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Directors Report of Manali Petrochemicals Ltd.

Mar 31, 2015

Dear Members,

The Directors present their 29th Annual Report on the business and operations of your Company and the Audited Financial Statements for the year ended 31sl March 2015.

Financial Results

(Rs. in crore)

Description 2014-15 2013-14

Profit Before interest & depreciation 77.56 53.22

Interest 2.48 1.90

Depreciation 5.55 6.56

Profit Before Tax 69.53 44.76

Provision for Taxation 25.54 15.71

Profit After Tax 43.99 29.05

Operational Highlights

The performance during the year was the best ever in the history of the Company with turnover surpassing the Rs. 800 crore mark. The export sales increased from Rs. 17.58 crore to Rs. 33.67 crore highest ever recorded by the Company. The net profit for the year was higher by about 51% at Rs. 43.99 crore against Rs. 29.05 crore in the previous year.

Availability of bio mass fuel for the Captive Power Plant (CPP) continued to be limited and the input cost also went up substantially due to demand from other core industries such as paper mills. Alternate fuels for the CPP were used to ensure operations at optimum load, but with the cost becoming higher than the alternate power, the CPP was shut down during December 2014. The Company went in for purchase of power through energy exchanges and third parties to meet the short-fall.

The bulk storage facility at Ennore Port became operational during the year under review thereby ensuring uninterrupted availability of input material for the derivative plants. Import of PO during the year was about 10,000 MT which helped in better production and achieving highest ever turnover.

Financial Review

The year 2014-15 witnessed moderate changes in interest rates and the bank rate came down from 9% in March 2014 to 8.5% in March 2015. There was decline in the overall bank credit growth and also aggregate of bank deposits. The inflation also declined sharply mainly on account of lower crude oil prices and other steps taken by the regulators.

The Company has been reaffirmed with ratings of CARE A signifying 'low credit risk' for long-term bank facilities and CARE A1 signifying 'lowest credit risk' for short-term bank facilities.

Dividend

The Company is in the process of taking up capital expenditure plans to improve the sales and profitability further and needs to plough back the profits for the same to avoid interest burden. In the light of this, your Directors recommend a 10 % dividend i.e. fifty paise for every equity share of Rs. 5/- each fully paid-up, for the year 2014-15, aggregating to Rs. 8.60 crore, excluding dividend distribution tax. It may be noted that your Company has been declaring dividend continuously for the past ten years, in spite of the downturn in the economy experienced globally and in India during the earlier years.

As on 31st March 2015, your company had 312 employees on its roll at different locations including Senior Management Personnel, Engineers, Technicians and Trainees.

Related Party Transactions

During the year under review, there were no transactions with related parties referred to in S. 188(1) of the Act. The other transactions with such parties were not material in terms of the policy framed by the Audit Committee of the Company as published in its website viz., http://manalipetro.com/Policy_1.html.

Board of Directors and related disclosures

The Board comprises of eight directors of whom four are independent including a woman director. All the Independent Directors have furnished necessary declaration under Section 149 (7) of the Act and as per the said declarations they meet the criteria of independence as provided in Section 149 (6) of the Act.

The Board met six times during the year under review and the relevant details are furnished in the CGR.

The Board has approved the Remuneration Policy as recommended by the Nomination and Remuneration Committee (NRC) which inter alia contains the criteria for determining the positive attributes and independence of a director as formulated by the NRC. The policy on remuneration to directors is disclosed in the CGR annexed to this Report.

Mr. Sanjiv Ralph Noronha (DIN: 01905639) resigned as a Director effective from 11th August 2014.

At the Board Meeting held on 13th August 2014 Mr. G Chellakrishna (DIN: 01036398) and Ms. Sashikala Srikanth (DIN: 01678374) have been appointed as Additional and Independent Directors of the Company for a period of five years under Section 149 of the Act. Approval of the members for the same under Sections 150, 152, 160 read with Schedule IV to the Act will be considered at the ensuing AGM.

Mr. Ashwin C Muthiah, (DIN 00255679) Chairman retires by rotation and being eligible offers himself for re-election.

Mr. R Kothandaraman was appointed as the Company Secretary (CS) and Mr. Anis Tyebali Hyderi as the Chief Financial Officer (CFO) in the place of the erstwhile CFO & CS Mr. S Vasudevan, who separated from the Company on 31st May 2014.

Annual Evaluation of the Board, Committees and Directors The formal evaluation of the Board and its Committees was done taking into account the various parameters such as their roles and responsibilities, composition and the adequacy, decision making processes and related practices, focus on important and critical issues, progress monitoring, governance and the like.

The evaluation of the individual directors, including the independent directors was done taking into account their qualification and experience, understanding of their respective roles (as a Director, Independent Director and as a member of the Committees of which they are Members/Chairpersons), adherence to Codes and ethics, conduct, attendance and participation in the meetings, etc.

In compliance with the requirements of Schedule VII to the Act and Clause 49 of the Listing Agreement a separate meeting of the Independent Directors was held during the year.

The details of familiarization programme for the Independent Directors has been disclosed in the Company's website viz., http://manalipetro.com/famaliar_polici.html.

Director's Responsibility Statement

Pursuant to the requirement of sub-sections 3 (c) and 5 of Section 134 of the Act it is hereby confirmed that

a) in the preparation of the annual accounts for the financial year ended 31st March 2015, 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 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 of the Company for the year under review.

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

(d) the Directors had prepared the 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 were adequate and operating effectively and

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

Details of Unclaimed Share Certificates

In accordance with the requirements of the Clause 5A of the Listing Agreement, shares remaining unclaimed have been transferred and held in a separate demat account. As per the information provided by the Registrars and Transfer Agent, out of the 16,10,076 shares which remained unclaimed by 6,628 shareholders at the beginning of the year, 7,725 shares were released to 16 shareholders during the year. As at the end of the year 16,02,351 remained unclaimed by 6,612 shareholders.

Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai were appointed as the Auditors of the Company at the 28th Annual General Meeting (AGM) held on 13th August 2014 to hold office till the conclusion of 30th Annual General Meeting. As required under Section 139 of the Act, ratification of their appointment to hold office from the conclusion of the 29th AGM till the conclusion of the 30th AGM will be taken up at the ensuing AGM.

Cost Audit

The Cost Audit Report for the year ended 31st March 2014, duly certified by Mr. S Gopalan, Cost Accountant, due to be filed on or before 27th September 2014 was filed on 26th September 2014. Mr. S Gopalan, Proprietor, S Gopalan & Associates, Cost Accountants, Chennai was appointed as the Cost Auditors of the Company for the financial year 2014-15 on a remuneration of Rs. 3 lakh plus applicable taxes and reimbursement of out of pocket expenses. He has been re-appointed as the Cost Auditor for the year 2015-16 on the same remuneration.

As required under S. 148 of the Act, read with the relevant Rules, ratification of the members for the remuneration to the Cost Auditor for both the years will be considered at the ensuing AGM. Adequacy of Internal Controls

Your company has in place adequate internal financial control systems combined with delegation of powers and periodical review of the process. The control system is also supported by internal audits and management reviews with documented policies and procedures. The system was also reviewed by an external agency, and no major weaknesses were reported.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A Report on Corporate Governance is given as Annexure A along with a Certificate from the Auditors regarding compliance with the requirements of Corporate Governance is attached to this report.

Secretarial Audit Report

As required under Section 204 of the Act, the Secretarial Audit Report issued by Mrs. B Chandra, Company Secretary in practice is given in Annexure B. As regards the observation of the Secretarial Auditor it is clarified that the Company has been following up with the concerned authorities for grant of consents under the pollution control laws including for the augmented capacities and the same are expected to be received soon.

Other disclosures

a. Information on conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134 of the Companies Act, 2013 ('the Act') read with Rule 8 of the Companies (Accounts) Rules, 2014, to the extent applicable are given in Annexure C.

b. The extract of the Annual Return in Form MGT-9 is given in Annexure D.

c. The disclosures prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure E to this Report. It is hereby affirmed that the remuneration to the employees are as per the Remuneration Policy of the Company.

d. The Company has not accepted any deposits from the public during the year under report.

e. The information under Section 186 of the Act relating to investments, loans, etc. as at the year end has been furnished in notes to the Financial Statement.

f. The CSR Policy related disclosures are given in Annexure F.

Your Directors express their sincere gratitude to the Government of India, the Government of Tamilnadu, the Promoters and the consortium of Banks for the assistance, co-operation and support extended to the Company. The Directors thank the shareholders for their continued support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

For and on behalf of the Board

Ashwin C Muthiah Chennai DIN:00255679 5th August 2015 Chairman


Mar 31, 2014

Dear Shareholders

The Directors present their 28th Annual Report on the business and operations of your Company and the Audited Financial Statements for the year ended 31st March 2014.

Financial Results

(Rs. in crore)

DESCRIPTION 2013-14 2012-13

Profi t Before interest & depreciation 53.22 43.84

Interest 1.90 2.14

Depreciation 6.56 6.36

Profi t Before Tax 44.76 35.33

Provision for Taxation 15.71 8.02

Profi t After Tax 29.05 27.32

Cash Profi t 38.12 31.82

Operational Highlights

During the year under review the operations of the Company were better than the previous year in spite of cut-throat competition from overseas polyol suppliers. The export sales increased from Rs. 2.83 crore to Rs. 17.58 crore highest ever recorded by the Company. The net profi t for the year was higher by about 6% at Rs. 29.05 crore against Rs. 27.32 crore in the previous year.

Availability of bio mass fuel for the Captive Power Plant continued to be limited due to demand from paper mills and also similar power plants. Even at increased costs supplies were not forthcoming, forcing the Company to operate the CPP at lower loads. Alternate fuels for the CPP are being tried to ensure operations at optimum load. The Company went in for purchase of power through energy exchanges and third parties to meet the short-fall. These resulted in higher cost of power and consequently the profi tability was also impacted.

Creation of bulk storage facility at Ennore Port was completed in April 2014 and the fi rst shipment was received during the fi rst week of May 2014. With this availability of adequate input material for the derivative plants would be ensured, paving way for optimum utilization of the facilities.

Financial Review

The year 2013-14 witnessed moderate changes in interest rates. During the year bank credit registered a growth of 14.3% compared to 14.1% in the previous year. Non-food credit increased by 17% Vis a Vis 8.50% in 2012-13. There was also a marginal increase in the deposits with Banks, refl ecting the overall sentiments. The PLR of major banks increased to 10 - 10.25% from 9.7% - 10.00% in the previous year. In order to bring down the infl ation, RBI also kept on increasing the repo rates and the rates at the end of the year was higher by 0.50% compared to March 2013. Rupee witnessed unprecedented depreciation during August/September 2013 but recovered slowly thereafter. This had some impact on the margins of the Company.

The Company has been reaffi rmed with ratings of CARE A- signifying ''low credit risk'' for long-term bank facilities and CARE A1 signifying ''lowest credit risk'' for short-term bank facilities.

Dividend

Your Directors recommend a 10 % dividend i.e. 50 paise for every equity share of Rs. 5/- each fully paid-up, for the year 2013-14, aggregating to Rs. 8.60 crore, excluding dividend distribution tax.

Conservation of Energy

As required under Section 217(1)(e) of the Companies Act, 1956 (''the Act'') read with Rule-2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, to the extent applicable are annexed and form part of this report.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under report.

Human Resources

Your Company believes that achievement of its goals is reliant on the abilities of its workforce to convert the plans into actions. Therefore every effort is taken to retain the talents and also introduce newer ideas from the younger generation, for the success story to continue. Various HR initiatives are also taken to enhance the competency of the employees through inclusive decision making process by delegation, recognition, leadership development, etc. Your Company imparts need based training to its employees with special focus on youngsters, stimulating them to play an important role in shaping the Company''s future. The industrial relations have generally been cordial, except in relation to a wage dispute with the workmen from 2001, being contested in the Supreme Court. The Management''s efforts to settle the issue through dialogues have not been fruitful.

