CENTENIAL SURGICAL SUTURE LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT To the Shareholders, Your Directors have pleasure in presenting the Annual Report together with the audited Accounts for the year ended March 31, 2012. The financial year 2011-2012 under review was unusual and one of the most challenging in memory, marked by a global slowdown, extreme currency volatility, prominent and severe natural disasters - particularly in Japan. The tragic earthquake and tsunami in Japan in March 2011, shows the vulnerability of our company's atraumatic needle supply to external shocks and were severely impacted by the earthquake and tsunami and its aftereffects. The Company however, managed to avoid any significant production disruption by working with its reserve inventory and overall supply base to temporarily resource atraumatic needles and help our Japanese suppliers to stablise production. Financial Performance Financial Results of the Company's operation for the year under review are as follows: Rs. in Lakhs For the year ended March 31 2012 2011 Net Profit before Depreciation & Taxation 310.52 385.63 Less: Depreciation 58.76 64.69 Provision for Deferred Taxation 0.00 0.13 Provision for Taxation/Written Off 100.87 112.95 Net Profit/(Loss) 150.89 207.85 Add: Balance from Last Year 896.05 688.20 Prior Period Profit adjustments 0.00 0.00 Less: Appropriation 0.00 0.00 Transfer to Reserves Loss carried to 1046.94 896.05 Balance Sheet The year under review witnessed a lot of challenges with growing competition and changes in surgeons/customers preference. The key challenge was to concurrently lay emphasis on the short term actions to restore market position, substantial product development, marketing efforts and the long term initiatives aimed to grow the fastest growing segments/regions. As you are aware, your Company is pursuing the vision to be in volume business so as to distribute costs more effectively. Views differ on how long this trend of uncertain outlook would continue but the Company is prudently building a measure of flexibility into its plans to meet any eventuality but at the same time is not diluting its product market capability build up to national player. Further details of operations are given in the management discussion and analysis report, which forms part of this report. During the Financial Year 2012 - 2013, the Company will continue to focus on driving in its established key growth brands and launching new brands in the market. Promoting commercial innovation to bring value to customers in an ethical manner is a priority for the Company. Various innovative marketing methods have been initiated to achieve this goal. In case of surge in demand, the Company has adequate capacity to manufacture sutures required for the business. Further, the company is reviewing the production plan at regular intervals and has the ability to add modules of capacity to short cycle times to meet demand increases. This commercial innovation will continue to remain a focus area for the year 2012 - 2013. The Company will continue to build on the strengths and ever endeavoring to be surgeon centric and your Company is confident to address the opportunities that the new financial year offers and overcome the challenges. Your Company has always placed primacy on quality and technology leadership for growth and believes it will continue to stand them in good stead. In summary, the Company has prepared well for the challenging economic scenario expected in the future, reasonable growth as well as the upcoming competition in the Suture industry. To live up to these responsibilities, now and in the future, the Company is recalibrating business model with a definite and reasonable objective and further sharpen our focus on ways and means to rationalize cost, economies of scale, insulation against raw material price volatility to cater our domestic customers. CENTENIAL SURGICAL SUTURE LTD., is well known in the suture industry as a manufacturer of superior atraumatic needled surgical sutures. Everything that CENTENIAL SURGICAL SUTURE LTD., manufactures is backed by years of experience. SUTURES bearing the CENTENIAL SURGICAL SUTURE LTD., name are of correct design and superior quality. Each suture is fully guaranteed as to quality and workmanship. Today, in addition to the recognition for excellence achieved in the areas of Cardiovascular Sutures, CENTENIAL SURGICAL SUTURE LTD., also provides a broad range of medical devices manufactured to our traditionally high standards of quality and value. We, at CENTENIAL, remain steadfast in our vision of making CENTENIAL an outstanding global sutures provider and an institution of excellence which operates on the principles of Quality and Ethics ~ a sales & marketing network that leverages learning across geographies the finest sutures ~ all to the ultimate benefit of the patient. This vision positions CENTENIAL as a leader in an industry where the gap, between demand for Quality sutures and to meet that demand, remains enormous. India becoming important market for healthcare increases in parallel with economic growth. CENTENIAL recognises this opportunity