Directors Report of Daikaffil Chemicals India Ltd.

Mar 31, 2017

Dear Members,

The Directors have immense pleasure in presenting their 25th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2017.

1. FINANCIAL RESULT

(Rs. in lakhs)

		2016-2017		2015-2016
Sales etc. and other income		2697.81		2799.21
Profit before Depreciation, Interest and Tax		507.99		366.50
Less: Depreciation	46.31		39.70
Interest	1.02		8.78
		47.33		48.48
Profit before Tax		460.66		318.02
Provision for Tax
Current Tax	(147.00)		(94.00)
Deferred Tax	(5.10)		(13.82)
Earlier Years	0.72		-
		(151.38)		(107.82)
Provision for Diminution in value of investment		---		---
Profit after Tax		309.28		210.20
Add: Balance Brought forward from the previous year		428.38		315.47
Profit available for Appropriation		737.66		525.67
Appropriation
Transfer to General Reserve		30.00		25.00
Proposed Dividend		--		60.00
Corporate Dividend Tax thereon		--		12.29
Balance carried forward		707.66		428.38
		737.66		525.67

2. OPERATIONS

During the year under review, your Company''s Revenue from operations has declined by 4 % i.e. from Rs.27.99 crores in previous year to Rs.26.98 crores.However, the Company has focused on the sales of Products with higher margin, which has resulted in 45% i.e. from Rs.318.02 lacs in previous year to Rs.460.66 lacs in current year.

3. DIVIDEND

The Board of Directors is pleased to recommend the final dividend of Rs.1.70/- per Equity shares of Rs.10/- each, (one-time special dividend of Rs.0.50/- per equity share for the Silver Jubilee year and Rs.1.20/- for the financial year 2016-2017).

4. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committee. A separate meeting of the Independent Directors was convened on 10th February 2017, which reviewed the performance of the Board, the Non-Independent Directors and the Chairman.

5. RISK MANAGEMENT POLICY

The Board has been vested with specific responsibilities in assessing of risk management policy, process and system. The Board has evaluated the risks which may arise from the external factors such as economic conditions, regulatory framework, competition etc. The Executive management has embedded risk management and critical support functions and the necessary steps are taken to reduce the impact of risks. The Independent Directors expressed their satisfaction that the systems of risk management are defensible.

The Risk management policy is available on the website of the Company.

6. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. As on 31st March, 2017, no unclaimed deposits are lying with the Company.

7. CONSOLIDATED FINANCIAL STATEMENT

The Audited Consolidated Financial Statement for the financial year ended March 31, 2017, based on the financial statement received from associate company, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on ‘Consolidated Financial Statement'' read with AS-23 on ‘Accounting for Investments in Associates'', notified under the Act, read with the Accounting Standards Rules as applicable is forming part of Annual Report.

8. STATUTORY AUDITORS

At the Annual General Meeting held on August 21, 2015 M/s. Manish Patel and Company, Chartered Accountants, Mumbai, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2019-20. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

The Company has received Eligibility certificate letter dated 22nd April 2017 from them to the effect that their ratification, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. Your Directors recommend their appointment as Statutory Auditors of the Company.

9. AUDITORS REMARKS AND OBSERVATION

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. The Auditors'''' Report does not contain any qualification, reservation or adverse remark.

Further, during the year, in the course of the performance of their duties as auditor, no fraud were reported by them which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company.

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

As required under Section 134 (3) (m) of the Companies Act, 2013 read together with the Rule 8 of the Companies (Accounts) Rules, 2014 the relevant information is given below.

Conservation of Energy and Technology Absorption

Your Company has installed a wet scrubber on boiler which will reduce the consumption of coal and more importantly protect the environment. This will minimize the carbon particles being released in the atmosphere. A tertiary treatment plant on line to reduce the water pollution load has also been installed.

The electrical instruments have been connected on line which has reduced the power consumption. Our Japanese collaborators have guided us on regular basis and there by conserve energy and reduce our waste water load.

(Rs. in Lakhs)

Foreign Exchange Earnings: 1880.34

Foreign Exchange Outgo 579.45

11. DIRECTORS:

There were no changes in Board of Directors during the financial year 2016-2017

Mrs. Maithili Siswawala, retires by rotation at this Annual General Meeting and being eligible offers herself for reappointment.

Declaration by Independent Director(s)

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under section (6) of section 149 of the Companies'' Act 2013.

12. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS U/S 186:

The Company has not given any loans covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

13. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes / events occurring after balance sheet date till the date of the report to be stated.

14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE

During the financial year under review the Board met 4 times and Audit Committee met 4 times. 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.

15. SUBSIDIARY / ASSOCIATE COMPANY

The Company has an Associate company namely M/s Erca Specialty Chemicals Private Limited.

16. RELATED PARTY TRANSACTIONS:

During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of the related parties were in conflict with the Company''s interest. All related party transactions are negotiated on an arm''s length basis and are intended to further the Company''s interest.

17. DETAILS OF ESTABLISHMENTOF VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Company''s website www.daikaffil.com

18. NOMINATION AND REMUNERATION COMMITTEE

During the financial year under review 1 (one) meeting of the Committee was held. The Board has, on the recommendation of the Nomination& Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the Directors'' Responsibility Statement in terms of Section 134(3) (c) of the Companies Act, 2013 and confirm 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 have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

20. PARTICULARS OF EMPLOYEES

The Company does not have any employee whose particulars are required to be given pursuant to Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.

21. PERSONNEL:

Industrial relations at the Company''s factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

22. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the continued support and co-operation by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board of Director,

DAIKAFFIL CHEMICALS INDIA LIMITED

AMIT PATEL ADITYA PATEL

Managing Director Jt. Managing Director

(DIN: 00005232) (DIN: 00005276)

---

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting their 24th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.