As on 31st March 2014, your company had 297 employees on its roll at diff erent locations including Senior Management Personnel, Engineers, Technicians and Trainees.

Particulars of Employees

Details prescribed under Section 217 (2A) of the Act, read with Companies (Particulars of Employees) Rules, 1975, as amended are attached to this Report.

Directors

At the Board Meeting held on 28th May 2014 Mr. G Balasubramanian (DIN: 06874838) has been appointed as an Additional Director and also as Wholetime Director (Works) for a period of 3 years, subject to approval of the Members at the AGM. As per Section 161 of the Act, he holds offi ce till the ensuing AGM and it is proposed to appoint him as a Director under Section 152 and also seek approval of the Members for his appointment and remuneration as the Wholetime Director.

At the aforesaid meeting Brig. (Retd) Harish Chawla (DIN: 00085415) and Mr. Kulbir Singh (DIN: 00204829) have been appointed as Independent Directors of the Company for a period of fi ve years under Section 149 of the Companies Act, 2013 (the new Act). As per the provisions of the new Act, their appointment is to be approved by the shareholders in the general meeting and hence the same is proposed to be considered at the ensuing AGM.

The term of offi ce of Mr. Muthukrishnan Ravi (DIN: 03605222), the Managing Director ends on 28th July 2014 and the Board has re-appointed him as the MD for a further period of 3 years and the same will be considered for approval of the Members at the ensuing meeting.

Mr. T K Arun, Director retires by rotation and being eligible off ers himself for re-election.

Director''s Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Act is hereby confi rmed:

a) in the preparation of the annual accounts for the fi nancial year ended 31st March 2014, 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 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 fi nancial year and of the profi t of the Company for the year under review.

c) the Directors had taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

d) the Directors had prepared the accounts for the fi nancial year ended 31st March, 2014 on a "going concern" basis.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance stipulated under Clause 49 of the Listing Agreement

entered into with the Stock Exchanges. A Report on Corporate Governance is made a part of this Report and a Certifi cate from the Auditors regarding compliance with the requirements of Corporate Governance is attached to this report.

Details of unclaimed Share Certifi cates

In accordance with the requirements of the Clause 5A of the Listing Agreement, shares remaining unclaimed even after 3 reminders have been transferred and held in a separate demat account. As per the information provided by the Registrars and Transfer Agent, out of the 16, 16,678 shares which remained unclaimed by 6,645 shareholders at the beginning of the year, 6,600 shares were released to 17 shareholders during the year. As at the end of the year 16, 10,076 shares remained unclaimed by 6628 shareholders.

Auditors

M/s. Deloitte Haskins & Sells, appointed as the Auditors of the Company at the 27th Annual General Meeting held on 2nd August 2013 hold offi ce till the conclusion of 28th Annual General Meeting and are eligible for re-appointment. As per Section 139 of the new Act they can hold offi ce from the conclusion of the 28th AGM till the conclusion of the 30th AGM. Their re-appointment will have to be ratifi ed by the Members at every AGM. In compliance with the requirements of the new Act, it is proposed to appoint the retiring Auditors to hold offi ce till the conclusion of the 30th AGM to be held in the year 2016, subject to ratifi cation at the next AGM.

Cost Audit

Mr. S Gopalan, Proprietor, S Gopalan & Associates, Cost Accountants, Chennai has been appointed as the Cost Auditors of the Company for the fi nancial year 2013-14 pursuant to Section 233B of the Act. The Cost Audit Report for the year ended 31st March 2013, duly certifi ed by Mr. S Gopalan, Cost Accountant, due to be fi led on or before 27th September 2013 was fi led on 4th September 2013.

Adequacy of Internal Controls

Your company has in place adequate internal control systems combined with delegation of powers and periodical review of the process. The control system is also supported by internal audits and management reviews with documented policies and procedures.

Acknowledgement

Your Directors express their sincere gratitude to the Government of India, the Government of Tamilnadu, the Promoters and the consortium of Banks for the assistance, co-operation and support extended to the Company. The Directors thank the shareholders for their continued support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

Disclaimer

The Management Discussion and Analysis contained herein is based on the information available to the Company and assumptions based on experience in regard to domestic and global economy, on which the Company''s performance is dependent. It may be materially infl uenced by changes in economy, government policies, environment and the like, on which the Company may not have any control, which could impact the views perceived or expressed herein.

For and on behalf of the Board

Chennai Ashwin C Muthiah

28th May 2014 Chairman


Mar 31, 2013

To The Shareholders

The Directors present their 27th Annual Report on the business and operations of your Company and the Audited Statement of Accounts for the year ended 31st March 2013.

Financial Results

(Rs. in crore)

DESCRIPTION 2012-13 2011-12

Profi t Before interest & 43.83 66.69 depreciation

Interest 2.14 1.92

Depreciation 6.36 5.88

Profi t Before Tax 35.33 58.89

Provision for Taxation 8.02 15.21

Profi t After Tax 27.31 43.68

Cash Profit 34.38 49.87

Operational Highlights

During the year under review the operations of the Company were affected due to general economic slow-down aggravated by cut-throat competition from overseas polyol suppliers. On account of these, there was some setback in the operations vis a vis the performance in the last couple of years, resulting in lower production, sales and profi ts. The net profi t for the year was lower by about 37% at Rs. 27.31 crore against Rs. 43.68 crore in the previous year.

Availability of bio mass fuel for the Captive Power Plant (CPP) has become dearer due to spurt in demand for casuarina wood from paper mills and also similar power plants. Even at increased costs supplies are not forthcoming, forcing the Company to operate the CPP at lower loads. The Company is developing alternate fuels for the CPP to ensure operations at optimum load. Also, plans are afoot to purchase power through energy exchanges to meet the short-fall.

