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TH30 ANNUAL REPORT

TH30 ANNUAL REPORT

2013 -20142013 -2014

BOARD OF DIRECTORS:BOARD OF DIRECTORS:Mr. Kantilal M. Hiran(Chairman and Managing Director)

Mr. H. N. Bafna

Mr. M. Kailash Kumar (Upto August 7, 2014)

Mr. Ashokchand A. Lunia (Upto March 29, 2014)

AUDITORS:AUDITORS:M/s. MVK Associates(Chartered Accountants)

BANKERS:BANKERS:Housing Development Finance Corporation (HDFC Bank)

REGISTERED OFFICE:REGISTERED OFFICE:thUnit No. 908, 9 Floor

Ijmina-Immitation JewelleryMarket CSL Raheja Metroplex, Off Link Road, Malad (W), Mumbai – 400 064.Tel.: 022-40144127Fax: 022-40953099Email: [email protected]: www.hiranorgochem.com

REGISTRAR AND SHARE TRANSFER AGENTS:REGISTRAR AND SHARE TRANSFER AGENTS:Bigshare Services Pvt. Ltd.E-2 /3, Ansa Industrial Estate,Sakivihar Road, Andheri (E),Mumbai – 400 072.Tel.: 022-40430200Fax: 022-28475207Email: [email protected]: www.bigshareonline.com

Forward – Looking Statement

In this annual report we have disclosed forward looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements, written and oral, that we periodically contain forward looking statements that set out anticipated results based on the management's plan and assumptions. We have tried wherever possible to identify such statements by using words such as 'anticipate', ''estimate', 'expects', 'project', 'intends', 'plans', 'believes' and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future information or otherwise.

CONTENTSNotice 1

Directors’ Report 9

Report on Corporate Governance 17

Certification by Chairman& Managing Director 24

Certificate 25

Management Discussion and Analysis 15

Auditors’ Report 26

Balance Sheet 32

Statement of Profit and Loss Account 33

Cash Flow Statement 34

Notes to the Financial Statement 35

Annexure to the Director's Report 13

Annexure to the Auditors' Report 28

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Mr. Nitinn Gupta (From August 6, 2014)

1

NOTICE is hereby given that the Thirtieth Annual General Meeting of the Members of HIRAN ORGOCHEM thLIMITED will be held on Tuesday, 30 September, 2014 at 9:30 a.m. at Flags Restaurant - B/109 Kemp Plaza,

Mindspace, Chincholi Bunder Road, Malad West, Mumbai – 400064 to transact the following business:

ORDINARY BUSINESS:

st1. To receive, consider and adopt the Audited Balance Sheet as at 31 March, 2014 and Profit and Loss Account (Statement of Profit and Loss) for the period ended on that date along with the Reports of Directors' and Auditor thereon.

2. To appoint a Director in place of Mr. Kantilal Hiran (DIN: 00186885) who retires by rotation under the applicable provisions of the Companies Act, 2013 and being eligible, offered himself for re-appointment.

3.

SPECIAL BUSINESS:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013, Mr. Hirachand Bafna (holding DIN 00187179), Director of the Company who retires by rotation at this Annual General Meeting under the erstwhile provisions of Companies Act,1956 and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 signifying his intention to propose Mr. Hirachand Bafna as a candidate for the office of the Independent Director of the Company, be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term upto September 29, 2019, not liable to retire by rotation.”

5.

“RESOLVED THAT Mr. Nitinn Gupta (holding DIN 06938425), who was appointed as an Additional Director

To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to Section 139(1) and other applicable provisions of the Companies Act, 2013, M/s. MVK Associates, Chartered Accountants, Mumbai (Registration No. 120222W) be and are hereby appointed as Statutory Auditors of the Company to hold office for the period of 3 (three) years from the conclusion of this Annual General Meeting until the conclusion of fourth Annual General Meeting, to examine and audit the accounts of the Company for the financial year 2014-15, 2015-16 and 2016-17 at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors plus reimbursement of out of pocket expenses and applicable taxes.”

FURTHER RESOLVED THAT the appointment of M/s. MVK Associates, Chartered Accountants, Mumbai

(Registration No. 120222W) for the period of 3 (three) years made at the ensuing Annual General Meeting shall be subject to ratification at both the subsequent Annual General Meetings.”

4. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary

Resolution:

To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

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thof the Company by the Board of Directors with effect from 6 August 2014 in terms of section 161(1) of Companies Act, 2013 and whose term of office expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 signifying his intention to propose Mr. Nitinn Gupta as a candidate for the office of the Independent Director of the Company, be and is hereby appointed as an Independent Director of the Company pursuant to Section 149 and Section 152 of the Companies Act, 2013 to hold office for five consecutive years for a term upto September 29, 2019, not liable to retire by rotation.”

By Order of the Board

Place: Mumbai Kantilal M. Hiran stDate:1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885 Address: 103/104, C-wing, Vastu park,

Evershine Nagar, Malad (w), Mumbai, 400064.

Registered Office: Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja Metroplex, Link Road, Malad (West), Mumbai – 400 064

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY/ PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY/PROXIES NEED NOT BE A MEMBER OF THE COMPANY. THE PROXIES IN ORDER TO BE VALID MUST BE DULY COMPLETED, STAMPED AND SIGNED AND MUST REACH THE COMPANY'S REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. PERSON CAN ACT AS PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY (50) AND HOLDING IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS. A MEMBER HOLDING MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS MAY APPOINT A SINGLE PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS A PROXY FOR ANY OTHER PERSON OR SHAREHOLDER. A PROXY FORM IS SENT HEREWITH. PROXIES SUBMITTED ON BEHALF OF THE COMPANIES, SOCIETIES ETC., MUST BE SUPPORTED BY AN APPROPRIATE RESOLUTION/AUTHORITY, AS APPLICABLE.

nd3. The Register of Members and Share Transfer Books will remain closed from Monday, 22 September 2014 to thTuesday, 30 September 2014 (both days inclusive).

4. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the Special Business as set out above is annexed hereto.

NOTES:

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5. Members are requested to notify immediately any change in their address/bank mandate to their respective Depository Participant (DP) in respect of their electronic share accounts and to the Company's Registrar & Share Transfer Agent at Big Share Services Pvt. Ltd., E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai – 400 072 in respect of their physical share folios.

6. Members holding shares in physical form may avail themselves of the facility of nomination in terms of Section 72 of the Companies Act, 2013 by nominating in the prescribed form a person to whom their shares in the Company shall vest in the event of their death. The prescribed form can be obtained from the Company's Registered Office or from its R & TA at either of the aforesaid addresses.

7. Green Initiative: In order to support the Green Initiative implemented by the Ministry of Corporate Affairs, for receipt of various documents and notices through electronic mode the Members who have not yet registered their email address with the Depository through their concerned Depository Participants (DPs) are requested to register the same with their DPs. Members who hold shares in physical form are requested to register their email address with the Company's Registrar & Share Transfer Agent at Big Share Services Pvt. Ltd., E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai – 400 072.

The Company believes in green initiative and is concerned about the environment. The Company has emailed the documents in electronic mode at your email address obtained from the depositories/R & TA. Members who have not registered their email addresses have been furnished hard copy of the documents.

8. Members desirous of obtaining any information concerning the accounts and operations of the Company are requested to address their queries to the Chairman & Managing Director, so as to reach the registered office of the Company at least seven days before the date of the meeting, to enable the Company to make available the required information at the meeting, to the extent possible.

9. Members/proxies are requested to bring the Attendance Slips sent herewith duly filled for attending the Meeting.

10. Voting through electronic means:

In compliance with the provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is pleased to provide members the facility to

thexercise their right to vote at the 30 Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by Central Depository Services Limited (CDSL).

The instructions for members for voting electronically are as under:

(i) Log on to the e-voting website www.evotingindia.com during the voting period.

(ii) Click on “Shareholders” tab.

(iii) Now, select the “Hiran Orgochem Limited” from the drop down menu and click on “SUBMIT”

(iv) Now Enter your User ID

a. CDSL: 16 digits beneficiary ID,

b. NSDL: 8 Character DP ID followed by 8 Digits Client ID

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c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

(vii) If you are a first time user, then follow the steps given below:

1. Enter your 10 digit alpha-numeric PAN issued by Income Tax Department.

Members who have not registered their PAN with the Company / Depository Participant (DP) are requested to use the default PAN number: as (ABCDE1234Z) in the PAN Field.

2. Enter either the Date of Birth (DOB) in dd/mm/yyyy format OR the Dividend Bank Details, as recorded in your demat account or in the company records for the said demat account or folio, in order to login.

In case either of the details are not recorded with the Company / DP, then please enter the value 01/01/1990 (dd/mm/yyyy format) in the DOB field or 0123456789 in the Dividend Bank details field. After entering these details appropriately, click on “SUBMIT” tab.

(viii) Members holding shares in physical form will then reach directly to the Company selection screen. However, members holding shares in demat form will now reach 'Password Creation' menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that same password will be used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and to take utmost care in keeping your password confidential.

(ix) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice and not for any other company.

(x) Click on the EVSN of HIRAN ORGOCHEM LIMITED on which you choose to vote.

(xi) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiii) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xiv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xv) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvi) If Demat account holder has forgotten the changed password then enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

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Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to https:/www.evotingindia.co.in and register themselves as Corporate.

•They should submit a scanned copy of the Registration Form bearing the stamp and sign of the entity to [email protected].

•After receiving the login details they have to create a user who would be able to link the Account which they wish to vote on.

•The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

•They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, in PDF format in the system for the Scrutinizer to verify the same.

B. The voting period begins on Monday, September 22, 2014 at IST 09:00 a.m. and ends on Wednesday, September 24, 2014 at IST 05.30 p.m. During this period shareholders' of the Company, holding shares either

thin physical form or in dematerialized form, as on the cut-off date of 29 August 2014, may cast their vote electronically.

The e-voting module shall be disabled by CDSL for voting thereafter.

C. In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.co.in under help section or write an e-mail to [email protected].

D. The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the thCompany as on the cut-off date (record date) of 29 August 2014.

E. Hemanshu Kapadia, Practising Company Secretary, has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

F. The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of the e-voting period unblock the votes in the presence of at least two (2) witnesses not in the employment of the Company and make a Scrutinizer's Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.

G. The results shall be declared on or after the AGM of the Company. The Results declared alongwith the Scrutinizer's Report shall be placed on the Company's website www.hiranorgochem.com and on the website of CDSL.

Ms. Pooja Udeshi, Practising Company Secretary and on failing her, Mr.

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11. A brief resume of Directors proposed to be appointed/re-appointed at this Annual General Meeting pursuant to Clause 49 of the Listing Agreement is as follows:

6

Name

Age

Qualification

Nature of Expertise

Experience

Name of other Public Companies in which holds Directorship

Name of other Companies in Committees of which holds Membership/ Chairmanship

Shareholding in Hiran Orgochem Limited

Mr. Hirachand Bafna

55 years

M.Com, L.L.B, A.C.S, F.C.A.

Practicing Chartered Accountant

28 years

Water World Fun Resorts Ltd.

None

Nil

Mr. Kantilal Hiran

58 years

Matriculation

Management & Marketing

42 Years

None

None

44,46,500 equity shares of Rs.10/- each

Mr. Nitinn Gupta

33 years

B.Com, IIBM.

IT/ ITES/ BPO & Entertainment Industries.

9 years.

None

None

Nil


Place: Mumbai Kantilal M. Hiran stDate:1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885 Address: 103/104, C-wing, Vastu park,

Evershine Nagar, Malad (w), Mumbai, 400064.

Registered Office: Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja Metroplex, Link Road, Malad (West), Mumbai – 400 064

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EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013.

Item no. 4

Mr. Hirachand Bafna (DIN 00187179) is a Non-Executive Independent Director of the Company. He joined the Board of Directors of the Company on June 1, 1992. Mr. Hirachand Bafna (DIN 00187179) is the Chairman of Audit Committee, Investors'/Shareholders' Grievances Committee and Remuneration Committee of the Company. Mr. Hirachand Bafna (DIN 00187179) is a Practising Chartered Accountant and he has experience of 28 years in the field of Chartered Accountancy. He also holds directorship in Water World Fun Resorts Limited.

