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Directors Report of Kiri Industries Ltd.

Mar 31, 2014

Dear members,

The Directors have pleasure in presenting 16th Annual Report together with Audited Accounts of the Company for the financial year ended on 31st March, 2014.

* Standalone Performance:

The highlights of Company''s financial performance, f or the year ended 31st March, 2014 are as under: (Rs. in Lacs) Particulars 2013-14 2012-13

Total Revenue 58351.97 52603.47

Profit Before Finance Cost, Depreciation, Tax and Prior period adjustments 6212.09 3475.83

Less : Finance Cost 7726.23 7542.79 Depreciation 3349.64 3197.90 Prior Period adjustments 22.54 20.57

(Loss) before taxation and extra ordinary items (4886.32) (7285.43) Less : Extra Ordinary Items 2876.61 11159.19

(Loss) Before Taxation (7362.93) (18444.62) Less : Provision for Taxation 0.00 0.00 Deferred Tax (24.40) (101.70)

Net Loss After Tax (7738.53) (18342.92) Add : Surplus / (Deficit) Brought Forward (12038.59) 6304.33

(Loss) Available for Appropriation (19777.12) (12038.59)

* Highlights of Operations:

Total Revenue:

During the year under review total turnover of the Company to some extent increased by 10.93% from Rs. 52603.47 Lacs to Rs. 58351.97 Lacs as compared to previous financi al year ended 31st March, 2013, increase in revenue mainly due to support of Dyes Intermediate business of the company.

* Profit before Finance Cost, Depreciation, Tax and Prior period adjustments:

Earning before Finance cost, Depreciation, tax and prior period adjustment increased by 78.72% from Rs. 3475.83 Lacs to Rs. 6212.09 Lacs which is due to increase in price of Dyes Intermediate of the Company.

* Total Expense:

During the year under review, The Total Expense increased by 5.59% amounting to Rs. 63238.29 Lacs as Compared to Rs. 59888.90 Lacs of the previous financial year. The increase in total expenses are due to in crease in Finance Costs, Depreciation, Employee Benefits Expenses, Manufacturing Expenses and increase in selling and distribution expenses as compared to the previous financial year.

* Net Loss:

During the year under review the Company has achieved success to diminish the huge amount of losses occurred in the previous year. In the Current year the Net Loss had reduced by 58.71% to Rs. 7738.53 Lacs as compared to Rs. 18342.92 Lacs of the previous financial year, the net loss reduced mainly on account of reduction of loss from foreign exchange transactions and also due to support of business operations of the Company as compared to the previous financial year.

* Highlights of Consolidated Performance:

(Rs. in Lacs)

Particulars 2013-14 2012-13

Total Revenue 69211.30 55584.09

Profit Before Finance Cost, Depreciation, Tax and Prior period adjustments 7383.32 2506.02

Less : Finance Cost 8022.18 7754.62 Depreciation 3657.28 3476.16 Prior Period adjustments 31.56 20.57

(Loss) before taxation and extra ordinary items (4327.70) (8745.33) Less : Extra Ordinary Items 2876.61 11159.19

(Loss) Before Taxation (7204.31) (19904.52) Less : Provision for Taxation 0.00 23.18 Deferred Tax 63.96 24.99

Net Loss After Tax (7268.27) (19952.70) Add : Share of Profit from Associate 8259.54 0.00

Profit/(Loss) After Tax for the year 991.27 (19952.70)

* Highlights of Operations:

Total Revenue:

During the year under review, the total revenue increased by 24.52% from Rs. 55584.09 Lacs to Rs. 69211.30 Lacs as compared to the previous financial year ended 31st March, 2013 due to increase in prices of products of the Company.

* Profit before Finance Cost, Depreciation, Tax and Prior period adjustments:

During the year under review, the Profit before Finance Costs, Depreciation, Tax and prior period adjustments increased to Rs. 7383.32 Lacs from Rs. 2506.22 Lacs as compared to the previous financial year. I t was mainly due to marginal increase in intermediate price of the Company and effective cost reduction measured taken by the Company.

* Total Expense:

During the year under review, the total Expenditure is increased by 14.32% to Rs. 73539.00 Lacs as Compared from Rs. 64,329.42 Lacs of the previous financial year. The reasons for increase in total expenses are only due to increase in Finance Costs, Depreciation, Employee Benefits Expenses and increase of Manufacturing Expenses as compared to the previous financi al year.

* Net Profit/(Loss) :

During the year under review, the Company had achieved profit of Rs. 991.27 Lacs as compared to the Loss of Rs. 19952.70 Lacs of the previous financial year. I t was mainly due to increase in total revenue and decrease in foreign exchange loss an d positive contribution o f joint venture of the Company.

* Dividend:

In view of losses incurred during the financial year 2013-14, your Directors do not recommend any Dividend for the year under review.

* Subsidiaries and Consolidated Financial Statements:-

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Company has not attached the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the Company.

The Company had prepared Consolidated Financial Statements in accordance with the Generally Accepted Accounting Principles (GAAP). The same has been attached with the Annual Report of the Company. The summary of financial information of each of the subsidiary companies is also attached herewith and forms part of the Annual Report. The Company will provide the Annual Accounts of its subsidiary companies and the related detailed information on specific request made by any shareholder(s).