Creation of bulk storage facility for Propylene Oxide at Ennore Port is in progress and is expected to be operational during the 2nd quarter of FY 2013-14.

Financial Review

The year 2012-13 witnessed moderate changes in interest rates. The repo rate increases during the year 2011-12 resulted in steep increase in lending rates of banks and other operators. However, during the year under review, these were retained at the previous year''s level in the fi rst half and slightly brought down during the second half, to induce economic growth. On the forex front, there was a sharp decline in rupee value by about 6.7%. These resulted in marginal increase in the cost of funds. Also the investible surplus was signifi cantly lower due to decline in operations witnessed during the year and higher capital spending for creation of storage facilities.

The Company has been rated with CARE A (-) signifying ''low credit risk'' for long-term bank facilities and CARE A1 signifying lowest credit risk'' for short-term bank facilities .

Dividend

Your Directors recommend a 10 % dividend i.e. fi fty paise for every equity share of Rs. 5/- each fully paid-up, for the year 2012-13, aggregating to Rs. 8.60 crore, excluding dividend distribution tax.

Conservation of Energy

As required under Section 217(1)(e) of the Companies Act, 1956 (''the Act'') read with Rule-2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, to the extent applicable are annexed and form part of this report.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under report.

Human Resources

Your Company believes that achievement of its goals is reliant on the abilities of its workforce to convert the plans into actions. Therefore every effort is taken to retain the talents and also introduce newer ideas from the younger generation, for the success story to continue. Various HR initiatives are also taken to enhance the competency of the employees through inclusive decision making process by delegation, recognition, leadership development, etc. Your Company imparts need based training to its employees with special focus on youngsters, stimulating them to play an important role in shaping the Company''s future. The industrial relations have generally been cordial, except in relation to a wage dispute with the workmen from 2001, being contested in the Supreme Court. The Management''s efforts to settle the issue through dialogues have not been fruitful.

As on 31st March 2013, your company had 310 employees on its roll at different locations including Senior Management Personnel, Engineers, Technicians and Trainees.

Particulars of Employees

Details prescribed under Section 217 (2A) of the Act, read with Companies (Particulars of Employees) Rules, 1975, as amended are attached to this Report.

Directors

Mr. Babu K Verghese, Director resigned on 12th June 2013 and the Board wishes to place on record its appreciation for the contributions of Mr. Verghese during his tenure as a Director of the Company.

Board appointed Mr. Kulbir Singh as an Additional Director of the Company on 12th June 2013 and he holds offi ce till the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956 notice has been received proposing his appointment as Director of the Company at the ensuing AGM.

Purusuant to the provisions of the Companies Act 1956 and the Articles of Association of the Company, Mr. Sanjiv Ralph Noronha, Director retires by rotation and being eligible offers himself for re-election.

Director''s Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, it is hereby confi rmed:

a. in the preparation of the annual accounts for the fi nancial year ended 31st March 2013, 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 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 fi nancial year and of the profi t of the Company for the year under review.

c. the Directors had taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

d. the Directors had prepared the accounts for the fi nancial year ended 31st March 2013 on a "going concern" basis.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A Report on Corporate Governance is made a part of this Report and a Certifi cate from the Auditors regarding compliance with the requirements of Corporate Governance is attached to this report.

Details of Unclaimed Share Certifi cates

In accordance with the requirements of Clause 5A, shares remaining unclaimed even after 3 reminders to the concerned shareholders have been transferred and held in a separate demat account. As per the information provided by the Registrars and Transfer Agent, out of the 17,85,853 shares which remained unclaimed by 7,404 shareholders at the beginning of the year, 5,475 shares were released to 23 shareholders during the year. As at the end of the year 17,80,378 shares remained unclaimed by 7,381 shareholders.

Auditors

Your Company''s Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, retire at the conclusion of this Annual General Meeting and are eligible for re-appointment.

Cost Audit

Upto the year 2011-12, the Government of India had, through a specifi c order, mandated the Company to conduct audit of the cost accounts in respect of ''Chemicals'' manufactured by it and fi le the report as prescribed under the relevant rules. In compliance with the above, the Cost Audit Report for the year 2011-12 was fi led with the Central Government on 08-01-2013, against the extended due date of 28th February 2013.

From the year 2012-13, in terms of the general order issued by the Government, the cost accounts of the Company in respect of all the products manufactured are required to be audited and Mr. S Gopalan, Proprietor, S Gopalan & Associates, Cost Accountants, Chennai has been appointed as the Cost Auditors of the Company for the year 2012-13.

Adequacy of Internal Controls

Your company has in place adequate internal control systems combined with delegation of powers and periodical review of the process. The control system is also supported by internal audits and management reviews with documented policies and procedures.

Acknowledgement

Your Directors express their sincere gratitude to the Government of India, the Government of Tamilnadu, the Promoters and the consortium of Banks for the assistance, co-operation and support extended to the Company. The Directors thank the shareholders for their continued support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

Disclaimer

The Management Discussion and Analysis contained herein is based on the information available to the Company and assumptions based on experience in regard to domestic and global economy, on which the Company''s performance is dependent. It may be materially infl uenced by changes in economy, government policies, environment and the like, on which the Company may not have any control, which could impact the views perceived or expressed herein.

For and on behalf of the Board

Chennai Ashwin C Muthiah

12th June 2013 Chairman


Mar 31, 2012

The Directors present their 26th Annual Report on the business and operations of your Company and the Audited Statement of Accounts for the year ended 31st March 2012.

