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Directors Report of Plethico Pharmaceuticals Ltd.

Mar 31, 2014

Dear Members

The Directors are pleased to present Twenty First Annual Report of the Company together with the audited Accounts for the 15 months period ended 31st March, 2014. The working results of the Company for the 15 months period ended 31st March, 2014 vis-à-vis those of the previous year are summarized below:

Rs. in Million

Particulars CONSOLIDATED STANDALONE Period ended Year ended Period ended Year ended 31st March, 31st December 31st March, 31st December

Sales 20597.99 16315.41 5312.97 4753.15

Other Income 386.34 304.69 373.07 171.01

Sales and Other Income 20984.33 16620.10 5686.04 4924.16

Total Expenditure excluding Interest, 17780.34 14735.71 5037.33 4787.35

depreciation, amortization & tax

Profit before Interest, Depreciation, 3203.99 1884.39 648.71 136.81 Amortization & Tax

Interest (Net) 1593.23 614.32 627.67 499.26

Depreciation and Amortization 642.28 177.30 103.98 83.01

Profit before Tax, Exceptional and 968.48 1092.77 (82.94) (445.47) Extraordinary Item

Exceptional Item 0.00 0.00 0.00 0.00

Extraordinary Item 0.00 0.00 0.00 0.00

Provision for Taxatio (138.38) 77.90 4.38 8.40

Profit After Tax 1106.86 1014.87 (87.32) (78.92)

Change in Financial Year

The Board of Directors of the Company approved change in the financial year of the Company from January-December to April-March effective 24th January, 2014. In view of this, the current financial year is for a period of 15 months i.e. 1st January, 2013 to 31st March, 2014.

Overview

Although there was slight improvement in the global economy in 2012, the challenging business environment and moderation in economic growth did continue in fiscal 2013-14 as well. Although manufacturing and industrial growth remained weak, there were some positive policy responses that alleviated the immediate pressure. The pharmaceutical industry continued to face tough milieu throughout the globe. Emerging markets including India had to face multiple challenges of fluctuations in local currency, banking fragility, fiscal tightening and additional pressure due to capital outflow.

Despite numerous global and domestic challenges, we not only sustained but further improved performance during fiscal 2013-14. The results under review is for 15 months period however if annualized, the sales on consolidated basis has grown up by 1.52% to Rs.16787.46 million (for 15 months Rs.20984.33 million). The net profit after tax on consolidated basis has however declined by 12.75% to Rs.885.49 million (for 15 months Rs.1106.86 million). On standalone basis, there is slight decline both in turnover and profitability. This has happened because of more focus on subsidiaries abroad performing extremely well despite numerous constraints and challenging environment.

At Plethico, we believe that sustainable transformation can be achieved only through enhancing profits, exploring new possibilities, empowering people and investing in the innovation of products and processes. During FY 2013-14, we undertook several initiatives in key areas that will drive our growth and also create better outcomes for the company. Innovation has always been a corner stone of our operations. It has enabled us to make significant technological–driven break throughs that add significant value to the company''s business.

We focused on further strengthening on our business, network, technological capabilities and operating and financial parameters. At the same time, we were cognizant of the risks in the business and calibrated our approaches accordingly. Our strong and diversified manufacturing base coupled with excellent technical skills give us the ability to leverage opportunities for sustainable growth. Our outlook for the future is positive.

We believe that more relevant we become to our customers through innovative products, the more meaningful and deep our relationship will be. As such, we always strive to achieve higher levels of customer satisfaction as well as creation of shareholders value. We are bringing significant transformation in the organization to realize the glorious future.

Dividend

In view of the loss incurred by the Company during the period under review, Your directors regret that they have not recommended any dividend on equity shares for the period ended on 31st March, 2014.

Subsidiary and other Business Alliances

The company has adopted a completely different path of acquisition and buyouts to carve a unique niche in highly growth-ended regulated and semi regulated markets worldwide. The acquisitions enabled the company to ride on new opportunities that would have taken years to start from scratch. Such acquisitions have begun yielding benefits in different ways that go beyond size and scale.

Currently company has two Wholly Owned Subsidiaries namely Plethico Global Holdings B.V., Netherland (PGH) and Plethico International Limited, UAE (PIL). The PGH is also having subsidiaries and step-down subsidiaries in many countries that had given added advantage of rapid scaling-up, broad-ended customer base and global footprint. Apart from subsidiaries and step-down subsidiaries, the Rezlov Group of Companies in which company currently hold 45% equity stake, also contributed significantly in the growth of the organization. Tricon, a Dubai based retail pharmacy chain in which company holds 20% stake also strengthened Company''s clench in pharmaceutical and nutraceutical markets of the CIS.

Aurobindo Pharma emerged as the highest bidder to acquire Natrol Inc. USA, subsidiary company of Plethico US Holdings KFT, UAE (PUSH) and Plethico Global Holdings BV, Netherlands (PGH) at USD 132.50mn under

a process approved by the US Court for the district of Delaware. The tax-efficient structure of subsidiaries, step-down subsidiaries and business alliances created by the company worldwide has given a strong foothold to the company across the globe.

