Directors Report of Mysore Petro Chemicals Ltd.

Mar 31, 2018

DIRECTORS'' REPORT

To

The Members

Mysore Petro Chemicals Limited

The Directors have pleasure in presenting the Forty Eighth Annual Report together with the Audited Statements of Accounts and the Auditors Report of your company for the financial year ended 31^st March, 2018

The financial statements are prepared in accordance with Indian Accounting Standards ( Ind AS''). In accordance with the notification issued by the Ministry of Corporate Affairs your Company has adopted Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules with effect from 1^stApril, 2017.

1. FINANCIAL HIGHLIGHTS

The summary of Company''s financial performance is given below:

('' In lakhs]

Particulars	Year Ended 31st March, 2018	Year Ended 31st March, 2017
Total revenue	1,656.77	3,488.07
Profit before interest, depreciation & taxes	677.72	706.26
Depreciation	78.21	293.23
Finance cost	6.84	120.10
Profit before tax & exceptional item	592.67	292.93
Exceptional item	6,459.20	-
Provision for taxation	1,697.04	86.66
Profit after tax	5,354.83	206.27
Balance brought forward	1,867.06	1,748.23
Balance available for appropriation	7,221.89	1,954.50
Appropriation :
Proposed dividend for the financial year	131.67	65.83
Corporate dividend tax	27.07	13.41
Transferred to general reserves	-	-
Surplus retained in profit & loss account	7,159.54	1,867.09
EPS before exceptional item	9.97	3.13
After exceptional item	81.34	-

2. OPERATIONAL REVIEW

The Company is engaged in the trading of petrochemicals products. During the financial year 2017-18, total revenue amounted to Rs,1,656.77 lakhs as compared to Rs, 3,488.07 lakhs in the previous year. Due to exceptional gain of Rs, 6,459.20 lakhs on account of sale of Maleic Anhydride business, the Profit After Tax rose to Rs, 5,354.83 lakhs as compared to profit of Rs, 206.27 lakhs in 2016-17.

3. DIVIDEND

Your Directors are pleased to recommend dividend of Rs, 2/- (20%) per equity share of Rs, 10/each. The total outgo on account of dividend (including dividend distribution tax) for the current year amounts to Rs,158.74 lakhs (previous year Rs, 79.24 lakhs).

4. TRANSFER TO RESERVES

The undistributed profits amounting to Rs,7159.94 lakhs is proposed to be retained in the Statement of Profit & Loss.

5. DETAILS ABOUT CSR COMMITTEE, POLICIES, IMPLEMENTATION AND INITIATIVES

In accordance with the provisions of Section 135 of the Companies Act, 2013 ("the Act") and the Rules framed thereunder, the CSR Committee reviews and monitors the projects and expenditures incurred by the Company. The Company was not able to spend the amount of Rs, 12.52 lakhs towards CSR and proposes to carry forward the same. The Report on CSR are annexed to the Directors'' Report as "Annexure-A".

6. AUDITORS

a. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Makarand M Joshi and Associates, Practicing Company Secretaries (CP No. 3662) to conduct the Secretarial Audit of the Company for the Financial Year 2017-18. The said Report is annexed herewith as "Annexure-B".

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

b. STATUTORY AUDIT

M/s MSKA & Associates were appointed as Statutory Auditors of the Company by the members of the Company at the 47^th annual general meeting.

Pursuant to the amendment to Section 139 of the Act vide Companies (Amendment) Act, 2017, the proviso relating to the ratification of the appointments of the Statutory Auditors at every annual general meeting has been removed.

In accordance with the above provisions, the ratification of the appointments of the Statutory Auditors shall not be placed at the ensuing annual general meeting.

7. DIRECTORS AND KEY MANAGERIAL PERSONNELS

a) Appointment/Re-Appointment

On the recommendation of the Nomination & Remuneration Committee and in accordance with the provision of the Act read with Rules framed thereunder, the Board of Directors appointed Shri M M Dhanuka as Managing Director & CEO of the Company for a period of 3 years with effect from 14^th August, 2018; subject to the approval of the Members.

In accordance with the provisions of Section 152 of the Act, read with Companies (Management & Administration) Rules, 2014, Shri Nikunj Dhanuka retires by rotation at the ensuing Annual General Meeting of the Company and offers himself for reappointment.

As stipulated under the Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), brief resume of the Directors proposed to be appointment/re-appointed is given in the Notice convening 48^th Annual General Meeting.

b) Change in Key Managerial Personnel

Shri Anand Kadkol tendered his resignation from the post of Company Secretary w.e.f 19^th January, 2018. The vacancy caused by his resignation was filled by the appointment of Ms. Pragati Nathani w.e.f 14^th February, 2018.

c) Number of Meetings of the Board

During the year, four Board Meetings were convened and held, which are disclosed in the Report on Corporate Governance forming part of the Annual Report of the Company

d) Performance Evaluation of the Board

As stipulated by the Code of Independent Directors pursuant to Act and the SEBI Listing Regulations, a separate meeting of the Independent Directors of the Company was held to review the performance of Non-independent Directors (including the Chairman) and the entire Board. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.

All Independent Directors have given their respective declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.

8. DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Act we state:

a) that in the preparation of the annual financial statements for the year ended 31^st March 2018, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March 2018 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken 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/detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

9. TRANSFER OF SHARES TO IEPF

In compliance with the provisions of Section 124(6) of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules") and amendments thereto, during the year the Company has transferred 84,803 shares to IEPF Authority in respect of shares on which dividend has not been paid or claimed for seven consecutive years.

Members whose shares are so transferred can claim their dividend and shares from the IEPF authority by filing Form IEPF-5 at www.iepf.gov.in. Member should also note that only one consolidated claim can be filed in a financial year as per the IEPF Rules. Members are advised to claim any un-encashed dividends.

The Company Secretary of the Company has been designated as the Nodal Officer who can be contacted for any guidance/assistance to claim the dividend and shares from IEPF Authority.

10. PHTHALIC ANHYDRIDE (PA) PLANT

The PA Plant at Raichur, Karnataka was closed down in 2013 and the final settlement with some of the workmen is in progress.

11. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed ''1,697.04 lakhs to the exchequer on account of income tax, GST, service tax etc.

12. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Act and Regulation 23 of SEBI Listing Regulations during the financial year were in the ordinary course of business and on an arm''s length basis and do not attract the provisions of Section 188 of the Act.

The details as required to be provided under Sec 134 of the Act are disclosed in Form AOC-2 as "Annexure-C'''' and forms part of this report.

13. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 is annexed herewith as "Annexure-D" to the Directors Report.

14. VIGIL MECHANISM

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the Company''s website www.mysorepetro.com. There was no fraud or irregularity noticed during the year under review.

15. PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

The Company has not given any guarantee or advanced any loans pursuant to the provisions of Section 186 of the Act. Details of investments made by the Company have been given in the notes to the Financial Statements.

16. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. No amount on account of principal or interest was outstanding as at 31^st March, 2018.

17. PARTICULARS OF EMPLOYEES AND REMUNERATION

During the year, there are no employees who are in receipt of the remuneration exceeding the limit specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information relating to remuneration in respect of directors/employees of the Company as required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided to the members upon request.

18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption is not applicable to the Company. During the year under review, the foreign exchange outgo was '' 321.61 lakhs (previous year '' 466.82 lakhs)

19. REPORT ON CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance. The disclosures as required under Schedule V to the SEBI Listing Regulations together with a certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance forms part of to this Annual Report.

20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN

The Company has adopted a policy on prevention and redressal of sexual harassment at work place in accordance with the provisions of Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. No complaints of sexual harassment were received during the year.

21. CAUTIONARY STATEMENT

Statements made in this report describes the Company''s objectives, projections and estimates and may be forward looking and are stated as required by applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company''s operations include market conditions, Government regulations, exchange rate fluctuations, interest and other costs.

22. ACKNOWLEDGEMENT

The Directors gratefully acknowledge all stakeholders of the Company viz. customers, members, banks etc. for their continued support.

For and on behalf of the Board of Directors

M M Dhanuka

Mumbai Chairman & Managing Director

29^th May, 2018 DIN – 00193456

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Mar 31, 2016

DIRECTORS’ REPORT & MANAGEMENT DISCUSSION AND ANALYSIS

To,

The Members

The Directors hereby present the Forty Sixth Annual Report along with Audited Financial Statements of the Company for the financial year ended 31^st March, 2016.

1. Financial Results

Rs,in Lacs

	2015-2016 |	2014-2015
Revenue from Operations (Gross)	2,621.86	3,696.73
Less: Excise duty	293.26	409.99
Revenue from Operations (Net)	2,328.60	3,286.74
Other Income	100.26	94.94
Total Revenue	2,428.86	3,381.68
Gross Profit	713.15	1,642.31
Less:
Finance Cost	76.68	135.14
Depreciation and Amortization expenses	276.81	273.98
Profit before Tax	359.66	1,233.19
Tax Expenses:
- Current Tax	167.20	462.00
- Deferred Tax	—	49.65
Profit for the year	192.46	721.54
Less: Appropriations
Transfer to General Reserve		200.00
Proposed Equity Dividend	65.84	131.67
Tax on Proposed Dividend	13.40	27.56
Balance brought forward from previous year	1,515.85	1,153.54
Balance carried forward to Balance Sheet	1,629.07	1,515.85

2. Operational Review

The Gross Sales amounted to Rs, 2,621.86 lacs (previous year Rs, 3,696.73 lacs) and Net Sales was Rs, 2,328.60 lacs (previous year Rs, 3,286.74 lacs). After providing for interest, finance charges and Depreciation, the Net Profit substantially declined to Rs, 192.46 lacs as against Rs, 721.54 lacs in the previous year 2014-2015. There was a steep fall in international crude oil price, due to which the prices of downstream products including Maleic Anhydride (MA) witnessed sharp fall.

The sales realization was low due to continuous fall in MA prices especially in the second half of the year. Imports of MA has increased off late, however with the rise in crude oil prices since February 2016, the MA prices improved and the trend is likely to continue in the current year.

The PA Plant at Raichur, Karnataka was closed since July, 2013 due to economic unavailability and the management staff and a few workmen accepted the retrenchment compensation offered by the Company. 52 (fifty two) workmen have not accepted the offer and have approached the Labour Department, Government of Karnataka for further demands and the matter is pending before the Industrial Tribunal, Hubballi, Karnataka. The management is awaiting the outcome of the Tribunal''s judgment in this regard.

Meanwhile the Company has filed a Writ Petition in the Hon''ble High Court of Karnataka, Bangalore, Gulbarga Bench. The hearing date is awaited.

3. Dividend

Your Directors are pleased to recommend dividend of Rs, 1/- (10 %) per equity share of Rs, 10/- each. The total outgo on account of dividend for the current year amounts to Rs, 79.24 lacs as against Rs, 159.23 lacs in the previous year (including dividend distribution tax).

4. Share Capital & Finance

4.1 Share Capital

The paid up Equity Share Capital as on 31^st March, 2016 was Rs, 658.76 lacs. During the year under review, the Company has neither issued any shares nor granted any stock options or sweat equity. The Promoter shareholding as on 31^st March, 2016 is 72.99%.

4.2 Finance

The Company does not have any secured debts as on date.

4.3 Fixed Deposits

The Company has not accepted any Fixed Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed there under.

4.4 Particulars of Loans, Guarantees or Investments

The Company has not given any loans or guarantees within the meaning of the provisions of Section 186 of the Companies Act, 2013.

The details of the investments made by the Company are given in the notes to the Financial Statements.

5. Taxes and Duties

The Company has contributed Rs, 533.89 lacs (Rs, 971.17 lacs) to the Central and State exchequer by way of Excise Duty, Sales Tax, Income Tax and Professional Tax.

6. Economic scenario, opportunities, concerns and future outlook

The Indian economy enjoyed a relatively stable macroeconomic scenario during 2015 as compared to many other countries in the world. The GDP is expected to be around 7.6% in the current year 2015-16 amid expectations of higher investments in infrastructure and industry. Notwithstanding some slackening in a few sectors, manufacturing growth in 2015-16 was strong at 7.5% as compared to 6% growth in 2014-15. This spurt in manufacturing resulted in higher industrial production and revival in overall consumer demand. The outlook for India''s national economy in the year 2016 and beyond shows a strong emerging potential.

