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Directors Report of Omkar Speciality Chemicals Ltd.

Mar 31, 2015

TO THE MEMBERS OMKAR SPECIALITY CHEMICALS LIMITED

The Directors have pleasure in presenting their Tenth Annual Report and Audited Financial Statements for the Financial Year ended on 31st March, 2015. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.

FINANCIAL HIGHLIGHTS:

The financial performance of the Company for the Financial Year ended 31st March, 2015 is summarized below:

(Rs. in Lakhs) Particulars Standalone Financial Perfo Consolidated Financial Perfor mance mance Year ended year ended year ended year ended 31st March, 31st March, 31st March, 31st March 2015 2014 2015 2014

INCOME

Revenue from Operation 19,331.31 20,962.11 26,513.37 24,027.98

Other Income 491.02 574.73 89.75 324.78

TOTAL REvENuE 19,822.33 21,536.84 26,603.12 24,352.76

expenditure

Cost of Material Consumed 10,364.19 9,354.11 13,804.31 11,213.37

Purchase of Stock in Trade 2,389.33 5,079.46 3,296.30 5,079.46

Changes in Inventories 674.25 283.38 (328.14) (178.77)

Employee Benefits Expense 1,018.33 988.25 1,434.88 1,392.66

Finance Costs 1,142.80 1,174.63 1,448.35 1,435.73

Depreciation & Amortization Expense 197.36 610.16 1,032.68 1,205.90

Other Expenses 1,991.13 1,967.18 3,089.25 2,227.28

TOTAL EXPENDITURE 17,777.39 19,457.17 23,777.63 22,375.63

Profit before Exceptional Items & 2,044.94 2,079.67 2,825.49 1,977.13

Extraordinary Items and Tax

Exceptional Items & Extraordinary Items - 6.60 - 6.60

profit before TAX 2,044.94 2,073.07 2,825.49 1,970.53

Tax Expenses 251.48 612.85 397.40 614.47

PROFIT AFTER TAX 1,793.46 1,460.22 2,428.09 1,356.06

Balance in Profit & Loss Account brought 4,753.28 3,737.52 4,583.87 3,672.27 forward from previous year

Less: Appropriations

Proposed Dividend 308.67 294.42 308.67 294.42

Tax on Dividend 52.46 50.04 52.46 50.04

Transfer to General Reserve 150.00 100.00 150.00 100.00

Balance carried to Balance Sheet 6,035.61 4,753.28 6,500.83 4,583.87

PERFORMANCE REVIEW:

During the year under review, the Company has reported a healthy increase in the consolidated net profit by 79.06% to Rs. 2,428.09 lacs, as compared to Rs. 1,356.06 lacs in the previous year. The total consolidated income for current financial year stood at Rs. 26,513.37 lacs as compare to Rs. 24,027.98 lacs in the previous year, recording a rise of 10.35%.

On the standalone basis, the Company's performance in the current financial year, in terms of total income stood at 19,331.31 lacs as compare to Rs. 20,962.11 lacs in the previous year. Despite of slight downfall in the topline, the net profit recorded during the current financial year on standalone basis is Rs. 1,793.46 lacs as compare to Rs. 1,460.22 lacs in the previous year reporting a rise of 23%.

SHARE CAPITAL:

During the Financial Year 2014-15, pursuant to the provisions of the Companies Act, 1956, Companies Act, 2013, based on the approval granted by the shareholders of the Company, The BSE and National Stock Exchange of India Limited (Stock Exchanges) and as per the relevant provisions of the Memorandum and Articles of Association of the Company, the Board of Directors at their meeting held on 30th August, 2014, approved, issued and allotted 9,50,000 equity shares of Rs. 10/- each at a premium of Rs. 140/- per share towards conversion of warrants issued and subscribed by the Promoters and Promoter Group of the Company. Consequently, the paid up capital of the Company was increased from 1,96,28,004 equity shares of Rs. 10/- each amounting to Rs. 19,62,80,040/- to 2,05,78,004 equity shares of Rs. 10/- each amounting to Rs. 20,57,80,040/-.

The Authorised Capital of the Company was increased from 2,50,00,000 equity shares of Rs. 10/- each amounting to Rs. 25 cr. to 3,50,00,000 equity shares of Rs. 10/- each amounting to Rs. 35 cr. pursuant to the approval of members granted by Postal Ballot vide results of the Postal Ballot declared on 24th December, 2014.

DIVIDEND:

Based on the Company's performance, the Directors are pleased to recommend for the approval of members a dividend of Rs. 1.50 per share (previous year Rs. 1.50 per share) on the capital of 2,05,78,004 Equity Shares of Rs. 10/- each. The dividend on equity shares as recommended above, if approved by the members would involve cash outflow of Rs. 361.13 lacs including dividend distribution tax of Rs. 52.46 lacs [Previous years Rs. 344.46 lacs including dividend distribution tax of Rs. 50.04 lacs].

TRANSFER TO RESERVES:

Your Company proposes to transfer Rs. 150 Lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 6,035.61 Lakhs is proposed to be retained in the Profit and Loss A/c.

UNPAID DIVIDEND:

As per the information obtained from Axis Bank Ltd and HDFC Bank Ltd., it has been noted that the following amounts are lying in Unpaid Dividend Account of Omkar Speciality Chemicals Limited:

Financial Year Amount (in Rupees)

2010- 2011 17,948.00

2011- 2012 14,206.25

2012- 2013 29,673.00

2013- 2014 14,533.50

Those Members, who have not yet encashed their Dividend Warrants for the financial year ended 31st March, 2011, 31st March, 2012, 31st March, 2013 and 31st March, 2014 may approach the M/s Bigshare Services Private Limited, Registrar and Share Transfer Agents of the Company / the Company for completion of necessary formalities to claim the dividend.

deposit from public:

Your Company did not invite or accept deposits from the public during the year under review.

FINANCIAL STATEMENTS:

The Financial Statements have been prepared as per the Schedule III of the Companies Act, 2013 as notified by the Ministry of Corporate Affairs. Accordingly, the previous year's figures have also been regrouped/ restated wherever necessary to conform to the classification of the current year.

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

The details pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 8, sub-rule (3) of Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo is provided in Annexure A and forms an integral part of the Directors' Report.

extract of annual return:

The details forming part of the extract of the Annual Return in Form MGT-9 as per Section 92 of Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, is included in this report as Annexure B and forms an integral part of the Directors' Report.

subsidiary companies:

A detailed discussion on the subsidiaries namely, Lasa Laboratory Private Limited, Urdhwa Chemicals Company Private Limited, Rishichem Research Limited and Desh Chemicals Private Limited, have been dealt in the Management Discussion and Analysis (MD & A) section of Annual Report.

The Consolidated Audited Annual Financial Statements are prepared as per Section 129(3) read with Schedule III of the Companies Act, 2013, Accounting Standards (AS-21) issued by the Institute of Chartered Accountants of India as notified by the Ministry of Corporate Affairs and Clause 32 of the Listing Agreement.

As per Section 129(3) of Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary companies in Form AOC 1, is provided in Annexure C and forms an integral part of the Directors' Report.

Based on the Consolidated Audited Annual Financial Results of the Company for the Financial Year ended on 31st March, 2015, M/s Lasa Laboratory Private Limited, wholly owned subsidiary of the Company has become the material non-listed Indian subsidiary company.

The Company has formulated the Policy for dealing with the Material Non-Listed Subsidiary Company and uploaded the same on the website of the Company (Weblink: http://www.omkarchemicals.com/Policies/RPT%20&%20Subsidiary%20Policy.pdf)

The Board of Directors in their meeting held on 2nd February, 2015, granted in-principle approval for the formation of an overseas wholly owned subsidiary company, with warehouse facility, for catering to the overseas market and embark upon the growing exports.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

During the current year, the Directors have constituted the CSR Committee and adopted the Corporate Social Responsibility Policy. The policy is displayed on Company's Web site (Weblink: http://www.omkarchemicals.com/Policies/CSR-Policy OSCL. pdf). The details on CSR have been briefly discussed in Annexure D and forms an integral part of the Directors' Report.

PARTICULARS OF EMPLOYEES:

The information required under Section 197(12) of Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming a part of the Director's Report for the year ended 31st March, 2015 is given in a separate Annexure E to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

As required by Clause 49 of the Listing Agreement with Stock Exchange(s), a Management Discussion & Analysis Report forms part of the Annual Report.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS:

A detailed discussion on Human Resource Management and Industrial Relations has been dealt in Management Discussion and Analysis (MD & A) report.

REPORT ON CORPORATE GOVERNANCE:

A detailed Report on Corporate Governance pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report. A Certificate from the Auditors of the Company, M/s J.PJ Associates, Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, also forms part of the Annual Report.

REGULATORY APPROVALS:

The relevant regulations and policies as prescribed by the Government of India and other regulatory bodies have been duly complied with by your Company.

Our manufacturing facilities are monitored and approved by various regulatory authorities. Periodically, the FDA, MPCB, Department of Explosives etc. conducts routine audits of all approved facilities.

