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Omkar Speciality Chemicals Ltd.

BSE: 533317 Sector: Industrials
NSE: OMKARCHEM ISIN Code: INE474L01016
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VOLUME 1061
52-Week high 120.05
52-Week low 16.05
P/E
Mkt Cap.(Rs cr) 34
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Omkar Speciality Chemicals Ltd. (OMKARCHEM) - Director Report

Company director report

TO THE MEMBERS OF OMKAR SPECIALITY CHEMICALS LIMITED

Your Directors are pleased to present their twelfth Annual Report on business andoperations of your company together with Audited Financial Statements for the FinancialYear ended on March 31 2017.

FINANCIAL HIGHLIGHTS:

(Rs in Lakhs)
Particulars 2016-17 2015-16
Total Revenue 34726.48 32781.75
Total expenditure 31527.89 29445.31
Profit Before Tax & Exceptional Items 3198.59 3336.44
Profit Before Tax (3122.79) 3336.44
Tax expenses (565.98) 1115.06
Profit After Tax (2556.82) 2221.39
Balance in Profit & Loss Account brought forward from Previous Year - 6035.61
Appropriations: -
a) Proposed Dividend - 308.67
b) tax on Dividend - 62.84
Transfer to General Reserve - -
Surplus carried to the next year's account - 7885.49

PERFORMANCE REVIEW: o Income

Your company's performance in the current Financial Year in terms of total incomestood at Rs 34726.48 Lakhs as compared to Rs 32781.75 Lakhs in the previous year.

o Profit / Loss Before Tax

Your Company's Profit Before Tax for the current year was Rs (3122.79) Lakhs asagainst Rs 3336.44 Lakhs in the previous year.

o Profit / Loss After Tax

Your Company's Profit After Tax for the current year was Rs (2556.82) Lakhs as againstRs 2221.39 Lakhs in the previous year. A detailed discussion of operations for the yearended March 31 2017 is provided in the Management Discussion and Analysis Report whichis presented in a separate section forming part of this Annual Report.

COMPOSITE SCHEME OF ARRANGEMENT

The Hon'ble n ational company Law tribunal (ncLt) Mumbai Bench has passed the order onApril 13 2017 sanctioning the composite Scheme of Arrangement involving Amalgamation ofDesh chemicals Private Limited (Desh) Lasa Laboratory Private Limited (Lasa) RishichemResearch Limited (Rishichem) Urdhwa chemicals company Private Limited (Urdhwa)collectively "the transferor companies" with omkar Speciality chemicalsLimited ("oScL / transferee company") and their respective shareholders andcreditors along with the Scheme of Demerger between omkar Speciality chemicals Limited("oScL / Demerged company") and Lasa Supergenerics Limited ("LasaSupergenerics / Resulting company") and their respective shareholders and creditorspursuant to Sections 391 to 394 of the companies Act 1956 and applicable provisions ofthe Companies Act 2013 and the certified copy of the same was received on April 27 2017.The Company has filed the copy of the order with the Registrar of the companies Mumbai onMay 02 2017 and the scheme became effective from the same date.

Pursuant to the Scheme Lasa Supergenerics Limited (Resulting company) without anyfurther application or deed issued and allotted 20578004 equity shares of Rs 10 eachat par to the Equity Share holder of the Company (Demerged company) in the ratio of 1(One) fully paid up equity share of Rs 1 each held in the company as on the record dateJune 13 2017. Also the Active Pharmaceutical ingredient (APi) segment of the company hasbeen demerged and transferred to Lasa Supergenerics Limited with effect from the AppointedDate i.e. April 01 2015

RIGHT ISSUE: the Board of Directors at its meeting held on June 16 2017 hadapproved Rights issue subject to receipt of necessary approvals from statutory regulatoryand other authorities as applicable in accordance with the provisions of the companies

Act 2013 Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 and other applicable laws. the Board of Directors alsoformed ‘Rights issues committee' to decide on issue terms rights entitlementfractional entitlements timing of issue appointment of various intermediaries or anyother matter incidental thereto and to make any applications to the regulatory authoritiesas may be required. At present we are ongoing with the process of due diligence bymerchant bankers appointed for the said issue.

SHARE CAPITAL:

The movement of Equity Capital is as under:

Particulars No. of Equity Shares
Equity Capital as on April 1 2016 20578004
increase/ Decrease during the year niL
Equity Capital as on March 31 2017 20578004

Your Company has only one class of Equity Shares and it has neither issued shares withdifferential rights as to dividend voting or otherwise nor issued shares (including sweatequity shares) to the employees or Directors of the Company under any

Scheme.

