Directors' Report

Your Directors are pleased to present the 29th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2014

THE YEAR UNDER REVIEW:

Your Company has successfully completed 29 years of operation. Your Company's key businesses have reported an encouraging performance for the year ended 31st March 2014.

OPERATIONS:

Net Sales of the Company were Rs. 29045.68 lacs as compared to Rs.35368.32 lacs in the previous year. Profit before tax was Rs. 8229.84 as compared to Rs. 10483.23 lacs in the previous year. Profit after tax was Rs. 5392.65 as compared to Rs. 5668.20 lacs in the previous year. The Company booked a profit of Rs. 2096.46 due to foreign Exchange fluctuation and better Foreign Exchange management.

DIVIDEND:

Your Directors are pleased to recommend payment of final Dividend at the rate of Rs. 0.50 per Equity Share (i.e.50.00%) Equity share of Rs. 1/- each for the year ended 31st March 2014.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A) CONSERVATION OF ENERGY:

The Company continues its policy of encouraging energy conservation measures. The regular review of energy consumption and the systems installed to control utilization of energy is undertaken.

B) RESEARCH DEVELOPMENT ACTIVITIES:

The Company continues to expand on the capabilities of its formulation and analytical development teams at its R&D center, which received DSIR approval over the recently concluded financial year. The R&D Centre conducts development and stability studies across the product lifecycle. This entails designing a product and its manufacturing process to consistently deliver its intended performance whilst maintaining key quality target profile-attributes.

The investment into R&D over the last few years has started to pay dividends as the Company has been able to register new products in new markets. Continous investment in R&D will be critical to enable the Company to increase the reach of its products and expertise and thus drive growth.

C) TECHNOLOGY ABSORPTION:

The Company is equipped with technologies from world's leaders.

AUDITORS:

M/s B. K. Khare & Co., Chartered Accountants, Mumbai retire as Auditors of the company at the conclusion of the ensuing Annual General Meeting. They have signified their willingness to get re-appointed and have given declaration to the effect that if re-appointed their appointment will be within the limits fixed under section 224(1)(B) of the Companies Act, 1956. The Audit committee recommends the re-appointment of M/s B. K. Khare & Co. as Auditor of the company for the financial year 2014-2015.

AUDITORS REPORT:

The Auditors have not made any qualification to the financial statements, in their reports or relevant notes to accounts, which are self explanatory and do not call for any comments under section 217 (3) of the Companies Act, 1956.

CORPORATE GOVERNANCE:

In pursuance of the system of Corporate Governance instituted by SEBI, forming part of the Listing Agreement with the Stock Exchange, a report thereon is separately attached to this report as per clause 49 of the Listing Agreement.

INSURANCE OF ASSETS:

All the fixed assets, finished goods, semi-finished goods, raw material, packing material and goods of the company lying at different locations have been insured against fire and allied risks.

BANK AND FINANCIAL INSTITUTIONS:

Directors are thankful to their bankers for their continued support to the company.

EMPLOYER/EMPLOYEE RELATIONS:

The relationship with the workers of the Company's manufacturing units and other staff has continued to be cordial. The Directors wish to put on record their sincere appreciation and gratitude for the services rendered by the workers and staff at all levels

HUMAN RESOURCES:

We take this opportunity to thank employees at all levels for their dedicated service and contribution made towards the growth of the company.

PERSONNEL:

The Company has not paid any remuneration attracting the provisions (Particulars of Employees) Rules, 1975 read along with section 217(2A) of the Companies Act, 1956. Hence no information is required to be appended to this report in this regard.

DIRECTOR:

Mr. S.R. Vaidya, Independant Director who retired by rotation and being eligible offers himself for reappointment for a period of 5 years. Mr. Amarendra Mohapatra resigned as a Company Secretary of the company w.e.f 1st November, 2013 and Ms. Sushama Yadav was appointed as a Company Secretary w.e.f 1st November, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217(2AA) of the Statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors have prepared the accounts for the financial year ended 31st March 2014 on a 'going concern' basis.

(v) The internal financial controls laid and have been followed by the company and that such controls are adequate and are operating effectively. Such controls means controls and policies and procedures adopted and adherence by the company for orderly and efficient conduct of the business for safeguarding assets, prevention and detection of frauds and errors and maintenance of accounting records and timely preparation of financial statements and review its efficiency.

(vi) 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.

EXTRACT OF ANNUAL RETURNS:

1. The Paid up capital of the Company: Rs. 103,146,672 consisting of 103,146,672 equity shares of face value of Rs.!/- each.

2. The Board of Directors of the Company consists of 7 Directors. Out of which 4 promoter directors namely Mr. S. N. Kamath, Mr. Gautam R. Ashra, Ms. Shruti N. Kamath and Dr. Vibha N. Kamath. Mr. G.G. Desai, Mr. Mayank S. Mehta and Mr. S. R. Vaidya are three Independent Directors.

