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Directors Report of 20 Microns Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure to present their 29th Annual Report and the Audited Annual Accounts for the year ended 31st March, 2016.

Financial Results

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

['' In Lacs]

Particulars

2015-16

2014-15

Total Revenue

33970.47

31966.42

Profit before Depreciation, Interest and Tax (PBDITA)

4564.60

2975.98

Interest for the year

2417.88

2492.05

Depreciation for the year

931.48

945.20

Profit/(Loss) before tax and Exceptional item

1215.24

(461.27)

Exceptional items

0.00

0.00

Profit/(loss) for the year

1215.24

(461.27)

Tax liability :-

Current Year''s Tax

270.00

-

MAT Credit

(270.00)

-

Deferred Tax Liability/(Asset)

91.78

(55.57)

Prior period Tax Adjustment

189.15

-

Wealth Tax

-

1.71

Net Profit/(Loss) for the year

934.31

(407.41)

State of Company''s Affairs

During the year under consideration, following important

developments have taken place -

- Your Company has availed Credit facilities from Consortium of banks consisting of IDBI Bank Limited (IDBI) and State Bank of India (SBI.) In view of possible stress on cash flow of the company, at the instance of the company, loans granted were restructured by both the banks and it was implemented on 31st March 2015. Main terms of restructuring were deferment of repayment of term loan matching with future cash flow of the company, marginal reduction in interest rates subject to recompense for sacrifice made if any and refund of term loan installments paid during 2014-15. Company has been regular in repaying its dues of principle as well as interest from date of restructuring, till date, without any default. SBI informed the company on 4th April 2016 that under Asset Quality Review (AQR) undertaken by Reserve Bank of India (RBI) its account has been classified as NPA with effect from 1st April, 2014. After hectic efforts and follow up, company was provided with the following reasons for such classification. “Perfection of securities was done post implementation date. Hence, package may not be taken as implemented and Pledging of shares was not completed. ”. AQR is an internal process of Regulator and Bank. Company has suffered on account of process lapse on the part of the bank. The Company has completely denied in writing to bank of such delay and a very damaging action by bank in view of the fact that all dues to banks are paid till date. A strong request has been made to bank to re-classify account as standard asset as soon as possible. IDBI Bank continues to classify the account as standard asset.

- Net Worth of the Company is increased to '' 8401.75 Lacs as on 31st March, 2016 compared to '' 6967.44 Lacs as on 31st March, 2015.

Dividend

To conserve the resources, your Directors have not recommended dividend during the year under consideration.

INVESTOR EDUCATION AND PROTECTION FUND

Company during its IPO in the year 2008 had refund orders as on 25/09/2008 from which '' 27,200/- remained unclaimed in “UNPAID REFUND ACCOUNT”, which were then transferred to “INVESTOR EDUCATION AND PROTECTION FUND” pursuant to the provisions of Companies Act, 2013 after completion of seven years on 25/ 09/2015.

Material Changes and commitments affecting financial position between the end of the financial year and the date of report

There have been no material changes and commitments affecting financial position between the end of the Fiscal Year and the date of the report.

MANAGEMENT DISCUSSIONS AND ANALYSIS

Analysis of sector-wise performance of the Company for the fiscal year 2015-16 and future outlook are given hereunder. The outlook is based on the assessment of the current business scenario and Government Policies. Any deviation to the developments - future and other - may affect the variances in the outlook.

Industry Progress & Outlook

A few minor changes in the mining scenario for leasing and auction of mines has been brought into notice by the Central government. Minor modifications in the royalties have also been announced. Its implementation is what is to be seen in the near future. Apart from that, not many significant changes have been noticed or realized in the Industrial Minerals industry that the Company operates in. This industry still predominantly functions in an unorganized way wherein a limited players are trying to get their act through and shift their focus in an organized way segmenting them in the category in which 20 Microns operates since more than few decades. India has always been a self sufficient nation with well endowed natural mineral resources in the league of larger nations of USA, Europe, and China. This industry falling under the larger Minerals & Mining sector is a significant contributor to India''s GDP growth which is currently on the decline.

The Industrial Minerals sector provides the basic raw materials to the manufacturing sector and has always been considered as an important segment for the Indian economy. The mining sector has been reeling for few years now, under a lethal mix of high borrowing costs on one hand and environmental and regulatory policy paralysis on the part of the government on the other hand. But with the new government in place, who has had a brief history of bringing reforms in the mining industry, the hope has revived in the industry to bring in some major growth oriented mining and mineral development policy reforms in the next few years which should boost this industry to the next level.

Bulk Minerals are usually transacted in high volumes and are characterized by bulkiness in extraction, transportation and consumption. The extraction of these minerals involves shallow depth mining but with a considerable quantity of over burden removal and waste generation. The mining of bulk minerals is also perceived to disturb the eco-system beyond its resilience. Understandably, the mines, from where these minerals are extracted are large mines and their clearances are easily caught in the quagmire of environmental, forest and other clearances. Hence, there is need for developing a wide spread understanding for the strategic value of different minerals. On the other hand, the demand for these minerals is dependent on the demand of the user industry, which is also produced in bulk.

Much greater emphasis is required on development of mineral deposits by way of prospecting and zero-waste mining. The Indian government does not formally define mining as a core industrial activity. Rather it is viewed as more often as an ancillary raw material industry. The mining legislation always gave accent to regulation which emphasized management of the mines rather than on exploration and development.

The future should therefore usher in an era of mineral development with socio-economic development as the focus. A significant amount of mineral potential still lying untapped could contribute enormously to the country''s GDP if the challenges are overshadowed by a high flow of FDI in this sector.

The mining industry in India has however started to shape the future direction of this engagement towards an inclusive agenda for improving livelihoods of the local populace, bringing in much needed investment, job, wealth creation and government revenues.

The future therefore now lies on deployment of latest technologies as well as interpretation of geological data to its best advantage for opening up of new mines. As mineral exploration is a key to attracting investment in the mining sector, separate legislation and procedure for grant of prospecting/exploration licenses is required.

Product wise performance

COATING & CONSTRUCTION DIVISION:

The product range for CNC division includes a varied application base with the majority share lying with Paint Industry inclusive of Architectural, Industrial and Powder Coatings and a minor share with the Allied base of industries catering to Agrochemicals, Adhesives & Sealants, Construction, Cosmetics, Printing Inks, Oil Well Drilling, Foundry, Ceramics, and many others.

The year 2015-16 was quite challenging in itself due to the overall slowdown in the industrial segments across India, and despite in such a sluggish scenario, CNC division was able to manage the growth of above 5 % in terms of Value and 9% in terms of volume over the previous financial year which contributes substantial of revenue to the company''s total sales. It''s also remarkable to note that our growth pace has been consistently maintained in Major Paint Companies by providing them value added as well as import substitute products and even in the commodities segment, we have introduced various premium products which have given them substantial cost benefits in their product formulation.

The paint industry can easily grow at 15% annually over the next few years from its current size, as the per capita paint consumption in India which is a little over 4 kgs is still very low as compared to the developed western nations. Therefore, as the country develops and modernizes, the per capita paint consumption is bound to increase. Considering this scenario, major paint companies have started their new lines of production during the year and also have plan to establish their newer production Units to come up with larger capacities across the country to cater the demand being generated in Tier -II & III cities, especially in the segment of Decorative Paints including exterior wall paints, interior wall paints, wood finishes and enamel and ancillary products such as primers, putties etc. Decorative paints account for over 70% of the overall paint market in India which consumes majority of the Industrial Minerals and being a premium supplier and having a close association with the market leader of the segment, we expect good volumes of business in the near future which will support us to get stable growth in the future too.

Reports of various institutes & conducted studies show that the corporate are hopeful for a better turnaround in the Economy and improvement in Investment Climate in the light of expected reforms in Government''s Economic policies, boost up the infrastructure and housing sector as a whole which should eventually support the growth in the Paint industries along with medium & small scale paint

Manufacturers by adopting the new process technologies to produce high-end product and expanding their network in all segments by accepting the new products faster which helps us to increase the volume of our specialty products.

However, as with other fields, some challenges also exists in this promising sector that can affect the growth trajectory of the paint industry, if not handled accordingly. For instance, the industry is highly raw material-intensive and any fluctuation in the availability of raw material leads to substantial price fluctuation in paint production costs. The pressure is on the Raw material suppliers who are undergoing tremendous pressure to maintain the cost coupled with new entrants in the market, which has resulted in the erosion of bottom line and the challenge is going to be similar in the coming financial year.

The industry expects an outperforming in 2016-17 and we anticipate outgrowing our customers demand with the best possibilities of a great mix of commodity and specialty Products

VAD - VALUE ADDED DIVISION

In the current global scenario, year 2015 -16 was full of challenges for us and the encouraging part of the story was that under such adverse situation we did well and maintained a strong EBIDTA or bottom line. In such critical market situation our VALUE ADDED DIVSION in the Year 2015-16 successfully achieved the target which itself is a commendable achievement.

Paper Industry

The paper industry in India is more than a century old. At present there are over 850 paper mills manufacturing a wide variety of items required by the consumers. In last 6065 years, the number of paper mills has increased from just 17 mills in 1951 to more than 850 units engaged in the manufacturing of paper and paperboard. The paper industry in India could be classified into 3 categories according to the raw material consumed. Wood based, Agro based & Waste paper based. The Indian Paper Industry accounts for about 1.6% of the world''s production of paper and paperboard. The Indian Paper Industry is among the top 12 Global players today, with an output of more than 13.5 Million tonnes annual with an estimated turnover of '' 35000 Crores. The mills use a variety of raw material viz. wood, bamboo, recycled fiber, bagasse, wheat straw, rice husk, etc.; approximately 35% are based on chemical pulp, 44% on recycled fiber and 21% on agro-residues. India is self-sufficient in manufacture of most varieties of paper and paperboards. Import is mainly related to certain specialty papers such as light weight coated variety of paper, cheque paper, etc. Paper Industry in India is moving up with a strong demand push and is in expansion mode to meet the projected demand of 20 Million tonnes by the year 2020. Thus paper industry in India is on the growth trajectory and is expected to touch 8.5% GDP in the coming years. Vast changes have taken place in the field of printing paper, duplex boards, newsprint and so forth. Modern management along with latest technological machines is used for the completion of various projects. Nowadays, foreign investors are interested in setting up new plants for manufacturing paper to bring forth huge revenue to the paper industry. The paper industry is planning to widen its horizons with the help of joint ventures and new investors. Also slurry business penetration with long terms contractual business with the customer had thrown, open new segments with excellent potential for the business. However, the paper industry is facing many challenges due to the shortage of raw materials and the rise in population. Our special effort is towards promoting our Submicron Calcium Carbonate in Paper application which is contributing towards the positive trend in our sales pattern and contributing towards the EBIDTA. This year we have achieved growth in Quantity, Value and EBIDTA against Projection.

Plastic Industry

Globally the polymer industry is expected to grow at a considerable pace & most lucrative business is growing bigger by the day, as the demand for polymer is driven by growth in end use markets, such as agriculture, packaging, automotive, infrastructure, transport, rails and telecommunication mainly from emerging economies. Polymer is continuously substituting metals, glass, paper, and other traditional materials in various applications due to its lightweight and strength and the design flexibility they offer along with low-cost. Thermoplastics segment is expected to witness the highest growth over the next few years. Increasing applications of engineered plastics in various fields, such as construction, automotive, and industrial manufacturing equipment is expected to drive this market. India being relatively low in per capita consumption of plastics is expected to triple over next decade. In-spite of drastic drop of Polymer price due to crude oil price slump, the entire year 2015 -16 saw a very volatile and uncertain trend for polymer processing industries forcing many industries to either shut down or cut down their production activities by substantial degree. However in such adverse scenario, our company registered fair bit of success in terms of achieving sales Quantity and EBIDTA over this period.