Consolidated Financial Statements

As stipulated in the listing agreement with the stock exchanges, the consolidated financial statements have been prepared by the company in connection with its subsidiaries in accordance with the relevant accounting standards issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements together with auditor''s report thereon form part of annual report. Company''s all the subsidiary companies are non-material, non-listed Indian companies as defined under clause 49 of the Listing Agreement with the Stock Exchanges.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies is attached to the accounts. In terms of the general exemption granted by the Ministry of Corporate Affairs vide its circular no. 02/2011 dated 8th February, 2011, the audited accounts and Reports of Board of Directors and Auditors of the Company''s subsidiaries have not been annexed to this Annual Report. The Company has complied with the requirements as prescribed under the said circular.

Employee Particulars

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended.

Directors

Mr. Shashikant Patel, Executive Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Board recommends his re- appointment. In accordance with the provisions of Section 149 of the Companies Act,

2013, Dr.G.N Qazi and CA Pramod Shrivastava, independent directors, are proposed to be appointed/reappointed at the ensuing AGM for a term of five years.

Mrs. Gauravi Parikh, Executive Director and Mr. Hitesh Thakar, Independent Director of the Company has resigned from the directorship of the Company w.e.f 1st January, 2014 and 16th January,

2014, respectively.

The Board of Directors of the Company has appointed Mr. Pranav Koshal as an Additional Director (Independent Director) of the Company w.e.f 24th January, 2014, who has also resigned from the directorship of the Company w.e.f 13th August, 2014.

The Board expresses its appreciation for the valuable services rendered and matured advice provided by Mrs. Gauravi Parikh, Mr. Hitesh Thakar and Mr. Pranav Khoshal.

Directors'' Responsibility Statement

In terms of provisions of Section 217(2AA) of the Companies Act, 1956

("the Act"), your Directors confirm that:

i) In the preparation of annual accounts, the applicable accounting

standards had been followed, along with proper explanation relating to material departures, wherever applicable.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, as at the end of the accounting year and of the losses of the Company for the period.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the directors have prepared the financial statement and annual accounts on a going concern basis.

Fixed Deposits

The Company has accepted deposits u/s 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. The Company has overdue deposits outstanding other than those unclaimed deposits of -120.56 Mn as on 31st March, 2014. The total balance of Deposits as on 31st March, 2014 stood at 1357.04 Mn. In context to the Fixed Deposits, the Company has been consistent in its timely repayments of Fixed Deposits. Howeve, owing to the difficult global scenario, currency fluctuations leading to the strong cash flow mismatch coupled with the company being referred to the CDR, there have been delays in the repayments to the fixed deposit holders over the last few months. The Company is well aware and acknowledges the anxiety of the investors and is taking all measures towards rationalizing this situation. With regards to the same, the Company had also sent across communications to all the FD holders indicating the current but temporary situation that the Company is facing. Furthermore, the Company has approached diff erent regulatory authorities to seek relaxation/extension in repayment of Fixed Deposits to enable the Company to work out an acceptable repayment proposal for comprehensively addressing the Fixed Deposits issue.

Corporate Governance Report, Management Discussion & Analysis Report As per clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with auditors'' certificate thereon and Management Discussion and Analysis are attached and form part of this report.

Auditors

M/s. N. P. Gandhi & Co., Chartered Accountants, Mumbai (F.R.No. 116574W), who are the Statutory Auditor of the Company, holds office till the conclusion of the forthcoming AGM and are eligible for re- appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. N. P. Gandhi & Co., Chartered Accountants, Mumbai (F.R.No. 116574W) as Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the twenty- fourth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

Auditors'' Report

With regard to the comments contained in the Auditors'' Report, explanations are given below:-

(i) The Company has accepted deposits from public amounting to

- 86.83 Mllion during the period under review, the Directive issued by Reserve Bank of India and the provisions of Section 58A & Section 58AA or any other relevant provisions of the Act and the rules framed there under are not complied with.

The Company has defaulted in respect of repayment of the said deposits from public. The amount of default with respect to princpal amount is ~ 120.56 Mllion and with respect to interest amount is 13.67 Mllion as on 31st March 2014. (Cause vi of the Annexure to the Auditors'' Report)

(ii) (a) According to the records of the Company and the information and explanations provided to us the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Professional Tax, Cess and other material statutory dues with the appropriate authorities except for Income Tax. According to the information and explanation given to us, the undisputed amount of Rs. 235.89 Million is outstanding as at 31stMarch, 2014 for a period of more than six months from the date of becoming payable. (b) Details of dues of Income Tax which has not been deposited on 31st March, 2014 on account of disputes are given below:- (Clause ix (a) & (b) of the Annexure to the Auditors'' Report)

Forum where Names of Nature of Amount Period to which dispute is the Statute the Dues (Rs.in Millions) amount relates pending

140.53 A.Y 2005-06

107.17 A.Y 2006-07

860.95 A.Y 2007-08 Commissioner

Income Tax Income Tax 245.14 A.Y 2008-09 of Income Act, 1961 Tax (Appeals) 230.23 A.Y 2009-10

216.19 A.Y 2010-11

346.65 A.Y 2011-12

(iii) According to the information and explanation provided to us, we have been intimated that the company has defaulted in repayment of dues to financial institutions or banks. The default pertains to Interest amounting to Rs. 35.52 Million and principal amounting to Rs.576.30 Million. However the Lead Bank has proposed admission of the Company to Corporate Debt Restructuring ("CDR") forum on March 29, 2014 for providing debt restructuring scheme. The proposed debt restructuring scheme is pending approval of CDR Empowered Group for admission to the CDR forum. (Clause xi of the Annexure to the Auditors'' Report)

