Business Law in the Indian Pharmaceutical Industry

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It was set up in 1983 and the company started off with only 5 products to cure psychiatric illness. Sun Pharma is best known worldwide as the manufacture of specialty Active Pharmaceuticals Ingredients and formulations.

However, the company is also concerned with chronic treatments such as cardiology, psychiatry, neurology, gastroenterology, diabetology, and respiratory ailments. Active Pharmaceuticals Ingredients (API) include peptides, steroids, hormones, and anti-cancer drugs and their quality is internationally approved. The international offices of Sun Pharmaceuticals Industries Ltd. are located in British Virgin Islands, Russia, and Bangladesh. In India, the offices are in Vapi, Silvassa, Panoli, Ahmednagar, and Chennai. Dilip S. Shanghvi is the Executive Chairman…The "organized" sector of India's pharmaceutical industry consists of 250 to 300 companies, which account for 70 percent of products on the market, with the top 10 firms representing 30 percent. However, the total sector is estimated at nearly 20,000 businesses, some of which are extremely small. Approximately 75 percent of India's demand for medicines is met by local manufacturing

There are 3 major group companies of Sun Pharmaceuticals Industries are:

Caraco Pharmaceuticals Laboratories (based in Detroit, Michigan)

Sun Pharmaceuticals Industries Inc. (Michigan)

Sun Pharmaceuticals (Bangladesh)

In 1983, when Sun Pharma was set up, it only dealt with two cities in India. West Bengal and Bihar. In 1985, it started trading nationally and by 2000, Sun Pharmaceuticals made its way through the international market. Products used in cardiology were manufactured in 1987 and at that time, Monotrate was one of the first products that was launched and went on to become a best-seller. In 1993, Sun Pharmaceuticals Industries set up their own research institute and named it SPARC. SPARC became popular by generating knowledge and honing process development skills across the world. In 1994, Sun Pharma enrolled itself in the main stock exchanges in India. Subsequently in 1995, the first API manufacturing plant was established at Panoli to mark its standard beyond competition and also capture the international market.

Sun Pharmaceuticals shifted its headquarters in Mumbai as it is at the center of Indian commercial trade. The company began its first international acquisition with an amount of US$ 7.5 million, acquiring Caraco Pharm Lab in Detroit. After 8 acquisitions by 2000, Sun Pharma established another research center at Mumbai with an objective to sharpen skills for the US market. Later on, the company introduced a few more treatment areas which include orthopedics, gynecology, and oncology.

Sun Pharma's speedy acclivity is one of its best attributes that has made it gain an international status across the world. It is always updated with the latest data and is highly competent. Quality remains the prime concern and is maintained strictly by the team. There are 3 forms of medicines manufactured plied by the company: oral, injectable, and delivery-system based. Caraco Pharm and the Halol Pharm Lab have got the approval of UKMHRA and USFDA in recent years.

Sun Pharmaceutical Industries  Limited  

Regd Office: Sun Pharma Advanced Research Centre, Tandalja, Vadodara-390020  

Corporate Office : Acme Plaza, Andheri-Kurla Road, Andheri (E), Mumbai - 400059 

Consolidated Audited Financial Results for the Year ended March 31, 2010 

 

 

 

(Rs. in Lakhs) 

 

 

Year Ended 

Year Ended 

 

 

31.03.10 

31.03.09 

 

 

Audited 

Audited 

Income 

 

 

Net Sales / Income from Operations 

410,277  

427,230  

 

 

 

 

Total Income 

410,277  

427,230  

Expenditure 

 

 

(Increase) in Stock-in-Trade and Work-in-Progress 

               (3,244)  

                 (9,373)  