There is steady rise in demand for MA in view of the growth in user industries viz. Resins, paints, plasticizers and newer applications of MA in certain user industries. The performance since the last quarter of the year has improved and continues during the current quarter and hence the Company is cautiously optimistic about the performance in the current financial year. The Company is the only producer of MA in India and sells its entire produce indigenously to local consumers.

The performance depends upon uninterrupted supply of Wash Water from IGPL. The Governments import policies and other environmental issues are the other areas which is a cause of concern. The Company''s efforts in better working capital management and expected rise in demand will help to improve our operations.

7. Corporate Social Responsibility (CSR)

The Corporate Social Responsibility (CSR) Policy of the Company aims to bring a difference in the lives of the needy, under privileged persons of the society including children, women and senior citizens. During the year, the CSR Committee of the Company directed its spending on the sectors primarily in healthcare and education in accordance with its CSR Policy.

The Report on CSR activities is annexed herewith as "Annexure A".

8. Risk Management

The Company manufactures a single product MA which is recovered from the Wash Water made available by IGPL. MA is sold in local markets and there are no exports. Hence there are only the general business risks which are inherent to any business. The Board of Directors do a periodic assessment of risks through properly defined frame work and its mitigation resulting in minimization of risks.

The key business risks identified by the Company and its mitigation plans are as under:

a. Technical/Operational risk

During the year under review the MA Plants operations were smooth except on certain occasions due to minor technical problems and less availability of Wash Water from IGPL. The maintenance department at the Plant takes care of the day to day maintenance. The Company''s Plants are adequately insured viz. Fire Policy, Loss of Profit Policy etc.

b. Exchange rate risk ( Procurement of raw material and sale of finished goods)

Wash Water is supplied from IGPL Plants for recovery of MA and the product is sold locally. Hence there is no exchange rate risk for the product. There are no forex transactions and hence there is no exchange rate risk.

c. Interest rate risk

The Company does not have any secured debts from Banks/Institutions. There are only unsecured debts from group Companies. Interest as per Bank rates is paid regularly to the Companies from whom inter-corporate loans are accepted. The Company reviews the position on regular basis and keeps the loan/interest cost at minimum level.

d. Economic and Geo Political risk

The political situation and the Government policies viz. import duty, taxes etc. and the international situation have an impact on the overall corporate growth. There was a steep fall in the international crude oil price from a high of about US$ 115 to US$ 28 during the past one year due to which all the downstream petro products including MA witnessed a sharp fall in the prices. The Company keeps abreast with the domestic and international economic developments and works on the strategies favorable to the Company. The Company maintains minimum inventory levels of finished goods in order to minimize the loss due to external factors.

9. Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the Company''s website www.mysorepetro.com. There was no fraud or irregularity noticed during the year under review.

10. Directors

Shri. Nikunj Dhanuka, Director retires by rotation and being eligible has offered himself for re-appointment.

The Company has received necessary declarations from all Independent Directors of the Company as required under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013.

10.1 Board Evaluation

As mandated under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the annual performance evaluation of the Directors individually vis-a-vis the Board and its committees have been carried out during the year. The manner of such evaluation has been disclosed in the Corporate Governance Report.

10.2 Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and determination of their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.

10.3 Meetings

During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of the same are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act.

11. Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed there under -

1. Mr. M M Dhanuka, Managing Director & CEO

2. Mr. Paras Jain, Chief Financial Officer

3. Mr. Anand Kadkol, Company Secretary & Compliance Officer

There are no changes in the Key Managerial Personnel during the year under review.

12. Directors’ responsibility statement

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Companies Act, 2013 we state:

a) that in the preparation of the annual financial statements for the year ended 31^st March 2016, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March 2016 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

13. Related Party Transactions

The Company has certain existing long term related party transactions which are on arm''s length basis and in the ordinary course of business. In terms of Regulations 23(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all existing material related party contracts entered into prior to the date of notification of these regulations and which continues thereafter shall require approval of the shareholders at the genereal meeting.

Accordingly the resolution for material related party transaction is placed at the forthcoming Annual General Meeting for approval of the shareholders. Information on Related Party Transactions are given in Annexure ‘E''.

14. Auditors

14.1 Statutory Auditors

M/s. Hariharan and Company, Chartered Accountants, Bengaluru (Firm''s Registration No. 001083S) were appointed as Statutory Auditors in the last Annual General Meeting (AGM) to hold office until the conclusion of the 47^th AGM of the Company to be held in the year 2017. The said appointment was subject to the ratification by the Members at every AGM till the expiry of their present tenure. The Auditor has provided a written confirmation to the effect that their appointment, if ratified, would be in conformity with the limits specified in Section 141(3) (g) of the Companies Act, 2013. As required under Regulation 33 of the SEBI Listing Regulations, the Statutory Auditor has also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI).

The Members are requested to ratify the appointment of the Auditors as aforesaid and fix their remuneration. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

14.2 Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Makarand M Joshi and Associates, Practicing Company Secretaries (CP No. 3662) to conduct the Secretarial Audit of the Company for the Financial Year 2015-16. The said Report is annexed herewith as "Annexure B".

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

15. Listing of Shares

Your Company''s shares are listed on BSE Limited (BSE) under Scrip Code No. 506734. The ISIN code is INE741A01011.

16. Corporate Governance

The disclosures as required under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are attached and forms part of this report.

17. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure C".

18. Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is annexed herewith as "Annexure D".

19. Internal Control System

The Company has internal controls commensurate with the size of its business and has established framework of internal controls to ensure that the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Company is following all the Accounting Standards for properly maintaining the books of accounts and the reporting of financial statements. The Company has appointed the Internal Auditors to review various areas of the operations of the Company. The audit reports are reviewed by the management and the Audit Committee of the Board and corrective actions are taken by the Company when needed.