and working towards becoming the company of choice for sutures. The business year 2011 - 2012 has seen your company strengthen its base as it advances closer towards realising its ambitious vision, untiring dedication and commitment. This has been an eventful year with a significant release of numerous codes of antibacterial sutures on the domestic front. A strong presence across India helped CENTENIAL build a solid platform that has positioned us for international growth, in line with the company's strategy to extend its presence globally and meet growth opportunities in alignment with our vision. At the end of this fiscal, CENTENIAL has emerged even stronger and more prepared for the next year. CENTENIAL's leadership team was demonstrated our capability and strategic intent, and we will continue to explore other growth opportunities in alignment with our vision. We are confident about the future and grateful for the goodwill and support of our Surgeons. We take this opportunity to thank all the surgeons for their continuing support. I am also indebted to the members of the CENTENIAL Board for their guidance and to the employees of the CENTENIAL. Two of the three pivotal of the Human Development index are Health and Education. This underlines the fact that the growth and development of any country is largely dependent on the state of its health and education dispensing systems and structures. While advancement has been made by INDIA in both these spheres, the potential for improvement still remains immense. Recognising the importance of health in the process of economic and social development and in improving quality of life, the Indian government has launched various schemes. Apart from reforms on the public healthcare front, there are initiatives by the central government which have helped in promoting private participation in the healthcare sector. The government is giving tax incentives to hundred-bed hospital to encourage private players to set up new Greenfield hospital's across India. Your company is engaged in the business of improving and saving lives; it is humbling to think of impact we make each day on the thousand of people that seek our sutures and medical devices for themselves and their loved once. We clearly have an integral role to play in India's development and a duty to deliver quality SUTURES with a compassionate approach, in a caring environment, to those that need sutures & medical devices. CENTENIAL, through its various upcoming products will add considerably to its sales in the coming years. SUTURES form the core of CENTENIAL's business approach and this unwavering patient-centric focus that has made our company preferred choice in the sutures space. CENTENIAL continues to bring in the finest suture and atraumatic needles and explore newer ways of offering the very best suture codes in the suture industry. Your company believes in delivering results by employing the best technology and setting industry benchmark in the process. This, for your company, was just another setup forward in its relentless in its pursuit of the next level of Quality sutures and capability. While our emphasis remains on growth in the domestic market, we clearly have ambitions of taking the CENTENIAL value proposition. We are convinced that the benefit realized from such platforms are many, including access to a wider talent pool, cost saving on account of economies of scale and an environment of cross-pollination in terms of learning and experience. The Company will invest in strong operating system, robust processes and talented people, with an unwavering focus on medical excellence and patient-centric healthcare. Our business model builds the strength of our accumulated experience and extensive domain knowledge of the sector. We continue to evolve as we walk the path of ever-improving quality with an eye on delivering reliable, accessible and affordable sutures of a global standard. The growth story continues at CENTENIAL. Apart from new hospitals, the Company grew in existing facilities as well; by adding new equipments, improving infrastructure and enhancing capability through technology. We take pride in knowing that some of the best Surgeons in INDIA using CENTENIAL sutures. The company has sharpened its focus on quality and building a quality agenda in Indian healthcare. We have achieved cost- saving synergies very rapidly and have implemented several initiatives to improve productivity. These will continue going forward. Our strategy remains firmly focused on creating new benchmarks in each of the specialties, by innovating new modalities of sutures and offering our customers a unique value proposition. To enable and enhance this process we are strengthening our systems and protocols and investing resources to improve the competencies of our people. We recognise that our brand of sutures delivery is entirely dependent on the standard of service we provide to our surgeons and will focus its energy entirely on enhancing customer experience, has been added to enable the organization to meet and exceed their expectations. As we move forward we will continue to strengthen the synergy between