Consumption of Materials 

              99,323   

                 89,368   

Purchase of Traded Goods 

              13,704   

                  5,693   

Employees' Cost 

              48,221   

                 43,986   

Depreciation / Amortisation 

              15,331   

                 12,329   

Other Expenditure 

             115,992   

               111,168   

Total Expenditure 

289,327  

253,171  

Profit from Operations before Other Income, Interest & Tax 

120,950  

174,059  

Other Income 

                9,145   

                  8,684   

Profit before Interest & Tax 

             130,095   

               182,743   

Net Interest Income 

              11,389   

                 12,174   

Profit after Interest but before Tax 

             141,484   

               194,917   

  Tax Expense  

                6,786   

                  7,116   

Net Profit from Ordinary Activities after Tax before Minority Interest 

             134,698   

               187,801   

  Minority Interest   

                  (410)  

                  6,028   

Net Profit after Minority Interest 

             135,108   

               181,773   

Paid-up Equity Share Capital 

 

 

Equity Shares - Face Value Rs. 5/- each 

              10,356   

                 10,356   

Reserves excluding Revaluation Reserve 

      (As per last Audited Balance Sheet)  

             772,535   

               694,136   

 Earning Per Share - Rs. (Basic & Diluted)   

65.2  

87.8  

 

 

 

 

Public Shareholding 

 

 

No. of Equity Shares of Rs. 5/- each 

        75,150,451   

          75,154,439   

 

Percentage of Shareholding 

36.28  

36.29  

Promoters and Promoter Group Shareholding 

 

 

a) 

Pledged / Encumbered 

 

 

 

No. of Equity Shares of Rs. 5/- each 

             685,000   

               785,500   

 

Percentage of Equity Shares (as a % of the total share holding of promoters  and promoter group) 

0.52  

0.60  

 

Percentage of Equity Shares (as a % of the total share capital of the Company) 

0.33  

0.38  

b) 

Non-encumbered 

 

 

 

No. of Equity Shares of Rs. 5/- each 

      131,280,940   

        131,176,452   

 

Percentage of Equity Shares (as a % of the total shareholding of promoters and promoter group) 

99.48  

99.40  

 

Percentage of Equity Shares (as a % of the total share capital of the Company) 

63.39  

63.33  

Research & Development Expenses incurred 

              24,722   

                 31,

Sun Pharmaceutical Industries  Limited  

Regd Office: Sun Pharma Advanced Research Centre, Tandalja, Vadodara-390020  

Corporate Office : Acme Plaza, Andheri-Kurla Road, Andheri (E), Mumbai - 400059 

Consolidated Audited Financial Results for the Year ended March 31, 2010 

 

 

 

(Rs. in Lakhs) 

 

 

Year Ended 

Year Ended 

 

 

31.03.10 

31.03.09 

 

 

Audited 

Audited 

Income 

 

 

Net Sales / Income from Operations 

410,277  

427,230  

 

 

 

 

Total Income 

410,277  

427,230  

Expenditure 

 

 

(Increase) in Stock-in-Trade and Work-in-Progress 

               (3,244)  

                 (9,373)  

Consumption of Materials 

              99,323   

                 89,368   

Purchase of Traded Goods 

              13,704   

                  5,693   

Employees' Cost 

              48,221   

                 43,986   

Depreciation / Amortisation 

              15,331   

                 12,329   

Other Expenditure 

             115,992   

               111,168   

Total Expenditure 

289,327  

253,171  

Profit from Operations before Other Income, Interest & Tax 

120,950  

174,059  

Other Income 

                9,145   

                  8,684   

Profit before Interest & Tax 

             130,095   

               182,743   

Net Interest Income 

              11,389   

                 12,174   

Profit after Interest but before Tax 

             141,484   

               194,917   

  Tax Expense  

                6,786   

                  7,116   

Net Profit from Ordinary Activities after Tax before Minority Interest 

             134,698   

               187,801   

  Minority Interest   

                  (410)  

                  6,028   

Net Profit after Minority Interest 

             135,108   

               181,773   

Paid-up Equity Share Capital 

 

 

