34th ANNUAL REPORT - gujaratterce.ingujaratterce.in/assets/upload/AnnualReports/Final_Annual_Report_20… · Navrangpura, Ahmedabad-380009. SECRETARIAL AUDITOR Pinakin Shah & Co

34th

ANNUALREPORT2018-2019

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BOARDOFDIRECTORSMr. Natwarbhai P. Prajapati [DIN 00031187] Chairman & Managing Director (CEO)Mr. Aalap Prajapati [DIN 08088327] Whole Time DirectorMr. Amritbhai P. Prajapati [DIN 00699001] Whole Time DirectorMr. Jayantibhai S. Prajapati [DIN 02608139] Independent DirectorMrs. Chhayaben A. Shah [DIN 01435892] Independent DirectorMr. Viplav S. Khamar [DIN 07859737] Independent DirectorMr. Surendrakumar Sharma [DIN 06430129] Independent DirectorMr. Gordhanbhai G. Patel [DIN 00709521] Director (upto January 24, 2019)Mr. Kanubhai S. Patel [DIN 00031218] Independent Director (upto July 30, 2018)

COMPANYSECRETARY&COMPLIANCEOFFICERMr. Dilipkumar Gajanand Nikhare (w. e. f. October 02, 2018)

CHIEFFINANCIALOFFICERMr. Bhagirath Ramhit Maurya (w. e. f. December 17, 2018)

REGISTEREDOFFICE&FACTORY122/2, Ravi Estate, Bileshwarpura, Chhatral, Dist. Gandhinagar, Gujarat.CIN: L28112GJ1985PLC007753Email: [email protected] / [email protected]: www.gujaratterce.com

ADMINISTRATIVEOFFICEUnit No. D-801-802, The First, B/h. Keshavbaug Party Plot, Vastrapur, Ahmedabad 380015, Gujarat

AUDITORSUSS&AssociatesCHARTERED ACCOUNTANTS25, 2nd Floor, Avani Complex, B/h. Navrangpura Police Station,Navrangpura, Ahmedabad-380009.

SECRETARIALAUDITORPinakinShah&Co.Practicing Company SecretaryA/201, Siddhi Vinayak Towers, B/h. BMW Showroom, Makarba, Ahmedabad-380051

BANKERBANKOFBARODAEllisbridge Branch, Pritamnagar 1st Slop, Ellisbrdige, Ahmedabad-380006, Gujarat

REGISTRAR&SHARETRANSFERAGENTBigshare Services Pvt. Ltd.1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road Marol, Andheri East, Mumbai-400059, Maharashtra.

Index

Sr. No. Particulars PageNo.

1 Notice 01

2. Director’s Report 11

3. Management Discussion and Analysis Report 16

4. Corporate Governance Report 31

5. Independent Auditor’s Report 47

Annual Report 2018-2019 1

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Notice is hereby given that the Thirty Fourth Annual General Meeting of the Members of Gujarat Terce Laboratories Limited will be held on Friday, 20th September, 2019 at 10:00 a.m. at 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar- 382729 to transact the following business.

ORDINARY BUSINESS:

1. AdoptionofFinancialStatements

To consider and adopt the Audited Standalone Financial Statements of the Company for the Financial Year ended March 31, 2019 together with the Board’s Report and the Auditors’ Report thereon.

2. Appointment of Mr. Amritbhai PurshottamdasPrajapatiasaDirectorliabletoretirebyrotation

To appoint a Director in place of Mr. Amritbhai Purshottamdas Prajapati (holding DIN: 00699001), Director, who retires by rotation and, being eligible, seeks reappointment.

“RESOLVED THAT pursuant to the provisions of Section 152 and other applicable provisions of the Companies Act, 2013, the approval of the members of the Company be and is hereby accorded to the reappointment of Mr. Amritbhai Purshottamdas Prajapati (holding DIN: 00699001) as a Director, to the extent that he is required to retire by rotation.”

SPECIALBUSINESS:

3. Re-appointmentofMr.JayantibhaiShankarlalPrajapati(DIN:02608139), as an Independent Director of theCompany

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

“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 (“Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Act and Regulation 16(1)(b) and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Jayantibhai Prajapati (DIN:02608139), Independent Non-Executive Director of the Company, who has submitted a declaration that he meets the criteria of independence as provided in Section 149(6) of the Act and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time and who is eligible for reappointment for the next term of five consecutive years under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and in respect of whom the Company has received a notice in writing from a member under

NOTICE

Section 160 of the Companies Act, 2013 proposing his re-appointment to the office of Independent Director, be and is hereby accorded to re-appoint as an Independent Non-Executive Director of the Company to hold office for five consecutive years with effect from September 20, 2019 to September 19, 2024 and whose office shall not be liable to retire by rotation”.

4. Toadvanceloanorgiveanyguaranteeorprovideanysecurity in connection with any loan taken by anypersoninwhomanyoftheDirectoroftheCompanyisinterested


“RESOLVED THAT pursuant to the provisions of the Section 186 read with Section 179 (3)(e)(f) and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof for the time being in force) and subject to the necessary approvals, concerns, sanctions and permissions of appropriate authorities, as may be necessary, the consent of the Members be and is hereby accorded to make loan(s) in one or more tranches and/or give guarantee(s) including corporate guarantee / provide any security(ies) in connection with the loans made to the Company / Associate Company (s) / Any other Company (s) by any Banks/Financial Institutions/NBFC’s/Bodies Corporate and/or any other person, and/or to make investment by acquisition, subscription, purchase or otherwise the securities of any other body corporate upto a limit of Rs. 15,00,00,000/- (Rupees Fifteen Crores) notwithstanding that investments along with Company’s existing loans or guarantee/ security or investments shall be in excess of the limits prescribed under Section 186 aforesaid.”

“RESOLVEDFURTHERTHAT the Board be and is hereby authorized to take such steps as may be necessary for obtaining approvals, statutory, contractual or otherwise, in relation to the above and to settle all matters arising out of and incidental thereto and to sign and execute all deeds, applications, documents and writings that may be required and to sign e-forms on behalf of the Company and generally to do all acts and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid Resolution.”

5. Toapprovetheexemptioninrespectofloantodirectorsgiveninsection185(2)ofTheCompaniesAct,2013andrulesmadethereunder


2 Annual Report 2018-2019

“RESOLVED THAT subject to approval of members and pursuant to Section 185(2) and all other applicable provisions of the Companies Act, 2013 and Rules made there under as may be amended, from time to time, consent of the Board be and is hereby accorded to advance any loan including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken by any person in whom any of the director of the company is interested, subject to the condition that the loans are utilised by the borrowing company for its principal business activities;

RESOLVEDFURTHERTHAT Mr. Natwarbhai Prajapati, or Mr. Aalap Prajapati, Director of the Company be and is hereby authorized to do all acts, deeds and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid Resolution.”

6. Re-appointment of statutory auditor M/s. USS &Associates for financial year from 01/04/2019 to31/03/2020


“RESOLVED THAT Pursuant to Section 139, 142 and other applicable provisions if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactments thereof for the time being in force), M/s. USS & Associates, Chartered Accountants, Ahmedabad be and is hereby reappointed as Statutory Auditor of the Company for Financial Year 01/04/2019 to 31/03/2020 on such remuneration as may be mutually determined between the said Auditors and Board of Directors of the Company.”

7. Alterationinthemainobjectclauseofmemorandumofassociationofthecompany


“RESOLVED THAT pursuant to the Provisions of Section 13 and other applicable provisions, if any, of the Companies Act, 2013 (“The Act”) and the rules frame thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), the Memorandum of Association of the Company, be and is hereby, altered by inserting the new sub-clause no. 1, 2, 3, 4 in Clause III A of Main Object Clause and deleting the existing Clause III A of Main Object Clause of Memorandum of Association of the Company and the new sub-clause no. 1, 2, 3, 4 of Clause III A shall be read as under:

CLAUSEIII

(A) MAINOBJECT:

1. To carry on business as manufacturers, importers, exporters, traders, retailers, wholesalers, suppliers, indenters, packers, movers, preservers, stockists, agents, distributors, consignors, brokers or job worker in all types, descriptions, specifications, strengths and applications of pharmaceuticals formulations in all its branches such as allopathic, ayurveic, homeopathic, herbal, unani, siddha, bio-chemic, used for treatment, cure and health care of human beings and animals in all forms in all forms such as capsules, tablets, powders, ointments, syrups, injetables, granules sprayers, inhalers etc.

2. To carry on business as manufacturers, importers, exporters, traders, retailers, wholesalers, suppliers, indenters, packers, movers, preservers, stockists, agents, distributors, consignors, jobbers or brokers in all types of synthetic, natural and blended edible food colours.

3. To carry on business as manufacturers, importers, exporters, researchers, traders, retailers, wholesalers, suppliers, indenters, packers, movers, preservers, stockists, agents, distributors, consignors, brokers or job worker in all kinds of cosmetics for hair, skin, nail and other beauty preparations, tooth pastes, tooth powder, deodorants, aerosol, baby products, all kinds of perfumery and other compounds, bath products, herbal creams, toilet requisites, soaps and detergents in all its forms.

4. To carry on the business as manufacturers, processors, converters, finishers, importers, exporters, buyers, sellers and dealers in all kinds and forms of steels including alloy steels, stainless and all other special steels, iron, brass, copper, copper scrap, aluminium, and all other ferrous and non-ferrous metals, alloys and products in all types of sections, varieties, strengths, specifications, descriptions, dimensions, and shapes.

RESOLVEDFURTHERTHATthe industrial activity of the company be and hereby changed from 28 NIC code 2004 MANUFACTURE OF FABRICATED METAL PRODUCTS, EXCEPT MACHINERY AND EQUIPMENTS; to 24 NIC code 2004 stating MANUFACTURE OF CHEMICALS AND CHEMICAL PRODUCTS;

RESOLVEDFURTHERTHATMr. Natwarbhai Prajapati or Aalap Prajapati Director of the Company be and is hereby authorized file form no. MGT 14 or any other e-forms within the prescribed time to Registrar along with such fee as provided in the Companies (Registration of offices and fees) Rules, 2014 and to do all acts and take all such steps as may be necessary, proper or expedient to give effect to the aforesaid resolution.”


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8. Deletion of the other objects clause of theMemorandumofAssociation

To consider and, if thought fit, to pass with or without modification(s), the following resolution As Special Resolution

“RESOLVED THAT pursuant to the provisions of Section 13 and all other applicable provisions, if any, of the Companies Act, 2013 (including any amendment thereto or re-enactment thereof), and subject to necessary approval(s) if any, from the competent authorities, the Other Objects Clause of the Memorandum of Association of the Company be altered by completely deleting the Clause III(C) 19 to III(C) 32.”

RESOLVED FURTHER THAT Mr. Natwarbhai Prajapati or Aalap Prajapati, Director of the Company be and is hereby authorized to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the aforementioned resolution, including but not limited to the filing of necessary forms with the Ministry of Corporate Affairs and to comply with all other requirements in this regard.”

9. AmendmentoftheLiabilityClauseoftheMemorandumofAssociation

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

“RESOLVED THAT pursuant to the provisions of Section 4, 13 and all other applicable provisions, if any, of the Companies Act, 2013, (including any amendment thereto or re-enactment thereof), Clause IV of the Memorandum of Association be and is hereby altered by replacing the existing Clause IV with the following new Clause IV:

Clause IV. “The liability of the members is limited to the extent of amount unpaid on shares held by the members.”

RESOLVED FURTHER THAT Mr. Natwarbhai Prajapati or Aalap Prajapati, Director of the Company be and is hereby authorized to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the aforementioned resolution, including but not limited to the filing of necessary forms with the Ministry of Corporate Affairs and to comply with all other requirements in this regard.”

10. AmendmentoftheCapitalClauseoftheMemorandumofAssociation

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

“RESOLVED THAT pursuant to the provisions of Section 4, 13, 61 and other applicable provisions, if any, of the Companies Act, 2013, (including any amendment thereto or re-enactment thereof), Clause V of the Memorandum of Association be and is hereby altered by replacing the existing Clause V with the following new Clause V:

Clause V. “The Authorized Share Capital of the Company is Rs.11,00,00,000/- (Rupees Eleven Crores only) divided into 1,10,00,000 (One Crores Ten Lakh) Equity Shares of Rs.10/- (Rupee Ten only) each capable of being increased or decreased or converted or sub-divided into shares of different kinds in accordance with the provisions of the Companies Act, 2013.

“RESOLVEDFURTHERTHAT Mr. Natwarbhai Prajapati or Aalap Prajapati, Director of the Company be and is hereby authorized to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the aforementioned resolution, including but not limited to the filing of necessary forms with the Ministry of Corporate Affairs and to comply with all other requirements in this regard.”

11. AdoptionofNewSetofArticlesofAssociation

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

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Articles of Association of the Company be and are hereby altered, replaced, modified and revised as per the new set of Articles of Association and adopted as new regultions of the Articles of Association of the Company.”

“RESOLVEDFURTHERTHAT Mr. Natwarbhai Prajapati or Aalap Prajapati, Director of the Company be and is hereby authorized to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the aforementioned resolution, including but not limited to the filing of necessary forms with the Ministry of Corporate Affairs and to comply with all other requirements in this regard.”

ByOrderoftheBoardFor,GujaratTerceLaboratoriesLimited

Place : Ahmedabad DilipkumarNikhareDate : 09/08/2019 Company Secretary


NOTES:

1) An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 relating to the Businesses to be transacted at the 34th Annual General Meeting is annexed hereto.

2) Additional information of Mr. Amritbhai Pursottamdas Prajapati pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the Secretarial Standard on General Meetings (SS in respect of Directors seeking reappointment at the AGM, is annexed herewith as AnnexureA.

3) AMEMBER ENTITLED TO ATTENDAND VOTE AT THEANNUAL GENERAL MEETING (AGM) IS ENTITLED TOAPPOINTAPROXYTOATTENDANDVOTEINSTEADOFHIMSELF/HERSELFANDTHEPROXYNEEDNOTBEAMEMBEROFTHECOMPANY.Pursuant to the provisions of Section 105 of the Companies Act, 2013, a person can act as a proxy on behalf of not more than fifty members and holding in aggregate not more than ten percent of the total Share Capital of the Company. Members holding more than ten percent of the total Share Capital of the Company may appoint a single person as proxy, who shall not act as a proxy for any other Member. The instrument of Proxy, in order to be effective, should be deposited at the Registered Office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A Proxy Form is annexed to this Notice. Proxies submitted on behalf of limited companies, societies, etc., must be supported by an appropriate resolution / authority, as applicable.

4) A Route Map along with Prominent Landmark for easy location to reach the venue of the AGM is annexed with the Notice of AGM and is also available on the website of the Company.

5) Incomplete proxy forms are considered to be as invalid and the proxy so appointed shall not be entitled to vote on the resolution(s) in the AGM. A proxy holder needs to show his identity at the time of attending the Meeting. Further, in case if the Company receives multiple proxies for the same holding of a member, the proxy which is dated last shall be considered to be as invalid, if it is not dated then all the proxies so send by the member shall considered to be as invalid.

6) Corporate members intending to send their authorized representative to attend the Annual General Meeting are requested to send to the Company a Certified true copy of the Board Resolution/ Power of Attorney authorizing their representative(s) to attend and vote on their behalf at the Meeting.

7) In case of joint holders attending the Meeting, only the member whose name appears to be first will be entitled to vote.

8) As per the provision of Section 72 of the Act, the facility for making Nomination is available for the members in respect of their shareholding in the Company either in single or with joint names. The members are requested to submit the complete and signed form SH-13 with their Depository Participant (DP) who holds the shares in dematerialized form and those who are holding physical shares shall send the same to the Registrar and Share Transfer Agent – Bigshare Services Pvt. Ltd. (the ‘RTA’).

9) The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 14th September, 2019 to Friday, 20th September, 2019.(both days inclusive) in terms of the provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the purpose of the AGM

10) Members holding shares in physical form are requested to promptly notify in writing any changes in their address including mailing address/bank account details to the R&T Agents M/s. Bigshare Services Pvt Ltd Address: 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis Makwana Road Marol, Andheri East Mumbai 400059. Members who hold shares in physical form in multiple folios in identical names are requested to send the share certificate for consolidation into single folio. Members holding shares in electronic form are requested to notify the changes in the above particulars, if any, directly to their Depository Participants (DP).

11) The Register of Directors’ and Key Managerial Personnel and their shareholding maintained under Section 170 of the Companies Act, 2013, the Register of contracts or arrangements in which the Directors are interested under Section 189 of the Companies Act, 2013, will be available for inspection at the Annual General Meeting.

12) Pursuant to Section 101 and Section 136 of the Companies Act, 2013 read with relevant Rules made there under, Companies can serve Annual Reports and other communications through electronic mode to those Members who have registered their e-mail address either with the Company or with the Depository. Members holding shares in demat form are requested to register their e-mail address with their Depository Participant(s) only. Members of the Company, who have registered their e-mail address, are entitled to receive such communication in physical form upon request.

13) Members, who have not registered their e-mail addresses so far request you to register as soon as possible with the Company/ DPs.

• For Members, who have not registered their email address, physical copies of the Annual Report with the Notice of the AGM (along with Proxy Form,


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Attendance Slip and Route Map to the AGM Venue) are being sent through permitted mode.

• We urge members to support our commitment to environmental protection by choosing to receive Notices, Annual Reports and other documents / communications through electronic mode by updating your email addresses with the Company or DPs.

14) The Annual Report 2018-19 of the Company is also available on the Company’s website at www.gujaratterce.in and also on the website of the Stock Exchange at www.bseindia.com.

15) Members who have received the Notice of Annual General Meeting, Annual Report and Attendance Slip in electronic mode are requested to print the Attendance Slip and submit a duly filled in Attendance Slip at the registration counter to attend the Annual General Meeting

16) All documents referred to in the Notice and Explanatory Statement requiring the approval of the Members at the meeting and other statutory registers shall be available for inspection by the Members at the Registered office of the Company during office hours on all working days between 10.00 a.m. to 5.00 p.m. from the date of hereof up to the date of the Annual General Meeting.

17) Pursuant to Section 108 of the Companies Act, 2013, read with the Companies (Management and Administration) Rule, 2014 as amended and Regulations 44 of the SEBI (LODR) Regulations, 2015 the Company is pleased to provide the facility to Members to exercise their right to vote by electronic means. The Members, whose names appear in the Register of Members / list of Beneficial Owners as on Cut-off date i.e. 13th September, 2019 a date not earlier than seven days before the date of general meeting, are entitled to vote on the Resolutions set forth in this Notice.

Members who have acquired shares after the dispatch of the Annual Report and before the Cut-off date may

approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means. A person who is not a member as on the Cut-off date should treat this notice for the information purpose only.

The Members desiring to vote through electronic mode may refer to the detailed procedure on e-voting given hereinafter.

i. In case of members receiving e-mail from CDSL (for Members whose e-mail addresses are registered with Company/ Depositories):

(i) The voting period begins on 17th September, 2019 at 9.00 am and ends on 19th September, 2019 at 5.00 pm. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 13th September, 2019 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) The Shareholders should log on to the e-voting website www.evotingindia.com

(iii) Click on Shareholders

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8

Digits Client ID,

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 follow the steps given below:For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)• Members who have not updated their PAN with the Company/Depository Participant are

requested to use the sequence number which is printed on Postal Ballot / Attendance Slip indicated in the PAN field.

Dividend Bank DetailsOR Date of Birth (DOB)

Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login.• If both the details are not recorded with the depository or company please enter the member

id / folio number in the Dividend Bank details field as mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then reach directly 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 this password is to be also 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 take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant Gujarat Terce Laboratories Limited on which you choose to vote.

(xii) 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.

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

(xiv) 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.

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

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

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

(xviii) Shareholders can also use Mobile app- “m-Voting’ for e voting. M-Voting app is available on IOS, Android & Windows based Mobile. Shareholders may log in to m-Voting using their e voting credentials to vote for the company resolution(s).