1. FINANCIAL RESULT

	2015-2016 (Rupees)		2014-2015 (Rupees)
Sales etc. and other income		27,99,21,280		34,30,70,013
Profit before Depreciation, Interest and Tax		3,66,50,232		2,77,27,908
Less: Depreciation	39,70,152		41,73,426
Interest	8,77,661		19,71,586
		4,847,813		61,45,012
Profit before Tax		3,18,02,419		215,82,896
Provision for Tax
Current Tax	(94,00,000)		(68,00,000)
Deferred Tax	(13,82,634)		2,67,307
Earlier Years	-		4,93,385
		(1,07,82,634)		(60,39,308)
Provision for Diminution in value of investment		-		(26,436)
Profit after Tax		2,10,19,785		1,55,17,152
Add: Balance Brought forward from the previous year		3,15,46,996		2,61,84,944
Profit available for Appropriation		5,25,66,781		4,17,02,096
Appropriation
Transfer to General Reserve		25,00,000		25,00,000
Proposed Dividend		60,00,000		48,00,000
Corporate Dividend Tax thereon		12,28,800		9,83,040
Effect of revision of life of fixed assets		-		18,72,060
Balance carried forward		4,28,37,981		3,15,46,996
		5,25,66,781		4,17,02,096

2. OPERATIONS

During the year under review, your Company''s Revenue from operations has declined by 20% i.e. from Rs. 34.30 crores in previous year to Rs. 27.99 crores. However, the Company has focused on the sales of Products with higher margin, which has resulted in 47% i.e. from Rs. 215.82 lacs in previous year to Rs.318.02 lacs in current year.

3. DIVIDEND

The Board of Directors is pleased to recommend the dividend of Rs. 1/- per Equity share (on the face value of Rs. 10/- each) for the financial year ended 31st March, 2016.

4. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, and Nomination and Remuneration Committee. A separate meeting of the Independent Directors was convened, which reviewed the performance of the Board, the Non-Independent Directors and the Chairman.

5. RISK MANAGEMENT POLICY

The Board has been vested with specific responsibilities in assessing of risk management policy, process and system. The Board has evaluated the risks which may arise from the external factors such as economic conditions, regulatory framework, competition etc. The Executive management has embedded risk management and critical support functions and the necessary steps are taken to reduce the impact of risks. The Independent Directors expressed their satisfaction that the systems of risk management are defensible.

6. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. As on 31st March, 2016, no unclaimed deposits are lying with the Company.

7. CONSOLIDATED FINANCIAL STATEMENT

The Audited Consolidated Financial Statement for the financial year ended 31st March, 2016, based on the financial statement received from associate Company, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on ‘Consolidated Financial Statement'' read with AS-23 on ‘Accounting for Investments in Associates'', notified under the Act, read with the Accounting Standards Rules as applicable is forming part of Annual Report.

8. STATUTORY AUDITORS

At the Annual General Meeting held on 21 August, 2015 M/s. Manish Patel and Company, Chartered Accountants, Mumbai, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2019-20. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

The Company has received letters from them to the effect that their ratification, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. Your Directors recommend their appointment as Statutory Auditors of the Company.

9. AUDITORS REMARKS AND OBSERVATION

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. The Auditors'''' Report does not contain any qualification, reservation or adverse remark.

Further, during the year, in the course of the performance of their duties as auditor, no fraud were reported by them which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company.

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

As required under Section 134 (3) (m) of the Companies Act, 2013 read together with the Rule 8 of the Companies (Accounts) Rules, 2014 the relevant information is given below.

Conservation of Energy and Technology Absorption

Your Company has installed a wet scrubber on boiler which will reduce the consumption of coal and more importantly protect the environment. This will minimize the carbon particles being released in the atmosphere. A tertiary treatment plant on line to reduce the water pollution load has also been installed.

The electrical instruments have been connected on line which has reduced the power consumption. Our Japanese collaborators have guided us on regular basis and there by conserve energy and reduce our waste water load.

Foreign Exchange Earnings and Outgo:

(Rs.in Lacs)

Foreign Exchange Earnings: 1705.09

Foreign Exchange Outgo 588.75

11. DIRECTORS:

There were no changes in Board of Directors during the financial year 2015-2016

Mr. Aditya Patel, retires by rotation at this Annual General Meetinf and being eligible offers himself for reappointment Declaration by Independent Director(s)

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under section (6) of section 149 of the Companies'' Act 2013.

12. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS U/S 186:

The Company has not given any loans covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

13. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes / events occurring after balance sheet date till the date of the report to be stated.

14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE

During the financial year under review the Board met 4 times and Audit Committee met 4 times. 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.

15. SUBSIDIARY / ASSOCIATE COMPANY

The Company has an Associate Company namely M/s Erca Speciality Chemicals Private Limited.

16. RELATED PARTY TRANSACTIONS:

During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of the related parties were in conflict with the Company''s interest. All related party transactions are negotiated on an arm''s length basis and are intended to further the Company''s interest.

17. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Company''s website www.daikaffil.com

18. NOMINATION AND REMUNERATION COMMITTEE

During the financial year under review 1 (one) meeting of the Committee was held. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the Directors'' Responsibility Statement in terms of Section 134(3) (c) of the Companies Act, 2013 and confirm 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 have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

20. PARTICULARS OF EMPLOYEES

The Company does not have any employee whose particulars are required to be given pursuant to Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.

21. PERSONNEL:

Industrial relations at the Company''s factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

22. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the continued support and co-operation by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and On Behalf of the Board of Director,

DAIKAFFIL CHEMICALS INDIA LIMITED

AMIT PATEL ADITYA PATEL

D_at_e: M_ay 13 2016 Managing Director Jt. Managing Director

Place: Mumbai (DIN: 00005232) (DIN: 00005276)

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 23rd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31st, 2015.