Mr. Hirachand Bafna (DIN 00187179), Director of the Company retires by rotation at this Annual General Meeting under the erstwhile Companies Act, 1956. He was on Board of the Company as an Independent Director under Clause 49 of the Listing Agreement. Due to applicability of Companies Act, 2013, the Company is required to appoint Independent Director pursuant to Section 149 of the Companies Act, 2013 whose period of office shall not be liable to retire by rotation. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Hirachand Bafna (DIN 00187179) being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director for five consecutive years for a term upto September 29, 2019. The Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 alongwith a deposit of Rs. 1,00,000/- proposing the candidature of Mr. Hirachand Bafna (DIN 00187179) for the office of Independent Director, to be appointed as such under the provisions of Section 149 of the Companies Act, 2013.

The Company has received from Mr. Hirachand Bafna (DIN 00187179):

a) Consent in writing to act as Director in Form DIR-2 pursuant to sub-section 5 of Section 152 of the Companies Act, 2013.

b) Declaration pursuant to sub-section 4 of Section 152 of the Companies Act, 2013 to the effect that he is not disqualified to become a Director under Section 164 (2) of the Companies Act, 2013.

c) A declaration to the effect that he meets the criteria of the independence as provided under sub-section 6 of Section 149 of the Companies Act, 2013.

In the opinion of the Board of Directors, Mr. Hirachand Bafna (DIN 00187179), the Independent Director proposed to be appointed, fulfils the conditions specified in the Companies Act, 2013 and Rules made thereunder and he is independent of the management. A copy of the draft letter for the appointment of Mr. Hirachand Bafna (DIN 00187179), as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the Members at the Registered Office of the Company during normal business hours on any day, excluding Saturday, Sunday and Public Holiday upto the date of the Annual General Meeting.

The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail the services of Mr. Hirachand Bafna (DIN 00187179), as an Independent Director.

Accordingly, the Board recommends the resolution set forth in Item No. 4 for the approval of the Members as an Ordinary Resolution.

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Item no. 5

Mr. Nitinn Gupta (holding DIN: 06938425), who was appointed as an independent Additional Director of the tCompany by the Board of Directors with effect from 6 h August 2014 in terms of Section 161(1) of Companies Act,

2013 and whose term of office expires at this Annual General Meeting. The Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 alongwith a deposit of Rs. 1,00,000/- proposing the candidature of Mr. Nitinn Gupta (DIN 06938425) for the office of Independent Director, to be appointed as such under the provisions of Section 149 of the Companies Act, 2013 and in terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Nitinn Gupta (DIN 00187179) being eligible and offering himself for appointment, is proposed to be appointed as an Independent Director for five consecutive years for a term up to September 29, 2019.

The Company has received from Mr. Nitinn Gupta (DIN 06938425):

a) Consent in writing to act as Director in Form DIR-2 pursuant to sub-section 5 of Section 152 of the Companies Act, 2013.

b) Declaration pursuant to sub-section 4 of Section 152 of the Companies Act, 2013 to the effect that he is not disqualified to become a Director under Section 164 (2) of the Companies Act, 2013.

c) A declaration to the effect that he meets the criteria of the independence as provided under sub-section 6 of Section 149 of the Companies Act, 2013.

In the opinion of the Board of Directors, Mr. Nitinn Gupta (DIN 06938425), the Independent Director proposed to be appointed, fulfils the conditions specified in the Companies Act, 2013 and Rules made thereunder and he is independent of the management. A copy of the draft letter for the appointment of Mr. Nitinn Gupta (DIN 06938425) as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the Members at the Registered Office of the Company during normal business hours on any day, excluding Saturday, Sunday and Public Holiday upto the date of the Annual General Meeting.

The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail the services of Mr. Nitinn Gupta (DIN 06938425) as an Independent Director.

Accordingly, the Board recommends the resolution set forth in Item No. 5 for the approval of the Members as an Ordinary Resolution.

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DIRECTORS' REPORT

To,The Members,

The Directors hereby present the Thirtieth Annual Report on the business, operations and the Audited Accounts of your Company for the financial period

stended 31 March, 2014.

Financial Highlights: (Rs. in Lacs)

Particulars Current st(1 July 2013

st thto 31 to 30 March 2014) June 2013)

Net Sales and other Income 356.58 2547.92

Less: Expenditure except

Finance Cost & Depreciation 908.89 8263.59

Profit/(Loss) before Finance

Cost, Depreciation & Taxation (552.31) (5715.67)

Less: Finance Cost &

Depreciation 169.26 285.37

Less: Extraordinary Item - -

Profit/(Loss) before Taxation (721.57) (6001.04)

(Add)/Less: Provision for

Taxation & Deferred Tax - -

Profit/(Loss) after Taxation (721.57) (6001.04)

Performance: stThe financials of the Company for the period ended 31

stMarch 2014 are for nine months i.e. from 1 July 2013 st stto 31 March 2014 while of the previous year from 1

thJuly 2012 to 30 June 2013 i.e. 12 months and thus the financials are incomparable.

During the year under review, the Company registered sales including other income, of Rs.356.58 Lacs. The Company suffered Net Loss after Tax of Rs. 721.57 Lacs. Recently, SBI has taken over the physical possession of the factory and its all assets located in the factory at Panoli, due to which Company's business is at halt. The Sales shown in the Annual Accounts is due to trading turnover.

Dividend:

Considering the financial position of the Company, your Directors express their inability to recommend any

stdividend for the financial period ended 31 March, 2014.

Period Previous Yearst(1 July 2012

Directors:

Mr. Nitinn Gupta (DIN 06938425) who was appointed as an Additional Director of the Company at Board of

thDirectors meeting held on 6 August 2014 whose tenure expires at forthcoming Annual General Meeting and in respect of whom the Company has received notice under Section 160 of the Companies Act, 2013 is proposed to be appointed as an Independent Director of the Company who shall not be liable to retire by rotation.

Pursuant to Section 152(6) of the Companies Act, 2013 Mr. Kantilal Hiran (DIN: 00186885), who retires by rotation at the forthcoming Annual General Meeting and being eligible, he offers himself for re-appointment.

As per Section 152 of the Companies Act, 2013, Mr. Hirachand Bafna (DIN 00187179), Independent Non-Executive Director of the Company who retires by rotation as per the provisions of the erstwhile Companies Act 1956, in respect of whom a notice in writing pursuant to Section 160 of the Companies Act, 2013 has been received from a member proposing their candidature for the office of Independent Director of the Company, being eligible is proposed to be appointed as an Independent Director of the Company who shall not be liable to retire by rotation.

The Board recommends the resolutions set out in the thNotice of the 30 Annual General Meeting for the

approval of the members. A brief profile of all the 3 Directors as required under Clause 49(VI)(A) of the Listing Agreement is given the Notice of the ensuing Annual General Meeting.

During the year Mr. Ashokchand Lunia resigned on March 29, 2014 and Mr. Kailash Kumar resigned on August 7, 2014 due to pre-occupation. The Board would like to place on record its appreciation for their valued inputs and co-operation during their tenure as the Directors of the Company.

Directors' Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

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DIRECTORS' REPORT

a. the Company has followed the applicable accounting standards in the preparation of the Annual Accounts and there had been no material departure;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state

st of affairs of the Company as on 31 March, 2014 and of the Loss of the Company for that period;

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

st d. the annual accounts for the period ended 31March, 2014 have been prepared on going concern basis.

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Public Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended.

Auditors:

M/s. MVK Associates, Chartered Accountants, having Firm Registration No. 120222W, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The retiring Auditors have furnished a Certificate under Section 139(1) of the Companies Act, 2013 confirming their eligibility and willingness to accept office, if appointed. The Board proposes their appointment as Statutory Auditors of the Company.

Auditors' Report:

The Auditors of the Company have made observations in their report. The observations of the Auditors and the Management's reply for the same are as under:

Sr. No.

1.

2.

Auditors' Observation

Long term Investments of the company aggregating to 4.41 Crores is in Actgen Pharma Private limited. Networth of Actgen Pharma Private Limited has completely eroded but the management is of the view that such diminution is of not permanent nature and hence provision for diminution in the value of investment is not provided. Losses more than twice its shareholders funds and provision for diminution in value of this assets has not provided in the books of accounts.

During the year, State bank of India have taken physical possession of all the secured assets on 4th February, 2014 including the land & factory building due to company's inability to repay the loan. And there are various legal cases are pending against the company and its directors under SARFASEI Act, 2002 and Negotiable Instruments Act, 1881. So we are unable to comment on whether company can operate as going concern.

Management Reply

The Diminution in the value of Investment is temporary. The management is confident that the investment will grow in near future.

In view of physical possession of Land & Factory building taken over by the Bank, the manufacturing operation has been suspended. However, the Company is operating its trading business and therefore the accounts have been prepared in the going concern basis. Your Company's management is reviewing the situation and exploring the possibility to commence the manufacturing activity.

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DIRECTORS' REPORT

Other comments of the Auditors are self explanatory and do not require further explanation.

Corporate Governance:

A Report on Corporate Governance and a certificate from M/s. Hemanshu Kapadia & Associates, Company Secretaries in Whole-time practice, regarding compliance of the requirements of Corporate Governance along with the Management Discussion & Analysis Report pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchange are annexed hereto.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the financial period under review as stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchange is set out in a separate section forming part of Annual Report.

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

Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required 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 annexed hereto and forms part of this report.

Particulars of Employees:

During the period under review, none of the employees of the Company, whether employed for the whole year or part thereof, was in receipt of remuneration aggregating to or in excess of the limits specified under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, and hence, no particulars are required to be furnished in connection with the same.

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3.

4.

5.

Company has exceeded the limit specified in Section 372A of Companies Act, 1956 as regards to lending money and also limits specified in Section 293 of Companies Act, 1956 as regards to borrowing money.

Under point 9© of Annexure to Auditors Report few instances of delay in payment of undisputed Statutory dues has been pointed out.

Company has not revalued its foreign exchange assets and liabilities (i.e mark to market) as per Accounting Standard 11 relating to account of Foreign Exchange Transactions. Effect of the same is not ascertainable.

The Company at the time of borrowing under Section 293 and while investing funds under Section 372A of the Companies Act 1956 had passed the necessary special/ordinary resolution and further, the Company has initiated Postal ballot for approval of Shareholder for regularizing current borrowing limit under the Companies Act 2013 whose results shall be declared on 10th September 2014.

The management has to inform that the Company is facing financial constrain and thus could not pay the same on time. However, as the situation improves the payment shall be done immediately.

The Balance GDR proceeds of the Company are seized by the Euram bank and Company has demanded the amount back from the Bank by taking Legal Course. Therefore, the Company is unable to revalue the Foreign Exchange.

DIRECTORS' REPORT

Acknowledgements:

The Board wishes to place on record their sincere appreciation for the continuous support received from Shareholders, Customers, Suppliers, Bankers, Statutory Authorities and all other business associates. The Board also takes this opportunity to appreciate and value the contribution made by the Company's employees at all levels during the period under review.


Place: Mumbai Kantilal M. Hiran stDate: 1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885

Address: 103/104, C-wing, Vastu park, Evershine Nagar, Malad (w),

Mumbai - 400064.

Registered Office:Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja Metroplex, Link Road, Malad (West), Mumbai – 400 064.

2013-14

12

13

ANNEXURE TO THE DIRECTOR'S REPORT

Information in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part

st of the Directors' Report for the period ended 31March, 2014.

I. CONSERVATION OF ENERGY

The Company has taken measures and applied strict control systems to monitor day to day power consumption, to endeavor to ensure the optimal use of energy with minimum extent possible wastage as far as possible. The Company has further put all efforts and thrust for tapping non-conventional energy sources. The day-to-day consumption is monitored and various ways and means are adopted to reduce the power consumption in an effort to save energy.

FORM – A

Form of disclosure of particulars with respect to Conservation of Energy

II. T E C H N O L O G Y A B S O R P T I O N , ADAPTATION AND INNOVATION AND RESEARCH & DEVELOPMENT

FORM-B

Form of disclosure of particulars with respect to Technology Absorption

A. T E C H N O L O G Y A B S O R P T I O N , ADAPTATION AND INNOVATION:

1. Efforts in brief, made towards technology absorption, adaptation and innovation:

The Company has a full-fledged Laboratory continuously engaged in research and development of existing products. As soon as the development work is done, its contribution to the cost reduction and quality is tested and thereafter it is included in the standard operat ing procedure of commercial production.