The ongoing difficult global scenario has negatively impacted the demand for the wellness products that are manufactured and marketed by the company. Furthermore the currency fluctuations and depreciation of emerging market currencies across the globe vis-a-vis the dollar are the other factors that have collectively led to liquidity issues for the company. In context to the FDs, the company has maintained a track record of timely repayments of FD''s, however in the past couple of months there have been delays in the repayments to the fixed deposit holders owing to the strong cash flow mismatch largely due to the reasons chalked above. The company has approached regulatory authorities to seek relaxation in repayment of FD''s to enable the Company to work out an acceptable repayment proposal for comprehensively addressing the FD''s issue. Also the admission into the CDR, a step to the path of financial restructuring, further withheld the operations of the company, leading to an overall delay in the payments of dues to the banks as well as other statutory dues pertaining to income tax. These qualifications indicated are majorly due to the cash flow mismatch, which has been identified by the company and adequate steps are being taken to rectify the same and get back to normal operations towards growth and success.

Cost Auditors

M/s. Rajesh Runwal & Associates, Cost Accountants, were appointed as the Cost Auditor of the Company and their Audit report on the Cost Accounts of the Company for the 15 months period ended 31st March, 2014, will be submitted to the Central Government in due course.

Safety, Health and Environment (SHE) and Energy Conservation

Safety, Health and Environment (SHE) management is a non-negotiable priority at Plethico. Safety and Health of our people is of paramount concern and so is minimization of environmental impact of our industry. Our vision is to be a zero-injury organization. Effective implementation of the safety and environmental standards is supported by your company''s occupational safety program based on the behavioral safety management techniques. The company continued to focus on behavioral safety aspects of employees and visitors along with continual improvements in engineering controls and safety management systems. Your company has been focusing on improving environmental performance and has drawn up an ambitious plan to reduce the environmental aspects of operations including reduction in the energy costs. nformation on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be given pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto in Annexure and forms part of this report.

Research & Development and Technology

Your Company has a long-standing culture and history of delivering high consumer business value through creative ideas and superior technology for its brands. Research and Development (R&D) has always been considered crucial for the continuous up-gradation & sustained growth of the Company. This sustained high performance has helped in building a strong foundation for our business and also differentiated our brands strongly. The technology drive in your company is a journey that began with the great vision of Late Shri Bhaskar Patel (known as Babuji with great affection), the former founder, Chairman and Managing Director of the Company. The strong research foundation laid by him and its expansion over the years have enabled to produce a steadily accelerating stream of high-value deliveries to the domestic & global customer. The global challenges faced by the Indian Pharmaceutical industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005. Your Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario. High quality R&D has been pursued to innovate in the area of herbals and nutraceuticals. After exploring our country''s vast traditional knowledge base & the latest nutraceuticals active elements, the best sustainable offerings are identified and refined to provide specific performance benefit to consumers in the area of personal healthcare. We firmly believe in the philosophy of "PREVENTION IS BETTER THAN CURE". By and large the society is accepting these thoughts and moving towards better health. Our R&D team is thriving to develop products in food and dietary supplements. It continues to be focused on providing dietary options with the combination of superior aroma and tests with specific enhancement in health and nutritional benefits to the consumers at large.

Human Resources

Your company believes that today a major HR challenge for any organization is capability building aligned to business strategy meeting the challenges posed by the changing business scenario. The company continued to enhance capability by realigning leadership competency frameworks to new business realities and the company''s future roadmap.

The company implemented various measures to build a strong, adaptive and matured corporate structure, which is flexible, responsive and cohesive. Development workshops were organized to improve the overall competency level of employees with an objective to improve the operational performance of individuals keeping in view stringent quality norms of different regulatory authorities. The employee training and development function was aligned to add greater thrust on building required competencies for meeting the new emerging business challenges. Based on feedback from employees, key initiatives like benchmarking and revising of performance management system, reward and recognition process and measurement of training effectiveness were undertaken.

The involvement of employees at all levels has been achieved through continued promotion of TQM activities across the organization with the involvement of top management team.

The overall employee relationship and working environment was healthy, cordial and harmonious across various locations.

Corporate Social Responsibilities (CSR)

The company continued to involve itself in social welfare activities, both through charity and social investment issues like education, health, nutrition and over the years serious efforts have been directed towards making a meaningful contribution to uplift and transform the lives of the underprivileged. The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the health, safety and environment aspects. The Company took a conscious decision to contribute towards its belief that "If you educate a boy, you are educating a person and If you are educating a girl, you are educating a family…" Towards this end, the "Shri Hari Charitable Trust" was setup to serve society at large by providing totally free education to the poor and needy girls of the rural areas. Your company is alive to the challenges and remains firm in its believe that it is possible to ''do good while doing well'' and that running a successful business and creating positive social impact as not separate objectives.

Listing of Shares

The Equity Shares of the Company continue to be listed on BSE Ltd. and The National Stock Exchange of India Limited. The annual listing fees for the year 2013-2014 have been paid to these Exchanges.