Financial Results (Rs. in crore)

Description 2011-12 2010-11

Profit Before Interest & 66.69 40.76 Depreciation

Interest 1.92 1.54

Depreciation 5.88 4.91

Profit Before Tax 58.89 34.31

Provision for Taxation 15.21 9.04

Profit After Tax 43.68 25.27

Cash Profit 49.87 31.60

During the year, the Company achieved a profit before tax of Rs. 58.89 crore and a profit after tax of Rs. 43.68 crore. Operational Highlights

During the year under review, the process units were continued to be operated at higher capacity and production was stepped up and streamlined. The Company embarked on capital proposals for adding certain balancing equipments and facilities to optimize the capacity utilization. The new polyol facility in Plant 2, which was commissioned in Feb. 2011, was operated satisfactorily during the year. The bio-mass fired 4.2 MW co-generation captive power plant also performed well, enabling the Company to overcome the problems on account of restrictions imposed on power consumption.

In order to ensure availability of sufficient quantities of Propylene Oxide (PO) for the derivative plants, your Company has entered into agreement for storage of imported PO in bulk, which is expected to be ready by early 2013.

During the year, 1,14,51,053 equity shares were transferred by SPIC to Dr. A C Muthiah and SIDD Life Sciences Private Limited as inter se transfer among promoters.

The Registrar of Companies, Tamil Nadu, Chennai accorded his approval for change of the name of the Company as Manali Petrochemicals Limited vide fresh certificate of incorporation dated 18th August 2011.

Dividend

Your Directors recommend a 12 % dividend i.e. sixty paise for every equity share of Rs. 5/- each fully paid-up, for the year 2011-12, aggregating to Rs. 10.32 crore, excluding dividend distribution tax.

Market Scenario

The Company achieved a turnover of Rs. 630.45 crore against Rs. 497.63 crore in FY 2010-11, an increase of 27°%. This was possible due to better selling price for the products and a marginal increase in sales volume.

During the year under review, the country witnessed a slow- down in economic growth and the manufacturing sector's performance was adversely affected due to various factors like high inflation, higher interest rates and frequent power cuts etc. Contrary to the general trend, the Indian Polyurethane market registered a positive growth in the last financial year. Sale of various grades of polyol like base polyol, slab stock polyol and elastomers improved considerably. However, reduction of duty on polyols to zero percent under Free Trade Agreements with ASEAN countries caused severe margin pressure on your Company. This was managed by a combination of better raw material sourcing and restructuring of the product portfolio.

Future Outlook and New Products

Indian Polyurethane industry's performance during 2007-2012 has been impressive with double-digit growth. The industry is expected to grow further in the medium term and your Company is confident of increasing its market share. Steps have also been initiated to foray into new segments by developing polyols for visco elastic and flexible slab stock memory foam application and to improve physical properties of moulded foam. In keeping with its commitment to environment, your Company is developing formulations that are more environment friendly and widely based on the international markets.

Opportunities and Threats

The Company is poised to increase its market share in the pharmaceutical and industrial application segments, where the value addition is more. However, as stated earlier, duty concessions for import of polyols and other products under the Free Trade Agreements with ASEAN countries have opened up stiff competition. The Company would have to operate with thin margins to ward off the competition. Protective actions are contemplated to overcome the situation through better value addition and new products.

Risks and Concerns

Availability of PO for the derivative plants at a reasonable cost could be a major risk, as the Company has facilities to produce only 36,000 tPa of PO with limited scope for expansion. Import of PO in ISO tankers would not be economical. However, on the storage facility of imported PO in bulk becoming operational, your Company would be in a position to meet its requirement of PO, without much difficulty and at a reasonable cost. Environment and Safety

The periodic surveillance audits of ISO 9001 and ISO 14000 have been done regularly and the re-certification audits were conducted in March 2012.

Conservation of Energy

As required under Section 217(1)(e) of the Companies Act, 1956 ('the Act') read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, to the extent applicable are annexed and form part of this report.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under report.

Industrial Relations

As on 31st March 2012, your company had 332 employees on its roll including Engineers, Technicians and Trainees. Wherever necessary, training is imparted at all levels.

Particulars of Employees

Details prescribed under Section 217 (2A) of the Act, read with Companies (Particulars of Employees) Rules, 1975, as amended are attached to this Report.

Directors

Mr. M Sivagnanam, Director resigned on 29th July 2011 and on 30th September 2011, Mr. G Ramachandran, Managing Director took early retirement and Mr. K K Rajagopalan, Director (Finance) retired. The Board wishes to place on record its appreciation for the services rendered by Mr. Sivagnanam, Mr.Ramachandran and Mr.Rajagopalan during their association with the Company.

Brig (Retd.) Harish Chawla, Mr. Sanjiv Noronha and Mr. Muthukrishnan Ravi were appointed as Additional Directors on 29th July 2011 to hold office till the ensuing Annual General Meeting (AGM). Pursuant to Section 257 of the Act, notices have been received from Members proposing their appointment as Directors of the Company at the ensuing AGM.

Mr. Muthukrishnan Ravi was also appointed as a Whole-time Director on the said date and he became the Managing Director of the Company from 1st October 2011. The proposal seeking approval of his appointment and remuneration is being placed before the Members at the ensuing AGM. Pursuant to the provisions of the Act and the Articles of Association of the Company Mr. T K Arun, Director retires by rotation and being eligible, offers himself for re-election.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Act, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the Financial Year ended 31st March 2012, 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 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 of the Company for the year under review;

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

(d) the Directors had prepared the accounts for the Financial Year ended 31st March 2012 on a going concern basis.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A Report on Corporate Governance is made a part of this Report and a Certificate from the Auditors regarding compliance with the requirements of Corporate Governance is attached to this Report.

Details of unclaimed Share Certificates

As required under Clause 5A of the Listing Agreement, three reminders were sent to the concerned shareholders during the year.

As per the information provided by the Registrars and Share Transfer Agent, the following are the details of unclaimed share certificates:

No. of No. of Particulars shareholders shares

Balance as on 01-04-2011 7,177 17,43,308

Add: Returned during the year 656 98,400

Less : Released during the year 429 55,855

Balance as on 31-03-2012 7,404 17,85,853

Dematerializing the balance shares remaining unclaimed by the shareholders and transfer of the same to a separate demat account in accordance with the requirements of the said Clause 5A is under process.

