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Directors Report of Natural Capsules Ltd.

Mar 31, 2015

DEAR MEMBERS,

The Directors have pleasure in presenting their twenty second Annual Report together with the Audited Accounts of the company for the year ended 31st March 2015.

FINANCIAL RESULTS:

The Company's financial performance, for the year ended March 31,2015 is summarized below:

(Rs. In Lacs)

Particulars March31,2015 March31,2014

Gross Sales 7194.38 6239.95

Less : Excise duty 462.30 386.97

Net Sales 6732.08 5852.98

Other lncome 79.45 89.14

Total 6811.53 5942.12

Profit before depreciation & 1156.39 1104.02 taxation

Less:Depreciation 402.67 361.36

Less:Provisionfortaxation 236.11 170.93

Less: Prior period adjustment (Taxation) 6.37 nil

Add:Deferred Tax withdrawn 53.68 (115.53)

Profit aftertaxation 564.92 456.19

Add: Balance brought forward from

previous year 3247.99 2902.17

Surplus available for appropriation 3812.91 3358.36

Appropriations

General Reserve 28.25 22.81

Proposed Dividend 78.64 75.34

Tax inDividend 16.01 12.22

Additional depreciation on fixed asset

asper Companies Act,2013 97.00 nil

Balance carried to Balance sheet 3593.01 3247.99

Total 3812.91 3358.36

The company proposes to transfer an amount of Rs. 28.25 lacs to the General Reserves. An amount of Rs. 3593.01 lacs is proposed to be retained in the statement of Profit & Loss account.

OPERATIONAL REVIEWS:

Gross revenues increased to Rs. 7194.38 lacs, a growth of around 15.30% against Rs. 6239.95 lacs in the previous year. Profit before depreciation and taxation was Rs. 1156.39 lacs against Rs. 1104.02 lacs in the previous year. After providing for depreciation and taxation of Rs. 402.67 lacs & 236.11 lacs respectively, the net profit of the Company for the year under review was placed at Rs. 564.92 lakhs as against Rs. 456.19 lacs previous year.

Due to tough market conditions, increase in cost of inputs and reduction in margins, the percentage increase in profit has not been proportionate to the increase in turnover. However, the profit after tax has increased by 23.83% during the year under review.

DIVIDEND:

Based on the performance of the Company and the need for conservation of internal accruals, your Directors are pleased to recommend a final dividend of Rs.1.5 per equity share at the rate of 15% subject to the approval of members. The dividend, if approved by the Members, will result in the out flow of Rs. 78.64 lacs from the company in addition to Rs. 16.01 lacs by way of dividend distribution tax. Dividend if declared will be paid to the Members whose names appear in the Register of Members as on the date of the AGM.

SHARE CAPITAL:

During the year under consideration, the paid up capital increased from Rs. 502.27 lacs to 524.27 lacs, by conversion of share warrants into equity (which formed part of earlier preferential issue of equity shares to promoter group in the financial year 2013- 14). The additional equity was issued at a premium of Rs. 26/- per equity share. In principle approval for additional issue of equity shares was obtained from Bombay Stock Exchange. The company has made application for filing listing and the approval for the same is awaited from Bombay Stock Exchange.

FINANCE:

Cash and cash equivalents as at March 31,2015 was Rs. 16.56 lacs. The company continues to focus on judicious management of its working capital, Receivables, Inventories and other working capital parameters were kept under strict check through continuous monitoring.

FIXED DEPOSITS:

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any loans orguarantees covered under the provisions of section 186 of the Companies Act, 2013. There were no investments made by company during the year under consideration.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the internal auditor reports to the chairman of the audit committee and to the Chairman & Managing Director of the Company.

The Audit Committee monitors and evaluates the efficacy and adequacy of internal control system in the company, its compliance with operating systems, accounting procedures and policies at all locations of the company. Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee ofthe Board.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

As part of its initiatives under "corporate social responsibility" (CSR), the CSR committee has taken steps to find out such activities to contribute. The CSR committee has calculated the CSR fund amounting to Rs. 28.41 lacs for the year ending as on March 31,2015 and the amount will be spent on the CSR activities to be identified shortly. Identification of CSR activities is under process.