1. FINANCIAL RESULT

2014-2015 2013-2014 (Rupees) (Rupees)

Sales etc. and other income 34,30,70,013 33,69,04,333

Profit before Depreciation, Interest and Tax 2,77,27,908 3,21,43,659

Less: Depreciation 41,73,426 61,04,085

Interest 19,71,586 28,87,394

61,45,012 89,91,479

Profit before Tax 2,15,82,896 2,31,52,180

Provision for Tax

Current Tax (68,00,000) (80,00,000)

Deferred Tax 2,67,307 (5,77,073)

Earlier Years 4,93,385

(60,39,308) (85,77,073)

Provision for Diminution in value of investment (26,436) (2,19,946)

Profit after Tax 1,55,17,152 1,43,55,161

Add: Balance Brought forward from the previous year 2,61,84,944 1,99,45,543

Profit available for Appropriation 4,17,02,096 3,43,00,704

Appropriation

Transfer to General Reserve 25,00,000 25,00,000

Proposed Dividend 48,00,000 48,00,000

Corporate Dividend Tax thereon 9,83,040 8,15,760

Effect of Revision of Life of Fixed Assets 18,72,060 -

Balance carried forward 3,15,46,996 2,61,84,944

4,17,02,096 3,43,00,704

2. OPERATIONS

The Company has registered a record performance over previous year, despite challenging macro economic conditions, high inflation, depreciation of the Indian Rupee against the US Dollar and Euro coupled with negative business sentiments prevailing throughout the year and across the Industry. Thanks to the sustained drive and team work of the entire organization, performance remained as top priority on the agenda. This resulted into sales growth and Increase in profitability which should be considered satisfactory.

Your Company has maintained the growth this year as well. Our Revenue from operations increased by 1.83 % i.e. from Rs.33.69 crores in previous year to Rs.34.30 crores in current year. Profit before tax decreased by 6 % i.e. from Rs.229.32 lacs in previous year to Rs.215.56 lacs in current year.

3. DIVIDEND

The Board of Directors is pleased to recommend the final dividend of Rs.0.80 per share (on the face value of Rs.10 each) for the financial year ended 31st March, 2015.

4. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, and Nomination and Remuneration Committee. A separate meeting of the Independent Directors was convened, which reviewed the performance of the Board, the Non-Independent Directors and the Chairman.

5. RISK MANAGEMENT POLICY

The Board has been vested with specific responsibilities in assessing of risk management policy, process and system. The Board has evaluated the risks which may arise from the external factors such as economic conditions, regulatory framework, competition etc. The Executive management has embedded risk management and critical support functions and the necessary steps are taken to reduce the impact of risks. The Independent Directors expressed their satisfaction that the systems of risk management are defensible.

6. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. As on 31st March, 2015, no unclaimed deposits are lying with the Company.

7. STATUTORY AUDITORS

M/s. Manish Patel and Company, Chartered Accountants, Mumbai, (Registration No. 126272W), the Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and they are eligible for appointment. They have furnished a certificate to the effect that their appointment, if made, will be in accordance with the provisions of Section 139 (1) and other applicable provisions of the Companies Act, 2013 read with the Companies' (Audit and Auditors) Rules, 2014, to hold office from conclusion of ensuing Annual general meeting until the conclusion of 27th Annual General Meeting of the Company to be held in the financial year 2020.

Your Directors recommend their appointment as Statutory Auditors of the Company.

8. EXTRACTOFTHEANNUALRETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure A"

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

As required under Section 134 (3) (m) of the Companies Act, 2013 read together with the Rule 8 of the Companies (Accounts) Rules, 2014 the relevant information is given below.

Conservation of Energy And Technology Absorption

Your Company has installed a wet scrubber on boiler which will reduce the consumption of coal and more importantly protect the environment. This will minimize the carbon particles being released in the atmosphere. A tertiary treatment plant on line to reduce the water pollution load has also been installed.

The electrical instruments have been connected on line which has reduced the power consumption. Our Japanese collaborators have guided us on regular basis and there by conserve energy and reduce our waste water load.

A sum of Rs.6.50 lacs has been spent during the year to conserve the energy and reduce other operating costs.

Foreign Exchange Earnings and Outgo

(Rs in Lacs)

Foreign Exchange Earnings: 2202.95

Foreign Exchange Outgo 1095.97

10. DIRECTORS

During the year under review the composition of Board of Directors was reconstituted as per the provision 149 of the Companies Act 2013 and the rules made there under and as per the revised Clause 49 of Listing Agreement.

The following changes in the Board took place during the year.

A) Changes in Directors and Key Managerial Personnel

Dr. Giuseppe Secommandi was appointed as Independent Director in last Annual General Meeting through oversight, however the Board has reappointed him as a Non executive Director other than Independent Director in its meeting held on 8th November 2014.

Mr. Sishir Amin retired from the position of Managing Director of the Company with effect from January, 1st, 2015. The Board places on record their appreciation of the valuable advice and guidance given by him while he was a Managing Director.

Mr. Amit Patel resigned as Chairman w.e.f. January 1st, 2015 and however continued as a Director. He was appointed as a Managing Director by the Board w.e.f. January 1st, 2015. An ordinary resolution is proposed for appointment of Mr. Amit Patel as Managing Director at this Annual General Meeting.

Mr. Sudhir Patel was appointed as a Chairman w.e.f from January, 1st 2015.

Mr. Rajiv Gandhi was appointed as an Alternate Director in place of Dr. Giuseppe Secommandi, Non Executive Director w.e.f. 13th February 2015.

Mr. Sunil Merchant was appointed as an Alternate Director in place of Mr. Hiroshige Tanaka, Independent Director w.e.f. 13th February 2015.

The Board of Directors had appointed Mrs. Maithili Siswawala as Additional Director in the category of Woman Director with effect from 17th March 2015. Her terms of office expire at this Annual General Meeting pursuant to the provision of section 161(1) of Companies Act 2013. An Ordinary Resolution is proposed to appoint her as a Director at this Annual General Meeting

Dr. Giuseppe Secommandi, retires by rotation at this Annual General Meeting and being eligible offers himself for re- appointment.

