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Directors Report of Zydus Wellness Ltd.

Mar 31, 2016

The Directors are pleased to present Twenty Second Annual Report and the Financial Statements for the financial year ended March 31, 2016.

Financial Results:

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

[INR-Lacs]

Particulars Standalone Consolidated

For the For the For the For the year ended year ended year ended year ended March 31 March 31 March 31 March 31 2016 2015 2016 2015

Sales and Other Income 23,683 23,956 46,047 45,831

Profit before Interest, Depreciation 10,606 11,332 12,217 12,751 & Tax [PBIDT]

Less: Depreciation 355 455 681 773

Profit before Interest & Tax (PBIT) 10,251 10,877 11,536 11,978

Less: Interest 5 5 13 13

Profit Before Tax [PBT] 10,246 10,872 11,523 11,965

Less: Provision for Tax 77 -23 1,156 850

Profit After Tax [PAT] 10,169 10,895 10,367 11,115

Less: Minority Interest - - 198 220

Profit attributable to shareholders 10,169 10,895 10,169 10,895

Add: Profit brought forward from 32,197 24,149 32,197 24,149 the previous year

Less: Additional depreciation upon 0 26 0 26 revision in useful lives of tangible assets

Profit available for appropriation, 42,366 35,018 42,366 35,018 which is appropriated as follows:

Interim Dividend 2,540 - 2,540 -

Proposed Final Dividend 0 2,344 0 2,344

Corporate Dividend Tax on Interim / Final 517 477 517 477 Dividend

Balance carried to Balance Sheet 39,309 32,197 39,309 32,197

Total 42,366 35,018 42,366 35,018

Earnings Per Share [EPS] [Face Value of Shares 26.03 27.88 26.03 27.88 of Rs. 10/- each]

The Company proposes to retain an amount of Rs. 39,309 lacs in the Statement of Profit and Loss.

Results of operations:

During the year under review, the consolidated gross sales revenue grew by 3.20% to Rs. 45,698 lacs from Rs. 44,301 lacs in 2014-15. The profit before tax, on a like-to-like basis, increased by 10.70% y-o-y to Rs. 11,523 lacs. Net profit after tax, on like-to-like basis, increased by 10.40% y-o-y to Rs. 10,169 lacs. The net profit margin, on a like-to-like basis, as a % to total operating income, has increased to 23.70% from 22.20% last year. A detailed analysis of performance for the year has been included in the Management Discussion and Analysis, which forms a part of the Annual Report.

Interim Dividend:

During the year under review, your Directors had declared and paid an interim dividend of Rs. 6.5/- [65%] per equity share of face value of Rs. 10/- each to the shareholders holding shares in physical form and whose names were listed on the Register of Members of the Company as on March 17, 2016, being the Record Date fixed for the purpose. Those shareholders holding shares in electronic form were paid dividend as per the beneficiary data provided by the Depositories. Your Directors did not recommend final dividend. The dividend payout ratio for the current year [inclusive of corporate dividend tax on dividend distribution] is 30.10%.

During the year, the unclaimed dividend pertaining to the dividend for the year ended March 31, 2008 was transferred to Investor Education and Protection Fund.

Management Discussion and Analysis [MDA]:

MDA, for the year under review, as stipulated under clause 49 of the Listing Agreement/Regulation 34[2][e] of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, [hereinafter referred to as Listing Regulations] is presented in a separate section, which forms a part of the Annual Report.

Consolidated Financial Statements:

Zydus Wellness, Sikkim [ZWS] is under the majority control of the Company and hence the accounts of ZWS are consolidated with the accounts of the Company in accordance with the provisions of Accounting Standard [AS]– 21 on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India and as provided under the provisions of Companies Act, 2013 [hereinafter referred to as "Act"] read with Schedule III of the Act and Rules made thereunder and Listing Agreement/Listing Regulations. The audited Consolidated Financial Statements are provided in the Annual Report.

Though Company does not have any subsidiary Company, in compliance of the provisions of Regulation 16[1][c] of the Listing Regulations, the Company has formed a policy relating to material subsidiaries, which is approved by the Board of Directors and may be accessed on the Company''s website at the link: http://www.zyduswellness.in/ investor/Policy%20on%20Material%20Subsidiary-May15.pdf

Related Party Transactions:

All 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 not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.zyduswellness.in/investor/ Policy%20on%20Related%20Party%20Transactions-May15.pdf. Disclosures on related party transactions are set out in Note No. 34 to the financial statements.

Directors:

i. Retirement by rotation:

In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. Ganesh N. Nayak, Director [DIN–00017481] will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his reappointment.

ii. Declaration of Independence:

The Company has received declarations of independence as stipulated under section 149[7] of the Act and Regulation 16[b] of the Listing Regulations from Independent Directors confirming that they are not disqualified from continuing as an Independent Director.

iii. Profile of Director seeking reappointment:

As required under Regulation 36[3] of the Listing Regulations, particulars of the Director seeking reappointment at the ensuing Annual General Meeting is annexed to the notice convening Twenty Second Annual General Meeting.

iv. Key Managerial Personnel:

The following persons are the Key Managerial Personnel:

1. Mr. Tarun G. Arora, Whole Time Director,

2. Mr. Amit B. Jain, Chief Financial Officer and

3. Mr. Dhaval N. Soni, Company Secretary.

There is no change in the Key Managerial Personnel during the year.

v. Board Evaluation:

Pursuant to the provisions of the Act and Rules made thereunder and as provided under Schedule IV of the Act and the Listing Regulations, Nomination and Remuneration Committee / Board has carried out the annual performance evaluation of itself, the Directors individually as well as the evalution of its committees. The manner in which the evaluation was carried out is provided in the Corporate Governance Report, which is a part of this Annual Report.

vi. Nomination and Remuneration Policy:

The Board has on the recommendations of Nomination and Remuneration Committee, framed a Policy on selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy is stated in the Corporate Governance Report, which is a part of this Annual Report.

