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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Nitta Gelatin India Ltd.

Mar 31, 2025

As we enter the 50th year of operations, your Directors have pleasure in presenting the 49th Annual Report and the audited financial statements (Standalone and Consolidated) of your Company for the year ended 31st March, 2025.

The Statement of Accounts has been prepared in accordance with the Indian Accounting Standards (Ind AS) which have become applicable to the Company w.e.f. 01st April, 2017 as per the Rules laid down in this regard.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2025 was Rs.8024.44 Lakhs comprising of 4,00,00,000 Equity Shares of Rs.10/- each totaling to Rs.4000.00 Lakhs, 929,412 Optionally Convertible NonCumulative Preference Shares (OCPS) of Rs. 170/- each totaling to Rs.1580.00 Lakhs, 2,00,00,000 Optionally Convertible Non- Cumulative Preference Shares of Rs.10/- each totaling to Rs. 2000.00 Lakhs and 44,44,444 Redeemable Preference Shares of Rs.10/- each totaling to Rs.444.44 Lakhs.

CONSISTENT OPERATING PERFORMANCE

Despite price pressures on the products, your Company was able to match last year''s financial performance, when it recorded the highest profit in its history. This is backed by the equity enjoyed by the Company amongst its customers for its high quality and strong internal processes.

The gross revenue from the operations of your Company during the year under review was Rs. 527.44 Crores as compared to Rs. 472.97 Crores in the previous year. Profit before tax was Rs. 109.68 Crores as against Rs. 109.88 Crores in the previous year. There was a decrease in sales realisation per unit of Gelatin in line with the global prices. This downward trend is due to the emergence of hide as a cheaper alternative for gelatin preparation. While the Company could retain its gelatin sales in terms of volume, it was able to record significant growth in Collagen Peptide segment. The average realisation of Company''s by-product Di-Calcium Phosphate has improved due to better demand from the poultry sector. In line with the crash of international crushed bone prices, the cost of the Company''s principal raw material -domestically procured Crushed Bone has also been showing a declining trend from the 3rd quarter of the Financial Year 2024-25. Hydrochloric acid, another raw material has seen stable prices during the year under review.

Economic Scenario - Domestic and Global Market

Your Company''s products (Gelatin and Collagen Peptide)

primarily cater to pharmaceutical and nutraceutical segments. The Indian capsule market (hard/soft gelatin capsules) is positioned for substantial growth due to related market growth, favourable economic conditions, health trends, technological advancements and government initiatives. As consumer preferences evolve and the market adapts to emerging challenges and opportunities, the segment can expect continued expansion and innovation in the years to come.

India, known as the "Pharmacy of the World for generic drugs", is also strongly emerging as the âCapital for nutraceutical/ wellness productsâ. The expanding export market for capsules and other pharmaceutical formulations, along with rising spending on nutraceutical and wellness products in India and abroad, significantly drives the market growth of Gelatin and Collagen Peptides for its varied applications.

E-commerce expansion

E-commerce growth enables Companies to reach a wider audience, especially in semi-urban and rural areas where access to retail pharmacies is limited.

Your Company''s strategy for promoting B2C sales is based on two pillars viz, own brand-Gelixer and supplies to brand owners by way of bulk sales. Gelixer is now available on popular e- commerce platforms such as Amazon, Flipkart etc. The Company also supplies its Collagen Peptide to reputed brand owners in India and abroad. The rise of popularity/ usage of online shopping platforms has made health products more accessible to consumers.

Plant utilization

Your Company was able to run its Gelatin plant at its full capacity during the year 2024-25, despite headwinds in the global gelatin market by suitably rearranging the customer and product mix. The Company was able to maintain its competitiveness by making focused efforts to streamline operations, reduce costs and maximize output.

The Company was also able to significantly improve the operation of its Collagen Peptide plant to achieve almost full capacity production during the fiscal year. This was possible because of the successful efforts to find new markets and customers outside India. The Company has also been able to control its costs of operation of the Collagen Peptide plant which has helped in maintaining its competitiveness in global market. The 550 metric ton expansion project is on schedule and is expected to be commissioned in the first quarter of Financial Year 202526.

The Board of Directors of the Company at its meeting held on 10^th February, 2025 has approved the expansion of Gelatin capacity by 1500 MT per year from the existing capacity of 4500 MT per year to tap the opportunities in the growing Gelatin market especially in the context of rising

preference for hard / soft capsules key delivery formats in

the pharmaceutical and nutraceutical industries.

Operations

(i) The products of your Company continued to enjoy robust market demand during the year under review. The entire sale of Ossein/Limed Ossein, 43% of the total sale of Gelatin and 58% of Collagen Peptide was through exports. Your Company has arrangement with its overseas Promoter, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing its customers in a proactive manner in line with the global standards of NITTA Group. The Company has taken steps to further improve the demand for Collagen Peptide by venturing into new markets and segments.

(ii) Overall raw material price trend was favourable in the year 2024-25 as compared to 2023-24. The Company has also successfully developed alternate cost-effective raw material vendors and sources in 2024-25 which is expected to aid the profitability in the coming years.

(iii) Following the suspension of operations at the Subsidiary Company viz, Bamni Proteins Limited (BPL), as per the Orders of Maharashtra State Pollution Control Board (MPCB), the supplies to NGI, Japan for Ossein and Limed Ossein was sustained through dispatches from Reva Division, Gujarat and Ossein Plant at Koratty.

(iv) Despite the weakening of Rupee against USD during 2024-25 as compared to 2023-24, prices of Limed Ossein, Gelatin and Bovine Peptide dropped by 3 %, 5 % and 1 % respectively. The price of Fish Collagen Peptide increased by 7 % due to customer additions. Price negotiations with raw material suppliers and finished product customers are carried out on a regular basis to protect the margins.

(v) The Company continued its pursuit of remaining cost competitive by running special campaigns amongst its employees for innovative ideas for sustained cost reduction and efficiency improvement. The business and operational excellence initiatives continued to pay rich dividends.

(vi) There was an increase in power and fuel cost in the Divisions of the Company due to higher production levels. However, specific consumption of power and fuel were lower due to economies of scale and various cost reduction measures adopted in all the Divisions of the Company. During the year under review, the Company has installed and commissioned a solar plant of 357 KWA at Reva Division. The price of LNG, firewood and furnace oil has increased in all the Divisions of the Company during the year. The price of coal has dropped during the year under review.

(vii) The Company automated and integrated the weighbridge operations with SAP in all its Divisions for better internal control. The various automation measures have been carried out in areas like furnace oil pumping, biowaste drier monitoring, acid flow, DCP pumping for reaction tanks, water treatment, lime charging, ETP screw pump operations, acid tank level monitoring etc.

The Company has also undertaken various digitalization initiatives in the areas such as gate entry management, direct data fetching from instruments, batch traceability, vendor portal development, HRMS etc.

(viii) The raw material warehousing operations of the Company was streamlined and optimized for better efficiency. Freight and shipping costs has increased substantially during the year owing to geopolitical tensions.

(ix) The Company could reduce its finance cost by effectively leveraging low cost foreign currency loans and by negotiating with the Banks for competitive rates for its working capital requirements.

Against this backdrop, your Company exercised close monitoring and strict control over each significant element of cost and maintained its operating profits, notwithstanding the drop-in Gelatin prices.

(x) The Pollution Control Board has renewed the validity of the Consent to Operate upto 30th June 2028 for Ossein and Gelatin Divisions. Reva Division''s Consent to Operate issued by the Gujarat State Pollution Control Board has been renewed and is valid upto 23rd May 2026.

Raw Material scenario

The availability of Crushed Bone, which is the major raw material of the Company has been fluctuating during the year. Particularly in the first half of the year, there was a significant reduction in availability which has since improved from Q2 of the Financial Year under review. Owing to the emergence of Hide as a competitive raw material for Gelatin manufacturing, the import price of Gelbone (premium quality Crushed Bone) reduced significantly during the second half of the year. Your Company has utilised this opportunity and has imported gelbone. This has helped your Company to reduce its dependency solely on domestic raw materials. The Company was able to maintain adequate levels of raw material inventory at all its manufacturing locations. Sustainability

Sustainability is embedded in the core of your Company''s vision, mission and values. It''s sustainability practices are guided by the triple bottom line approach. It aims to build a sustainable business model focusing on people, planet and profit and thus creating lasting value for all its

FINANCIAL HIGHLIGHTS

The operations of the Company for the year 2024-25 has resulted in a pre-tax profit of Rs. 109.68 Crores (as against a pre-tax profit of Rs. 109.88 Crores during the year 2023-24). Details are as under:

(Amount in '' Crore)
Particulars	For the year ended 31 March, 2025	For the year ended 31 March, 2024
Sales (including export incentives and net of GST)	527.45	472.97
Other Income	9.97	16.67
TOTAL	537.42	489.64
Net Profit before Depreciation	110.90	123.96
Exceptional item	12.01	--
Net Profit after exceptional item before depreciation	122.91	123.96
Deducting therefrom:
Depreciation	13.23	14.08
Provision for Tax
- Current Tax	25.55	24.25
- Income Tax relating to earlier years	0.12	0.45
- Deferred Tax	1.80	2.70
Profit after Tax from continuing operations	82.21	82.48
Other comprehensive income/(loss) net of tax	(0.02)	-
Total comprehensive profit for the year	82.19	82.48
Profit brought forward from previous year	147.97	72.29
Current Year''s profit available for appropriation	82.21	82.48
Appropriations:
Final dividend on Equity Shares - paid	5.45	6.80
Total	5.45	6.80
Balance profit carried forward to next year	224.73	147.97
Earnings per share (?)
Basic	90.54	90.85
Diluted	90.54	90.85

stakeholders.

The Company will continue to be increasingly focused on sustainable and socially responsible corporate behavior in everything it does. Its approach is mainly centered around the following pillars:- Environmental Sustainability

Focus Area - Reduction in consumption of water, solid waste, power, fuel and plastic.

- People Sustainability

Focus Area - Employees'' safety, health, development, engagement, rewards and recognition.

- Social Sustainability

Focus Area - Corporate Social Responsibility (CSR): Education, training, health, Women empowerment, sports, agriculture and waste management.

- Economic sustainability

Focus Area - Cost reduction, supply chain efficiency

and growth initiatives which includes capacity additions for Gelatin and Collagen Peptide.

The Company''s vision is to set a benchmark in the Indian Gelatin Industryâand beyondâfor World-class sustainability practices. Gelatin and Collagen Peptides are derived from by-products/ waste products of the meat and farmed fish industries, both of which utilize renewable and well-managed resources. These products are pure, natural proteins, free from preservatives and additives, aligning with clean-label standards and supporting consumer demands for healthy, sustainable foods.

As part of the circular economy, Gelatin contributes positively to sustainability by efficiently utilizing industry waste products. Sustainability is embedded in every aspect of its businessâfrom product innovation and market expansion to capital investment and operational management.

DIVIDEND

Considering the Company''s performance, the Board has recommended a dividend of Rs. 8/- per share i.e. 80 % of the face value of Rs. 10/- per share on the Equity Capital for the year ended 31st March, 2025 (including special dividend of Rs. 2/-per share (20%) to commemorate the Golden jubilee of the Company). The Board has also recommended a dividend @ 7.65063% on the 44,44,444 Redeemable Preference Shares of the face value of Rs. 10/- each for the year ended 31st March, 2025. This dividend payment is out of the current year profits of the Company and is subject to approval of the members at the ensuing Annual General Meeting of the Company.

The total outflow on account of dividend will be Rs 760.33 Lakhs (Rs 578.75 Lakhs in the financial year 2023-24) comprising of Rs. 34 Lakhs on Preference Shares (Rs. 34 Lakhs in the financial year 2023-24) and Rs. 726.33 Lakhs on Equity Shares (Rs. 544.75 Lakhs in the financial year 2023-24).

During the year, unclaimed dividend of Rs.2,44,231/-pertaining to the year 2017- 18 shall be transferred to the Investor Education & Protection Fund after giving due notice to the members.

RESERVES

The Company has transferred an amount of Rs. 1,580.00 Lakhs as Capital Redemption Reserve upon repayment of the Convertible Preference Shares during an earlier year as part of statutory requirements of the Companies Act, 2013. The Company has recognized capital reserves amounting to Rs. 2,750.62 Lakhs on account of the merger (including deferred tax asset on the unabsorbed business loss of erstwhile Reva Proteins Limited carried over from previous years as per tax books for an amount of Rs. 1,609 Lakhs and other appropriate adjustments.

The reserves as on 31.03.2025 comprise of Security Premium Reserve of Rs. 2,895.90 Lakhs, equity contribution on External Commercial Borrowings and Preference Share Capital Rs. 984.43 Lakhs, Special Export Reserve of Rs. 79.00 Lakhs, General Reserve of Rs. 7,836.64 Lakhs, Capital Redemption Reserve of Rs. 1,580 Lakhs, Retained earnings of Rs. 22472.82 Lakhs, Capital Reserve of Rs. 2,750.62 Lakhs, Hedge Loss of Rs. 25.42 Lakhs and other comprehensive loss of Rs. 246.57 Lakhs aggregating to Rs. 38327.42 Lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Details in respect of other loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes on accounts for the financial year ended 31st March, 2025 and such loans, guarantees and investments are within the limits prescribed under that Section.

CREDIT RATING

The Rating agency CRISIL has revised the outlook on the long term bank facilities of the Company to "CRISIL A-/ Stable" (Removed from Rating watch with Developing Implications; Rating Re-affirmed) from âCRISIL A-/ Watch Developing" (Continues on Rating Watch with Developing Implications) The short- term rating has been revised to "CRISIL A2 " (Removed from Rating Watch with Developing Implications Rating Re-affirmed) from CRISIL A2 /Watch Developing (Continues on Rating Watch with Developing Implications). This is consequent to stoppage of operations in the Subsidiary Company, Bamni Proteins Ltd. and the subsequent restart Order issued by the Maharashtra State Pollution Control Board.

AWARDS & ACCOLADES

During the year, the Company received various recognitions like:

a) MKK Nayar Productivity Award 2024 for the Second-Best Productivity Performance in the category of Large Industries.

b) Team from Ossein Division won Gold recognition in 7th CII IQ National Safety Practice competition.

c) Team from Ossein Division (OD) participated in CII''s National Technology Competition & won the âGoldâ category award under Manufacturing.

d) Ossein Division & Gelatin Division have won the Gold recognition in SEEM National Energy Management Award 2023, Category: Industry & Sector: Chemicals.

e) Team from Gelatin Division has won the Gold Category award & Ossein Division won Silver category award in 50th National level kaizen competition conducted by CII.

f) Gold Category Recognition from CII for Business Excellence maturity assessment programme-2024.

g) Ossein Division and Gelatin Division have acquired the Excellence in Operation Technology (EOT) Award from CII for the continuous improvements in TPM.

i) Ossein Division won Sreshta Suraksha Puraskar-2025 (1st Prize) from National Safety Council, Kerala Chapter.

j) The Company won KMA CSR Award -2025, under the Health and Environment categories.

The following prestigious certifications are retained by your Company :-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division.

(b) Drugs manufacturing license from Drugs Controller, Govt. of Kerala.

(d) HACCP Certificate for Ossein Division for food safety.

(e) ISO 9001: 2015 for Quality Management System of the Company.

(f) FSSC 22000 V.6 Certification for Food Safety Management System.

(g) FSSAI License for manufacturing, import/export/ retail/e-commerce of Gelatin, Collagen Peptide andCollagen Peptide retail products.

(h) WHO-GMP Certification as per World Health Organization/Codex for manufacture of Gelatin & Collagen Peptide.

(i) USDMF for Gelatin gelling Grade & Non-gelling Grade.

(j) Chinese DMF for Gelatin.

(k) Halal (MUI, IFANCA & JUM)/Kosher Certification for Gelatin and Collagen Peptide - JUM Halal for Ossein & Di-Calcium Phosphate.

(l) ISO:IEC 17025:2024 NABL Accreditation for inhouse laboratory of Gelatin Division.

(m) ISO 14001:2015 for Environment Management System.

(n) ISO 45001:2018 Certification for Occupational, Health and Safety Standards.

(o) ISO 50001:2018 Certification for Energy management system.

(p) Gelatin Division & Ossein Division passed the EOT certification in TPM -2024.

(q) Ossein Division received Gold prize in 7th National CII-IQ Safety practice competition.

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations and effective management of the related issues is an integral part of the Company''s philosophy:

1. Health and Safety

The Company is committed to protecting the health and safety of its employees. The Company has a three-tier safety committee system including an Apex Safety Committee chaired by the Managing Director. In addition to the Company''s Head for Health, Safety and Environment, each plant has a Safety Officer and a Safety Committee, including workmen and executive representatives. The Committee meets regularly to review issues related to occupational safety and employee health. Regular health checkup of the employees is carried out through tie-up with reputed hospitals. Various training programs and Safety campaigns are conducted at the plant on health and safety topics including emergency preparedness, work safety, first aid, etc. Both Ossein and Gelatin factories have received the ISO 45001-2018 & ISO 14001-2015 certi fication, which is a testimony to the Company''s commitment in this area.

The following were the major activities carried out during the year:

â¢ Various training & campaign programs were

conducted to improve Occupational Health & Safety Awareness.

â¢ Surveillance audit of ISO 45001-2018 completed at both Ossein Division (OD) and Gelatin Division (GD).

â¢ 90% employees covered in Occupational Health & Safety training conducted by Factories and Boilers Dept.- Mobile training unit âSuraksha Radhamâ

â¢ Fire license renewed at Ossein and Gelatin Divisions.

â¢ Safety day/week celebrations were held at Ossein, Reva and Gelatin Divisions. Various programs, demonstrations and competitions were conducted.

â¢ Mock drills were conducted for equipping the employees for handling emergencies at Ossein, Reva and Gelatin Divisions. Mock drills conducted covering Electrical Flashover, Fire, First aid & Chemical spillage scenarios.

â¢ As part of the TPM (SHE- Safety, Health, Environment pillars), various safety improvement initiatives and their reviews were conducted in all the divisions.

â¢ In order to enhance the Health, Safety & Environment at workplace, various items introduced such as Automated External Defibrillator (AED), Secondary spill containment pallet, Spill kit, Flame proof cabinet, Fire extinguisher ball, Mobile scaffolding with stairway, Foam trolley etc.

2. Environment

The Company continuously endeavors to enhance Environmental Management Systems and demonstrates its commitment for protecting environment in all its activities. The factories of the Company are equipped with modern Effluent Treatment Plants for treating and discharging treated water with parameters well within the norms laid down by the respective State Pollution Control Boards. The emissions from the boilers and generator stacks are regularly monitored for compliance. Solid waste from operations is collected in a secure manner and disposed off in authorized locations. Ambient air quality is monitored on a regular basis and ensured for its compliance. The Company''s Effluent Treatment Plant operations have been reinforced with the introduction of new equipment and technologies. Various energy-saving measures and efficiency improvement activities were taken up during the year that reduced the specific consumption of fuels compared to the previous years. Action plans have been drawn up to reduce the consumption of water in the coming years. In the case of solid waste reduction, the Company follows a structured action plan. A polymer house-based facility using solar energy has been developed at the

Company''s Gelatin Division for drying the biomass waste emanating out of the operations leading to lower operating costs and carbon print. With a view to reducing the greenhouse effect, the Company is focusing on greenery development at all its locations.

Further discussions are carried out to reduce the moisture content of wet biomass waste in a cost-effective manner to reduce the impact of the same in the overall environment.

The following were some of the other related activities:

â¢ Successfully completed Surveillance audit of ISO 14001-2015 in Gelatin Division & Ossein Division.

â¢ Environmental day celebrations conducted at the Divisions.

â¢ Hosted a one-day environmental workshop organized by the National Safety Council and State Pollution Control Board.

â¢ Comprehensive Environmental audit conducted at the Divisions.

â¢ Online sensor for Ammoniacal nitrogen installed at Gelatin Division.

â¢ Solar Streetlights installed in various locations of Gelatin Division.

â¢ Secondary Spill containment pallet introduced for all hazardous chemicals kept in cans.

â¢ Volute Press installed for secondary biowaste filtration.

â¢ Ventilation provision increased in Hide operational area.

â¢ ETP Chemical consumption reduction done at Ossein Division.

â¢ Old damaged Lamella Clarifier Tank (MS) for ETP Bio Digester replaced with new Rubber lined MS Tank for better life.

â¢ Various sapling plantations are done as part of Green Belt development in Ossein & Gelatin Division.

â¢ ETP Chemical Consumption reduction initiatives done at Reva Division.

â¢ Reva Division has applied for Rule 9 on the CPCB portal for the usage of spent acid in Ossein/Limed Ossein production and in response, CPCB has provided an SOP for the utilization of spent acid.

â¢ The TOC meter has been installed at the Reva Division for online treated effluent monitoring.

â¢ The HCL storage dyke wall has been modified and an HCL scrubber has been installed in the Reva Division.

â¢ Reva Division has applied for a consent to establish amendment for the addition of Biofuel and a new DG set.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has formulated a well-structured Policy aimed at providing focus and direction to the various activities on CSR. The sectors which are primarily focused include healthcare, education, rural development etc. Your Company is committed to identifying and supporting programmes aimed at such of the sectors. The CSR Policy can be accessed on the Company''s website. The local communities in the manufacturing locations have immensely benefitted from the various CSR activities carried out during the Financial Year.

https://gelatin.in/uploads/homecontent/

CSRPOLICY_20230210052849.pdf

The CSR projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013.

The total CSR expenditure incurred by the Company during the year is Rs. 146.01 Lakhs which is in compliance with the statutory requirement of 2% of the average profit for the last three years amounting to Rs. 145.77 Lakhs (The Annual Report on CSR activities is annexed herewith as Annexure I).

SECRETARIAL STANDARDS

The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the financial year 2024-25.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Neither an application was made by the Company nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE

There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS Not applicable.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In accordance with the SEBI (LODR) Regulations, the Company''s policy on materiality of Subsidiaries specifying

the criteria for determining the Material Subsidiaries is available in the Company Website www.gelatin.in. As per such criteria, the Company''s Subsidiary- Bamni Proteins Limited is a Material Subsidiary as on 01st April 2025.

SUBSIDIARY COMPANY BAMNI PROTEINS LIMITED

The management of the Company was continuing its efforts in terms of finding a technically and financially feasible solution for restarting operations of the factory of the Subsidiary- Bamni Proteins Limited for which studies were ongoing in consultation with external technical agencies. Subsequent to year ended 31st March 2025, such studies have been completed. However, the management is of the view that any suggested process would involve substantial capital expenditure in addition to operating expenses considering the volume of effluents that needs to be handled based on the Company''s scale of operations. The management has initiated discussions with the Company''s Promoters, Nitta Gelatin Inc., Japan on the future of its operations, given the implications on the entire supply chain.

The statement containing the salient features of the financial statement of the Subsidiary under first proviso to Sub-Section (3) of Section 129 of the Act in Form AOC I is attached as Annexure II.

COMMENT ON STATUTORY AUDITORSâ REPORT

I. On the basis of appropriate audit evidence for validating the value of Property, Plant and Equipment, the restart Order issued by the Maharashtra State Pollution Control Board and the Order of the Industrial Tribunal, Nagpur for compliance with the labour law provisions, the corresponding qualifications in the Independent Statutory Auditors'' Report on the consolidated financial statements for the year ended 31.03.2024 have been dropped by the Statutory Auditors in their report for the Financial Year

ended 31st March 2025.

II. On the Independent Auditors'' observation regarding the adequacy of maintenance of books of accounts vide para 17 (h)(vi) of their report on standalone financial statements, in terms of exceptions for enabling audit trail feature in the SAP/Zoho software application of the Company, it is stated that:

The SAP application will never allow direct Data Base (DB) access/changes to any of its databases. All the DB access or Database table access will be established through the SAP application only.

ZOHO books is used by customers across the globe. Zoho Books maintains a log of every change made to a record in the application, such as a contract, sales or purchase transaction, invoice or bill, journal or even a setting. Along with the nature of the change, it also saves the timestamp and the details of the user who performed the action. The audit trail in Zoho Books provides details on the 4 Ws: When, Where, What and Who. When - The date and time an action was performed. Where - The module under which the action was performed. This can be Invoices, Bills, Bank Feeds, Expenses or any other module under Zoho Books. What - A description of the action that was performed, such as creating an invoice, editing line items on the invoice or updating the contents of a bill. Who -The user who performed the action. If a record is changed multiple times, the audit trail shows every version that has been created, not just the most recent. The user can compare multiple versions and track specific data that has been added, removed or modified. The management has tested the audit trail feature available in ZOHO and found to be satisfactory and have received Independent Service Auditors'' Assurance Report.

SECRETARIAL AUDITORSâ REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

Sl.

No.

Observations

Management Reply

16 days delay in filing the Quarterly Financial Results under Regulation 33(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 through Integrated Filing (Financials) with BSE Ltd. for the quarter ended 31st December, 2024 pursuant to SEBI Circular SEBI/HO/CFD/CFD-PoD-2/CIR/P/ 2024/185 dated December 31, 2024 in terms of Regulation 10(1 A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company is advised to file the same within the timeline as per the Circular.

The financials (both standalone and consolidated) along with Limited Review Report (both standalone and consolidated) was filed with BSE on the date of the Board meeting itself viz 10th February 2025 within the prescribed time. XBRL of the same (old format) was also filed within 24 hours from the conclusion of the Board Meeting.

Integrated Filing (Financials) XBRL utility was not available at that point of time. This utility had four additional disclosure matters viz Statement on Deviation or Variation for proceeds of Public Issue, Rights Issue, Preferential Issue, Qualified Institutions Placement etc, outstanding default on Loans and Debt Securities, Disclosure of Related Party Transactions (applicable only for half-yearly filings i.e., 2nd and 4th quarter) and Statement on impact of Audit Qualifications which were not relevant to the Company for the quarter ended 31st December 2024.

Hence, we had not filed the PDF version; which was subsequently done- the same file which we had already filed on the date of the Board meeting.

COLLABORATORS

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as Annexure IV to this report.

INTERNAL CONTROL SYSTEM

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The internal control systems operate through well documented Standard Operating Procedures, policies and process guidelines. These are designed to ensure that transactions are conducted and authorized within the defined authority limits commensurate with the level of responsibility for each functional area. The Company''s accounting and reporting guidelines ensure that the transactions are recorded and reported in conformity with the Generally Accepted Accounting Principles.

In addition, Concurrent Auditors have been appointed and

for the current year, have reviewed and reported on the procedures and process followed relating to procurement of Crushed Bone, Hydrated Lime, Firewood & Coal at Ossein Division & Reva Division, which were identified to be high risk areas which can potentially cause financial loss to the Company. Concurrent Auditors are reviewing the transactional details relating to procurement, storage and consumption relating to the above materials and reporting to the management for review and corrective actions. The corrective actions suggested by the Concurrent Auditors are implemented in a timely manner.

The Audit Committee reviews each of the Internal Audit reports as a separate agenda item along with the Internal/ Statutory Auditors and the management representatives wherein the Committee gives its advice/suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee, the process owners in the Company undertake requisite corrective action in their respective areas thereby further strengthening the control systems. Action Taken Reports are also reviewed by the Audit Committee for each actionable item. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONTROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested by the management and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Companies Act and with the Generally Accepted Accounting Principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring systems are in place.

RISK MANAGEMENT

measures taken by the Company in managing such risks to sustain the operations of the Company for the foreseeable future. Some of the key risk areas identified for mitigation and corrective action include:

â¢ Crushed Bone availability and its cost trend.

â¢ Impact of the high cost of Crushed Bone on the cost of production and therefore the competitiveness of the end products.

â¢ Project management related risks.

â¢ Emerging substitutes for Gelatin.

â¢ Financial fidelity risks.

â¢ Cyber security risks.

â¢ Significant litigation against the Company having material financial impact.

â¢ Moves of competitors.

â¢ Water scarcity for operational requirements.

â¢ Emergence of alternate substitutes for the products of the Company.

â¢ Adverse forex rate fluctuations.

â¢ Losing pricing premium commanded by the Company due to emergence of alternate Halal certifications.

â¢ Biomass waste disposal.

â¢ Potential loss of fish collagen peptide business in India due to non- availability of raw material within India.

â¢ Geo political situations including threat of reciprocal tariff by US Government and its impact on the entire supply chain.

As part of Fraud Risk Assessment study conducted by M/s. Protiviti Consulting, Bangalore, in view of the frauds reported in some of the critical areas of its operations in the preceding financial years, the Company has implemented various corrective actions suggested by the agency.

MATERIAL POST BALANCE SHEET EVENTS

There are no material post balance sheet events which require adjustments in accounts as per the provisions of the Accounting Standards.

APPLICABILITY OF COST AUDIT REQUIREMENTS

As per the Company''s (Cost Records and Audit) Rules 2014, the Company''s products are not covered under Cost Audit and the Company maintains the relevant cost records for the products for which the maintenance of cost records is required as per the above Rules.

PROCESS REVIEW/FORENSIC INVESTIGATION

As reported in the last two years, further to the forensic investigation conducted on the basis of wrong doing by one of the employees who was since terminated, the said person and the vendor have come forward to make good the loss suffered by the Company. Backed by a professional legal opinion, the Company during the financial year has reached an out of Court settlement with the said ex- employee and the vendor by means of a tripartite agreement between the Company, ex- employee and vendor, the main terms and conditions as below:

a. The Vendor will not raise any claim before any forum, both civil and criminal for the amount of Rs. 34.43 Lakhs withheld by the Company which is the subject matter of the original Suit filed before the Hon''ble Sub Court at Irinjalakuda for realization of amount with interest and that they will file a memo/ petition before the said Court for setting the above case before the mediator.

b. The ex-employee to pay Rs. 17.57 Lakhs as part of settlement.

c. The ex-employee to withdraw the dispute raised in Industrial Tribunal, Thrissur against the Company and that he will not raise any claim on account of his termination.

d. The Company to request the police authorities to drop the present investigation and not to raise any claim against the ex-employee and vendor before any forum.

The Ex-employee has already paid the amount and other conditions of out of Court settlement are under implementation.

RESPONSIBILITY STATEMENT OF DIRECTORS

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in respect of the Company in terms of Section 134 of the Companies Act, 2013:

a) that in the preparation of the annual accounts for the year ended 31st March, 2025, the applicable Indian Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected such accounting policies as mentioned in Note No.2 of the notes to the Financial Statements 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 as at 31st March 2025 and of the profit of the Company for the year ended on that date;

c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Companies Act as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions that have taken place actually are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally, material Related Party Transactions foreseen in the year ahead were approved by the members. Particulars of contracts of arrangements with Related Parties referred to in Sub Section 1 of Section 188 read with Rule 8(2) of the Companies (Accounts) Rules,

2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations. A separate section on Corporate Governance under the Regulation, along with a certificate from the Secretarial Auditors confirming the compliance, is annexed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Indian Accounting Standards (Ind AS) 110 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the SEBI (LODR) Regulations,

2015 and form part of the Annual Report.

DIRECTORS

Mr. Praveen Venkataramanan was appointed as the Managing Director of the Company on 04.08.2024 in place of Mr. Sajiv K. Menon on completion of his term.

Mr. Sajiv K. Menon was appointed as a Non- Executive Non- Independent Director on 04.08.2024. The Board is of the opinion that Mr. Sajiv K. Menon possess integrity, relevant expertise and experience which will benefit the Company in the long run.

Mr. Hidenori Takemiya has been appointed as NonExecutive Nominee Director with effect from 27.06.2024.

Mr. Kazuya Hayashi has been appointed as Non- Executive Nominee Director with effect from 10.05.2024.

Mr. Hidehito Jay Araki has been appointed as NonExecutive Independent Director with effect from 04.08.2024.

The Board of Directors had constituted a Nomination and Remuneration Committee (NRC) which was reconstituted during the year with the following members:

1. Mrs. Shirley Thomas (Chairperson)

2. Prof. (Dr). M. K. Chandrasekharan Nair

3. Mr. Sajiv K. Menon

There were no instances where the Board had not accepted any recommendation of the Committee.

The terms of reference of the NRC are as follows:

1. The NRC shall identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board, their appointment and removal and shall carry out evaluation of every Director''s performance.

2. The NRC formulates the criteria for determining qualifications, positive attributes and independence of a Director for recommending to the Board and also a policy relating to the remuneration for the Directors, Key Managerial Personnel and Senior Management Personnel meaning thereby employees of the Company who are members of core management excluding Board of Directors.

3. The NRC formulates the Remuneration policy to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate personnel as are herein referred at (2) above of the quality required to run the Company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks and remuneration to Whole-time Directors, Key Managerial Personnel and senior management involves a balance between fixed and variable pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

The policy has been disseminated in the Company website -

https://gelatin.in/uploads/homecontent/Nomination%20

and%20Remuneration%20Policy_20250313043506.pdf

AUDIT COMMITTEE

The Company has an Audit Committee consisting of the following members:

1. Mr. V. Ranganathan (Chairman)

2. Mrs. Shirley Thomas

3. Mr. E. Nandakumar

4. Mr. Sajiv K. Menon

There were no instances where the Board had not accepted any recommendation of the Committee.