DIRECTORS (APPOINTMENT & RESIGNATION MADE DURING THE YEAR):

Pursuant to the provisions of Section 149 of the Companies Act, 2013 which came into effect from 1st April, 2014, Mr. Amit A. Pandit (DIN 02437092), Prof. (Dr.) Suhas M. Rane (DIN 03126514), Dr. Vikas N. Telvekar (DIN 03123785) and Mr. Subhash P. Mali (DIN 00034769) were appointed as Independent Directors at the Annual General Meeting of the Company held on 9th August, 2014.

A) RE-APPOINTMENT

(1) In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mrs. Anjali P. Herlekar (DIN 00527420), Non-Executive, Promoter and Woman Director of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered herself for re-appointment. The Board recommends re-appointment of Mrs. Anjali P. Herlekar (DIN 00527420) as Non-Executive, Promoter and Woman Director of the Company in the ensuing Annual General Meeting of the Company.

(2) The Board of Directors at their meeting held on 2nd February, 2015 has re-appointed (Subject to the approval of Members in the general meeting), Mr. Pravin S. Herlekar (DIN 00525610) as a Chairman and Managing Director of the Company for a further period of five years commencing from 1st April, 2015 till 31st March, 2020 pursuant to the provisions of Section 196, 197 and such other provisions read with Schedule V of the Companies Act, 2013. The terms of his appointment are given in the explanatory statement to the Notice of Annual General Meeting. The Board recommends re-appointment of Mr. Pravin S. Herlekar (DIN 00525610) as Chairman and Managing Director of the Company, in the ensuing Annual General Meeting of the Company.

(3) The Board of Directors at their meeting held on 2nd February, 2015 has re-appointed (Subject to the approval of Members in the general meeting), Mr. Omkar P. Herlekar (DIN 01587154) as a Whole Time Director of the Company for a further period of five years commencing from 1st April, 2015 till 31st March, 2020 pursuant to the provisions of Section 196, 197 and such other provisions read with Schedule V of the Companies Act, 2013. The terms of his appointment are given in the explanatory statement to the Notice of Annual General Meeting. The Board recommends re-appointment of Mr. Omkar P. Herlekar (DIN 01587154) as Whole Time Director of the Company, in the ensuing Annual General Meeting of the Company.

B) RESIGNATIONS

During the year under review, the following Directors have resigned from the Board of M/s Omkar Speciality Chemicals Limited due to pre-occupation in their professional commitments:

(1) Mr. Amit A. Pandit (DIN 02437092) has resigned as Non-Executive and Independent Director and Chairman of the Audit Committee of the Company w.e.f 26th March, 2015. The Board places on record its gratitude for the services rendered by Mr. Amit A. Pandit (DIN 02437092) during his long association with the Company.

(2) Mr. Siddharth S. Sinkar (DIN 05154432) has resigned as Non-Executive and Non-Independent Director of the Company w.e.f. 26th March, 2015. The Board places on record its gratitude for the services rendered by Mr. Siddharth S. Sinkar (DIN 05154432) during his long association with the Company.

C) APPOINTMENTS

The Company has appointed the following new Directors on the Board of M/s Omkar Speciality Chemicals Limited:

(1) Mr. Laxmikant R. Kabra (DIN 0061346) was appointed as an Additional Director in the capacity of Non-Executive and Non-Independent Director of the Company w.e.f. 26th March, 2015, pursuant to Section 161(1) of Companies Act, 2013. The detailed profile of Mr. Laxmikant R. Kabra (DIN 0061346) is given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Laxmikant R. Kabra (DIN 0061346) as Non-Executive and Non-Independent Director of the Company, in the ensuing Annual General Meeting of the Company. He will be liable to retire by rotation.

(2) Mr. Sitendu K. Sharma (DIN 01956423) was appointed as an Additional Director in the capacity of Independent Director of the Company w.e.f. 8th May, 2015, pursuant to Section 149, 161(1) and other applicable provisions of Companies Act, 2013. The detailed profile of Mr. Sitendu K. Sharma (DIN 01956423) is given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Sitendu K. Sharma (DIN 01956423) as an Independent Director of the Company for the period of five years commencing from 8th May, 2015 till 7th May, 2020, in the ensuing Annual General Meeting of the Company.

(3) Mr. Vikas G. Gadre (DIN 06746818) was appointed as an Additional Director in the capacity of Independent Director of the Company w.e.f. 17th July, 2015, pursuant to Section 149, 161(1) and other applicable provisions of Companies Act, 2013. The detailed profile of Mr. Vikas G. Gadre (DIN 06746818) is given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Vikas G. Gadre (DIN 06746818) as an Independent Director of the Company for the period of five years commencing from 17th July, 2015 till 16th July, 2020, in the ensuing Annual General Meeting of the Company.

(4) Mr. Subhash N. Ghalke (DIN 07239171) was appointed as an Additional Director in the capacity of Independent Director of the Company w.e.f. 17th July, 2015, pursuant to Section 149, 161(1) and other applicable provisions of Companies Act, 2013. The detailed profile of Mr. Subhash N. Ghalke (DIN 07239171) is given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Subhash N. Ghalke (DIN 07239171)as an Independent Director of the Company for the period of five years commencing from 17th July, 2015 till 16th July, 2020, in the ensuing Annual General Meeting of the Company.

(5) Mrs. Sanjivani S. Patare (DIN 07239170) was appointed as an Additional Director in the capacity of Independent Director and Woman Director of the Company w.e.f. 17th July, 2015, pursuant to Section 149, 161(1) and other applicable provisions of Companies Act, 2013. The detailed profile of Mrs. Sanjivani S. Patare (DIN 07239170) is given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mrs. Sanjivani S. Patare (DIN 07239170) as an Independent Director and Woman Director of the Company for the period of five years commencing from 17th July, 2015 till 16th July, 2020, in the ensuing Annual General Meeting of the Company.

(6) Mr. Rishikesh P. Herlekar (DIN 05240009) was appointed as an Additional Director in the capacity of Executive Director of the Company w.e.f. 17th July, 2015, pursuant to Section 161(1), 196, 197 and such other provisions read with Schedule V of the Companies Act, 2013. The terms of his appointment and the detailed profile of Mr. Rishikesh P. Herlekar (DIN 05240009) are given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Rishikesh P. Herlekar (DIN 05240009) as an Executive Director of the Company for the period of five years commencing from 17th July, 2015 till 16th July, 2020, in the ensuing Annual General Meeting of the Company. He will be liable to retire by rotation.

(7) Mr. Prakash H. Rao (DIN 07239167) was appointed as an Additional Director in the capacity of Executive Director of the Company w.e.f. 17th July, 2015, pursuant to Section 161(1), 196, 197 and such other provisions read with Schedule V of the Companies Act, 2013. The terms of his appointment and the detailed profile of Mr. Prakash H. Rao (DIN 07239167) are given as a part of Notice of Annual General Meeting. The Board recommends appointment of Mr. Praksah H. Rao (DIN 07239167) as an Executive Director of the Company for the period of five years commencing from 17th July, 2015 till 16th July, 2020, in the ensuing Annual General Meeting of the Company. He will be liable to retire by rotation.

The information as prescribed under Clause 49 of the Listing Agreement entered with the Stock Exchange(s) such as brief description of the Directors proposed to be appointed/re-appointed, the nature of their expertise in specific functional areas and the names of the Companies in which they hold directorships and memberships/chairmanships of board committees are provided as a part of the Notice of the forthcoming Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company under Section 149 (7) of Companies Act, 2013 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.

MECHANISM FOR EVALUATING BOARD MEMBERS:

Pursuant to the provisions of Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee has been empowered for laying down the evaluation criteria for performance evaluation of the Independent Directors and the Board. The Nomination and Remuneration Committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole and for individual members. Board members are expected to possess the required qualifications, integrity, expertise and experience for the position. They should also possess deep expertise and insights in sectors / areas relevant to the Company, and ability to contribute to the Company's growth. The Board members are expected to rigorously prepare for, attend and participate in all Board and applicable committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with their responsibilities with the Company.

familiarisation programmes for board members:

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices. The Chairman and Managing Director had one to one discussions with newly appointed Directors to familiarize them with the Company's operations. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory and regulatory changes are circulated to the Directors. Site visits to various plant locations are organized for the Directors to enable them to understand the operations of the Company.

MEETINGS OF INDEPENDENT DIREcTORS:

The Company's Independent Directors shall meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to (i) review the performance of Non Independent Directors and the Board as a whole, (ii) review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and (iii) to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board.

One meeting of the Independent Directors was held during the Financial Year on 6th February, 2015.

BOARD MEETINGS HELD DURING THE YEAR:

Seven Board Meetings were held during the Financial Year 2014-15 and the gap between any two consecutive meetings did not exceed one hundred and twenty days at any point of time.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to the Director's Responsibilities Statement, the Directors state and hereby confirm that:

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

b) The Directors have elected 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 as at 31st March 2015 and of the profit of the Company for the year ended on that date;

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

d) The Directors have prepared the annual accounts on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

KEY MANAGERIAL PERSONNEL:

During the year under review, the Company has appointed/re-appointed the following persons as Key Managerial Personnel:

V Re-appointed Mr. Pravin S. Herlekar (DIN 00525610) as the Chairman and Managing Director of the Company for a further period of five years with effect from 1st April, 2015 on the terms and conditions and Remuneration as set out in the agreement between the Company and Chairman and Managing Director of the Company. Mr. Pravin S. Herlekar (DIN 00525610) is also designated as Key Managerial Personnel pursuant to provisions of Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. This appointment is subject to the approval of shareholders at the forthcoming Annual General Meeting.

