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Plethico Pharmaceuticals Ltd.

BSE: 532739 Sector: Health care
NSE: PLETHICO ISIN Code: INE491H01018
BSE 00:00 | 04 Mar Plethico Pharmaceuticals Ltd
NSE 05:30 | 01 Jan Plethico Pharmaceuticals Ltd
OPEN 36.50
PREVIOUS CLOSE 34.50
VOLUME 9827
52-Week high 36.50
52-Week low 0.00
P/E 2.81
Mkt Cap.(Rs cr) 118
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 36.50
CLOSE 34.50
VOLUME 9827
52-Week high 36.50
52-Week low 0.00
P/E 2.81
Mkt Cap.(Rs cr) 118
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Plethico Pharmaceuticals Ltd. (PLETHICO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present Twenty First Annual Report of the Companytogether with the audited Accounts for the 15 months period ended 31st March2014. The working results of the Company for the 15 months period ended 31" March2014 vis-a-vis those of the previous year are summarized below: "

in IVIillion

Particulars

CONSOLIDATED

STANDALONE

Period ended 31st March 2014 Year ended 31 December 2012 Period ended 31st March 2014 Year ended 31st December 2012
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 depreciation amortization & tax 17780.34 14735.71 5037.33 4787.35
Profit before Interest Depreciation Amortization & Tax 3203.99 1884.39 648.71 136.81
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 Extraordinary Item 968.48 1092.77 (82.94) (445.47)
Exceptional Item 0.00 0.00 0.00 0.00
Extraordinary Item 0.00 0.00 0.00 0.00
Provision for Taxation (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 theCompany from January-December to April-March effective 24th J anuary 2014. I nview of this the current financial year is for a period of 15 months i.e. 1stJanuary 2013 to 31st March 2014.

Overview

Although there was slight improvement in the global economy in 2012 the challengingbusiness environment and moderation in economic growth did continue in fiscal 2013-14 a swell. Although manufacturing and industrial growth remained weak there were some positivepolicy responses that alleviated the immediate pressure. The pharmaceutical industrycontinued to face tough milieu throughout the globe. Emerging markets including India hadto face multiple challenges of fluctuations in local currency banking fragility fiscaltightening and additional pressure due to capital outflow.

Despite numerous global and domestic challenges we not only sustained but furtherimproved performance during fiscal 2013-14. The results under review is for 15 monthsperiod however if annualized the sales on consolidated basis has grown up by 1.52% to16787.46 million (for 15 months 20984.33 million). The net profit after tax onconsolidated basis has however declined by 12.75% to 885.49 million (for 15 months 1106.86million). On standalone basis there is slight decline both in turnover and profitability.This has happened because of more focus on subsidiaries abroad performing extremely welldespite numerous constraints and challenging environment.

At Plethico we believe that sustainable transformation can be achieved only throughenhancing profits exploring new possibilities empowering people and investing in theinnovation of products and processes. During FY 2013-14 we undertook several initiativesin 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 makesignificant technological-driven break throughs that add significant value to the companys business.

We focused on further strengthening on our business network technologicalcapabilities and operating and financial parameters. At the same time we were cognizantof the risks in the business and calibrated our approaches accordingly. Our strong anddiversified manufacturing base coupled with excellent technical skills give us the abilityto leverage opportunities for sustainable growth. Our outlook for the future is positive.

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

Dividend

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

Subsidiary and other Business Alliances

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

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

Aurobindo Pharma emerged as the highest bidder to acquire Natrol Inc. USA subsidiarycompany of Plethico US Holdings KFT UAE (PUSH) and Plethico Global Holdings BVNetherlands (PGH) at USD 132.50mn under a process approved by the US Court for thedistrict of Delaware. The tax-efficient structure of subsidiaries step-down subsidiariesand business alliances created by the company worldwide has given a strong foothold to thecompany across the globe.

Consolidated Financial Statements

As stipulated in the listing agreement with the stock exchanges the consolidatedfinancial statements have been prepared by the company in connection with its subsidiariesin accordance with the relevant accounting standards issued by the Institute of CharteredAccountants of India. The audited consolidated financial statements together with auditors report thereon form part of annual report. Company s all the subsidiary companies arenon-material non-listed Indian companies as defined under clause 49 of the ListingAgreement with the Stock Exchanges.