Cost Audit

The Government of India has ordered the Company to conduct audit of the cost accounts in respect of 'Chemicals' manufactured by the Company and accorded its approval for appointment of Mr. S Gopalan, Proprietor, S Gopalan & Associates, Cost Accountants, Chennai as the Cost Auditor of the Company for the year 2011-12. The Cost Audit Report for the year 2010-11 was filed with the Central Government on 17-08-2011.

Auditors

Your Company's Statutory Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, retire at the conclusion of this Annual General Meeting and are eligible for re-appointment.

Adequacy of Internal Controls

Your company has in place adequate internal control systems combined with delegation of powers. The control system is also supported by internal audits and management reviews with documented policies and procedures.

Acknowledgement

Your Directors express their grateful thanks for the assistance, co-operation and support extended to the Company by the Government of India, the Government of Tamilnadu, the Promoters and the consortium of Banks. The Directors wish to thank the shareholders for their continued support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

Disclaimer

The Management Discussion and Analysis contained herein is based on the information available to the Company and assumptions based on experience in regard to domestic and global economy, on which the Company's performance is dependent. It may be materially influenced by macro economic/environment changes, on which the Company may have no control and impact the views perceived or expressed herein.

For and on behalf of the Board

Chennai Ashwin C Muthiah

25th April 2012 Chairman


Mar 31, 2011

The Directors present their 25th Annual Report on the business and operations of your Company and the Audited Statement of Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS (Rs. in Crores)

DESCRIPTION 2010-11 2009-10

Profit Before interest & 40.76 35.54 Depreciation

Interest 1.54 1.50

Depreciation 4.91 4.04

Profit Before Tax 34.31 30.00

Provision for Taxation 9.04 8.94

Profit After Tax 25.27 21.06

Cash Profit 31.60 29.01

During the year, the Company achieved a profit before tax of Rs.34.31 Crores and a profit after tax of Rs. 25.27 Crores. The process units were continued to be operated at higher capacity. The new polyol plant at Plant-2 commenced production in Feb. 2011. The trend of the profits and sales turnover for the past few years is given in Page 4 of the Annual Report.

OPERATIONAL HIGHLIGHTS

During the year, the debottlenecked PG plants and the retrofitted PO plant were optimized and the production was stepped up and streamlined. The benefits of these augmentation schemes could be realized during the financial year. The new polyol plant train with a capacity of 17,000 MT per annum of polyol, was successfully commissioned in February 2011. The operation of the plant is being optimized. Thus, the production capacities of the PO, PG and polyol for the company has gone up to 36000 MT, 20000 MT and 50000 MT respectively. The bio-mass fired 4.2 MW co-generation captive power plant functioned to its best ability, thus alleviating problems posed by the restrictions on power supply.

Production was also fortified at Plant-2 with standby nitrogen plant and upgradation of the cooling water circulation system in view of the large augmented capacity of the process plants at that site. Sufficient storage tanks to handle the additional production have also been added.

Maximum utilization of the process plant can be achieved if sufficient quantities of imported PO is available, which is currently imported in ISO containers. Steps are being taken to install an import terminal at Ennore Port to import PO in bulk to improve availability of PO. Though the derivative plants of PG and polyol have capability to process 60,000 MT of PO per annum, the Company can produce only 36,000 MT per annum and hence arrangements are being made to import the balance.

During the year, 5,44,05,000 equity shares were transferred by SPIC to Dr. A C Muthiah and SIDD Life Sciences Private Limited as inter se transfer among promoters.

DIVIDEND

Your Directors recommend a 10 % dividend i.e. 50 paise for every equity share of Rs. 5/- each fully paid-up, for the year 2010-11, aggregating to Rs. 8.60 Crores, excluding dividend distribution tax.

MARKET SCENARIO

The market conditions in India continued to be good throughout the year. The polyurethane market improved considerably in India. Since our market share is less than 50% in all the segments, we sold all the quantities that we produced, comfortably. Scope exists for further improvement in market share with improved production capacities.

The international market also improved and hence better selling prices that prevailed during the year helped to improve profitability, inspite of increasing raw material costs.

During the year, the Company achieved a higher turnover of Rs. 496.72 Crores, an increase of 18 % over the previous year.

FUTURE OUTLOOK AND NEW PRODUCTS

Polyurethane industry is growing in excess of 20% in India. The automobile industry is growing phenomenally and India is becoming an export hub. Resulting from the expansion plans of auto companies and other PU industries, the 2nd tier market is expected to double within the next 5 years, and hence the outlook is good for the 3rd tier polyol & isocyanate manufacturers.

The multinational foam suppliers to auto companies are blending their formulations, and this has thrown open the possibilities for the Company to sell the base polyols directly to them without the need for completing the system with other chemicals / isocyanates. The unsaturated polyester industry and food / flavor industries are also growing in excess of 20%, and thus there is scope for expanding the Glycol facilities further.

OPPORTUNITIES AND THREATS

The various free trade agreements with ASEAN countries could pave way for large scale import of intermediate and finished products. However, it also gives the Company an opportunity to import the raw materials at concessional duties which would give it an edge in the market. The duty levels are already low and in view of the expansion we have completed and in view of the bulk storage tanks which we are planning, the threat and opportunities are likely to balance each other.

RISKS AND CONCERNS

Chennai Petroleum Corporation Ltd. being the sole supplier of propylene, even though is perceived as a big risk, their performance is consistent and has not posed any big constraint so far. However, the periodic long duration maintenance shutdown effected every alternate year would impact our operations and profitability. The PO import terminal planned by the Company would be of help in maintaining the operations without any shortfall.

ENVIRONMENT AND SAFETY

The periodic surveillance audits of ISO 9001 and ISO 14000 have been done regularly and the recertification audit is due in April 2011.

CONSERVATION OF ENERGY

As required under Section 217(1 )(e) of the Companies Act, 1956 read with Rule-2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, are annexed to and form part of this Report.