INDEPENDENT DIRECTORS

Independent Directors of the Company have given a declaration that they conform to the criteria prescribed for an Independent Director as mandated by the relevant regulatory prescription viz, Section 149(7) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Rule 8(5) (iii) of Companies (Accounts) Rules, 2014 prescribes that the report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors mentioned elsewhere, it is brought to the notice of shareholders that Mr. P Sahasranaman continues as Chief Financial Officer (CFO) and Mr. Vinod Mohan continues as Company Secretary (CS).

BOARD EVALUATION

The Board carried out an annual evaluation of its performance as well as that of its committees and Individual Directors, including the Chairman of the Board. The evaluation found each of the Directors to have requisite qualification, expertise and track record for performance of their duties as envisaged by law.

MEETINGS

The Board of Directors met 6 (Six) times during the financial year 2024-25 on 10.05.2024, 21.06.2024, 04.08.2024, 08.11.2024, 10.02.2025 and 17.03.2025. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization, providing direct access to the Chairperson of Audit Committee, the details of which have been given in the Company''s official website.

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

responsible for redressal of complaints relating to sexual harassment, as envisaged under the provisions of Act and Rules. Hitherto, no complaints were received by ICC.

STATUTORY AUDITORS

M/s. Walker Chandiok & Co. LLP (WCC LLP) Chartered Accountants (Firm Registration No. 001076N / N500013) who were appointed as Statutory Auditors of the Company for a 5 year term at the Annual General Meeting held in the year 2017 were re-appointed by the Board of Directors at their meeting held on 07.02.2022 on the basis of recommendation of the Audit Committee and shall hold office from the conclusion of the 46th Annual General Meeting till the conclusion of the 51st Annual General Meeting of the Company to be held for the Financial Year ended March 31,2027.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Abhilash Nediyalil Abraham, (CP No. 14524, M. No. F10876), Company Secretary-in-practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI. The Secretarial Audit Report of the Material Subsidiary, Bamni Protiens Ltd. is enclosed as Annexure VII

ANNUAL RETURN

The Company has a website https://www.gelatin.in, where the annual returns of the Company have been published.

ACKNOWLEDGEMENT

Your Directors are thankful to the esteemed Shareholders for their continued patronage and the confidence reposed on the Company and its management. Your Directors place on record its sincere appreciation for the support and assistance extended by the State Government and the Kerala State Industrial Development Corporation Ltd. The Board takes this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board places on record its sincere appreciation for the significant contributions made by employees of the Company through their dedication and commitment during the year. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their co-operation.

Mar 31, 2024

The Directors have pleasure in presenting the 48th Annual Report and the audited financial statements of your Company for the year ended 31st March, 2024.

The Statement of Accounts has been prepared In accordance with Indian Accounting Standards (IND AS) which are applicable to the Company w. e. f. 01st April, 2017 as per the Rules laid down in this regard.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2024 was '' 8024.44 Lakhs comprising of 4,00,00,000 Equity Shares of '' 10/- each totaling to '' 4000.00 Lakhs, 929,412 Optionally Convertible NonCumulative Preference Shares (OCPS) of '' 170/- each totaling to '' 1580.00 Lakhs, 2,00,00,000 Optionally Convertible Non- Cumulative Preference Shares of '' 10/- each totaling to '' 2000.00 Lakhs and 44,44,444 Redeemable Preference Shares of '' 10/- each totaling to '' 444.44 Lakhs.

PERFORMANCE Record Profits

Your Company recorded the highest profit in its history during the financial year 2023-24 based on robust demand for all its products and the equity enjoyed by the Company amongst its customers, backed by strong internal processes.

The gross revenue from operations of your Company during the year under review was '' 472.97 Crores as compared to '' 486.75 Crores in the previous year. Profit before tax was '' 109.88 Crores as against '' 78.08 Crores in the previous year, registering a growth of 41%. There was an increase in sales realisation per unit of Gelatin in line with the global prices with the growth in its demand worldwide. The price of the by-product Di-Calcium Phosphate has decreased slightly during the year, due to easing of demand from the poultry sector. The increase in price of raw material Crushed Bone and Hydrochloric acid continues to place the industry under pressure.

Economic Scenario - Domestic and Global Market

Earning the nickname "pharmacy of the world," India''s pharmaceutical industry is on a major upswing. While it serves its own domestic needs, it also plays a critical role on the global stage. Indian companies control over 20% of the world''s pharmaceutical supply chain and a staggering 60% of the global vaccine market. They are a major source of affordable medications, supplying 40% of generic drugs in the US and a quarter of all medicines in UK. This remarkable transformation has made India a driving force in global healthcare advancement.

Lower labour costs, efficient manufacturing and economies of scale allow Indian firms to offer competitive prices. Additionally, the industry''s sheer size and diversification make it adaptable and resilient. This allows them to cater to a wide range of needs and weather market changes effectively. Maintaining this global leadership requires a strong foundation. Robust supply chains are essential to meet strict regulations, ensure high-quality products and overcome logistical challenges. India''s pharmaceutical industry is well-equipped to address these demands and solidify its position as a global healthcare leader.

Plant utilization at full capacity

The Company was able to run its Gelatin plant at its full capacity during the year 2023-24, thanks to the growing demand for Gelatin and also to the successful efforts to streamline operations and maximize output.

Although our approach was to fully utilize the capacity, the Company could only operate its Collagen Peptide plant lower than its production capacity. To achieve full capacity utilization, we have been developing new markets such as Europe, UK, Turkey, Middle East, South East Asia, Asia Pacific etc. including offering improved high functional products.

However, the economic slowdown in the South East Asian Markets and competition from other hide Collagen suppliers limited our sales, but we are expecting better results in the coming years. The low prices of Bovine hide Collagen in the market have made us face adversities in competing with current market prices.

Raw Material scenario

The availability of Crushed Bone (CB), which is the major Raw material for manufacture of Gelatin has been fluctuating during the year. With most Gelatin companies operating to full capacity, there has been an increase of CB prices. Compared to South India, the increase was higher in other parts of India. Slow movement of Bone meal, which is a byproduct of the CB industry has also led to the vendors expecting a higher price for CB, to make up this drop in their profitability.

Though the availability of good quality CB at reasonable cost has been a challenge during the financial year, our effective sourcing strategy minimized the impact. This included increased sourcing from South India for Ossein Division in Kerala, sourcing of CB from other parts of the Country for other units helped in controlling the freight and hence the overall landed cost. Company is taking steps to partner with CB suppliers inorder to improve the quality of raw material.

The availability and price of fish protein - the raw material required for manufacture of Fish Collagen Peptide was stable during the course of the year. The Company will be scouting for new sources in the coming year to ensure its

increased raw material requirement.

Availability of Hydrochloric acid and hydrated lime was stable during the year, Price of lime was stable, Acid price increased compared to previous year due to volatility in caustic soda market,

Operations

(i) Apart from the price trends in respect of CB, acid prices have increased by 70%, significantly impacting the cost of production,

(ii) The per unit price realization has gone up by 13% for Limed Ossein, by 1% for Gelatin, a drop of 2% for Di-Calcium Phosphate, remained stable for Bovine Collagen Peptide and dropped by 13% for Fish Collagen Peptide, The price of raw material, fish protein for Fish Collagen Peptide has recorded a decrease of 17% during the year. Price negotiations with raw material suppliers and finished product customers are on to protect the margins, The weakening of Rupee against USD during 2023-24 as compared to 2022-23 has contributed to better sales realisation on exports,

(iii) The production of Gelatin has come down due to an accident and the consequent shut down taken in the month of September, The production levels of Ossein has come down due to lower demand and so also the bi-product Di-Calcium Phosphate, The overall production of Collagen Peptide has come down due to the drop in sales for the product,

(iv) The Company has developed alternate raw material sources and put in place innovative manufacturing technologies to improve the yield, cost and quality of Collagen Peptide,

(v) There was increase in power cost due to increase in tariff as well as higher production levels but the overall cost could be maintained at manageable levels for power as a result of various cost control measures in both the Divisions of the Company, Though the price of LNG, firewood and furnace oil has increased during the year, cost control measures helped the Company to keep costs under control, The price of coal has dropped significantly during the year under review on account of lifting of restrictions for exports from China to India,

(vi) The Company''s efforts to create value from wastes by generating biogas from residual sludge for use as fuel has further gained momentum with the installation of Anaerobic Digester in Gelatin Division during the year, The operation of sludge dryer which could substantially reduce the volume of sludge for disposal has helped the Company in terms of reducing the attendant costs, Factory and Administration overheads increased marginally in line with the overall business environment,

(vii) With regard to finance cost, the Company could

effectively leverage low cost foreign currency loans by negotiating with the Banks and inducting Banks that provide working capital funds at attractive rates, Interest rates for USD denominated foreign currency loans have gone up with the new framework with the benchmark as SOFR, The Company is now availing foreign currency loans in alternate currencies such as JPY etc, to reduce the over all interest costs,

(viii) Against this backdrop, your Company exercised close monitoring and strict control over each significant element of cost and achieved improved profitability notwithstanding the hig her costs incurred due to various reasons as described above,

ix) The products of your Company continued to enjoy robust market demand during the year under review, The entire sale of Ossein/Limed Ossein, 39% of the total sale of Gelatin and 60% of Collagen Peptide was through exports, Your Company has arrangement with its overseas Promoter, Nitta Gelatin Inc,, Japan to leverage their expertise and market insights in servicing its customers in a proactive manner in line with the global standards of NITTA Group, The Company has taken steps to further improve the demand for Collagen Peptide by venturing into new markets and by offering high functional products,

x) The Pollution Control Board has renewed the validity of the Consent to operate upto 30th June 2028 for Ossein and Gelatin Divisions, Reva Division''s Consent to Operate issued by the Gujarat State Pollution Control Board has been renewed and is valid upto 23rd May 2026.

Environmental Sustainability

Your Company has always prioritized environmental

sustainability as an important indicator to reduce carbon

foot print and has taken various measures in this regard,

i) Various power reduction initiatives are conducted across units such as installation of energy efficient IE3 motors, installation of VFD for motors, installation of Solar lights etc,

ii) The Company has installed an Anaerobic Digestor with automated biogas pumping system & Volute Sludge dewatering system for ETP sludge filtration in Gelatin Division, This will equip the Company to meet the required environmental standards as stipulated by the Pollution Control Board in view of the changed scenario,

iii) The Company''s rain harvesting pond at its Ossein Division has helped to improve the water table in nearby areas in addition to de-risking the Company from any sudden developments affecting water availability, though to a limited extent,

iv) The Company continues to maintain the Miyawaki forest, a technique leading to thick growth of trees in a measured area and thereby ensures its commitment

to green aspects of the environment,

v) The Company has installed a Polyhouse in both Ossein and Gelatin Division for sludge drying to save on energy requirement,

vi) The Company continues to develop green belts and

has developed 4.36 hectares (45%) of green belt in and around the factory premises out of total 9.7 hectares of total industrial area with varieties of plant species at its Ossein Division,

FINANCIAL HIGHLIGHTS

The operations of the Company for the year 2023-24 have resulted in a pre-tax profit of '' 109.88 Crores (as against a pre-tax profit of '' 78.08 Crores) during the year 2022-23. Details are as under:

(Amount in Rs. Crore)
Particulars	For the year ended 31st March, 2024	For the year ended 31st March, 2023
Sales (including export incentives and net of GST)	472.97	486.75
Other Income	16.67	5.31
TOTAL	489.64	492.06
Net Profit before Depreciation	123.96	91.27
Deducting therefrom:
Depreciation	14.08	13.19
Provision for Tax
- Current Tax	24.25	22.76
- Income Tax relating to earlier years	0.45	-
- Deferred Tax	2.70	(3.44)
Profit after Tax from continuing operations	82.48	58.76
Other comprehensive income/(loss) net of tax	-	0.09
Total comprehensive profit for the year	82.48	58.85
Profit brought forward from previous year	72.29	32.96
Current Year''s Profit available for appropriation	82.48	58.76
Appropriations:
Final dividend on equity shares - paid	6.80	3.63
Total	6.80	3.63
Transfer to General Reserve/Other Reserves	-	15.80
Balance profit carried forward to next year	147.97	72.29
Earnings per share (''
Basic	90.85	64.72
Diluted	90.85	64.72

DIVIDEND

Considering the Company''s performance, the Board has recommended a dividend of '' 6/- per share i.e. 60% of the face value of '' 10/- per share on the Equity Capital for the year ended 31st March, 2024. The Board has also recommended a dividend @7.65063% on the 44,44,444 Redeemable Preference Shares of the face value of '' 10/-each for the year ended 31st March, 2024. This dividend payment is out of the current year profits of the Company and is subject to approval of the members at the ensuing Annual General Meeting,

The total outflow on account of dividend will be

'' 578.75 Lakhs ('' 725.93 Lakhs in the financial year 2022-23) comprising of '' 34 Lakhs on Preference Shares ('' 44.99 Lakhs in the financial year 2022-23) and '' 544.75 Lakhs on Equity Shares ('' 680.94 Lakhs in the financial year 2022-23).

During the year, unclaimed dividend of '' 3,21,272/-pertaining to the year 2016-17 shall be transferred to the Investor Education & Protection Fund after giving due notice to the members,

RESERVES

The Company has transferred an amount of

'' 1,580.00 Lakhs as Capital Redemption Reserve upon repayment of the Convertible Preference Shares during the previous year as part of statutory requirements of the Companies Act, 2013. The Company has recognized capital reserves amounting to '' 2,750.62 Lakhs on account of the merger (including deferred tax asset on the unabsorbed business loss of Reva Proteins Ltd. carried over from previous years as per tax books for an amount of '' 1,609 Lakhs and other appropriate adjustments).

Reserves as on 31.03.2024 comprises of Security Premium Reserve of '' 2,895.90 Lakhs, equity contribution on External Commercial Borrowings and Preference Share Capital '' 984.43 Lakhs, Special Export Reserve of '' 79.00 Lakhs, General Reserve of '' 7,836.64 Lakhs, Capital Redemption Reserve of '' 1,580 Lakhs, Retained earnings of '' 14,796.85 Lakhs, Capital Reserve of '' 2,750.62 Lakhs, Hedge Reserve of '' 2.19 Lakhs and other comprehensive loss of '' 272.34 Lakhs aggregating to '' 30,653.29 Lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Details in respect of other loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes on accounts for the financial year ended 31st March, 2024 and such loans, guarantees and investments are within limits prescribed under that Section.

CREDIT RATING

The Rating agency CRISIL has revised the outlook on the long term bank facilities to âCRISIL A-/ watch Developing (placed on âRating watch with Developing Implications) from âCRISIL A-/Positiveâ. The short term rating has been âCRISIL A2 /- watch Developing (placed on âRating watch with Developing implicationsâ). This is consequent to stoppage of operations in subsidiary Company, Bamni Proteins Ltd. as detailed under the Heading - Subsidiary Company Bamni Proteins Limited.

AWARDS & ACCOLADES

During the year, NGIL received various recognitions like;

a) CII -Total Cost Management Division -TCM Award-2023, Merit Category (SME Champion).

b) MKK Nayar Productivity Award 2023 for the Second-Best Productivity Performance in the category of Large Industries.

c) Team from Ossein Division won a special jury award in KSPC Kaizen Competition.

d) Team from Ossein Division won SEEM Gold award 2022 under Category -Chemicals from Society of Energy Engineers and Managers.

e) Team from Ossein Division and Gelatin Division won Silver Award under Restorative Category in 47th CII National Kaizen Competition.

f) Gold Category Recognition from CII for BE

maturity assessment programme-2023.

g) Ossein Division won Abhinandan Patra Award-2024 from National Safety Council, Kerala Chapter.

h) NGIL won KMA CSR Award -2024, Education category.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division

(b) Drugs manufacturing license from DC, Govt. of Kerala.

(d) HACCP Certificate for Ossein Division for food safety.

(e) ISO 9001: 2015 for Quality Management System of the Company.

(f) FSSC 22000 V.5.1 Certification for Food Safety Management System.

(g) FSSAI License for manufacturing, import/export/ retail/e-commerce of Gelatin, Collagen Peptide, Collagen Peptide retail products.

(h) WHO-GMP Certification as per World Health Organisation/Codex for manufacture of Gelatin & Collagen Peptide.

(i) USDMF for Gelatin gelling Grade & Non-gelling Grade.

(j) Chinese DMF for Gelatin.

(k) Halal (MUI, IFANCA & JUM )/Kosher Certification for Gelatin and Collagen Peptide - JUM Halal for Ossein & Di-Calcium Phosphate.

(l) ISO:IEC 17025:2017 NABL Accreditation for in-house laboratory of Gelatin Division.

(m) ISO 14001:2015 for Environment Management System.

(n) ISO 45001:2018 Certification for Occupational, Health and Safety Standards.

(o) ISO 50001:2018 Certification for Energy management system.

(p) Gelatin Division & Ossein Division passed the recent TPM SIGNIFICANT ACHIEVEMENT Certification Assessment-2023.

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations and effective management of the related issues is an integral part of the Company''s philosophy.

1. Health and Safety

The Company is committed to protecting the health

and safety of its employees. The Company has a

three-tier safety committee system including an Apex

Safety committee chaired by the Managing Director.

In addition to the Company''s Head for Health Safety

& Environment, each plant has a Safety Officer and a

Safety Committee, including workmen and executive representatives. The Committee meets regularly to review issues related to occupational safety and employee health. Regular health checkup of the employees is carried out through tie-up with reputed hospitals. Various training programs and Safety campaigns are conducted at the plant on health and safety topics including emergency preparedness, work safety, first aid, etc. Both Ossein and Gelatin factories have received the ISO 45001-2018 & ISO 14001-2015 certification, which is a testimony to the Company''s commitment in this area.

The following were the major activities carried out during the year:

â¢ Various training & campaign programs were conducted to improve Occupational Health & Safety Awareness.

â¢ An external comprehensive safety audit was conducted by Chola MS risk services at both Gelatin Division (GD) and Ossein Division (OD).

â¢ Surveillance audit of ISO 45001-2018 completed at both OD and GD.

â¢ Ossein Division received Safety award from National Safety Council - Kerala upon successful completion of Safety Audit.

â¢ Fire license renewed at Ossein and Gelatin Divisions.

â¢ Safety day/week celebrations were held at Ossein, Reva and Gelatin Divisions. Various programs, demonstrations and competitions were conducted.

â¢ Mock drills were conducted for equipping the employees for handling emergencies at Ossein, Reva and Gelatin Divisions. Mock drill on confined space rescue operation was conducted in Gelatin Division.

â¢ As part of the TPM (SHE pillars), various safety improvement initiatives and their reviews are conducted at OD & GD.

â¢ Followed by an undesirable event resulting in a fatality in the Gelatin Division, rigorous safety enhancement initiatives have been implemented. These include establishing a dedicated storage area for empty chemical cans based on chemical compatibility, setting up an empty chemical can washing station, implementing a dedicated permit system for empty chemical can washing, conducting frequent refresher trainings at periodic intervals, providing training to migrant workers in local languages and displaying signage and information in the local language.

2. Environment

During the year, the Company has taken steps to develop the appropriate technology for the

manufacture of high quality Degreased Crushed Bone by setting up a pilot plant in collaboration with a prospective Crushed Bone supplier. This project once completed will result in the reduction of impurity and other unwanted material content in Crushed Bone and is expected to reinforce the supply chain. Once this is found to be successful, it will be replicated with other potential suppliers which will greatly help the Company in terms of improving the overall productivity and managing the cost in an effective manner.

The Company continuously endeavors to enhance Environmental Management and demonstrates its commitment to protecting the environment through all activities. The factories of the Company are equipped with modern effluent treatment plants for treating and discharging treated water with parameters well within the norms laid down by the respective State Pollution Control Board. The emissions from the boilers and generator stacks are regularly monitored for compliance. Solid waste from operations is collected in a secure manner and disposed of in authorized locations. Ambient air quality is monitored on regular basis and ensured for its compliance. Company''s ETP operations have been reinforced with the introduction of new equipment and technologies. Various energy-saving measures and efficiency improvement activities were taken up during the year that reduced the consumption of fuels compared to previous years. Action plans have been drawn up to reduce the consumption of water in the coming years. In the case of solid waste reduction, the Company follows a structured action plan. A polymer house-based facility using solar energy has been developed at the Company''s Gelatin Division for drying the sludge emanating out of the operations leading to lower operating costs and carbon print. With a view to reducing the greenhouse effect, the Company is focusing on greenery development at all its locations.

The following were some of the other related activities:

â¢ Surveillance audit of ISO 14001-2015 completed for Gelatin Division.

â¢ ISO 14001-2015 initial certification done at OD.

â¢ Environmental day celebrations conducted at Ossein, Reva & Gelatin Division.

â¢ Volute Sludge dewatering system for ETP sludge filtration implemented in GD.

â¢ Followed by the installation of Anaerobic Digestor, Biogas pumping automation implemented in GD for enhancing environmental and Safety performance.

â¢ Conducted One Day ETP training for Pollution Control Board newly joined engineers.

â¢ The Electrical street light replaced with solar lights in GD.

â¢ Online continuous effluent monitoring system installed in GD.

â¢ Various sapling plantations, drip irrigation, bamboo plantations, poly house renovation are done as part of Green Belt development in Ossein Division.

â¢ ETP Chemical Consumption reduction initiatives done at Reva.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has formulated a well-structured Policy aimed at providing focus and direction to the various activities on CSR. The Company is committed to identifying and supporting programmes aimed at such of the sectors. The CSR Policy can be accessed on the Company''s website

https://gelatin.in/uploads/homecontent/

CSRPOLICY_20230210052849.pdf

The CSR projects undertaken by the Company are in

accordance with Schedule VII of the Companies Act, 2013

which is given in Annexure I.

The total CSR expenditure incurred by the Company during the year of '' 81.73 Lakhs was in compliance with the statutory requirement of 2% of the average profit for the last three years amounting to '' 80.88 Lakhs (after set off of '' 12.02 Lakhs being expenditure incurred in last year over and above the mandatory limit available for set off). The Annual Report on CSR activities is annexed herewith as Annexure I. The Company shall carry forward the excess amount of CSR spent amounting to '' 0.84 Lakhs to next year towards CSR expenses as per the provisions of the Companies Act, 2013.

SECRETARIAL STANDARDS

DEPOSITS

The Company has neither accepted nor renewed any deposits during the financial year 2023-24.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Neither an application was made by the Company nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE

There were no significant material orders passed by the

Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS Not applicable.

SUSTAINABILITY

Contributing to sustainable development has always been the core ethos of all the operations and business decisions of your Company and is an important element of the overall corporate strategy. We stand committed to the path of Profitable, Sustainable and Socially Responsible Growth, keeping the interests of all our Stakeholders as our focus. We aim to grow and achieve higher returns even as we ensure an increased positive impact on the environment and the society at large while rededicating ourselves to the environmental, social and governance aspects. Simultaneously, we encourage involvement from all Stakeholders and ensure that our sustainable policies are well communicated, implemented, monitored and reviewed regularly.

We are and will continue to be increasingly focused on sustainable and socially responsible corporate behavior in everything we do. Our approach mainly centers around the following pillars:- Environmental Sustainability

Focus Area - Reduction in consumption of water, solid waste, power, fuel and plastic.

- People Sustainability

Focus Area - Employees'' safety, health, development, engagement, rewards and recognition.

- Social Sustainability

Focus Area - Corporate Social Responsibility (CSR): education, training, health, women, sports, agriculture and waste management.

- Economic sustainability

Focus Area: Cost reduction, supply chain efficiency and growth initiatives.

Our goal is to set an example for the Gelatin Industry in India in particular and industry in general for World-class sustainability practices. The raw material sources for Gelatin and Collagen Peptide are the byproducts from the meat and farmed fish processing industries, which are generally considered as well managed, natural and renewable resources. Collagen and its derived products are pure proteins made from natural raw materials and contain neither preservatives nor other additives. They are thus natural and healthy food with a clean label that optimally meet consumer needs in terms of application and sustainability. As such,

Gelatin can be considered as a product with a positive impact on overall sustainability since it is part of the circular economy of the Meat Industry.

Sustainable development is an integral part of our business strategy and we ensure that it is built into our complete business cycle through product development, new markets, capital projects, operational management and ultimately product end-use. Health and safety, social and governance issues are built into all stages of the asset life cycle, which help in serving our customers and all Stakeholders over a longer term, wherever they are across the world.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In accordance with the SEBI (LODR) Regulations, the Company''s policy on materiality of Subsidiaries specifying the criteria for determining the Material Subsidiaries is available in the Company website www.gelatin.in. As per such criteria, the Company''s Subsidiary - Bamni Proteins Limited is a Material Subsidiary as on 01st April, 2023.

SUBSIDIARY COMPANY BAMNI PROTEINS LIMITED

The annual production during the year in the Subsidiary Company was 2277 MT of Ossein and 5129 MT of Di-Calcium Phosphate as against 2703 MT of Ossein and 6103 MT of Di-Calcium Phosphate during the previous year.

The Maharashtra Pollution Control Board (MPCB) vide their letter dt. 13.03.2024 have ordered stoppage of the factory operations with immediate effect. Based on a complaint filed by an NGO that the operation of the Company is causing pollution to the surrounding areas, the PCB officials had taken samples from the bed of a small canal adjacent to the Company and sludge samples from the canal embankment and observed that the quality of water was outside the limit prescribed in the PCB consent conditions. The Company has explained in their reply to their notice regarding the treatment system, the capital expenditure invested since the acquisition of the Company and its compliance with the land discharge conditions as laid down by the MPCB in the Consent letter.

The Company stopped CB charging with effect from 14th March 2024 and completed recovery of the Work In Progress (WIP) material based on an application for the same with MPCB. Subsequently, the inventory of materials was shifted to other manufacturing locations and plant cleaning, equipment maintenance and preservation is currently going on in the factory. Contract workers were discontinued from service, all workmen were ordered to work in day shift and factory security has been strengthened. Company''s request for laying a pipeline to the nearest Vardha River to discharge the treated effluent has also been turned down by the Maharashtra Pollution

Control Board clarifying that the Board is not granting permission for discharge of treated industrial effluent into water body as a precautionary principle. The Company is now evaluating evaporation and drying of Calcium Chloride with zero liquid discharge. A cost effective solution has to be found out along with a value yielding application for Calcium Chloride to make the operations viable.

Action Plan by the Management for restarting the operations

The Company is currently evaluating the various options for restarting the operations on a sustainable basis and the associated capital expenditure.

Proposed interim arrangement

In view of the near term uncertainty regarding Bamni''s operations, it is proposed to permanently close the factory with retrenchment of employees as per applicable regulations. Some of the employees can be redeployed to other locations of the Company based on requirements. Once operations restart, preference will be given to retrenched staff for employment.

Liquidity assessment

The Company''s financials are strong enough for meeting the current obligations including working capital borrowings from banks. There is no concern in respect of liquidity for meeting the short term obligations. The surplus cash available with the Company will enable it to meet most of the capital commitments that might arise as detailed above.

Impact on NGILâs supply chain and proposed action plan

In view of these sudden developments, the Company has redrawn the plan for FY 2024-25 with minimal impact on supply chain by increasing the production levels at Ossein Division and Reva Division (to the extent capacity is available) and hiking hide Gelatin production.

In accordance with Section 129(3) of the Companies Act, 2013, consolidated financial statements of the Company and its Subsidiary Company have been prepared, which is forming part of the Annual Report.

In view of the significant uncertainty regarding resumption of operations of the unit, the Company has prepared the financial statements on a basis other than going concern basis with attendant accounting principles thereto.

The operation of this Subsidiary for the year under review has resulted in a pre- tax profit of '' 1,307.42 Lakhs (? 2,634.07 Lakhs in the previous year), post-tax profit of '' 830.57 Lakhs (? 2,033.29 Lakhs in the previous year) and other comprehensive loss of '' Nil (loss of '' 4.92 Lakhs) during the previous financial year.

The statement containing the salient features of the financial statement of the Subsidiary under first proviso to Sub-Section (3) of Section 129 of the Act in Form AOC I is

attached as Annexure II.

In accordance with fourth proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing therein its standalone and consolidated financial statements has been uploaded on the website of the Company, www.gelatin.in. Further as per the fourth proviso of the said section, the annual accounts of the Subsidiary Company and the related detailed information have also been uploaded on the website of the Company, www.gelatin.in.

Annual accounts of the Subsidiary Company and related detailed information shall be made available to the Shareholders of the Company and Subsidiary Company seeking such information at any point of time. The annual accounts of the Subsidiary Company shall also be made available for inspection by any Shareholder at the Registered Office of the Company and the Subsidiary Company. Hard copy of details of accounts of Subsidiary shall be furnished to any Shareholder on demand. Further, pursuant to Indian Accounting Standard IND AS 110 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiary.

COMMENT ON STATUTORY AUDITORSâ REPORT

I. In relation to the Independent Auditors'' Report on the Internal Financial Controls with reference to financial statements on the consolidated financial statements for the year ended 31.03.2024 vide para 3 of their audit report it is reported that

a. On the lack of sufficient appropriate audit evidence

with respect to the assessment of the Property, Plant and Equipment - of Subsidiary Company, Bamni Proteins Limited - the Company has disclosed '' 774.82 Lakhs as the value of Property, Plant and Equipment based on its historical costs as adjusted to accumulated depreciation. The Company has got the value of the land valued by an independent registered valuer who have determined the value at '' 1485.40 Lakhs.

b. On the comprehensive assessment of potential impact of non-compliance with applicable pollution control norms and conditions under various relevant laws and regulations of the said Company

- the Company has assessed the potential impact of non-compliances, if any, under various laws and regulations including environment laws and labour laws as applicable and potential impact has been assessed and provided for in the financial statements.

II. On the Independent Auditors observation regarding the adequacy of maintenance of books of accounts vide para 17 (h)(vi) of their report on standalone financial statements, in terms of exceptions for enabling audit trail feature in the SAP/Zoho software application of the company, it is stated that:-

The SAP application will never allow direct Database (DB) access/changes to any of its databases. All the DB access or Database table access will be established through the SAP application only.

ZOHO books is used by customers across the globe. Zoho Books maintains a log of every change made to a record in the application, such as a contract, sales or purchase transaction, invoice or bill, journal, or even a setting. Along with the nature of the change, it also saves the timestamp and the details of the user who performed the action. The audit trail in Zoho Books provides details on the 4 Ws: when, where, what, and who. When - The date and time an action was performed. Where - The module under which the action was performed. This can be Invoices, Bills, Bank Feeds, Expenses, or any other module under Zoho Books. What - A description of the action that was performed, such as creating an invoice, editing line items on the invoice, or updating the contents of a bill. Who - The user who performed the action. If a record is changed multiple times, the audit trail shows every version that has been created, not just the most recent. The user can compare multiple versions and track specific data that has been added, removed, or modified. The management has tested the audit trail feature available in ZOHO and found to be satisfactory and are yet to receive the Independent Service Auditors Assurance Report. The company has started using ZOHO books from March 2024 only with exposure to a very limited extent.

SECRETARIAL AUDITORSâ REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

Sl.

No.

Observations

Management Reply

During audit, it is found that the Hon''ble Additional Chief Judicial Magistrate and Judge (CD), Labour Court, Bharuch, Gujarat has convicted the Company and Managing Director under the Minimum Wages Act,1948 and the Minimum Wages (Gujarat) Rules,1961 vide its order dated 09.12.2023 in two separate cases CC No.537/2023 and CC No. 538/2023 and levied a penalty of '' 12,000/- and '' 4000/- respectively for not complying with Rule 26(d), Rule 26(2), Rule 26(b)(1) and Rule 22 of the Minimum Wages (Gujarat) Rules,1961 r/w Section 18 of the Minimum Wages Act,1948 for Reva Division. The Board of Directors is advised to ensure compliance with respect to the provisions of the Minimum Wages Act,1948 and the Minimum Wages (Gujarat) Rules,1961 for its Reva Division at all times to avoid conviction and imposition of penalties in this regard in future including strengthening the systems and processes to monitor and comply with the labour laws with regard to Reva Division. Further, the disclosure for the same under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 to BSE Ltd was made with delay of 81 days. The Board of Directors is advised to ensure the timely reporting to BSE Ltd in future.

Minimum Wages Act,1948 and The Minimum Wages (Gujarat) Rules,1961 for the Reva Division have been complied with; However all the required records could not be produced on time, since the mail communication in this regard from the Labour department was not acted upon due to oversight.

The Company was of the bonafide opinion that the amount paid was a fee as advised by the lawyer. Subsequently, a Court Order was received, on examination of which only, it was known that the amount was a penalty. The Company was duly maintaining all the records and was of the opinion that the charges will be dropped.

COLLABORATORS

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Annual Report as Annexure IV to this report.

INTERNAL CONTROL SYSTEM

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The internal control systems operate through well documented Standard Operating Procedures, policies and process guidelines. These are designed to ensure that transactions are conducted and authorized within defined authority limit commensurate with the level of responsibility for each functional area. The Company''s accounting and reporting guidelines ensure that the transactions are recorded and reported in conformity with the Generally Accepted Accounting Principles.

owners on each of the observations of audit are placed before the Audit Committee of the Board.