PVC Pipe Application : The PVC Pipe application has suffered huge set back due to severe drought in many places in India and thereby the requirement of Agriculture and Irrigation Pipes had gone down substantially. Even many of Agro Pipe manufacturers have cut down their production capacity by considerable degree. Added to that the slump in construction industry has reduced the requirement of Plumbing Pipes. Still we have achieved a commendable growth in Quantity, Value and EBIDTA in this application against projections.

PVC Cable Application : In the PVC Cable application due to the massive slow down in construction industry and also lack of government projects the requirement of Cable manufacturing has made a nosedive. Almost all leading Cable manufacturers in India were working on partial capacity. In spite of all these adverse market scenario, we have achieved a commendable growth in Quantity, Value and EBIDTA in this application against projections.

PP Master Batch Application : As PP MB application is majorly dependent on Automotive Parts, Woven Sack and Plastic carry Bags the market is severely affected by the recession in the related industry and also the restriction imposed by government in related to environmental hazard. In such adverse situation we also got some set back in getting proper kind of products from our overseas unit and as a matter of fact the growth in this segment got terribly affected in the year 2015 - 16. In The year 2015 - 16 we had also achieved in terms of Quantity, Value and EBIDTA against Projections.

Today''s paradigm shifts are posing exciting challenges and favorable opportunities, which we are addressing effectively to optimally position ourselves to secure concentrated business areas where we have clear sights of more market penetration and value addition. These efforts are kept ongoing and a separate team has been formed to promote and market above products on a consistent basis and we are confident of benefiting through this policy in the years to come. We have taken many positive steps in this direction and has concentrated in promoting our value added products in polymer application. We have increased the sale of speciality products like Sub Micron Calcium Carbonate, Synthetic Barium Sulfate, Desiccant, Pacifier and Processing Aids. These are the products will be contributed in a positive way to our EBIDTA.

Rubber Application

Rubber application is one of the important vertical business for the Company in the recent years. Indian Rubber industry consists of above 4600 units across the country comprising of 30 large scale, 300 medium scale and around 4400 small and tiny scale units. Indian rubber industry has been growing along with the strength and importance, as a part of India''s burgeoning role in the global economy. The rubber industries products are like tyres, tubes, auto parts, belt, cables, hoses etc. India is the world''s largest producer and the third largest consumer of natural rubber.

During 2015-16, Rubber Industries growth marginally declined compared to previous year due to unfavorable market conditions, main constrain was continued rate reduction of rubber and carbon black. Even though, in these conditions, our Company''s Rubber division has achieved sales targets with increased profit as compared to previous fiscal. Several new products are also being developed for the partial replacement of synthetic silica and carbon black which is widely used as filler in the segment. Also company is emphasizing to focus more on value added products like Vaporlink (product which partially replaces carbon black), Wax, Zinkomer - 100% replacement of Zinc Oxide. Rubber processing aid like PE for lubrication and Vaporoxol series use as desiccant which are high value products, can boost the sales turnover in coming future. This year we have developed new product viz. MC Wax.

As India is growing hub for Rubber Industry for automobile and other like industry and also getting quality natural rubber, Company is expecting good growth in our Rubber application.

PHARMA - HERBAL DIVISION

20 Microns Pharma Division launched its Herbal - Ayurvedic Tablets viz. “Dia-B-Microns” & “Dia-B-Microns FORTE” which is safe and reliable herbal medicine for effective management & helpful in sugar control. Since Dia-B-Microns is completely Herbal product, it has no side effects. This has now been penetrated majorly in the States of South & North India besides Gujarat & Maharashtra in its span of about 3 - 4 years.

A new herbal - ayurvedic medicine is about to be launched viz. “Arthritol” which is effective for helping control Arthritis.

CONSTRUCTION CHEMICALS DIVISION

Since 1st October, 2015 another landmark of the Company, is the innovation of “Mirconsil 30C” and “NANOSIL” which are special mineral additive for Construction activities by self curing internal plaster application, mixed with cement & sand during dry mix.

MICRONSIL 30C - This application is suitable for Mortar and plastering. A surface like bricks, stone, blocks etc.. Application is user friendly similar to conventional method of plastering. It saves 30% of the Cement consumption with added and proven major benefits like reducing the wastage of cement besides saves potable water for curing; power consumption etc. It can be called A”Green plasterA” - By reducing cement up to 30%.

NANOSIL - is a solvent-free high reactive Silicone based penetrating waterproof agent, developed to provide water repellency to porous construction materials such as cement blocks, mortar, plaster, painted surfaces and grouts as it penetrates deep into the surface voids and forms bonds in the voids.

This unique formula incorporates leading molecular nanotechnology; putting an end to water and moisture migration through any porous cementations substrate. The treated surfaces will show no change in visual appearance from application and the surface that will not chip, flake, delaminate or breakdown with UV light exposure.

EXPORTS

Export Opportunities in the Lead

Global economic slowdown affects all emerging markets. In value terms, Export to Africa and Middle East has held up the best. However export sales of 20 Microns product sales has gone 25% up over last year. Mineral export from India is growing spiky sharp over few years.

Advancement in Technology has given a great acceleration to Indian resources to compete with global Giants. YOY, it has been observed that export opening has also increased due to US dollar appreciation against Indian Rupee which becomes incitement to exporter. Environment restriction in Europe and USA for discouraging mining has actively played a role to search resources in India. Indian mineral market will have better opening since China has also put limitations export quota for natural resources specially on Talc.

For Future development, company has started aggressive marketing activity by way of arranging technical meet and conference which will help to generate more customer base across the globe.

Since most of the International; players has their own manufacturing facilities in India, It becomes easy for them to source and to extend approval for their global use.

Considering contemporary standing, 20 Microns accomplished to sale their products in 56 countries across the globe. In the year 15-16, the Company has been able to encapsulate bulk business of Calcined Kaolin in Egyptian and Ethiopian markets and anticipating to initiate bulk contract in European countries for their major products which will give a very good value addition in year 2016-17.

Export Sales Comparison is here under :

Company is targeting around 19% growth for year 2016-17 for export sales over last year.

MINING

Your Company has been a pioneer in White Industrial Minerals and possesses mining leases having sizable mineral reserves of 57.590 Lacs MT and 96.492 Lacs MT and the life of the mine is more than 25 years at current capacity. The reserves shown in the table below are located in the potential mineral block.

Reserves in Mining Leases

Status as on 31.03.2016

RESEARCH AND DEVELOPMENT

Our steadfast commitment to research and development has been the force behind success of your company. Our innovative products and services add value to a variety of things that touch peoples'' lives every day like Paints & Coatings, Plastic, Paper, Rubber, Ink & Pigments, Agrochemical, Ceramic & Glass, Adhesive & Sealant, Steel

& Foundry, Construction, Cosmetic, and Water Treatment.

Our R&D is focused on energy conservation and protection of environment. We help to reduce CO2 emission by replacing TiO2 and carbon black in various applications with our products. The strong technical support from R&D helps your company to become a non-waste producing organization. Our every by-product in some way or the other is utilized in other processes within and outside the company.

As a world leader in mineral base specialty we have continuously improved our technical implementation of knowledge. We already have the following application centre under one roof:

1. Product Development Centre

2. Paints & Coating Application Centre

3. Rubber & Plastic Application Centre

4. Paper Application Centre

We have further added new dimensions to this under the following heads:

1. Ceramic Application Centre

2. Foundry Application Centre

3. Construction Application Centre

4. Cosmetic Application Centre

Innovative Products Developed during the year 2015 - 16:

1. Glowtox Plus

2. Glowtox 50

3. Micronsil 30 C Plus

4. FMSIL 412 Plus

Note :

1. Company is not having any associates or joint venture companies as on 31.03.2016

2. The Company has not liquidated or sold any of its subsidiary companies during FY 2015-16

PART B - Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures The Company is not having any Associate Company or Joint Venture Company as on 31st March, 2016

For and on behalf of the Board of Directors of 20 Microns Ltd.

(Chandresh Parikh) (Rajesh C. Parikh)

Executive Chairman Chief Executive Officer and

Managing Director

Place : Waghodia, Vadodara

Date : 23rd May, 2016


Mar 31, 2015

Dear Members,

The Directors have pleasure to present their 28th Annual Report and the Audited Annual Accounts for the year ended 31st March, 2015.

Financial Results

The Company's financial performance for the year ended 31st March, 2015 is summarized below:

(Rs. in Lacs)

Particulars 2014-15 2013-14

Total Revenue 31966.42 29915.28

Profit before Depreciation, Interest and Tax (PBDITA) 2975.98 3185.69

Interest for the year 2492.05 2168.96

Depreciation for the year 945.20 1007.51

Profit/(Loss) before tax and Exceptional item (461.27) 9.12

Exceptional items - -

Profit/(loss) for the year (461.27) 9.12

Tax liability :-

Current Year's Tax - 9.00

MAT Credit - (9.00)

Deferred Tax Liability/(Asset) (55.57) (4.99)

Wealth Tax 1.71 1.05

Net Profit/(Loss) for the year (407.41) 13.06

State of Company's Affairs

During the year under consideration, following important developments have taken place,

a) Debt Restructuring by Consortium Bank :- As the capacity utilization of newly expanded capacity was very low due to sluggish demand the expected cash generation was not taking place and it was expected to have impact on the repayment schedule of various term loans availed by the Company. Company had approached its Bankers with a request to restructure repayment schedule of various terms loans, consortium bank approved the same in the Month of March 2015 giving effective date as 1st April 2014 and as a result the installment which were due during the year were restructured along with interest payable there on.

b) The restructuring of various term loans will help improvement in liquidity position of the Company over a period of time.

c) During the year various cost factors such as Raw Material, Energy Cost, Freight Cost and Finance cost have given negative impact on the overall margin of the business which has impacted overall profitability of the business.

d) Company had devised a strategy to ensure higher capacity utilization of various plants during the coming year which will increase overall performance of the Company in future.

e) Net Worth of the Company is reduced to Rs. 6967.44 Lacs as on 31st March, 2015 compared to Rs. 7440.81 Lacs as on 31st March, 2014.

Dividend

Due to loss, your directors have not recommended dividend during the year under consideration.

Material Changes and commitments affecting financial position between the end of the financial year and the date of report

The Company has issued and allotted 14,70,600 Equity shares of the face value of Rs. 5/- each at a premium of Rs. 29/- per share upon conversion of equivalent Compulsorily Convertible Warrants of the face value of Rs. 34/- each.

FIXED DEPOSITS

The Company has started accepting the deposits only from the shareholders of the company pursuant to the provisions of Companies Act, 2013 and Rules made thereunder. The said Scheme was approved by you at your Extra-ordinary General Meeting held on 24th May, 2014

As on 31.03.2015, Fixed Deposits from Shareholders stood at the total of Rs. 917.31 Lacs. No deposits are due for repayment on or before 31.03.2015.

The company has not made any default in repayment of deposits or interest due thereon.