After the composite Scheme of Arrangement becoming effective the authorised sharecapital of Lasa Urdhwa Desh and Rishichem aggregating to Rs 97000000/- consisting of3350000 Equity shares of Rs 10/- each respectively 360000 Equity

Shares of Rs 100/- each and 2750000 Preference shares of Rs 10/- each was transferredto and combined with the authorised share capital of oScL.

No disclosure is required under Section 67(3)(c) of the Companies Act 2013("Act") in respect of voting rights not exercised directly by the employees orKey Managerial Personnel of the company as the provisions of the Section are notapplicable.

DIVIDEND:

Due to merger-demerger your company had incurred exceptional losses therefore nodividend has been proposed to be declared in the Financial Year 2016-17.

TRANSFER TO RESERVES:

Your company do not propose to transfer any amount to General Reserve out of the amountavailable for appropriations and an amount of Rs 5384.08 lakhs is proposed to be retainedin the Profit and Loss A/c.

FINANCIAL LIQUIDITY:

As at March 31 2017 your Company had liquid assets of Rs 1057.74 Lakhs as against Rs663.40 Lakhs at the previous year end.

Your company maintains sufficient cash reserves to meet its operations and strategicobjectives

DEPOSITS:

Your company has not accepted any deposits from public within the purview of Section 73& 74 of the Act read with companies (Acceptance of Deposits) Rules 2014 during thisFinancial Year and as such no amount of principal or interest was outstanding as of theBalance Sheet date. the company has no deposit which is not in compliance with theprovisions of chapter V of the Act and as the companies (Acceptance of Deposit) Rules2014.

PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS U/S 186:

Details of Loans Guarantees and investments covered under the provisions of Section186 of the Act and Schedule V of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 (hereinafter referred to as "SEBI Listing

Regulations 2015") are given in the notes to the Financial Statements.

RATING:

Brickwork a reputed rating agency has given the credit rating of BWR BBB rating forlong term and BWR A3 for short term loan facilities of the company.

MATERIAL CHANGES AND COMMITMENT: except as disclosed elsewhere in the Report therehave been no material changes in commitment between the end of Financial

Year to which this financial statements relates on the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review the Hon'ble national company Law tribunal Mumbai Benchhas passed the order on April 13 2017 sanctioning the Scheme of Arrangement between omkarSpeciality chemicals Limited and Lasa Laboratory Private Limited and Urdhwa chemicalscompany Private Limited and Rishichem Research Limited and Desh chemicals Private Limitedand Lasa Supergenerics Limited and their respective shareholders and creditors underSections 391 to 394 of the companies Act 1956 / Sections 230 and 232 of the companiesAct 2013.

INTERNAL FINANCIAL CONTROLS:

The details in respect of internal financial controls and their adequacy are includedin the Management Discussion & Analysis which forms part of this Report.

SUBSIDIARY COMPANIES: the company had 5 subsidiaries as on March 31 2017 howeverpursuant to sanction of the scheme of arrangement by Hon'ble ncLt all the subsidiaries areamalgamated in the company and thus cease to exist. there are no associate companies orjoint venture companies within the meaning of Section 2(6) of the Act. there has been nomaterial change in the nature of the business of the subsidiaries during the year.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: theparticulars as prescribed under Section 134(3)(m) of the Act read with Rule 8(3) of thecompanies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption Foreign exchange earnings and outgo is provided in Annexure A which formspart of this Report.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Sub-section (3) of Section 92 of the Act read with Sub-rule (1) of Rule 12 of thecompanies (Management and Administration) Rules 2014 is included in this report asAnnexure B and forms an integral part of the Directors' Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL: the Board of Directors had re-designatedMr. Subhash P. Mali as executive Director and members at the 11th AnnualGeneral Meeting held on September 26 2016 had approved the said re-designation. As onMarch 31 2017 the Board comprised of 12 (twelve) Directors out of which 7 (Seven) werenon-executive Directors of which 6 (six) Directors were independent Directors.

o Inductions on the recommendations of the nomination and Remunerationcommittee Mr. Rishikesh Herlekar has been re-designated as Whole-time Director on theBoard of the company for a period of 5 years w.e.f. May 20 2017. A separate proposalseeking approval of the members for the appointment of Mr. Rishikesh Herlekar as aWhole-time Director of your company has been incorporated in the notice of the ensuingAnnual General Meeting. the terms of his appointment are given in the explanatoryStatement to the notice of Annual General Meeting.

