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Directors Report of Poddar Pigments Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Fourth Annual Report and the Audited Financial Statements for the year ended 31st March, 2015.

FINANCIAL RESULTS (Summary of key data) [Rs. In Lacs]

Particulars 2014-2015 2013-2014

Revenue Receipts 34580 34007

Other Income 294 174

Total Revenue Receipts including 34874 34181

other income

Operating Profit before Finance Cost, 2537 2388

Depreciation & Tax

Loss on sale of Investments - (97)

Less: Finance Cost 59 121

Depreciation 285 260

Profit before tax 2193 1910

Less: - Current Tax 550 525

-Deferred Tax 12 38

Profit after tax 1631 1347

Balance brought forward from previous year 583 576

Profit available for appropriations 2214 1923

APPROPRIATIONS

Adjusted for depreciation on assets where remaining life is Nil, recognized in retained earnings 32 -

Proposed Dividend on Equity Shares 265 239

Tax on Dividend 54 40

General Reserve 1486 1061

Balance Carried to Balance Sheet 377 583

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

The highlights of the Company's performance are as under:

- Revenue from operations increased by 1.68% to Rs. 34580 lacs as against Rs. 34007 lacs.

- Exports increased by 0.69% to Rs. 9717 lacs as against Rs. 9650 lacs.

- PBDIT increased by 10.74% to Rs. 2537 lacs as against Rs. 2291 lacs.

- Profit before Tax increased by 14.82% to Rs. 2193 lacs as against Rs. 1910 lacs.

- Earnings per share increased by 21.20% to Rs. 15.38 as against Rs 12.69.

- Cash Profit increased by Rs. 308 lacs to Rs. 2478 lacs as against Rs. 2170 lacs.

- Net Profit after tax increased by 21.08% to Rs.1631 lacs as against Rs. 1347 lacs.

REVIEW OF OPERATIONS

During the year under review, your Company performed well in all areas of its operations, with top line growth and consistent earnings, reflecting the effective corporate strategy of creating multiple drivers of growth. Your Company has maintained its leadership, due to continuous focus on Research, Development and Technology up-gradation of innovative products and is expected to further improve its performance in forthcoming years.

During the year, your Company has achieved a turnover of Rs. 34580 lacs as against Rs. 34007 lacs in the previous year, registering an increase of 1.68% over the previous year. The growth in sales volume, despite a subdued economical scenario, was made possible due to a focus on value added products and development of new products through R&D.

EXPORT

Your Company achieved a direct export turnover of Rs. 9717 lacs as against Rs. 9650 lacs in previous year, registering an increase of 0.69%. Despite stiff competition from other countries, international buyers show preference to your company's product mainly because of its quality. The international market is expected to grow further.

DIVIDEND

Based on the Company's performance, the Directors are pleased to recommend a dividend of Rs. 2.50 per share for the year 2014-15, subject to the members'approval. The dividend on the Equity Shares, if approved by the members, would involve a cash outflow of Rs. 319.25 lacs, including dividend distribution tax.

MARKETING

Through consistent efforts in maintaining and improving the international quality standards, your Company has created good demand for its products. This has helped in facing price competition in both domestic and international markets and also achieved increased volume. With sustained efforts, we expect further improvements in our performance in the current year. Your Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT

Your Company considers R&D as an essential tool to maintain it's technical advantage over competitors and to develop innovative products. R & D is central to achieving excellence in product quality with improved processes and optimization of available resources.

It makes continuous efforts to adopt and implement new technologies and to improve the product-mix/process, so as to create higher value items at lower costs, to widen its range of new generation master batches and to facilitate the production of customized products. It strives to leverage modern advances in science and technology and blend the same with classical concepts of product development.

Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as a key source of sustainable competitive advantage. The in-house R&D division of your Company, located at its plant, is recognized by the

Department of Science and Industrial Research (DSIR), Government of India. Details appended in Annexure II to this Report.

QUALITY INITIATIVES

Your Company has established various quality initiatives to meet or exceed the expectations of its customers. It has invested in various pilot plants and state-of-the-art testing equipments in order to carry out all relevant tests for masterbatches, which support the smooth running of it's customers' production processes well.

Through close interaction with your Company's customers and independent laboratories; your company receives continuous feedback, which we take on board for the continued optimization of our products and processes.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports has enabled your Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014 and is currently in the process of obtaining the Star Export House Status under the new Foreign Trade Policy 2015-2019, being eligible for the same.

The Company's Credit Rating is A/Stable/A1, assigned by CRISIL for its working capital borrowings, which signifies a strong degree of safety with regard to timely payments.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles of Association of the Company, Ms. Mahima P. Agarwal retires by rotation at the ensuing Annual General and being eligible, has offered herself for re-appointment.

The Company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual performance evaluation of the Board, its committees and individual directors is made. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the directors being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Remuneration policy for selection and appointmentof Directors, Senior Management and their remuneration. The said policies are displayed on our company's website. The details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure VI to this Report.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, six Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the 'period prescribed under the Companies Act, 2013. For further details, please refer report on Corporate Governance of this Annual Report.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. It is committed to maintaining the highest standards of corporate governance and adhering to the corporate governance requirements set out by SEBI. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges), the Auditors' certificate on compliance by the Company and the Management Discussion & Analysis, have been included in the Annual Report as a part of this Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangement/ transactions entered by the company during the financial year with related parties were in the ordinary course of business and on at arm's length basis. During the year, the company had not entered into any contract/arrangement/transaction with related parties. Your Directors draw attention of the members to Note no 35 to the financial statement, which sets out the details of related party transactions.

COMPLIANCE WITH THE CODE OF CONDUCT

The Director and Senior Management Personnel have reaffirmed their compliance with the code of conduct.

