromising on quality with adequate validation in case of Bilcare Zenith series of products.

Following planned initiatives for implementation are under progress:

1. Development and adaptation of new technologies for developing extremely high barrier thermoforming laminates for pharmaceutical use.

2. Development for adaptation of unique technology for multiple processes in one operation for developing aluminum/aluminum based laminates.

3. Adopt technology for developing tropical packaging materials for pharmaceutical use.

4. Development and adaptation of techniques for incorporating anti counterfeit features in thermo formable packaging materials.

Foreign Exchange Earnings & Outgo

Rs. Crores

Foreign exchange earned 50.39

Foreign exchange outgo 166.55

Directors

Mr. Chandra Prakash Jaggi, Dr. Arthur Carty and Dr. Bhojraj Suresh are retiring by rotation and being eligible offer themselves for re-appointment.

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 31st March, 2011, 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 Directors have prepared the accounts for the financial year ended 31st March 2011 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.

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 fiscal year 2011, 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

Dated : 11th July, 2011


Mar 31, 2010

We are pleased to present the report on our business and operations for the financial year ended 31st March, 2010.

Financials

The Company on a stand alone basis has achieved a turnover growth of over 16.6% vis-a-vis previous year.



Rs. Lacs

2009-10 2008-09

Sales and Other Income 56,440.04 47,631.48

Profit before tax 11,288.55 9,231.78

Profit after tax 7,547.33 6,069.73

Profit available for 27,532.87 21,488.85

appropriation

General Reserve 1,500.00 1,000.00

Dividend 567.20 430.20

Dividend Tax 94.20 73.11

Balance in profit & loss 25,371.47 19,985.54 account



Dividend

We recommend a Dividend of 25% i.e. Rs.2.50 per equity share of Rs.10/- each for the financial year ended 31st March, 2010.

Consolidated Financial Statements

The Consolidated Financial Statements, pursuant to clause 32 of the Listing Agreement and in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India have been 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 31st March 2010, the consolidated turnover of Rs.104,782.59 lacs, was higher by 22.4% over the previous years turnover of Rs. 85,602.48 lacs. The consolidated net profit after tax went up to Rs. 11,694.83 lacs for 2009-10 from Rs. 8,293.53 lacs in the previous year.

Subsidiary Companies

The Company has a subsidiary company overseas - Bilcare Singapore Pte. Ltd., Singapore which in turn has its respective step down subsidiaries.

The Company has received an approval of the Central Government under Section 212(8) of the Companies Act, 1956, which exempts the Company from attaching to the Annual Report, the copies of the Financial Statements and other documents required to be attached under Section 212 (1) of the Act of its subsidiary companies, namely:

i) Bilcare Singapore Pte. Ltd, Singapore; ii) Bilcare GmbH, Germany; iii) Bilcare Inc., USA; iv) Bilcare Farmaceutica Embalagem E

Pesquisas Ltda., Brazil; v) Bilcare (UK) Ltd, UK; vi) Bilcare GCS (Europe) Ltd., UK, a subsidiary of Bilcare (UK) Ltd; vii) Bilcare Switzerland SA, Switzerland;

viii) Bilcare Technologies Singapore Pte. Ltd.;

ix) Bilcare Technologies Italia Srl, a subsidiary of Bilcare Technologies Singapore Pte. Ltd.

Accordingly, the said documents are not being attached to the Financial Statements of the Company. A gist of the financial performance of the subsidiaries is given in this Annual Report. The annual accounts of the subsidiary companies are open for inspection by any Member/ Investor.

The Company is a 50% joint venture partner with MeadWestvaco Corp in International Labs, LLC, US.

Issuance of Global Depository Receipts (GDRs)

Pursuant to the approval received from the shareholders of the Company at the Annual General Meeting held on September 30th, 2009, the Company on 12th January, 2010, allotted 2,986,341 GDRs at USD11.15 per GDR (i.e. Rs.515 per share at the exchange rate of Rs.46.20 per USD and each GDR representing one equity share of Rs.10/- each in the share capital of the Company) to Deutsche Bank Trust Company Americas as the Depository.

Conversion of the Foreign Currency Convertible Bonds (FCCBs)

The Company allotted 2,493,484 Equity Shares of Rs.10/- each upon conversion of 2,635 Foreign Currency Convertible Bonds (FCCBs), as per the terms and conditions of the Offering Circular, at a reset conversion price of Rs.483.28 per share, including premium.