* Listing Fees:

The Equity Shares of your Company are listed and actively traded on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company had paid Annual Listing fees to both the stock exchanges for the Financial Year 2014- 2015 within the stipulated time.

* Directors:

Appointment of Directors:

Mr. Jayanta Kumar Sinha has been appointed as Nominee Director on behalf of State Bank of India w.e.f. 12th August, 2013.

In compliance with the provisions of Section 149, 152 of the Companies Act, 2013 ("the Act"), other applicable provisions if any of the Act, rules framed thereunder and as per the Circular (Ref No. CIR/CFD/POLICY CELL/2/2014) issued by the Securities And Exchange of Board of India ("SEBI") dated 17th April, 2014 pertaining to amendment in Clause 49 of the Listing Agreement, the Board of Directors of the Company has proposed Mr. Keyoor Bakshi for appointment as Independent Director of the Company with effective from 26th September, 2014 for a period of 5 (Five) consecutive years upto 25th September, 2019 and in compliance of above as well as section 161 of the Act. The Board of Directors has appointed Mr. Mukesh Desai as additional director with effect from 11th August, 2014 and also proposing him for appointment as Independent Dir ector for the period of 5 (five) consecutive years with effective from 26th September, 2014 upto 25th September, 2019.

Re-Appointment of Retiring Directors:

Mr. Pravin Kiri, Chairman of the Company, retires at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. A brief profile of Mr. Pravin Kiri as required under Clause 49 of the Listing Agreement is annexed to the Notice.

Withdrawal of Nominee Director:

IFCI Limited had withdrawn their Nominee Director Mr. V. Anish Babu from the Board of the Company w.e.f. 28 th October, 2013.

* Auditors and Audit Report:

M/s. V. D. Shukla & Co., Statutory Auditors (Firm Registration No.: 110240W) of the Company, retires at the ensuing Annual General Meeting and is eligible for re-appointment. The Company had received a certificate pertaining to their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013, other applicable provisions of the Act and rules framed thereunder from time to time.

* Cost Auditors:

In compliance of the provisions of the Section 148 of the Companies Act, 2013 ("the Act"), other applicable provisions of the Act and rules framed thereunder from time to time, the Board of Directors had appointed M/s. V. H. Savaliya & Associates (Registration No. 100346) as Cost Auditors for audit of Cost records of the Company for the year 2014-15.

* Public Deposits:

The Company has not accepted any public deposits and as such, no amount on account of principal or in terest thereon was outstanding as on the date of the balance sheet.

* Directors'' Responsibility Statement:

In compliance of Section 217(2AA) of the Compani es Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of the annual accounts for the financial year ended 31st March, 2014, all applicable accounting standards have been followed and no material departure have been made from the same;

2. The Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were 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 2013-14 and of the loss of the company for the year under review;

3. The Dir ectors have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. The Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a going concern basis.

* Particulars of Employees:

During the year under review, none of the employee of the Company is drawing remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956.

* Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo:

Additional information on conservation of energy, technology absorption, foreign exchange earnings & outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Reports of Board of Directors) Rules, 1988, is given as an annexure to this report.

* Corporate Governance & Management Discussion and Analysis:

The Company has always endeavored to maintain applicable standards of good Corporate Governance as embodied in its vision, mission and corporate values. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached and forms part of this report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the said clause is attached to this report.

* Acknowledgement:

Your Directors would like to expr ess their appreciation for the assistance and co-operation received from the government, financial institutions, banks, customers, suppliers, business associates and members during the year under review. Your Directors would also like to place on record, sincere appreciation for the significant contribution made by the employees through their dedication and commitment towards the Company.

For and on behalf of the board of Directors

Place : Ahmedabad Pravin Kiri Date : 11th August, 2014 Chairman


Mar 31, 2012

To The Members of Kiri Industries Limited

The Directors have pleasure in presenting 14th Annual Report together with Audited Accounts of the Company for the financial year ended on 31st March, 2012.

REVIEW OF STANDALONE PERFORMANCE:

(Rs. In Lacs)

Particulars 2011-12 2010-11

Net Sales and Other income 53704.08 57658.26

Profit Before Finance Cost, Depreciation, Tax and Prior period adjustments 8735.22 11396.37

Less : Finance cost 5238.86 4389.28

Depreciation 3025.62 1861.55

Prior Period Adjustments 21.54 16.25

Profit before taxation and Extra ordinary Items 449.20 5129.29

Less : Extra Ordinary Items 2184.12 1283.88

(Loss)/Profit Before Taxation (1734.92) 3845.41

Less : Provision for Taxation 301.21 770.16

Deferred Tax 322.81 539.88

Add : MAT Credit Entitlement 0.00 (769.65) Net (Loss)/ Profit After Tax (2358.94) 3305.02

Add : Surplus Brought Forward 9463.27 6654.78

Profit Available for Appropriation 7104.33 9959.80

Appropriation:

1. Dividend on Equity Shares and tax thereon 0.00 331.23

2. Transferred to General Reserve 0.00 165.30

3. Debenture Redemption Reserve 800.00 0.00

Balance Carried to Balance Sheet 6304.33 9463.27

During the year under review, the Company has recorded a total income of Rs. 53704.08 Lacs as against Rs. 57658.26 Lacs a decrease of 6.86 the performance was impacted as the worldwide economy went through turmoil. Across the world, on account of economic crisis in various countries, demand has gone sluggish and hence we could see under utilization of our dyes production capacities making the same as loss making units. Pile up of inventories on lack of demand has also added to the wounds of the colours business. Profit before Finance Cost, Depreciation, Tax and Prior period adjustments decreased from Rs. 11396.37 Lacs to Rs. 8735.22 Lacs in the reporting year, a decline by 23.35% as compared to the previous financial year. The sharp depreciation of Rupee as against Dollar in FY 2011-12 had added to the adverse impact of the company's performance and for the first time in the company's history it reported a Net Loss. Out of the total Loss for the year 2011-12 of Rs. 2358.94 Lacs as against a Net Profit of Rs. 3305.02 Lacs in the preceding financial year 2010-11, Rs. 2184.12 Lacs is on account of forex losses.

REVIEW OF CONSOLIDATED PERFORMANCE:

(Rs. In Lacs)

Particulars 2011-12 2010-11

Revenue 410883.51 368182.11

Cost of Sales (306568.00) (273972.70)

Gross Profit 104315.51 94209.41 Expenditure (99165.84) (102878.86)

Other Income 11442.75 7148.10

Profit/(Loss) from Operating activities 16592.42 (1521.35)

Finance Cost (21161.58) (11079.70)

Loss before taxation (4569.16) (12601.05)

Income tax (expenses)/Credit (2299.86) 1360.59

Loss for the year (6869.02) (11240.46)

Other Comprehensive (Loss)/Income (388.31) 2424.78

Total Comprehensive (Loss) (7257.33) (8815.68)

During the financial year under review, the consolidated revenue increased by 11.59% to Rs. 410883.51 Lacs from Rs. 368182.11 Lacs on account of sustained efforts of the Management. The Cost of sales increased by 11.90% as compared to the previous financial year from Rs. 273972.70 Lacs to Rs. 306568.00 Lacs. The gross profit of the Company increased from Rs. 94209.41 Lacs to Rs. 104315.51 Lacs, showing an increase by 10.73% as compared to the previous financial year. The finance cost increased by 91% from Rs. 11079.70 Lacs to Rs. 21161.58 Lacs, mainly on account of increased borrowings. However, the total comprehensive loss for the year has been reduced by 17.68% to Rs. 7257.33 Lacs from Rs. 8815.68 Lacs that of previous financial year.



DIVIDEND:

In view of losses incurred during the financial year 2011-12, your Directors do not recommend any Dividend for the year under review.

NON CONVERTIBLE DEBENTURES:

During the year under review, your Company has issued 400 Secured Redeemable Non Convertible Debentures (NCDs) of Rs. 10.00 Lacs each, aggregating to Rs. 4000.00 Lacs. The NCDs carry coupon rate of 10.75% p. a. and redemption premium of 2% is payable on redemption of NCDs.

SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS:

As per General Circular No: 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Company has not attached the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. The Company has prepared Consolidated Financial Statements and its subsidiaries in accordance with the International Financial Reporting Standards (IFRS). The same has been attached with the Annual Report of the Company. The summary of financial information of each of the subsidiary companies is attached herewith and forms part of the Annual Report.

The Company will provide the annual accounts of its subsidiary companies and the related detailed information on the specific request made by any shareholder(s). The said annual accounts are open for inspection at the Registered Office of the Company during the business hours on all working days, except Sunday and public holidays.

LISTING:

The Equity Shares of your Company are listed and actively traded on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company has paid annual listing fees to the both stock exchanges for the year 2012- 2013. The Secured Redeemable Non Convertible Debentures are listed on the Bombay Stock Exchange Limited.

DIRECTORS:

Mr. Shanker R. Patel, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. A brief profile of Mr. Patel as required under clause 49 of the Listing Agreement is given as Annexure to the Notice.

Mr. Yamal A. Vyas had resigned as a Director w.e.f 15th October, 2011 and Mr. Ajay Patel had resigned as a Director w.e.f. 14th August, 2012. The Board of Directors places on record their sincere appreciation for the valuable services rendered by them during their tenure.

The Board of Directors of the Company has, at its meeting held on 13th February, 2012, appointed Mr. V. Anish Babu as a Nominee Director of IFCI Limited.

AUDITORS AND AUDITORS' OBSERVATION IN AUDIT REPORT:

M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, retires at the ensuing Annual General Meeting and are eligible for re-appointment. They have issued a certificate stating that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

In respect of the auditors observation regarding default in repayment of principal and interest to banks and financial institutions, it is hereby clarified that the said default in payment was temporary in nature due to mismatches in cash flow on account of delay in realization of receivables from the customers and global slowdown in dyes and chemicals industries.

In respect of auditors observation regarding irregularity in payment of statutory dues, it is hereby clarified that the said delay was due to mismatches in cash flow and tight liquidity position of the Company.