A statement pursuant to Section 212 of the Companies Act 1956 relating to subsidiarycompanies 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 February2011 the audited accounts and Reports of Board of Directors and Auditors of the Companyssubsidiaries have not been annexed to this Annual Report. The Company has complied withthe requirements as prescribed under the said circular.

Employee Particulars

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

Directors

Mr. S hashikant Patel Executive Director of the Company retire by rotation at theensuing Annual General Meeting and being eligible offer themselves for re-appointment. TheBoard recommends his re-appointment.

In accordance with the provisions of Section 149 of the Companies Act 2013 Dr.G.NQazi and CA P ramod Shrivastava independent directors are proposed to beappointed/reappointed at the ensuing AGM for a term of five years.

Mrs. Gauravi Parikh Executive Director and Mr. H itesh Thakar Independent Director ofthe Company has resigned from the directorship of the Company w.e.f 1st January 2014 and 16th J anuary 2014 resp ectively.

The Board of Directors of the Company has appointed Mr. P ranav Koshal as an AdditionalDirector (Independent Director) of the Company w.e.f 24th Ja nuary 2014 whohas also resigned from the directorship of the Company w.e.f 13 August 2014.

The Board expresses its appreciation for the valuable services rendered and maturedadvice provided by Mrs. Gauravi Parikh Mr. H itesh Thakar and Mr. P ranav Khoshal.

Directors' Responsibility Statement

In terms of provisions of Section 217(2AA) of the Companies Act 1956 (the Act) yourDirectors confirm that:

i) In the preparation of annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures whereverapplicable.

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

iii) That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 agoing concern basis.

Fixed Deposits

The Company has accepted deposits u/s 58A and 58AA of the Companies Act 1956 read withthe Companies (Acceptance of Deposits) Rules 1975 as amended. The Company has overduedeposits outstanding other than those unclaimed deposits of 120.56 Mn as on 31stMarch 2014. The total balance of Deposits as on 31st March 2014 stood at1357.04 Mn. In context to the Fixed Deposits the Company has been consistent in itstimely repayments of Fixed Deposits. However owing to the difficult global scenariocurrency fluctuations leading to the strong cash flow mismatch coupled with the companybeing referred to the CDR there have been delays in the repayments to the fixed depositholders over the last few months. The Company is well aware and acknowledges the anxietyof the investors and is taking all measures towards rationalizing this situation. W ithregards to the same the Company had also sent across communications to all the FD holdersindicating the current but temporary situation that the Company is facing. Furthermorethe Company has approached different regulatory authorities to seek relaxation/extensionin repayment of Fixed Deposits to enable the Company to work out an acceptable repaymentproposal 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 ExchangesCorporate Governance Report with auditors certificate thereon and M anagement Discussionand Analysis are attached and form part of this report.

Auditors

M/s. N. P. Gandhi & Co. Ch artered Accountants Mumbai (F.R.No. 116574W) who arethe Statutory Auditor of the Company holds office till the conclusion of the forthcomingAGM and are eligible for re- appointment. Pursuant to the provisions of Section 139 of theCompanies Act 2013 and the Rules framed thereunder it is proposed to appoint M/s. N. P.Gandhi & Co. C hartered Accountants M umbai (F.R.No. 116574W) as S tatutory Auditorsof the Company from the conclusion of the forthcoming AGM till the conclusion of thetwenty-fourth AGM to be held in the year 2017 subject to ratification of theirappointment at every AGM.

Auditors' Report

W ith regard to the comments contained in the Auditors Report explanations are givenbelow:-

(i) The Company has accepted deposits from public amounting to 86.83 Million during theperiod under review the Directive issued by Reserve Bank of India and the provisions ofSection Section 58AA or any other relevant provisions of the Act and the rules framedthere under are not complied with.

The Company has defaulted in respect of repayment of the said deposits from public. Theamount of default with respect to principal amount is 120.56 Million and with respect tointerest amount is 13.67 Million as on 31st March 2014. (C ause vi of theAnnexure to the Auditors Report)

(ii) (a) According to the records of the Company and the information and explanationsprovided to us the Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund Employees StateInsurance Sales Tax We alth Tax Service Tax Customs Duty Excise Duty ProfessionalTax Cess and other material statutory dues with the appropriate authorities except forIncome Tax. According to the information and explanation given to us the undisputedamount of " 235.89 Million is outstanding as at 31stMarch 2014 for aperiod 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)