CONSERVATION OF ENERGY:

Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved. The particulars as per Form A are attached to this report.

TECHNOLOGY ABSORPTION:

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is involved. The company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal. The company is having ongoing research and development activity to develop value added products as per details given in Form-B attached to this report.

FOREIGN EXCHANGE EARNINGS AND OUT-GO:

During the period under review, your company has gained Rs. 21.59 lacs owing to foreign exchange fluctuations. Export revenue constituted 31.41 % of Total Revenue as against 26.75% in the previous year.

Foreign Exchange Earnings : Rs. 21,39,58,939/- Foreign Exchange Outgo : Rs. 2,44,45,628/-

INDUSTRIAL RELATIONS:

During the year under review, your company enjoyed cordial relationship with workers and employees at all levels.

EXPANSION:

During the year company commissioned the last machine after modification at Pondicherry plant. With the commissioning of this machine the installed capacity of both units put together has increased to 7.8 Billion capsules per annum.

Further company started work for installation of an additional modified capsule line along with other required utilities at Bangalore unit for manufacture of HPMC capsules, and the same is likely to get commissioned during first quarter of next year.

DIRECTORS:

Mr. Sushil Kumar Mundra and Mr. Sathyanarayan Mundra, Directors retire by rotation and being eligible, offer themselves for re appointment.

Mrs.Jyoti Mundra (relative of Promoter Directors) was appointed as an Additional Director (Woman Director) in consonance with the requirements of Sec.149 of companies Act, 2013 and clause 49 of Listing Agreement. Accordingly, she vacates office at this AGM. Being eligible, a notice has been received from a member proposing her appointment as a regular non executive Director. It is proposed to appoint heras a Director.

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

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the listing agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the corporate governance report.

Remuneration Policy

The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The remuneration policy is stated in the corporate governance report and has been posted in company's website www.naturalcapsules.com

Meetings

During the year seven Board Meetings and four audit committee meetings were convened and held. The details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the year under review.

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

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

v) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are operating effectively.

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

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large.

SUBSIDIARY COMPANIES:

The company does not have any subsidiary.

CODE OF CONDUCT:

The Board of Directors has approved a code of conduct which is applicable to the members of the Board/committees and all employees in the course of day to day business operations ofthe company. The company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an appendix to the code. The code has been posted on the company's website www.naturalcapsules.com.

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

All the Board members and the senior management personnel have confirmed compliance with the code. All management staff was given appropriate training in this regard.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The company has a vigil mechanism policy to deal with instances offraud and mismanagement, ifany. In staying true to our values of strength, performance and passion and in line with our vision of being one of the respected companies in India, the company is committed to the high standards of corporate governance and stakeholder responsibility.

The company has a fraud risk management policy to deal with instances offraud and mismanagement, ifany. The policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

High level committee has been constituted which looks into the complaints raised. The committee reports to the audit committee and the Board.

PREVENTION OF INSIDER TRADING:

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

All Board of Directors and the designated employees have confirmed compliance with the Code.

AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT:

The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company would ensure in future that all the provisions are complied with the fullest extent.

AUDITORS:

The Auditors M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore, continues to be eligible as company's statutory auditors and it is proposed to ratify their appointment for the financial year 2015-16 on the same remuneration in this AGM.

SECRETARIAL AUDIT:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. R.Parthasarathi, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure B"

EXTRACT OF ANNUAL RETURN:

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

BUSINESS RISK MANAGEMENT:

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report.

At present the company has not identified any element of risk which may threaten the existence of the company. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors and KMP are given in CORPORATE GOVERNANCE REPORT BELOW, which form an integral part of this Report, are set out as separate Annexure.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

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

ACKNOWLEDGEMENTS:

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

For and on behalf of the Board of Directors

Bangalore Sunil L Mundra Satyanarayan Mundra May30,2015 Managing Director Whole Time Director


Mar 31, 2014

Dear Members,

The directors hereby present the twentieth Annual Report together with the Audited Accounts of the company for the year ended 31st March 2014.