DEPOSITS

The company has neither accepted any deposits during the year under review, nor does it have any deposits outstanding at the year-end.

EMPLOYEES

The information required under Section 197 (12) of the Companies Act, 2013 read with Rules 5 (2) & 5 (3) of the Company's (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in the Annexure V hereto forming part of the Report.

AUDITORS AND AUDITORS'REPORT Statutory Auditors

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. They have furnished a Certificate to the effect that the re-appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment. They have confirmed their eligibility and willingness to accept office, if re-appointed.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

CostAuditors

Complying with the provisions of Section 148 of the Companies Act, 2013 and the MCA General Circular No. 15/2011 dated April 11,2011, (as amended vide General Circular No. 36/2012 dated 6th November, 2012) subject to the approval of the Central Government, the Audit Committee has recommended and the Board of Directors had appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur being eligible and having sought appointment, as Cost Auditors of the Company to carry out the Cost Audit of all the products manufactured by the Company for the year ended March, 2015. Your Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

Secretarial Auditor

The Board has appointed Shri B.L.Patni, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed and marked asAnnexure IX to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company accords high priority to health, safety and environment, particularly in and around its facilities. Safety awareness is inculcated through regular safety awareness programs, basic fire safety training, mock drills etc. As a part of safety management system, a comprehensive safety manual has been developed for use by the operating and safety personnel. There haven't been any accidents reported during the year under review.

In addition, energy conservation is a key priority for your Company and it continuously strives to achieve this through process improvements and through the enhancement of equipment capabilities.

Particulars relating to Energy Conservation (Refer Annexure I), Technology Absorption (Refer Annexure III ) and Foreign Exchange Earnings and Outgo (Refer Annexure IV), as required under section 134 of the Companies Act, 2013, are enclosed as a part of this report. '

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at www.poddarpigments.com.

The Company has spent Rs. 16.91 Lacs. The balance could not be spent as we are still in the initial years of identifying the suitable beneficiaries.

The Company would also undertake other need-based initiatives in compliance with Schedule VII to the Act. The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 has been made and further details on CSR activities is annexed and marked as Annexure VII to this Report.

RISK MANAGEMENT

Your Directors have formulated and uploaded a Risk Management Policy on the company's website, identified the elements of risk and implementation thereof. This has also been covered in the Management Discussion and Analysis, forming part of this report. ,

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and in terms of the Listing Agreements, a Vigil Mechanism, which is a whistle blower policy for directors and employees to report genuine concerns has been established. The said policy has been uploaded on the website of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls. Scope of work of Internal Audit Department includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions are taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. Our company has well tested ERP system with requisite internal control to ensure financial safety as well as timely preparation of reliable financial statements.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

During the year, the company has given inter-corporate deposit for short period and the same has been squared off within the same year. The details of the investments made by company are given in the note no. 11 & 14 to the financial statements.

EXTRACT OF THE ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 isannexedasa part of this Annual Report asAnnexure VIII.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm:

(a) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) that the directors have selected such accounting policies and applied them consistently and have 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 of 31 st March, 2015 and of the profit of the Company for the period ended on that date;

(c) that the directors have taken proper and sufficient care to ensure 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) That the directors have prepared the Annual Accounts on a 'going concern' basis;

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

(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds that were required to be transferred to the Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of lastAGM (i.e.23rd August, 2014), on the website of the company - www.poddarpigments.com and also on website of the Ministry of Corporate Affairs.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. The Company has not accepted any deposits from public.

2. No issue of equity shares with differential rights as to dividend, voting or otherwise.

3. There is no employees' Stock options Scheme (ESOS).

4. The Company does not have any Holding or Subsidiary or Associate company. ,

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

6. The Company has not issued any sweat equity shares.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No material changes and commitments have occurred, after the close of the year till the date of this report, which affect the financial position of the Company.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Suppliers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realizing and achieving the objectives of the Company. The enthusiasm of the executives, staff and workers has enabled the company to remain consistently on growth path.

For and on behalf of the Board of Directors

PLACE: JAIPUR R. K. Sureka S. S. Poddar

DATE : 03.08.2015 DIRECTOR & CEO MANAGING DIRECTOR & CFO




Mar 31, 2014

Dear Members,

The Directors are pleased to present the Twenty Third Annual Report and the Audited Financial Statements for the year ended 31st March, 2014.

FINANCIAL RESULTS (Summary of key data) [Rs.In Lacs]

Particulars 2013-2014 2012-2013

Revenue Receipts 34007 30043 Other Income 174 193 Total Revenue Receipts including 34181 30236 other income Operating Profit before Finance Cost, 2388 2194 Depreciation & Tax Loss on sale of Investments (97) (7) Less: Finance Cost 121 169 Depreciation 260 265 Profit before tax 1910 1753 Less: - Current Tax 525 471 - Tax in respect of earlier years - (1) - Deferred Tax 38 4 Profit after tax 1347 1279 Balance brought forward from previous year 576 500 Profit available for appropriations 1923 1779 APPROPRIATION Proposed Dividend on Equity Shares 239 212 Tax on Dividend 40 36 General Reserve 1061 955 Balance Carried to Balance Sheet 583 576

REVIEW OF OPERATIONS

During the year under review, your Company performed well in all areas of its operations, with impressive top line growth and consistent earnings, reflecting the effective corporate strategy of creating multiple drivers of growth. Your Company has maintained its leadership, due to continuous thrust on Research, Development and Technology up-gradation innovative products and is expected to further improve its performance in forthcoming years.

Your Company has scaled new heights in overall performance and has set new benchmarks in terms of turnover (including export benefit). During the year, your Company has achieved a turnover of Rs. 34007 lacs as against Rs. 30043 lacs in the previous year, registering an increase of 13.19 % over the previous year. The growth in sales volume, despite a subdued economical scenario, was made possible due to a focus on value added products.