2. Benefits derived as a result of the above efforts:

Benefits derived as a result of the above efforts are product quality improvement, cost reduction, product development, import substitution etc. The continuous up-gradation

4. Gas PurchasePurchases (Units) NA 63332Total Amount (Rs. in Lacs) - 15.00Average rate/Unit (Rs.) - 23.68B. Consumption per Unit of Production:Electricity (Units/Kg.) NA 2.68Gas (Units/Kg.) NA 1.58

ENERGY CONSUMPTION

Year Ended

Year Ended

31-03-2014

30-06-2013

A. Power and Fuel Consumption1. ElectricityPurchases (Units) 9404 107220Total Amount (Rs. in Lacs) 59810 8.46Unit Rate (Rs.) 6.36 7.892. L.D.O./F.O.Quantity (K. Ltrs) NA NATotal Cost (Rs. in Lacs) - -Average rate/Unit (Rs.) - -3. Others/Internal generationQuantity (Units) NA NATotal Cost (Rs. in Lacs) - -Average Rate/Unit (Rs.) - -

ENERGY CONSUMPTION

Period Ended

Year Ended

31-03-2014

30-06-2013

2013-14

14

and adoption of technology has benefited the company in the form of production process, better yields and quality of the end product and cost reduction.

3. Purchase of technology imported during the last 5 years: NIL

B. RESEARCH AND DEVELOPMENT (R&D):

1. Specific areas in which R&D carried out by the company.

The Company has carried out Research and Development in several areas with in-house facilities available to reduce the input cost and create new generic for the industry.

2. Benefits derived as a result of the above R&D.

The Company has derived the benefits of reduction in cost and improvement in quality due to the above efforts.

3. Future Plan of action

To reduce cost and improve quality, R&D efforts will be continued in the area mentioned above.

III. FOREIGN EXCHANGE EARNINGS AND

OUTGO:

Earnings - 65.57Outgo - 2.39Value of Import on CIF Basis - -

Foreign Exchange PeriodEnded

Year Ended

31-03-2014(Rs. In Lacs)

30-06-2013(Rs. In Lacs)

ANNEXURE TO THE DIRECTOR'S REPORT 2013-14


Place: Mumbai Kantilal M. Hiran stDate: 1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885

Address: 103/104, C-wing, Vastu park, Evershine Nagar, Malad (w),

Mumbai - 400064.

Registered Office:Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja Metroplex, Link Road, Malad (West), Mumbai – 400 064.

15

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities law. Actual results could differ materially from those expressed or implied. Results should be appreciated in the context of unprecedented and unfortunate happening of forfeiture of Fixed Deposit with Euram Bank resulting in substantial erosion of capital. Important factors that could make a difference to the company's future operations include economic conditions, in which the company operates changes in the government regulations, tax laws and other statutes and other incidental factors.

(a) Industry Structure and Developments:

The Indian Pharma industry is on a good growth path and is likely to be in the top 10 global markets in value term by 2020. The Indian pharmaceutical industry revenue is expected to expand at a CAGR of 17% during 2008-16 and reach US$ 36 billion. India's pharmaceutical industry accounts for about 1.4% of the global pharmaceutical industry in value terms and 10% in volume terms. The Company has to adopt new business models and think of innovative ideas to service their evolving customers faster and better. The industry has seen many regulatory interventions over the last few years, which will require careful consideration by Pharma companies as they plan their future strategies.

(b) Opportunities and Threats:

The Indian pharmaceutical industry, the most respected amongst the emerging nations, is one of the most sought after sectors from a global collaboration point of view. Having a strong macro and socio economic foundation, the “driving” factors are intrinsically deep-rooted in the Indian pharmaceutical sector and have not been deterred by recent speed breakers like quality issues faced by a few Indian companies.

The Indian Pharma sector offers a lot to be optimistic about. The sector which was only $ six billion in 2005 has zoomed to $18 billion market in 2012, clocking a CAGR of 17 per cent. The sector is expected to grow to $45 billion by 2020. Even in the most pessimistic scenario, the sector is expected to be the sixth largest in the world in terms of absolute size by 2020.

The manufacture of pharmaceuticals is strictly regulated across the world. Any Lapse in applicable regulations at any step, there could be regulator enforced shutdown of the concerned production facilities which currently the Company is facing. Other risks include, delay in approval(s) or revocation of drug approvals previously granted, failure or delay in obtaining approvals for new products, product recalls of existing drugs sold in the market. Regulators worldwide continue to raise the bar for quality expectation and compliance requirements with increasingly more severe consequences for non-compliance. Specifically w.r.t. the Company the biggest threat is to manage the huge financial loss due to seizer of retail account by EURAM Bank and closure of its plant by Pollution Control Board. The Company is taking best of its effort and has also filed case against EURAM Bank and on recovery of the amount, sees an opportunity to restart its operations, otherwise it shall be difficult to run the operations smoothly.

(c) Segment-wise or Product-wise Performance

The segment results and other details of bulk drugs and other segment are furnished in the Notes to Accounts.

(d) Outlook

The immediate task in hand is to arrive at an appropriate one time settlement with company's Banker and also to recover the seized amount from EURAM Bank. With this background the future business scenario is difficult to be contrived at the present juncture.

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16

(e) Risks and Concerns

In the highly competitive market subject to rapid Technological changes and regulatory developments, the company's ability to manage diverse risks determines its success. As the business environment remains challenging and scale becomes the most critical component for survival. The Company is presently focusing on debt redemption and business restructuring.

(f) Internal Control Systems and their adequacy

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of its business. These systems and procedures provide reasonable assurance of maintenance of proper accounting records, reliability of financial information, protection of resources and safeguarding of assets against unauthorized use. The management has appointed M/s. Maloo & Associates as the Internal

thAuditor in its meeting held on 14 August 2014 for regular review of the internal control systems and procedures.

(g) Discussion on Financial performance with respect to operational performance

(Rs. In Lacs)

Highlights 2013-14 2012-13

Total quantity of Sales of Own 500 46,824Manufactured Bulk Drugs (in Kgs.)

Income from Operations 356.58 2547.92

(Loss)/Profit before Finance Cost, Depreciation and Tax (552.31) (5715.67)

Finance Cost 18.26 8.15


Extra Ordinary Item - -

Provision for taxation (Including Deferred Tax) - -

Net (Loss)/Profit after Tax (721.57) (6001.04)

Earnings per Share (in Rs.)

- Basic -0.73 -6.08- Diluted -0.73 -6.08

MANAGEMENT DISCUSSION AND ANALYISIS REPORT

(h) Human Resource Development:

We recognize the critical role that our people play in the success and growth of the business. It is the skill and the initiative of the workforce that sets the Company apart from its peers in today's technology driven economy. As in the past, the company enjoyed cordial relations with the employees at all levels. Due to the closure, the no.

stof employees as on 31 March, 2014 is 2.


Place: Mumbai Kantilal M. HiranstDate: 1 September 2014 Chairman & Managing

DirectorCIN: L51900MH1983PLC029596 DIN: 00186885

Address:

103/104, C-wing, Vastu park, Evershine Nagar, Malad (W),

Mumbai, 400064.

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A. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:

Your Company's philosophy on Corporate Governance envisages attainment of highest level of integrity, fairness, transparency, equity and accountability in all facets of its functioning and in its interactions with shareholders, employees, government, regulatory bodies and the community at large. Your Company has been uploading fair and ethical business and corporate practices and transparency in its dealings. The Directors of the Company believe that good Corporate Governance improves Company's performance, enhances Corporate Social Responsibility and benefits all stakeholders. Accordingly, the Board has established a Corporate Governance framework to ensure that these intentions are met and that all stakeholders are informed about the affairs of the Company.

B. BOARD OF DIRECTORS:

(i) Board Composition:

The Board consists of 3 Directors having varied experience in different areas. The composition of the Board is in conformity with the provisions of Clause 49 of the Listing Agreement. Mr. Kantilal M. Hiran, Chairman & Managing Director of the Company, heads the Board. The Board consists of Two (2) Non-Executive Independent Directors. Mr. Ashokchand Lunia resigned from the

thdirectorship on 29 March 2014.

The composition of the Board and the number of directorships in other companies and committees are given below:

* Other Directorships exclude the Directorships held in Private Limited Companies, Foreign Companies and Companies under Section 25.

# Committees of Directors includes Audit Committee and Shareholders'/Investors' Grievance Committee only. (ii) Board Meetings and Attendance of Directors:

The Board meets at least once in a quarter to consider amongst other business, the performance of the company's quarterly financial results. When necessary, additional meetings are held. The Board meetings are generally held at the Registered Office of the Company at Mumbai. Agenda for each meeting along with explanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggest the inclusion of items on the agenda.

st During the financial year ended 31 March 2014,

6 (Six) Board Meetings (excluding adjourned th thmeeting) were held i.e. on 30 July 2013, 29

th rdAugust 2013, 14 November 2013, 3 December th th2013 ,20 January 2014 and 12 February 2014.

The maximum interval between any two meetings was well within the maximum allowed gap of four months.

The table hereunder gives the attendance record of the Directors at the Board Meetings held during

st stthe financial period 1 July 2013 to 31 March 2014 and at the last Annual General Meeting:

REPORT ON CORPORATE GOVERNANCE

17

Director Category Number of others

Directorships*

Committee Memberships #

Committee Chairman

ships#

Mr. Kantilal M. Hiran

Mr. H. N. Bafna

Mr. M. Kailash Kumar

Chairman & Managing Director, Executive, Promoter

Non-Executive, Independent

Non-Executive, Independent

1

Name of the Directors

Number of Board Meetings attended

Mr. Kantilal M. Hiran 6 YesMr. H.N. Bafna 6 YesMr. M. Kailash Kumar 6 NoMr. Ashok Lunia 6 No

Whether Last Annual General Meeting Attended

C. COMMITTEES OF THE BOARD:

The Board Committees play an important role in the governance structure of the Company and are being set out to deal with specific areas / activities which concern the company and need a closer review. The Board Committees are set up under

2013-14

the formal approval of the Board, to carry out the clearly defined role which is considered to be performed by the Members of the Board as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all the Committees are placed before the Board for their review.

The Board has established the following Committees:

(I) Audit Committee:

As required under Section 292A of the Companies Act, 1956, read with the provisions of Clause 49 of the Listing Agreement, the Board has constituted an Audit Committee. It comprises of two (2) Non-Executive, Independent Directors and one (1) Executive Director. The Committee is headed by Mr. H. N. Bafna and comprises of Mr. Kantilal Hiran and Mr. Kailash Meethalal.

The Audit Committee of the Company is entrusted with the responsibility to supervise the Company's internal control and financial reporting process and inter-alia performs the following functions:

a) Overseeing the Company's financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible;

b) Recommending the appointment, re-appointment and removal of the statutory Auditors, fixation of Audit fee and approval for payment of any other services;

c) Reviewing with management the Annual Financial Statements before submission to the Board;

d) Reviewing with the management, performance of statutory and internal auditors, adequacy of internal control systems;

e) Reviewing the adequacy of Cost Audit function;

f) Discussing with Auditors any significant findings and follow up on such issues;

g) Discussing with the internal auditors any significant findings and follow up there on;

h) Reviewing the Company's financial and risk management policies; and

i) Examining reasons for substantial default in the payment to Shareholders (in case of non-payment of declared dividends) and creditors, if any.

j) Any other matter duly specified under the applicable provisions of the Companies Act, 1956, read with Clause 49 of the Listing Agreement.

Attendance of Members at the Audit Committee Meetings:

The meetings of the Audit Committee are also attended by the Statutory Auditors as special invitees.

stDuring the financial period ended 31 March, 2014, 4 th(Four) Audit Committee Meetings were held i.e. on 29

th rdAugust 2013, 14 November 2013, 3 December, th2013 and 12 February 2014.

The table hereunder gives the attendance record of the members of the Committee:

Name of the Audit No. of meetings attended

Mr. H. N. Bafna 4

Mr. Kantilal Hiran 4

Mr. Kailash Meethalal 4

(II) Remuneration Committee:

The Company has set up a Remuneration Committee consisting of two (2) Non- Executive, Independent Directors. The Committee is headed by Mr. H. N. Bafna and comprises of Mr. M. Kailash Kumar as its Member. The broad terms of reference of the Remuneration Committee is to ensure that the remuneration practices of the Company in respect of the Senior Executives, including the Executive Directors, are competitive keeping in view prevalent compensation packages so as to recruit and retain suitable individual(s) in such capacity.

Committee Member


18

2013-14

Attendance of Members at the Remuneration Committee Meetings:

During the period ended 31st March 2014, one meeting was held on 3rd December, 2013 to propose the re-appointment of Mr. Kantilal Hiran as Chairman & Managing Director of the Company.

Remuneration policy:

The Non-Executive Directors have informed the Company that they intend to forgo sitting fees as decided due to poor financial conditions. Consequently no sitting fee was paid to Non-Executive Directors for attending Board Meeting. The Chairman and Managing Director has also foregone his remuneration looking at the financial condition of the Company.

