డైరెక్టర్ల నివేదిక Labh Construction & Industries Ltd.

Mar 31, 2014

Dear members,

The Directors have pleasure in placing before you the Annual Report and Audited Statement of Accounts for the financial year ended on 31st March, 2014

FINANCIAL RESULTS: (Amount in Rs)

Particulars 2013-14 2012-13

Revenue from Operations 140000.00 835000.00

Other Income 1321852.00 3934588.00

Total Expenditure 4158587.00 5567467.00

Profit/(Loss) before Tax (2696735.00) (797879.00)

Exceptional Items 111.00 50837.00

Tax Expenses (100104.00) (1328273.00)

Profit/(Loss) After Tax (2596520.00) (581231.00)

OPERATIONS:

During the year under review, the Company has reported total income of Rs. 14.62 lacs against the total income of Rs. 47.70 lacs during the previous year. Hence, the Company has reduced its total income in the financial year under review compared to previous financial year. The Company has incurred loss of Rs.25.97 Lacs during the year under review as against Net Profit Rs. 5.81 lacs during the previous year.

DIVIDEND:

Due to Losses of the Company, Your Directors do not recommended any dividend on Equity Shares of the Company. FIXED DEPOSITS:

The Company has not accepted/renewed any public deposits during the year under review.

STATUS OF SICKNESS WITH BIFR/AAIFR:

The members are aware that the Company had applied to Hon''ble Board for Industrial and Financial Reconstruction (BIFR) to declare the Company as a sick unit and at present Company''s application is pending with Appellate Authorities for Industrial and Financial Reconstruction (AAIFR), New Delhi. Final Decision of the Application is still pending as on date of this report with the said authority. The Management of the Company is very much hopeful for favorable decision.

CORPORATE GOVERNANCE REPORT:

Pursuant to clause 49 of the Standard Listing Agreement Report on Corporate Governance is enclosed herewith as a part of Directors'' Report for the year under review.

DIRECTORS:

Mr. Harshad B Vaghela retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. Pursuant to provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder, your Directors are seeking appointment of Mr. Rajesh Dhansukhlal Girishas and Mr. Harin Kanchan Shah as an Independent Directors of the Company for five consecutive years upto 31st March, 2019. Details of Directors being appointed/re-appointed are given in the Explanatory Statement to the Notice convening the Annual General Meeting. The Board of Directors recommends their appointment/re-appointment for the approval of the shareholders at the ensuing Annual General Meeting.

AUDITORS:

M/s. Gattani & Associates, Chartered Accountants, Ahmedabad, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment (Subject to ratification at every Annual General Meeting). The Auditors have furnished a certificate to the effect that, if reappointed, their appointment shall be within the limits prescribed under the Companies Act, 2013.

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 that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2014 and of the loss of the Company for that period;

(iii) 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 the safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

COMMENT ON AUDITORS REPORT

Company has not complied with the following Accounting Standards:

i. Non- provision for depletion in value of Investments of Rs 64.99 lacs (PY Rs 64.99 lacs), held in the companies whose net worth has eroded, in terms of requirement of AS 13. In view of this loss for the year is understated and investments are overstated by that amount (refer note 13A).

ii. No provision being made for Retirement benefits payable to employees including Gratuity and leave encashment in terms of requirement of AS 15 resulting into overstatement of profit for the year and understatement of current liabilities to that extent. In view of non-availability of the relevant information, quantification of impact thereof could not be ascertained (refer note 2.XI).

iii. The company has neither identified nor provided for loss on impairment of assets as per the requirement of AS 28, resulting into overstatement of fixed assets and understatement of profit for the year. However due to non availability of required information, impact of same could not be quantified (refer note 2.IV).