1. FINANCIAL RESULTS:

The Comparative financial results for the period are as under: 2013-14 2012-13 (Rs. In lacs) (Rs. In lacs)

Sales & other income 5,942.12 5,418.89

PBDI 1,196.57 1,163.97

Depreciation & Preliminary exp 361.36 311.13

Interest 92.26 123.43

Profit/(Loss) before tax 742.65 729.41

Provision for taxation 170.92 190.05

Deferred tax 115.53 (20.99)

Prior period taxes 0.0 (72.75)

Profit/(Loss) after tax 456.19 633.11

Amount transferred to reserves 22.81 31.66

2. PERFORMANCE & PROSPECTS:

During the year under review, the company''s turnover was Rs. 5942.12 lacs and the company has earned a Net profit (before tax) of Rs 742.65 lacs as against the corresponding net profit of Rs 729.42 lacs in the previous year. An amount of Rs.440.55 lacs was ploughed back from profits for funding the ongoing expansion at Pondicherry. The exports of the company has increased by 10.96% due to continuous efforts being made by sales team. Even though the overall sales turnover has increased by 9.46%, the profit before tax has increased by 1.82% only, due to higher input costs.

3. FLUCTUATION IN FOREIGN EXCHANGE:

The Company has benefited to an extent of Rs 43.24 lacs owing to foreign exchange fluctuation.

4. PERFORMANCE CREDIT RATING:

Your Directors are pleased to inform you that the Company has obtained "ICRA" rating of "A3 " indicating short term and long term financial stability. This has helped in reduction in interest rate charged by the Company''s bankers.

5. Dividend:

While considering the need for conservation of resources for ongoing expansion, your Directors are pleased to recommend a dividend of Rs 1.50 per equity share of Rs 10/- each for the year ended 31-3-2014 for the members whose names appear in the register of members as on the date of AGM viz. 27.08.2014.

6. CAPITAL:

During the year under review, the authorized capital increased, from Rs 5 crs to Rs 6 crs and paid up has increased from Rs 450.27 lakhs to Rs 502.27 Lakhs. The additional equity was issued at a premium of Rs 135.2 lakhs. In principle approval for additional issue of equity shares was obtained. The company has made application for filing listing and the approval for the same is awaited from Bombay Stock Exchange.

7. EXPANSION:

During the year under consideration the company has commissioned all but one of the imported machines after modification. With the commissioning of all these machines the installed capacity of the company has increased to 7.35 billion capsules per annum. Recently Company has also procured one more generator and imported Auto Capsule Inspecting machines to monitor the quality of products.

8. DIRECTORS:

Mr V. Subramony has resigned as a Director effective from 15/05/2013 due to his ill health and Mr V. Balaji Bhat, has resigned on 02-09-2013 citing personal reasons. The Board wishes to place on record their valuable contribution to the company in their capacity as Directors. Mr Laxminarayana Mundra ceased as Whole-time Director on 31-05-2014 on attaining the age of 70 years. However, considering his business experience and major contribution as Promoter Director and Whole time Director towards progress of the Company, and the need to his continuous contribution for sustaining and furthering the growth prospects of the Company, it is proposed to reappoint him as a Whole-time Director of the Company for a period of three years w.e.f 01-09-2014. He is otherwise eligible for re-appointment.

Mr S Gopalan, Mr C P Rangachar and Dr C M Gurumurthy were functioning as Independent Directors. Considering their educational, business back ground and immense contribution towards progress of the Company, as required by new Companies Act 2013 and being eligible, it is proposed to appoint them as Independent Directors for a period of 5 years as recommended by Nomination and Remuneration Committee.

In view of the tenure of Managing Director, Mr Sunil L Mundra and Mr.Satyanarayan Mundra, Whole-Time Director, and considering their business background and immense contribution towards the progress of the Company the Board of Directors have re-appointed them for a further period of five years w.e.f 01.06.2014 subject to the approval of Members. They are otherwise eligible for re-appointment.

9. DISCLOSURE OF PARTICULARS AS PER BOARD''S REPORT RULES 1988:

A. CONSERVATION OF ENERGY:

The particular as per Form A is attached to this report.

B RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Company is having an ongoing research and development activity to develop value added products as per details given in Form-B attached to this report.

