Directors Report of Kemrock Industries & Exports Ltd.

Sep 30, 2013

Dear Members,

The Directors present the Nineteenth Annual Report, together with the Audited Statement of Accounts for the financial year ended on 30th September, 2013.

Standalone Financial Performance

The standalone financial performance of the Company for the year 2012-13 as compared to the previous year is briefly highlighted hereunder.

(Rs. in Crore) Particulars 2012-13 2011-12 (01.07.2012 (01.07.2011 to 30.09.2013) to 30.06.2012)

Gross Turnover 463.91 932.36

Total Income 526.16 1,014.72

Profit/(Loss) Before Interest, (53.32) 269.21 Depreciation and Tax

Interest and Financial Expenses 285.61 162.72

Depreciation 59.49 45.56

Profit/(Loss) Before Tax (398.12) 60.93

Net Profit /(Loss) Profit after Tax (362.46) 24.20

Add: Balance brought forward 206.90 182.69 from last year

Balance Carried to Balance Sheet (155.56) 206.90

Operations

During the year under review, the Company clocked a Gross Turnover of Rs. 463.91 Crore, on standalone basis, for the financial year ended on 30th September, 2013 as compared to turnover of Rs. 932.36 Crore achieved in the previous year, showing a declining trend. Net Loss incurred during the period under review remained at Rs. 362.46 Crore compared to net profit of Rs. 24.20 Crore in the previous year ended on 30th June, 2012.

Whereas Gross Turnover, clocked on consolidated basis, for the financial year ended on 30th September 2013 remained at Rs. 597.26 Crore compared to Rs. 1,082.08 Crore achieved in the previous year. The bottom-line for the year ended on 30th September, 2013 stood at Rs. 372.95 against the consolidated profit of Rs. 36.70 Crore in the previous year ended 30th June, 2012.

As you are aware, Company is engaged in the business of manufacturing and exporting fibre reinforced composite products for major industrial sectors such as aerospace, defence, chemical processing etc. However, like most Indian companies, in recent months, due to global slowdown, overseas customers have cut down their requirements and deferred future plans, resulting in decrease in demand for the products. Due to this sudden and unprecedented setback in business, the Company is facing severe cash flow crisis. In spite of all these constraints, Company is taking effective steps to keep the Company in motion.

Moreover, Company''s all grade of aerospace grade carbon fiber is certified by Centre for Military Airworthiness and Certification ("CEMILAC") for aeronautical application for use by important organizations of Government of India such as Hindustan Aeronautics Limited ("HAL"), Vikram Sarabhai Space Centre ("VSSC"), Bhabha Atomic Research Centre ("BARC"), Indian Space Research Organization ("ISRO"), Defense Research and Development Organization ("DRDO"), In the meantime, the Company is working with various advisors to identify investors to infuse money into the Company and/or provide strategic realignment of Company''s structure, and thus to consolidate the Company''s endeavors.

Board of Directors

* The Export-Import Bank of India, Mumbai nominated Mr. David Rasquinha, as its nominee on the Company''s Board of Directors with effect from 07th January, 2013. However, upon withdrawal of his nomination from Board of the Company, he ceased to be director of the Board w.e.f., 31st December, 2013.

* Mr. Tushar Patel resigned as a Director of the Company w.e.f., 12th April, 2013. The Board places on record its sincere appreciation for the valuable contribution made by Mr. Tushar Patel during his tenure as Director of the Company.

* With great sorrow, we report that Mr. Navin Patel, the Non- Executive Director of the Company, passed away on 12th April, 2013, for heavenly abode. The Board places on record its sincere appreciation for the valuable contribution made by Mr. Navin Patel during his tenure as Director of the Company.

* The Board of Directors at its meeting held on 01st June, 2013, has subject to the approval of the members at the ensuing Annual General Meeting, re-appointed Mr. Kalpesh Patel as the Managing Director designated as Chairman and Managing Director of the Company w.e.f., 01st August, 2013 for a further period of 3 years, without any remuneration.

