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Directors Report of Mercury Laboratories Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 34th Annual Report and the Company's audited financial statement for the financial year ended March 31,2015.

(Rs. in Lacs)

1. Financial Results: 2014-15 2013-14

Gross Income 4231.20 4208.56

Gross Profit before Depreciation Interest & 690.15 715.40 Tax

Less: Interest 111.60 146.82

Less: Depreciation 118.06 89.27

Add/(Less) :

Prior period Adjustment - Net - 15.00

Less: Current Tax & Deferred Tax 129.15 157.15

Net Profit 331.34 322.16

Balance as per last P&L A/c. 1.53 1.29

Profit available for appropriation 332.87 323.45

This profit has been appropriated as under

(i) Proposed Dividend 18.00 18.00

(ii) Income Tax on proposed dividend 3.05 2.92

(iii) Transfer to General Reserve 309.00 301.00

(iv) Balance carried to next year 2.82 1.53

Total 332.87 323.45

2. Dividend:

Your Directors are pleased to recommend payment of dividend @ 15% (Rs. 1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the year 2014-2015 absorbing Rs. 21.05 Lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on 25th September, 2015, after business hours.

3. Transfer to Reserves:

The Company proposes to transfer Rs. 309 lacs to the General Reserve out of the amount available for appropriation and an amount of Rs.2.82 lacs is proposed to be retained in the statement of Profit and Loss account.

4. Financial Performance and Operations Review:

During the year under review, the Company yielded Gross Income of Rs. 4231.20 lacs and earned Gross Profit before depreciation, interest and tax of Rs. 690.15 lacs with Net Profit of Rs. 331.34 Lacs as against Gross Income of Rs. 4208.56 lacs, Gross Profit before depreciation and Interest and tax of Rs. 715.40 lacs with Net Profit of Rs. 322.16 Lacs of previous year, respectively, registering modest growth in Gross income and in Net Profit, as compared to previous year.

5. Future Prospects:

Your company has created new world class GMP facility for all its liquids and tablets confirming requirement of WHO. The Company has increased its manufacturing capacity for tablets and liquids by four folds keeping in view the projected growth plans.

The Company has been now focusing more on strategy implementation and follow up action to achieve the desired growth plan in ethical Marketing. The Company is ensuring its products availability in all comer of country by increasing C&F agents. With a view to create more ethical market, the Company has introduced various new drugs such as Teclobet, Tanolite, Clinzit, Clinzita- A, Levotryl Tablet, Levotryl-M Tablet, Levotryl Syrup, THA-4, THA-8, Pyloryl, Pangs At, Feveryl Drops, Feveryl Suspension in its Mother Child Care specialized Segment. On other side, your Company has established Institutional Business with Government institutions, Semi Government and Hospitals & Clinics. This division of the Company, is also focusing more on strategy implementation and achieving higher growth.

The Company has been putting its major thrust on Export and has set higher objective of achieving 20% growth during the financial year 2015-16 with addition of new, more clients and cover new countries such as Latin America, Philippines, South Sudan, Tanzania, Zimbabwe, Zambia to name a few in addition to existing client countries such as Nigeria, Congo, Ghana, Burma, Sri Lanka, Gautmala, Costa-de rica, etc.

The Company has been following its well planned strategy of deriving maximum mileage on domestic market, more particularly on ethical business, effectively and aggressively penetrating the domestic and export market, exercising regular and strong follow up over Marketing distribution net work and channels, strengthening its new institutional business of supplying products to government / semi- government institutions in the Country, with an objective to continue to excel well. With these, the Board is confident that this would result into substantial growth in the business revenue, barring unforseen circumstances.

6. Directors' Responsibility Statement

Your Directors state that:

a. in the preparation of annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. 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 at March 31, 2015 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual accounts on a 'going concern' basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. Directors and Key Managerial Personnel

During the year under review, following changes occurred in the position of Directors / KMPs of the Company:

a. Pursuant to the provisions of Section 149 of the Act, Dr. Dinesh S. Shah, Dr. Tushar P. Shah, Mr. Divyakant R. Zaveri were appointed as Independent Directors at the Annual General Meeting of the Company held on 30th September, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent directors during the year.

b. Mr. Mukesh M. Khanna has been appointed as the Company Secretory & Compliance Office of the Company effective from 26th July, 2014.

c. Mrs. Poornima Dhirendra Karvat was appointed as a Woman Independent Director with effect from 30th March, 2015 in the nature of additional Director and pursuant to the provisions of Section 161 of the Companies Act, 2013, she holds office upto the ensuing Annual General Meeting. Being eligible, she has offered herself for appointment as an Independent Director of the Company.

d. Ms. Priyanka Doshi, has been appointed as Chief Financial Officer (CFO) of the Company in place of Mr. Haresh G. Shah who resigned as the CFO of the Company, effective from 31st March, 2015.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

Events occurring after balance sheet date - change in directorate / KMP

e. Dr. Dinesh S. Shah and Dr. Tushar P. Shah resigned as Directors of the Company on 14th May, 2015 due to their other pre-occupations.

f. Mr. Bharat Dhirajlal Mehta, was appointed as an Independent Director in casual vacancy caused on resignation of Dr. Dinesh S. Shah, with effect from 14th May, 2015.