Post allotment of Equity Shares as aforesaid, the Paid-up Equity Share Capital of the Company stood at Rs.226,878,900/- divided into 22,687,890 Equity Shares of Rs. 10/- each.

Research & Development

Bilcares Research and Development activities and initiatives enabled by induction of select new technologies & modern approaches continues to create new products, processes, services and effective brand management technologies.

The process of Intellectual property creation and its protection got significant uplift with the development and operationalization of the “IPRMS” (Intellectual Property Rights Management System), a proprietary software tool enabling the systemization of innovation process. The IPRMS will go a long way in institutionalization of a successful knowledge management process resulting in a sound foundation for secured yet seamless Information flow and access.

In the year 2009-10, Bilcare enriched its IP portfolio by filing 12 new patent applications and 11 Trade marks apart from systemically progressing its earlier patent applications in national phase in designated countries for their grant.

The above fresh patent filings ensured protection of a diverse range of researched and developed Intellectual property spanning across all three business activities, which included innovations in healthcare management system, unique re-closable unit packs, anti-counterfeit printed materials, interactive packaged product authentication and dispensation, embeddedimage™ materials, senior friendly packs, special child resistant blister lidding foils, biodegradable packaging materials and smart, reversible thermo chromic and photo chromic functionality in blister packaging film materials amongst others. These innovations will aid the pharmaceutical industry in significantly enhancing their brand integrity, vibrancy and value and accomplish viable sustained growth.

The robust research and development activities and outcomes contributed significantly in the successful renewal of recognition of the in-house R&D unit upto the year 2015 by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. The Intellectual Property initiatives and achievements by Bilcare were also duly recognized by the Intellectual Property Office of India with the conferring of the coveted Intellectual property award on Bilcare, second time in succession.

Financial Year 2009-10 saw Bilcare R & D dedicate several innovations to the Pharma sector as it launched and successfully commercialized a range of in-house developed innovative and anti-counterfeit packaging materials which included Bilcare ProtectR Bilcare Crispack", Bilcare LamiflexR, Bilcare Silnova and Bilcare MetNova . These unique products will usher in a substantial improvement in medical product safety resulting in an overall better patient security and patient well being.

The year witnessed the successful fructification of established innovations by way of enhanced commercial applications. Several major pharmaceutical brands got a new re-defined look in newly developed innovative packaging solutions, which supported the brand owners to address the challenges of 5 Cs viz., Counterfeit, Compliance, Communication, Convenience and Cost. R & D services including the novel BilcareOptimaR study program also saw increased acceptance across the world specifically in the USA, European and Korean based pharmaceutical industry for stabilizing their formulations. These services also culminated in many cases, extension of business relationship by way of supplies contracts for the established as well as innovative packaging materials.

Scientists continued to create and develop unique testing methods & instruments for conducting sensitivity studies of pharmaceutical formulations in short period. These developments had dual impact wherein they not only help to accelerate drug sensitivity study but also reduce the burden of water and electricity consumptions.

With the ever increasing reservoir of knowledge base at Bilcare, we extended our recognition as value knowledge partners by institutionalizing a systemic knowledge sharing process to effectively bridge the gap. This is steadily transforming Bilcare Research into a “global information hub” for pharmaceutical packaging sciences.

Some of the key R&D initiatives during the year were:

- Design and development of a range of unique re-closable unit package containment systems obliterating need of a protective secondary package and also enabling the fusion of the nonClonableID™ technology.

- Enhancing the nonClonable" technology solution for diverse ID authentication capabilities leading to a basket of unique nonClonableID™ product, process and services.

- Development of a novel product application for clinical research as well as Personalized Healthcare management system on the nonClonableID™ technology platform.

- Development of embeddedimage™ technology for foils.

- New CR cum senior friendly package systems with extended ability for interactive functionality including product dispensation information.

- Enhancement and improvisation of product features of existing new products including development initiatives for continuous Quality and Process excellence.

- Fusion of smart and intelligent ink systems into packaging materials for reversible thermal indications in end use applications.

- Development of a specialized coating material to neutralize the minute surface variation in Aluminum foils to accomplish

universally accepted delta variation in print outcomes.

