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Directors Report of Kokuyo Camlin Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting herewith the 68th Annual Report together with the Audited Financial statements for the Financial Year ended 31st March, 2015.

FINANCIAL RESULTS (Standalone):

(Rs. in Lacs) 2014-15 2013-14

Revenue from operations 54,387.93 46,814.51 (net)

Profit/(Loss) Before Tax 428.12 (1323.49)

Less: Provision for Tax

- Current — —

- Deferred (64.27) (166.29)

- Prior Years (Net) — 1.10

Profit/(Loss) After Tax 492.39 (1158.30)

Balance bought forward from last year (183.53) 974.77

Balance Carried forward 308.86 (183.53)

OPERATING PERFORMANCE:

During the year the Company reported net sale of Rs. 54387.93 Lacs as compared to Rs. 46814.51 Lacs for the last year representing a robust value growth of 16.18% over the corresponding period of the previous year. The focused approach of growing profitable business alongwith major steps taken in the areas of margin improvement and cost control have resulted in the better performance of the Company at the EBITA level for the year as compared to previous year.

As a result of this your Company could achieve a Profit after tax of Rs. 492.39 Lacs as against the Loss of Rs. 1158.30 Lacs in the corresponding period of the previous year.

Given the growth requirements of the business and the absence of sufficient profits, your Director''s do not recommend any dividend for the financial year 2014-15.

Your Company looks forward to further strengthen its performance in the coming years. The performance review, outlook and strategy have been spelt out in depth in the Management Discussion and Analysis Report which forms part of this Directors Report.

SHARE CAPITAL:

During the year under review, there was no change in the share capital structure and the paid up capital of the Company as on 31st March, 2015 was Rs. 1003.04 Lacs.

MEETINGS:

During the year five 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.

MANAGEMENT DISCUSSION AND ANALYSIS:

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm:

a) That in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) That the directors had 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 ended 31st March, 2015 and of the profit of the company for the year ended on that date.

c) That the directors had 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;

d) That the directors had prepared the annual accounts on a going concern basis; and

e) That 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.

f) That 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.

PERFORMANCE EVALUATION OF THE DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Remuneration and Nomination Committee has laid down the criteria for performance evaluation of Board of Directors (Including Independent Directors), Key Managerial Personnel (KMPs) and Committees of the Board on the basis of which they have been evaluated.

REMUNERATION POLICY:

The Board has, on the recommendation of the Remuneration and Nomination Committee framed a policy for selection, appointment and remuneration of Directors and KMPs. The Remuneration Policy is stated in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The details of Loans, Guarantees and Investments covered under section 186 of the Companies Act, 2013 are given in the notes to financial statements.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, KMPs which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The details of transaction with Related Parties are provided in the accompanying financial statements. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

DIRECTORS:

In terms of the provisions of the Companies Act, 2013, Mr. Nobuchika Doi and Mr. Takuya Morikawa, Directors of the Company, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

Mr. Noriyuki Watanabe resigned as an Independent Director of the Company w.e.f. 17th October, 2014. The Board has placed on record its appreciation for the contribution made by Mr. Noriyuki Watanabe during his tenure of office.

Pursuant to Sections 149 and 161 of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors had at its meeting held on 20th August, 2014, appointed Ms. Aparna Piramal Raje as an Additional Director (Independent) of the Company w.e.f. 1st October, 2014. The requisite resolution for approval of her appointment as an Independent Director is being proposed in the notice of the ensuing AGM for the approval of the members.

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 Exchanges.

None of the Directors are disqualified from being appointed as Directors as specified in section 164 of Companies Act, 2013. The profile of Directors seeking appointment/re-appointment forms part of the Corporate Governance Report.

AUDITORS:

M/s. B. K. Khare & Co., Chartered Accountants (FRN:105102W) Mumbai, Statutory Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment as Statutory Auditors for the financial year 2015-16.

The Company has received a letter from them to the effect that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and the rules framed thereunder.

The Audit Committee and the Board of Directors recommends the re-appointment of M/s. B. K. Khare & Co. Chartered Accountants, as the Auditors of the Company in relation to the financial year 2015- 2016 till the conclusion of the next Annual General meeting. The re-appointment proposed is within the time frame for transition under the third proviso to sub-section (2) of Section 139 of the Companies Act, 2013.

AUDITORS'' REPORT:

The observation of the Auditors in their report, read with relevant notes to the accounts are self- explanatory and therefore do not require further explanations.

DEPOSITS:

During the year under review, your Company has not accepted any deposits. There are no unclaimed deposits as on date.

CORPORATE GOVERNANCE:

Your Company has always endeavored to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Practising Company Secretary, M/s. J. H. Ranade & Associates confirming compliance forms an integral part of this Report.

COST AUDIT REPORT:

The Company had appointed M/s. Vinay Mulay & Co. as Cost Auditor for the financial year ended 31st March, 2015. But subsequently in terms of the Notification issued by the Central Government our products do not fall under the category requiring Cost Audit for the financial year under review. The Cost Audit report for the year ended 31st March, 2014 was due on 30th September, 2014 and the same was filed with Registrar of the Companies on 13th August, 2014.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.

SUBSIDIARY COMPANIES:

No new subsidiary was incorporated or acquired by the Company during the period under review.

As informed to you in our last report, the Company had divested its entire stake in its subsidiary viz. Alphakids Learning and Activity Centre Limited (Alphakids) (previously known as Camlin Alphakids Limited) by sale of its entire Equity and Preference Shareholding to the Related Party. The Company had sought members approval in the last Annual General Meeting held on 17th July, 2014. As a result of the said sale of shares, Alphakids ceased to be our subsidiary w.e.f. 1st April, 2014.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013, a statement containing salient features of the financial statements of subsidiary/ associate company in Form AOC-1 is attached to the financial statements of the Company.

In accordance with Section 136 of the Companies Act 2013 , the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of its subsidiary are available on our website www.kokuyocamlin.com.

CONSOLIDATED FINANCIAL STATEMENTS:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard and forms part of the Annual Report.

INVESTOR EDUCATION AND PROTECTION FUND:

The Company had transferred a sum of Rs. 2.41 Lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents principal amount of fixed deposit, interest on fixed deposit which remain unclaimed and Unclaimed Dividend for the year 2006-07 with the Company for a period of 7 years from their respective due dates of payment.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has its own process driven framework for Internal Financial Controls ("IFC"). For the year ended 31st March, 2015, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations; wherein controls are in place and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company''s operation.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company believes, it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. The Company continues to be involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals.

Kokuyo Camlin''s Tarapur location has taken an initiative in the name of "IDEAL SCHOOL PROJECT" in association with Quality Circle Forum of India and Lions Club with an objective of promoting cleanliness and hygiene at the Schools in Tarapur Area.

"Camlin kids Power" is a social awareness initiative by Kokuyo Camlin that uses Art, Music and progressive learning techniques to gain an understanding of important social issue which had organized a "Swachh Bharat Campaign" in Dharavi slums.

The Company has carried out this campaign voluntarily for the year under review as Section 135 of the Companies Act, 2013 was not applicable to the Company.

CODE OF ETHICS AND VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has adopted code of Ethics and business conduct which lays down principles and standards that should govern the actions of the Company and employees. The Company has a vigil mechanism called "Whistle Blower Policy" with a view to provide a mechanism for Employees of the Company to raise concerns of any violations of any legal or regulatory requirement, incorrect or misrepresentation of any financial statements and reports etc. The Company is committed to adhere to the highest standard of ethical, moral and legal conduct of business operations.

The Company has taken steps to establish Vigil Mechanism for Directors and Employees of the Company. The details of the Policy is posted on the website of the Company.

INSURANCE:

The Company''s plant, property, equipments and stocks are adequately insured against major risks. The Company also has appropriate liability insurance covers particularly for product liability. The Company has also taken Directors'' and Officers'' Liability Policy to provide coverage against the liabilities arising on them.

SECRETARIAL AUDIT:

Pursuant to the 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. J. H. Ranade & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith. The report does not contain any qualifications.

AWARDS/RECOGNITION/RANKINGS:

The Company was awarded as "Asia''s Most Promising Brand" under the stationery category in the event titled Asia''s most promising Brands 2014.

Our team members from "Tarapur" and "Vasai" Factory locations also won Gold Trophies at the "Kaizen Competition" organized by Quality Circle Forum of India (QCFI).