our distinctive products and the acumen of our marketing personnel. We will back this with strong management principles to deliver on the vision of excellence in patient care that drives us. Your company has the right combination of ambition, innovation and agility to compete and excel in the ever-changing world of modern sutures. As we look at the numbers in the current maelstrom, whilst our revenues and profits have been impacted across businesses, in relative terms, measured against the earlier years, we have stood our ground. Without doubt, we are facing our toughest challenge, but we will scale up our core products while providing direction to newer areas of growth. We believe that tough times don't last, tough people do. At a time like this, we constantly remind ourselves our values and beliefs that our collective endeavour as an organisation is to build businesses for the long haul. In the past too, there have been sharp swings in business cycles and there will be more of these in the future, though hopefully not of the magnitude and ferociousness we are seeing today. And each time in the past we have come out of the eve of the storm, we have emerged fitter and stronger and the passion for Innovation is vibrant and urgent. Our values always guide us, and our history and heritage as a company, in one word, stands for trust, service and high Quality. Our demanding standards of governance have set us apart, even more, now, and in the future. Clearly, investors and employees will appreciate and learn to value differentiate between organisations like ours that are ethical, honest, well-governed and transparent, and others, for whom governance is a platitude. This is a huge strength, built over time into our genetic coding. It will always stand us in good stead. We are focusing on building strong administrative and support functions and have concurrently invested in systems for financial accounting, accurate billing, objective legal system, strong human resources and excellent Quality. The workforce strength on our payroll is a balanced blend of youth and experience. A common culture flows through the entire company, which values persistence and focus. Our workforce is empowered to handle operations independently as they have a better understanding of the operations and realities. Our company regards learning as an ongoing process, because, it's the industry expertise and skills we possess, that help us in understanding our SURGEON'S better. Our values always guide us, and our history and heritage as a company, in one word, stands for trust, service and high Quality. Your company will exploit its strengths in cardio and vascular sutures business and exploring growth opportunities. Clearly the way to succeed in this market is through improved processes and enhanced production of the right Quality. We have a brand name which stands for Quality, Reliability, Commitment and Integrity. The CENTENIAL name is pronounced with great deal of respect, in domestic as well as international markets. It has been created through sheer sincere dedication. This makes us believe that it will be long lasting and something we can build further on. To further your company's growth, the Cardio Vascular products is being given additional impetus. New production lines have been established to increase the production substantially in the coming years. The management of your company is planning to increase the market share of Cardio Vascular products business. Confidence in our products will further accelerate the success rate in the coming years. Considering the challenging business environment your Company's performance can be termed as satisfactory. Operations The Company registered sales of Rs.5247.98 lakhs in the financial year ended March 31, 2012, clocking a growth of 4.45% over the corresponding 12 months period ended March 31, 2011. The results for the year show net profit after tax of Rs. 150.89 lakhs as compared to the net profit after tax of Rs.207.85 lakhs. The earnings per share decreased from Rs.5.70 in 2010 - 2011 to Rs.4.14 in the year under review. The Company's profitability declined besides other expenses being higher, due to extreme currency volatility, high inventory costs, higher selling overheads, rising staff/labour costs and rising material/ interest/finance costs. To mitigate any risks due to material cost increase, the company continues to work on material cost optimization through deep dives, value production and alternative sourcing to sustain profitability to the extent feasible. Many established surgeons have tried our products and started using them continuously and the trends are encouraging. The technical functioning of our plant as indicated by the above-mentioned results, the capacity utilisation's was quite satisfactory and production levels were selectively improved as required. As a measure of performance which aims to deliver a better deal to all the stakeholders of the company, be it customers, employees, shareholders, the community and the environment. Our customers have never wavered in their unanimous opinion of our capability and our commitment to serve them. A strong