Equity Shares - Face Value Rs. 5/- each 

              10,356   

                 10,356   

Reserves excluding Revaluation Reserve 

      (As per last Audited Balance Sheet)  

             772,535   

               694,136   

 Earning Per Share - Rs. (Basic & Diluted)   

65.2  

87.8  

 

 

 

 

Public Shareholding 

 

 

No. of Equity Shares of Rs. 5/- each 

        75,150,451   

          75,154,439   

 

Percentage of Shareholding 

36.28  

36.29  

Promoters and Promoter Group Shareholding 

 

 

a) 

Pledged / Encumbered 

 

 

 

No. of Equity Shares of Rs. 5/- each 

             685,000   

               785,500   

 

Percentage of Equity Shares (as a % of the total share holding of promoters  and promoter group) 

0.52  

0.60  

 

Percentage of Equity Shares (as a % of the total share capital of the Company) 

0.33  

0.38  

b) 

Non-encumbered 

 

 

 

No. of Equity Shares of Rs. 5/- each 

      131,280,940   

        131,176,452   

 

Percentage of Equity Shares (as a % of the total shareholding of promoters and promoter group) 

99.48  

99.40  

 

Percentage of Equity Shares (as a % of the total share capital of the Company) 

63.39  

63.33  

Research & Development Expenses incurred 

              24,722   

                 31,

ANNUAL REPORTS OF THE COMPANY SUN PHARMA FOR PAST 3 YEARS :-

Financial Statements 2007-08-09

In compliance with Clause 49 of the Listing Agreement with Stock Exchanges, the Company submits the report on the matters

mentioned in the said Clause and lists the practices followed by the Company.

1. Company's Philosophy on Corporate Governance

The Company's philosophy on Corporate Governance is guided by strong emphasis on transparency, accountability, responsibility, fairness, integrity, consistent value systems, and delegation across all facets of its operations leading to sharply focused and operationally efficient growth. The Company's beliefs on Corporate Governance are intended at supporting the management of the Company for competent conduct of its business and ensuring long term value for shareholders, as well as customers, suppliers, employees and statutory authorities. The Company is committed to implement the standards of good Corporate Governance and endeavors to preserve and nurture these core values in all its activities with an aim to increase and sustain its corporate value through growth and

innovation.

2. Board of Directors

The present strength of the Board of Directors of your Company is six Directors.

Composition and category of Directors is as follows:

Category Name of the Director Inter-se Relationship

between Director

Promoter Executive Director Mr. Dilip S. Shanghvi Brother-in-law of

(Chairman and Managing Director) Mr. Sudhir V. Valia

Non-Promoter Executive Director Dr. T. Rajamannar -

(Whole - Time Director)

Non Executive & Mr. Sudhir V. Valia Brother-in-law of

Non Independent Director Mr. Dilip S. Shanghvi

Mr. S. Mohanchand Dadha -

Non Executive Independent Directors Dr. Goverdhan Mehta -

Dr. Andrea Vasella -

Number of Board Meetings held and the dates on which held: 8 Board meetings were held during the year, as against

the minimum requirement of 4 meetings.

Brief information on Directors proposed for reappointment:

The brief resume, experience and other details of the Directors, viz. Dr. T. Rajamannar and Mr. S. Mohanchand Dadha who retire by rotation at the ensuing Annual General Meeting, and are proposed to be reappointed is given as under:

(a) Dr. T. Rajamannar (46 years), is a M. Sc. from University of Madras, Ph.D in Organic Chemistry from IIT Madras and holds Post Doctoral qualification from University of Zurich, Switzerland. He has extensive experience in the pharmaceutical Industry.

Dr. T. Rajamannar was an employee of Sun Pharmaceutical Industries Ltd., since 1993 and has been transferred to SPARC pursuant to the Scheme of Arrangement for Demerger sanctioned by the Honourable High Court of Gujarat at Ahmedabad, and at present he is the Whole-Time Director of the Company. He has 15 research publications in international journals and over 100 patent applications filed, to his credit.