8. Number of Meetings of the Board

Eight Meetings of the Board were held during the year on 3rd April, 2014, 26th April, 2014,15th May, 2014,26th July, 2014, October, 2014, 27th January, 2015, 11th February, 2015 and 30th March, 2015. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this report.

9. Policy on Directors'Appointment and Remuneration and other details

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act, may be accessed on the Company's website at the link: http://www.mercurylabs.com.

10. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

11. Internal Financial Control Systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

12. Audit Committee

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

13. Share Capital

The paid-up Equity Share Capital of the Company as at 31st March, 2015 is Rs. 120 Lacs. The Company currently has no outstanding shares issued with differential rights, sweat equity or ESOS.

14. Risk Management

The Board of the Company has formed a Risk Management Policy to frame, implement and monitor the risk management plan for the Company. The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

15. Safety, Environment and Health

The Company considers safety, environment and health as the management responsibility. Regular employee training programs, are carried out in the manufacturing facilities on safety, environment and health.

16. Particulars of Loans, Guarantees or Investments

The Company has not provided any loans and guarantees and no investments made pursuant to Section 186 of the Companies Act, 2013.

17. Particulars of contracts or arrangements with related parties :

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had entered into contract with Mercury Antibiotics Pvt. Ltd., for availing the building and plant and machinery on lease for a period of 3 years on lease rent of Rs.54 Lacs per annum. The Company has also entered in to contract with Mercury Marketing & Consultancy Services (MMCS) for availing services of the professionals retained by MMCS, for a period of 3 years on fees of Rs.24 Lacs per annum. The Company had not entered into any contract /arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company. The Policy dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://www.mercurylabs.com.

Prescribed form AOC - 2, pursuant to Section 134 (3) (h) of the Companies Act, 2013 & Rule 8(2) of the Companies (Accounts) Rules, 2014, is furnished as Annexure - A to this report.

18. Corporate Social Responsibility (CSR)

Though not mandatory in terms of Section 135 of Companies Act, 2013, the Company has formulated Corporate Social Responsibility (CSR) Policy in accordance with Section 135 of the Companies Act, 2013 and constituted CSR Committee with Dr. Tushar Shah, Dr. Dinesh Shah and Mr. D.R. Zaveri, three Independent Directors with Mr. Rajendra R. Shah, Managing Director of the Company. Dr. Tushar Shah was the Chairman of the CSR Committee.

The CSR Committee was re-constituted by the Board of Directors of the Company on 14th May, 2015 with Ms. Poornima Karvat and Mr. Bharat Mehta as members in place of Dr. Tushar Shah, Dr. Dinesh Shah.

However the Company has been pursuing CSR activities in the area of promotion of education in medical field by providing scholarship and other amenities to the medical students.

The CSR policy of the Company is placed on the website of the Company www.mercurvlabs.com.

19. Policy on prevention, prohibition and redressal of sexual harassment at workplace.

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014- 15. The policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at work place, is placed on website of the Company www.mercurylabs.com.

20. Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy is posted on the website of the Companywww.mercurylabs.com.

21. Significant and material orders passed by the regulators or courts.

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

22. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as Annexure B.

23. Particulars of Employees and Remuneration

Pursuant to the Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, no employee of the Company was paid remuneration exceeding the prescribed limits, during the financial year 2014 - 2015.

The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-C forming part of the Report. None of the employees listed in the said Annexure is related to any Director of the Company.

24. Reply to Remark made by the Auditors:

With reference to remark made by of the Auditors in their Report under "Other Matter", as briefed in Note-19, Rs. 53,17,983/-, the amount of Debtors outstanding for more than One year, is not considered doubtful by the Management, in view of part of them is already received and as per the assurance given, balance is likely to be received by the Company, in phased manner.

25. Auditors

(1) Statutory Auditors:

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Naresh & Co, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 33rd Annual General Meeting (AGM) of the Company held on September 30,2014 till the conclusion of the 36th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.

(2) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Jayesh Vyas & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended March 31,2015. The Secretarial Audit Report is annexed as Annexure-D.

The Auditors' Report and the Secretarial Audit Report for the financial year ended March 31,2015 do not contain any qualification, reservation, adverse remark or disclaimer.

26. Deposits:

The Company has no unpaid and / or unclaimed deposit. The Company has accepted deposit from Directors and their relatives, the Shareholders and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.

The details relating to deposits, covered under Chapter V of the Act are as under:

Particulars Amt. in Rs.

Accepted during the year from the Directors and members 192.64

Remained unpaid or unclaimed as at the end of the year None

Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved (i) at the beginning of the year;(ii) maximum during the year; and (iii) at the end of the year; None

27. Extract of Annual Return

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure-E in the prescribed Form MGT-9, which forms part of this report.

28. Material Change & Commitments, if any

There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of the directors report.

29. Acknowledgment

The Board of Directors wish to place on record their appreciation for the continued support extended by the Bankers, Business Associates, clients, vendors and suppliers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company.

