PUBLIC ANNOUNCEMENT TO THE EQUITY SHAREHOLDERS OF MATRIX LABORATORIES LIMTED

This Public Announcement (“PA”) is being issued by SMIFS CAPITAL MARKETS LIMITED, the Manager to the offer on behalf of Mr. N. Prasad, Mr. M. Ravinder, Alltime Formulations Limited (AFL) and G2 Corporate Services Limited (GCSL) (hereinafter referred to as the “Acquirers”), pursuant to Regulation 11(1) and as required under the Securities and Exchange Board Of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereto [SEBI (SAST) Regulations].

I. The Offer

1. The Acquirers, Mr. N. Prasad, Mr. M. Ravinder, AFL and GCSL, have acquired, through preferential allotment, an aggregate of 25,30,951 equity shares of Matrix Laboratories Limited (MATRIX or the Company) (constituting 35.21% of pre-issue voting capital) at a price of Rs 107/- per equity share for cash on 28^th January, 2003 and 5^th February, 2003 (hereinafter referred to as the “Preferential Allotment”). Mr. N. Prasad and Mr. M. Ravinder are promoters of MATRIX. AFL and GCSL are Companies promoted by Mr. N. Prasad and Mr. M. Ravinder.

The Preferential Allotment was made pursuant to the Special Resolution passed by the shareholders of MATRIX at the Extra-Ordinary General Meeting of the Company held on 6^th November, 2002. The pre and post-issue holdings of the Acquirers is as under :

Name	Pre-Issue		Post-Issue		Date of Allotment
Name	No. of Shares	%	No. of Shares	%	Date of Allotment
Mr. N. Prasad	18,17,350	25.28	19,82,826	20.40	28^th January, 2003
Mr. M. Ravinder	7,23,986	10.07	8,89,461	9.15	5^th February, 2003
AFL	NIL	NIL	8,00,000	8.23	28^th January, 2003
GCSL	NIL	NIL	14,00,000	14.41	5^th February, 2003

2. Pursuant to the above referred acquisition, the Acquirers are making this open offer under the SEBI (SAST) Regulations to the Shareholders of MATRIX to acquire from them upto 14,37,500 fully paid up equity shares of Rs.10/- each (representing 20% of the voting capital of MATRIX) at a price of Rs 276/- (Rupees Two Hundred Seventy-six only) for each fully paid-up equity share of MATRIX (hereinafter referred to as the “Offer Price”) payable in cash (hereinafter referred to as “Offer”). The Offer is not subject to any minimum level of acceptance and is not a conditional offer. The Share Capital of MATRIX does not consist of partly paid up shares.

3. The equity shares of MATRIX are listed on The Stock Exchange, Mumbai ("BSE") and the Hyderabad Stock Exchange (“HSE”). Based on available information, the equity shares of MATRIX are frequently traded within the meaning of Regulation 20 of the SEBI (SAST) Regulations on BSE and infrequently traded on HSE. Besides the shares acquired through the Preferential Allotment, during the period of 12 months prior to the date of this PA, Mr. N. Prasad has acquired 14,68,380 shares of MATRIX at highest price of Rs 29/- per share and an average price of Rs 25/- per share. The Offer Price of Rs 276/- is justified in terms of the Regulation 20 (4) of SEBI (SAST) Regulations as follows :

i. The Preferential Allotment was made to the Acquirers at a price of Rs 107/- per equity share.

ii. The average of the weekly high and low of the closing prices for the equity shares of MATRIX for the 26 week period prior to 10^th February, 2003 (i.e. the date of this PA) is Rs. 157.03 on BSE. (Source: http://www.bseindia.com/)

iii. The average of the daily high and low prices of the equity shares of MATRIX during the 2 week period prior to the date of this PA is Rs 275.75. (Source : http://www.bseindia.com/)

iv. None of the Acquirers have acquired any shares of MATRIX during the Twenty-six week period prior to the date of this PA.

The Offer Price is the highest of i to iv above.

II. Information about the Acquirers

1. Mr. N. Prasad, resident of Plot No. 27, Rukminidevi Colony, Near AOC Gate, Secunderabad, is a Post Graduate in Physics and M.B.A. He has around 16 years of experience predominantly in the Pharma Industry. He is presently Chairman and Managing Director of MATRIX, CEO and Sr. Managing Director of Vorin Laboratories Limited (VLL) and the Director of Medicorp Technologies India Limited (MTIL). The Networth of Mr. N. Prasad as on 31.01.2003 is Rs 35.13 Crores duly certified by Chartered Accountant, C. Maruti Nagendram (Membership No. 203897) residing at 1-1-298/2/B/3, 1^st Floor, Showbhagya Avenue, Street No. 1, Ashok Nagar, Hyderabad – 500 020.

