MANAGEMENT DISCUSSION AND ANALYSIS:

The Management of Camphor and Allied Products Limited is pleased to brsent its analysis report covering the performance of the Company for the year 2014-15 and the outlook for the future.

OVERVIEW & INDUSTRY STRUCTURE:

The Company has plants at Clutterbuckganj, Bareilly, U.P. and at Nandesari, Vadodara in Gujarat and is engaged in the manufacturing and selling of camphor, terpineols, resins, aromatic & other terpene chemicals, fragrance chemicals and fragrance chemical intermediaries.

The Company's vast product range includes Synthetic Camphor, Terpineols, Pine Oils, Resins, Astromusk, perfumery chemicals, specialty chemicals and several other chemicals finding applications in vast array of industries ranging from Flavours & Fragrances, Pharmaceuticals, Soaps & Cosmetics, Rubber & Tyre, Paints & Varnishes and many more.

OPPORTUNITIES AND THREATS:

The management is aware of the environment in which the Company operated. There is a process of constantly identifying, monitoring and reviewing potential opportunities and threads to the business and take appropriate actions at suitable times.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The information of segment-wise or product-wise performance is included in Note No. 29 of Notes on Financial Statements.

ECONOMY AND BUSINESS OUTLOOK:

As per the latest GDP growth estimates, indian economy grew by 7.4% in FY 2015 compared to 6.9% in FY 2014, mostly driven by improved economic fundamentals. Even inflation showed signs of moderation, a welcome sign-wholesale price and consumer price inflation declined to 4.2 % and 7.4 % respectively, compared with last year's 6.3% and 10.1%.Reduced inflation, falling crude oil prices, stable Rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put india on an accelerating growth track and improved the business outlook.

The Government envisages GDP growth to accelerate to 8% in FY 2016 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced.

In the latter half of the financial year the economy and the markets have been affected by the global developments including the fiscal crisis faced by Greece, the less than expected performance of the Chinese economy, the volatility in commodity markets especially in metals and minerals.

However, efforts are made to increase productivity, reduce costs by controlling wastages with most efficient use of plant & machinery.

The Company is striving hard to reduce/ control costs at all stages to improve the profitability.

RISK AND CONCERNS:

Risk is integral to any business. The Company is exposed to different types of risks such as economic, regulatory, taxation, environmental risk and political instability and also the investment outlook towards Indian Chemical Sector. The Company monitors such risk through the oversight of the senior management personnel in each of its business segments. The Company understands that in order to ensure consistent business growth, it is essential to correctly assess the potential risk area wise and take necessary steps well in advance so as to mitigate the risk to a large extent before in fact it becomes a potential hazard.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The Company has put in place necessary internal control system commensurate with its size and nature of business for facilitating accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the Company and also ensuring compliance with various laws and rules & regulations thereunder.

The internal control system designed in such a manner where various risks faced by the Company are identified and assessed. The internal control system provides for well-documented policies, guidelines, authorizations and approval procedures.

Internal Auditors conduct the audit on a regular basis and remedial measures are taken wherever necessary. The Audit Committee of the Board of Directors periodically reviews audit plans, observations and recommendations of the internal auditors as well as of external auditors with reference to significant risk areas, adequacy of internal controls etc.

DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year under review, Sales of the Company have grown considerably due to Operational efficiency brought about through better and optimum utilization of resources and proper implementation of business Policies, Plans and Strategies.

The Company has clocked a turnover of 7 35,505.74 Lakhs during the year ended 31st March 2015 as compared to 7 30932.95 Lakhs in the year ended 31st March, 2014. The Company has registered a 14.78% growth in sales during the financial year.

However there was reduction in profitability due to steep hike in price of main imported raw materials other inputs like power, natural gas, coal etc. The Company earned a Profit after tax of 7 1925.64 Lacs during the year which is decreased by 4.24% as compared to last years' Profit after tax of 7 2010.83 Lacs.

For detailed information on the financial performance with respect to operational performance, a reference may please be made to the Financial Statements.

HUMAN RESOURCES/INDUSTRIAL RELATIONS:

The Company believes that its employees are the key to driving sustainable performance and developing competitive advantage. The Company constantly facilitates and encourages its employees at all levels to enhance their knowledge and skills and continuously seeks to inculcate within its employees, a strong sense of business ethics and social responsibility.

The industrial relations in both manufacturing units of the Company continued to be cordial. The Company has arranged seminars and workshops for its work force for their developments and to equip them to adapt to the fast changing environment. In-house training programs are also conducted to enable the workforce to acquire necessary skills and update their knowledge. Necessary training and orientation in this regard is done on regular basis. Your Company continuously benchmark HR policies and practices with the best in the industry and carries out necessary improvements to attract and retain talent and build intellectual capital.

The total numbers of Employees in the Company are 442 as on 31st March 2015.

POLLUTION AND ENVIRONMENT CONTROL:

Highest importance is always given by the Company to ensure that the environment remains relatively pollution free.

Adequate pollution control facilities are installed at both the plants as per guidelines of pollution control authority and are run as per set norms.

For safety, the work force is provided with appropriate safety equipments and necessary training from time to time.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis that address expectations or projects about the future, including but not limited to statement about Company's strategy for growth, product development, market position, expenditures and financial results are forward looking statements and these forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. Actual results could differ materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations, include among others, economic conditions affecting demand/supply and price conditions in global and domestic markets, changes in government regulations, Tax laws and other statutes and incidental factors.

Every possible caution is undertaken to identify the risks and uncertainties that can affect the Company's performance.