B) Declaration by an Independent Director(s) and re- appointment, if any

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under section (6) of section 149 of the Companies' Act 2013.

11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE

During the financial year under review the Board met 6 (Six) times and Audit Committee met 5 (Five) times. 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.

12. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a vigil mechanism for Directors, employees any other individual or organization to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Law or any other concerns/grievances. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blower Policy is available on Company's website.

13. NOMINATION AND REMUNERATION COMMITTEE

During the financial year under review 4 (four) meeting of the Committee were held. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The policy on Nomination & Remuneration is annexed herewith as "Annexure B".

14. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Dinesh Kumar Deora, (Membership No. FCS 5683, COP No. 4119) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report in Form MR - 3 is annexed herewith as "Annexure C"

15. CORPORATE GOVERNANCE

The Corporate Governance are set out as separate "Annexure D" 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.

16. MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Management Discussion & Analysis Report, which form an integral part of this Report, is annexed herewith as "Annexure E"

17. DIRECTORS' RESPONSIBILITY STATEMENT

Your directors make the Directors' Responsibility Statement in terms of Section 134(3) (c) of the Companies Act, 2013 and confirm 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.

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

18. PARTICULARS OF EMPLOYEES

The information required under Section 197 read with Rule, 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, is annexed herewith as "Annexure F"

The Company does not have any employee whose particulars are required to be given pursuant to Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.

19. PERSONNEL

Industrial relations at the Company's factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

20. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the continued support and co-operation by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board,

AMIT PATEL ADITYA PATEL Mumbai, May 29, 2015 Managing Director Jt. Managing Director (DIN : 00005232) (DIN : 00005276)

---

Mar 31, 2014

Dear Members,

The Directors are pleased to present their Twenty Second Annual Report together with the Audited statement of Accounts along with the Report of the Auditors for the year ended 31st Match, 2014

FINANCIAL RESULTS:

2013-2014 2012-2013 (Rupees) (Rupees)

Sales etc. and other income 336,904,333 303,869,615

Profit before Depreciation, Interest and Tax 32,143,659 023,246,385

Less: Depreciation 6,104,085 5,617,696

Interest 2,887,394 2,847,087

8,991,479 8,464,783

Profit before Tax 23,152,180 14,781,602

Provision for Tax

Current Tax (80,00,000) (4,900,000)

MAT Credit / (Set off) -- (258,000)

Deferred Tax (577,073) 63,045

(8,577,073) (5,094,955)

(Excess)/Short Provision Tax (32,725)

Provision for Dimunition in value of investment (219,946) --

Prior Period Expenses --

Excess Depreciation Charged -- 96,700

in previous years --

Profit after Tax 14,355,161 9,750,622

Add: Balance Brought forward from the previous year 19,945,543 15,227,946

Profit available for Appropriation 34,300,704 24,978,568

Appropriation

Transfer to General Reserve 2,500,000 1,500,000

Proposed Dividend 4,800,000 3,000,000

Corporate Dividend Tax Thereon/short provision of Dividend Tax 815,760 5,33,025

Balance carried forward 26,184,944 19,945,543

34,300,704 24,978,568



REVIEW OF OPERATIONS:

The Company has registered a record performance over previous year, despite challenging macro economic conditions, high inflation, depreciation of the Indian Rupee against the US Dollar and Euro coupled with negative business sentiments prevailing throughout the year and across the Industry. Thanks to the sustained drive and team work of the entire organization, performance remained as top priority on the agenda. This resulted into sales growth and Increase in profitability which should be considered satisfactory.

Revenue from operations increased by 11% i.e. from Rs. 30.39 crores lacs in previous year to Rs. 33.69 crores in current year. Exports increased by 12% i.e. from Rs. 21.25 crores in previous year to Rs. 23.82 crores in current year. Profit before tax increased by 54% i.e. from Rs. 148.78 lacs in previous year to Rs. 229.32 lacs in current year

DIVIDEND:

Based on the satisfactory performance for the year, the Board of Directors are pleased to recommend a dividend of Re 0.80/- per share on 60,00,000 Equity shares of the nominal value of Rs. 10/- each aggregating to Rs. 48.00 Lacs excluding dividend tax.

DIRECTORS:

Mr. Aditya Patel (DIN: 00005276) retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

Mr. Hiroshige Tanaka (DIN: 05247491), Director retires by rotation at ensuing Annual general meeting. In order to give effect to the applicable provisions of section 149 and 152 of the Companies Act 2013, Mr. Hiroshige Tanaka be appointed as an Independent Director of the Company to hold office for 5 consecutive years for a term up to the conclusion of the 27th Annual general Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchange.

Their re-appointment would immensely benefit the Company looking at their business knowledge and expertise.

CORPORATE GOVERNANCE:

The Company is committed to compliance standards ensuring checks and balances between the Board and Management, as well as a sustainable approach to create value for all stakeholders.

A separate section on Corporate Governance, management discussion and analysis and a certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with BSE Limited forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

The Company does not have any employee of the category specified in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDIT COMMITTEE:

As per the requirements of the Companies Act, 1956 and Listing Agreement, the Company has an Audit Committee consisting of two Independent Directors and One Executive Director namely Mr. Sudhir Patel, Mr. Jagdish J. Vasa and Mr. Sishir Amin. The Audit Committee met on four occasions on 30-05-2013, 14-08-2013, 11-11-2013 and 13-02-2014.

CERTIFICATIONS

Your Company is pleased to inform its members that its Optical Brighteners have been accorded the GOTS (Global Organic Textile Standard) Version 3.0 March 2011 certification for Textiles by CONTROL UNION CERTIFICATIONS.

This would definitely assist the Company in having a better edge in the market of its optical brighteners both in the export and domestic markets in the long run and establish its "DIKAPHOR" brand name in the textile segment in the international and local markets.