2. Mr. M. Ravinder, resident of 3-6-100/1, West Maredpally, Secunderabad, is a Post Graduate in Commerce and a Law Graduate. He has 10 years of experience in Export of fine chemicals and bulk drugs and a total of 20 years of experience in business. He is presently Executive Director (Finance & Corporate Services) of MATRIX and a Director in MTIL, VLL and Fine Drugs & Chemicals Limited (FDCL). The Networth of Mr. M. Ravinder as on 05.02.2003 is Rs 25.39 Crores duly certified by the Chartered Accountants, C. Anand Rao & Co. (Membership No. 18016) of 6-3-252/2/7, Erramanzil, Hyderabad – 500 482.

3. AFL has its registered office at 3-6-100/1, West Maredpally, Secunderabad. AFL has been promoted by Mr. N. Prasad and Mr. M. Ravinder. AFL has been incorporated for conducting the business of manufacture of pharmaceuticals and also making investments in pharma sector. As on 31^st March, 2002, the Equity of AFL was Rs 2.80 Lacs. The Company has not commenced any business activities till date. AFL is not listed on any Stock Exchange.

4. GCSL has its registered office at Plot Nos. 38, 39, 50 & 51, IDA, Phase IV, Jeedimetla, Hyderabad. GCSL has been promoted by Mr. N. Prasad and Mr. M. Ravinder. GCSL has been incorporated for conducting the business of manufacture of pharmaceuticals, to establish laboratories for the purpose of R & D, enter into contracts and agreements with companies for technical assistance and know how and also to make investments in the pharma sector. For the year ended 31^st March, 2002, Total Income and Profit After Tax were Rs 76.17 Lacs and Rs 42.83 Lacs, respectively. As on 31^st March, 2002 Equity Capital and Networth were Rs 124.90 Lacs and Rs 126.77 Lacs. For the year ended 31^st March, 2002, Earnings Per Share was Rs 3.43, Book Value per share was Rs 10.15 and Return on Networth was 33.79%. GCSL is not listed on any Stock Exchange.

5. The Acquirers do not belong to any particular group.

III. Information on MATRIX

1. MATRIX was originally incorporated on November 29, 1984 as Herren Drugs Private Limited and subsequently converted to a public limited Company with effect from October 19,1992. Herren Drugs Private Limited subsequently changed its name to Herren Drugs & Pharmaceuticals Ltd and a fresh Certificate of Incorporation was issued on June 27, 1994.The Company has changed its name from Herren Drugs & Pharmaceuticals Limited to Matrix Laboratories Limited and obtained a fresh Certificate of Incorporation from the Registrar of Companies, Andhra Pradesh on March 21, 2001. The Registered Office of the Company is located at 1-1-151/1, IV Floor, Sairam Towers, Alexander Road, Secunderabad-500003.

2. Total Paid-up Equity Capital of MATRIX as on the date of this PA is Rs 971.85 Lacs comprising 97,18,451 equity shares of Rs 10/- each. There are no partly paid-up equity shares. Prior to the Preferential Allotment total Paid-up Equity Capital was Rs 718.75 Lacs comprising 71,87,500 equity shares of Rs 10/- each.

3. The shares of the Company are listed on the Hyderabad Stock Exchange and The Stock Exchange, Mumbai.

4. The Company has been engaged in the business of manufacture of Bulk Drugs for the last 18 years.

5. Financials (Audited)

(Rs in Lacs)

Particulars	Six Months Ended 30/09/2002	Year Ended 31/03/2002
Total Income	11,108.29	10,406.84
Profit After Tax	4444.56	561.28
Equity	718.75	718.75
Networth	6232.19	2,151.87
Earnings Per Share (Rs)	61.84	7.81
Book Value per share (Rs)	86.71	29.94

IV. Reasons for the Acquisition and Offer and Future Plans about MATRIX

1. The Offer by the Acquirers is being made with the objective of consolidating their holdings in MATRIX.

2. As on the date of this Public Announcement, the Acquirers do not have any plans to dispose of or otherwise encumber any assets of MATRIX in the next two years from the date of closure of the Offer, except in the ordinary course of business of MATRIX.