Directors'' Responsibility Statement:

In terms of section 134[3][c] of the Act and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby make the following statements:

i. that in preparation of the Financial Statements, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any,

ii. that such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company for the year ended on that date,

iii. that proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities,

iv. that the Financial Statements have been prepared on a going concern basis,

v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively and

vi. that the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Board Meetings:

Information of meetings of the Board of Directors is given in Corporate Governance Report, forming a part of this report.

Audit Committee:

As provided in section 177[8] of the Act, the information about composition of Audit Committee and other details are given in Corporate Governance Report, forming a part of this report. The Board has accepted the recommendations of Audit Committee. The Audit Committee is comprising of Mr. H. Dhanrajgir, as Chairman and Dr. B. M. Hegde, Prof. Indiraben J Parikh and Mr. Ganesh N. Nayak as members.

Corporate Governance:

The Company has complied with the Corporate Governance requirements under the Act and as stipulated under clause 49 of the Listing Agreement/Listing Regulations. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Agreement/Listing Regulations along with a certificate from a Practicing Company Secretary, confirming the compliance form a part of this Annual Report.

Auditors:

i. Statutory Auditors and their Report:

M/s. Dhirubhai Shah & Doshi, Chartered Accountants, [Firm Registration No. 102511W] were appointed as Statutory Auditors from the conclusion of Twenty First Annual General Meeting until the conclusion of Twenty Sixth Annual General Meeting. They have informed to the Company that their appointment, if made, would be within the limits prescribed under section 141 of the Act. They have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company. The Board has duly reviewed the Auditor''s Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Act.

ii. Cost Auditors:

Pursuant to provisions of section 148[3] of the Act read with Companies [Cost Records and Audit] Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its product ''Nutralite'' is required to be audited. The Board had, on the recommendation of Audit Committee, appointed M/s. Dalwadi & Associates, Cost Accountants [Firm Registration No. 000338] to audit the cost records of the Company for the financial year ending on March 31, 2017 on a remuneration of Rs. 2.00 lacs. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditors is required to be placed before the Members at a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to M/s. Dalwadi & Associates is included at item No. 5 of the Notice convening Twenty Second Annual General Meeting.

iii. Secretarial Auditors and Secretarial Audit Report:

Pursuant to provisions of section 204 of the Act and The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, the Board has appointed M/s. Hitesh Buch & Associates, a firm of Company Secretaries in whole time practice to undertake Secretarial Audit of the Company for the financial year ended on March 31, 2016. The Secretarial Audit Report is attached herewith as Annexure–"A". The Board has duly reviewed the Auditor''s Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Act.

Corporate Social Responsibility [CSR]:

Pursuant to provisions of section 135 of the Act and Rules made thereunder, the Board has constituted a Corporate Social Responsibility [CSR] Committee under the Chairmanship of Dr. Sharvil P. Patel. The other members of the Committee are Mr. Ganesh N. Nayak and Prof. Indiraben J. Parikh. CSR Policy has been framed and placed on the Company''s website. Other details of the CSR activities, as required under section 135 of the Act, are given in the CSR Report as Annexure–"B".

Business Risk Management:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate them. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.

Discussion on risks and concerns are covered in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

Internal control system and its adequacy:

The Company has designed and implemented a process driven framework for Internal Financial Controls [IFC] within the meaning of the explanation to section 134[5][e] of the Act. For the year ended on March 31, 2016, the Board is of the opinion that the Company has sound IFC commensurate with the size, scale and complexity of its business operations. The IFC operates effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls whenever the effect of such gaps would have a material effect on the Company''s operations.

Managing the risks of fraud, corruption and unethical business practices:

i. Vigil Mechanism / Whistle Blower Policy:

The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct or Ethics Policy. Whistle Blower Policy is disclosed on the website of the Company.

ii. Zydus Business Conduct Policy:

The Company has framed "Zydus Business Conduct Policy". Every employee is required to review and sign the policy at the time of joining and an undertaking has to be given for adherence to the Policy. The objective of the Policy is to conduct the business in an honest, transparent and ethical manner. The policy provides for anti-bribery and avoidance of other corruption practices by the employees of the Company.

Extract of Annual Return:

As per the provisions of section 92[3] of the Act, an extract of the Annual Return in the prescribed Form No. MGT-9 is attached to this Report as Annexure–"C".

Composition of Audit Committee:

More details on the Committee are given in the Corporate Governance Report.

Particulars of Employees:

The information required under section 197 of the Act read with Rule 5[1] of The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, is given in Annexure–"D".

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134[3][m] of the Act read with Rule 8[3] of the Companies [Accounts] Rules, 2014, is provided in the Annexure–"E" and forms a part of this Report.

General Disclosure:

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134[3] of the Act read with Rule 8[3] of The Companies [Accounts] Rules, 2014 to the extent the transactions took place on those items during the year.

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

Acknowledgement:

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by the Banks. Your Directors also thank the Trade and Consumers for their patronage to the Company''s products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. Your Directors also thank the Company''s vendors, investors, business associates, Stock Exchanges, Government of India, State Government and various departments and agencies for their support and co-operation.



For and on behalf of the Board

Place : Ahmedabad Sharvil P. Patel

Date : May 12, 2016 Chairman


Mar 31, 2015

Dear Members,

The Directors are pleased to present 21st Annual Report and the audited financial statements for the financial year ended on 31st March, 2015.