Your Company has been granted the status of ''STAR EXPORT HOUSE'' by Ministry of Commerce and Industry for export performance of Rs. 100 crores [arrived at by double weightage] entitled to the Company on account of our holding ISO 9001:

2008 certification during the last three accounting years.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Your Directors wish to inform Members that the Audited Accounts containing Financial Statements for the Financial Year 2013-2014 are in full conformity with the requirement of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Company''s financial condition and results of operations. Your Directors further confirm that:

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(2) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(3) The directors have taken proper and sufficient care of 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;

(4) The directors have prepared the annual accounts on a going concern basis.

SAFETY AND ECOLOGY:

Your Company continues to accord the highest priority to Environment, Occupational Health and Safety with a view to progressively achieve international standards while ensuring compliance with statutory requirements.

FIXED DEPOSITS:

The Company has not accepted any Deposit from the Public during the year under review. As on 31st March, 2014, no unclaimed deposits are lying with the Company.

INSURANCE:

All the Fixed Assets have been adequately insured.

AUDITORS:

M/s Gaurang Merchant & Co. (Registration No. 103111W), the retiring Auditors, are eligible for re-appointment and have furnished a certificate to the effect that their re-appointment, if made, will be in accordance with the provisions of section 139 (2) and other applicable provisions of the Companies Act, 2013 read with the Companies'' (Audit and Auditors) Rules, 2014, to hold office from conclusion of ensuing Annual General Meeting until the conclusion of 27th Annual General Meeting.

AUDITORS REPORT:

There are no qualifications / remarks in the Audit Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

As required under Section 217(1) (e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 the relevant information is given below. Relevant data in respect of energy consumption is as below.

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement, the Company declares that its Equity Shares are listed on the BSE Limited.

PERSONNEL:

Industrial relations at the Company''s factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the continued support and co-operation by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board,

(AMIT J. PATEL) Mumbai, May 23, 2014 EXECUTIVE CHAIRMAN

---

Mar 31, 2013

Dear Members,

The Directors are pleased to present their Twenty first Annual Report together with the Audited statement of Accounts along with the Report of the Auditors for the year ended 31st Match, 2013

FINANCIAL RESULTS:

2012-2013 2011-2012 (Rupees) (Rupees)

Sales etc. and other income 304,049,100 214,118,898

Profit before Depreciation, Interest and Tax 232,46,385 10,262,488

Less: Depreciation 5,617,696 4,801,582

Interest 2,847,087 2,068,551

8,464,783 6,870,133

Profit before Tax 14,781,602 3,392,355

Provision for Tax

Current Tax (4,900,000) (651,000)

MAT Credit / (Set off) (258,000) 258,000

Deferred Tax 63,045 (995,664)

(5,094,955) (1,388,664) (Excess)/Short Provision Tax (32,725) 785,463 Provision for Dimunition in value of investment -- (1,817,628)

Prior Period Expenses -- 118,288

Excess Depreciation Charged in previous years 96,700 --

Profit after Tax 9,750,622 1,089,814

Add: Balance Brought forward from the previous year 15,227,946 17,801,632

Profit available for Appropriation 24,978,568 18,891,446

Appropriation

Transfer to General Reserve 1,500,000 200,000

Proposed Dividend 3,000,000 3,000,000

Corporate Dividend Tax Thereon/short provision of Dividend Tax 533,025 4,63,500

Balance carried forward 19,945,543 15,227,946

24,978,568 18,891,446



DIVIDEND:

With a view to conserve the financial resources for expansion on hand, the Board of Directors are pleased to recommend a dividend of Re 0.50/- per share on 60,00,000 Equity shares of the nominal value of Rs. 10/- each aggregating to Rs. 30.00 Lacs excluding dividend tax.

PERFORMANCE:

The Global Economic Scenario in F.Y .2012-13 continued to be fought on challenges. Major economies witnessed slow growth and the Eurozone which is our Companies prime market was full of uncertainty due to unemployment, banking fragility, fiscal tightening coupled with sluggish growth. As the year progressed business environment remained difficult and operating in such a testing environment proved challenging. Despite these constraints, the Company performed reasonably well and the highlights of the performance are as under :-

Revenue from operations increased by 42% i.e. from Rs. 2141/- lacs in previous year to Rs. 3040/- lacs in current year. Exports increased by 39% i.e. from Rs. 1528 lacs in previous year to Rs. 2125/- lacs in current year. Profit before tax increased by 335% i.e. from Rs. 34/- lacs in previous year to 148/- lacs in current year

DIRECTORS:

Mr. Jagdish Vasa and Dr. Giuseppe Seccomandi, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Their re-appointment would immensely benefit the Company looking at their business knowledge and expertise.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited, forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

The Company does not have any employee of the category specified in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDIT COMMITTEE:

As per the requirements of the Companies Act, 1956 and Listing Agreement, the Company has an Audit Committee consisting of two Independent Directors and One Executive Director namely Mr. Sudhir Patel, Mr. Jagdish J. Vasa and Mr. Sishir Amin. As Five Audit Committee Meetings were held on May 15, 2012, August 14, 2012, August 24, 2012, November 07, 2012 and February 15, 2013.

QUALITY CERTIFICATIONS

Your Company is pleased to inform its members that it has been accorded the GOTS (Global Organic Textile Standard) Version 3.0 March 2011 certification for all its Optical Brighteners for Textiles by CONTROL UNION CERTIFICATIONS. This would definitely assist the Company in having a better edge in the market of its optical brighteners both in the export and domestic markets in the long run and establish its "DIKAPHOR" brand name in the textile segment in the international and local markets.

Yours Company has also been accorded the ISO 9001: 2008 certifications for its quality management systems by BSI for a period of 3 years.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Your Directors wish to inform Members that the Audited Accounts containing Financial Statements for the Financial Year 2012-2013 are in full conformity with the requirement of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Company''s financial condition and results of operations. Your Directors further confirm that:

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(2) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(3) The directors have taken proper and sufficient care of 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;

(4) The directors have prepared the annual accounts on a going concern basis.