The Company also received recognition in the Indian Digital Media Awards (IDMA) 2014 with a Silver award for our website and Camlin Experience App.

The Gangyal plant in Jammu & Kashmir got the ISO 9001:2008 certification during the year.

The Company completed 50 years of colour manufacturing this year. On this occasion a special exhibition titled "50 years of Camel colours" was held showcasing pages from the 50 years history of colour making in India by Camel.

GREEN INITIATIVE IN CORPORATE GOVERNANCE:

In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the Annual Report through email to those shareholders who have registered their email id with the depository participant/Company''s Registrar and Share Transfer Agent. In case a shareholder wishes to receive a printed copy he/she may please send a request to the Company which will send the Annual Report to the shareholder.

The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting is provided in the Notice.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure "A".

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".

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 Report 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 the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

ACKNOWLEDGEMENT:

Your Directors express their gratitude to the members, bankers, customers, financial institutions and other business constituents for their continued faith, assistance and support extended to the Company. Your Directors also sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels thereby contributing largely to the growth and success of the Company.

Your Directors also wish to place on record their appreciation for the support and guidance provided by its parent Companies, Kokuyo Co. Ltd. and Kokuyo S&T Co. Ltd., Japan.

For and on behalf of the Board

DILIP DANDEKAR Chairman & Executive Director

Place: Mumbai Dated: 14th May, 2015.


Mar 31, 2014

The Directors have pleasure in presenting herewith the 67th Annual Report and Audited Statements of Account for the Financial Year ended 31st March, 2014.

FINANCIAL RESULTS:

(Rs. in Lacs)

2013-14 2012-13

Profit/(Loss) Before Tax (1323.49) (1878.00)

Less: Provision for Tax

- Current — —

- Deferred (166.29) (560.32)

- Prior Years (Net) 1.10 26.01

Profit/(Loss) After Tax (1158.30) (1343.69)

Balance bought forward

from last year 974.77 2318.46

Balance Carried forward (183.53) 974.77

OPERATING PERFORMANCE:

During the year the Company reported net sale of Rs.46814.51 Lacs as compared to Rs.43591.52 Lacs for the last year representing an increase of 7.39% over the previous year. In spite of increase in net sales the performance of your Company has resulted in a loss of Rs.1158.30 Lacs as against a loss of Rs. 1343.69 Lacs in the previous year.

In spite of various cost reduction measures, the high operating cost continued to affect the profitability as the Company could not scale up its sales in line with the business plan owing to adverse market conditions. Your Company initiated several measures like revamping product packaging, reduction in fixed cost, product innovation, indigenization of imported components to reduce production cost with a view to improve profitability which will yield results in future.

The performance review, outlook and strategy have been spelt out in depth in the Management Discussion and Analysis which forms part of this Directors Report.

In view of the loss, the Board of Directors regrets its inability to recommend any dividend on Equity Shares.

CHANGES IN CAPITAL STRUCTURE

Allotment of Equity Shares on exercise of Employee Stock Options:

During the year under review, the Company allotted 97,625 Equity Shares upon exercise of Stock Options to the eligible employees under the said ESOP scheme. The applicable disclosure as at 31st March, 2014 as stipulated under the SEBI Guidelines is given in annexure A to this report.

Issue of Right Shares

During the year under review, the Company had filed Letter of Offer ("LOF") dated 26th July, 2013, with SEBI for issue of 33,319,505 equity shares of Rs. 1.00 each to existing shareholders on Rights Basis in the ratio of 14 Rights Share for every 29 equity shares held on record date i.e. 2nd August, 2013 at issue price of Rs.33.00 each (including share premium). The Rights Issue of the Company was opened on 12th August, 2013 and closed on 27th August, 2013. The basis of allotment was finalised on 2nd September, 2013 in consultation with the National Stock Exchange of India Limited and as per the basis of allotment the Rights Issue Committee on 2nd September, 2013, allotted 31,283,831 Equity shares fully paid up to the eligible shareholders Shares allotted pursuant to rights issue were listed on BSE Ltd and The National Stock Exchange of India Limited on 5th September, 2013.

Out of the proceeds of the Rights Issue, as on 31st March, 2014, the Company has utilised amount aggregating to Rs. 2244.56 Lacs towards the Objects of the Issue, as stated in the Letter of Offer. The balance unutilised funds have been kept in current account/ fixed deposits with banks.

Consequent to allotment of the aforesaid shares, the Issued, Paid Up and Subscribed Equity Capital of the Company increased from Rs. 689.22 Lacs as on 31st March, 2013 to Rs. 1003.04 as on 31st March, 2014,







MANAGEMENT DISCUSSION AND ANALYSIS

Economic Overview

The global economy continued its uphill struggle as it faced stiff challenges in almost all regions and major economic groups. The UN-World Economic Situation and Prospects (Pre-Release 2014) states that the World Gross Product (WGP) grew by 2.1 per cent in 2013 and by 2.9 per cent based on Purchasing Power Parity (PPP). Among the developed economies, GDP in the United States of America is expected to have grown at 1.6 per cent compared to a 2.8 per cent 2012. In the emerging Asian economies of China and India, growth which had already slowed down in 2012, faced new headwinds on both international and domestic fronts. China seems to have halted the slowdown in the last quarter on 2013 and is estimated to have grown its GDP by 7.5 per cent in 2013, while the Indian economy grew by [4.7 – 4.9] per cent in the financial year 2013-14.

In India, domestic factors like inflation, falling currency, tight monetary policy and high interest rates continued to slow down growth in almost all key sectors of the economy. Inflation remained above 6 per cent throughout the year and the Indian Rupee fell to a precarious low of Rs. 69 to the US Dollar in August.

Industry Overview

The Indian stationery industry is very heterogeneous comprising of a wide array of products ranging from pens to printing to notepads to inks to colours and many more. The industry is highly fragmented one, with the unorganised sector constituting almost 85 per cent. The industry is also highly fragmented in terms of regions, with a large number of small units scattered all over the country.

On the basis of usage, the industry can be broadly divided into two distinct segments :

Of the two key segments by usage, the school stationery segment is estimated to be around Rs. 9,000 crores annually, whereas the office stationery segment is estimated to be in about Rs. 5,000 crores annually.

The Indian stationery market is closely co-related to the literacy in general and the education sector in particular. With the second largest population in the world at over 1.3 billion people with one of the most favourable demographics in terms of young population, India remains a key market for education.

In addition, the economic growth, particularly the burgeoning middle-class has given a fresh impetus to growth education. The Government has also made education a key thrust area with a target to increase literacy rates from 70% in 2011 to 85%. The last few years have witnessed rapid growth in the education sector, with remarkable increases in number of secondary schools, colleges, universities, as well as in increase in student enrolment and Gross Enrolment Ratios (GER).

The stationery industry has been going through a phase of changes and transformation. The industry has seen many new entrant in the last few years, both domestic as well as international. There has been a spurt in the number of foreign players who have entered the industry either through own presence or through tie-ups with Indian players. Innovation and introduction of new product categories, driven by sustained marketing campaigns are key drivers of growth. The industry is also going through a radical shift as far as focus is concerned. While the focus was purely on cost reduction, the focus has now shifted to R&D and Safety, both of which are emerging as crucial factors in winning the last mile customer by delivering new products as well as products that are safe and last longer.

Business Overview

Kokuyo Camlin Limited (KCL) is one of the oldest companies in India in the stationery business. It has a rich and proud legacy of three generations that started more than 80 years ago in the early 1930s. The Company was started as a partnership firm, Dandekar & Co. to manufacture fountain pen ink, stamp inks, adhesive paste, gum, sealing wax, chalks, etc. In 1946, Camlin Private Ltd. acquired the business of Dandekar & Co. as an ongoing concern. In 1988, the Company became a Public Limited Company, and got listed on the Bombay Stock Exchange. Recently, in 2011, Kokuyo S & T CO., Ltd, a major Japanese stationery corporation, acquired a majority stake in the Company and the Company was renamed Kokuyo Camlin Limited.

The products manufactured by the Company are broadly classified into (1) School and Education Products (2) Fine Art and Hobby Materials and (3) Office Stationery. The products include technical and drawing instruments, writing instruments, office stationery, adhesives, notebooks, fine art, hobby art and scholastic products.