3. Code of Conduct

The Board of Directors have laid down a code of conduct for all Board members and senior management of t Company. All the Directors and senior management personnel have affirmed compliance with the code of conduct as approved and adopted by the Board of Directors and a declaration to this effect has been annexed to the Corporate Governance Report. The code of conduct has been posted on the website of the Company www.sunpharma.in.

4. Audit Committee

The Board of the Company, has constituted an Audit committee with effect from 4th June, 2007, which comprises of three independent non-executive Directors viz. Mr. S. Mohanchand Dadha, Dr. Goverdhan Mehta and Dr. Andrea Vasella. Mr. S. Mohanchand Dadha is the Chairman of the Audit Committee. The constitution of Audit Committee also meets with the requirements under Section 292A of the Companies Act, 1956. Mr. Sunil R. Ajmera the Company Secretary of the Company is the Secretary of the Audit Committee.

The Audit Committee is responsible for overseeing the Company's financial reporting process, reviewing the quarterly/ half yearly/ annual financial statements, reviewing with the management the financial statements and adequacy of internal audit function, recommending the appointment/ re-appointment of statutory auditors and fixation of audit fees,,reviewing the significant internal audit findings/ related party transactions, reviewing the Management Discussion and Analysis of financial condition and result of operations and also statutory compliance issues. The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company. Executives from the Finance Department, Representatives of the Statutory Auditors and Internal Auditors are also invited to attend the Audit Committee Meetings.

:

Name of the Director Chairman/Member No. of Audit Committee

Meetings attendence

Mr. S. Mohanchand Dadha Chairman 4

Dr. Goverdhan Mehta Member 4

Dr. Andrea Vasella Member 4

5. Remuneration Committee

The Company has formed a Remuneration Committee of its Board of Directors with effect from 23rd July, 2007. The Committee comprises of three non-executive and independent Directors Mr. S. Mohanchand Dadha, Dr. Goverdhan Mehta and Dr. Andrea Vasella as Members of the Committee. Mr. S. Mohanchand Dadha is the Chairman of the Committee.

6. Shareholders'/Investors' Grievance Committee

The Board of the Company had constituted a Shareholders'/Investors' Grievance Committee with effect from 4th June, 2007, comprising of Mr. Dilip S. Shanghvi, Dr. T. Rajamannar, Mr. S. Mohanchand Dadha as members with Mr. Sudhir V. Valia as the Chairman of the Committee. However, at the Board Meeting held on 5th September, 2007, Mr. S. Mohanchand Dadha and Mr. Dilip S. Shanghvi indicated their inability to continue as members of Shareholders/ Investors Grievance Committee, due to their other pre-occupations therefore resigned as members of the Committee. The Board of Directors therefore reconstituted the said Committee and presently the committee comprises of Dr. T. Rajamannar, Dr. Goverdhan Mehta, Prof. Dr. Andrea Vasella as members with Mr. Sudhir V. Valia, Non-Executive Director, as the Chairman of the Committee.

The Committee, inter alia, approves issue of duplicate certificates and oversees and reviews all matters connected with the transfer of securities. The Committee looks into shareholders' complaints like transfer of shares, non receipt of balance sheet, non receipt of declared dividends, etc. The Committee oversees the performance of the Registrar and Transfer Agents, and recommends measures for overall improvement in the quality of investor services. The Board of Directors has delegated the power of approving transfer of securities to M/s. Intime Spectrum Registry Ltd, and/or the Company Secretary of the Company.

7. Committee of Directors (Allotment)/Share Allotment Committee

Pursuant to clause 10.2 of the Scheme of Arrangement for Demerger sanctioned by the Honourable High Court of

Gujarat vide its order dated 01.03.2007 issued on 28.03.2007, wherein the Innovative Research & Development Unit stands vested in the Company, and as per the Supplementary Trust Deed dated 18.05.2007, entered into by the Company with Sun Pharmaceutical Industries Ltd. and Citicorp Trustee Co. Ltd., the Foreign Currency Convertible Bond.

