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Directors Report of Clariant Chemicals (India) Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present the 59th Annual Report together with the audited statement of accounts for the 15 months
ended March 31, 2016.

1. Financial Year change of the Company

Pursuant to the provisions of Section 2(41) of Companies Act, 2013, the Companies are required to have a uniform financial year
for the period from 1st April to 31st March. Accordingly, the Company changed its Financial Year from the period ending 31st
December to 31st March. The accounting / financial year under review was thereby, extended by a period of three months consequent
to which the financial year under review is for a period of fifteen months commencing from January 1, 2015 to March 31, 2016.

Financial year 2015-16 / year ended March 31, 2016 / period under review, wherever mentioned in this entire Annual Report, refers
to the period of fifteen months from January 1, 2015 to March 31, 2016.

2. Financial performance of the Company

(Rs, in Lakhs)

PARTICULARS 15 months 12 months
ended ended
31.03.2016 31.12.2014

Sales (Gross-
including excise duty) 1,232,10.72 1,082,48.16

Net sales 1,139,80.37 1,008,20.49

Profit before
exceptional items & tax 44,28.46 3,82.75

Add: Exceptional items 23,53.48 1,183,58.50

Profit before tax 67,81.94 1,187,41.25

Less: Tax expenses
(incl. deferred tax) 14,95.21 244,09.70

Profit after tax 52,86.73 943,31.55

Add: Balance brought
forward from 915,75.65 188,42.04

previous year

Amount available
for appropriation 968,62.38 1,131,73.59

Appropriations:

General reserve - 94,33.16

Depreciation
adjustment for change 1,65.34

in useful life
(Net of deferred tax)

Interim dividend 373,25.04 103,97.69

Proposed dividend
(final) 23,08.18

Tax on dividend
(interim & final 79,32.94 17,67.09
proposed)

Balance carried
forward to balance sheet 491,30.88 915,75.65

3. Review of operations

The Company has registered a good performance over the previous year, despite loss of sales due to divestment of leather business
in the previous year and Industrial consumer business in the period under review. The business sentiments confronted with the
challenges of market conditions and slowdown in global demand remained extremely challenging. Our agility in adapting to our
customers'' innovative needs and the aligned team work by our dedicated employees are the key enablers helping the Company
accomplish its growth.

The Company has reported total Net Sales of Rs, 1139.80 crores for the 15 months period under review as compared to Rs, 1008.20
crores in the previous year, registering a growth of 13%. The Company''s Net Sales for the continuing Businesses, registered a
growth of 12% on a like-to- like period. Of the total sales revenue of the continuing Businesses for the period, 27% is
contributed by exports. During the 15 months period, the Profit before exceptional items & tax stood at Rs, 44 crores as against
Rs, 4 crores in the previous year. Due to the strong sales, effective raw material management and better cost controls, the
Profit as a percentage of sales increased from 0.4% to 3.9%. The Net Profit after accounting of exceptional items and tax is
lower over the previous year mainly due to higher exceptional income in the previous year from sale of Kolshet site. The Company
remains committed to its growth strategy and focused to improve its continuing business, looking for higher market share in the
business segments it operates.

4. Dividend

During the period under review, based on the exceptional income arising from the sale of Kolshet land in the previous year, your
Directors had declared an interim dividend of Rs, 140/- per share (1400%) for the Financial year 2015-16 and paid the same in
January 2015. The interim dividend together with tax thereon entailed cash outflow of Rs, 447.88 crores and pay out of 41.3 % of
the Net Profits from sale of Kolshet site.

The Board of Directors is pleased to recommend a Final Dividend ofRs, 10/- per share (100%).


The final dividend together with tax thereon entails cash outflow of Rs, 27.78 crores and pay out of 52.6% of the Net Profit for
the 15 months period ended March 31, 2016.

The total dividend for the peried under review amounts to Rs, 150 per share (1500%) as compared to Rs, 39/- per share (390%) paid
for the previous year.

5. Acquisition of Carbon Black Business from Lanxess India Private Limited

In terms of the Business Transfer Agreement signed between the Company and Lanxess India Private Limited, the Company acquired
the "Carbon Black Business" from Lanxess India Private Limited effective close of business hours on March 31, 2015, comprising
the Carbon Black Dispersion plant located at Nagda, India, together with its respective assets, liabilities and employees as a
going concern on a slump sale basis for a lump sum consideration of Rs, 13.46 crores (including non-compete fees) after working
capital adjustment, as at March 31, 2015. The acquisition of Carbon Black Business was strategic for Clariant for survival of its
current business in similar products.

6. Sale of Industrial & Consumer Specialties (ICS) Business

In accordance with the approval granted by the Board pursuant to the provisions of Section 179 of the Companies Act, 2013 and the
powers conferred upon the Board by Articles of Association of the Company and as per the Valuation Report of Deloitte Haskins &
Sells, the Company sold its Industrial & Consumer Specialties (ICS) Business along with employees, assets, liabilities and
including all licenses, permits, consents and approvals thereto on a going concern by way of a slump sale on a "as is where is
basis" to Clariant India Limited, (erstwhile known as Clariant India Private Limited) for a total consideration of Rs, 42 Crore,
effective from August 1, 2015. The profit on sale of the ICS business amounting to Rs, 26.56 crores is shown under "Exceptional
Items, credit (net)"

7. Buyback of Equity Shares

In accordance with the approval granted by the Shareholders by way of special resolution through postal ballot and pursuant to
Section 68, 69, 70 and all other applicable provisions, if any, of the Companies Act, 2013 and SEBI (Buy Back of Securities)
Regulations, 1988, the Company made an offer of Buyback of 35,78,947 Equity Shares of Rs, 10 each to the shareholders of the
Company (representing 13.42% of the total number of the equity share capital of the Company) at the price ofRs, 950/- per equity
share aggregating to Rs, 340 Crore. The Buyback was through "Tender Offer" by Stock Exchange mechanism.

The Buyback Offer was open for a period from September 22, 2015 to October 7, 2015. The response to the Buyback Offer was 143.45%
and the Company bought back the entire 35,78,947 equity shares offered to the shareholders. The Paid up Equity Capital of the
Company post Buyback is Rs, 23,08,17,980/-.

8. Appointment of Link In time Private Limited as Registrar & Transfer Agent of the Company

During the period under review, an investigation was carried out by SEBI which revealed serious and alarming irregularities by
Sharepro Services (India) Private Limited ("Sharepro"), Company''s erstwhile Registrar & Transfer Agent, with regard to share
related and dividend encashment activities. Subsequently, SEBI passed an ad interim order against Sharepro on March 22, 2016,
restricting the Promoters, Directors, Senior Management and other associated persons mentioned in the said Order from accessing
the Market.

In said Order, SEBI also advised the clients of Sharepro to change their Registrar and Transfer Agent and to conduct thorough
Audit of the records and systems of Sharepro for past several years with respect to Dividends paid and securities transferred.

The Board of Directors, vide Circular Resolution dated April 7, 2016, terminated the Memorandum of Understanding entered into
with Sharepro and appointed Link In time India Private Limited ("Link In time"), who are duly registered with the Securities and
Exchange Board of India (SEBI) under SEBI (Registrars to an issue and Share Transfer Agents) Regulations, 1993, as Registrar and
Share Transfer Agents of the Company effective from April 11, 2016.

The Board has appointed N. L. Bhatia & Associates, Practising Company Secretaries, for conducting the audit and the same is in
progress.

The Board recommends for your approval the shifting of the Registers and Index of Members and Returns from the office of Sharepro
to Link In time, effective from April 11,2016.

9. Corporate Governance, Management Discussions and Analysis Report

The Company is committed to compliance standards, ensuring checks and balances between the Board and Management, as well as a
sustainable approach to create value for all stakeholders. As stipulated under SEBI (Listing Obligations & Disclosure
Requirements) Regulation, 2015, Report on Corporate Governance, Management Discussion and Analysis report as well as Auditor''s
Certificate confirming the compliance with the conditions of corporate governance are attached herewith and forms part of this
annual report.


10. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and
Company''s operations in future

During the period under review, there has been no such significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and Company''s operations in future.

11. Subsidiary Company

As on March 31, 2016, the Company does not have any subsidiary.