Presently, the company does not have any stock option plan or performance linked incentives for its Directors.

Details of Remuneration given to all the Directors for the financial period ended 31st March, 2014:

(Rs. In Lacs)

Name of the Directors Sitting Fees paid for SalaryBoard Committee

Meetings

Mr. Kantilal M. Hiran - - -

Mr. H. N. Bafna - - -

Mr. M. Kailash Kumar - - -

Mr. Ashokchand Lunia* - - -

* resigned from the directorship on 29th March 2014

Shares held by Non-Executive Directors as on 31st March, 2014:

Name of the Non-Executive Director held (Nos.)

Mr. H. N. Bafna Nil

Mr. M. Kailash Kumar 2,67,291

&Meetings Perks

Equity Shares


19

(III) Shareholders/Investors Grievance cum Share Transfer Committee:

The Company has set up a Shareholders/ Investors Grievance cum Share Transfer Committee consisting of Two (2) Non-executives, Independent Directors. The Committee is headed by Mr. H.N. Bafna and Mr. Ashokchand Lunia was a member who resigned from the directorship on 29th March 2014 thereafter the committee was reconstituted and Mr. Kailash Meethalal was inducted as a Member.

The Committee is entrusted with the responsibility to address the Shareholders' and Investor's complaint with respect to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc. and ensures expeditious Share Transfer Process. The Committee also evaluates performance and service standards of the Registrar and Share Transfer Agents of the company and also provides continuous guidance to improve the service levels of investors.

During the financial period ended 31st March, 2014, 3 (three) Shareholders/ Investors Grievance cum Share Transfer Committee Meetings were held i.e. on 29th August 2013, 14th November, 2013 and 12th February 2014.

Attendance of Members at the Shareholders/ Investors Grievance cum Share Transfer Committee Meetings:

The table hereunder gives the attendance record of the members of the Committee:

Name of the Committee Member No. of meetingsattended

Mr. Ashok Lunia* 3

Mr. Hirachand Bafna 3

Mr. M. Kailash Kumar # -

* resigned from the directorship on 29th March 2014.# inducted with effect from 29th March 2014.

2013-14

said Code by all the Board members and Members of the senior Management, to whom the code is applicable, is annexed separately to this report.

F. CERTIFICATE ON CORPORATE GOVERNANCE:

As required by Clause 49 of the Listing Agreement, a certificate issued by M/s. Hemanshu Kapadia & Associates, Practicing Company Secretaries, regarding compliance of conditions for Corporate Governance is given as an annexure to this report.

G. MANAGING DIRECTOR CERTIFICATION:

The Chairman & Managing Director of the Company have certified positively to the Board on the matters specified under Clause 49(V) of the Listing Agreement.

H. GENERAL BODY MEETINGS:

Details of last Three Annual General Meetings are given hereunder:

Year Date Venue Time

2011 29.09.2011 Palm Court, M Block, Link road, Malad (West), P.M.Mumbai-400 064.

2012 28.12.2012 Goregaon Sports Club, 10.00Link Road, Malad (West), A.M.Mumbai- 400064

2013 30.12.2013 Goregaon Sports Club, 10.00Link Road, Malad (West), A.M.Mumbai- 400064

Special Resolutions passed in last 3 years:

2012-13:

1. Re-appointment of Mr. Kantilal Hiran as the Managing Director of the Company.

Postal ballots:

During the year, the Company has proposed 2 special resolutions under Section 180(1)(a) regarding sale, lease or otherwise of whole or substantially the whole of the undertaking and 180(1)(c) regarding borrowing more than the paid up capital and free reserves but not more than Rs.100 Crores. The result of the Postal Ballot shall be declared on 10th September 2014.

601/A1, 3.00

Details of Shareholders' complaints received, not solved and pending during the Financial Year ended 31st March, 2014:

The total number of complaints received and replied to the satisfaction of the shareholders

stduring the year ended 31 March, 2014 was 5. Hence there were no pending/unattended

stcomplaints as on 31 March 2014.

D. DISCLOSURES:

(a) Disclosure on material transactions i.e. transactions of the company of material nature with its Promoters, the Directors or the management, their subsidiaries or relatives etc., that may have potential conflict with the interest of the company at large:

None of the transactions with any of the related parties were in conflict with the interest of the company.

(b) Details of non-compliance by the company, penalties, strictures imposed by Stock Exchanges /SEBI or any statutory authority, on any matter related to capital markets, during the last three years: None

© The company has not established the non-mandatory requirement of Whistle Blower Policy. However, the company's personnel have access to the Chairman of the Audit Committee in cases such as concerns about unethical behavior, frauds and other grievances. No personnel of the Company have been denied access to the Audit Committee.

(d) The company has complied with the mandatory requirements of the Corporate Governance Clause of Listing Agreement.

E. CODE OF CONDUCT:

The Board of Directors has laid down the Code of Conduct for all the Board Members and Members of the senior Management. The code is also placed on the website of the Company viz. www.hiranorgochem.com. A Certificate from the Managing Director, affirming compliance of the


20

2013-14

I. MEANS OF COMMUNICATION:

(i) The quarterly results of the company are published in newspapers in compliance with the provisions of Clause 41 of the Listing Agreement. Generally, the same are published in the Business Standards (English language) and Navshakti (Marathi language). As the results of the Company are published in the newspapers, half-yearly reports are not sent to each household of shareholders. The quarterly results as well proceedings of the Annual General Meeting are submitted to the BSE Limited immediately after the conclusion of the respective meeting.

(ii) No presentations were made to the institutional investors or to analysts during the year under review.

(iii) The Management Discussion and Analysis Report forms part of this Annual Report.

J. GENERAL SHAREHOLDERS INFORMATION:

a. Thirtieth Annual General Meeting

thDate 30 September 2014

Time 9:30 a.m.

Venue Flags Restaurant - B/109 Kemp Plaza, Mind space, Chincholi Bunder Road, Malad West, Mumbai – 400064


21

st stb. Financial Year 1 July 2013 to 31 March 2014ndc. Date of book Monday, 22 September 2014

thclosure to Tuesday, 30 September 2014 (both days inclusive) for taking records of the Members of the Company for the purpose of AGM

d. Stock Code 506170

e. Demat ISIN No. INE546E01016for NSDL & CDSL

K. REGISTRAR AND SHARE TRANSFER AGENTS:

Bigshare Services Pvt. Ltd. E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai – 400 072Tel.: 022 – 4043 0200Fax: 022 – 2847 5207Email: [email protected]: www.bigshareonline.com

L. SHARE TRANSFER SYSTEM:

All the share related work is being undertaken by our Registrar & Share Transfer Agent, Bigshare Services Private Limited. The Shareholders/Investors Grievance cum Share Transfer Committee has been constituted to approve the Share transfer, transmission, split, consolidation, etc. of shares. The Share transfers are registered and returned within 15 days from the date of receipt if the relevant documents are complete in all respects.

st The total number of shares in physical form as on 31 March 2014 were 4,79,505 Equity Shares.

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M. STOCK MARKET PRICE DATA:

Monthly high and low at the Bombay Stock Exchange Limited for financial year ended 31st March 2014:

Month Volume Hiran Orgochem Ltd. BSE Sensex

High (Rs) Low (Rs) High Low

July, 2013 6,63,736 0.93 0.59 20,351.06 19,126.82

August, 2013 1,38,754 0.78 0.45 19,569.20 17,448.71

September, 2013 1,36,791 0.79 0.48 20,739.69 18,166.17

October, 2013 12,64,556 0.80 0.57 21,205.44 19,264.72

November, 2013 1,18,79,543 0.94 0.42 21,321.53 20,137.67

December, 2013 16,27,689 0.55 0.40 21,483.74 20,568.70

January, 2014 24,61,416 0.72 0.42 21,409.66 20,343.78

February, 2014 2,61,302 0.64 0.52 21,140.51 19,963.12

March, 2014 1,31,825 0.60 0.44 22,467.21 20,920.98


22

2013-14

stDISTRIBUTION OF SHAREHOLDING AS ON 31 MARCH, 2014:

No. of Equity Shares held Shareholders Shares

Number % to total Number % to total

Shareholders Capital

1 - 500 3898 38.7977 1222938 1.2396

501 - 1000 1939 19.2993 1779467 1.8037

1001 - 2000 1391 13.8449 2321587 2.3532

2001 - 3000 730 7.2659 1925510 1.9517

3001 - 4000 327 3.2547 1205913 1.2223

4001 - 5000 493 4.9069 2401145 2.4338

5001 - 10000 565 5.6236 4462852 4.5236

10001 - 999999999 704 7.0071 83337448 84.4720

TOTAL 10047 100.00 98656860 100.00

stO. CATEGORIES OF SHAREHOLDING AS ON 31 MARCH, 2014:

CATEGORY Shareholders Shares

Number % to total Number % to total

Shareholders Capital

PROMOTER HOLDING

Indian Promoter 9 0.09 22223550 22.53

Total of promoter holding (a) 9 0.09 22223550 22.53

NON – PROMOTER HOLDING

i) Institutional Investor

Financial Institutions 3 0.03 2672831 2.71

Foreign Institutional Investors 2 0.02 4769265 4.83

ii) Non Institutions

Bodies Corporate 232 2.31 5324475 5.38

Indian Public 9738 96.92 45933934 46.56

NRIs / OCBs 48 0.47 488323 0.49

Clearing Members 13 0.13 841001 0.82

Director/ Relatives 1 0.04 267291 0.27

Total of Non-promoter holding (b) 10037 99.90 60297120 61.12

Shares held by Custodians against which DR issued

i) Public 1 0.01 16136190 16.35

Total of shares held by Custodians (c ) 1 0.01 16136190 16.35

Grand Total (a + b + c) 10047 100.00 98656860 100.00

P. DEMATERIALIZATION OF SHARES AND LIQUIDITY:

The Company has established connectivity with Central Depository Services (India) Limited & National Securities Depositories Limited for dematerialization of shares and the same are available in electronic segment under ISIN No.

stINE546E01016. As on 31 March 2014, 9,81,77,355 Equity Shares representing 99.51% had been dematerialized.

Q. RECONCILIATION OF SHARE CAPITAL AUDIT

REPORT:

As stipulated by the Securities and Exchange Board of India (SEBI), a qualified Practicing Company Secretary carries out the Reconciliation of Share Capital Audit, on a quarterly basis, to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total listed and paid-up capital. The audit, inter alia, confirms that the total listed and paid up capital of the Company is in agreement with the aggregate of the total number of shares in dematerialized form and total number of shares in physical form.

R. FOR SHAREHOLDERS HOLDING SHARES IN DEMATERIALISED MODE:

Shareholders holding shares in dematerialized mode are requested to intimate all changes with respect to bank details, nomination, power of attorney, change of address, change of name, etc. to their depository participant (DP). These changes will be reflected in the company's records on the downloading of information from Depositories, which will help the company to provide better services to its shareholders.

S. OUTSTANDING GDR'S/ADR'S/WARRANTS OR A N Y C O N V E R T I B L E I N S T R U M E N T S , CONVERSION DATE AND LIKELY IMPACT ON EQUITY:

stAs on 31 March 2014, 16136190 GDR's are outstanding for conversion.

T. NON MANDATORY REQUIREMENTS

The Board is taking guidance from the non mandatory requirements as mentioned in Corporate Governance. It is always an endeavor of the Board to implement the suggestions of non mandatory requirement

U. PLANT LOCATION:

a. Plot No. 663, GIDC, Panoli, Ankleshwar, Gujarat- 394 116.

b. Plot No. 322/B GIDC, Panoli, Ankleshwar,

Gujarat- 394 116.

V. ADDRESS FOR CORRESPONDENCE:

Bigshare Services Pvt. Ltd.E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka,Andheri (East), Mumbai- 400 072Tel No.: 022- 4043 0200Fax No.: 022- 2847 5207 Email: [email protected] Website: www.bigshareonline.com


23

2013-14

To,The Board of DirectorsHiran Orgochem Limited

thUnit No. 908, 9 FloorIjmina-Immitation JewelleryMarket CSL, Raheja Metroplex, Link Road,Malad (W) Mumbai – 400 064.

1. We have reviewed the Balance Sheet, Profit and Loss account (Statement of Profit & Loss) and Notes on stAccounts, as well as the Cash Flow Statements as at 31 March, 2014 and certify that to the best of our

knowledge and belief:

i) These Statements do not contain any materially untrue statements or omit any material fact or contain statements that might be misleading.

ii) These Statements read together present a true and fair view of the company's affairs and are in compliance with existing Accounting Standards, applicable laws and regulations.