and satisfied client base is more than borne out by the fact that we still continue to draw 80% of our business from repeat customers. The passion for innovation is vibrant and urgent. It also gives us happiness that SURGEON'S have reposed faith in our ability to make a difference. We have a brand name, which stands for reliability, commitment and SAFETY. The CENTENIAL name is pronounced with great deal of respect, in the domestic market. It has been created through sheer dedication. This makes us believe that it will be long lasting and something we can build further on. The quality of management and the professionals of the company is the true reputation builder of the company. More than 95% of the current workforce has grown with us, with some clocking more than ten years. They realize the value of success and the hard work required to sustain this success. They have been an important part of the journey of creating value leadership. We think our spirit and our resolve are something, which cannot be replicated. This indeed is a defining value. ISO 9001 : 2008 Certification Your company is ISO 9001 : 2008 certified. The stringent ISO 9001 : 2008 system means effective control over every step to achieve true quality assurance for our products. Research and Development Your Company strongly believes that sustained growth in this suture industry can be achieved through continuous pursuit for innovation. Maintaining World Class Quality Standards is an obsession with top management that percolates to every level, making CENTENIAL facilities and products a landmark. Everyday Surgeon's expectations continually increase. The Company's research & development activities continue to be directed towards upgradation of technology and development of new product codes and packaging lines. Your company's commitment is to meet and exceed those expectations. People and Safety Your Company believes the most valuable asset of every company is its human resource. CENTENIAL values all our employees and makes effort through Quality of work life to help their growth. Your Company has always placed emphasis on our people and safety at workplace. Industrial relations in the company were cordial throughout the business year under review. This year's results were possible due to the excellent individual and team efforts of our employees. The Board of Directors take this opportunity to thank them for their efforts and for those that will come this business year. The Board of Directors wish to place on record their sincere appreciation for the continued support and excellent work of all the employees. Dividend Your Directors after careful consideration of the financial accounts of the company have not recommended any dividend to the equity shareholders of the company. While placing on record their deep concern, the Directors decided that in view of the inadequate profits it would not be possible to declare dividend as there was a need to conserve the profits for better financial health and need for working capital to the company. Preferential Issue Extraordinary General Meeting of the members was held on Saturday, the 18th day of January, 2012, at 4.30 p.m., at the Registered Office: F-29, MIDC, Murbad, Thane 421401 to increase the present Authorised Capital of Rs.7,50,00,000/ - divided into 75,00,000 Equity Shares of Rs. 10/- each and in order to meet eventualities such as augmenting resources, issue of shares etc., it was proposed to increase the Authorised Capital to Rs. 9,00,00,000/- divided into 90,00,000 Equity Shares of Rs. 10/- each. The same was proposed to pay unsecured loans by issuing preferential allotment in the future date to allot 23,33,333 Equity Shares Rs. 10.00 Ten only) each at a premium of Rs. 2.00 each aggregating to an issue price of 12.00 each at cash to promoter - 250000 and 2083333 to body corporate. The object of the issue of the equity shares by way of the proposed preferential offer was to convert the unsecured loans to equity shares of the company as it was considered more feasible rather than borrowing from banks and other sources for repayment of the unsecured loans, which are attributed to hefty interest payment. Also the financing of unsecured loans from the preferential issue will directly benefit the working capital needs of the Company for the growth of the Company. Therefore, it was proposed to raise an amount not exceeding Rs. 3,16,20,000 ( Rs. Three Crores Sixteen Lakhs Twenty Thousand Only) by issue of 26,35,000 Equity shares of Rs. 10.00 ( Rs. Ten only) each at price of Rs. 12.00 Twelve only) per share, through preferential allotment of Convertible Warrants with the approval of the Shareholders by way of Special Resolution & the proposal was placed for approval. The above resolutions were not approved by the shareholder's & hence the proposal to increase authorized capital and allot equity shares to convert the unsecured loans and to raise long term resources, to strengthen the financial position and net worth and for general corporate purposes, and taking into consideration, the performance and positive outlook of the company, as well as the strategy and growth plan, and in order