The Company owns two most enduring consumer brands in the Indian stationery market - CAMEL and CAMLIN.

The key strengths of the Company are : Strong Brand connect and association Extensive and Pan-India supply and distribution network

Synergistic Alliance with Kokuyo S&T Experienced Promoters Extensive Product Range

Dominant position in the market segment were it is operating.

Recent Developments

In line with the shifts happening in the overall stationery industry, the Company has taken a long-term and strategic decision to BUILD UP its CAPACITY, CAPABILITY and COMPETENCY. The Company has concluded a Rights Issues in 2013 for Rs. 10323.66 Lacs. The proceeds of this Rights Issues are to be used for setting up of an integrated manufacturing and assembling facility. This new facility will be spread over 14 acres of land in the Additional Industrial Area of MIDC at Patalganga (Maharashtra). The land has already been acquired and work on the new facility has commenced. With the completion of this new facility, the Company will acquire newer and bigger economies of size, scale and scope.

Review of Performance During the Year

During the year the Company achieved the net sale of Rs.46814.51 Lacs as compared toRs.43591.52 Lacs for the last year representing an increase of 7.39% over the previous year. Out of the above approximately 5% growth came by way of volume growth and rest was through price rise. Though school and education products and fine art & hobby materials registered a healthy growth, office products growth was muted. Modern trade and exports also showed a high growth.

A few products like notebooks and Kokuyo office products were introduced in select markets during the last quarter of FY 2014, and met with encouraging results. These products will be rolled out to newer markets during the year.

The Company is currently in the BUILDING UP phase and is focussed on completion of its new integrated and assembling facility at Patalganga.

On the operational front, the Company has leveraged Kokuyo S & T''s specific know-how, management practises and expertise like Kaizen to better its quality at source.

The Company has taken several initiatives during the year in marketing, cost-competitiveness, supply- chain effectiveness, R&D focus and launch of new products. The Company has also re-structured itself internally to de-layer decision-making, which are now more proactive and prompt, in addition to being transparent. The Company believes that all these steps are in the right direction to emerge more competitive, more capable and more competent.

Review of Financial Performance

Your Company continued to focus on optimum levels of inventory, operating efficiencies and cost saving across the organisation.

The analysis of major items of the financial statements is shown below.

Revenue from operations:

(Rs. in Lacs) FY 2013 FY 2014 Change %

Revenue from operations 43591.52 46814.51 7.39

The increase was due to increase in sales volume and partly due to increase in selling prices of certain products.

Other Income

(Rs. in Lacs) FY 2013 FY 2014 Change %

Other Income 25.47 582.09 2185.39

The increase is on account of interest income earned on funds raised through Right Issue of Equity Shares, amounting to Rs. 10156.43 Lacs (net of issue expenses) which has been kept as Fixed Deposits with banks until utilisation.

Cost of Material

(Rs. in Lacs) FY 2013 FY 2014 Change %

Cost of Material 29493.15 30152.01 2.19

The increase is due to increase production and inventory as compared to last year but comparatively less due to improved product mix, benefit of cost reduction and conversion of trading to manufacturing.

Employee benefit expenses

(Rs. in Lacs) FY 2013 FY 2014 Change %

Employee benefit expenses 5,141.99 5,466.16 6.30

The increase is due to annual increments given to employees.

Finance cost

(Rs. in Lacs) FY 2013 FY 2014 Change %

Finance cost 734.60 876.97 19.38

Finance cost has increased due to increased utilisation of overdraft facility and also there has been increase in interest rates charged by banks compared to previous year.

Depreciation

(Rs. in Lacs)

FY 2013 FY 2014 Change %

Depreciation 764.21 857.25 12.18

Increase in depreciation is due to addition in fixed assets worth Rs. 1771.54 Lacs in FY 13-14 as compared to Rs. 1131.86 Lacs in FY 12-13.

Other expenses

(Rs. in Lacs) FY 2013 FY 2014 Change %

Other expenses 9361.04 10882.38 16.25

The increase in other expenses is due to increased cost of services and other operating expenses, growth in scale of operation, conversion of certain products from erstwhile trading to manufacturing and losses suffered in view of foreign exchange fluctuations.

Exceptional items

(Rs. in Lacs) FY 2013 FY 2014 Change %

Exceptional items — 485.32 —

Exceptional Item in FY 13-14 is due to waiver of advance given to Subsidiary Company viz. Alphakids Learning and Activity Centre Limited (formerly known as Camlin Alphakids Limited) and also provision has been taken for diminution in value of investments in that subsidiary Company.

Outlook of Business

The outlook for the stationery industry in India continues to remain positive. The Government continues its strong focus on improving education and increasing literacy in the country. It has sent an enrolment target of 35.9 million by the end of the 12th Five Year Plan (2012-17). Under the non-planned expenditure, the Government has estimated Rs. 11,247 crores for education in 2013-14. To increase secondary education in the country, a sum of Rs. 7,710 crore has been allotted in the Union Budget of 2013-14, and a sum of Rs. 16,210 crore has been allotted in the Union Budget 2013-14 to improve Higher Secondary education in the country.

Besides the education segment, the office stationery segment is also poised for growth. The Company is well-positioned to take advantage of these opportunities in the industry. The Company is a dominant player in the two key businesses of the Company, namely the School and Education Products and Fine Art and Hobby Materials segment. In the office stationery market, the Company has added to its strength through its alliance with Kokuyo S & T The Company plans to garner a larger share of the office stationery market with launch of more Kokuyo products.

Risks

Cyclical Business

The school stationery business of the Company is directly linked to the school calendars, and therefore, is highly cyclical in nature, with a strong revenues coming at the start of the school term compared to the mid-term or end of term periods. However, the Fine Arts and Hobby Products and office products business of the Company is relatively more well-spread across the year, which ensure relatively stable and steady cash flows and reduce the risk of extreme cash flow fluctuations.

Competition

The stationery business in India is highly fragmented with a large portion of the market being catered by the unorganised sector. This makes the business extremely competitive particularly from a price- sensitivity context as well as higher costs for reaching to customers. The Company has various strengths that counter and mitigate this significant risk. These include its two flagship brands, CAMEL and CAMLIN that are extremely strong in the market and have a high resonance with customers. Another key strength of the Company is its vast range of products, numbering more than 2000 SKUs that penetrate all markets segments and categories. With timely marketing initiatives like new product launches, brand promotion, sampling driven by thorough and regular market research and customer-centric feedback systems like readers'' forum, the Company believes it can overcome the risk of competition.

Raw Materials – Supply and Costs

The performance of the Company is linked to the availability and costs of raw materials and fuel. Abrupt increases in commodity prices, like in Fiscal 2013 affect the financial performance of the Company in terms of sales, profitability and cash-flows. The Company in some of its segments has been successful in passing over these to the customers, and therefore, these risks do not have that much bearing on sales and profitability. However, these risks might affect the cash- flows of the Company due to a time-lag between rise in prices of raw materials and the changes in prices at customer end. Also, with rising competition, the Company might not be able to fully pass on the increases to customers.

Availability of cost-effective sources of funds

The nature of business is capital intensive. Also, the cyclical nature of the school stationery business, means that products need to be manufactured and put into the supply pipeline well in advance. This does put a stress on the working capital requirement of the Company, for which the Company needs cost- effective sources of funds. The Company has sufficient funds from its operations, capital from shareholders and other forms of term working capital in the form of term loans, foreign loans, cash credit, fixed deposits and loans from banks.

Internal Control Systems and their Adequacy

The Company has internal control systems in place commensurate with the size of business and the industry it operates in. It has well-defined and well- documented systems, policies, procedures and guidelines to cover all aspects of operations. The Company strictly adheres to the laws, rules and statues of the land, and ensures compliance at all levels and across all divisions and department. The Company regularly undertakes internal audit which is under the supervision of its Audit Committee. Any concerns raised are immediately address and corrected. The Company has an well-defined MIS systems that ensures monitoring of expenses within the budgetary allocations, and any mismatch is immediately flagged off for attention and corrective measures.

Significant Development in Human Resources

The Company strongly believes that employees are the most valuable resources and takes efforts to create a positive, vibrant and safe work environment. The Company has a well-defined work culture that is based on values like honesty, integrity, cooperation, empathy and progress. The past year saw various HR initiatives aimed towards supporting the Company culture from introduction of the Kokuyo Camlin Code of Conduct to introduction of leadership competencies for the Senior Management team.

