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
Rs. in Million
Particulars Consolidated Standalone
year ended Previous
year ended Current
year ended Previous
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
amortization & tax 14735.71 13460.20 4829.64 3722.96
Amortization & Tax 1944.99 2953.59 278.55 1209.83
Interest (Net) 614.32 835.43 499.26 771.88
Amortization 177.29 176.27 83.01 82.38
Profit Before Tax,
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
and carried to
General Reserves 8622.38 7604.53 2531.36 2610.28
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.
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
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
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,
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.
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.
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.
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
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.
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
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
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
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.
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
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
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
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.
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.
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
Chairman and Managing Director
Indore, 1st March, 2013