Names of the Statute Nature of the Dues Amount Rs in Millions) Period to which amount relates Forum where
Act 1961 "140.53 A.Y 2005-06
"107.17 A.Y 2006-07
"860.95 A.Y 2007-08 Commissioner of Income Tax (Appeals)
Income Tax "245.14 A.Y 2008-09
"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 beenintimated that the company has defaulted in repayment of dues to financial institutions orbanks. The default pertains to Interest amounting to 35.52 Million and principal amountingto " 576.30 Million. However the Lead Bank has proposed admission of the Company toCorporate Debt Restructuring ("CDR") forum on March 29 2014 for providing debtrestructuring 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 AuditorsReport)

The ongoing difficult global scenario has negatively impacted the demand for thewellness products that are manufactured and marketed by the company. Furthermore the currency fluctuations and depreciation of emerging market currencies across the globevis-a-vis the dollar are the other factors that have collectively led to liquidity issuesfor the company. In context to the FDs the company has maintained a track record oftimely repayments of FD's h owever in the past couple of months there have been delays inthe repayments to the fixed deposit holders owing to the strong cash flow mismatch largelydue to the reasons chalked above. The company has approached regulatory authorities toseek relaxation in repayment of FD's to enable the Company to work out an acceptablerepayment proposal for comprehensively addressing the FD's is sue. Also the admission intothe CDR a step to the path of financial restructuring further withheld the operations ofthe company leading to an overall delay in the payments of dues to the banks as well asother statutory dues pertaining to income tax. These qualifications indicated are majorlydue to the cash flow mismatch which has been identified by the company and adequate stepsare being taken to rectify the same and get back to normal operations towards growth andsuccess.

Cost Auditors

M/s. Rajesh R unwal & Associates Cost Accountants were appointed as the CostAuditor of the Company and their Audit report on the Cost Accounts of the Company for the15 months period ended 31st M arch 2014 will be submitted to the CentralGovernment in due course.

Safety Health and Environment (SHE) and Energy Conservation Safety Health andEnvironment (SHE) management is a non-negotiable priority at Plethico. Safety and Healthof our people is of paramount concern and so is minimization of environmental impact ofour industry. Our vision is to be a zero-injury organization. Effective implementation ofthe safety and environmental standards is supported by your company's occupational safetypro gram based o n the behavioral safety management techniques. The company continued tofocus on behavioral safety aspects of employees and visitors along with continualimprovements in engineering controls and safety management systems. Your company has beenfocusing on improving environmental performance and has drawn up an ambitious plan toreduce the environmental aspects of operations including reduction in the energy costs.

Information on conservation of energy technology absorption foreign exchange earningsand outgo as required to be given pursuant to Section 217(1)(e) of the Companies Act 1956read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules1988 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 consumerbusiness value through creative ideas and superior technology for its brands. Research andDevelopment (R&D) has always been considered crucial for the continuous up-gradation& sustained growth of the Company. This sustained high performance has helped inbuilding 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 LateShri Bhaskar Patel (known as Babuji with great affection) the former founder Chairmanand M anaging Director of the Company. The strong research foundation laid by him and itsexpansion over the years have enabled to produce a steadily accelerating stream ofhigh-value deliveries to the domestic & global customer.

The global challenges faced by the Indian Pharmaceutical industry at large haveincreased several folds in the face of the transition from process to product patentregime in India from 2005 . Your Company has stepped-up investments in R&D to keeppace with the changing domestic and global scenario. High quality R&D has been pursuedto innovate in the area of herbals and nutraceuticals. After exploring our country's vasttraditional knowledge base & the latest nutraceuticals active elements the bestsustainable offerings are identified and refined to provide specific performance benefitto consumers in the area of personal healthcare. We firmly believe in the philosophy of"PREVENTION IS BETTER THAN CURE". By and i arge the society is accepting thesethoughts and moving towards better health. Our R&D team is thriving to developproducts in food and dietary supplements. It continues to be focused on providing dietaryoptions with the combination of superior aroma and tests with specific enhancement inhealth and nutritional benefits to the consumers at large.

Human Resources

Your company believes that today a major HR challenge for any organization iscapability building aligned to business strategy meeting the challenges posed by thechanging business scenario. The company continued to enhance capability by realigningleadership competency frameworks to new business realities and the company's futureroadmap.