3. The Acquirers’ future plans include expansion of business, developing R & D facilities and supporting long term working capital requirements. The preferential allotment was made with the same objective.

4. The Acquirers undertake that they will not sell, dispose of or otherwise encumber any substantial asset of MATRIX except with the prior approval of the shareholders.

V. Statutory approvals / other approvals required for the Offer

1. Acquisition of shares from Non Resident shareholders is subject to the approval of the Reserve Bank of India (RBI). The Acquirers will make an application to RBI for acquisition of shares, if any, from non-residents after completion of the offer period.

2. No other statutory approvals other than the one mentioned above are required for the purpose of implementation of the Offer.

3. In case of delay in receipt of statutory approvals, SEBI has the power to grant extension of time to the Acquirers for payment of consideration to shareholders, subject to the Acquirers agreeing to pay interest for the delayed period as directed by the SEBI in terms of Regulation 22(12) of the SEBI (SAST) Regulations.

VI. Option to the acquirer in terms of the regulation 21(3).

1. As public shareholding is not likely to fall below 10%, the provisions of Regulation 21(3) of the SEBI (SAST) Regulations, 1997 containing the provisions relating to delisting option are not applicable.

VII. Financial Arrangements

1. The Acquirers have adequate financial resources to meet the financial requirements of the Offer and have made firm arrangements from internal accruals / domestic market borrowings to fulfill the obligations under the Open Offer in full.

2. The maximum purchase consideration payable by the Acquirers, in the case of full acceptance of the Offer (i.e. for 14,37,500 fully paid up equity shares of Rs. 10/- each at the rate of Rs. 276/- per equity share), would be Rs 39,67,50,000/-.

3. In accordance with Regulation 28(2) of the SEBI (SAST) Regulations, the Acquirers are required to deposit in Escrow an amount of Rs 9,91,87,500/- being 25% of the consideration payable under the Public Offer. Accordingly, the Acquirers have deposited with the Manager to the Offer 6,00,000 equity shares of Rs 10/- each fully paid-up of MATRIX whose aggregate market value as on 07.02.2003 is Rs 18,95,70,000/- (Market Price of Rs 315.95 per share). In accordance with Regulation 28(10), the Acquirers have opened an Escrow Account with Andhra Bank, R. P. Road Branch, Secunderabad, A/c No. 7135 and have deposited an amount of Rs 40,00,000/- (Rupees Forty Lacs) representing more than 1% of the total consideration payable as and by way of security for fulfillment of the obligations under the Regulations by the Acquirers.

4. SMIFS has been duly authorised by the Acquirers to realize the value of the Escrows in Bank Account and by deposit of security in terms of the SEBI (SAST) Regulations.

5. Mr. C. Maruti Nagendram (Membership No. 203897), M/s. C. Anand Rao & Co. (Membership No. 18016) and Mr. P. Bikshapati (Membership No. 208820), Chartered Accountants, have confirmed that the Acquirers have sufficient resources to meet all required financial obligations under the Offer. Based on this, the Manager to the Offer confirms that the firm arrangements for funds and money for payment through verifiable means are in place to fulfill the offer obligations.

VIII. Other Terms of the Offer

1. This is not a conditional offer and is not subject to any minimum level of acceptance.

2. Letter Of Offer (LOO) along with Form of Acceptance cum Acknowledgement (FOA) and Form of Withdrawal (FOW) shall be mailed to all shareholders whose names appear in register of MATRIX (except the Acquirers) and the beneficial owners of the equity shares of MATRIX, whose names appear on the beneficial records of the respective depositories, at the close of business on 10^th February, 2003 (Monday) (the “Specified Date”).

3. All the shareholders (except the Acquirers) who own the shares of MATRIX anytime before the closure of the offer are eligible to participate in the offer.

4. Shareholders who wish to tender their equity shares will be required to send the Form of Acceptance cum Acknowledgement, original share certificate(s) and transfer deed(s) duly signed to the Registrar to the Offer, Venture Capital and Corporate Investments Ltd., either by hand delivery or by Registered Post on or before the close of the Offer, in accordance with the instructions specified in the LOO and the FOA.

Collection Centre

Registrar to the Offer

Working days & timing

Venture Capital and Corporate Investments Ltd.