The deposits accepted upto the 31st March, 2014 pursuant to Companies Act, 1956 and interest thereon will be repaid to the depositors on the date of maturity of respective deposits. In this regard, the Company has filed petition with Company Law Board praying to allow the repayment as per maturity of respective deposit only. Matter is pending before Company law Board. The details of outstanding amount of unsecured deposits accepted by the Company upto 31st March, 2014 and interest thereon, as per the then scheme of the Company, pursuant to Companies Act, 1956 is as under -

Number of Deposit Interest Depositors Rs. in lacs Rs. in lacs

(a) From Share Holders 269 273.09 22.03

(b) From Public 1148 606.91 49.42

TOTAL 1417 880.00 71.45

The Company is liable to comply with the provisions relating to acceptance of deposits under the Companies Act, 2013 and Rules made there-under and any amendments made from time to time.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS - 21) on Consolidated Financial

Statements, the audited consolidated financial statement is provided in the Annual Report.

Subsidiaries, Joint Ventures and Associates

As on 31st March, 2015, we have 03 subsidiaries. During the year, the Board of Directors (the Board) reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement in the prescribed format AOC-1 is appended as Annexure A to the Board's Report. The statement also provides the details of performance, financial positions of each of the subsidiaries.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on our website www.20microns.com. These documents will also be available for inspection during business hours at our registered office in Waghodia, Vadodara, India.

Directors' Responsibility Statement

The directors report that

i) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures from the same.

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 31st March, 2015 and of the profit of the Company for the year ended on that date.

iii) The Directors have 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) The Directors have prepared the annual accounts on a going concern basis.

v) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

General Shareholders Information

General Shareholder Information is given in the Report on Corporate Governance forming part of the Annual Report.

Particulars Regarding Employees

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure B to the Board's Report.

In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, we have to state that since there are no employees falling within the purview of the said requirements, the same has not been annexed herewith.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report and the Auditor's Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report.

Secretarial Audit

Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexure to this report. No adverse comments have been made in the said report by the Practicing Company Secretary.

Cost Audit Compliance

Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956, Cost Audit Report for the financial year ended 31/03/2014 was submitted to the Central Government on 29/09/2014.

Related Party Transactions

Particulars of transactions with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2 is annexed in Annexure C to the Board's Report.

Extract of Annual Return and other disclosures under Companies (appointment and Remuneration) Rules, 2014

The Extract of Annual Return in form No. MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed in Annexure D hereto and forms part of this report.

Particulars of Loans, guarantees or investments

Loans, guarantee and investment covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

Conservation of Energy, technology absorption, foreign exchange earnings and outgo

Information as per Companies(Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure E forming part of this report.

Risk Management Policy implementation

In today's economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your Company's risk management is embedded in the business processes. The Board of Directors of the Company has identified the following risks:

Sr. Department Risk Factor No.

1. Mining - Increase in Regulatory and legislative Compliance

- High Fuel Cost

- Local Community activist

2. Source/Purchase - Change in Rules/Regulations relating to Tariff

- Quality Compliance

- Fluctuation in Logistic Cost

- High risk that our vendor may sell same products to our competitor and grab our newly developed market, for developing such product we have spent much time and money

3. Operation/Production - Quality Compliance of plant

- Compliance to various laws relating to environment, health and safety, electricity etc

- Obtaining and renewing various licenses

4. Logistics - increase in railway freight

- Change in policies by Road and Transport Authority

5. Marketing / Sales - Competition

- Quality Problem. Frequent Quality Issues leading to Customer Loss

- Attrition Ratio and losing key employees to competition

- Logistic Cost

- Threat of Import Sales

6. Finance - Dependency on workbanker

- Frequent change in bank interest rate, exchange rate and taxation rates

7. Research and Development - Maintenance of database of ongoing Research

- Leakage of information

8. HR and Administration - Employee Turnover

- Selection of wrong person

- information leakage

- Compliance of various labour laws and deduction of TDS

9. Legal, Secretarial, - changes in corporate laws and Trade Marks non-compliance penalty involved therein

10. Insurance - exclusions given in each policy

- hidden terms and conditions of policies

11. Export - Change in Government Policy

- change in exchange rate

- issues relating to Quality of Material and Packaging of material (especially after reaching foreign warehouses)

12. Information Technology - Data backup and its security,

- insufficient software licenses,

- frequent change in Technology

- Risk of Data Loss/hacking

Corporate Social Responsibility:

The Corporate Social Responsibility Committee (CSR Committee) has been formulated. The Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, has been approved by the Board.

The CSR Policy may be accessed on the Company's Website at the link: http://www.20microns.com/admin/upload/csr/ CSR%20Policy.pdf

As part of the Corporate Social Responsibility, initiatives through the years, the Company established its arm - 20 Microns Foundation Trust in 2001 for the earthquake affected people. Post-earthquake rehabilitation, continuing the CSR activates in mind company thought to focus its activates on a very commonly spread health disease i.e. Diabetes. As a step forward under the 20 Microns foundation a charitable trust and the company support, "The Diabetes Centre" was inaugurated by 20 Microns Foundation Trust on 14th November, 2008 being World Diabetes Day.

During the year, the company has not spent any amount on CSR activities. The Company faced the financial crisis and restructuring of advances was approved by the Consortium Banks i.e. State Bank of India and IDBI Bank. In such a gloomy situation, it was not possible for the Company to spend for CSR activities. However, as reported earlier in Management Discussion & Analysis, CSR activities being carried out by the management of the Company, the said activities were carried on with the donations collected by the Trust from other sources. The Company will try to contribute to Corporate Social Responsibility to serve the general public at large during current fiscal year. The annual report on our CSR activities is appended as Annexure F to the Board's Report.

Internal Control System Adequacy

The Company has established proper and adequate system of internal control to ensure that all resources are put to optimum use and are well protected against loss and all transactions are authorized, recorded and reported correctly and there is proper adherence to policies and guidelines, processes in terms of efficiencies and effectiveness. The Company's internal control systems are supplemented by an extensive programme of internal audit by an independent firm.

All the transactions are conducted using the IT interface and the business processes are further audited by internal auditors.

The Company's internal control systems are also periodically tested and certified by the internal auditors. The Audit Committee constituted by the Board constantly reviews the internal control systems.

Directors and Key Managerial Personnel

The Board has appointed Dr. Ajay I. Ranka as an Additional Director w.e.f. 27th September, 2014. He holds office of Additional Director up to the ensuing Annual General Meeting of the Company The Company has received a notice u/s 160 of the Companies Act, 2013 from a shareholder of the Company proposing the candidature of Dr. Ajay I. Ranka for the office of an Independent Director to hold the office upto the conclusion of the annual general meeting of the Company to be held in the calendar year 2019.

In accordance with the Articles of association of the Company, Mr. Rajesh C. Parikh, Chief Executive Officer and Managing Director of the company, retire by rotation at this Annual General Meeting and being eligible offers himself for re- appointment.

During the year under review, the Members approved the appointments of Mr. Pravinchandra M. Shah, Mr. Ram Devidayal, Mr. Atul H. Patel and Mrs. Darsha R. Kinani as Independent Directors of the Company who are not liable to retire by rotation. Mr. Bharat Kanani appointed as Chief Financial Officer of the Company w.e.f. 06th August, 2014.

The Company has set criteria for performance evaluation of Independent Directors, Board, Committees and other individual Directors. The note on familiarization programme to Independent Directors are put on the website of the Company at the link http://www.20microns.com/admin/upload/ Miscellaneous/Familiarization%20Programme%20for% 20Independent%20Directors.pdf

The Company has also prepared a Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management Employees which is put on the website of the Company at the link -

http://www.20microns.com/admin/upload/

Remuneration_Policy/20ML_Remuneration%20Policy.pdf

None of the Directors of the Company is disqualified under Section 164(2) of the Companies act, 2013. As required by law, this position is also reflected in the Auditors' Report.

In accordance with provisions of Section 149 of the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges, Mr. P M. Shah, Mr. Ram Devidayal, Mr. Atul Patel Mrs. Darsha Kikani and Dr. Ajay Ranka have given a declaration to the Company that they meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013 read with Clause 49(I)(A)(iii) of the Listing Agreement.

Auditors

A. Statutory Auditors

The Company Auditors, M/s Manubhai and Shah, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. In accordance with Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, it is proposed to appoint Manubhai and Shah as Statutory Auditors of the Company for one year at this Annual General Meeting.

B. Internal Auditors

The Company has appointed M/s. N C Vaishanav and Co., M/s. P Mani and Co. and M/s. Deopura and Associates, Chartered Accountants as Internal Auditors of the Company for the F.Y 2015-16, for the Western Region and Eastern Region, South Region and North Region, respectively.

C. Cost Auditors

The Company has appointed M/s Y.S. Thakar and Co., Cost Accountants, to audit its cost accounting records relating to Mining and Metallurgy of ferrous and non- ferrous metals for the Financial Year 2015-16 subject to ratification of his remuneration by shareholders of the Company.

The Company is seeking the ratification of the Shareholders for the remuneration payable to M/s YS. Thakar and Co., Cost Accountants as the Cost Auditors of the Company for the Financial Year 2015-16 vide resolution no. 4 of the Notice of AGM.

D. Secretarial Auditors

As per provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company is required to appoint Secretarial Auditor to carry out Secretarial Audit of the Company. The Company has appointed M/s. J.J. Gandhi and Co., Practicing Company Secretaries as Secretarial Auditors of the Company for the FY 2015-16.

Significant and material orders

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

Disclosures:

CSR Committee

The CSR Committee comprises of Mr. PM. Shah, Mr. Chandresh Parikh and Mr. Sudhir Parikh, as Members of the Committee.

Audit Committee

The Audit Committee comprises Independent Directors namely Mr. Ram Devidayal, Mr. PM. Shah and Mr. Atul Patel as Members of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement. Vigil Disclosures can made by a whistle blower through an email to the Chairman of the audit Committee. The policy of vigil mechanism may be assessed on the Company's website at the link: http://www.20microns.com/admin/upload/ Miscellaneous/Vigilence%20policy.pdf

Meeting of the Board

Six meetings of Board of Directors were held during the year. For further details, please refer report on Corporate Governance annexed to this Annual Report.

Acknowledgement

Your Directors wish to express their grateful appreciation for the co-operation and support received from customers, vendors, shareholders, Financial Institutions, Banks, Regulatory Authorities and the Society at large.

Deep appreciation is also recorded for the dedicated efforts and contribution of Executives, Staff and Workers of the Company.

For and on behalf of the Board of Directors

Chandresh S. Parikh

Executive Chairman

Place : Waghodia, Vadodara

Date : 07th August, 2015


Mar 31, 2014

Dear Members,

The Directors'' are pleased to present the 27th Annual Report and the Audited Accounts for the year ended 31st March, 2014.

1. FINANCIAL HIGHLIGHTS

[Rs. In Lacs]

Particulars 2013-14 2012-13

Total Revenue 29915.28 28123.26

Profit before Depreciation, Interest and Tax (PBDITA) 3185.59 3720.38

Interest for the year 2168.96 1554.68

Depreciation for the year 1007.51 748.42

Profit before tax and Exceptional item 9.12 1417.28

Exceptional items 0.00 851.93

Profit/(loss) for the year 9.12 565.35

Tax liability : Current Year''s Tax 10.05 148.01

MAT Credit (9.00) 147.00

Deferred Tax Liability/(Asset) (4.99) 239.97

Net Profit for the year 13.06 324.37

2. DIVIDEND

In view of the paucity of resources, the Directors have not

recommended any Dividend.