COST AUDITORS:

As per notification F. No. 52/26/CAB-2010, dated January 24, 2012, issued by the Ministry of Corporate Affairs, Government of India, the Company is required to appoint a Cost Auditor for audit of the cost accounting records for the financial year 2012-13. Pursuant to the provisions of Section 233B read with Section 224(1B) of Companies Act, 1956, M/s. V. H. Savaliya & Associates had given their consent to act as Cost Auditors of the Company and accordingly, the Board of Directors at their meeting held on May 14, 2012, appointed them as Cost Auditors of the Company for the Financial Year 2012-13.

The Central Government has approved the appointment of cost auditors for conducting Cost Audit for the financial year 2012-13.

PUBLIC DEPOSITS:

During the year under review, your Company has not accepted any deposits as per the provisions of section 58A of the Companies Act. 1956.

DIRECTORS' RESPONSIBILITY STATEMENT:

In compliance of Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the financial year ended 31st March, 2012, all applicable accounting standards have been followed and no material departure have been made from the same.

2. That the Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were 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 2011-12 and of the loss of the company for the year under review.

3. That the Directors have taken proper and sufficient care to the best of their knowledge and ability, 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.

4. That the Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

EMPLOYEE RELATIONS:

The relations with the employees have been cordial throughout the year. Your Directors place on record their sincere appreciation in respect of the services rendered by the employees of the Company at all levels.

PARTICULARS OF EMPLOYEES:

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, is required to be set out in Directors1 Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO:

Additional information on conservation of energy, technology absorption, foreign exchange earning & outgo as required to be disclosed in term of Section 217(1)(e) of the Companies Act, 1956, read together with the Companies (Disclosures of Particulars in the Reports of Board of Directors) Rules, 1988, is given as an annexure to this report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS:

A separate report on the Corporate Governance and Management Discussion and Analysis Report, along with the Certificate from the Statutory Auditors of the Company in compliance with clause 49 with the Listing Agreement is annexed herewith and forms part of this Annual Report.

QUALIFYING PERSONS FOR INTER SE TRANSFER OF SHARES:

As per the information provided by the promoters and as required under regulation 10(1)(a) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 persons constituting "qualifying persons" as defined in the said regulations is given as under:

(1) Mr. Pravin Kiri, (2) Mr. Manish Kiri, (3) Mrs. Aruna Kiri, (4) Mrs. Anupama Kiri, (5) Ms. Amisha Kiri, (6) Master Hemil Kiri, (7) Synthesis International Limited, (8) Kiri Infrastructure Private Limited, (9) DyStar Global Holdings (Singapore) Pte. Ltd. (formerly known as Kiri Holding Singapore Private Limited), (10) Kiri International (Mauritius) Private Limited, (11) Lonsen Kiri Chemical Industries Limited, (12) Kiri Investment and Trading Singapore Private Limited, (13) Kiri Peroxide Limited, (14) S.M.S. Chemicals Co. Limited, (15) APK Advisory Services Private Limited, (16) Chemhub Exim Private Limited, (17) Chemhub Tradelink Private Limited.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their sincere appreciation for the support received from the government, bankers and financial institutions, customers, suppliers, business associates and shareholders and look forward for their continues support in the future. Your Directors would also like to place on record, sincere appreciation for significant contributions made by the employees through their dedication and commitment towards the Company.

For and on behalf of the Board of Directors

Place : Ahmedabad Pravin A. Kiri

Date : 3rd September, 2012 Chairman


Mar 31, 2011

The Members,

Kiri Industries Limited,

Ahmedabad.

The Directors have pleasure in presenting 13th Annual Report together with Audited Accounts of the Company for the year ended on 31st March, 2011.

REVIEW OF STANDALONE RESULTS: (Rs. In Lacs)

Particulars 2010-11 2009-10

Net Sales and Other income 57658.26 34733.95

Profit Before Interest, Depreciation, Tax & Exceptional Item 11396.38 6654.01

Less :Interest 4389.28 2056.62

Depreciation 1861.55 1172.47

(Add)/Less:Exceptional Item 1283.88 (60.57)

Profit Before Taxation 3861.67 3485.49

Less :Provision for Taxation 770.17 538.29

Deferred Tax 539.88 983.76

Add :MAT Credit Entitlement 769.65 538.29

Profit After Tax 3321.27 2501.73

Less :Prior Period Expenses 16.25 11.55

Net Profit 3305.02 2490.18

Add :Surplus Brought Forward 6654.78 4552.86

Profit Available for Appropriation 9959.80 7043.04

Appropriation:

1. Dividend on equity shares and tax thereon 331.23 263.26

2. Transferred to General Reserve 165.30 125.00

Balance Carried to Balance Sheet 9463.27 6654.78

Your Directors are pleased to report total sales of Rs. 56572.12 Lacs for the year 2010-11 as against Rs. 34084.68 Lacs for the year 2009-10; a stupendous increase of 65.97%; which is on account of penetration to a wider customer base and persistent emphasis on improving product mix and de-bottlenecking its infrastructural limitations which provides better utilization of its Dyes manufacturing unit. The Profit before exceptional items and after tax has increased from Rs. 2441.16 Lacs for the year 2009-10 to Rs. 4605.15 Lacs for the year 2010-11. The Net Profit after tax has increased from Rs. 2490.18 Lacs to Rs. 3305.02 Lacs showing an increase of 32.72% in the current financial year as compared to the preceding financial year of 2009-10.