The company implemented various measures to build a strong adaptive and maturedcorporate structure which is flexible responsive and cohesive. Development workshopswere organized to improve the overall competency level of employees with an objective toimprove the operational performance of individuals keeping in view stringent quality normsof different regulatory authorities. The employee training and development function wasaligned to add greater thrust on building required competencies for meeting the newemerging business challenges. Based on feedback from employees key initiatives likebenchmarking and revising of performance management system reward and recognition processand measurement of training effectiveness were undertaken.

The involvement of employees at all levels has been achieved through continuedpromotion of TQM activities across the organization with the involvement of top managementteam.

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

Corporate Social Responsibilities (CSR)

The company continued to involve itself in social welfare activities both throughcharity and social investment issues like education health nutrition and over the yearsserious efforts have been directed towards making a meaningful contribution to uplift andtransform the lives of the underprivileged . The Company is contributing to susta in abledevelopment by its economic activities combined with the fulfillment of its socialresponsibilities relating to the health safety and environment aspects. The Company tooka conscious decision to contribute towards its belief that If you educate a boy you areeducating a person and If you are educating a girl you are educating a family... Towardsthis end the Shri Hari Charitable Trust" was setup to serve society at large byproviding totally free education to the poor and needy girls of the rural areas. Yourcompany 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 positivesocial impact as not separate objectives.

Listing of Shares

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

Website

The Company has a well designated and update d website www.plethico.com containing information about theCompany's products manufacturing facilities area of specialization performance overviewetc. The details with respect to new product developed new market explored company'supcoming plans etc. have also been put on the website. The parties associated with theorganization 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 contributionmade by the employees through their dedication hard work and commitment and the trustreposed on us by the medical fraternity and the patients.

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

On behalf of the Board of Directors

Shashikant Patel

Chairman & Managing Director

Mumbai 27" November 2014

ANNEXURE TO THE DIRECTORS' REPORT

Particulars under Companies (Disclosure of particulars in the Report of Board ofDirectors) Rules 1988 for the 15 months ended 31st March 2014.

CONSERVATION OF ENERGY

From the early stage conscious efforts have been made to minimize energy consumptionand company is introducing more and more innovations and improvements to further reduceenergy consumption. Some additional energy conservations features incorporated during theyear under review are as under:

At Manglia Formulation Unit

1. Cut-off the excess lighting to minimize the lighting load and provided new withelectronic ballast leading to saving of " 6000.00 Per Month.

2. Maintaining power factor between 0.99 to unity to get the incentive from MPSEBleads to average saving of " 28840.00 per month.

3. Prevention of Steam Leakages through Steam Traps and Distribution Lines leads tosaving of " 24525.00 per month

4. Proper load sharing and extra load cutting of Power supply from MPSEB leads tosaving of " 9750.00 per month

5. Optimization of Chilled Water Temperature to reduce the Electric Power Consumptionwhich leads to average saving of " 16800.00 per month.

At Kalaria Formulation Unit

1. Minimize the lighting load by extensive monitoring and switching "OFF" theexcess lights in different departments of the Plant leading to saving of " 25000.00per month.

2. Maintained the Power factor between 0.99 - 1.00 trough out the Year and received theincentive from MPSEB leads to average saving of " 56585.00 per month.

3. Power savings by installing Variable Frequency Drive with the Motor of 234 CFM aircompressor leading to savings of " 4500.00 per month.

4. Power savings by installing Variable Frequency Drive with the Motor of 95 CFM aircompressor leading to saving of " 20076.00 per month.

5. Fuel savings on recovery of condensate coming out from Water System leading toaverage saving of " 12061.00 per month.

6. Fuel savings on recovery of hot cooling water coming out from Multi Column DistillWater Still leading to average saving of " 4163.00 per month.

7. Power savings by close monitoring on operation of Non BMS and Non Critical AirHandling Units leading to average saving of " 12000.00 per month.

8. Power Savings by close monitoring and selection of proper chiller for operation asper the Load requirements leading to average saving of " 134385.00 per month.

Additional Cost Saving Proposals (Under Consideration)

At Manglia Formulation Unit

1. Provisions of Variable Frequency Drive require for Secondary Pumps of Chillers.Average min savings in Units /day (approx.) =300 Kwh/day— 336 per day.

2. Arrangement of VFD and PLC in RMG . Average Savings — " 59.67 per day.

3. Provisions of Variable F requency Drives in Air Handling Units.

Average min saving — 812.00 per day.