3. MANAGEMENT DISCUSSIONS AND ANALYSIS

4. FIXED DEPOSITS

As on 31.03.2014, Fixed Deposits from Public and Shareholders stood at the total of Rs. 2135.88 Lacs. 56 deposits totaling to Rs. 26.58 Lacs due for repayment on or before 31.03.2014 were not claimed by the depositors as on that day. The Company is liable to comply with the provisions relating to acceptance of deposits under the Companies Act, 2013 and Rules made thereunder and any amendments made from time to time.

5. SUBSIDIARIES

20 Microns Nano Minerals Limited Your Company holds 99.17% equity shares of 20 Microns Nano Minerals Limited. The said Company is having a state of the art In-house Research & Development facility which is registered with Department of Science & Industrial Research (DSIR), Ministry of Science and Technology, Government of India. During the year under review, the said Company reported revenue from operations of Rs. 1966.27 Lacs and incurred Net Loss of Rs. 16.72 Lacs. 20 Microns SDN. BHD.

Your Company holds 99.99% of 20 Microns Sdn. Bhd. During the year under review, the said Company reported Gross Revenue of RM 28.79 Lacs and earned Net profit of RM 4.22 Lacs (Malaysian currency).

20 Microns FZE

Your Company owns 100 percent of 20 Microns FZE. During the year ending 31/03/2014, the said Company reported Revenue was AED 113.35 Lacs and the Net Profit was AED 21.00 Lacs.

As per Section 212(1) of the Companies Act, 1956, the Company is required to attach to its Accounts, the Directors'' Report, Balance Sheet and Profit & Loss Account of each of its Subsidiaries. As the Consolidated Accounts present a complete picture of the financial results of the Company and its Subsidiaries and in view of General Circular No. 2/2011 dated 08.02.2011 and No.

3/2011 dated 21.02.2011 issued by Ministry of Corporate Affairs, the Annual Report of the Company does not contain the individual financial statements of its Subsidiaries. However, the statement of your Company''s interest in the Subsidiaries as at 31st March, 2014, prepared in accordance with the provisions of Section 212 of the Companies Act, 1956 is attached to the Balance Sheet.

The Annual Accounts of the Subsidiary Companies along with the related detailed information are available for inspection by the shareholders of the Company and of the Subsidiary Companies at the Company''s Registered Office and at the registered office of the concerned Subsidiaries and copies of the same shall be provided to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Audited Financial Statements, based on the same received from the Subsidiary Companies, as approved by its Board of Directors, have been prepared in accordance with AS - 21 on Consolidated Financial Statement read with AS - 23 on Accounting for Investments in Associates.

6. AUDITORS'' REPORT

The Auditors'' Report is clean and there is no qualification in their Report.

7. DIRECTORS

The Board has appointed Mrs. Darsha R. Kikani as an Additional Director w.e.f. 06th August, 2014. She holds office of Additional Director up to the ensuing Annual General Meeting of the Company. The Company has received a notice u/s 160 of the Companies Act, 2013 from a shareholder of the Company proposing the candidature of Mrs. Darsha R. Kikani for the office of an Independent Director to hold the office for 5 [five] consecutive years for a term upto the conclusion of the annual general meeting of the Company to be held in the calendar year 2019.

Mr. PM. Shah, Mr. Ram Devidayal & Mr. Atul Patel, the Independent Directors of the Company, were liable to retire by rotation in terms of provisions of Companies Act, 1956. However, as per provisions of the Companies Act, 2013, the Independent Directors are required to be appointed by Shareholders for a term of upto five consecutive years and they shall not be liable to retire by rotation. Accordingly, it is proposed to appoint them as Independent Directors to hold their respective offices for 5 [five] consecutive years for a term upto the conclusion of the annual general meeting of the Company to be held in the calendar year 2019.

In accordance with the Articles of Association of the Company, Mr. Sudhir R. Parikh, Director - Finance & Mr. Atil C. Parikh, Managing Director, retire by rotation at this Annual General Meeting and being eligible offer themselves for re-appointment.

None of the Directors of the Company is disqualified under

Section 274(1)(g) of the Companies act, 1956. As required by law, this position is also reflected in the Auditors'' Report. In accordance with provisions of Section 149 of the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges, Mr. P. M. Shah, Mr. Ram Devidayal, Mr. Atul Patel & Mrs. Darsha Kikani have given a declaration to the Company that they meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013 read with Clause 49(I)(A)(iii) of the Listing Agreement.

8. CORPORATE GOVERNANCE

As required by the existing Clause 49 VII of the Listing Agreements entered into with the Stock Exchanges, a detailed report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors'' Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

9. GENERAL SHAREHOLDERS INFORMATION General

Shareholder Information is given in the Report on Corporate Governance forming part of the Annual Report.

10. PARTICULARS REGARDING EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with The Companies [Particulars of Employees] Rules, 1975, as amended, we have to state that since there are no employees falling within the purview of the said requirements, the same has not been annexed herewith.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated under the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm as under:

i. The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

ii. Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the accounts on a "going concern" basis.

12. ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

Statement giving the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under the Section 217(1)(e) of the Companies Act, 1956 read with The Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 is annexed.

13. AUDITORS

A. Statutory Auditors

The Company Auditors, M/s. Manubhai & Shah, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. In accordance with Section 139(1) of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, it is proposed to appoint Manubhai & Shah as Statutory Auditors of the Company for one year at this Annual General Meeting.

B. Internal Auditors

The Company has appointed M/s. N C Vaishnav & Co., M/s. P Mani & Co. & Deopura & Associates, Chartered Accountants as Internal Auditors of the Company for the F.Y 2014-15, for the Western Region & Eastern Region, South Region and North Region, respectively.

C. Cost Auditors

The Company has appointed M/s. Y S. Thakar & Co., Cost Accountants, to audit its cost accounting records relating to Mining & Metallurgy of ferrous & non-ferrous metals for the Financial Year 2012-13. The Cost Audit Report was filed with Ministry of Corporate Affairs.

The Company is seeking the ratification of the Shareholders for the appointment of M/s. YS. Thakar & Co., Cost Accountants as the Cost Auditors of the Company for the Financial Year 2014-15 vide resolution no. 5 of the Notice of AGM.

D. Secretarial Auditors

As per provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company is required to appoint Secretarial Auditor to carry out Secretarial Audit of the Company. The Company has appointed M/s. J. J. Gandhi & Co., Practicing Company Secretaries as Secretarial Auditors of the Company for the F.Y 2014-15.

14. ACKNOWLEDGEMENTS

Your Directors wish to express their grateful appreciation for the co-operation and support received from customers, vendors, shareholders, Financial Institutions, Banks, Regulatory Authorities and the Society at large.

Deep appreciation is also recorded for the dedicated efforts and contribution of Executives, Staff & Workers of the Company.

For and on behalf of the Board of Directors

Chandresh S. Parikh Executive Chairman

Place: Waghodia, Dist. Vadodara Date:06.08.2014


Mar 31, 2013

To The Members of 20 MICRONS LIMITED

The Directors are pleased to present 26th Annual Report together with the Audited Statement of Accounts for the year ended 31stMarch,2013.

RESULTS OF OPERATIONS

(Rs.in Lacs)

Particulars 2012-13 2011-12

Total Revenue 28123.26 26770.17

Profit before Depreciation, Interest and Tax (PBDITA) 3720.38 3525.90

Interest forthe year 1554.68 1408.52

Depreciation for the year 748.42 631.80

Profit before tax and Exceptional item 1417.28 1485.58

Exceptional items 851.93 -

Profit/(loss) for the year 565.35 1485.58

Tax liability :-

Current Year''s Tax 148.01 363.25

MAT Credit 147.00 -

Deferred Tax Liability/(Asset] 239.97 44.26

Net Profit/(loss) for the year 324.37 1078.08

OVERVIEW OF ECONOMY

The world economy would grow 3.1 percent this year before accelerating to 4 percent in 2014. The estimates marked a slightly more pessimistic view after November in the Paris-based think tank forecast global growth of 3.4 percent this year and 4.2 percent next year. Notwithstanding policy action aimed at resolving it, the Euro Area crisis has deepened and new interventions have been necessary to prevent matters from deteriorating rapidly. At the end of the fiscal year, due to the high inflation rate, the growth rate of Indian Economy came to around 5.0 per cent is much lower than what was projected.

In this generally depressed scenario, the Company has achieved Gross Sales which stood atRs. 28,516.81 Lacs for the year. The management has taken measures as part of its continuous improvements to strengthen operations and viability. It has widened and improved the product range and price points in domestic as well as international markets to enlarge the customer base.

PERFORMANCE REVIEW

The Indian economy in April 2012 started with a certain flair but after the second quarter, the economy started to slow down and sluggishly ended the financial year with all the sectors of the economy being affected. Your company managed to register a satisfactory growth in spite of the challenging environment. Your Company witnessed slowdown in demand conditions in the last quarter. Industrial coatings segment continues to be impacted due to economic slowdown. Automotive coatings growth was affected due to subdued demand in the auto sector. Your Company''s International Business has recorded a good performance despite all the world''s major economies facing a slowdown. Plastics sector has done well even though economic uncertainty in some sub-sectors continues. Paper also has been through a sinusoidal ride as more competition of imported readymade papers are eating the market share of the domestic paper mills. Rubber was sluggish right throughout the year. Foundry and steel sectors also witnessed a flat curve as a result of the restrictive policies of coal and iron ore mining and pricing by the government.

Your company registered a nominal growth in top line of 6.5%. The bottom lines could have been better. However, higher depreciation, interest cost and overheads resulting from the commissioning of the Company''s fully mechanized jumbo milling manufacturing facility at Alwar, Rajasthan and Hosur, Tamil Nadu had an impact on the profit margins during the second half of this year.

The working of the Company during the year 2012-13 has been impacted due to adverse effect on the operations of the Bhuj Plant because of the shift of fuel source from imported coal base producer gas to Furnace oil. This was done to comply with the requirement of pollution control laws. The functioning has now been stabilized and it is expected that the loss of turnover would be regained in the Financial Year 2013-14.

During the year under report, your Company has achieved a Gross Turnover of Rs. 28516.81 Lacs (Up by 6.5% from Rs. 26768.68 Lacs of the previous year). The operations have resulted in a Net Profit before Depreciation, Interest and Tax [PBDITA] of Rs. 3,720.38 lacs as compared toRs.3,525.90 Lacs of the previous year.

With reference to the exceptional item in respect of loss on derivative contracts of Rs. 851.93 lakhs as included in the Statement of profit and loss of the Company, your Company has taken a pragmatic view, based on legal advice, not to litigate the issue further with the banks for which bank has provided liquidity comfort to the Company.

The company has invested in overseas subsidiary companies for expanding its business and during the year company at Sharjaha FZE has remitted dividend of Rs. 191.43 lakhs (Rs. 252.49 lakhs during the previous year).

PROJECT

During the year the Company has invested total amount of Rs. 72.32 Cr. to expand its micronized minerals and specialty chemical products totaling 89400 M.T.P.A. installing Jumbo mills at Alwar and Hosur and imported Wet grinding mill at Vadadla and calcined clay capacity by 16800 M.T.P.A. installing calciners and refined clay processing plants with 6000 M.T.P.A. for captive use at Bhuj & Tirunelvelly. The project cost has been financed by the Company from term loan borrowing and companies contribution by raising -quasi equity funds. It is expected to result into additional sale of manufactured products of approx. Rs. 99 Cr. subject to market conditions.