In addition, Concurrent Auditors have been appointed and for the current year have reviewed and reported on the procedures and process followed relating to procurement of Crushed Bone, Hydrated Lime, Firewood & Coal at Ossein Division & Reva Division, which were identified to be high risk areas which can potentially cause financial loss to the Company. Concurrent Auditors are reviewing the transactional details relating to procurement, storage and consumption relating to the above materials and reporting to the management for review and corrective actions. The corrective actions suggested by the Concurrent Auditors are implemented in a timely manner for arresting value leaks and for enabling overall strengthening of the internal control procedures prevailing in the organization.

The Audit Committee reviews each of the Internal Audit reports as a separate item of agenda along with the internal/statutory auditors and the management representatives wherein the Committee gives its advice/ suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee, the process owners in the Company undertake requisite corrective action in their respective areas thereby further strengthening the control systems. Action Taken Reports are also reviewed by the Audit Committee for each actionable item. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONTROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested by the management and no reportable material weakness in the design or operations was observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring systems are in place.

RISK MANAGEMENT

Accordingly, the management has constituted a Risk Management Sub-Committee comprising of Senior Management Personnel to develop and implement a Risk Management system including identification therein of elements of risks which in the opinion of the Board may impact the operations of the Company. The Board of Directors reviews the evaluation of risks and the mitigation measures taken by the Company in managing such risks to sustain the operations of the Company for the foreseeable future. Some of the key risk areas identified for mitigation and corrective action include:

â¢ Crushed Bone availability and its cost trend.

â¢ Impact of the high cost of Crushed Bone on the cost of production and therefore the competitiveness of the end products.

â¢ safety and security policies of the Company.

â¢ Project management related risks.

â¢ Emerging substitutes for Gelatin.

â¢ Financial fidelity risks.

â¢ Cyber security risks.

â¢ Significant litigation against the Company having material financial impact.

â¢ Moves of competitors.

â¢ Water scarcity for operational requirements.

â¢ Emergence of alternate substitutes for the products of the Company.

â¢ adverse forex rate fluctuations.

â¢ Losing pricing premium commanded by the Company due to emergence of alternate Halal certifications.

â¢ Sludge disposal.

â¢ Potential loss of fish CPT business in India due to nonavailability of raw material within India.

â¢ Fraud Risk Assessment Study.

In view of the recent frauds reported in some of the critical areas of its operations, the Company has appointed M/s. Protiviti Consulting, Bangalore who are a prominent fraud risk assessment agency having extensive experience in conducting similar studies across the Country for doing an independent study of the systems and processes prevailing in the Company and report on fraud risk possibilities/ indicators. They have had extensive discussion with the functional heads of the Company at its various units and have submitted a detailed fraud risk register/fraud risk indicators to the Company. The Company is now evaluating the fraud risk parameters identified by the said consulting agency and is in the process of finalizing corrective actions to mitigate the probable risk involved in the relative processes with the corrective actions in place, it is expected that the Company could ward off any such risks.

MATERIAL POST BALANCE SHEET EVENTS

There are no material post balance sheet events which require adjustments in accounts as per the provisions of the accounting standards.

APPLICABILITY OF COST AUDIT REQUIREMENTS

PROCESS REVIEW/FORENSIC INVESTIGATION

As already reported during the last year, regarding a forensic investigation on the basis of an alleged wrong doing by one of our employees at Ossein Division, the Company has suspended the said employee from the services of the Company and has further strengthened the internal control procedures relating to weighment of Crushed Bone in terms of an automated weigh bridge with no manual operations and integration with SAP without any manual intervention for weighment related data. The police investigation is currently on for recovery of the amount from the employee concerned. Company continues to enhance its surveillance procedures including installation of CC TV cameras in relevant critical areas to enable avoidance of any potential wrong doing in future.

In view of the fraud reported on CB procurements in FY 2022-23, the Company has appointed a reputed Fraud Risk consulting organization to review the systems and processes existing in the Company in its various critical function areas. The said organization has reviewed the processes and procedures and has held extensive discussions with the department/functional heads and has submitted a detailed report consisting of potential fraud risk register and early warning signals for key risk indicators in various functional areas. The management is in the process of reviewing the systems and processes relating to items identified as fraud risk areas by the consulting organization and to suggest counter measures to be implemented to avoid any fraud that could potentially occur in the process areas. This shall be completed during the course of the current financial year.

RESPONSIBILITY STATEMENT OF DIRECTORS

a) that in the preparation of the annual accounts for the year ended 31st March, 2024, the applicable Indian Accounting Standards have been followed along with proper explanation relating to material departures, if any;

affairs of the Company as at 31st March 2024 and of the profit of the Company for the year ended on that date;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Companies Act as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.Gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions that have taken place actually are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally, material Related Party Transactions foreseen in the year ahead were approved by the members. Particulars of contracts of arrangements with Related Parties referred to in sub section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations. A separate section on corporate governance under the Regulation, along with a certificate from the Secretarial Auditors confirming the compliance, is annexed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Indian Accounting Standards IND AS 110 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the SEBI (LODR) Regulations 2015 and form part of the Annual Report.

DIRECTORS

Mr. Sajiv K. Menon was appointed as the Managing Director of the Company on 01.06.2023 in place of Mr. Philip Chacko M who resigned from his office on 31.05.2023.

Mrs. Shirley Thomas was appointed as an Independent Director on 08.05.2023. The Board is of the opinion that Mrs. Shirley Thomas possess integrity, relevant expertise and experience which will benefit the Company in the long run.

Mr. Yoichiro Sakuma resigned from the post of Independent Director on 30.09.2023 and Mrs. Radha Unni ceased to hold the office of Independent Director on 03.12.2023 upon attaining 75 years.

Dr. Shinya Takahashi was reappointed as Whole Time Director designated as Director (Technical) for a period of one year with effect from 07.05.2023 which was approved by the shareholders at the Annual General Meeting held on 4th August, 2023. His term ended on 07.05.2024.

The Board of Directors had constituted a Nomination and Remuneration Committee (NRC)which was reconstituted with effect from 10.11.2023 with the following members:

1. Mr. E. Nandakumar (Chairman)

2. Prof. (Dr). M. K. Chandrasekharan Nair

3. Mrs. Shirley Thomas

There were no instances where the Board had not accepted any recommendation of the Committee.

The terms of reference of the NRC are as follows:

1. The NRC shall identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every Director''s performance.

2. The NRC formulates the criteria for determining qualifications, positive attributes and independence of a Director for recommending to the Board and also a policy relating to the remuneration for the Directors, Key Managerial Personnel and senior management personnel meaning thereby employees of the Company who are members of core management excluding Board of Directors. This would comprise all members of management one level below the Executive Directors, including all functional heads.

3. The NRC formulates the Remuneration policy to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate personnel as are herein referred at (2) above of the quality required to run the Company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to Whole-time Directors, Key Managerial Personnel and senior management involves a balance between fixed and variable pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

The policy has been disseminated in the Company website - https://Gelatin.in/uploads/homecontent/ NOMINATION%20AND%20REMUNERATIOJN%20 POLICY_20221128064418.pdf

AUDIT COMMITTEE

The Company has an Audit Committee which was reconstituted on 10.11.2023 and consisting of the following members:

1. Mr. V. Ranganathan (Chairman)

2. Mrs. Shirley Thomas

3. Mr. E. Nandakumar

There were no instances where the Board had not accepted any recommendation of the Committee.

INDEPENDENT DIRECTORS

Independent Directors of the Company have given a declaration that they conform to the criteria prescribed for an Independent Director as mandated by the relevant regulatory prescription viz, Section 149(7) of the Companies Act and Regulation 16 of the SEBI (lOdR) Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Rule 8(5) (iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors elsewhere, it is brought to the notice of shareholders that Mr. P. Sahasranaman continues as Chief Financial Officer (CFO) and Mr. Vinod Mohan continues as Company Secretary.

BOARD EVALUATION

The Companies Amendment Act, 2015 prescribes that there shall be a meeting of Independent Directors during each of the financial years. Accordingly, the Independent Directors who met on 14.12.2023, evaluated the performance of the Directors other than themselves which is followed by an evaluation made by the Board in the presence of the Chairman, at its Meeting held on that date. The evaluation found each of the Directors to have requisite qualification, expertise and track record for performance of their duties as envisaged by law.

MEETINGS

The Board of Directors met 5 (Five) times during the financial year 2023-24 on 08.05.2023, 29.05.2023, 04.08.2023, 10.11.2023, and 08.02.2024. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization, providing direct access to the Chairperson of Audit Committee, the details regarding which have also been given in the Company''s official website.

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

Your Company has always believed in providing a safe and harassment free workplace for every individual working and associating with the Company, through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. A four member Internal Complaints Committee (ICC) is constituted with three lady employees and one lady NGO member. ICC is responsible for redressal of complaints relating to sexual harassment, as envisaged under the provisions of Act and Rules. Hitherto, no complaints were received by ICC.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees who have access to unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

STATUTORY AUDITORS

M/s. Walker Chandiok & Co. LLP (WCC LLP) Chartered Accountants (Firm Registration No. 001076N / N500013)

who were appointed as Statutory Auditors of the Company for a 5 year term at the Annual General Meeting held in the year 2017 were re-appointed by the Board of Directors at their meeting held on 07.02.2022 on the basis of recommendation of the Audit Committee and shall hold office from the conclusion of the 46th Annual General Meeting till the conclusion of the 51st Annual General Meeting of the Company to be held for the Financial Year ended March 31,2027.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Abhilash Nediyalil Abraham, (CP No. 14524, M. No. F10876), Company Secretary-inpractice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI.

ANNUAL RETURN

The Company has a website https://www.gelatin.in where the annual return of the Company will be published complying with the provisions of Section 134 (3) (a) of the Companies Act, 2013.

ACKNOWLEDGEMENT

Your Directors are thankful to the esteemed Shareholders for their continued patronage and the confidence reposed on the Company and its management. Your Directors place on record its sincere appreciation for the support and assistance extended by the State Government and the Kerala State Industrial Development Corporation Ltd. The Board takes this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board places on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment during the year. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their co-operation.

Mar 31, 2023

The Directors have pleasure in presenting the 47th Annual Report and audited financial statements of your Company for the year ended 31st March, 2023.

The Statement of Accounts has been prepared in accordance with Indian Accounting Standards (IND AS) which are applicable to the Company w. e. f. 01st April, 2017 as per the Rules laid down in this regard.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2023 was '' 8024.44 Lakhs comprising of 4,00,00,000 Equity Shares of '' 10/- each totaling to '' 4000.00 Lakhs, 929,412 Optionally Convertible NonCumulative Preference Shares (OCPS) of '' 170/- each totaling to '' 1580.00 Lakhs, 2,00,00,000 Optionally Convertible Non- Cumulative Preference Shares of '' 10/- each totaling to '' 2000.00 Lakhs and 44,44,444 Redeemable Preference Shares of '' 10/- each totaling to '' 444.44 Lakhs.

Redemption of Preference Shares: 9,29,412 Optionally Convertible Non-Cumulative Preference Shares of ''170/- each aggregating '' 15,80,00,040/- redeemed on 17.05.2022.

PERFORMANCE Record Profits & Turnover

The Company recorded the highest turnover and profits in its history during the financial year 2022-23 based on robust demand for all its products and the associated selling price that it could command.

The gross revenue from operations of your Company during the year under review was '' 486.75 Crores as compared to '' 428.51 Crores in the previous year registering a growth of 13%. Profit before tax was '' 78.08 Crores against '' 37.61 Crores in the previous year, registering a growth of 108%. There was an increase in sales realisation per unit of Gelatin in line with the global prices with the growth in Gelatin demand worldwide as also the price of the byproduct Di Calcium Phosphate. The decrease in price of raw material Crushed Bone and Hydrochloric acid has also helped the Company to record higher profits.

Economic Scenario - Domestic and Global Market

The Indian Pharmaceutical industry plays a prominent role in the global market and ranks 3rd worldwide for production by volume and 14th by value. Indian pharmaceutical market size is expected to reach USD 65 Billion by 2024 and is estimated to touch USD 130 Billion in value by the end of 2030. The nation is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume and is also the leading vaccine

manufacturer globally. India also has the highest number of US-FDA compliant Pharma plants outside of USA and is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities as well as a highly skilled resource pool.

The global Gelatin market size was evaluated at USD 7.24 Billion in 2022 and is projected to attain around USD 16.93 Billion by 2032, growing at a CAGR of 8.87% during the forecast period 2023 to 2032. The gelatin market is segmented based on application into food & beverage, pharmaceuticals, and nutraceuticals. Among all, the food & beverage segment holds the largest revenue share of around 57% in 2022. Rapidly increasing use of gelatin in bakery products, jellies, marshmallows, yogurt, and other food products has propelled the growth of the food & beverage segment in the market. Growing consumption of health drinks such as meal replacements, protein shakes, and diet supplementary drinks is seen as a major driver for the growth of the global gelatin market. Gelatin is the popular excipient in capsule shells and softgel capsules. Capsules are the second most preferred delivery format after tablets and contributed 12.5% of dosage forms of the new drugs approved by FDA in 2021. The empty capsules market projections estimate the market to rise at a CAGR of 7% during the period 2019 to 2027. The global empty capsules market size is likely to attain valuation of USD 3.7 Bn by 2027, while the global softgel capsules market size was valued at USD 8.2 billion in 2022 & is estimated to grow to USD 14.73 billion by 2030, at a compound annual growth rate (CAGR) of 7.6% from 2022 to 2030 Softgels make up 25 percent of the total market for nutritional supplements and are the second most-prevalent dosage form behind tablets.

The impact of Ukraine war was significant to all industries across the spectrum. For the Indian Gelatin Industry this was favourable due to the drop in production, supply chain issues and the high energy cost in Europe. The increase in demand for many immunity-building products like nutritional supplements was also one of the growth drivers for the higher Gelatin demand all of which helped the Company achieve higher Gelatin unit sales realisation in 2022-23 compared to 2021-22 period.

Collagen Peptide - capacity utilization, new customer development

The global Collagen Peptide market size was valued at USD 897 Million in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 5.7% from 2023 to 2028. This is attributable to the rising use of the product in various industries such as cosmetics, which is expected to propel market demand. Additionally, the demand is driven by increasing consumer investment in healthcare and well-being. Moreover, the rising importance of improving immunity post-Pandemic has further strengthened the

industry''s growth. The global socio-economic dynamics, along with the growing geriatric population, increased budgetary allocation to the healthcare sector, the growing popularity of a preventive approach to lifestyle diseases and the growing nutraceutical segment, have all been complementing the Collagen Peptide products'' demand. However, the onset of recession in the second half of 2022-23 impacted the global Collagen Peptide market causing the demand to drop in overseas market particularly North America and Asia though the Domestic and African markets were favourable. The lower sales realisation in these markets caused a decrease in overall sales quantity in 2022-23 period. The Company with its new innovative manufacturing process is trying to control the cost of production and thereby tap new markets for increasing the sales. Our major market segments will be beauty from within, joint health, sports nutrition, general wellness and other new functionalities. High functional Collagen Peptide, Diabetes management Peptides are the new products under development.

Plant utilisation at full capacity

During the year, the Company was able to achieve full capacity utilisation for the Gelatin Plant for the year and the Company has successfully executed de-bottlenecking operations to maximise production.

The Company could not operate Collagen Peptide plant at its full capacity, particularly in the second half of 2022-23. The recession effect in North America and Asian markets caused a significant impact on the health supplement demand. Collagen Peptide being mostly sold as health supplement in these markets, its demand reduced more than 60% causing the lower sales in 2022-23. The Company has already formulated plans to revive Collagen Peptide sales by tapping new markets in South East Asia, Asia Pacific and Europe by offering Improved High functional products.

Raw Material availability

The availability of Crushed Bone (CB), the main raw material of the Company has been stable during the year, though it is still to come to the pre-Pandemic level. The price was under pressure during the financial year due to demand- supply gap of good quality CB.

The following are noteworthy:

â¢ The availability of good quality CB at reasonable cost has been a challenge though. Effective sourcing measures with an eye on improving quality has helped to improve the quality of CB up to a certain extent during the year.

â¢ Company was able to reduce indigenously sourced CB prices by 3.2 % during the year; however the cost of indigenously sourced Gel bone and imported bones increased by 15% and 23% respectively due to strong global demand. The Company could source the required quantity

through effective sourcing measures to ensure full utilization of Gelatin Capacity in spite of all these challenges. This has enabled the Company to post robust financial results in the year. Slow movement of Bone meal which is a byproduct of CB also led to a drop in CB processing in certain areas.

Import of Crushed Bone

In view of the deteriorating quality and the increase in price of indigenous Crushed Bone/ Gelbone Company has also been making efforts to import CB. The quality of Gelbone from France and New Zealand are at premium level because of the advanced technologies deployed in these Countries for pre-treatment and processing the material. Your Company imported 2000 MT premium quality Gelbone from France and New Zealand in 2022-23 and is also discussing with other Gelbone manufacturers in Brazil for imports this year.

â¢ With the intent of tapping other source markets, a request has been made to the Central Government for liberalizing import of CB from undetermined BSE risk countries as per OIE norm and the same is now under their consideration.

â¢ During the year, the Company took the initiative of partnering with Crushed Bone suppliers for improving the quality of the material by working in close association with them and providing the requisite technology to them for enabling them to supply good quality material. This project is expected to reduce the impurity and other unwanted material content in Crushed Bone to reinforce the supply chain. Once this partnership is successful, this will be replicated with other potential suppliers which will help the Company in improving overall productivity and reducing the cost.

â¢ The price of fish protein - the raw material required for manufacture of Fish Collagen Peptide has decreased by 20% during the course of the year due to low demand of Collagen Peptide worldwide

Higher Di-Calcium Phosphate (DCP) Price Realisation

During the period 2022-23, the Poultry feed market, had both ups and downs. In the first half of 2022-23, due to the increase in cost of poultry feed components coupled with sluggish poultry demand, DCP prices were on a downward trend. During this period, the import of the substitute product Mono Calcium Phosphate (MCP) from China also was at its peak in the range of 6000 MT/month whereby DCP production exceeded market requirement, causing a drop in DCP prices until October. In the second half of 2022-23, the overall sales price realisation from DCP improved whereby we were able to surpass the level that prevailed in 2021-22.

Operations

i) The Company could contract with overseas

suppliers for quality Crushed Bones (CB) and this has resulted in maintaining the CB prices static during the year. Acid prices dropped by 140%, significantly reducing the cost of production. The per unit price realization has remained constant for Ossein/Limed Ossein and has gone up by 14% for Gelatin though there was a drop of 3% for Bovine Collagen Peptide in line with global trends for similar products. Prices for Fish Collagen Peptide increased by 7%. The price of raw material, fish protein for Fish Collagen Peptide has recorded an increase of 14%, significantly impacting the margins for Collagen Peptide sales. Price negotiations with raw material suppliers and finished product are on to protect the margins. The weakening of Rupee against USD during 2022-23 as compared to 2021-22 has contributed to better sales realisation on exports.

In the backdrop of this situation, your Company exercised close monitoring and strict control over each significant element of cost and achieved appreciable savings notwithstanding the higher costs incurred due to various reasons as described above. The Company could also achieve economies of scale due to higher volume of production of Ossein, Di Calcium Phosphate and Gelatin. The increased usage of low cost hide as the raw material in place of Crushed Bone helped the Company to control the raw material costs as well as have a better bargaining power with suppliers of CB. There was increase in power cost due to increase in tariff as well as higher production levels but the overall cost could be managed as a result of various cost control measures in both the Divisions of the Company. Though the price of LNG, firewood and furnace oil has increased during the year, cost control measures helped the Company to keep costs under control. India has been affected by the Coal shortage consequent to events in China and Russia. The Company''s efforts to create value from wastes by generating gas from residual sludge has further gained momentum during the year with the installation of Anaerobic Digester in Gelatin Division during the year. The operation of sludge dryer substantially reduced the volume of sludge for disposal. Availability and pricing of Coal at Reva Division is posing challenges to manage the costs which might also impact price of alternate fuels like firewood. Factory and Administration overheads increased marginally in line with the overall trend.

ii) The Company could effectively leverage low cost foreign currency loans by negotiating with the Banks and bringing in Banks that provide working capital funds at competitive rates. Interest rates for USD denominated foreign currency loans has

gone up with the new framework linked to the benchmark SOFR. The Company is evaluating foreign currency loans in alternate currencies such as JPY etc. to reduce the overall interest costs.

iii) The products of your Company continued to enjoy robust market demand during the year under review. The entire sale of Ossein/Limed Ossein, 47% of the total sale of Gelatin and 60% of Collagen Peptide was through exports. Your Company has arrangement with its overseas Promoter, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing its customers in a proactive manner in line with the global standards of the NITTA Gelatin Group.

iv) The Pollution Control Board has renewed the validity of the Consent to Operate for the Ossein Division upto 30th June 2023. Your Company is taking steps for the renewal of licence by 30th June, 2023 for both Ossein and Gelatin Divisions. Reva Division''s Consent to Operate issued by the Gujarat State Pollution Control Board has been renewed and is valid upto 23.05.2026.

Environmental Sustainability

Your Company has always prioritized environmental

sustainability as an important indicator to reduce carbon

foot print and has taken various measures in this regard.

i) The Company is in the process of retrofitting its boiler at its Gelatin Division for optimizing its steam generating efficiency.

ii) The Company is installing an Anaerobic Digestor for managing the effluent stream in view of the changes in operating parameters.

iii) The Company''s rain harvesting pond at its Ossein Division has helped to improve the water table in nearby areas in addition to de-risking the Company from any developments affecting water availability, though to a limited extent.

iv) The Company maintains a Miyawaki forest, an eco system promoting thick growth of trees in a measured area as a part of its commitment to greening of the environment.

v) The Company has installed high efficiency floating aerators in the aeration tank at its Ossein Division to improve aeration efficiency and to avoid settling.

vi) The Company has installed Mixers in the conventional biogas tanks at its Ossein Division to improve biogas generation and to avoid settling of sludge.

vii) The Company continues to develop green belts and has developed 4.09 hectares (42.16%) of green belt in and around the Ossein factory premises out of the 9.7 hectares of total industrial area with varieties of plant species.

FINANCIAL HIGHLIGHTS

The operations of the Company for the year 2022-23 have resulted in a pre-tax profit of '' 78.08 Crores (as against a pretax profit of '' 37.61 Crores during the year 2021-22). Details are as under:

(Amount in Rs. Crore)
Particulars	For the year ended 31st March, 2023	For the year ended 31st March, 2022
Sales (including export incentives and net of GST)	486.75	428.51
Other Income	5.31	5.80
TOTAL	492.06	434.31
Net Profit before Depreciation	91.27	51.21
Deducting therefrom:
Depreciation	13.19	13.59
Provision for Tax -	-	-
- Current Tax	22.76	11.24
- Deferred Tax	(3.44)	(0.22)
Profit after Tax from continuing operations	58.76	26.60
Other comprehensive income/(loss) net of tax	0.09	(2.26)
Total comprehensive profit for the year	58.85	24.34
Profit brought forward from previous year	32.96	9.08
Balance Profit available for appropriation	58.76	26.60
Appropriations :
Final dividend on equity shares- paid	3.63	2.72
Total	3.63	2.72
Transfer to General Reserve/Other Reserves	15.80	-
Balance profit carried forward to next year	72.29	32.96
Earnings per share (''
Basic	64.72	29.29
Diluted	64.72	29.29

DIVIDEND

Considering the Company''s performance, the Board has recommended a dividend of '' 7.5 per share (75% on the face value of '' 10/- per share) on the Equity Capital for the year ended 31st March, 2023. The Board has also recommended dividend @5.4029% p.a. on the 929,412 Optionally Convertible Preference Shares of face value of '' 170/- each till the date of repayment on 17.05.2022 (47 days) and a dividend @7.65063% on the 44,44,444 Redeemable Preference Shares of the face value of '' 10/-each for the year ended 31st March, 2023. This dividend payment is out of the current year profits of the Company and is subject to approval of the members at the ensuing Annual General Meeting.

The total outflow on account of dividend will be '' 725.93 Lakhs ('' 482.54 Lakhs in the financial year 2021-22) comprising of '' 44.99 Lakhs on Preference Shares

('' 119.37 Lakhs in the financial year 2021-22) and '' 680.94 Lakhs on Equity Shares ('' 363.17 Lakhs in the financial year 2021-22).

During the year, unclaimed dividend of '' 2,96,177.50 pertaining to the year 2015-16 shall be transferred to the Investor Education & Protection Fund after giving due notice to the members.

RESERVES

The Company has transferred an amount of '' 1580.00 Lakhs as capital redemption reserve upon repayment of the Convertible Preference Shares during the year as part of the requirements of the Companies Act, 2013. The Company has recognized capital reserves amounting to '' 2,750.62 Lakhs on account of the merger (including deferred tax asset on the unabsorbed business loss of Reva Proteins Ltd. carried over from previous years as per tax books for an amount of '' 1,609 Lakhs) and other appropriate adjustments.

Reserves as on 31.03.2023 comprises of Security Premium Reserve of '' 2895.90 Lakhs, equity contribution on External Commercial Borrowings and Preference Share Capital '' 984.43 Lakhs, Special Export Reserve of '' 79.00 Lakhs, General Reserve of '' 7,836.64 Lakhs, Capital Redemption Reserve of '' 1580 Lakhs, Retained earnings of '' 7229.29 Lakhs, Capital Reserve of '' 2,750.62 Lakhs and other comprehensive loss of '' 269.48 Lakhs aggregating to '' 23086.40 Lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Details in respect of other loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes on accounts for the financial year ended 31st March, 2023 and such loans, guarantees and investments are within limits prescribed under that Section.

CREDIT RATING

During the year, rating agency CRISIL has reaffirmed the rating of CRISIL A- and revised its rating outlook as Stable for Long Term Instruments and reaffirmed CRISIL A2 rating for short term instruments.

AWARDS & ACCOLADES

During the year, NGIL received various recognitions as under:

a) Team from Ossein Division won the First prize under medium scale supervisory category in 7th Continuous improvement Kaizen competition 2022 by CII.

b) Team from Gelatin Division won Silver Recognition under medium scale supervisory category in 7th Continuous improvement Kaizen competition 2022 by CII.

c) Team from Ossein Division won First prize (Rhodium) Team from Gelatin Division won Gold Recognition )in 5th National Convention on Innovative Quality Circle organized by ASA Kerala

(Alumni Society of AOTS).

d) Two Silver recognitions under Restorative Category in 44th CII National Kaizen Competition.

e) Team from Gelatin Division won SILVER recognition in SEEM National Energy Management Award 2021.

f) Significant Achievement award from CII for TPM implementation in Gelatin and Ossein Divisions.

g) Special Recognition under Environment & Greenery category by KMA CSR Awards 2023.

h) Gold Recognition from CII for BE maturity assessment.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division.

(b) CAPEXIL plant approval certificate for Ossein Division, Gelatin Division and Reva Division for the export of Ossein, Gelatin and Collagen Peptide.

(d) ISO 9001: 2015 for Quality Management System of the Company.

(e) FSSC 22000 V.5 Certification for Food Safety Management System for Gelatin Division.

(f) FSSAI Certification for manufacturing, import/ export/retail/e commerce of Gelatin, Collagen Peptide, Collagen Peptide retail products.

(g) WHO GMP Certification as per World Health Organisation/Codex for manufacture of Gelatin & Collagen Peptide.

(h) USDMF for Gelatin (Gelling & Non-gelling grade).

(i) Chinese DMF for Gelatin.

(j) Halal (MUI, IFANCA & JUM)/Kosher Certification for Gelatin and Collagen Peptide - JUM Halal for Ossein & Dicalcium Phosphate.

(k) NABL Accreditation for in-house laboratory of Gelatin Division.

(l) ISO 14001:2015 for Gelatin Division for Environment Management System.

(m) ISO 45001:2018 Certification for Occupational, Health and Safety Standards for Gelatin Division and Ossein Division.

(n) ISO 50001:2018 Certification for Energy management system for Gelatin Division & Ossein Division.

(o) Company''s Gelatin Division & Ossein Division have passed the recent TPM Certification Assessment-2022 of SIGNIFICANT ACHIEVEMENT.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division

(b) CAPEXIL plant approval certificate for Ossein Division, Gelatin Division and Reva Division for the export of Ossein, Gelatin and Collagen Peptide

(d) ISO 14001:2015 for Gelatin Division for Environment Management System

(e) ISO 9001: 2015 for Quality Management System of the Company

(f) FSSC 22000 V.5 Certification for Food Safety

Health, Safety and Environment

Compliance with relevant regulations and effective management of related issues is integral to the Company''s philosophy.

1. Health and Safety

The Company is committed to protecting the health and safety of its employees. In addition to the Head (Health, Safety & Environment), each plant has a Safety Officer and Safety Committees comprising of workmen and executive representatives. The Committees meet regularly to review issues impacting plant safety and employee health. Regular health checkup of the employees is carried out through tie-up with reputed hospitals. Various training programs are conducted at the plant on health and safety issues including emergency preparedness, work safety, first aid, etc. Both Ossein and Gelatin factories have received the ISO 45001-2018 certification, which is a testimony to the Company''s commitment in this area.

The following were the major activities carried out during the year:-

â¢ Plant operations of all units are being done as per government guidelines strictly adhering to COVID19 protocol.

â¢ Surveillance audit of ISO 45001-2018 completed at both Ossein Division and Gelatin Division

â¢ Fire license renewed at Ossein and Gelatin Divisions

â¢ Various training programs were conducted to improve employee safety and health awareness.

â¢ A free Counselling and Support Service is in place for Nitta family members.

â¢ Safety day/week celebrations were held at Ossein, Reva, and Gelatin Divisions.

â¢ Mock drills were conducted for equipping the employees for handling emergencies at Ossein, Reva, and Gelatin Divisions.

â¢ As part of the TPM (SHE pillar), various safety improvement initiatives and their reviews were conducted at OD & GD.

â¢ External safety audit was conducted through M/s BVQ at both GD and OD.

â¢ An ergonomic study was conducted at some of the workstations and correction was initiated.

2. Environment

The Company continuously endeavors to enhance Environmental Management and demonstrates its commitment to protect the environment. The factories of the Company are equipped with modern effluent treatment plants for treating and discharging treated water with parameters well within the norms laid down by the respective State Pollution Control Boards. The emissions from the boilers and generator stacks are regularly monitored for compliance. Solid waste from operations is collected in a secure manner and disposed of in authorized locations. Ambient air quality is monitored on regular basis and its compliance ensured with the norms. Our ETP operations have been reinforced with the introduction of new equipment and technologies. Various energy-saving measures and efficiency improvement activities were taken up during the year that reduced the consumption of fuels. Action plans have been drawn up to reduce the consumption of water in the coming years. In the case of solid waste reduction, the Company follows a structured action plan. A polymer house based facility using solar energy has been developed at the Company''s Gelatin Division for drying the sludge emanating out of the operations leading to lower operating costs and carbon print. With a view to reducing the greenhouse effect, the Company is focusing on greenery development at all its locations.

The following were the other initiatives taken in this regard:

â¢ Surveillance audit of ISO 14001-2015 completed for Gelatin Division.

â¢ ISO 14001-2015 certification procedures were initiated in the Ossein division.

â¢ Environmental day celebrations conducted at Ossein, Reva, and Gelatin Divisions.

â¢ An anaerobic digester was installed in the Gelatin Division in the effluent stream for converting effluent (biomass) to biogas reducing fossil fuel consumption and solid waste generation.

â¢ Boiler retrofitting was introduced in the GD boiler, to improve fuel efficiency and the work environment.

â¢ Discussion of converting sludge to biogas in Gelatin Division was initiated to further reduce solid waste from plant operations.

â¢ Solar lighting installation is in progress.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has formulated a well-structured Policy aimed at providing focus and direction to the various activities on CSR. The CSR Policy can be accessed on the Company''s website in the below link.

https://gelatin.in/uploads/homecontent/ CSRPOLICY_20230210052849.pdf. The CSR projects

undertaken by the Company, in accordance with Schedule VII of the Companies Act, 2013, are presented in Annexure I.

The CSR expenditure of '' 58.02 Lakhs incurred by the Company during the year, was in compliance with the statutory requirement of 2% of the average profit for the last three years amounting to '' 46 Lakhs. The Annual Report on CSR activities is annexed herewith as Annexure I. The Company shall carry forward the excess amount of CSR spent amounting to '' 12.02 Lakhs to next year towards CSR expenses as per the provisions of Companies Act.

SECRETARIAL STANDARDS

DEPOSITS

The Company has neither accepted nor renewed any deposits during the financial year 2022-23.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Neither an application made by the Company nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE

There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS

Not applicable

SUSTAINABILITY

Contributing to sustainable development has always been the core ethos of all the operations & business decisions of your Company and has become an even more important element of the overall corporate strategy. We stand committed to the path of Profitable, Sustainable, and Socially Responsible Growth, keeping in mind the interests of all our Stakeholders. We aim to grow and achieve higher Stakeholders returns and in the process, will ensure an increased positive impact on the environment and the society at large and constantly endeavor to

enhance our performance and optimize efficiency across the environmental, social and governance aspects. We encourage involvement of all Stakeholders and ensure that our sustainability framework policies are well communicated, implemented, monitored, and reviewed regularly.