12. Details of Directors and Key Managerial Personnel

During the period under review, Mr. B. L. Gaggar, Executive Director retired from the services of the Company on June 30, 2015.
The Board placed on record their sincere appreciation for the valuable service rendered by Mr. B. L. Gaggar during his entire
tenure and thanked him for all the dedication, insights and expertise which was brought by him on the Board and guidance and
vision shown to the management team of the Company. Duringthe period under review, Mr. Y. H. Malegam and Mr. Bharat Patel
resigned as a member of the Board effective from October 15, 2015 and October 20, 2015 respectively. The Board appointed Mr.
Kewal Handa and Mr. Sunirmal Talukdar as Directors of the Company w.e.f. November 5, 2015 to fill in the casual vacancy caused by
the resignation of Mr. Bharat Patel and Mr. Y. H. Malegam respectively. Mr. Kewal Handa was also appointed as the Chairman of
the Company. The Board of Directors placed on record its sincere appreciation for the valuable services rendered by Mr. Bharat
Patel and Mr. Y H. Malegam for the contribution made during their tenure as Chairman and Director of the Company respectively and
wished them success for their future endeavors.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Karl Holger
Dierssen retires by rotation at the forthcoming Annual General Meeting and being eligible, he offers himself for re-appointment.

The above appointment and re-appointment forms part of the Notice of the 59th Annual General Meeting and the respective
Resolutions are recommended for your approval.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under
Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The Board appointed Ms. Amee Joshi as a Company Secretary & Compliance Officer effective from April 25, 2015 consequent to the
resignation of Mr. B. L. Gaggar as a Company Secretary & Compliance Officer on April 24, 2015. The Board appointed Mr.
Rajasubramanian as a Chief Financial Officer of the Company effective from July 1, 2015, consequent to the retirement of Mr. B.
L. Gaggar from the Company on June 30,2015. Further, on resignation of Mr. Rajasubramanian N from the services of the Company on
August 31, 2015, the Board appointed Ms. Raksha Kamdar as an Interim Chief Financial Officer w.ei. September 1,2015. At the
Board Meeting held on May 20, 2016, Mr. Sanjay Ghadge was appointed as the Chief Financial Officer of the Company effective from
May 20,2016.

13. Audit Committee

The details of the composition, meeting, attendance, etc. of the Audit Committee are provided in the Corporate Governance
Section of the Annual Report. The Board has accepted all the recommendations of the Audit Committee during the Financial period
under review.

14. Number of meeting of the Board

During the period under review, the Board of Directors met 7 times on January 12, 2015, February 12, 2015, April 22, 2015, August
4, 2015, November 5, 2015 (two meetings) and February 12, 2016.

15. Conservation of energy technology absorption, foreign exchange earnings and outgo

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the
relevant information and data for the 15 months period ended March 31, 2016 are attached to this report as "Annexure A".

16. Corporate Social Responsibility

In terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy)
Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is
chaired by Dr. (Mrs.) Indu Shahani, Independent Director of the Company, the other members of the committee are Dr. Deepak
Parikh, Vice Chairman & Managing Director and Mr. Karl Holger Dierssen, Non-Executive Director. Your Company also has in place a
CSR policy and the same is available on the website of the Company at www.clariant.com. A detailed report as per Rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as "Annexure B" forming part of this report.

17. Nomination and Remuneration Policy

The Board has, on the recommendation of Nomination and Remuneration Committee, framed a policy on Nomination and Remuneration of
its Directors and Key Managerial Personnel, which is attached as "Annexure C".


18. Board Evaluation and Familiarization programme

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015,
the Board has carried out the annual evaluation of its own performance and Board Committees by seeking the inputs of Directors on
various aspects of the Board / Committee Governance. The Board have reviewed the performance of the individual directors and the
Chairperson. The manner in which the evaluation has been carried out is stated in the Corporate Governance Report.

The details of programme for familiarization of the Independent Directors of your Company is available on the Company''s website
at www.clariant.com.

19. Particulars of Employee

The disclosure required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is attached as "Annexure D".

The statement of particulars of employees pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of this Annual Report. However, pursuant to provisions of Section 136(1) of the Companies Act,
2013, the report and accounts are being sent to members excluding this statement of particulars of employees. Any member
interested in obtaining a copy of this statement, may write to Company Secretary at the registered office of the Company.

20. Directors'' Responsibility Statement

Pursuant to the requirement under Section 134(3)(C) of the Companies Act, 2013 with respect to Directors'' Responsibility
Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the 15 months period ended 31st March, 2016, the applicable accounting
standards had been followed along with proper explanation relating to material departures;

(ii) The Directors 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 March 31,2016 and of the
profit and loss of the Company for that period;

(iii) The Directors had 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;

(iv) The Directors had prepared the annual accounts on a going concern basis;

(v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial
controls are adequate and were operating effectively; and

(vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.

21. Statutory Auditor & Audit Report

In accordance with Section 139 of the Companies Act, 2013, M/s. Price Waterhouse Chartered Accountants LLP, (Firm Regn. No
012754N/ N500016), were appointed as Statutory Auditors for a period of 4 years from the conclusion of last Annual General
Meeting, subject to ratification by the shareholders at every subsequent Annual General Meeting. The Statutory Auditors being
eligible offer themselves for reappointment. Your Directors recommend the ratification of their appointment as Statutory
Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

The Auditor''s in their report have commented that the back up of the books of accounts and other books and papers maintained in
electronic mode has not been maintained on servers physically located in India. The Company would like to clarify that the
Company''s SAP is centralized in Global Data Centers outside India where the backup storage is maintained. The Company is
reviewing the maintenance of backup of SAP data in India as required under Rule 3 of the Companies (Account) Rules, 2014.

22. Cost Audit

The Board of Directors, pursuant to provisions of Section 148 of the Companies Act, 2013, appointed M/s. RA & Co., Cost
Accountants, as Cost Auditors of the Company to carry out the audit of the cost accounts relating to organic and inorganic
chemicals of the Company for the Financial year 2016-17, subject to approval of Central Government. The cost audit report for the
Financial year 2014 has been filed on due date.

23. Secretarial Audit Report

Pursuant to provisions of Section 204 of the Companies Act, 2013, and Rule 9 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Board have appointed Mr. Jagdish Ahuja, Practising Company Secretary, as Secretarial
Auditor to carry out the Secretarial Audit for the 15 months ended March 31, 2016.

The Secretarial Audit Report is attached as "Annexure E". The Secretarial Auditor''s Report does not contain any qualification,
reservation or adverse remark and is self - explanatory and thus does not require any further comments.


24. Internal Financial Controls and their Adequacy

The details in respect of Internal Financial Controls and their adequacy are included in the Management Discussion & Analysis
Report, which forms part of this Report.

25. Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in Form MGT-9 is attached as
"Annexure F" to this report.

26. Risk Management

The Company has a robust Risk Management to identify and evaluate business risks and opportunities. This framework seeks to
create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. Many
risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. The
Company has framed a Risk Management Policy to manage the risks involved in all activities of the Company, to maximize
opportunities and minimize adversities.

27. Related Party Transactions

In line with the requirements of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Company has framed a Policy on Material Related Party Transactions which is available on Company''s website at
www.clariant.com.

All the Related Party Transactions entered during the period under review were in ordinary course of business and on arm''s length
basis. All the Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval
are granted by Audit Committee for Related Party Transactions which are of repetitive nature, entered in the ordinary course of
business and are on arm''s length basis.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of Companies Act, 2013 read with Rule 8(2) of
The Companies (Accounts) Rules, 2014 in the Form AOC-2 is attached as "Annexure G" to this report.

28. Particulars of loans, guarantees or investments

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, is given
in notes forming part of financial statements.

29. Public Deposits

During the period under review, the Company has not accepted any deposits from the public falling under Section 73 of the
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount of principal or interest was
outstanding as on the balance sheet date.

30. Vigil Mechanism

The Company believes in upholding professional integrity and ethical behavior in the conduct of its business. To uphold and
promote these standards, the Company has adopted Group''s Integrity Line Policy which is akin to Whistle Blower Policy or Vigil
Mechanism Policy for its Directors and Employees to report genuine concerns about unethical behavior, actual or suspected fraud
or violation of the Code of Conduct without fear of reprisal.