to conserve the valuable funds of the company and to augment the working capital of the Company remained unresolved. Directors During the year, Shri B. S. Limaye, Independent Non Executive Director of the Company is retiring by rotation and being eligible offers himself for re-appointment. Directors Responsibility Statement Pursuant to sub-section (2AA) of section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed; ii) the Company has in the selection of accounting policies, consulted the Statutory Auditors and these have been consistently, and reasonable and prudent judgments and estimates have been made so as to give a true and fair view Of the state of affairs of the Company as at March 31, 2012 and of the Profit of the Company for the year ended on that date. iii) the Company has 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. iv) the annual accounts have been prepared on a 'going concern' basis. Deposits The Company has not accepted any deposits under section 58A of the Company's Act, 1956 during the year. Particulars of employees In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, the name and other particulars of the employee are set out in the annexure to the Directors Report. Corporate Governance Code A separate report on Corporate Governance is enclosed as a part of this Annual Report. Certificate of Messrs Vipul N. Shah & Associates, regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with stock exchange is enclosed herewith. Compliance Certificate Compliance Certificate as required under section 383A of the Companies Act, 1956 prepared and issued by Messrs HS Associates, Company Secretaries in Practice, is annexed hereto. Conservation of energy, technology absorption, foreign exchange earning and out goings Conservation of energy continues to be a priority area for the Company and efforts are directed to reduce energy costs. Information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is given in the annexure to this report. Environment and safety The Company accords the highest priority for maintaining safety standards and a pollution-free environment. Subsidiaries Since the Company has no subsidiaries, Section 212 of the Companies Act, 1956 does not apply. Auditors Messrs Vipul N. Shah & Associates, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting. The Company has received a certificate from Messrs Vipul N. Shah & Associates, Chartered Accountants, Auditors, proposed to be re-appointed, to the effect that their reappointment, if made, would be in conformity with the limits specified under the provisions of section 224 (IB) of the companies Act, 1956. Acknowledgment We would like to thank you for the support and faith you have shown in us, and look forward to a fruitful relationship for years to come. We would like to thank all the stakeholders for their trust and support. I am also thankful to the members of the Board for their insight and guidance. I would also like to extend a special thank you to all the members of the management team and employees who contributed each day to the success of our company. Your Directors also place on record their deep sense of appreciation for the services rendered by the employees of the company. for and on behalf of the Board of Directors CENTENIAL SURGICAL SUTURE LTD. Mumbai Vijay Majrekar August 13, 2012 Chairman & Managing Director ANNEXURE TO DIRECTORS' REPORT Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended on March 31, 2012. A. Conservation of energy The Company continues to explore measures, which will help in conservation and saving of energy. Power and fuel consumption 2011-2012 2010-2011 1) Electricity Consumption a) Purchased units 2,30,242 2,24,493 Total Amount (Rs. in Lakhs) 16.30 14.10 Rate/unit Rs.7.08 Rs.6.28 Consumption per unit of production NA NA b) Own Generation Through Diesel Generator: Units 3,500 3,380 Total Amount (Rs. in Lakhs) 0.89 0.33 Cost/Unit Rs.25.42 Rs.9.92 Consumption per unit of production NA NA 2) Furnance Oil NA NA 3) Coal (specify quality) NA NA 4) Others (specify) NA NA B. Technology absorption Efforts made in technology absorption as per Form B of the Annexure: Form B Form for disclosure of particulars with respect to absorption of technology. Research and development (R & D) 1. Specific areas in which Research & Development (R & D) is being carried out by the Company : In-house Research and Development work is carried out to develop new products and to improve existing products. 2. Benefits derived as a result of the above R&D : Improvement in products. 3. Future plan of action: The Company will carry on R & D activities to improve existing products and develop new products. 