- Design and development of a Smartsense™ web portal for client access on real-time status of their clinical trial materials.

- Improvisation of productivity with Barrier polymer coatings compatible for high speed.

- Development of extended BilcareOptima program for effervescent formulations and for specialty agro-chemical formulations.

Benefits derived from R & D

- Successful commercialization of a range of additional innovative packaging materials leading to significant enlargement of Bilcares product offerings which in turn enabled a broader range of pharmaceutical formulations to effectively adopt these new innovative packaging materials.

- Recognition by Global Pharma companies, the value of Bilcares Intellectual property and its direct impact on patient safety and well being even in the OTC segment. A few of the patented package designs are under active consideration for global deployment.

- Successful deployment of test methodologies for effervescent as well as specialty agro-chemical formulations leading to the enhanced scope of application of BilcareOptima program.

- New, cost effective alternatives of various lacquer coatings for both flexo and roto-gravure technologies.

- In-house design realizes fabrication and successful use of two more valuable testing tools comprising a moisture sorption analyzer and gas

liberation analyzer. These unique testing apparatus provide accurate and precise evaluation of any product behavior when exposed to different environmental conditions.

- Detailed evaluation of over 100 additional pharmaceutical formulations significantly enriched the knowledge bank of formulation performance and the science of packaging material integration.

- The specialized coating material developed for neutralizing the minute surface variation in Aluminum foil for significantly reducing the delta variation for print outcomes also led to the successful conversion of a two step multi-equipment process to a single equipment using flexo technology and accomplishing 2 color print jobs in a single pass leading to a substantial gain in the productivity and also enhanced Quality outcome.

Future plan of action

- Design and development of additional unique testing tools for enlarging the scope of evaluation of different types and segments of products

- Develop new packaging materials for stabilizing highly sensitive types

of formulations

- Expanding research services activities in different regions of the world.

- Develop and commercialize packaging materials for medical devices.

- Develop new covert and ultra covert measures to broaden the scope of product offerings in the Aluminum segment

- Develop new mechanisms for reading the nonClonableID™ to enhance its flexibility for incorporation into objects of diverse physical shapes and dimensions



Expenditure on R & D Rs. Lacs

Capital 661.97

Recurring 1,640.96

Total 2,302.93

R & D Expenditure as a 4.08%

percentage of Total Turnover



On a consolidated basis, total R&D expenditure as a percentage of consolidated turnover is 4.88%

Conservation of Energy and Technology

In conjunction with the ongoing process of Energy Conservation & Efficient Utilization of the resources, the Company achieved the maintenance of Power Factor to Unity leading to significant savings in the energy bill.

In the backdrop of deteriorating situation of Power Supply from MSEDL with mounting pressure on captive generation, the Company achieved a 15% improvement in Generating Efficiency resulting in higher KWH generated per litre of Diesel.

Usage optimization of the service facilities like compressed air, air handling units & lighting resulted in savings in energy consumption.

The energy efficiency in conversion by using the printing & coating machines to the optimum Overall Equipment Efficiency resulted in efficient utilization of the energy resource.

Some of the key energy saving initiatives for optimization of energy cost implemented during the year were:

i) Improvement of power factor from 0.9 to unity due to installation of new capacitor bank resulted in a discount of 5% of total MSEB bill amount which amounted to annual savings of over Rs. 7 Lacs.

ii) Reduction of compressed air supply pressure from 8 bar to 7 bar resulted in less consumption

of units leading to significant savings on an average of 6000 units per month of the compressor which amounted to an annual savings of Rs. 5 lacs.

iii) Reduction of 10% of lighting units by switching of lights and air conditioners whenever not required.

iv) Conversion of thermopac from LDO to LPG resulting in annual savings of Rs. 10 Lacs

Additional investments and proposals for the further reduction of consumption of energy have been planned. They include:

A consortium of 4 companies including Bilcare have approached the MSEDL for supply of uninterrupted power through express feeder. The sanction of the same from MSEDL has been obtained & the power through the same from Chandoli Sub Station is expected by Q3 of 2010-11. Bilcare will be investing Rs. 40 lacs for the same.