V Re-appointed Mr. Omkar P. Herlekar (DIN 01587154) as the Whole-time Director of the Company for a period of five years with effect from 1st April, 2015 on the terms and conditions and Remuneration as set out in the agreement between the Company and Whole time Director of the Company. Mr. Omkar P. Herlekar (DIN 01587154) is also designated as Key Managerial Personnel pursuant to provisions of Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. This appointment is subject to the approval of shareholders at the forthcoming Annual General Meeting.

V Appointed Mr. Hiral Patel as the Chief Financial Officer of the Company for a period of one year with effect from 18th March, 2015 expiring on 17th March, 2016 on such terms and conditions decided by the Board of Directors of the Company. Mr. Hiral Patel is also designated as Key Managerial Personnel pursuant to provisions of Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

NOMINATION & REMUNERATION POLICY OF THE COMPANY:

During the current year, the Directors have reconstituted the Nomination & Remuneration Committee and adopted the Nomination & Remuneration Policy. The policy is displayed on Company's Web site (Weblink: http://www.omkarchemicals. com/Policies/Nomination-Remuneration-Policy.pdf).

The said policy has been briefly discussed in Annexure F and forms an integral part of the Directors' Report.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS U/S 186:

Loan given during the financial year 2014-15 (Rs. In Lacs)

Particulars Opemng Additions Repaid closing Balance Balance

Lasa Laboratory Private Limited 250.68 745.61 0.00 996.29

Urdhwa Chemicals Company Private Limited 3,720.05 1,088.89 488.00 4,320.94

Note: Loans were given to wholly owned subsidiaries for business purpose to meet working capital and capital expenditure requirements.

Corporate Guarantee provided during the financial year 2014-15

Name of the company for Name of the party in whose whom guarantee is given favour guarantee given

Lasa Laboratory Private Axis Bank Limited Limited

purpose of guarantee Amount for which guarantee is given

For securing the repayment of the credit facilities renewed Rs. 44.89 cr. and enhanced during the year

Securities granted during the financial year 2014-15

No security has been provided by the Company in respect of loan taken by any company or third party during the financial year 2014-15 Investments made during the financial year 2014-15

(Rs. In Lacs) Opening Acquisition Sale / Closing Sr. No. particulars Balance Redemption Balance

Acquired 1200000 equity 1 shares of Lasa Laboratory Private Limited at rate of Rs. 25/- 250.12 300.00 NIL 550.12 per share (Face value Rs. 10/- per share)

Internal financial controls:

The Company has laid down the internal financial control system for safeguarding the orderly and efficient conduct of business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Audit Committee reviews the Internal Audit function. The Audit Committee also reviews the internal audit reports as well as the findings of any internal investigation by internal auditors and suggests the methods to strengthen the internal control system. After reviewing the same, the Audit Committee reports the matters to the Board and the corrective actions to be taken thereon.

RISK Management pOLIcY:

The Company has laid down procedures to inform the members of the Board about the risk assessment and minimization procedures. These procedures have been periodically reviewed to ensure that the executive management controls the risk through properly defined framework. Pursuant to Clause 49 of the Listing Agreement, the Board in its meeting held on 18th May, 2015, constituted a Risk Management Committee of the Directors.

WHISTLE BLOWER POLICY:

Pursuant to the Section 177(9) and (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated Whistle Blower Policy for vigil mechanism for Directors and Employees to report the management about the unethical behavior, fraud, improper practice or violation of the Company's Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. It gives a platform to the whistle blower to report any unethical or improper practice (not necessarily violation of law) and to define processes for receiving and investigating complaints. The mechanism provides adequate safeguards against victimization of employees and directors who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Board has received Disclosures from the Directors relating to material, financial and commercial transactions where they and / or their relatives have personal interest. None of the transactions with any of the related parties were in conflict with the Company's interest. Company's major related party transactions are generally with its subsidiaries. All the transactions entered into with the related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on arm's length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year 2014-15. The details of transactions with related parties are given for information under notes to the accounts of the Balance Sheet as at 31st March, 2015.

significant and material orders passed by the regulators or courts or tribunals:

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The Company has not received any complaints during the year.

GRANT OF PATENTS TO THE COMPANY:

1. The Company's claim for process patent for an advance intermediate namely "5-IODO-2-METHYLBENZOIC ACID, having special applications in pharmaceutical industry has been accepted by the Patents Office, Govt of India, vide their Certificate No. 022/11015 Patent Registration No. 262739 dated 10th September, 2014.

2. The Company's claim for process patent for an advance intermediate namely "BENZENESELENINIC ANHYDRIDE, having special applications in pharmaceutical industry has been accepted by the Patents Office, Govt of India, vide their Certificate No. 022/11999, Patent Registration No. 263298 dated 17th October, 2014.

REGISTRATION OF THE TRADEMARK OF THE COMPANY:

The Trade Marks Registry, Government of India has granted its approval by registering the Company's logo containing the tagline "OMKAR - ALWAYS THE LEADERS" with effect from 21st June, 2010 (date of application), vide its certificate No. 1205744 dated 15th April, 2015 having validity upto 20th June, 2020.

COMMENCEMENT OF THE NEW MANUFACTURING FACILITY AT CHIPLUN:

During the financial year 2014-15, the Company has commissioned manufacturing at its new plant i.e. Unit No. VI located at Plot No. B-15 & B-16, Lote Parshuram MIDC, Chiplun, Dist: Ratnagiri, State: Maharashtra.

The plant with a volumetric capacity of 300 Metric Tonnes Per Annum (MTPA) manufactures a number of advance intermediates for pharma industry catering to essential life-saving drugs and veterinary APIs with the state of the art facility for production and quality control.

During the financial year 2014-15, Lasa Laboratory Pvt. Ltd., wholly owned subsidiary has completed phase I expansion of its manufacturing unit. The volumetric capacity of the said unit was increased from 120 MTPA to 450 MTPA.

AUDITORS AND AUDITOR'S REPORT:

STATUTORY Auditors

The comments of the Auditors in their report and the notes forming part of the Accounts are self-explanatory and need no comments.

In accordance with the provisions of Section 139(1) of Companies Act, 2013 and Rule 3, sub rule (7) of Companies (Audit and Auditors) Rules 2014, the shareholders at the last Annual General Meeting held on 9th August, 2014 had approved the appointment of M/s. J.PJ. Associates, Chartered Accountants, Mumbai (Firm Registration No. 113012W) as Statutory Auditors of the Company effective till the conclusion of the twelfth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. M/s. J.P.J. Associates, Chartered Accountants, Mumbai have expressed their willingness to continue as Statutory Auditors of the Company, subject to their ratification by the shareholders at the forthcoming Annual General Meeting. The Company has obtained written consent and certificate from the Auditors, that their appointment, on ratification of the shareholders would be in conformity with the conditions specified in Rule 4 of Companies (Audit and Auditors) Rules 2014.

COST AUDITORS

Pursuant to Section 148 (1) and (2) of the Companies Act, 2013 read with Companies (Cost Records and Audit ) Rules, 2014, the Company is required to get its cost records audited and should appoint a Cost Auditor pursuant to Section 148(3) of the Companies Act, 2013 read with Rule 14 of Companies (Audit & Auditors ) Rules, 2014.

The Board of Directors, on the recommendation of Audit Committee has appointed M/s N. Ritesh & Associates as the Cost Auditors of the Company to audit the Cost Accounts of the Company for the Financial Year 2015-16, on a remuneration of Rs.75,000/- p.a. plus service tax as applicable and reimbursement of out of pocket expenses. Pursuant to Section 148 of Companies Act, 2013 read with Rule 14 of Companies (Audit and Auditors) Rules, 2014 a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General meeting.

M/s N. Ritesh & Associates have confirmed their willingness and eligibility for appointment under Section 148 of the Companies Act, 2013 read with Rule 14 of Companies (Audit and Auditors) Rules, 2014.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of Companies Act, 2013 and the rules made thereunder, the Company has appointed M/s Nilesh A. Pradhan & Co., Practicing Company Secretary (C.P. No. 3659) to undertake the Secretarial Audit of the Company for the F.Y. 2015-2016.

The Secretarial Audit Report for the financial year ended 31st March 2015 is included as Annexure G and forms an integral part of this report.

With regard to the comment contained in the Secretarial Audit Report for the Financial Year 2014-15, pertaining to the requirement of appointment of Company Secretary in the wholly owned subsidiary company namely, Lasa Laboratory Private Limited, we wish to submit that, we are in the process of identifying an appropriate candidate for appointing as Company Secretary of M/s Lasa Laboratory Private Limited.

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation to Company's esteemed clients, vendors, investors, business associates and bankers for their continuous support to the Company.