(xix) NoteforNon–IndividualShareholdersandCustodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.

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

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

(xx) 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.com, under help section or write an email to [email protected].

OtherInstructions:

a) The voting rights of Members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut- off date i.e. 13th September, 2019.

b) Mr. Ishan P. Shah, Advocate has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

c) The Scrutinizer shall immediately after the conclusion of voting after the Annual General Meeting, count the votes cast at the meeting, thereafter unblock the votes in the presence of at least two witnesses not in the employment of the company and make, not later than three days of the meeting, a consolidated Scrutinizer’s Report of the total votes cast in favour or against, if any, forthwith to the Chairman of the Company. The Chairman or person authorised by him in writing shall declare the results of the voting forthwith.

d) The results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.gujaratterce.in and on the website of CDSL www.evoting.cdsl.com immediately after the result is declared by the Chairman and the same shall be simultaneously communicated to the BSE Limited.

e) A Member can opt for only one mode of voting i.e. either through e-voting or by Ballot. If a Member casts votes by both modes, then voting done through e-voting shall prevail and Ballot shall be treated as invalid.

f) The Securities and Exchange Board of India has mandated submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in physical form can submit their PAN details to M/s. Bigshare Services Private Limited.

g) Members desiring any information relating to the accounts are requested to write to the Company at least seven days in advance so as to enable the management to keep the information ready.

h) The resolution shall be deemed to be passed on the date of AGM, subject to the receipt of sufficient votes.


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ANNEXURE TO THE NOTICE

Explanatory statement[Pursuant to section 102 of the Companies Act, 2013]

ITEM NO. 3

Details of Director seeking Re-appointment at ensuing Annual General Meeting:

Name of Director Mr. Jayantibhai Shankarlal Prajapati

Age 68

Date of Appointment 01-04-2009

Qualification Ph.D.

Directorships, Membership/ Chairmanship of other Boards

None

Chairman/ Member of Committees (including Audit Committee & Stakeholder Committee)

Three*

No of shares held in the Company 9000

Number of Meetings of the Board attended during F.Y. 2018-19 year

6

Remuneration sought to be paid Nil

Experience Mr. Jayantibhai Shankarlal Prajapati has been working as Director of the Company since 2009. Mr. Jayantibhai Shankarlal Prajapati is one of the key functionaries in the top management team and had been associated with the Company for about 10 years.

Terms and Conditions for re-appointment There is no change in the terms and conditions relating to appointment of Mr. Jayantibhai Shankarlal Prajapati as Independent Director of the Company as approved by the members at the AGM held on 27th Sept. 2014

Relationship with other Directors, Manager and other Key Managerial Personnel of the company

None

*Note: The Directorship held by director mentioned above do not include directorship of Private Limited Company.

Mr. Jayantibhai Shankarlal Prajapati (DIN: 02608139) has been a director of the Company effective April 1, 2009. In terms of Section 149 of the Companies Act, 2013, the members have at the Twenty Ninth Annual General Meeting held on 27th September 2014 appointed Mr. Jayantibhai Shankarlal Prajapati as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years with effect from 27th Sept. 2014 to 26th Sept. 2019. Accordingly, the current term of Mr. Jayantibhai Shankarlal Prajapati expires on 26th Sept. 2019. In terms of Section 149 of the Companies Act, 2013, Mr. Jayantibhai Shankarlal Prajapati is being eligible for re-appointment as an Independent Director for another term of 5 consecutive years effective 20th Sept. 2019 to 19th Sept. 2024. The Company has received a notice in writing from a member proposing the re-appointment of Mr. Jayantibhai Shankarlal Prajapati as an Independent Director of the Company for another term of five consecutive years effective 20th Sept. 2019

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 18th May 2019, approved, subject to the approval of the members at the ensuing Annual General Meeting, Re-appointment of Mr. Jayantibhai Shankarlal Prajapati as an Independent Director for another term of five consecutive years commencing from 20th Sept. 2019. Mr. Jayantibhai Shankarlal Prajapati will not be liable to retire by rotation.

The Company has also received a declaration that he meets the criteria for the independence as prescribed under Section 149(6) of the Companies Act, 2013. In the opinion of the Board, Mr. Jayantibhai Shankarlal Prajapati fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for re -appointment as an Independent Director.

The Independent Director, Mr. Jayantibhai Shankarlal Prajapati is interested in the resolution. None of the other directors and Key Managerial Personnel of the Company and their relatives are interested in the above resolution.

The Board of Directors recommends the Special Resolution set out at Item 3 of the Notice for Approval by the Members.


ITEMNO.4

The provisions of Section 186 read with Section 179(3) (e) (f) of the Companies Act, 2013 (“the Act”) and the Companies (Meetings of Board and its Powers) Rules, 2014, interalia, provide that no Company shall directly or indirectly:

1. give any loan to any person or other body corporate;

2. give any guarantee or provide security in connection with a loan to any other body corporate or person; and

3. acquire by way of subscription, purchase or otherwise, the securities of any other body corporate,

exceeding sixty per cent of the paid up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more.

Where such giving of any loan or guarantee or providing any security or the acquisition exceeds the limits specified under section 186 of the Act as aforesaid, prior approval by means of Special Resolution passed at the General Meeting is necessary.

As a measure of achieving greater financial flexibility and to enable optimal financing structure, the approval of Members of the Company is therefore sought by way of Special Resolution pursuant to the provisions of Section 186 of the Act to give powers and authority to the Board of Directors of the Company for giving any loan or guarantee including corporate guarantee or providing security in connection with a loans made to the Company / Associate Company (s) if any / Any other Company (s) by any Banks/Financial Institutions/NBFC’s/Bodies Corporate and/or, to any person or other body corporate or to make investment by way of subscription, purchase or otherwise in the securities of any other body corporate, up to an amount the aggregate outstanding of which shall not exceed at any given time Rs. 15,00,00,000 Crores (Rupees Fifteen Crores only).

The proposed Special Resolution as set out in Notice is enabling in nature for any further loan/investment/guarantee/ security, to be made or given to bodies corporate/to any Banks, Financial Institutions or any other person as per the provisions of the Act authorizing and empowering the Board of Directors of the Company to take the appropriate decisions in this regard at the appropriate time(s) in the best interest of the business of the Company.

Mr. Natwarbhai Parsottam Prajapati, Amritbhai Purshottamdas Prajapati and Aalap Natubhai Prajapati are interested in the resolution set out at item 4.

Save or except the above no other Director and/or Key Managerial Personnel of the Company and their relatives are in any way concerned or interested, financially or otherwise, in respect of the said resolution.


ITEMNO.5

In compliance with Section 185 and all other applicable provisions of the Companies Act, 2013 and Rules made there under as may be amended from time to time, Company introduces a provision of Loan for its Subsidiaries/ Joint Ventures /other Companies/ Firms in which Directors are interested if any.

Purpose: Principal business activities by the recipient of the loan or guarantee or security

Rate of Interest: As per mutual understanding based on RBI guideline.

Term: As may be specified by Board.

Recovery: Period will be mentioned in Board Resolution for each person/ Company at the time of giving Loan, Guarantee and Security.

Mr. Natwarbhai Parsottam Prajapati, Amritbhai Purshottamdas Prajapati and Aalap Natubhai Prajapati are interested in the resolution set out at item 5.

Save or except the above no other Director and/or Key Managerial Personnel of the Company and their relatives are in any way concerned or interested, financially or otherwise, in respect of the said resolution.


ITEMNo.6

The Members of the Company at its 29th AGM held on Saturday, 27th September, 2014 had appointed USS & Associates, Chartered Accountants, (Firm Registration No: 122634W) Ahmedabad as Statutory Auditors of the Company to hold office from the conclusion of 29th AGM till the conclusion of 30th Annual General Meeting of the Company respectively subject to ratification of the appointment by the Members at every AGM held after the 29th AGM of the Company.

Further The Members of the Company at its 30th AGM held on Saturday, 26th September, 2015 had re-appointed M/s. USS & Associates, Chartered Accountants, (Firm Registration No: 122634W) Ahmedabad as Statutory Auditors of the Company to hold office from the conclusion of 30th AGM till the conclusion of 34th Annual General Meeting of the Company for the financial year ended 2018-19 subject to ratification of the appointment by the Members at every AGM held after the 30th AGM of the Company.

The Board of Directors at its meeting held on 18th May, 2019, as per the recommendation of the Audit Committee, and pursuant to the provisions of Section 139(9) of the Companies Act, 2013, have re-appointed M/s. USS & Associates, Chartered Accountants, (Firm Registration No: 122634W), Ahmedabad to hold office as the Statutory Auditors of the Company from 01/04/2019 to 31/03/2020 subject to the approval by the members at the 34th Annual General Meeting


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of the Company, at such remuneration plus applicable taxes, and out of pocket expenses, as may be determined and recommended by the Audit Committee in consultation with the Auditors and duly approved by the Board of Directors of the Company.

The Company has received consent letter and eligibility certificate from M/s. USS & Associates, Chartered Accountants, (Firms Registration No. 122634W), to act as Statutory Auditors of the Company along with a confirmation that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013. Accordingly, consent of the Members is sought for passing a Special Resolution as set out in Item No. 6 of the Notice for re-appointment and payment of remuneration to the Statutory Auditors.

None of the Directors, Key Managerial Personnel and their relatives are in any way, concerned or interested, financially or otherwise, in the aforesaid Special Resolution.


ITEMNo.7

Company is doing Pharmaceutical business since incorporation, meanwhile company has acquired metallurgy business in 2010 and at that time Company has amended the object clause to includes metallurgy business and requirement to alter object clause was arisen but due to minor mistake instead of adding new object clause whole object has been deleted and metallurgy business was replaced by inserting industry activity code 28 of NIC code 2004 in e-Form 23 in earlier Companies Act, 1956 instead of industry activity code 24 of NIC code 2004. The Company would like to rectify the minor mistake that has been taken place in past by filing Form MGT-14 in correct industrial activity code i.e. 24 of NIC code 2004.

The Board at its meeting held on 18th May, 2019 has approved alteration of the MOA of the Company and the Board now seek Members’ approval for the same.

The proposed change of object clause requires the approval of shareholders through Special Resolution pursuant to the provisions of Section 13 of the Companies Act, 2013. A copy of the proposed MOA of the Company would be available for inspection for the Members at the Registered Office/Admin Office of the Company during the o3ffice hours on any working day, except Saturdays, Sundays and public holidays, between 11.00 a.m. to 5.00 p.m. till the date of Annual General Meeting. The aforesaid documents are also available for inspection at the Annual General Meeting.

Your Directors recommend this resolution for approval of the members of the Company. Hence, Special Resolution as set out as Item No. 7 in the Notice is proposed for your recommendation and approval thereof.

None of the Directors, Key Managerial Persons (KMPs) of the Company or any relatives of such Director or KMPs, shall be considered to be concerned or interested in the proposed Special Resolutions.


ITEMNO.8:

In order to comply with the provisions of Section 4(1) (c), 13 and other applicable provisions, if any, of the Companies Act, 2013, the Company needs to delete the Other Objects Clause from the Memorandum of Association i.e. The Clause III(C) 19 to III(C) 32. The modification in the Memorandum of Association is carried out to give effect to the provisions of the Companies Act, 2013. Consent of the shareholders by passing a Special Resolution is required in this regard.

None of the Directors, Key Managerial Personnel and their relatives are in any way concerned or interested in the said resolution.


ITEMNO.9:

In order to comply with the provisions of Section 4(1)(d)(i), 13 and other applicable provisions, if any, of the Companies Act, 2013, the Company needs to alter the Liability Clause of the Memorandum of Association. The modification in the Memorandum of Association is carried out to give effect to the provisions of the Companies Act, 2013. Consent of the shareholders by passing a Special Resolution is required in this regard.



ITEMNO.10:

In order to comply with the provisions of Section 4(1)(e), 13 and other applicable provisions, if any, of the Companies Act, 2013, the Company needs to alter the Capital Clause of the Memorandum of Association. The modification in the Memorandum of Association is carried out to give effect to the provisions of the Companies Act, 2013. Consent of the shareholders by passing a Special Resolution is required in this regard.




ITEMNO.11:

The Existing Articles of Association are replaced by the new set Articles of Association and adopted as new set of Articles of Association. The modification in the Articles of Association is carried out to give effect to the provisions of the Companies Act, 2013. Consent of the shareholders by passing a Special Resolution is required in this regard.



ANNEXURE-A

Information pursuant to the provisions of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 read with the provisions of the Secretarial Standard on General meetings (‘SS-2’) issued by the Institute of Company Secretaries of India regarding the Director proposed to be re-appointed:

NameofDirector Mr.AmritbhaiPurshottamdasPrajapati

Age 65

Date of Appointment 01-03-2006

Qualification Diploma in Textile

Directorships, Membership/ Chairmanship of other Boards

None

Chairman/ Member of Committees (including Audit Committee & Stakeholder Committee)

None

No of shares held in the Company 31510

Number of Meetings of the Board attended during F.Y. 2018-19 year

6

Remuneration sought to be paid 33000/- p.m.

Experience Mr. Amritbhai P. Prajapati has been working as Director and Promoter of the Company since 2006. Mr. Amritbhai P. Prajapati is one of the key functionaries in the top management team and had been associated with the Company for about 13 years.

Terms and Conditions for re-appointment There is no change in the terms and conditions relating to appointment of Mr. Amritbhai P. Prajapati as Whole Managing Director of the Company as approved by the members at the AGM held on 30th Sept. 2016

Relationship with other Directors, Manager and other Key Managerial Personnel of the company

Brother of Natwarbhai Purshottamdas Prajapati


Place : Ahmedabad DilipkumarNikhareDate : 09/08/2019 Company Secretary


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DIRECTOR’SREPORTTo,The Members ofGUJARATTERCELABORATORIESLIMITED

Your Directors have pleasure in presenting the 34th Annual Report of your Company together with the Audited Financial Statement for the year ended 31st March, 2019.The Company’s financial performance for the year ended on 31st March, 2019 is summarized below:

1. FINANCIALHIGHLIGHTS (`InLakhs)

Particulars CurrentYear

2018-19

PreviousYear

2017-18

Revenue from operation 3103.05 2901.42

Profit before Interest and Depreciation 81.09 73.64

Less: Interest 25.39 22.60

Profit Before Depreciation

Less: Depreciation 21.13 18.51

ProfitBeforeTax 34.57 32.52

Less/Add: Tax Expenses

Current Tax 13.12 9.98

Deferred Tax (21.80) (4.53)

TotalTaxExpenses (8.68) 5.45

Profitfortheyear 43.25 27.07

Income Tax Effect - 36.49

Other Comprehensive Income - -8.75

TotalComprehensiveIncome 43.25 34.54

2. STATEOFCOMPANY’SAFFAIRSThe operating income increased to ` 3103.05 lakhs from ` 2901.42 lakh in the previous year showing a growth of 6.95%. The Profit before Tax for the year is ` 34.57 lakh as against ` 32.52 lakh in previous year registering growth of 6.30%. The net profit increased to ` 43.25 lakh from ` 34.54 lakh in the previous year registering a growth of 25.21%.

3. TRANSFERTORESERVESINTERMSOFSECTION134(3)(J)OFTHECOMPANIESACT,2013The Board of Directors has transferred ` 43.25 lakh to General Reserve during the year.

4. MATERIAL CHANGES AND COMMITMENTS, IF ANY,AFFECTINGTHEFINANCIALPOSITIONOFTHECOMPANYWHICHHAVEOCCURREDBETWEENTHE ENDOF THEFINANCIAL YEAR OF THE COMPANY TO WHICH THEFINANCIALSTATEMENTSRELATEANDTHEDATEOFTHEREPORT

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. DETAILSOF SUBSIDIARY/JOINTVENTURES/ASSOCIATECOMPANIES

No company has become or ceased to be Subsidiary Company, Joint Venture Company or Associate Company during the year.

6. CHANGEINTHENATUREOFBUSINESS

There is no change in the nature of the business of the company.

7. MEETINGSOFTHEBOARDOFDIRECTORS

During the year Six Board Meetings and one Independent Directors’ meeting was held, the details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and SEBI (LODR) Regulations, 2015 were adhered to while considering the time gap between two meetings. Details of the number of Board Meeting held during the year forms part of the Corporate Governance Report.

8. CORPORATEGOVERNANCE

As provided under Regulation 15(2) of the SEBI (LODR) Regulations, 2015, the compliance with Corporate Governance as specified in Regulation 17,17A, 18, 19, 20, 21,22, 23, 24, 25, 26, 27 and 46(2)(b) to (i) & Para C,


D & E of Schedule V are not applicable to the Company as paid up share capital doesn’t exceed ` 10 Crore.

The Company has decided to maintain and adhere to the Corporate Governance requirements set out by SEBI voluntarily. The Report on Corporate Governance along with requisite Certificate from M/s. Pinakin Shah & Co., Practicing Company Secretary, Ahmedabad is annexed to this Report.

9. MANAGEMENTDISCUSSIONANDANALYSISREPORT

A report on Management Discussion and Analysis, as required in terms of Regulation 34(2) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, forms part of this report and it deals with the Business Operations and Financial Performance, Research & Development Expansion & Diversification, Risk Management, Marketing Strategy, Safety & Environment, Human Resource Development, significant changes in key financial ratios etc. in Annexure-A

10. DIVIDEND

The Company has not recommended any dividend for current year.

11. DEPOSITS

Your Company has not accepted any deposits from the public within the meaning of Section 73 and 74 of the Companies Act, 2013 and read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended 31st March, 2019.

12. A STATEMENT INDICATING DEVELOPMENT ANDIMPLEMENTATION OF A RISK MANAGEMENT POLICYFOR THE COMPANY INCLUDING IDENTIFICATIONTHEREIN OF ELEMENTS OF RISK, IF ANY, WHICH INTHE OPINION OF THE BOARD MAY THREATEN THEEXISTENCEOFTHECOMPANY

The Company has formalised Risk Management system by formulating and adopting Risk Management Policy to identify, evaluate, monitor and minimize the identifiable business risk in the Company. This is an ongoing process and the Audit Committee periodically reviews all the risk and suggests the necessary steps to mitigate the risk if any such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks those have been identified and assessed, which may threaten the existence of the Company.

There is no such risk which in the opinion of the Board may threaten the existence of the Company.

13. DIRECTORS&KEYMANAGERIALPERSONNEL

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Amritbhai Purshottamdas Prajapati, (DIN: 00699001)

will retire by rotation at the ensuing Annual General Meeting and is being eligible for re-appointment. Pursuant to Regulation 17 of SEBI (LODR) Regulations, 2015, details of Directors retiring by rotation is provided under explanatory statement of the Notice of the ensuing Annual General Meeting.

The Board of directors, on the recommendation of the Nomination and Remuneration Committee (NRC), had appointed Mr. Aalap Prajapati as an Additional Director w. e. f. April 01, 2018 for a period of five years upto March 31, 2023 and Whole Time Director as approved by Members in the 33rd Annual General Meeting held on September 24, 2018.

The Board of directors, on the recommendation of the Nomination and Remuneration Committee (NRC), had appointed Mr. Surendrakumar Sharma as an Additional Director w. e. f. August 10, 2018 for a period of five years upto August 09, 2023 and Independent Non-Executive Director as approved by Members in the 33rd Annual General Meeting held on September 24, 2018.

During the year Mr. Gordhanbhai Gandabhai Patel, resigned from the board on January 24, 2019 and the same has been taken on record by Board on their meeting held on 11th February, 2019. The board placed on record its appreciation for the invaluable guidance and service rendered by him during his association with the Company.

On the recommendation of the Nomination and Remuneration Committee (NRC), Ms. Shital Dalavadi has resigned from the Post of Company Secretary & Compliance Officer w. e. f. 01st October, 2018 and Mr. Dilipkumar Nikhare has been appointed as Company Secretary & Compliance Officer as Key Managerial Personnel w. e. f. 02nd October, 2018.

