Plethico Pharmaceuticals
BSE: 532739 | NSE: PLETHICO | ISIN: INE491H01018 | Pharmaceuticals
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Dec '07 |
The Directors are pleased to present their 15th annual report and
audited accounts of the company for the accounting year ended December
31st 2007.
FINANCIAL PERFORMANCE
The financial highlights of the company for the period are as under: Rs
in Million
PARTICULARS Current Period Previous Year
ended 31st ended 30th
December, 2007 September, 2006
(15 months) (12 months)
Sales and Other Income 5562.66 3212.85
Total Expenditure excluding 3972.75 2224.65
Interest, depreciation & tax
Profit before Interest,
Depreciation & Tax 1589.91 988.20
Interest (Net) 73.98 54.32
Depreciation/Amortisation 67.29 51.60
Profit Before
Taxation 1448.64 882.28
Provision for Taxation 29.88 22.00
Profit After
Tax 1418.76 860.28
Extra ordinary Income 164.58 0.00
Profit bought forward 533.97 757.65
Profit available for appropriation 2117.31 1617.93
APPROPRIATIONS
Proposed Dividend 85.17 85.17
Tax on Distributed Profit 14.47 11.94
Transfer to General Reserve 241.11 986.85
Surplus carried forward 1776.56 533.97
OVERVIEW
Hitherto company was following accounting year from October to
September every year, but in order to coincide accounting year with
those of associate companies and WOS abroad, the accounting year of the
company has also been changed to January-December every year.
Consequently, the current accounting year has been extended up to 31st
December 2007 and accounts have been compiled for 15 months period and
results have been declared for the period from 01.10.2006 to
31.12.2007. In view of this, the current years figures are not
comparable with that of the previous year.
The Company has a very successful year registering highly improved
performance on all key parameters. During 15 months period ended on
31st December 2007, the turnover has increased to Rs.5514.48 million
representing the growth of 38.43% on annualized basis compare to Rs.3i
86.94 minion in the previous year. The profit after tax increased to
Rs. 1418.76 million as compare to Rs.860.28 million in the previous
year. The performance during the year was driven by significant growth
in export sales across the developed and emerging markets, increased
operating efficiencies, a continuing focus on cost optimization and
better management of working capital. Riding on the economys growth
momentum, the company has posted improved performance, with revenue and
profits higher that ever before. The companys Unit at Kandla Special
Economic Zone has also been awarded Top Exporter Award for the
financial year2006-07.
Your company today has well entrenched into the semi regulated markets
of the world consisting of markets like CIS, Africa and Third Front
comprising of Latin America, South East Asia and Gulf Countries and
also has presence in India in the OTC segments. The companys brands
including Travisil®, Mountain Herbz,
Effertabs, Coachs Formula®and Therasil have become leading brands in
the international markets where company is operating. Unlike, other
pharmaceutical players in the Indian market who are fighting for a pie
of the available export generics opportunity, your company has adopted
a completely different path by focusing on high margin herbals and
nutraceuticals in the international markets. After initially focusing
on the unregulated markets such as CIS & Africa, the company has now
entered in the regulated markets like the US & Europe.
ACQUISITION ABROAD
Your Company considered acquisitions as part of its growth strategy.
During the period under review, the company had entered into a Merger
and Acquisition Agreement for acquisition of NATROL INC., a USA based
US$ 100 million nutraceutical / herbal company listed at the Nasdaq,
for a total consideration of US$ 80.8 million. This acquisition has
been planned through a SPV route, the immediate SPV being at
Netherlands in the name of Plethico Global Holdings, BV, which will
ultimately acquire 100% equity of Natrol INC, USA.
Natrol is synergistically operating in the herbal / nutraceutical
sphere, but is predominantly present in USA. Natrol has a portfolio of
Healthcare and wellness brands representing quality nutritional
supplements, functional herbal teas and sports nutritional products.
Established in 1980, Natrols portfolio of brands includes Natrol®,
MRI, Prolab®, Laci Le Beau®, Promensil®, Trinovin®, Nu Hair® and Shen
Min.
Natrol distributes products nationally through more than 54,000
retailers, as well as internationally in over 40 other countries
through distribution partners and subsidiaries in the UK and Hong Kong.
Your company intends to market Natrols top brands into Indian and
other stronghold semi-regulated markets. Likewise, company aiso pians
to launch its leading homegrown brand Travisil in the US Markets
through well-established marketing and distribution network of the
Natrol. With this acquisition your company has evolved into a global
pharmaceutical company in terms of outlook, focus, presence, customers
and employment.
FCCB
During the year under review, the company has successfully floated
issue of zero percent Foreign Currency Convertible Bond (FCCB) of US
million. This issue was meant to part finance overseas acquisition(s)
of brands / pharmaceutical and / or nutraceutical company. The FCCB
maturing on 23.10.2012 has been listed at SGX-ST, Singapore.
SUBSIDIARIES ABROAD
During the period under review, the company has floated a SPV at
Netherlands in the name of Plethico Global Holdings BV for ultimate
acquisition of equity holding of Natrol INC, USA. Your company holds
100% equity of this SPV at Netherlands. Your company has also floated
another wholly owned subsidiary at UAE in the name of Plethico
International Limited to set-up an ultra modern formulation / lozenges
manufacturing unit in the UAE to cater the demand of CIS, GCC, Middle
East, South East Asia and the African Countries.