The Directors also thank the Central & State Governments, Governments of various countries, Customs & Excise Departments, Ministry of Commerce, Ministry of Finance, Ministry of External Affairs, Ministry of Corporate Affairs, Maharashtra Industrial Development Corporation and other Government Agencies for their positive support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all the employees of OSCL Group through their commitment, competence, co-operation and diligence to duty in achieving consistent growth of the Company.

For and On behalf of the Board of Directors Omkar Speciality chemicals limited

Date: 09/08/2015 pravin S. Herlekar Omkar R Herlekar Place: Badlapur chairman & managing director Whole time director (Din 00525610) (Din 01587154)


Mar 31, 2014

TO THE MEMBERS OF OMKAR SPECIALITY CHEMICALS LIMITED

The Directors have pleasure in presenting their Ninth Annual Report and Audited Financial Statements for the financial year ended on 31st March, 2014.

FINANCIAL HIGHLIGHTS

The financial performance of the Company for the year ended 31st March, 2014 is summarized below:

(Rs. in Lakhs)

Year ended Year ended Particulars 31st March, 2014 31st March, 2013

INCOME

Revenue from Operation 20,962.11 20,153.12

Other Income 574.73 579.40

TOTAL REVENUE 21,536.84 20,732.52

EXPENDITURE

Cost of Material Consumed 9,354.11 11,935.71

Purchase of Stock in Trade 5,079.46 3,509.26

Changes in Inventories 283.38 (1,808.51)

Employee Benefits Expense 988.25 800.54

Finance Costs 1,174.63 743.16

Depreciation & Amortization Expense 610.16 568.43

Other Expenses 1,967.18 2,083.45

TOTAL EXPENDITURE 19,457.17 17,832.04

Profit before Exceptional Items & Extraordinary Items and Tax 2,079.67 2,900.48

Exceptional Items & Extraordinary Items 6.60 -

PROFIT BEFORE TAX 2,073.07 2,900.48

Tax Expenses 612.85 820.38

PROFIT AFTER TAX 1,460.22 2,080.10

Balance in Profit & Loss Account brought forward from previous year 3,737.52 2,149.60

Less: Appropriations

Proposed Dividend 294.42 294.42

Tax on Dividend 50.04 47.76

Transfer to General Reserve 100.00 150.00

Balance carried to Balance Sheet 4,753.28 3,737.52

PERFORMANCE REVIEW

During the financial year 2013-14, against the backdrop of a challenging environment, your Company reported a top-line growth of 4%, on standalone basis, over the previous year. At standalone level, the Gross Revenue from Operations stood at Rs. 20,962.11 Lakhs as compared with Rs. 20,153.12 Lakhs in the previous year. The Profit for the financial year under consideration stood at Rs. 1,460.23 Lakhs as compared with Rs. 2,080.10 Lakhs in the previous year.

The consolidated Gross Revenue from Operations for financial year 2013-14 stood at Rs. 24,027.98 Lakhs as compared with Rs. 21,169.24 Lakhs in the previous year, registering a growth of 13.5%. The consolidated Profit for the financial year 2013-14 stood at Rs. 1,356.06 Lakhs as compared with Rs. 2,055.55 Lakhs in the previous year.

DIVIDEND

Based on the Company''s performance, the Directors are pleased to recommend for the approval of members a final dividend of Rs. 1.50 per share (previous year Rs. 1.50 per share) on the capital of 1,96,28,004 Equity Shares of Rs. 10/- each. The final dividend on equity shares as recommended above, if approved by the members would involve cash outflow of Rs. 344.46 Lakhs including dividend tax of Rs. 50.04 Lakhs [Previous years Rs. 342.18 Lakhs including dividend tax of Rs. 47.76 Lakhs].

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 100 Lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 4,753.28 Lakhs is proposed to be retained in the Profit and Loss A/c.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS

A detailed discussion on Human Resource Management and Industrial Relations has been dealt in Management Discussion and Analysis (MD & A) report.

ACQUISITION OF RIGHTS IN THE LAND/ASSETS

During the financial year 2013-14, your Company has acquired the rights of following plots/assets:

1.Plot No. W-93(A) admeasuring about 720 sq.mtrs. situated at MIDC, Badlapur (E), Thane – 421503 (adjacent to Unit No. I of the Company), which earlier belonged to Desh Chemicals Pvt. Ltd., wholly owned subsidiary of the Company, for the operational benefits of the Company.

2.Plot No. B-15 and B-16, admeasuring about 1800 sq.mtrs. each, situated at Lote Parshuram Industrial Area, Village Awashi, Taluka Khed, District Ratnagiri. The project work at this Unit has been recently completed and we have started the trial runs therein. The regular commercial production will start very shortly.

3.Plot No. D-27/4, admeasuring about 15030 sq.mtrs. situated at Lote Parshuram Industrial Area, Taluka Khed, District Ratnagiri. This plot is an adjacent plot to the existing Unit No. V (Plot No. D-27/5) of the Company.

UNPAID DIVIDEND

As per the information obtained from Axis Bank Ltd., it has been noted that the following amounts are lying in Unpaid Dividend Account of Omkar Speciality Chemicals Limited:

Financial Year Amount (in Rupees)

2010-2011 14,206.25

2011-2012 17,948.00

2012-2013 29,710.50

Those Members who have not claimed their dividend are requested to contact M/s Bigshare Services Private Limited, Registrar and Share Transfer Agents of the Company / the Company for completion of necessary formalities to claim the dividend.

FINANCIAL STATEMENTS

The Financial Statements have been prepared as per the revised Schedule VI of the Companies Act, 1956 as notified by the Ministry of Corporate Affairs. Accordingly, the previous year''s figures have also been regrouped/ restated wherever necessary to conform to the classification of the current year.

SUBSIDIARY COMPANIES

During the financial year 2013-14, the Company has acquired interest in 6 (six) Equity Shares of Rishichem Research Limited, so as to make it 100 % subsidiary company.

During the financial year 2013-14, the Company has acquired from Desh Chemicals Private Limited, wholly owned subsidiary of the Company, the assets like Plot No. W-93(A), situated at MIDC, Badlapur (E), Thane 421503 along with the building constructed thereon and Plant & Machinery erected therein.

A detailed discussion on subsidiaries has been dealt in the Management Discussion and Analysis (MD & A) Report.

In terms of the General Circular of the Ministry of Corporate Affairs, Government of India has granted general exemption under Section 212(8) of the Companies Act, 1956. In view of this, copies of the Balance Sheet, Statement of Profit & Loss, Report of the Board of Directors and Auditors of its subsidiaries namely Rishichem Research Limited, Desh Chemicals Private Limited, Urdhwa Chemicals Company Private Limited and Lasa Laboratory Private Limited have not been attached with the Balance Sheet of the Company. These documents will be made available upon request by any member of the Company interested in obtaining the same at the Registered Office of the Company. However, as directed by the MCA in the aforesaid circulars, the financial information of the said subsidiaries has been disclosed in the Annual Report.

Further, pursuant to Clause 32 of the Listing Agreement with Stock Exchange(s) and Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include financial information of its aforesaid subsidiaries.

DEPOSIT FROM PUBLIC

Your Company did not invite or accept deposits from the public during the year under review.

REGULATORY APPROVALS

The relevant regulations and policies as prescribed by the Government of India and other regulatory bodies have been duly complied with by your Company.

Our manufacturing facilities are monitored and approved by various regulatory authorities. Periodically, the FDA, MPCB, Department of Explosives etc. conducts routine audits of all approved facilities.

DIRECTORS

In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr. Siddharth S. Sinkar, Director of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends re-appointment of Mr. Siddharth S. Sinkar in the ensuing Annual General Meeting of the Company.

Pursuant to the provisions of Section 149(1) of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement, the Company shall have Mandatorily atleast one woman director. In view of this, the Board at its meeting held on 20th June, 2014, appointed Mrs. Anjali P. Herlekar (Wife of Mr. Pravin S. Herlekar, Chairman and Managing Director & Promotor) as an Additional Director in the capacity of the Promoter Director and Woman Director of the Company. In terms of Section 161(1) of the Companies Act, 2013, Mrs. Herlekar holds office as an Additional Director upto the date of the ensuing Annual General Meeting but is eligible to be appointed as a Director. Approval of Members is being sought for her appointment as a Director at the ensuing Annual General Meeting.

The Company had, pursuant to the provisions of Clause 49 of the Listing Agreement entered into with Stock Exchange(s), appointed Mr. Amit A. Pandit, Prof. (Dr.) Suhas M. Rane, Mr. Subhash P. Mali and Dr. Vikas N. Telvekar as Independent Directors of the Company. These Directors were appointed as Directors to retire by rotation under the provisions of the erstwhile Companies Act, 1956.

As per Section 149(4) of the Companies Act, 2013 (Act), which came into effect from 1st April, 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Directors. Section 149(10) of Companies Act 2013 provides that Independent Directors shall hold office for a term of up to five consecutive years on the Board of the Company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Section 149(11) states that no Independent Director shall be eligible for more than two consecutive terms of five years. Pursuant to SEBI Circular No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014, a person who has already served as an Independent Director for five years or more in a Company as on 1st October, 2014 shall be eligible for appointment, on completion of his present term, for one more term of upto five years only. Section 149(13) states that the provisions of retirement by rotation as defined under sub-sections (6) and (7) of Section 152 of the Act shall not apply to such Independent Directors.