We are and will continue to be increasingly focused on sustainable and socially responsible corporate behavior in everything we do. Our approach mainly centers around the following pillars:

- Environmental Sustainability

Reduction in consumption of water, solid waste, power, fuel and plastic.

- People Sustainability

Employees safety, health, development, engagement, rewards and recognition.

- Social Sustainability

Corporate Social Responsibility (CSR): Education, training, health, women, sports, agriculture and waste management.

- Economic sustainability

Cost reduction, procurement practices and growth initiatives.

Our goal is to set an example for the Gelatin Industry in India in particular and industry in general for world-class sustainability practices. The raw material sources for Gelatin and Collagen Peptide are the by-products from the meat and farmed fish processing industries, which are generally considered as well managed, natural, and renewable resources. Collagen and its derived products are pure, natural proteins and contain neither preservatives nor other additives. They are thus natural and healthy food with a clean label that optimally meets consumer needs in terms of application and sustainability. As such, Gelatin can be considered as a product with a positive impact on overall sustainability since it is part of the circular economy of the Meat Industry.

Sustainable development is an integral part of our business strategy and we ensure that it is built into the complete business cycle-product development, new markets, capital projects, operational management and ultimately product end-use. Health and safety, social and governance issues are built into all stages of the asset life cycle, which help in serving our customers and all Stakeholders over a longer term, wherever they are across the world.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In accordance with the SEBI LODR Regulations, the Company''s policy on materiality of Subsidiaries specifying the criteria for determining the Material Subsidiaries appears in the Company website www.gelatin.in. As per such criteria, the Company''s Subsidiary - Bamni Proteins Limited is a Material Subsidiary as on 01st April, 2022.

SUBSIDIARY COMPANY BAMNI PROTEINS LIMITED

The annual production during the year in this Subsidiary Company was 2703 MT of Ossein and 6103 MT of DiCalcium Phosphate as against 2652 MT of Ossein and 6018 MT of Di-Calcium Phosphate during the previous year.

The operation of this Subsidiary for the year under review has resulted in a pre- tax profit of '' 2634.07 Lakhs ('' 1452.30 Lakhs in the previous year), post-tax profit of '' 2033.29 Lakhs ('' 1091.69 Lakhs in the previous year) and other comprehensive loss of '' 2.45 Lakhs (loss of '' 7.81 Lakhs during the previous financial year).

The statement containing the salient features of the financial statement of the Subsidiary under first proviso to Sub-Section (3) of Section 129 of the Act in Form AOC I is attached as Annexure II.

In accordance with fourth proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing therein its standalone and consolidated financial statements have been uploaded on the website of the Company, www.gelatin.in. Further as per the fourth proviso of the said section, the annual accounts of the

Subsidiary Company and the related detailed information have also been uploaded on the website of the Company, www.gelatin.in.

Annual accounts of the Subsidiary Company and related detailed information shall be made available for inspection to the Shareholders of the Company and Subsidiary Company seeking such information at any point of time at the Registered Office of the Company and Subsidiary Company concerned. Hard copy of details of accounts of Subsidiary shall be furnished to any Shareholder on demand. Further, pursuant to Indian Accounting Standard IND AS 110 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiary.

STATUTORY AUDITORSâ REPORT

Qualification on the internal audit systems in the Reva Division of the Company as referred to in the Consolidated Auditor''s Report has been properly addressed by the Company by appointing a reputed firm of Chartered Accountants having significant internal audit experience which is expected to cover the enhanced reporting requirements as envisaged.

SECRETARIAL AUDITORSâ REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:-_

Sl.

No.

Observations

Management Reply

On inspection of the 271st Board Minutes held on 05.08.2022, it is found that the Company has made direct political contributions to the tune of '' 5,000 during the FY 2022-23 and '' 7,500 during the FY 2021-22 not in compliance with Section 182 of the Companies Act, 2013. Further, indirect political contributions to the tune of '' 2,000 and '' 5,000 are also made during the FY 2022-23 and FY 2021-22 respectively not in compliance with Section 182 of the Act. The Company is advised:

a. to carry out political contributions both direct and indirect only with the approval of the Board and

b. to report the total amount of '' 7,000 as political contribution under FY 2022-23 and '' 12,500 under FY 2021-22 in the Statement of Profit and Loss for the financial year ended 31st March, 2023 as envisaged under Section 182 of the Companies Act, 2013 .

The Board had approved the political contribution at its meeting held on 05.08.2022. In future, political contribution, if any, shall be made only with the approval of the Board of Directors. The amount has been recorded in the financial statements.

2	There was 19 days of delay in redeeming the 929412	This was due to the time taken for the completion of the
	Optionally Convertible Preference Shares of '' 170	necessary procedural formalities including certification
	each allotted to Nitta Gelatin Inc, Japan, the promoter	from an independent professional and the time taken
	of the Company resulting in their continuance as	by the Authorised dealer bank for processing the
	Preference Shareholder after due date which has larger implication of inviting preferential rights. The Company is advised to redeem the preference shareholding in time in future.	documents required.

COLLABORATORS

The Collaborators of your Company continue to be the reliable source of support and guidance for the Company in its key initiatives. Their support in areas like technology, product development, marketing, quality improvement and training of personnel, apart has contributed significantly to the growth of the Company. Nitta Gelatin Inc., Japan has provided considerable support both by way of technical guidance and financial support for the scheme of revival of its Reva Division. Kerala State Industrial Development Corporation Ltd., the other Promoter is equally supportive for development of your Company.

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Annual Report excluding the details of employees receiving remuneration in excess of the limits prescribed under Section 197 of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being sent to the Shareholders of the Company in terms of first proviso to Section 136(1) of the Act 2013. The annexure is available for inspection at the Registered Office of the Company during business hours and any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

INTERNAL CONTROL SYSTEMADEQUACY OF INTERNAL CONTROL SYSTEMS

through well documented Standard Operating Procedures, policies and process guidelines. These are designed to ensure that transactions are conducted and authorized within defined authority limit commensurate with the level of responsibility for each functional area. The Company''s accounting and reporting guidelines ensure that the transactions are recorded and reported in conformity with the generally accepted accounting principles.

The Company has engaged a professional firm of Accountants with long years of experience to carry out the internal audit function. The management has not imposted any limitation on the scope and authority of the internal audit function. The internal audit function evaluates the efficacy and adequacy of internal control systems, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. To maintain its objectivity, effectiveness and independence, internal audit is being carried out on a quarterly basis and reports thereon, along with the remarks of the process owners on each of the observations of audit are placed before the Audit Committee of the Board. The Audit Committee reviews each of the Internal Audit reports as a separate item of agenda along with the internal/ statutory auditors and the management representatives wherein the Committee gives its advice/suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee, the process owners undertake requisite corrective action in their respective areas thereby further strengthening the control systems. Action Taken Reports are also reviewed by the Audit Committee for each actionable item. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONTROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested by the management and no reportable material weakness in the design or operations was observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Company has adopted accounting policies which are

in line with the Accounting Standards and the Companies Act and with the generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the auditors and are approved by the Audit Committee.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring procedures are in place.

RISK MANAGEMENT

The Board of Directors of the Company has entrusted the management of the Company to evaluate and manage various risks faced by the Company and appropriately apprise the Board/Audit Committee periodically. Accordingly, the management has constituted a Risk Management Committee comprising of Senior Management personnel to develop and implement a Risk Management Policy including identification therein of elements of risks which in the opinion of the Management and the Board may impact the operations of the Company. The Board of Directors reviews the evaluation of risks and the mitigation measures taken by the Company in managing such risks to sustain the operations of the Company for the foreseeable future. Some of the key risk areas identified for mitigation and corrective action include:

â¢ Crushed Bone availability and pricing patterns

â¢ impact of the high cost of crushed bone on the cost of production

â¢ safety and security policies of the Company

â¢ succession planning for key executives

â¢ impact of the National Green Tribunal''s Orders

â¢ significant litigation against the Company having material financial impact

â¢ moves of competitors

â¢ water scarcity for operational requirements

â¢ emergence of alternate substitutes for the products of the Company

â¢ adverse forex rate fluctuations

â¢ risk of losing pricing premium commanded by the Company due to emergence of alternate Halal certifications

â¢ sludge reduction

â¢ Potential loss of fish CPT business in India due to non- availability of raw material within India

MATERIAL POST BALANCE SHEET EVENTS

There are no material post balance sheet events which require adjustments in accounts as per the provisions of the accounting standards.

APPLICABILITY OF COST AUDIT REQUIREMENTS

PROCESS REVIEW/FORENSIC INVESTIGATION

The management has identified an alleged wrong doing by an employee in the stores section of the Company in connivance with vendor/vendors pertaining to weighment of the raw material-Crushed Bone.

BDO India LLP was entrusted to do a forensic investigation, the scope of which inter alia was to examine the end to end process for sourcing of Crushed bone which is a raw material of the Company.

During the course of inspection during 1^st April 2022 till 30^th September, 2022, the analysis of differences in the quantities of Crushed Bone- raw material received as per manual palletization sheets and the Avery/SAP Data indicated an estimated financial loss of '' 58.43 lakhs to the Company in respect of the transactions.

During the period - March 2021 till March 2022, the total estimated loss in the absence of palletization sheets which has been arrived at on approximation (based on the data for the period from 1st April 2022 to 30th September, 2022) was '' 142.4 Lakhs. The quantification of the difference noted in the weighment for the period March 2021 to March 2022 was based on the invoices identified by the management as relating to the identified vendor for the said period.

The loss has already been accounted as the Company account consumption based on the recorded quantity of receipt, due to which there will not be any revision in the approved Financial Statements of the Company.

The Company will be continuing its efforts for the recovery of money from the delinquent employee and the Vendor with the assistance/guidance of police authorities/ other regulatory agencies and will be pursuing other legal proceedings in accordance with the advice of the lawyers.

Additional validation procedures have been brought in to confirm the weighment quantity before the release of payment to the suppliers.

RESPONSIBILITY STATEMENT OF DIRECTORS

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 of the Companies Act, 2013:

a) that in the preparation of the annual accounts for the year ended 31st March, 2023, the applicable Indian Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected such accounting policies as mentioned in Note No. 2 of the notes to the Financial Statements 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 as at 31st March 2023 and of the profit of the Company for the year ended on that date;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Companies Act as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions that have taken place actually are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally, material Related Party Transactions foreseen in the year ahead were approved by the members. Particulars of contracts of arrangements with Related Parties referred to in sub section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (LODR) Regulations. A separate section on corporate governance under the Regulation, along with a certificate from the Auditors confirming the compliance, is annexed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been

prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Indian Accounting Standards IND AS 110 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the SEBI (LODR) Regulations 2015 and form part of the Annual Report.

DIRECTORS

Mr. Philip Chacko M was appointed as Managing Director of the Company on 01.04.2022 in place of Mr. Sajiv K. Menon whose term of office has expired on 31.03.2022. Mr. Sajiv K. Menon was appointed as NonExecutive Non-Independent Director on 06.05.2022 to make use of his wide experience across industries and also his experience in the Company. Prof. Dr. M.K. Chandrasekharan Nair was appointed as an Independent Director on 06.05.2022. The Board is of the opinion that Dr. MKC Nair possess integrity, relevant expertise and experience which will benefit the Company in the long run.

Mr. M. G Rajamanickam IAS ceased to be Nominee Director on 04.08.2022 upon withdrawal of his nomination by KSIDC. Whereafter, Mr. S. Harikishore IAS was appointed as Nominee Director on 04.08.2022 by KSIDC.

The Board of Directors had constituted a Nomination and Remuneration Committee (NRC), which has the following members as on date:-

1. Mr. E. Nandakumar

2. Mr. Yoichiro Sakuma

3. Mrs. Radha Unni

The terms of reference of the NRC are as follows:-

1. The NRC shall identify persons who are qualified to become Directors who may be appointed in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every Director''s performance.

2. The NRC formulates the criteria for determining qualifications, positive attributes and independence of a Director for recommending to the Board and also a policy relating to the remuneration for the Directors, Key Managerial Personnel and senior management personnel meaning thereby employees of the Company who are members of core management excluding Board of Directors. This would comprise all members of management one level below the Executive Directors, including all functional heads.

3. The NRC formulates the Remuneration policy to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate personnel as are herein referred at (2) above of the capability required to run the Company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to Whole-time Directors, key managerial personnel and senior management involves a balance between fixed and variable pay reflecting short and long-term performance objectives appropriate to the

working of the Company and its goals.

The policy has been disseminated in the Company website: https://gelatin.in/uploads/homecontent/ NOMINATION%20AND%20REMUNERATIOJN%20 POLICY_20221128064418.pdf

AUDIT COMMITTEE

The Company has an Audit Committee consisting of the following members:

1. Mr. V. Ranganathan (Chairman)

2. Mrs. Radha Unni

3. Mr. E. Nandakumar

There were no instances where the Board had not accepted any recommendation of this Committee.

More details on the committee are given in the Corporate Governance Report.

INDEPENDENT DIRECTORS

Independent Directors of the Company had given declaration stating that they conform to the criteria prescribed for an Independent Director as mandated by the relevant regulatory prescription viz, Section 149(7) of the Companies Act and Regulation 25 of the SEBI LODR Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Rule 8(5) (iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors hereinabove given, it is brought to the notice of shareholders that Mr. P. Sahasranaman continues as Chief Financial Officer (CFO). Mr. G Rajesh Kurup retired from service on 31.05.2022, whereafter, Mr. Vinod Mohan was appointed as Company Secretary on 01.06.2022.

BOARD EVALUATION

The Companies Amendment Act, 2015 prescribes that there shall be a meeting of Independent Directors during each of the financial years. Accordingly, the Independent Directors who met on 15.03.2023, evaluated the performance of the Non-Independent Directors and the Board as a whole, followed by the review of the performance of the Chairman. The evaluation found that the Non-Independent Directors are playing an active role in the Committee and the Board deliberations.

MEETINGS

The Board of Directors met 5 (Five) times during the financial year 2022-23 on 06.05.2022, 05.08.2022, 09.11.2022, 02.01.2023 and 08.02.2023. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

VIGIL MECHANISM

The Company has established a vigil mechanism for

Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization, providing direct access to Chairperson of Audit Committee, the details regarding which have also been given in the Company''s official website.

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

PREVENTION OF INSIDER TRADING

STATUTORY AUDITORS

M/s. Walker Chandiok & Co. LLP (WCC LLP) Chartered Accountants (Firm Registration No. 001076N/500013) who were appointed as Statutory Auditors of the Company for a 5 year term at the Annual General Meeting in the year 2017 were reappointed by the Board of Directors at its meeting held on 07.02.2022 on the basis of recommendation of Audit Committee and shall hold office from the conclusion of the 46th Annual General Meeting till the conclusion of the 51st Annual General Meeting of the Company to be held for the Financial Year ended March 31,2027 subject to the approval of the members at the General Meeting. The item regarding the reappointment of Statutory Auditors is put up for transaction at the forthcoming Annual General Meeting and the Notice for the Meeting makes a reference of the same as part of Ordinary Business.

SECRETARIAL AUDIT

Secretary-in-practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI.

ANNUAL RETURN

The Company has a website https://www.gelatin.in where the annual return of the Company will be published complying with the provisions of Section 134 (3) (a) of the Companies Act 2013.

ACKNOWLEDGEMENT

Your Directors are thankful to the esteemed Shareholders for their continued patronage and the confidence reposed on the Company and its management. Your Directors place on record its sincere appreciation for the support and assistance extended by the State Government and Kerala State Industrial Development Corporation Ltd. The Board takes this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board places on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment during a very challenging year. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their unstinted co-operation

Mar 31, 2018

The Directors have pleasure in presenting the 42^nd Annual Report and audited financial statements for the year ended 31st March, 2018.

The Statement of Accounts have been prepared in accordance with Indian Accounting Standards (IND AS) which have been made applicable to the Company w.e.f. 1^st April, 2017 as per the Rules laid down in this regard. Accordingly, accounts of the Company have been restated w.e.f. 1^st April, 2016 (being comparative year for the current financial year) as per the IND AS requirements.

FINANCIAL HIGHLIGHTS

(Rs. in Crores)

Particulars	For the year ended 31^st March, 2018	For the year ended 31^st March, 2017
Sales (including export incentives and net of Excise Duty, VAT/GST)	326.44	340.79
Other Income	4.37	9.36
TOTAL	330.81	350.15
Gross Profit before Depreciation	34.26	42.31
Deducting therefrom:
Depreciation	11.91	10.48
Provision for Tax -
- Current Tax	10.95	8.91
- Deferred Tax	(3.17)	2.43
Profit after Tax from continuing operations	14.57	20.49
Other comprehensive income (net of tax)	(0.70)	0.60
Total comprehensive profit for the year	13.87	21.09
Profit brought forward from previous year	14.68	3.87
Balance Profit available	29.25	24.36
for appropriation	29.25	24.36
Appropriations :
Dividend on Optionally Convertible Preference Shares	0.85	0.79
Final dividend on equity shares at 25%	2.27	2.27
Tax on dividend	0.64	0.62
Transfer to General Reserve	-	6.00
Balance profit carried forward to next year	25.49	14.68
Earnings per share (Rs.)
Basic	15.27	23.23
Diluted	15.27	23.23

DIVIDEND

The Board has recommended a dividend @5.4029 % p.a. for the year ended 31^st March, 2018 on the 929,412 Optionally Convertible Preference Shares of face value of Rs. 170/- each, subject to approval of the members at the ensuing Annual General Meeting, .

Considering the Company''s performance and financial position for the year under review, the Board has also recommended a dividend of Rs. 2.5 per share i.e. 25% of the face value of Rs. 10/- per share on the Equity Capital for the year ended 31^st March, 2018, subject to approval of the members at the ensuing Annual General Meeting.

Together with Corporate Tax on dividend, the total outflow on account of dividend will be Rs. 376.55 lakhs including Rs. 85.36 lakhs on Preference Shares (Rs. 85.36 lakhs for the financial year 201617), vis-a-vis Rs. 375.93 lakhs paid for the financial year 2016-17 (paid in 2017-18).

During the year, unclaimed dividend of Rs. 3.86 lakhs pertaining to the year ended 31^st March, 2010 was transferred to the Investor Education & Protection Fund after giving due notice to the members. Besides, upon complying with statutory formalities prescribed under the IEPF (Accounting, Audit, Transfer and Refund) Rules, 23706 shares corresponding to 171 holdings (records) which represent holdings with respect whereof dividend was not claimed and paid for a consecutive period of seven years, were transferred to the account of IEPF Authority, maintained with National Securities Depository Limited (NSDL) and the fact of the same was also apprised to the Board (Agenda 252.08 I) at its meeting dated 03-02-2018.

SHARE CAPITAL

The Authorised Share Capital of your Company is Rs. 358,000,040/- (Rupees Thirty Five Crores Eighty lakhs and Forty only) (comprising of two crore Equity Shares of Rs. 10/- each and 929,412 Optionally Convertible (non-cumulative) Preference Shares (OCPS) of Rs. 170/- each). Nitta Gelatin Inc., (NGI) Japan had not exercised the option to convert the OCPS shares into Equity Shares at the end of 18 months from date of its allotment as per terms of the issue.

RESERVES

No amount is transferred to General Reserve during the year as transfer of profit to Reserve Rules for declaration of Dividend is no longer in force. The Company has provided for an amount of Rs. 17.04 crores towards impairment in value of investments made in Reva Proteins Ltd. on account of accumulated loses in the said Company caused mainly due to restrictions in effluent discharge which have impacted the capacity utilization levels significantly. Such impairment provision is adjusted in the credit balance in the Profit and Loss account as stipulated by transitional provisions of IND AS. Reserves as on 31.03.2018 comprises of Security Premium Reserve of Rs. 2895.90 lakhs, equity contribution on External Commercial Borrowings and Preference Share Capital Rs. 664.95 lakhs, Special Export Reserve of Rs. 79.00 lakhs, General Reserve of Rs. 7836.64 lakhs, credit balance in the Profit and Loss Account of Rs. 2549.05 Lakhs and other comprehensive income reserve of (Rs. 4.89) lakhs aggregating to Rs. 14020.65 lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

No Corporate Guarantee was provided during the year. However, the Company has received a request for providing Corporate Guarantee from Bamni Proteins Ltd. (Subsidiary Company) to the lenders towards its borrowings for working capital requirement to the extent of Rs. 750 lakhs and from Reva Proteins Ltd. (Subsidiary Company) towards its short terms working capital requirements to the tune of Rs. 500 lakhs.

Details in respect of other loans, guarantees and investments covered under the provision of Section 186 of the Companies Act, 2013 are given in the notes on accounts for the Financial Year ended 31^st March, 2018.

PERFORMANCE

The gross revenue from operations of your Company during the year under review was Rs. 326.44 crores. There was decrease in unit sales realisation per unit of Gelatin in line with the decline in Gelatin prices worldwide which impacted the gross revenue from operations. Though there was decrease in sales realization of Gelatin, an exception was with respect to Collagen Peptide where there was increase in unit sales price.

The District Administration of Thrissur District, where one of the plants of the Company is situated, had ordered reduction in drawal of water by 80% for the period commencing from February 2017 and until the onset of monsoon, as a fall out of deficient monsoon in January 2017. This has affected the operations of the Ossein Division of the Company in the I^st quarter impacting revenue. Though the Company could manage to sustain the operations of Gelatin plant by procuring Ossein from the local manufacturers, the resultant higher cost of operations has impacted the operational results of the Company in the said quarter. In addition crushed bone charging was stopped from 23rd October, 2017 to 15^th November, 2017 due to sabotage on the outlet effluent pipeline leading to restriction in discharge of effluent water. A stone grinder (ural) was removed from the pipeline with the help of the Government and the local police.

During the year, approval was received from the Irrigation Dept., Govt. of Kerala for rerouting the effluent pipeline at Ossein Division which was passing through a private property and was subjected to frequent attacks by the agitators for disrupting the Company''s operations. Accordingly, the Company has rerouted the effluent pipeline by by-passing the private property, in the month of January 2018.

With some of the Gelatin plants not in full scale operation during the year and the resultant low demand for crushed bone, crushed bone prices have decreased by 13% during 2017-18 as compared to the previous fiscal. However, the per unit price realization has come down for Ossein by around 6%, DCP by 3%, Gelatin by 5% during the year due to lower crushed bone prices. The sales of Collagen Peptide had witnessed a revival; however supply of raw material - fish protein - on account of regulatory issues / clearances continued to pose a challenge to the Company in terms of customer serviceability. The strengthening of the Rupee against USD during 2017-18 as compared to 201617 has also contributed to lower sales realisation on exports.

Despite the reduction in prices as explained above, the total sales turnover could be maintained with improvement in volume of sales on all the products except Gelatin (sales volume of Gelatin has declined by 2% during the year).

The decrease in price of crushed bone (though its poor quality continues to be a major concern) has helped the Company in maintaining profitability during the year.

In the backdrop of this situation, your Company exercised close monitoring and strict control over each significant element of cost, and achieved appreciable savings. In respect of utilities, the usage of LNG has increased due to maintenance issues in wood fired boilers but at the same time, efficiency of wood fired boilers has improved. There was significant reduction in power cost also as a result of various cost control measures in both the Divisions of the Company. Though the price of LNG, firewood and furnace oil has increased during the year, cost control measures helped the Company to keep the costs under control. Factory overheads witnessed cost increase due to the comprehensive annual shut down taken in Gelatin Division during the year and the disposal costs incurred for clearing the settled sludge in the aeration tanks of effluent treatment plant of both the Divisions. Administration overheads could be maintained at last year levels by establishing appropriate controls.

With regard to finance cost, Company could effectively leverage low cost foreign currency loans though interest rates based on LIBOR has gone up to 2.30% from 1.30% during the course of the year.

The sales mix during the year was such that the Company could achieve a reduction in selling expenses such as freight charges on products, discount and commission on sales, etc. aggregating to a saving of Rs. 0.48 crores during the year under review.

As a result of the above, the operations of the Company for the year 2017-18 have resulted in a pre-tax profit of Rs. 22.34 crores (negative impact of Rs. 6.67 crores due to restatements on account of changes in accounting treatment as well as Ind AS Accounting adjustments) as against Rs. 31.83 crores (which included Rs. 4.08 crores towards restatement of foreign exchange gains made during the year 2016-17 on account of change in accounting treatment.), inspite of the disruption in operations in Ossein Division in Q1 of the financial year. The results of the financial year 2016-17 have been restated in accordance with IND AS Accounting Standards during the financial year 2017-18.

The products of your Company continued to enjoy robust market demand during the year under review. The entire sale of Ossein / Limed Ossein, 46.08% of the total sale of Gelatin and 47.80% of Collagen Peptide was through exports. Your Company has arrangements with its overseas promoter, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing its customers in a pro-active manner in line with the global standards of NITTA Group.

The major production facilities of your Company are the Ossein Plant at Koratty, Thrissur District and Gelatin / Peptide Plant at Kakkanad, Ernakulam District, Kerala. All the factories owned by the Company are being operated in strict compliance with the applicable standards / norms prescribed by the Statutory authorities including the State Pollution Control Board. The Kadukutty Panchayat in Thrissur District did not renew the factory license for its Ossein Plant at Koratty for the year 2017-18 and the Company have moved the matter before the High Court of Kerala. The Court has ordered status quo in the matter till final disposal of the writ petition filed by the Company. In addition, during the year Company has also applied for Panchayat Licence for the financial year 2018-19 which was also rejected by the Panchayat. The High Court has stayed the operation of the Panchayat''s orders upto 8^th June, 2018. The last review of the effluent management system at Ossein Division by the National Environmental Engineering Research Institute (NEERI) has confirmed the efficacy of the system on the basis of which the Pollution Control Board has renewed the Consent To Operate upto 30.06.2018. Based on expert legal advice, the earlier court verdicts and the facts of the situation as explained above, the Company expects a favourable resolution of the matter.

The National Green Tribunal(NGT) has passed an order dated 27.02.17, disposing different applications moved before that honorable forum challenging the operations of the Company as violative of the environmental regulations in force. The NGT while disposing of the application has concluded that on the analysis of the entire facts and materials that

- there is no material to establish that the industry has discharged sludge along with the treated liquid effluent into the Chalakkudy river.

- The sludge generated by the industry is non-hazardous and non-toxic.

- The effluent treatment plant is functioning efficiently and as of now the discharge of the treated effluent from the ETP to the Chalakkudy river has no adverse impact on the river water or the ground water.

However NGT by applying the precautionary principle to avoid any possibility of causing pollution to both air and water in the environment, directed the Company to install certain equipment to reinforce the effluent treatment process and technologies, besides adopting methods which help recycling of treated effluent and minimize the discharge into the river. The order also gave directions to the Kerala State Pollution Control Board (KSPCB) for amending some of the discharge standards.

The Order had detailed prescriptions for implementation in a time-bound manner. Whereas there were certain directions which needed a relook on a factual as well as practical consideration of the issues involved, the Company had filed a Petition before the Hon''ble Tribunal for a review of such directions. The Hon''ble NGT vide their Order dated 08.11.2017 allowed the review petition in part by way of modification of one of the directions, in view of practicality of implementation. The Company has subsequently filed a writ petition before the

Hon''ble High Court of Kerala pleading stay of operation of NGT orders dated 08.11.2017 for the remaining directions. The High Court has accepted a jurisdiction before it which was challenged by the Action Council and has stayed the operation of NGT Orders until further orders vide Order dated 14.03.2018. All the other directions which required implementation on the Company''s part have already been made except the one relating to installation of online monitoring systems for KSPCB which is expected to be completed by end July 2018.

The Company co-sponsored Japan Mela (organized by the Indo Japan Chamber of Commerce, Kerala) conducted in the 1st week of December, 2017 with a dedicated stall of the Company for display of materials relating to Nitta Gelatin Group worldwide. The Company''s major products including Gelixer and Agri products and CSR initiatives were displayed in the said Mela and received much public attention.

Operations Excellence fairs were conducted at the Ossein and Gelatin Divisions of the Company with active involvement from employees. Some of the nearby Panchayat members and Directors of the Company also participated in the fair which showcased the various types of products offered and also various initiatives pursued by the Company for the public at large.

MERGER OF SUBSIDIARY - REVA PROTEINS LTD.

The Subsidiary Company Reva Proteins Ltd. which began commercial production in the year 201213 could not be operated at planned capacity utilization levels due to restriction on discharge of treated effluent on account of non-commissioning of the marine discharge effluent pipeline as promised by the Gujarat Government. The delayed commissioning of the pipeline has resulted in accumulated losses for the Company for the past several years. Though the marine effluent discharge line was made operational during the year, after pressure testing and amendment in consolidated consent authorization as per marine norms as stipulated by Gujarat State Pollution Control Board, the high ammoniacal nitrogen content in effluent stream following the maintenance issues in marine effluent pipeline for discharge has also affected the capacity utilization levels for the year 2017-18 and significantly eroded the quantum of inventories and receivables with corresponding reduction in drawing power for working capital arrangement.

Under such circumstance, the Board of Directors of Reva Proteins Ltd. (Transferor Company) and Nitta Gelatin India Ltd. (TransfereeCompany) resolved at their meeting dated 03.02.2018 subject to required Regulatory approvals, to merge the activities of the former with the latter such that a total of 4,444,444 Redeemable Preference Shares of Rs 10 each, be credited as fully paid up Preference Share capital of the Transferee Company as consideration for the other share holders, in the following share exchange ratio;

-One Hundred (100) Redeemable Preference Shares of NGIL of INR 10/- each fully paid up for every One Hundred and Eight (108) Equity Shares of RPL of INR 10/- each fully paid up with the following terms:-

a. Such Preference Shares shall be entitled to a fixed dividend of 5% 6 months USD LIBOR as on the record date over a non-cumulative basis.

b. A right to exercise put and call option for repayment shall be given at the expiry of 5 years from the date of allotment subject to such approvals as may be required.

c. Such Preference shares shall be redeemable at par on the expiry of seven years from the date of allotment.

The Board of both Companies having approved the merger, it awaits clearance from Regulatory bodies - BSE / SEBI, besides the approval from the National Company Law Tribunal (NCLT).

CREDIT RATING

During the year, rating agency CRISIL has reaffirmed the rating of CRISIL A-/ and maintained outlook as "Negativeâ for Long Term Instruments and retained "CRISIL A2 â rating for short term instruments.

AWARDS & ACCOLADES

During the year your Company was awarded:

a. the second prize in its category for Excellence in Cost Management instituted by the Institute of the Cost and Management Accountants of India for the year 2016; and

b. Best Corporate Citizen from NIPM for Green Initiatives and CSR.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division

(b) HACCP Certificate for Ossein Division and Gelatin Division for food safety.

(d) ISO 9001:2015 for Quality Management System of the Company.

(e) ISO 18001:2007 for Ossein and Gelatin Divisions of the Company.

(f) FSSC Certification for Food Safety Management System for Gelatin Division

(g) FSSAI Certification for manufacturing, import/export of Gelatin & Collagen Peptide

(h) WHO GMP Certification for manufacture of Gelatin & Collagen Peptide

(i) Halal/Kosher Certification for Gelatin and Collagen Peptide

(j) NABL Accreditation for in-house laboratory

(k) OSHAS Certification by NVTQC for Occupational, Health and Safety Standards for Gelatin Division

(l) Sanitary Certificate received from the Health Inspector, Public Health Centre, Kathikudam for Ossein Division vide Order dt. 20.02.2018 for satisfactory compliance of sanitary conditions based on verification. Company''s factory license was often rejected by the Panchayat citing non-receipt of sanitary certificate in the past.

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations and effective management of the related issues is an integral part of the Company''s philosophy and your Company stands committed to continually improve on these objectives. The Company, year on year, increases its focus on improving matters relating to Health, Safety and Environment.

1. Health and Safety

The Company is committed to promoting the health and safety of its employees. In addition to the Head (Safety) for the Company, each of the plants of the Company is having a Safety Officer and Safety Committees which include representation from workmen. The Committees meet regularly to review issues impacting plant safety and employee health. Regular health checkup of the employees is carried out through reputed hospitals. Various training programmes are conducted at the plant on health and safety issues including emergency preparedness, work safety, first-aid, etc. The Company is augmenting resources to further strengthen the level of safety at its plants. Our Ossein factory has received the OSHAS certification during the year, which is a testimony to the Company''s commitment in this area. During the year, the Company has also entered into an agreement with Nitta Gelatin Inc. (NGI) where by as part of services in the areas of Environment, Health & Safety, NGI shall provide qualified expertise for providing assistance to ensure safety of operations of the Company and its subsidiaries. Responsibilities of such qualified expertise shall include benchmarking, sharing information on incidences in group companies, establishing robust and standardized procedures and controls, audits, action item, review and follow up, developing appropriate key performance indicators and regular reporting to the Company, NGI and Company''s Subsidiary managements.

