The year witnessed a marked slowdown in global growth. Emerging markets were characterised by a sharp fall in growth rates, especially in China. Europe and Japan continued to be under brssure all through the year, while US showed tepid signs of improvement.

During the year under review, prices of raw material namely Acetic Acid & Alcohol were volatile. The price fluctuation in Acetic Acid was further aggravated due to foreign exchange fluctuations. The increase in the cost of raw material was not fully absorbed in the price of our finished product namely Ethyl Acetate due to slowdown in demand in the user industry in domestic & international market and also because of surplus production capacity of Ethyl Acetate within India. With consistent quality and wider customer base across the user industries, your company has been able to maintain production level inspite of the industry slowdown and other various challenges posed in the market.

Opportunities and Threats

The expanded capacities coupled with consistent production quality, sustained and aggressive marketing would help the Company to increase the exports in the next few years. Your Company is focused to increase the geographic reach of the products and expects to show substantially higher growth.

The flexibility in the plant to either "make" or "buy" intermediates helps in optimization of resources. Hence, the focus will be to ensure that the brsent advantage and flexibility in usage of feedstock perpetuates in our long-term vision.

With a view to reduce our dependence on one product namely Ethyl Acetate, we are exploring possibilities of producing other chemical derivatives using Acetaldehyde as feedstock as well as entering into new product.

Since the availability and price of Ethanol, which is by-product of Sugar, largely depends upon the performance of Sugar Industry, any fluctuation in the agro-climatic conditions would affect the availability and price of Ethanol. The increased demand by Oil Marketing Companies (OMCs) will further tighten the supply and pricing of Ethanol.

Segment wise and Product wise performance

The Company operates only in one Business segment i.e. Chemicals. During the year under review, the production of intermediate product namely Acetic Acid was not competitive due to the market prices. Your Company therefore purchased the Acetic Acid from market instead of producing the same from Ethanol or Acetaldehyde. As a result of this, production of Acetaldehyde, which is an intermediate product for Acetic Acid, was also low. Acetaldehyde was produced only to the extent of demand from customers. Your Company could source Ethanol from various distilleries at market prices due to improved production of Sugar and Ethanol within the State of Maharashtra.

Your Company maintained its production capacity to 24000 TPA. Ethyl Acetate production was marginally lower at 18,640 MT for 2014-15 as against 22,008 MT in FY 2013-14 due to adverse market scenario as well as Ethyl Acetate plant could not run for one & half month (Oct 14 & half of Nov 14) due to non availability of SDS at reasonable price. The Company has sustained the production equivalent to last year even in sluggish markets, economic slowdown and political uncertainties.

Risks and Concerns

In view of the Government of India's mandatory policy for Ethanol Blending Programme, price of Ethanol which is an important feedstock for the chemicals manufactured by the Company, has increased sharply. Rising input prices amidst inflationary market condition coupled with the weakening of Rupee against US Dollar has pushed up the feedstock prices.

Internal Control System

Your Company has adequate internal control system including suitable procedures commensurate with its size and the nature of the business. The internal control system provides for all documented policies, guidelines, authorization and approval procedures. Internal Audit is being carried out throughout the year in areas such as Income, Expenditure, Financial Accounting and Statutory Compliances. The primary objective of such audit is to test the adequacy and effectiveness of all internal controls laid down by the Management and to suggest improvements.

Human Resources

The employees of the Company including officers and workers contributed greatly to the improved performance of the Company. Your company expects same commitment and contribution from the employees during the years to come to enable it to achieve the targeted growth.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure to this Report.

Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during from 10 a.m. to 1 p.m. on working days except Saturdays, Sundays and other public holidays upto the date of Annual General Meeting (AGM).

Cautionary Statement

Certain statement in the management discussion and analysis may be forward looking within the meaning of applicable securities laws and regulations and actual results may differ materially from those exbrssed or implied. Factors that would make differences to Company's operations include competition, price realization, changes in government policies and regulations, tax regimes, economic development and other incidental factors.