20. Human Resource Development/Industrial Relations

The PA Plant at Raichur, Karnataka has closed down its operations since July, 2013 and the settlement with the workers is in progress.

Industrial relations continued to remain cordial at the manufacturing unit at Taloja, Maharashtra.

21. Cautionary Statement

Statements made in this report describes the Company''s objectives, projections and estimates and may be forward looking and are stated as required by applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company''s operations include market conditions, Government regulations, exchange rate fluctuations, interest and other costs.

22. Particulars of Employees

During the year, there are no employees who are in receipt of the remuneration exceeding the limit specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information relating to remuneration in respect of directors/employees of the Company as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided to the members upon request.

23. Acknowledgements

Your Directors sincerely thank the various Central and State Government Departments and various Organizations for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for their excellent support. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board M M Dhanuka

Mumbai Chairman & Managing Director

20^th May, 2016

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Mar 31, 2015

Dear Members,

The Directors hereby present the Forty Fifth Annual Report alongwith Audited Financial Statements of the Company for the financial year ended 31st March, 2015.

1. Financial Results

Rs. in Lacs 2014-2015 2013-2014

Revenue from Operations (Gross) 3,696.73 4,474.78

Less: Excise duty 409.99 482.26

Revenue from Operations (Net) 3,286.74 3,992.52

Other Income 94.94 6.35

Total Revenue 3,381.68 3,998.87

Gross Profit 1,642.31 1,041.60

Less:

Finance Cost 135.14 246.30

Depreciation and Amortisation expenses 273.98 352.59

Profit/(Loss) before Tax 1,233.19 442.71

Tax Expenses:

- Current Tax 462.00 68.55

- Deferred Tax 49.65 36.84

Profit for the year 721.54 337.32

Less: Appropriations

Transfer to General Reserve 200.00 100.00

Proposed Final Equity Dividend @20% 131.67 98.75

Tax on Proposed Dividend / earlier year 27.56 16.02

Balance brought forward from previous year 1,153.54 1,030.99

Balance carried forward to Balance Sheet 1,515.85 1,153.54

2. Operational Review

The Company's Maleic Anhydride (MA) Plant at Taloja, Maharashtra operated uninterruptedly during most part of the year. The Net Sales Turnover was Rs. 3,286.74 lacs during the year as against Rs. 3,992.52 lacs during the previous year 2013-2014. Inspite of rise in production, the sales turnover was less due to fall in sale price of MA during the third quarter of the year as a result of the steep fall in the international crude oil prices, due to which there was equal fall in the prices of the downstream petro products including MA. The production was affected during October 2014 due to less Wash Water available from M/s. I G Petrochemicals Limited (IGPL) due to stoppage of one of its Plant for change of Catalyst. However the Net Profit for the year was substantially higher at Rs. 721.54 lacs as against Rs. 337.32 lacs in the previous year 2013-2014. This was on account of better realization on sales and reduction in Finance and other costs and minimum overheads of the closed Phthalic Anhydride (PA) Unit at Raichur, Karnataka.

3. Dividend

Your Directors are pleased to recommend dividend of Rs. 2/- (20%) per equity share of Rs. 10/- each. The total outgo on account of dividend for the current year amounts to Rs. 159.23 lacs,( including dividend distribution tax) as against Rs. 114.77 lacs (including dividend distribution tax).

4. Share Capital

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 658.76 lacs. During the year under review, the Company has neither issued any shares nor granted any stock options or sweat equity. The Promoter shareholding as on 31st March, 2015 is 72.99%.

5. Particulars of Loans, Guarantees or Investments

Details of the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

7. Fixed Deposits

The Company has not accepted any Fixed Deposits during the year. However in view of the repayment of the Working Capital loan of The Saraswat Co-operative Bank Ltd. certain loans by the relatives of Directors were considered as deposits amounting to Rs. 499.50 lacs and were repaid in full before the stipulated period of one year as per the provisions of Section 74(b) of the Companies Act, 2013.

8. Risk Management

The Company manufactures a single product MA which is recovered from the Wash Water made available by IGPL. Hence there are only the general business risks which are inherent to any business. The Board of Directors do a periodic assessment of risks through properly defined frame work and its mitigation resulting in minimization of risks.

The key business risks identified by the Company and its mitigation plans are as under:

a. Technical/Operational risk

During the year under review the MA-1/2/3 Plants operations were smooth except on certain occasions due to minor technical problems and less availability of Wash Water from IGPL. The maintenance department at Taloja Plant takes care of the day to day maintenance. The Company's Plants are adequately insured viz. Fire Policy, Loss of Profit Policy etc.

b. Exchange Rate risk ( Procurement of Raw material and sale of finished goods)

Wash Water is supplied from IGPL Plants for recovery of MA and the product is sold locally. Hence there is no exchange rate risk for the product. There are no forex transactions and hence there is no exchange rate risk.

c. Interest rate risk

The Company does not have any secured debts from Banks/Institutions. There are only unsecured debts from group Companies. Interest as per Bank rates is paid regularly to the Companies from whom inter-corporate loans are accepted. The Company reviews the position on regular basis and keeps the loan/interest cost at minimum level.

d. Economic and Geo Political risk

The political situation and the Government policies viz. import duty, taxes etc. and the international situation have an impact on the overall corporate growth. There was a steep fall in the international crude oil price from a high of about 115 US$ to 45 US$ during the the period September 2014 to January 2015 due to which all the downstream petro products witnessed a sharp fall in the prices. The Company keeps abreast with the domestic and international economic developments and works on the strategies favourable to the Company. The Company maintains minimum inventory levels of finished goods in order to minimize the loss due to external factors.

9. Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

10. Directors

The Board of Directors of the Company, pursuant to the recommendations of the Nomination and Remuneration Committee, in its meeting held on 17th July, 2015 revised the remuneration payable to Shri M M Dhanuka w.e.f. 1st July, 2015 and also modified the term of his appointment to expire on 30th June, 2018 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Based on the recommendation of the Nomination and Remuneration Committee the Board of Directors appointed Smt. Uma Acharya (DIN 07165976) as Additional Independent Director effective 25th May, 2015. She has given declaration that she meets the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 ("the Act") and Clause 49 of the Listing Agreement. In terms of sections 149, 152, 161, Schedule IV and applicable provisions, if any, of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of your Company and are not liable to retire by rotation. Accordingly it is proposed to appoint Smt. Uma Acharya as Independent Director of your Company up to five (5) consecutive years i.e. upto 24th May, 2020.