REVIEW OF CONSOLIDATED RESULTS:

(Rs. In Lacs)

Particulars 2010-11 2009-10

Net Sales and Other Income 386885.56 81074.70

Profit Before Interest , Depreciation, Tax & Exceptional Item 33808.73 7247.40

Less : Interest 9691.18 2716.53

Depreciation 10495.33 2683.00

Less : Exceptional Item 38713.82 6390.65

Profit /(Loss) Before Taxation (25091.60) (4542.78)

Less : Provision for Taxation 2839.70 521.34

Deferred Tax 592.58 1197.65

Add : MAT Credit Entitlement 769.82 575.47

Profit /(Loss) After Tax (27754.06) (5686.30)

Less : Prior Period Expenses 19.51 11.55

Net Profit / (Loss) (27773.57) (5697.85)

Add : Share of Profits from Associates 1.15 —

Add : Share of Profits transferred to Minority Interest — (7.38)

Add : Surplus Brought Forward (1516.59) 4576.90

Profit Available for Appropriation (29289.01) (1128.33)

Appropriation:

1. Dividend on equity shares and tax thereon 331.23 263.26

2. Transferred to General Reserve 165.30 125.00

Balance Carried to Balance Sheet (29785.54) (1516.59)

During the financial year under review, the consolidated sales amounts to Rs. 380667.52 Lacs for the year 2010-11 as against Rs. 80150.68 Lacs for the year 2009-10(which included DyStar operations for 2 months). The topline of DyStar operations have given a boost to the overall growth to sales. After acquisition of DyStar the first full year of its operations displayed regaining of lost grounds by DyStar. The profit before exceptional items and after tax has increased amounts to Rs. 10959.76 Lacs for the year 2010-11 which, substantiates the effective implementation of the restructuring program. The provision on account of restructuring and certain one time expenses, the consolidated loss is reported to be Rs. 27773.57 Lacs, a significant portion of which is non-cash. The Company does not foresee more of such restructuring expenses for DyStar operations in the coming period.

DIVIDEND:

For the financial year 2010-11, your Directors are pleased to recommend a final dividend of Rs. 1.50/- per equity share of Rs. 10/- each (previous year Rs. 1.50/- per equity share). The aggregate amount of dividend including dividend tax is Rs. 331.23 Lacs on 19000053 equity shares. The said dividend if declared by the members will be paid on 5th October, 2011.

REVIEW OF DYSTAR OPERATIONS AND RESTRUCTURING PROGRAM:

In February, 2010 your Company along with Well Prospering Limited through Kiri Holding Singapore Private Limited (KHSPL), has acquired Assets of DyStar Textilfarben GmbH and DyStar Textilfarben GmbH & Co. Deutschland KG (DyStar) along with its 36 subsidiaries to strengthen its forward integration growth drive. Thereafter, in October 2010, KHSPL acquired DyStar LP USA for USD 10 Million.

During the year under review, DyStar Entities achieved a robust turnover of Rs. 336306.02 Lacs equivalents (Euro 543.31 Mio) and earnings before tax and extraordinary items of Rs. 8513.39 Lacs. The restructuring program is under implementation and the Company has provided for onetime restructuring costs of Rs. 37429.93 Lacs, including provisions of Rs. 6841.93 Lacs towards impairment of assets.

QUALIFIED INSTITUTIONAL PLACEMENT:

During the year under review your Company successfully completed its maiden Qualified Institutional Placement (QIP) of Rs. 23902.00 Lacs by way of issue of 40 Lacs equity shares of Rs.10 each, at a premium of Rs. 587.55 per equity share. The funds raised from QIP are utilized to repay outstanding unsecured loans which were accepted for acquisition of stake in DyStar. Further the funds are being used towards enhancing production capacities of Dyes Intermediates and Specialty Dyes Intermediates and investment in equity/preference shares in Joint Venture and associate companies. Out of proceeds of QIP, one of the plants Dyes Intermediates, namely Vinyl Sulphone, Phase I, started commercial production since 15th March, 2011.

Pursuant to allotment of 40 Lacs Equity Shares by way of QIP, the paid up capital of the Company increased from Rs. 15,00,00,530/- (Rupees Fifteen Crores Five Hundred Thirty only) to Rs. 19,00,00,530/- (Rupees Nineteen Crores Five Hundred Thirty only).

FUTURE PROSPECTS:

Your Company on standalone basis, would commence commercial production of certain Specialty Dyes Intermediates and additional Dyes Intermediates. This shall strengthen the growth plan of your Company and provide consistent track record of organic growth and expansion, which is the epicenter of its core values.

CHANGE OF NAME OF THE COMPANY:

The name of the Company has been changed from Kiri Dyes and Chemicals Limited to Kiri Industries Limited vide Fresh Certificate of Incorporation dated 8th March, 2011 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli.

SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS:

The Ministry of Corporate Affairs vide its General Circular No: 2/2011 dated 8th February, 2011 has granted general exemption from attaching the accounts along with the report of the Board of Directors and Auditors to the Balance Sheet of the subsidiary Companies with Annual Report of the holding Company subject to fulfillment of conditions prescribed in that circular.

