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Directors Report of Tuticorin Alkali Chemicals & Fertilizers Ltd.

Mar 31, 2017

To

The Members

The Directors present the 44th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2017.

FINANCIAL RESULTS

The following are the financial highlights:- (Rupees in Crores)

DESCRIPTION

2016-17

2015-16

Sales Turnover (Net of Excise Duty and Trade Discount)

132.55

156.54

Gross Loss after meeting all expenses but before providing depreciation and interest

30.39

15.06

Add: Interest

1.70

5.13

Cash Loss

32.09

20.19

Add: Depreciation for the year

2.42

2.12

Extraordinary Items

--

55.95

Net Profit / (Loss) for the year

(34.51)

33.64

Accumulated Loss

197.31

162.69

EPS & Diluted EPS

(24.16)

21.90

During the Financial Year, since November 2016, the Plant operated only with raw material CO2 gas from the captive CO2 Plant without any supplies from SPIC. Even though the Plants operated continuously, the capacity utilization was low due to the teething problems in the CO2 Plant, which are being attended. Even during the period till November, when CO2 gas was received from SPIC, the capacity utilization was low due to restricted availability of the raw material. SPIC restarted their Plant only by May 2016 and hence about 45 days of production was lost at the beginning of the year and in January 2017, when water supply was discontinued suddenly by TWAD, the Plants were shutdown for 9 days till the time alternate supplies were arranged. Thus totally, including the maintenance stoppages, production was lost for 73 days. Because of the high cost of purchased water from Private Sources, increasing coal prices and decreasing realization on the Ammonium Chloride sales, the loss for the last quarter was high and for the year it was Rs.34.51 crores. The production and sales were lower compared to last year. During the year 45,463 MT of total Soda Ash and 40,795 MT of Ammonium Chloride were produced.

PRODUCTION AND SALES

The details of production and sales of the finished products for the financial year are as under:

(In Tonnes)

Product

Production

Sales

2016-17

2015-16

2016-17

2015-16

Soda Ash (Light)

44,395

49,275

46,018

51,471

Soda Ash (Dense)

1,047

1,940

1,235

1,697

Ammonium

Chloride

(Fertilizer)

40,795

45,630

41,613

38,325

Sodium

Bicarbonate

565

1,518

576

1,491

DIVIDEND

Your Directors were not able to recommend any dividend in view of the accumulated losses.

MARKET SCENARIO

Even though there was a down trend in the international market price, your Company maintained the price line in view of the lower quantum of product to be sold. The support from the larger consumers was helpful. The prices are expected to improve in the coming Financial Year.

The prices of Ammonium Chloride dramatically scaled down due to decreasing international Ammonia price. China could offer their product at a price which is only 60% of what prevailed in the last financial year. It impacted Company''s capability to export and at the same time the local price had to be readjusted in line with the international price to maintain the indigenous sales. The revenue from exports also went down due to this large drop in selling price.

FUTURE OUTLOOK

The sales in the southern states of India are improving. Your Company can market the entire production when production is improved. Currently, the new entrants and imports can be curtailed for all the grades of product that the Company produces and markets. Hence the outlook is good for improving the sales.

OPPORTUNITIES AND THREATS

Since the markets of southern and eastern states of India are met only by imports or from expensive local modes of transport from western India, it is possible for the Company to increase its presence in these states when production improves.

The principal threat has long been the single source availability of CO2 from SPIC. With the commissioning of the captive CO2 Plant, the perception of threat has come down. Once the technology is perfected, attempt can be made to increase the CO2 production and the Soda Ash Production. This will position the Company better. The Ammonia import facility of Green Star now consists of a single tank and construction of the second tank which is likely to begin soon will further improve the situation.

ENVIRONMENT AND SAFETY

The periodic audits as required under ISO 9001 have been carried out.

WIND MILL

During the year 0.67 lakh units were generated from Wind Turbine Power Generators at Gudimangalam, Tirupur District, as against 2.28 lakh units generated in the previous year.

POWER PURCHASE

Your Company is drawing power under Group Captive Scheme from private power producer. Necessary investments were made based on the approval granted by you during the last AGM. The power is drawn from the month of October 2016.

CAPTIVE SALT WORKS

During the financial year, 15,150 MT of salt could be produced, bettering the 7,458 MT produced last year. We expect to do well in the ensuing year due to the early production achieved and also due to change of the pumps and repair of the salt pans wherever necessary.

BIFR

The Company filed the Draft Rehabilitation Scheme in August 2015. However, further hearings at BIFR did not take place. Your Company has resubmitted an updated DRS with the annual accounts for the year 2015-16 in May 2016. IDBI (Operating Agency), after appraisal and plant visit, forwarded it to BIFR for their consideration. However, before BIFR could take it up for discussions, Sick Industrial Companies (Special Provisions) Act, 1985 was repealed and reference to National Company Law Tribunal (NCLT) is needed with effect from 1.12.2016. Your Company has now petitioned to both NCLT & SEBI for direction to carry forward the recommendations of OA / BIFR., as application under the Insolvency Act cannot be made.

FIXED DEPOSIT

There was no outstanding deposit as at 31st March, 2017. The Company has neither accepted nor renewed any deposits during the year under review.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates on the date of this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Statement was showing the details regarding the development and implementation of Risk Management Policy of the Company is furnished in Annexure 1 and attached to this report. The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Your Company is dependent primarily on SPIC for the supply of CO2 and for receiving the imported Ammonia through their storage system. Your Company has now implemented an independent CO2 Recovery facility which is operational from November 2016. This has reduced the risk considerably. The Board does not envisage any other major

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable as on date in view of the accumulated losses the Company has incurred.

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

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The Company does not fall under the related party with any company.

COMPANY''S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Company''s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors'' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 2 and is attached to this report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had four Board meetings during the financial year under review. Full details are given in the Corporate Governance Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-

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

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

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

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

e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

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

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. G. Ramachandran, Managing Director who got re-elected during last Annual General Meeting held on 4th August 2016, again retires at the forthcoming Annual General Meeting and being eligible offers himself for re-election.

There is no change among the Independent Directors and key managerial personnel during the year under review.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for the continuance / appointment as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

BOARD EVALUATION

Pursuant to the provisions of Section 149 read with Schedule IV of the Companies Act 2013 and conditions of the SEBI (LODR) Regulations 2015, the Independent Directors in their separate meeting held on 31st January, 2017, had reviewed the performance of Non-Independent Director and the Board as a whole.

STATUTORY AUDITORS

As per the provisions of Section 139(2) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, of Statutory Auditors are eligible to be appointed for two terms of five years each provided they are a firm and not an individual. M/s. CNGSN & Associates LLP a firm of Chartered Accountants was the Company''s auditors since 2003-04 and hence has completed the tenure of 10 years, Moreover they have also passed the maximum time allowed for the initial transition period of 3 years from the notification of the Companies Act, 2013 and Rules thereon.

Hence the Board of Directors, on the recommendation of the Audit Committee, at its meeting held today has resolved to appointment

M/s MZSK & Associates, Chartered Accountants, Chennai for a period of five years from 2017-18 to 2021-22. Their appointment and remuneration are subject to your approval. M/s MZSK & Associates Chartered Accounts, Chennai have well been experienced and have sound integrity to conduct the Statutory Audit.

SECRETARIAL AUDITOR

Mr. R Kannan has been appointed by the Board of Directors to carry out the Secretarial Audit for the year ended 31st March, 2017. Secretarial Auditor''s Report is annexed which forms part of this report.

