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Directors Report of Insilco Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present the 28th Annual Report together with the Audited Accounts for the Financial Year ended March 31, 2016.

1. EXTRACTS OF THE ANNUAL RETURN

I. Registration and Other Details

Corporate Identity Number (CIN)

L34102UP1988PLC010141

Name of the Company

Insilco Limited

Registration Date

19th October 1988

Category/Sub category of the Company

Limited by Shares and having share capital

Address of the Registered Office and Contact Details

A-5, UPSIDC Industrial Area, P.O. Bhartiagram, Gajraula, Uttar Pradesh-244 223, India

Contact Details:

Contact No. : 09837923893, 09837823893,

Fax No. : (05924) 252348 Email : Insilco@evonik.com Website : www.insilcoindia.com

Whether Listed Company, if yes, name of the Stock Exchange where listed

Yes, at Bombay Stock Exchange Limited (BSE)

Scrip ID at BSE

500211

Name, Address and Contact details of Registrar and Transfer Agent

M/s. MCS Share Transfer Agent Limited

F-65, 1st Floor, Okhla Industrial Area, Phase - I, New Delhi -110020

Contact Details:

Contact No. : (011) 41406149-52

Fax No. : (011) 41709881

E-mail : helpdeskdelhi@mcsregistrars.com

II. Principal Business Activity of the Company

Business activity contributing 10% or more of the total turnover of the Company.

Name and Description of main

products/services

NIC Code of the Product/

Service

% to total turnover of the Company

Precipitated Silica

20116

100%

III. Particulars of Holding, Subsidiary and Associate Companies

Name of the Company

CIN/GLN

Holding/

Subsidiary/

Associate

% of Shares held

Applicable

Section

Evonik Degussa GmbH

Not

Applicable

Holding

73.11

2(46)

Your Company does not have any Subsidiary or Associate Company.

IV. Share Holding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)

i) Category-wise Share Holding

S.

No.

Category of Shareholder

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

%

Change

during

the

year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

(A)

Promoters

(1)

Foreign

(a)

Bodies

Corporate

0

45,853,315

45,853,315

73.11

0

45,853,315

45,853,315

73.11

0.00

Total Share holding of Promoter (A)

0

45,853,315

45,853,315

73.11

0

45,853,315

45,853,315

73.11

0.00

(B)

Public

shareholding

(1)

Institutions

(a)

Mutual Funds/ UTI

0

14,060

14,060

0.02

0

14,060

14,060

0.02

0.00

(b)

Financial

Institutions/

Banks

330

23,350

23,680

0.04

330

23,350

23,680

0.04

0.00

(c)

Foreign

Institutional

Investors

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total (B)(1)

330

37,410

37,740

0.06

330

37,410

37,740

0.06

0.00

(2)

Non

institutions

(a)

Bodies

Corporate

(i)

Indian

2,548,628

82,880

2,631,508

4.20

2,542,830

82,880

2,625,710

4.19

0.01

(ii)

Overseas

165,080

0

165,080

0.26

165,080

0

165,080

0.26

0.00

(b)

Individuals

(i)Individual shareholders holding nominal share capital up to Rs 1 lakh

7,768,846

2,727,622

10,496,468

16.74

8,608,906

2,673,157

11,282,063

17.99

1.25

(ii)Individual shareholders holding nominal share capital in excess of Rs.

1 lakh

3,428,212

0

3,428,212

5.47

2,697,183

0

2,697,183

4.30

1.17

(c)

Any Other

(i) NRIs

101,407

1,270

102,677

0.16

52,639

1,270

53,909

0.09

0.07

Sub-Total (B)(2)

1,4012,173

2,811,772

16,823,945

26.83

14,066,638

2,757,307

16,823,945

26.83

0.00

Total Public Shareholding (B)= (B)(1) (B)(2)

14,012,503

2,849,182

16,861,685

26.89

14,066,968

2,794,717

16,861,685

26.89

0.00

GRAND TOTAL (A) (B)

14,012,503

48,702,497

62,715,000

100

14,066,968

48,648,032

62,715,000

100

0.00

ii) Shareholding of promoters

Share holders Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in share holding during the year

No. of Shares

% of total shares of the Company

% of Shares Pledged / encumbered to total shares

No. of Shares

% of total shares of the Company

% of Shares Pledged / encumbered to total shares

Evonik Degussa GmbH

45,853,315

73.11

0.00

45,853,315

73.11

0.00

0.00

iii) Change in Promoters’ Shareholding : There was no change in the promoters'' Shareholding during the Financial Year 2015-16.

iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs andADRs): The shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) are attached as Annexure 1.

v) Shareholding of Directors and Key Managerial Personnel: Directors or Key Managerial Personnel did not have any shareholding in the Company during the Financial Year 2015-16.

V. Indebtedness

Your Company did not have any secured loans, unsecured loans or deposits at the beginning of the year and at the end of the year.

VI. Remuneration of Directors and Key Managerial Personnel:

A. Remuneration to Managing Director and Whole-time Director

(Amount in Rs.)

S.

No.

Particulars of Remuneration

Name of Managing Director (MD)/ Whole-time Director (WTD)

Total

Mr. Frank Heinz Lelek (MD)1

Mr. Brijesh Arora (WTD)

1

Gross salary

(a) Salary as per provisions contained

-

3,676,800

3,676,800

in Section 17(1) of the Income-tax

Act, 1961

(b) Value of perquisites u/s 17(2) of

-

103,841

103,841

Income-tax Act, 1961

(c) Profits in lieu of salary under section

-

-

-

17(3) of Income-tax Act, 1961

2

Stock Option

-

-

-

3

Sweat Equity

-

-

-

Commission

4

a. As % of profit

-

-

-

b. Other, specify

-

-

-

5

Other, please specify

-

-

-

Total(A)

-

3,780,641

3,780,641

Ceiling as per the Act2

8,400,000

8,400,000

16,800,000

B. Remuneration to Other Directors

(Amount in Rs.)

Name of Directors

Independent Directors

Non-executive Directors

Particulars of Remuneration

Mr. Dara Phirozeshaw Mehta

Mr. Guido Johannes Christ

Total

Remun

eration

Dr.

Mustafa

Siray

Ms.

Meng

Tang

Total

Remun

eration

Total

1. Independent Directors a. Fee for

410,000

300,000

710,000

-

-

-

710,000

attending Board & Committee Meetings b. Commission

-

-

-

-

-

-

-

1. Mr. Frank Heinz Lelek was appointed as MD w.e.f. 1st March 2015 and he opted not to receive any remuneration.

2. Ceiling has been calculated per annum pursuant to the provisions of Section II, Part II of Schedule V, which does not include contribution to PF, superannuation fund or annuity fund to the extent either singly or put together are not taxable under the Income-tax Act, 1961, Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service and encashment of leave at the end of the tenure.

C. Overall managerial remuneration and ceiling1

(Amount in Rs.)

Total Managerial Remuneration

3,780,641

Overall Ceiling as per the Act

16,800,000

D. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(Amount in Rs.)

S.

No.

Key Managerial Personnel

Total

Particulars of Remuneration

Ms. Shivangi Negi (CFO)

Mr. Sarvesh Kr. Upadhyay2 (Company Secretary)

1

Gross salary

(a) Salary as per provisions

contained in Section 17(1) of the Income-tax Act, 1961

971,760

867,113

1,838,873

(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961

52,500

-

52,500

(c) Profits in lieu of salary under section 17(3) of Income-tax Act,

-

-

-

1961

2

Stock Option

-

-

-

3

Sweat Equity

-

-

-

4

Commission

a. As % of profit

b. Other, specify

-

-

-

5

Other, specify

-

-

-

Total(A)

1,024,260

867,113

1,891,373

VII. Penalties / Punishment / Compounding of Offences: There was no penalty / punishment / compounding fee imposed on the Company / Directors / any other officer of the Company.

2. NUMBER OF MEETINGS OF THE BOARD

The Board duly met 4 times in Financial Year 2015-16 on 21st May 2015, 12th August 2015, 4th November 2015 and 4th February 2016.

3. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors'' state that;

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 at the end of the Financial Year and of the profit and loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) 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

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

3. This does not include sitting fee as prescribed under the Companies Act, 2013.

4. Mr.Sarvesh Kr. Upadhyay was appointed as Company Secretary w.e.f.21st May 2015.

4. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF DIRECTORS ETC.

Pursuant to Section 178(1) of the Companies Act, 2013 and Clause 19 of Securities and Exchange Board of India (Listing Regulations and Disclosure Requirements) Regulations, 2015 (hereinafter in this report referred as “Listing Regulations”) applicable w.e.f. 1st December 2015 (Clause 49 as per previous Listing Agreement with the Stock Exchange), the Board of Directors has constituted a Nomination and Remuneration Committee. A Nomination and Remuneration Policy of the Company has also been laid down and approved by the Nomination and Remuneration Committee and the Board. The said policy lays down the criteria for the appointment of Directors, Key Managerial Personnel and Senior Management Personnel. The said policy also specifies the appointment and remuneration including criteria for determining qualification, term/tenure, positive attributes, independence of Directors, criteria for performance evaluation of Executive and Non-executive Directors (including Independent Directors), removal, policy on Board diversity, Directors and Officers’ Insurance and other matters as prescribed under the provisions of the Companies Act, 2013 and Listing Regulations. The said policy of the Company is attached as Annexure-2 to this report.