2. We further certify that, to the best of our knowledge and belief, no transactions have been entered into by the company during the year, which are fraudulent, illegal or volatile of the Company's Code of Conduct.

3. We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectiveness of the internal control systems of the company and we have disclosed to the Auditors and the Audit committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

4. We do further certify that there has been:

i) no significant changes in internal control during the year;

ii) no significant changes in accounting policies during the year; and

iii) no instances of significant fraud, of which we are aware during the period.

Place: Mumbai Kantilal M. HiranstDate: 1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885 Address: 103/104, C-wing, Vastu park, Evershine Nagar, Malad (w),

Mumbai, 400064.

CERTIFICATION BY CHAIRMAN & MANAGING DIRECTOR

24

2013-14

To the members of Hiran Orgochem Limited

We have examined the compliance of conditions of Corporate Governance by HIRAN ORGOCHEM LIMITED (“THE COMPANY”), for the financial year ended March 31, 2014 as stipulated in Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Limited (BSE).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance as stipulated in the said Clause 49. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Hemanshu Kapadia & AssociatesCompany Secretaries

Hemanshu KapadiaProprietor

C.P. No. 2285FCS: 3477

stMumbai, 1 September, 2014.

CERTIFICATE

CODE OF CONDUCT DECLARATION

Pursuant to clause 49I(D) of the Listing Agreement entered into with Stock Exchange ,I hereby declare that all the Board members and senior management personnel of the Company have affirmed compliance with code of

stconduct for the year ended 31 March, 2014.

Place: Mumbai Kantilal M. HiranstDate: 1 September 2014 Chairman & Managing Director

CIN: L51900MH1983PLC029596 DIN: 00186885 Address: 103/104, C-wing, Vastu park, Evershine Nagar, Malad (W),

Mumbai, 400064.

2013-14

25

To the Members of Hiran Orgochem Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Hiran Orgochem Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”) read

thwith the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the

financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

1. Long term Investments of the company aggregating to 4.41 crores is in Actgen Pharma Private limited. Networth of Actgen Pharma Private Limited has completely eroded but the management is of the view that such diminution is of not permanent nature and hence provision for diminution in the value of investment is not provided. Losses more than twice its shareholders funds and provision for diminution in value of this assets has not been provided in the books of accounts.

2. During the year, State bank of India have taken physical possession of all the secured assets on 4th February, 2014 including the land & factory building due to company's inability to repay the loan. And there are various legal cases pending against the company and its directors under SARFASEI Act, 2002 and Negotiable Instruments Act, 1881. So we are unable to comment on whether company can operate as going concern.

3. Company has exceeded the limit specified in Section 372A of Companies Act, 1956 as regards to lending money and also limits specified in Section 293 of Companies Act, 1956 as regards to borrowing money.

AUDITORS’ REPORT

26

2013-14

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

•in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014;

•in the case of the statement of profit and loss, of the profit for the loss ended on that date;

•in case of cash flow statement, of the cash flow for the period ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, except for the effects of the matter described in the Basis for Qualified Report and note no. 35 to the financial statements, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. we are able to determine in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; read with the

thGeneral Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of Companies Act, 2013; except Accounting Standard 11 relating to “Foreign Exchange Transactions” refer note 34 to financial statements.

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For MVK AssociatesChartered AccountantsFirm Reg. No: 120222W

CA. Kapil GuptaPartnerMembership No. : 047911

Place : MumbaiDate : May 30, 2014

AUDITORS’ REPORT

27

2013-14

Referred in Paragraph1 under the heading of “Report on Other Legal and Regulatory Requirements of our report of even date 1) a) The company has not updated fixed assets

register including quantitative details and situation of fixed assets.

b) The Fixed assets has not been physically verified by the Management at reasonable intervals as the physical possession of all the fixed assets are taken by State Bank of India

nd(lender) on 2 February, 2014.

stc) During the period ended 31 March, 2014 lenders to the company has taken physical possession of all the fixed assets of the company. In our opinion the going concern status of the company is affected.

2) a) The stock in trade of has been physically verified by the Management. In our opinion having regard to the nature of stocks, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion, the company has maintained proper records of inventory. No material discrepancies have been noticed on physical verification of stocks as compared to book records.

3) a) As informed to us, the company had granted unsecured loans to two parties covered in the register maintained under section 301 of the Act. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 270.77 lakhs and the year-end balance is NIL.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and

conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company.

c) The loan amount is recoverable on demand.

d) In respect of the said loans, there are no overdue amounts.

e) The Company has taken unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 1,120.91 lakhs and the year-end balance is Rs 1,056.73 Lakhs.

f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by the Company, are not prima facie prejudicial to the interest of the Company.

g) The loan amount is repayable on demand.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business, with regard to purchase of inventory and fixed assets & for the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

5) a) In our opinion and according to the information and explanation provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanation given to us, many of the items are of special nature and these prices cannot be compared with alternative quotations, the transaction

ANNEXURE TO THE AUDITORS' REPORT

28

2013-14

exceeding the value of rupees five lacs in respect of any party made in pursuance of contract or arrangement entered in the register maintained under section 301 of the companies Act 1956 have been made at prices which are prima facie reasonable having regard to the prevalent market prices at the relevant time.

6) In our opinion and according to the information and explanations given to us the company has not accepted any deposits from the public within the meaning of section 58-A and 58-AA of the Act and the rules framed there under. Therefore, the provision of clause (vi) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

7) We have been informed by the management that Company has its own internal audit system commensurate with its size and nature of business.

8) Cost records and accounts prescribed by the Central Government U/s 209(1)(d) of the Companies Act, 1956, if any, maintained by the company has not been produced for our verification.

9) a) The company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed material statutory dues including Income Tax and other statutory

stdues and there are no undisputed statutory dues outstanding as at 31 March 2014, for a period of more than six months from the date they became payable except the following

Name of Liability Amount due for more than 6 months as on 31.03.2014

Service Tax 43,860

Central Sales Tax 31,315

Professional Tax 4,775

Provident fund 16,774

Maharashtra VAT 1,38,98,332

Income Tax 43,44,378

Income Tax 3,11,746

Wealth Tax 7,554

Investor Education and Protection Fund 3,35,666

c) According to the information and explanations given to us by the management following are the disputed statutory due in respect of various statues which have not been deposited. However the documentary evidences for the same have not been provided for our verification.

Name Of The Statute Nature Of Dispute Amount Period To Forum Where Dispute

Which The Is Pending

Amount Relates

Central Excise Act, 1944 Differential Duty Rs. 1,80,802 2006-2007 Assistant Commissioner,

Surat.

Central Excise Act, 1944 Classification of Rs 18,99,400 2008-2009 Assistant Commissioner,

exempted goods Surat.


29

2013-14


30

Name Of The Statute Nature Of Dispute Amount Period To Forum Where Dispute

Which The Is Pending

Amount Relates

Central Excise Act, 1944 Classification of Rs 2,60,318 2008-2009 Assistant Commissioner,

exempted goods Surat.

Central Excise Act, 1944 Classification of Rs 26,63,584 2008-2009 Assistant Registrar Tribunal,

exempted goods Ahmedabad

Central Excise Act, 1944 Capital goods Rs 4,42,479 2011-2012 Deputy Commissioner of

Central excise & custom

Central Excise Act, 1944 Input Service Tax Rs. 30,62,910 2011-2012 Deputy Commissioner of

Central excise & custom

Central Excise Act, 1944 Service Tax Rs. 1,30,159 2006-2007 Assistant Commissioner,

Surat.

Maharastra Value Added Input VAT Credit Rs. 5,95,320 2006-2007 Joint Commissioner,

Tax Act, 2002 Mumbai

Maharastra Value Added Input VAT Credit Rs. 1,37,93,591 2008-2009 Joint Commissioner,

Tax Act, 2002 Mumbai

Maharastra Value Added Input VAT Credit Rs. 3,67,00,884 2008-2009 Deputy Commissioner of

Tax Act, 2002 Sales Tax, Bandra

Maharastra Value Added Input VAT Credit Rs. 2,12,05,142 2005-2006 Deputy Commissioner of

Tax Act, 2002 Sales Tax, Bandra

Central Sales tax Act, Non submission of Rs. 15,06,355 2005-2006 Deputy Commissioner of

1956 C forms Sales Tax, Bandra

Central Sales tax Act, Non submission of Rs. 1,81,20,896 2008-2009 Deputy Commissioner of

1956 H/E1/C forms Sales Tax, Bandra

Central Sales tax Act, Non submission of Rs. 5,85,76,068 2008-2009 Joint Commissioner,

1956 C forms Vadodara

Income Tax Act, 1961 Income Tax Demand Rs. 2,66,990 2007-2008 Income Tax

Appelatte Tribunal

Income Tax Act, 1961 Income Tax Penalty Rs. 2,25,25,986 2010-2011 Commissioner of

Income Tax

10) The company's networth at the end of financial year has completely eroded. The Company has incurred cash loss during the financial year covered by our audit and also in the immediately preceding financial year.

11) According to the information and explanations given to us by the management, the company has defaulted in repayment of its dues to the banks and financial institutions and overdue position to financial institutions and banks are as under.

Name of Bank/Institution Amount Overdue Period of Default

State Bank of India Rs. 56,01,42,082 Loan has been recalled on 23.12.2011

State Bank of Patiala Rs. 15,42,88,358 Loan has been recalled on 28.01.2012

SICOM Ltd. Rs. 2,83,90,199 Loan has been recalled on 23.01.2012

12) According to the information and explanations given to us and based on the documents and records produced before us, the company has not granted any loans or advances on the basis of security by way of pledge of

2013-14


31

shares, debentures or other securities.

13) The Company is not a chit fund or a nidhi mutual benefit/society. Therefore, the provisions of clause 4(xiii) of the companies (Auditor's Report) order 2003 are not applicable to the company.

14) In our opinion the company has maintained proper records and contracts with respect to its investments where timely entries of transactions are made in order. All investments at the close of the year are held in the name of the company.

15) The Company has given corporate guarantee of Rs. 2700 Lacs in the earlier period and is continuing for the loans taken by Actgen Pharma Private Limited from Bank of India. The account of Actgen Pharma Private Limited with the bank has been classified as NPA w.e.f. 30.06.2013. Also, networth of Actgen Pharma Private Limited is completely eroded. However, company is of the view that assets of Actgen Pharma Private Limited are sufficient to meet the liabilities of the bank and management does not foresee any development of their liability on the company.

16) As the company has not taken any term loan during the period, para 4 (xvi) of the order is not applicable.

17) The company has not raised any fund, long term or short term during the year.

18) The company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

19) According to the information and explanations given to us the company has not issued debentures during the year.

20) The company has not raised any money through a public issue during the year.

21) Based upon the audit procedures performed and information and explanations given to us, we are unable to report if any fraud on or by the Company has been noticed during the course of our audit as adequate documentary evidence were not made available.

For MVK AssociatesChartered AccountantsFirm Reg. No.: 120222W

CA. KAPIL GUPTAPartnerMembership No. 047911

Place: MumbaiDate: May 30, 2014

2013-14

Rs.As At

31.03.2014

STAS AT 31 MARCH, 2014

Particulars Note No.

BALANCE SHEET

Rs.As At

30.06.2013

32

As Per Our Report of Even Date

For MVK AssociatesChartered Accountants

For And on Behalf of The Board of Directors

CA. Kapil Gupta H. N. BafnaPartnerM.No. 047911

Director

F.R.No. 120222W

Mumbai, Dated : 30.05.2014 Mumbai, Dated : 30.05.2014

Chairman and Managing DirectorKantilal M. Hiran

Sd/- Sd/- Sd/-

I. EQUITY & LIABILITIES

(1) Shareholder's Funds (a) Share Captial 2 986,568,600 986,568,600 (b) Reserves & Surplus 3 (1,332,586,536) (1,260,428,568)

(2) Share Application Money Pending Allotment - - (3) Non-Current Liabilities

(a) Long-Term Borrowings 4 6,791,481 4,966,103

(4) Current Liabilities (a) Short-Term Borrowings 5 850,255,946 882,100,558 (b) Trade Payables 6 208,888,199 218,829,554 (c) Other Current Liabilities 7 16,700,064 31,270,707 (d) Short-Term Provisions 8 4,940,890 5,254,205

T O T A L 741,558,644 868,561,159II. ASSETS

(1) Non - Current Assets (a) Fixed Assets (i) Tangible Assets 9 315,681,934 330,781,872 (ii) Capital Work in Progress - 430,500 (b) Non-Current Investments 10 45,929,310 (c) Other Non-Current Assets 11 - -

(2) Current Assets (a) Inventories 12 10,721,578 (b) Trade Receivables 13 83,220,270 77,880,335 (c) Cash & Cash Eqivalents 14 1,357,839 983,529 (d) Short term Loans and Advances 15 202,138,125 293,045,753 (e) Other Current Assets 16 82,509,588 108,788,282

741,558,644 868,561,159

Statement on significant accounting policies and notes to the financial statements are an integral part of this Balance Sheet.