COST AUDIT

As per the Government of India''s directive, the Company''s Cost Reports in respect of Fertilizer - Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March, 2017 are being audited by the Cost Auditor Mr. P R Tantri, who was appointed by the Board with the approval of the Government of India.

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There was no qualification, reservations or adverse remarks made by the Statutory Auditors, M/s. CNGSN & Associates LLP and Secretarial Auditor, Mr. R. Kannan, Practicing Company Secretary, in their reports.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLE BLOWER

Disclosures under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Ratio of the Remuneration of each director to the median Remuneration of the employees of the company for the financial year 2016-17

Mr. G Ramachandran, Managing Director 24.65

Percentage increase in Remuneration of each Director, Chief Financial Officer, Company Secretary in the financial year 2016-17

Managing Director 128% Chief Financial Officer 5% Company Secretary 1%

Percentage increase in the median Remuneration of employees in the financial year 2016-17

8.52%

Number of Permanent Employees on the Rolls of the Company

214

Explanation on the relationship between average increase in remuneration and company performance

Remuneration is less when compared to last year due to retirements and fresh replacements.

Comparison of the Remuneration of the key Managerial Personnel against the performance of the company.

The remuneration to the KMP are considered reasonable taking into account various parameters including the performance of the Company, qualification, experience and contribution of the respective KMPS

Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year / previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of un-listed companies, the variation in the net worth of the company as at the close of current / previous financial year

Description

2016-17

2015-16

Market Cap (Rs. in lakhs)

1975.24

728.94

Price - Earnings Ratio

(0.55)

0.22

Last Issue Price per share

Rs.10.00



POLICY

The Audit Committee consists of M/s. B. Narendran, S. Shankar and S. Asokan all of whom are Independent Directors.

The Company has established a vigil mechanism and oversees through a committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company. Policy is given in Annexure 3.

SHARES

The Company has not bought back any of its shares during the year under review.

The Company has not issued any "Sweat Equity" Shares during the year under review.

No Bonus Shares were issued during the year under review.

The Company has not provided any Stock Option Scheme to the employees.

ANNUAL RETURN

The extracts of Annual Return in Form MGT pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 4 and is attached to this Report.

PARTICULARS OF EMPLOYEES

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Average Managerial Remuneration, other than managerial personnel remains more or less the same as that of previous year.

Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company.

The remuneration to the KMP are considered reasonable taking into account the various parameters including the performance of the Company and the qualification, experience, contribution of the respective KMP.

The key parameters for any variable component of remuneration availed by the Directors.

Sitting Fees.

The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year.

Nil



Company is adopting remuneration guidelines for fixing the remuneration as per the policies laid down by the Nomination and Remuneration Committee.

PARTICULARS AS REQUIRED UNDER RULE 3 OF THE COMPANIES (ACCOUNTS) RULES, 2014 A. Conservation of Energy

1. Steps taken or impact on conservation of energy:

Crystallizer’s insulation and operation are being optimized to reduce the energy consumption. The CO2 production has enabled the Company to reduce the venting of circulating gas, which has improved the efficiency. Use of Centrifugal compressors is still under evaluation.

2. Steps taken for utilizing alternate sources of energy:

A Project, jointly with Group Companies, is under consideration for production and utilization of solar energy.

3. Capital investment in conservation of energy:

CO2 plant reduces the wastage of CO2, thereby saves energy indirectly. No direct investment has been made during the Financial Year.

B. Technology Absorption

(a) The Company has fully utilized the imported Technology of Hitachi Zosen, Japan which was imported in the year 1980.

(b) Expenditure on Research & Development

(i) Capital Nil

(ii) Recurring Nil

(iii) Total Nil

C. Foreign Exchange Earnings and outgo:

(a) Foreign Exchange inflow: Rs.13.03 Crores

(b) Foreign Exchange Outflow: Rs.14.27 Crores

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company''s activities during the year under review. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

DISCLAIMER

Statements in the Management Discussion and Analysis describing the Company''s objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors

Chennai B. NARENDRAN G. RAMACHANDRAN

17th May, 2017 Director Managing Director


Mar 31, 2015

Dear Members,

The Directors present the 42nd Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

The following are the financial highlights:-

(Rupees in Crores)

DESCRIPTION 2014-15 2013-14

Sales Turmover(Net of Excise Duty and Trade 132.36 26.06 Discount)

Gross Loss after meeting all expenses but before providing depreciation and interest 6.72 16.79

Add: Interest 8.41 9.51

Cash Loss 15.13 26.30

Add: Depreciation for the year 1.99 3.98

Loss for the year 17.12 30.28

Accumulated Loss 196.33 179.21

EPS & Diluted EPS (12.41) (21.31)

In the current Financial Year, your Company performed better compared to last year even though it had encountered shutdown for want of raw material Carbon-di-oxide gas (CO2) for 119 days and low production rate since restart in Jan.'15. Your Company had to suspend production from 1st October, 2014 to 13th January, 2015 as the Ammonia Plant of SPIC was under shutdown, which supplies the raw material CO2. SPIC recommenced production in the second week of January 2015 and your Company also started production immediately thereafter. However, required CO2 was not available from SPIC and hence the Plant operated for majority of the days till 31st March, 2015 at around 50% capacity utilisation only. Thus during the year, only 48,285 MT of Soda Ash and 40,415 MT of Ammonium Chloride (Fertilizer) could be produced.

PRODUCTION AND SALES

The details of production and sales of the finished products for the financial year are as under:

(In Tonnes)

Product Production Sales

2014-15 2013-14 2014-15 2013-14

Soda Ash 48,285 9,775 43,782 9,685 (Light)

Soda Ash — --- — 6 (Dense)

Ammonium 40,415 7,672 34,734 4,797 Chloride (Fertiliser)

Sodium — --- — 18 Bicarbonate

DIVIDEND

Your Directors were not able to recommend any dividend in view of the continued losses incurred by the Company.

MARKET SCENARIO

Greater than usual availability of Soda Ash in the southern market from Europe and China, comparatively at a lower price, the infrequent operation of your Plant, were dampeners and resulted in lower sales. Some of the committed users of Soda Ash of your Company are continuing to buy and hence it is felt that the sales can be improved and stabilised once continuous production is ensured which will add to the confidence level of customers.

Ammonium Chloride (Fertilizer) is marketed through Greenstar Fertilizers Limited as already reported in the last AGM. The market is steady and it is expected that both Soda Ash and Ammonium Chloride would do well in the coming financial year.

FUTURE OUTLOOK

Your Company markets its Soda Ash in all the four southern states of India. The market conditions seem to have improved but your Company has to encounter the large imports that have started arriving. Due to this, it is expected that the selling price of Soda Ash may slightly get depressed during the next financial year.

OPPORTUNITIES AND THREATS

By improved operation and higher output, the cost of production can be brought down and the improved market conditions present an opportunity for sale of the entire production in southern markets displacing imports. However, the continuous dumping of products from Eastern Europe and China is a big threat and can destabilise and depress the selling price of Soda Ash.

ENVIRONMENT AND SAFETY

The periodic audits as required for ISO 9001 have been carried out and the recertification has been obtained.

WIND MILL

During the year 1.34 lakh units were generated from 5 Nos. of 250 KW Wind Turbine Power Generators at Gudimangalam, Tirupur District, as against 2.58 lakh units generated in the previous year.