The organisation takes efforts to ensure that we are compliant in every aspect of our business and this was also reflected in the results of the 360 degree survey conducted for the leadership team. The results highlighted the leadership team being very high on compliance.

Training initiatives like Outdoor Experiential Programme for the Senior Management Team, Managerial Skills workshops for the Sales team, Finance for Non Finance workshops amongst others were also undertaken. Employee Development will remain at the core of HR initiatives for the year 2014-15. Various trainings programs have been planned with an objective to support the employee''s skill development in an increasingly dynamic and complex business landscape.

To enhance productivity of our employees at factories, they have been imparted refresher trainings on quality concepts like 5S and Kaizen. It is a proud achievement that the quality circle teams at Tarapur, Vasai & Taloja factories have been felicitated at the Annual Quality Convention programme held at QCFI Mumbai chapter. HR also organised various engagement activities to boost employee morale & increase interdepartmental bonding. The organisation believes that employees shall be the key to the success of Kokuyo Camlin and would undertake all efforts for their development.

As on 31st March 2014, the total numbers of employees were 1191.

Cautionary Statement

The Annual Report may contain, without limitation, certain statements that include words such as "believes", "expects", "anticipates" and words of similar connotation, which would constitute forward- looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual performance or results to be materially different from those anticipated in these forward-looking statements. Kokoyu Camlin is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

DISINVESTMENT OF ENTIRE STAKE IN 100% SUBSIDIARY CAMLIN ALPHAKIDS LIMITED (NOW ALPHAKIDS LEARNING AND ACTIVITY CENTRE LIMITED)

Your Company had ventured into the business of running pre-schools in the year 2009 and had set up a wholly owned subsidiary namely Camlin Alphakids Limited. Unfortunately since inception, this business has been incurring huge losses & had never turned around. In the past 5 years, the financials have been EBIDTA negative and have been continuously seeking funding from the parent Company. Till FY 13-14 your Company had invested a total sum of Rs.535.32 Lacs, out of which by way of equity & preference capital of Rs.230.00 Lacs and advances of Rs.305.32 Lacs, a significant portion of which was towards funding of the losses. In the past 2 years, the performance of your Company has not been encouraging and is incurring losses. In such circumstance, it had become increasingly difficult to continue funding the Subsidiary. Your Company''s core business is stationery & the losses in Camlin Alphakids was diverting the management''s energy and focus into the non-core business of pre schools. It was also realized that the losses in Camlin Alphakids were deteriorating the Company''s consolidated financials and thereby reducing the EPS and shareholder value. The Management did not foresee any turnaround of this business in near future. The Board of Directors and Kokuyo S & T, Co Ltd. the main promoter who holds 65.77% of shareholding, therefore took a decision to disinvest its holding in the subsidiary. Your Company has written off the Advance of Rs.305.32 Lacs in the year 2013-14.

In April, the entire stake of equity & preference shares amounting to Rs.230.00 Lacs was sold to one of the promoter Mr. Dilip Dandekar along with his family members and associate company for a total consideration of Rs. 50.00 Lacs. The consideration was finalised based on an independent valuation. Camlin Alphakids Limited ceases to be subsidiary with effect from 1st April, 2014.

The aforesaid transactions for sale of stakes to the related party is proposed by board by way of special resolution for your approval, you are requested to approve the same.

CONSOLIDATED FINANCIAL STATEMENTS:

In line with the General Circular no 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate affairs, the Board of Directors of your Company had passed a Resolution for giving its consent for not attaching the financial statements of the Subsidiary Companies to the Balance Sheet of the Company for the year ended 31st March, 2014.

The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard-21 issued by the Institute of Chartered Accountants of India also forms part of this Annual Report.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies is attached to the accounts.

As directed by the aforesaid circular the accounts of the subsidiary companies and related detailed Information will be made available to any members seeking such information at any point of time. The accounts of the subsidiary companies are also available for inspection by any member at the registered office of the Company.

DEPOSITS:

The Company has not accepted any fixed deposits during the year. There are no overdue deposits except unclaimed deposits amounting to Rs.0.65 lacs as at 31st March, 2014.

DIRECTORS:

Mr. R.C Bhargava relinquished his office with effect from 31st January 2014 and Mr. Hirofumi Iwatsu relinquished his office with effect from 20th March 2014. The board appointed Mr. Venkataraman Sriram i as a Director in casual vacancy in place of Mr. R.C. Bhargava and Mr. Yasushi Inoue as a Director in casual vacancy in place of Mr. Hirofumi Iwatsu. Your Director feel privileged to have an association with Mr. R.C. Bhargava & Mr. Hirofumi Iwatsu and express their appreciation for the valuable services rendered by them during their tenure.

Impeding notification of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. R. Sriram, Mr. Shishir Desai, Mr. Hisamaro Garugu, Mr. Devendra Kumar Arora , Mr. V. Sriram and Mr. Noruyuki Watanabe as Independent Directors for five consecutive years for a term up to 31st March, 2019. Details of the aforesaid are mentioned in the Explanatory Statement under section 102(1) of the Companies Act, 2013 of the Notice of the 67th Annual General Meeting.

Mr. Takeo Iguchi and Mr. Yasushi Inoue shall retire at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment.

The term of Mr. Nobuchika Doi and Mr. Takeo Iguchi both Executive Directors which was for a period of 3 years from 1st November, 2011 expires on 31st October, 2014. The Directors are seeking appointment of Mr. Nobuchika Doi and Mr. Takeo Iguchi as Executive Directors retiring by rotation for a period of 3 years. Details of the proposal for appointment of Mr. Nobuchika Doi and Mr. Takeo Iguchi are mentioned in the explanatory statement under section 102(1) of the Companies Act 2013 of the notice of the 67th Annual General Meeting. Their appointments are appropriate and in the best interest of the Company.

The profiles of the Directors seeking appointment/ re-appointment forms part of the Corporate Governance Report.

None of the Directors are disqualified from being appointed as Directors as specified in Section 274(1) (g) of the Companies Act, 1956 (Section 164 of the Companies Act, 2013).

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

i. That in the preparation of the Annual 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 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 ended 31st March, 2014 and of the 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 for the year ended 31st March, 2014 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the Directors have prepared the Annual Accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.

COST AUDITORS:

In compliance with the notification no. F No 52/26/ CAB-2010 dated January 24, 2012 issued by the Cost Audit Branch under MCA, the Company has appointed M/s. Vinay Mulay, Cost Accountants, Mumbai as Cost Auditor of the Company pursuant to Section 233B of the Companies Act, 1956 for the audit of cost accounts in respect of colour products manufactured by the Company for the year ended 31st March, 2014 at the meeting of the Audit Committee and Board of Directors held on 14th May, 2013.

The cost compliance and cost audit reports for the year ended 31st March, 2013 was to be filed on or before 30th September, 2013. The Company has duly filed the cost compliance and cost audit reports before the due date on 2nd September 2013 and 5th September, 2013 respectively.

CORPORATE GOVERNANCE:

Your Company has always endeavoured to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per the requirements of the Listing Agreements entered into with the BSE Limited and The National Stock Exchange of India Limited a detailed Report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors'' Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. The Management Discussion and Analysis Report also form part of this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company had transferred a sum of Rs. 0.57 lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents principal amount of fixed deposit and interest which remain unclaimed with the Company for a period of 7 years from their respective due dates of payment.

AUDITORS:

M/s B. K. Khare & Co., Chartered Accountants, Mumbai, Statutory Auditors of your Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re- appointment as Statutory Auditors for the financial year 2014-15. The Company has received a letter from them to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment.

Based on the recommendations of the Audit Committee, the Board of Directors of the Company proposes the re-appointment of M/s. B. K. Khare and Co., Chartered Accountants, Mumbai, as Statutory Auditors of your Company. You are requested to appoint them.

Information pursuant to Section 217 (2A) of the Companies Act, 1956:

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company believes it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. The Company continues to be involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals.

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

As required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure B to this report.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Members, Bankers, Financial Institutions and the Customers for their active support and patronage. We also wish to acknowledge the spirit of dedication, commitment and co-operation extended by employees at all levels.