On the recommendation of the Nomination and Remuneration Committee (NRC), Mr. Amritbhai Purshottamdas Prajapati has resigned from one of the post of Chief Financial Officer of the Company with effect from 17th December, 2018 and Mr. Bhagirath Ramhit Maurya has been appointed as Chief Financial Officer as Key Managerial Personnel w. e. f. 17th December, 2018 respectively and the same has been taken on record by Board on their meeting held on 17th December, 2018.

All Independent Directors (IDs) have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details terms of appointment of IDs are disclosed on the company’s website with following link http://gujaratterce.in/Codes-and-Policies


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14. NOMINATIONANDREMUNERATIONPOLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, senior Management and their Remuneration including criteria for determining qualifications, positive attributes, Independence of a director. The details of the Nomination and Remuneration Policy are covered in the Corporate Governance Report. The said policy has also been uploaded on the Company’s website at http://gujaratterce.in/Codes-and-Policies

15. ANNUAL EVALUATION OF THE PERFORMANCE OFTHE BOARD, ITS COMMITTEES AND OF INDIVIDUALDIRECTORS

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and Individual Directors pursuant to the requirements of the Companies Act, 2013 and rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and schedule prescribed thereunder.

Further, the Independent Directors, at their exclusive meeting held on February 11, 2019 during the year reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations.

16. AUDITORS

StatutoryAuditors

The Board of Directors at its meeting held on 18th May, 2019, as per the recommendation of the Audit Committee, and pursuant to the provisions of Section 139(9) of the Companies Act, 2013, have re-appointed M/s. USS & Associates, Chartered Accountants, (Firm Registration No: 122634W), Ahmedabad for Financial Year 01/04/2019 to 31/03/2020 to hold office as the Statutory Auditors of the Company subject to the approval by the members at the 34th Annual General Meeting of the Company.

The Auditors’ Report annexed to the financial statements for the year under review does not contain any qualifications.

InternalAuditors

The Board of Director in their meeting held on 29th May, 2018 appointed M/s D V Shah & Associates, Chartered Accountants, Ahmedabad as Internal Auditor of the Company in terms of Section 138 of the Companies Act, 2013 and rules made thereunder, from Financial Year 2018-19 to 2022-23, upon recommendation of the Audit Committee.

SecretarialAuditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Pinakin Shah & Co, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith marked as Annexure-B to this Report. The Secretarial Auditor has not made any adverse comments or given any qualification, reservation or adverse remarks or disclaimer in their Audit Report.

17. EXPLANATIONORCOMMENTSONDISQUALIFICATIONS,RESERVATIONS,ADVERSEREMARKSORDISCLAIMERSINTHEAUDITOR’SREPORTS

There have been no disqualifications, reservations, adverse remarks or disclaimers in the auditor’s reports, requiring explanation or comments by the Board.

18. COMMITTEESOFTHEBOARD

In compliance with the requirement of applicable laws and as part of best governance practices, the Company has following Committees of the Board as on 31st March, 2019:

i. Audit Committee

ii. Stakeholders Relationship Committee

iii. Nomination and Remuneration Committee

The details with respect to the aforesaid Committees forms part of the Corporate Governance Report.

19. PARTICULARSOFLOANSGIVEN,INVESTMENTSMADE,GUARANTEESGIVENANDSECURITIESPROVIDED

There were loans, guarantees or investments made by the Company under section 186 of the Companies Act, 2013 are given in note 5 to the financial statements.

20. DIRECTORS’RESPONSIBILITYSTATEMENT

Pursuant to the provisions of Section 134 (3)(c) of the Companies Act, 2013, the Board of Directors hereby confirms that,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at 31st March, 2019 and of the profit or loss of the company for that period.


iii. It has 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, to the best of its knowledge and ability.

iv. It has prepared the annual accounts on a going concern basis.

v. The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating efficiently.

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

21. REPORTINGOFFRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

22. EXTRACTOFANNUALRETURN

The extract of Annual Return required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 forms part of this report as Annexure-C

23. PARTICULARS OF EMPLOYEES AND RELATEDDISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure-D to this report.

24. INSURANCE

All Inventories including Buildings, Machinery etc., is adequately insured against major risks.

25. CONTRACTS OR ARRANGEMENTS WITH RELATEDPARTIES

All related party transactions that were entered during the financial year were in the ordinary course of the business of the Company and were on arm’s length basis. There were no materially significant related party transactions entered with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company. The transactions entered into, pursuant to the omnibus approval so granted, are audited and a statement giving details of all related party transactions is placed before

the Audit Committee and the Board of Directors for their approval. The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company http://gujaratterce.in/Codes-and-Policies . Since all related party transactions entered into were in the ordinary course of business and were on an arm’s length basis, form AOC-2 is not applicable to the Company.

26. FAMILIARISATION PROGRAMME OF INDEPENDENTDIRECTORS

The Objective of a familiarization program is to ensure that the Independent Directors are updated on the business environment and overall operations of the Company. This enables the Independent Directors to make better informed decisions in the interest of the Company and its stakeholders.

In Compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization program for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of industry in which the Company operates, business model etc.

A familiarization program was conducted for Independent Directors on areas such as the core functions and operations of the Company, overview of the industry, financials and the performance of the Company by site visits to plant location.

27. VIGILMECHANISM/WHISTLEBLOWERPOLICY

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Vigil Mechanism or ‘Whistle Blower Policy’ for directors, employees and other stakeholders to report genuine concerns has been established. The Audit committee reviews the functioning of the Whistle Blower mechanism on a quarterly basis. Due to changes in SEBI (Prohibition of Insider Trading) Regulations, 2015, Whistle Blower Policy has been amended and approved by Board in their meeting held on 11th February, 2019 effective from 01st April, 2019. The same is uploaded on the website of the company http://gujaratterce.in/Codes-and-Policies

The Policy has a systematic mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or policy.

28. COMPLIANCE WITH SECRETARIAL STANDARDS ONBOARDANDANNUALGENERALMEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board meetings and Annual General Meetings.


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29. CONSERVATIONOFENERGY,TECHNOLOGYABSORPTIONANDFOREIGNEXCHANGEEARNINGSANDSOUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-E

30. EQUITYCAPITAL

The Authorized Equity Share Capital of the Company consist of 11000000 equity shares of ` 10/- each and issued, subscribed and paid up Equity Share Capital consist of 7420300 equity shares of ` 10/- each fully paid up during the financial year ending on 31st March, 2019.

31. INTERNALCONTROLSYSTEMSANDTHEIRADEQUACY

The Company believes that a strong internal control framework is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

The audit scope, reporting framework is defined in charter of the Internal Audit, which is approved by the Audit Committee of the Board of Directors. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Board. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

32. ANY SIGNIFICANT ANDMATERIALORDER PASSED BYREGULATORSORCOURTSORTRIBUNALS

No orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operation in future.

33. A STATEMENT UNDER SEXUAL HARASSMENT OFWOMENATWORKPLACE(PREVENTION,PROHIBITIONANDREDRESSAL)ACT,2013

The Company has in place a Prevention of sexual harassment policy in line with the requirements of the

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made there under. Your Company has constituted an Internal Complaints Committee to handle all clearing and forwarding Agency where our employees are working and Manufacturing site.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

a. number of complaints filed during the financial year : Nil

b. number of complaints disposed of during the financial year :Nil

c. number of complaints pending as on end of the financial year :Nil

34. DISCLOSURE REGARDING MAINTENANCE OF COSTRECORDS

Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time is not applicable to your company hence, your Company is not required to maintain cost records.

35. ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continued co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the executives, staff and workers of the Company.

ByOrderoftheBoardofDirectorsFor,GujaratTerceLaboratoriesLimited

Place : Ahmedabad NatwarbhaiP.PrajapatiDate : 18/05/2019 Chairman & Managing Director

DIN: 00031187


INDUSTRYSTRUCTUREANDDEVELOPMENTSGlobalEconomy:

GTLL (Gujarat Terce Laboratories Limited) an uncertain global environment and challenging industry dynamics, we have continued to grow. This encouraging performance has been supported by our commitment to quality, adherence to compliance, manufacturing excellence and strong supply chain capabilities.

The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain conditions. The global pharmaceutical market is expected to exceed $1.5 trillion by 2023 and the key growth drivers will continue to be the US and India. India’s pharma spends are expected to increase to $28-32 Billion by 2023. Last year, the Government of India launched the National Health Protection Scheme (NHPS), with a vision to provide insurance cover to an estimated 50 Crores individuals from nearly 10 Crores poor and vulnerable families. With the government having spent half a Billion dollar as funding for the programme, the Finance Minister while presenting the Interim Budget raised the allocation for Ayushman Bharat scheme to ` 6,400 Crores for 2019-2020. This will further provide an impetus to the sector and help the patients with better access to medicines. Indian pharmaceutical sector is expected to grow at a CAGR of 15 per cent in the near future and medical device market expected to grow $50 billion by 2025.

GlobalPharmaMarket:

Government of India’s ‘Pharma Vision 2020’ aims to make India a global leader in end to end drug manufacturing. The sector has received cumulative FDI worth US$ 15.93 billion between April 2000 and December 2018. Under Budget 2019-20, allocation to the Ministry of Health and Family Welfare increased by 3.1 per cent to ̀ 63,298 crore. Increasing private sector investment in R & D and acquisitions are driving the sector’s growth. In FY18, Indian pharma companies invested 8.8 percent of their sales in R&D.

Currently, the domestic pharma industry contributes to over 4% to the gross domestic product (GDP), against the global average of 9%. However, this is going to improve in the next five years with the estimated rise in domestic pharma spends. Today, close to half a Million people are directly employed by the sector, making India the second highest skilled biotech workforce in the world after China. India is also one of the largest exporters to regulated pharma markets across the globe and Indian pharma firms contribute to over 20% of global generic business. These positive trends bolster our

commitment to ensure that no patient will be denied access to high-quality affordable medicine and medical support.

As an Indian pharma company with over 100 years of expertise, we have progressed on the path to providing high-quality products to patients globally. A strong domestic branded business and steady progress on building capabilities to provide a diversified offering to stable developed markets remain our competitive advantage. This provides us the window to leverage more growth opportunities.

In March 2018, the Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.

The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy, in order to stop any misuse due to easy availability.

We are continuously investing in the Company’s complex manufacturing capability and fortifying our supply chain management practices to achieve operational excellence. Our capacity expansion plan is on track. Our Indian formulations business added substantial prescriber base in FY19, reaffirming our brand’s position.

As a company with a rich legacy of serving the global pharma market, we remain focussed on complete compliance to regulatory norms and have integrated our human resources management processes to drive a culture of integrity.

Better access to affordable healthcare remains one of the biggest global challenges and at GTLL we are working towards meeting this global priority. Our efforts are underpinned by steady production of high-quality products, an agile supply chain and a proactive marketing team that leverages opportunities to reach more patients across geographies.

OPPORTUNITIESANDTHREATS

In FY19, our business reflected the agility of our supply and helped us reach our customers at the right time. Thus, ensuring that we could capitalise on short-term market opportunities and leverage the same to build long-term partnerships. Our people management initiatives are focused on customising knowledge-enhancement modules that cater to diverse needs of each business. We have driven a culture which is based on meritocracy and have a strong reward policy for talent that outshines their set responsibilities. Our HR policies have helped boost innovation and have provided opportunities to learn and grow. This has enabled our team of 300 plus employees to consistently contribute to GTLL’s growth. Our commitment to integrity and inclusion begins at the top, with clear leadership from the Board and is embedded at every level of our business. We have consistently

ANNEXURE-A

MANAGEMENTDISCUSSIONANDANALYSISREPORT


®

worked towards creating a truly inclusive work culture that celebrates and upholds diversity. Our workforce including our senior leadership represent a diverse set of experiences and opinions to help us achieve our goals and better understand the needs of patients across the globe. India’s drug price control regime is inconsistent in its implementation. The National List of Essential Medicines (NLEM) has drugs whose prices are decided by the government, but without any industry representation. There are the risk of increase competition in generic drugs. The pharmaceutical industry threats could include increased government regulation, a declining economy, increasing research and development costs or a decrease in the global population.

OUTLOOK

According to the World Economic Outlook by IMF, the global economic growth in 2018 is estimated to be around 3.7%. Going forward, the global growth is expected to slow further. Growth projections for the US remains unchanged at 2.5% and India, Japan and Sub-Saharan Africa are projected to grow to 6.3% and 3.5% respectively. Indian GDP is expected to grow at 7% in FY19.

Source: International Monetary Fund and Central Statistics Office

The global population (7.7 Billion) is expected to reach 8.5 Billion in 2030. More than half of the anticipated growth in global population is expected to be in Africa, with Asia being the second largest contributor to this growth to 9.7 Billion in 2050 and 11.2 Billion by 2100. Global fertility is projected to fall from 2.5 children per woman in 2010-2015 to 2.4 in 2025-2030. Number of persons aged 80 or over is projected to increase from 137 Million in 2017 to 425 Million in 2050 across the world.

Source:https://www.un.org/en/sections/issues-depth/population/

The increasing demand for healthcare continues to be a burden for economies across the globe and their public healthcare systems. Many countries have introduced several measures requiring government to introduce measures to make medicines more accessible and affordable. In India, 851 medicines are regulated under Government of India’s National List of Essential Medicines, 2015.

Source:http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=67701&lsno=16

We continue to see a significant opportunity in the market and will use periods of interim weakness as investment opportunities for long term.

RISKSANDCONCERNS

Qualityrisk

In case of discrepancies during packaging/ manufacturing, patient safety may be endangered due to failure of collection,

review, follow up, or report adverse events from all potential sources. Constant Quality Improvements incorporated throughout the organization and team committed to quality standards and procedures.

CompetitiveDynamics

Adverse global and domestic demand-supply dynamics and unfair trade practices can pose competitive risks. The Company has continuously monitor and evaluate the market development and competitive landscape.

Environment,Health,SafetyandSustainability

Any shortcoming in compliance with Company policies on maintaining Environment, Health, Safety and Sustainability standards can erode the brand image and trust. The Company has greater focus and increased regulatory activity on environmental issues.

Intellectualproperty

The Company may run the risk of running into litigation if company’s products and processes infringe trademark held by other manufacturers. The Company has create a vigilance mechanism via an IPR department to check for possible infringement of intellectual property rights of trademark proprietor.

NewProductrisk

New product development and launch involves substantial expenditure, which may not be recovered due to several factors including development uncertainties, increased competition, regulatory delays lower than anticipated price realizations, delay in market launch and marketing failure.

Newcapitalinvestments

The Company continuously adds capacity to meet the increasing demand of pharma products from various markets. The Company faces risks arising out of delay in implementation, cost overrun and inappropriate implementation. The capacities are built in anticipation of demand and the Company runs the risk of under-utilization of capacities resulting in high manufacturing cost. The risks are sought to be mitigated by forming appropriate project management team and corporate management oversight.

INTERNALCONTROLSYSTEMSANDTHEIRADEQUACY

The Company main tans appropriate systems of internal control, including monitoring procedures, to ensure that all the assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Company had appointed D.V. SHAH & ASSOCIATES, as internal auditors. The prime objective of this audit is to test


the adequacy and effectiveness of all internal control systems and suggest improvements. Significant issues are brought to the attention of the audit committee for periodical review. The Audit Committee approves and reviews audit plans for the year based on internal risk assessment. Audits are conducted on an ongoing basis and sufficient deviations are brought to notice of the audit Committee of the Board following which corrective action is recommended for implementation. All these measures facilitate timely detection of any irregularities and early remedial steps with no monetary loss.

We continue to build our team with high quality talent, and put thrust on providing continuous training to be competitive. We continuously strive to integrate the entire organization from strategic support functions like finance, human resources, and regulatory affairs to core operations like research, manufacturing and supply chain. The internal audit function is further strengthened in consultation with statutory auditors for monitoring statutory and operational issues. Adherence to statutory compliance is a key focus area for entire leadership team of the Company.

FINANCIALPERFORMANCE

During FY19 our performance was impressive. In FY19, Our Revenue from the Operations for the year ended March 31, 2019 was 31.03 Crores representing an increase of 6.95 % over the previous year. Overall performance of company during the year was extremely appreciable and the Net Profit of company has reached to ` 43.25 Lakh compared to last year’s loss ` 34.54 Lakh registering a growth of 25.21%.

The company was able to reduce the borrowing from ` 15.83 Lakh last year to ` 12.79 Lakh this year. We have made steady progress in building a robust pipeline, strengthening capabilities and consolidating processes to build faster delivery. During FY19 Your Company has increase Property, Plant and Equipment of ` 39.70 Lakh. This is going to support our capacity building initiatives and help us reap benefits for the long-term. In FY19, we continued to grow at a market-leading pace. This performance has been supported by the agility of our supply chain and quality excellence of our products. Moreover, we undertook several initiatives to optimize processes in our existing manufacturing units to improve production.

HUMANRESOURCES

At Gujarat Terce Laboratories Limited, we are aware that our employees power the success of our Company and in turn, we are committed to empowering theirs. We believe that People management is probably one of the most important leadership skills, as it directly influences productivity, morale and motivation throughout the organization. In line with this strategy, we have structured ground-breaking and game-changing innovations for our employees. In order to make the organisation strong, progressive and dynamic; our

Company focusses on organisational development, employee engagement and talent management and retention. During the year, we focussed on improving productivity, people management skills, engagement and leadership skills of our employees, to make them leaders of tomorrow. Our approach to reward and recognition is quite transparent, meritocratic and market competitive, built on an ethical and values based performance culture which aligns the interests of our employees, shareholders and customers. The total employee strength of the Company at the end of financial year 2018-19 was 310 against 263 as at the end of financial year 2017-18, increased by 47 employees. Important factors that could make a difference to the Company’s operations include among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the government regulations, tax laws and other statutes and incidental factors.

DETAILSOFSIGNIFICANTCHANGES

i. Debtors Turnover : 6.81ii. Inventory Turnover : 3.53iii. Interest Coverage Ratio : 2.83iv. Current Ratio : 1.38v. Debt Equity Ratio : 0.80:1vi. Operating Profit Margin (%) : 1.87vii. Net Profit Margin (%) : 1.39

DETAILSOFANYCHANGE INRETURNONNETWORTHASCOMPARED TO THE IMMEDIATELY PREVIOUS FINANCIALYEAR:

During the year return on net worth is 3.99% compared to 3.32% immediately previous financial year. There is change during the year is 0.67% in return on net worth.

CAUTIONARYNOTE

The Management Discussion & Analysis Report may contain certain statement that might be considered forward looking within the meaning of applicable securities, laws and regulations. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statements as important factors could influence the Company’s operations such as Government policies, tax laws, political and economic development.



DIN: 00031187


®

To,The Members,GujaratTerceLaboratoriesLimited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Gujarat Terce Laboratories Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s Books, Papers, Minute Books, Forms and Returns filed and other Records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the financial year ended on 31st March, 2019 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by Company for the financial year ended on 31st March, 2019 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made there under;

2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;

3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

4. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

5. Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client – (not applicable);

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

Based on our verification, we have observed that the SEBI Regulations mentioned at (c), (d), (e), (g) and (h) are not applicable to the Company during the year as it has not:

i. Issued further Share Capital;ii. Listed Debt Capital;iii. Proposed to Delist its Equity Shares;iv. Proposed to Buy Back any of its Securities.

6. Specifically applicable Laws to the Company, as identified and confirmed by the Management:

Drugs and Cosmetics Act, 1940 and Rules 1945, The Drug Price Control Order, 2013; Food Safety and Standards Act, 2006, The Trade Marks Act, 1999, Sales Promotion Employees (Conditions and Services) Act, 1976, Importer Code (IEC Code), The Narcotic Drugs and Psychotropic Substances Act, 1985; The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954; Uniform Code for Pharmaceutical Marketing Practices (UCPMP) and Labour Laws, etc.

