Directors Report of Amar Remedies Ltd.

Jun 30, 2010

The Directors have pleasure in presenting the Annual Report of the company and Audited Accounts along with Auditors Report for the year ended 30th June, 2010.

FINANCIAL RESULTS

(Rs.in Lacs)

"Particulars 2009-2010 2008-09

Total Income 47321.13 37104.80

Profit before depreciation, interest and tax 6906.19 4948.23

Less: Depreciation 1035.72 719.86

Interest 2077.13 1243.34

Profit before tax 3793.34 2985.02

Less: Provision for taxation 568.10 316.76

"Profit after tax 3225.24 2668.26



OPERATIONAL REVIEW

Its with pride we declare that, during the year, your Company once again performed above par and registered an upsurge with 27.97% growth in Turnover compared to last year 2008-09. Like every year this year as well, your Company was engaged in expansion of business activity in Domestic as well as International markets reflecting an upward growing trend in FMCG and Ayurvedic OTC Market. The Company achieved total income of Rs. 47321.13 Lacs and the PAT of Rs. 3225.24 lacs, as compared to the total income of Rs. 37104.80 lacs and the PAT of Rs. 2668.26 lacs in the previous year i.e during the year 2008- 2009. The company has registered an impressive growth of 27.53% in Total Income, PBDIT has grown up to 39.57 % & PAT grown up by 20.87% compared to previous year performance. Your management has made all efforts to keep its promise of increasing revenues & market share and the impact of the same is visible from current financial figures.

This year 2009-10, a Value addition was done by Introducing a New brand - "SMILES" in the domestic markets, under this brand 6 different products were launched viz - Smiles Toothpaste, Smiles Shaving Cream, Smiles Almond Soap, Smiles Talcum Powder, Smiles Petroleum Jelly and Smiles Chest Rub. Under "Amar" brand for the domestic markets, 3 new products were launched, Amar Heel Up, Amar Antiseptic Cream & Amar Super Six Toothpaste.

The Companys performance in International Markets - U.S.A., DUBAI, and AFRICA has registered consistent growth with AMAR WHITENING TOOTHPASTE, AMAR REGULAR TOOTHPASTE, AMAR TALCUM POWDER, AMAR PETROLEUM JELLY and AMAR BABY OIL. Further in extention to brand "Amar" in the International Markets, AMAR BAKING SODA TOOTHPASTE, AMAR HERBAL TOOTHPASTE, AMAR CHEST RUB and AMAR ICE GEL were introduced.

The Demand graph being in upward direction for High end Premium Cosmetics products market and with noticeable success of our high end luxurious natural beauty care products under the brand "The Natures Co" in most prominent metropolitan cities- Delhi, At Select City Walk, Saket and in Mumbai at Palladium, Phoenix Mills, your Company during this Financial Year opened 2 more stores at Express city mall at Chennai & Iscon mall at Ahmadabad and intends to open as many as 4 to 6 new stores in the coming financial year.

ACHIEVEMENTS

Crossing the Hindrance of volatility of Financial Markets, Your Company has achieved remarkable growth of 27.97 % in Sales; PBDIT has grown up to 39.57% & PAT grown up by 20.87 % as compared to previous year financial performance. In addition to this remarkable growth, your Company has also acquired a Plant in Daman and this plant is in addition to our 3 existing Ultra Modern plants at Surat, Daman and Dehradun.

During the year, the company applied for registration of "AMAR" & "FRESH SMILES" brands and its Sub - Brands in lots of Foreign Countries viz - U.A.E., U.S.A., NEPAL, ANGOLA, EGYPT, KENYA, SOUTH AFRICA and NIGERIA. During the year 2009-10, our Dubai subsidiary entered into a JOINT VENTURE with a NIGERIAN company, M/s UNION PRODUCTS in order to set up a plant in NIGERIA for manufacturing Toothpastes, Petroleum Jelly, Talcum Powder etc under our own "Brand Amar and our new BRAND - FRESH SMILES" to cater to the ever growing Nigerian markets and a few neighboring countries. This Plant in Nigeria will be our 1st overseas Plant in addition to our 4 plants in India viz - Surat, Daman 1, Daman 2 and Dehradun. This will form an excellent infrastructure for our future uninterrupted growth in domestic as well as international markets. Keeping in

mind Africa, your company developed a new brand "FRESH SMILES" under which 24 new products were developed. List of the same is as mentioned below -