* Mr. Kaushik Bhatt, the non-executive director of the Company will retire by rotation at the ensuing Annual General Meeting, and being eligible offer himself for re-appointment.

* Mr. Mahendra Patel resigned as a Director and Executive Director of the Company w.e.f., 02nd June, 2013. The Board places on record its sincere appreciation for the valuable contribution made by Mr. Mahendra Patel during his tenure as Director of the Company.

* Capt. Manoj Gaur was appointed as an additional Director of the Company with effect from 14th August, 2013 by the Board of Directors of the Company. Pursuant to provisions of Section 161(1) of the Companies Act, 2013, he hold office only upto the date of the forthcoming annual general meeting of the Company. The Company has received a notice along with a requisite deposit under Section 257 of the Companies Act, 1956, from a Member signifying his intention to propose the appointment of Capt. Manoj Gaur as a Director of the Company.

* Mr. Tushar Desai was appointed as an additional Director of the Company with effect from 15th October, 2013 by the Board of Directors of the Company by way of circular resolution. Pursuant to provisions of Section 161(1) of the Companies Act, 2013, he hold office only upto the date of the forthcoming annual general meeting of the Company. The Company has received a notice along with a requisite deposit under Section 257 of the Companies Act, 1956, from a Member signifying his intention to propose the appointment of Mr. Tushar Desai as a Director of the Company.

Brief details pursuant to Clause 49 of the Listing Agreement, about the above directors seeking appointment/re- appointment are given in the Annexure-I appended to the Notice convening the Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the Annual Accounts for the year 2012-13, the applicable Accounting Standards have been followed by the Company;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th September, 2013 and of the Loss of the Company for the year ended on that date;

c) 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; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

Wholly Owned & Overseas subsidiary and Joint Venture Companies

a) Wholly Owned domestic Subsidiary Companies

The Company has nine wholly owned Indian subsidiaries viz.

Kemrock Renewable Energy Limited; Kemrock Hi-Performance Composites Limited; Kemrock Infratech Limited; Kemrock Advanced Composites Limited; Kemrock Advance Reinforcements Limited; Kemrock Filament Windings Limited; Kemrock Speciality Polymers Limited and Kemrock Aerospace India Pvt. Ltd. These subsidiaries are yet to commence their business.

During the year under report, the Company has acquired further 51% equity shares in Kemrock Resins Private Limited. The 51:49 Joint Venture between "GP Chemicals International Holding S.a.r.l" and "Kemrock Industries and Exports Limited" set up under the name of "Georgia-Pacific Kemrock International Private Limited" (entity) has been discontinued w.e.f., 12th March, 2013, with the mutual agreement of both the partners. The said entity, now being a wholly owned subsidiary of the Company, has been renamed as "Kemrock Resins Private Limited".

b) Wholly Owned Overseas Subsidiary Companies

The Company has two wholly owned overseas subsidiaries viz., Kemrock UK Limited, in UK and Kemrock International FZE, in DAFZA, Dubai. These subsidiaries are engaged in the business of international marketing in the fields of composite products and its parts and components including related materials like glass fiber, technical fabric, resins, polymers and chemicals.

Besides, the Company continues to hold 80% stake in Top Glass S.p.A., Italy, which is one of the chief and highly qualified producers of Pultruded Composite Profiles, situated 20 kms. North east of Milano, Italy. As required by Accounting Standard AS21 on Consolidated Financial Statements, the audited Consolidated Financial Statements of the Company and its Subsidiaries are attached.

In accordance with the General Circular No: 2/2011 issued by Government of India, Ministry of Corporate Affairs, dated 8th February, 2011, the Balance Sheet, Statement of Profit & Loss and other documents of the Subsidiary companies are not being attached with the Balance Sheet of the Company.

The Annual Accounts of the subsidiary Companies and the related detailed information shall be made available to shareholders of the holding and subsidiary Companies seeking such information at any point. The Annual Accounts of the subsidiary Companies shall be kept for inspection by any shareholders at registered office of the holding company and of the subsidiary companies concerned. A Statement containing prescribed particulars of the Company''s subsidiaries are given in Annexure- II appended to this report.