Your Directors also wish to place on record their appreciation for the support and guidance provided by its Parent Companies, Kokuyo Co. Ltd. and Kokuyo S & T Co. Ltd, Japan.

For & on behalf of the Board

DILIP D. DANDEKAR

Chairman &

Executive Director

Place: Mumbai

Dated: 9th May, 2014


Mar 31, 2013

The Directors have pleasure in presenting herewith the 66th Annual Report and Audited Statements of Account for the Financial Year ended 31st March, 2013.

FINANCIAL RESULTS:

(Rs. in Lacs)

2012-13 2011-12

Profit/(Loss) Before Tax (1878.00) 158.18

Less: Provision for Tax

Current 100.00

- Deferred (560.32) (59.44)

- PriorYear(Net) 26.01 (16.19)

Profit/(Loss) After Tax (1343.69) 133.81

Balance bought forward

from last year 2318.46 2214.65

Balance Carried forward 974.77 2348.46

Transferred to:

General Reserve 30.00

Balance Carried Forward 974.77 2318.46

974.77 2348.46

OPERATING PERFORMANCE:

During the year the Company reported net sale of Rs. 43,591.52 lacs as compared to Rs. 38,390.35 lacs for the last year representing an increase of 13.55% over the previous year. In spite of increase in net sales the performance of your Company has resulted in a loss of Rs. 1,343.69 lacs as against a profit of Rs. 133.81 lacs in the previous year.

The major contributory for this loss in the financial year under review were increase in Input material cost, manpower cost & overheads and our inability to pass on this increase fully to our customers.

The performance review, outlook and strategy have been spelt out in depth in the Management Discussion and Analysis which forms part of this Directors Report.

In view of loss, the Board of Directors regrets its inability to recommend any dividend on equity shares.

CHANGES IN CAPITAL STRUCTURE

Allotment of equity shares on exercise of Employee Stock Options:

During the year under review, the Company allotted 20,775 Equity Shares upon exercise of Stock Options to the eligible employees under the said ESOP scheme. The applicable disclosure as at 31st March, 2013 as stipulated under the SEBI Guidelines is given in annexure A to this report.

In view of the above the Paid up Share Capital of the Company stands increased from Rs. 689.02 lacs to Rs. 689.22 Lacs.

CONSOLIDATED FINANCIAL STATEMENTS:

In line with the General Circular no 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, the Board of Directors of your Company had passed a Resolution for giving its consent for not attaching the financial statements of the Subsidiary Companies to the Balance Sheet of the Company for the year ended 31st March 2013.

The consolidated financial statements of the Company and its Subsidiaries, prepared in accordance with Accounting Standard - 21 issued by the Institute of Chartered Accountants of India also forms part of this Annual Report.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies is attached to the accounts.

As directed by the aforesaid circular the accounts of the Subsidiary Companies and related detailed Information will be made available to any members seeking such information at any point of time. The accounts of the Subsidiary Companies are also available for inspection by any member at the registered office of the Company.

DEPOSITS:

The Company has not accepted any fixed deposits during the year.There are no overdue deposits except unclaimed deposits amounting to Rs. 0.75 Lacs as at 31st March, 2013.

APPOINTMENT OF MANAGER:

In order to ensure smooth day to day operation and carrying out the corporate vision the Board of Directors decided to appoint Mr. Ayyadurai Srikanth as "Manager" designated as "Chief Executive Officer" for a period of three years with effect from 1st February, 2013. The said appointment was also approved by the members by passing Special Resolution by way of Postal Ballot on 28th March, 2013 subject to approval of Central Government.

The Appointment of Mr Ayyadurai Srikanth will immensely benefit the Company for taking the Company''s long term plans.

DIRECTORS:

Mr. Shishir Desai, Mr. Hirofumi Iwatsu and Mr. Takeo Iguchi retire by rotation and being eligible offers themselves for re-appointment. You are requested to appoint them.

In view of the appointment of the Manager with effect from 1st February, 2013, the Board of Directors had re-designated Mr. Dilip Dandekar as Chairman & Executive Director and Mr. Shriram Dandekar as Vice Chairman and Executive Director and entered in to a new agreement with the revision in remuneration for the period of three years with effect from 1st February, 2013.The said appointments were also approved by members by passing Special Resolutions by way of Postal Ballot on 28th March, 2013 subject to approval of Central Government.

During the year the Board of Directors re-designated Mr. Hirofumi Iwatsu - Executive Director as Non Executive Director with effect from 1st January, 2013.

Mr. HiroakiTakayama relinquished his office with effect from 17th October, 2012 and the Board appointed Mr. Noriyuki Watanabe as a Director in casual vacancy in his place. Your Director feel privileged to have an association with the Mr. Hiroaki Takayama and express their appreciation for the valuable services rendered by him during his tenure.

The profiles of the Directors seeking re-appointment forms part of the Corporate Governance Report.

None of the Directors are disqualified from being appointed as Directors as specified in Section 274(1) (g) of the Companies Act, 1956.

RIGHTS ISSUE:

During the period under review the Board of Directors of the Company at its meeting held on 7th August, 2012 approved the issue of Equity Shares on rights basis up to Rs. 110 Crores and has filed the Draft letter of offer dated 26th March, 2013 with the Securities and Exchange Board of India (SEBI). Subsequently.the Company had received in-principle approval from The National Stock Exchange of India Ltd. and BSE Ltd. in respect of the proposed Rights Issue of the Company.

Proceeds of the Rights issue will be utilized for (i) Setting up of an integrated manufacturing and assembling facility, and (ii) General Corporate Purposes.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

i. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2013 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 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 ended 31st March, 2013 and of the loss of the Company for the year under review;

Hi. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records for the year ended 31st March, 2013 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. that the Directors have prepared the Annual Accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.

COST AUDITORS:

In Compliance with the Notification No. 52/26/ CAB-2010 dated January 24, 2012 issued by the Cost Audit Branch under MCA, the Company has appointed M/s. P. D. Phadke & Associates, Cost Accountants, Mumbai as Cost Auditor of the Company pursuant to Section 233B of the Companies Act 1956 for the audit of cost accounts in respect of colour products manufactured by the Company for the year ended 31st March, 2013 at the meeting of the Audit Committee and Board of Directors held on 15th June, 2012.

The cost compliance report. Audit report for the previous year ended 31st March, 2012 was to be filed on or before 30th September, 2012 and subsequently the due date was extended till 28th February, 2013. The Company has duly filed the cost compliance report for the year before the extended due date on 10th January, 2013.

CORPORATE GOVERNANCE:

Your Company has always endeavored to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per the requirements of the Listing Agreements entered into with the BSE Limited and The National Stock Exchange of India Limited a detailed Report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors'' Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. The Management Discussion and Analysis Report also form part of this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred a sum of Rs. 0.31 lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents interest on fixed deposits which remained unclaimed with the Company for a period of 7 years from their respective due dates of payment.

AUDITORS:

M/s. B. K. Khare and Co., Chartered Accountants, Mumbai, Statutory Auditors of your Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment as Statutory Auditors for the financial year 2013-2014. The Company has received a letter from them to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment. Based on the recommendations of the Audit Committee, the Board of Directors of the Company proposes the re-appointment of M/s. B. K. Khare and Co., Chartered Accountants, Mumbai, as Statutory Auditors of your Company. You are requested to appoint them.

INFORMATION PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956:

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company believes it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. The Company continues to be involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals

CONSERVATION OF ENERGYJECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure B to this report.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Members, Bankers, Financial Institutions and the Customers for their active support and patronage. We also wish to acknowledge the spirit of dedication, commitment and co-operation extended by employees at all levels.

Your Directors also wish to place on record their appreciation for the support and guidance provided by its Parent Companies, Kokuyo Co. Ltd. and KOKUYO S&TCo. Ltd, Japan.

For & on behalf of the Board DILIP DANDEKAR Chairman & Executive Director

Place: Mumbai

Dated: 14th May, 2013


Mar 31, 2012

The Directors have pleasure in presenting herewith the 65th Annual Report and Audited Statements of Account for the Financial Year ended 31st March 2012.