We have also examined compliance with the applicable clauses/regulations of the following:

a) Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS 1) and General Meeting (SS 2).

b) Clauses of Listing Agreements (applicable till November 30, 2015) entered into by the Company with BSE Limited and SEBI (Listing Obligations

ANNEXURE-BFORMNO.MR-3

SECRETARIALAUDITREPORTFORTHEFINANCIALYEARENDEDON31STMARCH,2019(Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration

Personnel) Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015)


and Disclosure Requirements) Regulations, 2015 (effective from December 01, 2015).

During the period under review the Company has complied with the provisions of the applicable Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

Wefurtherreportthat:

A. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review, were carried out in compliance with the provisions of the Act;

B. Adequate notice is given to all the Directors to schedule the Board Meetings, Agenda and detailed notes on Agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarification on the Agenda items before the meeting and for meaningful participation at the meeting;

C. As per the minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded;

D. There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with all the applicable laws, rules, regulations and guidelines;


Compliances of applicable Financial Laws including, Direct & Indirect Tax Laws by the Company has not reviewed in this

Audit Report; since the same has been subject to reviewed by the Statutory Auditor & other Designated Professionals.


Based on our review of Compliance Mechanism established by the Company and on the basis of Compliance Certificate(s) issued by the Managing Director and taken on record by the Board of Directors at their meeting(s), we are of opinion that, there are adequate systems and processes in place in the Company, which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

As informed the Company has responded appropriately to the notices received from various statutory/regulatory authorities including initiating action for corrective measures, wherever focused necessary.


During the audit period there are no events/actions having a major bearing on the Company’s affairs in pursuance of the above referred Laws, Rules, Regulations, Guidelines, etc. referred above.

PinakinShah&Co. Company Secretaries

PinakinShahPlace : Ahmedabad ProprietorDate : 18/05/2019 FCS: 2562; COP: 2932


®

ANNEXURE-C

FormNo.MGT-9

EXTRACTOFANNUALRETURNAsonthefinancialyearendedon31stMarch,2019

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and administration) Rules, 2014]

I. REGISTRATIONANDOTHERDETAILS:

i) CIN L28112GJ1985PLC007753ii) Registration Date 28/03/1985iii) Name of the Company Gujarat Terce Laboratories Limitediv) Category / Sub-Category of the Company Company having share capitalv) Address of the Registered Office and

contact details122/2 Ravi Estate, Bileshwarpura, Chhatral Gandhinagar, Gujarat – 382729Telephone No.- 079-48933706Email ID: [email protected], [email protected]

vi) Whether listed company Yes (BSE)vii) Name, Address and contact details of

Registrar & Transfer Agents (RTA), if anyBigshare Services Pvt. Ltd.1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis Makwana Road Marol, Andheri East Mumbai 400059Phone: 022 – 62638200 Email: [email protected]/[email protected]

II. PRINCIPALBUSINESSACTIVITIESOFTHECOMPANY:

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sr. No.

NameandDescriptionofmainproducts/services

NICCodeoftheProduct/service

%tototalturnoverofthecompany

1. Medical and Pharmaceutical Preparations *24 100

*As per National Industrial Classification 2004

III. PARTICULARSOFHOLDING,SUBSIDIARYANDASSOCIATECOMPANIES:

Sr.No.

NameandAddressoftheCompany CIN/GLN Holding/Subsidiary/Associate

%ofsharesheld

ApplicableSection

Not Applicable

IV. SHAREHOLDINGPATTERN(EquityShareCapitalBreakupaspercentageofTotalEquity):

(i) Category–wiseShareHolding

CategoryofShareholders

No.ofSharesheldatthebeginningoftheyear

No.ofSharesheldattheendoftheyear

%Changeduring

theyear

Demat Physical Total %ofTotal Demat Physical Total %of

Total

A. Promoters(1) Indian

a) Individual / HUF 1522300 - 1522300 20.52 1538473 0 1538473 20.73 0.21b) Central Govt. - - - - - - - - -c) State Govt (s) - - - - - - - - -d) Bodies Corporate 1075900 - 1075900 14.50 1075900 0 1075900 14.50 -e) Banks / FI - - - - - - - - -f) Any Other... - - - - - - - - -Sub-total(A)(1):- 2598200 0 2598200 35.02 2614373 0 2614373 35.23 0.21


CategoryofShareholders

No.ofSharesheldatthebeginningoftheyear

No.ofSharesheldattheendoftheyear

%Changeduring

theyear

Demat Physical Total %ofTotal Demat Physical Total %of

Total

(2) Foreign NRIs–Individuals - - - - - - - - -Other–Individuals - - - - - - - - -Bodies Corporate - - - - - - - - -Banks / FI - - - - - - - - -Any other - - - - - - - - -Sub-total (A) (2) :- - - - - - - - - -

TotalshareholdingofPromoter(A) = (A)(1)+(A)(2)

2598200 0 2598200 35.02 2614373 0 2614373 35.23 0.21

B. PublicShareholding1. Institutions

a) Mutual Funds - - - - - - - - -b) Banks / FI - - - - - - - - -c) Central Govt. - - - - - - - - -d) State Govt (s) - - - - - - - - -e) Venture Capital Funds - - - - - - - - -f) Insurance Companies - - - - - - - - -g) Flls - - - - - - - - -h) Foreign Venture

Capital Funds- - - - - - - - -

i) Others (specify)- Foreign Portfolio

Investor- Alternate

Investment Funds

- - - - - - - - -

Sub-total (B)(1):- - - - - - - - - -2. Non-Institutions

a) Bodies Corp.i) Indian 69167 1900 71067 0.96 83918 1900 85818 1.15 0.19ii) Overseas - - - - - - - - -

b) Individualsi) Individuals

shareholders holding nominal share capital upto ` 2 lakhs for Financial Year 2018-19

1612035 1279500 2891535 39.02 1926353 1241700 3168053 42.69 3.72

ii) Individual shareholders holding nominal share capital in excess of ` 2 lakhs for Financial Year 2017-18

1770278 0 1770278 23.86 1452263 100 1452363 19.57 (4.29)

c) Qualified Foreign Investors

- - - - - - - - -

d) NBFCs Registered with RBI

- - - - - - - - -

e) Others (specify)Trusts - - - - - - - - -Custodians / Clearing member

11316 0 11316 0.15 10818 0 10818 0.14 (0.01)

NRIs (REPAT) 76510 0 76510 1.03 87481 0 87481 1.18 0.15NRIs (Non REPAT) 1394 0 1394 0.02 1394 0 1394 0.02 -

Sub-total (B)(2):- 3540700 1281400 4822100 64.99 3562227 1243700 4805927 64.76 (0.23)Total Public Shareholding (B)=(B)(1)+(B)(2)

3540700 1281400 4822100 64.99 3562227 1243700 4805927 64.76 (0.23)

C. SharesheldbyCustodianforGDRs&ADRs

- - - - - - - - -

GrandTotal(A+B+C) 6138900 1281400 7420300 100 6160127 1243600 7420300 100 (0.23)


®

(ii) ShareholdingofPromoters

Sr. No.

NameofShareholders

Shareholdingatthebeginningoftheyear

Shareholdingattheendoftheyear %changeinshareholdingduringthe

yearNo.ofshares

%oftotalsharesofthe

Company

%ofsharespledged/

encumberedto total shares

No.ofshares

%oftotalsharesofthe

Company

%ofsharespledged/

encumberedto total shares

1 ABUNDANT TRADE LINK PRIVATE LIMITED

1075900 14.50 0 1075900 14.50 0 0.00

2 SHOBHANABEN N. PRAJAPATI

0 0 0 16173 0.22 0 0.22

3 NATWARBHAI PURSHOTTAMDAS PRAJAPATI

563440 7.59 0 563440 7.59 0 0.00

4 AMRITBHAI PURSHOTTAMDAS PRAJAPATI

31510 0.42 0 31510 0.42 0 0.00

5 MANJULABEN S. PRAJAPATI

927150 12.49 0 927150 12.49 0 0.00

6 AALAP NATUBHAI PRAJAPATI

200 0.0027 0 200 0.0027 0 0.00

TOTAL 2598200 35.02 2614373 35.23 0 0.2227

(iii) ChangeinPromoters’Shareholding(pleasespecify,ifthereisnochange)

Sr. No.

Particulars Shareholdingatthe beginningoftheyear

Shareholdingatthe endoftheyear

No.ofshares

%oftotalsharesofthe

company

No.ofshares

%oftotalsharesofthe

companyAt the beginning of the year 2598200 35.02 - -Date wise Increase / Decrease in Promoters Shareholding during the Year specifying the reasons for increase / decrease

*As per notes belowIncrease:Decrease:

16173 -

0.22-

At the End of the year - - 2614373 35.23

*Notes:

Sr. No.

Particulars Date Reason Shareholdingatthebeginningoftheyear

CumulativeShareholdingduringtheyear

No.ofshares

%oftotalshares

No.ofshares

%oftotalshares

1 SHOBHANABENN.PRAJAPATIAt the beginning of the year 01.04.2018 0 0 0 0 0Date wise Increase / Decrease in Promoters Shareholding during the Year specifying the reasons for increase / decrease

05.10.2018 Acquisition 0 0 4000 0.053919.10.2018 Acquisition 0 0 123 0.001526.10.2018 Acquisition 0 0 10000 0.135002.11.2018 Acquisition 0 0 2050 0.0276

At the end of the year 31.03.2019 16173 0.2180


(iv) ShareholdingPatternoftoptenShareholders(otherthanDirectors,PromotersandHoldersofGDRsandADRs):

Sr. No.

Foreachofthetop10shareholders

Shareholdingatthebeginningoftheyear

Increase/DecreaseinshareholdingduringtheYear

Shareholdingattheendoftheyear

NoofShares

%oftotalsharesofthe

Company

Date Increase/

Decreasein

Shareholding

Reason Noofshares

%oftotalsharesofthe

Company

1 NEEPABEN PARESHBHAI PATEL

168206 2.27 No Change 168206 2.27

2 PARESHKUMAR DAYALJIBHAI PATEL

157256 2.11 22/06/2018 690 Sell 156566 2.11

3 ARVINDBHAI CHAUDHARI 114800 1.55 No Change 114800 1.55

4 PRERIT JAYSUKHLAL DOSHI 0 0 20/07/2018 29561 Buy

12/10/2018 43553 Buy

26/10/2018 (7114) Sell

04/01/2019 7099 Buy

15/03/2019 (5699) Sell 67400 0.91

5 DHARMESH BHAILAL VAGHELA

50000 0.67 No Changes 50000 0.67

6 JINAL BHAVIKBHAI VORA 49979 0.67 No Changes 49979 0.67

7 RASHMI NAVINBHAI MEHTA 45128 0.61 45128 0.61

8 JYOTSANA P VORA 36250 0.49 36250 0.49

9 PRANAV PRAFULCHANDRA VORA (HUF)

36250 0.49 36250 0.49

10 BHAVIK PRAFULCHANDRA VORA (HUF)

36250 0.49 36250 0.49

TOTAL 694119 9.35 760829 10.26

(v) ShareholdingofDirectorsandKeyManagerialPersonnel:

Sr. No.

ForeachoftheDirectorsandKMP Shareholdingatthebeginningoftheyear

Changeduringtheyear

*Shareholdingattheendoftheyear

Noofshares

%oftotalsharesofthe

Company

Noofshares Noofshares

%oftotalsharesofthe

Company

1 NATWARBHAI PURSHOTTAMDAS PRAJAPATI 563440 7.59 No Changes 563440 7.59

2 AALAP NATUBHAI PRAJAPATI 200 0.0027 200 0.0027

3 AMRITBHAI PURSHOTTAMDAS PRAJAPATI 31510 0.42 31510 0.42

4 CHHAYABEN ASHWINBHAI SHAH 0 0.00 0 0.00

5 *GORDHANBHAI GANDABHAI PATEL 21900 0.30 21900 0.30

6 JAYANTIBHAI SHANKARLAL PRAJAPATI 9000 0.12 9000 0.12

7 VIPLAV SURYAKANT KHAMAR 0 0.00 0 0.00

8 SURENDRA KUMAR SHARMA 300 0.00 300 0.00

9 DILIPKUMAR GAJANANDABHAI NIKHARE 0 0.00 0 0.00

10 BHAGIRATH RAMHIT MAURYA 0 0.00 0 0.00

*Mr. Gordhanbhai Gandabhai Patel has resigned w. e. f. from 24th January, 2019


®

(vi) Indebtedness

Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amountin`)

SecuredLoansexcludingdeposits

UnsecuredLoans

Deposits Total Indebtedness

Indebtednessatthebeginningofthefinancialyear

i) Principal Amount 3387332 7913481 - 11300813

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total(i+ii+iii) 3387332 7913481 - 11300813

ChangeinIndebtednessduringthefinancialyear

Addition 403195127 1133667 - 404328794

Reduction 400067698 - 400067698

NetChange 3127429 1133667 - 4261096

Indebtednessattheendofthefinancialyear

i) Principal Amount 6514761 9047148 - 15561909

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total(i+ii+iii) 6514761 9047148 - 15561909

(vii) RemunerationofDirectorsandKeyManagerialPersonnel:

A. RemunerationtoManagingDirector,Whole-timeDirectorsand/orManager: (Amountin`)

Sr. No.

ParticularsofRemuneration NameofMD/WTD/Manager TotalAmount

NatwarbhaiP.Prajapati

AmritbhaiP.Prajapati

Aalap N. Prajapati

1. Gross Salary 18,08,242 4,07,242 7,40,242 29,55,726

a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961

b) Value of perquisites u/s 17(2) Income Tax Act, 1961

c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961

2. Stock Option - - - -

3. Sweat Equity - - - -

4. Commission

- as % of profit

- Others, specify.....

- - - -

5. Others, please specify - - - -

Total (A) 18,08,242 4,07,242 7,40,242 29,55,726

Overall Ceiling as per the Companies Act, 2013

` 3,47,648/- Lakh (being 10% of the Net Profit of the Company calculated as per Section 198 of the Companies Act, 2013)


B. Remunerationtootherdirectors: (Amountin`)

Sr. No.

ParticularsofRemuneration NameofIndependentandNon–ExecutiveDirectors Total AmountChhayaben

AshwinbhaiShah

JayantibhaiShankarlalPrajapati

SurendrakumarPrakashchandra

Sharma

ViplavSuryakantbhai

Khamar

1. Independent Directors

• Fee for attending board committee meetings

• Commission

• Others, please specify

NIL2 Other Non-Executive Directors

• Fee for attending board committee meetings

• Commission

• Others, please specify

3 Total

4 Total Managerial Remuneration NIL

5 Overall Ceiling as per the Companies Act, 2013 (11% of the Net Profit excluding Sitting Fees)

` 3,82,413/-

C RemunerationtoKeyManagerialPersonnelotherthanMD/Manager/WTD (Amountin`)

Sr. No.

ParticularsofRemuneration KeyManagerialPersonnel

CFO CS TotalAmount

1. Gross Salary

a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961

b) Value of perquisites u/s 17(2) Income Tax Act, 1961

c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961

134000 291245 425245

2. Stock Option - - -

3. Sweat Equity - -

4. Commission - as % of profit- others, specify.....

- -

5. Others, please specify - - -

Total 134000 291245 425245


®

V. PENALTIES/PUNISHMENT/COMPOUNDINGOFOFFENCES:

(Amountin`)

Type SectionoftheCompaniesAct

BriefDescription

DetailsofPenalty/Punishment/Compounding

feesimposed

Authority(RD/NCLT/

Court)

A.COMPANY

Penalty

NIL

Punishment

Compounding

B.DIRECTORS

Penalty

NIL

Punishment

Compounding

C.OTHEROFFICERSINDEFAULT

Penalty NIL

Punishment

Compounding

ForandonbehalfoftheBoardGujaratTerceLaboratoriesLimited

NatwarbhaiP.PrajapatiPlace : Ahmedabad Chairman and Managing DirectorDate : 18/05/2019 DIN: 00031187


ANNEXURE-D

STATEMENTOFDISCLOSUREOFREMUNERATIONUNDER SECTION 197 OF THE COMPANIES ACT 2013 AND RULE 5(1) OF THE COMPANIES

(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

A. PARTICULARSOFREMUNERATION

I. Ratio of remuneration of each Executive Director to the median remuneration of Employees of the Company for the financial year 2018-19, the percentage increase in remuneration of Chairman & Managing Director, Managing Directors, Executive Directors, Company Secretary and CFO during the financial year 2018-19:

Sr. No.

NameofDirector/KMP Designation RatioofRemunerationofeachdirectortomedian

remunerationofemployees

Percentage(%)increaseinRemuneration

1 Natwarbhai P Prajapati Chairman and Managing Director 1:8.86 Nil

2 Amritbhai P Prajapati Whole Time Director 1:1.99 Nil

3 Aalap N. Prajapati Whole Time Director 1:3.63 Nil

3 Bhagirathi R. Maurya Chief Financial Officer 1:0.66 Nil

4 Dilipkumar G. Nikhare Company Secretary 1:1.43 Nil

Note:

a) The Non-Executive Directors of the Company are entitled for sitting fees. The detail of remuneration of Non-Executive Directors is provided in the Report on Corporate Governance and is governed by the Nomination and Remuneration Policy, as stated herein below. The ratio of remuneration and percentage increase for Non-Executive Directors remuneration is therefore not considered for the purpose above.

II.

Sr. No.

Particulars Details

1 % increase in the median remuneration of employee in the financial year 2018-19

21.43%

2 Total number of permanent employees on the rolls of the Company as on 31st March, 2019 (on standalone basis)

312

3 The median remuneration of employees of the Company during the year under review.

` 2.04 Lakhs

4 average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average percentile increase in the remuneration of all employees was 47.64 % for the FY 2017-18.The average percentile increase in the remuneration of Managerial Personnel was 66.67 % for the FY 2017-18.The comparison of increase in average percentiles between employees and Managerial was 19.02 %. The average increase in the remuneration of both, the managerial and employees was determined based on the overall performance of the Company. Further the criteria for remuneration of employees is based on the internal evaluation of key performance areas while the remuneration of the managerial personnel is based on the remuneration policy as recommended by the Nomination and Remuneration Committee and approved by the board of directors.

III. The Company affirms remuneration is as per the Remuneration Policy of the Company.


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ANNEXURE-E

ENERGYCONSERVATION,TECHNOLOGYABSORPTIONANDFOREIGNEXCHANGEEARNINGSANDOUTGO

A. CONSERVATIONOFENERGY

(i) Thestepstakenorimpactonconservationofenergy;

Electricity 2018-19 2017-18

Unit Consumption 94800 75060

Total Amount 760123 632883

Average Cost 7.73 8.43

Own generation: N.A. N.A.

(ii) The steps taken by the company for utilising alternate sources of energy: Nil

(iii) The capital investment on energy conservation equipments: Nil

B. TECHNOLOGYABSORPTION

a) Theeffortsmadetowardstechnologyabsorption:The Company continues to adopt and use the latest technologies to improve the productivity and quality of its services and products.

b) Thebenefitsderivedlikeproductimprovement,costreduction,productdevelopmentorimportsubstitution:The Company has not made any investment and taken any specific measure to reduce energy cost per unit. However, it intends to conserve energy for future generation.

c) Incaseofimportedtechnology(importedduringthelastthreeyearsreckonedfromthebeginningofthefinancialyear): There is no technology imported during last three years as The Company’s operations do not require significant import of technology.