Corporate Governance & Management Discussion & Analysis

The Corporate Governance Report, pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, is separately given under the head titled as "Corporate Governance Report", which forms part of this Annual Report. A certificate of the statutory auditors of the Company regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement is annexed to this Report as Annexure-B forming part of the report.

The Management Discussion and Analysis forming part of this Report is separately given under the head titled as "Management Discussion and Analysis".

Change in Financial year

The Board of Directors of the Company at their meeting held on 24th June, 2013, have approved and resolved to extend the financial year of the Company by 3 (three) months viz., the financial year 2012-13 (01st July, 2012 to 30th June, 2013) has been extended upto 30th September, 2013 comprising of 15 months.

Non-payment of interest on FCCBs

Due to global meltdown and devaluation of rupee, the company is facing severe financial crisis and hence the Company could not make the payment of first installment of interest with respect to Foreign Currency Convertible Bonds (US$ 100,000,000 5.5% Convertible Bonds due 2017) which was due on 21st June, 2013. However, the Company is making efforts to fulfil its obligations.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are set out in Annexure-A to this report.

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees are set out in Annexure and forms part of this report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Annual Report is being sent to all shareholders and others entitled thereto excluding aforesaid particulars (Annexure). Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Health, Safety and Environmental (HSE)

Company had focused on continued training and awareness regarding Health, Safety & Environmental improvements for entire cross section of employees with emphasis on shop floor employees. This resulted in avoiding any major unsafe incident and also reportable fire throughout the year. Company continues to have mutual aid arrangement with neighboring industries and our fire protection network had helped to reduce damage substantially during major unsafe incidents in nearby some of the industries. Company has in totality satisfied all specified statutory compliances including solid, liquid and gaseous effluents. Company has prepared and updated disaster management plan and also reviewed risk assessment of the entire site engaging services of outside agency and implemented recommendation including reemphasizing awareness at some of the critical locations.

Company had applied for amendment in the environmental clearance due to some of the subsequent changes and amendment in the environmental clearance is received.

Our Company has successfully completed the trials for installation of effluent R.O. Plant, as an effort in achieving zero waste water discharge and hence reducing the consumption of raw water.

Some of the required changes and modifications including installation of barometric condensers are implemented to improve efficiency of Multiple Effect Evaporation system.

Recognition to In-House R&D Unit

Our R&D Center at Kemrock designs and develops various products in the field of thermosetting resins for various Composites Applications. Kemrock R&D team is dedicated, well qualified and experienced in the field of Composites and provides guidelines constantly, based on extensive research, in obtaining various approvals of products manufactured at Kemrock site, which profoundly helps in the development and growth of the organization. The technologies and formulations researched and developed by the team meet the business challenges and opportunities domestically and globally. It also provides technical support services whenever required. The R&D Center is working in the areas of developing new products, cost reduction in existing products, quality up- gradation and import raw-material substitution. We developed the 11 new products during the period of July 2012 to September, 2013.

The Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India, has recognized the Company''s In-house R & D unit vide letter dated 23rd August, 2012 recognizing the efforts made by your Company in Research & Development Activities.

Public Deposits

The Company has not accepted any deposits from the Public within the meaning of Section 58A of the Companies Act, 1956, and as such, no amount on account of principal or interest thereon was outstanding on the date of Balance Sheet.

Corporate Social Responsibility

Kemrock Industries and Exports Limited (KIEL) -

* continues its association with Industrial Training Institute (ITI) Jabugam as Industry partner under Public Private Partnership to improve ITI as Centre of Excellence;

* continues to render necessary facilities and support to primary school located in village Asoj situated opposite its premises;

* provides fire, fighter facilities to nearby villages;

* is associated with CSM-Gujarat skill enhancement society to improve skill levels of Engineers and Technicians of Gujarat;

* is associated with reputed nearby Institutes such as ITM Universe; &

* Contributes in nearby villages of Vadodara city during various festivals etc.