Regd. office 6-2-913/914, 3rd floor, Progressive Towers, Khairtabad, Hyderabad 500 004

Contact person: E. S. K. Prasad, Chief Executive

Phone No. : 040 – 23322262 / 64

Fax No. : 040 – 23324803

Email : vccil_hyd@yahoo.co.in

Monday to Saturday

9.a.m. to 1 p. m. &

2 p.m. to 5 p.m.

5. The Registrar to the Offer has opened a special depository account in NSDL with Stock Holding Corporation of India Limited styled “VCCIL – Escrow A/c – Matrix Laboratories Limited – Open Offer”. The DP ID is IN301022 and Beneficiary ID is 20702490. Shareholders having their beneficiary account in CDSL will have to use inter-depository delivery instruction slip for the purpose of crediting their shares in favour of the special depository account with NSDL.

6. Beneficial owners (holders of equity shares in Dematerialized Form) who wish to tender their equity shares will be required to send their FOA along with a photocopy of the delivery instructions in “ Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the Depository Participant (“DP”), in favour of the special depository account, to the Registrar to the Offer either by hand delivery or by Registered Post on or before the close of the Offer, in accordance with the instructions specified in the LOO and in the FOA. Shareholders should ensure to credit their shares in favour of depository before closure of the offer.

7. All owners of equity shares, registered or unregistered (except the Acquirer), are eligible to participate in the Offer. Unregistered owners can send their application in writing to the Registrar to the Offer, on a plain paper stating their Name, Address, No. of equity shares held, No. of equity shares offered, Distinctive Nos., Folio No., together with original share certificate(s), valid transfer deed(s) and the original contract note issued by the broker through whom they acquired their shares. No indemnity is required from the unregistered owners.

8. In case of non-receipt of the LOO, the eligible persons may send their consent, to the Registrar to the Offer, on a plain paper stating their Name, Address, No. of equity shares held, No. of equity shares offered, Distinctive Nos., Folio No., along with documents as mentioned above, so as to reach the Registrar to the Offer on or before the close of the Offer, or in case of beneficial owner, they may send the application in writing to the Registrar to the Offer, on a plain paper stating their Name, Address, No. of equity shares held, No. of equity shares offered, DP name, DP ID, beneficiary account number and a photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP, in favour of the special depository account, so as to reach the Registrar to the Offer, on or before the close of the Offer.

9. The Registrar to the Offer will hold in trust the shares / share certificates, shares lying in credit of the special depository account, FOA, if any, and the transfer form(s) on behalf of the shareholders of MATRIX who have accepted the Offer, till the cheques / drafts for the consideration and / or the unaccepted shares / share certificates are despatched / returned.

10. Attention of Shareholders is invited to the fact that the LOO along with FOA will also be available at SEBI's web site http://www.sebi.gov.in/ and eligible persons may download the FOA from the web site for applying in the offer.

11. In case, the number of shares offered for sale are more than the shares agreed to be acquired, the Acquirer shall accept the offers received on a proportionate basis, in consultation with the Manager to the Offer, ensuring that the basis of acceptance is decided in a fair and equitable manner. Unaccepted Share Certificate(s), transfer forms and other documents, if any, will be returned by registered post at the shareholders’ / unregistered owners’ sole risk to the sole / first shareholder. Shares held in demat form to the extent not accepted will be credited back to the beneficial owners’ depository account with the respective depository participant as per the details furnished by the beneficial owner in the FOA.

12. In terms of Regulation 22(5A), Shareholders shall have an option to withdraw acceptance tendered upto three Working Days prior to the date of closure of the offer by submitting the documents as specified below. The withdrawal can be exercised by submitting FOW as enclosed with Letter of Offer. In case of non-receipt of FOW, the withdrawal can be exercised by making plain paper application along with the following details :

i) In case of physical shares, by stating the Name, Address, Distinctive Nos., Folio No., No. of equity shares tendered, and;

ii) In case of dematerialized shares by stating the Name, Address, No. of equity shares offered, DP name, DP ID, beneficiary account number and a photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP, in favour of the special depository account.