C. FOREIGN EXCHANGE, EARNINGS & OUTGO DURING THE YEAR:

Foreign exchange earning: Rs. 1537.40 Lacs

Foreign exchange outgo : 30.43 Lacs

D. EXPORTS;

During the year the export turnover was Rs 1,590 lakhs as against Rs 1,432 lakhs in previous year. Company hopes to improve upon the last year''s performance.

10. DIRECTOR''S RESPONSIBILITY STATEMENT:

A) In the preparation of the annual accounts, the applicable accounting Standards have been followed.

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

C) The directors have taken proper and sufficient care for 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 the fraud and other irregularities.

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

11. AUDITORS:

M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. Being eligible for re- appointment, it is proposed to re-appoint them for a period of 3 years as per the provisions of new Companies Act 2013.

12. REPORT ON CORPORATE GOVERNANCE

A separate report on Corporate Governance is given in the Annexure A & B.

13. Clause 49 of the Listing Agreement:

a. During the year under report the trading of the company''s securities has not been suspended by the Stock Exchanges with which the shares are listed.

b. The names and addresses of the Stock Exchanges with which the company''s Securities are listed are as follows:

i) Bangalore Stock Exchange Ltd, 51, Stock Exchange Towers, 1st Cross, J C Road, Bangalore 560 027

ii) The Stock Exchange Mumbai, PJ Towers, Dalai street, Mumbai-400 001

c. The annual listing fees of the above Stock Exchanges have been paid.

14. FIXED DEPOSITS:

During the year under consideration, your Company has not accepted any deposits from the Public as per the provisions of the Companies Act 2013.

15. PARTICULARS OF EMPLOYEES:

There is no employee drawing a remuneration of Rs.5 Lakhs and above per month or Rs.60 lakhs per annum, as per the provisions of the Companies Act.

13. ACKNOWLEDGEMENTS:

The Management wishes to place on record its sincere thanks and appreciation to State Bank of India, Specialised Commercial Branch, Bangalore-1, for their continued financial support and guidance, and its appreciation for the excellent co-operation extended by the staff & workers of the company. Management also wishes to place on record its appreciation for the valuable support extended by various Government agencies at Bangalore and Pondicherry.

For & on behalf of the Board

Place: Bangalore Date: 28th May, 2014 S.GOPALAN CHAIRMAN


Mar 31, 2013

TO THE MEMBERS

The directors hereby present the twentieth Annual Report together with the Audited Accounts of the company for the year ended 31s''March 2013.

1. FINANCIAL RESULTS:

The Comparative financial results for the period are as under:

2012-13 2011-12 (Rs. In lacs) (Rs. In lacs)

Sales & other income 5,418.89 4,459.17

PBDI 1,163.97 1,177.29

Depreciation & Preliminary exp 311.13 270.30

Interest 123.43 134.73

Profit/(Loss) before tax 729.41 772.26

Provision for taxation 190.05 232.55

Deferred tax (20.99) 10.53

Prior period taxes (72.75) 22.29

Profit/(Loss) after tax 633.11 506.87

Amount transferred to reserves 31.66 25.34

2. PERFORMANCE & PROSPECTS:

During the year under review, the company''s turnover increased by 22.22% and the company has earned a Net profit (before tax) of Rs 729.41 lacs as against the corresponding net profit of Rs 772.26 lacs in the previous year. An amount of Rs.554.62 lacs was ploughed back from profits for funding the ongoing expansion at Pondicherry. The export turnover of the company has increased significantly due to continuous efforts being made by sales team. At the same time even though the overall sales turnover has increased by 22.22%, the profit before tax has decreased by 5.54%, mainly due to increase in all input costs.

3. FLUCTUATION IN FOREIGN EXCHANGE: The

Company has benefitted to an extent of Rs 23.16 lacs owing to foreign exchange fluctuation.

4. PERFORMANCE CREDIT RATING:

Your Directors are pleased to inform you that the Company has obtained "ICRA" rating of "A3 " indicating short term and long term financial stability. This has helped in reduction in interest rate charged by the Company''s bankers.