Financial Results:

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

[INR Lacs]

Particulars Standalone Consolidated For the For the For the For the year ended year ended year ended year ended 31st March 31st March 31st March 31st March 2015 2014 2015 2014

Sales and Other Income 23,956 21,494 45,831 42,254

Profit before Interest, Depreciation, 11,332 9,307 12,751 10,841 Exceptional Expenses & Tax [PBIDET]

Less: Depreciation 455 243 773 465

Profit before Interest, Exceptional Expenses 10,877 9,064 11,978 10,376 & Tax (PBIET)

Less: Interest 5 4 13 13

Profit Before Tax [PBT] 10,872 9,060 11,965 10,363

Less: Provision for Tax -23 -585 850 532

Profit After Tax [PAT] 10,895 9,645 11,115 9,831

Less: Minority Interest - - 220 186

Profit attributable to shareholders 10,895 9,645 10,895 9,645

Add: Profit brought forward from 24,149 18,247 24,149 18,247 the previous year

Less: Additional depreciation upon 26 0 26 0 revision in useful lives of tangible assets

Profit available for appropriation, 35,018 27,892 35,018 27,892 which is appropriated as follows:

Proposed Final Dividend 2,344 2,344 2,344 2,344

Corporate Dividend Tax on Dividend 477 399 477 399

Transfer to General Reserve 0 1,000 0 1,000

Balance carried to Balance Sheet 32,197 24,149 32,197 24,149

Total 35,018 27,892 35,018 27,892

Basic and Diluted Earning Per Share 27.88 24.69 27.88 24.69 (EPS of FV Rs. 10/-) [in Rupees]

The Company proposes to retain an amount of Rs. 32,197 lacs in the Statement of Profit and Loss.

The consolidated financial highlights include the financials of Zydus Wellness, Sikkim, a partnership firm. Results of operations:

During the year under review, the consolidated gross sales grew by 3.1%. On standalone basis, the Company has earned total revenue of Rs. 23,956 lacs. The PBIDT increased by 21.8 % to Rs. 11,332 lacs and the Profit Before Tax increased by 20% to Rs. 10,872 lacs. The Profit after Tax has increased to Rs. 10,895 lacs as compared to Rs. 9,645 lacs in the previous year and the EPS has increased from Rs. 24.69 in the previous year to Rs. 27.88. A detailed analysis of performance for the year has been included in the Management Discussion and Analysis, which forms part of the Annual Report.

Dividend:

Your Directors have recommended a dividend of Rs. 6/- [i.e. 60%] per equity share [last year Rs. 6/- per equity share] on 3,90,72,089 equity shares of Rs. 10/- each fully paid-up for the financial year ended on 31st March, 2015, amounting to Rs. 2,821 lacs [inclusive of corporate dividend tax of Rs. 477 lacs]. The dividend, if declared by the shareholders at the ensuing Annual General Meeting, will be paid to those shareholders, whose names stand registered in the Register of Members as on 29th July, 2015. In respect of shares held in dematerialized form, it will be paid to the members whose names are furnished by the National Securities Depository Limited and the Central Depository Services [India] Limited, as beneficial owners. The Dividend Payout ratio for the current year (inclusive of Corporate Dividend Tax) is 25.90 percent on profits.

During the year, the unclaimed dividend pertaining to the dividend for the year ended 31st March, 2007 was transferred to Investor Education and Protection Fund.

Management Discussion and Analysis [MDA]:

MDA, for the year under review, as stipulated under clause 49 of the Listing Agreement, is presented in a separate section forming part of this Annual Report.

Consolidated Financial Statements:

Zydus Wellness, Sikkim [ZWS] is under the majority control of the Company and hence the accounts of ZWS are consolidated with the accounts of the Company in accordance with the provisions of Accounting Standard [AS]- 21 on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Companies Act, 2013 ["Act"] read with Schedule III of the Act and Rules made thereunder and the Listing Agreement with the Stock Exchanges. The audited Consolidated Financial Statements are provided in this Annual Report.

Though Company does not have any subsidiary Company, in compliance of the provisions of clause 49 of the Listing Agreement, the Company has formed a policy relating to material subsidiaries, which is approved by the Board of Directors and can be accessed on the Company''s website at the link: http://www.zyduswellness.in/ investor/Policy%20on%20Material%20Subsidiary-May15.pdf

Related Party Transactions:

All 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 not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.zyduswellness.in/investor/ Policy%20on%20Related%20Party%20Transactions-May15.pdf. Disclosures on related party transactions are set out in Note No. 34 to the financial statements.

Directors:

i. Cessation:

Mr. Mukesh M. Patel [DIN-00053892], Director and Mr. Elkana N. Ezekiel [DIN-05201713], Managing Director of the Company have resigned with effect from 14th July, 2014 and 14th April, 2015 respectively.

The Board places on record its appreciation for contributions and guidance provided by Mr. Patel and Mr. Ezekiel during their respective tenure as a Director / Managing Director of the Company.

ii. Retirement by rotation:

In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Dr. Sharvil P. Patel [DIN-00131995] will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his reappointment.

iii. Appointment of Additional / Whole Time Director:

Mr. Tarun G. Arora was appointed as an Additional Director and Whole Time Director w.e.f. 14th May, 2015, subject to the approval of the Members at the ensuing Annual General Meeting. Mr. Tarun Arora is designated as the Key Managerial Personnel pursuant to the provisions of section 203 of the Act.

iv. Independent Directors:

The Independent Directors have submitted their declarations of independence, as required pursuant to the provisions of section 149(7) of the Act, stating that they meet the criteria of independence as provided in section 149[6].

v. Profile of the Directors seeking appointment / reappointment:

As required under clause 49 of the Listing Agreement, particulars of the Directors retiring by rotation and seeking appointment / reappointment at the ensuing Annual General Meeting is annexed to the notice convening 21st Annual General Meeting.

vi. Chairman:

Upon cessation of Mr. Pankaj R. Patel [DIN-00131852] as the Director of the Company, Dr. Sharvil P. Patel was appointed as the Chairman of the Board and Company w.e.f. 14th July, 2014.

vii. Key Managerial Personnel:

The following persons were designated as Key Managerial Personnel:

1. Mr. Elkana N. Ezekiel, Managing Director, [up to 14th April, 2015]

2. Mr. Tarun G. Arora, Whole Time Director. [w.e.f. 14th May, 2015],

3. Mr. Amit B. Jain, Chief Financial officer and

4. Mr. Dhaval N. Soni, Company Secretary

viii. Board Evaluation:

Pursuant to the provisions of the Act and Rules made thereunder and as provided under Schedule IV of the Act and clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of itself, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation was carried out is provided in the Corporate Governance Report, which is part of this Annual Report.

ix. Remuneration Policy:

The Board has on the recommendations of Nomination and Remuneration Committee, framed a Policy on selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report, which is part of this Annual Report.