In the opinion of your Directors Mr. Rishikesh Herlekar has the requisitequalifications and experience which would be useful to your company and would enable himto contribute effectively in his capacity as Whole-time Director of your company. it istherefore considered prudent that your company should continue to avail the services ofMr. Rishikesh Herlekar and the Board recommends that the proposed resolution relating tothe appointment of Mr. Rishikesh Herlekar as the Whole-time Director of your company beapproved.

Ms. Bhavana Parmanand Shewakramani (Din: 05290563) was appointed as an AdditionalDirector in the capacity of independent Director of the company w.e.f. July 26 2017pursuant to Section 149 161(1) and other applicable provisions of Companies Act 2013.The detailed profile of Ms. Bhavana Parmanand Shewakramani is given as a part of Notice ofAnnual General Meeting. the Board recommends appointment of Ms. Bhavana ParmanandShewakramani as an

Independent Director of the Company for the period of five years commencing from July26 2017 till July 25 2022 in the ensuing Annual General Meeting of the company.

o Re-appointments in accordance with the provisions of Section 152 of the Actand the Articles of Association of the company Mr. Rishikesh P. Herlekar (Din: 05240009)and Mr. Prakash H. Rao (Din: 07239167) are liable to retire by rotation at the ensuingAnnual General Meeting and being eligible have offered themselves for re-appointment. Mr.Rishikesh P. Herlekar and Mr. Prakash H. Rao have confirmed their respective eligibilityand willingness to accept the office of the Directors of your Company if confirmed by themembers at the ensuing Annual General Meeting. Items seeking your approval on the abovere-appointments are included in the notice convening Annual General Meeting.

In the opinion of your Directors Mr. Rishikesh P. Herlekar and Mr. Prakash H. Rao haverequisite qualifications and experience and therefore your Directors recommend that theproposed resolutions relating to their re-appointment be passed.

o Resignations the following Directors have resigned from the company w.e.f. May02 2017:

Mr. omkar P. Herlekar- resigned as Whole-time Director

Mr. Subhash P. Mali- resigned as executive Director

Prof (Dr.) Suhas M. Rane- resigned as non-executive and independent Director

Mr. Vikas G. Gadre- resigned as non-executive and independent Director

Mr. Subhash n. Ghalke- resigned as non-executive and independent Director the Boardplaces on record its appreciation for the valuable contributions made by them during theirassociation with the company.

Mr. Pravin J. Agrawal resigned as Chief Financial Officer and Chief Investor RelationOfficer w.e.f. June 30 2017. The

Board places on record its appreciation for the services rendered by him during histenure with the company

DECLARATION BY INDEPENDENT DIRECTORS:

All independent Directors of the company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the SeBi Listing Regulations 2015. in the opinion of the Board they fulfillthe conditions of independence as specified in the Act and the Rules made there under andare independent of the management.

ANNUAL EVALUATION: the Act states that formal annual evaluation needs to be carriedout by the Board of its own performance and that of its committees and individualdirectors. Schedule iV (code for independent Directors) of the Act states that theperformance evaluation of independent Directors shall be done by the entire Board ofDirectors excluding the Director being evaluated. Your company had carried out an annualevaluation of performance of its Board and its committees and individual Directors. theevaluation process has been explained in detail in the corporate Governance Report whichforms a part of this Report.

BOARD MEETINGS HELD DURING THE YEAR:

During the year under review 4 (four) meetings of the Board of Directors were held asrequired under the Act and SEBI

Listing Regulations 2015. the details pertaining to the composition terms ofreference etc. of the Board of Directors of your company and the meetings thereof heldduring the Financial Year are given in the Report on corporate Governance section formingpart of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT: in terms of provisions of Section 134(3)(c)and Section 134(5) of the Act the Board of Directors of omkar Speciality chemicals

Limited to the best of their knowledge and ability in respect of the financial yearended March 31 2017 confirm that:

1. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; 2. they hadselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the Financial Year and of the Loss of the companyfor that period;

3. They had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; 4. they hadprepared the annual accounts on a going concern basis;

5. They had laid-down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

6. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

BOARD COMMITTEES: the Board of Directors has the following committees:

1. Audit committee

2. Stakeholders' Relationship committee 3. nomination and Remuneration committee 4.corporate Social Responsibility committee

5. Risk Management committee the Board of Directors at its meeting held on May 02 2016considered reconstitution of the committees of the Board. the revised composition of thecommittees of the Board is given elsewhere in this Annual Report. the details of thecommittees along with their composition number of meetings and attendance at the meetingsare provided in the corporate Governance Report.