2. Environment

The Company continuously endeavors to improve on Environmental Management and through all activities demonstrate its commitment to protecting the environment. The factories of the Company are equipped with modern effluent treatment plants for treating and discharging treated water with parameters well within the norms laid down by the respective State pollution Control Boards. The emissions from the boilers and generator stacks are regularly monitored for compliance. With the commissioning of two biogas generators at its Ossein plant, substantial portion of the raw effluent from the production process is now being subjected to biomethanisation thereby reducing the organic load in the subsequent treatment process whereby generation of sludge is reduced considerably and the biogas generated is being used for meeting the Company''s energy requirements. Diffused Air floatation System for effective grease removal and removal of suspended solids, Primary Treatment System Reinforcement and ETP Automation for sound effluent management system, introduction of Chemical treatment and Activated Carbon System in Fresh Water Treatment Plant for improving the water quality and improving the process stability, addition of 3 nos diffused aerators in ETP System and commissioning of multi grade Sand Filters before final discharge point of treated water are some of the initiatives carried out during the year to ensure protection of the environment and sustainability of operations at Ossein Division.

M/s. National Environmental Engineering Research Institute (NEERI), a constituent laboratory of the Council of Scientific & Industrial Research, Govt. of India, inspected the plant for assessment of implementation status of their own recommendations in June 2016 and observed that the Company has complied with the implementation of all the recommendations of NEERI excepting one i.e. cleaning of weeds along the banks of Chalakudy river for want of approval from regulatory authorities for carrying out the activity. They have also observed that based on the physio - chemical analysis of various effluent samples of ETP, the final treated effluent being discharged into Chalakudy river conforms to the discharge Standards stipulated by the KSPCB for the Company and also the CPCB General Standards for Discharge. It was also confirmed that there is no adverse impact on the River water quality because of the discharge of treated water from the factory in to the river.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has formulated a well structured Policy aimed at providing focus and direction to the various activities on CSR. The Company is committed to identifying and supporting programmes aimed at:

- Empowerment of the disadvantaged / weaker sections of the society through education, skill development and the like;

- Provision of access to basic necessities like healthcare, drinking water & sanitation;

- Supporting environmental and ecological balance through afforestation, soil conservation, conservation of flora and similar programmes;

- Promotion of sports through training of sports persons;

- Rural development projects; etc

Total CSR expenditure incurred by your Company during the year was Rs. 43.50 lakhs meeting the statutory requirement of 2% of the average profit for the last three years.

- A CSR Committee has been constituted to act in an advisory capacity to the Board and Management with respect to policies and strategies that affect the Company''s role as a socially responsible organization.

- The CSR Committee monitors the progress of the projects and ensures that the implementation of the projects is in compliance with the CSR objectives and Policy of the Company.

-The CSR Policy can be accessed on the Company''s website www.gelatin.in. The CSR projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013. Annual Report on CSR activities is annexed herewith as Annexure I.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In view of the change in the definition of Material Subsidiary, Reva Proteins Limited which was a Material Subsidiary until 2015-16 was not a Material Subsidiary as per the LODR Regulations 2015. In accordance with LODR Regulations, the Company''s policy on materiality of Subsidiaries specifying the criteria for determining the Material Subsidiaries is available in the Company website www.gelatin.in. There has been no change in the nature of business of subsidiaries during the year under review.

As per the above criteria, the Company has no Material Subsidiary as of today.

SUBSIDIARY COMPANIES

BAMNI PROTEINS LIMITED

The annual production during the year in this Subsidiary Company was 2580 MT of Ossein and 6000 MT of Di Calcium Phosphate as against 2324 MT of Ossein and 5885 MT of Di-Calcium Phosphate during the previous year.

The operation of this Subsidiary for the year under review has resulted in a post-tax profit of Rs. 82.51 Lakhs (Rs. 71.96 lakhs in the previous year), other comprehensive loss of Rs. 5.35 lakhs (Rs. 2.82 lakhs in the previous year) and total comprehensive income of Rs. 77.16 lakhs (Rs. 69.14 lakhs in the previous year). Pre-tax profit during the year under review where Rs. 114.61 lakhs as against a pretax profit of Rs. 111.35 lakhs during the previous financial year.

REVA PROTEINS LIMITED

At Reva Proteins Ltd., owing to restrictions in the quantum of discharge of treated effluent, there has been considerable under utilization of capacity in the Ist Qtr. of the financial year. The clearance of the Consent to authorise and operate for Reva Plant by the Gujarat State Pollution Control Board was received in the month of June 2017 after the commissioning and high pressure testing of the effluent pipeline was completed in January 2017. In addition, the high ammoniacal nitrogen content in effluent stream following plant stoppages due to the maintenance issues in marine effluent pipeline for discharge has also affected the capacity utilization levels for the year 2017-18. Arising out of the above, the financial year 2017-18 witnessed a net loss of Rs. 1270.81 lakhs and a cash loss of Rs. 1029.89 lakhs as against a net loss of 871.87 lakhs and a cash loss of Rs. 620.72 lakhs during the previous financial year. Other comprehensive income during the current year was Rs. 1.27 lakhs as against Rs. 0.49 lakhs for the previous year. The annual production during 2017-18 was 1091 MT of Ossein, 450 MT of Dry Limed Ossein and 1519 MT of Di Calcium Phosphate as against 1909 MT of Ossein, 1096 MT of Dry Limed Ossein and 843 MT of Di Calcium Phosphate during the previous year. Your Company has proactively undertaken a comprehensive scheme for revival of the Subsidiary including merger of the same with the Company.

In accordance with Section 129(3) of the Companies Act, 2013, a consolidated financial statement of the Company and all its Subsidiary companies has been prepared, which is forming part of the Annual Report.

The statement containing the salient features of the financial statement of both the subsidiaries under first proviso to Sub-section (3) of Section 129 of the Act in form AOC I is attached as Annexure II.

In accordance with fourth proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing therein its standalone and consolidated financial statements has been uploaded on the website of the Company, www. gelatin.in. Further as per the fourth proviso of the said section, the annual accounts of the Subsidiary Companies and the related detailed information have also been uploaded on the website of the Company, www.gelatin.in.

Annual accounts of the Subsidiary Companies and related detailed information shall be made available to the shareholders of the Company and Subsidiary companies seeking such information at any point of time. The annual accounts of the Subsidiary Companies shall also be made available for inspection by any shareholder at the Registered Office of the Company and Subsidiary companies concerned. Hard copy of details of accounts of subsidiaries shall be furnished to any shareholder on demand. Further, pursuant to Indian Accounting Standard (Ind AS) 110 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries.

STATUTORY AUDITORâS REPORT

Emphasis of Matter on the accounts of the Company referred to in the Auditor''s Report is explained in detail in Note No. 3.04 (a) of the Notes forming part of accounts for the year and hence no further comments are necessary.

SECRETARIAL AUDITORSâ REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report including a statement therein refering to complaince of applicable Secretarial Standards. The observations made therein and the corresponding explanations are given below:

Sl No	Observation				Our explanation
1	As per the provisions of FSSA Act read with Rules, quarterly return needs to be filed within 10 days from the end of each quarter. On analysis of the quarterly Returns filed by the Company, it is found that there are delays in filing those Returns which are stated herein below;				Being in an initial phase, there often required multiple entries before the data finally got uploaded in the respective site. The delay was also due to the fact that the quarterly Returns introduced during the year 2017, had warranted uploading of the backlog Returns for previous periods.
	Qtr	Due Date	Actual date of filing	Delay in No. of days
	1	July 10th 2017	06-01-18	180
	2	October 10th 2017	14-02-18	127
	3	January 10th 2018	19-03-18	68
	4	April 10th 2018	14-04-2018	4
	Company is advised to file quarterly Returns in time since any delay in filing will invite penalties.
2.	With respect to creation of Charge for Rs 6 crores with YES Bank Limited, Company has filed the Form CHG-1 with Ministry of Corporate Affairs with 88 days of delay. Company is advised to closely monitor the same in future whenever credit facility is granted by Banks/Financial Institutions.				The delay was due to the delay in documentation by the Bankers.
3	With respect to cessation of Alternate directorship of Mr. Raymond Merz, Company has filed Form DIR-12 with Ministry of Corporate Affairs with a delay of 23 days.				The delay is admitted. Each successive attendance and absence (when original Director himself attends the meeting)of the Alternate Director, is warranting a filing in MCA portal. This is one such return where there was a delay. Care shall be taken to avoid such delays in filing, in future.

COLLABORATORS

The Collaborators of your Company continue to be the relentless source of support and guidance for the Company in each of its key initiatives. Their patronage in areas of financial support, product development, marketing, quality improvement and training of personnel has contributed significantly to the growth of the Company. NGI, Japan has not only subscribed to the Optionally Convertible Preference Shares for an amount of Rs. 1580 lakhs issued by the Company in full, but also provided term loan assistance to the Company at attractive rates of interest. NGI, Japan has provided guidance and considerable financial support for the scheme of revival of the Subsidiary, Reva Proteins Ltd. Kerala State Industrial Development Corporation Ltd., the other promoter is also equally supportive to each and every development concerning your Company.

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

The information as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Annual Report excluding the details of employees receiving remuneration in excess of the limits prescribed under Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being sent to the shareholders of the Company in terms of first proviso to Section 136(1) of the Act 2013. The annexure is available for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

INTERNAL CONTROL SYSTEM

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year. The internal control systems operate through well documented Standard Operating Procedures, policies and process guidelines. These are designed to ensure that transactions are conducted and authorized within defined authority limit commensurate with the level of responsibility for each functional area. The Company''s accounting and reporting guidelines ensure that transactions are recorded and reported in conformity with the generally accepted accounting principles.

The Company has engaged a professional firm of Accountants with long years of experience to carry out the internal audit function. The Company has not placed any limitation on the scope and authority of the internal audit function. The internal audit function evaluates the efficacy and adequacy of internal control systems, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. To maintain its objectivity, effectiveness and independence, internal audit is being carried out on a quarterly basis and reports thereon, along with the remarks of the process owners on each of the observations of audit are placed before the Audit Committee of the Board. The Audit Committee reviews each of the internal audit reports as a separate item of agenda along with the internal / Statutory Auditors and the management representatives wherein the Committee gives their advice / suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee the process owners undertake requisite corrective action in their respective areas thereby further strengthening the control systems. Action Taken Reports are also reviewed by the Audit Committee for each actionable item. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONTROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Companies Act. They are in accordance with the Generally Accepted Accounting Principles in India. Changes in policies, if required, are made in consultation with the auditors and are approved by the Audit Committee.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring procedures are in place.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has entrusted the management of the Company to evaluate and manage various risks faced by the Company and appropriately apprise the Board periodically. Accordingly the management has constituted a Risk Management Committee comprising of Senior Management Personnel to develop and implement a Risk Management Policy including identification therein of elements of risks which in the opinion of the Board may impact the operations of the Company. The Board of Directors shall review the evaluation of risks and the mitigation measures taken by the Company in managing such risks to sustain the operations of the Company for the foreseeable future. Some of the key risk areas identified for mitigation and corrective action include crushed bone availability and pricing patterns, impact of high cost crushed bone on the yield levels, safety and security policies of the Company, succession planning for key executives, impact of the National Green Tribunal''s Orders impact, significant litigation against the Company having material financial impacts, moves of competitors, water scarcity for operational requirements, emergence of alternate substitutes for the products of the Company, adverse forex rate fluctuations, risk of losing premium commanded by the Company due to emergence of alternate Halal certifications etc.

MATERIAL POST BALANCE SHEET EVENTS

The business model of Bamni Proteins Ltd., Subsidiary of the Company, with which the Company had a job processing arrangement till the end of the financial year 2017-18 is set to change as an Independent manufacturer and seller w.e.f. 01.04.2018. This change was necessitated to avoid the impact of GST on processing charges which was introduced w.e.f. 01.07.2017. This business model change is expected to have an impact on the turnover of the Company as well as the profitability of the operations of the Company.

APPLICABILITY OF COST AUDIT REQUIREMENTS

As per the Company''s (Cost Records and Audit) Rules 2014, the Company''s products are not covered under Cost Audit and for the products for which the maintenance of cost record is required, since the relative turnover in respect of the products listed in the said Rules is less than threshold limit of Rs. 35 cr. maintenance of cost records is also not mandatory.

RESPONSIBILITY STATEMENT OF DIRECTORS

a) that in the preparation of the annual accounts for the year ended 31^st March, 2018, the applicable Indian Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected such accounting policies as mentioned in Note 1 of the notes to the Financial Statements 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 as at 31^st March 2018 and of the profit of the Company for the year ended on that date;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Companies Act and as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions actually taken place are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally material Related Party Transactions foreseen in the year ahead, were got approved by the members also. Particulars of contracts of arrangements with Related Parties referred to in sub Section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (LODR) Regulations. A separate section on corporate governance under the Regulation, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Indian Accounting Standards (IND AS) 110 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the SEBI (LODR) Regulations and form part of the Annual Report.

DIRECTORS

Dr. Paul Antony IAS, who was Director and Chairman of the Company with effect from 27.09.2016 ceased to hold office on 03.02.2018 consequent on intimation by The Kerala State Industrial Development Corporation Limited (KSIDC) whose nominee the office of the Chairman continues to be, for the Company. Mr. T. K. Jose IAS who succeeded to office continued till 28.02.2018, when Dr. K. Ellangovan IAS who is also Principal Secretary, Dept. of Industries and Commerce & Dept. of NORKA, was nominated as the Chairman of the Board. Besides, Mr. Raymond Merz had again replaced Mr. Hiroshi Nitta as Alternate Director to Mr. Koichi Ogata.

Mr. Hiroshi Nitta, Nominee of Nitta Gelatin Inc. was appointed as Alternate Director wef. 09-052017 and ceased to be so wef. 29-07-2017. Mr. Koichi Ogata was appointed as Director in casual vacancy wef. 09-05-2017 and Mr. Raymond Merz who was appointed as Alternate Director to Mr. Koichi Ogata (29-07-2017) ceased to be so wef. 03-02-2018. Earlier, Mr. Seichi Nishikawa ceased to be a Director wef. 09-05-2017.

Mr. Sajiv K. Menon, Managing Director was reappointed as Managing Director wef. 01-04-2017 for a period of three years. Similarly, Mr. Takeo Yamaki Whole-time Director ceased to be so wef. 01-04-2017, while Dr. Shinya Takahashi got appointed as Whole-time Director wef. 09-05-2017.

Your Directors extend a warm welcome to Dr. K. Ellangovan IAS as Chairman of the Board and place on record the appreciation for valuable guidance and support extended by the Directors /Chairman who ceased to be Board members during the year, besides welcoming the other entrants to the Board of Directors during the year.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors has constituted a Nomination and Remuneration Committee (NRC) consisting of the following person:-

1. Mr. A. K. Nair, Chairman

2. Mr. K. L. Kumar, Member

3. Dr. K. Cherian Varghese, Member

The terms of reference of the NRC are as follows:-

1. The NRC shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director''s performance.

2. The NRC formulates the criteria for determining qualifications, positive attributes and independence of a director recommending to the Board and also a policy relating to the remuneration for the Directors, Key Managerial Personnel and senior management personnel meaning thereby employees of the Company who are members of core management excluding Board of Directors. This would comprise all members of management one level below the Executive Directors, including all functional heads.

3. The NRC formulates the Remuneration policy to ensure that:â

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate personnel as are herein referred at (2) above of the quality required to run the Company successfully;

relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to Whole-time Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

During the year the NRC has met once.

KEY MANAGERIAL PERSONNEL

Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors hereinabove given, it is brought to the notice of shareholders that Mr. P. Sahasranaman and Mr G.Rajesh Kurup continue as Chief Financial Officer (CFO) and Company Secretary, respectively.

BOARD EVALUATION

The Companies Amendment Act 2015 prescribes that there shall be a meeting of Independent Directors during each of the financial years. Accordingly, the meetings both of the Independent Directors followed by that of the Board had during the beginning of the year 2017-18, made an evaluation of the performance of the Directors / Independent Directors respectively and found them to have the requisite qualification, expertise and track record for performance of their duties as envisaged under Law.

All the Directors on the Board continued thereafter, until there was change in the office of Chairman during the last quarter consequent on change in nomination by The Kerala State Industrial Development Corporation Limited. There shall therefore, be meetings conducted during the course of the financial year 2018-19 by the Independent Directors and generally by the Board where there shall be evaluation of performance by the Directors on the Board so reconstituted.

MEETINGS

The Board of Directors met 5 (Five) times during the financial year 2017-18. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee has Mrs. Radha Unni as Chairperson, with Mr. A. K. Nair, Mr. K. L. Kumar and Dr. K. Cherian Varghese as members.

More details on the Committee are given in the Corporate Governance Report.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization, providing direct access to chairperson of Audit Committee, the details regarding which have also been given in the Company''s official website.

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

A four member Internal Complaints Committee (ICC) is constituted with three lady employees and one lady NGO member. ICC is responsible for redressal of complaints relating to sexual harassment, as envisaged under the provisions of Act and Rules. Hitherto no complaints were received by ICC.

PREVENTION OF INDISER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

STATUTORY AUDITORS

At the Annual General Meeting dated 24^th June, 2017 M/s. Walker Chandiok & Co. LLP (WCL LLP) Chartered Accountants (Firm Registration No. 001076N / N500013) were appointed as Statutory Auditors of the Company to hold office for a period of 5 years until the conclusion of the financial year 2021-22. As envisaged under the Company Law Provision, the appointment of M/s. Walker Chandiok & Co. LLP (WCC LLP) as Statutory Auditors for the year 2018-19 is being put up for ratification by members at the ensuring Annual General Meeting which would be subject to their continuing to conform to the eligibility norms prescribed under Section 141 of the Companies Act, 2013 and the Rules, thereon..

SECRETARIAL AUDIT

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed Mr. Abhilash Nediyalil Abraham. (CP No. 14524, M No. 22601), Company Secretary-in-Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 are annexed herewith as Annexure VII.

ACKNOWLEDGEMENT

Your Directors are thankful to the esteemed shareholders for their continued patronage and the confidence reposed on the Company and its management. Your Directors place on record its sincere appreciation for the support and assistance extended by the State Government and The Kerala State Industrial Development Corporation Ltd. They also take this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board places on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their unstinted co-operation.

For and on behalf of the Board of Directors,

Sajiv K. Menon Dr. M. Beena, IAS

Managing Director Director

(DIN : 00168228) (DIN: 03483417)

Kochi

04.05.2018

Mar 31, 2017

DIRECTORSâ REPORT

THE MEMBERS OF

NITTA GELATIN INDIA LIMITED

The Directors have pleasure in presenting the 41^st Annual Report and audited financial statements for the year ended 31^st March, 2017.

FINANCIAL HIGHLIGHTS (Rs. in Crores)

Particulars	For the year ended 31^st March, 2017	For the year ended 31^st March, 2016
Sales (including export incentives and net of Excise Duty & VAT)	330.26	358.57
Other Income	4.40	2.42
TOTAL	334.66	360.99
Gross Profit before Depreciation	38.26	35.85
Deducting there from:
Depreciation	10.51	9.43
Provision for Tax -
- Current Tax	10.14	10.11
- MAT Credit Entitlement	-	(1.98)
- Deferred Tax	1.33	1.13
- Prior years	(1.23)	0.48
Profit after Tax	17.51	16.68
Profit brought forward from previous year	20.91	13.91
Adjustments for asset having no remaining useful life	-	-
Balance Profit available	38.42	30.59
for appropriation	38.42	30.59
Appropriations :
Proposed dividend on Optionally Convertible Preference Shares	_-*	0.79
Proposed final dividend on equity shares	_-*	2.27
Tax on dividend	_-*	0.62
Transfer to General Reserve	6.00	6.00
Balance profit carried forward to next year	32.42	20.91
Earnings per share (Rs.)
Basic	19.28	17.33
Diluted	19.28	16.79

* Proposed dividend on preference and equity shares and tax on dividend has not been recognized as a distribution of profit in the current yearâs accounts in accordance with the revised accounting standard-4 ''Contingencies and Events occurring after the Balance Sheet Dateâ (effective from 01.04.2016)

DIVIDEND

The Board has, subject to approval of the members at the ensuing Annual General Meeting, recommended a dividend @ 5.4029% p.a. for the year ended 31st March, 2017 on the 929,412 Optionally Convertible Preference Shares of face value of Rs. 170/- each.

Considering the Company''s performance and financial position for the year under review, the Board has also recommended a dividend of Rs. 2.5 per share i.e. 25% of the face value of Rs. 10/- per share on the Equity Capital for the year ended 31st March, 2017, subject to approval of the members at the ensuing Annual General Meeting.

Together with corporate tax on dividend, the total outflow on account of dividend will be Rs. 375.93 lakhs (including Rs. 102.74 lakhs on preference shares(Rs. 94.88 lakhs in the financial year 201516), vis-a-vis Rs. 368.07 lakhs paid for the financial year 2015-16.

During the year, unclaimed dividend of Rs. 2.53 lakhs pertaining to the year ended 31st March, 2009, was transferred to the Investor Education & Protection Fund after giving due notice to the members.

SHARE CAPITAL

The Authorized Share Capital of your Company is Rupees Thirty Five Crores Eighty lakhs and Forty only (comprising of two crores Equity Shares of Rs. 10/- each and 929,412 Optionally Convertible (non-cumulative) Preference Shares (OCPS) of Rs. 170/- each). Nitta Gelatin Inc., (NGI) Japan had not exercised the option to convert the OCPS shares into Equity Shares at the end of 18 months from date of its allotment as per terms of the issue.

RESERVES

An amount of Rs. 600.00 lakhs is transferred to General Reserve during the year. Reserves as on 31.03.2017 comprises of Security Premium Reserve of Rs. 2895.90 lakhs, Capital Investment subsidy of Rs. 15.00 lakhs, Special Export Reserve of Rs. 79.00 lakhs, General Reserve of Rs. 7836.64 lakhs, Hedge Equalization Reserve of Rs. 633.76 lakhs and credit balance in the Profit and Loss Account of Rs. 3242.13 Lakhs, aggregating to Rs. 14702.43 lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Corporate Guarantee for an amount of Rs. 300 lakhs was provided against a term loan of Rs. 300.00 lakhs sanctioned to Reva Proteins Ltd. (RPL) by M/s. Kerala State Industrial Development Corporation Ltd. during the year.

Details in respect of other loans, guarantees and investments covered under the provision of Section 186 of the Companies Act, 2013 are given in the notes on accounts for the financial year ended 31st March, 2017

PERFORMANCE

The gross revenue from operations of your Company during the year under review was Rs. 341.91 crores; though there has been an increase in the unit sales realization in the case of all our products during the year, increase in sales volumes could not be achieved due to various extraneous factors.

The District Administration of Trichur District, where one of the plants of the Company is situated has ordered reduction in drawal of water by 80% for the period commencing February 2017 and until the onset of monsoon, as a fall out of deficient monsoon. This has affected the operations of Ossein Division of the Company in the IVth quarter impacting revenue. Though the Company could manage to sustain the operations of Gelatin plant, by way of procurements from the local Ossein manufacturers, the disruption in operations has impacted the operational results of the Company in the said quarter.

During the year, the business model of Reva Proteins Ltd., a subsidiary of the Company was changed from a job processor of the Company to an independent manufacturer and seller, with the resultant fall in revenue.

With all the domestic Gelatin plants in full scale operation during the year and the resultant heavy demand for crushed bone, the quality and cost of supplies could not meet the export specifications for Ossein and Limed Ossein. This has led to a reduction in export volumes of Ossein / Limed Ossein by 30% during the year. The sales of Collagen Peptide witnessed a decline due to want of raw material - fish protein- on account of regulatory issues / clearances. In the domestic market, the unduly long delay in granting new product approvals by the regulatory authorities has resulted in poor offtake of Collagen Peptide.

Despite the reduction in volumes as explained above, the total sales turnover could be maintained with improvement in unit sales realization on all the products and the higher volume of Gelatin sales achieved during the year.

The improvement in USD / INR exchange rates during 2016-17 as compared to 2014-15 has also contributed to improved sales realization on exports.

The increase in price of crushed animal bone, apart from its poor quality as explained above, was not conducive for the profitability of the Company. Crushed bone prices have increased by 4.21% during 2016-17 as compared to the previous fiscal.

In the backdrop of the aforesaid adversities, your Company exercised close monitoring and strict control over each significant element of cost, and achieved appreciable savings. In respect of utilities, the usage of LNG was significantly substituted by firewood and at the same time, efficiency of wood fired boilers has improved. There was significant reduction in power cost also as a result of various cost control measures in both the Divisions of the Company. Aided also by the decline in the price of LNG and firewood, these measures have helped us to achieve an overall cost reduction of around Rs. 2.58 crores for utilities in comparison to Rs. 6.08 crores achieved in FY 2015-16. Significant savings were also made in factory and Administration overheads by keeping a tight vigil on each item of expenditure and establishing appropriate controls.

With regard to finance cost, Company could effectively leverage low cost foreign currency loans and achieve almost a one third reduction amounting to Rs. 2.34 crores.

As a result of the above, the operations of the Company for the year 2016-17 has resulted in a pre-tax profit of Rs. 27.75 crores as against Rs. 26.43 crores during 2015-16 inspite of drop in revenue following change in the business model of subsidiary Company RPL and disruption in operations in Ossein Division in Q4 of the financial year.

The products of your Company continued to enjoy robust market demand during the year under review. The entire sale of Ossein / Limed Ossein, 52.30% of the total sale of Gelatin and 51.80% of Collagen Peptide was through exports. Your Company has arrangements with our overseas promoter, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing our customers in a pro-active manner in line with the global standards of NITTA Group.

The major production facilities of your Company are the Ossein Plant at Koratty, Trichur District and Gelatin / Peptide Plant at Kakkanad, Ernakulam District, Kerala. All the factories owned by the Company are being operated in strict compliance with the applicable standards / norms prescribed by the Statutory authorities including the State Pollution Control Board. The Kadukutty Panchayat in Trichur District did not renew the factory licence for our Ossein Plant at Koratty for the year. Though the Kerala State Tribunal for Local Self Government Institutions has remanded back to the adjudicating authorities for a review of the orders, Panchayat has not reversed their original decision and we have moved the matter before the High Court of Kerala. The Court has ordered status quo in the matter till final disposal of the writ petition filed by the Company. The recent review of the effluent management system at Ossein Division by the National Environmental Engineering Research Institute (NEERI) has confirmed the efficacy of the system on the basis of which the Pollution Control Board has renewed the Consent to Operate up to 30.06.2018. Based on expert legal advice, the earlier court verdicts and the facts of the situation as explained above, the Company expects a favorable resolution of the matter.

The National Green Tribunal(NGT) has passed an order dtd 27.02.17, disposing different applications moved before that honorable forum challenging the operations of the company as volatile of the environmental regulations in force. The NGT while disposing of the application has concluded that on the analysis of the entire facts and materials that

- there is no material to establish that the industry has discharged sludge along with the treated liquid effluent into the Chalakkudy river.

- The sludge generated by the industry is non-hazardous and non-toxic.

- The effluent treatment plant is functioning efficiently and as of now the discharge of the treated effluent from the ETP to the Chalakudy river has no adverse impact on the river water or the ground water.

However NGT by applying the precautionary principle to avoid any possibility of causing pollution to both air and water in the environment, directed the Company to install certain equipment to reinforce the effluent treatment process and technologies, besides methods which help recycling of treated effluent and minimize the discharge into the river. The order also gave directions to the Kerala Pollution Control Board (KPCB) for enforcing the standards.

The Order has detailed prescriptions for implementation in a time-bound manner. Whereas there are certain directions which need a relook on a factual as well as, practical consideration of the issues involved, the Company has filed a Petition before the Hon''ble Tribunal for a review of such directions, which is pending consideration

CREDIT RATING

During the year, rating agency CRISIL has reaffirmed the rating of CRISIL A-/ but outlook was revised from âStable âto âNegativeâ for Long

Term Instruments and maintained "CRISIL A2 â rating for short term instruments. The change in outlook was following the disruptions in operation in Ossein Division as a result of the restrictions imposed by the District Administration for drawal of water for process requirements from the Chalakkudy river

AWARDS & ACCOLADES

During the year your Company was awarded the top export award in Ossein& Gelatin panel instituted by CAPEXIL for the years 2013 -14 and 2014-15.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division

(b) HACCP Certificate for Ossein Division and Gelatin Division for food safety.

(d) ISO 9001: 2008 for Quality Management System of the Company.

(e) FSSC Certification for Food Safety Management System for Gelatin Division

(f) Halal / Kosher Certification for Gelatin and Collagen Peptide

(g) NABL Accreditation for in-house laboratory

Besides the Company has newly acquired yet another prestigious recognition / certification, namely:

(h) OSHAS Certification by NVTQC for Occupational, Health and Safety Standards.

HEALTH, SAFETY AND ENVIRONMENT

1. Health and Safety

2. Environment

The Company continuously endeavors to improve on environmental management and through all activities demonstrate its commitment to protecting the environment. The factories of the Company are equipped with modern effluent treatment plants for treating and discharging treated water with parameters well within the norms laid down by the Pollution Control authorities. The emissions from the boilers and generator stacks are regularly monitored for compliance. With the commissioning of two biogas generators at its Ossein plant, substantial portion of the raw effluent from the production process is now being converted into biogas used for meeting the Company''s energy requirements. Diffused Air floatation System for effective grease removal, Primary Treatment System Reinforcement and ETP Automation for sound effluent management system, introduction of Activated Carbon System in Fresh Water Treatment Plant for improving the water quality and improving the process stability, introduction of chemical mixing times for Water Treatment System, instrumentation system for turbidity control and better chlorination, addition of two Jet Aerators in ETP System and commissioning of multi grade Sand Filters before final discharge point of treated water are some of the initiatives carried out during the year to ensure protection of the environment and sustainability of operations.

M/s. National Environmental Engineering Research Institute (NEERI), a constituent laboratory of the Council of Scientific & Industrial Research, Govt. of India, conducted a plant visit for assessment of implementation status of their own recommendations in May 2016 and observed that the Company has complied with the implementation of all the recommendations of NEERI excepting one recommendation i.e. cleaning of weeds along the banks of Chalakudy river due to want of approval from Kadukutty Grama Panchayat for carrying out the activity. They have also observed that based on the physio

- chemical analysis of various effluent samples of ETP, the final treated effluent being discharged into Chalakudy river conforms to the discharge Standards stipulated by the KSPCB for M/s. NGIL and also the CPCB General Standards for Discharge.

Environment

In connection with the renewal of the Consent To Operate our Ossein plant, M/s. National Environmental Engineering Research Institute (NEERI), a constituent laboratory of the Council of Scientific & Industrial Research, Govt. of India, conducted a detailed study of the pollution status with respect to the air, water and solid waste generated from the Ossein plant and confirmed the efficacy of such systems. However, with a view to further enhance the infrastructure for environment management, water conservation, ambient air quality etc., the Company has mobilized Rs. 15.80 crores through the issue of Optionally Convertible (non-cumulative) Preference Shares. With the completion of this investment, your Company will be equipped with state-of-the-art facilities for management of environment and hence the health and safety of the employees and the local community at large.

The ambient air quality in our Ossein plant is being monitored on a continuous basis to conform to the regulations relating to ambient air quality standards. Out of the total plot area of approximately 1,53,900 sq. meters, about 10,000 sq. meters of land around the boundary of Gelatin Division and about 38,000 sq. meters of land in Ossein Division have been developed and maintained as green area.

These steps are expected to go a long way in furthering our efforts to protect the nature and environment around our plant.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

- Empowerment of the disadvantaged / weaker sections of the society through education, skill development and the like;

- Provision of access to basic necessities like healthcare, drinking water& sanitation;

- Supporting environmental and ecological balance through forestation, soil conservation, conservation of flora and similar programmes;

- Promotion of sports through training of sports persons;

- Rural development projects;

Total CSR expenditure incurred by your Company during the year was Rs. 21.42 lakhs which was higher than the statutory requirement of 2% of the average profit for the last three years.

- The CSR Committee ensures that the implementation and monitoring of the projects are in compliance with the CSR objectives and Policy of the Company.

- The CSR Policy can be accessed on the Company''s website www.gelatin.in. The CSR projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013. Annual Report on CSR activities is annexed herewith as Annexure I.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In view of the change in the definition of material subsidiary, Reva Proteins Limited which was a material subsidiary hitherto, was not a material subsidiary as per the LODR Regulations 2015.

In accordance with LODR Regulations, the Company''s policy on materiality of subsidiaries specifying the criteria for determining the Material Subsidiaries is available in the Company website www.gelatin.in. There has been no change in the nature of business of subsidiaries during the year under review. However the business model of Reva Proteins Ltd one of the subsidiaries was changed from a job processor of the Company to an independent manufacturer and seller during the year.

As per the above criteria, the Company has no material subsidiary as of today

SUBSIDIARY COMPANIES

BAMNI PROTEINS LIMITED

The annual production during the year in this subsidiary company was 2524 MT of Ossein and 5885 MT of Di Calcium Phosphate as against 2349 MT of Ossein and 5508 MT of Di-Calcium Phosphate during the previous year.

The operation of this subsidiary for the year under review has resulted in a post-tax profit of Rs. 69.14 Lakhs (pre-tax profit of Rs. 107.14 lakhs) as against a post tax profit of Rs. 128.75 lakhs (pretax profit of Rs. 112.31 lakhs) during the previous financial year.

