DIRECTORS REPORT

To

The Members,

MADHUR INDUSTRIES LTD

AHMEDABAD

Your Directors have pleasure in presenting herewith their 42nd annual Report on the business and operation of the Company together with the Audited statements of Accounts of the Company for the year ended on 31st March 2015.

1. PERFORMANCE OF THE COMPANY (STANDALONE)

The company has earned a total income of Rs. 1081.76 Lacs in the current financial year 2014-15 against total income of Rs. 1009.54 Lacs in the immediately presceding financial year. The net profit of the Company for the year is Rs. 1.12 Lacs as compared to Rs. 8.22 Lacs in the previous year. The Company will try to achieve the performance in terms of profit in next year by making more initiatives in the activities of the company.

2. DIVIDEND

With a view to enlarge the business operations of the company the Directors did no recommend dividend for the current year.

3. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the Provisions Section 152 (6) of the Companies Act,2013 Mr. SHALIN PARIKH (DIN: 00494506) Director of the Company retire by rotation at the forthcoming annual General Meeting and being eligible offers himself for reappointment.

Pursuant to the Provisions Section 149 & 152 of the Companies Act, 2013, MRS BHAVNA MEHTA(DIN: 07002645) a Director of the Company be appointed as Independent Director for term of Five years with effect from 30 th September 2015.

The Terms of Managerial Remuneration paid of MR> VINIT PARIKH & MR. SHALIN PARIKH are revised as per as per the Schedule V as provided in  the newly enacted Companies Act, 2013.

Pursuant to the provisions Section 149 & 152 of the Companies Act,2013 Mr. NARENDRA CHAVDA(DIN: 02377055) & MR. VITTALA SHETTY (DIN:02380735) have been appointed as an Independent Directors for term of Five years with effect from 30th September,2014. Further, MRS BHAVNA MEHTA (DIN: 07002645) has been appointed as Woman Director with effect from 30th September 2014.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section 6 of section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement which is hereby enclosed as ‘ANNEXURE:I’

Also, Mr. VINIT PARIKH has been appointed chief Financial Officer with effect from 13th August 2014.

4. MEETINGS:

During the year, five Board Meetings and Four Audit Committee Meetings were duly convened and held. The following are the dates on which the said Board Meetings held:

May 30,2014, August 13,2014, November 14,2014, February 11,2015 & 24th March,2015.

The intervening gap between the Meetings was within the period prescribed under the Companies Act,2013.

5. COMMITTEES:

The Company has several Committees which have been established as a part of best corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statues.

The Board has constituted following Committees:

Audit Committee

Nomination and Remuneration Committee

Stakeholder’s Relationship Committee

Share Transfer Committee

The details with respect to the compositions, powers, roles terms of reference etc. of relevant committees are given in detail in the Report on corporate Governance of the company which forms part of this Annual Report.

6. EXTRACTS OF ANNUAL RETURN:

Pursuant to sub-section3(a) of section134 and sub-section(3) of section 92 of the Companies Act 2013,read with Rule 12 of the Companies ( Management and Administration) Rules 2014 the extracts of the Annual Return as at March 31,2015 forms part of this report as Annexure: II.

7. STATUTORY AUDITORS & AUDIT REPORT

Pursuant to the provisions of section 139 of the Companies Act,2013 M/s. V.S. MANWANI & CO. Chartered Accountants, (Membership No: 162129) have been appointed as statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of Forty Seventh Annual General Meeting of the company to be held for the year 2019-20 for a consecutive period of Five (5) financial years. For the said business necessary resolution is put to vote in this AGM,as stated in the Item No.3 of the notice of Annual General Meting, they are eligible for appointment to conduct statutory audit.

In this regard, the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of section 141 of the companies Act, 2013 Auditors comments on your company’s accounts for year ended March 31, 2015 are self explanatory in nature and do not require any explanation as per provisions of section 134 (3) (f) of the Companies Act, 2013.

There following qualification, reservation or adverse remark or disclaimer made by Statutory Auditor in its report.