POLICIES OF THE COMPANY:

Your company has posted the following documents on its websitewww.omkarchemicals.com:

1. nomination & Remuneration Policy

2. corporate Social Responsibility Policy

3. environment Health & Safety Policy

4. Risk Management Policy

5. Whistle Blower Policy

6. code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitiveinformation

7. Policy governing transactions with Related Parties & Material non-listedSubsidiaries

8. Anti-Sexual Harassment Policy

9. Board Diversity Policy

10. Policy on Materiality

11. Preservation of Documents Policy

12. Records & Archives Management Policy

13. code of internal Procedures And conduct For Regulating Monitoring And Reporting oftrading By insiders

NOMINATION & REMUNERATION POLICY OF THE COMPANY: the Board of Directors hasframed a policy which lays down a framework in relation to remuneration of Directors KeyManagerial Personnel and Senior Management of the company. this policy also lays downcriteria for selection and appointment of Board Members. the details of this policy areexplained in the corporate Governance Report.

RISK MANAGEMENT POLICY: the company has laid down procedures to inform the membersof the Board about the risk assessment and minimization procedures. these procedures havebeen periodically reviewed to ensure that the executive management controls the riskthrough properly defined framework.

WHISTLE BLOWER POLICY: the company has devised an effective Vigil Mechanism forstakeholders including Directors shareholders employees to report concerns aboutunethical behaviour actual or suspected fraud or violation of the company's code ofconduct or ethics policy to freely communicate their concerns about illegal or unethicalpractices. the policy has been explained in detail in the corporate Governance Reportwhich forms a part of this Report.

FAMILIARISATION PROGRAMMES FOR BOARD MEMBERS: the details in respect offamiliarisation programmes for Board members are included in the corporate Governancewhich forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY(CSR): in terms of Section 135 of the Act everycompany having net Worth of Rupees Five Hundred crore or more or

Turnover of Rupees One Thousand Crore or more or a Net Profit of Rupees Five Crore ormore during any Financial

Year shall constitute a corporate Social Responsibility committee of the Boardconsisting of three (3) or more Directors out of which at least one Director shall be anIndependent Director. All such companies are required to spend at least 2% of the averageNet Profits of their three (3) immediately preceding Financial Years on CSR relatedactivities. Accordingly your Company was required to spend Rs 51.08 Lakhs toward cSRactivities. the Board of Directors of the company has constituted a corporate SocialResponsibility ("cSR") committee. the company also has in place a cSR policy andthe same is available on the website of the company and can be accessed through web link:http://www.omkarchemicals. com/Policies/cSR-Policy_oScL.pdf. The details on CSR have beenbriefly discussed in Annexure C forming part of the Directors' Report.

TRANSACTIONS WITH RELATED PARTIES:

Related Party transactions that were entered into during the Financial Year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Act and the SeBi Listing Regulations 2015. company's majorRelated Party transactions are generally with its wholly owned subsidiaries. thesubsidiaries of the company cease to exist on account of composite Scheme of Arrangementsanctioned by Hon'ble ncLt on April 13 2017. there were no materially significant RelatedParty Transactions made by the Company during the year. The details of transactions withrelated parties are given for information under notes to the accounts of the Balance Sheetas at March 31 2017. the company has adopted a Related Party transactions Policy. thePolicy as approved by the Board is uploaded on the company's website and can be accessedthrough web link: http://www.omkarchemicals.com/Policies/RPt%20%20&%20Material%20non-listed%20Subsidiaries.pdf. Details of the transactions with Related Partiesare provided in the accompanying financial statements. There were no transactions duringthe year which would require to be reported in Form AOC-2.

POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE: the company has zero tolerancetowards sexual harassment at the workplace and towards this end has adopted Anti SexualHarassment Policy in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. the Policyaims to provide protection to employees at the workplace and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto. Allemployees (permanent contractual temporary trainees) are covered under the said policy.An internal complaints committee has also been set up to redress complaints received onsexual harassment. the company has not received any complaint of sexual harassment duringthe Financial Year 2016-17.

GRANT OF PATENT: the company's claim for process patent namely "PROCESS FORPRODUCING 2-HYDROXY-3 5-DIIODOBENZOIC ACID" having special applications inpharmaceutical industry has been accepted by the Patents Office Govt of India vide their Certificate No. 022/14528 Patent Registration No. 274805 dated August 10 2016

Further the company's claim process patent namely "PROCESS FOR PREPARATION OFHIGHER DERIVATIVES OF

-KETOESTER” has been accepted by the Patents Office Govt of India videtheir certificate No. 022/262 Patent Registration no. 277828 dated December 01 2016respectively. the total number of patents till date granted to the company stands at 4.