31. Prevention of Sexual Harassment of Women at Workplace

The Company has in placean Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the period under review, no complaints were received
regarding Sexual Harassment.

32. Acknowledgement

The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including
shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere and
hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging
business environment. The Directors also express their appreciation of the assistance and unstinted support received from
Clariant group companies.

For and on behalf of the Board of Directors

Mr. Kewal Handa Dr. Deepak Parikh

Chairman Vice-Chairman & Managing Director

Navi Mumbai, May 20, 2016


Dec 31, 2014

Dear Members,

The Directors are pleased to present the 58th annual report and audited statement of accounts for the year ended December 31, 2014. As per clarification provided by the Ministry of Corporate Affairs vide Circular No. 08/2014 dated 4th April, 2014 the financial statements and the documents required to be attached thereto, the auditor''s and directors'' report in respect of the financial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made there under.

Financial Performance

The financial performance of the Company for the year ended December 31, 2014 is summarized below:

RS. in Lakhs

2014 2013

Sales (Gross- including excise duty) 1,082,48.16 1,290,00.62

Net sales 1,008,20.49 1,213,20.25

Profit before exceptional items & tax 3,82.75 113,53.18

Add : Exceptional items 1,183,58.50 112,24.63

Profit before tax 1,187,41.25 225,77.81

Less: Tax expenses (incl. deferred tax ) 244,09.70 59,00.97

Profit after tax 943,31.55 166,76.84

Add: Balance brought forward from 188,42.04 132,26.44 previous year

Amount available for appropriation 1,131,73.59 299,03.28

Appropriations :

General reserve 9433.16 16,67.68

Interim dividend 103,97.69 26,66.07

Proposed dividend (final) - 53,32.15

Tax on dividend (interim, final proposed 17,67.09 13,95.34 & incl. previous period)

Balance carried forward to balance sheet 91,575.65 188,42.04

Review of operations

2014 was the year of transformation for the Company. The year witnessed major events in the form of sale of leather service business, acquisition of masterbatches business, shifting of registered office and sale of Kolshet site. In spite of revenue loss arising out of sale of textile, paper and emulsion business effective from October 1, 2013 and leather service business effective from May 1, 2014, the Company has been able to grow significantly in continued businesses. Despite negative business sentiments, high inflation and depreciation of Indian currency against major currencies during first half of the year, the Company has been able to minimize the revenue loss. Thanks to the acquisition of masterbatches business which provided support in recouping the revenue loss and improved Company''s market place for this business, sustained drive by marketing, resulted into record sales growth throughout the year. The performance in terms of net profit was affected by higher raw material prices and associated costs of restructuring the business.

The Company registered sales of RS. 1,008.20 crores as compared to RS. 1,213.20 crores, negative growth of 16.9% in sales. Out of the total sales revenue of the Company for the year, 26% is contributed by exports. After considering the impact of sale of Textile, Paper and Emulsion business (TPE business) effective from October 1, 2013, and sale of leather services business effective from May 1, 2014, the growth in sales on like to like basis was a record 43.6% over the previous year. The increased cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 11.4% to 3.8%. Exceptional items for the current year mainly represent profit from sale of leather business (net of transfer of assets and other liabilities) RS. 104.09 crores and profit from sale of Kolshet site RS. 1085.48 crores. Exceptional item for previous year mainly represents sale of TPE business. Considering the exceptional items, the net profit after provision for tax is significantly higher over the previous year. The Company remains focused to improve its core business and look for higher market share in the business segments in which it operates.

Dividend

During the year, your Directors had declared an interim dividend of RS. 39/- per share (390%) for Financial year 2014 and the same was paid in August 2014 as compared to RS.30.00 per share (300%) paid for the previous Financial year. The dividend together with tax thereon for the year entails cash outflow of RS. 121.65 crores (previous year RS. 93.57crores) and pay out of 12.9 % of the net profits for the year. Based on the exceptional income arising from the sale of Kolshet land, the interim dividend of RS. 140/- per share for the Financial year 2015 was declared and paid in January 2015. The interim dividend together with tax thereon for the year entails cash outflow of RS. 447.88 crores and pay out of 41.3 % of the net profits from sale of Kolshet site.

The two interim dividends paid for FY 2014 and FY 2015 together amounts to RS. 179 per share (1790%). The Board of Directors do not recommend final dividend for 2014.

Sale of Leather Service Business

In accordance with the approval of shareholders granted pursuant to provisions of Section 293(1) (a) of the Companies Act, 1956 and as per value of business arrived at by M/s. Ernst & Young LLP, considered and approved by the Board, the Company executed Business Transfer Agreement with Stahl India Pvt. Ltd. and sold its Leather service business as going concern on slump sales basis for a total consideration of RS. 156 crores, on May 1, 2014. The profit arising from the sale of business, net of assets and liabilities transferred to Stahl India Pvt. Ltd. and after considering the provisions for various expenses incurred or to be incurred for transfer the business as going concern, the net profit of RS. 104.09 crores has been included in the exceptional income for the year.

Acquisition of M/s. Plastichemix Industries

In terms of agreement signed between the Company and M/s. Plastichemix Industries, a partnership firm owned by Sheth family, the Company acquired the business of Masterbatches including manufacturing facilities set up at Nandesari, Rania and Kalol in Gujarat as going concern effective from April 10, 2014 for an aggregate consideration of RS. 131 crores, net of adjustment.The acquisition helped the Company in improving its sales and improving market share in the business of Masterbatches.

Sale of Kolshet Site

In accordance with approval granted by the shareholders pursuant to provision of Section 293(1)(a) of the Companies Act, 1956, the Company executed agreement for sale of about 87 acres of land together with the buildings and structures standing thereon situated at Kolshet, Balkum and Dhokali village of Thane with M/s. Ishwar Realty and Technologies Pvt. Ltd. (a subsidiary of Lodha Developers Private Limited). As per terms of the agreement, on receipt of total consideration of RS. 1102.25 crores, the transaction was concluded and the possession of the land was handed over to the buyers as of December 31, 2014.

Relocation to New office

The Company has leased out about 142,000 sq. ft. of office space in Reliable Tech Park, Airoli, Navi Mumbai for a term of 20 years from M/s. Reliable Exports. All offices and laboratories were moved out of Kolshet and relocated to the new premises on July 1, 2014 and October 1, 2014 respectively. A sum of RS. 65 crores was incurred in creating facilities at new office.

Registered Office

In view of change in office location, the registered office of the Company shifted from Sandoz baug, Kolshet Road, Thane to Reliable Tech Park, Airoli, Navi Mumbai effective from July 1, 2014.

Fixed Deposits

The Company did not accept any fixed deposit during the year under review. There were no overdue or unclaimed deposits outstanding as on December 31, 2014.

Corporate Governance, Management Discussion and Analysis

The Company is committed to compliance standards, ensuring checks and balances between the Board and Management, as well as a sustainable approach to create value for all stakeholders. As stipulated under clause 49 of the listing agreement, report on corporate governance, management discussion and analysis as well as auditor''s certificate confirming the compliance with the conditions of corporate governance are attached herewith and forms part of this annual report.

Particulars of Employees

As per provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, Boards'' report shall include a statement providing the particulars of employees who are in receipt of remuneration as prescribed under the Section. However, pursuant to provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to members excluding the statement of particulars of employees. Any member interested in obtaining a copy of this statement, may write to Company Secretary at the registered office of the Company.

Directors

During the year, Mr. R. A. Shah resigned as member of the Board effective from September 30, 2014. The Board considered and appointed Mr. Bharat V. Patel as Director and Chairman of the Company. The Board of Directors wishes to place on record its sincere appreciation for the valuable services rendered by Mr. Shah since formation of Clariant in India as Director and Chairman of the Company. During the year, Mr. Viktor Bernhardt was appointed as Director to fill up the casual vacancy caused by resignation of Mr. Philipp Hammel who resigned as Director effective from February 26, 2014. Mr. Viktor Bernhardt resigned from the Directorship of the Company effective from February 12, 2015, Mr. Mario Brocchi was appointed as Director to fill up the casual vacancy caused by the resignation of Mr. Viktor Bernhardt with effect from February 12, 2015. The Board of Directors places on record its sincere appreciation for the contribution and valuable service rendered by Mr. Philipp Hammel and Mr. Viktor Bernhardt during their tenure.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Mario Brocchi retire by rotation at the forthcoming Annual General Meeting, since the Director in place of whom he is appointed in the casual vacancy, would have retired if he had not vacated the office. Being eligible, he offers himself for re-appointment.

Pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Y. H. Malegam, Dr. (Mrs.) Indu Shahani and Mr. Bharat V. Patel are proposed to be re-appointed as Independent Directors for a period of 4 years from April 1, 2015 and they shall not be liable to retire by rotation. In the opinion of the Board of Directors, these Directors are independent of management and they fulfilled the conditions specified in the Companies Act and the Rules made thereunder. The above appointments and re-appointments form part of the Notice of the 58th Annual General Meeting and the respective Resolutions are recommended for your approval.

As per provisions of Section 198 read with Section 309 of the Companies Act, 1956, the remuneration payable to an individual managing or whole time director shall not exceed individually 5% and collectively 10%. However, the managerial remuneration paid to Vice-Chairman & Managing Director and Executive Director -Finance & Company Secretary of the Company for the Financial year 2014 was approved by shareholders at the Annual General Meeting held on May 6, 2014, pursuant to provisions of Section 198, 269, 309, 310 read with other applicable provisions and schedule XIII of the Companies Act, 1956 and the same was approved as minimum remuneration, ifthe Company has no profits or profits are inadequate. In view of circular no. 46 dated July 14, 2011, approval of the Central Government is not required for payment of managerial remuneration, if the managerial person is not having any interest in the capital of the Company or its holding company, directly or through any other statutory body etc.

Pursuant to provisions of Section 197(1) of Companies Act, 2013, which is applicable effective from April, 1, 2014, total managerial remuneration payable by the Company to its directors, including managing director and whole time directors shall not exceed 11% of the net profits of the Company for the financial year, computed in accordance with provisions of Section 198 of the Act, provided that the Company in general meeting may, with the approval of Central Government, authorise the payment of remuneration exceeding 11 percent of the net profits of the Company. Considering the business projections for 2015, the management feels that as an abundant caution, the Company may seek approval of Central Government for payment of remuneration to Dr. Deepak Parikh, Vice-Chairman and Managing Director and Mr. B. L. Gaggar, Executive Director-Finance & Company Secretary for the Financial year 2015, which may exceed the limits prescribed under Section 197 read with Schedule V of the Companies Act, 2013 and for waiver of remuneration payable / paid in excess, if any.

The Board commends the passing of resolution for payment of remuneration to managing director and executive director.

Profiles of the directors proposed for reappointment, as required under Clause 49 of the Listing Agreement, are given in the Notice of the 58th Annual General Meeting.

Directors'' Responsibility Statement

In terms of Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and have provided proper explanation relating to material departures;

(b) 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 December 31, 2014 and of the profit of the Company for year ended on that date;

(c) they have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities; and

(d) they have prepared the annual accounts on a going concern basis. Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo Information pursuant to 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 hereto and forms part of the report.

Auditors

M/s. Price Waterhouse LLP, Chartered Accountants (Firm Regn. No 012754N/ N500016), retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Cost Audit

The Board of Directors, in pursuance of order under Section 233B (2) of the Companies Act, 1956, appointed M/s. Nalin I. Mehta, Cost Accountants, as cost auditors of the Company to carry out the audit of the cost accounts relating to organic and inorganic chemicals of the Company for the Financial year 2015, subject to approval of Central Government, if any. The cost audit report for the Financial year 2013 has been filed on due date.

Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013, the Board appointed Mr. Jagdish Ahuja, Practising Company Secretary, as Secretarial Auditor to carry out the secretarial audit for the Financial year 2014. Since the provisions relating to the disclosures are not applicable for the year under review, the secretarial audit report is not enclosed to the Boards'' report for the year ended December 31, 2014.

Acknowledgement

The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment.

The Directors also express their appreciation of the assistance and unstinted support received from Clariant group companies.

For and on behalf of the Board of Directors Bharat V. Patel Mumbai, February 12, 2015 Chairman


Dec 31, 2013

The Directors are pleased to present the 57th annual report and audited statement of accounts for the year ended December 31, 2013.

Financial Results

The financial performance of the Company for the year ended December 31, 2013 is summarized below:

Rs. Lakhs

2013 2012

Sales (Gross- including excise duty) 1,290,00.62 1,145,99.32

Net sales 1,213,20.25 1,071,22.57

Profit before exceptional items & tax 113,53.18 133,11.00

Add : Exceptional items 112,24.63 9,20.47

Profit before tax 225,77.81 142,31.47

Less: Tax expenses (incl. deferred tax ) 59,00.97 41,01.43

Profit after tax 166,76.84 101,30.04

Add: Balance brought forward from 132,26.44 126,30.48 previous year

Amount available for appropriation 299,03.28 227,60.52

Appropriations :

General reserve 16,67.68 10,13.00

Interim dividend 26,66.07 26,66.07

Proposed dividend (final) 53,32.15 46,65.63

Tax on dividend (interim, final proposed & incl. previous period) 13,95.34 11,89.38

Balance carried forward to balance sheet 188,42.04 132,26.44

Review of operations

The Company has registered a record performance over previous year, despite challenging macro economic conditions, high inflation, depreciation of Indian currency against major currencies and negative business sentiments prevailing throughout the year and across the industry. Thanks to the sustained drive and team work of the entire organisation, performance remained high on agenda. This resulted into unprecedented record sales growth throughout the year. The performance in terms of net working capital was affected by higher inventory and the profitability impacted by inflation led cost push in most of the operating areas.

The Company registered sales of Rs. 1,213.20 crores as compared to Rs. 1,071.23 crores, growth of 13.3 percent sales. Considering the impact of sale of textile, paper and emulsion business (TPE business) efective from September 30, 2013, growth in sales on like to like basis was a record 25.3 percent over previous year. Out of the total sales revenue of the Company for the year, 23.3 percent is contributed by exports. The increased cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 14.6 percent to 11.4 percent. Exceptional item represents profit from sale of TPE business (net of transfer of assets and other liabilities). Net profit after accounting for exceptional items and tax is significantly higher over the previous year. The Company remains focused to improve its core business and look for higher market share in the business segments in which it operates.

Dividend

During the year, your Directors had declared an interim dividend of Rs. 10/- per share (100%) and the same was paid in August 2013. Based on the performance for the year and the exceptional income arising from the sale of TPE business, the Board of Directors is pleased to recommend a final dividend of Rs. 20/- per share (200%).

The total dividend for the year under review amounts to Rs. 30/- per share (300%) as compared to Rs. 27.5 per share (275%) paid for the previous year. The dividend together with tax thereon for the year entails cash out flow of Rs. 93,57.52 lakhs (previous year Rs. 85,57.12 lakhs) and pay out of 56% of the net profit for the year.

Sale of Businesses

In accordance with the approval of shareholders granted pursuant to provisions of section 293(1)(a) of the Companies Act, 1956, the Company has executed agreement with Archroma India Pvt. Ltd. and sold its TPE business as going concern on slump sales basis for a total consideration of Rs. 209.15 crores, on September 30, 2013. The profit arising from the sale of business, net of assets and liabilities transferred to Archroma India Pvt. Ltd. and after considering the provisions for various expenses incurred or to be incurred to transfer the business as going concern, the net profit of Rs. 114.45 crores has been included in the exceptional income for the year.

Pending receipt of certain licenses and approvals in the name of Archroma, the Company had entered into business continuation agreement with Archroma to run the business in its name for and on behalf of Archroma till the last of the permission and approval is received. On receipt of the last permission, the business continuation agreement was terminated on 31st January, 2014.

Sale of Leather Service Business:

Considering its long-term strategy and overall objective to serve markets with future perspective and strong growth rates, Clariant decided to sell its leather services business and thereby reposition its portfolio. The company intends to sell the leather services business together with the assets and liabilities pertaining to this business as going concern on slump sale basis to M/s. Stahl India Private Limited, an affiliate of Stahl Holdings B.V. Group for a consideration of Rs. 156 crores, subject to adjustment, if any, as of the effective date. The consideration so received by the Company (net of tax) will be used for furtherance of the Company''s business.