During the period under review, the company has disinvested its equity
holding partly in all the six subsidiaries in CIS namely CJSC Rezlov,
Russia, TOO Rezlov Limited, Khazakistan, Rezlov MOSRL, Moldova, SC
Rezlov Ukraine, Rezlov LLS, Azarbaijan and Rezlov Limited, Kyrghzstan,
for a total consideration of USD 13.26 million yielding capital gain of
USD 5.23 million. This part dilution will bring down your companys
holding in all the above companies uniformly to 45%. Since all such
companies have ceased to be subsidiary during the period under review,
no reporting under section 212 of the Companies Act, 1956 is being made
in respect thereof.
RESEARCH & DEVELOPMENT AND TECHNOLOGY
Your company has a long-standing culture and history of delivering high
quality products through superior technology for its brands. This
sustained high performance has helped in building a strong foundation
for our business and also differentiated our brands strongly.
A major R&D emphasis for us in the recent times has been in the area of
nutraceutical, herbal and ayurveda. After exploring our countrys vast
traditional knowledge base, the best sustainable offerings are
identified and refined to provide specific performance benefits to the
consumers in the area of health and personal care.
HUMAN RESOURCES
Since your company operates in a knowledge-based sector, the importance
of the human assets cannot be underscored. The Human Resource Agenda
for the year 2006-07 was focused on three key areas embarking on human
resource transformation program, building organizational and individual
capabilities and significantly enhancing people productivity to drive
sustainable business growth. The search for the highest degree of
intellectual capital to enrich professional and technical milieu is a
perennial one at your company.
The beliefgreat people create great organizations has been at the
core of the companys approach to its people. Your company made
significant investments for training in the areas of marketing,
excellence in customer services and building expertise and capabilities
for well organized and systematic business operations. All the efforts
are aimed to develop and nurture the entrepreneurial attitude and skill
among the employees.
For efficient management of human resource transactions, your company
is going to implement a separate HR module in the JD Edward ERP. The IT
platform would relay on self service mode thereby enhancing the
productivity of HR Management by freeing up them from routine
management and transactional workload.
The relations with the employees continued to be cordial during the
period under review. The directors wish to place on record their
sincere appreciation for the excellent team spirit with which they have
worked for the progress of the Company and the dedicated and sincere
efforts made by all of them to grow the company as are excellent
worldwide healthcare institution.
DIVIDEND
The Board of Directors is pleased to recommend a dividend of 25% (i.e.
Rs. 2.50 per share) for the period ended 31st December, 2007
aggregating to Rs.85.17 Million. The dividend payout will result in a
total outflow of Rs.99.64 Million (including Rs. 14.47 Million towards
tax on distributed profits).
MANAGEMENT
Shri Ashok Sodhani resigned from the Board w.e.f. 22/11/2007. All the
members of the Board expressed their sincere thanks and appreciation
for the valuable services rendered by Mr. Ashok Sodhani during his
tenure.
Mr. Shashikant Patel and Mrs. Gauravi Parikh, 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 & COMPLIANCE OFFICER
During the period under review, Mr. Ashok Mishra (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.
Pankaj Pabaiya who has resigned from the post of the 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.
have 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 2007-08.
AUDITORS REPORT
The report of the auditors of the Company and notes to the accounts are
self-explanatory and do not require further explanation from the Board
and may be treated as adequate compliance of section 217(3) of the
Companies Act, 1956. .
FIXED DEPOSITS
The Company did not invite or accept any deposits from the public
during the period within the meaning of section 58A of the Companies
Act, 1956. There are no unpaid or unclaimed deposits with the Company.
DIRECTORS RESPONSIBILITY 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 period ended on 31st December 2007 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 31st December 2007 and of the profit or
loss of the company for the period 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. The Company
has complied with the corporate governance code as stipulated under sub
clause VI of Clause 49 of the Listing agreement with the Stock
Exchanges. A separate section on report on corporate governance along
with a certificate of the auditors of the company M/s. N.P. Gandhi &
Co. confirming the level of compliance is annexed and forms part of the
Annual 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The report as required under the listing agreement under the stock
exchanges is annexed and farm part of the Annual Report.
ENVIRONMENT, SAFETYAND ENERGYCONSERVATION
Safety and environment performance has been integral to the business
performance of your company and continued to receive focus throughout
the year. 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.
PARTICULARS OF EMPLOYEES
Information required pursuant to the provisions of Section 217(2A) of
the Companies Act, 1956, read with the Companies (Particulars of
Employees) Rules, 1975, is annexed hereto marked Annexure-ll and forms
part of this report.
LISTING OF SHARES
The shares of the Company are listed on Bombay Stock Exchange and
National Stock Exchange, Mumbai. Your company has paid the listing fees
to each of these stock exchanges for the year 2006-07 before the due
date.
WEBSITE
The Company has a well designated 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 themselves updated on the Company.
CORPORATE RESPONSIBILITIES
The company continued to involve itself in social welfare activities,
both through charity and social investment around issues like
education, health, nutrition and initiatives for economic uplifting 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. Your Companys arm Shri Hari Charitable Trust is
serving society at large by providing totally free education to the
poor and needy girls of 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.
ACKNOWLEDGEMENT
We would like to take this opportunity to express our deep sense of
gratitude to the banks, financial institutions, medical professionals,
business associates, customers, suppliers, Central and State
Governments and their departments and the local authorities for their
continued guidance and support. We would also like to place on record
our sincere appreciation for the total commitment, dedication and hard
work put in by every member of the Plethico family.
And to you, our shareholders, we are deeply grateful for the confidence
and faith that you have always reposed in us.
For and on behalf of the Board
Indore, Shashikant Patel
27th May, 2008 Chairman cum Managing Director |
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| Source : Religare Technova | |
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