COMMISSIONING OF THE EXPANDED CAPACITY AT UNIT NO.1 IN BADLAPUR MAHARASHTRA: Yourcompany is pleased to announce the commissioning of the expanded capacity at its Unit no.1in Badlapur Maharashtra. the capacity was expanded from 600 MtPA to 900 MtPA involumetric terms. this facility has successfully started commercial production aftercompleting the requisite and necessary trial runs. The Company will be manufacturingadvanced intermediates having varied applications in pharmaceuticals.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS:

Your company recognizes its human resources as one of its prime & criticalresources. the relations between the Management and the Staff Members remained verycordial throughout the year under review. As on March 31 2017 the company had 112permanent employees at its manufacturing plants and administrative office. One (1)employee was employed throughout the year and in receipt of remuneration of Rs 60 Lakhsper annum or more. there was no employee who was employed for the part of the FinancialYear 2016-17 and was in receipt of remuneration of Rs 5 Lakhs per month or more. there wasno employee who was in receipt of remuneration in the year which was in excess of theremuneration of the Managing Director or Whole

Time Director. Disclosure pertaining to the remuneration and other details as requiredunder Section 197(12) of the Act and the Rules framed thereunder is enclosed as AnnexureD to the Board's Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to Regulation 34 read with Schedule V of the SeBi Listing Regulations2015 detailed review of operations performance and future outlook of the company iscovered under a separate Annexure to this report as Management's Discussion &Analysis.

REPORT ON CORPORATE GOVERNANCE:

A detailed Report on Corporate Governance pursuant to the requirements of SEBIListing Regulations forms part of the Annual Report. A Certificate from the Auditors ofthe Company M/s J.P.J Associates Chartered Accountants confirming compliance with theconditions of corporate Governance as stipulated under the aforesaid Schedule V (e) ofSeBi Listing Regulations also forms part of the Annual Report.

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBIListing Regulations 2015 is not applicable to your company for the Financial Year endingMarch 31 2017.

REGULATORY APPROVALS: the relevant regulations and policies as prescribed by theGovernment of india and other regulatory bodies have been duly complied with by yourcompany. our manufacturing facilities are monitored and approved by various regulatoryauthorities. Periodically the FDA MPcB Department of explosives etc. conducts routineaudits of all approved facilities.

AUDITORS AND AUDITOR'S REPORT:

1. Statutory Auditors:

As per Section 139 of the companies Act 2013 read with the companies (Audit andAuditors) Rules 2014 the term of M/s. J.P.J. Associates chartered Accountants Mumbai(Firm Reg. no.: 113012W) as the Statutory Auditors of the company retire at the conclusionof the ensuing Annual General Meeting of the company. the Board of Directors of thecompany at their meeting held on August 24 2017 on the recommendation of the Auditcommittee have made its recommendation for appointment of M/s Desai Saksena &Associates chartered Accountants (Firm Registration no- FRn 102358W) as the StatutoryAuditors of the company by the Members at the 12th Annual General Meeting of the companyfor an initial term of 5 years. Accordingly a resolution proposing appointment of

M/s Desai Saksena & Associates Chartered Accountants as the Statutory Auditors ofthe Company for a term of five consecutive years i.e. from the conclusion of 12th AnnualGeneral Meeting till the conclusion of 17th Annual General Meeting of the company pursuantto Section 139 of the companies Act 2013 forms part of the notice of the 12th

Annual General Meeting of the Company. The Company has received their written consentand a certificate that they satisfy the criteria provided under Section 141 of the Act andthat the appointment if made shall be in accordance with the applicable provisions ofthe Act and rules framed thereunder. the Report given by M/s. J.P.J. Associates StatutoryAuditors on the financial statement of the Company for the Financial Year ended on March31 2017 is part of the Annual Report. There has been no qualification reservation oradverse remark or disclaimer in their Report.

During the year under review the Auditors had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

M/s. J.P.J. Associates over many years have successfully met the challenge that thesize and scale of the company's operations pose for auditors and have maintained thehighest level of governance ethical standards rigour and quality in their audit. theBoard place on record its appreciation for the services rendered by M/s. J.P.J. Associatesas the Statutory Auditors of the company.

2. Cost Auditors:

As per the requirement of Central Government and pursuant to Section 148 of the Actread with the Companies (Cost

Records and Audit) Rules 2014 as amended from time to time your company has beencarrying out audit of cost records every year. the Board of Directors on therecommendation of Audit committee has appointed M/s n. Ritesh & Associates costAccountants Mumbai (Firm Regn. no.: 100675) as the cost Auditor to audit the cost recordsof the company for Financial Year 2017-18.