All Independent Directors have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Shri. S N Maheshwari, Director retires by rotation and being eligible has offered himself for re-appointment.

10.1 Board Evaluation

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the working of the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

10.2 Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and determination of their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.

10.3 Meetings

During the year four Board Meetings and equal number of Audit Committee Meetings were convened and held. The details of the same are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act.

11. Directors' responsibility statement.

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Companies Act, 2013 we state:

a) that in the preparation of the annual financial statements for the year ended 31st March 2015, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2015 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

12. Related Party Transactions

The Company has certain long term related party transactions which are on arm's length basis and in the ordinary course of business. During the year under review, there were no related party transactions within the meaning of Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of the Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. The Board has framed a policy on Related Party Transactions which is hosted on the Company's website www.igpetro.com.

13. Auditors

13.1 Statutory Auditors

The Company's Auditors, M/s. Hariharan and Company, Chartered Accountants, Bengaluru (Firm's Registration No. 001083S) retire at the ensuing Annual General Meeting and are eligible for re-appointment for the financial year 2015-2016. As per the requirement of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Hariharan and Company that their appointment, if made, would be in conformity with the limits specified in the said section. Also they have confirmed their eligibility under Section 141 of the said Act and the Rules framed there under for re-appointment as Auditors of the Company. As required under Clause 49 of the listing agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Your Directors recommend their re-appointment as the Statutory Auditors to hold office for a term of two consecutive years from the conclusion of this Annual General Meeting (AGM) until the conclusion of the 47th AGM of the Company to be held in the year 2017 subject to the ratification of their appointment at the next AGM to be held in the year 2016.

13.2 Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, ("Said Rules") 2014, the cost records by the Company in respect of Maleic Anhydride is required to be maintained. However Cost Audit is not required as per the said Rules from the financial year 2014-15.

The Cost Audit Report for the financial year 2013-2014 was filed with the Ministry of Corporate affairs in the stipulated time on 25.09.2014.

13.3 Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Makarand M Joshi and Associates, a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for the Financial Year 2014-15. The said Report is annexed herewith as "Annexure A".

The Company has appointed a Woman Director on Board w.e.f. 25.5.2015 and hence the Observations made by the Secretarial Auditors in this regard is resolved.

14. Listing of Shares

Your Company's shares are listed on BSE Limited (BSE) under Scrip Code No. 506734. The ISIN code is INE741A01011.

15. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

16. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure B".

17. Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual return in Form MGT-9 is annexed herewith as "Annexure C".

18. Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office/Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

19. Acknowledgements

Your Directors sincerely thank the various Central and State Government Departments and various Organizations for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for their excellent support. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board

M M Dhanuka Mumbai Chairman & Managing Director 17th July, 2015

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Mar 31, 2014

Dear Members,

The Directors hereby present the Forty Fourth Annual Report alongwith audited Accounts of the Company for the financial year ended 31st March 2014.

1. Financial Results

Rs. in Lacs

2013-2014 2012-2013

Revenue from Operations (Gross) 4,474.78 14,922.52

Less: Excise Duty 482.26 1,648.17

Revenue from Operations (Net) 3,992.52 13,274.35

Other Income 6.35 23.69

3,998.87 13,298.04

Gross Profit 1,041.60 943.93

Less:

Finance Cost 246.30 319.64

Depreciation and Amortisation Expenses 352.59 318.49

Profit / (Loss) before Tax 442.71 305.80

Tax Expenses:

- Current Tax 68.55 92.39

- Deferred Tax 36.84 9.19

Profit/(Loss) for the year 337.32 204.22

Less: Appropriations -

Transfer to General Reserve 100.00 —

Proposed Final Equity Dividend 98.75 —

Tax on Proposed Dividend 16.02 —

Balance brought forward from previous year 1,030.99 826.77

Balance carried forward to Balance sheet 1,153.54 1,030.99

2. Financial Performance

The Phthalic Anhydride (PA) Plant at Raichur, Karnataka operated for a few days during April 2013 with a production of 480 MT. The Plant was permanently closed down w.e.f. 16th July 2013.

The Maleic Anhydride (MA) Plant at Taloja, Maharashtra operated uninterruptedly during most part of the year. The production was 2916 MT. during the year 2013-2014 as against 2486 MT. in the previous year 2012-2013.

The Net Sales turnover was Rs. 3,992.52 Lacs during the year as against Rs. 13,274.35 Lacs (including PA sales) during the previous year 2012-2013. The reduction in sales was due to closure of PA Plant at Raichur during July 2013.

Profit Before Interest & Tax (PBIT) was Rs. 689.01 Lacs as against Rs. 625.44 Lacs and after accounting for interest and tax there was a Net Profit of Rs. 337.32 Lacs as against Rs. 204.22 Lacs in the previous year 2012-2013.

3. Dividend

The Directors are pleased to declare a dividend of Rs. 1.50 per share (15 %) (Previous year Rs. Nil) for the year under review. The total dividend payout for 2014 is Rs. 98.75 Lacs. The Dividend Distribution Tax borne by the Company will amount to Rs. 16.02 Lacs.

4. Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

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

b) appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and of the profit of the Company for the year ended on that date;

c) proper and sufficient care has been taken 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/ detecting fraud and other irregularities;

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

5. Fixed Deposits

Fixed Deposits amounting to Rs. 1 (one) Crore was repaid during June 2013 alongwith interest.

6. Directors

Shri Nikunj Dhanuka retires by rotation and being eligible has offered himself for reappointment.

In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent directors can hold office for a term of up to five (5) consecutive years on the Board of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Shri Shrikant Somani, Shri M M Jayakar and Shri Anil Kochar as Independent Directors of your Company up to five (5) consecutive years for the term up to the conclusion of the 49th Annual General Meeting of the Company in the calendar year 2019.