13. A schedule of some of the major activities pertaining to the offer is given below:

Activity	Date
Specified Date	10^th February, 2003 (Monday)
Date by which LOO to be posted to Shareholders	22^nd March, 2003 (Saturday)
Date of Opening of the Offer	3^rd April, 2003 (Thursday)
Date of Closing of the Offer	2^nd May, 2003 (Friday)
Last Date for Competitive Bid	3^rd March, 2003 (Monday)
Last date for Revising the Offer Price / No. of Shares	22^nd April, 2003 (Tuesday)
Date for communicating rejection / acceptance (in part or full) and mailing of consideration for applications accepted	30^th May, 2003 (Friday)

a. General

1. Shareholders who have accepted the offer by tendering the requisite documents, in terms of the PA / LOO, shall have the option to withdraw acceptance tendered by them upto 28^th April, 2003 (Monday), being three working days prior to the date of closure of the Offer.

2. The Acquirer can revise the price upwards upto 7 working days prior to closure of the offer and revision, if any, in the offer price would appear in the same news papers where this PA has appeared and such revised Offer Price would be paid to all shareholders who tender their shares any time during the Offer and have been accepted under the Offer.

3. If there is a competitive bid / offer :

- The public offers under all the subsisting bids shall close on the same date.

- As the offer price cannot be revised during 7 working days prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final offer price of each bid and tender their acceptance accordingly.

4. The shareholders of MATRIX, VLL and MTIL have in their Extra-Ordinary General Meetings held on 9^th November, 2002, 9^th November, 2002 and 25^th November, 2002, respectively, approved the proposal of Merger of MTIL and VLL with MATRIX, and also approved the scheme of amalgamation. As per the agreed scheme of amalgamation, MATRIX shall issue :

i. Two equity shares of MATRIX of Rs 10/- each for every 13 equity shares held in MTIL.

ii. Two equity shares of MATRIX of Rs 10/- each for every 13 equity shares held in VLL.

The Appointed date of the agreed scheme of amalgamation is April 01, 2002. Petitions for Merger have been filed with the Hon’ble High Courts of Andhra Pradesh and Chennai and the scheme of amalgamation is subject to all the requisite judicial, regulatory and other approvals.

VLL is a manufacturer of bulk drugs and intermediates. As on 31.3.2002, the Company’s paid-up equity share capital was Rs 810 Lacs and its Networth was Rs 1,608.65 Lacs. For the year ended 31.12.2001, VLL registered total income of Rs 16,878.95 Lacs and loss of Rs 92.31 Lacs. For the Quarter ended 31.3.2002, total income was Rs 1,664.34 Lacs and loss was Rs 267.30 Lacs. VLL’s Shares are listed on HSE and BSE.

MTIL is a manufacturer of bulk drugs, pharmaceutical products and intermediates. As on 31.3.2002, the Company’s paid-up equity share capital was Rs 1,924.45 Lacs and its Networth was Rs 659.49 Lacs. For the year ended 31.3.2002, MTIL registered total income of Rs 3,955.58 Lacs and a loss of Rs 483.34 Lacs. MTIL’s shares are listed on National Stock Exchange, BSE and Madras Stock Exchange.

5. Based on the information available, Acquirers have not been prohibited by SEBI from dealing in securities in terms of directions issued under Section 11B of SEBI Act. Also based on the information available, MATRIX has not been prohibited by SEBI from dealing in securities in terms of directions issued under Section 11B of SEBI Act.

6. Attention of the Shareholders is invited to the fact that this Public Announcement will also be available at SEBI’s web site http://www.sebi.gov.in/.

7. Non-Resident shareholders should also enclose copy of the permission received by them from RBI to acquire shares held by them in MATRIX.

8. The Acquirers jointly and severally accept full responsibility for the information contained in this Public Announcement and also for the obligations of Acquirers laid down in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments made thereto.

This public announcement is issued on behalf of the Acquirers :

1. Mr. N. Prasad of Plot No. 27, Rukminidevi Colony, Near AOC Gate, Secunderabad.

2. Mr. M. Ravinder of 3-6-100/1, West Maredpally, Secunderabad.

3. Alltime Formulations Limited. Registered Office : 3-6-100/1, West Maredpally, Secunderabad.

4. G2 Corporate Services Limited. Registered Office : Plot Nos. 38, 39, 50 & 51, IDA, Phase IV, Jeedimetla, Hyderabad.

By Manager to the Offer :

SMIFS CAPITAL MARKETS LIMITED,

15B, Chander Mukhi

Nariman Point

Mumbai – 400 021.

Tel. No. : 2284 6264 / 65 / 66

Fax No. : 2284 6269

Email : smifscap@smifs.com

ravindra@smifs.com

Contact Person : Sandip Maniar / Ravindra Nath

Registrar to the Offer :

Venture Capital and Corporate Investments Ltd.