3. The secured debt of the Company is Rs. 6827.70 Lacs.

4. The Promoters holding is consists of 6,69,89,830 equity shares of Rs.!/- each amounting to 64.95 % .

5. There was un-paid dividend during the year.

CORPORATE SOCIAL RESPONSIBILITY:

Composition of Corporate Social Responsibility Committee as per the provisions of section 135 (2) of the Companies Act, 2013:

Composition, Name Of Members

1 Mr. S. R. Vaidya- Chairman

2 Mr. S. N. Kamath - Managing Director

3 Ms. Shruti N. Kamath -Director

4 Mr. Vipul B. Thakkar - Finance Manager

4 Ms. Sushama Yadav -Company Secretary

5 Mr. Ramesh Mishra - Company Secretary In Practice Over the years, we have been striving to achieve a fine balance on economic, environmental and social fronts, while also paying attention to the needs and expectations of our internal as well as external stakeholders. Our corporate social responsibility is not limited to philanthropy, but encompasses holistic community development, institution building and sustainability related initiatives.

DETAILS OF RELATED PARTY TRANSACTIONS/ CONTRACTS:

The details of such related party transactions are available in the Notes to the Standalone financial statements section of the Annual Report.

RISK MANAGEMENT POLICY:

The Company has instituted a risk management policy. The board of directors are periodically kept up to date on the business risks faced by the Company and the actions taken by management to mitigate these risks. The successful implementation of the SAP ERP system and the continuous expansion of its scope across business activities has allowed the Company to leverage IT to better manage risks and ensure efficiency.

INDEPENDENT DIRECTORS DECLARATIONS:

In the opinion of the Board, the independent directors are, individually, person of integrity and possess relevant expertise and experience.

The Independent Directors under section 149(6) of the Companies Act, 2013 declared that:

1. They are not a promoter of the Company or its holding, subsidiary or associate company;

2. They are not related to promoters or directors in the company, its holding, subsidiary or associate company.

3. The independent Directors have /had no pecuniary

relationship with company, its holding, subsidiary or associate company , or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

4. None of the relatives of the Independent Director has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent. or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

5. Independent Director, neither himself nor any of his relatives-

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of-

(A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent. or more of the gross turnover of such firm;

(iii) Holds together with his relatives two percent. or more of the total voting power of the company; or

(iv) is a Chief Executive or Director, by whatever name called, of any nonprofit organization that receives twenty-five percent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two percent. or more of the total voting power of the company;

6. Independent Director possesses such qualifications as may be directed by the Board.

7. The Company & the Independent Directors shall abide by the provisions specified in Schedule IV of the Companies Act, 2013.

NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP COMMITTEE

Pursuant to section 178 of the Companies Act, 2013, the Company has set up a Nomination and Remuneration and stakeholders Relationship Committee under the Chairmanship of the Independent Director Mr. S.R. Vaidya , Mr. G.G. Desai and Mr. Gautam R. Ashra.

Highlights of the Policy of the said committee:

1. For Appointment of Independent Director (ID):

a. He has to fulfill the requirements as per section 149 of the Companies Act, 1956 read with cl. 49 of the Listing Agreement;

b. Adhere to the code of conduct as per Schedule IV to the Companies Act, 2013;

c. Strictly adhere to the Insider Trading Regulation of the SEBI and Insider Trading policy of the Company;

d. I D should have adequate knowledge and reasonably able to contribute to the growth of the Company and stakeholders;

e. I D should be able to devote time for the Board and other meetings of the company;

f. Entitled for sitting fees and Reasonable conveyance to attend the meetings; and

g. Able to review the policy, participate in the meeting with all the stakeholders of the company at the Annual General Meeting.

PERFORMANCE OF THE BOARD AND COMMITTEE:

During the year under review, the performance of the Board & Committee and Individual Director(s) based on the below parameters was satisfactory:

1. Most of the Directors attended the Board meetings;

2. The remunerations paid to Executive Directors are strictly as per the company and industry policy. The Independent Directors only received sitting fees and Conveyance if any.

3. The Independent Directors contributed a lot based on their experience and knowledge and Independent views.

4. The Credit Policy, Loan Policy and compliances were reviewed;

5. Implementation of Risk Management Policy

ACKNOWLEDGMENTS:

Your Directors convey their sincere thanks to the Government, Banks, Shareholders and customers for their continued support extended to the company at all times. The Directors further express their deep appreciation to all employees for commendable teamwork, high degree of professionalism and enthusiastic effort displayed by them during the year.

On behalf of the Board of Directors.

GOVIND G. DESAI  

Chairman

S. N. KAMATH  

Managing Director

Place: Mumbai  

Dated: 26th May, 2014