8. Subsidiary Companies

The Company does not have any subsidiary.

42

9. General Body Meetings

(i) Location and time of the Annual General Meetings (AGM) held during the last 3 years, are as follows:

Year Meeting Location Date Time

2005-06 First AGM SPARC, Tandalja, Vadodara - 390 020 Gujarat 12-08-2006 10.30 A.M

2006-07 Second AGM Chandarva Hall, Welcom Hotel, 05-09-2007 11.45 A.M

R. C. Dutt Road, Vadodara - 390 007 Gujarat

(ii) Special Resolutions passed during the last three years

(a) At the First Annual General Meeting:

1. Authority for Inter Corporate Loans and Investment under Section 372A of the Companies Act, 1956, upto the

limits specified in the resolution.

2. Authority to the Board to borrow in excess of the aggregate Paid-up Capital and its Free Reserves pursuant to

section 293 (1) (d) of the Companies Act, 1956, upto the limits specified in the resolution.

3. Authority to the Board pursuant to section 293(1)(a) of the Companies Act, 1956, upto the limits specified in the resolution.

4. Authority to the Board pursuant to section 293(1)(e) of the Companies Act, 1956, upto the limits specified in the resolution.

NOTICE OF ANNUAL GENERAL MEETING

The Dividend on Equity and Preference shares of the Company as declared by the Company will be paid on or after 3rd October, 2003, to the Company's Equity and Preference shareholders whose names stand registered on the Company's Register of Members as Beneficial Owners as at opening of business as on 26th September, 2003 as per the list provided by National Securities Depository Limited and Central Depositories Services Limited in respect of the shares held in electronic form and as Members in the register of Members of the Company after giving effect to valid transfers in physical form lodged with the Company before 26th September, 2003.

4. At the Extra Ordinary General Meeting of the members of the Company held on Monday,1st September, 2003, the Members have approved, by way of Special Resolution, certain amendments to the Articles of Association of the Company relating to enabling the Company to implement any instruction from a Member (s) of the Company to waive/forgo his/their right to receive the dividend (interim or final) from the Company for any financial year. Thus the Members of the Company can now waive/forgo, if he/they so desire(s), his/their right to receive the dividend (interim or final) for any financial year effective from the dividend recommended by the Board of Directors of the Company for the year ended 31st March, 2003 on a year to year basis, as per the rules framed by the Board of Directors of the Company from time to time for this purpose. The Shareholder, if so wishes to waive /forgo the right to receive Dividend for the year ended 31st March, 2003 shall fill up the form and send it to the Company's Registrars on or before 26th September, 2003.The form prescribed by the Board of Directors of the Company for waiving/forgoing the right to receive

THE BOARD OF DIRECTORS OF THE COMPANY AT ITS MEETING HELD ON 1ST

SEPTEMBER, 2003 HAVE FRAMED THE FOLLOWING RULES UNDER ARTICLE 190 A OF THE ARTICLES OF ASSOCIATION OF THE COMPANY FOR EQUITY SHAREHOLDERS WHO WANT TO WAIVE/FORGO THE RIGHT TO RECEIVE DIVIDEND IN RESPECT OF FINANCIAL YEAR 2007-2008 OR FOR ANY YEAR THEREAFTER.

I A Shareholder can waive/forgo the right to receive the dividend (either final and/or interim) to which he is entitled, on some or all the Equity Shares held by him in the Company as on the Record Date/Book Closure Date fixed for determining the names of Members entitled for such dividend. However, the shareholders \cannot waive/forgo the right to receive the dividend (either final and/or interim) for a part of percentage of dividend on share(s).