(iv) The expenditure incurred on Research and Development:Nil

C. FOREIGNEXCHANGEEARNINGANDOUTGO

(Amount in Lakhs)

Particulars 2018-19 2017-18

Earning: Export in terms of actual inflows 14.17 9.85

Outgo: Imports in terms of actual outflows ---- -----


NatwarbhaiP.PrajapatiPlace : Ahmedabad Chairman & Managing DirectorDate : 18/05/2019 DIN: 00031187


®

CORPORATEGOVERNANCEREPORTAt Gujarat Terce Laboratories Limited, the Corporate Governance is about creating the value of all stakeholders, accountability and fairness towards stakeholders. This section on Corporate Governance forms part of the Annual Report to the shareholders. It is not mandatory to give this report in terms of Regulation 15(2) of the SEBI (LODR) Regulations, 2015. Corporate Governance is, essentially, a philosophy. It encompasses not only the regulatory and legal requirements, but also the voluntary practices developed by the company to protect the best interests of all stakeholders. However, in the harsh realities of day to day economic stress and competitive growth, corporate governance can only deliver on an avowed philosophy if there is a strong and sustainable framework.

1. COMPANY’SPHILOSOPHY&CODEOFGOVERNANCE

The Company believes in conducting its affairs in a fair & transparent manner and maintaining the good ethical standards in its dealing with all its constituents. It is well recognised that an effective Board of Directors is a pre-requisite for strong and effective corporate governance. Our Board and Committees thereof are formed as per requirement of Companies Act, 2013 read with listing Regulation which oversees how the Management serves and protects the long-term interests of all our stakeholders.

CODEOFCONDUCTANDETHICS

The Board of Directors has amended the Code of Conduct and Ethics to align with the provisions of the Companies Act, 2013 and applicable SEBI Regulations. The confirmation from the Managing Director & CEO regarding compliance with the code by all the Directors and Senior Management forms part of the Report.

2. BOARDOFDIRECTORS

A. COMPOSITIONOFTHEBOARDOFDIRECTORS

The composition of the Board is in conformity with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) and Section 149 of the Companies Act, 2013 (Act).

The Company is fully compliant with the Corporate Governance norms in terms of constitution of the Board of Directors (“the Board”). The Board acts with autonomy and independence in exercising its strategic supervision, discharging its fiduciary responsibilities and ensuring that the management observes the highest standards of ethics, transparency and disclosure. The Board of Directors is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the Company and has vested with the requisite powers, authorities and duties. Every member of the Board, including the Non-Executive Directors, has full access to any information related to the Company.

The Company is managed by the Board of Directors in coordination with the Senior Management team. As on 31st March, 2019, the Company has seven (7) Directors on its Board out of which three (3) are Executive Directors and four (4) are Independent Directors including one Woman Director. The Board periodically evaluates the need for change in its composition and size. The Board’s actions and decisions are aligned with the Company’s best interests. It is committed to the goal of sustainably elevating the Company’s value creation.


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®

None of the Directors is a director in more than 20 Companies and more than 10 public limited Companies, in terms of Section 165 of the Companies Act, 2013. Also, none of the Directors is a member of neither more than 10 Committees, nor acts as Chairman of more than 5 Committees across all Companies in which they are Directors, as required under Regulation 26 of the Listing Regulation. The Independent Directors fulfill the requirements stipulated in Regulation 25(1) of the Listing Regulations.

B. BOARDMEETINGS

The gap between two Board meetings did not exceed four months. The schedule of Board/Committee meetings are communicated in advance to the directors/committee members to enable them to plan their schedules and to ensure their meaningful participation in the meetings.

The Board met Eight times in financial year details of which are summarized as below:

Sr. No. DateofMeeting BoardStrength No.ofDirectorsPresent1 29/05/2018 7 72 10/08/2018 7 73 01/10/2018 7 74 27/10/2018 8 85 17/12/2018 8 76 11/02/2019 7 7

In addition Mr. Jayantibhai Prajapati, Mr. Viplav Khamar, Mr. Surendrakumar Sharma and Mrs. Chhayaben Shah- independent directors of the Company met exclusively in the last quarter of the financial year i.e. on 11/02/2019.

C. Relationship between Directors:Mr. Natwarbhai Prajapati and Mr. Amritbhai Prajapati are brother. Mr. Aalap Prajapati is a son of Mr. Natwarbhai Prajapati. No other Director is related to any other Director on the Board.

D. No.ofSecuritiesheldbynon-executivedirectorason31stMarch,2019

Mr. Jayantibhai Prajapati – 9000 equity sharesMr. Surendrakumar Sharma – 300 equity sharesMrs. Chhayaben Ashwinbhai Shah – NilMr. Viplav Suryakantbhai Khamar - Nil

E. IndependentDirectors: The Independent Directors, who are from diverse field of expertise and have long standing experience and expert knowledge in their respective fields are very relevant as well as of considerable value for the company’s business. As a part of familiarization programmes as required under Listing Regulations, the Directors have been appraised during the Board Meetings about the amendments to the various enactments viz., Companies Act, 2013 (the Act), Listing Regulations, Code of Conduct for Prevention of Insider Trading and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information etc.

During the year, a separate meeting of the Independent Directors was held on February 11, 2019 without the presence of Executive Directors / Managing Director / Management to discuss the matter as required/agreed amongst them.

Further familiarization programs and the terms & conditions of appointment of the Independent Directors as required under the Companies Act, 2013 & Listing Regulations are updated on the Company’s website at www.gujaratterce.com

F. Formal annual evaluation: The Board of Directors, Nomination & Remuneration Committee and Independent Director has carried out an annual evaluation of its own performance, its Committees and individual Directors pursuant to the requirements of the Act and the Listing Regulations.


The Board has identified the following skill set with reference to its Business and Industry which are available with the Board:

NameoftheDirector Expertiseinspecificfunctionalarea

Mr. Natwarbhai Prajapati General Corporate Management

Mr. Aalap Prajapati Marketing, Entrepreneur, Business & Corporate Planning and Strategy

Mr. Amritbhai Prajapati Factory Management

Mrs. Chhayaben Ashwinbhai Shah Marketing and Capital Markets

Mr. Jayantibhai S. Prajapati, Communication and Capital Markets

Mr. Viplav Khamar Marketing and Production

G. Weblink

http://gujaratterce.in/Codes-and-Policies - For below Policies:

• Code of conduct for director and senior management• Criteria of making payments to non-executive directors• Policy on Related Party Transaction• Policy on Familiarization Programme for Independent Directors• Policy on Materiality• Preservation of Documents and Archival Policy• Terms and condition for Appointment of Independent Director• Nomination and Remuneration Policy• Policy on code of fair Disclosures• Policy and Procedures for inquiry in case of leak of UPSI• Risk Management Policy• Whistle Blower Policy• Code of conduct as per SEBI (PIT) Regulations, 2015• Policy on Prevention of Sexual Harassment

H. Matrixsettingoutthecoreskills/expertise/competenceoftheboardofdirectors

The board skill matrix provides a guide as to the core skills, expertise, competencies and other criteria (collectively referred to as ‘skill sets’) considered appropriate by the board of the Company in the context of its business and sector(s) for it to function effectively and those actually available with the Board. The skill sets will keep on changing as the organization evolves and hence the board may review the matrix from time to time to ensure that the composition of the skill sets remains aligned to the Company’s strategic direction.

The skill sets identified by the board along with availability assessment is as under:

CoreSkills/Experience/Competence ActualAvailabilitywithcurrentboard

Industryknowledge/experience

(a) Healthcare Industry Knowhow Available

(b) Creating value through Intellectual Property Rights Available

(c) Global Operations Available

(d) Value Spotting and Inorganic Growth Available

Technicalskills/experience

(a) Strategic planning Available

(b) Risk and compliance oversight Available

(c) Marketing Available

(d) Policy Development Available

(e) Accounting, Tax, Audit and Finance Available


®

CoreSkills/Experience/Competence ActualAvailabilitywithcurrentboard

(f) Legal Available

(g) Sales/ Customer Engagement Available

(h) Public Relations and Liasoning Available

(i) Information Technology Available

BehaviouralCompetencies

(a) Integrity & ethical standards Available

(b) Mentoring abilities Available

(c) Interpersonal relations Available

I. Confirmation on the independence of theIndependentDirectors

The Board of Directors hereby confirms that in their opinion, the Independent Directors fulfil the conditions specified in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are Independent of the Management.

BOARDCOMMITTEES

To enable better and more focused attention on the affairs of the Company, the Board delegates particular matters to committees of the directors set up for the purpose. These specialist committees prepare the groundwork for decision making and report at the subsequent Board meeting.

Presently the Board is assisted by various Committees - Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

Details on the role and composition of these committees including the number of meetings held during the financial year and the related attendance are provided below:

3. AUDITCOMMITTEE

The Company has complied with the requirements of Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013 as regards composition of Audit Committee.

Termsofreference

The terms of reference of Audit Committee as per Provisions of Companies Act, 2013 read with Listing Regulations inter alia includes the following:

i. FinancialStatements

a. Overseeing the Company’s financial reporting process and disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.

b. Discussion and review, with the management and auditors, the annual/ quarterly financial

statements before submission to the Board, with particular reference to:

• Matters required being included in the Directors Responsibility Statement to be included in the Board’s report in terms of sub-section 3(c) of section 134 of the Companies Act, 2013.

• Disclosure under ‘Management Discussion and Analysis of Financial Condition and Results of Operations.’

• Any changes in accounting policies and practices and reasons for the same.

• Major accounting entities involving estimates based on exercise of judgement by management.

• Compliance with listing and other legal requirements relating to financial statements.

• Disclosure of any related party transaction.

• Disclosure of contingent liabilities.

• Scrutinise inter corporate loans and investments.

• To approve the appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate.

ii. External Audit

• To have timely discussions with external auditors.

• To recommend the Board, the appointment, re-appointment, removal of the external auditors, fixation of audit fee and also approval for payment for any other services rendered by the external auditors.

• To evaluate auditor’s performance, qualification and independence.


iii. InternalAudit

• To review on a regular basis the adequacy of internal audit function.

• To review the appointment, removal, performance and terms of remuneration of the Internal Auditor.

• To review the regular internal reports to management prepared by the internal auditor, as well as management’s response thereto.

• To review the findings of any internal investigation by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussion with internal auditors any significant findings and follow-up thereon.

• To review internal audit reports relating to the internal control weaknesses.

iv. InternalControl

To review with the management, external and internal auditors, the scope of internal audit, adequacy of internal control systems and ensure adherence thereto and any other related issues.

All Members of the Audit Committee have accounting and financial management expertise. The Chairman of the Committee attended the 33rd Annual General Meeting held on 24th September, 2018 to answer the shareholders queries. The role of Audit Committee, the powers exercised by it pursuant to the terms of reference, and the information reviewed by it are in accordance with the requirements as specified in the Regulation 18 of SEBI (LODR) Regulations, 2015, Companies Act, 2013 and other applicable laws, if any. Apart from the above, the Audit Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time.

During the period under review, the Audit Committee met Five times on 29/05/2018, 10/08/2018, 27/10/2018, 17/12/2018 and 11/02/2019.

Composition of Audit Committee and attendance of each member during the meetings held in FY 2018-19 are given below:

Name Designation Category Noofmeetingsattendedduringtheyear2018-19

Mr. Jayantibhai Prajapati Chairman Non- Executive Independent Director 5

*Mr. Kanubhai Patel Member Non- Executive Independent Director 0

**Mr. Gordhanbhai Patel Member Non- Executive Independent Director 4

***Mr. Chhayaben shah Member Non- Executive Independent Director 4

****Mr. Surendra Kumar Sharma Member Non- Executive Independent Director 3

Mr. Viplav Khamar Member Non- Executive Independent Director 5

* Mr. Kanubhai S. Patel ceased to be member of audit committee w. e. f. 30/07/2018 due to resignation from the office of Directorship.

** Mr. Gordhanbhai Patel ceased to be member of Audit Committee w. e. f. 24/01/2019 due to resignation from the office of Directorship.

*** Mrs. Chhayaben Shah ceased to be member of Audit Committee w.e.f.11/02/2019

****Mr. Surendra Kumar Sharma become member of Audit Committee w. e. f. 10/08/2018.

4. NOMINATIONANDREMUNERATIONCOMMITTEE

The Company has complied with the requirements of Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Companies Act, 2013 as regards composition of Nomination and Remuneration Committee.

Termsofreference

The role of the Nomination and Remuneration Committee is to recommend to the Board, the remuneration package for the Managing/ Executive Directors and senior officials just one level below the Board. The committee functions as follows:

i. To formulate the criteria for determining qualifications, positive attributes and independence of a Director.

ii. To formulate criteria for evaluation of Independent Directors and the Board.


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iii. To identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in this policy.

iv. To carry out evaluation of every Director’s performance.

v. To recommend to the Board the appointment and removal of Directors and Senior Management.

vi. To recommend to the Board policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.

vii. Ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

viii. To devise a policy on Board diversity.

ix. To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable.

x. To perform such other functions as may be necessary or appropriate for the performance of its duties.

The roles and responsibilities of the Committee are in accordance with the requirements as specified in the Regulation 19 of SEBI (LODR) Regulations, 2015, Companies Act, 2013 and other applicable laws, if any. Apart from the above, the Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time.

The Committee has held Four Meetings during the FY 2018-19 i.e. 10/08/2018; 01/10/2018; 17/12/2018 and 10/02/2019.

Composition of Nomination and Remuneration Committee and attendance of each member during the meetings held in FY 2018-19 are given below:

Name Position Category Noofmeetingsattendedduringtheyear2018-19

*Mr. Surendra Kumar Sharma Chairman Non- Executive Independent Director 2

**Mr. Kanubhai Patel Member Non- Executive Independent Director 0

***Mr. Gordhanbhai Patel Member Non- Executive 3

Mr. Jayantibhai Prajapati Member Non- Executive Independent Director 4


* Mr. Surendra Kumar Sharma become member of Nomination and Remuneration committee w. e. f. 10/08/2018 and become Chairman w. e. f. 11/02/2019** Mr. Kanubhai S. Patel ceased to be member of Nomination and Remuneration committee w. e. f. 30/07/2018 due to resignation from the office of Directorship.*** Mr. Gordhanbhai Patel ceased to be member of Nomination and Remuneration Committee w. e. f. 24/01/2019 due to resignation from the office of Directorship.

PERFORMANCEEVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out the annual evaluation of its own performance, its Committees and Directors individually. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A consolidated summary of the ratings given by each Director was then prepared. The report of performance evaluation was then discussed and noted by the Board.

The performance evaluation of the Chairman and Managing Director and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

5. REMUNERATIONTODIRECTORS

a. Pecuniary Relationshipwith Non-Executive Directors: None of the Non-executive Directors has any pecuniary relationship or transactions with the company except as per requirements of Accounting Standard 24 are disclosed in the notes to accounts annexed to the financial statements.


b. Thecriteriaformakingpaymentstonon-executivedirector:

Mentioned in the below link of the Company websitehttp://gujaratterce.in/Codes-and-Policies

c. Disclosureswithrespecttoremuneration:

Salary, as recommended by the Nomination and Remuneration Committee and approved by the Board and the shareholders of the Company if Perquisites, retirement benefits and performance pay are also paid/ provided in accordance with the Company’s compensation policies, as applicable to all employees and the relevant legal provisions. Presently, the Company does not have a stock options scheme for its Directors.

Nameofthedirector servicecontracts(Termof

Appointment)

Remuneration&Perquisitesandotherallowance

(Amt.in `)

Commission SittingFees

NoticePeriod&Severance

Fees

Total

Mr. Natwarbhai P. Prajapati

upto 10/01/2022 1808442 0 0 30 days 1808442

Mr. Amritbhai P. Prajapati

upto 31/07/2021 407242 0 0 30 days 407242

Mrs. Chhayaben A. Shah

upto 31/03/2020 0 0 0 30 days 0

Mr. Jayantibhai S. Prajapati

upto 20/09/2024 (subject to approval

of Members)

0 0 0 30 days 0

Mr. Surendrakumar P. Sharma

upto 09/08/2023 0 0 0 30 days 0

Mr. Viplav S. Khamar upto 26/06/2022 0 0 0 30 days 0

Mr. Aalap N.Prajapati upto 31/03/2023 740242 0 0 30 days 740242

Remuneration is as per the compliance under section 197 of the Companies Act, 2013 and rules made thereunder.

6. STAKEHOLDERRELATIONSHIPCOMMITTEE

The Company has complied with the requirements of Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Companies Act, 2013 as regards composition of Stakeholders Relationship Committee.

Termsofreference

The terms of reference of the Committee include reviewing and redressing complaints from shareholders such as non-receipt of annual report, transfer of shares, issue of duplicate share certificates, etc.; to oversee and review all matters connected with transfers, transmissions, dematerialization, rematerialization, splitting and consolidation of securities; to oversee the performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services; and to perform any other function, duty as stipulated by the Companies Act, Securities & Exchange Board of India, BSE and any other regulatory authority or under any applicable laws, as amended from time to time.

The Committee has held Four Meetings during the FY 2018-19 i.e. 29/05/2018; 10/08/2018; 27/10/2018 and 11/02/2019.


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The Composition of Stakeholders Relationship Committee and attendance of each member during the meetings held in financial year 2018-19 are given below.

Name Position Category No.ofmeetingsattendedoutoffour(4)meetingheldduringthe

year2018-19

Mr. Jayantibhai Prajapati Chairman Non- Executive Independent Director 4

*Mr. Kanubhai Patel Member Non- Executive Independent Director 0

**Mr. Gordhanbhai Patel Member Non- Executive 3


***Mr. Aalap N. Prajapati Member Executive Whole Time Director 1

Mr. Surendra Kumar Sharma Member Non- Executive Independent Director 1

* Mr. Kanubhai S. Patel ceased to be member of Stakeholders Relationship Committee w. e. f. 30/07/2018 due to resignation from the office of Directorship.

** Mr. Gordhanbhai Patel ceased to be member of Nomination and Remuneration Committee w. e. f. 24/01/2019 due to resignation from the office of Directorship.

*** Mr. Aalap N. Prajapati become member of Stakeholder Relationship Committee w. e. f. 11/02/2019 Mr. Surendra Kumar Sharma become member of Stakeholder Relationship Committee w. e. f. 10/08/2018 Mr. Surendra Kumar Sharma ceased to be member of Stakeholder Relationship Committee w. e. f. 11/02/2019

In addition, Details of Shareholders’ Complaints received during the year are as follows:

Particulars No.ofComplaints

Investor complaints pending as at April 1, 2018 0

Investor complaints received during the year ended on March 31, 2019 1

Investor complaints resolved during the year ended March 31, 2019 1

Investor complaints pending as on March 31, 2019 1

The Committee considers and resolves the grievances of the security holders. The Committee also reviews the manner and time-lines of dealing with complaint letters received from Stock Exchanges/SEBI/Ministry of Corporate Affairs etc., and the responses thereto.

Mr. Dilipkumar G. Nikhare, Company Secretary is the Secretary to the Committee and the Compliance Officer appointed for the compliance of capital market related laws.

7. GENERALBODYMEETINGS:

1. SPECIALRESOLUTIONSPASSEDATTHELAST3ANNUALGENERALMEETINGS

Year VenueofAGM Date&Time No.ofspecialresolutionspassed

2015-16 Ravi Estate, Bileshwarpura, Chattral, Dist: Gandhinagar.

30/09/2016 at 10.00 a.m.

• Re-appointment of Mr. Amritbhai Prajapati (DIN 00699001), as Whole-time Director of the Company.


25/09/2017 at 10.00 a.m.

• Re-appointment of Mr. Natwarbhai P Prajapati (DIN 00031187), as a Managing Director, designated as a “CEO” of the Company

• Appointment of Mr. Viplav Suryakantbhai Khamar (DIN 07859737) as an Independent Director of the Company


24/09/2018 at 10.00 a.m.

• Regularisation of Mr. Aalap Prajapati as Director• Appointment of Mr. Aalap N. Prajapati (DIN: 08088327)

as Whole Time Director• Appointment of Mr. Surendra Kumar Sharma as

Independent Director of the Company


2. PassingofResolutionbyPostalBallot: None of special resolution was passed by way of postal ballot during the financial year ended March 31, 2019. As on date, the Company does not have any proposal to pass any special resolution by way of postal ballot.