EXPORT

Your Company has also improved its performance in Exports and achieved a direct export turnover of Rs. 9650 lacs as against

Rs. 7580 lacs in previous year, registering an increase of 27.31%. Despite stiff competition from other countries, international buyers show preference to your company''s product due to its quality. The international market is expected to grow further.

DIVIDEND

Based on the Company''s performance, the Directors are pleased to recommend a dividend of Rs. 2.25 per share for the year 2013-14, subject to the members'' approval. The dividend on the Equity Shares, if approved by the members, would involve a cash outflow of Rs. 279.30 Lacs, including dividend distribution tax.

MARKETING

Through consistent efforts in maintaining and improving the international quality standards, your Company has noticed that there is good demand for its products. This has helped in facing price competition in both domestic and international markets and also achieved increased volume. With sustained efforts, we expect further improvements in our performance in the current year. Your Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT

Your company continues to benefit from the strong foundation and long tradition of Research and Development (R&D), which differentiate us from many others.

In an increasingly competitive business environment, your Company recognizes the importance of Research & Development (R&D) to maintain its leadership position. Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as a key source of sustainable competitive advantage.

The R & D division of your Company, located at its plant (recognized by the Department of Science and Industrial Research (DSIR), Government of India, as an In-House R&D Unit), constantly endeavors to innovate and change the product-mix/process, to create higher value items at lower costs and to widen its range of new generation masterbatches. Its R&D efforts aim at ensuring cost optimization and environment protection. It strives to leverage modern advances in science and technology and blend the same with classical concepts of product development.

The R&D division of your company is equipped with state-of-the- art equipments. These equipments are used to test dispersion, filterability, mechanical, rheological, thermal & colorist properties of products that are being developed for customer specific requirements. Tests are carried out conforming to internationally accepted test standards.

QUALITY INITIATIVES

Your Company has established various quality initiatives to meet or exceed the expectations of its customers. It has invested in various pilot plants and state-of-the-art testing equipment in order to carry out all relevant tests for masterbatches, which support the smooth running of it''s customers'' production process well.

Close interaction with your Company''s customers and independent laboratories ensures continuous feedback, which we take on board for the continued optimisation of products and processes.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports has enabled your Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014.

The Company''s Credit Rating is A/Stable/A1, assigned by CRISIL for its working capital borrowings, which signifies a strong degree of safety with regards to timely payments.

DIRECTORS

Smt. Mahima P. Agarwal retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and the Companies Act, 2013 to the extent applicable and Articles of Association of the Company and, being eligible, offers herself for re-appointment.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges), the Auditors'' certificate on compliance by the Company and the Management Discussion & Analysis have been included in the Annual Report. A corporate governance compliance certificate obtained from the auditors of the company is part of the Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Director and Senior Management Personnel have reaffirmed their compliance with the code of conduct.

DEPOSITS

The company has neither accepted any deposits during the year under review nor does it have any fixed deposits outstanding at the year-end.

EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read along with Companies (Particulars of Employees) Rules, 1975, is given in the statement annexed hereto forming a part of the Report.

AUDITORS

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the re- appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013 and have confirmed their eligibility and willingness to accept office, if re-appointed.

COST AUDITORS

Complying with the provisions of Section 233B of the Companies Act, 1956 and the MCA General Circular No. 15/2011 dated April 11, 2011, (as amended vide General Circular No. 36/2012 dated 6th November, 2012) subject to the approval of the Central Government, the Audit Committee has recommended and the Board of Directors had appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur being eligible and having sought appointment, as Cost Auditors of the Company to carry out the Cost Audit of all the products manufactured by the Company for the year ended March, 2014.

ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company accords high priority to health, safety and environment. Your Company emphasizes maintaining a healthy and safe environment in and around its facilities. Safety awareness is inculcated through regular Safety awareness programs, basic fire safety training, mock drills etc. As a part of safety management system, a comprehensive Safety manual has been developed for use by operating and safety personnel. There haven''t been any incidence of accidents reported during the year under review.

Several initiatives, initiated earlier, were further continued as part of our energy saving measures. The drive for energy conservation is always a key priority and your Company continuously strives to achieve this through process improvements and through the enhancement of equipment capabilities.

Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under section 217(1)(e) of the Companies Act 1956, are enclosed as a part of this report.

GO GREEN INITIATIVE

The Ministry of Corporate Affairs has taken a ''Green Initiative in Corporate Governance'' by issuing circulars allowing paperless compliances by Companies through electronic mode. Further, in line with circular issued by the Securities and Exchange Board of India (SEBI) and consequent changes in the listing agreement, Companies can send their Annual Report in electronic mode to Members who have registered their e-mail addresses for this purpose. In the absence of any communication from the shareholders, the email id in the records of depositories shall be considered as the registered email id of the respective shareholder. Members holding shares in demat form are requested to register their e-mail address with their Depository Participants only. Members of the Company, who have registered their e-mail address, are entitled to receive such communication in physical form, upon request. All the shareholders who hold their shares in physical form and whose e-mail address are not available with the Company, may, if they wish to receive the Annual Report in electronic form, please send their email id to njain@poddarpigments.com.

The Company solicits active cooperation of shareholders in helping the Company to implement the e-governance initiatives of the Government.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm:

(a) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) that the directors have selected such accounting policies and applied them consistently and have 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 of 31st March, 2014 and of the profit of the Company for the period ended on that date;

(c) that the directors have taken proper and sufficient care to ensure 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) That the directors have prepared the Annual Accounts on a ''going concern'' basis.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realizing and achieving the objectives of the Company. The enthusiasm of the employees has enabled the company to remain at a constant growth path.