As per the conditions prescribed by the above mentioned circular, the Board of Directors of the Company has given their consent for not attaching accounts of subsidiary Companies by passing resolution in their meeting held on 1st September, 2011. The Company has prepared Consolidated Financial Statements of the Company and its subsidiaries in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India. The same has been attached with the Annual Report of the Company. The summary of financial information of each of the subsidiary companies is attached herewith and forming part of the Annual Report of the Company.

The Company will provide the annual accounts of its subsidiary companies and the related detailed information on the specific request made by any shareholders/investors. The said annual accounts are open for the inspection at the Registered Office of the Company during business hours on all working days, except Sunday and public holidays.

LISTING:

The equity shares of your Company are listed and actively traded on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). Your Company's shares are tradable compulsorily in electronic form and your Company has got connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The Company has paid listing fees to both the stock exchanges.

DIRECTORS:

Mr. Pravin A. Kiri and Mr. Manish P. Kiri, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. Profiles of Mr. Pravin A. Kiri and Mr. Manish P. Kiri as required under clause 49 of the Listing Agreement are given as Annexure to the Notice.

The Board of Directors of the Company at their meeting held on 13th May, 2011 has appointed Ms. Harsha B. Bangari as Nominee Director of Export Import Bank of India.

AUDITORS AND AUDITORS' REPORT:

M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, retire at ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if appointed. They have issued a certificate stating that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956. The notes on standalone financial statements and consolidated financial statements referred to in the auditors' report are self- explanatory and therefore do not call for any further comments and explanations.

PUBLIC DEPOSITS:

During the year under review, your Company has not accepted or renewed any deposits within the meaning of the provisions of section 58A of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT:

In compliance of Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the financial year ended 31st March, 2011, all applicable accounting standards have been followed and no material departure have been made from the same;

2. That the Directors have selected appropriate accounting polices and applied them consistently and made judgments and estimates that were 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 2010-11 and of the profit of the Company for the year under review;

3. That the Directors have taken proper and sufficient care to the best of their knowledge and ability, 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;

4. That the Directors have prepared the annual accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

EMPLOYEE RELATIONS:

The relations with the employees have been cordial throughout the year. Your Directors place on record their sincere appreciation in respect of the services rendered by the employees of the Company at all levels.

PARTICULARS OF EMPLOYEES:

Information pursuant to Section 217 (2A) of the Companies Act, 1956 read together with the Companies (Particulars of Employees) Rules, 1975 has been given as under:

Name Nature Gross Qualification Experie -nce Date of Earlier Age of Duty Remune ration (Years) Commence -ment Employ -ment (Yea -rs) (Rs. in Lacs) of Emplo -yment

Mr. Pravin A. Kiri Chairman 84.00 B.SC. 42 14.05. 1998 Jay Chemical 65 (Chemistry) Industries

Mr. Manish P. Kiri Managing 84.00 B. E. (Ele. & Comm.) 12 14.05. 1998 Parke Devis 38 Director MBA. (Michigan Pharmaceu -ticals University, USA) -USA

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO:

Additional information on conservation of energy, technology absorption, foreign exchange earning & outgo as required to be disclosed in term of Section 217(1) (e) of the Companies Act, 1956, read together with the Companies (Disclosures of Particulars in the Reports of Board of Directors) Rules, 1988, is given as an annexure to this report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS:

Your Company is committed to maintain highest standard of corporate governance. A separate report on the Corporate Governance and Management Discussion and Analysis Report as per Clause 49 of the Listing Agreement, along with the Certificate from the Statutory Auditors of the Company in compliance of clause 49 of the Listing Agreement is annexed herewith and forming part of this Annual Report.

GROUP FOR INTERSE TRANSFER OF SHARES:

As required under clause 3(1) (e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practice Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 10 to 12 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 is given as under:

1. Mr. Pravin Kiri

2. Mr. Manish Kiri

3. Mrs. Aruna Kiri

4. Mrs. Anupama Kiri

5. Ms. Amisha Kiri

6. Master Hemil Kiri

7. Synthesis International Limited

8. Kiri Infrastructure Private Limited

9. Kiri Holding Singapore Private Limited

10. Kiri International (Mauritius) Private Limited

11. Lonsen Kiri Chemical Industries Limited

12. Kiri Investment and Trading Singapore Private Limited

13. Kiri Peroxide Limited

14. APK Advisory Services Private Limited

15. Chemhub Exim Private Limited

16. Chemhub Tradelink Private Limited.

APPRECIATION:

Your Company maintained health, cordial and harmonious industrial relations at all levels. The Dynamic and unstinting efforts of the Employees have enabled your Company to become leading chemical Company on the globe. Your Directors would like to place on record, their sincere appreciation for significant contributions made by the employees through their dedication and commitment towards the success and growth of the Company.

The Board of Directors also acknowledge the support and assistance extended to us by the suppliers, customers, lenders, business associates, shareholders and the government for their invaluable support and look forward to continued support in the future.

For and on behalf of the Board of Directors

Place : Ahmedabad Pravin A. Kiri

Date :1st September, 2011 Chairman


Mar 31, 2010

The Directors have pleasure in presenting 12th Annual Report together with Audited Accounts of the company for the year ended on 31st March, 2010.