Website

The Company has a well designated and updated website www.plethico.com containing information about the Company''s products, manufacturing facilities, area of specialization, performance overview etc. The details with respect to new product developed, new market explored, company''s upcoming plans etc. have also been put on the website. The parties associated with the organization are welcome to visit the website to keep them selves updated on the Company.

Acknowledgement

Your Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work and commitment and the trust reposed on us by the medical fraternity and the patients.

We also acknowledge the support and wise counsel extended to us by the analysts, bankers, government agencies, shareholders and investors at large. We look forward to have the same support in our endeavor to help people lead healthier lives.

On behalf of the Board of Directors

Shashikant Patel Chairman & Managing Director Mumbai, 27th November, 2014


Dec 31, 2012

Dear Members

The Directors are pleased to present this the 20th Annual Report of the Company together with the Audited Accounts for the year ended 31st December, 2012. The working results of the Company for the year ended 31st December, 2012 vis-a-vis those of the previous year are summarized below:

Rs. in Million

Particulars Consolidated Standalone

Current year ended Previous year ended Current year ended Previous year ended 31st December, 2012 31st December, 2011 31st December, 2012 31st December, 2011

Sales 16315.41 15570.41 4750.60 4120.09

Other Income 365.29 843.39 357.59 812.70

Sales and Other Income 16680.70 16413.80 5108.19 4932.79

Total Expenditure excluding Interest, depreciation, amortization & tax 14735.71 13460.20 4829.64 3722.96

Profit before Interest, Depreciation, Amortization & Tax 1944.99 2953.59 278.55 1209.83

Interest (Net) 614.32 835.43 499.26 771.88

Depreciation and Amortization 177.29 176.27 83.01 82.38

Profit Before Tax, Exceptional and Extraordinary Item 1153.38 1941.89 (303.72) 355.57

Exceptional Item 81.15 - 374.95 -

Extraordinary Item (141.75) (630.00) (141.75) (630.00)

Provision for Taxation 77.90 282.78 8.40 101.95

Profit After Tax 1014.88 1029.11 (78.92) (376.38)

Profit bought forward 7604.53 6575.40 2610.28 2986.67

Profit available and carried to General Reserves 8622.38 7604.53 2531.36 2610.28

Overview

The Global economy in 2012 improved slightly but was short of expectations. Several key countries'' economy experienced recession due to high unemployment, banking fragility, fiscal tightening and sluggish growth. The year 2012 proved to be challenging year amidst global economic uncertainties and disturbances in many parts of the world. Despite these constraints and challenging environment, the company performed reasonably well.

During the year under review, the sales on consolidated basis has grown up slightly by 4.78% to Rs. 16315.41 mn. whilst Net profit has declined to Rs. 1153.38 mn. However, on standalone basis sales has grown up to Rs. 4750.60 Mn. against Rs. 4120.09 Mn. in the previous year registering a growth of 15.29% but there was dip in the profitability. This happened because of strategic shifting of business during the year to subsidiaries abroad reflecting growth in consolidated performance.

The Global meltdown, turbulent economy, high foreign currency volatility, increasing debt cost are the major factors amidst others that severally affected Company''s overall performance during 2012. However, our aim through the year was to provide world-class healthcare services to all the customers throughout the world while increasing both our customer base and ability to provide blockbuster products at affordable prices to this growing customer base. Along the way, we received accolades for our work from within the country an internationally. We are proud to say that company''s Kandla SEZ Unit has been awarded highest export award consecutively for the fifth year.

Today, company has transformed business globally to leverage Plethico''s financial and technical skills, open new vistas for the enterprise and the energetic talent and to create new values worldwide. And during this process, Plethico has nurtured relationship across the entire range of customers, business partners, techno- economic consultants, stakeholders, which helps the company to understand pertinent issues, develop business, enhance shareholders values and manage risks better. It is the relationship and trust that make the Plethico more robust, resilient and sustainable.

Dividend

In view of the loss in the standalone accounts, no dividend has been proposed for the year ended 31st December, 2012 (Previous Year Nil).

Subsidiary and other Business Alliances

The company has adopted a completely different path of acquisition and buyouts to carve a unique niche in highly growth-ended regulated and semi regulated markets worldwide. The recent acquisitions enabled the company to ride on new opportunities that would have taken years to start from scratch. Such acquisitions have begun yielding benefits in different ways that go beyond size and scale. Currently company has two Wholly Owned Subsidiaries namely Plethico Global Holdings B.V., Netherlands (PGH) and Plethico International Limited, UAE (PIL). The PGH is also having subsidiaries and step-down subsidiaries in many countries that had given added advantage of rapid scaling-up, broad-ended customer base and global footprint. PIL has setup an ultra modern medicated lozenges and solid doses formulation unit in UAE.

Apart from subsidiaries and step-down subsidiaries, the Rezlov Group of Companies in which company currently hold 45% equity stake, also contributed significantly in the growth of the organization. Tricon, a Dubai based retail pharmacy chain in which company holds 20% stake also strengthened Company''s clench in pharmaceutical and nutraceutical markets of the CIS.

The tax-efficient structure of subsidiaries, step-down subsidiaries and business alliances created by the company worldwide has given a strong foothold to the company across the globe.