Auditors

During the year M/s. Talati & Talati, Chartered Accountants, Ahmedabad, tendered their resignation effective 12th August, 2013, resulting into a casual vacancy in the office of Statutory Auditors of the Company as envisaged by Section 224(6) of the Companies Act, 1956 ("Act"). Subsequently, Board of Directors of the Company at their meeting held on 14th August, 2013, has appointed M/s. R. A. Amin & Co., Chartered Accountants, Vadodara, as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. Talati & Talati, Chartered Accountants, subject to approval of members at Extraordinary General Meeting. Subsequently, the members, at the Extraordinary General Meeting held on 10th September, 2013 had appointed M/s. R. A. Amin & Co., as Auditors of the Company to hold office up to conclusion of ensuing Annual General Meeting of the Company.

M/s. R. A. Amin & Co., Chartered Accountants, the existing Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. The Shareholders of the Company are requested to appoint the auditors and fix their remuneration. The Company has received certificate from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

Acknowledgment

Your Directors take this opportunity to express their gratitude to the Banks, Central and State Governments and their departments and the local authorities for their support.

The Directors also place on record its sincere appreciation to customers, vendors, joint venture partners/subsidiaries, business associates and technology partners of the Company.

Besides, the Directors place on record their sincere appreciation to the Shareholders, Clients, Regulatory Authorities, Stock Exchanges and Depositories for their continued support and assistance and look forward to have such support in all future endeavors.

Board sincerely appreciate and acknowledge the concerted efforts of employees at all levels.

For and on behalf of the Board of Directors of Kemrock Industries and Exports Limited

Date: 16th January, 2014 Reg. Off.: Vill. Asoj Vadodara-Halol Express Way Kalpesh Patel Tal.Waghodia, Dist.Vadodara-391 510 Chairman & Managing Director

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Jun 30, 2010

The Board presents the 16th Annual Report together with the audited statement of accounts for the year ended on 30th June, 2010.

Change in Financial year

The financial year 2009-2010 of the Company was extended by 3 months upto 30th June, 2010 and hence the Annual Accounts and Report of the Company have been prepared for the period of fifteen months, from I st April, 2009 to 30th June, 2010; and therefore, these figures are not comparable with those of previous year ended on 31 st March, 2009.

Financial Performance

The Companys financial performance for the year 2009-10 as compared to the previous year is furnished in the following table.

(Rs. in Crore)

Particulars 2009-2010 2008-2009 (01.04.2009 (01.04.2008 to to 30.06.2010) 31.03.2009)

Gross Turnover 629.38 379.05

Total Income 610.09 373.96

Profit Before Interest, Depreciation 153.33 101.96 and Tax

Interest and Financial Expenses 54.02 39.65

Depreciation 28.81 18.61

Profit Before Tax 70.51 43.70

Net Profit after Tax 52.97 31.82

Add: Balance brought forward from 74.35 48.57 last year

Balance available, which the Board has appropriated as under: (A) 127.04 80.28

I) Dividend (including interim dividend @ 10%) on Equity Shares for the year @ 20% (previous year @ 15%) 2.77 1.65

ii) Corporate Tax on Dividend 0.47 0.28

iii) Transfer to General Reserve 5.00 4.00

(B) 8.24 5.93 Balance Carried to Balance Sheet

(A-B) 118.80 74.35

Dividend

The Company had paid an interim dividend of Re. 1.00 per share (i.e., 10%) on equity shares during the year. Your Directors are pleased to recommend a final dividend of Re. 1.00 per share (i.e., 10%) on equity shares for the year ended on 30th June, 2010, subject to approval of shareholders at the ensuing Annual General Meeting. Thus, the aggregate dividend for the year ended on 30th June, 2010 works out to Rs. 2.00 per share (i.e., 20%) absorbing a total amount of Rs. 3.24 crore (previous year Rs. 2.03 crore).