45,929,310

10,721,578

Statement on significant accounting policies 1

Notes On Accounts 28-36

2013-14

Rs.For The 9 month

Period Ended 31.03.2014

Note No

STFOR THE PERIOD ENDED 31 MARCH, 2014

STATEMENT OF PROFIT AND LOSS

Rs.

Year Ended 30.06.2013

For The

33

INCOME

Revenue From Operations 17 26,450,000 239,671,130Other Income 18 9,208,587 15,121,074Total Revenue 35,658,587 254,792,204

EXPENSES

Cost of Materials Consumed 19 - 65,266,562Purchase of Stock in Trade 25,402,302 147,674,236Change in Inventories of FG, WIP and Stock in Trade - 15,153,282Employee Benefits Expenses 24 1,197,168 7,550,636Finance Costs 25 1,826,857 815,310Depreciation and Amortisation Expenses 26 15,099,939 27,721,417Other Expenses 27 64,290,289 590,714,493Total Expenses 107,816,555 854,895,936

Profit Before Tax (72,157,968) (600,103,732)

Tax Expense Current Tax - - Deferred Tax - - Profit/(Loss) For The Period (72,157,968) (600,103,732)

Earnings Per Equity Share 30 Basic (Face Value of Rs. 10 each) (0.73) (6.08) Diluted (Face Value of Rs. 10 each) (0.73) (6.08)

Statement on significant accounting policies and notes to the financial statements are an integral part of this Statement of Profit and Loss.

Statement on significant accounting policies 1Notes On Accounts 28-36

2013-14





Director

F.R.No. 120222W



Sd/- Sd/- Sd/-




F.R.No. 120222W


C.A. Kapil Gupta H. N. Bafna

M.No. 047911DirectorChairman and Managing Director

Kantilal M. HiranSd/- Sd/- Sd/-

STFOR THE YEAR ENDED 31 MARCH, 2014

CASH FLOW STATEMENT

Notes: (i) The above Cash flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard-3 on Cash

Flow Statement issued by The Institute of Chartered Accountants of India.(ii) Previous year's figures have been regrouped and rearranged wherever deemed necessary.

34

A. Cash Flow From Operating ActivitiesNet Profit Before Tax (72,157,968) (600,103,732) Adjustment For: Depreciation And Amortisation Expenses 15,099,939 27,721,417 Interest Income (9,139,087) (13,556,591)

Unrealised Foreign Exchange Loss/(Gain) - 4,105,733 (Profit)/Loss On Sale Of Fixed Assets(Net) (69,500) 86,931 (Profit)/Loss On Sale Of Investment (Net) - 282,474 Interest & Other Finance Charges 1,826,857 815,310Operating Profit Before Working Capital Changes (64,439,759) (580,648,458) Adjustment for : Receivables (5,339,935) 120,651,471 Inventories - 26,859,936 Short Term Loans & Advances 90,907,628 165,443,328 Other Current Assets 26,278,694 24,018,126 Trade Payables (9,941,355) (34,359,994) Other Current Liabilites (46,415,255) (7,031,749) Short Term Provisions (313,315) (13,630,425)Cash Generated From Operations (9,263,297) (298,697,765) Taxes Paid Net of Refund - 12,341,744Net Cash From Operating Activities (A) (9,263,297) (286,356,021)

B. Cash Flow From Investing Activities Purchase of Fixed Assets - (97,819) (Including Capital Work In Progress) Sale/Adjustment of Fixed Assets 500,000 178,000 Sale/(Purchase) of Investment(Net) - 717,526 Interest Received 9,139,087 13,556,591Net Cash From Investing Activities (B) 9,639,087 14,354,298

C. Cash Flow From Financing Activities Proceeds From Issue of Share Capital - (2,675,041)

Long Term borrowings 1,825,378 - Interest & Other Finance Charges (1,826,857) (815,310)Net Cash From Financing Activities (C) (1,479) (3,490,351)Net Increase/(Decrease) in Cash and Cash Equivalents 374,311 (275,492,074)Cash and Cash equivalents (Opening Balance) 983,529 279,702,504Add : Unrealised Foreign Exchange Gain/(Loss) - (3,226,901)Cash and Cash equivalents (Closing Balance) 1,357,840 983,529

(A + B + C)

2013-14

Rs.For The 9 month Period

Ended 31.03.2014

Rs.

Ended 30.06.2013For The Year

Partner

COMPANY INFORMATION

Hiran Orgochem Limited (the ‘Company’) is a public limited company and is listed on the Bombay Stock Exchange (BSE) & Luxembourg Stock Exchange (LSE). The company is a leading integrated manufacturer of active pharmaceutical ingredients. The Company is manufacturing the Quinolones group of API's with its principal products comprising Ciprofloxacin, Ofloxacin, Levofloxacin and Enrofloxacin.

1 SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting Convention

During the current year the company has changed its year ending to 31st March from 30th June. In this report year ended refers to the period of 9 months from 1st July, 2013 to 31st March, 2014. Therefore previous year's figures not comparable.

The financial statements are prepared on under historical cost convention on an accrual basis and in accordance with the requirements of the Companies Act, 1956 and comply with the Accounting Standard issued by the Institute of Chartered Accountants of India to the extent applicable. For recognition of Income and Expenses, mercantile system of accounting is followed. To meet with various operational financial obligations many measures are taken and accordingly these statements are continued to be prepared on the assumption of going concern, which contemplates realisation of assets and settlement of liabilities in the normal course of the business.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non current classification of assets and liabilities.

b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made, that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting year. Differences between actual results and estimates are recognized in the year in which the results are known /materialize.

(c) Fixed Assets And Depreciation

All fixed assets are stated at cost, less cenvat availed, but including relevant direct expenses. Depreciation for the year has been provided on the straight-line method U/s 205 (2)(b) of the Companies Act, 1956 at rates specified in Schedule XIV of the said Act. Depreciation on the additions/deletions to assets during the year is provided on pro-rata basis. No write off has been made in respect of GIDC leasehold land at Panoli.

(d) Revenue Recognition

(i) Sales are stated net of trade discounts, sales return and sales tax.

(ii) The value of Cenvat benefits eligible is being reduced from the value of purchases of materials. Consumption of materials is arrived at accordingly.

(iii) Custom Duty benefits in the form of advance license entitlements are recognised on export of goods.

(iv) Income from investments is accounted on receipt basis.

(v) Project revenues are accounted as per AS- 7.

(e) Inventories

(i) Raw Materials, Stores and spares and

NOTES ANNEXED TO AND FORMING PART OF THESTACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2014

35

2013-14

packaging materials are valued at cost on FIFO/Weighted Average basis.

(ii) Material in Process/ Work in Progress is valued at estimated cost. Work in Progress includes cost of land, development rights, construction costs and allocated interest and expenses incidental to the projects undertaken by the company.

(iii) Finished goods are valued at lower of estimated cost or net realisable value. Costs of finished goods include excise duty wherever applicable.

(f) Investments

Long-term investments are stated at cost less provisions, if any, for permanent diminution in value of such investments.

(g) Employee Benefits

(i) Defined Contribution Plan

Company’s contributions paid/payable during the year to Provident Fund are recognised in the Profit & Loss Account.

(ii) Defined benefit plan

The company’s liabilities towards gratuity and leave encashment, a defined benefit obligation, is accrued and provided for on the actual basis during the year as at the balance sheet date.

(h) Foreign Currency Transactions

(i) Foreign currency transactions are recorded at the exchange rate prevailing at the time of transactions & exchange difference, if any, on settlement of transaction is recognised in the Profit & Loss Account.

(ii) Amount of Foreign currency transactions remaining pending at year end are recorded at the exchange rate prevailing at that time.

(iii) Foreign currency transactions relating loans

taken are recorded at the exchange rate prevailing at the time of transactions & exchange difference, if any, on settlement of transaction is recognised in the Finance Costs.

(iv) The difference in translation of long-term monetary assets and liabilities and realised gains and losses on foreign currency transactions relating to acquisition of depreciable capital assets are added to or deducted from the cost of the asset and depreciated over the balance life of the asset.

(v) Foreign currency assets and liabilities at the end of the year, is converted in Indian currency at the exchange rate prevailing at that time.

(i) Borrowing Costs

(i) Borrowing cost attributable to acquisition and/or construction of qualifying assets is capitalised as cost of such assets up to the date when such asset is ready for its intended use.

(ii) Borrowing cost on working capital is charged to Profit & Loss Account.

(j) Taxes On Income

(i) Tax expense comprises of Current and Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

(ii) Deferred tax is recognised, subject to consideration of prudence on timing difference, being the difference between the taxable and accounting income/expenditure that originate in one year and are capable of reversal in one or more subsequent year(s). Deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available, against which such deferred tax asset will realise.

36

NOTES ANNEXED TO AND FORMING PART OF THESTACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2014 2013-14

(iii) Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Profit and Loss account and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(k) Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past

events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statement.

(l) Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of asset or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable is reassessed and the asset is reflected at the recoverable amount.

37

NOTES ANNEXED TO AND FORMING PART OF THESTACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2014 2013-14

2 SHARE CAPITAL

(i) AUTHORISED

10,50,00,000 Equity Shares of Rs. 10/-each

(Previous Year 10,50,00,000 Equity Shares of Rs 10/- each)

(ii) ISSUED, SUBSCRIBED & PAID UP

9,86,56,860 Equity Shares of Rs. 10/-each fully paid up

(Previous Year 9,86,56,860 Equity Shares of Rs 10/- each fully paid up)

(iii)

Shares issued & subscribed at the beginning of the Year

Add: Issued during the year

Shares issued & subscribed at the end of the Year

(Of the above 1,61,36,190 shares of Rs 10/- each are represnting 5,37,873 Global Depository Receipt)

Reconciliation of number of shares outstanding at the beginning and end of the year.

31.03.2014

1,050,000,000 1,050,000,000

986,568,600 986,568,600

98,656,860

-

98,656,860

98,656,860

-

98,656,860

30.06.2013

(iv) Details of equity shares held by shareholders holding more than 5% shares of the aggregate shares in the Company

(v)

Aggregate number of shares alloted as fully paid bonus shares during F.Y. 2009-10

Aggregate numbers of shares alloted as fully paid bonus share during the period of five years immediately preceding the date of reporting

42,002,400 42,002,400

(vi) Rights, preferences and restrictions in respect of equity shares and GDRs issued by the Company

(a) The Equity shareholders are entitled to receive dividends as and when declared; a right to vote in proportion to holding etc. and their rights, preferences and restrictions are governed by / in terms of their issue under the provisions of the Companies Act, 1956.

(b) The rights, preferences and restrictions of the GDR holders are governed by the terms of their issue, and the provisions of the Companies Act 1956. Each GDR holder is entitled to receive 30 equity shares of Rs. 10 each, per GDR, and their voting rights can be exercised through the Depository.

38

2013-14

No of Shares % of holding No of Shares % of holding

The Bank of New York Mellon 16.35% 28.02%

Vijay K. Hiran 7.04% 7.05%

Naresh K. Hiran 5.71% 5.71%

16,136,190

6,952,500

5,636,000

27,643,860

6,952,500

5,636,000

(iv) Surplus/(Deficit) in Statement of Profit and Loss

Balance as per last Balance Sheet (1,438,255,768)

Add : Transferred from General Reserve -

Add : Profit/(Loss) for the period (72,157,968)

(1,510,413,736)

Total (1,332,586,536)

3

RESERVES & SURPLUS 30.06.2013

(i) Capital Reserve

Balance as per last Balance Sheet 27,409,200 27,409,200

(ii) Capital Subsidy


(iii) Securities Premium Reserve


31.03.2014

(838,152,036)

-

(600,103,732)

(1,438,255,768)

(1,260,428,568)

4

LONG-TERM BORROWINGS

Secured

(i) Loan Against Purchase of Cars* 652,497

(Secured by hypothecation of vehicles)

(ii) Loan Against Keyman Insurance Policy

(Lien on Keyman Insurance Policy) 6,138,984 Total 6,791,481

* Repayable in monthly instalments of Rs. 78,450

SHORT-TERM BORROWINGS 31.03.2014

Secured Loan

Working Capital Term Loan from State Bank of India * 120,926,540

Working Capital Loan from State Bank of India * 438,978,191

5

(i)

(ii)

(Secured by Mortgage and/or hypothecation of all present & future fixed assets of the company located at Plot No 663 and Plot No 322 B GIDC Panoli, hypothecation of inventories, book debts and all other Current Assets by way of First charge, personal guarantee of the two directors of the company, pledge of equity shares of the company held by promotes, pledge of equity shares of Actgen Pharma Pvt Ltd., equitable mortgage of office premise & corporate guarantee of Sunflower Trading & Investment Private Limited, equitable mortgage of residential flat and guarantee of D.K. Hiran and lien on Bank Fixed Deposits.)