Place: Vadodara, On behalf of the Board of Directors, Date: 31st July, 2015 Rajendra R. Shah Chairman& Managing Director


Mar 31, 2014

Dear Members,

Outlook of Pharmaceutical Industry:

The year 2013-14 has been a dynamic year for Pharmaceutical Industry due to lot of changes that took place in Drugs & Cosmetics Act, DPCO, Companies Act.

The Indian Pharmaceutical Industry, being sunrise industry since liberalization of 1992, witnessed CAGR Growth of 9% from theyear2000 to 2005 and subsequently 13% growth from the year 2005 to 2013. Itis projected that this growth will prolong continuously with same speed with CAGR 13% to 14% from the year 2015 to 2020.

Today, the Pharma Industry is doing business of 12,000 billion USD in domestic market, which is expected to be increased to 35 billion to 55 billion USD in coming period of five years from the year 2020.

The urban market share is 80%-85% while rural market share is 15%-20%. There is a upward trend and is potential to increase in rural market due to :

(a) Government has allocated 29000 crores for the healthcare plan during this financial year

(b) Gross income increase of middle and lower class

(c) Due to introduction of DPCO 2013, some of the products-life saving drugs reduced and assessable for poor people.

(d) The government policy to encourage domestic as well as export of the pharmaceutical products, this support will definitely help pharmaceutical industries to grow faster and newer heights.

The developed country provide healthcare at optimum and the market for further growth are limited while developing countries such as China, India, Brazil, Russia, South Africa have potentials growth path due to driven by rapid urbanization, greater economical development. Rural markets will grow the fastest driven by step-up from current poor level of penetration and healthcare infrastructure will also increase. This will lead Indian Pharmaceutical Industry to No. 2 Position in volume in production by 2020.

In the backdrop of such congenial environment, Your company has been growing fast, too with its strategic planning and proper penetration in both domestic and export markets as evidenced from the financial performance achieved during the financial year 2013-14.

The following figures summaries the financial performance of the Company during the year under review.

1. Financial Results: (Rs. in Lacs) (Rs. in Lacs) 2013-14 2012-13

Gross Income 4208.56 3418.03

Gross Profit before Dep. Int.&Tax 700.40 446.30

Less: Interest 146.82 41.15

Less: Depreciation 89.27 32.16

Add/(Less) : — —

Prior period Adjustment- Net 15.00 (9.30)

Less: Current Tax & Deferred Tax 157.15 128.31

Net Profit 322.16 253.98

Balance as per last P&LA/c. 1.29 1.23

Profit available for appropriation 323.45 255.21

This profit has been appropriated — — as under

(I) Proposed Dividend 18.00 18.00

(ii) Income Tax on proposed dividend 2.92 2.92

(iii) Transfer to General Reserve 301.00 233.00

(iv) Balance carried to next year 1.53 1.29

Total 323.45 255.21

2. Dividend:

Your Directors are pleased to recommend payment of dividend @ 15% (Rs. 1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the year 2013-2014 absorbing Rs.20.92 lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on 30th September, 2014, after business hours.

3. Operations In Retrospect:

During the year under review, the Company yielded Gross Income of Rs. 4208.56 lacs and earned Gross Profit before depreciation, interest and tax of Rs. 700.40 lacs with Net Profit of s. 322.16 Lacs as against Gross Income of Rs. 3418.03 lacs, Gross Profit before depreciation and Interest and tax of Rs. 446.30 lacs with Net Profit of Rs. 253.98 Lacs of previous year, respectively, registering phenomenal growth of 23.12 % in Gross income and a modest growth of 26.84% in Net Profit, as compared to previous year.

4. Future Prospects:

Your company has created new world class manufacturing facility for liquids and tablets and confirming requirement of USFDA which are in operation since September 2013 onwards. The Company has increased its manufacturing capacity for tablets and liquids by four folds keeping in view the projected growth plans.

The Company has been now focusing more on strategy implementation and follow up action to achieve the desired growth plan in ethical Marketing. The Company is ensuring its products availability in all corner of country by increasing C&F agents, as recently it has appointed one more C&F agent at Vijayawada. With a view to create more ethical market, The Company has introduced various new drugs such as Ovaryl Tablet, K-Win 10 Injection, K-Win injection with syringe to cover more Gynaec and Paed Doctors in line of Central Government policy of "Health for all " by allocation of Rs. 29,000 crores. On other side, your Company has established Institutional Business with Government institutions, Semi-Government and Brand ''A'' Hospitals & Clinics. The Erga division of the Company, is also focusing more on strategy implementation and achieving higher growth. Two new products have been introduced in their portfolio.

The Company has been putting its major thrust on Export and has set higher objective of achieving 100% growth during the financial year 2014-15 with addition of new, more clients and cover new countries in Central America such as Costa Rica, Guatemala, El- Salvador , to name a few.

The Company has been following its well planned strategy of deriving maximum mileage on domestic market, more particularly on ethical business, effectively and aggressively penetrating the domestic and export market, exercising regular and strong follow up over Marketing distribution net work and channels, strengthening its new institutional business of supplying products to government / semi- government institutions in the Country, with an objective to continue to excel well. With these, the Board is confident that this would result into substantial growth in the business revenue.