In accordance with the provisions of Section 149 of the Act, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company.

The information as prescribed under Clause 49 of the Listing Agreement entered with the Stock Exchange(s) such as brief description of the Directors proposed to be appointed/re-appointed, the nature of their expertise in specific functional areas and the names of the Companies in which they hold directorships and memberships/chairmanships of board committees are provided in annexure to the notice of the forthcoming Annual General Meeting.

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

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to the Director''s Responsibility Statement, the Directors state and hereby confirm that:

a) In the preparation of the annual accounts for the year ended 31st March, 2014, the applicable accounting standards have been followed and there are no material departures;

b)They have, in selection of the accounting policies, consulted the Statutory Auditors and have 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 as at 31st March, 2014 and of profit of the Company for the financial year ended 31st March, 2014;

c)They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records 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;

d) They have prepared the annual accounts on a going concern basis.

AUDITORS AND AUDITOR''S REPORT

The comments of the Auditors in their report and the notes forming part of the Accounts are self-explanatory and need no comments.

With regard to the comment contained in the Point (ix)(b) in the Annexure to Auditors'' Report, we wish to submit that, the Company has received the scrutiny notices from Income Tax Department for A.Y 2009-10, A.Y 2010-11 and A.Y 2011-12, where in the Income Tax Department, based on information received from VAT Department, raised queries on few purchase transactions and disallowed them in the scrutiny assessments. The Company strongly contends that disallowance of the said transactions has caused hardship on the Company. Therefore, the Company has filed an appeal with CIT(appeals) for all the three Assessment Years.

With regard to the comment contained in the Point (xvii) in the Annexure to Auditors'' Report, we wish to submit that, in absence of any arrangement of long term funds to finance immediate acquisition of assets of the existing factory including ready infrastructure at chiplun and other additions to the Fixed Assets, the available working capital funds got depleted, resulting in use of short term funds for long term purposes which is temporary in nature. Further, it is pertinent to take on the record that the Company has applied for and obtained the sanction of long term loan for deploying the same in the long term investments and taken appropriate steps to ensure that such transactions shall be avoided in future.

The Company''s Statutory Auditors M/s. J.P.J. Associates, Chartered Accountants, Mumbai (Firm Registration No. 113012W), retires as Statutory Auditors at the ensuing Annual General Meeting. In accordance with the provisions of Section 139(1) of Companies Act, 2013 and Rule 3, sub rule (7) of Companies (Audit and Auditors) Rules 2014, the Board has recommended the appointment of M/s. J.P.J. Associates, Chartered Accountants, Mumbai as Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the twelfth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. M/s. J.P.J. Associates, Chartered Accountants, Mumbai have expressed their willingness to continue, if so appointed for a further period of three years and as required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written consent and certificate from the Auditors, proposed to be re-appointed to the effect that their re-appointment if made, would be in conformity with the conditions specified in Rule 4 of Companies (Audit and Auditors) Rules 2014. A proposal seeking the re-appointment of Auditors and fixing their term is provided as a part of the Notice of the ensuing Annual General Meeting.

COST AUDITORS

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and the General Circular issued by Ministry of Corporate Affairs, the Board at its meeting held on 20th May, 2013 had appointed Mr. Vaibhav P. Joshi, Cost Accountants, Mumbai, as the Cost Auditors of the Company to carry out the audit of the Company''s Cost Accounting records for the financial year ending on 31st March, 2014.

Mr. Vaibhav P. Joshi has joined M/s VV & Associates, Cost Accountants as a Partner in April, 2014. He has informed the Board that, he will conduct the audit of the Cost Accounts of the Company for the financial year 2014-15 as a Partner of M/s VV & Associates, Cost Accountants.

Hence, in accordance with the provisions of Section 148 of Companies Act, 2013, the Board has appointed M/s VV & Associates, Cost Accountants, Mumbai, as the Cost Auditors of the Company to carry out the audit of the Company''s Cost Accounting records for the financial year 2014-2015 and has recommended a remuneration of Rs.2,00,000/- p.a. (Rupees Two Lakhs) which shall be ratified by the members in Annual General Meeting.

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

The information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo is provided in Annexure forming part of this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of the certain employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Members who are interested in obtaining such particulars may write to the Company Secretary at its Registered Office.

MANAGEMENT DISCUSSION AND ANALYSIS

As required by Clause 49 of the Listing Agreement with Stock Exchange(s), a Management Discussion & Analysis Report forms part of the Annual Report.

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report. A Certificate from the Auditors of the Company, M/s J.P.J Associates, Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, also forms part of the Annual Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation to Company''s esteemed clients, vendors, investors, business associates and bankers for their continuous support to the Company.

The Directors also thank the Central & State Governments, Governments of various countries, Customs & Excise Departments, Ministry of Commerce, Ministry of Finance, Ministry of External Affairs, Ministry of Corporate Affairs, Maharashtra Industrial Development Corporation and other Government Agencies for their positive support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all the employees of OSCL Group through their commitment, competence, co-operation and diligence to duty in achieving consistent growth of the Company.

Date: 20/06/2014 For and On behalf of the Board of Directors

Place: Mumbai Omkar Speciality Chemicals Limited

Pravin S. Herlekar Omkar P. Herlekar

Chairman & Managing Director Whole Time Director


Mar 31, 2013

To The Members of OMKAR SPECIALITY CHEMICALS LIMITED

The Directors have pleasure in presenting their Eighth Annual Report and Audited Financial Statements for the fnancial year ended 31st March, 2013.

fInanCIal HIGHlIGHts

The fnancial performance of the Company for the year ended 31st March, 2013 is summarized below:

(Rs in Lakhs)

Particulars year ended 31st march, 2013 year ended 31st march, 2012

InCome

Revenue from Operation 20,153.12 16,694.80

Other Income 579.40 369.86

total revenue 20,732.52 17,064.66

eXpendIture

Cost of Material Consumed 11,935.71 10,773.33

Purchase of Stock in Trade 3,509.26 1,817.96

Changes in Inventories (1,808.51) (1,157.10)

Employee Benefts Expense 800.54 638.34

Finance Costs 743.16 809.53

Depreciation & Amortization Expense 568.43 562.09

Other Expenses 2,083.45 1,302.93

total eXpendIture 17,832.04 14,747.08

profIt Before taX 2,900.48 2,317.58

Tax Expenses 820.38 672.91

profIt after taX 2,080.10 1,644.67

Balance in Proft & Loss Account brought forward from previous year. 2,149.60 940.08

less: appropriations

Proposed Dividend 294.42 245.35

Tax on Dividend 47.76 39.80

Transfer to General Reserve 150.00 150.00

Balance carried to Balance sheet 3,737.52 2,149.60

performanCe revIeW:

The Revenue from Operations for the fnancial year under review has gone up to Rs. 20,153.12 Lakhs as against Rs. 16,694.80 Lakhs in previous year, registering a growth of 21%. The Proft after tax has also gone up to Rs. 2,080.10 Lakhs in current year from Rs. 1,644.67 Lakhs in previous year, registering a growth of 26%.

dIvIdend

Based on the Company''s performance, the Directors are pleased to recommend for the approval of members a fnal dividend of Rs. 1.50 per share (Previous Year Rs. 1.25 per share) on the capital of 19628004 Equity Shares of Rs. 10/- each. The fnal dividend on equity shares as recommended above, if approved by the members would involve a cash out fow of Rs. 342.17 Lakhs including dividend tax of Rs. 47.76 Lakhs [Previous Year Rs. 285.15 Lakhs including dividend tax of Rs. 39.80 Lakhs].

transfer to reserves

Your Company proposes to transfer Rs. 150 Lakhs to General Reserve out of the amount available for appropriations and an amount of Rs. 3,737.52 Lakhs is proposed to be retained in the Statement of Proft and Loss.

Human resourCe manaGement and IndustrIal relatIons

A detailed discussion on Human Resource Management and Industrial Relations has been dealt in Management Discussion and Analysis (MD & A) report.

Ipo proCeeds utIlIZatIon

The objective of our IPO during January 2011 was to raise capital to increase our capacities at various locations. The management has obtained the approval from the members in the last Annual General Meeting for utilization of the IPO funds for the expansion activities in addition to the objects as proposed in earlier RHP. The utilization of IPO proceeds is within the framework of the objectives as listed in our RHP and the purposes other than those as stated in the notice convening the Seventh Annual General Meeting.