Technology Absorption, Adaptation and Innovation

Innovation pipeline in Bilcare maintained a healthy pace due to the focused thrust on use, absorption and adaptation of new and viable technologies to enable not only the new ideas to be successfully converted into innovations but also enable the rapid improvisation in the existing products, processes and services. This dual model led to considerable valuable development outcomes along with quite a few new line extensions of the existing products, processes and services.

Some of the key Research and Development initiatives that have successfully used, absorbed and adapted technologies as well as led to technology innovations are:

1. A collaborative development approach with producers of coating rollers led to creation of specialized rollers which significantly increased the amount of coating materials transfer by 4 times the capability of the existing rollers in a single pass for the flexo technology. The new rollers were tired and successfully validated for the

set performance criteria. This technology adaptation will result in an incremental productivity outcome in a state of the art and very sensitive manufacturing process.

2. The design and development efforts on micro text printing coupled with special screen effects for the Flexo technology resulted in successful accomplishment of overt and overt-covert features and half tones that tender copying impossible by other print technologies used for Aluminum foil printing. This technology development and adaptation created capabilities for unique print features which were hitherto not possible and ushered a paradigm shift from conventional text printing to consumer discernable features on Aluminum foils used for primary packaging of pharmaceutical solid dosage forms.

3. Techniques for incorporation of complex lenticular images in the design artworks to enable securitization against duplication by mere copy of the design on finished packs were standardized and perfected. These techniques make it impossible for reproduction of a design without the master image artwork making it extremely difficult for a duplicator to produce fakes of the genuine medicines.

4. Adaptation of an online corona treatment device on the lamination plant simplified the process of film treatment and made

it feasible to complete the process of treatment, adhesion and lamination at one go. This not only enhanced the productivity outcome by eliminating downtime and engagement of different equipments but also generated savings in energy consumption.

5. A state of the art Building Management system (BMS) was incorporated in the Global Clinical Supplies facility to facilitate on- line recording, monitoring and controlling of environmental factors. The technology also created a capability to link reports to the Smartsense™ web portal which enabled the Sponsors to get real-time information on storage and processing conditions for their Clinical Trial Materials (CTM).

6. To ensure secured access as well as elimination of potential processing errors, Biometric access system was incorporated in the Global Clinical Supplies facility. The system was adapted to ensure controlled access as per specific manufacturing plans and procedures.

7. Successful completion of standardization of incorporation of invisible print features which are visible under specific wavelengths of UV light as well as invisible forensic markers which are instantly detectable with use of proprietary devices has enabled Bilcare to offer these high end covert and ultra-covert technologies to the Pharmaceutical sector. Incorporation of these technologies led to generation of a range of intellectual property and proprietary processing technologies for Bilcare and also led to our recognition as the leader in providing unique product offerings which significantly enhances the securitization of brands.

8. The continual research and development initiatives on our novel nonClonableID™ security technology resulted in yet another successful innovation of this technology for the Agro-Chemicals sector wherein the specialty product of one of the leading manufacturer, Indofil Chemicals Company is being integrated and securitized with the nonClonableID™. It will effectively securitize the supply chain management and simultaneously enable real-time, anywhere- anytime product authentication.

Following planned intiatives for implimentaion are under progress:

1. Development for adaptation and use of Hidden image technology which can be visualized under specific visualizing screens which will lead into creation of a new level of high end covert technology which will find its place between the existing base level covert and the ultra-covert technologies.

2. Extension of the Embeddedimage™ technology for embedment of images on Aluminum foils leading to creation of distinctive, discernable feature for product identification.

3. Development for adaptation of nonClonableID™ for document security as well as large size consumables.

4. We are working on anti counterfeit features as regards to printing on Lidding & Strip Foils. The same is under trial to give customer a solution of unique basket of overt, covert & ultra covert features.



Foreign Exchange Earnings & Outgo Rs. Lacs

Foreign exchange earned 5,629.79

Foreign exchange outgo 15,810.55



Directors

Mr. Rajendra B. Tapadia, Dr. Volker Huelck and Dr. Kalyani Gandhi are retiring by rotation and being eligible offer themselves for re-appointment.

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:

i) That in the preparation of the accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

ii) That 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) That 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) That the Directors have prepared the accounts for the financial year ended 31st March 2010 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.

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 fiscal year 2010, 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

Dated: 23rd July, 2010

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