5. Amalgamation with Mercury Antibiotics Private Limited (MAPL):

As the members are aware, in order to have synergy of operations between MAPL, the associate Company and the Company, with the approval of the Members, a scheme of Amalgamation of the Company with MAPL was proposed and pursued at High Court of Mumbai. On account of various regulatory and technical issues, the Amalgamation Application filed by the Company had to be withdrawn by the Board and it again resolved to proceed with the said amalgamation afresh, with the same Scheme as was earlier sanctioned. However, since the time when the Board resolved to proceed with the merger, the Company went into significant expansion and acquired and installed modern plant for liquid oral with latest technology and high in speed which could produce finest and latest medicines to compete in the national and international markets due to which various advantages which were hitherto accruing upon merger with MAPL, lost its importance and significance to the Company and as it has not brought any synergic gains, the Board therefore decided to rescind the proposal of merger of MAPL with the Company.

6. Management Discussion & Analysis:

a. Industry Structure and Developments:

As explained in the inception, the Indian pharmaceutical industry as a whole, on positive, progressive sea change and is expected to tremendous with the encouraging support of the Government .

b. Opportunities and Threats:

Your Company operates in such a area where a large market exists and offers ample opportunities for growth. Your Company''s products are well-received in the market. However, the Company faces tremendous competitions from the organized and also unorganized sectors.

c. Outlook:

Your Directors are well aware of the competition by organized and unorganized manufacturers and prevailing scenario such as Companies Act, DPCO and create a strategy to overcome this difficulties.

In view of inflationary trend and keen competitions prevailing in the market, your Directors feel the performance of the Company has been reasonably good. Your Directors are also aware of the fact that Indian Pharmaceutical industry is highly potential to growth but competitive and fragmented.

The management is conscious about the changing scenario in pharmaceutical industry and review take place regularly.

d. Risks and concerns:

The external factors such as Competition, DPCO norms, Natural Calamities etc. are sincerely and strategically addressed. Your company''s management focus in taking care of internal issues.

The external factors such as inflationary trend prevailing in the market, natural calamities, and competition are common to all the industrial sectors. It is therefore necessary to address sincerely and systematically, to the effect of those risks on the business of the Company. Risks which are internal on which the directors and management would have control, are being taken care of. Diversified portfolio of products, focus on financial disbursement, introduction of new products, achieving optimum usage of available infrastructure and deriving maximum possible returns, cost reduction in its operations etc. are some of the inbuilt strategies which are implemented by the Company to manage business risk.

e. Internal Control System and their Adequacy:

The internal control systems are continuously being fine tuned in line with the changing requirements in the industry. The management regularly reviews the internal control systems in the areas of finance procurement, sales and distribution and marketing and new product launches. Thus emphasis on internal control system is spread over across all major functions and processes.

f. Financial Performance:

Financial performance of the Company has been indicated here in above.

g. Human Resources/lndustrial Relations:

Yours Directors believe that employees are the most valued assets of the organization. Thus, all the human resources practices are directed towards enhancing the value of these assets. The focus of the management is on the organizational development and to imbibe new organization values entrepreneurship, team work achievement and commitment.

7. Directors'' Responsibility Statement:

In terms of Section 217(2AA) of the Companies Act,1956, the Directors would like to state that :-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 true and fair view of the state of affairs of the Company at the end of the 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 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.

8. Directorate:

Pursuant to Section 149 of the Companies Act, 2013, the Board at its meeting held on 26th July, 2014 recommended appointment of Dr. Dinesh Shantilal Shah, Dr. Tushar Pravinchandra Shah and Mr. Divyakant R. Zaveri as Independent Directors of the Company, not liable to retire by rotation during their tenure of five years till the date of its 38th Annual General Meeting, subject to approval of the Members of the Company. These Directors have given consent and provided declarations to the Board that they meet the criteria of independence as provided under Section 149(6) of the said Act and also confirmed that they will abide by the provisions as mentioned in Schedule IV of the Companies Act, 2013.

In view of their vast and varied experience and useful contributions given by each of them , the Board recommends their appointment as the Independent Directors of the Company.

Mr. Janak J. Katakia ceased to be the Independent Director effective form 26th July, 2014 on resignation. The Board places on record his sincere appreciation for the contribution received from him during the tenureship as a Director of the Company.

9. Statutory Disclosures:

I. Information pursuanttoSection217(1)(e)oftheCompanies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 are given as Annexure ''A'' to this report.

II. As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 information is not furnished as no employee is covered there under.

III. In compliance of Section 383A(1) of the Companies Act, 1956 Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas and Associates, the Practicing Company Secretary, is annexed as Annexure "B" to this report.

10. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreements with the Over the Counter Exchange of India (OTCEI), Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report as Annexure "C", whereas the Management Discussion and Analysis is given hereinabove.

11. Secretarial Audit Report:

In compliance of directives of the Central Government and to complu listing requirement, a Secretarial Audit Report issued by Mr. Jayesh Vyas, the Practicing Company Secretary, is attached as Annexcure- D to this report.