8. MEANSOFCOMMUNICATION

Quarterly and Annual Financial Results of the Company were submitted to the Stock Exchanges immediately after the Board approves them. Thereafter, the same were published in The Business Standard-English, Jai Hind- Gujarati and also put the same on its website at www.gujaratterce.in Disclosures pursuant to various clauses of the Listing obligations and disclosure requirements are promptly communicated to Bombay Stock Exchange.

No formal presentation was made to the institutional investors or to the analysts during the year under review. Management Discussion and Analysis forms Part of the Annual Report, which is sent to the Shareholders of the Company.

9. GENERALSHAREHOLDERINFORMATION

a. Exclusivee-mailidforinvestorgrievances

Pursuant to Regulation 13(3) of the SEBI (LODR) Regulations, 2015, the following email id has been designated for communicating investor grievances: [email protected]

Person in-charge of the Department: Mr. Dilipkumar Nikhare

b. AnnualGeneralMeeting

The 34th Annual General Meeting will be held on Friday, 20th September, 2019 at 10:00 a.m. at 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar 382729

Financial Year: 2018-19First quarter results: July/August 2018Second quarter results: October 2018Third quarter results: January 2019Annual results: April/May 2019Annual General Meeting: August/September 2019

c. BookClosure

The Register of Members and the Share Transfer Register will be closed from Saturday, 14th September, 2019 to Friday, 20th September, 2019 (both days inclusive).

d. Dividend Payment Date - Not applicable

e. The equity shares of the Company are listed at: Bombay Stock Exchange Limited (BSE)

f. Annual Listing fees for the year 2019-20 have been paid to the stock exchange.

The Company has also paid the Annual Custodial fees to both the depositories.

g. Stock Codes: 524314

h. High/LowofmonthlyMarketPriceoftheCompany’sEquityShares

Month BombayStockExchanges(BSE) (In `Pershare)

HighPrice LowPriceApril, 2018 13.00 11.70May, 2018 12.06 10.95June, 2018 13.44 9.50July, 2018 11.50 9.65August, 2018 10.50 8.60September, 2018 9.39 7.81October, 2018 10.70 8.30November, 2018 10.24 8.25December, 2018 10.48 10.48January, 2019 9.96 7.10February, 2019 7.44 7.18March, 2019 9.13 9.10


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i. International Securities Identification Number (ISIN) : INE499G01013

j. Corporate Identity Number (CIN) : L28112GJ1985PLC007753

k. Registrar&TransferAgent

Bigshare Services Private Limited1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, MakwanaRoad Marol, Andheri East Mumbai 400059Tel: 022 62638200Fax: 022 62638299E-mail-: [email protected], [email protected]

l. ShareTransferSystem

As per the SEBI guidelines, the Registry and Share transfer activity is being handled by M/s Big Share Services Private Limited, Mumbai. The Share Transfer requests received in physical form are normally registered within 15 days from the date of receipt.

m. DistributionofShareholding(AsonMarch31,2019)

OnthebasisofShareheld:

SHAREHOLDING NOOFSHAREHOLDER

%OFHOLDERS SHAREAMOUNT %OFHOLDING

1-500 12863 94.7551 15848930 21.3589

501-1000 326 2.4015 2809260 3.7859

1001-2000 133 0.9797 2104210 2.8357

2001-3000 50 0.3683 1219510 1.6435

3001-4000 37 0.2726 1300910 1.7532

4001-5000 56 0.4125 2683540 3.6165

5001-10000 42 0.3094 2921170 3.9367

10001-9999999999 68 0.5009 45315470 61.0696

Total 13575 100 74203000 100

Onthebasisofcategory:

Category NoofSharesHolder

%ofShareholders No.ofshares %ofHolding

Clearing Members 5 0.0368 10818 0.1458

Corporate Bodies 42 0.3094 85818 1.1565

Group Companies 1 0.0074 1075900 14.4994

Non Resident Indian 13 0.0958 88875 1.1977

Promoter 5 0.0368 1538473 20.7333

Public 13509 99.5138 4620416 62.2672

Total 13575 100 7420300 100

n. DematerializationOfSharesAndLiquidity

Shares of the Company are traded compulsorily in dematerialized form and are available for trading with both the depositories with whom the Company has established direct connectivity. The Demat requests received by the Company are continually monitored to expedite the process of dematerialization. The Demat requests are confirmed to the depositories within 15 working days of receipt.

During the year, the Company has electronically confirmed Demat requests for 37700 equity shares. As on March 31, 2019, 83.24% of the total shares issued by the Company were held in dematerialized form.

• Liquidity: The Company’s Shares are liquid on BSE.


o. Outstanding GDRs/ADRs/Warrants or any convertible instrument as on 31st March-19: There were no outstanding GDRs/ADRs/Warrants or any convertible instrument as at end March-2019

p. Plant Location: 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar 382729

q. Compliance Officer: Mr. Dilipkumar Nikhare

r. AddressforCorrespondence:

All enquiries, clarification and correspondence should be addressed to the compliance officer at the following Addresses.

1) GujaratTerceLaboratoriesLimited

D-802, The First, B/h Keshavbaug Party Plot, Vastrapuar Ahmedabad-380051Tel – 079-48933706E-mail:[email protected], [email protected]

s. List of all credit ratings obtained by the entity along with any revisions thereto during the relevant financial year, for all debt instruments of such entity or any fixed deposit programme or any scheme or proposal of the listed entity involving mobilization of funds, whether in India or abroad: Not Applicable

10. OTHERDISCLOSURES

a. RelatedPartyTransactions

Transactions with related parties, as per requirements of Accounting Standard 24, are disclosed in the notes to accounts annexed to the financial statements. All the transactions with related parties were in the ordinary course of business and on arm’s length basis. In terms of Regulation 23 of Listing Regulations the Company is obtaining prior approval of the Audit Committee for entering into any transaction with related parties. The Audit Committee granted omnibus approval for certain transactions to be entered into with the related parties, during the year. Statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis Policy on dealing with Related Party Transactions can be viewed in the Company’s website at www.gujaratterce.com

b. Details of non-compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authorities or any matter related to capital markets during the last three years: No strictures or penalties have been imposed on the Company.

c. WhistleBlowerPolicy/ VigilMechanism: The Company has formulated Whistle Blower Policy in conformity with the Regulation 22 of the Listing Regulation and Section 177 of the Companies Act, 2013, the same has been amended in the Board Meeting held on 11th February, 2019 due to Amendment in SEBI (PIT) Regulation, 2015 and hosted on the company website at http://gujaratterce.in/Codes-and-Policies to provide a mechanism for directors and employees of the company to approach the Ethics Counselor/ Chairman of the Audit Committee of the Company for the purpose of dealing with instance of fraud and mismanagement, if any and also ensure that whistleblowers are protected from retribution, whether within or outside the organization: No personnel have been denied access to the Audit Committee, if any, during the year.

d. DisclosuresinrelationtotheSexualHarassmentofWomenatWorkplace(Prevention,ProhibitionandRedressal)Act,2013:The details of number of complaints filed and disposed of during the year and pending as on March 31, 2019 is given in the Directors’ report.

e. web link where policy for determining ‘material’ subsidiaries is disclosed: http://gujaratterce.in/Codes-and-Policies

f. web link where policy on dealing with related party transactions: http://gujaratterce.in/Codes-and-Policies

g. CommodityPriceRiskandHedgingactivities: Not Applicable

h. DetailsofutilizationoffundsraisedthroughpreferentialallotmentorqualifiedinstitutionsplacementasspecifiedunderRegulation32(7A):Not Applicable

i. AcertificatefromaCompanySecretaryinpracticethatnoneofthedirectorsontheboardofthecompanyhavebeen debarred or disqualified from being appointed or continuing as directors of companies by the Board/MinistryofCorporateAffairsoranysuchstatutoryauthority:The Certificate of Company Secretary in practice is annexed herewith as a part of the report.


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j. Wheretheboardhadnotacceptedanyrecommendationofanycommitteeoftheboardwhichismandatorilyrequired,intherelevantfinancialyear:Not Applicable

k. Totalfeesforallservicespaidbythelistedentity,onastandalonebasis,tothestatutoryauditorandallentitiesinthenetworkfirm/networkentityofwhichthestatutoryauditorisapart:Details relating to fees paid to the Statutory Auditors are given in Note 30 to the Standalone Financial Statements.

11. NonMandatoryRequirements:

The Company has adopted following Non Mandatory requirements of C & E of the Non-Mandatory requirements as provided in Part E of Schedule II of the Listing Regulations and not adopted A & B since they are discretionary requirements.

Discretionary Requirements:

• The Company does not maintain a separate office for the Non-Executive Chairman as Chairman

• There is no separate Posts of Chairman & CEO

• The quarterly financial results are published in the newspapers of wide circulation and are not sent to individual shareholders. Further, the financial results are available on the website of the Company and of the Stock Exchange where the shares of the Company are listed, i.e. BSE Ltd.

• The Auditors’ Opinion on the Financial Statements is unmodified.

• Internal Auditor reports to the Audit Committee.

12. Detailsof compliancewithmandatory requirements andadoptionof thenon-mandatoryRequirementsof ListingRegulation:

Mandatory Requirements:

During the year, The Company complies with all the mandatory requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with regard to Corporate Governance.

13. Thedisclosuresofthecompliancewithcorporategovernancerequirementsspecifiedinregulation17to27andclauses(b)to(i)ofsub-regulation(2)ofregulation46:

Particulars RegulationNumber

Compliancestatus(Yes/No/NA)

Independent director(s) have been appointed in terms of specified criteria of ‘independence’ and/or ‘eligibility’

16(1)(b) & 25(6) Yes

Board composition 17(1) Yes

Meeting of Board of directors 17(2) Yes

Review of Compliance Reports 17(3) Yes

Plans for orderly succession for appointments 17(4) Yes

Code of Conduct 17(5) Yes

Fees/compensation 17(6) Yes

Minimum Information 17(7) Yes

Compliance Certificate 17(8) Yes

Risk Assessment & Management 17(9) NA

Performance Evaluation of Independent Directors 17(10) Yes

Composition of Audit Committee 18(1) Yes

Meeting of Audit Committee 18(2) Yes

Composition of nomination & remuneration committee 19(1) & (2) Yes

Composition of Stakeholder Relationship Committee 20(1) & (2) Yes

Composition and role of risk management committee 21(1),(2),(3),(4) NA

Vigil Mechanism 22 Yes


Particulars RegulationNumber

Compliancestatus(Yes/No/NA)

Policy for related party Transaction 23(1),(5),(6),(7) & (8)

Yes

Prior or Omnibus approval of Audit Committee for all related party transactions

23(2), (3) Yes

Approval for material related party transactions 23(4) NA

Composition of Board of Directors of unlisted material Subsidiary 24(1) NA

Other Corporate Governance requirements with respect to subsidiary of listed entity

24(2),(3),(4),(5) & (6)

NA

Maximum Directorship & Tenure 25(1) & (2) Yes

Meeting of independent directors 25(3) & (4) Yes

Familiarization of independent directors 25(7) Yes

Memberships in Committees 26(1) Yes

Affirmation with compliance to code of conduct from members of Board of Directors and Senior management personnel

26(3) Yes

Disclosure of Shareholding by Non-Executive Directors 26(4) Yes

Policy with respect to Obligations of directors and senior management 26(2) & 26(5) Yes

Website 46(2)(b) to(i) Yes

DECLARATIONOFCOMPLIANCEWITHTHEGENERALTOCODEOFCONDUCTOFTHECOMPANY

As provided under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, I declare as follows:

1. The Company does have a General Code of Conduct approved by its Board of Directors, which is posted on its website www.gujaratterce.com and

2. All the members of the Board of Directors and Senior Management of the Company have individually submitted statements of affirmation of compliance with the said Code of Conduct for the financial year ended 31st March, 2019.



DIN: 00031187


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MD/CEO&CFOCERTIFICATION

Mr. Natwarbhai P. Prajapati (CMD), and Mr. Bhagirath R. Maurya (CFO) of the Company hereby certify to the Board that:

a) We have reviewed the Financial Statements for the year ended March 31, 2019 and that to the best of our knowledge and belief, we state that:

i. The said statements do not contain any false, misleading or materially untrue statements or figures or omit any material fact, which may make the statements or figures contained therein misleading;

ii. The said statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b) We further state that to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are fraudulent, illegal or violative of the Company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the Auditors and the Audit Committee:

i. Significant changes in internal control over financial reporting during the year, if any;

ii. significant changes in accounting policies during the year if any and that the same have been disclosed in the notes to the financial statements; and

iii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting.

Place : Ahmedabad NatwarbhaiP.Prajapati BhagirathR.MauryaDate : 18/05/2019 Chairman & Managing Director Chief Financial Officer

CERTIFICATE

Based on our verification of the registers, records, forms, returns and disclosures received from the Directors of Gujarat Terce Laboratories Limited having CIN L28112GJ1985PLC007753 and having registered office at 122/2 RAVI ESTATE, BILESHWARPURA, CHHTRAL, GANDHINAGAR 382729, GUJARAT (hereinafter referred to as ‘the Company’), produced before me/us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my/our opinion and to the best of my/our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me / us by the Company & its officers, I/We hereby certify that none of the Directors on the Board of the Company for the Financial Year ending on 31st March, 2019 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

PinakinShah&Co.Place : Ahmedabad Practising Company SecretaryDate : 18/05/2019 FCS 2562, C.P. NO 2932


AUDITORSCERTIFICATEONCOMPLIANCE

I have examined compliance of conditions of Corporate Governance by Gujarat Terce Laboratories Limited (the Company), for the year ended 31st March, 2019, as stipulated in Chapter IV of SEBI (LODR) Regulations, 2015 of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. My examination was limited to procedures & implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the Company.

In my opinion and to the best of my information and according to the explanations given to me and the representation by the Directors and the management, I certify that the Company has complied with the conditions of Corporate Governance as stipulated in Chapter IV of SEBI (LODR) Regulations, 2015.

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

PinakinShah&Co.Place : Ahmedabad Practising Company SecretaryDate : 18/05/2019 FCS 2562, C.P. NO 2932


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To the Members ofGujaratTerceLaboratoriesLimited

ReportontheFinancialStatements

We have audited the accompanying financial statements of GUJARAT TERCE LABORATORIES LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information

Management’sResponsibilityfortheFinancialStatements

The Company’s management is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income),cash flows and the changes in equity of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 evidences 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 financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors, 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 on the Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the financial position, of the Company as at March 31, 2019 and its financial performance (including other comprehensive income); and its cash flows and the changes in equity for the year ended on that date.

ReportonOtherLegalandRegulatoryRequirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

INDEPENDENTAUDITOR’SREPORT


2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;

(e) On the basis of the written representations received from the directors as on 31st March 2019 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019, from being appointed as a director in terms of section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 12 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For,USS&ASSOCIATESChartered Accountants

(UjalMehta)Proprietor

Place : Ahmedabad M. No. 112337Date : 18/05/2019 F.R.N. 122634W


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Annexure-AtotheAuditors’Report

The Annexure referred to in Independent Auditors’ Report to the members of Gujarat Terce Laboratories Limited on the financial statements for the year ended 31 March 2019, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(a) The Company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) (a) The inventories have been physically verified by the management during the year. In our opinion, the procedure for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of the business. .

(b) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public.

(vi) As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income- tax, Sales-tax, Custom duty, Value Added Tax, Goods and any other material statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2019, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, service tax, duty of customs, value added tax outstanding on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, sales tax, and value added tax have not been deposited by the Company on account of disputes:

NameofStatute Natureofdues AmountofDues

PeriodtoTheamountRelated

FromWhereDisputeisPending

Gujarat Sales Tax Re.Assessment ` 466886 /- A.Y.2003-04 Dep.Comm of SalesTax. (Tribunal)

Gujarat Sales Tax Re. Assessment ` 1068607/- A.Y.2004-05 Dep.Comm of Sales Tax. (Tribunal)

Income Tax Assessment(TDS)

` 141968 /- A.Y 2012.13 Commissioner of income - (Appeals) Dated.02/01/2018

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.


(ix) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

(xi) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

(xiii) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

(xv) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

(xvi) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.




Annexure-BtotheAuditors’Report

ReportontheInternalFinancialControlsunderClause(i)ofSub-section3ofSection143oftheCompaniesAct,2013(“theAct”)

We have audited the internal financial controls over financial reporting of Gujarat Terce Laboratories Limited (“the Company”) as of 31 March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’sResponsibilityforInternalFinancialControls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Acc ountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


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Auditors’Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MeaningofInternalFinancialControlsoverFinancialReporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

InherentLimitationsofInternalFinancialControlsoverFinancialReporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.





Particulars Note No.

Asat 31stMarch,2019

Asat 31stMarch,2018

ASSETS:Non-CurrentAssets Property, Plant & Equipment 3 20,603,591 18,771,528 Capital Work in Progress - - Goodwill - - Other Intangible Assets - - FinancialAssets: Investments 4 2,910,695 2,743,502 Loans 5 9,604,405 9,613,765 Other Financial Assets 6 741,044 561,831 Other Non-current Assets 7 14,092,352 14,574,424 Net Assets of discontinued operations 32 53,223,692 53,223,692

101,175,779 99,488,742 CurrentAssets Inventories 8 37,781,672 37,900,970 FinancialAssets: Investments - - Trade Receivables 9 45,284,832 45,818,247 Cash and Cash Equivalents 10 1,827,326 7,327,148 Loans 11 250,000 1,600,000 Other Current Financial Assets - - Other Current Assets 12 7,053,289 2,525,800

92,197,119 95,172,165 TOTAL 193,372,898 194,660,907 EQUITYANDLIABILITIES:Equity: Equity Share Capital 13 74,203,000 74,203,000 Other Equity 14 34,144,850 29,819,242

108,347,850 104,022,242 Non-CurrentLiabilities:Financial Liabilities: Borrowings 15 1,279,208 1,583,844 Other Financial Liabilities 16 9,173,000 8,923,000 Provisions 17 9,047,148 7,913,481 Deferred Tax Liabilities (Net) 18 (1,165,913) 1,014,305

18,333,443 19,434,630 CurrentLiabilities:Financial Liabilities: Borrowings 19 5,230,917 1,822,898 Trade Payables 20 28,106,981 33,233,636 Other Financial Liabilities 21 4,625,471 5,230,080 Other Current Liabilities 22 1,455,361 1,397,582 Provisions 23 26,247,835 28,905,610 Current Tax Liabilities (Net) 24 1,025,040 614,229

66,691,605 71,204,035 TOTAL 193,372,898 194,660,907 Significant Accounting Policies 2Notes to the Financial Statements 1 to 32

BalanceSheetasat31stMarch,2019(Amt.in`)

As Per Our Audit Report of Even Date Attached For and on behalf of the Board of DirectorsFor USS&AssociatesChartered Accountants

(UjalMehta) NatwarbhaiP.Prajapati AalapN.PrajapatiProprietor Chairman & M.D. WholeTime DirectorM. No. 112337 DIN : 00031187 DIN: 08088327F.R.N. 122634W

Place : Ahmedabad BhagirathR.Maurya DilipkumarNikhareDate : 18/05/2019 Chief Finance Officer Company Secretary


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Particulars Note No.