7. Particulars of Employees

There is no employee drawing the requisite remuneration, in terms of Section 217(2A) of the Companies Act, 1956.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars with respect to conservation of energy etc. required as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto.

9. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate Section on Corporate Governance practices followed by the Company, together with a certificate from the Company''s Auditors confirming compliance, is set out in the Annexure forming part of this Report.

10. Auditors and Audit Report

The Company''s Auditors, M/s. Hariharan & Co., Chartered Accountants, Bengaluru retire at the ensuing Annual General Meeting and are eligible for reappointment for the financial year 2014-15. As per the requirement of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Hariharan & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section. Your Directors commend their appointment for the ensuing year.

11. Cost Auditors

As per the requirements with the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956 your Company has been carrying out an audit of cost records relating to Phthalic Anhydride and Maleic Anhydride every year.

The Company has appointed M/s. Krishna S & Associates, Cost Accountants, Mumbai, as Cost Auditors to audit the cost accounts of the Company''s Maleic Anhydride Plant for the financial year 2014-15.

The Cost Audit Report for the financial year 2012-13 was filed with the Ministry of Corporate Affairs on 27th September 2013.

12. Acknowledgement

The Directors express their appreciation for the contribution made by the employees in the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

For and on behalf of the Board

M M Dhanuka Mumbai Chairman & Managing Director 23rd May, 2014

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Mar 31, 2012

The Directors hereby present the Forty Second Annual Report along with audited Accounts of the Company for the financial year ended 31 March 2012.

1. Financial Results

Rs.in lacs

2011-2012 2010-2011

Revenue from Operations (Gross) 8,109.18 8,560.64

Less: Excise Duty 767.16 800.87

Revenue from Operations (Net) 7,342.02 7,759.77

Other Income 74.37 26.09

7,416.39 7,785.86

Profit Before Finance Cost, Depreciation and Tax Expenses 425.73 370.68

Less:

Finance Cost 274.49 279.07

Depreciation and Amortization Expenses 443.07 472.16

Profit/(Loss) before Taxation (291.83) (380.55)

Tax Expenses

- Deferred Tax 134.27 -

Profit / (Loss) after Taxation (426.10) (380.55)

2. Financial Performance

The production of Ophthalmic Anhydride (PA) at Raichur, Karnataka for the year was 6498 MT at 54.15% as against 9452 MT at 78.76% during the previous year 2010-2011. The production was severely affected due to stoppage of PA Plant on a few occasions during June-July 2011 for change of Catalyst and further during November 2011 to mid February 2012 due to certain technical faults at Plant and adverse market conditions. The production of Malefic Anhydride at Taloja, Maharashtra was 2636 MT as against 2756 MT during the previous year 2010-2011. The Net Sales Turnover of the Company was lower at Rs.7,342.02 lacs as against Rs. 7,759.77 lacs during the previous year 2010-2011. Profit/(Loss) before Interest and tax was Rs.(17.34) lacs as against Loss of Rs.(101.48) lacs during the previous year. After taking into account the Interest and provision for tax there was a Net Loss of Rs. (426.10) lacs as against Loss of Rs.(380.55) lacs in the previous year.

4. Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

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

b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31 st March 2012 and of the loss of the Company for the year ended on that date.

c) proper and sufficient care has been taken 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/ detecting fraud and other irregularities.

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

5. Fixed Deposits

Fixed Deposit amounting to Rs 1 crore from private sources matured on 22nd November 2011 and have been renewed for a further period of one year.

6. Directors

Shri Nikunj Dhanuka and Shri M M Jayakar, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

7. Particulars of Employees

There is no employee drawing the requisite remuneration, in terms of section 217(2A) of the Companies Act, 1956.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Particulars with respect to conservation of energy etc. required as per section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto.

9. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report together with the Auditors' Certificate on compliance of the conditions of Corporate Governance form part of this Annual Report.

10. Auditors

The Company's Auditors, M/s. Hariharan & Company, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors commend their appointment for the ensuing year.

11. Cost Auditors

As per the requirement of the Central Government and pursuant to Section 233B of the Companies Act, 1956. your company carries out an audit of cost records relating to Phthalic Anhydride/Malefic Anhydride every year. Subject to the approval of the Central Government, the Company has appointed M/s. S. K. Agarwal & Associates, Cost Accountants, as Cost Auditors to audit the cost accounts of the Company for the financial year 2011-12.

The Cost Audit report for the Financial year 2010-2011 was filed with the Ministry of Corporate Affairs within the stipulated time.

12. Acknowledgement

Your Directors wish to thank the Government Authorities, Financial Institutions, Shareholders and Bankers for their continued support. They wish to place on record their appreciation for the dedicated Seneca of the employees at all levels.

For and on behalf of the Board

M M Dhanuka

Mumbai Chairman & Managing Director

15th May, 2012

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Mar 31, 2011

Dear Members,

The Directors hereby present the Forty-first Annual Report along with audited Accounts of the Company for the financial year ended 31 March, 2011.

1. Financial Results

Rs in'000

2010-2011 2009-2010

Gross Sales 856,029 893,036

Less : Excise Duty 80,087 69,372

Net Sales 775,942 823,664

Other Income 2,644 6,278

778,586 829,942

Gross Proft 37,068 71,178 Less :

Interest & Finance Charges 27,907 23,016

Depreciation/Amortisation 47,216 46,695

Proft/(Loss) before Taxation (38,055) 1,467 Provision for Taxation

- Current Tax (MAT) - 229

- Excess provision of Fringe Benefit Tax written back - (14)

Profit after Taxation (38,055) 1252

Balance Brought Forward 163,342 162,090

Amount available for Appropriations 125,287 163,342

2. Financial Performance

The production of Phthalic Anhydride (PA) at Raichur, Karnataka, for the year was 9452 MT at 78.76% as against 12072 MT at 100.60% during the previous year 2009-2010. The production was less due to stoppage of Plant during the year due to breakdown and free in the Plant and also for routine maintenance work on one occasion. The Maleic Anhydride (MA) production at Taloja, Maharashtra, was 2756 MT as against 2553 MT during the previous year. The Net Sales Turnover of the Company was Rs. 775,942 thousand as against Rs. 823,664 thousand during the previous year. Profit/(Loss) before Interest and tax was at (Rs.10,148) thousand as against Rs. 24,483 thousand during the previous year. After taking into account the Interest and provision for tax there was a Net Loss of (Rs. 38,055) thousand as against Net Profit of Rs. 1,252 thousand in the previous year.