REVA PROTEINS LIMITED

At Reva Proteins Ltd., owing to restrictions in the quantum of discharge of treated effluent, there has been considerable under utilization of capacity. The common treated effluent discharge pipeline currently being set up by M/s. Narmada Cleantech Limited which was expected to be commissioned during mid 2015-16 has been delayed further. The commissioning and high pressure testing of the effluent pipeline got completed in January 2017 and the clearance of the consent to authorize and operate for Reva plant by the Gujarat State Pollution Control Board is in progress. Arising out of the above, the financial year 2016-17 witnessed a net loss of Rs. 779.04 lakhs and a cash loss of Rs. 521.69 lakhs as against a net loss of Rs. 941.17 lakhs and a cash loss of Rs. 684.59 lakhs during the previous financial year. The annual production during 2016

17 was 1909 MT of Ossein and 1095 MT of Limed Ossein as against 1554 MT of Ossein and 632 MT of Limed Ossein during the previous year. Taking into consideration the techno-commercial viability of the project once the pipeline is made available for Company''s operations post the clearance by the Gujarat State Pollution Control Board expected by the end of Quarter 1 of 2017-18, your Company has proactively undertaken a comprehensive scheme for revival of the subsidiary by way of capital investments and capital restricting / rescheduling of existing term loans.

It is expected that this subsidiary can achieve a turnaround in operations within a short time once the pipeline is made available for usage.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report.

The statement containing the salient features of the financial statement of both the subsidiaries under first proviso to sub-section (3) of section 129 of the Act in form AOC I is attached as Annexure II.

In accordance with fourth proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing therein its standalone and consolidated financial statements has been uploaded on the website of the Company, www. gelatin. in. Further as per the fourth proviso of the said section, the annual accounts of the subsidiary companies and the related detailed information have also been uploaded on the website of the Company, www.gelatin.in.

Annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be available for inspection by any shareholder at the Registered Office of the Company and subsidiary companies concerned. Hard copy of details of accounts of subsidiaries shall be furnished to any shareholder on demand. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its subsidiaries.

STATUTORY AUDITORâS REPORT

Emphasis of Matter on the accounts of the Company referred to in the Auditor''s Report is explained in detail in Note No. 2.11.2 of the Notes forming part of accounts for the year and hence no further comments are necessary.

SECRETARIAL AUDITORSâ REPORT -EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

Sl No	Observation	Our explanation
1	As per Regulation 24 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015, the minutes of the meetings of the Board of Directors of the unlisted subsidiary shall be placed at the meeting of the Board of Directors of the listed entity. On examination of the Board minutes of Nitta Gelatin India Limited : Minutes of Reva Proteins Ltd (subsidiary) has placed only at the 1st Board Meeting during the Financial Year i.e. on 06.05.2016 and Minutes of Bamni Proteins Limited (Subsidiary) has not placed before the Board Meetings of Nitta. Kindly adopt a system of placing the Board Minutes of subsidiaries in the Board Meeting of Nitta as per the mandate of Regulation 24 (3) of LODR.	We were regular in placing the minutes of Reva Proteins Ltd, till such time it was material subsidiary. There was irregularity thereafter. Hereafter, the minutes of the meetings of Subsidiary companies shall be placed before the Board meeting of the Holding company.
2	As per Standard 6.4 of the Secretarial Standard 1 (SS-1), meetings of Board of Directors, "Resolutions passed by circulation shall be noted at the next Meeting of the Board and the text thereof with dissent or abstention, if any, shall be recorded in the Minutes of such Meetingâ. The Board has approved a circular resolution for authorization to Directors for migrating to GST on 10.01.2017. On analysis of the minutes of next Board meeting held on 06-02-2017 it is observed that there is inadequate compliance of Standard 6.4 in as much as the text of the resolution has not been recorded in the minutes as envisaged by the Standards 6.4.	Noted. Henceforth the regulatory provision shall be conformed in entirety.
3.	The Company has paid additional fee of Rs.12000 to the Ministry with respect to modification of sanctioned credit facilities by SBI and HDFC bank. The cases with respect to delay in Charge filing with Bankers (i.e. SBI and HDFC) were found to be repetitive in nature when we compared the same with the last two financial years. This matter needs to be discussed with Bankers whenever new credit facilities sanctioned or existing credit facilities get renewed so that cases of such nature were not further get repeated.	This happens with respect to additional documentation in the context of creation of Collateral Security and also renewal of existing facilities. We shall discuss with Bankers and find ways to avoid the delay in filing.
4	As per the provisions of the Foreign Exchange Management Act, 1999, ECB Return (ECB-2) should be filed within seven working days from the end of each month. On analysis it is found that (i) ECB Return for the month of April, 2016 has been filed on 14th June, 2016 with a delay of 28 days, (ii) ECB Return for the month of May, 2016 has been filed on 14th June, 2016 with a delay of 4 days, (iii) ECB Return for the month of July, 2016 has been filed on 10th August, 2016 with a delay of 1 day, (iv) ECB Return for the month of October, 2016 has been filed on 22nd November, 2016 with a delay of 11 days and (v) ECB Return for the month of November 2016 has been filed on 15th December, 2016 with a delay of 5 days.	The Returns are physically filed with the Authorized Dealer well within the statutory prescription of seven days, while an endorsement is obtained subsequent thereto. We shall henceforth endeavor to obtain the endorsement in such a way that it is within the statutory time limit for filing the document.
5	The production of gelatin exceeds the limit as per FSSA License for the last two years 2015-16 and 2016-17 and hence found to be repetitive in nature without amending the license accordingly for the enhancement of the permissible quantity of gelatin . This is evident as per examination of Annual Return in Form D1 filed under Regulation 2.1.13 of the FSSA 2006 , and the total gelatin production comes about 3824 MT and 4003 MT respectively which are in excess of the limit of 3650 MT per year. The Company is advised to increase the licensed limit accordingly.	The forthcoming renewal of the license shall take care of the requirement.

COLLABORATORS

The Collaborators of your Company continue to be the relentless source of support and guidance for the Company in each of its key initiatives. Their patronage in areas of financial support, product development, marketing, quality improvement and training of personnel has contributed significantly to the growth of the Company. NGI, Japan has not only subscribed to the Optionally Convertible Preference Shares for an amount of Rs. 1580 lakhs issued by the Company in full, but also provided term loan assistance to the Company at attractive rates of interest. NGI, Inc. Japan has provided guidance and considerable financial support for the scheme of revival of the subsidiary, Reva Proteins Ltd. Kerala State Industrial Development Corporation Ltd., the other promoter is also equally supportive to each and every development concerning your Company.

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as Annexure IV to this report.

The Annual Report excluding the details of employees receiving remuneration in excess of the limits prescribed under section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being sent to the shareholders of the Company in terms of first proviso to Section 136(1) of the Act 2013. The annexure is available for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

INTERNAL CONTROL SYSTEM

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The Company has engaged a professional firm of Accountants with long years of experience to carry out the internal audit function. The Company has not placed any limitation on the scope and authority of the internal audit function. The internal audit function evaluates the efficacy and adequacy of internal control systems, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. To maintain its objectivity, effectiveness and independence, internal audit is being carried out on a quarterly basis and reports thereon, along with the remarks of the process owners on each of the observations of audit are placed before the Audit Committee of the Board. The Audit Committee reviews each of the internal audit reports as a separate item of agenda along with the internal / statutory auditors and the management representatives wherein the Committee gives their advice / suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee the process owners undertake requisite corrective action in their respective areas thereby further strengthening the control systems. Action Taken Reports are also reviewed by the Audit Committee for each actionable item. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONTROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design on operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. They are in accordance with the generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the auditors and are approved by the Audit Committee.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring procedures are in place.

RESPONSIBILITY STATEMENT OF DIRECTORS

a) that in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected such accounting policies as mentioned in Note 1 of the notes to the Financial Statements 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 as at 31st March 2017 and of the profit of the Company for the year ended on that date;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Companies Act and as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions actually taken place are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally material Related Party Transactions foreseen in the year ahead, were got approved by the members also. Particulars of contracts of arrangements with Related Parties referred to in sub section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (LODR) Regulations. A separate section on corporate governance under the Regulation, along with a certificate from Practicing Company Secretary confirming the compliance, is annexed and forms part of the Annual Report

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Accounting Standards 21, 27 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the SEBI (LODR) Regulations and form part of the Annual Report.

DIRECTORS

Mr. P. H Kurian IAS, who was a Director and Chairman of the Company with effect from 14.10.2013 ceased to hold office on 27.09.2016 consequent on the

Kerala State Industrial Development Corporation Limited (KSIDC) vide their letter dated 27.09.2016 nominating Mr. Paul Antony IAS, Additional Chief Secretary (Industries and Power), Govt. of Kerala as a Director of the Company.

Your Directors extend a warm welcome to Mr. Paul Antony as member of the Board. The Board also places on record the appreciation for the valuable guidance and support extended by Mr. P.H. Kurian IAS during his tenure as Director and Chairman.

Mr. Takeo Yamaki, Director(operations) resigned from the service of the company consequent on his being reverted to the service of NGI, Japan. He was replaced by Dr. Shinya Takahashi who was appointed as Director(Technical) at the Board meeting held on 09.05.2017. The terms and conditions of appointment, are to be confirmed at the forthcoming Annual General Meeting of the company. Similarly, Mr. Raymond Merz, Director, nominee of NGI, Japan was replaced and Mr. Koichi Ogata, President, NGI, Japan was appointed in casual vacancy at the Board meeting dated 09.05.2017. Mr. Hiroshi Nitta was appointed as Alternate Director to Mr. Koichi Ogata. The Board extended a warm welcome to the incoming directors.

KEY MANAGERIAL PERSONNEL

Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors hereinabove given, it is brought to the notice of shareholders that Mr. P. Sahasranaman and Mr G. Rajeshkurup continue as Chief Financial Officer (CFO) and Company Secretary, respectively.

BOARD EVALUATION

As per Section 134(3)(P) of the Act, 2013 there has to be furnished to the shareholders as part of the Directors'' Report, a statement indicating the manner in which formal annual evaluation was made by the Board of their performance. Similarly, the Independent Directors as part of their mandate under Schedule VI of the Act need to make an evaluation of performance of the constituents of the Board apart from their self evaluation.

The Board at their meeting dt. 06.02.2017 had occasion to deliberate on the Guidance Note on Board Evaluation, issued by Securities Exchange Board of India(SEBI) dated 05.01.2017 and approved a Questionnaire for evaluation that captures the salient points discussed in the said Note. The questionnaire for evaluation (both, self and peer)are to be filled in, consolidated and discussed with the Chairman. The evaluation by the Independent Directors having been undertaken at their meeting dated 11.04.2017, the Board of Directors too undertook their evaluation and took into record that the Independent Directors have the requisite qualification, expertise and track record for performing their duties as envisaged under Law, and they add value in the decision making process of the Board.

MEETINGS

The Board of Directors met 4 (Four) times during the financial year 2016-17. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee has Mrs. Radha Unni as Chairperson, with Mr. A. K. Nair, Mr. K. L. Kumar and Dr. K. Cherian Varghese as members.

More details on the Committee are given in the Corporate Governance Report.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization; providing direct access to chairperson of Audit Committee, the details regarding which have also been given in the Company''s official website.

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

Your Company has always believed in providing a safe and harassment free workplace for every individual working and associating with the company, through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

PREVENTION OF INDISER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

STATUTORY AUDITORS

M/s Varma & Varma, Statutory Auditors completed their term of office within the meaning of Section 139 of the Companies Act,2013 consequent whereof M/s. Walker Chandiok & Co LLP was on recommendation by the Audit Committee at their meeting dated 06.02.2017, appointed as Statutory Auditors of the Company for a period of five years subject to yearly ratification, by the Board of Directors who held their meeting later during that day. This appointment which is confirmed by the Audit-firm as meeting all the qualifications and eligibility prescribed under the Companies Act 2013, applicable Rules and the provisions of SEBI (LODR) Regulations, has now to have the approval of the shareholders at the forthcoming Annual General Meeting of the Company.

SECRETARIAL AUDIT

M No. 22601), Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 are annexed herewith as Annexure VII.

ACKNOWLEDGEMENT

Your Directors place on record its sincere appreciation for the support and assistance extended by the State Government and M/s. Kerala State Industrial Development Corporation Ltd. They also take this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board place on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their unstinted co-operation. Your Directors are also thankful to the esteemed shareholders for their continued patronage and the confidence reposed on the Company and its management.

For and on behalf of the Board of Directors,

Kochi PAUL ANTONY IAS

09.05.2017 CHAIRMAN

(DIN: 02239492)

Mar 31, 2016

DIRECTORSâ REPORT

THE MEMBERS OF NITTA GELATIN INDIA LIMITED

The Directors have pleasure in presenting the 40th Annual Report and audited financial statements for the year ended 31st March, 2016.

FINANCIAL HIGHLIGHTS (Rs. in Crores)

Particulars	For the year ended 31^st March, 2016	For the year ended 31^st March, 2015
Sales (including export incentives and net of Excise Duty & VAT)	358.57	359.13
Other Income	2.42	2.03
TOTAL	360.99	361.16
Gross Profit before Depreciation	35.85	20.41
Deducting there from:
Depreciation	9.43	10.38
Provision for Tax -
- Current Tax	10.11	2.24
- MAT Credit Entitlement	(1.98)	-
- Deferred Tax	1.13	2.58
- Prior years	0.48	0.11
Profit after Tax	16.68	5.10
Profit brought forward from previous year	13.91	12.90
Adjustments for asset having no remaining useful life	-	(0.18)
Balance Profit available	30.59	17.82
for appropriation	30.59	17.82
Appropriations :
Proposed dividend on Optionally Convertible Preference Shares	0.79	-
Proposed final dividend on equity shares	2.27	0.91
Tax on dividend	0.62	0.18
Transfer to General Reserve	6.00	2.82
Balance profit carried forward to next year	20.91	13.91
Earnings per share (Rs.)
Basic	17.33	5.62
Diluted	16.79	5.62

DIVIDEND

The Board has, subject to approval of the members at the ensuing Annual General Meeting, recommend a dividend @ 5.4029% p.a. for the year ended 31st March, 2016 on the 929,412 Optionally Convertible Preference Shares of face value of Rs. 170/- each on a pro-rata basis from the date of allotment.

Considering the Company''s performance and financial position for the year under review, the Board has also recommended a dividend of Rs. 2.50 per share i.e. 25% of the face value of Rs. 10/per share on the equity capital for the year ended 31st March, 2016, subject to the approval of the members at the ensuing Annual General Meeting.

Together with corporate tax on dividend, the total outflow on account of dividend will be Rs. 368.07 lakhs(including Rs. 94.88 lakhs on preference shares), vis-a-vis Rs. 109.27 lakhs paid for the financial year 2014-15.

During the year, unclaimed dividend of Rs. 1.69 lakhs pertaining to the year ended 31st March, 2008, was transferred to the Investor Education & Protection Fund after giving due notice to the members.

SHARE CAPITAL

The Authorized share capital of your Company has been enhanced from Rupees Twenty Crores (comprising of two crore equity shares of Rs. 10/each) to Rupees Thirty Five Crores Eighty lakhs and Forty only (comprising of two crore equity shares of Rs. 10/- each and 929,412 Optionally Convertible (non-cumulative) Preference Shares (OCPS) of Rs. 170/- each).

During the year, the Company has issued 929,412 Optionally Convertible (non-cumulative) Preference Shares of Rs. 170/- each aggregating to Rs. 15,80,00,040/- to M/s. Nitta Gelatin Inc., Japan, one of the promoters carrying a fixed dividend of 5.4029% and redeemable at par at the expiry of seven years from the date of allotment, 28.04.2015 with put and call option at the expiry of five years from the date of allotment. The said OCPS carry the option to get converted into equity shares either in full or in part at a value of Rs. 170/- per equity share of face value of Rs. 10/- and share premium of Rs. 160/- per share not later than 18 months from the date of allotment of OCPS, subject to the Company complying with Clause 38 of the SEBI (LODR) Regulations 2015, post conversion and NGI, Japan adhering to the SEBI Takeover Regulations. None of the OCPS shares have been converted into equity shares till date.

RESERVES

An amount of Rs. 600.00 lakhs is transferred to General Reserve during the year. Reserves as on 31.03.2016 comprises of Security Premium Reserve of Rs. 2895.90 lakhs, Capital Investment subsidy of Rs. 15.00 lakhs, Special Export Reserve of Rs. 79.00 lakhs, General Reserve of Rs. 7236.64 lakhs, Hedge Equalization Reserve of Rs. 151.02 lakhs and credit balance in the Profit and Loss Account of Rs. 2091.32 Lakhs, aggregating to Rs. 12468.88 lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

In the wake of the progress made with regard to commissioning of the common treated effluent discharge pipeline for want of which the operations of M/s. Reva Proteins Ltd. (RPL), the subsidiary of the Company, was so far unviable, your company has made an investment of Rs. 1250 lakhs in the issue of 6% Optionally Convertible (Non-cumulative) Preference Shares of Rs. 10/each at par of the said subsidiary.

Corporate Guarantee for an amount of Rs. 271.31 lakhs was provided against a term loan of Rs. 300.00 lakhs sanctioned to RPL by M/s. Kerala State Industrial Development Corporation Ltd. during the year.

PERFORMANCE

The gross revenue from operations of your Company during the year under review was Rs. 370.86 crores. Though there has been an increase in the unit sales realization in all our products during the year, increase in sales volumes could not be achieved due to various extraneous factors. With all the domestic Gelatin plants in full scale operation during the year and the resultant heavy demand for crushed bone, the quality of supplies could not meet the export quality specifications for Ossein and Limed Ossein. This has led to a reduction in export volumes of Ossein / Limed Ossein by 19% during the year. The demand for Collagen Peptide witnessed a setback in major overseas markets like Korea and Thailand. In the domestic market, the unduly long delay in granting new product approvals by the regulatory authorities has resulted in a poor off take of Collagen Peptide. Despite the reduction in volumes as explained above, the total sales turnover could be maintained with improvement in unit sales realization on all our products and the higher volume of Gelatin sales achieved during the year.

The improvement in USD / INR exchange rates during 2015-16 as compared to 2014-15 has also contributed to improved sales realization on exports.

The increase in price of crushed animal bone, apart from its poor quality as explained above, was not conducive for the business of the Company. Crushed bone prices have increased by 11% during 2015-16 as compared to the previous fiscal.

With regard to finance cost, Company could effectively leverage low cost foreign currency loans and achieve almost a one third reduction amounting to Rs. 2.48 crores.

As a result of the above, the operations of the Company for the year 2015-16 has resulted in a pre-tax profit of Rs. 26.43 crores as against Rs. 10.03 crores during 2014-15.

The products of the your Company continued to enjoy an enviable market demand during the year under review. The entire sale of Ossein / Limed Ossein, 44.5% of the total sale of Gelatin and 38.6% of Collagen Peptide were through exports. Your Company has arrangements with its overseas collaborators, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing its customers in a pro-active manner in line with the global standards of NITTA Group.

The major production facilities of your Company are the Ossein Plant at Koratty, Trichur District and Gelatin / Peptide Plant at Kakkanad, Ernakulam District, Kerala. All the factories owned by the Company are being operated in strict compliance with the applicable standards / norms prescribed by the Statutory authorities including the State Pollution Control Board. The Kadukutty Panchayat in Trichur District did not renew the factory license for our Ossein Plant at Koratty for the year. However, the Kerala State Tribunal for Local Self Government Institutions has stayed the orders of the Panchayat until further orders. The denial of grant of factory license by the Kadukutty Panchayat for earlier years was challenged before the Hon''ble High Court of Kerala and the Court has ordered status quo in the matter till final disposal of the writ petition filed by the Company. The recent review of the effluent management system at Ossein Division by the National Environmental Engineering Research Institute (NEERI) has confirmed the efficacy of the system on the basis of which the Pollution Control Board has renewed the Consent To Operate up to 30.06.2018. Based on expert legal advice, the earlier court verdicts and the facts of the situation as explained above, the Company expects a favourable resolution of the matter.

CREDIT RATING

During the year, rating agency CRISIL has reaffirmed the rating of âCRISIL A-/ Stableâ rating for Long Term Debts and âCRISIL A2 â rating for short term borrowings.

AWARDS & ACCOLADES

During the year your Company was awarded the top export award in Ossein & Gelatin panel instituted by CAPEXIL for the year 2012-13.

The following prestigious certifications are retained by your Company:-

(a) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division

(b) HACCP Certificate for Ossein Division and Gelatin Division for food safety.

(d) ISO 9001: 2008 for Quality Management System of the Company.

(e) FSSC Certification for Food Safety Management System for Gelatin Division

(f) Halal / Kosher Certification for Gelatin and Collagen Peptide

(g) NABL Accreditation for in-house laboratory

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations and effective management of the related issues is an integral part of the Company''s philosophy and we stand committed to continually improve on these objectives. The Company, year on year, increases its focus on improving matters relating to Health, Safety and Environment.

Health and Safety

The Company is committed to promoting the health and safety of its employees. Each of our plants is having a Safety Officer and Safety Committee which includes representation from workmen. The Committee meets regularly to review issues impacting plant safety and employee health. Regular health checkup of the employees is carried out through reputed hospitals. Various training programmes are conducted at the plant on health and safety issues including emergency preparedness, work safety, first-aid, etc. The Company is augmenting resources to further strengthen the level of safety at its plants.

Environment

These steps are expected to go a long way in furthering our efforts to protect the nature and environment around our plant.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

- Empowerment of the disadvantaged / weaker sections of the society through education, skill development and the like;

- Provision of access to basic necessities like healthcare, drinking water & sanitation;

- Supporting environmental and ecological balance through afforestation, soil conservation, conservation of flora and similar programme;

- Promotion of sports through training of sports persons;

- Rural development projects;

- Total CSR expenditure incurred by your Company during the year was Rs. 19.48 lakhs which was higher than the statutory requirement of 2% of the average profit for the last three years.

- The CSR Committee ensures that the implementation and monitoring of the projects are in compliance with the CSR objectives and Policy of the Company.

- The CSR Policy can be accessed on the Company''s website www.gelatin.in. The CSR projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013. Annual Report on CSR activities is annexed herewith as Annexure I.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In accordance with the provisions of the SEBI (LODR) Regulations 2015, your Company had formulated a Material Subsidiary Policy specifying the criteria for determining the Material Subsidiaries. The said policy is available in the Company website www.gelatin.in. There has been no change in the nature of business of subsidiaries during the year under review.

As per the above policy, the Company has only one material subsidiary, Reva Proteins Ltd

SUBSIDIARY COMPANIES

BAMNI PROTEINS LIMITED

The annual production during the year in this subsidiary company was 2349 MT of Ossein and 5508 MT of Di Calcium Phosphate as against 2345 MT of Ossein and 5135 MT of Di-Calcium Phosphate during the previous year.

The operation of this subsidiary for the year under review has resulted in a post - tax profit of Rs. 128.75 Lakhs as against a net loss of Rs. 54.86 lakhs during the previous financial year.

REVA PROTEINS LIMITED

2015-16 has been delayed further. Arising out of the above, the financial year 2015-16 witnessed a net loss of Rs. 941.17 lakhs and a cash loss of Rs. 684.59 lakhs as against a net loss of 813.92 lakhs and a cash loss of Rs. 519.14 lakhs during the previous financial year. The annual production during 2015-16 was 900 MT of Ossein and 642.30 MT of Limed Ossein as against 1336.65 MT of Ossein and 521.90 MT of Limed Ossein during the previous year. M/s. Narmada Cleantech Limited, the agency entrusted with the setting up of the common effluent discharge pipeline has assured the commissioning of the pipeline by early 2016. Taking into consideration the techno-commercial viability of the project once the pipeline gets commissioned, your Company has proactively undertaken a comprehensive scheme for revival of the subsidiary. The main features of this scheme of revival are:

- Capital investment Rs. 900 lakhs financed out of term loans from the promoter, NGI Inc. Japan.

- Induction of capital of an amount of Rs. 1250 lakhs into the Company through the issue of 125 lakhs 6% Optionally Convertible (Non-cumulative) Preference Shares of Rs. 10/each at par.

- Rescheduling of existing term loans

- Change of business model into direct billing w.e.f. 01.04.2016 onwards.

With the implementation of the above scheme of revival, this subsidiary can achieve a turnaround in operations within a short time once the pipeline is commissioned.

In accordance with fourth proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing therein its standalone and consolidated financial statements has been uploaded on the website of the Company, www. gelatin. in. Further as per the fourth proviso of the said section, the annual accounts of the subsidiary companies and the related detailed information have also been uploaded on the website of the Company, www.gelatin.in.

STATUTORY AUDITORâS REPORT

Emphasis of Matter on the accounts of the Company referred to in the Auditor''s Report is explained in detail in Note No. 2.11.1 of the Notes forming part of accounts for the year and hence no further comments are necessary.

SECRETARIAL AUDITORSâ REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given herein below:

Sl No	Observation	Our explanation
1	Pursuant to Section 184(1) of the Companies Act,2013 every director shall disclose his concern or interest in any company or companies or body corporates etc. including shareholding at the first Board meeting held in every financial year in Form MBP-1. It is seen that the first meeting of the Board in the financial year 2015-16 was held on 17th April,2015 but no such disclosure was made available to the Board as per Section 184(1) of the Act. Nevertheless, the same was disclosed at the next Board Meeting held on 09.05.2015.	In normal course, the first Board meeting of the FY, is the Q1 meeting which takes place in the first week of May(09.05.2015). We were to take declarations from Directors for placing before the said meeting. In between, a Board Meeting took place in April(17.04.2015) along with EGM when the declaration was not fully obtained.
2	There was a delay of 159 days in filing Form CHG-1 for Rs 700 lacs availed from HDFC Bank Limited. Also modification of the Charge by way of enhancement of the above said loan of Rs.10 crores was filed only after 134 days from the date of modification.	The Bank had not completed the documentation for enabling us to file CHG1, leading to this delay.
3.	The appointment of CFO on 01/12/2015 was informed to BSE Ltd on 08/12/2015 only. The disclosure is inadequate to the extent that brief profile of new incumbent was not given to Stock Exchange as well as reasons for not informing SE in time, was not mentioned in the disclosure pursuant to Regulation 30(6) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 read with sub para 7.3 Para A of Part A of Sch III.	The LODR came into force on 01.12.2015. We failed to gather the essence of these provisions well in time to file for an event that took place on that very date, while there was a delay of 7 days for such filing.
4	In the following instances, Standard 1.3.7 of the Secretarial Standards on Meetings of the Board has not been followed; The agenda notes for the Board meeting on 08.09.2015 has to be send atleast by 01.09.2015 to all Directors but the same has been sent only on 02.09.2015.Similarly for the board meeting held on 1st February,2016, the notes on agenda has been sent on 27th January,2016 but which is ought to be send by 25th January,2016	These were meetings for approval of Quarterly / Audited results which were Unpublished Price Sensitive Information. Directors have subsequently approved a proposal, agreeing to a shorter notice for circulation of financial results being Unpublished Price Sensitive Information (UPSI).
5	As per LODR 2015 Reg 30-Annexure I particularly point 4, Companies are required to intimate outcome of the meeting of the Board of Directors, containing the time of commencement and conclusion of the Board meeting. But on examination of the intimation of the outcome of the Board meeting dated 01/02/2016, the details regarding the time of commencement and conclusion of the Board meeting was not included in the outcome intimation letter.	Noted for future action.
6	As per FSSA license issued to the Company by the Central Government, the permissible limit of the food product Gelatin is 10 MT/day. On examination of Annual Return in Form D1 filed under Regulation 2.1.13 of the FSSA 2006 , dated 26.05.2015 the total gelatin production comes about 3670.42 MT and during the FY ended 31.03.2016 it even crosses 3900 MT which are in excess of the limit of 3650 MT per year. Hence, the Company is advised to increase the license limit per day so as the production not to exceed the license limit.	The production was marginally above the licensed limit during the year 2014-15, and has increased further vis-a-vis the licensed limits during the year 2015-16. Endorsements will be sought from the authorities for the increased limit.

COLLABORATORS

Your Collaborators continue to be the relentless source of support and guidance for the Company in each of its key initiatives. Their patronage in areas of financial support, product development, marketing, quality improvement and training of personnel has contributed significantly to the growth of the Company. NGI, Japan has not only subscribed the Optionally Convertible Preference Shares for an amount of Rs. 1580 lakhs issued by the Company in full, but also provided term loan assistance to the Company at attractive rates of interest. NGI, Inc. Japan has provided guidance and considerable financial support for the scheme of revival of the subsidiary, Reva Proteins Ltd. Kerala State Industrial Development Corporation Ltd., the other promoter is also equally supportive to each and every development concerning your Company.

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

The Nomination and Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management cadre in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every directorâs performance.

The Nomination and Remuneration Committee does formulate the criteria for determining qualifications, positive attributes and independence of a director recommending to the Board a policy relating to the remuneration for the directors, key managerial personnel and senior management personnel meaning thereby employees of the company who are members of the core management excluding Board of Directors. This would comprise all members of management one level below the Executive Directors, including all functional heads.

The Remuneration policy to ensure that:â

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate personnel as are herein referred to above of the quality required to run the company successfully;

- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to Whole-time directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

INTERNAL CONTROL SYSTEM

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The Company has engaged a professional firm of Accountants with long years of experience to carry out the internal audit function. The Company has not placed any limitation on the scope and authority of the internal audit function. The internal audit function evaluates the efficacy and adequacy of internal control systems, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. To maintain its objectivity, effectiveness and independence, the internal audit is being carried out on a quarterly basis and reports thereon, along with the remarks of the process owners on each of the observations of audit are placed before the Audit Committee of the Board. The Audit Committee reviews each of the internal audit reports as a separate item of agenda along with the internal / statutory auditors and the management representatives wherein the Committee gives their advice / suggestions on the audit points. Based on the report of the internal audit as well as the observations of the Audit Committee the process owners undertake requisite corrective action in their respective areas thereby further strengthening the control systems. The minutes of the Audit Committee are reviewed by the Board of Directors.

INTERNAL CONROLS OF FINANCIAL REPORTING

The Company has in place adequate financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design on operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Board is of the view that appropriate procedures and controls are operating effectively and monitoring procedures are in place.

RESPONSIBILITY STATEMENT OF DIRECTORS

a) that in the preparation of the annual accounts for the year ended 31st March, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected such accounting policies as mentioned in Note 1 of the notes to the Financial Statements 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 as at 31^st March 2016 and of the profit of the Company for the year ended on that date;

d) that they had prepared the annual accounts on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Company''s Act and as well as SEBI (LODR) Regulations. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, prior omnibus approval of the Audit Committee is obtained on a quarterly basis for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions actually taken place are subsequently reviewed by the Audit Committee on a quarterly basis in comparison with the conditions of omnibus approval and are recommended to the Board for approval. Additionally material Related Party Transactions foreseen in the year ahead, were got approved by the members also. Particulars of contracts of arrangements with Related Parties referred to in sub section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations 2015 are presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (LODR) Regulations. A separate section on corporate governance under SEBI (LODR) Regulations 2015, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report

CONSOLIDATED FINANCIAL STATEMENTS

DIRECTORS

Your Board had appointed Dr. K. Cherian Varghese as an Additional Director on the Board w.e.f. 08.09.2015. Dr. K.Cherian Varghese, a banker by profession was General Manager in Indian Bank. He had a stint in South Indian Bank as their Chairman & CEO. He was the Executive Director of Central Bank of India before holding post as CMD successively, in two leading Public Sector Banks namely, Corporation Bank and Union Bank of India. He also served as member and Chairman of the Board for Industrial & Financial Reconstruction of Govt. of India.

Mr. Norimichi Soga, currently the Director & Chairman of Nitta Gelatin Inc., Japan was a member of the Board of Directors of your Company since May 2005. NGI, Japan vide their letter dt. 24.02.2016 withdrew their nomination of Mr. Soga as a director of the Company and instead nominated Mr. Raymond Merz, Director and Executive Officer, NGI, Japan. Mr. Seiichi Nishikawa of NGI, Japan has been appointed as an Alternate Director for Mr. Raymond Merz as envisaged under law.

The period of appointment of Mr. Takeo Yamaki as a Whole time Director designated as Director (Operations) has been extended for a further period of two years from 11.07.2016.

With great pleasure, your Directors welcome the new Directors, Dr. K. Cherian Varghese, Mr. Raymond Merz and the Alternate Director, Mr. Seiichi Nishikawa. The Board also placed on record its sincere appreciation for the valuable contribution made by Mr. Norimichi Soga during his tenure as the Director of the Company.

KEY MANAGERIAL PERSONNEL

Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors hereinabove given, it is brought to the notice of shareholders that Mr. P. Sahasranaman is appointed as Chief Financial Officer (CFO) w.e.f.01.12.2015, while Mr. G. Rajesh Kurup who held office as Company Secretary, continues as such since commencement of the Act and Rules effective 01.04.2014.

BOARD EVALUATION

Accordingly, the Board at their meeting dt. 01.02.2016 deliberated and took into record that the Independent Directors (IDs) have the requisite qualification, expertise and track record for performing their duties as envisaged under Law, and they make value addition in the decision making process of the Board. Similarly the IDs at their meeting that day evaluated and expressed satisfaction at the performance of other Directors on the Board.