Further Company has not complied with the following:

Note 5.I.b, regarding the balances of Secured loans being subject to confirmation and reconciliation. In view of the non-availability of the relevant information, consequential impact thereof, on the state of affairs of the company remains to be ascertained,

Note 5.II.b, regarding the balances stated under unsecured loans being subject to confirmation and reconciliation. In view of the non-availability of the relevant information, consequential impact thereof, on the state of affairs of the company remains to be ascertained,

Note 6 & 9, regarding various long term liabilities to refund booking advances paid by members who cancelled their bookings as well as those in the nature of payable in respect of supplies, expenses being subject to confirmation and reconciliation. In view of the non-availability of the relevant information, consequential impact thereof, on the state of affairs of the company remains to be ascertained,

Note 14, regarding non provision of doubtful advances and deposits out of long outstanding advances and deposits of Rs 620.24 lacs (PY Rs 620.52 lacs). However in view of non-availability of complete information in that respect, we are neither able to express our opinion on realisability thereof nor able to quantify its impact on the affairs of the company,

Note 15.a, regarding non-provision for doubtful debts out of long outstanding debtors of Rs 57.87 lacs (PY 54.21 lacs), in respect of the projects already completed. However in view of non-availability of complete information in that respect, we are neither able to express our opinion on realisability thereof nor able to quantify its impact on the affairs of the company,

Note 15.b, regarding non-provision of Rs.6.50 lacs (PY Rs 6.50 lacs) out of Cash balance looted in the year 199596 and not recovered so far, due to which profit for the year and other non- current assets both are overstated by that amount,

Note 25, regarding non provision of certain liabilities in the accounts. In view of the non-availability of the relevant information, consequential impact thereof, on the state of affairs of the company remains to be ascertained, Note 25, regarding financial as well as other impact on the state of affairs of the company due to delayed/ defective execution of contractual assignment as well as consequences of delayed payment of statutory dues and those to Secured lenders. In view of the non-availability of the relevant information, consequential impact thereof, on the state of affairs of the company remains to be ascertained.

REPLY OF COMMENT ON AUDITORS REPORT:

Answer to (i): The management is hopeful of recovery from losses in its investments.

Answer to (ii): The Company is a SICK UNIT and Major staff is retrenched. Management proposes to meet the liability as and when it arises. Liabilities likely to arise in future shall not be substantial.

Answer to (iii): The Company''s operation was totally suspended from Stock Exchange due to Impact in case of some of the assets shall be set off against positive impact. In case of others net liability shall not be substantial. Further:

Answer to (Note 5.I.b): The Company is not working since last few years however referring to the secured loan acquired by the company from G.S.F.C, since the loan account of the company with the aforesaid institution has been classified as NPA account the management is unable to get the confirmation for the same. The management has given the aforesaid institution a proposal for settling the same and is hopeful that the same shall be resolved at earliest.

Answer to (Note 5.II.b) The Company have been in process to the respective unsecured loans. The management is hopeful of resolving/settling the same at earliest.

Answer to Note 6 & 9: Due recession in the real estate market the company suffered a major setback in its core business and as a result suffered from a severe liquidity crisis owing to which the company has been unable to launch any new projects or refund the aforesaid booking advances paid by members as well as amounts payable in respect of various supplies, expenses. The management is hopeful of resolving the same at earliest.

Answer to Note 14: The Company under contracts entered into by the company with the Delhi Development Authority (DDA) and the Central Government Employee Housing Welfare Organization (CGEWHO). As issues have been raised by both the institutions regarding the payables to the company the matters pertaining to both are under arbitration in the court of law. Hence the management shall be unable to ascertain the realisability until the outcome of the arbitration in the respective court of law.

Answer to Note 15.a: Recovery from the members is due and steps have been initiated by the management for the same. Recoveries have already started flowing in and the management is hopeful of clearing the same at earliest.