Operations

The Companys total income increased from Rs. 373.96 crore for year ended on 31 st March, 2009 to Rs. 610.09 crore for the period ended on 30th June, 2010. During the year under review, the Companys profits before depreciation, interest and taxation (PBIDT) increased from Rs. 101.96 crore for the year ended 31 st March, 2009 to Rs. 153.33 crore for the period ended 30th June, 2010; its net profits for the period under review increased from Rs. 31.82 crore to Rs. 52.96 crore.

Consolidated Operating Results

The year under review was the first year of presenting consolidated financial statements in view of the acquisition of 80% stake by the Company in Top Glass SpA, Italy, on 26th May, 2010. During the year under report, the net sales on consolidated basis were Rs. 716.70 crore. The Company achieved PBIDT of Rs. 164.03 crore. Your directors are pleased to note that consolidated net profit stood at Rs. 76.24 crore.

Change in Capital Structure

Issue and allotment of warrants and shares:

The Company, on 23rd December, 2009, had issued and allotted 16,00,000 warrants to RPM International Inc., USA for a cash price of Rs. 360/- per warrant (including a premium of Rs. 350/- per warrant), on preferential basis, pursuant to the terms and conditions of issue of warrants. These warrants entitle the holder thereof to exercise the option to convert these warrants into equal number of equity shares (i.e., in ratio of I: I) within 18 months from the date of allotment of warrants.

The Company, on 29th April, 2010, raised US$ 50 million (Rs. 222.05 crore) through issue of 48,27,200 Global Depositary Receipts (each representing one equity share of Rs. 10/- each) at an issue price of US$ 10.358 per GDR. Pursuant to GDRs Issue, the Company issued and allotted underlying 48,27,200 equity shares of Rs. 10/- each at a price of Rs. 460/- per share (including a premium of Rs. 450/- per share).

Further, on 24th June, 2010, the Company had issued and allotted 9,11,268 fully paid-up equity shares of Rs. 10/- each to M/s. RPM International Inc., USA against conversion of their 9,11,268 warrants pursuant to the terms and conditions of issue of warrants on preferential basis.

Consequent upon issue and allotment, as aforesaid, of 48,27,200 and 9,1 1,268 equity shares aggregating to 57,38,468 equity shares during the year under report, the paid-up share capital of the Company increased fromRs. I 1,01,49,980/-to Rs. 16,75,34,660/-, divided into 1,67,53,466 equity shares of Rs. 10/-each.

Listing

The equity shares of the Company are listed on BSE and NSE Stock Exchanges. All the equity shares issued and allotted during the financial year are also listed and have been admitted to dealings on both the stock exchanges. The GDRs issued by the Company are listed on the Luxembourg Stock Exchange.

Board of Directors

During During the year under report, Mr. Suresh Hegde resigned as a director of the Company w.e.f., 15th January, 2010. Mr. Mukund Bakshi resigned as a director of the Company w.e.f., 28th August, 2010. The Board places on record its appreciation for the contribution made by them during their tenure as directors of the Company.

Mr. Mahendra R. Patel, a senior executive of the Company, was appointed as an Additional Director for tenure of three years effective 3rd June, 2010 and was designated as an "Executive Director" in wholetime employment of the Company pursuant to relevant provisions of the Articles of Association of the Company. In terms of Section 260 of the Companies Act, 1956, he shall hold office only upto the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing his candidature for the office of Director. The Directors recommend his appointment.

Mr. K. K. Rai and Mr. Navin Patel, the non-executive directors of the Company, retire by rotation at the upcoming Annual General Meeting of the Company and being eligible offer themselves for re-appointment. The Directors recommend theirappointment.

As per the requirements of Clause 49 of the Listing Agreement, brief profiles of Mr. K. K. Rai, Mr. Navin Patel and Mr. Mahendra R. Patel are given in Annexure - I appended to the Notice convening the Annual General Meeting.

Directors Responsibility Statement

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the Annual Accounts for the year 2009-2010, the applicable Accounting Standards have been followed by the Company;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2010 and of the profit of the Company for the year ended on that date;

c) 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; and

d) the Directors have prepared the annual accounts of the Company on a going concern basis.