3. Dividend

Your Directors do not recommend any dividend for the year under review.

4. Sale of Synthetic Industrial Diamonds Division

The Company has sold the property admeasuring 5399 square meters at Panoli, Gujarat which was a non-operational unit for manufacture of Synthetic Industrial Diamonds.

6. Group

Pursuant to intimation from the Promoter(s) and in accordance with Regulation 3(1)(e) of the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997 regarding identifcation of persons constituting "Group" (within the meaning as defned in the Monopolies and Restrictive Trade Practices Act, 1969) are disclosed in this Annual report as separate disclosure.

7. Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed and there are no material departures from the same;

b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the loss of the Company for the year ended on that date;

c) proper and sufficient care has been taken 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/ detecting fraud and other irregularities; and

d) the annual accounts of the Company have been prepared on a going concern basis.

8. Fixed Deposits

The Company had accepted fixed deposits of 1 crore from private resources at 9 % interest for one year which would mature on 22nd November 2011. The Company has maintained 15% of the matured amount in liquid assets as per the Companies (Fixed Deposit) Rules, 1988.

9. Directors

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Anil Kochar and Shri Shrikant Somani, Directors retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

10. Particulars of Employees

None of the employees of the Company was in receipt of monthly remuneration of Rs. 500,000/- or more. Hence the provisions of Section 217 (2A) of the Companies Act, 1956 are not applicable.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Particulars with respect to conservation of energy etc. required as per section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto.

12. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report together with the Auditors' Certificate on compliance of the conditions of Corporate Governance form part of this Annual Report.

13. Auditors and Audit Report

The Company's Auditors, M/s. Hariharan & Co., Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors commend their appointment for the ensuing year. Observations made in paragraphs 4(e) of the Auditors Report have been fully explained in Note No. 3 of Schedule 18.

14. Cost Auditors

In terms of the Order issued by the Central Government under Section 233B of the Companies Act, 1956, the Company was required to appoint cost auditors to get the audit of the cost records of the Company done by a Cost accountant for the year 2010-2011 and thereafter. Accordingly the Company has appointed Mr. Sushil Kumar Agarwal, Practising Cost Accountant, an associate member of the Cost and Works Accountants of India (ICWAI). The Cost Audit Report for the year 2010-2011 has been submitted on 4th August 2011.

For the financial year 2011-2012 too, the Company has appointed Mr. Sushil Kumar Agarwal as the cost auditor. He would be required to submit the report by 30th September, 2012.

15. Acknowledgement

Your Directors wish to thank the Government Authorities, Financial Institutions, Banks, customers, vendors and members for their continued support and co-operation. Your Directors also wish to place on record their appreciation for the contribution of the employees at all levels for their dedicated service.

For and on behalf of the Board

M M Dhanuka

Mumbai Chairman & Managing Director

4th August, 2011

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Mar 31, 2010

The Directors hereby present the Fortieth Annual Report alongwith audited Accounts of the Company for the fnancial year ended 31 March 2010.

1. Financial Results

2009-2010 2008-2009

Rupees in thousands

Gross Sales 893036 783525

Less : Excise Duty 69372 85640

Net Sales 823664 697885

Other Income 6278 14591

829942 712476

Gross Proft 71178 70875

Less :

Interest & Finance Charges 23016 18355

Depreciation/Amortisation 46695 46948

Proft/(Loss) before Taxation 1467 5572

Provision for Taxation

- Current Tax (MAT) 229 577

- Fringe Beneft Tax -- 492

- Excess provision of Fringe Beneft Tax written back (14) (10) Proft after Taxation 1252 4513 Balance Brought Forward 162090 157577 Amount available for Appropriations 163342 162090

2. Financial Performance

The overall performance of the Company was satisfactory with Gross Sales Turnover of the Company higher at Rs. 893036 thousand as against Rs. 783525 thousand during the previous year. Proft before Interest, Depreciation and tax was at Rs. 71178 thousand as against Rs. 70875 thousand during the previous year. After taking into account the Interest, Depreciation and provision for tax there was a Net Proft of Rs. 1252 thousand as against Rs. 4513 thousand in the previous year.

3. Dividend

Your Directors do not recommend any dividend for the year under review.

4. Managements Discussion and Analysis

Performance Review

The Companys PA production at Raichur, Karnataka was at 12072 MT at 100.60 % as against 9604 MT at 80.03 %. The MA plants at Taloja, Maharashtra operated satisfactorily for most part of the year, the production being

2553 MT. as against 2309 MT. during the previous year. The production of MA improved due to better extraction of Maleic acid from wash water.

In order to cater to the working capital requirements the Company has raised Rs. 7 crores (fund based and non-fund based) from Saraswat Co-operative Bank Ltd. against the security of the movable and immovable assets of the Company and personal guarantee of two promoter Directors. The limits are being utilised depending upon the requirement of the Company.

Taxes and Duties

The Company has contributed Rs. 92141 thousand to the Central and State Exchequer by way of Excise Duty, Sales Tax (including Surcharge & Entry Tax), Income Tax, Wealth Tax, Professional Tax and Customs Duty.

Opportunities, Concerns and Threats

The year 2008-2009 witnessed a sharp volatility in crude oil prices due to which there was wide fuctuation in the PA and down stream petro product prices. The prices were at the peak during the frst half of 2008 and thereafter there was a steep fall due to sudden global economic recession. However during 2009-2010 the situation started improving with rise in crude oil prices therefore showing signs of economic recovery.

The global economic recession though had its effect in India, the impact was not signifcant. The domestic prices of PA and MA since the frst quarter of 2009 witnessed upward momentum and are now stable resulting in better sales realization and margins. The implementation of Safeguards duty by the Government of 25% and 15% in two tranches from January 2009 to June 2009 and from July 2009 to December 2009 respectively added to further improvement in PA prices. However after December 2009 their was surge in imports and hence their was pressure on local PA prices. But due to increased demand for PA from user industry, the Company hopes that the prices should remain steady during the current year.