Answer to Note 15.b: The management would like to state that in case of the aforesaid that the Company had appealed before the Hon''ble ITAT ''A'' Bench, Ahmedabad comprising of Justice H.L. Karwa, J.M. and A. N. Pahuja, A.M. and accordingly the tribunal has decreed order on 16th March 2009 in favor of the assessee i.e. Labh Construction and Industries Ltd. and upon the tribunal''s direction the learned Assistant Commissioner of Income Tax, OSD(1), Range-4, Ahmedabad has quashed the income assessed u/s. 158BD rws. 158BC dated 31/05/2005. Answer to Note 25: As the company had been classified as sick unit by the Hon''ble BIFR, the company has been protected from the aforesaid liabilities. However these liabilities are contingent upon the outcome of the litigations pending with the respective courts of law.

PARTICULARS OF EMPLOYEES:

None of the employees is drawing remuneration which is more than the specified limit prescribed u/s. 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. Hence, the information in terms of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are not required to be given.

INSURANCE:

All fixed assets and movable assets of the Company are adequately insured.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

1) Conservation of Energy and Technology Absorption :NA

The year under review, there are no manufacturing activities undertaken by the Company. The main activity of the Company is land development and construction activities and it is of such a nature that, it requires minimum energy. In view of the aforesaid fact, there was no scope for your Company to make any efforts for energy conservation, research and development and technology absorption. Hence the particulars required to be furnished in respect of the same are not given.

2) Foreign Exchange Earnings: NIL Foreign Exchange Outgo : NIL

ACKNOWLEDGMENT:

Your Directors wish to place on record their deep sense of appreciation for the commitment displayed by all the employees of the Company resulting in successful performance during the year under review. Your Directors also take this opportunity to place on record the co-operation, assistance and continued support extended by the Banks, Government Authorities, Vendors and Shareholders during the year under review.

On behalf of the Board of Directors For Labh Construction & Industries Ltd Jayprakash J. Magtani Place : Ahmedabad Managing Director Date : 13/08/2014 DIN: 01639309 Reg. Off: Shantanu, 104, Sardar Patel Nagar, Ellisbridge, Ahmedabad 380 006

---

Mar 31, 2012

To, The Members of Labh Construction and Industries Limited

Ahmedabad.

The Directors have pleasure in placing before you the 24th Annual Report and Audited Accounts for the financial year ended on 31st March, 2012.

FINANCIAL RESULTS''.

The summarized financial results of the company are given herebelow:

(Amt. in Rs.)

Particulars 2011-2012 2010-2011

Revenue from Contracts and other Income 7574454 559,966

Profit/(Loss) before Depreciation and Taxes 2506933 (21,232,240)

Less: Depreciation provided during the year 961529 1,052,540

Profit/(Loss) before Tax 3468462 (22,284,780)

Less: Provision for Tax/Deferred Tax (148415) (741,372)

Profit/(Loss) after Tax 3616877 (21,543,408)

Balance Profit/(loss) for the period , 3616877 (21,543,408)

Add: Balance Profit/(loss) brought forward from the previous year (211525783) (189,982,375)

Balance of Profit/ (Loss) carried to Balance Sheet (207908906) (211,525,783)



STATUS OF SICKNESS WITH BIFR/AAIFR

The members are aware that the Company had applied to Hon''ble Board for Industrial and Financial Reconstruction (BIFR) to declare the Company as a sick unit''and at present Company''s application is pending with Appellate Authorities for Industrial and Financial Reconstruction(AAIFR), New Delhi. Final Decision of the Application is still pending as on date of this report with the said authority. The Management of the Company is very much hopeful for favourable decision.

DIVIDEND:

Your Directors do not recommended any dividend on Equity Shares of the Company in view of the carried forward losses incurred in the previous years.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Industry Structure and Development:

Despite the global slow-down and challenging market conditions, the Indian Economy could manage a growth of around 8% in FY 2010. The Government has committed higher allocation towards infrastructure spending.

As per the studies carried out by FICCI and Ernst & Young in real estate segment, the global economy continues to recover, real estate investors worldwide are poised tp take advantage of investment opportunities. The infrastructure sector offers tremendous opportunity for private players to play a role in this sector. India is also ranked fifth on account of economic growth and a developing real estate market with more focus on the regulatory environment, India has potential to become a favored investment destination.