Wholly Owned Subsidiaries and Joint Venture

During the year under review and till the date of this report, the Company has formed and acquired subsidiary companies and created a joint venture entity in order to create more business opportunities and to make strategic investments.

Wholly Owned Subsidiaries

The Company has incorporated on 24th June, 2010, five wholly owned subsidiary companies with the Office of Registrar of Companies, Gujarat, with their names as Kemrock Advanced Composites Limited; Kemrock Infratech Limited; Kemrock Speciality Polymers Limited; Kemrock Filament Windings Limited; and Kemrock Advance Reinforcements Limited having objects of carrying on business relating to windmill blades, EPC, resins, pipes and carbon fiber respectively. These companies have also procured certificate of commencement of business, however, are yet to commence its business.

Overseas Subsidiary

On 26th May, 2010, the Company has acquired 80% stake in Top Glass S.p.A., one of the chief and highly qualified producers of Pultruded Composite Profiles, situated 20 Kms. north east of Milano, Italy.

Joint Venture Company

Your Company has also entered into a 50:50 Joint Venture with SAERTEX Beteiligungsgesellschaft mbH & Co. KG., Germany. The name of newly formed 50:50 Joint Venture Company incorporated with the Registrar of Companies, Gujarat, is Saertex-Kemrock India Private Limited. The company is formed to manufacture various components for Indian and global aeronautical industry.

Corporate Governance & Management Discussion Analysis

The Report of Board of Directors of the Company on Corporate Governance, pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, is given under a separate Section titled as "Corporate Governance Report", which forms part of this Annual Report.

A certificate of the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement is annexed to this Report as Annexure-B forming part of it.

The Management Discussion and Analysis forming part of this Report is given under a separate Section titled as "Management Discussion and Analysis".

Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo

The information relating to Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and outgo as required under clause (e) of Sub-Section (I) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, is given inAnnexure-Atothis report.

Particulars of Employees

In terms of 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 forms part of this report as Annexure. However, as permitted by Section 219(1 )(b)(iv) of the Companies Act, 1956, this Annual Report is being sent to all shareholders excluding aforesaid particulars(Annexure). Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Integrated Management System

The Company has implemented certified Integrated Management System encompassing ISO: 9001:2008, ISO: 14001:2004 and OHSAS 18001:2007 systems across the organization. Companys HSE performance is regularly monitored by the management. The management is committed to continually enhance HSE performance by designing and implementing innovative improvement initiatives in the area of processes, technological upgradation, training/skill development and effective use of all manpower, material and natural resources.

Public Deposits

Your Company has not accepted any deposits from the Public within the meaning of Section 58A of the Companies Act, 1956, and as such, no amount on account of principal or interest thereon was outstanding on the date of Balance Sheet.

Auditors

The Statutory Auditors, M/s. H. K. Shah & Co., Chartered Accountants, Ahmedabad, holds office upto the conclusion of the forthcoming Annual General Meeting of the Company and being eligible are recommended for re-appointment. The Company has received a certificate from M/s. H. K. Shah & Co., to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224( IB) of the Companies Act, 1956.

Insurance

The Company continues to carry adequate insurance for all its insurable assets and other interests.

Acknowledgment

The Board takes an opportunity to express its gratitude for the confidence reposed by the customers, vendors, joint venture partners/subsidiaries, business associates and technology partners in the Company. Further, the

Board wishes to place on record their appreciation for the Shareholders, Clients, Banks, Government Authorities, Regulatory Authorities, Stock Exchanges and Depositories for their continued support and assistance and look forward to having the same support in all future endeavours. Your Directors sincerely appreciate the employees at all levels for their dedicated efforts.

For and on behalf of the Board

Reg.Off.:Vill.Asoj

Vadodara-Halol Express Way

Tal. Waghodia, Dist. Vadodara-391510 Kalpesh Patel

Date: August 27, 2010 Chairman & Managing Director