1. Accounting Standard-15 for Retirement Benefits as the provision for Gratuity is not based on actuarial valuation but on other rationale basis while provision for other benefits such as Leave Encashment has not been made. The effect of the same cannot be quantified to the extent profit for the year and balance of Profit and Loss Account is overstated.

8. INTERNAL AUDIT & CONTROLS:

Your company had laid down set of standards, processes and structure which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively.

9. SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT:

Pursuant to Section 204 of the companies Act, 2013 your company had appointed M/s. A. SHAH & associates. Practicing Company Secretaries, Ahmedabad as its Secretarial Auditors to conduct the Secretarial Audit of the company for F.Y. 2014-15. The Report of the Secretarial Auditor for the F.Y. 2014-15 is annexed to this report as Annexure: III to the Directors’ Report.

Secretarial Auditors have qualified their report to the Members of the Company & in this connection the Board of Directors of the company has discussed the same at arm’s length and agreed to take the corrective steps on following qualifications:

1. The company is yet to comply with clause 47 (a) Listing Agreement.

2. The Company is not in compliance with pursuant to Section 203 (1) (ii) of company’s Act, 2013.

3. The Company is not in compliance with clause 41 (III) & 41 (VI) for the financial Year 2014-15.

4.The company is not in compliance with clause 54 of Listing Agreement.

5. The Company is yet to comply with clause 41(I) (h) with regards to peer review Audit Firm.

6. The Company is yet to comply with the section 138 of the companies Act, 2013 i.e Internal Auditor needs to be appointed to conduct the internal audit of he functions and activities of the company.

7. The Company is also listed on Ahmedabad Stock Exchange (ASE) but no Statutory compliance have been done with the Ahmedabad stock Exchange pursuant to Listing Agreement, Depositories Act and any other compliance as required to be done with the said stock Exchange.

8. The Company is not in compliance with the section 197 & 198 of the companies Act,2013 with regards to the payment of Managerial Remuneration to the Directors of  the Company.

9. The Company is not in compliance with clause 49 of Listing Agreement with regards to the composition of the Board of directors.

10. The Company is not in compliance with the section 188 of the companies Act, 2013 with regards to related Party Transactions as the supporting documents for the payment of Rent to the Related Parties are not provided by the Management of the Company.

11. The company is not in compliance with the Section 185 of the Companies Act, 2013 with regards to the loans and Advance granted to the Related Parties of the company.

Secretarial Auditor Report (MR-3) is self explanatory and therefore do not call for any further comments.

10. NOMINATION AND REMUNERATION POLICY:

The Board has on the recommendation of Nomination and Remuneration/ Compensation Committee framed a policy on directors’ appointment and remuneration of Directors including criteria for determining qualification positive attributes, independence of directors and remuneration for directors, Key Managerial Personnel and other employees. The policy is annexed to this report as Annexure: IV.

11. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors  pursuant to the provisions of the companies Act, 2013 and the corporate governance requirements as prescribed by securities and Exchange Board of India [SEBI] under Clause 49 of the listing Agreement.

The performance of the Boar was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning etc. the performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as composition of committees, effectiveness of committee meetings, etc

The Board and the Nomination and Remuneration Committee[NRC] reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and inputs in meetings etc. In addition, the chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated taking into account the  views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the board, its committees and individual directors was also discussed.

12. Fixed Deposits:

Your company has not accepted any fixed deposits from the public within the provisions of section 73 to 76 of the Companies Act,2013. Hence, the disclosures required as per Rule 8 ( 5) (v) & (vi) of the Companies (accounts) Rules, 2014 read with Section 73 to 76 of the companies Act, 2013 are not applicable to your company.

13. CORPORATE GOVERNANCE

The company believes that good Corporate Governance is a continuous process and it is our continuous endeavor to achieve good governance, by way of a conscious and conscientious effort whereby ensuring the truth, transparency, accountability and responsibility in all our dealings with all our stakeholders.

A separate section on Corporate Governance standards followed by your company as stipulated under Clause 49 of the listing Agreement is enclosed as Annexure to this Report. The Report on Corporate Governance also contains certain disclosures required under companies Act, 2013.