For and on behalf of the Board of Directors

PLACE : JAIPUR R. K. Sureka S. S. Poddar DATE : 15th May, 2014 DIRECTOR & CEO MANAGING DIRECTOR


Mar 31, 2013

Dear Members,

The Directors are pleased to present the Twenty Second Annual Report on the business and operations of the Company, together with the Audited Financial Statement for the year ended 31st March, 2013.

FINANCIAL RESULTS

[Rs. in Lacs] Particulars 2012-2013 2011-2012

Revenue Receipts 30043 23930

Other Income 193 113

Total Revenue Receipts including other income 30236 24043

Operating Profit before Finance

Cost, Depreciation & Tax 2194 2085

Loss on sale of Investments (7) (194)

Less: Finance Cost 169 179

Depreciation 265 270

Profit before tax 1753 1442

Less:-Current Tax 471 393

-Tax in respect of earlieryears (1)

- Deferred Tax 4 65

Profit after tax 1279 984

Balance brought forward from previous year 500 397

Profit available for appropriations 1779 1381

APPROPRIATIONS

Proposed Dividend on Equity Shares 212 212

Tax on Dividend 36 35

General Reserve 955 634

Balance Carried to Balance Sheet 576 500

OPERATIONS

The global economy in the Financial Year 2012-13 improved slowly, but was short of expectations. Several European economies experienced recession due to high unemployment, banking fragility, fiscal tightening and sluggish growth. Deceleration in industrial output and exports weakened India''s economic growth significantly.

The economic environment in 2012-13 has been tough and the growth in India moderated for one more year. There were various internal and external factors that played a role. The effect of the uncertainty and recessionary trends in the global economies was compounded by the complexity in the domestic environment.

During the year under review the Company performed well in all areas of its operations with impressive top line growth and consistent earnings, reflecting the effective corporate strategy of creating multiple drivers of growth. The Company has maintained its leadership, due to continuous thrust on Research,

Development and Technology up-gradation and is expected to further improve its performance in forthcoming years.

Your Company has scaled new heights in overall performance and has set new benchmarks in terms of turnover (including export benefit). During the year, the Company has achieved a turnover of Rs. 30043 lacs as against Rs. 23930 lacs in the previous year, registering an increase of 25.54% over the previous year. The growth in sales volume in spite of subdued economical scenario was made possible with more focus on value added products.

EXPORT

Your Company has also improved its performance in Exports and achieved direct export turnover of Rs. 7580 lacs as against Rs. 5580 lacs in previous year, registering an increase of 35.84%. Your Company Exports to more than 25 countries around the Globe.

DIVIDEND

Based on the Company''s performance, the Directors are pleased to recommend a dividend of Rs. 21- per share for the year 2012-13, subject to the members'' approval. The dividend on the Equity Shares, if approved by the members, would involve a cash outflow of Rs. 248.26 Lacs including dividend tax for the year 2012-13.

MARKETING

Through consistent efforts in maintaining and improving the international quality standards, your Company has found satisfactory demand for its products. This has helped in facing price competition in both domestic and international markets and also achieved increased sales. With sustained efforts, we expect further improvements in our performance in the current year. Your Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT

Your company continues to benefit from the strong foundation and long tradition of Research and Development (R&D) which differentiate us from many others.

In an increasingly competitive business environment, your Company recognizes the importance of Research & Development (R&D) to maintain its leadership position. Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as a key source of sustainable competitive advantage.

The R&D division of your Company, located at its plant (recognized by the Department of Science and Industrial Research (DSIR), Government of India, as an In-House R&D Unit), constantly endeavors to innovate and change the product- mix/process, to create higher value items at lower costs and to widen its range of new generation masterbatches. Its R&D efforts aim at ensuring cost optimization and environment protection. It strives to leverage modern advances in science and technology and blend the same with classical concepts of product development.

The R&D division of your company is equipped with state-of-the- art testing equipments. These equipments are used to test dispersion, filterability, mechanical, rheological, thermal, optical & colorist properties of incoming raw materials and outgoing finished products. Tests are carried out conforming to internationally accepted test methods.

QUALITY INITIATIVES

Your Company is committed to produce and deliver zero-defect Masterbatches. It also endeavors to achieve consistent customer satisfaction by implementing and meeting the ISO 9001:2008 QMS requirements. Constant Interaction with Customers, Optimum utilization of resources and Training & Education of Employees are carried out in order to ensure that your company attains its goals.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports has enabled the Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014.

The Company''s Credit Rating is A/Stable/A1 assigned by CRISIL for its working capital borrowings which signifies strong degree of safety regarding timely payment.

DIRECTORS

Smt. Mahima P. Agarwal, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company and, being eligible, offers herself for re-appointment.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges), the Auditors'' certificate on compliance by the Company and the Management Discussion & Analysis, have all been included in the Annual Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Director and Senior Management Personnel have reaffirmed their compliance with the code of conduct

DEPOSITS

The company has neither accepted any deposits during the year under review, nor does it have any fixed deposits outstanding at the year-end.

EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read along with Companies (Particulars of Employees) Rules, 1975, is given in the statement annexed hereto forming a part of the Report.

AUDITORS

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the re- appointment, if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956 and have confirmed their eligibility and willingness to accept office, if re- appointed.

COST AUDITORS

Complying with the provisions of Section 233B of the Companies Act, 1956 and the MCA General Circular No. 15/2011 dated April 11,2011, (as amended vide General Circular No. 36/2012 dated 6th November, 2012) subject to the approval of the Central Government, the Audit Committee has recommended and the Board of Directors had appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Registration No. 000024) being eligible and having sought appointment, as Cost Auditors of the Company to carry out the Cost Audit of all the products manufactured by the Company for the year ended March, 2013.

ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is continuously on the lookout for new ways to preserve the environment and to manage resources responsibly. Your company adopts clean technologies and processes that combine both economic progress and environment sustainability. The company has taken a number of green initiatives including waste optimization, water conservation and compliance with applicable laws and regulations.

Your Company has Safety Committee, which regularly monitor compliance with the Company''s Health & Safety policy. Additional steps have been taken to install equipments, such as additional fire extinguishers of different classes, fume extraction system, de-dusting stations etc. Your company attaches utmost importance to safety. The only acceptable standard of safety performance for your company is "zero accidents". Safety education and training is imparted to everyone on a regular basis.

Several initiatives were continued as part of energy saving measures. The drive for energy conservation is always a key priority and your Company continuously strives to achieve this through process improvements and through the enhancement of equipment capabilities.

Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under section 217(1 )(e) of the Companies Act 1956, are enclosed as a part of this report.

GO GREEN INITIATIVE

The Ministry of Corporate Affairs, Government of India, through its Circular nos. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011 respectively, has allowed companies to send the Annual Reports and other official documents to their shareholders electronically as part of its green initiatives, provided that the email addresses of the shareholders are obtained by the Company from the shareholders. This move by the Ministry will benefit the society at large through reduction in paper consumption and contribution towards a greener environment. It will also ensure prompt receipt of communication and avoid loss in postal transit.

Keeping the above in view, your Company proposes to send documents such as the Notice of the Annual General Meeting and Annual Reports henceforth to the shareholders by electronic means, to the e-mail address provided by them and/or made available to the Company by the Depositories. In absence of any communication from the shareholders, the email id in the records of depositories shall be considered as the registered email id of the respective shareholder.

All the shareholders who hold their shares in physical form and whose e-mail address are not available with the Company, may, if they wish to receive the Annual Report in electronic form, please send their email id to njain@poddarpigments.com.

The Company solicits active cooperation of shareholders in helping the Company implement the e-governance initiatives of the Government.

RISK AND INTERNAL ADEQUACY

Your Company has a low debt-equity ratio and is well placed to take care of its borrowings. Foreign Exchange transactions are largely covered to the extent of exposure otherwise not covered by natural hedging. Your Company is progressively moving towards a "net foreign-exchange earner" status.

The Company''s internal control systems are adequate considering the size of the Company and are routinely tested and certified by our statutory as well as internal auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm:

(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and have 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 of 31st March, 2013 and of the profit of the Company for the period ended on that date;

(iii) that the directors have taken proper and sufficient care to ensure 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) That the directors have prepared the Annual Accounts on a ''going concern'' basis.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realizing the objectives of the Company. The enthusiasm of the employees has enabled the company to remain at a constant growth path.

For and on behalf of the Board of Directors

PLACE: MUMBAI R. K. Sureka S. S. Poddar

DATE : 22nd MAY, 2013 DIRECTOR & CEO MANAGING DIRECTOR


Mar 31, 2012

The Directors are pleased to present the Twenty First Report on the business and operations of the Company, together with the Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS (Rs. in Lacs)

Particulars 2011-2012 2010-2011

Revenue Receipts 23931 20056

Other Income 113 251

Total Revenue Receipts

including other income 24044 20307

Operating Profit before Finance

Cost, Depreciation & Tax 2085 1811

Loss on sale of Investments (194) -

Less: Finance Cost 179 178

Depreciation 270 233

Profit before tax 1442 1400

Less: -CurrentTax 393 410

- Deferred Tax 65 34

Profit after tax 984 956

Balance brought forward

from previous year 397 1420

Profit available for appropriations 1381 2376

APPROPRIATIONS

Interim Dividend on Equity Shares - 159

Proposed Dividend on Equity Shares 212 80

Total Dividend on Equity Shares 212 239

Tax on Dividend 35 40

General Reserve 634 1700

Balance Carried to Balance Sheet 500 397

OPERATIONS

The global economy has witnessed lower economic growth, barely a year after recession. FY 2011-12 was a challenging year. Despite these constraints and the challenging environment, your company performed reasonably well.

Your Company has scaled new heights in overall performance and has set new benchmarks in terms of turnover (including export benefit). During the year, the Company has achieved a turnover of Rs. 23931 lacs as against Rs. 20056 lacs in the previous year, registering an increase of 19.32% over the previous year.

Your Company has also improved its performance in Exports and achieved direct export turnover of Rs. 5580 lacs as against Rs. 4939 lacs in previous year, registering an increase of 12.98%. Your Company Exports to over 20 countries around the globe.

Your Company posted yet another year of high performance, with impressive top line growth and consistent earnings, reflecting the effective corporate strategy of creating multiple drivers of growth.

DIVIDEND

Based on the Company's performance, the Directors are pleased to recommend for approval by the members, a dividend of Rs. 21- per share for the year 2011-12. The dividend on the Equity Shares, if approved by the members, would involve a cash outflow of Rs. 246.63 Lacs, including dividend tax for the year 2011-12.

MARKETING

Through consistent efforts in maintaining and improving the international quality standards, your Company has found satisfactory demand for its products. This has helped in facing price competition in both domestic and international markets and also achieved increased sales. With sustained efforts, we expect further improvements in our performance in the current year. Your Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT

In an increasingly competitive business environment, your Company recognizes the importance of Research & Development (R&D) to maintain its leadership position. Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as a key source of sustainable competitive advantage.

The R&D division of your Company, located at its plant, constantly endeavors to innovate and change the product mix/process, to create higher value items at lower costs and to widen its range of new generation masterbatches. Its R&D efforts aim at ensuring cost optimization and environment protection. It strives to leverage modern advances in science and technology and blend the same with classical concepts of product development.