Consolidated Financial Statements

As stipulated in the listing agreement with the stock exchanges, the consolidated financial statements have been prepared by the company in connection with its subsidiaries in accordance with the relevant accounting standards issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements together with auditor''s report thereon form part of annual report. Company''s all the subsidiary companies are non-material, non-listed Indian companies as defined under clause 49 of the Listing Agreement with the Stock Exchanges.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies is attached to the accounts. In terms of the general exemption granted by the Ministry of Corporate Affairs vide its circular no. 02/2011 dated 8th February, 2011, the audited accounts and Reports of Board of Directors and Auditors of the Company''s subsidiaries have not been annexed to this Annual Report. The Company has complied with the requirements as prescribed under the said circular.

Employee Particulars

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended

Directors

Mr. Chirag Patel, the Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offers him selves for re-appointment. The Board recommends his re-appointment

The Board has appointed CA. Hitesh Thakar as an Additional Director pursuant to Section 260 of the Companies Act, 1956 and Articles of Association of the Company effective 9th November, 2012 and holds office upto the date of this AGM. The Company has received Notice under Section 257 of the Companies Act, 1956 proposing the candidature of CA. Hitesh Thakar as a Director of the Company.

Mr. Abhay Suhane, the Independent Director has resigned from the directorship of the Company with effect from 3rd October, 2012. The Board expresses its appreciation for the valuable services rendered and matured advice provided by Mr. Abhay Suhane.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Director''s responsibility statement in relation of the financial statement for the year ended on 31st December 2012 is furnished herein below and state and confirm:

i) that in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that 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 31st December 2012 and of the loss of the company for the year ended on that date.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the directors had prepared the financial statement and annual accounts on a going concern basis.

Fixed Deposits

The Company is accepting deposits u/s 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. The company is not having overdue deposits outstanding other than those unclaimed deposits of Rs. 4.216 Mn. as on 31st December, 2012. The total balance of Deposits as on 31st December, 2012 stood at Rs. 1466.04 Mn. There is no default in repayment of deposits or interest thereon as at 31st December, 2012.

Management Discussions and Analysis Report

Management Discussion and Analysis Report for the year under review, as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed and forming part of this Report.

Corporate Governance

Your company has been practicing the principal of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity. Yours directors adhere to the stipulation set out in the listing agreement to the Stock Exchanges. As required by Clause 49VI of the Listing Agreement, a detailed report on the Corporate Governance forms part of this Report. The Auditors'' Certificate on compliance with Corporate Governance requirements by the Company is attached to the Corporate Governance Report.

In terms of sub clause V of Clause 49 of the listing agreement, certificate of the CEO and CFO inter alia confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the audit committee in terms of the said clause, is also enclosed as a part of the report.

Auditors

M/s. N. P. Gandhi & Co., Chartered Accountants, Mumbai (F.R.No. 116574W), the Statutory Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Auditor has confirmed that their re-appointment, if made shall be within the limits of Section 224 (1B) of the Companies Act, 1956. The Board recommends their re-appointment as Auditors and to fix their remuneration.

Auditors'' Report

The report of the auditors of the Company and notes to the accounts are self-explanatory and therefore do not call for any further comments and may be treated as adequate compliance of section 217(3) of the Companies Act, 1956.

Cost Auditors

The Board appointed M/s Rajesh Runwal & Associates, Cost Accountants, as the Cost Auditors of the Company for the year ended 31st December, 2012. The Audit report of the Cost Accounts for the year ended 31st December, 2012, will be submitted to the Central Government in due course.

Safety, Health and Environment (SHE) and Energy Conservation

Safety, Health and Environment (SHE) management is a non- negotiable priority at Plethico. Safety and Health of our people is of paramount concern and so is minimization of environmental impact of our industry. Our vision is to be a zero-injury organization. Effective implementation of the safety and environmental standards is supported by your company''s occupational safety program based on the behavioral safety management techniques. The company continued to focus on behavioral safety aspects of employees and visitors along with continual improvements in engineering controls and safety management systems.

Your company has been focusing on improving environmental performance and has drawn up an ambitious plan to reduce the environmental aspects of operations including reduction in the energy costs.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be given pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto in Annexure and forms part of this report.

Research & Development and Technology

Your Company has a long-standing culture and history of delivering high consumer business value through creative ideas and superior technology for its brands. Research and Development (R&D) has always been considered crucial for the continuous up-gradation & sustained growth of the Company. This sustained high performance has helped in building a strong foundation for our business and also differentiated our brands strongly. The technology drive in your company is a journey that began with the great vision of Late Shri Bhaskar Patel (known as Babuji with great affection), the former Founder Chairman and Managing Director of the Company. The strong research foundation laid by him and its expansion over the years have enabled to produce a steadily accelerating stream of high-value deliveries to the domestic & global customers.

The global challenges faced by the Indian Pharmaceutical industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005. Your Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario. High quality R&D has been pursued to innovate in the area of herbals and nutraceuticals. After exploring our country''s vast traditional knowledge base & the latest nutraceuticals active elements, the best sustainable offerings are identified and refined to provide specific performance benefit to consumers in the area of personal healthcare. We firmly believe in the philosophy of "PREVENTION IS BETTER THAN CURE". By and large the society is accepting these thoughts and moving towards better health. Our R&D team is thriving to develop products in food and dietary supplements. It continues to be focused on providing dietary options with the combination of superior aroma and tests with specific enhancement in health and nutritional benefits to the consumers at large.