FINANCIAL RESULTS:

(Rs. In Lacs)

Particulars 2009-10 2008-09

Net Sales and Other income 34733.95 28264.18

Profit Before Interest, Depreciation, Tax & Exceptional Item 6654.03 5931.78

Less : Interest 2056.62 1697.22

Depreciation 1172.47 334.08

(Add)/Less: Exceptional Item (60.57) 2734.45

Profit Before Taxation 3485.51 1166.03

Less : Provision for Taxation 538.29 85.00

Add : MAT Credit Entitlement (538.29) 0.00

Deferred Tax 983.76 224.47

Fringe Benefit Tax 0.00 9.76

Profit After Tax 2501.75 846.80

Less : Prior Period Expenses 11.57 9.99

Net Profit 2490.18 836.81

Add : Surplus Brought Forward 4552.85 4037.79

Profit Available for Appropriation 7043.03 4874.60

Appropriation:

1. Dividend on equity shares and tax thereon 263.25 263.25

2. Transferred to General Reserve 125.00 58.50

Balance Carried to Balance Sheet 6654.78 4552.85

DIVIDEND:

For the financial year 2009-10, your Directors are pleased to recommend a final dividend of Rs. 1.50 per share of Rs. 10/- each (previous year Rs. 1.50 per share). The aggregate amount of dividend including dividend tax is Rs. 263.25 Lacs on 15000053 equity shares.

REVIEW OF BUSINESS OPERATIONS:

Your directors are pleased to report total income of Rs. 34733.95 Lacs for the year 2009-10 as against Rs. 28264.18 Lacs for the year 2008-09; an increase of 22.89%, which is mainly on account of commissioning of new project of Acetanilide and Basic chemicals. During the year there is marginal reduction in export turnover of around 6% from Rs. 17023.32 Lacs to Rs. 16006.07 Lacs, which is mainly on account of recessionary conditions in the European market. The profit before taxation increased from Rs. 1166.03 Lacs for the year 2008-09 to Rs. 3485.51 Lacs for the year 2009-10. The net profit increased from Rs. 836.81 Lacs for the year 2008-09 to Rs. 2490.18 Lacs for the year 2009-10.

During the year the company commenced commercial production of its backward integration plant for manufacturing of basic chemicals i.e. Sulphuric Acid, Oleum and Chloro Sulphonic Acid with a combined capacity of 500 MT/day. The company also commenced 3.5 MW co-generation steam based power plant at Village Dudhwada, Taluka Padra, District Vadodara.

During the financial year, your company commenced commercial production of Acetanilide, with installed capacity of 12000 MTPA at Village Dudhwada, Taluka Padra, District Vadodara, which is used in manufacturing of Vinyl Sulphone.

ACQUISITION OF DYSTAR:

In February, 2010 your Company through its wholly owned subsidiary Kiri Holding Singapore Private Limited, has acquired Assets of DyStar Textilfarben GmbH and DyStar Textilfarben GmbH & Co. Deutschland KG (DyStar) along with its 36 subsidiaries to strengthen its forward integration growth drive. The Asset Purchase agreement includes DyStars Patents, Technology, IP rights, Brand Name, Trademarks etc. It is the historical cross border acquisition by any medium sized company from India.

DyStar is the global market leader for dyes, dyes solutions, leather solutions, performance chemicals and custom manufacturing of special dyes/pigments with a global market share of around 21% having sales turnover of Euro 800 Mn., (equivalent Rs.48000Mn) in calendar year 2008.

It has sales and technical support presence in all key markets and also having agencies in 50 countries and 16 active production facilities in 11 countries. DyStar is a total solution provider across the entire textile value chain starting from concept design and development through fiber & fabric production, wet processing until garment finishing which includes quality testing & certification. The research and development centre of DyStar at Frankfurt Germany is a state of art research centre.

FUTURE PROSPECTS:

Your Company has a consistent track record of organic growth and expansion, which is the epicenter of its core values. While expanding vertically its supply chain, it is continuing to enhance manufacturing facilities of Dyes Intermediates and Specialty Dyes Intermediates to cater to the future demand of the global market and for its Joint Venture plant. The Company as a part of its clean environment policy is proposing to set up a resource recovery project of utilizing spent acid of Dyes Intermediates.

SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS:

On the basis of application by the Company the Ministry of Corporate Affairs, Government of India vide its order No. 47/639/ 2010-CL-III dated 26th July, 2010, issued under section 212(8) of the Companies Act, 1956 has granted an exemption to the Company from attaching the accounts along with the report of the Board of Directors and Auditors to the balance sheet of the Company for the financial year ended on 31st March, 2010 as required by Section 212(1) of the Companies Act, 1956, of its forty two (42) subsidiary companies with the Annual Report of the Company for the financial year ended 31st March, 2010. The summary of financial information of each of the subsidiary companies is attached herewith and forming part of Annual Report of the Company.

As directed by aforesaid order of the Ministry of Corporate Affairs and as required under Clause 32 of Listing Agreement with the stock exchange(s) and in accordance with the requirements of Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its subsidiaries. The same has been attached with the Annual Report of the Company.