5. SECRETARIAL AUDIT

M/s. Nityanand Singh & Co. a firm of Company Secretaries having their address at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi - 110029 has conducted the Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial Audit Report issued by the said firm is attached to this report as Annexure-3.

6. EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE

(i) BY STATUTORY AUDITOR

The members are informed that there was no qualification, reservation, adverse remark or disclaimer made by Statutory Auditor in the Audit Report. Hence no explanations / comments are required to be given by the Board.

(ii) BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT

The members are hereby informed that Secretarial Audit Report was a qualified report. The qualification and comments of the Board on the same are as follows:

Qualification

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, Listing Agreements etc. mentioned above except as following:

Regulation 31(2) of the SEBI (Listing Regulations And Disclosure Requirements) Regulations, 2015, implemented with effect from December 1, 2015, mandates that listed entities should ensure that 100% of shareholding of promoter(s) and promoter group is in dematerialized form and the same is maintained on a continuous basis in the manner specified by SEBI.

Comments by the Board

The promoter of the Company i.e. Evonik Degussa GmbH had applied for change of its name in PAN from Degussa AG to Evonik Degussa GmbH so that Demat account can be opened in the present name. As informed to the Company, the PAN with present name was issued by the Income Tax Department, however, it did not reach to the promoter. This led to delay in opening the Demat account as the original PAN with the present name is one of the mandatory documents for opening a Demat account.

The Board of your Company is taking this very seriously and the promoter is being followed up regularly so that Regulation 31(2) of the SEBI (Listing Regulations And Disclosure Requirements) Regulations, 2015 can be complied with. It will be complied with as soon as the promoter is able to open the Demat account.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year, the Company had not entered into any transaction of loan, guarantee or investment under Section 186 of the Companies Act, 2013.

8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of Contracts or arrangements with related parties are given in form AOC 2 which is attached as Annexure-4 to this report.

Pursuant to the provisions of the Companies Act, 2013 and Clause 23 of the Listing Regulations, the Board has laid down a policy on dealing with related party transactions and the same is available on the website of the Company at the following link: www.insilcoindia.com - Investors - Policies.

9. THE STATE OF THE COMPANY’S AFFAIRS

A. Financial Highlights

The summarized results for the year, rounded off to Rupees in millions, are given below:

Particulars

Year Ended 31.03.2016

Year Ended 31.03.2015

Gross Turnovers

803

632

Other Income

28

46

Total Expenditure (including excise duty)

(799)

(652)

Profit before Depreciation & Exceptional Items

32

26

Depreciation

(13)

(12)

Profit/ (Loss) for the year before exceptional items

19

14

Exceptional items

-

-

Profit/(Loss) before tax

19

14

(Provision for)/Release of Taxation

(4)

-

Profit/doss'') after tax

15

14

B. Results of Operations

Sales of Precipitated Silica during the year were 12,304 MT as against 9,527 MT in the previous year. The Production during the year was 12,028 MT (previous year 10,062 MT).

Your Company achieved a sales turnover of Rs. 803 Million during the year as compared to Rs. 632 Million in the previous year and recorded a profit before depreciation and exceptional items of Rs. 32 Million as against a profit of Rs. 26 Million in the previous Financial Year. The Company had reserves of Rs. 268 Million as on 1st April 2015. During the year, in accordance with the requirements prescribed under Schedule II and other applicable provisions of the Companies Act, 2013, the Company has identified various components of all plant and machinery. Accordingly, the Company has transferred accumulated depreciation of Rs. 1.7 Million to reserves of the Company resulting in reduction in reserves. The profit for the Financial Year 2015-16 was Rs. 15 Million. Therefore the closing balance of the reserves and surplus as on 31st March 2016 amounted to Rs. 281 Million.

Although the global economic situation deteriorated noticeably as the year progressed, all in all we were nevertheless able to defend and improve our market position. The Company is endeavored to increase its turnover and increase its profit. The Company is looking for optimum utilization of its assets and other resources so that journey of profitable growth is continued. With the support of Evonik, we continue to make efforts to optimize energy utilization, manufacture high quality products, improve plant safety, improve efficiency and higher capacity utilization. We are providing quality product, application and technical support and overall service to the Customers.

C. Future Outlook

The Indian economy is improving and showing potential for growth. The Company continues to enjoy a high standing with its customers because of its quality, value added services and strong technical support from parent Company. Besides, it is actively considering the installation of a “Coal Fired Hot Air Unit” at its plant to reduce the energy costs and pursuing all growth opportunities so as to improve the results. The quality conscious customers are showing faith in our quality products. However, the future growth of the Company will depend upon our ability to optimize our costs by making our products more competitive, increasing capacity utilization, efficiency improvement and the willingness of Customers to pay premium for our high quality products. There are inherent opportunities available for the Company in the target industries such as Tyres, Automotive Components, Mechanical Rubber Goods, Footwear, Agrochemicals and Food. The silica applications in all these industries are growing rapidly. The Company is continuously improving safety, plant condition, efficiency and yield. The Company is actively pushing growth opportunities to use the unutilized production capacity and improve product mix. The initiatives of Government such as Make in India are likely to support our Industry, however, it may take time to get visible.

10. TRANSFER TO RESERVES

The Company had reserves of Rs. 268 Million as on 1st April 2015. During the year the Company has transferred accumulated depreciation of Rs. 1.7 Million to reserves of the Company as per requirement of Schedule II of the Companies Act, 2013 resulting in reduction in reserves. The profit for the Financial Year 2015-16 was Rs. 15 Million. Therefore the closing balance of reserves and surplus as on 3151 March 2015 amounted to Rs. 281 Million.

11. DIVIDEND

No dividend is recommended considering the operational performance of the Company.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The details of conservation of energy, technology absorption, foreign exchange earning and outgo during the year are as follows:

A. Conservation of Energy

Your Company always emphasizes on conservation of Energy and Natural Resources. The Company is giving priority to energy conservation measures including regular review of energy generation, consumption and effective control on utilization of energy.

We have reduced product change over time in production process and improved energy efficiency.

Due to plant upgradation system fuel efficiency has improved and overall energy consumption (Power & HSD) has reduced per ton of Silica.

B. Technology Absorption

1. The effort made towards technology absorption

The technology for manufacture of various grades of Precipitated Silica has been supplied by the parent Company, Evonik Degussa GmbH, Germany. We believe that it is important, that in future we can offer an even broader technology support/base to meet our customers’ growing long-term needs. The modification of process, equipment and products are carried out to meet changes in market requirements and to improve operational efficiency.

2. Benefits derived from the above efforts

Focus on value added products, technical support to customers, optimum utilization of resources for production and higher yield.

3. Technology imported during last three years

The Company has not imported any technology during last three years reckoned from the beginning of the Financial Year.

4. Expenditure on Research and Development

The Company has not incurred any expenditure on Research and Development.

C. Foreign Exchange earnings and outgo

The foreign exchange earning in terms of actual inflows during the year and the foreign Exchange outgo during the year in terms of actual outflows were as follows:

(Rs. in ‘000)

Total Foreign Exchange used and earned

Year ended 31st March 2016

Year ended 31st March 2015

a) Total Foreign Exchange earned

5,140

2,207

b) Total Foreign Exchange used

7,556

6,485

14. STATEMENT ON RISK MANAGEMENT POLICY

The Board of Directors has developed and implemented a Risk Management Policy for the Company. A Risk Management Committee was also formed for identification & assessment of risks and minimization of risks by adopting various measures. The Risk Management Committee was dissolved by the Board in their meeting held on 4th February 2016 as the same was not mandatory after implementation of Listing Regulations w.e.f. 1st December 2015. The terms of reference of the said Committee has been transferred to the Board.

The Company has taken proper initiatives to mitigate risks. In the opinion of the Board there are following risk which could threaten the existence of the Company. These risks were also disclosed in the last year''s Annual Report. The Board has taken certain steps to minimize the same and its current status are given below:

1. Risk of HSD (Diesel) prices going up substantially

Current Status of Action Taken :

The Board has approved to switch the source of energy from High Speed Diesel to Coal for drying activity by implementing the Coal Fired Hot Air Unit at Gajraula Plant of the Company. Basic engineering for the same is being done with the help of Evonik Industries AG.

2. Loss of Market Share if our product rates are significantly higher than competitors Current Status of Action Taken:

To minimize the aforesaid risk, the Company has initiated Basic Engineering for implementing the Coal Fired Hot Air Unit at Gajraula Plant of the Company.

The Company is also following a system of tracking of raw material cost to correlate the prices of Company''s purchases.

3. Environmental Risk if stringent norms introduced by government for chemical industry near the Ganga River

Current Status of Action Taken:

Central Pollution Control Board (CPCB) has identified 17 categories of Industries which have highly polluted the river Ganga Basin. We are not a highly polluted industry as per the notified list. The Company has also got the Annual water and air consent from Uttar Pradesh Pollution Control Board (UPPCB) for the Year 2016.

The Risk Management Policy of the Company is available on the website of the Company at the following path: www.insilcoindia.com ^ Investors ^ Policies

15. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Board of Directors of the Company has also laid down a policy on prevention of sexual harassment at workplace. A Complaint Committee has also been formed by the Directors to look into the complaints received, if any. During the year, the Company did not receive any complaint under the said policy. The said policy is available on the website of the Company at the following link: www.insilcoindia.com ^ Investors ^ Policies ''

16. CORPORATE SOCIAL RESPONSIBILITY (CSR) OF THE COMPANY

Pursuant to the provisions of Section 135 of the Companies Act, 2013, CSR policy does not apply to your Company. Accordingly, your Company has not formed CSR Committee.