The growth rate is expected to continue along with higher profitability and inspire the Company and its dedicated staff to focus more attention on all its applications. The Current

year and all-coming years would walk on the foot prints with highest earnings and the continued support of effective sales force, improvement in production facilities and implementation of innovative ideas.

During the year, your Company vigorously followed steps to improve plant efficiency, customers'' satisfaction, cost reduction and exploitation of new applications. The Company is still continuing to consolidate, relocate and outsource manufacturing by constantly reviewing market scenario. Product development is an ongoing process carried out in a well equipped R&D Centre. This will enable the Company to review the range of products offered to the Customers.

The Company is always looking on enhancing the interest of all the stakeholders by better utilization of all its resources.

Your Company expects robust growth in existing products and contribution from new products by adopting the following strategies:

- Expansion of Mineral Portfolio by adding new products;

- Enhance value chain by launching new synthetic minerals products by leveraging R&D strength;

- Expand Geographical locations by acquiring Mines and infrastructure facilities in Mineral rich countries in Middle East & South East Asia.

DIVIDEND

Your Directors are pleased to recommend the payment of dividend 0 10% i.e.Rs. 0.50 per Equity Share of the face value of Rs. 5/- for the year under review. The dividend, subject to approval of shareholders, will be paid to the Shareholders whose name appears on the Register of Members as on the Book Closure dates.

SUB-DIVISION OFSHARES

The Shareholders of the Company, through Postal Ballot, considered and approved the sub-division of the Equity Shares of your Company whereby 01 (one) Equity Share having a nominal face value of Rs. 10/- (Rupees Ten Only) is sub-divided into 01 (one) Equity Share of nominal face value of Rs.5/- (Rupees Five Only).

FINANCE

Your Directors convey their grateful thanks to State Bank of India and IDBI Bank Limited for their continued support and co-operation.

FIXED DEPOSITS

As on 31.03.2013, Fixed Deposits from Public and Shareholders stood at the total of Rs. 1760.15 Lacs, 44 deposits totaling to Rs. 22.30 Lacs due for repayment on or before 31.03.2013 were not claimed by the depositors on that day. Out of these, deposits of Rs. 7.90 Lacs have since been repaid or renewed at the option of 19 depositors. No instructions have been received so far for the balance of Rs. 14.40 Lacs from 15 depositors. These deposits, if not claimed in future, shall be deposited in the ''Investors Education and Protection Fund'' in due course, as per the provisions of the Companies Act, 1956.

SUBSIDIARIES

a) 20 Microns Nano Minerals Limited

Your Company owns 99.17 percent of 20 Microns Nano Minerals Limited. The said Company is having a state of the art In-house Research & Development facility which is registered with Department of Science & Industrial Research (DSIR), Ministry of Science and Technology, Government of India. During the year under review, the said Company reported revenue from operations of Rs. 2,854.82 Lacs and Net loss of Rs. 35.39 Lacs.

b) 20MicronsSdn.Bhd.

Your Company owns 99.99 percent of 20 Microns Sdn. Bhd. During the year under review, the said Company reported Gross Revenue of RM 14.42 Lacs and Net loss of RM 0.10 Lacs.

c) 20 Microns FZE

Your Company owns 100 percent of 20 Microns FZE. During the year ending 31/03/2013, the said Company reported Gross Revenue of AED 116.35 Lacs and achieved Net profit of AED 28.96 Lacs.

As per Section 212(1] of the Companies Act, 1956, the Company is required to attach to its Accounts, the Directors'' Report, Balance Sheet and Profit & Loss Account of each of its Subsidiaries. As the Consolidated Accounts present a complete picture of the financial results of the Company and its Subsidiaries and in view of General Circular No. 2/2011 dated 08.02.2011 and No. 3/2011 dated 21.02.2011 issued by Ministry of Corporate Affairs, the Annual Report of the Company does not contain the individual financial statements of its Subsidiaries. However, the statement of your Company''s interest in the Subsidiaries as at 31st March, 2013, prepared in accordance with the

provisions of Section 212 of the Companies Act, 1956 is attached to the Balance Sheet.

The Annual Accounts of the Subsidiary Companies along with the related detailed information are available for inspection by the shareholders of the Company and of the Subsidiary Companies at the Company''s Registered Office and at the registered office of the concerned Subsidiaries and copies of the same shall be provided to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Audited Financial Statements, based on the same received from the Subsidiary Companies, as approved by its Board of Directors, have been prepared in accordance with AS - 21 on Consolidated Financial Statement read with AS - 23 on Accounting for Investments in Associates.

CORPORATE GOVERNANCE

Pursuant to the requirements of the Listing Agreements with Stock Exchanges, your Directors are pleased to annex the following:

1. Management Discussions and Analysis Report

2. A report on Corporate Governance along with Auditors'' Certificate relating to compliance of conditions thereof. CEO Certificate regarding compliance with the Code of Conduct, are annexure forms part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with The Companies [Particulars of Employees] Rules, 1975, as amended, we have to state that since there are no employees falling within the purview of the said requirements, the same has not been annexed herewith.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO.

In terms of the provisions of Section 217(1 ](e) of the Companies Act, 1956 read with The Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, as amended, the particulars of Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Out go are given in the Annexure-A to this Report.

INDUSTRIAL RELATIONS

Industrial relations remain cordial and peaceful at all levels of the Company throughout the year.

DIRECTORATE

Mr. Ram Devidayaland Mr. Rajesh C. Parikh, retire by rotation and being eligible, offer themselves for reappointment.

RESPONSIBILITY STATEMENT

Your Directors make following statements in terms of Section 217(2AA) of the Companies Act, 1956:

1. The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

2. Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the accounts on a "going concern" basis.

AUDITORS

M/s. Manubhai & Co., Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from Statutory Auditors to the effect that, in case their appointment is made, it would be within the specified limit under Section 224(1 B] of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for assistance & co-operation received from the Government Authorities; Banks and Financial Institutions; Customers; Vendors; Investors; Depositors and all others.

Your Directors also wish to place on record deep sense of their appreciation for the valuable and committed services of the Executives, Staff & Workers of the Company.

For and on behalf of the Board of Directors

Chandresh S. Parikh

Chairman and Managing Director



Place: Waghodia, Dist. Vadodara

Date : 28.05.2013


Mar 31, 2012

To The Members of 20 MICRONS LIMITED

The Directors are pleased to present 25th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2012.

RESULTS OF OPERATIONS: [Rs. in Lacs]

Particulars 2011-12 2010-11

Total Revenue 26770.19 23741.12

Profit before Depreciation, Interest 3525.91 2555.41

and Tax (PBDITA)

Interest for the year 1408.52 1061.61

Depreciation for the year 631.80 533.30

Profit before tax and Exceptional 1485.58 960.50

item

Exceptional items - 39.42

Profit/(loss) for the year 1485.58 921.08

Tax liability :-

Current Year's Tax & FBT 363.25 245.40

Earlier Years Tax Adjustments/MAT 65.61

Credit 44.26 60.28

Deferred Tax Liability/(Asset)

Net Profit/(loss) for the year 1078.08 550.19

OVERVIEW OF ECONOMY

The world economy has been passing through stress. Financial turmoil in Europe has affected other countries. This contagion has pushed up borrowing costs and slowed growth in many parts of the world, and capital flows to developing countries have fallen. As a result, and despite a strengthening of activity in the United States and Japan, world trade has slowed down. Under this scenario, the forecast for global economic growth has been revised downward to about 2.5% in 2012. Indian economy also slowed down in 2011-12 mainly due to weak industrial growth. Inflation remained a major concern constraining RBI to pursue tight monetary policy.

In this generally depressed scenario, the Company has achieved about 13% growth in Gross sales value which stood at Rs. 26770.19 Lacs for the year. The management has taken measures as part of its continuous improvements to strengthen operations and viability. It has widened and improved the product range and price points in domestic as well as international markets to enlarge the customer base.

PERFORMANCE REVIEW:

During the year under report, your Company has achieved a Total Revenue of Rs. 26770.19 Lacs (Up by 12.76% from Rs. 23741.12 Lacs of the previous year). The operations have resulted in a net Profit before Depreciation, Interest and Tax (PBDITA) of Rs. 3525.90 Lacs (Up by 37.97% from Rs. 2555.41 Lacs of the previous year).

DIVIDEND:

Your Directors are pleased to recommend the payment of dividend @ 18% i.e. Rs. 1.80 per Equity Share of the face value of Rs. 10/- each for the year under review. The dividend, subject to approval of shareholders, will be paid to the Shareholders whose name appears on the Register of Members as on the Book Closure dates.

FUTURE OUTLOOK

The Company has achieved a growth rate of 13% in Gross Sales during the year. This growth rate is expected to continue along with higher profitability and inspire the Company and its dedicated staff to focus more attention on all its applications. The Current year and all-coming years would walk on the foot prints of with highest earnings and the continued support of effective sales force, improvement in production facilities and implementation of innovative ideas.

During the year, the Company vigorously followed steps to improve plant efficiency, customers' satisfaction, cost reduction and exploitation of new applications. The Company is still continuing to consolidate, relocate and outsource manufacturing by constantly reviewing market scenario. Product development is an ongoing process carried out in a well equipped R & D Centre. This will enable the Company to review the range of products offered to the Customers.

The Company is always looking on enhancing the interest of all the stakeholders by better utilization of all its resources.

Your Company expects robust growth in existing Products and contribution of new products by adopting the following strategies:

Expansion of Mineral Portfolio by adding new products;

Enhance value chain by launching new synthetic minerals products by leveraging R&D strength;

Expand Geographical locations by acquiring Mines and infrastructure facilities in Mineral rich countries in Middle East & South East Asia.

FINANCE

It is gratifying to note that State Bank of India, in consortium with IDBI Bank Limited has enhanced the aggregate credit facilities from Rs.6278 Lacs to Rs. 7258 Lacs and IDBI Bank Ltd. (IDBI) has also given the working capital finance of Rs. 500 Lacs.

Your Directors convey their grateful thanks to SBI and IDBI for their continued support and co-operation.

FIXED DEPOSITS

As on 31.03.2012, Fixed Deposits from Public and Shareholders stood at the total of Rs. 1475.05 Lacs. 23 deposits totaling to Rs.10.81 Lacs due for repayment on or before 31.03.2012 were not claimed by the depositors on that day. Out of these, deposits of Rs. 2.90 Lacs have since been repaid or renewed at the option of 8 depositors. No instructions have been received so far for the balance of Rs. 7.91 Lacs from 15 depositors. These deposits, if not claimed in future, shall be deposited in the 'Investors Education and Protection Fund' in due course, as per the provisions of the Companies Act, 1956.

SUBSIDIARIES

a) 20 Microns Nano Minerals Limited

Your Company owns 99.17 percent of 20 Microns Nano Minerals Limited. The said Company is having a state of the art In-house Research & Development facility which is registered with Department of Science & Industrial Research (DSIR), Ministry of Science and Technology, Government of India. During the year under review, the said Company reported revenue from operations of Rs. 3035.04 Lacs and achieved Net Profit of Rs. 30.15 Lacs.

b) 20 Microns Sdn. Bhd.