5. Dividend:

While considering the need for conservation of resources for ongoing expansion, your Directors are pleased to recommend a dividend of Rs 1.50 per equity share of Rs 10/- each for the year ended 31 -3- 2013 for the members whose names appear in the register of members as on the date of AGM viz., 25.7.2013.

6. EXPANSION:

During the year under consideration the company has commissioned one of the imported machines after modification. Company is yet to commission 2 machines out of 9 machines imported earlier. With the commissioning of all these machines the installed capacity of the company will increase to 7.35 billion capsules per annum.

7. DIRECTORS:

Mr V. Subramony has resigned as a Director effective from 15/05/2013 due to his ill health and the Board wishes to place on record his invaluable contribution to the company in his capacity as Director. Dr C M Gurumurthy and Mr Sushilkumar Mundra, Directors,retire at this Annual General Meeting and being eligible, offer themselves for re-appointment.

8. DISCLOSURE OF PARTICULARS AS PER BOARD''S REPORT RULES 1988:

A. CONSERVATION OF ENERGY:

The particular as per Form Ais attached to this report.

B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Company is having an ongoing research and development activity to develop value added products as per details given in Form-B attached to this report.

C. FOREIGN EXCHANGE, EARNINGS & OUTGO DURING THE YEAR:

Foreign exchange earning: Rs.1,211.53Lacs Foreign exchange outgo : Rs. 51.43 Lacs

9. DIRECTOR''S RESPONSIBILITY STATEMENT:

A) In the preparation of the annual accounts, the applicable accounting Standards have been followed.

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

C) The directors have taken proper and sufficient care for 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 the fraud and other irregularities.

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

9. AUDITORS:

M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. Being eligible for re-appointment, it is proposed to re-appoint them.

10. REPORT ON CORPORATE GOVERNANCE:

A separate report on Corporate Governance is given in theAnnexure A&B.

11. Clause 49 of the Listing Agreement:

a. During the year under report the trading of the company''s securities has not been suspended by the Stock Exchanges with which the shares are listed.

b. The names and addresses of the Stock Exchanges with which the company''s Securities are listed are as follows:

i) Bangalore Stock Exchange Ltd, 51, Stock Exchange Towers, 1st cross, JC Road, Bangalore 560027.

ii) The Stock Exchange Mumbai, PJ Towers, Dalai Street, Mumbai-400001.

c. Coimbatore Stock Exchange Ltd. with whom company''s Securities were listed earlier, has informed the Company that they have ceased to exist from4thApril2013.

d. The annual listing fees of the above Stock Exchanges have been paid.

12. ACKNOWLEDGEMENTS:

The Management wishes to place on record its sincere thanks and appreciation to State Bank of India, Specialised Commercial Branch, Bangalore-1, for their continued financial support and guidance, and its appreciation for the excellent co-operation extended by the staff & workers of the company. Management also wishes to place on record its appreciation for the valuable support extended by various Government agencies at Bangalore and Pondicherry.

For & on behalf of the Board

S.GOPALAN CHAIRMAN

Place: Bangalore *

Date: 25th May, 2013


Mar 31, 2012

The directors are pleased to present the Nineteenth Annual Report together with the Audited Accounts of the company for the year ended 31stMarch 2012.

1. FINANCIAL RESULTS:

The Comparative financial results for the period are as under:

2011-12 2010-11 (Rs. In lacs) (Rs. In lacs)

Sales & other income 4,459.17 3,453.96

Profit before Depreciation and interest 1,177.29 931.87

Depreciations Preliminary exp 270.30 187.33

Interest 134.73 80.76

Profit/(Loss) before tax 772.26 663.79

Provision for taxation 232.55 174.51

Deferred tax 10.53 40.92

Prior period expenses 22.29 1.60

Profit/(Loss) after tax 506.87 446.76

Amount transferred to reserves 25.34 11.17

2. PERFORMANCE & PROSPECTS :

During the year under review, the company's turnover increased by 29% and the company has earned a Net profit (before tax) of Rs. 772 lacs as against the corresponding net profit of Rs. 664 lacs in the previous year. An amount of Rs. 539 lacs was ploughed back from profits for funding the ongoing expansion at Pondicherry. The exports of the company has remained almost at same level due to difficult situations on international front. Though the sales turnover has increased by 29%, the profit after tax has increased by only 16% mainly due to increase in raw material costs, depreciation, interest, fuel and power costs etc.