CAPTIVE SALT WORKS

The production during the financial year was only 9,700 MT. The regular production started late and also ended soon in Feb.'15 due to unseasonal rains. The salt works require considerable investment for replacement of the bore well pumps which would be taken up soon to improve the production further.

BIFR

As already reported, ICICI Bank, IDBI Bank and HDFC have assigned their loans to Edelweiss ARC (EW) and the Company is in the process of settling the OTS offer from them and is expected to be completed in the coming Financial Year. TMB also offered a One Time Settlement which was availed and completed on 31st March, 2015. The funds generated by the sale of the 5th floor of the Corporate Office, which was held in a No Lien Account with IDBI, was also utilised in the above settlement, in addition to raising the balance money through internal generation.

FIXED DEPOSIT

There was no outstanding deposit as at 31st March, 2015. However an amount of Rs.0.08 lakhs remains unclaimed (representing one deposit). The Company has neither accepted nor renewed any deposits during the year under review.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and the date of this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Statement showing the details regarding the development and implementation of Risk Management Policy of the Company is furnished in Annexure 1 and attached to this report. The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Your Company is dependent primarily on SPIC for the supply of CO2 and also for receiving the imported Ammonia through their storage system. Your Company is now implementing an independent CO2 Recovery facility which is likely to be operational by the end of the ensuing Financial Year. This may reduce the risk considerably. The Board does not envisage any other major risks.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable as on date in view of the continuous losses the Company has incurred, including the year ended 31st March, 2015.

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

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The Company has procured CO2 from Southern Petrochemical Industries Corporation Limited (SPIC), a Related Party and also used their facility for pumping Ammonia. The value of both the transactions is Rs.482.31 lakhs which is less than 10% of the turnover of the Company for the year under review. The transactions were done at 'arms' length. Accordingly Directors are of the view that, during the year under review, this is not coming under the purview of Section 188 of the Companies Act, 2013.

COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 2 and is attached to this report

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

During the year, four meetings of the Board of Directors were held. Full details are given in the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its Responsibility Statement:-

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

b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

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

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

e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information and

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

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture or Associate Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Thiru G Ramachandran, Managing Director, who got re-elected during last Annual General Meeting held on 14th August, 2014, again retires at the forthcoming Annual General Meeting and being eligible offers himself for re-election.

Tmt. Rita Chandrasekar, who was co-opted as Additional Director on 30th March, 2015, holds the said office till the date of the Annual General Meeting. A notice has been received from a member proposing her candidature for her reappointment.

At the Meeting of the Board of Directors held on 27th May, 2014 Thiru G Ramachandran, Managing Director, Thiru S Nandakumar, Chief Financial Officer and Thiru S Raghavan, Company Secretary were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DECLARATION OF INDEPENDENT DIRECTORS AND BOARD EVALUATION

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for their continuance / appointment as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Pursuant to the procisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non-independent Director and Management, considered/evaluated the Board's performance and Non-independent Director.

The Board evaluated its own performance and its Committees.

STATUTORY AUDITORS

M/s CNGSN & Associates LLP, Chartered Accountants, Chennai were appointed as Statutory Auditors for a period of one year in the Annual General Meeting held on 14th August, 2014. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

SECRETARIAL AUDITOR

Thiru R Kannan has been appointed by the Board of Directors to carry out the Secretarial Audit for the year ended 31st March, 2015. Secretarial Auditor's Report is annexed which forms part of this report.

COST AUDIT

As per the Government of India's directive, the Company's Cost Records in respect of Fertiliser - Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March, 2015 are being audited by the Cost Auditor Thiru P R Tantri, who was appointed by the Board with the approval of the Government of India.

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTISING COMPANY SECRETARY IN THEIR REPORTS

There was no qualification, reservations or adverse remarks made by the Statutory Auditors, M/s. CNGSN & Associates LLP and Secretarial Auditor, Thiru. R. Kannan, Practising Company Secretary, in their reports.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Audit Committee consists of Tvl. B. Narendran, S. Shankar and S. Asokan all of whom are Independent Directors.

The Company has established a vigil mechanism and oversees through a committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of the Company's employees and the Company. Policy is given in Annexure 3.

SHARES

The Company has not bought back any of its shares during the year under review.

The Company has not issued any "Sweat Equity" Shares during the year under review.

No Bonus Shares were issued during the year under review.

The Company has not provided any Stock Option Scheme to the employees.

ANNUAL RETURN

The extracts of Annual Return in Form MGT - 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 4 and is attached to this Report.

PARTICULARS OF EMPLOYEES

The Company has no Employees whose salary exceeds the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(i) THE RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THE EMPLOYEES OF THE COMPANY FOR THE FINANCIAL YEAR - 2014-15.

Sl.No. Name of the Director Ratio

1 Dr R M Krishnan 0.09

2 Mr S Shankar 0.09

3 Mr S Asokan 0.14

4 Mr B Narendran 0.18

5 Mr G Ramachandran 0.76

(ii) THE PERCENTAGE INCREASE IN REMUNERATION OF EACH DIRECTOR, CHIEF FINANCIAL OFFICER, CHIEF EXECUTIVE OFFICER, COMPANY SECRETARY OR MANAGER, IF ANY, IN THE FINANCIAL YEAR - 2014-15.

Sl.No. Particulars %

1 Dr R M Krishnan NIL

2 Mr S Shankar NIL

3 Mr S Asokan NIL

4 Mr B Narendran NIL

5 Mr G Ramachandran NIL

6 Chief Financial Officer NIL

7 Company Secretary 11%

(iii) THE PERCENTAGE INCREASE IN THE MEDIAN REMUNERATION OF EMPLOYEES IN THE FINANCIAL YEAR - 2014-15.

Sl.No. Particulars % Increase

1 Employees Median Remuneration - 4.26 Increase in the FY - 2014-15

(iv) THE NUMBER OF PERMANENT EMPLOYEES ON THE ROLLS OF THE COMPANY

Sl.No. Particulars Total No of employees

1 Number of Employees - As on 211 31.03.2015

(v) THE EXPLANATION ON THE RELATIONSHIP BETWEEN AVERAGE INCREASE IN REMUNERATION AND COMPANY PERFORMANCE.

(Rs. in lakhs)

Sl.No. Particulars 2014-15 2013-14

1 Sales Turnover 13,236.16 2,605.61

2 Average Remuneration 5.97 3.78

During the financial year 2014-15, increase in sales turnover is due to more number of days the plant was operated, resulting in increase in production man hours and consequential increase in remuneration. Also wage revision settlement completed in the year 2014-15 for the last 6 years resulted in increase in remuneration. Percentage increase in average remuneration is 57.78% which is due to inclusion of arrears of salary consequent to fresh wage settlement for the past 6 years.

(vi) COMPARISON OF THE REMUNERATION OF THE KEY MANAGERIAL PERSONNEL AGAINST THE PERFORMANCE OF THE COMPANY.

(Rs. in lakhs)

Sl.No. Particulars 2014-15

1 Sales Turnover 13,236.16

2 Remuneration of Key Managerial 22.62 Personnel

Note: Key Managerial Personnel consists of 3 persons viz:- Managing Director, Chief Financial Officer & Company Secretary.

