DIRECTORS' REPORT

To,

The Members, Bacil Pharma Limited

Your directors have pleasure in presenting their 28th Annual Report on the business and operations of the company together with the Audited Statement of Accounts for the year ended 31st March, 2015.

State of Company's Affairs and Future Outlook

The Company is in the business of Manufacturing of pharmaceuticals, medicinal chemicals and related activities. The directors framed policies and strategies for better utilization of resources of the company. The directors are optimistic about better financial result in the coming years.

The highlights of the Company's performance are as under:

Total Income during the year was Rs. 8,07,036/- as compared to Rs. 5,81,822/- in the previous year. The net loss incurred during the year was Rs. 3,18,118/- as compared to net loss of Rs. 10,90,871 in the previous year. Due to recession prevailing in the market, the Company has not taken any new project and is exploring new and suitable areas of business to diversifying its activities. In absence of any profits the Directors are not recommending any dividend.

No activities were carried out at the plant of the Company and the expenses pertaining to the said facility were included under the head project pre-operative expenses pending allocation, as per past practice.

Capitalization of assets of the project

The Company has not yet started commercial production due to reasons beyond the control of the management and the accounting for the total investments made by the Company in the fixed assets of the project is being relected under two relevant heads i.e. 1) Capital Work in Progress which includes Land, Building and Plant & Machinery, Capital Advances, Material at site and incidental Expenses and 2) Intangible Assets under Development which includes Project Pre-operative, Public Issue and Preliminary Expenses, pending allocations which are deferred to be adjusted till commencement of commercial production, as explained and informed earlier reports.

The Directors have also considered to lease, sale/ dispose of the Industrial undertaking (Building and Plant & Machinery) and in spite of efforts done to lease out the assets and to sale/dispose off the same , the management was unable to negotiate and finalize any deal as the response received was not positive.

Impairment of Assets

The delay in implementation of the project and the industrial undertaking being in Chemical Zone has already caused substantial depletion of the existing Plant & Machinery of the Project and will have a barring in the near future for extensive repairs and maintenance. There are indications which suggest impairment in the value of the fixed assets being Plant & Machinery and other fixed assests.

Extract of Annual Return

The extract of Annual Return, in format MGT -9, for the Financial Year 2014-15 has been enclosed with this report. Annexure I

Independent Directors' Meeting

During the year under review, Independent Directors met on 14th February 2015, inter-alia, to discuss:

Evaluation of the performance of Non-Independent Directors and the Board as whole.

Evaluation of the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors.

Evaluation of the quality, quantity content and timeless of flow of information between the management and the Board.

Particulars of Loan, Guarantees and Investments under Section 186

Complete details of LGSI covered under Sec 186 of Companies Act, 2013 as Attached in the financial statements and notes there under.

Particulars of Contracts or Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions, The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board.

Material Changes Affecting the Financial Position of the Company

In the Financial Year 2014 - 15, there are no Material changes which will affect the Financial Position of the Company.

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

Since the Company is not engaged in any activities, the particulars relating to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, are not applicable.

Risk Management Policy

During the year of review, company engaged in the process of Risk Management and evaluate the elements of business risk. The risk management framework defines the risk management approach of the company and includes periodic review of such and also documentation, mitigating controls and reporting mechanism of such risk.

In accordance with the provisions of the Act and the Articles of Association of the Company Mr. Prakash Shah, Director who is liable to retire by rotation presents himself for re-appointment.

Ms. Sneha Shah is appointed as an Additional Director (Non Executive Women Director) on 31st March2015, to comply with the clause 49 of listing agreement and Provisions of Companies Act, 2013.

The Company has received Declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and under Clause 49 of the listing agreement.

Board Evaluation

Formal Annual evaluation has been made by the Board of its own Performance and that of its Committees & Individual Directors during the meeting of Board of Directors and by common discussion with concerned persons

Particulars of Employees

During the year, there was no employee in receipt of remuneration as prescribed in the Rule 5(2) of the companies (Appointment and Remuneration of managerial personnel) Rules, 2014.

Audit Committee

The Audit Committee comprises Independent Director namely Mr. Shirish S. Shetye (Chairman), Mr. Lalit Jain and Mr. Prakash B. Shah as other member. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination & Remuneration Committee & Policy

The Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Details of this policy is given here under:

In compliance with section 178 of the Act and Clause 49 of the Listing Agreement the Board has reconstituted the existing "Remuneration Committee" by changing its Nomenclature as "Nomination and Remuneration Committee".

The Nomination and Remuneration Committee comprises Non-executive Directors namely Mr. Shirish S. Shetye (Chairman) , Mr. Lalit Jain and Mr. Prakash B. Shah as other member.

Stakeholders Relationship Committee

In compliance with section 178 of the Act the Board has constituted "Stakeholders Relationship Committee".

Investor Relations

The following table shows the nature of complaints received from the Shareholders during the year ended 31st March, 2015, all of which have been resolved during the year.

Disclosure on Establishment of a Vigil Mechanism

The Company has Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. No personnel had been denied access to the Audit Committee to lodge their grievances.

Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

There were no complaints reported under the prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Fraud Reporting (Required by Companies Amendment Bill, 2014)

No Fraud reported / observed during the financial year 2014 -15.

AUDITORS Statutory Auditors

As per the rule 6 of the Companies (Audit and Auditors) Rules, 2014 Company has re-appointed Chartered Accountants, M/S A.W. KETKAR & Co. (Firm Registration No: 105006W), as a statutory auditor of the company for the financial year 2015-2016. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

In this regard, the Company has received a certificate from the Auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of section 141 of the Act.

Secretarial Audit Report

The Secretarial Audit of the Company was conducted during the year by the Secretarial Auditor, M/s Amruta Kothari & Associates, Practicing Company Secretaries, Mumbai in accordance with Provisions of Section 204 of the Act. The Secretarial Auditors Report is attached as Annexure II and forms part of this Report. There are Qualifications or Observations or remarks made by the Secretarial Auditor in the report.

Cost Auditors

Requirements of Appointment of Cost Auditors of the company are not applicable to the company.

Stock Exchange

The Company's equity shares are listed at BSE Limited, ASE Limited and DSE Limited and the Annual Listing Fees for the year 2014-2015 has been paid for BSE Limited and as other stock exchanges are non functional Listing fees are not paid.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act 2013, your directors confirm that:

(a)In the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015.

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 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 devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgment

The Directors express their sincere appreciation to the valued shareholders, bankers, professionals, clients and devoted employees for their support.

For and on behalf of the Board of Directors Bacil Pharma Limited

Mr. PRAKASH SHAH

DIRECTOR DIN-01136800

Mr. SHIRISH SHETYE

DIRECTOR DIN-00148086

Place: Mumbai

Date: 02.09.2015