3. FLUCTUATION IN FOREIGN EXCHANGE.

The Company has benefited to an extent of Rs. 28 lacs owing to foreign exchange fluctuation.

4. PERFORMANCE CREDIT RATING:

Your Directors are pleased to inform you that the Company has obtained "CRISIL" rating of "SME-1" indicating HIGHEST PERFORMANCE CAPACITY AND HIGH FINANCIAL STRENGTH for fourth successive year.

5. DIVIDEND:

While considering the need for conservation of resources for ongoing expansion, your Directors are pleased to recommend a dividend of Rs. 1.50 per equity share of Rs 10/- each for the year ended 31-3-2012, to the members whose names appear in the register of members as on the date of AGM viz., 26-7-2012.

6. EXPANSION:

During the year under consideration, the company has improvised / modified one of the imported machines and installed it as Pilot plant. Company is yet to commission 3 machines out of 9 machines imported ealrier. With the commissioning of all these machines the installed capacity of the company will increase to 7.35 billion capsules per annum.

7. DIRECTORS:

Mr. S. Gopalan and Mr. V. Balaji Bhat, Directors retire at this Annual General Meeting and being eligible, offer themselves for re-appointment.

8. DISCLOSURE OF PARTICULARS AS PER BOARD'8 REPORT RULES1988:

A. CONSERVATION OF ENERGY:

The particulars as per form 'A' is attached to this report.

B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Company is having an ongoing research and development activity to develop value added products as per details given in Form-B attached to this report.

9. DIRECTOR'S RESPONSIBILITY STATEMENT:

A) In the preparation of the annual accounts, the applicable accounting Standards have been followed.

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

C) The directors have taken proper and sufficient care for 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 the fraud and other irregularities.

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

10. AUDITORS:

M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. It is proposed to re-appoint them.

11. REPORT ON CORPORATE GOVERNANCE:

A separate report on Corporate Governance is given in the Annexure A&B.

12. Clause 49 of the Listing Agreement:

a. During the year under report the trading of the company's securities has not been suspended by the Stock Exchanges with which the shares are listed.

b. The names and addresses of the Stock Exchanges with which the company's Securities are listed are as follows:

i) Bangalore Stock Exchange Ltd, 51, Stock

Exchange Towers, 1st cross, JC Road, Bangalore 560027

ii) The Stock Exchange Mumbai, PJ Towers, Dalai street, Mumbai-400 001

iii) Coimbatore Stock Exchange Ltd, Stock exchange building, CSX Towers, 683-686,Trichy road, Singanallur, Coimbatore-641 005.

c. The annual listing fees of the above Stock Exchanges have been paid.

13. AUDITOR'S REMARKS:

(a) Reg. Para 9(b), (c) of Annexure to Auditors Report,

relating to disputed excise and income tax liabilities, the management is of the view that the Company is likely to win the appeal. (b) Reg. Para 9 (d) of the report, the managements of the view that the liability on account of above said statutory dues are insignificant.

14. ACKNOWLEDGEMENTS:

The Management wishes to place on record its sincere thanks and appreciation to State Bank of India, Specialised Commercial Branch, Bangalore-1, for their financial support and guidance, and its appreciation for the excellent co-operation extended by the staff & workers of the company. Management also wishes to place on record its appreciation for the valuable support extended by various Government agencies at Bangalore and Pondicherry.

For & on behalf of the Board

S.GOPALAN

CHAIRMAN

Place: Bangalore

Date : 26th May, 2012


Mar 31, 2011

TO THE MEMBERS:

The directors hereby present the Eighteenth Annual Report together with the Audited Accounts of the company for the year ended 31" March 2011.