39

2013-14

30.06.201331.03.2014

566,103

4,400,000 4,966,103

30.06.2013

120,926,540

438,800,461

(iii) Working Capital Term Loan from State Bank of Patiala * 21,342,820

21,342,820

(iv) Working Capital Loan from State Bank of Patiala * 132,945,538 132,945,538

(v) Loan From Sicom Limited ** 28,390,199

163,590,199

742,583,288 877,605,558

(Secured by Mortgage and/or hypothecation of all present & future fixed assets of the company located at Plot No 663 and Plot No 322 B GIDC Panoli by way of first pari passu charge with State Bank of India, hypothecation of inventories, book debts and all other Current Assets by way of first pari passu charge with State bank of India, personal guarantee of the two directors of the company, pledge of equity shares of the company held by promotes, equitable mortgage of office premise & corporate guarantee of Sunflower Trading & Investment Private Limited, equitable mortgage of residential flat and guarantee of D.K. Hiran and lien on bank Fixed Deposits.)

'(Secured by mortgage of office premises owned by promoters, pledge of equity shares of the company held by promotes, and personal guarantee of four promoters of the company.)

Unsecured Loan

From Directors 105,672,658

From Others 2,000,000

107,672,658

*Secured loans taken from State Bank of India and State Bank of Patiala have been turned into NPA. Thereafter, State Bank of India and State Bank of Patiala have issued notices under SARFASEI Act, 2002 and recalled their dues. Further, State Bank of India has taken physical possesion of all the fixed assets on 04/02/2014. The above figures does not include interest accrued after 01.04.2011.

The Bank has transfered the loan to Edelweiss Asset Reconstruction Company Limited (EARCL) on 19.03.2014. However statement from EARCL was not available to confirm amount outstanding and hence loans are outstanding in the books in the name of the banks.

**Secured loans taken from SICOM Ltd. have been turned into NPA. Thereafter, SICOM has issued notices under SARFASEI Act, 2002 and recalled their dues. Further SICOM has taken possession and sold the secured assets, i.e. office premises owned by promoters during the year. The above figures does not include interest accrued after 16.01.2012.

(vi)

(vii)

40

850,255,946Total

2013-14

1,495,000

3,000,000

4,495,000

882,100,558

6 TRADE PAYABLES 31.03.2014

Sundry Payables for Goods* 223,477,257

218,829,554

* The company is in the process of compiling the information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006. The management does not envisage any material impact on the financials in this regard, which has been relied upon by the auditors.

30.06.2013

Less : Advance from Customers Related Party (14,588,000) -

Others (1,058) -

Total 208,888,199 218,829,554

7 OTHER CURRENT LIABILITIES 31.03.2014

(i) Unclaimed Dividends*

(ii) Current Maturaties of Long Term Debt(iii) Sundry Deposits(iv) Other Payables

(v) Sundry Receivables with Credit Balances(vi) Duties & Taxes Payable

Total

422,543

-

45,000

1,238,223

843,795

14,150,503

16,700,064

* Rs. 2,67,130 for F. Y. 2004-05 , Rs. 57,950 for F. Y. 2005-06 and Rs. 10,585 for F.Y. 2006-07 due for transfer for Investor Education and Protection Fund

30.06.2013

416,564

464,187

45,000

16,989,019

843,795

12,512,142

31,270,707

41

9

TANGIBLE ASSETS

G R O S S B L O C K D E P R E C I A T I O N

As At 01.07.2013

For The Year

Office Equipments

Electrical Installation

Plant & Machinery

Factory Building

Up To

30.06.2013

Deduction For The

Year

DESCRIPTION

Fixed Assets

Addition/ (Deduction) During The

Year

Total As At

31.03.2014

Leasehold Land

Computers

Vehicles

Air Conditioners

Up To

31.03.2014 31.03.2014

N E T B L O C K

Furniture & Fixtures

As At

Lab Equipments

TOTAL

PREVIOUS YEAR

As At

30.06.2013

0

0

0

0

0

0

0

0 0

0

0

(1,230,839)

5,550,111

442,206,386

44,370,825

7,088,804

11,193,804

2,375,775

4,198,730

1,189,738

4,308,187

9,511,252

531,993,612

533,224,451

0 0

12,315,145

868,889

197,419

795,373

66,164

399,045

33,133

159,889

264,882

15,099,939

24,861,451

0

0

0

0

0

0

0

0

0

0

0

(1,063,727)

0

178,118,957

15,889,433

2,931,206

7,541,564

994,756

4,597,775

448,160

2,218,921

3,570,907

216,311,678

201,211,739

5,550,111

264,087,429

28,481,392

4,157,598

3,652,240

1,381,019

(399,045)

741,578

2,089,266

5,940,345

315,681,934

330,781,873

2013-14

8

SHORT-TERM PROVISIONS 31.03.2014

(i) Income Tax

(ii) Wealth Tax(iii) Leave Encashment

(iv) Gratuity

Total

4,644,378

7,554 48,332

240,626

4,940,890

30.06.2013

4,644,378

7,554 131,519

470,754

5,254,205

5,550,111

442,206,386

44,370,825

7,088,804

11,193,804

2,375,775

4,198,730

1,189,738

4,308,187

9,511,252

531,993,612

531,993,612

165,803,812

15,020,544

2,733,787

6,746,191

928,592

4,198,730

415,027

2,059,032

3,306,025

201,211,739

177,414,016

5,550,111

276,402,574

29,350,281

4,355,017

4,447,613

1,447,183

-

774,711

2,249,155

6,205,227

330,781,873

10

NON-CURRENT INVESTMENTS 31.03.2014

Face Long Term Investments No Value

In Equity Shares - Unquoted , fully paid up

(i) Panoli Enviro Technology Ltd 38,500 10 385,000 385,000

(38,500)

(ii) Bharuch Eco Aqua Infrastructure Ltd 144,431 10 1,444,310 1,444,310

(144,431)

(iii) Actgen Pharma Pvt.Ltd.* 4,410,000 10 44,100,000 44,100,000(Pledge with State Bank of India) (4,410,000)

Total 45,929,310 46,929,310

*Networth of Actgen Pharma Private Limited was completely eroded but Investments are stated at cost and according to management there is no permanent diminution in the value of the investment. All investments are held in company's own name.

30.06.2013

# During the year on 4th February 2014, physical possesion of all the fixed assets has been aquired by State Bank of India due to Company's inability to repay the loan. Hence no depreciation has been charged after 4th February 2014.

11

OTHER NON-CURRENT ASSETS

Share Issue Expenses

Add: Share Issue expenses incurred during the year

Less : Written off

31.03.2014

-

-

-

-

Total -

12

INVENTORIES 31.03.2014

(Taken, valued and certified by the Management)

(i) Work in Progress / Material in Process (At estimated Cost)

Construction Division 10,721,578

Total 10,721,578

42

2013-14

30.06.2013

2,859,966

-

2,859,966

2,859,966

-

30.06.2013

10,721,578

10,721,578

Total

31.03.2014 30.06.201313

Less : Provision for Doutful Receivables

TRADE RECEIVABLES

Receivables over six months

(i) Considered Good

(ii) Considered Doubtful*

Others Receivables - Considered Good

(i) Considered Good

*Trade receivables include Rs. 1943.84 Lacs due from local receivables Rs. 1818.18 Lacs and from export receivables Rs. 125.66 Lacs, which are considered doubtful of recovery and provision for the same has been made.

194,384,974

(194,384,974)

83,220,270

83,220,270

Related party 80,835,737

Others 2,384,533

Related party -

Others -

194,384,974

(194,384,974)

9,351,657

77,880,335

0

9,351,657

65,063,467

3,465,211

43

* Rs. 2,67,130 for F. Y. 2004-05 , Rs. 57,950 for F. Y. 2005-06 and Rs. 10,585 for F.Y. 2006-07 due for transfer for Investor Education and Protection Fund

31.03.2014

245,218

690,078

422,543

-

-

-

1,357,839

Total

14

CASH & CASH EQIVALENTS

(i)

(ii) Balance with Banks :

With scheduled banks

In Current Accounts

In Dividend Current Account*

In Fixed Depost Accounts

With unscheduled Euram Bank

In Retail Account

Less : Provison for Balance seized by EURAM Bank

In Money Market Account -

2013-14

30.06.2013

80,351

476,647

416,564

9,967

275,074,047

(275,074,047)

983,529

-

Cash on hand

Total

31.03.201415

3,022,124

193,119,468

5,996,533

202,138,125

31.03.2014

Total

31.03.2014

Total

16

17

SHORT TERM LOANS AND ADVANCES

(Unsecured,Considered Good)

(i) Interest Receivable

(ii) Short Term Loans & Advances(iii) Advances against Orders

OTHER CURRENT ASSETS

Modvat Credit Availed, Excise Duty Service Tax and VAT

Export Benefit Receivable

Advance Income Tax

MAT Credit Entitlement

Prepaid Expenses

REVENUE FROM OPERATIONS

Export Incentives

Less : Excise Duty

(i)

(ii)

(iii)

(iv)

(v) Deposits(vi)

(i) Pharmaceuticals

(ii)

43,545,108

8,100,392

5,614,388

17,857,568 7,328,943

63,189

82,509,588

29,719,220

-

29,719,220

3,269,220

26,450,000

30.06.2013

3,034,617

196,517,163

93,493,973

293,045,753

30.06.2013

30.06.2013

47,880,585

8,100,392

4,699,233

17,857,568 30,250,504

-

108,788,282

266,789,660

1,099,950

267,889,610

28,218,480

239,671,130

44

31.03.201418

OTHER INCOME

(i) Interest Income

(ii) Long Term Capital Gain - Sale of plot

(iii) Sundry Balances W/o

Total

9,139,087

69,500

-

9,208,587

2013-14

30.06.2013

13,556,591

-

1,564,483

15,121,074

20 VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED FOR OWN PRODUCTION (Rs. In Lacs)

(i) Raw Material % Amount % Amount

Imported Items - - 1.64

Indigenous 100.00 254.02 98.36

100.00 254.02 100.00

(ii) Stores and Spares Imported Items - -

Indigenous - 100.00

- 100.00

31.03.2014 30.06.2013

19

31.03.2014COST OF MATERIALS CONSUMED(i) Pharmaceuticals

Opening Stock

Add : PurchasesLess : Closing Stock

(ii) Construction

Opening StockAdd : Purchases

Less : Closing Stock

Total

-

25,402,302

25,402,302

10,721,578 -

10,721,578

-

25,402,302

-

30.06.2013

9,400,148

55,866,414

65,266,562

10,721,578 -

10,721,578

-

65,266,562

-

10.70

641.97

652.67

19.96

19.96

--

-

-

21

EARNINGS IN FOREIGN EXCHANGE (Rs. In Lacs) 31.03.2014

(i) Export on FOB Basis -

22

EXPENDITURE IN FOREIGN EXCHANGE (Rs. In Lacs) 31.03.2014

(i) Commission on Sales -

Total -

30.06.2013

65.57

30.06.2013

2.39

2.39

45

(iii) Staff Welfare Expenses

Total

EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under:

(i) Defined Contribution Plans

During the year, the company has recognised the following amounts in the Profit and Loss Account:(Rs. In Lacs)

31.03.2014 30.06.2013

-

(ii) Defined Benefit Plans

Particulars

Employer’s Contribution to Provident Fund & Other Funds (Included in Employees Benefits Expenses)

EMPLOYEE BENEFITS EXPENSES 31.03.201424

(i) Salary, Wages and Bonus

Contribution to provident, gratuity and other funds(ii)

Contribution to Gratuity Fund and Leave Encashment is provided in the books of accounts on actual basis during the year. The charge on account of provision for gratuity and leave encashment has been included in Employees Remuneration and Benefits.