(vii) VARIATIONS IN THE MARKET CAPITALISATION OF THE COMPANY, PRICE EARNINGS RATIO AS AT THE CLOSING DATE OF THE CURRENT FINANCIAL YEAR / PREVIOUS FINANCIAL YEAR AND PERCENTAGE INCREASE OVER DECREASE IN THE MARKET QUOTATIONS OF THE SHARES OF THE COMPANY IN COMPARISON TO THE RATE AT WHICH THE COMPANY CAME OUT WITH THE LAST PUBLIC OFFER IN CASE OF LISTED COMPANIES, AND IN CASE OF UN-LISTED COMPANIES, THE VARIATIONS IN THE NET WORTH OF THE COMPANY AS AT THE CLOSE OF CURRENT / PREVIOUS FINANCIAL YEAR

VARIATIONS IN MARKET CAPITALISATON

Sl.No. Month Average Share Market Price Capitalisation Rs. Rs. in lakhs

1 April 2014 2.56 378.77

2 May 2014 3.02 446.09

3 June 2014 4.02 594.05

4 July 2014 5.24 775.30

5 August 2014 6.43 951.37

6 September 2014 9.01 1,333.10

7 October 14 7.89 1,167.39

8 November 2014 6.78 1,002.42

9 December 2014 5.00 739.79

10 January 2015 4.27 631.78

11 February 2015 4.99 737.57

12 March 2015 3.72 550.40

PRICE EARNINGS RATIO

Sl.No. Particulars 2014-15 2013-14

1 Price Earnings Ratio (0.32) (0.10)

(viii) AVERAGE PERCENTILE INCREASE ALREADY MADE IN THE SALARIES OF EMPLOYEES OTHER THAN THE MANAGERIAL PERSONNEL IN THE LAST FINANCIAL YEAR AND ITS COMPARISON WITH THE PERCENTILE INCREASE IN THE MANAGERIAL REMUNERATION AND JUSTIFICATION THEREOF AND POINT OUT IF THERE ARE ANY EXCEPTIONAL CIRCUMSTANCES FOR INCREASE IN THE MANAGERIAL REMUNERATION

Rs. in Lakhs

Sl.No. Particulars 2014-15 2013-14

1 a) Average remuneration of Personnel other than Managerial Personnel 3.61 3.59

b) Median remuneration of Personnel other than Managerial Personnel 3.84 3.79

2 a) Average remuneration of Managerial Personnel 7.62 7.55

b) Median remuneration of Managerial Personnel 7.33 6.00

(ix) COMPARISON OF EACH REMUNERATION OF THE KEY MANAGERIAL PERSONNEL AGAINST THE PERFORMANCE OF THE COMPANY.

(Rs. in Lakhs)

Sl.No. Particulars 2014-15

1 Performance of the Company-Sales 13,236.16 Turnover

2 Remuneration of each Key Managerial personnel

Managing Director 3.60

Chief Financial Officer 11.25

Company Secretary 7.77

(x) THE KEY PARAMETERS FOR ANY VARIABLE COMPONENT OF REMUNERATION AVAILED BY THE DIRECTORS

Variable Component of Remuneration availed by Sitting Fees Non-Executive Directors

(xi) THE RATIO OF THE REMUNERATION OF THE HIGHEST PAID DIRECTOR TO THAT OF THE EMPLOYEES WHO ARE NOT DIRECTORS BUT RECEIVE REMUNERATION IN EXCESS OF THE HIGHEST PAID DIRECTOR DURING THE YEAR

Sl.No. Name of The Employee Ratio of Director Remuneration

1 G.Ramachandran GM (W) 0.272

C F O 0.270

(xii) AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY.

Company is adopting remuneration guidelines for fixing the remuneration as per the policies laid down by the Remuneration Committee.

CHANGE OF NAME OF THE COMPANY

The Logo of the Company has been changed and the Directors intend to change the name of the Company from TUTICORIN ALKALI CHEMICALS AND FERTILISERS LIMITED to TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED subject to your approval. A Resolution has been proposed for your approval in the ensuing Annual General Meeting.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

DISCLAIMER

Statements in the Management Discussion and Analysis describing the Company's objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company's operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors B. NARENDRAN G. RAMACHANDRAN Director Managing Director

chennai 20th May,2015


Mar 31, 2014

The Members

The Directors present the 41st Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2014.

Financial Results

The following are the financial highlights:-

(Rupees in Crores)

DESCRIPTION 2013-14 2012-13

Sales Turnover (Net of Excise Duty and Trade 26.06 155.91 Discount)

Gross Loss after meeting all expenses but before providing depreciation and interest 16.79 9.12

Add: Interest 9.51 7.52

Cash Loss 26.30 16.64

Add: Depreciation for the 3.98 4.53 year

Loss for the year 30.28 21.17

Accumulated Loss 179.21 148.93

The year had to encounter a low production and sales scenario. Only Rs.26.06 crores of sales turnover could be achieved. The Plants, which stopped production on 1st March, 2013 due to shutdown of the Ammonia Plant of SPIC, could be restarted only in the month of October''13. After a brief 3 weeks'' operation, again it was shutdown as supply of CO2 from SPIC ceased and recommenced operation on 14th February,''14. Thus in 62 days of operation during the Financial Year, only 9775 MT of Soda Ash and 7672 MT of Ammonium Chloride (Fertiliser) could be produced. Measures were taken to reduce the overheads during the closure/non-operative period and the losses for the year could be curtailed to Rs.30.28 crores. A loss of Rs.21.17 crores was incurred last year.

The Company has declared a closure during the month of June, July and August 2013 due to labour unrest that followed the suggestion to defer a part of the salary and allowances to a subsequent period after restart of the plant, in view of difficulties during prolonged shutdown.

After intervention by the Labour Department and detailed discussions with the Union, the production could be restarted in October''13.

The closure was lifted on 23rd September,''13 and the power supply was restored, which was also disconnected in the month of May''13 by TNEB. Some of the Officers and Staff who have opted to retire early were also taken back on fresh appointment to resume the production.

Production and Sales

The details of production and sales of the finished products for the financial year are as under:

(In Tonnes)

Production Sales Product 2013-14 2012-13 2013-14 2012-13

Soda Ash 9,775 54,700 9,685 53,253 (Light)

Soda Ash --- 2,010 6 2,008 (Dense)

Ammonium 7,672 50,226 4,797 51,052 Chloride (Fertiliser)

Sodium --- 2,023 18 1,992

Bicarbonate

As already explained, only for 62 days the plants were in operation and hence the capacity utilisation is very low.

Dividend

Your Directors were not able to recommend any dividend in view of the continued losses incurred by the Company.

Market Scenario

Due to severe winter in Western Hemisphere, import of Soda Ash into the country was less. Market prices improved due to improved international prices and gap in supply/demand. Thus the local selling prices are comparatively better for the last 2 months of operations in the year. Ammonium Chloride (Fertiliser) price is also steady and is marketed through Green Star Fertilisers Limited along with other Fertilisers manufactured by them and SPIC. The market is expected to be good for both Soda Ash and Ammonium Chloride (Fertiliser) in the next financial year.

Future Outlook

Your Company markets its products in all the four southern states. The market conditions have improved continuously in the last one year.

Opportunities and Threats

The conditions in Europe and reduced arrival of products from Eastern Europe into India have provided good opportunities for your Company to improve its operation and stabilise its market.

Risks and Concerns

TAC is dependent on SPIC for CO2. Their level of capacity utilisation and proposal to change over to natural gas reforming will affect the availability of CO2. Hence your Company is exploring the possibility of an independent CO2 recovery facility. Similarly, the Company is also solely dependent on the Ammonia importation terminal at Tuticorin Port.

Environment and Safety

The periodic audits as required for ISO 9001 have been carried out and the recertification has been obtained.