The company has production facilities for manufacture of leather dyes and chemicals located at Kanchipuram in Tamilnadu. The sale of business include transfer of all assets including land, buildings, plant and other assets located at Kanchipuram, the laboratories and relevant ofce set-up located at Ranipet, Kolkata and Kanpur, employees related to productions, sales & marketing and service functions engaged for leather service business.

The leather service business contributed about 20.9% of the net sales of the Company for the year. The decision to sell the business as going concern at a value arrived at by M/s. Ernst & Young LLP was considered by the Board and was approved by the Shareholders pursuant to section 293(1)(a) of the Companies Act. The Directors would like to assure that given the present market conditions prevailing for the business under sale, the decision will be in the best interest of the Company and its shareholders.

Sale of Kolshet Land:

With a view to unlock the value of the real estate, the Company decided to sale its land measuring about 87 acres located at Kolshet, Thane. In accordance with approval granted by the shareholders pursuant to provision of section 293(1)(a) of the Companies Act, 1956, the Company is in process to complete the sale of land. The shareholders will be appropriately informed once the agreement is concluded with the interested buyer.

Acquisition of M/s. Plastichemix Industries:

In order to deploy the surplus funds for business opportunities, the Company considered it appropriate to increase its foothold in growing business of masterbatches and thus executed an agreement to acquire business currently run by M/s. Plastichemix Industries, a partnership frm owned by Sheth family. M/s. Plastichemix Industries has set up manufacturing operations at Nandesari, Rania and Kalol in Gujarat. In terms of agreement signed between the Company and M/s. Plastichemix Industries, upon closure of the certain events and on closing of accounts, the Company expects to acquire the business as going concern and on slump sale basis effective from April 1, 2014. M/s. Ernst & Young LLP has carried out the due diligence and also provided valuation report. The consideration agreed to be paid to M/s. Plastichemix Industries amounting to Rs. 135 crores, subject to adjustment if any, is negotiated and arrived at after considering the strategic benefits expected to be realised by the Company from the acquisition.

Relocation to New office:

In order to monetise the value of the Kolshet real estate, the Company decided to relocate its operations hitherto carried out at Kolshet to a new location. The Company has leased out about 142,000 sq. ft. of space for relocating its offices and laboratories currently located at Kolshet to Reliable Tech Park, Airoli, Navi Mumbai. The new location is expected to be ready for occupation effective from June, 2014.

The manufacturing operations for masterbatches has been relocated from Kolshet, Thane to Renaissance Warehouse Park situated at village Vashere, Taluka Bhiwandi, District Thane and the relocated facility has started the production in December 2013.

Registered Office:

In view of shifting of its offices from Kolshet to Airoli, the Company is proposing to relocate its registered office from Sandoz baug, Kolshet Road, Thane to Reliable Tech Park, Airoli, Navi Mumbai.

Fixed Deposits

The Company did not accept any fixed deposit during the year under review. There were no overdue or unclaimed deposits outstanding as on December 31, 2013.

Corporate Governance, Management Discussion and Analysis

The Company is committed to compliance standards, ensuring checks and balances between the Board and Management, as well as a sustainable approach to create value for all stakeholders. As stipulated under clause 49 of the listing agreement, report on corporate governance, management discussion and analysis as well as auditor''s certificate confrming the compliance with the conditions of corporate governance are attached herewith and forms part of this annual report.

Particulars of Employees

As per provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, Board''s report shall include a statement providing the particulars of employees who are in receipt of remuneration as prescribed under the section. However, pursuant to provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to members excluding the statement of particulars of employees. Any member interested in obtaining a copy of this statement, may write to the Company Secretary at the registered ofce of the Company.

Directors

During the year, Mr. Bansi S. Mehta, Diwan Arun Nanda and Dr. H. Schloemer resigned as members of the Board. The Board considered and appointed Mr. Y. H. Malegam, Dr. (Mrs.) Indu R. Shahani and Mr. Karl H. Dierssen to fill up the casual vacancies caused by resignations. The Board of Directors wishes to place on record its appreciation for the valuable services rendered by Mr. Mehta, Diwan Nanda and Dr. Schloemer during their tenure as directors of the Company. The Board considered and appointed Mr. B.L. Gaggar as Executive Director of the Company effective from July 16, 2013. The appointment of Mr. Gaggar and terms thereof is subject to approval of members and are set out in the notice convening annual general meeting.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. A. Muench retires by rotation at the forthcoming Annual General Meeting, and being eligible, ofers himself for re-appointment.

Details of the directors seeking re-appointment as required under clause 49 of the listing agreements with the stock exchanges are provided in the report on Corporate Governance forming part of the annual report.

Directors'' Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956 your directors confirm that- (a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) 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 December 31, 2013 and of the profit of the Company for that year;

(c) they have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities; and

(d) they have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo Information pursuant to 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 hereto and forms part of the report.

Auditors

M/s. Price water house Coopers (PwC) are the statutory auditors of Clariant Group. With a view to have common auditors, it was proposed to consider the appointment of M/s. Price Waterhouse, Indian affiliate of PwC as statutory auditors of the Company. The Board considered the proposal and proposes the appointment of M/s. Price Waterhouse as statutory auditors in place of the retiring auditors, M/s. Deloitte Haskins & Sells, who being eligible, offer themselves for re-appointment.

Cost Audit

The Board of Directors, in pursuance of order under section 233B(2) of the Companies Act, 1956, appointed M/s. Nalin I. Mehta, Cost Accountants, as cost auditors of the Company to carry out the audit of the cost accounts relating to organic and inorganic chemicals of the Company for the financial year 2014, subject to approval of Central Government, if any. The cost audit report for the financial year 2012 has been fled on due date.

Acknowledgement

The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment.

The Directors also express their appreciation of the assistance and unstinted support received from Clariant group companies.

For and on behalf of the Board of Directors,

R. A. Shah

Mumbai, February 26, 2014 Chairman


Dec 31, 2012

The Directors are pleased to present the 56th annual report and audited statement of accounts for the year ended December 31,2012.

Financial Results

The financial performance of the Company for the year ended December 31, 2012 is summarized below:

Rs. Lakhs

2012 2011

Sales (Gross- including excise duty) 1145,99.32 1015,85.85

Net sales 1071,22.57 956,08.12

Profit before exceptional items & tax 133,11.00 154,07.71

Add: Exceptional items 9,20.47 241,33.20

Profit before tax 142,31.47 395,40.91

Less: Tax expenses (incl. deferred tax) 41,01.43 91,37.01

Profit after tax 101,30.04 304,03.90

Add : Balance brought forward from previous year 126,30.48 38,37.85

Amount available for appropriation 227,60.52 342,41.75

Appropriations:

General reserve 10,13.00 30,40.39

Interim dividend 26,66.07 79,98.22

Proposed dividend (final) 46,65.63 79,98.22

Tax on dividend (interim, final proposed & incl. previous period) 11,89.38 25,74.44

Balance carried forward to balance sheet 132,26.44 126,30.48

Review of operations

The business sentiments, confronted with the challenges of market conditions and slowdown in global demand, remained extremely challenging and the recessionary economic conditions led initial slowdown in sales growth. Thanks to the sustained efforts of the marketing team, improved marketing performance of the second half resulted into record sales and growth. The performance in terms of net working capital was affected by built-up of inventory and the profitability is significantly impacted by inflation led cost push in most of the operating areas. Directors are pleased to inform that in spite of challenging conditions, your Company has registered best ever performance in terms of sales growth over previous year.

The Company registered sales ofRs. 1071.23 crores as compared to Rs. 956.08 crores registering a record growth of 12.0 percent sales. Out of the total sales revenue of the Company for the year, 25.3 percent is contributed by exports. The increased cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 17.7 percent to 14.6 percent. Net profit after accounting for exceptional items and tax is lower over the previous year. The Company remains focused to improve its core business and look for higher market share in the business segments in which it operates.

In view of prolonged litigation, the Company could not implement its project for manufacturing of Masterbatches at Ambernath, the site acquired by the Company in 2008 from MIDC.

Dividend

During the year, your Directors had declared an interim dividend of Rs. 10/- per share (100%) and the same was paid in August 2012. Based on the performance for the year and the policy for distribution of profits to the shareholders adopted by the Company, the Board of Directors is pleased to recommend a final dividend ofRs. 17.5/- per share (175%).