12. Dematerialisation of Shares:

Shares of the Company bear ISIN No. INE947GO1011 as allotted by the National Securities Depository Ltd. (NSDL) & Central Depository Services Ltd. (CDSL), for dematerialization and as of the date, 9,57,600 Equity shares (79.80%) have been dematerialized. Shareholders are recommended to demat their Shares for their better custody and convenience.

13. Auditors:

M/s. Naresh & Co., Chartered Accountants, Vadodara, (Firm Registration No. 106928W), the Auditors of the Company retire at the ensuing Annual General Meeting, being eligible, offer themselves for reappointment at the Annual General Meeting.

The Members are requested to consider their re-appoint as the Statutory Auditors for a period of three years commencing from the conclusion of this Annual General Meeting upto the conclusion of the 36th Annual General Meeting, subject to ratification of the Members at every meeting and authorise the Board of Directors to fix their remuneration.

Members are requested to consider their re-appointment and fix their remuneration.

14. Cost Auditors:

Pursuant to the provisions of Section 233B of the Companies Act, 1956, Ms. Shilpa Parikh, Cost Accountants, (ICWA Registration No. 31441) was appointed as the Cost Auditors to conduct audit of cost records for Formulations drugs of the Company for the Financial Year2014-15.

15. Deposits:

The Company has no unpaid and / or unclaimed deposit. The Company has not accepted any deposit from Public except from Directors and their relatives and has complied with all applicable provisions of the Companies Act relating to acceptance and renewal of deposits.

16. Insurance:

All the properties and insurable interests of the Company including buildings, plants & machineries and stocks, have been adequately insured.

17. Appreciation:

Your Directors have pleasure to place on record their appreciation of the service rendered by the Workmen and Staff of the Company and thank State Bank of India, Government of Gujarat and Central Government for their valuable cooperation in furthering interest of the Company.

Date : 26-07-2014 For and on behalf of the Board, Place : Vadodara.

Dinesh S.Shah Chairman


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 32nd Annual Report together with Audited Statements of Accounts for the Year ended 31st March, 2013.

The following figures summaries the financial performance of the Company during the year under review.

1. Financial Results : (Rs. in Lacs)

2012-13 2011-12

Gross Income 3418.03 2736.03

Gross Profit before Depreciation, Interest & Tax 446.30 365.28

Less: Depreciation 32.16 29.62

Less: Interest 41.15 24.36

Less: Current Tax & Deferred Tax 128.31 102.41

Add /(Less) : Prior period Adjustment - Net (9.30) 11.52

Provision for Tax — 10.30

Net Profit 253.98 230.71

Balance as per last P&L A/c. 1.23 0.44

Profit available for appropriation 255.21 231.15

This profit has been appropriated as under

(i) Proposed Dividend 18.00 18.00

(ii) Income Tax on proposed dividend. 2.92 2.92

(iii) Transfer to General Reserve 233.00 209.00

(iv) Balance carried to next year 1.29 1.23

Total 255.21 231.15

2. Dividend :

Your Directors are pleased to recommend payment of dividend @ 15% (Rs. 1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the year 2012-2013 absorbing Rs.20.92 lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on 13th December, 2013, after business hours.

3. Operations In Retrospect:

During the year under review, the Company earned Gross Income of Rs. 3418.03 lacs and generated Gross Profit before Depreciation, Interest and Tax of Rs. 446.30 lacs with Net Profit of Rs. 253.98 lacs as against Gross Income of Rs. 2736.03 lacs, Gross Profit before Depreciation, Interest and Tax of Rs. 365.28 lacs with Net Profit of Rs. 230.71 lacs of previous year, registering phenomenal growth of 24.92% in Gross income and a modest growth of 10% in Net Profit, as compared to previous year. The Company has been continuing putting its thrust on its well devised action plan of focusing on deriving maximum mileage on domestic market, more particularly on ethical business, effectively and aggressively penetrating the market, exercising regular and strong follow up over Marketing distribution net work and channels, focusing on new Institutional Business of supplying products to Government / Semi-Government Institutions in the Country, so as to continue to achieve targeted growth.

In a drive to expand business, two new products have been introduced in Ergacap division and systematic efforts are being made to promote them. On Export front, the Company has been putting its thrust on development of newer market in different countries such as Sri lanka and Benin to increase clientele in existing exporting countries. During the year, the Company added Eight new customers in exporting countries. The Company is vigilant on cost control and hence putting its best possible efforts continuously, to avoid wasteful expenses and minimise operational expenses to the extent possible. With these, the Board is confident that this would result into substantial growth in the business revenue.

Expansion plan of the Company has been on advance stage of completion and with establishing new manufacturing facilities at Jarod, the Company could enter in to regulated market and bring better result in coming years. Barring unforeseen circumstances, the Company hopes to pose better and improved results, in coming period,

4. Management Discussion & Analysis :

a. Industry Structure and Developments:

The Company was like other Indian pharmaceutical Companies, had reasonably good year, in terms of the profit and growth for the year ended 31st March, 2013. Sincere efforts are continued to introduce necessary changes in the various areas of operations, on continual basis, so as to optimize the operating results.

b. Opportunities and Threats :

Your Company operates in an area where a large market exists and offers ample opportunities for growth. Your Company''s products are well received in the market. However, the Company faces tremendous competitions from the organized and also unorganized sectors.

c. Outlook :

In view of inflationary trend and keen competitions prevailing in the market, your Directors feel the performance of the Company has been reasonably good. Your Directors are also aware of the fact that Indian Pharmaceutical industry is highly potential to growth but competitive and fragmented.