Issue of Warrants ConvertIBle Into eQuIty sHares to promoters & promoter Group

During the year under review, your Company has, in furtherance of approval received from the Bombay Stock Exchange Limited (BSE), the National Stock Exchange of India Limited (NSE) and Shareholders of the Company, issued and allotted 950,000 Warrants, on preferential basis, @ Rs. 150/- per warrant, convertible into 950,000 Equity Shares of Rs. 10/- each. The above warrants were issued to Promoter & Promoter Group on 6th March, 2013, in accordance with the SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

CallInG off tHe amalGamatIon of desH CHemICals prIvate lImIted WItH omkar speCIalIty CHemICals lImIted

Your Company had initiated the process of amalgamation of M/s Desh Chemicals Private Limited, Wholly Owned Subsidiary of the Company, with the Company on 5th April, 2012. However, due to too much delay in the said process and evolvement of multiple regulations, the Board of Directors have approved cancellation and calling off the process of amalgamation. Further, the Board of Directors have approved the acquisition of assets of M/s Desh Chemicals Private Limited comprising of land, building and machinery for the operational benefts of the Company.

unpaId dIvIdend

As per the information obtained from Axis Bank, it has been noted that the amount of Rs.17,948/- and Rs.14,742.50 is lying in Unpaid Dividend Account of Omkar Speciality Chemicals Limited in respect of the dividend declared by the Company for the fnancial year 2010-2011 and 2011-2012 respectively. Those Members who have not claimed their dividend are requested to contact Bigshare Services Private Limited, Registrar and Share Transfer Agents of the Company / to the Company for issuance of demand draft upon completion of necessary formalities in the said behalf in lieu of such dividend warrants.

fInanCIal statements

The Financial Statements have been prepared as per the revised schedule VI of the Companies Act, 1956 as notifed by the Ministry of Corporate Affairs. Accordingly, the previous year''s fgures have also been regrouped/ restated wherever necessary to conform to the classifcation of the current year.

suBsIdIary CompanIes

During the year under consideration, your Company has acquired M/s Lasa Laboratory Private Limited as a going on concern basis by acquiring all the equity shares thereof entitling all the liabilities and assets including plot of land situated at C-105, MIDC, Mahad, Village Khaire, Birwali, Raigad- 402309 with effect from 9th April 2012 and the said company was made a wholly owned subsidiary of M/s Omkar Speciality Chemicals Limited. M/s Lasa Laboratory Private Limited is engaged in the manufacturing of Anthelmintic APIs for veterinary applications. By acquiring M/s Lasa Laboratory Private Limited, the Company has gained a foothold in the API manufacturing space.

A detailed discussion on subsidiaries has been dealt in the Management Discussion and Analysis (MD & A) Report.

In terms of the General Circular of the Ministry of Corporate Affairs, Government of India has granted general exemption under Section 212(8) of the Companies Act, 1956. In view of this copies of the Balance Sheet, Statement of Proft & Loss, Report of the Board of

Directors and Auditors of its subsidiaries namely Rishichem Research Limited, Desh Chemicals Private Limited, Urdhwa Chemicals Company Private Limited and Lasa Laboratory Private Limited have not been attached with the Balance Sheet of the Company. These documents will be made available upon request by any member of the Company interested in obtaining the same at the Registered Offce of the Company. However, as directed by the MCA in the aforesaid circulars, the fnancial information of the said subsidiaries has been disclosed in the Annual Report.

Further, pursuant to Clause 32 of the Listing Agreement with Stock Exchange(s) and Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include fnancial information of its aforesaid subsidiaries.

deposIt from puBlIC

Your Company did not invite or accept deposits from the public during the year under review.

reGulatory approvals

The relevant regulations and policies as prescribed by the Government of India and other regulatory bodies have been duly complied with by your Company.

Our manufacturing facilities are monitored and approved by various regulatory authorities. Periodically, the FDA, MPCB, Department of Explosives etc. conducts routine audits of all approved facilities.

dIreCtors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Amit A. Pandit and Prof. (Dr.) Suhas M. Rane retires by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment.

The Board recommends re-appointment of both the Directors in the ensuing Annual General Meeting of the company.

dIreCtors'' responsIBIlIty statement:

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to the Director''s Responsibilities Statement, the Directors state and hereby confrm that:

a) In the preparation of the annual accounts for the year ended 31st March 2013, the applicable accounting standards have been followed and there are no material departures;

b) They have, in selection of the accounting policies, consulted the Statutory Auditors and have 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 as at 31st March, 2013 and of proft of the Company for the fnancial year ended 31st March, 2013;

c) They have taken proper and suffcient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records 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;

d) They have prepared the annual accounts on a going concern basis.

audItors and audItor''s report

The comments of the Auditors in their report and the notes forming part of the Accounts are self-explanatory and need no comments.

The Company''s Statutory Auditors M/s. J.P.J. Associates, Chartered Accountants, Mumbai retires as Statutory Auditors at the ensuing Annual General Meeting and have expressed their willingness to continue, if so appointed. As required under the provisions of Section 224(1B) of the Companies Act, 1956 the Company has obtained written confrmation from the Auditors, proposed to be re-appointed to the effect that their re-appointment if made, would be in conformity with the limits specifed in the said section. A proposal seeking their re-appointment is provided as a part of the Notice of the ensuing Annual General Meeting.

Cost audItors

Pursuant to the provisions of section 233B of the Companies Act, 1956 and the notifcation issued by Ministry of Corporate Affairs, the Board at its meeting held on 26th June 2012 has considered the proposal to appoint Mr. Vaibhav P. Joshi (Membership No. M-15797), Practicing Cost Accountant, to conduct the cost audit of the Company for the fnancial year ended 31st March 2013. The Cost Compliance Report for the year ended 31st March 2012 was fled with the Central Government on 03rd January 2013.

ConservatIon of enerGy, teCHnoloGy aBsorptIon and foreIGn eXCHanGe earnInGs and outGo

The information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo is provided in Annexure forming part of this report.

partICulars of employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of certain employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Members who are interested in obtaining such particulars may write to the Company Secretary at its Registered Offce.

manaGement dIsCussIon and analysIs

As required by Clause 49 of the Listing Agreement with Stock Exchange(s), a Management Discussion & Analysis Report forms part of the Annual Report.

report on Corporate GovernanCe

A detailed Report on Corporate Governance pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report. A Certifcate from the Auditors of the Company, M/s J.P.J Associates, Chartered Accountants, confrming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, also forms part of the Annual Report.

aCknoWledGements

Your Directors place on record their appreciation to Company''s esteemed clients, vendors, investors, business associates and bankers for their continuous support to the Company.

The Directors also thank the Central & State Governments, Government of various countries, Customs & Excise Departments, Ministry of Commerce, Ministry of Finance, Ministry of External Affairs, Ministry of Corporate Affairs, Maharashtra Industrial Development Corporation and Government Agencies for their positive support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all the employees of OSCL Group through their commitment, competence, co-operation and diligence to duty in achieving consistent growth of the Company.

For and on behalf of the Board of directors

omkar speciality Chemicals limited

Place: Mumbai

Date: 20th May, 2013 pravin s. Herlekar omkar p. Herlekar

Chairman & managing director Whole time director


Mar 31, 2012

To the members of Omkar Speciality Chemicals Limited

The directors have pleasure in presenting their seventh Annual Report on the business and operations of the company and financial accounts for the year ended March 31, 2012.

FINANCIAL HIGHLIGHTS

Particulars For the year ended For the year ended March 31, 2012 March 31, 2011 Rs. in lakh Rs. in lakh

INCOME

Revenue from operation 16,694.80 10,676.00

Other income 369.86 53.46

Total Revenue 17,064.66 10,729.46

EXPENDITURE

Cost of material consumed 10,773.33 7,168.90

Purchase of stock in trade 1,817.96 988.73

Changes in the inventory (1,157.10) (698.27)

Employee benefits expense 638.34 320.71

Finance costs 809.53 527.62

Depreciation and amortization expense 562.09 190.86

Other expenses 1,302.93 759.35

Total Expenditure 14,747.08 9,258.40

Profit Before Tax. 2,317.58 1,471.06

Tax expenses 672.91 457.02

Profit After Tax 1,644.67 1,014.04

Balance in profit & loss account brought forward from 940.08 304.92 previous year.

Less:

Appropriations:

Proposed dividend (245.35) (196.28)

Tax on dividend (39.80) (32.60)

Transfer to general reserve (150.00) (150.00)

Balance carried to balance sheet 2,149.60 940.08

Year in retrospect

The revenue from operation increased to Rs.16,694.80 lakh during the year, as compared to Rs 10,676.00 lakh in previous year, recording a growth of 56.37%. The Profit After Tax (PAT) increased to Rs. 1,644.67 lakh from Rs. 1,014.04 lakh during the previous financial year, registering a growth of 62,18 %.

DIVIDEND

The directors recommends the payment of final dividend of Rs-1.25 per equity share of Rs.l0 each (previous year Rs.1 per equity share of Rs.l0 each). If the final dividend as recommended above, is approved by the members at the Annual General Meeting, the total outflow towards dividend on equity shares for the year works out to Rs.285.15 lakh including dividend tax of Rs.39.80 lakh (previous years Rs.228.88 lakh including dividend tax of Rs. 32.60 lakh).

HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONS

A detailed discussion on Human Resource Management & Industrial Relations have been dealt in the management discussion and analysis (MD&A) report.

IPO PROCEEDS UTILIZATION

The objective of our IPO during January 2011 was to raise capital to increase our capacities at various locations. The utilization of IPO proceeds is within the framework of the objectives as listed in our RHP.