(B) Review of Operations:

During the year under review, income from operation of the Company was Rs. 44,65,000/- and Profit of Rs. 36,16,877/- after taxation as against income from operation of Rs. 1,36,63,863/- and incurred loss of Rs. 2,15,43,408/ - in the previous year.

(C) Opportunities and Threats:

Your Company believes that there is great potential in the Indian real estate sector and that with economic stability, demand for residential as well as commercial segment would further strengthen. Therefore, to cater the burgeoning demand for quality real estate, your Company will focus on timely execution of projects, without compromising on quality and compliances. As per Cushman & Wakefield research, in India cumulative residential demand is estimated to be over 7.5 million units by 2013 across all categories including the economically weaker sections, affordable, mid and luxury segments.

Business opportunities are being continuously explored through environment scanning and new business plans are adopted accordingly. Company was able to serve the needs of customers with different buying patterns and purchasing power. The Company continued to enhance its reputation as one of the strongest and most established developers with an enviable track record in developing urban housing, pioneering new products and offering an array of products across various locations.

The real estate business in India is impacted by, inter-alia, regulatory and monetary policies and investment outlook. The Company''s operations and its ability for future development has to be viewed in light of the above and resultant factors such as the availability of real estate financing, uncertainty on monetary and fiscal policy actions, changes in Government regulations, foreign direct investments, approval processes, environment laws, actions of government land authorities and legal proceedings.

(D) Internal Control System:

The internal control system of the Company is required to be strengthened. The Company is in process to implement proper and adequate internal control systems and procedures to ensure orderly and efficient conduct of business and 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. Gaps, if any, under the existing system are being examined and the mitigation measures for the same are being devised.

(E) Human Resources:

Human capital has continued to be the key engine for our growth and aspirations. The Company has been constantly reviewing its HR policies and practices to keep abreast with the market changes and has embarked upon several initiatives to focus on creating a positive work environment that provides employees with ample growth and development opportunities as well as ensuring high levels of motivation and engagement.

The employee relations of the Company continue to be cordial. The active co-operation of employees is an important contributory factor for the cordial relations. The company firmly believes that intellectual capital and human resources is the backbone of the company''s success. „

(F) Cautionary Statement:

Statement in the Management Dfscussions and Analysis Report describing the Company'' objectives, projections, estimates, expectations or predictions may be "forward looking statemenf within the meaning of applicable security laws and regulation. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company'' operations include economic conditions affecting demands and supply and price conditions in domestic in which the Company operates. Changes in Government regulations, tax regimes economic developments within India and other incidental factors.

CORPORATEGOVERNANCE REPORT:

Pursuant to clause 49 of the Standard Listing Agreement Report on Corporate Governance is enclosed herewith as a part of Directors'' Report for the year under review

DIRECTORS:

Pursuant to provisions of Section 256 of the Companies Act, 1956 Shri Rajesh D. Girish and Shri Harin K. Shah, Directors of the Company retires by rotation and being eligible offers themselves for re-appointment.

AUDITORS:

M/s. Gattani & Associates, Chartered Accountants, Ahmedabad, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors have furnished a certificate to the effect that, if reappointed, their appointment shall be within the limits prescribed under Section"224 (1 -B) of the Companies Act, 1956.

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 that:

(I) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company asatMarch31,2012;

(iii) 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 the safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis

PARTICULARS OF EMPLOYEES:

None of the employee is drawing remuneration which is more than the specified limit prescribed u/s. 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. Hence, the information in terms of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are not required to be given.

CONSERVATION OF ENERGY.TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

1) Conservation of Energy and Technology Absorption:

The year under review, there are no manufacturing activities undertaken by the Company. The main activity of the Company is land development and construction activities and it is of such a nature that, it requires minimum energy. In view of the aforesaid fact, there was no scope for your Company to make any efforts for energy conservation, research and development and technology absorption. Hence the particulars required to be furnished in respect of the same are not given.

2) Foreign Exchange Earnings and outgo:

The information on foreign exchange earnings and outgo during the year under review is NIL.