FINANCIAL RESULTS: (Rs.in Lacs)

2011-12 2010-11

Profit Before Tax 158.18 1205.71

Less: Provision for Tax Current 100.00 325.00

- Deferred (59.44) 16.20

- Prior Year (Net) (16.19) 5.83

Profit After Tax 133.81 858.68

Balance bought forward 2214.65 1634.82 from last year

Less-prior year appropriation - 0.25 (Dividend and Tax thereon)

Balance Carried forward 2348.46 2493.25 Transferred to:

Proposed Dividend - 152.66

Corporate Tax on Dividend - 25.94

General Reserve 30.00 100.00

Balance Carried Forward 2318.46 2214.65

2348.46 2493.25

OPERATING PERFORMANCE:

During the year the Company reported income from operations of Rs 38390.35 Lacs as compared to Rs 35825.33 Lacs for the last year representing marginal growth over the previous year. Profit before tax for the year ended 31st March,2012 was Rs 158.18 lacs against Rs 1205.71 lacs of the previous year. The main reason for decline in profitability was on account of increase in manpower cost, Sales and Marketing spend and other operating expenses.

The performance review, outlook and strategy have been spelt out in depth in the Management Discussion and Analysis which forms part of this Directors Report.

With a view to conserve the resources of the Company, the Board of Directors has not recommended dividend on Equity Shares.

ACQUISITION OF MAJORITY STAKE IN THE COMPANY BY KOKUYO S&T CO., LTD. JAPAN

During the year the Company had executed Share Subscription and Joint Venture Agreement between the Company, its Promoters and KOKUYO S&T Co., Ltd. Japan (KOKUYO).

In terms of the said Agreement, KOKUYO has acquired 3,48,36,220 Equity shares of Rs 1/- each representing 50.27% Equity stake and voting rights in the Company as per the SEBI (Substantial Acquisition and Takeover) Regulations 1997. The details are given below:

Date of acquisition Particulars No.of % of shares share holding

8th July, 2011 Allotment of shares on 69,34,000 10%

Preferential basis at Rs 85/- per share

13th October, Acquisition of shares 1,38,57,370 20% 2011 under open offer pursuant

to regulation 10 & 12 of the SEBI (substantial Acquisition of shares and takeover) Regulation, 1997 at Rs 110/- per share

13th October, Acquisition of Shares from 1,40,44,850 20.27% 2011 some of the promoters of

the Company at Rs 110/- per share

Total 348,36,220 50.27% *on fully diluted basis

Accordingly the Company became a subsidiary of KOKUYO S&T Co., Ltd. effective from 13th October 2011. Further KOKUYO S&T Co., Ltd. Japan became promoter of the company effective from 13th October 2011.

KOKUYO S&T Co., Ltd. is a 100% subsidiary of KOKUYO Co., Ltd. which was founded over 100 years ago in Osaka, Japan. It is a leading Company that manufactures and markets office stationery and supplies, furniture for offices, public spaces. Both these are under the brand name KOKUYO. It also has a retail mail-order business under the KAUNET brand. KOKUYO S&T Co., Ltd. is leader in office stationery products with particular strength in notebooks and office supplies. Its KOKUYO brand is well known both in office stationery and office furniture segments.

CHANGES IN CAPITAL STRUCTURE Allotment of Equity Shares on Preferential Basis:

In terms of the approval received from the members at the Extra-ordinary General Meeting held on 29th June 2011, 69,34,000 Equity Shares of Rs 1/- each at a price of Rs 85/- per share were allotted on preferential basis to KoKuYo S&T Co., Ltd. Japan on 8th July 2011 subject to lock in period of one year from the date of allotment in accordance with SEBI (ICDR Regulations 2009).

out of the proceeds received by way of Preferential Allotment of Rs 5893.90 lacs, the Company utilized Rs 644.94 lacs towards Capital Expenditure, Rs 490.00 lacs towards repayment of Long term loans, Rs 1025.00 lacs is maintained as Time Deposits with Banks and balance amount of Rs 3733.96 lacs in Working Capital.

Allotment of shares on exercise of Employee Stock Options:

In accordance with the Employee Stock option (ESoP)Scheme final vesting i.e. 30% of the total options granted under ESoP scheme vested to the Employees of the Company on 21st July, 2011.

During the year under review, the Company allotted 9,03,038 Equity Shares upon exercise of Stock options to the eligible employees under the said ESoP scheme.

In view of the Preferential allotment and Shares allotted under ESoP, the Paid up Share Capital of the Company stands increased from Rs 610.65 lacs to Rs 689.02 lacs.

The applicable disclosure as stipulated under the SEBI Guidelines as at 31st March, 2012 is given in annexure A to this report.

CONSOLIDATED FINANCIAL STATEMENTS:

In line with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate affairs, the Board of Directors of your Company had passed a Resolution for giving its consent for not attaching the financial statements of the Subsidiary Companies to the Balance Sheet of the Company for the year ended 31st March, 2012.

The consolidated financial statements of the Company and its Subsidiaries, prepared in accordance with Accounting Standard - 21 issued by the Institute of Chartered Accountants of India also forms part of this Annual Report.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies is attached to the accounts.

As directed by the aforesaid circular the accounts of the Subsidiary Companies and related detailed Information will be made available to any members seeking such information at any point of time. The accounts of the Subsidiary Companies are also available for inspection by any member at the registered office of the Company.

DEPOSITS:

The Company has not accepted any fixed deposits during the year. There are no overdue deposits except unclaimed deposits amounting to Rs 1.19 Lacs as at 31st March, 2012.

DIRECTORS:

The Company has appointed Mr. Takuya Morikawa, Mr. Ravindra Chandra Bhargava,Mr.Hisamaro Garugu and Mr. Hiroaki Takayama on 19th October, 2011 and Mr. Devendra Kumar Arora on 17th January, 2012 as an Additional Directors. Except Mr. Takuya Morikawa, others Directors are Independent Directors.

The Company had also appointed Mr. Nobuchika Doi, Mr. Hirofumi Iwatsu and Mr. Takeo Iguchi as an Additional Directors. The said Directors are in Whole- time employment of the Company designated 'Executive Directors' with effect from 1st November, 2011 by passing the Ordinary Resolutions by way of Postal Ballot on 11th January, 2012.

As per the Provision of Section 260 of the Companies Act, 1956, these Directors hold office only up to the date of forthcoming Annual General Meeting of the Company. The Directors recommend their appointments.

During the year, the Board re-designated Mr. Shriram S. Dandekar as Jt. Managing Director with effect from 19th October, 2011.

With effect from 19th October, 2011 Mr. Rajiv M. Dandekar, Mr. Deepak M. Dandekar, Mr. Ashish S. Dandekar, Mr. Shishir S. Shirgaokar, Mr. Anil C. Singhvi Mr. Vijay N. Paranjpe and Mr. Deepak K. Ghaisas relinquished their Office. Mr. Dhananjay N. Mungale relinquished his office with effect from 17th January, 2012. Your Director feel privileged to have had long Association with the said Directors and express their appreciation for the valuable services rendered by them during their tenure.

Mr. Ramanathan Sriram retire by rotation and being eligible offer himself for re-appointment. Directors recommended his appointment.

The profiles of the Directors seeking appointment/ re-appointment forms part of the Corporate Governance Report.

None of the Directors are disqualified from being appointed as Directors as specified in Section 274(1) (g) of the Companies Act, 1956.

INCREASE IN AUTHORISED SHARE CAPITAL:

To facilitate further issue of Equity Capital in future for funding Company's growth plans, your Company has proposed to increase Authorized Share Capital from Rs 10.00 Crores to Rs 20.00 Crores. At the 65th Annual General Meeting ordinary and special resolutions in respect of alteration in Capital Clause of Memorandum and Articles of Association are commended for your approval.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

i. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2012 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 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 ended 31st March, 2012 and of the profit 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 for the year ended 31st March, 2012 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. that the Directors have prepared the Annual Accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.

CORPORATE GOVERNANCE:

Your Company has always endeavored to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per the requirements of the Listing Agreements entered into with the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited a detailed Report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors' Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. The Management Discussion and Analysis Report also form part of this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred a sum of Rs 1.76 Lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents unclaimed dividend, Principal Amount of Fixed Deposit and interest on fixed deposits which remained unclaimed with the Company for a period of 7 years from their respective due dates of payment.

CHANGE IN NAME OF THE COMPANY:

To reflect the name of the holding Company, your Company had changed its name from CAMLIN LIMITED to KoKUYo CAMLIN LIMITED and the necessary Certificate to that effect has been received from Registrar of Companies, Maharashtra, Mumbai on 25th January, 2012.