SAFETY AND ECOLOGY:

Your Company continues to accord the highest priority to Environment, Occupational Health and Safety with a view to progressively achieve international standards while ensuring compliance with statutory requirements.

FIXED DEPOSITS:

The Company has not accepted any Deposit from the Public during the year under review. As on 31st March, 2013, no unclaimed deposits are lying with the Company.

INSURANCE:

All the Fixed Assets have been adequately insured.

AUDITORS:

The Members are requested to appoint Auditors for the current year and to fix their remuneration. M/s Gaurang Merchant & Co., the retiring Auditors, are eligible for re-appointment and have furnished a certificate to the effect that their re-appointment, if made, will be in accordance with the limits specified in Section 224(1B) of the Companies Act, 1956.

AUDITORS REPORT:

There are no obligations in the Audit Report.

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement, the Company declares that its Equity Shares are listed on the Stock Exchange, Mumbai.

PERSONNEL:

Industrial relations at the Company''s factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

ACKNOWLEDGMENT:

The Directors wish to place on record their appreciations for the continued support and co-operations by Government Authorities, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.



For and on behalf of the Board,

(AMIT J. PATEL)

Mumbai, May 30, 2013 EXECUTIVE CHAIRMAN

---

Mar 31, 2012

The Directors are pleased to present their Twentieth Annual Report together with the Audited statement of Accounts along with the Report of the Auditors for the year ended 31st Match, 2012.

FINANCIAL RESULTS: 2011-2012 2010-2011

(Rupees) (Rupees)

Sales etc. and other income 214,118,898 196,355,678

Profit before Depreciation, Interest and Tax 10,262,488 17,250,510

Less: Depreciation 4,801,582 3,846,031

Interest 2,068,551 1,029,345

6,870,133 4,875,376

Profit before Tax 3,392,355 12,375,134

Provision for Tax

Current Tax (651,000) (4,000,000)

MAT Credit / (Set off) 258,000 -

Deferred Tax (995,664) (174,323)

(1,388,664) (4,174,323)

Short Provision Tax 785,463 915,665

Provision for Diminution in value of investment (1,817,628) -

Prior Period Expenses 118,288 (17,163)

Excess Depreciation Charged in previous years - 541,964

Profit after Tax 1,089,814 9,641,277

Add: Balance Brought forward from the previous year 17,801,632 16,257,587

Profit available for Appropriation 18,891,446 25,898,864

Appropriation -

Transfer to General Reserve 200,000 2,500,000

Proposed Dividend 3,000,000 4,800,000

Corporate Dividend Tax Thereon 463,500 797,232

Balance carried forward 15,227,946 17,801,632

18,891,446 25,898,864



DIVIDEND:

With a view to conserve the financial resources for expansion on hand, the Board of Directors are pleased to recommend a dividend of Re 0.50/-per share on 60,00,000 Equity shares of the nominal value of Rs. 10/- each aggregating to Rs. 30.00 Lacs excluding dividend tax.

PERFORMANCE:

Net Sales grew by 8.30% to Rs. 21.41 crores including a growth in exports and domestic markets. However, the margins were under tremendous pressure and reduced substantially; the PBT before exceptional items reduced from Rs.123.75 lakhs to Rs.33.92 lakhs. The drastic impact on profitability was mainly on account of exorbitant increase in input prices, fixed costs and also sales and administrative costs and interest. However your Company through various cost cutting measures and improved efficiency laid focus on maintaining the performance in black which was successfully achieved though not to the expectations.

DIRECTORS:

Mr. Yoshiaki Tagami has resigned as Director w.e.f. 25th December, 2011. The Board places on record its sincere appreciation for valuable services rendered by him during his tenure as Director of the Company.

Further the founder promoter director Mr. Jayant G. Patel expired on 1 st June, 2012. The Board places on record its sincere appreciation for valuable services rendered by him during his tenure as Director of the Company.

Mr. Amit J. Patel and Mr. Sudhir M. Patel, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Their re-appointment would immensely benefit the Company looking at their business knowledge and expertise. CORPORATE GOVERNANCE:

A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited, forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

The Company does not have any employee of the category specified in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDIT COMMITTEE:

As per the requirements of the Companies Act, 1956 and Listing Agreement, the Company has an Audit Committee consisting of two Independent Directors and One Executive Director namely Mr. Sudhir Patel, Mr. Jagdish J. Vasa and Mr. SishirAmin.

The Audit Committee met on five occasions on 03-05-2011,26-07-2010,12-08-2011,15-11-2011 and 13-02-2012.

QUALITY CERTIFICATIONS

Your Company is pleased to inform its members that it has been accorded the GOTS (Global Organic Textile Standard) Version 3.0 March 2011 certification for all its Optical Brighteners for Textiles by CONTROL UNION CERTIFICATIONS.

This would definitely assist the Company in having a better edge in the market of its optical brighteners both in the export and domestic markets in the long run and establish its "DIKAPHOR" brand name in the textile segment in the international and local markets.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors wish to inform Members that the Audited Accounts containing Financial Statements for the Financial Year 2011 -2012 are in full conformity with the requirement of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations.

Your Directors further confirm that:

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(2) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(3) The directors have taken proper and sufficient care of 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;

(4) The directors have prepared the annual accounts on a going concern basis.

SAFETY AND ECOLOGY:

Your Company continues to accord the highest priority to Environment, Occupational Health and Safety with a view to progressively achieve international standards while ensuring compliance with statutory requirements.

FIXED DEPOSITS:

The Company has not accepted any Deposit from the Public during the year under review. As on 31st March, 2012, no unclaimed deposits are lying with the Company.

INSURANCE:

All the Fixed Assets have been adequately insured.