The R&D division of your company is equipped with state-of- the-art testing equipments. These equipments are used to test dispersion, filterability, mechanical, Theological, thermal, optical & colorist properties of incoming raw materials and outgoing finished products. Tests are carried out conforming to internationally accepted test methods.

The R&D division of the Company has been recognized by the Department of Science and Industrial Research (DSIR), Government of India, as an In-House R&D Unit on 06.06.2012.

QUALITY INITIATIVES

Your Company is committed to produce and deliver zero-defect Masterbatches. It also endeavors to achieve consistent customer satisfaction by implementing and meeting the ISO 9001:2008 QMS requirements. Constant Interaction with Customers, Optimum utilization of resources and Training & Education of Employees are carried out in order to ensure that your company attains its goals.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports has enabled the Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014.

The Company's Credit Rating is A/Stable/A1 assigned by CRISIL for its working capital borrowings which signifies strong degree of safety regarding timely payment.

DIRECTORS

During the year Smt. Kusum Poddar resigned from Directorship w.e.f. 21.07.11 and Shri V.K. Fogla has vacated the office of director w.e.f. 27.08.11. The Board places on record its appreciation for their valuable contribution to the Company.

Further, Smt. Mahima R Agarwal and Shri Kishore Rungta have been appointed Additional Director of the Company w.e.f. 25.07.11 and confirmed Directors w.e.f. 27.08.11.

Shri M. K. Sonthalia, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges), the Auditors' certificate on compliance by the Company and the Management Discussion & Analysis, have all been included in the Annual Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Company had put in place a Code of Conduct for its Board Members and Senior Management Personnel from 23rd January 2006 and has reaffirmed the same on 7th February 2012. It is also available on the website of the Company. Declarations on compliance with the Code of Conduct have been received from all concerned. A certificate annexed to this effect forms a part of this Report.

DEPOSITS

The company has neither accepted any deposits during the year under review, nor does it have any fixed deposits outstanding at the year end.

EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read along with Companies (Particulars of Employees) Rules, 1975, is given in the statement annexed hereto forming a part of the Report.

AUDITORS

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is continuously on the look-out for new ways to preserve the environment and to manage resources responsibly. Your company adopts clean technologies and processes that combine both economic progress and environment sustainability. The company has taken a number of green initiatives including waste optimization, water conservation and compliance with applicable laws and regulations.

Your Company has Safety Committees, which regularly monitor compliance with the Company's Health & Safety policy. Additional steps have been taken to install equipments, such as additional fire extinguishers of different classes, fume extraction system, de-dusting stations etc. Your company attaches utmost importance to safety. The only acceptable standard of safety performance for your company is "zero accidents". Safety education and training is imparted to everyone on a regular basis.

Several initiatives were continued as part of energy saving measures. The drive for energy conservation is always a key priority and your Company continuously strives to achieve this through process improvements and through the enhancement of equipment capabilities.

Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under section 217(1)(e) of the Companies Act 1956, are enclosed as a part of this report.

GO GREEN INITIATIVE

Recently, the Ministry of Corporate Affairs, Government of India, through its Circular nos. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011 respectively, has allowed companies to send the Annual Reports and other official documents to their shareholders electronically as part of its green initiatives, provided that the email addresses of the shareholders are obtained by the Company from the shareholders. This move by the Ministry will benefit the society at large through reduction in paper consumption and contribution towards a greener environment. It will also ensure prompt receipt of communication and avoid loss in postal transit.

As a first step, your Company is Printing Annual Report using recycled paper. Keeping the above in view, your Company also proposes to send documents such as the Notice of the Annual General Meeting and Annual Reports henceforth to the shareholders by electronic means, to the e-mail address provided by them and/or made available to the Company by the Depositories. In absence of any communication from the shareholders, the email id in the records of depositories shall be considered as the registered email id of the respective shareholder.

All the shareholders who hold their shares in physical form and whose e-mail address are not available with the Company, may, if they wish to receive the Annual Report in electronic form, please send their email id to njain@poddarpigments.com.

The Company solicits active cooperation of shareholders in helping the Company implement the e-governance initiatives of the Government.

RISK AND INTERNAL ADEQUACY

Your Company has a low debt-equity ratio and is well placed to take care of its borrowings. Foreign Exchange transactions are largely covered to the extent of exposure otherwise not covered by natural hedging. Your Company is progressively moving towards a "net foreign-exchange earner" status.

The Company's internal control systems are adequate considering the size of the Company and are routinely tested and certified by our statutory as well as internal auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm:

(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2012 and of the profit of the Company for the period ended on that date;

(iii) that the directors have taken proper and sufficient care to ensure 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) That the directors have prepared the Annual Accounts on a 'going concern' basis.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realizing the objectives of the Company.

For and on behalf of the Board of Directors

S. S. Poddar MANAGING DIRECTOR

R. K. Sureka DIRECTOR & CEO

PLACE : JAIPUR DATE : 7th August, 2012


Mar 31, 2011

Dear Members,

The Directors are pleased to present the Twentieth Report on the business and operations of the Company, together with the Audited Accounts for the year ended 31 st March, 2011.