The total dividend for the year under review amounts to Rs. 27.5/- per share (275%) as compared to Rs. 60/- per share (600%) paid for the previous year, including special dividend attributable to exceptional income. The dividend together with tax thereon for the year entails cash out flow of Rs. 85,31.08 Lakhs (previous year Rs. 185,91.46 Lakhs) and pay out of 84% of the net profit for the year.

Sale of Businesses

Clariant AG Switzerland, the ultimate Holding Company has announced that USA based SK Capital has agreed to purchase the business units textile chemicals, paper specialties and business line emulsions from Clariant and that this will include the transfer of the whole R&D, applications, sales and marketing organisation along with production plants and sites worldwide.

Clariant Chemicals (India) Ltd. has production facilities for manufacture of textile chemicals and produces paper specialties and emulsion products at its Roha plant. The textile chemicals, paper specialties and emulsion businesses, included in dyes and specialty chemicals segment, together contribute about 35% of the net sales of the Company. The decision to sell the businesses including a manufacturing plant for textile products situated at Roha and other assets dedicated to the businesses under divestment, at a value to be arrived at by the professional valuers, will be considered by the Board and approval of shareholders will be sought at appropriate time in accordance with the requirements of the Companies Act, 1956. The Directors would like to assure its shareholders that given the present market conditions prevailing for the businesses under sale, the decision will be in the best interest of the Company and its shareholders.

Fixed Deposits

The Company did not accept any fixed deposits during the year under review. There were no overdue or unclaimed deposits outstanding as on December 31, 2012.

Management Discussion and Analysis Report

In accordance with Clause 49 of the listing agreements, the Management Discussion & Analysis Report forms a part of this report.

Corporate Governance

The Company has always strived to maintain applicable standards of good corporate governance and the commitment to good corporate governance is embodied in its vision, mission and corporate values. The Company aims to be the leader in specialty chemicals, adopting functional excellence as part of its culture and its corporate values to foster a shared and common set of behaviors amongst all the employees, to help Clariant to realise its goal of sustainable value creation. The report on corporate governance as stipulated under Clause 49 of the listing agreements forms part of this report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report.

Particulars of Employees

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of section 219 (1) (b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all the shareholders, excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of this statement, may write to the Company Secretary at the registered office of the Company.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Diwan A. Nanda and Dr. H. Schloemer will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The Directors recommend their re-appointment.

Details of the Directors seeking re-appointment are provided in the Corporate Governance Report forming part of this report, as required under Clause 49 of the listing agreements with the stock exchanges.

Directors'' Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956 your Directors confirm that -

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) 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 December 31, 2012 and of the profit of the Company for that year;

(c) they have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

Information pursuant to 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 hereto and forms part of the report.

Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Cost Audit

The Board of Directors, in pursuance of an order under section 233B(2) of the Companies Act, 1956, appointed M/s. R. Nanabhoy & Co., Cost Accountants, as cost auditors of the Company to carry out the audit of the cost accounts relating to dyes and pigments of the Company for the financial year 2013.

Acknowledgement

The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment.

The Directors also express their appreciation of the assistance and unstinted support received from Clariant group companies.

For and on behalf of the Board of Directors

R. A. Shah

Mumbai, February 28, 2013 Chairman


Dec 31, 2011

The Directors are pleased to present the 55th annual report and audited statement of accounts for the year ended December 31, 2011.

Financial Results

The financial performance of the Company for the year ended December 31, 2011 is summarized below:

in Lakhs

2011 2010

Sales (Gross-including excise duty) 1015,85.85 1034,75.64

Net sales 956,08.12 974,71.28

Profit before exceptional items

and taxation 154,07.71 172,61.83

Add: Exceptional items 241,33.20 (7,29.47)

Profit before taxation 395,40.91 165,32.36

Less: Provision for taxation

(including deferred tax) (91,37.01) (52,93.64)

Less: Provision for taxation – Prior years — 2.78

Profit after tax 304,03.90 112,41.50

Add: Balance brought forward

from previous year 38,37.85 30,31.67

Amount available for appropriation 342,41.75 142,73.17

Appropriations:

General reserve 30,40.39 11,24.15

Interim dividend 79,98.22 26,66.07

Proposed final dividend 79,98.22 53,32.15

Corporate tax on dividend (interim, final proposed & including previous period) 25,74.44 13,12.95

Balance carried forward to balance sheet 126,30.48 38,37.85

Review of operations

The business environment remained extremely challenging and the recessionary economic conditions leading to slowdown in demand and inflation pushed scale up of input costs left its adverse imprint on overall performance for 2011. Directors are pleased to inform that in spite of difficult times, your Company, based on its intrinsic strength, has broadly maintained its performance. Gross sales from operations remained above threshold mark of Rs. 1000 crores during the year.

The operational performance for the current year is not strictly comparable with that of 2010 due to the fact that performance for previous year included operations of manufacturing facilities located at Balkum, Thane which was closed in December 2010.

In accordance with the memorandum of understanding (MOU) signed between the Company and M/s. Ananta Landmarks Pvt. Ltd. for sale of balance land together with the infrastructure thereon located at Balkum, Thane, the Company handed over the possession and on receipt of the entire sale consideration the transaction was concluded in February 2011. The profit resulting from the sale, Rs. 240.47 crores is reflected in exceptional items in the financial performance of the Company.

The Company registered sales of Rs. 956.08 crores as compared to Rs. 974.71 crores with de-growth of 1.9 percent in sales, which on like to like basis, after considering the loss of sales from discontinuance of Phthalo Green business amount to a marginal growth of 1.9 percent over previous year. The sharp increase in the cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 19.5 percent to 17.7 percent. Net profit after accounting for exceptional items and tax is significantly higher over the previous year. The Company continues to remain focused to sustain its market position in the highly competitive business segments in which it operates. These results were realized by the Company in very difficult business environment which witnessed slow-down of demand both in local and foreign markets. Of the total sales revenue of the Company for the year 23.6 percent is contributed by exports.

The Cyclone "Thane", which hit Tamil Nadu Coast on early hours of Friday, December 30, 2011, caused damage to plant, infrastructure facilities and equipment at our manufacturing site located in Cuddalore and affected operations at site for a few weeks. Thanks to excellent efforts of the staff at Cuddalore, production was restored to normal after carrying out restoration activities with minor loss in productivity.

Dividend

During the year, considering exceptional income from sale of Balkum land, your Directors had declared an interim dividend of Rs. 30/- per share (300%) and the same was paid in August 2011. Based on the performance for the year and the policy for distribution of profits to the shareholders adopted by the Company, the Board of Directors is pleased to recommend a final dividend of Rs. 30/- per share (300%).

The total dividend for the year under review amounts to Rs. 60/- per share (600%) as compared to Rs. 30 per share (300%) paid for the previous year. The dividend together with tax thereon for the year entails cash out flow of Rs. 185,91.46 lakhs (previous year Rs. 93,06.04 lakhs) and pay out of 61% of the net profit for the year.

Fixed Deposits

The Company did not accept any fixed deposits during the year under review. There were no overdue or unclaimed deposits outstanding as on December 31, 2011.

Subsidiary Company

The Company, in accordance with share purchase agreement dated 3rd October, 2011, divested its entire investment in 5,00,000 equity shares of Rs.10 each in Chemtreat Composites India Private Limited to AZ Electronics Materials (Singapore) Pte. Ltd. for a total consideration of Rs. 508.30 lakhs. The gain arising from sale of shares is included in exceptional item in the financial performance of the Company. As a result of this divestment, Chemtreat Composites India Private Limited is no more a subsidiary of your Company. As such, the balance sheet, profit and loss account and the report of Directors and Auditors thereon of Chemtreat Composites India Private Limited is not attached to the annual report.

Consolidated Financial Statements

Upon divestment of holdings, Chemtreat Composites India Private Limited ceased to be subsidiary of the Company with effect from October, 2011. However, in accordance with Accounting Standard AS-21, the consolidated financial statements covered in this annual report by the Company include financial information of Chemtreat Composites India Private Limited, for the period up to September 30, 2011 for which the accounts were prepared and made available for the purpose of consolidation.

Management Discussion and Analysis Report

In accordance with Clause 49 of the listing agreements, the Management Discussion & Analysis Report forms a part of this report.