The management is conscious about the changing scenario in pharmaceutical industry and review take place regularly.

d. Risks and concerns:

The external factors such as inflationary trend prevailing in the market, natural calamities, and competition, are common to all the Industrial Sectors. It is therefore necessary to address sincerely and systematically, to the effect of those risks on the business of the Company. Risks which are internal on which the directors and management would have control, are being taken care of Diversified portfolio of products, focus on financial disbursement, introduction of new products, achieving optimum usage of available infrastructure and deriving maximum possible returns, cost reduction in its operations etc. are some of the inbuilt strategies which are implemented by the Company to manage business risk.

e. Internal Control System and their Adequacy:

The internal control systems are continuously being fine tuned in line with the changing requirements in the industry. The management regularly reviews the internal control systems in the areas of finance procurement, sales and distribution and marketing and new product launches. Thus emphasis on internal control system is spread over across all major functions and processes.

f. Financial Performance:

Financial performance of the Company has been indicated hereinabove.

g. Human Resources/Industrial Relations:

Yours Directors believe that employees are the most valued assets of the organization. Thus, all the human resources practices are directed towards enhancing the value of these assets. The focus of the management is on the organizational development and to imbibe new organization values- entrepreneurship, team work achievement and commitment.

5. Directors'' Responsibility Statement:

In terms of Section 217(2AA) of the Companies Act,1956, the Directors would like to state that:-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 true and fair view of the state of affairs of the Company at the end of the 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 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.

6. Director:

Dr. Dinesh Shah who retires by rotation and being eligible, offers himself for reappointment. Members are requested to consider his re-appointment.

7. Extension of time for holding Annual General Meeting :

In order to facilitate the Company to place before the Shareholder its post Merger Statement of Accounts with Mercury Antibiotics Private Limited, the Company has availed extension of time of three months for holding Annual General Meeting for the financial year 2012-13, from the Registrar of Companies, Maharashtra vide their letter dated 30-08-2013. However, the Company still awaits to receive approval of Honourable High Court of Mumbai.

8. Statutory Disclosures:

I. Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 are given as Annexure ''A'' to this report.

II. As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules,1975 information is not furnished as no employee is covered there under.

III. In compliance of Section 383A(1) of the Companies Act, 1956 Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas and Associates, the Practicing Company Secretary, is annexed as Annexure "B" to this report.

9. Corporate Governance :

Pursuant to Clause 49 of the Listing Agreements with the Over the Counter Exchange of India (OTCEI), Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report as Annexure "C", whereas the Management Discussion and Analysis is given hereinabove.

10. Dematerialisation of Shares:

Shares of the Company bear ISIN No. INE947GO1011 as allotted by the National Securities Depository Ltd. (NSDL) & Central Depository Services Ltd. (CDSL), for dematerialization and as of the date, 9,55,600 Equity shares (79.63%) have been dematerialized. Shareholders are recommended to demat their Shares for their better custody and convenience.

11. Auditors:

M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the Company retire at the ensuing Annual General Meeting, being eligible, offer themselves for reappointment.

Members are requested to consider their re-appointment for the current year and fix their remuneration.

12. Cost Auditors :

The Company has appointed Messrs. Y. S. Thakar & Co., Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Formulations drugs of your Company for the year ended March 31,2013.

13. Deposits :

The Company has no unpaid and / or unclaimed deposit. The Company has complied with all requisite applicable provisions of the Companies Act relating to acceptance of deposit from public.

14. Insurance :

All the properties and insurable interests of the Company including buildings, plants & machineries and stocks, have been adequately insured.

15. Appreciation :

Your Directors have pleasure to place on record their appreciation of the service rendered by the Workmen and Staff of the Company and thank State Bank of India, Government of Gujarat and Central Government for their valuable cooperation in furthering interest of the Company.

For and on behalf of the Board,

Date: 13/11/2013 Rajendra R. Shah Place: Vadodara Chairman & Managing Director


Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting the 31st Annual Report together with Audited Statements of Accounts for the Year ended 31st March, 2012.

The following figures summaries the financial performance of the Company during the year under review.

1. Financial Results : (Rs. in Lacs)

2011-12 2010-11

Gross Income 2736.03 2827.73

Gross Profit before Dep. Int. & Tax 365.28 361.25

Less: Interest 24.36 26.45

Less: Depreciation 29.62 27.92

Add : Prior period Adjustment (Net) 11.52 3.29

Less: Provision for Tax 10.30 —

Less: Prior years'' tax adjustment — 1.60

Less: Provision for Tax 102.41 103.18

Net Profit 230.71 205.39

Balance as per last P&L A/c. 0.44 0.97

Profit available for appropriation 231.15 206.36

This profit has been appropriated as under

(i) Proposed Dividend 18.00 18.00

(ii) Income Tax on proposed dividend 2.92 2.92

(iii) Transfer to General Reserve 209.00 185.00

(iv) Balance carried to next Year 1.23 0.44

Total 231.15 206.36

2. Dividend :

Your Directors are pleased to recommend payment of dividend @ 15% (Rs. 1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the year 2011-2012 absorbing Rs.20.92 lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on 29th September, 2012, after business hours.