17. STATEMENT ON ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Board has laid down the manner and criteria of evaluation of Board of its own, Committees and Individual Directors in which annual evaluation of the Board, Committees of the Board and Individual Directors would be evaluated. The evaluation includes various criteria including performance, targets, sincerity towards roles and responsibilities etc.

The Board of Directors has evaluated its Committees, Individual Directors (i.e. Executive and Non-executive Director) and the Board itself. After evaluation, the Board found their performance upto the mark and satisfactory. The Nomination and Remuneration Committee has also evaluated individual performance of each Director and found it satisfactory.

Evaluation criteria for the Individual Directors are also detailed in Annexure-2 attached to this report which is also available on the website of the Company.

18. WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(10) of the Companies Act, 2013 and Clause 22 of the Listing Regulations, the Company has established a “Whistle Blower Policy” for employees to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.

The said mechanism is available to all the employees of the Company and operating effectively. During the year the Company has not received any complaint through such mechanism. The copy of the said policy is available on the website of the Company at the following path:

www.insilcoindia.com ^ Investors ^ Policies

19. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year your Company has not changed the nature of its business.

20. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Change in Directors and KMP

Consequent to the resignation of Ms. Sheetal Saluja as Company Secretary w.e.f. 19th February 2015, Mr. Sarvesh Kumar Upadhyay was appointed as Company Secretary of the Company w.e.f. 21st May 2015. Mr. Sarvesh Kumar Upadhyay is a Commerce Graduate from Delhi University and an associate member of the Institute of Company Secretaries of India. He has also done Bachelor of Law from CCS University, Meerut, Uttar Pradesh, India. He has an experience of more than 9 years in Company Secretarial and legal field.

In the 27th Annual General Meeting held on 12th August 2015, Ms. Meng Tang was appointed as a Director by the Shareholders of the Company as she was holding office as an Additional Director only upto the date of 27th Annual General Meeting. Ms. Meng Tang has done Bachelor of Science in Chemical Engineering from Xi’an Jiaotong University, China and Master of Biochemical Engineering from East China University of Science and Technology, China. She has also done an International MBA - General Management from Rotterdam school of Management at Netherlands. She is having an experience of about 18 years in the field of Research, Development and Marketing. She is presently a Vice President, Head of Business Line Silica, Asia Pacific region at Evonik.

In the 27th Annual General Meeting held on 12th August 2015, Mr. Brijesh Arora was appointed as a Director by the Shareholders of the Company as he was holding office as an Additional Director only up to the date of 27th Annual General Meeting. In the same Annual General Meeting, the Shareholders also approved his appointment as Whole-time Director (designated as Joint Managing Director) for a period of three years starting from 1st March 2015 along with his remuneration. Mr. Brijesh Arora is an MBA and Alumnus of the Indian Institute of Management, Calcutta (IIMC)''s Senior Management Program (SMP). He has also done Chartered Accountancy Course from the Institute of Chartered Accountants of India (ICAI), Master of Financial Analysis (MFA) from Institute of Chartered Financial Analyst (ICFAI) and Company Secretary course from Institute of Company Secretaries of India (ICSI). He has successfully completed Executive Development Program-Advanced (EDP Advanced module) of Evonik. Mr. Brijesh Arora has approximately 24 years of rich experience in different fields of Business Management, Controlling, Finance, Accounts, Legal and Compliances. Mr. Brijesh Arora has been associated with your Company for more than 9 years at different senior positions.

In the 27th Annual General Meeting held on 12th August 2015, the Shareholders of the Company approved the appointment of Mr. Frank Heinz Lelek as Managing Director for a period of three years starting from 1st March 2015. However due to some other assignment in Evonik Industries AG, he has resigned as Managing Director of the Company with effect from closing of working hours of 19th June 2016 and consequently resigned as whole time key managerial personnel. Mr. Lelek continued as Director (non-executive) of the Company till closure of working hours of 4th August 2016 and resigned from that date. The Board records its deep appreciation for the valuable services rendered to the Company by Mr. Lelek during his tenure as its Managing Director and Director respectively.

Dr. Mustafa Siray has resigned as Director of the Company with effect from closing of working hours of 30th June 2016 due to his retirement from the Evonik Group. The Board places on record its deep appreciation for the valuable support and guidance provided by Dr. Siray during his tenure.

To strengthen the Board, the Board has appointed Mr. Christian Schlossnikl as an Additional Director (Non independent Non-Executive) of the Company with effect from 4th August 2016. Mr. Christian Schlossnikl is Master of Business Administration (University of Krems), Postgraduate course of Business Administration and Law (Technical University of Vienna) and has done a course of Plastics Technology (Montanistic University of Leoben). He has approximately 29 years of rich and versatile experience and is currently designated as Senior Vice President Production and Engineering Silica at Evonik Resource Efficiency GmbH. Mr. Christian Schlossnikl is holding office as an Additional Director up to the date of this Annual General Meeting of the Company. It is proposed to appoint Mr. Christian Schlossnikl as a Director liable to retire by rotation in this Annual General Meeting.

To strengthen the Board, the Board has also appointed Ms. Sonia Prashar as an Additional Director (Independent Non-executive Director) of the Company with effect from 4th August 2016. Ms. Sonia Prashar is a Graduate in Science and a Bachelor of Education from Delhi University. She is also a Graduate in the German Language from the Goethe Institute. Ms. Prashar has approximately 20 years of rich experience and has been working in the Indo-German Chamber of Commerce (IGCC) since 1996. She is currently designated as Deputy Director General of IGCC. Before this position, she has served IGCC as Director - Marketing & Trade Fairs. She plays a key role in promoting collaborations and constructive communication between Indian and German Companies to develop effective partnership with each other. Ms. Sonia Prashar is holding office as an Additional Director up to the date of this Annual General Meeting of the Company. It is proposed to appoint Ms. Sonia Prashar as a Director for a non-rotational term up to five consecutive years from the date of her appointment i.e. 4th August 2016 in this Annual General Meeting.

To strengthen the Board, the Board has also appointed Mr. Harishkumar K. Davey as an Additional Director (Non Executive Non-Independent Director) of the Company with effect from 4th August 2016. Mr. Harishkumar K. Davey has approx. 35 years of rich and versatile experience. He has worked as a country manager for Eastman Chemical Company. In 1996, he took on the positions of Managing Director for South Asia as well as Director of Corporate Development and worked in both India and the USA. He has held the position of president of Strategy & Business Development at Reliance Industries Limited since 2010, where he was responsible for evaluating global megatrends and their impact as growth drivers with the aim of generating sustainable, profitable growth. Mr. Harishkumar K. Davey is holding office as an Additional Director up to the date of this Annual General Meeting of the Company. It is proposed to appoint Mr. Christian Schlossnikl as a Director liable to retire by rotation in this Annual General Meeting.

To fill the position of Managing Director and whole time key managerial personnel, Mr. Brijesh Arora has been appointed as Managing Director of the Company with effect from 4th August 2016 subject to approval of Shareholders by way of Special resolution. Before appointment of Mr. Brijesh Arora as Managing Director, he was positioned as Whole-time Director designated as Joint Managing Director of the Company with effect from 1st March 2015. He is Master of Business Administration and Alumnus of the Indian Institute of Management, Calcutta (IIMC)''s Senior Management Program (SMP). He has also done Chartered Accountancy Course from the Institute of Chartered Accountants of India (ICAI), Master of Financial Analysis (MFA) from Institute of Chartered Financial Analyst (ICFAI), Company Secretary course from Institute of Company Secretaries of India (ICSI). He has successfully completed Executive Development Programme-Advanced (EDP Advanced module) of Evonik. Mr. Brijesh Arora is having approx. 24 years of rich experience in different fields of Business Management, Controlling, Finance, Accounts, Legal and Compliances. Mr. Brijesh Arora is associated with the Company for more than 9 years at different senior positions. It is proposed to appoint Mr. Brijesh Arora as Managing Director of the Company in this Annual General Meeting.

Term of Independent Directors

The date of commencement of first term of five consecutive years of the below Independent directors are given below along with date of approval by Shareholders:

S.

No.

Name of Independent Directors

Date of starting first term

Date of approval in AGM

1

Mr. Dara Phirozeshaw Mehta

1st April 2014

14th August 2014

2

Mr. Guido Johannes Christ

29th April 2014

14th August 2014

3

Ms. Sonia Prashar5

4th August 2016

26th September 2016 (proposed)

Directors retiring by rotation

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Brijesh Arora, Whole-time Director (designated as Joint Managing Director) of the Company shall retire by rotation at the ensuing AGM of the Company and being eligible offer himself for re-appointment. The Board recommends his re-appointment to the members of the Company in the ensuing AGM.

Statement on declaration given by Independent Directors

The members are informed that Independent Directors have given a declaration that they meet the criteria of independence as provided in sub-section 6 of the Section 149 of the Companies Act, 2013.

The Board of the Company also confirms that the Independent Directors fulfill the criteria of being Independent Director as specified under the provisions of the Companies Act, 2013.