23 CHANGE IN INVENTORIES OF FG, WIP AND STOCK IN TRADE 31.03.2014

Closing Stocks

(i) Finished Goods : Pharmaceutical Division -

(ii) Material in Process: Pharmaceutical Division -

-

Less : Opening Stocks

(i) Finished Goods : Pharmaceutical Division -

(ii) Material in Process: Pharmaceutical Division -

-

Total -

1,053,930

-

143,238

1,197,168

2013-14

30.06.2013

-

-

-

7,516,490

7,636,792

15,153,282

( )15,153,282

30.06.2013

7,286,687

111,402

152,547

7,550,636

1.11

25 FINANCE COSTS 31.03.2014

(i) Interest Expense* 1,826,857

(ii) Bank Charges -

Total 1,826,857

*Company has not provided interest on loans taken from State Bank of India, State Bank of Patiala and SICOM Ltd. after accounts with them turning into NPA.

30.06.2013

667,612

147,698

815,310

46

DEPRECIATION AND AMORTISATION EXPENSES 31.03.2014

Depreciation on Tangible Assets 15,099,939

Amortisation on Share Issue Expenses -

Total 15,099,939

26

(i)

(ii)

2013-14

30.06.2013

24,861,451

2,859,966

27,721,417

27

OTHER EXPENSES 31.03.2014 30.06.2013

Power, Fuel & Water 201,422 3,474,010Sales Promotion Expenses - 30,791Transportation, Freight & Forwarding Charges 12,175 337,403Brokerage,Commission & Cash Discount (1,304) 836,670R & D Expenses & Testing Charges - 58,740Packing Materials - 711,993Repairs & Maintenance - 2,255,422Foreign Exchange Fluctuation Loss 103,082 4,328,293 Excise Duty - (826,841)Vehicle Maintenance & Fuel Charges 88,477 133,281Legal & Professional Charges 1,083,893 2,163,524Auditor's Remunaration * 422,500 230,000Printing and Stationery 220,407 299,591Bad Debts - 13,100,000Provision for Bad Debts 171,459,566Provision for balance seized by EURAM Bank - 275,074,047Construction Advances W/o - 111,630,000 Sundry Balance W/off (net) (Refer Note 35) 59,781,129 - Postage & Telephone 259,504 644,703Conveyance & Travelling Exp. 195,548 751,867Insurance 374,360 1,064,731Loss on Sale of Assets - 86,931Loss on Sale of Investment - 282,474ETP Expenses - 78,056Miscellaneous & Office Expenses 566,724 1,266,375Prior Period Expenses 476,324 579,653Advertisement 44,410 94,018Service Tax Paid 172,124 67,370Rent 263,000 360,000Rates & Taxes 12,514 4,025Fines & Penalties 14,000 116,800Donation - 21,000

Total 64,290,289 590,714,493

* Auditor's remuneration as follows:

(i) Statutory Audit Fees 400,000 200,000 (ii) Statutory Auditor's Certification Fees 22,500 30,000

Total 422,500 230,000

RELATED PARTY DISCLOSURES

Related Party Disclosures and the nature of relationships is as follows:

Name of the Party Relationship

(a) Shri K.M. Hiran Managing Director

(b) Shri. V.K.Hiran Relative

(c) Shri. N.K.Hiran Relative

(d) Shri. M. Kailash Kumar Director

(a) Smt. Dariyadevi Hiran Relative

(a) Actgen Pharma Pvt.Ltd. Associate

Transactions with related parties are as follows:

29

(i)

1

2

3

(Rs. In Lacs)(ii)

Nature of Transaction

(Excluding Reimbursement)

Referred in 3 Above

Referred in 2 Above

Referred in 1 Above

47

CONTINGENT LIABILITIES

31.03.2014Claims against the company not acknowledged as debts

Total

(Rs. In Lacs)28

(i) Sales Tax(ii) Excise Duty

(iii) Income Tax

1,504.98

86.40

227.93

1819.31

The Company has given corporate guarantee of Rs. 2700 Lacs in the earlier period and is continuing for the loans taken by Actgen Pharma Private Limited from Bank of India. The account of Actgen Pharma Private Limited with the bank has been classified as NPA w.e.f. 30.06.2013. Also, networth of Actgen Pharma Private Limited is completely eroded. However, Management is of the view that assets of Actgen pharma Private Limited are sufficient to meet the liabilities of the bank and management does not foresee any development of their liability on the company.

2013-14

30.06.2013

1,137.97

86.40

2.67

1227.04

(a) Sales

(b) Purchase

(c) Deposits Balance As on 01.07.2013 Paid During The Period Received back During The Period Balance As on 31.03.2014

(d) Unsecured Loan taken Balance As on 01.07.2013 Taken During The Period Repaid During The Period Balance As on 31.03.2014

Advance received for orders

(-)

(-)-

-

- - 145.88

312.05 - -

-

- (969.21)

-1,112.46

55.73

(-)

(-)

- 213.34 -

4.95 -

-

77.20 -- 290.54 -

- --

-1,056.73 -

22.58 -

(1319.84)

17.63

(iii) Year End Outstandings

30 BASIC & DILUTED EARNING PER SHARE

(i) Profit / (Loss) After Taxation As Per Profit and Loss Account (72,157,968)

(ii) No of Equity Shares

For Basic Earning Per Share 98,656,860

For Diluted Earning Per Share 98,656,860

(iii) Face Value of Equity Share Rs.10/- each (iv) Basic Earning Per Share (0.73)

(v) Diluted Earning Per Share (0.73)

48

2013-14

(a) Sundry Debtors

(b) Deposits

(c) Investments

(d) Advance received for orders

(e) Unsecured Loan taken

(Previous year figures are give in bracket)

1,056.73 -- (10.80) (-) (-)

(-) (652.94)

-

- - 808.36

- -

- (-) (-)

(-) (-) (441.00)

- - 145.88

(-) (213.34) (-)

- 441.00-

(-)

(600,103,732)

98,656,860

98,656,860

Rs.10/- each (6.08)

(6.08)

31

SEGMENT REPORTING

The company has identified two business segments viz .Pharmaceuticals and Construction. Pharmaceuticals segment comprise of manufacture and trading of Pharmaceutical Intermediates and chemicals.

REVENUE

(Rs. In Lacs)

Gross Sales 297.19 2,678.90 0.00 0.00 297.19 2,678.90

Total Revenue 297.19 2,678.90 - - 297.19 2,678.90

Segment Results (721.58) (5,024.10) - (1,116.30) (795.40) (6,140.40)

Interest, Dividend and other Income

92.09 151.21

Interest Expense (18.27) (8.15)

Profit/(Loss) on Sale/Discard of Assets

- (0.87)

Profit/(Loss) Before Tax (721.58) (6,001.04)

Provision for Current Tax - 0.00

Provision for Deferred Tax - 0.00Net Profit/(Loss) After Tax (721.58) (6,001.04)

31.03.2014 30.06.2013 31.03.2014 30.06.2013 31.03.2014

Pharamceuticals Construction Total

30.06.2013

49

2013-14

OTHER INFORMATION

Segment Assets 3,899.91 5,084.93 838.21 888.22 4,738.12 9,241.09

Unallocated Corporate Assets 2,677.46 6,013.74

Total Assets 7,415.59 15,254.83

Segment Liabilities 2,305.29 2,553.54 0.00 0.00 2,305.29 3,094.98

Unallocated Corporate Liabilities

8,570.47

8,897.42

Total Liabilities 10,875.77 11,992.40

Capital expenditure incurred during the year

0.00 0.98 0.00 0.00 - 4.34

Unallocated Cost 0.00 -


Unallocated Depreciation - 16.14

Other Non Cash Expenditure - 16.34

GEOGRAPHICAL SEGMENT

Revenue (Gross Sales)

Domestic Sales 297.19 2,602.33

Export Sales - 76.57

297.19 2,678.90

31.03.2014 30.06.2013 31.03.2014 30.06.2013 31.03.2014

Pharamceuticals Construction Total

30.06.2013

32 In view of substantial business loss and no virtual certainty to adjust losses against future profit, Deferred Tax Asset has not been considered for the year.

33 Loan against Keyman Insurance Policy, Sercured Loans, Sundry Payables, Sundry Receivables Borrowings and Loans & advances are subject to confirmation.

34 Company has not revalued its foreign exchange assets and liabilities (i.e mark to market) as per Accounting Standard 11 relating to account of Foreign Exchange Transactions. Effect of the same is not ascertainable.

35 Balances aggregating to Rs. 597.81 lakhs (Net) were written off by the management during the year. However, documentations and supportings for the same were not available for our verification.

36 Previous year figures have been regrouped/reclassified wherever necessary to correspond with the current year classifications/disclosures. However, previous years figures are not comparable as current year's figures are for 9 months, i.e. from July 13 to March 14.





Director

F.R.No. 120222W



Sd/- Sd/- Sd/-

2013-14

NOTES

50

Hiran Orgochem LimitedCIN: L51900MH1983PLC029596

Registered Office: Unit 908, 9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja Metroplex, Link Road, Malad (West), Mumbai – 400 064.

ATTENDANCE SLIP

Please fill Attendance Slip and hand it over at the entrance of the meeting hall. Joint shareholders may obtain additional Attendance Slip on request.

Master Folio No.: _______________________________ No. of Shares held:_______________________________

DP ID: ________________________________________ Client ID: _______________________________________

Mr./Ms./Mrs.:____________________________________________________________________________________

Address:________________________________________________________________________________________

_______________________________________________________________________________________________

I hereby record my presence at the THIRTIETH ANNUAL GENERAL MEETING of the Company held on Tuesday, th30 September, 2014 at 9:30 a.m. at Flags Restaurant - B/109 Kemp Plaza, Mindspace, Chincholi Bunder Road,

Malad West, Mumbai – 400064.

_________________________________ _________________________________(Proxy's Name in Block letters) (Member's /Proxy's Signature#)

# Strike out whichever is not applicable

Form No. MGT-11Proxy form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN : L51900MH1983PLC029596Name of the company : Hiran Orgochem LimitedRegistered office : Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt CSL, Raheja

Metroplex, Link Road, Malad (West) Mumbai_ 400064.

th 30 Annual General Meeting- September 30, 2014

Name of the Member(s):

Registered Address:

Email:

Folio no. / Client ID:

DP ID:

I/We, being the member (s) of ……............……. shares of the above named company, hereby appoint

1. Name:………………….............…….............……......................... Email Id: ...........……………………...……………………Address: …………………………………………………...........…………………………………….............…….............…………………………………………………………………………...........………………………….............……..................……………..

Signature:……………………….............………………., or failing him/her

2.

3.

thas my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 30 Annual General Meeting of the

thCompany, to be held on Tuesday, 30 day of September 2014 at 9.30 a.m. at Flags Restaurant - B/109 Kemp Plaza, Mind space, Chincholi Bunder Road, Malad West, Mumbai – 400064 and at any adjournment thereof in respect of such resolutions as are indicated below:

Name:………………….............…….............……......................... Email Id: ...........……………………...……………………Address: …………………………………………………...........…………………………………….............…….............…………………………………………………………………………...........………………………….............……..................……………..

Signature:……………………….............………………., or failing him/her

Name:………………….............…….............……......................... Email Id: ...........……………………...……………………Address: …………………………………………………...........…………………………………….............…….............…………………………………………………………………………...........………………………….............……..................……………..

Signature:……………………….............……………….

Res. No. Resolution

Ordinary Business

1. Adoption of Balance Sheet, Statement of Profit and Loss, Report of Directors' and the Auditor for the financial period ended March 31, 2014.

2. Appoint a Director in place of Mr. Kantilal Hiran, who retires by rotation and being eligible, offer himself for re-appointment.

th3. Appoint M/s. MVK & Associates as Statutory Auditors of the Company to hold office upto conclusion of 4 Annual General Meeting.

Special Business

4. Appoint Mr. H. A. Bafna as an Independent Director up to September 29, 2019.

5. Appoint Mr. Nitinn Gupta as an Independent Director up to September 29, 2019.

Signed this day of 2014

Signature of shareholder Signature of Proxy holder(s)

Note: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the

Company, not less than 48 hours before the commencement of the Meeting.

Affix

revenue

stamp

Registered Office: thUnit No. 908, 9 Floor, Ijmina-Immitation Jewellery Market CSL Raheja Metroplex, Off Link Road, Malad (W), Mumbai – 400 064. Tel.: 022-40144127 Fax: 022-40953099

Email: [email protected] Website: www.hiranorgochem.com

mailto:[email protected]

hiran organics ar 2013-14 this in mind. ... share transfer agent at big share services pvt ... in...

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