3. Operations In Retrospect :

During the year under review, the Company yielded Gross Income of Rs. 2736.03 Lacs and earned Gross Profit before depreciation, interest and tax of Rs. 365.28 Lacs with Net Profit of Rs. 230.71 Lacs as against Gross Income of Rs. 2827.73 lacs, Gross Profit before depreciation and Interest and tax of Rs. 361.25 lacs with Net Profit of Rs. 205.39 Lacs of previous year, registering decline of 3.24 % in Gross income and registering a modest growth of 12.33% in Net Profit as compared to previous year.

The Company has been pursuing its thrust on its well devised action plan of focusing on deriving maximum mileage on domestic market, more particularly on ethical business, effectively and aggressively penetrating the market, exercising regular and strong follow up over Marketing distribution net work and channels, focusing on new institutional business of supplying products to government / semi-government institutions in the Country, so as to achieving of targeted growth. In a drive to expand business, more than six new products have been introduced in Ergacap division and systematic efforts are being made to promote them. On export front, the Company has been putting its thrust on development of newer market in different countries and increase clientele in existing exporting countries.

During the year the Company added 12 new customers in exporting countries. The Company is vigilant on cost control and hence putting its best possible efforts continuously, to avoid wasteful expenses and minimise operational expenses to the extent possible. With these, the Board is confident that this would result into substantial growth in the business revenue.

The Company has expansion plan on anvil and in process of establishing new manufacturing facilities at Jarod which will help the Company to enter in to regulated market and bring better result. The Company hopes to pose better and improved results, in coming period, barring unforeseen circumstances.

5. Directors'' Responsibility Statement :

In terms of Section 217(2AA) of the Companies Act,1956, the Directors would like to state that:-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 true and fair view of the state of affairs of the Company at the end of the 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 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.

6. Directors :

Dr. Tushar Shah who retires by rotation and being eligible, offers himself for reappointment. Members are requested to consider his re-appointment.

Mr. Suryakant B. Parikh, ceased to be the director due to sudden death. The Board places on record its sincere appreciation in respect of valuable contributions received by the Company from him, during his tenure as the Director of the Company.

Mr. Janak Katakia, who was appointed as an Additional Director with effect from 5th January, 2012 holds office of the Director till the conclusion of the ensuing Annual General Meeting. Being eligible, he has consented to act as Directors of the Company. The Company has received notices under Section 257 of the Companies Act, 1956 proposing his candidature for directorship. The Board hopes that the Company would be immensely benefited by the contributions of the newly inducted Director. A brief note on Directors, being appointed/reappointed is furnished in the accompanying notice calling the Annual General Meeting.

Subject to the approval of the Shareholders, the Board of Directors, at their meeting held on 5th January, 2012, on the recommendation of the Remuneration Committee, have re-appointed Mr. Rajendra Ramanlal Shah as the Managing Director for a period of 5 years from 1st April, 2012 on the main terms and conditions mentioned in the explanatory statement attached to the notice.

The Shareholders are requested to consider their appointments.

7. Statutory Disclosures :

I. Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 are given as Annexure ''A'' to this report.

II. As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules,1975 information is not furnished as no employee is covered there under.

III. In compliance of Section 383A(1) of the Companies Act, 1956 Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas and Associates, the Practicing Company Secretary, is annexed as Annexure "B" to this report.

8. Corporate Governance :

Pursuant to Clause 49 of the Listing Agreements with the Over the Counter Exchange of India (OTCEI), Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report as Annexure "C", whereas the Management Discussion and Analysis is given hereinabove.

9. Dematerialisation of Shares:

Shares of the Company bear ISIN No. INE947GO1011 as allotted by the National Securities Depository Ltd. (NSDL) & Central Depository Services Ltd. (CDSL), for dematerialization and as of the date, 9,53,000 Equity shares (79.42%) have been dematerialized. Shareholders are recommended to demat their Shares for their better custody and convenience.

10. Auditors:

M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the Company retire at the ensuing Annual General Meeting, being eligible, offer themselves for reappointment.

Members are requested to consider their re-appointment for the current year and fix their remuneration.

11. Deposits :

The Company has no unpaid and / or unclaimed deposit. The Company has complied with all requisite applicable provisions of the Companies Act relating to acceptance of deposit from public.

12. Insurance :

All the properties and insurable interests of the Company including buildings, plants & machineries and stocks, have been adequately insured.

13 Appreciation :

Your Directors have pleasure to place on record their appreciation of the service rendered by the Workmen and Staff of the Company and thank State Bank of India, Government of Gujarat and Central Government for their valuable cooperation in furthering interest of the Company.

For and on behalf of the Board,

Date: 11/08/2012 Rajendra R. Shah Place: Vadodara Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 30th Annual Report together with Audited Statements of Accounts for the Year ended 31st March, 2011.

