Management's Discussion And Analysis:

(a) Industry Structure and Developments and impact on the Company and its performance

Year under review witnessed a fall in the worldwide demand of castor oil led by slowdown in China. During the last five years, China has emerged as the largest consumer of castor oil. Consequently, the demand for sebacic acid (where China is the largest producer and consumer) the largest derivative of castor oil declined sharply. As you are aware, your company has invested in a sebacic acid manufacturing plant. The plant continued to run below its capacity due to subdued demand and low prices. Your company is hopeful of running the plant at higher capacity once the demand for sebacic acid revives

The demand for many of the company's products which compete with crude oil in many of the applications were affected by the steep fall in the prices of crude oil in the second half of the brvious year. Domestic speculation in the castor seeds drove the castor oil prices against the fundamentals resulting frustration for manufacturers' and consumers alike. Such unwanted volatility if not checked, is likely to stall the development in research of castor oil based products, branding castor oil as an unreliable source material. India over the brvious three decades has established itself as a reliable source of castor oil. Erratic supply and unwanted volatility , if not checked is likely to damage Brand India and also affect millions of farmers whose efforts along with the efforts of the agricultural scientists have placed our Country in the br-eminent leadership position for world supply of castor oil. The castor seed production, since the introduction of hybrid seeds in early 1970 has gone up over Ten times, one of the highest amongst the major agri commodities.

In December 2014, the forward market took some corrective measures to curb this speculation helping to restore sanity and balance to the market. The prices of castor seeds corrected by over 30% from the peak price in December, 2014 by end of February, 2015. The merger of the portfolio of the forward market commission with SEBI will hopefully help the regulator to take pro-active steps brventing such damage to the Industry.

The Indian crop estimated at 1,232,000 Mtons for the year 2014-15 with a record carry forward of over 500,000 Mtons would be sufficient to fulfill the world demand. With the demand for seeds estimated in the range of 12 to 14 lac Mtons there should be no supply concern.

The demand for castor oil based products continues to see a stable growth across the world except China, where a moderation in demand is being witnessed. In the current scenario India should be able to satisfy the world demand. However, the weather disruption due to the El Nino, may affect the sowing and the yields in the coming season. In this second year of El Nino your Company will be keeping a close watch on the monsoon and sowing data.

(b) Opportunities & Threats.

The world economic growth for the last quarter was at 0.7% against the forecast of 3.3%. The clouds over world economic growth due to slow down in China and the credit default by Greece remain a major concern. The road to growth is likely to become steeper with the increase in interest rates by the FED, USA. However, a benign environment in the Middle East, low crude oil prices will benefit the

world economy, which should see the benefits of this positive events in the longer run, especially for the crude oil importing countries. With 70% to 80% of your Company's production being exported, the state of the world economy, besides other industrial and scientific developments has an important bearing on its growth.

Your company's products are competing with end products manufactured from crude oil and other vegetable oils. The price behavior of castor oil in relation to them is likely to have a bearing on the growth of the company.

Environment being a major concern, the search for green products is likely to intensify in the future. Castor Oil being a natural, organic, renewable and bio-degradable product is gaining importance as a green product. With improved irrigation, better quality inputs and scientific farming there is a substantial scope to improve yields per hectare of castor seeds. Besides due to its unique chemical structure, it finds myriad applications in virtually every industry be it agriculture, lubricants, paints, inks, surface coatings, pharmaceuticals, food, engineering plastics, cosmetics, perfumeries, electricals, rubber and so on. Your Company continues to endeavor to tap these opportunities by focusing on Research & Development and investing in new capacities, new technologies, new applications, and new products.

Castor Seeds continue to be a volatile raw material in terms of its price. Being an agricultural product, it depends on the rainfall and weather conditions brvailing in the area of castor growing states in the country, though it is a sturdy crop. The limited size of the crop makes it susceptible to speculation and wild gyration in prices. To mitigate the effect of uncertain weather, the Company has laid down parameters for inventory management. The Company has proper mechanism in place to immediately respond to any unforeseen eventualities. The Company is also cultivating hybrid seeds to improve the productivity of commercial Castor Seeds

(c) Segment:

The Company is organised into three business segments - Castor Oil, Derivatives and Power Generation.

(d) Outlook:

The long term demand outlook for your Company's products remains positive although the near term uncertainties remain due to the low crude oil prices. Emphasis on green eco-friendly products is likely to lead to increase in innovation of new products and uses of castor oil by the chemical industry.

Your Company continues to invest in Research & Development to tap on new growth opportunities. Your Company is also undertaking a backward integration program in order to increase the availability of castor seeds. Barring unforeseen circumstances, your Directors expect satisfactory growth.

(e) Risks and Concerns:

The Company's products are used across geographies in a variety of industries, thereby to a great extent, mitigating the risks associated with demand for its products on a long-term basis. The price behavior of raw material depends on the weather pattern in the castor growing regions, the impact of El Nino on monsoon in these regions, global demand and inventory, and prices of other oils including Crude Oil and therefore can be volatile as well as unbrdictable. The Company is closely watching the development of factors affecting the castor seed prices.

The Company restricts its exposure to the price fluctuation of raw materials by limiting its un hedged exposure.

With the business of the Company growing steadily and demand for trained and experienced manpower in excess of the supply, the risk of managing the people is very big. The Company has to retain its existing trained workforce and also attract new talent for its different operations. To improve the performance of the staff at work; various refresher training courses are organized to update their knowledge with the latest technologies and management ideas.

The demand for castor oil and its products is dependent on the overseas markets as more than 80% of the industries production is exported. The threat of new entrants and competition due to aggressive trading policies adopted by them continue to be of concern.

The Company has focused its efforts on marketing and introducing new products thereby mitigating to a certain extent, the effect of recession / slowdown in the industry.

Unrestricted speculation and high volatility due to trading in commodity exchange could have a negative effect on the growth of the industry

Your Company has been engaged in several legal cases in connection with or incidental to its business operations. These include service, excise and customs cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in the respective areas. Your Board believes that the outcome of these cases is unlikely to cause a material adverse effect on the company's profitability or business performance.

Your Company has a contingent liability of 7581.57 lacs (net of advances) as on March 31, 2015 . Attention of the shareholders is drawn to the explanations mentioned in point no. 31 of the Notes to Financial statements forming integral part of the balance sheet as on March 31, 2015. In view of the brsent status and based on legal advice received, your Board of Directors are of the opinion that no provision is required to be made against these contingent liabilities as of now.