FINANCIAL RESULTS [Rs. in Lacs]

Particulars 2010-2011 2009-2010

Revenue Receipts 20056 16241

Other Income (Excluding Income from Investments) 251 166

Total Revenue Receipts including other income 20307 16407

Operating Profit before Interest, Depreciation & Tax 1781 1329

Income From Investments - 663

Less: Interest 148 61

Depreciation 233 215

Profit before tax 1400 1716

Less: Provision for Tax - Current 410 351

- Deferred 34 (39)

Profit after tax 956 1404

Add: Tax adjustments for Prior years - 15

Profit after Tax adjustments 956 1419 for Prior years

Balance brought forward 1419 144 from previous year

Profit available for appropriations 2375 1563

APPROPRIATIONS

Interim Dividend on Equity Shares 159 -

Proposed Final Dividend 80 - on Equity Shares

Total Dividend on Equity Shares 239 -

Tax on Dividend 40 -

General Reserve 1700 144

Balance Carried to Balance Sheet 396 1419

OPERATIONS

Your Company has scaled new heights in overall performance and has set new benchmarks in terms of turnover (including export benefit). During the year, the Company has achieved a turnover of Rs. 20056 Lacs as against Rs. 16241 lacs in the previous year, registering an increase of 23.49% over the previous year. The production capacity of the company has increased from 8400 M.T to 11100 M.T as a result of expansion at the company's existing plant. Production from the expanded capacity was started from third quarter of current Financial Year i.e. 2010-11.

The Company has also improved its performance in Exports and achieved direct export turnover of Rs. 4939 lacs as against Rs. 4056 lacs in previous year, registering an increase of 21.77%. Your Company Exports to over 20 countries around the Globe. The improved volume has enabled the Company to achieve significant improvement in EBIDTA margin (i.e. 9.55% from 8.69% in 2009-10).

DIVIDEND

Considering the Company's financial performance, the company has declared & paid its maiden interim dividend of Rs. 1.50 per share.

Based on the Company's performance, the Directors are pleased to recommend for approval of the members a final dividend of Rs. 0.75 per share for the year 2010-11. The final dividend on the Equity Shares, if approved by the members would involve a cash outflow of Rs. 92.79 lacs including dividend tax. The total cash outflow on account interim & Final dividend including dividend tax on Equity Shares of the Company for the year 2010-11 is Rs. 278.37 lacs.

MARKETING

A sustained effort to maintain and improve the international quality standards of your Company's products has resulted in satisfactory demand. This has helped in facing price competition in both domestic and international markets and also achieved increased sales. With sustained efforts, we expect further improvements in our performance this current year. The Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT

The R&D division of the Company, located at its plant, constantly endeavors to innovate and change the product mix/ process for creating higher value items at lower costs. The Company's full-fledged R&D Department makes constant efforts to widen its range of new generation masterbatches.

The R&D division of the company has testing equipments from world leaders. These equipments are used for dispersion, filterability, mechanical, rheological, thermal, optical & colorist properties of incoming raw materials and outgoing furnished products. Tests are carried out conforming to internationally accepted test methods.

QUALITY INITIATIVES

Your Company is committed to produce and delivering zero-defect Masterbatches and also to achieve customer satisfaction on a continuous basis by implementing and meeting the ISO 9001 : 2008 QMS requirements. Constant Interaction with Customers, Optimum utilization of resources and Training & Educating Employees.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports has enabled the Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014.

The Company's Credit Rating is A / Stable / P1 assigned by CRISIL for its working capital borrowings which signifies strong degree of safety regarding timely payment.

DIRECTORS

Shri V. K. Fogla, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges), the Auditors' certificate on compliance by the Company and the Management Discussion & Analysis, have all been included in the Annual Report.

COMPLIANCE WITH THE CODE OF CONDUCT

The Company had put in place a Code of Conduct for its Board Members and Senior Management Personnel from 23rd January, 2006 and has reaffirmed the same on 21st January, 2011. It is also available on the website of the Company. Declarations on compliance with the Code of Conduct have been received from all concerned. A certificate annexed to this effect forms a part of this Report.

DEPOSITS

The company has neither accepted any deposits during the year under review nor are there any fixed deposits outstanding at the year end.

EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read along with Companies (Particulars of Employees) Rules, 1975, is given in the statement annexed hereto forming a part of the Report.

AUDITORS

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re- appointed.

ENVIRONEMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is continuously looking for new ways to preserve the environment and to manage resources responsibly. Your company adopts clean technologies and processes that combine both economic progress and environment sustainability. The company has taken a number of green initiatives including waste optimization, water conservation and complying with applicable laws and regulations.

The Company has Safety Committees which regularly monitor compliance with the Company's Health & Safety policy. Additional steps have been taken to install equipments such as additional fire extinguishers of different classes, fume extraction system, de-dusting stations etc. The company attaches utmost importance to safety. The only acceptable standard of safety performance for your company is "zero accidents". Safety education and training is being imparted to everyone on a regular basis.

Several initiatives were continued as part of energy saving measures. The drive for energy conservation is always a key priority and your Company continuously strives to achieve this through process improvements and through enhancement of equipment capabilities. Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under section 217(1)(e) of the Companies Act 1956, are enclosed as a part of this report.

RISK AND INTERNAL ADEQUACY

Your Company has a low debt-equity ratio and is well placed to take care of its borrowings. Foreign Exchange transactions are largely covered to the extent of exposure otherwise not covered by natural hedging. Your Company is progressively moving towards a "net foreign-exchange earner" status.

The Company's internal control systems are adequate considering the size of the Company and are routinely tested and certified by our statutory as well as internal auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm :-

(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2011 and of the profit of the Company for the period ended on that date;

(iii) that the directors have taken proper and sufficient care 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) that the directors have prepared the Annual Accounts on a 'going concern' basis.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realising the objectives of the Company.

For and on behalf of the Board of Directors

R. K. Sureka S. S. Poddar DIRECTOR & CEO MANAGING DIRECTOR

PLACE: JAIPUR DATE : 25th July, 2011


Mar 31, 2010

The Directors are pleased to present the Nineteenth Annual Report on the business and operations of the Company, together with the Audited Accounts for the year ended 31st March,2010.