4. Expenditure on R&D: No Significant expenditure is incurred. Technology absorption and adaptation Your Company continuous to focus on research and development activities towards the upgradation of technology, development, testing and certification of atraumatic needles and sutures for conformity to new Indian / International standards and exclusive export market. The Company has installed new machinery designed to its special requirements and has been able to save in cost of production and also manufacture products to various surgeons specifications. Besides development work for several new product codes for exports has been undertaken. Emphasis on new product codes development and process improvement will continue to be the priority areas of our research and development activity, enhancement in quality and service to our customer. C. Foreign exchange earnings and outgo During the year foreign exchange outgo was Rs. 912.99 lakhs (Previous Year Rs.773.65 lakhs). The foreign exchange earned during the year was Rs.93.15 lakhs (Previous Year Rs. 140.64 lakhs). The Company has not imported any technology. MANAGEMENT DISCUSSION AND ANALYSIS REPORT BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, and Indian Generally Accepted Accounting Principles (Indian GAAP). In the adoption of the accounting standards there are no material departures from the prescribed Indian accounting standards. Your Company's management believes that it has been objective & prudent in making estimates and judgements relating to the financial statements & believes that these financial statements are a fair representation of your Company's operations and profits for the year. Overview The Company registered sales of Rs. 5247.98 lakhs in the financial year ended March 31, 2012, clocking a growth of 4.45% over the corresponding 12 months period ended March 31, 2011. The results for the year show net profit after tax of Rs. 150.89 lakhs as compared to the net profit after tax of Rs. 207.85 lakhs. The earnings per share decreased from Rs. 5.70 in 2010-2011 to Rs. 4.14 in the year under review. Many established surgeons have tried our products & started using them continuously and the trends are encouraging. The technical functioning of our plant as indicated by the above-mentioned results, the capacity utilisation's was quite satisfactory and production levels were selectively improved as required. In summary the sharp focus on demand generation for key products, procurement & manufacturing efficiencies, tight control on expenses have been enhanced for the current financial year. Quality Your Company has been consistently meeting the quality objectives of ISO 9001 : 2008 Certification. Research and Development The Company has achieved the following through Research and Development: * Development of new value added products. * Process improvements resulting in better yields and further improvement in quality of products. Energy Conservation Regular studies are carried out to ascertain the quantitative energy consumption patterns, variances are analysed and corrective actions taken. The Company is continuously working towards further improvements in energy consumption levels. Health, Safety and Environment During the period under review, medical check up of all regular employees has been carried out. All requirements pertaining to pollution control, environmental protection and safety have been complied with. Employees have been trained to observe the guidelines relating to safety, health and environment. Company's Philosophy on Code of Governance Philosophy of your Company on corporate governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations, and all its interactions with its stakeholders, including shareholders, employees and the government. Your Company is committed to achieving the highest international standards of corporate governance. Your Company believes that all its operations and actions must serve the underlying goal of enhancing overall shareholder value, over a sustained period of time. Opportunities and Threats The surgical industry depends largely on new surgical applications and surgeries. In the last few years, the increase in the allocation of funds for such purposes have been on the increase and as such the opportunity of growth in surgical items is unlimited. However, there exists untapped potential in the nursing home sector. The Company has arrangement / understanding with various distribution market and sell various items which are required in the nursing home market. Product Performance The overall growth of business in the country has not been upto the desired levels because of restricted funding. The range of products has been steadily growing since 2005. The Company has consolidated its position in cardiovascular sutures segment & further consolidation is expected in 2012 - 2013. With the introduction of new-suture ranges particularly CENTISORB PLUS Antibacterial / Antimicrobial Sutures, the sales has been growing steadily. However, in view of unrestricted imports, competition, sales & profitability of the Company has been affected. Risks and Concerns Your company has from its inception been conscious and has regularly evaluated the risks and threats that control it and converted these threats into opportunities to its best advantage. The management believes that your Outlook During the current financial year there has been an improvement in the market conditions resulting in an increase in despatches and satisfactory sales price realisations. It is expected that this trend will continue. Further the growth rate of the Indian economy has been projected and your Company is