DIRECTORS' REPORT

Your Directors have pleasure in presenting their 29th Annual Report together with the Audited Accounts of the Company for the Year ended March 31, 2015.

                                                                                                                                                                              (Rs. in Lacs )

OPERATIONAL REVIEW

Gross revenues increased to Rs. 821.12 lacs, a growth of around 5.32 % against Rs. 779.60 lacs in the previous year.    Profit before Interest, depreciation and taxation was Rs. 55.81 lacs against Rs. 47.30 lacs in the previous year.   After providing for interest, depreciation and taxation of Rs. 46.16 lacs,   the net profit of the Company for the year under review was placed at Rs. 9.65 Lacs as against Rs. 6.65 lacs in the previous year.

Due to tough market conditions the company’s gross turnover has increased at a marginal 5% during the year under review.  (industry growth in 2014-15 – 7%)  However, the profit after tax has increased by 45% due to cost control measures taken by the Management.

DIVIDEND

Your Directors are unable to recommend any dividend during the year under review, considering the small surplus available and with a view to conserve funds towards margin monies.

SHARE CAPITAL

The paid up equity capital as on March 31, 2015, was Rs 354.39 lacs.  During the year under review your Company has not issued any shares including Sweat equity, ESOP and/or convertible debentures.

FINANCE

Cash and cash equivalents as on March 31, 2015, was at Rs. 177.53 lacs.   The company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.   The scope and authority of the Internal Audit function is defined.   To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.  The Audit Committee reviews the adequacy and effectiveness of the internal control system and suggests improvement to strengthen the system.  It also reviews the quarterly internal Audit Reports.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Not applicable to the Company.

CONSERVATION OF ENERGY

a)  Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b)   No specific investment has been made in reduction in energy consumption during the year under review, though, a Baby boiler is already in place to generate steam as power in certain operations.  However pharmaceutical formulation industry does not consume high power.

c)  As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

TECHNOLOGY ABSORPTION

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities.   Therefore no technology absorption is required.  The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

FOREIGN EXCHANGE EARNINGS AND OUT-GO

During the period under review there was no foreign exchange earnings or out flow.

DIRECTORS

Director, Dr. L. S. Mani, who retires by rotation and being eligible, offers himself for re appointment.  The Directors recommend Dr. L. S. Mani for re-appointment.

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its  Committees.    The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has, on the recommendation of the Appointment & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management personnel and their remuneration.   The Remuneration Policy is stated in the Corporate Governance Report.

Meetings of Board of Directors

During the year seven Board Meetings and four Audit Committee Meetings were convened and held,    the details of which are given in the Corporate Governance Report.   The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Directors’ Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state 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 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 or loss of the Company for the year under review;

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The directors have prepared the annual accounts, on a going concern basis;

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company.   The Company believes in “Zero Tolerance” against bribery, corruption and unethical dealing/behaviors of any form and the Board has laid down the directives to counter such acts.   The code laid down by the Board is known as “Code of business conduct”.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.  The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code.   All Management Staff were given appropriate training in this regard.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any.  The FRM Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

The Board of Directors has adopted Whistle Blower Policy.  The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.   All permanent employees of the Company are covered under the Whistle Blower Policy.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company.    The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.  The Board is responsible for implementation of the Code.  All Board of Directors and the designated employees have confirmed compliance with the Code.

AUDITORS

The Auditors, S. V. Bhat & Co., Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

SECRETARIAL AUDIT AND AUDIT REPORT

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Sanjay Dholakia & Associates, (CP No. 1798) a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company.   The Secretarial Audit report is annexed herewith as “Annexure A”.

With regard to the observation made in the said report, regarding the non-appointment of Company Secretary, the Board of Directors would like to inform the members that the Managing Director,           Dr. L. S. Mani, is himself a qualified Company Secretary ( ACS No. 4622) and he is devoting adequate time to undertake all the secretarial work, currently.   However, the Company is in the process of appointing a Company Secretary.

COST AUDIT

The Cost Audit Compliance certificate as per Section 209(1) of the Companies Act, 1956, read with the provisions of the Companies (Cost Audit Report) Rules 2011, for the period 1.4.2013 to 31.3.2014, was filed by the Cost Auditors during the year.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure B”.

I)                   The information to be furnished as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, is as under:

i)   The percentage increase in remuneration of each Director,  during the financial year 2014-15, ratio of the remuneration of each Director to  the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:-

ii)   The median remuneration of employees of the Company during the financial year 2014-15 was 2.92 lacs.

iii)   In the financial year there was an increase of 10.12% in the median remuneration of employees.

iv) There were 54 permanent employees in the Company as on 31.03.2015.

v)   Relationship between average increase in remuneration and Company performance, the profit after tax of Rs. 9.65 lacs for the financial year 2014-15 is higher compared to the previous year profit after tax of Rs. 6.65 lacs; where as the increase in the median remuneration was 10.12%; the average increase in median remuneration was in line with the Company policies and the market conditions.

vi) Comparison of Remuneration of the Whole Time Director and Key Managerial Personnel(s), against the performance of the Company:

a)   The total remuneration of Key Managerial Personnel increased by 9.10% from 16.81 lacs in 2013-14 to 18.35 lacs in 2014-15; where as the profit after tax was increased by Rs. 3 lacs in 2014-15.

vii) The market capitalization as on 31st March, 2015 and 31st March, 2014, was Rs. 6.76 Crores and Rs. 1.97 Crores respectively.

viii)  Price earning ratio of the Company was 0.21.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request.  In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting.    If any member is interested in inspecting the same, such member may write to the Company in advance.

INDUSTRIAL RELATION AND HUMAN RESOURCES

Industrial relation during the period under review remained cordial at all levels.    The Company has a structured appraisal system based on key result areas.   The HR is effectively involved in nurturing, enhancing and retaining talent through job satisfaction, development and training programs etc.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion &  Analysis Report, which form an integral part of this Report, are set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

KEY MANAGAERAL PERSONS:

During the year under review, the Company has complied with the provisions of section 203 of the Companies Act, 2013, which provides for the appointment of Key Managerial Personnel details of which are available on the website of the Company.

LISTING FEES

The company has paid Listing fees to BSE for the year 2015-16.

ACKNOWLEDGEMENT

Company and its Directors wish to extend their sincerest thanks, to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and Workers at all levels for their continuous cooperation and assistance.

                                                                                                                         For and on behalf of the

                                                                                                                            Board of Directors

 Mumbai                                                                                                           Dr. L. S. Mani

15th July, 2015                                                                                                (Managing Director)

                                                                                                                          (DIN: 00825886)