ACQUISITION OF LAND /ASSETS

During the year, the company acquired Lease hold land at Plot No. W-94 and Plot No. W-95, MIDC Badlapur. admeasuring 720 sq mtrs each. The plots are located adjacent to our subsidiary company, Desh Chemicals Private Limited. Further, the company also acquired lease hold land at Plot No. F-9. MIDC, Badlapur, ad measuring 2.519 sq mtrs. The plot is also located adjacent to Unit No. IV i.e Plot F-10. MIDC, Badlapur Another Lease hold plot was acquired at D 27/5. Lote Parshuram MIDC. Chiplun with an area ad measuring 40,773 sq mtrs. Additionally, the company also acquired residential premises at Badlapur and Chiplun. The residential premises are mainly used for housing of employees as well as visitors.

SUBSIDIARIES

A detailed discussion on subsidiaries has been dealt in the management discussion and analysis (MD&A) report,

FINANCIAL STATEMENTS

The financial statement was prepared as per the revised schedule VI of the Companies Act. 1956 as notified by the Ministry of Corporate Affairs. Accordingly, the previous year's figures were also regrouped/restated wherever necessary to conform to the classification of the current year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Company Affairs granted a general exemption to companies, by General Circular No, 2/2011 dated February 8, 2011. under section 212 (8) of Companies Act, 1956. from attaching individual accounts of subsidiaries with annual reports, Accordingly, board of directors of the company, by resolution, gave their consent for not attaching the balance sheet, profit & loss account and other documents of its subsidiaries in the annual report of the company for the financial year ended March 31, 2012. However, the consolidated financial statements of the subsidiaries prepared in accordance with accounting standard 21 issued by Institute of Chartered Accountants of India, form part of the Annual Report, and are reflected in the consolidated accounts of the company. The statement pursuant to section 212 of the Companies Act. 1956 containing details of the subsidiaries of the company forms part of annual report

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors, based on the representations received from the operating management, confirm that:

(I) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

(II) They have, in the selection of the accounting policies, consulted the statutory auditors and have applied them consistently, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period,

(III) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records 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) They have prepared the annual accounts on a going concern basis.

AUDITOR'S REPORT

The Auditor's report to the shareholders does not contain any qualification.

UNPAID DIVIDEND

As per the information obtained from Axis Bank, it has been noted that the amount of Rs. 0.19 lakh is lying with Omkar Speciality Chemicals Limited in respect of the dividend declared by the company for the financial year ended 2010-2011. Those members who have not claimed their dividend are requested to contact the company's Registrar & Share Transfer Agent to revalidate the dividend warrant.

TRANSFER TO RESERVES

The company proposes to transfer Rs. 150 lakh to the general reserve cut of the amount available for appropriations and an amount of Rs. 2149.60 lakh is proposed to be retained in the profit & loss account,

DEPOSIT FROM PUBLIC

The company has not accepted any fixed deposits during the year ended March 31, 2012.

CONSOLIDATED FINANCIAL STATEMENTS

Your directors have the pleasure in attaching the consolidated financial statements pursuant to clause 32 of the listing agreement entered into with the stock exchanges prescribed by The Institute of Chartered Accountants of India (ICAI). in this regard, The Auditor's report to the shareholders does not contain any qualification.

AUDITORS OF THE COMPANY

The company's previous auditors, M/s. Siddharth Sinkar & Associates had shown their unwillingness to continue as statutory auditors for the financial year 2011-2012. M/s. J.P.J Associates, Mumbai were appointed as statutory auditors at the previous Annual General Meeting held on September 24,2011.

The company received certificate from M/s. J.P.J. Associates to the effect that their appointment, if made, would be within the prescribed limits under section 224(1) of the Companies Act, 1956. You are requested to re-appoint auditors to hold such office from the conclusion of this Annual General Meeting till the conclusion of next Annual General meeting and to fix their remuneration.

COST AUDITORS

Pursuant to the directive of the Central Government under the provisions of section 233B of the Companies Act, 1956, the board at its meeting held on June 24, 2012 has considered the proposal to appoint M/s. Vaibhav P. Joshi, (Membership No: M-15797) Cost Accountant to conduct cost audit subject to approval of the Central Government.

PARTICULARS OF EMPLOYEES

The statement as required under section 217(2A) of Companies Act, 1956, containing the particulars as prescribed under the Companies (Particulars of Employees) Rules, 1975 is provided in the Annexure-3 forming the part of this report.

REGULATORY APPROVALS

The relevant regulations and policies as prescribed by the Government of India and other regulatory bodies have been duly complied with by your company. Our manufacturing facilities are monitored and approved by various regulatory authorities. Periodically, the FDA, MPCB and various other statutory departments under Central & State Government conduct routine audits of all approved facilities.

DIRECTORS

Pursuant to the provision of section 260 of the Companies Act 1956 and Article 120 of Article of Association of the company. the board at its meeting held on April 5, 2012 appointed Mr. Siddharth S. Sinkar as the Additional Director (Non Executive and Non Independent) on April 5. 2012. As per the provisions of the above said section of the Act, he holds office upto the date of this Annual General Meeting and is eligible forgetting appointed as a Director (Non Executive and Non Independent) of the board of the company. The company received a notice from two members, along with the requisite deposit under section 257 of the Companies Act 1956 proposing his candidature for appointment as the Director (Non Executive and Non Independent) of the company. The information as prescribed under clause 49 of the listing agreement entered with the stock exchanges such as brief description of the directors proposed to be appointed/reappointed. the nature of their expertise in specific functional areas and the names of companies in which they hold directorships and memberships/chairmanships of board committees, are provided in annexure to the notice of the forthcoming Annual General Meeting. The remuneration committee and the board at its meeting held on June 26, 2012 recommended the revision in the remuneration of Mr. Pravin S. Herlekar, Chairman & Managing Director and Mr. Omkar P. Herlekar, Whole Time Director for the remainder of their term upto March 31, 2015, and the same is mentioned in detail in the explanatory statement to item Mo. 8 & 9 of the notice of the Annual General Meeting.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with the stock exchanges, the following forms part of this annual report:

(I) Report on corporate governance

(II) Chairman & Managing Director's declaration regarding compliance of code of conduct by board members and senior management personnel

(III) Auditor's certificate regarding compliance of conditions of corporate governance.

(IV) Management discussion and analysis.

DEPOSITORY SYSTEM

As the members are aware the company's shares are compulsory tradable in electronic form. As on March 31, 2012, almost 100% of the company's total paid up capital representing 19,62,9004 equity shares were in dematerialized form. In view of the numerous advantages offered by the depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the depositories,

ACKNOWLEDGEMENTS

Your directors take this opportunity to thank the company's customers, members, vendors and bankers for their continued support during the year. Your directors also wish to thank the Government of India and its various agencies, Customs and Excise department. Ministry of Commerce. Ministry of Finance. Ministry of External Affairs. Ministry of Corporate Affairs. Reserve Bank of India. State Government of Maharashtra and other local government bodies for their support and look forward to their continued support in the future. Your directors also place on record their appreciation for the excellent contribution made by employees of the company through their commitment, competence, cooperation and diligence with a view to achieving consistent growth for the company.

For and on behalf of Board of Directors of Omkar Speciality Chemicals Limited

Pravin S. Herlekar Chairman & Managing Director

Date: June 24, 2012 Place: Badlapur, Thane District


Mar 31, 2011

The Members,

The Directors have pleasure in presenting the Sixth Annual Report before you, on the working of the Company, alongwith the audited accounts for the financial year ended 31st March 2011.

FINANCIAL HIGHLIGHTS

( Rs. In lakhs)

Particulars Year ended Year ended

31st March, 2011 31st March, 2010

Income 10773.92 6891.91

Profit Before Depreciation and Tax 1661.92 934.21

Less: Depreciation 190.86 185.34

Profit Before Tax (PBT) 1471.06 748.87

Less: Provision for Income Tax 457.02 230.50

Profit After Tax (PAT) 1014.04 518.37

Profit brought forward from previous year 304.92 904.46

Profit available for appropriation 1318.96 1422.83

Appropriations:

Transfer to General Reserve 150.00 150.00

Proposed Dividend 196.28 57.64

Corporate Tax on dividend 32.60 9.57

Profit carried to Balance Sheet 940.08 304.92

REVIEW OF OPERATIONS

i. Increase in Sales and Profit of the Company

Your Directors are pleased to inform you that there is a significant growth in the total income and profit after tax despite of global downturn and recessionary trend. Your Company has registered a growth of 56.33% in total income and 95.62% in profit after tax. The almost two fold growth in profit from operations was primarily on account of cost optimization, higher gross margin in product mix and efficient working capital management.

New markets were also explored for Company's existing products, thereby increasing exports revenues. The same has been indicated in the growth of total income. This can be seen from the tabular presentation as given below;

( Rs. in lakhs)

Particulars Year ended Growth

31/03/2011 31/03/2010

Domestic Sales (Net) 9527.81 6259.00 52.23%

Export Sales 1148.19 575.96 99.35%

ii. Manufacturing Facility

Your Company has a diverse product range comprising a mix of organic, inorganic and organo inorganic intermediates. The total product mix comprises of more than 105 products which contain wide range of inorganic intermediates like derivatives of molybdenum, selenium, iodine, cobalt, bismuth and tungsten; organic intermediates like resolving agents and hypervalent Iodine compounds. Our R&D team is continuously working on the improvement in processes of our existing products in order to smoothen the production process with optimum utilization of resources and cost saving. These provide us a competitive edge over others and help us to widen our customer base.