also likely to benefit from this economic growth. Also due to increase in the production capacity there would be improvement in the profits of the Company in the coming years. Company's business is subject to a number of risks. Your company has developed its business plan based on its view of the evolving regulatory framework. Many of the components of the regulatory regime are established or articulated by the relevant regulatory authorities, including Food and Drug Administration. In the event that the assumptions used in the business plan are different from the existing regulations, there would be an impact on your Company's business. Risks are quantified in monetary terms for the loss that the company would suffer, to make every associate conscious of the impact of a risk. The Risk Management in your company has been functioning effectively and has been contributing to the mitigation of the risks that would have otherwise impacted our company. Adequacy of Internal Controls Your Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly. Material Development in Human Resources & Industrial Relation Industrial relations at the plant of the Company remained cordial during the year under review 2011 - 2012. Corporate Governance Your Company conforms to norms of Corporate Governance adopted by them. As a Listed Company, necessary measures are taken to comply with the Listing Agreements with the Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms a part of this Report. Cautionary Note The statements in the report of the Board of Directors and the Management Discussion and Analysis section describing the Company's projections, estimates, expectations or predictions may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors' envisage in terms of future performance and outlook since the Company's operations are influenced by many external and internal factors beyond the control of the Company. for and on behalf of the Board of Directors CENTENIAL SURGICAL SUTURE LTD. Mumbai Vijay Majrekar August 13, 2012 Chairman & Managing Director COMPLIANCE CERTIFICATE Registration No. of the Company: L99999MH1995PLC089759 Nominal Capital: 7,50,00,000/- To, THE MEMBERS, CENTENIAL SURGICAL SUTURE LTD. We have examined the registers, records, books and papers of CENTENIAL SURGICAL SUTURE LTD., ('the Company') as required to be maintained under the Companies Act, 1956, (the 'Act') & the rules made there under & also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on March 31, 2012 ('financial year'). In our opinion and to the best of our information & according to the examinations carried out by us and explanations furnished to us by the Company, its officers & agents, we certify that in respect of the aforesaid financial year: 1. The Company has kept & maintained all registers as stated in Annexure 'A' to this Certificate, as per the provisions of the Act & the rules made there under & all entries therein have been duly recorded. 2. The Company has duly filed the forms & returns as stated in Annexure 'B' to this Certificate, with the Registrar of Companies within the time prescribed under the Act and the rules made there under.. 3. The Company being a Public Limited Company has the minimum prescribed paid up Capital. 4. The Board of Directors duly met 05 (Five) times on May 14, 2011, August 12, 2011, November 14, 2011, December 19, 2011 & February 14, 2012 in respect of which meeting proper notices were given & the proceedings were properly recorded & signed including the circular resolutions passed in the Minutes Book maintained for the purpose. 5. The Company has closed its Register of Members from Tuesday, September 20, 2011 to Tuesday, September 27,2011 (both days inclusive) & necessary compliance of Section 154 of the Act has been made. 6. The Annual General Meeting for the financial year ended on March 31, 2011 was held on September 27, 2011 after giving due notice to the members of the Company & the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose. 7. One Extra-ordinary General Meeting was held on January 16, 2012, however all the resolutions as mentioned in the notice were not passed. 8. The Company has not advanced loans to its Director or persons or firms or companies as referred to under Section 295 of the Act, 1956. 9. The Company has not entered into any contracts falling within the purview of section 297 of the Act. 10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, Members or Central Government, as the case may be. 12. The company has not issued any duplicate share certificates during the financial year. 13. The Company has: (i) Delivered all the certificates & on lodgment thereof for transfer/transmission or any other purpose in accordance with the provisions of the Act. (ii) Not deposited any amount in a separate bank account as no dividend was declared during the financial year. (iii) Not paid dividends to any members within a period of 30 (thirty) days from the date of declaration as no dividend was declared. (iv) Not transferred the amounts in unpaid dividend account, application money due for refund, matured deposits, matured debentures & the interest accrued thereon, which have remained unclaimed or unpaid for a period of seven years, to Investor Education & Protection Fund as no amount in respect of the above were lying in the books of accounts of the Company is to be transferred. (v) Duly complied with the requirements of Section 217 of the Act. 14. The Board of Directors of the Company is duly constituted. There was no appointment of additional directors alternate Directors and Directors to fill casual vacancy during the financial year. 15. The re-appointment of Vijay Majrekar, as a Managing Director of the company has been made in compliance with the provisions of section 269 read with schedule XIII to the Companies Act, 1956. 