FIXED DEPOSITS

Your company has not accepted any deposits from the public during the year under report.

INDUSTRIAL RELATIONS

As on 31st March 2011, your company had 358 employees on its roll at different locations including Engineers, Technicians and Trainees. Wherever necessary, training is imparted at all levels.

PARTICULARS OF EMPLOYEES

None of the employees of the Company was in receipt of remuneration in excess of the amount prescribed by Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

DIRECTORS

Mr. N Suryanarayanan, Director resigned on 27th April 2011. The Board wishes to place on record its appreciation for the valuable services rendered by Mr. Suryanarayanan during his tenure as a Director of the Company.

Mr. M Sivagnanam and Mr. G Raghavendran, Directors retire at the forthcoming Annual General Meeting and are eligible for re-appointment. Mr. M Sivagnanam offers himself for re-election, but Mr. G Raghavendran is not seeking re-election.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

a) That in the preparation of the annual accounts for the Financial year ended 31st March 2011, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b) That the Directors had selected such 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 of the Company for the year under review.

c) That the Directors had 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 the Directors had prepared the accounts for the financial year ended 31st March, 2011 on a "going concern" basis.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Corporate Governance as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A Report on Corporate Governance is made a part of this Report and a Certificate from the Auditors of your Company regarding compliance with the conditions of Corporate Governance is attached to this report.

DETAILS OF UNCLAIMED SHARE CERTIFICATES

As per the information provided by the Registrars and Share Transfer Agent, 17,43,308 equity shares of Rs. 5 each are remaining unclaimed by 7,176 shareholders, for which they are in the process of sending reminders to the concerned shareholders as required under Clause 5A of the Listing Agreement. The shares in respect of the unclaimed share certificates would be dematerialized on completion of the prescribed process and dealt with in accordance with the requirements of the said Clause 5A.

COST AUDIT

The Government of India has ordered the Company to conduct audit of the cost accounts in respect of Chemicals manufactured by the Company and accorded its approval for appointment of M/s. S Gopalan & Associates, Cost Accountants, as the Cost Auditors of the Company for the year 2010-11.

AUDITORS

Your Companys statutory Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, retire at the conclusion of this Annual General Meeting and are eligible for re-appointment.

ADEQUACY OF INTERNAL CONTROLS

Your company has in place adequate internal control systems combined with delegation of powers. The control system is also supported by internal audits and management reviews with documented policies and procedures.

ACKNOWLEDGEMENT

Your Directors express their grateful thanks for the assistance, co-operation and support extended to the Company by the Government of India, the Government of Tamilnadu, the Promoters and the consortium of Banks. The Directors wish to thank the shareholders for their continued support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

DISCLAIMER

The Management Discussion and Analysis contained herein is based on the information available to the Company and assumption based on experience in regard to domestic and global economy, on which the Companys performence is dependent. It may be materially influenced by macro economic/environment changes, on which the Company may have no control and impacting the views perceived or expressed herein.

For and on behalf of the Board

ASHWIN C MUTHIAH CHAIRMAN

CHENNAI - 600 032 DATE :27th April 2011


Mar 31, 2010

The Directors present their 24th Annual Report on the business and operations of your company and the Audited Statement of Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS (Rs in Crores)

DESCRIPTION 2009-10 2008-09

Profit Before Interest and Depreciation 35,54 19,54

Interest 1.50 1.31

Depreciation 4.04 7.76

Profit Before Tax 30.00 10-47

Provision for Taxation 8.94 3.44

Profit After Tax 21.06 7.03

Cash Profit 29.01 1714

During the year, the Company achieved a profit before tax of Rs.30.00 Crores and a profit after tax of Rs.21.06 Crores. The main contributing factors for the better profits are higher capacity utilization, higher sales backed up by a favourable domestic demand. The trend of the profits and sales turnover for the past few years are as per graph on page 4. OPERATIONAL HIGHLIGHTS

Your company continued its efforts to reduce the cost of production and to improve the quality of the products by debottlenecking the facilities. This helped us to achieve better consumption norms. The efforts led to additional production without substantial increase in the consumption of utilities. During the year, the company achieved highest ever production and sales turnover so far recorded by the company. Ministry of Environment & Forest (MOEF), Government of India accorded permission for the expansion and based on which consent, Tamilnadu Pollution Control Boards (TNPCB) recognition for the additional capacity has also been obtained. Higher capacity utilization of plants has helped to lower specific consumption of key raw material and energy inputs.

The Bio-Mass Fired 4.2MW co-generation captive power plant successfully commissioned during the previous year, was helpful in mitigating the power restrictions during the current year. The captive power plant is being run at required capacity levels.

During the current year, the synthesis section of the propylene oxide plant of Plant-ll was retrofitted to reduce the solid and liquid effluents. While doing so, the production capability also improved and the retrofit could be completed with a marginal investment of Rs.10 Crores. The plant was commissioned in March 2010 and the full benefit of the project would accrue in the next financial year. The quality improvement programme, which was taken up last year in the propylene glycol plant of Plant-ll has resulted in a higher production levels. The polyol plant of our Plant-I has been debottlenecked to 25000 MTPA. The polyol plant of Plant-ll is being expanded by 17000 MTPA to 25000 MTPA. By the end of the next financial year the company will have capacities of 36000 MTPA of propylene oxide, 20000 MTPA of propylene glycol and 50000 MTPA of polyol. The additional propylene oxide required beyond our internal capability of 36000 MT, will be imported. DIVIDEND

Your Directors recommend a 7.5 % dividend i.e. Rs.0.375 for every equity share of Rs. 5/- each fully paidup, for the year 2009-10, aggregating to Rs.6.45 Crores. MARKET SCENARIO

Though the sale of propylene glycol was sluggish in the previous year due to heavy imports into India, the sale improved with the continued growth of

unsaturated polyester industries, food & flavour industries in India. Moreover limited availability of international products in India during the period aided in increasing the sale during the year.