Directors'' Responsibility Statement:

In terms of section 134[3][c] of the Act, your Directors state that:

i. in the preparation of the annual financial statements for the year ended on 31st March, 2015, applicable accounting standards read with requirements set out under schedule III of the Act, have been followed along with proper explanation relating to material departures, if any,

ii. such accounting policies have been selected and applied consistently and judgments and estimates made 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. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities,

iv. the annual financial statements are prepared on a going concern basis,

v. proper internal financial controls are in place and that the financial controls are adequate and are operating effectively and

vi. the systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

Board Meetings:

A calendar of meetings to be held in a year is decided in advance by the Board and circulated to the Directors. During the year, four Board and four Audit Committee Meetings were convened and held, the details of which are provided in the Corporate Governance Report, forming part of the Directors'' Report. The gap between two consecutive meetings was not more than one hundred and twenty days as provided in section 173 of the Act.

Corporate Governance:

The Company has complied with the Corporate Governance requirements under the Act and as stipulated under clause 49 of the Listing Agreement. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Agreement along with a certificate from M/s. Hitesh Buch & Associates, Practicing Company Secretary, confirming the compliance, is part of the Annual Report.

Auditors:

i. Statutory Auditor and their Report:

M/s. Dhirubhai Shah & Doshi, Chartered Accountants, [Firm Registration No. 102511W] Statutory Auditor of the Company hold office until the conclusion of the ensuing 21st Annual General Meeting and are eligible for reappointment. Pursuant to provisions of section 139 of the Companies Act, 2013 and the Rules made thereunder, the Board proposes to reappoint M/s. Dhirubhai Shah & Doshi, Chartered Accountants as Statutory Auditor of the Company from the conclusion of the ensuing 21st Annual General Meeting till the conclusion of 26th Annual General Meeting. They have furnished a certificate confirming the eligibility under section 141 of the Companies Act, 2013 and Rules made thereunder.

The Board based on the recommendation of Audit Committee, recommends the reappointment of M/s. Dhirubhai Shah & Doshi, Chartered Accountants, as the Statutory Auditor of the Company.

The Board has duly reviewed the Statutory Auditor''s Report on the Accounts. The observations and comments, appearing in the Auditor''s Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Act.

ii. Cost Auditor:

Pursuant to the provisions of section 148[3] of the Act read with The Companies [Cost Records and Audit] Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its product "Nutralite" is required to be audited. The Board had, on the recommendation of Audit Committee, appointed M/s. Dalwadi & Associates, Cost Accountants [Firm Registration No. 000338] to audit the cost records of product "Nutralite" for the financial year ended on 31st March, 2016 on a remuneration of Rs. 1.80 lacs. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members at a General Meeting for ratification. Accordingly, a resolution to ratify the remuneration payable to M/s. Dalwadi & Associates for the financial year ending on 31st March, 2016 is included at Item No. 8 of the Notice convening 21st Annual General Meeting.

iii. Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of section 204 of the Act and The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, the Company has appointed M/s. Hitesh Buch & Associates, Practicing Company Secretary to undertake Secretarial Audit for the financial year ended on 31st March, 2015. Secretarial Audit Report is attached to this report as Annexure-"A". The Board has duly reviewed the Secretarial Auditor''s Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Act.

Corporate Social Responsibility [CSR]:

The Board of Directors of the Company has constituted a Corporate Social Responsibility [CSR] Committee under the Chairmanship of Dr. Sharvil P. Patel. Other members of the Committee are Mr. Ganesh N. Nayak and Prof. Indiraben J. Parikh. CSR Committee has recommended to the Board, a CSR Policy, indicating the activities to be undertaken by the Company, which is approved by the Board. The CSR Policy is posted on the website of the Company.

As part of its initiatives under Corporate Social Responsibility [CSR], the Company has contributed for healthcare, education and research in cancer and for eradicating poverty and malnutrition for the year under review. Other details of the CSR activities as required under section 135 of the Act are given in the CSR Report at Annexure-"B".

Business Risk Management:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.

Discussion on risks and concerns are covered in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Internal control systems and its adequacy:

The Company has internal control systems commensurate with the size, scale and complexity of its business operations. The scope and functions of internal auditor are defined and reviewed by the Audit committee. The internal auditor reports to the Chairman of the Audit Committee. Internal Auditors presents their quarterly report to the Audit Committee, highlighting various observations, system and procedure lapses and corrective actions are taken. The internal auditor also assesses opportunities for improvement of business processes, systems and controls, to provide recommendations, which can add value to the organization and it also follows up on the implementation of corrective actions and processes. The Management Auditor also ensures the compliance of the observations of internal and statutory auditors and presents his report to the Audit Committee.

Managing the Risks of fraud, corruption and unethical business practices:

i. Vigil Mechanism / Whistle Blower Policy:

The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct or Ethics Policy. Whistle Blower Policy is disclosed on the website of the Company.

ii. Zydus Business Conduct Policy:

The Company has framed "Zydus Business Conduct Policy". Every employee is required to review and sign the policy at the time of joining and an undertaking shall be given for adherence to the Policy. The objective of the Policy is to conduct the business in an honest, transparent and in an ethical manner. The policy provides for anti-bribery and avoidance of other corruption practices by the employees of the Company.