Fortheyearended 31March,2019

Fortheyearended 31March,2018

1 Revenue from operations 25 310,305,160 290,141,673

2 Other income 26 3,248,671 4,132,782

3 Total revenue 313,553,831 294,274,455

4 Expenses

(a) Cost of materials consumed 27a 33,203,503 24,431,869

(b) Purchases of stock-in-trade 80,198,197 81,601,702

(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade

27b 1,852,954 (829,240)

(d) Excise duty on sales - -

(e) Employee benefits expense 28 128,201,149 119,276,996

(f) Finance costs 29 2,538,665 2,260,220

(g) Depreciation ,amortisation and impairment expenses 3 2,113,516 1,851,482

(h) Other expenses 30 61,988,248 62,428,455

Totalexpenses 310,096,232 291,021,484

5 Profit/(Loss)beforetax 3,457,599 3,252,971

6 Taxexpense:

(a) Current tax expense for current year 1,312,204 998,320

(b) Deferred tax 18 (2,180,213) (453,297)

(868,009) 545,023

7 Profit/(Loss)fortheyear 4,325,608 2,707,948

OtherComprehensiveIncome(OCI):

Re-measurement losses on post employement defined benefit plans

- -

Income Tax effect - 3,648,803

Total - 3,648,803

Net loss/(gain) on Fair Value through OCI(FVTOCI) on equity securities

- -

Other Comprehensive income for the year (net of tax) - (875,417)

TotalComprehensiveincomefortheyear(netoftax) 4,325,608 3,454,773

8 Earningspershare(of`10/-each):

(a) Basic 31 0.58 0.47

(b) Diluted 31 0.58 0.47

Significant accounting policies 2

Notes forming part of the financial statements 1 to 32

StatementofProfitandLoss fortheyearended31March,2019(Amt.in`)


CashFlowStatementfortheyearended31March,2019Particulars Fortheyearended

31March,2019Fortheyearended 31March,2018

` ` ` ` A. Cashflowfromoperatingactivities Net Profit / (Loss) before tax 3,457,599 3,252,971 Adjustmentsfor: Provision For Tax and Earlier Years - - Depreciation, amortisation and impairment 2,113,516 1,851,482 (Profit) / loss on sale / write off of property, plant and

equipment 18,884 (1,364,312)

Net (Gain) / Loss on Foreign Currency Transactions (14,075) 11,078 Finance costs 2,538,665 2,260,220 Interest income (2,491,523) (2,277,461)

2,165,467 481,007 Operatingprofit/(loss)beforeworkingcapitalchanges 5,623,066 3,733,978 Changesinworkingcapital: Adjustmentsfor(increase)/decreaseinoperating

assetsandliabilities: Inventories 119,298 1,837,615 Trade Receivables 533,415 32,975,151 Other Assets (3,177,489) (2,229,050) Trade payables (5,126,655) 17,409,283 Other Liabilities (2,793,794) (6,978,185) NetChangesinworkingcapital: (10,445,225) 43,014,814 Cashgeneratedfromoperations (4,822,159) 46,748,792 Net income tax (paid) / refunds (1,312,203) (998,320) Netcashflowfrom/(usedin)operatingactivities(A) (6,134,362) 45,750,472 B. Cashflowfrominvestingactivities Capital expenditure on property, plant and equipment,

including capital advances, if any (3,970,328) (2,772,850)

Proceeds from sale of property, plant and equipment 5,859 1,507,792 Long Term Loans & Advances realised 312,219 21,555,988 Interest received 2,491,523 2,277,461 Change in non current assets of discontinued operations - (9,533,777) Investment (167,193) (1,943,002)

(1,327,920) Netcashflowfrom/(usedin)investingactivities(B) (1,327,920) 11,091,612 C. Cashflowfromfinancingactivities Proceeds from issue of share capital - - Proceeds from non-current borrowings (Net) 1,079,031 (51,673,689) Proceeds from current borrowings (Net) 3,408,019 - Net Gain / (Loss) on Foreign Currency Transactions 14,075 (11,078) Finance Costs (2,538,665) 1,962,460 (2,260,220) (53,944,987) Netcashflowfrom/(usedin)financingactivities(C) 1,962,460 (53,944,987)Netincrease/(decrease)inCashandcashequivalents(A+B+C)

(5,499,822) 2,897,097

Cash and cash equivalents at the beginning of the year 7,327,148 5,335,190 Cashandcashequivalentsattheendoftheyear 1,827,326 7,327,148





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STATEMENTOFCHANGESINEQUITY

a. EquityShareCapital:

No.ofShares Amountin`

EquitySharesofINR10/-eachissued,subscribedandfullyPaid-up:

As at April 1, 2017 7420300 74203000

As at March 31, 2018 7420300 74203000

AsatMarch31,2019 7420300 74203000

b. OtherEquity: (Amountin`)

Reservesandsurplus ItemsofOCI Total

SecuritiesPremium

GeneralReserve

Investmentsubsidy

RetainedEarnings

FVTOCI

As at April 1, 2017 15,000,000 3,737,174 438,458 10,409,730 (3,220,893) 26,364,469

Add: Profit for the year - - - 3,252,971 201,802 3,454,773

[Less]: Other comprehensive income

- - - - - -

Total Comprehensive income 15,000,000 3,737,174 438,458 13,662,701 (3,019,091) 29,819,242

Net Movement in FCMITDA - - - - - -

Transaction with owners in their capacity as owners:

-

Dividend - - - - - -

Corporate Dividend Tax on Dividend (Net of CDT credit)

- - - - - -

AsatMarch31,2018 15,000,000 3,737,174 438,458 13,662,701 (3,019,091) 29,819,242

Add: Profit for the year - - - 3,457,599 868,009 4,325,608

[Less]: Other comprehensive income

- - - - - -

Total Comprehensive income 15,000,000 3,737,174 438,458 17,120,300 (2,151,082) 34,144,850

Net Movement in FCMITDA - - - - - -

Transaction with owners in their capacity as owners:

-

Dividend - - - - - -

Corporate Dividend Tax on Dividend (Net of CDT credit)

- - - - - -

AsatMarch31,2019 15,000,000 3,737,174 438,458 17,120,300 (2,151,082) 34,144,850





1. COMPANYOVERVIEW:

Gujarat Terce Laboratories Limited [“the company”], a company limited by shares, incorporated and domiciled in India, operates as a pharmaceutical company. The registered office of the company is situated at 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar, Gujarat – 382729.

2. SIGNIFICANT ACCOUNTING POLICIES AND NOTES ONACCOUNTS

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

1. Basis of accounting and preparation of financialstatements:

The financial statements have been prepared in accordance with Indian Accounting Standards [Ind AS] notified under the Companies [Indian Accounting Standards] Rules, 2015, as amended and other relevant provisions of the Companies Act, 2013.

The financial statements have been prepared on historical cost basis except for the following assets and liabilities which have been measured at fair view or revalued amount:

i. Financial instrumentsii. Gratuity Liabilityiii. Contingent Liabilityiv. Assets held for sale and discontinued

operations

2. UseofEstimates:

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments are provided below. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

CriticalEstimates:

a. IncomeTaxes:

Significant estimates are involved in determining the provision for income taxes.

b. Property,plantandEquipments:

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Management reviews the residual values, useful lives and methods of depreciation of Property, Plant and Equipment at each reporting period end and any revision to these is recognized prospectively in current and future periods.

c. Employeebenefits:

Significant judgments are involved in making judgments about the life expectancy, discounting rate, salary increase, etc. which significantly affect the working of the present value of future liabilities on account of employee benefits by way of defined benefit plans.

d. Impairmentofassetsandinvestments:

Significant judgment is involved in determining the estimated future cash flows from the Investments, Property, Plant and Equipment and Goodwill to determine its value in use to assess whether there is any impairment in its carrying amount as reflected in the financials.

e. Productwarrantyandexpiryclaims:

Significant judgments are involved in determining the estimated stock lying in the market with product shelf life and estimates of likely claims on account of expiry of such unsold goods lying with stockiest.

3. ForeignCurrencyTransactions:

The transactions in foreign currencies are translated into functional currency at the rates of exchange prevailing on the dates of transactions.

Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year end exchange rates are recognized in the Statement of Profit and Loss.

4. RevenueRecognition:

a. Revenue is recognized to the extent that it is probable that the economic benefits will

Notestofinancialstatement


®

flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is shown net of returns, trade allowances, rebates, value added taxes and volume discounts.

b. Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the goods by the Company on behalf of the government. Accordingly, it is excluded from revenue.

c. The specific recognition criteria described below must also be met before revenue is recognized:

SaleofGoods:

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods.

InterestIncome:

Interest income from a financial asset is recognized when it is probable that economic benefit will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and the rate applicable.

Rent:

Rent is accounted on time basis as accrued by terms and conditions of the rent agreement.

OtherIncome:

Other income is recognized when no significant uncertainty as to its determination or realization exists.

5. TaxesonIncome:

a. CurrentTax:

Current tax is measured at the amount expected to be paid on the basis of reliefs and deductions available in accordance with the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current tax items are recognized in co-relation to the underlying transaction either in statement of profit and loss, Other Comprehensive Income or directly in Equity.

b. DeferredTax:

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates [and tax laws] that have been enacted or substantively enacted at the reporting date and are expected to apply in the year when the asset is realized or the liability is settled.. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities.

c. MATcreditentitlement:

Minimum Alternate Tax [MAT] paid in a year is charged to the Statement of Profit and Loss as current tax. The company recognizes MAT credit available as an asset based on historical experience of actual utilization of such credit and only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period i.e., the period for which MAT Credit is allowed to be carried forward. Such asset, if any recognized, is reviewed at each Balance sheet date and the carrying amount is written down to the extent there is no longer a convincing evidence that the company will be liable to pay normal tax during the specified period.

6. Plant,propertyandEquipment

Freehold land is carried at historical cost. All other items of Property, Plant and Equipment are stated at historical cost of acquisition/ construction less accumulated depreciation and impairment loss. Historical cost [Net of Input tax credit received/ receivable, if any] includes related expenditure and pre-operative & project expenses for the


period up to completion of construction/ assets are ready for its intended use, if the recognition criteria are met.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance costs are charged to the Statement of Profit and Loss during the reporting period in which they are incurred, unless they meet recognition criteria for capitalization under Property, Plant and Equipment.

On transition to Ind AS, the Company has elected to continue with the carrying value of all its Property, Plant and Equipment recognized as at April 1, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the Property, Plant and Equipment.

7. Depreciation:

Depreciation on tangible assets is provided on “straight line method” based on the useful lives as prescribed under Schedule II of the Companies Act, 2013.

Depreciation on additions of the fixed assets during the year is provided on pro-rata basis according to the period during which assets are used.

Depreciation on impaired assets is calculated on its reduced value, if any, on a systematic basis over its remaining useful life.

Low value items which are in the nature of assets (excluding immovable assets) and valuing upto ` 5000/- are not capitalized and charged to Statement of Profit and Loss in the year of acquisition.

8. BorrowingCost

Borrowing costs consist of interest and other borrowing costs that are incurred in connection with the borrowing of funds. Other borrowing costs include ancillary charges at the time of acquisition of a financial liability, which is recognized as per EIR method. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs that are directly attributable to the acquisition/ construction of a qualifying asset are capitalized as part of the cost of such assets, up to the date the assets are ready for their intended use.

9. ImpairmentofAssets:

The Property, Plant and Equipment and Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An Impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, the assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets [cash generating units]. Non-financial assets other than Goodwill that suffered an impairment loss are reviewed for possible reversal of impairment at the end of each reporting period. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

10. Inventory:

Inventories are valued as under:

Raw Material : At cost or realizable value whichever is less

Stock in Process : At estimated CostFinished Goods : At cost or realizable value

whichever is lessStores, Spares & other : At cost or realizable valueitems whichever is less

Raw material is accounted net of Excise Duty/GST.

11. CashandCashEquivalents:

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments.

12. Provisions, Contingent assets and contingentliabilities:

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed as follows:


®

Contingent liabilities not provided for:

Particulars 2018-19 2017-18Unutilized Letter of Credit - -Counter guarantees furnished by the Company in respect of Bank Guarantee

- -

Estimated amount of contracts to be executed on capital account and not provided for

- -

Claims against the Company not acknowledged as Debt* - -

*Claims against the Company not Acknowledged as Debt does not include Demand from Gujarat Sales Tax Authorities for payment of tax ` 15,35,493 for financial years 2002-03 and 2003-04 on completion of assessment proceedings of respective years. The company has filed an appeal before Deputy Commissioner of Sales Tax (Appeals). Company is contesting the demand and the management believes that the demand will not sustain in the Appellate Process. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company’s financial position.

The Income Tax Department had raised demands amounting ` 1,41,968 against the Company for AY 2012-13 against which the Company preferred an appeal.

13. EmployeeBenefits:

A. Short TermObligations:

Liabilities for wages and salaries, including leave encashment that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured by the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

B. LongTermEmployeeBenefitsObligations:

Gratuity:

The liabilities with regard to the Gratuity are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The present value of the gratuity obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to the market yields at the reporting period on government bonds

that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discounting rate to the net balance of the gratuity obligation and the fair value of plan assets. Such costs are included in employee benefit expenses in the Statement of Profit and Loss. Re-measurement gains or losses arising from experience adjustments and changes in actuarial assumptions are recognised immediately in the period in which they occur directly in “other comprehensive income” and are included in retained earnings in the statement of changes in equity and in the balance sheet. Re-measurements are not reclassified to profit or loss in subsequent periods.

The Company recognises the following changes in the net gratuity obligation as an expense in the Statement of Profit and Loss:

i. Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non routine settlements; and

ii. Net interest expense or income.

14. FinancialInstruments:

A. FinancialAsset:

Investment in financial assets is recognized at fair market value in the books of accounts and impairment, if any, is charged to Other Comprehensive Income accordingly.

B. FinancialLiabilities:

RecognitionandMeasurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

15. Earningspershare:

Basic earnings per share are calculated by dividing the net profit or loss [excluding other comprehensive income] for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share splits [consolidation of shares] that have changed the number of equity shares outstanding, without a corresponding


change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive income] for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

16. Expenditure:

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

17. Cashflowstatement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

18. Insuranceclaims:

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

19. AssetsheldforsaleandDiscontinuedOperations:

Company is working in pharmaceutical and metal division. Metal division has suspended its operations and it is classified as held for sale and discontinued operation. So depreciation on asset of metal division has not been provided during the year under review. As per valuation report, the fair value of the assets of the metal division is higher than the carrying amount in the balance sheet, So there is no impairment in the assets in respects of assets held for sale and discontinued operations.

20. Sundry creditors, sundry debtors, deposits, loans and advances recoverable in cash or kind are subject to confirmation.

21. DetailsofC.I.F.ValueofImports,ExpenditureinForeigncurrencyandearningsinforeigncurrencyareasunder:

Particulars 2018-19 2017-18(a) CIF Value of Imports:

Raw Material Nil NilMachineries Nil Nil

(b) Expenditure in foreign currency less commission and other expenses Nil Nil(c) Earnings in foreign currency

Export sales

14,17,125 9,84,752

22. DetailsofRawMaterialConsumed:

Particulars Ason31.03.2019 Ason31.03.2018%ofTotalValue Consumption(`) %ofTotalValue Consumption(`)

(a) Imported - - - -(b) Indigenous 100% 3,32,03,503 100% 2,44,31,869

23. RelatedParty: Information about related parties as required by Ind AS – 24 is as under:

Sr. No. RelatedParty Relationship NatureofTransaction Amount `1 N. P. Prajapati Chairman and M.D. Managerial Remuneration 18,08,2422 A P. Prajapati Director Managerial Remuneration 4,07,2423 Aalap Prajapati Director Managerial Remuneration 4,35,2424 Manjulaben S Prajapati Relative Salary 2,66,2425 Jyotsana Prajapati Relative Salary 2,72,2426 Shobhana Prajapati Relative Salary 2,66,2427 Aalap Prajapati Relative Salary 3,05,000

Sr. No.KeyManagement

PersonnelRelativesofKey

ManagementPersonnelTotal

1 Salary - 11,09,726 11,09,7262 Managerial Remuneration 26,50,726 - 26,50,726


®

Notesfo

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fina

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Particulars

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)NetBlock(A

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)

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.ason

01/04/20

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Add

ition

During

theyear

Sales

During

theyear

Balance

ason

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19

Op.

Bal

.ason

01/04/20

18

Prov

ision

During

theyear

Dep

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Balance

ason

31-0

3-20

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Ason

31-0

3-20

19Ason

31-0

3-20

18

Fact

ory

Land

1629

0029

00

1629

0029

00

00

016

2900

2916

2900

29

Fact

ory

& B

uild

ing

30.0

019

3261

710

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3261

7177

8734

733

3,37

20

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2071

911

2054

5211

5388

24

Vehi

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10.0

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80

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6,04

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9042

917

9138

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1

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3207

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20,7

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9656

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20.0

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3901

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8279

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6223

4070

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ries

20.0

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6908

5656

1,00

00

3725

1856

1342

3320

359,

198

00

1378

2518

2346

9338

2326

7536

Furn

iture

10.0

062

2639

43,

312,

781

51,0

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8817

536

6487

873

9,93

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7855

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,974

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)47

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5359

3970

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5100

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2346

8732

3025

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2625

735

6310

9320

6035

9118

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28

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2961

3727

7285

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3628

5231

5356

3230

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1851

482

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1528

1877

1528


Notesformingpartofthefinancialstatements(Contd...)

Note4Non-CurrentInvestment (Amountin`)

Particulars Asat 31stMarch,2019

AsAt 31stMarch2018

Investments(Atcost):Easy Advisory Services Pvt. Ltd. - - Samir Members Association - - Bank Deposits 2,910,695 2,743,502

Total 2,910,695 2,743,502

Note5Loans (Amountin`)


AsAt 31stMarch2018

Advances recoverable in cash or kind or for value value to be receivedUnsecured, considered good 9,604,405 9,613,765

Total 9,604,405 9,613,765 Notes:1. All the above loans have been given for business purpose.2. All thye above loans are repayable within a period of 3 to 5 years.3. None of the loans are interest bearing except Indian Innovatix Ltd.

Note6OtherFinancialAssets (Amountin`)


AsAt 31stMarch2018

(a) Securitydeposits Unsecured, considered good 995,347 816,134 Less: Discontinued Opearation (Note 32) 254,303 254,303

Total 741,044 561,831

Note7OtherNon-currentAssets (Amountin`)


AsAt 31stMarch2018

LoansandadvancesrecoverablecashorkindorforvaluetobereceivedUnsecured, considered good 8,784,327 8,147,154 Advance for Purchase of Capital Assets 4,532,948 5,202,193 Balances With Statutory Authorities 1,198,906 1,648,906 Less: Discontinued Operation ( note 32) 423,829 423,829

Total 14,092,352 14,574,424

Note8Inventories (Amountin`)Particulars Asat

31stMarch,2019AsAt

31stMarch2018(a) Raw materials (At cost) 3,909,045 4,678,385 (b) Work-in-progress (at estimated cost) 612,311 476,396 (c) Finished goods (other than those acquired for trading) (at cost or realisable value whichever is lower)

14,978,784 4,888,565

(d) Stock-in-trade (acquired for trading) (at cost or realisable value whichever is lower)

5,065,510 17,144,598

(e) Stores, spares & other items (at cost) 4,059,176 3,126,680 (f) Advertisement Article Stock (at cost) 9,156,846 7,586,346

Total 37,781,672 37,900,970


®


Notes: The above includes goods in transit as under: (Amountin`)Particulars Asat

31stMarch,2019AsAt

31stMarch2018Raw Material Nil Nil Stock in trade Nil Nil Finished goods Nil Nil Work-in-progress Nil Nil Amount recognised as an expense in statement of profit and loss resulting from write-down of inventories

- 765,832

Notes: Details of inventory of work-in-progress (Amountin`)Particulars Asat

31stMarch,2019AsAt

31stMarch2018PharmaDivisionAziter 500 Tablet - 95,367 Acolate Plus Tablet 247,450 - Codimol 100 Tablet 307,758 - Pentomax D Capsule 35,875 - Rebem DSR Capsule 21,228 - BP-AT Tablet - - Dicloter- P Tablet - - Pridilan 40 SR Tablet - - Nimeter A Tablet - - N-xime 200 Tablet - - Promexy HF Tablet - - Trihexy Tablet - - Acolate Sr Talet - 9,362 Almocef Dry Syrup - 59,534 Aminor Tablet - 59,964 Cefter Capsule (Export) - 109,139 Cefter-500 Capsule ( Export) - 105,363 Dicloter-P Tablet - 14,273 Teroid Tablet - 23,394 In-cold Tablet -

612,311 476,396 MetalDivision - -

- -

Note9Tradereceivables (Amountin`)Particulars Asat

31stMarch,2019AsAt

31stMarch2018Secured-ConsideredGoodSecured - Considered GoodOutstanding for less than 6 monthsUnsecured - Considered Good 39,133,513 38,987,254 Unsecured - Considered DoubtfulOutstanding for more than 6 monthsUnsecured - Considered Good 15,041,854 15,721,528 Unsecured - Considered Doubtful - 413,106

54,175,367 55,121,888 Less : Impairment Allowances - 413,106 Less: Discontinued Operation ( note 32) 8,890,535 8,890,535

Total 45,284,832 45,818,247



Note10Cashandcashequivalents (Amountin`)


AsAt 31stMarch2018

(a) Cashonhand 1,798,293 1,293,492 (b) Balanceswithbanks - (i) In current accounts 29,033 33,656 (ii) In EEFC accounts - - (iii) Share Issue Account - - (c) otherbankbalances - - Bank Deposits - 6,000,000

Total 1,827,326 7,327,148

Notes: (Amountin`)


AsAt 31stMarch2018

a) BalanceswithBanksinclude: i.] Balances in unclaimed dividend accounts Nil Nil ii.] Balances to the extent held as margin money deposits against Guarantee

Nil Nil

b) Bank deposits with maturity of more than 12 monthsc) Company keeps fixed deposits with the Nationalised/ Scheduled banks, which

can be withdrawn by the company as per its own discretion/ requirement of funds.

