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DIRECTOR REPORTS

March 2014

Details regarding energy conservation

(a) Energy Conservation measures taken: There has been a reduction in the consumption of energy due to optimising the utilization of the equipments. The Bio Mass Boiler, VFD Panel and other equipments leads to better utilization of resources and energy conservation thereon. (b) Impact of the above measures: There has been a substantial decrease in consumption of Furnace Oil. Moreover, energy conservation measures is an on-going process, which is undertaken in all the units. (c) Total Energy Consumption and energy consumption per unit of production is as under: S.No. Particulars 2013-14 2012-13 1 Power and Fuel Consumption Electricity: Purchased : Unit (Lakhs) 192.8 183 Total Amount (Rs./Lakhs) 918.7 819 Rate/Unit (Rs) 4.8 4.48 Own Generation Through Diesel Generator : Units (Lakhs) 15.6 26.30 Units per litre of Diesel Oil 3.2 3.3 Cost/Unit (Rs.) 15.7 13.3 2 Furnace Oil: Quantity (Kiloliters) 157 19 Total amount (Rs.Lakhs) 74 8 Average Rate (Rs/Litre) 47.13 40.9 3 LDO : Quantity (Kiloliters) - 72 Total amount (Rs.Lakhs) - 34 Average Rate (Rs/Litre) - 47 3 BRIQUETTES Quantity (Tonnes) 11,398 10,012 Total Cost (Rs. Lakhs) 634 504 Average Rate (Rs./ Kg) 6 5.0 Consumption per unit of production S.No. Particulars 2013-14 2012-13 1 Electricity (Units) Drugs 516 894 Pharmaceuticals 159 121 Insecticides - 289 Robin Powder - 28 2 Furnace Oil (Litres) Drugs - - Pharmaceuticals - - Insecticides - 0.6 Others-LDO ( Litres/MT) - 3.2 3 BRIQUETTES (Kg/MT) Drugs 949.51 887 Pharmaceuticals - - Insecticides - 405

Details regarding technology absorption

a. Research and Development (R&D) 1. Specific areas in which R&D was carried out by the Company: The scientific Service group in India is responsible for development and launch of personal care and home care products for the Indian market. The R&D (Healthcare) in India is responsible for development and launch of Healthcare products for the Indian & global market. The technology developed by the global category R&D is being transferred to company’s Scientific Services group and will be modified according to Indian consumer needs. 2. Benefits derived as a result of the above R&D initiatives: a) Product innovation and new product launches b) Cost optimization using local raw materials c) Better claims d) Formula optimization to suit Indian conditions, consumer habits and aspiration. e) Substitution of imported raw materials with indigenous raw materials. f) Packaging design optimization. g) Delivering quality products 3. Future plan of action: The Global R&D would continue to share knowledge and its benefits would be available on continuous basis confirming to the best of the international standards. Some of the initiatives would be: a) To enhance the process efficiency b) To introduce new products and improve packaging c) Process improvement in the manufacturing facility with improved technologies. d) Replacement of raw material for improved safety of consumers and the environment. e) Replacement of ingredients by safe ingredients as per the WHO guidelines. f) Development of formulae and products for meeting the specific needs of the developing markets. g) Improved product designs for reducing carbon emissions. h) Consumer friendly delivery mechanism with better technology. 4. Expenditure on R&D: Capital : Rs 72.30 Lakhs Recurring: Rs 846.04 Lakhs Total : Rs. 918.34 Total R & D Expenditure â?? 0.23 % approx as percentage of turnover b. Technology absorption, adaptation and innovation: 1. Efforts in brief, made towards technology absorption, adaptation and innovation: Scientific service group and R & D (Healthcare) in India is working closely with different global categories to bring new technology, new product format, better claims. The efforts have been made to reduce the carbon emission through process changes. Many global products are made locally using the global technology. Local raw materials and packaging have been developed to meet the same standards in terms of quality, safety and performance.Technology for the Airwick gel, Harpic with bleach is being taken from UK and USA respectively and has been manufactured in Uttarakhand successfully. 2. Benefits derived as a result of the above: Efforts from Research & Development and Scientific Services Group have yielded following benefits: a) Substitution of imported raw materials with indigenous ones which helps to develop Indian raw material and packaging industry. b) Improved product quality and safety which meets global standards c) Developing products which will be cheaper than imported products. d) Quicker technology absorption and transfer from global R&D labs. e) Smooth transition of technologies and processes from pilot plants to factories for commercial production. f) Improved performance by way of better shelf life and product stability in local conditions. g) Acceptance of products by consumers based on their expectations in terms of performance and value for money. 3. Details of imported technology: The Company continues to bring in imported technologies for development of products in various categories.