Extract of Annual Return:

The relevant information in prescribed Form No. MGT-9 pertaining to extract of Annual Return is attached to this Report as Annexure-"C".

Constitution of Audit Committee:

The Board has reconstituted the Audit Committee which comprises of Mr. H. Dhanrajgir as the Chairman and Dr. B. M. Hegde, Prof. Indiraben J. Parikh and Mr. Ganesh N. Nayak as the members. More details on the Committee are given in the Corporate Governance Report.

Particulars of Employees:

The information required under section 197 of the Act read with Rule 5[1] of The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are given in Annexure-"D".

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134[3][m] of the Act read with the Companies [Accounts] Rules, 2014, are provided in the Annexure-"E" and forms part of this Report.

General Disclosure:

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134[3] of the Act and Rule 8 of The Companies [Accounts] Rules, 2014 to the extent the transactions took place on those items during the year.

Acknowledgement:

Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees at all levels through their dedication, hard work and commitment, enabling the Company to achieve good performance during the year under review.

Your Directors also take this opportunity to place on record the valuable co-operation and support extended by the banks, government, business associates and the shareholders for their continued confidence reposed in the Company and look forward to having the same support in all future endeavors.

For and on behalf of the Board

Place : Ahmedabad Sharvil P. Patel Date : 14th May, 2015 Chairman


Mar 31, 2013

To The Members of Zydus Wellness Limited

The directors have pleasure in presenting 19th Annual Report of the Company along with the Audited Accounts for the financial year ended 31st March, 2013. The summarised financial results are given below:

Financial Highlights: [INR Lacs]

Particulars Consolidated 2012-13 2011-12

Sales and Other Income 40,378 34,576

Profit before Interest, Depreciation, Exceptional Expenses & Tax [PBIDET] 11,246 8,625

Less : Depreciation 450 386

Profit before Interest, Exceptional Expenses & Tax (PBIET) 10,796 8,239

Less : Interest 10 15

Profit Before Tax [PBT] 10,786 8,224

Less: Provision for Tax 883 1,365

Profit After Tax [PAT] 9,903 6,859

Less : Minority Interest 192 91

Profit attributable to shareholders 9,711 6,768

Add : Profit brought forward from the previous year 12,279 8,682

Profit available for appropriation, which is appropriated as follows: 21,990 15,450

Interim Dividend 2,344 0

Proposed Final Dividend 0 1,954

Corporate Dividend Tax on Dividend 399 317

Transferred to General Reserve 1,000 900

Balance carried to Balance Sheet 18,247 12,279

Total 21,990 15,450

Basic and Diluted Earning Per Share (EPS of FV Rs. 10/-) [in Rupees] 24.85 17.32

The consolidated financial highlights include the financials of Zydus Wellness-Sikkim, a partnership firm.

Performance Review:

For the year ended on 31st March, 2013, the sales and other income of the Company, on consolidated basis, have increased by 16.78% to Rs. 40,378 lacs compared to Rs. 34,576 lacs in the previous year. Profit before Interest, Exceptional Expenses & Tax increased by 31.04% to Rs. 10,796 lacs compared to Rs. 8,239 lacs in the previous year. The Profit After Tax increased by 44.38% to Rs. 9,903 lacs compared to Rs. 6,859 lacs in the previous year.

The Company achieved EPS of Rs. 24.85 compared to Rs. 17.32 in the previous year. The summary of performance of the business of the Company is provided in the Management Discussion and Analysis Report [MDA] forming part of this Annual Report.

Dividend:

The Board of Directors at its meeting held on 13th May, 2013 declared an interim dividend of Rs. 6/- [@ 60%] [previous year final dividend of Rs. 5/- (@ 50%)] on 3,90,72,089 Equity Shares of Rs. 10/- each fully paid-up amounting to Rs. 2,743 lacs [inclusive of dividend distribution tax of Rs. 399 lacs]. Interim Dividend was paid to those shareholders holding shares in electronic form, whose names appeared in the list of beneficiaries provided by the Depositories as on 23rd May, 2013 being the Record Date fixed by the Board of Directors for the purpose and to those shareholders holding shares in physical form as on the Record Date.

The dividend payout ratio for the current year [inclusive of corporate tax on dividend distribution] is 28.24%.

Awards & Recognition:

Mr. Amit B. Jain, Chief Financial Officer, was declared winner of CF0100 Roll of Honour 2013, in the category of "Winning Edge in Growth" by CFO India, a magazine meant for CFOs of India.

Consolidated Financial Statements:

Zydus Wellness-Sikkim [ZWS] is under the majority control of the Company and hence the accounts of ZWS are required to be consolidated with the accounts of the Company in accordance with the Accounting Standard AS-21 on Consolidation of Financial Statements issued by the Institute of Chartered Accountants of India. The audited Consolidated Financial Statements are provided in this Annual Report.

Board of Directors:

In accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Prof. Indiraben J. Parikh, Mr. Mukesh M. Patel and Dr. Sharvil P. Patel, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Board recommends their re- appointment.

In accordance with the stipulation under clause 49 of the Listing Agreement, brief resume of the Directors seeking re-appointment at the ensuing Annual General Meeting together with the nature of their expertise in specific functional areas and names of companies in which they hold office as Director and / or Chairman / Member of Committees of the Board is annexed to the notice.

Auditors:

M/s Manubhai & Co., Chartered Accountants, the Statutory Auditors of the Company have expressed their unwillingness for re-appointment at the ensuing Annual General Meeting. The Board of Directors has recommended the appointment of M/s. Dhirubhai Shah & Co., [Firm Registration No. 102511W] Chartered Accountants as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration.