Wind Mill

During the year 2.58 lakh units were generated from 5 Nos. of 250 KW Wind Turbine Power Generators at Gudimangalam, Tirupur District, as against 8.81 lakh units generated in the previous year.

Captive Salt Works

In view of the closure and disconnection of electricity, the production was restricted to 13,802 MT. Operations have been recommenced from end of March 2014 and will be stabilised soon.

BIFR

As already reported, ICICI Bank and IDBI Bank have assigned their outstanding dues from your Company to Edelweiss ARC (EW). Your Company are to avail the settlement plan from them. HDFC has also now assigned their dues to EW and the Company will avail the settlement soon from them. The Company has already sold the 5th floor of the Corporate Office following BIFR guidelines in Feb.''14 and the proceeds will be received in the next financial year as per BIFR guidelines and will continue efforts to sell the remaining two floors.

Fixed Deposit

There was no outstanding deposit as at 31st March, 2014. However an amount of Rs.0.14 lakhs remains unclaimed (representing two deposits).

Directors'' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby declare that:

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

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

c) 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; and

d) the Directors had prepared the annual accounts on a ''going concern'' basis.

Industrial Relations

The Company employs around 211 employees on its roll, including Engineers, Technicians and Trainees. The relationship with the union, which went sour due to the prolonged shutdown between May and October ''13 and the Company declaring "Closure", has now improved considerably. Now the relationship is cordial and the old dues to the employees are being settled gradually.

Particulars of Employees

The Company has no Employees whose salary exceeds the limits prescribed under section 217(2A) of the Companies Act, 1956. Hence information required to be given under the said section read with the Companies (Particulars of Employees) Rules, 1975 as amended has not been provided in this report.

Conservation of Energy, Technology Absorption,

Foreign Exchange Earnings & Outgo

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 the Board of Directors) Rules, 1988, information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Directors

During the year there were no changes in the Directors of your Company:

In terms of Sections 149, 152 read with Schedule IV of the Companies Act, 2013, the Board of Directors have reviewed the declaration made by Independent Directors viz., Thiru B. Narendran, Dr. RM. Krishnan, Tvl. S. Shankar and S. Asokan that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013, and the Board is of the opinion that they fulfill the conditions specified in the Companies Act, 2013 and the rules made there under and is independent of the management. In terms of section 149(10)

of the Companies Act, 2013, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company but shall be eligible for reappointment on passing of a special resolution by the company for a further period of upto five years. The proposal for his appointment as Independent Director, not liable to retire by rotation, for a period of five years has been placed before the shareholders for approval.

Thiru G Ramachandran, who was earlier nominated as a VP/ Whole Time Director, is redesignated as Managing Director from 1st November, 2013. He is also permitted to extend consultancy services for setting up of a Ammonia/Urea Plant. Consequently, he will not receive any salary from TAC and only perks extended.

The two year term of Thiru G. Ramachandran, Managing Director was completed on 11th December, 2013. The Board at its meeting held on 14th November, 2013 has reappointed him for a further period of two years subject to the approval of the shareholders.

Auditors

M/s CNGSN & Associates, Chartered Accountants, Chennai, the retiring Auditors are eligible for reappointment.

With reference to the Statutory Auditor''s remark, vide Point No. 9 (a) and 11 of the Annexure to the Auditor''s Report, that the deferred sales tax and repayments to Financial Institutions and Banks have remained defaulted, the Directors clarify that these will be suitably addressed in the revised DRS being worked out.

Cost Audit

As per the Government of India''s directive, the Company''s Cost Records in respect of Fertiliser - Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March, 2014 are being audited by the Cost Auditor Thiru P R Tantri, who was appointed by the Board with the approval of the Government of India.

Listing of Equity Shares

The Company''s equity shares are listed in the Bombay Stock Exchange Limited.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance and Management Discussion and Analysis together with a Certificate from the Company''s Auditors confirming the compliance of the conditions of Corporate Governance is attached to the report.

Acknowledgements

The Directors express their thanks for the assistance, co-operation and support extended to the Company by the Government of India, the Government of Tamil Nadu, SPIC, IDBI Bank, Tamilnad Mercantile Bank, HDFC, State Bank of India, and other Commercial Banks, Edelweiss ARC and all others who are associated with the Company. The Board wishes to place on record its sincere appreciation for the services rendered by the employees at all levels.

Disclaimer

Statements in the Management Discussion and Analysis describing the Company''s objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors

Chennai B. NARENDRAN G. RAMACHANDRAN 27th May, 2014 Director Managing Director


Mar 31, 2013

To The Members

The Directors present the 40th Annual Report together with the Audited Accounts of the Company for the year ended 31 March 2013.

Financial Results

The following are the financial highlights :-

(Rupees in Crore)

DESCRIPTION 2012-13 2011-12

Sales Turnover Net of Excise Duty and Trade Discount) 155,91 216.12

Gross Loss after meeting all expenses but before providing depreciation and interest 9.12 0.54

Add: Interest 7.52 7.66

Cash Loss 16.64 8.20

Add: Depreciation for the year 4.53 4.59

Loss for the year 21.17 12.79

Accumulated Loss 148.93 127.76

The manufacturing activity was restricted to 228 days during the financial year because of the water shortage and the consequent non-availability of Carbon-di-oxide gas from SPIC. The Company incurred loss of Rs .21.17 crores during the year as against the loss of Rs. 12.79 crores during the previous year.

The losses are primarily due to the lesser number of days of operation, continuing high cost of Ammonia in the international market and the steep increase in the cost of power. Though the selling prices improved, for both Soda Ash and Ammonium Chloride (Fertiliser) compared to last financial year, because of very low capacity utilisation of the Plant at 49.34%, the overall results could not be improved.

Production and Sales

The details of production and sales of the finished products for the financial year are as under:

(In Tonnes)

Product Production Sales 2012-13 2011-12 2012-131 2011-12 Soda Ash (Light) 54,700 77,603 53,253 78,500

Soda Ash 2,010 9,252 2,008 9,858

(Dense)

Ammonium 50,226 78,350 51,052 83,483

Chloride

(Fertiliser)

Sodium 2,023 3,882 1,992 3,893

Bicarbonate

As already explained, the lower production was due to the lesser number of days of operation, which resulted in only 49.34% capacity utilisation.

Dividend

Your Directors were not able to recommend any dividend in view of the continued losses incurred by the Company.

Market Scenario

The market conditions marginally improved. However, the prices fell due to lower international prices. Ammonium Chloride prices held steady. The Company could also improve the domestic prices. In spite of consistent request for supply of Ammonium Chloride, due to long periods of non-production, the Company could not meet the entire demand. Soda Ash market became sluggish and is expected to improve in the next financial year.

Future Outlook

Since the southern markets are improving continuously, it is expected that the entire production can be easily marketed in the southern states.

Opportunities and Threats

The continuing slowing down and the global recession related large scale imports into India from China and Europe will continue to depress the selling price.

Risks and Concerns

The Company continues to be solely dependent on SPIC for the supply of one of the vital raw materials Carbon-di-oxide gas. The proposal of SPIC to change over to Natural Gas reforming also is likely to restrict the availability of the gas. This would necessitate an independent Carbon-di-oxide recovery facility. The Company is also solely dependent on the Ammonia importation terminal at Tuticorin Port. Suitable spare facilities may be needed in the course of time.

Environment and Safety

The periodic audits as required for ISO 9001 have been carried out and the recertification has been obtained.