Human Resources

Your company believes that today a major HR challenge for any organization is capability building aligned to business strategy meeting the challenges posed by the changing business scenario. The company continued to enhance capability by realigning leadership competency frameworks to new business realities and the company''s future roadmap.

The company implemented various measures to build a strong, adaptive and matured corporate structure, which is flexible, responsive and cohesive. Development workshops were organized to improve the overall competency level of employees with an objective to improve the operational performance of individuals keeping in view stringent quality norms of different regulatory authorities. The employee training and development function was aligned to add greater thrust on building required competencies for meeting the new emerging business challenges. Based on feedback from employees, key initiatives like benchmarking and revising of performance management system, reward and recognition process and measurement of training effectiveness were undertaken.

The involvement of employees at all levels has been achieved through continued promotion of TQM activities across the organization with the involvement of top management team.

The overall employee relationship and working environment was healthy, cordial and harmonious across various locations.

Corporate Social Responsibilities (CSR)

The company continued to involve itself in social welfare activities, both through charity and social investment issues like education, health, nutrition and over the years serious efforts have been directed towards making a meaningful contribution to uplifting and transforming the lives of the underprivileged. The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the health, safety and environment aspects. The Company took a conscious decision to contribute towards its belief that "If you educate a boy, you are educating a person and If you are educating a girl, you are educating a family..." Towards this end, the "Shri Hari Charitable Trust" was setup to serve society at large by providing totally free education to the poor and needy girls of the rural areas.

Your company is alive to the challenges and remains firm in its believe that it is possible to ''do good while doing well'' and that running a successful business and creating positive social impact are not separate objectives.

Listing of Shares

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange Limited and The National Stock Exchange of India Limited, Mumbai. The annual listing fees for the year 2012-2013 have been paid to these Exchanges.

Website

The Company has a well designated and updated website www.plethico.com containing information about the Company''s products, manufacturing facilities, area of specialization, performance overview etc. The details with respect to new product developed, new market explored, company''s upcoming plans etc. have also been put on the website. The parties associated with the organization are welcome to visit the website to keep them selves updated on the Company.

Acknowledgement

Your Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work and commitment and the trust reposed on us by the medical fraternity and the patients.

We also acknowledge the support and wise counsel extended to us by the analysts, bankers, government agencies, shareholders and investors at large. We look forward to have the same support in our endeavor to help people lead healthier lives.

On behalf of the Board of Directors

Shashikant Patel

Chairman and Managing Director

Indore, 1st March, 2013


Dec 31, 2009

The Directors have pleasure in presenting the 17th Annual Report of the company along with Audited Accounts for the year ended 31 st December, 2009.

Financial Results

The highlights of thefinancial resultsfortheyear ended 31 st December 2009 are as follows: Rs. in Million

Consolidated Standalone

Current year Previous year Current year Previous year

Particulars ended 31st ended 31st ended 31st ended 31st

December, December, December, December,

2009 2008 2009 2008

Sales 12510.72 9039.71 4735.44 4740.79

Other Income (25.49) 836.17 (40.58) 665.02

Sales and Other Income 12485.23 9875.88 4694.86 5405.81

Total Expenditure excluding, Interest, 10059.10 7741.41 3414.81 3826.41 depreciation, amortization & tax

Profit before Interest, Depreciation, 2426.13 2134.47 1280.05 1579.40 Amortization & Tax

Interest (Net) 300.58 186.15 288.15 167.40 Depreciation and

Amortization 185.53 174.65 81.14 92.64

Profit Before Taxation 1940.02 1773.67 910.76 1319.36

Provision for Taxation (65.72) (142.40) 3.82 28.32

Profit After Tax 2005.74 1916.07 906.94 1291.04

Extra ordinary Income/ (Expenses) 163.50 (682.50) 163.50 (682.50)

Profit bought forward 2660.49 1776.56 2035.46 1776.56

Profit available for appropriation 4829.73 3010.13 3105.90 2385.10

Appropriations

Proposed Dividend 85.17 85.17 85.17 85.17

Tax on Distributed Profit 14.15 14.47 14.15 14.47

Transfer to General Reserve 250.00 250.00 250.00 250.00

Surplus carried forward 4480.41 2660.49 2756.58 2035.46

Overview

The companys performance on consolidated basis registered significant growth both in terms of top and bottom line. During the year under review, the turnover has grown up by 38% to Rs.12510 mn. whilst profit before tax has increased by 9% to Rs.1940.02 mn. Earning per share has grown up to Rs.58.88 per share. On standalone basis, there was significant dip in the profitability whilst turnover remained almost at the similar level. This happened because of strategic shifting of some profitable business during the year to subsidiaries abroad resulting in remarkable growth in consolidated performance.

This year was a landmark year for the company, adding new dimensions to the business. 2009 has witnessed newer heights and has left behind many a past record.The company outperformed globally and registered significant growth amidst extra ordinary challenges of high volatility in raw material prices and currency exchange rates that hit companys

performance largely.

Our aim through the year was to provide world-class healthcare services to all the customers throughout the world while increasing both our customer base and ability to provide blockbuster products at affordable prices to this growing customer base. Along the way, we received accolades for our work from within the country an internationally. We are proud to say that companys Kandla SEZ Unit has been awarded highest export award for the year 2008-09.