The Company is seeking the ratification of the Shareholders for the appointment of M/sN. Ritesh & Associates Cost

Auditors Mumbai (Firm Regn. no.: 100675) as the cost Accountant of the company for theFinancial Year ending March 31 2018 vide item no. 8 of the notice of AGM.

3. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and the companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors of thecompany had appointed M/s nilesh A. Pradhan & co. Practicing company Secretary (c.P.no.: 3659) to undertake the Secretarial Audit of the company for the year ended March 312017. the Secretarial Audit Report for the Financial Year ended March 31 2017 has beenannexed to this Report as Annexure e and forms an integral part of this Report.

In connection with the auditors observation in the Secretarial Audit Report it isclarified that: observation no. 1 and 2: your company has noted the same for propercompliance.

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation to company's esteemed clientsvendors investors business associates and bankers for their continuous support to thecompany. the Directors also thank the central & State Governments Governments ofvarious countries customs & excise Departments Ministry of commerce Ministry ofFinance Ministry of external Affairs Ministry of corporate Affairs Maharashtraindustrial Development corporation and other Government Agencies for their positivesupport and look forward to their continued support in the future.

Your Directors also place on record their appreciation for the contribution made by theemployees at all levels but for whose hard work and support your company's achievementswould not have been possible.

For and On behalf of the Board
For Omkar Speciality Chemicals Limited
Sd/-
Pravin S. Herlekar
Date: August 24 2017 Chairman & Managing Director
Place: Badlapur (Din: 00525610)

ANNEXURE A

REPORT ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

As on the Financial Year ended on March 31 2017

[Pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014]

CONSERVATION OF ENERGY:

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY:

Power and Fuel Consumption Current Year 2016-17 Previous Year 2015-16
1. Electricity
a) Purchased
Unit (kwh) 1099115 1251417
Total Amount (Rs) 9672766 12794225
Rate / Unit (per kwh) 8.80 10.22
B) own Generation
(i) Through diesel generator
Quantity (ltrs) 9900 14845
Units generated 7920 11876
Total Amount (Rs) 568535 879617
Units per ltr. Of diesel oil 1.25 1.25
Cost / Unit 57.42 59.25
(ii) Through steam turbine/generator
Units - -
Total Amount (Rs) - -
Units per ltr. Of fuel oil/gas - -
Cost/unit - -
2. Coal
Quantity (tonnes) 532 293
Total cost 2410731 1408208
Average rate 4.52 4.80
3. Light Diesel Oil
Quantity (ltrs.) 36416 9261
Total Amount (Rs) 1289490 347302
Average Rate 35.41 37.50
4. Furnace Oil
Quantity (ltrs.) 118120 59826
Total Amount (Rs) 3569586 1729666
Average Rate 30.22 28.91
5. Others/internal generation (please give details)
Quantity - -
Total cost - -
Rate/unit - -

STEPS TAKEN OR IMPACT ON CONSERVATION OF ENERGY:

• Installation of Natural draft cooling towers in two units. This does not requirefan which has resulted in saving of electrical energy

• PVC fills of FRP cooling towers are cleaned periodically & replaced damagedones as and when required to maintain the efficient working of cooling towers.

• Use of energy efficient screw compressor helped in reducing the cost ofcompressed air.

• Regular arresting and monitoring of steam water brine fuel and compressed airleakages.

• Regular checking and maintenance of hot and cold insulation to avoid loss ofheat energy.

• Water harvesting in units has helped in water conservation.

• Installation of Turbo ventilators wherever required helped in reducing theelectrical consumption for ventilation. Use of APFC and parallel switching of capacitorsto maintain power factor to near unity to avail maximum possible rebate in electricitybills and reduce electrical consumption.

• Regular preventive maintenance of DG sets to maintain efficient working.

• Regular cleaning of cooling tower ponds.

• Periodic cleaning of condensers chillers steam heating coils by externalchemicals to maintain efficient heat transfer.

• Use of soot cleaning agent to maintain clean boiler and thermic fluid heatercoils.

• Annual servicing of power transformer to maintain efficient working.

• Periodic cleaning and replacement of filters of AHUs as and when required.

• Installation of energy efficient spin flash drier.

• Use of air curtains in GMP area to avoid loss of air conditioning.

• Recycling of Steam condensate from equipment's has helped in cutting down theloss of water and heat energy.