FOREIGN COLLABORATORS:

Daika Japan Limited and Kiwa Chemicals Industries (Japan) continue to give their active support in the development of the Company and the Directors put on record their full appreciation for the co-operation being extended by them.

INVESTMENT:

The Company had made investment in Erca Specialty Chemicals Private Ltd., to the tune of Rs. 26.46 lakhs during the last four years which was in line with the management's long term perspective of business which was expected to yield good appreciation in the coming years.

The said investment till date is having negative cash flows, however the management is confident that considering the product profile and the future economic growth mainly in the textile segment this particular investment will generate positive cash flow in the next five years.

However under accounting convention and laws prevailing in India the management has made a provision for diminution in the value of this investment on the recommendation of the auditors. The same will be reversed once this investment starts generating positive returns.

AUDITORS:

The Members are requested to appoint Auditors for the current year and to fix their remuneration. M/s Gaurang Merchant & Co., the retiring Auditors, are eligible for re-appointment and have furnished a certificate to the effect that their re-appointment, if made, will be in accordance with the limits specified in Section 224( 1B) of the Companies Act, 1956.

AUDITORS REPORT:

The Auditors have vide para 4(d) of their Report, made qualification about non compliances of Accounting Standard 28 in respect of Impairment of Assets.

The Board is of the opinion that no impairment in carrying amount of assets has occurred as on the date of the Balance Sheet. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

As required under Section 217(1) (e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 the relevant information is given below.

The Company's operations involve high energy consumption. Wherever possible, energy conservation measures have already been implemented. The Company is making all efforts to optimize the use of energy improved operational methods. The Company has installed a coal fired IBR Boiler which will result into a considerable saving in the cost on account of power and fuel consumption.

Diesel Generating Set worked satisfactorily during the year whenever there was power failure on feeder lines of MSEB.

Relevant data in respect of energy consumption is as below.

(I) 2011-2012 2010-2011 Power & Fuel Consumption

1. Electricity

Purchased Units 6,38,981 5,90,488

Total Amount Rs. 40,96,733 Rs.31,84,265

Rate/Unit (Rs.) Rs.6.41 Rs.5.39

2. Light Diesel Oil/Furnace Oil

Quantity (Liters) 3,000 7,400

Total Amount Rs.1,32,570 Rs.3,00,976

Average Rate (Rs. / Ltrs) Rs.44.19 Rs.40.67

3. Coal

Quantity (Kgs) 14,99,752 11,90,875

Total Amount Rs.86,84,430 Rs.68,67,756

Average Rate (Rs./Kgs) Rs.5.79 Rs.5.77

(II) Consumption per Unit of Production

1. Electricity Rs 2.56/kg Rs.2.18/kg



FOREIGN EXCHANGE EARNINGS AND OUTGO: .

(Rs. in Lacs)

Foreign Exchange Earnings : 1528.23

Foreign Exchange Outgo : 661.02

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement, the Company declares that its Equity Shares are listed on the Stock Exchange, Mumbai.

PERSONNEL:

Industrial relations at the Company's factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciations for the continued support and co-operations by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the wooers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board,

AMIT J. PATEL

Mumbai, August 24, 2012 EXECUTIVE CHAIRMAN

---

Mar 31, 2010

The Directors are pleased to present their Eighteenth Annual Report together with the Audited statement of Accounts along with the Report of the Auditors for the year ended 31st March, 2010

2009-2010 2008-2009

FINANCIAL RESULTS: (Rupees) (Rupees)

Sales etc. and other income 18,66,16,513 16,27,66,840

Profit before Depreciation,

Interest and Tax 2,85,35,124 2,10,10,519

Less: Depreciation 32,63,345 29,61,474

Interest 3,81,010 10,89,676

36,44,355 40,51,150

Profit before Tax 2,48,90,769 1,69,59,369

Less : Provision for Tax

Current Tax 89,00,000 58,45,000

Deferred Tax (2,92,102) 86,07,898 1,89,453 60,34,453

Fringe Benefit Tax 62,200

Short Provision Tax 39,678

Prior Period Expenses 37,694 1,94,188

Profit after Tax 1,62,45,177 1,06,28,850

Add: Balance Brought forward 81,28,170 44,13,110

from the previous year

Profit available for Appropriation 2,43,73,347 1,50,41,960

Appropriation

Transfer to General Reserve 25,00,000 20,00,000

Proposed Dividend 48,00,000 42,00,000

Corporate Dividend Tax Thereon 8,15,760 7,13,790

Balance carried forward 1,62,57,587 81,28,170

2,43,73,347 1,50,41,960



DIVIDEND :

Despite improved working results, with a view to conserve financial resources required for the expansion of speciality Chemicals project, your Directors recommend 8% Dividend on 60,00,000 Equity shares of Rs. 10/-each ie.Rs. 0.80 per share aggregating to Rs. 48 Lacs excluding dividend Tax.

PERFORMANCE :

Gross sales for the year increased to Rs. 18.66 Crores reflecting a growth of about 15 % over the previous year. However Net profit shows an impressive performance at Rs. 2.48 Crores as compared to Rs. 1.67 Crores of previous year which is about 48% higher. Higher profit are mainly due to cost cutting and revenue enhancement measures taken by the company during the year.

OUTLOOK :

Since companys exports are mainly to European Union (EU), the present Economic uncertainty prevailing in majority European Countries, and a weakening Euro are the main worries for Indian Exports.No body would have forseen that the euro would fall by 20% as compared to Indian Rupee,in the last 4 months and consequently, this is bound to affect the working of the Company till Euro recovers. Europe troubles will impact the Indian industry in two ways, One will be the cross currency impact and the second will be that many Corporates might cut back on budgets.

As an insurance against export due to currency problem envisaged, and with a view to expand Market share of Companys products domestically, reliable distributors have been appointed in the important centers particularly in the South where "Textile Hosiery" and Paper mills are flourishing.