Wind Mill

During the year, 8.81 lakh units were generated from the Company''s five 250 KW Wind Turbine Power Generators at Gudimangalam, Coimbatore District, as against 6.90 lakh units generated in the previous year.

Captive Salt Works

21,249 Tonnes of industrial grade raw salt was produced at the Company''s salt works at Thoothukudi as against 21,290 Tonnes produced during the previous year. The target of 30,000 Tonnes could not be achieved due to unexpected rains and unfavourable conditions.

BIFR

ICICI Bank Limited & IDBI Bank Limited have assigned their outstanding dues from your Company to Edelweiss ARC, who in turn have now offered a settlement plan. To avail the settlement, BIFR has directed sale of the Corporate Office space situated at "East Coast Centre", 534, Anna Salai, Teynampet, Chennai 600 018, adopting the BIFR Guidelines. IDBI Bank, the Operating Agency, has initiated action in this regard. It is expected that substantial portion of the loan can be settled with the proceeds of the sale of office space in the building. To facilitate this, the Corporate/Principal Office has been shifted to SPIC House at 88, Mount Road, Guindy, Chennai 600 032, with effect from 15 April 2013.

Fixed Deposit

There was no outstanding deposit as at 31 March 2013. However an amount of Rs.0.14 lakh remains unclaimed (representing two deposits).

Directors'' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby declare that:

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

b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2013 and of the loss of the Company for the year ended on that date;

c) 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; and

d) the Directors had prepared the annual accounts on a ''going concern'' basis.

Industrial Relations

The Company employs around 280 employees on its roll, including Engineers, Technicians and Trainees. The relationship with the Union has remained normal.

Particulars of Employees

The Company has no Employees whose salary exceeds the limits prescribed under section 217(2A) of the Companies Act, 1956. Hence information required to be given under the said section read with the Companies (Particulars of Employees) Rules, 1975 as amended has not been provided in this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

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 the Board of Directors) Rules, 1988, information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Directors

During the year the following changes have taken place in the Board of Directors of your Company:

IDBI Bank have assigned their portion of the loan to Edelweiss ARC and hence rescinded their right to nominate a Director. Accordingly IDBI Bank withdrew Tmt. Vatsala Krishnakumar with effect from 13 April 2013.

Thiru M Jayasankar resigned as a Director from the Board of the Company with effect from 25 April 2013.

Thiru S Shankar and Thiru S Asokan were co-opted as Additional Directors of the Company with effect from 27 May 2013.

The Board wishes to place on record the valuable services rendered by Tmt. Vatsala Krishnakumar and Thiru M Jayasankar during their tenure as Directors of the Company.

In terms of Section 256 of the Companies Act, 1956 Thiru B Narendran retires by rotation and offers himself for re-election.

Auditors

M/s CNGSN & Associates, Chartered Accountants, Chennai, the retiring Auditors are eligible for reappointment.

With reference to the Statutory Auditor''s remark, vide Point No. 9 (a) and 11 of the Annexure to the Auditor''s Report, that the deferred sales tax and repayments to Financial Institutions and Banks have remained defaulted, the Directors clarify that these will be suitably addressed in the revised DRS being worked out.

Cost Audit

As per the Government of India''s directive, the Company''s Cost Records in respect of Fertiliser -Ammonium Chloride and Chemical - Soda Ash for the year ended 31 st March, 2013 are being audited by the Cost Auditor Thiru P R Tantri, who was appointed by the Board with the approval of the Government of India.

Listing of Equity Shares

The Company''s equity shares are listed in the Bombay Stock Exchange Limited.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance and Management Discussion and Analysis together with a Certificate from the Company''s Auditors confirming the compliance of the conditions of Corporate Governance is attached to the report.

Acknowledgements

The Directors express their thanks for the assistance, co-operation and support extended to the Company by the Government of India, the Government of Tamil Nadu, SPIC, IDBI Bank, ICICI Bank, Tamilnad Mercantile Bank, HDFC, State Bank of India, and other Commercial Banks, Edelweiss ARC and all others who are associated with the Company. The Board wishes to place on record its sincere appreciation for the services rendered by the employees at all levels.

Disclaimer

Statements in the Management Discussion and Analysis describing the Company''s objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company''s operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors

Chennai B. NARENDRAN G. RAMACHANDRAN

27 May 2013 Director VP/Whole Time Director


Mar 31, 2012

The Directors present the 39th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2012.

The Directors are pleased to inform the Members that the Company's plant at Thoothukudi, after recommencement of manufacturing operations in the third week of October, 2010 (last financial year), has continuously carried on the manufacturing operations throughout the year, barring few occasions, upto March 8, 2012 when the plant was shutdown for annual maintenance. After annual maintenance the plant was restarted on April 11, 2012 and is operating close to the rated capacities.

Financial Results

The following are the financial highlights:-

(Rupees in Crores)

DESCRIPTION 2011-12 2010-11

Sales Turnover (Net of Excise 216.12 47.60 Duty and Trade Discount)

Gross Loss after meeting all expenses but before providing depreciation and interest 0.54 10.62

Add: Interest 7.66 7.02

Add: Provision for Tax - — —

Fringe Benefit Tax

Cash Loss 8.20 17.64

Add: Depreciation for the year 4.59 4.72

Loss for the year 12.79 22.36

Accumulated Loss 127.76 114.97

The plants operated almost throughout the year and the sales turnover rose impressively to record the highest turnover ever achieved by your Company. However the cash losses and total loss for the year continued but at reduced levels. The losses have come down from Rs.22.36 crores to Rs.12.79 crores. The losses were mainly due to sudden abnormal increase in the price of Ammonia in the international market. The Company imports the required Ammonia, predominantly from Middle East. The selling price of Ammonium Chloride Fertiliser manufactured by the Company using this Ammonia did not go up in unison with the price of Ammonia which resulted in a deficit, which coupled with the low selling price of Soda Ash that prevailed in the first six months of the year resulted in the loss. However, the Plant had to be shutdown from March 8, 2012 to April 11, 2012, in tandem with SPIC Fertiliser Plant for carrying out Annual Maintenance Work. Thus the effect of the improvement in the market conditions could not be utilised in full.

Production and Sales

The details of production and sales of the finished products for the financial year are as under

(in Tonnes)

Production Sales

Product 2011-12 2010-11 2011-12 2010-11

Soda Ash 77,603 26,815 78,500 22,929 (Light)

Soda Ash 9,252 790 9,858 181 (Dense)

Ammonium 78,350 23,105 83,483 17,145 Chloride Fertiliser

Sodium 3,882 225 3,893 214 Bicarbonate

The Directors are happy to inform that your Company has further improved its export market and exported 43,992 Tonnes of Ammonium Chloride Fertiliser to Malaysia and realised the foreign currency amounting to Rs.3,856 lakhs during the year.

Dividend

Your Directors were not able to recommend any dividend in view of the continued losses incurred by the Company.

Market Scenario

The market conditions were sluggish initially, especially in the first six months with low international prices of Soda Ash and low domestic price of Ammonium Chloride Fertiliser. However, the situation improved during the second half and the prices of Soda Ash improved adequately to cover the operating cost. The company also started exporting Ammonium Chloride Fertiliser at a better price compared to local selling prices. During the year your Company exported 43,992 MT of Ammonium Chloride Fertiliser. Scope exists for further improvement in the market conditions and also market share for the products produced by the Company.

Future Outlook

New detergent and glass industries, where the soda ash is used predominantly, are being set up in the southern markets.

The country is also importing significant quantities of soda ash and hence marketing the product at the international price is not difficult and will help to maintain the sales.