APPRECIATION:

The Board of Directors wish to place on record their deep appreciation and gratitude for the services rendered by the staff and executives of the Company. Board of Directors also conveys their gratitude to the Banks, Financial Institutions, Shareholders, Customers, Suppliers, for their continued co-operation and confidence reposed in the Company.



On behalf of the Board of Directors

For Labh Construction & Industries Ltd.



Place : Ahmedabad Jayprakash J. Magtani

Date : 16/08/2012 (Managing Director)

---

Mar 31, 2011

To The Members of Lab Construction and Industries Limited Ahmadabad.

The Directors have pleasure in placing before you the 23nd Annual Report and Audited Accounts for the financial year ended on 31st March, 2011.

FINANCIAL RESULTS:

The summarized financial results of the company have given below:

(Amt.in Rs.)

Particulars 2010-2011 2009-2010

Revenue from Contracts and other Income 559,966 81,114,863

Profit/(Loss) before Depreciation and Taxes (21,232,240) (6,588,993)

Less: Depreciation provided during the year 1,052,540 1,418,795

Profit/(Loss) before Tax (22,284,780) (8,007,788)

Less: Provision for Deferred Taxation (741,372) (125,715)

Profit/(Loss) after Tax (21,543,408) (7,882,073)

Less : Prior period adjustment _ 401,000

Balance Profit/(loss) (21,543,408) (8,283,073)

Add: Balance Profit/(loss) brought forward from the previous year (189,982,375) (181,699,302)

Balance of Profit/ (Loss) carried to Balance Sheet (211,525,783) (189,982,375)

STATUS OF SICKNESS WITH BIFR/AAIFR

The members are aware that the net worth of the company is eroded and the company had made an application to Hon' bled Board for Industrial & Financial Reconstruction (BIFR) to declare it as a Sick unit. Presently the matter of the sickness is pending with Appellate Authority for Industrial and Financial Reconstruction (AAIFR), New Delhi. The management of the company is quite hopeful that favorable decision shall come within very short time under the provisions of Sick Industrial Companies (Special Provision) Act, 1985. Only after receipt of the decision from the competent authority, the company shall be able to prepare and submit the draft rehabilitation scheme for revival and restructuring of the company to the Hon' bled BIFR.

DIVIDEND:

Your Directors do not recommended any dividend on Equity Shares of the Company as the company had incurred loss during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Industry Structure and Development:

Despite slow down of Indian as well as Global economic conditions, the growth of Infrastructure, Construction and Real Estate sector is steady. The Government has made positive changes and committed to allocate more incentives/funds for infrastructure and construction segment. More over Government of Gujarat is taking keen interest for development and growth of Infrastructure and Construction Industry as a whole. Further industrial growth in and around main cities of Gujarat is peaking up new heights.

Further to the above scenario, Banks, NBFCs are willing to give more and more allocation of funds for sanctioning of loan in Infrastructure and Construction Sector. Some of them offer loans at very low rate of interest with speedy sanction of loans. The infrastructure Sector offers tremendous opportunities for private players to play a vital role. India is ranked 5th on account of economic growth and developing real estate market with more focus on the regulatory environments. Indian Construction and Real Estate market has poised to become a favoured investment destination.

(B) Review of Operations:

During the year under review, income from operation of the Company was Rs. 4,75,000/- and loss of Rs.2,15,43,408/

- after taxation as against income from operation of Rs. 7,98,21,522/- and incurred loss of Rs. 78,82,073/- after taxation in the previous year.

(C) Opportunities and Threats:

Government of Gujarat is taking keen interest in developing Power Sector, Automobile Sector, Heavy Engineering Sector and offering lucrative incentives for setting up the projects in Gujarat. This will result in rapid industrialization in the state of Gujarat. On account of this, there will be more and more demand for residential and commercial units in nearby big cities. Further, Gujarat Government declared to develop Cholera Port, Construction of Air Cargo Air Port near Ahmadabad, development of Delhi-Mumbai Corridor and also declare to develop Chemical Zone in South Gujarat. On account of such development, there will be ample opportunities for growth of Infrastructure and Construction Sector. As per Cushman and Wake field Research, in India cumulative residential demand is estimated more than 7 . 5 million units by the end of 2013 across all the categories.