ERCA SPECIALITY CHEMICALS PLANT :

Speciality Chemicals include Textile Auxiliaries which under ERCA Italys Technological guidance have been set up fully with machinery, ancillary pipeline, Electrification etc along with Reverse osmosis plant.

Machinery required for Research and Development and quality control in the laboratory have been already fitted.

ERCA Specilaity Chemicals Pvt. Ltd. is a Joint Venture Company established by

1) H G E Chemicals Co of Luxembourg.

2) Novakem S.A. Luxembourg

3) Daikaffil Chemicals India Ltd. in order to Produce " "Speciality Chemicals" at our plant and to be marketed by ERCA Speciality Chemicals (P) Ltd as per the M.O.U signed by the above parties on 26th Nov2009 at Mumbai.

Our Company hold 25% of Equity Share Capital of ERCA Speciality Chemicals Pvt. Ltd.

In the long term Perspective companys investment in ERCA Speciality Chemicals Pvt. Ltd. would be beneficial under this arrangement.

H G E through their main associated company Erca Italy have given free technology and supplied some essential equipment for the production of " Speciality Chemicals, that also includes Construction Chemicals (CC) which is a board class of products, that play essential role in modern construction, be it houses, Bridges, tunnels roads. Industrial flooring etc. CC includes concrete mixtures & additive, Grouts & Caulks coating flooring sealants & adhesives, protective coating & fibers etc CC Industries is well established in India and estimate of its size in about Rs. 2000 crores.

DIRECTORS :

Mr. Yoshiaki Tagami & Mr. Jagdish Vasa retire by rotation at the ensuing Annual General Meeting and being

eligible offer themselves for reappointment.

Their re-appointment would immensely benefit the Company looking at their business knowledge and expertise.

CORPORATE GOVERNANCE :

A separate section on Corporate Governance, a certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Bombay Stock Exchange is attached herewith

PARTICULARS OF EMPLOYEES :

The Company does not have any employee of the category specified in Section 217 (2A) of the Companies Act,1956 read with the Companies ( Particulars of Employees) Rules,1975

AUDIT COMMITTEE :

As per the requirements of the Companies Act.1956 and Listing Agreement, the Company has an Audit Committee consisting of two Independent Directors and One Executive Director namely Mr. Sudir Patel, Mr. Jagdish J. Vasa and Mr. Sishir Amin.

The Audit Committee met on three occasions on 31.07.2009, 30.10.2009 and 29.01.2010

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors wish to inform Members that the Audited Accounts containing Financial Statements for the Financial Year 2009-2010 are in full conformity with the requirement of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Companys financial condition and results of operations.

Your Directors further confirm that :

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(2) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(3) The directors have taken proper and sufficient care of 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;

(4) The directors have prepared the annual accounts on a going concern basis.

SAFETY AND ECOLOGY:

Your Company continues to accord the highest priority to Environment, Occupational Health and Safety with a view to progressively achieve international standards while ensuring compliance with statutory requirements.

FIXED DEPOSITS :

The Company has not accepted any Deposit from the Public during the year under review. As on 31st March, 2010, no unclaimed deposits are lying with the Company.

INSURANCE :

All the Fixed Assets have been adequately insured.

FOREIGN COLLABORATORS :

Daika Japan Limited and Kiwa Chemicals Industries (Japan) continue to give their active support in the development of the Company and the Directors put on record their full appreciation for the co-operation being extended by them.

AUDITORS:

The Members are requested to appoint Auditors for the current year and to fix their remuneration. M/s Gaurang Merchant & Co., the retiring Auditors, are eligible for re-appointment and have furnished a certificate to the effect that their re-appointment, if made, will be in accordance with the limits specified in Section 224 (1B) of the Companies Act, 1956.

AUDITORS REPORT:

The Auditors have vide para 4(d) of their Report,made qualification about non compliances of Accounting Standard 28 in respect of Impairment of Assets.

The Board is of the opinion that no impairment in carrying amount of assets has occurred as on the date of the Balance Sheet.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION :

As required under Section 217(1) (e) of the Compnies Act, 1956 read together with the Companies ( Disclosure of Particulars in the report of the Board of Director ) Rules,1988 the relevant information is given below.

The Company`s operations involve high energy consumption.Wherever possible, energy conservation measures have already been implemented. The Company is making all efforts to optimize the use of energy improved operational methods.

Diesel Generating Set worked satisfactorily during the year wherever there was power failure on feeder lines of MSEB.

Relevant data in respect of energy consumption is as below.

(I) Power & Fuel Consumption 2009-2010 2008-2009

1. Electricity

Purchased Units 5,85,545 4,67,146

Total Amount Rs. 29,53,010 Rs. 21,50,579

Rate / Unit (Rs.) Rs. 5.04 Rs. 4.60

2. Light Diesel Oil / Furnance Oil

Quantity ( Litres ) 4,200 6,400

Total Amount Rs. 1,48,728 Rs. 2,45,696

Average Rate ( Rs. / Ltrs) Rs. 35.41 Rs. 38.39

3. Coal

Quantity (Kgs) 11,24,000 8,43,988

Total Amount Rs. 54,44,058 Rs. 41,59,018

Average Rate (Rs./ Kgs) Rs. 4.84 Rs. 4.92

(II) Consumption per Unit of Production

1. Electricity Rs. 2.10/ Kg Rs. 2.23/kg

FOREIGN EXCHANGE EARNINGS AND OUTGO:

(Rs. in Lacs) Foreign Exchange Earnings: 1164.13

Foreign Exchange Outgo : 522.73

LISTING AGREEMENT COMPLIANCE:

Pursuant to the requirements of the Listing Agreement, the Company declares that its Equity Shares are listed on the Stock Exchange, Mumbai.

PERSONNEL:

Industrial relations at the Companys factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciations for the continued support and co-operations by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board,

(AMIT J. PATEL)

Mumbai, May 07, 2010 EXECUTIVE CHAIRMAN