The Directors have pleasure in presenting the Fifty-seventh Annual
 Report and the Audited Accounts for the financial year ended31
 December2012.
 
 Financial Highlights                             (Rs. in lacs)
 
                                         Year ended     Year ended
                                         31.12.2012     31.12.2011
 
 Income from operations                   28,517.24      27,500.45
 
 Profit before Interest, Depreciation &
 Tax                                       4,186.90       4,100.72
 
 Depreciation                                474.46         499.80
 
 Interest                                     10.15           6.82
 
 Profit Before Tax                         3,702.29       3,594.10
 
 Provision for tax                           944.67       1,120.29
 
 Net Profit                                2,757.62       2,473.81
 
 Profit & Loss Account brought forward    12,605.70      10,792.51
 
 Profit available for appropriation       15,363.32      13,266.32
 
 Appropriations:
 
 Proposed dividend                         7,293.47         356.75
 
 Tax on Dividend distributed               1,183.18          56.50
 
 Transfer to General Reserve                 275.76         247.38
 
 Carried to Profit & Loss Account          6,610.91      12,605.69
 
                                          15,363.32      13,266.32
 
 Performance
 
 The sales at Rs. 2732 million for the year ended 31 December 2012
 registered a 2 % growth over the sales of Rs. 2668 million for the
 previous year ended 31 December 2011. However, in terms of sales
 quantity, the tonnage sold during the year ended 31 December 2012
 marginally decreased by 0.15% over the previous year.
 
 Cost of inputs continued to rise substantially during the year under
 review, putting the Company''s contribution margins under severe
 pressure, as a consequence. The main reasons for this increase were as
 follows:
 
 a) Increase in procurement rates of raw material;
 
 b) Weakening of the Indian Rupee during the year by 11 % making the
 Company''s imports dearer; and
 
 c) Huge increases in procurement rates of electricity, fuel and natural
 gas.
 
 The Company continued making efforts during the year to reduce the
 aggregate impact of such increases through the use of innovation, R&D &
 procurement which were moderately successful. However, owing to a
 contraction of demand for its products arising as a consequence of the
 economic and manufacturing slowdown last year, the Company was not able
 to increase its selling prices during the year, to neutralize the
 adverse impact on its input costs.
 
 The sales volumes were maintained at the same level during the year
 under review. The Company was able to report a marginal increase in
 both Profit Before Tax and Profit After Tax.
 
 Dividend
 
 The Directors are pleased to recommend a normal dividend of Rs. 4.50 per
 equity share and a special dividend of Rs. 87.50 per equity share, of
 Rs.10/- each, for the year ended 31 December 2012.
 
 Directors
 
 During the year under review, Mr. Prashant Deshpande retired as the
 Whole time Director of the Company with effect from 09 July 2012 and
 also resigned from the position of Alternate Director to Dr. Matthias
 Wolfgruber from that date.
 
 Dr. Wolfgang Schutt resigned from the position of the Director of the
 Company with effect from 26 October 2012 and Dr. Guido Forstbach was
 appointed as Additional Director with effect from that date.
 
 Mr. Sharadkumar Shetye ceased to be an Alternate Director to Dr.
 Wolfgang Schutt with effect from 26 October 2012 and was appointed as
 Alternate Director to Dr. Guido Forstbach from that date.
 
 Mr. Suresh Talwar retires by rotation at the ensuing Annual General
 Meeting and being eligible, offers himself for re- appointment.
 
 Mr. Pradeep Mallick retires by rotation at the ensuing Annual General
 Meeting and though eligible, has decided to retire and not offer
 himself for re-appointment.
 
 As per the requirement under the Listing Agreement, particulars of
 Directors seeking re-appointment at the ensuing Annual General Meeting
 form part of the Notice of the meeting.
 
 None of the Directors is disqualified from being appointed as or
 holding office as Directors, as stipulated under Section 274 of the
 Companies Act, 1956.
 
 Corporate Governance
 
 Emphasizing on practicing the principles of good Corporate Governance
 in right earnest & true spirit, has been the motto of this Company
 throughout. The Board of Directors ensures that the Executive
 Management of the Company relies on maintaining transparency,
 accountability and integrity in the functioning of the Company.
 
 Pursuant to Clause 49 of the Listing Agreement, the Management
 Discussion and Analysis Report, Report on Corporate Governance and the
 Auditors Certificate regarding compliance of the same form an integral
 part of this Annual Report.
 
 Change in address of Registered Office of the Company
 
 The Company''s Registered Office has been shifted from ''Beck House,
 Damle Path, Off Law College Road, Pune 411004'' to 147, Mumbai-Pune Road,
 Pimpri, Pune 411018'' with effect from 22 January 2013.
 
 Corporate Social Responsibility
 
 The Company undertook and completed the internal and external painting
 work for Surhudh Mandal''s Chinchwad Badhir Mook Vidyalaya, a school
 imparting education to the deaf and dumb, in the month of December
 2012.
 
 The Company''s employees also in their individual capacities contribute
 voluntarily to various worthy social causes, befitting the culture of
 this Company.
 
 Listing on Bombay Stock Exchange
 
 The Company''s shares are listed on the Bombay Stock Exchange Limited
 (BSE).
 
 Directors'' Responsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, after due
 inquiry and on the basis of the information received from the operating
 management and relying upon the report of the Auditors regarding
 compliance with the Accounting Standards, the Directors confirm that:
 
 1.  In the preparation of the annual accounts, the applicable
 accounting standards have been followed, along with appropriate
 explanations relating to material departures.
 
 2.  The accounting policies have been consistently applied, and
 reasonable and prudent judgment and estimates have been made so as to
 give a true and fair view of the state of affairs of the Company as at
 31 December 2012, and the profit for the year ended on that date.
 
 3.  Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and
 preventing and detecting fraud and other irregularities.
 
 4.  The annual accounts have been prepared on a going concern basis.
 
 Cost Audit
 
 Dhananjay V Joshi & Associates, Cost Accountants, have been
 re-appointed for the year 2013 to conduct an audit of the cost
 accounting records maintained by the Company.
 
 Auditors
 
 The Auditors, BSR & Co., Chartered Accountants, Pune, retire at the
 forthcoming Annual General Meeting and are eligible for re-appointment.
 The Audit Committee recommends the re-appointment of BSR & Co., as
 Auditors of the Company for the year 2013. The Company has received a
 letter from retiring Auditors to the effect that their appointment, if
 carried out, would be within the prescribed limits under Section 224(1
 B) of the Companies Act, 1956.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo Information as required by the Companies (Disclosure
 of Particulars in the Report of Board of Directors) Rules, 1988,
 relating to Conservation of Energy, Technology Absorption, Foreign
 Exchange Earnings and Outgo, is given in Annexure A to this report.
 
 Particulars of Employees
 
 Information to be provided under Section 217(2A) of the Companies Act,
 1956, read with Companies (Particulars of Employees) Rules, 1975, is
 given in Annexure B forming part of this report.
 
 Industrial Relations
 
 The Company has reached amicable settlements with its workmen at Pimpri
 and Ankleshwar in 2013. These wage settlements, which are for a three
 year period from 1 January 2013 to 31 December 2015, were negotiated
 separately for the two sites on the basis of Region cum Industry
 principle.
 
 During the year under review, industrial relations continued to remain
 cordial.
 
 The Board wishes to place on record its appreciation to all employees
 for their continued contribution to the performance of the Company.
 
                                    For and on behalf of the Board
 
 Pune                         Suresh Talwar           Rajeev Bhide
 
 27 February 2013             Director           Managing Director