Opportunities and Threats

While the expanding down stream industries have created opportunities for the Company to stabilise the market, the global recession and large scale imports from China and Europe can depress the selling price and also reduce the market share. The Anti Dumping Duty on Soda Ash is yet to be implemented.

Risks and Concerns

The company is solely depending on SPIC for one of the vital raw material, Carbon-di-oxide gas. Hence, the supply on continuous basis from them is essential to maintain continuous production of the Company. The pro posal of S PI C to change over to Natural Gas reforming within the next 2-3 years can affect the supply of the above gas from them and the Company has to develop its own source in due course for maintaining the production independently. Thoothukudi Port offers facilities for the import of Ammonia and it is not a great concern with multiple suppliers internationally.

Environment and Safety

The periodic audits as required for ISO 9001 have been carried out and the recertification has been obtained.

Wind Mill

During the year, 6.90 lakh units were generated from 5 Nos. of 250 KW Wind Turbine Power Generators at Gudimangalam, Coimbatore District, as against 5.83 lakh units generated in the previous year.

Captive Salt Works

21,290 Tonnes of industrial grade raw salt was produced at the Company's salt works at Thoothukudi as against 15,175 Tonnes produced during the previous year.

BIFR

In view of no appreciable improvement in the working results of the Company, especially when Ammonia prices ruled very high during the year, the Company could not make much progress in the discussions with the Financial Institutions for restructuring the debt. The Financial Institutions have indicated that they preferred a One Time Settlement (OTS) of the term loan, to restructuring. BIFR has directed the Company and the institutions to arrive at a solution soon. DRS can be submitted to BIFR through the Operating Agency M/s. IDBI Bank Limited, after the settlement has been arrived at.

Fixed Deposit

There was no outstanding deposit as at March 31, 2012. However an amount of Rs.0.14 lakhs remains unclaimed (representing two deposits).

Directors' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby declare that:

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

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the loss of the Company for the year ended on that date;

c) 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; and

d) the Directors had prepared the annual accounts on a 'going concern' basis.

Industrial Relations

As on March 31, 2012, your company had around 362 employees on its roll at different locations, including Engineer, Technicians and Trainees. Wherever necessary, training is imparted at all levels. The relationship with the union has remained normal.

Particulars of Employees

The Company has no Employees whose salary exceeds the limits prescribed under section 217(2A) of the Companies Act, 1956. Hence information required to be given under the said section read with the Companies (Particulars of Employees) Rules, 1975 as amended has not been provided in this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

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 the Board of Directors) Rules, 1988, information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Directors

During the year the following changes have taken place in the Board of Directors of your Company:

Thiru G. Ramachandran was co-opted as an Additional Director and designated as Vice President / Whole Time Director with effect from December 12, 2011.

Thiru S. Chandramohan resigned as the Managing Director of the Company with effect from December 31, 2011.

Thiru B. Narendran and Dr. RM. Krishnan were co-opted as Additional Directors of the Company with effect from January 18, 2012.

Dr. A. C. Muthiah, Thiru Ashwin C Muthiah and Thiru R. Soundararajan have resigned from the Board of Directors of the Company from January 18, 2012. Thiru B. Narendran has been nominated as the Chairman of the Audit Committee in place of Thiru R. Soundararajan.

The Board wishes to place on record the valuable services rendered by Dr. A. C. Muthiah, Tvl. Ashwin C Muthiah, R. Soundararajan and S. Chandramohan during their tenure as Chairman, Directors and Managing Director of the Company, respectively.

In terms of Section 256 of the Companies Act, 1956 Thiru M. Jayasankar retires by rotation and offers himself for re- election.

Auditors

M/s CNGSN & Associates, Chartered Accountants, Chennai, the retiring Auditors are eligible for reappointment.

With reference to the Statutory Auditor's remark, vide Point No.9(a) and 11 of the Annexure to the Auditor's Report, that the deferred sales tax and repayments to Financial Institutions and Banks have remained defaulted, the Directors clarify that these will be suitably addressed vide the revised DRS being worked out.

Cost Audit

As per the Government of India's directive, the Company's Cost Records in respect of Fertiliser – Ammonium Chloride and Chemical - Soda Ash for the year ended March 31, 2012 are being audited by the Cost Auditor, Thiru P R Tantri, who was appointed by the Board with the approval of the Government of India.

Listing of Equity Shares

The Company's equity shares are listed in the Bombay Stock Exchange Limited.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance and Management Discussion and Analysis together with a Certificate from the Company's Auditors confirming the compliance of the conditions of Corporate Governance is attached to the report.

Acknowledgements

The Directors express their thanks for the assistance, co- operation and support extended to the Company by the Government of India, the Government of Tamil Nadu, SPIC, IDBI Bank, ICICI Bank, Tamilnad Mercantile Bank, HDFC, State Bank of India and other Commercial Banks and all others who are associated with the Company. The Board wishes to place on record its sincere appreciation for the services rendered by the employees at all levels.

Disclaimer

Statements in the Management Discussion and Analysis describing the Company's objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company's operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors

Chennai M. JAYASANKAR G. RAMACHANDRAN

May 25, 2012 Director VP/Whole Time Director


Mar 31, 2011

The Members

The Directors present the 38th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2011.

The Company is pleased to inform the Members that the Company's plant at Thoothukudi had recommenced its manufacturing operations from the third week of October, '10 consequent to the availability of Carbon-di-oxide (CO2) from SPIC's Ammonia Plant which was restarted during the first week of October '10. The Company's plant after the initial teething trouble has stabilised its operations from March '11.

Financial Results

The following are the financial highlights:-

(Rupees in Crores)

DESCRIPTION 2010-11 2009-10

Sales Turnover (Net of Excise 47.60 7.27 Duty and Trade Discount)

Gross Loss after meeting all expenses but before providing depreciation and interest 10.62 14.91

Add: Interest 7.02 6.35

Add: Provision for Tax - 001

Fringe Benefit Tax Cash Loss 17.64 21.27

Add: Depreciation for the 4.72 4.81 year

Loss for the year 22.36 26.08

Net Loss (Balance brought forward from previous year 92.61 66.53 after adjustment)

Accumulated Loss 114.97 92.61

For the year ended March 31, 2011, the Company has incurred a net loss of Rs.22.36 crores due to shut down of the plant from April '10 to October '10 due to non-availability of CO2. Arising out of the shut down, the actual production during the Financial Year was only for 146 days.

Production and Sales

The details of production and sales of the finished products during the year ended March, 31 2011 are given below;

(in Tonnes) Product Production Sales

Soda Ash (Light) 26,815 22,929 Soda Ash (Dense) 790 181

Ammonium Chloride Fertiliser 23,105 17,145

Sodium Bicarbonate 225 214

Note: Since there was no production and sales for the year ended 31.3.10, comparative figures were not shown in the above statement.

The Company had received an Export Order from Malaysia for 15,600 Tonnes of Ammonium Chloride Fertiliser, out of which it had completed despatch of 9,490 Tonnes. The balance quantity of 6,110 Tonnes will be despatched by July 15, 2011. The export order is likely to be continued in the months to come.

Wind Mill

During the year, 5.83 lakh units were generated from 5 Nos. of 250 KW Wind Operated Electricity Generators at Gudimangalam, Coimbatore District, as against 6.23 lakh units generated in the previous year.

Captive Salt Works

During the year salt production was 15,175 Tonnes at the Company's salt works as against 14,106 Tonnes produced during the previous year.