II The Equity Shareholder(s) who wish to waive/forgo the right to receive the dividend for any year shall inform the Company in the form prescribed by the Board of Directors of the Company only.

III In case of joint holders holding the Equity Shares of the Company, all the joint holders are required to intimate to the Company in the prescribed form their decision of waiving/forgoing their right to receive the dividend from the Company.

IV The Shareholder, who wishes to waive/forgo the right to receive the dividend for any year shall send his irrevocable instruction waiving/forgoing dividend so as to reach the Company before the Record Date /Book Closure Date fixed for the payment of such dividend. Under no circumstances, any instruction received for waiver/forgoing of the right to receive the dividend for any year after the Record Date /Book Closure Date fixed for the payment of such dividend for that year shall be given effect to.

V The instruction once given by a Shareholder intimating his waiver/forgoing of the right to receive the

dividend for any year for interim, final or both shall be irrevocable and can not be withdrawn for that

particular year for such waived/forgone the right to receive the dividend. But in case, the relevant Shares are sold by the same Shareholder before the Record Date/Book Closure Date fixed for the payment of such dividend, the instruction once exercised by such earlier Shareholder intimating his waiver/forgoing the right to receive dividend will be invalid for the next succeeding Shareholder(s) unless such next succeeding Shareholder(s) intimates separately in the prescribed form, about his waiving/forgoing of the right to receive the dividend for the particular year

10. Disclosures

✦ No transaction of a material nature has been entered into by the Company with Directors or Management and their relatives, etc. that may have a potential conflict with the interests of the Company. The Register of contracts containing transactions, in which directors are interested, is placed before the Board of Directors regularly. The transaction with the related parties are disclosed in the Annexure A attached to the Annual Accounts.

✦ There were no instances of non-compliance by the Company on any matters related to the capital markets or penalties/ strictures imposed on the Company by the Stock Exchange or SEBI or any statutory authority during the last three financial years.

✦ In the preparation of the financial statements, the Company has followed the Accounting Standards as notified by Companies (Accounting Standard) Rules, 2006.

✦ The Company has laid down procedures to inform Board members about the risk assessment and its minimization, which are periodically reviewed to ensure that risk control is exercised by the management effectively.

✦ During the year under review, the Company has not raised funds through any public, rights or preferential issue.

✦ Adoption/ Non Adoption of the Non- mandatory requirements :

(i) The Company has not fixed a period of nine years as the tenure of Independent Directors on the Board of the

Company.

11. Means of Communication

✦ Website: The Company's website www.sunpharma.in contains a separate dedicated section 'Financials' where

shareholders information is available. Full Annual Report is also available on the website in a user friendly and

downloadable form. Apart from this, official news releases, detailed presentations made to media, analysts etc. are also displayed on the Company's website.

✦ Financial Results: The annual, half-yearly and quarterly results are regularly posted by the Company on its website www.sunpharma.in. These are also submitted to the Stock Exchanges in accordance with the Listing Agreement and published in all English Editions and Gujarati Edition of 'Financial Express'.

✦ Annual Report: Annual Report containing inter alia Audited Annual Accounts, Directors' Report, Auditors' Report, and other important information is circulated to Members and others entitled thereto. The Management's Discussion and Analysis (MD&A) Report forms part of the Annual Report.

✦ Corporate filing: Announcements, Quarterly Results, Shareholding Pattern etc. of the Company regularly filed by the Company, are also available on the website of The Bombay Stock Exchange Ltd. - www.bseindia.co.in, National Stock Exchange of India Ltd. - www.nseindia.co.in, and Corporate Filing & Dissemination System website - www.corpfiling.co.in.

12. General Shareholder Information

12.1 Annual General Meeting:

- Date and Time : Saturday, 6th September, 2008

at 11.15 am.

- Venue : Hotel Taj Residency, Akota Gardens, Akota,

Vadodara - 390 020, Gujarat.