Familiarization program for Independent Directors

During the Financial Year 2014-15, the Independent Directors were familiarized with the Company by way of a note consisting profile of the Company, nature of Company in which Company operates, business philosophy & model of the Company, Roles, rights, responsibilities of Independent Directors in the Company and Policies/Rules and Regulations of the Company. Thereafter to continue familiarization process of Independent Directors with the Company during the Financial Year 2015-16, a programme was conducted on 4th February 2016. The details of such familiarization programme is also displayed on the website of the Company at the following link:

www.insilcoindia.com ^ Investors ^ Notes

21. DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs

a. Corporate Governance - Disclosures as per provisions of Schedule V, Part II, Section II (B)(IV)

Mr. Brijesh Arora is currently appointed as Whole-time Director (designated as Joint Managing Director) and disclosure in this regard pursuant to above provisions are given in the Corporate Governance Report attached to this report at Clause no. 3.2(D)(a)(ii).

b. Ratio of Remuneration of each Director to median remuneration of employees

Ratio of remuneration of Mr. Brijesh Arora to median remuneration of employees during the Financial Year 2015-16 was 12.70:1.

c. Percentage increase in remuneration of each Director and KMP

There was no Director or KMP whose remuneration was increased during the Financial Year 2015-16.

d. Percentage increase in the median remuneration of employees

The percentage increase in the median remuneration of employees in the Financial Year 2015-16 was 5.60%.

e. No. of permanent employees on the rolls of the Company

As on 31st March 2016, your Company had 116 permanent employees on the rolls of the Company. The same does not include contractual employees and trainees.

f. Relationship between average increase in remuneration and Company Performance

The Company achieved a sales turnover of Rs. 803 Million during the Financial Year 2015-16 as compared to Rs. 632 Million in the previous year and recorded a net profit of Rs. 15 Million approx. as against the net profit of Rs. 14 Million approx. respectively. The average increase in remuneration of employees of the Company was 6.86% during the Financial Year 2015-16.

g. Comparison of remuneration of KMP against the performance of the Company

Considering the performance of the Company, as explained in clause (f) above, the remuneration of KMP including Managing Director and Whole-time Director as explained in clause 1(VI)(A) & (D) are moderate and can be termed as reasonable.

Particulars

As on 31st March 2015 (Rs.) (in Crores)

As on 31st March 2016 (Rs.) (in Crores)

Variation

(Rs.)

(in Crores)

Variation

(%)

Market Capitalization

108.50

103.79

(-) 4.71

(-) 4.34%

i. Price earning ratio as at the closing date of the Financial Year 2014-15 and 2015-16

Particulars

As on 31st March 2015

As on 31st March 2016

Price Earning Ratio (Share price to EPS)

75.22 : 1

68.96 : 1

j. Percentage increase or (over) decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer (PO)

(Amount in Rs.)

Particulars

Price per share

Variation in rate compared with rate of PO

% of such variation

Rate of last PO/per share

10

-

-

Highest rate in the Financial Year 2015-16

31.55

21.55

215.5%

Lowest rate in the Financial Year 2015-16

14.20

4.20

42%

Rate as on 31st March 2016

16.55

6.55

65.5%

k. Average percentage increase already made in the salaries of employee other than the managerial personnel in the Financial Year and its comparison with the percentage increase in the managerial remuneration and justification thereof and exceptional circumstances for increase in the managerial remuneration, if any

Particulars

Financial Year 2015-16

Comments

Average percentage increase in the salaries of employee other than Managerial Personnel

7.26%

-

Average percentage Increase in salary of Managerial Personnel (Mr. Brijesh Arora - Joint Managing Director)

0%

Mr. Brijesh Arora was appointed as Joint Managing Director with effect from 1 st March 2015. There was no increase in salary of Mr. Arora during the Financial Year 2015-16.

l. Comparison of the remuneration of each KMP against the performance of the Company

Considering the performance of the Company, as explained in clause (f) above, the remuneration of each KMP (including Managing Director and Whole-time Director) as explained in clause 1(VI)(A) & (D) is moderate and can be termed as reasonable.

m. Key parameters of variable component of remuneration availed by Director

The key parameters for variable component of remuneration of Mr. Brijesh Arora are Safety, Productivity and Management of fixed costs. The same is being paid on the basis of calendar year.

The provision of performance linked incentive/bonus payable to Mr. Brijesh Arora as on 31st March 2016 was Rs. 546,875/-. The Board approved Rs. 420,000/- as performance linked incentive/bonus to Mr. Brijesh Arora till 31st December 2015 which was paid to Mr. Brijesh Arora in April 2016. Accordingly, provision of Rs. 126,875/- pertaining to performance incentive/bonus of Mr. Brijesh Arora for the Financial Year 2015-16 is still unpaid.

n. Ratio of Remuneration of highest paid employee if it exceeds remuneration of highest paid Director

There was no employee of the Company who had been paid remuneration more than the remuneration paid to Mr. Brijesh Arora, Joint Managing Director of the Company.

o. Policy compliance affirmation

The remuneration to Directors and KMP is as per the nomination and remuneration policy of the Company.

22. STATEMENT PURSUANT TO CLAUSE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

During the year, there was no employee of the Company :

- who was employed throughout the Financial Year 2015-16 and was in receipt of remuneration for that financial year of not less than Rs. 12,000,000/-; or

- who was employed for a part of the Financial Year 2015-16 and was in receipt of remuneration at a rate which was not less than Rs. 850,000/- per month ; or

- who was employed throughout or part of the Financial Year 2015-16 and was in receipt of remuneration in that Financial Year, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-time Director and holds by himself or along with its spouse and dependent children, not less than two percent of the equity shares of the Company.

Top ten employees in terms of remuneration drawn during the Financial Year 2015-16

S. No.

Name (In Alphabetical Order)

Designation

1

Mr. Anurag Srivastava

Senior Manager - Human Resource & Administration

2

Mr. Ashok Kumar Pandey

General Manager - Procurement & Supply Chain

3

Mr. Brijesh Arora

Whole-time Director

4

Mr. Jaipal Singh Rawat

Manager - Procurement & Commercial

5

Dr. Madan Gopal Sinha

Dy. General Manager - Works & Plant Head

6

Mr. Manoj Kumar

Senior Manager - Information Technology

7

Ms. Poonam Jhingan

Executive Assistance

8

Mr. Rajeev Agarwal

Senior Manager - Controlling

9

Mr. Sarvesh Kumar Upadhyay

Company Secretary

10

Ms. Shivangi Negi

Chief Financial Officer

23. AUDITORS

The Statutory Auditor i.e. M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (Firm Registration No. with ICAI -301003E) was appointed in the 26th AGM of the Company for their first term of 2 years to hold the office from the conclusion of 26th AGM till the conclusion of 28th AGM of the Company. Consequently, the first term of 2 years of Statutory Auditor is coming to an end at the conclusion of 28th AGM.

Being eligible for the 2nd term of 5 years, M/s. S.R. Batliboi & Co. LLP, Chartered Accountant has expressed its willingness to act as Statutory Auditor of the Company and has provided the requisite documents as required under the Companies Act, 2013 and Listing Regulations. In view of the same, it is proposed to appoint M/s. S.R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditor of the Company for their 2nd terms of 5 years.

24. COST AUDITOR/MAINTENANCE OF COST RECORDS

Maintenance of Cost Records for the Financial Year 2015-16

Pursuant to the provisions of the Companies (Cost Records and Audit) Rules, 2014 dated 30th June 2014 as amended vide notification dated 31st December 2014, in the Financial Year 2014-15 the Company is required to maintain cost records. The Board has appointed M/s. Ajay Ahuja & Associates (Registration No. 101142) for maintenance of Cost Records of the products of the Company for the Financial Year ended 3181 March 2016.

Cost Audit for Financial Year 2014-15

For the Financial Year 2014-15, in absence of clear provisions for applicability of Cost Audit or maintenance of Cost Records, M/s. Ajay Ahuja & Associates (Registration No. 101142) was appointed as Cost Auditor by the Board whose remuneration was approved by Shareholders of the Company in 26th Annual General Meeting.

The details of Cost Auditor and filing information of Cost Audit Report is given below:

- Name of Cost Auditor : M/s. Ajay Ahuja & Associates (Registration No. 101142)

- Contact Address : 7/156, Ramesh Nagar, New Delhi-110015

- E-mail : cmaajayahuja@gmail.com, ajayahujaassociates@gmail.com

- Mobile : 91 9810326644

- Due date of filing

Cost Audit Report : 30th September, 2015

- Actual date of Filing

Cost Audit Report : 15th November, 2015

- Reasons for late filing

: The assignment for filing Cost Audit Report was given to our Cost Auditor. The applicable form for filing of Cost Audit Report was made available only few days before the last date and Cost Auditor could not find the same in line with XBRL Software. Hence it was giving validation errors while creating XBRL document. This led to delay in filing. The additional fee paid to Ministry of Corporate Affairs due to delayed filing was also borne by the Cost Auditor.

25. PRACTISING COMPANY SECRETARY

M/s. Nityanand Singh & Co., Company Secretaries having their office at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi-110029 are the present practicing Company Secretary of the Company.