Trading

Trading of Phospo Gypsum was stopped due to thin margin. However the Company had traded a marginal quantity of 2,691 Tonnes compared to 40,845 Tonnes traded during the previous year.

BIFR

The restructuring proposal of the Company with the term loan lenders and working capital bankers is likely to be finalised during June '11 by the Empowered Group of the Corporate Debt Restructuring (CDR) Cell at Mumbai. Thereafter the Draft Rehabilitation Scheme (DRS) of the Company would be submitted with the approval of all the secured lenders to BIFR through the Operating Agency viz., IDBI Bank Limited for approval by BIFR.

Fixed Deposit

There was no outstanding deposit as at March 31, 2011. However an amount of Rs.0.29 lakh remains unclaimed (representing three deposits).

Directors' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby declare that:

a. in the preparation of the accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the loss of the Company for the year ended on that date;

c. 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; and

d. the Directors had prepared the annual accounts on a 'going concern' basis.

Industrial Relations

Industrial relations continued to remain cordial.

Particulars of Employees

The Company has no Employees whose salary exceeds the limits prescribed under section 217(2A) of the Companies Act, 1956. Hence information required to be given under the said section read with the Companies (Particulars of Employees) Rules, 1975 as amended has not been provided in this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

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 the Board of Directors) Rules, 1988, information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Directors

There was no change in the Directors of the Company during the year. In terms of Section 256 of the Companies Act, 1956, Thiru R Soundararajan, Director, retires by rotation and being eligible, offers himself for re-election.

Auditors

M/s CNGSN & Associates, Chartered Accountants, Chennai, the retiring Auditors are eligible for reappointment.

Statutory Auditors in the Annexure to the Auditors Report (point Nos. 9. a. and 11) had mentioned the non remittance of Deferred Sales Tax of Rs.243.72 lakhs and default in repayments to Financial Institution and Banks amounting to Rs.4,354.43 lakhs. In this connection the Directors wish to inform that the above dues had been restructured and addressed in the Draft Rehabilitation Scheme submitted to the Operating Agency viz, IDBI Bank Limited which are subject to the approval of the lenders and BIFR.

Cost Audit

As per the Government of India's directive, the Company's Cost Records in respect of Fertiliser – Ammonium Chloride and Chemical - Soda Ash for the year ended March 31, 2011 are being audited by the Cost Auditor Thiru P R Tantri, who was appointed by the Board with the approval of the Government of India.

Listing of Equity Shares

The Company's equity shares are listed in the Bombay Stock Exchange Limited.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance and Management Discussion and Analysis together with a Certificate from the Company's Auditors confirming the compliance of the conditions of Corporate Governance is attached to the report.

Acknowledgements

The Directors express their thanks for the assistance, co- operation and support extended to the Company by the Government of India, the Government of Tamil Nadu, SPIC, IDBI Bank, ICICI Bank, Tamilnad Mercantile Bank, HDFC, State Bank of India and other Commercial Banks and all others who are associated with the Company. The Board wishes to place on record its sincere appreciation for the services rendered by the employees at all levels.

For and on behalf of the Board of Directors A.C. MUTHIAH Chairman Chennai June 16, 2011


Mar 31, 2010

The Directors hereby present the 37th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2010.

Companys Plants continued to be under shut down for the last three years, due to non-availability of Carbon-di-oxide(Co2) from SPIC, owing to shut down of SPICs Ammonia Plant. Hence, there was no manufacturing operation during the year.

SPIC is expected to restart its Ammonia Plant in August 2010, which would enable the supply of Co2 to the Company so that the manufacturing operations of the Company could commence thereafter. In order to facilitate the smooth restart of the Companys Plant, refurbishment of Companys Plant and Machinery has already started and the work is expected to be completed in August 2010.

The Board for Industrial and Financial Reconstruction (BIFR) has declared the Company as a Sick Industrial Undertaking effective from July 14, 2009 and appointed IDBI Bank Limited as the Operating Agency (OA) for finalising a suitable rehabilitation package for revival of the Company. The Company is in discussion with its lenders and is in the process of filing a fully tied up Draft Rehabilitation Scheme to BIFR by end of July 2010.

Financial Results

The following are the financial highlights:-

(Rupees in Crores)

DESCRIPTION 2009-10 2007-09

(12 months) (18 months)

Sales Turnover (Net of Excise 7.27 14.43

Duty and Trade Discount)

Gross Loss after meeting all

expenses but before

providing depreciation

and interest 14.91 16.29

Add: Interest 6.35 8.76

Add: Provision for Tax -

Fringe Benefit Tax 0.01 0.08

Cash Loss 21.27 25.13

Add: Depreciation for the

4.81 7.37

year

Loss for the year 26.08 32.50

Net Loss brought forward

from previous year after 66.53 34.03

adjustment

Accumulated Loss 92.61 66.53



During the year ended March 31, 2010, your Company has incurred a net loss of Rs.26.08 crores due to continuous shut down of the Plant for the entire year due to non-availability ofC02.

Wind Mill

During the year, 6.23 lakh units were generated from 5 Nos. of 250 KW Wind Operated Electricity Generators at Gudimangalam, Coimbatore District, as against 5.91 lakh units generated in the last 18 months period.

Captive Salt Works

During the year salt production was 14,106 MT at the Companys salt works as against 13,680 MT produced during the previous 18 months period.

Trading

During the year the Company has commenced trading of Phospo Gypsum, used for manufacturing cement, and sold 40,845 Tonnes.

Fixed Deposit

There was no outstanding deposit as at March 31, 2010. However an amount of Rs.0.39 lakh remains unclaimed (representing four deposits).

Directors Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby declare that:

a. in the preparation of the accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the loss of the Company for the year ended on that date;

c. 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; and

d. the Directors had prepared the annual accounts on a going concern basis.

Industrial Relations

Industrial relations continued to remain cordial.

Particulars of Employees

A statement giving particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of this Report is annexed hereto.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

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 the Board of Directors) Rules, 1988, information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Directors

There was no change in the Directors of the Company during the year. In terms of Section 256 of the Companies Act, 1956, Thiru Ashwin C Muthiah, Director, retires by rotation and being eligible, offers himself for re-election.

Auditors

M/s. CNGSN & Associates, Chartered Accountants, Chennai the retiring Auditors, are eligible for reappointment.

With regard to the observation of the Auditors, the Board of Directors are taking all possible steps for recommencement of manufacturing operations by August/September 2010.

Cost Audit

Since there was no manufacturing activity during the year ended March 31, 2010, it is proposed to obtain exemption, from the Ministry of Corporate Affairs, Government of India, from conducting the Cost Audit for Fertiliser - Ammonium Chloride and Chemical - Soda Ash.

Listing of Equity Shares

The Companys equity shares are listed in the Bombay Stock Exchange.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance and Management Discussion and Analysis together with a Certificate from the Companys Auditors confirming the compliance of the conditions of Corporate Governance is attached to the report.

Acknowledgements

The Directors express their thanks for the assistance, co- operation and support extended to the Company by the Government of India, the Government of Tamil Nadu, SPIC, IDBI Bank, ICICI Bank, Tamilnad Mercantile Bank, HDFC, State Bank of India and other Commercial Banks and all others who are associated with the Company. The Board wishes to place on record its sincere appreciation for the services rendered by the employees at all levels.

Chennai

May 3, 2010

For and on behalf of the

Board of Directors

AC.MUTHIAH

Chairman

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