16. The Company has not appointed any sole-selling agents during the financial year. 17. The company has obtained approval of the central government for increasing the remuneration of Managing Director exceeding the limits prescribed in the Part II & III of Schedule XIII of the Companies Act, 1956. Apart from this the Company was not required to obtain any approvals of the Regional Director, Registrar of Companies and/ or such authorities prescribed under the various provisions of the Act. 18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of the Act & the rules made there under. 19. The Company has not issued any shares, debentures or other securities during the financial year. 20. The Company has not bought back any shares during the financial year. 21. The Company has no preference share capital or debentures & as such there was no redemption of preference shares or debentures during the financial year. 22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares & bonus shares pending registration of transfer of shares. 23. The Company has not invited or accepted any deposits including any unsecured loans falling within the purview of Section 58A of the Act during the financial year. 24. The Company has borrowed amount from Financial Institutions, Banks but not from Directors, Members and others during the financial year ending on March 31, 2012. The said borrowings are within the limits as specified under section 293(1) (d) of the Companies Act, 1956. 25. The Company has not made any investments, given Loan or given guarantees or provided securities to other bodies corporate in accordance with the provisions of section 372A of the Companies Act, 1956. 26. The Company has not altered the Provisions of the memorandum with respect to situation of the Company's registered office from one state to another during the financial year under scrutiny. 27. The Company has not altered the provisions of the memorandum with respect to the objects of the Company during the financial year under scrutiny. 28. The Company has /not altered the provisions of the memorandum with respect to name of the Company during the financial year under scrutiny. 29. The Company has not altered the provisions of the memorandum with respect to the share capital of the Company during the financial year under scrutiny. 30. The Company has not altered its articles of association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the Company, during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the financial year. 33. The Company has deposited both employee's & employer's contribution to Provident Fund with prescribed authorities pursuant to section 418 of the Act. for, H S ASSOCIATES Company Secretaries Shri Hemant Shetye Partner Mumbai CP. No.: 1483 August 13, 2012 ANNEXURE 'A' REGISTERS & RECORDS MAINTAINED BY THE COMPANY a) Register of members under section 150. b) Index of members under section 151. c) Register of Transfers. d) Registers and Returns under section 163. e) Register of Contracts under section 301. f) Register of Directors, Managing Director, Manager and Secretary under section 303. g) Register of Director's shareholdings under section 307. h) Register of Inter Company investments under section 372A. i) Register of Charges under section 143. j) Register of Share application and allotment, k) Minutes Book under section 193. l) Books of Account under section 209. m) Attendance Register. ANNEXURE 'B' FORMS & RETURNS AS FILED BY THE COMPANY WITH THE REGISTRAR OF COMPANIES DURING THE FINANCIAL YEAR ENDED ON MARCH 31,2012. Sr. Form Sections Date of A B C No. No. filing 1. 23 192 12-09-2011 Yes N.A. Re-appointment of Managing Director 2. Din-4 See Rule 30-09-2011 Yes N.A. Intimation of change in -7 particulars of Director 3. 25A 198 07-10-2011 Yes N.A. Application to central government for approval of re-appointment and increase in remuneration for excess or over payment to managing director 4. 23 192 19-10-2011 Yes N.A Re-appointment of Managing Director 5. 66 383 (A) 19-10-2011 Yes N.A. Compliance certificate for the year ended March 31,2011. 6. 23AC. 220 20-12-2011 Yes N.A. Balance Sheet and Profit/Loss Account for financial year ended March 31, 2011. 7. 20B 159 01-11-2011 Yes N.A. Annual Return for year ended September 30, 2011. A = Whether filed within prescribed time B = If delay in filing whether requisite additional fee paid C = Particulars for, H S ASSOCIATES Company Secretaries Shri Hemant Shetye Partner Mumbai CP. No.: 1483 August 13, 2012