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulation, the Board at its meeting dated 20.03.2015 carried out its own annual evaluation with specific reference to Independent Directors and criteria for their independence. The rest of the Board members including the Chairman of the Board were evaluated by the Independent Directors at their meeting dated 17.04.2015.

On the basis of report on performance evaluation by the Board, the Independent Directors were proposed for appointment before the Extraordinary General Meeting of the Company dated.17.04.2015, who had since been appointed

MEETINGS

The Board of Directors met 6 (six) times during the year 2015-16. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

The Board had re-constituted the Audit Committee with Mrs. Radha Unni as Chairperson, Mr. A. K. Nair, Mr. K. L. Kumar and Dr. K. Cherian Varghese as members.

More details on the Committee are given in the Corporate Governance Report.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization; providing direct access to chairperson of Audit Committee, the details regarding which has also been given in the Company''s official website.

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

PREVENTION OF INDISER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

STATUTORY AUDITORS

As per Section 139 of the Act read with Rule 6 of the Companies (Audit and Auditors) Rule, 2014, M/s. Varma & Varma, Statutory Auditors, has time till AGM corresponding to the year ended 31.03.2017 for subjecting themselves to rotation. The Board at the meeting dt. 06.05.16 having proposed to the ensuing AGM, their re-appointment for yet another year, the Auditors vide letter confirmed their eligibility under Section 141 of the Companies

Act, 2013 and other applicable provisions for reappointment as auditors of the Company. As required under SEBI (LODR) Regulations, the auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. M/s. Varma & Varma have forwarded their confirmation that their re-appointment as above is within the limits specified under the Companies Act, 2013.

Their appointment as above is being put up for approval by members at the ensuing Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed Mr. Abhilash N. A. (CP No. 14524, M No. 22601), Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VI.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 are annexed herewith as Annexure VII.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the support and assistance extended by the Government of Kerala and M/s. Kerala State Industrial Development Corporation Ltd. They also take this opportunity to extend their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. Your Board placed on record its sincere appreciation for the significant contributions made by employees across the Company through their dedication and commitment. On this occasion, your Board thank all the customers, suppliers, bankers and other associates for their unstinted co-operation. Your Directors are also thankful to the esteemed shareholders for their continued patronage and the confidence reposed in the Company and its management.

For and on behalf of the Board of Directors,

Kochi P. H. KURIAN IAS

06.05.2016 CHAIRMAN

(DIN: 00027596)

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 39th Annual Report and Audited Financial Statement of your Company for the year ended 31st March, 2015. The Management Discussion and Analysis is also incorporated into this report.

FINANCIAL RESULTS (Rs. in Crores)

For the year ended For the year ended Particulars 31st March, 2015 31st March, 2014

Sales (including export incentives and net of Excise Duty & VAT) 359.13 289.24

Other Income 2.03 0.12

TOTAL 361.16 289.36

Gross Profit before Depreciation 20.41 3.32

Deducting therefrom:

Depreciation 10.38 10.63

Provision for Tax -

* Current Tax 2.24 -

* Deferred Tax 2.58 (2.97)

* Prior years 0.11 0.62

Profit / (Loss) after Tax 5.10 (4.96)

Balance Profit / (Loss) available 5.10 (4.96) for appropriation

Appropriations :

Proposed dividend 0.91 NIL

Tax on dividend 0.18 NIL

Transfer to General reserve 2.82 NIL

Profit brought forward 12.90 17.86 from Previous Year

Balance Profit carried 14.09 12.90

to Balance Sheet 14.09 12.90

Basic & Diluted 5.62 (5.47)

Earnings per share (Rs.) 5.62 (5.47)

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.1/- per share @ 10 % of the face value of Rs. 10/- per share on the equity capital for the financial year 2014-15, for your approval in the ensuing General Meeting. The total outflow on account of dividend inclusive of corporate tax on dividend would be Rs.109.27 lakhs.

During the year, unclaimed dividend of Rs. 0.88 lakhs pertaining to the year ended 31st March, 2007, was transferred to the Investor Education & Protection Fund after giving due notice to the members.

SHARE CAPITAL

The paid-up equity share capital as on 31st March, 2015 was Rs.907.92 lakhs. During the year under review no issue of shares was made. Your company has proposed the preferential issue of 929,412 Optionally Convertible (non- cumulative) Preference Shares (OCPS) of Rs. 170/- each aggregating to Rs. 158,000,040/- to one of the promoters, M/s. Nitta Gelatin Inc., Japan. The proceeds of this issue are intended to be utilized for augmenting the environment management infrastructure at the production units of your company by upgrading the pollution control facilities, reducing water consumption and enhancing the odour mitigation systems. These shares carry a fixed dividend of 5.4029% and are redeemable at par at the expiry of seven years from the date of allotment with Put and Call option at the expiry of five years from the date of allotment.

The said OCPS carry the option to get converted into equity shares either in full or in part at a value of Rs. 170/- per Equity share of face value of Rs. 10/- and share premium of Rs. 160/- per share not later than 18 months from the date of allotment of OCPS, subject to the Company complying with Clause 40A of the Listing Agreement with the Stock Exchange post conversion and NGI, Japan adhering to the SEBI Takeover Regulations.

To facilitate the issue of OCPS as above, the Authorized share capital of your Company has been enhanced from the present Rupees Twenty Crores (comprising of 2 crore Equity shares of Rs. 10/- each) to Rupees Thirty Five Crores Eighty Lakhs and Forty only (comprising of 2 crore Equity shares of Rs. 10/- each and 929,412 Optionally Convertible (non-cumulative) Preference Shares of Rs. 170/- each).

The above proposals were approved by the members in the Extra Ordinary General Meeting held on 17.04.2015 and the OCPS shares were allotted to NGI, Japan on 28.04.2015.

RESERVES

From out of the net profits of the year, an amount of Rs. 282.00 lakhs is transferred to General Reserve. Reserves as on 31.03.2015 comprised of Security Premium Reserve of Rs. 2895.90 lakhs, Capital Investment Subsidy of Rs. 15.00 lakhs, Special Export Reserve of Rs. 79.00 lakhs, General Reserve of Rs. 6636.64 lakhs, Hedge Equalisation Reserve of Rs. 234.78 lakhs and credit balance in Profit & Loss Account of Rs. 1390.75 lakhs, aggregating to Rs. 11252.07 lakhs.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Details of Loans, Guarantees & Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PERFORMANCE

The gross revenue from operations of your Company touched an all-time high of Rs. 371.80 crores. This increase of 25% as compared to the previous year was achieved through increase in the production and sales volume of all its major products, increase in the unit sales realization of all its products (except in case of Di-Calcium Phosphate, for which the decline in price was consistent with the industry trend) besides a favourable foreign exchange rate movement in USD / INR.

Increase in Gelatin selling price during the year was 6%, Ossein 13% and Collagen Peptide 3% in comparison to previous year. In the case of Di- Calcium Phosphate, the drop in sales realization was 9%. The poultry industry in India, which had seen high growth for the past couple of years, witnessed a correction during 2014-15, with the farmers resorting to optimize costs with cheaper substitutes for feed and cutting down on the poultry population itself to contain the decline in product prices. In the case of Gelatin, though the domestic market continued to be attractive, the demand at some of the global markets declined considerably during the second half of the year.

Availability and quality of crushed bone, the main raw material, continued to pose a challenge during the review period. Crushed bone prices have registered an overall increase of 22% which dented the operating margin for the year. Despite this, by exercising utmost control over fixed overheads, prudent structuring of hedging mechanisms for foreign currency exposure and keeping the physical performance parameters under close vigil, your company could neutralise to a significant extent the factors adversely impacting the profitability of operations. This has resulted in a pre-tax profit of Rs. 10.03 crores during 2014-15 as against a net pre-tax loss of Rs. 7.31 crores during 2013-14.

The products of your Company continue to enjoy enviable market equity. The entire sale of Ossein, 48% of the total sales of Gelatin and 39% of Collagen Peptide were exported. Your Company has arrangements with our overseas collaborators, Nitta Gelatin Inc., Japan to leverage their expertise and market insights in servicing its customers in a proactive manner in line with the global standards of Nitta Group.

The consistent growth in the volume of all our products is a testimony to the strong equity enjoyed by our products in markets, worldwide.

The major production facilities of your company are the Ossein plant at Koratty, Trichur District and Gelatin/Peptide plant at Kakkanad, Ernakulum District, Kerala. All the factories owned by the Company are being operated in strict compliance with all the prescribed standards/norms prescribed by the Statutory Authorities including the State Pollution Control Board. The Kadukutty Panchayat in Trichur District, where the Ossein plant is situated, has not renewed the Panchayat license for the financial year 2015-16 as was the case from 2011 onwards. Denial of the license was challenged before the Hon'ble High Court of Kerala and the Court has ordered status quo in the matter till the final disposal of the petition. Your Company is complying with all the norms specified by the Pollution Control Authorities and this has been confirmed during the joint inspection by the National Environmental Engineering Research Institute (NEERI), Pollution Control Board Authorities and the District Administration. Based on expert legal advice, the earlier Court verdicts in the matter and the real facts of the situation, the Company believes that it has a very strong case and expects a favourable decision in the appellate proceedings.

BONUS ISSUE & SHAREHOLDERS' RESOLUTIONS

The shareholders of the Company in the Extra Ordinary General Meeting (EGM) on 24.08.2013 had resolved as follows:-

Issue of bonus shares in the ratio of 1:3 to the promoters of the Company in partial modification of the resolution passed in relation to the issue of bonus shares only to the public shareholders, as approved in the EGM held on 29.05.2013 subject to such approvals and sanctions as may be required.

Issue of 696,667 Equity shares of the Company under an Employee Stock Purchase Scheme.

However, the issue of these shares was delayed in view of the modifications to the earlier resolutions, and SEBI vide their letter of 14.02.2014 had declined to grant condonation for the delay in issue of the aforesaid bonus shares beyond the period of two months prescribed under Regulation 95(1) of the SEBI ICDR. The appeal preferred against the said order of SEBI before the Securities & Appellate Tribunal has been decreed against the Company.

In the aforesaid circumstances, it is not possible for your Company to act upon the shareholders' resolutions referred to above.

CREDIT RATING

During the year, rating agency CRISIL has reaffirmed the rating of "CRISIL A-/Stable" for Long Term Debts and "CRISIL A2 " rating for its short term borrowings.

AWARDS & ACCOLADES

During the year your Company received the top export award in Ossein & Gelatin panel instituted by CAPEXIL for the year 2012-13.

The following are the noteworthy certifications retained by your company.

European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division HACCP Certificate for Ossein Division and Gelatin Division for food safety. (c) ISO 14001:2004 for Gelatin Division for Environment Management System

ISO 9001: 2008 for Quality Management System of the Company

FSSC Certification for Food Safety Management System for Gelatin Division 2014

(f) Halal / Kosher Certification for Gelatin and Collagen Peptide

(g) NABL Accreditation for in-house laboratory

HEALTH SAFETY AND ENVIRONMENT

Compliance with all the applicable regulations and effective monitoring for its continuance is an integral part of your company's operating philosophy. We stand committed to continually improve on these objectives. There was considerable focus on improving health, safety and environment during the year by the Company.

Health and Safety

Your Company is committed to promote the health and safety of its employees. The Company has put in place a safety committee at each of its Divisions which meets regularly to review issues impacting plant safety and employee health. Regular health check up of the employees is carried out by reputed hospitals. The Company could maintain good progress in the area of process safety with no major accidents reported during the year.

Environment

Your Company continuously endeavors to improve on matters relating to environmental management. Through all our activities, we demonstrate our commitment to protect the environment. The quality of treated water being discharged from the waste water treatment plant is well within the norms laid down by the Pollution Control Authorities. The emissions from the boilers and generator stacks are regularly monitored. With the commissioning of the biogas generator at our Ossein plant, substantial portion of the raw effluent from production is now being converted into biogas. Water recycling and water reuse are being regularly pursued and improved upon by the Company with specific targets.

At the instance of the Hon'ble High Court of Kerala, NEERI, a constituent laboratory of the Council of Scientific & Industrial Research, Govt. of India, conducted a detailed study into the pollution status with respect to the air, water and solid waste generated from the Ossein plant and the adequacy and efficacy of pollution control measures adopted by the Company. While expressing satisfaction over the effluent treatment systems in place at our Ossein plant, NEERI has made few recommendations for further improvement of the systems, all of which are being pursued for implementation by the Company. Subsequently, at the instance of the Pollution Control Board, NEERI after conducting a joint monitoring of the progress of implementation of their recommendations along with representatives of the Pollution Control Board and the District Administration has reported that the Company is implementing the recommendations in all earnestness as per the recommended schedule. As mentioned in this report, the Company has already mobilized funds to the tune of Rs. 15.80 crores through the issue of Optionally Convertible Preference Shares to finance various capital investments which are aimed at further improving the infrastructure for effective environment management and water conservation. With this, your Company will be further equipped with state-of-the-art facilities for managing its environment and hence the health and safety of the employees and the local community at large.

The ambient air quality in our Ossein plant is being monitored on a continuous basis to conform to the regulations relating to ambient air quality standards. Out of the total plot area of approximately 1,53,900 sq. meters, about 10,000 sq. meters of land around the boundary of Gelatin Division and about 38,000 sq. meters of land in Ossein Division have been developed and maintained as a green belt.

These steps are expected to go a long way in furthering our efforts to protect the nature and environment.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has formulated a well structured CSR Policy aimed at providing focus and direction to the various activities on CSR being undertaken by the Company including through the charitable trust, K. T. Chandy - Seiichi Nitta Foundation and other approved agencies. The projects undertaken by the Company are in the areas of education, livelihood, health, water and sanitation. These projects are in accordance with Schedule VII of the Companies Act, 2013. Annual Report on CSR activities is annexed herewith as Annexure I.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

In accordance with the provisions of the Listing Agreement, your Company had formulated a Material Subsidiary Policy specifying the criteria for determining the Material Subsidiaries. The said policy is available in the Company website www. gelatin.in.

SUBSIDIARY COMPANIES

BAMNI PROTEINS LIMITED

The annual production during the year in this subsidiary company was 2345 MT of Ossein and 5135 MT of Dicalcium Phosphate as against 2417 MT of Ossein and 5470 MT of Di-Calcium Phosphate during the previous year.

The operation of this subsidiary for the year under review has resulted in a net loss of Rs. 54.86 Lakhs post tax as against a net profit of Rs. 72.39 lakhs post tax for the previous financial year. This was largely on account of product quality issues besides increase in the cost of utilities.

REVA PROTEINS LIMITED

At Reva Proteins Ltd., the Plant capacity utilization was only around 50% during the financial year 2014- 15 owing to non-commissioning of the pipeline by the Government, for marine discharge of the treated effluent, thereby restricting the quantum of discharge of treated effluent into the existing effluent discharge pipeline. Such restrictions are expected to be withdrawn once the marine discharge pipeline intended for Jhagadia Industrial Estate (now under construction), and scheduled to go on stream during the middle of 2015- 16, gets commissioned.

During the financial year ended 31.03.2015, this subsidiary recorded a net loss of Rs. 813.92 lakhs and a cash loss of Rs. 519.14 lakhs as against a net loss of Rs. 231.06 lakhs and a cash profit of Rs. 283.80 lakhs during the previous financial year. The annual production during 2014-15 was 1336.65 MT of Ossein, 521.90 MT of Limed Ossein as against 1869.34 MT of Ossein and 1039.75 MT of Limed Ossein during the previous year.

The statement containing the salient features of the financial statement of both the subsidiaries under first proviso to sub-section (3) of section 129 of the Act in form AOC 1 is attached as Annexure II.

Annual accounts of the subsidiary companies and related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be available for inspection by any shareholder at the Registered Office of the Company and subsidiary companies concerned. Hard copy of details of accounts of subsidiaries shall be furnished to any shareholder on demand. Further, pursuant to Accounting Standard AS - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its subsidiaries.

STATUTORY AUDITORS' REPORT

Observation of audit vide para 7(b) of Annexure referred to in the paragraph titled "Report on Other Legal and Regulatory Requirements" of the Independent Auditor's Report for the year. The points covered in the above para are explained in detail under para 2.28 of the Notes forming part of the accounts for the year and hence no further comments are called for.

SECRETARIAL AUDITORS' REPORT - EXPLANATION TO OBSERVATIONS OF AUDIT

As prescribed under Section 204 (1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given herein below:

Sl No Observation Reply

1 Pursuant to the provisions of Section 149 of the Companies Act, 2013 read with Rules and MCA General Circular No.14/2014 dated 09.06.2014, the appointment of Independent Directors under the Companies Act, 2013 ought to have been made be- fore 31st March, 2015. But the Company had not appointed In- dependent Directors at the General Meeting on or before the said date. Nevertheless, the Company at their Board Meeting had appointed Additional Directors meeting the criteria of In- dependence in the category of Independent Director within the said date and issued notice for Extra Ordinary General Meeting for the appointment of Independent Directors which was only held on 17th April, 2015.

There was substantial compliance of the provisions, when Independent Directors were identified against the criteria recognized / fixed by the Board, and proposals made and notice sent to the shareholders for the General Meeting, before 31.03.2015. The delay was only to the extent of 17 days, since the EGM held on 17.04.2015, appointed the Independent Directors.

2 Pursuant to Section 158 of the Companies Act, 2013 every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number(DIN) in such return, information or particulars in case such return, informa- tion or particulars relate to the director or contain any refer- ence of any director. But DIN Nos of the Directors are not men- tioned in the AGM Notice dated 09/05/2014 ,Directors' Report and Financial Statements and Resolutions filed with Registrar of Companies.

Subsequent to the AGM notice dt. 09.05.2014 referred to by audit, the notice for the EGM held on 17.04.2015, had conformed to the requirement of showing the DIN No. of Directors in the corresponding resolutions.

3. The Company's Memorandum and Articles of Association should be amended in order to align with the Companies Act, 2013. This is more specifically required since the Board of Di- rectors had approved increase of Authorised capital at their meeting held on 20.03.2015 and issued notice for the Extra Ordinary General Meeting for approval of the shareholders for the alteration of MOA and AOA. Consequently, the Sharehold- ers at the EGM held on 17.04.2015 had approved the same. Hence, considering Section 5(9) of the Companies Act, 2013 too, the Company is advised to immediately amend the MOA and AOA in order to align with the Companies Act, 2013.

With the governing provisions under Companies Act and SEBI Guidelines having settled down we are soon initiating required amendments to the MOA and AOA.

4 There was delay of 54 days in filing Form CHG-1 for the mod- ification of Charge ID 90016886 in connection with the en- hancement of working capital limit of Rs 487100000 to Rs 54 7100000 by the State Bank of India .

There were two reasons why we encountered a delay of 54 days in filing CHG-1. This CHG form had to return from the charge holder banker after affixing Digital Signature. Besides, when the form was thus ready for uploading, they underwent modification in the said MCA format, resulting in the delay.

5 The Clause 47 (C) Certificate for the half year ended 31.03.2014 pursuant to Listing Agreement stated that the Company had delivered Debenture Certificate within 15 days under transfer but in reality the Company had not issued any Debentures. The Clause 47 (C) Certificate for the half year ended 30.09.2014 shows the period as 01.03.2014 to 31.08.2014, which does not reflect the status of transfer during the month of September, 2014.

This shall be taken care in future.

6 Pursuant to Clause 54 of the Listing Agreement, even though the Company is maintaining functional web site, certain ele- ments like Shareholding Pattern, Compliance with Corporate Governance, Financial Information, Contact information of the designated officials of the company who are responsible for assisting and handling investor grievances, details of agree- ments entered into with the media companies and/or their associates, if any are not posted in the Web site of the Com- pany, regularly.

The functional website shall soon be updated and arrangements made for it to be updated regularly thereafter.

7 The Company is taking apprentices pursuant to the provisions of the Apprentices Act, 1961.But on examination, has not found any Contract of apprenticeship sent by the Company to the apprenticeship advisor for registration.

Noted for corrective action

8 The Company is not notifying the vacancies to employment exchanges as prescribed in Section 4 of the Employment Ex- change (Compulsory Notification of Vacancies) Act, 1956 read with Rule 5.

Noted for corrective action

9 The Company has not furnished quarterly returns in Form No.ER-1,Biennial return in Form ER-II to local employment ex- changes as prescribed in Rule 6 made under the Employment Exchanges (Compulsory Notification of Vacancies) Act,1956.

Noted for corrective action

COLLABORATORS

Your collaborators continue to extend their unstinted support and co-operation to all the major initiatives of the Company. As mentioned, NGI, Japan has fully subscribed for the Optionally Convertible Preference Shares for an amount of Rs. 15.80 crores, apart from providing technical information, training of personnel, deputing trained technicians and marketing our products. Kerala State Industrial Development Corporation Ltd, the Indian co-promoter is providing valuable support and guidance in the management of the Company.

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

The information as required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure III.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as Annexure IV-A to this Report.

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure IV-B. In terms of first proviso to Section 136(1) of the Act 2013 the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is availbale for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

RESPONSIBILITY STATEMENT OF DIRECTORS

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b) that they had 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 as at 31st March 2015 and of the profit of the Company for the year ended on that date;

c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that they had prepared the annual accounts on a going concern basis;

e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions which is in line with the relevant provisions of the Company's Act and the Listing Agreement with the Stock Exchanges. The said policy as approved by the Board is available in the Company website www.gelatin.in. As per the said policy, omnibus approval of the Audit Committee is obtained for all the Related Party Transactions which are of a foreseen and repetitive nature. All Related Party Transactions actually taken place are subsequently reviewed by the Audit Committee / Board on a quarterly basis in comparison with the conditions of omnibus approval. Additionally, material Related Party Transactions foreseen in the year ahead, were got approved by the members also. Particulars of contracts of arrangements with Related Parties referred to in sub section 1 of Section 188 read with Rule 8(2) of the (Companies Accounts) Rules, 2014 are attached in Form No. AOC 2 as Annexure V.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the Listing Agreement with the Stock Exchange. A separate section on corporate governance under the Listing Agreement, along with a certificate from the auditors confirming compliance, is annexed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Schedule III of the Companies Act, 2013 and Accounting Standards 21, 27 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the Stock Exchange and form part of the Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no material weaknesses in the design or operation were observed.

DIRECTORS

During the financial year 2014-15, both the promoters of the Company, M/s. Nitta Gelatin Inc., Japan (NGI) and M/s. Kerala State Industrial Development Corporation Ltd. (KSIDC) have agreed to reduce one nominee director each to bring down the total number of nominee directors from seven to five. Accordingly, NGI has withdrawn one of their nominees, Mr. Yoshifumi Matsumoto as a Director of the Company.

Your Board has appointed an eminent banker, Smt. Radha Unni, Chief General Manager (Retd.), State Bank of India as an Additional Director of the Company in the category of Independent Directors w.e.f. 11.07.2014. Dr. Naotoshi Umeno, a faculty in management studies in Kobe University, Japan since 1987 is also appointed as an Additional Director of the Company categorized as Independent Director w.e.f. 13.11.2014.

Mr. A. K. Nair and Mr. K. L. Kumar appointed and continuing with the Company as Independent Directors as at the date of the previous Annual General Meeting were reappointed as Independent Directors of the Company.

On the basis of a formal request from NGI, KSIDC has agreed to an amendment to the promoters' agreement for appointing the nominee of NGI as a Wholetime Director designated as Director (Technical). Accordingly, Mr. Takeo Yamaki, a Director of the Company is appointed as a Wholetime Director designated as Director (Technical) for a period of two years from 11.07.2014.

All the aforesaid appointment of Directors was approved by the members of your Company in the EGM held on 17th April, 2015.

All the Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

KSIDC has nominated Dr. M. Beena IAS as a Director of the Company replacing Mr. T. P. Thomaskutty, who has retired from the service of KSIDC upon superannuation.

With great pleasure, your Directors welcome the new Directors Mrs. Radha Unni, Dr. Naotoshi Umeno and Dr. M. Beena IAS. Your Directors also record their deep sense of appreciation for the guidance and support of Mr. T. P. Thomaskutty and Mr. Yoshifumi Matsumoto during their tenure as the Directors of the Company.

Mr. K. Ramakrishnan, an Independent Director served with distinction on the Board of the Company for a long term of around 17 years. He preferred not to get reappointed as an Independent Director at the Extraordinary General Meeting of the Company held on 17.04.2015. He was therefore subject to retirement at this AGM by virtue of the provisions as per section 152 of the Act. He does not also offer for re-appointment. The Board hereby places on record its sincere thanks and gratitude for the invaluable contribution made by Mr. K. Ramakrishnan towards the growth and development of the Company during his tenure as a director. The Board also on behalf of the members wishes Mr. K. Ramakrishnan a long and healthy life. The Board will take steps to find a replacement for Mr. K. Ramakrishnan at the earliest.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board at its meeting dated 20.03.2015 carried out its own annual evaluation of performance, both in terms of Board and Committee membership, with specific reference to Independent Directors and criteria for their independence. The rest of the Board members including the Chairman of the Board were evaluated by the Independent Directors at their meeting dated 17.04.2015. On the basis of report on performance evaluation, the Independent Directors were proposed for appointment before the Extraordinary General Meeting of the Company dated.17.04.2015, who had since been appointed.

KEY MANAGERIAL PERSONNEL

Rule 8 (5)(iii) of Companies (Accounts) Rules, 2014 prescribes that Report of Directors should contain details of Directors and Key Managerial Personnel. Therefore, in addition to the details of Directors hereinabove given, it is brought to the notice of shareholders that Mr. K. Muraleedharan Nair was appointed as Chief Financial Officer (CFO) at the Board meeting dated 09.05.2014, while Mr. G. Rajesh Kurup who held office as Company Secretary, continues as such since commencement of the Act and Rules effective 01.04.2014.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management personnel and their remuneration. The Remuneration policy is given as Annexure VI of this report.

MEETINGS

The Board of Directors met 6 (six) times in the year 2014-15. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening time gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

The Board had re-constituted the Audit Committee which comprises of Mrs. Radha Unni as Chairperson with Mr. K. Ramakrishnan, Mr. A. K. Nair and Mr. K. L. Kumar as the members.

More details on the Committee are given in the Corporate Governance Report.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report genuine concerns, while providing for adequate safeguards against victimization, providing direct access to chairperson of Audit Committee, the details regarding which have also been given in the Company's official website (www.gelatin.in).

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

Your Company has always believed in providing a safe and harassment free workplace for every individual working and associating with the company, through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

A four member Internal Complaints Committee (ICC) is constituted with three lady employees and one lady NGO member. ICC is responsible for redressal of complaints relating to sexual harassment, as envisaged under the provisions of Act and Rules. Hitherto no complaints were received by ICC.

PREVENTION OF INDISER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

BUSINESS RISK MANAGEMENT

Pursuant to section 134(3)(n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The committee is entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the management systems that conducts the business of the company and manages associated risks.

The Risk Management procedures shall be periodically reviewed by the Committee to ensure that the Executive Management controls risk through the means of a properly defined frame work.

In pursuance of the aforesaid, a Risk Management Policy was developed and approved by the Board.

STATUTORY AUDITORS

In the Annual General Meeting of the Company held on 11th July, 2014 the Statutory Auditors of the Company, M/s. Varma & Varma, Chartered Accountants, Ernakulam were appointed as Statutory Auditors of the Company to hold office until the conclusion of the AGM relating to the financial year 2015-16. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as auditors of the Company. As required under Clause 49 of the Listing Agreement with the Stock Exchange, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. M/s. Varma & Varma have forwarded their confirmation that their re-appointment as above is within the limits specified under the Companies Act, 2013.

Their appointment as above is being put up for ratification by the members at the ensuing General Meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel), Rules 2014, the Company has appointed Mr. Abhilash N. A. (CP No. 14524, M No. 22601), the Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure VII.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 are annexed herewith as Annexure VIII.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the support and assistance extended by the State Government and M/s. Kerala State Industrial Development Corporation Ltd. They also take this opportunity to express their whole hearted gratitude to M/s. Nitta Gelatin Inc., Japan, for their timely and valuable guidance and inspiration. The Board also acknowledges the enthusiastic co-operation, hard work and dedication of all its employees in accomplishing the objectives of the Company. On this occasion, your Board thanks all the customers, suppliers, bankers and other associates for their unstinted co-operation. Your Directors are also thankful to the esteemed shareholders for their continued patronage and the confidence reposed in the Company and its management.

For and on behalf of the Board of Directors,

Kochi P. H. KURIAN IAS 09.05.2015 CHAIRMAN (DIN: 00027596)

Mar 31, 2013

To The Shareholders,

The Directors have pleasure in presenting the 37th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Crores)

For the year ended For the year ended Particulars 31st March, 2013 31st March, 2012 Sales (including export incentives and 306.22 245.81 net of Excise Duty & VAT)

Other Income 2.76 1.13

TOTAL 308.98 246.94

Gross Profit before Depreciation 35.87 15.51

Deducting therefrom:

Depreciation 9.74 8.97

Provision for Tax -

- Current Tax 9.37 2.20

- Deferred Tax 0.03 (0.23)

- MAT Credit - (0.48)

- Prior years 1.15 (0.03)

Profit after Tax 15.58 5.08

Balance Profit Available for Appropriation 15.58 5.08

Appropriations:

Interim Dividend 3.36 -

Final Dividend - 3.36

Tax on Dividend 0.57 0.54

Transfer to General Reserve 1.56 0.51

Profit brought forward from previous year 7.77 7.10

Balance Profit carried to Balance Sheet 17.86 7.77

DIVIDEND

The Board of Directors of the Company in their meeting held on 3rd May, 2013 declared an interim dividend of Rs. 4/- per share @ 40% of the face value of Rs. 10/- per share absorbing a sum of Rs.393.10 Lakhs (including dividend distribution tax of Rs.57.10 Lakhs) which is subject to regularisation by the shareholders in the ensuing Annual General Meeting.

The Board of Directors of the Company do not recommend any further dividend for the year under consideration.

RESERVES

Reserves as on 31.03.2013 were Security Premium Reserve Rs. 2730.00 Lakhs, Capital Investment Subsidy Rs. 15.00 Lakhs, Special Export Reserve Rs. 79.00 Lakhs, General Reserve Rs. 6412.56 Lakhs, Hedging Reserve Rs.47.85 Lakhs and surplus in Statement of Profit and Loss Rs. 1786.08 Lakhs.

PERFORMANCE

The company could increase the production/sale of all its major products during the year resulting in its gross turnover registering an increase of 26% (as against 20% during the previous year) to touch an all time high of Rs. 315 Crores. Both favourable exchange rate movements as well as increase in unit sales realization had played a key support role in accomplishing the said growth in turnover.

Inclusive of the impact of the favourable forex movements during the current year, increase in Gelatin selling price was 30% (previous year 18%) and 11% for Ossein (25% in previous year). In the case of Dicalcium Phosphate, the increase was 13% (previous year 10%) and 11% for Collagen Peptide.

Though the availability of crushed bone was marginally better during the year, quality thereof has not witnessed much improvement. In order to mitigate the adverse impact of such poor quality of crushed bone on the final product quality, the company in consultation with its collaborators has identified a couple of remedial initiatives. Of these, the company has already implemented a few and the remaining are expected to go on stream in the near future. Attributable to the persistent demand from poultry industry, crushed bone is also being used for producing poultry feed ingredients thereby adding to its demand. As a result of the above, crushed bone prices have further increased by 6% during the year against a 9% increase in the previous year. In addition to the above, the production at Ossein division, Koratty has stabilized during the period resulting in a lesser dependence on purchased Ossein/Limed Ossein for our captive requirements leading to better margins. Besides, price of Hydrochloric Acid has also shown a decline of 23% during the review period as against 22% during the previous year compared to the respective prices prevailed in the immediately preceding financial years. Increase in power charges/ restrictions in usage of power at normal rates during the period under review, had caused an incremental cost of Rs.3.76 Crores. Despite the economic turbulences in the global economic climate and more particularly the weakening of Japanese Yen against USD, our efforts for maximizing the shareholder worth has been successful to the extent that the Net Profit before tax has increased to Rs. 2613.01 Lakhs during 2012-13 as against Rs. 653.48 Lakhs in the previous year.

The products of the company continued to witness enviable market demand throughout the year. The continued patronage of our valued customers demonstrates their confidence in our brand. The increase in sales quantities gives credence to your company''s ability to keep growing in the most competitive Pharma / Healthcare market as we continuously update and respond to the changes in customer preferences. In respect of Collagen Peptide, the sales increased by around 47% followed by 10% in Dicalcium Phosphate.

The Kadukutty Panchayat, where our Ossein Plant is situated, has not renewed our factory licence for the year commencing from 01.04.2011 without any valid reasons. Therefore the Company moved the Hon''ble High Court of Kerala seeking renewal of factory licence. The matter is currently pending before the said Court and the unit is in operation. Simultaneously the company has successfully implemented the action plan formulated by the expert committee and recommended by the Kerala State Government to further improve the environment. The above initiatives have brought to light the care and commitment of the company to nature and environment besides strengthening its image among the local public and civic bodies. Your company is continuing relentless efforts in this direction and is confident that they shall meet with the approval and blessings of all concerned.

