DIRECTOR  REPORT

TO  

THE MEMBERS,

Your Directors are pleased to present their Twenty Eighth Annual Report for the year ended on 31st March, 2015.

PERFORMANCE REVIEW :

During the year under Report, your Company has achieved domestic sales of Rs. 8646.78 Lacs as against Rs. 6358.80 Lacs during the previous fiscal. However, Export sales have been decreased to Rs. 2892.25 Lacs from Rs. 3648.11 Lacs of previous year. The aggregate sales and other income have been increased by 15.51% to Rs. 11719.27 lacs from Rs. 10145.83 lacs of previous year 2013-14. The Net Profit of the Company is increased to Rs. 523.96 lacs up by 51.59% against previous year.

DIVIDEND :

The Board of Directors is pleased to recommend a dividend of Re.0.25 per share (i.e. 25%) on the paid up share capital of the Company, subject to approval of members in the ensuing Annual General Meeting. The dividend on equity shares, if approved by the members would involve a cash outflow of Rs. 174.09/- Lacs including dividend distribution tax, resulting in a payout of 33.23% of the Net Profit after tax of the Company.

TRANSFER TO GENERAL RESERVES:

The Company proposes to transfer Rs. 35.00/- Lacs to the general reserve out of the amount available for appropriation and an amount of Rs. 294.34/- Lacs is proposed to be retained in the Profit and Loss account.

Your Company has a 49:51 joint venture with Bausano Holdings SRL, Italy under the name of Rajoo Bausano Extrusion Private Limited to manufacture and market pipe and profile extrusion lines including for wood composite profiles in India, with a special emphasis on Africa, Gulf and SAARC markets.

During the financial year 2014-15:

(i) Rajoo Bausano CPVC pipe plant (Twin Screw CPVC Pipe Plant Flowex RBMD-66/30) supplied to M/s Rajendra Industries, Rajkot was commissioned in a record time of 24 Hours.

(ii) Rajoo and Bausano SPA, Italy collaboration has launched India's first WPC (Wood Plastics Composite) Extrusion Machine. The construction, flooring and decking Companies would significantly benefit as these machines come with range of capacities (200 Kg/hr to 1200 kg/hr) to manufacture profiles and boards that uses up to 80% of wood powder, first ever in the Industry.

Rajoo Bausano Extrusion Private Limited is a combination of Rajoo's best in class infrastructure and Bausano's sublime pioneering technology, availability of indigenous raw material and access to the latest technology. Through this unique Joint Venture, customers now have world class technological products at affordable price levels.

BOARD'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

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

(iii) they 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 the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. Kishor R. Doshi, Mr. Ramesh A. Shah and Mr. Rajendra Vaja were appointed as independent directors at the Annual General Meeting of the Company held on September 5, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

Mr. Sunil B. Jain retires by rotation and being eligible has offered himself for re-appointment.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

Mr. Kirit Ratanashi Vachhani was appointed as Additional Director with effect from March 19, 2015 in the category of Non-Executive Independent Director. The resolution seeking approval of the Members for appointment of Mr. Kirit Ratanashi Vachhani have been incorporated in the notice of the forthcoming Annual General Meeting of the Company along with the brief details about him.

Mr. Kishor Ratilal Doshi (Independent Director) resigned as Director with effect from 04.04.2015. The Board places on record its sincere appreciation for the valuable services rendered by Mr. Kishor Ratilal Doshi.

Pursuant to the Provisions of the Section 203 of the Act, the Company has appointed Mr. Vijay Jadeja as Company Secretary in the Board Meeting held on 29.03.2014 and Mr. J. T. Jhalavadia as Chief Financial Officer of the Company in the Board Meeting held on 14.08.2014.

NUMBER OF MEETINGS OF THE BOARD:

Sixteen meetings of the board were held during the year. For details of the meetings of the Board, please refer to the Corporate Governance Report which forms the part of this report.

BOARD EVALUATION :

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreement.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report.

COMMITTEES OF THE BOARD:

Currently the Board has five Committee, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility and risk and strategy Committee.

A detailed note on the Board and its Committees is provided under the Corporate Governance Report Section of this Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company had received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 that he meets the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

TRAINING OF INDEPENDENT DIRECTORS:

Every new Independent Director of the Board attends an orientation program. To familiarize the new inductees with the strategy, operations and functions of your Company, the executive Directors/ Senior Managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUECY:

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its Business, including adherence to the Company's policies, Safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial disclosure.

CORPORATE GOVERNANCE:

Since inception, the Company laid a lot of emphasis on appropriate & timely disclosures and transparency in all business dealings. REL has been adhering to the corporate governance principles & practices since long. Your Company is regularly submitting its Corporate Governance Reports to stock exchanges where shares are listed. A detailed report on Corporate Governance is also annexed to this Report. Further, the Certificate, in relation to compliance of the corporate governance principles, obtained from M/s M N Manvar & Co., Chartered Accountants, and statutory Auditors of the Company is annexed to this Report of Board.