Details regarding foreign exchange earnings and outgo

The foreign exchange earnings of the Company amounted to Rs. 10,308.35 Lakhs during the period under review, whereas, the outgo was Rs. 31,037.48 Lakhs mainly on account of raw and Packing Materials, Royalty, travelling expenses.

Particulars of employees as per provisions of section 217

Information in accordance with Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 for the year ended 31st March 2014, forms part of this report and is given in Annexure II.

Disclosures in director’s responsibility statement

Pursuant to provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that: i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given. 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 or loss 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 accounts on a going concern basis.

Disclosure in board of directors report explanatory

DIRECTORS REPORT

The Directors present the Annual Report together with the statement of accounts for the 12 Month financial year ended 31st March 2014:

Gross Revenue from Operations            405,255.30           363,263.71
Less: Excise Duty             (4,924.14)             (3,730.77)
Net Revenue Operations        400,331.16        359,532.94
Other Income             10,757.84               9,264.50
Total Income        411,089.00        368,797.44
Expenditure        317,288.86        309,342.86
Profit before tax          93,800.14          59,454.58
Less: Provision for Taxation           (19,887.63)           (13,161.51)
Profit after tax             73,912.51             46,293.07
Profit Brought Forward             91,994.69             53,337.90
Total Profits available for appropriation        165,907.20          99,630.97
Interim Dividend                         -                 2,587.25
Final Dividend                         -                           -  
Dividend Distribution Tax                         -                    419.72
Transfer to General Reserve                         -                 4,629.31
Balance as at the end of the year        165,907.20          91,994.69

Performance

The trend of delivering consistent growth continues. The net revenue from operations of the Company for the year ended 31st March 2014 stood at Rs.400,331.16 lakhs. The profits have increased at a good rate as compared to the previous year. The profit before tax for the year 2013-14 stood at Rs. 93,800.14 lakhs and the profit after tax was Rs.73,912.51 lakhs.

Dividend

The Company has not declared any dividend for the year ended March 31, 2014

Reserves and Provisions

During the period under review, the Company did not transfer any amount to General Reserves. The balance carried forward at the end of year was Rs. 165,907.20 lakhs.

Export Performance

In the year 2013-14, the Company’s F.O.B. value of exports stood at Rs. 2862.46 lakhs.

Audit Committee

The Audit Committee of the Board of Directors of the Company comprises of the following members:

Mr. Chander Mohan Sethi – Chairman

Mr. Parag Agarwal– Member

Ms. Ariadna Granena - Member

Directors

The Board of Directors, in its meeting held on November 04, 2013 appointed Mr. Rajesh Kumar Jha and Mr. Sreenivasrao Nandigam as Additional Directors. Further, subject to the approval of shareholders, Mr. Rajesh Kumar Jha and Mr. Sreenivasrao Nandigam were also appointed as Wholetime Directors of the Company liable to retire by rotation for a period of 5 years w.e.f. November 04, 2013.

Mr. Jose Joaquin Camero Gonzalez resigned w.e.f 12th December 2013. Accordingly, Ms. Ariadna Granena Aracil ceased to be a alternate director of Mr. Jose Joaquin Camero Gonzalez and was appointed as Additional Director w.e.f December 12, 2013.

Further, Mr. Akhil Chandra, Managing Director and Mr. Pradeep Krishnamurthi, Wholetime Director resigned w.e.f. December 31, 2013 and September 06, 2014 respectively.

The Board of Directors, in its meeting held on January 03, 2014 appointed Mr. Nitish Kapoor as Additional Director. Further, subject to approval of shareholders, Mr. Nitish Kapoor was also appointed as Managing Director of the Company not liable to retire by rotation for a period of 5 years w.e.f. January 03, 2014.

The Board place on record its deep sense of appreciation for the guidance and invaluable contribution made by Mr. Akhil Chandra, Mr. Pradeep Krishnamurthi and Mr. R during their tenure as Managing Director

Mr. Chander Mohan Sethi, Wholetime Director and Mr. Gopal Mishra, Whole-time Director & CFO, retire by rotation and being eligible, offers themselves for reappointment at the ensuing Annual General Meeting.

Subsidiary Company

Particulars of M/s. Reckitt Piramal Private Limited, a subsidiary of the Company as required under Section 212 of the Companies Act, 1956 are attached and form part of this report.

Details of Energy Conservation, Technology & Foreign Exchange

Details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be made pursuant to clause (e) of sub-section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure I to this Report.