- Fresh Smiles Regular Toothpaste

- Fresh Smiles Regular Toothpaste + Brush

- Fresh Smiles Ultra Whitening Toothpaste

- Fresh Smiles Ultra Whitening Toothpaste + Brush

- Fresh Smiles Red Gel Toothpaste

- Fresh Smiles Red Gel Toothpaste + Brush

- Fresh Smiles Herbal Green Gel Toothpaste

- Fresh Smiles Herbal Green Toothpaste

- Fresh Smiles Herbal Green Gel Toothpaste + Brush

- Fresh Smiles Kids Strawberry Gel Toothpaste

- Fresh Smiles Fair & Beautiful

- Fresh Smiles Moisturizing Dawn 2 Dusk Cream

- Fresh Smiles Moisturizing Aloe Vera Cream

- Fresh Smiles Moisturizing Cocoa Butter Cream

- Fresh Smiles Lanolin Lotion

- Fresh Smiles Floral Moisturizing Hand & Body Lotion

- Fresh Smiles Chamomile Talc

- Fresh Smiles Lavender Talc

- Fresh Smiles Baby Talc

- Fresh Smiles Baby Oil

- Fresh Smiles Kids Petroleum Jelly White

- Fresh Smiles Adults Petroleum Jelly Yellow

- Fresh Smiles Hair Styling Gel Green

- Fresh Smiles Hair Styling Gel Blue

DIVIDEND

With strong support of your Customers, Suppliers, Shareholders and Bankers, Your Board has again for the Year 2009-10, recommended dividend of Rs. 1.00/- per share on Equity Shares of Rs. 10/- each for the financial year 2009-10, subject to the same being approved by shareholders at the forthcoming Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS AND SUBSIDIARY COMPANY

In accordance with the Accounting Standard 21 on Consolidated Financial Statements issued by Institute of Chartered Accountants of India, your Directors provide the Audited Consolidated Financial Statements in the Annual Report

AMAR REMEDIES FZE, is a wholly owned subsidiary company incorporated at UAE. The business activity of the company is trading and marketing of FMCG and other items.

The Directors and Auditors Report and Accounts of the subsidiary companies are annexed to this Report along with the statement pursuant to section 212 of the Companies Act,1956.

MANAGEMENT DISCUSSION AND ANALYSIS

"Management discussion and analysis report" as required under the Listing Agreements with the stock exchanges has been furnished separately in this Annual Report.

LISTING AT STOCK EXCHANGE

The equity shares of the company continued to be listed on the Bombay Stock Exchange and the National Stock Exchange of India Ltd. The Annual Listing fees for the year 2009-10 have been paid to these Stock Exchanges.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Section 58A of the Companies Act 1956, from the public during the year under review.

INSURANCE

The assets of the company including buildings, Plant & Machinery and stocks, etc. have been adequately insured.

INDUSTRIAL RELATIONS

Relation with staff and workmen of the company continue to be cordial and peaceful. The directors express their gratitude towards dedication and support given by the employees.

PARTICULARS OF EMPLOYEES

Employees receiving the Remuneration in excess of the Limits, during the year, as set out under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is provided in Annexure II of the Report.

In May 2010, employee stock option scheme was approved by members through Postal ballot. Amar ESOS 2010 has been since approved by Compensation Committee of Directors for upto 10,00,000 options. Each option is convertible into one equity share of Rs.10/- each.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the company, Mrs. Pratima P. Shah and Mr. Yusuf Iqbal Yusuf, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. Mr. Jyotirmay P Varma and Ms. Preeti B. Desai were appointed on 22nd June, 2010 as an Additional Director in accordance with the provision of the Companies Act, 1956, resolution seeking approval of Members for their appointment has been incorporated in Notice of ensuing Annual General Meeting.