SHIFTING OF THE REGISTERED OFFICE OF THE COMPANY:

With effect from 19th October, 2011, the Registered office of the Company has been shifted from 9-B, Nanddeep Industrial Estate, J. B. Nagar, Andheri (E), Mumbai - 400 059 to 48/2, Hilton House, Central Road, MIDC, Andheri (East), Mumbai - 400 093.

AUDITORS:

The retiring Auditors, B. K. KHARE and Co., Chartered Accountants, Mumbai, being eligible have given their consent for re-appointment for the year 2012-2013.

Information pursuant to Section 217 (2A) of the Companies Act, 1956:

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the corporate office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company believes it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. The Company is involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals for the last 3 years.

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

As required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure B to this report.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Members, Depositors, Bankers, Financial Institutions and the Customers for their active support and patronage. We also wish to acknowledge the spirit of dedication, commitment and co-operation extended by employees at all levels.

For & on behalf of the Board

DILIP DANDEKAR

CHAIRMAN & MANAGING DIRECTOR

Place: Mumbai

Dated: 15th June, 2012.


Mar 31, 2011

The Directors have pleasure in presenting herewith the 64th Annual Report and Audited Statements of Account for the Financial Year ended 31st March, 2011.

HIGHLIGHTS OF 2010-11:

- Net Sales were at Rs. 35723.22 Lacs as compared to Rs. 33033.76 Lacs.

- Profit before tax was at Rs. 1205.71 Lacs as compared to Rs. 1657.39 Lacs.

- The Directors have recommended a lower dividend at the rate Rs. 0.25 per share on face value of Rs. 1/- each.

FINANCIAL RESULTS: (Rs. Lacs)

2010-11 2009-10

Profit Before Extraordinary/ 1312.38 1824.47 Exceptional Item &Tax

Less: Exceptional item 106.67 -

Extraordinary item (Amortisation of VRS cost) - 167.08

1205.71 1657.39

Less: Provision for Tax

- Current 325.00 390.00

- Deferred 16.20 43.10

-Prior Year (Net) 5.83 20.06

Profit After Tax 858.68 1204.23

Balance brought forward 1634.82 983.06 from last year

Less: Prior year appropriation 0.25 - (Dividend and Tax thereon)

Balance Carried forward 2493.25 2187.29

Transferred to:

Proposed Dividend 152.66 301.27

Corporate Tax on Dividend 25.94 51.20

General Reserve 100.00 200.00

Balance Carried Forward 2214.65 1634.82

2493.25 2187.29

OPERATING PERFORMANCE:

During the year your Company reported a net sales of Rs. 35723.22 Lacs as compared to Rs. 33033.76 Lacs for the last year representing marginal growth over the previous year. Profit before Tax for the year ended 31st March, 2011 was lower at Rs. 1205.71 Lacs as against Rs. 1657.39 Lacs for the previous year.

Inspite of marginal growth in net sales the profitability for the year was impacted adversely on account of

Increase in Raw Material Cost, Overheads and Interest on borrowings.

EMPLOYEE STOCK OPTION SCHEME:

In accordance with the Employee Stock Option Scheme, the Remuneration and Compensation Committee, on 21st July, 2008 had approved the grant of 25,72,500 Equity Shares of Rs. 1 /- each at an exercise price of Rs. 16/- per share. On 20th July, 2010 second 30% of the total options granted under ESOP scheme vested to the Employees of the Company.

During the year under review, the Company allotted 8,11,012 Equity Shares upon exercise of Stock Options to the eligible employees under the said ESOP scheme.

The applicable disclosure as stipulated under the SEBI Guidelines as at 31st March, 2011 is given in annexure A to this report.

DIVIDEND:

The Directors recommended payment of lower Dividend of Rs. 0.25 per Equity Share of Rs. 1 /- each.

SHARE SUBSCRIPTION AND JOINT VENTURE AGREEMENTS WITH K0KUY0 S&T CO. LTD.

On 30th May, 2011, Share Subscription and Joint Venture Agreements were executed between the Company, its promoters and Kokuyo S&T Co,. Ltd., Japan, (Kokuyo) which is a 100% subsidiary of Kokuyo Co,. Ltd., a leading Company in Japan with over 100 years of experience in stationery and furniture products, design and construction of office & store interiors, mail order business, lifestyle retail and distribution. These products and services play a vital role in fulfilling the needs of homes, schools and offices. The products of the Company and that of Kokuyo are complimentary to each other and if combined would build a complete range of products, offerings in the stationery business.This collaboration with Kokuyo will promote the long term relationship which will benefit the Company enabling it to offer a wider range of products in the Indian market.

Further, to augment its long term resources for its capital expenditure and for implementing the future growth plan of the Company, the Board on 30th May, 2011 also approved the proposal for preferential

allotment of 6934000 Equity Shares of Rs. 1 /- each at a price of Rs. 85/- per share (aggregating to 10% of the total equity capital) which Kokuyo has agreed to subscribe. An Extra Ordinary General Meeting of the Company has been convened for 29th June, 2011 for seeking the approval of the members. The price of Rs. 85/- per share is not less than the minimum price at which Equity Shares are permitted to be issued as per Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure) Regulations 2009. In connection with the said issue, Kokuyo has executed a Share Subscription Agreement on 30 th May 2011 with the Company.

Under the Joint Venture Agreement, some of the promoters of the Company have agreed to sell approximately 23% Equity Shares of the current Equity Share Capital to Kokuyo, subject to Kokuyo making an open offer to acquire 20% share from the public shareholders under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Upon acquiring shares under the preferential allotment, transfer of shares by promoters and after acquiring shares under the open offer Kokuyo would be holding approximately 50.30% of the fully diluted Equity Capital of your Company.

SUBSIDIARY COMPANIES:

In terms of provision of Section 212(8) of the Companies Act, 1956, Copies of Balance Sheet and Profit & Loss Account, Report of the Directors and Auditor of the Subsidiaries have not been attached to the Annual Accounts of the Company. These documents will, however, be made available upon request by any member of the Company and also available on the Companys web-site www.camlin.com. The financial data of the Subsidiaries have been annexed and forms part of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS:

As required under Clause 32 of the Listing Agreement and Accounting Standard No.21 .issued by the Institute of Chartered Accounts of India, the Consolidated Financial Statements for the year ended 31st March, 2011 have been prepared by the Company and the said audited statements form part of the Annual Report.

DEPOSITS:

The Company has not accepted any fixed deposits during the year.There are no overdue deposits except unclaimed deposits amounting to Rs. 2.09 Lacs as at 31st March, 2011.

DIRECTORS:

Mr. Deepak M. Dandekar, Mr. Shishir B. Desai, and Mr. Ramanathan Sriram retire by rotation and being eligible offer themselves for re-appointment. You are requested to re-appoint them.

At the 64th Annual General Meeting four Special Resolutions are commended for your approval. The Resolutions at item no. 7 to 10 are for payment of remuneration to Wholetime Directors for the period 1st April, 2010 to 31st March, 2013 as earlier approved by the Remuneration and Compensation Committee and the shareholders at the 63rd Annual General meeting of the company held on 29th June, 2010.

None of the Directors are disqualified from being appointed as Directors, as specified in Section 274 (1) (g) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

I. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2011 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 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 ended 31st March, 2011 and of the profit 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 for the year ended 31st March, 2011 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. that the Directors have prepared the Annual Accounts for the financial year ended 31st March 2011 on a going concern basis.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary. The findings of the Secretarial Audit were entirely satisfactory.

CORPORATE GOVERNANCE:

Your Company has always endeavored to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per the requirements of the Listing Agreements entered into with the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited a detailed Report on Corporate Governance is given as a part of the Annual Report.The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. The Management Discussion and Analysis Report also form part of this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred a sum of Rs. 1.45 Lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents unclaimed dividend, and interest on fixed deposits which remained unclaimed with the Company for a period of 7 years from their respective due dates of payment.

AUDITORS:

The retiring Auditors, B. K. KHARE and Co., Chartered Accountants, Mumbai, being eligible have given their consent for re-appointment for the year 2011-2012. You are requested to appoint them.