Corporate Governance

Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreements forms part of this report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report.

Particulars of Employees

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders, excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of this statement, may write to the Company Secretary at the registered office of the Company.

Directors

Mr. Heiner Meier, who held the office initially as Managing Director till December 31, 2009 and later as Director of the Company, resigned with effect from September 1, 2011 and Mr. Philipp Hammel was appointed as Director in his place with effect from October 21, 2011 pursuant to section 262 of the Companies Act, 1956. Notice has been received from a shareholder under section 257 of the Companies Act, 1956 proposing Mr. Hammel as a Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. R. A. Shah retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-appointment. Directors recommend his reappointment.

Details of the Directors seeking re-appointment are provided in the Corporate Governance Report forming part of this report, as required under Clause 49 of the listing agreements with the stock exchanges.

Directors' Responsibility Statement

In terms of section 217(2AA) of the Companies Act, 1956 your Directors confirm that -

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) 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 December 31, 2011 and of the profit of the Company for that year;

(c) they have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

Information pursuant to 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 hereto and forms part of the report.

Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Cost Audit

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956 issued by the Central Government, has appointed Cost Accountants for conducting audit of the cost accounts maintained by the Company in respect of Dyes for the financial year 2012.

Acknowledgement

The Board of Directors would like to acknowledge all its stakeholders and is grateful for the support received from shareholders, bankers, distributors, suppliers and business associates. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained all round performance in a challenging business environment.

Your Directors also express their appreciation of the assistance and unstinted support received from Clariant group companies.

For and on behalf of the Board of Directors

R. A. Shah

Mumbai, February 17, 2012 Chairman


Dec 31, 2010

The directors are pleased to present the 54th annual report and audited statement of accounts for the year ended December 31, 2010.

Financial Results

The financial performance of the Company for the year ended December 31, 2010 is summarized below:

Rs. in Lakhs

2010 2009

Sales (Gross) 103475.64 97322.24

Less : Excise duty (6004.36) (5188.11)

Net sales 97471.28 92134.13

Profit before exceptional items & taxation 17261.83 18761.13

Less : Exceptional items (729.47) (2450.46)

Profit before taxation 16532.36 16310.67

Less : Provision for taxation (incl. deferred tax) (5293.64) (5466.34)

Less : Provision for taxation – Prior years 2.78 (30.77)

Profit after tax 11241.50 10813.56

Add : Balance brought forward from previous year 3031.67 1097.40

Amount available for appropriation 14273.17 11910.96

Appropriations :

General reserve 1124.15 1081.36

Interim dividend 2666.07 2666.07

Proposed final dividend 5332.15 3999.11

Corporate tax on dividend (interim, final proposed & incl. previous period) 1312.95 1132.75

Balance carried forward to balance sheet 3837.85 3031.67

Review of operations

The Directors are pleased to inform that your Company has crossed the record mark of Rs. 1000 crores sales (gross) from operations during the year.

In accordance with a business transfer agreement (BTA) signed in the previous year, the Company sold its diketene and intermediates business located at Balkum, Thane together with movable assets, and technical know-how for a total consideration of Rs. 13.25 crores to M/s. Laxmi Organic Industries Ltd. in January, 2010.

As a result of improved business operations, your Company registered a growth of 5.8 percent in sales, which on like to like basis, after considering the loss of sales from sale of diketene and intermediate business (Rs. 8209.69 lakhs), amount to a record growth of 16.1 percent over previous year.

The increase in the cost of raw materials and other expenses resulted into lowering of PBDIT margin before exceptional items from 22.6 percent to 19.5 percent. Net profit after accounting for exceptional items and after tax is marginally higher over the previous year. The Company has further consolidated its market position in the highly competitive business segments in which it operates. These results were achieved by the Company in the macroeconomic environment which witnessed intensifying competition. Of the total sales revenue of the Company for the year, 21 percent is contributed by exports.

Dividend

During the year, your directors had declared an interim dividend of Rs. 10 per share (100%) and the same was paid in August 2010. Considering the sustained performance for the year and the policy for distribution of profits to the shareholders adopted by the company, the Board of Directors is pleased to recommend a final dividend of Rs. 20 per share (200%).

The total dividend for the year under review amounts to Rs. 30 per share (300%) as compared to Rs. 25 per share (250%) paid for the previous year. The dividend together with tax thereon for the year entails cash out flow of Rs. 9327 lakhs (previous year Rs. 7782 lakhs) and pay out of 83% of the net profit.

Sale of Land at Balkum, Thane

In accordance with the authority granted by the shareholders and as per the memorandum of understanding (MOU) signed between the Company and M/s. Ananta Landmarks Pvt. Ltd. for sale of balance land together with the infrastructure thereon located at Balkum, Thane, the Company has handed over the possession and on receipt of the entire sale consideration of Rs. 240 crores, the transaction has been concluded during February 2011. The profit resulting from the sale will be reflected in the financial results for the Quarter 1, 2011 to be announced by the Company as per listing regulations.

Shifting of Registered Office

The Registered office of your Company has been shifted from Ravindra Annexe, 194, Churchgate Reclamation, Mumbai 400 020 to Kolshet Road, Sandoz Baug, Thane-400 607 effective from May 1, 2010.

Fixed Deposits

The Company did not accept any fixed deposits during the year under review. There were no overdue or unclaimed deposits outstanding as on December 31, 2010.

Subsidiary Company

Chemtreat Composites India Private Limited, the wholly owned subsidiary of your Company, recorded net sales of Rs. 656.59 lakhs as against Rs. 298.51 lakhs in the previous year, registering a good growth in value and volume terms.

In terms of section 212(8) of the Companies Act, 1956, the Central Government has granted its approval, exempting the Company from the requirement of attaching to its annual report, the balance sheet, profit and loss account and the report of directors and auditors thereon of its subsidiary. Accordingly, the same is not attached to the balance sheet of the Company. Shareholders who wish to have a copy of annual accounts of subsidiary company may write to the Company Secretary at the registered office of the Company.

Consolidated Financial Statements

In accordance with the Accounting Standards AS-21, notified by Companies (Accounting Standards) Rule, 2006, the consolidated financial statements covered in this annual report by the Company include financial information of its subsidiary Chemtreat Composites India Private Limited and forms part of this annual report.

Management Discussion and Analysis Report

In accordance with Clause 49 of the listing agreements, the Management Discussion & Analysis Report forms a part of this report.

Corporate Governance

Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under Clause 49 of the listing agreements forms part of this report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report.

Particulars of Employees

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of section 219(1) (b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders, excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of this statement, may write to the Company Secretary at the registered office of the Company.

Directors

Dr. Andreas Walde resigned as Director with effect from March 3, 2010 and Mr. Alfred Muench was appointed as Director with effect from April 24, 2010, to fill up the casual vacancy caused by resignation of Dr. Walde. Notice has been received from a shareholder under section 257 of the Companies Act, 1956 proposing Mr. Muench as a Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Bansi S. Mehta is due to retire at the forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment.

Details of the directors seeking re-appointment are provided in the Corporate Governance Report forming part of this report, as required under Clause 49 of the listing agreements with the stock exchanges.

Directors’ Responsibility Statement

In terms of section 217 (2AA) of the Companies Act, 1956 your directors confirm that -

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) 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 December 31, 2010 and of the profit of the Company for that year;

(c) they have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

Information pursuant to 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 hereto and forms part of the report.

Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing annual general meeting and being eligible, offer themselves for re-appointment. Members are requested to appoint the auditors and fix the remuneration payable to them.

Cost Audit

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956 issued by the Central Government, has appointed Cost Accountants for conducting audit of the cost accounts maintained by the Company in respect of Dyes for the financial year 2010.

Acknowledgement

The Board of Directors would like to acknowledge all its stakeholders and is grateful for the support received from shareholders, bankers, distributors, suppliers and business associates. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained all round performance in a challenging business environment.

Your Directors also express their appreciation of the assistance and unstinted support received from Clariant group companies.

For and on behalf of the Board of Directors,

R.A. Shah Mumbai, February 24, 2011 Chairman


Dec 31, 2009

The directors are pleased to present the Fifty-third annual report and audited statement of accounts for the year ended December 31, 2009.