1. FINANCIAL RESULTS:

The Comparative financial results for the period are as under:

2010-11 2009-10 (Rs. In lacs) (Rs. In lacs)

Sales & other income 3,453.96 2,948.98 Profit before Depreciation

and interest 931.87 817.41

Depreciation & Preliminary exp 187.33 145.87

Interest 80.76 30.53

Profit/(Loss) before tax 663.79 641.00

Provision for taxation 174.51 205.72

Deferred tax 40.92 8.71

Prior period expenses 1.60 -

Profit/(Loss) after tax 446.76 426.56

Amount transferred to reserves 11.17 10.66

2. PERFORMANCE & PROSPECTS :

During the year under review, the company's turnover increased by 17% and the company has earned a Net profit (before tax) of Rs 663.79lacs as against the corresponding net profit of Rs 641 .00 lacs in the previous year. An amount of Rs.665 lacs was ploughed back from profits for funding the ongoing expansion at Pondicherry. The exports of the company has increased by 21 % during the year under consideration. Though the sales turnover has increased by 17%, there was slight dip in profit as compared to previous year, mainly due to increase in depreciation and interest on account of commissioning of New machines and credit facilities.

3. PERFORMANCE CREDIT RATING:

Your Directors are pleased to inform you that the Company has obtained "CRISIL" rating of "SME-1" indicating HIGHEST PERFORMANCE CAPACITY AND HIGH FINANCIAL STRENGTH for third successive year

4. DIVIDEND:

While considering the need for conservation of resources for ongoing expansion, your Directors are pleased to recommend a dividend of Rs 1.20 per equity share of Rs 10/- each for the year ended 31-3-2011 the members whose names appear in the register of members as on the date of AGM viz., 27-7-2011.

5. EXPANSION:

During the year under consideration, the company has installed four imported machinery at Pondicherry. 5 out of 9 machines have been commissioned and balance 4 are at various stages of commissioning. With the commissioning of all these machines the installed capacity of the company will increase to 7.35 billion capsules per annum.

6. DIRECTORS:

Mr C P Rangachar and Dr C M Gurumurthy, Directors retire at this Annual General Meeting and being eligible, offer themselves for re-appointment.

7. DISCLOSURE OF PARTICULARS AS PER BOARD'S REPORT RULES1988:

A. CONSERVATION OF ENERGY: The particular as per form A is attached to this report.

B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Company is having an ongoing research and development activity to develop value added products.

C. FOREIGN EXCHANGE, EARNINGS & OUTGO:

Foreign exchange earning : Rs. 563.65 lacs Foreign exchange outgo Rs. 16.95 "

8. DIRECTOR'S RESPONSIBILITY STATEMENT:

A) In the preparation of the annual accounts, the applicable accounting Standards have been followed.

B) The directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial, year and of the profit of the company for the period.

C) The directors have taken proper and sufficient care for 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 the fraud and other irregularities.

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

9. AUDITORS:

M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. It is proposed to re-appoint them.

10. REPORT ON CORPORATE GOVERNANCE:

A separate report on Corporate Governance is given in the Annexure A&B.

11. Clause 49 of the Listing Agreement:

a. During the year under report the trading of the company's securities has not been suspended by the Stock Exchanges with which the shares are listed.

b. The names and addresses of the Stock Exchanges with which the company's Securities are listed are as follows:

i) Bangalore Stock Exchange Ltd, 51, Stock ExchangeTowers, 1 "cross, JC Road, Bangalore 560 027

ii) The Stock Exchange Mumbai, PJ Towers, Dalai street,Mumbai-400001

iii) Coimbatore Stock Exchange Ltd, Stock exchange building.CSX Towers, 683-686,Trichy road, Singanallur,Coimbatore-641 005.

c. The annual listing fees of the above Stock Exchanges have been paid.

12. ACKNOWLEDGEMENTS:

The Management wishes to place on record its sincere thanks and appreciation to State Bank of India, Specialised Commercial Branch, Bangalore-1, for their financial support and guidance, "and its appreciation for the excellent co-operation extended by the staff & workers of the company. Management also wishes to place on record its appreciation for the valuable support extended by various Government agencies at Bangalore and Pondicherry.

For & on behalf of the Board

S.GOPALAN CHAIRMAN

Place: Bangalore Date: 28th May, 2011


Mar 31, 2010

The directors hereby present the Seventeenth Annual Report together with the Audited Accounts of the company for the year ended 31 st March 2010.