The Company will provide the annual accounts of its subsidiary companies and the related detailed information on the specific request made by any shareholders/investors. The said annual accounts are open for the inspection at the registered office of the Company during business hours on all working days, except Sunday and public holidays. The financial information relating to the Subsidiary Companies, as per the condition (iii) of the above cited order of the Ministry of Corporate Affairs, are attached along with the consolidated financial statement.

DEPOSITORY SYSTEM:

Your companys shares are tradable compulsorily in electronic form and your company has got connectivity with both the depositories i.e. National Security Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

DIRECTORS:

Mr. Yamal A. Vyas, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible to offer himself for re-appointment. Profile of Mr. Yamal A. Vyas as required under clause 49 of the Listing Agreement is given in the Annexure to the Notice.

The Board of Directors of the Company at their meeting held on 22nd May, 2010 has reappointed Mr. Pravin A. Kiri as Chairman and Mr. Manish P. Kiri, as Managing Director of the Company for a further period of three years from 1st April, 2010 to 31st March, 2013. The Board of Directors at their meeting held on 26th April, 2010 has also appointed Mr. Shanker R. Patel as Whole Time Director of the Company for a period of three years from 1st May, 2010 to 30th April, 2013. Their reappointment/ appointment was confirmed by members at Extra Ordinary General Meeting held on 26th June, 2010.

Mr. Bipin R. Patel and Mrs. Aruna P. Kiri have resigned as directors of the Company w.e.f. 26th April, 2010 and Mr. Keyoor M. Bakshi and Mr. Ajay J. Patel are appointed as an additional directors of the Company w.e.f. 26th April, 2010. The Board hereby takes the opportunity to express sincere thanks and gratitude to Mr. Bipin R. Patel and Mrs. Aruna P. Kiri for the invaluable contribution during their tenure as directors of the Company.

AUDITORS AND AUDITORS REPORT:

M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, retire at ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if appointed. They have issued a certificate stating that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956.

The notes on accounts referred to in the auditors report are self-explanatory and therefore do not call for any further comments and explanations.

PUBLIC DEPOSITS:

During the year under review, the company did not accept any deposits within the meaning of the provisions of section 58A of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT:

In compliance of Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the financial year ended 31st March, 2010, all applicable accounting standards have been followed and no material departure have been made from the same.

2. That the Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the company for the year under review.

3. That the Directors have taken proper and sufficient care to the best of their knowledge and ability, 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;

4. That the Directors have prepared the annual accounts for the financial year ended 31st March, 2010 on a ‘going concern basis.

EMPLOYEE RELATIONS:

The relations with the employees have been cordial throughout the year. Your Directors place on record their sincere appreciation in respect of the services rendered by the employees of the Company at all levels.

PARTICULARS OF EMPLOYEES:

Information pursuant to Section 217(2A) of the Companies Act, 1956 read together with the Companies (Particulars of Employees) Rules, 1975 has been given as under:

Name Nature Gross Qualification Exper ience Date of

of Duty Remune ration (Years) Commencem ent (Rs. in Lacs) of Emplo yment

Mr. Pravin Kiri Chairman 84.00 B.SC. 41 14.05.1998 (Chemistry)

Mr. Manish Kiri Managing 84.00 B. E. (Ele. & Comm.) 11 14.05.1998 Director MBA. (Michigan University, USA)







Name Earlier Age Employment (Years)

Mr. Pravin Kiri Jay Chemical 65 Industries Mr. Manish Kiri Parke Devis 38 Pharmaceuti cals-USA

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO:

Additional information on conservation of energy, technology absorption, foreign exchange earning & outgo as required to be disclosed in term of Section 217(1)(e) of the Companies Act, 1956, read together with the Companies (Disclosures of Particulars in the Reports of Board of Directors) Rules, 1988, is given as an annexure to this report.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS:

Your Company complies with the provisions laid down in Corporate Governance Code. Report on the Corporate Governance and Management Discussion and Analysis Report as per Clause 49 of the Listing Agreement, along with the Certificate from the Statutory Auditors of the Company in compliance of clause 49 of the Listing Agreement is annexed herewith and forming part of this Annual Report.

GROUP FOR INTERSE TRANSFER OF SHARES:

As required under clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 persons constituting “Group” (within the meaning as defined in the Monopolies and Restrictive Trade Practice Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 11 to 12 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 is given as under:

1. Mr. Pravin Kiri

2. Mr. Manish Kiri

3. Mrs. Aruna Kiri

4. Mrs. Anupama Kiri

5. Ms. Amisha Kiri

6. Master Hemil Kiri

7. Kiri International

Hong Kong Limited (name changed to Synthesis International Limited w.e.f. 19.08.2010)

8. Kiri Infrastructure Private Limited

9. Kiri Holding Singapore Private Limited

10. Kiri International (Mauritius) Private Limited

APPRECIATION: Your Directors would like to thank the suppliers, customers, lenders, business associates, shareholders and the Government for their invaluable support and look forward to continued support in the future. Your Directors wish to place on record their appreciation of employees at all levels for their hard work, dedication and commitment, which has enabled the Company to become global company.

For and on behalf of the Board of Directors

Place : Ahmedabad Pravin A. Kiri

Date : 1st September, 2010 Chairman