26. AUDIT COMMITTEE

Pursuant to the provisions of Section 177 of the Companies Act, 2013 and the Listing Regulations, the Board has constituted an Audit Committee. The composition of the Audit Committee was as follows:

As on 31st March 2016

S. No.

Name of the Director

Designation in Audit Committee

1

Mr. Dara Phirozeshaw Mehta

Chairman

2

Mr. Guido Johannes Christ

Member

3

Mr. Frank Heinz Lelek

Member

All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.

27. DISCLOSURE REGARDING SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company does not have any subsidiary, joint venture or associate company. During the year also there were no companies which have become or ceased to be your Company''s subsidiary, joint venture or associate company during the year.

28. DEPOSITS

The Company has not accepted any deposits during the year pursuant to the provisions of Chapter V of the Companies Act, 2013.

29. MATERIAL ORDERS BY GOVERNING AUTHORITIES

There were no significant or material orders passed by any governing authority of the Company including regulators, courts or tribunals which could impact the going concern status and the Company''s operations in future.

30. ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH RESPECT TO THE FINANCIAL STATEMENT

The Company has laid down proper and adequate internal financial control with respect to internal financial statement.

31. OPERATIONS AT PLANT

The Plant operations had to be shut down a few times during the year due to lower sales orders.

32. VALUE CREATION FOR CUSTOMERS

In our diverse and globalized world, it is becoming more and more important to gain a better understanding of the requirements of our customers and end-customers. Changing our perspective to view the world through the eyes of our customers allows us to see things differently and thus develop exceptional solutions. Our willingness to remain open to new things and to think in a flexible manner is the key to our culture of learning and innovation. This culture helps us identify good ideas at an early stage of their development and then quickly bring them to market in order to create added value to our customers and Evonik. As a Company, we are committed to provide our internal and external customers products and services that always unequivocally meet the agreed quality standards. This is our declared goal and the measure of our actions.

We offer a complete package solution of product plus service. This is one of the reasons that many of our customers prefer to buy from us.

33. SOCIAL RESPONSIBILITY

Good governance demands adherence to social responsibility coupled with creation of value in the larger interest of the general public. We are committed to continuously improving our performance in the areas of environmental protection, health and safety as well as to the principles of sustainable development and responsible care. We continue to contribute to society by appropriate means. We aim to enhance the quality of life of the community in general and have a strong sense of social responsibility.

34. WE BELIEVE IN QUALITY AS A SUCCESS FACTOR

Within the scope of Total Quality Management (TQM), we are continuously striving to improve the quality of our products, services and processes.

Learning from the global best practices of our parent Evonik Industries, we offer the same to our customers. This is the most important factor that our customers value and continue to support us.

35. PROCUREMENT EFFICIENCY AND SUPPLY CHAIN

Procurement is an essential element in the value-chain. We regard intensive cross-functional collaboration within the Company as indispensable. During the year, we integrated procurement with the overall supply-chain function at the plant to make it more efficient and part of a cross-functional team at the plant.

36. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS

The key to any success is a motivated and committed workforce. With support from Evonik and Management of Insilco, we have been conducting in-house skill development and training programmes. We also encourage our workforce to build a more customer - oriented approach.

37. CERTIFICATIONS AND RECOGNITIONS

Our plant at Gajraula is certified under the Environment Management Standard ISO 14001-2004 and Quality Management Standard ISO 9001-2008. During the year, recertification audit of the Environment Management Standard ISO 14001-2004 and Quality Management Standard ISO 9001-2008 was successfully completed. We have obtained HALAL & KOSHER certificates during the year for Food Safety Management System. Apart from these we are also HACCP and FSSAI certified Company for the Food Safety Management System.

38. REPORT ON CORPORATE GOVERNANCE

Pursuant to the provisions of the Listing Regulations (Erstwhile Clause 49 of the Listing Agreement) the following are furnished forming part of this Directors’ Report:

i. Report on Corporate Governance together with a Certificate from Practising Company Secretary on compliance of conditions of Corporate Governance as per provisions of Listing Regulations are attached as Annexure - 5 and 5.3 respectively.

ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per provisions of Listing Regulations is attached as Annexure - 5.1.

iii. Certificate from Managing Director and Chief Financial Officer regarding correctness of the financial statements presented to the Board is attached as Annexure - 5.2.

39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to provisions of the Listing Regulations, a Management Discussions and Analysis Report is enclosed as Annexure - 6 forming part of Annual Report.

40. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT: None

41. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute.

42. FORWARD-LOOKING STATEMENT

This Report including its annexures contains forward-looking statements that involve risks and uncertainties. The actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Significant factors that could make a difference to the Company’s operations include domestic and international economic conditions affecting demand-supply and price conditions, changes in government regulations, environmental regulations, tax regimes and other statutes.

43. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Government of Uttar Pradesh, other local authorities, Bankers, Suppliers, Customers, Distributors, Employees and other Stakeholders which have been a constant source of strength to the Company. The Board of Directors also expresses its sincere gratitude to all the shareholders for their continuous support and trust they have shown in the management. The dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for continuously providing excellent management, technical and marketing support.

For & on behalf of the Board of

Insilco Limited

Sd/- Sd/-

Brijesh Arora Guido Johannes Christ

Managing Director Director

DIN : 00952523 DIN : 03268438

Place : Noida

Date : 4th August 2016


Mar 31, 2013

Dear Members,

The Directors are pleased to present the 25th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2013.

1. FINANCIAL HIGHLIGHTS

The summarized results for the year, rounded off to Rupees in millions, are given below:

PARTICULARS Year Ended Year Ended 31-March-2013 31-March-2012

Gross Turnover 847 807

Other Income 57 29

Total Expenditure (including excise duty) (846) (763)

Profit before Depreciation & Exceptional Items 58 73

Depreciation (36) (28)

Profit/(Loss) for the year before exceptional items 22 45

Exceptional item (26) 7

Profi/(Loss) before tax (4) 52

(Provision for)/Release of Taxation (5) (5)

Profit/(Loss) after tax (9) 47

2. RESULTS OF OPERATIONS

The production and sales of precipitated silica during the year 2012 -13 was 14,259 MTs and 15,103 MTs as against 16,299 MTs and 15,365 MTs respectively in the previous year.

Your Company achieved a sales turnover of Rs. 847 Million during the year as compared to Rs. 807 Million in the previous year and recorded a profit before depreciation & exceptional items of Rs. 58 Million as against Rs. 73 Million in the previous financial year. No transfer has been made to reserves for the year.

During the year, there has been significant increase in cost of production because of increase in rates of power supplied by UP Electricity Board and increase in diesel prices due to its decontrol. Further, the production was constrained during the last quarter of Financial Year 2012-13 due to limitation on water discharge enforced by the local administration. These factors are the major contributors of operational losses during the year.

The Company continues to strive for growth, higher realizations, energy optimization, better working capital management and better asset utilization.

3. FUTURE OUTLOOK

The Indian economy is expected to grow in the short to medium term and there are inherent opportunities available for the Company in our target industries such as Tyres, Automotive Components, Mechanical rubber goods, , Footwear, Agrochemicals, Food and Toothpaste. The Company enjoys a high standing with its customers and is actively pursuing all growth opportunities so as to improve its results.

4. DIVIDEND

In view of the inadequacy of profits, no Dividend is recommended.

5. TRANSFER OF FUND TO INVESTOR EDUCATION & PROTECTION FUND

There was no amount due for transfer to the Investor Education and Protection Fund during the year under review, pursuant to the provisions of Section 205C of the Companies Act 1956.

6. VALUE CREATION FOR CUSTOMERS

We provide our internal and external customers products and services that always and unequivocally meet the agreed quality criteria. This is our declared goal and the measure of our actions. That is because only if the quality of our work lives up to the ever evolving requirements of our customers we will continue to be successful in the future. The combination of our products and services enables us to offer package solutions that deliver real added value and make us the preferred business partner to our customers.

7. SOCIAL RESPONSIBILITY

Responsible conduct and business success are not mutually exclusive in our view. In fact, they are interlinked. Sustainable development and Corporate Responsibility are vital for the future viability of companies including us. We accept responsibility for our business, our employees and society. That is how we define Corporate Responsibility (CR). As part of our corporate strategy, our CR strategy takes up economic megatrends such as resource efficiency, ecological and social challenges, and supports the development of new business activities.

8. WE BELIEVE IN QUALITY AS A SUCCESS FACTOR

Within the scope of Total Quality Management (TQM), we continuously improve the quality of our products, our services and our processes to enhance our high standard of quality. This constant optimization in partnership with our customers and suppliers is the driver towards market leadership and outstanding results in our core business.

We actively respond to the expectations of our internal and external stakeholders on how we should contribute to the sustainable development of society and come up with answers to future challenges in close collaboration with our business units.

Contemporaneously this enables us to fulfill the requirements as well as responsibilities to our employees just as well to society, environment and stakeholders, to develop in partnership too.

9. PROCUREMENT EFFICIENCY AND SUPPLY CHAIN

Procurement is an essential element in the value-added chain, so we regard intensive cross-functional collaboration within the company as indispensable. During the year, we implemented Evonik''s global strategies and centralized the procurement function in the Plant to ensure optimized procurement.

10. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS

The key to achieve our goals is a motivated and skills workforce, a customer - oriented approach in our thoughts and actions and a working relationship with our customers that is built on mutual trust.