The Company has received a letter from M/s. Dhirubhai Shah & Co., Chartered Accountants under the provisions of section 224[1B] of the Companies Act, 1956 expressing their willingness for appointment as the Statutory Auditors, if made by the members will be within the statutory limits prescribed.

Auditors'' Report and Notes to Accounts:

The Board has duly reviewed the Statutory Auditors'' Report on the Accounts. The Auditors'' Report is self- explanatory and do not call for any further explanation / clarification by the Board of Directors under section 217[3] of the Companies Act, 1956.

Disclosures:

There have been no material changes and commitments, which may affect the financial position of the Company between the end of the financial year and the date of this report.

Management Discussion and Analysis [MDA]:

MDA for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report.

Directors'' Responsibility Statement:

Your Directors affirm that the audited accounts containing the financial statements for the Financial Year 2012- 2013 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company''s financial conditions and results of operations.

Pursuant to section 217[2AA] of the Companies Act, 1956 the Directors confirm that:

(a) the Annual Accounts for the year ended on 31st March, 2013 have been prepared on a going concern basis;

(b) in preparation of the Annual Accounts, the applicable Accounting Standards have been followed. Necessary explanations are given for material departures, if any;

(c) sound accounting policies have been applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2013 and of the profit of the Company for the year ended on that date and

(d) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

Corporate Governance:

The Company is committed to maintain highest standards of Corporate Governance. Your Directors adhere to the requirements as provided in clause 49 of the Listing Agreement relating to Corporate Governance.

A detailed report on the Corporate Governance, together with a certificate from Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance, forms part of this report.

Cost Auditors:

The central government has directed an audit of the cost accounts maintained by the Company in respect of products-Nutralite and Mayonnaise. For conducting the cost audit for these activities for the financial year ended on 31st March, 2013, based on the recommendation of the Audit Committee, the Board had appointed M/s. Dalwadi & Associates and made an application to the Central Government in accordance with MCA Circular dated 11th April, 2011. The Cost Auditor has filed the Compliance Report for the financial year ended on 31st March, 2012 within the due date on 24th December, 2012. The due date of filing the Compliance Report was 28th February, 2013.

Personnel:

There was no employee drawing remuneration in excess of limits prescribed under section 217[2A] of the Companies Act, 1956 and Companies [Particulars of Employees] Rules, 1975 and therefore not applicable to the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under 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 are provided in the Annexure-A to this Report.

Acknowledgement:

Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees at all levels through their dedication, hard work and commitment, enabling the Company to achieve good performance during the year under review.

Your Directors also take this opportunity to place on record the valuable co-operation and support extended by the banks, government, business associates and the shareholders for their continued confidence reposed in the Company and look forward to having the same support in all future endeavors.

For and on behalf of the Board Place : Ahmedabad. Pankaj R. Patel

Date : 31st May, 2013. Chairman


Mar 31, 2012

To The Members of Zydus Wellness Limited

The directors have pleasure in presenting 18th Annual Report of the Company along with the Audited Accounts for the financial year ended 31st March, 2012. The summarised financial results are given below:

Standalone Consolidated Financial Highlights:

[INR Lacs] Particulars Standalone Consolidated 2011-12 2010-11 2011-12 2010-11

Sales and Other Income 26240 34358 34046 34358

Profit before Interest, Depreciation, Exceptional Expenses & Tax [PBIDET] 8102 9161 8625 9161

Less: Depreciation 230 149 386 149

Profit before Interest, Exceptional Expenses & Tax [PBIET] 7872 9012 8239 9012

Less: Interest 11 16 15 16

Profit Before Tax [PBT] 7861 8996 8224 8996

Less: Provision for Tax 1093 3048 1365 3048

Profit After Tax [PAT] 6768 5948 6859 5948

Less: Minority Interest - - 91 -

Profit Attributable to Shareholders 6768 5948 6768 5948

Add: Profit brought forward from the previous year 8682 5196 8682 5196

Profit available for appropriation, which is appropriated as follows: 15450 11144 15450 11144

Proposed Dividend 1954 1563 1954 1563

Corporate Dividend Tax on Proposed Dividend 317 254 317 254

Transferred to General Reserve 900 645 900 645

Balance carried to Balance Sheet 12279 8682 12279 8682

Total 15450 11144 15450 11144

Basic and Diluted Earnings Per Share [EPS of FV Rs. 10/-]

[in Rupees]

- Before Exceptional items 17.32 15.22 17.32 15.22

- After Exceptional items 17.32 15.22 17.32 15.22

The consolidated financial highlights include the financials of Zydus Wellness-Sikkim, a partnership firm as its operations were started during the year under review and therefore the current year's figures are not strictly comparable to those of the previous year.

Performance Review:

The year 2011-2012 was another challenging year for the Indian markets. The continued high level of food inflation along with the firming up of commodity costs has led to an inflationary business environment. Your Company performed creditably in a difficult year maintaining market leaderships in key brands.

The Company earned on consolidated basis total income of Rs. 34,046 lacs during the year. The profit before tax stood at Rs. 8,224 Lacs for the year ended on 31st March, 2012. The profit after tax was up by Rs. 911 lacs due to lower tax burden. As a result the Earning per Share has increased to Rs. 17.32 as compared to Rs. 15.22 in the previous year.

The summary of performance of the business of the Company is provided in the Management Discussion and Analysis Report [MDA] forming part of this Annual Report.

Dividend:

Your Directors are pleased to recommend a dividend of Rs. 5/- per Equity Share of face value of Rs. 10/- each fully paid-up [previous year Rs. 4/- per share] for the financial year ended on 31st March, 2012, amounting to Rs. 2,271 lacs [inclusive of Dividend Distribution Tax of Rs. 317 lacs]. The dividend, if declared by the shareholders at the ensuing Annual General Meeting will be paid to those shareholders, whose names stand registered in the Register of Members as on 27th July, 2012. In respect of shares held in dematerialized form, dividend will be paid to those shareholders whose names are furnished by NSDL & CDSL, as beneficial owners.