The variety of diverse product mix has enabled the Company to cater to the need of larger base of existing as well as prospective customers. Your Company has a diverse customer base from different industry segments like pharmaceutical, chemical, glass, cosmetics, ceramic pigments, poultry, veterinary feed etc. and export of our products to various countries in Europe, Asia, North America and Australia.

Your Company has always given paramount importance to explore new market opportunities. The philosophy of the Company is driven by market adoptive principles in order to support the ambitious growth plans the company has set for itself.

Your Company is currently expanding its capacity to 3,650 MTPA from 950 MTPA. The said expansion of capacity is expected to be completed by the end of Financial Year 2013. Currently we have three (3) manufacturing units in Badlapur MIDC, Thane and plan to set up fourth one in the same industrial area.

Unit Location Existing Proposed Type of facility Products Capacity additional manufactured (MTPA) Capacity (MTPA)

Unit I Plot no. W-92(A), 375 225 Manufacturing Unit Iodine, Selenium MIDC, Badlapur Compounds & Other Derivatives

Unit II Plot no. F-24, 375 525 Manufacturing Unit Iodine, Molybdenum MIDC, Badlapur Compounds & Other Derivatives Viz-Chiral Compounds

Unit III Plot no. B-34, 200 700 Registered Office,Selenium Sulphide MIDC, Badlapur Manufacturing Unit (U.S.P.) and Technology Centre

Unit IV Plot No. F-10/1, - 1250 Warehouse and Proposed Organic MIDC, Badlapur Manufacturing Unit Intermedi -ates.

Total 950 2700

After the proposed expansion of the manufacturing facility the total installed capacity of the company would aggregate to 3650 MT per annum.

DIVIDEND

Your Directors are pleased to recommend a dividend of 10% per equity share of Rs. 10 each for the financial year 2010-11. The Dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting. The total pay-out works out to Rs. 196.28 Lakhs towards dividend and Rs. 32.60 Lakhs towards corporate dividend distribution tax.

LISTING OF THE COMPANY

Your Company entered the Capital Market in the month of February, 2011 with an issue size of Rs. 81 Lakhs Equity Shares of Rs. 10 each issued at a price of Rs. 98 (including premium of Rs. 88) amounting to Rs. 7938 Lakhs.

The shares issued under Initial Public Offer (IPO) have been listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

DEPLOYMENT OF FUNDS

The prime intention behind raising funds from the public was for expansion of existing manufacturing facilities and fulfilment of Working Capital requirements.

The brief highlights of Company's achievements are as follows:

1) Your Company has received FDA License numbered KD - 725, dated 7th of May, 2011 for Unit No. Ill for manufacture of Selenium Sulphide (U.S.P.), which is the key ingredient for production of Anti-Dandruff shampoo.

The production of Anti-Dandruff agent for shampoo at this Unit is already started. This facility was financed out of IPO Proceeds as elaborated in Red Herring Prospectus (RHP) of IPO.

2) On 17th June, 2011, your Company acquired 100% shares and assets of Desh Chemicals Private Limited which owns a manufacturing Unit located at W-93(A), MIDC, Badlapur, adjacent to your Company's Unit No. I [W-92(A), MIDC, Badlapur]. Now we can act on our expansion and modernization plan for our production capacities at Unit No. I, as elaborated in Red Herring Prospectus (RHP) of Initial Public Offer (IPO). The combined areas of existing Unit I and the newly acquired Company will be operated as integral facility of Unit I.

3) Your Company has entered into a Memorandum of Understanding with M/s. Shree Sai Shakti Enterprises, a proprietary concern, located at F-9, MIDC, Badlapur for acquiring their assets.

These assets are adjacent to Company's existing Unit No. IV located at F-10/1, MIDC, Badlapur. By virtue of this acquisition, the Company can take benefit of the total plot area of 9654 sq. mtrs for execution of our major expansion project at Unit No. IV as elaborated in RHP of IPO.

4) Your Company has also taken effective steps for acquiring shares and assets of M/s. Urdhwa Chemicals Company Private Limited located at C-4, Lote Parshuram Industrial Area, Dist: Ratnagiri for our further expansion of manufacturing facility of value added speciality chemicals. This project will be funded out of Company's internal accruals, and suitable debt from financial institution.

SUB-DIVISION OF SHARES

Company's Shareholding base is of 1,96,28,004 Equity shares of Rs. 10 each as on 31st March, 2011. The Company, vide Special Resolution passed at the Extra Ordinary General Meeting held on 19th May, 2010 subdivided the nominal value per share from Rs. 100 each to Rs. 10 each.

Post Issue the Paid Up Capital of the Company is Rs. 19,62,80,040.

SUBSIDIARY COMPANY

The Consolidated Financial Statements presented by the Company include financial information of its subsidiary prepared in compliance with the applicable Accounting Standards. The Ministry of Corporate Affairs, Government of India vide its circular No 5/12/2007-CL-III dated 8th February, 2011 has granted general exemption under section 212 (8) of the Companies Act, 1956 from attaching the Balance Sheet, Profit And Loss Account and other documents of the Subsidiary Company to the Balance Sheet of the Company, provided certain conditions are fulfilled. In terms of the aforesaid approval, the Annual Accounts of the Subsidiary Company and the related detailed information will be made available upon request. This document is available for inspection by any member at the Registered Office of the Company.

In May 2010, Company has purchased 98.81% of Equity Shares of M/s. Rishichem Research Limited and thereby it became our Subsidiary.

REGULATORY APPROVALS

Our manufacturing facilities are monitored and approved by various Regulatory Authorities periodically. FDA, MPCB, Department of Explosives, etc. conduct routine audits of all approved facilities.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 1.5 Crore to General Reserve out of the amount available for appropriations and an amount of Rs. 13.18 Crore is proposed to be retained in the Profit and Loss Account.

CHANGE OF AUDITORS

M/s Siddharth Sinkar & Associates, Chartered Accountants, Mumbai, have expressed their desire to be relieved from the duties as a Statutory Auditor due to pre-occupation and they retire at the conclusion of the Annual General Meeting subject to the approval of the members at the Annual General Meeting. The Board has recommended the appointment of M/s. J.PJ. Associates of Mumbai, Chartered Accountants as Statutory Auditors at the forthcoming Annual General Meeting subject to the approval of the members in the place of M/s Siddharth Sinkar & Associates, retiring Auditors of the Company.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits from public during the year ended 31st March, 2011.

DIRECTORS

During the Financial Year the Directors of the Company, Mr. Shivdas R. Herlekar and Mrs. Anjali P. Herlekar resigned from Directorship on 29th March, 2011. The Board places on record its appreciation of the valuable services rendered by them during their tenure as Directors and for their contributions to the deliberations of the Board.

Mr. Amit A. Pandit and Prof. Suhas M. Rane retire by rotation and are eligible for re-appointment.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE MANAGEMENT

The Board wishes to place on record their appreciation of the support and contribution of all employees towards the growth of the company. The Company continues to enjoy cordial and harmonious relations with its employees at all levels.

The Company's HR policies and processes are aligned to effectively drive its expanding business and emerging opportunities. This has been achieved by continuously investing in learning and conducting training and development programs, creating a congenial work environment and motivating employees at all levels.

ENVIRONMENT

All the existing units of the Company treat the liquid effluent as per the standard norms set by the consent to operate given by State Pollution Control Board. The neutralized effluent is aerated by compressed air so as to maintain the BOD / COD at desired level. Our aim in future is to achieve zero pollution loads, total recycling of treated water and maximum recovery from waste. We are aiming to set the Pollution Free and Environmental Friendly Production Processes. Our R&D team is consistently working on these issues and the results are encouraging.

EMPLOYEE PARTICULARS AS PER SECTION 217 (2A)

The statement as required under Section 217 (2A) of Companies Act, 1956, containing the particulars as prescribed under the Companies (Particulars of Employees) Rules, 1975 is annexed as Annexure - I to this report.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo as required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - II annexed to this Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION ANALYSIS REPORT

Pursuant to clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report, Managing Director's and Auditor's Certificate regarding compliance of conditions of Corporate Governance are made a part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors' Responsibilities Statement, your Directors state and hereby confirm that:

a) Your Company has, in preparation of the Annual Accounts for the year ended 31st March, 2011, followed the applicable accounting standards alongwith proper disclosures and explanations relating to material departures, if any;

b) 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 your Company as at 31st March 2011 and of the profit of your Company for the Financial Year ended 31st March 2011;

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

d) The Directors have prepared the Annual Accounts for the Financial Year ended 31st March 2011 on a going concern basis.

APPRECIATION

The Board of Directors wish to place on record their appreciation for the support and co-operation extended by all the shareholders, employees, Auditors, Bankers, Staff Members of the Company and all others who have made valuable contributions to the growth of OSCL

For and on Behalf of Board of Directors

of Omkar Speciality Chemicals Limited

Dated: 5th August, 2011

Place : Badlapur Pravin S. Herlekar

Chairman and Managing Director





 
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