Today, company has transformed business globally to leverage Plethicos financial and technical skills, open new vistas for the enterprise and the energetic talent and to create new values worldwide. And during this process, Plethico has nurtured relationship across the entire range of customers, business partners, techno-economic consultants, stakeholders, which helps the company to understand pertinent issues, develop business, enhance shareholders values and manage risks better. It is the relationship and trust that make the Plethico more robust, resilient and sustainable

Dividend

Your Directors are pleased to recommend a dividend of 25% (i.e. Rs. 2.50 per share) for the year ended 31st December, 2009 aggregating to Rs.85.17 Million. The dividend payout will result in a total outflow of Rs.99.32 Million (including Rs. 14.15 Million towards tax on distributed profits).

The dividend payout for the year under review has been ascertained in accordance with the Companys policy to pay sustainable dividend, keeping in view the Companys need of capital to fund its growth plans through internal accruals tothe maximum extent. MHRA Approval

Up-gradation of facilities is a continuous process in Plethico. The tablet and capsule divisions of companys Kalaria (Indore) Unit had been upgraded to comply with the stringent norms of UKMHRA. And we are proud to say that facility of Kalaria (Indore) Unit comprising of tablet and capsule manufacturing, packing and quality control facilities have got approval from the Medicine and Healthcare Products a Regulatory Agency of UK for a period of 3 years. It is important to note that company got this approval in the very first stroke. This approval will open new avenues for the company to expand its business and market its premium brands in the regulated market of Europe. The company is planning to get UKMHRA approval also for its sterilized small volume liquid injectable division, which has already been upgraded and ready for inspection.

Management Discussions and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed and forms part of this Report.

Subsidiary and other Business Alliances

The company has adopted a completely different path of acquisition and buyouts to carve a unique niche in highly growth-ended regulated and semi regulated markets worldwide. The recent acquisitions enabled the company to ride on new opportunities that would have taken years to start from scratch. Such acquisitions have begun yielding benefits in different ways that go beyond size and scale.

Currently company has two Wholly Owned Subsidiaries namely Plethico Global Holdings B.V., Netherlands (PGH) and Plethico International Limited, UAE (PIL). The PGH is also having subsidiaries and step-down subsidiaries in many countries, that had given added advantage of rapid scaling-up, broad-ended customer base and global footprint. PIL is seeting up an ultra modern medicated lozenges and solid doses formulation unit in UAE which is at advanced stage of implementation.

Apart from subsidiaries and step-down subsidiaries, the Rezlov Group of Companies in which company currently hold 45% equity stake, also contributed significantly in the growth of the organization. Tricon, a Dubai based retail pharmacy chain in which company holds 20% stake also strengthened Companys clench in pharmaceutical and nutraceutical markets of the CIS.

The tax-efficient structure of subsidiaries, step-down subsidiaries and business alliances created by the company worldwide has given a strong foothold to the company across the globe.

Consolidated Financial Statements

As stipulated in the listing agreement with the stock exchanges, the consolidated financial statements have been prepared by the company in connection with its subsidiaries in accordance with the relevant accounting standards issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements together with auditors report thereon form part of annual report. The Auditors Report to the shareholders does not contain any qualification. Companys all the subsidiary companies are non-material, non-listed companies as defined under clause 49 of the Listing Agreement with the Stock Exchanges.

Company has sought approval from the Ministry of Company Affairs, Government of India, New Delhi under section 212 (8) of the Companies Act, 1956, in view of the same the audited statements of accounts and the auditors report thereon for the year ended 31 st December, 2009 along with the reports of the Board of Directors of the companys subsidiaries have not been annexed. The company will make available these documents upon request by any member of the company interested in obtaining the same.

Research & Development and Technology

Your Company has a long-standing culture and history of delivering high consumer business value through superior technology for its brands. Research and Development (R&D) has always been considered crucial for the sustained growth of the Company. This sustained high performance has helped in building a strong foundation for our business and also differentiated our brands strongly. The technology drive in your company is a journey that began with the great vision of Shri Bhaskar Patel, the former Chairman and Managing Director of the Company. The strong research foundation laid by him and its expansion over the years have enabled to produce a steadily accelerating stream of high- value deliveries to the customers.

The global challenges for the Indian pharma industry at large have increased several folds in the face of the transition from process to product patent regime in India from 2005, Your Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario. High quality R&D has been pursued to innovate in the area of nutraceuticals and herbals. After exploring our countrys vast traditional knowledge base, the best sustainable offering are identified and refined to provide specific performance benefit to consumer in the area of personal healthcare. R&D in food and dietary supplements continues to be focused on providing dietary options with the combination of superior aroma and tests, with specific enhancement in health and nutritional benefits to the consumers at large.

Human Resources

Your company believes that today a major HR challenge for any organization is capability building aligned to business strategy meeting the challenges posed by the changing business scenario. The company continued to enhance capability by realigning leadership competency frameworks to new business realities and the companys future roadmap.