11. CERTIFICATIONS AND RECOGNITIONS

The Commitment to quality is a process of continual improvement. The Company is holding ISO 9001: 2008 and ISO 14001: 2004 and HACCP Certifications. Our quality management system has successfully maintained ISO 9001: 2008 and ISO 14001: 2004 certifications through regularly scheduled annual audits and HACCP Certification through regularly scheduled bi-annual audits.

12. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereunder.

13. DIRECTORS

During the year, the following Directors have resigned from the Company:

(i) Dr. Gurnad Singh Sodhi on 1st February, 2013

(ii) Mr. Lear Bao on 1st February, 2013

(iii) Mr. Andreas Bernd Fischer on 16th February, 2013.

The Board places on record its deep appreciation for their invaluable support and guidance during their association as Directors of the Company.

Your Directors have appointed Mr. Roberto Martin Vila Keller as a Director of the Company with effect from 16th February, 2013 to fill up the casual vacancy caused by the resignation of Mr. Andreas Bernd Fischer. Mr. Roberto Martin Vila Keller will hold office till the date Mr. Andreas Bernd Fischer would have held office as Director of the Company. Mr. Roberto Martin Vila Keller has done apprenticeship as an Industrial Business Assistant in 1987, followed by the successful completion of training program. Mr. Vila Keller also holds a degree in Business Administration. He has extensive experience in the field of Production, Sales and Marketing.

Further, in accordance with provisions of Companies Act, 1956 and Articles of Association of the Company, Mr. Keki Manchersha Elavia and Dr. Mustafa Siray, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment. The Board recommends their re-appointment.

14. AUDITORS

M/s S. R. Batliboi & Associates, the present Statutory Auditors of the Company vide their letter dated 5th April, 2013 intimated the conversion of their partnership firm into an Limited Liability Partnership (LLP) with effect from 1st April, 2013. They have confirmed that there is no change in their Registration Number and have also assured us that this change would not in any way affect their relationship and responsibilities as statutory auditors.

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, (Firm Registration No. with ICAI - 101049W), member firm of Ernst & Young Global Ltd., present Statutory Auditors of the Company will retire at the ensuing Annual General Meeting.

The said Auditors have expressed their willingness for re-appointment as Statutory Auditors of the Company and have further confirmed that the said re-appointment would be in conformity with provisions of Section 224(1B) of the Companies Act, 1956.

The observations in the Auditors'' Report read with the Notes to Accounts are self-explanatory and do not require any comments.

15. COST AUDITORS

In terms of requirement of The Companies (Cost Accounting Records) Rules, 2011, your company is maintaining all the prescribed cost records. Further the Company has appointed M/s Aseem Jain & Associates, as Cost Accountant of the Company under these Rules. The prescribed compliance report for the financial year ended 31st March, 2013, duly certified by M/s Aseem Jain & Associates, Cost Accountant of the company, along with the prescribed annexure thereon will be filed with the Central Government within the prescribed time.

16. PRACTICING COMPANY SECRETARY

M/s Nityanand Singh & Co., Company Secretaries having their office at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave,New Delhi-110029 are the present practicing Company Secretary of the Company.

17. SHIFTING OF CORPORATE OFFICE OF THE COMPANY

The Corporate office of the Company will be shifted to "The Corenthum", Office No. 2312, 3rd Floor, 2nd Lobe, Tower A, A-41, Sector 62, Noida-201309, Uttar Pradesh w.e.f. 14th May, 2013.

18. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:

a) That in preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) That we 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 at the end of the financial year ended 31st March 2013 and of the Profit of the Company for that period;

c) That we 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) That we have prepared the Annual Accounts on a going-concern basis.

19. PARTICULARS OF EMPLOYEES

During the year under review, there is no employee whose particulars are required to be disclosed in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

20. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''A'' to the Directors'' Report.

21. CORPORATE GOVERNANCE

Pursuant to Provisions contained in the Clause 49 of the Listing Agreement with the Stock Exchanges, the following are furnished as Annexure- ''B'' forming part of this Directors Report:

i. Report on Corporate Governance together with an Auditors Certificate on compliance of conditions of Corporate Governance as per clause 49 (VII) of the listing agreement.

ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per clause 49 (I) (D)(ii) of the listing agreement.

iii. Certificate from Managing Director/Chief Financial Officer regarding the financial statements presented to the Board as per Clause 49 (V) of the Listing Agreement.

22. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report (Annexure ''C'') forming part of the Corporate Governance forms part of Annual Report.

23. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT

None

24. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute.

25. FORWARD-LOOKING STATEMENT

This Report including its annexure contains forward-looking statements that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Significant factors that could make a difference to the Company''s operations include domestic and international economic conditions affecting demand-supply and price conditions, changes in government regulations, environmental regulations, tax regimes and other statutes.

26. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Government of Uttar Pradesh, other local authorities, Bankers, Suppliers, Customers, Dealers, Employees and other Stakeholders which have been a constant source of strength to the Company.

The Board of Directors also expresses its sincere gratitude to all the shareholders for their continuous support and trust they have shown in the management. The dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for providing management, technical and marketing support. For & on behalf of the Board

Dara P. Mehta Pankaj Khandelwal

Place: New Delhi Chairman Managing Director

Date : 29th April, 2013


Mar 31, 2012

The Directors are pleased to present the 24th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2012.

1. FINANCIAL HIGHLIGHTS

The summarized results for the year, rounded off to Rupees in millions, are given below:

PARTICULARS Year Ended Year Ended 31-March-2012 31-March-2011

Gross Turnover 770 710

Other Income 29 38

Total Expenditure (including excise duty) (726) (660)

Profit before Depreciation & Exceptional Items 73 88

Depreciation (28) (32)

Profit/(Loss) for the year before exceptional items 45 56

Profit/(Loss) on sale/ (provision) for impairment of Fixed Assets 7 (2)

Profit/(Loss) before tax 52 54

(Provision for)/Release of Taxation (5) (7)

Profit/(Loss) after tax 47 47

2. RESULTS OF OPERATIONS

The precipitated silica production and sales during the year is 16,299 MTs and 15,365 MTs as against 15,236 MTs and 15,213 MTs respectively in the previous year.

Your Company achieved a sales turnover of Rs. 770 Million during the year as compared to Rs. 710 Million during the previous year and recorded profit before depreciation & exceptional items of Rs. 73 Million as against Rs. 88 Million in the financial year 2010-11. There has not been made any transfer to reserves during the year.

The Company continues to strive for growth, higher realisations, energy optimization, better working capital management and better asset utilization. Our marketing policy is to provide products and services that always and unequivocally meet the agreed quality criteria.

3. PERFORMANCE HIGHLIGHTS

Your Directors are pleased to inform that during the year, your company had successfully completed its expansion of production capacity by 6,000 MTs per annum. The expanded capacity will yield higher volumes leading to higher profitability and growth in coming years.

4. FUTURE OUTLOOK

The Indian economy is experiencing strong growth. There are inherent opportunities available for the Company in a significant number of industries such as Tyres, Automotive Components, Toothpaste, Footwear, Agrochemicals and Food, all having silica applications which are growing rapidly.

The Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. The Company is evaluating plans to have optimum utilization of the production capacity and to improve its product mix.

5. DIVIDEND

No Dividend is recommended considering the funds needed for augmentation and to improve Company's financial strength.

6. TRANSFER OF FUND TO INVESTOR EDUCATION & PROTECTION FUND

There was no amount due for transfer to the investor education and protection fund during the year under review, pursuant to the provisions of Section 205C of the Companies Act, 1956.

7. VALUE CREATION FOR CUSTOMERS

We provide our internal and external customers products and services that always and unequivocally meet the agreed quality criteria. This is our declared goal and the measure of our actions. That is because only if the quality of our work lives up to the ever evolving requirements of our customers, we will continue to be successful in the future. The combination of our products and services enables us to offer package solutions that deliver real added value and make us the preferred business partner to our customers.

8. SOCIAL RESPONSIBILITY

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. We are committed to continuously improving our performance in the areas of environmental protection, health and safety as well as to the principles sustainable development and responsible care. Our code of conduct as well as our guidelines is exceeding the regulatory requirements. We continue to contribute towards society by some worthwhile causes. We aim to enhance the quality of life of the community in general and have a strong sense of social responsibility. The Company also extends support for promoting sports and socio-cultural activities for welfare of employees and their families.

9. WE BELIEVE IN QUALITY AS A SUCCESS FACTOR

Within the scope of Total Quality Management (TQM) we continuously improve the quality of our products, our services and our processes to enhance our high standard of quality. This constant optimization in partnership with our customers and suppliers is the driver towards market leadership and outstanding results in our core business.

Contemporaneously this enables us to fulfill the requirements as well as responsibilities to our employees just as well to society, environment and stakeholders, to develop in partnership too.

10. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS

The key to achieving our goals is a motivated and skills workforce, a customer - oriented approach in our thoughts and actions, and a working relationship with our customers that is built on mutual trust.

11. CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The Central Government promulgated in December 2009, a set of Corporate Governance Voluntary Guidelines. The mandatory requirements under Clause 49 of the Listing Agreement with the Bombay Stock Exchange cover most of the elements of these Corporate Governance Voluntary Guidelines 2009 accordingly your company has not adopted these voluntary guidelines.

12. CERTIFICATIONS AND RECOGNITIONS

The Commitment to quality is a process of continual improvement. The Company is holding ISO 9001: 2008 and ISO 14001: 2004 and HACCP Certifications. Our quality management system has successfully maintained ISO 9001: 2008 and ISO 14001: 2004 certifications through regularly scheduled annual audits and HACCP Certification through regularly scheduled bi-annual audits.

13. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereunder.

14. DIRECTORS

During the year, Mr. Hans Wolfgang Wilhelm Kirches, resigned as Director of the Company with effect from 14th October, 2011. The Board places on record its deep appreciation for the invaluable support and guidance received from Mr. Kirches during his association as Director of the Company.

Your Directors appointed Mr. Lear Bao as a Director of the Company with effect from 1st November, 2011 to fill up the casual vacancy caused by the resignation of Mr. Hans Wolfgang Wilhelm Kirches. Mr. Lear Bao will hold office till the date Mr. Hans Wolfgang Wilhelm Kirches would have held office i.e. the date of the ensuing Annual General Meeting of the Company. The Company has received a notice along with a deposit of Rs. 500/- from a shareholder under Section 257 of the Companies Act, 1956 signifying his intention to propose the candidature of Mr. Lear Bao for the office of Director. The Board recommends his appointment at the ensuing Annual General Meeting.

Mr. Matthias Hau, resigned as Managing Director and Directorship from Board and all Committees thereof with effect from 1st March, 2012. The Board places on record its deep appreciation of valuable services and contribution in the growth of the Company given by Mr. Matthias Hau during his tenure as the Managing Director of the Company.

Mr. Pankaj Khandelwal was appointed by the Board of Directors of the Company as Additional Director and Managing Director with effect from 1st March, 2012. In terms of Section 260 of the Companies Act, 1956, Mr. Pankaj Khandelwal will hold office as Additional Director upto the date of ensuing Annual General Meeting. In terms of the provisions of Section 198, 269 & 309 read with Schedule XIII of the Companies Act 1956 approval of shareholders is required for the appointment of Mr. Pankaj Khandelwal as Managing Director of the Company.

The Company has received a notice along with a deposit of Rs. 500/- from a shareholder under Section 257 of the Companies Act, 1956 signifying his intention to propose the candidature of Mr. Pankaj Khandelwal for the office of Director. The Board recommends his appointment as Director and Managing Director at the ensuing Annual General Meeting.

Mr. Frank Heinz Lelek appointed by the Board of Directors of the Company as Additional Director with effect from 3rd May, 2012. In terms of Section 260 of the Companies Act, 1956, Mr. Frank Heinz Lelek will hold office as Additional Director upto the date of ensuing Annual General Meeting. The Company has received a notice along with a deposit of Rs. 500/- from a shareholder under Section 257 of the Companies Act, 1956, signifying his intention to propose the candidature of Mr. Frank Heinz Lelek for the office of Director. The Board recommends his appointment as Director at the ensuing Annual General Meeting.

In accordance with provisions of Companies Act, 1956 and Articles of Association, Dr. Gurnad Singh Sodhi and Mr. Andreas Bernd Fischer, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment. The Board recommends their re-appointment.

15. AUDITORS

M/s. S.R. Batliboi & Associates, Chartered Accountants, (Firm Registration No. with ICAI - 101049W), member firm of Ernst & Young Global Ltd., present Statutory Auditors of the Company holds office until the date of the ensuing Annual General Meeting. It is proposed to re-appoint them as statutory auditors of the Company until the conclusion of next Annual General Meeting. M/s. S.R. Batliboi & Associates, Chartered Accountants, (Firm Registration No. with ICAI - 101049W) have expressed their willingness for re-appointment as Statutory Auditors of the Company and have further confirmed that the said re-appointment would be in conformity with provisions of Section 224(1 B) of the Companies Act, 1956.

The observations in the Auditors' Report read with the Notes to Financial Statements are self-explanatory and do not require any comments.

16. COST AUDITORS

In terms of requirement of The Companies (Cost Accounting Records) Rules, 2011 as notified by the Ministry of Corporate Affairs vide its notification dated 3rd June, 2011, your company is maintaining all the prescribed cost records. Further the Company has appointed M/s Aseem Jain & Associates, as Cost Accountant of the Company under these Rules. The prescribed compliance report for the financial year ended 31st March, 2012, duly certified by M/s Aseem Jain & Associates, Cost Accountant of the Company, along with the prescribed annexure thereon will be filed with the Central Government within the prescribed time.

17. CHANGE IN ACCOUNTING POLICY

During the year, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

18. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:

a) That in preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) That we 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 at the end of the financial year ended 31st March, 2012 and of the Profit of the Company for that period;

c) That we 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) That we have prepared the Annual Accounts on a going-concern basis.

19. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, is given in Annexure 'A' to the Directors' Report.

20. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure 'B' to the Directors' Report.

21. CORPORATE GOVERNANCE

Pursuant to Provisions contained in the Clause 49 of the Listing Agreement with the Stock Exchange, the following are furnished as Annexure- 'C' forming part of this Directors' Report:

i. Report on Corporate Governance together with an Auditors' Certificate on compliance of conditions of Corporate Governance as per clause 49 (VII) of the Listing Agreement.

ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per clause 49 (I) (D)(ii) of the Listing Agreement.

iii. Certificate from Managing Director/Chief Financial Officer regarding the financial statements presented to the Board as per Clause 49 (V) of the Listing Agreement.

22. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report (Annexure 'D') forming part of the Corporate Governance forms part of Annual Report.

23. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT

None

24. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute.

25. FORWARD-LOOKING STATEMENT

This Report including its annexure contains forward-looking statements that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Significant factors that could make a difference to the Company's operations include domestic and international economic conditions affecting demand-supply and price conditions, changes in government regulations, environmental regulations, tax regimes and other statutes.

26. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Government of Uttar Pradesh, other local authorities, Bankers, Suppliers, Customers, Dealers, Employees and other Stakeholders which have been a constant source of strength to the Company.

The Board of Directors also expresses its sincere gratitude to all the shareholders for their continuous support and trust they have shown in the management. The dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for providing management, technical and marketing support.

For & on behalf of the Board

Dara P. Mehta Pankaj Khandelwal

Place: New Delhi Chairman Managing Director

Date : 3rd May, 2012


Mar 31, 2011

The Directors are pleased to present the 23rd Annual Report together with the Audited Accounts for the financial year ended March 31, 2011.

1. FINANCIAL HIGHLIGHTS

The summarized results for the year, rounded off to Rupees in millions, are given below:

Particulars Year Ended Year Ended 31.03.2011 31.03.2010

Gross Turnover 709 685

Other Income 41 56

Total Expenditure (including excise duty) (662) (622)

Profit before Depreciation & Exceptional Items 88 119

Depreciation (32) (36)

Profit/(Loss) for the year before exceptional items 56 83

Profit/(Loss) on sale/(provision) for impairment of Fixed Assets (2) (9)

Profit/(Loss) before tax 54 74

(Provision for)/Release of Taxation (7) (24)

Profit/(Loss) after tax 47 50

Balance brought forward from previous year 276 226

Amount available for appropriation 323 276 Appropriations:

Transfer to reserves Nil Nil

Balance carried to the Balance Sheet 323 276

2. RESULTS OF OPERATIONS

The precipitated silica production and sales during the year is 15,236 MTs and 15,213 MTs as against 15,144 MTs and 15,155 MTs respectively in the previous year.

Your Company achieved a sales turnover of Rs. 709 Million during the year as compared to Rs. 685 Million during the previous year and recorded profit before depreciation & exceptional items of Rs. 88 Million as against Rs. 119 Million in the financial year 2009-10.

The Company continues to strive for growth, higher realisations, energy optimization, better working capital management and better asset utilization.

3. FUTURE OUTLOOK

The Indian economy is experiencing strong growth. There are inherent opportunities available for the Company in a significant number of industries such as Tyres, Automotive Components, Toothpaste, Shoe Sole, Footwear, Agrochemicals and Food, all having silica applications which are growing rapidly.

The Company is expanding the production capacity for manufacture of precipitated silica at its production site at Gajraula (Uttar Pradesh) from the existing 15,000 MTs per annum to 21,000 MTs per annum. The project is expected to be completed by end of October, 2011.

We have introduced a new grade of silica, providing enhanced properties for the application of the tyre industry. We are getting encouraging feedback from reputed customers in the tyre segment.

4. DIVIDEND

No Dividend is recommended considering the expansion plans and to improve Companys financial strength.

5. TRANSFER OF FUND TO INVESTOR EDUCATION & PROTECTION FUND

The Company has transferred Rs. 18.4 Million to the investor education and protection fund during the year, pursuant to the provisions of Section 205C of the Companies Act 1956.

6. CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The Central Government promulgated in December 2009, a set of Corporate Governance Voluntary Guidelines. Your Company believes in the concept of Good Corporate Governance and these guidelines are receiving appropriate attention of the Board of Directors.

7. CERTIFICATIONS AND RECOGNITIONS

The Commitment to quality is a process of continual improvement. The Company is holding ISO 9001: 2008 and ISO 14001: 2004 and HACCP Certifications. Our quality management system has successfully maintained ISO 9001: 2008 and ISO 14001: 2004 certifications through regularly scheduled annual audits and HACCP Certification through regularly scheduled bi-annual audits.

8. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereunder.

9. DIRECTORS

There is no change in the Directors of the Company during the year under review. In accordance with provisions of Companies Act, 1956 and Articles of Association Mr. Dara Phirozeshaw Mehta and Mr. Keki Manchersha Elavia, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment. The Board recommends their re-appointment.