The demand for PA is expected to improve in the near future due to substantial and broad based growth in the user industries like PVC, plasticizers, paints, resins, constructions, marine and other speciality chemicals which are expected to grow by nearly 10-12% cumulatively.

The Indian economy is expected to grow well over 8% for the current year with renewed thrust on infrastructure and other related activities. As a result the demand for industrial products would witness good growth and the petrochemical industry is expected to fare better. The Company expects the PA prices to remain stable in the near future with an upward bias.

Our country has been relatively insulated from the global recession without any signifcant impact on the growth of the industries and the petrochemical industry in particular. There are signs of recovery due to the stable crude oil prices. The PA industry continues to remain under pricing pressures and volatility, demand supply mis-match, government policies, exchange rate risk, imports and other technical and environmental risks. The Board of Directors do a periodic assessment of the risks through a means of properly defned framework resulting in minimization of risks involved.

Risk Management

Technical/Operational Risk

The Companys Plants are continuous process plants which are subject to production and operational hazards viz. accidents and/or occurance of fre, storage, electricity, insurance, toxic and corrosive nature of chemicals etc. The Company mitigates such issues by adequate insurance of Plants and supply of electricity from State Grid or DG sets and maintenance of plants on day to day basis by trained technical personnel.

Product/Market Risk

The Company operates in Single Segment i.e. Phthalic Anhydride and Maleic Anhydride and majority of the product is sold in Western Zone and the balance is sold in Northern and Southern Zones. There are no exports at present. Our product is sold to direct customers and trade receivables are normally recovered within 15-30 days and hence the cash fows and proftability is maintained. The sales team manages the delivery of products and recovery of payments is monitored on day to day basis and the cash fows are maintained in order to minimise risk.

Raw material procurement Risk

The main raw material Orthoxylene (OX) is procured locally and if there is any supply problem the same is imported. The Company is vulnerable to price volatility and supply constraints. However the increase in prices of raw material is normally passed on to the customers, but in case the same cannot be passed there is pressure on margins.

The procurement of raw material is done locally on monthly contract basis in order to mitigate the exchange rate risk and uninterrupted supply of material. In case of supply constraints the same is imported.

Interest Rate Risk

The Company has availed working capital facilities from Banks and interest is serviced from current realisations. There are no foreign currency loans and hence there is no exchange rate risk.

Economic and Geo Political Risk

The Company keeps abreast with the various economic developments and regularly reviews the changes in the applicable government policies affecting the operations of the Company.

Outlook

The PA prices improved since January 2009 and are now stable and expected to remain so in the near future. The Company foresees an uninterrupted production and sales and better price realisations in the current year.

Postal Ballot

Under Section 192A of the Companies Act, 1956 the Company conducted the Postal Ballot by issuing a notice dated 18th November, 2009 to the shareholders seeking their approval under Section 17 read with Section 149 (2A) of the Companies Act, 1956 for venturing into Software Development. Shareholders of the Company approved the resolution with requisite majority.

The Company has received the commencement certifcate from the Registrar of Companies, Bangalore, Karnataka.

Internal Control System

The Company has a well established framework of internal controls in operation, including suitable monitoring procedures and self-assessment exercises. In addition to external audit, the fnancial and operating controls of the Company at various locations are reviewed by the internal auditors, who report their fndings to the Audit Committee of the Board. Compliance with laws and regulations is also monitored. Additionally the Directors and Senior management personnel are required to certify on an annual basis the adherence to the Code of Conduct adopted by the Company.

Human Resource Development/Industrial Relations

Industrial relations continued to remain cordial at all the manufacturing units of the Company. The Directors acknowledge the support and co-operation from employees at all levels.

As of 31st March 2010, the Company had 258 employees on its rolls.

Cautionary Statement

Certain statements in the ‘Management Discussion and Analysis’ section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

5. Group

Pursuant to intimation from the Promoter(s) and in accordance with Regulation 3(1)(e) of the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997 regarding identifcation of persons constituting "Group" (within the meaning as defned in the Monopolies and Restrictive Trade Practices Act, 1969) are disclosed in this Annual report as separate disclosure.

6. Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confrm that -

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

b) appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the fnancial year and of the proft or loss of the Company for that period ;

c) proper and suffcient care has been taken 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/ detecting fraud and other irregularities ;

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

7. Fixed Deposits

The Company has not accepted any fxed deposits and as such no amount of principal or interest was outstanding as of the balance sheet date.

8. Auditors Report

Observations made in paragraphs 4(e) of the Auditors Report have been fully explained in Note No. 3 of Schedule 18.

9. Directors

Shri Nikunj Dhanuka and Shri S N Maheshwari, Directors retire by rotation and being eligible offer themselves for reappointment.

10. Particulars of Employees

Except Shri M M Dhanuka, Managing Director, there is no other employee drawing the requisite remuneration in terms of Section 217(2A) of the Companies Act, 1956. The statement of remuneration of Shri M M Dhanuka is annexed to this report.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars with respect to conservation of energy etc. required as per section 217(1)(e) of the Companies Act, 1956 are annexed hereto.

12. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report together with the Auditors’ Certifcate on compliance of the conditions of Corporate Governance form part of this Annual Report.

13. Auditors

The Companys Auditors, M/s. Hariharan & Co., Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors commend their appointment for the ensuing year.

14. Cost Auditors

Pursuant to the provisions of Section 233 B of the Companies Act, 1956 and as required by the Central Government, M/s. Aspi Bhesania & Co., Cost Accountants has been appointed to carry out audit of cost accounts relating to Maleic Anhydride (MA) every year.

15. Acknowledgement

Your Directors wish to thank the Government Authorities, Financial Institutions, Shareholders and Bankers for their continued support. They wish to place on record their appreciation for the contribution of the employees at all levels for their dedicated service.

For and on behalf of the Board

M M Dhanuka

Chairman & Managing Director

Mumbai

21st May, 2010