A Certificate from M/s. V.S. MANWANI &CO. Chartered Accountants, (Membership No: 162129) Ahmedabad, conforming compliance to the conditions of corporate governance as stipulated under clause 49 of the  Listing Agreement is annexed to this Report.

14. VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the companies Act, 2013 a Vigil Mechanism for directors and employees to report genuine concerns has been established.

16. FOREIGN EXCHANGE EARNINGS/ OUTGO:

The Company has earned the Foreign Exchange by the way of Export Sales to the tune of Rs. 6, 84,65,258/- during the Financial Year 2014-15.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions those were entered during the financial year were in ordinary course of the business of the company and were on arm’s length basis. There were no materially significant related party transactions entered by the company with promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the company.

All such related party Transactions are placed before the Audit Committee for approval.

The Particulars of every contract or arrangements entered into by the company with related parties referred to the sub-section (1) of section 188 of the companies Act, 2013 are disclosed in form no. AOC-2 Annexure the same forms part of this report pursuant to section 134 (3)(h) of the act read with rule 8(2) of the Companies (accounts) Rules, 2014.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

In terms of Provisions of Section 134(3) (g) of the Companies Act, 2013 the particulars of Loans, Guarantees or Investments under Section 186 is annexed hereto as Annexure: I and forms part of this report.

19.PARTICULARS OF EMPLOYEES REMUNERATION:

a.The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-section 197 of the Companies Act,2013 read with Rule 5 (1) of the companies [appointment and remuneration of Managerial Personne ] Rules, 2014 are forming part of this report as” Annexure VI”

b. The statement containing particulars of employees as required under section 197 (12) of the Companies Act, 2013 read with rule 5(2) of the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 is not provided as no employees is  paid remuneration of Rs. 5 lac per Month and Rs. 60 Lacs per Annum

20. HUMAN RESOURCES DEVELOPMENT:

 Your Company treats its “human Resources” as one of its most significant assets. The company continues its focus on retention through employee engagement initiatives and provides a holistic environment where employees get opportunities to realize their potential . A Number of programs that provide focused people attention are currently underway. Your company thrust is on the promotion of talent internally through job rotation and job enlargement. Te Company’s Health and safety Policy commits to provide a healthy and safe work environment to all employees.

21. CHANGE IN NATURE OF THE BUSINESS

There has been no change in the nature of business of the company during the year under review.

22. MANAGEMENT DISCUSSION AND ANALYSIS:

As per Clause 49 of listing agreement with the stock Exchanges, a separate section on Management discussion and Analysis outlining the business of the company is set out in annexure forming part of this report.

23. SIGNIFICANT OR MATERIAL ORDERS AGAINST COMPANY:

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

24. STATEMENT OF DIRECTORS’ RESPONSIBILITY:

Pursuant to requirement under 134(3) (c) of the Companies Act,2013.(ACT) Directors, confirm that:

a) in the preparation of the annual accounts for the year ended on 31st March 2015, the applicable accounting standards read with requirement set out under schedule III to the Act have been followed and there are no material departures from the same.

b) the Directors  have selected such accouting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31,2015 and of the profit of the company for the year ended on that date:

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

d) the directors had prepared the annual accounts on a going concern basis.

e)the Directors, had laid down internal financial controls to be followed by the company and that such internal financial control are adequate and are operating effectively and:

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate  and operating effectively.

25. ACKNOWLEDGEMENT

Your Directors wish to place on record their gratitude and sincere appreciation for the assistance and co-operation received from the financial institutions banks government authorities customers vendors and members during the year under review.

Your Directors would like to express a profound sense of appreciation for the commitment shown by the employees in supporting the company in its continued robust performance on all fronts.

ON BEHALF OF THE BOARD OF DIRECTORS

FOR MADHUR INDUSTRIES LTD

MR. VINIT PARIKH

MANAGING DIRECTOR

(DIN: 00494521)

PLACE: AHMEDABAD

DATE: 14/08/2015