Particulars of Employees

Information in accordance with Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 for the year ended 31st March 2014, forms part of this report and is given in Annexure II.

Auditors’ Certificate on compliance with FDI norms

Pursuant to Reserve Bank of India Circular Ref. RBI / 2013-2014 / 117 A.P. (DIR Series) Circular No. 1 dated July 4, 2013, the Company has duly obtained a certificate from the statutory auditors as required to be obtained on annual basis wherein the statutory auditors have certified that the Company is in compliance with the regulations as regards downstream Investment and other related FEMA provisions.

Statutory Auditors

Price Waterhouse having firm registration no. 012754N Chartered Accountants who are the statutory auditors of the Company hold office, in accordance with the provisions of the Companies Act, 1956, upto the conclusion of the forthcoming Annual General Meeting.

Further, Price Waterhouse, Chartered Accountants have converted itself into a Limited Liability Partnership and has received a certificate of registration on 25th July 2014 for conversion from Price Waterhouse, Chartered Accountants to Price Waterhouse Chartered Acccountants LLP (Revised Firm Registration Number stands as 012754N/N500016).

The Audit Committee and Board of Directors of the Company recommend appointment of Price Waterhouse Chartered Accountants LLP (Revised Firm Registration Number stands as 012754N/N500016) to act as statutory auditor from the conclusion of ensuing Annual General Meeting until the conclusion of the next Annual General Meeting of the Company to be held in the year 2015 and to fix their remuneration for the financial year ending 31st March, 2015.

Price Waterhouse Chartered Accountants LLP (FRN  012754N/N500016) being eligible, offer themselves for re-appointment.

 

Cost Auditors

Your Company had appointed Vijender Sharma & Co., Cost Accountants, New Delhi as Cost Auditor with the approval of the Central Government for audit of Cost records for the financial year ended March 31, 2013.

The due date for filing the Cost Audit Reports in XBRL mode for the financial year ended March 31, 2013 was September 28, 2013 and the Cost Audit Report was filed by the Cost Auditor on September 27, 2013.

In respect of financial year ended March 31, 2014, your Company, with the approval of the Central Government, has appointed Vijender Sharma & Co., Cost Accountants, New Delhi as Cost Auditor for cost audit of cost records as applicable to the Company. The due date for filing the Cost Audit Report for the financial year ended March 31, 2014 is September 28, 2014.

Directors Responsibility Statement

Pursuant to provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given.

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 or loss 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 accounts on a going concern basis. 

Human Resources

Training programs for employees at all levels were organized during the year to achieve all round development. 

As for protection against Sexual Harassment, the Company has a sexual harassment policy in which it has formalised a free and fair enquiry process. Further, there was no case of Sexual Harassment filed during the year under review.

Acknowledgements

Your Directors would like to express their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers, suppliers and members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by the employees of the Company.

On behalf of the Board

 

 

                                                              Sd/-                                         Sd/-

      Nitish Kapoor                       Gopal Mishra

Managing Director           Executive Director & CFO

 

Registered Office:

227, Okhla Industrial Estate,

Phase III, Okhla,

New Delhi – 110 020.

Dated: September 06, 2014

Place:  Gurgaon

ANNEXURE I TO DIRECTORS’ REPORT

 

Report on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo [Section 217(1))(e) of the Companies Act, 1956]

 1. A.    CONSERVATION OF ENERGY

 (a) Energy Conservation measures taken:  There has been a reduction in the consumption of energy due to optimising the utilization of the equipments. The Bio Mass Boiler, VFD Panel and other equipments leads to better utilization of resources and energy conservation thereon.

(b) Impact of the above measures: There has been a substantial decrease in consumption of Furnace Oil. Moreover, energy conservation measures is an on-going process, which is undertaken in all the units.

(c)    Total Energy Consumption and energy consumption per unit of production is as under:

S.No.

Particulars

2013-14

2012-13

1

Power  and Fuel Consumption

 

 

 

 

 

 

Electricity:

 

 

 

 

 

 

Purchased :

 

 

 

Unit (Lakhs)

                                                         192.8

                      183

 

Total Amount (Rs./Lakhs)

                                                         918.7

                      819

 

Rate/Unit (Rs)

                                                             4.8

                     4.48

 

Own Generation

 

 

 

Through Diesel Generator :

 

 

 

Units (Lakhs)

                                                           15.6

                    26.30

 

Units per litre of Diesel Oil

                                                             3.2

                       3.3

 

Cost/Unit (Rs.)