Nil Nil

d) There are no amounts of cash and cash equivalent balances held by the entity that are not available for use by the Company.

Nil Nil

Note11Loans (Amountin`)


AsAt 31stMarch2018

AdvancesgivenEmployees Unsecured, considered good 250,000 1,600,000

Total 250,000 1,600,000

Note12OtherCurrentAssets (Amountin`)


AsAt 31stMarch2018

Prepaid Expenses 2,427,693 1,105,764 Balances With Statutory Authorities 4,625,596 1,420,036

Total 7,053,289 2,525,800

Note13EQUITY (Amountin`)


AsAt 31stMarch2018

(a) Authorised 11000000 Equity shares of `10 each with voting rights 110,000,000 110,000,000(b) Issued,Subscribedandfullypaidup 7420300 Issued, Subscribed and fully paid up Equity shares of `10 each with

voting rights74,203,000 74,203,000

Total 74,203,000 74,203,000


®


Note2.1TheReconciliationofthenumberofsharesoutstandingissetoutbelow:


No.ofshares

AsAt 31stMarch2018

No.ofsharesEquity shares at the beginning of the year 7420300 7420300Add: Shares issued during the year 0 0Equity shares at the end of the year 7420300 7420300

Note2.2Detailsofsharesheldbyeachshareholderholdingmorethan5%shares:

Classofshares/Nameofshareholder Asat31stMarch,2019 Asat31stMarch,2018Numberofsharesheld

%holdinginthatclassof

shares

Numberofsharesheld

%holdinginthatclassof

sharesEquityshareswithvotingrightsNatwarbhai P. Prajapati 563440 7.59% 563440 7.59%Manjulaben Prajapti 927150 12.49% 927150 12.49%Abundant Tradelink Private Limited(Formerly known as Terce Finlease Pvt. Ltd.)

1075900 14.50% 1075900 14.50%

Note14OtherEquity (Amountin`)


AsAt 31stMarch2018

Securitiespremium* Opening balance 15,000,000 15,000,000 Add : Premium on shares issued during the year - - Less : Utilised during the year for: - - Closingbalance 15,000,000 15,000,000 Generalreserve* - - Opening balance 3,737,174 3,737,174 Add: Transferred from Investment subsidy 438,458 - Less: Utilised / transferred during the year for - - Closingbalance 4,175,632 3,737,174 InvestmentSubsidy - - Opening balance 438,458 438,458 Add: Additions / transfers during the year - - Less: transfers during the year to general reserve on completion of statutory

time limit 438,458 -

Closingbalance - 438,458 Surplus/(Deficit)inStatementofProfitandLoss - - Opening balance 10,643,610 7,188,837 Add: Adjustments through OCI - 746,825 Add: Profit / (Loss) for the year 4,325,608 2,707,948 Closingbalance 14,969,218 10,643,610

Total 34,144,850 29,819,242

Notes:* General Reserve and security premium can be used for the purpose and as per the guidelines prescribed as per Companies

Act, 2013.

** The company has elected to recognise changes in the fair value of certain investments in Equity securities in other Comprehensive Income. These changes are accumulated within the FVOCI reserve within equity.



Note15Borrowings (Amountin`)


AsAt 31stMarch2018

Termloans

From banks

Secured 979,208 1,283,844

LoansandadvancesfromDirectors&RelatedParties - -

Unsecured - -

LoansandadvancesfromOthers - -

Unsecured 300,000 300,000

Total 1,279,208 1,583,844

1. Loan from HDFC Bank is repayble in 60 Monthly equal installmets of ` 33268 starting from 07/01/2018. The outstanding amount as at march 31st, 2019 is 1283844.

Note16OtherFinancialLiabilities (Amountin`)


AsAt 31stMarch2018

Trade / security deposits received 9,173,000 8,923,000

Total 9,173,000 8,923,000

Note17Provisions (Amountin`)


AsAt 31stMarch2018

LongTermProvisions

Provision For Gratuity 9,047,148 7,913,481

Total 9,047,148 7,913,481


AsAt 31stMarch2018

a) Amountrecognizedinthebalancesheet:

Opening Net Liabilitiy

Current Provision of Gratuity 2678442 2439621

Long Term Provision of Gratuity 7913481 6797247

Total opening Liability 10591923 9236868

Expense Recognized in statement of profit and loss 1523926 1465795

Employee benefit paid directly by employer -747290 -110740

Liabilities/(Assets)recognizedinthebalancesheet 11368559 10591923

b) Expense/(income)recognizedinthestatementofProfit&Lossaccount

Current service cost 1084389 1052170

Interest cost on benefit obligation 831466 677986

Past Service Cost - Vested Benefit Recognized During the period 0 856251

Net acturial (gain)/ losses in the year -391929 -1120612

Amountincludedin"Employeebenefitexpense" 1523926 1465795


®


Note:18DeferredTaxLiabilityAs per AS 22 on Accounting for taxes on income issued by ICAI, the Company has provided deferred tax liabilities as on 31st March, 2016. The components of deferred tax liability for the current financial year are:

(Amountin`)

DeferredTaxLiability DeferredTaxLiability/(assets)

asat1.4.2018

Currentyearchange/(credit)

DeferredTaxLiability/(assets)

asat31.3.2019

(A) Difference between book and Tax depreciation 1,467,602 322,315 1,789,917

Tax liability on Deferred Revenue Expenditure - - -

(A) 1,467,602 322,315 1,789,917

(B) Deferred Tax Assets- Tax - -

(B) 453,297 2,502,528 2,955,825

NetDeferredTaxLiability(A-B) 1,014,305 (2,180,213) (1,165,913)

Note19Currentborrowings (Amountin`)


AsAt 31stMarch2018

(a)Loansrepayableondemand

From banks

Secured 5,230,917 1,822,898

Total 5,230,917 1,822,898

Notes:

(i) Detailsofsecurityforthesecuredshort-termborrowings:

Loansrepayableondemandfrombanks:

1. Cash Credit A/c- Bank of Baroda

Working capital loan which is repayble on demand is secured by equitable Mortgage of Fctory Land & Building, Office Premises of the company and Residential Bungalow of Director Shri Natwarbhai P. Prajapati and hypothication of all the Plant & Machineries, movable fixed assets, stock, book debts & all the current assets of the company. Cash credit interest is charged with interest @ 10.85%.

Note20Tradepayables (Amountin`)


AsAt 31stMarch2018

Tradepayables:

Due to Micro & Small Enterprises 4,729,890 4,329,699

Other than Micro & Small Enterprises 23,377,091 28,903,937

Total 28,106,981 33,233,636



AsAt 31stMarch2018

DisclosureinrespectofMicro,SmallandmediumEnterprise:

a) Prinicipal amount remaining unpaid to any suppliers as at year end - -

b) Interest due thereon - -

c) Amount of interest paid by the company in terms of section 16 of the MSMED Act, along with the amount of the payment made to the supplier beyond the appointed day during the year

- -

d) Amount of the interest due and payable for the year of delay in making payment (which have been but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act

- -

e) Amount of interest accrued and remaining unpaid at the end of the accounting year

- -

f) Amount of further interest remaining due and payable in succeding years - -

The above information has been complied in respect of parties to the extent to which they could be indentified as Micro, Small and Medium Enterpris on thr basis of information available with the company.

- -

Note21Otherfinancialliabilities (Amountin`)


AsAt 31stMarch2018

Current maturities of long-term debt 304,636 280,590

Interest accrued on trade /security deposits 607,500 350,218

Creditor for Expense 3,713,335 4,599,272

Total 4,625,471 5,230,080

Note22Othercurrentliabilities (Amountin`)


AsAt 31stMarch2018

Statutory remittances (Contributions to PF and ESIC, Excise Duty, VAT, Service Tax,TDS Patable etc.)

1,079,960 1,191,100

Advances from customers 410,291 241,372

Less: Discontinued operation( Note 32) 34,890 34,890

Total 1,455,361 1,397,582

Note23Provisions (Amountin`)


AsAt 31stMarch2018

Provision for Employee Benefits 25,784,620 28,395,380

other provisions 463,215 510,230

Total 26,247,835 28,905,610


Note20Tradepayables[Contd...] (Amountin`)


®


Note24CurrentTaxLiability (Amountin`)


AsAt 31stMarch2018

Provision for tax (net off Advance taxes) 1,025,040 614,229

Total 1,025,040 614,229

Note25Revenuefromoperations (Amountin`)

Particulars Year ended 31March,2019

Year ended 31March,2018

(a) Saleofproducts

Domestic Sales 308,888,035 289,143,873

Export Sales 1,417,125 984,752

(b) Otheroperatingrevenues - 13,048

Total 310,305,160 290,141,673

Note Particulars Year ended 31March,2019


(i) Saleofproductscomprises(BroadHeads):

Manufacturedgoods-PharmaDivision

Almocef Tablet 4,810,360 3,913,646

Codimol 200 Tablet 8,341,225 8,624,124

Almocef 200 Tab - ALF002 6,419,606 4,558,116

Tradedgoods-PharmaDivision

Acolate Kid Susp. 12,018,840 11,971,424

Acolate P Plus Tablet 10,556,241 21,040,260

Tynol MF forte Suspension 9,701,859 -

- -

(ii) Otheroperatingrevenuescomprise:

Rate Difference - 13,048

Total-Otheroperatingrevenues - 13,048

Note26Otherincome (Amountin`)



(a) Interest income (Note : 18.a) 2,491,523 2,277,461

(b) Miscellaneus Income 716,816 462,202

(c) Other non-operating income (net of expenses directly attributable to such income) (Note: 18.b)

40,332 1,393,119

Total 3,248,671 4,132,782



(Amountin`)

Note (26.a)



Interest on Bank Deposits 185,531 63,104 Interest on Other Loans 2,231,742 2,007,367 Interest on sales tax refund 74,250 196,797 Interest on overdue trade receivables - 10,193

Total-Interestincome 2,491,523 2,277,461

(Amountin`)

Note (26.b)



Discount Earned(Net) 21,334 15,259 Profit on Sale of Capital Assets - 1,364,312 Duty Drawback 18,998 13,548

Total-Othernon-operatingincome 40,332 1,393,119

Note27aCostofmaterialsconsumed (Amountin`)



Opening stock 4,678,385 995,963 Add: Purchases 32,434,163 28,114,291

37,112,548 29,110,254 Less: Closing stock 3,909,045 4,678,385

Costofmaterialconsumed 33,203,503 24,431,869 Materialconsumedcomprises:PharmaDivisionAzithromycin 3,580,851 358,171 Cefixime Trihydrate 7,318,197 1,909,207 Cefpodoxime Proxetil IP 6,250,265 1,468,966 Cefuroxime Axetil IP 3,602,926 716,151

Note27bChangesininventoriesoffinishedgoodsworkinprogressandstockintrade (Amountin`)



Inventories at the end of the year:Finished goods 14,978,784 4,888,565 Work-in-progress 612,311 476,396 Stock-of-trading goods 5,065,510 17,144,598

20,656,605 22,509,559 Inventoriesatthebeginningoftheyear:Finished goods 4,888,565 5,092,273 Work-in-progress 476,396 49,439 Stock-of-trading goods 17,144,598 16,538,607

22,509,559 21,680,319 Net(increase)/decrease 1,852,954 (829,240)


®


Note28Employeebenefitsexpense (Amountin`)



Salaries and wages 121,509,357 113,019,392 Contributions to provident and other funds 4,824,068 4,749,427 Staff welfare expenses 1,867,724 1,508,177

Total 128,201,149 119,276,996

Note29Financecosts (Amountin`)



(a)Interestexpenseon: (i) Borrowings 1,368,979 1,083,738 (iii) Others * 989,613 766,319 * includes interest on government and other dues(b)Otherborrowingcosts - Bank Charges 180,073 410,163

Total 2,538,665 2,260,220

Note30Otherexpenses (Amountin`)



Consumption of stores and spare parts 85,320 227,228 Consumption of packing materials 4,915,346 4,314,700 Power and fuel 759,300 632,883 Rent 1,395,392 1,204,320 Repairs and maintenance - Others 2,420,974 4,710,848 Insurance 1,579,381 1,209,321 Rates and taxes 1,687,801 1,650,640 Communication 3,200,471 2,867,271 Freight and forwarding 6,431,398 5,063,068 Sales commission 6,873,546 6,529,425 Legal and Professional Exp. 4,605,639 4,028,594 Sales Promotion Exp. 17,594,872 19,328,039 Travelling and Conveyance 1,460,326 1,284,684 Donations and contributions 100,000 90,250 Payments to auditors (Statutory & Tax Audit) 120,000 120,000 Miscellaneous expenses 8,758,482 9,167,184

Total 61,988,248 62,428,455

Note31EarningPerShare (Amountin`)



EarningPerSharei) Net Profit after tax as per Statement of Profit and Loss attributable to Equity

Shareholders 4,325,608 3,454,773

ii) Weighted Average number of equity shares used as denominator for calculating EPS 7,420,300 7,420,300 iii) Face Value per equity share 10 10 iv) Basic and Diluted Earnings per share 0.58 0.47



Note32:DiscontinuedOperations

On 1st January 2018, the board of directors of the company decided to discontinue the operations of the Metal Division whose operations were temporarily suspended by the management since last few years. At 31st March 2018, Metal division was classified as a discontinued operations. The metal division was earlier shown as segment is no longer presented in segment report.

TheresultsofMetalDivisionfortheyeararepresentedbelow: (Amountin`)

31stMarch2019

Revenue NIL

Expense NIL

Finance Costs NIL

Impairment Loss recognised on the re-measurement NIL

to fair value less costs to sell NIL

Profit/(Loss) before tax from a discontinued operation NIL

Tax (expenses) / Income: NIL

Related to current pre-tax profit/(loss) NIL

Related to measurement to fair value less costs of disposal NIL

Profit/(loss) for the year from a discontiued operation NIL

The major classes of assets and liabilities of Metal Division classified as held for sale and discontinued operations as at 31st March 2019 are as follows:

(Amountin`)

31stMarch2019

Assets

Property, Plant & Equipements (Note 3) 43689915

Other Financial Assets (Note 6) 254303

Other Non-current Assets (Note 7) 423829

Trade Receivables (Note 9) 8890535

Assets classified as held for sale 53258582

Liabilities

Other current liabilities (Note 22) 34890

Liabilities directly associated with the assets classified

as held for sale and discontinued operation 34890

Net Assets Directly associated with discontinued operations 53223692

Write-downofProperty,PlantandEquipment

At the time of classification of metal division as discontinued operations, the recoverable amount was estimated for certain items of property, plant and equipment and no impairment loss was identified.





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GujaratTerceLaboratoriesLimitedCIN: L28112GJ1985PLC007753

Registered Office: 122/2 Ravi Estate, Bileshwarpura, Chhatral, Dist. Gandhinagar – 382729Phone: 02764-233182 Email: [email protected] • Website: www.gujaratterce.in

ATTENDANCESLIP

Please complete this attendance slip and hand over at the entrance of the meeting hall. Joint Shareholders may obtain attendance slip on request.

REGD. F. NO.: **DP ID: CLIENT ID:

No. of Shares

Name :Address :

Name of Proxy:(To be filled in if Proxy Form has been duly deposited with the Company)

I hereby record my presence at the 34th Annual General Meeting of the Company being held on Friday, 20th September, 2019 at 10:00 a.m. at 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar – 382729

SignatureoftheShareholder/Proxy

** Applicable to the members whose shares are held in dematerialized form.

GujaratTerceLaboratoriesLimitedCIN: L28112GJ1985PLC007753

Registered Office: 122/2 Ravi Estate, Bileshwarpura, Chhatral, Dist. Gandhinagar – 382729Phone: 02764-233182 Email: [email protected] • Website: www.gujaratterce.in

PROXYFORMFormNo.MGT-11

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

Name of the member (s) :

Registered address :

E-mail Id :

Folio No/ Client Id :

DP ID :

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

1. Name : Address :

E-mail Id : Signature : or failing him

2. Name : Address :

E-mail Id : Signature : or failing him

3. Name : Address :

E-mail Id : Signature :

®


as my proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 34th Annual General Meeting of the Company, to be held on the 20th September, 2019 at 10:00 a.m. at 122/2, Ravi Estate, Bileshwarpura, Chhatral, Gandhinagar-382729 and at any adjournments thereof in respect of such resolutions as are indicated below:

ResolutionNo: Description OptionOrdinary Business For Against

1. Adoption of Financial Statements2. Appointment of Mr. Natwarbhai Parsottam Prajapati as a Director liable to retire by rotation

Special Business For Against3. Re-appointment of Mr. Jayantibhai Shankarlal Prajapati (DIN:02608139), as an Independent

Director of the Company4. To advance loan or give any guarantee or provide any security in connection with any loan

taken by any person in whom any of the Director of the Company is interested5. To approve the exemption in respect of loan to directors given in section 185(2) of The

Companies Act, 2013 and rules made thereunder6. Re-appointment of statutory auditor M/s. USS & Associates for financial year from

01/04/2019 to 31/03/20207. Alteration in the main object clause of memorandum of association of the company8. Deletion of the other objects clause of the Memorandum of Association9. Amendment of the Liability Clause of the Memorandum of Association

10. Amendment of the Capital Clause of the Memorandum of Association11. Adoption of New Set of Articles of Association

Signed this day of 2019Signature of shareholder (s) 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.

2. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the 34th Annual General Meeting.

3. It is optional to put a (Tick) in the appropriate Column against the Resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all Resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

AffixRevenue

Stamp

1. Electronic copy of the Annual Report 2019 and Notice of the Annual General Meeting (AGM) along with Attendance Slip and Proxy form are being sent to the members whose email address is registered with the Company / Depository Participant unless any member has requested for a hard copy of the same. Members receiving the electronic copy and attending the AGM can print copy of this Attendance Slip.

2. Persons attending the Annual General Meeting are requested to bring their copies of Annual Report.

If undeliverd please return to :

GujaratTerceLaboratoriesLimitedRegistered Office : 122/2, Ravi Estate,Bileshwarpura, Chhatral, Dist. Gandhinagar, GujaratCIN : L28112GJ1985PLC007753Email : [email protected] : www.gujaratterce.com

To,