The Construction and Infrastructure Sector in India is impacted inter-alia, regulatory and monetary policies and investment outlook. Interest Rate on Housing loans will depend upon the Reserve Bank of India's fixation of the Repo and Reverse Repo Rate Policy. RBI has increased the rate by almost 40% within a period of two years. In addition to this, all the Banks & NBFC's had withdrawn the concessional rate offered on Housing Loan. At present, prices of Land have shoot up very fast in major cities of Gujarat resulted in high prices of the properties, now for Middle Class and Upper Middle Class cannot afford the high prices of properties thereby affecting the Construction Industry adversely.

(D) Internal Control System:

The Company has adopted adequate system of internal controls as per the size of the Company to ensure that all assets are safeguarded properly. All the transactions are authorized, recorded and reported correctly. The Company has effective systems in place for achieving efficiency in operations, optimum and effective utilization of resources, monitoring thereof and compliance with applicable laws. There is a well-established Internal Audit System with clearly laid down powers and responsibilities, wherever necessary that can be exercised at various levels of the Management in the Company.

(E) Human Resources:

Human Capital has continued to be the key engine for our growth and aspirations. The Company has been constantly reviewing its HR policies and practices to keep abreast with the market changes and has embarked upon several initiatives to focus on creating a positive work environment that provides employees with ample growth and development opportunities as well as ensuring high levels of motivation and engagement.

The employees relations of the Company continue to be cordial. The active co-operation of employees is an important contributory factor for the cordial relations. The Company firmly believes that intellectual capital and human resources is the backbone of the Company's success.

(F) Cautionary Statement:

Statement in the Management Discussions and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward looking statement" within the meaning of applicable security laws and regulation. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand and supply and price conditions in domestic in which the Company operates. Changes in Government regulations, tax regimes, economic developments within India and other incidental factors.

CORPORATE GOVERNANCE REPORT:

Pursuant to clause 49 of the Standard Listing Agreement Report on Corporate Governance is enclosed herewith as a part of Directors' Report for the year under review.

DIRECTORS:

Pursuant to provisions of Section 256 of the Companies Act, 1956 Shri Rajesh R. Desai, Director of the Company retire by rotation and being eligible offers himself for re-appointment.

Shri Rajesh D. Girish and Shri Harin K. Shah were appointed as additional Directors on the Board w. e. f 25/10/2010 and Shri Jayprakash J. Mangtani was appointed as additional director on the Board w.e.f. 24/01/2011 whose terms of office expires at this ensuing Annual General Meeting. Necessary resolutions have been included in the Notice convening the Annual General Meeting and members are requested to approve the same. Shri Jayprakash J Mangtani who was appointed as additional director was further elevated to the post of Managing Director of the Company w.e.f. 01.10.2011 at the Board Meeting held on 25.08.2011 subject to the approval of the members at the ensuing Annual General Meeting of the Company.

During the year under review Smt. Girija J. Mangtani was appointed and had resigned as Additional Director of the Company. Shri Jayprakash J. Mangtani had resigned on 25/11/2010 as director and was further appointed as Additional Director of the Company w. e. f 24/1/2011 on the Board of the Company. He was further elevated to the post of Managing Director of the Company w.e.f. 01.10.2011 at the Board Meeting held on 25.08.2011 subject to the approval of the members at the ensuing Annual General Meeting of the Company.

The Board of Directors took note of the services rendered by Smt. Girija J. Mangtani during the tenure of her office as Additional Director of the Company.

AUDITORS:

M/s. Gattani & Associates, Chartered Accountants, Ahmedabad, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors have furnished a certificate to the effect that, if reappointed, their appointment shall be within the limits prescribed under Section 224 (1-B) of the Companies Act, 1956.