Your Company owns 99.99 percent of 20 Microns Sdn. Bhd. During the year under review, the said Company reported Gross Revenue of RM 13.56 Lacs and achieved Net profit of RM 1.90 Lacs.

c) 20 Microns FZE

Your Company owns 100 percent of 20 Microns FZE. During the period ending 31/03/2012, the said Company reported Gross Revenue of AED 70.72 Lacs and achieved Net profit of AED 18.07 Lacs.

As per Section 212(1) of the Companies Act, 1956, the Company is required to attach to its Accounts, the Directors' Report, Balance Sheet and Profit & Loss Account of each of its Subsidiaries. As the Consolidated Accounts present a complete picture of the financial results of the Company and its Subsidiaries and in view of General Circular No. 2/2011 dated 08.02.2011 and No. 3/2011 dated 21.02.2011 issued by Ministry of Corporate Affairs, the Annual Report of the Company does not contain the individual financial statements of its Subsidiaries. However, the statement of your Company's interest in the Subsidiaries as at 31st March, 2012, prepared in accordance with the provisions of Section 212 of the Companies Act, 1956 is attached to the Balance Sheet.

The Annual Accounts of the Subsidiary Companies along with the related detailed information are available for inspection by the shareholders of the Company and of the Subsidiary Companies at the Company's Registered Office and at the registered office of the concerned Subsidiary and copies of the same shall be provided to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Financial Statements, based on the same received from the Subsidiary Companies, as approved by its Board of Directors, have been prepared in accordance with AS - 21 on Consolidated Financial Statement read with AS - 23 on Accounting for Investments in Associates.

CORPORATE GOVERNANCE

Pursuant to the requirements of the Listing Agreements with Stock Exchanges, your Directors are pleased to annex the following:

1. Management Discussion and Analysis Report

2. A report on Corporate Governance along with Auditors' Certificate relating to compliance of conditions thereof.

3. CEO Certificate regarding compliance with the Code of Conduct.

These annexure forms part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with The Companies [Particulars of Employees] Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Report of the Board of Directors. We have to state that since there are no employees falling within the purview of the said requirements, the same has not been annexed herewith.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO.

In terms of the provisions of Section 217(1)(e) of the Companies Act, 1956 read with The Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, as amended, the particulars of Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Out go are given in the Annexure - A to this Report.

INDUSTRIAL RELATIONS

Industrial relations remain cordial and peaceful at all levels of the Company throughout the year.

EMPLOYEES STOCK OPTION SCHEME [ESOS]

Details of the option granted, accepted and lapsed under Employees Stock Option Scheme - 2007 of the Company, as also the disclosures in compliance with the clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme & Employees Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure - B to this Report. The Auditors' Certificate relating thereto have been set out in the said Annexure.

DIRECTORATE

With effect from 29.04.2011, the Nomination of Mr. Munish Mohan had been withdrawn by IDBI Bank Limited and in his stead and place, Mr. Naresh Makhija was Nominated as the IDBI Nominee Director on the Board of the Company.

Moreover, with effect from 22.10.2011, the Nomination of Mr. Mihir Joshi had been withdrawn by GVFL Limited and ceased to be a GVFL Nominee Director on the Board of the Company. Further, Mr. Vithaldas D. talati had resigned and ceased to be a Director on the Board of the Company with effect from 22.10.2011.

The Board appreciated and took on records the assistance and guidance received by the Company during the tenure of the respective Directorships of Mr. Munish Mohan, Mr. Mihir Joshi and Mr. Vithaldas Talati.

Mr. Atul H. Patel and Mr. Pravinchandra M. Shah, retire by rotation and being eligible, offer themselves for reappointment.

RESPONSIBILITY STATEMENT:

Your Directors make following statements in terms of Section 217(2AA) of the Companies Act, 1956:

1. The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

2. Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the accounts on a "going concern" basis.

AUDITORS

M/s. Manubhai & Co., Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from Statutory Auditors to the effect that, in case their appointment is made, it would be within the specified limit under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for assistance & co-operation received from the Government Authorities; GVFL; Banks and Financial Institutions; Customers; Vendors; Investors; Depositors and all others.

Your Directors also wish to place on record deep sense of their appreciation for the valuable and committed services of the Executives, Staff & Workers of the Company.

For and on behalf of the Board of Directors

Place: Waghodia, Vadodara Chandresh S. Parikh

Date: 28.05.2012 Chairman and Managing Director


Mar 31, 2011

To The Members of 20 MICRONS LIMITED

The Directors are pleased to present 24th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2011.

RESULTS OF OPERATIONS:

[Rs. in Lacs]

Particulars 2010-11 2009-10

Sales (Gross) 24072.38 17999.13 Profit before Depreciation, Interest and Tax (PBDITA) 2555.41 2300.13

Interest for the year 1061.61 804.04

Depreciation for the year 533.30 475.05

Profit before tax and Exceptional item 960.50 1021.04

Exceptional items 39.42 -

Profit/(loss) for the year 921.08 1021.04

Tax liability :-

Current Year's Tax & FBT 245.40 173.75

Earlier Years Tax Adjustments/MAT Credit 65.21 (169.02)

Deferred Tax Liability/(Asset) 60.28 286.57

Net Profit/(loss) for the year 550.19 729.74

OVERVIEW OF ECONOMY

Despite new risks, the global economic recovery is gaining strength and the IMF has projected a 4.5% world growth in 2011 and 2012. While growth in emerging economies remain strong, that in the US and European region is slowly gaining momentum. Some of economies of the developed nations are still a concern with the Euro zone being the most vulnerable as rating agencies continue to downgrade the sovereign rating of many of economies in this region. The natural disaster in Japan, spiky increase in oil prices consequent to the turmoil in the Middle East and North Africa is fuelling uncertainty to the pace of global recovery. Globally, elevated food and commodity prices accompanied by the spike in oil prices have engendered inflation concerns.

The Indian Economy registered improved growth and was amongst the better performers amid emerging market economies. Central Statistical Organization's recent estimated Indian GDP growth rate of 8.6% for 2010-11 is consistent with the RBI's projections for the same period. The indicators such as latest Purchasing Managers' Index, direct and indirect tax collections, merchandise exports and bank credit suggest that the growth momentum persists. However, continuing uncertainty about energy and commodity prices may vitiate the investment climate, posing a threat to the current growth trajectory. Inflation remains a challenge for the Indian Economy and the key risks are tighter monetary conditions and rising prices eating into the consumer's disposable income.

PERFORMANCE REVIEW:

During the year under report, your Company has achieved a Gross turnover of Rs. 24072.38 Lacs (Up by 34% from Rs. 17999.13 Lacs of the previous year). The operations have resulted in a net Profit before Depreciation, Interest and Tax (PBDITA) of Rs. 2555.41 Lacs (Up by 11% from Rs. 2300.13 Lacs of the previous year).

DIVIDEND:

Your Directors are pleased to recommend the payment of dividend @ 15% i.e. Rs. 1.5 per Equity Share of the face value of Rs. 10/- each for the year under review. The dividend, subject to approval of shareholders, will be paid to the Shareholders whose name appears on the Register of Members as on the Book Closure dates.

FUTURE OUTLOOK

The Company has achieved a growth rate of 34% in Gross Sales during the year. This growth rate is expected to continue alongwith higher profitability and inspire the Company and its dedicated staff to focus more attention on all its applications. The Current year and all-coming years would walk on the foot prints of with highest earnings and the continued support of effective sales force, improvement in production facilities and implementation of innovative ideas.

During the year, the Company vigorously followed steps to improve plant efficiency, customers' satisfaction and exploitation of new applications. The Company is still continuing to consolidate, relocate and outsource manufacturing by constantly reviewing market scenario. Product development is an ongoing process carried out in a well equipped R & D Centre. This will enable the Company to review the range of products offered to the Customers.

The Company is always looking on enhancing the interest of all the stakeholders by better utilization of all its resources.

Your Company expects robust growth in existing Products and contribution of new products by adopting the following strategies:-

- Expansion of Mineral Portfolio by adding new products;

- Enhance value chain by launching new synthetic minerals products by leveraging R&D strength;

- Expand Geographical locations by acquiring Mines and infrastructure facilities in Mineral rich countries in Middle East & South East Asia.

FINANCE

It is gratifying to note that State Bank of India (SBI) has sanctioned Corporate Loan of Rs. 9 Crores to part finance the modernization of equipments and for the implementation of the SAP. SBI has enhanced the aggregate credit facilities from Rs. 3525 Lacs to Rs. 4430 Lacs. During the year, IDBI Bank Ltd. (IDBI) has also given the working capital finance of Rs. 400 Lacs.

Your Directors convey their grateful thanks to SBI and IDBI for their continued support and co-operation.

FIXED DEPOSITS

As on 31.03.2011, Fixed Deposits from Public and Shareholders stood at the total of Rs. 1330.95 Lacs. 31 deposits totaling to Rs.5.84 Lacs due for repayment on or before 31.03.2011 were not claimed by the depositors on that day. Out of these, deposits of Rs. 1.00 Lacs have since been repaid or renewed at the option of 4 depositors. No instructions have been received so far for the balance of Rs. 4.84 Lacs from 27 depositors. These deposits, if not claimed in future, shall be deposited in the Rs.Investors Education and Protection Fund' in due course, as per the provisions of the Companies Act, 1956.

SUBSIDIARIES

a) 20 Microns Nano Minerals Limited

Your Company owns 99.17 percent of 20 Microns Nano Minerals Limited. The said Company is having a state of the art In- house Research & Development facility which is registered with Department of Science & Industrial Research (DSIR), Ministry of Science and Technology, Government of India. During the year under review, the said Company reported Gross turnover Rs. 3486.28 Lacs as against a turnover of Rs. 1643.70 Lacs in the previous year. Correspondingly, the Net profit of the said Company stood at Rs. 78.62 Lacs as against Rs. 34.95 Lacs in the previous year.

b) 20 Microns Sdn. Bhd.

Your Company owns 99.99 percent of 20 Microns Sdn. Bhd. During the year under review, the said Company reported Gross turnover Rs. 295.74 Lacs and achieved Net profit of Rs. 21.03 Lacs.

As per Section 212(1) of the Companies Act, 1956, the Company is required to attach to its Accounts, the Directors' Report, Balance Sheet and Profit & Loss Account of each of its Subsidiaries. As the Consolidated Accounts present a complete picture of the financial results of the Company and its Subsidiaries and in view of General Circular No. 2/2011 dated 08.02.2011 and No. 3/2011 dated 21.02.2011 issued by Ministry of Corporate Affairs, the Annual Report of the Company does not contain the individual financial statements of its Subsidiaries. However, the statement of your Company's interest in the Subsidiaries as at 31st March, 2011, prepared in accordance with the provisions of Section 212 of the Companies Act, 1956 is attached to the Balance Sheet.

The Annual Accounts of the Subsidiary Companies along with the related detailed information are available for inspection by the shareholders of the Company and of the Subsidiary Companies at the Company's Registered Office and at the registered office of the concerned Subsidiary and copies of the same shall be provided to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Financial Statements, based on the same received from the Subsidiary Companies, as approved by its Board of Directors, have been prepared in accordance with AS – 21 on Consolidated Financial Statement read with AS – 23 on Accounting for Investments in Associates.

CORPORATE GOVERNANCE

Pursuant to the requirements of the Listing Agreements with Stock Exchanges, your Directors are pleased to annex the following:

1. Management Discussion and Analysis Report

2. A report on Corporate Governance alongwith Auditors' Certificate relating to compliance of conditions thereof.

3. CEO Certificate regarding compliance with the Code of Conduct. These annexure forms part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with The Companies [Particulars of Employees] Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Report of the Board of Directors. We have to state that since there are no employees falling within the purview of the said requirements, the same has not been annexed herewith.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO.