1. FINANCIAL RESULTS:

The Comparative financial results forthe period are as under:

2009-10 2008-09

(Rs. In lacs) (Rs. In lacs)

Sales & other income 2,948.98 2605.64

Profit before Depreciation

and interest 817.41 745.06

Depreciation & Preliminary exp 145.87 118.19

Interest 30.53 9.84

Profit/(Loss) before tax 641.00 616.33

Provision for taxation 205.72 213.72

Deferred tax 8.71 5.12

Profit/(Loss) aftertax 426.56 397.51

Amount transferred to reserves 10.66 9.94

2. PERFORMANCE & PROSPECTS :

During the year under review, the companys turnover increased by 13% and the company has earned a Net profit (before tax) of Rs.641.00 lacs as against net profit of Rs.616.33 lacs in the previous year. An amount of Rs.565.00 lacs was ploughed back from profits for funding the ongoing expansion at Pondicherry. The export of the company has increased by 33% during the year under consideration. Though there is drop in sales realization due to rupee appreciation, with the commissioning of new machineries in phases in the current year your Directors are hopeful of maintaining the performance.

3. PERFORMANCE CREDIT RATING:

Your Directors are pleased to inform you that the Company has obtained "CRISIL" rating of "SME-1" indicating HIGHEST PERFORMANCE CAPACITY AND HIGH FINANCIAL STRENGTH for second successive year.

4. DIVIDEND:

While considering the need for conservation of resources for ongoing expansion, your Directors are pleased to recommend a dividend of Rs 1.20 per equity share of Rs 10/-each for the year ended 31-3-2010for the members whose names appear in the register of members as on the date of AGM viz., 28.9.2010.

5. EXPANSION:

During the year under consideration, the company has already installed one imported machinery at Pondicherry and other 8 machines are in various stages of installation. With the commissioning of all the machines, the installed capacity of company will increase to 7.35 billion capsules per annum.

6. DIRECTORS:

Mr. V.Subramony and Mr SushilkumarMundra retire at this Annual General Meeting and being eligible, offer themselves for re-appointment.

7. DISCLOSURE OF PARTICULARS AS PER BOARDS REPORT RULES1988:

A. CONSERVATION OF ENERGY:

The particular as per form Ais attached to this report.

B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Company is having an ongoing research and development activity to develop value added products.

C. FOREIGN EXCHANGE, EARNINGS & OUTGO:

Foreign exchange earning :Rs. 507.90 lacs

Foreign exchange outgo :Rs. 8.88 "

8. DIRECTORS RESPONSIBILITY STATEMENT:

A) In the preparation of the annual accounts, the applicable accounting Standards have been followed.

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

C) The directors have taken proper and sufficient care for 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 any fraud or other Irregularities.

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

9. AUDITORS:

M/S. Gnanoba & Bhat, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting. It is proposed to re-appoint them.

10. REPORT ON CORPORATE GOVERNANCE:

A separate report on Corporate Governance is given in the Annexure A& B.

ll.CLAUSE 49 OF THE LISTING AGREEMENT:

a. During the year under report the trading of the companys securities has not been suspended by the Stock Exchanges with which the shares are listed.

b. The names and addresses of the Stock Exchanges with which the companys Securities are listed are as follows:

i) Bangalore Stock Exchange Ltd, 51, Stock Exchange towers, 1st cross, JC Road, Bangalore - 560 027 ii) Bombay Stock Exchange Mumbai, PJ Towers, Dalai street, Mumbai-400 001 iii) Coimbatore Stock Exchange Ltd, Stock exchange building, CSX Towers, 683-686,Trichy road, Singanallur, Coimbatore - 641 005 c. The annual listing fees of the above Stock Exchanges have been paid.

ACKNOWLEDGMENTS:

The Management wishes to place on record its sincere thanks and appreciation to State Bank of India, Specialised Commercial Branch, Bangalore-1, for their financial support and guidance, and its appreciation for the excellent co-operation extended by the staff & workers of the company. The Management also wishes to place on record its apprecitation for the valuable support extended by various Government agencies at Bangalore and Pondicherry.

For & on behalf of the Board

Place: Bangalore

Date: 22nd May, 2010

S.GOPALAN*

CHAIRMAN

 
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