The sale of slab stock polyol also continued to grow. Our market share is less than 50% leaving scope for further improvement. We could not substantially improve the sale of speciality polyol in view of very stiff competition from multinational companies and restricted buying by the user industries. We hope to improve in this area significantly in the coming years.

This higher quantum of sales of both slabstock polyols and propylene glycol increased your companys sales turnover to Rs.420 Crores in the current year from Rs.395 Crores in the previous year.

FUTURE OUTLOOK AND NEW PRODUCTS

The polyurethane industries is growing continuously. We are also expanding to maintain our market share. The bulk of the growth is in the PU slab stock area. The glycol market continued to grow in the unsaturated polyester industries and food & flavour industries. The major automobile manufacturers have started expanding their capacities in India and the exports are also on the rise. Similarly, the refrigerator market is also improving significantly thus presenting a good demand for PU chemicals. Your company is hopeful of improving its market share in these areas.

OPPORTUNITIES AND THREATS

Though the concessional duty levels accorded under Free Trade Agreements are a continuing threat, expanding markets are the opportunities, which will help the company to retain its position. Since the recessionary threat in other parts of the world is slowing / receding, it is generally expected that the price levels would return to normal, improving the profitability.

RISKS AND CONCERNS

Chennai Petroleum Corporation Ltd (CPCL) is the single source of supply of propylene. This is a big risk. Any outages of the propylene recovery plant can upset the production of your company. However, the chemical terminal at several ports would probably help your company to manage any unforeseen outages effectively and ensure continuous supply of products.

ENVIRONMENT AND SAFETY

Your company continues to maintain International Quality Standards. Periodic surveillance audit was conducted by auditors during December 09. Your company is planning to go for revised quality management system as per ISO 9001 - 2008 version. Certification audit in this regard will be done in the month of May 2010. Your company continues good performance in the area of safety. Recently Unit - II has obtained safety award from Tamil Nadu Government for highest reduction in accident frequency rate for the year 2006.

CONSERVATION OF ENERGY

As required under Sec.217(1)(e) of the Companies Act, 1956 read with Rule-2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, are as per Annexure forming part of this report. FIXED DEPOSITS

Your company has not accepted any deposits from the public during the year under report.

INDUSTRIAL RELATIONS

As of 31st March 2010, your company had 366 employees on its rolls including engineers and technicians recruited recently through training programmes. The fresh engineers / diploma / graduate degree holders, after

training will be inducted into permanent services of the company to fill up vacancies that arise due to resignations. PARTICULARS OF EMPLOYEES

A statement concerning employees as required by section 217 (2A) of the companies Act, 1956 is attached to this report.

DIRECTORS

Mr. B. Viswabarathy, Director resigned from the Board with effect from 7* October 2009 and Mr. T.K. Arun, General Manager & Secretary of TIDCO was nominated in his place with effect from 7th October 2009.

The Board wishes to place on record the valuable services rendered by Mr. B. Viswabarathy during his tenure as the Director of the company.

Mr N. Suryanarayanan, Chief Financial Officer, M/s Southern Petrochemical Industries Corporation Ltd., was appointed as a Director by the Members in the last AGM held on 17th September 2009.

Pursuant to the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr Babu K Verghese and Mr. K.K. Rajagopalan, Directors shall retire by rotation and being eligible, offer themselves for re-election.

DIRECTORS RESPONSIBILITY STATEMENT

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

(a) That in the preparation of the annual accounts for the Financial year ended 31st Mar 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) That the Directors had selected such accounting policies and applied them consistently and made judgements 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 of the Company for the year under review;

(c) That the Directors had 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 the Directors had prepared the accounts for the financial year ended 31st Mar, 2010 on a "going concern" basis.

CORPORATE GOVERNANCE

Your Company has complied with the requirements regarding Corporate Governance as required under Revised Clause 49 of the Listing Agreement entered into with the Stock Exchanges, where the Companys shares are listed. A Report on the Corporate Governance in this regard is made a part

of this Annual Report and a Certificate from the Auditors of your Company regarding compliance of the conditions of the Corporate Governance is attached to this report.

COMPULSORY DEMAT

As announced by SEBI vide its Circular Ref. No.SMDRP / POLICY / CIR-9 / 2000, dt. 16.2.2000, the shares of the Company are traded compulsorily in dematerialized form by all investors with effect from 8.5.2000. 50.77% of shares of your company have been dematted compared to 50.44% previous year.

LISTING OF EQUITY SHARES

Your Companys equity shares continued to be listed on The Stock Exchange, Mumbai and National Stock Exchange Ltd., Mumbai, during the year under report.

Your Company has initiated necessary action to delist its equity shares from the Calcutta Stock Exchange Association Ltd., pursuant to the resolution passed at the Annual General Meeting held on 25.9.2004.

COST AUDIT

The Government of India has ordered the Company to conduct audit of cost accounts in respect of Chemicals manufactured by the company and accorded approval for appointment of M/s. S Gopalan & Associates, Cost Accountants, appointed by the Company in this regard pursuant to Section 233B of the Companies Act, 1956, to conduct cost audit for the year 2009- 2010.

AUDITORS

Your Companys statutory Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, retire at the conclusion of this Annual General Meeting and are eligible for re-appointment.

ADEQUACY OF INTERNAL CONTROLS

Yourcompany has installed adequate internal control systems in combination with delegation of powers. The control system is also supported by internal audits and management reviews with documented policies and procedures.

ACKNOWLEDGEMENT

Your Directors express their grateful thanks for the assistance, co-operation and support extended to the Company by the Government of India, the Government of Tamilnadu, TIDCO, SPIC, the Promoter and the Consortium of Banks. The Directors wish to thank the shareholders for their continued and patient support.

The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees.

For and on behalf of the Board

CHANNAI-600 032 ASHWIN C MUTHIAH

DATE :20th April,2010 CHAIRMAN

 
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