AUDITORS:

M/s. M N Manvar & Co., Chartered Accountants (Firm Registration No: 106047W), and Statutory Auditors of the Company will retire at this Annual General Meeting, and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to re-appoint  them as Auditors for the financial year 2015-16 from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders.

AUDITORS REPORT AND SECRETARIAL AUDITORS' REPORT:

The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. A detailed report of the secretarial auditor is annexed herewith, which forms part of this report.

RISK MANAGEMENT :

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.

PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS:

The Particulars of loans, guarantees and Investments have been disclosed in the Financial Statements.

TRANSACTIONS WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during the Financial year with the related parties were in ordinary course of business and on an arm's length basis.

During the period under review, the Company had not entered in to transaction with any of its related parties which could be considered material. Policy on dealing with related party transactions is available on the website of the Company (URL: www. rajoo.com/investors).

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has always been undertaking CSR activities on a significant scale upholding the belief that corporates have a special and continuing responsibility towards social development.

The vision of Rajoo Group's CSR activities to make sustainable impact on the human development of under-served communities through initiatives in Education, Health and Livelihoods has been formally codified with the constitution of a dedicated Corporate Social Responsibility Committee of the Board on 30th May, 2014 by the Board of Directors of the Company with the imminent notification of section 135 of the Companies Act, 2013 and Rules framed there under.

Initiatives undertaken by the Company on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company

EXTRACT OF ANNUAL RETURN:

As provided under Section 92(3) of the Companies Act, 2013 the extract of annual return is given in Annexure II in the prescribed Form MGT-9, which forms part of this report.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business.

The Company has a structured induction process and Management Development Programs to upgrade the skills of employees. Objective appraisal systems based on Key Result Areas are in place for the staff.

The Company is committed to nurturing; enhancing and retaining top talent through Superior learning & Organization Development intervention, Development is part of Corporate HR function. It is a critical pillar to support the organization growth and its sustainability over the long run.

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges (URL: www.rajoo.com <http://www.rajoo.com>).

PARTICULARS OF EMPLOYEES :

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

The Non-executive Directors are not paid any remuneration except sitting fees.

c. The percentage increase in the median remuneration of employees in the financial year: 13.40%

d. The number of permanent employees on the rolls of Company as on 31st March, 2015 : 246

e. The explanation on the relationship between average increase in remuneration and Company performance:

The average increase in the remuneration of the employees is 13.40% and the growth in the Revenue and other income of the company is 15.51%. This shows that the increase in remuneration is in line with the Company performance.

k. The key parameters for any variable component of remuneration availed by the directors: None

l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None

m. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remuneration is as per the remuneration policy of the Company.

n. Particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

There are no employees in the Company drawing remuneration more than Rs. 5 lacs per month or Rs. 60 lacs per annum.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No compliant was received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal.

DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

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

1. Consumption & Conservation of energy

(a) Energy conservation measures taken:

Continuous efforts are being made by the production team for conservation of energy. Regular energy audits are being carried out by independent agencies and utmost care is taken in implementing their recommendations although the actual benefit in terms of energy saved cannot be measured.

(b) No investment has taken place during the year under report specifically to reduce or monitor energy consumption.

(c) Impact of measures (a) above for reduction of energy consumption is likely to result in reduction of cost of production.

2. Technology absorption

(a) Efforts made in the technology absorption :

In terms of the technical collaboration with Commodore of USA and Hosokawa Alpine of Germany, we have been able to absorb and indigenize the technology for producing machines for manufacture of foamed polystyrene products through the process of tandem extrusion and vacuum forming and also multilayer blown film lines. All the drawings and process know-how has been fully absorbed by various departments of the Company. This has resulted in significant increase in sales of extrusion machines and thermoformers.

(b) Future plan of action.

We are making continuous efforts in developing more energy efficient machines with updated technology; energy forms the second largest cost component in producing plastic films and sheets. We are also in the process of exploring joint ventures and technical collaborations with reputed overseas manufacturers for upgrading and adopting higher level of technology at affordable prices.

APPRECIATION:

Your directors express their appreciation for the assistance and co-operation received from the share-holders, customers, bankers, government authorities, stock exchanges, suppliers, agents and business associates at various levels during the year under review. Your directors also wish to place on record their appreciation for the committed and dedicated services of company's executives, staff and workman.

For and on behalf of the Board of Directors

 (R. N. DOSHI)

Chairman & Managing Director

Date: 07/05/2015

Place: Veraval (Shapar), Rajkot