INFORMATION PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956:

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975,

as amended, forms part of this report. However, as per the provisions of Section 219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the corporate office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Camlin believes it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. Camlin is involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals for the last 3 years,

The Company sponsors drawing material and colours for several schools across the country as well as for mentally challenged children to foster their creative skills. Camlin has also undertaken several activities to promote art in the country including the Annual All India Camel Colour Contest, All India Art Teachers Art exhibitions which aim to promote artistic talent amongst art teachers as well as the Camel Art Foundation which organises regional art exhibitions for professional artists and fine art students.

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

As required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure B to this report.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Members, Depositors, Bankers, Financial Institutions and the Customers for their active support and patronage. We also wish to acknowledge the spirit of dedication, commitment and co-operation extended by employees at all levels.

For & on behalf of the Board

DILIP D. DANDEKAR CHAIRMAN & MANAGING DIRECTOR

Place: Mumbai Dated: 30th May, 2011.


Mar 31, 2010

The Directors have pleasure in presenting herewith the 63rd Annual Report and Audited Statements of Account for the Financial Year ended 31st March, 2010.

HIGHLIGHTS OF 2009-10:

Net Sales grew at a sizable pace and reached to Rs. 33033.76 Lacs as compared to Rs. 28311.46 Lacs, registering a growth of about 17% over the previous year.

m Profit before tax was at Rs. 1657.39 Lacs as compared to Rs. 955.37 Lacs registering significant growth over 73%.

s EBIDTA stood at Rs. 2924.21 Lacs against Rs. 2087.75

Lacs in the previous year registering a growth over 40%. ® The Directors have recommended a higherdividend at the rate Re. 0.50 per share on face value of Re. l/-each. m Earnings per share almost doubled to Rs. 2.00 as compared to Rs. 1.02 in the previous year.

FINANCIAL RESULTS: (Rs. in Lacs) Profit Before Extraordinary 1824.47 1123.35 Item & Tax Less: Extraordinary items Amortisation of VRS cost 167.08 167.98 1657.39 955.37 Less: Provision for Tax - - Current/FBT 390.00 253.00 - Deferred 43.10 85.21 - Prior Year (Net) 20.06 5.69 Profit after Tax 1204.23 611.47 Balance brought forward 983.06 657.18 from last year Balance carried forward 2187.29 1268.65 Transferred to: Proposed Dividend 301.27 180.00 Corporate Tax on Dividend 51.20 30.59 General Reserve 200.00 75.00 Balance carried forward 1634.82 983.06 2187.29 1268.65

OPERATING PERFORMANCE:

The performance of your Company during the year under report registered an improvement over the previous year. Sales at Rs. 33033.76 Lacs and Profit before Tax at Rs. 1657.39 Lacs during the year ended 31st March, 2010 represent an increase of 16.68% and 73.48% respectively, over the previous year. This increase was mainly on account of higher capacity utilization, effective working capital management, reduction in material cost and marketing initiatives, undertaken during the year.

Profit after tax at Rs. 1204.23 Lacs was higher by 96.94% compared to the previous year.

CASH FLOW MANAGEMENT:

With focus on cash flows and working capital management, your Company continued to utilise the bank borrowing to the optimum during the year. Internal cash accruals were effectively used for capital expenditure of the Company. Capital Expenditure incurred during the year aggregated to Rs.1506 Lacs. During the year your Company floated Commercial Paper of Rs. 2000 Lacs at very low interest rate. The said Commercial Paper was assigned "PI" rating byCRISIL.

EMPLOYEE STOCK OPTION SCHEME:

In accordance with the Employee Stock Option Scheme, the Remuneration and Compensation Committee, on 21st July, 2008 approved the grant of 25,72,500 Equity Shares of Re.l/- each at an exercise price of Rs.16/- per share. On 20th July, 2009, the first 40% of the total options granted under ESOP scheme vested to the Employees of the Company.

During the year under review, the Company allotted 2,53,525 Equity Shares upon exercise of Stock Options to the eligible employees under the said ESOP scheme.

The applicable disclosure as stipulated under the SEBI Guidelines as at 31st March, 2010 is given in annexure A to this report.

DIVIDEND:

The Directors recommended payment of higher Dividend of Re. 0.50 per Equity Share of Re.l /- each.

SUBSIDIARY COMPANIES:

In terms of approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, Copies of Balance Sheet and Profit & Loss Account, Report of the Directors and Auditor of the Subsidiaries have not been attached to the Annual Accounts of the Company. These documents will, however, be made available upon request by any member of the Company and also available on the Companys web-site www. camlin.com. As directed by the Central Government in its approval the financial data of the Subsidiaries have been annexed and forms part of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS:

As required under Clause 32 of the Listing Agreement and Accounting Standard No.21, issued by the Institute of Chartered Accounts of India, the Consolidated Financial Statements for the year ended 31sf March, 2010 have been prepared by the Company and the said audited statements form part of the Annual

Report.

I DEPOSITS:

The Company has not accepted any fixed deposits during the year. There are no overdue deposits except unclaimed deposits amounting to Rs. 2.59 Lacs as at 31st March, 2010.

DIRECTORS:

Mr. Dhananjay N. Mungale, Mr. Deepak K. Ghaisas and Mr. Vijay N. Paranjpe retire by rotation and being eligible offer themselves for re-appointment. You are requested to re-appoint them.

Mr. Dilip D. Dandekar, Chairman & Managing Director, Mr. Rajiv M. Dandekar, Joint Managing Director, Mr. Shriram S. Dandekar and Mr. Deepak M. Dandekar, Executive Directors have been appointed by the Board with revision of Remuneration for a period of three year w.e.f. 1st April, 2010. In the interest of the Company, Directors recommend their appointment. Details regarding the persons proposed to be appointed/ re-appointed as Directors and their brief resume have been given in the Annexure attached to the Notice.

None of the Directors are disqualified from being appointed as Directors, as specified in Section 274 (1) (g) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

I. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2010 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 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 ended 31st March, 2010 and of the profit 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 for the year ended 31st March, 2010 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. that the Directors have prepared the Annual Accounts for the financial year ended 31st March, 2010 on a going concern basis.

SECRETARIAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Secretarial Audit has been carried out at the specified period, by a Practicing Company Secretary. The findings of the Secretarial Audit were entirely satisfactory.

CORPORATE GOVERNANCE:

Your Company has always endeavored to adhere to high standards of Corporate Governance and ensured its compliance both in spirit and law. As per the requirements of the Listing Agreements entered into with the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited a detailed Report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. The Management Discussion and Analysis Report also form part of this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred a sum of Rs. 1.85 Lacs during the financial year to the Investor Education and Protection Fund established by the Central Government. The said amount represents unclaimed dividend, principal amount of fixed deposits and interest on fixed deposits which remained unclaimed with the Company for a period of 7 years from their respective due dates of payment.

AUDITORS:

The retiring Auditors, B.K. Khare & Co., Chartered Accountants, Mumbai, being eligible have given their consent for re-appointment for the year 2010-2011. You are requested to appoint them.

INFORMATION PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956:

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the corporate office of the Company.

CORPORATE SOCIAL RESPONSIBILITY(CSR):

Camlin believes it has a duty and responsibility to give back to the country and the society that have enabled the Company to scale great heights. Camlin is involved in various CSR initiatives on several fronts. The Company spreads awareness on the importance of cleanliness and hygiene amongst school children and hospitals. For the last 3 years, Camlin has been aiding the Rescue Foundation by giving the girls in the Foundation oil pastel labeling work that provides them with a source of income.

The Company sponsors drawing material and colours for several schools across the country as well as for mentally challenged children to foster their creative skills. Colours are also sponsored for Warli paintings under the Adivasi

Utthan Programme. Camlin has also undertaken several activities to promote art in the country including the annual All India Camel Colour Contest, All India Art Teachers Art Exhibitions which aim to promote artistic talent amongst art teachers as well as the Camel Art Foundation which organises regional art exhibitions for professional artists and fine art students.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO:

As required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the relevant information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure B to this report.

ACKNOWLEDGEMENT:

Your Directors wish to express their gratitude to the Members, Depositors, Bankers, Financial Institutions and the Customers for their active support and patronage. We also wish to acknowledge the spirit of dedication, commitment and co-operation extended by employees at all levels.

For & On behalf of the Board Dilip D. Dandekar CHAIRMAN & MANAGING DIRECTOR

Place: Mumbai Dated: 29th April, 2010.

 
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