The following figures summarise the financial performance of the Company during the year under review.

1. FINANCIAL RESULTS : (Rs. in Lacs)

2010-11 2009-10

Gross Income 2827.73 2659.18

Gross Profit before Dep. Int. & Tax 361.25 337.26

Less: Interest 26.45 22.88

Less: Depreciation 27.92 26.07

Add : Prior period Adjustment (Net) 1.70 (26.81)

Less: Provision for Tax 103.19 93.86

Net Profit 205.39 167.64

Balance as per last P&L A/c. 0.97 0.38

Profit available for appropriation 206.36 168.02

This profit has been appropriated as under

(i) Proposed Dividend 18.00 18.00

(ii) Income Tax on proposed dividend. 2.92 3.06

(iii) Transfer to General Reserve 185.00 146.00

(iv) Balance carried to next Year 0.44 0.96

TOTAL 206.36 168.02

2. Dividend :

Your Directors are pleased to recommend payment of dividend @ 15% (Rs. 1.50 per Share) on the Equity Share Capital of Rs. 1,20,00,000 for the year 2010-2011 absorbing Rs.20.92 lacs including Tax on Dividend, which will be, if approved, paid to the Shareholders holding shares as on 22nd September, 2011, after business hours.

3. Operations In Retrospect:

During the year under review, the Company yielded Gross Income of Rs. 2827.73 Lacs and earned Gross Profit before depreciation, interest and tax of Rs. 361.25 Lacs with Net Profit of Rs. 205.39 Lacs as against Gross Income of Rs. 2659.18 lacs, Gross Profit before depreciation and Interest and tax of Rs. 337.26 lacs with Net Profit of Rs. 167.64 Lacs of previous year, registering modest growth of 6.33 % Gross income and 22.51% in Net Profit as well, compared to previous year.

The Company has been pursuing its thrust on its well devised action plan of focusing on deriving maximum mileage on domestic market, more particularly on ethical business, effectively and aggressively penotrating the market, exercising regular and strong follow up over Marketing distribution net work and channels, focusing on new institutional business of supplying products to government / semi-government institutions in the Country, so as to achieving of targeted growth. In a drive to expand business, more than six new products have been introduced in Ergacap division and systematic efforts are being made to promote them.

On export front, the Company has been putting its thrust on development of newer market in different countries and increase clientele in existing exporting countries. During the year the Company added 12 new customers in exporting countries. The Company is vigilant on cost control and hence putting its best possible efforts continuously, to avoid wasteful expenses and minimise operational expenses to the extent possible. With these, the Board is confident that this would result into substantial growth in the business revenue.

The Company has expansion plan on anvil and in process of establishing new manufacturing facilities at Jarod which will help the Company to enter in to regulated market and bring better result. The Company hopes to pose better and improved results, in coming period, barring unforeseen circumstances.

5. Directors'' Responsibility Statement.:

In terms of Section 217(2AA) of the Companies Act,1956, the Directors would like to state that:-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 true and fair view of the state of affairs of the Company at the end of the 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 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.

6. Directorate :

Dr. Dinesh Shah who retires by rotation and being eligible, offers himself for reappointment. Members are requested to consider his re-appointment.

7. Statutory Disclosures :

I. Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988 are given as Annexure ''A'' to this report.

II. As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules,1975 information is not furnished as no employee is covered there under.

III. In compliance of Section 383A(1) of the Companies Act, 1956 Compliance Certificate as issued by Mr. Jayesh Vyas of M/s. Jayesh Vyas and Associates, the Practicing Company Secretary, is annexed as Annexure "B" to this report.

8. Corporate Governance :

Pursuant to Clause 49 of the Listing Agreement with the Over the Counter Exchange of India (OTCEI), Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report as Annexure "C", whereas the Management Discussion and Analysis is given hereinabove.

9. Dematerialisation of Shares :

Shares of the Company bears ISIN No. INE947GO1011 as allotted by the National Securities Depository Ltd. (NSDL) & Central Depository Services Ltd. (CDSL), for dematerialization and as of the date, 9,65,800 Equity shares ( 80.48%) have been dematerialized. Shareholders are recommended to demat their Shares for their better custody and convenience.

10. Auditors :

M/s. Naresh & Co., Chartered Accountants, Vadodara, the Auditors of the Company retire at the ensuing Annual General Meeting, being eligible, offer themselves for reappointment.

Members are requested to consider their re-appointment for the current year and fix their remuneration.

11. Deposits :

The Company has no unpaid and / or unclaimed deposit. The Company has complied with all requisite applicable provisions of the Companies Act relating to acceptance of deposit from public.

12. Insurance :

All the properties and insurable interests of the Company including buildings, plants & machineries and stocks, have been adequately insured.

13. Appreciation :

Your Directors have pleasure to place on record their appreciation of the service rendered by the Workmen and Staff of the Company and thank State Bank of India, Government of Gujarat and Central Government for their valuable cooperation in furthering interest of the Company.

For and on behalf of the Board,

Date : 2.08.2011 Rajendra R. Shah Place: Vadodara Chairman & Managing Director

 
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