Financial Results

The fnancial performance of the Company for the year ended December 31, 2009 is summarized below:

Rupees - Lakhs

2009 2008

Sales (Gross) 97322.24 100145.34

Less: Excise duty (5188.11) (8505.87)

Net sales 92134.13 91639.47

Proft before exceptional items & taxation 18761.13 10776.60

Less: Exceptional items (2450.46) (48.00)

Proft before taxation 16310.67 10728.60

Less: Provision for taxation (incl. FBT and deferred tax) (5466.34) (3732.21)

Less: Short provision for taxation - Prior years (30.77) (248.09)

Proft after tax 10813.56 6748.30

Add: Balance brought forward from previous year 1097.40 950.36

Amount available for appropriation 11910.96 7698.66

Appropriations :

General reserve 1081.36 674.83

Interim dividend 2666.07 --

Proposed fnal dividend 3999.11 5065.54

Corporate tax on dividend (interim & fnal proposed) 1132.75 860.89

Balance carried forward to balance sheet 3031.67 1097.40

Review of Operations

The global economic and fnancial crisis that began in 2008 and continued to affect Indian economy till frst half of 2009 had a crippling impact on the global chemical industry. This has affected the Company’s performance during the frst 2 quarters of 2009. However, unexpected recovery in domestic market and excellent performance in terms of cost management has resulted into positive growth in terms of sales and benchmarking performance in net profts of your Company as compared to previous year. The following ratios appropriately refect your Company’s operational performance during the year under review.

2009 2008

Sales growth (%) 0.5 6.4

Domestic sales growth (%) 2.8 7.0

Export sales growth (%) (8.3) 4.0

PBDIT (% to sales) 22.6 14.9

PAT (% to sales) 11.7 7.4

ROCE (%) 30.9 21.0

Debt : Equity ratio 0.01 0.01

Earning per share (Rs.) 40.56 25.31

Cash earning per share (Rs.) 48.19 36.49

Book value per share (Rs.) 130.45 119.14

Dividend

During the year, your directors had declared interim dividend of Rs. 10 per share (100%) and the same was paid in August, 2009. Considering the excellent performance for the year and the policy for distribution of profts to the shareholders adopted by the Company, the Board of Directors is pleased to recommend a fnal dividend of Rs. 15 per share (150%).

The total dividend for the year ended amounts to Rs. 25 per share (250%) as compared to Rs. 19 per share (190%) paid for the previous year. On the paid-up share capital of Rs. 2666 lakhs, the total payout on account of dividend and tax thereon for the year entails cash out fow of Rs. 7798 lakhs (previous year Rs. 5926 lakhs) and pay out of 72% of the net proft.

Divestment of Business

The Company, during the year sold its fexible laminating adhesive business for a total consideration of Rs. 3.6 crores to M/s. Bostik India Pvt. Ltd. The Company had also signed business transfer agreement (BTA) with M/s. Laxmi Organic Industries Ltd. for sale of its diketene and intermediates business located at Balkum, Thane together with movable assets, technical know- how and non-compete undertaking for a total consideration of Rs. 13.25 crores. On receipt of full consideration, the transaction is concluded in January 2010 and the plant is being dismantled and delivered to the buyer.

Registered Offce

The registered offce of the Company presently located at Ravindra Annexe, 194, Churchgate Reclamation, Mumbai-400 020 is under lease and the premises is under major repairs. For better co-ordination and effective communication between sites, offces and laboratories, the Board has decided that subject to approval of shareholders, the registered offce of the Company be relocated at Clariant owned premises at Kolshet Road, Thane-400 607 effective from May 1, 2010. Shareholders are requested to approve the proposal.

Balkum, Thane site

The Board of Directors of your Company has decided that subject to the decision on closure, divestment or sale of its existing business operations carried out at Balkum, Thane site and subject to approval of shareholders, the land/premises and other assets attached thereto, may be sold in the best interest of the Company and the value realised therefrom may be best put to use for growth of the Company’s business.

Shareholders are requested to consider and approve the proposal as set out in notice of the annual general meeting.

Fixed Deposits

The Company has not accepted fxed deposits during the year under review. There were no overdue deposits except unclaimed deposits of Rs. 6000/- as at December 31, 2009 which has been subsequently deposited to Investor Education & Protection Fund of Government in January, 2010. As per requirements of Section 205C of the Companies Act, 1956, the fxed deposits and interest unclaimed after completion of seven years are transferred to the Investor Education and Protection Fund established by the Central Government. There is no amount due and outstanding to be credited to Investor Education and Protection Fund as on December 31, 2009.

Subsidiary Company

The audited accounts of the wholly owned subsidiary, Chemtreat Composites India Private Limited along with Auditors Report thereon, and the statement pursuant to Section 212 of the Companies Act, 1956, is a part of this annual report.

Consolidated Financial Statements

In accordance with the Accounting Standards (AS-21), notifed by the Companies (Accounting Standards) Rules, 2006, the consolidated fnancial statements covered in this annual report by the Company include fnancial information of its subsidiary Chemtreat Composites India Private Limited and forms part of this annual report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report forming part of Directors’ Report for the year under review, as stipulated under Clause 49 of the listing agreement with stock exchanges, forms part of the annual report.

Corporate Governance

The Company is committed to maintain the highest standards of corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreement forms part of the annual report. The requisite certifcate from the auditors of the Company confrming compliance with the conditions of corporate governance as stipulated under the aforesaid clause is attached to this report.

Particulars of Employees

The statement giving particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the annual report excluding the aforesaid statement is being sent to all the members of the company. Any member interested in obtaining a copy of this statement may write to the company secretary at the registered offce of the Company.

Directors

Consequent upon termination of agreement of Mr. Heiner Meier, as Vice-Chairman and Managing Director, the Board at its meeting held on October 29, 2009 considered and appointed Mr. Peter Palm as Vice-Chairman and Managing Director of the Company effective from January 1, 2010. The Board wishes to place on records its sincere appreciation for Mr. Meier’s valuable contribution since integration of Clariant group companies in India and welcomes the appointment of Mr. Palm in his place. Mr. Peter Lindner, who was frst appointed as director of the Company on October 25, 2001 and Mr. Walter Kindler, who was appointed as director on February 20, 2009 to fll up the casual vacancy caused by resignation of Mr. Dominik Strebel resigned from the Board with effect from January 1, 2010.The Board at the meeting held on October 29, 2009 appointed Mr. Heiner Meier as director to fll up the casual vacancy caused by resignation of Mr. Lindner and Mr. Henri Schloemer as additional director with effect from January 1, 2010. The Company has received notice under Section 257 of the Companies Act, 1956 from a shareholder proposing Mr. Henri Schloemer as a director of the Company.

In accordance with the provisions of the Companies Act, 1956 and the articles of association of the Company, Diwan Arun Nanda, the director of the Company is due to retire at the forthcoming annual general meeting, and being eligible, has offered himself for re- appointment.

Details of the directors seeking re-appointment are provided in the Corporate Governance Report forming part of this report, as required under Clause 49 of the listing agreement with the stock exchanges.

Directors’ Responsibility Statement

In terms of Section 217(2AA) of the Companies Act, 1956 your directors confrm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) they have selected such accounting policies and applied them consistently and made judgements 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 December 31, 2009 and of the proft of the Company for that year;

(c) they have taken proper and suffcient care 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 for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

Information 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 hereto and forms part of the report.

Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, retires at the conclusion of the ensuing annual general meeting and being eligible, offer themselves for re-appointment. Members are requested to appoint the auditors and fx the remuneration payable to them.

Cost Audit

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956 issued by the Central Government, has appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai, as cost auditors to audit the cost accounts maintained by the Company in respect of Dyes and Intermediates for bulk drugs for the fnancial year 2009.

Acknowledgement

The Board of Directors place on record its sincere appreciation for the dedicated efforts put in by all employees, their commitment and contribution ensuring sustained operations that your Company has achieved in most diffcult and challenging environment during the year. Your directors would like to record their sincere appreciation for the support and co-operation that your Company received from all the distributors, suppliers and business associates whom your Company regards as partners in progress.

The Board of directors also express their appreciation of the assistance and co-operation extended by the bankers and unstinted support received from Clariant group companies.

Your directors thank the members for their confdence in the Company.

For and on behalf of the Board of Directors

R. A. Shah Mumbai, February 19, 2010 Chairman

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