The dividend payout ratio for the current year [inclusive of corporate tax on dividend distribution] is 33.55%.

Awards & Recognition:

Mr. Amit B. Jain, Chief Financial Officer, bagged the Business Today-YES BANK Best CFO Award 2012 in the category of Consistent Liquidity Management [Midsize Companies].

Consolidated Financial Statements:

M/s. Zydus Wellness-Sikkim [ZWS], a partnership firm has commenced its commercial production during the year. As ZWS is under the majority control of the Company, the accounts of ZWS are required to be consolidated with the accounts of the Company in accordance with the Accounting Standard AS-21 on Consolidation of Financial Statements issued by the Institute of Chartered Accountants of India. The audited Consolidated Financial Statements are provided in this Annual Report.

Board of Directors:

In accordance with the provisions of the Companies Act, 1956 ["the Act"] read with Articles of Association of the Company, Mr. Ganesh N. Nayak, Mr. Pankaj R. Patel and Dr. B. M. Hegde, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Board recommends their re-appointment.

During the year Mr. Anand G. Deo, Managing Director, resigned from the services of the Company and also ceased to be a Director on the Board of the Company w.e.f. 14th February, 2012. The Board wishes to place on record its appreciation for his valuable contribution during his long association with the Company.

Mr. Elkana N. Ezekiel was appointed as an Additional Director pursuant to section 260 of the Act, w.e.f. 14th February, 2012, who shall hold the office up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member along with a deposit of Rs. 500/- pursuant to the provisions of section 257 of the Act, proposing his candidature for the office of Director. The Board recommends appointment of Mr. Ezekiel as Director.

Further, Mr. Ezekiel was appointed as Managing Director of the Company for a period of 5 years from 14th February, 2012, which is subject to approval of the shareholders at the ensuing Annual General Meeting, on the terms and conditions as contained in the draft agreement proposed to be entered into between the Company and the Managing Director. An abstract of notice of memorandum of interest dated 14th February, 2012 was send to all the shareholders of the Company, as required under section 302 of the Act.

In accordance with the stipulation under clause 49 of the Listing Agreement, brief resume of the Directors seeking appointment/re-appointment at the ensuing Annual General Meeting together with the nature of their expertise in specific functional areas and names of companies in which they hold office as Director and/or Chairman/Member of Committees of the Board is annexed to the notice.

Auditors:

M/s Manubhai & Co. [Firm Registration No. 106041W], Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Statutory Auditors have shown their willingness to accept the office on re-appointment.

The Company has received a letter from the Statutory Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under section 224[1B] of the Act and that they are not disqualified for re- appointment within the meaning of section 226 of the Act.

The necessary resolution seeking approval of members for re-appointment of Statutory Auditors has been provided in the Notice convening the Annual General Meeting.

Auditors' Report and Notes to Accounts:

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The Auditors' Report is self- explanatory and do not call for any further explanation/clarification by the Board of Directors under section 217[3] of the Act.

Disclosures:

There have been no material changes and commitments, which may affect the financial position of the Company between the end of the financial year and the date of the report.

Management Discussion and Analysis [MDA]:

MDA for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report.

Directors' Responsibility Statement:

Your Directors affirm that the audited accounts containing the financial statements for the Financial Year 2011- 2012 are in conformity with the requirements of the Act. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial conditions and results of operations.

Pursuant to section 217[2AA] of the Act, the Directors confirm that:

[a] the Annual Accounts for the year ended on 31st March, 2012 have been prepared on a going concern basis;

[b] in preparation of the Annual Accounts, the applicable accounting standards have been followed. Necessary explanations are given for material departures, if any;

[c] sound accounting policies have been applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2012 and of the profit of the Company for the year ended on that date and

[d] proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

Corporate Governance:

The Company is committed to maintain highest standards of Corporate Governance. Your Directors adhere to the requirements as provided in clause 49 of the Listing Agreement relating to Corporate Governance.

A detailed report on the Corporate Governance, together with a certificate from Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance, forms part of this report.

Personnel:

There was no employee drawing remuneration in excess of limits prescribed under section 217[2A] of the Act and Companies [Particulars of Employees] Rules, 1975 and therefore not applicable to the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217[1][e] of the Act read with the Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 are provided in the Annexure-A to this Report.

Acknowledgement:

Your Directors wish to place on record their sincere appreciation for significant contribution made by the employees at all levels through their dedication, hard work and commitment, enabling the Company to achieve good performance during the year under review.

Your Directors also take this opportunity to place on record the valuable co-operation and continued support extended by the banks, government, business associates and the shareholders for their continued confidence reposed in the Company and look forward to having the same support in all future endeavors.

For and on behalf of the Board

Place : Ahmedabad. Pankaj R. Patel

Date : 9th May, 2012. Chairman


Mar 31, 2010

The directors have pleasure in presenting SIXTEENTH Annual Report of the Company along with the Audited statement of accounts for the year ended 31st March, 2010. The summarised results are given below:

SUMMARY OF FINANCIAL RESULT:

INR - Lacs

For the year ended 31st March, 31st March, Growth (%) 2010 2009

Sates and Other Income 27402 19582 39.9

Profit before Interest, Depreciation,Exceptional expenses & Tax (PBIDET) 7319 3981 83.8

Less: Depredation 159 167 (5.1)

Profit before Interest, Exceptional expenses & Tax (PBIET) 7160 3814 86.7

Less: Interest 9 7 41.7

Expenses incurred on Composite Scheme of Arrangement 220 160 37.0

Profit Before Tax (PBT) 6931 3647 90.0

Less: Provision for Tax 2404 1267 89.8

Profit After Tax (PAT) 4527 2380 90.2

Add : Profit brought forward from the previous year 2491 1097

Profit available for appropriation, which is appropriated as follows: 7018 3477

Proposed Dividend 1172 586 100.0

Corporate Dividend Tax on Proposed Dividend 195 100 95.0

Transferred to General Reserve 455 300

Balance carried to Balance Sheet 5196 2491

Total 7018 3477

Basic and Diluted Earnings per share (EPS of FV Rs. 10/-) [in Rupees]