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 that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2011;

(iii) 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 the safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a going concern' basis.

PARTICULARS OF EMPLOYEES:

None of the employee is drawing remuneration which is more than the specified limit prescribed u/s. 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. Hence, the information in terms of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are not required to be given.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

1) Conservation of Energy and Technology Absorption :

The year under review, there are no manufacturing activities undertaken by the Company. The main activity of the Company is land development and construction activities and it is of such a nature that, it requires minimum energy. In view of the aforesaid fact, there was no scope for your Company to make any efforts for energy conservation, research and development and technology absorption. Hence the particulars required to be furnished in respect of the same are not given.

2) Foreign Exchange Earnings and outgo:

The information on foreign exchange earnings and outgo during the year under review is NIL.

APPRECIATION:

The Board of Directors wish to place on record their deep appreciation and gratitude for the services rendered by the staff and executives of the Company. Board of Directors also conveys their gratitude to the Banks, Financial Institutions, Shareholders, Customers, Suppliers, for their continued co-operation and confidence reposed in the Company.

On behalf of the Board of Directors For Lab Construction & Industries Ltd.

Place : Ahmadabad Harshad B Vaghela

Date : 25/8/2011 (Chairman & Managing Director)

---

Mar 31, 2010

To The Members of Labh Construction and Industries Limited Ahmedabad.

The Directors have pleasure in placing before you the 22nd Annual Report and Audited Accounts for the financial year ended on 31st March, 2010.

FINANCIAL RESULTS:

The summarized financial results of the company have given below:

(Amt.in Rs.)

Particulars 2009-2010 2008-2009

Revenue from Contracts and other Income 81,114,893 760,042,349

Profit/(Loss) before Depreciation and Taxes (6,588,993) (2,022,612)

Less: Depreciation provided during the year 1,418,795 1,635,353

Profit/(Loss) before Tax (8,007,788) (3,657,965)

Less: Provision for Deferred Taxation (125,715) (150,189)

Add: Fringe benefit Tax - 42,000

Profit/(Loss) after Tax (7,882,073) (3,549,776)

Balance Profit/(loss) (7,882,073) (3,549,776)

Add: Balance Profit/(loss) brought forward from the previous year (181,699,302) (178,149,526)

Balance of Profit/ (Loss) carried to Balance Sheet (189,982,374) (181,699,302)

BOARD FOR INDUSTRIAL & FINANCIAL RESTRUCTURING (BIFR):

As you are aware that the Company had made reference to the Appellate Authority and on satisfaction by the said Authority, Company was registered as SICK UNIT vide case no. 62/2007. Further, hearing of the case is pending with the said Authority. Management of the Company is hopeful that the Company will be declared as "SICK UNIT" under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985.

DIVIDEND:

Your Directors do not recommended any dividend on Equity Shares of the Company as the Company had incurred loss during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Industry Structure and Development:

Growth in Construction industry in India is more than other industry segment and increasing very fast. Government of India made necessary positive changes in its policy for smooth development of construction industry. In all the major cities, giant corporate house, Multi National Companies, Non-Resident Indians have entered in construction industry vis. Residential colonies, Commercial Complexes, Malls. Due to this and particularly in the Gujarat state Construction industry will pick new heights in coming years.

Looking to the present and future growth in construction Nationalized Bank and Non Banking Finance Company now planning to sanction and disburse more housing loan at concessional/ special rate for the first year. All the towns in Gujarat state developed or being developed along with main cities.

(B) Review of Operations:

During the year under review, income from operation of the Company was Rs. 79,821,522/- and loss of Rs. 78,283,073/- after taxation as against income from operation Rs. 759,008,049/- and incurred loss of Rs. 3,549,776/ after taxation in the previous year.