FINANCIAL RESULTS [Rs. in Lacs]

Particulars 2009-2010 2008-2009

Sales 16241 13078

Other lncome 829 83

Sales including other income 17070 13161

Operating Profit before Interest,

Depreciation & Tax 1992 935

Interest 61 122

Depreciation 215 216

Net Profit before tax 1716 597

Provision for Tax

- Current 351 216

- Deferred (39) (14)

- Fringe Benefit Tax - 11

Net Profit after tax 1404 384

Tax adjustments for Prior years 15 13

Net Profit after Tax adjustments 1419 397 for Prior years

Balance brought forward from previous year 145 188

Profit available for appropriations 1564 585

APPROPRIATIONS

General Reserve 144 440

Balance Carried forward to Balance Sheet 1420 145

OPERATIONS

Your Company has scaled new heights in overall performance and has set new benchmarks in terms of sales, profits and networth. During the year, the Company has achieved a turnover of Rs. 16241 Lacs as against Rs.13078 lacs in the previous year, registering an increase of 24.19 % over the previous year (despite production loss due to fire at i the adjoining IOC Depot and capacity constraints). The company plans to increase its production capacity by about 20% through expansion at the companys existing plant. This additional capacity will be available by third quarter of current Financial Year i.e. 2010-2011.

The Company has also improved its performance in Exports and achieved direct export turnover of Rs. 4056 lacs as against Rs. 3166 lacs in previous year, registering an increase of 28.11%. These results have been mainly | achieved due to all-round value addition, re-organization of the product mix, the marketing strategy and continuous R&D efforts.

MARKETING

Sustained efforts to maintain and improve the international quality standards of your Companys products has resulted in satisfactory demand despite sluggish economic conditions. This has also helped in facing price competition in both domestic and international markets and increasing sales. With sustained efforts, we expect further improvements in our performance this current year. The Company will continue to seek new markets while consolidating its hold over the existing customers.

RESEARCH AND DEVELOPMENT The R & D division of the Company, located at its plant, constantly endeavors to innovate and change the product mix/ process for creating higher value items at lower costs. This has enabled the company to bring down the cost of products and pass on this benefit to the customers, thereby benefiting society in general. The Companys full-fledged R&D Department makes constant efforts to widen its range of new generation masterbatches.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained growth in exports, along with compliance of Quality Management System as per BS EN ISO 9001:2008, has enabled the Company to maintain its Star Export House Status under the Foreign Trade Policy 2009-2014.

The company has been awarded the highest recognition for Exports during last two consecutive years (2007-08 & 2008-09) by Plastics Export Promotion Council, as "Second Best Exporter of Masterbatches" in the Country. During the year, the Companys Credit Rating has enhanced to A/Stable/P1 assigned by CRISIL for its working capital borrowings which signifies strong degree of safety regarding timely payment.

BUY-BACK OF SHARES

During the year, the company has bought-back 15,90,000 Equity Shares in an aggregate amount of Rs. 567.87 Lakhs at an average price of Rs. 35.71 per shares by utilizing free reserves of the company as approved by the Shareholders. The Paid-up Capital of the company after extinguishment of shares bought back under the scheme stands at Rs. 10.61 Crores.

DIVIDEND

With a view to conserve resources, your Directors do not recommend any dividend for the year.

DIRECTORS

Shri N. Gopalaswamy, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, and being eligible, has offered himself for re- appointment.

CORPORATE GOVERNANCE

Your Company has been actively practicing the principles of good corporate governance over the years. The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

The report on Corporate Governance (in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges) along with the Auditors certificate on its compliance by the Company and the Management Discussion & Analysis, which forms part of this Report, has been included in the Annual Report.

COMPLIANCE WITH THE CODE OF CONDUCT The Company had put in place a Code of Conduct for its Board Members and Senior Management Personnel from 23rd January, 2006 and has reaffirmed the same on 18th January, 2010. The same is available on the website of the Company. Declarations of compliance with the Code of Conduct have been received from all concerned. A certificate annexed to this effect forms a part of this Report.

DEPOSITS

The company has neither accepted any deposits during the year under review nor are there any fixed deposits outstanding at the year end.

EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is given in the statement annexed hereto forming part of the Report.

AUDITORS

M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold office till the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

ENVIRONEMENT, SAFETY, ENERGY CONSE-RVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is continually looking for new ways to preserve the environment and manage resources responsibly. Your company adopts clean technologies and processes that combine both economic progress and environment sustainability. The company has taken a number of developmental initiatives that enhance sustainability as well as environment care. These include capacity addition in old plants within the existing land reduction in water requirement by upgrading, processes, and soon.

The only acceptable standard of safety performance for your Company is "zero accidents". Hence, to ensure safety of men and materials, a safety audit was conducted through an outside and independent agency and their suggestions are being implemented.

Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under section 217(1 )(e) of the Companies Act 1956, are enclosed as a part of the report.

RISK AND INTERNAL ADEQUACY

Your Company has a low debt-equity ratio and is well placed to take care of its borrowings. Your Company is progressively moving towards a "net foreign-exchange earner" and detailed review by Audit Committee once in a quarter in which the transactions are suitably covered.

The Companys internal controls systems are adequate considering the size of the Company and are routinely tested and certified by our statutory as well as internal auditors. Moreover, the Company continuously upgrades these systems.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm :-

(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and have made judgements and estimates that are, reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the period ended on that date;

(iii) that the directors have taken proper and sufficient care 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) That the directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

The Management is grateful to the various Government and Semi-Government Authorities, Bankers, Investors, Marketing Dealers, Vendors and Customers for their valued support and co-operation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realising the objectives of the Company.

For and on behalf of the Board of Directors

PLACE: CHENNAI R.K.Sureka S.S.Poddar

DATE : 14th July, 2010 director & ceo managing director

 
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