• Use of VFDs wherever possible to optimize power consumption of equipment's.

• Installation of energy efficient graphite condensers.

THE CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENTS:

Rs 50 lakhs have been expended towards installation of energy conservation equipments.

THE STEPS TAKEN BY THE COMPANY FOR UTILIZING ALTERNATE SOURCES OF ENERGY: thecompany has started utilizing coal and Furnace oil as an alternate source of energy toLight Diesel oil for undercutting the cost of manufacturing.

TECHNOLOGY ABSORPTION:

EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION: the company's philosophy right from itsinception has always remained focused on in-house product development and launching thesame for domestic or overseas market. the company is pioneer in most of the products beingcurrently manufactured by it. the R&D centre of the company not only works ondevelopment of new products but is also focused on continuous upgradation of processes forimproving in quality and costing. The cost reduction is brought about by improving processefficiency use of innovative catalysts savings in utilities and energy cost. the companyalso focuses on enhancing the value addition by way of backward and forward integrations.the manufacturing facilities at all locations are designed in such a manner that there isa total fungibility for manufacturing various products as per the market requirements.This leads to a reasonably high level of capacity utilization.

BENEFITS DERIVED: the above efforts help the company to achieve followingobjectives:

• Cost Reduction

• Expanding the product base

• Widening the customer base

• Quality improvements

• Increased customer satisfaction.

EXPENDITURE ON R&D:

(Rs in Lakhs)
Particulars 2016-17 2015-16
Capital expenditure 16.12 13.02
Recurring expenditure 450.16 286.65
Total 466.28 299.67
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Foreign exchange earned 6467.85 5166.08
Foreign exchange Used 5621.04 1090.59

ANNEXURE D

DETAILS OF THE REMUNERATION OF DIRECTORS KMP'S AND EMPLOYEES

[Pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

1. The percentage increase in remuneration of each Director Chief FinancialOfficer and Company Secretary during the Financial Year 2016-17 ratio of the remunerationof each Director to the median remuneration of the employees of the Company for theFinancial Year 2016-17 and the comparison of remuneration of each Key Managerial Personnel(KMP) against the Performance of the Company are as under: (explanation:(i)theexpression "median" means the numerical value separating the higher half of thepopulation from the lower half and the median of a finite list of numbers may be found byarranging all the observations from lowest value to highest value and picking the middleone; (ii)if there is even number of observations the median shall be average ofthe two middle values.)

Sr. No. Name of Director/ KMP and Designation Remuneration of Director/ KMP for Financial Year 2016-17 (In Rs) % increase in Remuneration in the Financial Year 2016-17 Ratio of Remuneration of each Director/ KMP to median remuneration of employees
1 Mr. Pravin S. Herlekar chairman & Managing Director 6000000 0 22.31
2 Mr. Omkar P. Herlekar # Whole time Director 1800000 0 6.69
3 Mr. Rishikesh P. Herlekar @ executive Director 674400 0 2.50
4 Adv. Sanjivani S. Patare non-executive and independent Director 60000 - 0.22
5 Prof. (Dr.) Suhas M. Rane # non-executive and independent Director 77500 - 0.29
6 Dr. Vikas n. telvekar non-executive and independent Director 47500 - 0.18
7 Mr. Subhash P. Mali # executive Director 10000 - 0.03
8 cA Sitendu K. Sharma non-executive and independent Director 100000 - 0.37
9 Mr. Vikas G. Gadre # non-executive and independent Director 100000 - 0.37
10 Mr. Subhash N. Ghalke # non-executive and independent Director 60000 - 0.22
11 cA Laxmikant R. Kabra non-executive and non-independent Director 90000 - 0.33
12 Mr. Prakash H. Rao executive Director 1295280 14.29 4.81
13 Mr. Pravin J. Agrawal $ Chief Financial Officer 2347200 - 8.72
14 CS Sunny D. Pagare company Secretary 872040 8.99 3.24

NOTES:

1. Remuneration includes sitting fees paid to non-executive Directors.

2. # Resigned w.e.f. May 02 2017

3. @ Re-designated as a Whole time Director w.e.f. May 20 2017 4. $ Resigned w.e.f.June 30 2017

2. The numbers of permanent employees on the rolls of the Company: 112 (Ason March 31 2017)

3. The percentage increase in the median remuneration of employees in thefinancial year:22.49%

4. The explanation on the relationship between average increase in remunerationand Company performance: the change in remuneration is not solely based on the companyperformance but also includes various other factors like individual performanceexperience skill sets academic background industry trends economic situation andfuture growth prospects etc. All these factors are considered for revision ofremuneration.

5. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company: the increase in remuneration is not solely based on thecompany performance but also includes various other factors like individual performanceexperience skill sets academic background industry trends economic situation andfuture growth prospects etc. All these factors are considered by Board/ nomination andRemuneration committee.

6. Average percentile increase already made in the salaries of the employeesother than the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration: Percentageincrease in salaries of non-managerial personnel at 50th Percentile is 21.96.Percentage increase in salaries of managerial personnel at 50th Percentile is5.52. the change in remuneration is not solely based on the company performance but alsoincludes various other factors like individual performance experience skill setsacademic background industry trends economic situation and future growth prospects etc.besides the company performance.

7. The key parameters for any variable component of remuneration availed by theDirectors: not Applicable

8. The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year: not Applicable

9. Variations in the market capitalisation of the Company price earningsratioasattheclosingdateofthecurrentfinancialyear and increase or decrease in the marketquotations of the shares of the Company in comparison previousfinancial to the rate atwhich the Company came out with the last public offer:

1. Market capitalization & Price earnings Ratio details are as under:

Particulars As on March 31 2017 As on March 31 2016 Increase/ Decrease (%)
Market Capitalization (Rs in crore) 314.95 359.08 (12.29)
Price Earnings Ratio (12.31) 16.16 (176.18)

2. Percentage increase in the market quotations over the last Public Offer:

The closing price of Company's Equity Share as on March 31 2017 was Rs 153.05 (nSe)& Rs 152.45 (BSe) respectively representing increase of 56.17 % (nSe) & 55.56 %(BSe) respectively increase over the iPo price.

10. Affirmation that the remuneration is as per the remuneration policy of the Company:Itis hereby affirmed that the Remuneration paid to the Directors is as per the RemunerationPolicy of the company.

DETAILS OF THE REMUNERATION OF DIRECTORS KMP'S AND EMPLOYEES

Statement pursuant to Section 197(12) of the companies Act 2013 read with Rule 5(2) ofthe companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 for theyear ended on March 31 2017

1. Details of employees employed throughout the year and in receipt of remunerationat the rate of not less than Rs 6000000/- p.a.:

Sr. No. Name Age in Year (Approx.) Designation Remuneration Received Nature of Employment Qualification Date of Com- mencement of Employment Experience in Year (Approx.) Last employment held and designation % of Equity Shares held by the em- ployee in the Company* Relation with any Director of the Company
Gross Salary (Rs In Lakhs) Commis- sion Total Re- munera- tion
1 Mr. Pravin S. Herlekar * 67 years Chairman & Managing Director 60.00 0 60.00 Permanent B.tech (chemical engineering) Post Graduate in Management Studies 24-02-2005 44 years omkar chemicals proprietary concern 11.13 % Mr. Pravin Herlekar is Father of Mr. omkar Herlekar and Mr. Rishikesh Herlekar.

2. Details of employees employed for a part of the financial year and in receipt ofremuneration for any part of the year at a rate which in aggregate was not less thanfive lakhs rupees per month:n one

3. Details of employees employed throughout the financial year or part thereof andwas in receipt of remuneration in the year and is in excess of the remuneration of theManaging Director or Whole Time Director: none

NOTES:

1. Gross salary comprises of salary and allowances.

2. * Given as on 31-03-2017

For and On behalf of the Board of Directors of Omkar Speciality Chemicals Limited

Sd/-
Date: August 24 2017 Pravin S. Herlekar
Place: Badlapur Chairman & Managing Director
(Din:00525610)

ANNEXURE –I

to

THE MEMBERS

OMKAR SPECIALITY CHEMICALS LIMITED

B-34 M.i.D.c. Badlapur (east) Badlapur -421503. My report of even date is to be readalong with this letter

1. Maintenance of Secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit. 2. i have followed the audit practices and processes as were appropriate toobtain reasonable assurance about the correctness of the contents of the Secretarialrecords. The verification was done on test basis to ensure that correct facts arereflected in secretarial records. i believed that the processes and practices that ifollowed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company. 4. Where ever required I have obtained the Managementrepresentation about the compliance of laws rules and regulations and happening of eventsetc. 5. the compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis. 6. The Secretarial Audit report is neitheran assurance as to the future viability of the company nor of the efficacy oreffectiveness with which the management has conducted the affairs of the company.

For Nilesh A.Pradhan & Co
Practicing company Secretaries
Nilesh A.Pradhan
Proprietor
Place: Mumbai FcS: 5445
Date: August 24 2017 coP: 3659