DILUTION OF PROMOTER SHAREHOLDING

The company has initiated the following actions to bring down the promoter shareholding from the existing 80.50% to less than 75% in terms of Rule 19 (2) (b) of the Securities Contracts (Regulation) Act, 1956 and in terms of the Securities Contracts (Regulation) Rules, 1957:-

(a) Fresh issue of 100,000/- equity shares of face value of Rs. 10/- each in the company to the permanent employees (other than the promoters or belonging to the promoter group) of the company under an Employee Stock Purchase Scheme framed in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

(b) Bonus issue of 579,160 equity shares in the company in the ratio of 1:3, ie., one new fully paid-up equity share of face value of Rs. 10/- for every three existing equity share of Rs. 10/-each held in the company (other than to members who constitute the promoter and promoter group). The said bonus equity shares shall be issued and allotted to those shareholders whose name appear in the register of members and in the beneficial ownership position held with the depositories as on the record date.

Both the above proposals, have been approved by the members in the Extra Ordinary General Meeting and the formalities for issue of shares are progressing.

AWARDS & ACCOLADES

Your company has honoured with several awards during the year under review as well:-

(i) Corporate Excellence Award for Green initiatives 2012-13 instituted jointly by the Federal Bank Ltd. and Kerala Management Association for Ossein Division.

(ii) Second runner-up Safety Award under the Medium Category by the Inspectorate of Factories & Boilers, Govt. of Kerala.

The following are the noteworthy Certifications retained by your Company:

(i) European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division.

(ii) HACCP Certificate for Ossein Division & Gelatin Division for food safety.

(iii) ISO 14001:2004 for Gelatin Division for Environmental Management System.

(iv) ISO 9000 for Quality Management System of the Company.

(v) NABL Accreditation for in-house Laboratory.

HEALTH, SAFETY AND ENVIRONMENT

Compliance with relevant regulations and effective management of the systems in place are an integral part of the Company''s operating philosophy and we stand committed to continually improve on these objectives. There was considerable focus on improving Health, Safety and Environment during the year by the Company.

1. Health and Safety

The Company is committed to promote the health and safety of its employees. The Company has a Safety Committee which meets regularly to review the issues impacting plant safety and employee health. Regular health check up of employees is carried out by a reputed hospital.

The company has made laudable progress in the area of process safety with no major accidents reported during the period. As a testimony to this, Ossein Division of the company is awarded the Second runner-up Safety Award under the Medium category during the year instituted by the Inspectorate of Factories & Boilers, Govt. of Kerala.

2. Environment

Your Company continuously endeavours to improve on environmental management. Through all our activities, we demonstrate our commitment to protect the environment.

All our plants are having state of the art waste water treatment plants. The quality of treated water from the waste water treatment plant is well within the norms laid down by the pollution control authorities. The emissions from boilers and generator stacks are monitored regularly. A major part of the solids generated at our Ossein plant is now being used for bio-gas generation. Water recycling and water re-use are activities continuously perused and improved upon by the company, with specific targets.

The ambient air quality in our Ossein Plant is being monitored on a continuous basis to conform to the compliance of ambient air quality standards.

Out of the total plot area of approx. 1,53,900 Sq. Metres, about 10,000 Sq. Metres of land around the boundary of Gelatin Division and about 38,000 Sq. Metres of land in Ossein Division have been allocated as green area which constitute approximately 31% of the total land area comprised in the two divisions.

Apart from the above, the Company has undertaken during the year major anti-pollution drive at Ossein Division wherein massive investments were made for reducing water consumption, setting up of biogas plant using sludge generated from production, additional green belt around the factory compound, odour monitoring system, etc.

These steps are expected to go a longway in furthering our resolve to protect the nature and environment.

CORPORATE SOCIAL RESPONSIBILITY

K. T. Chandy - Seiichi Nitta Foundation, the charitable trust promoted by the company to support our social initiatives have contributed significantly for various welfare schemes aimed mainly at the upliftment of the rural/financially backward communities around our factories. A few noteworthy programmes conducted under the aegis of the foundation mainly in the panchayaths housing our factories are :-

1. Drinking water / Lift irrigation schemes

a. Chathanchal irrigation and drinking water project - The scheme provided financial assistance of about Rs 8 lakhs for Lift irrigation project which benefitted around 400 families in the locality.

b. Nilampathinjimugal drinking water scheme- About 150 beneficiaries for this project with a financial outlay of Rs 1. 50 lakhs.

c. Padathikkara Drinking water scheme - Rs 1.60 lakhs - Financial support for installing motor and pumping line for the benefit of 300 families in the area.The project is under progress.

d. Financial support for Lift irrigation Project at Cheruvalur & Vynthala with an outlay of Rs 3.80 lakhs and benefits about 350 families in the vicinity.

2. Environmental protection

As part of the initiatives to ensure health and hygienic environment in Kadukutty panchayath, the company has promoted the installation of twenty units of domestic bio gas plants including financial support. The second phase covering 20 more plants at an outlay of Rs. 1.50 Lakhs is in progress.

3. Initiatives on organic farming:

A project named ''Harithagramam'' has been initiated during the year to promote vegetable cultivation in Kadukutty Grama Panchayath whereby seed, manure etc. are provided for cultivation to about 150 families. In addition, expert advice in agriculture and organic farming, for creating awareness on various agricultural and farming activities are also provided. The project shall cost around Rs. 3 Lakhs and aims at promoting organic farming in the area.

4. Acitivies related to education

The Trust has organised many training programmes for the students of local schools to familiarise on latest trends in Information Technology, spoken english, computer literacy, skil development, on the job training etc. In addition it contemplates financial assistance to two tribal schools in Wayanad district to the advantige of around 200 under privileged children. Foundation also provides financial assistance for noon meal to the students of nearby schools such as Kathikudam UPS, Union Higher secondary school, Mambra and Nair Samajam High School, Valoor. Akshaya noon meal programme was sponsored in Ernakulam District. Distribution of study materials were undertaken during the year in association with other organisations, clubs etc.

5.Medical camps

The foundation organized various programmes related to health which included awareness campaigns, medical camps, distribution of medicines through palliative care association and other organizations like Samaritan Santhom Convent, Ambazhakad, free Diabetic detection camp, counseling at Vayojana clubs etc. In addition it conducted three major medical camps in Kadukutty Panchayath.

6.Sports coaching camps and tournaments

In order to promote sports talents among the school students, the Company conducted various coaching camps, athletic competitions, games etc. with active participation of nearby schools and various clubs.

SUBSIDIARY COMPANIES

1) BAMNI PROTEINS LIMITED

The annual production during the year in this subsidiary company was 2472 MT of Ossein and 5280 MT of Dicalcium Phosphate as against 2423 MT of Ossein and 5290 MT of Dicalcium Phosphate during the previous year. The Company has recorded a net profit of Rs. 102.24 Lakhs after tax as against Rs. 13.59 Lakhs during the previous fiscal. But for the increase in cost of power, the Company''s profitability would have been even higher.

2) REVA PROTEINS LIMITED

Reva Proteins Limited could not be operated to its entire commissioned capacity during the year for want of permission for the discharge of effluent from the Pollution Control Authorities. We have reliably learnt that the deficiency in infrastructure with the Pollution Control Authorities are under augmentation.

During the financial year ended 31.03.2013, Reva Proteins Ltd. have registered a net loss of Rs. 762.49 Lakhs as against Rs.61.47 Lakhs during the previous financial year period 27.03.2012 to 31.03.2012. The annual production during the year at this subsidiary was 950 MT of Ossein and 852 MT of Dicalcium Phosphate.

Nitta Gelatin Inc, Japan has subscribed to 48 Lakhs equity shares (25.45%) of face value of Rs.10/- each at a price of Rs.25/- per share in this subsidiary during the year.

In terms of the general circular dated 8th February 2011 issued by Government of India, Ministry of Corporate Affairs, copy of the balance sheets, profit & loss accounts, reports of the Board of Directors and auditors of the subsidiary companies have not been attached with the balance sheet of the Company. Annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be available for inspection by any shareholder at the Head Office of the Company and the subsidiary companies concerned. Hard copy of accounts of subsidiaries shall be furnished to any shareholder on demand. Further, pursuant to Accounting Standard (AS) - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its subsidiaries.

AUDITORS'' REPORT

1. Emphasis of Matter on the accounts of the company referred to in the Auditors'' Report is explained in detail under para 2.27.2 (i), (ii), 2.27.1 (i) and 2.27.2(iii) of the Notes forming part of accounts for the year and hence no further comments are necessary.

2. Observation of audit vide para 9(a) of the Annexure to the Auditors'' Report. The amount referred to by audit, fully provided for in the accounts, can be remitted only after the execution of a new agreement with the Irrigation Department, Government of Kerala. The said agreement is currently under finalization by the Government.

3. Observation of audit vide para 9 (b) of the Annexure to the Auditors'' Report - The points covered in the above para are explained in detail under para 2.27.2 (iii), (i) and (ii) respectively of the Notes forming part of the accounts for the year and hence no further comments are called for.

COLLABORATORS

Your Collaborators continue to extent their unstinted support and co-operation to each and every initiate of the Company. They have been supporting us by providing technical information, training of personnel, deputing trained technicians to our Plants and marketing our products.

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

The information as required under Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed.

PARTICULARS OF EMPLOYEES

None of the employees of the Company are coming under the purview of Section 217(2A) of the Companies Act, 1956.

RESPONSIBILITY STATEMENT OF DIRECTORS

Directors responsibility statement on the Annual Accounts of the Company for the year ended 31.03.2013, pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956.

Your Directors confirm:

i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii) That 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 as at 31st March 2013 and of the profit of the Company for the year ended 31st March 2013.

iii) That they have taken proper and sufficient care for the maintenance of adequate accounting records in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That they have got prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Report on Management Discussion and Analysis is annexed.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges relating to Corporate Governance.

A separate section on Corporate Governance together with a certificate from your Company''s Statutory Auditors forms part of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Accounting Standards 21, 27 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the Stock Exchanges and forms part of the Annual Report.

ADDITIONAL DISCLOSURES

Keeping in view the requirements of the Listing Agreements and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in respect of Related Party Transactions and Segmental Reporting.

DIRECTORS

Mr. Alkesh Kumar Sharma IAS, who was a Director of the Company with effect from 17.07.2009 ceased to hold office on 06.11.2012 consequent on the Kerala State Industrial Development Corporation Limited (KSIDC) vide their letter dated 06.11.2012 nominating Mr. Tom Jose IAS, Managing Director, KSIDC as a Director of the Company. KSIDC has also vide letter dated 03.04.2013 nominated Mr. T. P. Thomaskutty, Executive Director, KSIDC as a Director of the company in the place of Mr. Venu Nallur

Your Directors extend a warm welcome to Mr. Tom Jose IAS and Mr. T. P. Thomaskutty as members of the Board. The Board also places on record the appreciation for the valuable guidance and support extended by both Mr. Alkesh Kumar Sharma IAS and Mr. Venu Nallur during their tenure as Directors.

Under the provisions of the Articles of Association of the Company and the Companies Act, 1956 Mr. N. Soga and Mr. A. K. Nair retire by rotation and are eligible for re-appointment. Necessary resolution in this behalf have been proposed for consideration of the members. Your Directors have pleasure in recommending their re-appointment.

AUDITORS

The Board on the recommendation of the Audit Committee propose that M/s. Varma & Varma, the retiring auditors, be re-appointed as Auditors of the Company. M/s. Varma & Varma, Chartered Accountants, Cochin, has forwarded their Certificate to the Company stating that the re-appointment if made will be within the limit specified in that behalf in sub-section 1(B) of Section 224 of the Companies Act, 1956. A Special Resolution is being proposed for their re-appointment.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude for the support, co-operation and encouragement extended by the State Government and M/s. Kerala State Industrial Development Corporation Limited for the operations of the company. Your Directors also take this opportunity to thank M/s. Nitta Gelatin Inc., Japan, for their learned guidance and valuable direction. Your Directors also wish to place on record sincere appreciation for the continuing support and whole-hearted efforts of Vendors, Dealers, Business Associates and Employees in ensuring an excellent all round operational performance. Your Directors are also thankful to the esteemed Shareholders for their continued patronage and the confidence reposed in the Company and its management.

For and on behalf of the Board

Kochi V. SOMASUNDARAN IAS

29th May 2013 Chairman

Mar 31, 2011

The Directors have pleasure in presenting the 35th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2011.

FINANCIAL RESULTS

For the year For the year ended 31st ended 31st March, 2011 March, 2010 (Rs. In (Rs. in crores) crores)

Sales (Net of Excise Duty & VAT) 196.50 189.41

Other Income (including Export incentive) 8.65 7.98

TOTAL 205.15 197.39

Gross Profit before Depreciation 10.94 38.19 Deducting therefrom:

Depreciation 8.43 7.43

Provision for Tax -

- Current Tax 0.52 9.93

- Deferred Tax 0.41 (0.20)

- MAT Credit - (4.37)

-Prior years (0.31) (0.06)

Profit after Tax 1.89 25.46 Balance Profit Available for Appropriation 1.89 25.46

The appropriations are:

Dividend 3.36 5.04

Tax on Dividend 0.56 0.84

Transfer to General Reserve 0.19 13.16

Profit brought forward from Previous Year 9.32 2.90

Balance Profit carried to Balance Sheet 7.10 9.32

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4/- per share @ 40% of the face value of Rs. 10/- per share on the equity capital for the financial year ended 31st March 2011, for the approval of the Company in General Meeting. The total outflow on account of dividend inclusive of Corporate Tax on dividend would be Rs. 3.92 Crores.

PERFORMANCE

The Gross sales of the company touched Rs. 202 crores during the year thereby maintaining the percentage increase of 4% over the previous year. During the year, the Company could achieve improvement in net realization for all its existing products over the previous year. Ossein prices marked an increase of 8%, DCP 15% and Gelatin by 3% over the previous year. Besides the Company has ventured into the retail consumer market with its maiden consumer product GELIXER COLLAGENPEP (for healthy joints, promotes cartilage health, maintains joint flexibility and mobility) during the year under review and could attain a sale of 1.23 Lakh Jars within nine months. Other new products launched include SEEDAID and NUTRIGOLD (for higher germination rate of seeds and growth rate for agricultural produces), MEAT MEAL (a pet food ingredient) and CHITOSAN (applications in Cosmetics, Bio-medical and Nutritional Products). In addition to BOVINE COLLAGEN PEPTIDE introduced during the previous year, the Company has successfully commenced the manufacture and sale of FISH COLLAGEN PEPTIDE as well.

Our main raw material, Crushed Bone is a byproduct of the meat industry. Last year, in the aftermath of global recession, the meat export from India reduced considerably. Moreover, there was a shift in domestic consumption from beef to poultry products. These had reduced slaughtering. Added to this, the growth of poultry industry increased the consumption of Meat-cum-Bone Meal, a poultry feed ingredient made out of bones. This scenario also had led to a reduction in the production of Crushed Bone eventually leading to its increase in price.

Similarly, the demand for Caustic Soda had reduced due to which the chlor- alkali companies reduced production of Hydrochloric Acid at a time when there was a heavy demand. This has contributed to a phenomenal increase in cost of Hydrochloric Acid, the other major raw material for Ossein production.

As a result of the above, Crushed Bone price increased by 22% and HC1 prices by 92% over the previous year. This price increase had pulled down the net profit by Rs. 1344.01 Lakhs due to Crushed Bone and Rs. 558.05 Lakhs due to Hydrochloric Acid. Companys first consumer product, Gelixer CollagenPep, being a new entrant in the consumer market, expenses on product launch and market promotion touched Rs. 393.11 Lakhs. The decline in USD/INR exchange rate from Rs. 46.81 in the previous year to Rs. 45.27 in the current year had cost us Rs. 3.07 Crores. The Company is trying to pass on these escalation in costs to our customers. However, due to the peculiarities of our products/industry, it will take some time to accomplish this fully.

The incremental revenue that could be generated from improved sales realization, enhancement in sale quantities and the launch of new products was more than offset by the negative impact of all the aforesaid adverse situations causing a decline in profits during the year. Net Profit before tax for the year is Rs. 2.51 Crores. The Company has made a net provision of Rs. 0.62 Crore as Income-Tax. Net Profit for the year after tax works out to Rs. 1.89 Crores.

In spite of all these adverse factors, we could maintain our supplies to our major customers. Also we continued our endeavour to grow. Keeping in line with our strategy for growth, we have taken steps to add more value added products in our basket. Besides, with newly acquired facilities, we propose to establish a few of our new projects/ products. Your Company sold 1774 MT of Gelatin in the export market in 30 Countries and 1693 MT in the domestic market in 2010-11. The continued patronage of our valued customers demonstrate their confidence in our Brand. The constant demand for our product gives credence to your Companys ability to keep growing in the most competitive Gelatin market as we continuously update and respond to the changes in customers preferences.

ACQUISITION OF FACTORY AT AROOR

During the year, your Company has acquired the assets including land and factory building at a total outlay of Rs. 777.31 Lakhs in Aroor Industrial Estate, Alappuzha District.

AWARDS & ACCOLADES

Your Company has received several awards during the year. Some of the significant accolades received include:

1. Top Export Award from CAPEXIL - Ossein & Gelatin Panel.

2. ISO 14001:2004 for Gelatin Division for Environmental Management System.

3. Best SME Award 2010 for International Trade from Yes Bank and Business Today.

4. ISO 9000 for Quality Management System of the Company.

5. NABL Accreditation for in-house Laboratory.

The following internationally recognized Certifications have been maintained by your Company:

1. European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division.

2. HACCP Certificate for Ossein Division & Gelatin Division for food safety.

HEALTH, SAFETY AND ENVIRONMENT

Your Company continues to lay great emphasis on Health, Safety and Environment. Every possible effort is being channelised by the Company to comply with the relevant regulations and their effective management.

1. Health and Safety

The Company is committed to promoting the health and safety of its employees for which regular medical check-ups are being arranged. All its Divisions have Safety Committee which includes representation from workmen. The Committee meets regularly to review issues impacting plant safety and employee health. The plants are equipped with first-aid room to meet any emergency. A cross functional team for employee health and safety and an emergency action plan are in place.

2. Environment

Out of the total plot area of approx. 1,53,900 Sq. Metres, about 10,000 Sq. Metres of land around the boundary of Gelatin Division and about 38,000 Sq. Metres of land in Ossein Division have been allocated as green area which constitute approximately 31% of the total land area comprised in the two divisions.

The Company has in place modern state of the art effluent treatment plants both at Ossein Division and Gelatin Division for treating and discharging effluent water well within the limits set by the

State Pollution Control Board. The emissions from boilers and generator stacks are monitored regularly. A part of the effluent waste is used for generating bio-gas for Ossein Division. We continue our endeavour to protect the environment and at the same time avail incentives like carbon credit. The Company continuously strives to improve on environmental management to minimize any adverse impact.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has pursued its activities under Corporate Social Responsibility during this year as well. A few noteworthy programmes conducted under the aegis of the Company are - (i) provision of energy efficient lamps for families staying in the vicinity of Ossein Division (ii) conducting free medical camps (iii) conducting various awareness programmes to local people etc.,

The activities of the Charitable Trust, K.T. Chandy - Seiichi Nitta Foundation, promoted by the Company for spearheading CSR activities, include donations for house construction for poor families jointly with Koratty Panchayat. The other regular activities continued during the year.

SUBSIDIARY COMPANIES

1) BAMNI PROTEINS LTD.

The annual production during the year in this subsidiary company was 2407 MT of Ossein and 5295 MT of Dicalcium Phosphate as against 2366 MT and 5284 MT respectively during the previous year. The Company has recorded a net profit of Rs. 27.52 Lakhs after tax as against Rs. 42.68 Lakhs during the previous year. But for the increase in cost of power and other utilities, the Companys profitability would have been higher.

The Directors Report, Balance Sheet and Profit & Loss Account of Bamni Proteins Ltd. for the year 2010-11 are attached as required under Section 212 of the Companies Act, 1956.

2) REVA PROTEINS LTD.

The new Plant owned by the subsidiary company "REVA PROTEINS LIMITED" with a capacity to produce 1700 MT of Limed Ossein and the by- product, Dicalcium Phosphate has reach ed an advanced stage of completion and is slated for commissioning during the first quarter of 2011-12. The net loss after tax of the Company was Rs. 31.96 Lakhs as against Rs. 60.31 Lakhs for the previous year.

The Directors Report, Balance Sheet and Profit & Loss Account of Reva Proteins Limited for the year 2010-11 are attached as required under Section 212 of the Companies Act, 1956.

AUDITORS REPORT

i) Note No. B 13 (b) (1) of Schedule - 19 to the accounts refered to in para (3) of the Auditors

Report is self-explanatory and no further comments are called for.

ii) Observation of audit vide para 9 (b) of the Annexure to the report is explained in detail in para B 13 (a) of Schedule - 19 to the accounts.

COLLABORATORS

Your Collaborators continue to provide their whole- hearted co-operation to your Company in all its activities. They have been supporting us by providing technical information, training of personnel and deputation of experts to our facilities.

CONSERVATION OF ENERGY, TECHNOLOG ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information as required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed.

PERFORMANCE MANAGEMENT PROCESS

A Performance Management Process has been introduced in the Company in earlier years to act as a catalyst for its ambitious growth plans. This has been further streamlined to encompass every key area of operation such as Purchase, Production, Marketing, Process Development, HR and Finance. Under each of the key areas of operations, critical parameters having a significant impact on the bottom-line are identified and specific targets are set by the management to be collectively pursued for attainment by various group of employees selected from all levels and the achievements are constantly evaluated against such targets. This has paved the way for a sense of participation and togetherness among employees at all levels.

HUMAN RESOURCE

Your Company continuously strives to foster a culture of high performance. Your Management has infused a lot of rigor and intensity in its people development processes and in honing skill sets. Companys HR processes are absolutely aligned to organizational goals.

Ongoing learning, aligning, recognition and rewards with performance have enabled your Company to successfully manage its growth plans.

PARTICULARS OF EMPLOYEES

None of the employees of the Company are coming under the purview of Section 217(2A) of the Companies Act, 1956. Details of managerial remuneration under Section 198 of the Act, are furnished under Note No. B2 of Schedule 19 forming part of the Accounts.

RESPONSIBILITY STATEMENT OF DIRECTORS

Directors responsibility statement on the Annual Accounts of the Company for the year ended 31.3.2011, pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956.

Your Directors confirm:

i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii) That 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 as at 31st March 2011 and of the profit of the Company for the year ended 31st March 2011.

iii) That they have taken proper and sufficient care for the maintenance of adequate accounting records in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That they have got prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Report on Management Discussion and Analysis is annexed.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges relating to Corporate Governance.

A separate section on Corporate Governance together with a certificate from your Companys Statutory Auditors forms a part of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Accounting Standards 21, 27 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the Stock Exchanges and forms part of the Annual Report.

ADDITIONAL DISCLOSURES

Keeping in view the requirements of the Listing Agreements and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in

respect of Related Party Transactions and Segmental Reporting.

DIRECTORS

Under the provisions of the Articles of Association of the Company and the Companies Act, 1956, Mr. K.L. Kumar and Mr. T. Yamaki retire by rotation and are eligible for re-appointment. The Managing Director Mr. G. Suseelan completed his tenure of three years in office as per the terms of his original appointment on 31.03.2011, while the Board of Directors, on recommendation by the Remuneration Committee based on the nomination received by it from M/s. Nitta Gelatin Inc., Japan, reappointed him as Managing Director for a further term of 3 years w.e.f. 01.04.2011. Necessary resolutions in this behalf have been proposed for consideration of the members. Your Directors have pleasure in recommending their re- appointment.

The information on the particulars of Directors seeking appointment/re-appointment as required under Clause 49 of the Listing Agreement executed with Stock Exchange has been furnished under Corporate Governance Report.

AUDITORS

The Board on the recommendation of the Audit Committee propose that M/s. Varma & Varma, the retiring auditors, be re-appointed as Auditors of the Company. M/s. Varma & Varma, Chartered Accountants, Cochin, has forwarded their Certificate to the Company stating that the re-appointment if made will be within the limit specified in that behalf in sub-section 1(B) of Section 224 of the Companies Act, 1956. A Special Resolution is being proposed for their re-appointment.

ACKNOWLEDGEMENT

Your Directors acknowledge the dedication and commitment of your Companys employees to the growth of your company. Their unstinted support has been and continues to be an integral part to your Companys on-going success.

The Board also wishes to thank M/s. Nitta Gelatin Inc., Japan, M/s. Kerala State Industrial Development Corporation Limited, the State and Central Governments, the Companys Bankers, Customers, Suppliers and Shareholders for their continued co-operation and support.

For and on behalf of the Board,

T. BALAKRISHNAN IAS Chairman

Thiruvananthapuram 10th May 2011

Mar 31, 2010

The Directors have pleasure in presenting the 34th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

For the year ended For the year ended 31st March, 2010 31st March, 2009 (Rs. in Crores) (Rs. in Crores) Sales (Net of Excise Duty + VAT) 189.56 182.48 Other Income (including Export incentive) 8.09 4.98 TOTAL 197.65 187.46 Gross Profit before Depreciation 38.19 33.21 Deducting therefrom: Depreciation 7.43 8.55 Provision for Tax : - Current Tax 9.93 2.79 - Deferred fax (0.20) 6.57 - Fringe Benefit Tax - 0.15 - MAT Credit (4.37) - Prior years (0.06) 0.13 Profit after Tax 25.46 15.02 Balance Profit Available for Appropriation 25.46 15.02 The appropriations are: Dividend 5.04 2.52 Tax on Dividend 0.84 0.43 Transfer to General Reserve 13.16 4.00 Profit/(Loss) brought forward from Previous Year 2.90 (5.17) Balance Profit carried to Balance Sheet 9.32 2.90

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.6/- per share @ 60% of the face value of Rs. 10/- per share (including a special dividend of Rs. 2/- per share @ 20% of face value) on the equity capital for the Financial Year ended 31st March 2010, for the approval of the Company in General Meeting. The total outflow on account of dividend inclusive of Corporate Tax on dividend would be Rs. 5.88 Crores.

PERFORMANCE

The Gross Sales of the Company increased by 4% over the previous year to Rs. 194 Crores. The Company could achieve a 16% increase in sales volume of Gelatin and an increased price realization for Gelatin and Ossein during the year. However, in the case of Dicalcium Phosphate (DCP)

the price reduced by Rs. 600/- per MT on an average. The reduction in production of Ossein and DCP also affected Companys performance. The cost of Crushed Bone increased substantially due to shortage of the material in the market, resulting in an additional expenditure of Rs. 7.30 Crores compared to last year. The economic situation resulted in reduction of export of meat and in turn the availability of bones. Moreover, the quality of Crushed Bones affected the yield of products adversely. The profit before tax has increased by 25% over the previous year to Rs. 30.76 Crores. The Company has made a net provision of Rs. 5.30 Crores as Income-tax after setting off Minimum Alternate Tax credit of Rs. 4.37 Crores. As a result, the profit after tax increased by 69.51 % over the previous year to Rs. 25.46 Crores. During the year, US Dollar was almost stable vis- a- vis the Rupee. The average realization on Rupees per

US Dollar was Rs. 46.81 as against Rs. 46.57 during the previous year. During the year, the production of Gelatin has increased by 13% to 3988 MT (3522 MT).

During this year also the Company economised its drying operations by extending the use of firewood instead of furnace Oil to more areas, resulting in substantial savings. Use of firewood instead of coal helps in reducing carbon foot-print and as the firewood is costlier than coal, we are eligible to get Carbon Credits. The process of validation is in progress now. The withdrawal of power-cut and additional power tariff with effect from June 2009 also resulted in reduction in power cost. The increased realization and production of Gelatin, savings in fuel cost helped your Company to increase the profit. The achievement of 2009- 10 can be attributed to the strength of our brand and our strong and enduring customer relationships backed by the support of our collaborators M/s. Nitta Gelatin Inc., Japan.

Your company increased the production capacity of Gelatin by 500 MT during the current year. Your Company is also making all out efforts for further improvement of performance by increasing the overall yield and optimising the cost of production.

Your company sold 1983 MT of Gelatin in the export market in 23 Countries and 2062 MT in the domestic market. The continued patronage of our valued customers demonstrate their confidence in our Brand. The increased turnover gives credence to your companys ability to keep growing in the most competitive Gelatin market as we continuously update and respond to the changes in customers preferences.

Your company successfully commissioned a project for manufacture of Meat Meal, a pet food ingredient and Sterilized Bone Meal. A portion of our raw materials, so far being discarded as waste, is being imparted value addition for the ultimate benefit of the Company. The resultant reduction in the waste material quantity enabled a reduction in waste disposal cost as well. Your company also commissioned a project for manufacture of Chitosan. These new products were under stabilization during the year under review and their full benefit is expected to accrue during the current year. As the quantities produced were relatively small their capacity utilization have not been mentioned in the Balance Sheet.

ENTERPRISE RESOURCE PLANNING

Your Company was operating under a semi- integrated software developed in the year 2000- 01. To meet the operational requirements of the Company and to increase efficiency and reduce production cost, a decision was taken by your Board to implement an integrated ERP software - my SAP ERP ECC 6.0 (SAP). Your Directors deem it most

appropriate to have adopted the above at a time when the Company is venturing into many diversification projects. The ERP system (SAP) was implemented with effect from 01.04.2010.

AWARDS & ACCOLADES

Your Company has earned several honours. Some of the significant accolades received include:

1. Top Export Award from CAPEXIL - Ossein & Gelatin Panel.

2. ISO 14001:2004 for Gelatin Division for Environmental Management System.

The following internationally recognized Certifications are maintained by your Company:

1. European Directorate for the Quality of Medicines & Health (EDQM) Certificate for Gelatin Division.

2. HACCP Certificate for Ossein Division & Gelatin Division for food safety.

PARTICULARS OF EMPLOYEES

None of the employees of the Company is coming under the purview of Section 217(2A) of the

Companies Act, 1956. Details of managerial remuneration under Section 198 of the Act, are furnished under Note No. B2 of Schedule 19 forming part of the Accounts.

RESPONSIBILITY STATEMENT OF DIRECTORS

Directors responsibility statement on the Annual Accounts of the Company for the year ended 31.3.2010, pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956.

Your Directors confirm:

i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures.

ii) That 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 as at 31s March 2010 and of the profit of the Company for the year ended 31st| March 2010.

iii) That they have taken proper and sufficient care for the maintenance of adequate accounting records in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That they have got prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Report on Management Discussion and Analysis, is annexed.

CORPORATE GOVERNANCE

A report on Corporate Governance along with Certificate of Compliance from the Auditors is Annexed.

ADDITIONAL DISCLOSURES

Keeping in view the requirements of the Listing Agreements and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in respect of Consolidated Financial Statements, Related Party Transactions and Segmental Reporting.

DIRECTORS

Mr. Manoj Joshi IAS, who had been the Chairman of the Company with effect from 23.01.2009, ceased to hold office on 17.07.2009 consequent on the Kerala State Industrial Development Corporation Limited (KSIDC) withdrawing his nomination upon his assuming office as Secretary to Government, Health Department, Government of Kerala. Mr. T. Balakrishnan IAS, Additional Chief Secretary,

Industries & Commerce, Government of Kerala, was nominated as Director and Chairman of the Company with effect from 17.07.2009. The Directors place on record their deep appreciation of the guidance and directions given by Mr. Manoj Joshi IAS, as the Chairman of the Company. KSIDC has also nominated Mr. Alkesh Kumar Sharma IAS, Managing Director of KSIDC, as Director of the Company with effect from 17.07.2009. Your Directors extend warm welcome to Mr. T. Balakrishnan, IAS as Chairman and Mr. Alkesh Kumar Sharma, IAS as Directors of the Company.

Under the provisions of the Articles of Association of the Company and the Companies Act, 1956, Mr. A.K. Nair and Mr. K. Inoue retire by rotation and are eligible for re-appointment. Necessary resolutions in this behalf have been proposed for consideration of the members. Your Directors have pleasure in recommending their re- appointment.

The information on the particulars of Directors seeking appointment/re-appointment as required under Clause 49 of the Listing Agreement executed with Stock Exchange has been furnished under Corporate Governance Report.

AUDITORS

The Board on the recommendation of the Audit Committee propose that M/s. Varma & Varma, the retiring auditors, be re-appointed as Auditors of the Company. M/s. Varma & Varma, Chartered Accountants, Cochin, has forwarded their Certificate to the Company stating that the re- appointment if made will be within the limit specified in that behalf in sub-section 1(B) of Section 224 of the Companies Act, 1956. A Special Resolution is being proposed for their re- appointment.

ACKNOWLEDGEMENT

Your Directors acknowledge the dedication and commitment of your Companys employees to the growth of your company. Their unstinted support has been and continues to be an integral part to your Companys on-going success.

The Board also wishes to thank M/s. Nitta Gelatin Inc., Japan, M/s. Kerala State Industrial Development Corporation Limited, the State and Central Governments, the Companys Bankers, Customers, Suppliers and Shareholders for their continued co-operation and support.

For and on behalf of the Board, Thiruvananthapuram T. BALAKRISHNAN IAS 7th May 2010 Chairman

On Behalf of the Board of Directors,

[ G. SUSEELAN ] [ T. BALAKRISHNAN IAS ] MANAGING DIRECTOR CHAIRMAN

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