- Before Exceptional items 12.15 6.50

- After Exceptional items 11.59 6.09

For the year ended on 31st March, 2010, the sales and other income of the Company have increased by 39.9% to Rs. 27402 lacs compared to Rs. 19582 lacs in the previous year. Profit before Interest, Depreciation & Tax increased to Rs. 7319 lacs compared to Rs. 3981 lacs in the previous year. The Profit after Tax increased to Rs. 4527 lacs compared to Rs. 2380 lacs in the previous year. The Company achieved EPS (after exception items) of 11.59 compared to Rs. 6.09 in 2008-09. A detailed analysis of performance for the year has been included in the Management Discussion and Analysis, which forms part of the Annual Report.

Your Directors are pleased to recommend a dividend of Rs. 3/- per equity share (30%) (Previous year Rs. 1.5/- per equity share) on 39,072,089 equity shares of Rs. 10/- each fully paid-up for the financial year ended on 31st March 2010.

LISTING OF EQUITY SHARES OF THE COMPANY ON NATIONAL STOCK EXCHANGE OF INDIA LIMITED ("NSE")

The Equity Shares of the Company have been listed and admitted for dealings on National Stock Exchange of India Limited w.e.f. 13th November, 2009.

The Company has not accepted any deposits during the year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 ("the Act") read with Articles of Association of the Company, Mr. Ganesh N. Nayak and Mr. Pankaj R. Patel, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The Board recommends their re- appointment.

Mr. Jitendra R. Patel ceased to be the Managing Director w.e.f. 29th July, 2009. The Board placed on record the contribution made and the valuable services rendered by him during his association with the Company.

Dr. B. M. Hegde, Prof. Indiraben J. Parikh and Mr. Anand G. Deo were appointed as Additional Directors pursuant to section 260 of the Act w.e.f. 29th July, 2009. They shall hold office up to the date of the ensuing Annual General Meeting. The Company has received notices in writing from the members along with a deposit of Rs. 500/- each pursuant to the provisions of section 257 of the Act, proposing their candidature for the office of Directors liable to retire by rotation. The Board recommends their appointment as Directors.

Mr. Anand G. Deo was appointed as Managing Director of the Company w.e.f. 1st August, 2009, which is subject to approval of shareholders at the ensuing Annual General Meeting on the terms and conditions as contained in the agreement entered between the Company and Managing Director.

In accordance with the stipulation under clause 49 of the Listing Agreement, brief resume of the Directors seeking appointment/re-appointment at the ensuing Annual General Meeting together with the nature of their expertise in specific functional areas and names of companies in which they hold office as Director and/or Chairman/Member of Committees of the Board is annexed to the notice.

AUDITORS

M/s Mukesh M. Shah & Co., Chartered Accountants, the statutory auditors of the Company have expressed their unwillingness for re-appointment at the ensuing Annual General Meeting. The Audit Committee members and the

Board of Directors have recommended the appointment of M/s Manubhai & Co., Chartered Accountants as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration. The Company has received a letter from M/s Manubhai & Co,, Chartered Accountants under the provisions of section 224(1 B) of the Companies Act, 1956 expressing their willingness for appointment as Statutory Auditors, if made by the members will be within the statutory limits prescribed.

INTERNAL AUDIT

During the year under review, the Company has engaged the services of M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad as Internal Auditors to carry out internal audit on regular basis. The reports of the internal audit were presented for review before the Audit Committee. The Audit Committee also scrutinizes all the programmes and adequacy of the internal audits.

DISCLOSURE

As required under section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988, the relevant information and data with respect to the conservation of energy, technology absorption and foreign exchange earnings/outgo have been provided in Annexure-A, attached to this report.

There have been no material changes and commitments, which may affect the financial position of the Company between the end of the financial year and the date of the report.

As required under section 217(2) of the Companies Act, 1956, the Board of Directors informs the members that during the financial year there has been:

* no change in the nature of the Companys business and

* no change in the classes of business in which the company has an interest.

MANAGEMENT DlSCUSSION AND ANALYSIS (MDA)

MDA covering details of operations, markets, opportunities and threats, etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217 (2AA) of the Companies Act, 1956 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby state that:

(a) the Annual Accounts for the year ended 31st March 2010 are prepared on going concern basis;

(b) in preparation of the Annual Accounts, all the applicable accounting standards have been followed. Necessary explanations are given for material departures, if any;

(c) sound accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2010 and of the profit of the Company for the year ended on that date and

(d) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report is made part of this Annual report.

In compliance of section 292A of the Companies Act, 1956 and Listing Agreement, an Audit Committee has been formed.

A certificate from Hitesh Buch & Associates, Practicing Company Secretaries regarding compliance of the conditions stipulated under clause 49 of the Listing Agreement is attached to the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees providing information as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms a part of this report. However, as per the provisions of section 219(l)(b)(iv) of the Companies Act, 1956, the Annual Report excluding this statement is being sent to all members. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the Registered Office of the Company.

ACKNOWLDGEMENT

Your Directors wish to place on record their sincere appreciation for significant contribution made by the employees at all levels through their dedication, hard work and commitment, enabling the Company to achieve good performance during the year under review.

Your Directors also take this opportunity to place on record the valuable co-operation and continued support extended by the banks, government, business associates and the shareholders for their continued confidence reposed in the Company and look forward to having the same support in all future endeavors.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place : Ahmedabad. Pankaj R. Patel

Date : 14th June, 2010. Chairman

 
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