In terms of the provisions of Section 217(1)(e) of the Companies Act, 1956 read with The Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, as amended, the particulars of Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Out go are given in the Annexure – A to this Report.

INDUSTRIAL RELATIONS

Industrial relations remain cordial and peaceful at all levels of the Company throughout the year.

EMPLOYEES STOCK OPTION SCHEME [ESOS]

Details of the option granted, accepted and lapsed under Employees Stock Option Scheme – 2007 of the Company, as also the disclosures in compliance with the clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme & Employees Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure - B to this Report. The Auditors' Certificate relating thereto have been set out in the said Annexure.

DIRECTORATE

Mr. Atil C. Parikh and Mr. Vithaldas D. Talati, retire by rotation and being eligible, offer themselves for reappointment.

RESPONSIBILITY STATEMENT:

Your Directors make following statements in terms of Section 217(2AA) of the Companies Act, 1956:

1. The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

2. Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the accounts on a “going concern” basis.

AUDITORS

M/s. Manubhai & Co., Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from Statutory Auditors to the effect that, in case their appointment is made, it would be within the specified limit under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for assistance & co-operation received from the Government Authorities; GVFL; Banks and Financial Institutions; Customers; Vendors; Investors; Depositors and all others.

Your Directors also wish to place on record deep sense of their appreciation for the valuable and committed services of the Executives, Staff & Workers of the Company.

For and on behalf of the Board of Directors

Place: Waghodia, Vadodara

Date: 19.05.2011 Chandresh S. Parikh

Chairman and Managing Director


Mar 31, 2010

The Directors are pleased to present 23rd Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2010.

RESULTS OF OPERATIONS: [Rs. in Lacs]

Particulars 2009-10 2008-09

Sales (Gross) 18409.87 14520.62

Profit before Depreciation, Interest and Tax (PBDITA) 2300.13 1809.92

Interest for the year 804.04 788.12

Depreciation for the year 475.05 403.59

Profit before tax and Exceptional item 1021.04 618.21

Exceptional item (Restructuring fees) - 371.06

Profit/(loss) for the year 1021.04 247.15 Tax liability :-

Current Year’s Tax & FBT 173.75 56.00

Earlier Years Tax Adjustments/ MAT Credit (169.02) (27.39)

Deferred Tax Liability/(Asset) 286.57 84.59

Net Profit/(loss) for the year 729.74 133.95



OVERVIEW OF ECONOMY

The global economy is showing signs of resurgence with Asian economies experiencing a reasonably stronger rebound. The global economic performance improved mainly during 3Q09 and 4Q09. Notwithstanding the debt crisis that is flustering European countries and unnerving the global financial markets, global economic growth has continued to surprise on the upside over few months. However, significant risk positions are still there such as steep increase in commodity prices, increased inflationary pressures and large budget deficits. There are schools of thought that considering the continued troubles of high unemployment, lower consumer spending in the economies of developed countries and very high government deficits and debt levels in several high income countries such as Greece, Ireland, Italy, Portugal and Spain, global economy would see many snags in its way to recovery.

Indian growth dynamics are slightly in contrast with global conditions since Indian economy was impacted much lesser as compared to other developed countries. The global financial turmoil was ruled out mainly due to fiscal and monetary policies and various other stimulus measures implemented by Government of India. The said positive outlook of Indian economy was turned positive with strong support of uptrend in industrial production and investment demands.

The Domestic White Minerals Industry in 2009-10 went through a significant transition as the demand is coping manifold than the supply for various specific minerals in diverse industries. The less impacted Indian economy has proven that the growth of these industries have sustained themselves through difficult times which have enhanced the growth opportunities for various industries across the Country, thus imparting a stronger demand for the Industrial Minerals which cater to the expanding sectors. Many of the large domestic players are enhancing their capacities and the smaller unorganized sectors are also bridging their way by expanding themselves catering to the higher demand. The mining sector has also strengthened its norms to support the environment and the industry is also supportive of the actions and getting better organized. A few foreign entrants have also begun their operations in India due to the expanding market scenario in India and the Asian Continent as a whole. Some are still eyeing on the opportunities and waiting for the right time to enter the market. Lots of newer untapped minerals are being looked upon to be explored in the near future and there is a very promising future for this industry to multiply.

On the other hand, 2009-10 saw a lot of mergers, acquisitions and buy-outs in the White Minerals Industry by the larger dominant players. Rising energy and labour costs in the western world have forced many to shut down operations, but the Latin American and Asian Mineral Industries have been showing a fantastic growth including China possessing some of the World’s largest White Minerals reserves and manufacturers. The weak economy in the West also dampened the prospects in this industry, where India and China got a major chunk of its share. Malaysia, Vietnam, Turkey, Egypt, Brazil, Russia and lot of other smaller countries have also managed to sustain themselves in the economic turmoil and shown significant growth in their expansions and manufacturing capabilities.

PERFORMANCE REVIEW:

During the year under report, your Company has achieved a turnover of Rs. 18409.87 Lacs (Up by 26.78% from Rs. 14520.62 Lacs of the previous year). The operations have resulted in a net Profit before Depreciation, Interest and Tax (PBDITA) of Rs. 2300.13 Lacs (Up by 27.09% from Rs. 1809.92 Lacs of the previous year) and Net Profit of Rs. 729.74 Lacs (Up by 444.78% from Rs. 133.95 Lacs of the previous year).

UTILISATION OF IPO PROCEEDS

The statement of proposed and actual utilization of IPO proceeds as on 31st March 2010 is as follows:

(Rs. in Lacs)

Sr.Particulars Utilisation of Funds Remarks No. As per Actual Prospectus

1 Haldwani 65.00 The Company has scrapped the plan of expansion of the capacity of 2 Udaipur 135.00 Nil Talc at both the locations.

3 Vadadla 401.00 515.40 The capacity was increased based on the requirement at that

4 Bhuj 690 00 472 86 particular location and hence there were small deviations in the Project Cost.

5 Tirunelveli 239.00 311.98

The Company has utilized a sum of Rs. 102.97 Lacs for enhancement

6 Swaroopgunj Nil 102.97 of capacity at Swaroopgunj location and Rs. 200.46 Lacs for creating additional capacity at Dadra location. The locations were changed by the Management considering cost effectiveness especially Logistics.

7 Dadra Nil 200.46

TOTAL 1530.00 1603.67

The total Issue expenses incurred were Rs. 330.89 Lacs as against Rs. 341.25 Lacs as given in the Prospectus of the Company.

DIVIDEND:

Your Directors are glad to recommend payment of dividend @10% i.e. Re. 1.00 per Equity Share of the face value of Rs. 10/- each for the year under review. The dividend, subject to approval of shareholders, will be paid to the Shareholders whose name appears on the Register of Members as on the Book Closure dates.

FUTURE OUTLOOK

The Company has achieved a double digit growth rate of 27% during the year which was much higher than the Indian Mineral Industry average growth rate. This is a significant indicator of future growth and development. This growth rate is expected to continue and inspire the Company and its dedicated staff to focus more attention on all its applications. The Current year and all-coming years would walk on the foot prints of earlier years with the continued support of effective sales force, improvement in production facilities and implementation of innovative ideas.

During the year, the Company vigorously followed steps to improve plant efficiency, customers’ satisfaction and exploitation of new applications. The Company is still continuing to consolidate, relocate and outsource manufacturing by constantly reviewing market scenario. Product development is an ongoing process carried out in a well equipped R & D Centre. This will enable the Company to review the range of products offered to the Customers.

The Company is always looking on enhancing the interest of all the stakeholders by better utilization of all its resources.

Your Company expects robust growth in existing Products and contribution of new products by adopting the following strategies:-

Expansion of Mineral Portfolio by adding new products;

Enhance value chain by launching new synthetic minerals products by leveraging R&D strength;

Expand Geographical locations by acquiring Mines and infrastructure facilities in Mineral rich countries in Middle East & South East Asia.

FINANCE

It is gratifying to note that State Bank of India (SBI) has sanctioned Corporate Loan of Rs. 9 Crores to part finance the modernization of equipments and for the implementation of the SAP. SBI has enhanced the aggregate credit facilities from Rs. 3525 Lacs to Rs. 4430 Lacs. During the year, IDBI Bank Ltd. (IDBI) has also given the working capital finance of Rs. 400 Lacs.

Your Directors convey their grateful thanks to SBI and IDBI for their continued support and co-operation.

FIXED DEPOSITS

As on 31.03.2010, Fixed Deposits from Public and Shareholders stood at the total of Rs. 1139.80 Lacs. 101 deposits totaling to Rs.17.67 Lacs due for repayment on or before 31.03.2010 were not claimed by the depositors on that day. Out of these, deposits of Rs. 10.20 Lacs have since been repaid or renewed at the option of 49 depositors. No instructions have been received so far for the balance of Rs 7.47 Lacs from 52 depositors. These deposits, if not claimed in future, shall be deposited in the ‘Investors Education and Protection Fund’ in due course, as per the provisions of the Companies Act, 1956.

SUBSIDIARIES

During the year, the Company had invested in 35,00,000 & 25,00,000 Equity Shares of Rs. 10/- each being 98.17% of the paid-up capital of 20 Microns Nano Minerals Limited on 3rd February, 2010 & 30th March, 2010, respectively. As a consequence, on and from 03.02.2010, the said Company has become a Subsidiary of the Company.

The statements of your Company’s interest in the Subsidiaries as at 31st March, 2010, prepared in accordance with the provisions of Section 212 of the Companies Act, 1956 are attached to the Balance Sheet.

IMPLEMENTATION ERP SOFTWARE - SAP

In its constant endeavor of becoming always aggressive in adopting and implementing latest IT trends, the Company has implemented SAP, during the year under review, to make and record the transactions of the Company immediately, safe, secure and transparent. The Company ensures that the data base and reports generated through SAP are accessible to all the offices, godowns and sites of the Company so that fastest decisions are taken resulting in competitiveness and efficient working.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Financial Statements, based on the same received from the Subsidiary Companies, as approved by its Board of Directors, have been prepared in accordance with AS - 21 on Consolidated Financial Statement read with AS - 23 on Accounting for Investments in Associates.

CORPORATE GOVERNANCE

Pursuant to the requirements of the Listing Agreements with Stock Exchanges, your Directors are pleased to annex the following:

1. Management Discussions and Analysis Report

2. A report on Corporate Governance alongwith Auditors’ Certificate relating to compliance of conditions thereof.

3. CEO Certificate regarding compliance with the Code of Conduct. These annexure forms part of this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

In terms of the provisions of Section 217(1)(e) of the Companies Act, 1956 read with The Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988, as amended, the particulars of Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Out go are given in the Annexure - A to this Report.

INDUSTRIAL RELATIONS

During the year, the workers of the Vadadla (Dist. Vadodara, Gujarat) manufacturing plant of the Company have gone on strike and activities of the said plant have been temporarily stopped. Negotiations with workers are in progress with positive feeling.

Except the above, Industrial relations remained cordial and peaceful at all levels of the Company throughout the year.

EMPLOYEES STOCK OPTION SCHEME [ESOS]

Details of the option granted, accepted and lapsed under Employees Stock Option Scheme - 2007 of the Company, as also the disclosures in compliance with the clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme & Employees Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure - B to this Report. The Auditors’ Certificate relating thereto have been set out in the said Annexure.