AUDITORS

M/s. Shyam C. Agrawal & Co., Chartered Accountants, retire as Auditor of the company at the conclusion of ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of Auditors, if re- appointed. Accordingly, the said Auditors may be reappointed as Auditors of the Company at the forthcoming Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the stock exchanges a separate section titled "Corporate Governance" has been included in this Annual Report.

CONSERVATION OF ENERGY RESOURCES, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required u/s. 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988, the particulars in respect of conservation of Energy Resources, technology absorption and Foreign Exchange Earnings & Outgo are set out in the Annexure I to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of section 217(2AA) of the Companies Act, 1956 your directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, alongwith proper explanation to material departure, wherever applicable;

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

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

iv) The Directors have prepared the annual accounts for the financial year ended 30th June, 2010 on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors commends the commitment and dedication of the employees at all levels that have contributed to the growth and success of the company. The directors would also like to thank Government, statutory authorities, Shareholders, and all other stakeholders including bankers, Financial Institutions, business associates, consumers who have continued to provide support and encouragement.

By order of the Board of Directors For Amar Remedies Limited.

Sd/- Sagar P. Shah Managing Director

Place: Mumbai

Date : 28th AUGUST, 2010

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Jun 30, 2009

The Directors have pleasure in presenting the Annual Report of the company and Audited Accounts along with Auditors Report for the year ended 30th June, 2009.

FINANCIAL RESULTS

(Rs. in Lacs)

Particula 2008-09 2007-08

Total Income 37104.80 29852.39

Profit before depreciation, interest and tax 4948.23 3578.68

Less : Depreciation 719.86 215.66

Interest 1243.34 755.81

Profit before tax 2985.02 2607.21

Less: Provision for taxation 316.76 430.79

Profit after tax 2668.26 2176.42



OPERATIONAL REVIEW

During the year, your Company was engaged in expansion of business activity in Domestic as well as International market to consolidate its position in FMCG and Ayurvedic market. The Company has achieved total income of Rs. 37104.80 Lacs and the PAT of Rs. 2668.26 lacs, as compared to the total income of Rs. 29852.39 lacs and the PAT of Rs. 2176.42 lacs in the previous year i.e during the year 2007 2008. The company has registered an impressive growth of 24.29 % in total income, PBDIT has grown up to 38.26 % & PAT grown up by 22.6 % compared to previous year performance. Your management has made all efforts to keep its promise of increasing revenues & market share and the impact of the same is visible from current financial figures.

The company has appointed C&F Agents all over India with a view to build up and strengthen its Distribution Network and Brand image. The company had successfully launched Amar Premium Toothpaste previous year and your company has added new products to its product catalog for Selling in Domestic as well as International market - Amar Clove Gel Toothpaste with Clove Fortitude, AMAR TALCUM POWDER, AMAR PETROLEUM JELLY and AMAR BABY OIL. Your company proved its commitment to quality with the ISO 9001:2000 Certification, GMP India, Star Export recognized by Govt, of India & Winner of International Star quality Award 2007 (Paris). The company has developed very good business in USA and EUROPE. Along with the same, the company has further launched its high end natural beauty care products under the brand "The Natures Co" in 1 of the most prominent metropolitan cities- Delhi, At Select City Walk, Saket. In addition to above the company is intending to open additional showroom in Mumbai at Phoenix Mills followed by a chain of showrooms of "The Natures Co" in most of the metro cities.