10. AUDITORS

M/s. Price Waterhouse, Chartered Accountants, Bangalore, (Firm Registration No. with ICAI - 007568S) the existing Auditors, have expressed their unwillingness for re-appointment as Statutory Auditors of the Company on their retirement at ensuing Annual General Meeting (AGM). Based on the recommendation of the Audit Committee, the Board of Directors of the Company proposed the appointment of M/s. S.R. Batliboi & Associates, Chartered Accountants, (Firm Registration No. with ICAI – 101049W), member firm of Ernst & Young Global Ltd., as Statutory Auditors of the Company at the ensuing AGM. M/s. S.R. Batliboi & Associates, Chartered Accountants, (Firm Registration No. with ICAI – 101049W) have expressed their willingness to act as Statutory Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with provisions of Section 224(1B) of the Companies Act, 1956. The business has been included for your consideration at Item no. 4 of the Notice of ensuing AGM.

The observations in the Auditors Report read with the Notes to Accounts are self-explanatory and do not require any comments.

11. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:

a) That in preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) That we 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 at the end of the financial year ended 31st March 2011 and of the Profit of the Company for that period;

c) That we 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) That we have prepared the Annual Accounts on a going-concern basis.

12. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure A to the Directors Report.

13. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure B to the Directors Report.

14. CORPORATE GOVERNANCE

Pursuant to Provisions contained in the Clause 49 of the Listing Agreement with the Stock Exchanges, the following are furnished as Annexure-C forming part of this Directors Report:

i. Report on Corporate Governance together with an Auditors Certificate on compliance of conditions of Corporate Governance as per clause 49 (VII) of the listing agreement.

ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per clause 49 (I) (D)(ii) of the listing agreement.

iii. Certificate from Managing Director/Chief Financial Officer regarding the financial statements presented to the Board as per Clause 49 (V) of the Listing Agreement.

15. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report (Annexure D) forming part of the Corporate Governance forms part of Annual Report.

16. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT

None

17. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute.

18. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Government of Uttar Pradesh, other local authorities, Credit Rating Agencies, Bankers, Suppliers, Customers, Employees and other Stakeholders which has been a constant source of strength to the Company.

The Board of Directors also expresses its sincere gratitude to all the shareholders for their continuous support and trust they have shown in the management. The dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for providing management, technical and marketing support.





For & on behalf of the Board

Dr. Gurnad Singh Sodhi Matthias Hau Director Managing Director

Date : 3rd June, 2011


Mar 31, 2010

The Directors are pleased to present the 22™ Annua! Report together with the Audited Accounts for the financial year ended March 31,2010.

1. FINANCIAL HIGHLIGHTS

The summarized results for the year, rounded off to Rupees in millions, are given below:

PARTICULARS Year Ended Year Ended 31.03.2010 31.03.2009

Gross Turnover 685 709

Other Income 56 42

Total Expenditure (including excise duty) (622) (715)

Profit before Depreciation & Exceptional Items 119 36

Depreciation (36) (38)

Profit/ (Loss) for the year before exceptional items 83 (2)

Profit/(Loss) on sale/(provision) for impairment . Fixed Assets ( <9) 23

Separation compensation to employees - (12)

Profit/(Loss) before tax 74 9

(Provision for)/Release of Taxation (24) (1)

Profit/(loss) after tax 50 8

Balance brought forward from previous year 226 219

Amount available for appropriation 276 226

Balance carried to the Balance Sheet 276 226

2. RESULTS OF OPERATIONS

The precipitated silica production and sales during the year is 15,144 MTs and 15,155 MTs as against 15,072 MTs and 15,504 MTs respectively in the previous year.

Your Company achieved a sales turnover of Rs. 685 Million during the year as compared to Rs. 709 Million during the previous year and recorded profit before depreciation & exceptional items of Rs. 119 Million as against Rs. 36 Million in the previous year.

The Company continues to strive for growth, higher realisations, energy optimization, better working capital management and better asset utilization.

3. FUTURE OUTLOOK

The Company is applying technical know-how with the support of the parcel company Evonik Degussa GmbH. Germany to maintain Us market position The Technical Support Services nave been strengthened and manpower has been trained overseas. The. close interaction with customers is being maintained to provide them with silica application support

Your Company continues to explore alternative fuels, replacement of high energy consuming old equipments, installation of energy saving devices, optimization of running time of equipments and process modification to improve its performance.

4. FIRE AT CORPORATE OFFICE

A major fire broke out on 3rd December 2009 at the Corporate Office of the Company situated at Thapar House, 3rd Floor, Central Wing, 124 Janpath, New Delhi-110001. There was no impact on the profitability of the Company due to fire as the production unit of the Company is situated at a different location. Accordingly, there was no loss in revenue or production. Fixed Assets which were damaged / destroyed in the fire have been de-capitalized. On the basis of the assessment made by the surveyor, the Company has accounted for Rs. 4.8 Million in other income and shown the same in loans and advances (Balance Sheet) as claim recoverable from Insurance Company.

5. BIOMASS GASIFIER UNIT

A Biomass Gasifier Unit (Producer gas plant) has been installed during the year ended 31st March 2010. This will result into savings due to reduction in fuel costs.

6. EXPANSION PLANS

To meet growing demand, the company has decided to increase its capacity for manufacture of precipitaterj silica at its production site in Gajraula (Uttar Pradesh) from 15000 MT per annum to 21000 MT per annum. The Company plans to invest Rs. 106.4 Million in the expansion project. The expansion project will be financed through internal accruals. The additional capacities will support the growing local demand.

7. SHIFTING OF CORPORATE OFFICE OF THE COMPANY

The corporate office of the company has been shifted to Office no. 1 & 2, 12th Floor, DLF Building No. 9, Tower B, DLF Cyber City, Phase III, Gurgaon-122002 .

8. DIVIDEND

No Dividend is recommended considering the future expansion plans and with a view to conserve resources of the Company and to improve Companys financial strength.

9. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereunder.

10. DIRECTORS

In accordance with provisions of Companies Act, 1956 and Articles of Association Dr. Mustafa Siray and Dr. Gurnad Singh Sodhi, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment. The Board recommends their re-appointment.

Dr. Florian Bertram Kirschner, Whole Time Director ceased to be Whole Time Director w.e.f. 31s1 May 2009. He continued to be Director on the Board till 15th October 2009. The Board acknowledges valuable contribution and guidance extended by Dr. Kirschner during his association with the Company.

Mr. Andreas Bernd Fischer has been appointed as Additional Director on the Board w.e.f. 15th October 2009. Mr. Fischer holds office upto the date of ensuing Annual General Meeting and the Company has received a notice u/s 257 of the Companies Act, 1956 from a member signifying his intention to propose candidature of Mr. Fischer for the office of Director at the ensuing Annual General Meeting.

11. AUDITORS

M/s. Price Waterhouse, Chartered Accountants, Delhi (Firm Registration No. with ICAI- 012754 N) the existing Auditors, have expressed their unwillingness for re-appointment as Auditors of the Company on their retirement at ensuing Annual General Meeting (AGM). Based on the recommendation of the Audit Committee, the Board of Directors of the Company proposed the appointment of M/s. Price Waterhouse, Chartered Accountants, Bangalore, (Firm Registration No. with ICAI - 007568S) as Auditors of the Company at the ensuing AGM. M/s. Price Waterhouse, Chartered Accountants, Bangalore have expressed their willingness to act as Auditor of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with provisions of Section 224(1 B) of the Companies Act, 1956. The business has been included for your consideration at Item no. 4 of the Notice of this AGM. The observations in the Auditors Report read with the Notes on Accounts are self-explanatory and do not require any comments.

12. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:

a) That in preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) That we 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 at the end of the financial year ended 31s1 March 2010 and of the Profit of the Company for that period;

c) That we 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) That we have prepared the Annual Accounts on a going-concern basis.

13. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given in Annexure A to the Directors Report.

14. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure B to the Directors Report.

15. CORPORATE GOVERNANCE

Pursuant to Provisions contained in the Clause 49 of the Listing Agreement with the Stock Exchanges, the following are furnished as Annexure- C forming part of this Directors Report:

;i) Report on Corporate Governance together with an Auditors Certificate on compliance of conditions of Corporate Governance as per clause 49 (VII) of the listing agreement.

(ii) Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per clause 49 (I) (D)(ii) of the listing agreement.

(ili) Certificate from Managing Director/Chief Financial Officer regarding the financial statements presented to the Board as per Clause 49 (V) of the Listing Agreement.

16. MANAGEMENT DISCUSSION AND ANALYSIS

Managements Discussion and Analysis Report (Annexure D) forming part of the Corporate Governance forms part of Annual Report.

17. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT

None

18. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations amongst all its employees. No man day was lost due to any Industrial Dispute.

19. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Governments of Uttar Pradesh and Maharashtra, other local authorities, Credit Rating Agencies, Bankers, Suppliers, Customers, Employees and other Stakeholders whose continued support has been a source of strength to the Company.

The Board of Directors also express their sincere gratitude to all the shareholders for their continued support and trust they have shown in the management. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for providing management, technical and marketing support.

For & on behalf of the Board

Date : 2nd July, 2010 Gurnad Singh Sodhi Matthias Hau

Director Managing Director

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