At Kalaria Formulation Unit

1. Min 10 % En ergy Savings can be done by replacing V- Belt P ulley by Flat BeltPulley of both the Air Compressor Average min savings in Units /day (approx.) = 120Kwh/day = 660.00/Day.

2. Min 10 % En ergy Savings can be done by replacing V- Belt Pulley by Flat Belt Pulleyof Higher Capacity AHU s in Phase - I. Average min savings in Units /day (approx.) =168Kwh/day = 920.00/Day.

3. VFD' s for the High Side Pumps of HVAC. Average min savings in Units /day (approx.)= 300 Kwh/day = 825.00/Day.

4. Economizers - Chillers and Condensers Heat Recovery for Hot Water applications.Average min savings 800.00/Day.

5. Conversion of Boiler to Gas fired/Coal fired in place of Oil Fired.

6. Street Light Poles to be lighted by Solar Energy. Average min savings 700.00/Day.

7. Provisions of PES En ergy saver in Lighting feeders 750/day

8. Centrifuge Filtration Technology for Furnace Oil. 4500/day

Impact of the measures taken as above for reduction of energy consumption andconsequent impact on the cost of production of goods.

The various measures taken as above for energy conservation have resulted insubstantial saving of energy and fuel and have resulted in reduction in expenses and thusthe cost of production has also reduced.

Particulars with respect to Conservation of Energy

A. Power and fuel consumption

Particulars Period ended 31st March 2014 Year ended 31st December 2012
1. Electricity
(a) Purchased Unit (KWH) 5886716 4388341
Total amount (In Million) 46.11 33.42
Rate/unit () 7.83 7.61
(b) Own Generation through
diesel generator Unit KWH 126693 168644
Units (KWH) per litre of diesel oil 2.43 3.13
Cost/unit () 23.50 14.56
2. Fuel Consumption
(i) Coal (Kg.) Nil Nil
(ii) Light Diesel Oil (Ltr.) Nil Nil
(iii) Diesel (Ltr.) 53280 53267
(iv) Furnace Oil 521988 390690

B. Consumption per unit of production

The working of consumption per unit of production is practically not possible as theoperations of the Company involve multiple products.

TECHNOLOGY ABSORPTION

Particulars with respect to the technology absorption are as under:-I. Research andDevelopment (R & D)

• Specific area has been created for in-house R&D at large sea le. Research& Development is mainly concentrated in development of new formulations. The Research& Development activities are going on in the fields of NDDS such as effervescentsustained release center filled lozenges fast melting tablets. The company hasintensified its focus on R&D in nutritional & animal health care division. Thedevelopment activities are aimed at:

i. New product development.

ii. Opening of the new segments & market for the company.

* Benefit derived as a result of the above R & Di

The above R&D activities have and will result in development of new formulation asindicated above & some of which have already been launched in international markets.The company expects that the above activities would help in the development of newproducts & will help the company to move into new segments & catering to a newcategory of customers in future at reduced cost.

• Future plan of action:

In order to strengthen the research and development and to create intellectualproperties for providing safe cost effective contemporary and quality therapeutics thecompany is planning to set-up a high-tech R&D C enter well equipped with latesttechnologies accouterment and highly skilled manpower dedicated to the profession.

• Expenditure on R & D (15 months ending 31.03.2014):

Capital : NIL
Recurring : 4.62 million on material manpower and manufacturing and other overheads.
Total : 4.62 million.

Total R & D expenditure as a percentage of Turnover (including other income):0.08%. However as per the established accounting policy the expenditure incurred onR&D remains merged within various heads.

II. Technology absorption adaptation and innovationl

• Efforts in brief made towards technology absorption adaptation andinnovation.

• The company has been adapting new technologies by keeping the tracks of latestdevelopment in the field of technology. The company is well aware of the need to procure& install latest technology.

# Benefits derived as a result of above efforts

The main benefits derived as a result are cost reduction quality improvement & newproduct development.

• Details of Imported Technology:

There is no technology imported during the period under review.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange used and earned:-

Particulars Period ended 31 March 2014 Year ended 31 December 2012
i Total Foreign Exchange earning 4402.43 3175.34
ii Total Foreign Exchange outgo 3183.90 2363.88

On behalf of the Board of Directors

Shashikant Patel

Chairman & Managing Director

Mumbai 27th November 2014

.