Under the said Scheme, during the year under review, 1,25,780 Equity Shares have been allotted to the Permanent Employees/Directors who exercised their options.

DIRECTORATE

Your Directors regretfully inform the sad demise of Mr. Vishnu R. Varshney on 29.07.2009, whose contribution in the growth and development of the Company was really great and his suggestions were always valuable and worth implementing. The Directors have placed on records their deep sense of sorrow at the passing away of late Mr. Vishnu Varshney and conveyed their condolences to bereaved family.

Mr. Harish K. Sheth had resigned and ceased to be a Director on the Board of the Company w.e.f. 30.07.2009. Moreover, Mr. Atul H. Patel who was appointed as Additional Director of the Company on 30.072009 and his office, as such, expired on the date of the Annual General Meeting held on 20.08.2009. He was again re-appointed as an Additional Director of the Company w.e.f. 2708.2009 and his appointment is valid up to the date of ensuing Annual General Meeting.

The Board appreciated and took on records the assistance, guidance etc. received by the Company during the tenure of the Directorship of Mr. Harish K. Sheth.

Mr. Mihir A. Joshi was nominated as the Director on the Board of the Company by GVFL Limited and was accordingly appointed as an Additional Director w.e.f. 2708.2009.

Mr. Rajesh C. Parikh & Mr. Sudhir R. Parikh retire by rotation and being eligible, offer themselves for reappointment.

RESPONSIBILITY STATEMENT:

Your Directors make following statements in terms of Section 217(2AA) of the Companies Act, 1956:

1. The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

2. Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the accounts on a “going concern” basis.

AUDITORS

M/s. Manubhai & Co., Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from Statutory Auditors to the effect that, in case their appointment is made, it would be within the specified limit under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for assistance & co-operation received from the Government Authorities; GVFL; Banks and Financial Institutions; Customers; Vendors; Investors; Depositors and all others.

Your Directors also wish to place on record deep sense of their appreciation for the valuable and committed services of the Executives, Staff & Workers of the Company.

For and on behalf of the Board of Directors

Place: Waghodia, Dist. : Vadodara Chandresh S. Parikh

Date: 31.05.2010 Chairman and Managing Director


Mar 31, 2007

The Company, which was incorporated on 29th June, 1987, is now on the verge of completing 20 years of its existence and co-incidentally this report is also the 20th Annual Report.

20 Microns Limited is at a very exciting stage of its growth journey. During the year, the Company has scaled new heights and has set several new benchmarks in its financial performance in terms of sales, profits, net worth and assets and is heading for Rs. 1 billion Turnover mark in the year 2007-08, despite severe competition from the Global and domestic players in mineral industry.

Your Directors are now delighted to present the 20th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2007.

PERFORMANCE OF THE COMPANY :

Results :

The Companys performance during the year 2006-07 is summarized below.

(Rs. in lacs)

2006-2007 2005-06

Sales and Other Income (gross) 9335.72 7207.53

Profit before Depreciation, interest and Tax 1236.48 819.87

Interest for the year 415.86 371.47

Depreciation for the year 355.46 340.36

Profit/(loss) for the year 465.16 108.04 Tax liability :

Current Year 50.00 11.00

Earlier Years - 5.29

FBT 15.00 19.00

Deferred Ta x Liability/[Asset] 42.95 (107.36)

Net Profit/(loss) for the year 357.21 180.11

Your Directors consider the working results excellent and are indicative of a very bright future.

OPERATING RESULTS :

The Indian economy continued on its strong growth path during 2006-2007. The current optimism and perception of brighter future is being reflected in all the major indicators of the economy. All core sectors have performed well. Like all other Companies, your Company has also benefited from the buoyant economic growth in the Country.

Your Company has posted impressive performance by achieving a net profit of Rs. 357 lacs (up 98% from Rs. 180 Lacs in 2005-2006). During the year under review, your Company registered gross revenue of Rs. 9336 lacs (up 29% from Rs. 7207 Lacs in 2005-2006).

The key factors to sustain this robust performance were entirely due to thrust on operational efficiencies through de-bottlenecking of the plant, upgradation of technology, adoption of modernized methods & processes and implementation of innovative ideas.

DIVIDEND :

In order to nurse the need for strategic investment for a secured future, your Directors do not recommend payment of any dividend to the shareholders for the year under review.

INTERNAL CONTROLS :

20 Microns Limited has well defined organization structure, documented policy guidelines, predefined authority levels and an extensive system of internal controls ensure optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations.

The Company has adequate systems of internal control in place. This is to ensure that assets are safeguarded against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly. It also has an exhaustive budgetary control system. Actual performance is reviewed with reference to the budget by the management on an ongoing basis.

The internal audit function is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance with policies, plans and statutory requirements.

The top management and the Audit Committee of the Board regularly reviews and implements the findings and recommendations of the internal audit panel.

RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make following statements in terms of Section 217(2AA) of the Companies Act, 1956:

(i) The applicable accounting standards have been followed in the preparation of the Annual Accounts along with proper explanations relating to material departures;

(ii) Accounting policies are selected and applied consistently and judgments and estimates are made which are reasonable and prudent so as to give a true and fair view of the state of the affairs as at the end of financial year and of the profit of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the accounts on a “going concern” basis.

MANAGEMENT DISCUSSIONS AND ANALYSIS & REPORT ON CORPORATE GOVERNANCE :

The Company is an unlisted Company and as such the provisions of Clause 49 of the Listing Agreement are inapplicable to the Company. Despite this, the Company has prepared reports on “MANAGEMENT DISCUSSIONS AND ANALYSIS & CORPORATE GOVERNANCE” which are annexed hereto, continuing its principle of transparency and sharing objective oriented information to its investors and supporters.

The Company strives to comply with the Provisions of Clause 49 to the extent possible.

Some of the statements made in these reports may be forward looking and are made as required by applicable laws and regulations. Many factors may affect the actual results which could be different from what the Directors envisage in terms of the future performance and outlook.

FUTURE OUTLOOK

The Company has achieved a double digit growth rate of 30% during the year which was much higher than the Indian Mineral Industry average growth rate of 13%. This is a significant indicator of future growth and development. This growth rate is expected to continue and inspire the Company and its dedicated staff to focus more attention on all its applications. The Current year 2007-2008 and all-coming years would walk on the foot prints of earlier year with the continued support of effective sales force, improvement in production facilities and implementation of innovative ideas.

The Speciality Chemicals division launched only two years back has fared dramatically well and the Company would continue to concentrate more effectively and efficiently to achieve higher growth.

During the year, the Company vigorously followed steps to improve plant efficiency, customers satisfaction and exploitation of new applications. The Company is still continuing to consolidate, relocate and outsource manufacturing by constantly reviewing market scenario. Product development is an ongoing process carried out in a well equipped R & D Centre. This will enable the Company to review the range of products offered to the Customers.

The Company is always looking on enhancing the interest of all the stake holders by better utilization of all its resources.

FINANCE

STATE BANK OF INDIA

At the request of the Company, the State Bank of India, the Bankers of the Company, were good enough to enhance the fund based credit facilities from Rs. 8 Crore to Rs. 12.5 Crore, and non fund based limit from Rs. 1.75 to Rs. 3.5 Crores during the year, making the total limits available to the Company to Rs. 16 Crore.

The continued Co-operation of the Bankers would enable the Company to always revitalize and rejuvenate the operations of the Company. Your Directors are appreciative of the good gesture of the Bankers.

FIXED DEPOSITS

As on 31.03.2007, Fixed Deposits from Public and Shareholders stood at the total of Rs. 662.90 Lacs. 84 deposits totaling to Rs.12.18 Lacs due for repayment on or before 31.03.2007 were not claimed by the depositors on that day. Out of these, deposits of Rs. 6.77 Lacs have since been repaid or renewed at the option of 46 depositors. No instructions have been received so far for the balance of Rs 5.41 Lacs from 38 depositors. These deposits, if not claimed in future, shall be deposited in the `Investors Education and Protection Fund in due course, as per the provisions of the Companies Act, 1956.

It is gratifying to note that despite of reduction in the rates of interest during the year, there had been increase in the total Deposits as at the end of the year compared to the previous year.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes the crucial role of human resource in realizing corporate objectives.

To encourage outstanding performers and for retention of talented employees, a careers progression policy has been evolved. Organization structure has also been reviewed, giving a better scope for talented employees to move up in the hierarchy and make greater contribution.

Your Company continued its efforts in developing human resources in to a rebounding workforce to successfully meet challenges and achieve corporate excellence in the emerging competitive market driven economy. This has helped your Company to meet various challenges in its course of business.

As a step ahead in this direction, your Directors have introduced Employees Stock Option Scheme 2007.

DISCLOSURE REGARDING EMPLOYEES STOCK OPTION SCHEME

Pursuant to the resolution passed by the Shareholders in their General Meeting held on 28th March, 2007, your Directors have been authorized to formulate Employees Stock Option Scheme 2007 for the benefit and well being of permanent employees of the Company including the Directors, whether Whole time or not.

Accordingly, the Directors are in the process of introducing the scheme which will serve to align the interests of employees with those of the shareholders by creating a common sense of purpose towards enhancing shareholder value and also serve to attract and retain talent that is absolutely essential for the survival and growth of the Company in an environment that increasingly demands global competitiveness.

INDUSTRIAL RELATIONS

Industrial relations scenario in your Company for the year was peaceful, cordial and healthy, as in the past. Your Companys emphasis on dispute resolution through consultative approach and mutual discussion has ensured peaceful industrial atmosphere and mutual trust between the Management and the employees.

DIRECTORATE

MR. P. M. Shah joined the Board of Director as a Non Executive Director with effect from 5th Aug06. He holds his office as such Director only upto the date of ensuing Annual General Meeting of the Company. He, being eligible, offers himself for appointment. Notice under Section 257 of the Companies Act, 1956 has been received from some of the members along with a deposit of Rs.500/- proposing his candidature for the office of the Director. Necessary resolution in this behalf is included in this notice for your approval.

Smt. Darshana Mankad resigned as the Director of the Company with effect from 1st Feb07. She was young Chartered Accountant & her contribution to the growth & development of the Company was exemplary. The Directors have placed on record their appreciation for the services rendered by her during the period while she was on the Board.

Two of the directors of the Company viz., Mr. Rajesh C. Parikh & Mr. Sudhir .R. Parikh retire by rotation & being eligible, offer themselves for reappointment.

AUDITORS

M/s. Manubhai & Co., Statutory Auditors, retires at the ensuing Annual General Meeting and have made themselves available for re-appointment. The Company has received a letter from Statutory Auditors to the effect that, in case their appointment is made, it would be within the specified limit under Section 224(1B) of the Companies Act, 1956. You are requested to re-appoint them and to fix their remuneration.

AUDITORS REPORT

The miss match of Short term and long term resources and its deployment is of temporary nature and shall be made good-off in the due course.

THANK YOU

Your Directors would like to express their grateful appreciation to:

1) The Government Authorities, Gujarat Venture Finance Ltd. (GVFL) - 1995 the Investor, Banks and Financial Institutions, and

2) Customers, Vendors, Investors, Depositors and all others.

APPRECIATION

Your Directors wish to place on record their appreciation to employees at all levels of their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry.

For and on behalf of the Board of Directors

Place: Vadodara C.S. Parikh

Date: 29th May, 2007 Chairman and Managing Director

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