Directors Report of Syschem (India) Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present their Twenty First Annual Report for the financial year ended on 31st March 2014.

FINANCIAL RESULTS (Amount in Lacs) PARTICULARS 31.03.2014 31.03.2013

Sales (Inclusive ofexcise duty and other income) 2121.74 1718.16

Profit/(loss) before intt, dep & tax 510.69 378.98

Interest 259.52 130.36

Profit/(loss) before dep & tax 251.17 248.62

Depreciation 175.26 111.26

Profit/(loss) before tax 75.91 137.36

Tax including deferred/provision for tax 16.51 39.31

Net Profit/(loss) after tax 59.40 98.05

Amount of loss transferred to balance sheet 286.85 343.91

BUSINESS AND PERFORMANCE

During the year under review, the turnover of the company has risen to 2121.74 lacs which is 23.5% higher than the previous year''s turnover. However the profits of the company decreased to Rs. 59.40 lacs due to adverse market conditions and higherfinance costs.

FUTURE PROSPECTUS

Presently the company is engaged in the manufacturing of Drug Intermediates and chemicals. During the current financial year, the company is planning to venture into APIs/intermediates, and will begin the manufacturing of clopidogrel, fexofenadine, etoricoxib, pentazocene, etc.The market demand for these products is very high. The company is also shifting its focus to manufacture and market the products under its own name and tapering off the job work activities.

The company is doing well under the trade mark ''Kaarigar''. Under this brand name, the company is selling wood coatings and complete range of wood finishes. The market response for these products from the market is very fovourable. The company is foreseeing significant growth for these products in the current financial year and started to market the products in the northern region of the country particularly in Chandigarh, Punjab, Haryana, Himachal Pradesh, J & Ketc The economic conditions in the country are not very conducive but still the management is confident that the company will continue to grow further as there is demand for its products in the market.

DIVIDEND

In the absence of adequate profit for the year, your directors have not recommended any dividend for the financial year 2013-14. However as per the terms of Preference Shares, 2% preference dividend, if approved by the shareholders, be paid to the preference shareholders.

FIXED DEPOSIT

During the year the Company has accepted deposit from the public within the meaning of Section 58-Aof the Companies Act, 1956 in compliance with the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

Mr. Rajesh Gupta, Wholetime Director of the Company shall retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. As stipulated in terms of Clause 49 of the Listing Agreement, the brief resume of Mr. Rajesh Gupta is provided in the Explanatory Statement annexed to the notice of the meeting. During the current financial year, Mr. Kushal Pal Singh,Managing Director, Mr. Ranjan Jain, Wholetime Director, Mr. Shanti Lai Jain, Director (Independent) and Mr. Jagir Singh, Director (Independent) have resigned from their respective positions.

LISTING

The shares of the Company are listed at Bombay Stock Exchange Limited and Delhi Stock Exchange Limited. It is regular in complying with all the listing requirements. The shares of the Company are being regularly traded in Bombay Stock Exchange.

The Board of Directors in its meeting held on 14.08.2012 had approved the voluntary delisting of its Equity Shares from Delhi Stock Exchange Ltd. in terms of SEBI (Delisting of Equity Shares) Regulations, 2009. The Company had filed application to Delhi Stock Exchange Ltd. for voluntary delisting of Equity Shares and theirapproval is still awaited.

AUDITORS

M/s Bansal Vijay & Associates, Chartered Accountants, Chandigarh, the retiring Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment for the Financial Year 2014-15. The Company received a certificate from them as required under Section 141 ofthe Companies Act, 2013. The Board recommends their appointment for your approval.

CORPORATE GOVERNANCE REPORT

As required under clause 49 of Listing Agreement the Corporate Governance Report along with certificate from Company Secretary in Practice regarding compliance of conditions of corporate governance report is enclosed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required under clause 49 (E) of Listing Agreement the Management Discussion & Analysis forms an integral part of the Directors Report.

AUDIT COMMITTEE

Pursuant to provisions of section 177 of the Companies Act, 2013and Listing Agreement the Company has constituted the Audit Committee of the company. The following are the members of the committee. Mr. Satish Chand Aggarwal is the Chairman of the Audit Committee.

Mr. Satish Chand Aggarwal Mr. Balwant Singh Sandhu Mr. Jagmohan Arora

AUDITORS REPORT

Observations in the Auditors Report are dealt with in the notes to the Accounts and being self explanatory need no further explanation.

PARTICULARS OF EMPLOYEES

None of the employees is covered Under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

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

Information required under Section 217(1)(e) of the companies Act, 1956, read with Companies (Disclosure of Particulars in the report of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is as follows:

a.Tech nology Absorption:

The Company is using indigenous technologies in the manufacturing of process. The updation of technology is an ongoing process and Company is complying with all the statutory guidelines in this regard.

b.Foreign Exchange earnings and Outgo:

The Company has not earned any income or incurred any expenditure in foreign exchange during the financial year.

DIRECTORS RESPONSIBILITY STATEMENT

As required u/s 217 (2AA) of the companies Act, 1956 the Directors states that:

1. That in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. That Directors had 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 fairview ofthestateof affairs of the company at the end ofthe financial year and of the profit or loss of the company forthat period.

3. That Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities.

4. That Directors have prepared the annual accounts on going concern basis.

ACKNOWLEDGEMENT

The Board expresses its deep gratitude and thanks to its clients, bankers, associates and shareholders for their valuable contributions towards growth ofthe company. The directors particularly wish to place on record their sincere appreciation for the best efforts put in by the employees towards upliftment ofthe Company.

For Board of Directors M/S SYSCHEM INDIA LIMITED

DATE : 13.08.2014 PLACE : Chandigarh Chairman