                                                           15.7

                     13.3

 

 

 

2

Furnace Oil:

 

 

 

 

 

 

Quantity (Kiloliters)

                                                            157

19

 

Total amount (Rs.Lakhs)

                                                              74

8

 

Average Rate (Rs/Litre)

                                                         47.13

 

 

40.9

 

3

LDO :

 

 

 

Quantity (Kiloliters)

-

                        72

 

Total amount (Rs.Lakhs)

-

                        34

 

Average Rate (Rs/Litre)

-

                        47

 

 

 

 

3

BRIQUETTES

 

 

 

 

 

 

Quantity (Tonnes)

                                                        11,398

                  10,012

 

Total Cost (Rs. Lakhs)

                                                            634

                      504

 

Average Rate (Rs./ Kg)

                                                                6

                       5.0

Consumption per unit of production

S.No.

Particulars

2013-14

2012-13

1

Electricity (Units)

 

 

 

 

 

 

Drugs

                                                            516

                      894

 

Pharmaceuticals

                                                            159

                      121

 

Insecticides

                                                              -  

                      289

 

Robin Powder

                                                              -  

28

 

 

 

2

Furnace Oil (Litres)

 

 

 

 

 

 

Drugs

-

                         -  

 

Pharmaceuticals

-

                         -  

 

Insecticides

-

                       0.6

 

 

 

 

Others-LDO ( Litres/MT)

-

 3.2

 

 

                       

3

BRIQUETTES (Kg/MT)

 

 

 

 

 

 

Drugs

                                                      

949.51

887

Pharmaceuticals

-

                         -  

Insecticides

-

405

B. TECHNOLOGY ABSORPTION:

 a. Research and Development (R&D)

 1.  Specific areas in which R&D was carried out by the Company:

The scientific Service group in India is responsible for development and launch of personal care and home care products for the Indian market.  

The R&D (Healthcare) in India is responsible for development and launch of Healthcare products for the Indian & global market.

The technology developed by the global category R&D is being transferred to company’s Scientific Services group and will be modified   according to Indian consumer needs.

2.      Benefits derived as a result of the above R&D initiatives:

a) Product innovation and new product launches

b)  Cost optimization using local raw materials

c) Better claims

d) Formula optimization to suit Indian conditions, consumer habits and aspiration.

e) Substitution of imported raw materials with indigenous raw materials.

f) Packaging design optimization.

g)  Delivering quality products

3.      Future plan of action:

The Global R&D would continue to share knowledge and its benefits would be available on continuous basis confirming to the best of the international standards. Some of the initiatives would be:

a)      To enhance the process efficiency

b)      To introduce new products and improve packaging

c)      Process improvement in the manufacturing facility with improved technologies.

d)     Replacement of raw material for improved safety of consumers and the environment.

e)      Replacement of ingredients by safe ingredients as per the WHO guidelines.

f)       Development of formulae and products for meeting the specific needs of the developing markets.

g)      Improved product designs for reducing carbon emissions.

h)      Consumer friendly delivery mechanism with better technology.

4.  Expenditure on R&D:

 

Capital      :  Rs 72.30 Lakhs

Recurring:    Rs 846.04 Lakhs

Total          : Rs. 918.34

Total R & D Expenditure – 0.23 % approx as percentage of turnover

 b.      Technology absorption, adaptation and innovation:

  1.      Efforts in brief, made towards technology absorption, adaptation and innovation:

Scientific service group and R & D (Healthcare) in India is working closely with different global categories to bring new technology, new product format, better claims.

The efforts have been made to reduce the carbon emission through process changes.  Many global products are made locally using the global technology. Local raw materials and packaging have been developed to meet the same standards in terms of quality, safety and performance.Technology for the Airwick gel, Harpic with bleach is being taken from UK and USA respectively and has been manufactured in Uttarakhand successfully.

2.      Benefits derived as a result of the above:

Efforts from Research & Development and Scientific Services Group have yielded following benefits:

a) Substitution of imported raw materials with indigenous ones which helps to develop Indian raw material and packaging industry.

b)    Improved product quality and safety which meets global standards

c)     Developing products which will be cheaper than imported products.

d)    Quicker technology absorption and transfer from global R&D labs.

e)     Smooth transition of technologies and processes from pilot plants to factories for commercial production.

f)     Improved performance by way of better shelf life and product stability in local conditions.

g)    Acceptance of products by consumers based on their expectations in terms of performance and value for money.

3.      Details of imported technology:

The Company continues to bring in imported technologies for development of products in various categories.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earnings of the Company amounted to Rs. 10,308.35 Lakhs during the period under review, whereas, the outgo was Rs. 31,037.48 Lakhs mainly on account of raw and Packing Materials, Royalty, travelling expenses.