ACHIEVEMENTS

We are proud to inform you that your company has achieved remarkable growth of 24.29 % in total income, PBDIT has grown up to 38.26 % & PAT grown up by 22.6 % as compared to previous year financial performance. During the year the company had started commercial production in full swing and now the company is manufacturing full range of AMAR products from Dehradun Plant. This will be companys third plant to be operational in addition to existing plant at Daman & Surat. It must be worth of mentioning that your all three plants are built up without any external loan. The company is likely to enjoy all taxation benefits like excise duty, income tax & availability of power at cheaper rate. During the year 2009, we have achieved growth in direct export sales by almost 236% compared to previous years export. This is companys beginning of growth into international markets of U.S.A. and EUROPE. The company has explored market for FMCG products like talcum powder, petroleum jelly & creams for foreign markets. The company has already received export order for Talcum Powder and Petroleum Jelly from U.S.A. and is very positive about entering into this market on large scale. The company has entered into marketing agreement with A.I.O.C.D. (All India Organisation of Chemist and Druggist Association),

having 5,00,000 Medical Stores all over India registered with them. This is going to boost up sales of Amar range of products through all these outlets registered with them. The company expects good growth in sales of Amar range of products during the year due to above positive developments.

DIVIDEND

Your board has recommended dividend of Rs. 1.00/- per share on 26164150 Equity Share of Rs. 10/- each for the financial year 2008-2009, subject to the same being approved by share holder at the forthcoming Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS AND SUBSIDIARY COMPANY:

In accordance with the Accounting Standard 21 on Consolidated Financial Statements issued by Institute of Chartered Accountants of India, your Directors provide the Audited Consolidated Financial Statements in the Annual Report

AMAR REMEDIES FZE, is a wholly owned subsidiary company incorporated at UAE. The business activity of the company is trading and marketing of FMCG and other items.

The Directors and Auditors Report and Accounts of the subsidiary companies are annexed to this report along with the statement pursuant to section 212 of the Companies Act,1956.

AMAR REMEDIES FZE, which was incorporated as wholly owned subsidiary company in Ras-AI-Khaimah - Free Trade Zone, in United Arab Emirates (UAE) for carrying business of FMCG and others, has started doing business in the current year and we expect good business in the year 2010.



MANAGEMENT DISCUSSION AND ANALYSIS

"Management discussion and analysis report" as required under the Listing Agreements with the stock exchanges has been furnished separately in this Annual Report.

LISTING AT STOCK EXCHANGE

The equity shares of the company continued to be listed on the Bombay Stock Exchange and the National Stock Exchange of India Ltd. The Annual Listing fees for the year 2009-10 have been paid to these Stock Exchanges.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Section 58A of the Companies Act 1956, from the public during the year under review.

INSURANCE

The assets of the company including buildings, Plant & Machinery and stocks, etc. have been adequately insured.

INDUSTRIAL RELATIONS

Relation with staff and workmen of the company continue to be cordial and peaceful. The directors express their gratitude towards dedication and support given by the employees.

PARTICULARS OF EMPLOYEES

None of the employees during the year received the Remuneration in excess of the Limits set out under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the company, Mr. Pravin N. Shah and Mr. Dilip S. Mehta, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

AUDITORS

M/s. Shyam C.Agrawal & Co., Chartered Accountants, retire as Auditor of the company at the conclusion of ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of Auditors, if re-appointed. Accordingly, the said Auditors may be reappointed as Auditors of the Company at the forthcoming Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the stock exchanges a separate section titled "Corporate Governance" has been included in this Annual Report.

CONSERVATION OF ENERGY RESOURCES, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required u/s. 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988, the particulars in respect of conservation of Energy Resources, technology absorption and Foreign Exchange Earnings & Outgo are set out in the Annexure to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of section 217(2AA) of the Companies Act, 1956 your directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, alongwith proper explanation to material departure, wherever applicable;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June,2009 and of the profit for the year ended on that date;

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

iv) The Directors have prepared the annual accounts for the financial year ended 30th June, 2009 on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors commends the commitment and dedication of the employees at all levels that have contributed to the growth and success of the company. The directors would also like to thank Government, statutory authorities, Shareholders, and all other stakeholders including bankers, Financial Institutions, business associates, consumers who have continued to provide support and encouragement.

By order of the Board of Directors

For Amar Remedies Limited.

Sd/-

Place : Mumbai Sagar P. Shah

Date : 23rd November, 2009 Managing Director