The company implemented various measures to build a strong, adaptive and matured corporate structure, which is flexible, responsive and cohesive. Development workshops were organized to improve the overall competency level of employees with an objective to improve the operational performance of individuals keeping in view stringent quality norms of different regulatory authorities.The employee training and development function was aligned to add greater thrust on building required competencies for meeting the new emerging business challenges. Based on feedbackfrom employees, key initiatives like benchmarking and revising of performance management system, reward and recognition process and measurement of training effectiveness were undertaken.

The involvement of employees at all levels has been achieved through continued promotion of TQM activities across the organization with the involvement of top management team.

The overall employee relationship and working environment was healthy, cordial and harmonious across various locations.

Directors

Mr. Chirag Patel and Mr. Abhay Suhane, Directors of the company retire by rotation, as per Article 111 of the Articles of

Association of the Company. Being eligible, they have offered themselves for re-appointment. Further details about Directors are given in the Corporate Governance Report as well as in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with Annual Report.The Board of Directors recommends their re-appointment.

Company Secretary and Compliance Officer

During the period under review, Mr. Amrish Kumar Chourasia (a qualified member of the Institute of Company Secretaries of India) has been appointed as Company Secretary and Compliance Officer of the company in place of Mr. Ashok Mishra, who has resigned from the post of Company Secretary.

Auditors

M/s. N. P. Gandhi & Co., Chartered Accountants, Mumbai, the Statutory Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. M/s. N. P. Gandhi & Co. has confirmed that their re- appointment, if made shall be within the limits of Section 224 (1B) of the Companies Act, 1956.The Board recommends their re-appointment as Auditors and to fix their remuneration.

M/s Vijay P. Joshi& Co., Cost Accountants, have been appointed as the Cost Auditors of the Company for the ensuing year 2010. AuditorsReport

The report of the auditors of the Company and notes to the accounts are self-explanatory and therefore do not call for any further comments and may be treated as adequate compliance of section 217(3) of the Companies Act, 1956.

Fixed Deposits

Your Company has not accepted any fixed deposits under Section 58A of the Companies Act, 1956 and hence no amount of principal or interest was outstanding as of the Balance Sheet date.

DirectorsResponsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors responsibility statement in relation of the financial statement for the year ended on 31 st December 2009 is furnished herein below. Your Directors state and confirm:

i) that in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that 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 st December 2009 and of the profit or loss of the company for the year ended on that date.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the directors had prepared the financial statement and annual accounts on a going concern basis. Corporate Governance

Your company has been practicing the principal of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity. Yours directors adhere to the stipulation set out in the listing agreement to the Stock Exchanges. As required by Clause 49VI of the Listing Agreement, a detailed report on the Corporate Governance forms part of this Report. The Auditors Certificate on compliance with Corporate Governance requirements by the Company is attached to the Corporate Governance Report.

In terms of sub clause V of Clause 49 of the listing agreement, certificate of the CEO and CFO inter alia confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the audit committee in terms of the said clause, is also enclosed as a part of the report.

Safety, Health and Environment (SHE) and Energy Conservation

Safety, Health and Environment (SHE) management is a non-negotiable priority at Plethico. Safety and Health of our

people is of paramount concern and so is minimization of environmental impact of our industry. Our vision is to be a zero-injury organization. Effective implementation of the safety and environmental standards is supported by your companys occupational safety program based on the behavioral safety management techniques. The company continued to focus on behavioral safety aspects of employees and visitors along with continual improvements in engineering controls and safety management systems.

Your company has been focusing on improving environmental performance and has drawn up an ambitious plan to reduce the environmental aspects of operations including reduction in the energy costs.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be given pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto in Annexure-I and forms part of this report. Employee Particulars

Particulars of employees as required under section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended forms part of this report as Annexure-ll. None of the employees listed in the said Annexure is related to any Director of the Company.

Listing of Shares

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange Limited and The National Stock Exchange of India Limited, Mumbai.The annual listing fees for the year 2010-2011 have been paid to these Exchanges. Website

The Company has a well designated and updated website www.plethico.com containing information about the Companys products, manufacturing facilities, area of specialization, performance overview etc.The details with respect to new product developed, new market explored, companys upcoming plans etc. have also been put on the website. The parties associated with the organization are welcome to visit the website to keep them selves updated on the Company.

Corporate Social Responsibilities (CSR)

The company continued to involve itself in social welfare activities, both through charity and social investment issues like education, health, nutrition and over the years serious efforts have been directed towards making a meaningful contribution to uplifting and transforming the lives of the underprivileged.The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the health, safety and environment aspects. The Company took a conscious decision to contribute towards its belief that "If you educate a boy, you are educating a person and If you are educating a girl, you are educating a family.. ."Towards this end, the "Shri Hari CharitableTrust" was setup to serve society at large by providing totally free education to the poor and needy girls of the rural areas.

Your company is alive to the challenges and remains firm in its believe that it is possible to do good while doing we//and that running a successful business and creating positive social impact are not separate objectives.

Acknowledgement

Your Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work and commitment and the trust reposed on us by the medical fraternity and the patients. We also acknowledge the support and wise counsel extended to us by the analysts, bankers, government agencies, shareholders and investors at large. We look forward to have the same support in our endeavor to help people lead healthier lives.



Registered Office:

A.B.Road,Manglia On behalf of the Board of Directors

For Plethico Pharmaceuticals Limited (lndore)453 771 (M.P.)



Indore Shashikant Patel

June 2,2010 Chairman and Managing Director



 
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