(C) Opportunities and Threats:

The demand in residential segment will be increasing in Big Cities of Gujarat as the industrial growth is more in the state. While demand in commercial segment is remain same in previous years. There are good opportunities for development in commercial segment due to rapid industrialization. This was mainly due to support and friendly policies of Central as well as State Government. Recently government of Gujarat declared to develop Dholera Port and its surrounding area as Chemical and Industrial Zone. State Government has initiated steps to acquire the land. Hence, there are ample opportunities for growth in infrastructure development and construction. After almost one decade of earth quack people of Gujarat now prefer high rise building as they have no fear.

Recently some of the banks increased their bank rate for home loan, mortgage loan and most of the banks are considering to withdraw their special or discounted rate for loans. Further, prices of land in major cities of Gujarat increased considerable resulted in high price of the property and amount to low rate of return. Prices of basic rate in crude oil, food grain, Gold, Silver, metal etc had increased too much as compared to previous year and economists are also predicted that the rate of all raw materials will also increase. Hence people of middle and upper middle class cannot afford the high prices of property and this will affect the construction and infrastructure business adversely.

(D) Internal Control System:

The Company has adopted adequate system of internal controls as per the size of the Company to ensure that all assets are safeguarded properly. All the transactions are authorized, recorded and reported correctly. The company has effective systems in place for achieving efficiency in operations, optimum and effective utilization of resources, monitoring thereof and compliance with applicable laws. There is a well-established internal Audit system with clearly laid down powers and responsibilities, wherever necessary that can be exercised by various levels of the Management in the Company.

(E) Human Resources:

Human Capital has continued to be the key engine for our growth and aspirations. The Company has been constantly reviewing its H R policies and practices to keep abreast with the market changes and has embarked upon several initiatives to focus on creating a positive work environment that provides employees with ample growth and development opportunities as well as ensuring high levels of motivation and engagement.

The employees relations of the Company continue to be cordial. The active co-operation of employees is an important contributory factor for the cordial relations. The Company firmly believes that intellectual capital and human resources is the backbone of the Company's success.

(F) Cautionary Statement:

Statement in the Management Discussions and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward looking statement" within the meaning of applicable security laws and regulation. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand and supply and price conditions in domestic in which the Company operates. Changes in Government regulations, tax regimes, economic developments within India and other incidental factors.

CORPORATE GOVERNANCE REPORT:

Pursuant to Clause 49 of the Standard Listing Agreement Report on Corporate Governance is enclosed herewith as part of Directors' Report for the year under review.

DIRECTORS:

Pursuant to provisions of Section 256 of the Companies Act, 1956 Shri Rajesh R. Desai, Director of the Company retire by rotation and being eligible offers himself for re-appointment.

AUDITORS

M/s. Gattani & Associates, Chartered Accountants, Ahmedabad, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Auditors have furnished a certificate to the effect that, if reappointed, their appointment shall be within the limits prescribed under Section 224 (1 -B) of the Companies Act, 1956.

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 that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2010;

(iii) 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 the safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the company on a 'going concern' basis.

PARTICULARS OF EMPLOYEES:

None of the employee of the Company is drawing remuneration more than the specified limit prescribed u/s. 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. Hence, the information in terms of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are not required to be given.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

1) Conservation of Energy and Technology Absorption :

The year under review, there are no manufacturing activities undertaken by the Company. The activity of the Company under review is land development activities and is of such a nature that it requires minimum energy. In view of the aforesaid fact, there was no scope for your company to make any efforts for energy conservation, research and development and technology absorption. Hence the particulars required to be furnished in respect of the same are not given.

2) Foreign Exchange Earnings and outgo:

The information on foreign exchange earnings and outgo during the year under review is NIL.

APPRECIATION:

The Board of Directors wish to place on record their deep appreciation and gratitude for the services rendered by the staff and executives of the Company. Board of Directors also convey their gratitude to the Banks, Financial Institutions, Shareholders, Customers, Suppliers, for their continued co-operation and confidence reposed in the Company.

On behalf of the Board of Directors

Place : Ahmedabad Harshad B Vaghela

Date : 2/9/2010 (Chairman & Managing Director)