12.2 Financial Calendar (tentative) : Results for quarter ending 30th June

2008 - Last week of July 2008.

: Results for quarter ending 30th September

2008 - Last week of October 2008.

: Results for quarter ending 31st December

2008 - Last week of January 2009.

: Audited Results for year ended 31st March

2009 - 3rd or 4th week of May 2009.

12.3 Details of Book Closure For Equity Shareholders : From Wednesday, 27th August, 2008 to Saturday,

6th September, 2008 (both days inclusive).

12.4 Dividend Payment Date : N.A.

12.5 (i) Listing of Equity Shares on Stock Exchanges : The Equity Shares of the Company have been listed during

the year, at The Bombay Stock Exchange Ltd., (BSE) and The

National Stock Exchange of India Ltd. (NSE), with effect from

18th July, 2007.

(ii) Payment of Listing Fee : Listing Fees for the year ended 2008-09 have been paid to

The Bombay Stock Exchange Ltd., and The National Stock

Exchange of India Ltd, where the Company's Equity Shares

continue to be listed.

44

12.6 Stock Code:

Equity Shares

(a) Trading Symbol The Bombay Stock Exchange Ltd., (Demat Segment): SUNPHA ADV 532872

Trading Symbol National Stock Exchange (Demat Segment): SPARC

(b) Demat ISIN Numbers in NSDL and CDSL for Equity Shares of Re.1/- each ISIN No. INE232I01014

Corporate Social Responsibility (CSR)

Your organization has identified health, education, disaster relief and periodically, patient awareness as areas of priority. Our emphasis is assistance on a need basis and preferably at a local level, working with a local body, NGO or existing organization. One person's education can make a difference to an entire family. Your organization continues to support tribal education, at village schools called ashram pathshalas across several states. We have often stepped in to support infrastructure in the village schools around our plants and offices. We helped Adarsh Kanyashala, near our R&D center in Baroda, with computer facilities. In

Ahmednagar, support is extended to Gramin Vikas Mandal, which runs a primary school in the MIDC area, for children whose parents are employed in the industrial area. We have helped the school management in the high school in Karkhadi with financial assistance for science fair, school day, etc. A mobile van project has been sponsored for education in the rural and tribal areas near Panoli and this is organized by Ankleshwar Industrial Development Society. Another important activity was assistance at the primary and university levels, including support to students of the MS University of Baroda. Last year, we donated a 150-seater hostel for the post graduate students of SSG Medical College, MS University. For years now, we have been helping students work towards their doctorates using the facilities at SPARC. Your company regularly sponsors symposia, laboratory equipments and some production machines for local colleges. Amongst important medical support activities was the donation of machines and medicines to general hospital near our plants. For instance, the Panoli plant gave financial assistance to Smt. Jayaben Modi Hospital for its rural and tribal medical checkup programs.

In Bangladesh last year, we helped a group of psychiatrists with the development of an IQ rating scale. We also assisted health checkup camps in remote rural areas. We donated a calorimeter to a hospital. Donations were made to a fund for acid survivors. Spot painting competitions were organized for school children in different cities/towns to an enthusiastic response. At our Silvassa plant, employees volunteered for a blood donation camp. Lifeline Foundation, working for highway rescue and accident treatment, continues to be supported with funds for communication. We have helped the local government with infrastructure development from time to time, for instance, the Karkhadi panchayat with the construction of panchayat office, the Dadra gram panchayat for the construction of a road.

Directors

Shri S. Mohanchand Dadha and Shri Sailesh T. Desai retire by rotation and being eligible offer themselves for re-appointment. 31

The terms of appointment of Shri Sudhir V. Valia and Shri Sailesh T. Desai as Whole-Time Director will expire on 31st March, 2009. Both of these Directors have contributed well for all round growth of the Company's business. Your Directors recommend the re-appointment of both directors for a further period of 5 years.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2008, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

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

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2008 on a 'going concern' basis.

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